Opinion

A new paradigm

SL Rao | Updated on March 09, 2018

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Time to bid adieu to Nehruvian socialism

India is not the same after 1991. It has changed in its demographics, female participation, politics, literacy, technology development and its standing in the world. It is a fast growing economy resting on services and industry, not agriculture. But it has not changed in its economic ideology and policies, high levels of poor jobs and of joblessness. Progress has been uneven, uncoordinated and enmeshed in time consuming administrative rules and procedures. It must change more.

Jawaharlal Nehru led the initiation of policies for a newly independent India. His admiration for the Soviet model of central economic planning and the then absence of a strong private sector, compelled government investment in basic industries and infrastructure. Mrs Gandhi made the public sector and government as the centre of all economic decision making.

The Congress was “socialist” in economic policies and wanted to create a “welfare state”. Mrs Gandhi translated this into government ownership and control of natural resources, of most financial resources, infrastructure and key enterprises, and micro-managed control over private enterprises. Her government was not favourably disposed to foreign investment and placed many blocks to the import of technology. The “welfare” was through giveaway programmes that were poorly planned and implemented. Exports were not a major policy thrust.

Foreign policy was “non-aligned” with a tilt to Russia and some hostility towards the US. Towards Pakistan the attitude was patient but firm. It trusted China and paid in consequence by losing territory. It made little effort to befriend the rest of Asia.

Its social policies for the poor were to give subsidised essentials in kind, involving vast procurement, storage and distribution. There was a passionate (but poorly executed) desire to alleviate poverty and improve opportunities for all through universal education and health services.

India would not join the capitalist (the West) or the communist (Soviet) blocs but would be non-aligned and make common cause with other developing countries. Over the years Pakistan would become an enemy for all political parties. After 1962, China would be an uneasy and disconcerting neighbour for India.

India would be a “secular” democracy. This translated into sops for Muslims that reached few but were talking points for the Congress party to consolidate Muslim vote banks. Over the years they alienated the Hindus.

The BJP government today is the first that does not need to carry this baggage of history. It must articulate its own unifying set of policies or ideology. With a majority only in the Lok Sabha it has limited freedom to pass legislation. The Uttar Pradesh Assembly elections point to a change and to many more years of BJP rule over most states and the Centre. It can introduce radical changes.

This ideology must recognise and respect all religions, promote private enterprise, reduce government ownership and control an reform all government instruments to make them efficient and accountable.

Basic administrative reform, with individual accountability, induction of professionals and experts at high levels, and a speedy system of investigations, with really deterrent punishments for malfeasance and wrong doings, is called for.

The writer was director general, NCAER

Published on April 04, 2017

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