Amid Slowdown And Unemployment, ‘BJP Has Detached The Economic From The Political’

Haryana has 2.02 million unemployed people, and recorded India’s highest unemployment rate of 28.7% in August 2019. Yet, the ruling Bharatiya Janata Party “has managed to detach the economic from the political”, says Yogendra Yadav, president of Swaraj India.

Bengaluru: As the Bharatiya Janata Party (BJP) in Haryana attempts to win a second successive term in the state assembly elections to be held on October 21, 2019, Yogendra Yadav-led Swaraj India is contesting its first election. Yadav, an activist-academic and psephologist, formed the party after his expulsion from the Aam Aadmi Party in April 2015. Having announced that the party would contest all 90 seats, it has been able to field candidates in 27.

“Although we wanted candidates for all 90 seats, money is a huge entry barrier to politics,” Yadav, 56, Swaraj India’s president, told IndiaSpend in an interview, in which he framed the salient issues for Haryana’s upcoming state elections. Yadav was a part of Lokniti, a research programme of the Centre for the Study of Developing Societies. He was a member of the National Advisory Council for the implementation of the Right to Education Act in 2010. He is not contesting this election.

Haryana has 2.02 million unemployed people, and recorded India’s highest unemployment rate of 28.7% in August 2019. Yet, the ruling BJP “has managed to detach the economic from the political”, Yadav said. Its performance in the 2019 parliamentary elections “offers headwinds for the state elections”, as well as public support captured through nationalist issues.

In an interview with IndiaSpend, Yadav spoke about the reasons for unemployment in Haryana, issues around agriculture, and other factors that may influence election results.

You said unemployment was the biggest election issue in Haryana since more than 2 million residents are unemployed, highest compared to states with larger populations such as Punjab, Madhya Pradesh, Tamil Nadu and Jharkhand. What is the state-specific problem leading to such high unemployment?

The information that Haryana has more than 2 million unemployed is based on the Centre for Monitoring Indian Economy’s report for May to Aug 2019, which not only gives percentages but sector-wise estimates of total numbers. In terms of sheer numbers, Haryana has more unemployed than states that are larger. 

To my mind there are several reasons. Agriculture is shedding workers at an alarming pace due to mechanisation. According to estimates that I have seen, about 2% of the rural woking population leaves agriculture every year. Between 2011-12 and 2016-17, the proportion of workers engaged in agriculture as a percentage of the total rural workforce declined from around 52% to 41% in Haryana. This is almost two percentage points every year which is alarming.

Secondly, the poorest of the poor are never unemployed, they cannot afford to be unemployed. So it is only with some education and prosperity that you can afford to remain unemployed. Haryana has reached a point where there is education and prosperity [per capita advance estimates for 2018-19 is Rs 2.3 lakh]. The number of people who live in abject poverty and are willing to do anything to fill their stomach has gone down, and aspirations have gone up. So if you look at the distribution of unemployed in Haryana, the majority are not below matriculation [10th standard]. Out of the 2.02 million [unemployed], around 1.1 million have a 10th or plus-two education. They are educated enough to aspire for a decent job, but not educated enough to get a decent job. I believe that as India’s per capita income rises, we are likely to witness this across the country.

Another reason is recent and could be temporary. As Haryana is a manufacturing hub, it has seen retrenchment over the last few months. The Manesar-Gurgaon auto belt has companies retrenching workers.

The auto sector has a major presence in Haryana. In your travels, what have you assessed as the impact of the slowdown in the sector where many workers are contract workers? Does it have an electoral impact given than often workers are from outside the state?

One of the achievements of this regime is that it has managed to detach the economic from the political. A serious slowdown of the economy does not translate into a serious disenchantment with the regime, atleast as of now. I am not sure about the electoral impact, but there are consequences. Although I have not been able to verify, I have heard that when they [companies] have to shed workers, the first ones to be removed are permanent workers and not contract workers. It becomes a good pretext to get rid of better-paid staff.

Even if contract workers or casual labour from outside are removed, it affects the local economy. The workers live in small rented homes and become substantial contributors to the local economy. So, a slowdown affects everything.

Despite widespread rural and agrarian distress, and the farmers' march in November 2018 in Delhi demanding waivers and remunerative prices, the BJP won the general election by a huge margin. “Farmers will be assured of at least one and a half times the price of all the input costs along with complete freedom from debt,” Swaraj India press release noted. How do you plan to achieve this? How will you go beyond loan waivers?

Our proposal is two-fold. We are promising that 1.5 times of total cost (cost of capital and rent on land or C2) for Haryana. This would mean Rs 4,000 crore of expenditure. In these times of economic slowdown, it is the best way of distributing money.

We are proposing mechanisms for invigorating the demand for milk and poultry. We plan to offer a glass of fresh milk in mid-day meals and Integrated Child Development Services covering more than 1 million children. The milk industry all over the country has ostensibly less demand, which is strange. We are encouraging domestic demand for milk.

It is not possible for state governments to waive all loans. Unless the Centre and the Reserve Bank of India (RBI) step in, there is no way that state governments can waive the loans. One-time loan waiver by itself is not a solution.

We want to set up a debt relief commission like the one in Kerala, which has statutory powers to intervene in any pending debt. It can enforce the principle that interest cannot be more than the original. The debts that cannot be repaid due to natural disasters must be waived. It can look at individual cases to decide if it has to be reduced, waived or passed on to the state. We want to set this up with about Rs 500 crore as fund.

A recent report by the RBI noted that giving waivers impacts credit flow to agriculture and creates a “moral hazard” whereby borrowers tend to default strategically in anticipation of a loan waiver. Do you feel that there is a different standard for waivers to corporates compared to farmers?

The point on moral hazard is correct. Of course, loan waivers must not be a regular practice. If loanees know that they do not have to repay, then banking will collapse.

The world over, there are exceptions to the rule of moral hazard. If your inability to pay back the debt is beyond your control, then it is not a moral hazard. In the case of farmers [there is] systematic underpayment due to reduced prices. So, if the collapse of an industry is due to reasons beyond control, waiving loans will not lead to a collapse of the banking sector.

I believe that farmers are entitled to waivers. But waivers must be done infrequently and when implemented, it must be done properly. But state governments alone cannot do it. All state governments promising loan waivers are lying because even if they want to, they do not have the resources.

Haryana’s panchayat election rules discriminate against women, Dalits and marginalised groups due to their education criterion. Will the party look to introduce a new legislation?

It is unconstitutional and I am stunned that the Supreme Court (SC) has not done it. It is not only unfair, but you are punishing someone due to the lack of resources of their parents. It is undemocratic in two ways; it amounts to saying that the uneducated deserve zero representation, and it misunderstands representation. 

You are not selecting people to the bureaucracy. Representation is about being able to articulate people's grievances. We vociferously opposed it, but how the SC accepts something that is unconstitutional amazes me.

Nuh is India’s most backward district, according to NITI Aayog. The Mewat region where Nuh is located, also has a problem of cow vigilantism. Your comments?

It [backwardness] has to do with systematic neglect and discrimation which is based on ethnicity and communalism. None of the other 21 districts of Haryana figure among the worst districts [in the index]. But one district features at the bottom. This cannot be an accident.

It is a combination of history, systematic neglect, and conscious discrimination that Mewat has faced in Haryana. Being posted here is considered a punishment posting. This is only 50 km from the millenium city of Gurgaon. Mewat has no rail line, and has poor education and health infrastructure. There is massive unemployment.

People associate Mewat with cattle slaughter, but an aspect everyone conveniently overlooks is that it is a region of cattle herds. Unlike modern-style dairies in other parts of Haryana, in Mewat keeping cows [at home] is the norm. They are gaupalak (cow herd) and not gau bhakshaks (cow eaters). For many Muslim communities, Krishna is an idol.

Pehlu Khan, who was lynched, had gone to purchase a cow not to kill, but because his livelihood depended on it. While they do eat cow, as far as I have enquired no one in Mewat kills a cow kept at home. The meat may be bought from outside because it is one of the cheapest forms of  meat and protein in an area that suffers from malnutrition.

Cow slaughter [allegations] have stigmatised Meos [local Muslim community in northwestern India] as a community, and has given people a license to attack them in adjoining areas of Rajasthan and Haryana, forcing the community to live in fear, and almost prevent cattle trade.

The BJP won 47 seats in the last state elections, and made a clean sweep in the parliamentary elections in May 2019. How do you see the BJP’s fortune change since the parliamentary elections a few months ago? Do you see the abolition of Article 370 influencing the state elections at a time when it is speculated that the Balakot strike had an impact on the parliamentary elections?

It is not the BJP’s track record, which is below mediocre, that keeps it in the race today. Although it is not the most corrupt government, it is certainly one of the most inefficient and mediocre governments in the history of Haryana. This is not just because it failed to keep promises, but when faced with law and order issues, it withered away.

 The previous governments have kept the BJP in business: the Congress by its corruption and the Indian National Lok Dal by its looting and high-handedness. Opposition parties are busy fighting internal battles and have not offered any resistance in the last four or five years, and even close to the election they are non-existent on the ground. The party’s performance in the general elections [in May 2019] offers headwinds for the state elections, and the mindspace captured through nationalist issues. If the BJP does well, it will be due to these reasons.

Your party campaign will be around providing educated but unemployed youth a stipend from the government to help them in their search for employment opportunities. How do you plan to fund and identify beneficiaries?

We have come out with a detailed plan for full employment by proposing seven missions, each of which will contribute to not just employment but the economy in general. Our manifesto is called Poorna Rozgar ka Haryana Model or manifesto for full employment. The idea for stipend is only one of the many aspects.

Our missions aim to improve infrastructure, personnel deployment and government support for childhood learning and care, healthcare, water supply, agriculture, civic amenities, as well as to provide urban employment guarantee (for 200,000 persons for 100 days a year at Rs 500 a day).

All of these will create jobs at various levels. Wage subsidies will be available to any business that employs a Haryana domicile person, reducing incentives for companies to employ people from outside.

I think ours is one of the few attempts made by any political party for full employment. This adds up to 2.02 million and requires Rs 20,000 crore.

How you would raise the money?

This amount [Rs 20,000 crore] is not an impossible amount for Haryana, which has a 2019-20 budget of Rs 1.32 lakh crore. The state can generate Rs 5,000 crore from a slight change in expenditure based on the Finance Commission’s recommendations, and Rs 25,000 crore in tax recoveries that it has not pursued over the years.

Large conglomerates, corporates and builders are sitting on huge patches of land which have not been developed as they are waiting for the market to pick up. This keeps land prices artificially high because it is speculative money. If you tax this, you generate revenue (by taxing at 2% of property value) and incentivises companies to build quickly. The artificially inflated real estate market will deflate slightly, which will benefit the consumer.

Further, anyone who owns more than 500 square yards of urban land [or 4,500 square feet] would be put on a stiff house tax slab. And then mining, which is a source for corruption, needs to be transparent and monitored. All of this could yield around Rs 15,000 crore a year.

One-third of your party’s tickets will go to women candidates, you said. Haryana’s worker-population ratio for women aged 15 and above has been lower than the all-India average for three years to 2016-17, noted a July 2018 government press release. What are the priorities considering issues faced by women in the state?

We made this declaration, but have failed to live up to it. Finally, we are left with 27 candidates of which only five are women. Although we wanted candidates for all 90 seats, money is a huge entry barrier to politics. Not only did we declare that we would give one-third of the tickets to women, but we also tied our other hand by saying we want women of substance not daughters or relatives of established politicians. Both these conditions made it almost impossible to find candidates in Haryana.

Out of the five candidates, four had to be coaxed and persuaded. We are happy that they are standing for elections. If you filter the women in the Haryana assembly for those from political families, you would realise that their number [women’s representation] is close to zero. The trouble is that the bar is so high that a man of ordinary capability and more than ordinary ambition can enter politics, but women have to cross many thresholds to be able to enter politics. I must say that it is an aspect [not having enough women candidates] I feel ashamed of.

The proposal for an additional teacher for every anganwadi is reserved for a woman from the village, which means 26,000 jobs for women. Another aspect is thekabandi (closing of liquor vends) in Haryana. In the last four years, liquor consumption has gone up one and a half times. We are not proposing prohibition, but saying that for any liquor vend, annual renewal of license would be conditional based on approval from two-thirds of the gram sabha (local self government) including half the total women voters of a village. This holds for urban residential areas.           

Correction: The interview has been updated to show unemployment figure in Haryana is 2.02 million and not 2.2 million, and the revenue to be Rs 15,000 crore and not Rs 50,000 crore.

(Paliath is an analyst with IndiaSpend.)

We welcome feedback. Please write to respond@indiaspend.org. We reserve the right to edit responses for language and grammar.

Bengaluru: As the Bharatiya Janata Party (BJP) in Haryana attempts to win a second successive term in the state assembly elections to be held on October 21, 2019, Yogendra Yadav-led Swaraj India is contesting its first election. Yadav, an activist-academic and psephologist, formed the party after his expulsion from the Aam Aadmi Party in April 2015. Having announced that the party would contest all 90 seats, it has been able to field candidates in 27.

“Although we wanted candidates for all 90 seats, money is a huge entry barrier to politics,” Yadav, 56, Swaraj India’s president, told IndiaSpend in an interview, in which he framed the salient issues for Haryana’s upcoming state elections. Yadav was a part of Lokniti, a research programme of the Centre for the Study of Developing Societies. He was a member of the National Advisory Council for the implementation of the Right to Education Act in 2010. He is not contesting this election.

Haryana has 2.02 million unemployed people, and recorded India’s highest unemployment rate of 28.7% in August 2019. Yet, the ruling BJP “has managed to detach the economic from the political”, Yadav said. Its performance in the 2019 parliamentary elections “offers headwinds for the state elections”, as well as public support captured through nationalist issues.

In an interview with IndiaSpend, Yadav spoke about the reasons for unemployment in Haryana, issues around agriculture, and other factors that may influence election results.

You said unemployment was the biggest election issue in Haryana since more than 2 million residents are unemployed, highest compared to states with larger populations such as Punjab, Madhya Pradesh, Tamil Nadu and Jharkhand. What is the state-specific problem leading to such high unemployment?

The information that Haryana has more than 2 million unemployed is based on the Centre for Monitoring Indian Economy’s report for May to Aug 2019, which not only gives percentages but sector-wise estimates of total numbers. In terms of sheer numbers, Haryana has more unemployed than states that are larger. 

To my mind there are several reasons. Agriculture is shedding workers at an alarming pace due to mechanisation. According to estimates that I have seen, about 2% of the rural woking population leaves agriculture every year. Between 2011-12 and 2016-17, the proportion of workers engaged in agriculture as a percentage of the total rural workforce declined from around 52% to 41% in Haryana. This is almost two percentage points every year which is alarming.

Secondly, the poorest of the poor are never unemployed, they cannot afford to be unemployed. So it is only with some education and prosperity that you can afford to remain unemployed. Haryana has reached a point where there is education and prosperity [per capita advance estimates for 2018-19 is Rs 2.3 lakh]. The number of people who live in abject poverty and are willing to do anything to fill their stomach has gone down, and aspirations have gone up. So if you look at the distribution of unemployed in Haryana, the majority are not below matriculation [10th standard]. Out of the 2.02 million [unemployed], around 1.1 million have a 10th or plus-two education. They are educated enough to aspire for a decent job, but not educated enough to get a decent job. I believe that as India’s per capita income rises, we are likely to witness this across the country.

Another reason is recent and could be temporary. As Haryana is a manufacturing hub, it has seen retrenchment over the last few months. The Manesar-Gurgaon auto belt has companies retrenching workers.

The auto sector has a major presence in Haryana. In your travels, what have you assessed as the impact of the slowdown in the sector where many workers are contract workers? Does it have an electoral impact given than often workers are from outside the state?

One of the achievements of this regime is that it has managed to detach the economic from the political. A serious slowdown of the economy does not translate into a serious disenchantment with the regime, atleast as of now. I am not sure about the electoral impact, but there are consequences. Although I have not been able to verify, I have heard that when they [companies] have to shed workers, the first ones to be removed are permanent workers and not contract workers. It becomes a good pretext to get rid of better-paid staff.

Even if contract workers or casual labour from outside are removed, it affects the local economy. The workers live in small rented homes and become substantial contributors to the local economy. So, a slowdown affects everything.

Despite widespread rural and agrarian distress, and the farmers' march in November 2018 in Delhi demanding waivers and remunerative prices, the BJP won the general election by a huge margin. “Farmers will be assured of at least one and a half times the price of all the input costs along with complete freedom from debt,” Swaraj India press release noted. How do you plan to achieve this? How will you go beyond loan waivers?

Our proposal is two-fold. We are promising that 1.5 times of total cost (cost of capital and rent on land or C2) for Haryana. This would mean Rs 4,000 crore of expenditure. In these times of economic slowdown, it is the best way of distributing money.

We are proposing mechanisms for invigorating the demand for milk and poultry. We plan to offer a glass of fresh milk in mid-day meals and Integrated Child Development Services covering more than 1 million children. The milk industry all over the country has ostensibly less demand, which is strange. We are encouraging domestic demand for milk.

It is not possible for state governments to waive all loans. Unless the Centre and the Reserve Bank of India (RBI) step in, there is no way that state governments can waive the loans. One-time loan waiver by itself is not a solution.

We want to set up a debt relief commission like the one in Kerala, which has statutory powers to intervene in any pending debt. It can enforce the principle that interest cannot be more than the original. The debts that cannot be repaid due to natural disasters must be waived. It can look at individual cases to decide if it has to be reduced, waived or passed on to the state. We want to set this up with about Rs 500 crore as fund.

A recent report by the RBI noted that giving waivers impacts credit flow to agriculture and creates a “moral hazard” whereby borrowers tend to default strategically in anticipation of a loan waiver. Do you feel that there is a different standard for waivers to corporates compared to farmers?

The point on moral hazard is correct. Of course, loan waivers must not be a regular practice. If loanees know that they do not have to repay, then banking will collapse.

The world over, there are exceptions to the rule of moral hazard. If your inability to pay back the debt is beyond your control, then it is not a moral hazard. In the case of farmers [there is] systematic underpayment due to reduced prices. So, if the collapse of an industry is due to reasons beyond control, waiving loans will not lead to a collapse of the banking sector.

I believe that farmers are entitled to waivers. But waivers must be done infrequently and when implemented, it must be done properly. But state governments alone cannot do it. All state governments promising loan waivers are lying because even if they want to, they do not have the resources.

Haryana’s panchayat election rules discriminate against women, Dalits and marginalised groups due to their education criterion. Will the party look to introduce a new legislation?

It is unconstitutional and I am stunned that the Supreme Court (SC) has not done it. It is not only unfair, but you are punishing someone due to the lack of resources of their parents. It is undemocratic in two ways; it amounts to saying that the uneducated deserve zero representation, and it misunderstands representation. 

You are not selecting people to the bureaucracy. Representation is about being able to articulate people's grievances. We vociferously opposed it, but how the SC accepts something that is unconstitutional amazes me.

Nuh is India’s most backward district, according to NITI Aayog. The Mewat region where Nuh is located, also has a problem of cow vigilantism. Your comments?

It [backwardness] has to do with systematic neglect and discrimation which is based on ethnicity and communalism. None of the other 21 districts of Haryana figure among the worst districts [in the index]. But one district features at the bottom. This cannot be an accident.

It is a combination of history, systematic neglect, and conscious discrimination that Mewat has faced in Haryana. Being posted here is considered a punishment posting. This is only 50 km from the millenium city of Gurgaon. Mewat has no rail line, and has poor education and health infrastructure. There is massive unemployment.

People associate Mewat with cattle slaughter, but an aspect everyone conveniently overlooks is that it is a region of cattle herds. Unlike modern-style dairies in other parts of Haryana, in Mewat keeping cows [at home] is the norm. They are gaupalak (cow herd) and not gau bhakshaks (cow eaters). For many Muslim communities, Krishna is an idol.

Pehlu Khan, who was lynched, had gone to purchase a cow not to kill, but because his livelihood depended on it. While they do eat cow, as far as I have enquired no one in Mewat kills a cow kept at home. The meat may be bought from outside because it is one of the cheapest forms of  meat and protein in an area that suffers from malnutrition.

Cow slaughter [allegations] have stigmatised Meos [local Muslim community in northwestern India] as a community, and has given people a license to attack them in adjoining areas of Rajasthan and Haryana, forcing the community to live in fear, and almost prevent cattle trade.

The BJP won 47 seats in the last state elections, and made a clean sweep in the parliamentary elections in May 2019. How do you see the BJP’s fortune change since the parliamentary elections a few months ago? Do you see the abolition of Article 370 influencing the state elections at a time when it is speculated that the Balakot strike had an impact on the parliamentary elections?

It is not the BJP’s track record, which is below mediocre, that keeps it in the race today. Although it is not the most corrupt government, it is certainly one of the most inefficient and mediocre governments in the history of Haryana. This is not just because it failed to keep promises, but when faced with law and order issues, it withered away.

 The previous governments have kept the BJP in business: the Congress by its corruption and the Indian National Lok Dal by its looting and high-handedness. Opposition parties are busy fighting internal battles and have not offered any resistance in the last four or five years, and even close to the election they are non-existent on the ground. The party’s performance in the general elections [in May 2019] offers headwinds for the state elections, and the mindspace captured through nationalist issues. If the BJP does well, it will be due to these reasons.

Your party campaign will be around providing educated but unemployed youth a stipend from the government to help them in their search for employment opportunities. How do you plan to fund and identify beneficiaries?

We have come out with a detailed plan for full employment by proposing seven missions, each of which will contribute to not just employment but the economy in general. Our manifesto is called Poorna Rozgar ka Haryana Model or manifesto for full employment. The idea for stipend is only one of the many aspects.

Our missions aim to improve infrastructure, personnel deployment and government support for childhood learning and care, healthcare, water supply, agriculture, civic amenities, as well as to provide urban employment guarantee (for 200,000 persons for 100 days a year at Rs 500 a day).

All of these will create jobs at various levels. Wage subsidies will be available to any business that employs a Haryana domicile person, reducing incentives for companies to employ people from outside.

I think ours is one of the few attempts made by any political party for full employment. This adds up to 2.02 million and requires Rs 20,000 crore.

How you would raise the money?

This amount [Rs 20,000 crore] is not an impossible amount for Haryana, which has a 2019-20 budget of Rs 1.32 lakh crore. The state can generate Rs 5,000 crore from a slight change in expenditure based on the Finance Commission’s recommendations, and Rs 25,000 crore in tax recoveries that it has not pursued over the years.

Large conglomerates, corporates and builders are sitting on huge patches of land which have not been developed as they are waiting for the market to pick up. This keeps land prices artificially high because it is speculative money. If you tax this, you generate revenue (by taxing at 2% of property value) and incentivises companies to build quickly. The artificially inflated real estate market will deflate slightly, which will benefit the consumer.

Further, anyone who owns more than 500 square yards of urban land [or 4,500 square feet] would be put on a stiff house tax slab. And then mining, which is a source for corruption, needs to be transparent and monitored. All of this could yield around Rs 15,000 crore a year.

One-third of your party’s tickets will go to women candidates, you said. Haryana’s worker-population ratio for women aged 15 and above has been lower than the all-India average for three years to 2016-17, noted a July 2018 government press release. What are the priorities considering issues faced by women in the state?

We made this declaration, but have failed to live up to it. Finally, we are left with 27 candidates of which only five are women. Although we wanted candidates for all 90 seats, money is a huge entry barrier to politics. Not only did we declare that we would give one-third of the tickets to women, but we also tied our other hand by saying we want women of substance not daughters or relatives of established politicians. Both these conditions made it almost impossible to find candidates in Haryana.

Out of the five candidates, four had to be coaxed and persuaded. We are happy that they are standing for elections. If you filter the women in the Haryana assembly for those from political families, you would realise that their number [women’s representation] is close to zero. The trouble is that the bar is so high that a man of ordinary capability and more than ordinary ambition can enter politics, but women have to cross many thresholds to be able to enter politics. I must say that it is an aspect [not having enough women candidates] I feel ashamed of.

The proposal for an additional teacher for every anganwadi is reserved for a woman from the village, which means 26,000 jobs for women. Another aspect is thekabandi (closing of liquor vends) in Haryana. In the last four years, liquor consumption has gone up one and a half times. We are not proposing prohibition, but saying that for any liquor vend, annual renewal of license would be conditional based on approval from two-thirds of the gram sabha (local self government) including half the total women voters of a village. This holds for urban residential areas.           

Correction: The interview has been updated to show unemployment figure in Haryana is 2.02 million and not 2.2 million, and the revenue to be Rs 15,000 crore and not Rs 50,000 crore.

(Paliath is an analyst with IndiaSpend.)

We welcome feedback. Please write to respond@indiaspend.org. We reserve the right to edit responses for language and grammar.


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