FDI: BJP’s diffidence and fear is baffling, befuddling

While the Congress’s internal differences may have given it a free pass this time, the issue of FDI in retail should also serve as a wake-up call for the BJP. Since 2004, the party has tied itself in knots in articulating a coherent economic policy.

Knee-jerk opposition to reform — FDI in retail and perhaps insurance being prime examples — is everyday politics for many Indian parties. Most of them conform to some sort of socialism. For the BJP, on the other hand, commitment to a greater role for the market, a rollback of the state and aggressive deregulation can be a badge of compelling pan-Indian distinctiveness.
Why is this distinctiveness important for the BJP? It is not just a theoretical indulgence and a concession to some textbook definition of the ‘right’. Rather, it is rooted in electoral reality.

Lok Sabha elections today are an aggregate of state elections. Regional parties get the bulk of the votes. A national party that leads an alliance gets a thin incremental vote spread across the country. More than that, it gives its alliance/coalition a platform and an identity. It does so by formulating national-level policies appropriate to its chosen world view.

The Congress has done this by promoting welfare and dole initiatives such as the National Rural Employment Guarantee Programme.    

It has placed itself firmly left-of-centre. Similarly, there is a vast space to the right of the polity just waiting to be occupied — but the BJP resolutely refuses to occupy it.

Take the retail issue. The BJP’s initial and completely non-nuanced hostility came from Murli Manohar Joshi and Uma Bharti. It was only a few days later that Arun Jaitley made a more wholesome intervention, couched in reformist language even if you disagreed with some points. This attempted to fight off the idea that the entirety of the BJP top brass was being deliberately Luddite.

Yet is the BJP serving itself by surrendering economic pronouncements to Joshi and Bharti? The lady threatened to personally burn down the first Wal-Mart store in India. Such nonsense, at a time when public opinion is less and less tolerant of direct action for political ends, can return to haunt the BJP. If it hadn’t been for the Congress’s in-house squabbles, the headlines from the retail imbroglio could well have been: ‘Uma Bharti promises arson’ or ‘Has the BJP fringe changed at all?’

The India of 2011 is very different from the India of 1991, of course, but also the India of 2001 or 2004. Indian business — and here one refers to not just a small clique of tycoons in the upper echelons but also a broader population of stakeholders in the India growth story, ranging from textile exporters in Tirupur to BPO employees in Gurgaon to a construction site supervisor in Lavasa — is anxious for greater urgency in policy making. It is seeking an alternative to the Congress and the UPA. If the BJP can offer a sensible economic agenda, this vote is there for the asking. If Bharti continues to offer to burn down Wal-Mart stores, it is quite another matter.

The BJP’s diffidence and fear in taking an assertively pro-market position — albeit assertively pro-market in an Indian context, which would still appear middle-of-the-road if not centre-left in, say, the United States — is befuddling. Politics is about grabbing market share. It is about defining or creating a product for which demand exists but supply is limited.

Becoming the party of further reform and greater deregulation, and thereby tapping into the politics of growth and aspiration, is about the only card the BJP can play. Yet its Delhi-based leadership does so only quietly and surreptitiously, as if it were embarrassed.

Occasionally, Jaitley gives a speech. Off and on Nitin Gadkari talks of how as a self-made businessman himself, he values entrepreneurship. For the rest, there is absolute silence.

Yashwant Sinha doesn’t sound like the reformist finance minister he once was. Arun Shourie is in the wilderness. As for LK Advani, his alienation from a contemporary economic idiom is frightening.

A right-wing framework is made up of three elements: identity politics and nativist prejudice; pragmatism on security and strategic issues; and free-market economics. It is important to get the mix right, depending on popular concerns of the day and a society’s priorities. In the past few years, the BJP’s mix has gone awry and rational economics has been trumped by other factors. The party needs to redress this before 2014.

The writer is a New Delhi-based columnist
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