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The Telegraph
Since 1st March, 1999
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- India’s swift transition to a state of repose
Cutting corners

One strains in search of an alternative explanation, and finally gives up. The long and short of the unleashing, anew, of the ‘animal spirit’ in New Delhi is simply to invite foreign forces to come and take total charge of the Indian economy. The animal spirit, not of countrymen, but of foreigners, is being invoked, the partly incoherent gibberish in the confessional proceeds something in this manner: kindly forgive the timidity and dilatoriness you had been rightly noticing in us, our prime minister perhaps deserves all the tongue-lashing you have directed towards him, we pledge to turn a new leaf from now on, do come and indulge in all the plundering you have the genius for, the Indian administration is determined to serve you in every possible way; if, as offshoot of the fresh initiative you gracious friends undertake, a handful of we natives are able to accumulate some extra income and wealth, that would be a lovely extra bonus.

Of course the new ‘reforms’ agenda includes a few other items, like disinvestment in public enterprises that have been making lush profits. Here too, though, foreigners could expect to have a finger in the pie. Once the rote of disinvestment is on, a significant fraction of the equity of these undertakings would get transferred to foreign hands. Or take into account the matter of the sudden reversal in bank rate policy. Till mid-August, the Reserve Bank of India was enforcing a regime of relatively tight money and seemed to be in a stern, inflexible mood. The Federal Reserve Board, the supreme monetary authority in the United States of America, however announces at that point its resolve to flood the American economy with liquidity and even more liquidity for the next few months continuously. India’s monetary bosses holding count in Mumbai’s Mint Road were in a scampering hurry to fall in line, interest rates hastily came down here as well. Foreign masters give the lead, we follow.

A further comment is worth appending. This second innings of the ‘reforms’ is in every sense in the nature of a last prayer. Self-reliant growth goes ill with the kind of inegalitarian social and economic structure presided over by a narrow oligarchy. The pre-Independence commitments were therefore ditched without ceremony once the oligarchy had entrenched itself. It is nonetheless equally difficult for a hugely populated country such as India to experience a smooth-flowing export-dependent growth; the difficulty is greater if those in power are adamantly against eliminating domestic inequalities. A brief optimism had spurted in the first decade of the new century around the tantalizing expansion in the information technology sector and a few other areas mainly caused by rising demand from overseas. Select groups associated with these activities accumulated undreamt-of wealth. Renewed crisis in the US and Europe has brought to a rapid end that illusion-creating phase. Foreigners bestowed that short spell of well-being, the dividends of which were duly appropriated by society’s deciles; with foreigners unable to dispense further favours, it is once more darkness at noon. The fumbling government barely functioning in New Delhi knows no other way of salvation beyond reliance on foreign guardians. It is an extraordinary instance of unshakable faith; our foreign friends might have made a hash of their own economies; even so, they are capable of waving the magic wand and bailing out India. This desperate belief influences official measures that are being unveiled every day, so much so that the country has finally reached the stage where it is nearly indistinguishable from a comprador order. Decisions are being announced not for advancing the welfare of citizens of the country, but for furthering the cause of foreign parties. The comprador ideology, after all, focuses on a single criterion to decide on the issue — any issue — at hand: if the specific decision promises additional gains to foreigners, it is to be welcomed; if the decision would hurt foreigners, it is to be aborted. With clarity reached on this central point, everything else follows in a routine manner. Governance becomes child’s play. The administration principally exists to foster the interests of foreign parties even if the activities undertaken for that purpose portend grievous consequences for your own nation; you exist, but you exist as hukumbardars, to carry out the orders of foreigners, you have forfeited other identities.

Argumentative types will conceivably like to drag the debate. It will not do, they will say, to take liberty with facts. It simply is not true either that all crucial economic decisions have already begun to be taken by according priority to the point of view of foreign parties and ignoring domestic interests or that few areas remain where Indians could break out on their own without waiting for the nod of approval of foreign powers. In several instances in the recent period, Indian capitalists, it will be pointed out, have deployed the finances they own or control to set up industrial or commercial empires in African, European and Latin American countries; they have even outbid and outmanoeuvred foreign corporate entities before they could establish themselves on alien soil. Are not such independent initiatives irreconcilable with the attributes of a comprador system?

The point made certainly deserves a counter-point. An Indian tycoon investing overseas has the option of using his capital towards ameliorating the economic conditions of the Indian people by investing it at home. He exercises his preference and opts out of India. He chooses to use his capital to create opportunities for additional income and employment for foreigners rather than for his own countrymen. Does it not mean that he has in fact not strayed away from the comprador mind-set? Catering to foreign interests comes first, the country he is the native son of must learn to wait.

A theme attracting polemics is not generally allowed to quieten after just one round of a slanging match. Maybe the tycoon would have dearly loved the freedom to choose on his own the area of investment back home, at the same time looking forward to enjoying a rate of returns higher than, or at least equal to, what he was expecting from investing in the foreign country. He did not have that freedom; land, according to the conditions of the specifications, was not easily available, preliminaries needed to be negotiated with too many bureaucratic levels and, of course, there was the daunting prospect of unstable industrial relations. The tycoon might well protest that he suffered from no comprador complex, it was the iffy domestic situation which turned him into an expatriate investor. It should however be permissible to address a further question at him. Given the state of global economic circumstances, is the level of risk-cum-uncertainty in overseas investments any less in the outside world? What does recent history say?

No, the overwhelming factor at work is the waywardness of belief, no pride is left in serving the country’s cause, there is no percentage in patriotism in any quarters. Once bounced off from the path of self-reliance, the transformation of attitude has been breathtaking. Thanks particularly to the perseverance of the past couple of decades, India is currently dangerously close to being an out-and-out dependent economy, and this in spite of the enormously rich stock of physical and natural resources supplemented by formidable intellectual and technological capability. Membership of BRIC is both a smokescreen and a face-saver, none is deceived.

Why a supposedly great nation, barely half a century ago the lofty torchbearer of the great non-aligned movement, has come to such a pass calls for some introspection. But perhaps not too much of it. The narrow oligarchy which has come to capture political power in the country did not take time to catch on to the hard reality that self-reliant growth at a satisfying rate calls for both a thoroughgoing redistribution of income and assets as well as a total de-centralization of the administrative system. The oligarchs, fearful of losing authority in the wake of such drastic changes, backed away and did a somersault. Even as political conservatism expanded its hegemony within the country, international relations too underwent a severe change of complexion. Facing growing disenchantment at home, the oligarchy felt beholden for the protection for it forthcoming from external sources, especially from the world’s mightiest power. What has followed is the swift transition to a state of repose, involving the surrender of key economic decisions to alien interests. There is no sense of shame. Rather, for the ruling oligarchs, it is a badge of honour that India is well on its way to becoming a full-fledged comprador land.