By Prof. T. V. Ramanujam,
M.A.
AFTER the passing of the Industrial Truce
Resolution by the Industries Conference and the announcement of the Industrial
Policy of the Government of India, people in this country eagerly hoped for
some clear evidence of improvement in the economic sphere. It is unfortunate
that the achievements of independent India in the economic realm have not been
at all comparable to their success in the political, social, and other aspects
of national life. Industries, trade, employment–all were dull and depressed,
while prices have been mounting up, and distress has been all-pervading. Labour
was complaining that, even under a nationalist Government, it has not been able
to secure a fair deal. But, at the same time capitalists and employers have
been equally sullen and unprepared to do anything enthusiastic. It was with a
view to inspire hope and confidence and thereby to stimulate activity in both
these important groups that the Government of India got passed the Industrial
Truce Resolution and announced their policy in the matter of the future
development, control and management of industries.
Unfortunately both these proved nothing more than
damp squibs.
But during the month under review, three important
events have taken place in the economic sphere which, we hope will serve to
clear the clouds of distrust and pessimism and to generate the needed
enthusiasm and activity. In their order of importance these three events are:
1.
The address by the
Governor-General, Mr. C. Rajagopalachari, to the Bengal Chamber of Commerce on
the morning of November 30th, 1948.
2.
The resolution on the
economic programme passed by the Indian National Congress at its recent Jaipur
session, and,
3.
The address to the
Associated Chambers of Commerce by Dr. John Matthai, Finance Minister of India,
delivered on the 13th December, 1948.
The highlights of Rajaji’s thought-provoking address were these. In the first place, he emphasised the fact that, in the present context, the right attitude for all and especially for businessmen to adopt should be one of optimism and not of hesitation and doubt. Indeed, optimism is not only justified but essential. In the second place, Rajaji suggested that the non-Indian business community was confident of a bright industrial future for India and he asked them to infect the hesitant Indian nationals with the same optimistic spirit. Thirdly, H.E. Mr. C. Rajagopalachari, used one of his characteristic and telling similes to drive home the point that the business community in India must learn to adjust themselves to some measure of uncertainty about the future and to strive and succeed in that atmosphere. He reminded that gathering of important businessmen that while in the past we were living in a pool, today we have to live in a moving river.
To none of these three points can any right-minded citizen take objection. At the worst, they were rather unpleasant hometruths. But somebody has to say them for, after all, truths must go home; and who can say them with much clarity and force as Rajaji?
Unfortunately, however, these did not go home. On the other hand, certain important groups of Indian businessmen actually grew more sullen and grousing than before. If the object of that excellent address was to infuse confidence into the sections that represented business enterprise and capital in India, there is no doubt that it was not fulfilled. Just like the Industrial Truce Resolution and the statement of Industrial Policy, Rajaji’s memorable utterance did not alter the depressing status quo, characterised by apathy, misgiving and distrust.
The Jaipur Congress generally approved of the report and recommendations of the Economic Programme Committee of the All India Congress Committee. It called upon the nation to undergo a period of austerity and to avoid all wasteful expenditure. The Congress suggested that while the people must produce more, they must consume less and invest their savings in Government securities and undertakings. They urged the Government to ruthlessly cut down their expenditure, consistently with the efficiency of administration and the safety of the State. As a homage to Gandhiji’s memory, this Resolution on Economic Programme incorporated the usual exhortation about the need for developing cottage and small-scale industries “preferably on a cooperative basis.” There was the usual advice, in the true Liberal tradition, to both sides of the conflict, appealing to the proprietors of industry that “they should bring down their profits and help in raising production, and pleading with Labour that “they must realise that every strike at this stage is grave disservice to the general community.”
Needless to say, all this very pious, very general and very carefully balanced verbiage did not have the slightest effect in enthusing either Labour or Capital. The situation continued to be characteristic of a stalemate.
It was in this atmosphere, at once delicate, difficult and gloomy, that India’s first Economist-Finance Minister, Dr. John Matthai, delivered his most striking address at the Annual General Meeting of the Associated Chambers of Commerce. Let it be said at the outset that no one could have delivered a more realistic and more level-headed and fair pronouncement. Even his description of the problems facing the country was as refreshingly clear and original as the solutions indicated by him were acceptable.
Dr. John Matthai pointed out that India was in a somewhat extraordinary situation. On the one hand there was a marked inflationary trend: on the other, a low level investment and business activity. Explaining the reason for the failure of the Government of India to take drastic steps for reducing the purchasing power in the hands of the community, Dr. John Matthai pointed out that it was their view that “a sudden adjustment of the active money supply’ of the country to suit the present low level of production was likely to create problems of a different character which might be equally difficult to handle and prove equally injurious to the country.” Therefore, the immediate objective of the Government was to stabilise rather than curtail prices. They would be satisfied if the measures already taken succeed in preventing a further rise in the level of prices; because, it was believed that prevention of a further rise would by itself generate forces making for inducing a downward movement of prices.
The Finance Minister must have warmed the cockles
of the hearts of the industrialists of the country when he referred to the
margin of saving in industrial concerns having diminished substantially in
recent years, and when he said that one of the causes for this reduction in the
margin of saving was the level of direct taxation. So far no member of the
Government was prepared to concede this. That by itself, one would naturally
expect, would lead to the dispelling of the fears of the industrialists about
the bleak prospect of heavy and surprising taxation in the coming budget. Of
course, the seasoned administrator that he is, Dr. Matthai was careful to point
out the other side, namely, the compelling need for heavy public expenditure
and his consequent inability to say “when and to what extent he could give
practical expression to his sympathy.”
The Finance Minister was equally helpful in the
matter of allaying the other apprehension of business enterprise in India,
namely, the extent and pace of nationalisation. While reiterating the truism
that certain basic industries and services–especially those which have a
bearing on national defence–should be controlled and owned by the Government,
the Finance Minister emphasised the fact that for as long a period as we can
foresee there will be not merely a large but an increasing field for private
enterprise in India and the only limit to it will be its own readiness to venture
ahead and organise itself for the great tasks that lie ahead.”
But, let it be noted that Dr. John Matthai could
not be expected to forget all his well-known progressive outlook in economic
affairs, and that therefore, he was unwilling to say anything in the matter of
profit sharing in respect of retrenchment of Labour, which could be considered
unhelpful by the workers.
The following words are especially worth noting by
those critics who unjustly imagine that Dr. John Matthai has given away to the
capitalists anything other than what is due and necessary in the face of the
realities that confront the country today.
“In the general awakening among all sections of the
community which has followed the attainment of political freedom, it is
essential for responsible leaders of industry to recognise that the whole
problem of industrial relations calls for a fresh orientation. The individual
workman is a self-respecting human being with a personality of his own and he
should not be dealt with or disposed of as if he were an inanimate unit of
industrial equipment. I remember long ago, when I was a student, in England,
attending a conference of the Workers Educational Association, at which one of
the most intelligent and sensible workers present complained bitterly of the
fact that, when he attended the chapel on Sundays, the parson invariably
accosted him, “Brother Smith,” but on week days in the factory, he was simply
“Card 350.” That remark sums up the essence of the problem, the truth of which
has been brought home to me in later year by direct contact with labour both as
a businessman and as a member of Government. I have seen a great deal in my
time of the rank and file of Indian labour and I am convinced that they are
sound at heart and, provided they are handled with judgment and tact and
treated with dignity and consideration, they will acquit themselves with
loyalty.”
Equally necessary and appropriate was the clear
enunciation which Dr. John Matthai made of the Government of India’s policy
towards British interests in India. He dispelled the feeling in the minds of
some that there was any opposition on the part of the Government to British
concerns in India. He made it clear that the Government of which he was an
important member had no objection to the participation of British capital and
enterprise in Indian industry and trade, on terms and conditions which were of
mutual advantage to their respective countries. He did not forget to remind
them of their responsibility for giving reasonable opportunities to the
nationals of the country to acquire training and find employment in the
industries run by them.
If this striking utterance of a person holding so
high an office, and who has had so good a background, will not bring about the
long overdue revival of enthusiasm in business circles, one wonders if there is
any hope for them or for the country of which they form a vital part.
He has said everything that can be said for
removing any reasonable misgiving of capital and enterprise in the matter of
the Government’s attitude towards Labour, Private Enterprise, Nationalisation
and Taxation. Surely none but a Rip Van Winkle could expect India to go back to
the days of undiluted laizzez faire.
Leading Indian industrialists have themselves
admitted that the Government’s concessions to them made so far have been
substantial. It is on the top of this that the very reassuring and balanced
utterance of the Finance Minister has come.
Further, the Government of India have assured that
they intend to take measures by legislation and otherwise to ensure that
uniform principles would be adopted under the over-all control of the Central
Government, in the reference of industrial disputes and adjudication, and to
provide for the review of awards by a statutory authority. The establishment of
Appellate Tribunals that seems to be contemplated by the Government of India is
undoubtedly yet another measure that should be welcomed by the industrialists
and the country.
All in all, it seems to be clear that the Government have gone far out to do the fair thing by all the sections of the community, not the least important of which are the industrialists. Is it not time for this section to give up complaining and sullenness? Should they not now rise to the occasion, and cooperate with the Government, with a new glow of cheerful enthusiasm, in their Herculean task of rapidly raising the living standards of the vast multitudes of the peoples of this ancient, long-suffering, but proud and fair land of ours?