Two articles in the latest issue of the magazine by the economists Girish Mishra and Arun Kumar go to show that the voice of what was called the Nehruvian Left can still pack a punch or two with meaningful analysis in an age where the media is susceptible to sound bites, and more often, just barks.
An analysis of the post-independence growth experience shows two statistically significant breaks in the rate of growth of the economy. The first break occurred in the early 1980s when the economy moved from what has been commonly described as “the Hindu growth rate” of around 3.5 to 5.5 per cent. This followed a policy shift away from excessive controls and restrictions on private enterprise towards gradual decontrol. The second break occurred in the mid-1990s with the ushering in of deeper and broad-based reforms at the beginning of the decade.
From it follows that the entire Nehru era and most of the Indira phase was full of darkness and stagnation. The author of the Survey forgets what Dani Rodrik of the Harvard University has written about the contributions of Nehru and Indira Gandhi towards laying a solid foundation for economic growth. They faced all sorts of machinations and destabilisation attempts to break and destroy India. People have not forgotten the American attempt to induce India to mortgage its sovereignty by offering a nuclear umbrella, the VOA-AIR tie-up, Indo-US Education Foundation, etc. Another attempt was made in 1974-75 when Uncle Miltie’s prescription was put forth by six respected economists, whom Indira Gandhi ignored, in spite of powerful support by C. Subramaniam and T.A. Pai of her Cabinet. In 1991, the attempt succeeded, thanks to the great shock of mortgaging national gold stock under the Chandra Shekhar-Yaswant Sinha dispensation.
There are two other vital recommendations. The first concerns the labour laws so that the weekly working hours are increased from 48 to 60. In other words, the eight-hour working day is to be consigned to the dustbin. One may recall that the working class achieved this after a prolonged struggle and a lot of sacrifice during the 19th-20th centuries. The second is about allowing capitalists to down the shutters of their factories whenever they wish, without any restraint, and shift their investments somewhere else in search of more profits without caring for the workers who may face unemployment and loss of their dues and terminal benefits. To quote the Survey,
Either introduce a separate section on Bankruptcy in the Company Law or introduce a new bankruptcy law that facilitates exit of old/failed management as expeditiously as possible.
Obviously, both these recommendations, if implemented, will increase the number of the unemployed, not to speak of the creation of new job opportunities to give the able-bodied to participate in the creation of national wealth and honourably earn their living. If these two recommendations are accepted, they will lead to great socio-political unrest and bring the doom of the UPA Government because there is no autocratic Pinochet or Suharto, but adult franchise in the country and the labouring masses are conscious of their interests. They cannot be misled by any propaganda blitzkrieg through the print and electronic media. The previous government learned this to its dismay when it miserably lost power in spite of its loud propaganda that “India was shining”.
In the end, it is too early to say that Uncle Miltie has finally displaced Uncle Nehru. If one looks at the recent history of Indonesia, Chile, Argentina, Brazil and so on, Uncle Miltie is not going to succeed for long. Till now, there is no example to show that any country in the world has succeeded in building a prosperous and vibrant economy by following Uncle Miltie.
Dr Arun Kumar dissects the budget and the speech in more detail.
There are also constituencies that have got much without any fuss or mention. These are the favouri-tes of the government, like the rich and the corporate sector. The tax expenditures to the corporate sector have gone up by Rs 39,000 crores (p. 58, Revenue Budget), without even a mention in the speech. While not changing the structure of corporate taxation means not giving further concessions, it also implies not tampering with the massive subsidies given to this sector which now will amount to Rs 2,78,000 crores. In contrast, the direct subsidies to the poor, like on food, employment guarantee scheme and housing, will not amount to Rs 50,000 crores. The disparity is glaring considering that the subsidy to the corporate sector will benefit about one per cent of the population while the subsidy to the poor is shared by about 50 per cent of the population. Continuing with the SEZ policy and not announcing any changes in it is also continuing the massive concessions granted to the corporate sector.