Friday, January 03, 2014

AAP - a reality check

More than the AAP's success in Delhi, it is the media's treatment of the party that has come as a surprise to me- until one or two days ago.

Let us leave aside the uncritical acceptance of the AAP's approach to corruption- that it is a matter of some bad guys misusing office. One would have expected the media to make the elementary point that corruption is built into social and economic structures. What is talked of as corruption is some individuals taking better advantage of the system than their peers. It is not about tackling the underlying structure at all. When you replace one set of individuals with another, nothing much changes; it is the underlying structure that needs to change.

Mercifully, with the passing of the Lokpal Bill, both AAP and the media have gone beyond tackling corruption as the only or even the central issue. The AAP itself has positioned itself as addressing the needs of the masses. It has played on the perception that corruption is one reason why the masses do not have their basic needs met. That is, conceptually, a better position to take.

Suppose we move on to the bread and butter issues. There is a case for what the AAP has attempted in Delhi, namely, subsidies for water and power, provided such subsidies are carefully targeted and the costs of such subsidies are thought through not only for Delhi but at the national level. It is important to address the question: is the AAP approach to water and power replicable all over the country? In other words, subsidies will have to fit into an acceptable fiscal framework. Astonishingly, the very media, which has been vocal in criticising the UPA for its welfarist approach and for subsidies implied in the Food Security Act, Right to Education etc, seemed bowled over by AAP's rapid fire announcement of power and water subsidies in Delhi.

"AAP DELIVERS ON POLL PROMISE", the headlines boomed. Yes, but at what cost? More broadly, many of the measures favoured by AAP would position it to the left of not just the UPA but the erstwhile CPM in West Bengal. There is, perhaps, space in Indian politics for such a position but is this what the financial press would favour? I thought the weight of media opinion, as also the general economic wisdom, was in favour of moving away from subsidies and towards more investment as a means of addressing the needs of the poor.

Fortunately, in the last couple of days, we are seeing AAP being subjected to a reality check. ET and Business Standard have both voiced serious reservations about the AAP approach. ET comments:
Its water policy seeks to further subsidise those with piped metered connections, barely half the households, never mind that over 50% of Delhi's daily supply is lost in leaky distribution.

The AAP decisions on water and power would have several unintended consequences. For one, the plan for nil water charges for up to 667 litres per day, and a sharp increase in the rates thereafter, would be perverse incentive for meter tampering and exaggerated claims of leakage in the system. What is required, instead, is a vastly improved piped network that reaches all and sundry, and regulated user charges linked to usage. .....  


.....As for power tariffs, we need to eschew needless politicisation of the rates. The AAP government has reduced tariffs 50% by executive order for those consuming up to 400 units a month, who constitute a large majority. It would make the rates probably the cheapest nationally, but also among the most subsidised. Worse, the fiat would discourage badly-needed power investments, including in last-mile distribution.

Business Standard is equally critical:
Responsible governments know that subsidies are easy to declare, and not so easy to take back. There are also leakages and misuses of such subsidies, which in the normal course can be neither plugged nor prevented. In its rush to fulfil campaign promises, the AAP has chosen to overlook the principles of good governance. And, in the act, it has rendered its promise of an audit irrelevant, too. The new government need not be in such a hurry; responsible policy making requires it should ascertain the facts first. If it fails to do so, all its potential may come to naught.

I might add: too much should not made of the superior moral calibre of the leadership of AAP or its commitment to austerity. The idea that there is a special set of people who got together at AAP and who are free from the temptations of power and money and are there only to serve people is ridiculous. There could be some committed individuals (as there are in Congress or BJP or in any other party) but the distribution of virtue or vice in the party as a whole is unlikely to be different from that in society at large. After all, it is not as if members of the AAP were parachuted onto the planet from their abodes in heaven.

As for austerity, that's how the Congress started off (and it still keeps that pretence at AICC meetings where people sit on the floor and are propped up by cushions). We know now what the Congress version of austerity means.

It is best to recognise that the exercise of power requires certain privileges, whether in the form of a large house or office or a certain minimum of security or a police escort to minimise time spent in commuting. It is good that the media has highlighted the twin duplex bungalows to which Kejriwal intends to move; and also the elaborate security that was required at the metros to facilitate AAP members reaching the Ram Lila maidan for the swearing-in ceremony (and this security was, from all accounts, much greater than the deployment at the typical swearing-in function). The media should also have focused on the disturbing fact that Kejriwal has chosen to keep so many important portfolios (home, power etc) to himself. Is it suggested that nobody in AAP qualifies for these positions? One was ominously reminded of AICC general secretary Digivijay Singh's observation that there is a dictatorial streak in Kejriwal.

We need those in power to have a coherent set of policies and the administrative ability to implement those policies; we do not need self-proclaimed ascetics or a set of godmen free from human foibles. The AAP, like any other party, must be judged not by appearances but by the acid test of sustainable performance.
As for power tariffs, we need to eschew needless politicisation of the rates. The AAP government has reduced tariffs 50% by executive order for those consuming up to 400 units a month, who constitute a large majority. It would make the rates probably the cheapest nationally, but also among the most subsidised. Worse, the fiat would discourage badly-needed power investments, including in last-mile distribution.


Read more at:
http://economictimes.indiatimes.com/articleshow/28253857.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
The AAP decisions on water and power would have several unintended consequences. For one, the plan for nil water charges for up to 667 litres per day, and a sharp increase in the rates thereafter, would be perverse incentive for meter tampering and exaggerated claims of leakage in the system. What is required, instead, is a vastly improved piped network that reaches all and sundry, and regulated user charges linked to usage.

Its water policy seeks to further subsidise those with piped metered connections, barely half the households, never mind that over 50% of Delhi's daily supply is lost in leaky distribution.

Read more at:
http://economictimes.indiatimes.com/articleshow/28253857.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
Its water policy seeks to further subsidise those with piped metered connections, barely half the households, never mind that over 50% of Delhi's daily supply is lost in leaky distribution.

Its water policy seeks to further subsidise those with piped metered connections, barely half the households, never mind that over 50% of Delhi's daily supply is lost in leaky distribution.

Its water policy seeks to further subsidise those with piped metered connections, barely half the households, never mind that over 50% of Delhi's daily supply is lost in leaky distribution.







4 comments:

SC said...

I am so glad you've written this article. I am all for honest people joining politics and I understand the anger and disillusionment people have towards the present political system. But, this blind acceptance of the AAP before even seeing them work, is even more worrying.

And then there's been the behaviour of the AAP and its socialist leanings. Sadly, not many of us study the manifestos of political parties. Two things worry me about the AAP..one is their stand that only they are the moral voice of the people, any one who opposes them is against the people.
and secondly, is that they make loud proclamations but their actions always carry with them the addition of a fine print. Remember George Orwell's 'Animal Farm'!!

Anonymous said...

Good to see this post. The social media is also full of AAP praises as well as AAP ridicules. The idea of sustainability is not (and has never been) therefore of policy making in India, at least in the recent years. The subsidies that the AAP government doles out, the overt communication of their policies, and the general way they (AAP ministers and functionaries) conduct themselves, lead me to ask of you this question - who is their target segment: the voters or the media? They have been hugely successful with the media which has translated into huge votes in Urban Delhi. May also happen in constituencies like Urban Bangalore and Urban Mumbai. But the entire country, will media as a target segment change voting behaviour, I am doubtful.

Zankhana Broker said...

I vision this as "Afterall its all in the one big political family". It's all perception management! Earlier it was boss management, its still now, and now its got extended to people's perception management!

Afterall our national anthem says we, Indians consider all Indians as are brothers and sisters (except one / in some cases more than one but less than 10- I guess) and its one big happy (perception management for many and for few - A big reality! ) family :)

Anil said...

Thanks sir....

Really an eye opener for gullible TV viewers...We are always get swayed away with what we feeded with, this time TV media surely gone overstep, in encouraging same set of policies, for which congress got squarely blamed.

This IIT brand will do much damage in coming days...Hope it will not hurt the sentiments of the elites!