India at 75 – The perils of Democracy

India’s democracy has been consistent as we discussed yesterday- a remarkable achievement for a developing nation. But it hasn’t been all sweetness and light. I’ll preface this piece by saying, this is a highly simplified version of how things have gone, but done as a sort of an “India for Dummies” narrative.

India has since independence seen incredible levels of political corruption in addition to destructive protectionism, Socialism, martial law, Nativism, corrupt capitalism and sectarianism. India has always prided itself on being a Secular Republic, but the former is in serious jeopardy today.

And India’s journey is a reminder that democracy is always executed at the whims of the electorate, for better or worse.

Having come off a brutal experience with British rule, India’s initial political leadership was very much guided by the scars left from the colonial experience. While most were socialists including Jawaharlal Nehru who was Prime Minister, some were what we’d describe as free market capitalists. The result of this hybrid political leadership which governed the country into the early 1990’s was something derisively called the “License Raj,” by one of independence generation’s more conservative/market-driven leaders, Rajaji. But until the 1990’s, the economic views of those like Rajaji (who passed away in the early 1970’s) were a distinct minority opinion in India.

The economic setup was entirely protectionist, with a cross between socialist elements favored by Nehru and free market ones favored by other members of the governing Indian National Congress party. The ultimate takeaway was that bureaucracies regulated private business intensely and fearing being “colonized” again by the west, this time via western companies, Indian industry was protected. While Nehru was deeply interested in Marxist theory, he didn’t seek a Soviet-model, but certainly one that was nationalist, owing itself to the scars of colonialism. This meant effectively foreign companies were blocked from the Indian market and the largest Indian companies were pushed by the state to move into far-flung industries, creating companies that didn’t specialize in something, but did too much and therefore did most things poorly.

The role of unions also contributed to this, so as time went on, the Indian economy became less and less vibrant – closed, corrupt and dominated by what we would rightly today call Oligarhs and a few large privately-held consortium’s with all sorts of political influence.

In the 1990’s, India opened up after a crisis in the 1990-91 recession, where foreign exchange was badly needed. What resulted was a corrupt capitalist economy, with foreign companies, mostly American or Japanese/Korean swarming into India, and creating collaborations with the existing Indian corporate behemoths, or competing with them outright.

The flooding of consumer goods into the Indian market and new economic opportunities created a middle class, but this new middle class began voting much like their western counterparts – for corrupt, industry-backed capitalists. So Indian democracy had produced a country that went from one bad extreme to another.

But the nation was always democratic with the exception of a dark period between 1975 and 1977, when Prime Minister Indira Gandhi effectively declared martial law to remain in office, following a court decision. Members of my family played a not-so-insignificant role in the events, in a judicial and law enforcement capacity, so it’s a subject I’ve spent many years thinking about. The upshot of it, was while journalists and political opponents were jailed, everything proved temporary and the democracy held as new elections were called due to massive public pressure.

Meanwhile, since the beginning, vote buying has without question been a problem and more recently, nativism and sectarianism has led to the breakdown of mutli-ethnic national parties, replaced largely by regionalized or religious/ethnic-based political parties. India’s future looks cloudy, even as it becomes a top five global economy – because religious-based fascism as exemplified by the current governing party, the BJP is on the rise.

So with secularism on the defensive, the 75th Anniversary of Indian independence, is bittersweet in many ways and the world’s largest democracy’s greatest test might be still to come.

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