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BUSINESS
Do elections slow down economic process in India?
By
Devajit Mahanta
Nineteen-year-old Ajit never heard of the global financial crisis,
but he is aware that his job chances are drying up. A likely first time
voter, Ajit is among the millions of voters looking ahead to India’s
elections which will be held on April 16 and May 13.
This election was pushed off the front pages by the global economic
meltdown, the carnage at the stock markets.
Voters generally make up their minds based on how the economy has performed
in the recent past and not how they anticipate it will perform in the near
future.
The issues in the upcoming election will hinge on the economy and the
country’s wary relations with Pakistan after the November 26 terrorist
attacks in Mumbai.
A recent poll conducted nationally by CNN-IBN revealed that 32 percent of
the respondents cited economy as the key election issue as compared with 21
percent who named security and terrorism.
The cancellation of the IPL tournament in India
and its subsequent shift to South
Africa due to shortage of the security
personnel, as it is clashes with general elections. Is it a signal that the
Government is unsure of the overall security situation or is this an
indication of how overstretched and creaky the Government infrastructure
is?
Political parties of all hues and colours try to pitch their messages to
the country’s 714 million voters in the world most popular democracy
exercise which leads to indulgence on everything ... from leasing private
planes to buying individual votes. The aviation industry rented out their
helicopters to campaigners at prices around Rs 75,000 an hour. According to
a survey by the Centre for Media Studies, the month-long general elections
will cause an outlay of something about Rs 10,000 crore ($2 billion). Of
that, about Rs 2,000 crore will be spent by the National Election
Commission and State governments for organizing the actual polling and the
mammoth security operation. This amount is much more than the last US
presidential election campaign, spread over a year, in which Barack Obama
and other candidates spent a total of $1.8 billion.
The polls come as a shot in the arm for the Indian economy. The annual
growth has plunged to 6.3 percent, the slowest pace in six years contrasted
with over nine percent growth since 2006. The pre and post-election period
will benefit the liquor, automobile, consumer goods, media, aviation as
well as jobless youth since the large cash dealings push a surge in demand
in these businesses. The elections, however, take a toll on the tourism
sector as tourists chose to stay home owing to security problems and other
operating difficulties. Moreover, there are certain restrictions on the
movements of tourists due to the elections. So, after the Mumbai terror
attack and global meltdown, the general elections have emerged as a new
hurdle for the tourism industry.
India
is heading into elections with an economy stumbling from bad to worst as it
feels the heat of the worldwide financial crisis. Industrial production
fell for the first time after 15 years. The textile industry, the countries
largest employer, has already laid off more than 7,00,000 workers.
The government bailout package last December was not enough to help reverse
the negative stock exchange rally. It is high time that the political
parties rather than spending millions on loud and colourful campaigns and
doling out cash and liquor in exchange of votes, should give priority to
figure out a way to boost domestic demand.
The battered Indian economy is set to take a backseat now as politics and
politicians begin to take control. The quality of elections decides the
quality of democracy and quality of our governance. People should cast
their vote for clean candidates who do not bank on money to win elections.
Readers can send their feedback at devajitmahanta@gmail.com
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