April 28, 2014, by Automated User

Same Difference: The Congress, the BJP and India’s development

Posted in India Votes 2014

Development appears to have captured the imagination of political commentators writing and discussing the ensuing Indian elections. We are told that these elections are about development and economic growth. It seems from the electioneering that the Bharatiya Janata Party (BJP) best represents the optimism of commentators who feel that the development agenda has remained neglected. The party claims in a popular radio jingle to have brought development to India, while accusing the Congress of being negligent on this issue. However, the extent to which the BJP draws on the legacy of the Congress needs to be appreciated. In this piece, I want to highlight the continuities between the policy-orientation of the Congress and the BJP which are often clouded by the rhetoric of difference between the two.

The Congress inaugurated the reforms. As is well-known, the reforms involved deregulation of the economy and provision of an enabling environment for private sector players. What is less well documented is the role of the federal design of the Indian polity, for which the Congress can claim considerable credit. The States could deploy this federal design to capitalize on their respective comparative advantages. As political economist Rob Jenkins has shown, India’s federal polity absorbed many of the shocks associated with the economic reforms and the development practices associated with it. India’s federal design meant that politicians from States that benefitted from the reforms were not inclined to oppose them in toto. Politicians who might have reservations about the reforms realized that their States would lose out if they remained stubborn in their opposition.

A recent survey in the Economic Times suggested that economic development in BJP- ruled States slightly outperform Congress-ruled ones. But they caution against the view that one or the other party is homogenously pro-development or anti-development. The experts cited in that study direct attention to the specificity of different States. States that performed well on developmental indicators, such as Gujarat, were ones with advantageous starting points. States with less impressive indicators, such as Rajasthan, were disadvantaged to begin with. It is historical advantage rather than party affiliation that seems to shape development outcomes. While it is true that some BJP States, such as Gujarat have impressive developmental indicators, they have, at the end of the day, benefitted from policy reforms instituted by the Congress Government. While the Congress set the rules of the game, the BJP played by these very rules, and outplayed them.  As have parties such as the Biju Janata Dal and Telugu Desam Party.

The Congress Party is often criticized for the ‘license permit raj’ it presided over during the first four decades of Independence. Jawaharlal Nehru is criticized by those favoring liberalisation for being swayed by the vision of a ‘socialist pattern of society’, due to which the Congress government embarked on a policy of import substitution. These critics allege that the government’s interventionist policy, coupled with a large public sector, stifled competition and created inefficiencies. Apparently this leashed in the supposed entrepreneurial spirit of Indians and prevented the flowering of a business culture. What is forgotten is that the Congress’ economic policy of interventionism and developing a large public sector was based on the Bombay Plan, a set of proposals published by eight leading industrialists  of the time, including Ghanshyamdas Birla, Kasturbhai Lalbhai and Jahangir Ratan Tata. The key principle of the Bombay Plan was that economic growth in India needed government intervention and regulation through the public sector. It was commonly acknowledged that the Bombay Plan directly influenced the First Five Year Plan and subsequent efforts to establish Nehru’s version of a socialist pattern of society.

Nehruvian socialism was thus a unique beast- a combination of the Brahmanic ethic of sacrifice and Big Business’ efforts at promoting capital accumulation. There was no question of it being motivated by a vision of social justice- as the untold misery wrought upon the millions of people, mostly Adivasis, displaced by the construction of the dams that Nehru sanctimoniously declared to be ‘Temples of Modern India’. By 1991, Big Business no longer needed the protection afforded by statist intervention. Consequently, the Congress Party gradually and, as Jenkins astutely observes, stealthily, reconstructed the role of the state to facilitate greater participation of the private sector in the economy. Again, none of this was motivated by any concern for the poor, and this time round the Congress did not even pretend that it was.

This history matters. The development that the BJP claims to have brought about in the States governed by it during the last decade would have been impossible without the groundwork that was already laid by the Congress. The connection between the Congress’ early protectionism and the entrepreneurialism that the BJP claims to have unleashed are intertwined. The latter would not have been possible without the former. The former set the stage for the latter. Commentators who believe that the present elections are a referendum on development would be well-advised to consider the continuities between the Congress and the BJP and the symbiotic relationship shared between the policies favored by the two parties. Voters should not expect major economic shifts should the present Congress-led dispensation be replaced by one where the BJP is at the helm of affairs.

Indrajit Roy is at the University of Oxford where he is completing a manuscript on ‘Restive Subjects: The Politics of the Poor’. His core intellectual interests lie in investigating the political sociology of economic transition with a special focus on the ‘emerging markets’ of India, Brazil and South Africa. Another recent article he has written on current Indian politics might be found here. He blogs at ‘Politically Social’.

 

 

 

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