Bhupesh Bhandari: For aam aadmi, reforms remain Greek

The one-day bandh called by non-Congress parties went off peacefully. There were no untoward incidents. At least one industry association came out with an estimate of the financial loss to the country by the evening. Strangely, there is no uproar in the social media against the diesel price rise, cap on domestic LPG cylinders and the opening up of the civil aviation and multi-brand retails for foreign direct investment. So, is there a broad buy-in into the recent set of reforms, and the opposition parties are agitating simply because that’s what they are meant to do?

The absence of protest on the social media is a pointer. But internet users, and especially those who use it to express their views, are still a minority in this country. They might one day become the voice of the nation, but that’s still some distance away. The people give their verdict on the voting machine – that’s the best barometer. Elections to Gujarat and Himachal Pradesh will take place later in the year. National issues, especially inflation and unemployment, do affect voter behaviour in state elections but only to an extent. So the two elections might not reflect fully the public opinion on the reforms. The next general elections are slated for 2014. In spite of the fluid political situation, no party really wants to go to elections right now. So we need to wait for at least another year and a half. But it’s quite possible that other events might overtake the reforms of last week.

 

Till then, the simplest test is if the aam admi you come across every day is grumbling. Are your driver and maid demanding more money because they will now have to pay more for bus tickets and cooking gas? Is the neighbourhood grocer grumbling because he will now be driven out of business by Walmart? Are they complaining that foreign airlines will soon dominate Indian skies and flying will become expensive? When I talk to people around me, they don’t. The driver, as well as the maid, consumes about six gas cylinders in a year, and is therefore unaffected by the cap on LPG subsidy. Both buy sugar from the open market, and are unlikely to ask for a raise because sugar sold through the public distribution system, in ration shops, could soon be dearer by up to Rs 3 a kg.

But it’s also true that misconceptions about economic reforms and foreign investment abound in the country. A large swathe of the population still feels subsidies are their birth right. Thanks to the colonial experience, we will stay xenophobic for some more time. I had last year gone to address students of a journalism school. The students were from the Hindi stream; the course director wanted me to speak on economic issues. It began well, but their hostility started to surface when I extolled the virtues of free markets. The questions became tougher – the kinds one had last heard in the early 1990s. At the end of it, I don’t think I was able to convert them into believers in free markets. Most of these students came from the Hindi heartland of Uttar Pradesh and Bihar. What struck me was that these students, after completing the course, which they must have by now, will become interpreters of news and opinion makers.

There is still a long distance to cover for the votaries of free markets. Liberalisation still needs to be sold to the public at large, though it’s been 20 years since the first wave of economic reforms.