Yogendra Yadav Articles
Shekhar Gupta ko gussa kyun aata hai? He is a victim of Communism and Cold War anxieties

Shekhar Gupta ko gussa kyun aata hai? He is a victim of Communism and Cold War anxieties

Bad ideas persist beyond their expiry date, Shekhar Gupta aptly reminds us in his recent Cut the Clutter episode. So do anxieties, especially of those who grew up amid the ideological debates of the Cold War days. This results in two sources of bad economic ideas in our public life. There are votaries of old, bad socialism: those who miss Stalin’s economic vision and want to recreate bureaucratic monstrosity that was the Union of Soviet Socialist Republics. And then there are votaries of even older and worse versions of capitalism: those who didn’t graduate beyond Ayn Rand and second-hand summaries of Milton Friedman, and wish to relive Margret Thatcher’s England.

Shekhar Gupta’s critique of the Seven-Point Action Plan proposed by many eminent economists, public intellectuals and some activists, like me, is a sad reminder of the residue of this disease. I pick Shekhar among many other critics, not just because he is one of the most influential and clear-headed spokespersons of that viewpoint who has cared to spell out his differences. I choose to argue with him because I draw upon his wisdom on a range of other issues (Pakistan, the northeast, armed forces and politics, to name a few), and because you can argue with him without the personal khundak (grudge) that informs much of our public arguments. I can say what I think of his ideas on economy and hope to continue to feature among ThePrint’s columnists.

Storm in a Twitter cup

Let me first recount the storm in a Twitter cup. Dissatisfied with the economic packages proposed by Finance Minister Nirmala Sitharaman, many of us felt that India needs an alternative action plan captured in simple bullet points. Our focus was on the first six points that needed urgent governmental intervention: transport for workers, medical care for Covid-19 patients and frontline workers, universal food support for some time, vast expansion of employment opportunities, income support for loss of livelihood and interest subvention during this crisis. Finally, instead of making detailed revenue augmenting proposals for these six plans, we limited ourselves to stating a principle so that the attention remained on the six substantive proposals and not on methods of revenue generation.

We were, of course, completely wrong. We wanted to say that no national resource can be spared at this hour of national crisis and none of these six programmes must be constrained for lack of resources. “Whatever it takes” to meet the crisis was our approach. (Since Shekhar smells Communism in this phrase let me recall that this phrase was used during this pandemic by Rishi Sunak, UK’s equivalent of a finance minister. Last heard, this Tory leader had not turned a Communist).

But our initial formulation (I take full responsibility for that) was most unhelpful. It said: “7.1 All the resources (cash, real estate, property, bonds, etc) with the citizens or within the nation must be treated as national resources available during this crisis.” Note that this is an assumption behind any special taxation or any non-voluntary revenue generation. Note that it spoke about these being “national resources” that are potentially “available”, not about expropriation or nationalisation of all of these. But we should have anticipated that in a country with a history of “nationalisation”, this is how it would be read.

That is exactly what happened. The entire proposal was reduced to point 7.1. The Right-wing had a field day on social media with their usual battery of misinformation, half-baked economics and character assassination. Shekhar Gupta led from the other flank seeking to defend private property from the ghosts of Communism. A minor misunderstanding was blown up into a conspiracy theory of backdoor amendments in the statement. (For the record: every signatory had the final version as it was published.)

Meanwhile, many well-meaning and otherwise balanced persons also warned us against how this wording might be read. So, as soon as we realised that the entire debate could be distracted, Professor Maitreesh Ghatak clarified what 7.1 meant, I concurred with him and started working on a rewording, much before Ramachandra Guha and Ashutosh Varshney articulated their unease. Within hours, the signatories agreed on a new formulation that restated the intent in more direct terms: “7.1. The government must explore emergency ways of raising resources going beyond the usual set of taxes and levies to cope with the problem of funding large relief packages.” Within 24 hours of the original statement, everyone, including Ram Guha and Ashutosh Varshney, fully endorsed the new formulation in the hope that the focus will now be on the substantive issues.

Ideological debates

Yet, Shekhar Gupta expends a lot of his energy on the ‘bad idea’ of the non-existent 7.1. Does he think, like many Right-wingers did, that the original formulation displayed the real, hidden intention of these crypto-Communists? I hope not. Besides Guha and Varshney, thinking of Rajmohan Gandhi, G.N. Devy, Harsh Mander, T.M. Krishna and yours truly as hidden Communists is about as accurate as calling Shekhar a Narendra Modi fan. It needed a bit of cutting the clutter, I thought.

Now, to his substantial, though briefly stated, objections. He thinks some of our proposals are fiscally impossible. His example: if we give three months of interest waiver on first-time home loans, we could say “goodbye to our banking system”. On a back-of-the-envelop calculation (1.5 per cent of monthly interest for three months on at the most Rs 10 lakh crore of outstanding home loan in this category), this cannot possibly cost more than Rs 50,000 crores to the government. How is that a goodbye to banking? Sounds more like anxiety-stricken goodbye to common sense.

He finds our reference to “emergency measures” too authoritarian. Here again, I can see the painful memories the word ‘emergency’ can evoke. But unless we ban this word, except as proper noun to refer to 1975-77, what’s wrong with asking for emergency measures? Here is an economy predicted to shrink for the first time in four decades, with levels of unemployment never recorded before in economic history. What else, pray, is an economic emergency?

Shekhar’s real objection comes, sadly, almost in passing: why think of additional taxation? We already have very high taxes and days of high taxation led to higher poverty, poor revenue collection and loss of entrepreneurship. Now, in normal times I would have agreed with some of the propositions here. Increasing the rate of taxation needs to be balanced with falling rates of tax collection and the possibility of flight of capital. But to repeat this formula during a pandemic, when the whole world, including capitalist economies, are discussing higher taxes, including measures like wealth tax, displays an ideological mindset. Just as those who defend all kinds of public sector undertakings irrespective of their actual performance are Left fundamentalists. Similarly, those who repeat the mantra of growth, trickle-down and low taxation in the face of this kind of economic collapse are market fundamentalists. The formulaic debate between these camps is harmless, though tiresome, in normal times. Replaying this debate in the midst of this crisis is not funny.

The real question

How I would love Shekhar Gupta to take off his ideological glasses, cut the clutter, as he so ably does on so many issues, and focus on the heart of the matter: Do we or do we not need additional resources for a large economic stimulus and relief package? He could either say that we don’t need such a package beyond what the government has already announced. Or show that the government already has these additional resources. If not, there is no running away from the difficult question: where will this scale of additional revenue come from?

“A spectre is haunting Europe—the spectre of communism.” So began The Communist Manifesto in 1848. Communist regimes and their ideology are long dead, but the spectre continues to haunt many persons thousands of miles and 172 years away. Marx must be smiling in his grave.

Author: Yogendra Yadav

Published in : The Print

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