Opinion A new aam aadmi

Many BJP leaders and Lohiaites like Nitish Kumar and Sharad Yadav seem convinced that it will destroy the local economy. However,there are sections of the Akali Dal which say that FDI in retail will help farmers. Within the Congress,some leaders,especially from Kerala,have doubts about the economic and social outcome of FDI in retail.

Prime Minister Manmohan Singh,therefore,was very emphatic in his speech that people must not be misled by those who are spreading confusion about the real impact of such reforms. “Please do not be misled by those who want to confuse you by spreading fear and false information. The same tactics were adopted in 1991. They did not succeed then. They will not succeed now. I have full faith in the wisdom of the people of India,” he said.

This invocation of 1991,several times in his national address,was very instructive. Ironically,just before the PM’s speech was to begin,Doordarshan showed a longish clip projecting the economic and developmental reforms implemented by all the prime ministers,starting from Jawaharlal Nehru and ending with Rajiv Gandhi. There was no mention of the Narasimha Rao-Manmohan Singh combine’s big economic liberalisation effort of 1991. Sometimes,one does get the feeling that the Congress too lacks a certain clarity about the profound impact of its own economic liberalisation programme on Indian society over the past 20 years. So the idea of economic reforms,aimed at releasing India’s entrepreneurial energies to actively engage with the globalisation process,still seems to be somewhat contentious within the political class.

It is interesting how some of the BJP leaders and the Lohia socialists tend to fall back on appealing to what the well-known historian,Partha Chatterjee,describes as the postcolonial “subaltern rebel”. The subaltern rebel is a general reference to the protesting peasant whose anxieties multiplied during colonial rule,and the postcolonial developmental state did not greatly succeed in reducing these anxieties. Subaltern studies (bottom-up view of history) held,especially after the Emergency (1975),that the political order in India lacked foundation in popular consent. Several insurgent movements in Punjab,Assam etc were cited as proof by these scholars.

However,Partha Chatterjee,a foremost subaltern scholar,says something changed after 1991,when economic liberalisation came. In a recent address at Princeton University,he argued that the economic liberalisation of the 1990s did not have to be imposed by authoritarian means. “Something had clearly changed in Indian politics. Greater and greater sections of the people were developing a stake in the governmental regime and becoming aware of the instruments of electoral democracy. The arms of the administration were reaching deeper and wider into domains of everyday life hitherto untouched by the government. At the same time,corporate capital was gaining unprecedented legitimacy within urban civil society,displacing the status once enjoyed by the postcolonial developmental state”,argues Chatterjee.

If one simply decodes what Chatterjee is saying,the economic liberalisation of the 1990s has indeed created a new politics,replacing the old “subaltern rebel” with possibly a new one whose aspirations are different. This needs to be understood by our political class. So those who rail against globalisation and invoke fears of a latter day “East India Company” coming back in the guise of foreign retailers are barking up the wrong tree.

As Chatterjee rightly points out,the new,post-reforms developmental state has reached out to a much wider section of rural populations with welfare schemes such as MNREGA. Of course,delivery efficiency remains inadequate. About seven to eight states are now distributing foodgrains to over 75 per cent of the population,virtually free of cost. All this has become possible only because the Central government’s revenues have grown substantially,due to higher tax collections triggered by the national income or the GDP having increased over five times since 1992. Congress MP and ardent proponent of higher social welfare spending,Mani Shankar Aiyer,often suggests in TV debates that the government needs to rethink how it should deliver the massive increase in the funding of centrally sponsored welfare schemes — from some Rs 7,600 crore in 1994 to Rs 1,90,000 crore in 2011. That is more than a 25-fold increase in 16 years. In the first place,such a massive increase in funding for centrally sponsored welfare schemes has become possible only because of the dynamic way in which the economic structures were altered after the 1991 reforms. To not recognise this would be less than honest.

Of course,the rightful criticism of the prime minister would be that after unleashing such profound changes in the economic system,which yielded massive dividends,he did not do enough to put in place transparent regulatory systems to ensure the continued credibility of subsequent reforms. This criticism was levelled against the prime minister some months ago by his own honorary economic advisor Raghuram Rajan,now appointed chief economic advisor in the finance ministry,who bluntly told an audience in the prime minister’s presence that the lack of transparent mechanisms for orderly and equitable exploitation of critical and scarce natural resources had resulted in the loss of credibility in implementing the second phase of reforms that might have ensured continued high growth. Manmohan Singh may even admit to this charge,if not publicly.

The Congress may be defeated in the 2014 elections. But it would be a mistake to read that as a vote against economic reforms. The new “subaltern rebel” wants more dynamic change in economic structures that provides greater opportunity to the people at large. He will brook neither status quo nor some return to the atavistic past.

The writer is managing editor,‘The Financial Express’

mk.venu@expressindia.com