Need protection for small industries, not MNC-led monopoly: Ashwani Mahajan

Prime Minister Narendra Modi is known for his obstinacy. Many ministers and bureaucrats have often learnt this the hard way and therefore, hold back from squarely criticising the prime minister's ideas. But then, the National Co-Convenor of Swadeshi Jagaran Manch (SJM), Ashwani Mahajan, is not just another such voice from the government.

Mahajan's office, in the serene environment of Shiv Shakti Mandir in the middle of R.K. Puram's peaceful neighbourhood of government residences, looks calm and quiet from the outside. However, inside the office, Mahajan, the RSS patriarch, who is also an economics professor and an alumnus of Delhi School of Economics, vociferously criticise Modi's economic policies.

The SJM has emerged as a major critic of Modi government's economic reforms, often the main force that compels changes or U-turns in the last five years. In an interview with THE WEEK, Mahajan shared his views on economic policies of Modi 2.0 government, voicing the swadeshi aspirations. Edited excerpts:

What are your impressions about Narendra Modi government's economic policies?

You see, earlier the talk was that this government was pro-FDI, pro-big business, pro-technology, an impression very similar to the previous Congress government. There were hints there would be corruption and MNC-control prevailing over the policies. That was the initial picture. From then, there has been a lot of change. Some of which you may have already seen.

Doubling of farmers' income is a major challenge for this government. But the SJM resists multinationals selling high-yield crop seeds. Is that productive?

This government, too, was pro-GM (genetically modified) crops, in the initial two to three years. But then, with time, there has been a lot of changes. GM was initially thought as a symbol of new agriculture technology. Then the government realised that it was monopolisation over one technology; that the benefits can be never reaped this way. The multinational's argument about higher yields and benefits have failed.

We held several interventions with the prime minister on this, from the Swadeshi Jagaran Manch. As a result, you would have noticed that the bio-technology regulator GEAC (Genetic Engineering Appraisal Committee) of the government that was thought to be toothless, as it did not meet (even) once in first three years of the previous government, suddenly met six times over the next two.

The SJM has often come out against MNCs, be it on FDI or price controls. What are your thoughts.

Earlier when there was no stand against MNCs, the government took a stand and imposed price control on seeds. In pharma, MNCs again had the monopoly. We intervened in this and we asked the government to impose price control on stents and recently on drugs. This is a clear departure from no action on earlier profiteering by MNCs. We are not against FDI. But every FDI is not good, like say, in e-commerce. We had to step up for protection of our small shopkeepers and domestic producers.

There was a huge pressure on the prime minister during his visits to the US for reversing price controls. But we took a stand and told him about it.

You have often voiced against foreign-based Indian economists on their views for land, labour or banking reforms of the Modi government. Why so?

Yes, we have. Arvind Panagariya was in favour of land and labour reforms in India, which is what most western multilateral organisations say. His was not much different. I found them to be a just narrative on the need for these reforms. The government initially agreed with these views. They, in fact, went ahead with these land and labour reforms. Ordinances were brought in, but then they were allowed to lapse. In our view, these are not reforms of the labour or land acquisition rules. These are aspects that would become detrimental for workers and farmers, so we resisted.

Labour reforms is not an issue in this country. There should be different labour rules for small sector and there we are in agreement with the Bharatiya Mazdoor Sangh (BMS). Rajan ordered to reduce government's stake in bank ownership. We were of the opinion that public sector banks should not be handed over by the government. We are happy that the government listened to these views and adopted them in its policies.

All these economists, their overall development philosophy is totally based on the GDP growth. That is the Jagdish Bhagwati and Panagariya model of trickle down effect. This was no different from what the Manmohan Singh government believed and this has failed time and again after 1991. Then there was the Amartya Sen model where employment, education, health and everything was getting guaranteed. We have seen that this also does not work.

In this environment of economic recession and trade wars, what economic model would you prescribe?

The Sangh has a definite economic philosophy based on thousands of years of this country's history. All this while, there were no instances of recession or depression. Our approach is swadeshi. The meaning of swadeshi keeps on changing, but we are for what Gandhiji said on swadeshi; what Deendayal Upadhyay said on swadeshi. Our view for long was that the WTO-led free trade narrative led to lower tariffs. Multilateral platform approach in trade is not beneficial for the economy. Sangh never supported free trade. Deendayalji said that when framing economic policies, we must think twice of the person standing last in the queue. Not Tata or Birla.

Some economists are of the view that a number of populist measures were adopted under the Modi government for votebank politics.

See, as the chief minister of Gujarat, Narendra Modi had opposed the Congress's Aadhaar bill. But after he became the prime minister, he realised the other advantages of JAM (Jan Dhan-Aadhaar-Mobile) trinity. Therefore, you will see that the Aadhaar 2015 Amendment Bill was much different from the 2010 bill. Policies like skills programmes, housing for poor, toilets in every house, Kisan Nidhi, Ujjwala, MSP hike... none of these were aimed at attaining votes. Same way, GST (implementation) and notebandi (demonetisation) were also not for votes. These were non-populist measures pushing a certain economic philosophy. We need our own development philosophy to drive policy-making. The subsidy model of the past has never been successful in giving us the desired development.

After the huge mandate in the recently concluded Lok Sabha elections, what should be the government's top economic priorities?

The government should prioritise more schemes like Mudra for the protection of the small-scale sector and minor traders. Employment data is not available and they should make efforts for better economic data dissemination. Extending the benefits of Make in India schemes to small-scale sector is important. A good domestic investment environment is what is needed. Small traders like chemists, e-commerce suppliers all have to be brought under this development umbrella. Some changes are needed in GST, too. What do you mean by equalising small and big? Can a small producer pay the same rate of tax as the big producer? There has to be more exceptions in GST system for the small trader. There is still a large inequality existing between rural and urban incomes. These will have to see some parity and only then good development would be achieved.