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Socialism is in the DNA of big Indian politicians and possibly even India: Ruchir Sharma

People view of Modi’s performance is governed by the caste that they are from, says Sharma.

, ET Now|
Updated: Feb 23, 2019, 12.51 PM IST
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Any dramatic reform will only take place when we have our back to the wall as 1991 and even late 2013 showed , Ruchir Sharma, author, Democracy On The Road, said in an interview with ET Now.

Edited excerpts:

If there was one person who could have written a political travelogue of India, it should have been you. I do not think too many people know that this journey is for elections -- whether it is state assembly or general elections -- throughout India. You want to talk a little bit about that before we move forward on why Democracy On The Road and why a 25-year journey.

It is great that you are asking me because it was in February of 1998 that I put this entire concept together or at least it started to evolve then. Who knew then that we would do 27 trips after that? But to understand the context of this is very important. In 1996, Narasimha Rao was standing for re-election as the prime minister. Most foreign investors then really were rooting for Narasimha Rao to be re-elected and they almost believed that he will be re-elected. I had just started my professional career as an investor back then. I was watching this from the sidelines. Back then, I was in early 20s, watching these very senior investors going around convinced that Narasimha Rao was going to get re-elected because that is what they really wanted. And they were totally shocked when the results came after that and what followed.

So when the next general election came up in February of 1998, I said if you really want to understand what is happening in India, you need to be on the road. I formed a group of five people including Swaminathan Anklesaria Aiyar, Ajay Kumar, veterans of the Times Group. These are the people that I had known because I used to write for The Economic Times those days. So, we put this very short trip together where we said okay let us go out and see what is happening on the campaign trail.

I still remember the date, it was Valentine’s Day of 1998 that we landed up in Muzaffarnagar because Sonia Gandhi was making a maiden speech in Uttar Pradesh in Muzaffarnagar. That was the origin of this trip and there was so much excitement. It was a short trip. It was only a two-day affair. But in those two days we got to see so much about Indian politics because at the same rally ground in Muzaffarnagar the following day, Vajpayee came and also made a speech. And what happened in those 48 hours stayed with me for a long period of time. Look at a Sonia Gandhi rally. It was her maiden speech in UP so she came on stage.

And in some sense, those were defining moments for Indian politics. But not too many people know it is a much longer trip now. There are many more people who come on board. Now predictions are made with your trips in there. But I do want to ask you the one question because you say this is democracy on the road, in some sense you have been called Limousine liberals and all of that. So, you make this fascinating trip across the heartland. You go to the south. I am told this year you are going to the south. Has voter behaviour changed, expectations changed?


One of the favourite lines in my book which I sort of say in the closing chapter is that changes after changes, India remains the same in so many ways. That is what really captures it. Because what I find in most parts of India is that we still vote along caste lines, that has not changed in 20-25 years and the only way that will change is as India becomes more urbanised. That process is taking excruciatingly long to happen. But this is a reality I feel that many people in corporate board rooms or sitting in Delhi and Bombay almost want to deny or almost want to sort of have a setting look about it.

But this is the reality of India. This is a caste system that goes back 3,000 years or something like that. So yes, some of the raw discriminations that we would see, has sort of ebbed but the political bloodlines are very much formed along caste lines.

You started with 1998 and 1996. What really egged you on? It is a pattern that reformist prime ministers have never been re-elected -- whether it was Narasimha Rao or Mr Vajpayee. Six months back, many would have said it is Modi’s election to lose and now suddenly it seem there could be a surprise in a way we do not know yet. Is the economy a non-issue for elections?

Yes and that is a great point because what I say in the book is this that development is at best, one of the six factors that may matter for a candidate. I would not say that any reformist prime minister does not get re-elected. India’s electoral history, at least since it became a multi-party democracy, is that most prime ministers do not get re-elected.

So, just to say that reformist prime ministers do not get re-elected, is not right. But you need many other factors to come together. The classic case is Bihar. The one place where we have seen the most radical transformation in all the trips we have been so far, has been in Bihar. We have been to Bihar five times and look at the radical transformation that Bihar has seen over the time period and yet Nitish Kumar cannot win an election today in Bihar on his own because his caste Kurmi is accounts for only 3% to 4%. He has built a broader caste coalition which maxes out at 20%. In order to come to power, you need more than 30-40% of the vote. so he needs to be in a caste coalition. That is the reality of India. We are talking about six-seven factors which work and not just development. You cannot win an election in India based on development platform alone.

You mentioned that a Karnataka politician said that six tests that you need to pass for a win are – caste, religion, welfarism, money spent, corruption and development. Let us for a moment presume and let us tweak this a bit, let us for a moment presume you tick all the six boxes. Doe that ensure victory and which of these six factors has to be the most important?

As I said, caste for me is a necessary but not a sufficient condition to win. So by if you get that equation wrong…

And you mean caste not just in the Hindi heartland, but everywhere…

Everywhere. Apart from maybe some very cadre-based states like Tamil Nadu, Kerala, maybe West Bengal. In those states, you can argue that caste is not as important in politics as in other parts. But the caste and the caste discrimination which exists in places like Tamil Nadu and Kerala is very strong but the politics for some reason because of the cadres has sort of divorced itself from the other part. So, that for me is a very important factor. You get that wrong and it is a non-starter. But the other factors, you have to get a lot going for you. The default option in this country is anti-incumbency…

And in a multi-party democracy that is….

It does not take much. In a multi-party democracy, it just takes 2 or 3 percentage vote swings to dramatically change outcomes.

No you are right. In 2014, 282 was with the 31% vote share and there was a large 69% that was never really on board. But you speak about many factors. Is 2019 going to tick the biggest box on religion?

At this stage, caste still dominates and there is increased polarisation in this country. When I went back to Bijnor to write the closing chapter of my book, I found that some of the raw discrimination when it came to caste had eased somewhat but when it came to religion, it was as pronounced as ever, if not more, you can argue.

So yes it will play a role but within the 80% Hindu voters, trying to unite them under one umbrella is very difficult because you end up marked. One action for one constituency ends up causing a lot of heartburn in other constituencies. That is what India is really about and therefore nationalism in India has its limits. You can argue for the good or bad but nationalism in India has its limits.

It is not a pan-India phenomenon…

Yes because of the sub-national cultures which exists in India whether it is on caste or regional lines. So many people think of themselves first as a Gujrati, first as a Bengali, as a Marathi and then as an Indian. To try and put them all together is not possible. It is one of the things which I focus a lot in my book and something which in Delhi in particular, we tend to be very insensitive about is how much the south of India resents the Hindi imposed on them, north Indian values imposed over them and even their form of Hindutva in many ways, as I have argued in the book, is a bit of a softer sense of Hindutva than in north India.

It is very different from the north…

In the north, even though they are very religious, in Tamil Nadu, it is like as if you are on a temple tour all the time. But it is a very different strain of Hinduism compared to what we have in the north. We have to be very careful about that. I tell my foreign friends that only 40% of this country speaks Hindi.

You have said in your interviews and I think you make a mention of this in book that India is not one country, it is almost like a continent and it is very difficult to understand India if you are only going to focus on the Hindi heartland. But there is a lot of Hindi influence on policy making right now. Do you believe that could be a factor in the south?

You are hitting on a point which not many people tend to pick up is the resentment in the south against Hindi. I have this anecdote in the book where we went to Karnataka last year to watch the Karnataka election campaign and we were having dinner. It was hosted for us by Nandan Nilekani at his residence and he called a bunch of Bangalore intellectuals and other people to speak with us. I was surprised to see the amount of resentment they have for the north in general.

And this was an educated sort of an evolved community.

And this is Karnataka. In Tamil Nadu, it is a lot worse in terms of what is there. In Tamil Nadu also, when we went in 2016 trip, it was almost like Modi who, Rahul who? And we speak in Hindi almost as we are speaking to like a French person in English in the country side. That is very important. We went to this place called Tumkur, which is about a couple of hours north of Bangalore to see a rally of Modi. What happened was he got up on stage to speak and the first few lines he tried to speak in Kannada. He connected. You can make out the crowd was very enthusiastic. But obviously he could not take it much further. Then he moved to Hindi with a Kannada translator and the crowd enthusiasm completely collapsed compared to what it was before. He just did not have that much of an impact and you could see the difference between his impact in Uttar Pradesh and in south Indian campaign. This is one of those real mistakes we have been making by not covering the south enough in this election.

Mr Modi was riding a wave of hope in 2014. He was everything that hope stood for, whether it was development, whether it was changing the face of India, whether it was the institutions and all of that. Many will say perhaps hopes were running too high and they were bound to crash. As we step into 2019, where are those things? Do you believe how many jobs have been created, what is the rural stress like these will be issues?

If you objectively look at it, a lot of those hopes and expectations in 2014 have not been met and that was natural because the expectations were unreal. In 2014, when we were travelling in Uttar Pradesh such were the expectations out of Modi which we could sense that every time we hit a bump on the road, the joke in the car will be Modi will fix it because you just thought that everything Modi would fix. That was the kind of expectation. But what I find remarkable today is this is that a lot of the people are voting along caste lines and how they view Modi’s performance is completely governed by the caste that they are from.

You ask an upper caste person what they think of demonetisation, most upper caste people would tell you accha kiya (he did right). You speak to the Muslim and Dalit workers and they will tell you about how much their business has been hit. The carpet weavers in Mirzapur will tell you about how much their business has been hit, etc.

I find that this is very difficult to objectively analyse, but in terms of what performance has been, what is more important for me is to understand that when people ask what are the issues, I am saying that do issues really matter when peoples’ minds have been made up along caste lines? I am not even sure how much issues really matter? We want to still think almost in this western mindset that okay how is economic performance?

But that is a very alien mindset to Indian politics.

Like how will be the economic performance and how is the political outcome going to be is the pocket book theory of American politics. It just does not work in India. It is maybe one of the six factors that may be at play, but for us to keep having these debates about Modi’s performance in 2019, referendum, etc, when so much is happening along these caste lines makes no sense. Had there been a dramatic transformation in India, maybe it would have been different, maybe people would have suspended their caste lines and said okay because something really dramatic has happened here, let us try and focus on that.

Unfortunately in India, nothing dramatic ever happens. It is all incremental in nature and the interphase with bureaucrats is difficult for the people.

But the referendum can never really be on the prime minister or the people in power. How does the opposition stand vis-à-vis Mr Modi right now? Is the coming together of opposition parties really going to hold forth against the very well-oiled political machinery of Bharatiya Janata Party?

The heterogeneity of India is such that it is very difficult for one party to completely dominate and therefore the narrative has changed. In 2018, the entire discourse was about how we are about to head towards BJP hegemony that 2024 may be the next chance?

Till six months back…

Yes exactly. But today what has really happened is that it has become a very competitive race. It is an open election. It is 50-50. I first said that it is a 50-50 election nearly a year ago, I got so much push back and blow back. Today when I say that, it appears as if I am uttering conventional wisdom. Tell us something new. Have you moved the needle on this? Now, I do not have to move the needle, but I am going to figure it out.

I feel that if there is anything the Modi government could have done differently even from a political standpoint, is possibly to have taken a few more people together because even though he is still in the pole position and the strongest player, the fact that so many people have got antagonised in the opposition and therefore have made it a mission to stop him is not something which is advisable in this country, given the fact that all of these people have a pretty set vote base. So, to dismiss that and think that everyone is going to revolve around one person is very difficult. He just made the challenge much harder for him.

Many will say it is not just antagonising members of the opposition but also some within his own federation and his own politics as well. In 2014, at 282, he had a magical number. This was the first full majority government in economically liberalised India and the expectations were high. Do you believe the government did justice to its political capital?

When are we going to give up this notion that a strong majority government is really usher in economic reforms in this country? There is no history of that in this country. Rajiv Gandhi came in with a majority where he could have changed the constitution and yet we know what happened in the following years. The first couple of years maybe some economic reforms happened and after that it was back to populism. He went to the polls in 1989 and we had the crisis in 1990-1991.

I used to be in a very naive way in my first interactions even in the late 90s and early 2000s with leaders where I would see so much hope in Chandrababu Naidu, where I would try and go meet Sonia Gandhi telling her about the benefits of free market reform.

So the notion that in this country a strong stable government would be able to usher in free market reforms, does not hold. I have learnt it very early that the fundamental nature of the big politicians in India is socialist that is really in the DNA. It is statist.

Do you believe that is in the DNA of the country as well?

Possibly, in terms of the fact but there is no constituency in this country for the kind of free market reform or even the kind of reform that took place in China. We have this notion out here that China got these great reforms because the government was good. The main reason China did so well for 30-40 years was that government kept getting out of the way.

The government’s share in the economy when China began its entire reform process in the late 1970s was more than 90%. By the time the reform momentum really came to an end by the end of last decade, that share had dropped to just about 30%. So the government kept getting out of the way in a very sensible way and kept spending more and more on infrastructure.

Here we are spending more and more on welfarism. The money which is left to spend on infrastructure is obviously squeezed out from somewhere and therefore this notion that we are going to get strong government and therefore good economic reforms is something which is just a myth.

But is it time that we make a peace with the fact that we will perhaps not see the free market reforms that you and I would wish for.

Absolutely. I think especially at a national level. At a national level. if there is a risk of anything, it is that competitive populism is increasing. Just look at the way the narrative has shifted in the last few months. Even Mr Modi when he first came to power …

He spoke about the bitter pill…

Yes, in terms of the bitter pill and it is an insult to give people these dole-outs/ The Congress was so heavily criticised. I remember covering the Rajasthan campaign in late 2013 when we went there and Ashok Gehlot basically giving a handout for everybody. BJP just took him on in terms of how can you be doing this? This is an insult to the people and stuff like that. Modi’s campaign in 2014 was almost as if he was the new Ronald Reagan of India in terms of the minimum government maximum governance kind of stuff! It is just not the way, but I think, in the end, the reality is very different but the only positive news in this context here is that some of the state chief ministers, who are closer to the ground, they have become much more development focussed than what they possibly used to be.

That is possibly because they are able to get more done directly on the ground. But at the national level, to expect any government to come into free market reform in this country is something which I cannot see happening and the only time it has ever happened in India like 1991 is when you are facing an economic crisis.

Is it because today capitalism is stigmatised? It is a taboo to be in business and it is a taboo to be a successful businessman and a lot of our narrative is being built around that because India has a socialist mentality if not a mindset. Will we have reforms only when we have our backs against the wall?

Any dramatic reform will only take place when we have our back to the wall as 1991 showed. Even in late 2013, whatever Chidambaram started to do as corrective measures came only after runaway populism was leading to a lot of fiscal excesses and other problems in this country like when the rupee went into a tailspin.

But the important point I am going to make here is this that attitude in the country is one of live and let be. So, in this country it is very difficult to bring about disruptive change and as we speak about capitalism being stigmatised, one of the most fascinating observations as I tried to summarise the last chapter was the fact that we have travelled a distance now which is literally like a lap around the earth. I mean 27 trips multiplied by a 100 to 1500 kilometres per trip, that is how much you come to and what I find really remarkable is the fact that we never felt unsafe and that for me is such a telling statement about this country.

In any part of India.

Yes I mean there was some pockets like we went to Lalgarh which is a Naxal infested place. You feel unsafe a bit there for a while, maybe in Bettiah in the dark days of Bihar. Maybe some pockets, but generally in India, remember that some of the people travelling in our group look pretty well heeled. So, it is quite surprising that we never felt unsafe. I cannot say this about South Africa, Brazil, other developing countries I go to.

In those countries, I would be very careful about stepping outside my hotel and the class warfare is such that even the rich people do not like to travel in very fancy vehicles because they fear what could happen in terms of class repercussions. In this country, it seems there is a real acceptance of this at some level that we can all travel and you still come back home safe in general.
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