Over six decades later in 2021, in an emphatic endorsement of the private sector and an equally emphatic denouncement of the IAS in Parliament, Prime Minister Narendra Modi said, “Sab kuch babu hi karenge. IAS ban gaye matlab woh fertiliser ka kaarkhana bhi chalayega, chemical ka kaarkhana bhi chalayega, IAS ho gaya toh woh hawai jahaz bhi chalayega. Yeh kaunsi badi taakat bana kar rakh di hai humne? Babuon ke haath mein desh de karke hum kya karne waale hain? Humare babu bhi toh desh ke hain, toh desh ka naujawan bhi toh desh ka hai.” (Babus will do everything. By dint of becoming IAS officers, they’ll operate fertiliser warehouses and also chemical warehouses, even fly airplanes. What is this big power we have created? What are we going to achieve by handing the reins of the nation to babus. Our babus are also citizens, but so are the youth of India.)
Stand with Independent Journalism
Your contribution helps us bring you accurate, impactful stories and on-the-ground reporting. Support the work that keeps journalism free, fair, and fearless.
Modi’s statement came two years after his government unprecedentedly started institutionalised lateral entry to infuse the government with talent from the private sector, and days after it announced a new Public Sector Enterprises (PSE) policy, under which sick public sector companies would be privatised.
The parallels between Upadhyaya and Modi’s rhetoric are unmissable—the endorsement of the private sector as crucial to nation-building, the disdain for the monopoly of the public sector, and the denouncement of IAS officers handling all economic affairs.
On first reading, it would appear that the Modi government indeed draws its economic philosophy from Upadhyaya, whose Integral Humanism was adopted as the official philosophy of the Bharatiya Janata Party (BJP) in 1985.
Since 2014, when the BJP came to power, concerted efforts have been made to elevate Upadhyaya to the level of Gandhi.
“Deendayal Upadhyaya is to the BJP what Mohandas Karamchand Gandhi was to Congress,” R. Balashankar, former editor of Organiser, said.
From naming schemes like the Deen Dayal Upadhyaya Antyodaya Yojana after him to erecting a large 72-feet statue of him in front of the BJP office in New Delhi; from holding a nationwide celebration programme to mark his birth centenary in 2017 to referring to him as the guiding force for the party–Upadhyaya has had an overwhelming ideological presence in the party and government’s rhetoric over the past 10 years.
Yet, beyond Integral Humanism, little is known about what Upadhyaya’s economic philosophy actually was. What was the political and economic context in which he was writing? Did he support the private sector? Was he anti-capitalism or did he represent petty capitalists? How was his brand of Swadeshi different from Gandhi’s? Was he writing more as an economic thinker or a political actor? Are there any overlaps between his economic philosophy and the economic policies of the Modi government over the past 10 years? And finally, are those overlaps ideological, rhetorical or purely coincidental?
With the Modi government having completed 10 years in power and set to present its 12th Budget, ThePrint examines to what extent it follows the economic philosophy of its own proclaimed ideologue.
Also read: Ideology first, or ties with BJP? KC Tyagi’s resignation lays bare power struggle in Nitish’s JD(U)
Capitalism, socialism—the Western entrapments
A leading politician once proposed to Upadhyaya that a joint front be formed against the Congress. Humouring the politician, Upadhyaya quizzed him about what the front’s programme would be. “What would be its economic policy?” he asked.
“Do not worry about them. Whatever you like, you can adopt. We are ready to support anything from an extreme Marxist to a downright capitalist programme,” Upadhyaya recalled the politician saying.
This, for Upadhyaya, who had been with the Rashtriya Swayamsevak Sangh (RSS) since the age of 21, was the root cause of the problem being faced by the country. As he said in his lecture series in 1960, which was compiled into the Jana Sangh’s official doctrine of Integral Humanism, “The basic cause of the problems facing Bharat is the neglect of its national identity.” The intellectual class in India, he argued, could not rise above intellectual categories like socialism and capitalism created by the West.
Upadhyaya was opposed to both.
Capitalism and socialism were responses to each other, and both, he said, led to human misery.
“Nationalism, democracy, socialism or equality (equality is there at the root of socialism—equality is different from equitability), these three doctrines have dominated European social and political thinking,” Upadhyaya says in Integral Humanism. While these are all good ideals that reflect the higher aspirations of mankind, in practice, each stands opposed to the other, he said.
To begin with, he argued, there was a movement for political rights from the lens of which man was seen as a “political animal”. To satisfy him, he was given the right to vote. But as he got the right to vote, other rights diminished. “What shall I do with the State if I don’t get any food? I have no use of this voting right. I want bread first,” Upadhyaya’s “political man” said.
In response came Karl Marx, who “saw man as primarily made up of body, wanting bread”. But those who followed Marx, Upadhyaya said, got neither bread nor voting rights.
The US’s capitalism was, for Upadhyaya, at the other end. There, he said, man has both bread and voting rights, but he has no peace or happiness. Now, he wants peaceful sleep, he said.
Here is how he explains the cycle of misery, “Democracy grants individual liberty, but the same is used by the capitalist system for exploitation and monopolisation. Socialism was brought in to end exploitation, but it destroyed freedom and dignity of the individual.”
Moreover, both capitalism and socialism arose in specific places and specific contexts—neither is necessarily universal. “They cannot be free from the limitations of the particular people and their culture which gave birth to these isms,” Upadhyaya wrote.
Indian people with their distinct culture, he propounded, would need their own “ism”.
Atmanirbharta, Ayushman Bharat, MGNREGA—Upadhyaya’s idea of ‘rule of dharma’
The Planning Commission has no constitutional authority, and there is no reason for the prime minister and other cabinet ministers to be its members, Upadhyaya wrote in The Two Plans.
The existence of the Commission, he wrote in the book’s preface, “shows that our mental attitude is still of the political agitator, and an airy idealist rather than of a practical planner determined not to ignore the stark realities of life while planning and pursuing with equally great determination objectives for a better but real life”.
“The whole planning machinery needs an overhauling,” Upadhyaya, a strong critic of Nehruvian economics, said.
In his first Independence Day speech as prime minister in 2014, Modi, who had had his own share of acrimonious encounters with the Planning Commission as Gujarat chief minister, announced its abolition.
But this was not the only step that Modi would take as PM which is, at least rhetorically, consonant with Upadhyaya’s economic worldview.
Consider Upadhyaya’s views on the following matters:
Food as a birthright: “Our slogan should be that the one who earns will feed, and every person will have enough to eat. The right to food is a birthright. The ability to earn is a result of education and training. In a society, even those who do not earn must have food” — Upadhyaya, Integral Humanism
His views on the social obligation to ensure that those without work get enough to eat find a clear echo in Modi’s own brand of welfarism exemplified best through the government’s free ration scheme, which has become the cornerstone of Modi’s welfare politics.
Healthcare for all: “The children and the old, the diseased and the invalids, all must be cared for by the society…In the event of an individual falling prey to any disease, society must arrange for his treatment and maintenance” — Upadhyaya, Integral Humanism
Here, he argues that only when the state can provide food, clothing, shelter and healthcare for all its people can it be called a rule of dharma. Otherwise, he said, it would be a “rule of adharma”. The shadow of his idea of healthcare for all can again be seen in Modi’s popular Ayushman Bharat Yojana.
Swadeshi: “The concept of ‘Swadeshi’ is ridiculed as old-fashioned and reactionary. We proudly use foreign aid in everything, from thinking, management, capital, methods of production, technology, etc. to even the standards and forms of consumption. This is not the road to progress and development. We shall forget our individuality and become virtual slaves once again. The positive content of ‘Swadeshi’ should be used as the cornerstone of reconstruction of our economy” — Upadhyaya, Integral Humanism
Writing and thinking as he was in the 1950s and 1960s, the fear of losing India’s newly gained sovereignty loomed large on Upadhyaya. Much like Gandhi, he sought to make evident the connection between economic and political sovereignty. He also saw importing foreign machinery as self-damaging for the new nation, as it would eat into the employment opportunities for its massive workforce. Therefore, India needed “Bharatiya technology”, which would not just not be a competitor to the Indian workforce, but also not conflict with the political and cultural objectives of the country.
Even though the threat to political sovereignty is no longer looming, Modi has also invoked “atmanirbharata” as a tool for national and cultural pride. The idea of economic self-reliance for a political end—sovereignty or pride—has, therefore, been common to both.
Employment for all: “…The unemployed people have to be fed, which is a continuous and unending drain on resources, consumed at double the speed. Therefore, instead of the usual exhortation of ‘Every worker must get food’, we must think of ‘Everyone who eats must get work’, as the basis of our economy” —Upadhyaya, Integral Humanism.
In 2015, Modi famously ridiculed the UPA-formulated Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) as a vestige of the previous government’s ‘povertarianism’. He said that while the scheme would continue under his government, it would be “a living monument to the failures of the Congress”. However, within a year, the Centre did a U-turn on the scheme, calling it the “nation’s pride”, and significantly increasing funds allocated to it year after year, even after the pandemic.
Fiscal conservativism: “If the Governments follow even the ordinary routine practices of appropriating and spending public monies and of keeping expenditure strictly within limits, at least 70 to 80 crores can be saved” — Upadhyaya, The Two Plans
Whether it was during the Vajpayee’s government or the past 10 years of the Modi government, there has been a remarkable adherence to managing the fiscal deficit. Even though the Modi government briefly moved away from this principle when its off-budget borrowing expanded, it soon returned to the path of fiscal consolidation.
Small-scale, decentralised industry
In 2016, at a gathering in Pune after the launch of projects under his government’s flagship Smart City mission, PM Modi had said that there was a time in India when urbanisation was considered “a big problem”.
“But, I feel differently. We should not consider urbanisation as a problem, but consider it as an opportunity,” he said. “People in the economic field consider cities as a growth centre… If anything has the potential to mitigate poverty it is our cities. That is why people from poor places migrate to cities, as they find opportunities there.”
This idea of urbanisation as a solution to poverty is markedly different from Upadhyaya’s. For him, as historian Aditya Balasubramanian notes in the paper A More Indian Path to Prosperity, urbanisation leads to population explosion in cities, slums, disease, deprives rural areas of talent and deculturisation of people. In Upadhyaya’s own words, urbanisation “uproot(s) the labor [sic] from his family, caste and village community and place him in a new, work-oriented milieu without any human values”.
Clearly, it is an entirely different economic philosophy. While several components of Modinomics can appear to be drawn from his party and its predecessor’s original ideologue, a closer look at the fine print of Upadhyaya’s economic worldview reveals stark differences from Modi’s.
While the economic discourse of the 1950s and 1960s, when Upadhyaya was writing, oscillated between the two poles of American capitalism and Soviet socialism, the RSS pracharak was greatly influenced by two Indian economists—M. Visvesvaraya and C.N. Vakil—who drew their inspiration of an ideal economic model from the pre-war Japanese experience of industrialisation, Subramanian notes.
Significant in the Japanese experience of economic development from the Meiji Restoration (1868) until the end of World War I (1919) were the following—the process was driven by small-scale private, not public enterprise, which included small firms set up by traders, wholesalers and local entrepreneurs; an emphasis on light, labour-intensive industry or consumer goods industries as opposed to the Soviet model of heavy industries; agricultural prosperity through small farms where small machinery and tools would be used to complement the work of farm workers, and not to replace them.
Upadhyaya would propose all these in some form or the other.
For him, like the Japanese, industrialisation had to be led by the private sector, and not the public sector, which he prolifically wrote against. This would seem to be consistent with Modi’s economic policy, but for the difference in the scale of private enterprise the two prefer.
According to Upadhyaya’s economic model, it would be a decentralised private enterprise that could make India self-reliant. “Decentralised small-scale industry should also be given first priority in the scheme of industrialisation,” he wrote in Two Plans. “There should be demarcation of spheres between the small-scale and large-scale industries. Let the Spinning Mills produce all the yarn and the handloom and the powerloom all the cloth at least for internal consumption.”
During World War II, he wrote, a number of small-scale industries had risen to the occasion, and catered to the demand of defense or other goods that couldn’t be imported. “Small-scale entrepreneurs had filled the gap and had the government followed a little more sympathetic policy towards them they would have provided a sound and stable base for the industrial edifice of the country,” he wrote. “If some of them have survived and are still up and kicking, it is in spite of governments apathy and the organised private sector’s antipathy.”
According to Subramanian, Upadhyaya’s economic model is one that is entirely based on small-scale, labour-intensive decentralised industry and agriculture. “For him, if growth was jobless, it was of no use. Even on the question of machinery, he was not opposed to machines like Gandhi, so long as they did not eat into employment,” said Subramanian.
Upadhyaya’s economic model was thus based on the idea of chhote udyog (small industrial production) and chhoti punji (small investment).
In fact, in Integral Humanism, Upadhyaya also notes the connection between democracy and monopolisation or crony capitalism. “Democracy grants individual liberty, but the same is used by the capitalist system for exploitation and monopolisation,” he said. While one of his biggest critiques of capitalism was its exploitation of workers, which was considered “normal and natural in a capitalist system”, when a monopoly is established, even the check of competition ceases to operate.
“In such a situation, the incentive resulting from competition is no longer available,” he said. “Prices are arbitrarily fixed and the quality of products deteriorates.”
Upadhyaya’s is then a model quite distinct from Modi’s, against whom one of the Opposition’s most enduring attacks is that of crony capitalism. While there are a host of policies that the Modi government has introduced to alleviate the financial woes of the MSME sector, it has been the hardest hit in the last few years with demonetisation, GST, digitalisation, pandemic-induced lockdowns, etc.
In fact, not only does Upadhyaya support small-scale industry, he also opposed them scaling up. “Normally, desire precedes the effort to produce the things desired. But now the position is reverse,” he wrote in Integral Humanism. “Earlier, production followed the demand; now demand follows the production.”
Calling mass, large-scale production carried out in the absence of demand a “dance of destruction”, he argued that it not only adversely affected the environment, but also led to economic depression. The Great Depression, he said, occurred precisely because there was nobody to consume the abundant goods in the market—leading to shutting down of factories, bankruptcy and unemployment.
With schemes like ‘Make In India’, and the government’s stated aim of making India a manufacturing hub, the dissonance between the BJP-led government and the party’s ideologue could not be more plain.
No Vajpayee or Modi
His economic model was based on boosting savings by leveraging India’s simple traditional household culture and cutting down what he perceived to be wasteful public expenditure characteristic of Nehruvian times.
“If the Government could associate these traditional virtues with the economic needs of the country, savings can increase,” he said.
This, he argued, would ensure that everyone participates in the country’s economic development. “Let economic development be taken up as a national ‘yajna’ in which each one has to offer his or her oblations,” he said.
People’s participation was core to Upadhyaya’s economics—even in large-scale government decisions like disinvestment.
Upadhyaya was a votary of disinvestment. Therefore, the fact that it was a BJP-led government under Vajpayee, which set up a Department of Disinvestment to privatise sick public sector units is no surprise. It is a goal that the Modi government too has sought to achieve, albeit with underwhelming results.
But Upadhyaya’s idea of disinvestment was radically different from the BJP’s two prime ministers. “So far the Government has borrowed money from the public in the form of loans,’ he wrote. “It would be desirable if shares of State undertakings are offered for subscription. The Government may keep the controlling shares with themselves and issue the rest.”
This, he argued, would give “an incentive to the investing public”. “People’s control in this manner may be more effective than Parliament controlling through debates and discussions,” he argued.
It was an idea that was repeated in Integral Humanism. In the capitalist and the socialist system, the surplus value is retained by the industrialist or the state, he said. In both systems, the entire production is not distributed among the workers, thereby alienating and disincentivising them from their work. The surplus value, he argued, ought to be distributed amongst workers, thereby giving them “a sense of direct participation in the management of the surplus value or capital”.
Much like industry, on the issue of agriculture too, Upadhyaya was a votary of small scales. Unlike and in strong opposition to the gigantism represented by Nehruvian economics of the time, Upadhyaya’s model of economic growth was based on large volumes of production at small scales.
Moreover, at its heart, Upadhyaya’s alternative economy was agrarian, Subramanian wrote. “He believed that small-scale, family farming worked best and suggested the country adopt a single land-tenure system based on the concept of small owner-based cultivation.”
Here again, Upadhyaya’s agrarian model would be in stark contrast to the Modi government’s three farm laws, which were rolled back in 2021 in the face of relentless protests by farmers.
Different BJP, different India
When former prime minister Narasimha Rao, aided by his finance minister, Manmohan Singh, announced the liberalisation reforms, the BJP was put in a bind.
As noted by Vinay Sitapati in Jugalbandi: The BJP Before Modi, the party’s conundrum was this: “The trader base of his (L.K. Advani) party was all for the removal of restrictions on their own businesses, but they wanted to limit competition from foreign companies and capital.”
Politically speaking, it was this same voter base, that wanted both ease of doing business and protection from competition from foreign capital, whose interests Upadhyaya’s economic philosophy sought to protect in the 1960s.
Responding to the reforms in 1991, Vajpayee said in Parliament, “Cable TV, Star TV are coming—have come. They will sell luxury articles. People will watch them in their huts. Even if the children do not have milk to drink, shampoo will be bought.”
Within a few years, he came to preside over the country’s second-generation economic reforms as prime minister.
What had changed? Both India and the BJP’s electoral base.
“At the time when he (Upadhyaya) was writing, a lot of these questions of which economic model India would adopt were not settled,” Subramanian said. “By the time even Vajpayee came to power, the political consensus had already shifted in favour of liberalisation, and he was acting within the new consensus.”
Moreover, there is a difference in Upadhyaya and Modi’s electoral audience too, a BJP leader, who requested anonymity, said. “There is no doubt that what Deendayal Upadhyaya was proposing was a sui generis model of economics, but at the time, the Jana Sangh was also a party of small, urban businessmen and capitalists…So, his support for a decentralised private sector without monopolies also made political sense, even as it was firmly grounded in ethical economics.”
“By the time Modi came to power in 2014, the debate between socialism and capitalism, USA and USSR, etc. were all a thing of the past,” he added. “India had already been liberalised for over a decade, and don’t forget, Modi was not just catering to the aspirations of this post-liberalisation India, he was effectively representing it.”
“An actual match between Deendayal Upadhyaya and Modi’s economics beyond the rhetoric is not possible,” he said.
Subramanian agrees.
It is the Swadeshi Jagran Manch (SJM) and Bharatiya Mazdoor Sangh (BMS)—both founded by RSS pracharak Dattopant Thengadi, who drew his own economic philosophy from Upadhyaya—that follow Upadhyaya’s economic philosophy way more than the BJP, he said.
In a way, the tensions one sees between the Swadeshi Jagran Manch and the government, for instance, are the tensions between Upadhyaya and Modi’s economics.
(Edited by Sugita Katyal)
Also read: BJP-RSS leaders have abandoned all ideologies for power. Hedgewar, Golwalkar would be shocked
