S.V. Raju won’t lie, at least not without telling people why he is forced to be less than truthful.
That is one of the two big hurdles the 73-year-old faces in his bid to revive India’s only mainstream conservative party. The other is that very few people seem to see the need.
The Mumbai-based editor of the journal Freedom First is among the few surviving members of the Swatantra Party, which was the newly independent country’s voice of dissent against left-wing policies from 1959 to 1974, when it split and atrophied. Raju, who was Swatantra’s executive secretary since inception, can’t restart it without including in its memorandum a declaration that says the party vows to uphold the “principle of socialism”.
This requirement, introduced in the early 1990s, is a laughable one to impose on a party steeped in classical liberalism, which repudiates state-sponsored efforts at economic and social engineering .
In the Bombay high court 12 years ago, Raju challenged the law that now requires him to swear allegiance to socialism. Still waiting for a judgement, Raju says he would be happy even if the court just threw his petition out. “We want to show that in this country unless I tell a lie, I can’t form a political party,” Raju said in an interview in Mumbai last week.
In its brief existence, Swatantra—which means freedom—had at least one big success: Party founder Chakravarti Rajagopalachari single-handedly stopped first prime minister Jawaharlal Nehru from copying Chinese leader Mao Zedong’s disastrous doctrine of collective farming.
In some other areas, such as in its advocacy of a floating currency and a balanced budget, Swatantra’s was the lone sane voice that no one heard in the prevailing nonsense about wiping out poverty by printing more money.
The Indian middle class has over the past 15 years benefited greatly from economic freedoms grudgingly granted to it by the same politicians and bureaucrats who had for four decades run a “licence-permit raj” under the garb of socialism. It was only when the controlled system collapsed in a balance-of-payments crisis in 1990 that economic planners realized their mistakes and sought to correct them.
Yet, the embrace of free markets is a reluctant one in India, as is evident in the ruling Congress party’s ambivalence about, among other things, selling government stakes in business enterprises.
The bureaucrat’s power to grant licences may be gone, but his grip on the fate of businesses big and small has hardly loosened. The Planning Commission is still coming up with Soviet-style five-year plans, decades after Rajagopalachari’s advice that the organization be wound up. It’s perplexing that just when India badly needs a credible right-of-centre alternative, such a party is nowhere to be found.
In one newspaper commentary after another, Jaithirth “Jerry” Rao, a former Citibank NA employee and the founder and chairman of Mphasis Ltd, an Indian software company acquired last year by Plano, Texas-based Electronic Data Systems Corp., has been making the case for a new political party that defends free markets and opposes an intrusive state.
Gurcharan Das, author and a former managing director of Procter & Gamble Co., has been saying he will support the revival of Swatantra, “a party that believes in classical liberalism, markets and governance,” provided younger people are willing to lead the initiative.
And that’s the second problem, Raju says. Urban middle-class young people are so engrossed in seizing the opportunities presented by the opening up of the economy that they are taking prudent, pro-market policies for granted.
If only they paid more attention to the rise of left-wing politics in Latin America, they would be less sanguine.
Even looking at the ongoing political fragmentation within India, there is good reason to worry.
The Congress and the Bharatiya Janata Party—the two main groupings—between them control just about 50% of the seats in the lower house of Parliament.
The Communist Party of India (Marxist) dictates policy of the current Congress-led coalition government with 43 elected members, one less than the 44 that Swatantra had in 1967.
The Marxists are a formidable interest group, blocking everything from modernization of the country’s pension industry to changes in India’s antediluvian labour laws, which inhibit employment creation.
Unless there is a counterweight to the Marxists from an equally powerful group that can influence the policies of future coalition governments, there is no hope of quickly freeing the economy from the remaining tentacles of the state.
Without job creation, economic inequality is bound to rise in a country where half the people can’t read or write and even more haven’t been taught the skills needed for participation in the rapidly growing modern economy.
That, in turn, is fertile ground for left-wing extremism, which is already recognized by the government as probably the largest security threat facing the country today.
“It will require a traumatic shock to move the Generation Next,” Raju says.
That’s a dire message, though not an exaggerated one. By regrouping now, the liberals could help prevent some of the dangerous policy reversals that may still occur in India for want of a voice on the right. Raju should perhaps just go ahead and tell that lie.