IMPACT OF NEOLIBERALISM ON INDIAN POLITY

 

Indian polity is founded on the principles of a parliamentary federal government and a liberal democratic state and society. This theoretical foundation of the Indian state and society is clearly outlined in the constitution of India (1950). The ideas of Fabian socialism and welfare state also find expression in Part IV of the Constitution on directive principles of state policy. However, these principles are not justifiable in the courts of law in contrast to Part III on Fundamental Rights of citizens and communities, which are legally enforceable. Fundamental duties of citizens are like the directive principles, empowered with moral rather than legal sanction. The constitution is also at pains to point out, that the directive principles, even though non-justiciable, are to be "fundamental in the governance" of the country. The constitutional courts – the Supreme Court and High Courts – have often invoked the directive principles to buttress their rulings, some times even going to the extent of clothing with the status of fundamental rights.

            In practice, the Indian state led by the first Prime Minister Jawaharlal Nehru, initiated a massive strategy of development of what it professedly called "socialistic pattern of society" by the means of centralized democratic planning. It actually amounted to industrialization under a dominant public (read state) sector in a mixed economy (public + private) aimed at a nationally reliant industrial economy. Due to distortions, like the trend of neo-feudal rent-seeking in the public sector and in the governmental apparatus in general, the Indian state was driven to make a paradigm shift to neoliberal capitalist reforms in 1991 to deal with a serious crisis of balance of payment in international trade and the fiscal overload on the governments in India under pressures of neo-feudal rent-seeking by the political and bureaucratic class as well as populist public policies to placate a socially and politically mobilized demanding electorate.

            This paper purports to briefly discuss the impact of the neoliberal shift on some aspect of the foregoing features of the Indian polity. The impact of these policies have been discussed more often in the contexts of the society, economy, and culture than in that the polity. We make a modest attempt to sketch out their impact on the polity in this chapter. Basically, we delimit our discussion to the impact on (a) democracy, and (b) federalism. In the concluding observations we raise some theoretical points about the interface between the Indian state and the neoliberal state and the crisis of justice and legitimacy in it.

            Prima facie, India appears to be a fairly successful case of a developing democracy in the South both in terms of free and fair elections and governance. But if we probe deeper, this impression does not stand scrutiny. With the neoliberal paradigm shift in the economic policy regime in India, especially since 1991, two major trends have evidently gathered momentum. These are (a) the rise in the clout of the capitalist classes in the industrial / commercial / service / agricultural sectors, and (b) the rise of politics of identity and ethnicity, most strongly mobilized in the form of Hindutva in the national arena and a variety of regional parties based on religious, caste, and tribal identities. There has also been an unprecedented growth of the weeds of corruption and criminalization of politics since the rise of neoliberalism in the Indian political economy. It is not our case that these vices were non-existent prior to the neoliberal shift; rather that they have become more endemic since then.

            The foregoing new trends in the Indian polity have had a considerable corrosive effect on the elections, party system, and governance. Corruption and criminalization of politics have made the elections an affair of the rich and powerful, by and large. This point is illustrated by the fact presented in Table 1 on the number and proportion of Crorepatis in the 15th Lok Sabha elected in 2009. Table 2 presents similar data on those charge-sheeted with crime in the 15 Lok Sabha. These data in the tables are also disaggregated party-wise. In the House as a whole,  57. 80 percent of MPs are Crorepatis. In the two major national parties the percentage of such members is as high as 70.87 percentage in the Indian National Congress and 50.86 percent in the Bharatiya Janata Party. In several regional or nominally national parties  the percentages are also quite high or in fact higher: All India Anna Dravida Munnetra Kazhagam 55.55, Bahujan Samaj Party 61.90, Dravida Munnetra Kazhagam 72.22, Janat Dal (Secular) 100.00,  Nationalist Congress Party 77.78, Janata Dal (United) 40.00,  Rashtriya Lok Dal 80.00, Jammu and Kashmir National Conference 66.67, Rashtriya Janata Dal 50.00, Biju Janata Dal 42.00, etc. The percentage of the charge-sheeted MPs in the two major national parties are 37.93 in the BJP and 21.36 in the INC. In other parties the proportion ranges from 100.00 in most smaller parties and 18.75 in the Communist Party of India (Marxist).

Table-1

Party-wise Number of Crorepati MPs in 15th Lok Sabha Elected in2009

 

Serial No.

Political Party

No. of Crorepati MPs

Total MPs of the Party

Per cent of Crorepatis in the Party

1.

ADMK

5

9

55.55

2.

AITC

7

19

36.84

3.

AUDF

1

1

100

4.

BJD

6

14

42.86

5.

BJP

59

116

50.86

6.

BSP

13

21

61.90

7.

CPM

1

16

6.25

8.

DMK

13

18

72.22

9.

HJCBL

1

1

100

10.

INC

146

206

70.87

11.

JD-S

3

3

100

12.

JD-U

8

20

40

13.

JKN

2

3

66.67

14.

MDMK

1

1

100

15.

NCP

7

9

77.78

16.

RJD

2

4

50

17.

RLD

4

5

80

18.

SAD

4

4

100

19.

SDF

1

1

100

20.

SHS

9

11

81.81

21.

SP

14

23

60.87

22.

TDP

3

6

50

23.

TRS

2

2

100

24.

INDIPENDENTS

3

9

33.33

25.

OTHERS

0

23

00

TOTAL

315

545

57.80

Note: * The category includes the parties that do not have any Crarepati members.

Source: Compiled and computed fromhttp://adrindia.org/images/pdf/ls2009_fullassetdet.pdf and http://eci.nic.in.

 

 

 

Table-2

Pending Criminal Cases on MPs of 15th Lok Sabha Elected in 2009 (Party-wise)

 

Serial No.

Political Party

No. of Accused MPs

Total MPs of the Party

Per cent of Accused in the Party.

1.

ADMK

4

9

44.44

2.

AIFB

1

2

50

3.

AIMIM

1

1

100

4.

AITC

4

19

21

5.

BJD

4

14

28.57

6.

BJP

44

116

37.93

7.

BSP

6

21

28.57

8.

CPM

3

16

18.75

9.

DMK

4

18

22.22

10.

INC

44

206

21.36

11.

JD-S

2

3

66.66

12.

JD-U

8

20

40

13.

JMM

2

2

100

14.

JVM

1

1

100

15.

MDMK

1

1

100

16.

NCP

4

9

44.44

17.

RJD

3

4

75

18.

RLD

2

5

40

19.

SAD

1

4

25

20.

SHS

9

11

81.81

21.

SP

9

23

39.13

22.

TDP

2

6

33.33

23.

TRS

1

2

50

24.

VCK

1

1

100

25.

INDPENDENTS

1

9

11.11

26.

OTHERS*

0

22

00

TOTAL

162

545

29.72

Note: * The category includes the parties that do not have any accused members.

Source: Compiled and computed from http://adrindia.org/images/pdf/ls2009_fullcrimdetails.pdf and http://eci.nic.in.

 

            In a representative democracy, political parties are a most vital link between the civil society and the state. Democratic formalism in elections and governance remain just that, i.e. formalism, without a democratic substance, if the party system and its constituent parties are not democratically constructed and regulated. Political parties in India, especially the centrist and regionalist party formations, generally lack internal party democracy and transparent and publicly audited funding. These traits lead to the tendency of personalized, familial, or dynastic domination of the parties. Lack of public regulation of party finances result in undemocratic nexus between corporate capitalist sector and political parties, vitiating the electoral and governmental decision-making processes.

            Partly for the foregoing reasons and partly due to political consequences of the plurality or first-past-the-post electoral system, the party system has become extremely fragmented and segmented. Workable democratic alternatives in governance and development have become a will-o-the-wisp. The political system has been fast losing its legitimacy. None of the two major national parties – the Indian National Congress and The Bharatiya Janata Party – appear to have viable political alternatives in governance and development. One is democratically stymied by dynastic control and the other is democratically debilitated by its nexus with non-democratic Hindu traditional Rashtriya Swayamsevak Sangh and neo-Hindu conservative Vishwa Hindu Parishad. Hindu communalism and neoliberalism have become its staple programme. The Congress has lost its former socialistically inclined progressive programmatic posture of Nehru as well as political populism of Indira Gandhi. It exists in an ideological vacuum, so to say, since its acceptance of the neoliberal capitalist persuasion, on the one hand, and contingent political populism under the pressure of "vote bank" politics, on the other. The Indian Leftwing, which electorally survived the global onslaught of neoliberalism until 2009-10, continuously ruling in West Bengal since 1977 and intermittently in Kerala, has now been badly mauled. The regional political theatre is also devoid of any viable democratic alternatives even for their respective states, to say nothing of the national or federal politics.

            In ideological and democratic vacuity, none of the major political parties can mobilize genuine grassroots support. In the legislative arenas too, the fragmentation of the party system is sought to be bridged by amoral or immoral coalitions for governance and opposition through political wheeling and dealing, corruption and crime. Politics of defection that first surfaced in India in the aftermath of the 1967 general election have continued unabated, despite the 1985 anti-defection Act incorporated in the 10th schedule of the constitution. In fact, the bribing of legislators to win confidence vote, not only in states where it first made appearance in the late 1960s but also in the Parliament in New Delhi, has become an uncontrolled and recurrent political menace. The Jharkhand Mukti Morcha (JMM) bribery case decided by the Supreme Court in 1999 indicting the P.V. Narasimha Rao Congress minority Government brought out the chilling depths of moral and legal decadence to which Indian democracy has descended.1 In addition, instances of bribes for raising questions in the Parliament, selling of ministerial and parliamentarians` discretions in allotment of services and utilities, and economic and political scams, etc. have enormously multiplied since the 1990s. The biggest among the scams being investigated at present are the cases relating to the 2-G spectrum allocations by the telecom ministry, the Commonwealth Games-2010, and the Adarsha Housing Society allotments in Mumbai, all involving the Congress-led United Progressive Alliance Governments in New Delhi and Maharashtra. There are scams galore also at the state level, involving all political parties and governments across the board. Perhaps for the first time in Indian politics, ministers and MPs of the ruling dispensation have been put behind the bars in the course of investigation in the 2-G spectrum and the Commonwealth Games cases.

            The leakage of taped conversations of Nira Radia who was lobbying first for the Tatas and later for Mukesh Ambani have revealed how the corporate capitalist sector has begun to influence the news and views of supposedly free media and even the allocation of ministerial portfolios in the federal coalition governments headed by national parties like the Indian National Congress and steered by supposedly clean politicians like Manmohan Singh and Sonia Gandhi.

            The sites of democratic political action that rightfully belong to the party-political processes have been practically vacated by the political parties. The decline and atrophy of the party system is therefore being partly compensated by judicial activism, investigative journalism, civil society movements against corruption like those of Anna Hazare and Baba Ramdev, and new social movements on environment and ecology, quality of life and services, child rights and gender justice, administrative and political transparency and accountability, human rights in general, etc. But the sustainability of these tendencies and trends depends on the overall democratic ambience and democratic deepening that cannot be optimistically taken for granted, as the foregoing analysis demonstrates.

Impact on Federalism

            The growing federalization of the Indian political system, which remained highly centralized until the 1970s, may well be the most important political development next only to economic liberalization, privatization, and globalization, or in brief neoliberal policy shift. Political federalization first manifested itself in state party systems during the 1980s and forced itself on to the national level in the 1989 parliamentary elections. With the transformation of the one-party Congress dominance into a multiparty system of considerable fragmentation and regional segmentation there has since been no looking back.

            Neoliberalism has considerably reinforced the trend of political federalization. This has been for a number of reasons. Globalization has put considerable pressures on the sovereignty of the national state to open up to global capitalism at the same time as when the political pressures on it from the regions and localities have gathered strength and multiplied. Faced with acute financial crisis, the federal as well as regional states must count private capital – national, foreign, and multinational – for investments in their respective domains.

            Neoliberal economic reforms resulted in sustained higher rates of economic growth of approximately 6 per cent and above from the mid-1980s onwards to the present, with some degree of fluctuation in the range of 6 to 9 per cent. However, this phenomenon is marked by the feature of growth-development divergence. In other words, the growth in gross aggregate terms is marked by negative features like the lack of human development, and the sharpening of class and regional economic disparities. The facile assumptions of some economists that growth will automatically lead to the narrowing of class and regional inequalities through the trickle-down effect is not really borne out empirically. The political economist Francine Frankel has aptly observed : "The social consequences of economic reforms confirm trends suggesting the emergence of two economies". This dual economy comprises "a smaller, yet sizeable affluent economy" in larger cities and "the larger predominantly agricultural economy" of the marginal and small farmers and peasants and the disadvantaged sections of the society.2

            What is more germane to federalism, regional economic disparities since the neoliberal reforms have been increasing. In the 1990s, states like Madhya Pradesh, Tamil Nadu, West Bengal, Gujarat, and Maharashtra have grown above the national average. In the other hand, states like Rajasthan, Andhra Pradesh, and Karnataka, remained fixated roughly at the same level of growth in the 1990s as in the 1980s. Moreover, states like Bihar, Uttar Pradesh, and Orissa economically declined in the 1990s as compared to the 1980s. Surprisingly, even the richer states of Haryana and Punjab suffered the same experience of economic decline over the 1990s.3

            The growing regional economic disparities are evident even in the media images of the contrast between the "red corridor" through the central tribal belt from the Indo-Nepalese border to the Deccan where the radical class violence by the Maoists rules the roost, on the one hand, and the "blue corridor" spanning the Delhi-Gurgaon/Mumbai-Pune/Bangalore-Hyderabad/Chennai-Salem hubs, whereto the lion's share of private capital investments – both national and foreign – are making a beeline. With the state-controlled investment for industrialization gone, market-Darwinism reigns supreme. Thus state's role in the reduction of regional or inter-state disparities is now limited only to fiscal federalism, which is now being relegated to a secondary position in the larger spectrum of political economy, in which private capital has outpaced the public investment and government revenues.

            A study makes out a case that "a proximate cause of the widening regional disparities during the nineties was the grossly uneven flow of investment to various states after liberalization". Over 2/3rds of private investment between August 1991–March 2000 preferred relatively developed states like Andhra Pradesh, Gujarat, Haryana, Karnataka, Kerala, Maharashtra, Punjab, and Tamil Nadu. The relatively backward states had to be contented with merely 27 per cent.4 The same pattern is found in case of state-wise foreign direct investment (FDI). Here again, only five more developed or well governed states – Gujarat, Karnataka, Maharashtra, Orissa and Tamil Nadu – accounted for about 75 per cent of FDI flow into the country since economic liberalization. This will further aggravate the already existing disparities among the various regions of India.5

            The decade of the 2000s has brought some good news from the perennially backward areas of the Hindi heartland. Bihar and Orissa averaged growth rates of 11.03 per cent and 8.74 per cent respectively, which is generally attributed to the leadership of the Chief Ministers concerned, Nitish Kumar and Naveen Patnaik. The three new states carved out of the parent states of Uttar Pradesh, Bihar, and Madhya Pradesh respectively, have all done well : Uttrakhand 9.31 per cent, Jharkahand 8.45 per cent, and Chattisgarh 7.35 per cent. Jharkhand and Chhattisgarh are richly endowed with mineral and forest resources. Uttarakhand is liberally endowed with forest and water resources. Even Uttar Pradesh with 6.29 per cent of annual growth rate and Rajasthan with 6.25 per cent have not done bad. Madhya Pradesh with 4.89 per cent is still disappointing and in line with the past image of the laggard Hindi heartland.6 Yet, despite this new trend what still remains problematic is the abysmally low human development and social sector development aspect and the sustainability of the growth in these states. Most states of the region are stuck with abject poverty, bad leadership, and rampant corruption.

Concluding Observations

            Neoliberal policy shift in privileging the market over the state has increased the hiatus between the two major goals of the Indian constitution, i.e. democracy and social justice. Indeed, our foregoing discussion has shown that even the goal of democracy is given a short shift in practice. This is fraught with serious implications and consequences for the stability and survival of the Indian polity.

            Raymond Plant in his important theoretical contribution to the debate on neoliberalism has aptly argued that without loyalty to and trust in it, the neoliberal order, for that matter any politico-economic order, cannot sustain itself. He goes on to say that a basic precondition for trust and loyalty are a high degree of democratic equality in society and a good deal of scope for democratic decision making in the government. Plant persuasively argues that "the neo-liberal has rather limited views about both the scope of democracy and the scope of equality". F.A. Hayek's belief that so long as the neoliberal order maintains material prosperity the moral questions about popular trust and loyalty in capitalism are held at bay. However, as Plant aptly observes with most recent problems in global capitalism in view, there is nothing in the capitalist system to ensure continued growth without recession. And a recession may quickly erode the "vertical" popular trust in the system as well as the "horizontal" corporate trust among firms and individuals. Without there being the state to deflect the costs of recession from falling on the people or the weaker firms in the interest of social justice, the system may in fact plunge into deeper crisis. "So material prosperity", concludes Plant, "cannot in fact be the ultimate guarantor of the popular legitimacy of the free market system. There has to be a source of trust and loyalty outside of that and neo-liberal thinkers have, I believe, to accept that the sources of trust and loyalty have to be found outside the market".7

 

REFERENCES

1.                  P.V. Narasimha Rao v.,The State (CBI/SPE), Supreme Court, 1998.

2.                  Francine R. Frankel, India's Political Economy 1947-2004 : The Gradual Revolution (New Delhi : Oxford University Press, 2005), 2nd edition (first published 1978), pp. 603 and 625.

3.                  Ibid., pp. 604-605.

4.                  Amaresh Bagchi and John Kurian, "Regional Inequalities in India : Pre- and Post-Reforms Trends and Challenges for Policy" in Jos Mooij, Ed., The Politics of Economic Reforms in India (New Delhi : Sage Publications, 2005), pp. 236-237.

5.                  Ibid., pp. 338-339.

6.                  S.A. Aiyar, "Swaminomics : New Miracle Economies : Bihar, Poor States" http:blogs.timesofindia.indiatimes.com., accessed on 27.02.2011.

7.                  Raymond Plant, The Neo-Liberal State (New York : Oxford University Press, 2009), pp.267-270.