The government\’s National Sample Surveys (NSS) disclosed recently that the proportion of people below the poverty line had risen and inequalities increased in the first 18 months of Mr. Narasimha Rao\’s rule (see accompanying chart). Immediately. several observers declared that the Congress Party had been thrashed in the Karnataka and Andhra Pradesh elections because its reforms had hit the poor.
It struck me that if poverty and inequality increased in the first 18 months of Mr Rao\’s rule. surely voters should have been most upset in that period rather than three years later in Andhra Pradesh and Karnataka. So I went to the library to study how the Congress Party had fared in elections in the 18-month period. I found it had fared rather well.
Its first big test came in November 1991, in by-elections to 15 Lok Sabha and 56 stale assembly seats. It won 8 Lok Sabha and 19 Assembly seats. All newspapers agreed that voting behaviour was roughly unchanged since the general election in June. Now the Congress had benefited in June from a sympathy wave after Rajiv Gandhi\’s assassination, so repeating the same performance in the absence of a sympathy wave in November was a fine result.
Next came the Punjab state elections in April 1991. The Congress won hands down because of a poll boycott by most Akali factions. No kudos here.
Then came the Shimla municipal poll in May 1992. The Congress won 18 of the 20 seats, the other two going to rebel Congressmen. The BJP was whitewashed.
Next came by-elections to two Lok Sabha seats and 19 state assembly seats in June 1992. The results were mixed — Congress gained two seals and lost three for a-net loss of one seal. It fared better than before in north but worse in the south. On balance. there was only a marginal change. Later, in slate elections in 1993. Congress won back Madhya Pradesh and Himachal Pradesh from the BJP.
UNFAVOURABLE CONDITIONS: But let us limit our analysis to the period of worsening poverty (July 1991 to December 1992). This was a period when inflation touched a peak of 17 per cent. austerity measures led to an industrial recession and cut in anti-poverty programmes. the country\’s gold reserves were mortgaged, the rupee was devalued, and IMF conditions had to be accepted for a financial rescue. Conditions were very unfavorable for the ruling party. and the Indian left waited gleefully for a Congress debacle. Instead, Congress fared as well as before. Voters had the maturity to see that the economic mess had been created by three preceding Prime Ministers — Rajiv Gandhi. VP Singh and Chandrashekhar — and that it was silly to blame the Rao regime, which was trying to clear up the mess.
The Left of course, has never had such maturity. It doubtless believes that. after seeing the NSS data in 1994. Voters in Karnataka suddenly realised that they had been impoverished in 1991. Phooey.
Class warriors need to understand there arc multiple explanations for voting trends, few of which have much to do with economics. Many voters are fed up with Congress\’ venality and callousness. The party has estranged Muslims because of its deplorable soft Hindu line on Ayodhya. and the Mandal issue has aided the Janata Dal. Voters see almost all parties as bandits. and so tend to vote out whoever is in power. This helps explain whv Congress fared well in Madhva Pradesh and Himachal Pradesh in 1993. but badly in the south in 1994. The one economic issue which voters readily comprehend is inflation. Rightly, they did not blame the Congress for the inflation of 1991. but (equally rightlv) thev blamed it for inflation in 1994.
CONSUMER BOOM: There are many ironies in the poverty data. They show that poverty and inequalities declined in the consumer durables boom between 1987 and 1990. So much for the myth that the consumer boom helped the middle class at the expense of the poor — in fact the two improved together. Mr Rao\’s austerity measures in 1991 led to a huge recession in consumer durables. Far from helping the poor. this was a period of worsening poverty and inequality. The fortunes of the poor and well-off arc more closely linked than class warriors think.
The data also show that poverty and inequality declined in Rajiv Gandhi\’s last three years in office. Yet. this did not save him from a thrashing in the 1989 general election. Voters were more concerned with corruption than income distribution.
Why is this so? One possibility is that income and equally changes in India are usually se minor that they do not lead. to voter upsurges or revolts. A fall, say 3 per cent in rural income in a lean year will increase the poverty ratio substantially, but rural folk know that agricultural incomes vary with the weather. and get less excited about it than professors. The ratio of the spending of the richest one-fifth to the poorest one-fifth may have risen, from 4.17 to 4.45. but only surveyors armed with computers can really tell the difference. It-would be different if inequality widened from 4.45 to 7.3 (as in, the Philippines) or 18.2 (as in Kenya) — such big shifts would surely outrage voters. But shifts, a few decimal points excite only-intellectuals, not voters.
|Rural Poverty Ratio (%)||Consumption inequality share of richest 20% over poorest 20%|