It is not at all surprising that the CPI has come out fairly strongly against the Payment of Bonus (Amendment) Ordinance. After all, it claims to be a party of the working class which, according to it, includes such relatively privileged sections of the community as government, bank and LIC employees.
The same is true of the party’s criticism of the other moves the government has made to stimulate investment and output in the organised sector of industry. For, the CPI has not made and does not make any secret of its view that it is necessary gradually, if not immediately, to squeeze the private sector to death in the interest of what it calls socialism.
For tactical reasons the CPI has in recent years played down its commitment to the concept of “national democracy” which in plain terms means not only a major share for it in power at the Centre but also the steady liquidation of the private entrepreneur, specially the so-called monopoly houses, in the organised sector of industry and the import and export trade. But it has favoured the rapid expansion of the public sector, irrespective of its performance, and ever-increasing restrictions on big business in the hope that the acceptance and implementation of such a programme would automatically pave the way for the establishment of “national democracy.” Indeed, it is evident from the writings of its leaders that they welcomed the emergency at least partly because they calculated that it would help the party push the government in the desired direction.
Aghast
It was also a foregone conclusion that the CPI would be aghast if despite the continuing differences over issues like Diego Garcia and the end of the embargo on the supply of arms to Pakistan, New Delhi adopted, as it has done, a realistic approach towards the United States. For, anti-Americanism has served it well for years, specially since 1971 when the Nixon Administration not only proclaimed its tilt towards Islamabad but also sent a task force of the Seventh Fleet into the Bay of Bengal towards the end of the Indo-Pakistan war.
In view of the assassination of Sheikh Mujibur Rahman in Dacca last August, the consequent concern in New Delhi regarding the policy of the allegedly pro-US new regime and President Ford’s critical reference to internal developments in India, the CPI perhaps hoped that New Delhi would once again call off the meeting of the joint commission in Washington. The government’s refusal to do so might not have come as a complete surprise to it. But it has been an unwelcome development from its point of view.
On the face of it, there is, therefore, no good reason why one should pay much attention to the CPI leaders’ criticism of government policies and actions as reflected in the last two issues of the New Age. This view is strengthened by the fact that apart from Kerala, the party does not command sufficient support anywhere in the country to make much difference to the course of events. But a closer examination of the issues involved would suggest that it may be useful and even necessary to take note of this development.
It is, of course, too early to say whether the CPI would continue to press the present criticism if the government pursues, as it apparently intends, the policy of releasing the economy from the stranglehold of licences and controls and of improving ties with the United States at least to the extent of insulating economic relations from political differences. But such a possibility cannot be dismissed out of hand because if Mrs Gandhi has decided, as she seems to have done, to give the country’s economy and foreign policy a more pragmatic turn, the CPI will find it difficult to support the government. It may continue to talk of “unity and struggle.” But the proportions of the constituents of the mix can change.
Villains
In reality, the issue is not one of the Prime Minister or anyone else – Mr C Subramaniam and Mr TA Pai have been cast in the role of villains in the CPI’s demonology – pushing the country in the Rightist direction in the economic field and closer to the United States in the international field. It is one of releasing productive energies at home and of making a realistic adjustment with power realities abroad. But it is more than likely that the CPI leadership will view developments in ideological terms and respond accordingly, even if cautiously. It does not possess the resilience of the Italian communists who have said that they will not seek to take the country out of NATO if they come to share power with the Christian Democrats.
This disability is illustrated, among other things, by the fact that in the voluminous writings of the CPI leaders it is difficult to find a single reference which suggests that they are aware that the so-called non-capitalist path of development has not worked anywhere in the third world, that one country after another – Indonesia. Ghana, Burma and Sri Lanka – have been compelled to give up or modify the experiment and that if Iraq and Algeria make a success of it, they will be doing so largely on the strength of their oil revenues.
The CPI can doubtless argue that the experiment has not been tried properly in the countries mentioned above. But that is a weak argument because those who commend a model to a country should have had the perspicacity to realise the inherent limitations of its political system. The more pertinent point is that after all that has happened in so many places, the CPI leadership has not realised that the concept of non-capitalist path of development must inevitably degenerate into populism in a poor country and that this must have serious social and political repercussions.
Populism is doubtless a form of radicalism in that it helps create an atmosphere in which the role of the industrial and business community is devalued and effectively organised groups in key establishments like banks and power stations can secure handsome emoluments. But in a fundamental sense populism favours the status quo. For, it does little to ameliorate the lot either of unorganised workers or of other poor sections of the community. On the contrary, it contributes to their misery inasmuch as it restricts employment opportunities for them. This is a natural consequence of a slow pace of capital formation which in turn is an inevitable by-product of populist politics.
A policy of establishing and expanding the public sector has, of course, basically nothing to do with populism. It can be justified by the specific requirements of a newly independent and developing country which lacks an entrepreneurial class capable of setting up and running major projects. Indeed, this was Mr Nehru’s rationale for going in for a fairly large size public sector. He rightly took the view that in India the state alone could provide the infrastructure in the form of railways, roads, power and irrigation and it alone could finance and run basic industries calling for heavy investment and involving long gestation periods.
But the public sector can become a drag on the progress of the country in question if it is not managed efficiently and if it does not yield profits which are commensurate with the investment. Clearly to shield such a public sector is a form of populism – a point which the Left in India has failed to recognise and accept.
In any case, primarily the issue in this country has not been whether or not the public sector should exist or even expand. Its existence and right to expand have widely been taken for granted. The issue has been whether or not the working of the private sector should be subject of innumerable controls and whether or not capital formation should have priority over distributive justice. The CPI has consistently been on the side of controls and distributive justice, though the former have led to vast delays, rise in costs, loss in production and corruption and the latter to inefficiency as in government offices, nationalised banks, the LIC and power stations before June 26. The fact that regular attendance and orderliness in government offices and banks should widely be regarded as one of the principal gains of emergency speaks for itself.
Inconceivable
It is not dogmatism to say that except in countries which are flush with oil revenues, economic growth is inconceivable without a high rate of savings and the discipline it calls for. Communism a la Stalin or Mao is one way of mobilising the necessary savings and the market mechanism another. But even if this proposition is not accepted, it cannot be disputed that populism creates an atmosphere in which it comes to be believed that development is possible without savings and efficiency.
In the realm of foreign policy, it should hardly be necessary to make the point that with the remarkable come-back it has staged in West Asia, the United States has regained its pre-eminent position in the world and it makes no sense for New Delhi to ignore the advantages of normal relations with it. The CPI continues to ignore these realities as well as the fact that the Soviet Union itself attaches the highest importance to its detente with America and that the task of Indian policy-makers in befriending oil-rich Iran, Saudi Arabia, Kuwait and the United Arab Emirates can be unnecessarily complicated by the absence of reasonable understanding with Washington.
The Times of India, 15 October 1975