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4.
The Third Fundamental:
The Strategy for Economic Reform in a Globalised World
By all accounts of visiting dignitaries and travelers spread over several centuries, India was, by the prevailing standards of those times a prosperous, developed country—and that as recently as 1780 AD. Perhaps the level of inequality and the extent of poverty of a section of the people was excessive, but nevertheless it remains a fact that the trade of the world with India flourished over several centuries because India was producing and trading what a large part of the world did not or could not produce. As a consequence, India enjoyed a “massive” balance of trade surplus with Europe, and with most other parts of the world. Merchants came from all over the world to purchase goods from Indian markets.
But by 1870, the economy entered into a long phase of decline, which decline by 1947 (i.e., seven decades later), had transformed India from a pre-modern prosperous country to a poor underdeveloped nation judged by the modern industrial standards of the twentieth century. This unprecedented retrogression took place primarily because of the failure of Indian leadership to unite and harness scientific inventions, (such as the steam engine and blast furnace), for economic development- which the West had successfully done for itself. But the failure of Indian leadership was brought into abject reality by the heavy hand of British imperialism.
Tragically, India squandered a superb opportunity to develop quickly from 1947 onwards: during the Freedom Struggle, Mahatma Gandhi had built up leadership of quality at all levels, and there was a modicum of infrastructure, light industry and foreign reserves.
But alas, the adoption of the Soviet Model of centralized economic planning wasted all those advantages. The model was the anti-thesis of the Hindu concept of decentralization.
India’s economic strategy was borrowed from the USSR and foisted on the Indian people in the Fifties by Jawaharlal Nehru – without much debate. This was not the strategy that Mahatma Gandhi or Sardar Patel had advocated during the freedom struggle.
to be continued...
( This account is maintained by Har Anand Publication)