“Profit ? It’s a dirty word.”
-Jawaharlal Nehru, First Prime Minister of India
Those were indeed the words of Jawaharlal Nehru. Considerable hatred towards business and commerce later on became the nucleus of India’s lacklustre economic performance. Immediately after independence, our policy makers majorly included people who preached and practiced the communist manifesto. Just to tell, GD Birla and Jamsetji Tata who were considered as Business Maharajas of that time were not even included in the construing the future India.
In the decade of 1930s, Nehru gave pompous speeches in Europe claiming that he could see a USSR’s socialism as an utopian economy model; whereas, Japan’s capitalist model as a cannibalistic philosophy of governance. However, in the present day Japan is not only a much robust economy than USSR, but it is also one of the strongest in the world. Japan has become the “ASIAN TIGER”; on the contrary, Kremlin is firmly controlled by KGB (The Economist).
The lack of foresight in choosing the correct philosophy of economic planning costed India at least a good 15 years in her history. Communism also killed the economy of West-Bengal. After independence, Bengal was endowed with clusters that made it the most preferable location for businesses in India. However, to Bengal’s misery it was also endowed with pestiferous rule of the communist party. Communist party always had the trade unions as its strong lobby group. The uneasiness and regular rifts in Bengal’s external environment drove the industries outside the state to another state (Maharashtra) that today contributes the maximum to Indian GDP.
With no efforts towards economic robustness in the periodical planning, India suffered continuous deficits in its Balance of Payment. There wasn’t anyone who was acting as if they wanted “good” for Indian Economy. To some extent there were efforts made in 1970 with the devaluation of the Indian rupee. Initial results were good as India recorded her first BOP Surplus in 1971-72. India recorded her second and last surplus in the year 1976-77. The first transformational change in Indian Economy happened in 1991, when the IMF decided to aid Indian Economy by “Aid India” consortium package. It will be unfair, if Manmohan Singh weren’t to be praised for the revolutionary change in the New Economic Policy. The former Indian Prime Minister played a masterstroke with periodic devaluation of Indian Rupee. Although, the devaluation did make exports a fascinating proposition, the government lacked institutional framework.
If you were to look at the economic model of any developed country today, it gradually phased away from primary sector towards manufacturing. However, UPA government decided to make India as an erratic economy. Without any rationale, we decided to become a service economy. Basically, we wanted to challenge the narrative of economic development with the only economy in the world that will gain its significance with a move from primary to the service sector. The same aberrant model followed by UPA is today taken up as case studies by top institutions for economics around the world as an asynchronous event.
India has really come out of years of poor economic planning; in fact, deplorable economic planning. Make in India is one such programme. Usually, countries need to maintain a balance in its BOP accounts. The current account is mostly in a deficit; its deficit is offset by the international forces of global financial markets. For instance, USA offsets is high deficit against China with high amount of capital investment made by people and institutions of China into financial markets of USA. However, India always lacked such a synchronised effort towards offsetting the deficits in trade. The focus of Make in India is to attract FDI from other countries into India. Therefore, if anyone tells you that Make in India is not being promoted in India is ascertaining a very important premise for the programme – Make in India needs to be advertised in international locations, but not in India. Indian government even hired Widen+ Kennedy, an American advertisement agency, to promote the lion outside India.
There has to be a sustained effort by the government towards enfranchising the economic forces in the country. Such economic liberation is clearly visible. Around the time of our independence, Winston Churchill quoted something about socialism. I wish that Nehru had acted on that quote – :
“Socialism is a philosophy of failure, the creed of ignorance, and the gospel of envy, its inherent virtue is the equal sharing of misery.”
– Winston Churchill, The Prime Mister of Britain at the time of India’s independence.