The biggest problems facing India today are poverty and unemployment. Eight months ago, a new government was formed in New Delhi. People’s hopes were aroused but for a short time only. Already, there is strong evidence of manifestations of frustration. As no other large country in the world faces the twin’ problems of poverty and unemployment of the magnitude as India, the new government’s responsibility is very grave. It would do well to bear in mind that ultimately economics rules politics. It is recognised in some quarters that even with half of India’s population, everything else remaining the same, the difficulties in transforming India into a welfare state are immense.
When India became free on the 15th August 1947, a tremendous euphoria was generated. It was considered to be the dawn. But it is clear as daylight now that the economic dawn is nowhere in sight.
After the end of the Second World War, the common man’s lot, especially in Western Europe, improved vastly and rapidly. He was better fed, clothed, and housed than ever before. In developed countries, economic growth and social welfare proceeded side by side. This feature gained universal acceptance. The proportion of the national income spent by the state in democratic capitalist countries rose sharply, and thus gave rise to the concomitant growth of the public sector. Indian thinking was naturally influenced by this. In a number of capitalist countries, up to one-half of the national income was spent on the public sector.
The running of the public sector was something entirely new for Indians. Take, for example, the case of the railways. In 1947, India had one of the biggest networks, and several joint-stock companies were owned and run by Britishers. In the financial and engineering management, Indians had no part and no experience. Apart from that, the concept of predominance of the public sector was adopted for ideological reasons, without checking the likelihood of its success under the then prevailing Indian conditions. The question that naturally arises is whether Parliament was enamoured of this idea even before considering whether it was in a position to make a success of it. Whether the government sector of industry was conceived out of envy as a prominent and responsible industrialist once said in a public lecture, is worth a doctoral dissertation on the part of an enthusiastic youngster. It is pertinent to quote Collins in this context: “When I was young I thought socialism was the mathematics of justice. Now I realize it is only, the arithmetic of envy.”
Hunger in India
Let us now review what characterizes India today. More than three decades after Independence, half the people are below the Poverty Line. Most of the other half are also poor.
What happens when someone consumes calories below the minimum daily requirement? The Minister for Planning did not go into this question nor did members of the Rajya Sabha think of asking him this question. However, there is information from elsewhere about the effects of malnutrition. Someone found that among 500 middle class children only one had an IQ below 80, but among 500 poor children who suffered serious protein calories malnutrition in their first months, some 62 per cent had IQs below 80. There is another way of looking at calories intake. A daily intake of some 2,250 calories is appropriate according to dieticians for an eight year-old child in a Western country.
In India, an adult male doing heavy physical labour in the fields for more than 12 hours a day gets less than 2,000 calories from his food. The human effects of this have also been described “chronically hungry people are physically less developed and mentally less alert than people who eat enough.”
In this connection, we would be wise to heed Bernard Shaw’s warning: “Those who minister to poverty and disease are accomplices in the two worst of all crimes.”
Neglect of agriculture
About 70 per cent of Indians are dependent on agriculture. If the first priority had been given to agriculture, and the second priority to industry, we would have fared much better in every way. As things stand, many of the poor do not have the purchasing power to buy enough foodgrains, the per-person consumption of which is gradually falling with every passing year, although the consumption earlier was always on the low side.
A significant consequence of the neglect of agriculture is that the per-hectare yields of most agricultural crops are about half of the world average, let alone the peaks achieved in many countries. If we had provided all the agricultural inputs; when the world-wide rate of inflation was low, even after deficit financing, if found necessary; we would have been a surplus agricultural country par excellence. We should not forget that among big countries, lndia is unique, in that half of the total area is arable. Nature has liberally endowed us, as no other country in the world. At the same time, like foodgrains production, our oilseeds production would also have gone up, and given a tremendous impetus to another huge agricultural industry.
Neglect of education
The other front on which we have failed is education. It always got a low priority, possibly, because the economic growth was too low to fund the education department from the national savings. It is said that there are more illiterates now than in 1947. This comes in the way of the birth control programme, as it is very difficult to convey any message to the illiterates. As compared with the achievement of other countries, ours, in this field also, pales into insignificance. Economic growth and the reduction of illiteracy help in overcoming the problem of population growth.
Priority should be given to a sound economic policy. In my opinion, only that economic policy can be successful which is framed within an average real (that is, after accounting for inflation) economic growth of at least three per cent per annum per person. One may well question how we can achieve in future three times the actual growth in the past. The answer is that the envisaged figure is by itself modest but could not be achieved because of the system we adopted. In the case of India, one cannot put the blame on the people, but only on the economic system which stifles initiative, obstructs activity, saps vitality, leads to corruption, etc. Medicines cannot cure our ills. What we need is surgery. In future, the free market economy is necessary. Otherwise it would be like hoping against hope. And this should be within the framework of democratic capitalism which has worked wonders in many countries, and which has unfortunately not even been given a trial in India. Just as there is only one optimum move in chess, there is no alternative. The trouble in India is, as the growth diminishes the squeeze on the private sector increases. No one can say that the present economic system was not given a long enough trial. The biggest threat to the private sector is the loss of freedom of action.
Dynamic force of capitalism
For all capitalism’s proven success in producing material prosperity, the ultimate justification for the system does not rest on its output of cars or cosmetics. Capitalism’s fundamental rationale is that it permits and promotes freedom by enhancing the rights of the individual and limiting the power of the state. While some capitalist countries are not democracies, no Communist or totally socialist economy has remained a democracy for long. And every democracy practices some version of capitalism. The reason is clear: political freedom is impossible without economic freedom. As the. British poet and essayist Hilaire Belloc noted, “The control of the production of wealth is the control of human life itself.”
While tackling the herculean task, capitalism must demonstrate anew the daring and flexibility that were once its hallmarks. Plainly, capitalism is not working well enough. But there is no evidence to show that the fault is in the system or that there is a better alternative. Though neither comfortable nor easy, free enterprise contains. The protean potential that will be needed in the coming difficult years. For all its obvious blemishes and needed reforms; capitalism alone holds out the most creative and dynamic force that any civilization has ever discovered: the power of the free, ambitious individual.
Every child should have Freedom, Bread, and Enlightenment. Freedom is considered even more important than Bread, because otherwise a tyrant can deny Bread, as history teaches us. Enlightenment should be such that the younger generation should not have any scope to put the blame on the older generation. Teaching self-restraint should be an integral part of the enlightenment. The youth should be reared in such a way that all the safety valves of their bodies are intact. This way, their future will be in their hands. Such children can impart the benefit of their experience to others. We can thus prevent wastage of humankind. John Dewey’s fervent wish “What the best and wisest parent wants for his child, the community should want for all its children” would become a reality. We should not forget that it is the system which creates deviates. With the introduction of the right kind of enlightenment, it is hoped to eliminate violence, and also the degeneration of mankind. At present, even in affluent countries, happiness is rare.
This essay is part of a series from the Indian Liberals archive, a project of the Centre for Civil Society. This essay is an excerpt from a monograph published by the ‘Forum of Free Enterprise’ with the original title, “A Blueprint for Eradication of Poverty”, published on 15 December 1980. The original version can be accessed on this link.