India everywhere
India’s promotional slogan, Davos, 2006
When you talk of 9.2 per cent growth rate, it becomes a statistical abstraction: 0.2 per cent of our people are growing at 9.2 per cent per annum. But there is a very large number whose growth rate is down to 0.2 per cent.
Mani Shankar Aiyar
The ideology of Hindutva and the economics of liberalization are not only reconcilable but complementary.
Aijaz Ahmad
India is becoming increasingly Hindu as it globalizes. But what do we mean by globalization? Why is it that whenever any country opens up to global trade these days, it invariably ends up adopting a package of neo-liberal economic policies? What is ‘neo-liberalism’ anyway?
This chapter will first explain, in layperson’s terms, what buzzwords like ‘globalization’ and ‘neoliberalism’ mean. It will then tell the story of how India came to embrace the gospel of free markets and global trade and how it is setting the stage for the growth of Hinduism.
One note of caution is in order: the economic story told in this chapter is only meant to orient the reader to the rest of the book, which is less about Indian economics and more about politicization of Hinduism, and Hinduization of politics. Those looking for a more fine-grained analysis of economic facts and figures may want to consult the many excellent texts on these matters written by professional economists mentioned in the bibliographic essay that appears at the end of this book.
We live in a globalized world—who amongst us has not heard this statement repeatedly, endlessly, and mindlessly? But for all the monotonous repetitiveness, this statement is not a mere mantra. On the contrary, the technological infrastructure and the economic logic of globalization are beginning to touch the lives of a growing number of ordinary people in very real ways. The following two examples—the first recently reported by The New York Times and the second narrated by Gurcharan Das, India’s leading cheerleader for liberalization —are quite revealing.
G.P. Sawant is an elderly man, a professional letter-writer who is losing his livelihood to cellphones. All his life, he earned a living sitting outside Mumbai’s main post office, writing letters for his illiterate clients for a fee. But with easy access to cellphones, his services are no longer in much demand. And yet, the technological revolution that has made him jobless has also propelled his family into the ranks of the middle class: three of his four children are working in India’s booming information technology sector. When The New York Times talked to him in December 2007, one of his daughters was on assignment in New Jersey for Infosys, India’s leading software company. When the Times journalist graciously offered to carry a letter from the father in Mumbai to his daughter in New Jersey, Mr Sawant, the professional letter-writer, was puzzled: ‘Why would I send her a letter? I’ll just call her on the phone,’ he said.
Raju, a teenager in Pondicherry, works in a restaurant in his summer break to save money to go to ‘computer classes’. He tells Gurcharan Das, the author of India Unbound, that he has seen on TV ‘this man, Bilgay [sic] who runs a software company and he is the richest man in the world’. Raju wants to be Bill Gates.
It is true that for each one of these upbeat stories, one can find many more stories of terrible deprivation and wasted lives. The much celebrated IT sector is tiny compared to the size of the workforce, elite led and not open to the vast majority who can’t speak American-accented English. One cannot therefore get carried away, as some market enthusiasts tend to.
And yet, one cannot deny that something new is afoot. New possibilities are beginning to take hold of people’s imagination: the mental horizons of ordinary working people in India now include ‘Bilgay’, ‘New Jersey’, and other distant people and lands. What is more, for the first time in human history, it has become technologically feasible for ordinary people, using everyday, household gadgets, to communicate across oceans almost as easily as it is to talk to their neighbour across the street. Even those who lack the resources and the opportunities are becoming aware of the possibilities.
So how do we define globalization that is sensitive to both its possibilities and the pitfalls? Anthony Giddens, the guru of the New Labour in the UK, described it best in his acclaimed book, The Consequences of Modernity:
Globalization can thus be defined as the intensification of worldwide social relations which link distant localities in such a way that local happenings are shaped by events occurring many miles away and vice versa.
The same idea is also expressed eloquently by Ulrich Beck, one of globalization’s staunchest critics:
Globality means that from now on, nothing which happens on our planet is only a limited local event; all inventions, victories, and catastrophes affect the whole world, and we must reorient and reorganize our lives and actions, our organizations, and institutions along a local–global axis.
Critics and advocates can—and do—disagree over how best to regulate this intensification of local–global connections. But no one denies that the condition of globality, as Giddens and Beck call it, is real. Local events—the ups and downs of stock markets, changes in climate, the spread of Avian flu, for example—are becoming ever more intertwined with what happens many miles away in distant lands. The world is indeed getting smaller. But this is not all: more and more people are realizing that the world is getting smaller—and organizing their lives in light of this realization. As the awareness of globality begins to influence the decisions people make about their careers and businesses, it begins to act as a material force in society.
This small-ing of the world has been described as space–time compression by David Harvey (1990) in his well-known work The Condition of Postmodernity. Harvey and other scholars believe that this compression of space and time is what lies behind the change from the old-fashioned, assembly-line industrial production to flexible production in which the different stages of production—research and development, manufacture, financing, marketing, customer services, and the final consumption—are spread all over the world in search of higher profits or less regulation. The production process is broken apart into pieces, scattered to practically any corner of the globe, and coordinated through the new technologies of communication and transportation.
Globalization can be understood as the sum total of processes that have brought about this space—time compression to the point when, at least in principle, anyone, from any place on earth, can instantaneously communicate with anyone, anywhere on this planet. Globalization is not new: it began the day our human ancestors left Africa and spread to all the continents some 120,000 years ago. But the creation of trans-planetary communication networks in the last thirty years or so is something radically new. Never before in human history have people been able to engage with each other, in real time, wherever on the habitable parts of planet earth they may be. For the first time in human history, another dimension of space—‘super-territorial space’, or space that is not linked to any specific physical territory on the map—has become widely available for carrying out all kind of activities, from buying and selling of goods to exchanging cultural and political ideas. Because the super-territorial space exists only in the communication networks, territorial boundaries provide no particular impediment to commerce carried out in this dimension.
The Internet is obviously the best example of this new dimension of globalization. But the Internet was made possible by quantum leaps in other technologies in the later half of the 20th century, including telecommunication satellites, fibre optics and telephony. We are only now beginning to get used to some of the social-cultural manifestations of these new technologies: the global media, electronic banking, and global commerce are only some of the examples.
One can rhapsodize all one wants about the fantastic possibilities of this interconnected world. But the condition of globality is a product—and a faithful servant—of a particularly ruthless, dog-eat-dog variety of global capitalism.
At one level, the space–time compression is an unadulterated public good: news and views cross national boundaries at the speed of light and enrich public debate everywhere. But it is the owners and the managers of global capital who are benefiting the most out of globalization. It is the giant transnational corporations that are using the new technologies to scrounge the globe for cheap labour, tax breaks, and lax environmental laws. New technologies have given big businesses the physical ability to break down the production process into smaller and smaller units and move them to any corner of the world that can offer them a better deal. The threat of offshoring jobs to cheaper and more docile workers serves as a threat to discipline workers, especially in relatively high-wage countries.
Globalization, in other words, is helping capitalism to become hyper-capitalism—that is, more global, more entrenched, more exploitative, and more unjust than ever before. According to Jan Aart Scholte, from whom the concept of hyper-capitalism is taken, globalization has not only increased the profitability of older, well-established industries (such as textiles, garments, consumer electronics), but has brought new spheres of social life (care capital through maid trade, medical tourism, surrogate motherhood), new natural resources (genetic information, biotechnology), and new services (information, communication) under the sway of the capitalist logic of profit and loss. Aided by globalization, then, more and more aspects of how we live have acquired a capitalist logic.
In what can only be called a great ideological sleight of hand, the phenomena of globalization and hyper-capitalism are treated as if they are some fundamental laws of nature which must be obeyed, at whatever cost to the social fabric. Everywhere, one hears the assertion that it is ‘globalization’ that is forcing the public sector to sell off taxpayer-funded assets to private businesses, and that it is ‘globalization’ that is forcing factories to be shut down at one place only to reopen at a location where wages are low and working conditions poor. Everyone, from democratically elected representatives of nation-states to powerful business interests, claims that they have no choice because there is simply no alternative to globalization.
This worship at the altar of globalization hides the reality of neo-liberal ideology. The fact is that contemporary global hyper-capitalism has been made possible by a drastic restructuring of nation-states from their role as promoters of social welfare to enablers of markets. This transformation did not happen as the natural result of space–time compression made possible by new communication technologies. Rather, it is a thoroughly political project involving powerful transnational institutions like the World Bank, the International Monetary Fund, the World Trade Organization, multinational corporations, and the national elites of different countries. What unites them is their shared faith in neo-liberal economics.
What is neo-liberalism and what does it have to do with globalization? The two are quite often merged, but they are conceptually distinct and can exist without each other. (That is to say that another kind of globalization that is not based upon neo-liberal economics is possible.)
The word neo-liberal is an abbreviation of ‘neoclassical liberalism’, a tradition which draws on several centuries of modern economic thought dating back to the writings of John Locke (1632–1704), Adam Smith (1723–90), and David Ricardo (1772–1823). Neo-liberalism builds upon the laissez-faire (French for ‘let people do as they choose’) tenets of classical liberalism which promises that unconstrained market forces will ‘naturally’ bring prosperity and peace to society. Part of the classical liberal vision of unconstrained markets included lifting the national barriers to trade, which they believed interfered with efficient allocation of resources. Neo-liberals apply this eighteenth century thinking, which made sense when relatively small owner-managed enterprises, workers, and consumers were located in the same communities, to the vastly different twenty-first century hyper-capitalism when all local links between ownership, production, and consumption have been broken and reconstituted at a super-territorial level all across the globe.
Economic liberalism went into eclipse for a brief period of about forty years, from the 1930s to the 1970s. This was the period when Western economies, battered by the Great Depression, were open to trying out the ideas of John Maynard Keyenes (1883–1946) who recommended that governments ‘prime the economic pump’ by spending on public goods and giving direct support to the unemployed. In the US, the New Deal policies of Franklin D. Roosevelt were directly influenced by Keynes. Outside the Communist Bloc, Keyensian economics was the major inspiration for the welfarist economic policies in Britain, Sweden, Canada, and Australia.
By the 1970s, however, the state welfarist policies got bogged down with bureaucratic excesses and were exhausted of creative ideas. That is when economic liberalism came roaring back. Ideas of a new generation of free market economists, exemplified by Friedrich von Hayek (1899–1992) and Milton Friedman (1912–2006), came to dominate the economic mindset of politicians and policymakers. These revived free market doctrines were embraced by Margaret Thatcher in the UK and Ronald Reagan, followed by all other presidents, Republican and Democrats alike, in the US. Neo-liberalism soon became the dominant ideology (often referred to as the ‘Washington Consensus’) of global economic institutions like the International Monetary Fund and the World Bank which have shown a missionary zeal in spreading the gospel of markets to developing countries. All four of the fast growing economies of the so-called BRIC quartet—Brazil, Russia, India, and China—have embraced neo-liberal economic policies prescribed by global financial institutions.
What are these policy prescriptions? The core of neoliberalism, like that of classical liberalism, is the belief that unconstrained market forces (‘the invisible hand’) will bring prosperity, democracy, and peace to all people, in all societies. The underlying principle is that the markets should lead, and societies should follow, without governments, labour unions, business cartels, or any other interest group trying to tinker with the imperative of making money. The rather devious genius of neo-liberalism is to wed this economic logic to core democratic ideals which people everywhere aspire for —the ideals of freedom from unchecked state power and individual freedoms of thought and speech. This market view of freedom ignores other equally valid aspirations for equal opportunity, justice, and fraternity which are often thwarted by the logic of profit making. It simultaneously celebrates individual freedom, and trivializes it by treating individual persons merely as economic agents who are only motivated by the pursuit of material gain.
What are the practical consequences of neo-liberalism, especially regarding globalization? Neo-liberalism argues for a borderless economy. It argues that the territorial borders of nation-states should not act as barriers against the free flow of goods, services, and capital investments. Even though import of cheaper goods and services could wipe out the local producers (as in the case of cheap corn imports from the US into Mexico, or cheaper IT and BPO services from India to the US), national economies are advised to allow these imports without any protective taxes because in the long run, so the thinking goes, free trade will ‘weed out’ inefficiencies and make the overall world economy more efficient. While businesses rake in the profits that come with such trade liberalization, the social costs of this ‘weeding out’ are passed on to workers and communities. In this scenario, democratically elected governments become the handmaidens of global capital: it becomes a part of their job description to work hard to remove tax barriers to imports and to facilitate exports so that hyper-capitalism can thrive.
This prescription for deregulation and tax cuts applyies not only to foreign trade but domestic as well. Because markets are seen as the natural guarantors of prosperity and freedom, governments—even those that are democratically elected—are seen as a necessary nuisance at best. By this logic, good governments are those that shrink themselves by contracting out taxpayers’ supported public institutions to private businesses and other non-governmental organizations, including the so-called faith-based organizations.
While privatization, disinvestment, and deregulation are the pillars of neo-liberalism, the state is not made entirely irrelevant. Radical conservatives like Grover Norquist may dream of cutting the government ‘to the size where we can drown it in the bathtub’, but neo-liberalism is not against government per se. After all, ardent neo-conservatives in the US have no problems with the massive subsidies defence and agricultural sectors get, nor have they been particularly exercised about the many wars their government continues to wage which take an enormous bite out of public finances. What the neo-liberals want, to use Aijaz Ahmad’s pithy phrase, is ‘a state that is weak in relation to labour but strong on behalf of capital’.
The state’s topmost priority, under the regime of neoliberal globalization, is to facilitate the smooth running of the markets. In order for governments to become enablers of markets, they come to embrace the interests of the markets as the interests of the citizens and the nation itself. In the neoliberal vision, national economy should be run as a business and the focus should be on improving the bottom line. This managerial model of democracy has found many admirers in India. Chandrababu Naidu, the Andhra Pradesh chief minister who wanted to turn Hyderabad into Cyberabad, and Narendra Modi, the chief minister of Gujarat accused of engineering the massacres of 2002, both like to call themselves CEOs of their states. The actual record of these ‘CEOs’ has not been good for the poor. Chandrababu Naidu’s regime aided by the World Bank, for example, slashed as ‘wasteful’ public investment in agriculture from 8.5 per cent in 1980s to 1.4 per cent in 2001 and agricultural output fell by nearly 17 per cent. The falling public investment, growing commercialization of agriculture, and indebtedness resulted in 16,770 farmers committing suicide in 1997–2005, the time period when neo-liberalism was the reigning ideology of the state government. The state also led the country in distress sale of kidneys, mostly by indebted farmers.
What is more, neo-liberalism changes the texture of democracy. If the government is to become more like a for-profit corporation, citizens become more like consumers. Their relationship with the representatives of the state changes from that of citizens to that of clients or consumers of government services. As consumers, they can demand better and more efficient delivery of services, but they cannot have much of a say in what services should take priority. The new buzzwords of neo-liberal governance are ‘empowerment’ through ‘public–private partnership’ to ‘solve problems’ and to make ‘better choices’. This model of ‘consumer-citizen’ is what the World Bank, the International Monetary Fund, and other crusaders for globalization are promoting around the world. As in the marketplace where the better heeled customers get better services, so in the neo-liberal public sphere the better off and more educated ‘customers-citizens’ manage to get more choices, while bypassing the poor whose options actually shrink because they lack the cultural capital to be included in many middle-class neighbourhood associations and other civil society organizations. Recent evidence gathered by John Harriss shows that in India, participation in civil society institutions is heavily skewed towards those with higher incomes and higher levels of education.
To sum up this section, neo-liberalism changes the texture of the state and civil society: it brings them both under the sway of hyper-capitalism. It assumes that accumulation of private profit is the highest social good that governments ought to promote and that the benefits of the markets will trickle down to all people. Having clarified what the current wave of economic ‘reforms’ means, it is time to see their evolution in India.
How did India move from its days of Nehruvian socialism to where it is today? The year 1991 is seen by many as the watershed year in India’s economic fortunes. That is the year when Rajiv Gandhi, Indira Gandhi’s son and one-term prime minister (1984–89), was assassinated by a suicide bomber. That is also the year when the Congress-led government took the first steps to open up the Indian economy. Since then, the country has followed the neo-liberal mantra of the four Ds–‘deflate, devalue, denationalize, and deregulate’.
Independent India’s economic history can be divided up into three periods: the period of founding, from Independence in 1947 to the Emergency in 1975; the period of experimentation, from the election of the Janata Party government in 1977 to the assassination of Rajiv Gandhi and the beginning of economic reforms in 1991; and the period of liberalization, from 1992 onwards up to the present.
The first period (1947–75) was the period dominated by Jawaharlal Nehru’s ideal of a planned economy in which the public sector was entrusted with the task of making India economically self-reliant in industry as well as in agriculture, while ensuring equitable growth and welfare of all segments of society. The three major areas which Indian planners focused on were: building industrial infrastructure so as not to be reliant upon imports; creating institutions of higher education which could produce the scientific and technical workforce needed for the economic take-off; and bringing about land reforms that would redistribute land to sharecroppers and landless agricultural workers. Often characterized as ‘socialist’, Nehruvian policies were a far cry from the top-down socialism of the Soviet Union and China. The softer, Fabian socialism of Nehru was not meant to destroy capitalism but rather to enable its take-off while trying to bring about a modicum of welfare and justice.
Regardless of what the critics say in hindsight, Nehru’s industrial policy was not imposed on a reluctant capitalist class against their wishes or interests, nor was it meant to squelch private enterprise. On the contrary, it had the full support of the dominant coalition of India’s major industrial houses, big farmers, professionals, civil servants, and other ‘white-collar’ workers: they understood that only the state had the wherewithal to create the required infrastructure for the economy to take off. Given the enormity of the problems confronting it, the Indian economy grew only at a relatively low rate of 3.5 per cent in this period. But by the end of the second and third Five-Year Plans (1956–61 and 1961–66), the import substitution model had succeeded in laying the essential foundations of India’s industrial structure.
Since it has become fashionable to heap scorn on Nehruvian socialists and advocates of planned economy, it is important to acknowledge their achievements, which were many. To list just some of them: by the early 1970s, India had achieved near-total self-sufficiency in the standard capital goods required by domestic industry; India produced its own machine tools, chemical equipment, mechanical machinery, heavy and other electrical equipment, basic metals, and alloys. It had its own steel and power plants while developing its all-important railway network, the most extensive in the world. These achievements laid the groundwork for all that was to come later.
Throughout this period, from India’s Independence to his death in 1964, Nehru, India’s first prime minister, remained at the helm. After the short-lived government of Lal Bahadur Shastri, Nehru’s daughter Indira Gandhi became the prime minister twice, first from 1966 until 1977 and then again, after the Emergency, from 1980 until her assassination in 1984.
The first (i.e., pre-Emergency) administration of Indira Gandhi is remembered largely for her left-of-centre Ten-Point Programme which promised to eliminate poverty (garibi hatao). The programme enforced wide-ranging policy changes, including nationalization of banks and insurance companies, ceiling on urban property, restrictions on monopolies, public distribution of foodgrains, land reform, improvements in productivity of agriculture (the Green Revolution), and other pro-poor but top-heavy policies. The justification for imposing greater state controls over economic enterprises was to ensure that banks and other financial institutions made resources available to small urban and rural enterprises.
These programmes were hugely popular among the poor, but Indira Gandhi faced opposition from within her own party. Even though well intentioned, the increasing state controls on the economy created conditions for nepotism, corruption, and rent-seeking which largely benefited the middle-class bureaucrats and clerks. The Indian economy had already reached a level of maturity when private capital needed to take the lead which Indira Gandhi’s top-heavy reforms did not allow. Moreover, the Indian economy had to confront the oil crisis and a severe drought in the early 1970s. On top of it all, in 1975, the Allahabad High Court found Mrs Gandhi guilty of election fraud. She responded to these multiple crises by imposing the infamous Emergency.
This, in brief, is what was going on the economic and political fronts in India during the first phase which lasted for about 25 years after Independence.
It is illuminating at this point to look at the right-wing opposition to Nehru’s state-managed capitalism. One came from the Hindu nationalist parties, the other from the Swatantra (or Freedom) Party. Many of the ideas of the Swatantra Party are coming back, now that the Indian politics and economy have shifted to the right of the centre.
For the most of this period, Hindu nationalist organizations remained in the shadow cast by the murder of Mahatma Gandhi by one of their own: Nathuram Godse. Leaders of the Rashtriya Swayamsevak Sangh (RSS) and the Hindu Mahasabha, the two veteran Hindu nationalist organizations, moreover, preferred not to participate in electoral politics because they cast themselves in the role of cultural revolutionaries, concerned more with reinforcing the Hindu foundations of Indian culture than with winning elections.
While they did not directly get involved in economic debates, Hindu nationalist thinkers did manage to produce trenchant criticisms of the Nehruvian planned economy. They opposed the socialist spirit of the Indian economy from two angles: the first from the perspective of ‘integral humanism’ based upon the primacy of community, and the second from the perspective of a full-blown free market capitalism, based upon the primacy of the individual above all. Intriguingly, Hindu ideologues would claim to find support for both of these contradictory ideologies in the sacred teachings of Hinduism and Hindu spirituality! Both of these ideologies are making a big comeback, with many new publishing houses, think tanks and their corporate supporters pushing for free markets within the purported civilizational superiority of Hinduism and its ideals of integral society.
The philosophy of integral humanism was most clearly enunciated in 1965 by Deendayal Upadhyaya, the first general secretary of the Jan Sangh, the forerunner of today’s Bharatiya Janata Party (BJP). Integral humanism, along with Hindutva, is still the official philosophy of the BJP and new members are required to swear an oath that they support this philosophy. While integral humanists attacked the commanding heights assigned to the state by the Congress socialists as alien and un-Hindu, they did not embrace free market capitalism either. What they recommended was a ‘third way’ which was neither socialist nor capitalist but ‘dharmic’, with a distinct Gandhian touch of swadeshi or self-reliance.
According to Upadhyaya, it is Hindu India’s inherent, inborn nature–or chitti, to use the appropriate Sanskrit word —to integrate individuals into the organic whole, or the group mind. Once so integrated, individuals do not need control from some external power like the state, nor do they fall prey to the selfish instincts of capitalists, for they are capable of limiting and controlling their desires and demands in the interest of the national community. What India needed was the cultivation of dharma, creation of men and women who would learn to see themselves as limbs of the body politic made up of the family, caste, guild, and the nation. Just as there can be no conflict between the limb and the body, there could be no conflict of interest between individuals born in different castes and classes and the rest of the society. This was to be India’s very own ‘third way’ which reached beyond socialism and capitalism, both of which were declared to be alien to the Hindu ethos. Economic policy in India, like all other aspects of social life, was to be infused with Hindu religious and moral values.
Slowly but surely, Hindu nationalists began to present this philosophy of integral humanism in the language borrowed from Gandhian socialism which celebrated swadeshi or self-reliance. Gandhi’s conception of swadeshi shared the essential core of integral humanist argument that economic policies adopted for national development must be guided by the cultural values of the Indian people, which were supposed to be communitarian, non-materialistic, or spiritual. In practical terms, it meant exaltation of the local and the national over foreign imports, a preference for small-scale, village-based industry over modern industrial production and an opposition to state ownership and control of economic activity. While this vision resonated with the memories of the swadeshi campaigns during the freedom struggle when people were exhorted to burn imported products in the streets, it failed to have much influence after Independence. Economic and industrial policy in this phase continued to favour big, state controlled public enterprises.
But swadeshi was not the only argument against Nehru’s state-heavy socialism. In the late 1950s through the 1960s, Nehruvian economics was also challenged by the Swatantra Party which adopted the classical liberal position in defence of free markets with minimal government controls. Since such well-known people like Narayana Murthy and Gurcharan Das are trying to revive the old Swatantra Party, it will be useful here to take a closer look at its historical record.
The Swatantra Party was founded in 1959 by C. Rajagopalachari, a veteran of the freedom struggle, a one-time associate of Gandhi (whose daughter married Gandhi’s son) and an avowed social conservative. The core group was made up of K.M. Munshi, who had been active in Hindu religious and cultural affairs and who founded the Bharatiya Vidya Bhavan; the economist Minoo Masani, who was one of the founders of the Congress Socialist Party before he became an ardent anti-socialist; the industrialist Sir Homy Modi, a very anglicized Parsi; along with a number of senior civil servants who had served in high positions under the British. (Incidentally, Sita Ram Goel, the recently deceased founder of India’s leading right-wing publishing house, Voice of India, and well known for his radical anti-Islamic and anti-Christian views, was a member of the Swatantra Party. We will examine Goel’s legacy in Chapter 4.) The party’s membership also included traditional power-wielders like big landlords, and members of provincial royal families who stood to lose their thrones to the new republic. For all their avowed liberalism, the party also made electoral alliances with distinctly illiberal and obscurantist groups like the Ram Rajya Parishad, the Hindu Mahasabha and the Jan Sangh. Nehru, the bête noire of the Swatantra Party, described it as belonging to ‘the middle ages…the party of lords, castles, and zamindars which is becoming more and more fascist in outlook’.
What united this motley group of well-educated liberals, provincial rajas and ranis, and big landlords was their staunch opposition to a Soviet-style planned economy which they feared was being introduced into India by the Congress Party under Nehru. The Swatantra Party promised ‘prosperity through freedom’, and its 21-point manifesto declared its commitment to ‘maximal freedom for the individual and minimal interference from the state’. In practical terms, ‘minimal interference from the state’ meant an opposition to land reforms, opposition to public sector involvement in industrial production, and support for lower taxes, low government spending, right to own property, and limits on the power of the government. In the political realm, the party stood for the Gandhian principle of trusteeship of the rich and the well born who were exhorted to use their privilege to serve the poor. All of this added up to a classical free market agenda, with the state reduced to the role of a night-watchman, with no role in redistribution of wealth.
By themselves, of course, there was nothing wrong with these classical liberal doctrines when the Swatantra Party first espoused them—just as there is nothing wrong with them now when they are being revived. What we have learnt from the failure of state socialist experiments around the world is that without some mechanism for responding to market signals, and without some checks and balances, public sector institutions have a habit of becoming inefficient, corrupt, and overbearing. At the same time, the case of the Swatantra Party clearly shows the limits of economic liberalism divorced from the social and cultural realities of India. Swatantra shows that liberalism can end up in bed with the worst kind of reactionary traditionalism when the very real problems of caste/class, inequality, and exploitation are resolved not in material terms, but in the realm of spiritual values of duty, harmony, and trusteeship.
Swatantra was accused of harbouring communal, and even fascist tendencies in its own time. Looking back at it today, some scholars describe Swatantra Party leaders as ‘sympathetic to Hindu nationalist ideology and active in Hindu religious and cultural institutions’. But this is a misreading of what the party actually stood for. According to Howard Erdman, the author of the best-known study of the Swatantra Party to date, the leaders of the party were neither abjectly reactionary nor militantly nationalistic… [it is an] error to call it a ‘communal’ party for it made no appeal to any communal or parochial interest…It is conciliatory towards Pakistan and its leaders have been solicitous of the interests of Muslims…Swatantra is steadfastly secular and is committed to the observance of constitutional procedures.
It is true that C. Rajagopalachari and K.M. Munshi were devout Hindus and they introduced prayers and discourses on the Vedas and Bhagwat Gita at political meetings. But this public display of religiosity was not shared by other members of the party, most of whom were secular minded and respected the principle of separation between public and private realms. They did not define the nation in religious terms, setting Hindus against Muslims, as Hindu nationalists are wont to. On top of it, they did not support the Gandhian economic agenda of promoting handicrafts and traditional technologies and instead stood for freedom of enterprise in the modernized industrial and agricultural sector. It is fair to call them ‘moderate’ (as Erdman does) in their social and political convictions.
And yet, Swatantra made political alliances with some of the most obscurantist and reactionary parties of its time, including the Ram Rajya Parishad, the Hindu Mahasabha, and the Jan Sangh. Why did the moderate liberals ally themselves with such obviously illiberal groups?
The key to this puzzle lies in the fact that while the Swatantra liberals—much like neo-liberals of today—poured their bile on the evils and inefficiencies of state intervention in the economy, they did not pay even a fraction of the same attention to the illiberalism and injustice that is taken for granted in our cultural traditions. Because of their single-minded obsession with opposing state-led socialism, Swatantra liberals, as Erdman correctly points out,
did not speak out against the many suffocating influences of the old order, or against the dangers of freedom which lie on the right. Largely for this reason, the attacks on traditionalism which is implicit in the party’s fundamental principles, is muted to the point of inaudibility…As long Swatantra attacks only the left, it will represent a drastically truncated form of liberalism.
Far from speaking out against the ‘suffocating influences of the old order’, Swatantra practically courted Hindu traditionalist parties seeped in the old order. Why? Again, the reasons are important to understand for the sake of illuminating our present predicaments with neo-liberalism.
As Swatantra members themselves realized, their great faith in the free market did not resonate with the masses, most of whom were desperately poor and welcomed the helping hand of the state they had elected. In order to win the masses to their side, without providing real solutions to the multiple inequities they were suffering from, the Swatantra Party had no other option but to wrap itself in religion and adopt a warmed-over Gandhian talk of trusteeship. Unable or unwilling to take on the religious sources of injustice in India, Swatantra tried to resolve these injustices at the spiritual level. They argued that the poor may be poor but traditional Hindu society honour their spirituality. Individual enterprise, freed from the supposedly tyrannical government controls, would be guided by their high spiritual values and use their wealth for the common good. This was the defence of liberalism with an Indian face that the Swatantra Party peddled. The fact that these same spiritual values had served as ideological cover for hierarchy and injustice did not bother these apologists of free enterprise.
To continue with the story, the Swatantra Party made electoral alliances with the Jan Sangh during the 1960s and ran on its free market platform without much success. If anything, its partnership with a party of rajas ended up giving the Jan Sangh the reputation of being a party of haves against the have-nots. Partly as the result of its experience with Swatantra, the current leadership of the Sangh Parivar has learnt the art of covering its pro-globalization agenda in the Gandhian language of swadeshi.
Incidentally, the new incarnation of the Swatantra Party, the brand new Liberal Party of India, established in 2005, is faced with some of the same ideological dilemmas that confronted its forerunner. The label ‘moderate’ fits the new party which wants to ‘rid India of socialism and bigotry’, as its website proudly proclaims. The new Swatantraites, like their predecessors, don’t have any obvious animus against Pakistan, Islam, or Muslims, and nor have they made any communal appeals. Even though their writings often make references to Hindu sacred books like the Manusmriti and Arthashastra in order to explain and bless the Indian spirit of enterprise for private gain, it is fair to say that their commitment to neo-liberal market reforms is motivated by a non-communal outlook. Later in this chapter, we will ask if the new Swatantraites can avoid allying themselves with the religious right.
No discussion of ideological trends in this early phase can be complete without at least a mention of Subramaniam Swamy, a one-man squad championing free markets along with Hindu revival. A Harvard-educated economist, Swamy (b. 1939) first joined the Jan Sangh in the 1960s but later quit to form the Janata Party and now directs a New Delhi think tank called the Centre for National Renaissance and writes regular columns for The Organiser, the weekly newspaper of the RSS.
Swamy’s agenda has been—and still is—to hitch economic development with Hindu revival. Like his fellow travellers, he too took the obligatory dive into the Bhagvat Gita and the Vedas. But unlike those who found the Hindu genius to be integralist, Swamy declared the ‘Hindu ethos to be individualistic’ and more hospitable to free markets and a minimalist state. The minimal state of Swamy’s dreams, however, is not so minimal that it would not actively support Hindu revival: on the contrary he urged the Indian state to give up the ‘Western nihilist’ idea of secularism and actively promote Hindu culture as the source of national unity and pride.
Swamy’s great plans for free markets along with Hindu renaissance did not go anywhere when he first proposed them in the late 1960s–early 1970s. But Swamy appears to be undergoing something of a renaissance himself. His new Fundamentals of Indian Renaissance published in 2005 tries to revive his failed Agenda of Hindu Renaissance which was reportedly dismissed by Indira Gandhi in 1969 as ‘devised by a Santa Claus’.
For all the bombast, the economic philosophy of the right, both in integral humanist and the Swatantra garb, remained politically marginalized through this phase of the founding of the Indian republic. What ended the Nehruvian era of self-reliant and inclusive economic growth was a combination of its own successes and failures. It is to the slow unravelling of the Nehruvian programme that we now turn.
This period began with the election, in 1977, of the first non-Congress coalition party, the Janata Party. This was followed by the return of Indira Gandhi as prime minister in 1980 until her assassination in 1984. Rajiv Gandhi, Indira Gandhi’s son, ascended to political power until his assassination in 1991. The mother–son duo set in motion many reforms which sought to undo the stringent regulations that had been put in place in the first phase by Mrs Gandhi’s government.
By all accounts, the short-lived Janata Party government was quite inconsequential on matters of economic reforms and is remembered mostly for its inefficiency and corruption. The Janata Party was a coalition of non-communist political parties opposed to Indira Gandhi and the Emergency. The coalition included the Bharatiya Jan Sangh, the forerunner of the BJP, along with a number of other parties which had been a part of the movement for ‘total revolution’ started by the veteran socialist turned Gandhian, Jayaprakash Narayan, or JP, as he was called. It was the first time that an openly Hindu nationalist party like the Jan Sangh had come to power at the Centre, albeit in a coalition.
The Janata Party shared the Gandhian and Hindu traditionalist outlook of the Jan Sangh. It sought to reverse the emphasis on big industry in favour of small, village-based industries and village councils (or panchayats). But all said and done, the real effect on industrial policy was rather minimal. The only added nuance was a greater emphasis on protecting urban small-scale producers and farmers.
The real burden of rationalizing and loosening some of the excessively rigid and constraining regulation was left to someone who was responsible for putting them there in the first place, namely, Indira Gandhi, and following her assassination, her son, Rajiv Gandhi.
In 1980, Indira Gandhi was swept back into power. It became clear even to her that the economy was under-performing and controls on the private sector had gone too far. Indira Gandhi announced a new Industrial Policy in July 1980 which carried forward the piecemeal retreat from the highly restrictive regime that she had herself put in place during her first (pre-Emergency) term in office. These reforms removed some restrictions on imports, allowed private industry to add more production capacity, and allowed firms to get bigger without the fear of anti-monopoly laws.
After Indira Gandhi’s assassination in 1984, her son, Rajiv Gandhi, continued with the reforms. Unencumbered by the socialist or Gandhian thinking of the earlier generation, and more accepting of modern conveniences like personal automobiles and colour TV, Rajiv Gandhi promised to launch India into the 21st century by developing modern technology and by promoting managerial efficiency and economic competitiveness. This won him the allegiance of the urban middle classes who wanted access to Western the style consumption patterns. This elite-led deregulation of the 1980s further loosened restraints on the private sector, liberalized imports of consumer goods, and gave tax breaks to consumers so that they could afford automobiles and colour TVs which were assembled out of imported components. The result was a consumption boom led by the durable goods sector whose expansion surged from 8 to 22 per cent a year through the 1980s. Overall growth rose to 5.6 per cent, well above the notorious ‘Hindu rate of growth’ of 3.5 per cent in the previous years. External debt and payment on the interest on the debt grew to three times its size over the 1980s, from $23.8 billion to $62.3 billion. But this import-led consumption boom was not matched by a corresponding rise of exports, a situation which led to a serious deficit of foreign currency reserves.
During an election rally in 1991, Rajiv Gandhi was assassinated by a Sri Lankan Tamil suicide bomber protesting India’s intervention in Sri Lanka on behalf of the Sinhalese. The piecemeal reforms initiated by the two Gandhis set the stage for a full-blown embracing of neo-liberal reforms which were put in place by P. Narasimha Rao who became prime minister in June 1991 when the Congress Party won the sympathy vote after the murder of Rajiv Gandhi.
The year 1991 is to India’s neo-liberals what 1989 is to Soviet Bloc countries: it marks the end of the bad old days. Gurcharan Das, India’s most erudite neo-liberal, thinks of the ‘golden summer of 1991’ as ‘India’s second independence…an economic revolution…more important than the political revolution that Jawaharlal Nehru initiated in 1947’. The business lobbies, most of the mainstream media, free-market economists, and India’s upwardly mobile urban middle classes have nothing but words of celebration and thanksgiving for the neo-liberal reforms that the Indian government initiated in 1991. Narasimha Rao, the Congress prime minister (1991–96), and Manmohan Singh, his finance minister (and India’s current prime minister), are hailed as revolutionary heroes who put India on a fast track to wealth and glory.
The 1991 reforms were a response to the trade deficit and depletion of foreign exchange reserves created by the elite-led consumption boom of the previous decade. This was compounded by the Gulf War in 1990 which raised the price of oil. Bad economic tidings led to capital flight, with many non-resident Indians withdrawing their savings out of Indian banks. That is when India went for a strings-attached, IMF–World Bank loan.
This loan became the pretext for a total overhaul of the state–economy relationship. As a condition for the loan, India was told to get the government out of the business of owning and running economic enterprises, curb government subsidies, make its economy more market friendly, remove import restrictions, allow more foreign investment, and cut red tape—the standard conditions of IMF–World Bank loans.
But it would be wrong to see the reforms as some sort of neo-imperialist imposition on poor, hapless India. The situation was more complicated. The Indian industry and policymakers were not averse to these reforms. In fact, they welcomed them as the needed tonic that would release the animal spirit of money-making and entrepreneurship of Indians. According to the Columbia University economist Arvind Panagariya, who was working for the World Bank at the time, although the necessity to borrow from the IMF and World Bank had subjected the initial liberalization package to the conditionality of these institutions, the proposed reforms were ‘essentially domestic in origin and reflected the consensus that had emerged among the Indian policymakers. Contrary to the assertions by many, the influence of the IMF and the World Bank was confined to the first set of actions. After the World Bank’s structural adjustment loan (SAL) of December 1991, the Government of India was back in the saddle.’
The fact is that starting with Rajiv Gandhi’s experiments with liberalization in the 1980s, Indian industry was anxious to break free from the kind of inward-looking and state-managed economic path India had been following. It was keen to break into export markets where it needed partnership with multinational corporations. Indian businesses were also keen to enter newer areas of the economy like telecommunications, financial services, stock trading, and such. Thus the corporate sector of the country was practically itching to get rid of state regulations that prevented it from getting bigger and spreading into the global arena, alone or through foreign tie-ups.
Narasimha Rao and his finance minister, Manmohan Singh, an Oxbridge-educated economist, turned the IMF–World Bank conditionality into an opportunity for a complete makeover. Manmohan Singh teamed up with P. Chidambaram, a Harvard MBA, and Montek Singh Ahluwalia, a renowned Oxford-trained economist. The three of them went on a spree of deregulation, sometimes taking only hours to dismantle complex regulations that had taken years to formulate. Within a span of two years, they managed to loosen restrictions on monopolies; open the public sector institutions in banking, airlines, electric power, petroleum, cellular phones, etc. to the private sector; and open the country for foreign investment, allowing ‘automatic entry’ and majority ownership in 34 industries. To top it, they cut taxes on businesses and corporations; reduced excise duties; opened the capital markets to international investors; and allowed Indian companies to borrow and invest in foreign money markets.
All these reforms brought the Indian economy largely in conformity with the market fundamentalism of the IMF and the World Bank. All elements of the neo-liberal gospel – free trade, unfettered investments, deregulation, and privatization of publicly owned enterprises—were embraced by Indian policymakers. Even though they kept paying lip service to the old socialist rhetoric of ‘development with a human face’ inherited from the Nehru era, Indian policymakers began to buy into new mantras that markets are good and governments are bad, and that there is no alternative to global markets. As we shall see below, this rosy assumption that a rising tide lifts all boats is not true anywhere, least of all in India where barriers to class mobility are exceptionally difficult to surmount.
Despite the boost to the economy, the Congress lost the elections in 1996 and after a series of short-term governments, Atal Bihari Vajpayee of the BJP, the leading partner in the coalition government of the National Democratic Alliance (NDA), became the prime minister on October 13, 1999.
For all its allegiance to swadeshi and the integral-humanist ‘third way’, the BJP-led NDA enthusiastically carried forth the neo-liberal reforms set in motion by the Congress government in 1991. When out of power, the BJP had distinguished between ‘internal liberalization’ (i.e., privatization) which it supported and ‘external liberalization’ (i.e. globalization) which it opposed in the name of protecting Indian businesses from foreign competition. But once in power, it gave up on protectionism and opened up important sectors of the economy including consumer goods, electricity generation, IT-sector, and insurance industry, while liberalizing intellectual property laws. Perhaps most important of all, the BJP government took the lead in privatization of education at all levels, including colleges and universities. As we examine in more detail below, opening higher education to the private sector—including the religious sector—has created the infrastructure for a deeper Hinduization of civil society.
The government had starting selling public enterprises in 1991 in order to reduce fiscal deficit. But gradually, disinvestment took on a life of its own. The BJP-led NDA government declared that disinvestment was no longer a choice but an imperative, and established a full-fledged Ministry of Disinvestment with Arun Shourie, a well-known journalist and Hindutva sympathizer, in charge. Overall, the NDA government made it easier for bigger chunks of more and more sectors of the economy to be sold to private businesses, Indian or foreign. Except for nuclear power, defence, and railways, everything else was declared ‘non-strategic’ and therefore eligible for privatization. And yet, for all the claims of ‘India shining’, the NDA lost the 2004 elections. A coalition government (United Progressive Alliance) led by the Congress took control. The party chose Manmohan Singh, the architect of neo-liberalism, as the new prime minister. Under the UPA, the country has continued with the economic policies it embraced in 1991 with mixed results—higher GDP growth, deepening inequities, and sliding human development when measured by the United Nation’s Human Development Index (down to 132nd in 2009 from an already pitiful 127th).
The 2009 general election came in the midst of a worldwide crisis of capitalism, the kind not seen since the Great Depression of 1929. The Americans, who for so long were treated as consumers of last resort who would buy goods and services from the rest of the world, started to drown in debt. As a result, the housing market crashed, taking down major multinational investment houses and banks, all of whom had invested in the US mortgage market. The ripple effects are being felt all across the world: workers are being laid off everywhere as the global consumer demand declines, bank loans freeze up, and new investments are not forthcoming. Every tenet of the neo-liberal dogma—that unfettered markets are good and government regulation is bad, or that globalization is good and national priorities are bad—is now being questioned.
The Indian economy is hardly immune from the crisis. The recent economic data is grim. The country’s gross domestic product fell to 5.3 per cent during the last quarter of 2008, down from 8.9 per cent in the same time period in 2007. The economy lost half a million jobs in the final four months of 2008. Export sector jobs—from traditional exports of garments, diamonds, gems and jewellery to the modern IT and financial sector—have suffered deeper cuts. But the non-exporting sectors—real estate, construction, automobile industry, for example—have not been spared. According to a recent New York Times report, the only industry that is showing signs of growth is the private security sector which is hiring close to a million employees to keep the riff-raff out of shopping malls, corporate office parks, apartment blocks, and even public transportation in India’s urban areas. The already deep class distinctions are expected to get deeper still.
And yet, the Congress-led UPA won the 2009 elections: it appears that the electorate voted for stability and whatever little the government did for the aam aadmi (ordinary man). the UPA’s victory is expected to hasten even more radical pro-market reforms. Neo-liberalism is here to stay.
When sociologists of religion try to understand the changing patterns of religious faith in a society, they tend to concentrate on the socio-economic profile of the population. They assume that when people grow up in conditions where their survival is not secure, they tend to be more religious. It makes sense, therefore, for us to begin our enquiry into the changing nature of Hindu religiosity under neo-liberalism by first looking at the changing distribution of wealth. Some, or even most, readers may already be familiar with the data and analysis provided below. But it will be useful to start with a panoramic view of the political economy before we narrow our focus to take a fine-grained picture of the religious landscape.
Nearly a quarter century into the so-called reforms, there isn’t much of a trickle-down of wealth, nor a pull-up of the poor through growth of gainful employment. If anything, the growing prosperity of the middle-and upper-income groups depends upon the growing impoverishment of the rest. In the words of Amit Bhaduri, a well-known Indian economist, ‘growing inequality is driving growth, and growth is fueling further inequality’.
Consider the following two sets of evidence:
• India is rising in the Forbes global ranking of billionaires, while sliding in the United Nation’s global ranking of human welfare. In 2008, there were 53 dollar-billionaires (that is, those with rupees equivalent of 1,000,000,000 US dollars ) in India, up from 40 in 2007 and nine in 2004. India is home to more billionaires today than any other Asian country, more than China and Japan. Then there are the millionaires: the Merrill Lynch/Cap Gemini report says that India’s population of millionaires grew by 20 per cent in 2007 to 100,000. That rate of growth was more than twice the growth of millionaires in the US. A substantial chunk of this wealth has already found its way into secret tax havens abroad. Recent reports have revealed that out of the $2.2 trillion secretly stowed away in Swiss banks, $1.45 trillion belongs to Indians. India tops the list of five countries (including Russia, Britain, Ukraine and China) with largest secret accounts in Swiss banks.
But at a time when great fortunes are being amassed, India is backsliding on the Human Development Index, or HDI, which measures well-being along three dimensions of health, education, and income. According to the figures compiled by veteran journalist P. Sainath, from an already pathetic rank of 124 (out of 177 nations) in 2000, India fell to 127 in 2001, 128 in 2007, and 132 in 2008. These are dismal numbers, which put India not among the club of superpowers where it wants to belong, but among some of the most impoverished countries in the world: at 128, India was just behind Equatorial Guinea (127), and just ahead of Solomon Islands (129). Incidentally, India ranks far worse than its closest competitors. According to the 2007 Human Development Report, Brazil stood at 70, Russia at 67, and China had an HDI of 81 (an amazing improvement from 99 in 2000).
• While there have been many surveys to track poverty in India, they have gotten mired in methodological debates. But, to quote from one of the most respected studies by Angus Deaton and Jean Dreze, ‘the broad picture emerging…is one of sustained poverty decline in most states and also in India as a whole’. But it appears that the poor only move from being ‘extremely poor’ and ‘poor’ to joining the sea of hard-working poor who make up the unorganized sector of the economy. Although above the official poverty line, this segment of the Indian population —as many as 836 million men, women, and children in 2004–05 – lives on only Rs 20 (or half a US dollar) per day, and without even a semblance of a social security net.
There are built-in reasons why India’s economic growth has not— and will not—trickle down any time soon. Most of the growth is taking place in the IT-enabled services sector which requires the kind of cultural capital—fluency in English, familiarity with Western businesses and cultural norms —that is not readily available to the masses. Manufacturing —the sector which has traditionally absorbed non-college-educated, unskilled workers and put them on the path to middle-class wages—makes up only 16 per cent of India’s GDP. (Comparable figure for China is 35 per cent.) This sector is experiencing a relatively jobless growth due to growing automation and the recent economic downturn.
These figures tell only a part of the story. India has witnessed a massive land-grab by the private sector, aided and abetted by the state in the name of development—a process that has been dubbed ‘developmental terrorism’. Using the power of eminent domain, the central and state governments have been buying agricultural and tribal land and literally giving it away to the corporate sector to set up factories, mines, special economic zones, private for-profit hospitals, colleges, and universities—and as we shall see in the following chapters, temples, ashrams, and ‘research institutes’ that propagate traditional ‘science’ of astrology, yoga, and Ayurveda. Regrettably, the Communists have been as complicit in this land-grab as the more pro-liberalization parties: Nano, the much-hyped, low-cost car was originally planned to be manufactured in a factory built upon 997 acres of fertile farmland that was practically gifted to the Tata Group by the Communist Government of West Bengal. Violent protests by peasants and their supporters forced Tata Motors to move the plant to the sate of Gujarat. Dispossession of the poor has become a necessary factor in the creation of riches.
The poor in the countryside, in small towns, and in the slums of big cities suffer not only from direct dispossession but from neglect and cutbacks in public sector employment. With the public sector shedding jobs, and the organized corporate sector more or less closed to them for the lack of high-tech skills and cultural capital, the vast majority eke out a living in the unorganized, or informal, sector. Government’s own data collected by the National Commission for Enterprises in the Unorganized Sector (NCEUS) shows that out of India’s total labour force of over 458 million in 2005, 86 per cent, or 395 million, were in the unorganized sector, either self-employed (shopowners, street vendors, hawkers, craftsmen), or working for wages as casual labourers, domestic servants/ housemaids, farmhands, etc. Most of the job growth sparked by globalization has taken place in this segment of non-unionized, informal workers both in the organized and unorganized sector of the economy.
This vast army of informal workers has no welfare floor below which they are not allowed to fall, and no exploitation ceiling beyond which they cannot be squeezed. Their relationship with the employers is regulated not by legal contracts but by traditions, enforced by religion and custom. Their labour is extracted by what Barbara Harriss-White calls ‘compulsions of assetlessness, clientelage, beck-and-call contracts, debt-mediated labour attachment [or servitude], but also through the social structure of gender, religion, caste…’
In the informal economy, the adverse effects of neo-liberalism are felt in an inverse proportion to one’s standing in the socio-economic order: those who are lowest in the scale are most badly hit. Two of the most vulnerable and large segments of the Indian population—Dalits and Muslims—are a case in point: as many as 88 per cent of Dalits and 84 per cent of Muslims make a living in the informal or unorganized sector. Even the government admits that ‘they have remained poor at a bare subsistence level without any job or social security, working in the most miserable, unhygienic, and unliveable conditions throughout this period of high economic growth since the early nineties’.
Yet, influential voices are emerging that celebrate market reforms as liberating for Dalits. Chandra Bhan Prasad, a columnist for The Pioneer, has taken the lead in encouraging Dalits to join, rather than resist, the new market economy. In 2002, Prasad and like-minded intellectuals and activists brought out their manifesto for Dalit capitalism called the Bhopal Declaration. It called upon the government and the captains of industry to ‘democratize capitalism’ by enabling Dalits to enter the market economy. To that end, the Bhopal Declaration calls for a public-private partnership to provide new marketable education for Dalits and for American-style affirmative action in the corporate sector. Proponents of Dalit capitalism point to the rising levels of consumption and wages among Dalits as a result of the tightening of labour markets in some parts of the country as evidence that capitalism is breaking the back of the caste system.
There is only one problem with this vision: it is a fairy tale. In India, capitalism is not dissolving the existing caste relations but rather using them to maintain a vast army of workers who can literally be at the beck and call of employers for pathetically poor wages and without any social security. While there might be some local tightening of labour markets which may help Dalits and other backward castes to improve their bargaining power, the fact remains that ‘being a “Scheduled Caste” makes a person twice as likely to be a casual labourer in agriculture, and poor’.
In many ways, Muslims in India are faring much worse than even the Dalits. They are largely self-employed—only 13 per cent of the entire Muslim population has salaried jobs in public or private enterprises, with barely 5 per cent of public sector jobs going to Muslims. The recent Sachar Committee report found that globalization has hit the Muslim workers harder than other communities. Many of the traditional occupations of Muslims in industries such as silk, weaving, leather, and garment making have been hurt by cheaper imports from China. There are industries like gem cutting and brass work which are experiencing large growth in exports, but the benefits are mostly going to the Hindu owners of these enterprises.
To sum up: the rising tide is not lifting all boats!
The sale of public sector institutions to private investors was justified, at least in part, by the promise that once the state gets out of the business of running hotels and making and selling bread, television sets, and telephones, it will have more resources for social services like education and health. But that is not what has happened. On the contrary, education, especially higher education, has become one more area which the state is disinvesting from, leaving the field open to private enterprise often in partnership with the state.
The per centage of GDP the government spends on education and health care has remained almost constant, or declined, even as the revenues have grown. The most recent budget (2008–09) clearly displayed the ‘tax less, and spend even less’, spirit of neo-liberal philosophy. Even as the revenues grew by 15 per cent over the previous year, the budget for elementary education went up by only 7 per cent, barely enough to keep pace with inflation and falling below the 6 per cent of GDP promised by the UPA government. Even while the government coffers are awash with money, spending on education has hovered between 3 and 4 per cent of the GDP, with only half of it going to primary and secondary schools.
The despair-driven, de facto privatization of primary schools is well-known and much written about. Public schools have fallen into such disrepair that even slum dwellers prefer to send their children (especially sons) to English medium private schools. Private, for-profit schools catering to the children of the very poor for a fee have sprung up all over the country, even in small towns and remote villages. Critics point out that rather than improve the dismal conditions of public schools, the government—with the complicity of the middle classes who have been quietly but steadily seceding from public services – has decided to let them rot to death. Even the Right to Education Bill of 2008 has accepted the reality that the right to education means a ‘right’ to unequal and inferior education. The ideal of creating a common school system is all but dead.
Higher education is the new frontier for privatization. Today, any registered society, a public trust, or a company registered under the Companies Act of 1956, can set up an educational institution and then either get the state to simply pass a bill declaring it a university, or get the educational bureaucracy (the University Grants Commission [UGC]) to ‘deem’ it a university. Once it gets the coveted status of a university, it can set its own standards for admissions and fees, decide the content of the courses, and choose its teaching methods. Above all, once deemed, a teaching shop gets the right to confer degrees—and make money through fees and ‘donations’. In theory, of course, some minimum standards set by the UGC have to be met, but that is not much of an impediment, especially when it comes to injecting religion into the curricula. Under the previous BJP administration, the UGC had already approved BA-and even MA-and Ph.D.-level courses in subjects like Vedic astrology and had pushed for courses in vastu shastra and karmakanda. (Despite its promises to desaffronize education, the UPA government has not been able to put an end to these obscurantist courses, in part because in 2004 the Supreme Court gave the green light to teaching astrology in colleges and universities.)
Later in the book, we will provide evidence to show that privatization is not just turning higher education into a business; it is opening it to the business of God and god-men as well. The regulatory changes that are allowing private, for-profit teaching shops to enter higher education are also paving the way for religious endowments, ashrams, gurus to move into the business of conferring degrees in priestcraft and astrology, and otherwise setting up modern institutions with a traditionalist bent. But first it is important to get a better understanding of the larger picture. Consider the following statistics:
• In 2000, India had only 21 completely privately owned (i.e., unaided by government), not-for-profit institutions that had been ‘deemed’, or declared, to be universities. The number jumped to 70 in 2005, and to 117 in 2007. Nearly all the new universities created after 1998 have been privately owned. Even though many are registered as philanthropic trusts and get tax-breaks for their ‘non-profit’ status, in reality they are nothing more than teaching shops which charge exorbitant sums of money disguised as ‘donations’ for entry, especially into engineering, medical, and business schools.
• The total number of private colleges, including professional engineering and medical colleges, shot up from 5748 in 1990 to 16,865 in 2003, a net increase of 11,117 new colleges in about a decade.
• In 2003, 86.4 per cent new engineers were products of private colleges, as compared to only 15 per cent in 1960. Likewise, the share of private medical colleges went up from 6.8 per cent in 1960 to 40.9 per cent in 2003.
• There is a push to allow foreign educational institutions to offer degrees either independently or through collaboration with any already established institution in the country. The bill that would have allowed foreign universities to set up campuses in the country was drafted in March 2007, but has been stalled due to political opposition. In the meantime, at least 130 foreign educational institutions, mostly from the US and the UK, have forged partnerships with local, mostly unaccredited, private institutions. Many of these are fly-by-night operations, offering degrees which are not recognized in the countries of origin.
In principle, there is nothing wrong with allowing private sector entities to set up institutions of higher education. After all, world-renowned universities like Harvard, Yale, Stanford, MIT, and the University of Chicago are private institutions. In principle, one could also argue that the private sector should step in to meet the enormous unmet demand for higher education that clearly exists in the country. Even though India has one of the largest number of colleges and universities in the world, they barely provide for about 10 per cent of college-age students. (In contrast, China enrolls nearly 20 per cent of college-age youth and in the US, more than 80 per cent attend college.)
The problem with this reasoning is that it ignores the ground realities of India. Those who argue for privatization accept the World Bank’s orthodoxy that the government should concentrate on primary and secondary education —which was seen as equality enhancing—and leave college and university education to the private sector. In 1997, the Government of India accepted this logic and declared education beyond primary level a ‘non-merit’ good. It argued that subsidies for higher education were unfair and favoured the rich who should be made to pay for college degrees with their own money.
But it is simply not the case that the benefits of public sector subsidies for higher education, meagre though they have been, have accrued only to the rich. If it were not for government subsidies, the first generation of college graduates among women and discriminated castes and tribes that we find in India today would not be there. As Devesh Kapur and Pratap Bhanu Mehta have pointed out:
There is absolutely no doubt that marginalized groups have been given much greater access to education as a result of government subsidies. The ratio of male to female students in higher education dropped form 8.29:1 in the 1950s to almost 1.5:1 by the late 1980s and is continuing to drop…parents are more likely to incur private expenditure for sons rather than daughters…Another point of evidence against the proposition that education subsidies go largely to the privileged is the increase in enrollment of India’s most marginalized social groups, namely Scheduled Castes (SC) and Scheduled Tribes (ST): the ratio of general to SC/ST students in professional education has dropped from almost 12:1 in the late fifties to 8:1 during the late eighties.
Despite the facts on the ground, support for commercialization of higher education has continued to grow. Under the BJP- led NDA government, higher education was practically offered on a silver platter to India’s corporate tycoons. The government invited Mukesh Ambani and Kumar Mangalam Birla, scions of India’s leading business families, for advice on the education policy. With the larger aim of producing ‘knowledge workers’ of the 21st century rather than industrial workers of yesteryears, Ambani and Birla recommended deregulation and privatization of all education, except for the humanities, liberal arts, and performing arts. Government’s role in higher education was reduced to insuring the student loan industry which would enable students to pay the asking price for their degrees.
Commercialization of education is backed by legal rulings. In its 2002 judgment in the TMA Pai Foundation v. State of Karnataka, the Supreme Court gave its blessings to for-profit private colleges and universities. In a creative interpretation of the constitutional right (Article 30) of minority religious and linguistic communities to set up their own educational institutions in accordance with their own norms and values without being denied grants from the state, the Supreme Court decided that private educational institutions must have the same rights. In addition, the courts redefined profits as ‘reasonable surplus’ and allowed private colleges to set their own fee and admission criteria.
Privatization does not mean an end to saffronization of education. Injection of Hindu traditionalism into apparently modern curricula takes place through the perfectly innocuous sounding objective of imparting ‘value education’. The private sector is not at all averse to the idea of value education, even in tertiary level science and engineering colleges. If anything, ‘blending’ the best of Western knowledge with Bharatiya (read Hindu) values has become a part of their sales pitch.
While it looks harmless, value education has been the favoured vehicle of traditionalists of all political parties to inject an uncritical adulation of India’s Hindu heritage into school curricula. The BJP-led NDA government rewrote the national curriculum in 2000 which was rightly criticized for saffronizing school education. But the new 2005 National Curriculum Framework crafted by the secular UPA government has also given its blessings to introducing all kinds of obscurantisms in the guise of respecting the ‘local knowledge’ and ‘innate wisdom’ that students bring with them into the classroom. Using a postmodernist argument that there is no one truth, but just so many different versions of knowledge, the new curriculum advises teachers to teach both local knowledge and scientific principles and let the students create their own meanings out of both systems. There is nothing to prevent spiritual or religious knowledge from being accommodated within the various possible versions of knowledge, and thereby surreptitiously bringing religion into school instruction. Privatization in the realm of political economy, and relativism in the realm of ideas seem to go well together.
Opening education to the private sector while relaxing oversight on course content has created conditions for Hinduization of higher education. The kind of Hindu-centrism of culture that the BJP-led government could not accomplish through legislative means is now being accomplished through privatization of education. (The next two chapters will provide evidence to support this claim.)
In the face of the deepening inequity and the growing sense of insecurity, the natural question is how is this model made palatable to the masses? How are political parties trying to sell disinvestment, privatization, and globalization to the people whose approval, after all, they have to seek every five years or so in state and national elections?
The issue of public consent became important only after reforms moved from the elite phase when the debate was still among academics and policymakers, into the mass phase (from the mid 1990s onwards) when ordinary people began to feel the impact of liberalization. For most of the mass phase of liberalization, the BJP-led NDA government was at the helm (1998–2004), followed by the Congress led UPA government.
Both parties have gradually redefined the old Gandhian ideal of swadeshi or self-reliance to mean whatever will make India powerful on the world stage. Gradually one hears less and less of swadeshi, and more and more of superpowerdom.
The superpower talk began to be heard more frequently after the nuclear tests the BJP government carried out in 1998. The tests were interpreted as giving a huge boost to India’s prestige on the world stage. According to Rob Jenkins, the BJP promised to replicate the same boost in prestige in the economic sphere as well:
In BJP’s vision…globalization became the site in which India will take up her rightful place in the international community; just as this has been accomplished in the global security field with the nuclear tests in 1998, so will India’s IT expertise and business acumen allow India to thrive in the global economic field as well.
A representative example of the rhetoric of superpower swadeshi is the following statement from Jaswant Singh, the finance minister under the NDA government:
Look at what is happening in the knowledge industry… we are reaching out the world and registering our presence through globalization. Today the Indian entrepreneur is celebrated. Look at Tata buying Daewoo. Reliance buying Flag. Research is moving out. Pharma is moving out. Indian companies are moving out and getting globalized. This is swadeshi. (Emphasis added)
By now, all parties use the promise of superpower status in their electoral pitches. Even the Swadeshi Jagran Manch, the Sangh Parivar’s watchdog against foreign capital, has bought into this vision. S. Gurumurthy, the leader of the Swadeshi Jagran Manch, for long a fiery critic of foreign multinationals, now supports ‘calibrated globalization [as] the vehicle for acquiring global economic strength’, while sitting on the board of directors of Indian First Foundation, a think tank that pushes for globalization from a Hindutva point of view.
But there is opposition to privatization and globalization from within the Hindutva ranks, especially from the labour union aligned with the RSS (Bharatiya Mazdoor Sangh [BMS]) and from small manufacturers who are not able to compete against cheaper imports (mostly from China). There is also considerable, and often violent, opposition to Western cultural imports (Valentine’s Day celebrations, beauty pageants, and pubs, for example) by the more militant sections of the Sangh Parivar. The BJP tacitly supports those who commit these acts of vandalism, but at the same time, it takes pains to distance itself from them in public so as not to offend its growing constituency among the middle classes.
There are two other elements of ideological discourse which are more unapologetic in their defence of free markets. The first comes from those who share the communalist agenda of the Sangh Parivar, while supporting an individualistic interpretation of Hinduism. Prominent and influential among them include Subramaniam Swamy, a maverick politician-economist we encountered in an earlier section, and Arun Shourie, a well-known public figure who served as the disinvestment minister for the NDA. One can also include here Narendra Modi, the chief minister of Gujarat, who has become the darling of industrialists and businessmen from the world over. Those who share this orientation can be called Hindutva neo-liberals.
The second group is made up of those trying to stake out a secular (or at least non-Hindutva) right-wing party which would eschew the divisive anti-Muslim and anti-Christian agenda of the BJP and the RSS and popularize classical liberal positions on individual rights and freedoms, small government and religion–state separation—a sort of modern-day Swatantra Party. Those who share this orientation can be safely described as non-Hindutva neo-liberals.
Hindutva neo-liberals are the closest ideological cousins of American religious neo-conservatives—the so-called ‘theocons’ – who justify their fervent American nationalism and their ardent admiration of capitalism in a theological world view derived from the natural law tradition of Roman Catholicism. Unlike the mainline Protestant denominations who accept (at least in principle) the fundamental American creed of church-state separation, American theocons see the very idea of a secular society as an abomination and the primary source of the cultural pathologies of American society. Theocons, who have provided the philosophical justification for George W. Bush’s so-called ‘faith-based initiatives’, insist that Christian faith is the precondition for the American nation and a prerequisite for the functioning of capitalist free markets.
The idea of Hinduism as the precondition for the Indian nation and a prerequisite for the proper functioning of Indian capitalism is the ideology of the Indian theocons, or Hindutva neo-liberals. The ideas of Subramaniam Swamy are illustrative of this position. When Swamy proposed the marriage of Hindu renaissance and laissez-faire capitalism in the 1970s, he was laughed off. But the same ideas, repackaged in various columns and blogs, are finding new audiences at home and among the NRI community abroad.
Swamy promises that India will become a global superpower by 2025 provided Indians develop the political will to dismantle all aspects of Nehruvian socialism and secularism, reduce the state to merely providing the infrastructure and the policies for private sector to flourish at the rate of 10 per cent GDP growth per year, and align their interests with the strategic interests of the US and Israel. But while necessary, all these economic and foreign policy reforms are not sufficient. What is needed is a ‘re-throning’ of Sanskritic Hinduism in the hearts and minds of the masses (Muslims and Christians included), schools, government, and business enterprises of Hindustan (his preferred name for India). Economic superpower-dom will only come if it is accompanied with a Hindu renaissance:
India becoming a global economic power is not enough. To get her due place in the world order, India must become thoroughly united with a virile mindset without self doubt and undergo a [Hindu] renaissance to cleanse the dirt and unwanted baggage acquired over the past thousand years.
Interestingly, while Swamy and his fellow Hindutva neo-liberals want the state to get out of the way of private enterprise, they want the state to use public resources to actively promote a renaissance of Hinduism. In other words, the state has to have a minimal role in economic affairs, but maximal role in propagation of Hinduism. The state is exhorted to teach the ‘correct’ reading of history which makes India the homeland of the Aryans and to bring science and Hindu spiritualism together in classrooms in order to promote an Indic model of education. All Indians, regardless of their own religious beliefs and traditions, are asked to accept this ‘scientific spiritualism’ as a part of their own ancestry. (Here again, the parallels with the religious right in the US are quite striking. Conservative Evangelical and Catholic groups have shown no compunctions in using the power of the Bush White House to enact socially conservative laws on matters of reproductive rights, stem cell research, and faith-based initiatives, while fully supporting the massive cutbacks in government support for public welfare.)
Let us turn now to the non-Hindutva neo-liberals. After their disappointment with the BJP’s complicity in the anti-Muslim pogrom in Gujarat in 2002, many among the free market enthusiasts began to seriously think of reviving the old Swatantra Party. Two of India’s biggest information technology tycoons have expressed their support for such a project. Jaithirth (Jerry) Rao, the founder CEO of Mphasis, a Bangalore-based IT and outsourcing firm, has been arguing for the creation of a new party on the lines of Swatantra that will not hide behind populist nostrums, but offer a khullam-khulla (open and unapologetic) defence of free markets. Narayana Murthy, the founder-CEO of Infosys, India’s best-known software company, is reported to be ‘willing to put up as much as four billion rupees of his own money’ to revive the old Swatantra Party and run for elections on its platform. Gurcharan Das, who has emerged as a very influential voice among neo-liberals, has urged the formation of a new party that will:
put economics above political matters, and trust markets rather than bureaucrats. It will do what no party has done so far—it will sell economic, social, and administrative reforms to the people…Finally it will work to confine religion to the private space, keeping it away from the public space.
The admirers of Swatantra are well aware that the chances of such a party actually winning elections are quite slim. That is why they seem to be ready to settle for the second best option—to start a movement which, in partnership with think tanks and NGOs, will take on the task of defending free market, pro-growth solutions in the public sphere. One can see the beginnings of such a movement in the emergence of think tanks like the Delhi-based Centre for Civil Society, the formation of The Indian National Interest, a consortium of bloggers which brings out a monthly magazine, Pragati, and the increasing visibility of neo-liberal positions in editorial and opinion pages of English language newspapers. Only time will tell what real impact these efforts will have on electoral politics in the country.
But the neo-Swatantraites seem to be making the same errors that led the old Swatantra into the arms of the Hindu right. Like their predecessors, neo-Swatantraites simply have only the mantra of trickle down to offer to those at the receiving end of the deeply entrenched inequalities in India. They, like their predecessors, concentrate their fire on the sins of government intervention while ignoring and soft-pedalling the religious sources of hierarchical ways of thinking that are deeply ingrained in Indian culture. Take, for example, their willingness to work with the BJP when it was in power before the BJP’s complicity in what happened in Godhra finally disillusioned them. The BJP by no means, subscribes to the kind of philosophical liberalism based upon respect for the rights-bearing individual. The BJP’s conception of a minimal state is premised on the fundamental correctness of a self-regulating caste society. While to their credit, neo-liberals have denounced the venomous communalism of the BJP and the Sangh Parivar, they have not taken the trouble to engage with the illiberal world view of integral humanism (which is the worldview of a caste society) which still constitutes the common sense of the Indian society. As long as Indian liberals do not actively challenge the illiberal world view of Hindu traditionalism, they run the risk of co-opting and getting co-opted by the Hindutva neo-liberals. Unless they actively take on the challenge of creating a new secular culture, their talk of confining religion to the public space will remain hollow.
This chapter is an overview of the political-economic context that India finds itself at the beginning of the 21st century. It traces the history of how the Indian elite stopped worrying about Nehru–Gandhi ideas of national self-reliance and came to love the global markets.
While fully acknowledging that the Indian economy needed reform of the excessively interventionist state, this chapter exposes the dark side of India’s so-called economic miracle. It lays bare the structural features of the Indian economy which shut out the vast majority of workers from the gains of the new economy. It also looks at the growing commercialization of education, especially higher education, which is a key to acquiring the cultural capital needed to participate in the new economy. Last but hardly the least, this chapter highlights the growth of national pride which often expresses itself in dreams of superpower status.
It was crucial to dwell on this new political economy in order to understand better the changes that are going on in the religious landscape of India. It is to these changes in popular Hindu religiosity that we now turn.