21 July 2017 15:35:36 IST

A long-time ‘deskie’, Baskar has spent much of his journalism career on the editorial desk. A keen follower of economic and political matters, he likes to view economic issues from a political economy lens as he believes the economic structure of a society is deeply embedded in its political and social ethos. Apart from writing the PolitEco column for BLoC, Baskar writes book reviews and articles on politics, economics and sports for the BL web edition. Reading and watching films are his other interests, though the choice of books and films are rather eclectic.  A keen follower of sports, especially his beloved Tottenham Hotspur FC, Baskar is an avid long-distance runner.  He hopes to learn music some day!

Economic growth and the two-party system

How a strong multi-party democracy impacts development in the States

At a recent event to commemorate the 10th anniversary of his book India after Gandhi , writer and historian Ramachandra Guha commented, tongue firmly in cheek, that the Congress party, to revive itself, must hand over its presidency to Bihar Chief Minister Nitish Kumar.

His implication, that the Congress is a party without a leader and Nitish Kumar a leader without a party, does, however, have a resonance to it. If the Congress, the principal opposition party, has to be re-energised before the next general elections in 2019, it has to do some serious introspection as the current leadership seems to be utterly defenceless against the Modi-Shah electoral juggernaut.

Democracy, development

Guha was also worried over the decline of the Congress Party as the domination of a single party does not augur well for our democracy. He bemoaned the fact that the two-party system, prevalent in most western democracies, had not taken firm root in India.

During the course of his speech, Guha made some other interesting remarks on the impact of a multi-party democracy on the level of economic development in the States. His view was that the States which had a vibrant, two-party system did better in economic development and growth than others. He cited the examples of Kerala, Tamil Nadu and Himachal Pradesh to bolster his argument.

On the other hand, he called West Bengal, dominated by the CPI (M)-led Left Front for more than three decades, and Gujarat, dominated by the BJP for over two decades, “disasters” — a comment that is sure to raise the hackles of both the Left and the Right.

Alternating power

In Kerala, power has always alternated between the CPI(M)-led LDF and the Congress-led UDF, keeping the politicians on their toes. In Tamil Nadu too, the two Dravidian parties – the DMK and the AIADMK – have usually governed alternately, the last elections in 2016 being an exception. In Himachal too, the Congress and the BJP in keen competition have vied for power in turns.

Tamil Nadu’s comparison with West Bengal seems to be of most interest. Pranab Bardhan, Professor of Economics at the University of California, Berkeley, in an interview with The Telegraph in early 2015, made an interesting comparison between the two States.

He argued that, till the 1980s, Tamil Nadu was below West Bengal in most social and economic indices. But since then Tamil Nadu had pulled ahead and is now one of the better performing States. Bardhan says that the political culture in Tamil Nadu was not inimical to capitalist development, unlike in West Bengal, and also in Tamil Nadu agriculturally dominant castes invested in industry in a big way, making the State a manufacturing hub.

This argument makes sense when one juxtaposes it with Guha’s conjecture of the advantages of a stable two-party system.

Even in the area of social and human development, Tamil Nadu has made rapid strides in the last three decades and is second only to Kerala on most social indices, such as infant mortality, sex ratio, literacy and health care.

Of course the flip side is that the political class in Tamil Nadu is exceptionally corrupt which Bardhan mentions in his interview and something Guha too would readily admit. Bardhan also mentions the populist policies pursued by Tamil Nadu, though he doesn’t necessarily take a negative view of it.

At the crossroads

But despite all these impressive achievements, of late things haven’t been looking too good for the State. Ever since the demise of former Chief Minister J Jayalalithaa, the ruling party, the AIADMK, has been riddled with factionalism and locked in an intra-party battle. There is also a perceived lack of governance and both major factions in the ruling party seem to be at the mercy of the Centre — which seems to be serving the interests of the BJP very well.

Tamil Nadu has also slipped in other economic indices in recent times. Its manufacturing growth in 2016-17 was a mere 1.65 per cent, far below the national average, and growth in revenue receipts has fallen. According to a Kotak Institutional Securities’ report, the State’s share in the total FDI received by the country has dipped to 2.9 per cent, the lowest among the developed States. The State’s poor ranking assigned by the NITI Aayog in ease of doing business has also been an area of concern.

Coupled with all this is the crippling drought, the worst in many years, that has hit the States’ farmers. The only heartening aspect amidst this gloom is that all these issues have been raised and debated in the Tamil Nadu Assembly. So there is, at least, a recognition that, despite its impressive achievements so far, the State is today at the crossroads, and in urgent need of governance and vision.