Demon by Siona Benjamin (detail)
Demon by Siona Benjamin (detail)
Demon by Siona Benjamin (detail)
  Balanced on a Billion - 2
The idea of India in the era of globalisation
 

  Globalisation
  and
its contents
  Vol V : issue 4& 5

  Cover
  Amartya Sen

  Günter Grass
  Joseph E. Stiglitz
  Meghnad Desai
  Jug Suraiya
  Sunil Khilnani
  
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Sunil Khilnani

Pastel and ink on paper by RABINDRANATH TAGORE

The primacy of pluralism

What were the distinctive and original traits of the Indian model, of the ‘idea of India’ which defined the shape of independent India?[4] The foundational bedrock on which this idea rested was a recognition of the primacy of politics: of the centrality of human agency in the face of the potential constraints of economics or culture. This recognition was given form in two striking ways. First, in the decision taken by the nationalist elites who came into possession of the independent Indian state in 1947 to commit that state to the pursuit of multiple goals. Thus, from its inception the independent Indian state refused the often-posed dilemma between economic development and political democracy — and refused too the argument that one had to sequence these two goals, that economic development had to be achieved first, with the hope that democracy might follow later. Rather, the Indian leadership chose to pursue several goals simultaneously: democracy, economic development and a measure of social justice. It recognised that such a choice might impede the rapid fulfilment of any one of these goals, but affirmed that it was more important to recognise the plurality of values, and to commit the state to this plural vision.

The second way that the primacy of politics was manifested was in the content and shape of Indian nationalism, in the definition of Indian selfhood — which was affirmed in opposition to two types of sceptical objections about India’s diversity and its implications for the possibility of an Indian nation state. British imperialists, and European commentators more generally, had commonly dismissed the possibility of any internal principle of unity. Given India’s diversity, they argued, it could only be held together as a single unit through the harsh favour of external rule: through colonial domination or some analogue to that. Some Indians, on the other hand, came to the view that this diversity had to be smoothened out and purged: if nationhood were to be a possibility for the subjects of British India, they claimed, Indians would have to acknowledge some singular defining feature of their identity. Thus, a single religion, or language, or ethnicity would have to provide the substance of any future viable nation state. In this view, becoming a nation state meant replicating or imitating what was understood to have been the homogenising strategies that drove the making of European nation states. Such a view was advocated by those who demanded the state of Pakistan, a state defined by religious belonging. It had counterparts too among Hindu nationalists, who wished to define the rump India — left after the Partition of British India in 1947 into Pakistan and India — as a ‘Hindu state’.

It is crucial to recall both that this view of a nation state based on a singular identity did not prevail in India after 1947, and to understand the reasoning behind the definition of Indian nationalism that was actually chosen: one that affirmed a conception of a plural India. This choice was not merely a practical acknowledgement of the depth of India’s religious and other diversities. It was also a principled intellectual argument against the replication of the model of the Western nation state, and a self-conscious affirmation of a distinctively Indian model. This argument was enunciated powerfully by the great intellectual figures of Indian nationalism: Rabindranath Tagore, Mahatma Gandhi and Jawaharlal Nehru. Each held the view that India had to open itself to modernity, and to the critical scrutiny prompted by the principles and ideas of modernity. But the creation of a specific Indian modernity required the tempering and revision of European modernity, through its encounter with the powerfully formed world of traditional social understandings that already existed in India. Many aspects of Western modernity needed to be subjected to critique, and were rejected or reformulated.

Tagore’s literary explorations and Gandhi’s invention of an individual moral life were particular instances of this creation of a distinctive Indian modernity: they can be seen as metaphors for the definition of a larger idea of Indianness. Nehru’s innovation was to take these particular examples or metaphors, to seize the intentions behind them and endow them with tangible and institutional form and life — to transform them into a political architecture that could shape India’s collective, public life. He argued and acted against the imposition of a homogenising Western model that sought to make uniform the identity of the nation state. Political pluralism was enshrined in the institutions of democratic politics; the presence of cultural pluralism was upheld in the federal structure of the Indian state, which created regional states with considerable legislative powers; and religious pluralism was guaranteed by the invention of Indian secularism, which recognised the right of different religious communities to regulate their civil life by their own customary codes and did not try to impose a common code of citizenship that regulated all domains. Finally, the attempt was made to expand the domain of economic and social pluralism by means of planned economic development and policies of caste ‘reservation’, affirmative action or positive discrimination in favour of the lowest in the caste order.

Open society, protected state

The idea of India that was given a practical institutional shape in the years after 1947 thus rested on a recognition that diversity, far from being a weakening or inconveniencing feature for the state, was in fact a source of strength. Thus, for instance, a diverse economy which included both public and private sectors, was more likely to be self-reliant, and even regional and technological differences could have some advantages. Likewise, cultural diversity was a source of innovation and creativity; and a national identity that was layered and multiple — one which acknowledged regional belonging to be as significant as national belonging, which saw Indianness as an identity alongside being Tamil, or Bengali, or Punjabi — was actually more robust than an exclusive, thin Indianness. In Nehru’s hands, what emerged was a complex imagination and configuration of what a nation state could and should be — it was an act of self-conscious political creativity, rather than merely the acceptance of historical fate, in the form of the constraints set by culture or economic backwardness.

I have tried, in my book The Idea of India, to trace the historical origins and significance of this model, and to outline its fate since 1947. How has the Indian idea fared in the 1990s and since, a decade of profound changes in India’s internal and external environment? We see since the 1990s a deepening of the paradox that lies at the heart of the Indian experiment. On the one hand, the last decade has witnessed rapid and uneven economic development, resulting in sharpening economic inequalities. Across the country, the gap between social opportunities available to rich and poor has widened. It has sharpened the divide between rural and urban India, and it has increased already pronounced imbalances between twenty-eight regional states of the country, which gives the richest per capita incomes three times higher than that of the poorest ones. On the other hand, and set against this growing economic unevenness, the rates of participation in democratic political processes have shown a steadily rising trend throughout this period. In a trend that is particularly striking (and that is in contradiction to the conventional wisdom of current political science), it is those lowest in the social order — the poor, those at the bottom of the caste hierarchy, and women — who are participating in greater numbers than ever before in electoral politics, and who are showing growing signs of politicisation. As a system, India’s democratic architecture currently seems to be the beneficiary of a high degree of popular legitimacy — even while the actual political actors in this system cannot claim anything like an equal popular regard.

The economic changes that India has experienced since 1991 are in many ways the most striking indication of the broad shifts India is undergoing. As the authors of the authoritative study of the Indian macroeconomy since 1947 note, ‘In June 1991 India was the most autarkic non-communist country in the world’.[5] Its self-enclosure from the international economy was particularly remarkable, given that in virtually every other dimension it was such an open society, and readily conversant with global currents. The reasons for this self-isolation are various, but generally it derived from instincts acquired by Indian nationalism. This had first been formulated, late in the nineteenth century, as an economic critique of colonial exploitation, and it fed a deep-seated hostility towards foreign trade and investment and a suspicion of markets. Indeed, the ideology of free markets, although it certainly had some powerful intellectual advocates, did not take strong root among the Indian nationalist elites. Instead, a consensus emerged that markets had to be regulated and constrained by benevolent political agencies. This anti-market position had a variety of sources: it drew upon the paternalism of traditional Indian models of authority, as well as Gandhian ideas of swadeshi, on the socialist views of Nehru and the Indian Left, on the fears of foreign competition among Indian big business and the desire for protectionist measures, and above all on a recognition that India had come under colonial rule by succumbing not to armed invaders but to traders and merchants, in the form of the East India Company. 


From the 1950s to the late 1980s, India managed to avoid bouts of high inflation as well as serious industrial recessions and did not build up high levels of external debt. For most new nations, and especially democracies, the more usual pattern has been the pursuit of inflationary polices (for populist reasons), with a resulting accumulation of high levels of debt, which in turn engendered economic — and very often political — instability

The result was that since the early 1950s India had pursued a policy of economic development that relied on high walls of external protection, as well as on a heavy tangle of internal regulations which restricted the scope of the market. This helped to create the most striking feature of the Indian economy from the early 1950s to the late 1980s: its imperturbable stability. This, combined with consistent low to moderate growth (averaging around 3-3.5 per cent annually over most of this period) produced a continuity, even fixity, that some observers mockingly referred to as ‘the Hindu rate of growth’. But from the 1950s to the late 1980s, India managed to avoid bouts of high inflation as well as serious industrial recessions and did not build up high levels of external debt. For most new nations, and especially democracies, the more usual pattern has been the pursuit of inflationary polices (for populist reasons), with a resulting accumulation of high levels of debt, which in turn engendered economic — and very often political — instability.

During the 1990s, many of the distinctive traits of the Indian economy faded, though important continuities should also be noted. The opening up of the economy to more global causalities was the result of an internally produced crisis. Burgeoning fiscal deficits (caused by government subsidies) led to increased borrowing during the 1980s; this coincided with a time when the cost of foreign borrowing and imported commodities rose steeply. The result was the economic crisis of May 1991: a classic balance of payments crisis, when the Indian government found itself teetering on the edge of loan default. It had to turn to the International Monetary Fund for immediate rescue, and this became the occasion for a liberalisation of state controls on the economy. The policy was initiated from the top by a small political, intellectual and administrative elite: it was not driven by any popular constituency, but ironically by a coalition led by a minority Congress government, under a Finance Minister (Manmohan Singh, now Prime Minister) who was an intellectual, not a career politician.

The scale and nature of changes begun in 1991 can be indicated in shorthand with some figures. Foreign direct investment (FDI) has gone up sharply — from negligible levels in 1990 (when it stood at around $100-200 million) to around $2 to 3 billion by the end of the 1990s (though one should note that this figure is still extremely small by comparative standards: in China’s case, FDI is around $30 billion). Portfolio investment has also increased, to around $1-2 billion per annum. Quantitative controls on imports were removed in April 2001, in keeping with requirements set in place by the World Trade Organisation.

In other ways, though, the Indian economy has maintained protections against global economic currents. The most important such barrier that has remained in place is the complex controls on the movement of capital that the Indian government has maintained since the 1950s: the Indian currency is not convertible except under strict government controls.[6] The presence of such controls played an important role in protecting India from such events as the Asian economic ‘meltdown’ of 1998 — unlike other Asian economies, the Indian economy was not exposed to the contagion of currency crisis and was able to maintain stability. Tariffs remain, and with average rates at around 30 per cent, India has some of the highest tariffs in the world. But it is now possible to find apples from New Zealand for sale on the streets of Indian cities — this in a country which until a few years allowed virtually no consumer goods to be imported. Further, the economic liberalisation of controls and the opening up to global currents has not as yet produced massive social disruption: this is apparent if one compares India with other countries — which is not to say that this has not been without its human costs.

The reasons for this relative containment of social costs are several. For one thing, the decrease in tariffs has been accompanied (through skilful management) by a depreciation in the exchange rate, which has opened export opportunities. Such active management is one example of the more general approach taken by Indian policy-makers towards globalisation, in the economic as in other realms. This has been one of gradual and considered reform and active, critical response to situations — and the avoidance of a ‘shock therapy’ approach, a simple wholesale opening-up. Whether such an approach to policy-making can be maintained is an open question. But India’s accumulated intellectual tradition of critical and active response to international conjunctures, as well as its instinctive conservatism towards sudden shifts in policy may in this respect be something of an advantage. They may enable major structural changes to be made without major disruption to the characteristic macroeconomic stability that India has enjoyed.

p. 1 p. 2 p. 3 notes

 
Sunil Khilnani, Professor and Director of South Asian Studies, Johns Hopkins University, is the author of
‘The
Idea of India’ (1997). He lives in Baltimore, USA
i