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Contradictions, Negotiations and Reform: The Story of Left

Policy Transition in West Bengal

Article in Journal of South Asian Development · August 2015

DOI: 10.1177/0972150915591392

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Article

Contradictions, Journal of South Asian Development

10(2) 1–31
Negotiations and © 2015 Sage Publications India
Private Limited
Reform: The Story of SAGE Publications
[Link]/[Link]
Left Policy Transition DOI: 10.1177/0972150915591392
[Link]
in West Bengal

Ritanjan Das1
Zaad Mahmood2

Abstract
This paper provides a historical perspective on a rather unique chapter in the era
of economic reforms in India—the case of the state of West Bengal. In 1991, the
Government of India began to pursue a policy of economic liberalization, causing
serious political challenges for the Communist Party of India-Marxist (CPIM)-led
Left Front coalition in West Bengal. Historically, the CPIM had strongly opposed
economic reforms, but was compelled to undertake a policy ‘transition’ owing to
the stagnating economy of the state. The transition, and the motivations behind
it, was a topic debated often—especially once the party started courting private
investment, pushed for large-scale industrialization, and eventually suffered a his-
toric defeat in 2011 after 33 years in power—but rarely has a coherent historical
narrative of what caused the transition been brought to the forefront. This paper
attempts to address that gap by examining the following question: what were the
local political conditions that compelled the CPIM/Left Front take upon itself the
task of engineering such a transition? While acknowledging the larger forces of
globalization and Indian federalism, the analysis focuses on the rarely discussed
local socio-economic priorities in West Bengal, and constructs a dual narrative
of instrumental and political–ideological arguments.

Keywords
India, West Bengal, Left Front, CPIM, industrial policy, Jyoti Basu

1
Portsmouth Business School, University of Portsmouth, United Kingdom.
2
Department of political science, Presidency University, Kolkata.

Corresponding author:
Ritanjan Das, Portsmouth Business School, University of Portsmouth, Richmond Building, Portland
Street, Portsmouth PO1 3DE, United Kingdom.
E-mail: [Link]@[Link],
2 Journal of South Asian Development 10(2)

Introduction
The 30 years story of the Left rule (the Left Front coalition spearheaded by the
Communist Party of India-Marxist: CPIM) in the Indian state of West Bengal has
often been a tumultuous one, sparking intense debates in the political echelons of
the country. The Left Front demonstrated a rare instance of political stability,
especially when placed in the wider context of caste-, religion- and ethnicity-
based politics and frequent regime changes elsewhere in India; it decisively won
seven consecutive democratic elections from 1977 to 2006, finally losing in 2011.
The Left Front’s development record is also substantial. It brought in significant
land reforms, was the first among Indian state governments to take up the mantle
of democratic decentralization via the panchayati-raj institution (a system of local
governance) and gained unprecedented popularity as a government for the poor.
In this context, the electoral defeat of the Left Front in 2011, after a much
touted industrialization drive and associated land acquisition, evoked sharp reac-
tions. In the 2006 state elections, the government had earned a historic majority,1
but this was followed almost immediately by a ‘series of poll debacles …[which]
left the…Left Front…completely shell-shocked. It did not quite anticipate the tide
of popular mood to cause almost a lateral shift in its electoral base in the urban,
and most dramatically in the rural, areas of the state’ (Bhattacharya, 2010).
Scholars, such as, Bardhan, Mitra, Mookherjee and Nath (2012), associate this
electoral decline with voters’ concerns about the governance failure of Left lead-
ers, while others articulate arrogance, accompanied by a noticeable downturn in
the quality of the leadership (particularly that of Buddhadeb Bhattacharya, chief
minister from 2000 to 2011), as being responsible for the decline (Choudhury,
2011). A third strand of criticism by disenchanted Left members, ex-members and
other supporters focuses on ideological–political contradictions of the parliamen-
tary Left with respect to its approach to neoliberal globalization and the trajectory
of economic development, particularly with reference to industrialization, land
acquisition and informalization of labour (Bose, 2013). Chatterjee and Basu
(2009) assert that the debacle of the Left can be traced to land acquisition linked
to industrialization, which alienated its hitherto stable rural support base. Another
strand of criticism emphasized the ideological contradictions of the Left as
reflected in its economic development policy. Ashok Mitra and Prasenjit Bose
(2003), for example, have argued that the slogan of development is no substitute
for ideology and the Left developmental model essentially reflected an ideologi-
cal and political crisis. The process of economic liberalization that India embraced
in the 1990s, which led to a gradual effort by the Left Front to adopt a pro-market
development strategy, a shift in both its political discourse and policy orientation,
presents another important perspective. The Left parties, led by the CPIM, cham-
pioned the nationwide opposition to neoliberal reforms. They could not, however,
mount an effective nationwide resistance as they only had a significant presence
in three states—Kerala, Tripura and West Bengal—and only the last displayed any
form of political stability.
The above criticisms, although diverse in orientation, all originated from the
Left Front’s engagement with a development approach that it had previously been
Das and Mahmood 3

publicly opposed to, and the question of whether this indicated a deviation from
Left political–ideological lines. However, these accounts mostly focus on the
period of decline (c. 2006–2011), and do little to illuminate the conditions that
precipitated such a turn of events. This literature is also dominated by a focus on
the role of Buddhadeb Bhattacharya as the chief minister (post-2000) in facilitat-
ing this shift (e.g., see Basu, 2007). Bhattacharya repeatedly emphasized the need
to expand the industrial sector as a natural progression of society. Although cate-
gorical in denying the existence of any economic model, he carefully mentioned
the reforms and development in the Chinese and Vietnamese economies, and even
Brazil, to highlight the need for industrialization (Bhattacharya, 2007). His aggres-
sive push for large-scale industrialization is seen as the decisive factor behind the
turn of electoral fortunes of the Lefts in West Bengal.
Although instructive, these reasonings—both economic consideration and
leadership orientated—in themselves are not sufficient to explain the conditions
that brought about the transition. In reality, the Left Front, and particularly the
CPIM, had found itself caught between a rock and a hard place in relation to its
pro-poor policy orientation and emerging market forces ever since the early 1990s.
It had to remain subservient to federal compulsions in terms of policy orientation,
whilst still maintaining a largely contrasting political–ideological line, and at the
same time justifying to its core support base its eagerness to ensure economic
growth and development via a rather market-friendly stance. The explanations
that the party had put forward at the time underplayed the extent and magnitude
of changes, presenting them as unavoidable adjustments precipitated by the
changes in the national economic landscape, rather than a fundamental doctrinal/
ideological transition. However, the economic compulsion argument is only par-
tially acceptable at best, as throughout the 1980s, despite a declining industrial
sector, the CPIM was able to maintain its electoral base thanks to its pro-poor
image (with a marginal increase in vote share and 14 more seats won by the entire
Left Front between 1982 and 1987; see Table 1). Thus, arguments of economic

Table 1. Electoral Performance versus Industrial Development in West Bengal

Seats Won
Share in by Left Front
Ex-factory in Assembly
GSDP Contribution National Vote Share of Elections
Growth from Industry Industrial the Left Front (Major Coalition
Years Rate (%) to NSDP (%) Output (%) (%) Partners)
1980–1985 4.03 29 9.8 (1981) 50.21 (1982) 228
1985–1990 3.82 28 7.9 (1986) 51.00 (1987) 242
1990–1995 5.03 25 6.1 (1992) 47.39 (1991) 241
1995–2000 6.96 22 5 (1997) 48.59 (1996) 202
2000–2005 5.69 18 4.3 (2000) 47.46 (2001) 192
Source: Economic Review, GoWB, various issues & Election Commission of India; [Link]
eci_main1/[Link] (accessed on 5 December 2012).
4 Journal of South Asian Development 10(2)

compulsion alone cannot be an adequate explanation of the transition, nor can

they explain the urge for rapid industrialization.
The central tenet of this paper is to present a set of ideas charting the process
of transition in West Bengal. It attempts to answer the following question: what
were the local political conditions that persuaded the CPIM/Left Front to take
upon itself the task of engineering such a transition? It argues against (i) the often-
repeated (economy-centric) discourse about the transition arising simply out of
compulsions generated by the post-1991 changes in the national economic frame-
work and (ii) the common understanding that the transition actually took shape
owing to the active industrialization strategy pursued during Bhattacharya’s ten-
ure. Rather, as we will show, it was a process, the dynamics of which went far
beyond economic compulsions.
It should also be noted that the shift in West Bengal towards a pro-industry
development agenda, although a part of the all-India decision of the CPIM, was
unique in its pace and orientation as the West Bengal and Kerala state CPIM
election manifestos for the 2006 state assembly elections show. The former was
‘in a hurry to slip into the fast lane’ and the latter reluctant ‘to stray too far from
the slow, beaten track’ (Mazumdar, 2006). The Bengal manifesto, given the
state’s fiscal limitations, focused on attracting private investment and generat-
ing employment through developing industrial parks and townships, special
economic zones (SEZs), and taking full advantage of the central government’s
‘Look East’ policy. The Left Front also categorically stated it would close down
loss-making public sector units (PSUs) if they could not be revived or restruc-
tured, and planned reforms in one of the largest—the state electricity board. By
contrast, while the Kerala manifesto also focused on setting up more industrial
parks, SEZs and facilities for investors, the focus lay in greater state initiative.
It also clearly stated that neither the state electricity board nor other PSUs would
be disinvested and every effort would be made to revive loss-making ones.
While the pro-industry development agenda was an all-India decision of the
party, the particular series of events that occurred in West Bengal was not wit-
nessed elsewhere.
This last point is an important one to acknowledge. The events charted in this
paper recount the story of a political manoeuvring that is unique in its own right
within the larger narrative of reformism in India, and while it can be located
within broader debates about economic transitions elsewhere, the paper con-
sciously refrains from attaching any specific theoretical claims to it. However,
the discussion presented here does throw a new light on the history and current
status of the CPIM within Indian parliamentary politics, along with raising some
wider questions about policy reform. These points have been elaborated in the
conclusion.
The paper has the following structure: the next section explores the nature of
the transition in detail. The following section discusses some of the wider struc-
tural issues that underpinned the transition. The penultimate section presents our
findings, focusing on a dual narrative of instrumental and political–ideological
arguments, followed by a conclusion.
Das and Mahmood 5

Contextualizing the Transition

Soon after coming to power in West Bengal in 1977, the Left Front issued a
Statement on Industrial Policy (Government of West Bengal, 1978), which con-
tained a number of key features in accordance with the ideological orientation of
a Left party. First, the policy repeatedly expressed a militant attitude towards
multinationals and big corporations. These were accused of ‘utilizing the profits
realised from West Bengal’s industries either for supporting the lavish style of
living of the owners and top executives or for setting up industries elsewhere, or
for remitting funds abroad’, and hence there was ‘no question of allowing new
multinationals to come in’ (ibid., pp. 103–105). Second, a revival of the once-
flourishing industrial units of the state was not judged a priority. If the stress of
the policy is on revival, it was argued, then ‘the monopoly houses and the multi-
national companies will be helped in further increasing their grip over the econ-
omy…. This would be wholly against the principles upheld by the Left Front’
(ibid.). Third, there was a strong emphasis on the government’s duty to attempt
to influence central government policy. The Left Front lobbied hard for a ‘major
modification in the allocation of powers between the Centre and the States in
such matters as industrial licensing, the regulation of industries and arrange-
ments concerning institutional finance’ (ibid., p.107).
Following such an approach—commonly referred to as the Left alternative
(which also included land reforms, panchayats and a larger objective of self-
reliance)—the future of industrial development in West Bengal post-1978 seemed
bleak. While agrarian reforms and significant decentralization measures did
improve rural income levels and increased the demand for non-agricultural goods
(Chakravarty & Bose, 2009), the impact on the overall economy of the state was
limited. Between 1980 and 1990, per capita state domestic product (SDP) growth
in West Bengal was extremely sluggish (see Table 2) and it registered one of the
lowest growth rates among the 14 non-special category states in this period (see
Table 3).
Irrespective of such stagnating conditions, the era of concerted economic
reform that India embraced in 1991 (in response to an acute balance of payments
crisis) was a complete antithesis to Left ideology, evoking strong reactions, espe-
cially from the CPIM. Not only did it criticize the new economic policies (NEPs)
but it also accused the preceding regime of having brought the balance of pay-
ments crisis upon the country through its pro-market policies of the 1980s.
Interestingly, although the CPIM as an individual party continued to denounce
the NEP in public at every opportunity, in its guise as a member of the Left Front,
it seemed to accept that some positives indeed came out of it. As Pederson (2001)
writes:

The Left Front government had indirectly acknowledged in its Economic Review
for the year 1992–93 that the freeing of the industrial sector from the compulsion to
seek central government licenses had resulted in an increase in investment proposals
in the state.
Table 2. Per Capita Net State Domestic Products at Factor Cost, 1980–1990
1980–81 Prices
1980–81 1981–82 1982–83 1983–84 1984–85 1985–86 1986–87 1987–88 1988–89 1989–90
Andhra Pradesh 1380 1569 1563 1593 1512 1573 1497 1663 1906 2013
Assam 1284 1402 1437 1470 1447 1510 1437 1468 1446 1517
Bihar 917 947 935 1003 1074 1074 1135 1050 1158 1116
Gujarat 1950 2084 2008 2343 2293 2186 2276 1986 2737 2644
Haryana 2370 2399 2487 2479 2513 2893 2825 2709 3289 3254
Karnataka 1520 1583 1586 1663 1750 1644 1764 1853 1978 2055
Kerala 1508 1469 1485 1406 1473 1507 1453 1482 1614 1705
Madhya Pradesh 1358 1360 1388 1427 1327 1409 1315 1459 1529 1523
Maharashtra 2435 2441 2480 2579 2558 2705 2666 2781 3000 3414
Orissa 1314 1290 1191 1407 1316 1442 1436 1365 1623 1699
Punjab 2674 2875 2906 2904 3073 3249 3302 3410 3526 3730
Rajasthan 1222 1285 1276 1525 1379 1338 1428 1295 1791 1716
Tamil Nadu 1498 1640 1527 1582 1758 1798 1755 1837 1987 2094
Uttar Pradesh 1278 1276 1344 1364 1354 1375 1402 1433 1584 1593
West Bengal 1773 1689 1719 1883 1892 1929 1962 2022 2061 2086
Source: Handbook on the Statistics of Indian Economy (RBI, 2010).
Das and Mahmood 7

Table 3. Per Capita SDP Growth Rate: 1980–1981 to 1990–1991

Position State Growth Rate (%)

1 Rajasthan 5.8
2 Tamil Nadu 5
3 Haryana 4.6
4 Maharashtra 4.3
5 Punjab 3.8
6 Gujarat 3.8
7 Karnataka 3.6
8 Uttar Pradesh 3
9 Andhra Pradesh 2.9
10 Madhya Pradesh 2.9
11 Bihar 2.9
12 Kerala 2.5
13 West Bengal 2.3
14 Orissa 1
Source: Sachs et al. (2002).

The watershed moment of this story came in September 1994, when the Left
Front published a renewed Policy Statement on Industrial Development, which
deviated significantly from the rhetoric of the 1978 Statement. It reads:

The State Government welcomes foreign technology and investments, as may be appro-
priate, or mutually advantageous.… [I]t recognises the importance and key role of the
Private Sector in providing accelerated growth. (Government of West Bengal, 1994,
pp. 7–8)

Consider the following points with respect to the features of the 1978 Statement
discussed earlier:

1. The sceptical and almost militant attitude towards multinationals was com-
pletely reversed, and the state was promoted as an attractive destination for
private capital, both domestic and foreign:
Apart from the presence of large Indian Industrial Houses functioning in the
State, a number of Multi-national Corporations (MNCs) have long been success-
fully operating in the State.... A welcome development is that a good number of
Non-Resident Indians (NRIs), MNCs directly or through foreign Governments
and Indian Industrial Houses have, in the recent past, shown special interest in
coming to West Bengal. (ibid.)

The Statement also declared that all sectors—private, joint and public—
would be treated as effective instruments for mobilizing necessary resources
and expertise in important areas of economic activity, such as, power gen-
eration, communications and roads.
8 Journal of South Asian Development 10(2)

2. Contrary to its earlier claims that the revival of sick industries would
strengthen the grip of the monopolists, the government now promised that
all such units in the private sector would be ‘reopened and rehabilitated
appropriately at the earliest’ (sic) (ibid., p. 14).
3. Finally, a number of policy instruments were introduced to expedite the
process of industrial development,2 which indicated early signs of the
change in government attitude. Other instruments included (a) a proposal
to strengthen the West Bengal Industrial Development Corporation
(WBIDC); (b) expedited decisions and clearances for large and/or conten-
tious projects that needed permissions from multiple departments; and (c)
setting up various committees to ensure rapid decisions regarding land,
employment and other related matters.

The 1994 Statement is the cornerstone upon which the subsequent industriali-
zation drive in West Bengal was based. Along with it, the Left Front also initiated
a number of politically risky shifts, such as, allowing the private sector to enter
the infrastructure, health and even education sectors. The most important institu-
tional change was the reorganization of the WBIDC and appointment of Somenath
Chatterjee3—a senior and widely respected CPIM leader—as its chairman, who
(along with the state’s chief minister, Jyoti Basu) intensified the promotion of
West Bengal as an attractive investment destination through a number of foreign
tours and visits. In spite of the party having long dismissed mainstream media as
‘bourgeois’, post 1994 the government attempted to signal its commitment to the
reform agenda by drastically increasing the volume of interviews and press state-
ments given. In most of his interviews, Chatterjee argued explicitly that address-
ing the credibility problem would require the government to undertake ‘large’ and
‘stronger’ reforms:

Unfortunately there is still the feeling among a section of the industry: Why should we
go to a communist-led state? This should prompt us to be more aggressive in project-
ing West Bengal. We must attract private capital. I don’t see any alternative. (quoted in
Sinha, 2004)

Understanding the Transition

In retrospect, the 1994 Statement marks the first moment of transition in the
political economic history of West Bengal during its 30-year Left rule. For the
first time, an attempt was made to de-link government from politics, albeit
rhetorically. The 1978 Statement was an effort to link the struggle for production
with the ongoing class struggle of the Left parties. The 1994 Statement was, on
the contrary, by and large, apolitical. The focus was on income and employment
generation via industrial revival and growth rather than ‘revolution’ or ‘class
struggle’. Surprisingly though, it was not until over five years later, that the
CPIM ideologues took upon themselves the task of providing a theoretical
justification of this.4
Das and Mahmood 9

It is here that the puzzle lies. What prompted such a de-linkage? The major
coalition partners, especially the CPIM, had entrenched themselves politically,
organizationally and socially throughout the state and were riding high on electoral
performance (see Tables 4a and 4b). Rural West Bengal, by the late 1980s, also
demonstrated modest levels of economic affluence and social/communal harmony.
Why would the government abandon its previously successful political line, and
instead fall in with the central government recommended policy measures—which
continued to be opposed in the public sphere by all the Left parties, even after

Table 4a. Assembly Election Results in West Bengal, 1977–1987

1977 1982 1987

Seats Vote Seats Vote Seats Vote
Won Share (%) Won Share (%) Won Share (%)
Left Front (major
coalition partners)
CPIM 178 35.46 174 38.49 187 39.3
CPI 2 2.62 7 1.81 11 1.92
RSP 20 3.74 19 4.01 18 3.94
AIFB 25 5.24 28 5.9 26 5.84
Congress 20 23.02 49 39.73 40 41.81
TMC – – – – – –
BJP – – 0 0.58 0 0.51
JNP 29 20.02 0 0.83 0 0.16
Source: Election Commission of India; [Link] (accessed
on 5 December 2012).

Table 4b. Assembly Election Results in West Bengal, 1991–2001

1991 1996 2001

Seats Vote Seats Vote Seats Vote
Won Share (%) Won Share (%) Won Share (%)
Left Front (major
coalition partners)
CPIM 189 36.87 157 37.92 143 36.59
CPI 5 1.54 6 1.75 7 1.79
RSP 18 3.47 18 3.72 17 3.43
AIFB 29 5.51 21 5.2 25 5.65
Congress 43 35.12 82 39.48 26 7.98
TMC – – – – 60 30.66
BJP 0 11.34 0 6.45 0 5.19
Source: Election Commission of India; [Link] (accessed
on 5 December 2012).
10 Journal of South Asian Development 10(2)

1994. The contemporary Left literature pays only lip service to this puzzle, which
becomes even more intriguing in light of the policy choices of the Left faction in
Kerala, as discussed earlier.
Soon after the 1994 Statement, a rather ambiguous justification was provided
by the 15th CPIM Party Congress, trying to dilute the scale of change, and reiter-
ating the promise of the Left Front to play a leading role in the nationwide resist-
ance to liberalization. It admitted that it was necessary to take up the mantle of
industrialization given the opportunities presented by the NEP, but:

…doing so does not mean giving up or compromising on our basic strategic goals…
care should be taken to see that our government…[does] not…justify the liberalisation
policies…[Our]…policies should be in defence of the public sector…the government
must clearly set out alternative policies possible…and this should be the basis for our
Party’s propaganda and mobilization. (CPIM, 1995, pp. 100–101)

However, such a proposition was fraught with inherent contradictions,

concentrated mainly in three areas. First, the 1994 Statement itself mentioned
nothing about setting alternative policies. While the Congress statement is
essentially a political one and cannot be expected to cover administrative details,
neither the government nor the CPIM delivered any subsequent plan regarding
alternative policies. Second, promoting state intervention as a political priority
would discourage private capital from coming to West Bengal, which, even the
Congress admitted, was a necessity. Finally, it is not clear why the Left Front
felt it could canvas for private capital while at the same time leading a nationwide
anti-liberalization movement without running a major risk of creating doubt
among potential investors, as well as their own supporters. This statement is
possibly the only formal explanation of the policy transition that the CPIM
provided during the 1990s, but rather than focusing on the de-linkage question,
it attempted to recreate the political sanctity of a pro-labour alternative economic
model, downgrading the shift in policy as necessary ‘adjustments’ rather than a
fundamental transition.
The puzzle, however, remains unanswered. For analytical clarity, let us rephrase
it as two distinct questions: why were the policy changes, irrespective of whether
one labels them as adjustments or transition, necessary? And more importantly,
why was an attempt made to de-link government from politics, contrary to the
Left parties’ ideological discourse and history? The answers to both these ques-
tions constitute the political conditions that brought about the transition. Let us
examine them in turn.

Fiscal and Federal Compulsions

Looking beyond the political overtones of the period, certain facts about the fiscal
condition of West Bengal stand out. By early 1990, its fiscal standing was among
the country’s worst. Table 5 provides a comparative analysis of the cumulative
fiscal indicators of 10 states with maximum revenue deficits over this period. The
Table 5. Fiscal Indicators of 10 States with Maximum Revenue Deficit: 1980–1990

States
Indicators (in ` Crore) WB UP KRL RTN MH GJRT PN TN AP KNTK
Revenue Deficit 1765 911 812 544 522 403 363 363 305 108
Total Revenue Receipt 21603 38172 12765 15505 42742 20575 11140 24941 26680 19786
Own Revenue Receipt 12995 20557 8781 9647 36441 17713 9298 17684 20063 15795
Devolution/Transfer from Centre 9935 22497 4446 7513 12169 6998 5730 8852 9825 6249
Central Transfer as % of Total 39.85% 46.15% 31.21% 37.78% 14.74% 13.91% 16.54% 29.10% 24.80% 20.17%
Revenue Receipt
Total Outstanding Liability 41448 69931 20767 31495 49115 28303 25553 26493 34008 23670
Total Outstanding Liability as % of 191.86% 183.20% 162.69% 203.13% 114.91% 137.56% 229.38% 106.22% 127.47% 119.63%
Revenue Receipt
Total Outstanding Liability as % of 318.95% 340.18% 236.50% 326.47% 134.78% 159.79% 274.82% 149.81% 169.51% 149.86%
Own Revenue Receipt
Total Capital Expenditure 6597 15495 4045 6313 12244 7875 6561 7778 6863 6755
Total Capital Expenditure as % of 28.23% 39.65% 29.79% 39.33% 28.30% 37.54% 57.04% 30.74% 25.43% 33.96%
Revenue Expenditure
Source: Calculated from the Handbook of Statistics on the State Government Finances, RBI, 2010.
Notes: State abbreviation key: WB =West Bengal, UP= Uttar Pradesh, KRL= Kerala, RTN= Rajasthan; MH= Maharashtra, GJRT= Gujarat, PN = Punjab, TN= Tamil Nadu,
AP = Andhra Pradesh, KNTK= Karnataka.
12 Journal of South Asian Development 10(2)

government had to borrow substantially, its total outstanding liability was the
third highest in the country and in terms of debt–income ratio West Bengal was
one of the most debt-stressed states. The government itself admitted that: ‘the
state has been caught in an internal debt trap in relation to the Centre’ (Government
of West Bengal, 1991, p. 94). In effect, the government barely had any cash to
allocate to developmental expenditure. Total capital expenditure in West Bengal
between 1980 and 1990 was a paltry 28 per cent of its total revenue expenditure,
less than all the other revenue-deficit states, bar one. Therefore, the government
had little choice but to court private investments in order to inject a much-needed
momentum into the state’s economy. While the CPIM chose to continue with its
rhetoric of a ‘self-reliant alternative’ in public, the pro-market reforms introduced
by the central government had, in effect, provided the Left Front with an opportu-
nity to induce some economic development (via job creation in the private sector
and development projects undertaken in public–private partnerships) in spite of
its fiscal bankruptcy.
Beyond the fiscal crisis, there was a larger arc of federal compulsions and
political salesmanship that also played a critical role in the process. These argu-
ments stem from the dual conceptual categories of inter-jurisdictional competition
(Sáez, 2002) and provincial Darwinism (Jenkins, 1999). The most overt influence
of the NEP was on India’s industrial policy; abolishing the licensing system trig-
gered intense competition among different state governments to attract private
investment, resulting in ‘a proliferation of tax-incentive schemes and promises of
speedy administrative procedures, expedited land acquisition for new industrial
projects, and efforts to maintain a ‘conducive’ industrial-relations climate’ (ibid.,
p. 134). The long-term outcome of this is what Sáez calls an institutional shift
towards inter-jurisdictional competition among the states, and Jenkins—the par-
tial displacement of centre–state conflict by interstate competition. What is cru-
cial though, from an analytical perspective, is the identification of the political
skills employed by the central government (key cabinet ministers in relevant
departments and high-level bureaucrats) to bring about this shift.
The key issue here, as Jenkins (1999) argues, is that the central government
passed on many of the difficult tasks arising from structural adjustments to the
state governments; by making them the main point of contact for entrepreneurs,
state governments were thus held largely responsible for their own economic per-
formance and so began to compete for private investment rather than lobbying at
the centre as before. Coupled with this was the effect of provincial Darwinism, as
the central government ‘pitt[ed] states against one another, starving states of
resources, and providing new opportunities for patronage and profiteering at the
state level’ (ibid., p. 179).
For the Left Front, this implied a lone fight against central government direc-
tives. Its opposition was further undermined by some non-Congress state govern-
ments implementing the reforms.5 Despite their initial anti-NEP stance, eventually
the Left Front leaders realized its unsustainability and joined in the race for invest-
ment, thus weakening the anti-reform stance of the Left Members of Parliament
(MPs) in parliament. As Jenkins writes, ‘to the extent that discrepancies between
national rhetoric and state-level reality undermine this [nationalist anti-reform
Das and Mahmood 13

rhetoric], it is a blow to opposition efforts to reverse the direction of government

policy’ (ibid., p. 144). With the new industrial policy of 1994, West Bengal was
seen to have finally joined the reform brigade.
While it cannot be denied that these fiscal–federal compulsions certainly con-
tributed to the transition in West Bengal, structural pressures emanating from
broader economic transformation remain a limited explanation due to the non-
incorporation of the role played by political agency in bringing about the transi-
tion. The structural pressure argument provides the exogenous explanations, but
as often argued by Sinha (2005), Sarkar (2006) and Bhattacharya (2011), it needs
to be supplemented by certain endogenous arguments to build a comprehensive
narrative of transition in West Bengal. As these authors point out, despite stagnant
macroeconomic conditions and especially a rather bleak industrial scenario, the
Left Front was able to win repeated elections, largely owing to the extent of its
social penetration (particularly that of the CPIM) that infiltrated and controlled
each and every state institution and dominated large sections of the society (via,
e.g., local clubs; see Roy (2002) for a detailed discussion) and exercised its
influence. Any discussion on West Bengal therefore remains incomplete with-
out due attention paid to the particular political context and key political actors
of the time.

Behind the Transition

Support Base
The idea of a ‘vanguard’ party is one that the CPIM naturally had an inclination
towards. However, in parliamentary democracy, political parties generally tend to
(or at least are expected to) reflect and mediate social demands, acting as channels
of communication between the state and society, playing a pivotal role in mobili-
zation, governance, formulation and implementation of policy (De-Souza &
Sridharan, 2006; Hasan, 2002)). Though theoretically inclined towards the ‘van-
guard’ identity, once in government, the CPIM had to seek to pursue the interests
of their support base and re-electable macroeconomic outcomes. Therefore, in
order to understand the transition of the CPIM, it is necessary to investigate the
nature of its support base.
The Left Front had emerged on the basis of a stable, homogeneous support
base of poor and marginal sections of society, and gained dominancy through land
and radical labour movements. Historically, its social support base was largely
based on the alliance between industrial proletariat, urban middle class, the poor
and the rural peasantry (specifically small–middle peasants and landless labour-
ers) (Chaudhuri, 1987). Catering to the party’s core support base, the government,
once in power, initiated a series of land reforms that somewhat arrested the proc-
ess of de-peasantization by offering small plots to the rural proletariat, secured the
interests of the sharecroppers, improved agricultural productivity by some mar-
gins (Ozler & Datt, 1996; Sen & Sengupta, 1995) and installed a system of local
governance (the panchayats) that did empower the rural population to a certain
14 Journal of South Asian Development 10(2)

extent (Bhattacharya, 2004; Kohli, 1987). The CPIM general secretary, Prakash
Karat, comments:

Right from the outset, the twin policies of implementation of land reforms and…the
panchayat system were the basis for the advance of the CPI(M)…. Successive terms of
the Left Front…expanded and consolidated in these two areas. It is this unique record
of the CPI(M) in advancing the interests of the rural poor which gave it a sound and
stable mass base. (Karat, 2002)

However, this image of rural prosperity conjured by the Left Front, based on
agricultural productivity and land reforms, often celebrated during the early dec-
ades of its tenure by authors, such as, Kohli (1987), Nossiter (1988), Lieten (1996)
and others, has often been a source of contention, with the dominant discourse of
‘virtuous cycle of higher production …[with] a decrease in poverty and polariza-
tion’ (Lieten, 1996, p. 111) being challenged by concerns about ‘how the Midas
touch of growth and reforms might have left structures of poverty and marginali-
zation untouched’ (Rogaly, Harriss-White & Bose, 1995; Roy, 2002, p. 28). The
dissenters have long argued that not only is the agrarian structure in West Bengal
both inequitable and inefficient (Boyce, 1987) but it has also persistently excluded
the rural poor from the largesse of the state (Mallick, 1993). Authors, such as,
Kohli, Nossiter and Lieten, feel that such prosperity among certain sections of
the rural poor is indicative of a shift to a more equitable agrarian structure, but
more recent authors argue that this beneficiary class constitutes a new agrarian
elite enjoying economic and political hegemony (Beck, 1994; Bhattacharya, 1993;
Echeverri-Gent, 1992; Mallick, 1993; Rogaly, 1994; Roy, 2002; Ruud, 1999;
Webster, 1990). This difference in conceptualization stems from, as Roy points
out, the former group’s concern with the disappearance of the large landowners
and an assumption of unity of interest among all other peasants vis-à-vis the
observation of the latter group that the entire middle peasantry section cannot be
lumped together with the large mass of agricultural wage labourers
(Bhattacharyya, 1993). Roy, Bhattacharya and other critics of the Left Front
also point out that the state’s middle peasants are in fact a dominant class in
their own right—West Bengal’s kulaks (Roy, 2002)—but unlike the kulaks in
Marxist narratives, an evanescent presence in the modernist progression from
agriculture to industry, they have not withered away (ibid.). On the contrary, the
Left Front has played a crucial role in reproducing and perpetuating this class,
especially by channelling development resources through the panchayats, which
they dominated (Bhattacharyya, 1993; Herring, 1989; Mallick, 1993; Webster,
1990; Westergaard, 1986).
It needs to be mentioned here that there is a rich literature following from the
above characterization of the Left Front, developed further in the works of Ruud
(1999), Williams (2001), Roy (2002, 2004), Bhattacharya (2001, 2009, 2010) and
many more, providing an in-depth discussion of the evolution of the CPIM into an
all-pervading social entity, intertwined with the everyday lives of the citizenry via
patronage and clientelist structures.6 Though much of this literature is beyond the
ambit of the period and focus of this paper, the larger point here is as follows:
Das and Mahmood 15

hand in hand with continued electoral success and a gradual metamorphosis of the
CPIM into almost a para-legal institution making inroads into all facets of every-
day lives, there was naturally a steady growth in its support base in the rural areas,
not only among small-scale peasants and industrial workers but also across all
classes. In a landmark party plenum in 1979 (commonly known as the Salkia
Plenum), the CPIM reformulated its stance as a revolutionary mass party, which
significantly contributed towards its subsequent rapid expansion. As Bhattacharyya
(1994) points out, such a downward devolution of power gave rise to a rural mid-
dle class, who came to control this power through the panchayats, a practice justi-
fied within the CPIM in terms of the political–organizational perspective of
democratic centralism. The composition of this class cut across all forms of tradi-
tional class, caste, religion and other social boundaries in Bengali society. Drawing
upon an identity solely inherited from political allegiance, its membership ini-
tially centred on full-time party workers and local leaders, but then extended to a
much wider circle of ‘proletariats’ as identified by the party. This included gov-
ernment employees, schoolteachers and government contractors, as well as mid-
dle and rich peasantry. In fact, the CPIM party programme provides a clear
guidance on the class composition of such a consolidation of forces:

…the core and basis…is the firm alliance of the working class and the peasantry…. The
agricultural labourers and poor peasants…will be basic allies of the working class. The
middle peasantry too…[will be] reliable allies. The rich peasantry is an influential sec-
tion of the peasantry…at certain junctures, they can also be brought in…. The large
number of white-collar employees, teachers, professionals, engineers, doctors and new
strata of intelligentsia constitute a significant and influential section…every attempt
should be made to win them…. (Updated Party Programme, 2000, p. 46)

However, two parallel phenomena made it rather difficult for the CPIM to
translate the pressures from this expanding rural support base into any policy
mechanism. First, this expansion of party membership was not mirrored in the
urban constituencies, owing largely to a declining industrial proletariat caused by
industrial stagnation and disenchantment with party domination (see Tables 6a
and 6b). This phenomenon is reflected in both critical perceptions that often point
out the increasing anti-incumbency in urban and industrial areas and the electoral
records of the period (Chakrabarty, 1998).
Second, this spatial shift was not accompanied by an associated shift in the
traditional cultural and ideological dynamics in which the traditional middle/
upper classes and castes continued to maintain its hegemony. Politics in West
Bengal has long been dominated by the bhadralok across political parties (the rise
of Trinamool Congress recently has raised questions about the hegemony of the
bhadralok; however, given the historical period this paper is trying to re-evaluate,
the bhadralok was certainly at the helm of the political class). The bhadralok,
literally meaning ‘a gentleman’, is a term originally used to denote a new social
class that arose during colonial times, and was largely confined to members of the
middle/upper-middle classes and castes of Bengal. According to Sinha (2005), the
social position of the bhadralok—in urban/governmental professions—and its
16 Journal of South Asian Development 10(2)

Table 6a. CPIM’s Seat Share (%) across 120 Assembly Constituencies with Urban Local
Bodies, 1977–2001

Year CPIM Left Front (total)

1977 64.2 83.3
1982 56.7 73.3
1987 58.3 75.8
1991 56.2 72
1996 44.8 56.5
2001 40.8 53.2
Source: Authors’ calculation based on the election statistics of 120 assembly constituencies in West
Bengal with Urban Local Bodies (ULB). The list of ULBs is derived from the website of the
Department of Municipal Affairs, Government of West Bengal. Only those constituencies
that have ULBs since 1977 have been selected to enable comparison. For complete list see
[Link]/PDF/[Link]. The electoral data is derived from Election Commission of
India reports, various issues.

Table 6b. CPIM’s Seat Share (%) across 38 Assembly Constituencies within Industrial
Belts, 1977–2001

Year CPIM Left Front (total)

1977 73.7 94.7
1982 63.2 86.8
1987 68.4 89.4
1991 52.6 68.3
1996 55.3 68.4
2001 47.4 60.5
Source: Authors’ calculation based on the election statistics of 38 assembly constituencies in
West Bengal that fall within industrial belts. The selection of constituencies is derived
from West Bengal Industrial Development Corporation’s report on Industrial regions
in the state ([Link]/about_wb/industrial infrastructure). Broadly the Industrial
belt comprises of the following regions: Siliguri, Diamond Harbour, Kharagpur, Asansol-
Durgapur, Calcutta (North and South), Dankuni. Falta, Haldia, Bantala, Howrah (North-
South), Titagarh, Khardah, Uttarpara, Ranigunj, Nalhati and Murshidabad.

middle class status with a historic legacy of cultural renaissance, nationalist fer-
vour and Marxism induced ideas significantly radicalized the ideational discourse
in the state. The near-complete domination of the bhadralok meant business as a
class and liberal capitalist model of development was held suspect in the wider
political discourse. The composition of MPs from West Bengal hints at the extent
of this domination (Figure 1), as the majority of MPs belong to the four upper
castes: Brahmin, Kayastha, Kshatriya and Vyasya (a high Scheduled Caste/
Scheduled Tribe (SC/ST) proportion is largely due to constitutionally ‘reserved’
positions).7 A similar trend can be observed if one examines the MLAs, state cabi-
net ministers and even key post holders within the political parties.
350

300

250
Congress
200 Left Front

BJP
150
AITC

AIFB
100
RSP

50 Total

0
Total

OBC

Vyasya
SC_ST

Muslim
Others

Mahisya

Brahmin
Kayastha
Kshatriya

Figure 1. Support Base Derived from Caste and Party Affiliation of MPs, 1980–2004
Source: Authors’ calculation based on Who’s Who of Lok Sabha; Lok Sabha Secretariat.
18 Journal of South Asian Development 10(2)

The cultural hegemony of the bhadralok finds expression in the fact that the
expanding rural middle class was an issue of concern within the CPIM itself. Anil
Biswas (2003), the West Bengal party secretary (and Left Front chairman), com-
mented that post Salkia Plenum there was a significant dilution of party member-
ship as not enough emphasis had been attached to improving the standard of
members. In fact, the party Central Committee in a 1996 report highlighted the
circumstances that led to such errors and deviations, particularly the predomi-
nance of the petty bourgeoisie and the bourgeois within a quasi-feudal ambience,
economic liberalization and the spread of its innately unequal and perverted con-
sumerism, emergence of sectarian and fundamentalist forces and induction into
the party of very many people who are devoid of the proper outlook on the basic
party stance. According to Biswas (ibid.), countering these tendencies would
require a long-term and vastly difficult struggle, which was either often compro-
mised by or tended to accommodate the existing circumstances favourable to the
bourgeois system and the bourgeois moralities.
When viewed in this light, a critical insight may be gained into the policy
transformation of the Left Front. Sinha (2005) argues that the reason the Left
Front could win elections despite the gradual economic decline and pursue a
policy of confrontation with the central government at the cost of investment,
was the unique political dynamics of the state, which rewarded sub-national
tendencies and offered little space to industrial interests in its politics. In spite
of the pressures of a growing middle class, the party could afford not to make
overt efforts towards improving the industrial climate of the state, owing to (a)
its declared ideological position and a generic suspicion towards the business
class and (b) the political dynamics of the licence-raj era where the blames of
an industrial decline could be shifted to the central government as a discrimina-
tory attitude on the latter’s part (what Sinha calls a partisan confrontation
strategy).
However, the situation could not remain so following the NEP, as it changed
the structural dynamics of political mobilization, constricting the space for oppo-
sitional politics by dismantling the licence-raj system. An already-handicapped
industrial situation, with declining employment opportunities for an expanding
professional class, now intensified its pressure on the government. Given that
tactically the CPIM had shifted its attention status from a party of industrial pro-
letariat to that of farmers and sharecroppers, limitations of land-reform-led growth
(agrarian growth reached peak in 1980 and showed decline in the 1990s) also
exerted pressures on the government. According to Bhattacharyya (1994), rapid
commercialization of the rural economy with declines in agricultural income,
withdrawal of most support structures that were available in the forms of input
and output subsidies and de-peasantization led to demands for opportunities out-
side agriculture especially by the younger generations. New demands were placed
for education, skill, network and food supply, in all of which the infrastructure
was thoroughly inadequate. It was only after the limitations of agrarian expansion
and the socio-economic transformation in the Left’s support base became promi-
nent during the 1990s, that the need for increased industrial investment was trans-
lated into policy.
Das and Mahmood 19

This found resonance across the state, as the criticism of the Left Front, ema-
nating especially from the urban and emergent rural middle classes during the late
1980s/early 1990s usually centred around the lack of development.8 This outlook
is aptly summed up by Mukherjee (2007), pointing out that the Bengali bhadralok,
which prides itself on education, culture and intelligentsia, increasingly found a
stifling mediocrity buttressed by political power calling the shots in all fields. It
was this increasing pressure from the educated middle-class constituency (within
the leadership as well as the support base) for ‘development’, on the one hand,
and a declining agricultural scenario, on the other, that acted as an important
impetus for policy transformation. In the absence of any serious alternative devel-
opment programme, the Left Front undertook policy transformation in favour of
market-led development similar to that followed by other states and in direct com-
petition with them.
In summary, the NEP had provided the state with an opportunity to pursue
industrialization without central intervention, but one of the major reasons behind
the translation of that opportunity into policy was the pressure of its socio-eco-
nomic support base. The electoral verdict of the 2001 assembly elections, pro-
jected as the referendum for industrialization, goes somewhat to endorse our
analytical understanding. Analyzing the results, Das (2001, p. 2116) shows that in
urban constituencies the middle class demonstrated its new-found support as the
Left was victorious in 30 out of 64 seats, compared to 1998 and 1999 parliamen-
tary elections where it was ahead, respectively, in only 13 and 18 assembly seg-
ments within the same urban conglomerations. In the industrial regions, the Front
won 42 of 81 seats, again bettering its 1999 performance, albeit only by five seats.
A plausible reading of these numbers is that the structural pressures for invest-
ment were indeed augmented by the transformations in the support base of the
government.

Ideological Debates and Factional Pressures

The above transformations find equal resonance in the ideological doctrines of the
Left. On the ideological front, certain ambiguities emerged within the CPIM dur-
ing the late 1980s/early 1990s. These took two specific forms. First, the party’s
role in promoting a Left alternative versus its long-term governmental duties and
second, the collapse of the Soviet Union and associated ideological implications,
along with the Chinese economic take-off.
The ideological discourse of the CPIM provides the fundamental guidelines
for all its political and policy decisions. This discourse was built upon an under-
standing that on the way to a people’s democratic revolution (the party’s declared
objective), the party might have to occupy power for a transitional period with
the aim of distributing immediate relief to the people. However, although the
party had been contesting elections since the 1950s and was the majority partner
in the two short-lived United Front governments in West Bengal in 1967 and
1969, no consensus was ever reached (or even attempted) on what its duties would
be if it came to hold power over a longer period.
20 Journal of South Asian Development 10(2)

When the Left Front came into office in 1977, there was an overt feeling within
the CPIM, as well as its coalition partners, that this would not be long-lived.
Coming out of a five-year long national emergency, many Left leaders harboured
a deep suspicion of the Congress government at the centre and believed that it was
only a matter of time before the centre overruled state governments. Therefore, it
was assumed that the Left Front, an alliance brought into existence specifically to
contest this election, would be short-lived but nevertheless would take the oppor-
tunity to further its political goals using the governmental institutions. In the
words of Jyoti Basu:

neither did we ever believe that we would form a government, nor did we imagine
that once formed, our government could stay in power for so long...[also] we were not
certain about what such a regional government would achieve within the capitalist and
bourgeoisie parliamentary system of our country. (introduction to Sen, 2008)

Therefore, compared to the more politically attuned tasks of land reforms and
panchayati-raj, industrial revival was not judged a priority in 1977. The 1978
Statement was demonstrative of the deep suspicion that the Left leaders harboured
towards big businesses and industrial houses, both politically and culturally.
This attitude paid rich dividends in the first five to seven years of the Left
Front’s rule, but while the political gains largely compensated for the economic
worries of the state, the situation gradually started to change from the mid-1980s
onwards. With the gradual stagnation of land reforms and the party well entrenched
in most of the panchayats, political activism surrounding these two major institu-
tions had reached a low-level equilibrium, and in the absence of fresh ideas the
party was gradually entering into political torpor. At the same time, the prospect
of being in power long term, or at least longer than initially expected, had begun
to dawn on the CPIM. This created a rather challenging situation for the party
inasmuch as: it had the chance to enjoy a longer stint in office, but had no guid-
ance from its ideological discourse on what its long-term duties should be; it was
not clear how to combat the pitfalls of parliamentary participation (such as suc-
cumbing to reformist tendencies) which would certainly infect the party if it
stayed in power for any length of time; and, if the party remained associated with
a bourgeoisie parliamentary system for too long, this might hinder the prospects
of the people’s democratic revolution.
Under pressure from such conflicting ideological positions, by the mid-1980
debates had started to emerge within the CPIM over its long-term governmental
duties. At the forefront were the dual issues of industrial development and attitude
towards private capital. These were formally voiced at the 12th Party Congress
(1985), where the issue of economic development (as an independent subject
rather than intertwined with the political agenda) was discussed at great length for
the first time.9
It appears that the above-discussed contradictions in ideas had initially sur-
faced from a sense of an ideological void within the party, which came to light in
the face of the trade-off between political longevity and revolutionary character.
While the debates pertaining to it were largely confined to the higher echelons of
Das and Mahmood 21

the party during the time of the 12th Congress, they became significantly more
widespread after the shock of the Soviet disintegration, the CPIM having pledged
its allegiance to the CPSU as late as 1988–1989. The opening lines of the 14th
Party Congress confirm this:

The international situation in the period after the 13th party congress has been a...
difficult one…. The reverses suffered by socialism in the Soviet Union and earlier
in Eastern Europe have altered the world balance of forces in favour of imperial-
ism…. Though significant changes began taking place in the socialist countries and
in many Communist Parties by the time of the 13th Congress of the party, we failed to
grasp their deep implications then. Hence the subsequent developments…were quite
unexpected. (Communist Party of India (Marxist), 1992)

This was a serious setback. While the debates surrounding the party’s role in
the government were already in full swing, their gradual pace would not have
induced any drastic change whereas the Soviet disintegration dealt a blow to the
larger theoretical framework it operated within. The 14th Party Congress there-
fore had to make a formal attempt to re-evaluate the existing ideological dis-
course. The Congress adopted a resolution on ‘Certain Ideological Issues’, which
admitted, ‘the complexity of the situation and issues being questioned, encompass
the history of nearly a century of human civilisation. This demands a wide, exten-
sive and in-depth study’ (ibid., pp. 91–92).
This resolution was one of the most significant in the history of the CPIM, as
for the first time it admitted a fallacy in its understanding of the nature and poten-
tial of capitalism. It stated:

In retrospect, it can be said that the general crisis of capitalism was simplistically under-
stood. The historical inevitability of capitalism’s collapse was advanced as a possibility
round the corner. This was a serious error…while the socialist revolutions reduced the
physical size and levels of operations of the world capitalist market…these basically
affected neither the levels of productive forces already attained by capitalism nor its
future potential. (ibid., pp. 94–96)

This introduced a fundamental change in the party’s ideological discourse.

While a detailed critique is beyond the purview of this paper, it is important to
note the political line that the party assumed henceforth. The debates leading up
to the 14th Congress and the resolution on Certain Ideological Issues provided the
CPIM with an ideological middle ground. Having admitted that a socialist revolu-
tion was not imminent and that some means of co-existing with capitalism needed
to be found, it was now possible to weave the logic of capitalist production into the
operational principles of the party. The government could be given license to pro-
mote a more industry-friendly attitude and concentrate on basic development duties
without appearing to lose its ideological character, and at the same time the party
could continue protests against the economic reforms. The economic growth taking
place in China further strengthened this argument in the transitional phase.
Finally, the 1991 economic reforms led to a serious setback to one of the cor-
nerstones of the CPIM’s political line—its partisan confrontation strategy based
22 Journal of South Asian Development 10(2)

on accusations of a discriminatory attitude on the part of the central government,

particularly regarding its licensing policy (Sinha, 2004). The NEP made the ear-
lier accusations entirely redundant and took the steam out of the party’s anti-
centre rhetoric. The government was left with no option but to acknowledge that,
‘while continuing to advocate a change in some important aspects of this New
Economic Policy, we must take [its] fullest advantage’ (Government of West
Bengal, 1994, p. 6).
These changes indicate that, by early 1990, the CPIM had begun to accept a
Chinese-style economic model and withdraw some of its earlier radical stances
against private capital. The 14th Congress provided the necessary ideological
legitimacy for such a change in attitude. Although the party continued its opposi-
tion to the economic reforms via protests and demonstrations, as far as its govern-
mental duties were concerned, it was slowly coming to terms with the changing
situation.

The Role of Jyoti Basu

The above discussion shows that long before the 1994 Statement was even con-
ceived, the higher echelons of the party and the government were embroiled in
debates over an industrialization-based development agenda. While a policy tran-
sition eventually took place in 1994, the ambivalent ambience present might have
continued much longer had it not been for the chief minister, Jyoti Basu. His role
in the process deserves special attention.
Basu was seriously criticized for his government’s policy indecisiveness.10 He
was usually seen to be entirely subservient to the party, turning a blind eye towards
the state’s stagnating economy and never interfering with party diktats, even if
they disrupted government services (such as calling strikes frequently). However,
while his inability to rise above party priorities was seen as a serious drawback,
his individual initiatives to attract investments were appreciated. Saugata Ray, a
senior Congress MLA of the time, said of him: ‘Mr. Basu is constrained by his
party. While he has been trying to attract investments, the party is pulling him
back’. Ray went on to praise Basu for a shift in outlook and attitude: ‘while at one
point he was against modernisation of factories, today he is welcoming foreign
technology and joint collaboration’.
Basu played a rather pragmatic role in bringing about a discursive shift in both
the party and the government’s attitude towards industrialization, while keeping it
separate from ideological conundrums. His chief political assistant (1987–1996)
and one of his closest aides admits:

It was unthinkable in those years for a government officer to even hold a private meet-
ing with a businessman. But Mr. Basu used to attend Chamber of Commerce meetings,
meet industrialists outside government offices and even accept private invitations from
them. Gradually, he started to get rid of the sensitivity about the industrial class. It was
perhaps his biggest contribution to initiate a change in the culture of viewing businesses
and businessmen as untouchables.11
Das and Mahmood 23

Basu’s Chief Secretary (1991–1996) recalls: ‘he never felt that he has deviated
from the Left ideology…essentially it was never a question of ideology to him,
but rather an administrative and pragmatic decision’.12 Basu was successful in
keeping the criticism from certain factions that an industrialization agenda is a
deviation from the idea of a Left alternative isolated within the party and the cabi-
net. The greatest example of such political acumen was the formulation of the
Policy Statement in 1994. While the CPIM was engaged in vehement opposition
to the NEP at a national level, Basu had started to meet investors and campaign
for West Bengal. The request for a formal policy was made to him during these
meetings. He wrote: ‘when we were visiting the various Chambers of Commerce
and inviting people to invest in the state, they requested us to present a policy
statement explaining our approach towards industrial development’ (introduction
to Sen, 2008)
Undoubtedly, this was a rather challenging task. In spite of the resource crunch,
ideological debates and the gradual changes in mindset, the party was yet to take
a decision on its attitude towards large-scale industrialization, and would hardly
be amenable to the idea of the government formally courting private capital with-
out party approval. Therefore, anticipating opposition, Basu prepared the
Statement with the involvement of only a very small group of bureaucrats (which
included both Basu’s chief political assistant and chief secretary)—in what was
perhaps the first and only instance of its kind during the entire Left Front period—
the party being kept entirely in the dark. The initial draft was prepared by Basu’s
chief secretary, who admits that ‘…it was not discussed in the party, or even in the
Left Front cabinet’.13
Basu’s pragmatism continued: without prior notification to the party or cabi-
net, the Statement was tabled directly in the Legislative Assembly (as the last item
of the day) on 23 September 1994, just one day before the House closed. The
records of the next day show that the Statement was adopted with minimal discus-
sion, and possibly, with very few members even realizing its significance. In fact,
a joint motion was brought against the NEP by two CPIM MLAs, Rabin Deb and
Lakshman Seth, which was, to a large extent, quite contradictory in tone to the
Statement. In response, Subrata Mukherjee (a Congress MLA) commented: ‘plac-
ing this motion just a day after the new industrial policy has been introduced
highlights the bankruptcy of the Left Front…. This policy is Mr. Basu’s policy,
not the Left Front’s.’
One assumes that the timing and secrecy of the Statement was a deliberate act.
As Basu’s chief secretary noted: ‘Had the Statement been flagged up in the Left
Front meetings prior to it actually being written, then the whole thing would have
been delayed, or perhaps never achieved.’14
Once the Statement was adopted, it created serious confusion within all the
Left parties. The 15th CPIM Party Congress, held a year later, noted: ‘This state-
ment…was placed without any discussion in the state committee or central com-
mittee and…created confusion and apprehensions in Party circles’ (Communist
Party of India (Marxist), 1995, pp. 98–99).
Basu appeared to try to pacify his colleagues by promising that the policy
would be discussed in detail in the cabinet and, given his authority and stature as
24 Journal of South Asian Development 10(2)

one of the most respected Left leaders in India, it was highly unlikely that any
member, even from another party, let alone the CPIM, would disagree with or
question his decisions, at least in public or on the floor of the assembly.15 While
some questions were raised behind closed doors within party circles and cabinet
meetings, those hardly went beyond Basu’s reassurance of a ‘future cabinet dis-
cussion’, as nobody would have wanted to be seen questioning Basu any further.
Therefore, no formal opposition ever took shape against the Statement. The prom-
ised discussions never happened, and gradually the initial apprehensions and con-
troversies dissipated. Hafiz Alam Sairani (former West Bengal State Secretary,
Forward Block), a minister in Basu’s cabinet, confirms this:

We did not even know about the Statement. Once it was passed in the Assembly, we
raised our opposition in a cabinet meeting. But Mr. Basu said that the statement has not
yet been implemented, and there will be further discussions. No one questioned him.
But no discussions followed. And none of the other Left parties pushed for it.16

The only formal discussions that took place were in the CPIM politburo and in
a Central Committee meeting a month later. Justifying his decision in these meet-
ings, Basu stated that given the Left movement’s current position in West Bengal
(having achieved a certain degree of progress, but struggling with a serious eco-
nomic crisis, the added compulsions of a wider federal shift towards a liberalized
regime, and above all with no imminent socialist revolution), there was no option
for the state government but to make certain adjustments in relation to the capital-
ist system, even if politically it might seem a reformist deviation.
After these discussions, the 15th Party Congress upheld the promise that the
party in West Bengal would continue to play a prominent role in the nationwide
resistance to liberalization, but at the same time approved the policy statement on
industrial development as its official position. The ideological stamp of the Party
Congress was the final hurdle in the transition process. It was a process that, in
retrospect, stands as a classic example of Jenkins’s conceptualization of political
salesmanship, reform by stealth (Jenkins, 1999), orchestrated by one of the lead-
ing Left leaders of India and the chief minister of West Bengal.

Conclusion
Recalling the two questions whose answers constitute the political conditions of
the transition phase: why were the policy changes necessary? And why was there
an attempt to de-link government from politics? The answers can be summarized
as follows.
The conditions that precipitated the changes stemmed first and foremost from
the financial and political impasse the Left Front was in by the mid-1980s. This
was the result of a misplaced notion about the transitory nature of the government
and being guided entirely by a political agenda instead of working on a long-term
developmental plan. However, once the CPIM realized that there was a possibility
of the government remaining in power for longer, involving private capital in
Das and Mahmood 25

some form was deemed the only possible way forward. The debates over joint
ventures during and after the 12th Party Congress indicate the gradual accept-
ance of such an eventuality. However, these early changes were still only theo-
retical, while the actual resource crunch on the government was steadily
assuming alarming proportions, coupled with a gradually stagnating agricul-
tural scenario, and an intense pressure from an expanding support base. The
party was thus confronted with the additional challenge of formulating an ideo-
logical middle ground where the government could be seen to be pursuing a
private capital induced mode of economic development, but without losing its
revolutionary character and at the same time, trying to avoid the inevitable criti-
cisms. This marked the beginning of an ambivalent attitude in the policy-making
sphere as, instead of rising to the challenges, the government adopted a ‘one
step forward, two steps back’ approach towards private capital and industrial
development. As Mukherjee (2007, p. 2) writes:

Since the Left’s imaginary, ideology and strategy was centred on revolution, once it
moved away from militancy...it simply did not know what to do. It was a collective failure
of imagination and creative and critical thinking on the part of the CPM. They completely
ran out of ideas…[and] just clung on to Marxism as a set of rituals and mantras.

The 1990s brought with them a way out via two largely unrelated events—the
Soviet disintegration and the announcement of the NEP—which together gave the
CPIM a way to formulate a middle ground. It now had the opportunity to be seen
in public as opposing the NEP and not having relented to the imperialist forces,
thereby retaining its political character. At the same time, it could start weaving
the logic of capitalist production into the government’s policies, having admitted
to a theoretical misjudgement of the imminency of a socialist revolution and the
undermining of the resilience of the forces of capitalism. In other words, it was
now possible for the government to keep its ideological opposition alive at the
all-India level, and justify its actions in the state by citing the unavoidable com-
pulsions placed on it by recent developments on the national and international
horizons. The 1994 Policy Statement on Industrial Development could, therefore,
be seen as an eventual outcome of the political choices of the time, rather than a
stand-alone policy exercise. However, the outcome could have been delayed much
longer had it not been for Jyoti Basu. His clandestine manner in introducing the
policy while ideological debates were still raging at large within the party man-
aged to minimize wider awareness of the potential significance of the changes. As
a result, while the policy was approved in the 15th Party Congress, the party con-
tinued to perpetrate the standard excuse of blaming federal pressures as having
left the state government with no choice. It never examined the nature of these
pressures or openly admitted the extent of internal ideological modifications.
This is also exactly what prompted the de-linkage attempts. Admitting a theo-
retical misjudgement was bad enough, but to admit that the government was no
longer an instrument of class struggle, and was trying to adjust to market forces
instead, would be politically suicidal. It would then be accused of, at best, having
completely given way to reformist pressures, and the entire Left movement in the
26 Journal of South Asian Development 10(2)

country would be undermined. Therefore the party had to argue, at least publicly,
that the changes in West Bengal were confined to a realm of regional governance
compulsions, while politically remaining disassociated with a pro-market devel-
opment agenda.
Industrial development in West Bengal under a relatively more industry-
friendly environment from the second half of the 1990s onwards has been written
about extensively. In particular, the mainstream literature that emerged after the
rapid electoral decline of the CPIM/Left Front post 2008, along with media
reports and an increasing feeling within a section of the CPIM itself, often
attributes the 2011 defeat of the Front to the ‘political cost’ of pursuing a strategy
of industrial development in a state historically dominated by small and medium
peasantry. While such a theory is only partially true at best, industrial develop-
ment in West Bengal is usually perceived to be a rather recent phenomenon,
gathering pace only after 2000 under the leadership of Buddhadeb Bhattacharya,
thereby accusing him of having brought this ‘cost’ at the party’s door. The reap-
praisal presented in this paper argues to the contrary, raising questions about
such a portrayal, as the preconditions that prompted the Left Front to start on the
path of an industrialization-based development agenda have rarely been scruti-
nized. This narrative presented here demonstrates that the seeds of a policy
change were sown prior to 2000—and as early as the mid-/late 1980s—and
involved a complex set of circumstances, combining a wider set of fiscal and
federal compulsions with internal debates and negotiations, factional pressures,
political salesmanship and a reorientation of some of the previously upheld ten-
ets of Marxian principles. While Buddhadeb Bhattacharya certainly expedited
the process, he was not its architect, having ‘inherited’ an agenda with its core
dynamics already in motion.
Finally, it is possible to draw certain wider conclusions about party transforma-
tion from the West Bengal story. In general, both exogenous and endogenous fac-
tors explain party strategy change (Harmel & Janda, 1994; Katz & Mair, 1995;
Kitschelt, 1994; Levitsky, 2001; Panebianco, 1988; Strom, 1990). Neither is suf-
ficient, but both are necessary elements of any explanation. As Samuels (2004, p.
1001) points out, exogenous environmental factors can ‘set the stage’ by describ-
ing whether political space exists for parties to attempt to move in the political
spectrum, but one also needs to explore parties’ internal dynamics to obtain a
complete explanation of party strategy change. The analysis presented in this
paper sits perfectly well with such an observation, as it revolves around a set of
specific exogenous (fiscal) and endogenous (support base pressure and factional
struggles) factors, ideological contradictions and political salesmanship. The West
Bengal story, while being unique in its own right, thus also represents a micro-
cosm for the study of a set of puzzles that has much to say about similar economic
transitions among Left/pro-labour parties elsewhere, particularly with regard to
how large-scale macroeconomic policy decisions are negotiated at ground level,
and how such acts of negotiation are intensely political both in its formation and
agency. In this sense, further work on this research can blend itself into broader
instances of political transformations in other parts of the world. For example, the
gradual deradicalization of Latin America’s largest leftist party—the Workers’
Das and Mahmood 27

Party (Partido dos Trabalhadores (PT)) that came to power in Brazil in 2002 with
a far more moderate stance than before—presents a similar scenario of transfor-
mation of a party17 from ‘socialism to social democracy’ owing to a series of
exogenous and endogenous factors (Samuels, 2004). Similar historical arcs also
exist in China; East Asian countries, such as, Vietnam and North Korea; Russia
and other Eastern European nations; and other Latin American countries, such as,
Cuba and Venezuela. Thematic parallels can be found in Thatcherism in England,
or more recently, in the way the Labour Party seeped into the ideas of New Labour;
the transformation of the Italian communist party, etc. There remains, of course,
an issue of degree intrinsic to such ideas. Not everywhere are the contradictions
as intense, reactions evoked as sharp or outcomes determined as similar.
This paper shows that even ideologies can be reshaped in the search for appro-
priate ways to negotiate transition efforts, stepping way beyond prudent economic
management (while the latter is crucial indeed, as demonstrated in detail by Moore
(1997), it is not the whole story). Particularly for Left/pro-labour political parties,
with their own history and development orientation to conform to, the task of
negotiation neither happens on the basis of economic incentives alone, nor remains
a sole question of forming coalitions to counter collective action or distributive
problems. Instead, it becomes the much more difficult undertaking of justifying a
form of change that is nothing short of a radical transformation—not only in terms
of policy but also in the realm of ideas, political rationality, historical and ideo-
logical legitimacy. Transition initiatives, in such circumstances, transgress the
idea of ‘reforms’ as matters of economic prudence or good governance, and
become what may be described as negotiating an act of political audacity against
the very rationale from which the political movement derives its legitimacy.

Notes
1. Between the 2006 and 2011 elections, the CPIM’s vote share reduced from 176 to 40.
2. For example, an incentive scheme for new as well as expansion of existing units,
tax concessions announced in the 1993–1994 state budget, streamlined and simplified
sales tax laws and procedures, etc.
3. He later went on to become the parliamentary speaker, but was eventually evicted
from the party in 2010.
4. An updated party programme was published in 2000 in response to some of these
debates.
5. For example: the then Shiv Sena government of Maharashtra led by Manohar Joshi,
and (though slightly later) the Telegu Desam government of Andhra Pradesh under
Chandrababu Naidu.
6. Harihar Bhattacharya (1998, 2002), for example, shows how the CPIM had taken over
almost every aspect of the village life through a total domination of the panchayats,
successfully manufacturing political consent and allegiance as a result, and Dwaipayan
Bhattacharya (2001) discusses the role of (party supported) school teachers in
providing a form of moral legitimacy to the party’s all-encompassing presence. Equally
important is Roy’s (2002) work illustrating a similar development in urban/semi-urban
areas, where the CPIM was able to control innumerable local clubs, and garnered
political allegiance through illegal colonized settlements. These works highlight
how a continuous process of manufacturing consent and allegiance via a wide range
28 Journal of South Asian Development 10(2)

of political tactics, negotiation, and even force, has been an important determining
feature of the CPIM regime, a process that continued well into the 2000s.
7. An ‘elite stronghold’ (wealthy, high-caste, and often male politicians) over decision-
making structures is however not an uncommon phenomenon in Indian party politics.
It is often commented that Indian parties are organizationally weak (Chhibber, 2013),
symptoms of which are also said to include a lack of internal democracy and a tendency
towards ‘dynastic rule’ (Hasan, 2010, p. 251). See, for example, Manikandan and Wyatt
(2014) for a detailed discussion of how such elite formation took place within the Dravida
Munnetra Kazhagam (DMK). Especially as far as underrepresentation of the SC/ST
population is concerned, the authors point out that ‘the small number of Dalits holding
party posts, begs the question of what would happen to the representation of Dalits in the
DMK in the absence of official quotas. It is very likely that even fewer Dalits would be
offered nominations to contest assembly and parliamentary seats’ (p. 50).
8. Anadabazar Patrika, the leading vernacular daily, was at the forefront of such
criticisms.
9. It should be noted that from the mid-1980s, the Left Front started to gradually
engage with private capital. Two of the earliest and most publicized ventures were an
electronics complex involving Philips and the West Bengal Electronics Development
Corporation, and a petrochemicals complex at Haldia. There were a number of other
smaller proposals as well.
10. The criticisms were not only political. For example, Besley and Burgess (2004)
show a causal link between Basu’s pro-worker policy reforms and the decline of the
manufacturing industry and a rise in urban poverty.
11. Interview, 18 June 2009, Calcutta.
12. Interview, 29 June 2009, Calcutta.
13. Ibid.
14. Interviews, 3 July and 29 June 2009. Calcutta.
15. While in a regimented party like the CPIM it is unusual for an individual to gain
a heightened status, Basu was an exception. One of the most senior Left leaders of
the country, he was a charismatic figure who had risen through the ranks rather than
‘starting at the top’. He was also one of the oldest members of the CPIM politburo
from the time of the party’s formation in 1964.
16. Interview, 24 June 2009, Calcutta.
17. See Hunter (2010) for a detailed discussion of transformation of the PT.

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