Just a little under a decade ago, I wrote a long essay in Fortune India trying to understand Rahul Gandhi’s economic mind. This was soon after he had extended support to the tribals of the Niyamgiri Hills in Odisha. On cue, the Congress environmental ministry blocked the Vedanta mining project in the area.
In that essay, I pointed out that Gandhi, as he stood in Odisha, seemed to be echoing his father Rajiv, who once told the Bhil tribe in Maharashtra, “The tribals have never damaged the forests. Sometimes outsiders have misguided the tribals for their own benefit and oppressed them. Our effort is to rectify these wrongs.”
His son told the people of Niyamgiri, “You have protected your hill. Some people said this is against development. This is not true. There is no development without the voice of the poor.”
Nearly a decade later, as Rahul Gandhi, now president of the Congress party, pushes to make the allegation of corruption in the Rafale fighter plane deal between France’s Dassault and Anil Ambani’s group company Reliance Defence stick on Prime Minister Narendra Modi, some of the themes have remained the same.
But it is still unclear – as it was in 2010 - what exactly are the economics of Rahul Gandhi.
One theme that seems to have continued is pitching himself and the Congress party as saviours of the poor. Gandhi’s most effective cut on Modi, after all, was an early taunt of “suit-boot-ki-sarkar” which effectively stalled the land reform agenda of the Modi government as its ministers started to realise that the tag might stick.
Since then, Gandhi has tried to carry the theme of being pro-poor on various platforms. He has spoken numerous times on issues of agrarian distress, even promising a major farm loan waiver in June 2018, if the Congress came to power. Of course, it was a Congress government which in 2008 waived off farm to the tune of around 1.8% of India’s more than $2 trillion GDP. Modi and chief ministers of states run by his Bharatiya Janata Party (BJP) has worked to waive off billions more since coming to power in 2014 and BoFA Merrill Lynch predicted last year that by the time national elections roll in in 2019, the incumbent government would have waived off around 2% of GDP or nearly $40 billion. Gandhi has suggested that if the Congress returns to power, there might be even greater sops especially since staunch support from angry farmers helped the Congress put up a strong show in the Gujarat state elections and give the BJP a scare. Gandhi now hopes that in the upcoming elections in Rajasthan, farmer support would topple a BJP government and return the Congress to power.
He also told the IISS foreign policy and economics think-tank in London in August 2018 that he thought India’s biggest forthcoming challenge was “where India positions itself” between China and America and Africa. He said that he believed India had its own way of doing things which “were different” and ideas “that were old and had been tested, ideas like non-violence, ideas like compassion, ideas like listening”. It was unclear how these attributes would help India compete and rise against two of the world’s most relentlessly growth and innovation pursuing countries, China and America.
In recent speeches, Gandhi has also pitched small business and entrepreneurship, memorably describing Coca Cola founder John Pemberton as a “shikanji” (local lemonade) seller and suggesting that McDonalds started as a “dhaba” (roadside eatery) company. He has attempted to corner the incumbent government for failing to create enough jobs but failed to explain what his own strategy to create jobs would be and why it would be different from anything else that had been tried. Even the shikanji and dhaba examples would sound stronger if his party had not laughed loudly at Modi for praising the entrepreneurial skills of pakoda-sellers.
In the meantime, both Amethi and Raebareli, pocket boroughs of the Gandhi family and from where Gandhi and his mother Sonia fight elections, have remained in development doldrums for decades including the 10-year-stretch between 2004-14 when the Congress most recently ruled the country. This has been a great missed opportunity for Gandhi. If he would have transformed these two constituencies in these years, they would have provided him with a developmental showcase. Instead analysis done on census data by the Business Standard newspaper showed in 2014 that in 7 of 13 socioeconomic indicators, these two constituencies fared worse than the rest of Uttar Pradesh and India.
One of the biggest problems of the Congress party has been to never really embrace its one great achievement – economic liberalization in 1991 which at last count had pulled out more than 130 million people out of poverty.
But with multiple attacks on big business in his speeches (some justified on issues like the fleeing of criminal businessmen like diamond jeweler Nirav Modi), Gandhi has kept his economic reasoning ambiguous.
One of his key aides, the former IAS officer, K. Raju claimed earlier this year that Gandhi’s economics mirror those of Britain’s hard Left Labour Party leader Jeremyn Corbyn. Considering that British business is widely known to be as terrified of a Corbyn prime ministership as of Brexit, such statements do not encourage confidence in Gandhi’s economics.
Many entrepreneurs have personally told me that they had hoped Gandhi would learn from the mistakes of his mother who inherited a soaring economy from Atal Bihari Vajpayee, did the right thing by putting economist Manmohan Singh in charge of it, but then proceeded to curtail Singh’s growth agenda by creating a hard Left advisory council which was ever suspicious of growth and big business.
Gandhi now has an advantage. As Congress president, he no longer needs to be tied to his mother’s legacy and can craft his own – by embracing a high growth future for India.
Many of the Congress old guard are dyed-in-the-wool socialists who learnt to be suspicious of businesspeople in the aristocratic colleges in England, where the gentry has traditionally looked down on business. These are men in the mould of the first prime minister (and Gandhi’s grandfather, the Cambridge-educated) Jawaharlal Nehru, who was suspicious of Indian industrialists and nudged his deputy Vallabhbhai Patel to shun them. Patel, who had been key fund raiser for the Congress throughout the independence movement, refused saying these were men who had built the national movement – and that without Indian industrialists, the country’s entrepreneurship could not grow.
Rahul Gandhi can retain his admirable concern for the environment and the poor but now that the Congress is trying to re-appropriate Patel's legacy from the BJP, there might be a lesson for him in that Nehru-Patel story.