There are several differences in the election manifestos of India’s two largest parties, the Bharatiya Janata Party (BJP) and the Indian National Congress. The two national parties have very different agendas when it comes to socio-cultural issues, civil liberties, and minority rights. But when it comes to economics, there is very little to differentiate the two. Both parties claim to represent the poor and the middle class. Both promise handouts for key demographic groups.
When it comes to economic policy choices, the world’s largest democracy has a limited menu. Ahead of the 2014 Lok Sabha elections, some commentators argued that the Narendra Modi-led BJP will embrace liberal economic policies, shrink the Indian State, and bring about much-delayed “factor market reforms” (those relating to deregulating land and labour). If Rahul Gandhi epitomised the Amartya Sen school of thought, Modi epitomised the Jagdish Bhagwati school of thought, they argued. The reality has been different. As a previous column (“The aftermath of the Sen-Bhagwati debate”, July 11, 2022) pointed out, the Modi-led regime has been far more assiduous in following Sen’s prescriptions than in following Bhagwati’s.
The only time Indian voters were offered a real economic alternative was in the early years of the Republic when Chakravarti Rajagopalachari walked out of the Congress to form the Swatantra Party. Backed by erstwhile maharajas and a new breed of entrepreneurs in the West and South, Swatantra promised “economic freedom” for the masses. Established in 1959, it became the single largest Opposition party in the 1967 elections. Its fall was quicker. Rajagopalachari died in 1972, and his party was dissolved two years later.
Swatantra’s ally, the Jana Sangh (BJP’s predecessor party) could have adopted its ideological plank. The Sangh had joined hands with Swatantra to cobble together state-level coalitions in the 1960s. The two parties were united in their disdain for Nehruvian planning and viewed the Communists as their primary ideological opponents. One section of the Sangh, led by Balraj Madhok, indeed wanted the party to take a Rightward turn. But he was overruled by the dominant faction led by Atal Bihari Vajpayee. Vajpayee wanted his party to avoid the tag of an economic Right-wing force that championed the cause of landlords and maharajas, according to a new Vajpayee biography authored by Abhishek Choudhary. In a desperately poor country, it wasn’t pragmatic to be identified with the rich.
Despite India’s economic progress since then, the wealthy are easily outnumbered by the poor and the vulnerable. The BJP’s promise of free foodgrains for an overwhelming majority of households is an acknowledgement of this reality. In such a country, voters will always be attracted to a party that offers more — or better-implemented — welfare schemes. Even in Delhi, a prosperous city with a large middle-class population, a new party offering an “improved” welfare model was able to outsmart the two national parties.
There is another important reason why we haven’t seen a new avatar of the Swatantra Party yet. The Swatantra Party was home to wealthy patrons who felt excluded from mainstream politics and wanted to have their own political platform. Today, plutocrats are able to find their place in mainstream politics quite easily. The rising cost of elections has made political parties heavily dependent on moneybags. All parties must court poor voters in the day, and solicit rich funders at night. A party’s electoral success depends on how well it manages this fundamental contradiction.
Ambitious and politically savvy businessmen have enough avenues today to acquire political heft and use that heft to safeguard their financial interests. According to a 2023 report by Marcellus Investment Managers, a handful of “octopi” business families tend to account for most of the wealth in every town or district of the country. Members of such families often use their political connections to win new contracts and regulatory approvals, spreading their tentacles over the local economy. Gradually, a mini-conglomerate gets built, with multiple lines of businesses, and multiple political patrons to safeguard its interests. While there isn’t enough data to back Marcellus’ hypothesis, their conclusions seem plausible. Visit any small town, and you are likely to hear about local “octopi” families with multiple business interests.
While a modern-day Swatantra Party may be unviable, some of its ideas do resonate with India’s increasingly vocal middle class (statistically speaking, the top deciles of India’s income distribution). Many of them are beneficiaries of economic liberalisation and some have gained from the stock market boom of the past decade. They have little patience for excessive State spending, even if they may have benefited from State support in the past. They will tolerate pro-poor policies as long as their own fortunes are protected. No major party can ignore this growing segment of centre-Right voters.
The BJP’s emphasis on fiscal stability in its manifesto is aimed at this constituency. The Congress too is unwilling to alienate this constituency. The Grand Old Party had suggested earlier that it would dismantle the New Pension Scheme and revert to the fiscally onerous Old Pension Scheme for government employees. But it has avoided such a promise in its manifesto, fearing that it may be accused of being fiscally reckless. The political cost of fiscal indiscipline is higher than before.
Pramit Bhattacharya is a Chennai-based journalist. The views expressed are personal
Why the Swatantra Party could not be resurrected
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22.04.2024
There are several differences in the election manifestos of India’s two largest parties, the Bharatiya Janata Party (BJP) and the Indian National Congress. The two national parties have very different agendas when it comes to socio-cultural issues, civil liberties, and minority rights. But when it comes to economics, there is very little to differentiate the two. Both parties claim to represent the poor and the middle class. Both promise handouts for key demographic groups.
When it comes to economic policy choices, the world’s largest democracy has a limited menu. Ahead of the 2014 Lok Sabha elections, some commentators argued that the Narendra Modi-led BJP will embrace liberal economic policies, shrink the Indian State, and bring about much-delayed “factor market reforms” (those relating to deregulating land and labour). If Rahul Gandhi epitomised the Amartya Sen school of thought, Modi epitomised the Jagdish Bhagwati school of thought, they argued. The reality has been different. As a previous column (“The aftermath of the Sen-Bhagwati debate”, July 11, 2022) pointed out, the Modi-led regime has been far more assiduous in following Sen’s prescriptions than in following Bhagwati’s.
The only time Indian voters were offered a real economic alternative was in the early years of the Republic when Chakravarti Rajagopalachari walked out of the Congress to form the Swatantra Party. Backed by........
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