The Pulse

Will India’s Hindu Nationalists Prevent the Privatization of Air India?

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The Pulse

Will India’s Hindu Nationalists Prevent the Privatization of Air India?

The second Modi government may have to contest economic policy with the preferences of India’s ardent nationalists.

Will India’s Hindu Nationalists Prevent the Privatization of Air India?
Credit: Flickr via sranjanm2002

Does money have a nationality? And if it does, should we accept stocks of national companies being purchased by foreign capital? The answer to this question serves as one of the ways of categorizing the political right today with regard to economic issues. The proponents of the free market by and large believe not only that money does not stink, but that it does not hold a citizenship too. The nationalists, in turn, often see nationality imprinted on money—just like they easily see it elsewhere. And yet this division works only up to a point. The economic idea of the free market may coexist with an ideology of nationalism with the same party. India’s ruling party, the Bharatiya Janata Party (BJP), will face these questions as it is bound to discuss the privatization of the country’s national airline, Air India (once again).

In April 2018, the Bombay Stock Exchange, India’s oldest institution of that kind, hosted an uncommon guest. On this day, its session was opened by a man named Mohan Bhagwat. It was an unlikely choice that represented the changing the political mood in the country. Bhagwat is a leader of the Hindu nationalist organization Rashtriya Swayamsevak Sangh (RSS). Thus, the leader of a body that believes that money has a nationality symbolically opened a stock exchange trading session. While the choice was ideologically awkward, it also made political sense, as a strategy of sailing with the winds of changing governments.

The membership of the RSS largely overlaps with that of the ruling party, the Bharatiya Janata Party. Indian Prime Minister Narendra Modi is an RSS member too. Formally speaking, this means that Bhagwat is Modi’s chief within the RSS, while Modi is citizen Bhagwat’s prime minister. And yet Modi is known for his zeal in inviting foreign director investment and pursuing generally pro-market policies, some of which are not to the RSS’ liking. This was once again apparent as Bhagwat used his Bombay Stock Exchange speech as an occasion to comment on the  government’s alleged plan to privatize the national airline Air India. While not completely opposing privatization, the RSS supreme leader stressed that the carrier’s owner should be an Indian player.

This debate seems unavoidable now and perhaps will continue for months (or years) to come. Air India’s take-offs and landings have been shaky since the 1990s, and the company has not yielded a net profit since 2006. It carries a huge debt on its wings, and by now has lost most of its market to private competition. One is tempted to write that the firm has been in free fall for years, if that expression had not sounded so sinister. At any rate, its privatization was in the air much more than its aircraft.

The feasibility of selling the company to a private playing – disinvestment is the word they often use for privatization in India – is still being debated, however. It seems that the previous BJP government, which saw its tenure end just now (2014-2019), put that solution on the working table, but eventually did not push it through. It also appears that a part of the opposition against this plan comes from the Hindu nationalists’ own ranks: the RSS. Bhagwat’s speech is not the only indication of this. The BJP sailed through a reelection in April-May this year and Modi has retained the Prime Minister’s chair. Soon after, June witnessed the appearance of news that an organization called Swadeshi Jagaran Manch (SJM) has voiced its opposition to Air India privatization. SJM alleges that the government is now planning to sell the stock of Air India’s subsidiaries, such as the Air India Air Transport Services or the Air India Engineering Services. The thing is that just like the BJP, the SJM is a part of the RSS, which makes all this look very much like a fight within one ideological family.

The name Swadeshi Jagran Manch, clumsily but precisely translated, stands for a ‘Front for the Awakening [of the idea of] one’s own-country [industry]’. They key word is swadeshi: literally ‘of one’s country’. The term stands for the idea of protecting and promoting India’s industry. Swadeshi is much older than the BJP or the RSS and has been evoked by many different Indian parties. It is an idea that is historically connected to the country’s freedom struggle from colonial rule. Thus, the rightist and nationalist BJP has always been torn apart by the need to uphold swadeshi on one hand and its pro-market proclivities on the other.

Arguably, this has much to do with the party’s constituencies, which at present include both the rank and file Hindu nationalists, a part of the lower-middle and middle class (including small business owners such as shopkeepers), and the large Indian industrial houses on the other hand. In the past, for instance, a BJP leader explained his party’s tilt towards the free-market policies by reinterpreting swadeshi: it was not about a mercantilist protection of the country’s market, he claimed, but about going out and winning, about supporting Indian companies on the global scene. Even Narendra Modi, despite all of his power, showcased his flagship program, Make in India, as both an economic laissez faire program (attracting FDI to his country) and a reform destined to strengthen Indian industry, as if needing to please everybody. Moreover, the Swadeshi Jagran Manch protested against his policies more than once throughout the last five years.

So will the RSS halt the BJP government’s plan to privatize Air India? When the party was first in power for a full tenure (in 1999-2004), the RSS indeed put a stop to free-market reforms at a certain stage. Until 2002, the party did push through a number of far-reaching privatization programs, despite facing the wrath of the SJM. It was at that time that the disinvestment of Air India was already on the drawing board, although it did not happen for a number of reasons. But as the power of the government weakened halfway through the tenure and the RSS probably found itself in position to halt the free-market drive starting in about 2002.

The situation now is very different, however. First, the 1999-2004 government was in an unstable position from the very start, as the BJP relied on its allies to sustain majority. Secondly, the then-prime minister, the late BJP leader Atal Bihari Vajpayee, despite his huge popularity, was not as admired and supported by the RSS ranks as Narendra Modi is now. It as if the RSS, despite the rumblings within it, has given Modi a clean chit and a free hand to proceed with his strategies. Now, in 2019, the BJP has just won the elections with a much more handsome result than five years and has a majority it could have not dreamed of anytime earlier. Thus, Modi has the elbow room Vajpayee never hand.

Modi is in a political position today to actually push through the long-sought privatization of Air India. While internal pressures are not measurable by an external observer, SJM protests throughout the last five years of Modi’s tenure seemed to have had little to no impact on the prime minister’s policies, and by any standard the SJM is not a large part of the RSS. Even if the supreme leader of the RSS speaks against a sale to foreign companies, the BJP of now does not rely solely on the RSS. That Mohan Bhagwat seemingly considered an option of Air India’s takeover by a private Indian company may already be considered a step back from a rigid RSS position, but also a solution that fits within the idea of swadeshi.

But all of this does not have to mean that Narendra Modi will actually succeed in privatizing Air India, or that he even wishes to. There has been no large privatization of any major public company throughout the last five years of his rule. Moreover, it does not take a nationalist to consider a national airline a security asset, apart from its possible economic advantages. It may turn out that Air India’s privatization will be a prolonged, tormented, and even a failed process—or even a piecemeal one, such as in the now-discussed plan to sell the stocks of its subsidiaries. Thus, even if the carrier is to fly into private skies, the earlier opposition to this move will come not only from the RSS, and, at least this time, the Hindu nationalist organization should not be the only entity to be singled out.