What went wrong with Indian Independence? chapter - 8
The influence of the Stalinist socialists model as also the convenience of the elite to denominate in the industrial field where they had little knowledge and experience had a large influence on post-independence planning. Accelerated industrialisation and rapid advancement of science and technology became a centrally important objective. The idea was to ;put India amongst the ranks of the most advanced countries of the world.
To build up the capital for the new industry a WHO system was devised for exploitation of the surplus in agriculture and armoury of instruments was developed that included export restrictions, governmental dumping from abroad, restricbear the risk involved in any industrialisation n domestic trade, storage, movement, compulsory procurement and levies as also an artificially inflated rate of exchange for the Rupee. The system and the armoury of instruments are very much in use till today. The industrialisation in addition to capital, requires technology, machinery and invention. Even more important is the availability of entrepreneurs who have the courage to venture in uncharted fields and bear the risks involved in any industrial enterprise. Enterprise was in short supply in order to make up for this scarcity a comprehensive policy was chalked out. The masses of the backward communities were charged with Artisan, handicrafts, village industries for generations together. They had developed their own, however, ramshackle and primitive technology, which was handed over and developed from generations to generations. They had their small equipment and instruments. Their ware had a guarantee demand in the surrounding villages themselves. Carpenters, coppersmiths, conters, weavers ... all had ;assured markets. Their spare production could be disposed off in the market towns and at fairs. All these village industries had been ruined by policies of the British to promote the import of manufactured goods from Great Britain. Shiploads of cheap and superior manufactured wares flooded the Indian markets and the output of the local artisans could not held their own against this unequal competition with the exception of textiles, copper, brass-ware and art-ware. Most artisans had been reduced to ;working for supplying instruments and outils required for the farm operations in the surrounding areas. During the British Raj, a few cotton genes, textile mills and the steel factory at Jamshedpur came up as the only units of modern industry Some of the innovative princely states had encouraged industrialists like Kirloskars and Ogales to build their small factories During the period of the Second World War, these small industries received a sudden Philip The hostilities had restricted movements of ships. The imports had been strictly curtailed. To meet emergent situation it became necessary for he British rulers to encourage industries of this type, When the Independence came this was all that stood as industry on the territory of the new Republic.
JAPANESE INDUSTRY AND AGRICULTURE
There was no alternative but to import technology from the western countries. Two methods were open for this. The first may be called the Japanese method. Japanese Government had sent thousands of young ones to western countries to make an in-depth study and have comprehensive experience of the industry there. When these young men returned to the motherland, the Japanese Emperor and the Government keen on promoting indigenous industry follow a set of policies. The Japanese consider the western people as uncultured and primitive nations that dominated the world, nevertheless, because of their advancement in science and technology. Japanese, on the other hand represented a rich culture and a superior race. It was their backwardness in science and technology that humiliated the Japanese. If only they could correct this deficiency they could dominate the west even in the modern age. It was in this fervour and spirit that the Japanese government and the people set out to industrialise themselves. Japan has very limited land and a large population. It was dependent on the rest of the world for not only minerals like petroleum and iron but also for its day to day requirements of food. The farmers had to be encouraged to produce more. Thus the Government did by introducing policies that were the exact opposites of the Nehruvian policies. A policy was adopted to ensure that the farmers got remunerative prices. All import of food-grains were banned. Farmers were assured of support prices that were several times higher than those in the international markets. The Japanese peasantry suddenly found that they had come into some money. They used it to start cottage industries with the help of the young men who had returned with deep knowledge and wide experience of western industries. Japanese cottage industries copied unashamedly the designs of the western products. In India refugees from Sindh from Pakistan have built up an industry of this type in the Ulhas Nagar region near Bombay. The quality of the product was not very high but they were priced at ridiculously cheap levels. For some time the term, “Japanese goods” came to be synonym with low quality and cheap prices.
The Japanese Emperor tried yet another experiment. Japan had a large number of celebrated families reputed for their bravery in wars and other eminent accomplishments. The loyalty of these families to the Emperor was beyond question. Each member of these families would have gladly died to fulfil even the slightest wishes of the Emperor, whom they respected as the descendent of the Sun God. The Emperor ordained them to start new industries and opened up the imperial tragedy for their use The princely ruler of Aundh, a small State in Maharashtra, gave comparatively less support but succeeded in having two large industries in the little territory he had. The encouragement of the Japanese Emperor was much larger. Japan also had a tradition of discipline and obedience. Non complained about the Emperor’s partiality to the great dynasties, the new industrial families helped the cottage industries in the countryside to increase production. The quality of the goods improved little by little. Today, Japan stands, in spite of its limited natural resources, as an industrial super-power, unparalleled in fields like Informatics, Automobiles, Optics etc.
It would have been inconceivable to implement the Japan-like policy of industrialisation in India. India lacked a central, political, institution that commanded abounding respect from all the people. The society was fractured due to the caste system. Those who followed productive vocations enjoyed neither prestige nor authority. It was the priestly class which had the commanding heights in all matters. The warrior caste had been subjugated by incessant and glottal aggressions for over thirteen centuries. They had developed a life-style of meekly submitting before the invading talents or joining their ranks and using the power thus acquired for tyrannising the poor masses. In this kind of a situation which community could have taken the lead to assure in a new era of science and technology? This task was beyond the scope of those who lived by village industries and small crafts. The younger generation of the upper caste educated community had little interest in technology or industry. The British Raj had introduced new systems of land tenure, drawn up revenue maps and made changes in the ownership pattern. This created an abundance of legal suits in civil courts all over the century. The idea that an aggrieved citizen could go before a court of law and ask for justice was itself very novel in a phrasal society. Everybody who was unhappy at the changes tried to engage a lawyer to appear before the court. In most of the cases, as Jyotiba Phule has described it, one lawyer spoke in a language that his client did not understand . The lawyer of the adversary spoke in a language that neither party understood. The judgement was again delivered in a language and manner that neither party could understand. All the same, starting from Tehasil court to the High Courts in Presidency towns, legal practice became a highly lucrative business. Everybody wanted to be a lawyer. The brilliant students from the educated classes who could go abroad for education, used the opportunity not for developing technological expertise, but for advanced studies in law. Becoming a Bar-At-Law was considered as the highest accomplishment to work for and to dream of. A few of them did appear for the examination for the Indian Civil Service with the objective of getting a prestigious position of power ;in the administration. Very few succeeded. Most of the leaders ;of the Indian National Congress were those who barely managed to get a Bar-At-Law which could be obtained by giving a dinner for 12 Guineas to the Members of the Temple Inn.
In rare exceptional cases some studied Medicine, most broad studying anything that could lead to a vocation where one had to soil one’s hands. Engineering, Industry, Management and other connected fields were mostly ignored.
WHITE COLOURED INDUSTRY
There was no way India could obtain the frontier technology, that was advancing very rapidly in the west. If the mountain does not come to Mohammed, Mohammed has to go to the mountain. In a country with large population like India, where whatever small industry that existed was being managed by the iron smiths, copper smiths, cobblers, carpenters, others belonging to inferior caste, had to come in contact with the technology. The Government could have imposed restrictions on the imports of manufactured articles from abroad, and given and encouraged instead foreign investments. If the common craftsmen had got directly in touch with the western industry, they would have easily assimilated and disseminated technology. The caste which had had no opportunity for any kind of education till the arrival of the British had schools opened for them by the British. Jyotiba Phule said, “Lack of education means less of intelligence. Without intelligence their can be no morality and with morals gone everything is lost. By education, Phule certainly did not mean learning of the three R-s. If the younger generation of the productive caste lose this opportunity of getting acquainted with the western Science and technology and if they continue to use old indigenous methods for their crafts and industries the opportunity may be lost forever
If the British left and India gains political independence, it would make little rate difficult even in the newly independent India. The dominance will be enjoyed by the unproductive castes, said Phule. Briefly, Independence will mean restoration of the Peshwai, i.e. ruled by the elitist caste. This was the comprehensive meaning of the Phule’s gospel. Unfortunately, the school of thought that Phule represented, which considered that said reforms should have priority over the political programme and independence lost. The freedom movement with its jingoistic slogans ;required abhorrence not only of the British administration but also of the industrial culture of the British succeeded. In spite of the contact with the world then most advanced industrial power India ;at independence was as backward, relatively speaking, at the end of the Raj as at the beginning of it.
The new Rulers of India were western educated and proud of their familiarity with the English language. They had fixed ideas of their own about the manner of industrialising India. With the help from western countries, they opened institutions of higher education for Engineering, Industry, Management etc. Most of the students admitted to these institutions were from upper caste urban communities. A few decades back when law was in quative (initiative?), they would have studies law, now that new dawn of industry was coming. They wanted technical education But with the mind set ;at the lawyer, they would not of liked to soil their hands in vocations traditionally considered to be fit only for the lowly castes. The Government hopes that this class of young engineers given appropriate encouragement could be very useful in the jobs in new industries; The new industries will mostly be in the public sector, which factories to open? Where to open them? And what should be their production capacity? What technology to use and where from to obtain it? All these decisions were to be taken in Delhi Govt was to enter into collaborations agreements with foreign governments and industrialists for establishing factories.
As it happened, this policy suited eminently the interests of the foreign governments as also the industrialists. During the period before the Second World War English sent to its colonies textile goods and similar other wares required for consumption. India was considered to be a very paying consumer market The times had changed since then. During the period of the war the industrial capacity in England had expanded enormously to meet the needs of the fighting forces In order to win the war, a new industry that could manufacture machines for the consumers industries had come out. At the end of the war, a serious problem for the governments of European nations was about the disposal of the machines manufactured by the machine building industry. Disposal of textiles and other consumer limes was relatively unimportant They needed vast markets for machinery. Then policies of newly liberalised colonial powers of putting up indigenous industries by installing western machinery and using ;western technology suited them to the last letter. The new industries were national only in location. In all other respects they were replicas of their counterparts in ;the old metropolitan countries.
Industrialisation began with all the fanfare but did not reach the technology to the broad masses in the country. The vast majority of lower caste people did not get even a touch of it. Those who had generation long tradition of crafts and industry remained deprived of the advantages of the technology which come up to the sites of the new industries but did not percolate further down.
The Government did give some encouragement to small scale industries. But the technology for those industries was determined not by the industrialists with the information about alternatives, but trickle own through the leaky pipeline of the governmental machinery.
HEAVY INDUSTRIES OF THE RUSSIAN MODEL
Priorities in Industry were substantially influenced by the Soviet model. The government accorded highest priority to mining, heavy industries, generation of power, steel, cement etc. The idea was that once the basic materials become available infrastructure was laid down. Opening of industries would become fairly simple. This strategy on the Soviet model was authored by Dr Mahalnobis ;of the Indian Statistical Institute, Calcutta. It was also supported by a large number of European and Scandinavian economists, who were invited to give advice. The barrage of Bhakra-Nangal was completed in quick time. Steel plants were erected at Bhilai, Durgapur etc. A number of new industrial township sprang up. The alumni of the new engineering institutions masqueraded as engineers dressed in impeccable whites. The nation at its roots remained unaltered.
SHODDY GOODS AT EXPENSIVE PRICES
Those who became engineers, managers, industrialists came from a community which had, for generations together, never soiled their hands by working on agriculture or by using any of the implements of crafts or industry. These are the people who had become pleaders ;if law would have continued to be a paying vocation. They had little notion of entrepreneurship. They used a technology that was approved by the government , used the machinery that could be obtained with governmental licences and permits, obtained finance from nationalised banks and counted on governmental subsidies and credit. This kind of hollow entrepreneurship could only produce at very high cost, for which there could be no takers. The village artisans had somehow managed to survive in face of the competition from advanced alien industrialists. This new class of ;industrialists was not capable of even that. They cried for governmental help and the government obliged by imposing restrictions on imports from abroad under the name of promoting national autonomy and protecting ;infant industry. Typical ;import duties ;were as high as 150 to 200 per cent. Consequently the producers abroad lost interest in Indian .markets and ;the Indian consumers became helpless victims of the pseudo-industrialists in India who suffered from paucity of goods, long waiting lists exorbitant prices and shoddy quality. In a typical case, the Indian consumer was required to pay three times the price than the international price and buy poor quality goods. Those who obtained “fiat” or an Ambassador car at high prices, waiting in the queue for 10 to 15 years, considered themselves lucky to have got a car at all.
Industrial goods became expensive ; the cost of production of all the things which used industrial produce went up. In the rest of the world a tractor costed 40 - 50,000 Rupees. The Indian farmer had to purchase the same at four times the price in Indian market. The overall consequence was that the Indian goods lost the international market.
BURDEN OF GOVERNMENTAL MACHINERY
Running of the machinery was economic planning became an expensive affair . Moneys had to be raised for investment as also for meeting the administrative expenditure. The Governmental taxation mounted all the time The Nadir was reached when Morarji Desai was the Finance Minister. In his budget the rate of income-tax was the highest bracket touched 95 per cent. The taxation made ;it even more difficult for the Indian producer to compete in the foreign markets. Economy became,. In its truest sense, a licence. permit, quota, control inspector system. The industrialists were required to pay taxes that were ;used, ;in the main part to pay for an establishment which considered it its first obligation to obstruct all enterprise and productivity. Even the honest tax payers could not escape harassment. The taxation officers continued persecution, nevertheless. The experience taught quite a number of industrialists to become wiser. Rather than pay taxes to the government, they found it much simpler to come to; an understanding ;with the taxation officer so that the officers gained, the industrialists were saved the tax burden and the government got only the blame. Thus developed a whole parallel economy The quantum of black money expanded by leaps and bounds to a point where the parallel economy was as large as the official one. As a matter of fact the productivity and efficiency in the parallel ;economy were much better . In spite of all, if the Indian socialist economy was saved from the kind of collapse experience by the Soviet economy, their credit must go to the parallel economy. The industrialists in the official sector were not bothered about either improving the quality of their goods or about reducing ;;the cost of production. They had a captive market where they could dictate terms to the helpless ;Indian consumer. The rates of profit went on increasing . ;In some sectors, ;it reached the dizzying levels of 200 - 300 per cent
THE NEW LABOUR MOVEMENT
All this had a serious consequence on the labour movement. The Indian worker was never celebrated for his quality, assiduity or discipline. In the early days of industrialisation, the wage rates were very low. Workers had few perks and facilities. Any employee could be dismissed and there would be a hundred waiting in queue to replace him. Wages were not considered a serious burden by the employers. Poor work, poor wages was the dictum. The labour faced extreme hardships. The labour movement developed little by little but was still too weak to dictate its terms. The epoch of State owned industries ;changed all this. Shri N M Joshi, Ambekar and other leaders of their ilk worked hard and selflessly to build up an infant trade unionism. They were quickly replaced by the trade unions of the left, ;which made it a ritual to take ;industrial action for purely political reasons. This epoch of leaders like S A Dange, did not last long. A new generation of labour leaders, like R J Mehta, Datta Samant, came forward. Industrialists earned huge profits. But account for only a part of it. This was noticed by these new leaders Unions, they calculated, could ask for any hike ;in salaries, even 1500 to 2000 rupees at a go and if they could sustain a strike for some period the industrialists will find it cheaper to accept their demands rather than keep the production closed. The licence - permit Raj benefited a ;class of industrialists, who piled up profits by plundering the consumers They organised labour benefited from the situation by forcing their employers to hike their wages and perks all the time. The wage rates in India even today are low by international standards. However, the ;indiscipline inefficiency and ;laziness are so rampant that Indian labour at its cheap wages comes out to be expensive. Countries in eastern and south Asia that possess the ;hard working, efficient and cheap labour, found a way to become successful suppliers of accessories to the ;industrially advanced countries,. India could hardly follow this path.
Inefficiency and indiscipline crept into the public sector ;industries and one by one, they became losing propositions. Their losses were made up through the Central Budgetary allocations. Industries in the private sector too, started declining. The technology they used was ;second-hand and outdated even at the time it was obtained. Now it became obsolete. They passed on the squeeze to the small scale industrialists they had contracted with for the supply of spare parts and accessories. The small scale industries started closing down and false Facade of Nehruvian industrialisation stated crumbling. Systematic exploitation of agriculture had made this sector weak. The industry controlled by the incompetent bourgeois had an uneasy existence ;but this class managed to hold on to ;its influence on both the Economy and Polity. Indian Industry became the highest subsidised industry in the world. Very significantly, at the same time Indian agriculture was getting crushed under the highest level of negative subsidy. The Indian economy faced a crunch where the first independence experiment needed to be reviewed.
As if the nation had followed the ideas of Jyotiba Phule and started on a programme of education and enlightenment of the masses and of gradual up-gradation of skills of the people who, for generations had run the Indian crafts and industries, the captaincy of the Indian industry would have been in the hands of the people who were not afraid of soiling their hands. Indian industry would have prospered The Governmental investment in industry is the highest in Bihar. That continues to be industrially the most backward state. At the other end of the spectrum the farmers in Punjab, Haryana and Maharashtra had the benefit of remunerative prices for a brief period of five years from 1965 to 1970. The extra money was used by the farmers to start small industries This began a whole cycle of affluence for the trade, commerce as also for the industry. The Kolhapur District in Maharashtra and several village in Punjab provide an eloquent testimony of the truth of Phule’s vision. If the Industrial policy in the post-independence era were not self-contradictory and self-defeating, there is no reason to doubt that the country would have been ahead of any other Asian country in the field of ;industrial development.
During the socialist epoch, a number of governmental factories opened up at diverse places. They served useful purpose as tourists’ spots and sites to visit for important dignitaries on the visit to India. The Indian leaders were content to brag that they had industrial capacity that would match with that of any other country. The industrial development was a false facade which was certain to collapse. The collapse came sooner rather than later.