It’s the economy, stupid! The
alienation of the middle class
By Shankkar
Aiyar
19th January
2013 11:40 PM
The Congress
had its Eureka moment at Jaipur on Friday. It recognised that the Congress-led
UPA had alienated the middle class. Congress President Sonia Gandhi warned the
party that “we cannot allow our growing, educated middle classes to be
disillusioned and alienated”. It was more importantly a signal to the UPA
government, led by Manmohan Singh, that the prairie fire of outrage in large
cities could well spread to the smaller ones.
The nervousness
of depleting votebanks, in the run-up to the 2014 polls, is not surprising. The
Congress-led UPA returned to power in 2009 winning middle class votes in urban
constituencies (barring those in Gujarat and Karnataka) across India. In the
wake of the results, Congress pundits went rah-rah over the victory in 13
constituencies in Delhi and Mumbai and claimed that the UPA “wave” had swept
over 100 of the 200 urban and peri-urban constituencies. What is surprising is
that it took the Congress four years into the second term to recognise this
even as every opinion poll conducted since 2010 has indicated this loss of
faith.
The alienation
and anger are a simple consequence of failed expectations—failing rule of law,
poor governance, corruption, inflation, gross mismanagement of the economy. It
is the threat to personal and income security, though, that has hurt the most.
This, from a prime minister the middle class had hoisted as one of its own.
Worsening the alienation is the politically cynical approach. The UPA has
preferred to manage the optics of outrage rather than address the outcomes
these issues demand.
Politicians
frequently bluster that middle class anger rarely translates into electoral
debacle as often the middle class doesn’t vote. But this is a banal posit, even
if a comforting refuge. Democracy is not a one-vote stand. Every taxpayer
deserves a return. Today, the tax-paying middle class —and mind you, this
definition includes all those who pay levies on services and goods, and not
just income tax—is a critical mass and not voiceless. Ergo, they are at the
forefront of outrage questioning the efficiency of policy and the efficacy of
political leadership.
The anger and
outrage, if you assess, is co-terminus with the slowdown in the economy. For
nearly 12 quarters now—that is, 36 months—the economy has been wracked by high
inflation and low growth. It is not surprising, then, that the middle class has
felt compelled to be heard. The middle class—dependent on fixed band of
earnings—finds itself at the losing end of the deal in terms of income, savings
and investments, thanks to the slowdown inflicted by politically inspired
populism. Income security is threatened by lay-offs; fixed deposit rates are
lower than inflation and returns on equity hurt by slowdown.
Splice the GDP
into the three major segments—agriculture, industry and services—and it is
services and industry which is slowing down the most. Such is the state that
industry is growing slower than agriculture. And services growth depends on
industrial growth for impetus. The consequence visits the middle class most
visibly as incomes are squeezed and job growth falls. Fewer jobs mean lesser
mobility in the job market and fewer opportunities for the middle class
graduates fresh out of college. And there is no urban employment dole or MNREGA
for them!
Worse, it has
to bear the brunt of inflation fuelled by political profligacy. Consumer price
inflation has been averaging double digits while salary hikes, if at all, are
in single digits. Every time the government is confronted with the need to trim
its expenditure, it chooses to target subsidies on consumption
instead—specifically fuel subsidies. Faced with pathetic governance, the middle
class has taken to outsourcing solutions—investing in personal transport on bad
and lawless roads in the absence of mass transport, and installing back-ups for
the failure of power supply. Having already paid a private price for public
failure, the middle class is now confronted with higher operational costs
triggered by fiscal profligacy.
The anger is
not as much about loss of LPG cylinders as it is about the inequity. The middle
class perceives that they are paying for the preservation of political power
through pelf. The tussle in the tent is for equilibrium. The unstated question
by the middle class is—is everyone paying their due? Not surprisingly, the
loudest chorus in the clamour for action against scandalous allocations of
spectrum or mines is from the middle class.
The problem is
that the middle class is not in the entitlement club of the rural and the poor.
Nor can it claim the insular power of those inching towards and those on the
Forbes billionaires list. It does not figure as a constituency in the electoral
sops list of political parties nor is it an imperative on the radar of
government intervention in the 147 Centrally sponsored schemes. It really isn’t
enough, any more, to incrementally shift the income tax slabs. The middle class
no longer wishes to be squeezed between competing compulsions with the poor
fuelling the electoral model and the super-rich financing the business models
of politics.
Sonia
Gandhi’s chintan-check demands follow-up. The Congress may be comforted by its
arithmetic of vote shares but it needs to visit history. Every debacle the
Congress has suffered has been led by the middle class. If the Congress is
sincere about its concern and in its quest for an inclusive democracy, it must
heed the voice of the middle class. It might want to consult Aristotle who
observed that equilibrium is best provided by the middle class. For those who
possess the goods of fortune in moderation find it “easiest to obey the rule of
reason”.
shankkar.aiyar@gmail.com
Shankkar Aiyar
is the author of Accidental India: A History of the Nation’s Passage through
Crisis and Change
http://newindianexpress.com/opinion/article1427278.ece
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