Independent Suit-Boot India
An exchange between India’s first prime minister Jawaharlal Nehru and legendary industrialist JRD Tata is illuminating. The two men, acknowledged as architects of modern India, had a close but at times frosty relationship. Nehru was a Fabian socialist, Tata an unabashed capitalist.
The exchange between them, published in Gita Piramal’s book Business Maharajahs, reveals Nehru’s mindset and why India spent 44 post-Independent years till 1991 in povertarian socialist economic policies: “JRD remembered one particularly sharp exchange of words. Nehru told me, ‘I hate the mention of the very word profit.’ I replied, ‘Jawaharlal, I am talking about the need of the public sector making a profit!’ Jawaharlal came back: ‘Never talk to me about the word profit, it is a dirty word.’”
If Nehru considered “profit” a dirty word, daughter Indira Gandhi took the prejudice further. She nationalised banks, raised the income-tax rate in the highest bracket to 97 per cent and established the Licence Raj. Crony capitalism now grew deep roots. To his credit, son Rajiv Gandhi did try to prise the economy from the grip of crony capitalists. Their success lay more in their proximity to the corridors of power in Delhi than on merit. Most of Rajiv’s early ‘A’ team was made up of private sector executives like Arun Nehru and Arun Singh. They were soon swept away by the crony ecosystem that lived on patronage and favours.
Congress President Rahul Gandhi seemed to understand his father’s unfulfilled ambition to create a merit-based system, shorn of patronage and nepotism. He started an infotech company with its headquarters in Mumbai, far from the labyrinithic machinations of Delhi. But he was quickly co-opted by dynastic politics. Fourteen years after he “inherited” the Amethi parliamentary constituency from his father in 2004, Rahul has regressed all the way back to grandmother Indira Gandhi’s politics of poverty.
The symbolism of povertarian politics remains strong in India even 71 years after Independence. By calling Prime Minister Narendra Modi’s government a “suit-boot sarkar”, Rahul changed the economic narrative. Unlike Rahul, Modi grew up in relative poverty. He knows how the poor live, their hopes, needs and dreams. Aspiration is the bedrock of the poor. Every parent wants his or her child to have a better life, a better education, and better opportunities.
For Rahul a kurta-pyjama is a form of inverted snobbery: he can afford Savile Row suits. For those who can’t, aspiration drives them. At the time Nehru told JRD Tata that profit was a dirty word, more than 60 per cent of Indians lived in dehumanising poverty. For them profit was not a dirty world. It was an escape from poverty and the route to a better life for themselves and their families.
Modi, despite his street-smart shrewdness, fell into Rahul’s trap. For two years after the suit-boot sarkar taunt, he embraced Nehruvian povertarianism. It was only last month that he gathered the courage to publicly praise industrialists as creators of wealth for middle-class shareholders and of jobs for millions across socio-economic demographics.
The economist Swaminathan S Anklesaria Aiyar wrote cuttingly in The Times of India: “The Left – including Rahul Gandhi – may pretend that the source of all corruption is the suited-booted businessman. Yet the thrashing of Rajiv Gandhi in the 1989 election and of Sonia in 2014 flowed from voter conviction that the biggest crooks were those in khadi and Gandhi caps. The second term of the UPA government from 2009 to 2014 was marked by scams galore, and a massive anti-corruption agitation led by Anna Hazare that finally cooked Congress’ goose. In (this) era, which Congress still extols as the great socialist legacy of Jawaharlal Nehru and Indira Gandhi, free business decisions and competition did not exist. Every industrial licence was a favour bestowed through political discretion, and not competitive rules. Every import licence, every foreign exchange allocation, every clearance and permit was a favour.”
Modi’s rediscovery of India’s wealth-creators is notable. And yet it should not blind him to the remnants of cronyism that still exist in the system. The Licence Raj is gone. Businessmen and their proxies no longer prowl the corridors of North Block. Industrialists don’t need to meet the prime minister who actively discourages such meetings. But the bureaucracy, used to decades of cronyism, remains hidebound. Decisions still take far too long. Procedures, despite Modi’s efforts to introduce technology and transparency into processes, remain discretionary and arbitrary.
Hope lies in the emergence of a new generation of start-up entrepreneurs. They have turbocharged the economy with innovation, creating new opportunities and levelling the playing field. Logistics firms are paying non-matriculate delivery boys an unheard of Rs. 40,000 per month. Incentives for fast delivery can raise that salary package by 100 per cent.
This is aspiration at work. Young men are moving into the middle-class faster than they could have imagined. Meanwhile, the online hospitality and health care sectors have created opportunities for young women, making them economically independent. No longer are they tied to the tradition of an early arranged marriage. No longer too are daughters considered a burden on a family. They are a boon.
As aspirational India expands to smaller towns, the social transformation it will bring about can be a significant collateral benefit. Those born with a silver spoon often patronise the poor, denying them the same privileges they themselves take for granted. Rahul Gandhi’s family co-opted the suit-boot business class for decades. It is time, as India enters the 72nd year of its Independence, that every Indian, however poor, has the opportunity to aspire one day to join that class.
Rahul should remember that the Nehrus themselves emerged from near-penury in the 19th century to become a suited-booted family during the British Raj. Motilal Nehru grew up in relative poverty, his family uprooted from Delhi following the uprising of 1857. It took Motilal decades of aspirational legal practice in Allahabad to establish the Nehru dynasty. Rahul Gandhi, the latest in this line of dynasts, should be the last person to begrudge India’s poor the aspiration to an assent up a socio-economic ladder his own family climbed a century ago.
