We're All (Still) Socialists in India

Though Indian politicians talk a lot about reform, they are good at spending tax payers money, mostly because they are socialists. Every political party in India should swear allegiance to socialism, according to the 42nd amendment to constitution.There are around 50 parties represented in the parliament, but people of India do not have much of a choice as there is no liberal political party. The petition filed by Sanjiv Agarwal is a case in point. The petition was withdrawn on the grounds that no political part has opposed the insertion of the word 'Socialism".Political parties should take up this cause.My article titled "We're All (Still) Socialists in India" was published in The Wall Street Journal on July 26th 2010.

India's politicians love to talk about "reform," but if the recent past is any indication, most of them like spending money more. There's the $22 billion annual bill for food and fertilizer subsidies; the billions spent every year on the rural employment guarantee scheme; plentiful government-subsidized loans; and on, and on. The lack of debate over the virtues of these wasteful policies is striking in the world's most vibrant democracy. A big reason is because all Indian politicians are—officially—socialists.

That's not a typo. During the height of Indira Gandhi's Emergency Rule in 1976, policy makers passed the 42nd Amendment to the Constitution, which added the words "socialist" and "secular" to the preamble. Then in 1989, the Representation of People Act, the law which governs elections and political parties, was amended to make it mandatory for all political parties seeking registration with the Election Commission to affirm not only the general constitution but also socialism. Since then all political parties have sworn to socialism without any hesitation, without bothering to define what it means.

These are more than just semantics. Political parties are plentiful in India, with around 50 parties represented in the national parliament, and hundreds of parties operating at state and local levels. Yet, the political ideals on offer are very limited, and there are no avowedly liberal political parties. The "socialist" pledge, as it turns out, has created a serious legal anomaly and a damaging precedent.

Look no further than the recent case of Sanjiv Agarwal, the head of the Good Governance India Foundation in Calcutta. In 2007, Mr. Agarwal, whose nongovernment organization fights for property rights and the rule of law, filed a public-interest petition to the Supreme Court questioning the validity of the 42nd Amendment and the relevant section of the Representation of People Act. The petition argued both provisions violated the basic premise of democracy and political freedom enshrined in the Constitution.

Two years later, the Election Commission filed a response and acknowledged that the 1989 law required all parties to affirm their loyalty to socialism. In other words, although the word "socialism" was included in the Constitution through the political and constitutional process, it cannot be opposed and removed by the very same process. The Government of India did not file a reply.

When the petition was first heard by the Supreme Court in January 2008, Mr. Agarwal's lawyer pointed out that the anomaly in the election law had been questioned in 1995 by the Swatantra Party Maharashtra, a small political party located in Maharashtra State. Unfortunately the Mumbai High Court still has not heard the petition—even though 15 years have passed since its filing.

Mr. Agarwal couldn't legally substantiate the details of the old case, and the judges on the bench observed that while it was a valid point, it was also an "academic" one, since no political party in the country had actually opposed it. So the petition was withdrawn on July 12.

The fight isn't over, however. The Supreme Court did not reject the petition outright. Instead, the three-judge bench implied the court would prefer to deal with it when a political party actually is aggrieved, or refused registration because of its refusal to affirm socialist beliefs. The Court's statement also implies there is merit in Mr. Agarwal's arguments.

As it should: India's founders debated the question of socialism at length in 1949. The chairman of the constitutional drafting committee, B.R. Ambedkar, said: "What should be the policy of the state, how society should be organized in its social and economic side are matters which must be decided by the people themselves according to time and circumstances. It cannot be laid down in the Constitution itself, because that is destroying democracy altogether."

Fixing India's foray into socialism will take time. None of the serious political parties engaged in the electoral fray in the past 20 years has objected to the socialism clause, including nominally conservative parties such as the Bharatiya Janata Party and Shiv Sena. All see great political benefits from large public-spending programs that cement political patronage, even if those policies ultimately create more dependence, higher unemployment and lower future economic growth.

Yet India is changing slowly but surely since the "big bang" economic reform of the early 1990s. Today, the economy is poised to enter into a 10% annual GDP growth phase. Foreign multinationals have purchased two of the biggest Indian pharmaceutical companies at record prices, and rather than raising fear, many Indians feel proud that Indian assets could fetch such high values in the global marketplace. The recent auction of third-generation telecommunication spectrum raised a phenomenal $20 billion.

All political parties need to take up this cause. If the political space is legitimately opened up, then the political agenda would have to change too—and then the electorate may inevitably follow. India's free-market liberals then might find their rightful place in the political mosaic of the country. Just as India's diversity has sustained her democracy, political diversity will only strengthen the foundation of the republic.