As the nation moves closer to the next general election, due in 2019, parties are beginning to stake out their positions on economic policy, amongst other areas. An important piece of the puzzle was filled in recently with the economic policy resolution of the Congress party approved at its recent plenary meeting. This document gives us a reasonably good sense of where the principal opposition party stands, at least rhetorically, at this juncture.
The main takeaway from the resolution is that the Congress party is signalling that it wishes to go back towards the centre on economic policy, and away from the left, marking a distinct change, at least potentially, from the economic philosophy which animated the two innings of the Congress-led United Progressive Alliance (UPA). The document avers that the party “believes in the twin goals of inclusive economic growth through private enterprise, a competitive and viable public sector and a robust social safety net through a strong welfare state".
No one would be misled by this language into thinking that the Congress party is morphing into a centre-right political party, yet this language is refreshingly different from what we saw in 2004.
Recall that the national common minimum programme (NCMP) adopted by the UPA shortly after its election victory proclaimed that Indians had voted “for parties wedded to the welfare of farmers, agricultural labour, weavers, workers and weaker sections of society, for parties irrevocably committed to the daily well-being of the common man across the country"—with nary a mention of private enterprise to be found in the document.
Whatever else you may say of the UPA, it did, indeed, live up to what it had promised in the NCMP, which was a hard left turn after the defeat of the Bharatiya Janata Party-led National Democratic Alliance (NDA) government of Atal Bihari Vajpayee, which is without doubt the closest India has come to having a genuinely centre-right political formation in power at the Centre.
Let us not forget that it was NDA-I which clinched the reforms begun under the Congress government of Narasimha Rao, a reformist direction which was abandoned by the UPA amidst its embrace of an entitlement-based welfare paradigm at the expense of growth-enhancing second-generation reforms.
Of course, in a democracy which still has a large number of poor people, references to poverty alleviation and social welfare cannot be absent from the economic policy resolutions of any party—be they ostensibly on the left or the right. Indeed, as many others have pointed out before, the conventional left-right ideological spectrum on economic policy, customarily applied in advanced economies, has little salience in India, where redistribution and social welfare are always going to be on the agenda. As sociologist and politician Jorge Castañeda has cannily put it: “The combination of inequality and democracy tends to cause a movement to the left everywhere." This dictum is certainly true in India.
The Congress’ gesture towards sensible, centrist economics, and the implied disavowal of the far-left economics of the assorted academics and social activists who were either members of, or advised, the National Advisory Council chaired by UPA chairperson Sonia Gandhi, is welcome in another sense too. It has always puzzled me that the latter-day Congress has never claimed the mantle of economic reform: They are, after all, the original party, not only of Nehruvian socialism, but also of its antidote (if not its antipode), the Rao-era dismantling of the licence-permit-quota raj.
One tired cliché holds that the UPA-era Congress gave away the keys to the economic reform vehicle because a member of the Nehru-Gandhi dynasty was not in power when the party presided over reforms after the 1991 macroeconomic crisis. A far more plausible story is that those at the helm of the party for a decade after 2004 did not really have their heart in reforms or market-friendly economics: in particular, Sonia Gandhi and her circle. On this reading, the putatively reformist instincts of then prime minister Manmohan Singh were overridden by the social welfarist zeal of Sonia Gandhi.
Apart from ideological antipathy, it is also plausible that the Congress, like the defeated BJP, bought into the data-free and false, but compelling, narrative that the latter lost the 2004 election due to its pro-free market ideology, as captured in the India Shining campaign. After all, belief in this morality fable drove the BJP itself towards the left, to say nothing of the Congress, which had historically occupied that space.
It is significant, therefore, that the new Congress economic policy resolution comes hard on the heels of Rahul Gandhi’s accession to the presidency of the party. While the younger Gandhi had given no particular indication heretofore that his economic philosophy may differ from his mother’s, he had perhaps little opportunity do so. Now he has. If the party’s election manifesto hews closely to the resolution, it is the clearest signal possible of an attempt to recapture the middle ground when it comes to economic policy.
If this succeeds in pulling the BJP, which lately has lurched to the left as it gears up for next year’s election, back towards the centre, that can only be salutary. Political theory, in particular the “median voter theorem", suggests that in a democracy, parties will gravitate to the political centre to capture the voter “in the middle". That, perhaps, is now afoot in India.
Vivek Dehejia is a Mint columnist and resident senior fellow at the IDFC Institute, Mumbai. Read Vivek’s Mint columns at livemint.com/vivekdehejia.
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