Business Today

Budget 2019: The Saffron Hand

Despite a historic mandate, the Modi government will find it difficult to ignore the wish list of RSS affiliates
twitter-logo Anilesh S Mahajan   New Delhi     Print Edition: July 14, 2019
Budget 2019: The Saffron Hand
Illustration by Ajay Thakuri

As the new Modi government gets down to the job of presenting its first full Union Budget, all eyes are on 'Dharmakshetra', a building in New Delhi's government residential colony of RK Puram that serves as the headquarters of the Swadeshi Jagran Manch (SJM). The complex has been built on a road named after Babu Genu, a pre-Independence star of the Swadeshi movement. An economic think-tank of the Rashtriya Swayamsevak Sangh (RSS) - the ideological parent of the ruling Bharatiya Janata Party (BJP) - the SJM had guided the first Modi government's stand on all important economic matters and tried to steer it towards what was loosely termed as swadeshi economics, though the government, despite their opposition, did open up several sectors to foreign direct investment (FDI), including insurance.

Today, as the government starts its new term and gets ready to present its vision for the next five years in the coming Union Budget, people who matter - from top CEOs to bureaucrats and academicians to economists - are reaching out to the SJM to understand its thinking on the direction the country's economy should take for the next five years. The impression they have got after meeting both government officials and SJM office-bearers is that while the former might want to free up markets further and attract foreign capital to fuel job creation and economic growth, the Sangh affiliate is in no mood to relent. They continue to insist that the government should continue to focus on entrepreneurship rather than importing foreign capital to achieve these goals. Protectionism, it seems, will remain the order of the day, especially as the world, too, seems to be moving in that direction. A few days ago, India announced an increase in Customs duties on 28 US products, including almonds, pulses and walnuts, in response to higher tariffs imposed by the US on Indian products such as steel and aluminium.

Considering the hold that the RSS and its affiliates have on the Modi government, the next five years will see India move between the Swadeshi agenda peddled by the Sangh outfits and meeting the needs of the sectors that depend on imports.

The Wall

"We heard words like 'big ticket reforms, 'ease of doing business' but these efforts should be made to make life easy for small and medium entrepreneurs, not merely to attract foreign capital," says SJM National Co-convener Ashwani Mahajan. The Sangh affiliates are in no mood to relent this time too. The tiff started even before the votes had been counted. The SJM targeted Shiromani Akali Dal MP from Bathinda and Union Minister for Food Processing Harsimrat Kaur Badal over a congratulatory tweet from a top executive of multinational giant Walmart. The SJM believes the previous government had helped the multinational by pitching for FDI in the food processing sector. The minister rejects these claims.

Ashwani Mahajan, National Co-convener, Swadeshi Jagran Manch

Another RSS-affiliate, labour union Bharatiya Mazdoor Sangh (BMS), is cut up with the NITI Aayog decision to list 92 PSUs for disinvestment. It, along with the SJM, believes that the PSUs must be revived and then listed on stock markets and not sold to corporate houses. "A larger debate at the national level is required on disinvestment in the public sector. Even if the government wants to go ahead with its plans, it must not only speak to the unions but also protect their rights," says BMS chief Saji Narayanan C.K. The government, though, seems to be on track to sell these PSUs despite the opposition. Its plans to sell Air India is also on in spite of opposition from the Sangh affiliates to outright sale of the company to other private sector players. The BMS is also upset with the labour ministry for pushing for amalgamation of 44 labour laws into four labour codes; it is particularly upset over drafts of three out of the four codes (industrial relations, social security and safety).

These skirmishes are already setting the tone for Modi 2.0. On June 12, Labour Minister, Santosh Gangwar - who was in Geneva for the International Labour Organization's 108th convention - called up BMS chief Saji Narayanan and said the ministry will redraft the labour codes in consultation with the unions. The BMS is going ahead with its plan for nationwide protests.

In retail, too, the pressure has been unrelenting. On June 17, Commerce Minister Piyush Goyal told a delegation of US companies, including Amazon and Walmart, that the government is in no mood to give further concessions to multi-brand retailing by foreign (including e-commerce) companies. The SJM has been staunchly opposing FDI in multibrand retail, saying it will put lakhs of small traders and kirana store owners out of business. The SJM also got a policy clarification that the deadline of February 1, 2019, for e-commerce majors to comply with the new FDI norms will stay. The rules bar e-commerce sites from "exercising ownership or control over inventory" of sellers and prohibit vendors in which e-commerce firms have a stake from selling on their online marketplaces.

Sunil Ambekar, National Organising Secretary, ABVP

Along with these two organisations, farmers' outfit Bharatiya Kisan Sangh (BKS), students' body Akhil Bharatiya Vidyarthi Parishad (ABVP), MSME group Laghu Udyog Bharti (LUB), and school education wing Shiksha Sanskriti Uthan Nyas see the resounding mandate for the BJP as a victory for the Sangh's agenda which they say is pro-people. "Sometimes, we felt bureaucrats dont take us seriously, but return of the Modi government with thumping numbers will change their mindset. We are here to stay," says a Sangh office-bearer. The RSS affiliates are ready with their wish lists. The ABVP wants structural reforms in UGC, AICTE, Right to Education Act. "Education should be not only meaningful but also create more space for vernacular languages," says Sunil Ambekar, the National Organising Secretary of the ABVP. The SJM wants implementation of a strategic plan to reduce the trade gap with China and curtail the influence of the US. The LUB is pushing for making things easy for MSMEs while the BKS is batting for more investments in storage and blocking of GM crops. The list goes on.

Love Lost?

Is the prime minister required to follow the RSS and its affiliates in his second term? The answer comes from one of his cabinet colleagues, who is clear that the Sangh's philosophy influences government policy making. "There is fundamentally no confrontation," he says. Secondly, if the BJP has expanded in the last five years, so have the RSS and its affiliates. From running 45,000 shakhas in the beginning of May 2014, the RSS has now expanded to 65,000 shakhas. In the 2019 elections, the RSS cadre worked with BJP workers, and senior RSS pracharaks directly strategised and controlled day-to-day campaigns of BJP candidates.

There is no need to remind the prime minister about the Sangh's ideas, says a top RSS leader, who says many of the key policies of the previous government reflected Indic values aligned with RSS ideologue Deendayal Upadhyaya's 'Antyodaya' and 'Integral Humanism' concepts. These include access to energy to the poor, provision of affordable healthcare, education for all "and moving out of welfare to development mode."

In the previous government, the confrontations were never allowed to boil over despite the fact that the Sanghs outfits were seen stalling many of the NDA government's big-ticket reforms such as further opening up of FDI in some sectors and amendments in land acquisition and labour laws. They were also influencing trade policies, approach towards China, stand at the WTO, health sector initiatives, and monetary and fiscal policies.

In 2015, the prime minister hosted BMS chief Saji Narayanan for a cup of tea at his residence in view of the union's agitation on issues related to changes in labour rules and relaxation in labour laws in states like Rajasthan and Madhya Pradesh. To deal with the confrontations with the Sangh affiliates, with the intervention of three RSS heavyweights, Krishna Gopal, Dattatreya Hosabale and Suresh Soni, the government formed coordination committees under party chief Amit Shah. "We are expecting a similar coordination this time as well," says a senior Sangh leader.


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