BJP’s new roadmap for Kashmir may derail due to economic slowdown

The bold move to unshackle J&K from the prison Article 370 confined it to has given the Modi government political goodwill across the country. Let the economy not deflate it.

 |  4-minute read |   10-08-2019
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The consequences, intended and unintended, of the Jammu and Kashmir (Reorganisation) Bill will be far-reaching. The fear that Pakistan-sponsored terrorism will spike is unfounded. With the J&K Police now under Central control, seamless coordination between the Indian Army, Central Armed Police Forces (CAPF) paramilitaries and the state’s police cadre will make counter-terrorism operations more effective.

Congress collateral

Once Kashmir’s feudal leaders, many of them facing charges of corruption, are released from their comfortable detention in guest houses and five-star hotels in Srinagar, the political consequences of J&K’s bifurcation into two Union territories (UTs) will fully sink in. Prime Minister Narendra Modi and Home Minister Amit Shah have, in one clinically executed stroke, transformed the country’s electoral math.

Meanwhile, Congress is in disarray. The party’s chief whip in the Rajya Sabha, Bhubaneshwar Kalita, resigned from both the Congress and Parliament. He joined the BJP on Friday. “The ideology of Congress today looks like it is committing suicide and I do not want to be a part of it,” he said. “I do not want to accept this whip and I am resigning from the Congress Party.” Open dissent against the party’s line on Article 370 has broken out with both the old guard (Sonia Gandhi’s aide Janardan Dwivedi) and the young guard (Jyotiraditya Scindia, among others) supporting the BJP’s move.

J&K is set for transformation. Private investment in tourism, hospitality, infotech, infrastructure, fast-moving consumer goods (FMCG), pharmaceuticals and agriculture could pour in. The Confederation of Indian Industries (CII) is planning the state’s first-ever investment conference in October.

The J&K Reorganisation Bill makes four crucial changes in J&K’s future electoral map. First, delimitation. This could lead to Assembly’s Muslim majority constituencies in Jammu losing those majorities. Second, reservations for SC/STs across Assembly segments could again change the electoral math. Third, the J&K Lieutenant Governor designate, Satya Pal Malik will have the power to nominate two women MLAs to the new J&K Assembly. Four, the number of MLAs apportioned to Jammu in the reorganised J&K Union territory is set to rise. The old J&K Assembly had 46 MLAs from Kashmir and 37 MLAs from Jammu. The new J&K Assembly, following delimitation, will likely have an equal number of MLAs from each region.

New electoral map

The cumulative effect of these changes will not please the families who have monopolised power in J&K for 70 years. The next J&K Assembly election could see the BJP sweep Jammu’s newly delimited Assembly constituencies and win a disproportionate number of SC/ST reserved seats. The prospect of the BJP winning power on its own in J&K for the first time since Independence with its own Chief Minister has rattled the old feudal order.

farooq-abdullah_081019125328.jpgThe move has rattled the perpetrators of dynastic politics in Jammu & Kashmir. (Photo: Reuters)

The Bill has been challenged in the Supreme Court, but it is unlikely to prove successful. The Parliament, which represents the will of the people, remains supreme, a principle former PM Rajiv Gandhi employed in Parliament to overturn the Supreme Court’s verdict in the Shah Bano case in 1986.

Notwithstanding the political and electoral benefits of its move on J&K, the BJP cannot afford to be sanguine about the economic slowdown. Public memory is short. If job losses and the overall economic slowdown persist, the political capital built by the changed status of J&K will evaporate. Finance Minister Nirmala Sitharaman is meeting sectoral leaders to seek suggestions on kick-starting the economy. She needn’t look too far for answers. Four present themselves.

Economy up next

One, while the Fiscal Responsibility and Budget Management Act, 2003 is an important benchmark, a Keynesian stimulus is imperative to reflate an economy caught in a deflationary spiral. Two, quickly implement the decision to recapitalise banks, non-banking financial companies and housing finance companies. Automotive and infrastructure, both key drivers of the economy, are starved of funds. Three, privatise at least a dozen of the 85-plus listed public sector units (PSUs). This will raise funds, make PSUs more productive and create new jobs. Four, cut taxes sharply. The new direct tax code proposed by the Arbind Modi panel which was to be tabled on July 31 has been postponed by 15 days, but its details are in the public domain.

inside_081019010436.jpgBJP may have earned the political goodwill but will have to address the economic slowdown now. (Photo: Reuters)

The panel recommends nil personal tax up to Rs 6 lakh annual income; 15 per cent tax for annual income between Rs 6 lakh and Rs 20 lakh; and 30 per cent tax for annual income above Rs 20 lakh. These are sensible proposals, mimicking a flat tax regime that several countries have adopted. It will increase compliance and boost direct tax revenue.

These changes will put more money in people’s pockets and reignite consumption. India needs a strong economy to pull over 250 million citizens out of poverty. Winning elections is important. But without a robust economy, job creation and alleviating poverty, electoral victories can turn rapidly into unexpected defeats. The bold move to unshackle J&K, from the prison Article 370 confined it to, has given the Modi government political goodwill across the country. Let the economy not deflate it.

(Courtesy of Mail Today)

Also read: Kashmir's Slippery Slope: Article 370's revocation sets a dangerous precedent for us all


Minhaz Merchant Minhaz Merchant @minhazmerchant

Biographer of Rajiv Gandhi and Aditya Birla. Ex-TOI & India Today. Media group chairman and editor. Author: The New Clash of Civilizations

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