The country needs a national debate in order to reach a consensus on an appropriate economic policy and it will be helpful if the protagonists of different viewpoints resist, the temptation to quote and Gandhiji and Mr Nehru in their support.
Since the two leaders wrote voluminously over a long period, spanning more than four decades, in each case appropriate quotations can easily be found to defend almost any proposition. Also, they were the products of their environments and they were responding to specific challenges, both of which have changed dramatically. Thus, unless we wish to engage in an abstract and sterile debate with little regard to the concrete problems facing the country, it is futile to refer to what Gandhiji and Mr Nehru said and wrote in very different circumstances.
That this is true about Gandhiji should be evident enough. For, even ardent Gandhians cannot fail to recognise that India is no longer almost wholly an agricultural country as it was during Gandhiji’s life-time. Industry already contributes almost as much as agriculture to the gross national product. Indeed, India not only occupies the ninth or tenth place in the world in this regard but has also achieved self-sufficiency or near self-sufficiency in basic fields like metallurgy, chemicals and transport at a fairly high level of technology. It does not produce enough power. But it can fabricate its own power plants. Indeed, it has almost become self-reliant in the nuclear power technology.
Reversal?
If anyone believes that it is possible to reverse this process, a reference to the population and economic and political power of urban and semi-urban centres should be sufficient to disabuse him of such romanticism. Urban India accounts for around 120 million people and no power on earth can stop either the natural increase in it or a steady drift of population from the countryside to towns. Chairman Mao Tse-tung’s failure in this regard under conditions of authoritarian rule and utmost emphasis on rural development should clinch this issue.
Urban India, like its counterparts anywhere in the world, is at once resourceful and turbulent. In plain terms, no government, however much it may be dominated by representatives of the rural majority, can afford to ignore its interests.
Just as Gandhiji’s “plague spots” – he specifically described Calcutta and Bombay in these terms – cannot be eliminated, the urban bias of education, too, cannot be corrected, however much we may talk about it. Such a bias is inherent in all education and it is specially so in modern education which must in the nature of things emphasise specialisation. This means that the spread of education in rural India must at once increase the pull of the urban centres and their relative power vis-à-vis the countryside.
The issue, it needs to be underscored, is not whether the accelerated pace of urbanisation and industrialisation that has followed independence is desirable or not, but whether the process can be reversed or even arrested. Surely the answer must be in the negative. In modern times, if not in all times, only the present rulers of Cambodia have achieved such a miracle and the less said about their barbarous methods the better.
The inadequacy of Mr Nehru’s statements on economic development may not be equally obvious to those who, despite the ferment in the capitalist world as well as the communist movement, continue to believe that the key issues still are the relative sizes of the public and the private sector, the rival claims of industry and agriculture for investment, the definition of a “monopoly” business house, the usefulness or otherwise of byzantine controls the Indian bureaucracy has managed to clamp on all business activities in the name of avoiding concentration of wealth in relatively few hands and so on. But any serious student of Indian affairs should know that the country faces problems which cannot be tackled in those terms.
Poverty Line
There is first the question of equity which cannot even be discussed in left-right terms because in India even a worker in a factory and a clerk in a government office must be deemed to be a privileged person. Forty per cent of the people, mostly in the countryside, live at or below the poverty line. The percentage of the very poor in the entire population might not have grown and in absolute terms they may not be much worse off than they or their fathers and mothers three decades ago. Indeed, want of the kind that was a common feature of rural India in the thirties can even be said to have been reduced in large parts of the country – Himachal Pradesh, Kashmir, Punjab, Haryana, Western UP, West Bengal, Tamil Nadu, Andhra Pradesh, Maharashtra, Karnataka and Rajasthan. But education and increasing contact with urban centres is making the poor people restless. Something will have to done for them and done soon.
Since poverty on so vast a scale has clearly become a drag on further economic growth in all fields, a way out cannot be attempted in terms of concepts popularised by Mr Nehru. This fact has led some academics and politicians to believe that they have only to go back to Gandhiji to find a ready-made solution. But the social, economic and political reality being what it is, that path is just not open even if it is accepted that it is worth traversing.
The existence of a parallel economy in the pre-emergency period in the first half of the ’seventies, the labour unrest resulting in a substantial loss of production in 1973 and 1974 and the mismanagement of the public sector covered from public view the fact that India had already reached a level of investment in both industry, heavy as well as light, and in agriculture which was in excess of the effective demand. The emergency exposed the disturbing truth when the country not only found it necessary to export one million out of a total production of six and a half million tons of steel but also accumulated 18 million tonnes of cereals without much deliberate effort to curb consumption. The performance of the public sector improved very considerably during the emergency. But it could not have been sustained in the absence of demand for its products; it has inevitably slumped in certain key sectors in the past three months.
The demand for consumer goods, which has not risen significantly since the attack on black money in the wake of the emergency, can doubtless be stimulated among the better-off sections through the well-known Keynesian method of pouring in more money. But this demand, even if it does not produce inflationary pressure to the detriment of the politically influential and vocal salaried people can easily be met through the utilisation of the existing capacity. Thus it cannot produce much additional employment. Exports offer a partial way out in respect of the utilisation of the existing capacity, but exports release inflationary pressures – the earnings in foreign exchange have to be reimbursed in Indian rupees – unless they are accompanied by imports which in turn depress to some extent the demand for goods which the county produces or can produce in course of time if there is demand.
Thus on any reckoning the situation in India is pretty nasty and it cannot be tackled through any well tried method. It is in fact doubtful if it can be tackled at all if the population continues to increase as rapidly as it has been in the last two decades. The health minister, Mr. Raj Narain’s utterances notwithstanding, India will have to confront and solve this problem without too much loss of time.
Surplus Land
The fact must also be faced that most of the Harijans in rural areas are not likely to get cultivable land even in the highly unlikely event of a much more effective implementation of land ceilings for the simple reason that apart from Bihar, it cannot release much surplus land for redistribution and there, too, the Harijans cannot hope to benefit much because the caste Hindus are too well entrenched to permit that. A breakthrough in dairy farming may alone offer a hope for the Harijans in the countryside.
But it is possible to improve the lot of marginal farmers by changing the pattern of investment from say, big irrigation projects to minor irrigation schemes and extending the supply of power without which the rural scene would have remained dreadfully bleak. Thanks to the success, though limited, of Nehru’s broad strategy, the necessary resources are now available provided that the necessary political will is there and provided that the ideological posturing does not confuse and complicate issues. It is possible to raise the productivity of marginal farmers as has been done in Maharashtra through the construction of a large number of seepage tanks and enable them, to begin with, to have two full meals and acquire some surplus which can give them a little cash. Funds can also be found by postponing additional steel plants which cannot, in any case, be justified in the absence of effective demand.
The Times of India, 6 July 1977