Offstumped – Commentary on India

Third and Concluding part of series on Socio-Economic Engineering  (Part 1 & Part 2)

Duetsche Bank Research released a report on February 15th 2010 titled The Middle Class in India – Issues and Opportunities

Some highlights extracted from this report that are of relevance to this discussion on Socio-Economic Engineering and targeting Middle India.

#1 -While there is no official definition of the middle class, estimates range from 30 million to approximately 300 million people.

#2 Even using the most generous estimates of the group‟s size, the middle class comprises less than 30 percent of the population

#3 The importance of the middle class lies in the fact that it is the fastest growing segment of the population

#4 while the total population will increase almost 30% between 2005 and 2025, the middle class population will increase approximately 10 times or almost 1000% during this period

#5 the middle class might see less of a link between their priorities (the CLSA survey found the number one political priority for the middle class over the next 12 months was employment) and a new government vs. the poor (who are typically more concerned with things such as basic healthcare infrastructure or farm loan waivers that are more directly linked to the government).

#6 A stronger political drive in the middle class would force or enable the government to also focus on issues that are of concern to them.

The report also puts into perspective why the flawed Liberal Left agenda of the Congress is meeting with electoral success

#1 The Gini coefficient (a measure of inequality where 100 = high levels of inequality and 0 equals no inequality in an economy) is rather low for India overall compared to other EMs at less than 35 but has been increasing since economic liberalisation

#2 although the poverty rate has been reduced, the rich continue to get richer in comparison

#3 As the middle class remains apathetic towards political participation as is currently thought, then the trend of focusing on poorer (often rural) voters to win elections could remain the dominant political paradigm in India.

The Liberal Left agenda of the Congress has benefited from the twin factors of Middle Class apathy and Demographic advantage by simultaneously targeting the poor and the elite rich.

This simultaneous targeting of a Demographic majority by the Congress can be best appreciated when viewed through the prism of what Rahul Gandhi calls “Growth with distribution”.

“Growth with distribution” is not just about targeting the poor with entitlements but it also about keeping the elite rich in power through this unholy nexus between Crony Capitalism and Politicians.

Pratap Bhanu Mehta writing in the Indian Express today  (clicking on this link may lead to virus infection), alerts us once again to the Congress’ strategy to consolidate power.

The Congress is widening its target demographic base by giving a new definition to the Poverty Line to expand Entitlements and is giving a religious twist to Backwardness to increase Quotas.

But then as Pratap Bhanu Mehta puts it hubris and complacency can still trip the Congress but it will take bold imagination for an alternative agenda to succeed.

Where is the Opportunity

#1 The growth of the middle class and the economic growth of India are in a virtuous cycle.

#2 As the middle class grows and continues to increase domestic demand, the economy will also continue to grow

#4 The growth of the middle class will force more businesses to expand and also force new business to take root

The opportunity for the Center Right agenda lies in what the Deutsche Bank Report calls

the key point in ensuring that the link between middle class growth and economic growth continues to strengthen

 
And that is in

 providing the right education and skills to the middle class and creating enough opportunities in society to absorb these

Conclusion

Socio Economic Engineering could be the vehicle for the Center Right movement to target Middle India with a “bold and imaginative” agenda.

A beginning must be made by

Step#1 – Giving a new broad definition to this fast growing demographic segment called the “Middle Class”

Step#2 – Micro-targeting based on issues that directly relate to economic priorities of the various sub-segments that make up this broad Middle Class

Step#3 – Structuring an electoral agenda around the “Ladder of Opportunites plus Safety Net” paradigm to address those priorities

Filed under: DesiPundit, Left Liberalism, Narendra Modi, Neo Aspirational class, Neo Middle Class, New Middle Class, Progressivism, socio-economic engineering

Part 2 of series on Socio Economic Engineering – an electoral roadmap for the Center Right

Eminent economist Dr. Surjit Bhalla writing in the Business Standard had this to say of the UPA’s flagship program – National Rural Employment Guarantee Scheme (NREGA/NREGS/MNREG)

Despite tall claims, the NREGA programme is just a dud as most other “in the name of the poor” expenditures – and as much of a dud as predicted by Rajiv Gandhi

Despite repeated evidence for the last 20 years that “in the name of the poor programmes” reach everybody but the poor, the well-meaning socialist but not-so-realist Congress party renamed and expanded existing food for work programmes under its own Congress brand as NREGA, and now MREGA. (Ironically, but poetic-justice style, the latter acronym also means “to die”!). It spends Rs 8,823 crore on the programme in 2006-07 (and Rs 39,000 crore in 2009-10) and is able to actually deliver only 14.7 per cent (Rs 1,270 crore) to the targeted audience?!

Dr. Bhalla is being very charitable in his description of the Congress Party but his pithy remarks on NREGA highlight the false sense of security and comfort underlying the Liberal Left policies of the UPA.

Social Engineering of the communal variety receieved a boost this week with the Supreme Court’s interim order upholding Muslim Reservations in Andhra. This is just the beginning, more can be expected if this reaction from Abhishek Singhvi is anything to go by. It is clear that the Congress Party wants to further its Liberal Left agenda by expanding group entitlements or quotas on religious grounds.

This brings us back to the fundamental challenge for Socio-economic Engineering - 

how must it capture popular imagination of the aspirational voter to motivate him or her to cross-over ?

If the core premise behind Social Engineering and Left Liberalism was

to convince the voter to settle for the least common denominator within his or her group on the pretext of having the security of a safety net

then the core premise behind Socio-Economic Engineering must be

to motivate the voter that there is no reason to settle for the least common denominator within the group for even the highest of aspirations will be within reach by climbing on to the Ladder of Opportunity

There maybe merit in framing the popular debate between the Liberal Left policies of the Congress and the policy of prescriptions of the Center Right  as a choice between the Ladder and the Net.

The Net may offer safety but then there is no getting out of the Net once trapped.

There is nothing progressive about the Net for there is no avenue to progress.

The Net only weighs you down as it gets burdened with more and more to support

The metaphorical Ladder on the other hand is

by design progressive with opportunities to rise in each and every step.

by design inclusive and non-discriminatory for with every step an individual takes to rise, an opportunity is created for the next to rise and occupy

Pragmatism and realism would suggest that the Ladder of Opportunity cannot stand alone without the Safety of the Net, leading one to ask where lies the distinction between Socio-economic Engineering and Social Engineering ?

That distinction will have to be made by emphasizing the primacy of the Ladder over the Net

for if there was no ladder there would be no need to cast a wide net for safety

It may also be asked how different is the metaphor of “Ladder plus Net”for Socio-Economic Engineering from the “Growth with Distribution” model touted by Rahul Gandhi.

More on that in the third and concluding part in this series on Socio-economic Engineering.

Filed under: DesiPundit, Left Liberalism, Narendra Modi, Neo Aspirational class, Neo Middle Class, New Middle Class, Progressivism, socio-economic engineering