GROWING up in the 1980s, whenever we would visit our folks in Delhi from Mathura in Uttar Pradesh, one of the most memorable contrast apart from the trappings of the metro was the all-day supply of water and electricity. Those were still pre-RO and pre-liberalization days and to get potable water on tap was a luxury to die for, as was 24-hrs uninterrupted power. Even though Mathura was not far from the national capital, in terms of infrastructure it was a proper BIMARU dungeon. Studying in oil lamps, or later petromax light, and walking past midnight to fill buckets when the uncertain municipal water supply would get activated, my family would have happily paid for more reliable provisions of these basics of life. The State was simply missing or had no capacity to provide them.
That's why when we migrated to Gujarat in the early 1990's it was a bit of a culture shock to see no power cuts and regular water supply in its major cities. It was the same country after all. But there was a difference. While in UP we were paying Rs 1.20 per unit, in Gujarat people were paying Rs 5 or more for electricity. There was a separate water bill that came with property tax annually. And a majority paid happily so because they were getting what they were paying for. Hence, it was a double shock to see the citizens of Delhi, three decades later, wanting and voting for free water and cheap electricity, despite being rich enough to pay for it.
It is in this context that PM Narendra Modi's 'revdi culture' jibe - his comment on populism as a policy tool in the hands of governments gains significance. What he said at the inauguration of the Bundelkhand Expressway in Uttar Pradesh this week needs to be extensively quoted, before we dive into this subject.
"Today in our country, attempts are being made to collect votes by distributing free revdis (sweets). This revdi culture is very dangerous for the development of the country. People of the country, especially the youth, need to be careful of this revdi culture. People of revdi culture will not build expressways, airports, or defence corridors for you.”
“People of revdi culture feel that by distributing free revdis to people, they can buy them. Together we need to defeat this thinking. Revdi culture needs to be removed from the country’s politics."
Those were strong words from a politician who has to be mindful of the next election. Only that Narendra Modi has been there before and done it differently. I remember the summer of 2007 in Gujarat. There was a massive farmers' unrest against Modi government's crackdown on power theft. To the extent that some district-level BJP leaders were put behind bars for interrupting the crackdown. Gujarat was headed for an Assembly election later that year and the matter reached the RSS. Some leaders in Saurashtra petitioned the party's mothership fearing losing the election to farmer backlash. Modi refused to budge. He could differentiate between party and people and made the farmers pay for the electricity. More importantly, he won his second election comfortably in December 2007.
Such was the understanding of people in Gujarat of subsidy as a trap that a Congress party election promise in 2012 of free distribution of homes to the poor- called Ghar Nu Ghar - cut no ice with the State's citizens. Congress succeeded in creating some optics by getting its workers to stand in queues outside its offices across the state to fill forms, that were supposed to be exchanged for a roof over the head, in case the party came to power. Like in 2007 the promise did cause a scare among a section of BJP leaders, but Modi remained resolute, winning again, and the rest as they say is history.
Modi has brought the same streak in his Prime Ministership since 2014. Focus on enablers and empowerment rather than entitlement and unproductive dependence. The superstructure of the subsidy regime put in place from Indira Gandhi's socialist days to the UPA era when rights and entitlements led freebie culture to take root again, has been rationalised over the last few years.
Between 2004 and 2014, under the Congress-led UPA government with an economist Manmohan Singh as Prime Minister, the subsidy bill as a percentage of total government expenditure increased from 9% to 16%. In the same period the centre's capital expenditure - which is an important marker of development projects - halved from 23% to 12%. Narendra Modi's government has sought to correct this distortion it inherited over the last 8 years. Capital expenditure has crept back to 19% this year, and the subsidy bill brought down to around 8%. And these numbers have been achieved despite the pandemic era cash and ration transfers over the last two years.
It has been a journey of a well-thought philosophy. Of Thatcherite economics in play. I remember an important speech of the PM sometime in 2016, in which he enumerated the idea thus: "I am not arguing that all subsidies are good. My point is that there cannot be any ideological position on such matters. We have to be pragmatic. We have to eliminate bad subsidies...some subsidies may be necessary to protect the poor and the needy and give them a fair chance to succeed. Hence my aim is not to eliminate subsidies but to rationalise and target them," he said while speaking at a business summit.
Parallelly, rationalization of taxes and broader tax reform to improve collections has gone on. Not to forget a major crackdown on corporate corruption through the banking space. These are the omnibus of economic reforms that have kept India's ship steady even as the world economy has been wobbly.
Let's listen again to what the PM said: “Away from the revdi culture, we are living up to the expectations of people by building roads and rail routes. For the poor, we are building new houses, completing irrigation schemes, building dams, setting up electricity units so that the lives of the poor and farmers improve, and darkness does not envelope the future of our youth,” he said, adding that the “double engine government” — of the BJP in UP and at the Centre – “is not taking the shortcut of distributing free revdi.”
The Foundation stone for the Bundelkhand Expressway that he inaugurated this week was laid by Modi himself in 2020. The project was completed ahead of schedule, and with money to spare from the budgeted estimate. It passes through one of the most backward regions of the state of Uttar Pradesh and is likely to be a development lifeline, connecting the aspirations of the people of the region with opportunity.
Ask the milkman who could earlier sell only to the neighbouring village almost on a barter, who can now transfer his dairy produce without spoilage from the hinterland to towns like Agra and make an extra buck, if he would pay the toll? More likely he would happily, like the people of Gujarat. This is incidentally the same Uttar Pradesh I grew up in. The people of Delhi have to understand that. Prime Minister has started an important debate with his "revdi culture" comment.