After demonetisation, investors and the BJP’s intellectual community are confused: Will Modi take a socialist path or will he stick to being a market-friendly prime minister?
Some contradictory claims have emerged within the intellectual community close to the BJP over Narendra Modi’s post-demonetisation politics. This is interesting because it also signifies some of the deeper fault lines in Modi’s approach to India’s complex political economy. Writing in The Telegraph, Rajya Sabha MP Swapan Dasgupta, who is a liberal interpreter of the BJP’s policies, has argued that Modi may be on the verge of executing a “dramatic socio-political realignment” after his demonetisation move. Swapan is suggesting that the economically disempowered, cutting across caste and other identities, may be willing to stand behind Narendra Modi by endorsing his demonetisation experiment. He sees the results of various local, municipal elections in Chandigarh, Faridabad, Maharashtra etc as possible, if not conclusive, evidence of the major socio-political realignment effected by Modi. However, being a proponent of the economic right wing, Swapan also suggests that Modi’s project is modernist in character and the government is not likely to slip into some old style socialism practiced by the Congress of the 1960s and 1970s.
A polar opposite interpretation of Modi’s post-demonetisation politics has come from Rakesh Sinha, a political science lecturer at Delhi University, who is widely known for publicly articulating the Sangh Parivar’s views on social and political issues. In an article in the Indian Express last week, Sinha argued that demonetisation is aimed at reviving the egalitarianism proposed by socialists such as Gandhi, Ram Manohar Lohia, Jayaprakash Narayan and Deendayal Upadyhay. More importantly, Sinha says the primary objective of demonetisation is to create a future political economy which prevents the depoliticisation of Indian society by West-driven, neoliberal economic policies. This sounds closer to the Indian left’s position on economic policy. Interestingly, Sinha also suggests there is a common ground of resistance to western neoliberal policies which already exists in the programmes of various political parties. He says there is a need to get away from the traditional binary of the Left and Right and explore commonalities. Of course, Swapan Dasgupta, being anti-left himself, would totally disagree with this proposition and insist that Modi is modernist and right wing in his approach. Some of the western-educated economic policy makers within the government may also agree with Swapan’s view of Modi’s basic thinking.
But Modi presents himself as a bit of an enigma and appears different things to different people. Often, this lack of clarity flows from expediency of electoral politics. Therefore, one still doesn’t have a clear idea of what he really stands for. He has publicly declared his allegiance to the thinking of Gandhi, Lohia and Narayan. He is equally comfortable addressing American corporation heads in the presence of the US president and promising them the moon. As chief minister in Gujarat, he never invoked socialist stalwarts like Lohia and Narayan even as he invited big capital with huge concessions.
In short, Modi appears to be presenting a confused ideological picture even to the intellectuals and interpreters of his policy within the Sangh Parivar. This was reflected last week in a full day conference organised by Swadeshi Jagran Manch, the economic think-tank of the RSS, where the Niti Aayog’s policy prescriptions were roundly criticised as neoliberal and anti-poor.
Post-demonetisation, these ideological contradictions have sharpened further as there is pressure on the prime minister to deliver for the poor who have suffered immensely from notebandi. The RSS stands by Modi but also recognises that demonetisation has caused massive shutdowns and job losses in the small and medium businesses sector. So, Modi will find himself pulled in different directions due to pressures from socio-political forces.
These obvious contradictions, best seen in the positions taken by Swapan Dasgupta and Rakesh Sinha, are causing a great deal of anxiety among stock market investors too. Recently, I met over a dozen domestic and foreign mutual fund investment heads who have cumulatively invested over $30 billion in India’s stock markets. The one question bothering them all was: Post-demonetisation, will Modi take a socialist path like Indira Gandhi in the late 1960s or will he remain a market-friendly, neoliberal prime minister?
In fact, some investors feared that a BJP victory in Uttar Pradesh could be interpreted by Modi as a mandate for implementing greater state-led socialist policies as the prime minister might attribute the win to a socio-political realignment among the poor in favour of his party. Some of the investors I spoke to even remarked that a BJP defeat in Uttar Pradesh could discourage Modi from injecting a bigger dose of state socialism and ultimately result in a return to the ‘business-as-usual’ approach. In the midst of such anxious speculations, Narendra Modi is yet to fully reveal his real ideological self ; the one that will emerge from the unprecedented social disruptions caused by demonetisation.