6 Perspective on the nature of Indian State
Dr. Jatinder Singh
Perspective on the nature of Indian State: An Introduction
Abstract
The module is in the form of an introduction to the paper on Perspective on the nature of Indian State. The module is divided into five parts. The first part analyses the Marxists perspective on post-colonial Indian State. It focuses on the relations of the State with divergent classes in India. The second part talks about the politics of developmental planning and the model of development. The idea of democracy, free market and minimal state is the theme of the third part. Fourth part discusses the coercive nature of Indian State in order to implement the given model of development. The fifth part refers to the ideas of Gandhians regrading State, centralisation and swaraj.
Introduction
After independence, the post-colonial state was welcomed by the majority of the intellectual fraternity. They regarded the Indian Constitution as sacrosanct and wished that to resolve conflicts and fulfil demands the people should explore various constitutional methods rather resorting to direct action. They advised the people to develop habits of obedience and respect for authority (Ghanshyam Shah 2004: 18). This Indian State was considered as the prime mover in performing the social, political and economic wellbeing of the Indian masses. The State was accepted as an activist State, which justified the tremendous power it has acquired in order to intervene in the personal and the collective lives of its people. The process of social engineering became the main agenda of the post-colonial Indian State (Neera Chandoke 1991: 191)
Indian State was assigned with the responsibility to eradicate poverty, all sorts of social evils, to improve agriculture, establish industry, to provide education and employment, to bring prosperity to the large Indian masses and many more tasks. In other words, the State was looked upon as a supreme entity to perform the task of progress and development. The State has assigned itself the responsibility to build Indian nation (Javeed Alam 1999: 147-166). It gained its legitimacy and acceptability from the fact that the dominant section of the freedom movement came to power and formed the government. The global consensus on either welfare State or Soviet Union’s model of command State further strengthened the idea of an interventionist State.
But there were few dissenting voices also, who questioned the enthusiasm attached with the Indian State, but from altogether different perspectives. First, the Ghandhians were unhappy with the very notion of kind of centrality allotted to the State (Ibid: 64). Second, the Marxists and Communist Party of India (CPI) were critical of the nature of Indian State and stated that the British domination has not ended; only the form of domination has changed. The incidents of general strikes, armed insurrections by the workers of cities and Telangana uprising led by the working class in alliance with poor and landless peasantry were the living examples (Kalpana Wilson 1994: 252). The Telangana uprising was supported by the CPI, but later on withdrew its support and decided to participate in the first general election in India.
With this brief introduction of enthusiasm and despair, let us discuss the nature of India State from different perspective. I shall begin with the Marxian perspective. For Marxian scholarship, the analysis of nature of dominant and ruling classes became the most important task to understand the above mentioned revolts and the general nature of the State. Through the class analysis of the Indian society they were trying to understand the nature of Indian State.
Marxist Perspective
The State has always been the central category of analysis for the Marxists. While dealing with the post-colonial States, the Marxist academic fraternity has faced certain fundamental questions. The first and foremost question was about the nature of the State in these post-colonial societies. Does it differ from the bourgeois-democratic States that emerged after the industrial revolution in Western Europe? To what extent it has attained the independent nationalist character of its own? Or to what extent it is still being influenced by the erstwhile colonial powers? To make sense of these queries, the scholarship started analysing the nature of class formations in the colonial and post-colonial societies. What relation the State is having with these classes? Does the post-colonial State an instrument of a single class? Does the number of classes share their interests and jostle with each other to dominate the State?
There is vast range of Marxist writings about the Indian State from the works of academicians to the documents of left political parties. Further, these parties included wide spectrum ranging from those who are part of mainstream electoral politics to those who believe in and working for revolution. From this ocean of Marxist writings, I shall try to bring forward some of the works in this chapter.
Looking at the role of Indian State, Hamza Aalvi argues that it is playing the role of a mediator between the interests of foreign and national capital. The words about the ‘ideals of socialism’ should not obscure the fact that the Indian State has clear commitment to the interests of the propertied classes as a whole, while maintaining a degree of neutrality as between foreign and Indian capital. In this process, the Indian businessmen had realised that anyone with a foreign partner stood a better chance of getting approval of an industrial project than those without one. As the foreign firms were technologically advanced the technical collaboration agreements introduce a wholly new mode of overseas expansion by metropolitan1 capitalism and establish an unequal partnership between it and the indigenous bourgeoisie.
Foreign aid plays considerable role in strengthening the unequal partnership between foreign and Indian capital. Alavi reaches at the conclusion that foreign capital establishes its dominion over weak native bourgeoisies, blocks the paths towards technological progress, drains the colonial economies of potential resources for economic growth and imposes a politically determined pattern of aid. He regards this process as ‘New Imperialism’ which was fully reflected in the political attempts of metropolitan capitalism to maintain its world supremacy (Alavi, 1966).
He further extended his argument of post-colonial State as mediating force which has attained the status of relative autonomy. The central proposition, he emphasises, is that the state is not an instrument of a single class. It is relatively autonomous and it mediates between the competing interests of the three propertied classes, namely the metropolitan bourgeoisies, the indigenous bourgeoisie and the landed classes. It also acts on behalf of all these classes to preserve the social order in which their interests are embedded. It is the ‘military-bureaucratic oligarchy’, which plays the mediating role on the behalf of the State. As this apparatus was carried along even after independence, the post-colonial societies inherited an over-developed apparatus of State, which controls and regulates the indigenous social classes. In the post- colonial States where democratic forms of government, operate, like in India, politicians and political parties too became the third partner and component of this oligarchy.
For Alavi, the ruling Congress party is by no means a party of a single class; it participates with the bureaucracy in mediating the demands of competing propertied classes which at the same time participating with it in using State power to uphold the social order which permits the continued existence of those classes, despite the socialist rhetoric of the Congress party (Alavi, 1972).
Suniti Kumar Ghosh highlights that the Indian State lacks independent character of its own and is comprador in nature. He comes to this conclusion by analysing the nature of emergence of Indian bourgeoisie before and after independence. He draws the distinction between the national and comprador bourgeoisie in India (Ghosh 1985: IX). The comprador bourgeoisie has served as agents of imperialist capital. Inspite of certain minor contradictions, its interests combined with imperialism. This class grew big under the fostering care of imperialist capital and has always served as an ally of imperialism in its struggle with the people. The comprador section constitutes the anti-nation within nation (Ibid: IX). According to him, instead of seeking to break the imperialist stranglehold, the Indian ruling classes have created conditions for the fabulous expansion not only of the branches and subsidiaries of transnational corporations but also of the joint ventures in collaboration with them. They have an insatiable appetite for foreign capital and technology (Ibid: XVII).
On the other hand, the interests of national bourgeoisie were not interwoven with those of imperialist capital and it sought to develop independently. It has antagonistic contradiction with imperialism and was opposed to it (Ibid: IX). It has this relationship not only with imperialist bourgeoisie but with the Indian comprador bourgeoisie also. He upholds this distinction even in the post-colonial Indian society and argues that the Indian ruling classes consist of this comprador bourgeoisie. The national bourgeoisie has suffered heavy losses during the colonial period and continues to be marginalized by the Indian State. For Ghosh, the disabilities from which the national bourgeoisie suffered have not disappeared after the end of the direct colonial rule rather they have grown worse, because of the policies of the Indian State (Ibid: XVI)
T. V. Sathyamurthy also shares this concern of Indian State’s dependence on foreign capital. He acknowledges the fact that the Indian capitalist class has emerged during the colonial period from the complex interaction with colonial power, on one hand, and the trading, landed (new zamindar class) and usurious components of the propertied classes (which constituted a class of middlemen in facilitating the process of East India Company’s economic domination of India), on the other. Along with these classes, in the countryside the pre-capitalist relations (i.e. feudal relations) of production gained a new lease of life, with the advent of the British colonial power. But unlike Ghosh, he believes that there was a contradiction between the British colonial power and the Indian capitalist class due to the struggle for control over the Indian market (Sathyamurthy 1997: 134).
As the Indian capitalist class was very much part of the Congress party, it adopted self- reliance as the main plank of India’s economic development well before independence. It continued in to independent India, as a result, the first half of Jawaharlal Nehru’s Prime Ministership, i.e. 1947 – 55, witnessed a relatively radical economic policy (Ibid: 137). But, the Indian economy had ceased to grow and become stagnant and retrograde to an alarming degree by the end of 1960s. India was facing the agricultural crisis of the mid 60s, the military crisis of 1962-65 and the industrial crisis from 1965 onwards. These series of crisis, according to him, led to the transition from a self-reliant strategy of inhibiting and restricting foreign investment to the collaboration with the foreign capital through a substantial expansion of aid and private capital investment, mainly consisting of MNCs or TNCs’ (Ibid: 133).
The principled opposition to foreign private capital has been relegated to the status of ‘a colonial hangover’. Within two decades of independence, private foreign capital came to play a considerable part in the organized sector of the Indian economy. (Ibid: 136). It means that the Indian subcontinent’s (rather State’s) outlook is conditioned by the relationship between Indian manufacturing houses and their multinational partners. (Ibid: 140)
For Sudipta Kaviraj also there is no single class that dominates the Indian State, but a ‘ruling bloc’ or a ‘ruling coalition’ of three distinct classes. First, the bourgeoisie, particularly, it’s aggressive and expanding monopoly section. Second, the landed elites that experienced significant changes due to the processes of agrarian transformation since independence. Third, the bureaucratic and managerial elite, especially, high bureaucratic elite and industrial management groups. All the three classes don’t share equal power, rather arranged in evidently hierarchical manner. This ruling coalition is being dominated by the bourgeoisie, as it is only class that is able to develop a coherent and internally flexible development doctrine.
As far as, landed elites are concerned they cannot develop as a leading class without any alternative coherent programme to offer and mainly work as a relatively more reactionary pressure group. Sudipta critiqued the traditional Marxist scholars of coalition theory for underestimating the significance of bureaucratic and managerial elite as a crucial element in this coalition of classes. Although, according to him, this class is not bourgeois in the sense of any involvement with production process, but it is strongly affiliated culturally and ideologically to the bourgeois order. It provides theory and institutional drive for bourgeois rule.
It mediates not only between the ruling coalition and other classes but also mediates crucially between the classes within the ruling coalition themselves. If any of these classes leave the ruling bloc, due to serious dissatisfaction, it would lead not only to alteration in the structure but threat (of collapse) to the structure itself. To avoid this disintegration, the coalition always needs a network of policies, rights and immunities derived from both constitutional and ordinary law, which would set up the terms of this coalition and manner of distribution of advantages (Kaviraj 1988: 2431)
Michal Kalecki has come up with the concept of ‘intermediate regime’, in which the alliance of ‘lower middle class and rich peasantry controlled the State power’. The first reason for this conclusion was that at the time of independence, on one hand, the lower middle classes were large in number, and on the other, the contribution of indigenous capitalists was limited as economy was controlled primarily by the foreign capital. Secondly, as the State has taken the responsibility of development, it became the major force for investment to expand the productive potential of the country without creating any danger to the existence of small firms.
With the rise of public sector the youth of lower middle classes would get employment in large numbers and align with ruling class. In rural areas, the land reforms have strengthened the class position of rich peasantry by weakening the feudal landowners. The classes antagonistic to these ruling classes were defined as from above, the upper middle-class allied with the foreign capital and feudal landowners and from below the unorganized rural and urban poor (Julio and Assous 2010: 181-182).
For K. Balagopal, the Indian State inherited two major responsibilities; one was to keep the diverse bunch of propertied classes in India together, and the second was to gain the loyalty of the extremely restless mass of peasantry and workers. To materialise these responsibilities, on one hand, the Indian State worked for building a viable polity and necessary institutions which would hold together the diverse sections of the ruling classes. On the other hand, it has created the network of patronage to attract the loyalty of the masses. It has further worked to build the industrial and infrastructural base required for the enrichment of the ruling classes (K. Balagopal 2011: 49). The bunch of these classes comprises of, ‘the comprador-monopolistic bourgeoisie class and the provincial propertied classes.’ The provincial propertied classes consist of ‘rich peasantry along with the urban trader-professional-financer-contractor class’ (Ibid: 208). The interests of rich peasantry are no longer unambiguously opposed to the interests of the urban traders (ibid: 209).
The nature of Indian economy, for Bharathi and Vijay, is semi-feudal and semi-colonial. For a Marxist, the nature of economy leads to the nature of State. By this formulation, the Indian State is the one in which ‘the agriculture is semi-feudal and industry is semi-colonial and both together generating the system.’ According to them, semi-feudal and semi-colonial is a single phrase describing a long standing well-kint alliance, reflected in all walks of life, through which both the landed gentry and capitalist class (in its imperialist phase) get the advantage. To prove this theorization, they focus on the changes in rural agrarian structure. In the agriculture sector the State was unwilling to implement the land reforms that would have able to completely dismantle the feudal structure in rural society.
Instead, it attempted to develop agricultural production through large dams, green revolution and high yielding variety crops, good roads etc., without changing the fundamental land relations. This led to the creation of a new class in rural India may be termed as ‘non- cultivating peasant households’. It is a class who is there in the village, who is neither prepared to sell the land nor to cultivate, but to give the land on tenancy to other cultivators. The major interest of this class in agriculture is to draw a rental income from land.
They distinguish this class from the rich peasantry which involves in land more than getting rental income and actively engage with labour force. It does not supply labour and has no indirect demand for labour. It remains outside the agricultural activities, but dictate relations in the village (Bharathi and Vijay 2011).
By reviewing some of the Marxian literature, I shall say that they all agreed to the fact that the Indian State has not emerged as the bourgeoisie-democratic States after industrial revolution, particularly, in Western Europe. Secondly, Indian State is not dominated or ruled by a single class but by a combination of classes. The difference starts from this point, as they differ with regard to the nature of ruling classes.
Developmental State
Let us now move from the nature to the functions of Indian State. One of the important functions was to get rid of economic backwardness. Economic exploitation by the colonial rule became one of the major critiques of the Indian freedom struggle. It became the dominant argument that colonial regime is hindering the further development of India. The colonial rule was regarded as an exploitative force creating and perpetuating a backward economy. The colonial rule became illegitimate due to exploitation, drain of national wealth, destruction of productive system and creating backward economy (Partha Chatterjee 1993: 203). It was argued that economic backwardness was a consequence of colonial regime, which itself became cause of other forms of backwardness (B. Zachariah 2005: 5). The resolution of Congress party in May 1929 stated that ‘in order to remove the poverty and misery of the Indian people and to ameliorate the conditions of the masses, it is essential to make revolutionary changes in the present economic and social structure (Ibid: 217).
Emphasising upon the economic exploitation, Jawaharlal Nehru in his notes, as a Chairman of National Planning Committee, said that political domination is obvious enough, but a far more dangerous and insidious thing is economic domination. This could only be overcome in a free and democratically fashioned India, where no external authority can interfere or obstruct nation’s work (Ibid: 216). The establishment of sovereign national State was the primary goal in which economic and social reforms would be performed. These reforms would be ensured only by effectively reorganizing the economic structures of the society, which in turn is possible only in a free and independent India (Partha Chatterjee 1986: 131, 133).
On the eve of independence, India might be characterised as a nation with little industrialisation, low agricultural output, low figure of national per-capita income, very slow economic progress, considerable unemployment and underemployment (Charles Bettelheim 1971: 5). The new Indian State was assigned the task of development of one of the poorest nations in the world in 1947. The developmental ideology became a consistent part of the self- definition of the State (Partha Chatterjee 1993: 203).There was an overwhelming consensus among several sections of the society, mainly vast range of political leadership, businessmen, economists, administrators etc., that the development in possible only in a planned economy.
The continuity of this agreement can be traced from the colonial to the post-colonial India. The Congress Working Committee, in 1937, has recommended to the Congress ministries for the appointment of a committee of experts. The committee would be assigned the responsibility to do the necessary planning in order to resolve the urgent and vital problems of the Indian society. The recommendation was materialised in 1938, when the National Planning Committee was along with its number of sub-committees established under the chairmanship of Jawaharlal Nehru.
The second important document called as ‘Bombay Plan’ was prepared by the distinguished industrialists of India in 1944. This Plan envisaged power, mining and metallurgy, engineering, chemicals and fertilizers, armaments, transport and cement as the basic industries and demanded government initiatives in their development. It also talked about government’s responsibility to make India self-sufficient in food and to promote cooperative farming to resolve the problem of fragmentation of land holdings. Apart from these areas the State intervention was unwelcomed and looked upon as encroachment of private enterprises’ territory. It we look at the people, institutions and the ideas which influenced the decision-making process, they were mostly either industrialists or committed to private enterprise by conviction.
It is interesting to note that by this period even the colonial rule started talking about the State planning and established under Sir Ardeshir Dalal, a leading Indian industrialist, the Planning and Development Department in 1944. The provincial and state governments were also asked to establish their own planning organizations. Their task was to draw five-year plans. To formulate general guidelines the Reconstruction Committee of the Council, under Viceroy’s chairmanship, published Second Report on Reconstruction Planning in 1945. This document proposed a fifteen years perspective plan embodying a more detailed plan for the first five years.
It further stated that twenty major industries were to be brought under the control of central government along with responsibilities to develop transport facilities, power production, scientific and industrial research and technical education. Apart from this, other basic industries of national importance were to be nationalized if the private capital was not coming forward for their development. It not only recognized the need for large scale industry but visualised the State ownership of these new and necessary enterprises in case private capital is not forthcoming. Among the aims of planning according to this report was the eradication of glaring anomaly of generation of huge wealth on side and abject poverty on the other side (Hanson 1966: 37, 38).
The processes of planned development continued in post-colonial India with the establishment of Planning Commission in February 1950. It was felt that the basic questions like how much to save, where to invest and in what forms to invest could be handled with the help of a plan (Sukhamoy Chakravarty 1988: 10). It was consisted of eight members, which mostly have the long and varied experience of serving the administration during British colonial regime. This is the reason, R. Choudhury argues that the structure of first Five Year Plan is based on the Bombay Plan, its inspiration is derived from the National Planning Committee and its contents are largely from the official reconstruction programmes (quoted in Hanson 1966: 44).
The central objective of planning, according to the first Five Year Plan (1951-56), was to initiate the process of development, to raise the standards of living and providing new opportunities for the people to get richer and more varied life. The underdeveloped country like India needs planning in order to utilize more effectively the available potential resources, increase production, and offer opportunities to all for employment in the service of the community. It further stated that the economic planning should not be viewed in a narrow sense of using technology but in terms of developing human faculties and building institutional framework appropriate to the needs and aspirations of the people.
According to V K R V Rao, the first and foremost task in front of Planning Commission was to ‘halt inflation, remove most acute physical shortages and address the deficiencies created by the partition’ (V K R V Rao 1952: 6). By looking at the classification of expenditure in the first Five Year Plan; the sectors of agriculture and rural development, irrigation and power and transport and communications emerged as the priority sectors. In agriculture sector, the pattern of distribution of land was regarded as primary hurdle in improve agricultural growth. Hence, the need for land reforms was felt by the plan. Huge allocations were granted to the large scale projects like Bhakhra Nagal Dam, Hirakund Dam. Another important area was to raise the very low level of savings. As the basic level of spending was already very low, the plan can’t suggest lowering it further. The need was felt to raise the total number of employable people in India.
But the second five-year plan, under the guidance of P C Mahalonobis, shifted its focus on to the heavy industries that continues till present times. Broadly speaking, till the period of early 1980s the sectors like agriculture, trade and industry were largely left in the private hands. The State has controlled the areas of heavy industries, industrial infrastructure, trade regulations and made certain crucial interventions in agriculture sector (NCERT 2007: 56). It has also performed the role of economic regulation like price-fixing, wage control, supervision of foreign trade and exchange, rationing of some important but scare products, legislation on the formation of new companies and on financial market issues. It involved itself in the creation of large new public sector and various state organizations designed to give financial aid to private enterprise (Charles Bettelheim 1971: 145, 146). It is being called as the State capitalism. Hence, the model of development has emerged as of a ‘mixed economy’ with both public and private sectors.
But, it is interesting to know that the State has intervened only in those areas where the private sector was not prepared to invest (NCERT 2007: 57). The private sector was unwilling to invest in the industries that would take some time to generate profits. It was interested in quick and more profitable ventures. It was only possible with the collaboration of foreign private capital in terms of investment and importing industrial technique and technical knowledge (T V Sathyamuthy 1997: 136). Just after the first two years of independence, the Indian government has allowed fourteen new joint ventures with foreign majority ownership. The six among them owned American capital and rest was of British capital. By this time, the principled opposition to the foreign private capital was identified to be a hangover from the colonial past. The foreign private capital was considered essential to increase national savings, to secure technical and industrial knowledge and capital equipment for production (S Chaudhury 1984: 11, 12).
This reconciliation with the foreign private capital, as per Chaudhary, was paralleled with the change in the attitude of Indian bourgeoisie. He refers to the resolution of Federation of Indian Chamber of Commerce and Industry (FICCI) in March 1959, which firmly favoured foreign investment for agricultural and industrial growth (Ibid: 18). But the basic industries (like power, supply of raw material, intermediary products, and equipment, spare parts etc.) were not developed enough to keep pace with the industrial expansion, resulted in disproportions in industry. It has resulted in the chronic crisis in Indian economy manifested in the lack of mobilization of unemployed productive forces (both material and human resources), stagnating production and speculative investment by private sector to gain quick profits (A G Frank 1977: 463). It also resulted in the lack of self-reliance and more and more dependence on foreign financial aid and investment (Charles Bettelheim 1971: 359).
Coming to the agricultural sector, the land reforms remained and still are the distant dream for the rural poor peasantry and landless labourers. The government was mainly concerned with the increasing production of the food grains and introduced ‘green revolution’ with high yielding variety seeds and fertilisers, which demanded well fertile land with proper irrigation facilities. It means that rather than giving support to the farmers with few facilities and less fertile land, the state policy focused on the already well-off farmers. It means, the rich peasant and large landholders were the largest beneficiaries of this process (NCERT 2007: 66). It has further widened the gap between the poor peasantry and landless labour on one hand and the well of peasant section on the other side. The model of development adopted by India after independence was neither able to reduce poverty in substantial terms nor was able to generate employment.
The problems of inadequate domestic resource mobilisation, increasing poverty, price rise, unemployment, etc. continued in the decade of 1970s. It is taking placing in a period, which has also witnessed the promises and programmes like ‘garibi hatao’ and a word socialism that symbolises pro-poor policy regime was added to the preamble of Indian constitution. Above all, the regime has imposed emergency on 26th June 1975, which lasted till 21st 1977, to deliver to the poor and downtrodden. The model of development till 1980s was consisted of large public sector units, heavy industry, big dams, roads and mines. Dams were considered as the temples of modern India (RDF 2007: 3).
But these temples of modern India, over 1,600 major dams and tens of thousands of medium and small irrigation projects, have displaced with estimates from 100 to 210 lakhs people in five decades period after independence. The Five Year Plans have displaced nearly five lakhs people each year mainly as a direct result of land acquisition. This figure does not include displacement by non-plane projects, changes in land-use, acquisition for urban growth and loss of livelihood caused by environment degradation and pollution (Vijay Paranjpye quoted in Smitu Kothari 1996).
The process of planned development, which was considered as the panacea for backwardness, has displaced roughly from 110 to 185 lakhs people in the period of 1951-1990 (Fernandes & Thukral quoted in S Kothari). Even these figures do not include the displacement of large number people who are not being considered as ‘project affected’, those displaced in urban areas and suffered by the processes of secondary displacement. If these numbers put together, the displaced since independence would be as high as four crores (Ibid: 1477). The worst affected community in this nation-building is the tribal as it is estimated that the tribal communities consist of 40% out of total displaced population, till 1990, although tribal population is roughly 7.5% of India’s total population (29th Report of Commissioner of SC/ST quoted in RDF 2007).
With all the economic and political crises, India entered into the period of 1980s. Rather than generating domestic resources, it opted for further deep integration with foreign technology and foreign capital as a panacea of all ills of economy and society. On one hand, the governments continued with huge foreign borrowings, deficit financing and indirect taxation (Nandita Shah (et. al) 1994: WS-39). On the other hand, they were progressively reducing the direct taxation rates. The problem was further heightened by the large spending on the defence, especially in the second half of the 1980s. India topped the list of developing countries in defence spending. Much of this export of weaponry was financed by borrowing from abroad. As a result, the fiscal deficit was growing steadily in to huge proportions. The internal debt of Indian government rose from Rs. 485 billion in 1980-81 to Rs. 2,830 billion in 1990-91.
Therefore, the interest paid by the government on its debt has almost doubled from 10% to 19% of the total central government expenditure (Bhaduri & Nayyar 1996: 22). This State made economic disaster brought India, in early 1991, closer to default in meeting its international payments obligations. The balance of payment situation was almost unmanageable and the fiscal crisis was acute.
Neo-liberal state
At this crucial juncture in 1991, Dr. Manmohan Singh, the then finance minister in the Congress party led minority government delivered his budget speech and reiterated the globally accepted argument that there is no alternative (TINA) apart from opting for privatisation and liberalisation. In his speech, Dr. Manmohan Singh warned India that there is no time to loose. Any further delay in macroeconomic adjustment (i.e. economic reforms) would make the balance of payment situation unmanageable and inflation would exceed beyond tolerance. The task ahead for him is to progressively reduce the fiscal deficit of the central government, reduce the revenue deficit and current account deficit in the balance of payment.
The solutions proposed were to liberalise the policy regime for direct foreign investment, adopt austerity measures to encourage accumulation of capital for the creation of wealth, reduce fiscal deficit by reducing the expenditure and increasing income of government, reduce number of subsidies, etc. What followed afterwards was the phenomena unfolded in more three-fourth part of the world i.e. of privatisation of public enterprise, de-regulation of economy, liberalisation of trade and industry, relaxing labour laws, reducing public expenditure especially social spending and free flow of capital. These are the basic tenants of what is called neo- liberalism (Manfred B. Steger 2003: 41). The loss of public faith in the government sector and the collapse of Soviet Union as a symbol of socialism lend further strength to the ‘no alternative’ argument.
The central argument of the main proponents of neo-liberalism, especially Milton Friedman, is that economic freedom is an essential requisite for political freedom. The combination of economic and political power in the same hand is a grave threat to the liberty, freedom and democracy and leads to tyranny (Milton Freidman: 1980). Individual freedom, for neo-liberal thinkers, is essential for democracy which in turn is lifeline for economic development. Any interference on the part of the State in terms of planning the economy curtails the freedom which is undemocratic and resulted in economic crisis.
They believed in Hayek’s formulation that State interference leads us to the road to serfdom rather than freedom and liberty (F. A. Hayek 1944). The State must withdraw itself from planning and regulating the economy. They argued that the State intervention in the market must be kept at bare minimum because it cannot possibly possess enough information to read the pulse of the market and secondly certain influential and powerful groups which are closer to the government will inevitably distort and bias state intervention for their own benefits (Milton Friedman 2002). Individual freedoms can only be ensured by the freedom of market and of the trade is the basic proposition. Neo-liberals consider that enterprises are private contracting parties, hence recognised as individuals in the markets (Ibid: 14). In other words, individual freedom is basically the freedom of corporations and private enterprises.
The scope of government, for Milton Friedman, must be limited. Its major function must be to protect freedom both from the enemies outside our gates and from our fellow citizens. The government has the responsibility to preserve law and order, to enforce private contracts and to encourage competitive markets (Ibid: 2). Markets, for neo-liberal thinkers, are self-regulating, naturally efficient, productive, responsive and democratic mechanisms. At the macroeconomic level, they are most efficient because the resources will be utilised for their most profitable use. Both rich and poor alike have an incentive to work. At the microeconomic level, private business is more efficient than public sector as it is disciplined by the motive of profits. The markets provide opportunities to everyone to make their fortunes on the basis of talent and hard work (Andrew Heywood 2007: 53).
According to David Harvey, for neo-liberals, the human well being can best be advanced by liberating individual entrepreneurial freedoms and skills. This freedom is possible only in an institutional framework characterised by strong property rights, free markets and free trade. It is the responsibility of the State to create and preserve an institutional framework favouring such practices. It must set up military, defence, police and legal structures and functions required to secure private property rights and to guarantee, by force if need be, the proper functioning of markets (David Harvey 2007: 2). The State which ensures all these measures is called a neo- liberal State.
It means, they do need State and government but those who create the structure to support neo-liberal economic agenda. Friedman also argues that the existence of a free market does not of course eliminate the need for government. On the contrary, government is essential both as a forum for determining the ‘rules of the game’ and as an umpire to interpret and enforce the rules decided on. What the market does is to reduce greatly the range of issues that must be decided through political means, and thereby to minimize the extent to which government need participate directly in the game (Milton Friedman 2002: 15). In other words, the State is allowed to intervene only in the interest of the business community.
The State must work to ensure the freedom for the corporate and business sector rather than people at large. It becomes the prerogative of the big corporate houses and the State to decide which sector to be completely privatised and which sector will tolerate government interference. The allocation of 2G Spectrum and the natural resources like coal blocks, minerals and forests and acquisition of land are the recent examples of strong State intervention. The issues of corruption, scams, controversies and lack of transparency regarding these areas indicate that the business community influence the government to ensure allotments in their favour by paying very less price. It has increased their surplus many folds in very short span of time, which would have been difficult in the genuine competitive market conditions. So, the ‘rules of the game’ as mentioned by Freidman was to ensure surplus generation of corporate and business houses.
The group of economists, led by Milton Friedman, who spearheaded these ideas 1970s is called ‘Chicago boys’, as they were all from the University of Chicago. And the consensus on these polices among the political leadership of the United States of America, from the beginning of 1990s, is known as ‘Washington Consensus’. This consensus stands on three pillars of fiscal austerity, privatisation and market liberalisation (Joseph Stiglitz 2002: 53).
As a matter of policy, they have advised the governments to reverse the process of nationalization, privatise public assets, open up natural resources to private and unregulated exploitation, privatise social security and facilitate foreign direct investment (FDI) and free trade. They favoured the right of the foreign companies to repatriate profits from the countries in which they have invested to countries where their head offices are located (Harvey 2007: 8).
They advised the governments to adopt export led growth model and abandon the policy of import substitution. The argument is that a particular country must export that resource, either goods/final products or raw materials, in which it holds strength. And the earning from these exports must be utilised in importing other needed products. As most of the post-colonial States are enriched in natural resources and raw materials, they will be reduced to export only the raw material and forced to import manufactured goods and technology. It turns the whole idea of self-reliant economy upside down.
Indian government opted for a new era of economic reforms by following neo-liberal economic policy framework. The strategy under this framework was first, to minimise the role of government in economic activities and to make it a ‘minimal state’. Second, was to encourage private investment both by foreign and Indian corporate sector. Third, was to take aid in the form of varieties of loans from the international monetary and financial institutions mainly International Monetary Fund (IMF) and World Bank (WB). This in turn will push India to abide by the prescriptions of IMF through its programmes of ‘stabilisation’ of economy and the ‘structural adjustment’ programmes of WB.
Their prescription for critically ill economies was to control fiscal deficit, rising inflation and the crisis of balance of payment. All these three crises have to be handled even at the cost of rising unemployment, poverty and economic deprivation (Bhaduri & Nayyar 1996: 30, 31). In industrial sector, the ‘license raj’ was abolished and investment decisions made no longer dependent upon the government approval. The laws which limit the growth of firms through mergers or acquisitions have been abolished. The quantitative restrictions on imports and exports have been reduced in terms of reduction in tariffs and abolition of subsidies on exports. The policy regime for the foreign investment and foreign technology has been liberalised under the agenda of these economic reforms.
With regard to public sector, the government has not only reduced its activities in this sector rather facilitated the closures of not only loss making units along with profitable ones. The sale of profitable and cash-rich public sector corporation Balco (Bharat Aluminium Company Limited) in Chhattisgarh may be considered as apparent example2. In this neo-liberal era, small and medium scale industries are ignored. Agriculture remains the most neglected rather forgotten sector apart from some talks of crop-diversification.
As far as land reforms are concerned, the measures adopted have fallen dramatically short of their objectives. According to the report of National Sample Survey Organization, in 2003, on landholding, 95.65% of the farmers are within the small and marginal categories owning nearly 62% of the operated land areas, while the medium and large farmers who constitute 3.5% own 37.72% of the total area. The clear increase is noticeable in the number of landless labour in rural areas, which has accompanied by a decline in the wage rate in the agricultural sector. There is also decline in the profitability of agriculture. This has brought out a fact that there is a concentration of poverty among the rural landless labour, marginal and small farmers.
The Gross Domestic Production (GDP), projected as the key factor of growth, is also faltering as India recorded worse growth of around 6.9% far below the dream target of 9-10%.4 As far as total employment is concerned, only 8% is in the organised sector and the rest (more than 90%) is engaged in informal sector and largely out of reach of any social security benefits. Talking about unemployment, around 7.2% of labour force was unemployed in 1999-2000, which means 26.58 million people in absolute terms of number.5 The rate of growth of employment has fallen every year from 1997 to 2001 (RDF 2007: 5).
Regarding poverty, the National Commission Enterprises in the Unorganised Sector Report, 2006 (popularly known as Arjun Sengutpa Committee Report) estimated that nearly 77% of Indian population is living below the income of Rs. 20 a day. This is the reason that India ranked 65 in the 79 hungriest nations in the Global Hunger Index. On the other hand, in 2013 India has 55 billionaires with average net worth of around Rs. 190.8 billion. The write-offs to the corporate sector in form of exemption on corporate tax, excise and custom duties from 2005-06 to 2012-13 comes to startling figure of Rs. 31.11 trillion. India ranked fifth in the world of billionaires on the Fobes list behind U.S., China, Russia and Germany. But our rank in United Nations Human Development Index, 2013 is 136 out of 186 nations.6 With this scenario of both welfare and neo- liberal eras, the State has seen to have betrayed the masses.
Gandhian perspective
Mahatma Gandhi was not in favour of modern State because it was the product of modern civilisation about which he was very critical. He was also critical of State planning for mechanisation and industrialisation of economy. He was of the firm opinion that machinery, commercialisation and centralisation of power in the State are the curses of modern civilisation. They are being imposed upon Indian people by the European colonialism. For Gandhi, industrialism itself rather than inability to industrialise was the root cause of Indian poverty (Partha Chatterjee 1993: 201). He has also expressed his displeasure with the approach of National Planning Committee, 1937, regarding economic future of India. He considered the efforts of this Committee as waste bringing forth little or no fruit.
The modern civilisation, for Mahatma Gandhi, was fundamentally flawed due to the fact that it was aggressive, imperialist, violent, exploitative, brutal, unhappy, restless and devoid of a sense of direction and purpose .This flaw is the result of the fact that it has privileged the body and neglected the soul, misunderstood the nature and limits of reason and had no appreciation of the individual swabhava. It has been driven by the principles of self-interest and undisciplined self-indulgence. It is inherently restless and lacked stability. It is materialist in nature and steered by greed and ruthless competition (Bhikhu Parekh 2001: 79). It has resulted in the vast accumulation of wealth in the hands of few capitalist owners. This search for profit led them to mechanisation and industrialism.
It treats the poor with contempt, weaker races regarded as subhuman and bought and sold and the weaker nations conquered and mercilessly oppressed and exploited. This aggressive and exploitative nature of modern civilisation has led to European imperialism. This modern civilisation has created a highly centralised and bureaucratic modern state that was obsessed with homogeneity and suffused with the spirit of violence (Ibid, 82, 99). It is precisely the problem of Mahatma Gandhi with the modern State.
He was even opposed to the liberal democracy as it did little to integrate state and society, decentralise political power, involve citizens in the conduct of public affairs and reduce the extent and depth of internal and external violence (Ibid, 99). He was of the strong view that state cannot claim an inalienable and unchallengeable authority to itself. This centralisation of power breeds violence in concerted and organised form. State, for Gandhi, is a ‘soulless machine’, which can never be detached from violence to which it owes its existence (Raghvan Iyer 1973: 253, 254).
For Mahatma Gandhi, according to Gopinath Dhawan, the centralisation means concentration of power in the hands of few with the likelihood of its abuse. It damages initiatives, resourcefulness, courage and creativeness and diminishes opportunities of self- government and of resisting injustice. More the centralisation of power, less is democracy (Gopinath Dhawan 1946: 284). So, the task for Gandhi, according to Parekh, was to explore alternatives not just to the contemporary form of government but to the very institution of the state (Bhikhu Parekh 2001: 99).
He looked for swaraj as an alternative to this modern state. For him, swaraj was on one hand, a shasanmukta i.e. free from domination and coercion, on the other hand, was institutionalised and nurtured lokshakti i.e. people’s power. People were the whole source of political power and must govern their affairs themselves (Ibid: 99). The ideal society for Mahatma Gandhi is a ‘stateless democracy’ where social life is so developed to become self- regulated (Jayaprakash Narayan 1978: 213). The greatest contribution of Gandhi, according to Bhaskar Sur, is to locate swaraj in the self-reliant village communities (Bhaskar Sur: 2010). The polity based on swaraj, for Parekh, would be composed of small, cultured, well-organised, thoroughly regenerated and self-governing village communities. They must be able to manage their local affairs themselves and to elect a small body of people to enforce their decisions. They would administer justice, maintain order, and take important economic decisions, and would be not merely administrative but powerful economic and political units.
Beyond the relatively self-sufficient villages the country would be organized in terms of ‘expanding circles’. The villages would be grouped into districts, these into provinces, and so on, each governed by representatives elected by its constituent units. Each tier of government would enjoy considerable autonomy and a strong sense of community, would both sustain and limit the one above it, and deal with matters of common interest to its constituent communities. Each province would draw up its own constitution to suit local requirements and in conformity with that of the country as a whole. He suggested that many of the task performed by the state should be handed over to the local communities (Parekh : 100, 101).
The local communities should become the centers of a radically redefined system of justice. They should encourage their members to settle their disputes themselves, and help create a moral climate in which to allow conflicts to occur or get out of control was widely regarded as a mark of personal inadequacy and a matter of shame. When conflicts could not be so resolved, local communities should provide people’s courts made up of men and women enjoying widespread trust and respect (Ibid: 102).
J C Kumarappa, an imminent Gandhian also dreamed about independent India with a ‘village centered economic order’ along with Mahatma Gandhi. He is considered as a principle preceptor of Gandhian economics (V. M. Govindu and D. Malghan 2005: 5477). Inspite of being a member of National Planning Committee, 1937, he vehemently criticised its agenda of promoting industrialization. He was of the opinion that Congress is working against its own economic ideals of restricting and eliminating modern industrialism rather than its encouragement8 (P. Chatterjee 1993: 201). He was critical of independent Indian State’s economic planning of emphasizing upon industrialization while complete neglect of land reforms in rural areas. He saw these policies as the betrayal of the cause of the poor (Govindu & Malghan 2005: 5482).
He was against the centralization of power, as it leads to the concentration of power in the hands of those who control the State. This concentration curtails the autonomy of the individual, which is essential for society’s economic freedom. The individual autonomy is essential for the construction of non-violent social organization (Ibid: 5481). He was of the firm opinion that concerted efforts must be made for the reconstruction of rural India. Due to this reason, he was not convinced even with the Bhoodan movement of Vinoba Bhave. He believed that rather than selecting targets for the quantity of land to be collected, Vinoba Bhave must patiently work for making the land already collected as productive and sustainable (Ramachandra Guha 2009: 83).
For Vinoba Bhave, power means dignified existence and honorable living. The system which provides respect to everyone and treats every individual equally, is called the system beholding people’s power. The true meaning of power is not to rule but leading a dignified live. When citizens have mutual respect for each other and when they think about the well-beings of others first, this social behavior is being considered as lokniti. It means without lokniti, democracy cannot firmly take roots and the people’s power will be diminished (Vinoba Bhave: 1959).
The government must continuously either recede into background or wither away and its place must be taken by the people themselves. Initiatives must pass to the people. Critiquing the welfare state, Vinoba bahve, argued that in the name of welfare State we (India) are concentrating all power at the centre. The authority of the State must also be decentralized (V. Tandon 2004: 159-205).
Jayaprakash Narayan, Marxist turned Gandhian, raised the fundamental concern of powerlessness of the masses and argues that even after independence people are not still woken up and sprang to action. He was deeply concerned with the gulf between the masses and their representative institution, i.e. the government (Jayaprakash Narayan 1978: 162-167). To awaken the peaceful people’s power and to achieve social change he declared that his goal is to accomplish ‘Total Revolution’. The issues like corruption, high prices, unemployment, which have engulfed the Indian society, cannot be resolved without radical change in the whole society. The objective of eradication of these evils may appear limited in character, but cannot be achieved without all-around revolution – political, economic, social educational, moral and cultural (Ibid: 115-117). The fundamental objective of Total Revolution is to bring real Swarajya based on the philosophy of Savodaya. This philosophy believes in the concept of Gram Swaraj, which requires that economy and political power must be decentralized to preserve and develop the freedom of the people. It considers government unnecessary and when it is centralized, as an evil (Ghansaham Shah 1977: 695-696).
While summing up this part of the chapter, I shall say that Mahatma Gandhi and Gandhians strongly disliked the modern State because of its tendency of centralization of power. They aspired for the society in which State remains minimal and people became self-regulated. But they completely differ from the neo-liberal notion of minimal State, which is based the ideas of free market to gain as much surplus as possible. They all went against capitalism and the greed it generates in society. They equally criticised communism and socialism due its centralization of power. Another critique, especially of Indian State, comes from the fact that it had ignored the issues and problems of rural India. The Five Year Plans were critiqued for their priority to large scale industry than to cottage industry and agriculture (Ibid: 696). In the end we shall say that Mahatma Gandhi and the Gandhians remained one of the strongest critics of modern Indian State.
Coercive State
As the Indian State became the prime mover for the social and economic transformation, it also attained the sovereign power to decide the path for this transformation. In other words, it has the sovereign power to decide the path for nation building. The agenda of nation building for Indian political leadership mainly included the aspects of territorial unity and integrity, firmly establishing democracy by strengthening democratic institutions and choosing the path of development. From its inception, every act of the State was guided in the name of maintaining unity and integrity, saving democracy and development and well-being of the society.
The question of unity and integrity means the preservation of the political boundary of India after partition. With regard to democracy, India adopted a representative system of parliamentary form of government. Indian constitution with Fundamental Rights and Directive Principles was considered as the guiding light for the political system. Lastly, development was considered as a progress in a linear path towards achieving the goals predetermined by the State through its planning commission. It was argued that with the development and growth, the State would be able to generate enough resources to confer rights of life and liberty, equality and dignity on the Indian masses.
Indian State was perceived as relatively autonomous (not an instrument of single class) from entrenched interests and classes. It was expected from the State to discipline, influence and coerce, if needed, established interests and estates in order to implement new policies aimed at social and economic transformation (Rajni Kothari 2005: 35). So, coercion is a tool to establish and reproduce dominance and order in a society by force. The State when perform this task becomes coercive. State always faces the dilemma of using the coercive powers that violate basic freedoms and liberties, in order to establish democracy. The matter of analysis is that against whom this coercive power is being unleashed. Is it the dominant, entrenched interests and classes or the large Indian masses?
But the above mentioned disastrous performance of developmental and neo-liberal phases of the State gives an indication that it has not taken care of the masses. According to Rajni Kothari, the State has degenerated into a technocratic machine serving a narrow power group that is held afloat by a widely entrenched bureaucracy and a hand-kicked security apparatus, assisting in a regime of order and repression. But, there are millions of hardworking people continuing to produce goods and services for the system (Rajni Kothari 2005: 37). It shows that State, as the title of his book goes, is working against democracy. The very structures, like political parties, representative institutions, judiciary, that were conceived for promoting the democratic process and providing liberation from traditional constraints are becoming vulnerable to the influence of anti-democratic forces and proving ineffective in dealing with them (Rajni Kothari 1988: i). Analysing the journey of Indian democracy, K G Kannabiran argues that the democratic institutions are progressively decaying in India (Kannabiran 2004). This opinion has gained strength by seeing the responses of the Indian State to every social, economic and political issue since independence.
The ideas, opinions, interests, acts and mobilisations of divergent classes, communities and sections of the society were forcefully tried to be subsumed within the general interest propagated by the State for nation building. As the Indian State has assigned itself the task of building the nation, the sections which questioned its dominant conception of nation building were regarded as a challenge to the very idea of Indian nation.
With the passage of decades, not only Marxists and Gandhians but large sections of masses facing the brunt of the idea of nation building were started raising their dissenting voices. Rather than diminishing, these voices have multiplied from very few to many in the journey of Indian State from independence to present times. Not only this, it was also becoming oppressive and brutal with every passing day. The protests, agitations and movements of Indian masses for the realization of their demands and aspirations were considered merely as law and order problems and threat to the political system. The state tried its best to suppress these dissenting voices with the might of the security forces. Once upon the focal point of hopes and aspirations, the state has failed to deliver even its most fundamental promises (Chandoke 1991: 66). The hopes and aspirations of the masses were considered as challenges to be suppressed by coercion. Indian State has shown its coercive power to deal with not only the radical left and movements fighting for the separate nation, but also the very recent urban spontaneous protests (like protests after Delhi gang-rape).
In order to legitimise its coercion and to provide absolute impunity to its security forces it has retained several laws of colonial period and enacted numerous news laws. Indian State has worked on four folds strategy. First, it has placed number of restrictions on the exercise of the fundamental rights for its ‘citizens’ and added Article 22 (7), in to the Constitution, which allows the Parliament to enact preventive detention laws. Secondly, it retained number of draconian provisions of IPC and Cr.PC like Section 144 IPC which declare any assembly as ‘unlawful’, Sec. 124A IPC which deals with ‘sedition’, Sec. 121 IPC for ‘waging war against the government’ and many more. Thirdly, it amended, from time to time, the various provisions of IPC and Cr.PC and permanent laws like Indian Evidence Act, 1872. Fourthly, it has enacted certain new draconian legislations and inserted amendments into them on the pretext that as the circumstances have become extraordinary the ordinary law of the land, i.e. IPC and Cr.PC can’t deal with these emergency situations. The security forces need the cover of some extraordinary laws to bring back the situation to ‘normalcy’ and ‘peace’.
Within the sphere of extraordinary laws, some laws like Terrorist and Disruptive Activities (Prevention) Act (TADA) and Prevention of Terrorist Activities Act (POTA) still had the provision for their review in the Parliament, which provided the possibility of their repeal. But the laws like Unlawful Activities Prevention Act, 1967 (UAPA) carry no such provision and remain in statute books just as normal law. Most of the time, even the provision to revoke doesn’t help as in the case of the most notorious black law, Armed Forces Special Powers Act, 1958. The Parliament and the central government still continue with this law in North-East and Kashmir, despite strong demand for its removal. This special law has become the permanent feature of these regions.
All these measures were and still justified in name of maintaining ‘law and order’ and ‘national unity, integrity and sovereignty’. In this regard, both the central and State governments were party to this strategy. Thus, the Indian legal system is the amalgamation of all these strands of ordinary and extraordinary legal measures and they blur with each other (Ujjwal Kumar Singh 2007). It is an ironical fact that anti-democratic measures are used by the State in the name of ensuring democracy. The experience of these laws point towards the growing culture of impunity to security forces and wrong doing officials and incarceration of people and communities demanding their fundamental freedoms and rights. They are being employed, according to Kannabiran, to restrain the exercise of rights and to manage and contain any unrest that may signal rebellion (Kannabiran 2004: 3). Nearly 7,000 cases of sedition against the people protesting against the construction of nuclear power plant in Kundakulam is one of the many striking cases of suppression of dissent with coercive laws.
Apart from using its regular armed forces with impunity, the State has also established elite armed units like Greyhounds, CoBRA (Combat Battalion for Resolute Action), Jaguar, Special Operations Group (SOG) etc. for counter-insurgency operations, especially anti- Naxalites or anti-Maoists operations. It has also armed the civilian population to fight and eliminate these challenges. The creation and use of slawa judum in Chhattisgarh to allegedly counter Naxalites or Maoists is very recent example. Indian State and its institutions have called it as peaceful movement of common tribal against Maoists.
But the report of People’s Union for Democratic Rights (PUDR) called it as the undeclared war on the tribal society with full support of state of Chhattisgarh. In cities, there is a rising trend of right wing fascist forces trying to suppress the fundamental right of protest by using physical violence with tacit support of police personnel. The democratic space in India is shrinking day-by-day either overtly or covertly. I shall conclude by sharing the concern of S P Udayakumar, leader of People’s Movement Against Nuclear Energy, that the challenge India facing is the power differential between the people and the State. He further raised a question that we celebrate India as the world’s largest democracy, but its people are hopelessly powerless. Nobody listens to the people. The real challenge in front of India is to democratise State and society, so that people will be taken into account while deciding their future.
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