Policy influencers: How SJM, CAIT have impacted Modi's economic road map

In Modi 2.0, the Swadeshi Jagaran Manch (SJM) and the Confederation of All India Traders (CAIT) have managed to transcend their perceived roles as pressure groups and emerged as policy and decision influencers. In Narendra Modi’s first term as prime minister, doubtless, the SJM — the Rashtriya Swayamsevak Sangh’s (RSS’) economic wing with a pronounced anti-globalisation/anti-reformist outlook — and the CAIT, set up to gratify traders, the Bharatiya Janata Party (BJP)’s core constituency, were around.

When Modi 1.0 was coming to grips with the fundamentals of economic policies, the SJM and the CAIT limited their interventions to one-off matters. In his second tenure, the PM unmistakeably signalled his commitment to pursue the RSS’ ideology. The cue was picked up by the SJM and to a lesser degree, the CAIT. Between them, their agency impinged on a basket of issues, from calls to ban/discipline Chinese majors, such as Huawei and TikTok (owned by ByteDance), data localisation, and stricter regulation of the e-commerce sector, to no PSU disinvestment and merger of insurance firms, and scrapping sovereign borrowing in foreign exchange.
 

Their strike rate was impressive. “Our first big achievement was pressurising the government to pull out of the RCEP (Regional Comprehensive Economic Partnership),” said an SJM source. “When the pullout happened, we were trending on Twitter.”

The SJM lobbied vigorously against the RCEP that culminated in an 11-day national protest in October 2019. The RCEP,  essentially a free-trade agreement between the 10-member Asean and six of its biggest trading partners, was “unworkable” to the SJM because it believed the deal’s exclusive focus on tariff reduction would put an end to Indian manufacturing. Ashwani Mahajan, the SJM’s national convenor, explained: “We are for an economy based on small enterprises which is more equitable, employment-oriented and decentralised.” After intense discussions and negotiations, the government withdrew from the RCEP.

The SJM’s demand to end the sovereignty of data, data localisation, and “digital nationalism”— flagged in a resolution adopted at a national convention in December 2019 — propelled the Centre to introduce the Personal Data Protection Bill, 2019. The Bill delineated a framework for handling personal data, including data processing by public and private entities, through a Data Protection Authority. It was referred to a joint select committee of the Lok Sabha and the Rajya Sabha in the last Budget session.
 

The SJM asked the government to revisit the plan to raise money by selling foreign currency bonds. “Going overseas to borrow implied the rupee depreciates faster  and allows foreign governments to demand tariff reduction,” a source said. The Centre went halfway to oblige the swadeshi outfit by accounting for only rupee-denominated bonds for borrowings this fiscal year.

To the SJM and the CAIT, the biggest challenge was to thwart the participation of Huawei in the impending trails for the next generation of 5G networks. The Centre seemed undecided despite their pressure until the deadly clash between Chinese and Indian soldiers in the Galwan valley. “The martyrdom of our soldiers clinched the matter,” a CAIT source said.  Huawei’s prospects have declined substantially, with the government inclined to take a tough stand on security and strategy-related issues. But, it’s still not curtains down for Huawei. In June, the Centre referred the issue to a five-member group of ministers headed by Home Minister Amit Shah.
 

The interplay of economic pragmatism and “patriotic” sentiments resulted in minor wins or symbolic victories for the SJM-CAIT in the aftermath of the Galwan Valley conflict. They implored the Centre to ban Chinese companies from participating in officially floated tenders and urged celebrities not to plug Chinese products. When Vivo withdrew its title sponsorship for the Indian Premier League 2020, they were over the moon. “The BCCI (Board of Control for Cricket in India) should end its ties with all Chinese firms,” said Praveen Khandelwal, CAIT secretary-general.
 

Modi’s Atmanirbhar Bharat slogan to dispel a perception that India’s commercial “dependence” on China could hinder a muscular response was music to the SJM’s ears. “It’s the result of our 30-year campaign,” exulted Mahajan.

However, in a crucial area like PSU disinvestment, the Centre has, so far, held its own. It launched a major plan lining up the sale of five PSUs, including Bharat Petroleum, Container Corporation of India, and Air India. If the process was deferred — the deadline to bid for the national carrier was put off for a third time in June — blame the pandemic and the overall economic downturn rather than the SJM.
 

The next big thing on the CAIT’s platter is an ask for a probe into the alleged import of Chinese goods through hawala channels, “resulting in a huge revenue loss the exchequer”.
 

Where do the SJM and the CAIT leave the BJP’s economic cell that had worked as a major interest group in the Vajpayee regime? Gopal Krishna Agarwal, spokesperson (economic affairs), said: “We’ve constant outreach discussions with our stakeholders like the SJM and disseminate feedback to the government. But the process of liberalisation is on, there’s no question of reverting to the seventies.”