The Nehruvian paradigm - A sham homage

By S. Swaminathan

The Indian National Congress, the key Opposition to the ruling BJP-led NDA Government, is not, after all, jettisoning its original attachment to the globalisation-liberalisation rationale that was espoused by the Narasimha Rao Government during 1991-96.

The party seems to have emerged from cloudy forebodings about the process of economic reforms into a virtual reconciliation to the compulsions of integrating the Indian economy with the global marketplace, with all the political inhibitions and reservations appropriate for an Opposition party.

A rumination exercise

When the Congress was humbled by the electorate, at the national level in 1996, there obviously was a lot of consternation among the leaders as to why, in spite of perceptible economic progress during 1991-96, the voters had spurned the party and created a situation of political volatility which saw a hotch-potch combination called the United Democratic Front forming the Government. Some failure of objective analysis perhaps led sections of Congress leaders (particularly some youthful aspirants for the centre-stage) to believe that economic reforms had brought the Congress down in the sense that the vast millions of the poor had been cheated of their dues when liberalisation seemed to have benefited the upward - mobile middle class besides the rich. That there were various other complex social and political factors including the Hindutva mobilisation did not seem to weigh much with these leaders.

Nor the fact that the Congress Government and the party failed miserably in the process of communication with the people on the logic and the necessity for reforms in terms of opening up opportunities for people at large, seemed to matter.

A laborious exercise on economic introspection over the last five months now seems to have left the Congress with little option but to toe the line initiated in 1991 but with semantic modulations calculated to portray the party as ``a reformist with a human face'' rather than as an addict to reforms with a devil-may-care approach to the accumulated burdens of unemployment and poverty. That Mr. Narasimha Rao in the early 1990s also talked about ``the middle path'' and that his Finance Minister, Dr. Manmohan Singh, began to champion the cause of social safety nets in 1993-94 (with little to show however, in terms of budgetary allocations) cannot easily be erased from public memory.

What is new in the formula?

As the Congress now reiterates its commitment to the economic agenda of reforms (including the second generation reforms that the NDA Government has more or less messed up), a few questions seem to be pertinent on what the party would include and what it would consciously exclude, from the ambit of reforms. Larger public investments in the social sector and in the infrastructure are warranted according to the Congress. As a formulation this is on all fours with the position taken by the NDA Government as well, excepting that the Congress has no clue as to how an expanding order of public expenditure can be sustained without a reduction in subsidies or a larger mobilisation of savings through taxation or borrowing.

The Congress is in favour of stepping up public investment in agriculture, irrigation, wastelands and watershed development - areas where public spending has been severely constrained over decades not to speak of colossal hassles in implementation of projects. The party seems to be suffering from a serious dearth of ideas on how to restructure agriculture in a new milieu where the WTO (World Trade Organisation) framework will pose formidable challenges as it will create opportunities for a more visible global presence for Indian agricultural (mostly value-added) products.

The objection list

In its new economic formulation the Congress has sought to resurrect the Nehruvian vision of the public sector with little willingness to accept the realities of large redundancies, technological obsolescence and avoidable drain of public resources. While the general drift of the ``introspection document'' seems to be a rejection of disinvestment as a strategy, the Congress is strangely seen to be making an exception in the power sector where it finds a real need for competition between the public sector and the private sector.

While it is true that Dr. Singh, as Finance Minister, publicly pushed for reforms in the banking system (with the Narasimham Committee's inputs), right now the party seems unwilling to face the wrath of the bank unions over the issue of what it calls ``the denationalisation of banks''.

The predicament of the NDA Government is not too different. While it wants government equity in nationalised banks to be reduced to 33 per cent, it insists that it will not allow the banks to slip out of the government's control (meaning that disinvestment and political interference with the banks will go hand in hand).

Of course, the Congress would like to obstruct the whole process of disinvestment, for, after all, the public sector (``the commanding heights'' concept included) is a precious heritage from the Nehru era. Whether Jawaharlal Nehru himself would have taken the economic rationale of globalisation in his stride were he to be alive today, rejecting the Avadi version of socialism in the process, is but a sterile question.

What may be more to the point is to recollect that the Nehruvian paradigm of economic development was as much a product of the cold war as it was dominated by the belief that in post- Independent India, with its dismal backwardness of industrial activity and clear lack of entrepreneurial resources not to speak of the virtual absence of a capital market, the State had a pre- eminent role in shaping a modern economy. It was left to Indira Gandhi in 1971 to call attention in a sense to the aftermath of planning - pervasive poverty and the abject neglect of basic amenities.

It is indeed amusing that the Congress today is mixing up economic reforms with its own characterisation of the Nehruvian economic model as if it produced a tangible correction for poverty.

It would not be a sacrilege to admit that the Nehruvian model while it served the needs of a new nation while it groped to tackle primeval economic problems, was totally inadequate for releasing the creative energies of the millions of people. Nor would it be truthful to argue that Nehru's vision of India, in economic terms, was entirely commensurate with a burgeoning advancement of technology and world-wide trade.

To say that India's adoption of globalisation as a paradigm should be conditional upon the reversal of human deprivation is one thing but to insist that the Nehru model pointed to the same thing is to mistake veneration for judgment.

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