Bitter harvest of reforms

Published: December 31, 2010 - 15:33

Just the other day, a well-informed political commentator perceptively remarked that every 10-15 years, Indian society and politics goes through a period of churning and tumult that leads to much desired catharsis. While it is true that Indian politics does indeed go through turmoil every now and then, one is not sure whether it ushers the necessary changes in our society. 

More than the corruption scandals and the divisive Ramjanmabhoomi movement, what has really turned Indian society upside down is the economic reforms programme that was introduced in the country in 1991 to help the country tide over the foreign exchange crunch. These reforms were part of the International Monetary Fund (IMF)-World Bank's structural adjustment programme to stabilise cash-strapped economies. Although Manmohan Singh, who was the finance minister in 1991, tried to sell the reforms by claiming it would cut down bureaucracy and also had a human face, but the truth is that they were meant to end the primacy of the Indian State and enlarge space for the private sector. As the Indian private sector was not so evolved, it became a reason for allowing the worst kind of crony capitalists to subvert rule of law and undermine the credibility of government enforcement agencies. 

Economist James Petras, who studied Latin American economies going through periods of IMF-dictated stabilisation, talks about the manner in which crony capitalists and rampant corruption help in dismantling old structures of the State and demoralising the old order. Nearly all the countries subjected to 'economic reforms' have seen spike in corruption scandals, flight of capital, and increased misery of the ordinary people. If we jog our memory of the last 20 years, we would see similar trends revealing themselves in India too. 

Destruction of the public distribution system and reduction of subsidies in various sectors have not only brought about a paradigm shift in the Indian economy, but also heightened farm distress. In the early 1990s a former chief minister of Andhra Pradesh, late Vijay Bhaskar Reddy, blamed the economic reforms for suicides of cotton farmers and the consequent defeat of the Congress party. 
Since 1991 we have been seeing a progressive erosion of values in politics and society. Crass consumerism has become the credo of these times. As many business journals celebrate 20 years of economic reforms and how it changed the face of the country, it is important to understand what we may have lost in the last 20 years. Here we are talking not just about the loss of innocence - as the Indian economy gets increasingly globalised and open to external influences - but also about how large sections of the population have got increasingly disenfranchised as the State seems more concerned with creating wealth for cronies and dubious businessmen. 

It seems the government has forgotten its responsibility towards the forest dwellers, poor tribals and those who flee to towns and villages to eke out a meagre living. A development paradigm that believes the countryside has to be explored for minerals or for building huge projects, has heightened the valuation of land in these areas, making it unviable for the poor tribals to continue living in their traditional abodes. Mining lords and promoters of power projects see the tribals' very presence in their own habitats as an encroachment and create circumstances for their early exit. No wonder there has been a rise in Left extremism in several tribal areas of the country. 

The situation gets aggravated as the response to Left extremism has spawned a certain kind of politics and mindset that is impatient towards any point of view opposed to the State-mandated development path. This means that the police, intelligence agencies and parties like the BJP, all gang up to make life difficult for those espousing support for the tribals. The harassment for people like Dr Binayak Sen is a manifestation of this mindset and how the nexus of corrupt politicians and businessmen uses the tropes of 'national interest' and 'speeding up economic growth' to snuff out all opposition. While curbs on freedom of speech may not be visible in Delhi and a few metros, state capitals show great itchiness towards any criticism. Journalists routinely lose their jobs for criticising powerful chief ministers and regional bosses. 

After 20 years of the economic stabilisation programme - and now that there is a decent kitty of foreign exchange reserves with the country - it is important for the political class to usher in genuine reforms that truly deepen democracy and enable the State to pursue inclusive policies.

Editor of Delhi's Hardnews magazine and author of Bad Money Bad Politics- the untold story of Hawala scandal.

Read more stories by Sanjay Kapoor

This story is from print issue of HardNews