Ideological contradictions rule but can also spur new ideas

India needs to acknowledge economic inconsistencies and find long-term solutions. (REUTERS)
India needs to acknowledge economic inconsistencies and find long-term solutions. (REUTERS)

Summary

  • Rightist political-economy ideas have got overturned globally. In India too. Yet, incongruities also offer hope. Will India’s budget go beyond the synthetic constraints of a fiscal deficit? Will it be innovative?

Philosopher George Santayana said the world is in “perpetual caricature" of itself because, every moment, it is presented with a contradiction of what it is pretending to be. This holds especially true even for the knowledge universe, where an eternal cycle of conflicts and contradictions ensures that the graveyard of old ideas is always full, leaving behind a vacuum for new ideas to take birth. 

This never-ending sequence becomes the source, the wellspring, for renewal and endless optimism. As German playwright Bertolt Brecht put it, “In the contradiction lies the hope." But the path between the two is never easy because overcoming initial contradictions and reaching an eventual resolution requires the humility to accept incongruities, the courage to surmount the immediate challenge and to find solutions that bring forth new ideas which can stand on the shoulders of older ones. 

Corporate strategists, bean-counters and quant-heavy economists may be tempted to discard this as an abstract notion, but the world today is wracked by contrasting challenges—extreme heat waves in some parts with flooding in others—and crying out for change. India too needs to acknowledge economic inconsistencies and find long-term solutions.

Also read: India’s political economy: Higher-for-longer policy rates pose peculiar problem

In the old economic orthodoxy, ideologies were dichotomous and did not bleed into each other. Right-wing politics, free-market evangelism and distrust of the welfare state all tended to cohabit under the same tent. These rigidities no longer hold true. For example, Italy under Giorgia Meloni ranks among Europe’s highest social spenders even though the party in power, Brothers of Italy, is known as a right-wing—if populist—party. 

Or look at France, where rightist political parties have grown popular despite the country’s large social expenditure. Many Indian ideologues and planners who have been weaned on free-market thinking and insist that governments should remain small, have looked on in bewilderment as the US government has intervened in its economy through measures like industrial policy. 

Also read: Political risk insurance:Expand its coverage to help Indian businesses go global

Global studies have shown that many economies across the globe are doing much the same to assist domestic industry. It highlights how economic exigencies are forcing the acceptance of contradictions till new solutions emerge.

Many of these contradictions exist in India as well. The ruling Bharatiya Janata Party (BJP), despite its rhetoric of economic restraint aimed at middle-class voters, has in fact been pushing hard on the pedal of social-sector spending, including the delivery of free rations of foodgrain and cash transfers, apart from other benefits. 

Incongruities hit a high during this summer’s general elections: the opposition was able to stitch together a cohesive coalition and win 234 seats despite ground-level differences and pollsters discounting them. The government should look closely at this world of rising contradictions to recognize a need for some new ideas. The Union budget, to be presented in July, offers the first opening of this exercise. 

Also read: Coalition challenge: Fiscal prudence mustn’t lose to competitive populism

Budget-making mustn’t be held hostage by anodyne forces keen only on balancing the books, without making a meaningful economic impact. This may be an opportunity to look beyond the synthetic constraints of a fiscal deficit, or arbitrary limits on the debt-to-GDP ratio. These are important parameters, sure, but the current mix of contradictions demands an innovative budget with a sharp focus on employment creation and income generation.

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