India
is an ancient nation with a very long and proud history. It continues its journey
as a living civilization over millennia witnessing huge transition at the
global level. Its contributions varied diverse fields ranging from astronomy to
architecture, medicine to mathematics, literature to democracy and education to
spirituality. Much of them were pioneering in nature. Most of the achievements
were of the highest order that remain useful even now.
Besides
India was economically most powerful and remained very rich for several
centuries since the ancient periods. With exclusive commercial cities and
trade centres we were a major exporting
nation more than five thousand years back.
Agarwala notes: “Commercial cities like Harappa and Mohenjodaro were
founded in the fourth and third millennium BC. Trade centres had also come up
in Western India in the fourth and third millennium BC resulting in the
domination of Indian society by merchants; these commercial people were bringing about the first mercantile revolution.
India, thus became a great exporting country 1.”
Studies
by Angus Maddison reveal that India was the highest contributor to the global
GDP with an astonishing share of 32.9 percent during the beginning of the
Common Era. China was our closest competitor contributing 26.2 percent 2.
It only shows that India was the most powerful economy in the World more than
two thousand years back. The position continued during the first millennia with
India at the top. The positions were changing between India and China over the
next few centuries, but India remained as one of the top two economies till the
beginning of nineteenth century.
The
superior performance continuously over many centuries show that India remained
a sustainable economic power for a very long period. Such a record would not have been possible, without strong
fundamentals and a most suitable functioning models.
After
the British established its rule in India, they started destroying Indian
economy systematically. Each of the critical sectors namely agriculture,
manufacturing, trade and education were severely attacked. Besides there was a
huge draining of wealth, now estimated to be around $64.82 trillion between
1765 and 1900, in a period of just 135 years 3. It is more than
twice the current GDP of US. It led to frequent famines leading to the death of
millions of citizens. Besides there was huge loss of employment, migration of
villagers to cities, shifting of the favorable trade balance and the
destruction of the economic and social systems developed and nurtured over
several centuries.
The
noted American intellectual Will Durant wrote in 1930: “British rule in India
is the most sordid and criminal exploitation of one nation by another in all
recorded history 4.” As a result, the long held position of India as
a top economic power India had to come to an end. The GDP share of India during
1950 was just 4.2 per cent. Hence India was made a poor, less literate and
underdeveloped economy.
History
teaches us that a nation cannot progress by following others through alien
thoughts and approaches. It is all the more true for a great civilization with
a long history and extraordinary achievements. So leaders like Gandhi ji wanted
a wider discussion on the approaches to be adopted after independence. But
unfortunately after 1947, when we got the opportunity to frame policies
suitable for our nation, the ruling classes ignored the ground realities and history.
They chose an alien approach to guide the nation and thus the socialistic
approach came to be adopted. Even the Planning Commission was set up on the
lines of the one that was followed by Stalin in Soviet Russia.
Hence
the nation lost the initial decades of independence, crucial for any developing
country. As a result, our growth rates remained low at around 3.5 percent till
the 1980s. The very same leftists who advocated the socialistic approach criticized
the results terming it as “Hindu rate of growth” as if the Hinduism was responsible
for the foolishness of the policy makers. A comparative study of the growth
rates in Europe and the US during the same periods reveal that the performance
of the Indian economy was equal to or better than that of those regions, in
spite of the wrong policies adopted by our rulers.
When
communism failed in USSR during the late 1980s, the Indian establishment again opted
for a foreign model- this time being the US driven one - during the beginning
of the 1990s with the main focus on globalization. Thus we missed the
opportunity for the second time after Independence to frame the nation-centric
policies. As a result, the critical sectors of our economy such as agriculture
and the MSMEs were hit during the subsequent decades severely.
But
in spite of all the unsuitable approaches and the grave mistakes over the
decades, the nation has been growing silently. Though the growth rates started
picking up later, it was below our potential. Studies conducted at the field levels in
different parts of our country reveal that it was possible due to our civilizational
backgrounds and the inherent strengths of the society 5. The strong
foundations shaped by our culture over several centuries since the ancient
times remain as our main force. Our
family system, saving habits, community networks, tendency of living for the
next generations and higher entrepreneurial capabilities have all helped and
are helping the Indian economy and businesses to go ahead towards progress even
amidst difficulties.
The
growth of all the different sectors over the years have been largely due to the
inherent strengths of our nation. The industrial and business sectors, particularly
those from the MSME segments, have been driven by the ordinary families without
much of formal education and financial backgrounds. As a result, presently there
are more than 68 million enterprises operating in our country, providing
employment to more than 130 million persons. There are hundreds of very
powerful economic clusters with most of them having several thousand crore
worth of turnover.
Surat
in Gujarat, for example is a major business hub in India, with the diamond
processing and textile industries driving its progress. It contributes around
80 percent of the total processed diamond exports from the country with an
estimated annual turnover of Rs. two lakh crore. It is also the largest
manufacturer of clothing, accounting for around 60 percent of polyster cloth
production, in India. Its estimated turnover is around Rs 50,000 crore. The
average annual salary in the city is reported to be around Rs.17.7 lakhs, which
is among the highest in the country.
Tirupur
in Tamil Nadu is a major textile export centre, accounting for 55 percent of
all knitwear exports from India. It is exporting to different countries and has
a turnover of around Rs 40000 crore at present. Besides its domestic turnover
is around Rs 25,000 crore. Surat and
Tirupur are among the two powerful MSME clusters from different states of the
country, making India shine at the global level due to the native talents of
the local entrepreneurs.
Almost
all these economic clusters were developed by the local societies through their
own initiatives during the decades after Independence. Most of them were
promoted by people without much formal education and financial backgrounds. Our
studies in Rajkot, the globally known engineering cluster, showed that most of its
entrepreneurs raised their initial capital through the family and community
networks in their villages 6. Now most of these clusters are playing
a very significant role at the regional, state, national and international
levels through their exemplary entrepreneurial spirit.
Thriuchengode
in Western Tamil Nadu was known for its Arthanareeswara temple since the
ancient periods. Even farming was difficult due to lack of ground water during
the 1960s. Farmers had to dip wells deep into the earth to get water. For this
purpose, they needed rigs. Initially three farmers joined together, purchased a
machine and started digging wells. Sensing the opportunity, many more purchased
the machines and started operating in other states 7. Soon, they
began dominating the business across India with about 90 percent share. Later
they moved to Africa and now they dominate the markets in countries like Ghana.
Presently Thiruchengode is a major cluster with multiple business activities.
All
these centres have been developed by people, without much help from the state and
the policy makers. Moreover, their dependence on the state is less. In fact,
the successful entrepreneurs from these centres build schools, colleges and
universities, create facilities and renovate temples, providing the
requirements of the local communities.
It
is important to note here that the local societies develop their own ‘native
models’ based on the backgrounds and requirements. Sivakasi and Virudhu Nagar
from Southern Tamil Nadu are among the important clusters in India 8.
Earlier Sivakasi was contributing around 80 per cent of the fire crackers of
India, about 50 per cent of match boxes and about 30 percent of sophisticated
printing. Even now it contributes a significantly higher share to the national
income, providing employment to millions. Virudhu Nagar is a major trade
centre.
The
community dominating the region is traditionally from a land related
occupation, without much financial backgrounds. When they realized the need for
funds to promote business, they created their own system called ‘ Mahamai’. A fixed share of income from their families
was collected from every village/ locality, and given to those who wanted to
enter business . Over the decades, they began dominating the grocery business
all across the state and outside of it, where Tamilians are settled. Besides,
they dominated businesses such as fire crackers, match boxes and trade. This
was possible due to the development of their own financial model.
In every economic activity, the family plays a
critical role. Studies show that families are not just the social and cultural
units in India, but also the economic units. All the economic and business
decisions involve the family members. Many of the entrepreneurs acknowledge the
role of the women- mothers, wives, grandmothers and even sisters- in economic and business activities. They
provide the much needed support to their sons, husbands, grandsons and brothers
in businesses 9. It could be financial, physical and moral. Many a
time their savings proved to be the seed capital for businesses.
All
the studies show that the economic development after Independence was strongly
influenced by our fundamental strengths inherent in our society. They are
manifested through the family, social capital, community networks and the
native entrepreneurial spirit, with the age-old culture of our nation as the
driving force. Even when we see the big corporates run by western educated
professionals, we can understand the ‘Indian-ness’ in their functioning. We realize it better, when we compare the
functioning styles of the Western and Indian corporates. This has been
acknowledged by many of the Western experts through their studies.
John
Kenneth Galbraith, an economist, was the US ambassador to India during the
early 1960s for more than two years. He had the opportunity to observe India
closely. He came to India during 2001, during which time he shared his
observations on the progress of our nation over the previous four decades. He
said: “We have seen many years of India’s progress, and that is attributable to
the energy and genius of Indian people and the Indian culture 10.”
Field studies corroborate the impact of ‘Indian-ness’ in every aspect of the
economic activity in our country.
Beginning
2014, we are witnessing positive changes in approach towards policy making. Planning
Commission was replaced ending decades of the borrowed Stalinist-era set up
with NITI Aayog in Jan.2015. The cabinet resolution passed to establish it
noted: “Perhaps most importantly, the institution must adhere to the tenet that
while incorporating positive influences from the world, no single model can be
transplanted from outside into the Indian scenario. We need to find what is our
strategy for growth. The new institution has to zero in what will work in and
for India. It will be a Bharatiya approach to development 11.”
Over
the past decade, steps are being made towards ‘Indianising’ the process of
development. With ‘Antyodaya’ as the basic objective many new schemes
are being implemented for the poorer and less-privileged segments. Constructing
more than 12 crore toilets, building four crore houses, providing gas
connections to more than 10 crore families, giving Aysuhman cards for 41
crore citizens and providing banking facilities to 57 crore people from
ordinary backgrounds are recent developments. All these have vastly improved
the lives of people at the bottom resulting in more than 25 crore coming out of
poverty.
With
Atma Nirbhar Bharat as the main focus India is planning for Viksit
Bharat by 2047. Growth should not just be in numbers but completely
inclusive and holistic. Through the philosophy of Integral Humanism, Pandit
Deendayal Upadhyay advocated a complete change in our thinking and approaches.
Bharat remained as the Vishwaguru and the most powerful economy only
through our native approaches based on our civilizational strengths.
At
this critical juncture, while the Western systems have completely failed, we
have to understand that India is emerging as a powerful nation only due to our
native strengths. It is time for us embrace ‘Indian-ness’ in all our thinking, devise
policies suitable to us at different levels and implement them for taking our
nation to the higher levels.
References:
1. Agarwala, P.N., A Comprehensive History of Business
in India – From 3000 BC to 2000 AD, Tata – McGraw Hill Publishing Company
Limited, New Delhi, 2001, p.265
2. Maddison, Angus, The World Economic History – A
Millennial Perspective, First Indian Edition, Overseas Press (India)
Private Limited, New Delhi, 2003, p.263
3. Oxfam Report, “Takers and Makers: The Unjust Poverty
and Unearned Wealth of Colonialism”, quoted in The Economic Times, Jan
20, 2025
4. Will Durant, The Case for India, Simon and
Schuster, New York, 1930, pp.6-7.
5. Kanagasabapathi, P., Indian Models of Economy,
Business and Management, PHI Learning Private Limited, New Delhi, Third
Edition, 2012
6. Ibid., p.193
7. Ibid., p.225
8. Ibid., p.187
9. Ibid., p.219
10. Ibid., p.72
11. Cabinet
Resolution dated Jan.1, 2025, Govt. of India www.niti.gov.in
