India After Independence: 1947-2000 (56 page)

However, despite its many negative repercussions, Operation Blue Star had certain positive features. It established that the Indian state was strong enough to deal with secession and terrorism; it put an end to the charismatic Bhindranwale and his gang; and it created that minimum of law and order which enabled the secular parties such as the Congress, CPI and CPM to move among the angry people and counter communal politics by explaining to them that the real responsibility for the Punjab situation lay with Bhindranwale, the terrorists, and the Akali communalists.

Following Operation Blue Star, the terrorists vowed vengeance against Indira Gandhi and her family for having desecrated the Golden Temple. On the morning of 31 October 1984, Indira Gandhi was assassinated by two Sikh members of her security guard. Earlier she had rejected her security chief’s suggestion that all Sikhs be removed from her security staff with the comment: ‘Aren’t we all secular.’

The assassination of the popular prime minister, in an atmosphere of heightened communalization of North India during 1981-1984, led to a wave of horror, fear, anger and communal outrage among the people all over the country, especially among the poor. This anger took an ugly and communal form in Delhi and some other parts of North India, where anti-Sikh riots broke out as soon as the news of the assassination was announced and the highly exaggerated rumour spread that many Sikhs were celebrating the event. In particular, for three days from the evening of 31 October itself mobs took over the streets of Delhi and made Sikhs targets of their loot and violence. There was complete failure of the law and order machinery in giving protection to Sikhs and their property. The three-day violence in Delhi resulted in the death of over 2,500 people, mostly Sikhs, with the slums and re-settlement colonies of Delhi being the main scenes of carnage. The November riots further alienated a large number of Sikhs from the government.

Rajiv Gandhi succeeded Indira Gandhi as prime minister on 1 November 1984. He moved quickly after the general elections in December 1984 to tackle the Punjab problem. In January 1985, the major jailed leaders, including the Akali Dal President, H.S. Longowal, were released. A month later Rajiv Gandhi ordered an independent judicial enquiry into the
November riots. The political tide in Punjab was also turning in a positive direction despite Operation Blue Star and the November riots. The terrorists were down and out and the Akalis had lost a great deal of their credibility. Moreover, though the Akalis were not willing to fight the terrorists, they were no longer helping them.

Rajiv Gandhi soon initiated negotiations with the Akali leaders in the belief that a settlement with them would provide a lasting solution to the Punjab problem. The result of this policy, however, was that the advantage accruing from Operation Blue Star was lost, the fight against terrorism and communalism virtually abandoned, and the latter given a new lease of life.

After their release the Akali leaders were divided, confused and disoriented. On the one hand, many of them, including Longowal, tried to consolidate their position
vis-à-vis
the terrorists by taking recourse to militant rhetoric. On the other hand, it was clear to most Akali leaders that mass agitation could no longer be revived nor could militant politics be carried on. Longowal, therefore, even while talking tough, entered into secret negotiations with the government.

Finally, in August 1985, Rajiv Gandhi and Longowal signed the Punjab Accord. The government conceded the major Akali demands and promised to have others reviewed. In particular, it was agreed that Chandigarh would be transferred to Punjab, a commission would determine what Hindi-speaking territories would be transferred from Punjab to Haryana, and the river water dispute would be adjudicated by an independent tribunal. Elections for the state assembly and the national parliament were to be held in September 1985.

On 20 August, the day Longowal announced that the Akalis would participate in the elections, he was assassinated by the terrorists. The elections were, however, held on time. Over 66 per cent of the electorate voted as compared with 64 per cent in 1977 and 1984. The Akalis secured an absolute majority in the state assembly for the first time in their history.

The Akali government, headed by Surjit Singh Barnala, was however from the beginning riven with factionalism and, consequently, immobilized. Its most important administrative step was the release of a large number of persons accused of terrorist crimes, most of whom rejoined the terrorist ranks, giving terrorism a major fillip.

The Akali government found that it could not agree to the transfer of any of Punjab’s territories to Haryana as compensation for the loss of Chandigarh; the Haryana government, however, would not agree to the latter without the former. The Akali leadership also went back in regard to the judicial adjudication of the river water dispute. The major terms of the Accord were thus once more under dispute. The fact is that the Accord had been, as was the case with the Operation Blue Star, prepared in haste without considering its feasibility.

The militant groups soon regrouped taking advantage of the soft policies of the Barnala government. There was, over time, a resurgence
in terrorist activities, and the state government, riven with factionalism, was unable to contain them. Consequently, the central government dismissed the Barnala ministry and imposed President’s Rule over Punjab in May 1987.

The fact is that the Akali Dal and an Akali government, sharing the ideological wavelength of the extremists and the terrorists, were incapable of confronting or fighting communalism and separatism. It was, therefore, a strategic error on the part of the Rajiv Gandhi government to stake all on Barnala and his supporters and see them as the frontrunners in the campaign to decommunalize Punjab, separate religion from politics and fight commmunal terrorism.

Also, Rajiv Gandhi regarded the Punjab Accord as the solution of the terrorist problem rather than as the opening gambit in, or the gaining of an opportunity for implementing, a long-term strategy of which political-ideological struggle against communalism would form a basic part. Simultaneously, there had to be the realization that separatism, terrorism and violence had to be firmly dealt with. Besides, even the moderate communalists had to be first rescued and protected from the terrorists before they could function politically in their own communal mode. It is quite significant in this respect that Longowal spoke openly against terrorism and then signed the Accord with Rajiv Gandhi only after Operation Blue Star had eliminated Bhindranwale, destroyed the myth of the invincibility of the terrorists and checked terrorism to a large extent. Likewise, the Akalis boycotted the elections in 1992 when terrorism was still ravaging Punjab, but agreed to participate in them in 1997 when it had been brought to a virtual end.

Despite President’s Rule, terrorism in Punjab went on growing, going through phases of waning and resurgence, especially as after 1985 it had begun to be openly funded, supported and even directed by Pakistan.

We need not discuss at length the growth of terrorism and despoliations after 1985 since they have been dealt with at length by K.P.S. Gill in his
Punjab—the Knights of Falsehood.
Increasingly, most of the terrorist gangs took to extortion, robbery, smuggling, drugs, abduction and rape, land grabbing, murder of innocents, and a lavish lifestyle. From 1987, they also began a systematic campaign to acquire political and ideological hegemony over the people. Their ban on meat, liquor, tobacco, and the use of sarees by women, their effort to determine the dress of school children, their restrictions on marriage rites and practices, their hoisting of Khalistani flags on public buildings, their collection of parallel taxes, were all designed to convince the people that they were the rulers of tomorrow. Periodic statements by well-meaning persons, sometimes repeated by the prime minister himself, advocating negotiations, conditional or unconditional, between the central government and various groups of the terrorists tended to have the same impact.

Imposition of President’s Rule in Punjab in 1987 was a short-term measure to salvage a rapidly deteriorating situation. It should have been seen as a tactical part of a long-term strategy which had to be based on the understanding (i) that no soft options were available in Punjab since 1982 when communalism entered a stage when it had either to be conceded or defeated, (ii) that moderate communalists could not be depended upon to fight extreme communalism or terrorism, and (iii) that a policy of firmness combined with political ideological struggle would yield results only if it were followed for a sufficient length of time and were not interrupted by efforts to appease the terrorists and the communalists. The perspective had to be of years and not months. After 1986, the Rajiv Gandhi government several times came near getting an upper hand over the terrorists, but it lacked the determination to run the full course; and, misguided by weak-kneed advisers, it talked of and even initiated negotiations with one or the other secessionist groups. It, thus, lost the advantage gained by strong state action, and inevitably led to higher levels of state violence against terrorism every time.

The policy of ‘solving’ the Punjab problem through negotiations with and appeasement of the terrorists and extreme communalists was followed even more vigorously by the governments of V. P. Singh and Chandra Shekhar during 1990 and 1991. In the meanwhile the number of the victims of terrorism went on increasing.

The state did finally take strong action. A preview of such action was the Operation Black Thunder, undertaken by the Punjab police and para-military forces in May 1988, which succeeded in flushing out the terrorists from the Golden Temple.

A hard policy toward terrorism was followed from mid-1991 onwards by the Narasimha Rao government at the Centre and after the February 1992 elections by the Congress government led by Beant Singh in Punjab. The police, often aided by the rural people, became increasingly effective though a large number of policemen—over 1550 from 1988 to 1992 alone—lost their lives in its operations. Also, the leaders and cadres of the two Communist parties, the CPI and CPM, and a large number of Congressmen played an active and courageous role in fighting terrorism, often paying a heavy price in term of life and property. By 1993, Punjab had been virtually freed of terrorism.

Despite the depradations of the terrorists for over ten years, there were several redeeming features in the situation. Though there was some degree of a psychological divide between Hindus and Sikhs, especially in the urban areas, and a few incidents of Hindu-Sikh clashes, there was not even one major communal riot in Punjab throughout the years of the terrorist sway; on the whole the people of Punjab remained secular. The
mass of Hindus did not support the efforts of the Shiv Sena and other Hindu communal organizations to create a volunteer corps of Hindus alone to fight terrorism. Similarly, the majority of Sikhs offered strong resistance to the terrorists in many areas.

The refusal of the people of Punjab to imbibe the values and ideology of the terrorists and the extreme communalists was mainly because the secular tradition was quite strong in Punjab, thanks to the work and influence of the Ghadr Party and the Ghadri Babas Bhagat Singh and his comrades, Kirti Kisan groups, the Communists and the Socialists, the militant peasant movement and the Congress and the national movement.

The mass of Sikhs refused to accept that the separatists and the terrorists were fighting in defence of Sikh religion and Sikh interests. To most Sikhs it became gradually clear that the terrorists were abusing and betraying their religion, debasing Sikh institutions and the teachings of the Sikh gurus and defiling the gurudwaras. Of the 11,700 killed by the terrorists in Punjab during 1981-1993, more than 61 per cent were Sikhs.

The Punjab experience is quite relevant to the country as a whole as it could face similar problems in the future in other parts of it. There are important lessons to be learnt. First, communalism has to be confronted both politically and ideologically; separation of religion from politics has necessarily to be enforced. In particular, the Punjab experience emphasises the centrality of the struggle against communal ideology. The major weakness of the struggle against terrorism was the failure to grasp that the real and the long-term problem in Punjab was not terrorism but communalism. The roots of the former lay in the latter. Extremism and terrorism were directly linked to the Akali communal ideology and the blatant use of religion by the Akalis for political ends. As already indicated, communalism cannot be appeased, placated or assuaged—it has to be opposed and defeated. Appeasement of communal forces can at the most provide a temporary respite. The time thus gained has to be used to counter communalism among the people; otherwise communalism gets strengthened and pushed towards extremism.

Second, communal violence in all its forms, including as terrorism, has to be handled firmly and decisively and suppressed as quickly as possible through the full and timely use of the law and order machinery of the state. No amount of popular will and opposition can defeat violence and terrorism on its own; it can play an important role only in support of and as supplement to the measures of the state and its security forces.

Third, communalists, however moderate, cannot be expected to or depended upon to fight extreme communalism or communal terrorism despite real political differences between the two because the two share a common communal ideology.

A meaningful appraisal of India’s development experience after independence would have to place it both in a historical and comparative context. The level and stage from which the beginning was made, and the uniqueness of the effort to undertake an industrial transformation within a democratic framework need to be taken into account; the achievements should be measured with other countries at a comparable stage of development.

We have seen in chapter 2, the pitiful condition of the India that we inherited at independence after colonialism ravaged the economy and society for nearly two hundred years and deprived it of the opportunity of participating in the process of modern industrial transformation occurring in other parts of the world. Apart from extreme poverty, illiteracy, a ruined agriculture and industry, the structural distortions created by colonialism in the Indian economy and society (such as the rupture of the link between various sectors of the Indian economy and their getting articulated with the metropolitan economy in a dependent manner) made the future transition to self-sustained growth much more difficult.

It is this legacy of colonial structuring which independent India had to undo so that conditions could be created for rapid industrial development. The task of attempting a modern industrial transformation, two hundred years after the first industrial revolution and nearly a hundred years after several other countries had industrialized, was a stupendous one. Besides this handicap created by colonialism and the several built-in disadvantages faced by the late comer, India had to confront political and economic conditions which had changed radically. New and innovative strategies were called for if success was to be achieved.

While undertaking this difficult and complex task, India, unlike many other post-colonial societies, had certain advantages. First, a small but independent (Indian-owned-and-controlled) industrial base had emerged in India between 1914 and 1947. This was achieved, amongst other things, by the Indian capitalist class seizing the opportunities created during this period by the weakening of the imperialist stranglehold during the two
world wars and the Great Depression of the thirties. By the time India gained political independence in 1947 Indian entrepreneurs had successfully competed with European enterprise in India and with foreign imports, in the process capturing about 75 per cent of the market for industrial produce in India. Indian capitalists had also acquired dominance over the financial sphere, i.e., banking, life insurance, etc.
¹

By independence, therefore, India had, ‘in spite of and in opposition to colonialism,’ developed an
independent
economic base from which to attempt a take-off into rapid independent industrialisation.
²
She did not, like many other post-colonial countries, get pushed into a neo-colonial situation where, while formal political independence was achieved, the erstwhile colony’s economy continued to be essentially dominated by metropolitan interests.

A mature indigenous entrepreneurial class, which could serve as the
agency
for carrying out a substantial part of the post-independence planned development was an asset to India. Further, a high degree of concentration and consolidation had led, during the colonial period itself, to the emergence of large business conglomerates like the Birlas, Tatas, Singhanias, Dalmia-Jains, etc., with interests in different areas like trade, banking, transport, industry and so on. Such conglomerates, like the
zaibatsu
in Japan or the
chaebol
in South Korea, were extremely important in enabling the late entrants to world capitalism to successfully compete with the already established foreign capital and especially the multinational corporations. The absence of the
agency
of a mature, indigenous entrepreneurial class was sorely felt in many of the post-colonial African states and can be seen as a critical drawback even today, for example, in most parts of the former Soviet Union.

Second, India was fortunate to have a broad societal consensus on the nature and path of development to be followed after independence. For example, the Gandhians, the Socialists, the capitalists as well as the Communists (barring brief sectarian phases), were all more or less agreed on the following agenda: a multi-pronged strategy of economic development based on self-reliance; rapid industrialisation based on import-substitution including of capital goods industries; prevention of imperialist or foreign capital domination; land reforms involving abolition of zamindari, tenancy reforms, introduction of cooperatives, especially service cooperatives, for marketing, credit, etc; growth to be attempted along with equity, i.e., the growth model was to be reformist with a welfare, pro-poor orientation; positive discrimination or reservation, for a period, in favour of the most oppressed in Indian society, the Scheduled Castes and Tribes; the state to play a central role in promoting economic development, including through direct state participation in the production process, i.e., through the public sector, and so on.

Most important, there was agreement that India was to make this unique attempt at planned rapid industrialization within a democratic and civil libertarian framework. All the industrialized countries of the world did not have democracy and civil liberties during the initial period of their transition to industrialism or period of ‘primitive accumulation’. Nehru
and others including the capitalists were acutely aware that they had chosen an uncharted path. Yet, they were committed to it. Nobody in India ever argued for a variant of the model followed in parts of Latin America, East Asia, etc., where an authoritarian government in partnership with the capitalists would push through a process of rapid development in a hot-house fashion. It is this consensus, a product of the nature of the national movement in India, which enabled India, virtually alone among the post-colonial developing nations, to build, retain and nurture a functioning democracy.

As early as the late nineteenth century, in the economic thinking of the early nationalists such as M.G. Ranade and Dadabhai Naoroji, the state was assigned a critical role in economic development of India. This trend of seeking state intervention and not leaving economic forces entirely to the market got further crystallized and acquired widespread acceptance in the inter-war period, partly due to the influence of Keynesian economic ideas, the experience of the New Deal in the US and the Soviet experiment. In 1934, N.R. Sarkar, the President of the Federation of Indian Chambers of Commerce and Industry (FICCI), the leading organization of Indian capitalists, proclaimed: ‘The days of undiluted laissez-faire are gone for ever.’ Voicing the views of the leadership of the capitalist class, he added that, for a backward country like India, a comprehensive plan of economic development covering all aspects of the economy, agriculture, industry, power, banking, finance, and so on, chalked out and coordinated by a high powered ‘National Planning Commission’, was essential for her to make a structural break with the past and achieve her full growth potential.’ In 1938, under the leadership of Jawaharlal Nehru, the greatest champion of planned economic development for India, the National Planning Committee (NPC) was set up, which through its deliberations over the next decade, drew up a comprehensive plan of development, its various sub-committees producing twenty-nine volumes of recommendations.

Apart from the general recognition of the need for state planning, there was a wide consensus emerging around the notion that the role of the state would not only involve the proper use of fiscal, monetary and other instruments of economic policy and state control and supervision over the growth process, but would also have to include a certain amount of direct participation in the production process through the public sector. The famous Karachi Resolution of Congress in 1931 (as amended by the AICC) envisaged that ‘the State shall own or control key industries and services, mineral resources, railways, waterways, shipping and other means of public transport.’
⁴
Indian business leaders were also, along with Nehru and the NPC, among the early proponents of the public sector and partial nationalization. The critical reason for business support to the
public sector was elaborated in the
Plan of Economic Development for India
, popularly called the Bombay Plan, authored by business leaders in 1945. The Bombay Plan saw the key cause of India’s dependence on the advanced countries to be the absence of an indigenous capital goods industry. Anticipating a basic element of the Second Plan strategy, the Bombay Plan declared, ‘We consider it essential that this lack (of capital goods industries) should be remedied in as short time as possible. Apart from its importance as a means of quickening the pace of industrial development in India, it would have the effect of ultimately reducing our dependence on foreign countries for the plant and machinery required by us and, consequently, of reducing our requirement of external finance.’
⁵
It was felt that in the development of capital goods industries and other basic and heavy industries, which required huge finances and had a long time-lag for returns, the public sector would have to play a critical role. While Nehru and the left nationalists on the one hand and the capitalists, on the other, were agreed on this issue of the need for the public sector to reduce external dependence, they differed on its scope and extent. The former saw planning and the public sector as a step in the socialist direction, whereas the latter saw it as an instrument of promoting independent capitalism and of pre-empting socialism by helping combine equity with growth. This tension between the two approaches was to persist for some time, particularly in the early years.

In 1947, for example, when the Economic Programme Committee appointed by the AICC and headed by Jawaharial Nehru not only laid down the areas, such as defence, key industries and public utilities which were to be started under the public sector but also added that ‘in respect of existing undertakings the process of
transfer from private to public ownership should commence after a period of five years
,’
⁶
the capitalists were alarmed and howls of protest ensued. Signs of accommodation were seen in the 1948 Industrial Policy Resolution (IPR) which, while delineating specific areas for the public and the private sector, added that the question of nationalizing any existing industry would be reviewed after ten years and dealt with on the basis of circumstances prevailing at that time. Even after the Indian parliament in December 1954 accepted ‘the socialist pattern of society as the objective of social and economic policy’
⁷
and Congress in its Avadi session (1955) elaborated the sharp leftward swing on these lines, the 1956 IPR and the Second Plan, while considerably expanding the scope of the public sector, made no mention of nationalizing existing industries. In fact, the model projected was of a ‘mixed economy’ where the public and the private sectors were not only to co-exist but were to be complementary to each other and the private sector was to be encouraged to grow with as much freedom as possible within the broad objectives of the national plan. It is another matter that the great emphasis on heavy and capital goods industries in the Second Plan, by itself led to a major shift towards the public sector as these were areas which, it was commonly agreed, could be basically developed by this sector.

It may be noted that Nehru refused to push his own ideological positions beyond a point, much to the disappointment of sections of the
left, still under the influence of a Stalinist type of orthodox Marxism or, ‘Stalin-Marxism’. In the evolution of Nehru’s thought, from as early as the late thirties, socialism had become inseparable from democracy. Therefore, any step in that direction, such as planning and the public sector, had to be introduced in a democratic manner, capable of carrying society along in the effort. Planning for Nehru had to be
consensual
, and not a
command
performance, even if it meant toning down many of his objectives.

This was the perspective with which the Planning Commission (established on 15 March 1950) functioned, despite the enormous
de facto
power it exercised with Nehru himself as its chairperson. The First Plan (1951-56) essentially tried to complete projects at hand and to meet the immediate crisis situation following the end of the War. Independence had come along with the dislocation caused by the Partition, including the massive problem of refugees resulting from the largest mass migration in history in the space of a few years. It is with the Second Plan (1956-61) that the celebrated Nehru-Mahalanobis (Prof. P.C. Mahalanobis played a leading role in drafting the Second Plan) strategy of development was put into practice and it was continued in the Third Plan (1961-66). A basic element of this strategy was the rapid development of heavy and capital goods industries in India, mainly in the public sector. (Three steel plants were set up in the public sector within the Second Plan period.) Import substitution in this area was seen as an imperative not only because it was seen as critical for self-reliance and reduction of external dependence but also because it was assumed that Indian exports could not grow fast enough to enable the import of the necessary capital goods and machinery—an export pessimism which has been criticized in later years, though it was quite commonly accepted at that time. The model also saw some foreign aid and investment as essential in the initial phase to finance the massive step-up in investment though the objective was to do away with this need as soon as possible by rapidly increasing domestic savings. (In fact, in the initial years after independence, Nehru had tried to woo foreign investments into India, much to the chagrin of, as yet not too confident, Indian capitalists.)

The shift in favour of heavy industry was to be combined with promoting labour-intensive small and cottage industries for the production of consumer goods. This, as well as labour-absorbing and capital-creating community projects in agriculture, promoted by community development programmes and agricultural cooperatives were seen (too optimistically, as later events showed) as the immediate solutions to the escalating problem of unemployment, without the state having to make large investments in these areas. (See
chapter 30
).