As Prime Minister Rajiv Gandhi prepares to leave for Moscow next Tuesday, he would do well to assume that the Soviet leadership would wish to take a measure of him and his ideological orientation just as he and his aides would wish to assess Mr. Gorbachov who is also new to his office. Since this assessment by both sides will greatly influence the course of Indo-Soviet relations in years to come, the visit has acquired an extraordinary importance. It should be treated as such.
In such matters a great deal depends on what the Americans call the personal chemistry of the two leaders. They either click, as did Mr. Nehru and Mr. Khrushchev despite their very different social and cultural backgrounds, or they do not, as Mrs. Gandhi and President Nixon did not. But images also count.
In view of the controlled nature of the Soviet press, it is not possible for us to say for certain whether the Soviets have a positive or a negative view of Mr. Rajiv Gandhi. The writings of the generally pro-Soviet leftists in the country are also not much help because, for some years, they have not been speaking in one voice. They are certainly not speaking in one voice now.
The problem, however, is by no means insuperable. Though it would be wrong to think that the Soviets are alarmed over Mr. Rajiv Gandhi’s supposedly pro-Western outlook just because the Americans are so enthusiastic about him and his desire to bring in sophisticated technology which by and large only the West and Japan can supply, it would be safe to assume a certain measure of concern among them on this count. After all, they cannot believe that American expectations of Mr. Gandhi are wholly misplaced.
Populist Garb
The Soviet impression of a pro- Western Rajiv Gandhi could have been reinforced by what happened at a recent meeting of the AICC where he had had to agree to a redrafting of the economic policy resolution to provide for a reiteration of the party’s commitment to socialism. For if so many old Congress leaders felt that Mr. Gandhi’s government had deviated from the party’s established policy, the Soviets cannot be blamed if they too have drawn a similar inference.
Perhaps we are being unfair to the Soviets, perhaps they have a better appreciation of the Indian reality than either the Americans who tend to swing from the one extreme of enthusiasm to the other of cold indifference, or some of the Congress leaders and left-leaning intellectuals who have been fed on slogans for years and, indeed, decades. Even so there is no harm in assuming that the Soviet view of the new Indian Prime Minister might be clouded by what has been said and written about him in recent months both at home and in the West.
This is not a proper occasion to go into a detailed discussion of the economic policy India has followed fairly consistently since the first five-year plan was launched in 1951. But we have to take note of the fact that its substance has been quite different from its presentation. While the principal goal has been growth, it has all along been given a populist garb.
It is also not possible for us to discuss here the larger issue whether socialism, however defined, is possible in any developing country whatever the nature of the regime. This issue dominated the debate among Russian Marxists before the October revolution in 1917 and it has dominated the debate among Marxists ever since and it is by no means resolved.
But whether or not the Soviets are right in their claim that it is possible to skip the capitalist stage of development, neither Mr. Nehru nor Mrs. Gandhi ever took that position. In Mrs. Gandhi’s case, it would be readily agreed that she was a pragmatist and not an ideologue. In Mr. Nehru’s case, such a proposition would be widely disputed. But if he was an idealist and as such favoured a socialist order, he was also a realist who knew that it was not a practical goal for a long time in India’s conditions and, equally important, a democrat which meant that he was not interested in forging the instruments of coercion which the Soviets and other Communists in power have used to establish what they call socialism. He could not have forged such instruments even if he had tried. But that is another issue.
On achievement of independence, the central task for India’s new rulers in the economic field was the country’s industrialisation which they regarded as the key to the solution of India’s many problems. Some of them felt that Indian entrepreneurs could accomplish this task. Mr. Nehru did not share this view, partly because he did not have much respect for Indian businessmen and opted for a mixed economy in which the public sector would be in control of the “commanding heights.”
This approach was a product of a compromise between his ideological commitment to democratic socialism and his pragmatic appreciation of the Indian reality. But whatever Mr. Nehru’s predilections, it was a stroke of genius. The approach matched India’s needs and capabilities.
India’s, like Germany’s in the 19th century and Japan’s in the earlier part of this century, was a case of delayed industrialisation. This process could not possibly proceed at a worthwhile speed in the normal capitalist way. That would have required a century or more. India could not afford to wait that long. Other helpful circumstances for facilitating the capitalist path of development did not exist. The Indian economy had been stagnant for as long as half a century; the country had been impoverished to an unbelievable degree; its scientific-technological base was as small as its resource base; and it did not possess an industrial entrepreneurial class of any strength and distinction. With some exceptions, India’s big business houses were big only in name and they were essentially trading houses.
In the heat of the debate, influenced in no small way by the cold war, these realities have generally got ignored, with one section of articulate Indians arguing that Mr. Nehru and Mrs. Gandhi diverted unduly large resources to an inefficient public sector and the other arguing that they allowed too much leeway to the private sector. The fact has been that India could industrialize even to the extent it has only under the auspices of an interventionist state with both the public and the private sector playing a role in it. India has not deliberately copied the Japanese model. But, as in the case of Japan, the Indian state has had no option but to play a critically important role in the country economic growth.
Clear direction
The nature of a state’s intervention in the economy is never determined wholly by the objective requirements of a country’s development goals. For no state is ever a neutral agency. It consists of human beings who have their own predilections and interests. In India’s case the intelligentsia, from among whom the Indian bureaucracy has been recruited, has functioned as a class in some ways similar to Djilas’s new class in socialist countries. It is a product of British colonial rule; it is separated from the common people by language since it is educated in English; and it does not have much respect for Indian traditions. This mandarin class imposed on the Nehru model of a mixed economy a regime of controls, licenses, quotas and permits which gave it enormous powers and in the process distorted the model. While it is immaterial whether it did so deliberately or not, it is indisputable that the Indian bureaucracy has enjoyed enormous powers of patronage under this dispensation.
The often unnecessary and arbitrary regulations did not frustrate the industrialisation programme so long as India was engaged in import substitution. But once this phase was over, as it was well over a decade ago, the country’s industrial development slowed down. Mrs. Gandhi was aware of this problem and was trying to resolve it in the only way it can be resolved, that is by relaxing controls on the private sector, especially on the so-called monopoly houses which are better equipped to innovate and take advantage of rapid developments in the field of technology. Mrs. Gandhi moved hesitantly, as was her wont. But the direction had been unmistakable since her return to office in 1980. Mr. Rajiv Gandhi’s approach is, therefore, a continuation, even if a bold and unhesitating one, of his mother’s.
It is understandable that many Americans, who distrusted Mrs. Gandhi for reasons we need not discuss here, should have ignored this fact of continuity in their assessments of Mr. Rajiv Gandhi. But it is rather baffling that Mr. Gandhi and his aides should also have failed to emphasize this aspect of his economic policy. Perhaps they wanted to make it appear that they were making a brave new start. Perhaps they were not aware of the political risks they were taking quite unnecessarily.
Be that as it may, two points need to be made. First, whatever the popular language of Indian politics, socialism has not been the issue in India and it cannot be an issue in India for a long, long time to come. Though tempered by a variety of other considerations inevitable in a democracy, growth has been and remains India’s central problem. Secondly, the Indian economy has reached a stage where its future growth calls for a different approach from the one that has been pursued so far. The state’s role will remain critical in respect of the infrastructure and it will have to continue to set the broad guidelines. But it will have to allow far greater freedom to private enterprise and managers of public sector undertakings. Modern technology flourishes only in conditions of great flexibility. Mr. Rajiv Gandhi is trying to cope with this reality of the modern world.
Complex Situation
So the superfluous controversy over Mr. Rajiv Gandhi’s ideological commitment, or lack of it, need not inhibit a frank discussion between him and Mr. Gorbachov on future economic cooperation between the two countries. This cooperation will be greatly facilitated if Mr. Gorbachov is able to push his plans for economic reforms and modernisation in his own country. For it is no secret that right now the Soviet economy is not in a healthy enough state to offer what India needs because in a number of vital fields it is lagging behind the West and Japan by as much as a decade. This obstacle has operated for many years already.
Indo-Soviet friendship has not rested and cannot rest solely on the Soviet supply of weapons to India, however vital these may be. It has had and it has to have an ever-expanding economic component. The difficulty in this field has not been and is not going to be some shift of emphasis in India’s economic strategy. The trouble has been the lag in the Soviet Union’s progress in technology as Mr. Gorbachov must know as well as anyone else. Moscow can help India in certain non-military fields as well, as its past offers of a nuclear power station would show. But this is a field in which India has achieved self-reliance at considerable cost, and it is far from clear whether it should again go in for a turnkey project.
On our part, while we take note of Soviet problems, we must not, in our euphoria over the supposed prospects in our economic relations with the United States, ignore the dangerous implications of what the Americans are trying to do, not just in respect of the nuclear arms race and the power balance in different regions, including our own, but also in respect of the world economy. It is a complex situation in which we need the cooperation of the Soviet Union as well western Europe and Japan.
Since I have written on the problems arising out of the Soviet military presence in Afghanistan, it is not necessary for me to cover that ground again. But it may be appropriate to say that this issue deserves to be discussed between Mr. Gorbachov and Mr. Gandhi fully and frankly. Without question this is a most crucial foreign policy issue for India in which the Soviet Union is directly involved.
The Times of India, 18 May 1985