About two weeks ago, at a public engagement in Mumbai organised by CNBC Awaaz, Bharatiya Janata Party (BJP) President Amit Shah used the expression ‘welfare state’ to define his party’s politics.
For a supposedly right-wing party to talk of a welfare state, the idea seemed worth dismissing. In fact, when he used the W-Word, I had to reconfirm it from my friends on the left as well as the right before I tweeted it. “I assure you that growth will come,” Shah said. at the 10th anniversary celebrations of CNBC Awaaz. “Development will come. We will create a successful welfare state.”
For the longest time, we have attributed the expression welfare state to the Congress and the Left. In the lost decade that’s now safely behind us, welfare economics took precedence over economic growth. From right to education to right to food, welfare schemes drove the Congress’s political agenda. As long as global liquidity pushed economic growth, it was fine. The global economic crisis that began on 15 September 2008 with the fall of the Lehman Brothers changed the fundamentals.
PTI image
With a huge fiscal burden inflating the prices of everyday goods, the politics of welfare, despite calls for more freebies, began to lose its lustre. True, everyone wants free food, free fuel, free housing, education, jobs. But at some point, freebies need to be financed. And the only idea that can fund freebies is entrepreneurship - not the government, not parties, not wishes. But even as one hand of the Congress was busy doling out subsidies, the other was throttling entrepreneurs.
BJP changed the discourse. By placing the entrepreneur at the centre of its economics, and with Prime Minister Narendra Modi’s successful Gujarat model behind it, the debate shifted to opportunities, wealth creation and jobs. Hope, that was slowly ebbing, began to look up and the change from a party carting the cross of corruption on its neck brought the BJP to the Centre.
Having reached there, its actions focused on bringing entrepreneurs back. Through the powerful Make in India campaign, the Modi government is aspiring to make doing business in India easier. Through mega deals with global leaders, the government is going all out to attract investors. By assuring that there will be no more retrospective laws, it is undoing the ills of the previous government. The new land Ordinance proposes to make land acquisition easier.
In such a scenario, for Amit Shah to throw the cat of welfare among the pigeons that have begun to congregate was unexpected. That he chose a congregation of business luminaries to launch this idea magnified it. the gathering had industry leaders like Deepak Parekh and financial bigwigs like Rakesh Jhunjhunwala, and an inaudible word hung among the lights: “Huh?”
Amit Shah’s point was simple. While economic growth and opportunities are the way forward, what do we do for the people in the interim? The transformation of India into an entrepreneurial society will take time - it needs political will to trickle down to the bureaucracy; it needs a rethink and struggle to amend laws designed for imperial control than to support citizens; and above all, it needs a change of consciousness where the entrepreneur is not looked at as a vicious parasite but one who adds value to the country by creating products, jobs and wealth.
Until then, the government can’t escape delivering welfare. It could, however, make it more efficient. When someone asked Amit Shah a question about gas subsidies, his reply was: “At least, all of you in this room should start by letting them go.” The laughter that followed was strained but you could sense a cloud of introspection descend in the room.
As Amit Shah sets BJP’s welfare state agenda rolling, it would be interesting to see how the Modi government negotiates and harmonises economic growth with welfare economics.
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