Make a break, Mr Modi; the time has come to reverse the Avadi resolution

Avadi resolution made the state the leading player in economic activity. Mr Modi's riposte has to be in the opposite direction; it must say the state will step aside as it can no longer deliver

For the past few years, many people, mostly of the soft left-liberal persuasion, have been lamenting the emergence of political ‘strongmen’. Vladimir Putin, Xi Jingping, Shinzo Abe, Recep Erdogan, Rodrigo Duterte, even our own Narendra Modi, are held up as examples.
 
The liberals — almost by definition — prefer weak heads of government who reflect their political preferences. They are very distressed at the increase in the number of ‘strongmen’ who don’t care a hoot for these views.
 
But there is another way of looking at it: political ‘strongmen’ are a necessary — but not sufficient — condition for gaining economic muscle in a short period of time, say 30-35 years. It’s no coincidence that throughout the history of different countries, whenever there has been a rapid increase in their output, there has almost always been a strong ruler.

 

If you don’t believe me, look up the works of economists like Simon Kuznets and Angus Deaton who provide all the historical economic data you are likely to need. Periods of sustained economic growth have been supervised by strongmen or women.
 
There are two types of strongmen or women: the ones who strengthen the markets or the ones who abridge civil liberties. (Dr Manmohan Singh was the exception, who, even though he was a very weak leader, strengthened the markets without abridging civil liberties).
 
The left-liberals focus almost exclusively on the civil liberties part. The right-liberals focus almost exclusively on the markets. But are these two mutually exclusive? This is the question that India needs to grapple with because the two Modi governments since 2014 have consistently fallen between these two stools.

 
Modi’s mistake
 
On balance, however, our strong ruler of the past six years has abridged civil liberties more than he has strengthened markets. His economic record has been disappointing as a result.
 
He needs to reverse this imbalance because while strong markets lead to growth, abridged civil liberties don’t. They only get you a bad name.
 
To be fair, though, Mr Modi is not the only one to have made this mistake. Although people have now forgotten just how very strong a ruler Jawharlal Nehru was — the first and fourth amendments to the Constitution are proof — he was the first to make this mistake. He thereby also set the pattern.

 
Indira Gandhi and Rajiv Gandhi, both of whom had the parliamentary majorities to be described as strong, also followed the Nehru model. Rajiv, like Modi, made some half-baked attempts to liberalise the economy.
 
What’s very surprising is that Mr Modi, in spite of his party’s persistent criticism of Nehru, has basically followed this model. But now the time has come for him to finally discard Nehru. He needs to be the last Nehruvian.
 
I had written last August that Mr Modi needs the equivalent of the Avadi resolution of 1956, which made the state the leading player in economic activity. Mr Modi’s riposte has to have the same force but in the opposite direction. It must say that the state will step aside because it can no longer deliver.

 
Nehru had said that the state would step in because only it could deliver. And just as Nehru made the state the leading force, Mr Modi must make the private sector the leading agency for growth. He should do this from the ramparts of the Red Fort on August 15. Such opportunities don’t come twice.