Is 2013 turning into
1991 once more?
The engines of reform have indeed ground to a halt in 2013.
What began in 1991, in the midst of an unprecedented economic crisis, is
waiting to be restored in the midst of another.
The scale of the
problems confronting the Indian economy are indeed larger now. But this can
also be taken as a barometer of their success over the last 25 years. That we
are unable to further promote the unshackling of the economy and the removal of
more controls on its functioning is a telling point.
We are loathe to let go of our statist ways and march
confidently towards a more competitive and open market economy. We cannot seem
to do this without benefit of crisis situations that force our hands. We brazenly
discount the benefits, the sea- changes wrought in our life-styles and
possibilities today, almost all of which have accrued since 1991, and carp
constantly about the shortcomings instead.
Our natural thinking and bias in the main is not towards things
like globalisation, modernisation, market- led efficiencies and growth- led
upliftment of the masses in poverty. We think prosperity polarises, and the
rich get richer and the poor are left to their wretchedness. We don’t think
market economics can get us elected.
Many of our left-leaning ideologues, politicians,
bureaucrats and intellectuals feel that economic growth that is not inclusive is
not worth having. They do not believe in the trickle- down effect, nor that
prosperity raises all boats. And they refuse to believe market economics, with
its innate competitive spirit, can take the lame and halt with it!
And yet, the statistics of the growth years since 1991 show
that poverty has in fact been reduced, and much more substantially, than in the
long socialist decades that preceded it.
As the population has grown to over 1.21 billiion people,
many more from the illiterate working class, traditionally working with their
hands, have been raised into the middle class by dint of their progeny being
better educated.
The children of the illiterate poor have learned white-
collar skills that they have deployed to earn a better paid and dignified
living. The urban and rural middle class and their richer brethren is now a
force of over 40% of voters that cannot be ignored. Still, the facts on the
benefit of reforms, the changes it has wrought, are no match for the virulent
rhetoric against them.
The DNA of the Government of India and most Indian thinking
is incorrigibly socialist. It is this that prompts the passage of the Food Bill
in the Lok Sabha, and the plethora of other welfare measures that the finances
of this country will be hard pressed to bear.
This particularly when our growth has been simultaneously
reduced to near zero by unhelpful policy measures. But it also makes further
reforms inevitable because our own freedom of movement will be severely
curtailed by the lending agencies we will be forced to go to soon enough.
But over the years, the innate socialist thinking has only
picked up baggage. It has abrogated to
itself the ideals of the secular-liberal, the inclusive, the idea of unity in diversity,
the pluralism; whether it is manifested fairly in practice or not, and whether
or not it is being used for electoral gains in a cynical manner.
This is
understandable, because the mind-set itself has come by way of an inheritance.
It has a sweep of history. Socialism, even Communism, was all the rage in the
years leading up to Independence. The unification of Italy under Garibaldi, of
Germany under Bismarck, both in the 189th century, the consequent
reduction in the power of royalty, the later theories of Marx and Engels, the
Russian Revolution of 1917, and the overthrow of the Tsar of all the Russias.
Then great Communist politicians, raised to power by the masses, Lenin,
Trotsky, Stalin, Mao, even Castro.
The relentless eclipse of British imperialism on which the
sun never used to set. Two World Wars that spelt the end of aristocratic and
landed gentrification. The rise of organised labour and the pushing back of
remaining hereditary rank and privilege.
But, the day of Socialism and Communism that emerged out of
this cauldron is also largely done. This even in the midst of a mighty fall in
the bastions of capitalism. Capitalism is indeed given to periodic booms and
busts, but each time its phoenix rises higher from its own ashes.
Once again, it is
under pressure, but in the midst of all its travails, it does possess the lure
of freedom, of unlimited individual possibility. It is this tantalising thing
that helps it endure. Socialism is dreary in comparison with its ideal of
uniformity. But in India, it is experiencing something of a revival by perhaps
trying to seize its moment when global capitalism is not doing well.
But once, not very
long ago, it was the right way to be. It was post-colonial, fashionable,
hopeful, brave, and was meant to be, above all, classless, non-casteist, not
bothered about colour and race, fair and equitable. It is what George Orwell’s Animal Farm might have been if it wasn’t
an anti-Stalinist allegory.
That both Fabian Socialism and Marxism became the God that
failed took years to sink in. In the Seventies, the slogans on Calcutta’s walls
under the red hammer and sickle said: ‘China’s Chairman is our Chairman’ in an
attempt to project the local into the Communist International Movement.
It took the fall of
the USSR, the metamorphosis of China into its capitalist incarnation, the
sinking of Cuba into a time- warp, the chaos of African nationalism and
freedom, the delirium of a dream betrayed in South America. All this had to
come about, along with bits of the Berlin Wall turned into souvenirs for
tourists; for the force of this dream to weaken.
In South America, encouraged by large reserves of oil and
gas in some parts, Socialism still thrives on its adapted myths of state
paternalism and the equality of the heaving masses.
Welfarism, the more genteel face of Socialism, still
troubles France and Greece, Cyprus, Greenland, Ireland, Spain, in fact wherever
welfarism meets the strictures of austerity. Even without having to cut back,
it distorts economic reality, as in the oil rich countries of the Middle East.
That it is seeing a resurgence in India when we are particularly impoverished,,
is both reckless and desperate on the part of the government.
The sense of entitlement it breeds in the poor, the very
sense of “rights” the government is trying to promote, is enormous. It is
ultimately debilitating because it is politically difficult to moderate or roll
back. It is a gigantic free lunch that nevertheless must be paid for.
But, though nobody at the party as beneficiary, either as
the giver of largesse expecting votes in return, or the receiver, is bothered
about it now, it is not responsible economics.
The largesse of massive welfarism is not based on the
dialectics of demand and supply and commercial transaction, but its profligate
cousin. This irresponsible soul say there is plenty more where this came from
irrespective of ground realities.
Nehru’s dream of the first decade after the independence he
fought so hard for was of Non-alignment and Commanding Heights of the Economy
and Panchsheel and Temples of Modern India and Five Year Plans. It was all
idealistic and well-intentioned and a product of its times, and should have
been let go when he died in 1964.
We really could never afford our Socialism and even more so
now when the scale of works is very much greater. God knows it was clear even
by then, in 1964, that very little of it worked in practice, and India was
falling farther and farther behind the rest of the world.
We were forced by our impoverished socialism to beg America
for food to tide us over, for protection against being overwhelmed by China.
But we pretended that it was all diplomacy. What will we have to do now when we
start to renege on our sovereign guarantees again? We are not part of the EU or
NATO. Who will bail us out?
The truth is we have had to suffer in the name of poverty
alleviation and other such heady populist clap-trap. We have disdained profit
and refused to recognise it all takes money that must be earned.
Instead of moving away from Socialism, we gave it a second
lease of life under Nehru’s daughter Indira Gandhi, and now here is a third lease under Mrs. Sonia Gandhi, who
thinks it may even deliver a return of UPA III.
Mrs. Indira Gandhi’s version of socialism was less
idealistic, less democratic, and more twisted, part snobbery and elitism,
nationalistic, even jingoistic, but with tinges of KGB style repression. And
this too lasted twenty more years, haughtily ignoring our pathetic rate of
growth, and truly put India out of the contest.
Liberalisation, to be fair, began as a young man’s dream
under Prime Minister Rajiv Gandhi in 1985. But he was killed too soon to see it
through, even though he did earn the epithet “Computerji” during his brief season
in power. But the plot was well and truly hatched; and it came through,
midwifed by crisis, later the same year after he was killed, in 1991.
Perhaps crisis is also in the DNA of this young nation of 67
years. Because, despite all its professions of Ahimsa influenced by the
Mahatma, it was born in the blood-bath of Partition that carried away a half a
million innocent souls. And even tied up
the loose ends, by blowing up its architect, once our last Viceroy, Lord
Mountbatten, only years later, and in an Irish water.
In 1991, we were forced by dire circumstances, and under
World Bank dictation, to liberalise and reform our economy. It was more like a
treaty of surrender, our own Versailles Hall of Mirrors capitulation to market
forces. We had lost a war against India’s innate destiny to be eventually
prosperous. It might have looked and felt like a great humiliation at the time,
but it was a great boon of growth as it turned out to be.
But in order to qualify for the bail-out we badly needed to
stave off a default of our sovereign commitments; we had to sign on the dotted
line. The prosperous years that followed not only freed India from perennial
shortages of everything Soviet style, but went some way to spawning the Service
Sector that took over most of the growth, and over 50% of the economy.
We became knowledge warriors, software surfers, IT heads,
thanks to Nehru’s emphasis on the IIT’s and higher education, and our economy
became recognised as the second fastest growing in the world- this particularly
after a decade of high growth had gone by.
Another decade and a half passed, while we basked, more or
less in the glory of being regarded as the future power houses of the 21st
century along with China. Twenty- five years since 1991 however finds us
derelict once more, abandoned by the side of the road, out of pep and gas.
We will have to go once again to the IMF and World Bank for
a bail-out and they will impose conditions on us. Our powers that be will
accept them meekly because they can avoid taking responsibility for the
political fallout by portraying it as a necessary, even mandatory sacrifice to
save the country’s economy.
The people of India and the entities interested in investing
here will benefit, and that of course is the important thing. Our political
thinking and philosophy can only change with the passage of time when the
people who run our country have been divested of their socialist heritage. The prosperity of the decades to come will
place it in the dustbin of history as a wasteful, inefficient and failed idea
that pretends to be equitable. And future generations will wonder why it took
us so very long to change our ways.
(2,005 words)
August 28th,
2013
Gautam Mukherjee
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