Rooted in anti-colonial struggle, Indian socialism, despite its limitations, helped progress towards an egalitarian society. Can that pathway be reclaimed?
Yesterday · 07:30 am
India’s immensely respected economist and public intellectual Prabhat Patnaik masterfully assembles in the pages of a short monograph the sweep of India’s post-colonial economic history. This is in his forthcoming Socialism and the Indian Constitution (part of a series of short volumes that Neera Chandoke and I are editing for the Centre for Equity Studies on the principal ideas of the constitution, published by Speaking Tiger).
He begins with unpacking India’s constitutional idea of socialism. He explains what drives this idea of socialism, what promises it contains, and how this varies from Marxist notions of socialism.
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In this volume, he evaluates (not unfavourably) the partial accomplishments of socialism in the early decades of the republic, the jettisoning of the socialist ideals amid the juggernaut of neo-liberalism, and its consequences of staggering inequality and furthering the impoverishment of the Indian peasant and worker.
He persuasively uncovers the necessary alliance of monopoly capital today with neo-fascism in Modi’s India. He concludes with an assessment of the profound dangers of the Trumpian global order, and speaks of both the imperative and prospects of reclaiming and rebuilding socialism for a more egalitarian country.
Marxist, anti-colonial notions of socialism
The Congress in India laid out a socialist agenda in the Karachi conference of 1931. India, Patnaik observes, was not alone among countries across the Global South that waged anti-colonial struggles, in placing socialism high in its imagination for countries freed from colonial bondage. We see socialism high in the agenda of many Arab and African freedom struggles. The fundamental difference with the Marxist-Leninist conceptions of socialism was that Marxists saw socialism to be a historical necessity with the focus on changes in the ownership and the building of a community of the working classes.
For post-colonial countries, including India, socialism was a normative idea, of building out of the ravages of colonialism a country that was more egalitarian; to end exploitation and poverty, and to secure for every citizen of every class, caste, gender, religion equality of opportunity. For those who came together to debate and write the Indian Constitution, democracy, secularism and socialism were inextricably conjoined in their imagination of a more equal and just country.
But in recent years, supporters of the BJP-led ruling regime have raised the demand that the words “secular” and “socialist” be deleted from the constitution, because they were added later, during India’s Emergency. However, turning down a petition to remove the word “socialist” from India’s constitution, India’s Chief Justice in November 2024 rejected this plea. He enunciated the features of constitutional socialism to be to secure equality of opportunity for all citizens through building a welfare state.
This, Patnaik underlines, differs from Marxist socialism insofar as while both Marxist and post-colonial socialism seek to accomplish equality of opportunity, Marxists believe that this is possible only with the social ownership of the means of production. India’s post-colonial socialism focussed on the results of an egalitarian order and not questions of ownership.
Patnaik observes that it was only Ambedkar among the leaders of the freedom struggle who saw in socialism not just the goal of greater egalitarianism but also the building of a new community. When he called for the annihilation of caste, he believed that only this would build the foundations of the new “community” in free India. This too is a goal neglected in the building of socialism in free India.
Practice of Indian socialism
Indian socialism in the early decades of the republic accorded space for the private corporate sector, while installing the state in the commanding heights of the economy. What India achieved in this phase, Patnaik points out, was a relative autonomy from imperialism. The regime confronted metropolitan capital mainly through the agency of the public sector. This manifested itself in the nationalisation of natural resources and finance that had earlier served the colonial pattern of the international order, and the building of self-reliance in both production and technology.
The nationalisation of 14 private banks in 1969, observes Patnaik, was a very significant step for Indian advancing the goals of Indian socialism. It was not fashioned as a decisive blow to finance capital but to ensure that India’s farm sector and petty producers could access bank credit which until then was mostly cornered by corporate private capital.
Patnaik also feels that the oft-repeated critique of the “quota-license-permit-raj” is somewhat misplaced. India chose to bar foreign capital inflows as these would impose conditions on state policy that would vary vastly from the socialist goals of the country. As a result, since foreign exchange reserves were limited, the state needed to regulate private industry to ration foreign exchange reserves.
Patnaik also answers critics of India’s choice of “self-reliance” over export-led growth. Export-led growth would have prioritised industry over agriculture. Self-reliant growth, on the other hand, ensured that agriculture and industry grew in tandem. Second, colonialism had ravaged India’s economy by a regime of forced trade, in which India produced primary commodities and imported manufactures. India needed to rebuild its production structure outside of and independent of trade, before a more egalitarian engagement with trade could become possible. These choices, Patnaik argues, were in conformity with anti-colonial nationalism.
So, too, was India’s education policy in the early decades. Borrowing Gramsci’s phrase, its objective was to create “organic intellectuals” of free India.
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There were many achievements of this period that Patnaik points to. India’s per capita availability of food rose after half a century of decline under colonialism. Terrible famines became a thing of the past. The magnitude of absolute poverty stabilised, but did not increase. The share of the top 1% in the national income which was 12% in 1947 fell to 6% in 1982 (and it has risen greatly since then, as we shall see). Therefore, India did make some progress to a more egalitarian order, despite limitations that Patnaik identifies.
Even before the advent of neo-liberalism, Patnaik points to several limitations in accomplishing equality of opportunity even during the first decades of the Indian republic in which the executive proclaimed its commitment to advance socialism. India’s growth rate was much higher than in colonial times, but tied as it was to a slow-growing agriculture, it was not high enough to make a sufficient dent to the massive unemployment inherited from colonialism. Sufficient public resources were not invested in agriculture, as compared to industry.
One major failing of this phase, according to Patnaik, was the failure of land reforms. It made some headway in states like West Bengal, Jammu and Kashmir, Kerala, Karnataka and Telangana. But for the country as a whole, it did little to reduce the concentration of land ownership.
Another paramount failing in securing the goal of equality of opportunity was the continuance of significant levels of unemployment, or what Marx called the reserve army of labour. The second was untaxed inheritance. As Patnaik points out, a worker’s son could hardly have the same opportunities as the son of a billionaire who inherits millions. Differences in wealth also needed to be more effectively controlled if we were to achieve even a modicum of equal opportunities.
Further, we did not invest in a public education system that ensures free and equal educational opportunities to all, irrespective of wealth, income, caste and gender. The same applies to the failure to establish a public health system that assures free or affordable quality health care to all persons.
The neo-liberal age
But still, the first decades of the Indian republic were rooted in anti-colonial nationalism, despite many missed chances. However, this regime of partial, imperfect but still significant commitment to socialism as defined in India’s constitution was rapidly dismantled from the mid-1980s by a new regime of neo-liberalism. This gave way from the mid-1980s to what Patnaik calls “GDP nationalism”, very far from Gandhiji’s vision of wiping every tear from every eye. The rising bourgeoise and middle classes sought an accelerated growth strategy shorn of socialist and egalitarian aspirations. Instead, the aspiration was to accomplish high GDP growth elevating India to the high table of major economic powers.
This entailed opening barriers and incentivising international capital, and encouraging domestic corporate-financial oligarchy even with budgetary transfers and concessions that moved resources away from social goods like public education and public health. This ushered in the neo-liberal order, which was a regime that enabled the free movement of goods, services, capital and above all finance across international borders.
This effectively marked, according to Patnaik, a move away from the sovereignty of the people to the sovereignty of international capital, with deleterious implications for democracy. This was because the fear of the “flight of capital” made economic policy beholden not to the wishes of the people but to the demands of international capital. This resulted in a sharp decline in welfare services, in public healthcare and education, and in the capacity of the state to tackle unemployment through rises in public spending. This regime shifted the burden of taxation from the rich to working people.
He also describes the reasons for the persisting crisis of employment under neo-liberalism, even as global capital shifted production to the global south to take advantage of the lower wages resulting from a massive reserve army of labour. This still does not lead to a rising graph of employment in the global south, partly because of the massive crisis of petty production and agriculture that threw millions of workers into unemployment, and partly because of the incentive built into corporate profit-maximisation to resort to labour-saving technologies. The cumulative result of massive and stubborn levels of unemployment was that real wages in the global south did not rise, because the reserve army of labour does not diminish.
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The result also was a massive growth in inequality. Patnaik points to the World Inequality Data base that showed that the share of the top 1% in the national income rose from a low of 6% in 1982 to nearly 23% in 2023. This entailed a burgeoning shift in income from the working classes – from peasants, informal labour, petty producers – to the richer classes. The large reserve army of labour and the worsening of chronic unemployment also led to an increase in the incidence of absolute poverty even as GDP continued to rise sometimes dizzyingly.
In effect, Patnaik says, neo-liberalism entails an acceptance of the hegemony of capital over labour and of capitalists over the rest of society. It negates the equality of opportunity that is the cornerstone of socialism as an aspiration for egalitarianism, that we saw to be a necessary complement to democracy. Internationally, it also eroded the solidarity between nations of the global south of the Non-Aligned Movement into a Darwinian competition between each other.
Complementary rise of neo-fascism
Patnaik also outlines importantly the rise of neo-fascism in recent years as a necessary complement to neo-liberalism. He points to Javer Milei in Argentina, Donald Trump in the United States, Viktor Orban in Hungary, Recep Tayyip Erdogan in Turkey, Giorgia Meloni in Italy, Benjamin Netanyahu in Israel and Narendra Modi in India.
Waiting in the wings almost everywhere are far-right parties like the AfD in Germany and Marine Le Pen in France. They all troublingly share important characteristics with the fascists of the 1930s: authoritarianism, the “othering” of certain vulnerable minorities, the rise of violent youth groups, a disdain for reason in the public discourse, the rise of the “supreme leader” and a close relationship with monopoly capital.
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Fascism rises in contexts of the crisis of capitalism; and Patnaik believes that contemporary neo-fascism is the outcome of the crisis of neo-liberalism. When monopoly capital is threatened, they finance fascists groups and bring the media under their control. These build a discourse of the alleged harms done by the “othered” minority on the dominant majority, and demand violent vengeance. The mass unemployment also makes it easy for the fascist groups to find recruits to carry forward the hate-filled, violent and divisive agenda.
The Indian version of fascism – Hindu supremacism – is, Patnaik believes, the closest to the classic description of fascism. The Rashtriya Swayamsevak Sangh made no secret at the time of its formation of its admiration for European fascism, and it has not retracted from this. It has specially expressed admiration for the fascist youth wings, echoed today in India in the Bajrang Dal and the Akhil Bharatiya Vidyarthi Parishad.
Modi’s rise, he observes, was explicitly planned by monopoly capitalists, and Modi in turn has been an unstinting backer of the corporate-financial oligarchy and international capital. This has also made the BJP the richest political party in the world. Modi has weakened labour rights with a new code of highly repressive labour laws, and tried to extend corporate control even over agriculture, a move powerfully resisted by Indian farmers.
With the manifest failures of neo-liberalism to “trickle down” to the working poor, the Hindutva-corporate alliance resorts to diversionary polarising policies of Hindu supremacism, with a discourse that the Hindu majority at last is able to live with its head high, even as the regime persists with its neo-liberal anti-worker, anti-farmer, anti-minority, anti-Dalit, anti-Adivasi, anti-poor policies.
Patnaik points to important differences between the old fascism of the 1930s and neo-fascism. The old fascism was characterised by national finance capitals in mutual rivalry, resulting in the world wars. Neo-fascism on the other hand is characterised by international capital, which is opposed to the division of the world into rival spheres of influence. This makes neo-fascism much harder to dislodge as compared to the old fascism. The old fascism was accommodative of fiscal deficits to finance enhanced public spending, including on armaments, in a way that neo-fascism is not. The old fascism was therefore able to address to a degree the extreme job crises in the Great Depression. The nation state today does not feel free to expand deficit financing even to deal with burgeoning unemployment. This failure requires them to whip up hate against the “other” even more decisively.
The rise of neo-fascism rapidly culminates the decimation of democracy and the principles of the constitution that is spurred by neo-liberalism. What begins with the hegemony of international capital has now grown in Indian into a full-fledged assault on democracy, including the ruthless targeting of minorities, suppression of dissent, jailing for years without trial of young dissenters, the control of the university so as to not allow young minds to develop critical thinking and the targeting of the intelligentsia. Policy is designed to fully to serve the interests of chosen segments of the crony capitalists. The public sector including banks give credit now not to petty producers and peasants but to big capital, which they rarely return.
The result is that democracy, socialism, egalitarianism, federalism and secularism are all sacrificed on the later of the march of Hindutva and the interests of chosen crony capitalists. Without formally repudiating the constitution, the Hindutva- crony capitalist combine has done everything to destroy the basic features of the constitution.
Universal economic rights
Patnaik ends his compelling, even magisterial treatise by lighting the pathways to reclaim the values and pledges of the Indian Constitution that was born out of the anti-colonial struggle, particularly socialism.
This requires first a regime of fundamental economic rights, which he lists as the rights to food, employment, school education and universal public health care. He calculates that this would not cost more than 10% of the gross domestic product, which could be fully financed by a wealth tax of 2% and an inheritance tax of one-third. However, this would require the political will to tax the rich. In times of the comprehensive capture of public policy by big business and majoritarian impulses, building this political will would be immensely challenging.
The restoration of socialism in India, Patnaik rightly observes, would require the same steely public resolve of the people of the global south as characterised the anti-colonial struggle.
Harsh Mander is a peace and justice worker, writer, teacher who leads the Karwan e Mohabbat, a people’s campaign to fight hate with radical love and solidarity. He teaches part-time at the South Asia Institute, Heidelberg University, and has authored many books, including Partitions of the Heart, Fatal Accidents of Birth and Looking Away.
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