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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