Echoes of a Generation

The burial of Socialism in India

The other day when I was at the Chemist, a retired Air India employee came in with a prescription from the airline dispensary. He looked morose. News had come in during the day that the company was finally being handed over to the Tatas to run by the government. The chronically loss-making company is something that the government has been wanting to shed for many years. The retired employee was concerned about whether the post-retirement welfare benefits that he was receiving would continue under a new owner. Although Air India was founded in 1932 by JRD Tata, it was nationalised in 1951 and all employees living today would have only seen life as a State-owned entity.

Air India’s nationalisation in 1953 and privatisation in 2021 is the journey of many people of my generation. Air India’s future will of course continue to be uncertain in the foreseeable future, but the Tatas are understandably jubilant. Although what they had created and invested in, they had to buy back at a huge cost, as benchmarks go, this is the end of the socialist era in India which Nehru ushered in.

That era, I remember my school days. We lived in a government-built and maintained quarters. First thing in the morning, I switched on the light and the room lit up with an HMT bulb. We had breakfast with milk supplied by the Delhi Milk Scheme (which is still around) and Modern Bread (then government-owned), wore school a uniform made of fabric manufactured by the state-owned National Textile Corporation, rode a Delhi Transport Corporation bus, and studied from the government-produced NCERT textbooks. Meanwhile, my father would strap on his HMT watch, ride his bicycle manufactured by the Cycle Corporation of India and go off to work in his government office.

When sick, we would be looked after at the dispensaries of the Central Government Health Scheme and, if necessary, he would be referred to the local government hospital. Medicines were manufactured by Indian Drugs and Pharmaceuticals Limited, or by Hindustan Antibiotics Limited. Every summer, we would take the train to our Kolkata home to meet relatives. There was a telephone there, manufactured by Indian Telephone Industries there and the services were provided by the Department of Telecommunications. Memories would be captured on Indu Film manufactured by the Hindustan Photo Films Limited. Family groceries would come from the government-run Super Bazar, the only supermarket in town. And yes, some of the items like cooking oil and soaps were also made in government-owned factories.

I could give many such examples but these demonstrate how extensive government involvement was in every aspect of life. From bulbs to bread, and from watches and tractors to medicines and fertilisers. But that was the world then. It is not that the government intentionally started making bread or soap. But the mantra of the time was no enterprise should be shut down and jobs lost. And so, whether a company was making shoes or railway wagons, whenever a company became financially unviable, there was only one solution: the Government would nationalise the company and take over responsibility for the employees. What happened in other socialist economies happened here too. With guaranteed tenure and pensions and sops afterward, efficiency further slumped, contributing to shortages in an already heavily controlled economy.

Shortages were endemic in that era known in popular parlance as the “license permit raj”. From the Avadi session of the Congress in 1955, the term “mixed economy” entered the political lexicon. The private sector was permitted to exist but under a tight leash. The Congress declared the socialist pattern of society to be its goal. The party resolution also stated that planning must take place with a view towards the establishment of such a society and the public sector was tasked to be the “commanding heights” of the economy. The unease that excessive production would lead to the private sector making more profits than the government was comfortable with, made them issue quotas regarding how many cars or scooters a company could make, or how much fabric a cotton mill could spin.

So obviously people then were not living in some socialist utopia. The stringent curbs on manufacturing meant that everything was in short supply. Those who aspired to buy a car could expect to wait for a decade. There were only 3 car manufacturers, with the Ambassador being the most ubiquitous one. My father could only afford a scooter – and, for that, he waited seven years. There were only three scooter manufacturers. Landline telephone connections required waiting for years, and then what one got was an ugly black instrument manufactured by the Indian Telephone Industries – though you could jump the queue if you were a member of the Parliament or of a State Assembly, or belonged to a profession like medicine, journalism which were considered important enough to require a phone to conduct their duties. I remember my mother telling me in 1984 shortly after I entered the work force to book a gas cylinder connection which at that point could take over a decade for an allotment.

Then, in 1991, India went almost bankrupt. This was not long after the Soviet Union, India’s principal funder and backer, itself collapsed after a coup in August of the same year. That was also the year when Rajiv Gandhi, the contender for the Prime Minister’s post if the Congress won, was assassinated. In the ensuing dust and chaos, the semi-retired P V Narasimha Rao emerged as the Prime Minister. Once in power, he proved astute enough to outmanoeuvre other rivals, and he eventually appointed, as his Finance Minister, Dr. Man Mohan Singh, a technocrat who had debuted in politics just the same year. How Dr. Singh and his able lieutenant, Montek Singh Ahluwalia, dismantled almost everything that was a government monopoly (whether it was broadcasting or telecommunications, or banking) is now well documented. However, that momentum slowed down even during Narasimha Rao’s time at the helm, as he had to prepare for elections – and could not be seen to be such an unabashed supporter of capitalism. As it happened, Narasimha Rao lost the elections and slipped back into oblivion, but the winds of change that he unleashed did not go away.

Has the Neoliberal economy, that was put in place in 1991 and continued by all subsequent governments, been a success or a disaster? The jury is still out. The liberalisation of 1991 had been necessitated by the economic compulsions of the time and there has never been much debate about the fact that some changes were inevitable, but the pace of the changes unleashed has often made people breathless. Definitely, the opening up of the economy has made a lot of products hitherto inaccessible to those who can afford them. Looking at the number of malls not just in Delhi where I live but even in the smaller towns and the range, I am amazed to remember being overwhelmed at the first mall I saw in the early 90s in the Philippines, as none existed in India at the time. Now, not just offline malls, but behemoths like Amazon, have made life different. But of course primarily for the middle class and the rich. The poor have not only continued to struggle, but their struggle has also only got worse and will continue to get even worse in the sort of economy we have put in place since 1991.

As the world gets more and more technology-driven, people with access to the most up-to-date skills and devices will get more and more ahead of the others who will get pushed back further. The digital divide became stark during the lockdown when schools closed, and classes moved online. People with internet connections and smartphones or tablets could attend classes, others could only watch themselves sink in the quicksand. The effects of that divide will become evident in time, as school exam results are affected. In turn, that will cascade into limited prospects for higher education or skill development, eventually affecting employability.

The discussion will no doubt continue, as to whether the old socialist system, though imperfect, was better – or whether capitalism is better (because what we experience of that is also imperfect, being largely crony capitalism at the top end, and all kinds of service-related frustrations for the average Indian).

Having lived through both “socialism” and “capitalism”, my experience can be summed up in the saying: “the more things change, the more they stay the same”.

Originally published by Pippa Rann Books and Media on October 15th, 2021