Book Excerpt: What Is The BJP’s Economic Ideology?

It was votes, not ideology or money, that shaped Jana Sangh economics, writes Vinay Sitapati.

Madan Lal Khurana, LK Advani, Atal Bihari Vajpayee and Vijayaraje Scindia.  (Photo Courtesy: PIB)
Madan Lal Khurana, LK Advani, Atal Bihari Vajpayee and Vijayaraje Scindia. (Photo Courtesy: PIB)

Excerpted from ‘Jugalbandi: The BJP Before Modi’, by Vinay Sitapati, with permission from Penguin Random House India.

Balraj Madhok was not the only one within his party critiquing state controls of the economy. By 1970, the economist Subramanian Swamy had been influenced enough by opposition leader Jayaprakash Narayan to give up a faculty position at Harvard University, and return to India. His essay in favour of India acquiring a nuclear bomb impressed the Hindu nationalists, for whom this had been an ideological fixture. Just thirty one years of age at the time, Swamy says he soon became beloved of the RSS, and was asked to draft an economic plan for the Jana Sangh. His plan envisaged a reduction in state controls, but in a nod to the party’s indigenous hankerings, was called the ‘Swadeshi’ plan.

In these early years, Vajpayee and Swamy were not the antagonists they would later become; it was Vajpayee who first taught the ‘foreign educated’ Swamy to wear a dhoti. Swamy remembers: ‘In 1970 and [the] first quarter of 1971, Vajpayee couldn’t spend one day without calling me. He was living in 1 Feroze Shah Road. Mrs Kaul also liked me, because she was thinking, “Since he is from the West, he will understand our relationship.”’ But Swamy’s rapid rise began to threaten a Vajpayee who was still consolidating his grip over the party. Vajpayee’s insecurities were heightened by Swamy’s tendency to speak rashly and promote himself relentlessly.

Yet another factor pushing the Jana Sangh in favour of a strong line against Indira’s socialism were the Bombay-based industrialists who were now funding the party. They were culturally and financially unlike the shopkeepers and traders (and even Rajmata Scindia) who had funded the party in the 1960s. They were against Indira Gandhi’s economics, and had read the 1967 elections as heralding the Jana Sangh as a national alternative to the Congress. These Bombay corporates were, however, motivated by self-interest rather than principle. While supporting free enterprise for domestic entrepreneurs like themselves, they lobbied to keep the external controls that prevented multinationals from entering.

(Photograph: BloombergQuint)
(Photograph: BloombergQuint)

The credit for bringing these Bombay businessmen into contact with the northern Indian Jana Sangh lay with Chandikadas Amritrao ‘Nanaji’ Deshmukh, the incorruptible treasurer of the Jana Sangh. His legend was built on relentless pursuit of lucre for the party, including running on foot after a horse-riding prince to entice him to give money. Nanaji was also uncommonly honest, so much so that the party would send him alone to collect money. ‘After him, two people go now. To make sure,’ N.M. Ghatate says. ‘[But] with Nanaji there was never any doubt.’

Through the early 1970s, Nanaji cultivated the Tatas, Mafatlals and other industrial houses. He also got to know R.V. Pandit. Pandit would himself part with much money for the party—cheque only, since he was against black money—and would become one of Vajpayee and Advani’s closest friends. ‘I used to give the cheque directly to Advaniji and Atalji and George and Jaswant,’ Pandit says, providing his bank statements as evidence for this.

Of all these patrician industrialists who gave money to the party, the most prominent was also the most unusual. At the time one of the richest groups in India, the Wadias were Parsis who had made their money during colonial rule. Their flagship Bombay Dyeing textiles was a household name. The scion of the Wadia group, Nusli, wasn’t just uncommonly rich, he was also the grandson of Muhammad Ali Jinnah.

The founder of Pakistan had disinherited his daughter Dina when she had married the non-Muslim Neville Wadia. When partition came, Jinnah had moved to Pakistan, leaving behind Dina and grandson Nusli. ‘As long as Nusli’s father was alive he forbade him from politics,’ a friend of Nusli Wadia says. ‘Basically, he [Nusli’s father] felt that one politician in the family had caused enough problems. But once he died, Nusli began links with [the] Jana Sangh.’

Nusli Wadia became acquainted with Nanaji in the late 1960s when they were introduced by a businessman friend. It was Nusli who then introduced Nanaji to J.R.D. Tata. And by the 1970s, Jinnah’s grandson was funding large parts of the Jana Sangh. One illustration provides a sense of his influence.

Nusli Wadia, chairman of the Wadia Group. (Photograph: PTI) 
Nusli Wadia, chairman of the Wadia Group. (Photograph: PTI) 

Nanaji Deshmukh understood early that newspapers and magazines could prove a potent weapon, since radio and television were controlled by the Congress government. The RSS already ran the Hindi weekly Panchajanya, the Marathi daily Tarun Bharat and the English fortnightly Organiser. But Nanaji was convinced that an English daily was required to reach the influential urban Indian who was repulsed by the Jana Sangh. Virendra and Coomi Kapoor were two of the first journalists to join this newspaper, Motherland, housed in the first two floors of the Deendayal Research Institute in north Delhi. Nanaji would live above the shop on the fifth floor, while K.R. Malkani edited the paper. Virendra Kapoor says: ‘A newspaper depended on patronage. No advertisement was possible since Congress was in power, and no industrialist wanted to cross them. But I saw Bombay Dyeing ads in Motherland, and I remember Nusli Wadia visiting the offices once before going up to see Nanaji.’ Kapoor says that it was brave to fund a Jana Sangh newspaper in those days. ‘Once, an industrialist offered to pay us cash. Malkani [the editor] said no, buy an advertisement. So he put an ad. A few days later, at a party, a Congressman said to him, “Oh! I remembered you the other day . . . when I saw your ad in Motherland.” The point was made. The industrialist never gave any more money to us.’

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With pressure to oppose Indira’s socialism coming from Madhok and Subramanian Swamy within, and corporate funders without, it stands to logic that the Jana Sangh should have merged with the Swatantra Party and articulated a capitalist position. That this did not happen owes something to the class background of Hindu nationalists—lower middleclass men just one step removed from poverty and suspicious of unbridled capitalism. But the primary reason why the Jana Sangh declined to oppose Indira’s economics was neither ideology nor class background. As the party’s internal debate over bank nationalization shows, the answer was much simpler.

By the late 1960s, India had several private banks, apart from government-owned ones. For a variety of reasons, credit was scarce for rural areas as well as for small urban enterprises. Sensing an opportunity, Indira Gandhi began advocating state control over those private banks to extend credit to a wider swathe of Indians. When the bank nationalization bill came to parliament, Madhok opposed it, saying that ‘people taking loans will have to do bootlicking of officers’. In the same parliament, Vajpayee was more conciliatory. ‘Sir, Bharatiya Jan Sangh is not opposed to nationalisation in principle. It can be done if it is in the public interest . . .’ The Jana Sangh’s final resolution on nationalization strove for a middle path, supporting the principle but opposing a policy made without ‘due thought and without preparing any blue-print’. And when the matter came up to vote, Jana Sangh members conveniently absented themselves. An incensed Madhok gave a public statement questioning the Jana Sangh leadership—a not-so-subtle dig at its president.

Atal Bihari Vajpayee and  LK Advani, in New Delhi, on Oct.  13, 2003. (Photographer: Sondeep Shankar/Bloomberg News)
Atal Bihari Vajpayee and LK Advani, in New Delhi, on Oct. 13, 2003. (Photographer: Sondeep Shankar/Bloomberg News)

In refusing to oppose Indira’s economics, Vajpayee was joined by L.K. Advani, who since 1970 had become a parliamentarian in the Rajya Sabha or the unelected Upper House. Thus far, Advani had been Vajpayee’s devotee. But now, confronted by Madhok, Vajpayee needed more than just an admirer; he needed an equal partner. Joining them were many others in the party, who realized that bank nationalization was the consensus in parliament. An aide to Vajpayee says: ‘Atalji knew which way the wind was blowing. The Indian public supported Indira’s socialism. The Jana Sangh realized that.’

The party’s economic socialism at this time must be contrasted with Prime Minister Vajpayee’s market economics in the first decade of the new millennium, and Narendra Modi’s heavy-handed intervention in the economy in recent years. The ease with which Hindu nationalists can spout opposing economics suggests they do not have a principled view on the subject. And that their economics in the 1970s also went against their funders points to the fact that money power alone does not explain their policies. Instead, the deciding factor in choosing to not confront Indira Gandhi was an analysis of what it took to win elections. It was votes, not ideology or money, that shaped Jana Sangh economics.

Footnotes have been redacted in this exclusive excerpt.

Vinay Sitapati teaches at Ashoka University, and is also the author of ‘Half - Lion: How P.V. Narasimha Rao Transformed India’.

The views expressed here are those of the author, and do not necessarily represent the views of BloombergQuint or its editorial team.