Every economist knows that it is not necessary to settle major ideological issues in order to give a boost to the country’s economy. Public sector enterprises can, for instance, make a substantial contribution to the public exchequer instead of remaining a burden on it if their management is drastically overhauled. Similarly, a large amount of capital – and foreign exchange – can be saved if the existing capacity in a number of industries is fully utilised before new investment is sanctioned in the same line of production.
The inefficient utilisation of scarce resources is the result not so much of any ideological confusion as of a general backwardness. In spite of the certificates foreign collaborators and experts have generously handed out from time to time, it is pointless to pretend that our engineers are as competent and our labour force as well trained and experienced as their counterparts in industrially advanced countries like West Germany and Japan. As a people we are not yet used to the rhythm of work modern industry demands. The transition from an agricultural to an industrialised society is always a prolonged and painful process. If even the Soviet Union cannot be said to have completed it after 50 years of unparalleled effort, it is absurd to imagine that we can do so quickly and on the cheap.
The endless talk of socialism complicates matters here in a variety of ways. It distracts public attention from failures as in the case of the steel plants in the public sector and enables the government to avoid hard decisions. Indeed, it encourages a sense of irresponsibility among those who run them because they are confident that in the prevailing atmosphere they can get away with anything. To cite one example, the Congress Party has successfully created the impression that apart from the drought, private traders are primarily responsible for the unprecedented rise in food prices when in reality the government is largely to blame. Year after year it has resorted to deficit financing in a reckless manner and thus made the spurt in prices unavoidable, specially in a difficult year when there is a big fall in food production as was the case in 1972.
THE REMEDY
The remedy has inevitably conformed to the prescription. Instead of taking tough measures to end deficit financing and wasteful expenditure in every field of government activity, including defence, it has decided to take over the entire trade in foodgrains. It has disregarded the well established fact that distribution through an official agency is both more costly and more inefficient.
Ideology encourages both dogmatism and vindictiveness. One former secretary to the government was, for example, rash enough to suggest that the so-called big newspapers deserved to be punished through reduction in newsprint quota and drastic changes in the pattern of ownership and management because they had been critical of the public sector. It did not even occur to this blimp that the only rational way to silence the critics was to run public enterprises more efficiently.
In such a climate no one can be surprised if the gap between what is required and what is suggested or done is becoming truly staggering. It is, for instance, well known that the management of power in India is perhaps the most inefficient in the world. While some plants produce as little as 25 per cent of the installed capacity, the over-all performance at 38 per cent is also highly unsatisfactory. Yet instead of taking steps to improve this miserable record, Dr. KL Rao is busy recommending fresh investment on a massive scale. The same is true in respect of irrigation. In these two cases as in many others ambitious projects serve as a psychologically satisfying substitute for results.
GRANDIOSE PLANS
Ideology, a strong preference for grandiose schemes and planning, Indian style, are all inter-related. They serve as a convenient facade for inefficiency, wastage of resources, rank opportunism and corruption. It is immaterial whether Mr. George Fernandes’ charge that a self-proclaimed socialist has spent Rs. one crore to get himself elected to Parliament and another Rs. 40 lakhs to win a seat to a state legislature is accurate. But it is no secret that enormous amounts of money are collected and spent by the ruling elite in the name of the fight against reaction and for social and economic progress. And not all this money is accounted for to the party leadership.
This is not to suggest that private entrepreneurs are not inefficient and that right-wing politicians as a rule are more upright. Only the former find it much more difficult to escape the consequences in terms of bankruptcy, closure and takeover by the government and the latter in terms of public exposure.
The Indian penchant for universal values and systems is also reflected in the ideological debate with the result that purely empirical questions are converted into matters of principle and authorities are quoted in the style of theological debates. In other words, ideology becomes an expression and ally of our backwardness, eliminating the need for empirical and verifiable facts which can serve as a basis of policy. To cite one example, since it is difficult to compile proper land records and try to implement the existing laws honestly and efficiently, the easiest way out is to recommend another dose of drastic reforms. It is, of course, understood by everyone who matters that the status quo will not be disturbed too rudely.
It is hardly necessary to underscore the fact that the Indian reality is very different from the rhetoric of its elite. The ruling party has abolished untouchability by law and it is aghast at reports of persecution of Harijans in the countryside. But it itself practises untouchability in that its members will seldom employ a woman belonging to the scavenger caste to clean their cooking utensils, not to speak of cooking for them. Examples of this kind of doublethink and double-speak can be multiplied.
The Indian elite is also, by and large, wedded to the status quo. Indeed, it is so upset at the very idea of social tensions leading to turmoil that it wants to anticipate them and remove them even before they get out of hand. That in the process it only delays economic progress and with it social justice is a different matter. What is pertinent in the present context is its abhorrence of violent and sweeping change.
Ironically, this attitude is widely shared by even those who believe that they do not have much of a stake in the system. Witness the virtual disappearance of the Naxalites, following the acts of terrorism by them, and the decline of support among the lower middle class Bengalis for the CPM in the wake of their experience of its rule. They want jobs and a measure of order even if they dislike the Marwari businessmen who provide the first and the policemen who ensure the second.
Neither of these points can be a surprise for any serious student of Indian history. After all, an elite which in the past built what is still the most hierarchical society mankind has ever seen through the elaborate mechanism of the caste system cannot be expected to opt all of a sudden for egalitarianism, however radical its profession.
NO CHANGE
The composition of the elite has not changed with the spread of education and the growth of the economy. The upper castes, with the Brahmins at the top, were the first to take to English education in the 18th century and they have dominated the scene ever since. They have co-opted men like Mr. Jagjiwan Ram but they have not let the effective reins of power slip from their hands.
Again, as in the past, the struggle for power is confined to the upper castes. The battle lines are blurred inasmuch as they do not run strictly along caste lines. But those who agree with the famous French sociologist, Mr. Rene Dumont, that the educated Indians have become a new caste should take a look at the reality again. Caste remains a factor in the choice of ideology.
If this assessment is even partially accurate, it should help to show that the loud talk of socialism has little to do either with a passion for social justice or Marxist-Leninist formulations and that it delays rather than promotes the prospects of change in that it hampers economic development. It should also leave little room for the illusion that the so-called fifth plan strategy, with its emphasis on catering to the needs of the poorest 20 per cent., will not go the way of land reforms. Once again the ‘ideal’ has become the enemy of the good in this country and the consequences this time can be as unfortunate as in the past.
The Times of India, 10 January 1973