The far right BJP government campaigned on its record of privatisation, economic ‘liberalisation’ and Hindu chauvinism. It was soundly beaten by the Indian National Congress – which claimed to champion the poor who had been left out of the ‘economic miracle’.
As the election results were announced, the Indian stockmarket went into freefall. Brokers whose riches derived from the sale of state-owned companies calculated that the gravy train might come to an end. In the ensuing panic rumours circulated that as much as $20 billion in foreign investment might take flight. Step forward Manmohan Singh, who replaced Sonia Gandhi as Congress’s choice for India’s new prime minister.
Singh, acknowledged as the godfather of Indian ‘economic liberalisation’, has never won a popular election in his life. His appointment as prime minister will be a blow to those who had hoped for wealth distribution and land reform, although he was always destined to return to the finance ministry in a Congress-led government.
Upon hearing that Sonia Gandhi had given way to Singh, the stockmarkets rallied. Madhur Bajaj, vice-chairman of the giant Auto Bajaj, says, ‘Economic reform was the brainchild of Congress and we hope that the reform process will get a boost… Congress knows the rules of the game.’
Nevertheless, there are good reasons for the Indian ruling class to remain nervous. As the Times of India points out, ‘The inability of the markets to accept the altered political situation underlines their disconnection with the realities of this country, where the poor and the unemployed are no longer reconciled to being left out of the growth and development process. If [a left agenda] is dubbed market unfriendly, then the markets run the risk of being seen as people unfriendly.’
The election has also revealed disaffection with the main political parties. The BJP and Congress together polled less than 50 percent of the vote, while their regional allies grew in strength. The combined vote of the Communists and their allies – the biggest since 1952 – won 60 seats. The Communist Party of India (Marxist) emerges as India’s third biggest party, with a crucial role as a coalition partner to the Congress government. The CPM fought the election with demands for a bigger share of the nation’s wealth for workers and poor farmers, and an end to privatisation and anti-union laws and opposition to communalism. Despite intense pressure to take ministries in a coalition government, the CPM declined. In the left strongholds of Kerala, West Bengal and Tripura there is a reluctance to get too close to Congress, who are the main local opposition.
However, not all capitalists share a fear of the left. The experience of the Communists in state government in West Bengal has done little to frighten away investors – IBM, Mitsubishi and PepsiCo have all made significant outlays there. ‘We understand that high labour productivity and corporate profitability are an important goal of trade unionism,’ says Amiya Patra, a CPM election agent. In Britain, the Financial Times‘s editorial is headlined ‘Its political scene is lively but investors need not fear the left’.
Millions in India have grown angry about the miracle cures of economic growth, foreign investment and economic liberalisation. As Congress continues with these policies, the left will have to make a choice between their voters and the investors.
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