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.
Reference:
Angus
Maddison, The World Economy: A Millennial
Perspective, Overseas Press (India) Private Limited, New Delhi, 2003
( Yuva Bharati, Vol.42, No.8, Mar.2015)
