In A Suitable Boy, Vikram Seth writes with affection of a placid India's first general election in 1951, and the egalitarian spirit it momentarily bestowed on an electorate deeply riven by class and caste: "the great washed and unwashed public, sceptical and gullible", but all "endowed with universal adult suffrage". India's 16th general election this month, held against a background of economic jolts and titanic corruption scandals, and tainted by the nastiest campaign yet, announces a new turbulent phase for the country – arguably, the most sinister since its independence from British rule in 1947. Back then, it would have been inconceivable that a figure such as Narendra Modi, the Hindu nationalist chief minister of Gujarat accused, along with his closest aides, of complicity in crimes ranging from an anti-Muslim pogrom in his state in 2002 to extrajudicial killings, and barred from entering the US, may occupy India's highest political office.
Modi is a lifelong member of the Rashtriya Swayamsevak Sangh (RSS), a paramilitary Hindu nationalist organisation inspired by the fascist movements of Europe, whose founder's belief that Nazi Germany had manifested "race pride at its highest" by purging the Jews is by no means unexceptional among the votaries of Hindutva, or "Hinduness". In 1948, a former member of the RSS murdered Gandhi for being too soft on Muslims. The outfit, traditionally dominated by upper-caste Hindus, has led many vicious assaults on minorities. A notorious executioner of dozens of Muslims in Gujarat in 2002 crowed that he had slashed open with his sword the womb of a heavily pregnant woman and extracted her foetus. Modi himself described the relief camps housing tens of thousands of displaced Muslims as "child-breeding centres".
Such rhetoric has helped Modi sweep one election after another in Gujarat. A senior American diplomat described him, in cables disclosed by WikiLeaks, as an "insular, distrustful person" who "reigns by fear and intimidation"; his neo-Hindu devotees on Facebook and Twitter continue to render the air mephitic with hate and malice, populating the paranoid world of both have-nots and haves with fresh enemies – "terrorists", "jihadis", "Pakistani agents", "pseudo-secularists", "sickulars", "socialists" and "commies". Modi's own electoral strategy as prime ministerial candidate, however, has been more polished, despite his appeals, both dog-whistled and overt, to Hindu solidarity against menacing aliens and outsiders, such as the Italian-born leader of the Congress party, Sonia Gandhi, Bangladeshi "infiltrators" and those who eat the holy cow.
Modi exhorts his largely young supporters – more than two-thirds of India's population is under the age of 35 – to join a revolution that will destroy the corrupt old political order and uproot its moral and ideological foundations while buttressing the essential framework, the market economy, of a glorious New India. In an apparently ungovernable country, where many revere the author of Mein Kampf for his tremendous will to power and organisation, he has shrewdly deployed the idioms of management, national security and civilisational glory.
Boasting of his 56-inch chest, Modi has replaced Mahatma Gandhi, the icon of non-violence, with Vivekananda, the 19th-century Hindu revivalist who was obsessed with making Indians a "manly" nation. Vivekananda's garlanded statue or portrait is as ubiquitous in Modi's public appearances as his dandyish pastel waistcoats. But Modi is never less convincing than when he presents himself as a humble tea-vendor, the son-of-the-soil challenger to the Congress's haughty dynasts. His record as chief minister is predominantly distinguished by the transfer – through privatisation or outright gifts – of national resources to the country's biggest corporations. His closest allies – India's biggest businessmen – have accordingly enlisted their mainstream media outlets into the cult of Modi as decisive administrator; dissenting journalists have been removed or silenced.
Not long after India's first full-scale pogrom in 2002, leading corporate bosses, ranging from the suave Ratan Tata to Mukesh Ambani, the owner of a 27-storey residence, began to pave Modi's ascent to respectability and power. The stars of Bollywood fell (literally) at the feet of Modi. In recent months, liberal-minded columnists and journalists have joined their logrolling rightwing compatriots in certifying Modi as a "moderate" developmentalist. The Columbia University economist Jagdish Bhagwati, who insists that he intellectually fathered India's economic reforms in 1991, and Gurcharan Das, author of India Unbound, have volunteered passionate exonerations of the man they consider India's saviour.
Bhagwati, once a fervent supporter of outgoing prime minister Manmohan Singh, has even publicly applied for an advisory position with Modi's government. It may be because the nearly double-digit economic growth of recent years that Ivy League economists like him – India's own version of Chile's Chicago Boys and Russia's Harvard Boys – instigated and championed turns out to have been based primarily on extraction of natural resources, cheap labour and foreign capital inflows rather than high productivity and innovation, or indeed the brick-and-mortar ventures that fuelled China's rise as a manufacturing powerhouse. "The bulk of India's aggregate growth," the World Bank's chief economist Kaushik Basu warns, "is occurring through a disproportionate rise in the incomes at the upper end of the income ladder." Thus, it has left largely undisturbed the country's shameful ratios – 43% of all Indian children below the age of five are undernourished, and 48% stunted; nearly half of Indian women of childbearing age are anaemic, and more than half of all Indians still defecate in the open.
Absurdly uneven and jobless economic growth has led to what Amartya Sen and Jean Dreze call "islands of California in a sea of sub-Saharan Africa". The failure to generate stable employment – 1m new jobs are required every month – for an increasingly urban and atomised population, or to allay the severe inequalities of opportunity as well as income, created, well before the recent economic setbacks, a large simmering reservoir of rage and frustration. Many Indians, neglected by the state, which spends less proportionately on health and education than Malawi, and spurned by private industry, which prefers cheap contract labour, invest their hopes in notions of free enterprise and individual initiative. However, old and new hierarchies of class, caste and education restrict most of them to the ranks of the unwashed. As the Wall Street Journal admitted, India is not "overflowing with Horatio Alger stories". Balram Halwai, the entrepreneur from rural India in Aravind Adiga's Man Booker-winning novel The White Tiger, who finds in murder and theft the quickest route to business success and self-confidence in the metropolis, and Mumbai's social-Darwinist slum-dwellers in Katherine Boo's Behind the Beautiful Forevers point to an intensified dialectic in India today: cruel exclusion and even more brutal self-empowerment.
Such extensive moral squalor may bewilder those who expected India to conform, however gradually and imperfectly, to a western ideal of liberal democracy and capitalism. But those scandalised by the lure of an indigenised fascism in the country billed as the "world's largest democracy" should know: this was not the work of a day, or of a few "extremists". It has been in the making for years. "Democracy in India," BR Ambedkar, the main framer of India's constitution, warned in the 1950s, "is only a top dressing on an Indian soil, which is essentially undemocratic." Ambedkar saw democracy in India as a promise of justice and dignity to the country's despised and impoverished millions, which could only be realised through intense political struggle. For more than two decades that possibility has faced a pincer movement: a form of global capitalism that can only enrich a small minority and a xenophobic nationalism that handily identifies fresh scapegoats for large-scale socio-economic failure and frustration.
In many ways, Modi and his rabble – tycoons, neo-Hindu techies, and outright fanatics – are perfect mascots for the changes that have transformed India since the early 1990s: the liberalisation of the country's economy, and the destruction by Modi's compatriots of the 16th-century Babri mosque in Ayodhya. Long before the killings in Gujarat, Indian security forces enjoyed what amounted to a licence to kill, torture and rape in the border regions of Kashmir and the north-east; a similar infrastructure of repression was installed in central India after forest-dwelling tribal peoples revolted against the nexus of mining corporations and the state. The government's plan to spy on internet and phone connections makes the NSA's surveillance look highly responsible. Muslims have been imprisoned for years without trial on the flimsiest suspicion of "terrorism"; one of them, a Kashmiri, who had only circumstantial evidence against him, was rushed to the gallows last year, denied even the customary last meeting with his kin, in order to satisfy, as the supreme court put it, "the collective conscience of the people".
"People who were not born then," Robert Musil wrote in The Man Without Qualities of the period before another apparently abrupt collapse of liberal values, "will find it difficult to believe, but the fact is that even then time was moving faster than a cavalry camel … But in those days, no one knew what it was moving towards. Nor could anyone quite distinguish between what was above and what was below, between what was moving forward and what backward." One symptom of this widespread confusion in Musil's novel is the Viennese elite's weird ambivalence about the crimes of a brutal murderer called Moosbrugger. Certainly, figuring out what was above and what was below is harder for the parachuting foreign journalists who alighted upon a new idea of India as an economic "powerhouse" and the many "rising" Indians in a generation born after economic liberalisation in 1991, who are seduced by Modi's promise of the utopia of consumerism – one in which skyscrapers, expressways, bullet trains and shopping malls proliferate (and from which such eyesores as the poor are excluded).
People who were born before 1991, and did not know what time was moving towards, might be forgiven for feeling nostalgia for the simpler days of postcolonial idealism and hopefulness – those that Seth evokes in A Suitable Boy. Set in the 1950s, the novel brims with optimism about the world's most audacious experiment in democracy, endorsing the Nehruvian "idea of India" that seems flexible enough to accommodate formerly untouchable Hindus (Dalits) and Muslims as well as the middle-class intelligentsia. The novel's affable anglophone characters radiate the assumption that the sectarian passions that blighted India during its partition in 1947 will be defused, secular progress through science and reason will eventually manifest itself, and an enlightened leadership will usher a near-destitute people into active citizenship and economic prosperity.
India's first prime minister, Jawaharlal Nehru, appears in the novel as an effective one-man buffer against Hindu chauvinism. "The thought of India as a Hindu state, with its minorities treated as second-class citizens, sickened him." In Nehru's own vision, grand projects such as big dams and factories would bring India's superstitious masses out of their benighted rural habitats and propel them into first-world affluence and rationality. The Harrow- and Cambridge-educated Indian leader had inherited from British colonials at least part of their civilising mission, turning it into a national project to catch up with the industrialised west. "I was eager and anxious," Nehru wrote of India, "to change her outlook and appearance and give her the garb of modernity." Even the "uninteresting" peasant, whose "limited outlook" induced in him a "feeling of overwhelming pity and a sense of ever-impending tragedy" was to be present at what he called India's "tryst with destiny".
That long attempt by India's ruling class to give the country the "garb of modernity" has produced, in its sixth decade, effects entirely unanticipated by Nehru or anyone else: intense politicisation and fierce contests for power together with violence, fragmentation and chaos, and a concomitant longing for authoritarian control. Modi's image as an exponent of discipline and order is built on both the successes and failures of the ancien regime. He offers top-down modernisation, but without modernity: bullet trains without the culture of criticism, managerial efficiency without the guarantee of equal rights. And this streamlined design for a new India immediately entices those well-off Indians who have long regarded democracy as a nuisance, recoiled from the destitute masses, and idolised technocratic, if despotic, "doers" like the first prime minister of Singapore, Lee Kuan Yew.
But then the Nehruvian assumption that economic growth plotted and supervised by a wise technocracy would also bring about social change was also profoundly undemocratic and self-serving. Seth's novel, along with much anglophone literature, seems, in retrospect, to have uncritically reproduced the establishment ideology of English-speaking and overwhelmingly upper-caste Hindus who gained most from state-planned economic growth: the Indian middle class employed in the public sector, civil servants, scientists and monopolist industrialists. This ruling class's rhetoric of socialism disguised its nearly complete monopoly of power. As DR Nagaraj, one of postcolonial India's finest minds, pointed out, "the institutions of capitalism, science and technology were taken over by the upper castes". Even today, businessmen, bureaucrats, scientists, writers in English, academics, thinktankers, newspaper editors, columnists and TV anchors are disproportionately drawn from among the Hindu upper-castes. And, as Sen has often lamented, their "breathtakingly conservative" outlook is to be blamed for the meagre investment in health and education – essential requirements for an equitable society as well as sustained economic growth – that put India behind even disaster-prone China in human development indexes, and now makes it trail Bangladesh.
Dynastic politics froze the Congress party into a network of patronage, delaying the empowerment of the underprivileged Indians who routinely gave it landslide victories. Nehru may have thought of political power as a function of moral responsibility. But his insecure daughter, Indira Gandhi, consumed by Nixon-calibre paranoia, turned politics into a game of self-aggrandisement, arresting opposition leaders and suspending fundamental rights in 1975 during a nationwide "state of emergency". She supported Sikh fundamentalists in Punjab (who eventually turned against her) and rigged elections in Muslim-majority Kashmir. In the 1980s, the Congress party, facing a fragmenting voter base, cynically resorted to stoking Hindu nationalism. After Indira Gandhi's assassination by her bodyguards in 1984, Congress politicians led lynch mobs against Sikhs, killing more than 3,000 civilians. Three months later, her son Rajiv Gandhi won elections with a landslide. Then, in another eerie prefiguring of Modi's methods, Gandhi, a former pilot obsessed with computers, tried to combine technocratic rule with soft Hindutva.
The Bharatiya Janata party (BJP), a political offshoot of the RSS that Nehru had successfully banished into the political wilderness, turned out to be much better at this kind of thing. In 1990, its leader LK Advani rode a "chariot" (actually a rigged-up Toyota flatbed truck) across India in a Hindu supremacist campaign against the mosque in Ayodhya. The wildfire of anti-Muslim violence across the country reaped immediate electoral dividends. (In old photos, Modi appears atop the chariot as Advani's hawk-eyed understudy). Another BJP chieftain ventured to hoist the Indian tricolour in insurgent Kashmir. (Again, the bearded man photographed helping his doddery senior taunt curfew-bound Kashmiris turns out to be the young Modi.) Following a few more massacres, the BJP was in power in 1998, conducting nuclear tests and fast-tracking the programme of economic liberalisation started by the Congress after a severe financial crisis in 1991.
The Hindu nationalists had a ready consumer base for their blend of chauvinism and marketisation. With India's politics and economy reaching an impasse, which forced many of their relatives to emmigrate to the US, and the Congress facing decline, many powerful Indians were seeking fresh political representatives and a new self-legitimising ideology in the late 1980s and 90s. This quest was fulfilled by, first, both the post-cold war dogma of free markets and then an openly rightwing political party that was prepared to go further than the Congress in developing close relations with the US (and Israel, which, once shunned, is now India's second-biggest arms supplier after Russia). You can only marvel today at the swiftness with which the old illusions of an over-regulated economy were replaced by the fantasies of an unregulated one.
According to the new wisdom – new to India, if already worn out and discredited in Latin America – all governments needed to do was get out of the way of buoyant and autonomous entrepreneurs and stop subsidising the poor and the lazy (in a risible self-contradiction these Indian promoters of minimalist governance also clamoured for a big militarised state apparatus to fight and intimidate neighbours and stifle domestic insurgencies). The long complex experience of strong European as well as east Asian economies – active state intervention in markets and support to strategic industries, long periods of economic nationalism, investments in health and education – was elided in a new triumphalist global history of free markets. Its promise of instant and widespread affluence seemed to have been manufactured especially for gormless journalists and columnists. Still, in the last decade, neoliberalism became the common sense of many Indians who were merely aspiring as well as those who had already made it – the only elite ideology after Nehruvian nation-building to have achieved a high degree of pan-Indian consent, if not total hegemony. The old official rhetoric of egalitarian and shared futures gave way to the media's celebrations of private wealth-creation – embodied today by Ambani's 27-storey private residence in a city where a majority lives in slums – and a proliferation of Ayn Randian cliches about ambition, willpower and striving.
Nehru's programme of national self-strengthening had included, along with such ideals as secularism, socialism and non-alignment, a deep-rooted suspicion of American foreign policy and economic doctrines. In a stunning coup, India's postcolonial project was taken over, as Octavio Paz once wrote of the Mexican revolution, "by a capitalist class made in the image and likeness of US capitalism and dependent upon it". A new book by Anita Raghavan, The Billionaire's Apprentice: The Rise of the Indian-American Elite and the Fall of the Galleon Hedge Fund, reveals how well-placed men such as Rajat Gupta, the investment banker recently convicted for insider trading in New York, expedited close links between American and Indian political and business leaders.
India's upper-caste elite transcended party lines in their impassioned courting of likely American partners. In 2008, an American diplomat in Delhi was given an exclusive preview by a Congress party factotum of two chests containing $25m in cash – money to bribe members of parliament into voting for a nuclear deal with the US. Visiting the White House later that year, Singh blurted out to George W Bush, probably resigned by then to being the most despised American president in history, that "the people of India love you deeply". In a conversation disclosed by WikiLeaks, Arun Jaitley, a senior leader of the BJP who is tipped to be finance minister in Modi's government, urged American diplomats in Delhi to see his party's anti-Muslim rhetoric as "opportunistic", a mere "talking point" and to take more seriously his own professional and emotional links with the US.
A transnational elite of rightwing Indians based in the US helped circulate an impression of an irresistibly "emerging giant" – the title of a book by Arvind Panagariya, a New-York-based economist and another aspiring adviser to Modi. Very quickly, the delusional notion that India was, as Foreign Affairs proclaimed on its cover in 2006, a "roaring capitalist success-story" assumed an extraordinary persuasive power. In India itself, a handful of corporate acquisitions – such as Tata's of Jaguar and Corus – stoked exorbitant fantasies of an imminent "Global Indian Takeover" (the title of a regular feature once in India's leading business daily, the Economic Times). Rent-seekers in a shadow intellectual economy – thinktank-sailors, bloggers and Twitterbots – as well as academics perched on corporate-endowed chairs recited the mantra of privatisation and deregulation in tune. Nostrums from the Reagan-Thatcher era – the primary source of ideological self-indoctrination for many Americanised Indians – about "labour flexibility" were endlessly regurgitated, even though a vast majority of the workforce in India – more than 90% – toils in the unorganised or "informal" sector. Bhagwati, for instance, hailed Bangladesh for its superb labour relations a few months before the collapse of the Rana Plaza in Dhaka; he also speculated that the poor "celebrate" inequality, and, with Marie Antoinette-ish serenity, advised malnourished families to consume "more milk and fruits". Confronted with the World Health Organisation's extensive evidence about malnutrition in India, Panagariya, ardent patron of the emerging giant, argued that Indian children are genetically underweight.
This pitiless American free-marketeering wasn't the only extraordinary mutation of Indian political and economic discourse. By 1993, when A Suitable Boy was published, the single-party democracy it describes had long been under siege from low-caste groups and a rising Hindu-nationalist middle class. (Sunil Khilnani's The Idea of India, the most eloquent defence and elaboration of India's foundational ideology, now seems another posthumous tribute to it.) India after Indira Gandhi increasingly failed to respect the Nehruvian elite's coordinates of progress and order. Indian democracy, it turned out, had seemed stable only because political participation was severely limited, and upper-caste Hindus effectively ran the country. The arrival of low-caste Hindus in mass politics in the 1980s, with their representatives demanding their own share of the spoils of power, put the first strains on the old patrimonial system. Upper-caste panic initially helped swell the ranks of the BJP, but even greater shifts caused by accelerating economic growth after 1991 have fragmented even relatively recent political formations based on caste and religion.
Rapid urbanisation and decline of agriculture created a large mass of the working poor exposed to ruthless exploitation in the unorganised sector. Connected to their homes in the hinterland through the flow of remittances, investment, culture and ideas, these migrants from rural areas were steadily politically awakened with the help of print literacy, electronic media, job mobility and, most importantly, mobile phones (subscribers grew from 45 million in 2002 to almost a billion in 2012). The Congress, though instrumentally social-welfarist while in power, failed to respond to this electorally consequential blurring of rural and urban borderlines, and the heightened desires for recognition and dignity as well as for rapid inclusion into global modernity. Even the BJP, which had fed on upper-caste paranoia, had been struggling under its ageing leaders to respond to an increasingly demanding mass of voters after its initial success in the 1990s, until Modi reinvented himself as a messiah of development, and quickly found enlarged constituencies – among haves as well as have-nots – for his blend of xenophobia and populism.
A wave of political disaffection has also deposited democratic social movements and dedicated individuals across the country. Groups both within and outside the government, such as those that successfully lobbied for the groundbreaking Right to Information Act, are outlining the possibilities of what John Keane calls "monitory democracy". India's many activist networks – for the rights of women, Dalits, peasants and indigenous communities – or issue-based campaigns, such as those against big dams and nuclear power plants, steer clear of timeworn ideas of national security, economic development, technocratic management, whether articulated by the Nehruvians or the neo-Hindus. In a major environment referendum last year, residents of small tribal hamlets in a remote part of eastern India voted to reject bauxite mining in their habitats. Growing demands across India for autonomy and bottom-up governance confirm that Modi is merely offering old – and soured – lassi in new bottles with his version of top-down modernisation.
Modi, however, has opportunely timed his attempt to occupy the commanding heights of the Indian state vacated by the Congress. The structural problems of India's globalised economy have dramatically slowed its growth since 2011, terminating the euphoria over the Global Indian Takeover. Corruption scandals involving the sale of billions of dollars' worth of national resources such as mines, forests, land, water and telecom spectrums have revealed that crony capitalism and rent-seeking were the real engines of India's economy. The beneficiaries of the phenomenon identified by Arundhati Roy as "gush-up" have soared into a transnational oligarchy, putting the bulk of their investments abroad and snapping up, together with Chinese and Russian plutocrats, real estate in London, New York and Singapore. Meanwhile, those made to wait unconscionably long for "trickle-down" – people with dramatically raised but mostly unfulfillable aspirations – have become vulnerable to demagogues promising national regeneration. It is this tiger of unfocused fury, spawned by global capitalism in the "underdeveloped" world, that Modi has sought to ride from Gujarat to New Delhi.
"Even in the darkest of times," Hannah Arendt once wrote, "we have the right to expect some illumination." The most prominent Indian institutions and individuals have rarely obliged, even as the darkness of the country's atrocity-rich borderlands moved into the heartland. Some of the most respected commentators, who are often eloquent in their defence of the right to free speech of famous writers, maintained a careful silence about the government's routine strangling of the internet and mobile networks in Kashmir. Even the liberal newspaper the Hindu prominently featured a journalist who retailed, as an investigation in Caravan revealed, false accusations of terrorism against innocent citizens. (The virtues of intelligence, courage and integrity are manifested more commonly in small periodicals such as Caravan and Economic and Political Weekly, or independent websites such as Kafila.org and Scroll.in.) The owners of the country's largest English-language newspaper, the Times of India, which has lurched from tedium to decadence within a few years, have innovated a revenue-stream called "paid news". Unctuously lobbing softballs at Modi, the prophets of electronic media seem, on other occasions, to have copied their paranoid inquisitorial style from Glenn Beck and Rush Limbaugh. Santosh Desai, one of contemporary India's most astute observers, correctly points out that the "intolerance that one sees from a large section of society is in some way a product of a 'televisionised' India. The pent-up feelings of resentment and entitlement have rushed out and get both tacit and explicit support from television."
Is India at a Turning Point? - Trends in India's Political Economy
Pratap Bhanu Mehta
President & Chief Executive, Centre for Policy Research
With India's Lower House election approaching in less than half a year, the eyes of the world are fixed on the future of India's political landscape.
The Japan Foundation and International House of Japan co-organize the Japan-India Distinguished Visitors Program, with the purpose of inviting eminent Indian public figures to Japan and providing a platform for continuous dialogue between the two countries. In its second year, the Program welcomed the 2013 invitee Dr. Pratap Bhanu Mehta, president of one of the most prestigious think tanks in India and whose columns regularly appear in the media, and hosted a lecture titled "Is India at a Turning Point? - Trends in India's Political Economy."
In this lecture, Dr. Mehta summed up the decade-long Congress Party government led by Prime Minister Manmohan Singh, and also dared to predict the "unpredictable" result of the elevation and its implications. In addition, Dr. Mehta analyzed where India stands at this point in time from a broad perspective, including the influence the new political situation will have on India's diplomatic and economic policies.
(The following lecture was recorded at Iwasaki Koyata Memorial Hall, International House of Japan on January 16, 2014.)
One simple way to think of what is happening in India is in terms of a framework of two interrelated crises - both political and economic - that India has undergone over the past three to five years.
First off, to put things in their historical context, traditionally, India has been a very "noisy" democracy, but often there is much activity without much actual progress. As such, it is important to distinguish between long-term trends in India, and short-term "noise." However, I believe India is on the cusp of a fundamental transformation - one that other democracies have experienced in the past as well.
As we know India is a very robust and vibrant democracy. There is no doubt about how deeply entrenched democracy is India. In fact, it is one of the few places in the world where voter turnout rates are actually increasing. Furthermore, historically, India has one of the highest rates of anti-incumbency of any democracy. In addition, Indian has deepened over the years, becoming increasingly inclusive of historically marginalized groups.
However, there remains one fundamental flaw in Indian democracy. While it had become representative, it was not a very responsive democracy. The structures of the Indian state seemed to be very slow to meet the demands of the people and was very inefficient. This is not limited to business but applies also to the delivery of basic social services. While such a gap between representation and responsiveness exists to some extent in all democracies, in India's case this gap was systemic.
Principles of Indian administration
Indian administration was founded on four principles that did not suit democracy. First, the Indian system believed solely in vertical accountability, whereby members of government were only accountable to their superiors. There was very little horizontal accountability besides elections but these were only held once every five years. As such, there were very few mechanisms for addressing the inability of the government to provide a particular service.
Second, Indian government was founded on immense secrecy, with few citizens knowing how or why particular decisions were made. Confounding this issue was the fact that the government was the primary source of important information for its citizens.
Third, India has traditionally had a very centralized state system. This remains the case today, despite various decentralization efforts.
Fourth, the government enjoyed very wide discretion in how it governed. Of course, a level of discretion is afforded to all governments and this is indeed required for effective governance, but despite the existence of formal rules, in practice the Indian government exercised a very wide range of discretionary powers that extended all the way to the most basic decisions.
Winds of change
Nonetheless, positive change is afoot in India and the four principles of administration are being fundamentally challenged. There has been greater demand for horizontal accountability and citizens have been demanding grievance redressal mechanisms. Members of government will eventually not just have to satisfy their boss, but citizens as well.
The second major revolution in India is the change in the information order of the state. The enactment of the Right to Information Act has been one of the primary legislative causes of this. It has fundamentally ensured that Government secrets can no longer exist. In fact, the reason that so many corruption scandals have recently come to light is likely not an indicator of growing corruption, rather it is due to the fact that such information is increasingly being exposed. Additionally, civil society has become a much greater source of information than it ever was. Society is now producing new forms of self-knowledge across a range domains. These factors have resulted in a shift in the balance of information from the state to society.
The third major change is the growing calls for political participation and decentralization. This demand is most pronounced in rural areas of India. On the other hand, in urban India there is much further to go, as most cities have no clear governance structure. Nevertheless, there is great demand for decentralization.
Finally, while most people recognize that any government will require discretionary power, governments will now have to justify how it exercises such discretion. Moreover, it will have to do so much more widely and satisfy all stakeholders. In a sense, there has been demand for replacing discretion with public reason.
These changes partially explain the logjam in Indian politics over the last three to five years. The traditional principles of Indian administration are collapsing, resulting in the expunging of a lot of poison from the old system, and consequently a significant loss of legitimacy. This loss of legitimacy has also compromised the state's decision-making ability. In the meantime, the struggle for the new order is continuing. The direction is clear, but the question is, what new mechanisms will be put in place that reflect the aspiration for greater horizontal accountability, for more decentralization, further access to information, and governance that engages citizens in public reason.
Growing middle class
Despite the economic reforms of 1991, a number of sectors remained powerfully under state control such as natural resources; land, a particularly crucial resource in India; and arguably aspects of the financial market as well. Indeed, most of the recent corruption scandals have arisen in these sectors. The state continued to assume that it could govern these sectors with the arbitrariness it had always enjoyed. However, now, because of civil society mobilization, media, and the changing information order, the pressure to justify its actions has increased tremendously. Unfortunately the state was not used to justifying itself to the various stakeholders in good faith and gaining their trust. All governments have gone through such a transformation but the issue in India was that the state was very slow to recognize the fundamental changes in Indian society.
Much of this change has arisen due to the growing assertiveness of the middle class. I am actually referring to two middle classes in India - the global middle class (anybody who earns more than $10 a day PPP adjusted) or Indian upper class, at the top 8-10% of the income distribution, and the local middle class, whose income is greater than 80% percent but less than 200% of the median income. Both are growing, which has important consequences for Indian politics.
First, managing their expectations has become very complicated. Previously, most governments assumed they simply had to keep inflation low, avoid mass starvations or famine, and then build a coalition based on social identity. As incomes grow, their interface with the economy becomes increasingly complex, in forms such as greater demand for education or growing healthcare costs. However, politicians were slow to recognize that they could not craft coalitions in the same way as the past.
The second effect is that this growth increases the resources available to the government, resulting not only in a rise in opportunities for corruption, but also the possibility of the state doing more good for people. Consequently the gap between possibility and reality actually increases rather than decreases. So overall, the rise of the middle class is raising the possibility of creating new politics.
2014 general election
The practices of the Indian state had been found to be obsolete but no political parties recognized this. This was true of both the Congress Party and the principal opposition party. In any other democratic system, the opposition would have seized these issues as an opportunity to lambast the government. However, in India's case the opposition was also implicated in this system, making it difficult for people to mobilize through conventional channels of politics.
Both parties had closed systems. The Congress Party has no intraparty democracy. Similarly, while the BJP is more of an open system, given its origins in Hindu nationalism it has always been governed by a small group of organizations outside the party. Therefore, it became very hard for new entrants and social formations to find expression in these entrenched political parties.
Furthermore, events such as the gang rape incident in Delhi, which saw a breakdown in law and order, sparked serious civil society mobilization, but the inability of these movements to channel themselves through conventional political parties gave rise to fierce anti-political sentiment. This sentiment was first channeled in the anti-corruption movement, and now the AAP, or Common Man Party, has just scored a major electoral victory in Delhi.
The AAP's rise demonstrated a number of things. First it is possible to fight elections in India based on new and clean sources of funding. Older parties would justify corruption by citing the need to fund elections, which are actually more expensive than those of the United States, even in absolute terms. Secondly the AAP's presence is forcing the two main parties to respond. The passing of anti-corruption legislation and the creation of the anti-corruption Lokpal entity is a testament to the success of the AAP. Furthermore, the party has also reengaged the Indian middle class in politics, which as a highly privatized class had been distancing itself from the state apparatus.
The coming election is highly significant and different. It is being squarely fought on a new institutional architecture and on the promise of better service delivery. Even the BJP Party's candidate, Narendra Modi, despite his controversial past, is trying to present himself as a new political force. The AAP is also emphasizing its newness arguing that the BJP shares many of the institutional characteristics of the Congress Party. The coming elections will see a new range of issues discussed and will differ from past elections on two fronts. Firstly there will be greater middle class mobilization on the issue of corruption. Secondly, the parties are talking about systemic change and new institutional forms. As one of the leaders of the AAP put it, previously the debate in India was about substitutes, but now it is about finding an alternative.
One of the big disappointments in recent years was the slow-down in the India Economy with growth rates dropping from over 8% to just under 5%. India faced an alarming current account deficit problem, but more importantly, inflation was at a historic high. So what happened to the Indian economy? Honestly speaking, there is no straightforward explanation - in fact the reason why India's economy was growing at 8% in the first place remains unclear.
Nevertheless, there were a number of factors. First, despite assertions by main policymakers to the contrary, the Indian economy was not decoupled from the global economy and was affected by the global slowdown like all other emerging markets.
At the same time most economists believe India's problems were home-grown. The first of these was the standstill in domestic investment, both public and private, in the infrastructure and power industries. This was the result of the recent corruption scandals, which made decision-making very difficult. The challenges of decision-making were further compounded by the growing environmental movement among citizens and the lack of an appropriate environmental regime to respond to these demands.
Of course, infrastructure and power heavily impact the rest of the economy and many people argue that Indian inflation is the result of such supply-side constraints. As inflationary expectations set in, the reserve bank had to keep interest rates relatively high, which some argue dampened growth. Once growth slowed, the actual projects that had been invested in then became less viable, leading to much unproductive sunk capital.
There was also a fiscal deficit. In fact, the finance minister has acknowledged that the 2009 stimulus package was a major mistake. The spending itself was not the problem. The problem was it mostly took on unproductive forms, owing partly to corruption but also the government's choices. So this vicious cycle of falling growth and high inflation made Indian private investors nervous and reluctant to invest. Furthermore, as the economy slowed down, Indian consumers began buying gold, which created a current account deficit problem.
My own sense is that the worst is over and I believe this view is widely shared amongst Indian entrepreneurs. My first reason for thinking this is the growing recognition that India cannot be governed by the old rules, which, in the long-term, should promote investment. New processes and regulations have been put in place, and while it may take some time for everything to settle, over time, the limiting of the government's discretionary powers and the greater predictability of the system will be good for investors.
Secondly, whichever government comes to power, they will likely enjoy at least a short period of legitimacy. The current government has suffered such a loss of legitimacy that even when doing the right thing, it has not been afforded any trust from the public. Additionally, inflation has finally begun to taper, so there are reasons to be cautiously optimistic.
Predicting the election results
Overall, India is undergoing a large structural change and the coming election will be fought on the agenda of "newness." Even Rahul Gandhi, representing the oldest incumbent party, is trying to project himself as an outsider to the system. As such, I think it is encouraging that no one wants to claim allegiance to the old system.
In terms of results, as things stand, there is a consensus that the Congress Party will do very badly. Their credibility has been disastrously eroded. A couple of months ago it looked like the BJP would be able to score a significant enough electoral victory to at least form a stable coalition. However, the rise of the AAP has complicated things, making it very hard to predict the election results. We are entering genuinely uncharted territory. Such a three-way political contest has not been seen in India, particularly urban areas, in a very long time. There is also evidence that voter patterns are changing. For example, the AAP won the vote of both the ultra-rich and ultra-poor in the Delhi elections, contradicting conventional assumptions about identity politics in India.
Finally, my own research of elections since 2004 reveals a peculiar phenomenon whereby the party that eventually wins gains a small additional surge just before the elections commence. This suggests that when voters wish to vote a party out, in the end they opt for the party that is most likely to form an alternative stable government. If my hypothesis is true, then the BJP, as the single largest party, will gain a final surge.
The good news is that this election will be about governance; indeed a new governance architecture is beginning to take shape. However, it is unknown how well Mr. Modi of the BJP would fare as a policy-maker. Similarly, the AAP is still an entity in the making. So for both parties, no one knows what the core theme will be. In that sense, we are also in an area of uncharted territory in terms of policy. Nonetheless, I see this as an opportunity rather than a constraint. The BJP and AAP are relatively blank slates and India is facing a moment of transformation and therefore great opportunity. I am sure whoever comes to power will recognize the failures of the past five years, and understand the importance of avoiding an economic slowdown.
Following Dr. Mehta's lecture, a lively and thought-provoking Q&A session was held, with Dr. Kiichi Fujiwara, a professor at the University of Tokyo, serving as the moderator.
――Truly the beginning of something new?
The negative sentiment towards the old system certainly has some momentum to it and to some extent, the AAP's election victory in Delhi represented more a loss of faith in this system than unanimous approval for the AAP. It could perhaps even be interpreted as a protest vote. However, one factor that should ensure that the upcoming elections do bring about real change is the fact that India is a very large federal country. That makes it very difficult for a new party to gain dominance quickly. This forces even new parties to engage in the process of building consensus. India's size perhaps also explains the lack of volatility in the political system. When the direction is set, change in India happens incrementally, but there is very little reversal in direction. While the pace of change will probably be less than revolutionary, I believe we are headed in the right direction.
――The changing political landscape and India's foreign policy
It is important to India's identity to be a liberal democracy. More importantly than that India's identity has always involved a level of balance. For example it is a Western enlightenment power but is based in Asia. Similarly, it is a Hindu country but also the second most important Muslim country. I believe this social identity has a huge impact on foreign policy while also maintaining balance. India will not be a revisionist power, and, fundamentally speaking, India is committed to an open and fair architecture of the world. At least outside the sub-continent, India is a very non-threatening power. The biggest question is India's interaction with its neighbors. One line of argument is that only a BJP government can find a settlement with India's neighbors. There are two reasons. First, some believe only the BJP have the power to broker compromise. Second, people believe the BJP is much nastier as an opposition party and will be much more reasonable when in power. Overall, the structure of Indian society means we are unlikely to see a dramatic shift in India's outward policy.
――Reexamining the market economy
Certainly since the global financial crisis there has been vigorous debate about what a market economy entails and what its weaknesses are. I believe there are two issues that require further examination. In the classic conception of the market economy, the market is private and the state is public, with distinctions being based primarily on ownership. Now we have seen a big shift with many recognizing that ownership does not determine how an institution behaves or what structures of accountability it requires. Rather it is a question of the function a particular institution performs and the externalities this entails. The second issue is a more fundamental one and ties in with Larry Summers' theory of "secular stagnation." One assumption on which the market economy is predicated is that productivity growth and employment growth can occur in parallel. However, if this is in fact false, then we will need to question how much and what benefits the market economy brings with much more creativity. I do not believe the market economy should be scrapped, but if market economies produce permanent structural unemployment, then we will need to reexamine this concept.
(Photo: Kenichi Aikawa)
Pratap Bhanu Mehta
President & Chief Executive, Centre for Policy Research. His areas of research include political theory, constitutional law, society and politics in India, governance and political economy, and international affairs. He was previously a Visiting Professor of Government at Harvard University and NYU Law School and has been a member of the Government of India's National Security Advisory Board, and the World Economic Forum's Global Governance Council. As an editorial consultant to the Indian Express, his columns have also appeared in a number of national and international dailies including the Financial Times, Telegraph, International Herald Tribune, The Hindu, and Outlook. He is the recipient of the 2011 Infosys Prize for Social Sciences - Political Science.