INDIAN AFFAIRS
(August
to November 1953)
By Prof. K. V. RAO,
M.A., M. Litt.
(Government
S.C. College, Puri)
The
Statutory Report of the Reserve Bank of India for the year 1952-53 (ending with
June) forms a convenient starting point for this quarterly survey of Indian
affairs. The Reserve Bank has no doubt a team of excellent and well-trained
research workers, and all the material to work upon. We have to remember,
however, that it is a Government institution, and it is writing a report on the
happenings in this country in the shaping of which it has itself played a very
large part. Otherwise, how can we account for the fact that there are very
divergent views regarding the period under review between the Reserve Bank and
some of the Indian industrialists whose authority cannot also be easily
questioned? Any sane man should attach as much importance to the judgment of,
say, Mr. J.R.D. Tata as he would to the report of the Reserve Bank. Here is an
extract from the Reserve Bank’s. Report:
“During
the greater part of the year 1952-53, the Indian economy displayed a
substantial degree of stability. Monetary and fiscal measures taken
during 1951-52 had the effect of moderating the
inflationary pressure in the economy appreciably by the middle of 1952. This
trend was reinforced by the reversal of the inflationary movements abroad.”
Compare
its optimism with the discordant note against any complacency in the address of
Mr. J.R.D. Tata to the share-holders of the Tata Company on the 3rd Sept.:
“In
the meantime, the economic situation in the country as it has evolved during
the last year shows little cause for complacency. Although agricultural and
industrial production was somewhat better in 1952 than in the previous year,
the volume of trade, particularly foreign trade, showed a substantial fall.
Bank advances fell by nearly 70 crores, while the volume of money with the
public decreased by Rs. 37 crores over and above the reduction of Rs. 173
crores in 1951-52, representing a total decrease of Rs. 200 crores for the two
years. Taking all factors together, it seems evident that money income, i.e.,
the purchasing power of the people, has been reduced.”
And
this is supplemented by Mr. M. L. Shaw in his Presidential address at the 12th
Annual Session of the All-India Organisation of Industrial Employers:
“The
Index of industrial production rose from 117.2 (in 1951) to 128.9 (end of
1952). It is good, but the phase of new investment has slowed down. Rs. 104
crores of mill work and machinery were imported in 1951-52, but only about Rs.
84 crores worth of those things were imported in the first eleven months of
1952-53. The number of new industrial establishments was also not appreciable.
The number of notified vacancies fell from 4.86 lakhs in 1951 to 4.29 lakhs in
1952. Jobs found through the Employment Exchanges fell from 4.17 lakhs in 1951
to 3.58 lakhs in 1952.”
This
brings us to the question of research in India which, in spite of a galaxy of
reputed Indian economists, is still lagging behind the rest of the world.
Improvement is desired in three directions,–in quantity, quality, and
objectivity. There are Research Departments attached to the Reserve Bank
and some of the Departments of the Government of India, as well as to the
offices of the reputed economic Journals. But what about the contribution of
the academic economists in the Indian Universities? Quality suffers here,
largely because of the fact that the best talent is absorbed by the Government
and commercial firms, and what remains has no research facilities and, above
all, no knowledge of the latest methods and technique used in the more advanced
countries.
The
prosperity of a country depends upon the economic policy the country adopts;
and democracy expects that the people will choose between alternative economic
policies after fully understanding them. Indian democracy which is new to the
trade must remember this point very carefully. Does the Indian electorate
understand the economic policies the country is following, and has it weighed
it with the alternative policies? Is there an agency in this country that can
put before the people all the alternative economic policies with an objectivity
so that they could choose after proper deliberation?
The
remedy is simple. Research in the Universities should be encouraged to improve
both in quantity and quality. Will it not be possible for the Government
to send about a hundred intelligent economists abroad for getting training in
the latest methods of research, and distribute these qualified men among all
the Indian Universities? Cannot the Government and the commercial community
endow some chairs so that objective research could be carried on? All this is
not to suggest that the economist should be crowned, to dictate to the
politician what policy he should adopt. No; there is a clear line of
demarcation. The economist only points out the effects of all the alternate
policies, without calling them bad or good, and then comes the politician,
representing the sovereign people, to express his choice. All that the
economist wants is that the free choice of the people and the politician
should be exercised on a clear understanding of all the pros and cons, instead
of depending upon the fads and fancies of politicians. I think it is a sound
stand.
The
recent debate in Parliament on the sugar policy of the Government and on the
unemployment question has brought out all the confusion inherent in the
situation. The sugar policy has made it clear–for the first time?–that there is
nothing like the interest of the country as a whole, but there are several
interests that usually conflict with one another, and all that the country has
to do is to choose between them. In recent years, Indian sugar behaved in a
very eccentric manner. Two years back there was an under-supply, but then came
a surplus which facilitated not only removal of internal controls but also
removal of the ban on exports. Everything went on well for sometime and the
consumer found himself once again ‘sovereign of the market’. But it proved only
a crown for two days. Something happened and the sugar prices began to
shoot up; and the consumer found his hopes once again when he read in the
papers that the Government not only decided on imports but that half of the
quantity was actually on its way to the Indian ports. The consumer expected
that Parliament as a whole would congratulate the Government and the Minister
for their timely action. But there were other interests to reckon with,
and these interests professed to identify themselves with the interests of the
country at large, including those of the consumer. There
are the interests of the cane-grower, the gur-maker, the share-holder and
mill-owner, the importer, and then, of course, the consumer!
The
problem of unemployment in our country provides another example of our
unpreparedness for it. Not that I would like the academic economists to do the
work of forecasting, for in a recent survey carried out in the U.S.A., it has been
found that the economists go wrong twice in three times in this job of
forecasting! What the country requires now is a bold policy that can solve this
problem which is chronic, not only in the Indian system but all the world over.
In the midst of bewildering statements of causes and
solutions, we would do well to remember two cardinal
factors–that unemployment is a result of maladjustment in the economic system,
and that the term has a different and many-sided meaning in this country
compared with the other countries.
The
A.I.C.C. gave the lead with its resolution at Agra in June last. Everyone
expected the Planning Commission to do something, and to such of those that so
expected, the speech of the Finance Minister at Poona was a bit surprising. He
is reported to have said:
“He
saw no easy or immediate solution to the problem. The solution of the problem
depended upon the capacity of the Government to increase the outlay in the
capital expenditure under the Five-Year Plan. A section of opinion in India
wanted Government to be more enterprising in undertaking a larger volume of
capital investment, but such investment depended on the extent of United States
aid.”
This
was followed by the debate in the House of the People and then by various
solutions–official and non-official. The Planning Commission have issued a 11
point programme, Dr. Matthai a 6 point programme, followed by the solution of
the Communists, the P. S. P. and so on.
The
Planning Commission have brought forward two points in their 11 point
programme. They like the A.I.C.C., seem to think that somehow the population
problem is immediately linked with the problem of employment, an idea that
finds a ready echo in the minds of many thinkers. Mr. Tata in his speech
referred to above reminded his audience of the simple fact that India has to
provide food for an additional 5 million every year and work for nearly an
additional 2 1/2 million. He repeated his old suggestion for a High Power
Commission to investigate into all the aspects. To men like me who do not
believe that India is over-populated–confound our foolhardiness!–this is like
putting the cart before the horse. To us the question is whether poverty and
under-development are responsible for unemployment, or unemployment for poverty
and under-development? To ask population to be reduced to suit our economic
status is not like merely asking to cut the coat according to the cloth–a
foolish thing to do by itself–but to reduce the size of the body to suit the
cloth! But the question is whether it is beyond the capacity of India to
produce more ‘cloth’ that we should ask our bodies to be cut. Even if our line
of thinking is wrong, it shows that there are different aspects of the problem
and, as Mr. Tata suggested, a commission may be appointed to investigate into
all these aspects. To many of us, however, unemployment means that of the
educated.
Another
point made out by the Planning Commission also merits deep thinking in India.
The Commission expected the private sector to play its part well, but now there
is an allegation made in many quarters that “one of the factors that has
disturbed the Planning Commission has been the inability of the private sector
in particular to maintain the ratio of investment under the Five-Year Plan”.
Out of an allotted Rs. 233 crores for private investment, only Rs. 60 crores
have been invested so far. The private sector probably has an answer for this.
The Chairman of the Kolar Gold Field Mining Companies, for instance, has this
to say:
“The
Plan depends, for its success, on increased capital formation and investment in
productive enterprise. In this connection, one cannot help sharing the general
feeling that the economic climate in the country has, during the past few
years, tended to become one that is not calculated to stimulate initiative or
investment in industrial development.”
Mr. J. R. D. Tata’s
view is this:
“Our
Government have adopted the concept of a mixed economy for the country, a
concept which has found broad public acceptance and in which business and
industry are anxious to co-operate. A mixed economy, however, implies the
co-existence of State enterprise and free enterprise, and cannot mean a wholly
State-dominated economy where the industrial class is temporarily tolerated and
permitted to survive pending further development. A mixed economy can only
function if there is within the community a balance of forces, with free
enterprise operating as one of the autonomous forces pulling its weight
alongside States, State enterprise, Trade Unions and other elements in
society.”
Thus
there are different views on various problems facing the country. The man in
the street, the sovereign citizen of India, has to educate himself, or, at
least, insist on his masters to educate themselves on all aspects of the
problem before decisions are taken.
The
Constitution gives us a frame-work of governmental machinery that enables the
majority will to prevail. One of the duties of a good citizen in India is to
understand the spirit of the Constitution and assess from time to time how the
actual working of the Constitution conforms to the original intention of the makers.
The
most startling thing in this field, however, is the bombshell thrown by Dr.
Ambedkar who disowned all authorship and responsibility for the making of the
Constitution. He certainly used strong language when he said that he would be
the first person to burn it. Startling as it is, I am unable to appreciate the
great consternation it created even in the usual ‘knowledgeable’ circles; for,
to any one that has followed the making of the Constitution carefully, it was
clear from the beginning that what Dr. Ambedkar was doing was not what he would
have done, as one member of the Constituent Assembly put it even in those
days, if he had the freedom to do it. It is certainly a mistake to think that
Dr. Ambedkar had much or, as a matter of fact, anything to do with the actual
making of the principles of the Constitution. The Congress Party did the
thinking, remarked Mr. Mahabir Tyagi once, and the Drafting Committee drafted
accordingly, Dr. Ambedkar himself said, in all helplessness, once in the
Constituent Assembly that “they (the Members of the Drafting Committee) had to
go elsewhere to get the decisions”. He was referring to the High Command. The
fact is that all the important decisions were taken by the Congress and carried
in the Assembly with the help of the Congress whip, Dr. Ambedkar merely doing
the formal duty of moving and pleading for their approval! Of the many things
he had to support against his own wish were the Parliamentary Executive (he
wanted a Presidential type), “procedure established by law” (he wanted the “due
procedure” clause–and he actually remained neutral at the time of voting),
ten-year protection of the minorities (he wanted 50 years which Sardar Patel
threw aside) and so on. I have no time to do him justice here, but on the whole
the learned Doctor has lost more than he gained by the Constitution he himself
has made, and no wonder he wants to burn it now!
The
Constitution has come to stay, and there is no reason why it should be burnt.
But that does not mean that people can afford to remain indifferent to it. For
one thing, I have a feeling either that the Constitution was made in a state of
absent-mindedness or we are forgetting its spirit. Take, for instance, the
great controversy–a storm in the tea-cup–about the ‘acting Prime-Ministership’
during Panditji’s absence in England. Of all the people that came out with
legal explanations, not one has pointed out the simple constitutional
provision, that under Art. 77 (3), it is for the President to make all the
arrangements but not the Prime Minister!
The
formation of the Andhra State is a great thing; and certainly it is gratifying
to note that even the erstwhile antagonists of linguistic States have given
their blessings to the idea. But everybody seems to ignore the Constitution in
this respect. Not that the Constitution bars the formation of linguistic
States, but certainly it does not expect a constant changing of boundaries in
the name of linguism. That is against the spirit of the Constitution which
creates a single citizenship in the Indian Union and confers ‘equal protection’
of laws, irrespective of race, religion, language etc. The cry now that
“predominantly X-language speaking tracts should be transferred to the State X”
runs counter to the spirit of the ‘freedom’ conferred by Part III, articles 19
(1) (e) and (f), and 29 and 30. If a neighbouring State can claim that a
certain tract should be added to it from another State because the majority
speak its language, then the original State cannot certainly afford to give
facilities under the above articles for others to come and settle down first,
then foster their own language, and finally clamour for readjustment of
boundaries! This aspect of our Constitution is, again, forgotten by Indians.