In the last five months, lending rates by commercial banks have been slashed to 4.5 per cent, giving industry an enormous financial benefit in terms of their cost of funds, inventory costs and the bottom line against the backdrop of economic slowdown. That industry has hardly passed on the benefit to its employees, consumers and the public is another matter.
The babus too have made a killing, thanks to a handsome increase in pay package and pension by the government irrespective of their performance. Most of them have taken home, tens of thousands of rupees each as arrears. Not surprisingly, they want the Congress to stay in power. One can't blame them if they feel that they are morally obliged to support the party that has given them so much.
However, individual support by these two groups to the Congress would not count much in demographic terms. The two categories represent less than three crore people, or a little more than two per cent of the country's total population, or 3.5 per cent of the eligible voters. On the same count, their influence on the ballot boxes would have been even less because of the scattered locations of the babus and also the small number of the business leaders mostly based in Mumbai and Delhi. But, that is a simplistic way of looking at the issue. It ignores the outreach of these two groups through the various campaign tools, especially the media; they are capable of carrying their message to at least 18 to 20 crore educated voters or over 20 per cent of the people named in the voters' list.
Interestingly, the two groups have been constantly using the media and other campaign tools to influence the educated sections of the people, backing the Congress party - sometimes subtly and other times openly - and its government as the best choice for economic development, growth and a better 'feel good' environment. Since the announcement of the Lok Sabha election, the media is full of 'feel good' stories. They include an excellent rabi crop. A 'near-normal' rainfall has been forecast by the government's Met Department, suggesting excellent kharif and cash crop production. Top bureaucrats in the PMO, Planning Commission, Finance Ministry and RBI are issuing statements almost every week on how efficiently the government has been managing the economic slowdown.
The stock market is being artificially propped up through investments worth thousands of crores of rupees by public sector financial institutions such as LIC and UTI and nationalised banks in shares and mutual funds. The Bombay Stock Exchange 30-share index, Sensex, has gained over 2,000 points since the election campaign started two months ago. Foreign funds from tax havens, much of which are believed to be unaccounted Indian hawala money and those acquired through illegal trade deals, have again started pouring into the stock market in anticipation of the return of the foreign investment-hungry Congress party to power. Punters from the business community are obviously willing to put their money on Congress in the election derby.
There seems to be a never-ending public debate, orchestrated by vested interests, on whether the country's GDP would grow by 6.2 per cent or 6.66 per cent, or if the process of economic recovery will start in September or even before, assuming that the Congress party will certainly hold the fort after the election results are out. These optimists ignore some basic facts like the steep fall in India's export income and foreign remittances, the sudden halt in the growth of the IT sector and highly job-intensive BPO activity, indefinite delays in launching the expansion of the steel sector, involving investments worth Rs. 1,00,000 crore and poor performance of the power sector. The latest official figures show a negative growth in crude oil (2.3 per cent) and steel production (2.6 per cent) in March 2009, generally regarded as the most important month of Indian economy's 'busy season' and near bankruptcy of the domestic civil aviation sector.
Congress leaders, including the Prime Minister, have been loudly proclaiming that Congress alone is capable of meeting the challenges facing the country. Ironically, business barons fully endorse the view. They too are part of the cacophony that claims, though subtly, that the Congress party has been managing the affairs of the country well and things are bound to improve in 2009-10 if the party returns to power. They predict that both employment and salary will grow this year. The Confederation of Indian Industry is very hopeful that the economy will grow by 6.1 to 6.5 per cent this year. India Inc. is said to be already on a 'talent hunt.' For the first time, industry has promoted - and backed - a new 'vote-you-must' campaign under the guise of NGOs across the country to bring the educated to the polling booths.
Fortunately for the Congress camp, the combined charge of the business and bureaucrats seems to be already working in their favour through the dwindling interest in voting by the under-educated, the deprived and the common man resulting in low turn-out in polling booths. The trend may work as a big blessing in disguise for the Congress candidates locked in three-corner contests in most constituencies. The Congress party's main opposition in states, including BJP, the Left and regional groups, are visibly depressed by the reports of low voter turn-out, election boycotts in neglected rural centres and the general apathy against the election process among the poor. High percentage of voting, that is 60-plus per cent, denotes anti-incumbency. Even the fourth phase of election, which ended on May 7, failed to reach the figure, except in West Bengal, Punjab and Haryana. As the election process reaches the final phase, leaders of mainstream political parties are keeping their fingers crossed as to the nature of the public mandate locked inside the ballot boxes and electronic voting machines. Most importantly, this election will decide the fate of not only the Congress, but also its rivals, and become a watershed in Indian politics and the country's democratic system. (IPA Service)
Corporate Watch
Big business rallies behind Congress
But can the party make it?
Nantoo Banerjee - 11-05-2009 08:02 GMT-0000
The big business is all for Congress. So are the bureaucrats. The reason is understandable. Both are the biggest beneficiaries of the Congress-led government at the Centre. The domestic industry has made thousands of crores of rupees out of the government's economic revival package, basically in the form of a series of lending rate cuts by the reserve Bank of India.