Before independence, we blamed the British for India?s slow development. But what happened after independence? Look back at the 1950s and 1960s and we find no one to blame but our own backward looking policies. So, we need to look ahead than look behind ? there is hardly anything for us to learn from the 1950s.
Jawaharlal Nehru, the first Prime Minister of independent India had very good intentions when he tried to shape the Indian economy as a socialistic economy. He was deeply influenced by western philosophers like (Harold) Laski. Socialistic economy means ?maximum good of the maximum people?. I don?t think that anybody can disagree with this. But with Nehru?s death in 1964, the socialistic policies were implemented in a wrong manner. People misconstrued it or maybe they did not understand the ideology well and implemented it in the wrong way. The socialistic economy has done good to nobody, by and large.
Till 1960, India was ahead of most of the South East Asian countries. Today it is lagging behind China, many South East Asian countries, let alone, Japan, America and Europe. It was all due to the non-progressive policies of our government. The Industrial Regulation Act, 1956 was passed. And in 1969 the MRTP Act came into effect. It opposed the concentration of economic power in the hands of a few. A misguided concept. Industrial Licensing Act was equally bad.
In 1969 banks were nationalised. Nationalisation has done little good to the economy. I agree that some public sector banks were and are required to supplement and counter balance the private sector banks. But nationalisation in itself was not good for the Indian economy. Of course, we should have public-private partnership and even after disinvesting in public sector companies, the government can hold at least 51% of the equity. But in some companies, there is no need to hold even 51%! In fact, due to bad management and government interference, many of the public sector companies, other than oil companies, today are in a mess. I believe that the management should be given to the private sector because this will ensure more efficient management.
ONGC has been doing well but they are a monopoly. There are some 200 companies in the public sector. Many are existing at the expense of the taxpayer. What value are they adding to the Indian economy? Hence, disinvestment is a must. I believe that at least Rs 25,000 crore should be raised each year once the stock market is in good shape. The government wants to do so. Only a couple of parties, such as the DMK and the Trinamool Congress, need to be convinced about the benefits of disinvestment. Of course, it should be done in a transparent manner.
The whole decade of 70s was a difficult year for Indian industry. From the industrial point of view, nothing much happened. No new technical collaborations were approved and there were no new joint ventures in the private sector. Even the older technical collaborations that expired were not renewed. By the grace of socialistic economy, even today we have a per capita income of less than $1000 per annum. What are we proud of? What kind of socialism is this? The industrialists are getting richer, politicians are making money, and there is a nexus between politicians and crooked businessmen. I don?t see this as a sign of a good economy or a progressive country.
It was only the mid 80s that saw things picking up to some extent under the leadership of Rajiv Gandhi. He was a bright, young man of integrity who had very good intentions to take India ahead but he did not have the right kind of advisors. His famous speech on the brokers in Bombay and that only 15 paise in a rupee reached the intended beneficiary indicated that there was corruption and inefficiency in the functioning of the government.
It was only in 1991 that Dr Manmohan Singh, with his foresight and complete support from the then Prime Minister, P V Narasimha Rao, liberalised the Indian economy. But even now, we are not a capitalist economy. We are in a state called mixed economy. Many important sectors are still in the public domain ? look at Defence, Insurance, Banking, ONGC etc. Despite being a country with an enormous and intelligent workforce, we are lagging even behind China. China opened up to the global economy in 1979 and we opened up in 1991. We are thus 12 years behind China.
Let us look at the brighter side. We are still the largest democracy with 1.1 billion people with an independent judiciary and a free press. We are the fastest growing economy after China. We are growing at 6% to 7% per annum. US has a per capita income of $40,000 whereas our per capita income is less than $1000. We naturally have to grow faster or we will never be able to catch up. Arjun Sengupta?s report says that 70% of our population is earning Rs 20 a day. Is this something to be proud about?
Some feel that democracy has been a hindrance to our economic development as decisions like land acquisition or industrial development due to environment considerations get delayed. But I love my democracy. We cannot ignore the interests of our farmers, or hurt environment for our benefit. Development has to be sustainable. Yes, our progress is slow compared to that of China and some South East Asian Countries. But our development process is more sustainable and in the long term will stand us in good speed.
As told to Moumita Chakrabarti