Modi’s India proves that liberal economics can happily coexist with political illiberalism

A profound contradiction lies at the heart of contemporary India’s political economy. On the one hand, it embraces economic liberalism. In September 2020, it legislated laws aimed at liberalising agriculture from state-guaranteed protections. The recent budget, passed in February, was high on promises of accelerating divestment of public sector undertakings. On the other hand, however, this enthusiasm for liberalism evaporates in the political domain.

On February 13, environmental activist Disha Ravi was arrested for sharing a document intended to help people interested in joining ongoing protests by India’s farmers against legislations passed in India’s parliament last September. Ravi’s arrest came in the wake of notable personalities such as Rihanna, Greta Thunberg and Mia Khalifa tweeting in favour of protesting farmers at the edge of the national capital last month. In response, India’s Ministry of External Affairs had tersely warned against “sensationalist social media hashtags and comments” and was compelled to introduce the hashtags #IndiaTogether and #IndiaAgainstPropaganda.

In a televised address to the Rajya Sabha Prime Minister Narendra Modi, decried what he called the “foreign destructive ideology” being imported into India. The divergence between the legislations deregulating agriculture and the state’s heavy-handed response to those protesting the legislations reflects a key feature of contemporary politics in India and beyond: the growing contradiction between liberal economics and liberal politics.

Economic liberalism

The three legislations at the heart of the farmers’ protests collectively aim at liberalising agriculture in India from state-guaranteed protections. The Farmers Produce Trade and Commerce (Promotion and Facilitation) Bill aims to dismantle the trade and distribution monopoly enjoyed by the state-run Food Corporation of India and the Agricultural Product Market Committees, thus allowing farmers to deal directly with the markets. The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill allows farmers to engage in contract farming and opens up agriculture to domestic and global corporates for investment. Finally, the amendment to the Essential Commodities Act of 1955 deregulates items such as cereals, pulses, oilseeds, edible oils, onions and potatoes from rules against hoarding.

Together, the legislations signal the Indian government’s long-standing attempt to liberalise agriculture, perhaps the most protectionist sector of the Indian economy, one that has been relatively untouched due to the exigencies of mass politics, as the political scientist Ashutosh Varshney noted almost two decades ago. The recent budget statement exemplifies the continued embrace of economic liberalism. It commits to privatisation, and sees a greater role than before for businesses as wealth-creators.

Political illiberalism

The Indian government’s attitude towards the protesting farmers, however, betrays its political illiberalism. Over 30 farmers unions mobilised their members to sit-in peacefully at protest sites on Delhi’s borders since the end of November. They were met with tear gas shells and water cannons. Although a 24-hour nationwide general strike, involving 250 million workers in support of the farmers passed without incidence, the government was obviously rattled.

Fearing a broader popular upsurge, it looked for ways to discredit the protestors, a large number of whom were of the Sikh community in Punjab. Pro-government websites started floating conspiracy theories linking the farmers’ protests with Pakistani machinations to support an independent Khalistan, invoking memories of the bitter Hindu-Sikh conflict that rent Punjab asunder during the 1980s. Tactless remarks by individual protestors, from which the unions quickly distanced themselves, were marshalled as supporting evidence.

Matters came to a head on Republic Day, when a small section of protestors clashed with the police and sought to occupy the iconic Red Fort in Delhi. Ignoring the largely peaceful protests, India’s pliant media lost no time in condemning the entire swathe of protestors, accusing them of conspiring to defame India and to damage the country’s reputation. TV anchors outdid one another to shame the farmers and their allies, urging the government to take strict action against all protestors. Middle class consumers of such news and views, who also tend to be pro-government, denounced the protests as damaging to law and order. Some actively encouraged police to beat and even shoot the protestors.

Even as the farmers pressed on with their peaceful protests, state repression continued. Internet connections were disrupted in the vicinity of Delhi, prompting pop artist Rihanna’s tweet, which was followed by a war of words between national and global celebrities. Ironically, only a handful of Indian celebrities tweeted in favour of the farmers, unlike the vast majority who parroted the government line calling on everyone to maintain unity and caution against anti-Indian propaganda. War-like fortifications were installed in the vicinity of Delhi. Journalists covering the protests face charges and arrests if they are known to be sympathetic to the farmers.

As the Modi government continues to criminalise dissent and condemns global solidarity with such neologisms as “foreign destructive ideology”, the divergence between its commitment to economic liberalism and dismissal of political liberalism cannot be starker.

The great decoupling

The Indian government’s attempts to retrench its regulatory role in agriculture sits well with the liberal orthodoxy that promotes “free” markets over “predatory” states. To be sure, the Indian state continues to permeate its market economy: relative to the US, western Europe and south-east Asia, it remains quite protectionist, a feature it shares with other emerging markets as China and Brazil. There is also the added complication that western economies are not as liberal as they claim. Subsidies by these countries to their farmers remains higher than subsidies by the Indian state to its farmers, a source of recurring dispute between Indian and the West at the World Trade Organisation. But the direction of travel as far as the Indian economy (including agriculture), is unmistakable: towards a more liberal economics.

The contrast with the direction of travel for Indian politics, like China’s, is also unmistakable. As in Brazil and Turkey, India’s democracy has steadily become less liberal. The repression farmers face is only the latest in a series of clampdowns by the Indian state. Much of the last year was spent by the Indian state muzzling dissent, first to defend the laws that introduced a religious filter to citizenship and then under the garb of containing COVID-19. In a spectacular fusion of religion and politics, Prime Minister Modi consecrated the much-anticipated temple dedicated to Lord Rama in Ayodhya.

The government’s knee-jerk reaction to international expressions of solidarity for the farmers, invoking national sovereignty over human rights, illustrates its dismissal of political liberalism. Even more worrying from the viewpoint of liberal politics is that a plethora of celebrities that included cricketer Sachin Tendulkar, singer Lata Mangeshkar and actor Kangana Ranaut among others – all influential people who might be expected to speak truth to power and defend human rights and civil liberties – leapt to the fray in the government’s defence, parroting the perspective that a few tweets in support of farmers compromised India’s national sovereignty.

What next?

The government is now willing to suspend the legislation for 18 months. The farmers demand that the legislations be repealed altogether and have vowed to continue their agitation till these goals are achieved. Against the government’s machinations of dividing them along confessional lines, village assemblies across north India have resolutely rooted for inter-faith harmony. A variety of myriad groups – ranging from relatively “traditional” clan associations to more “modern” women’s groups have lent support to the farmers in addition to large numbers of Leftist organisations. Dalit leaders, representing groups historically oppressed as untouchables, have promised assistance.

The emerging solidarities from rural and small-town India suggest that a liberal renewal of politics in India may yet be possible. This is indeed a supreme irony that strikes at the heart of modernisation theories which look to urban middle classes as sources of liberalism. The socially conservative rural farmers protesting the proposed liberalisation of agriculture in India may well be the saviours of liberal politics in the country.

The farmers’ protests teach us two global lessons. One, that liberal politics and liberal economics need not reinforce one another. Global integration and free trade does not guarantee universal human rights and democratic deepening. If anything, the two may be in tension. Two, that despite the profound crisis of liberal politics, there is yet hope. A renewal is possible. And it is full of surprises, often stemming from unlikely sources, as the farmers’ protests against authoritarian tendencies in India suggests.

Indrajit Roy is a Senior Lecturer at the University of York.