Home » Business & Economy » Does Panagariya's sudden ouster signal Modi's rejection of Western Capital-based growth model
 

Does Panagariya's sudden ouster signal Modi's rejection of Western Capital-based growth model

Neeraj Thakur | Updated on: 9 August 2017, 14:16 IST
(Udit Kulshrestha/Bloomberg via Getty Images)

Arvind Panagariya's resignation from Niti Aayog should be seen as the decisive turn that Indian economy has taken after pursuing the US-dominated capitalist mode of development in the past 25 years. The new agenda will be the essential differentiator between the BJP brand of economics, represented by RSS' idea of Swadeshi, and the Congress idea of a globalised economy.

This would also mean that the Gujarat model of development, as represented by Prime Minister Narendra Modi, where foreign capital played an important role in achieving economic growth will take a backseat.

At its peak, it is also likely to result in India's changed outlook towards the treaties it has agreed to on platforms like the World Trade Organization, World Bank and the International Monetary Fund (IMF).

Any doubts pertaining to this outcome was put to rest with the article written by Niti Aayog's new vice chairman, Rajiv Kumar for a Hindi daily Dainik Jagran.

In his column, as translated by the Indian Express, Kumar says –

“A key transformation taking place on the policy front in the current central government led by Narendra Modi, is that the colour of foreign influence, especially Anglo-American, on the Indian policy making establishment that came in the last few decades, is fading away. Raghuram Rajan has already left. Now, Arvind Panagariya has also announced his resignation from his post ahead of his term being completed. If Lutyen’s Delhi rumours are to be believed, more such resignations can come. In their place, we may see experts being posted who understand India’s ground realities in a much better manner, and who can commit to stay and work till their term ends.”

What does 'foreign influence' mean?

In the 1990s, India took an economic shift in favour of foreign capital-based growth in the country. The model required India to follow the economic rules set by the West dominated institutions like the World Trade Organization, World Bank and the International Monetary Fund. While this economic shift was seen as the trademark of the Congress government, the BJP – as advised by its ideological parent RSS – was seen as the opposing force to it.

But, when the first BJP government came to power under then Prime Minister Atal Bihari Vajpayee, to the RSS' surprise, it took the same line as the Congress on all economic matters.

In fact, it is believed that the pace at which the Vajpayee government pursued the policy of privatisation of the Indian economy and disinvestment of the public sector units, neither the Congress government under Narasimha Rao in 90s nor the Manmohan Singh government in the 2000s could match it.

In the run-up to the 2014 elections, Modi projected himself as a true capitalist with a mission to run the economy on the principle of “Minimum government, maximum governance”. Fueled by his roadshows abroad, the country received highest FDI in 2015 – at $63 billion. India, under Modi, seemed like a better playground for the western capital.

Ouster of the capitalist school of thought

But three years down the line, as the BJP increases its foothold in the Indian Parliament as well as state legislatures, the RSS' idea of an ideal Indian economy seems to be taking over.

Though the first signs of RSS' influence in government's economic policy were manifest in the ouster of RBI governor Raghuram Rajan in September 2016, but many interpreted that development as government's vendetta against an economist who was appointed by the previous UPA government.

But a clear pattern with the RSS trademark has emerged in the way Panagariya – chosen by PM Modi himself – vacated his post.

Rajan and Panagariya, even though appointed by two different governments, represented the school of thought that saw eradication of poverty as dependent on the capitalist structures of production dependent on foreign capital.

In comes Swadeshi

Ashwini Mahajan, national co-convenor of RSS' economic wing, Swadeshi Jagran Manch, laid out the future path that the India economy is likely to pursue, under the BJP government.

“The mentality of economists who have been trained in the western capitalist structure do not understand the pain of Indian farmers, poor and the marginalised. For them, growth is an end itself. This is why in the past 25 years, what we had was a jobless growth. Which gave more money to the corporates in the form of tax rebates, while the poor were exploited. This needs to change now, and this will happen only when we have economists and policy makers who have researched in India while staying here. We do not need people who land in India from parachute and make a flight whenever they feel like,” Mahajan said.

Mahajan, criticised the past governments for getting into treaties that allowed Europe and US to subsidise things for their farmers, while Indian farmers were left to fight the market forces.

“Their share in net value added (production), was 78% in 1990s, and it came down to just 41% by 2010. At the same time, the share of private sector profit has gone up from 19% to 57% in the same period,” Mahajan said.

Can Swadeshi be called Socialism?

The Swadeshi Jagran Manch ever since it came to being, had been opposed to the idea of FDI (Foreign Direct Investment), private sector control over education and healthcare.

Interestingly, the Socialists in the country, often represented by the communist parties in India and the non-government organisations (NGOs), too have espoused the same economic line ever since liberal economic thought spread its wings in India.

This brings us to the question: Wouldn’t RSS and BJP be afraid of being called Socialists by toeing anti-capitalism line?

“You cannot hide the faults of capitalism by calling the opposing thoughts as represented by Socialists. We follow the humane approach. We have to save our farmers. Why should our farmers suffer because Europe and US give subsidy to their farmers calling it Socialist. We have always supported the idea of indigenous growth and have always opposed capitalism. Our idea is to promote 'Swadeshi' and that is the only way to build a prosperous nation,” Mahajan said.

Will the Swadeshi ideology in its purest form require the reversal of all the treaties signed by India under the aegis of the WTO and other capitalist institutions?

For Mahajan “it is too early to pronounce such an outcome”. But definitely, his organisation, that represents the economic idea of the RSS, “wishes for that day to come”.

First published: 9 August 2017, 14:16 IST
 
Neeraj Thakur @neerajthakur2

सीनियर असिस्टेंट एडिटर, कैच न्यूज़. बिज़नेसवर्ल्ड, डीएनए और बिज़नेस स्टैंडर्ड में काम कर चुके हैं.

PREVIOUS STORY
NEXT STORY