Dismantling the Nehruvian Economy

By Cleofato A Coutinho
04 June 2014 21:40 IST

The complete dismantling of the core values of Nehruvian  Socialist Economics started on the 50th death anniversary  of Jawaharlal Nehru which happened to be the first working day of the new government. The success of the ‘Gujarat model’ campaign paled in insignificance, the reasons for defeat of the Congress which gave monumental laws like Food Security and Right to Education etc.

There are certain parallels in history. In 1971 Indira Gandhi won a decisive mandate based upon the slogan of ‘Garibi Hatao’. She won 352 seats. There was a yearning for a change. She proposed a new economy which was on aggressive socialistic pattern. The elections were fought on her decisions to abolish of privy purses and the nationalization of 14 major banks. The huge mandate brought in   authoritarianism and during the emergency, the word ‘socialist’ was incorporated in the preamble constitution.

 Narendra Modi has also promised a new economy and he got for his coalition 334 seats. The new economy proposed by Narendra Modi is a complete departure from the aggressive socialistic pattern proposed by Indira Gandhi. In which way the government was heading was clearly visible by the attendance of Mukesh and Anil Ambani, Gautam Adani and Anand Mahindra at the swearing in ceremony.

Indira’s aggressive socialism  was sought to be reversed by the Congress government itself led by P.V. Narsasimha  Rao with Manmohan Singh as his finance minister. For nearly quarter century now the country has been trying to change the aggressive socialistic platform to the right of center approach so well propounded by Manmohan Singh and backed by Chidambaram. However the National Advisory Council headed by Sonia Gandhi halted the approach towards the right and brought the centrist approach  to the economy. Sonia Gandhi is now accused of bringing in ‘status quo’ into our economy.

The National Rural Employment Guarantee Scheme, The Right to Education Act, The Food Security Bill, The Right to Information Act, The New Land Acquisition Act, Forest Dwellers Rights, Street Vendors and Midday Meal Schemes are some of the measures that are seen as the high points of the UPA regime. But these areas are seen as having halted the march of the corporate sector and in a way the yearning of the middle class which wishes to enter the elite club. The middle class and the neo middle class empowered by the social media platform sees the industrialization of Gujarat and the infrastructure in terms of network of roads as the future for the country. Every state must have a Shangai or atleast a Singapore – that is the dream world of the emerging middle class.

The clear mandate for is seen as a mandate for that change from the status quo to revival of the India story by aggressive right wing economic measures. Already there is talk of removal of the last vestiges of the socialist economy pushed by Jawaharlal Nehru and furthered by India Gandhi.  The verdict is clearly seen in corporate and economy circles to be in that direction. The so called Gujarat model of ‘minimum government, maximum governance’ is actually dismantling of the core values of the economy brought in the sixties and seventies.

In view of Gujarat Model being that focus point of the campaign, it is clear that the mandate will be seen as trust on industrialization and infrastructure thereby creating a new era of ‘India shining’. Already there is a demand to undo the new Land Acquisition Act and focus on Special Economic Zones by giving tax exemption, reducing government stake in Public Sector Undertakings and changing the National Highway models depending upon the demand. The public-private partnership is likely to come in almost every sector in a manner that our country has not seen.

Legal reforms cannot stay far behind, environmental and forest laws are likely to face a setback but the big area shall be labour reforms. The corporate sector wishes to have a new policy which will enable them to set up industry and hire the educated from the middle class on their terms. The ‘hiring’ element will certainly bring in element of ‘firing’. That is what industry wants. The labour regulations of the seventies which sought to protect the labour and their wages are bound to undergo a substantial change. In the new system the middle class and the neo middle class may benefit but the weakest sections for whom Nehruvian Economics was wedded to shall face a setback.

There can be no two opinions that the economy shall boom if the manufacturing sector takes a center stage. But in that process, to what extent can our economy go right is the issue. If we look at the election campaign, the UPA which banked upon critical issues like poverty and provision of rights hardly made those issues a matter of election discourse. Instead the serious debate was on the Gujarat Model without the social indicators in Gujarat coming into focus. That is seen as the India’s Middle Class yearning for a decisive rightist economic approach which is touted as the development without any discussion on impact on environment and without any debate on the weakest sections which do not matter in the proposed new economic order.

The public discourse  on Gujarat Model and the huge mandate is seen an approval of the reversal process started by Manmohan Singh in 1989 and halted by Sonia Gandhi in 2004. There is no doubt that there is an impression that the process has a stamp of approval given by the electorate. To what extent the new mandate which is seen as a mandate to fix India economy would help ‘Saab ka Vikas’ would depend upon to what extent the government takes a complete reversal of the old system.

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Cleofato A Coutinho

Cleofato Almeida Coutinho is a senior lawyer and one of the constitutional expert in Goa. A member of Law Commission of Goa, he also teaches at Kare College of Law in Madgao.

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