IS 2013 SIMILAR TO 1991 FOR INDIA ?

 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 is indeed larger now. But this can also be taken as a barometer of its 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.

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Our natural thinking and bias in the main are not towards things like globalization, modernization market-led efficiency and growth-led uplift of the masses in poverty. We think prosperity polarizes, 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 neither believe in the trickle-down effect, nor in the fact 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 billion 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 are now a force of over 40 per cent 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 mindset 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 19th 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 czar of all the Russia. Then great Communist politicians, raised to power by the masses, Lenin, Trotsky, Stalin, Mao, even Castro. 

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 tantaliziing 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 color 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 1970s, 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. Welfare, 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 West Asia. 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 welfare 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 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 recognize 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 Sonia Gandhi, who thinks it may even deliver a return of the 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 20 more years, haughtily ignoring our pathetic rate of growth, and truly put India out of the contest.

Liberalization, 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 bloodbath 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 liberalize 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 bailout 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 per cent of the economy.

We became knowledge warriors, software surfers, IT heads, thanks to Nehru’s emphasis on the IITs and higher education, and our economy became recognized 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 bailout 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.