Sunday 19 September 2021
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Liberalisation Chequered By Intermittent Socialism

Even as our inflation-adjusted GDP grew 17-fold in the first 30 years of economic liberalisation, the country saw just a five-fold growth

The liberalisation of the Indian economy under the stewardship of PV Narasimha Rao under the compulsion of the balance-of- crisis in 1991 was a path a Nehru/Indira-indoctrinated India took to never out of conviction. If not for the situation where the country was left with foreign exchange not more than worth three weeks of import, thanks to decades of government control and finally profligacy by Rajiv Gandhi and two short-term, beleaguered prime ministers, Rao was himself no free-market champion. Worse, he took as a rubber stamp a bureaucrat Manmohan Singh who had, since 1971, serving his respective socialist-populist masters. Much before Singh became the prime minister in 2004 and just stopped short of saying for the next 10 years that he was sorry for what he had done in the period 1991-96, Rao had put the brakes on liberalisation after the INC lost Andhra Pradesh to NT Rama Rao’s populist Rs-2-for-a-kilo-of-rice. However, given that Indians in the 1990s had by then been sold the idea of liberalisation, it was not difficult for Atal Bihari Vajpayee to take off from where Rao had halted. The head political executive in the first 17 months of his tenure had privatised as many PSUs as Rao had done in all his five years. After two lost years with Yashwant Sinha as the finance minister, whose bureaucratic habits died hard, Yashwant Singh, with the help of Disinvestment Minister Arun Shourie, not only showed how reforms driven by conviction look like but also turned a hitherto hostile United States into an ally. Alas, Pramod Mahajan took the sheen off that government with his injudicious hobnobbing with the Reliance group, making the Ambanis come across as cronies of the first NDA government.

In the decade that followed the surprising defeat of the Vajpayee government, the INC, supported by 60 communist MPs, just blew off the reserves with leaky welfare schemes beginning with the still-continuing MGNREGA. It is often overlooked that while UPA 2 was accused of rampant corruption and subsequent “policy paralysis”, they were mostly scandals by ministers during the first five years of the socialist cesspool that the second term of the de facto Sonia Gandhi-led government was sinking into. The UPA governments aggravated the situation by controlling the media in a manner that the hardships the parents and grandparents of the new generation had suffered under successive regimes of the Nehru-Gandhi dynasty were forgotten. The poor of yesteryears had no idea how the poverty ratio had gone down in two decades from 45.3% of the population to 21.9%. Different sections rose up like zombies, demanding dole, making it nearly impossible for a party to win elections without a promise of freebies.

How clueless about the country’s economic history the youth had become was witnessed in the formation of AAP, where a movement of middle-class boys and girls was hijacked by a bunch of television intellectuals, all swearing by ‘Indian socialism’, no comprehensive treatise of which exists in the annals of literature on economics. And the youth did not find anything amiss. Most glaringly, Narendra Modi, who became prime minister in 2014, promising to turn the whole country as prosperous as Gujarat, was badly bruised by two defeats of the in 2015 — in the hands of socialists Arvind Kejriwal in Delhi and Nitish Kumar in Bihar. Since then, it has been difficult to tell a Modi from an Indira Gandhi. While this has made the current prime minister a formidable rival for the opposition at the hustings, India is now left with no choice on the economic front. At best, Modi is now a nut-and-bolts man, making little changes in administration rather than changing colonial archaisms like the civil services and police, forget the judiciary. As and when he tries, his own supporters like the Swadeshi Jagaran Manch, Bharatiya Mazdoor Sangh and Bharatiya Kisan Sangh of the RSS cry foul and he once again refrains, sometimes sounding defensive about FDI, sometimes withdrawing a clearance to a genetically modified crop. And when the saffron communists relent, the leftist media champions unfounded causes, making poster boys out of rent-seeking rabble-rousers, as they did last year to reverse Modi’s agriculture reforms. In between, the nation saw, like the 1970s, demonstrations galore on the streets with demands of uninspiring public sector jobs. The media that gives lectures on the virtue of liberalisation ironically cheers every group that says entitlements are their right.

Any comparison with China will be misplaced, as India never truly got a Deng Xiaoping. Dumping rights is neither possible nor advisable in a democracy, but that was at the core of making Chinese goods dirt cheap. India did not even get a Mikhail Gorbachev troubled as a teenager by the sight of oppression by Joseph Stalin because, all said and done, the Congress regimes of yore were never as ruthless and gruesome. And whenever India looked like turning into a basket case, a Rao or a Vajpayee extricated it and then lost the election, unable to sustain the momentum of change. Hence, even as the country’s inflation-adjusted GDP grew 17-fold in the first 30 years of its economic liberalisation, the country saw just a five-fold growth. The snail will not turn a hare until the education of the country’s economic history reaches the masses, before which no political head will dare big-bang reforms until, in a cycle, we once again stare at a crisis.

Sirf News Editorial Boardhttps://www.sirfnews.com
Voicing the collective stand of the Sirf News media house on a given issue
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