indian liberal tradition
DESCRIPTION
It is often believed that ideas of economic freedom and reforms are “not Indian” and have been imported from the West under circumstances outside our control (such as the balance of payments crisis necessitating the economic reforms of 1991 at IMF's behest). However, research into modern Indian history showcases the rich indigenous liberal tradition that stood against ideas of a planned economy and society.TRANSCRIPT
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Then and Now
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o “Dissolve the Planning Commission and scrap the disastrous Five-year plan”– From the Manifesto of the
Swatantra Party, General Elections of 1967
o “…and therefore within a short period, we will replace the Planning Commission with a new institution…”– Prime Minister Narendra Modi,
15 August 2014
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Then and Now
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LPQ to LPG
o pre-1991– License-Permit-Quota (LPQ) Raj– Centralised Planning (Five-year plans)
o post-1991– Liberalisation-Privatisation-Globalisation
(LPG)– not for all (small entrepreneurs, MSMEs)
o Manmohan Singh or IMF
o Is Economic Reform (LPG) a FOREIGN idea?
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Left, Right or Centre
o Left, Right or Centre?
o Who is a liberal?
o Liberals: Indians or Foreigners?
Indian Liberal Tradition | www.ccs.in
An Outline
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o Individuals
o Organisations
o Literature
All championed individual liberty and free markets; and questioned India’s embrace of socialism and the resulting big State
Free Banking
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“…what is so dangerous and ought to be done away with is not governments' right to issue money but the exclusive right to do so and their power to force people to use it and to accept it at a particular price.” – F. A. Hayek, Nobel laureate in Economics, 1976
“In Hong Kong, Scotland, and Northern Ireland, private banks issue banknotes redeemable for the national currency.”
- Thomas L. Hogan, Economist, 2012
India’s own Free Banker
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“…a managed currency is to be altogether avoided when the management is to be in the hands of the Government. When the management is by a bank there is less
chance of mismanagement. For the penalty for imprudent issue, or
mismanagement is visited by disaster directly upon the property of the issuer.
But the chance of mismanagement is greater when it is issued by Government
because the issue of government money is authorised and conducted by men who
are never under any present responsibility for private loss in case of bad judgement or mismanagement.”
(1924-25)
B. R. Ambedkar(1891-1956)
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Central Planning o “by centralization all progress tends to be retarded, all
initiative liable to be checked and the sense of responsibility of Local Authorities greatly impaired….centralization conflicts with what may be regarded as a cardinal principle of good government… the higher authority must be less competent than the lower, because it cannot by any possibility posses the requisite knowledge of all local conditions.”
– B. R. Ambedkar (1916)
o “… the knowledge of the circumstances of which we must make use never exists in concentrated or integrated form, but solely as the dispersed bits of incomplete and frequently contradictory knowledge which all the separate individuals possess… We need decentralization because only thus can we ensure that the knowledge of the particular circumstances of time and place will be promptly used.”
– F. A. Hayek (1945)
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Agriculture
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o “…monopoly procurement, which would be at controlled price, is apt to enforce the price penalty on farmers with ruthless efficiency, much more so than under competitive procurement. Monopoly procurement, therefore, might decelerate output and thereby add to the upward price pressures.” – B. R. Shenoy (1968)
o “…the states have been asked to delist certain items, which are usually procured through agriculture produce marketing committees (APMC), so that they come into the open market.”– Arun Jaitley, Finance Minister (June
2014)
B. R. Shenoy (1905-78)
o In his “Dissent Note” to 2nd Five Year Plan (1956-61), B R Shenoy “warned that the attempt to maintain high investment rates through deficit financing would inevitably lead to a serious balance of payments problem”
o The flaws in the Second Plan were revealed within a year, when India faced a serious balance of payments problem in 1957, just as Shenoy had predicted.
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Education
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o “…the village schools were not good enough for the British administrator, so he came out with his programme. Every school must have so much paraphernalia, building, and so forth…” – M. K. Gandhi (October 1931, London)
o Input focused: Section 18 & 19 of RTE Act 2009
o “There will be no compromise on school infrastructure norms.”– Punjab Education Minister (in a
meeting with Punjab Private Schools Organisation, September 2014)
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Gandhi
o “The State represents violence in a concentrated and organised form. The individual has a soul, but as the state is a soulless machine, it can never be weaned from violence to which it owes its very existence.”
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Private Property
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o “There can be no individual freedom unless the right to property is guaranteed protection. Where the possession of property is treated almost as a crime and the right denied or consigned to uncertainty, individual freedom becomes an unreality.” – Rajaji
o Right to Property as enshrined in Article 19(1)(f) (read together with Article 31) of the Constitution was a Fundamental Right.
o 44th Amendment to the Constitution, 1978, both Article 19(1)(f) and Article 31 were deleted.
C. Rajagopalachari (1878-1972)
C. Rajagopalachari (1878-1972)
o Gandhi’s conscience-keeper
o Last Governor-General of India, Minister of Home Affairs, Chief Minister of Madras state…
o Founder of Swatantra Party
o “Political freedom cannot survive unless sustained by economic freedom.”
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Minoo Masani (1905-98)
o A three time Member of Lok Sabha
o Leading figure in the Swatantra Party, and founding member of the Indian Liberal Group
o Spontaneous journey to liberalism Admirer of the Soviet Union -> A
freedom fighter. A socialist in 1930s -> Disillusioned
with Soviet Communism. A thoughtful reconsideration of
socialism in 1940s -> An anti-communist crusader in early 1950s. 16 Indian Liberal Tradition | www.ccs.in
Nani Palkhivala (1920-2002)o Jurist and economist, defender of
constitutional liberties and champion of human rights
o “India is not poor by nature but poor by policy.” (1990)
o Budget speeches, defense of Basic Structure Doctrine of the Constitution
o “The sleeping sickness of socialism is now universally acknowledged…These public sector enterprises are the block holes, the money guzzlers, and they have been extracting an exorbitant price for India’s doctrinaire socialism” (1990)
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A. D. Shroff (1899-1965) o An eminent industrialist, banker and
economist
o Shroff was founder-director of the Investment Corporation of India and company chairman of Bank of India and the New India Assurance Company Limited
o Started Forum of Free Enterprise in 1956
o Shroff was totally opposed to wide ranging regulations which stifled individual initiative and enterprise and encroached on personal liberties
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Indian Liberals
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o B. R. Ambedkar
o B. R. Shenoy
o M. K. Gandhi
o C. Rajagopalachari
o Minoo Masani
o Nani Palkhivala
o A. D. Shroff
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Forum of Free Enterprise
o “… the Forum of Free Enterprise will continue to do its good work of educating the country against the menace of state capitalism which socialism and communism seek to introduce.”– A. D. Shroff (1959)
o Battling fallacies– First three FYPs were a success - record
average GDP growth (Nehru, Bhagwati, Panagariya)
– Thanks to the Emergency, inflation in India was kept low and even reversed (GoI, January 1976)
– Inflation is an inevitable by-product of development (Nehru)
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Swatantra Party (1959-74)
o “since... the Congress Party has swung to the Left, what is wanted is not an ultra or outer-Left [viz. the CPI or the Praja Socialist Party, PSP], but a strong and articulate Right”
- Rajaji (Our Democracy)
o founded by Rajaji in reaction to what he felt was the Jawaharlal Nehru-dominated Indian National Congress's increasingly socialist and statist outlook.
o Swatantra (Freedom) stood for a market-based economy with the "Licence Raj" dismantled
o The original “Party with a Difference”o Until Swatantra came on the scene criticising
socialism was unthinkable o While the Congress emphasised the collective and the
primacy of the State, Swatantra stood for the primacy of the individual vis-à-vis the State
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Swatantra Party (1959-74)
o First the Rapid Rise …
– 1962 general election (18 seats, 6.8% of popular votes)
– 1967 general election (44 seats, 8.7% of popular votes)
o … and then the Equally Rapid Crash
– 1971 general election (8 seats, 3% of popular votes)
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Liberal Periodicals
o Freedom First (1952 – present)– Minoo Masani and S. V. Raju,
Bombay
o Swarajya (1956 – 1980)– Rajaji and Khasa Subba Rao,
Madras
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(Re-launched September 2014)
Liberal Periodicals
o The Indian Libertarian (1954 – 1980)– R. B. Lotvala, Bombay
o Forum of Free Enterprise (1956 – present) – A. D. Shroff, Bombay
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Indian Liberals Today
o Loksatta, Hyderabad
o Liberty Institute, New Delhi
o Indian Liberal Group, Mumbai
o Students for Liberty chapters around the country
o Centre for Civil Society, New Delhi and Mumbai
o Centre Right India, Takshashila Institute & Pragati, Swarajya
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Conclusion
So, is Economic Freedom (LPG) a FOREIGN idea?
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Indianliberals.in
o An online library
o Completely searchable and not-gated
o Materials also in Indian regional languages (Marathi, Tamil, Gujarati, etc.)
o Audio/video
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Indian Liberal Tradition
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Thank You!