By
Randeep
Wadehra
In popular perception, ideology
is a system of political concepts and beliefs. Therefore, we expect political
parties to have distinct ideologies so that we may know what each political
party stands for. Unfortunately, in India, barring the communists, political
parties have been rather ambiguous about their ideological moorings. Therefore,
we have seen the Indian National Congress swinging between socialism and
capitalism and the Bharatiya Janata Party getting nationalist when out of power
and pragmatic when in sight of it. As for others like TMC, SP, BSP etc, their
ideologies remain a mystery although the SP does swear by Lohia. No wonder,
Karl Marx – considered the progenitor of modern concept of ideology – had
denounced ideologies as “false systems of political, social, and moral concepts
invented by ruling classes out of self-interest.” Nevertheless, the concept
gained global currency.
After Independence, India chose a
hybrid politico-economic system, called mixed economy, wherein public sector
controlled its “commanding heights” with private sector playing a secondary
role. It was supposed to be an ideal amalgam of capitalism and communism. The
communist economy had its basis in socialism – a political ideology developed
and enunciated by Karl Marx as a reaction to rampant exploitation that existed
in the capitalist system prevalent in the post-Industrial Revolution Europe. Ironically,
even as capitalism gradually became more egalitarian, communism turned
tyrannical and exploitative, against which the proletariat – its supposed beneficiaries
– eventually rebelled. The 20th century’s final years witnessed the
discrediting of socialism and dismantling of communist economies’ structures.
In India, the mixed economy dogma
proved to be confusing and ineffective. The public sector, along with populist
economic policies, became the biggest drain on the economy – plummeting India into
the state of near-bankruptcy in 1991, thanks to the tactile disconnect between
policymaking and ground realities. Most Indians were living in abject poverty;
unemployment was rampant and there were no avenues for absorbing even the
highly skilled educated youth; the Public Sector Units were in no position to
employ these highly skilled professionals. Indigenous research and development
was not even an option for facilitating future industrial growth; the private sector
became stunted, thanks to policies that actively discouraged corporate growth.
Despite having a head start over the Asia Pacific countries as early as the
1950s, our entrepreneurs could not achieve their full potential. Nowhere else
had a state so actively shackled its own economic growth as India. Right from
staffing to sourcing of raw materials to production targets, and much else, everything
was at the mercy of the mai-baaps bossing over the system. The so-called
‘License-Permit Raj’ became its most glaring leitmotif.
Narasimha Rao shed all socialist
shibboleths and pretensions, and called in Manmohan Singh to recue India. Dr.
Singh did a wonderful job as Finance Minister. No wonder, he became the UPA
Mark-1’s first choice for the Prime Minister’s post. He ushered in market
economy and reworked various policies in order to free the private sector from
all those shackles that had turned it into a nursery for bonsai companies. In
fact, this was a continuation of the economic agenda set by Narasimha Rao-Singh
duo, and further developed by AB Vajpayee’s NDA regime, which had liberalized
the economy and pushed back the spheres of influence of various ministries and
bureaucracies. Suddenly, the reviled land of “Hindu Growth Rate” transformed
into a muscular economic powerhouse raring to challenge the Asian Tigers, in
terms of not only growth rates but also quality of life. There were visible
signs of prosperity percolating down to the grassroots. A country, where
telephone used to be a symbol of luxury and power, suddenly witnessed even rickshaw
pullers flaunting cell phones. The middle-classes had acquired the ability to
purchase cars, hi-definition televisions, computers etc. Thanks to the burgeoning
private sector, young collegians were infected with optimism vis-à-vis their
career prospects. No longer was a degree in engineering or medicine the sole
passport to five figure monthly pay packets. Things looked upbeat, but…
The global economic slowdown
caused panic in the Indian corridors of power. As always, lack of vision became
the bane of India’s planning and policymaking. Socialism was taken out of the
deep freeze, given a bit of makeover and presented as a magic wand that would
shoo away the specter of poverty, which had begun to loom large on the
politicians’ mindscapes, forgetting that it was already resoundingly
discredited everywhere else. Actually, no government anywhere was ever serious
about implementing socialist principles in their true sense – not even in China
and the Soviet Union were these implemented with honesty. The masses remained exploited.
In fact, their condition became worse than capitalist countries where, at least,
one could get redress against exploitation – something that was impossible in
the so-called socialist countries. No wonder, the Soviet Union collapsed while
China became promptly pragmatic enough to allow economic liberalization, while
the CCP kept its stranglehold over the state apparatus intact.
In India’s case, the political
failure to respond to changing realities became manifest during the UPA Mark-2
regime, when economic policy suddenly veered towards populism. Most of the
state’s resources were deployed in creating employment that contributed almost
nothing to the economy’s capital formation. Crores were poured down the drain
in the Congress Party’s efforts to build and retain vote banks in rural areas
where various regional outfits like SP, RJD, BSP etc had eaten into its turf.
However, the alternative is no better. The Sangh Parivar may well resuscitate
its pet pseudo-patriotic and xenophobic economic shibboleths that may
eventually derail Modi’s “Gujarat Model” of development.
However, just imagine the
scenario if the UPA-2 had stuck to its earlier policy of economic
liberalization and restructuring of various institutions. Economic growth and
employment generation would have retained its tempo despite the slowdowns in
various western economies. We must remember that India’s economic prosperity
was not driven by exports but by the increasing domestic consumption. All one
had to do was continue with the policies that encouraged private enterprise,
and employment generation would have been taken care of. The resources that
should have gone into building of various infrastructures were spent on
economically imprudent projects. One might argue that the rural poor cannot be
ignored and need to be taken care of. This could have been ensured in a more practical
manner by providing skill development oriented education, which would have
turned the rural youth into productive assets for the nation. Why reduce them
to mere supplicants? The question, which needs to be asked, is – do we need
parasites or providers? The answer is self-evident.
Published in The FinancialWorld dated 20 June 2013
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