For those who have been around long enough, there is an eerie resemblance between Indira Gandhi’s fortunes after her second electoral victory and the course of events in Prime Minister Modi’s second term.
Mrs Gandhi returned to power in 1971 after she converted Nehruvian socialism into the slogan of Garibi Hatao associated entirely with her. She received a post-electoral boost with the victory over Pakistan that led to the creation of Bangladesh later that year. But the strategy of nationalisation and patronage soon proved to be too great a strain on the economy. As the economy slipped the tide began to turn, and did so quite rapidly. There were soon spontaneous protests in cities across the country.
Looking for a leader, the protests brought Jayaprakash Narayan out of retirement. Indira Gandhi responded by using the legal machinery. The discourse around the time supported the idea of a progressive judiciary, short for judges who would support Gandhi’s programmes. When that did not help she finally used the existing laws to declare an internal Emergency.
Prime Minister Modi’s second term too began with a substantial electoral victory. As with Gandhi, this victory too was based on developing a personalised view of an ideology. The Hindutva vote that had been developed around the movement against the Babri Masjid, was converted into a Modi vote. Together with rhetoric against Pakistan and limited military action, this vote was taken to its peak.
Bypassing the economy
Here again the economic consequences of the political action soon began to catch up. The uncertainties of a society that seemed to be increasingly in conflict with itself, do not encourage spending. As demand dropped so did investment. The share of investment in GDP has stayed well below levels it had reached around a decade earlier. Stunted growth in investment had its impact on employment, adding to the problem created by jobless growth. The effort to bypass the economy and keep the focus on the political agenda through CAA and NRC has only served to bring together those who were hurt by the widespread economic slowdown and those who face a threat to their identity. And the present dispensation has shown almost as much willingness to use the law to target any form of dissent as was done in the 1970s.
The striking similarities in the course of regimes located at what is normally seen as the opposite ends of the ideological spectrum point to at least two larger features that continue to dominate politics and the economy in India. The first feature is easier to spot.
No matter what the ideological fashion of the day — whether it is class differences or identities — it only gathers electoral momentum when it is identified with a single individual. Removing poverty was critical to all economic thinking after Independence, but it was only after it was individualised as Gandhi’s Garibi Hatao that it gained electoral momentum. The Hindutva movement may have gained substantial support with the Ramjanmabhoomi movement, but it needed a close association with Modi to provide the electoral momentum that took the BJP past the finish line on its own.
This process of individualising a larger social identity does have its costs. It reduces what may have been a larger ideology that could be subjected to critical analysis to a mere slogan, whether it is ‘ Garibi Hatao ’ or the even more individualised, ‘Modi hai to mumkin hai ’. Without the benefit of critical evaluation there are greater chances of individual mistakes. Many of Gandhi’s decisions on the public sector, particularly their being located in politically sensitive areas, had adverse economic consequences. In the present dispensation, decisions like demonetisation would have benefited substantially from critical analysis before, rather than after, they were implemented.
The second feature that turns out to be immune to ideological difference is the inability, or unwillingness, of politicians to recognise the economic consequences of their political initiatives. Gandhi’s nationalisation-and- garibi - hatao had economic as well as political dimensions. But it was used as if it was entirely a political tool. Nationalisation was taken beyond sectors that had been justified by the prevailing ideology — heavy industries and banking — to becoming a tool to help out failed industrialists.
In the current phase the economic consequences of political actions are, if anything, greater. The increased role of the financial sector in the current economy makes it more sensitive to market sentiment. And political uncertainty has a direct impact on this sentiment. The increased role of foreign investors also makes the economy sensitive to international perceptions of domestic uncertainties.
The belief that economic policy can be carried out independent of political practices may remain deeply entrenched in Indian politics, but the similar experiences of Gandhi and Modi tell us that this belief comes with a political price.
The writer is a professor at the School of Social Science, National Institute of Advanced Studies, Bengaluru