Commentary/Dilip D'Souza
Who believes election promises?
Travelling through Namibia in September 1991, I had the misfortune to run
into an Indian trade delegation. Misfortune, because seldom on my travels
anywhere have I felt as exasperated as I did when I met these guys. Most of
them were doing very little. They were along for the fun, enjoying
themselves thoroughly on their taxpayer-paid junket. Quite casually, they
spoke of their last trip to Frankfurt, an earlier one to Zurich, an
upcoming one to Tokyo.
Conversation at a dinner party we attended turned to reservations and the
Mandal report, then still very much on people's minds. Without exception,
all these high-flying delegates spoke contemptuously and angrily of V P
Singh, who as prime minister had tried to implement the reservations the
Mandal report suggested. V P wants to make sure, one oaf said, his lip
curling in distaste, that "certain kinds" of people get college admissions
and jobs without any qualifications. It's good V P Singh got turned out of
office, he continued. Imagine what will happen to India if we ignore merit
like he tried to do!
My mouth, I remember quite clearly, was hanging open as I heard this. Here
was this slug of a man, lolling around in a fancy hotel in Namibia at my
expense, claiming to be on government business; a man who, under
any reasonable regime of merit, would be out on his ear; and this man had
the gall to moan about ignoring merit!
Swallowing my anger, I offered the thought that, in any case, V P Singh had
only set out to fulfill what he had promised when he ran for office. So why
the anger with him for doing what he had promised to do? This was waved off
as if I was a gullible moron. "Who believes election promises?" they asked
me.
Indeed, who does believe election promises? That's a somewhat long
introduction, but before I return to Mandal, I'd like to tell you a little
about another promise. This one is about... well, let me begin with the
arithmetic.
Which is simple enough to do yourself. Divide four million people by five: that's
800,000, the number of families and so the number of free houses that must
be built. Divide by five again: that's 160,000 houses that must be built every
year of the government's five year stint in office. Multiply by two: you get 320,000
houses that should have been built in the two years that the government has
already spent in power.
And as of March 31 this year, how many houses have actually been built and
turned over to families? 1,146. No typo. 1,146.
Yes, ma, I'm talking about Bombay's famous slum rehabilitation scheme.
Running for election in 1995, the Shiv Sena-BJP alliance made this scheme a
major plank for their campaign. Swept into office on the back of this
promise, riding on millions of hopes, they directed a committee to come up
with a plan to implement it. Of course, this is an election promise we're
discussing, and who believes those? I don't know how many believed it in
1995, but in 1997, I suspect few still do. In two years, about
one-three-hundredth of the number of houses the plan calls for have
actually been built. Why this colossal failure?
To answer that, you have to look at the very heart of the scheme. That's a
simple idea that has actually been suggested before: the "cross-subsidy."
That is, slum dwellers will get their free housing from builders, who will
pay for that construction out of the profits they expect from other houses
they will build and sell to higher-income buyers.
You want to know: why should a builder opt for such a programme? After all,
he can keep doing what he has always done: build middle-class housing and
pocket the enormous profits Bombay's wild-and-crazy real-estate market has
offered for years. Why should he join the slum scheme? The answer is in the
FSI (Floor Space Index) incentives the scheme offers. With them, the
builder can put more built-up floor space on a plot of land than he would
normally be allowed to. The increased profits make it possible for him to
build the free housing he will give away.
Under the scheme, every 1,000 free houses will be paid for by selling about
560 houses on the market. This is the essence of the cross-subsidy. As you
can see, it rests on one premise: there will be a market for that
higher-income housing, at a price that will pay for its construction, the
free housing and a profit as well. Is this a reasonable premise?
Allow me some more arithmetic to answer that. If 160,000 free houses must
be built every year, about 90,000 must also be built every year to be sold
to pay for the freebies. That's 250,000 houses, and I haven't even counted
the so-called "transit accommodation" -- the houses that the slum dwellers
will need while they wait for their free houses to appear. And how many
houses is the construction industry erecting today? That committee I
mentioned said this in its report: "the present level (of construction of
houses in the city) ... does not go beyond 35,000 to 40,000 tenements per
year."
How, the report does not tell us, will the industry ratchet up construction
a minimum six-fold? That kind of multiplication does not happen overnight.
Where's the raw material, the transport facilities, water, sanitation?
But hold on: there's an even more fundamental, even more spectacular, flaw
in the scheme. Assuming you manage to build them, how will 90,000
additional houses a year affect the real estate market? Bombay's housing
prices are high because the yearly supply of 35,000 or so units comes
nowhere close to meeting the demand. What will nearly three times that number
of houses do? Even mere columnists can answer that one: the market will
collapse, prices will fall. There goes the precious cross-subsidy.
You see, the very logic of the slum scheme would find approval with
Catch-22'sYossarian. The city's fabulous real estate prices made the
scheme conceivable; implementing it will make it inconceivable.
No wonder just 1,146 houses have been built in two glorious years of
Shivshahi in Maharashtra. The slum scheme was a non-starter right out of
the blocks. It can never succeed; its cynical champions knew that well.
Which is why today, it is just one more broken election promise. Nothing in
the least unusual about that.
Which brings me full circle, back to V P Singh and Mandal. There are some
curious parallels between the slum promise and the Mandal promise. In some
ways, both are similar ideas, in that they recognize a societal failing and
try to correct it. One says the profits builders make off the middle and
upper classes will subsidise free housing for the poor. The other, that the
privileged will, in a sense, subsidise jobs for the not-so-privileged.
Just as the slum scheme did in Bombay, V P Singh's promise to implement the
Mandal recommendations must have given hope to millions of relatively poor
Indians. Just as the slum scheme helped sling the Sena-BJP alliance into
power in Maharashtra, Mandal helped Singh win the 1989 elections and become
our prime minister.
The parallels skid to a stop there. The Mandal report was a carefully
thought out, meticulously detailed work. It laid out strict, plausible
guidelines -- among which caste was actually a relatively minor factor --
to designate the other backward classes who would benefit from
reservations. The arithmetic was simple and precisely specified.
But the real difference between V P Singh's Mandal and the Sena-BJP's slum
scheme was that Singh actually fulfilled his promise. Once in office, he
began implementing Mandal's recommendations, as he said he would. We all
know the result: Singh was hounded out of office by a vicious storm of
misinformed criticism. Not only that, one L K Advani got on his
Toyota-turned-chariot to whip up passions over a mosque in Ayodhya, knowing
he had to distract us from the power of what V P Singh was doing. We know,
too well, the disastrous consequences to the country of that Toyota
journey.
That apart, we forgot that when we voted for V P, we knew what he had
promised. Precisely because all other politicians have taught us not to
take them at their word, we never expected V P Singh to keep his. And when
he did, we were enraged. It annoys us that politicians don't stick by their
promises, but when one did, that annoyed us even more.
V P Singh was driven into political oblivion because he kept his promise.
The Sena-BJP alliance remains in power, the arithmetic shows clearly, even
though they never intended to keep theirs.
Yes indeed, who believes election promises? Certainly not the lounge lizard
I met in Namibia, weeping about merit.
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