“The effort to get out of the rut of a particular type of planning now threatens to degenerate into an exercise that bears no relevance to the development needs of a poor country such as India. A correct relation is yet to be established between Industry and Agriculture and among different sections of industry and the contraposing of agriculture (which must undoubtedly be the foundation of India’s national economy for a long time to come with industry (which has already become the leading factor) is unwarranted and most disturbing.”
AUGUST 23, 1977
Decentralisation or economic romanticism?
A MIDST THE DIFFERENCES AT THE TOP LEVEL OF THE RULING party over the basic structure of economic policy – differences which have resulted in postponing the clinching of issues to October – the voice of economic romanticism is clearly identifiable, conjuring visions of a utopia whose guiding principle is the supremacy of small scale production. The differences in the viewpoints expressed in the position paper circulated in the Janata Working Committee on behalf of the party Secretariat and in Mr. Charan Singh’s note on the role of agriculture in economic development are by no means inconsiderable, particularly where they relate to the qualitative aspects of the structure of agrarian relations. Nevertheless, what stands out in both is an attempt to reject the very path of development India has taken since Independence as being incapable of solving the problems of unemployment, mass poverty and low growth rates. While few students of political economy would be inclined to contest the bluntly presented conviction that India’s overall performance has not been good enough and that the whole development effort is caught in a rut, it is the nature of the alternative strategy discussed vaguely that must cause concern.
The key incantation so far as the Janata is concerned is decentralisation of economic and political power – initially promised in the party’s election manifesto. This concept has been variously propounded, referring now to the breaking of the dominance of factory industry, now to the need to draw rural areas more closely into the development effort, now to the dispersal of industry over a wide region, over a backward region and so on. At one extreme in the Janata spectrum of views is the concept of decentralisation that is to be translated into practice by recognising the primacy of agriculture over industry, by changing the balance of allocation of development resources radically in favour of agriculture and at the expense of heavy industry, by reserving industrial production now in the domain of large scale machine, or factory, industry, to the ‘decentralised’ sector, that is, to cottage and small-scale industries, and by allowing big industries to exist on pain of export. Such a development alternative must be characterised as pre-modern and even backward looking not merely because it sees the advance of large scale industry as a curse, not merely because it confuses the overriding centralisation and concentration inherent in the historical evolution of India’s modern industrial structure with its bigness (which is, of course, a relative concept) and not merely because it refuses to see in modern industry man’s great achievements in science, technology and production. From the standpoint of the people, it might appear as a prescription for the continued poverty of India, a blueprint to keep the technical basis of India’s economy primitive and undeveloped and to keep India away from the mainstream of world-wide advances in modern production. It is very much in line with familiar homilies showered on us by certain Western circles some years ago to the effect that a country like India does not need a basis of its own for heavy industry, but can rely on more developed economies to meet its development needs. The line that a large part of India’s factory industry heavy industry, but can rely on more developed economies to meet its development needs. The line that a large part of India’s factory industry must live by exports alone would place the industry and the workers employed at the mercy of international market forces and therefore in an increasingly helpless position. The implication that production for the home market can develop at a primitive technical and organisational level while production for export alone must be efficient and competitive is to turn national development priorities topsy-turvy, is therefore clearly unacceptable to the people.
Somewhere along India’s journey of industrialisation from the time it was wisely observed that once machinery and a network of railways were introduced into a vast country with rich resources there was no question of withholding the development of modern industry which would dissolve the hereditary divisions of labour, the real life prospect of decentralisation and the primacy of small scale production got derailed. The ruination of India’s handicraft and cottage industry was a pre-industrial phenomenon – brought on by the savage thrust of British colonialism in an earlier phase – and the process attained a new force in the second half of the nineteenth century and a new intensity since the end of the first world war. Today, the tenacity of small-scale production in India is an expression not of its innate viability, but of the incompleteness, on account of basic structural reasons, of the industrialisation process itself. It is above all a tribute to the plodding heroism of the working people involved in these sectors who are battling against tremendous odds, but heroism does not guarantee stability over the long term. Protection to the traditional industrial sector against ruinous competition from large scale industry, encouragement of methods involving the greater employment of labour and abjuration of modern methods in the production of certain specified non-essential commodities are welcome short term and transitional measures which will not, however, confer on the ‘decentralised’ sector the boon of happy existence. And this applies as much to agriculture – where Mr. Charan Singh’s strategy for the development of an agrarian structure based on a free-wheeling and highly individualistic ‘peasant proprietorship’ is being discussed – as to the field of industry in which, according to the latest resolution of the Janata Party, “what can be produced by cottage industry shall not be produced by the small scale industry and what can be produced by the small scale sector shall not be open for the large scale industry”.
The effort to get out of the rut of a particular type of planning now threatens to degenerate into an exercise that bears no relevance to the development needs of a poor country such as India. A correct relation is yet to be established between industry and agriculture and among different sectors of industry and the contraposing of agriculture (which must undoubtedly be the foundation of India’s national economy for a long time to come) with industry (which has already become the leading factor) is unwarranted and most disturbing. At a time when the country urgently needs a new planning vision based on alertness to world-wide developments in science and production and on an undogmatic evaluation of resources at the grass roots, the debate on economic policy within the ruling party has ceased to be edifying – since it seems to beg the big question of mobilisation of resources for planning.
Reference:
The First 100
A Selection of Editorials, 1878-1978, THE HINDU, VOLUME I