Democracy and Development: India 1947–2002
It gives me a particular pleasure to be giving the Narayanan
Oration at The Australian National University. President Narayanan is a perfect example of how
despite numerous obstacles merit will shine through. His life exemplifies the progress India has
made, warts and all, over the entire 20th century but especially
since Independence. Names of Harold Laski and Jawaharlal Nehru play a major part in his early
story. On a personal note, he has also showed me immense kindness but perhaps more because I
teach at his alma mater than for anything personal to me.
It is also a great pleasure to come back to the ANU where I twice spent a
term teaching in 1980 and 1984 and where I claim many friends. Australia has taken a great
interest in South Asia as the centers here and in other Australian universities testify.
It is eleven years since India had the economic shock of its
life and had to rethink its economic policy and rearrange its economic institutions. It was
nearly ten years ago that I had the opportunity to welcome the drastic change and wish that it
would be more rather than less drastic, not a popular position among my economist friends in
India at that time (Desai 1993). This is thus a good opportunity to see how far India has got
in its response to the shock of near bankruptcy in early 1991.
But a lot more has also happened to India in its political life since
1991. Indeed it is hard to say whether it is the political or the economic map that has
changed more in the last ten or more years. In various articles written over these years I
have also tried to chart the political dynamics of the 1990s (see various references in the
Bibliography). While there was always implicitly a political background to my economic
comments and an economic background to my political comments, I would like to take this
opportunity of the Narayanan Oration to try a synthesis.
The separate strands which need to be synthesized are as follows:
- In its first phase lasting just over three decades (1947–1980), India’s economic
policy was driven by a model of national self-sufficiency. It was built around, indeed
pioneered, an Import Substitution Industrialisation (ISI) strategy. It also chose (and this
is separate strictly from ISI) a capital intensive programme hoping that matters of
employment creation, consumer goods supply especially foodgrains would take care of
themselves. Political developments in the mid and late 1950s forced a situation in which the
Planning authorities had to reverse the neglect of agriculture. The Green Revolution which
occurred by accident in the 1960s corrected the earlier urban biases of the Second and Third
Five Year Plans but the poor performance of the manufacturing sector — in terms of
inefficiency, excess capacity and low quality — persisted in both the private and public
organized sectors. The growth rate was low relative both to early aspirations (Bombay Plan
for instance) and to the rates achieved by other countries. This was the so-called Hindu
Rate of Growth. 3.5 per cent per annum and 1.3 per cent per capita.
- Over this period 1947–1980, India’s political life exhibited a lot of stability and
a solid, indeed unique achievement among post colonial polities in creating and sustaining a
vibrant political democracy. Single Party Dominance nurtured this democratic life except
during the infamous Emergency which was brief and was reversed by that very democratic
process it tried to subvert. The dominant vision of nationalism was built around secularism,
non alignment and socialism. There was however beginning to be an assertion of the various
regional, caste and religious — by and large ‘ubaltern’ forces — in the federal polity.
Indeed the Janata Government of 1977–1979 reflected this.
- During the 1980s, there was a decade of restoration of Single Party Dominance but a
relaxation of the imperative of economic self-sufficiency. There was borrowing from abroad —
from the IMF, from foreign commercial banks and then from NRIs. But the economic
institutions of permit-license Raj did not change and there was no relaxation of domestic
economic policy in parallel with foreign borrowing. Growth rate went up to 5.5 per cent, 3.5
per cent per capita.
- The decade of the 1980s stored up much trouble for political life later on.
Secularism was compromised into a parallel populism with accommodation of the orthodoxies
of the two major religions as Rajiv Gandhi’s decisions on Shah Bano case and the shilanyas
at Ayodhya showed. The subaltern elements continued to grow powerful at regional levels.
- The 1990s ruptured the old model in two ways. Economic dirigisme — often mislabeled
socialism — became untenable as India could not repay its commercial borrowings without
drastic reform. At the same time the end of Congress dominance unleashed forces —
implementation of the recommendations of the Mandal Commission with all it meant about
valorization of caste distinctions, rise of the Hindutva parivar, dalit militancy — which
ended for the decade and more any hope of a single party government. In a strange
combination, the arrival of globalisation saw India modernise and liberalise on the economic
front but become less secular and more ethnically divided than before politically. Modernity
in India thus took a different path from what its champions in the early days after
Independence had charted for it. It is not a secular socialist democratic India but a
liberal, increasingly Hindu nationalist democratic India that is shaping its own future.
- On the economic front the reform forced upon India by the trauma of 1991 has proved
irreversible and effective. Despite much hesitation, the reform process has persisted and
raised the growth rate nearer to 6.5 per cent for GDP and 4.5 per cent per capita. The
liberalization process has been slow relative to countries of Eastern Europe but it has been
consensual. Even as politicians compete in populist rhetoric about protecting the jobs and
the poor, it is clear that no possible combination of parties exists which upon gaining
power would or even could reverse the liberalization process.
- There is one solid continuity despite the change in party dominance and in economic
philosophy over the last fifty-five years. This is the nationalist programme of a militarily
strong India. Even as India preached peace and non-alignment in 1950s it built up its
military production capacity especially its atomic and nuclear research. Whether Congress or
BJP, whether Nehru, Indira and Rajiv Gandhi or Vajpayee, the determination to make India
militarily strong has been common. There is no peace party in India. Indeed, it can be seen
now that the ISI strategy and the insistence on self-sufficiency arose from a defence policy
that meant India to be a powerful regional power. The election of President Narayanan’s
successor has crowned that policy with official recognition.
It is this cluster of trends that I wish to explore. The decline of
secularism and socialism, the rise of liberalism and religiosity, the persistence of
nationalism as a force even as its nature has changed. Democracy has been the universal
solvent in this process. In order to appreciate the importance of Indian democracy, it is
necessary to go back to the early history of Independent India.