Fake Nationalism dressed up as 'Make in India'
Economic policies being pursued in India since the 1990s, as we
have seen earlier. have been designed to hand over control over our
economy and the livelihoods of our people to foreign companies and
foreign capital. We can argue that this is the true danger that we face
from 'anti-national forces' -- the danger of losing sovereign control
over our own destiny.
The current campaign of the government titled 'Make in India'
is a clear example of this. The campaign involves inviting global capital
to come in and exploit India's cheap labour, while foreign companies
are provided tax breaks and subsidised land. They are also free to back
profits that they make in India, using our resources and our labour; not
very different from the practice of British capital during the colonial
period. This is in contrast to how self reliance and development was
conceived in the national movement, where developing knowledge
was seen as integral to the process of developing the country and its
people. This is the difference between 'Made in India' and its
indigenisation vision, as opposed to inviting global capital to 'Make in
India'. India's policy of self reliance grew out of the belief that if
India had to grow, it must invest in its people. Even when global capital
was invited, it had to transfer knowledge and technical capability. The
difference between 'Made in India' of the post independence years
and the current slogan of 'Make in India' lies here. One involved
transfer of knowledge and building upn that knowledge, the other is
simply handing over labour, land and the Indian market to foreign
capital.
The difference between the vision on development, of the
national movement and of those who propose a 'pure Hindu nation'
is related to differing notions about nationalism. In the inclusive view of nationalism that grew out of the anti-colonial, national movement,
the nation is its people. In the current exclusionary view of nationalism,
it is the land that is the nation; it is the land that is pure: the punya-bhumi
and pitri-bhumi. But global capital is free to enter India, plunder its
resources, and those who allow this are seen as pro-development and
nationalists!
Founders of the National Movement knew who the real
enemies were
The early nationalists such as Dadabhai Naroji were clear that it
was colonial rule that was bleeding India and enriching Britain. His
'drain' theory, in which he attempted to show the role of colonial rule
in creating poverty in India, was one of the earliest in trying to understand
the economic costs of colonialism. Indian nationalists knew that British
as conquerors were different from the earlier conquerors. Babur
understood that once he was ruling India, there was no way he could
go back to his beloved Farghana. India absorbed the Mughals, as it
absorbed earlier conquerors. They became as much a part of this land
as any others. Not so with the British.
The colonial conquerors looted, enslaved, massacred the people
of Americas, Africa and Asia on a grand scale, and finally built a system
that continually created wealth in the their own countries while
impoverishing their colonies. That is why, as we can see from Angus
Maddison's classic work in the graphic below, India and China, which
till the 18th century, produced about 50% of the world's GDP, came
down to less than 10% within the next 200 years.
Source: More than 2,000 years in single graphic
The effect of colonial rule was not limited to the draining of
wealth from the colonies or semi colonies. Imperialism was creating a
system that lead to the continuous development of productive forces
by harnessing science and technology, while bleeding the colonies. Along
with the increasing production of goods unleashed by the industrial
revolution, it transferred raw materials from the colonies. It also
destroyed the manufacturing industries in the colonies, converting them
to captive market for selling of goods from its own factories
It was slave trade from Africa, colonial plunder from India, and
other parts of the world that “financed”, or provided the necessary
capital for the industrial revolution. As Karl Marx noted “... capital
comes dripping from head to foot, from every pore, with blood and
dirt.” While capital was and is extremely destructive, it also built
productive forces on an enormous scale. This is because it harnessed
science and technology for the production process. Development today
is not just the development of factories and machines but the knowledge
that is embedded in the machines.
The fight against British Colonialism shaped nationalism
in independent India
The national movement was clear that it would not be enough
to overthrow British rule in India. Independence would be meaningless
if people continued to languish in poverty. Independence meant not
only throwing out the colonial rulers but also development for its people.
That is why Subhash Chandra Bose, as the Congress President in 1938,
asked Nehru to head the National Planning Committee. Planning for
development was a core vision of the national movement. Developing
the capabilities of its people and removing poverty was integral to this
vision of a free India. This is why economic nationalism – making the
economy free of foreign capital – was central to the independence
movement.
Those who shared the vision of India defined by race and religion
proposed by Golwalkar and Savarkar, such as the RSS, did not share
this vision of a free India. For them, a sovereign economy was never a
of nationalism. When Golwalkar defined the nation, he talked about
land, race, religion, culture and language but never about the economy.
In this concept of the nation, economic freedom from foreign capital
was a non-issue.
After independence, the key challenge for India was to develop
its scientific and technological capabilities. It built the Central Scientific
and Industrial Research laboratories, the five Indian Institute of
Technologies (IIT's), the Indian Statistical Institute (ISI) and a host of
scientific institutions. It did not just build the public sector, but invested
in people. When Damodar Valley Corporation was created, more than
50 engineers were sent to Tennessee Valley Authority. They were the ones who formed the core of the Indian power sector. In steel, again
a core set of people were sent to US Steel to learn about the steel
industry, who later on went on to lead the Steel Authority of India
The Information Technology (IT) sector is viewed as an example
of the success of economic liberalisation. What is forgotten is the role
played by public sector bodies in its explosive growth. The key figures
in the IT sector – Naryana Murthy, Nandan Nilekani, Sam Pitroda
(who built C-DOT), and a host of others came out of IIT's or similar
premiere institutions. Without the experience of building indigenous
computers, Indian software skills would never have been built. This,
coupled with the Indian skills developed in the public education system,
has provided the human power for the development of the IT sector
After independence there was an agreement that development
needed infrastructure and only the Indian state has the capacity to
develop infrastructure at a scale that India required for rapid
development. This is what was embodied in its successive Five-Year
plans. At the time of independence, apart from railways, India had
very little infrastructure. The entire installed capacity of electricity
generation was less than 1,500 MW and restricted to only metro cities
and a few towns. Similarly, the telephone system. There were only a
few heavy industrial plants in the country. After independence, India's
industrialisation – from oil exploration, refineries, steel plants, power
plant equipment, machine tools, heavy engineering – was powered by
the public sector.
The proponents of nationalism based on race and religion -- the
RSS and its political front, the Jan Sangh -- were completely against this
path. They wanted India to be completely left to the mercy of market
forces and wanted free entry of global capital.
Progressive dilution of the national movement's vision
of self reliance
The vision of self reliance in the post-independence period was
conceived within a capitalist path of development. Even in the initial
years we sometimes erred by resorting to imports, resulting in
technological dependence in many areas. By not developing a strong
research base that would allow us to develop indigenous technologies,
India started lagging behind in areas that were seeing rapid technologica changes, particularly in electronics. It must be noted that the current
abandonment of economic sovereignty has its roots in problems related
to the way self reliance started becoming, progressively, an empty
slogan. By the 1980s, as we discuss earlier, global economic pressures
were already pushing the country into the trap of a globalisation.
Successive governments did not actively resist the entrapment of India
into a global economic market that was governed by rich countries,
large corporations and capitalist banks. Later our governments became
collaborators in the process and are today willing partners of global
capital, ready to hand over the levers of our economy to foreign forces.
Here lies the contrast with China. China instead, protected its
huge internal market and forced foreign capital to fully transfer
technology to Chinese public sector firms. The electricity and telecom
sectors are examples, where India had a lead over China and yet it is
China that has become the home of power plant equipment and telecom
equipment today. Bharat Heavy Electrical Ltd. (BHEL) was founded
well before China invested in power plant equipment manufacturing.
BHEL was capable of producing equipment for installing 4,000 -5,000
MW capacity per year for the power sector of quality comparable to
any in the world. At that time, Chinese companies were well behind.
Today, there are at least four Chinese companies that have capacity to
produce equipment many times more than BHEL and these companies
have overtaken all the global firms, who used to lead this field earlier,
such as Siemens, General Electric, ABB, etc.
Similar is the case in the telecommunications sector. C-DOT
exchanges were entirely indigenously developed, and were
technologically on par with what was being produced elsewhere. Instead
of using our own technological capabilities, India opened its market to
foreign equipment, essentially reducing ITT and C-DOT to minor
players. China instead, used its internal market to force major telecom
equipment manufacturers to transfer technology, the same way it had
done with the power sector. Today, Huawei is one of the global leaders
in telecom equipment and is ahead of most global players. In electronics
including mobile phone handsets, China is again the manufacturing hub
of the world. China is not just copying others, it is becoming a global
leader in hardware and software innovation.
In the same period that China developed its technological
capability, India opened its market to global capital. It invited foreign
capital to not only bring in technology, but also to develop its
infrastructure. This dependant economic path led to significant industrial
stagnation in manufacturing, with economic growth primarily coming
from the service sector. Thus, for example, in spite of the huge local
market in telecom, spurred on by the cell phone 'revolution', equipment
manufacturing declined. The bulk of the handsets are imported, with
only some Indian manufacturers joining the fray. Even here, the major
part of the manufacturing is done in China. Even in pharmaceuticals,
where Indian generics have created a significant global presence, the
bulk of the active therapeutic ingredient are imported from China,
with Indian companies doing the formulation and packaging.
China is not only continuing with its Five-Year plans, but also
with medium and long term plans, spanning decades. It is planning its
infrastructure, its cities, education, science and technology development
plan and even a plan for developing innovation. Interestingly, it has
recently launched a Made in China 2025 plan. Contrast this with what
the current government is doing -- it has dispensed with the Planning
Commission, abandoned all planning and we are left with a toothless
Niti Ayog. The rejection of planning for our economy goes hand in
hand with handing over the economy to market forces that are governed
by foreign rather than national interests. We ask the question again, is
this not anti-nationalism at a grand scale?
What the current government does not recognise is that
knowledge is key in technology today. Take Apple Inc., which is the
biggest company in the world (in terms of market capitalisation) -- its
economic might is bigger than all but 19. Yet, it does not own a single
factory. It “produces” I-phones and Mac computers. How does it do
this? It owns the designs, the software and brand of Apple. With this,
it can force a Foxconn in China to manufacture Apple branded
products, such as I-phones, and pay them a pittance. A calculation
shows that Apple gets about $300 for each I-phone it sells, while
Foxconn gets only about $7. This is the nature of the knowledge
economy.
This focus on inviting foreign capital without building peoples
capabilities is certainly not a 'nationalist' move. Not surprisingly, in spite
of the publicity on 'Make in India', industrial sector growth continues
to shrink. While 12 million people enter the job market every year, only
7% find jobs in the organised sector. The rest are unemployed, or find
only casual employment, living a precarious existence.
Who is a Nationalist?
Our discussions raise a fundamental question. Who is a nationalist
today? Those who hold dear the values and dreams of the freedom
movement? Those who want to see a India that is strong, that is united,
that sees unity in diversity? Or those who weaken India by insisting that
only a certain kind of culture, only certain kinds of traditions, will be
respected in India? Can a person, or persons, or a government claim to
be nationalist while at the same time allowing our people's lives to be
endangered by handing over control of our national economy to foreign
forces? This is the real debate between nationalism and ant-nationalism
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