Detractors can say that while India’s Vocal for Local campaign has been started by a political party that vehemently rejects communism, the Giant Leap Forward (GLF) was started in late 1950s by a communist regime, and hence any comparison is innately flawed. Here, it is important to note that all definitions of capitalism, socialism and communism that have ruled textbooks and discussions for decades now seek alteration owing to some late developments. For example, the communist China became more liberal, less protectionist under Deng Xiaoping, while the capitalist US has become protectionist under Trump.
That said, let’s begin with why the much-hyped vocal for local campaign of PM Modi may leave India poorer. The GLF’s failure and resulting Great Chinese Famine hold the cue.
When Chairman Mao Zedong launched GLF, he foresaw China becoming self-sufficient in production of steel, back then a product seen as fundamental to economic growth. What Mao did was he moved labour from farms to ‘backyard furnaces’ to augment steel production in China. Barely equipped with proper infrastructure and technical expertise, this plan backfired and what heightened the pain was that public officials suppressed the failure of the plan for long in order to stay in the good books of Mao.
Compare this with what the Indian PM seeks from his vocal for local pitch. He wants Indians to produce goods that were hitherto imported from other countries, especially from enemy countries including China. In simple words, he wants Indian banks to cut their dependence on point-of-sale machines imported from China and rather use locally produced products. He also wants Indians to shun platforms like TikTok- we will not talk about national security concerns here- and move to locally made platform.
The debate here is local v foreign and the PM has projected India as capable of being a self-sufficient or self-reliant nation. But let’s be rational. Why did we need to import in the first place? It’s because we do not yet have the expertise to produce similar goods locally and match price and quality of imported goods. India is an IT behemoth and our techies grab the largest chunk of professional visas in the US and other developed countries. In simple terms, we are good in terms of techies but lack when it comes to producing some goods, and let’s accept this.
Mao miscalculated results of his GLF campaign and the same public that backed his efforts with an ultra-nationalistic fervor was the biggest loser in the end. Now consider another program that ran parallel with GLF- the ‘Hundred Flowers’. Here, Mao encouraged criticism of government policies for a short period, however, in the end identified criticizers and persecuted them. Can you find a resemblance? Intellectuals rarely get rewarded in the Modi-regime. From RBI heads to ECs- anyone who critiqued the government was shown the door. It means that while there was no one left in China to warn Mao of the inevitable failure of his short-sighted backyard furnace plan, in India, anyone who will advocate that India should not be ultra-protectionist, at least for the sake of the poor, will risk being seen as anti-national.
The losers, however, in the end will be the general public. Inflation has breached the acceptable threshold and contraction in GDP growth is inescapable. Add to this the impact of import-substitution. From toys to auto components, import duties have been hiked with a view to ‘promote’ the local industry. We all have read how imports remained stuck for weeks at ports owing to delayed custom clearances and unwarranted red tape. All this is doing nothing but making goods and services expensive in India.
There is another element to this. The government has also restricted FDI from countries bordering India citing national security concerns. Do we forget that many startups, from Swiggy to Paytm to OYO, are funded by investors from neighbouring country? These startups have been burning cash for years and have yet to turn profitable. They, however, employ a considerable chunk of labourforce. Does India have any farsighted plan to employ these workers should these startups choose to shut shop?
There is much to write. However, let’s conclude with some notable failures of GLF. Infrastructure was hastily developed without much technical expertise that resulted in the unfortunate dam collapse incident a few years later. Unsubstantiated farming techniques were employed to increase output, however, it resulted in drastic fall. All this calls for a well-planned policy for import-substitution instead of ceding to the popular call of ‘boycott’.
PS: National security is paramount. At the same time, policy stance of the government has to be rational, not populist.