Government opts for Bharathiya Approach to Economic Development – A historical move
During the 2014 Independence Day address, Prime Minister Narendra Modi informed the nation that the Planning Commission would be replaced. Accordingly, NITI Aayog the new institution which would serve as a ‘Think Tank’ was announced on Jan.1, 2015.
It is one of the most significant economic decisions of the new Government and by all accounts a historical one in economic planning after independence. Jawaharlal Nehru created the Planning Commission in 1950 based on the Soviet experience. During the last sixty five years after its formation, lots of changes have taken place. As a result, its replacement has become a necessity.
The economic discourse at the global level has been dominated by the Western ideologies for a long time. But the experience of the West is comparatively limited and narrow. After the failure of feudalism in Europe during the fourteenth century, mercantilist ideology gained dominance. Making the other countries as colonies was a part of that ideology.
Though the colonial powers became rich, large sections of people in their own countries could not get even their basic requirements fulfilled. Amidst wide discontents, Adam Smith published ‘Wealth of Nations’ in 1776, arguing for capitalistic system. The industrial revolution that followed too could not satisfy the needs of people; it rather created more problems for the working classes. In response to this, the communist ideology was placed as the alternative in 1867 by Karl Marx and Frederick Angels.
The first communist government was established in the then Soviet Russia in 1917. After seven decades of experiments, communism collapsed there during the late 1980s. The other bastion of the communist ideology namely China, had already abandoned it during the previous decade.
As a result, the United States claimed that its market version of the capitalist ideology was the only one suitable for progress. Hence it advocated its policies for all other countries in the World. But the countries that followed the policies advanced by the US have already been failing in different places. Soon the global economic crisis in 2008 proved that the US model would no longer work in its own place.
Of late many economists including those from the US admit that their theories fail to capture the realities and the ‘one size fits for all approach’ would not be suitable to all. Even the multilateral agencies now accept that no single model would work everywhere. Meanwhile, the performance of economies show that during the recent periods China and India have been growing faster than the others.
Meanwhile studies undertaken by western scholars during the last three decades reveal the predominant role of India and China during the previous centuries. Angus Maddison notes that India was dominating the global economy with a share of 32.9 per cent during 0 CE, followed by China with 26.2 per cent. India and China continued to dominate the world economy for the next eighteen centuries, with India remaining at the top most of the time during the previous two millennia. India had to lose her position and ultimately became a poor country due to the destructive policies of the British.
India and China could not have become the two most prosperous nations in the World without their own native economic models. Besides, they remained the most sustainable economies for the longest period in the history. Such a performance would not have been possible without well-functioning systems in place.
The native systems functioning in India and other parts of the World since the ancient periods were destroyed by the colonial powers. With the ascendance of Europe at the global level, they promoted their own systems, practices and beliefs. It became easy for them as they controlled the administration and education in different countries. Since then only their economic ideologies are in prominence.
Even before Independence, Gandhiji wanted to have wider discussions on the right kind of approach to planning in free India. But the Congress leadership did not listen to him. After independence, the policy makers opted for the socialistic ideas to guide them in decision making. It was during that time that the Planning Commission was established.
It is an admitted fact that the growth of the economy during the initial decades up to the 1980s was not satisfactory. Even the basic requirements of very large sections of the society could not be met. Hence the Government wanted to go for a change in approach during the early 1990s. But it chose to follow the western market ideology, again without wider discussions. The consequences have been severe with the domestic markets being opened up without the required preparations and the basic sectors facing serious difficulties.
It is unfortunate that India, with a very long history of superior economic performance, has been guided by one or the other of western ideologies during all these years. Hence we have not been able to realize our full potential, based on our strengths. But in spite of confusions and contradictions at the policy making levels, the nation continues to move forward due to the strong fundamentals and the innate abilities of our people.
Family base, higher savings, social capital, high level of entrepreneurship, non-corporate sector, native pool of local resources and the cultural backgrounds of our age-old civilization remain the fundamental strengths of our economy. This is the reason why our economy continues to remain vibrant. Hence there is little need of the foreign models being transplanted into India.
In this connection, it is encouraging to note that the Cabinet resolution passed to establish NITI Aayog states that the think tank would take steps to ensure that the foreign models are not transplanted into India. To quote: “ ….. the institution must adhere to the tenet that while incorporating positive influences from world, no single model can be transplanted from outside into India.”
Field level studies in different parts of the country clearly reveal that India has her own unique models functioning at different levels. It is these models that are making the economy to continuously move forward, despite the lack of clarity at the top levels. Hence there is an urgent need to frame our own strategies based on the grand realities.
The resolution echoes this aspect in these words: “We need to find our own strategy for growth. The new institution has to zero in on what will work in and for India.” This is important as we have to find out what will work here in our country, for our benefit.
Moreover the Government makes it intention very clear that a nation-centric approach would be followed for economic development. To quote the resolution: “It will be a Bharatiya approach to development.” This is a historic statement for all of us, as the functioning India has been longing for such an approach. It has taken six and half decades for the Government to state boldly that India would follow her own native approach.
It is hoped that NITI Aayog would be able to lay a clear road map, for India to proceed in her development journey with a definite vision. In the process India should emerge as an economic power utilizing her full potential with the participation of all the different sections of the society.
Angus Maddison, The World Economy: A Millennial Perspective, Overseas Press (India) Private Limited, New Delhi, 2003
( Yuva Bharati, Vol.42, No.8, Mar.2015)