Swadeshi leash on reform rush

New Delhi: The Narendra Modi-government is likely to face a number of challenges from within the Sangh Parivar to its economic policies after the Karnataka elections.

Swadeshi Jagran Manch, an RSS affiliate which holds highly nationalistic viewpoints on policies, has already warned the government of its opposition to strategic disinvestments, takeover of Indian retailers such as Flipkart by MNCs and the dilution of India's stand on not doing a deal on investment or food security at the WTO.

Swadeshi Jagran Manch and other Sangh Parivar outfits with hardline views on foreign investments, divestment and trade policy have a history of taking on the BJP successfully.

During Atal Behari Vajpayee's tenure as the Prime Minister, the RSS-affiliated outfit had attacked its plans of 49 per cent foreign investment in insurance and even engineered a revolt of sorts within the BJP parliamentary party ranks. The liberalisation move had to wait for nearly a decade-and-a -half to materialise. Till now, the Modi government has had an easy ride within the Sangh Parivar.

Murmurs of dissent on demonetisation and the GST were mostly stifled and did not impact the government. However, as problems persisted with the GST, right-wingers within the Sangh Parivar who use the Swadeshi Jagran Manch as their mouthpiece started warning that the new tax regime was hurting small businesses and traders, prompting the government to take a partial course correction such as reducing the tax rates on a host of items produced by small businesses and simplifying the process of paying taxes.

In the last year of the Modi government, the Sangh Parivar seems to have decided that it now has to become more vocal and make clear its priorities.

"We have not opposed the divestment of equity by this government, they did what they wanted to do... but now we are saying that we will draw the line on strategic divestment," said Ashwini Mahajan, the national co-convenor of the Swadeshi Jagran Manch.

Not unlike the Communists, who are the Sangh Parivar's ideological opposite, Mahajan and his colleagues do not believe that strategic divestment is a panacea for the state-run sector's ills.

"We feel a company can do well in the PSU sector as well as in the private sector and a mere change in the form of ownership is no guarantee that it will do better," argued Mahajan.

He has written to the government asking it to stop the strategic divestment of Air India and raise resources for the ailing carrier through a combination of IPO and asset sales.

"We will be submitting a report within a fortnight on the issue and feel that as the airline has brought down its cash losses considerably, the favours the government would have given to private bidders by way of paring the debt etc, can actually help in reviving the airline even if it remains a PSU," he said.

The bigger battle is on the FDI front. Arun Ojha, another leader of the Swadeshi Jagran Manch and the body's national convenor, had earlier criticised the Modi government's liberalisation of foreign direct investment norms in retail, defence and pharma, warning that instead of creating jobs, the move could cost jobs as MNCs take over the sectors.

The SJM last week wrote a strong letter to the Prime Minister against US retail giant Walmart for "circumventing" FDI to gain a "back-door entry" into India with its $16-billion majority stake acquisition of Flipkart and sought Modi's intervention to safeguard "national interest".

"These are signs that the Sangh Parivar feels that the honeymoon with globalisation a la divestment and FDI rule changes is no longer popular and these letters and statements are its way of warning the Modi government to toe a more nationalistic line," said Biswajit Dhar of the JNU.

"This government came with a huge mandate on job creation and economic security, which seems to have been missed out on. These people are really tapping into that disappointment," Dhar added.

There is, however, no doubt that many of the issues being picked up by the RSS are populist in nature. The SJM has written to commerce minister Suresh Prabhu warning against allowing the US to bring in negotiations on e-commerce and investments at the WTO.


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