TCS Daily

Turning Communists Into Capitalists -- and Vice Versa?

By Robinder Sachdev - June 7, 2004 12:00 AM

In the year 2020, the largest democracy in the world could be ruled by a communist leader who is a compassionate capitalist. For those startled at such a proposition, remember that India has the world's longest-serving elected communist government in the state of West Bengal, since 1977, and India also has the distinction of the world's first democratically elected communist government in the state of Kerala in the 1950s. And in the recent parliamentary elections held in May, communists have turned up in record numbers in the Indian parliament -- their career best of 62 seats in a house of 545. This begs the question -- is political discourse in India getting bogged down in class interests?

The ruling alliance led by the Bhartiya Janata Party (BJP) went into last month's campaign with a logical degree of confidence -- the economy is chugging along at a rapid clip, the peace moves with Pakistan seemed to be at last making the right noises, and the main opposition party (the Indian National Congress) was in a moribund state. The vast majority of media and analysts seemed to agree that Atal Bihari Vajpayee would continue to be at the helm of affairs.

The ballots told a different story. On May 13, the BJP-led alliance was voted out of power in India, and Congress found itself entrusted with the task of leading a coalition of the willing socialist and left-oriented parties. The importance of this result lies in the fact that this is perhaps the first time in India that a change in government will mean a stark difference in policies. For almost 40 years after independence in 1947, a change in government did not mean much -- policies were consistently framed in a paradigm which was left-of-center. Since 1991, first under the Congress, and then with the rise of the BJP in the late 1990s, alternative frameworks started to take root, culminating in the BJP's aggressive push towards market-friendly policies till 2004.

Of the various reasons cited for BJP's collapse, perhaps the most critical was its failure to craft relevant messages for differing segments of the electorate. By aggressively wooing the upper middle-class and elite of the country, the BJP indulged in what may be described as "in-the-face-capitalism" targeted at the upper strata of economic and intellectual India. On the other hand, there was no message targeted at the vast majority of toiling masses, and the only perception which filled this void was a spill-over of aggressive "in-the-face-capitalism" - a message which was actually relevant only for the elite.

The effect of the spill-over has been very succinctly captured by Jagdish Bhagwati and Arvind Panagriya, when they wrote in a recent op-ed in the Wall Street Journal that "the key to understanding the 2004 elections is the phenomenon of rising aspirations. But when the poor begin improving, then the 'revolution of rising expectations' is likely to arise". The elections of 2004 have catalyzed a concern for economic class, thereby leading to "in-the-face-class-interests" which are now engaging the attention of India's political leadership.

The revolution of rising expectations, rooted in class interests, is resonating in unlikely quarters in addition to its traditional constituencies. This week a leading news daily reported that the Swadeshi Jagran Manch, an affiliate of the Rashtriya Swayamsewak Sangh (the social organization closest to BJP's ideological basis), in a "surprising move, praised the Common Minimum Program of the Congress-led alliance and slammed the BJP for ignoring the development issue".

Development issues, and concern for farmers, artisans, labor, and the unorganized sectors, have emerged at the top of the agenda, and the political establishment is being squarely challenged to address them in a robust and forthright manner. Contrary to the perception that the mandate of 2004 is for putting the brakes on reform, the voters' verdict is in fact for accelerating the pace at which the toiling millions can participate and benefit from India's economic engine. Thus for any government in power the solution is even more reforms - especially ones that reach rural grassroots.

This inherent dynamic of Indian political economy -- an enhanced urgency for more reforms; and emergence of class interests as a political force -- is forcing the political elite of the country to try a unique experiment in compassionate capitalism. You can hear this in the "reforms with a human face" message promised by Manmohan Singh, the newly elected prime minister, and the widely respected architect of India's first foray in economic liberalization in 1991. To top it, India's most prominent and respected entrepreneur, Narayan Murthy, the founder of the software giant Infosys, minced no words when he recently told the BBC that compassionate capitalism is the only solution to poverty in the country.

"We believe that if India has to solve its problem of poverty, we have to embrace capitalism, ensure that jobs are created, and make sure that market-driven policies are accepted," he said. "However, to do that, the people who are the evangelists of capitalism, must conduct themselves in a manner that will appeal to the masses." That is the mistake which the BJP made -- it evangelized to the elite, neglecting to communicate with the masses.

Class interests are knocking on the door of capitalism in India, and the answer from the policy and intellectual leaders of the country seems to be evolving clearly towards compassionate capitalism. Be it a government led by the Congress today, or the BJP, or the communists of India, sustainable development and social entrepreneurship within the context of an enabling environment of free markets is the consensus in the country.

Grover Norquist is said to have once described Indian Americans living and working in the United States as "natural Republicans". If he were to comment on the India of 2020, would he say that it will be a nation of "compassionate Republicans"?

The founding principal of The Imagindia Institute at New Delhi, the author is also a founding member of the Washington, DC-based US India Political Action Committee, and an Adjunct Faculty in communications at American University, Washington, DC


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