Monday, May 11, 2009

Third Time Lucky?

By Mahesh Rangarajan/DNA/May 11, 2009

The spectre of a Third Front government looms large over the political scene. Both the Congress and its premier rival, the Bharatiya Janata Party (BJP), are struggling to cross the 150 line in the Lok Sabha. The hill is tough to climb for each party though for very different reasons.

Since 1996, it has been impossible for the BJP to aspire to power without brining a significant clutch of regional party's on board. And the Congress has found that for the most part, the key to power lies in befriending the Left parties.

There have been difficult moments in Jayalalithaa's parting with AB Vajpayee in 1999 and in the Left-Congress divide of August 2008. It is sign of the times that large parties are unwilling to foreclose options.

Both fear the return of a Third Front as it would provide a different kind of alternative. At the base of the endurance of such an idea is the simple fact that one of every two Indians does not vote for either the Congress or the BJP.

There have been two Third Front governments in history and both were short-lived. VP Singh lasted from December 1989 till December of the following year. The Deve Gowda and IK Gujral ministries together lasted only 21 months.

On the first occasion, it was the BJP that propped up and then toppled the government. On the latter occasions, Congress did the honours. It is therefore ingenuous for either party to say Third Front ministries are inherently unstable. The prime reason they broke up was to do with the choices of the larger national parties.

More serious is the idea that economic crisis necessarily follows in the wake of such governments. The balance of payments crisis of the summer of 1991 is laid at the doors of VP Singh and Chandrasekhar.

But the seeds of the crisis were laid in the Rajiv Gandhi era, which ended in December 1989. By then, the fiscal deficit of the Union and states combined stood at a hefty 10 per cent.

Similarly, it is often forgotten that the devaluation of the rupee and the painful adjustments that followed happened for the first time under a Congress government and that too one headed by none other than Indira Gandhi. In 1966, after three failed monsoons, India was in a fragile state and there was no option but to accept the bitter medicine prescribed by the US.

More serious is the charge that coalitions fare worse in the sphere of domestic economic policy. VP Singh waived farm loans for over Rs10,000 crore and a few months later announced implementation of the Mandal Commission recommendations for reserving jobs for the OBCs.

Yet, these were followed up in 2004-2009 by Manmohan Singh. The difference was that the farm loan waiver was now seven times as large. And those reservations were extended to higher educational institutions.

In effect, there are larger forces pushing for these changes and they operate even when the governments are headed by one large party or consist of a mosaic of parties. Obviously, it is not coalitions per se but the art and style of governance that matters the most.

The coalitions that have governed India did set down some significant milestones. VP Singh took steps to restore peace in Punjab. The United Front stood for a federalist principle in Indian politics and fell because it refused to give into the Congress bullying on the issue of the dismissal of the Karunanidhi government in Tamil Nadu.

It is indeed the case that coalition regimes have coincided with times of economic retreat. This was the case in 1979-80 when the economy shrunk by 5 per cent. There was similar turbulence though not of such degree in the start and the end of the 1990s.

But for the most part this was also due to larger economic trends at the global level. No one could have predicted the impact of the first Gulf War on oil prices in 1991. If this undid the positive record of the National Front, the United Front's dream budget of 1997 was undone by the Asian flu.

In any case there are major contrasts between 2009 and 1996; the last time such a formation had looked feasible. One is that regional parties have by now been stable partners in alliance governments. On one occasion, even the Union finance minister was from a regional party.

Second, the experience of such parties in administering complex and large economies has grown manifold. Leaders like N Chandrababu Naidu and J Jayalalithaa have run large states with significant overseas trade and large secondary and tertiary sector economies.

There are reasons galore to criticise a Third Front. Most crucially it lacks an arbiter in case differences arise. But the larger charges of economic mismanagement and political drift hardly stand up to serious scrutiny.

It may not be a blessing given India's myriad problems but a Third Front is a political possibility, not a spectre to give anyone sleepless nights. It might even enable more decentralisation in an over-centralised federal polity.

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