Measured populism

The BJP reaches out to its pocket burrough

For a government that was reminded barely a month ago by a team from the International Monetary Fund that its finances were still not in good shape, it took some courage to hand out a bonanza of Rs 1,000 crore as tax relief to the salary-earning middle class. Clearly, union Finance Minister Yashwant Sinha was under considerable political pressure from his party, the Bharatiya Janata Party, to reach out to a sullen middle class, especially the government service type, who constitute the bulwark of the party’s urban middle-class political base. Even in the run-up to the presentation of the union budget in February this year, Mr Sinha was asked by his party’s seniormost leaders as to what there was in his budget for the party’s constituency. Mr Sinha had in fact a lot of lollipops in the form of tax concessions. But he earned the wrath of the middle class by succumbing to pressure on reducing interest rates on small savings. To top it all, the spectre of near double-digit inflation is raising its head once again. This apart, the Tehelka.com expose also hurt the party’s image among the middle classes. The BJP’s core political constituencies are sullen.

All this would explain the tax concession given to the middle class. While this measured populism is understandable, the finance minister and his party must do more, much more, to win back the loyalty of the middle class. A widespread perception has taken root that the National Democratic Alliance government has become the handmaiden of vested interests and business lobbies. As if the Tehelka.com expose was not enough proof of this, the prolonged telecom drama being played out, with business groups openly lobbying in favour of one policy or another and the government appearing to pander to their interests, suggests that the NDA must do more to win over the confidence of the middle class consumer. It is all very well to talk about building domestic enterprise and defending “swadeshi”. But if this altruistic platform of national interest is seen as being subverted by vested interests, with the consumer left in the lurch, facing rising inflation, reduced employment opportunities and widespread corruption, then mere tax sops are not going to help turn the tide. Good governance and a purposeful agenda of change and reform may help.