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Millennium Post

Congress mired in mistaken belief

It has taken the prime minister eight years to admit that preference for ‘outdated ideologies’ has been stalling reforms. What Manmohan Singh left unsaid, however, is that this choice has been a regressive feature of his party’s policies ever since the reforms were introduced in 1991. Right from that period, the belief in the Congress was that the abandonment of Nehruvian socialism for the sake of market-oriented ‘pro-rich’ policies was a mistake and was responsible for its 1996 defeat.

The Congress’s return to power in 2004 made no difference to this conviction in the party. As a result, while the country believed that Manmohan Singh as prime minister would take up the task which was left unfinished as finance minister in 1996, there was no sign of what has been called the ‘big ticket’ reforms on banking, insurance, pensions funds, labour reforms, et al, which still remain on hold largely because of the Bharatiya Janata Party’s (BJP) opposition. But, the fact remains that there has been considerable resistance from within the Congress as well to these measures.

If the scene has changed with the prime minister criticising the followers of ‘outdated ideologies’, the reason is that Sonia Gandhi herself has finally come on board the reforms platform. It is no secret that till now, it was her inclination for socialism, which she evidently learnt as Indira Gandhi’s daughter-in-law, which has been the main roadblock for pro-market policies.

Given her socialistic instincts, the prime minister could neither pursue reforms whole-heartedly, nor delineate his ideological position. After all, when the Congress president was opposed to what has been called ‘neo-liberal’ policies, Manmohan Singh could hardly describe socialism as obsolete. This reluctance on his part may have also been due to the fact that influential sections of the intelligentsia, including the media, can be regarded as left-of-centre.

For instance, a major Chennai newspaper has not only voiced its opposition to the ‘Wal-mart-induced reforms’, but also editorialised that Sonia Gandhi was more ‘clued in’ to popular sentiments than the pro-American prime minister. The BJP, of course, can now be included in the socialist group despite its original image of being a party of the Hindu Right, which it also retains.

But, if its stance is intended only to make life difficult for the Congress even if it has little theoretical objections to the government’s policies, this explanation is not tenable for a host of other parties, ranging from the Samajwadi Party (SP), the BSP, the Trinamool Congress, the Biju Janata Dal and the AIADMK – all of whom are perceived to be anti-reforms.

In their case, the prime minister’s explanation that they are ‘ignorant of global realities’ is applicable. How true this assessment is can be gauged from the SP’s earlier opposition to computers and the use of English, which has become muted of late but is still a reminder of the party’s antediluvian outlook. This lack of awareness of the international scene along with the partiality for ‘outdated ideology’ can be seen in the Trinamool Congress leader, Mamata Banerjee’s opposition to FDI in the retail sector. According to her, the opposition stems from her party’s claim to be a representative of the common man, who, she believes, is ‘backdated’.

There is an element of truth behind this viewpoint because for years after independence, and for a considerable period before 1947, capitalism was seen in an unfavourable light. In films and folk literature, the bania or the trader was not to be trusted. He was suspected of selling adulterated goods and of cheating the government by not paying taxes. This poor image of the merchant was compounded by the spectre of the foreign businessman, who was seen as someone who not only robbed the ordinary people, but could even take over the country, as the East India Company did in the 17th century.

It suited the anti-Congress politicians to raise the bogey of foreign domination to derail reforms.

Even a pro-corporate sector leader like Narendra Modi peppered his recent speeches with accusations against the Manmohan Singh government of being ‘a government of, by and for foreigners’. It is worth noting that a new outfit comprising mostly of young people, Arvind Kejriwal’s Aam Aadmi Party, is socialistic. Evidently, the market remains in bad odour and the history of the demise of socialism in the Soviet Union and its transformation into ‘market socialism’ in China are ignored.

However, these parties would not have been able to sustain their ‘outdated ideologies’ if, first, there was a consensus within the Congress on reforms and, secondly, if the accomplished economists in its ranks like Manmohan Singh, P Chidambaram, Montek Singh Ahluwalia and others spent time outlining the positive features of reforms.

Even today, there is a need for pro-market ideologues to be active when there is some realisation among left-of-centre groups that growth based on private sector investment has the potential to percolate down.

Besides, there is no alternative but to turn to the private sector since the state simply does not have the money. What is more, raising the money through taxation will have a depressing effect on the economy. It is imperative for the government, therefore, to impart these lessons in elementary economics.IPA
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