Renewing India

The world is going through a fascinating crisis. I say fascinating because the responses to it, in many cases, are quite quaint.

The world is going through a fascinating crisis. I say fascinating because the responses to it, in many cases, are quite quaint. This is seen by many people as deserved comeuppance for those who preached liberal reform or were favourable to globalisation. Many gleefully hail the ‘Socialist’ phase in the US and the UK. Many welcome the defeat of liberal reform.

It may be useful to recall that before globalisation came sometimes in early 1990s, India was trundling along at a pathetic rate of growth. From the Hindu rate of 3.5 per cent under the old Socialist regime, it had quickened to 5.5 per cent but without reform. It was a false boom based on borrowed money. This crashed in 1991 as India went bankrupt and had to go cap-in-hand to Western donors who insisted on taking physical delivery of gold reserves.

The old Socialist regime shouted slogans about garibi hatao but did little about it. Education and health were neglected since all the savings were spent on capital-intensive industries that were inefficient but pandered to the ego of the elite leadership. India could make a nuclear device, but not provide primary education, primary health care or clean water. Socialism meant, like in the USSR, a military industrial complex that ignored the common people’s welfare.

Story continues below this ad

When liberal reform came in 1991, it was bitterly opposed by the Left and the business classes alike. Yet for the poorest people, it was a long-awaited liberation. India’s head count of poverty fell faster in the 15 years since 1991 than ever before. Now it is down in the 20s rather than twice that during the Socialist phase. Per capita income has grown faster in the last 17 years than ever before (even more than during Rama Rajya, I am sure). Since 2000, the economy has charted an explosive path and now India is known not for snake charmers and rope tricks but for efficient management and globally competitive industry.

It is necessary to preserve and enhance all this because of and despite the financial crisis. The benevolent climate in which the rapid growth took place for the last 17 years will disappear. Capital flows from abroad will be harder to attract. Export markets for services will contract. India will need to be much more competitive than it has been before. It needs not just to keep up its liberal policies but to renew them imaginatively.

What the Singur episode has shown is that the 1894 Act for acquisition of land is undemocratic. All the SEZs also need to be re-examined. The need for such special deals arises from the restrictive hiring and firing laws that prevail everywhere else. This is also why there is now a large pool of workers who have insecure jobs.

The days of Nehru-Gandhi Socialism were days of elite dominance and a deferential public. Now Indian democracy is much more vigorous at the base and more corrupt at the top. The elite itself has changed and absorbed many new, previously downtrodden groups. But those who come into politics crave executive power as a means of enrichment. They have no time for legislative work. Hence politics remains strangely distant from the people because executive power in India at the Union and the state level is untrammelled by any checks from legislatures. The only way to challenge a bad decision is to resort to direct action or go to the judiciary to get redress.

Story continues below this ad

Indian politics needs a renewal in a way that accommodates the democratic spirit of the people. Old style paternalism disguised as Socialism will not do any longer. Since legislatures will not do the work they are meant to, we need much more civil society action to look after public interest in defiance of corrupt and overbearing executive power. It is unlikely that the present political parties will change and become more aware of people’s needs. Or that they will become more democratic and open in their internal structures. For the politicians, people are just vote banks to be cajoled and bribed at election times and then to be patronised and bullied. Political parties only use the poor people to get into power and then behave exactly like all executives. If Mamata Banerjee comes to power, she will behave just like Buddhadeb. Things have to change.