General Election Part -I The Fall Of The UPA II Government

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It is election time again! It is that time of the year when promises made, achievements glorified, slashing opposition criticism, entrusting belief in forming the government and more importantly thinking about the people for the one time in five years. The congress led UPA government has made a strong presence in the last ten years by consecutively winning for the second time in 2009 as people did believe at that time that it can only be the UPA government led by economist turned politician Dr. Manmohan Singh that can save the country when the world was into the great recession. That faith in a government can’t be made so easily in a country like India as the UPA I forming the government in 2003 did perform well to the people’s expectation in addressing their concern to some extent. The question to be asked now is did they really live upto the expectations the second time? Did they use the second chance to their best? Finally, do they have a chance to win the election again this year?

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Before giving the answer as a straight NO, let me justify myself by providing you a picture with facts to support my opinion, that it is very difficult for the congress to come back to power again this year. First, talking about the people of India, these political parties should know that they are not the same say some twenty years back. The citizens of India have grown from being lame by following one single party to a more concerned and responsible citizens with deeper understanding of the politics and the power of their vote that could change anything. So keeping this in mind it is high time that the national parties change their strategy of playing politics so badly as people are watching their every move particularly the youth – the next generation.

It is no longer sensible in embracing the past achievements and glorifying something good that was made possible years back. As with every individual in any profession one has to constantly improve one’s performance every day to prove one’s mettle to survive.  This aspect is highly important and relevant in politics too as it is the profession that is working for the entire nation. The congress has to understand this and stop highlighting the achievements made in distant past while campaigning for votes. Naturally, people particularly, during election time remember the recent political pay off while casting their votes. According to behavioral economics, during elections, people also sometimes tend to behave irrationally leading to a voting behavior known as Herding according to which people vote for a particular candidate not because he is the best but because he is the most popular. It is an electoral voting behavior that makes a person vote for someone just because his friends and relatives have voted for the same candidate. Considering this, the UPA II government has a very grim situation in winning the election this time.

The UPA II took power in 2009 the second time at a crucial period in the world economic history when the global economy was hit by the financial crisis. The Indian economy was performing somewhat decently and managed to sail through the crisis initially by the policy action taken by the government by providing fiscal stimulus packages but later most of the policies of the government backfired and the economy started to survive by the measures taken by the monetary authority - The RBI. When the global economy was hit by the housing bubble that led to recession and default of major European states everything seemed to turn around as the two superpower economies have plunged into debt trap. The situation in the emerging markets was good till late 2011 and the market watchers praised the emerging economies in surviving the crisis but that was only till early 2012. The situation in India also started to turn bad and the economy started to face a series of problems both in terms of domestic and international.

The stimulus package that was injected to save the economy from getting into deep trouble was helping but it led to a more serious problem called inflation which is now the primary macroeconomic concern of the central bank and the government as well. The huge stimulus and unplanned expenditure is one of the primary reasons for the present inflationary pressure and fiscal deficit. The financial market witnessed many surprising swings. The Nifty and Sensex started with a historic note as the stocks of the emerging markets performed well and showed some positive sign while developed nations were struggling with default and debt repayment. All was well in the financial market till 2010 but since then the Nifty plunged to a drastic low and many stocks started to underperform. The Indian economy was able to achieve a high growth rate of 8.5% and 10.5% in 2009 and 2010 respectively but since then the growth prospects also declined and thus the growth rate fell to 6.3% in 2011 and decade low of 5% in 2012. The estimated growth rate for the year 2013-14 is also below 5 percent. As a result of weak growth prospects and business sentiment, the banks in India, particularly the public sector banks are sitting on a big chunk of bad loans (loans that are been unpaid by the companies for a longer period of time) and also started to go insolvent. The issue of Non Performing Assets (NPA) is one the biggest challenge facing the banking sector. This is when the Indian economy started to face the dose of global crisis. The UPA II government also did not mutually work with the monetary authority at a time when the economy was under serious stress out of global crisis and always expressed its discomfort in whatever policies taken by the RBI.

Next, since mid 2012 the Indian economy started to face international problems such as depreciating rupee and widening CAD. The year 2013 saw rupee touching its all time low and ballooning CAD as result of higher gold imports and low exports. However, the congress did take some measurable steps in containing the CAD but the fiscal deficit still remains high beyond the target. Stalling many investment and business projects is something not good for a developing country like India. The congress seems to have ignored this fact and justifies itself as it is on the path of fiscal consolidation which is very lame.  Spending funds on projects such as Food Security Bill and schemes such as NREGA that lacks clear objectives and delaying infrastructure projects and discouraging business proposal that supports economic growth is seen as a politics played without clear economic knowledge after years of experience with economists Manmohan singh and Chidambaram at its helm. The World Bank recently released its report on “Doing Business in India” in which India fell to 134^th position from 131^st position last year. India has also been ranked lower at 179 in terms of ease of starting a business. All this shows that UPA II was not supportive of growth.

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Coming to the dominant strategy of congress in its second term, it is presently caught in a web of corruption and scandals. It all started with the most popular 2G spectrum which involved congress politicians and government officials illegally undercharging mobile companies for frequency allocation licenses which they would then use to create 2G subscriptions for cell phones. The congress was later involved in a series of scams such as Adarsh housing scam, Bofors scandal, cash for vote scandal, commonwealth games scam, Dial scam, Housing scam, Indian coal allocation scam, Mining scam and Tatra scam. The congress uprightly and allegedly ignored the Jan Lokpal Bill introduced by Anna Hazare in demanding the appointment of an independent body to investigate corruption cases.

Congress considered as a pro farmer alliance did not really help the farmers of India. Inspite of strong opposition from both the farmers side and social activists it allowed 51% FDI in multi brand retail making entry for the establishment of the U.S retail giant Wal-Mart. It was only during the UPA II term there were increasing number of suicides and agitation among the farmers.  More than 17,500 farmers committed suicide between 2002 and 2006. In the year 2012 alone 13,754 farmers committed and attempted suicides. However, it was only during the same UPA period poverty was reduced by 15 percent in the last eight years which is to be noted. The landmark schemes such as National Rural Employment Guarantee Act (NREGA) and Food Security Bill all lacked clear and decisive objectives and has failed to achieve the desired objective of serving the poor. Looking at the safety of the country, the UPA government has failed to score on this point too. India witnessed the worst terror attacks during congress period from 26/11 Mumbai terror attack to the recent Hyderabad bomb blasts. The women of India are worst affected victims of crimes caused domestically. The tragic Nirbaya case is still in the memories of every single Indian seeking for change in the law and order and in providing safety measures to all the women out there to make them feel secure.

Now, looking at the presence of congress in the inter regions and states of India, there too the UPA government has a very little chance of winning except Kerala in south. According to the poll result, though the congress have some foot hold in northern states such as Uttar Pradesh and West Bengal but it doesn't have any down in states such as Tamil Nadu and Andhra Pradesh. In the last Tamil Nadu state election the AIADMK won by massive votes that completely washed away the opponent DMK a close alliance of congress which was also primarily because of corruption and policy inefficiencies. The congress continuously made a habit of ignoring the voices made from southern states that is of both state and national interest. Adding to that, the recent division of Telegana state highlights the fact that congress is on the move to divide the country than to unite. The vote of Indian Muslims is also a key determinant in Indian politics and so going by their side, the UPA will hardly get any votes from them. The recent agitation and anger of a Muslim against the present prime minister in a meeting is evident to this fact.  A look at the election opinion poll results will tell us about what the country is thinking about UPA II government.

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By looking back at all the events happened in the last five years the minus dominates the plus for the congress. Every move from the budget to the freebies highlights the inefficiencies of the UPA II government. Choosing Rahul Gandhi as its next prime ministerial candidate is one of the worst decision made by the UPA. Following social media such as facebook and twitter shows there is hardly any support for the congress to the decision of Rahul as the desired candidate for the prime minister. The internet has made Rahul a laughing stock by throwing videos and funny jokes on him.  Manmohan Singh a man of great caliber has been merely used as watch guard by Sonia Gandhi. Policy paralysis of the present government to all the present ills that India is facing will be the driving factor in this general election while voting. The UPA II scores negative almost in every side from industry to financial sector to the general public. It is the time for the UPA dynasty to fall to make way for a new fresh government to hopefully take India out of a deep shit!