A party ahead of its time

Aditya Balasubramanian's book questions the prevailing narrative surrounding the decline of India's political outfit dedicated to free market ideals and highlights its lasting significance

Toward A Free Economy: Swatantra and Opposition Politics in Democratic India

Author: Aditya Balasubramanian

Publisher: Princeton University Press

Pages: 323

Price: Rs 799

By 2016, Prime Minister Narendra Modi jettisoned his election promise of delivering economic reforms. Instead, his government embraced what his Finance Minister Arun Jaitley would privately decry as “povertarian” politics. The government also turned to pursue a hard-line Hindutva agenda, disillusioning those who thought Mr Modi would reshape the Bharatiya Janata Party on the lines of the Swatantra Party, a non-denominational right-wing conservative party wedded to the ideals of free market and anti-statism. To some, in hindsight, the Swatantra experiment seems like an idea before its time.

When asked a fortnight after its founding in Bombay on August 1, 1959, Jawaharlal Nehru laughed off the Swatantra Party’s creation. “It is a ghost-like party, ghosts of the last century, ghosts of past ages,” he said. The prime minister conceded that “ghosts can make a nuisance of themselves”. Nehru died three years before Swatantra became the nuisance it did in 1967. In the Lok Sabha elections that year, Swatantra won 44 seats. Its leader Minoo Masani became the leader of the joint Opposition since it was the second-largest party.

The Indira Gandhi-led Congress formed the government but dropped 79 seats, from 361 to 283 out of 523, and lost power in seven of 16 states. In the Assembly polls, Swatantra, strengthened by the merger of the Ganatantra Parishad, a party of ex-princes, formed the government in Orissa. It was a constituent of the victorious DMK-led alliance in Tamil Nadu. Swatantra emerged as the principal opposition to the Congress in Gujarat, winning 66 of the 168 seats with a 38.2 per cent vote share and was the runner-up to the Congress in Rajasthan and Andhra Pradesh. Four years later, in the 1971 elections, Indira Gandhi’s Garibi Hatao wave swept away the Opposition. Swatantra won a meagre eight seats and disintegrated soon after.

The author of this exhaustively researched book writes that subsequent scholarly and popular opinion did little to dispute Nehru’s assessment. The narrative persists, he writes, that the party of zamindars, maharajas and big business “died of embarrassment” after it was “abandoned without regret” by certain business groups. But, the author, a lecturer of economic history at the Australian National University, has argued that Swatantra’s significance exceeded its legislative returns.

Swatantra’s free economy plank took on multiple meanings, such as opposition to the “socialistic pattern of society”, which C Rajagopalachari, a co-founder, dubbed permit and licence raj. For Masani, it meant a country of free enterprise, and N G Ranga saw in it a self-employed economy of peasants. Its focus on inflation, which it labelled a “crime against man”, became a key point of appeal against the Congress in the years to come, as did its campaigns on taxation

and corruption.

Swatantra aligned with regional parties electorally and with other Opposition parties inside Parliament as a countervailing force against India’s Congress-dominated “one-footed” democracy. The party raised no-confidence motions, was involved in parliamentary committees, styled itself as the defender of the right to property and the right to constitutional remedies, and sought to check executive power through petition campaigns and Supreme Court challenges. Masani became the first chairman outside of the Congress of the Lok Sabha’s public accounts committee. During his tenure (1967-69), the committee criticised inefficiency and waste by the government.

Swatantra unsuccessfully protested the 17th amendment to protect the interests of rural landlords. Its treasurer Rustom Cavasji Cooper petitioned against the nationalisation of 14 banks in 1969, forcing the Indira Gandhi government to pilot a revised nationalisation law in Parliament. It also challenged the 24th amendment, the abolition of privy purses. After the amendment failed passage by one vote in the Rajya Sabha, Indira Gandhi introduced it as an ordinance, which the Supreme Court struck down, ruling that the president had no power to amend the Constitution.

The key constituency of the Swatantra, the author says, was a loosely defined “middle-class economic citizen suffering from red tape, inflation and taxes”, urban professional, a peasant proprietor or a small business owner, threatened by the bureaucrat, the Congress politician and the big businessman. Ironically, over 80 per cent of its voters in 1967 were from rural India. Masani and his colleagues had an ambiguous understanding of this target common man demographic. Masani defined the middle class as those with an income of up to Rs 25,000 per year in a country where output per capita was just two per cent of that amount, the author says.

Interestingly, Masani, who started as the right-hand man of Jayaprakash Narayan in the Congress Socialist Party, published four illustrated children’s textbooks during the 1940s, including Our India – 1940 , which sold over half a million copies within seven years of its release. Manmohan Singh credited Our India for sowing the seeds of his aspiration to become an economist,  Aditya Balasubramanian says. In 1957, Narayan helped Masani get elected to the Lok Sabha from Bihar. His parliamentary speeches slammed deficit financing, and he cautioned that the five-year plans were putting in place bureaucratic state capitalism as against private capitalism. Two years later, Masani met Rajaji to launch Swatantra.

The author says Swatantra offered a new political language and provided representation to new commercial groups and upwardly mobile professionals who were the products of a changing Nehruvian India. But it did not deal with unspoken dimensions of a free economy — the patriarchal household division of labour, patterns of lower-caste exploitation, or questions of gender, religion and caste. It had limitations in accommodating minorities, but it did not exclude them as a matter of principle.

Swatantra also lacked mass connect. Its leadership comprised the English-speaking elite. It is revealing, the author says, that a phrase like “permit and licence raj” never had an Indian language equivalent. He says the term’s original connotation, as defined by Rajaji, of an oligarchic coalition between the dominant party, big business and elite bureaucracy was forgotten when post-1991 it was used to describe the four decades before liberalisation.