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HomeNational InterestUnder Modi-Shah, BJP is back to being the Bharatiya ‘Baniya’ Party

Under Modi-Shah, BJP is back to being the Bharatiya ‘Baniya’ Party

BJP under Modi-Shah is returning to its protectionist, anti-MNC, technophobic old notions, underlining that strong governments can also be more risk-averse.

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Commerce and Industry Minister Piyush Goyal has been quick to clarify his remark on Amazon founder Jeff Bezos not doing India a favour by investing here. He now says all investment is welcome, as long as it complies with India’s regulations. You can’t argue with that.

Although, if read with the fact that monopoly watchdog Competition Commission of India had hauled up Amazon earlier this week for “unfair” trade practices, a move hailed breathlessly by the Swadeshi Jagran Manch and trader/retailer associations, you wouldn’t make such a benign interpretation. It won’t be some diabolical conspiracy either. It’s only pure politics. It will underline the BJP’s inevitable return to its basic instinct: Mercantilism.

This needs explanation. For decades, until the Congress-Left, post-Rajiv Gandhi, began describing the BJP as a Hindu party, Indira Gandhi had avoided doing precisely that. In an earlier National Interest, I had quoted from a conversation with Seshadri Chari, former editor of RSS mouthpiece Organiser, that she only described the BJP as a baniya (trader caste) party. The BJP has shown signs lately of proving Indira Gandhi right and returning to its trader mindset.

This is where the philosophical impulse of swadeshi also comes from. If someone has to profit from trade and entrepreneurship, it better be one of our own. And even if we let an outsider come and do so, he better be grateful to us rather than the other way around. Several strong emotions get meshed in this: Nationalism, protectionism, mercantilism, and arrogance. Who the hell are you to walk all over my market, out-compete my native businessmen and then expect me to say thank-you?

Foreign Direct Investment (FDI) had first started becoming fashionable in 1990-91, just as the Cold War ended. It was also a time when a deep economic crisis was building up in India.

Madhu Dandavate was the finance minister in V.P. Singh’s cabinet. Addressing one of those industry chamber gatherings, he famously — or infamously — said, something like, “I am not against FDI. But I won’t go looking for it”. Since he was a dyed-in-the-red old socialist, even this reluctant acceptance of FDI was seen as something to celebrate. But no foreign investor was impressed.

Also read: If anything can defeat Modi, it’s the economy

The reform of 1991 changed things. But attitudes deep down didn’t. India had already had four decades of socialist, protectionist, swadeshi, import-substitution, ‘exports are good/imports bad’ toxification across the political spectrum. The only force of the economic Right, the once-powerful Swatantra Party, had been destroyed and entombed under Indira Gandhi’s populism. Even the Jana Sangh by this time was singing the same socialist song, only fortified by its own economic nationalism. Atal Bihari Vajpayee, the only truly reformist BJP leader in a modern free-market sense, ran with the baton of reform. He had too little time.

Old ideologies, and we say this in a purely non-partisan sense (as in Left or Right, Congress or BJP), are extremely obstinate. Like the proverbial dog’s tail, you can’t straighten or bend these even in a dozen years. Some individual leaders can make a difference: P.V. Narasimha Rao and Manmohan Singh for the Congress, Vajpayee for the BJP. Under others, the ‘tail’ goes back to the way it always was.

Over the past five-and-a-half-years, we have seen the protectionist, anti-MNC, technophobic old notions return with a vengeance. This government now gives a 20 per cent advantage to capital goods made in India over imports, signalling a return to the old regime.

All it meant was that now a foreign company could ship its kits to India and assemble, for example, metro coaches in ‘joint venture’ with an Indian minority partner or even directly, and sell the same coach at a price much higher than an import. In budget after budget, we’ve seen tariffs go up, sectoral protections extended — steel is only the most visible example — and all kinds of government agencies, from regulators to quasi-policing organisations, go after foreign investors, especially in retail. After the last budget and the BJP discourse around it, that happily forgotten old, Indira-esque expression ‘import substitution’ staged a comeback.

That is the reason global business has seen its romance with Modi’s India fade. No one would say so in public, especially those that already have investments in India, or employees and other interests. Who wants ‘panga’ with a strong government? Even the mighty Vodafone CEO has to retreat after saying in agony that he will have to leave India, although he still might do that, after writing off a couple of tens of billions because of regulatory and taxation shocks and unpredictability.

Want more evidence? See how Jeff Bezos’ previous visit to India went in 2014, when he was feted by Modi and others, and his peremptory dismissal now. The explanation also sounds like Dandavate of 1990: I am not against FDI, but…

Also read: Why Indian economic tiger became puppy with tail between legs & what markets want Modi to do

You still want to know where this sentiment or push comes from? Play back the part of RSS chief Mohan Bhagwat’s Dussehra speech last year where he lays out his economic doctrine. We can describe it in one word out of these: Protectionist, xenophobic, swadeshi. Or, it could also be stated as, ‘We are not against FDI, but only in sectors where we need it, as long as it doesn’t hurt Indian business, and control remains with Indians’.

The most fascinating aspect of Modi in his sixth year with a big majority is how compliant his government has been to Nagpur. It has delivered on all of its big concerns: Cow, Article 370, CAA, triple talaq, anti-Pakistanism, and so on. Yet, it has reversed two decades of reform on trade, FDI in retail, and technology to harmonise itself with the RSS, not defy it like Vajpayee did.

In 2014, and again in 2019, India elected a “strong” government and prime minister because it was fed up of a “weak” one for a decade under Manmohan Singh. It has been stronger and more decisive in many areas, from retaliation for terror attacks to Article 370 to anti-corruption activism. But not on the economy. Besides GST, however flawed, and the IBC, it is difficult to find one big, bold reform, although I recently listed 10 bits of good news even in gloomy times for the economy.

Think about it. A government as weak as Manmohan Singh’s had the courage to deliver the India-US nuclear deal, thereby fundamentally shifting India’s geostrategic posture. Modi’s strong government, meanwhile, is struggling to seal a tiny, partial trade deal with the US, even as it celebrates this ‘strategic partnership’ co-founded by Singh and Bush/Obama. Vajpayee’s weak government ushered in the cotton revolution by permitting genetically modified seeds. Modi’s strong government is pussyfooting on agricultural biotechnology, more respectful of Swadeshi Luddites than a Vajpayee would bother to be.

Which takes us to our old argument: Are strong, full majority governments necessarily good, or do they have a problem? More to lose, no excuses to put off ideological demands and compulsions, and a constant need to save face? Are weak governments actually more decisive and less risk-averse because they have greater flexibility and humility? It is a particularly contrarian and provocative point. Which, indeed, is what it was intended to be.

Also read: Mohan Bhagwat throws a challenge at Modi, revives ‘Swadeshinomics’ amid economic crisis


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  1. This is as usual one sided Modi, RSS bashing which is well past it’s sell by date. Some Gupta lovers might like it but it is too partial a commentary as if everything that Modi did is wrong. Who gave electricity to poorest of poor in India ? Who gave toilets and gas connections to the poorest of poor ? Which govt caught 3 crore fake ration cards and stopped the loot from the PDS. ? This is a rot of 60 plus years which Shekhar Gupta will not talk about. Everywhere there was corruption during congress rule. One family , it’s sychophants in the party and the media became richer with every passing year. No one had the gall to question this till Modi came to power. Since 2002 SG has been bashing Modi and dismissing him as a non starter and yet every single time the people of this country have proved this darbari doorkeeper wrong. Not surprised by the sustained attacks on Modi govt week after week. After all that is the duty Mr SG has been assigned by 10JP.

  2. NDA lead by BJP is totally confused politically in absence of matured, experienced leadership. The unfortunate part of this Govt headed by person who never experienced Parliament and its rule. Dealing with various statutory committees and multiparty representation. Handling state politics of fairly small state with no creditable opposition, it was easy to rule high handedly which is not with center which represent 35 states and Union Territories with wide spectrum of political parties and ideologies. There are seasoned parliamentarians who got not only number of tenures but grass root level connect.

    Mr Modi being RSS Prachrak got into CM chair not by mandate of elected MLAs but imposed as leader by RSS backed BJP.

    Fortunately Gujarat is unique state where entrepreneurship is DNA and irrespective of cast equation they are aspiring business community. This was an added advantage for all CMs irrespective of parties the got elected,

    The other benefits BJP and Mr Modi in specific have in Gujarat that this state faced communal clashes for many years and partly appeasement of minorities by previous govts was anger BJP smartingly used and exploited in its advantage and used majority appeasement and divided society initially on Religious ground and then casts formula in choosing candidates.

    Gujarat model of development definitely topic of discussion but there are many indicators in social area where Gujarat is way behind states like Kerala or MP for Agricultural development. NE states are much above main stream states but they are small.

    Mr Modi’s success if at all is because he never faced democratic challenges within party or from opposition as state leader but that does work when you lead multi parties coalition and national level BJP, Modi 1.0 was slogans like Blackmoney with rich so DeMonitisation. Swiss Bank and foreign visit lot of marketing and PR exercise making slave mentality Indians feel great. But series of decisions boomeranged including anti corruption when BJP is not exposing about Election Bond controversy and Raffael,

    They also reduced constitutional institutes to dust like CBI fiasco of midnight drama, Midnight Parliament Session for GST launch. IB, ECI, Statistical Directorate, RBI and PMO reduced functions of Ministries to Depptt under PM. MEA and MoD was almost managed by PM and policy matters were handled by Modi bypassing authorise of Late Parrikar n Sushma Swaraj.
    Apart from accusation by opposition that Govt is managed through Nagpur Proxy. It is question only some investigative journalist can answer whether Modiji cares Mohan Bhagwat or RSS as mentor because BJP although claims democratic and blames Congress for dynasty rule but it is open truth that there is no voice in BJP and those did where shown doors and humiliated like LKA, MM Joshi, Yashwant Sinha, Shatrugan Sinha, Kirti Azad and the list too long,

    With parachute leadership now nation is questioning who will present crucial finance bill 2020 as Madam Nirmala is not seen on TV screen for long time. In fact she got into Parliament and Cabinet as party spoke person which job she did wonderfully,

    It it not economists outside party raised question about FM’s financisl wisdom but Mr Prabhakar, family members which she coloured as political opinion because his family had Congress MLA.

    BJP being in opposition for many years they lack experiencing of running govt. why AB Bajpai did wonderful coalition successful because he was seasoned Parliamentarian and knew give and take either respect or responsibility which I don’t think happening with present govt functionaries,

    The govt came to power with irrelevant issues like Ram Mandira, Hindu Rashtra, Common Civil Code, Abolishing hastily Art 370 and not but least is Aggressive push to NRC, NPR, CAA which caused nationwide agitations.

    So govt under Modi has 4 years 5 months because they have absolute majority so they just don’t care Sena’s Thakarey, JDU’s Nitish Kumar forget Athvake and smaller parties.

    Arrogance has gone to such level that our foreign policies are questionable. We will defiantly lose our neighbors like Bangla aadesh, Nepal, Sri Lanka, Myanmar to China because all your big brother attitude will not work and US, superpower will drive foreign relations with their business and strategic interest. It’s big Emerging Market but we forget that we are US$ 3 Trn aiming 5 by 2024 whereas Japan 4.9 now and Germany 4 approx are way ahead for population. The Commerce Minister’s meeting with Amazon founder and BJP’s foreign policy spoke person raising issues about Article in American News paper is not in good taste, BJP and its leadership is not in position to listen and tolerate because after 30 years they got absolute majority and Mr Modi is above party.

  3. From Alibaba to Hauwei. China has created global brands and challengers to American corporate hegemons. How?

    Chinese state supports Chinese companies over foreign ones. I guess CPC is also a Baniya party.

    India is not ready to compete with the western giants as of now. It’s the sad truth.

    First become competitive, then compete with the best. India cannot remain just as a consumer for foreign companies. We need to have our own corporate giants

  4. I am perplexed at Mr.. Gupta’s deep animosity for the Left and Left-wing policies.
    It’s OK even for journalists to have their own political inclinations or ideological convictions,
    but when Senior journalist like Mr. Gupta speaks they should attempt to provide a balanced narrative.
    For instance, he hardly speaks a word of path-breaking legislation of UPA as MNREGA , RTE and RTI acts, They were real game-changers.
    Instead,Mr. Gupta speaks of the Indo US nuclear deal. While I have to agree the nuclear deal was a great effort, but I am doubtful in the fast-changing geopolitical environment of today it will be as beneficial to India as envisaged.maybe the fact that the deal led to the break down of the partnership with the left was why he feels it was epoch-making.

  5. In fact all of India’s political parties have been Baniya parties, supporting crony businessmen, pampered employees, and unaccountable government servants. Consumers have always had a raw deal. In this the BJP is no different from the CPM/CPI. The only exception was the Swatantra party.

  6. There is no place for this kind of casteist stereotyping in a serious article. We can be grateful that he didn’t add the “cunning” epithet to “baniya”. Note that this kind of bigotry is rampant in text books in Pakistan and many of our Marxist authors (Varghese referred to Modi as a ‘cunning baniya’). While I consider Shekhar Gupta as a serious writer and analyst, but a lapse such as this certainly makes me reconsider.

  7. Modi 1.0 totall destroyed the economy. ModiAS 2.0 working hard to finish the national character, while they just pretend to govern.

    RSS with its so called experts like gurumurty, mohan bhagwat and all are just bent oo n creating a Hindu rashtra… economy is but a necessary evil that is hindering their plans. God save us all. …

    • Only Congress under the able leadership of Shri Rahul Gandhi & guidance of matashree Soniaji and Priyankaji can save securalism in India.

  8. If BJP doesn’t change and bring unprofessionals, the death will continue to be ‘Ram Bharose’. Nothing wrong in that, but God seldom backs money and economics. Neither does BJP. So buckle up brothers and sisters. We are all in for a rough ride. No innovation, no quality and competition, and no nothing of consequence.

  9. Shekar has not understood Modi , He is anti Modi so all his writings are not worth serious reading
    He is like the former editor of Blitz one Mr Karanjia

    Modi is doing what is required to be done and what was in the manifesto
    Every country has to look after their own interests
    Look at America First policy of Trump or china favouring Ali Baba over Amazon

    • Totally agree? The “charity begins at home” concept is being touted by many nations, including the USA. There is merit in the Govt’s line of argument that Amazon is undercutting locals with hefty discounts.

  10. 21st centaury is different from 20th centaury in many ways. life has become fast due to availability of many gadgets and great strides made in the field of mobility, communication, astronomical spread of Internet and its allay social media. So is case with attention span of individuals and societies. Earlier one family / individual could remain leader for decades by buying the limited group of print media. Electronic media was by and large monopoly of state. Now when news , views,— fake or otherwise — spread @ speed of light, it impossible to remain darling of masses on relying on social media only. Practical work has to be done and has to be visible. Then and only any then ruling leadership can remain darling of masses. The difference between what was promised and what is done is clear to masses. Here Modi government secures better than previous Governments . People are aware that he is doing which is feasible with his political strength and limitations. There are issues like economic growth rate, GDP numbers ,inflation, employment . These numbers and their movements have never remained constant or in uni-directional mode in India or abroad. There are times when these numbers were to the liking of many people and at a times these were pinching. Like seasonal harshness in climate , it is people who have to adopt to save themselves . As the season changes , people forget harshness. Once the current seasonal and cyclical stagflation abates and consequently disappears , the government of the day is/ will be evaluated on the points –whether it is performing government or postponing decisions, whether its apex-level leaders make headline news for corruption charges, whether it is making life easier and better, whether it is making country safer and raising the stature of the country in the eyes of world leaders and governments. What is its speed and ferocity of response to internal and external security threats. And whenever creditable single party alternative is available people will not elect multiple party alliances. So RG or not no RG or any permutation and combination of alliance , high performing Modi may be /will be clear choice In 2024 . Let us hope and pray for that Modi becomes and remains “Will be” choice .

  11. Actually BJP is letting go of a great opportunity to be one up on Nehruvian legacy. Nehru gave India IITs but also socialism causing massive brain drain. Modi should have offered an economic atmosphere potent enough to attract the brains back to India, ushering in an era of creativity and innovation. But as is evident, this government is hardly transformative, and Modi seems to have developed cold feet.

      • Only during elections ashok JI. Where are your Akhilesh etc etc the young Turks? Having a nice time in some spa?

        • Among the younger politicians, Sachin Pilot impresses. So does Jayant Choudhury of the RLD, although it is a tiny party. From what one has observed of Akhilesh Yadav, he had a development vision for UP, would probably have done better if elders in his party had not been so much of a distraction. I am no more a fan of the siblings than you are.

  12. 1. This is an interesting discussion. However, I think author has to bury his anti-BJP/RSS bias to do an impartial analysis of the existing socio-economic scenario in the country. 2. We have often seen that once a political party is in power it often makes all efforts to somehow remain in power. And for that it has to make all sorts of compromises. This observation holds good for every political party in India-Congress, BJP, Left parties and all regional parties. 3. If we see the whole picture without a bias, we will realize that we need to implement many reforms- administration, election law, economic/fiscal, legal education and so on. But how many political parties will actually implement reforms? 4. As I have mentioned earlier, once a political party is in power, urge or need to implement reforms is far less, at least that is most political leaders’ perception, as the party’s objective is to retain power and that is needs to be done at all costs. 5. In this kind of scenario, citizen-voters often find themselves to be just bystanders. They are helpless as they cannot do anything, say for example to demand implementation of reforms. I wished author had all this.

    • “Once a political party is in power it often makes all efforts to somehow remain in power. And for that it has to make all sorts of compromises” – so you are essentially agreeing with Shekhar Gupta that the ruling party has compromised on sound economic principles and yet accuse him of bias !!

      • I am sorry to say that you have not understood my basic point. It is that all political parties are compelled to make compromises and so called ‘Baniya” party, BJP, is no exception. However, it is unfair to point an accusing finger at BJP alone, overlooking the ground realities.

  13. The issue is quite complex and one can argue from different angles and prove his or her point of view, as Shekhar tried to do. By his logic, we should have a weak central government all the time so that some episodic decisions can be taken under duress which later can be claimed to a breakthrough! Our miserable failure is that we have not been able to bring down high level of taxes and other costs (like corruption, administrative and regulatory constraints etc ) on our businesses such that they can not compete with foreigners. We want to keep our local costs high and then jiggle around with concessions, reliefs, FDI etc. We need to change this basic paradigm for which Modi as the PM must use his political capital and get big bang structural reforms which will indeed result in ‘minimum government, maximum governance’. Once this is done, opening door for any FDI will hardly be an issue. Take our deficit with China. We cannot sustain it indefinitely and its causes are structural, apart from mercantilistic attitude of Chinese. Aiming for free trade and open economy, we can not allow our businesses to be destroyed. We have come a long way in bits and pieces over the years and now Modi has power to deliver the punch but he is shying away from it. For a A leader who can take huge political risks such as Demo, Dhoklam, Art 370, surgical strikes, Balakot etc, changing Nehru-Indira structure of economy should not be an issue at all, particularly when he can continue to do whatever he wants for the poor and keep his voter constituency intact. Just as CAA is neither pro nor anti Muslims, such economic reforms would be neither pro nor anti poor but pro Indian Economy. In fact, once internal business paradigm is changed, it will be the business community who will demand open door policy for getting capital and technology.

  14. “ Strong “ versus “ weak “, I think it really doesn’t matter. It all depends on the vision and worldview at the apex. The sheer size and talent / creativity of its people give it a natural buoyancy. However, even these can be drained of vitality, as seems now to be happening. What do 272 lampposts really add up to in practical terms. Unable to yield the ministerial talent a first rate government requires. The world is falling out of love with India, for sure and more swiftly than could have been foreseen.

  15. The further India retreats from globalisation and the rest of the world, the more we will lose out on growth and even much needed job creation. ( The trade war is hurting the US economy as well, but we are not in their league. The partial US – China trade deal at least sends out a signal that there will be less adventurism going forward. ) The complete aversion to structural reform over six years has created the tanking economy we now face. It has begun to bite politically, as the results from the states are showing. The IT Cell will have a growing list of global stars to attack. Who will drop into the Indian stalls at Davos for complimentary hot coffee and hot air …

  16. I share your sentiment that BJP is a a rank Baniya party, though I am its supporter with some reservations. Its two moves have hurt the consumers and benefited trade and industry. One, imposing curb on e-commerce sellers not to sell through related parties, resulting in reduction of discounts to consumers. Two, steady reduction of FD rates by banks, in the foolish hope that cheaper loans would boost demand. This government is not with Sab ka saath. It is with Baniya ke saath. Aout trader-community is notorius for short changing the customers, which Amazon and flipkart don’t do.

  17. To expand on your last few para’s, Indian politicians and backroom boys only respond with decisive action when their backs are to the wall! The classic case is the 91 liberalisation. Only when faced with the ignominy of default and bankruptcy was the economy unshackled. Cut to 2019, with a 2 Trn dollar economy its back to business as usual. Suddenly we have started to consider ourselves as a nation that can make a difference with our diffident attitude. It is clear that India is NO LEADER for global change. We would rather be the boys pretending to be men! What we forget is that if we are to play the big game with the big boys, we need to be far stronger than our puny economy. On idiots who compare our GDP with the UK, they gloss over the fact that a nation the size of Bengal with a population percentage in single digits compared to us matches our GDP figures. We want to aim for a 5 Trn economy, yet we want to be protectionist and not follow the China example from the 70’s. There is absolutely no leadership from this or previous governments on moving up the value chain. Economics is not mandated by vote banks – it can never be. And countries cannot become rich by classifying the driving force of 5 percent of the population as “class enemies” by populist leaders. If politicos have the guts – they should aim to start taxing the trading and agricultural (not all – but landowners holding excess of 10 acres) communities who so far have been blessed with a free lunch. Anyways my two bits.

  18. The answer to authors question at the end lies in the past, Indira Gandhi had unparalleled power for two decades, and look where she took the country.

  19. Well written. If the people of swadeshinomics school are so concerned about FDIs in India, give the consumers an Indian variant of amazon. Flipkart is no longer indian. If they hate us using foreign brand mobile phones, give us a functional indian variant. Otherwise they are taking us back. To all the “small” traders who are fighting amazon/e-commerce, no one stopped you from coming up with e-marketplace. Form a cooperative and get cracking. No one is gonna shower money on you because you are “small”/swadeshi. Indians are very unlucky. We lack economic right. Left’s socialist economics condemned india to poverty, swadeshinomics won’t be any different.

  20. Socialist modi murdabad, rss murdabad. Amazon and free market capitalism zindabad. Piyush goyal tera mooh kala.

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