The return of Palaniappan
Chidambaram as the Union Fi
nance Minister and Induction of Eric J Gleacher Distinguished Service Professor of Finance at the University of Chicago Raghuram Rajan who was the chief economic adviser to the IMF, are significant—a triumph for the Fund-Bank lobby. Eight years back, Dr Montek Singh Ahluwalia left his lucrative job, the first director of IMF's Independent Evaluation Office, to take over as the deputy chairman, Planning Commission to strengthen the hands of Chidam-baram, a staunch defender of IMF-scripted reform programme in the interests of neo-liberal finance capital, headquartered in Washington.
Unlike his predecessor Pranab Mukherjee, who, despite having been an advocate of Fund-Bank reform, was not committed to weaken and decimate the mixed economy with public sector in commanding position unlike Chidambaram who castigated the Nehru-Indira era of mixed economy (with moral and material support from the erstwhile Soviet Union). In the Second Annual Harish C Mahindra Endowed Lecture at Harvard Business School in Massachusetts, USA in 2005, ‘Poor rich countries : The challenges of development’, Chidambaram bluntly stated, "For well over three decades after independence, India adopted a dirigiste model of economic development. The State was the principal driver of the economy and the economy itself remained closed to the rest of the world. In those thirty years, India's GDP grew at an average rate of 3.5 per cent. I call those years the 'lost decades'. That model exacted a price. It also left a legacy that, to this day, remains a heavy burden. The socialist jargon had pervaded all walks of life and, especially, all economic activity."
The anathema towards the Nehruvian approach is in the bantering tone, 'socialist jargon', as if it's a contagion for every photon of neo-liberalism. Chidambaram drew a tendentious divider between the pre-1977 period of Indira Gandhi as the PM and the years after her return to power in 1980. Ms Gandhi and her successor Rajiv Gandhi "made a brave effort to dismantle some pieces of the monstrous and rapacious structure that had been erected over the years", he asserted.
The capitalist path of development the Indian ruling class adopted after independence is markedly different from the Latin American capitalism, based on the dominance of foreign capital, a dependent course that caused 'development of underdevelopment' ( Andre Gunder Frank). Noted political theorist Sudipta Kaviraj, currently department chair of the Middle Eastern, South Asian, and African Studies department at Columbia University, termed the Nehruvian economic strategy as one of ‘creative capitalism' in his doctoral dissertation on the split and schism of Indian communist movement. This too is debatable. Some Soviet scholars in the 1970s inferred that any form of capitalist path in a developing or under-developed economy is a 'dependent' entity in essence. The debate remains unresolved. Creativity under conditions of dependence is doubtful, although relatively the Nehruviar way was a much better option, if not desirable in the ambience of nationalism.
However, Kaviraj's viewpoint is partially endorsed by the New Left political economist Samir Amin, in an essay, India, a great power, in Monthly Review. The Congress governments in the first few decades "implemented a national plan that, typical of its time, influenced by the victories of the national liberation movements of Asia and Africa after the Second World War", Amin wrote, despite having been "undermined by the ambiguities that characterized the liberation movements themselves ...were anti-imperialist inasmuch as they fully understood that modernization and development required national liberation first of all." This model helped the nations of Asia and Africa to establish themselves as equal partners and by this means progressively overcome the handicaps of their "backwardness."
However, the objective of achieving economic freedom with benefits trickling down in an equitable pattern failed due to basic commitment to capitalism that aggravated inequalities and economic backwardness of majority of Indians. Amin noted but admitted, "In spite of their limitations, the successes of Jawaharlal Nehru's and Indira Gandhi's Indian populist national plan were significant both in economic and political terms." There he differed with the Maoists and Naxalites who doggedly maintain that Indian ruling class is of 'comprador bourgeoisie'. The CPI(M) and CPI agree with Amin's characterization and so the two CPs have an imperative to tell the masses following the INC that the present INC leadership has been systematically demolishing the fruits of Nehru-Indira's 'national populist plan' whose foundations were laid by the Mahalanobis Two Sector Planning Model, an independent variant of Feldman Model, the conceptual basis of Gosplan in the Soviet Union in the 1920s. The Malalanobis Model led to the Second Five Year plan (1956-61) and was in sync with the Industrial Policy Resolution of 1956.
The acceptance of IMF-prescribed Structural Adjustment Programme was the beginning of 'comprador capitalism' whose symptomatic manifestations were extensive dilution of state holdings in profitable public sector undertakings such as the ONGC, SAIL and BHEL. Among the New Left academics, Amin was perhaps the first to identify 'comprador capitalism' in post-independent India. He characterized the NDA regime as 'Hindu compradore right'. The NDA was more rightist than the previous Congress regime with P V Narasimha Rao as Prime Minister and Manmohan Singh as the FM as it was committed to schematically destroy the public sector. It was the first national government in history to set up a ministry for disinvestment and sold away profitable PSUs such as the VSNL, Balco and Modern Bakeries to the private companies among whom was the Indian subsidiary of one of the top ten MNCs the world over. The saffron sign was manifest in the attempt to replace the historiography motto of the Indian Council of Historical Research with an obscurantist and majority-communalistic approach. The UPA-I regime partially reversed the NDA's plan to gradually abolish the public sector and began revival of sick PSUs like the IISCO but kept the disinvestment department alive (thanks to the constant pressure from the Left on whose support the government survived for over four years). That was how the INC leadership kept the Fund-Bank lobby in good humour.
Vol. 45, No. 13, -Oct 7-13, 2012
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