The experience of the last decade shows economic growth and social welfare will have to go hand in hand.

| by Shivam Vij

( May 21, 2014, New Delhi, Sri Lanka Guardian) It is conventional wisdom that the Congress-led Manmohan Singh government performed well during its first term in 2004, but once it was rewarded for it with a better mandate in 2009, the United Progressive Alliance faltered. Yet, most of the manifestations of UPA-II's alleged policy paralysis have their roots in UPA-I. As early as 2006, it was known that the preparations for the Commonwealth Games were running behind schedule, because various ministries and departments couldn't agree with each other. It was known that the 2G or second-generation telecom spectrum allocation was a scam of mammoth proportions. The Coalgate scam also relates to UPA-I, for that is when the coal blocks were allocated.

In its defence, the UPA has said that the policy of allocating natural resources rather than auctioning them was set in place even before 2004, during the Vajpayee era. But the point is this: UPA-I could see the problems, but chose not to fix them. The scams – and many more than just these three – refused to go away. By 2011, a huge anti-corruption movement led by Anna Hazare had brought the scandals to the streets.

It was these scams that resulted in the "policy paralysis" of a government that was too afraid to take decisions. What changed in India from 2009 to 2014 was that crony capitalism became a burning issue. Economic growth suffered. The UPA tried to compensate by doing things like enacting a new land acquisition law, but it was too late.

As Narendra Modi prepares to take oath, he is already tainted by accusations of having unduly favoured the Adani industrial group in Gujarat. The Comptroller and Auditor General, the Supreme Court and the Aam Aadmi Party will ensure that the focus on examining in detail the government's economic policies does not go away. A beaten Congress will play its role too, so as to stay relevant. Having lost its legitimacy because of corruption, the Congress will seek to now leverage its power in the Rajya Sabha and the states to give it back to the BJP for stalling legislation because of the Congress' corruption scandals.

Inclusive growth

While the UPA's crises were caused by corruption scandals that laid bare the ugly reality of crony capitalism, many commentators bizarrely blamed India's economic woes on the UPA's flagship social welfare schemes. You'd think they'd ask for transparency in decision-making, better regulation and a Lokpal, but they instead blamed the money spent on the rural employment guarantee law and opposed the food security law. These measures have been rubbished as a politics of "entitlement" – a term non-resident Indian commentators borrowed from American politics, where it applies to citizens who aren't anywhere as destitute as India's poorest people.

If Prime Minister Modi listens to the economic right-wing and cuts down on the social welfare schemes for the poor, he will do the opposition a great service. The impact will be visible in the next election. The Vajpayee-led National Democratic Alliance fought the 2004 elections on the "India Shining" slogan. Voters agreed with the Congress that India was shining, but Indians were not. UPA-I delivered both economic growth and social welfare, making "inclusive growth" its mantra, and was re-elected. UPA-II faltered on both, for a variety of reasons, and was booted out vehemently.

The message is clear: economic growth and social welfare will have to go hand in hand.