Dr Swamy leaves nobody in doubt that the Indian economy today is in a state of crisis, though “it does not necessarily mean an imminent collapse.”

Chennai: “Oh! You guys don't take me seriously as an Economist,” fumed the irrepressible then Janata Party president Dr Subramanian Swamy, the Harvard economist-turned-politician in the run-up to the 1998 Lok Sabha polls, when I was seeking an interview, covering his campaign in Madurai, from where he won comfortably with the Jayalalithaa-led AIADMK's support.

I was then working for an economic daily, could place his angst and was content with a few quotes while covering his election campaign. But the suddenness of that memory popping up nearly 21 years later after reading, Dr Subramanian Swamy's remarkably lucid latest work, “Reset - Regaining India's Economic Legacy”, is that it shows how his economic philosophy has come a full circle, over a long journey from a scholar-teacher in Harvard to a politician in New Delhi.

Methodological issues, ideological differences, his disdain for the Soviet Union-inspired socialist model apart, which gained pace under leadership of India’s first Prime Minister Jawaharlal Nehru and the famous statistician Dr P. C. Mahalanobis, Dr Swamy's book is an important contribution in today’s political milieu.

What is particularly striking is that this is the first major critique from within the ruling establishment in New Delhi in the form of a cohesive text, since the BJP got a majority of its own in the Lok Sabha in the 2014 Lok Sabha polls, followed by an even better showing in 2019. As the author himself says, economic performance was hardly an issue with Narendra Modi making national security the key issue.

Dr Swamy leaves nobody in doubt that the Indian economy today is in a state of crisis, though “it does not necessarily mean an imminent collapse.” The author makes plain that while Dr Manmohan Singh was an “accomplished economist, remained a marginal figure”, Mr. Modi is “honest in money matters” and a “domineering figure who brooks no political competition”. But on complex issues concerning the macro-economy, its dynamics being very different from micro issues, Modi has to rely on political advisors and colleagues who know very little about the subject, he says.

Dr Swamy asserts that the “folly of demonetization and the inanity of the Goods and Services Tax (GST),” have accelerated the tailspin of the economy,” partly to what may be called lack of intellectual sophistication and no familiarity with mathematical economics in the present dispensation.

Besides turning around the economy, he argues for an ‘alternative ideological thrust’ to India’s economic policy. “Now is the time for a structural overhaul to purge the remnants of the command economy, and usher in an incentive-driven, innovation-structured and market-determined competitive economy.” India’s future rapid growth model needs to dovetail “our ancient values and heritage; thus, today’s India is an ancient nation in search of a renaissance.”

The basis of this work, as the author says, is a monograph titled ‘Swadeshi Plan’, which Dr Swamy had presented at the Patna session of the Jana Sangh in 1970. The text that he has developed now not only gives a historic, synoptic overview of what led to the country’s present economic ills and his solutions for

it, but has an interesting Appendix, underpinning a rapid, sustainable ten per cent GDP growth rate model, with a theoretical framework based on the philosophy of ‘Integral Humanism’, as propounded by the RSS ideologue late Deendhayal Upadhyaya.

Dr Swamy recalls shortly after his return to India in 1969, after having spent seven years in the US - two of those years working for a PhD from Harvard University and another five years teaching there - he began to question the socialist model of planning that got him into trouble with then Prime Minister Indira Gandhi, who in her reply to the Lok Sabha, “denounced” his ‘Swadeshi Plan’ as dangerous.

“Dr Swamy’s “instant hit” monograph was at the prodding of a few Jana Sangh leaders then, like Nanaji Deshmukh and Jagannatharao Joshi, and he wanted to show that “material economic growth had to be harmonized with spiritual advancement, in other words, stand-alone materialistic progress, as in the West, was unsuitable for India.”

Two chapters in this book that dwell on the highly unjust, killer land revenue collection system under the erstwhile British Raj that crippled agriculture and Indian handicrafts, besides the comparative perspective on the Indian and Chinese economies up to 1952 (roughly coinciding with our first Five Year Plan beginning), are an analytical delight. While China was better positioned in 1952 to embark on industrialisation than India as the latter’s ‘agriculture’ was in “shambles in 1947”, India’s relatively better infrastructure in terms of railway network and so on did not make much difference, says Swamy.

In fact, Dr Swamy’s analysis is quite similar to what traditional Marxist economic historians have been saying about the back-breaking nature of colonial exploitation, appropriation of surpluses from agriculture in India and elsewhere, with whom he ideologically disagrees. Even while hitting out at John Stuart Mill’s utilitarian view on ‘governing’ the natives, underscoring the key markers that distinguished the elite in India and China even under foreign rule, drawing attention to how Indian princely states’ performance in agriculture was as good if not better than British-ruled India that drew upon benefit of irrigation systems, his comparison of the fallouts of famines in India and China are instructive.

“The lower per-famine death toll in India (in contrast to China) was in large measure due to the existence of the relatively larger railway network and of course the free press,” writes Dr Swamy. This is similar to his bête noire Prof Amartya Sen’s views that the press as an ‘early warning system’ and ‘traditional entitlement mechanisms’ are the best social insurance against starvation deaths, that famines are not so much due to lack of food, but due to lack of access to food. Yet, Dr Swamy faults the Plan years and Soviet-style socialism (1950-91) as ‘monumental’ loss of economic opportunity for India, the ‘Green Revolution’ notwithstanding.

The author has also disclosed how the economic reforms of the early 1990s’, under late Prime Minister PV Narashimha Rao’s tenure, were based on the

‘blueprint’ he as Commerce, Law and Justice minister in the Chandra Sekhar Cabinet had drawn, with help of experts, to unshackle the maze of regulations,

controls that bred corruption, and place greater emphasis on export-orientation. But thanks to Nehru-Gandhi policies of nationalization including major banks and insurance companies and the Plan Years, which Dr Swamy is so critical about, a new big Indian middle class has emerged, who are now BJP’s biggest supporters.

Ironic as these historical trends are, Dr Swamy’s turnaround economic plan wants the government to focus on the twin engines of growth - consumption and investments. Both have slipped badly besides exports. Abolishing Income Tax is part of his reform. He is concerned at “deep demoralization” in the bureaucracy, particularly in the Finance Ministry, where a large number of serving offices were ‘compulsorily retired’ after Modi-2 government assumed office in 2019.

The peak of Dr Swamy’s economic philosophy emerges in his re-visiting the implications of the famous economist Kenneth Arrow’s ‘General Impossibility Theorem’- on ‘aggregating’ individual preference functions into a social preference ordering by satisfying certain conditions like majority-decision rule and which Prof Amartya Sen has described as having “deeply influenced modern welfare economics” (Sen’s ‘Choice, Welfare and Measurement’, OUP, 1983).

Without going into concerned economists’ technical details in his ‘Appendix’, Dr Swamy seeks to reconfigure Arrow’s relevance on the basis of the ‘Hindu Way of life’, as articulated by RSS leaders Golwalkar and Deendayal Upadhyaya.

Critiquing both capitalism and communism, Dr Swamy implies the Hindu theory of ‘Purusharthas’ as having already anticipated Kenneth Arrow! This philosophical debate will surely go on.