Harvard economic lessons for Communist Kerala

Poverty and deprivation are the bedrocks on which communism is built. The movement could not have existed without these two defining factors. Communism ceases to be a force when poverty is removed. So, to remain poor also means to survive as a communist. Extend this to encompass as many people as possible to ensure that the movement remains intact. A rich communist, therefore, is an oxymoron. Kerala, though, is not your ordinary, run-of-the-mill communist state. The simple reason being it is not poor. In a way it is indeed an oxymoron. There is absolutely no industry worth the name that Kerala can call its own. Yet it is by far the most developed state in the country on almost every parameter although the reasons for this are not far to seek. The Gulf!Because of the high literacy, it is also the most politically conscious state in India. Perhaps due to this reason the electorate has rarely allowed any one party to dominate, although it must be said that it was here that the communists made history by winning the first ever democratic elections in the world. Power has more often than not alternated between the Congress Party, lately in coalition with several others, and the communists who have also strung together a front of their own.The wheel spun once again last May and the communists came on top. Five years from now it will be the turn of the Congress. Or, will it? History suggests it could well be, but the communists have, for once, a helmsman who thinks a wholesale change in the outlook of the party is required for it to survive through these five years and, if things go according to his plan, retain power for the next five.Chief Minister Pinarayi Vijayan is setting about controlling the state in a way no communist leader has dared to till this day. With his Left Democratic Front (LDF) coalition winning 91 of the 140 seats, Vijayan is unassailable, much like Prime Minister Narendra Modi is in the Lok Sabha. But unlike Modi, who has to contend with a hostile opposition-dominated Rajya Sabha, Vijayan has nothing to fear from anyone. He is fully conscious of this and showing it too.Immediately after taking over, Vijayan said he would want to lead the state into the market economy with private capital and for this he was willing to talk to anyone, including the “dreaded” multinationals. The usual suspects within the party and front protested but Vijayan wouldn’t care.Then his Finance Minister Thomas Issac stunned the party establishment by telling reporters in the national capital that Kerala was willing to support the goods and services tax (GST) amendment bill which has been hanging fire for more than a decade. When murmurs of dissent floated, Vijayan doused them saying Issac had his support to say what he said.And now the icing of the cake, as it were, Gita Gopinath, American-educated professor of economics at Harvard University will be Vijayan’s adviser on matters financial concerning the state. A great votary of liberalisation, she is a protégé of Ben Bernanke, former chairman of US Federal Reserve, and Kenneth Rogoff, a former director at the International Monetary Fund (IMF). Gopinath advising a communist chief minister? If chalk and cheese come to mind, nobody can blame you. For the Marxists America represents everything evil, economically or otherwise. But, as they say, if you keep going towards the east you shall end up in the west. It has happened to Vijayan. There is poetic justice here.Election panel flexes  muscle, but will it endure?The Election Commission of India (ECI) recently issued an order that, on the face of it, seemed quite innocuous and uninspiring for many of the mainstream newspapers to push the news on to inside pages and the electronic media to ignore it but nevertheless had a powerful message if taken to its logical conclusion.The ECI’s Maharashtra office disqualified 191 parties from contesting the civic polls in the state because they had not furnished details of their income and funding. Prominent among the 191 parties was the All India Majlis-e-Ittihadul Muslimeen (AIMIM) which has one Member of Parliament, its president Asaduddin Owaisi, two members in the Maharashtra state assembly and seven in the Telengana assembly besides several members in sundry civic bodies.Although the AIMIM wields considerable influence in Hyderabad, from where it has been winning the parliamentary seat since 1989, its two victories in the 2014 Maharashtra assembly elections were seen as a precursor to its march to strength in northern India. The party has announced its intention to put up candidates in all 403 seats in next year’s UP elections, a decision that could pitch it in direct conflict with the ruling Samajwadi Party of Mulayam Singh Yadav which counts Muslims as its sole preserve. But the AIMIM is still considered a minor regional outfit, so its disqualification in the local government polls in one state did not attract much attention. The significance of the ECI’s decision goes beyond the size of the parties involved. Many feel that not since the days of Chief Election Commissioner T N Seshan has the ECI taken such a bold and absolute step. Long-time election watchers will remember how in the six years starting 1990 Seshan changed the profile of the Election Commission from just another subservient arm of the government to a totally independent entity which wielded almost limitless powers once polls were announced. Section 77(1) of the Representation of the People Act, 1951 makes it mandatory for every candidate to the House of the People or a State Legislative Assembly to keep a separate and correct account of all expenditure incurred or authorsed by him/her or by his/her election agent, between the date on which he/she was nominated and the date of declaration of the result of election, both dates inclusive.In the “Compendium of Instructions” to the 2014 Lok Sabha elections, ECI Director-General P K Dash wrote: “It is true that multi-party democracy cannot function without use of money, which is essential for election campaigns but it is also conceded at all hands that the abuse of ‘Money Power’ entails certain risks…”An estimate by the Centre for Media Studies in Delhi puts the total cost of the 2014 Lok Sabha and state assembly election campaigns at $4.9bn. According to The Economist that would make it the second-most expensive in world history, trailing just behind America’s of 2012, which cost $6bn. But the Indian expense figure is just an estimate whereas the actual number could be much, much higher. The reality is that a major portion of the funds collected in the name of elections is in cash and there cannot be proper accounting of this as only a fraction of what is collected goes to the party coffers, rest into the candidate’s and his cronies’ pockets. Former prime minister Atal Behari Vajpayee once famously said that “every legislator starts his career with the lie of the false election return he files”. The sad fact is most of these legislators continue to live that lie throughout their political career.In 2014-15 the ruling BJP reported an income of $145mn and showed an expenditure of $136.2mn. The corresponding figures for the Congress Party are a balanced $114.1mn. As much as 82% of the Congress Party’s income was from “unknown” sources while the BJP’s $101mn (73%) came from similar “unknown” sources. It is anybody’s guess what the quid pro quo could be with such unknown contributors.The ECI’s bold step in disqualifying so many parties in one fell sweep must be seen as an attempt to end that lie. This is only the first step in a long journey to set things right in India’s corruption tainted politics. The big fish is out there for all to see. Will the ECI be able to net them? The commission has its work cut out because without the active co-operation of the political parties, the government and, if required, the courts, this will remain a work in progress but never completed.