Shedding Light on Grey

Politics has never been as dominating on the market’s psyche the way it is presently doing. The inefficacy and in many cases the absence of any clear economic policies of the ruling UPA government have impacted the markets adversely in more ways than one. This is particularly true of the past two years where economic policy making has been the worst. Slow or no project clearances, lack of will to do away with environmental hurdles, uncontrollable inflationary pressures due to supply side constraints and to add to all this came some really preposterous legislations like the Food Security Act and the new Land Acquisition Act. The collective impact of all this has been a slowing economy and in turn a very volatile capital market. 

The need for change at the top executive body of the nation has reached desperate levels today. A strong leader with a stable team and a conclusive mandate to rule is the need of the hour. Lack of decisiveness has hit us hard enough to be ignored any further. With global economies showing signs of a revival, the pertinence of India putting its act together once again and preparing itself for the next round of growth has accentuated. General elections are only a few months away and just as one would have thought that we are very close to a change in regime, a new set of players with a new set of rules has emerged on the political landscape. 

The Changing Political Equations 

The Aam Aadmi Party’s success in the Delhi polls has led to a complete change in the political scene. What seemed would be like a one sided run for the Saffron brigade so far, has suddenly changed. The popularity of a party with the common Indian citizen at its core is now threatening the very basic premise of stability coming back to power. If AAP manages to extrapolate its success in Delhi in other states as well, you would certainly see a changed political environment. Many believe that this scenario is a far cry away. With the recent developments within the party itself, one would want to discount its success rally continuing any further. Yet, it would be good to bear in mind that politics is a game where the outcome is always uncertain until the last ballot is opened.  

So, Is AAP a National Phenomenon?

Politically, taking on giants like the BJP and the Congress is no mean task. For a newly born party which has struck gold in the first ever elections that it contested taking on the might of the established political players is surely not going to be a cake walk. AAP may run out of its beginners luck sooner than people would expect it to. The most important factor that is presently looking at holding back its dream run is the lack of its economic agenda. There is no clearly set national level economic agenda that the party has. Moreover, its recent policy and economic actions in the state of Delhi after it took to power there make its intentions look circumspect.  

The Desirable

With all the above that explains the lack of a clear economic thinking, here is what the economy and in turn the market really needs as of now. A change in guard is surely what the nation is looking out for in the present circumstances. A clearly set economic agenda which can push the country into the next orbit of growth is the need of the hour. This can come through visionary leadership of a closely and tightly knit outfit that can drive the country’s growth on all fronts. 
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AAP’s Economics, humorous or dangerous?

The party (AAP) at this stage doesn’t really seem to be equipped intellectually to set the agenda and pursue it meaningfully for the country’s growth. Look at what it did in Delhi. Reducing the power tariff and supplying free drinking water to the citizens look to be good poll promises. But to keep such promises is a double-edged sword. If you do, your economics will get thrown out of the window and if you don’t, the electorate will throw you out of the window. So, to begin with itself the party seems to be caught in its own clutches. All this reflects badly on the economic sense that prevails within the think tank of the fledgling party. 

Contagion Effect

The worst part of this is, other political outfits are trying to replicate what AAP has done, in a bid to appease the electorate. Look at the recent power tariff cut implemented by the Maharashtra government and you know what we are talking about. Moves like these will literally lead to an abuse of the nation’s economic resources. It would rather be important to rationalize the distribution than offer a free run on them for all. But to think like that, calls for matured statesmanship at work. The fledgling AAP is probably short of thinkers who can help it formulate more practical and nationally important policies than play the populist card in order to spread its wings. The impact of such policies which smack of immature economic thinking will only lead to the deterioration of an already weak economic system.

On The Wrong Path And Misleading Too

AAP has been pursuing politics of populism by doling out freebies to the electorate. India has long suffered on account of the largesse of its politicians. Even a party like the AAP which has basically come to power or is looking at cleansing the system of all its evils is today getting entangled in the politics of populism. There is no scope in the nation’s finances for distribution of resources at no cost. Power and water are just the starting points. If the party has its way, there could be a whole lot of other things to follow. The main point here is that, it is going exactly the way the UPA has been going. While free food came in when the UPA passed the Food Security Bill, the AAP could well end up ensuring all other amenities at no or negligible cost if it comes to power at the centre. This is the worst kind of economics that you would ever have seen in your life. 

The Market’s Concern

In addition to the politics of populism which robs the nation of its resources, the markets are also presently concerned about the various policy reversals that the AAP is talking about at the state level. If this percolates down to the national level, we could well end up going a decade or two behind from where we presently are. This is the last thing that one would expect or want to happen. The ‘anarchist’ style of governance that the AAP has unleashed on Delhi has set eyes rolling and minds thinking on what the party is really about. At Dalal Street Investment Journal, our every effort is to lay bare what is necessary for the good of the markets and the well being of our readers’ wealth creation strategy. It is with this intent that we questioned the Aam Aadmi Party’s think tank on its economic agenda and the way forward. Read on for a detailed interview with the Yogendra Yadav, the well known political analyst of the past and presently an active member of the national executive of the Aam Aadmi Party.
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Clean Sweep; Not Sure

Aam Admi Party’s (AAP) senior leader and chief spokesman Yogendra Yadav cleared the air around the party’s economic agenda and sent a soothing message to investors that they don’t have any fear from AAP in an exclusive interview with Amit Bhanot, Senior Assistant Editor, Dalal Street Investment Journal

Yogendra Yadav
Aam Admi Party’s (AAP) senior leader & chief spokesman

Though AAP is a new party, its popularity gained momentum on a pan India basis. What is the main reason for this attraction of the masses towards the party?

Instead of what the reason is, let me tell you what the reason is not. The reason for the masses to get attracted to our party is not the great organizational strength of the AAP. Honestly, our organizational strength is very limited. There has been a deep disgust with the political establishment, deep anger against the ruling party and a deep suspicion about the opposition within the masses. So, people are looking out for something different and somehow the Delhi elections have given them the sense that there is an alternative to what they presently have. The visibility that Delhi has gained, has given a larger than life appearance to AAP and it has opened a window that can only be called historic. 

So the real reason why masses started associating with us is that the sense of despair and negativity that people usually associate politics with has made way for hope. We have to understand that it is the deep disgust against the ruling establishment as a whole and not just the ruling party that has played a key role. By ruling establishment I mean all the parties which are in power or have been in power in the centre or states over the last 20 years. People are disgusted with all these 25 odd political parties that have managed to get some kind of presence in the parliament, and that is working for us.  

There is a concern among industrialists and investors that if AAP comes to power then India would go from the present state of policy paralysis to one of policy reversal, which would be much more detrimental? What is your take on it?

The word policy paralysis is used in a very limited sense by those enthusiasts of economic reforms, who think that economic reforms have been stalled. I see policy paralysis in a much deeper sense and not in a narrow range of just economic reforms. It is the larger policy vis-à-vis the people, and that has been stalled. So I am not concerned with just a narrow range of economic policies but the entire range of policies in general i.e. policy to do with agriculture, labour, handling corruption and policies as to how political power should be distributed. So, there is a deeper policy paralysis and yes one of the aims of AAP will be to try and address that problem. We are constantly working on it and have looked at it. We do hope that we would be able to provide some kind of policy alternative to the country. 

What is your vision for India?

As I said, we do not start with any given “izm”. We do not start with any pre-packaged ideological position, so our vision doesn’t come from any of the established ideological packages. We begin with some deep convictions and we are willing and open ended towards any solution that works. 

Our conviction is that “Aam Admi” comes first, which is to say that “the last person first.” Our conviction is that the constitutional values of equality, justice and liberty are upper most. It is that, India is a diverse country and diversity is our strength and not our weakness, as also that the power must be returned to the people through radical decentralization. 

How best these convictions can be realized, is a matter on which we are open to solutions and very soon AAP would announce something where we can involve people in consultation. Importantly the economic idea would also be through consultation process with Aam Admi and we have already started it on January 19. We had done some consultation last year and more of these now, so we are moving ahead.  
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Who all have you included in such consultations?

AAP is not a party of any one section of the society. As the Delhi election has shown and proven, it is truly a cross sectional party and its appeal runs through industrialists as much as it runs through the unemployed youth who live in a slum. So we wish to cater to that and we do believe that there is something deeper that binds people of India and connects us to everyone. 

Arvind Kejriwal, The Brain Behind AAP

So we want to find an agenda that can connect all Indians. We don’t believe in those oppositional binaries of the kind that dominated the 20th century like say the capitalist versus labour, farmer versus agriculture labour, middleclass versus poor etc. We don’t believe in that and we want to convince everybody that there is an agenda that can bring all of them together and we are searching for it. 

You said the economic agenda of AAP is in the making. But personally what is your Idea of economic progress? I may have had my opinion on economic progress but at this juncture to articulate my personal opinion would be irrelevant. There was a time when I used to talk about it freely but now what matters is not my personal opinion, but what I share with others and it is only that shared ground, which is politically relevant today. 

As far as AAP’s idea for economic progress is concerned, we have started consultations and should soon be beginning to come out with something. All that I have said is that, it should neither be “left” of 20th century, nor it would be “right.” We want to move beyond left, right or minus. 

Is AAP’s sense of economic progress something that is devoid of corruption but full of poverty? I don’t know from where this thought is coming from as it poses a certain binary, which I don’t understand. Why should elimination of corruption mean poverty? The assumption behind this question is that, eliminating corruption will eliminate all growth and development. I think this is a very wrong assumption that we should get rid of. There are many instances in the world where countries have developed without having obscenely high levels of corruption.

At a time when Investors, particularly in capital markets, were expecting Modi to take on the reins of the country, the sudden emergence of AAP on the national scene is now being seen as a big party spoiler. In that sense what is your message to that genuine investor (not the speculator) community?

Genuine investors would like to see the image of India going up on the world map. A genuine investor will never wish to invest in a country where there is such high level of corruption, such a high degree of policy paralysis and where the long term outlook remains uncertain. AAP is committed to inaugurating a system where everyone will benefit. 

I am glad that you made a distinction between a real investor and a speculator. For an investor the interest will be the real growth, which is not only confined to the service sector but also the manufacturing sector, where the human capital of the country improves and where an honest business is possible. In that sense, I can say, AAP is the best bet for a person who really wants to invest in India but certainly not for a speculator. For a speculator, he can choose his pick as I don’t have any opinion on that. 

So you mean to say that investors don’t have to worry if AAP comes to power?

Why should they be worried? If they are frightened then it may be based on some kind of misconception, misinformation, half-baked information or rumors. AAP is a party which is committed to the wellbeing of all Indians, to the unleashing of the entrepreneurial spirit of India in every sector, primarily in the sectors like manufacturing and so on. It is a party which is committed to the opening up of growth in agriculture and to inculcating an honest business environment which should be very good news for investors. Anyone who is genuinely interested in the wellbeing of India has no reason to fear the AAP.

It has been portrayed by various sections in the existing political system that you are going towards a socialist kind of a structure. Would that be so?

That is totally a misunderstanding because the difficulty is that, we tend to look at the new realities through old spectacles. Old spectacles tell us that the moment someone talks about poor, he must be a socialist. Old spectacles tell us that, the moment one person says I am for the market mechanism, he must be a rightist. We want to move beyond these things. If being socialist means caring for the poor then of course we are socialist and every party in this country is a socialist and above all the constitution of this country is socialist. But if socialism means state control, subsidies and license/quota, “public sector only” then we are not socialist. 

Considering the mood in the country how do you see AAP faring in forthcoming Lok sabha elections?

To be absolutely honest, we don’t know. All we know is that, there is tremendous enthusiasm, energy and hope all over the country. There are inundated offers of people wanting to join the party, support the party and contest for the party. So there is certainly a pulse in the air. It is not confined to a state but spread everywhere. 

There are states like Tamil Nadu, Kerala, Gujarat, West Bengal, which are not our strong areas, but we are getting huge offers from these states as well. We don’t know how much of this enthusiasm will get converted into votes and the real challenge for us is that, whether we have an organizational strain to tap this support and to be able to channelize it and convert this support. 

How many seats is the party is expected to contest in the Loksabha polls and how many of them do you expect to win? We have not yet finalized about the number of seats the party would contest in the Lok sabha elections. We have said repeatedly that we are looking at contesting a substantially large number of seats, but we haven’t yet put a figure to it. It would depend on our assessment of political possibility in each state, on our organizational preparedness and on the nature of candidates.