Indian Economy in Minnow Raj: Tera Kya Hoga Kaliya?

Indian Economy in Minnow Raj: Tera Kya Hoga Kaliya?



As we launch into the first-phase of our tumultuous, Naxalite attack-ridden, month-long General Elections for 400 million voters, we need to be justifiably proud of the endeavour. It will cost us at least US $ 2 billion to execute. But, after all the sound and fury is over on May 16th, there is a clear threat looming pretty much constant to all expected outcomes.

It is the resurrected threat of another bout of a regressive Luddite/Lohiaite/Loknitiist/Socialist/Casteist/Populist economic muddle confronting India’s future. It is an anticipated muddle. And we must brace for it. Because, it will be brought on, not just by the natural infirmities of coalition politics, now par for every course, but largely because of the nature of its constituent parts.

Most of the regional and small parties of today, without whom there will be no forming a government this time, were spawned on a diet of anarchic and self-defeating Socialist politics. Their views were inspired by erstwhile freedom-fighters Pandit Ram Manohar Lohia and Loknayak Jayaprakash Narayan. These worthy gentlemen revolted against our benighted socialism of the time, which they, however, found to be elitist!

Of course it is true that even after 61 years of independent India, we have been unable to reconcile the needs of the hinterlands of Bharat with the internationalism of India. And this is the principle reason, along with a desire for a share of voice, for the rise of the regional and small parties.

Pandit Nehru tried to reconcile the two worlds, the urban and the rural, the educated and the masses, by embracing Socialism. As a former imperial colony, we took on an early anti-capitalist policy direction. Of course, it didn’t work then, and not just for us, and it won’t work now. But the Bharat versus India schizophrenia persists, with some new overtones of India Inc. versus the rest.

Back then, even without more extreme hands at the helm of power, we endured the infamous “Hindu rate of growth”, for over thirty years, pegged at no more than 2 per cent of GDP. We started to grow at a better pace with increasing doses of economic liberalisation since 1991 and the future demands an acceleration of market reforms if we are to maintain high GDP growth rates.

But followers of Lohia and Narayan amongst us even today, aided and abetted by their new generation ranks of have-nots, those as yet untouched by the effect of market reforms, populate the small and regional parties, all seething with assertion. But do their leaders realise the way ahead as they seem poised to wrest a greater share of power at the centre? Do they see the practicality in policies that can help them deliver on their promises? Do they know there is nothing to gain by blocking progress and going back to a discredited and woolly ideology that simply does not work?

In this television and internet age, they had better realise they will not get away with it for long, as each regional party in power is already witnessing. Bharat or India alike will reward or punish its rulers based on development and its pleasant effects on their daily life and populism can only go so far.

But in other matters, in the assertions of their first flush, these self-same Lohiaities and Loknitiists did succeed at extending the march of Indian democracy. Looking back, the ferment engendered by them in the Sixties, and more particularly in the Seventies and Eighties, led to the end of the dominant, and undeniably arrogant one-party system, in favour of multiple parties, the advent of coalition governments, and a sprinkling of statistically significant Independents. And, it might be argued, even national parties proscribed to sizes well short of a majority as their vote-banks were redistributed.

But economically, by inclination, the regionals and smalls have always been retrograde so far. Irrespective of the global trend, they tend to position themselves further Left than the Fabian Socialism and Soviet inspired “mixed” economy favoured by Pandit Nehru and Indira Gandhi. They refuse to update their economics. Unless, that is, we take Union Minister Lalu Prasad Yadav’s positive handling of the Railway Ministry, and not that of the State of Bihar, as the economic policy pointer for the future.

In the early days of their struggle, the Lohiaites and Loknitiists also wanted to overthrow the upper-caste stranglehold of the Congress Party. The consequent ferment they engendered did; aided later by Prime Minister VP Singh’s Mandalisation of the Eighties, and the BSP’s Dalit empowerment of even more recent times.

But whenever these social progressives ran governments, or helped to run them, at the state level, or the centre, in stable coalitions, or majorities, or short-lived minority configurations; their economic policies have always been sadly backward, lacklustre and riddled with corruption.

This may not have mattered when India saw itself as a have-not, as a Third World nation. But now, with clear-eyed aspirations of becoming a leading world economy it must think differently. Since it is clear that the regional parties have come to sit at the high table for good they must resist the temptation to trash it. They must change course and adopt the development economics that will keep them in good stead with the electorate now and into the future.

Let us remember that all the socialist misdirection of the past before 1991 has already put us fifty years behind more market-economy based former colonies. And at a vast economic and strategic disadvantage to a politically Communist but economically Capitalist China.

With the increasing significance of regionals and smalls, it must be noted that their survival, in such luxuriant numbers, on a very crowded political bus, is unlikely. The victors will be those who have effectively savaged, vanquished and subsumed one of their own kind and/or taken to the service of one of the national parties.

It will be either DMK or AIDMK and friends. Likewise in state after state of this 28 state contest that will have to add up to a national election with a winning coalition and coherent policy thereafter. But all this comes afterwards.

For the moment, the most that the big fish can hope for is to lead a flock of disparate minnows into government formation after May 16th 2009 rather than the other way around.


(1,050 words)

16th April 2009
Gautam Mukherjee

Published as Leader EDIT in The Pioneer on 17th April 2009 as "Economy in minnow raj" and online at www.dailypioneer.com. Also archived online under Columnists.