It seems to be a paradox that Indian democracy faces its biggest crisis when the economy is recording the highest growth rate in the world. The growth rates of GDP and the tall claims of emerging as a Viswaguru, and promises of becoming Viksitbharat by 2047, under the stewardship of Modi are increasingly failing to contain the rising discontent among the masses. Capitalism often faces crisis in either of the two ways: first, a crisis of profitability or a squeeze in profits due to declining productivity together with unchanged or rising claims of workers; and second, a crisis of legitimacy where high rate of exploitation although ensuring high profits also causes rising inequality and discontent threatening the political legitimacy of the system which is run through managed consent.

Neoliberalism which was a class response of the capitalist class to restore the declining profitability during the seventies is coming to an end. But the end game may not be a peaceful exit. Globally, this is being manifested by the neofascist stance of US in reorganising geopolitics by coercing countries to stand in their support. The declining empire is now known for its unpredictable convulsions and irrational postures rather than what it was in its rising phase when the US was leading the growth of productive forces, emerging to be the leading manufacturer of the world, with institutionalised mass production and consumption and offering a moderately stable standard of living to the majority of its citizens. The globalisation process unleashed by metropolitan capital thereafter created a new division of the world where the US emerged as the financial centre of the world while manufacturing was relocated to the Global South. Now it has turned a full circle when the process of diffusion of technology and knowledge and the autonomous growth in countries as China has emerged as a challenger in terms of economic power as well as in technological development. The biggest advocates of free market and multilateralism are now turning protectionist while at the same time showing its last spell of colonial adventurism in search of control over natural resources in Gaza, Venezuela, Greenland and so on. In countries of Global South high growth is accompanied by rising inequality, declining quality of employment and growing climate crisis. These contradictory trends make relation between neoliberal capitalism and democracy increasingly contentious.

GROWTH WITHOUT WELL-BEING

For the past three and half decades, production and distribution of output was largely determined by the market, and it was believed that market can ensure efficient allocation of resources. The logic of the market also defined the rationale of the social relations that is winners are efficient and therefore to be rewarded while losers are those who could not compete due to their inefficiency and therefore deserve punishment. Hence possession of wealth was portrayed as a metric of success and poverty as a mark of failure of individual capabilities. Neoliberalism after three decades ended up as an economy with huge concentration of wealth on the one hand and stagnant real wages on the other hand. Unemployment, particularly among the educated youth, has reached unprecedented levels and large portion of the youth population has quit the labour market as they have no hope left of getting a job. On the contrary, profits of the corporates have increased significantly in the recent past, but this is largely dependent on financial returns. As a result of financialisation, the relation between growth, profit, investment and employment is completely jeopardised. High profit growth of corporates continues with declining growth of physical productive capacities, that is investment, and therefore growth is delinked from job creation. This has accelerated inequality with increased polarisation in terms of income, wealth, power and vertical mobility.

The economic policies of austerity in the name of fiscal prudence, as the hallmark of neoliberalism, are nothing but means of coercing the working people who because of declining public provisioning would be dependent on markets for procuring essential goods and services. It has given rise to new markets of profit making for the big corporates in areas of health, education, entertainment, security and insurance. Such markets create opportunities for corporates in extracting profits from the consumption fund of the common people. It restricts access to standardised services such as health or education for the poor and the underprivileged. It also shrinks the existing possibilities of vertical mobility for the poor and the middle class as access to knowledge and skills increasingly depend on the purchasing power rather than being allocated from public resources.

MANOEUVRING DEMOCRACY

All these have brewed discontent among the masses in countries across the world and even in India which experiences fastest growth. This is primarily because economic growth and wellbeing of the masses is increasingly delinked. The problem of neoliberalism with democracy arises because both are based on claims of free choice—the former is a choice of goods and services in the market, and the latter is about expressing choice among contesting representatives through votes. In countries where representative democracy exists people’s choice would be guided by the lived experience of their wellbeing and not by the growth metrics. On the other hand, corporates are only able to make huge profits in a scenario of declining investment growth and depressing demand because their large part of earnings is not dependent on production but upon rise in asset prices and creation of new assets. These corporates largely influence government policies to internalise the imperatives of global capital to remain afloat while the same process ends up causing inequality and rising cost of living for the poor and the middle class. Neoliberalism therefore comes in conflict with representative democracy which they cannot easily get away with. The conflict is that rulers internalise the imperatives of global finance capital but they have to be elected by people of their own country to continue as rulers.

This accumulation of conflict has been addressed by the right-wing parties in three specific ways and in case of India we are currently experiencing how they play out. The first is trying to create enemies within the people that is the politics of othering. Right-wing politics takes a communal turn with the BJP government in power and the consistent state sponsored effort towards mobilising people at the grassroot levels through performative communal acts that becomes crucial in fragmenting class identity. From mob lynching to assertive Brahminical gestures and cultural rituals as well as militarisation of religion creating a monolithic masculine version of Hinduism and hate mongering has become the lifeline of the existing government. They have nothing to offer to the people of India except some micro welfare schemes which helped garnering popular support in their initial phase. This is the second line of pacifying mass discontent which kept on shifting target groups having direct correlation with political cycles. Universal support and protective institutions are dismantled, rights and entitlements of working people are either trivialised or watered down, public expenditure on social welfare as a share of total expenditure are on the decline. Corporates are given tax concessions while cost of living of common people kept on rising. The micro welfare schemes are not supported or extended by taxing the rich it is a redistribution of the shrinking pie for the common people. However, the marginal political payoffs of such schemes are gradually waning since this has become the mode of welfare offers across political parties. More importantly, without expanding the scope of the schemes or its coverage, accumulating political support becomes difficult. Therefore, the cost per unit of political support keeps increasing. In this milieu the third strategy is to make a part of the population invisible, that is they cease to exist as legal citizens with their rightful claims. This is the last resort of the ruling combination to stifle democratic rights. Some of the institutions that constitute democratic system namely judiciary, bureaucracy and mass media are largely compromised. The only check left so far in the hands of the people by far is to choose their representatives in the legislature which is now being hijacked by flawed electoral rolls and partisan voting administration. This is bringing people to the streets which seems to be the only way left for them to make their voices heard.