In the renewed race for the Union finance minister’s job, kicked off by speculation of an impending ministerial reshuffle, a new dimension has been added by some of the Sangh Parivar ideologues. They want a finance minister who can better articulate the economic ideology of the BJP, a ‘true saffron’ swadeshi. Yashwant Sinha, they say, has not been loyal to their cause. While some critics of the ‘swadeshi’ lobbyists within the BJP accuse them of promoting specific corporate interests in the name of ‘swadeshi’, others see them as misguided ideologues out of touch with reality. Either way, their vocal protestations have increased and many fear they may be able to influence the prime minister’s choice of finance minister. The only ‘swadeshi’ name that has surfaced in the media is that of Murali Manohar Joshi. If his record in the human resources development ministry is any indication, we can be assured of an idiosyncratic economic policy with ministerial energy dissipated by constant controversy. Messing around with history books is one thing, messing up the economy is something else. Idiosyncracy in economic policy making is an expensive luxury even at the best of times for a developing country. In an emerging market economy trying to catch up with the world through uncertain times, the key qualifications of economic policy leadership are credibility, competence and predictability. Certainly not novelty and experimentation. More to the point, what exactly is the swadeshi ideologue’s complaint? What will a swadeshi finance minister do which Sinha has shied away from? Consider the 1998 manifesto of the BJP, the party’s own manifesto and not that of the NDA. In what manner has this government deviated from the BJP’s preferred economic policies? Going beyond the platitudes on offer, the manifesto had many specific policies which presumably reflected the consensual view of the party. It called for ‘calibrated globalisation’ so that Indian industry gets ‘‘a period of seven to ten years for substantial integration with the global economy’’. The actual calendar of tariff reduction and trade liberalisation may well confirm to that goal. Even though quantitative restrictions were removed earlier than what the swadeshi economists would have liked, there is no evidence of any import surge and of domestic industry being unduly hurt by excessive external competition. The real barrier to industrial growth has been the slow growth of domestic demand and the low rate of investment. To address this the BJP manifesto promised ‘‘a judicious combination of policies for infrastructure and agriculture to achieve a high trajectory of growth’’ combining public investment in infrastructure with a reduction in non-productive expenditure and disinvestment and privatisation. It promised to raise resources by reducing the size of the government, simplifying tax laws and widening the tax net. The manifesto also promised ‘‘fiscal rectitude where, more than fiscal deficit, the revenue deficit is controlled; strong and viable balance of payments; monetary policy designed to resist unrealistic fall in rupee value; moderate inflation; and credit availability to industry’’. Surely Sinha has not deviated much in theory even if in practice he has had to. He can be charged with under-performance, not ideological deviation. The one area where the BJP was highly critical of the Congress Party was the policy on foreign direct investment and the manifesto promised that a BJP government will ‘‘ensure that FDI flows into such priority areas (as infrastructure) and not in areas were the domestic industry is functioning well. The BJP government will frame policies to restrict FDI in non-priority areas. FDI will be encouraged to promote exports rather than target the domestic market. FDI is welcome in a non-predatory role in joint ventures rather than in 100 per cent subsidiaries.’’ Here it can be argued that the views of some of the other NDA constituents are very different from those of the Sangh Parivar and hence the ‘swadeshi’ economists will have to wait till they are fully in charge. Moreover, the government has done whatever it possibly could in implementing this manifesto in most areas of policy, with the exception of the policy on FDI. Here, too, the government is now taking a hard look at how well its FDI policy is being implemented. It is not as if foreign investment is flooding into India, but there are concerns about market share and the future of indigenous enterprise which can legitimately be examined and addressed. The chambers and confederations of Indian industry are doing their best to protect the interests of their membership and a ‘swadeshi’ minister is unlikely to do more than what is feasible in the extant global environment. However, beyond this it is not clear what exactly are the ideological differences between the government’s actual policy and the BJP’s preferred policy. Part of the problem in securing an answer to this question lies in our inability to find any coherent articulation of this difference by any of the ideologues of the BJP. They are mostly pamphleteers habituated to slogan- mongering with no energy for serious policy analysis based on a realistic understanding of the world. Many of them are also unable to articulate an alternative vision in a professional manner. In an age where pragmatism has come to define economic policy, ideological debates have become largely academic exercises with little meaning for actual policy. Those in charge of making policy, like the finance minister, commerce and industries minister, disinvestment minister and other economic ministers do what they come to view as being ‘necessary’ and practical. The ideological considerations are marginal. Given this reality, it is competence and credibility that must define the choice of ministers, especially the finance minister, rather than ideological orientation. On this score, however, there is much ground that Prime Minister Vajpayee can retrieve if he exercises his judgement wisely in reshuffling his council of ministers.
