It was the German sociologist Max Weber (1856-1920) who first argued that capitalism would prosper only in those countries where the Christian protestant values dominate. His thoughts continued to influence the thought process of many of the scholars for a long time, though he had failed to take into account the historical developments even within the West.
Later in 1955, when the noted economist E F Schumacher travelled to Burma as consultant he coined the term “ Buddhist economics”, based on the distinct features of Buddhism. Arguing for a Buddhist economic system he wrote: “No one seems to think that a Buddhist way of life would call for a Buddhist economics, just as the modern materialist way of life has brought forth modern economics”
When we study the economic system of India since the ancient periods, we realize that there are unique features that dominate the Indian economy. These features are the products of the Hindu way of life, belief systems, approaches and thought processes developed and nurtured over several centuries. What is important is that they continue to support and nurture the Indian lives and their economic functioning even today.
India is an ancient civilization. Gandhian economist Kumarappa notes that the Indian civilization has survived so long because it is based on the values of permanence. Business historian Agarwala notes that there were prominent commercial cities more than 4500 years ago, with India engaging in exports with many countries. It is known that the first book on economics, namely Arthashastra, was written here 2300 years back.
Now we have the documented account of the economic performance of different countries in the world for the last two thousand years. The monumental work by Angus Maddission clearly shows that India was the most prosperous nation in the world with a share of 32.9 per cent in global GDP, during 0 CE.
The position of India as the premier economy continued uninterrupted for several centuries during the past two millennia. Figures show that India remained as the most sustainable economic power in the world. It was due to the wrong policies of the British that the Indian economy had to fall, beginning from the eighteenth century. This shows that Indian economy, by nature, is fundamentally strong with her original systems based on the Hindu orientations.
India was a poor and underdeveloped economy at the time of Independence. Now seven decades later, we are the most potential economy in the world with very high growth rates. Almost all the multilateral organizations, research bodies and rating agencies unanimously agree that India is fast emerging as the most powerful nation. A few years back, London Business School estimated that India had 85 millions entrepreneurs functioning at different levels. Now the situation is such that no major economic discourse at the global level can take place without the presence of India.
How did we come to this position? How is that a country that was very poor is considered as the most potential nation in a period of just seven decades? A study of the economic history during the past decades shows that no other country in the world has made such a U turn in a period of seventy years. How was it possible?
When we analyse the policies of the past decades, we come to know that there were confusions and contradictions in policy making during most of the period. Well before Independence, Mahatma Gandhi wanted to have a larger debate on the economic policies to be adopted after independence. But Nehru scuttled it repeatedly. Post 1947, the Nehruvian establishment went in for an alien ideology and adopted the socialistic approach, without much discussions. It was only when the socialism failed in the then USSR by the late 1980s, our ruling classes realized their foolishness. But by then we had already wasted four important decades, very crucial for the development of a country of India’s backgrounds.
After communism failed at the global level, the Indian policy makers wanted to go for an alternative. By the time the country did not even have the foreign reserves to pay for our imports and we were made to pledge our gold outside. Then again for the second time without wider discussions, the policy makers opted for another western ideology in the form of a globalization from the early 1990s. As a result, the critical sectors, especially agriculture and the small and medium enterprises had to face serious difficulties.
But in spite of such a situation prevailing at the policy making levels, the Indian economy has been growing, though not up to its full capacity. Even during the initial decades of Nehruvian growth, our growth rates were either comparable or better than that of the western countries. Later the growth rates picked up over the years, leaving the other advanced countries way behind. It makes one to wonder as to what could be the reason?
Field studies conducted in different parts of the country for the last twenty years and more reveal that the economic progress of India during the past seven decades has been largely due to our inherent strengths. Most of them are unique and play the critical role in the shaping and functioning of our economic systems. Family base, High savings, Self-employment base, Higher levels of entrepreneurship, the dominance of the non-corporate sector, community orientation with higher social capital, society-driven and not state-dependent approaches and the presence of higher value systems are the important among them.
It is the above features that support and sustain the economy to move forward continuously, in spite of the many hurdles that the nation has been facing over the years. It is because of them that the nation was able to overcome the negative effects of the alien approaches. Even during the 2008 global economic crisis, India was able to escape it only due to the native economic systems.
How is it that India has such a list of unique characteristics? Studies reveal it is the great Hindu culture and traditions of this ancient land that are responsible for these features. It may be relevant in this connection to quote John Kenneth Galbraith, a former Ambassador of the US to India in the 1960s who himself was an economist, when he visited our country again during 2001. He said: “ I was urging an obvious point that the progress of India did not depend on the government, as important as it might be, but was enormously dependent on the initiative, individual and group of the Indian people. …. We’ve seen many years of Indian progress, and that is attributable to the energy and genius of the Indian people and the Indian culture.”
Deendayal Upadhyay explained as to how the Bharatiya culture looks upon life as an integrated whole, with economics playing a crucial role. During the recent years, even the western economists accept the dominant role of culture in the economic functioning of different countries. Based on the studies available before us, we can confidently say that it is the Hindu economics that is driving the Indian economic systems since the ancient times.
( Organiser, New Delhi, Mar 4, 2018)