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Fiscal And Credit Policies Essay

1513 words - 7 pages

Since time immemorial, policymakers have embraced the conventional economic wisdom that expansive fiscal and credit policies would accelerate growth and redistribute income. However, these policies do not necessarily result in high economic growth and an improved Human Development Index (HDI) because different countries respond differently to such policies. These policies could in fact cause crises resulting from galloping inflation and therefore be harmful to the welfare of the people of a country. Hence, the government takes measures to ensure the betterment of their people during these crises. These measures taken by the government is to ensure equality and inclusion of the ‘people’ against the elite, thereby being called populist measures.
This paper will examine the populist measures of India and China, comparing them and evaluating their strengths and weaknesses to evaluate which system of governance better sustains a steady growth of socioeconomic populism. The paper will primarily examine the populist measures of India and evaluate them in comparison to the populist measures in China. As the welfare ideologies are oft considered similar, this paper will help us to study populist measures in two different governance systems and suggest any changes that can be made in either structure.
“An ideology that considers society to be ultimately separated into two homogeneous and antagonistic groups, ‘the pure people’ versus ‘the corrupt elite’, and which argues that politics should be an expression of the volonté générale (general will) of the people.”- Mudde (2004).
In a populist ideology, the ‘pure people’ are of paramount importance and demand primacy of the people. Populism is a political doctrine wherein one sides with "the people" against "the elites". However the definition of this group of ‘people’ is quite subjective and needs to be localized depending on the socioeconomic scenario. In any country, there exists a backdrop of unequal societies in which people are divided into the haves and have-nots; with the majority of the haves reaping profits from modernization and globalization reforms. Therefore, the government employs welfare schemes that would alleviate the conditions of the marginalized people. A part and parcel of political rallying usually involves political groups promising far more than they can accomplish. Therefore, there generally exists a sense of extreme crisis for the emergence of populism, as embodied by trade and labour unions.
The need to engender populist measures is derived from poor socioeconomic conditions and the lack of transparency of political institutions. These measures are required to emphasize growth and income redistribution and curtail the risks of inflation and financial deficit along with unemployment and poverty. India’s economic growth is far below potential because of a weak currency and increasing inflation where as China is spreading the benefits of its booming economy more widely without...

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