MacroScan (Printable Version) - Andhra Pradesh Elections: The CEO Confronts Reality

The overwhelming results of the Andhra Pradesh assembly elections seem to have left the English-language media in a state of shock. The self-proclaimed pundits of the electoral process appear bewildered and searching for answers. How, they ask, could such a ''development-oriented'', ''modern'' Chief Minister, who was so friendly to the markets and so open to foreign investment, be thrown out of office? How could women voters, who had been so assiduously wooed by Chandrababu Naidu through various schemes, reject him so comprehensively? Of course the answers come very easily to anyone who has actually looked at what has been happening to economic policies and economic realities in Andhra Pradesh over the past decade. The regime of Chandrababu Naidu marked a transformation of the Telegu Desam party – from a party which looked to the interests of the poor, as its founder NTR had emphsised, to one which was completely oriented to the interests of large capital, especially foreign capital. Naidu, as the darling of large sections of the English language and foreign media, presented the image of a computer-savvy, efficient ''Chief Executive Officer'', who supposedly managed to make Andhra Pradesh the most dynamic state in India. Hyderabad was increasingly being described as a "cyber capital" while Andhra Pradesh was presented as a fast-growing state which is rapidly integrating with the world economy to its own benefit.

The reality was just the opposite. In fact, far from being the most dynamic, this state has been the worst performing in the southern region since the early 1990s. The growth of real income, or Gross Domestic Product, has been only around 5 per cent per annum since 1995. This was the lowest among all the southern states, and also much lower than the much-maligned state of West Bengal!
Similarly, employment growth was lower than the national average over the period between 1993 and 2000, which was already the worst rate of any period in post-Independence history. In terms of literacy and school enrolment, Andhra Pradesh is well below the national average and ranks among the worst States in India. School dropout rates are among the highest in India. The infant mortality rate is higher than the national average, and has shown an increase in recent years. The rate of incidence of major illnesses is nearly double the national average, and there is a faster rate of spread of communicable diseases.

Meanwhile, all this has occurred in the context of the growing indebtedness of the State government. This debt is increasingly contracted from abroad (including from the World Bank and the British aid agency the DfID) and on more onerous terms. Currently all borrowing is effectively only to pay interest, since the State government's primary budget balance has now been in surplus for several years. In other words, there has been a huge increase in the State government's debt, which has not been used to improve basic economic conditions in the State. This not only condemns the State to future repayments but also ties the hands of future State governments with respect to economic policy.

Clearly, the quality of life for most people in Andhra Pradesh did not improve and probably worsened under the stewardship of Chandrababu Naidu. And it was not in spite of, but because of his economic policies, which displayed the most extreme form of ''market fundamentalism'' that we have yet seen in India.

There has been sweeping privatization and commercialization of public sector assets, as well as closure of some important public service systems such as bus transport companies. The electricity reforms not only raised the price of power for farmers, but also denied the poor access but cutting off those who could not pay their bills. The ''reforms'' have meant a drop in health and educational expenditure, the erosion of workers' rights, and a collapse in the state's agricultural support and marketing systems. The crisis in agriculture was sought to be met by very expensive contract farming systems that used foreign capital and technology and reduced cultivators to wage labourers on their own land. The extensive public food distribution system built up by NTR was run down and food was made more expensive for the poor. Forest communities, landless labourers and small farmers all suffered from policies that privatised government support systems and granted big landowners and large corporations carte blanche over land and forest exploitation.

All this was dressed up as a modern approach to development in the document ''Vision 2020'', which was primarily designed to please foreign donors, but also supposed to tell the people of Andhra Pradesh that all this was actually good for them. But even an internal document of the British aid agency DfID described Vision 2020 as "confused", "unfocused," and "inconsistent" and noted that it says "nothing about providing alternative income for those displaced."

The increase in inequality and in material insecurity inevitably led to much greater dissatisfaction and provided more support for the Naxalite movement in the state. The violence of that movement was met with massive state repression, including extrajudicial executions, torture, sexual assault and illegal detentions, often against innocent people.

The complete failure of the Naidu regime to look after the people of the state was highlighted during the drought year of 2002-03, when the massive rural distress was not effectively countered. Although the state government managed to extract a lot of food grain stocks from the Centre because of its special relationship with the NDA, this was not distributed properly and corruptions meant that it did not reach the people most in need. The insensitivity of the state government to the rural poor became even more starkly evident. Even today, water is probably the most critical issue in Andhra Pradesh, yet the Naidu government has shown little effort to confront this problem.

All this meant that anyone who was at all familiar with the condition of people in Andhra Pradesh knew for some time now that the Naidu regime was deeply unpopular with the people. In such conditions, claims of ''India Shining'' and ''feel good'' must have seemed especially cruel jokes on the people, and they have treated them with the contempt they deserve. This assembly election is therefore a clear mandate for a redirection of economic policy keeping in view the interests and concerns of ordinary people, and leaders across India should take note.



Themes > Current Issues	15.05.2004


Andhra Pradesh Elections: The CEO Confronts Reality

Jayati Ghosh

The overwhelming results of the Andhra Pradesh assembly elections seem to have left the English-language media in a state of shock. The self-proclaimed pundits of the electoral process appear bewildered and searching for answers. How, they ask, could such a ''development-oriented'', ''modern'' Chief Minister, who was so friendly to the markets and so open to foreign investment, be thrown out of office? How could women voters, who had been so assiduously wooed by Chandrababu Naidu through various schemes, reject him so comprehensively? Of course the answers come very easily to anyone who has actually looked at what has been happening to economic policies and economic realities in Andhra Pradesh over the past decade. The regime of Chandrababu Naidu marked a transformation of the Telegu Desam party – from a party which looked to the interests of the poor, as its founder NTR had emphsised, to one which was completely oriented to the interests of large capital, especially foreign capital. Naidu, as the darling of large sections of the English language and foreign media, presented the image of a computer-savvy, efficient ''Chief Executive Officer'', who supposedly managed to make Andhra Pradesh the most dynamic state in India. Hyderabad was increasingly being described as a "cyber capital" while Andhra Pradesh was presented as a fast-growing state which is rapidly integrating with the world economy to its own benefit. The reality was just the opposite. In fact, far from being the most dynamic, this state has been the worst performing in the southern region since the early 1990s. The growth of real income, or Gross Domestic Product, has been only around 5 per cent per annum since 1995. This was the lowest among all the southern states, and also much lower than the much-maligned state of West Bengal! Similarly, employment growth was lower than the national average over the period between 1993 and 2000, which was already the worst rate of any period in post-Independence history. In terms of literacy and school enrolment, Andhra Pradesh is well below the national average and ranks among the worst States in India. School dropout rates are among the highest in India. The infant mortality rate is higher than the national average, and has shown an increase in recent years. The rate of incidence of major illnesses is nearly double the national average, and there is a faster rate of spread of communicable diseases. Meanwhile, all this has occurred in the context of the growing indebtedness of the State government. This debt is increasingly contracted from abroad (including from the World Bank and the British aid agency the DfID) and on more onerous terms. Currently all borrowing is effectively only to pay interest, since the State government's primary budget balance has now been in surplus for several years. In other words, there has been a huge increase in the State government's debt, which has not been used to improve basic economic conditions in the State. This not only condemns the State to future repayments but also ties the hands of future State governments with respect to economic policy. Clearly, the quality of life for most people in Andhra Pradesh did not improve and probably worsened under the stewardship of Chandrababu Naidu. And it was not in spite of, but because of his economic policies, which displayed the most extreme form of ''market fundamentalism'' that we have yet seen in India. There has been sweeping privatization and commercialization of public sector assets, as well as closure of some important public service systems such as bus transport companies. The electricity reforms not only raised the price of power for farmers, but also denied the poor access but cutting off those who could not pay their bills. The ''reforms'' have meant a drop in health and educational expenditure, the erosion of workers' rights, and a collapse in the state's agricultural support and marketing systems. The crisis in agriculture was sought to be met by very expensive contract farming systems that used foreign capital and technology and reduced cultivators to wage labourers on their own land. The extensive public food distribution system built up by NTR was run down and food was made more expensive for the poor. Forest communities, landless labourers and small farmers all suffered from policies that privatised government support systems and granted big landowners and large corporations carte blanche over land and forest exploitation. All this was dressed up as a modern approach to development in the document ''Vision 2020'', which was primarily designed to please foreign donors, but also supposed to tell the people of Andhra Pradesh that all this was actually good for them. But even an internal document of the British aid agency DfID described Vision 2020 as "confused", "unfocused," and "inconsistent" and noted that it says "nothing about providing alternative income for those displaced." The increase in inequality and in material insecurity inevitably led to much greater dissatisfaction and provided more support for the Naxalite movement in the state. The violence of that movement was met with massive state repression, including extrajudicial executions, torture, sexual assault and illegal detentions, often against innocent people. The complete failure of the Naidu regime to look after the people of the state was highlighted during the drought year of 2002-03, when the massive rural distress was not effectively countered. Although the state government managed to extract a lot of food grain stocks from the Centre because of its special relationship with the NDA, this was not distributed properly and corruptions meant that it did not reach the people most in need. The insensitivity of the state government to the rural poor became even more starkly evident. Even today, water is probably the most critical issue in Andhra Pradesh, yet the Naidu government has shown little effort to confront this problem. All this meant that anyone who was at all familiar with the condition of people in Andhra Pradesh knew for some time now that the Naidu regime was deeply unpopular with the people. In such conditions, claims of ''India Shining'' and ''feel good'' must have seemed especially cruel jokes on the people, and they have treated them with the contempt they deserve. This assembly election is therefore a clear mandate for a redirection of economic policy keeping in view the interests and concerns of ordinary people, and leaders across India should take note.



© MACROSCAN 2004