Tuesday, 28 May 2013

Two Roads For The Country

What if India had followed Masani's and Rajaji's vision rather than Nehru's?
Today is the death anniversary of two noteworthy Indians. They started off as ideological comrades but later became antagonists, each representing two opposing economic worldviews.
Their anniversaries too will be observed in contrasting ways - one with pomp and publicity, the other in obscurity. There's a certain irony in that.
Jawaharlal Nehru will be feted at various functions and the United Progressive Alliance (UPA) government will pledge itself to his ideals, never mind that the country has turned its back on his eponymous model of development, which was heavily biased towards state intervention in the economy. This shift away from socialism — half-hearted though it is — would not have pleased Nehru had he been alive, even though his name has been constantly invoked by the Congress to show continuity with his policies.
There will be no public functions to mark the 15th death anniversary of Minoo Masani, co-founder of the erstwhile Swatantra Party, even though since 1991 the country has been travelling the road he tirelessly championed for 40 years along with another political stalwart, C Rajagopalachari or Rajaji - that of a liberal, market-oriented economy. But Masani, too, would shudder to have his name linked with all that is happening today, in the name of the model he advocated.
Nehru and Masani forged a deep friendship when they were both in the Congress, strengthened by their common love for socialism and admiration for the Soviet Union. Masani was one of the founders of the Congress Socialist Party within the Indian National Congress, in the early 1930s. Soon, disillusioned by Stalinist excesses in the Soviet Union, he became one of India's foremost and forceful critics of communism.
In 1947, he articulated the idea of a mixed economy, with three sectors - a small sector of nationalised industries (which would be decided by an independent commission), a larger sector of new public enterprises in areas where what he called 'free enterprise' was unable to venture into, and a third, largest sector of free enterprises. "Such a programme of state plus free enterprise is, in fact, the only practicable programme that the government in India can possibly adopt in the coming years...it is important that it is done, not sullenly for lack of anything better, but with enthusiasm and drive," he wrote in a paper detailing the idea.
After Independence, his nuanced approach would bring him in direct conflict with Nehru and what he called the latter's zeal to foist the Soviet pattern of state capitalism. Since the only non-socialist alternative to the Congress in the 1950s was the Jan Sangh, with a strong Hindu bias, Masani teamed up with Rajaji and farmers' leader, NG Ranga, to form India's first conservative-liberal Swatantra Party in 1959. Through the party's short life and after its demise, Masani never tired of pointing out that state involvement in industry, trade and commerce would result in the neglect of its primary responsibilities of maintaining law and order and the provision of drinking water facilities, primary healthcare, primary education and physical infrastructure.
He also relentlessly pointed to the lurking dangers of the licence-permit-quota raj that Nehru and later Indira Gandhi promoted. Nehru apologists argue that his model was vilified because of the distortions that his daughter introduced in the 1970s. But Masani and Rajaji always warned that the model was susceptible to such distortion.
So when, in 1991, India took its first steps towards a freer economy, Masani should have felt vindicated. Though he was glad, he also had a sense of foreboding. The government, he noted, took the path of liberalisation out of compulsion and not conviction and he fretted that this would not be sustained. He was clearly quite prescient.
State meddling in the economy continues; in the name of helping the poor, the government continues to artificially suppress prices and distort markets rather than working seriously for a shift towards targeted subsidies; inefficient public sector undertakings continue to be cosseted; inspector raj continues to throttle small and medium enterprises. Despite what the critics of liberalisation might say, India is not a market economy in the true sense of the word.
While Masani, were he alive, would have been pained by this, what would have horrified him is the prevailing rampant corruption - the result of a pernicious cronyism that marks the relationship between government and private business. What would devastate him is that this is happening in the name of liberalisation.
Crony capitalism is not the post-1991 phenomenon that those railing against what they dub 'neo-liberal economic policies' make it out to be. Though a strong supporter of private capital, Masani took a dim view of most Indian entrepreneurs of his time who, he believed, took the easy way out by bribing ministers and bureaucrats instead of facing up to competition. Naturally, he blamed the controls-driven system for fostering this. Masani would have been the first to speak up against the shenanigans in the telecom, coal and airlines sectors.
As economic liberalisation increasingly comes under attack for fostering oligopolies and sowing the seeds of plutocracy, there are not enough voices pointing out that the mess the country is in is a direct result of the state continuing to have the power to make or mar fortunes of entrepreneurs, that the country needs more economic and governance reforms to strike at the root of corruption. Masani would have been that voice.
Minoo Masani, the country misses you.
The writer is a senior journalist and author.

1 comment:

Rinju Abraham said...

Well written.. it is rare to find people who know of Masani. You should try and connect with the Kerala Liberal Group.. it is headed by Babu Joseph, a once close aid of Masani himself... he should be able to give you insights into the man and his thinking