July 12, 2013
by Team SAISA
Ravi Shanker Kapoor
The Congress-led United Progressive Alliance (UPA) government’s rule in the last nine years will be remembered for the rampant corruption it spawned, the perversity it showed in hurting the economy, and the monumental incompetence that became the regime’s hallmark. Against this backdrop, one is tempted to pin one’s hopes on 2014 when the general elections are due (or before that, which is possible). A close look at the situation will reveal that a fundamental change in the situation is unlikely, even if the inglorious rule of the UPA ends. For, the root cause of economic slowdown and political atrophy—the resurgence of doctrinaire Leftists—is unlikely to disappear in the foreseeable future. At any rate, the disappearance, or even diminished severity of the root cause, will not happen on its own.
Resurgence of the Left
At the heart of the problems related to the economy, polity, national security, and diplomacy is the comeback of ideologically hardened Leftists since the UPA came to power in 2004. By Leftists, I refer to not just the constituents of the Left Front but also the Left-leaning intellectuals and academics. The resurgence should be viewed in the proper historical setting.
The tumultuous events of the late 1980s and the early 1990s had left the Indian communists and their fellow travelers ideologically shattered and psychologically battered. The fall of the Berlin Wall and later of the Soviet Union, unraveling of Moscow’s client states in the Eastern Bloc, China’s embrace of capitalism in all but name—these events disoriented pinkish intellectuals. They could not pose a big challenge to former Prime Minister P.V. Narasimha Rao when he opened up the economy in 1991 and did away with some of the worst features of Nehruvian socialism. Not that they did not try, but they were too demoralized and badly discredited in the public eye to check the economic reforms Rao authored.
The reforms continued unabated even after Rao demitted office in 1996. Later regimes continued with liberalization; this was despite the fact that the Communist Party of India was part of two governments during 1996-98. The Bharatiya Janata Party (BJP), which ruled for six years (1998-2004), carried forward the reforms agenda, notwithstanding its Swadeshi rhetoric.
Economic reforms brought unprecedented prosperity, and it was not confined to the rich and middle class; according to official data, the percentage of people below poverty line came down from 36 to 26 between 1993-94 and 1999-2000 (Of course, these and other figures of poverty reduction are religiously challenged by Leftwing experts, but then these experts are often wrong, though never in doubt, as we shall see).
Doomsday projections belied
All the Leftist predictions about the ill-effects of economic reforms proved to be wrong. They said that Indian companies will be crushed or eaten up by multinational corporations (MNCs); actually many domestic corporations themselves became MNCs. Professional revolutionaries said that ‘cut-throat competition’ will spell doom for the micro, small and medium enterprises (MSMEs); but the MSME sector grew very fast after liberalization; its growth rate was usually more than the index of industrial production. It was claimed that the rich would become richer and the poor, poorer; the rich did become richer but the poor also gained from all-around growth and development. The Left’s apocalyptic assertions and weird theories consistently proved to be wrong, but there was no let-up in the creation of outlandishness.
The Left’s tenacity was matched only by the complacency of Big Business and the political class. In the early 2000s, it was frequently said at business conferences and other public forums that ‘reforms have become irreversible.’ The rants of the Left were tolerated as the fulminations of outdated radicals.
Many relics of the past, like public sector undertakings (PSUs) and the Non-Aligned Movement (NAM), were viewed as dinosaurs that would slowly but surely become extinct. Administration, the law and order situation, judicial processes, police functioning, national security, etc. were expected to improve gradually. Or so the productive sections of society, the middle class, and the responsible politicians thought.
Lutyen’s Delhi as Jurassic Park
But 2004 witnessed Lutyen’s Delhi transform into Jurassic Park, with red and pink tyrannosauruses trampling economic reforms, creating mechanisms to strangulate business, devising ways to augment public (read wasteful) expenditure, weakening fight against Maoist and jihadist terror, and playing havoc with diplomacy. Owing to the 13 years of reforms, however, the economy had acquired certain resilience which not only withstood the depredations of the communists (who supported the UPA regime from outside during 2004-08) and the National Advisory Council (NAC) but grew at a fast pace for the first four years. It needs to be mentioned that the NAC, headed by UPA chairperson Sonia Gandhi, comprises professional radicals, green lobbyists, bleeding hearts, and some downright Luddites. What makes them really dangerous is the fact that they are Sonia’s handpicked advisers to shape public policy; and she is the de facto ruler of India.
Most of the time during UPA I, the communists and NAC fanatics planted landmines in the economy. Over the years, many have tripped on the landmines. The proposed food security legislation is one such landmine that, if the Bill is cleared by Parliament in its present form, would play havoc with the economy in the next few years.
But, instead of confronting the anti-business statists, many industrialists, politicians, and liberalizers have been pleading with Leftwing intellectuals to accept, or at least not oppose, economic reforms since 1991. Capitalism—or, at any rate, some aspects of it—can be beneficial for all sections of society, including workers and peasants. This is the sum and substance of the message of the Swaminathan Aiyars and the Gurcharan Dases to their “Leftist friends.” The latter, however, disdainfully rebuff such entreaties. The liberalizer proposes, the Leftist intellectual disposes.