Two parties, one vision

Print edition : February 22, 2013

At Komatipalli in Vizianagaram district of Andhra Pradesh, workers employed under the MGNREGS return after desilting a pond. The UPA’s first term, when it relied on outside support from the Left, was a mix of neoliberal reform and more radical programmes such as the MGNREGS. Photo: K.R. Deepak

Commerce and Industry Minister Anand Sharma at a meeting on FDI policy in New Delhi on July 13, 2011. Photo: Shanker Chakravarty

A protest by Left party activists in front of the Bharti Walmart Best Price Modern wholesale store in Vijayawada. Photo: V. RAJU

BJP leaders M. Venkaiah Naidu and (right) Bandaru Dattatreya during a protest against FDI in retail. Photo: G. Krishnaswamy

The difference between the Congress and the BJP is getting blurred on the matter of economic policy. Will Rahul Gandhi give the Congress a new distinction?

AS the Congress begins a process of transition in which Rahul Gandhi is likely to take the reins of the party both within and outside government, a question that is bound to be raised is where he will take the organisation. In particular, would the stand of the Congress on issues of economic importance be identifiably different from that of its principal opponent, the Bharatiya Janata Party (BJP)? Until the late 1960s, the agenda of the then left-of-centre and nationalist Congress was different from that of the Right, from which the BJP emerged. Over time, however, that distinction has blurred, with the practice of the Congress even in the social and political arena proving that it was reactively or proactively adopting positions similar to those of the BJP. That tendency towards partial convergence appears to be the strongest when it comes to economic policy and the future development trajectory of the country.

This convergence is not the result of the Congress embracing a well-defined economic programme advocated by the BJP. In fact, until the 1980s, it was the Congress that had a well-defined programmes, even if its actions on more than one occasion diverged from some of the fundamentals elaborated in that programme. On the other hand, the BJP’s economic programme was largely subordinated to the needs of its communal agenda. On occasions there was an anti-foreigner tone in its statements. It was only because some of its spokespersons who were ideologically with the Rashtriya Swayamsewak Sangh (RSS) sought to embellish that agenda with a “nationalist” Hindutva tinge.

The ambivalence of the BJP on economic issues can be traced to its original predecessor the Jana Sangh. Making an assessment of the Jana Sangh’s economic ideology, historian Bipan Chandra said: “The Jana Sangh, as a communal party, could not be defined by its economic and political policies, since it could change them with how the wind blows, without hesitation. It did, of course, have an economic programme, foreign policy, etc, but they were not of much relevance to its politics apart from serving its demagogic purposes. For example, it was initially opposed to the Nehruvian economic policies and quite pro-private enterprise. But, later, it adopted quite a radical economic programme befitting a petit bourgeoisie-based “national-socialist” type party. It then championed a mixed economy based on planning and public sector, the latter controlling the commanding heights of the economy. It also supported zamindari abolition, land ceilings and land to the tiller... For the Jana Sangh, all its economic and political positions were merely formal. The issues which really mattered and on which the party and its members concentrated and exerted themselves were very different, namely communal questions.”

Along the path of neoliberalism

The tendency to go with the wind was most obvious when the BJP came to power in 1998 and then in 1999 at the head of the National Democratic Alliance (NDA) government largely on an aggressive Hindutva agenda. Rather than reverse the programme of neoliberal reform initiated originally by the Congress under P.V. Narasimha Rao in 1991, the party chose to carry forward that agenda and took credit for heralding a regime that delivered double-digit gross domestic product (GDP) growth within a market-friendly framework. That initiated a trend in which neoliberalism remained the dominant ideology whether it was the Congress (now at the head of the United Progressive Alliance) or the NDA that was in power. Though the subsequent return to power of the Congress was based on a radical election campaign that exploited the disillusionment with the BJP’s “India Shining” slogan, it continued with the neoliberal reform programme. Economics, advocates of neoliberal policies argued, had been freed from the uncertainties of domestic politics.

The surprise elevation of Manmohan Singh to prime ministership in 2004 only consolidated this tendency. During the two terms in which he had effective control over the government, his consistent effort has been to implement a wide-ranging neoliberal agenda—to take forward as it were the policy he, in a different avatar, had helped launch in 1991. The issue was not whether a rapid neoliberal transition was required, but how in a world in which the Congress had no option but to govern as the leader of a coalition, that agenda could be pushed through without upsetting diverse allies. The UPA’s first term, when it relied on outside support from the Left, was a mix of neoliberal reform and more radical programmes such as the Mahatma Gandhi National Rural Employment Guarantee Scheme (MNREGS) . But later during that tenure, and especially in its second tenure, the emphasis on high growth driven, according to the government, by “reform” characterised the UPA as well. The Prime Minister has been able to have his way on issues ranging from foreign investment in insurance and multi-brand retail to cash transfers as substitutes for subsidies. Not surprisingly, the constant refrain has been that it is not for lack of willingness but because of the absence of political space within a coalition that the Manmohan Singh government has had to implement its neoliberal reform programme at a pace slower than what domestic and international business, besides developed country governments, would have liked.

Breakdown of the party apparatus

Yet, the fact that the UPA government has been able to implement its agenda, however slow the pace, is indeed remarkable. In the transition from Independence through bank nationalisation to the neoliberal 1990s, one feature of the Congress, noted by political analysts, was the breakdown of the party apparatus and the loss of its post-Independence character as a mass organisation with strong regional and local leaders. In the highly centralised structure that took its place, political success depended on the use of populist policies, radical rhetoric, charisma and/or the Nehru-Gandhi title to garner voter support. This makes a neoliberal agenda politically inconvenient inasmuch as it militates against populism in practice.

Moreover, the two terms of the UPA have seen the neoliberal agenda being discredited in most parts of the world. In Latin America parties have come to power on the basis of campaigns and programmes explicitly criticising that agenda, and registered progress with a more radical alternative. The crisis of 2008 has made clear the dangers of a liberalised and poorly regulated financial sector. The unresolved crisis in Europe is questioning the fundamentals of the fiscal reform programme favoured (though not fully implemented) by the UPA. But the government has not been willing to learn.

What then explains the political success of the Congress as reflected in its ability to win two terms at the head of a coalition? To an extent, a division of labour between the Prime Minister pursuing a neoliberal agenda and a Congress president, in the person of Sonia Gandhi, spewing quasi-radical rhetoric helps. This did play a role in the 2009 elections, though the fact that the Prime Minister was forced to announce and begin to implement schemes such as the MNREGS was also crucial.

BJP’S ambivalence

The Congress was also helped by the fact that the main opposition parties, besides being disunited and in some cases in disarray, were either wedded to neoliberalism or were not against it ideologically speaking. This is particularly true of the principal party in the national opposition, the BJP. While often making the case that it was against allowing competition from foreign multinationals to undermine Indian firms, the BJP has adopted a more ambivalent position on liberalisation. Its manifesto for the 2009 elections called for “full liberalisation and calibrated globalisation” arguing the following: “The government and Indian industry need to evolve a consensus on the time span required to enable our industries to adjust to the exacting demands of international competition. It means rapid, large-scale internal liberalisation, but calibrated globalisation so that the Indian industry gets a period of seven to 10 years for substantial integration with the global economy. On the basis of this consensus, the government and the industry should work out a strategy to create an atmosphere of international acceptability and manage external relations, particularly with the WTO [World Trade Organisation].”

But even on external liberalisation, the BJP has not been wanting. Consider for example its views on the contentious issue of financial sector reforms. In its 2004 manifesto titled Agenda for Good Governance, Development and Peace the NDA promised that “All currently proposed financial sector reforms in banking, insurance, foreign investment, and capital markets will be completed within the next six months....To achieve this, greater competition will be created by extending the reach of PSU banks and expanding the activities of private banks....The reach of insurance will be considerably enhanced in the next five years.... FDI limit in insurance will be revisited to further widen India's insurance sector, and to strengthen its global linkages.”

However, this growing similarity with the Congress does not worry the BJP, because it is its Hindutva agenda that makes it a party with a difference. But that is not true of the Congress, which increasingly has only its Gandhi family leadership to render it distinctive, since even its nationalist origin in the freedom movement is seen as an uncomfortable fact of history. Despite the handicap stemming from this growing similarity on economic policy, it appears that the economic policy vision of the Congress is unlikely to change. In his “acceptance” speech on being elevated to the position of party vice-president, Rahul Gandhi not only declared that Manmohan Singh had spearheaded a revolution in 1991 that changed the country for ever by unleashing “the voice of thousands in the field of entrepreneurship”, but compared that with other “revolutions” the Congress was responsible for, such as the Green Revolution, bank nationalisation and Independence itself. By treating the pro-business programme of liberalisation and neoliberal reforms as being on a par with anti-big business and radical programme such as bank nationalisation, or not being in ideological conflict with the economic agenda that was implicit in and flowed from the freedom movement, Rahul Gandhi was confirming an unflinching faith in neoliberalism. Bank nationalisation, the Foreign Exchange Regulation Act and the Monopolies and Restrictive Trade Practices Act are seen by the Congress as appropriate for the late 1960s and early 1970s, but not for today’s India.

The fallout of this is an emphasis on the presumed desires and demand of an ostensibly homogenous “Young India” and on subjects that divert attention from more divisive economic issues. A typical example is the importance of “connectivity” in a “nation on the move”. The BJP, in its manifesto, had spoken of the importance of four kinds of connectivity needed to bridge India’s urban-rural divide: (a) physical connectivity, which includes good roads and power supply; (b) digital connectivity, which includes modern telecom and IT services; (c) knowledge connectivity, which includes good schools and vocational training centres; and (d) market connectivity, which includes good market infrastructure.

What does Rahul Gandhi have to say? He says he is optimistic that the Congress can usher in another revolution in the country because it has already put the building blocks in place, thanks to the Congress president, the Prime Minister and the Congress. “Let me tell you what these building blocks are,” he said, and went on to elaborate: “India is more connected today than it has ever been, we have the networks of roads, information, communication, people and media for new ideas to emerge, for them to develop and take flight. It is no longer possible to limit an idea whose time has come.”

The difference is getting increasingly blurred. Unfortunately, given the increasingly fragmented support base in India’s competitive politics, this similarity can only hurt the Congress. As of now, the party seems convinced that there is no need to rethink its economic vision.

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