INDIA 1950S: ANATOMY OF A DECADE

Prof. Dr. V. Shanmugasundaram gives a certificate to a girl student

That was the title FE carried a bunch of articles on last Sunday, these articles focuses on changes in the economy, policy, visions, etc during the period 1950-59.

Some excerpts from those articles:

From Prof Meghnad Desai article:

• “India had, uniquely among the colonies, a 90-year background in modern industry by the year of Independence. It was the seventh largest industrial economy by volume of output. It had a large native entrepreneurial class and successful world class industries in cotton and jute textiles. It had railroads, steel, cement and pharmaceuticals.
• Within two years of its launch, the Second Five Year Plan ran into trouble. There were not enough resources to finance either the restricted list of imports or even domestic savings to finance investment. The Sterling balances had been frittered away long ago, mainly helping Indian capitalists to buy up British owned firms. There was a foreign exchange crisis and drastic restrictions had to be imposed on who could spend what abroad. Permits and licenses were required to monitor who got what of the scarce resources. The Plan had to be pruned.
• Luckily for India, in 1991 the economy crashed. It was a replay of the forex shortage of 1958. This time the Plan was not pruned; the strategy of 40 years was abandoned and India liberated itself from the Fifties. Perhaps the fault was not with the Fifties but later decades where the policymakers became more dogmatic and myopic. Now India has to catch up with 40 years of bad policy.

In overall Prof Desai confuses many things that were happened in the independence India some time he deliberately hides the facts which is actually imperative to non-economics readers.”

From Rahul Bajaj:

• “Before independence, we blamed the British for India’s slow development. But what happened after independence? Look back at the 1950s and 1960s and we find no one to blame but our own backward looking policies. So, we need to look ahead than look behind — there is hardly anything for us to learn from the 1950s.
• The socialistic economy has done good to nobody, by and large.
• Till 1960, India was ahead of most of the South East Asian countries. Today it is lagging behind China, many South East Asian countries, let alone, Japan, America and Europe. It was all due to the non-progressive policies of our government. The Industrial Regulation Act, 1956 was passed. And in 1969 the MRTP Act came into effect. It opposed the concentration of economic power in the hands of a few. A misguided concept. Industrial Licensing Act was equally bad.
• There are some 200 companies in the public sector. Many are existing at the expense of the taxpayer. What value are they adding to the Indian economy? Hence, disinvestment is a must.
• The whole decade of 70s was a difficult year for Indian industry. From the industrial point of view, nothing much happened. No new technical collaborations were approved and there were no new joint ventures in the private sector. Even the older technical collaborations that expired were not renewed. By the grace of socialistic economy, even today we have a per capita income of less than $1000 per annum. What are we proud of? What kind of socialism is this? The industrialists are getting richer, politicians are making money, and there is a nexus between politicians and crooked businessmen. I don’t see this as a sign of a good economy or a progressive country.
• It was only the mid 80s that saw things picking up to some extent under the leadership of Rajiv Gandhi. He was a bright, young man of integrity who had very good intentions to take India ahead but he did not have the right kind of advisors. His famous speech on the brokers in Bombay and that only 15 paise in a rupee reached the intended beneficiary indicated that there was corruption and inefficiency in the functioning of the government.”

Its’ my turn, the Rahul’s sympathy is though undue but there is no other way to do but he tried his best to due credit to Nehru but could not!

Nothing interesting in Prof MS Swaminathan’s piece on “From Green to Ever-Green Revolution”. But one thing that I have not mentioned in this blog is the fights between Prof MS and C Subramaniam for taking credit in who is real father of Indian Green Revolution?

One senior most economist Prof Dr. V. Shanmugasundaram told me in University of Madras that the actual father of Indian Green Revolution is C Subramaniam not Prof MS Swaminathan!

From B.G. Verghese:

• “The first decade of India’s Independence laid the foundations of the new Republic that came into being on January 26, 1950.The liberal Constitution adopted then made democracy the instrument rather than the end product of a social and economic revolution, an event that stood history upside down and worked despite many doubts. Yet in his final address to the Constituent Assembly, Ambedkar warned of a dangerous “social democracy deficit”. The political principle of “one man, one vote” would need to be matched by the economic and social principle of “one man, one value”, a huge contradiction in what was then and even now a very hierarchical and stratified society from which so many of our ills continue to flow today.”

From Murad Ali Baig:

• “General Motors and Ford had begun local assembly in 1942 to support the war effort but stopped production as soon as the Indian government announced its first industrial policy to disallow total imports. After the war, new car launches were quite modest and infrequent. India’s first locally assembled car had been Premier Automobile’s Fiat 500 in 1944, followed by the Fiat 1100. Then came Standard Motor’s Standard 10 in 1947 and Hindustan Motor’s Hindustan 10 in 1948. In 1945 Mahindra & Mahindra had also begun making the jeep that had a large civilian following despite being mainly intended for the army and it was considered a very macho machine by those who were able to get one from army disposals. But they were overshadowed by fully imported cars that were allowed to be imported for some time.
• Although I had got my driving licence driving my father’s imported 1955 Chevrolet Bellaire that we thought was a most magnificent vehicle it started getting competition from Premier Automobiles who had started producing big Dodge and Desoto cars. Standard Motors had also moved up to bigger cars by producing a very ugly Standard 18. The Hindustan 10 and Fiat 100 were however the most popular although the earlier imported Austin 10 cars remained the mainstay of the fledgling taxi trade.
• Though the cars were exciting they were not very reliable. Engines had to be overhauled every three or four years and they broke down every month or two. Drivers had to always carry extra fan belts, radiator hoses and distributor parts so that the roadside repairers could quickly get them moving. There were also quite a few horse and bullock carts on the roads so punctures from the nails of their worn out shoes were a regular thing. We considered ourselves lucky if a new set of tyres lasted over 15,000 kilometers.
• Thank God that some things have changed. You have come a long way baby.”