1. Economic Reforms and Welfare Balance: - Recent election results in India, particularly in Andhra Pradesh, highlight a crucial issue: leaders who focus solely on welfare or development are often ousted. The need for a balanced approach that ensures widespread economic growth is essential.
2. Reducing Income Disparities:
- Sustainable governance requires policies aimed at reducing income disparities and providing means for stable incomes. Lessons can be drawn from countries like Finland, Sweden, Australia, and New Zealand, where managed economies ensure minimal income disparities and affordable living standards.
Post the recent elections for Lok sabha and for Assemblies in some States, particularly Andhra Pradesh, there has been a lot of analysis of the the reasons for ousting of the incumbent leaders or diminishing their influence.
The leaders who totally depended on welfare such as Jagan Mohan Reddy was most mercilessly thrown out of the throne. Earlier Chandrababu Naidu who believed in the economic reforms and the economic model that had evolved from it, mainly, development hoping that the surplus therefrom would percolate to the common man was trounced by Rajasekhar Reddy through his welfare measures that for the first time touched every section of the people particularly the youth and the farmers. To the credit of Rajasekhar Reddy must be said that he had also mixed his welfarerism with development as well but with a greater proportion of the former as the percolation effect of the development was not visible even a decade after their initiation owing to concentration of the benefits of economic reforms in the hands of a small percentage of people.
KCR was shown the door even though he had followed in the foot steps of Rajasekhar Reddy and his outster was mainly attributed to his hubris and corruption rather than the model of development adopted which actually fetched him far greater number of seats than his first victory riding on the wave of Telangana sentiment.
What exactly could be the reason for rejecting the leaders who had followed these three distinct paths namely absolute welfarism, absolute development or a mix of both? This question is baffling though answer to is not elusive.
The resources available to the elected governments are always far less than the resources required to meet the promises made by the leaders for coming to power or to meet all the genuine requirements of the people whether promised or not. This is because the revenues government get are a function of the development that puts money for consumption in the hands of the people which leads to higher tax revenues. There can be no increase in the income of the people without development and therefore there can be no increase in the revenue necessary to satisfy the needs of the people.
So the solution is in the development that should precede the distribution among the needy. Development now is only restricted to a small section of the people whereas incomes of the largest section of the people are stagnant. So,the revenues(taxes) received from this small section of the people are totally insufficient to meet the needs of the majority. As a result, the best of the efforts by the best of the leaders are failing.
This explains why the best of the leaders sometimes fail to be in the good books of the people for a long time.
Reason is that no leader can actually bring about changes in the economy that can increase the income of the largest number of people with a surplus over their normal expenditure so that there will be less need for welfarism and the development will continue to take the country on the path of constant but slow growth.
But this makes the politicians irrelevant, a situation which we can see in countries like a Finland, Sweden, Australia and New Zealand. In New Zealand whose former Prime Minister Jacinda Ardern found nothing charming in the post and left it deliberately to lead a happy domestic life.
Because in these countries the economy has been so managed that income disparities are the lowest and the minimum facilities are available to all the people at a cost that they can afford with their incomes.
So the leaders of the country should understand that if they want continuous patronization from the people, first and foremost thing they should do is to put in policies that will bring down the income disparities and provide people with the means (not freebies) that will help them to earn a minimum income for every family that is sufficient enough to meet their survival and growth needs.
Very tall order but not impossible if the vested interests like corporates, govt. Employees, greedy politicians could be made to be part of the paradigm shift in the economy and the governance required for the purpose as has been the case in China which has shown that unbelievable development could coexist with egalitarianism despite its huge population.
Dr M H Prasad Rao
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