Why BJP opposes foreign investment in retail

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Amulya Ganguli | 16 Oct, 2012
As the traditional party of banias or traders, the BJP's opposition to FDI in retail is not surprising. There is also an element of cogency is this stance of both the Left and the BJP.

While the comrades are motivated by their ideological aversion to anything linked to America, the BJP is guided by considerations of safeguarding one of its major support bases - the lower middle class trading community of orthodox Hindus.

What is interesting, however, is the BJP's decision to firm up this strategy even though it is at odds with the growing consumerist culture, which is reflected in the burgeoning malls, multiplexes and Indian supermarkets. Its warning, therefore, to prospective foreign investors in retail that they will have to quit if the BJP comes to power can be interpreted as an effort to hold on to its only seemingly secure group of supporters even if it alienates other sections of the middle class. Arguably, it denotes a sense of desperation about the party's chances in 2014.

Apart from its present compulsions, what this stance indicates is how the Left and the Right are changing their positions in India. For a major part of India's post-independence history, the Jana Sangh, which was the BJP's earlier avatar, was known as a pro-business and pro-American right-wing party while the Congress was seen as left-of-centre and not particularly fond of the US.

If it is now the opposite, the reason is, first, the sense of pragmatism which has enabled the Congress to evolve while the BJP has remained static and even regressed. Secondly, behind the Congress's evolution is an appreciation of modern economic imperatives, which is absent in the BJP and some of the other parties either because of dogma or expediency or blindness to worldwide trends.

The BJP's shift can perhaps be explained by two factors. One is its greater proximity to power compared to the Jana Sangh period. The other is a deepening of its anti-minority outlook. It is not accidental that the appearance of militant organizations affiliated to the BJP like the Vishwa Hindu Parishad (VHP), the Bajrang Dal and the Swadeshi Jagran Manch (SJM) coincided with the BJP's political ascent. While the VHP and the Bajrang Dal targeted the minorities, the SJM focussed on an autarkic economy, where the banias and small businesses will face no challenge from the foreign capitalists. Narendra Modi's charge against Manmohan Singh that he runs a government of, by and for foreigners is based on this perception.

The shunning of foreigners - like the demonising of Muslims - is not related only to the idea of economic self-sufficiency. Like all fundamentalists, the saffron brotherhood sees the Western world as a source of intellectual contamination, of which cosmopolitanism presents the most potent threat to the Hindutva group's insularity. It is a straight line from the description during the Ramjanmabhoomi movement of the supposedly deracinated speakers of English as Macaulay's children to the present resistance to FDI. If the Left sees FDI as a conspiracy of international financial institutions to dominate the economy, the Right views it as a Western ploy to culturally enslave the country.

The BJP's campaign against foreign investment dates back to the period immediately after the Babri masjid demolition in 1992. The fiery rath yatri of that time, L.K. Advani, castigated American company Enron's entry into the power sector in 1993 as "loot through liberalization" and the Shiv Sena-BJP government in Maharashtra scrapped the company's project soon after coming to power in the state in 1995 - just as the BJP wants to do with FDI in retail.

What the BJP does not seem to realize is that it is swimming against what the communists will say, the tide of history. Because of its blind anti-Congressism, a certain recklessness has been influencing its behaviour, as the stalling of parliament, the recent hold-up of Rajdhani trains in Jharkhand and participation in a Bharat bandh in the Left's company showed. Having been sidelined by civil society activists for much of last year and reeling under the accusations of corruption against its former Karnataka and Uttarakhand chief ministers B.S. Yeddyurappa and Ramesh Pokhriyal Nishank, the BJP seized upon the coal scam to berate the Congress. But, worried that the latter's reforms pitch will rob it of its sole plank, the BJP has evidently decided to climb on to the anti-reforms bandwagon to whip up xenophobia.

But the party is probably making as big a mistake now as when it thought that the Ramjanmabhoomi agitation was the road to Hindu rashtra (nation). The party has already been cautioned about its folly by one of its former union ministers, Arun Shourie, and a former Uttarakhand chief minister, B.C. Khanduri. One of its allies, the Akali Dal, is also in two minds about FDI in retail.

But the BJP apparently believes that supporting the measure will boost the Congress, something which the party isn't broadminded enough to do although the government's move is likely to be of benefit to the economy.

* (Amulya Ganguli is a political analyst. He can be reached at amulyaganguli@gmail.com)
* The views expressed by the author in this article are his/ her own and do not necessarily reflect the views of SME Times.