# Indian Liberals — full corpus dump > Every Tier-A entry in full, plus every Tier-B summary, one file. > See /AGENTS.md for the citation rules and tier system. > Generated at 2026-05-27T07:15:01.781Z. --- # Thinkers ## [Thinker] A. C. Chhatrapati URL: https://indianliberals.in/thinkers/a-c-chhatrapati/ --- ## [Thinker] A. D. Cohen URL: https://indianliberals.in/thinkers/a-d-cohen/ --- ## [Thinker] A. D. Shroff URL: https://indianliberals.in/thinkers/a-d-shroff/ ### Body Ardeshir Darabshaw Shroff (1899–1965) was an eminent industrialist, banker, and economist. He was one of the architects of free India's banking and insurance business. Shroff was amongst the earliest proponents of free enterprise in India. In 1944, Shroff served as a non-official delegate at the United Nations "Bretton Woods Conference" on post-war monetary and financial systems. Shroff also co-authored the Bombay Plan, a set of proposals for the development of the post-independence Indian economy. In the 1950s, Shroff was the founder-director of the Investment Corporation of India and the company chairman of Bank of India and the New India Assurance Company Limited. In 1956, Shroff co-founded the Forum of Free Enterprise, a think-tank, as a means to counter the socialist tendencies of the Nehru government. Through FFE, Shroff sought to educate students and the common man about the sound principles of economics. Later in 1959, Shroff would also play a role in founding the Swatantra Party. Upon his early demise in 1965, the A D Shroff Memorial Trust was set up in his memory. --- ## [Thinker] A. N. Agarwala URL: https://indianliberals.in/thinkers/a-n-agarwala/ --- ## [Thinker] A. S. Ganguly URL: https://indianliberals.in/thinkers/a-s-ganguly/ --- ## [Thinker] A. P. J. Abdul Kalam URL: https://indianliberals.in/thinkers/a-p-j-abdul-kalam/ --- ## [Thinker] A Ranganathan URL: https://indianliberals.in/thinkers/a-ranganathan/ --- ## [Thinker] Abhay Pethe URL: https://indianliberals.in/thinkers/abhay-pethe/ --- ## [Thinker] Abhaya Prasad Hota URL: https://indianliberals.in/thinkers/abhaya-prasad-hota/ --- ## [Thinker] Abraham Lincoln URL: https://indianliberals.in/thinkers/abraham-lincoln/ --- ## [Thinker] Adi Godrej URL: https://indianliberals.in/thinkers/adi-godrej/ --- ## [Thinker] Achyut Patwardhan URL: https://indianliberals.in/thinkers/achyut-patwardhan/ --- ## [Thinker] AG Mulgaokar URL: https://indianliberals.in/thinkers/ag-mulgaokar/ --- ## [Thinker] Ajit Bhattacharjea URL: https://indianliberals.in/thinkers/ajit-bhattacharjea/ --- ## [Thinker] Ajit Karnik URL: https://indianliberals.in/thinkers/ajit-karnik/ --- ## [Thinker] Adam Smith URL: https://indianliberals.in/thinkers/adam-smith/ --- ## [Thinker] Ajit Narde URL: https://indianliberals.in/thinkers/ajit-narde/ --- ## [Thinker] Albert O. Hirschman URL: https://indianliberals.in/thinkers/albert-hirschman/ --- ## [Thinker] Aldous Huxley URL: https://indianliberals.in/thinkers/aldous-huxley/ --- ## [Thinker] Alexis de Tocqueville URL: https://indianliberals.in/thinkers/alexis-de-tocqueville/ --- ## [Thinker] Alexander Duff URL: https://indianliberals.in/thinkers/alexander-duff/ --- ## [Thinker] Amartya Sen URL: https://indianliberals.in/thinkers/amartya-sen/ --- ## [Thinker] Ambrish Mehta URL: https://indianliberals.in/thinkers/ambrish-mehta/ --- ## [Thinker] Anand Sinha URL: https://indianliberals.in/thinkers/anand-sinha/ --- ## [Thinker] Amul Desai URL: https://indianliberals.in/thinkers/amul-desai/ --- ## [Thinker] Amitabh Kant URL: https://indianliberals.in/thinkers/amitabh-kant/ --- ## [Thinker] Anandibai Joshee URL: https://indianliberals.in/thinkers/anandibai-joshee/ --- ## [Thinker] Anant Umrikar URL: https://indianliberals.in/thinkers/anant-umrikar/ --- ## [Thinker] Anu Aga URL: https://indianliberals.in/thinkers/anu-aga/ --- ## [Thinker] Arvind Deshpande URL: https://indianliberals.in/thinkers/arvind-deshpande/ --- ## [Thinker] Arvind Lalbhai URL: https://indianliberals.in/thinkers/arvind-lalbhai/ --- ## [Thinker] Asghar Ali Engineer URL: https://indianliberals.in/thinkers/asghar-ali-engineer/ --- ## [Thinker] Ashima Goyal URL: https://indianliberals.in/thinkers/ashima-goyal/ --- ## [Thinker] Anil Patel URL: https://indianliberals.in/thinkers/anil-patel/ --- ## [Thinker] Ashok Desai URL: https://indianliberals.in/thinkers/ashok-desai/ --- ## [Thinker] Ashok Mehta URL: https://indianliberals.in/thinkers/ashok-mehta/ --- ## [Thinker] Ashwin Karia URL: https://indianliberals.in/thinkers/ashwin-karia/ --- ## [Thinker] Ashwinkumar N. Kariya URL: https://indianliberals.in/thinkers/ashwinkumar-n-kariya/ --- ## [Thinker] Atal Bihari Vajpayee URL: https://indianliberals.in/thinkers/atal-bihari-vajpayee/ --- ## [Thinker] Ayub Khan URL: https://indianliberals.in/thinkers/ayub-khan/ --- ## [Thinker] Ashok Mitra URL: https://indianliberals.in/thinkers/ashok-mitra/ --- ## [Thinker] Azim Premji URL: https://indianliberals.in/thinkers/azim-premji/ --- ## [Thinker] Azizun Nisa URL: https://indianliberals.in/thinkers/azizun-nisa/ --- ## [Thinker] B. A. Tarlton URL: https://indianliberals.in/thinkers/b-a-tarlton/ --- ## [Thinker] B. G. Rao URL: https://indianliberals.in/thinkers/b-g-rao/ --- ## [Thinker] B. N. Adarkar URL: https://indianliberals.in/thinkers/b-n-adarkar/ --- ## [Thinker] Sir B. Rama Rau URL: https://indianliberals.in/thinkers/b-rama-rau/ --- ## [Thinker] B. S. Mahajan URL: https://indianliberals.in/thinkers/b-s-mahajan/ --- ## [Thinker] B. Shiva Rao URL: https://indianliberals.in/thinkers/b-shiva-rao/ --- ## [Thinker] B. R. Shenoy URL: https://indianliberals.in/thinkers/b-r-shenoy/ ### Body Professor Bellikoth Ragunath Shenoy (1905–1978) was a classical liberal economist. Born on June 3, 1905, near Mangalore, Karnataka, he was educated at the Benares Hindu University (where he secured a first-class first at the MA Economics Exam in 1929) and later at the London School of Economics (LSE). As a student, he actively participated in the freedom struggle and was jailed at Nagpur. At LSE, he was inspired by the ideas of Professor Friedrich Hayek who later won the Nobel Prize in Economics. During his LSE stint, two of his papers, “An Equation for the Price Level of New Investment Goods” (1931) and “Interdependence of Price Levels” (1933) appeared in the Quarterly Journal of Economics which established him as an upcoming monetary economist. He was perhaps the first Indian economist to have a paper published in a leading scholarly journal. After returning to India, Shenoy taught at Wadia College (Pune), Gujarat College (Ahmedabad) and University of Ceylon. He was associated with various Government Bodies of Ceylon (now Sri Lanka) including the Commission on Currency and the Department of Commerce. In 1942 he was appointed the Principal of L D Arts College, Ahmedabad. He would join the Reserve Bank of India in 1945. During his RBI days, he was the Far Eastern Representative of the IMF (1948) and an Alternate Executive Director of IMF as well as of the World Bank (1951-53). In 1954, Shenoy joined Gujarat University as the first Director of its School of Social Sciences, a position which he retained till 1968. During this period he made substantial contributions to Indian Economic Policy debates, most notably his “Note of Dissent to the Second Five Year Plan” and Madras University Lectures entitled “Problems of Indian Economic Development.” His notable contributions to various policy issues like PL480 food imports, deficit financing, inflation, and economic development were marked by technical competence and analytical ability. After leaving Gujarat University in 1968, he founded the “Economic Research Centre” in Delhi and tirelessly espoused the cause of liberalism in India till he passed away on 8th February 1978. He was President of the Indian Economic Association in 1957, Visiting Professor at his alma mater, LSE in 1966 and a member of the internationally prestigious Mont Pelerin Society. His publications include “Ceylon Currency and Banking” (1941), “The Sterling Assets of the Reserve Bank of India” (1953), “Problems of Indian Economic Development” (1956), and “PL480 and India’s Food Problem” (1974) apart from various articles in scholarly journals, both Indian and international. A collection of his writings “Planned Progress or Planned Chaos” edited by Professors Mahesh Bhatt and S. B. Mehta was published in 1996. PL480 and India’s Food Problem (1974). Planned Progress or Planned Chaos? (East West Books, 1996). The Post-War Depression: The Way Out (Kitabistan, 1944). Ceylon Currency and Banking (Longman, Green and Company Limited, 1941). The Sterling Assets of the Reserve Bank of India (Indian Council of World Affairs, 1946). The Indian Economic Scene: Some Aspects (1957). Indian Economic Crisis: A Program for Reform (Economics Research Centre, 1968). Problems of Indian Economic Development (University of Madras Press, 1958). Indian Planning and Economic Development (Asia Publishing House, 1963). Fifteen Years of Indian Planning (1966) Indian Economic Policy (Humanities Press, 1968). Food Crisis in India: Causes and Cure (1974) Economic Growth with Social Justice (Forum of Free Enterprise, 1980). The Bombay Plan, A Review of Its Financial Provisions (Karnatak Pub House, 1944). Indian Planning and The Common Man (Forum of Free Enterprise, 1962). Report on the Economic Survey of Kurunegala District (Ceylon Government Press, 1940). Economic Policy Resolution of AICC at Bangalore and Indian Economic and Social Progress (Economic Research Center). PL480 and Indias Food Problem (1974) Planned Progress or Planned Chaos? (East West Books, 1996) The Post-War Depression: The Way Out (Kitabistan, 1944) Ceylon, Currency and Banking (1941) The Sterling Assets of the Reserve Bank of India (1953) Problems of Indian Economic Development (1956) The Indian Economic Scene: Some Aspects (1957) Economic Prophecies Other Writings A Note of Dissent on the Memorandum of the Panel of Economists Economic Situation and Trends in Ceylon – A Programme of Reform Theoretical Vision, edited by R K Amin & Parth J Shah (Centre for Civil Society, 2004) Liberalism and Less Developed Countries: Essay in Memory of Professor Bellikoth Raghunath Shenoy (Gujarat University, 1982) Some Basic Economic Ideas of Prof. B R Shenoy (Economic Research Center, 1998) An Equation for the Price Level of New Investment Goods (Quarterly Journal of Economics, 1931) Interdependence of Price Levels (Quarterly Journal of Economics, 1933) Correspondences Shenoy-Hayek Correspondences (Set I, Hoover Institution Archives) Shenoy-Hayek Correspondences (Set II, Hoover Institution Archives) Published On The Indian Libertarian Volume : 5 ;Issue: 15 1  October 1957 The Indian Libertarian Volume : 5 ; Issue: 18 1  December 1957 --- ## [Thinker] Babytai Kamble URL: https://indianliberals.in/thinkers/babytai-kamble/ --- ## [Thinker] Bal Gangadhar Tilak URL: https://indianliberals.in/thinkers/bal-gangadhar-tilak/ --- ## [Thinker] Begum Rokeya URL: https://indianliberals.in/thinkers/begum-rokeya/ --- ## [Thinker] Benjamin Tucker URL: https://indianliberals.in/thinkers/benjamin-tucker/ --- ## [Thinker] Bernard Iddings Bell URL: https://indianliberals.in/thinkers/bernard-iddings-bell/ --- ## [Thinker] George Bernard Shaw URL: https://indianliberals.in/thinkers/bernard-shaw/ --- ## [Thinker] BG Verghese URL: https://indianliberals.in/thinkers/bg-verghese/ --- ## [Thinker] Bhaskar G. Kakatkar URL: https://indianliberals.in/thinkers/bhaskar-g-kakatkar/ --- ## [Thinker] B. R. Ambedkar URL: https://indianliberals.in/thinkers/bhimrao-ambedkar/ --- ## [Thinker] Bibek Debroy URL: https://indianliberals.in/thinkers/bibek-debroy/ --- ## [Thinker] Sir Biren Mookerjee URL: https://indianliberals.in/thinkers/biren-mookerjee/ --- ## [Thinker] Bhanu Pratap Singh URL: https://indianliberals.in/thinkers/bhanu-pratap-singh/ --- ## [Thinker] BK Nehru URL: https://indianliberals.in/thinkers/bk-nehru/ --- ## [Thinker] BP Adarkar URL: https://indianliberals.in/thinkers/bp-adarkar/ --- ## [Thinker] BP Godrej URL: https://indianliberals.in/thinkers/bp-godrej/ --- ## [Thinker] BS Sanyal URL: https://indianliberals.in/thinkers/bs-sanyal/ --- ## [Thinker] Bradley D. Belt URL: https://indianliberals.in/thinkers/bradley-d-belt/ --- ## [Thinker] C. K. Daphtary URL: https://indianliberals.in/thinkers/c-k-daphtary/ --- ## [Thinker] C. P. Ramaswamy Ayyar URL: https://indianliberals.in/thinkers/c-p-ramaswamy-ayyar/ --- ## [Thinker] C. Rajagopalachari URL: https://indianliberals.in/thinkers/c-rajagopalachari/ --- ## [Thinker] C. Rangarajan URL: https://indianliberals.in/thinkers/c-rangarajan/ --- ## [Thinker] C. S. Deshpande URL: https://indianliberals.in/thinkers/c-s-deshpande/ --- ## [Thinker] BS Iyer URL: https://indianliberals.in/thinkers/bs-iyer/ --- ## [Thinker] Dr. C. L. Dadhich URL: https://indianliberals.in/thinkers/c-l-dadhich/ --- ## [Thinker] C. S. Seshadri URL: https://indianliberals.in/thinkers/c-s-seshadri/ --- ## [Thinker] C. Y. Chintamani URL: https://indianliberals.in/thinkers/c-y-chintamani/ --- ## [Thinker] C. S. Venkatachar URL: https://indianliberals.in/thinkers/c-s-venkatachar/ --- ## [Thinker] Carlos P. Romulo URL: https://indianliberals.in/thinkers/carlos-romulo/ --- ## [Thinker] Chakravarti Ashok Priyadarshi URL: https://indianliberals.in/thinkers/chakravarti-ashok-priyadarshi/ --- ## [Thinker] Chanaka Amaratunga URL: https://indianliberals.in/thinkers/chanaka-amaratunga/ --- ## [Thinker] Charan Singh URL: https://indianliberals.in/thinkers/charan-singh/ --- ## [Thinker] C. D. Deshmukh URL: https://indianliberals.in/thinkers/chintaman-deshmukh/ --- ## [Thinker] Claret D'Souza URL: https://indianliberals.in/thinkers/claret-dsouza/ --- ## [Thinker] Colin Clark URL: https://indianliberals.in/thinkers/colin-clark/ --- ## [Thinker] D. K. Srivastava URL: https://indianliberals.in/thinkers/d-k-srivastava/ --- ## [Thinker] Justice D. N. Sinha URL: https://indianliberals.in/thinkers/d-n-sinha/ --- ## [Thinker] Dr. D. R. Mankekar URL: https://indianliberals.in/thinkers/d-r-mankekar/ --- ## [Thinker] Dr. D. Subbarao URL: https://indianliberals.in/thinkers/d-subbarao/ --- ## [Thinker] D. V. Desai URL: https://indianliberals.in/thinkers/d-v-desai/ --- ## [Thinker] D. R. Pendse URL: https://indianliberals.in/thinkers/d-r-pendse/ ### Body Dattatreya R Pendse was born on 6 September 1930/ 7 September 1969 in Pune, India. He earned a Bachelor’s degree in economics, statistics and mathematics from Pune University and a B.A. and an M.A. degree from Cambridge University. He was fondly called Dada Pendse by his friends and colleagues. For twenty years, he was the Chief Economist to India’s Tata Group of Industries and to the Group Chairman, JRD Tata, and other senior Group directors. JRD considered him to be easily the most readable economist in the country. Before joining the Tatas, Pendse occupied senior positions in the Government of India in the Ministries of Finance and Commerce & Industry for over ten years. After retirement from Tatas in 1991, Pendse was entrusted with many important assignments extending for several years. These included the Chief Consulting Economist to the Industrial Development Bank of India, Chief Consulting Economist to the World Gold Council, a member of the State Planning Board of the Government of Goa, a member of the State Planning Board of the Government of Maharashtra, a member of the International Advisory Group of Business Economists of the International Chamber of Commerce of Paris, and a member of the International Advisory Board of the Trans-National Research Organisation of the U.S.A. He also used to run his one-man think tank ‘Centre for Economic Policy Advice’ from Mumbai. He passed away in May 2018 due to chronic illness. Black Money and Budgets (Allied Publishers, 1989). J.R.D: Mee Pahilele (in Marathi) (Rajhans Prakashan, 2004). Giants by Any Measure: Sumant Moolgaokar & JRD (Parchure Prakashan Mandir, 2004). Why is Indian Industry Stagnating? (Industrial Foundation, 1978). Privatisation: Myths & Realities (Project for Economic Education). Beyond The Giant: Personal Insight Into the Life of JRD Tata (National Book Trust of India, 2008). Why Scarcities (Forum of Free Enterprise, 1974). Statistical Outline of India, 1989-90 (Department of Economics and Statistics, Tata Services, 1989). Recession in Indian Industry: Causes, Consequences & Prospects (Forum of Free Enterprise, 1975). Concentration of Economic Power (Forum of Free Enterprise, 1972). The Role of Donor Agencies in the Privatization Process (Asian Development Bank, 1985). Economic Development of Backward Areas (Forum of Free Enterprise, 1976) Black Money and Budgets (Allied Publishers, 1989) J.R.D: Mee Pahilele (in Marathi) (Rajhans Prakashan, 2004) Giants by Any Measure: Sumant Moolgaokar & J. R. D. (Parchure Prakashan Mandir, 2004) Why is Indian Industry Stagnating? (Industrial Foundation, Mumbai) Privatisation: Myths & Realities (Project for Economic Education) Beyond The Giant: Personal Insight Into the Life of J. R. D. Tata (National Book Trust of India, 2008) Monographs/Viewpoints Is VDIS a Success, January 1998 Budget (2000-01) & Drifting Towards The Cliff, March 2000 Current Economic Environment for Business & The Budget We Need, February 1995 Growing Government is a Cause for Concern The Liberal Budget 2007-2008: Taking Reforms to the Poor D R Pendse on Liberating India s Entrepreneurs D R Pendse, former economist with the Tata Group of Industries, on liberating India s entrepreneurs --- ## [Thinker] D. Veerendra Heggade URL: https://indianliberals.in/thinkers/d-veerendra-heggade/ --- ## [Thinker] D. V. Gundappa URL: https://indianliberals.in/thinkers/d-v-gundappa/ --- ## [Thinker] Dadabhai Naoroji URL: https://indianliberals.in/thinkers/dadabhai-naoroji/ --- ## [Thinker] Dankesh Oza URL: https://indianliberals.in/thinkers/dankesh-oza/ --- ## [Thinker] Deepak Mohanty URL: https://indianliberals.in/thinkers/deepak-mohanty/ --- ## [Thinker] Deng Xiaoping URL: https://indianliberals.in/thinkers/deng-xiaoping/ --- ## [Thinker] Dharamsey Khatau URL: https://indianliberals.in/thinkers/dharamsey-khatau/ --- ## [Thinker] Dilip G. Piramal URL: https://indianliberals.in/thinkers/dilip-g-piramal/ --- ## [Thinker] Dinesh Vyas URL: https://indianliberals.in/thinkers/dinesh-vyas/ --- ## [Thinker] DN Hosali URL: https://indianliberals.in/thinkers/dn-hosali/ --- ## [Thinker] Dnyaneshwar M. Shelar URL: https://indianliberals.in/thinkers/dnyaneshwar-m-shelar/ --- ## [Thinker] DR AC Shah URL: https://indianliberals.in/thinkers/dr-ac-shah/ --- ## [Thinker] Deepak Parekh URL: https://indianliberals.in/thinkers/deepak-parekh/ --- ## [Thinker] Detmar Doering URL: https://indianliberals.in/thinkers/detmar-doering/ --- ## [Thinker] DR Dharmendra Bhandari URL: https://indianliberals.in/thinkers/dr-dharmendra-bhandari/ --- ## [Thinker] DR IG Patel URL: https://indianliberals.in/thinkers/dr-ig-patel/ --- ## [Thinker] DR Gvk Rao URL: https://indianliberals.in/thinkers/dr-gvk-rao/ --- ## [Thinker] Dr. KK Das URL: https://indianliberals.in/thinkers/dr-kk-das/ --- ## [Thinker] DR NA Swaminathan URL: https://indianliberals.in/thinkers/dr-na-swaminathan/ --- ## [Thinker] DR Png Subramanian URL: https://indianliberals.in/thinkers/dr-png-subramanian/ --- ## [Thinker] DR TH Chowdhary URL: https://indianliberals.in/thinkers/dr-th-chowdhary/ --- ## [Thinker] Dudley Senanayake URL: https://indianliberals.in/thinkers/dudley-senanayake/ --- ## [Thinker] Dwarkanath Tagore URL: https://indianliberals.in/thinkers/dwarkanath-tagore/ --- ## [Thinker] Erhard Haubold URL: https://indianliberals.in/thinkers/erhard-haubold/ --- ## [Thinker] Eric D'Souza URL: https://indianliberals.in/thinkers/e-dsouza/ --- ## [Thinker] Eugene R. Black Sr. URL: https://indianliberals.in/thinkers/eugene-black/ --- ## [Thinker] F. A. Mehta URL: https://indianliberals.in/thinkers/f-a-mehta/ --- ## [Thinker] Eric P. W. da Costa URL: https://indianliberals.in/thinkers/eric-p-w-da-costa/ --- ## [Thinker] F. P. Antia URL: https://indianliberals.in/thinkers/f-p-antia/ --- ## [Thinker] Fatima Sheikh URL: https://indianliberals.in/thinkers/fatima-sheikh/ --- ## [Thinker] Fazal-ur-Rahman URL: https://indianliberals.in/thinkers/fazal-ur-rahman/ --- ## [Thinker] Feroz Khan Noon URL: https://indianliberals.in/thinkers/feroz-khan-noon/ --- ## [Thinker] Frank Simoes URL: https://indianliberals.in/thinkers/frank-simoes/ --- ## [Thinker] Frédéric Bastiat URL: https://indianliberals.in/thinkers/frederic-bastiat/ --- ## [Thinker] Friedrich Hayek URL: https://indianliberals.in/thinkers/friedrich-hayek/ --- ## [Thinker] Friedrich Naumann URL: https://indianliberals.in/thinkers/friedrich-naumann/ --- ## [Thinker] Prof. G. Carl Weiland URL: https://indianliberals.in/thinkers/g-carl-weiland/ --- ## [Thinker] G. Giridhar Prabhu URL: https://indianliberals.in/thinkers/g-giridhar-prabhu/ --- ## [Thinker] G. L. Mehta URL: https://indianliberals.in/thinkers/g-l-mehta/ --- ## [Thinker] G N Lawande URL: https://indianliberals.in/thinkers/g-n-lawande/ --- ## [Thinker] G. V. Kapadia URL: https://indianliberals.in/thinkers/g-v-kapadia/ --- ## [Thinker] Gajendrasinh P. Jadeja URL: https://indianliberals.in/thinkers/gajendrasinh-p-jadeja/ --- ## [Thinker] Gamal Abdel Nasser URL: https://indianliberals.in/thinkers/gamal-abdel-nasser/ --- ## [Thinker] GD Parikh URL: https://indianliberals.in/thinkers/gd-parikh/ --- ## [Thinker] Gangadhar Gadgil URL: https://indianliberals.in/thinkers/gangadhar-gadgil/ --- ## [Thinker] GP Manish URL: https://indianliberals.in/thinkers/gp-manish/ --- ## [Thinker] Gopal Ganesh Agarkar URL: https://indianliberals.in/thinkers/gopal-ganesh-agarkar/ --- ## [Thinker] Gopal Krishna Gokhale URL: https://indianliberals.in/thinkers/gopal-krishna-gokhale/ --- ## [Thinker] Gurajada Apparao URL: https://indianliberals.in/thinkers/gurajada-apparao/ --- ## [Thinker] Gurcharan Das URL: https://indianliberals.in/thinkers/gurcharan-das/ --- ## [Thinker] H. M. Patel URL: https://indianliberals.in/thinkers/h-m-patel/ --- ## [Thinker] H. T. Parekh URL: https://indianliberals.in/thinkers/h-t-parekh/ --- ## [Thinker] H. V. R. Iengar URL: https://indianliberals.in/thinkers/h-v-r-iengar/ --- ## [Thinker] Hamid Dalwai URL: https://indianliberals.in/thinkers/hamid-dalwai/ --- ## [Thinker] Dr. Hannan Ezekiel URL: https://indianliberals.in/thinkers/hannan-ezekiel/ --- ## [Thinker] Hans Raj Khanna URL: https://indianliberals.in/thinkers/hans-raj-khanna/ --- ## [Thinker] H. Venkatasubbiah URL: https://indianliberals.in/thinkers/h-venkatasubbiah/ --- ## [Thinker] Harish Budhlani URL: https://indianliberals.in/thinkers/harish-budhlani/ --- ## [Thinker] Harish Chandra Mukherjee URL: https://indianliberals.in/thinkers/harish-chandra-mukherjee/ --- ## [Thinker] Herbert Spencer URL: https://indianliberals.in/thinkers/herbert-spencer/ --- ## [Thinker] Henry Louis Vivian Derozio URL: https://indianliberals.in/thinkers/henry-louis-vivian-derozio/ --- ## [Thinker] Hernando de Soto URL: https://indianliberals.in/thinkers/hernando-de-soto/ --- ## [Thinker] Himanshi Shelat URL: https://indianliberals.in/thinkers/himanshi-shelat/ --- ## [Thinker] Hindol Sengupta URL: https://indianliberals.in/thinkers/hindol-sengupta/ --- ## [Thinker] H. L. A. Hart URL: https://indianliberals.in/thinkers/hla-hart/ --- ## [Thinker] HP Ranina URL: https://indianliberals.in/thinkers/hp-ranina/ --- ## [Thinker] Sir Homi Mody URL: https://indianliberals.in/thinkers/homi-mody/ --- ## [Thinker] Hriday Nath Kunzru URL: https://indianliberals.in/thinkers/hriday-nath-kunzru/ --- ## [Thinker] Hubertus von Welck URL: https://indianliberals.in/thinkers/hubertus-von-welck/ --- ## [Thinker] I. K. Gujral URL: https://indianliberals.in/thinkers/i-k-gujral/ --- ## [Thinker] Ela Bhatt URL: https://indianliberals.in/thinkers/ila-bhatt/ --- ## [Thinker] Immanuel Kant URL: https://indianliberals.in/thinkers/immanuel-kant/ --- ## [Thinker] Indira Rajaraman URL: https://indianliberals.in/thinkers/indira-rajaraman/ --- ## [Thinker] Indira Gandhi URL: https://indianliberals.in/thinkers/indira-gandhi/ --- ## [Thinker] Indumati Parikh URL: https://indianliberals.in/thinkers/indumati-parikh/ --- ## [Thinker] Iqbalunnisa Hussain URL: https://indianliberals.in/thinkers/iqbalunnisa-hussain/ --- ## [Thinker] Ishwar Chandra Vidyasagar URL: https://indianliberals.in/thinkers/ishwar-chandra-vidyasagar/ --- ## [Thinker] Iskander Mirza URL: https://indianliberals.in/thinkers/iskander-mirza/ --- ## [Thinker] J. D. Chokshi URL: https://indianliberals.in/thinkers/j-d-chokshi/ --- ## [Thinker] J. K. Dhairyawan URL: https://indianliberals.in/thinkers/j-k-dhairyawan/ --- ## [Thinker] J. H. 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Jha URL: https://indianliberals.in/thinkers/l-k-jha/ --- ## [Thinker] Lady Abala Bose URL: https://indianliberals.in/thinkers/lady-abala-bose/ --- ## [Thinker] Lakshmibai Tilak URL: https://indianliberals.in/thinkers/lakshmibai-tilak/ --- ## [Thinker] Lal Bahadur Shastri URL: https://indianliberals.in/thinkers/lal-bahadur-shastri/ --- ## [Thinker] Ludwig Erhard URL: https://indianliberals.in/thinkers/ludwig-erhard/ --- ## [Thinker] Ludwig von Mises URL: https://indianliberals.in/thinkers/ludwig-von-mises/ --- ## [Thinker] M.A. Master URL: https://indianliberals.in/thinkers/m-a-master/ --- ## [Thinker] Louella Lobo Prabhu URL: https://indianliberals.in/thinkers/louella-lobo-prabhu/ --- ## [Thinker] M. C. Chagla URL: https://indianliberals.in/thinkers/m-c-chagla/ --- ## [Thinker] Dr. M. C. Munshi URL: https://indianliberals.in/thinkers/m-c-munshi/ --- ## [Thinker] M. C. Setalvad URL: https://indianliberals.in/thinkers/m-c-setalvad/ --- ## [Thinker] M. L. Dantwala URL: https://indianliberals.in/thinkers/m-l-dantewala/ --- ## [Thinker] M. G. Hallar URL: https://indianliberals.in/thinkers/m-g-hallar/ --- ## [Thinker] M. L. Tannan URL: https://indianliberals.in/thinkers/m-l-tannan/ --- ## [Thinker] M. N. Roy URL: https://indianliberals.in/thinkers/m-n-roy/ --- ## [Thinker] M. N. Tholal URL: https://indianliberals.in/thinkers/m-n-tholal/ --- ## [Thinker] M. R. Anantharamakrishnan URL: https://indianliberals.in/thinkers/m-r-anantharamakrishnan/ --- ## [Thinker] M. Narasimham URL: https://indianliberals.in/thinkers/m-narasimhan/ --- ## [Thinker] M. R. Pai URL: https://indianliberals.in/thinkers/m-r-pai/ ### Body Mangalore Ranga Pai (1931–2003) was born in Manjeshwar, Kerala. He completed his education at Canara High School and Government College, Mangalore, before graduating with a BA (Honours) in political science from the Presidency College, Chennai, where he won the Candeth Gold Medal in Political Science. He later studied journalism at UCLA. After his return to India, he worked briefly at the New India Assurance Company in Mumbai, but quit after its nationalisation because he did not want to become a "government spokesman". He was persuaded by FS Mulla to join the Forum of Free Enterprise, where he served as full-time Secretary from 1956 to 1976, working under three Presidents — A D Shroff, Murarji Vaidya, and Nani Palkhivala. Pai's advocacy of free enterprise at FFE was complemented by his consumer-rights activism. His activism came out of his personal experience of waiting eleven years for a telephone connection; the May 19, 1982 issue of Mid-Day published a report titled "M R Pai gets a telephone at last!" He wrote columns for the Tribune ("Consumer Alert") and Bombay ("Beating the System"), founded the Bombay branch of the All India Bank Depositors' Association in 1968, and ensured the provision of mandatory nomination facility for both bank accounts and provident fund. He passed away on 3 July 2003. Soon after his demise, the board of directors of the Punjab and Maharashtra Co-operative Bank instituted an award in his honour. --- ## [Thinker] MA Pathan URL: https://indianliberals.in/thinkers/ma-pathan/ --- ## [Thinker] MA Rangoonwala URL: https://indianliberals.in/thinkers/ma-rangoonwala/ --- ## [Thinker] MA Sreenivasan URL: https://indianliberals.in/thinkers/ma-sreenivasan/ --- ## [Thinker] MA Venkata Rao URL: https://indianliberals.in/thinkers/ma-venkata-rao/ --- ## [Thinker] Mahadev Govind Ranade URL: https://indianliberals.in/thinkers/mahadev-govind-ranade/ --- ## [Thinker] Maharana Pratap URL: https://indianliberals.in/thinkers/maharana-pratap/ --- ## [Thinker] Mahatma Gandhi URL: https://indianliberals.in/thinkers/mahatma-gandhi/ --- ## [Thinker] Maja Daruwala URL: https://indianliberals.in/thinkers/maja-daruwala/ --- ## [Thinker] Maneesha Tikekar URL: https://indianliberals.in/thinkers/maneesha-tikekar/ --- ## [Thinker] Mangesh Soman URL: https://indianliberals.in/thinkers/mangesh-soman/ --- ## [Thinker] Manjula Dabhi URL: https://indianliberals.in/thinkers/manjula-dabhi/ --- ## [Thinker] Manmohan Singh URL: https://indianliberals.in/thinkers/manmohan-singh/ --- ## [Thinker] Mao Zedong URL: https://indianliberals.in/thinkers/mao-zedong/ --- ## [Thinker] Margaret Thatcher URL: https://indianliberals.in/thinkers/margaret-thatcher/ --- ## [Thinker] Matt Ridley URL: https://indianliberals.in/thinkers/matt-ridley/ --- ## [Thinker] Maurice Strong URL: https://indianliberals.in/thinkers/maurice-strong/ --- ## [Thinker] MH Mody URL: https://indianliberals.in/thinkers/mh-mody/ --- ## [Thinker] Milovan Djilas URL: https://indianliberals.in/thinkers/milovan-djilas/ --- ## [Thinker] Milton Friedman URL: https://indianliberals.in/thinkers/milton-friedman/ --- ## [Thinker] Minoo Masani URL: https://indianliberals.in/thinkers/minoo-masani/ ### Body Minocher Rustom Masani was born on 20 November 1905 in a Bombay based Parsi family. His father P Masani had authored a biography of Dadabhai Nooroji. Masani completed his higher education from the Elphinstone College and the London School of Economics. He then became a member of the Lincoln’s Inn, one of the four lawyer’s associations in London. At LSE, he was a participant in the student politics and also visited the USSR in 1927. The young Masani was an admirer of the communist experiment. He was back in India in 1928 to practice law at the Bombay Bar. Masani’s participation in the Civil Disobedience movement landed him in the Nashik Jail in 1932. In the jail, his discussions with JP, Achut Patwardhan, and Ashok Mehta led him to start a socialist group within the Congress. In 1934, the Bombay branch of the Congress Socialist Party (CSP) was set-up under him. A year later he visited the Soviet Union again to explore the possibility of an alliance with the Soviet communists. Masani’s CSP, though, had to face opposition from the Congress conservatives. It also came in conflict with many provisional Congress government after the 1937 election because of its radical agenda. By 1938, however, Masani was growing disenchanted with communism. He had become very critical of Stalinist purges and urged his fellow socialists to oppose it. The attempted takeover of CSP by the communists also made him wary of the ideology. Also, the influence of Gandhi turned him away from communism as he now began to see the state as the biggest threat to human liberty. He would resign from CSP and retire from politics altogether in 1939. Masani took a job for a period of 16 years from 1941 to 1957 under JRD Tata after he left his membership of the CSP. During this period he was also a member of the Constituent Assembly and served as the Mayor of Bombay. He was appointed the Government of India’s representative to the UN Sub-Commission for the Prevention of Discrimination and the Protection of Minorities from 1947 to 1952. He quit his job and other responsibilities for a brief period from 1948 to 1949 and went on to become India’s first Ambassador to Brazil. With the dissolution of the assembly in 1952, he again retired from politics for a while. Masani’s combat against the increased influence of communism became a feature of his public career in independent India. In 1950, he had set up the Democratic Research Service with the help of Sardar Patel and the Indian Committee for Cultural Freedom along with JP. DRS published a monthly journal Freedom First and ICCF came with Quest. In 1957, Masani contested and won a set in the Lok Sabha as an independent candidate from the Ranchi constituency. He was supported by the tribal leader Jaipal Munda. Masani sought to create a liberal political front for which he courted the support of Rajaji and JP. Both of them declined on different grounds. The Nagpur Resolution of Congress which advocated cooperative farming brought Rajaji and Masani together to form the political party. Swatantra Party came into being in 1959 as a coalition of pro-market businessmen, peasant proprietors, beleaguered princes, and zamindars. Masani served as the General Secretary from 1959 to 1968 and was then elected the party President. Swatantra emerged as the single largest opposition party in the fourth Lok Sabha (1967-1971) with 44 seats. The massive electoral defeat of Swatantra led Masani to resign and retire from active politics. Masani, however, continued to manage DRS and Freedom First. He fought against the press censorship imposed during the Emergency. Project for Economic Education and Leslie Sawhny Programme of Training for Democracy was his brainchild for creating a liberal discourse in India. He passed away in the year 1998 at the age of 93, having lived a long and eventful life. Too Much Politics, Too Little Citizenship (1969). Liberalism (1970) The Constitution, Twenty Years Later (1975). Hamara Hindustan A Plea for a Mixed Economy (1947). Neutralism in India (1951) Our India (Oxford University Press, 1954). We Indians (Oxford University Press, 1989). Of Four Real Leaders, Some Reminiscences (Freedom First, 1980). Picture of a Plan (Oxford University Press, 1945). Our Growing Human Family: From Tribe to World Federation (Oxford University Press, 1950). The Essence of Democracy (Harold Laski Institute of Political Science, 1989) The Communist Party of India: A Short History (Bharatiya Vidya Bhavan, 1954). Our Foreign Policy: A Plea for Realism (Swatantra Party, 1966). Congress Misrule and the Swatantra Alternative (Manaktalas, 1966). Is JP the Answer (Macmillan Co of India, 1975). Bliss was it in that Dawn A Political Memoir Upto Independence (Arnold-Heinemann Publishers, 1977). The Third World-Quo Vadis? (Jaico Publishing House, 1979). Against the Tide (Vikas, 1981). Judgement Reserved (Swatantra Party, 1965). Freedom and Dissent: Essays in Honour of Minoo Masani on His Eightieth Birthday (Democratic Research Service, 1985). Socialism Reconsidered (Project for Economic Education, 1988). In the Vanguard of Freedom: Essays in the Honour of Minoo Masani (Minoo Masani 90th Birthday Felicitation Committee, 1995). JP Mission Partly Completed (Macmillan Co of India, 1977). Our India Hamara Hindustan Congress Misrule and the Swatantra Alternative We Indians : Minoo Masani (1989) Of Four Real Leaders, Some Reminiscences, Freedom First (1980) Picture of a Plan (1945) A Plea for a Mixed Economy (1947) Our Growing Human Family (1950) Neutralism in India (1951) Indian Congress for Cultural Freedom : March 28 to 31, 1951 (1951) The Communist Party of India: A Short History (1954) Congress Misrule and the Swatantra Alternative (1956) Too Much Politics, Too Little Citizenship (1969) Liberalism (1970) The Constitution, Twenty Years Later (1975) Bliss was it in that Dawn … (1977) The Third World-Quo Vadis?(1979) Against the tide (1981) Autobiography of Minoo Masani, Volumes I (1981) Autobiography of Minoo Masani, Volumes II (1981) Freedom and Dissent : Essays in Honour of Minoo Masani (1985) Essays in Honour of Minoo Masani (1985) Socialism Reconsidered : Project for economic education (1988) In the Vanguard of Freedom : Essays in the Honour of Minoo Masani (1995) Minoo Masani – November 20, 1905- May 27, 1998 Presented To Minoo Masani at 90, Freedom First (1995) Published On The Indian Libertarian Volume : 5 ;Issue: 7 1  June 1957 The Indian Libertarian Volume : 5 ;Issue: 15 1  October 1957 The Indian Libertarian Volume : 5 ;Issue: 22 1  February 1958 The Indian Libertarian Volume : 7 ;Issue: 1 1  April 1959 The Indian Libertarian Volume : 7 ;Issue: 2 15  April 1959 How I Stopped Worrying and Learned to Love the Trade Deficit | Sudha Shenoy Lecture presented by Sudha R Shenoy at the Ludwig von Mises Institute in Auburn, Alabama; October 26, 2006. --- ## [Thinker] Minoo Shroff URL: https://indianliberals.in/thinkers/minoo-shroff/ --- ## [Thinker] Mithan Tata Lam URL: https://indianliberals.in/thinkers/mithan-tata-lam/ ### Body _From CCS feature article: Mithan Tata Lam — The Unexplored Life of an Indian Suffragist_ Mithan Tata Lam – The Unexplored Life of an Indian SuffragistEditorial TeamOpinions & EventsAugust 12, 2021 Indian suffragists had an immense role to play both in the nationalist struggle and the subsequent universal adult franchise. One among them was Mithan Tata, one of the first women to be called to the English Bar and the first woman lawyer ever appointed to the Bombay High Court. Unlike most large democracies, the Indian constitution has adopted universal suffrage from its inception. Indian suffragists deserve a significant share of the credit for this progressive cornerstone of independent India. Along with Madam Bhikaji Cama, Princess Sophia Duleep Singh, and Lolita Roy, Mithan Tata Lam too joined the women’s suffrage movement in British India. Mithan Tata Lam (1898-1981) was born in Maharashtra to Ardeshir Tata and Herabai Tata. Her father worked as an employee in a textile mill, while her mother was a women’s rights activist. Mithan’s parents ensured that their daughter gets a well-rounded education, and sent her to reputed schools. She pursued her graduate studies at Elphinstone College, Bombay, where in she earned an honours degree in Economics. Her brilliant academic performance also won her the Cobden Club Medal. Mithan’s mother, Herabai, had an immense role to play in her introduction to the suffrage struggle. Together, the mother-daughter duo achieved many firsts for Indian women. Herabai’s interest in Theosophy led her to make acquaintances with Annie Besant. In addition to being a theosophist, Besant was a prominent women’s rights activist and Indian self-rule supporter at the time. In 1911, Herabai met with suffragette Princess Sophia Duleep Singh. At the time of their meeting, Singh donned a badge that read, “Votes for Women.” Much like the words on the badge, Singh’s thoughts influenced Herabai’s understanding of the suffrage movement in India. She also interacted with other influential suffragists of the 20th century. By 1915, Herabai had become the honorary secretary of the Women’s Indian Association. In 1919, Mithan joined her mother’s work as a suffragist. The duo travelled to London to present a memorandum on the women’s franchise, alongside Sarojini Naidu, before the Southborough Franchise Committee. The  Committee was set up by the British in 1918. They sat in India for a year, and recommended a scheme of territorial urban and rural constituencies based on land revenue, communal and special interest representation. The suffragists’ meeting with the Franchise Committee was to address the British government while the final readings of the Government of India Bill (1919) were being put through the British Parliament. The suffragists’ goal was to eliminate sex disqualification in the bill, which explicitly barred women in India from franchise. Mithan and Herabai’s statement – titled “Why Should Women Have Votes?” – was brought to the India Office on September 25th, 1919. Among their reasons for granting voting rights to women, Mithan and Herabai’s statement read: “It has been recognised now in all countries that the sex barrier has been a grave mistake, is out of date, unworthy of the times, a relic of past days when might was above right … Why should India lag behind others in this respect and create a sex barrier where one does not exist, and thus brand Indian women as inferior to their sisters in other countries.” They also argued, “Attempt to reform without the cooperation of women, and you are simply raising a paper fabric on foundations of sand.” Mithan, Herabai and other Indian suffragists succeeded in placing the rights of Indian women on a global platform. For this liberal cause, they brought together organisations and individuals from India and the United Kingdom. Though one nation was colonised by the other, individuals from both recognised their common goals in raising women’s presence and impact in the public sphere. In their support, suffrage organisations and individuals in Britain began sending letters to the India Office. Unfortunately, these statements and petitions from Mithan and Herabai, as well as British suffragists proved to be unsuccessful. The Government of India Bill (1919) did not include women’s franchise. However, the British government did concede autonomy to individual Indian provinces to provide enfranchisement to women. These efforts by the suffragists led to the enfranchisement of women for the first time, in Madras in 1921. The mother-daughter duo continued their stay in the United Kingdom. While Mithan pursued a post-graduate degree in economics and law at the  London School of Economics, Herabai also enrolled in courses in administration, social sciences and economics at the institute, from 1919 to 1922. During the course of her studies in London, Mithan was one of the two students to be introduced to George V and Queen Mary. Mithan was also admitted to Lincoln’s Inn as a barrister in 1920 – only a year after Sex Disqualification (Removal) Act (1919) had allowed women to enter public office. In 1923, she became one of the first women to be called to the English Bar. A year later Herabai and Mithan returned to India, where Mithan practiced at the Bombay High Court as the first woman lawyer in its history. She was also a professor of law at the Government Law College, making her the first woman to be a law professor in India. Mithan described her time at the Bombay High Court as its lone female lawyer: “Like a new animal at the zoo, with folks peeping through doorways…as soon as my shadow crossed from the library to the common room, there would be an uncomfortable silence, making me feel even more self-conscious.” Interestingly, her first appearance at the Bombay High Court was fuelled by systemic misogyny. Reportedly, a solicitor whose client had a watertight case approached Mithan. He claimed about his client, “He has such a good case that he cannot lose…but he wants to inflict upon the opponent the humiliation of being defeated by a woman”. Being the first of her kind, Mithan rallied against sexism within the legal profession by asking “how can a woman be declared unfit without even being given a trial?” Gender biases and misogyny within theoretical and professional disciplines is quite pervasive. Yet her efforts in the legal practice challenged the age-old hierarchies that thrive in courtrooms and public offices. These hierarchies are created and sustained by patriarchal powers, and Mithan led the way to dismantle those to the best of her ability. She is not only seen as a feminist icon but a liberal icon too, for her interventions in the legal sphere challenged and disrupted systemic misogyny. In doing so, they led to law becoming a more inclusive profession. Soon, Mithan became a reputed name in the legal channels of Bombay, and worked on cases ranging from currency counterfeiters to Jewish betrothals. Outside the court, her liberal attitudes caused her to work extensively on gendered legislation for inheritance and marriage. She also became a popular advocate for women’s and children’s rights. Mithan was married to fellow lawyer, Jamshed Sorab Lam. He supported her work on the betterment of Bombay’s slum dwellers by improving health and infrastructure facilities. After three years of practice at the Bombay High Court, Mithan Tata Lam was appointed as a Justice of Peace, and as a member of the committee on the Parsi Marriage Act (1865). Her contribution to the committee led to an amendment of the Act, i.e. the Parsi Marriage and Divorce Act (1936). Adding to her list of firsts, in 1947 Mithan became the first woman Sheriff of Bombay. She also chaired the Women’s Committee set up for the Relief and Rehabilitation of Refugees from Pakistan, in 1947. She was also an active member of the All India Women’s Conference, and served as its president from 1961-62. The AIWC also ran a journal called Stri Dharma, and Mithan served as its editor for five years. She held leadership and representative positions in the National Council of Indian Women, the Women Graduates Union of Bombay, the Indian Federation of Women Lawyers, the International Federation of Women Lawyers, and the United Nations. For her efforts and contributions, she was awarded the Padma Bhushan in 1962, by the Government of India. Mithan Tata Lam passed away in 1981, leaving behind an everlasting legacy that revolutionised legal, social, and political reform in India. What sets her apart from most of the liberal and feminist figures of her time is the kind of upbringing she had. Through her mother, Mithan was inducted into the struggles on women’s rights. Herabai also provided a bridge for her daughter to interact and be influenced by pioneers in the Indian suffragists movement. Her father, Ardeshir Tata is also credited for being far ahead of his time. To this day millions of women are denied an education, and yet in the early 20th century, Ardeshir helped his wife and daughter create a better future for themselves. In 2021, we mark the 100 year anniversary of women first being enfranchised in Madras. The largest democracy in the world would not be what it is today without the consistent efforts and contributions of women such as Mithan Tata Lam. Hence, it is essential that we remember the efforts of the women who led the way for an inclusive and liberal society for the future generations of Indian women. --- ## [Thinker] Morarji Desai URL: https://indianliberals.in/thinkers/morarji-desai/ --- ## [Thinker] MR Mayya URL: https://indianliberals.in/thinkers/mr-mayya/ --- ## [Thinker] Mukesh Adenwala URL: https://indianliberals.in/thinkers/mukesh-adenwala/ --- ## [Thinker] Seetha URL: https://indianliberals.in/thinkers/ms-seetha/ --- ## [Thinker] Mukesh D. Ambani URL: https://indianliberals.in/thinkers/mukesh-ambani/ --- ## [Thinker] N. C. Mehta URL: https://indianliberals.in/thinkers/n-c-mehta/ --- ## [Thinker] Dr. Mukund Rajan URL: https://indianliberals.in/thinkers/mukund-rajan/ --- ## [Thinker] Murarji Vaidya URL: https://indianliberals.in/thinkers/murarji-vaidya/ --- ## [Thinker] Dr. Muthulakshmi Reddi URL: https://indianliberals.in/thinkers/muthulakshmi-reddi/ ### Body _From CCS feature article: Dr Muthulakshmi Reddi: Beacon of Women's Liberty_ Dr Muthulakshmi Reddi: Beacon of Women’s LibertyEditorial TeamAugust 23, 2023 Dr Muthulakshmi Reddy was an embodiment of progressive liberalism. She was a staunch advocate of women’s education and was a vehement critic of the Devadasi system. She challenged many traditional societal norms. By championing gender equality she left an indelible mark on South Indian social fabric. The nineteenth century was a time of significant intellectual and social change in India. Amidst this ferment, Dr. Muthulakshmi Reddy emerged as a leading figure in the South Indian social reform movement. A beacon of social change, she toiled ceaselessly to ameliorate the plight of women and children in India. Her tireless efforts sought to create a more equitable and just society for women, becoming a profound source of inspiration for all those who believed in the transformative power of women. Muthulakshmi was born in 1886 in the princely state of Pudukkottai (Tamil Nadu). She was the daughter of Narayanaswamy Iyer, the principal of Maharaja’s College in Pudukkottai. Her father recognised her potential and was determined to provide her with an education, even though it was not the norm for girls then. However, his aspirations were thwarted by an early retirement, resulting from conflicts with the state’s Diwan. Despite this setback in her father’s career, her passion for learning remained undaunted.  Even though her mother, Chandrammal wanted her to quit school, Muthulakshmi continued schooling and passed her Lower Secondary Public Examination with the help of her Teacher Balaiah. Societal norms and traditions acted as formidable barriers to women’s education, impeding their pursuit of knowledge. Muthulakshmi, too, bore the brunt of these customs. Nevertheless, her father took proactive measures and arranged for a private tutor to impart education within the confines of their home. This experience allowed Muthulakshmi to contemplate the prevailing social barriers obstructing women’s access to education. During her teenage years, her passion for women’s rights and social justice began to blossom and take root. In 1902, Dr. Muthulakshmi Reddy defied the odds and passed the Matriculation Examination Due to the lack of hostels for Girls, she had to join the local Men’s Second Grade College for her higher education. Her academic excellence, however, encountered opposition fueled by gender and caste bias. The college principal raised objections, fearing that her presence would dishearten the male students. Even some parents threatened to withdraw their sons if she were allowed to join. However,  the Maharajah of Pudukkotai quelled the objections and admitted her, displaying wisdom and progressive thinking. This momentous decision by the Maharajah marked a significant milestone in the annals of women’s education in South India. Dr. Muthulakshmi etched her name in history as the first woman to enroll in the Maharajah’s College for Men, and in 1907, she proudly passed her Intermediate Examination. In 1907, Dr Muthulakshmi secured admission to the esteemed Madras Medical College, dedicating herself to the pursuit of medicine. As an active participant in gatherings and public meetings, her remarkable work garnered attention, with numerous newspaper articles and magazines highlighting her endeavours. She graduated with honours and worked as a House Surgeon at the Government Hospital for Women and Children in Egmore. Later,, she dutifully returned to her hometown of Pudukkotai, where she wholeheartedly served her community. In 1914, she established her clinic in Madras and became renowned for her exceptional treatment skills. In 1914, she discovered a kindred spirit in Dr. Sundara Reddi, a physician with liberal thoughts and a visionary outlook. Their marriage was built on mutual respect, and he wholeheartedly supported her medical practice and social work. In 1925, Dr. Muthulakshmi Reddi received a prestigious scholarship from the Indian Government to study in England. Setting foot in the United Kingdom, she delved into the realm of women’s and children’s diseases, honing her knowledge and skills. After returning to India, she published numerous works on pregnant women, childbirth, and social welfare matters. The zeal of the Indian freedom movement stirred her soul, and Mahatma Gandhi’s inspiring leadership profoundly impacted her. Under his influence, she actively engaged in the freedom struggle, coordinated efforts with other leaders, and played a crucial role in the movement. Contemplating the societal conditions prevailing at the time, Dr Muthulakshmi recognised that gender equality could be achieved only through education for women. In 1917, she became a member of the Women’s Indian Association, aligning her vision with trailblazers like Annie Besant, Hira Bai Tata, and Marget Cousins. Additionally, she was actively associated with the Muslim Women’s Association, Madras Seva Sadan, The Madras Vigilance Society, and the Indian Ladies Samaj. As one of the few women leaders of South India, she ardently fought for India’s liberation from colonial oppression. In 1932, Dr. Muthulakshmi, alongside Gandhiji, attended the Third Round Table Conference in London, gaining significant exposure. Subsequently, in 1934, she participated in the First International Conference of Chicago. Following the passing of Annie Besant, she assumed the presidency of the Women’s Indian Association. Yet, she relinquished the position during the Non-Cooperation movement as a protest against Gandhiji’s arrest. In 1962, Dr Muthulakshmi Reddi received a momentous appointment to the Madras Legislative Council. This marked the beginning of her lifelong mission to rectify the societal imbalances that hindered women’s rights. Her commendable social work garnered recognition from the Government of India, leading to her inclusion in the Hartog Committee, entrusted with reviewing the condition of women in the country. During the late 1800s, Dr. Muthulakshmi Reddi boldly stepped forward to lead the fight against the Devadasi system. As a member of the Madras Legislative Council, she vehemently opposed the practice and pledged for its eradication. Organising meetings and gaining support from various organisations, including the Women’s Indian Association and the Devadasi Women’s Association, she also garnered the backing of the Devadasi Community Men’s Association. In 1936, Dr Muthulakshmi Reddi established the “AVVAI HOME,” a welfare institution in Tiruvannamalai for abandoned children and women. Over time, this home became a place of empowerment, offering vocational training to children and women. In 1953, she became the Chairman of the State Social Welfare Board of Madras Presidency. During her tenure from 1953 to 1957, she uplifted women from backward classes by providing them with education and healthcare opportunities, and she also played a pivotal role in establishing a separate Children’s Hospital in the Madras Presidency. Dr. Muthulakshmi Reddi was a trailblazer in every sense, achieving numerous firsts as a woman in India – being the first to gain admission to a men’s college, the first to become a house surgeon in a government hospital, and the first to be elected to the Madras Legislative Council. However, she was more than just a pioneer; she was a true champion for women’s rights. She relentlessly fought to improve the lives of women and children in India, advocating against child marriage, for raising the age of consent for marriage, and women’s voting rights. She envisioned a world where women would receive equal treatment, have the same opportunities as men, and are free to make their own life choices. Her life’s dedication was directed towards turning this vision into a reality. Dr. Muthulakshmi Reddi’s relentless pursuit of social justice and gender equality paved the way for a more inclusive and progressive India, making her a true visionary champion of liberal ideas. --- ## [Thinker] N. Das URL: https://indianliberals.in/thinkers/n-das/ --- ## [Thinker] N. Dandekar URL: https://indianliberals.in/thinkers/n-dandekar/ --- ## [Thinker] Acharya N. G. Ranga URL: https://indianliberals.in/thinkers/n-g-ranga/ --- ## [Thinker] N. N. Pai URL: https://indianliberals.in/thinkers/n-n-pai/ --- ## [Thinker] N. N. Sachitanand URL: https://indianliberals.in/thinkers/n-n-sachitanand/ --- ## [Thinker] Prof. N. S. Ramaswamy URL: https://indianliberals.in/thinkers/n-s-ramaswamy/ --- ## [Thinker] N. T. Taskar URL: https://indianliberals.in/thinkers/n-t-taskar/ --- ## [Thinker] N. Vittal URL: https://indianliberals.in/thinkers/n-vittal/ --- ## [Thinker] Nandan Nilekani URL: https://indianliberals.in/thinkers/nandan-nilekani/ --- ## [Thinker] Nadir Godrej URL: https://indianliberals.in/thinkers/nadir-godrej/ --- ## [Thinker] Narayan K. Varma URL: https://indianliberals.in/thinkers/narayan-varma/ --- ## [Thinker] P. V. Narasimha Rao URL: https://indianliberals.in/thinkers/narasimha-rao/ --- ## [Thinker] Narayana Aiyar URL: https://indianliberals.in/thinkers/narayana-aiyar/ --- ## [Thinker] Nani Palkhivala URL: https://indianliberals.in/thinkers/nani-palkhivala/ ### Body Nanabhoy “Nani” Ardeshir Palkhivala was born in 1920 in Bombay. Palkhivala’s higher education at St Xaviers’ College was a masters’ degree in English. He earned his law degree at Government Law College, Bombay. Palkhivala began his law practice in 1946 in Bombay. His initial expertise lay in commercial and tax law. In 1950, he authored with Sir Jamhedji the influential The Law and Practice of Income Tax which still serves as a reference guide. The book was also used as the tax law draft guide by the IMF. Over time, Palkhivala cemented his reputation as one of India’s most eminent jurists and an expert in economic affairs. His knowledge on matters related to the constitution and tax matters was unparalleled. Palkhivala’s legacy in the history of Indian democracy lies in his contribution to the famous Kesavananda Bharati vs. The State of Kerala case (1973). The case ensured that the basic structure of the Indian constitution is not altered by the legislature. In wake of imposition of Emergency in 1975, he successfully argued against the government’s application for reconsideration of the Kesavananda decision. Palhivala’s defence of individual liberty and civil rights were visible in the cases that he fought, including Bank Nationalization, Bennet Coleman, St Xavier’s College, Privy Purses, and Minerva Mills. During his lifetime, Palkhivala was also famous for his budget commentary, delivered every year from 1958 to 1994, following the budget presentation in parliament. The commentary was organized by the Forum of Free Enterprise and saw a shift in venues as the audience grew. His incisive commentary and great communication skills had the capacity to fill the stadium as people flocked to listen to his speech. His budget commentaries would often criticize the socialist policies of the Union government, drawing applause from the multitude of the crowd. Palkhivala’s liberal activism was also manifest in his close association with the Forum of Free Enterprise. He led the Forum from 1968 to 2000 and stepped down from the post of president due to ill-health. To serve the cause of liberal democracy, Palkhivala founded the Jayaprakash Institute of Human Freedoms. The institution sought to strengthen the roots of Indian democracy and to carry the legacy of JP. His limited association with the Indian state included an appointment as an ambassador to the United States in 1977 by the Janata government and an offer of the post of Attorney-General in 1968 which he eventually denied. He also argued for India in 3 cases in International courts, including before the Special Tribunal in Geneva appointed by the UN to adjudicate upon Pakistan’s claim to enclaves in Kutch; before the International Civil Aviation Organisation at Montreal; and later in appeal before the World Court at the Hague when Pakistan claimed the right to fly over India. For his immense contribution to the field, he received honorary doctorates from Princeton University, Rutgers University, Lawrence University, University of Wisconsin-Madison, Annamalai University, Ambedkar Law University and the University of Mumbai. After his demise in 2002, Nani Palkhivala Memorial Trust was set up in 2004. The Trust, among other things, holds an annual memorial lecture which has been delivered by some of the most eminent public figures of India. We, the People: India, the Largest Democracy (Strand Book Stall, 1984). The Global Economy, a North-South Dialogue, 1984: Where the North Meets the South, Imperatives for Development in the Global Economy (University of Waterloo, 1985). We, the Nation: The Lost Decades (USB Publishers’ Distributors, 1984). The People, the Only Keepers of Freedom (Civil Liberties Group, 1979). The Constitution and the Common Man (Popular Prakashan, 1971). India’s Priceless Heritage (Bharatiya Vidya Bhavan, 1980). Our Constitution Defaced and Defiled (Macmillan Co of India, 1974). The Highest Taxed Nation (1965). Essential Unity of All Religions (Bharatiya Vidya Bhavan, 1990). Other Writings Should we alter our Constitution? Forty-Three Years of Independence Published On The Supreme Court’s Judgement on the Constitution (42nd Amendment) Act 1976 20  June 1980 The Indian Libertarian Volume : 5 ;Issue: 31 15  June 1958 Sixth National Convention : Swatantra Souvenir 1973 Making Indian Industry Globally Competitive 15  May 1995 The Union Budget 1995-96 : Bypassing parliamentary Select Committee 21  March 1995 S. Divakara on Nani Palkhivala s Union Budget Commentaries S. Divakara, Director-General of the Forum of Free Enterprise speaking about Nani Palkhivala s famous Union Budget commentaries. These commentaries used to be annually organised by the Forum in Bombay soon after Finance Minister s annual budget speeches. --- ## [Thinker] Naval H. Tata URL: https://indianliberals.in/thinkers/naval-h-tata/ --- ## [Thinker] Nicholas Kaldor URL: https://indianliberals.in/thinkers/nicholas-kaldor/ --- ## [Thinker] Nittoor Srinivasa Rao URL: https://indianliberals.in/thinkers/nittoor-srinivasa-rao/ --- ## [Thinker] Om Prakash Kahol URL: https://indianliberals.in/thinkers/om-prakash-kahol/ --- ## [Thinker] Onlooker URL: https://indianliberals.in/thinkers/onlooker/ --- ## [Thinker] Nikita Khrushchev URL: https://indianliberals.in/thinkers/nikita-khrushchev/ --- ## [Thinker] Otto Graf Lambsdorff URL: https://indianliberals.in/thinkers/otto-lambsdorff/ --- ## [Thinker] P Kodanda Rao URL: https://indianliberals.in/thinkers/p-kodanda-rao/ --- ## [Thinker] P. C. Mahalanobis URL: https://indianliberals.in/thinkers/p-c-mahalanobis/ --- ## [Thinker] P. N. Haksar URL: https://indianliberals.in/thinkers/p-n-haksar/ --- ## [Thinker] Dr. P. V. Shenoi URL: https://indianliberals.in/thinkers/p-v-shenoi/ --- ## [Thinker] P. V. Sukhatme URL: https://indianliberals.in/thinkers/p-v-sukhatme/ --- ## [Thinker] Pandita Ramabai URL: https://indianliberals.in/thinkers/pandita-ramabai/ ### Body _From CCS feature article: Pandita Ramabai: A Trailblazing Feminist_ Pandita Ramabai: A Trailblazing FeministEditorial TeamMusingsApril 26, 2023 Pandita Ramabai (1858-1922) was an Indian social reformer, women’s rights activist, scholar, and educator. She is best known for her pioneering work in promoting women’s education and empowerment in India, publishing books on a wide range of topics, including the status of women in India, the Bible, and Sanskrit literature. She travelled extensively in India and abroad, advocating against child marriage, widowhood, and other social injustices against women. Ramabai’s life and work continue to inspire feminists, educators, and social justice activists worldwide. Born on April 23, 1858, in a Marathi-speaking Brahmin family as Rama Dongre, Ramabai was the daughter of Lakshmibai and Anant Shastri Dongre, a Sanskrit scholar and roving reciter of Hindu epics and religious books. Ramabai had two elder siblings: her sister Krishnabai and her brother Srinivas. When her parents and Krishnabai died in the great famine of 1876, Ramabai, equipped with only her education, moved with Srinivas to Calcutta for a better life. Upon reaching Calcutta, Ramabai defied societal expectations and took up the cause of distressed women as her calling. She made a name for herself in the city as a reputed scholar and passionately advocated for the emancipation of women. At the age of twenty, she became the first woman in India to earn the titles of Pandita (the feminine of pundit, or Sanskrit scholar) and Saraswati after examination by the faculty of the University of Calcutta. She joined the Brahmo Samaj in June 1880. The same year, after her brother’s death, she married his friend, Bepin Behari Das Medhavi, a Bengali lawyer from a lower caste- thereby creating fury amongst the society members. Her only child, Manorama, was born in April 1881. Less than a year later, her husband died of Cholera, leaving her in the unenviable situation of a high-caste Hindu widow. After Medhavi died in 1882, Ramabai moved to Pune, where she founded the Arya Mahila Samaj, a society of high-caste Hindu women working to educate girls and against child marriage. She published her first book, Morals for Women, in the original Marathi Stri Dharma Niti. She also testified before the Hunter Commission on Education in India, an enquiry set up by the British government. She suggested that teachers be trained, women school inspectors be appointed, and that Indian women should be admitted to medical colleges. Ramabai’s evidence created a great sensation and reached Queen Victoria. In time, it also contributed to the beginnings of the Women’s Medical Movement, which aimed to improve women’s healthcare in India. Through the influence of Nehemiah Goreh’s apologetical writings, she became intellectually convinced that whatever was true in Brahmo theology was Christian in origin. In 1883, during her visit to England, she was baptised in Wantage, England, and pursued her studies at the Cheltenham Ladies’ College and Bedford College. She was in Europe to pursue a medical degree; however, her deafness caused serious impediments to her medical education. Instead, she used her time to continue the study of Christianity, which she had begun in India and had her young daughter baptised as Anglican Christian. From 1883 to 1886, Ramabai was, in the formal sense, an Anglo-Catholic, lecturing and studying social reform and education. Having relinquished her dreams of a medical degree, in 1886, she travelled to the USA to attend the graduation from the Women’s Medical College in Philadelphia of Anandibai Joshee, the first Indian woman to become a medical doctor, who was also her cousin. She remained in the USA for two years, translating textbooks and giving lectures throughout the United States and Canada. In 1887 she published her first English book, The High-Caste Hindu Woman, a relentless indictment of Hindu India’s treatment of its women. The same year, Ramabai met Frances Willard–an American educator and a woman suffragist– who later invited her to address the convention of women’s organisation. On February 1, 1889, Ramabai returned to India and, within a month, established Sharada Sadan, or the Home of Learning, in Bombay with two students. She successfully lobbied for aid to start a secular school for child widows in India and formed The Ramabai Association, which pledged ten years of financial support for the cause. Under the Mukti Mission, the school quickly grew and was transferred to Poona. In 1891, the school was involved in controversy when the Indian reformers condemned Ramabai for preaching Christianity to students. Despite the condemnation, by 1895, the school was a resounding success, with 26 child widows and 13 non-widows in the school. In 1896, during a severe famine, Ramabai toured the villages of Maharashtra with a caravan of bullock carts, rescuing thousands of children, child widows, orphans and destitute women and bringing them to the shelter of Mukti and Sharada Sadan. By 1900, 1500 residents and over a hundred cattle were in the Mukti mission. The Pandita Ramabai Mukti Mission is still active today, providing housing, education, and vocational training to widows, orphans and those with sight impairments. Her daughter Manoramabai also established a new school, and in 1919, government recognition was finally granted to the Sharada Sadan School. Pandita Ramabai was awarded the Kaiser É Hind Medal in 1919. By 1920, Ramabai sensed a growing physical weakness and designated her daughter to supervise the activities of the Mukti Mission. Manorama died in 1921, and Ramabai herself died in 1922. She authored several influential works in her lifetime, including The Testimony of an Indian Woman, Pandita Ramabai’s American Encounter: The Peoples of the United States (1889) and Mukti Prakash (1923) – a Marathi-language book compiled and published posthumously by her followers. Through these works, she brought the plight of women in Indian society out of the closet and made relentless efforts to realise their emancipation and empowerment. --- ## [Thinker] Parth J. Shah URL: https://indianliberals.in/thinkers/parth-shah/ --- ## [Thinker] Peregrine URL: https://indianliberals.in/thinkers/peregrine/ --- ## [Thinker] Periyar E. V. Ramasamy URL: https://indianliberals.in/thinkers/periyar-e-v-ramasamy/ --- ## [Thinker] Peter Bauer URL: https://indianliberals.in/thinkers/peter-bauer/ --- ## [Thinker] Pherozeshah Mehta URL: https://indianliberals.in/thinkers/pherozeshah-mehta/ --- ## [Thinker] Dr. Phiroze B. Medhora URL: https://indianliberals.in/thinkers/phiroze-b-medhora/ --- ## [Thinker] Phiroze J Shroff URL: https://indianliberals.in/thinkers/phiroze-j-shroff/ --- ## [Thinker] Piloo Mody URL: https://indianliberals.in/thinkers/piloo-mody/ --- ## [Thinker] Pratap Bhanu Mehta URL: https://indianliberals.in/thinkers/pratap-bhanu-mehta/ --- ## [Thinker] Prof CN Vakil URL: https://indianliberals.in/thinkers/prof-cn-vakil/ --- ## [Thinker] R. A. Jahagirdar URL: https://indianliberals.in/thinkers/r-a-jahagirdar/ --- ## [Thinker] Prof. RL Varshney URL: https://indianliberals.in/thinkers/prof-rl-varshney/ --- ## [Thinker] Dr. R. C. Cooper URL: https://indianliberals.in/thinkers/r-c-cooper/ --- ## [Thinker] R. A. Mashelkar URL: https://indianliberals.in/thinkers/r-a-mashelkar/ --- ## [Thinker] R. G. Katoti URL: https://indianliberals.in/thinkers/r-g-katoti/ --- ## [Thinker] R. Gopalakrishnan URL: https://indianliberals.in/thinkers/r-gopalakrishnan/ --- ## [Thinker] Prof. R. J. Taraporevala URL: https://indianliberals.in/thinkers/r-j-taraporevala/ --- ## [Thinker] R. K. Daruwalla URL: https://indianliberals.in/thinkers/r-k-daruwalla/ --- ## [Thinker] R. K. Hazari URL: https://indianliberals.in/thinkers/r-k-hazari/ --- ## [Thinker] R. K. Amin URL: https://indianliberals.in/thinkers/r-k-amin/ --- ## [Thinker] R. K. Talwar URL: https://indianliberals.in/thinkers/r-k-talwar/ --- ## [Thinker] R. M. Honavar URL: https://indianliberals.in/thinkers/r-m-honavar/ --- ## [Thinker] R. M. Mohan Rao URL: https://indianliberals.in/thinkers/r-m-mohan-rao/ --- ## [Thinker] R. N. Jha URL: https://indianliberals.in/thinkers/r-n-jha/ --- ## [Thinker] Raghuram G. Rajan URL: https://indianliberals.in/thinkers/raghuram-g-rajan/ --- ## [Thinker] Raghunath Karve URL: https://indianliberals.in/thinkers/raghunath-karve/ --- ## [Thinker] Rabindranath Tagore URL: https://indianliberals.in/thinkers/rabindranath-tagore/ --- ## [Thinker] Raja Ram Mohan Roy URL: https://indianliberals.in/thinkers/raja-ram-mohan-roy/ ### Body Raja Ram Mohan Roy (1772–1833) was a Bengal reformer, scholar, and the intellectual progenitor of the Indian liberal tradition. He founded the Brahmo Samaj in 1828 — a monotheistic, anti-caste, pro women's-education reform movement that became the originating institution of the Indian liberal reformist tradition. A Sanskrit and Persian scholar fluent also in Arabic, English, Greek, Hebrew, and Latin, Roy campaigned against sati (widow immolation), for women's right to property and education, and for the introduction of English-language modern education in India. His 1818 essay "A Conference between an Advocate for, and an Opponent of, the Practice of Burning Widows Alive" was a foundational argument against sati; the practice was banned by Lord William Bentinck in 1829, in significant part due to Roy's advocacy. Roy was also one of India's earliest defenders of press freedom. His 1823 "Memorial Against Press Regulations" — submitted to the Governor-General after a licensing ordinance was imposed on Indian-language newspapers — is one of the earliest sustained arguments in any Indian language for the principle that "the unrestrained Liberty of Publication is the only effectual means" of holding government accountable. In 1830 the Mughal emperor Akbar II bestowed on him the title "Raja" and sent him to England as an envoy to argue against reductions in the imperial allowance. He died in Bristol in 1833. > _Drafted bio. Replace with canonical CCS content if available. The site's `/content/ram-mohan-roy/` page is a feature article on press freedom that quotes Roy's 1824 letter to the Governor — not a biographical profile._ --- ## [Thinker] Rajaram Ajgaonkar URL: https://indianliberals.in/thinkers/rajaram-ajgaonkar/ --- ## [Thinker] Rajendra Prasad URL: https://indianliberals.in/thinkers/rajendra-prasad/ --- ## [Thinker] Rajesh Mishra URL: https://indianliberals.in/thinkers/rajesh-mishra/ --- ## [Thinker] Rajiv Gandhi URL: https://indianliberals.in/thinkers/rajiv-gandhi/ --- ## [Thinker] Rajkumari Amrit Kaur URL: https://indianliberals.in/thinkers/rajkumari-amrit-kaur/ --- ## [Thinker] Dr. Rakesh Mohan URL: https://indianliberals.in/thinkers/rakesh-mohan/ --- ## [Thinker] Ram Jethmalani URL: https://indianliberals.in/thinkers/ram-jethmalani/ --- ## [Thinker] Ralph Borsodi URL: https://indianliberals.in/thinkers/ralph-borsodi/ --- ## [Thinker] Ralph Waldo Emerson URL: https://indianliberals.in/thinkers/ralph-waldo-emerson/ --- ## [Thinker] Ram Manohar Lohia URL: https://indianliberals.in/thinkers/ram-manohar-lohia/ --- ## [Thinker] Ramabai Ranade URL: https://indianliberals.in/thinkers/ramabai-ranade/ --- ## [Thinker] Ramadevi Chowdhury URL: https://indianliberals.in/thinkers/ramadevi-chowdhury/ --- ## [Thinker] L. Ramdas URL: https://indianliberals.in/thinkers/ramdas-rear-admiral/ --- ## [Thinker] Shri Ramniwas R. Ruia URL: https://indianliberals.in/thinkers/ramniwas-ruia/ --- ## [Thinker] Ramtanu Lahiri URL: https://indianliberals.in/thinkers/ramtanu-lahiri/ --- ## [Thinker] Rani Rashmoni URL: https://indianliberals.in/thinkers/rani-rashmoni/ --- ## [Thinker] Rasikkrishna Mallik URL: https://indianliberals.in/thinkers/rasikkrishna-mallik/ --- ## [Thinker] RD Aga URL: https://indianliberals.in/thinkers/rd-aga/ --- ## [Thinker] Revatbha Rayjada URL: https://indianliberals.in/thinkers/revatbha-rayjada/ --- ## [Thinker] Roberto de Oliveira Campos URL: https://indianliberals.in/thinkers/roberto-de-oliveira-campos/ --- ## [Thinker] Robert McNamara URL: https://indianliberals.in/thinkers/robert-mcnamara/ --- ## [Thinker] Ronald Meinardus URL: https://indianliberals.in/thinkers/ronald-meinardus/ --- ## [Thinker] Russi Mody URL: https://indianliberals.in/thinkers/russi-mody/ --- ## [Thinker] Ruth Benedict URL: https://indianliberals.in/thinkers/ruth-benedict/ --- ## [Thinker] Rukhmabai Raut URL: https://indianliberals.in/thinkers/rukhmabai/ --- ## [Thinker] S. D. Naik URL: https://indianliberals.in/thinkers/s-d-naik/ --- ## [Thinker] S. Chandrasekhar URL: https://indianliberals.in/thinkers/s-chandrasekhar/ --- ## [Thinker] S. Divakara URL: https://indianliberals.in/thinkers/s-divakara/ --- ## [Thinker] S. K. Patil URL: https://indianliberals.in/thinkers/s-k-patil/ --- ## [Thinker] S. L. N. Sinha URL: https://indianliberals.in/thinkers/s-l-n-sinha/ --- ## [Thinker] S. M. Dahanukar URL: https://indianliberals.in/thinkers/s-m-dahanukar/ --- ## [Thinker] S. P. Sathe URL: https://indianliberals.in/thinkers/s-p-sathe/ --- ## [Thinker] Dr. S. R. K. Rao URL: https://indianliberals.in/thinkers/s-r-k-rao/ --- ## [Thinker] S. S. Kanoria URL: https://indianliberals.in/thinkers/s-s-kanoria/ --- ## [Thinker] S. S. Nadkarni URL: https://indianliberals.in/thinkers/s-s-nadkarni/ --- ## [Thinker] S. V. Raju URL: https://indianliberals.in/thinkers/s-v-raju/ ### Body S V Raju (1933–2015) was the epitome of the dissenting Indian liberal tradition which stood as a bulwark against the socialist domination of the Indian public sphere. As a lifelong liberal activist, he was closely associated with the Swatantra Party, Masani's office, and the Freedom First magazine for many decades. Raju joined the newly launched Swatantra Party in 1959 as the Executive Secretary and remained a member until the very end. He worked under Minoo Masani, an association that continued even after the party wound up. With the merger of Swatantra, Raju's liberal activism saw him engaging with the Freedom First magazine, Forum of Free Enterprise, Project for Economic Education, and Indian Liberal Group. He is best known for keeping *Freedom First* alive — championing the cause of free markets, individual rights, and the rule of law. At a time when liberal voices were muffled in popular discourse, *Freedom First* provided an outlet for liberals to voice their dissent. He also revived the Indian Liberal Group in the 1990s and ran it from his Mumbai office until 2010. --- ## [Thinker] S. S. Tarapore URL: https://indianliberals.in/thinkers/s-s-tarapore/ --- ## [Thinker] Sachin Sen URL: https://indianliberals.in/thinkers/sachin-sen/ --- ## [Thinker] Sadanand Varde URL: https://indianliberals.in/thinkers/sadanand-varde/ --- ## [Thinker] Salvador de Madariaga URL: https://indianliberals.in/thinkers/salvador-de-madariaga/ --- ## [Thinker] Samdhong Rinpoche URL: https://indianliberals.in/thinkers/samdhong-rinpoche/ --- ## [Thinker] Dr. Samiran Nundy URL: https://indianliberals.in/thinkers/samiran-nundy/ --- ## [Thinker] Sanjay Panse URL: https://indianliberals.in/thinkers/sanjay-panse/ --- ## [Thinker] Vallabhbhai Patel URL: https://indianliberals.in/thinkers/sardar-patel/ --- ## [Thinker] Sarvepalli Radhakrishnan URL: https://indianliberals.in/thinkers/sarvepalli-radhakrishnan/ --- ## [Thinker] Sarojini Naidu URL: https://indianliberals.in/thinkers/sarojini-naidu/ --- ## [Thinker] Sauvik Chakraverti URL: https://indianliberals.in/thinkers/sauvik-chakraverti/ ### Body Sauvik Chakraverti (1956-2014) was an award-winning columnist and author whose books, monographs and columns advanced the cause of libertarian movement in India. Sauvik had studied governance at LSE and was deeply influenced by the ideas of F A Hayek. For his endeavour, Sauvik was awarded the inaugural Bastiat Prize (2002). He received the prize from the former British Prime Minister, Lady Margaret Thatcher, at a ceremony in London. His book “Antidote: Essays Against the Socialist Indian State” (2000) was a racy polemic against the excess of the Indian state and made the case for a libertarian state. The sequel “Antidote 2: For Liberal Governance” (2003) revealed the breadth of the concerns before India’s liberals. He also contributed articles to the business newspaper Mint and published papers for the Centre for Civil Society. In his writings, Sauvik would bring the public choice approach to issues of Indian policymaking. His writings are accessible at The Antidote Blog. Free Your Mind: A Beginner’s Guide to Political Economy Udarwad: Raj, Samaj aur Bazar ka Naya Paath (Centre for Civil Society, 2006). Antidote 2: For Liberal Governance (MacMillan, 2003). Antidote: Essays against the Socialist Indian State (MacMillan, 2000). From the Hair of Shiva to the Hair of the Prophet… and Other Essays Natural Order: Essays Exploring Civil Government and the Rule of Law. Free Your Mind: A Beginner’s Guide to Political Economy Udarwad: Raj, Samaj aur Bazar ka Naya Paath (Hindi book based on ‘Free Your Mind’) Antidote 2: For Liberal Governance (MacMillan, 2003) Antidote: Essays against the Socialist Indian State (MacMillan, 2000) From the Hair of Shiva to the Hair of the Prophet… and Other Essays Natural Order: Essays Exploring Civil Government and the Rule of Law Other Writings Four Wheels for All: The Case of Rapid Automobilisation of India The Essential Frédéric Bastist Self Help: With Illustrations of Conduct and Perseverance by Samuel Smiles Monographs/Viewpoints Population Causes Prosperity, CCS Viewpoint 2 Peter Bauer: A True Friend of the World’s Poor, CCS Viewpoint 4 New Public Management: Escape from Babudom Published On At Liberty: Freedom to Express and Offend 31  July 2012 --- ## [Thinker] SH Batlivala URL: https://indianliberals.in/thinkers/sh-batlivala/ --- ## [Thinker] Shailaja Bapat URL: https://indianliberals.in/thinkers/shailaja-bapat/ --- ## [Thinker] Shailesh Gandhi URL: https://indianliberals.in/thinkers/shailesh-gandhi/ --- ## [Thinker] Shareefa Hamid Ali URL: https://indianliberals.in/thinkers/shareefa-hamid-ali/ --- ## [Thinker] Shesrav Mohite URL: https://indianliberals.in/thinkers/shesrav-mohite/ --- ## [Thinker] Chhatrapati Shivaji URL: https://indianliberals.in/thinkers/shivaji/ --- ## [Thinker] Sharad Joshi URL: https://indianliberals.in/thinkers/sharad-joshi/ ### Body _From CCS feature article: Sharad Joshi and the Crisis of Trade Unions_ Sharad Joshi and the Crisis of Trade UnionsadminOpinions & EventsMay 18, 2021 Sharad Joshi addressed his criticism against the government as well as the then labour movements in the country. According to him, trade unionism in India had taken a path far different from their predecessors in Europe.  (Image Credit : The Times of India) There’s no better or succinct way to introduce Sharad Joshi than by narrating an interesting anecdote that he shared in his book Khulya Vyavasthekade Khulya Manane. It gives a glimpse of his politics and personality. In 1996, the government employees of the Department of Post went on one of their routine strikes and this irked Sharad Joshi so much that he made an interesting offer to the government. He proposed that the government should let him run the department of Post. He challenged that he would not only employ just half of the existing number of workers but he would also give them only half of the current remuneration and still ensure the required level of efficiency to distribute all postcards from any major city in India to another within 24 hours. His challenge to the government may seem a bit foolhardy today. But the fact remains that at that time it took almost five days for a postal delivery to take place from one major city to another. We can not even fathom the unending delays for a letter or parcel to reach the remotest corners of the country. Sharad Joshi addressed his criticism against the government as well as the then labour movements in the country. According to him, trade unionism in India had taken a path far different from their predecessors in Europe. The trade unions in nineteenth-century Europe emerged as a response to the nascent industrialization. The workers used strikes as a potent weapon to organize themselves and have their collective voice heard. These ‘have nots’ had no other option but to use such techniques. One must not forget that unlike today the working class of that time had very little role to play in political decision making. The franchise was limited and it often excluded the poor and the illiterate. The instrument of the strike was not easy to use. The workers would lose their daily wages and it would render them vulnerable to joblessness and dire hunger. The state would look at their strikes as a law-and-order problem and the police crackdowns used to be unbearable. Even if the state spared their lives, there was no guarantee that the goons hired by the owner of the workplace would be equally generous. The workers of the nineteenth century shed their blood and even made the ultimate sacrifice for basic economic rights. Sharad Joshi acknowledged the higher ideals and causes for which these early unions fought. Having acknowledged those, he argued that much of these above-mentioned excesses were a characteristic of an early capitalism which hadn’t developed enough. Sharad Joshi ascertains that much of these evils were a function of an economy that was devoid of properly developed markets. However, when the doctrine of Socialism took roots in Europe, a simplistic and permanent dichotomy of ‘monstrous haves’ and ‘oppressed have nots’ was established. Many legislations alleviated the working class from earlier miseries. The workers got several concessions in terms of their salary, bonus, allowances and the security of a job. This overhaul occurred first in the private sector and then in the public sector. Talking about the socialistic practices in India, Sharad Joshi argued that Socialism protected the rich industrialists from an international competition that never brought the best out of Indian producers. According to Joshi, socialism could never sustain without the licensing regime. It was a license – given to the industrialists to plunder the Indian consumers. While the Indian consumer used the substandard goods, the profits of these industrialists soared. The exponential growth in profits was not hidden from the union leaders. The smartest of leaders knew the extent of profit earned by the company owners. They also knew that many of these capitalists were not sharing the details of real profits with the workers and in turn threw peanuts at the workers. The union leaders exploited such opportunities to advance their unrealistic demands for wage hikes.  The owners of industries would have only two options; first, to raise the salary twofold or threefold and second to let the workers stop working and go on strike. If workers stopped working even for a day or two the owners would lose a humongous amount of money. Therefore, the reluctant capitalists would reconcile with the workers and make as many concessions as quickly as possible. This got converted into a trend where the union leaders started competing with each other. Blackmailing the capitalist became the quickest way to establish influence on the workers and prove their credibility as  leaders. If the economic reforms exposed the Indian capitalists to outside competition, they also reduced the vulnerability of the capitalist vis-à-vis the union leaders. After seeing the approaching liberalization of the economy, the industrialists turned more or less immune to the blackmailing of these trade unions. Therefore, upon hearing the news of the textile workers in Mumbai going on strike under the leadership of Dr. Datta Samant, far from being under pressure, the textile mill owners and their managers were ecstatic and thus unwavering! Joshi argued that by the 1980s the tide had turned against the workers and in favour of the industrialists. Now the blackmailed capitalists of yesteryears weren’t entirely vulnerable as they had multiple options at their disposal to maneuver against the calls for a strike. They could take strict measures in the face of reduced productivity. These measures come in different forms – right from reducing the number of workers by firing inefficient and underperforming workers to hiring workers on a contractual basis. They could also terminate all operations if the business showed no promise or if it ran into the irreparable loss. As stringent as these measures may seem they were necessary, after all the industrialists didn’t have the option of printing more money to fulfil the whims and fancies of the workers on strike. Unfortunately, these changes remained limited to the private sector. The government servants remained no less protected than the indigenous capitalists during the days of import substitution and socialism. The government jobs became prestigious due to the unreasonable amount of protection that the government granted to its workers. The government jobs became so lucrative that even doctors and engineers who could practice privately started contemplating and considering government positions. The protection provided to the government jobs created a political economy where the caste groups started demanding reserved positions in the recruitment to be able to enjoy the spoils of the spoils system called the government bureaucracy. Thus, the political demands of castes for quotas in government jobs can be traced back to the guarantee of security and economic benefits attached to these jobs. Sharad Joshi draws our attention to another important fact related to the wages of Indian workers. He argued that the wages of Indian workers or servants are modest as compared to the workers and servants having similar responsibilities or performing the same tasks abroad. But if we compared the two based on their productivity and efficiency, the pay scales offered to Indian counterparts were higher than what they deserved. This invited the economic crisis, and the government became bankrupt. The economic compulsions propelled the government to lay off the workers and adopt austerity measures. There was a growing realization that consumers deserved commodities and services of good quality and that license raj was becoming a hurdle.  The License-permit regime was removed but the Indian economy was faced with new problems. There was an absolute dearth of good infrastructure. India didn’t have a steady supply of electricity and water; the roads were in a bad shape and the railways were inadequate. If India had to build a robust infrastructure it required capital and technology. Therefore, India was desperately looking for foreign investment. But the basic services like the postal service, telecom services, insurance and the banking sector were so obsolete that foreign investors would think a thousand times before considering India as a potential destination to invest their capital. Joshi unequivocally asserted that when the nation was embroiled in economic distress these workers and government servants were relatively silent because they were aware that they had put the country in this situation. However, as soon as the economic threat was averted, they bounced back and demanded that the government must spend more. They wanted the bureaucracy to expand once again. They wanted a regular and uninterrupted increase in their salaries and allowances. Joshi made a very interesting and pertinent argument when he said that these workers never utilized their superior position and economic standing to organize the unorganized workers or peasants. They used the trade unions to retain old economic benefits and acquire new privileges for themselves. Such workers have no right to talk about the (rich) legacy of workers’ movements, claimed Sharad Joshi. Sharad Joshi warned against the increasing government expenditure mainly on public sector enterprises that plundered consumers and created hurdles for those who wanted to increase productivity. He believed that unless the institutions can hire the efficient and fire the inefficient, this country is destined to see doomsday. Sharad Joshi further commented that the members of trade unions carrying out the aforesaid strike have a strong belief that calling a strike is just and constitutional. He agreed with the just nature of the individual and collective rights of workers to negotiate the terms of their work. However, he emphasized that these workers don’t have the right to dictate that their factory owners should have a monopoly to produce a particular commodity. Such a monopoly or protection can hurt the way the consumers choose to live their lives and the workers don’t have a right to benefit financially at the cost of the rights of consumers. If the workers have a right to negotiate, the consumers have a right to choose, claimed Joshi. Gone are the days when the workers enjoyed all rights and the consumer had none. If the workers claim that they can protest by calling strikes, the industrialists should have a right to decrease, increase or even cease the operations of a factory. The workers do have rights but their rights will be called just and fair only if they recognize the freedom of consumers, businessmen and industrialists to exercise their respective rights. No wonder Sharad Joshi’s challenge fell on deaf ears. Neither the government nor the government employees took it upon themselves to prove Sharad Joshi wrong. He made it a point to draw an example of the state of affairs in the country marked by blatant heedlessness of the government by saying “…this is what happens to the real owner (the common people of India) when the servants (the government bureaucracy and the political class) become the owners.” (The author has highlighted the key arguments of Sharad Anantrao Joshi from the ninth article – Khuli Vyavastha ani Sampa of his book Khulya Vyavasthekade Khulya Manane.) --- ## [Thinker] Sharad Pawar URL: https://indianliberals.in/thinkers/sharad-pawar/ --- ## [Thinker] Shrikant Umrikar URL: https://indianliberals.in/thinkers/shrikant-umrikar/ --- ## [Thinker] Shyamala Gopinath URL: https://indianliberals.in/thinkers/shyamala-gopinath/ --- ## [Thinker] Sivanath Sastri URL: https://indianliberals.in/thinkers/sivanath-sastri/ --- ## [Thinker] SN Haji URL: https://indianliberals.in/thinkers/sn-haji/ --- ## [Thinker] Sucheta Dalal URL: https://indianliberals.in/thinkers/sucheta-dalal/ --- ## [Thinker] SS Bhandare And JK Mukhopadhyay URL: https://indianliberals.in/thinkers/ss-bhandare-and-jk-mukhopadhyay/ --- ## [Thinker] Sujata Manohar URL: https://indianliberals.in/thinkers/sujata-manohar/ --- ## [Thinker] Sudha R. Shenoy URL: https://indianliberals.in/thinkers/sudha-r-shenoy/ ### Body Sudha Shenoy was an economist trained in Austrian tradition and a proponent of classical liberal ideas. Born in 1943 to the economist B R Shenoy, she completed her education at Mount Carmel School and St Xavier’s College. She would further enrol at LSE, UVA, and SOAS for higher education. At LSE, she established the Whig Society on the advice of F A Hayek. As an economist, she was well versed in topics like the common law, the history of international trade, and the life and work of FA Hayek. She was elected a member of the prestigious Mont Pelerin society in 1972. Her academic career spanned lectureship in economic history at the University of Newcastle, Australia; and visiting professorships at California State University, Hayward; Ohio University, Athens; George Mason University and Mises Institute. In her last days, she was working on a biography of Hayek and the British economic history through 1914, showing the intertwined growth of common law, market order, and the capital structure. She always emphasised on the importance of knowledge of economic history for a student of economics. Dr. Sudha R. Shenoy passed away on 31 May 2008 at the age of 65 after a long battle with cancer. Central Planning in India: A Critical Review (Wiley Eastern, 1971). India: Progress or Poverty? A Review of the Outcome of Central Planning in India, 1951-69 (Institute of Economic Affairs, 1971). Towards A Theoretical Framework For British And International Economic History (Ludwig von Mises Institute, 2010). Underdevelopment and Economic Growth (Longman Group, 1970). Inflation: Phonotape (Sydney, 1974). A Tiger by the Tail: A 40-years’ Running Commentary on Keynesianism by Hayek (ed. Institute of Economic Affairs, 1972). Under Development And Economic Growth (London: Longman, 1970) Central Planning In India: A Critical Review India: Progress or Poverty?: A Review of the Outcome of Central Planning in India, 1951-69, (London: IEA, 1971) Interviews The Global Perspective: An Interview with Sudha Shenoy, Austrian Economics Newsletter, Winter 2003 Other Writings The Economic & Social History of Continental Europe & Britain, c. 1000-1914: An Introductory, Annota A Tiger By the Tail: The Keynesian Legacy of Inflation by F.A. Hayek (1972, 1978, and 1979) Wage-Price Control: Myth and Reality | R1 | 01 February 1978, Center for Independent Studies, Australia Published On The Indian Libertarian Volume : 5 ;Issue: 18 1  December 1957 The Indian Libertarian Volume : 5 ;Issue: 15 1  October 1957 How I Stopped Worrying and Learned to Love the Trade Deficit | Sudha Shenoy Lecture presented by Sudha R Shenoy at the Ludwig von Mises Institute in Auburn, Alabama; October 26, 2006. --- ## [Thinker] Sunil S. Bhandare URL: https://indianliberals.in/thinkers/sunil-bhandare/ --- ## [Thinker] Surinder P. S. Pruthi URL: https://indianliberals.in/thinkers/surinder-p-s-pruthi/ --- ## [Thinker] Suresh Parikh URL: https://indianliberals.in/thinkers/suresh-parikh/ --- ## [Thinker] Swami Anand URL: https://indianliberals.in/thinkers/swami-anand/ --- ## [Thinker] Swaminathan A. Aiyar URL: https://indianliberals.in/thinkers/swaminathan-a-aiyar/ --- ## [Thinker] T. Mathew URL: https://indianliberals.in/thinkers/t-mathew/ --- ## [Thinker] T. T. Krishnamachari URL: https://indianliberals.in/thinkers/t-t-krishnamachari/ --- ## [Thinker] T. Thomas URL: https://indianliberals.in/thinkers/t-thomas/ --- ## [Thinker] Tahir Siddiqui URL: https://indianliberals.in/thinkers/tahir-siddiqui/ --- ## [Thinker] T. Subbaya Shetty URL: https://indianliberals.in/thinkers/t-subbaya-shetty/ --- ## [Thinker] Tanguturi Prakasam Panthulu URL: https://indianliberals.in/thinkers/tanguturi-prakasam/ --- ## [Thinker] Tarabai Shinde URL: https://indianliberals.in/thinkers/tarabai-shinde/ --- ## [Thinker] Tarun Das URL: https://indianliberals.in/thinkers/tarun-das/ --- ## [Thinker] Theodor Heuss URL: https://indianliberals.in/thinkers/theodor-heuss/ --- ## [Thinker] Thomas Aquinas URL: https://indianliberals.in/thinkers/thomas-aquinas/ --- ## [Thinker] Thomas Robert Malthus URL: https://indianliberals.in/thinkers/thomas-robert-malthus/ --- ## [Thinker] Trupti Parekh URL: https://indianliberals.in/thinkers/trupti-parekh/ --- ## [Thinker] Prof. U. R. Rao URL: https://indianliberals.in/thinkers/u-r-rao/ --- ## [Thinker] Thomas Babington Macaulay URL: https://indianliberals.in/thinkers/thomas-babington-macaulay/ --- ## [Thinker] Uday Kotak URL: https://indianliberals.in/thinkers/uday-kotak/ --- ## [Thinker] Usha Thorat URL: https://indianliberals.in/thinkers/usha-thorat/ --- ## [Thinker] Usha Mehta URL: https://indianliberals.in/thinkers/usha-mehta/ --- ## [Thinker] V. B. Haribhakti URL: https://indianliberals.in/thinkers/v-b-haribhakti/ --- ## [Thinker] V. K. Krishna Menon URL: https://indianliberals.in/thinkers/v-k-krishna-menon/ --- ## [Thinker] V. K. Narasimhan URL: https://indianliberals.in/thinkers/v-k-narasimhan/ --- ## [Thinker] V. K. R. V. Rao URL: https://indianliberals.in/thinkers/v-k-r-v-rao/ --- ## [Thinker] V. M. Tarkunde URL: https://indianliberals.in/thinkers/v-m-tarkunde/ --- ## [Thinker] V. P. Menon URL: https://indianliberals.in/thinkers/v-p-menon/ --- ## [Thinker] V. P. Sinha URL: https://indianliberals.in/thinkers/v-p-sinha/ --- ## [Thinker] V. V. John URL: https://indianliberals.in/thinkers/v-v-john/ --- ## [Thinker] V. S. Srinivasa Sastri URL: https://indianliberals.in/thinkers/v-s-srinivasa-sastri/ --- ## [Thinker] V. Vijayatunga URL: https://indianliberals.in/thinkers/v-vijayatunga/ --- ## [Thinker] Vasudeva Vora URL: https://indianliberals.in/thinkers/vasudeva-vora/ --- ## [Thinker] VH Pandya URL: https://indianliberals.in/thinkers/vh-pandya/ --- ## [Thinker] Vijay Kelkar URL: https://indianliberals.in/thinkers/vijay-kelkar/ --- ## [Thinker] Vijay Jawandhia URL: https://indianliberals.in/thinkers/vijay-jawandhia/ --- ## [Thinker] Vijay Prulkar URL: https://indianliberals.in/thinkers/vijay-prulkar/ --- ## [Thinker] Wing Commander Vijay Mahajan URL: https://indianliberals.in/thinkers/vijay-mahajan-aviation/ --- ## [Thinker] Vijaya Lakshmi Pandit URL: https://indianliberals.in/thinkers/vijaya-lakshmi-pandit/ --- ## [Thinker] Vinoba Bhave URL: https://indianliberals.in/thinkers/vinoba-bhave/ --- ## [Thinker] Voltaire URL: https://indianliberals.in/thinkers/voltaire/ --- ## [Thinker] W. H. Hutt URL: https://indianliberals.in/thinkers/w-h-hutt/ --- ## [Thinker] Warren Hastings URL: https://indianliberals.in/thinkers/warren-hastings/ --- ## [Thinker] Wilhelm Röpke URL: https://indianliberals.in/thinkers/wilhelm-ropke/ --- ## [Thinker] Lord William Bentinck URL: https://indianliberals.in/thinkers/william-bentinck/ --- ## [Thinker] Winston Churchill URL: https://indianliberals.in/thinkers/winston-churchill/ --- ## [Thinker] WW Rowstow URL: https://indianliberals.in/thinkers/ww-rowstow/ --- ## [Thinker] Willy Brandt URL: https://indianliberals.in/thinkers/willy-brandt/ --- ## [Thinker] Dr. Y. K. Hamied URL: https://indianliberals.in/thinkers/y-k-hamied/ --- ## [Thinker] Dr. Y. V. Reddy URL: https://indianliberals.in/thinkers/y-v-reddy/ --- ## [Thinker] Yashodabai Agarkar URL: https://indianliberals.in/thinkers/yashodabai-agarkar/ --- ## [Thinker] Yogendra Mankad URL: https://indianliberals.in/thinkers/yogendra-mankad/ --- ## [Thinker] Zafar Futehally URL: https://indianliberals.in/thinkers/zafar-futehally/ --- # Organisations ## [Organisation] A. D. Shroff Memorial Trust URL: https://indianliberals.in/organisations/a-d-shroff-memorial-trust/ ### Body *Entry pending editorial review. Added 2026-05-18 to surface works published by this organisation that were previously linked only by text-only publisher_name fields.* --- ## [Organisation] Academic Association (Derozio) URL: https://indianliberals.in/organisations/academic-association-derozio/ --- ## [Organisation] All-India Newspaper Editors Conference URL: https://indianliberals.in/organisations/all-india-newspaper-editors-conference/ --- ## [Organisation] All-India Sarafa Association URL: https://indianliberals.in/organisations/all-india-sarafa-association/ --- ## [Organisation] Bharathan Publications URL: https://indianliberals.in/organisations/bharathan-publications/ --- ## [Organisation] Bharatiya Vidya Bhavan URL: https://indianliberals.in/organisations/bharatiya-vidya-bhavan/ --- ## [Organisation] Bombay Stock Exchange URL: https://indianliberals.in/organisations/bombay-stock-exchange/ --- ## [Organisation] All-India Liberal Federation URL: https://indianliberals.in/organisations/all-india-liberal-federation/ --- ## [Organisation] Atlas Network URL: https://indianliberals.in/organisations/atlas-network/ --- ## [Organisation] Brahmo Samaj URL: https://indianliberals.in/organisations/brahmo-samaj/ --- ## [Organisation] Congress Socialist Party URL: https://indianliberals.in/organisations/congress-socialist-party/ --- ## [Organisation] Council for Liberal Democracy URL: https://indianliberals.in/organisations/council-for-liberal-democracy/ --- ## [Organisation] Council of Asian Liberals and Democrats URL: https://indianliberals.in/organisations/council-of-asian-liberals-and-democrats/ --- ## [Organisation] Centre for Civil Society URL: https://indianliberals.in/organisations/centre-for-civil-society/ --- ## [Organisation] Federation of Indian Chambers of Commerce URL: https://indianliberals.in/organisations/federation-of-indian-chambers-of-commerce/ --- ## [Organisation] Ford Foundation URL: https://indianliberals.in/organisations/ford-foundation/ --- ## [Organisation] Forum of Free Enterprise URL: https://indianliberals.in/organisations/forum-of-free-enterprise/ ### Body Founded by A. D. Shroff in 1956. Mumbai-based educational organisation devoted to explaining the case for private enterprise to the Indian public. Long associated with M. R. Pai (General Secretary 1956–1976), Nani Palkhivala (President), and B. R. Shenoy. The Forum has produced one of the largest single bodies of primary works in the Indian classical-liberal tradition — booklets, pamphlets, and lecture transcripts published continuously since the 1950s. --- ## [Organisation] Friedrich Naumann Foundation for Freedom URL: https://indianliberals.in/organisations/friedrich-naumann-foundation/ --- ## [Organisation] Hindu College Calcutta URL: https://indianliberals.in/organisations/hindu-college-calcutta/ --- ## [Organisation] Hoover Institution URL: https://indianliberals.in/organisations/hoover-institution/ --- ## [Organisation] Indian Liberal Group URL: https://indianliberals.in/organisations/indian-liberal-group/ --- ## [Organisation] Indian Merchants Chamber URL: https://indianliberals.in/organisations/indian-merchants-chamber/ --- ## [Organisation] Indian National Congress URL: https://indianliberals.in/organisations/indian-national-congress/ --- ## [Organisation] Initiative for Open Society URL: https://indianliberals.in/organisations/initiative-for-open-society/ --- ## [Organisation] Janashakti Books and Publications URL: https://indianliberals.in/organisations/janashakti-books-and-publications/ --- ## [Organisation] Janashakti Vachak Chalval URL: https://indianliberals.in/organisations/janashakti-vachak-chalval/ --- ## [Organisation] John Templeton Foundation URL: https://indianliberals.in/organisations/john-templeton-foundation/ --- ## [Organisation] Kisan Samvay Samiti URL: https://indianliberals.in/organisations/kisan-samvay-samiti/ --- ## [Organisation] Leslie Sawhny Centre URL: https://indianliberals.in/organisations/leslie-sawhny-centre/ --- ## [Organisation] Liberal International URL: https://indianliberals.in/organisations/liberal-international/ --- ## [Organisation] Liberal Party of Sri Lanka URL: https://indianliberals.in/organisations/liberal-party-of-sri-lanka/ --- ## [Organisation] Libertarian Publishers URL: https://indianliberals.in/organisations/libertarian-publishers/ --- ## [Organisation] Liberty Institute URL: https://indianliberals.in/organisations/liberty-institute/ --- ## [Organisation] Libertarian Social Institute URL: https://indianliberals.in/organisations/libertarian-social-institute/ --- ## [Organisation] Maharashtra Economic Development Council URL: https://indianliberals.in/organisations/maharashtra-economic-development-council/ --- ## [Organisation] Manaktalas URL: https://indianliberals.in/organisations/manaktalas/ --- ## [Organisation] Mont Pelerin Society URL: https://indianliberals.in/organisations/mont-pelerin-society/ --- ## [Organisation] Observer Research Foundation URL: https://indianliberals.in/organisations/observer-research-foundation/ --- ## [Organisation] NCAER URL: https://indianliberals.in/organisations/ncaer/ --- ## [Organisation] Planning Commission INDIA URL: https://indianliberals.in/organisations/planning-commission-india/ --- ## [Organisation] Press Institute of INDIA URL: https://indianliberals.in/organisations/press-institute-of-india/ --- ## [Organisation] Project for Economic Education URL: https://indianliberals.in/organisations/project-for-economic-education/ --- ## [Organisation] PUCL Gujarat URL: https://indianliberals.in/organisations/pucl-gujarat/ --- ## [Organisation] Satyashodhak Samaj URL: https://indianliberals.in/organisations/satyashodhak-samaj/ --- ## [Organisation] R L Foundation URL: https://indianliberals.in/organisations/r-l-foundation/ --- ## [Organisation] Shetkari Mahila Aghadi URL: https://indianliberals.in/organisations/shetkari-mahila-aghadi/ --- ## [Organisation] Shetkari Sanghatana URL: https://indianliberals.in/organisations/shetkari-sanghatana/ --- ## [Organisation] Swatantra Party URL: https://indianliberals.in/organisations/swatantra-party/ ### Body Founded by Rajaji, Minoo Masani, N. G. Ranga, K. M. Munshi and others in opposition to Nehruvian planning. Peaked as the largest opposition party after the 1967 election, with 44 seats in the fourth Lok Sabha. Dissolved into the Bharatiya Lok Dal in 1974. --- ## [Organisation] Tata Sons URL: https://indianliberals.in/organisations/tata-sons/ --- ## [Organisation] Shetkari Prakashan URL: https://indianliberals.in/organisations/shetkari-prakashan/ --- ## [Organisation] The Radical Humanist URL: https://indianliberals.in/organisations/the-radical-humanist/ --- ## [Organisation] Upasi URL: https://indianliberals.in/organisations/upasi/ --- # Musings ## [Musing] 1991 Liberal Reforms: Why No One Celebrated Them - Ashok Desai, 1995 URL: https://indianliberals.in/musings/1991-liberal-reforms-why-no-one-celebrated-them-ashok-desai-1995/ ### Body _An essay titled “Liberalisation and Liberalism in India”, written by popular economic journalist Ashok Desai, appeared in the Liberal Times magazine in 1995._ _Ashok Desai traces the history of Indian laws and economic policy to be a continuation of war time measures put in place by the British government and its allies, while fighting world war II. Unfortunately, a long shadow of these laws still linger. _ _India did see large reforms in 1991, but Desai made another prominent observation four years later, that no one celebrated these reforms. And that they were largely brought in by stealth. This is a deep reflection on liberalism in India. While India is diverse, acceptance of liberalism in India is still behind. _ _Individual freedom and the value that a person may do what one likes, as long as it does not impinge on other’s freedom, needs to be advocated for. _ _This piece is as relevant today as it was, back then. Here’s an excerpt from it, reproduced below: _ This comprehensively controlIed system was highly inefficient and ran into a crisis every few years. But when this happened, some of the controls were relaxed to introduce competition and to curb inefficiency. As the economy grew, the old-style, labour-intensive controls also became impractical; so they were modified to accommodate the growth in the size and complexity of the system. But as soon as a crisis was over, the system tended to rerun to its old mode. This was because powerful interests grew up in politics, bureaucracy and industry which benefited from the controls. The bouts of relaxation of controls were termed liberalisation episodes by Bhagwati and Srinivasan, and so they were in a sense. In every episode certain controls - mainly industrial licensing and import licensing - were relaxed. But liberalisation had a practical aim, namely to reduce systemic inefficiency to sustainable levels. There was economic liberalisation, but there was no liberal philosophy behind it.   In my view, liberal economic reforms since 1991 have always been on the defensive. It is not for lack of success; starting from an abyss of collapsed growth and self confidence, the economy is growing today at a very creditable rate which will touch 11 percent this year. The balance of payments, which was impossibly adverse only four years ago, is strong today. Industry is growing at 13 percent. Apart from these cold statistics, there is for the first time a sense of excitement in the air; people feel that there are undefinable opportunities, unquantifiable hope. This is a revolutionary change in the atmosphere, and it is entirely due to the economic reforms. And yet, no one boasts of the reforms, least of all those who did the reforms. No one celebrates the reforms. A certain shame faced modesty pervades the reforms. This is strange and inappropriate… This shyness, this awkwardness arises from the fact that liberty is not accepted in India as the ultimate goal of political systems. This is why, for instance, there is so much paranoia about foreign investments. The foreign enterprise is seen as an intruder upon the economic space of the Indian enterprise, just as yesterday, the large enterprise was seen as an intruder on the space of the small enterprise, or the private enterprise as an intruder on the space of the government enterprise. The idea that the consumer is sovereign, that it is in the consumer’s interest that all enterprises, Indian and foreign, small and large, private and public, should compete in a level playing field, is still very foreign to India. The idea that choice is a part of individual freedom, that an individual should be able to choose from where he wants to buy his electricity or telephone services, is still very grudgingly accepted, and even then, many people would make all sorts of unnecessary reservations. The whole point of being the national of such a large and diverse country as India is to be free - free to believe what one likes, free to do what one likes, as long as it does not impinge on others’ freedom. Now that economic liberalism has arrived, almost by stealth, we must cultivate extremism in the service of liberty; only then will we provoke a fertile ground for the growth of economic liberalism. To read the unabridged essay, click [here](https://indianliberals.in/liberal-times/liberalism-in-south-asia.pdf#page=9) (pages 9-13). type=content&p=8491). Needs editorial review._ --- ## [Musing] A Blueprint for Eradication of Poverty - Dr B.P. Godrej URL: https://indianliberals.in/musings/a-blueprint-for-eradication-of-poverty-bp-godrej-1980/ ### Body _Produced below is an excerpt from an essay titled “A Blueprint for Eradication of Poverty” by Dr B.P. Godrej, published by the Forum of Free Enterprise in December 1980. Through the essay, Dr Godrej critiques the public sector’s inefficiencies in addressing poverty and unemployment. He highlights the widespread malnutrition and lack of economic progress, advocating for systemic reforms to improve food security, productivity, and overall well-being. This piece remains relevant as it addresses the persistent issues of hunger, poverty, and economic mismanagement, challenges that India continues to face even today._ The biggest problems facing India today are poverty and unemployment. Eight months ago, a new government was formed in New Delhi. People's hopes were aroused but for a short time only. Already, there is strong evidence of manifestations of frustration. As no other large country in the world faces the twin problems of poverty and unemployment of the magnitude as India, the new government's responsibility is very grave. It would do well to bear in mind that ultimately economics rules politics. It is recognized in some quarters that even with half of India's population, everything else remaining the same, the difficulties in transforming India into a welfare state are immense. When India became free on the 15th of August 1947, a tremendous euphoria was generated. It was considered to be the dawn. But it is clear as daylight now that the economic dawn is nowhere in sight. After the end of the Second World War, the common man's lot, especially in Western Europe, improved vastly and rapidly. He was better fed, clothed, and housed than ever before. In developed countries, economic growth and social welfare proceeded side by side. This feature gained universal acceptance. The proportion of the national income spent by the state in democratic capitalist countries rose sharply, and thus gave rise to the concomitant growth of the public sector. Indian thinking was naturally influenced by this. In a number of capitalist countries, up to one-half of the national income was spent on the public sector. The running of the public sector was something entirely new for Indians. Take, for example, the case of the railways. In 1947, India had one of the biggest networks, and several joint-stock companies were owned and run by Britishers. In the financial and engineering management, Indians had no part and no experience. Apart from that, the concept of the predominance of the public sector was adopted for ideological reasons without checking the likelihood of its success under the then prevailing Indian conditions. The question that naturally arises is whether Parliament was enamoured of this idea even before considering whether it was in a position to make a success of it. Whether the government sector of industry was conceived out of envy, as a prominent and responsible industrialist once said in a public lecture, is worth a doctoral dissertation on the part of an enthusiastic youngster. It is pertinent to quote Collins in this context: "When I was young I thought socialism was the mathematics of justice. Now I realize it is only the arithmetic of envy." Let us now review what characterises India today. More than three decades after Independence, half the people are below the poverty line. Most of the other half are also poor. And the poverty line is defined as the point below which a worker cannot afford to buy enough food for calories to enable him to perform a full day's work. By this definition, India figured in 1968 that 38% of its people were below the poverty line. In 1978, according to official surveys, 50% of the population fell below this line. The following extract is from the _MID-DAY_ of August 5, 1980: **_356 million live below the poverty line_** ** **The Minister for Planning also tells us that: **_“In India, an adult male doing heavy physical labour for more than 12 hours a day gets less than 2,000 calories from his food!”_** Those who get less than 2,400 calories a day in rural areas or 2,100 calories a day in urban areas can be considered among that 356 million. What does less than 2,400 calories a day mean? A study done in Maharashtra some years ago shows that "less than 2,400" can be as little as 940 calories (and people have wondered how someone who consumed so little could be alive to answer the interviewer's questions). What happens when someone consumes calories below the minimum daily requirement? The Minister for Planning did not go into this question nor did members of the Rajya Sabha think of asking him this question. However, there is information from elsewhere about the effects of malnutrition. Someone found that among 500 middle-class children only one had an IQ below 80, but among 500 poor children who suffered serious protein-calorie malnutrition in their first months, some 62% had IQs below 80. There is another way of looking at calorie intake. A daily intake of some 2,250 calories is appropriate, according to dieticians, for an eight-year-old child in a Western country. In India, an adult male doing heavy physical labour in the fields for more than 12 hours a day gets less than 2,000 calories from his food. The human effects of this have also been described: “Chronically hungry people are physically less developed and mentally less alert than people who eat enough.” In this connection, we would be wise to heed Bernard Shaw's warning: “Those who minister to poverty and disease are accomplices in the two worst of all crimes.” Read the complete text [here](https://indianliberals.in/forum-of-free-enterprise/a-blueprint-for-eradication-of-poverty-dr-b-p-godrej-december-15-1980.pdf). type=content&p=8656). Needs editorial review._ --- ## [Musing] A Democracy at War URL: https://indianliberals.in/musings/a-democracy-at-war/ ### Body Now, what is our situation in India today? We are today faced with this great disaster that is overtaking our armies at the front as a result of ten years of misguided policies of neutralism and of appeasement of Chinese Communist expansionism. The root cause has been the failure to understand the nature of international communism. _The recent wave of deadly clashes on the India-China border, the most violent escalation in decades, brings to mind the memory of the full-fledged war in 1962, which has left a humiliating mark on the Indian psyche. Historians have debated the factors at play leading to the origins of war and the weak Indian response. Even prior to the outbreak of the war in 1962, Chinese aggression along the border had a long history, which was perceptively seen as being alarming by some Indian politicians and public figures. In 1962, as the war progressed and the Indian response bungled, the voices of criticism only grew louder against the conduct of foreign policy and defence affairs, as handled by the then Prime Minister Jawaharlal Nehru and Defence Minister VK Krishna Menon. In a democratic polity, it is obvious that matters of national security in times of crisis would warrant public scrutiny of the government’s response. Among the prominent critiques highlighting the failings of the Indian government including the liberal politician and opposition leader of the Swatantra Party, Minoo Masani._ _In a speech delivered to the Commerce Graduates’ Association, Bombay on 22nd November 1962, which was later published in the Freedom First magazine, Masani outlined failings of the Nehru government and the role of constructive criticism from the opposition even in times of national security crisis. He recounted the earlier warning signs of Chinese aggression pointed out by opposition leaders, only to be ignored by the Congress government in pursuit of NAM and Panchsheel, including the Indian state’s recognition of Mao’s government in 1949, acceptance of Chinese aggression in Tibet at the UN in 1950, and Mao’s brushing apart of Indian neutral posturing as tacit alliance with the ‘imperialist camps’. Sarcastically criticising the failed Panchsheel policy, which ‘now remains only the name of a road in Delhi’, Masani also blamed Nehru for keeping the Indian public in the dark on Chinese escalation in the northwest border region. As the AICC passed a sycophantic resolution that dubbed the critique of the PM as traitors, Masani stressed the need for critical opposition to hold the government accountable to the public and national security interests. _ _The Swatantra response to Chinese aggression included offensive posturing to ‘snatch the initiative from the enemy’; procurement of weapons from around the globe; involvement of air forces of friendly allies to deter Chinese bombings; diplomatic manoeuvring at the UN leading to a peacekeeping intervention against the Chinese aggression; amending ties with Pakistan to avoid a two-front war in favour of focusing on the Chinese front and a shift away from the neutral posturing under the NAM._ _Produced below is the relevant excerpt from the article._ **Root Cause** Now, what is our situation in India today? We are today faced with this great disaster that is overtaking our armies at the front as a result of ten years of misguided policies of neutralism and of appeasement of Chinese Communist expansionism. The root cause has been the failure to understand the nature of international communism. In 1949, because of this, our Government rushed forward to embrace the bandit regime of Mao Tse-tung which is today attacking our country and to recognise it as the Government of China, turning its back on a loyal friend and ally, Marshal Chiang Kai-shek of the Chinese National Government, who was the only war leader to have advocated the independence of India repeatedly and publicly during the war when we were engaged in the Quit India struggle. The second act of the drama came with the betrayal of Tibet in 1950, when the Chinese, in breach of faith with our Government, advanced their armies into Tibet. To our shame, our representative in the U.N. was instructed to tell the Security Council which was considering the appeal of the Dalai Lama for help, the kind of appeal we have been making in the last few days, that the government saw no cause for United Nations’ intervention in Tibet! The British Government readily agreed and, led by these two appeasers, the Security Council suspended discussion of the item which still remains on the order paper. The guilt of having handed over the Tibetan people to be dominated and brutally oppressed by the Chinese belongs to us and our Government. **We Were Warned** It was not as if there were no warnings. In Parliament on 5th and 6th December 1950, there was a big debate in Parliament and some ten speakers warned our Prime Minister and Government that, if they persisted in allowing Tibet to be overrun by the Chinese, our turn would come next; that the Chinese were in fact attacking Tibet as a first step to the attack on India. We were brushed aside as alarmists. In all seriousness, we were told that the Chinese occupation of Tibet had no relevance to the security of India! But it was not our warnings alone that were ignored. It was also Mao Tse-tung, who had given warnings much more significant than ours. In my own speech in Parliament on that occasion, I had quoted the New China News Agency who, a few weeks earlier, had said that the day would come when “the Chinese People’s Liberation Army will hoist the Red Flag over the Himalayas.” They are very frank, these gentlemen- Hitler, Stalin, Khrushchev and Mao Tse-tung. They tell us what they are going to do, but we are so naïve that we will not believe them! _The full text of the article can be accessed _[_here_](http://www.freedomfirst.in/uploads/issues/pdf/127.pdf)_._ _[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context._ Read more: [SV Chitti Babu, academician, educationist and reformer par excellence (1920-2020)](https://spontaneousorder.in/sv-chitti-babu-academician-educationist-and-reformer-par-excellence-1920-2020/) --- ## [Musing] A Viewpoint on Libertarian Society URL: https://indianliberals.in/musings/a-viewpoint-on-libertarian-society/ ### Body _Libertarianism as an idea has often been misconstrued and labelled as a utopian thought not just by its critics but also at times by its own proponents. Produced below is a piece published in the May 1958 issue of the Indian Libertarian magazine where the author James Kielty deconstructs the vision of a libertarian society. ( Image : Art by Celeste Byers)_The tendency on the part of even libertarians to confuse libertarianism and utopianism is regrettable for libertarianism can only be conceived of as an acceptance of the problems of human existence, and willingness to share in these problems and to take responsible action without supposing that any action will provide more than a temporary solution.  Libertarianism, in other words, attempts to relate, at all times action to reality rather than imposing an institutional form upon ideas that can only at certain point and instance correspond to reality. Any one who is flippant enough, at this point, to ask what is reality, has missed the essential point. Reality has no verbal equivalent and this makes institutionalising process an idiotic one since verbal construction such as laws. mandates, and dogmas cannot correspond to something that is non-verbal and obviously highly unstable.  **Basis Of Libertarian Society ** If any one conceives of a libertarian society as being anything but a series of profound headaches, has been deceived. Libertarianism is not attractive because it will make life easier. Quite to the contrary,It is attractive because it would allow a whole society equal responsibility.  For the same reason, its achievements would be enormously difficult and its "Stability" (a word that probably should- never enter into the discussion ) at all times threatened. That again, however, is an essential point. There could never be a libertarian society without a general acceptance of responsibility and a general sharing of power. If a majority of society wished to shun responsibility and hand over power to a minority that wanted it, libertarianism would cease to exist as a social or quasi political system. **Limitations Of Democracy ** While a democratic society is a step on the road to libertarian society, its institutional and legal framework ensures its decay and corruption as each individual becomes increasingly a victim rather than partiCipant in the society's encumbrancing framework. At present "democracy" consists of a great number of organised groups exercising pressure for or against specific rather than universal aims.  A libertarian society would require a whole group that was essentially aimless. It would require a whole group that would have no truck with the concept of "hope", that would act on the basis of substituting for the intolerable the less intolerable rather than acting on the basis of "solving the problem" or "making things right." It would not be a society involved in the concept of a "better" world, thereby carrying with it always the immense burden of the "worse.'' Rather, it would move and catch from problem to problem allowing circumstances, spontaneous genius and the space of events that we call time to lift it over each hump and out of every depression. It would, in other words, act exactly as we do, but it would recognise that that was what it was doing. --- ## [Musing] A Rule of Law Society! URL: https://indianliberals.in/musings/a-rule-of-law-society/ ### Body In the following article, Sauvik Chakraverti conceptualises how a ‘rule of law society’ can be achieved. A rule of law society is the one in which people instinctively follow the rules because it is in their interest to do so. Chakraverti explains three principles - private several property, contracts, and torts - which are essential to making good laws. He argues that societal order requires the formation of laws based on these principles, and for lawyers and judges to uphold them. _The law perverted! And the police powers of the state perverted along with it! The law, I say, is not only turned from its proper purpose but is made to follow a totally contrary purpose! The law is becoming the weapon of every kind of greed! Instead of checking crime, the law itself is guilty of the very crimes it is supposed to punish! If this is true, it is a serious matter and moral duty requires of me to call the attention of my fellow citizens to it._ **FRÉDÉRIC BASTIAT ** The Law As a former Deputy Commissioner of Police, let me begin by asserting that a ‘rule of law society’ is not very difficult to achieve. It certainly does not require, as many morons believe, a military dictatorship. London, Frankfurt, Amsterdam… there is order in these cities not because of the police, but because of the people. All that societal order requires is good law – which all the people understand, and which all the people respect and follow, knowing well that it is in their interest to do so. Of course, judges and lawyers should be extremely well versed in these principles, and uphold them in their judgements and arguments. What are these principles? **PRIVATE SEVERAL PROPERTY ** We are born with faculties which we exercise on the resources of the Earth to produce Property. The first nomad who cleared the forest and settled down in agriculture created Property. The chef who produces a meal at a restaurant produces Property – and we cannot consume the meal legally without paying something in exchange: the price. Private several property is basic to the morality of the market – indeed, it is basic to all human morality. Property existed before formal law was made; indeed, formal law was made because there was property. When delivering the Ten Commandments, the Prophet Moses thundered “Thou shalt not steal”. Without an understanding and respect for what’s ‘mine’ and what’s ‘not mine’ no trade can take place. The market cannot work if it is legal or moral to steal. If too many thieves come to the bazaar, the shopkeepers have no option but to take their business elsewhere. The notion of private several property goes even deeper into human morality than market exchange: it goes into the very way we breed; it goes into the most important of human institutions – the family. A woman puts sindoor on her head to indicate to all that she belongs to someone, and is not ‘free’. A man wears a wedding band for the same reason. And all the people respect this: otherwise human society would break down. It is not breaking down not because some dictator is imposing the Law, but because everybody understands, respects and follows these basic rules of a rule of law society. The Prophet Moses also thundered “Thou shalt not covet another man’s wife.” In the Ramayana, the villain Ravana is reviled because he has violated this most sacred of principles: he has run off with another man’s wife. Hinduism, Islam, Christianity… indeed, all faiths, respect private several property. Socialists do not. The Constitution of India is the longest written Constitution in the world – which means we Indians must have desired justice. But this enormously long Constitution does not guarantee private property rights! Thus, Indira Gandhi could nationalise private banks, she could nationalise the coal mines, Air India… what have you. The law allowed it. The law did not say that the airline belonged to JRD Tata and the State has to protect Property, not take it away. Socialist law is ‘legal plunder’ – to use Bastiat’s immortal words. And it is not just nationalisation. There is legislation on issues such as ‘land redistribution’: which means that the Law will steal land from those who have it and give it to those who don’t. There are rent control laws by which tenants can take over the landlord’s property. These immoral laws promote crime. There are private armies in Bihar because the law is perverse. There are underground dons involved in tenancy disputes because of the law. Slumlords happen because the law does not approve of landlords and landladies. Indeed, priceless urban properties are destroyed because landlords can no longer afford their upkeep. Private several property is vital if the environment is to be looked after and natural resources managed such that there is always abundance. Chickens, goats, pigs and cattle survive because they are private several property: someone owns them. Endangered species would survive too if we could farm them. The wilderness can also be privatised and protected as the personal property of those who value wilderness. On the management of natural resources, consider the curious fact that there is no shortage of petrol or diesel in the world, although the Earth possesses very little oil. And there is a shortage of water despite the fact that the Earth is made seven parts of water! This is because the State owns all the water; while in the case of oil there is a market working and underground oil fields are private several property: you can own an underground oil field. When the state owns all the water, there are bound to be shortages. As Milton Friedman famously remarked, “If you give the Sahara Desert to the government, there will be a shortage of sand in 5 years!” Picture the town of Dehra Doon, which lies between the Ganga and the Yamuna – north India’s mightiest rivers. There is a water shortage in Dehra Doon. To find out why not visit Dakpathar, 40 km from Dehra Doon on the banks of the Yamuna. Here the state is damming river water and despatching it free to Punjab farmers who use it to grow rice (which requires 21 waterings). The town of Dakpathar is a ghost town amidst beautiful landscape because the irrigation department, which owns the town, is broke, and is making no profits from the water. In the case of the Narmada Dam, everyone says the tribals must be compensated for their land which was inundated; no one says they should be compensated for the river water, over which they must possess shared property rights because they have been living next to the river for millennia. If property rights were established over river water, the Narmada and the Cauvery issues could be settled without politics. And with justice. Now, the Law is being employed to force the issue, and this backfires as, for example, when the Karnataka chief minister refused to comply by the Supreme Court’s directives. With property rights applied uniformly as a principle, the law is easy to enforce. Everyone follows the law. And there is abundance of all resources. Some consider intellectual property rights like patents to be essential. I do not believe in temporary monopolies granted by the state. If without them, all innovation would cease, we wouldn’t be flooded with recipe books! Or with new fashions. Those who are asking for patents are simply saying: I have a great idea that can make money only if the State grants me a temporary monopoly. Why doesn’t every fashion designer or recipe book author say the same thing? What is required is copyright protection – not patents. And for drug companies: if we apply torts (see below) they would not need to go through expensive regulatory bottlenecks like the US Food and Drug Authority (FDA). Without the FDA, new drugs would be cheaper to deliver to the market and, in case there are errors and consumers are harmed, tort laws can yield suitable compensation. Even when enforcing copyright protection, judges should be careful to see whether there is mens rea and genuine fraud. For example, someone who sells a Rolex for 300 rupees is not trying to pass it off as a genuine article: he is selling it as a ‘duplicate’ that is cheap and not covered by any guarantee. The consumer should be free to buy this ‘duplicate’. And if Rolex watches can be copied for so little, the company better wake up and improve its product. Think: if we want to really enforce copyright protection blindly, we would probably have to bomb Ulhasnagar. I have never been there but am told that the entire town specialises in making duplicates. We would also have the police searching all our houses for music CDs we have ‘burned’ from our friends. We form collectives like the state for one reason only: to protect ourselves and our properties better. We do not have the power to take other’s properties away. So, when we get together to make the Law, this law too cannot have the power to take anyone’s property away. The basic purpose of Law is the protection of property. Since the socialist Constitution of India does not recognise property rights, Indians must press for a Second Republic, for this socialist constitution is an immoral document. Liberal jurisprudence, based on private several property, can also solve some pressing problems that the Hindutva brigade has thrust upon us. If they have their way, Parliament will soon pass a law banning cow slaughter – and I will be denied my steak. A liberal Supreme Court would tear up any such law on the grounds that cows are private property and the State cannot interfere. Everyone must be free to do what he wants with his own cow: free to either worship it or eat it. * Similarly, the ‘disputed site’ at Ayodhya. To ‘de-politicise’ matters, the issue was referred to the Supreme Court. What did this socialist court do? They asked the Archaeological Survey of India to dig up the disputed site and discover what lay underneath. Is this the application of our principle? If a temple to the Goddess Piripiri of the Bhotcharge tribe is discovered under my house, can a latter-day Bhotcharge lay claim to my property? Certainly not! If liberal jurisprudence is applied to Ayodhya the solution is clear and simple: there is no clear title to the site; there are various claimants, each possessed of little legitimacy; therefore the site must be auctioned. We could auction it off in little lots – one auction every year – and in this way keep religious fanatics out of politics, busy collecting money all their lives. Socialist jurisprudence is not justice. Socialists reject the natural law of property and believe that the purpose of the law (and the State) is to redistribute property. Theirs is a Robin Hood ideology – but it is time we stopped looking at their ‘legal plunder’ (what they call ‘redistributive justice’) as romantic. **CONTRACTS ** The second feature of Law is that it must enforce contracts that are freely entered into by the people. That is, all the people are free, and, as free people, they will naturally enter into contracts with each other – say, a labour contract, a rental contract, a contract to repay a loan or a contract to use a telephone or electricity service. The Law must enforce these contracts when anyone violates them. The Law cannot dictate the terms of the contract. But that is precisely what socialist law does. For example, I freely enter into a labour contract with a migrant worker – but the labour inspector will put me in jail and the labour laws will declare the contract invalid if I do not pay ‘minimum wages’. The socialist law will declare the contract voluntarily entered into by two free people null and void – because legislators want to dictate terms. They should not have this power. This is not the purpose of the Law. Consider the damage done by minimum wages: the minimum wage is bound to be higher than the market clearing wage – or what’s the point. Now, as any simple demand and supply diagram will tell you, if you set a price by force which is higher than the market clearing price, less of the good will be demanded. Thus, in this case, less labour will be demanded. Further, when laying off workers, firms will retain their best people, and lay off the weakest workers – like the trainee or the apprentice. Firms might also be able to use prejudice when laying off workers – firing the Blacks or the Muslims or the lower castes. Firms will also have the incentive to use more machines, as they will become relatively cheaper. The purpose of minimum wages is to benefit the weakest worker, he who cannot legitimately earn that wage; the effect of minimum wages is to hurt the weakest workers. The apprentice or the trainee gets thrown out, or employed illegally, without any employee protection whatsoever. This is a classic case of the Law of Unintended Consequences: Nothing Causes More Harm Than Good Intentions! Similarly with rent control law: free contracts between landlords and tenants are declared null and void if they are not on the side of the tenant. This takes away the incentive for landlords to build property and let them out to poor people who, of course, cannot afford to buy property. These poor people now have no choice but to go to the politically sponsored slumlord. The law was intended to benefit tenants; yet it hurts poor tenants most. A third example of the non-enforcement of contracts concerns bankruptcy law. As we saw in the case of Rembrandt’s house in Amsterdam, it was bankruptcy law – the enforcement of a contract between a creditor and a debtor – that allowed the housing finance market to flourish. In India, till recently they did not care if people defaulted on their loans. The legislators did not care because they were running the banks as public property and were willfully allowing their friends to loot these banks. Thus, in India, there is still not a vibrant market for mortgage finance. This cannot happen so long as the debtor 436 can walk off with the financier’s money. People will not lend for housing as long as the loan contract is not enforced by the Law. A fourth example of non-enforcement of contracts concerns the Indian rupee, on which the governor of the central bank ‘promises to pay the bearer a sum of X rupees’. When the governor cannot convert his note into money – be it gold, dollars or yen – it is the central banker who should be in prison: a debtor’s prison. The Foreign Exchange Regulation Act (FERA) is immoral legislation. **TORTS ** If you go to McDonald’s at a time when the floor is being cleaned, you will always find a sign saying: Caution! Wet Floor. This is a standard practice in McDonald’s worldwide. However, if you go into any Indian restaurant when the floor is being cleaned, you will not find this sign. Why is this so? This is because there is tort law in America. If you slip and fall and break your leg in a McDonald’s in America (and the floor is wet), you will get very rich very soon if the sign had not been there. You will not even have to find a lawyer: the lawyer will find you and take up the case free so long as he gets a share in the spoils. Tort laws are a pillar of a rule of law society. It is always possible that people will be negligent. The right thing in such circumstances is to apply tort law and compensate the victim. In torts, the case is decided ‘on the preponderance of evidence’. In criminal law it is decided ‘beyond any reasonable doubt’. Thus, criminal cases are difficult to decide while tort cases are relatively simpler. This also makes sound economic sense, as David Friedman has pointed out: society faces a net loss when someone is imprisoned or executed, so these cases should be decided very carefully; society does not lose in tort cases as there is a simple transfer of resources, and so these cases should be decided fast. Torts are based on a higher jurisprudence: that of ‘restitution’: the negligent one restores the damage caused to the victim. Criminal law is based on the doctrine of ‘retribution’: that you suffer for your sins. The doctrine of retribution is an older and less sophisticated jurisprudence. Further, criminal law is more concerned with ‘crimes against the state’ – with ‘public prosecutors’ and ‘public police’ and ‘public jails’; on the other hand, tort law recognizes the fact that crimes are always against individuals, and these individuals must be compensated by those who have committed these crimes. Once, a colleague lost a lighter of mine, which he had borrowed. I offered him either retribution or restitution – either we cut off an arm or he restores to me a new lighter. He willingly chose restitution, and I now have a replacement lighter. The advantages of having tort laws are various. Consider, say, the Gujarat earthquake. Many badly constructed buildings fell down. The newspapers reported of corruption among builders and their collusion with the authorities in charge of passing buildings. The urban development minister proposed registration of builders in Delhi and stronger building bye-laws. Will these work? Of course not! Now think of what tort laws can do. If there were tort laws, then the builder of the building that falls down would have to pay up. He would anticipate this and look for insurance. Then, the private insurance company would check the building and insure it only if it was well constructed. In this way, Manhattan skylines could erupt in our cities. Today we do not have these Manhattan skylines not because our architects and builders are incompetent – but because the authorities do not allow tall buildings to be built. With freedom, governed by tort laws, they would be free to express themselves, and build. And the consumer would be safer too. Consider other cases too – like the dropsy case in which adulterated mustard oil was sold, or the Uphaar cinema fire case in which many lives were lost, or even the Bhopal gas tragedy. In all these cases criminal law was applied, the police called in – and nothing happened. ** If tort laws were used, victims of negligence would get immediate compensation. Sellers, i.e, the retailers, of spurious medicines would have to pay up. 21 At the time of printing, some monetary compensation has been ordered in the Uphaar fire tragedy. Interestingly, the cinema owners as well as the civic authorities have to all pay up. But this was a criminal case. Someone asked me once: “Why don’t the socialists like torts? After all, unlike property rights, this has nothing to do with ideology.” There are two possible reasons. The first is that the state would get sued to the bone and wants to evade responsibility for the negligence of its minions. I take my girlfriend out for a drive. We hit an unmarked speed-breaker and she goes flying out of the window. I have lost a girlfriend. I should be compensated. But I will not be – because the state wants to evade responsibility. The second reason is more macabre: they prefer using criminal law because they can effect a squeeze on the negligent person. Once they drag the police in, the perpetrator of the tort will pay up – to the politicians and the police. The victims will get nothing. They think this is justice. It is not. It is corruption pure and simple. With these simple laws, and complete freedom, there will be a rule of law society. The police will only look after crimes like murder, theft and rape, and the people will be free to live their lives doing whatever they deem fit. Such a society will be rich and moral – and free. Justice will prevail. Such a society will also be beautiful. One thing strikes about our cities: they are ugly. Old buildings are not looked after because of rent control. New buildings are not built because of building restrictions. This ugliness is entirely the creature of socialist ‘urban planning’. Indian cities were 440 beautiful once. We were free to build freely, and landlords once had power over their properties. With socialism, and socialist construction (like DDA flats) ugliness has pervaded our lives. All Indians have a sense of beauty. All the people I know take special efforts to decorate their homes. My friend Nitin Donde has even made a film to show that street hawkers and vendors have a well-developed aesthetic sense: the manner in which they display their wares shows an understanding of colour! This planet is a beautiful place. Whatever we construct here must add to the beauty, not take away. These basic principles of a rule of law society do not need a very powerful ruler to enforce. In England, they evolved out of ‘common law’: basic simple law whose principles were applicable to all cases. The people respected the laws and the courts and the judges and followed the law. In India, our courts use force a bit too much: they forced CNG on the people of Delhi. They forced Haryana to close down mines. They did not consider either property rights or torts. They can use force like this because they have the all-powerful state to back them. Can justice be handled outside the state? I do believe it can. Law is an enterprise. But there are some problems when it comes to the final stage of enforcement. David Friedman and some others are inquiring into these issues. I personally believe in private courts. In Gandhi’s memoirs as a lawyer in South Africa, he says that he always preferred arbitration outside the court, and when he did this, he felt he was performing social service. Most cases do not need to go to court. I also had the pleasure of briefly interacting with Professor Robert Cooter, author of the famous textbook on Law & Economics. He told me of California’s ‘Rent-a-judge’ companies. Two parties facing a legal dispute can go to one of these companies. These companies have many retired judges on their rolls. When any case comes up, the parties, with or without their lawyers, come before the private judge in a hired motel room. The private judge hears the arguments and delivers his judgement. He must make sure his judgement is acceptable to both parties or he would not get repeat business. He must also make such judgements because he cannot use force to push through his orders. State judges have no such incentives. They come from the breed of lawyers and so have the perverse incentive to prolong cases and see to it that they go to higher courts of appeal – so their lawyer friends can milk the client. They also can use force, so they do not need to be just to both parties. Of course, in India we have a brief history of private justice – in the courts of the East India Company cities. Judges like Sir Elijah Impey in Calcutta were far better than anything the socialist state with its ‘committed judiciary’ can put up. In a rule of law society everyone will instinctively follow the basic rules of the game. Law, like Economics, is about incentives. With the right law, people have the incentive to follow the rules. With the wrong laws, they willfully disobey, because the incentives are all wrong. This perverts society – and no amount of policing can cure it. All students of Economics abroad study the interaction between Law and Economics today – and vice versa. There are a few Law professors in every Economics department, and there are a few Economics professors in every Law department. In India now, the Delhi School of Economics has Professor TCA Anant, who takes a course on Law & Economics. I have not heard of any law college in India, which possesses an Economics faculty. Obviously, the first battle must be over how these two important subjects are taught. *A Rugby joke goes: A farmer was trying hard to bed his milkmaid, but she was always refusing his advances. So, to ‘turn her on’, he took her to watch his prize bull ‘servicing’ a cow. While the bull was busy, he turned to the girl and said, “I’d love be doing what that bull is doing.” “Then why don’t you? she replied, “it’s your cow!” **At the time of printing, some monetary compensation has been ordered in the Uphaar fire tragedy. Interestingly, the cinema owners as well as the civic authorities have to all pay up. But this was a criminal case. _First Published in the book FROM THE HAIR OF SHIVA TO THE HAIR OF THE PROPHET … and other essays by Sauvik Chakraverti (1956-2014) an award winning columnist and author whose work lighted the path of modern Indian liberalism. _ _Other works by the author can be accessed at _[_Indian Liberals_](http://indianliberals.in/liberals-details?id=19)_, an open, multilingual digital archive committed to preserving liberal voices in the Indian public sphere._ [Read More SO Musings](https://spontaneousorder.in/?s=SO+Musings) --- ## [Musing] A Viable Agriculture Policy for Sustained Growth URL: https://indianliberals.in/musings/a-viable-agriculture-policy-for-sustained-growth-tarapore/ ### Body _The following is an excerpt from a booklet titled 'A Viable Agriculture Policy for Sustained Growth' published by the Forum of Free Enterprise and authored by S.S. Tarapore. The booklet was published on September 2012 wherein the author highlights the need for freer import-export market, agricultural productivity coupled with rural infrastructure, and the challenge of migration to cities.  He further talks about the need for a consistent and coherent agriculture policy to tackle these challenges. _ The share of agriculture and allied activities in India's GDP has fallen from 28.4 per cent during the decade ended 1999-2000 to 19.4 per cent during the decade ended 2009-10; furthermore, the share declined to 14.4 per cent in 2010-11. The falling share of agriculture is by itself not a cause of concern; in fact it conforms to the experience of a number of countries during the development stage. What is of concern is that while the share of agriculture and allied activities is only 14.4 per cent of GDP, 70 per cent of the population lives in rural areas. The present sectoral distribution of income triggers migration from rural to urban areas, particularly metropolitan cities, and despite efforts to improve urban infrastructure, urban areas are unable to cope with the migration resulting in the emergence of urban slums. With the crude birth rate per thousand of population at 23.7 in rural areas and 18 in urban areas, the problem of massive migration is likely to increase in the ensuing few years unless effective measures are taken to generate more activity in rural areas. Allowing the pace of rural-urban migration to continue or even accelerate would result in a breakdown of urban infrastructure. Given the political economy of India, prohibiting migration would unleash severe social explosion. Planners hope that agriculture will grow at 4 per cent per annum while overall growth will be 9 per cent; this implies an automatic reduction in the share of agriculture and allied activities in GDP which, in turn, will trigger massive migration to urban areas. Thus, a major plank of macroeconomic policy has to be to reverse, or at least slow down, the decline of the share of agriculture in GDP. A viable agricultural policy must be put in place in order to make growth sustainable. Some elements of such a policy are outlined below. **Become a Major Commodity Producer and Exporter** Despite industrialisation, economies such as USA, Russia, Australia and Brazil are generally major commodity producers. To be a major commodity producer, a country has to look beyond its own frontiers and become a major commodity exporter. In this context India's track record is miserable. Barring tea, where lndia has a large domestic market as also a large export base, the performance has been abysmally poor in all other commodities. **End Export Control Raj ** The freeing up of commodity exports is necessary to ensure fair treatment to producers of agricultural commodities. There is also a crying need to free agriculture from the shackles of subsidising urban consumption of agricultural commodities. If agricultural commodities fetch better prices abroad, it will only be equitable to freely allow exports of these commodities. The benefit will be that domestic sales to urban areas will then fetch higher returns for rural areas. The export control raj must be totally abandoned. lndia has, since 1990-91, consciously moved away from micro-managing the economy. Yet, commodity exports are punctuated with bouts of bans on exports alternating with massive gluts requiring sporadic exports. Exports are treated as a safety valve to reduce pressure points in the economy, lndia cannot become a significant commodity exporter if its policy is one of sporadic export whenever there are surpluses. Bans and prohibitions are meant to be used in very exceptional circumstances and not imposed routinely. There is an erroneous belief that an export ban is the answer to inflation and permitting exports is a panacea for falling prices. lndia has a long history of being a sugar exporter, but our share in global markets is small as we are an unpredictable supplier and hence we do not have a niche market. In cotton, it is hardly surprising that foreign importers are turning towards more reliable sources. It is stultifying that the cotton export policy is reviewed every fortnight. Again, in the case of onions the minimum export price is periodically scrapped and then reintroduced. For many years lndia has had a chronic shortage of rice but with the mountain of public sector foodgrains stocks, lndia has temporarily become the world's largest exporter of rice. Such flip-flop policies discourage producers from an enduring augmentation of supplies. There is need to restrict bans or prohibition of exports only to items injurious to health. There should be legislation to ensure that bans or prohibition on exports which are normally traded in international markets do not become the norm, and legislation should make routine bans and prohibitions subject to strict scrutiny. **Deal with the Foodgrain Mountain ** Ashok Gulati, Chairman of the Commission on Agricultural Costs and Prices (CACP) in a seminal article in the Economic Times dated 10 May 2012 has candidly stated that by June 2012 public sector stocks of foodgrains would have exceeded 75 million tonnes but covered storage capacity is only around 50 million tonnes. Hence, there is need for urgent action to contain the colossal damage. Notwithstanding all possible measures, the government has to recognise that there will be a loss of at least 10 million tonnes of foodgrain by way of damaged stocks. Understandably, the authorities cannot acknowledge such an eventuality. The foodgrain mountain is not something that has suddenly emerged; it has been in the making for the past five years. It is both a success story as well as a failure. It is a success story in that there has been sustained growth in the marketable surplus of major foodgrains, but the failure is of not being able to evolve policies to bring about a better balance between commodities in excess supply and those reflecting shortages. In a sense, the authorities are trapped in a political-economic-social imbroglio. The incentives to increase marketable surplus of rice and wheat have created strong vested interests and any attempts to change the system will result in major upheaval. The system of fixing the procurement price based on costs of inputs has worked well in the past but now needs an overhaul. It would appear that it is too late now to take corrective action in the current financial year and the country needs to face up to a major loss as stocks turn into a waste heap. The least that should be done is to alter policies which will obviate repeated episodes of large losses. In the absence of a long-term sustainable policy, immediate measures are at best second best solutions, but are necessary for quick results: First, the carrying cost of foodgrains by way of storage costs, interest costs and damage through open storage could be so high that it might be better to export even at prices 20 to 25 per cent below the minimum support price. Export markets are not easy to come by and, as stated earlier, the government should totally eschew export bans or controls. Second, while free distribution of foodgrains creates a medium-term problem for the normal distribution of foodgrains under the Public Distribution System (PDS), given the immediate choice of free distribution of foodgrains to segments of the population which are starving or offering foodgrains to rats, the priorities are clear and the government will have to face up to the medium-term problem. Third, leap-frogging bonuses by state governments are not desirable but this is not a new phenomenon. In the 1980s, various facilities were withdrawn from state; which offered bonuses above the minimum support price. It may be necessary in the present context to take strong measures to discourage states from offering bonuses above the minimum support price. Fourth, incentives could be provided during periods of excessive public sector foodgrains stock by effective incentives being provided for keeping the land fallow or diverting to crops which are in short supply. Over the years, USA has used a system of "parity" between incentives for keeping land fallow and the price at which the government has bought commodities to augment stocks. **Promote Production of Commodities in Short Supply ** For the past sixty years we have been waxing eloquent about all that has been done to lift the disadvantaged out of dire poverty, yet the numbers give a different story. In a country like India, where major protein intake is by way of pulses, it is shameful that per capita daily net availability of pulses has fallen from 69 grams per day in 1961 to 31.6 grams in 2010. It is true that production in 2010-11 rose sharply to 18 million tonnes, but will predictably fall back to 14-15 million tonnes in the ensuing few years. Pulses are grown by marginal farmers in arid areas and as such any sustained increase in production is unlikely. Another area where there is chronic shortage is vegetable oils. Here again, there is a major deficiency of policy as India is chronically dependent on imports. The recent increases in the minimum support prices for pulses and oilseeds is a salutary measure. The shortage of these two commodities is so acute that serious consideration should be given to reducing foodgrain subsidy, by say 10 per cent, and diverting these resources to subsidise pulses and oilseeds. This will provide a strong stimulus to step up domestic production of these two commodities. **Selective Corporatisation of the Agricultural Sector ** Corporatisation of select agricultural commodities was seriously mooted as far back as 1974 when Hindustan Lever came up with a proposal of oil palm plantations in the Andaman Islands. Predictably, when the proposal was put before the Union Cabinet, it was peremptorily shot down as we could not countenance foreign companies entering the agricultural sector. Years later, in the 1980s, when India was expending foreign exchange to import large quantities of vegetable oils, the then Prime Minister lndira Gandhi said, "We did some funny things, didn't we?" Today's technology enables the desert to bloom and lndia needs to give serious thought to corporatising agriculture on presently uncultivated government land which could be leased out to corporates for producing pulses and oilseeds. The matter is of great urgency as the per capita consumption of the masses is coming down sharply. **Promote Allied Activities ** With limitations on returns to production of traditional foodgrains and long-established cash crops there is scope to promote livestock, fisheries, forestry, horticulture and floriculture. Rural poverty is less where farmers concentrate on livestock. Future agricultural growth will have to be necessarily water-centric and lack of accelerating agricultural growth is because of inadequate attention to watershed development.~ Developing activities allied to agriculture should hopefully raise per capita incomes in rural areas. And as rural infrastructure improves, there will be less of an incentive to move from rural areas to urban slums. India has great aspirations of becoming a leader in the comity of nations. But a prerequisite for this grand design will be to fix our woes. Unfortunately, the more we talk about an egalitarian and just society, the more callous we become when it comes to tackling the major problems facing the economy. We take great pride in the fact that almost two-thirds of our GDP is accounted for by services while agriculture accounts for only 15 per cent of GDP. With our obsessive focus on overall growth of the economy rising from the current 7 per cent to 9 per cent per annum, with visions of an eventual sustained growth of 10 per cent, we seem to be welcoming an inevitable shrinkage in the share of agriculture in overall GDP. But the economy will not be viable if the share of agriculture in overall GDP continues to fall while 70 per cent of the population lives in rural areas. There is no way urban areas can absorb massive migration from rural areas. Thus, the only option is to successfully implement a viable agriculture policy. If we are fixated on the view that industry and services will (and need to) grow more rapidly than agriculture, then we are resigning ourselves to accepting that abject poverty will never be alleviated. Such a scenario cannot but be disquieting. --- ## [Musing] A Resilient Soul: Ramadevi Chowdhuri URL: https://indianliberals.in/musings/a-resilient-soul-ramadevi-chowdhuri/ ### Body _Ramadevi Chowdhuri (1899-1985) was a prominent Indian freedom fighter and social activist from Odisha, India. Her dedication to the cause of women's rights and active participation in the freedom struggle has made her an inspirational figure in Odisha and beyond. Ramadevi's legacy continues to inspire generations of women to fight for their rights and contribute to society._ Ramadevi Chowdhuri was born to Basanta Kumari Devi and Gopal Ballav Das on December 3rd 1899 in Cuttack. She was the niece of _Utkal Gaurab_ Madhusudhan Das, a lawyer and a social reformer who played a prominent role in the unification of Odisha. Her childhood was influenced by freedom fighters and thinkers like Mahatma Gandhi, Vinoba Bhave, Sri Aurobindo, and JP Narayan. She got married at the early age of 15 to Gopabandhu Chowdhuri who resigned as Deputy Magistrate from Bariand, Odisha in 1921 prompting them to join the Indian Independence movement in 1921. The same year, they also joined Indian National Congress and actively participated in Non-Cooperation Movement. She attended a meeting addressed by Mahatma Gandhi in Binod Bihari about the Swadeshi movement and resolved to wear only Khadi and indigenous clothes. This meeting in 1921 was the first public gathering of Odia women and also the first one addressed by a highly popular leader. It changed the life of Ramadevi Chowdhuri and many Odia women led by her into the Indian independence struggle. She became a prominent leader in Odisha by the 1930s. She spearheaded the Salt Satyagraha movement and led the march with women in Srijanga and Kujanga. She campaigned door-to-door in many villages and encouraged women to participate in the freedom movement. She was arrested in 1930 for her role in the Salt Satyagraha. She was later arrested again in 1932 for taking the Solemn Oath on January 26th for the country’s independence. But none of these arrests deterred her commitment to the women’s movement and the freedom struggle. In spite of her privileged Zamindari family background, she preferred to lead a simple life. She later founded Sevaghar at Ramachandrapur, Bari for social and economic upliftment. The activities at this Ashram included promoting Khadi, adult education, and self-employment opportunities through beekeeping, dairy development, and leather works. She fought against untouchability through the institution _**Asprushyata Nibarana Samiti**_ which was later renamed _**Harijan Sewa Sangha**_. She educated people about the need for the eradication of untouchability. She campaigned for the admission of Harijan children to schools. She led a team of women to train the Harijans about sanitation and nursing. She also helped Mahatma Gandhi with his padayatra for the eradication of untouchability from Puri to Bhadrak. Her active participation in the Quit India movement led to her arrest along with other women leaders of Odisha. By the time of her release, her ashram was declared illegal by the British and was demolished. But her unwavering spirit motivated her to continue her efforts towards social reforms. Ramadevi did not just promote education but she also built 15 schools and conducted teacher training. She started hostels for children of the Congress workers and Harijans who were arrested by the British. She later on, became the in-charge of Kasturba Trust’s activities in Odisha.  She continued serving her people even after independence. She joined the Bhoodan movement of Vinoba Bhave and walked from village to village for 2000 miles to collect land gifts for the landless. She was associated with the Sarvodaya movement of Vinoba Bhave and presided over the All India Sarvodaya Convention held in Pandarpur.  She continued to help anyone in need during cyclones, floods, drought, communal riots, the Indo-China war and the Bangladesh war. She started a home for the orphaned and abandoned children in Kalhandi. She later started Balwadis to educate children in Odiya medium. She also founded a cancer detection centre in Cuttack. She protested the curtailment of freedom of the press during the emergency by starting her own newspaper published by Gram Sevak Press. This publication was declared unlawful by the government and was closed subsequently. As Gandhiji remarked, she and her team never knew what fatigue was and never claimed any special privilege. The Government Women’s College in Bhubaneswar was later renamed _**Rama Devi Women’s University**_ after her. She was awarded the Jamnalal Bajaj Award for Development & Welfare of Women and Children in 1981 in recognition of her services. She was also awarded an honorary doctorate by Utkal University in 1964. This great soul, fondly called ‘Maa’ by the people of Odisha took her last breath on 22nd July 1985. But her efforts and institutions continue to support the needy and inspire the people even today. **References ** [_About Rama Devi._](https://www.rdwuniversity.nic.in/history.html) Rama Devi Women's University, Bhubaneshwar, Odisha. Dr Chinmayee Satpathy, "[_Freedom Struggle and Rama Devi_](https://magazines.odisha.gov.in/Orissareview/April2006/engpdf/freedom_struggle_%20and%20rama%20devi_.pdf)". E-Magazines | Government of Odisha. [_Ms Ramadevi Choudhary Recipient of Jamnalal Bajaj Award for Development & Welfare of Women and Children-1981_](https://www.jamnalalbajajawards.org/Media/pdf/JBA_1981_Bio_Rama_Choudhury(1).pdf). Jamnalal Bajaj Foundation. _Previous musing: [Economics of Freedom (1965)](https://indianliberals.in/content/economics-of-freedom/)_ --- ## [Musing] Accountability in Public Service URL: https://indianliberals.in/musings/accountability-in-public-service/ ### Body This is an excerpt by N. Vittal, a former Central Vigilance Commissioner, Govt. of India. He suggests that a lack of transparency and widespread corruption among other things have caused an accountability crisis, which can be resolved by encouraging competition and embedding accountability at the individual level instead of the organisational level. Accountability, as mentioned earlier, constitutes the soul of effectiveness and quality of public service. It means responsibility. In the ultimate analysis, it should and can be fixed and focused only on individual human beings. Fixing responsibility on organisations can be a manner of speaking. An organisation is, after all, an artificial person and an impersonal entity. Fixing it on organisations does not really make the practice of accountability meaningful. In any analysis in public service, we must never forget the fact that accountability is on the individuals. It is when we focus on the individual human element that we will be able to fix accountability and in case of failure rectify the system. In fact, if there is a single element that is responsible for the prevailing poor quality of governance in our country or the quality of services in any sector, we find invariably, it is the lack of sense of accountability. _This is an excerpt from the February 2011 issue of the ‘Forum for Free Enterprise’. Read the full document _[_here_](http://v2.indianliberals.in/~_admin/pdflanguage?id=761492374.pdf)_._ Read more such articles: [https://spontaneousorder.in/bureaucracy-accountability/](https://spontaneousorder.in/bureaucracy-accountability/) --- ## [Musing] Acharya N G Ranga: The Farmer’s Friend and Swatantra Party Stalwart URL: https://indianliberals.in/musings/acharya-n-g-ranga-the-farmers-friend-and-swatantra-party-stalwart/ ### Body _Gogineni Ranga Nayakulu, also known as NG Ranga, was a distinguished politician and freedom fighter. He was a champion of Peasant rights and is considered the father of the peasant movement in India. In 1991, he was awarded with the Padma Vibhushan award. _ NG Ranga was born on November 7, 1990, in Nidabrolu Village of Guntur District, Andhra Pradesh. His parents, Nagaih and Atchamamba, were farmers. He completed his primary and secondary education in Nidabrolu. He matriculated and graduated from Andhra Christian College, Guntur.  In 1920, Ranga left for England and studied Economics and Political Science at Oxford University. He received a doctorate for his research on “The Economics of Handlooms” from the Oxford University. He completed his higher studies and returned to India by 1926. At Oxford, Ranga studied the works of influential political thinkers such as Bertrand Russel, HG Wells and JS Mill. He was attracted to socialist philosophy after witnessing the progress of the USSR. However, his belief in socialism was short-lived, as the Stalin regime’s oppression of peasants and the initiation of Soviet land reforms such as forced collectivisation led to Ranga’s departure from Marxist ideology.  Commenting on the forced collectivisation, Ranga remarked, _“Peasants were faced with the awful prospect of having to slave hard on their holdings and produce bumper crops, only to hand them over, at the preemptory behests of the Soviet armed proletariat, to the soviet authorities without any hope of receiving any of their most elementary necessaries.” _  Since NG Ranga belonged to a farming family, he understood the problems of farmers well. He was determined to contribute to eradicating these problems. It is also worth noting that during his schooling, NG Ranga began reading reformist literature. He was inspired by Kandukuri Veeresalingam, a social reformer and liberal thinker of his time.  Ranga said, _“The most important all-India leader who made the biggest impact on my mind and activity before I left for studies at Oxford in 1920 was Veeresalingam. His books lifted me out of my rural moorings and placed me in the ever-expanding stream of national feelings, thoughts and movements.” _ After returning to India, Ranga worked at Pachayappa College in Madras as an Economics lecturer. Soon after, he was duly appointed by the Justice party as ‘Adviser of the Madras state government on economic affairs’.  In 1930, Ranga’s career took a political turn. He resigned as a lecturer and state advisor. He joined the Indian National Congress the same year and became part of the Indian freedom movement. Ranga looked up to the charismatic personality of Gandhi. He wrote a book titled “Bapu Blesses”, in which he wrote about his discussions with Gandhi on various topics.   Rajagopalachari wrote the introduction in Bapu blesses, _“Whether we follow Mahatma Gandhi’s advice on various matters or not, it is an undeniable fact that our people in India consider him the wisest of men our country produced. NG. Ranga is one of our exceptional men, whose whole concern is the happiness of our people and not one’s own advantage”_. NG Ranga  had a progressive vision of educating the peasant population. He believed that peasants would understand the government policies affecting them through education. In 1934, Ranga launched the Indian Peasant Institute in Guntur, Andhra Pradesh. He insisted on using orthodox Telugu knowledge-sharing methods. These included using Burrakatha(oral storytelling), Veera Katha(storytelling on brave acts/people) and Mono acting.  In 1954, following his defeat as the President of the Congress party of Andhra Pradesh, Ranga resigned from the party. On his resignation, he wrote, _“I have differed violently from Jawaharlal over the fate of self-employed masses of India and parted political company with him.” _ By the mid-1950s, a growing sense of discontent was prevalent in the country regarding the ruling Congress party. Nehru’s socialist orientation led to enacting policies encompassing central planning, land redistribution and state control over key industries.  C Rajagopalachari, also known as Rajaji, founded the Swatantra party in 1959. The Swatantra party was founded on the principles of classical liberalism and economic freedom. Rajaji invited NG Ranga to take up the position of President of Swatantra party. Ranga joined the Swatantra party and served as the President for a decade. From 1959 to 1969, under the leadership of Rajaji and NG Ranga, the Swatantra party rose to a position to challenge the Congress government. With the support of traders, businessmen and industrialists, the party tasted electoral success in the 1962 elections by securing 25 Lok Sabha seats and 207 State assembly seats.  Ranga vehemently criticised the Congress Party over the 17th Constitutional Amendment, which allowed the state governments to acquire lands of farmers without paying due compensation. Ranga advocated for minimal state intervention and liberty to hold private property. Due to the continuous efforts by Ranga and other party leaders like Minoo Masani, Rajaji and Dayabhai Patel, the party became the single-largest opposition in Lok Sabha by winning 44 seats in the 1967 elections.  However, by 1969, the political landscape of India witnessed several changes. The Congress underwent a split into two factions led by Indira Gandhi and K Kamraj. Minoo Masani opposed the proposal of a joint alliance between the Kamraj faction and the Swatantra party. NG Ranga and Minoo Masani were not on the same page on several issues. In fact, NG Ranga wrote that the party members had grown impatient over Masani. In his book Distinguished Acquaintances, Ranga wrote, _“Though he was admired, he did not succeed in winning the affection and willing confidence of the majority within our growing -though small- parliamentary group. .. Once he became the President of the party, as a whole, his irrepressible love of exercising his powers and his inability to await the development of consensus came to force”._  NG Ranga returned to the Congress party following Swatantra party’s defeat in the 1971 elections. He continued to serve in the Parliament from 1977 to 1991. Throughout his political career, Ranga stood for peasants, the right to property and economic freedom. In his memory and honour, the Agricultural University of Andhra Pradesh is named Acharya NG Ranga Agricultural University.  References Bapu blesses, by N. G. Ranga, 1969, The Indian Peasant Institute publication Distinguished Acquaintances, Volume 1&II, by N. G. Ranga. Desi Book Distributors, 1976. [https://amritmahotsav.nic.in/district-reopsitory-detail.htm?12998](https://amritmahotsav.nic.in/district-reopsitory-detail.htm?12998) [https://indianliberals.in/periodicals/swatantra-party/](https://indianliberals.in/periodicals/swatantra-party/) [https://www.constitutionofindia.net/members/n-g-ranga-rao/](https://www.constitutionofindia.net/members/n-g-ranga-rao/) [https://www.peepultree.world/livehistoryindia/story/eras/c-rajagopalachari](https://www.peepultree.world/livehistoryindia/story/eras/c-rajagopalachari) [N G Ranga: Swatantra's Peasant Leader - Spontaneous Order](https://spontaneousorder.in/n-g-ranga/) [N.G Ranga and the Peasant Movement | INDIAN CULTURE](https://indianculture.gov.in/node/2822394)   _Previous musing: [TANGUTURI PRAKASAM PANTHULU: A VISIONARY LEADER AND PIONEER OF PRESS FREEDOM](https://indianliberals.in/content/tanguturi-prakasam-panthulu-a-visionary-leader-and-pioneer-of-press-freedom/)_ [](https://indianliberals.in/wp-content/uploads/2023/08/IMG_20220724_121630_copy-removebg-preview.png) **Ch Prashanth** Prashanth is pursuing his Master's in International Relations and Politics at the Central University of Kerala. He likes to spend his weekdays at the library or gym. His weekends are spent in front of the television watching the Premier League. --- ## [Musing] Food Prices and Libertarian Solution URL: https://indianliberals.in/musings/agricultural-economy/ ### Body The right remedy is not to attempt any price-fixing at all but to remove the hindrances in the way of the smooth working of the agricultural economy and let free enterprise have a chance. The following is an excerpt from an article published in the Indian Libertarian Magazine by M A Venkata Rao in August 1957. His arguments for freedom for farmers remain as relevant today as they were then. _“Leaving these two types of arrangement as extremes or even as stages of future development inapplicable at the present stage of social affairs in India, we wish to suggest a third type of regulated economy which would set free the natural man and set him going on the road to free economy and help the present generation to unwind the coils in which it has bound itself under the glamour of communism (socialism) of the Marxist variety._ _As solutions of great generality are pointless and unfruitful unless they are shown in illuminating application to current problems, we propose here to indicate the libertarian way for the easing of the food problem in India in the current crisis._ _We shall begin by approving the present amendment to the Essential Commodities Act whereby the Government has taken power to requisition hoarded stocks at reasonable rates. The amendment has a duration of three months after which it will lapse. This js only a temporary administrative measure to induce hoarders to come into the market and not wait for further rises during the lean months before the harvest. But what after the next harvest? …_ _The right remedy is not to attempt any price-fixing at all but to remove the hindrances in the way of the smooth working of the agricultural economy and let free enterprise have a chance. What is obstructing fair prices is not free economy but partial monopoly on the part of hoarding merchants a few months before the harvest. They buy up stocks from the producers and hold them for rising prices above normal and fair levels. The actual growers have not the economic stamina to wait. Their consumption needs are too pressing and they sell their surplus for normal prices or for what they can get. Their bargaining power is low. Prices rise as soon as stocks move from the peasants’ haystacks to the mandi of wholesale merchants in the towns. Here is the bottleneck. If harvests are poor mandi merchants hold up sales and wait for higher prices. They borrow money against grain stocks and hold them for price rises. The Government has instructed the banks of the country through the Reserve bank not to be free with advances on grain. This together with the hoard acquisition amendment has been able to check profiteering. But this cannot be adopted as a permanent measure. The permanent remedy is to provide credit to the grower himself. If he can get advances on his harvested grains, he will not sell in a hurry and in distress to the middleman. He will sell at leisure and derive the profits of timeliness himself instead of surrendering it to the middleman.”_ Access the full document [here](http://v2.indianliberals.in/~_admin/pdflanguage?id=1856980936.pdf). (page 6) First Published in the Indian Libertarian in August 1957. Other editions of the publication can be accessed at [Indian Liberals](http://indianliberals.in/), an open, multilingual digital archive committed to preserving liberal voices in the Indian public sphere. --- ## [Musing] A Dialogue Between Socrates And Lenin URL: https://indianliberals.in/musings/all-quiet-on-the-western-front-1930-2/ ### Body The Communist doctrine crucially ignores the way incentives shape human behaviour and the role of the agency. Moreover, the Communist deployment of state coercion as a tool to create a Just Society translates into an Orwellian caricature of some animals being more equal than others. _The Communist doctrine of ‘from each according to his ability, to each according to his needs’ seemingly presents a rosy vision of justice and equality. However, it crucially ignores the way incentives shape human behaviour and the role of the agency. Moreover, the Communist deployment of state coercion as a tool to create a Just Society translates into an Orwellian caricature of some animals being more equal than others._ _In the July 1969 issue of the _Freedom First_ magazine, Feroza Seervai, discussed the vexed issue in an interesting manner. She put Lenin in a Socratic dialogue with – who else but – Socrates. In a fictional setting, she would expose the fallacy in the Leninist vision of a Just Society built by state coercion._ _Produced below is an excerpt from the article._ Since Socrates was a pagan and Lenin an atheist, neither of them went to Heaven. But on the 21st of January 1921, the soul of Lenin newly arrived from Earth, met the soul of Socrates somewhere in. . . . and they talked upon matters of importance. **Socrates**: I am overjoyed, Lenin, to meet you. Hundreds of years ago I expounded the idea of the perfect republic and now, I understand you have established a Communist State. Have you based it on my ideal republic? **Lenin:** What a joke! Comrade Socrates, what a joke! But an intellectual like you is capable of any nonsense. I realize your bourgeois ideology! I, who have fought and won against the capitalists-scoundrels! I, who have brought equality to all men!! I, who have established a classless society!!! Not I, comrade. In my state I have established justice. In your bourgeois ideology there is no freedom, but serfdom. How can you know Justice, with your bourgeois mentality! **Socrates:** Lenin, you strike terror in me indeed, when you speak so vehemently. Pray, be gentle with me, and a little patient; for I would fain know from you, in what does Justice consist? **Lenin:** As my master Marx taught, there is but one evil: the exploitation of man by man. There is one way to put an end to it: by abolishing all private property, by establishing the rule of the proletariat. This is the way to bring true equality among all men- this is Justice. **Socrates:** I fear Lenin, I am not qualified to understand you. I have been long away from Earth. You have called me bourgeois; you speak of the capitalist and the proletariat; you address me as comrade. These terms are new to me and I must request you to speak to me in simple words. _The full text can be accessed _[_here_](http://www.freedomfirst.in/uploads/issues/pdf/206.pdf)_._ _[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context._ Read more: [Who is Getting Their Hands Dirty – Solid Waste Management Rules, 2016](https://spontaneousorder.in/who-is-getting-their-hands-dirty-solid-waste-management-rules-2016/) --- ## [Musing] Agricultural Policy of Swatantra Party URL: https://indianliberals.in/musings/agricultural-policy-of-swatantra-party/ ### Body With regard to agriculture as with regard to industrial and other aspects of the economy, libertarian literature has a great contribution to make to the clarification of issues and the defence of liberty. _The following article, written by “Democrat”, first appeared in February 1960 issue of the Indian Libertarian, an independent journal of economic and public affairs. The article highlights the position of the Swatantra Party on the so-called ‘reforms’ in the agriculture sector. The author forewarns us about the dangers of state intervention led by the Congress party after the Nagpur session, which has deprived farmers of their dignity and has made them dependent on the state for their livelihood._ The declared agricultural policy of the Congress and Government after the Nagpur session last year has been the major and decisive provocation for the formation of the Swatantra Party under the aegis of Sri C. Rajagopalachari and the initiative of the All India Agriculturists’ Federation. The case against official policy in its twin strands of ceilings on land holdings at low levels and of cooperative farming (with pooled joint holdings) has been presented by the leaders of the Federation and others like Mr MR Masani and Congress Ministers like Sri Charan Singh of the U.P. (who has had to resign office on account of his bold opposition in Nagpur). Leading newspapers like The Hindu and The Times of India arid journals of opinion like Swarajya, Mysindia and Indian Libertarian have published the results of expert studies on the subject tending to show the dismal failure of “hasty land reforms” with ceilings and cooperative farming both in the free world and in communist countries. The President of the All India Agriculturalists’ Federation has been demanding but a free, unprejudiced examination of the whole subject by experts like experienced Directors of Agriculture and others with special qualifications on farming. He has been demanding a committee of experts to go into the subject de novo and assuring the Government that his federation would abide by the verdict of experts arrived at free from mental reservations and surrender to dogmatic isms like socialism and communism. But the Government have systematically evaded this fair demand. The Congress under the lead of Mr Nehru has contented itself with the statement that the subject was decided long ago by Congress resolutions from the days of the Karachi session. At Nagpur, a report of the Committee of Ministers and other high-tips appointed at Hyderabad AICC meeting was accepted, which only endorsed the decision already arrived at without any re-study of the facts de novo. Moreover, it was a committee of Congress politicians and far removed from the kind of expert body demanded by the Federation. To use the popular phrase, its work was but an eye-wash to put up a facade of re-study without doing so in any acceptable sense. The Swatantra Party has expressed its resolute up position to the twin aspects of farming policy now being pushed into effect by Congress and Government obstinately despite the warnings of men of experience and special knowledge. It has expressed its stand in its manifesto of principles as passed in August 1959 in its Bombay convention. The present Bangalore session of the Congress is expected to reiterate the Nagpur stand despite doubts and anxieties expressed on all sides. First of all, it is made clear beyond doubt and prevarication that in agriculture the paramount need is for increasing production. But the Party believes that it is best attained through the continuance of the self-employed peasant-proprietor who stands for initiative and freedom and is interested in obtaining the highest yields from the land. This is a divergence in principle. The Government policy contemplates the eventual disappearance of the independent individual farmer working on his own and helped by the members of his family. Rajaji has given the slogan therefore-for Farm and Family. President Eisenhower too in his talk at the Agricultural Fair in Delhi spoke of food, freedom, family and friendship. This stand has more than economic significance. It has an overtone of democracy and human value setting the individual in his natural context of family and neighbourhood working on tasks within his reach and deriving the value of his own work directly without dependence on others in any demeaning way, as would be the case under dictatorship. Increasing production only necessitates a more efficient supply of aid by way of credit, marketing facilities, implements and technical advice to the farmer. The programme of the Swatantra Party insists on more intensive attention by Governmental agencies and cooperative institutions to the provision of these aids to the farmer. It holds that joint cooperative farms need not be insisted upon as the rule in agriculture. Individual holdings may continue-and ought to continue. The remedy is not abolition but assistance for progress. Service cooperatives are different since they do not imply the disappearance of individual holdings and their pooling into joint farms operated by managers reducing farmers to the condition of wage labourers. This connotes a diminution of personal status to the farmer, which he will never accept. Nowhere in the world has he voluntarily accepted it. The Swatantra Party goes further and expresses disapproval of the idea of abolition of the landowner class that gets its hard work on the land done through tenants. By accepting the slogan of “land to the tiller,” Congress accepts without adequate examination the policy of abolishing the class of owners who let out land and supervise its cultivation by tenant farmers. This is supposed to be exploitation and not partnership. The first step in realising this goal of cultivation only by small owners and the abolition of mediators between them and the Government or public is taken in the Government proposals by the imposition of low ceilings and the transfer of surplus lands to tillers and tenants with insufficient holdings, i.e. below basic or family holdings. This provision is a dear adoption of communist doctrine, for it involves liquidation of property rights, the robbery of Peter to pay Paul. Farcical compensation may be paid but that does not deprive the transaction of its expropriatory character. Such expropriation will inevitably raise the demand for similar robbery to benefit other classes in other kinds of property-houses, industrial units, transport units etc. Such execution of the practice cannot be resisted for long. So this will function as the thin end of the wedge for the rapid transformation of free society into a communist society and state. The Swatantra Party, therefore, asks that the programmes for improvement of agriculture and enhancement of production standards should not disturb the harmony of rural life among the elements that compose it. This phrase is purposely vague but the time has come when it should be clarified. The elements that compose rural life are landowners, tenants, labourers and cultivators’ families. The attempt to impose ceilings hits the landlord and creates a clash of interest between him and the tenant and the landless labourer and cultivator. The Swatantra Party should now expand its policy statement into a dear and comprehensive picture of the agricultural system that it favours in the countryside. It should take a definite stand against ceilings on principle. The Federation has brought to light a good deal of essential data for judgment. It has shown that ceilings on holdings are entirely uncalled for since adequate areas of uncultivated fallow land are available in different parts of the country. The Swatantra Party should restate this fact supported by reliable statistics covering every State in the country. The Revenue Minister in Mysore State Mr Kadidal Manjappa recently said that Government were prepared to offer 15 lakhs of acres of Government land to Harijans and others willing to cultivate them! One thousand acres had been offered to Harijans a few years ago but they had not been taken up at all! Moreover, the extent of land expected to be released by the imposition of ceilings at 30 standard acres is only 2 lakhs of acres. Why, if only two lakhs are to be got by liquidation of surplus land held by landowners when 15 lakhs are available with Government, the expropriatory policy should be insisted on is beyond comprehension. The Swatantra Party stands for individual freedom and accepts limitations to it only in cases of proved anti-social behaviour. It has to review the case for and against landowners having their lands cultivated through tenants. In what way is it antisocial to supervise landed property and obtain a legitimate harvest through investment? It provides work for the landless tenants who are free to save money and purchase lands for themselves. The Government, land mortgage banks and cooperative credit societies may also help the tenant to purchase lands by giving him long term loans. The State may assist the credit institutions by means of low-interest loans as was done in West European countries like Denmark, Holland and Germany. The intermediary landowner might not have taken interest in former times but today under the inspiration of national independence and progressive agricultural departments, he will certainly respond to the duties and possibilities of his vocation. He should be given a chance before adopting policies aiming at his removal from the social system of agriculture. To give help to agriculture, it is not necessary to remove the landowner! The State can deal with the tenant, leaving tenant and owner to settle relations between them themselves on a voluntary basis. Intermediaries come into existence in response to human needs and circumstances. Owners may have to travel to cities and accept jobs far from their lands owing to insufficiency of income. But they could make arrangements for supervision and efficient cultivation. In England, owners are penalised only if they leave their lands uncultivated or inefficiently cultivated. They are not liquidated. Nor are ceilings imposed. The Swatantra Party refers to joint cooperative farming by the term multiple ownership and points out that it is certain to sap the incentive of the farmer, to reduce farm output and end in a collective economy and bureaucratic management. The leaders of the Swatantra Party had thought of confining their published manifesto only to general principles leaving details of policy to be forged after attaining power. But the general public does demand that they should offer an alternative policy in sufficient detail if they are to support it intelligently with their eyes open. It is necessary therefore for the Party to offer a constructive alternative to ceilings and joint farming, assuring greater production and freedom for the farmer and his family as citizens of a democratic society. The direction announced by the party is sound but the overall picture should be developed in sufficient detail as a part of free economy and free society. With regard to agriculture as with regard to industrial and other aspects of the economy, libertarian literature has a great contribution to make to the clarification of issues and the defence of liberty. Even in America, there is a movement to resist the encroachments of State intervention in economic affairs, of which The Foundation for Economic Education is perhaps the leading example. In the journal that it publishes named The Freeman can be found plenty of material gathered by its numerous staff as well as summaries of positions taken by freedom-loving economists and statesmen, showing conclusively the evils of State intervention and the curtailment of free economy. America has now a special problem as to how to withdraw from the policy of State assistance to agriculture particularly in the production of Food Grains. During the war, the State gave special subsidies for the production of food grains. But the result was such an abundance that the State had to step in to protect the price level and to buy up the whole production at upset prices! The policy of State support to food grains has now become a huge white elephant and American farmers are paid fantastic sums to refrain from producing above a limit. American economy in agriculture can produce enough to supply the whole world with food! So we hear of wheat being fed to pigs in America. Political pressure and fear of loss of votes prevents politicians of both parties, Republican and Democratic, from removing the price support laws, showing how difficult it is for the State to withdraw its intervention once it gets entrenched in any sphere of the economy! This libertarian literature has its counter-part in India as well. This journal publishes an economic supplement from time to time as well as articles specially devoted to the value of free economy and the dangers of State intervention to the country, dangers both economic by way of inflation and the wage-price spiral and political by way of damaging the independence and self-reliance of the citizens so essential for democracy. If the citizen becomes helplessly dependent on the State for livelihood and conditions of economic well-being, his capacity to think and vole straight fearlessly will suffer. The original document can be accessed [here](https://indianliberals.in/the-indian-libertarian/the-indian-libertarian-feb1-1960.pdf). _[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context._ --- ## [Musing] All Quiet on the Western Front URL: https://indianliberals.in/musings/all-quiet-on-the-western-front-1930/ ### Body [All Quiet on the Western Front](http://en.wikipedia.org/wiki/All_quiet_on_the_western_front) is a 1930 epic war film that narrates the tale of World War I as viewed from the eyes of German soldiers. The horrors of war have been beautifully captured and give a heart-rending account of the war and the lives destroyed by it, even when one is lucky enough to survive the bullets. The essence of the film is best captured by the first title card of the film… _“This story is neither an accusation nor a confession, and least of all an adventure, for death is not an adventure to those who stand face to face with it. It will try simply to tell of a generation of men who, even though they may have escaped its shells, were destroyed by the war…”_ In the beginning of the film, the protagonist of the film Paul Baumer (played by Lew Ayres) and his friends are seen as a bunch of student who gets aroused by the lecture of their jingoistic school teacher and enlists in the Army to “save the fatherland” riding high on the patriotic wave and totally unaware of the horrors that are in store for them. Once on the battlefield, the rosy picture of war as painted by the teacher and all the tales of patriotic duty and bravery begins to fade as they try to survive bombs and bullets flying by and see their friends wounded, paralyzed and dead. The horrors and realities of war force them to question the wisdom behind such a ghastly act. The following conversation between the surviving soldiers soon after the first round of battle displays the naiveté of the soldiers who fight the war for their political masters, for reasons they are totally oblivious and unsure of. **_Albert Kropp_**_: Ah, the French certainly deserve to be punished for starting this war. _**_Detering_**_: Everybody says it’s somebody else. _**_Tjaden_**_: Well. how do they start a war? _**_Albert Kropp_**_: Well, one country offends another. _**_Tjaden_**_: How could one country offend another? _**_Tjaden_**_: You mean there’s a mountain over in Germany gets mad at a field over in France? [Everyone laughs] _**_Albert Kropp_**_: Well, stupid, one people offends another. _**_Tjaden_**_: Oh, well, if that’s it, I shouldn’t be here at all. I don’t feel offended. _**_Katczinsky_**_: It don’t apply to tramps like you. _**_Tjaden_**_: Good. Then I could be goin’ home right away. _**_Paul Bäumer_**_: Ah, you just try it. _**_Katczinsky_**_: Yeah. You wanna get shot? _**_Tjaden_**_: The kaiser and me… [the others laugh] _**_Tjaden_**_: Me and the kaiser felt just alike about this war. We didn’t either of us want any war, so I’m going home. He’s there already. _**_Hair-peak soldier_**_: Somebody must have wanted it. Maybe it was the English. No, I don’t want to shoot any Englishman. I never saw one ’til I came up here. And I suppose most of them never saw a German ’til *they* came up here. No, I’m sure *they* weren’t asked about it. _**_Paul Bäumer_**_: No. _**_Detering_**_: Well, it must be doing somebody some good. _**_Detering_**_: Not me and the kaiser. _**_Hair-peak soldier_**_: I think maybe the kaiser wanted a war. _**_Tjaden_**_: You leave us out of this! _**_Katczinsky_**_: I don’t see that. The kaiser’s *got* everything he needs. _**_Hair-peak soldier_**_: Well, he never had a war before. Every full-grown emperor needs one war to make him famous. Why, that’s history. _**_Paul Bäumer_**_: Yeah, generals, too. They need war._ **_Hair-peak soldier_**_: And manufacturers. They get rich. [murmurs of agreement] _**_Albert Kropp_**_: I think it’s more a kind of fever. Nobody wants it in particular, and then all at once, there it is. We didn’t want it. The English didn’t want it. And here we are fighting._ Later in the conversation, one of the central characters of the film, Katczinsky (Louis Wolheim), comes up with an innovative idea to substitute war over any conflict or disagreement. **_Katczinsky_**_: I’ll tell you how it should all be done. [spits] _**_Katczinsky_**_: Whenever there’s a big war comin’ on, you should rope off a big field… _**_Cigar-smoking soldier_**_: And sell tickets. _**_Katczinsky_**_: Yeah. And – [glares at interrupter] _**_Katczinsky_**_: And on the big day, you should take all the kings and their cabinets and their generals, put ’em in the center dressed in their underpants, and let ’em fight it out with clubs. The best country wins. [everybody murmurs in agreement]_ Towards the end of the film, Paul takes a trip to his hometown on a furlough where he finds the stark contrast between what the people of his town thinks of the war and the realities that he has witnessed and experienced at the battlefront. The people here are being foolishly patriotic and ignorant of the realities that they have never seen or experienced. On his visit to his old school, he sees his teacher giving the same old speech to a new batch of students and asking them to enlist to serve their Fatherland. Disgusted by it all, he returns to the battlefront even before his leave is over. He finds that most of his company men are dead and have been replaced by young kids fresh out of school just to fill the ranks, who haven’t even received proper training. The film is a double Academy Award winner for Best Picture and Best Director. It was the first talkie war film to win Oscars. All Quiet on the Western Front has been acknowledged as the seventh best film in the epic genre of all time by the [American Film Institute](http://en.wikipedia.org/wiki/American_Film_Institute)(AFI) in its 2008 list. This movie is highly recommended for its anti-war theme and success in highlighting the tragedies of war as seen through the eyes of individuals. --- ## [Musing] THE APPLICATION OF SCIENCE AND TECHNOLOGY TO SOCIO-ECONOMIC DEVELOPMENT URL: https://indianliberals.in/musings/application-of-science-and-technology/ ### Body The following booklet was published by the [Forum of Free Enterprise](https://indianliberals.in/content/the-application-of-science-and-technology-to-socio-economic-development-by-professor-m-s-thacker-15-november-1971/) in 1971. Authored by Professor M.S. Thacker, the text was originally delivered as a speech at the 6th A.D. Shroff Memorial Lecture. Thacker discusses the increasing significance of science and technology and their practical applications, contributions to the economy, and drawbacks.I  begin by repeating a part of my Presidential address to the United Nation's Conference, which met at Geneva in. 1963 with nearly two thousand delegates and over ninety countries represented, on Application of Science and Technology for the benefit of the Developing Areas of the World.  "Perhaps the most important of these various revolutions: will prove to have been due to the upsurge of science and technology. In the last century, science was essentially the concern of a few private individuals and institutions. It has emerged as the most important element of national development and economic uplift. And need I mention the widespread and almost ubiquitous influence of technology in all fields of human endeavour, whether public or private. Advances in nuclear science inspire hopes that mankind may have at his command before very long, historically speaking, vast and cheap sources of energy. Radio astronomers and optical astronomers have extended estimates of the age of our galaxy and are striking farther and farther out into the boundaries of the universe. Man has encompassed his world with artificial satellites and has made challenges of reaching the inviolate moon. The arts of agriculture and medicine are vastly improved and the same can be said for almost every field of human endeavour. We have much deeper understanding of the biological processes. The sciences dealing with the earth and its environment are in an equally lively state. The air, the earth, the oceans and the sun contain riches which can support increases in population at higher and higher standards of living." What I  said was eight years ago. The frontiers of science and technology are widening and deepening every day and at such a rate that we are constantly under pressure to alter our perspective, to come to terms with the newly discovered truths. There was a time when people could afford to ignore the results of science or scorn at them or even be brutally opposed to the scientific truth as at the time of Galileo. However, the temper is different today since science and technology are so intimately tied with our daily life. They have become the essence of economic behaviour and we almost, as it were, take for granted conditions created by the technological change. Newer products of research are affecting national economy, the national security is becoming more and more dependent upon technology, books and even day-to-day newspapers are preoccupied with the increasing power of technology; and even art and architecture are being drawn into its vortex. These changes have imperceptibly become a part of our life and we have, unconsciously, if not consciously, learnt to live with them. Compartmentalization of science, which was so in earlier years, is becoming obsolete in the present era of rapid change. Let me illustrate. A branch of nuclear physics now is also a part of astronautics and astronomy. Optics theory, so typically a  physics subject, in the earlier days, has with the invention of lasers, become a  branch of communication engineering. Magnetic resonance today is  a  branch of biology. Fourier transforms, a stable technique which the engineers used, is presently being used in economics to discover important trade cycles and to develop more logically consistent and empirically well founded economic planning models.  The esoteric research, which used to be the brunt of jokes and mirth - a topic such as "mating habits of the Papuan insects"- has led to a  major scientific breakthrough in pest-control and agricultural crop care. The "moon-walk” training that U.S. astronauts underwent prior to stepping on the moon has yielded rich data and technological breakthroughs in the treatment of paralysis, polio and disabled persons. The application of new radar techniques, to distinguish real H-bomb missile warheads from fake decoys, has opened up a  new vista in brain surgery. Boolean algebra, considered once "useless intellectual gymnastics", has laid the foundation for computer sciences. A recent article quotes: "Out of the growing wealth of space technology, ever-expanding lists of practical applications are coming. Already, instruments in space are greatly enhancing weather forecasting and global communications, especially television. The use of the latter was strikingly demonstrated when. In 1969, millions around the world saw the astronauts walk on the moon. In the future, techniques will be improved and new applications developed that will include worldwide navigation aids, air traffic control, detection and measurement of Earth's resources, as well as the mapping and measurement of air and water pollution. The very act of reaching into space can help man to improve the quality of life on Earth. Thus science and, in its application, technology have in the recent years acquired new horizons, broken old compartments and barriers and have reached the unforeseen possibilities. "In the United States of America, science and technology and economy together over the last quarter century have had the longest period of sustained growth, innovation and the new industry in the recent history. These may not have brought on the millennium. Science's very success, one might say, has added some age-old problems and created new ones, has measurably widened options and potentials of human life on earth, but one cannot deny the pinnacle of this period when man stepped on the moon, a feat that will rank in history among the few clear, large and positive achievements of the 'last decade'." The "moon-feat" was perceived as a technological feat. It may be so but science was behind it. Technology represents the practical embodiment and apparent manifestation of science. The Third Law of Newton which states that action and reaction are opposite and equal is obviously science. But the rocket that sped the astronauts to the moon was technology. the practical embodiment of Newton's Third Law or its manifestation in rocket thrust. Hence technology and science are interrelated and mutually causative. The relationship in the age of empiricism was confounded. But, in the modern era, it is clear, explicit and bi-directional.  Historically, it was in the 16th century that the beginnings of what we now have become familiar with - the application of science to technology - are to be sought when a committee of mathematicians were entrusted with the task of suggesting repairs to the Basilica of St. Paul in Rome and that incident may also be said to mark the beginning of engineering in the modern sense of the word - until then architecture was an art unrelated to the science of mechanics and was based on practical experience handed down from the earliest times. The next incident of major importance was the application, again of mathematics and astronomy, to navigation with the heralding of the age of discovery. Similarly, there were several others which brought science and the useful arts together without, however, allowing for the birth and growth of science-based technologies. In fact, right down to the discovery by Faraday of the principles of electromagnetic induction and the birth of electrical engineering there continued to be a yawning gulf between science and technology and even the word "science" did not find a place in everyday vocabulary. The universities were tied down to metaphysics and science to them was just another branch of philosophy. It is not surprising, therefore, that until the crafts had given birth to the sciences - chemistry from the textile industry that was looking for an effective bleaching agent and physics from the needs of having to sail across the open seas - technology had to depend upon the crafts instead of the sciences for its progress. Till the end of the nineteenth century, the connection between science and technology was itself very loose and tenuous. The periods when science flourished did not coincide with those when technology was moving ahead most rapidly. When they did flourish together, it was not necessarily in the same place. On balance, till mid-nineteenth century, science was far more indebted to technology than technology to science. Science and technology started moving closer as the experience with the Industrial Revolution grew and science began to take the lead in some areas. The commercial interests, as this relationship between science and technology grew, realized that research, science and science-based technology, were essential for revolution. The outcome of this realization was the emergence of industrial laboratories, especially in the West. These commercial industrial laboratories continued to be the main agency through which scientific and technological knowledge was processed for economic exploitation. But if an idea had no apparent or explicit commercial application, it was not taken up for investigation. If a scientific study discovered some major break-through, it was not shared with others and hence its potentiality to do any social good remained dormant. Such research laboratories neither interested themselves in basic research nor did they consider it worthwhile to finance it. Basic research was left largely to be pursued in universities, but under almost similar conditions that the inventor faced in the early part of the nineteenth century. It was world War I that brought into sharp focus the overwhelming need for the application of science to the art of war which until then was dominated by the belief, as expressed by Lloyd George of the rulers of the world, that "the seat of intelligence lay in the chin and that this feature in the physiognomy was to be sought for in military leadership." But the submarine compelled Great Britain to seek the help of Sir William H. Bragg to find a solution for their detection. France looked to Langevis for devising a means for the detection land-mines. The outstanding contribution of science to the art of war, however, was Haber's achievement in fixing the nitrogen of the atmosphere for the manufacture of explosives that enabled Imperial Germany to carry on the war. The inter-war years enabled this realisation to make massive investments in the aeronautical industry as providing, with the submarine, a third dimension for national war machines, and it reached its climax with the historic decision of Franklin D. Roosevelt that the USA should give the highest priority to the manufacture of the atomic bomb. The researches into the structure of the atoms, which were hitherto considered only of theoretical interest, began attracting Government's attention when men like Dr. Albert Einstein were able to convince the public policy-makers that national security of the United States could be enhanced by the application of such basic research. In any case, no private laboratory could conduct such basic research as it involved very large resources and, besides, carried a high risk of failure. With the entry of Government on national security grounds into the activity of basic research a new phase commenced in the history of science and technology and its impact on economic development has been far reaching and fundamental. "Out of World War II, in what has been called the greatest mobilization of scientists and technologists in history, came a great victory over a clearly evil tyranny; and a cornucopia of great technical developments to build and keep the pace. None of these developments could be economically 'afforded' in the depressed period of the 'THIRTIES', but in war the men and wherewithal were quickly found to develop them, largely out of the banked-up store of European science. From these wartime projects in due time came the antibiotics, atomic power, cryogenics, computers, jet planes, rocket vehicles, radar, transistors, masers, lasers, and other projects that became the new industrial face of the mid-century," and the recent progress, have accumulated enormous capital inventory upon which technology can draw. To give one brief example, nuclear energy, thought still in its early stages, is most promising in its possible effects on economic development. Only nuclear power possesses the necessary explosive force to release petroleum fluids which are often trapped in what geologists call “tight" rocks, since chemical explosives are quite ineffective for such purpose. Low grade copper ores could be mined economically for the first time by the application of nuclear explosives. In fact, nuclear energy is cheaper by several multiples than any other source, and vast new vistas of technology towards economic development will open once the radio-active factors are tamed. The above briefly outline the relationship between science and technology, the economic implications of the concomitant development and the three phases it went through in its historical role. The first was an unsystematic and erratic application of mechanical inventions to economic activity characterised by a tenuous and weak causative relationship between science and technology, which gave way, in the second phase, to a definite causative relationship between science and science-based technology. Concurrently, scientific research began to get organised in commercial industrial laboratories which, as it grew, gave the impetus, in its application, to economic production. The third phase which intensively began with and after World War II brought with it the participation of the Governments. Viewed against this historical development of the impact of science and technology, our recent experience poses some thought-provoking questions. No doubt, technological change that results from this impact is one of the most important determinants of the shape and evolution of our socio-economic growth. One very important and direct consequence of technological change in the 20th century is the communication revolution. In fact the growth of modern communication is itself a function of social and economic development. Industries, transport, and modern communication media such as radio, TV and satellites (like Telstar) are the indices of general social and economic growth which ultimately reflects in individual betterment. Improved working conditions permitting reduction of working hours and an increased flow of products, old and new, have added many new factors to our consumption pattern and way of life. New machines and processes and the advent of factory automation have strengthened the measure of our growth and productivity. However, structural changes show that the introduction of new industrial technology changes the relative importance of individual supplying sectors in the economy. New machines and techniques of production alter the amounts and kind of materials, of parts and components, of energy, of labour skills, and of supporting services that each industry uses to manufacture its products. A couple of instances of this kind, one might cite, are the shift from coal to oil and natural gas, and marked displacement of steel and tin by plastics and paper in the container industry. But though most people would agree that on the whole technological impact has been beneficial, could one say it has been without any cost to society? Advances in military technology, for example, have made possible considerable beneficial changes in many sectors. However, the same technology has made possible the destruction of mankind on an unprecedented scale, bringing into a serious question the survival of the human species! Modern civilian technology has also inflicted costs in terms of air and water pollution, radio-activity, urban sprawl, crowded cities and increased social and psychological tensions. I would point out the remarks Sir Solly Zuckerman, Scientific Adviser to the British Government, made at the XXIII Congress of the International Chamber of Commerce, Vienna, April 1971, at which some of our leading industrialists were present: " ...... over the past few years more and more voices have been sounding warnings about the adverse secondary effects of the continued growth of our industrial civilisation. In some quarters even the desirability of economic growth itself is being questioned. This particular issue has crystallised in the terms 'environment' and 'pollution'. In the more developed countries of the world an increasing number of people are asking whether the adverse environmental effects which industrialisation and modem technology can bring in their train may not counter-balance the primary beneficial effects for which they are also responsible, and indeed whether environmental damage is not an inevitable consequence of industrial growth." We are, in one way, fortunate, so to speak, in not having simultaneously developed with the Western countries. That is in having many of our options open on the choice of technology which provides us an opportunity to make rational allocation. In the West, these options are no longer open, and, in fact, were closed, rather unwillingly, in the aggressive pursuit of individual profit-maximization. Policymakers, scientists and technologists in the West are today agonizing over the question of costs of technology, costs that accrue to society! What all societies, therefore, need is a system of social accounting that will make clear the total costs to the society of each possible outcome of the decision-making process and the incidence of gains and benefits to all concerned. Such accounting is no longer impossible, thanks to refinements in data collecting and computerization of results. Undoubtedly, science and technology have a clear impact on economic development. But are the social benefits from this impact worth the social cost? This question leads us to two interesting thoughts. First, it is possible that the social benefits of a technology may not be worth its social cost. Yet, the private benefits from this technology may greatly exceed the private costs. I refer to the controversies of the 1950s, in this country, on whether India should build the heavy engineering projects, atomic reactors, etc., which arose out of a confusion between private cost-benefit calculations and social cost-benefit calculations. If one were to calculate the net benefits from these public sector projects in terms of the classical accounting concepts, then, clearly, the rate of return would be small. However, from the social point of view, these public sector projects, when managed and run efficiently, provide an industrial base and make possible a variety of private industrial activity. These public sector projects provide social benefits which in value terms exceed social costs and even if they do not provide sufficient return from the private point of view, they, nevertheless, have "social profitability". I argue that no matter how profound may be the impact of a particular technology on economic development, if the costs it imposes socially are large compared to the benefits it provides socially, then the society in a group decision may find it beneficial to forgo it. This is one of the new issues that has been raised by dissenters in the West. Yet another issue could be raised. That is the distributive justice of the technology. By this I mean that those who enjoy the benefits of the impact of science and technology are not necessarily the persons who pay the costs, or pay proportionately to the benefits enjoyed. One might refer to cases such as pollution, traffic congestions, "brain-drain", etc. I am tempted to refer to "brain-drain". Our young men are getting trained in State-financed universities, technological and research institutions. They go abroad and settle down there. According to one estimate up to 1967 the number of Indian scientific and technical personnel abroad was 39,000 (20,000 engineers, 11,000 medical doctors and 8,000 scientists*). Of these, a large number was for study and training with a small number for employment and on emigration. As a percentage of this total in 1967, it worked out to about 17% in the case of engineers, 11% in the case of doctors and 9% in the case of scientists. There are several causes for the brain-drain but I am sure many young men would probably return if the job satisfaction level in India was raised. In this context, if programmes of action are formulated for specific groups, there are better chances of such men returning to India instead of trying to line up such cases with the problems of brain-drain in its entirety. For example, in areas such as electronics, design engineering, instruments, etc., greater progress as well as large employment for scientists and technologists now working abroad are possible. But the point is that sooner we realise that we are paying the costs for this training and that because of the socio-economic atmosphere we are unable to reap the benefits of these sunken cost, the better will it be for the country. What I have said, is neither new nor revolutionary! No doubt science and technology have a profound impact on economic development, but have the benefits been without their costs? Do we not in the future need a more conscious calculation of these costs and benefits before we accept a technology? Should we or should we not seriously consider, in the application of technology, the issues of social costs and benefits and of the distributive justice of technology? These are some of the crucial questions we must answer. However, in several questions I have so far posed, I would like to emphasise not the past but the future. Do we, on the basis of the historical experience of other countries, want to follow the same known but beaten path of science and technology, or do we want to chart a new approach on the basis of the urgent requirements of our country? Let me not be misunderstood. I do not at all advocate the exclusion of everything foreign. Quite the contrary, I believe science and technology have no national boundaries, and, in fact, there has to be a free exchange of scientific ideas and information in a rational world. However, science and technology while universal, nevertheless, have a relevance and specificity. Technology generally cannot be successfully uprooted from the environment and planted in another. To be successful in this transfer, there have to be adaptations and assimilation. It is only after we have passed through this phase that we could provide the infrastructure for a nationally suitably technology, innovative in its own environment. Every leader of technology in the world today has passed through this phase, the U.S.A. in the 19th century, the Soviet Union between 1925 and 1940 and China between 1950 and 1970. I would say, and readily accept, and I again quote from my presidential address to the United Nation Conference at Geneva, that totally imported science and technology may not be relevant to the needs of the less developed countries. I would also accept that the development of science in these areas should be such that it is suited to the material needs and genius of the people concerned and that such a development of science should gather momentum gradually. I would accept that view, but we must not make a fetish of it or find in the absence of such a science an excuse to delay action. However, we will have to review our technological import policy, so that we would not unnecessarily import quite so much and in duplication. We are buying the same technology many times over. In spite of our long experience of industries such as iron and steel, aluminium, paper, etc., we have imported the same or similar technologies from a number of countries. Even today, we are repeating the same process to some extent. It would be better for the nation's economic development if we were to analyse cost-benefits, if we imported a technology once, and then use the existing know-how from our existing industries or engage our national laboratories and technical institutions to find a relevant specific adaptation of that technology in tune with the national requirements. This would of course entail a greater R & D effort than is being conducted at present.  A target for total national expenditure on research and experimental development was proposed by a UNESCO conference on the Application of Science and Technology to the Development of Asia (CASTASIA) held in Delhi in 1968, when the Ministers for Education, Science and Technology, and the leaders in the field from all Asian countries were present. The Conference recommended participating governments of Asia to endeavour to reach a minimum national expenditure (current and capital expenditure by both government and private players) on research and experimental development of 1 per cent of their gross national product as soon as possible, but not later than 1980. Japan is often cited as an example of a country experiencing rapid advances in technology. This is no doubt valid; however, a deeper look at Japan reveals that Japan rarely imported the same technology twice. In fact, technologies that were imported in Japan were combined with intense research to make it adaptable to Japanese conditions. Some figures would illustrate this. For 1950-62, the Japanese import of chemical technology constituted 22% of total import of technology. Over similar period, R & D on chemical technology constituted 24% of total R & D. The same is true of other imported technologies such as electrical machinery, transport equipment, etc. In other words, in Japan the larger the fraction of imported technology, the larger was the domestic R & D effort to enable Japanese engineers to understand and adapt the technology. During 1957-65, in India, non-electrical machinery constituted 29% of the imported technology through foreign collaboration. Yet the R & D expenditure on non-electrical machinery was barely 6% of the total R & D effort; similarly, electrical machinery technology imports were 11% of total imported technology, whereas the R & D effort in electrical machinery was about 4%. The results of the policies of the two countries are clearly visible. Recent estimates on R & D expenditure have shown that the contribution of the private sector is negligible.* For example, out of the total annual expenditure of Rs. 146 crores on R & D during 1969-70, the private sector has invested about Rs. 11 crores which is about 7% of total. In advanced countries, these figures vary from 36 to 74%, Japan showing the maximum. In a recent survey carried out by the Indian Chemical Manufacturers' Association, in a large number of cases, the R&D expenditure is well below 1% and in some cases even below 0.5% of total sales, whereas in the UK, it is about 6%. In addition, this conference recommended some guidelines for science policy which I reproduce in full. The preamble recognised the vital role of science and technology in relation to growth, and recommended that the country should: - formulate and implement a purposeful National Science Policy as a high priority measure in any government programme; - extend the scope of their science policies to the whole chain of activities ranging from basic research to the innovation processes whereby the results of research and experimental development are translated through engineering and design into products and techniques of immediate socio-economic value; - recognize as a basic option of their national science policies the principle of "endogenous development" whereby economic growth and technological change are being oriented and sustained by the nation's own scientific and technological community; - ensure appropriate integration and harmonization of the national science policy at the highest level of government, while attaching major importance to the adjustment mechanisms of the science planning system which should provide for immediate reaction to error or charging circumstances; - secure effective participation of the research scientists and technologists in the governing organs of the national science policy-making bodies; - create or maintain strong government structures for the formulation of scientific policy as well as for the co-ordination, financing and performance of research and development, and related scientific activities; - establish and expand the research and development base such as laboratories, scientific equipment, etc., in order to meet the need of the national economy including the need for choice, assimilation and efficient utilization of imported technology; - formulate the national science policy in such a way as: (a) to create favourable conditions for the application of science and technology to national development;  (b) to reduce social disparity or adverse side-effects when adopting new technology, and in particular not to aggravate unemployment; - adopt, publish and keep under constant review, a set of basic criteria for the allocation of national resources to science and technology, and in particular to research and development activities; - promote, as a priority sector of the national science policy, the development of adequate scientific and technical information organization and services at the national level. While considering the excellence of these recommendations, it is salutary to recall that in l958 the late Prime Minister, Mr. Jawaharlal Nehru, enunciated the Scientific Policy Resolution to Parliament, to affirm its faith in the vital role of science and technology in the transformation of our society. It is an admirable document and emphasises what science can do in providing new conceptual frame-works and analytical tools for tackling socio-economic problems and in promoting the spread of a scientific temper among the community at large. But I might comment after 13 years that there has been not much visible impact of science on our society. Advanced countries demonstrate an extraordinary and expanding array of new companies whose very life-blood is research and development. Their field of operations lies along the farthest frontiers of scientific discovery. Their business is to exploit the advances of science, to translate them rapidly and economically into useful products and services. On our industrial horizon, relatively few of these new enterprises yet bulk large. Perhaps, the talent that could be profitably harnessed for R & D projects is busy in absorbing and stabilizing the repeatedly borrowed technical know-how. There is, therefore, no incentive and urge for creative efforts. Hence the role of R & D in the current technological revolution, its significance for the future economic strength of this country in the face of rising international competition are wholly out of proportion to its individual size. At this juncture, may I enter and say a few words about the big industry - small industry controversy? There is no doubt that heavy capital outlay (hence 'big') industries are most necessary for economic growth. We have set up large industries, big dams, etc., and made a beginning in nuclear technology. But that is only half the story. The other half suggests that for effective and efficient exploitation of these big industries, we need a dense cluster of small but efficient industries that are suppliers of various inputs I to these big units, and also are users of the output of the big units. Unless such a structural transformation takes place, industrialization would be superficial. This has been our experience of the last twenty years of planning. Thus, while there have been heavy capital investments in some of our States, they have acquired a very marginal industrial base, as for example in Bihar. On the other hand, some of our other States which have received a small share of the heavy public sector capital outlays such as Punjab, Tamil Nadu, have, nevertheless, developed an industrial base largely through setting up of small and medium industries. Let me say that it is axiomatic in economic planning for a developing country like ours that science and technology should play a decisive role in increasing agricultural and industrial productivity. This is more so, because TIME is against us. We must do in a few decades what it has taken several centuries to achieve in the developed countries. The mere availability of science and technology, however, does not guarantee that the economic development of a country will automatically take place. If science and technology are to contribute to productive processes, special talents must be trained and developed. The people must be trained to apply the knowledge and techniques effectively on a broad front. The availability of people with the necessary skills determine the direction and pace of economic growth in developing countries. In the last analysis, it will be the ambitions and know-how of the people of developing countries that will determine whether minerals stay underground or are transformed into goods useful to man; whether oil remains hidden or becomes a major source of power and heat; whether roads remain mud-tracks or are transformed into arteries of trade and commerce. In brief, the most important investment any country can make, whatever may be its stage of economic development, is in its human resources, and in the education and training of its population in institutions which create incentives, and make it possible for the individual to realise his aspirations and in the process effect a revolution, economic and social, for the benefit of everyone. The tremendous growth which we have witnessed in science and technology is a result of one thing - a better use by man of his mental capacities. No aspect of the development process has been more stressed here than this one - human resources. Developing human resources, training of minds, has emerged as the most pivotal aspect. I would like to say again, with the utmost conviction, that it is human resources, still largely untapped, which constitute man's real hope for the future. For all his inventions and calculating machines, man remains the principal tool of economic development, as his welfare should be its only objective. Our investments in human resources will pay dividends only if we develop adequate political wisdom to exploit this kind of investment. Otherwise, the human skills and knowledge generated become sterile. Here, I am not anxious to talk about our politics or about the complexion of our economic and social ideologies, whether we choose private initiative or state initiative or a judicious combination of the two to suit our special circumstances in our efforts to usher in social justice - and social justice is no more than a translation of this ethical imperative - our salvation, in the final analysis, rests in a down-to-earth effort to increase our total national productivity, save enough for investment on a continuing basis and accelerate the process of development. It will be poor consolation to us if we only render lip service to this ethical imperative of socialism by reducing it merely to one of controlling the means of production and distribution and set up gigantic state enterprises unless we run them efficiently and profitably. As an engineer concerned with the practical aspects of building a new and prosperous society in our country, I find it difficult to agree with the thesis that the profitability of a state enterprise and socialistic philosophy are opposed to each other or even that the former, namely profitability, is a secondary consideration. We have to only acquaint ourselves with what is today happening in professedly socialist economies like Yugoslavia, Czechoslovakia and Poland, not to speak of U.S.S.R. and China. Even in a socialist system, enterprises must stay in business, make enough profits to insure against future risks, though the quantum of benefits may not be at a level which one would expect in the private sector, since obviously a part of the benefits that accrue to society would not be measurable in economic terms. It is only out of today's profits that we can protect ourselves against tomorrow's losses on the one hand, and on the other, save enough for future investment. I, therefore, attach the highest importance to the question of increasing national productivity since it is only through higher productivity that we can wipe out the poverty of the millions of our people and extend to them hope of a new life. In the country today, there is considerable unemployment. Naturally, therefore, there is a widespread demand for labour-intensive technology, presumably for the technology that generates the most jobs. In the light of remarks I made earlier, I would like to offer some cautionary remarks that seem relevant to me. Need the labour-intensive technology be the technology which generates the most jobs? This conceptual confusion has, in my opinion, led to some unnecessary controversies. A jet plane which is certainly not as labour-intensive as a bullock cart actually generates more jobs than the latter. A computer may in many situations generate more jobs than manual labour.  The confusion has arisen because labour-intensity has been interpreted as the number of jobs directly created per unit investment. By this criterion, the bullock carts and manual labour certainly create more employment than modern technology. However, when we consider the indirect employment generation, the employment generated in other industries, as a consequence, modern technology generally far outstrips the more primitive technology. For some projects, the direct effect is large but the indirect or linkage effect is small. For others, it is the other way round. For bullock carts, for example, the direct effect is large compared to the jet engine, but the linkage effect is small compared to jet. Generally speaking, the more modern technology has a high linkage effect but a low direct effect. The more primitive technology has a low linkage effect but high direct effect. The correct strategy for maximum employment is, therefore, to elect those technologies which maximise the direct plus linkage employment effects. One very important effect of technological progress, which, though apparently social, has serious economic implications. The widespread technological environments have resulted in enormous growth of population of our cities and states, to which I have referred earlier very briefly, with a corresponding expansion in the economic units of agriculture, industry and labour. Increasing speed of transportation and communication has accelerated this expansion bringing together larger groups of people and giving rise to more complex and unmanageable large organizations, and the largeness of an organization, without a matching ability to plan, co-ordinate and execute, must affect efficiency. A highly technological society in necessarily an alert society. Hence progress and change in one field almost immediately induces corresponding currents of progress in others. The science of management could not remain aloof from the new ideas, new methods and new products of science and engineering. This process of give-and-take between the science of management and large technological organizations, appears to be very slow in our country. I see a great deal of activity, recently, in the field of management. But I wonder, how far the ideas and sophisticated tools provided by the science of management have become functional in our large organizations! Thus ultimately the essence of the scientific and technological progress lies in its use towards increasing efficiency. Hence if individuals composing society are incapable of using technological innovations, a great deal of technology will be fallow. I do not want to go deeper into the complex question of the effect of technology on society because it demands much more knowledge and understanding than is suggested by the currently fashionable - and contrasting - popular views about technology. But before I close, I would like to touch one important social component of technological influence, viz. "the strains that technology places on our values and beliefs, finally, are reflected in economic, political and ideological conflict. That is, they raise questions about the proper goals of society and about the proper ways of pursuing those goals. In the end, therefore, the problems that technology poses (and the opportunity it offers) will be resolved (and realized) in the political arena, construing 'political' broadly to include economic and ideological considerations as well as questions of more narrowly political organization and tactics. Technological innovation, therefore, leads ultimately to a need for social and political innovation if its benefits are to be fully realized and its negative effects kept to a minimum." "Technology can even create a new society composed of individuals who themselves are the products of a technological process. By the use of chemicals and radiation the biologists can induce mutations in genes and chromosomes, and so, by an appropriate handling of genetic materials, create new strains of living organisms. The same genetic laws govern the evolution of human beings. Conceivably someone may have the arrogance ultimately to undertake the breeding of a strain of 'good men'. But who then shall determine the new model of the 'good' man?" "If, then, we are to preserve the ideal of the cherished individual we will need wise men more than we will need more and more technically skilled men too. As it is, we do not know how to produce them with an environment that will encourage their wisdom to blossom and act. Yet, without wise men, the chances are that the democratic concept and democratic traditions built around the obligations and rights of the individual will be lost under the crush of the vast needs of the society and the enormous potency of the technologies put into operation in a massive society to meet those needs."_Previous musing: [THE UNION BUDGET 1992-93 BY NANI PALKHIVALA](https://indianliberals.in/content/the-union-budget-1992-93/)_ --- ## [Musing] ART VERSUS LAW AND ORDER URL: https://indianliberals.in/musings/art-versus-law-and-order/ ### Body _The following essay is part of a 2012 booklet published by The Liberty Institute, New Delhi, in partnership with the Friedrich Naumann Foundation for Freedom. The booklet was title **[At Liberty: Freedom to Express and Offend.](https://indianliberals.in/content/at-liberty-freedom-to-express-and-offend/)** Authored by Ravi Shanker Kapoor, the essay challenges the perceived validity of public outrage (and political support for the same) and bans on artistic expression.  _In India, as also in other countries, often demands are made for ban on movies, paintings, books, songs, or other creative works. The demands are accompanied with overt and covert threats - ban it, or else... Apparently sound arguments are made in favor of capitulation. After all, it is just a movie, song, or book; why hurt the sentiments of somebody or some group; why risk peace and amity in society; why should the law and order situation be allowed to worsen just because some Johnny thinks that his creation is a great piece of art; at any rate, human lives are more important than art. Governments face the question: should the demand be accepted?  The easy answer is yes. The tetchy (and raucous) group is appeased; the specter of large-scale violence fades away; and the authorities breathe easy.  The tough, and correct, answer is no.  A ban is wrong not only in principle but also as an expedient measure. It is wrong in theory because it violates or curbs the right to freedom of expression; and without the individual enjoying freedom of expression, democracy is reduced to a farce. Democracy is not just about casting vote and electing representatives for state assemblies and Parliament; it is a way of life: if you can't say what you want to say, it is democratic form without substance. The principle worth imbibing is: give me freedom or give me death.  **Why Offend Somebody ** It is often argued that freedom of expression does not mean license to offend others. Why should Salman Rushdie write a book that offends the Muslims? After all, he was a writer of repute even before he published Satanic Verses; his other books received critical acclaim and were sold in good numbers. So, the argument goes, why should he write a blasphemous novel in the first place? Similarly, why should M.F. Husain paint goddess Saraswati in the nude? Why should Taslima Nasreen author novels which offend the Muslims? Why should the Danish cartoonist sketch the Prophet Mohamrnad?  But the point is that, as George Orwell said, if liberty means anything at all, it means the right to tell people what they do not want to hear. If you tell me that I am a great author, and I let you say that, it is neither liberty nor tolerance. You enjoy liberty only if you tell me that my writing is not worth the paper it is printed on; and I am tolerant when, even if I have the power to squash you, I let you (or am forced to let you, because the law will protect you, however powerful I may be) express your opinion. Former U.S. President Ronald Reagan famously cracked a joke at one of his press conferences which goes on like this: An American and a Russian had an argument about freedom of speech in their respective countries. The American said that he could go to White House, enter the Oval Office, and tell the President, "Mr. Reagan, you are a fool!"  The Russian responded, saying that he could also go to the Kremlin, enter Gorbachev's office, and scream, "Mr. Gorbachev, Mr. Reagan is a fool!"  Secondly, it is practically impossible for a creative person to envisage what would offend somebody. Yes, sometimes people say and do things for instant publicity, but again that is neither criminal nor immoral so long as it does not hurt others. How could the makers of_ Biloo Barber_ have imagined that a neutral word 'barber', which is not pejorative by any stretch of imagination, would get them into trouble?  **Vagaries of Political Correctness ** And, finally, if a creative person has to always keep the sensibilities of tetchy rascals and the vagaries of political correctness into account, how could he create anything of any consequence? He would be busy studying, analyzing, and examining the nuances of every word, every name, epithet, etc. As for the fears about the worsening of law and order situation if 'offensive' books, movies, etc. are not banned, we can only say that the fears are grossly exaggerated.  This is not to say that there are no fears. Hindu groups have attacked painting exhibitions by M. F. Husain and Jatin Das. Salman Rushdie did receive a death fatwa from Iran's Ayatollah IUlomenie for his novel _Satanic Verses._ While Rushdie was not hurt, many others were.  According to www.wikipedia.org:  Hitoshi Igarashi, its [Satanic Verses'] Japanese translator, was stabbed to death on 11 July 1991; Ettore Capriolo, the Italian translator, was seriously injured in a stabbing the same month; William Nygaard, the publisher in Norway, barely survived an attempted assassination in Osio in October 1993, and Aziz Nesin, the Turkish translator, was the intended target in the events that led to the Sivas massacre on 2 July 1993 in Sivas, Turkey, which resulted in the deaths of 37 people. Individual purchasers of the book have not been harmed. However, the only nation with a predominantly Muslim population where the novel remains legal is Turkey. It is important to note here that since that unfortunate incident, no _Verse_-related violence has happened in Turkey. The reason: Turkey refuses to forget the Sivas Massacre and forgive the perpetrators.  An angry mob of Islamic fundamentalist had attacked the Mahak Hotel in Sivas after traditional Friday prayers. The intellectuals had gathered at the Mahak to celebrate 16th century poet Pir Sultan Abdal. The attackers were incensed by the presence of Aziz Nesin, a writer who had translated and published extracts from _Satanic Verses._ While Nesin managed to escape because the mob did not recognize him, dozens perished in the arson attack.  The State Security Court sentenced 33 people to death in November 1997 for the massacre. In a 2001 appeal, all but two of these sentences were upheld. The sentences were, however, commuted to life in prison as Turkey abolished the capital punishment in 2002.  **Turkey and Us ** Civil society organizations and prominent intellectuals commemorated every year the anniversary of the Sivas Massacre. In 2010, the Turkish government joined for the first time ceremonies commemorating the outrage which had claimed the lives of many intellectuals, writers, and artists.  "The pain of Mahak is a pain for the entire country," State Minister Faruk Celik said at the commemoration ceremony held in front of the Mahak Hotel and attended by other government officials. Celik went on to call July 2,1993, as one of the most painful dates in Turkish history. “That day they wanted to test the brotherhood we have built for centuries, with blood and tears," Celik said. “The fire that encompassed the hotel affected all our bodies."  What this shows is that the Islamist fundamentalists, despite their bluff and bluster, are mostly a cowardly lot; they become dangerous when they get the impression that they get away with murder.  It also shows that in Turkey intellectuals actually died and suffered for the cause of the freedom of expression - unlike their counterparts in India who invariably succumb to the pressures of Islamic fundamentalists and whose fight for freedom of expression is restricted to a tirade against fanatic Hindus.  This is not to say that Hindu groups pose no threat to the freedom of expression. Their campaign against _Shivaji: The Hindu King in Muslim India_, a book written by American scholar James Laine, is a case in point. The book not only occasioned ban and court cases but also violence.  Shivaji Bhosle (1630-1680), the Maratha Emperor with the royal title Chhatrapati Shivaji Maharaj, fought for the freedom of the Maratha nation from Sultanate of Bijapur. Owing to his fight against the Muslim rulers, including the mighty Mughals, Shivaji is a hero of Hindu nationalists. His many adventures have bestowed a halo to his legend. In Maharashtra, he is especially cherished as a cult figure. The local parties like the Shiv Sena which peddle Maratha pride almost worship him and even the slightest hint of criticism, let alone disparagement, is projected as blasphemy. Characteristically, the Mumbai (formerly Bombay) airport was renamed as Chhatrapati Shivaji International Airport.  **Shivaji Controversy ** In June 2003, Shivaji was published in India by Oxford University Press India. In November, scholars affiliated with the Bhandarkar Oriental Research Institute (BORI) of Pune, city MP Pradeep Rawat, and others demanded withdrawal of the book. The OUP was prompt in coming out with an apology; it also withdrew the book from the Indian market. This, however, did not appease Shiv Sena activists who, on December 22, assaulted scholars attached to BORI for their assistance to Laine for his book. Sanskrit scholar Shrikant Bahulkar was beaten up and his face blackened.  A few days later, James Laine faxed a statement, saying:  It was never my intention to defame the great Maharashtrian hero. I had no desire to upset those for whom he is an emblem of regional and national pride, and I apologize for inadvertently doing so. I I foolishly misread the situation in India and figured the book would I receive scholarly criticism, not censorship and condemnation. Again I apologize.  The campaign against the book continued nonetheless. On January 5, 2004, over 150 members of the Sambhaji Brigade ransacked BORI, vandalizing the building, books, and artworks.  The state government, however, did little to stem the assaults. State home minister R.R. Patil said (The Indian Express), "We condemn the attack and also distorting of the history of Chhatrapati Shivaji. The government is seeking legal opinion to ascertain if any action can be taken against the author and also whether the book can be banned." Notice the bracketing of scholarship with criminality. Unsurprisingly, the criminals were emboldened. On January 9, Sambhaji Brigade spokesman Shrimant Kokate is reported (The Times of India) to said, "In fact, scholars should be happy that BORI is still intact." The brigade was "most unhappy" that scholars who had helped Laine were ''still alive," he lamented.  In another report (The Indian Express), he was quoted as saying, "Those who fed him [Laine] with the offensive information should be hanged by the government. If the government is unable to do so they should be handed over to us."  As for the newspersons disapproving of vandalism, Kokate said, "We will deal with the media later." On January 14, the Maharashtra government proposed to ban the book, citing Sections 153 and 153A of the Indian Penal Code. Two days later, prime minister Atal Bihari Vajpayee opposed the proscription, infuriating the ally Shiv Sena. He said (The Indian Express), “If you do not like anything in a particular book, then sit and discuss it. Banning a book is not a solution. We have to tackle it ideologically.. If differences of opinion remain after an issue is discussed, the best way would be to come out with another good book on the subject."  **Because Ban Involves Us All ** It needs to be noted that it was not just the pro-Hindu outfits like the Shiv Sena which were whipping up a frenzy against the book; leaders of other parties also joined in the capitalize on despicable popular sentiments. Senior Congress leader and former Maharashtra chief minister A.R. Antulay castigated Laine and urging the government to take all necessary legal steps to punish him. Chief minister Sushillrumar Shinde said (The Hindu) that it was "not fair" to write such "bad things" about Shivaji.  Fortunately, the Bombay High Court decided against the ban; and the Supreme Court on July 9, 2010, upheld the high court's decision. The apex court maintained that the Maharashtra government did not follow the mandatory procedure while invoking the ban on the book.  In Shivaji, politicians saw a golden opportunity to gain popularity by transmogrifying the people into rabble. In what he thought was an excellent exercise in competitive populism, Maharashtra BJP president Gopinath Munde: also demanded a ban on Jawaharlal Nehru's book, _Discovery of India_, claiming that a 1986 edition contained derogatory remarks about Shivaji. But he had not read the book; and the hearsay he relied on proved to be misleading. When it was pointed out that no such remarks were found in that edition, he sheepishly said, "I am a politician and not a scholar."  The controversy over _Shivaji: The Hindu King in Muslim India_ was just one of the many that Hindu groups kicked off. In 1998, they unleashed hell against Deepa Mehta's film _Fire _on the grounds that it portrayed a distorted version of Indian society. The movie was about lesbian relationship between two family members. On December 2, activists of the Shiv Sena Mahila Aghadi attacked the matinee show of the film at Cinemax theatre in suburban Goregaon in Mumbai. Glass panes were smashed, posters burnt, and slogans raised against the movie.  A day later, the women storm troopers vandalized Regal cinema in the heart of the national Capital, accompanied with TV camera crews. The cops, however, were conspicuous by their absence. Fire producer Bobby Bedi was quoted in _India Today,_ "The Delhi Sena chief's letter informing the press about the demonstration said that they would do tod-phod and violence was expected... almost as if tea will be served." Pune was next, then Surat.  According to India Today: On the eve of their attack on Cinemax, the Mahila Aghadi women called on state Culture Minister Pramod Navalkar to protest against the depiction of the "lesbian relationship" between Shabana Azmi and Nandita Das in the film. They even demand Azmii's resignation from the Rajya Sabha.  While Navalkar obviously gave the green signal, Chief Minister Manohar Joshi egged them on, even patting them on their backs. 'I congratulate them for what they have done. The film's theme is alien to our culture," said Joshi on the day the Sainiks attacked cinema halls and succeeded in stopping a film cleared by the Censor Board. Of course, Joshi backed down later saying he was only supporting their protest and not the vandalism.  The charge of the Sena brigade was, however, successful: Union Minister of State for Information and Broadcasting M.A. Naqvi sent _Fire _back to the Censor Board. Once approved, a film is rarely referred back to the censors, with exceptions like R.V Pandit’s _Maachis_ [directed by Gulzar] because of its supposed soft treatment of terrorists. You need  "public outrage" for that, and the Sena obliged.  **The Pattern ** There is a pattern. The bodies protesting against a work of art are front organizations of Sangh Parivar or the Shiv Sena. The pro-Hindu political parties are under the (false) impression that sanctimonious thump over 'the great and glorious Indian culture' will bring a rich harvest of votes. As Manohar Joshi's flirtation with the activists indicated, the vandals enjoy political and administrative support. So, the real threat to the law and order does not emanate from the artists' flights of fancy but from politicians' shielding of hooligans.  It is not just the Bharatiya Janata Party and the Shiv Sena but also the Congress and other 'secular', 'liberal' parties which have great faith in and tolerance for storm-troopers. The grand old party, in a bid to outsmart the regionalism and sectarianism of mainstream Akalis, set up Bhinderanwale-resulting into the assassination of Prime Minister Indira Gandhi and killing of thousands of people of all faiths. Similarly, to counter the Maratha chauvinism of the Shiv Sena, it propped up Maharashtra Navnirman Sena chief Raj Thackeray and refused to take action against the violence he brought about. Not much dissimilar is Trinamool Congress chief Mamata Banerjee's effort to out-Left the Marxists in West Bengal; she has partnered with the ruthless Maoists.  In short, it is the shortsightedness of mainstream politicians that creates law and order problems, not the work of art, however outrageous they might be. If the vandals are brought to justice and the rule of law is upheld, there would be no lawlessness and disruptions. _Last week's musing: [STATE MONOPOLIES AND THE CITIZEN IN A DEMOCRACY](https://indianliberals.in/content/state-monopolies-and-the-citizen-in-a-democracy/)_ --- ## [Musing] Auctioning Import Licenses - B.R. Shenoy URL: https://indianliberals.in/musings/auctioning-import-licenses-b-r-shenoy/ ### Body _Produced below is an excerpt from an essay published in The Indian Libertarian, January 1959, titled "Auctioning Import Licenses" by B.R. Shenoy. It explores the inefficiencies of India's import licensing system and advocates for a shift towards auctioning these licenses to generate government revenue and curb corruption._ Import licenses today are issued to Established Importers, Actual Users, and government or governmental establishments. Apart from illegal payments made to corrupt officials, the licenses are issued free of charge even to private parties. But, because of the wide disparities which exist between the internal prices of imported goods and their landed costs (i.e., the external prices multiplied by the rate of exchange), import licenses fetch phenomenal prices in the market; these prices may vary from 50% to 500% or more of the face value of the licenses, depending upon commodities. The recent cut in imports has driven these prices up. You cannot get rich quicker today than by getting import licenses issued in your favor. An appropriate license may bring lakhs of rupees, literally, overnight. This operation, which is remarkably simple if we have the right men in the right places in the right ministries, is even more profitable than gold smuggling (which yields a gross profit of 73% on each act of smuggling), involves much less work, and carries next to no risks. Indian imports on private account averaged per year during the past two years Rs. 743 crores. Open General Licenses being restricted to a few items of imports from Pakistan, virtually the whole of these imports came under specific import licenses. If the auction were to fetch an average price of 45-55% of the face value of the licenses, it may bring in a revenue of Rs. 300-Rs. 400 crores. But, perhaps, rather than upset all vested interests at once, it may be expedient to invite tenders, in the first instance, for the licenses which are now issued to Established Importers. The market prices of these licenses are among the highest, and the returns on them may amount to Rs. 200 crores per year. The amount may be, as well, larger considering the accounts of the prices offered for the licenses for certain commodities. From the experience gained, the area of auctioning may be extended to cover all private imports. This device is vastly better than the extension of state trading to imports, which has been suggested by some. State trading here would be avoided considering the scarcity of personnel with the necessary talent, knowledge, experience, and, above all, integrity. Auctioning will bring to the national exchequer the cream of profits, while leaving undisturbed the existing private enterprise machinery of import trade. These windfall receipts would represent 60-80% of the annual average of the tax revenues of the Centre for the past two years. They may not cause any undue strain on the national economy. Insofar as the proceeds of the sales of the first category of licenses are concerned, it would amount to no more than a transfer to the national exchequer of the ill-merited earnings of the anti-social elements among the public and in the administration. If care is taken to ensure that monopolist purchases of the licenses do not take place—this may be done by inviting tenders for the licenses and ensuring wide distribution of the accepted tenders—it may not amount to any new burden on the consumers and the users of import goods, as the auction of the licenses would affect neither the effective demand nor the market supply of import goods. It would, however, put a stop to the concealed subsidies of the industrialists, as the cost of the import goods would now amount to not merely landed costs, as formerly, but landed costs plus the prices paid for the import licenses. But subsidization of industries should be done on a more rational basis than through the issue of import licenses; it should not be mixed up with the adoption of corrective measures for the balance of payments difficulties of the country​. The crux of India's payments problem is, on the one hand, to bring about a shift-back to production for export from production for the home market and, on the other, to eliminate the vast gaps between the landed costs and market prices of import goods and between the internal and the external prices of gold. Stabilization of the economy is not possible without this two-dimensional desideratum. The auction of the import licenses would equate domestic prices of import goods to their external prices; the shift-back in production, which is necessary on a considerable scale, may be achieved by drawing on the auction proceeds of import licenses to subsidize exports. This would serve the ends of economic justice as the ill-merited gains of the import trade are acquired mainly at the expense of the export industries. The export promotion measures we have so far adopted, or have under active consideration, include relief from export duties, "draw-backs," rebates on customs and excise duties, and remission of sales tax on exports, rediscount of export bills at preferential rates, freight concession on Railways, supply of steel at concession rates for export production, wider coverage of insurance risks than hitherto, provision of certain administrative facilities to exports, and so on​. Read the complete text [here](https://indianliberals.in/the-indian-libertarian/the-indian-libertarian-jan1-1959.pdf). (Page I - Indian Libertarian Supplement) type=content&p=8642). Needs editorial review._ --- ## [Musing] Ambedkar's Annihilation of Caste URL: https://indianliberals.in/musings/ambedkar-annihilation-of-caste/ ### Body Following is an excerpt by B.R. Ambedkar's undelivered speech, written in 1936, _Annihilation of Caste. _In this excerpt, Ambedkar outlines how caste destroys individual liberties and societal growth. He goes on to explain how liberty, equality, and fraternity are crucial for freeing Indians from the shackles of the Caste System.The assertion by the individual of his own opinions and beliefs, his own independence and interest — as over against group standards, group authority, and group interests—is the beginning of all reform. But whether the reform will continue depends upon what scope the group affords for such individual assertion. If the group is tolerant and fair-minded in dealing with such individuals, they will continue to assert, and in the end will succeed in converting their fellows. On the other hand, if the group is intolerant, and does not bother about the means it adopts to stifle such individuals, they will perish and the reform will die out. Now a caste has an unquestioned right to excommunicate any man who is guilty of breaking the rules of the caste; and when it is realized that excommunication involves a complete cesser of social intercourse, it will be agreed that as a form of punishment there is really little to choose between excommunication and death. No wonder individual Hindus have not had the courage to assert their independence by breaking the barriers of Caste. It is true that man cannot get on with his fellows. But it is also true that he cannot do without them. He would like to have the society of his fellows on his terms. If he cannot get it on his terms, then he will be ready to have it on any terms, even amounting to complete surrender. This is because he cannot do without society. A caste is ever ready to take advantage of the helplessness of a man, and to insist upon complete conformity to its code in letter and in spirit. A caste can easily organize itself into a conspiracy to make the life of a reformer a hell; and if a conspiracy is a crime, I do not understand why such a nefarious act as an attempt to excommunicate a person for daring to act contrary to the rules of caste should not be made an offence punishable in law. But as it is, even law gives each caste an autonomy to regulate its membership and punish dissenters with excommunication. Caste in the hands of the orthodox has been a powerful weapon for persecuting the reformers and for killing all reform. The effect of caste on the ethics of the Hindus is simply deplorable. Caste has killed public spirit. Caste has destroyed the sense of public charity. Caste has made public opinion impossible. A Hindu's public is his caste. His responsibility is only to his caste. His loyalty is restricted only to his caste. Virtue has become caste-ridden, and morality has become caste-bound. There is no sympathy for the deserving. There is no appreciation of the meritorious. There is no charity to the needy. Suffering as such calls for no response. There is charity, but it begins with the caste and ends with the caste. There is sympathy, but not for men of other castes. Would a Hindu acknowledge and follow the leadership of a great and good man? The case of a Mahatma apart, the answer must be that he will follow a leader if he is a man of his caste. A Brahmin will follow a leader only if he is a Brahmin, a Kayastha if he is a Kayastha, and so on. The capacity to appreciate merits in a man, apart from his caste, does not exist in a Hindu. There is appreciation of virtue, but only when the man is a fellow caste-man. The whole morality is as bad as tribal morality. My caste-man, right or wrong; my caste-man, good or bad. It is not a case of standing by virtue or not standing by vice. It is a case of standing by, or not standing by, the caste. Have not Hindus committed treason against their country in the interests of their caste? I would not be surprized if some of you have grown weary listening to this tiresome tale of the sad effects which caste has produced. There is nothing new in it. I will therefore turn to the constructive side of the problem. What is your ideal society if you do not want caste, is a question that is bound to be asked of you. If you ask me, my ideal would be a society based on Liberty, Equality, and Fraternity. And why not? What objection can there be to Fraternity? I cannot imagine any. An ideal society should be mobile, should be full of channels for conveying a change taking place in one part to other parts. In an ideal society there should be many interests consciously communicated and shared. There should be varied and free points of contact with other modes of association. In other words there must be social endosmosis. This is fraternity, which is only another name for democracy. Democracy is not merely a form of government. It is primarily a mode of associated living, of conjoint communicated experience. It is essentially an attitude of respect and reverence towards one's fellow men. Any objection to Liberty? Few object to liberty in the sense of a right to free movement, in the sense of a right to life and limb. There is no objection to liberty in the sense of a right to property, tools, and materials, as being necessary for earning a living, to keep the body in a  due state of health. Why not allow a person the liberty to benefit from an effective and competent use of a person's powers? The supporters of Caste who would allow liberty in the sense of a right to life, limb, and property, would not readily consent to liberty in this sense, inasmuch as it involves liberty to choose one's profession. But to object to this kind of liberty is to perpetuate slavery. For slavery does not merely mean a legalized form of subjection. It means a state of society in which some men are forced to accept from others the purposes which control their conduct. This condition obtains even where there is no slavery in the legal sense. It is found where, as in the Caste System, some persons are compelled to carry on certain prescribed callings which are not of their choice. Any objection to equality? This has obviously been the most contentious part of the slogan of the French Revolution. The objections to equality may be sound, and one may have to admit that all men are not equal. But what of that? Equality may be a fiction, but nonetheless one must accept it as the governing principle. A man's power is dependent upon (1) physical heredity; (2) social inheritance or endowment in the form of parental care, education, accumulation of scientific knowledge, everything which enables him to be more efficient than the savage; and finally, (3) on his own efforts. In all these three respects men are undoubtedly unequal. But the question is, shall we treat them as unequal because they are unequal? This is a question which the opponents of equality must answer. From the standpoint of the individualist, it may be just to treat men unequally so far as their efforts are unequal. It may be desirable to give as much incentive as possible to the full development of everyone's powers. But what would happen if men were treated as unequally as they are unequal in the first two respects? It is obvious that those individuals also in whose favour there is birth, education, family name, business connections, and inherited wealth, would be selected in the race. But selection under such circumstances would not be a selection of the able. It would be the selection of the privileged. The reason, therefore, which requires that in the third respect we should treat men unequally, demands that in the first two respects we should treat men as equally as possible. On the other hand, it can be urged that if it is good for the social body to get the most out of its members, it can get the most out of them only by making them equal as far as possible at the very start of the race. That is one reason why we cannot escape equality. But there is another reason why we must accept equality. A statesman is concerned with vast numbers of people. He has neither the time nor the knowledge to draw fine distinctions and to treat each one equitably, i.e. according to need or according to capacity. However desirable or reasonable an equitable treatment of men may be, humanity is not capable of assortment and classification. The statesman, therefore, must follow some rough and ready rule, and that rough and ready rule is to treat all men alike, not because they are alike but because classification and assortment is impossible. The doctrine of equality is glaringly fallacious but, taking all in all, it is the only way a statesman can proceed in politics—which is a severely practical affair and which demands a severely practical test._Previous musing: [THE MISSION OF LIBERTARIANISM](https://indianliberals.in/content/the-mission-of-libertarianism/)_ --- ## [Musing] {:en}भारतातील उदारमतवादाचे पुरस्कर्ते गोपाळ कृष्ण गोखले{:}{:mr}भारतातील उदारमतवादाचे पुरस्कर्ते गोपाळ कृष्ण गोखले {:} URL: https://indianliberals.in/musings/bhartaateel-udaarmatavadache-puraskrute-gopal-krishna-gokhale/ ### Body 'नामदार', 'भारताचा हिरा' अशा विविध उपाधी मिळालेल्या गोपाळ कृष्ण गोखले यांचा जन्म १८६६ साली गुहागर मधील कोतलुकमध्ये झाला. लहानपणापासून अभ्यासात अतिशय हुशार आणि इंग्रिजीवर विलक्षण प्रभुत्व. कोल्हापूर, पुढे पुण्यातील डेक्कन कॉलेज आणि मग मुंबई येथील एल्फिन्स्टन कॉलेजमधून त्यांनी शिक्षण घेतलं. काही काळ मुलांच्या शिकवण्या घेऊन त्यांनी शिक्षणासाठी घेतलेलं कर्ज फेडलं. न्यायमूर्ती महादेव गोविंद रानडे यांचा प्रभाव गोखल्यांवर पडला. रानड्यांचे मानसपुत्र म्हणूनही गोखल्यांना ओळखलं जाई. गणिताचे प्राध्यापक म्हणून कार्यरत असताना गोखल्यांना नोकरी, कुटुंब, 'आपण बरे, आपले काम बरे' हा विचार पटला नाही. ज्या देशात जन्म मिळाला आहे त्या देशासाठी आपण काहीतरी करायला हवं ही भावना कायम होती.  न्यायमूर्ती रानडे, टिळक, आगरकर, दादाभाई नवरोजी अशा समकालीन विचारवंतांसोबतच जेरेमी बेंथम, जॉन स्टुअर्ट मिल, एडमंड बर्क अशा पाश्चात्य विचारवंतांचा प्रभाव गोखल्यांच्या विचारांतून दिसत असे. पुढे काँग्रेस मध्ये ते 'मवाळवादी' या गटाचा महत्वाचा भाग होते. १९०५ साली, काँग्रेसचे अध्यक्ष असताना त्यांनी सर्व्हन्टस ऑफ इंडिया सोसायटीची स्थापना केली. भारतातील तत्कालीन शिक्षण व्यवस्था ही भारतीयांसाठी पुरेशी नाही या विचाराने ही संस्था अस्तित्वात आली. राजकीय शिक्षणाशिवाय राजकीय बदल होऊ शकत नाही यावर त्यांचा ठाम विश्वास होता. या संस्थेच्या कार्याअंतर्गत ग्रंथालयं उभारणं, शाळा स्थापन करणं आणि कामगारांसाठी रात्री शिकवण्या घेणं असे विविध उपक्रम राबवले गेले. याच बरोबर, युवकांनी सनदशीर पद्धतीने राष्ट्रीय हितासाठी झटावे, लोकांमध्ये जागृती निर्माण करावी हा या संस्थेचा नेम होता.  ‘सनदशीर’ हा शब्द मवाळवाद्यांची ओळख झाली होती. 'प्रेयर्स अँड पेटिशन्स' ची पद्धत गोखल्यांनी अवलंबली होती. त्यांच्या धारणांमध्ये उठाव, संप, असहकार चळवळ बसत नसे. गोखल्यांनी इंग्रजांपर्यंत आपल्या तक्रारी पोहचवणे, मवाळ गटाच्या अपेक्षा आणि मागण्या सांगणे, शिफारशी मांडणे आणि संवाद साधणे हा मार्ग आयुष्यभर अवलंबला.  याचं एक उत्तम उदाहरण म्हणजे - १८९७ साली वेलबी कमिशन समोर गोखल्यांनी भारतातील आर्थिक दुःस्थिती, त्याची कारणं आणि त्यावरील शिफारशी अतिशय प्रभावी पद्धतीने मांडल्या. याचा परिणाम म्हणजे ब्रिटिशांनी भारतावर लादलेलं आर्थिक ओझं काही प्रमाणात कमी केलं. ब्रिटिशांनी जो उदारमतवाद ब्रिटनमध्ये पाळला होता, तोच त्यांनी भारतात लागू करावा आणि पाळावा अशी गोखल्यांची अपेक्षा आणि मागणी होती. ब्रिटिशांचं बोट धरून भारताला उदारमतवादाकडे नेणं हा काँग्रेस मधील मवाळ मंडळींचा मानस होता -      दलितांचे, मागासवर्गीयांचे सशक्तीकरण, हिंदू-मुसलमान एकता या स्तंभांवर सशक्त भारत उभा राहेल यावर काँग्रेस मधल्या सगळ्यांचं एकमत होतं. मात्र, ब्रिटिशांचा हस्तक्षेप असावा की नाही, असेल तर तो कुठे आणि किती असावा आणि सर्वात महत्वाचं म्हणजे भारताच्या विकासासाठी काय मार्ग अवलंबले जावेत यावर काँग्रेस मध्ये वादंग होऊन, १९०७ साली सुरत मधील अधिवेशनात काँग्रेस दुभंगली. भारतीयांचे दमन हेच ज्या राज्यकर्त्यांचे ध्येय आहे त्या राज्यकर्त्यांशी संवाद साधून भारतीयांना अधिकार, स्वातंत्र्य कसे मिळणार हा अतिशय महत्वाचा प्रश्न मवाळ गटात नसलेल्या नेत्यांचा होता. जे अधिकार ब्रिटिश नागरिकांना ब्रिटन मध्ये आहेत ते अधिकार भारतीयांना भारतात नाहीत; आणि भारतीयांना ते समान अधिकार कधीही मिळू नयेत यासाठी ब्रिटिश अधिकारी कार्यरत असताना, 'प्रेयर्स अँड पेटिशन्स' चा काय उपयोग या प्रश्नाला अनेकांकडे उत्तर नव्हतं. वर्णद्वेष आणि अंकुश नसलेल्या सत्तेमुळे वाईसरॉय लॉर्ड कर्झन उन्मत्त झाला होता. १९०५ साली भारतीयांच्या विरोधाला न जुमानता लॉर्ड कर्झनने बंगालच्या फाळणीचा प्रस्ताव मांडला. अशा परिस्थितीत ब्रिटिशांची सत्ता भारतीयांच्या हिताची ठरू शकते हे भारतीयांना पटवून देणं मवाळ गटाला कठीण झालं. गायत्री पगडी यांच्या लोकमान्य टिळकांवरील पुस्तकातल्या एका उल्लेखाप्रमाणे जनसामान्यांनी भारताच्या लढ्यात पडू नये; काही निवडक बुद्धीजीवींनी भारत आणि ब्रिटन मधला दुवा बनावे असे गोखल्यांचं मत होतं  . या उलट टिळक, ऑरोबिंदो, लाला लाजपत राय यांनी भारताच्या लढ्यात सामान्य माणसांना सामील करून घेणं आणि ब्रिटिशांपेक्षा भारतीय जनतेशी संवाद साधणे यावर जोर दिला.  गोखल्यांची इच्छा होती की काँग्रेसमध्ये पडलेली फूट दूर व्हावी आणि साऱ्या गटांनी एकत्र यावे. ही इच्छा मात्र त्यांच्या जीवनकाळात पूर्ण होऊ शकली नाही. १९१५ मध्ये वयाच्या अवघ्या ४८ व्या वर्षी गोखल्यांचे निधन झाले. तदनंतर १९१६ सालच्या लखनौ अधिवेशनात काँग्रेसमधले सगळे गट एकत्र आले. गोखल्यांनी खऱ्या अर्थाने उदारमतवाद अंगीकारला होता. राजकीय विरोधकांना योग्य तो आदर देत त्यांनी आपले विचार मांडले. कितीही वैचारिक मतभेद असले तरी प्रत्येकाला त्याचे विचार मांडण्याचा पूर्ण अधिकार आहे या तत्वावर त्यांनी आयुष्यभर विश्वास ठेवला. आणि काँग्रेस अध्यक्ष असतानाही सत्तेचा गैरवापर केला नाही. तत्वनिष्ठता आणि आपण समाजासाठी काहीतरी करायला हवं हा विचार आणि तसाच आचार हे गोखल्यांच्या व्यक्तिमत्वाचे ठळक पैलू होते. त्यांच्या विरोधकांनाही त्यांच्याविषयी नितांत आदर आणि प्रेम होतं. गोखल्यांच्या मृत्यूनंतर जहाल गटाचे नेते असलेल्या टिळकांनी केसरीतून उदारमतवादाचे अग्रणी पुढारी असलेल्या गोखल्यांना आदरांजली अर्पण केली.  [](https://indianliberals.in/wp-content/uploads/2023/09/IMG_4159_Original.jpg) **Avanti Lele** Avanti Lele is a Minoo Masani Liberal Fellow. She is pursuing her PhD in English Literature from Lancaster University. She has worked as a lecturer of English Literature and as a Spanish language instructor. Her research interests include but are not limited to women's writing, liberal feminism, postcolonial studies, indigeneity. --- ## [Musing] B.R. Shenoy on Economic Growth with Social Justice URL: https://indianliberals.in/musings/b-r-shenoy-on-economic-growth-with-social-justice/ ### Body _The late Prof. B. R. Shenoy was an eminent economist. This __paper, written in August 1977, a few months prior to his death, __is of relevance today when there is considerable rethinking on __need for a new economic policy. The paper was republished as a booklet by the Forum of Free Enterprise in March 1980. _A free society is so called because its citizens are free individuals, free in the sense of "independence of the arbitrary will of another". Individuals in a free society function, in the economic sphere, under the guidelines of the doctrine of pragmatism, pursuing the line of success and discarding the path of failures, success and failure being assessed by their own subjective criteria viewed functionally, a free society may also be termed, therefore, as a pragmatic society. As the terminal aim of the individual's activity is the maximum satisfaction of his consumption needs, and he is unfettered in this as in other matters, a free society is described too as a society of consumer sovereignty. The principal economic constituents of a free society may be briefly stated : (i) First and foremost the economic affairs of a free society are controlled, directed and governed by truly sovereign consumers. Therefore, by definition as it were, all economic activity other than those delegated by consumers to the government - which they do in their capacity as sovereign voters - have, for their end objective, maximum consumer satisfaction. (ii) Consumer control and direction of the economy is effected through a price-regulated market mechanism. Consumers register, in the shopping centres or other markets, their votes regarding their requirements continually; and their preferences get reflected in commodity price changes and in turnovers. (iii) Traders interpret these price and turn-over signals and direct producers to adjust their production programmes to match the consumer needs, thus recorded. (iv) Available investment resources, i.e. domestic savings and inflows of foreign savings, get shifted, through such activity of traders and producers, and via the capital market - which is an integral part of the overall price-regulated market mechanism - or otherwise, into production channels which meet consumer preferences. (v) In a modern society - whether it is free, communist or socialist - production involves time, and the production process has, for technological reasons, to commence in anticipation and in advance of demand.The forward market, which is another integral part of the overall price-regulated market mechanism, helps such anticipatory production. The forward market may reduce to a minimum, or eliminate resource wastages from production errors, by projecting the changing market situations. Operationally, the first link in this chain of consumer-directed economic system is, it will be noted, trade which interprets and transmits to producers consumer decisions.That trade is the spearhead of all economic development emerges graphically when we imagine a community cut off from the rest of the country, of which it had been traditionally an integral part. Production for the national market will then soon be replaced by production to meet the limited needs of a small community; and its people are consequently destined to slip down into poverty and, possibly, into more or less primitive way of life, depending on the size of the isolated community's market. A pre-condition for the full and efficient functioning of a free society is, therefore, the absence of barriers to internal and external trade. Logic and experience have shown that this freedom will permit continued prosperity for the economy - the result of the use to capacity of its specialised talents through migration to the national economy with the world markets, the demands of which - unlike the demands of the limited national markets - may not be easily satiated. Secondly, the full and efficient functioning of a free society demands recognition of the institution of private property, not only in respect of a family house, the durable consumer goods in it and a car, but also in respect of capital assets, the means of production. In a free society, became of the discipline of a most ruthless consumer, the management, under the duress of survival, has to keep a continual watch over cost, quality and turnover. This calls for perpetual flexibility of decisions. Consumer discipline operates, in the case of the larger corporations, through its impact on the stock-market quotations for the scripts of the corporations. It is just not practical to achieve the requisite decision flexibilities under social ownership - i.e. the ownership of no one in particular - of the means of production. Experience has shown that the magic of ownership is among the most powerful forces making for progress. Ludwig von Mises observes in his book The Free and, Prosperous Commonwealth : "The foundation of any and every civilization, including our own, is private ownership of the means of production. Whoever wishes to criticize modern civilization, therefore, begins with private property. It is blamed for everything that does not please the critic, especially those evils that have their origin in the fact that private property has been hampered and restrained in various respects so that its full social potentialities cannot be realized." The power of the magic of ownership of the means of production is nowhere more convincingly demonstrated and highlighted than in Soviet agriculture. In 1964, the output of 3% of the land under collective farms, the private plots allotted to their workers, accounted for no less than 1/3 of the gross farm output of USSR and of the Soviet livestock production. (W. N. Loucks, Comparative Economic Systems, See Chap. 25, on "Soviet Agriculture"). Russia's dependence on the capitalist world for its food and other agricultural needs - this dependence is, incidentally, rather amazing as about 1/3 of the Soviet labour force is engaged in, and an equal proportion of the total population lives on, agriculture - would have assumed disastrous dimensions, if Communist ideologues were to prevail and abolish completely private ownership of the means of production in Soviet agriculture. The third pre-condition for the full success of the consumer directed economic system is the economic freedom of the individual, particularly in respect of : (a) the distribution of his income between consumption and saving; (b) the choice of consumption and the power to direct entrepreneurs, through a price-regulated market mechanism, to import, or to fabricate at home, the commodities of his choice;  (c) the distribution of his savings among the several alternatives; and (d) the choice of his occupation. These four freedoms constitute fundamental economic freedoms of free citizens. When these freedoms are infringed, the charms of mundane life correspondingly diminish. Quite obviously, a consumer controlled system cannot come into being, nor function, without freedoms and are essential to ensure that the material and the human resources of production get drawn into channels where their output is the highest. These latter freedoms will, through continual resource shifts, minimise or eliminate less effective resource deployments and thus make for the maximisation of the national product from a given quantum of resources. Under consumer sovereignty, four desiderata are integral to the functioning of the system. First, to seek consumer patronage, entrepreneurs would strive to reduce costs and improve quality. With consumer approval and appreciation of such effort, high-cost and low-quality products would continually tend to be replaced, through resource shifts and technological progress, by low-cost and high-quality products; and this will continually tend to lift up production,and hence employment, income and the level of living. Secondly, rapid expansion of employment is built into the economic system where everybody's concern is to meet the demands - which, it may be noted, are most exacting, in addition to being ruthless - of the consumer. The expansion of employment at current, or rising wage rates is a function, not of investment, as Indian experience has shown; nor of stepping down the technology of production, which is currently in use. It is solely a function of the expansion of overall production. Since consumer sovereignty makes for rapidity of growth of the national product, it may, therefore, liquidate unemployment with corresponding rapidity. To illustrate the working of this built-in urge to expand employment: in Japan, low wages, the heavy pressure of population on land, 291 persons per square kilometer, -- the average land holding in the country, as a result of this population pressure, is but 1.01 hectares - the scarcity and high cost of capital, induced farmers to adopt labour-intensive methods of cultivation in agriculture. Japanese agricultural output is well above the world average. The Japanese output of paddy, per hectare, in 1974 was 5.84 tonnes, as against the world average of 2.36 tonnes. Japanese agriculture employs 2,031 workers per 1,000 hectares of cultivated land. In USA, on the other hand, capital is less scarce, the average holding is 157.6 hectares, population density is but 22 per square kilometer; and the country adopted capital-intensive methods of cultivation, the labour employed per 1,000 hectares of cultivated land being a mere 17. These differing systems of cultivation were adopted, not under the direction of a planning commission, but by independent farmers in free economies, the course and destinies of which are, on the whole, determined by sovereign consumers. By contrast, the Russian Gosplan copied the American method of capital-intensive cultivation, notwithstanding low wages; with none too complimentary results. Thirdly, under full consumer sovereignty, there is no need, nor room for monopolies in production, distribution, imports or exports; and incomes of all individuals - wages, interest, rent and profits - would correspond to their respective contributions to the national product. Such a situation permits no windfalls. Hence, none can appropriate someone else's earnings, i.e. there can be no social injustice. Social injustice, on the other hand, is inevitable under socialist economic systems, which abound in monopolies, privileges and subsidies; and hence bring to privileged individuals and groups unearned and also unmerited incomes, at the expense of the rest of the community. Fourthly, income contrasts tend to decline as economic development progresses, under consumer sovereignty. This is so not merely because of the absence of social injustice, but also as a consequence of, on the one hand, a natural decline in interest, rent and profits, the earnings of the economic elite, and a natural increase, on the other, of wages and salaries. As a free economy progresses, the proportion of wages and salaries to the national product tends to increase and the proportion of interest, rent and profits tends to decline. In Japan, wages and salaries rose continually from 41.3% of GDP, in 1960, to 50.8%, in 1974. In West Germany, this percentage rose from 46.9 to 54.7. By contrast, in Socialist India, this percentage fluctuated within a narrow range and was, in 1974-75, 28.2 or lower than in 1960-61, 29.9. The growing prosperity of the masses of the people in free societies is evidenced by the overwhelming proportion of economic activity being directed to the turning out of articles of mass consumption and by the vast multiplicity of departmental stores, safeways, shopping centres and the endless series of retail shops which purvey these products. Many of these products would be, if then available, matters for envy among the noblemen and the elite of the 18th century. The shoppers that crowd these places are not plutocrats but farm and factory workers and salaried people. Except in Communist countries, cars are no longer a luxury transport, accessible only to the favoured top crust of the community. In a communist society, none of the economic constituents of a free economy hold true. The state determines the needs of consumers, arranges the distribution of goods  and services and allocates resources among alternative uses. Individuals do not enjoy fundamental economic rights; and forward markets do not exist. It is much more relevant to review socialism as we have been practising it during the past three decades. Under our socialist policies, consumer control and direction of the economy is hindered, among other ways, by exchange control, by import and export restrictions; by the control of capital issues; by the industrial policy resolution, 1956; by the allocation of investment resources, including capital inflows from abroad, by a planning commission; by nationalisation of numerous undertakings; by state trading; by state financial agencies; by Reserve Bank control of credit; by a multiplicity of economic legislation both by the Centre and the States; by the creation of a series of monopolies of varying degrees; by numerous subsidies and privileges:and, until last April by internal barriers to the movement of rabi foodgrains. As a result of the working of these measures, we may identify four sectors in the economy, a public sector, which receives priority attention, an industrial sector, which is policy favoured, an agricultural sector, which is harassed and neglected, though it receives much lip sympathy, and a corrupt sector. The industrial sector is inherently unviable, viability being assessed by reference to cost-quality standard of the output, its competitive ability in world markets, and this sector's contribution to employment and income. Exceptions, if any, apart, there is not a single major industrial product which is not subsidised - more generally, this subsidy may be exceedingly heavy - by the consumer in the home market, and the export of which is not subsidised by the state in the markets abroad. And yet, this sector has gallopped ahead, through deliberate policy inducements and by preferential allocation of resources. Its contribution to employment has been most disappointing, in relation to the resources employed. Industrial production (manufacturing) accounted for but 16.3% of the national product, in 1975-76, having risen from 12.9% two decades ago, in 1955-56. The public sector is the most pampered sector. Taking an overall view, objectively and realistically - leaving alone doctrinaire dogma - public sector undertakings in India have, by no means, been a striking success. This is but inevitable when management and stakes are divorced. Even without including the gaps between landed costs and market prices of the import goods acquired against foreign aid, the public sector absorbs, from the data in the National Accounts Statistics, about 55% of the total available investment re- sources, though the contribution of this sector to NNP, was in 1975-76, but 17%. Save and except when a powerful and selfless individual may be at the helm of affairs, is assisted by a team of like mettle, and this body of rare people is free from interference by interested parties, operating with the aid of politicians, public sector undertakings may be more or less milch-cows of those who may gain control over them. The illicit, though not always illegal, gains which they may gather are - being cases of resource wastages - a drag on the performance of these undertakings and a heavy debit, because of the magnitudes involved, on the national product. The nature of the operation of these factors in the nationalised coal industry is well brought out by Mr. B. P. Pai in his book, _Save Coal India, Vol. I,_ published in 1977. The agricultural sector is as inherently viable as the industrial sector is unviable, this viability being assessed by the same yardsticks cited above. No agricultural product receives any subsidy from the consumer in the home market, nor any subsidy from the state on exports. Agricultural exports, which are able to stand on their own in world markets, account for about 40% of total exports. The Rupee prices of many agricultural items, e.g. rice, coffee, and Bengal desi cotton, are way lower than international prices, and their exports are banned, restricted or are subjected to penalty export duties. In desperation, some agricultural produce, like rice, is smuggled out! For all its viability, agriculture however, is the least cared for of the three sectors. With the public sector and the industrial sector appropriating the lion's share of the resources, agriculture is starved of capital, though it accounts for about one-half of the national product and 72% of the population lives on it. The corrupt-sector is fed by the public sector, by exchange control, by import restrictions, by licensing policies and, by the complex network of economic legislation and administrative measures, which as noted earlier, have created numerous. monopolies' and other privileges, that yield windfalls and hence give rise to corrupt payments. Until April 1977, rabi food zones, across which foodgrain movements were not permissible except under permits, were amongthe major sources of corruption and the generation of black money. Mr. Y. B. Chavan, when he was Finance Minister, stated that black-market transactions were probably as large, in the aggregate, as those in white money. Black incomes being, generally cases of investment funds converted into private incomes, through corrupt payments, they turn back the hand of development. The National Accounts Statistics, issued by Central Statistical Organisation, help to present the ultimate end product of these measures. The per capita income of the agricultural population which constitutes 72% of the total, declined from a near-peak of Rs. 219.20 in 1960-61 to Rs. 195.50 in 1976-77, or Rs. 2.30 below its level in 1950~51, on the eve of the adoption of socialist policy measures. During the census decade, 1961-71, agricultural workers,(the lowest rung of the economic ladder, rose by 75%; the number of cultivators fell by 16% and the population below the poverty-line moved up from 39% to 45% of the total population. The income of the rest of the population, mostly the urban people, on the other hand, more than doubled from Rs. 400 in 1950-51 to Rs. 813 in 1976-77. In these statistics is writ large the neglect of agriculture and of the interests of the masses, the pampering of industry and of the urban elite, and the fostering of corruption. There is no remedy to these consequences other than to extinguish the corrupt sector, and divert resources, in a big way, from the public sector and the industrial sector into the agricultural sector. Our analysis demonstrates that the most effective and the most appropriate method of achieving this is to make a right-about turn and move rapidly in the direction of the Gandhian concept of the role of the state in economic affairs. This involves the release of the consumer from the socialist chains and taking the other consequential policy U-turns, more particularly: (i) channelising more funds into the agricultural sector both under public and private investments: (ii) removing the barriers to internal and external trade; (iii) revising the industrial policy resolution, 1956; ( iv) abolishing industrial licensing and the system of subsidies; (v) scaling down drastically overall public sector outlays even withdrawing part of public sector investments; (vi) limiting state activity to its natural and proper duties; (vii) removing exchange control, and adopting a fully floating Rupee; (viii) reducing taxation and balancing the budget at a vastly lower level of expenditure and investment than now; and ix) reviewing all economic legislation and administrative measures with a view to their abandonment or for restructuring them to match the needs of a free economy. Experience has shown, again and again, that no country which has been directed, in its economic affairs, by the collective counsel of sovereign consumers, has come to grief. The dividends harvested have invariably been of the "miracle" order, both in respect of growth and social injustice. In the contemporary world, West Germany (under Professor Ludwig Erhard), Spain, Japan and the several mini-Japans in Asia are outstanding examples. On the other hand, no country which has fallen victim to any significant policy-mix of socialism, - which has generally been under the guidance of self-seeking businessmen, industrialists and administrators, and aided by deluded ideologues - has escaped chaos and overall semi-stagnation or decay. India, Burma, Sri Lanka. Pakistan and Bangladesh are classic examples. The sovereignty of the consumer, on which hinges rapid economic growth with social justice, and the sovereignty of the voter, the foundation of all democratic institutions, are but different aspects of a free citizen. We may have an ideally free society when the two sovereignties go together. --- ## [Musing] A Blueprint for Eradication of Poverty - Dr BP Godrej URL: https://indianliberals.in/musings/blueprint-for-eradication-of-poverty-bp-godrej-1980/ ### Body _Produced below is an excerpt from an essay titled “A Blueprint for Eradication of Poverty” by Dr B.P. Godrej, published by the Forum of Free Enterprise in December 1980. Through the essay, Dr Godrej critiques the public sector’s inefficiencies in addressing poverty and unemployment. He highlights the widespread malnutrition and lack of economic progress, advocating for systemic reforms to improve food security, productivity, and overall well-being. This piece remains relevant as it addresses the persistent issues of hunger, poverty, and economic mismanagement, challenges that India continues to face even today._ The biggest problems facing India today are poverty and unemployment. Eight months ago, a new government was formed in New Delhi. People's hopes were aroused but for a short time only. Already, there is strong evidence of manifestations of frustration. As no other large country in the world faces the twin problems of poverty and unemployment of the magnitude as India, the new government's responsibility is very grave. It would do well to bear in mind that ultimately economics rules politics. It is recognized in some quarters that even with half of India's population, everything else remaining the same, the difficulties in transforming India into a welfare state are immense. When India became free on the 15th of August 1947, a tremendous euphoria was generated. It was considered to be the dawn. But it is clear as daylight now that the economic dawn is nowhere in sight. After the end of the Second World War, the common man's lot, especially in Western Europe, improved vastly and rapidly. He was better fed, clothed, and housed than ever before. In developed countries, economic growth and social welfare proceeded side by side. This feature gained universal acceptance. The proportion of the national income spent by the state in democratic capitalist countries rose sharply, and thus gave rise to the concomitant growth of the public sector. Indian thinking was naturally influenced by this. In a number of capitalist countries, up to one-half of the national income was spent on the public sector. The running of the public sector was something entirely new for Indians. Take, for example, the case of the railways. In 1947, India had one of the biggest networks, and several joint-stock companies were owned and run by Britishers. In the financial and engineering management, Indians had no part and no experience. Apart from that, the concept of the predominance of the public sector was adopted for ideological reasons without checking the likelihood of its success under the then prevailing Indian conditions. The question that naturally arises is whether Parliament was enamoured of this idea even before considering whether it was in a position to make a success of it. Whether the government sector of industry was conceived out of envy, as a prominent and responsible industrialist once said in a public lecture, is worth a doctoral dissertation on the part of an enthusiastic youngster. It is pertinent to quote Collins in this context: "When I was young I thought socialism was the mathematics of justice. Now I realize it is only the arithmetic of envy." Let us now review what characterises India today. More than three decades after Independence, half the people are below the poverty line. Most of the other half are also poor. And the poverty line is defined as the point below which a worker cannot afford to buy enough food for calories to enable him to perform a full day's work. By this definition, India figured in 1968 that 38% of its people were below the poverty line. In 1978, according to official surveys, 50% of the population fell below this line. The following extract is from the _MID-DAY_ of August 5, 1980: **_356 million live below the poverty line_** ****The Minister for Planning also tells us that: **_“In India, an adult male doing heavy physical labour for more than 12 hours a day gets less than 2,000 calories from his food!”_** Those who get less than 2,400 calories a day in rural areas or 2,100 calories a day in urban areas can be considered among that 356 million. What does less than 2,400 calories a day mean? A study done in Maharashtra some years ago shows that "less than 2,400" can be as little as 940 calories (and people have wondered how someone who consumed so little could be alive to answer the interviewer's questions). What happens when someone consumes calories below the minimum daily requirement? The Minister for Planning did not go into this question nor did members of the Rajya Sabha think of asking him this question. However, there is information from elsewhere about the effects of malnutrition. Someone found that among 500 middle-class children only one had an IQ below 80, but among 500 poor children who suffered serious protein-calorie malnutrition in their first months, some 62% had IQs below 80. There is another way of looking at calorie intake. A daily intake of some 2,250 calories is appropriate, according to dieticians, for an eight-year-old child in a Western country. In India, an adult male doing heavy physical labour in the fields for more than 12 hours a day gets less than 2,000 calories from his food. The human effects of this have also been described: “Chronically hungry people are physically less developed and mentally less alert than people who eat enough.” In this connection, we would be wise to heed Bernard Shaw's warning: “Those who minister to poverty and disease are accomplices in the two worst of all crimes.” Read the complete text [here](https://indianliberals.in/forum-of-free-enterprise/a-blueprint-for-eradication-of-poverty-dr-b-p-godrej-december-15-1980.pdf). type=content&p=8654). Needs editorial review._ --- ## [Musing] Bureaucracy and the Liberal Administrator URL: https://indianliberals.in/musings/bureaucracy-liberal-administrator/ ### Body _Published by the Centre for Civil Society, a public policy think tank based out of New Delhi, _this excerpt has been borrowed from Sauvik Chakraverti's essay titled "New Public Management: Escape from Babudom". The essay builds a case for new public management as an escape from the statist clutches of Indian bureaucracy – starting with the attributes and importance of a liberal administrator, and the essence of bureaucracy – as written by Max Weber and Ludwig Von Mises.__ _Sauvik Chakraverti (1956-2014) was an award-winning columnist and author whose books, monographs and columns advanced the cause of libertarian movement in India. Sauvik had studied governance at LSE and was deeply influenced by the ideas of FA Hayek._ ### **What is a Liberal Administrator?** A liberal is one who believes wholeheartedly that the greatest political value is freedom: **a liberal administrator, therefore, does not wish to infringe the freedoms of the people with unnecessary rules, regulations, and red tape.** His laissez faire attitude to the people whose common affairs he is to administer comes from a profound realisation of the fact that the people do not really need him: in fact, they can get along much better without him. Having understood this, the liberal administrator tries to make himself useful by going after the bad guys, the frauds, cheats, murderers, and rapists, and leaving the good guys, the businessmen who create wealth, alone. The notion that there is a natural 'spontaneous' order in society is easily proved by the fact that there is order on the streets and in the markets of London, Paris, Tokyo and Hong Kong or Calcutta, Bombay and Delhi, not because the police is there enforcing order, but because people are orderly on their own. Trade is a positive sum game--both sides win--and man has being playing this positive sum game from time immemorial. This profound truth--the very opposite of Thomas Hobbes' dark conceptions of a 'state of nature'--is something only the liberal administrator appreciates. Indeed, it may be said that the state of nature--what Adam Smith called 'natural liberty'--is the ideal of the liberal administrator. The liberal administrator knows and respects the fact that the institution of civil society which makes 'natural liberty' so harmonious is the market. **He keeps his hands away from the market.** He does not seek to compete with businessmen, and so does not set up factories and shops with government money. He spends tax money on those things people cannot build on their own, like roads, parks, clocktowers, libraries and so on. On the practical side, in the cities and the towns falling under his jurisdiction, the liberal administrator always ensures that the physical markets on the ground are clean and accessible. He worships his city's central business district. At the opposite end, we have the statist 'control freak' administrator: the one who cannot bear to see society left alone and wants to feel important. He wants the people to line up and queue before him, he wants to check documents and papers, and he wants to enforce complex rules and regulations. Hong Kong has had liberal administrators always (and we discuss John Cowptherwaite later in this essay), and see how it has prospered, to levels of per capita income far higher than its erstwhile colonial master, Britain; and India has had control freaks for 50 years, and see how she has suffered. Control freaks in India must wake up to the fact that their administrative philosophy is all wrong, and it leads to a 'rent seeking society.' So here's to more liberal administrators in India. ### **What is Bureaucracy?** The German philosopher Max Weber laid great store by bureaucracy. He considered it to be the civilian equivalent of a disciplined army, performing the duties of the state. According to Weber, bureaucracy has four characteristic features: - **Hierarchy**: that is, a ladder; a command-and-control structure. - **Impersonality**: or impartiality. The bureaucrat takes an unbiased decision based on rules. - **Career**: it was a life, like joining the priesthood. - **Expertise**: that is, administration based on knowledge. Such an organisation would provide the state what Weber called '**rational-legal legitimacy**.' When the servants of the state act with reason and law--'rational-legal'--the structure of domination, the state, acquires 'legitimacy' in the eyes of the subject populace. At the outset, let us realise that there are some problems with this organisational structure that Weber did not think of. For example, flat organisations are increasingly preferred over hierarchy in management. Strict hierarchies with promotion based on seniority lead to the 'rule of the aged,' such organisations are graveyards for talented youth. As Ludwig von Mises put it: It is evident that youth is the first victim of the trend toward bureaucratisation. The young men are deprived of any opportunity to shape their own fate. For them there is no chance left. They are, in fact, 'lost generations' for they lack the most precious right of every rising generation, the right to contribute something new to the old inventory of civilisation... What are young people to whom nothing is left to change and to improve? Whose only prospect is to start at the lowest rung of the bureaucratic ladder and to climb slowly in strict observance of the rules formulated by older superiors? Seen from their viewpoint bureaucratisation means subjection of the young to the domination of the old. Similarly, a lifelong career is no longer the best option for the youth. It is essential today to switch jobs, move up the value chain, and acquire new skills. Lifelong careers and 'job security' are preferred only by the incompetent. As far as the Indian bureaucracy is concerned, they fall flat on the counts of impersonality and expertise. A recent survey by The Economist found impartiality the most important work ethic of European civil servants. In India, they are known for their bias. Even the police are biased. Further, they completely lack knowledge: from traffic management to garbage management, everything they do is marked by ignorance. Thus: - The Weberian ideal has its limitations in today's context. - Indian civil servants fall far below Weber's ideals. __You can access the complete essay [here](https://indianliberals.in/liberals/new-public-management-escape-from-babudom.pdf).__ type=content&p=8471). Needs editorial review._ --- ## [Musing] Ceilings on Landholdings - M.A. Venkata Rao URL: https://indianliberals.in/musings/ceilings-on-landholdings-m-a-venkata-rao-1958/ ### Body _The following text is an excerpt from an essay titled "_**_Ceilings on Landholdings_**_" by _**_M.A. Venkata Rao_**_, published in The Indian Libertarian on September 15, 1958. _ _M.A. Venkata Rao was a prominent thinker and commentator known for his libertarian views on economic and social policies in post-independence India. _ _In this piece, Rao critically examines the proposed land reforms in India, arguing against the imposition of landholding ceilings and highlighting the broader economic, social, and political implications of these policies. He highlights the ideological underpinnings of the reforms, warning of potential consequences for _**_property rights_**_ and _**_democratic governance_**_ in India._ This year (1958) marks a crucial turning point for agriculturalists, with significant land reform proposals under consideration in several Southern states, including Kerala, Andhra, and Mysore. These states are following the lead of Bombay, which has already introduced reforms, and Madras is poised to do the same. It is vital for the future of democracy and stable governance in India that these land reform proposals are discussed thoroughly from all perspectives—economic and social, short-term and long-term, evolutionary and revolutionary. Such discussions should involve people with relevant experience and intellectuals in general, to ensure that any decisions made have the informed consent of thoughtful citizens. After all, democracy fundamentally means governance by consent, and no issue is ever truly settled unless it is settled rightly. However, it cannot be argued with any reasonable fairness that the official proposals, as formulated in the Planning Commission's Reports I and II, are designed to secure the agreement of all affected classes. Even if the government secures a majority vote from legislators in the states for these radical and revolutionary proposals, it cannot claim to have honored the spirit of democracy, for their majority would be a coerced one, not a spontaneous one. Many legislators own no land, and those who do own land hope to retain more than the proposed ceiling, citing family size or other reasons. Many have already sold their lands and invested in urban real estate. As a result, these inequitable reforms are likely to pass amidst substantial suppressed resentment, which could add to the existing reservoir of discontent, manifesting in various anti-national uprisings. A close reading of the Planning Commission's Reports I and II reveals a clear blueprint for communist land reform—or, more accurately, revolution—toward which these proposals commit the country. Even the first report of 1951 lays down unambiguously that the goal of land reforms is village management with all lands pooled into a single operational unit and managed under the panchayat. The second report of 1956 reiterates this design, aiming to abolish intermediaries, convert tenants into owners, impose ceilings on landholdings, and distribute the reclaimed land along with uncultivated government land to landless tillers and smallholders. Compensation to owners and payments by beneficiaries would be minimal and stretched over 15 to 20 years, with payments to owners made in 20-year government bonds, similar to the treatment of zamindars. The first thing to understand is that the case of the Southern landowners is not comparable to that of the zamindars under the Permanent Settlement in the Northern States. Unlike the zamindars, who were primarily revenue collectors under state authority, many Southern landowners purchased their lands on the open market for hard cash and have paid land revenue over the years. However, the proposed reforms place both classes of landowners on the same footing, effectively liquidating their property rights for the benefit of the landless laborers and smallholders. The Kerala Bill, for example, proposes to take away surplus land above a ceiling of 15 acres of wetland or its equivalent in dry land. The Mysore and Andhra proposals set the permissible area based on income, allowing holdings that yield Rs. 5,400 per year, effectively redefining land ownership and pushing the limits of private property rights. If these proposals are implemented, they could result in a significant seizure of private property by the state, justified on humanitarian grounds. However, such actions raise serious questions about their legality, morality, and constitutional validity. Is it justifiable to dismantle a class of property holders engaged in a critical sector like food production during a time of underproduction? The Libertarian Movement strongly advocates for the rights of private property within legitimate limits such as fair competition. It recognizes the value of Henry George's land use principles, which suggest that the state should reclaim unearned capital gains from property owners through resettlement at regular intervals. However, these reforms do not align with George's ideas, as they destroy property rights of large holders only to create new property rights for smaller ones, without any justification. Read the [complete musing here](https://indianliberals.in/the-indian-libertarian/the-indian-libertarian-sept15-1958.pdf) (pages 3,4, and 8) type=content&p=8626). Needs editorial review._ --- ## [Musing] Caste System, Greatest Curse of India URL: https://indianliberals.in/musings/caste-system-curse/ ### Body It is up to the educated people to bring about an intellectual and cultural revolution in the country by propagating vigorously rational ideas about caste and exposing its evils on rational grounds and at the same time by stoutly refusing to countenance casteism and its mythical taboos and restrictions in any shape and form. This revolutionary work among the people coupled with political pressures exerted by the Government in a democratic way, on this institution of caste, will surely hasten its death. _The following article, written by DM Kulkarni, first appeared in the March 1960 issue of The Indian Libertarian. Mr Kulkarni argues that if India wants to be on the path to a free and open society, the caste system must go. He calls for the educated people to bring about an intellectual and cultural revolution in the country by propagating vigorously rational ideas about caste and exposing its evils on rational grounds, and at the same time by stoutly refusing to countenance casteism and its mythical taboos and restrictions in any shape and form._ It is generally agreed among the thinking sections of the Indian population, that the caste system in the form in which it prevails among the Hindus today, is the greatest curse of India, and has proved to be a big stumbling block in the path of India’s all-round progress. It is within the common experience of the administrators and public workers, that all welfare schemes undertaken by the Government, or social organisations, flounder on the rock of casteism which permeates inevitably, though imperceptibly, the very machinery set up to implement them. It is, therefore, that an urgent duty is cast on all well-Wishers of our country to apply themselves seriously to the task of speedily eradicating caste, which is sapping all strength out of our national life, and has become, in the words of Prof Sir Fredrick Bartlett ‘one of the hard points of Hindu culture.’ (quoted in “Caste and Race in India” by Prof Ghurye). **Evolution of Caste** All Orientalists and sociologists agree that this caste system, at least in its original, form resembled in material particulars, the class, or better still the ‘estates’ system that prevailed in both Eastern and Western countries in ancient times. Regarding Indian Social Organisation during the early Vedic period, Prof Max Muller observes in “Chips from German Workshop”: – “There is no authority in the hymns of the Vedas for the present complicated caste system, at least in its original form claimed by the Brahmins and for the degraded position of the Shudras; there is no text to show that there was any bar to eating and drinking together, inter-dining and inter-caste marriage.” He then concludes that “a Hindu who believed only in the Vedas could be much nearer to Christianity than those who follow Puranas and Tantras.” Swami Dayanand Saraswati, the great founder of the Arya Samaj movement and Vedic scholar also supports this view that caste system as such, with its extreme rigidity and exclusiveness, did not exist among the Vedic Aryans. It is thus clear that the present framework of caste-based on birth and hereditary occupations was slowly evolved in all its ugly features of irrational taboos and restrictions on food, social contacts and marriages, culminating in the most monstrous institution of untouchability, during the Puranic period ending with the 11th century A.D., when India divided vertically and horizontally by innumerable caste and sub-castes, fell an easy prey to the foreign invasions of the Northern hordes. **Major Operation Essential** This institution of caste and unlimited number of sub-castes, each one imbued with the spirit of exclusiveness, superiority and inferiority complexes, with its exploded ideas of racial and ceremonial purity, ill-conceived and unfounded prejudices with respect to other castes, have brought about a complete disruption of Indian national life and has created unnecessary strifes, dissensions in our body politic. It had made it very difficult, if not impossible, for the Indian nation as a whole, to pursue any scheme of social, economic welfare with a united effort and will and with a singleness of purpose and devotion. The code of relative moral and social behaviours, the different sets of judicial principles, framed and applied by the Hindu law-givers like Manu and others, for different caste and strata of society have led to the formation of distinct ethical and social groups, widely differing from one another in patterns of social behaviour and moral values. All this differentiation, deliberately made by the law-givers, has tended to create isolationism, cliquism as between castes, in practically all walks of life. The non-Brahmin movements in Maharashtra and in South India can all be traced to this same evil of casteism, which, despite the legislative laws of the Government in this respect, is still stalking abroad in all its strength and fury. The high and the low, the King and the peasant, the Minister and the peon, the Indian National Congress and Village Panchayat have all to humble themselves before the Almighty power of caste. It is a patent fact, that caste considerations to a great extent determine the choice of even the Congress candidates in the General Election and also in the Elections of the local bodies. Ministers and Government Administrators, even while profusely mouthing high sounding phrases and slogans of strong denunciation of caste, have perforce to attend, guide, and preside over caste functions and thus directly encourage casteism, just to be in the good books of the caste-leaders at the time of the Elections. These castes and sub-castes, whenever they have to come together, out of daily life’s urgent needs and necessities do so, not out of a healthy spirit of camaraderie and social co-operation, but ”mechanically” as Dr Ambedkar has well put it. The same writer further says in his book ”What Gandhi and Congress have done for the untouchables” that the caste system is not only “non-social but also anti-social”. And as such, this institution calls for strenuous efforts on the part of all interested in the welfare of the country, to root it out completely and not merely be satisfied with make-shift arrangements which will not solve the problems. **Economic Consequences of the Caste System** Caste, besides being an obstacle to social and national unity has now proved to be a hindrance to our economic progress as well. The rigidity of caste with its professions and trades assigned to particular castes has killed the initiative and enterprise of the people. Free mobility of labour, free choice of profession and division of labour which is quite essential for stepping-up production under modern industrial conditions are totally absent under this institution. This has resulted in a colossal waste of human talents and potentialities. Besides, caste has fostered among the higher classes, a feeling of utter contempt for manual work which is inimical to the economic progress of the people. The specious argument that the caste alone preserves hereditary skills in handicrafts and arts, falls to the ground when we see such skills being handed down from father to son even in social groups and communities which do not observe caste. The degradation of sixty millions of untouchables to a position worse than that of slaves under the caste system has entailed on our country huge economic and social loss. **On to a Free and Open Society** Thus considered from any point of view, rational, economic, social, political, and even historical caste system is the greatest evil the country is suffering from today and has therefore got to go. Too long have we tolerated it in our midst. Any more tinkering with the problem is fraught with grave danger to our very national existence. The caste-ridden society is a “closed” society, perhaps suited to the conditions of a by-gone age. But in modern “open and democratic” society which it is our aim to build up, it has no place. In the words of our Prime Minister Nehru – “there can be no equality of status and opportunity within its framework, nor can there be political democracy and much less economic democracy. Between these two conceptions, conflict is inherent. Only one of them can survive” (J. Nehru, ‘Discovery of India’). It is, therefore, up to the educated people to bring about an intellectual and cultural revolution in the country by propagating vigorously rational ideas about caste and exposing its evils on rational grounds and at the same time by stoutly refusing to countenance casteism and its mythical taboos and restrictions in any shape and form. This revolutionary work among the people coupled with political pressures exerted by the Government in a democratic way, on this institution of caste, will surely hasten its death. The original document can be accessed [here](http://indianliberals.in/~_admin/pdflanguage?id=509918235.pdf). _[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context._ [Read More SO Musings](https://spontaneousorder.in/?s=SO+Musings) --- ## [Musing] Censorship and the Law of Inexorability URL: https://indianliberals.in/musings/censorship-and-the-law-of-inexorability/ ### Body _The following essay is part of a 2012 booklet published by The Liberty Institute, New Delhi, in partnership with the Friedrich Naumann Foundation for Freedom. The booklet was title **[At Liberty: Freedom to Express and Offend.](https://indianliberals.in/content/at-liberty-freedom-to-express-and-offend/)** Authored by Ravi Shanker Kapoor, the essay examines ban on cinema and attacks on artistic freedom by the government, political organisations and pressure groups, despite the existence of the Central Board of Film Certification, a statutory body._In India, no other form of human expression has faced more restrictions than cinema. Unfortunately, it is  not only the Central Board  of Film Certification (CBFC) which does the job of censorship but, as we shall see, a variety of forces tend to curtail the filmmakers' creative freedom. The CBFC, a statutory body under the Ministry of Information & Broadcasting, is mandated to regulate the public exhibition of films under the provisions of the Cinematograph Act, 1952. Films can be publicly exhibited in India only after they have been  certified by the CBFC or the censor  board in  common parlance. The Board, headquartered in Mumbai, comprises a chairperson and non-official  members, all  of whom are appointed by the Central  government. It has nine  regional offices, one each in Mumbai, Kolkata, Chennai, Bangalore, Thiruvananthapuram, Hyderabad, New Delhi, Cuttack, and Guwahati. Films are certified  under four categories: 'U' certificate or Unrestricted Public Exhibition; 'UA' certificate or Unrestricted Public Exhibition, but with a word of caution that parental discretion required for children below 12 years; 'A' certificate or restricted to adults; and 'S' certificate or restricted to any special class of persons. The vision behind the setting up of the CBFC was "to ensure good and healthy entertainment" in accordance with the established provisions. **Supreme ****Court's Justification**** ** Why should cinema be subjected to censorship when other forms of expression like the press, novels, and short stories are not? The Supreme Court of India justified film censorship, arguing:  _Film censorship becomes necessary because a film motivates thought and action and assume a high degree of attention and mention as compared to the printed word. The combination of act and speech, sight and sound in semi-darkness of the theatre with elimination of all distracting ideas will have a strong impact on the minds of the viewers and can affect emotions. Therefore, it has as much potential for evil as it has for good and has an equal pound to instill or cultivate violent or good behavior. It cannot be equated with other modes of communication. Censorship by prior restraint is, therefore, not only desirable but also necessary. _ Our argument is that even if the apparently harmless vision  of the CBFC (good and healthy entertainment) and the apex court's justification (potential for evil) are accepted on their face value, it is not possible to resolve the issue. For there have been instances where films have been banned despite clearance from the censor board. While categorizing films as per various certificates is essential, the very idea of CBFC acting as a censor board is not good. What makes the matters worse is  that the CBFC's certification is not considered final either by the political class or society.  Mrinal Sen-directed _Neel Akasher Neechey_ (1959) was banned for two years, apparently by the government and not the censor board. That it was banned by the government run by Jawaharlal Nehru, the quintessential liberal, makes the assault on creative freedom even more deplorable. His government also went on to proscribe the 1962 film_ Nine __Hours to __Rama_, which showed Nathuram Godse's political and psychological motivation for killing Gandhi. The movie was based on a book by celebrated historian Stanley Wolpert; incidentally, he also wrote an authoritative biography of Nehru.  If gold rusts, what will happen to iron? With men of high ideals with touching faith in liberalism falling prey to political expedience, the lesser and later politicians showed much less tolerance to the subjects and viewpoints that they found unpalatable. Directed by Gulzar, _Aandhi _(1975) was said to be based on triangle of Indira Gandhi-Nehru-Feroze Gandhi relationships. Its release faced problems, even though it showed Indira Gandhi in a  favorable light. Then there was Amrit Nahata-directed _Kissa Kursi __Ka _(1977).  Though not depicting any prominent leader in particular, it showed a corrupt and vile politician wooing personified public, played by Shabana Azmi. The movie was banned by the government.  **Nationalistic peevishness ** Nationalistic peevishness is another factor. In 1984, _Indiana Jones __and __the Temple __of __Doom_ was proscribed for "racist portrayal of Indians and overt imperialistic tendencies." The West Bengal government banned_ City __of Joy_ in 1992 for the alleged denigration of Calcutta. Prudery has also been the bane of hackers. _Kama_ _Sutra: A __Tale of Love __Banned _(1996) faced trouble with the censors; a truncated version was later released. The same year, _Fire_ faced the air of Hindu groups who objected to lesbianism and the names of protagonists, Sita and Radha. Using these names for lesbians was mischievous, the activists said. This was a slur on Hinduism. Religious sensibilities are easily offended in India. Politicians in some states with a substantial Christian population banned _The Da Vinci Code,_ even though the Christian West did not do that.  Sometimes it is publicity hunger that propels people to attack films. The 2009 _Billu Barber _met with fierce resistance from salon and beauty parlor associations; they said that the word 'Barber' was derogatory. The head of the production company, Shahrukh Khan, was forced to rename the title as Billu. He also found it politic to invite members of the Hairdressers' Association of Mumbai members to the premier of the movie. Politics  has always played a big role in attracting proscription. In 1971, Satyajit Ray-directed _Sikkim_ faced a ban, which lasted till September 2010. In 2006, the film _Fanaa_ was banned in Gujarat  for a strange reason-that the lead  star, Aamir Khan, was against the Sardar Sarovar Dam over the river Narmada and had  demanded adequate rehabilitation for the ousted villagers! Shatrughan Sinha, popular film star and member of the Bharatiya Janata Party (which ruled in the state), even hinted his party would launch violent protests if the Khan did not retract his support to the anti-dam activists.  Then there was the curious case of _Jo Bole So Nihal_. In May 2005, the Shiromani Akali Dal  (SAD) sought ban on film in which the hero, Sunny Deol, played the role of Sikh cop. "The producer of the film has misused the holy Sikh community slogan (Bole So Nihal)," SAD chief Parkash Singh Badal told a  press conference. "It is pertinent to mention here that a sub-committee of the Akal Takht had given 'clean chit' to the Hindi film starring Sunny Deol," said a PTI report on May 18.  The ruckus was the product of intra-Alzali bickering; some factions used the movie as a  pretext to score brownie  points. The most recent controversy, regarding the ban on Prakash Jha's_ Aarakshan_, is a typical case of political correctness not just going berserk but also it mingling with the shenanigans of politicians.  National Commission for scheduled Castes & Scheduled Tribes chairman P.L. Punia objected to some dialogues in the film, calling them anti-Dalit. This was despite the fact that the film was cleared by a panel comprising nine people, including a Dalit activist and a former high court judge. Usually, such panels include four or five people. The result of Punia's petulance was that the movie was banned in Uttar Pradesh, Andhra Pradesh, and Punjab.  **Politics, pure and simple** It was politics, pure  and simple. Punia, a Congress leader who was earlier a confidante of Uttar Pradesh chief minister Mayawati, wanted to present himself as a  'true'  leader of the Dalits. The Congress and Mayawati's Bahujan Samaj Party, seen as the big rivals in the country's largest state, were both vying for the bigger chunk of Dalit vote. It was Jha's misfortune that he was caught in the crossfire. More dangerous than the machinations of politicians is the tacit and often explicit support they get from intellectuals in the assaults on freedom of expression.  For  instance, Dalit scholar Kancha Ilaiah and prominent editor Ajay Bose practically supported ban on _Aarakshan_. Bose saw nothing wrong in Mayawati's  ban on _Aarakshan_ on the grounds that she was entitled to take whatever action she deemed fit for her political survival. The ideals and rights enshrined in the Constitution mattered little to him. It is this intellectual milieu that emboldens the political class to trample over the fundamental rights of citizens. Eminent academics, media Brahmins, and other  opinion makers-most of them steeped in dirigiste mindset-have convinced themselves that meaningful change in human existence can be brought only by the  state. A natural corollary is that any political cunning is justified. Hence the easy condoning of the actions of Punia and Mayawati by intellectuals.  In short, the so-called reasonable restrictions on the freedom of expression may have occasioned the censor board to regulate cinema but the matter did not end there. As any other government regulation, it has also acquired a life of its own, often making the existence of the CBFC redundant. Any political party, social outfit, cultural group, or publicity seeker can don the mantle of a censor and torment a filmmaker. Punia cited reasonable restrictions justify his attack on _Aarakshan_; it is another matter that the restrictions he wanted to impose were unreasonable. The concept from which the censor board derives its legitimacy is  also the one from which super-censors do.  Creative freedom will remain constrained and restrained till the individual is deprived of the right to express himself without restrictions, reasonable or otherwise. Until that is done, grumpy politicians, tetchy outfits, blackmailers, mischief mongers, and trouble makers will inexorably continue to thrive at the expense of freedom of expression._Last week's musing: [ART VERSUS LAW AND ORDER](https://indianliberals.in/content/art-versus-law-and-order/)_ --- ## [Musing] China’s Tiananmen Massacre URL: https://indianliberals.in/musings/chinas-tiananmen-massacre/ ### Body We posed a question in an earlier issue of Freedom First: "Is the Soviet ideology really changing?" China, at least, has answered in the negative and proved beyond all reasonable doubt that once communists gain control of a country they will never let go. lt is as simple as that. If it was not so, why would the demand for democracy incur the wrath and vengeance of the peoples' democrats? _Barry Posen, a scholar of International Politics, has recently _[_argued_](https://www.foreignaffairs.com/articles/china/2020-04-23/do-pandemics-promote-peace)_ about the peace dividend of the pandemic as nations would emerge out of the lockdown considerably weaker. However, China’s dealings in the _[_South China Sea_](https://www.japantimes.co.jp/opinion/2020/06/02/commentary/world-commentary/china-steps-offensive-senkaku-islands/#.XtjxL-fhVPY)_, _[_Hong Kong_](https://www.economist.com/china/2020/05/28/chinas-national-security-bill-for-hong-kong-is-an-attempt-to-terrify)_, and with _[_India_](http://ajaishukla.blogspot.com/2020/06/rajnath-admits-sizeable-intrusion-by.html)_ and _[_Australia_](https://www.theguardian.com/australia-news/2020/may/20/australia-vows-to-stand-up-to-china-amid-reports-wine-and-dairy-exports-could-be-targeted-next)_ show a revisionist power asserting its authority. China’s bullying behavior abroad mirrors its authoritarian conduct at home, seen in the suppression of democracy, human rights violations, and treatment of the minorities. Recently in Hong Kong, the pro-China regime has _[_disallowed_](https://www.bbc.com/news/world-asia-china-52877411)_ the memorial gathering to commemorate the Tiananmen massacre, not to mention the imposition of national security law. _ _The Tiananmen Square massacre was the Chinese government crackdown over the pro-democracy protests in 1989. The crackdown led to the estimated _[_death_](https://www.independent.co.uk/news/world/asia/tiananmen-square-massacre-death-toll-secret-cable-british-ambassador-1989-alan-donald-a8126461.html)_ of around 10,000 peaceful, non-violent, and mostly young student protestors. The army ran tanks over the crowd to turn the bodies into ‘pie’, hosed the remains down the drain, bayoneted the wounded girls to death, and shot civilians for target practice._ _Freedom First’s SV Raju wrote a critical editorial over the incident in the July-September, 1989 issue. Even today, Raju’s arguments have resonance for liberals. While Raju and other liberals cheered Deng Xiaoping for introducing economic reforms which turned China capitalist in all but name, he also made it clear that political liberty and democracy were non-negotiable. Raju also discussed the geopolitical dimension of the global response to the incident, denunciation of the massacre by radical leftists, support to the Chinese authoritarianism by the CPI (M), and the persistent colonization of Tibet. Today, in Raju’s affirmation of ‘Bread with Freedom’ lies the lesson for liberals in India and elsewhere not to trade political liberty for economic freedom._ In Communist China, Mao’s heirs have, by their brutal suppression of a movement for more freedom and democracy, proved that power indeed grows from the barrel of a gun. The naive who are inclined to take the democratic professions of the commissar at face value, need to think again – Poland, Hungary or Gorbachev notwithstanding. We posed a question in an earlier issue of Freedom First: “Is the Soviet ideology really changing?” China, at least, has answered in the negative and proved beyond all reasonable doubt that once communists gain control of a country they will never let go. lt is as simple as that. If it was not so, why would the demand for democracy incur the wrath and vengeance of the peoples’ democrats? Freedom First holds firm its belief that while a market economy is the only sensible and pragmatic policy that can promote the prosperity of a people it cannot be divorced from the society where the citizen dictates not only what shall be produced but also who shall rule him. lt can never be Bread or Freedom. tt must always be Bread and Freedom. The Marxist-Leninists (our very own Naxalites) are right when they denounce both Deng and his cohorts (who they describe as ‘Capitalist-Roaders’) on the one hand and ‘Western Capitalists’ on the other, for the suppression of the movement for democracy. For our Naxalites the students’ movement is a revolt against the new economic policy of the Chinese Communist gerontocracy while we view it as a genuine people’s movement that proves that four decades of totalitarian rule has not suppressed a people’s desire to breathe freely the air of freedom and liberty. Western nations including the United States have been pulling their punches because trade is at stake. The Chinese market is so big, so inviting, so profitable! The villain of the piece is Japan which is actively campaigning, particularly with the United States, not to take harsh steps or act in anger. Truly have the Japanese taken over the British mantle of being ‘shopkeepers to the world’. And so we agree, for different reasons with the Marxist-Leninists when they point out that while “Capitalist Roader” Deng was warmly applauded by the West for his opening up the market to them he is found wanting because of the suppression of the movement for democracy. Free trade and commerce are important but never at the cost of human dignity and individual liberty. Herein lies the contradiction and the dilemma for the West. And while on this subject let us not forget that other fight for freedom in Lhasa where martial law was declared much before it was imposed in Beijing and where thousands have perished at the hands of Chinese imperialist bullets. The Office of Information and International Relations at Dharamsala in Himachal Pradesh issued a press statement on May 20. The statement drew attention to a resolution adopted by the Tibetan National Assembly in May calling on the Chinese authorities to lift Martial Law in Lhasa. The statement observes inter alia: “The struggle of the Tibetan people is a struggle for our inalienable right to determine our own destiny in freedom. It is a struggle for democracy, human rights and peace. Most of all, it is a struggle for our survival as a people and a nation with a unique civilization. “China’s sinister objective of reducing the Tibetan people into a minority in our own land is being implemented through an alarming demographic aggression. Today there are over seven million Chinese immigrants in Tibet – far outnumbering the six million and more Tibetans. “Since 1959 over 1.2 million Tibetans have died as a direct result of Chinese domination over Tibet. Over 6000 monasteries, temples and chapels have been destroyed and desecrated. “There are fresh reports of heavy military build-up and troop movements inside Tibet in recent months – somewhat like a preparation for war. “Chinese prisons in and around Lhasa are becoming overcrowded. All prisons in Lhasa are filled with Tibetans who took part in the March 1989 anti-Chinese demonstrations. Due to shortage of space, a large number of prisoners are kept in the Sangyip military barracks. This has been revealed by a number of Tibetans who have recently arrived in Kathmandu. Is it any surprising that the Chinese colonisers have now turned on their own people? Not surprisingly our Swadeshi Stalinists (the comrades would consider this a compliment) have not surprisingly supported the massacre of the innocents at Tiananmen Square and praised the People’s Liberation Army for their ‘heroism’ in killing unarmed men and women. And how has the Government of India reacted? Our Prime Minister says: “We have every indication that reports coming from China are not 100 per cent accurate. We would like to evaluate what the reality is before we say” (Indian Express, June 16). Presumably he is waiting for a Xinhua report channelled, no doubt, through the PIB, AIR and Doordarshan -all outstanding specimen of credibility! How many more should die or be executed before “the reality” is “evaluated”? _The original text can be accessed _[_here_](http://www.freedomfirst.in/uploads/issues/pdf/402.pdf)_._ _[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context._ Read more: [Minoo Masani on the Raison D’être of Swatantra Party](https://spontaneousorder.in/minoo-masani-on-the-raison-detre-of-swatantra-party/) --- ## [Musing] Commerce and Control: Barriers to Free Enterprise URL: https://indianliberals.in/musings/commerce-and-control-barriers-to-free-enterprise-m-a-rangoonwala-1982/ ### Body _Following is an excerpt from a booklet titled ‘Free Market Economy - Key to Economic Progress and Freedoms’, authored by M.A. Rangoonwaala and published by the Forum for Free Enterprise in 1982. The author emphasises that despite increased globalisation, restrictions on free trade persist. He highlights how bureaucratic obstacles, also known as "man-made" barriers, obstruct the progress of the global economy. He argues that a free market economy is the key to all freedoms._ _M.A. Rangoonwala was the President of the International Chamber of Commerce. Published is the text of the inaugural address at the Silver Jubilee Celebrations function of the Forum of Free Enterprise in Bombay on 12th January 1982. _ Any individual who did business at the beginning of this [20th] century would be shocked by today's world if he had not gradually got used to it over the passage of time - as many of us have. He would be shocked not so much by the oneness of the world and the closeness of different countries forged by the revolution in communications and transport - advances of which humanity is justifiably proud. Rather he would be shocked by the degree to which business is restricted, hampered and fenced in by government regulations and controls. In this sense, distances are far greater than before. You may be able technically to finalise a deal over the telephone or by telex in a few short minutes or hours - and may even be able to rush supplies to wherever they are needed with what must effectively be considered no delay at all. But and it is a very important 'but' - these technical gains in speed are frequently more than offset by the tediously protracted processes of completing official formalities and seeking bureaucratic permissions and approvals. In this respect, we live in many different worlds which relate with each other only over and around considerable man-made obstacles. As has been the case throughout history, the unifying forces of commerce are frustrated by the divisive forces of politics.  Barriers to trade and investment between countries, though regrettable by the absolute standards of the one-world ideologue and frequently harmful to the cause of maximising global economic efficiency, are not alone and of themselves a major catastrophe. What does the real damage is that government controls and restrictions extend deep and wide into our national economies, thwarting and distorting competition and the free enterprise system on a massive scale.  The fundamental _raison d'etre_ of the free enterprise system is that it harnesses for progress the energy and drive of individuals and their yearning for self-betterment. It achieves this through a competitive process which encourages people to work hard and efficiently in producing what consumers wish to buy at minimum cost. Remove competition, and private enterprise stands defenceless. Profit ceases to have either economic significance or moral justification. If we allow controls to proliferate which strangulate both competition and individual initiative, why do we need private enterprise at all?  In my own mind, I have no doubt whatsoever that the free market economy is the key to all freedoms. In fact, the market and freedom are really synonymous terms. We should never forget that the only thing governments can control is people. One yard of textile does not care what its price is. But people care: the people who manufacture the textile, the wholesalers who sell to the retailers, and the retailers who sell to the consumers. And that is all controls can ever mean: 'people' control. It is never prices or goods and services but only people who are controlled, subsidised or supported by the government. It is this that so many citizens fail to see or choose to ignore.  _You can access the complete text _[_here_](https://indianliberals.in/forum-of-free-enterprise/free-market-economy-key-to-economic-progress-and-freedoms-m-a-rangoonwaala-june-15-1982.pdf)_._ type=content&p=8481). Needs editorial review._ --- ## [Musing] Community Development URL: https://indianliberals.in/musings/community-development/ ### Body _The following text was originally delivered as a speech under the auspices of the Forum of Free Enterprise in Bombay on 15 September 1960 by B.G. Rao, I.C.S (Retd.). The author reviews the problems of rural unemployment and underemployment and tries to distinguish between rural development and rural welfare. He further suggests that social education and the programme for women and children under Community Development deserve examination._ _You can read the original, unabridged version _[_here_](https://indianliberals.in/forum-of-free-enterprise/community-development-b-g-rao-mar8-1961.pdf)_. __ _Our achievements in the community development field have been puffed and praised by so many and so frequently that I would not mind performing the less pleasant but more necessary task of pointing out the extent of our failure. The sources of inspiration for community development are as different and various as the Father of the Nation, the Indo-American Technical Cooperation Programme, the Grow More Food Committee, the Ford Foundation, the late Deputy Chairman of the Planning Commission and some original thinkers among the senior officers of the Planning Commission. With such mixed parentage, one would naturally expect the idea to be anything but clearly defined. And lack of clarity in the basic approach has been its principal feature. We are often asked, "Has there been no improvement at all then in the past nine years of planned community development?" Of course, there has been, but planning implies the best use of limited resources. Two years ago, the Government of UP appointed a Committee under the chairmanship of a veteran Congressman. The Committee made a lengthy review of community development work all over the State. It reported that the C.D. (Community Development) programme of the Government had yet to accelerate the process of social and economic transformation. My complaint is that community development has been ill-planned, if planned at all, and as regards the best use of limited resources - the less said, the better. Recently, the Prime Minister mentioned that the functions of the Planning Commission were not merely to plan but also to evaluate the execution of the plan. Attached to the Planning Commission is a Programme Evaluation Organisation whose primary duty is to assess the progress made by the C.D. activities - an annual audit. The Seventh Report of this organisation was published in April 1960. It contains a general review of the progress of planned community development over seven years. And _"in the emerging picture shades predominate and the reader is left with the impression of an inadequately coordinated endeavour, governmental rather than popular in character, and sustained more by hope than by achievement"_. These words of the report also convey the views of many other objective students of C.D. The Third draft Plan indicates a refinement in planning methods, viz., ignoring all inconvenient criticism. The section on community development ignores the Evaluation Reports even though the Prime Minister thinks they are essential. Why? Not because these criticism were frivolous or unfounded but because the Planning Commission knows that with the backing of the Prime Minister, it can get the Parliament to approve anything it puts forward. And the Parliamentary debates on the draft outline of the Third Plan have shown us the extent of the interest vocal MPs felt in this part of the draft. Planning requires priorities to be prescribed as much in the rural sector as in the industrial sector. For instance, one village may have three wells supplying it with drinking water; a fourth may be added for greater convenience. But another may have no well at all, and the villagers may have to trudge three or four miles before reaching a reasonably safe water supply source. Now it has to be decided which should have the priority. Then again, the agricultural production in a particular village may have progressively decreased because the irrigation tank in the locality has gradually silted up; at the same time, the school-master wants the thatched roof of his school to be replaced with a tiled roof; the sarpanch wants a community hall to be built because the Ministry of Information & Broadcasting is sanctioning a radio receiving set. If there are to be priorities in investing money and endeavour, which of these should have precedence over the others? The Ministry of Community Development had requested the United Nations Technical Assistance Administration to send a mission. This mission was distressed to find that in one development block, the village streets had been paved with bricks, undeniably, an amenity to be appreciated during the rains; but with a little greater appreciation of priorities this money, material and labour could have been diverted to the very urgent requirement of draining away the excess water from the fields. This would have benefited the cotton crop and the farmer's general economic condition. But none had bothered. Improvement in agricultural production is to have priority in the community development programme for two reasons. First, it is time the country got out of the compelling necessity of importing foodstuff. Secondly, it is time that the farmer had a little more money in his pocket, not money given to him by the inflationary tendencies but by an actual increase of the fruit of his labour. Once he has that extra economic strength, he will have increased confidence in himself; his felt needs will increase, and he will have the desire and the energy to meet those needs. And then, the Government can come in with adult education, social education, community listening sets, community centres and even training camps for “village leaders”. The draft outline of the Third Plan indicates the decision to allocate a more significant portion of the community development funds to agricultural development. This is a step in the right direction. It is only a pity that the draft outline does not explicitly abandon its old policy of simultaneous advance along the rural front. For the first time in eight years, we now find the Planning Commission noticing the need for fixing priorities and giving agricultural production precedence over welfare activities. But the pattern has been set and followed for eight years. A revision of attitudes and budget provisions may be made difficult, if possible, by political pressure and public demand. And here we come to the rural public. The First Five-Year Plan and the second were eloquent about public participation in rural development programmes. We were told that the Community Development Programme aimed to establish a suitable organ to ensure the involvement of villagers in the planning stage. This is regarding planning and not the execution of plans. Nothing could have better indicated that Delhi is aware of the diversity and variety of our villages. But Delhi has its views of what is or ought to be suitable for the town and, therefore, simultaneously with this declaration, an administrator of community projects was appointed and was made responsible for planning, directing and co-ordinating community development work throughout the country. He was not merely coordinating but planning far away from the villages. The Second Plan mentioned that _"the participation of people in planning and execution of rural schemes is an essential feature of the movement and in this the results achieved are promising"_. That is what the Plan said. But the Administrator was meanwhile upgraded into a Minister, his staff and status appropriately enlarged and his power of issuing instructions to all and sundry on all aspects of planned rural development. According to an official publication, the fruit of nine years of people's participation is: _"On the whole, the people's attitudes and reactions in most of the blocks are not yet generally favourable to the success and growth of the community development programme. The majority of villagers do not regard it as their own programme and seem to rely mainly on the Government for effecting the development of rural areas"_. If there is a Ministry of Community Development, it has to have some work to do. So, under the name of coordination and integration, it poaches upon the preserves of Agriculture, Health, Education and Culture. Recently, the Union Minister of Agriculture is reported to have wondered why the Package Plan for improving agricultural output in Punjab is being dealt with by the State Minister for Community Development and not by the State Minister for Agriculture. It is time that the Union Minister realised that the Ministry for Community Development is an anomaly. I said so in a rather notorious minute of dissent three years ago. Recently, the Indo-American Export team pointed out that the existence of that history as a separate unit leads to overlapping and confusion; it did not mention the waste of scarce resources. Agricultural production directly involves the cultivator. We also have a large class of landless villagers; apart from the shopkeeper, schoolmaster and others, we have among them the village artisan and the landless labourer. The village artisan may often be under-employed; the landless labour is, and often too, the small farmer. Not all our efforts at increasing our agricultural production will provide full employment for more than some of this village population. Suppose, therefore, the increase in agricultural production is the primary problem from the farmer's point of view. In that case, the increase in employment is the problem of a larger section of the rural population. If the Planning Commission has any plan to solve unemployment, then it must give us at least a rough idea of its size. It has been said that the private sector's investment in agriculture, minor irrigation, etc., will be Rs. 800 crores. Everyone knows that this is a sheer guess and that in this matter their guess is as good as anybodys. But it was necessary to show how big our plan was going to be. Hence Rs. 800 crores have to be spent. The Planning Commission apparently felt no need to make a similar guess in regard to rural underemployment and unemployment. The absence of data in a plan cannot be made up by platitudes. This problem of rural unemployment and underemployment has another facet-cottage industry. Pilot projects had been started in a number of C.D. blocks during 1955-56. An evaluation of their work was made by the Programme Evaluation Organisation. Its report is depressing. The various all-India bodies and commissions concerned with cottage and small industries “have not evolved the practice of thinking together to” establish local projects to meet the local needs for two reasons: First, the love of centralisation and the habit of planning from above and, Second, intolerance. The result was that only 37% of the trainees in these pilot projects took to the crafts they were trained for. The wastage was 63% and many of these had received stipends. And the stipends ranged from Rs. 7 to Rs. 75 per month. The draft itself mentions that during the first three years of the Second Plan, the village industries encouraged by the State have not been able to provide full remunerative work or to attract young men with some measure of training and education. It tells us that utilisation of funds has been slow and only a small impact could be made in improving techniques or marketing facilities. Maybe, because of this poor showing, there seems to be some desire to be realistic. There is a proposal to use improved techniques and use power for many of the processes involved like making pulp for paper, crushing non-edible oil seeds, and manufacturing _gur_ and sugar from the palm. Of course, the electric power will keep the ghani-crushed oil and the khadi unpolluted, despite the admitted marketing difficulties. Only through rural electrification accompanied by starting a power-operated rural industry can we hope to tackle under-employment and unemployment of the underprivileged sections of the rural community. It does not appear that the Third Plan is going to lay the requisite stress on this. I have tried to distinguish between rural development and rural welfare. I have pointed out that in our C.D. programmes, the latter has precedence over the former. I do not mean that community welfare should be completely neglected. It cannot be a "jam tomorrow" policy, such a policy cannot satisfy the voter in a democracy. All that I suggest is that the emphasis on development should be greater. I have already said that drinking water supply should have precedence even over agricultural development. The First Five-Year Plan called it a basic requirement. The draft outline of the Third Plan, however, describes it as one of the many desirable amenities. One does not understand this shift in emphasis. It is surprising that even today, ten years after the Planning Commission was established, it has no data on this subject, nor has the Ministry of Health. And they have yet to think out the minimum standards of distance, quantity and quality. Social education and the programme for women and children under Community Development deserve some examination. In the Second Plan, there is a provision of Rs. 15 crores for social education. Of late, social education is called fundamental education. The programme consists of adult literacy classes, the organisation of community centres, women's organisations, youth clubs and village leaders' camps. The Planning Commission has described it as a comprehensive approach to the solution of the problems of the community through community action. This most wonderful thing seems to have flopped if we are to rely on the various evaluation reports. Appreciable numbers of those made literate have lapsed into illiteracy; the running of the recreation centres has been generally unsatisfactory. The rate of mortality among youth clubs, women's organisations, etc., has been very high, as much as 57% in the blocks studied by the Programme Evaluation Organisation. The leaders' camps are intended to efficiently train members of the panchayats and cooperatives to perform their duties. I have no doubts that the Ministry of Community Development, with the assistance of the Ford Foundation, will soon open similar camps for our MLAs & MPs to help them perform their duties efficiently. Duties which are surely more demanding, more difficult and more important than those of the village punchas. One would have expected the draft plan to take note of these evaluation reports and suggest new lines of action. Instead, it blandly remarks that some progress has been made in this field in the Second Plan period and as in the case of cooperative farming we are merely told to wait for further particulars. That is a pity. Social education is a good thing but the correct medium for it has yet to be evolved. It is wise to try new ideas in pilot projects rather than let loose on the countryside social and educational organisers of the type which we have seen in the past seven years. I have referred to the programmes for women and children mainly to show that like the Community Development Ministry, the Central Social Welfare Board was created as a coordinating agency. It utterly failed even in this respect. The Community Development Organisation came into the field first and had its women's and children's welfare programme. A few months later the Central Social Welfare Board was established. The clash of interests of certain personalities made peaceful co-existence difficult from the beginning. It was, therefore, decided that their areas of operation should be exclusive, the Board would not operate in Community Development Blocks. But as the community development blocks increased in number, so did the welfare projects, and gradually their workers began to raid the same villages. Insistent tales of confusion and waste and overlapping began to reach Delhi. And the Central Government ordered an integrated pattern of activities. That was in December 1956. Today almost four years later, that decision is still on paper. The study team on community development appointed by the Committee on Plan Projects had suggested certain practical measures which could have produced some useful results had they been implemented. These concerned the organisation, the approach and the work pattern. These suggestions were angrily brushed aside. Then the PEO made a study which pointed out the terrific centralisation in the Central Social Welfare Board; it suggested that what was needed was a coordinated pattern of work. Then there was another team appointed by the Committee on Plan Projects which also recommended some sort of coordination between the two organisations. Nothing has happened, and perhaps nothing will, till we have a Ministry of Social Welfare! People in positions of power and authority and those with a political or economic voice loud enough to be heard have so far taken little interest in examining the Community Development programme. The villager is still patient enough with our plans for him. _Previous musing: [For Freedom, Farm And Family](https://indianliberals.in/content/for-freedom-farm-and-family/)_ --- ## [Musing] Conditions for Economic Growth URL: https://indianliberals.in/musings/conditions-for-economic-growth/ ### Body Why is it that, in spite of an ancient cultural background and in spite of powerful world forces which are tending to spread to underdeveloped areas the modern technologies of industry and agriculture, with the accompanying outputs, high wages and good living conditions, the great mass of the Indian people are somehow being prevented from enjoying what the world has been offering her? In this article, English classical economist Prof. William Harold Hutt answers how India can progress most rapidly from relatively very low average standards of living to standards comparable with those achieved in Western Europe and the United States. Given the inevitable onset of a recession in the Indian economy, his ideas, presented for the first time in 1964, remain as important today as they were then. While summing up the article, Prof. Hutt argues that India’s rapid development will depend upon the success with which: - thrift can be encouraged by a taxation system which does not discriminate against the provident; - the foreign capital needed can be attracted by the creation of faith that nationalisation or confiscatory taxation will be avoided and by official acknowledgement of the reasonableness of foreign control of foreign capital accepted; - enterprise generally can be fostered by explicit official recognition of profit as the reward for wise and responsible direction of productive activity; - a climate of economic justice can be created through constitutional entrenchments whereby legislation or private agreements which discriminate on grounds of race, caste or income will be unconstitutional and void; - the temptation to distort the form of development by tariff or quota restraints on imports can be overcome; - the mechanisation of agriculture can be hastened so that the economies of large- scale cultivation can be won side by side with industrialisation; - the political incentive to invest public capital in spectacular, grandiose schemes can be resisted and an appropriate time sequence in development permitted; - the determination of prices, wage-rates and outputs by private coercion (as through strikes or boycotts) can be forbidden; - inflationary policy can be renounced, a major incentive to corruption (which accompanies the repressed form of inflation) being thereby eliminated; and - unbridled population growth can be prevented. Even after 55 years, one can clearly see that these prescriptions remain timeless and note that no Indian government has worked seriously on these long term solutions to instil rapid economic growth. Our misguided policies are largely ad-hoc and continue to lead us from one slowdown to another. _Access the full document [here](http://v2.indianliberals.in/~_admin/pdflanguage?id=1604060426.pdf)._ _First Published in the _[_Forum of Free Enterprise_](http://www.forumindia.org/)_ in August 1964._ _Other editions of the publication can be accessed at _[_Indian Liberals_](http://indianliberals.in/index)_, an open, multilingual digital archive committed to preserving liberal voices in the Indian public sphere._ --- ## [Musing] Constitution And The Common Man URL: https://indianliberals.in/musings/constitution-and-the-common-man/ ### Body _This article was published in the February 1971 issue of Freedom First and is an excerpt from a lecture delivered in Bombay. At the time, Right to Property was still a Fundamental Right but was constantly being undermined by our legislators. An eminent jurist and economist, Palkhivala was one of the most fierce defenders of rule of law. You can read the original, unabridged version [here](http://freedomfirst.in/uploads/issues/pdf/225.pdf).__ _India has never known true democratic freedom in its entire history except during the last 23 years. If Plato’s dictum regarding political evolution is correct, our newly won freedom will have to be zealously guarded if it is not to be supplanted by dictatorship. In a nascent republic where freedom is not bred in the bones of the people, the danger of dictatorship is always vastly greater than in democracies which are centuries old. In India freedom is not more than one election away from extinction. When an attempt to uphold the rule of law is called a manifestation of ‘vested interests’; and when the preservation of the sanctity of the constitution is called the handiwork of ‘reactionary forces’, it should be clear to any thinking mind that freedom is in peril. Political freedom and civil liberty are the keystones of the Indian Constitution. Our constitution is primarily shaped and moulded for the common man. The only persons who would be disappointed with the constitution are those who believe in outdated ideologies which can only result in levelling down and not levelling up. The constitution believes in the distribution of wealth, and therefore it not only permits but encourages the creation of wealth by enterprising individuals who with their vision and expertise are prepared to take risks and develop their country. That is why our Constitution confers on all citizens the fundamental rights to acquire, hold and dispose of property and to carry on any trade, business and profession. The great makers of our Constitution clearly intended that the integrity of the Constitution should be preserved against any hasty or ill-considered changes, ‘the fruits of passions or ignorance’. The essential purpose of our Constitution is to ensure freedom of the individual and the dignity of man and to put basic human rights above the reach of the State and of transient politicians in power whose naked juvenile chatter is covered by the fig leaf of demagogic claptrap. With the growing powers of government all over the world, it is eminently desirable for any democracy to have fundamental rights which cannot be curtailed or abrogated. In the words of Mr Justice Frankfurter, man being what he is cannot safely be trusted with complete power in depriving others of their rights. The protection of the citizen against all kinds of men in public affairs, none of whom can be trusted with unlimited power over others, lies not in their forbearance but in limitations on their power. At least such is the conviction underlying our Constitution. With our varying and widely divergent creeds and ideologies, and a wide variety of religions and languages, our country is pre-eminently a country where inalienable fundamental rights are an absolute necessity. These rights have been called, not without justification, the ‘conscience of the Constitution’ or the ‘soul of the Constitution’. In material terms, they constitute the anchor of the Constitution and provide it with the dimension of permanence. No time in India’s history would be more inopportune than the present for amending the Constitution and empowering Parliament to abridge or take away Fundamental Rights. With the growing sense of insecurity in different States, when fanaticism of all sorts–regional, linguistic, communal and economic–is gathering momentum, it would be not merely a mistake but a betrayal of the fundamental freedoms to enable Parliament to trifle and tinker with them. The right to property is often derided as the ‘least defensible’ right in a socialist democracy. Yet a little reflection should show that this right is of the essence of a sound body politic and of a democracy which aims at marching forward economically. Any attempt to abrogate the Fundamental Right to property would be erroneous because it would run counter to the eternal laws of human nature. Men will sooner, Machiavelli said, forgive the deaths of their relatives than the confiscation of their property. It is a sad reflection on human nature that, generally speaking, a man will work for himself and his family as he will work for no one else. However, until this law of human nature is changed, the abolition of the right to property can meet with nothing but disaster. There is no democracy anywhere in the world where as a matter of law and of constitutional practice the right to property is not respected. The right to property is enshrined in the Constitution of the States where the rule of law prevails, for example in the Magna Carta, in the American Declaration of independence, in the French declaration of the Rights of Man and in the German Constitution. Even in Communist countries like the USSR, the right to private property in the fruits of personal labour and the right to inherit such property is recognized. Under our Constitution the right to property is elastic and flexible–the Legislatures and the Executive are entitled to subject it to all such reasonable restrictions as are in the public interest. The right to property cannot be invoked at all against laws relating to Zamindari and other estates in lands or against other laws relating to agrarian reforms. Sixty-four Acts passed by Parliament and the State Legislatures are constitutionally declared to be valid although they may directly infringe on the right to property. The adequacy of compensation cannot be challenged in our Courts of Law. Far from there being any need to abridge the Fundamental Right to property further, the truth is that perhaps in no free democracy of the world does the right to proper exist in such an abridged and attenuated form as it does in India. Countries where freedom has become a way of life, can do without the luxury of a constitutional right to property. But in India where economic fanaticism has become a way of political life, it is imperative to retain the right to property. It would not be too much to say that the right property is, in a sense, the handmaid to the other fundamental rights. Of what avail is the fundamental right to the freedom of speech and expression to a newspaper if its property can be taken away without reasonable compensation; or the fundamental right to form associations or to the religious minority is to be held on the sufferance of the party in power? The myth has been sedulously propagated by wily politicians that it is the Constitution which stands in the way of the nation’s economic progress and the uplift of the masses. This is the greatest fraud ever perpetrated on the people. The truth of the matter is that it is the wooden-headed and disastrous economic policies of the Governments at the Centre and in several States which are truly responsible for the miseries of the seventeen million unemployed and the many more millions who, though employed, are still living below the minimum subsistence level due to the erosion in the value of the rupee. There is not a single sound economic policy or scheme for the social development of the masses which is in the slightest degree hampered or hindered by any of the provisions of the Constitution. There is no doubt that the overwhelming majority of thinking men strongly believe in Fundamental Rights and are deeply conscious of the outstanding role played by the Courts in preserving our cherished values. But unfortunately, they constitute the silent majority. There are times in a country’s history when inaction and silence can be a culpable wrong, and we are living in such times. It is not enough that we believe in our national motto that truth with ultimately prevail. We must take active steps to see to it that falsehood does not have very long innings before the ultimate moment of truth arrives. _Previous musing: [The Light of the Constitution](https://indianliberals.in/content/the-light-of-the-indian-constitution/)_ --- ## [Musing] CONSUMER SOVEREIGNTY LEADS TO RAPID ECONOMIC DEVELOPMENT URL: https://indianliberals.in/musings/consumer-sovereignty-leads-to-rapid-economic-development/ ### Body The following text is a reproduction of an article specially written for syndication by Indian News & Feature Alliance (INFA). Reproduced by [Forum of Free Enterprise](https://indianliberals.in/content/consumer-sovereignty-leads-to-rapid-economic-development-by-prof-b-r-shenoy-july-9-1962/), in the article, Prof B.R. Shenoy counters Prof J.K. Galbraith's (Canadian-American economist) claim that planning is crucial to economic development. He argues that consumer sovereignty and planning for the free market would lead India to economic development. Professor J. K. Galbraith has made planning a theme of his weighty pronouncements more than once during his tours round India. At a Press conference in Ahmedabad, commenting on the fears expressed "'in some quarters in India" that the present tempo of our planning might lead to an authoritarian regime, he observed that "lack of planning" in underdeveloped economies "carried a greater risk of leading to authoritarian regimes than proper planning". He utterly ridiculed these fears, saying that "whenever somebody wants to denounce something, he says it is likely to lead to authoritarianism." In addition to planning, he continued, public ownership, agricultural price support, trade unions and large corporations had been accused, by different sections of the people, at different times, as precursors of authoritarianism. But their cry of "wolf" had proved false alarms. It was safe enough guarantee against this calamity, if the "spirit of democracy is deeply implanted in the mind of peoples and in their institutions''. The logical basis of Prof. Galbraith's conviction, which is widely shared in India, is simple. A country facing the problem of lifting itself from poverty and of providing a better life for its people would be condemned to frustration "'without planning"; from the "discontent" born of the tyranny of unrelieved poverty, they might fall an easy prey to the promises of Communism. This danger can be averted by a "proper planning of its resources". It will at once be agreed that the greatest single problem before underdeveloped countries is their abject poverty. Everything hangs on its eradication. Failure to tackle it effectively might engender social and political instability, though the fear in this regard is often unduly overdrawn. The question is whether this central objective - the eradication of poverty - may be best and most speedily achieved through planning, as we have seen it in action during the past decade; and as Prof. Galbraith, a devotee of Indian planning, seems to understand the term. The answer centres round the problem of maximismg output from our meagre resources, as output provides the wherewithal for liquidating poverty. The faster the growth of output the sooner is poverty liquidated. Any programme for maximising output cannot Ignore the prevailing extremely complex, pattern of pr~ duct10n of the Indian economy. Fully 50 per cent of the national product is from agriculture and about 70 per cent of the population lives on it. Agricultural production is in the hands of 67 million independent farmers scattered round the country, the average holding per family being 5.5 acres. Cotton textiles comprise about 36 per cent of industrial production. Textile output ensues from 478 mills, 80,000 to 90,000 powerlooms and 2 million handlooms. The remaining sectors, too, comprise tens of millions of independent production units. Save and except under the Communist steam-roller, this production set-up cannot change overnight, so to speak. Two policy compulsions emerge from this set-up, if we must accelerate output. First, agriculture, textiles and the basic consumer goods Industries, which constitute the bulk of productive activity, must receive first claim on productive resources. Secondly, centralised planning - in the sense of state control over the allocation of resources - is not practical, though simpleton administrators might think otherwise. Centralised planning can only produce chaos and retard the hand of progress, when the planners have to deal with tens of millions of production units scattered round a sub-continent. We have violated both policy compulsions in the name of planning. The Public Sector will appropriate in the Third Plan, 65 per cent of investment resources. The percentage was 57 in the Second Plan. These resources will go into heavy industries mammoth river valley projects and costly social overheads. Large parts of the remaining resources would also be forced into heavy industries and industries producing intermediate and other non-consumer goods, through exercise of the control over capital issues, import licensing, permits for raw materials, concessions and quotas. This leaves little of the productive resources for use in agriculture and for producing cloth and the other consumer needs of the masses. Resources drawn into heavy industries would add to the national product, but an order of 14 per cent of their value; they would add an order of 36 per cent if employed in consumer goods industries and 65 per cent if employed in agriculture. The outcome of our developing heavy industries at the expense of consumer goods industries, and of developing both at the expense of agriculture, has been two-fold: Indian national income has risen during the past decade at an annual rate of about 3.5 per cent; and the consumption of food and cloth by the masses has declined, or is semi-stagnant. In the absence of planning-forced diversion of the largest bulk of Plan finance into wasteful projects-productive resources would flow into channels where they yield the highest output, through the usual market mechanism. Two results would ensue from this, simultaneously: first, national income might increase at an annual rate of 8 to 10 per cent; secondly, output of the basic consumer needs of the masses-principally, food and cloth-would go up simultaneously with the national product, as investments in these directions yield the highest returns and as economic activity would now be controlled and directed by the consumer, not by the Planning Commission. This is not to say that, under the free-market system and the sovereignty of the consumer, there is no room for any planning. Orderly progress is inconceivable without planning. In the private sector, then, planning will be done by the millions of individual production units; in the Public Sector, by the state. The Public Sector will be confined to activities which cannot be effectively undertaken by private enterprise, e.g., the provision of an honest rupee, the rule of law, basic transport and communications standardisation of weights and measures, education and public health. In particular, the state should not stray into trade and industry, or interfere with the distribution of productive resources. To do so would be to upset the planning of millions of production units, to the detriment of the national product and social justice, causing untold human suffering in the Indian context of extreme poverty. Thus, the "discontent" and possible explosion, which must ensue from the pursuit of the prevailing economic and social policies, carries the very "risks of authoritarianism", which Prof. Galbraith thinks we would avert through the so-called "proper planning of our resources". These risks cannot be averted with greater certainty than through planning for the free market under the banner of consumer sovereignty. Planning for the free market has yielded blinding economic and social dividends wherever it has been given a chance. In the post-war world, it produced the first miracle in West Germany. It then spread, with as good or better results, to the other E.E.C. countries, Israel, Japan, Hong Kong, Spain and, latterly, the Philippines. The eagerness of U.K. to join the E.E.C., even risking severance from its political kith and kin, is evidence of the vitality of the new movement. News of this powerful reaction away from statism has not reached New Delhi yet; nor the Indian universities generally, where economists still fondly cherish outmoded dirigiste doctrines, fancying them to be tenets of the nuclear era. The Galbraiths, Millikans, Rostows and Wards, not to mention the pronounced left-wingers like the Baloghs, Bettleheims, Langes and Robinsons - all sincere friends of India and hot favourites of our Government - through their expositions, probably stand in the way of our properly appreciating the tremendous potentialities of planning for the free market under the aegis of consumer sovereignty. The illicit beneficiaries of planning, now the power behind the throne, who, too, are champions of mass prosperity, are another great hurdle to be overcome. But neither economic nor social salvation is possible except through policies of economic and social freedom. The task before the policy reformer is indeed overwhelming. The situation provokes the prayer; '''Good Lord, protect me from my friends; against mine enemies I can defend myself." _Previous musing: [RAJA RAM MOHAN ROY ON PRESS FREEDOM](https://indianliberals.in/content/ram-mohan-roy-press-freedom/)_ --- ## [Musing] Controlling Inflation in India - BR Shenoy URL: https://indianliberals.in/musings/controlling-inflation-in-india-br-shenoy-1977/ ### Body _This musing is an excerpt from BR Shenoy’s essay “Controlling Inflation in India” published by the Forum of Free Enterprise in their booklet titled “The Basic Truth About Inflation”. The essay focuses on the resolution of separation of official claims and market-based observations. The article emphasizes the strategies that needed to be adopted in controlling inflation through the review of how the trends started taking place.   _ If we may define inflation as an expansion of money which drives up commodity prices in general, inflation exists, incipient inflation apart, only when the General Prices Index rises. This index is both an indicator and measure of inflation. The Union Ministry of Information, in an extensively broadcast pamphlet 'India's War Against Inflation,' issued in January 1976, proclaimed that 'ours is the only major country in the world' where inflation had 'not only been checked' but had also 'actually been reversed,' i.e., we had rolled prices back, not merely restrained their further upsurge. This claim has been internationally quoted and was, reportedly, hailed and endorsed, among others, by Mr. H. J. Witteveen, the IMF Chief, and Mr. Robert S. McNamara, the World Bank President, during their visit to India last year; and, among our own business magnates, Mr. J. R. D. Tata. Though recent pronouncements on the subject by Government spokesmen have tended to be apologetic, the Congress Party’s election manifesto, issued on February 8, 1977, is emphatic that we have 'reversed inflation,' while a 'large number of countries are still struggling' with it. While it may be quite pleasing to read this story of our global leadership in combating inflation, the price-harassed householders have often wondered why this 'success' has not been very much in evidence in their routine market rounds, apart from some short-lived halts or setbacks in the prices of certain consumer items. To resolve this divergence between official claims and market observation, and also to devise ways of overcoming inflation, it may be helpful to review the origins, and the contemporary trend, of inflation in India. To locate the origins of inflation, we may divide the economy into two parts: the government sector and the people’s sector. Everybody knows that the incomes of the people, received in rupees, are but the rupee counterparts of their outputs; and that, in the final analysis, the people cannot expend anything more than their earnings, expressed in rupees. As my output is picked up from the market by somebody else, against his rupee earnings, and, in like manner, I pick up someone else’s output, it necessarily follows that in the people’s part of the economy, aggregate expenditures will always be matched by equivalent output. Hence, inflation and price instability cannot originate in the people’s sector of the economy (though, having originated elsewhere, inflation may spread to the people’s sector). It is different with the government sector. Since independence, as in all inflation-ridden countries, Government’s overall disbursements in India have exceeded the sum of taxes, loans, and other receipts of Government, except for 1950-51 and 1951-52, when we had nominal budget surpluses. The excess disbursements were all covered by printing money or, which is the same thing, by creating Reserve Bank credit, the only ways of financing overall budget deficits. When, in due course, a part of the moneys created to cover budget deficits—the primary expansion of money—reaches the banks and augments their cash holdings (reserves), the banks expand their credit—i.e., loans, overdrafts, advances, and discounts—and a secondary expansion of money ensues. As in under-developed countries generally, we have here the origins of inflation in India—budget deficits and the consequential secondary expansion of bank credit. Primarily as a result of this double process—due allowance being made for other factors (which we need not now dwell on) affecting money supply—money supply in India multiplied 6.5 times, from Rs. 1,955 crores in 1954-55, when the current phase of inflation began, to Rs. 12,632 crores in 1975-76. Not the whole of this colossal expansion of money (Rs. 10,727 crores) was, however, inflationary. During this period of monetary expansion, the Net National Product (NNP) more than doubled, from Rs. 10,483 crores in 1975-76 (at 1960-61 prices). This increase in NNP absorbed, roughly, a corresponding proportion of the expanding money supply. The rest of these moneys, the major part, to which no physical output corresponded, was inflationary, and drove prices up. Read the complete essay [here](https://indianliberals.in/forum-of-free-enterprise/the-basic-truth-about-inflation-prof-b-r-shenoy-april-14-1977.pdf). type=content&p=8663). Needs editorial review._ --- ## [Musing] Controls and Freedom URL: https://indianliberals.in/musings/controls-and-freedom/ ### Body _Produced below is an essay by M.A Sreenivasan, published in a 1960 edition of __[Forum of Free Enterprise.](https://indianliberals.in/content/controls-and-freedom-by-a-d-shroff-dec-8-1960-2/)__ The author was the Food and Civil Supplies Minister of Mysore at the time. He begins by discussing the demerits of using shortages in supply as an excuse to impose greater state control, and goes on to take a more in-depth look at the role of self-imposed controls in enhancing freedom. _To talk of controls in a free economy may, at first sight, seem antithetical and incongruous, like talking of Kangaroos in Malabar Hill or of a strike in Peking. But such an impression would be superficial. For, controls are not inconsistent with freedom. Paradoxical as it may seem, they are necessary for true freedom to flourish and expand.  All around us, we see how the seeming contradiction between freedom and control is seized upon and exploited by enemies of freedom. It is part of their plan to confuse people into believing that liberty is the same as laissez faire, and that individual freedom means the law of the jungle, and thus to condition the people to accept regimentation.  It happens that I am one of the lucky few that have not spent all their life at the wrong end of the control business. I was, for a few years, actually administering controls, in an economy that, under the regime of a Maharaja, seemed freer than it is today.  As Minister for Food and Civil Supplies in Mysore, I presided over a bewildering maze of controls and permits and licences- a veritable Queutopia, to use Sir Winston Churchill's expression. Fresh territory was added to the Queutopian empire at each session of the Legislature, and by Ordinances in between. My officers and I controlled and rationed foodgrains of every kind, from rice, ragi and wheat, to all sorts of pulses and grams. We controlled steel, cement, coal and petrol and kerosene, timber and railway wagons. There was control over cotton and cloth, on wool and silk. One control speedily gave birth to another. Control of foodgrains led to control of fuel, and then to sugar and jaggery, and on to potatoes, and to groundnuts and then to tamarind, and from tamarind to chillies, and from chillies to onions. Every complaint of a shortage or high price of any particular thing became the excuse for imposing control on that thing. Seekers of permits and licences crowded the multiplying offices; and the queues got longer and longer.  It will take long to describe the ingenuity, inventiveness and plain unvarnished mendacity with which people sought to evade the controls that sprang up around them or, at least, to dull their edge. It was quite usual to find what were called ghosts in food ration cards- the ghosts being imaginary members of a household. A favourite ghost was a living grandmother or grand-aunt who appeared as a mouth to feed in many ration cards- reminding us of the Devas and Asuras of old who had four, ten or a hundred heads! Remote villages in jungles and swamps, that were listed "Becharak", that is, without light, uninhabited, because they had been abandoned, suddenly sprang to life and teemed with population- judged from the rations claimed by the imaginary inhabitants. And so it was in one form or another with each thing that was controlled. Control beget hardship, hardship beget resentment, resentment beget evasion, evasion beget black market, black market beget corruption. It was a dismal business.  It fell to my lot to be associated with those war-time controls. It was an irksome and unpleasant job. The mantle of buying and selling foodgrains ill-fitted my shoulders, or those of my officers. I hoped it was but a temporary operation- like blocking a canal to desilt it and repair its banks and sluices, and looked forward to the day when the controls and restrictions would be a forgotten nightmare. Happily, the war was over at last. With the advent of peace, and with the coming of independence, people eagerly hoped that the days of regimentation would be over.  Gandhiji, as is well known, was firmly against controls and their continuance. Rajaji abolished food control and rationing in one bold sweep when he was Chief Minister of Madras. But Gandhiji and Rajaji were lovers of freedom. They did not hanker for power.  War is a favourite excuse for regimentation of the people. The excuse for the controls and bans I have described was that there was a war on at the time. The controls and prohibitions were imposed under a high-sounding omnibus enactment known as the Defence of India Act. But in peace time, dictators, and rulers that have tasted power, quickly think of new wars to be waged. There is, for instance, the perennial war against poverty, and the imperative need to fight it "on a war-footing". This kind of war has one advantage that a real shooting war cannot offer. It has no end.  The war-time controls were plain, obvious and unsophisticated. Today's controls and taboos are subtler, more refined, more pervading and less obvious. They are not ugly coils of barbed wire. They are high-walled prisons of polished marble. The God invoked, the Deity in whose name they are imposed, is not the God of war, but a socialistic Juggernaut whose revelations and commands are vouchsafed to the common people through high-priests, in the form of Five-Year Plans.  The old war-time controls were imposed under the Defence of India Act. Today's encroachments on freedom are not for the defence of India against an alien enemy. They are for the defence of the people against themselves. These stifling endearments, these paralysing embraces of our Government are to save you and me from ourselves, from our silly ideas and initiatives, our rash enterprises, our mad ways and bad habits, and our crazy notions of freedom- for, does not the Government know better than you and me, what is good for us, what we should or should not do?  And, in place of the war-time plea of foreign aggression we have now the plea of foreign exchange, by reason of which the Government has no alternative but to decree fresh sets of controls, permits, quotas and licences.  As a result of all this, our Central Government at Delhi exercises a concentration of power, and operates an array of far-reaching controls that dictators may envy. Just as the Imperial Government did during the war, our democratic Government today controls or dictates the price of steel and cement, sugar and paper, coal and petrol and kerosene oil, coffee, tea and rubber, and a hundred other things. In addition, our Government controls practically all forms of transport; - the fraction that is not controlled is strictly licenced. The bulk of the mining industry and a large part of other industries are reserved for the State- the public sector, as it is called. Government has taken power to say what industries may or may not be started by a citizen or by private enterprise and how the enterprise may or may not be financed, organised or expanded. The Government's State Trading Corporation has a monopoly or a favoured position in buying and selling several important commodities, and is poised to invade and annex more territory. In the name of agrarian reform, our Government has established a firm hold - almost a stranglehold - on land and agriculture. To crown it all, by nationalising life insurance, by nationalising or gaining sway over most of the banks in the country, and by its credit and currency operations the Government has now got a tight grip over the monetary affairs of the people that a few men in New Delhi can, by remote control as it were, alter or reduce the value of the rupees in your pocket and mine, shrink the worth of our pensions or savings by the pressing of a button. You cannot run, much less start, any industry or business today, without approvals and permits from a number of officials and Ministries and without maintaining suitable envoys in New Delhi, or making costly pilgrimages to that New Mecca-cum-Kashi. You cannot go abroad even to study modern techniques or get new ideas without the sanction of another set of officials, unless, of course, you can manage to get included in one of the official delegations to various parts of the world, to study or demonstrate methods of agriculture - or other culture, such as music or dancing.  To defend our health and our morals against ourselves, our Government has imposed Prohibition. So far, no one is sure if this post-independence control has improved either the health or the morals of the controlled. But no one has any doubt that it has not improved the morals of the controllers. Prohibition takes pride of place among the many controls that have given rise to the large-scale corruption and the disrespect for law that we meet with everywhere. Rumour has it, however, that this cloud, if cloud it can be called, has a bright silver lining; that wherever Prohibition has been imposed, it has created a new and flourishing industry.  A more striking example of the effect of years of control and regimentation on the minds not of the ruled, but of the rulers, is the statement recently made by the Prime Minister that the Government were thinking of controlling prices as a means of preventing them from going up. One would have thought that a whole decade of experience in administering price-controls would have been enough to bring home the lesson that, so long as inflation continues unchecked, one can as effectively hold the price line by clamping on a fresh set of price-controls as he can bring a fever down by breaking thermometers.  I have described, in some detail, the picture of the old war-time controls we had to endure when we were a subject nation; and of the peace-time controls we are now subjected to as an independent nation, as I know that the matter is very much in our minds today, when we begin the fourteenth year of our Independence.  "There is absolutely no limit," observed Bertrand Russel, "to the absurdities that can, by Government action, come to be generally believed. Give me an adequate army with power to provide it with more pay and better food than falls to the lot of the average man and I will undertake within thirty years to make the majority of the population believe that two and two are three, that water freezes when it gets hot and boils when it gets cold, or any other nonsense that might seem to serve the interest of the State. No person who did not enthusiastically accept the official doctrine would be allowed to teach or to have any position of power. Only the very highest officials in their cups, would whisper to each other what rubbish it all is; then they would laugh, and drink again."  One of the official doctrines dinned into our heads today is that people of this country cannot, as individuals, or groups of free men, find the resources needed to improve the nation's living standards, and that the State has therefore to step in and take charge of wide and increasing areas of the normal activities of the people. It is astonishing to see the number of people who have come to accept this doctrine as true. They have been converted to believe that the Government gets its money, not from men and women like you and me, or loans borrowed in our name, but in the form of rain from the sky; and that the State gets its man-power not from us, our sons and daughters but from a genie raised by rubbing an Alladin's lamp hidden in the Secretariat.  I have said controls are a necessary ingredient and preservative of freedom. What should be the nature and extent of controls in a free economy?  The controls that have a rightful place in a free economy are those that provide the maximum of assistance with the minimum of interference; controls that regulate and safeguard, not those that regiment and emasculate; parapets, not road blocks; hedges, not barbed wire enclosures. The controls that freedom needs and welcomes are not controls imposed from outside but self-imposed, in-built ones, like the nitrogen in the air we breathe, without which our lungs would get burnt by the oxygen, like the glands and hormones that regulate the beat of our hearts and the size of our bodies and keep us from shaping into giants or dwarfs. I like the controls of roaring flames and fierce explosions in the Rob-Royce engine of a Boeing airliner that carries us safely and speedily to the ends of the earth.  Controls in a free economy should be like traffic control on a busy highway - strict regulation that does not impede, but helps to make the flow of traffic safer, smoother, and speedier.  The most perfect of all the controls that freedom must have is self-imposed controls - the control exercised on every man by his own conscience, the Swadharma commended by Gandhiji, as opposed to "the violence of the State" he warned against. This control is God-given. It is omnipresent and incorruptible. It laughs at evasion. It leads to no black markets.  Can there be a more thorough, a more total way of controlling people than to post an understanding and friendly policeman to accompany each citizen? Yet, this really is what the built-in control of conscience does to every man - so long, of course, as religion is not exiled, so long as Dharnza is not dethroned. Would it not seem megalomania to dismiss or to destroy the power and influence of these four hundred million built-in policemen of freedom, and to hire a horde of officials and underlings to enforce a hundred controls and commandments?  In the days of horse-drawn broughams and dog-carts, it was the fashion to cut off the tails of the horses and to employ uniformed lackeys equipped with whisks to keep flies away from the animals' posteriors. Of course, the fashion provided new employment. But by removing the built-in controls against flies, it left the poor horses at the mercy of the lackeys.  Not a few of the policies and procedures of our Government are reminiscent of that bygone fashion. I doubt if even the cunning men that invented the fashion could have dreamed that it would provide the inspiration for so many of our current official doctrines and plans.  When can we hope to see the end of Control-Raj and the attainment of Swaraj? Can anything be done to hasten the advent of that day?  There are, of course, many remedial measures that can and must be undertaken. But, considering the number of years our people have endured and grown accustomed to controls, and the extent to which their minds have got conditioned, it may be too much to hope for quick results. The treatment may be long drawn.  If I were asked to prescribe, I would begin by administering a few antidotes. These would be in the form of further controls "on a war-footing", of which I would suggest the immediate imposition of the following:  - Control over deficit financing as a means of preventing the cruelty of inflation. - Control of the output of the Currency Printing Press at Nasik, and a ban on the erection of more currency printing presses. - A ban on the imposition of new controls. - Licensing of speeches - and the levy of steeply graded licence fee on speeches exceeding five minutes' duration, with surcharges on Platitude, Piffle and Twaddle, and penalties on Sermonisation. _Last week's musing: [THE SWATANTRA MANIFESTO](https://indianliberals.in/content/the-swatantra-manifesto/)_ --- ## [Musing] Crushing Burden of Taxation - Nani Palkhivala URL: https://indianliberals.in/musings/crushing-burden-of-taxation-nani-palkhivala-1958/ ### Body _**The following excerpt is taken from Nani Palkhivala's essay, "Crushing Burden of Taxation," published by the Forum of Free Enterprise in 1958. In this piece, Palkhivala critiques India's tax laws and the unchecked power of the Executive, advocating for a balanced approach that promotes fairness, equity, and economic growth.**_ Under the Constitution of India, the balance of powers is very well preserved between the Legislature, the Executive, and the Judiciary. However, in the eighth year of the Republic, it is clear to any student of constitutional law or public affairs that the Executive has become predominant, and the Legislature and Judiciary are not given the importance necessary to preserve this balance. The Executive’s power is unchecked by any effective opposition inside Parliament or by any mobilized public opinion outside it. One of the consequences of this state of affairs is that the Executive is able to rush through the Legislature any piece of legislation. While there is comfort in knowing that the Supreme Court and the High Courts still serve as the bulwark of civil liberties, the courts' incorruptibility is of little avail if the statutes and executive regulations are numerous, frequently changing, complex, and loosely drawn. These laws often give excessive discretion to administrative authorities. Recent tax laws in India illustrate this problematic legislation. For instance, the Gift Tax Act, 1958, was rushed through with the Select Committee being given less than a week to report on the Bill. No revenue would have been lost had more time been allowed. This haste has two major drawbacks: loose drafting gives rise to problems that could have been avoided with better care, and the legislation often includes provisions that are unjust. The recent tax laws reflect some unsettling trends. For example, after 1956, income tax is payable by a registered firm over and above the income tax payable by its partners, resulting in double taxation. The Wealth Tax Act of 1957 imposes wealth tax both on companies for their assets and on shareholders for their shares, even though this is not justified by fairness or equity. These policies not only burden the taxpayer but also disincentivize investment and business growth, stifling economic progress. Another concerning aspect is the hyper-technical administration of these laws. The law governing the registration of firms under the Income-tax Act is so ambiguous that even leading firms of advocates and attorneys, with expertise in tax matters, face challenges. A law that demands registration be refused on minor technicalities, such as the precise way a firm lists its partners' shares, becomes an instrument of oppression rather than governance. When laws fail to account for the spirit of justice and fairness, they lose their moral legitimacy and encourage widespread evasion. Beyond the complexities and technicalities, there is a fundamental need to rethink the philosophy underpinning these laws. Palkhivala argues that the very principles on which taxation is based should promote economic growth and fairness, rather than simply serve as tools for revenue extraction. The current approach, which is driven by short-term gains and arbitrary levies, is detrimental to the long-term economic health of the nation. A more balanced approach would consider not only the immediate needs of the government but also the broader implications for economic development and public trust. Furthermore, the pernicious doctrine of 'business connection' under Section 42 of the Income-tax Act has had adverse consequences on India's trade with foreign countries. Few other nations tax on the basis of a mere business connection, and this policy has dissuaded foreign investors from bringing capital and expertise into India. The long-term impact of such policies can far outweigh any short-term revenue gains, undermining India's efforts to develop its trade and industrial base. Tax laws need to be responsive to rational arguments and public opinion. Unfortunately, many modern tax provisions appear aimed more at trapping the tax-evader than ensuring fairness to honest taxpayers. If the income-tax, wealth-tax, and expenditure-tax returns of some of the wealthiest in India were made public, the nation would see how ineffective these laws have been in curbing evasion. It is high time attention was paid to the fact that there are also honest taxpayers in this country, and laws should not be so harsh that they bear unfairly on them. The essence of democracy lies in a government that is responsive to rational arguments and public opinion, not one that creates policies that undermine the basic principles of justice and fair play. Palkhivala’s argument is clear: taxation should be an instrument of public welfare, not a tool of oppression. The laws must reflect a balance between the state’s need for revenue and the citizen’s right to fairness and equity. The goal should not merely be to fill the coffers but to foster a system where both governance and business can thrive in harmony, creating a prosperous and equitable society. [Read the complete text here](https://indianliberals.in/forum-of-free-enterprise/crushing-burden-of-taxation-n-a-palkhivala-dec6-1958.pdf). type=content&p=8631). Needs editorial review._ --- ## [Musing] Dangerous Counter Philosophy - Piloo Mody URL: https://indianliberals.in/musings/dangerous-counter-philosophy-piloo-mody/ ### Body _Published in 1979, Piloo Mody's book 'Democracy means Bread and Freedom'  was an important piece of work which was written in a lucid style and discussed key ideas relevant to liberal thought in its economic, social and political understanding. Produced below is a chapter from the book. _Let us consider the nature of the 20th century confrontation between democrats and authoritarianism. Obviously the latter, except for proclaimed Fascists, cannot directly advocate a suspension of liberties and advocate the virtues of totalitarian rule. After all, freedom is ingrained too deeply within the modern ethos to permit such an onslaught. What is more, a direct assault on the concept of freedom would severely restrict their sphere of operation and expose their clandestine motive, which is to create a totalitarian order using in the meanwhile all the rights and protection offered by the democratic State. It is therefore but natural that would-be dictators should advance arguments which, while showing concern for the people, assiduously persuade them to barter away their liberty and freedom for a loaf of bread.  The authoritarian who asks “What is freedom to a hungry man?” and then goes on to assert that fundamental rights are meaningless and cannot be exercised without economic well being is sure of a sympathetic response where bread is scarce. What he never explains is how the surrender of freedom will put bread in a hungry man’s belly. In answer to this simple question, the authoritarian will talk about entrenched vested interests which are resisting change, profound theories about class reflexes, describe the evils of capitalism and colonialism (whichever is applicable, if not both), speak about the conspiracy between capital and the ruling classes, attack monopolies bent on exploitation and profiteers who inflate prices and keep wages down, harp on the eternal conflict between the haves and the have-nots, and proclaim that only a constant class struggle, terminating in the destruction of the bourgeoisie, will liberate the common man from his yoke and establish a dictatorship of the proletariat. And should this not be enough- there is always the ultimate- the State shall wither away!  These fancy arguments have duped many an honest broker whose concern for human well-being is not to be decried. There is an element of truth or reality easily visible in all these arguments which, incidentally, are given with such breath-taking rapidity, that the most rational of men may have difficulty in catching either their simplistic logic or avoiding the many pitfalls inherent in their subtle deceptions.  We are not concerned here with demolishing these arguments dialectic-wise or even questioning some of the assumptions made. It is merely sufficient to state that barter of freedom for bread is a bad bargain- particularly if we can and must have bread and freedom. Dwight D. Eisenhower put it admirably when he chastised his countrymen by saying: “If all that Americans want is security, they can go to prison. They’ll have enough to ear, a bed and a roof over their heads. But if an American wants to preserve his dignity and his equality as a human being, he must not bow his neck to any dictatorial government.” However, there is no controverting the fact that in many a society, even an affluent society, men have gone without bread in the midst of plenty. A hungry man surrounded by general opulence and waste is an ugly sight which no argument or explanation can justify. Far worse, of course, are the unprivileged millions in a developing country where food, clothing and shelter are the luxuries of the rich and the ruling classes, who have enough surplus left over to indulge in cheap foreign goods, which are expensive because they are prohibited! It is such simple logic merely to state that if the rich were eliminated, there would be more for the poor, that the rights of a few cannot hold the masses to ransom. Agreed agreed, agreed. But will someone please calculate and bluntly state how, by distributing this insufficient wealth and restricting the rights of a few, the authoritarian are going to employ the masses, feed and clothe them and deliver unto them their basic and fundamental rights?  If it is the principle of equality that necessitates this violence, what about the affluent nations? Were the men born in advanced countries created more equal than the ones born in backward lands? And if the distribution of wealth is the moral criterion of this argument, then the Soviet Socialist Republic- the second most powerful nation in the world, is the worst example of the distribution of wealth- not only amongst its own citizens but internationally.  Before in any competitive argument, let us pause and return to fundamentals. It is an old saying: “Man does not live by bread alone, but bread he must have.” What is the rationale for providing it? We cannot deviate from our original premise: “All men are created equal and that are endowed by their Creator with certain inalienable rights, amongst which are life, liberty and the pursuit of happiness.” If one accepts this proposition, one can not shirk the responsibility of defining its full scope, defending its logic, and discharging its obligations without being open to the charge of dishonesty.  When we speak of rights being inalienable, it is society and its institutions that are charged with the responsibility of ensuring the exercise of these rights and of seeing that these rights can be enjoyed by all. And if amongst these rights are the right to life, then the equality and content of that life has to be defined. Surely, it was never the intention of the author of the Declaration that the right to life is merely the right to have it protected from assault or death! Nor can it be argued that the Creator who gave life intended that that life should or could exist without nourishment, material and spiritual, in the pursuit of its happiness!  Then surely a duty is cast upon the State and the individuals who constitute that society, that they shall organise themselves in such a manner as would ensure that all their members can enjoy the right to life. What economic measures we may recommend to make that life meaningful await a later discussion, but the responsibility itself must be accepted here and now.  Another subtlety emerges here. Does man get his bread irrespective of his contribution, or does he have to exchange value for it, either by purchasing it with money or exchanging it against work? In an extreme case, can a man demand bread and at the same time refuse to work? The situation is paradoxical. If his right to life is inalienable and society has been charged with the responsibility of ensuring it, how can society bargain and demand value in return? This forces us to reflect on what rights at and how they can be exercised.  It is inherent in the nature of rights that they require action originating in the man asserting them. Freedom of speech requires the will to express- freedom of movement the desire to move- freedom of profession the exercise of choice- freedom of worship the need for faith- and so on. Similarly, the right to life imposes an obligation to work. For those incapable of it, society’s responsibility is absolute and it must carry the social overheads. It is obvious that the social overheads in a poor country cannot compare with those in an affluent society; nevertheless the quality of concern must be maintained not only within society, but for those outside of it. This leads us to a more practical problem of providing work.  In despotic societies this is simply achieved. The State orders a man to dig ditches and fill them up in exchange for bread. But democratic societies cannot do that. For a man’s right to choose his profession is also inalienable and is consistent with human dignity and necessary for creating self-esteem. This is the only path to self-realisation and the founding of a robust citizenry, which is the ultimate safeguard of a self-perpetuating democracy. The only restriction on a man’s freedom to choose his profession is his own capacity and efficiency. To avoid the charge that society has deprived man from acquiring such talents as are necessary, it is imperative that the State give equality of opportunity to each one of its members to qualify in whatever field of human endeavour is most suitable to his genius, in pursuit of his inclination and in satisfaction of his aspirations. If even with such facilities provided a man does not measure up to his chosen profession, then it must be what “God made him.”  By now we have come a long way in accepting the guidelines that history imposes on us, experience dictates to us, expediency forces on us and the future implies us to implement. In the process of acceptance and rejection a picture of a truly democratic society emerges. In restating the yardsticks we will delve into the very nature of man, his origin and evolution, to find the narrow path between his instinctual behaviour, his physical needs, the capacity of his mind to grasp and to grow, the fulfilment of his aspirations, and the enjoyment of his rights in the pursuit of his happiness.  In so doing we will have to note past actions that are inconsistent with his accepted notions, and fashion tools, methods, and institutions capable of ensuring a just and democratic society. Too many people feel that all answers must be available here and now. This is absurd, as society and social relationships are dynamic, and human experience is constantly expanding, to say nothing of knowledge, technology and resources. So man can ignore change only at the peril of his own existence. Edmond Burke felt that the change was the most powerful law of nature. However its realisation may take some time.  Henry Thomas Buckle in his _History of Civilisation_, in describing the process of realisation and change, says: “Every new truth which has ever been pronounced has, for a time, caused mischief, it has produced discomfort, and often unhappiness; sometimes by disturbing social and religious arrangement, and sometimes merely by disruption of old and cherished association of thoughts. It is only after a certain interval, and when the framework of affairs has adjusted itself to the new truth, that its good effects preponderance; and the preponderance continues to increase, until at length, the truth causes nothing but good. But, at the outset, there is always harm. And if the truth is very great as well as very new, the harm is serious. Men are made uneasy; they flinch; they cannot bear the sudden light; a general restlessness supervenes; the face of society is disturbed, or perhaps convulsed; old interests and old beliefs have been destroyed before new ones have been created. These symptoms are the precursors of revolution; they have preceded all the great changes through which the world has passed.” It is therefore imperative that a democratic society fashions its institutions to accommodate the ever-changing social relationships inherent in the progress of development and welfare without too much strain, resentment or obstruction on the part of those whose interests are affected. Whether the electoral system or adult franchise by itself is capable of bringing this about is a matter of opinion which can be discussed. But if wanting, it is obvious that other institutional arrangements can have to be made to reach the desired goal.  Harold Laski on the other hand, under the lure of Marx and the Soviet revolution, is of the opinion that change is inherently contrary to the nature of a liberal democracy, because the levers of power remain in the hands of the owners of capital and the instruments of production, who by their very nature pursue nothing but profit. He holds that unless the class relations of production are altered by the destruction of the manipulators of capital, no peaceful transformation is possible. He has anchored his entire thesis on the argument that a stage is when the State, charged with maintaining law and order and facilitating peaceful change in satisfying the ever-expanding demands of the people, will use it's coercive power to suppress the demands. Laski maintains that it is this resistance to change within liberal democracy, because of the producers need for world markets, that is the main cause of the emergence of Fascist dictatorships. So far the argument is plausible, but then he goes on to maintain that in the Soviet Union, because of the common ownership of the means of production, “the substance of the law” will be different and therefore the techniques of change, distribution of goods, will _ipso facto _respond to the rising expectations. The Soviet Union requires no markets for its goods, and therefore, according to him, will be peace-living and anti-war and will readily surrender its sovereignty to international law. Also not anticipated by Laski was the arms race during the Cold War, when the obsolescence of armaments was so rapid that it left the competing countries with such monumental stocks of outdated arms that the Soviet Union started using them as tools of diplomacy, selling and giving them away as “prizes” to those who supported Soviet policies. It is of course assumed, though not stated, that until the final goal has been reached, until class relations in the entire world change, it is perfectly all right for the Soviet Union to play the imperialist game!  This is too much. The theories of Hobbes and Austin, brought up to date by Kelson, are dismissed by Laski as an exercise in logic rather than life. Laski in fact demands that unless the functioning capitalist societies like Great Britain, the United States and the western democracies can demonstrate their capacity for peaceful change, the arguments of the theory of Law are untenable, although he does admit that they are unanswerable. The real weakness of Laski’s argument is that he does not demand a similar performance from the Soviet Union except to say that much would depend on the Soviet Union’s capacity for raising the standard of living of its citizens so as to compare favourably with that of the capitalist world.  The inference is clear and has even been stated elsewhere, that capitalist societies have raised standards of living to a point for socialist societies to emulate, but now that capitalism is in “contraction”, they will not be able to do so any longer. Then why don't we wait and see, let the socialist societies catch up and give a better example? Isn’t it evident what Laski is seeking? Nevertheless, Laski, amongst others, has rendered some service by articulating the pitfalls of a complacent democracy by pointing out the conflict that may arise and has arisen between an economic oligarchy and a political democracy, where the laws and coercive power through an adult franchise is held by the masses. What does not seem to have been studied in depth is why this conflict must lead either to revolution or Fascism. After all, the vote is still with the people, and if their institutions, like labour unions, co-operative societies and political parties, function adequately, there is no reason, except if there are malpractice and violence, why the majority cannot form a government that has full popular approval. Laski’s rejection of this proposition is on shaker ground. He lacks faith in the people knowing what is best for them, and complains that the mass of men and women, even at election time, “are scarcely articulate about their wants, and even when they are articulate are not trained to judge whether the solutions suggested are in fact an adequate response to their desires.”  This peculiar statement challenges the very basis of politics degrades the entire struggle of man for equality, rights and liberties, and assumes that there is a higher class of man- the social changes or the social short-changers- who can ordain what the masses should demand and get! Paradoxically, Harold Laski’s brilliant but insufficient analysis, if correct, could have led to only one conclusion- an alliance between the Western Democracies and Fascist Germany, Italy and Japan against Soviet Russia in World War II. Hitler wanted it, and so did many others on the side of the Allies. Nevertheless, it did not happen. Is there any more evidence than this required to prove that there must be some better, higher or more moral force in democracy determining in course than the trite anchor of Laski’s theory built on class relationships? It would not be out of place at this point to recall the Hilter- Stalin treaty.  Laski’s final doubt, after positive assertion about democracy having the latent power of recovery to advance human well-being, is the crux of the matter. Even he cannot explain how the process of coercion can be transformed into the process of consent, and even he cannot answer how consent gets woven into the Soviet system he so admires! I have dwelt at some length with Laski’s theory because he has rendered service to the cause of democracy by his timely reminder that the democratic process can be frustrated by group interests. It has happened in the past; it may happen in the future. Therefore it is incumbent on those involved in the creation of democratic societies to consider this problem and create the necessary institutional safeguards.  Many eminent men in the past have been aware of this danger and cautioned against it. Whether it was John C. Calhoun in the U.S. Senate in 1838, or President Grover Cleveland half a century later in his annual message to Congress, whether it was Abraham Lincoln the legislator or Abraham Lincoln the President, whether it was Woodrow Wilson or Franklin Roosevelt- all felt compelled to warn and expose the danger monopoly capital presented to democratic society. In the words of Roosevelt: “The liberty of a democracy is not safe if its business system does not provide employment and produce and distribute goods in such a way as to sustain an acceptable standard of living.”  However, it was Justice Oliver Wendell Holmes who put it most explicitly back in 1896 when he said: “One of the eternal conflicts of which life is made up is that between the effort of every man to get the most he can for his services, and that of society, disguised under the name of capital, to get his services for the least possible return.” And the correct response to this, according to me, came from Pope Pious XII in 1946, again a half century later, when he said: “An erroneous doctrine affirms that you- representatives of labour-and you- representatives of Calitak- are forced to battle each other in butter and implacable struggle, and that industrial pacification can it be reached except at this price… To obtain the desired harmony between labour and capital, professional organisations and unions have been devised, both of which are intended not as a weapon directed exclusively towards defensive and offensive war, which causes reactions and reprisals, not as an overflowing river, which is divided, but as a bridge which unites.” _(Excerpt from the book 'Democracy means Bread and Freedom' by Piloo Mody)_ --- ## [Musing] De-Stalinisation Versus Communism URL: https://indianliberals.in/musings/de-stalinisation-versus-communism/ ### Body 'As a mighty tree with deep roots does not fear any storm so that the new socialist world does not fear any adversary or shock.' It is obvious that the "socialist" world is no longer a mighty tree ( if ever it was ) with deep roots and it has to contend with its own problems as much as with the external ones. _Nikita Khrushchev’s denouncement of Stalin and his criminal rule at the 20__th__ Congress of the Communist Party in 1956 remains an important milestone in the history of the now-discarded project. In moving away from the totalitarian rule of Stalin, some contemporaries saw hope for a more democratic and tolerant USSR where the party would eschew the personality cult._ _However, Adam Adil writing in the Freedom First in 1961, dismissed the destalinization project of Khrushchev. He questioned the complicity of the leaders who now denounced Stalin’s brutality in perpetuating the same system. Moreover, as Khrushchev promoted the policy of peaceful co-existence with the capitalist sphere, the more strident Maoist China took the Stalinist line of an inevitable conflict between capitalism and communism. _ _For Adil, Stalin’s totalitarian state was a logical continuation of the Marxist prescription via Leninist methodology. Marx’s advocacy of violent class struggle translated into the Bolshevik revolution to the dictatorship of the single party in the name of the proletariat. Adil argued that Lenin himself had dictatorial tendencies and hence any bid to destalinize would need to confront the basic tenets of Marxism-Leninism. It would take a Mikhail Gorbachev to unravel the system but in 1961 that laid way ahead in the future._ _Produced below is an excerpt from the article._ In his speech on the opening day of the 22nd Congress of the Soviet Communist Party, Mr. Khrushchev spoke brave words: ‘As a mighty tree with deep roots does not fear any storm, so that new socialist world does not fear any adversary or shock.’ From what followed at the Congress itself and subsequently, one can safely conclude that Mr. Khrushchev’s assertion was more in the nature of wishful thinking than a statement of fact. For the first time in its history the communist world has begun to show up, more pointedly and more abjectly, its internal contradictions, its political and psychological stresses, clash of its personalities and their mutual rivalries and bickerings. It is obvious that the “socialist” world is no longer a mighty tree ( if ever it was ) with deep roots and it has to contend with its own problems as much as with the external ones. The de-Stalinisation process which Mr. Khrushchev set in motion with his speech at the 20th Party Congress in 1956 and his world shocking admissions about the Stalin regime, (those were no revelations as they were known throughout the world for a number of years), has been apparently going on still; and this itself has divided the communist world into two, hostile camps: one represented by the Soviet Union, which decries Stalin and talks about “co-existence” and the other by China, which extols Stalin and speaks about the inevitability of war between capitalist and socialist nations with the ultimate destruction of capitalism. Russia enjoys the support of most East European Communist countries and China has the backing of Albania, the tiny Muslim country on the Mediterranean. The communist parties in the various non-communist countries are generally divided into factions, which owe their loyalties to one or the other camp within the communist world. All this indicates that what was claimed to be the ‘monolithic community’ of the communist world has received a shattering blow. The removal of Stalin’s mummified body from Lenin’s Mausoleum in the Red Square and its burial at an obscure place, and the changing of the name of the cities, towns or streets which were, for over two decades called after Stalin, represents the dramatic finale of the efforts of the present Communist rulers of Russia to extricate themselves from their past and put on a new garb of legitimate successors of Lenin. Is it not a fact that each one of the present leaders of the Soviet Union was closely associated with Stalin’s regime and abetted and helped in the imposition of a reign of terror and death over the Russian people for nearly three decades? It is rather intriguing that none of these soviet leaders has given expression to a sense of guilt or repentance for his own role in the perpetuation of Stalinist tyranny and in the cold murder of thousands of their own innocent comrades. _The full text of the article can be accessed _[_here_](http://www.freedomfirst.in/uploads/issues/pdf/115.pdf)_. _ _[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context._ Read more: [Memories of SV Raju](https://spontaneousorder.in/memories-of-sv-raju/) --- ## [Musing] Democracy and Liberalism : Contrasting Ideals URL: https://indianliberals.in/musings/democracy-and-liberalism-contrasting-ideals/ ### Body _The following piece is an excerpt from Sauvik Chakraverti's book titled ['Natural Order : Essays Exploring Civil Government and Rule of Law'.](https://indianliberals.in/liberals/natural-order-essays-exploring-civil-government-and-the-rule-of-law.pdf) The author discusses the contrasting understanding between democracy and liberalism by quoting the works of prominent classical liberal thinkers such as Hayek. The insights offered in this work are timeless for conversations surrounding democracy and liberalism. _Since I may have lit a fire in the minds of many an aspiring liberal politician – which was my intention – I will conclude with some sobering thoughts on the essential contradictions between the liberal project and that of democracy. The two are not identical. This is the prime reason why even the so-called ‘liberal democracies’ of the West seem more like ‘socialist democracies’. Indeed, social democrats in the USA call themselves ‘liberal’! It seems to me that it is vital that the differences between the two doctrines be clearly restated. Allow me to quote at some length from Hayek: _“Liberalism is concerned with the functions of government and particularly with the limitation of all its powers. Democracy is concerned with the question of who is to direct government. Liberalism requires that all power, and therefore also that of the majority, be limited. Democracy came to regard current majority opinion as the only criterion of the legitimacy of the powers of government. The difference between the two principles stands out most clearly if we consider their opposites: with democracy it is authoritarian government; with liberalism it is totalitarianism. Neither of the two systems necessarily excludes the opposite of the other: a democracy may well wield totalitarian powers, and it is at least conceivable that an authoritarian government might act on liberal principles. _ _Liberalism is thus incompatible with unlimited democracy, just as it is incompatible with all other forms of unlimited government. It presupposes the limitation of the powers even of the representatives of the majority by requiring a commitment to principles either explicitly laid down in a constitution or accepted by general opinion as to effectively confine legislation._ _Thus, though the consistent application of liberal principles leads to democracy, democracy will preserve liberalism only if, and so long as, the majority refrains from using its powers to confer on its supporters special advantages which cannot be similarly offered to all citizens. This might be achieved in a representative assembly whose powers were confined to passing laws in the sense of general rules of just conduct, on which agreement among a majority is likely to exist. But it is most  unlikely in an assembly which habitually directs the specific measures of government. In such a representative assembly, which combines true legislative and governmental powers, and which is therefore in the exercise of the latter not limited by rules that it cannot alter, the majority is not likely to be based on true agreement on principles, but will probably consist of coalitions of various organized interests which will mutually concede to each other special advantages. Where, as is almost inevitable in a representative body with unlimited powers, decisions are arrived at by a bartering of special benefits to the different groups, and where the formation of a majority capable of governing depends on such bartering, it is indeed almost inconceivable that these powers will be used only in the true general interests. _ _But while for these reasons it seems almost certain that unlimited democracy will abandon liberal principles in favour of discriminatory measures benefiting the various groups supporting the majority, it is also doubtful whether in the long run democracy can preserve itself if it abandons liberal principles. If government assumes tasks which are too extensive and complex to be effectively guided by majority decisions, it seems inevitable that effective powers will devolve to a bureaucratic apparatus increasingly independent of democratic control. It is therefore not unlikely that the abandonment of liberalism by democracy will in the long run also lead to the disappearance of democracy. There can, in particular, be little doubt that the kind of directed economy towards which democracy seems to be tending requires for its effective conduct a government with authoritarian powers.”_ In the very next essay, “Whither Democracy?”, Hayek is mercifully much less polite. Starting off saying that ‘unlimited democracy is the problem of today’ he adds that the idea of a ‘sovereign’ parliament has ‘destroyed the old idea of the Rule of Law’: that is, the traditional idea of a ‘government under law’ has been lost. What we have, therefore, ‘is in truth lawless government’. Let us recall what the purpose of the ‘Rule of Law’ is: and that is, to safeguard individual freedom. The idea was to restrict coercion only towards just ends, which means obedience to the general rules of individual conduct. In these lies the ‘common will’. “What makes a community is the common recognition of the same rules.” With unlimited – and therefore lawless – democracy, we have confused legislation with true law. These measures passed by a legislature reflect ‘particular wills’. The original purpose of summoning parliament in England was to vote on taxation. But, over time, this body took over two separate functions: the running of the government as well as the making of the law. Hayek says that it would have been preferable had the House of Lords (which was the highest court in the land) kept the development of the law to itself: “The triumphant claim of the British Parliament to have become sovereign, and so able to govern subject to no law, may prove to have been the death-knell of both individual freedom and democracy.” But there is worse: in a strictly limited democracy, the people vote for a limited legislator, and this amounts to ‘choosing between alternative ways of securing an overall order resulting from the decisions of free individuals’. However, voting for an unlimited legislator is very different, for it amounts to electing someone with the power to confer special benefits. In such an assembly, a majority can be formed only by ‘buying the support of numerous special interests’. _In an omnipotent assembly, decisions therefore rest on a sanctioned process of blackmail and corruption…. What we call ‘legislatures’ are in fact bodies continually deciding on particular measures, and are authorizing coercion for their execution, on which no genuine agreement among the majority exists, but for which the support of a majority has been obtained by deals. In an omnipotent assembly which is concerned mainly with particulars and not with principles, majorities are therefore not based on agreement of opinions, but are formed by aggregations of special interests mutually assisting each other…. The picture of the majority of such an assembly united by common moral convictions evaluating the merits of the claims of particular groups is of course a fantasy. It is a majority only because it has pledged itself not to a principle but to satisfying particular claims. An unlimited legislature which is not prevented by convention or constitutional provisions from decreeing aimed and discretionary measures of coercion, such as tariffs or taxes or subsidies, cannot avoid acting in such an unprincipled manner…. What happens is that political necessity created by the existing institutional set-up produces non-viable or even destructive moral beliefs…. [This…] is not democracy. At least it is not that ideal of democracy which has any moral justification.”_ Prior to this demolition of modern Western democracy, Hayek makes a confession that I wholeheartedly share: _“I must confess to preferring non-democratic government under the law to unlimited (and therefore essentially lawless) democratic government. Government under the law seems to me to be the higher value, which it was once hoped that democratic watchdogs would preserve.” _ It must not be forgotten that India is possessed of a ‘socialist democracy’ – and that never once during her 60-year long independence has ‘liberalism’ ever been on the political agenda. Indeed, the Representation of the People Act expressly disallows the formation of liberal parties: that is, those who will not swear by socialism and the socialist constitution. The Bombay-based Indian Liberal Group led by SV Raju filed a petition against this Act in 1994, but their PIL is yet to be heard! Raju recently wrote that one of his close associates died waiting for a judicial decision, and that the same fate is likely to befall him! The liberal politician in India must therefore lean more towards the liberal project than the democratic one. The objective must not be to win elections – we are effectively barred anyway; rather, the effort must be towards raising the people to demand a limitation of the powers of government, on its taxation, and on its functions. The goal must be individual liberty under the rule of law – which demands that the government be placed under legal restraints which it cannot alter. It has often been said that liberalism only happens ‘when the government is bound by a law that it did not legislate’. That should be the liberal goal. And towards that end all liberal politics should be directed. As Herbert Spencer wrote in 1884, _“The function of Liberalism in the past was that of putting a limit to the powers of kings. The function of true Liberalism in the future will be that of putting a limit to the power of Parliaments.”_ --- ## [Musing] Democracy in India URL: https://indianliberals.in/musings/democracy-in-india-by-jm-lobo-prabhu/ ### Body _The musing shared below is a 1959 winning essay in a writing competition organised by the Forum of Free Enterprise. The essay, authored by J M Lobo Prabhu, MP Lok Sabha (Udupi) 67' traces the development of the Indian constitution factoring in the various influences that have played a role in its making. It critically analyses the contradictions inherent in the Constitution and how it has played out in the working of the Indian democracy. The essay also emphasizes the excessive powers the Constitution has vested in the central government. It elucidates the role of Directive Principles in the Constitution and the implications of the socialist elements present in it. The essay argues that basic principles of democracy, such as the rule of law and sovereignty of the Parliament, are contradicted by elements in the Constitution itself. _ _You can read the complete, unabridged version here [Democracy In India](https://indianliberals.in/wp-content/uploads/2020/11/Democracy_In_India.pdf)_ It is difficult to trace democracy in India until the British, to take the odour out of foreign rule, began, about sixty years ago, to vest power progressively in the people according to economic status in urban and rural areas. After independence, with juvenile enthusiasm, the Constituent Assembly raided every country for the latest and the best constitution. In the framework of the Act of 1935 and on the British principles of the Rule of Law and the Sovereignty of the Parliament, the equality of the people has been established in meticulous detail. Like all schemes of men and mice, the results have not followed the expectations. In the name of democracy, the country now lies bound with restrictions which even the British did not dare impose. At least five sets of causes have operated, first, the deficiencies of the Constitution, second, the growth of usages contrary to the Constitution, third, the quality of the legislative and executive parts of the Constitution, fourth, the weakness of the organs of freedom, and lastly, the ignorance and incapacity of the people. Constitutions are based on the body of accepted social and economic principles. After considering the alternative of calling it the Socialist Republic, the Constituent Assembly declared India to be the Sovereign Democratic Republic. Nonetheless, at Avadi in 1955, the Congress decided to adopt the Socialist Pattern and have since imposed redistributive taxation and are determined to impose State trading and cooperative farming, the fundamentals of the Socialist Republic of the Soviets. The definite antithesis between socialism and democracy has not been appreciated. Socialism is based on the interests of the State, and democracy is on the interests of the individual. Democracy builds from below, and Socialism from the top. To the extent the State assumes ownership of the means of production, which is the basis of Socialism, the individuals become employees with little power to order their work or lives and less interest in their capacities or contributions. Where State ownership is complete, no competitive standards are left, where partial, the competition is unfair to private enterprise which has less authority and finance. The Avadi resolution*, therefore, affected the ethos of the Constitution, eviscerating it completely of its spirit and partly of its provisions. As a result, the people have steadily lost political power, which is being polarised in fewer and fewer individuals. This might be in accordance with the traditions of the people but not the principles of democracy on which it was sought to base the Constitution. An examination of the Constitution shows that its contradictions are susceptible to the polarization which has taken place. The Constitution opens with a catalogue of Fundamental Rights, of which only two are parents of the others, Article 14 assures equality before the law irrespective of religion, race, sex and residence, and Article 17 assures freedom of opinion and action. The elaboration in other Articles is generally limiting basic rights. Thus under Article 13, the door is opened for subordinate legislation by the inclusion of "orders, rules, regulations and notifications" in the category of laws made by the legislature. Even as early as 1929, Lord Hewett, in his book New Despotism had castigated the bypassing of the legislature through official rule-making and administrative tribunals because it contravened the Rule of Law which, according to Dicey, means "equal subjection of all to the **ordinary law** of the land, administered by the **ordinary law courts**. Both in the Centre and the States, the rules made by Government in numerous Acts are more extensive than the laws made by the legislature. Similarly, decisions of Administrative Tribunals and Government are tending to outnumber those of the Courts. Article 16 limits equality by allowing preference in public employment to the backward classes. However desirable it may be to advance these classes, their employment in public services without reference to their merits must affect the quality of the administration on which the advancement of the whole country and the interests of individuals are dependent. Article 17, which assures seven freedoms, is restrictive of the Freedom of Speech, which can be placed out of the jurisdiction of Courts by the claim of the security of the State. This power can be exercised by local and other authorities. In USA and UK, the courts can examine the grounds of security and so ensure that the administration does not gag its opponents. In respect of all seven freedoms, the State can impose restrictions with reference to previous legislations and reasonable grounds. The exemption in favour of existing laws confirms the heritage of the laws of the preceding foreign rule and the laws hastily passed on promises made by the Congress Party before coming into power, like zamindari abolition. Particularly in respect of the right to property, the power of the State to impose restrictions in the interests of the general public, especially with reference to Article 39, is destructive of the freedom assured. It opens the door to expropriation on grounds that the courts may be competent to examine but unwilling to overlook according to the political atmosphere of the time. The right to trade and industry has been further curtailed by the First Amendment, which has enabled the State to place restrictions, which the courts cannot question if the purpose is of nationalisation. Few have realised the blow this has implied to democracy. The law is now ready-made for the communists to order the life and work of everyone to any degree and on any terms. No one can legally resist the communication of land, industry or trade, of units big or small. Even before the Avadi session and only one year after the Constitution, Congress had laid the foundations of the Socialist State by the First Amendment of the Constitution. Article 22 enables the State to enforce preventive detention for three months and such further period as the Parliament may provide. Though the law of England allowed preventive detention during the period of the war, analogous provisions cannot be traced in the constitutions of other countries. No doubt, the person detained can obtain a Writ of Habeas Corpus from the High Courts, but they are not allowed to consider the facts but only the grounds of detention. Article 25, after reaffirming freedom of religion, proceeds to subject it to the laws already in existence and to grounds "economic, financial, political arid social welfare and reform". There is no parallel to this in the constitutions of other countries, which have full freedom of religion subject only to the criminal laws of the country. However laudable it may be to make religion conform to current theories, there is first an unwarranted interference in what is personal and, second, scope for secularisation which under a communist government can mean atheism. Even the right to propagate religion which was conceded to Christians to give up their claims to separate representation has not prevented the banning of foreign missionaries, though other foreigners with worse intents are welcome. The provisions of the Article leave all religions at the mercy of the ideologies of the reigning government. The changes in the laws of marriage and succession and in the management of temples and endowment, however desirable, were for the Hindus themselves to make according to the pleasure or pressure of those concerned. What has been forced is generally resented and frequently evaded. Article 30 assures minorities, whether based on language or religion, the right to establish and administer educational institutions of their choice without discrimination in respect of State aid. In Kerala, the Education Act can force teachers and books, which the minorities abhor, while even in the model State of Madras, grants are withheld from private schools which do not agree to give free primary education. Various experiments in the medium of instruction, the subjects of study, and the method of teaching, including the basic pattern, have been forced on schools destroying standards they had built up for years. The Article, therefore, is a dead letter because of the overwhelming power of the State and the helpless position of educational institutions. Article 31 destroys the sanctity of private property because while all constitutions allow that land may be acquired only on payment of due compensation, it makes an exception to all expropriative laws passed eighteen months before the date of the constitution. The First Amendment overcame the legal defects in this provision, while the Fourth Amendment empowered the government to fix a scale of compensation which no court can question. The right to property, therefore, lies in ruins. Many serious consequences arise, first, the Constitution has become a tattered piece of paper, second, the door has been opened to communism, third, the bureaucracy has been further empowered, and fourth, a neurotic impulse has been imparted to the economy-making property a matter of hide and seek. Since democracy has been allowed to taste blood like this, the overwhelming majority of those without property will increasingly abort the Constitution and expropriate the rights of others. This will be more so if joint farming and State trading obliterate the rights of millions of small owners and dealers and throw them into the ranks of those who have no property. It will then be a short step for the State to assume ownership of all the means of production. This raises the question of the necessity of free enterprise for the survival of democracy. State enterprise is both economically and politically restrictive. Economically State enterprise replaces the natural and widespread initiative and interest of individuals with the indifference and inexperience of officials. Whatever compulsions may be organized or compensations offered, the human spirit responds less to what it cannot directly own and enjoy. There is ample evidence of this in the existing State services and enterprises. In public offices, the officials think only of themselves and not of the public they should serve because even the best of them cannot connect what each does with what results in the intangible total. In public enterprises, this lack of personal interest is heightened because there is no equivalent to the control exercised in private enterprises by the shareholders who watch their dividends and by the consumers who watch the prices. Consequently, our State enterprises are commercial failures, the return, for instance, on investment of the Centre in 1958 being only 1 per cent. This means, first, that the loans taken by Government pay interest at least three times as much as they earn, second, that these loans are diversions from private enterprise, third, that to the extent State enterprise displaces private enterprise, it disengages private capital and employment, fourth, that taxes required to pay interest on loans and support party programmes like khadi, basic education, prohibition, co-operation cripple production and boost prices, and lastly, the increased national production on which economic democracy as a counterpart of political democracy depends is unnecessarily reduced. It is because no notice is taken of the disastrous results of existing nationalisation that the danger from more of it is not realised. Politically, State enterprise converts free men into employees of the State with no right to agitate against it. Already employment of the State has swallowed up so many men of the best quality that politics get mostly those who are disappointed. In total State ownership, individual freedom of opinion will be eliminated, and leadership being polarised to those who can command the experts in control. In any case, when men have no stake of their own, politics can have only academic interest. One of the causes for such polarisation of power, as has already taken place, is the elimination of political identity of the increasing numbers employed by the State. In the face of this, Article 31, allowing the citizen to move the Supreme Court for prerogative writs, appears hollow. The Government is also learning to manoeuvre out of the reach of writs by legislation with retrospective effect. Further, the courts are being increasingly influenced by the various Directive Principles, which are being used to justify departure from the strict letter of the law. _Previous musing: [Socialism or State Capitalism (1970)](https://indianliberals.in/content/socialism-or-state-capitalism/)_ --- ## [Musing] Democracy Means Bread And Freedom URL: https://indianliberals.in/musings/democracy-means-bread-and-freedom/ ### Body _Published in 1979, Piloo Mody’s book ‘Democracy means Bread and Freedom’  was an important piece of work written in a lucid style and discussing key ideas relevant to liberal thought in its economic, social and political understanding. Produced below is a chapter from the book. _ _You can access the book _[_here_](https://books.google.co.in/books/about/Democracy_Means_Bread_and_Freedom.html?id=aTXFVGJo_eEC&redir_esc=y)_.__ _ Let us consider the nature of the 20th-century confrontation between democrats and authoritarianism. Obviously, the latter, except for proclaimed Fascists, cannot directly advocate a suspension of liberties and advocate the virtues of totalitarian rule. After all, freedom is ingrained too deeply within the modern ethos to permit such an onslaught. What is more, a direct assault on the concept of freedom would severely restrict their sphere of operation and expose their clandestine motive, which is to create a totalitarian order using in the meanwhile all the rights and protection offered by the democratic State. It is therefore but natural that would-be dictators should advance arguments that, while showing concern for the people, assiduously persuade them to barter away their liberty and freedom for a loaf of bread.  The authoritarian who asks “What is freedom to a hungry man?” and then goes on to assert that fundamental rights are meaningless and cannot be exercised without economic well-being is sure of a sympathetic response where bread is scarce. What he never explains is how the surrender of freedom will put bread in a hungry man’s belly. In answer to this simple question, the authoritarian will talk about entrenched vested interests which are resisting change, profound theories about class reflexes, describe the evils of capitalism and colonialism (whichever is applicable, if not both), speak about the conspiracy between capital and the ruling classes, attack monopolies bent on exploitation and profiteers who inflate prices and keep wages down, harp on the eternal conflict between the haves and the have-nots, and proclaim that only a constant class struggle, terminating in the destruction of the bourgeoisie, will liberate the common man from his yoke and establish a dictatorship of the proletariat. And should this not be enough- there is always the ultimate- the State shall wither away!  These fancy arguments have duped many an honest broker whose concern for human well-being is not to be decried. There is an element of truth or reality easily visible in all these arguments which, incidentally, are given with such breath-taking rapidity that the most rational of men may have difficulty in catching either their simplistic logic or avoiding the many pitfalls inherent in their subtle deceptions.  We are not concerned here with demolishing these arguments dialectic-wise or even questioning some of the assumptions made. It is merely sufficient to state that the barter of freedom for bread is a bad bargain- particularly if we can and must have bread and freedom. Dwight D. Eisenhower put it admirably when he chastised his countrymen by saying: “If all that Americans want is security, they can go to prison. They’ll have enough to eat, a bed and a roof over their heads. But if an American wants to preserve his dignity and his equality as a human being, he must not bow his neck to any dictatorial government.” However, there is no controverting the fact that in many a society, even an affluent society, men have gone without bread in the midst of plenty. A hungry man surrounded by general opulence and waste is an ugly sight that no argument or explanation can justify. Far worse, of course, are the unprivileged millions in a developing country where food, clothing and shelter are the luxuries of the rich and the ruling classes, who have enough surplus left over to indulge in cheap foreign goods, which are expensive because they are prohibited! It is such simple logic merely to state that if the rich were eliminated, there would be more for the poor, that the rights of a few cannot hold the masses to ransom. Agreed, agreed, agreed. But will someone please calculate and bluntly state how, by distributing this insufficient wealth and restricting the rights of a few, the authoritarians are going to employ the masses, feed and clothe them and deliver unto them their basic and fundamental rights?  If it is the principle of equality that necessitates this violence, what about affluent nations? Were the men born in advanced countries created more equal than the ones born in backward lands? And if the distribution of wealth is the moral criterion of this argument, then the Soviet Socialist Republic–the second most powerful nation in the world, is the worst example of the distribution of wealth–not only amongst its own citizens but internationally. Before any competitive argument, let us pause and return to fundamentals. It is an old saying: “Man does not live by bread alone, but bread he must have.” What is the rationale for providing it? We cannot deviate from our original premise: “All men are created equal and are endowed by their Creator with certain inalienable rights, amongst which are life, liberty and the pursuit of happiness.” If one accepts this proposition, one can not shirk the responsibility of defining its full scope, defending its logic, and discharging its obligations without being open to the charge of dishonesty.  When we speak of rights being inalienable, it is society and its institutions that are charged with the responsibility of ensuring the exercise of these rights and of seeing that these rights can be enjoyed by all. And if among these rights are the right to life, then the equality and content of that life have to be defined. Surely, it was never the intention of the author of the Declaration that the right to life is merely the right to have it protected from assault or death! Nor can it be argued that the Creator who gave life intended that that life should or could exist without nourishment, material and spiritual, in the pursuit of its happiness!  Then surely a duty is cast upon the State and the individuals who constitute that society that they shall organise themselves in such a manner as would ensure that all their members can enjoy the right to life. What economic measures we may recommend making that life meaningful await a later discussion, but the responsibility itself must be accepted here and now.  Another subtlety emerges here. Does a man get his bread irrespective of his contribution, or does he have to exchange value for it, either by purchasing it with money or exchanging it against work? In an extreme case, can a man demand bread and at the same time refuse to work? The situation is paradoxical. If his right to life is inalienable and society has been charged with the responsibility of ensuring it, how can society bargain and demand value in return? This forces us to reflect on what rights at and how they can be exercised.  It is inherent in the nature of rights that they require action originating in the man asserting them. Freedom of speech requires the will to express- freedom of movement the desire to move- freedom of profession the exercise of choice- freedom of worship the need for faith- and so on. Similarly, the right to life imposes an obligation to work. For those incapable of it, society’s responsibility is absolute and it must carry the social overheads. It is obvious that the social overheads in a poor country cannot compare with those in an affluent society; nevertheless, the quality of concern must be maintained not only within society but that outside of it. This leads us to a more practical problem of providing work.  In despotic societies, this is simply achieved. The State orders a man to dig ditches and fill them up in exchange for bread. But democratic societies cannot do that. A man’s right to choose his profession is also inalienable and is consistent with human dignity and necessary for creating self-esteem. This is the only path to self-realisation and the founding of a robust citizenry, which is the ultimate safeguard of a self-perpetuating democracy. The only restriction on a man’s freedom to choose his profession is his own capacity and efficiency. To avoid the charge that society has deprived man of acquiring such talents as are necessary, it is imperative that the State give equality of opportunity to each one of its members to qualify in whatever field of human endeavour is most suitable to his genius, in pursuit of his inclination and in satisfaction of his aspirations. If even with such facilities provided a man does not measure up to his chosen profession, then it must be what “God made him.”  By now we have come a long way in accepting the guidelines that history imposes on us, experience dictates to us, expediency forces on us and the future implies us to implement. In the process of acceptance and rejection, a picture of a truly democratic society emerges. In restating the yardsticks, we will delve into the very nature of man, his origin and evolution, to find the narrow path between his instinctual behaviour, his physical needs, the capacity of his mind to grasp and to grow, the fulfilment of his aspirations, and the enjoyment of his rights in the pursuit of his happiness.  In so doing we will have to note past actions that are inconsistent with his accepted notions and fashion tools, methods, and institutions capable of ensuring a just and democratic society. Too many people feel that all answers must be available here and now. This is absurd, as a society and social relationships are dynamic, and human experience is constantly expanding, to say nothing of knowledge, technology and resources. So man can ignore change only at the peril of his own existence. Edmond Burke felt that change was the most powerful law of nature. However, its realisation may take some time.  Henry Thomas Buckle in his _History of Civilisation_, in describing the process of realisation and change, says: “Every new truth which has ever been pronounced has, for a time, caused mischief, it has produced discomfort, and often unhappiness; sometimes by disturbing social and religious arrangement, and sometimes merely by disruption of old and cherished association of thoughts. It is only after a certain interval, and when the framework of affairs has adjusted itself to the new truth, that its good effects preponderance; and the preponderance continues to increase, until at length, the truth causes nothing but good. But, at the outset, there is always harm. And if the truth is very great as well as very new, the harm is serious. Men are made uneasy; they flinch; they cannot bear the sudden light; a general restlessness supervenes; the face of society is disturbed, or perhaps convulsed; old interests and old beliefs have been destroyed before new ones have been created. These symptoms are the precursors of revolution; they have preceded all the great changes through which the world has passed.” It is therefore imperative that a democratic society fashions its institutions to accommodate the ever-changing social relationships inherent in the progress of development and welfare without too much strain, resentment or obstruction on the part of those whose interests are affected. Whether the electoral system or adult franchise by itself is capable of bringing this about is a matter of opinion which can be discussed. But if wanting, it is obvious that other institutional arrangements can have to be made to reach the desired goal.  Harold Laski on the other hand, under the lure of Marx and the Soviet revolution, is of the opinion that change is inherently contrary to the nature of liberal democracy because the levers of power remain in the hands of the owners of capital and the instruments of production, who by their very nature pursue nothing but profit. He holds that unless the class relations of production are altered by the destruction of the manipulators of capital, no peaceful transformation is possible. He has anchored his entire thesis on the argument that a stage is when the State, charged with maintaining law and order and facilitating peaceful change in satisfying the ever-expanding demands of the people, will use its coercive power to suppress the demands. Laski maintains that it is this resistance to change within liberal democracy, because of the producers' need for world markets, that is the main cause of the emergence of Fascist dictatorships. So far the argument is plausible, but then he goes on to maintain that in the Soviet Union, because of the common ownership of the means of production, “the substance of the law” will be different and therefore the techniques of change, distribution of goods, will _ipso facto _respond to the rising expectations. The Soviet Union requires no markets for its goods, and therefore, according to him, will be peace-living and anti-war and will readily surrender its sovereignty to international law. Also not anticipated by Laski was the arms race during the Cold War, when the obsolescence of armaments was so rapid that it left the competing countries with such monumental stocks of outdated arms that the Soviet Union started using them as tools of diplomacy, selling and giving them away as “prizes” to those who supported Soviet policies. It is of course assumed, though not stated, that until the final goal has been reached, until class relations in the entire world change, it is perfectly all right for the Soviet Union to play the imperialist game!  This is too much. The theories of Hobbes and Austin, brought up to date by Kelson, are dismissed by Laski as an exercise in logic rather than life. Laski in fact demands that unless functioning capitalist societies like Great Britain, the United States and the western democracies can demonstrate their capacity for peaceful change, the arguments of the theory of Law are untenable, although he does admit that they are unanswerable. The real weakness of Laski’s argument is that he does not demand a similar performance from the Soviet Union except to say that much would depend on the Soviet Union’s capacity for raising the standard of living of its citizens so as to compare favourably with that of the capitalist world.  The inference is clear and has even been stated elsewhere that capitalist societies have raised standards of living to a point for socialist societies to emulate, but now that capitalism is in “contraction”, they will not be able to do so any longer. Then why don’t we wait and see, let the socialist societies catch up and give a better example? Isn’t it evident what Laski is seeking? Nevertheless, Laski, amongst others, has rendered some service by articulating the pitfalls of a complacent democracy by pointing out the conflict that may arise and has arisen between an economic oligarchy and a political democracy, where the laws and coercive power through an adult franchise is held by the masses. What does not seem to have been studied in depth is why this conflict must lead either to revolution or Fascism. After all, the vote is still with the people, and if their institutions, like labour unions, cooperative societies and political parties, function adequately, there is no reason, except if there are malpractice and violence, why the majority cannot form a government that has full popular approval. Laski’s rejection of this proposition is on shaker ground. He lacks faith in the people knowing what is best for them and complains that the mass of men and women, even at election time, “are scarcely articulate about their wants, and even when they are articulate are not trained to judge whether the solutions suggested are in fact an adequate response to their desires.”  This peculiar statement challenges the very basis of politics degrades the entire struggle of man for equality, rights and liberties, and assumes that there is a higher class of man- the social changes or the social short-changers- who can ordain what the masses should demand and get! Paradoxically, Harold Laski’s brilliant but insufficient analysis, if correct, could have led to only one conclusion- an alliance between the Western Democracies and Fascist Germany, Italy and Japan against Soviet Russia in World War II. Hitler wanted it, and so did many others on the side of the Allies. Nevertheless, it did not happen. Is there any more evidence than this required to prove that there must be some better, higher or more moral force in democracy determining in the course than the trite anchor of Laski’s theory built on class relationships? It would not be out of place at this point to recall the Hilter- Stalin treaty.  Laski’s final doubt, after a positive assertion about democracy having the latent power of recovery to advance human well-being, is the crux of the matter. Even he cannot explain how the process of coercion can be transformed into the process of consent, and even he cannot answer how consent gets woven into the Soviet system he so admires! I have dwelt at some length with Laski’s theory because he has rendered service to the cause of democracy through his timely reminder that the democratic process can be frustrated by group interests. It has happened in the past; it may happen in the future. Therefore it is incumbent on those involved in the creation of democratic societies to consider this problem and create the necessary institutional safeguards.  Many eminent men in the past have been aware of this danger and cautioned against it. Whether it was John C. Calhoun in the U.S. Senate in 1838, or President Grover Cleveland half a century later in his annual message to Congress, whether it was Abraham Lincoln the legislator or Abraham Lincoln the President, whether it was Woodrow Wilson or Franklin Roosevelt- all felt compelled to warn and expose the danger monopoly capital presented to a democratic society. In the words of Roosevelt: “The liberty of a democracy is not safe if its business system does not provide employment and produce and distribute goods in such a way as to sustain an acceptable standard of living.”  However, it was Justice Oliver Wendell Holmes who put it most explicitly back in 1896 when he said: “One of the eternal conflicts of which life is made up is that between the effort of every man to get the most he can for his services, and that of society, disguised under the name of capital, to get his services for the least possible return.” And the correct response to this, in my opinion, came from Pope Pious XII in 1946, again a half-century later, when he said: “An erroneous doctrine affirms that you- representatives of labour-and you- representatives of Calitak- are forced to battle each other in butter and implacable struggle, and that industrial pacification can it be reached except at this price… To obtain the desired harmony between labour and capital, professional organisations and unions have been devised, both of which are intended not as a weapon directed exclusively towards defensive and offensive war, which causes reactions and reprisals, not as an overflowing river, which is divided, but as a bridge which unites.” _Previous musing: [Community Development](https://indianliberals.in/content/community-development/)_ --- ## [Musing] Democratic Socialism in India - A Symposium URL: https://indianliberals.in/musings/democratic-socialism-in-india/ ### Body _Produced below is an essay by A. B. Shah, published in a 1976 edition of _[_Freedom Frist._](https://indianliberals.in/periodicals/freedom-first/)_  In the essay, the author uncovers the difference between the democratic socialist movements of Western Europe and North America versus that of India. In doing so, he discusses the need for a liberal social and cultural context for the growth of democratic socialism. _Like democracy, socialism too is a product of Western thought. Even in the West, it only took root in societies which had undergone the liberating experience of a social and cultural renaissance. In Eastern Europe, including Russia, Marxian socialism predictably degenerated into statism providing a modern garb for an indigenous authoritarian tradition. In Western Europe (and North America), on the other hand, where democracy was the culmination of a process of social and cultural liberalisation, socialism sought to complement the gains of political democracy by extending them to the economic field. With the exception of Manabendranath Roy, leaders of the socialist movement in India did not recognize the need for a liberal social and cultural context for the growth of a democratic socialist movement. While social equality and cultural freedom could be taken for granted by the spokesmen of democratic socialism in the West, such an assumption would not be valid for countries of the Third World. But this is precisely what happened in India, with the result that the movement for democratic socialism remained weak and lop-sided. Since it did not pay sufficient attention to the problem of social inequalities inherent in the caste system, it could not attract any mass following worth the name. Another weakness of the democratic socialist movement in India lies in its failure to see the relationship between political democracy and the economic structure. If economic power were to be concentrated in the hands of the state-which in a parliamentary system means, in effect, the Prime Minister or a few mandarins at the top- political democracy cannot survive for long. Thus by neglecting the political implications of economic policies, the democratic socialist movement in India is likely not only to lose its fight for economic equality but also contribute to the liquidation of political democracy, in the absence of which even social equality will be impossible in India.  If democratic socialism is to be relevant to a society like India's, it will have to reorientate itself so as to take account of the specific features of the Indian situation. In other words, it will have to formulate satisfactory answers to questions like the following: - If 'socialism is about equality', what should equality mean in terms of a permissible range of income distribution (a) in the long run, (b) in the short run (say, by the year 1,990 A.D.), starting from the distribution obtaining at present? - Gross inequalities of income are found to lead to two undesirable consequences: (a) extreme poverty of a large proportion in present-day India, about 50 per cent-of the population, and (b) concentration of economic power in the hands of a small minority, which thereby exercises undue influence on the decision-making process and tends to perpetuate its privileged position. In the Indian context, which should receive priority-the abolition of poverty or the reduction of economic inequalities-during the next 15 years? Or is it possible to devise a strategy which would simultaneously accomplish both these tasks without seriously impairing the prospects of economic growth? - To what extent is the drive for economic equality necessary for, and to what extent is it compatible with, the survival of free institutions? - To what extent would (a) nationalisation, (b) co-operativization, and (c ) mixed economy be conducive to the realisation of the goal of democratic socialism-namely, equality without the loss of liberty-in the light of experience in India and abroad? Is it possible to suggest a fourth pattern of economic organization? - What kind of social structure and cultural tradition does democratic socialism presuppose, and imply, as its concomitant? - The caste structure of Hindu society (with untouchability as its integral part) and the authoritarian nature of the dominant Hindu, Islamic and Christian traditions in India are clearly incompatible with the values of democratic socialism: they sanction inequalities based on caste, creed and sex and inhibit the critical spirit. What kind of programmes should be undertaken by (a) government (b) institutions like schools, colleges and mass media, and (c) voluntary organizations to promote the necessary transformation of Indian society and culture? - The complexities of a modern society make it necessary that those who are responsible for its efficient functioning have a high-order intellectual equipment. If such societies are also to run on democratic socialist lines, their elite should have the right kind of value-orientation and, at the and at the same time, every citizen should have free access to the best education that society can provide. This poses the problem of reconciling the democratisation of education with the provision of quality education for the  would-be elite. In the democratic West, this is accomplished through a variety of educational institutions ranging from Ivy League to run-of-the-mill colleges and universities. There is a similar differentiation in the Soviet Union too. To what extent is such differentiation compatible with the values of democratic socialism, and what implications would it have for the educational system in India? - How is equal access to education to be ensured to groups which have been debarred from it for centuries by social discrimination as well as poverty? What kind of remedial measures should be adopted to enable traditionally backward groups to make up the culture lag in a reasonably short time? - As recent studies in the USA have shown, equality of educational opportunity may not ensure equality of incomes though it may lead to increasing social equality. What would be the implications of this finding for educational planning and economic policy? - In order to promote a growing awareness and assimilation of the values of democratic socialism-viz., liberty and equality-the content of education will have to be radically changed. For instance, what should be the quantum of information and the orientation of text books from the stand-point of value- and attitude-formation? What skills should be sought to be developed among the students as a result of formal education at the school and college levels? How should science be taught not only as a theoretical construct for understanding the world of man and nature, but also as a cultural discipline which implies a certain approach to the inherited culture-literature, religion, social thought and institutions-of the people? How should the student be enabled to develop a sense of in real-life situations in rural as well as urban areas? - What would be the structural and functional changes in the educational system if it is to be compatible with the values of democratic socialism? - Students belonging to the Scheduled Castes and Scheduled Tribes have been receiving certain concessions in education for more than two decades past. However, neither the spread of education among these groups nor the kind of elite that has emerged from them as a result of these concessions has proved adequate from the point of view of promoting their rapid advancement and participation in the national life. Should the concessions be continued as before, should they be changed in quantum and nature, or should they be altogether abolished? - What should be the role of the state in the field of education? The question assumes special importance in view of the recent trend of growing state control over universities even in their day-to-day functioning such as examinations and promotions. - It is possible that the state will not be willing to relax its grip on education even though such relaxation would be indispensable for making education capable of promoting the values of democratic socialism. What can the academic community- university authorities, school and college managements, teachers' and students' associations-do to persuade or compel the state to change its attitude? It was with a view to initiating an enquiry on these lines that the Samaj Prabodhan Sanstha convened, with the assistance of the Indian Council of Social Science Research, two seminars at Pune early this year. _Last week's musing: [THE SWATANTRA MANIFESTO](https://indianliberals.in/content/the-swatantra-manifesto/)_ --- ## [Musing] Do We Deserve Our Prime Ministers? URL: https://indianliberals.in/musings/do-we-deserve-our-prime-ministers/ ### Body Prime Ministers may come and go but they are all enemies of autonomy and federalism because they want to rule India from Delhi on the telephone. They are welcome to try but they will only succeed in breaking the union of India by their stupid efforts to monopolise power. In 1991 Minoo Masani, three-time Member of Parliament, and one of the founders of the Swatantra party wondered if we deserve our Prime Ministers. His words, originally written against the policies of the former Prime Minister VP Singh, are as true today as they were then. ![](https://spontaneousorder.in/wp-content/uploads/2019/08/Prime-Ministers-1.png) _Access the full document [here](http://www.freedomfirst.in/uploads/issues/pdf/408.pdf)_. _First Published in Freedom First – January 1991_ _Other editions of the publication can be accessed at [Indian Liberals](http://indianliberals.in/index), an open, multilingual digital archive committed to preserving liberal voices in the Indian public sphere._ [Read more SO Musings](https://spontaneousorder.in/?s=SO+Musings) --- ## [Musing] Dr B R Ambedkar on Village Panchayats URL: https://indianliberals.in/musings/dr-br-ambedkar-on-village-panchayats/ ### Body _Published by the Dr Ambedkar Foundation, Ministry of Social Justice & Empowerment, Government of India, the excerpt below has been borrowed from one of Dr B R Ambedkar’s speeches during the Bombay Legislative Council on Village Panchayats Bill debates on 6__th__ October 1932._ _The publication- “Dr Babasaheb Ambedkar: Writings and Speeches Vol 2.” is a compilation of Dr Ambedkar’s work in the Bombay Legislature, Simon Commission and the Round Table Conferences. It provides an insight into his detailed views set in the context of pre-independent India._ _Dr Bhimrao Ramji Ambedkar needs no introduction. He was a political leader, scholar, philosopher, Parliamentarian, and lawyer. He was well known for his persuasive speeches in Assemblies and Parliament, especially as a champion of the Depressed Classes in India. He spoke vociferously on various issues like Primary and University Education, Industrial Disputes, Linguistic States, and the rights of Untouchables._ _You can read the original, unabridged version_ [_here_](http://drambedkarwritings.gov.in/upload/uploadfiles/files/Volume_02.pdf) _(pp. 123-131)._ Dr Ambedkar’s views on Panchayati Raj in India differed from that of other leaders like Mahatma Gandhi in terms of the practicality of its implementation. He expressed his opinion in detail on the Village Panchayats Bill in the debates of the Bombay Legislative Council during 1932-33. Though he agreed with the devolution policy, he objected to how the Bill intended to empower the Village Panchayats. In one of such speeches, he said, “Whatever be the merits of these rural republics, I have not the slightest hesitation in saying that they have been the bane of the public life of India.” According to him, the Village Panchayats hampered the growth of the nationalistic spirit in the country. He argued,  “If India has not succeeded in producing nationalism, if India has not succeeded in building up a national spirit, the chief reason for that, in my opinion, is the existence of the village system. It made all people saturated with local particularism, with local patriotism. It left no room for a larger civic spirit. None whatever. Under the ancient village panchayats, India, instead of being a country of a united people, became a loose conglomeration of village communities with no common tie except common allegiance to a common King.” He also objected to the constitution of Panchayats based on adult suffrage. He claimed, “I should like to make it clear to the Honourable Minister that, speaking for the depressed classes, I have not hesitated in saying that adult suffrage is not sufficient for us. The Honourable Minister has forgotten that the depressed classes are in the minority in every village, a miserable minority, and assuming that he adopts adult suffrage, he will readily admit I am sure that adult suffrage cannot convert a minority into a majority. Consequentially I am bound to insist that if these village panchayats come, there shall be special representation for the minorities. At any rate, there shall be special representation for the depressed classes, and others, of course, will speak for themselves.” He further added, “Speaking for the depressed classes, therefore, I can never accept the principle of self-government for India unless I am satisfied that every selfgoverning institution has provisions in it which give the depressed classes special representation in order to protect their rights, and until that is done, I am afraid it will not be possible for me to assent to the first part of the Bill.” Dr Ambedkar also criticised Bill’s provisions on judicial powers to the Village Panchayat. He questioned if the Village Panchayat meets the three requisites to discharge civil and criminal justice – Training in Law, Impartiality in its outlook and Independent position. He said, “Now, the first question that I would like to ask the Honourable Minister is this: Does he expect that these five gentlemen who will be elected on the basis of adult suffrage will have sufficient judicial training to discharge the duties of judges? Sir, I would like to submit that judicial decisions demand a developed judgment and a vast amount of legal knowledge. (Laughter.) Let there be no laughter because it is a serious matter. Just consider this. We are all agog when members of the I.C.S. want to have certain places reserved for them in the High Court or the judiciary. What is the reason for our objection? If I have understood the objection correctly, it is that these gentlemen who have passed the I.C.S. examination have no judicial training, and not having judicial training, we cannot entrust them with judicial powers. That is the gravamen of the objection. They want justice and judges who are competent to discharge their duties. Now, I ask the Honourable Minister whether he thinks that an illiterate population, is steeped in ignorance, and swallowed up in superstition, can produce five good men who can be entrusted to discharge the duties of judges. The next proposition I would like to place before this House is this: Is it possible to expect this panchayat to be an impartial body of judges? Let us consider the facts as they are. No honourable member of this House, I am sure, will deny faction feuds do not rent that very few villages.  Not only are there quarrels among the Hindus themselves, but there are quarrels between the Hindus and the Mahomedans, and these quarrels are of no ordinary importance. They are serious. I would like the Honourable Minister and the House to consider whether a panchayat elected in an atmosphere of this sort would be impartial enough to distribute justice between men of different castes and men of different creeds. That is a proposition, I submit, which the House and the Honourable Minister should consider seriously. The next question I would like to ask is, does the Honourable Minister expect that the judiciary he is bringing into being will be an independent judiciary? Sir, what is his proposition? His proposition is that the judiciary shall be elected because that is what the provisions for a panchayat mean. The panchayat which will administer justice will be a panchayat elected by the village's adult population. I would like to ask him whether he expects that a judge who has to submit himself to the suffrage of the masses will not think twice before doing justice and whether, while giving justice, he is offending the sensibility of the voter. Suppose there was a Hindu-Mahomedan riot; suppose a Mahomedan was brought up before a panchayat for an offence triable by the panchayat; suppose one Hindu member of the panchayat thought that there was a justice on the side of the Mahomedan. Does the Honourable Minister and does the House think that this gentleman, who may have to submit himself to an election within the course of a few months or a year, will think that he ought to do justice to the Mahomedan rather than keep his seat? What will he do?” Though he agreed with the principle of providing cheap and easily accessible justice to the villagers, he suggested an alternate method instead of giving judicial powers to village panchayats. “We have already in existence what are called honorary bench magistrates in towns. It should be perfectly possible to extend that system whereby we can divide each district into judicial circles extending over an area of two or three miles suited to convenience, and for Government to nominate—I emphasise the word “nominate”—three or more persons to discharge the judicial functions in that circle. These three gentlemen would on one day sit as magistrates to deal with criminal cases and on another day they will sit as civil judges to try civil cases. By this method, you will secure cheap justice, easy justice, at the same time you will secure a judiciary that will be independent of local influence, a judiciary that will be free from the disadvantages of an elective system. I think, Sir, this ought to satisfy the requirements of the case.” _Previous musing: [Population Causes Prosperity](https://indianliberals.in/content/population-causes-prosperity/)_ --- ## [Musing] Dr Muthulakshmi Reddi: Beacon of Women's Liberty URL: https://indianliberals.in/musings/dr-muthulakshmi-reddi-beacon-of-womens-liberty/ ### Body _Dr Muthulakshmi Reddy was an embodiment of progressive liberalism. She was a staunch advocate of women’s education and was a vehement critic of the Devadasi system. She challenged many traditional societal norms. By championing gender equality she left an indelible mark on South Indian social fabric._ The nineteenth century was a time of significant intellectual and social change in India. Amidst this ferment, Dr. Muthulakshmi Reddy emerged as a leading figure in the South Indian social reform movement. A beacon of social change, she toiled ceaselessly to ameliorate the plight of women and children in India. Her tireless efforts sought to create a more equitable and just society for women, becoming a profound source of inspiration for all those who believed in the transformative power of women. Muthulakshmi was born in 1886 in the princely state of Pudukkottai (Tamil Nadu). She was the daughter of Narayanaswamy Iyer, the principal of Maharaja’s College in Pudukkottai. Her father recognised her potential and was determined to provide her with an education, even though it was not the norm for girls then. However, his aspirations were thwarted by an early retirement, resulting from conflicts with the state's Diwan. Despite this setback in her father’s career, her passion for learning remained undaunted.  Even though her mother, Chandrammal wanted her to quit school, Muthulakshmi continued schooling and passed her Lower Secondary Public Examination with the help of her Teacher Balaiah. Societal norms and traditions acted as formidable barriers to women's education, impeding their pursuit of knowledge. Muthulakshmi, too, bore the brunt of these customs. Nevertheless, her father took proactive measures and arranged for a private tutor to impart education within the confines of their home. This experience allowed Muthulakshmi to contemplate the prevailing social barriers obstructing women's access to education. During her teenage years, her passion for women's rights and social justice began to blossom and take root. In 1902, Dr. Muthulakshmi Reddy defied the odds and passed the Matriculation Examination Due to the lack of hostels for Girls, she had to join the local Men’s Second Grade College for her higher education. Her academic excellence, however, encountered opposition fueled by gender and caste bias. The college principal raised objections, fearing that her presence would dishearten the male students. Even some parents threatened to withdraw their sons if she were allowed to join. However,  the Maharajah of Pudukkotai quelled the objections and admitted her, displaying wisdom and progressive thinking. This momentous decision by the Maharajah marked a significant milestone in the annals of women's education in South India. Dr. Muthulakshmi etched her name in history as the first woman to enroll in the Maharajah's College for Men, and in 1907, she proudly passed her Intermediate Examination. In 1907, Dr Muthulakshmi secured admission to the esteemed Madras Medical College, dedicating herself to the pursuit of medicine. As an active participant in gatherings and public meetings, her remarkable work garnered attention, with numerous newspaper articles and magazines highlighting her endeavours. She graduated with honours and worked as a House Surgeon at the Government Hospital for Women and Children in Egmore. Later,, she dutifully returned to her hometown of Pudukkotai, where she wholeheartedly served her community. In 1914, she established her clinic in Madras and became renowned for her exceptional treatment skills. In 1914, she discovered a kindred spirit in Dr. Sundara Reddi, a physician with liberal thoughts and a visionary outlook. Their marriage was built on mutual respect, and he wholeheartedly supported her medical practice and social work. In 1925, Dr. Muthulakshmi Reddi received a prestigious scholarship from the Indian Government to study in England. Setting foot in the United Kingdom, she delved into the realm of women's and children's diseases, honing her knowledge and skills. After returning to India, she published numerous works on pregnant women, childbirth, and social welfare matters. The zeal of the Indian freedom movement stirred her soul, and Mahatma Gandhi's inspiring leadership profoundly impacted her. Under his influence, she actively engaged in the freedom struggle, coordinated efforts with other leaders, and played a crucial role in the movement. Contemplating the societal conditions prevailing at the time, Dr Muthulakshmi recognised that gender equality could be achieved only through education for women. In 1917, she became a member of the Women's Indian Association, aligning her vision with trailblazers like Annie Besant, Hira Bai Tata, and Marget Cousins. Additionally, she was actively associated with the Muslim Women's Association, Madras Seva Sadan, The Madras Vigilance Society, and the Indian Ladies Samaj. As one of the few women leaders of South India, she ardently fought for India's liberation from colonial oppression. In 1932, Dr. Muthulakshmi, alongside Gandhiji, attended the Third Round Table Conference in London, gaining significant exposure. Subsequently, in 1934, she participated in the First International Conference of Chicago. Following the passing of Annie Besant, she assumed the presidency of the Women's Indian Association. Yet, she relinquished the position during the Non-Cooperation movement as a protest against Gandhiji's arrest. In 1962, Dr Muthulakshmi Reddi received a momentous appointment to the Madras Legislative Council. This marked the beginning of her lifelong mission to rectify the societal imbalances that hindered women's rights. Her commendable social work garnered recognition from the Government of India, leading to her inclusion in the Hartog Committee, entrusted with reviewing the condition of women in the country. During the late 1800s, Dr. Muthulakshmi Reddi boldly stepped forward to lead the fight against the Devadasi system. As a member of the Madras Legislative Council, she vehemently opposed the practice and pledged for its eradication. Organising meetings and gaining support from various organisations, including the Women's Indian Association and the Devadasi Women's Association, she also garnered the backing of the Devadasi Community Men's Association. In 1936, Dr Muthulakshmi Reddi established the "AVVAI HOME," a welfare institution in Tiruvannamalai for abandoned children and women. Over time, this home became a place of empowerment, offering vocational training to children and women.  In 1953, she became the Chairman of the State Social Welfare Board of Madras Presidency. During her tenure from 1953 to 1957, she uplifted women from backward classes by providing them with education and healthcare opportunities, and she also played a pivotal role in establishing a separate Children's Hospital in the Madras Presidency.  Dr. Muthulakshmi Reddi was a trailblazer in every sense, achieving numerous firsts as a woman in India – being the first to gain admission to a men's college, the first to become a house surgeon in a government hospital, and the first to be elected to the Madras Legislative Council. However, she was more than just a pioneer; she was a true champion for women's rights. She relentlessly fought to improve the lives of women and children in India, advocating against child marriage, for raising the age of consent for marriage, and women's voting rights. She envisioned a world where women would receive equal treatment, have the same opportunities as men, and are free to make their own life choices. Her life's dedication was directed towards turning this vision into a reality. Dr. Muthulakshmi Reddi's relentless pursuit of social justice and gender equality paved the way for a more inclusive and progressive India, making her a true visionary champion of liberal ideas. **References** - [https://artsandculture.google.com/entity/muthulakshmi-reddy/m09ryvs](https://artsandculture.google.com/entity/muthulakshmi-reddy/m09ryvs) - Santhi, S., & Saravanakumar, A. R. (n.d.). _Contribution of Dr. Muthulakshmi Reddy to Women Empowerment-A Historical Study_. [www.ijstr.org](http://www.ijstr.org) - Kamatchi, M. (2016). MUTHULAKSHMI REDDY: THE FIRST MEDICAL WOMAN PROFESSIONAL IN SOUTH INDIA. _Proceedings of the Indian History Congress_, _77_, 612–623. [https://www.jstor.org/stable/26552689](https://www.jstor.org/stable/26552689) _Previous musing: [Have We Lost Our Will To Be Free? (1965)](https://indianliberals.in/content/have-we-lost-our-will-to-be-free/)_ [](https://indianliberals.in/wp-content/uploads/2023/08/IMG_20220724_121630_copy-removebg-preview.png) **Ch Prashanth** Prashanth is pursuing his Master's in International Relations and Politics at the Central University of Kerala. He likes to spend his weekdays at the library or gym. His weekends are spent in front of the television watching the Premier League. --- ## [Musing] Economic Growth with Social Justice URL: https://indianliberals.in/musings/economic-growth-with-social-justice-1969/ ### Body _Nani Palkhivala's 'Economic Growth with Social Justice' was delivered as Shriram Memorial Lecture at New Delhi in 1969. This was under the section 'India - The Potential and The Reality' in the book 'We, the People: India-The Largest Democracy' published by Strand Book Stall in 1984_ _You can read more about Nani Palkhivala [here](https://indianliberals.in/content/nani-palkhivala/) ___ Our Constitution aimed at making India the land of opportunity; our politicians have converted it into a land of opportunism. They have made socialism the opiate of the people. “Socialism" has become a word comprehensive enough to cover the entire spectrum of economic folly — a plethora of harmful controls, periodic bouts of nationalization, and the pursuit of policies which ensure unemployment and economic retrogression. Every thinking man in India today accepts without reser- vation the true socialistic objectives of economic development. True socialism means the subordination of private gain to public good. It means the investment of human and material resources in an imaginatively planned manner which can con- tribute to the vitality and progress of the whole nation, keep it in the mainstream of self-generating growth and develop- ment, raise the standard of living of the masses, and bring forth the maximum gifts of each for the fullest enjoyment of all. The translation of such socialism into action demands intellect and knowledge, character and dedication, of the highest order. But there is the other type of socialism which is socialism on the cheap, which feeds on slogans and promises, and thrives on the gullibility of the people. d rill Durant, after a lifelong study of various civilizations, summed up the lesson of history which has great significance for T ndia: “Democracy is the most difficult of all forms of government, since it requires the best charity which one can do in India today is to carry knowledge to the people. As Abraham Lincoln rightly said, the people would be able to face any crisis, provided only the correct facts were made known to them. Men who believe in free enterprise must not be content merely to sell their goods, but their first attempt should be to sell their ideas and spread the values they cherish. It seems doubtful whether in the immediate future we shall attain stability and rapid progress through the democratic set- up. However, what is more valuable and easier to save is the more distant future of this great nation. Years of intensive mass education will be needed if the standards of rationality and fair dealing, of social justice and individual freedom, which are enshrined in our Constitution, are to be bred in the bones of our young men and women who are in their formative years and to whom the future belongs. _Previous musing: [Profit-Shy Asians (1957)](https://indianliberals.in/content/profit-shy-asians-by-kd-valicha/)_ --- ## [Musing] Economic Reforms In India: Where Are We And Where Do We Go? URL: https://indianliberals.in/musings/economic-reforms-in-india/ ### Body The following text is taken from a 2006 booklet published by [Forum of Free Enterprise.](https://indianliberals.in/content/economic-reforms-in-india-where-are-we-and-where-do-we-go-by-dr-rakesh-mohan-october-10-2006/) Authored by Dr Rakesh Mohan, the text describes the economic situation in the country for the past 50 odd years, discussing the increase in entrepreneurship that has emerged following economic reforms. Dr Mohan focuses on reforms for Agriculture, Urban Development, Human Resource Development and Vocational Training. I am deeply honoured to have been invited to deliver this A. D. Shroff Memorial Lecture. Looking at the luminaries who have delivered these lectures before me, I feel particularly humbled. I am, of course, very happy to be in such a company. A. D. Shroff accomplished much during his life: he passed away at a relatively young age. He was associated with Pandit Jawaharlal Nehru as early as 1938 when he served with him in the National Planning Committee. He was among the eight authors of the Bombay Plan and an unofficial delegate at the Bretton Woods Conference and also chaired the Shroff Committee on Finance for the Private Sector set up by the Reserve Bank of India (RBI). It is interesting that, having indirectly contributed to the founding of such public sector connected institutions such as the World Bank (who can only finance Governments) and the Planning Commission, Mr. Shroff founded the Forum of Free Enterprise. Today, I have chosen to talk on "Economic Reforms in India: Where are We and Where do We Go?" I am sure the theme would have appealed to A.D. Shroff.  We have now had a decade and a half of economic reforms It is perhaps appropriate at this point to stand back dnd take stock of what we have done as we venture further Today, I shall, therefore, make an effort to (a) review what has been done; (b) evaluate where we are; and (c) suggest where we need to go. Let me give you the backdrop as to what motivated me to choose this topic. I recently came across, The Tipping Point: How Little Things Make a Big Difference, by Malcolm Gladwell. He observes that many large changes sometimes happen in a hurry. Whereas there is usually a step by step, gradual process of little changes taking place, an epidemic suddenly acquires a tipping point and spreads suddenly. I believe that at the present juncture we are in need of such an epidemic of change and growth; we are perhaps at the tipping point. The macro-foundations of a healthy environment have been laid and now we need lots of little things to make a big difference. - ** What Has Been Done?** What has been the main objective of the overall economic reform process in India, or for that matter, anywhere? The primary objective has to be the overall acceleration of economic growth along with rapid elimination of poverty. The means to achieve these objectives would be the injection of competition in the economy in order to induce greater efficiency and productivity gains; and dedicated efforts are needed to build capacity through human resource development. Let me begin with a broad brush of history. Around 50 to 100 years before our independence in 1947, there was hardly any discernible economic growth in the whole Indian sub-continent. Per capita income was stagnant, perhaps declining over that whole long period. After independence, annual per capita growth broke out of this long period of slumber and was in the range of 1 to 1.5 per cent for about 30 years or so until around 1980. After 1980 it increased to about 3-4 percent, which was a major departure in our recorded history. Along with this change, a good deal of new thinking also took place in terms of the strategy for future economic policy. As it happened, there was a full blown economic crisis at the end of the 1980s: the balance of payments came under severe pressure, and a realistic threat of sovereign default loomed over us; fiscal deficits had increased significantly over the 1980s; and inflation began to creep up to the late teens. These unfortunate developments focussed our minds like never before: India has a proud history of never ever having defaulted on our international obligations; our fiscal management has historically been conservative; and inflation seldom exceeded 10 percent. Consequently, a whole reform process got unleashed in 1991. I will first give a brief run-down of the various reforms that have taken place in the last 15 years before providing some evidence of their effectiveness. For expository convenience I shall make a conceptual difference between (a) macroeconomic reforms and (b) microeconomic reforms. **Macroeconomic Reforms and Fiscal Stabilisation** Over a period of time through the 1950s, 1960s, and 1970s the economy had become over controlled and rigid. Consequently entrepreneurship was heavily constrained. The import substituting inward looking development strategy that could have been relevant in the 1950s and 1960s was no longer suitable in the modern globalising world. Hence, overall reforms had to be undertaken to lay down a new framework. Wide ranging macro reforms were undertaken along with corresponding micro economic and sectoral reforms. The macro reforms can be divided into (a) fiscal policy, (b) monetary policy, (c) trade policy, and (d) exchange rate management. Without any claim of exhaustiveness, the exposition aims at setting the context. _Fiscal System_ The tax system, both for direct and indirect taxes, had become very complex in India. Maximum marginal personal income tax rates were high, along with a number of rates for different income ranges. The corporate tax rate was high too. Accordingly, the tax code had to be riddled with a number of special provisions for exemption of different kinds of income, and the corporate tax code was full of exceptions and incentives. Because of high rates and complexity, avoidance and evasion was naturally high. As a consequence, over the whole reform period, both the personal income tax and corporate tax rates have gradually been brought down to 30 percent, along with considerable simplification. Similarly, in the case of indirect taxes, there were high levels of both domestic excise duties and customs tariffs, with a myriad of rates for different commodities. Again, this necessitated a whole range of specific provisions and exemptions for different kinds of producers and end users, leading to great administrative complexity. A major programme of comprehensive and continuous reform has had to be undertaken over the last 15 years. The rates in case of customs duties have been brought down from an average of 110 percent in 1991 (with highs over 400 percent) to a non agricultural peak of 12.5 percent in 2006. There has been massive simplification of the excise tax structure to achieve a "central" rate (CENVAT) of 16 percent (apart from a few exceptions like food products, textiles and some optical fibers that attract lower tax rates). Excise, which is levied at the manufacturing stage, is now essentially levied as a VAT (Value Added Tax) so that cascading is avoided. In addition, the service tax has been introduced in order to tax the whole economy more fairly and to reduce the excessive burden on one sector, the manufacturing sector. Such tax reforms typically take a long time. The latest most significant measure taken is the introduction of the Fiscal Responsibility and Budget Management Act (FRBM) in 2004, which enjoins the government to eliminate its revenue deficit and reduce its fiscal deficit to 3 percent of GDP by 2009. Similar legislations have been passed by most state governments (23 states so far). So fiscal responsibility has now become part of our legislative commitments. The other most noteworthy development at the federal level is the transformation of state level sales taxes to the Value Added Tax (VAT), which has introduced a large measure of rationality and uniformity in the state sales tax system. The state sales tax system had also suffered from great complexity in terms of multiplicity of rates and special provisions. A vital feature of this tax reform has been the consultative process among all the states as mediated by the central government, which then resulted in this consensus for massive reform. Overall, the fiscal reform process spanning both the central and state governments over the last 15 years has been truly wide ranging. _Monetary Policy_ Over the 1970s and 1980s, monetary policy, as we know it, had become almost non-existent: with a system of credit allocation, administered and different interest rates for different purposes; automatic monetization of fiscal deficits; and financial repression through pre-emption of banks' resources. Hence a number of measures had to be taken. These include: elimination of automatic monetization, reduction of statutory pre-emption of the lendable resource of banks, and interest rate deregulation. As a result of these measures independence of monetary policy and the central bank has been restored. There was a consequent movement from direct to indirect instruments of monetary policy. These changes in the practice of monetary policy are manifest in its effectiveness in the significant reduction of inflation. In fact, if one bifurcates the period since independence into two, one from the early 1950s to late 1990s, and the other from the late-1990s to present day, then there is marked difference in the average inflation rates between the two periods. While it was around 7-8 per cent during the first forty-five years, it has fallen to around five per cent in the recent period since the late 1990s. _External Sector Reforms_ It was the balance of payment crisis in 1991 that was the key trigger for reforms. Consequently, actions on the external sector have been of the greatest importance. Despite the existence of comprehensive quantitative trade restrictions along with high levels of tariffs, the balance of payments was under continuous pressure through the 1960s, 1970s and 1980s. Consequently, exogenous shocks such as oil price rises, or monsoon failures, invariably led to large crises necessitating recourse to IMF resources. With the existence of these trade restrictions, the exchange rate was typically overvalued over a long period of time. Hence, among the first reform moves was an ex ante real devaluation of the exchange rate in 1991 and a move of the exchange rate regime from that of a crawling peg towards a market determined one, though somewhat managed. The trade regime has undergone massive change with the removal of quantitative restrictions along with rationalisation of the tariff structure. There has been a massive reduction in the number of tariff rates and the peak rate of tariff has been reduced from around 400 percent to 12.5 percent for non-agriculture products. Tariff reform for agriculture products has been constrained by the intransigence of developed countries in reducing their farm subsidies. Internationally, lndia has always participated actively in WTO negotiations. More recently, reflecting the hiccup in the achievement of consensus for further global trade reforms, lndia has also begun to participate in a number of regional and bilateral trade agreements that are in the making. With the change in the exchange rate regime and accomplishment of trade reforms the current account is now open, along with limited capital account convertibility. The exchange rate regime focuses on management of volatility without a fixed rate target and the underlying demand and supply conditions determine the exchange rate movements in an orderly way. **_Micro Economic Reforms_** Let me now turn to the microeconomic reforms. Industrial deregulation, infrastructure reforms, financial sector strengthening, capital market deepening and agriculture are the major areas where such reforms have taken place. _Industrial Policy_ Massive deregulation of the industrial sector, in fact, constituted the first major package of reforms in July 1991. The obsolete system of capacity licensing of industries was discontinued; the existing legislative restrictions on the expansion of large companies were removed; phased manufacturing programmes were terminated; and the reservation of many basic industries for investment only by the public sector was removed. At the same time restrictions that existed on the import of foreign technology were withdrawn, and a new regime welcoming foreign direct investment, hitherto discouraged with limits on foreign ownership, was introduced. With this massive reform introduced in one stroke in 1991, the stage was set for a policy framework that encouraged new entry, introduced new competition, both domestic and foreign, which thereby induced the attainment of much greater efficiency in industry over a period of time. One area of industrial reform that has been sluggish has been the removal of restrictions that exist on investment in most labour using industries - known as small scale industry reservations. In 1991 as many as 836 industries were reserved for investment by only small firms, defined by the level of investment. The number of these industries has now come down to 326. _Infrastructure_ A number of measures have been initiated in the development of infrastructure since 1996. Many of these reforms emanated from the recommendations of the lndia lnfrastructure Report of the mid 1990s. We recognized that infrastructure investment had to be raised and suggested introduction of the private sector in infrastructure which had been restricted earlier. This was part of a world wide move during the 1990s. This has also necessitated other wide ranging reforms including new legislations and formation of regulatory authorities. With deregulation, introduction of the private sector and formation of the Telecom Regulatory Authority of lndia (TRAI), telecom is indeed a success story. The major reforms in roadways were: imposition of a fuel cess to finance highway construction; the commissioning of the National Highway Development Project and PMGSY (Prime Minister's Gram Sadak Yojana or the Rural Roads Programme). In case of ports private operators have been introduced and then the Tariff Authority of Major Ports (TAMP) formed; in civil aviation new private airlines, new private airports and the beginning of an open skies policy are in evidence. In all these cases the response has been positive. In other infrastructure sectors, the reform process experience has been mixed. In the power sector, where some of the early efforts for reform were made in the early 1990s, problems continue to constrain its expansion. A comprehensive modern electricity Act has been enacted, which has enabling features for encouraging private sector entry, enhanced competition, and rational regulation. However, despite the formation of a central regulatory authority and others at the state level, implementation of the tariff reform has not been found to be easy. State Electricity Boards continue to suffer from losses, arising both from inadequate tariff and from transmission and distribution losses (comprising an important part of theft). Consequently, private sector investors in power generation face insecurity of payment and hence expansion of private investment in this sector has been constrained. Although the Act allows for private participation in distribution, practically it has not been found easy to privatize distribution systems. Thus, power reforms have some way to go, although the legislative and institutional prerequisites are now in place. Urban infrastructure is another area where reform has been inadequate and thinking has just begun. In transportation, considerable reforms have taken place in air and road transportation but railways have some way to go. Although there has been noted improvement in financial performance of railways in the last couple of years, there is need for much greater structural reforms for this vital transportation system to be put in a sound sustained growth path. _Financial Sector_ Financial sector reform is another area of India's success story. A major element of the financial sector reform was the introduction of competition enhancing measures. Introduction of operational autonomy and partial disinvestment of public ownership in public sector banks, entry of new private and foreign banks and permission for FDI and portfolio investment in banking are some of the major reform measures in this area. Listing of almost all public sector banks is another major reform in this regard. Besides, prudential regulations have been strengthened in line with Basel I standards and are now in process of being updated to Basel II standards. An effort has been put in for phased implementation of international best practices such as, CRAR (Capital-to Risk Adjusted Assets Ratio), provisioning and income recognition norms, exposure limits and measures to strengthen risk management. The introduction of partial private sector ownership in public sector banks and their consequent listing has been extremely important for market orientation of these banks and transparency in their accounts and operations. This gradual process of banking sector reforms has contributed significantly to the all round improvement in the financial health of the banking system. Among other segments of the financial sector, new private insurance companies have been introduced with limited foreign ownership. Subsequent to insurance nationalization in the 1950s and 1960s, all insurance was in the public sector, with just one life insurance company and four general insurance companies. The introduction of new competition has led to the introduction of new products and new practices. A new regulator, the Insurance Regulation and Development Authority (IRDA) has been formed to govern the insurance industry. The capital market has been revived with both policy reforms and financial infrastructure development. The Securities and Exchange Board of lndia was formed as the capital market regulator; a new modern technology oriented stock exchange was formed (the National Stock Exchange, NSE); private sector mutual funds allowed and encouraged; along with the abolition of the Controller of Capital Issues (CCI) who controlled both issuance of securities and administered their price. A particular development has been the building of world class payment and settlement architecture in the stock market and government securities market. The one area that still needs considerable attention and development is the corporate bond market. _Agriculture_ Agriculture is the key significant area that has not been subject to comprehensive reforms. It is not widely understood, though, that the reduction of industrial tariffs improved the domestic terms of trade significantly for agriculture. In terms of trade reforms in agriculture, these have been constrained by the lack of progress in the WTO and the intransigence of developed countries in the reduction of their farm subsidies. There have, however, been a number of significant reforms: removal of restraints on inter state movement of foodgrains; the restructuring of the public distribution system (PDS); relaxation of restrictions under the Essential Commodities Act; introduction of forward trading in most agricultural commodities; and removal of some marketing restrictions on crop produce. There is no doubt, however, that agricultural development needs much more focused attention in order to revive the somewhat stagnating agricultural economy. Having given a bird's eye view of the reforms measures let me now turn to the outcome of this whole wide ranging reform process. - ** Where are We?** There is a need to remember where lndia was at the time of its independence. Power capacity was just 1.1 percent of what it is now. The country was literally in darkness! With high mortality rates, the average Indian died at age 32. More than half of the country was under the poverty line. The income of an average household is now nearly Rs.130,000. Poverty was down to 23-26 percent in 1999- 2000. Per capita growth has gone up from about 1.5 percent per year in the first 30 years after independence to about 6.4 percent per year now. This makes a palpable difference in peoples' standard of living (Tables 1, 2 and 3).[](https://indianliberals.in/content/nani-palkhivala-education-leadership-and-vision-of-free-india/attachment/screenshot-49/) [](https://indianliberals.in/content/nani-palkhivala-education-leadership-and-vision-of-free-india/attachment/screenshot-50/) [](https://indianliberals.in/content/nani-palkhivala-education-leadership-and-vision-of-free-india/attachment/screenshot-51/) Having outlined the major elements of India's achievement since independence let me briefly review the broad trends in various macro-policy variables. The step-up in the growth rate of the economy has been facilitated by an increase in domestic investment to over 30 percent of GDP, financed predominantly by domestic savings. Domestic savings increased to over 29 percent of GDP by 2004-05 after some stagnation in the second half of the 1990s. The improvement in overall savings in recent years has particularly benefited from the turnaround in public sector savings. After turning negative between 1998-99 and 2002-03 owing to sharp deterioration in the savings of Government administration, public sector savings have turned positive again from 2003-04 onwards, mainly reflecting the ongoing fiscal consolidation. In 2004-05, the public sector savings rate was 2.2 percent, but it was still less than a half of the peak of almost five percent touched in 1976-77. Improvement in corporate profitability since 2002-03 has also contributed to increase in domestic savings in the recent years. Household savings remain the predominant component of domestic savings, contributing almost three-fourths of overall domestic savings in 2004- 05. For the Indian economy to achieve higher growth on a sustained basis, further improvement in overall savings is necessary and, in this context, public sector savings will have to play a significant role (Table 4). **Table 4:  Aggregate and Public Sector Savings and lnvestment** (As percentage of GDP) Year Aggregate Public Servant Savings Investment Savings Investment 1 2 3 4 5 1980-81 18.9 20.3 3.4 8.4 1990-91 23.1 26.3 1.1 9.3 2000-01 23.5 24.2 -1.8 6.9 2001-02 23.6 23 -2 6.9 2002-03 26.5 25.3 -0.7 6.2 2003-04 28.9 27.2 1 6.5 2004-05 29.1 30.1 2.2 7.2 _Source:_ National Accounts Statistics, Central Statistical Organisation Fiscal performance has still some way to go. The gross fiscal deficit has come down from 7 per cent in 1993-94 to 4.1 per cent in 2005-06. However, this needs to go to 3 percent by 2009. Tax Revenue has just recovered to 10 percent of GDP, about the 1991-92 level, and needs much greater growth (Table 5). Inflation is down from the 45 year average of 7 - 8 percent to 4.5 - 5.0 percent. So we have achieved some major macro and monetary improvements. However, growth needs investment and savings. Although the growth process stuttered somewhat in the late 1990s and early part of this decade, it has clearly recovered now and we seem to be on a sustainable path of annual GDP growth in excess of 8 percent. After the award of the Pay Commission in 1997, public finances had come under strain and hence public savings had become negative. This was also accompanied by a business cycle slowdown and low profitability in the private corporate sector and low corporate savings. Both recoveries have now taken place: public sector savings are now again positive; and corporate profitability is also very healthy. With continuing growth in household savings, gross domestic savings are now 30 percent plus and hence sustained investment rates in excess of 32 percent are feasible. The sustenance of a higher growth now needs improvement in public investment and delivery of public services. [](https://indianliberals.in/content/nani-palkhivala-education-leadership-and-vision-of-free-india/attachment/screenshot-52/) Financial sector reforms in general and banking reforms in particular have been a key ingredient of the lndian reforms process. As a result of these reforms, statutory pre-emptions of banks (in the form of high cash reserve and statutory liquidity ratio) got reduced to a great extent - so was the extent of financial repression. lnterestingly the asset quality of the lndian banks has improved to a great extent with a distinct improvement In capital-to-risk adjusted assets ratio (CRAR) of banks which is much above the stipulated level (9 percent), and drastic reduction in NPA levels, notwithstanding the transition to 90-day delinquency norm in 2004 (Table 6). The initial recapitalization by government in the public sector banks has been rather meagre (about 1 percent of GDP) which was supported by equity issuance by the public sector banks. With public listing the public sector banks in lndia are now more subject to market discipline. Furthermore, there has been a distinct improvement in post-reform productivity as reflected in various indicators such as, business per employee, profit per employee and branch productivity. These productivity gains can be attributed to both technological improvement as well as peer pressure or catching up effect. [](https://indianliberals.in/content/nani-palkhivala-education-leadership-and-vision-of-free-india/attachment/screenshot-53/) Let me briefly touch on the external sector now. The measures taken in respect of the external sector have clearly been very successful. Merchandise exports have [](https://indianliberals.in/content/nani-palkhivala-education-leadership-and-vision-of-free-india/attachment/screenshot-54-2/) increased from 6 to 13 percent of GDP between 1990-91 and 2005-06; imports have also increased from 10 to 24 percent of GDP over the same period; foreign exchange reserves. increased from $1.5 billion to $165 billion. Industrial growth was very high during the 1992-97 period in the immediate exuberance of industrial policy reforms. However, there was a significant slowdown during 1997- 2002. As tariffs were reduced, import controls were lifted, and domestic competitive threats emerged at the same time, the initial protective effects of the ex ante real devaluation of 1991 wore off and the lndian corporate sector, particularly in manufacturing, found itself in difficulty. The lndian corporate sector was therefore in the throes of significant technical restructuring, business process restructuring and financial restructuring, all at the same time. It can be said in retrospect that, though this process resulted in an industrial slowdown then, it has contributed to the industrial competitive resurgence that is now observed. There is a revival of manufacturing. A competitive company can be found in almost every industrial sector now. As indicators of this competitiveness, exports are growing more than 20 percent; and the balance of payments with reference to China is almost even (Table 7). The performance of the lndian corporate sector has been highly encouraging in the last three years. The previous occasion, when such a healthy performance was demonstrated by the corporate sector was in the early 1990s, i.e., during the initial period of exuberance immediately after the economic reforms programme was initiated in India. But during the latter part of the 1990s, around 1997, the momentum in the corporate sector slowed down in sync with the general economic slowdown. The recovery since then is remarkable in all important parameters: sales, gross profit, profit after tax, all have recorded robust growth rates during 2002-03, 2003-04 and 2004-05 implying that economic activity in the corporate sector has taken a full circle after three years of dull performance during 1999-2000, 2000-01 and 2001 -02 (Table 8). [](https://indianliberals.in/content/nani-palkhivala-education-leadership-and-vision-of-free-india/attachment/screenshot-55/) The current exuberant run of corporate sector performance has continued well into its fourth year as evidenced by the corporate sector results for the first quarter of 2006-07. The strong sales performance has resulted in an improved bottom-line for the corporate sector as a whole. Powered by a strong top-line performance, gross profits of the lndian corporate sector grew at a sturdy rate of 34 percent in the quarter ending in June 2006 on top of a 20 percent growth recorded in the full fiscal year of 2005-06. The interest costs have been plummeting in the recent years due to an overall softening of interest rates and lower debt equity ratios, which is an outcome of conscious policy-driven measures. There is in fact a new confidence in the air. Let me give some random illustrations - Tata Steel is the lowest cost steel producer, Hindalco / Sterlite / NALCO are competitive aluminum producers, Reliance is a major petrochemical producer. We now have world class producers in most sectors and there are many more success stories. Moser Baer exports more than Rs.1000 crore; Hero Honda with 1.7 million motorcycles is the largest producer of motorcycles; one now gets a wide range of automobiles in lndia such as Maruti, Tata, Hyundai, Toyota, GM, Ford; in Pharma there are Ranbaxy and Dr Reddy's among others; Bharat Forge exports castings and forgings to all main auto producers; Sundaram Clayton has been adjudged as Best GM supplier. Let me sum up the broad contours of success of the overall economic reform programme. In general, the reform programme has achieved remarkable success. Annual GDP growth has averaged 6 to 6.5 percent during the whole 15 year period since reforms began, and is now ascending to a higher trajectory of 8 percent plus sustained growth. The external sector is comfortable: gone are the days of perpetual "shortage" of foreign exchange. In contrast, some observers view India's foreign exchange reserves as a problem of plenty. Industrial growth has been restored and the manufacturing sector has found a new level of competitiveness, quality and efficiency. There is a transformation in the external impression of the Indian economy: it is now viewed with a sense of some awe and confidence in its potential of sustainable high growth. Finally, measured poverty has been reduced significantly. But we still have miles to go. The poverty ratio of 23-26 percent is still too high, about a quarter billion people living in poverty are too many. Employment growth is inadequate and we have an expanding young labour force, which will demand quality jobs. Public service delivery continues to be poor, with little sign of improvement. Let me now turn to a menu of things that we need to do. **Ill. Where Do We Go?** We have now had 15 years of economic reforms spanning five governments. What have these reforms achieved? We have ascended a higher growth path; poverty has been reduced; the external sector is more than comfortable; industrial growth has been restored; and all this has been achieved with financial stability in the country. As a consequence of all these momentous changes there is a new respect for lndia in the world and, even more important, Indians in all walks of life have found a new level of self confidence. But we still have miles to go. We need to move to the next level of sustained growth so that per capita income growth can exceed seven per cent per annum (or over 8.5 percent per GDP growth per annum on a sustained basis) and thereby see at least a doubling every decade. Although poverty has been reduced considerably to less than 25 percent, this level is still too high with 250 million living under the defined poverty line, which itself is at a very low level. The main organizing principle of most reforms carried out so far has been that of freeing the private sector from the myriad government controls that had existed for a long time. Whereas this process itself still has some distance to go, the consequence of this widespread deregulation and introduction of competition in most segments of the economic sphere has been the very visible unleashing of entrepreneurial energies at all levels and in most parts of the country. We have been reasonably successful in what we set out to do so far, with the benefits of increased competition and efficiency manifesting themselves in the higher recorded growth, particularly in the present decade. The issue that arises now is whether we have reached the limit of private sector led acceleration in investment and output growth? Will this now be increasingly constrained by the lack of public investment, both physical and social? An underlying theme encompassing most constraints now is the lack of adequate delivery of public services in both quality and quantity. The public service system is simply not functioning. Further acceleration in economic growth and reduction of poverty will need greater investment and employment growth along with enhancement of productivity. For such acceleration to take place we will need a significant enhancement of growth in capacity building and in the availability of public services that the private sector cannot provide. I, therefore, believe that just as the first generation of reforms empowered the private sector to perform as it can to the limits of its abilities, the second generation of economic reforms must focus on a similar empowerment of the public sector to deliver public goods and services for the benefit of all segments of the private sector, corporate entities and the public alike. Lest this proposition be misunderstood, it should be made clear that I am not advocating greater empowerment of the public sector to increase its control over the economy as was the case in the past. The "public sector" needs to be seen in its widest definitron to encompass all levels of governments from the local, state to national, and their entities, which deliver public goods and services. I would like to take up four areas, by way of illustration, where we need to give focused attention and which I believe can mainly be done by the public sector, even if some of it is to be delivered through public private partnership. The four areas that I propose to address are: agricultural development, urban development, human resource development, management of public services. What is common among these sectors is the lack of competence in public systems that govern these areas. There are other areas of broader governance that could also be taken up, particularly the maintenance of law and order, but that would take me too far afield from my area of competence related to the economy. _Agriculture_ One of the most disturbing features of the recent growth experience has been that of the deceleration in agriculture growth (Table 9). [](https://indianliberals.in/content/nani-palkhivala-education-leadership-and-vision-of-free-india/attachment/screenshot-56/) With about 60 percent of the population still largely dependent on agriculture, this deceleration has clearly had a significant impact on slower reduction in poverty levels than otherwise would have been the case. Moreover, for aggregate annual GDP growth to exceed 8.5 percent on a sustainable basis it will be difficult if agricultural growth itself does not exceed 4 percent annual growth. The fast growing economies of East and South-East Asia all exhibited elevated levels of agriculture growth along with industrial and service sector growth during their fast growth periods. Higher agriculture growth will also lead to faster increases in rural household incomes giving rise to greater demand for goods and services in rural and urban areas alike, which would be employment promoting. In order to understand where the potential for higher agricultural growth may lie, it is useful to briefly examine the pattern of growth In both the demand for and supply of agricultural commodities. Let us take the supply side first. After the prolonged drought of the mid 1960s, and the severe difficulties experienced in food security during that period, the government launched a crash emergency programme to accelerate the production of basic food grain cereals. This was fortunately accompanied by the discovery of high yield rice and wheat varieties internationally, which made the green revolution possible. Thus, growth in rice and wheat production took place in a sustained fashion through both significant productivity gains and through expansion in the area devoted to cereal production. The successful evolution of the Green Revolution gave the country both agriculture growth and food security over a period of more than two and a half decades. In recent years, however, production growth in cereals has stagnated significantly, and further productivity gains are increasingly difficult to achieve. Equally significant change can be observed on the demand side. As may be expected, with increasing incomes, there has been a progressive diversification of the Indian diet in both rural and urban areas involving a shift away from cereals to non-cereals. For the poorest, of course, the initial increase in incomes leads to enhanced demand for food and a shift from lower quality cereals to higher quality cereals like wheat and rice. As incomes increase further, greater growth takes place in the demand for non-cereal foods such as milk., fruits and vegetables, and for fish, poultry and meat for those who are not vegetarians. Consequently, it needs to be understood that, whereas there may be technological limitations to the continued growth of cereal production from the supply side, there are also limitations to the continued growth of cereals from the demand side. Admittedly, the shift to demand for certain kinds of meat will lead to acceleration in the demand for certain kinds of feed stocks for animal production. Nonetheless, the key point for policy is that the acceleration in agriculture production cannot come from that of cereals, keeping both demand and supply constraints in mind. That being said, it still needs to be emphasized that the serious stagnation in cereal production that has taken place in the last ten years or so needs to be addressed with urgency. What then needs to be done? We can learn from the approach taken more than thirty years ago, which still dominates our policy thinking. The success of the green revolution was achieved by the adoption of a coordinated policy package that addressed the needs of production on a national scale. Simultaneous provision was made for the supply of needed technology inputs, infrastructure, input supplies and the delivery of credit in a timely fashion. Technology inputs were provided by the setting up of a chain of agricultural universities across the country, which, moreover, were also connected with the international agricultural research system and foreign counterpart ' agricultural universities, particularly the land grant colleges and universities of the United States. For the transfer of technology from the laboratory to the farm, agricultural extension systems were organized, first under the Intensive Agriculture Districts Programme (IADP) and later the Intensive Agriculture Area Programme (IAAP). For a considerable period of time both the research and extension systems proved to be quite effective, but deteriorated later. Infrastructure provision was essentially needed for the expansion of irrigation from groundwater sources, which required the greater availability of electric power to energize pump sets. Consequently a large rural electrification programme was initiated along with the provision of power for agriculture at subsidized rates. The main new inputs needed were seeds, fertilizers, pump-sets and tractors. Apart from the arrangement of supply of these inputs, corresponding arrangements were made for appropriate credit delivery to farmers to enable them to buy these inputs. The nationalization of banks, the creation of regional rural banks, and the creation of National Bank for Agriculture and Rural Development (NABARD), to govern the rural cooperative banks, were all directed towards this massive change in the delivery of credit to fuel the green revolution. Most of these activities were done on a national basis with appropriate coordination with state governments and other public sector agencies. Given the highest priority that was attached to this programme, it delivered. _Need for a Second Green Revolution_ The need now is for a corresponding second agricultural revolution, but one that will have to be much more heterogeneous. With the increasing diversification of the Indian diet, there is great potential for acceleration of growth in the production of all non cereal foods, though in varying degrees. There is a need for a new agricultural revolution in all areas such as: dairying, horticulture (covering both fruits and vegetables), aquaculture and pisci-culture, poultry, meat and even wineries. There is also similar potentiaI for acceleration in growth in non-food agriculture. The potential in all these areas is massive for income and employment generation on a well distributed basis; for generation of a host of new activities; and for widespread innovation. How can this be achieved? A key common feature behind the success of the national programme related to both the green revolution and the white revolution (milk production) was the relatively homogeneous nature of cereal production and of milk. It was thus possible to design national programmes that were broadly applicable country wide with relatively easy regional variations. The difficulty in designing programmes for the new agricultural activities is that these products are very heterogeneous and which, moreover, exhibit great regional differences. Even for each activity, say poultry production, it will be difficult to design the kind of national programmes that helped the green and white revolutions. The need is now for decentralized packages for the many different activities that will have to be regionally disaggregated. The broad approach can be similar. Each package will need to make simultaneous provision for technology inputs, infrastructure, supply of inputs and associated credit delivery. Whereas the packages will need to be diverse and decentralized, it is unlikely that they will be developed without the initiation of a nationwide coordinated programme on a mission basis. Such a programme could form expert teams for each activity and location. It will be essential to bring together high level expertise, both domestic and international, along with local practitioners. Each team would prepare a package for their respective activities and locations. There is now much more expertise available across the country relative to the situation 35 years ago. Along with such a disaggregated but coordinated programme, there is a need for a major new initiative for the rejuvenation of agricultural research that is also regionally distributed. A crash programme is required for the urgent renovation of agricultural universities, which will need to be supported internationally as well. A beginning has already been made by the Prime Minister's initiative to renew association with the US research system. These universities need to be made respectable again. They will also need to specialize in the activities specific to their locations. The transfer of technology from these rejuvenated universities and from other sources will also have to be specific to each activity and new forms of extension activity will need to be explored to achieve the maximum effectiveness. There is increasing expertise in the private sector and in the cooperative sector so new forms of public private partnerships will have to be explored, just as the National Dairy Development Board innovated in respect of milk. The banking system will also have to explore ways and means of achieving efficient credit delivery to these new agricultural activities along with all their associated activities. As the system develops, the supply chain from farm to market will need to be financed: warehouses, cold storages, rural transportation, refrigerated trucks, along with all the service intermediaries. The efficient delivery of credit in a dispersed manner in rural areas will need to give special attention to the minimization of transaction costs through reduction in layering of intermediaries, much greater use of information technology in information collection, risk assessment and risk monitoring. Clearly, a great degree of innovation is called for now with out of the box thinking, away from the past paradigm of directed credit. Finally, agricultural diversification and growth is not possible without the provision of rural infrastructure: roads, storage facilities, transportation, telecommunication and power. All of these activities have very high economic returns but those that have public good characteristics have low financial returns. They are, therefore, difficult to finance. User charges will have to be used where feasible, but other financing means will need to be explored. States like Punjab, Haryana, Tamil Nadu and Goa built rural roads early and financed them through the imposition of local cesses like the Mandi cess. Hence there is a clear need for the search for new financing mechanisms. Investment in and the financing of rural infrastructure is, therefore, a key challenge. The government has clearly recognized this through the initiation of Bharat Nirman and PURA. I have digressed at some length on the need for accelerating agricultural growth and how it could possibly be done because of its obvious importance and its relative neglect over the past 15 years. The key point that I would like to emphasize here is that without the organizing and coordinating initiative of the government and its agencies at various levels, such a programme cannot be implemented. It is in this context that I have talked about the empowerment of the public sector in all its aspects, but particularly related to competence. _Urbanisation and Urban Development_ Let me now move to issues related to urbanization and urban development. It may be ironic, but just as agricultural growth has stagnated in recent years, the astonishing fact is that urban population growth also slowed down In India during the 1980s and 1990s (Table 10). The normal expectation is, and the historical experience is, that urban growth normally accelerates with economic growth. So the slowing of Indian urbanization is unexpected, perhaps anomalous, and worrisome. At the same time, the magnitude of India's urban population is large, about 300 million people, similar in magnitude to the total population of the United States. Even with low growth it will probably double by 2030 or so. According to most projections done in the 1980s, the urban population in 2001 was expected to be about 30 to 35 million higher than the estimated 285 million. Contrary to popular impression, there has been a significant slowdown in net rural urban migration: people are not flowing into cities and there is no "urban explosion". During the whole decade of 1981 to 1991, total net rural urban migration was only 12.7 million people and 14.4 million in the following decade of 1991-2001. In both decades, net rural urban migration accounted for only 21 percent of total urban population growth. Why is this worrisome and why has this strange occurrence taken place in India? In the light of low growth in agricultural production and productivity, had there been a greater rural urban transformation, outward migration from rural to urban areas would have relieved some of the economic pressure in rural areas. Ironically, this in itself is also related to the inadequate increase in rural productivity. Had there been greater increases in rural productivity, rural incomes would have increased faster, leading to higher growth in the demand for non-food goods, leading to higher industrialization and urbanization. With higher productivity, more food could also have been produced by fewer people and hence more people would have been released off the land. The second issue relates to the atypically low growth in manufacturing employment: during the decades of the 1980s and 1990s, output growth in industry far exceeded that in employment. This experience is also quite different from that of the East and South-East Asian countries. Thus, there have been neither demand pressures for labour in urban areas, nor supply of excess labour from rural areas. Both are related to failures in both public policy and public administration and public management. Just as we have not responded to the changing contours of agriculture, the low absorption of labour In urban areas is related to inappropriate industrial and urban policies. **Table 10:  Urban Population in India, 1901-2001** Census Year Year of UAs/Towns Total Population (in million) Rural Population (in million) Urban Population (in million) Average Annual Growth in Urban Population Urban Population as percentage total Population 1 2 3 4 5 6 7 1901 1,830 238 213 26 10.8 1911 1,815 252 226 26 0.00 10.3 1921 1,944 251 223 28 0.77 11.2 1931 2,066 279 246 34 2.14 12.0 1941 2,253 319 275 44 2.94 13.9 1951 2,822 361 299 62 4.09 17.3 1961 2,334 439 360 79 2.74 18.0 1971 2,567 548 439 109 3.80 19.9 1981 3,347 683 524 160 4.68 23.3 1991 3,769 846 629 218 3.63 25.7 2001 4,378 1,027 742 285 3.07 27.8 Note: - Urban Agglomerations, which constitute a number of towns and their outgrowths, have been treated as one unit. - The total population and urban population of lndia for the year 2001 includes estimated population of those areas of Gujarat and Himachal Pradesh where the census could not be conducted due to natural calamities. - The total population and urban population of lndia for the year 1991 includes interpolated population of Jammu & Kashmir where the census could not be conducted. - The total population and urban population of lndia for the year 1981 includes interpolated population of Assam where the census could not be conducted _Source: Census of India, 2001_ The persistence of industrial policies, such as restrictions in many labour using manufacturing sectors being reserved for small scale industries, and rigidities in labour legislations, have contributed to the bias against labour using industrialization. Such policies were further compounded by inappropriate industrial location policies that have restricted the location of industries in cities and urban areas since the 1970s. Such restrictions have led to the loss of agglomeration economies, thereby raising the cost of industrialization and hence inhibiting expansion. Moreover, the role of cities as incubators for manufacturing entrepreneurship was not also allowed to flourish; and finally it is labour using industries that need to be located in cities and urban areas. The necessity to locate in distant locations, where labour is not easily available, also inhibited labour using industrialization, and hence urbanization. Another set of reasons why urban growth slowed in the 1980s and 1990s is connected with the extant rigidities in urban land policy. The existence of rent control laws since the 1940s, urban land ceiling laws since the 1970s, inappropriate zoning and building bye-laws, have all contributed to the inflexibility in transformation of land use in urban areas, thereby slowing urban growth. These rigidities also implied excessive government control of urban land development, which was handicapped further by lack of resources and expertise. Thus, land assembly and land development in Indian cities has been handicapped generally, and has also led to excessive increase in urban land prices, making shelter unaffordable for a large proportion of the people. These policy rigidities have been further compounded by inadequate urban infrastructure investment and severe problems in urban governance: urban local bodies have not been effective; they suffer both from lack of expertise and of financial resources. Local taxes are typically not buoyant and poorly administered, and user charges are low and ineffective. The consequence is that most urban environments are inhospitable, particularly to the less well off. This is indicated by the fact that about half of urban households do not have access to drinking water within their house; and about a quarter of urban households do not have access to any latrine, private or public. These messages have obviously gone back to the village and it is no wonder that urban growth has slowed down. What is to be done? This is another case where the public sector has to be empowered to make appropriate knowledge based policy that is city and people friendly; and also to build capacity to manage cities in a progressive framework. Overall industrial policy and industrial location policy both have to be rid of their anti-labour using bias; and industrial location policy has to provide for the conscious development of urban industrial parks. Many Asian cities, for example, including a high income city state like Singapore, have a profusion of flatted multi-storied factories that house a host of non-polluting labour using manufacturing facilities. There has to be a recognition of the virtue of industrial clusters and facilitation of associated facilities such as industrial training institutions, educational and health facilities. Many such activities can be supplied by the private sector but it is enlightened public management that can bring them about. We now have 35 million plus cities and about 400 cities with more than 100,000 population. Thus, the management problem of these cities are immense in terms of financial management, in the provision of public services, and overall city management. The budgets of the largest cities are larger than those of some states. Yet there are almost no programmes for the training of city managers, there is little expertise available, and the prestige of municipal employees is low. Once again there is a massive failure to provide for public management of cities in lndia in all its various manifestations. Hence strengthening of city management is a key requirement for the healthy growth of lndian cities. This needs a massive programme for financial strengthening of local bodies including revamping of their local tax systems so that they become buoyant. Ways and means will also have to be found for credit enhancement of urban local bodies so that they become credit worthy and can then raise the resources necessary for urban infrastructure investment. Overall, cities are huge public management systems that have been largely neglected. With the opening of the lndian economy, lndian industry and enterprise of all kinds have to be competitive with the best in the world. They will be handicapped if the cities that they inhabit are themselves not as efficient as their counterparts elsewhere. Hence, the acceleration in growth of lndian enterprise will be constrained without adequate empowerment of the public sector in terms of management of lndian cities. This is a job that the private sector clearly cannot do. _Human Resource Development_ Let me now turn to human resource development. It is ironic that we have achieved great international recognition because of our achievements in information technology, which is often termed as the knowledge economy. We often believe that our comparative advantage is in knowledge intensive sectors. In fact, given the basic indicators of health and education, it is difficult to sustain the notion that we are a knowledge intensive country, notwithstanding the fact that we do have islands of excellence in various areas (Table 11). Basic literacy levels in lndia have been improving continuously. and most noticeably in the 1990s from 52 percent in 1991 to 65 percent in 2001. But these levels are much lower than most comparator countries. If productivity in agriculture is to improve, the basic education levels of the rural labour force, both male and female will need to improve considerably. Similarly, if labour using lndian industry is to compete in the world, its labour force also will have to be better educated and technically trained. The future will essentially need a skilled labour force. _Primary and Secondary Education_ That there is increasing appreciation of the education deficit in lndia is shown by the new programmes launched by the government for providing a new thrust to primary education: the Sawa Shiksha Abhiyan (Education for All Programme). There are also a host of non governmental and other philanthropic organizations now concentrating on the rapid expansion of primary education in India. However, it is now well known that there has been noted deterioration in the public education systems in most parts of India. The performance of public primary schools has been widely brought into question. There is also increasing evidence of a shift from public to private schools, even by the poor, and often their quality is no better. What is encouraging is that with even poor parents spending a lot of money on primary education, which should really be provided for by the state, there is a clear demand for it and recognition of its utility for upward mobility. The expansion of government [](https://indianliberals.in/content/nani-palkhivala-education-leadership-and-vision-of-free-india/attachment/screenshot-57-2/) programmes will certainly expand the quantity of education being offered. What needs equal attention, however, is the quality of education, which would emerge if there is greater local accountability of the school system and greater local involvement in general. Teachers themselves need to be incentivised and better trained; and teaching materials have to be provided and improved. Clearly, these problems are the most pronounced in the poorest parts of the country that are also underserved in terms of basic infrastructure like power, rural roads and communications. A great deal of innovation and experimentation is going on but much remains to be done. Whereas there should be no doubt that the state retains primary responsibility for ensuring primary education to all, there can be many different ways of delivering it, including the involvement of non government schools of different descriptions. As some success is achieved in the expansion of primary education and reduction in drop out rates after primary schooling, the next thrust will be the burgeoning demand for secondary education. As we progress, incomes increase and production processes need greater and greater skills to be competitive, primary education will no longer be adequate for performing lower skill tasks. Whereas there is considerable thinking going on with respect to primary education, we haven't even begun to think about the resources and strategy needed for the large consequent expansion of secondary schools. We will need to expand the supply of secondary school teachers very significantly, invest large resources in school buildings and in the preparation and distribution of education materials. It is difficult to locate secondary schools in each village: issues will also ariqe on how to make these schools accessible to children in widely dispersed rural habitations. Once again, great innovation is needed in thinking about how all this is to be done, and how the large resources needed will be generated and invested efficiently and responsibly. _Vocational Training_ What will these schools teach? Every educational system has had to deal with the tension between the need for basic secondary education and vocational training, and the difficulties involved in guiding children appropriately to the different streams. Here again, there has been little organized thinking in India. Technical training has essentially been provided by Industrial Training lnstitutes (ITls) but they are not many, and often do not turn out students with the relevant skills. It is interesting that in lndia there are 175 defined trades that can be subject to organised training; in Germany there are 2500 such defined trades and occupations, each with its organized training syllabi, training certification, and availability of training institutions. The famed German vocational training system involves a very complex web of interaction between the federal government, state governments, local chambers of commerce, and firms that fund and take on the trainees. Whereas it would not be appropriate to suggest that lndia adopt the German model, which is itself undergoing change and modernization, I only mention it to suggest that it is possible to evolve an organized approach that makes vocational training respectable, demand oriented and with great local involvement and accountability. A beginning has been made in seeking the upgradation of 500 lTls with industry participation, but much more needs to be done to ensure regular skill upgradation in all vocations. The effort will have to involve extensive industry participation at the local level so that the training imparted is seen as relevant by prospective employers. As with the new requirements for agricultural extension systems, the systems for vocational training will need to have great heterogeneity in both the kind of training to be imparted but also how the training to be organised, according to the different needs in the widely disparate regions of India. We also need to recognise that service occupations need organised training as well. One can illustrate this by the longtime recognition of training needs in the hotel industry and how the private sector itself has set up a large number of excellent training institutions. Similar has been the case in information technology where many private sector training institutions emerged as demand started rising. Hence this is clearly an area that is most well suited for public private partnerships. Once again, however, the organisation of public private partnerships also involves a great deal of organizational capacity in the public sector, which designs delivery systems in a way that they spawn efficiency, productivity and innovation. _Higher Education_ Let me now move to issues related to higher education. There has clearly been a huge increase in quantity since independence and in the proliferation of private sector technical institutions in recent years, particularly in the Western and Southern regions of the country. However, the success of a few elite. institutions such as the Indian Institute of Science, Indian Institutes of Technology (IITs), lndian Institutes of Management (IIMs), the National Institute of Design, the more recent National Law Schools, have masked the general lack of quality in lndian higher education. Even among the elite institutions, only three were included in the top 500 higher education institutions in the world as ranked on objective criteria by a group of Chinese researchers. Because of the good quality of lndian secondary schooling on a relatively wider scale, competitive processes lead to the emergence of a large number of very bright lndian students who can then excel despite the poor quality of instruction and environment in higher educational institutions. Meanwhile, there has been an explosion of colleges and universities in East and South East Asia, in China, South Korea, Singapore, Hong Kong, and Thailand in both quality and quantity. We must recognise urgently that there is great need to both improve the quality of our colleges and universities in terms of facilities, laboratories, libraries, and most importantly, faculty - along with significant expansion of quantity. What should be clear is that the current system will not do. Although a whole host of private technical institutions have mushroomed in recent years, most of the higher education system remains government controlled and run. This was originally modeled on the British public university system which has, over the years, become ossified in such a fashion that creativity and quality are at a premium. There is a severe shortage of resources: tuition fees are extremely low and the government is strapped for resources. Moreover, there are legitimate competing claims for scarce resources for primary and secondary education, not to mention vocational education. Here also we. need to search for new systems of governance that can allow for diversity in delivery. While providing appropriate incentives for the achievement of excellence with the great increase in compensation levels in the private corporate sector, and the lack of even basic facilities in colleges and universities, attracting brighter students to take up teaching careers has become even more difficult than it was hitherto. There is, to my mind, some needless debate on private versus public education. No good higher educational institutions in the world are profit oriented. Even in the U.S., where there is perhaps the greatest prevalence of "private" colleges and universities, the proportion of students in state run institutions form the majority. Even those institutions that are labeled as private are essentially autonomous non-profit institutions. They are private in the sense that their management is autonomous of government controls, but most receive significant government grants in different ways. What is interesting about these institutions is their system of governance that attempts to ensure quality, excellence and competitiveness. Once again, I would not advocate the transplantation of any foreign system into India, since each system is rooted in its own peculiar history. What I would argue for is the generation of a new excitement for higher education in the country and for a search for new resources and new forms of governance that ensure quality and aim at achieving excellence. Overall, there is no way that we can sustain growth of the kind that we envisage, 8 percent plus annual growth, unless the whole education system, primary, secondary, vocational and higher is revamped. The State must bear the responsibility for ensuring that this happens, but must organise it in such a way that the best entrepreneurial energies that are now manifesting in the country are also harnessed towards the cause of education. _Health_ Before I close on the subject of human resources, I should mention the issue of health. This is in itself a vast and complex subject which I am not competent to even touch. The key point that has to be made, however, is that economic efficiency can only be achieved at different levels if people are healthy. Whereas, a good deal of success has been achieved in almost eliminating a number of infectious diseases of the past, morbidity in lndia remains high. There are significant issues related to the delivery of public health, particularly the availability of clean water and sanitation but there are equally important issues to do with the delivery of curative health. Here once again, there is widespread evidence of the deterioration of public medical systems which are being replaced by private providers. Given the availability of new techniques, new drugs, and diagnostics, the less well off are increasingly finding it difficult to access these services at any semblance of affordable cost, and health insurance is in its infancy. If our young and expanding population is to look forward to a healthy and rewarding life, this is another vital area crying out for innovative, affordable systems of public private partnerships that are reliable and trustworthy. Once again the public sector has to gain competence for organising such a system. _Public Sector Management_ The common theme that runs through the three areas that I have chosen to illustrate the need for the next generation of reforms is that of competent and innovative public management: I have not spent any time on the physical areas infrastructure since they have been discussed otherwise much more often. All the areas of physical infrastructure involve the management of large systems: airports, ports, railways, telecommunications and the like. All of them also have in common the possibility of at least part delivery of the private sector. As discussed, cities, education systems, health systems, hospitals, are also all large public service systems that are in dire need of efficient and innovative management. The key issue is that of efficient delivery of public services, and in lndia particularly, at affordable prices. In most of these areas a large public sector presence is unavoidable. Urban water supply systems, sewerage systems, public lighting and public transportation are typically organised by some form of governmental authority, and even if there is some element of private delivery. Being essential services, there has to be some form of public regulation. In the railways also, whereas some private delivery is possible, international experience suggests that basic infrastructure ownership has to be with the government, along with regulation and allocation. Similar is the case with ports and airports: typically ownership is usually with the government or public authority, while delivery can often be prioritised. All such public management systems are typically very large and complex. Hence they need excellence in public management. One would imagine that the biggest management challenges would lie in the management of these large complex systems which, in principle, should attract the brightest managers. The irony, however, is that there is little generation of expertise for such management functioning and there are few prestigious schools of management that consciously impart training for managing these systems. All these systems need complex financial management of huge budgets; all of them involve sensitive customer delivery; and all involve complex logistics. In other words, all such systems have all the elements that should attract the brightest people who like to deal with challenges. It is ironic that there is a proliferation of management schools imparting complex training for small challenges, but none for these complex tasks. What do we need to do? We need to make public service prestigious again: not for the exercise of power and authority, but for tackling challenges for efficient public service delivery. Most public service delivery operations, including those run by the civil service, need the injection of outside expertise at different levels. Each of our public authorities discourages lateral entry and therefore tends to become inward looking and suspicious of new ideas. Lateral entry of outside experts would do much to inject new energy and even public entrepreneurships. A theme running across the different sectors that have been discussed is the exploration and development of new forms of public private partnerships. It must be understood that these are not easy to foster. They usually involve the tension between two different organising principles: one non-profit and the other profit seeking. The challenge is to design appropriate incentive systems so that the ultimate objective gets aligned. Different sectors will need different forms of partnerships. In education, for example, the partners could well be non-profit non-governmental organizations. In ports and airports, the partners could clearly be profit seeking private companies. Overall there has to be a search for innovative forms of public service delivery. This would also involve realignment of compensation levels. If individuals of high levels of competence are sought to do the most complex tasks they will need to be compensated adequately. We thus need a nationally generated focused program to improve public administration and management at all levels of government and public authorities so that the delivery of public services becomes efficient. This cannot be done by the private sector and if it is not done the private sector will itself suffer from the emerging inadequacies of health, education, rural and urban infrastructure, and all other physical infrastructure. **Concluding Remarks** The economic reforms process carried out in India over the last 15 years has brought forth a burst of new entrepreneurial energies across the board in almost all sectors. As a consequence, the country is now recording substantial economic growth in excess of 8 percent. This growth could possibly be constrained by the lack of both quality and quantity of public services supplied by the Government and its various authorities. Hence there has to be all-round improvement in investment in and delivery of public services. The new focus of economic reforms has to be the empowerment of the public sector to do what it is supposed to do: public services. _Previous musing: [NANI PALKHIVALA: EDUCATION, LEADERSHIP, AND VISION OF FREE INDIA](https://indianliberals.in/content/nani-palkhivala-education-leadership-and-vision-of-free-india/)_ --- ## [Musing] Economics of Freedom URL: https://indianliberals.in/musings/economics-of-freedom/ ### Body _The following is a lecture delivered by M.R. Masani in Mumbai and published as a booklet by the Forum of Free Enterprise in February 1965. In this lecture, Masani discusses the socialist wisdom dominant in that age and reflects upon the inevitable road to totalitarianism by citing examples such as China and Russia and deconstructing the very essence of Socialism. _ _You can access the complete, unabridged musing [here.](https://indianliberals.in/wp-content/uploads/2023/05/Economics_of_Freedom.pdf)_The other day, I was talking to an esteemed old friend who holds high office and has a great deal of influence in the ruling party. Speaking of the pattern of economic development in this country, he told me that while he shared my dislike of the system of State Capitalism and State Landlordism as developed in Russia and China and was opposed to its establishment in India, he wanted the country to press forward towards the socialisation of all large‐​scale industrial enterprises and the establishment of cooperative farming. I was unable to convince my friend that the destruction of free enterprise and peasant proprietorship must lead in India, as in Russia, to the same kind of monolithic totalitarian dictatorship as had developed under Stalin. “We shall not allow it to happen,” he kept repeating with great sincerity but with what appeared to me to be a singular lack of realism about the fact that human nature is everywhere the same; and that Lord Acton’s dictum that absolute power corrupts absolutely applies to Indians as well as to other species of the human race. Now, you must all have had experiences similar to mine with friends among socialists, trade unionists and college professors. I suggest it might be worth our while to spend the next few minutes to ascertain the validity of the assumption that a completely nationalised or socialised economy can co-exist with the kind of political liberty that our Constitution guarantees and that we enjoy in practice today. I would like to discuss this with you, not to enlighten you–since you need no such light–but rather to urge and encourage you to join in the enlightenment of the many in our country who need it. It may be felt by some that this is a somewhat academic exercise; since nobody in India has yet suggested the complete socialisation of industry, trade and agriculture. While that is undoubtedly true, I venture to suggest that recent developments and trends do not justify too great a measure of complacency. The encroachments in recent weeks and months on services such as life insurance and trades, such as the export of iron and manganese ore on the one hand and the distribution of cement on the other, show how constant incursions are being made by the State in unexpected spheres. What is disturbing about these developments is not so much the entry of the State in these spheres but the fact that, in each case, a monopoly is sought to be established. Where will this process stop? From the export of ores to the export of jute and from the distribution of cement to the distribution of cloth are not steps as distant as may be imagined. Even today, we have reached a state of affairs where a manufacturer cannot go in for the production of a new article without the permission of the Government under the Industries (Development and Regulation) Act. Alongside all this, the Government of India has just sent Communist China a delegation to study the methods of so-called agricultural “co-operatives,” which are known to students of those developments to be nothing but the collectivisation of the land in accordance with the Stalinist pattern, which led in Russia to the liquidation of millions of peasants and is doing so at present in China. In light of these developments, I, for one, would hesitate to disagree with the _Times of India_ for writing editorially as it did a few months ago: “The point is whether, under the cloak of an avowedly socialistic pattern of society, the country is not being driven along totalitarian paths to totalitarian targets…Few of us would like to see India converted either into a Communist or a fascist State, but the paths we are treading today seem to lead inevitably to that goal.” Having said this, let me make it clear that to my mind, there are hardly any persons in office today or in control of the Congress Party who have any intention of treading the Soviet path. I am not questioning for a moment the democratic _bona fides_ of our planners. I am aware that all they seek to establish is a society fit for prophets to live in, but with a marked aversion to profits. What is open to question is whether, by their support of certain policies, actuated no doubt by the urge for social justice, they are not creating conditions whereby the liberties guaranteed by the Constitution may be imperilled. Yearning to do good, they believe they can preserve political freedom while hacking away merrily at its economic foundations. They may well be reminded of the observation of Lenin, who was an expert in the manipulation of power: “He who says A, says B.” Some of you may recall in this context the story of the Administrator of Price Controls in the USA during the last war, someone once approached him with the proposition that the wage-price line need not be held quite so firmly and that just a little inflation would not do any harm. To this, the harassed official replied, “Well Joe, you may be right. A little inflation may not do any harm. But the trouble is that having just a little inflation is like having just a little pregnancy–it keeps growing.” Let us now examine the widespread assumption that we in this country can sustain a democratic Government alongside a State monopoly of economic ownership of industry, trade and agriculture. First, let us consider the effects of such a situation on the lives of the worker, the peasant, the investor and the consumer and the man in charge of industrial production. Today, the worker has a right to choose and change his job within the limits of his training and capacity. He can withhold or deny his labour, participate in collective bargaining, and, if necessary, strike work together with his comrades. If he should lose his job or the strike should fail, he finds other enterprises ready to employ him. In a society where the State is the only employer and every citizen willy‐​nilly a State employee, to what extent will these precious rights be preserved? Is there any reason to believe that, when there is only one employing authority in the country, it will permit an employee to throw up his job in an economic activity where he is performing a necessary function and allow him to shift at will to some other occupation? Is it likely that a State exercising a monopoly of production and distribution will permit its employees to go on strike and thus upset the National Plan? Or let us take the peasant. Once he is a member of a collective farm or, for the matter of that, of a co-operative farm–the terminology will not make very much difference–is it to be expected that when he finds that the co-operative farm does not suit him? He wishes to withdraw from it, the original plot of land which he was persuaded to surrender will be restored to him, and he will be allowed to go his own way. As for the small investor who survives, his freedom of choice will be restricted to one of two or more issues of a so-called “voluntary” State Bond to which he will be forced to subscribe. His plight may best be imagined from the report that has just come out from Czechoslovakia about the finding of an unidentified corpse. The police report said: “Aside from two Government Bonds, no other signs of violence were discovered on the body.” In a free economy, it has rightly been said the consumer is king. The consumer who today is, within the limits of his income, able to exercise a wide freedom of choice about how much he shall spend, on what he shall spend, and how much he shall save will then be faced with one universal seller from whom he must obtain all his wants. The range of goods offered to him will be decided, and the price will be fixed by the State trading monopoly. If the quality or the price does not appeal to him, there will be no other brand of goods to turn to. To meet his basic needs, he must purchase or perish. Today, thanks to the law of the market–the law of supply and demand–and the discipline of the balance‐​sheet, it is the consumer who decides for the entrepreneur _whether_ to produce and _what_ to produce. When a man buys something on the free market, he is casting his vote as a citizen of the national economy. He exercises a free choice which, by affecting the price, influences a decision as to how the economy shall be directed. The exponent of the socialist pattern of society may concede all this but urge that from then on; it is the people collectively who will decide through parliamentary elections what kind of planned economy they want. Let us examine this claim. Once the yardstick of profit ceases to operate, the question arises as to how those at the helm of the omnipotent State are to determine what goods to produce and what priorities to establish. In the absence of an impersonal economic law such as that of supply and demand, some other yardstick has to be found. What principles will help in the exercise of these wide and arbitrary powers? In order to direct all our national activities according to a single plan, it will become necessary that every one of our needs is given its rank in order of values complete enough to enable the planner to decide how many cattle are to be reared, what crops must be sown, how many buses and trucks are to run, which coal mines are to operate, and at what prices soap and toilet preparations are to be sold. When a choice has to be made between more milk for children and higher prices for the farmer or between employment for the unemployed and better wages for those already employed, nothing short of a complete system of values will suffice. Can this be evolved democratically? To say that the people will agree by a majority through parliamentary elections that there must be central planning is not enough. An agreement on central planning without an agreement as to social values and ends is rather like a group of people agreeing to take a journey without agreeing on where they want to go. As a result, they may all have to make a particular journey which most of them do not desire. A parliamentary majority may vote clause by clause on a Bill, but would not a parliament voting and amending a comprehensive plan clause by clause make nonsense of the plan? It may be as impracticable to draw up an economic plan in this manner as it might be to plan a military campaign by parliamentary procedure. That is why, when those who believe in total planning are honest, they concede that parliamentary democracy will have to be suspended for the duration of the plan. Lenin coined the slogan of “the dictatorship of the proletariat.” Professor Harold Laski, more gentle, asked the question “whether in a period of transition to socialism, a Labour Government can risk the overthrow of its measures as a result of the next general election.” Significantly, he left it unanswered. Those of us who are in business and administration know that we cannot pull the manager out of his chair every little while, jettison his plans, and put someone else in his place with different ideas as to what should be done. The very concept of planning, even in a single business, implies continuity of control. When the management extends over the whole field of the country’s economic life, it must become an authoritarian apparatus. The persons who make it up may not want to be dictators, but the economy will go haywire if they do not accept that role. It is obvious that in such a situation, those who may claim to know all the facts, namely, the ministers and even more the experts, would alone be in a position to decide which of the different ends of planning are to be given priority. It is inevitable that, in the end, they would impose their personal or group preferences on the community as a whole. In such a context, parliamentary elections become a mere formality. When everyone is dependent on the Government for his livelihood and the State can starve you to death, nobody dares to criticise. When insurance agents, cement distributors and ore merchants all become dependent on Government for their livelihood and canvass the ruling party during the elections, how may the Opposition be expected to fare? Patriotism, too, will be mobilised on the side of the authorities. “Don’t rock the boat.” “Don’t change horses in midstream.” These will be the slogans with which the electorate will be intimidated. Only a few weeks ago, the Central Committee of the Communist Party of the Soviet Union answered criticism that had been advanced by foreign Communist leaders against those who had stood by and allowed Stalin to pursue his path of brutal terror and despotism. It explained that “the success of socialist construction and consolidation of the USSR were attributed to Stalin…Anyone who had acted in that situation against Stalin would not have received support from the people…Such a stand would have been regarded as a blow against the unity of the party and the whole State.” Throughout human history, it has been established that only power restrains power. That restraint is expressed through the existence of an Opposition. The existence of a freely functioning Opposition is the acid test of a democracy. For when Opposition is destroyed, there is no longer any limit to the exercise of power by those in whose hands it rests. The right of public Opposition to the rulers of the day cannot, however, be kept alive merely by wishing for it or even by giving it constitutional guarantees. The existence of countervailing power can only be assured when there exist in society a number of what may be described as relatively autonomous “social forces.” Such autonomous social forces are industrial management, trade, organised labour, the professions, the peasant proprietors and religion. It is only when these forces are not wholly subordinated to any one social force or the State that there can be an assurance of liberty. Only then will there be the mutual checks and balances that are able to curb power. This conclusion of the political scientists has been proved in practice by the history of the Soviet Union, and there is no example yet known in human history to the contrary. Recently, commenting on the indictment of Stalin, Aneurin Bevan, the British left-wing socialist, took exception to the thesis of the “cult of personality” advanced by Khrushchev. “Stalin,” he wrote, “became a tyrant because he was all powerful and not all powerful because he was by nature a tyrant. He grew into tyranny precisely because the character of the Soviet Constitution enabled him to do so.” I would add just two words that Bevan’s adherence to Socialism did not permit him and would say: “Because the character of the Soviet Constitution _and economy_ enabled him to do so.” For, when we go to the root of the matter, is it not the concentration of economic and political power in the hands of those who ruled the State that created the conditions for a Stalin and would do so again? Strangely enough, there is confirmation of this point from none other than Khrushchev. In his speech to the Congress of the Communist Party of the Soviet Union, Khrushchev pointed out how Lenin and even Stalin, right through the twenties, refrained from total terror during the process of eliminating the privileged classes and establishing Communism. He then went on to say: “When Socialism in our country was fundamentally constructed, when the exploiting classes were generally liquidated, when the social basis for political movements and groups hostile to the party had violently contracted…_then_ the repression directed against them began. It was _precisely_ during this period (1935–1938) that the practice of mass repression through the Government apparatus was born, first against the enemies of Leninism…and subsequently also against many honest Communists.” Precisely. The need for terror, according to Khrushchev, had passed, but so, alas, had also evaporated those autonomous social forces through which alone absolute power could have been restrained. In case some of you should like to think of India as a kind of second Britain rather than Russia, I invite your attention to some significant admissions recently made by Mr R. H. S. Crossman, British Labour Member of Parliament. Conceding that in the heat of battle, the British Labour movement had accepted sacrifices of personal freedom as an inevitable evil forced upon them by the class war, Mr Crossman frankly states the socialist dilemma. Referring to the socialist belief that “the only way to enlarge freedom and achieve a full democracy is to subject the economy to public control,” he goes on to point out: “Yet, the State bureaucracy itself is one of these concentrations of power which threaten our freedom. If we increase its authority still further, shall we not be endangering the liberties we are trying to defend?” Mr Crossman is candid enough to say: “Actually, the growth of a vast centralised State bureaucracy constitutes a grave potential threat to social democracy. The idea that we have been disloyal to our socialist principles if we attack its success or defend the individual against its incipient despotism is a fallacy.” If already, with a mixed economy and in a country with such a deep tradition of democracy and individual liberty as Britain, a left-wing socialist is impelled to strike this note of alarm, how much more imminent must the danger be in a country like ours where that tradition of freedom is a tender plant which needs to be nurtured with great care and caution? ** **I have come to the end of my thesis, though not altogether, I hope, for your patience! I trust no one will understand this to be a special plea for capitalism or an objection to all kinds of planning. To guard against such misunderstanding, I may mention that, as far back as 1946, I had delivered, in the series of Silver Jubilee Lectures organised by the _Bombay University School of Economics and Sociology_, an address entitled “A Plea for the Mixed Economy.” That plea was made by me before the mixed economy became the accepted policy of the Government. It is sad that I should today have to repeat it a decade later, at a point of time when the balance of the mixed economy is in danger of being destroyed, and it would appear as if it is ceasing to be the policy of Government. I still believe that a Mixed Economy, in which Free Enterprise and State Enterprise each have an equal and autonomous role to play, functioning alongside each other to meet the needs of the people, is the best possible system for this country both from the point of view of increased production and of equitable distribution. That, however, is a matter of opinion. What is not a mere matter of opinion but a grim statement of fact is that if the balance of the mixed economy is further upset and we drift to a state of affairs where Peasant Proprietorship, Free Enterprise and Free Trade Unionism stands or falls along with it are destroyed, then, however noble the intentions of those who pursue these policies and however great their love of justice and freedom, [a] blow will have been struck at the free way of life that not even the Constitution of the Republic will be strong enough to avert. It is not too late to stop such a drift. “It is seldom,” said David Hume, “that liberty of any kind is lost all at once.” What is necessary for those of us who love freedom and justice is to learn betimes to shift our fire and our aim from one threatening concentration of power and privilege to another in the changed conditions in which we today live. It was part of the greatness of Mahatma Gandhi that he was early to sense this change. “I look upon an increase in the power of the State”, he said, “with the greatest fear because, although apparently doing good by minimising exploitation, it does the greatest harm to mankind by, destroying individuality which lies at the root of all progress.” His greatest living disciple, Acharya Vinoba Bhave, only recently followed up that warning in more concrete terms when he observed: “We cannot say people will be happy under State Capitalism…In the name of the Welfare State, nothing should be done to centralise everything.” India’s leading socialist, Jayaprakash Narayan, who can hardly be charged with pro-capitalist views, has, on his part, declared that “the Welfare State under the name of welfare threatens as much to enslave man to the State as the totalitarian. The people must cry halt to this creeping paralysis.” I should like to think that there are many who share the concern I have expressed about the dangers that loom ahead and that they are just as anxious to ensure that our country and our people are protected from them. It is time for such men to act, for we live today in a climate where the passion for social justice and equality burns so strongly in many breasts that it blinds even otherwise intelligent and wise men from seeing where they are heading. One is reminded of the story of the mule that the farmer took to market and sold at a very low price–a good, healthy, upright, athletic animal. When the buyer, however, turned to drive away, the mule ran straight into a tree. “Look here”, yelled the buyer, “this mule you sold me is blind.” “No, he ain’t blind,” said the farmer, “he just don’t give a damn!” _Previous musing: [The Nation by RN Tagore (1917)](https://indianliberals.in/content/the-nation-by-rn-tagore/)_ --- ## [Musing] The Education of the Electorate URL: https://indianliberals.in/musings/education-of-the-electorate-m-a-venkata-rao/ ### Body _The following piece was originally published in the October 1961 edition of the Indian Libertarian Magazine. The author, M.A. Venkata Rao deconstructs Indian democracy vis-a-vis the relationship between voters and representatives. He emphasises the need for greater liason between representatives and their constituents, among other things. _The characteristics of the electorate everywhere determines the quality of democracy and its actual influence on affairs beneficial or otherwise. In our country today, we have very large constituencies consisting of voters given political rights on an adult basis irrespective of property, education and sex. For the Lok Sabha, we have constituencies running into lakhs of voters and in rural areas, they are spread over several townships. To contact them would require ample funds for conveyance and ample leisure. Only men of means can contemplate candidature for Lok Sabha or men favoured by parties with large funds to "invest" in the enterprise of capturing power.  The strategy to be adopted to win a majority in such circumstances will have to take into account a number of psychological factors even where sufficient funds are secured. The strategy depends on the psychology and economic standing of the voters as well as their scatter over a large area. It would be useful to record the outstanding features of the mind of the voters in a city as revealed to the present writer in the course of his campaign for a seat in Lok Sabha in the last elections. They will resemble similar electoral districts in other parts of the country in urban constituencies One of the outstanding impressions left on the writer's mind in the course of his contacts with individual voters both educated and uneducated was the surprising degree of cynicism that they displayed. They said frankly that in their deliberate opinion, one candidate was as good or as bad as another and that parties made little difference to the final outcome in good administration! One of the educated voters, a prominent lawyer, cut the candidate's appeal short with the curt remark "Stop that stuff. All parties make promises and claim to be better than their rivals! But I am voting for you as an individual because I know you. We want informed and reliable persons in Parliament" Another graduate said that he would not vote for any candidate at all, for all parties and candidates would have the same in effect. Thev stand for their own personal advancement and parties only aim at power and the opportunity for exercising patronage among their own supporters. A cigarette and pan vendor asked "Why should we vote for you to enable you to become one of the ‘high and mighty', travelling to and from Delhi First Class? We shall not see your face after the elections and we shall remain as uncared for as ever"!  A farmer asked whether he or his party would reduce taxes. He answered the question himself and said that no government would do so. In fact, he felt that new governments would impose new taxes in order to favour their own groups. Whether Maharajahs or elected Ministers, there is no respite from tax burdens to the farmers and other producers. And so, these elections are a costly farce. “People's governments are in the fashion these days and so the world goes on until the fashion changes, as in Pakistan, as we hear."  It is clear that a large number of voters of all ranks feel helpless and ineffective in the democratic system. Their vote coming at long intervals and giving no control to them over the representatives ultimately chosen to govern the country give them a feeling of frustration and futility. The doctrine of people's government, of the sovereignty of the people does not enthuse them. It makes no difference in their lives.. The class of representatives and the rulers chosen by them to form Ministries become a new class to take the place of the old white bureaucrats. In the exercise of power, they do not find any difference between the old and new system, except that a number of hypocritical claims are made by the new men to serve the people but they "serve' the people at greater cost and with less justice and integrity.  The individual voter feels lost in the vast machinery and numbers involved, he does not feel that his individual vote counts for anything. Hence there is the greatest difficulty in bringing him to the polling booth. Large proportions of the middle classes and the educated lower middle classes enjoy the holiday given to offices and factories and spend it in recreation or mid-day siesta or visiting relatives and friends. Only a few can be persuaded to take the trouble to vote if a conveyance is furnished. Such offer of conveyance is contrary to electoral law but it is more honoured in the breach than in the observance. All parties furnish such convenience to the extent they can afford. It is an open secret. If the workers of parties seek to report the malpractices of their rivals, squabbles and fights often break out. Even the breaking of heads and murders are not out of the reckoning.   The coming elections are likely to engender more bitter feelings and to cause greater disturbances of law and order than previous ones. The Congress will go all out to retain power, larger numbers of communists will enter the fray and the Jana Sangh men are not pacifist or timid in emergencies and they are extending their influence to new areas and consolidating their hold in their original districts and States.  There is great need to dispel the cynicism of the ordinary voter and to give him a sense of purpose and importance in participation in the electoral process. Most of the voters complain that the candidate is remote from their lives and is indifferent to their interests. It is important therefore that parties should take care to nominate candidates who have a sense of rapport with the bulk of the voting people in the constituency The other day, a Swatantra party organiser was boasting that a high official, a director of medical services, a doctor of wide popularity during his term of service would be given a party ticket. He was confident that he would sweep the polls. He may, but he has to reckon with the fact that there is a social and intellectual gulf between the eminent doctor and the bulk of the electorate. The ranks of voters do not want high qualifica!ions like M.R.C.P. etc. but want a person who identifies himself with them, with their joys and sorrows and their grievances and is willing to give time and energy to act as an effective liaison between them and the ranks of government.  In fact, most of them are thinking not so much of the general policies of government like socialism and five year plans but of their individual needs. They expect members of parliament, whether of Lok Sabha or of the State Assembly to use their influence to get jobs and· promotions and seats in college to their sons and sons-in-law and nephews! Or they want them to assist in the securing of trade licences or quotas or permits, if they are businessmen. These are no 'doubt illegitimate demands, on the part of voters but they are in their mind while voting or joining a party. Corruption is condemned in the abstract but every one seeks to get a more than equal share in the loaves and fishes of office! Of course, there are genuine cases where the representative is expected to secure justice to his constituents if it had been denied or any case owing to negligence or owing to the influence of rival party men in positions of power or advantage.  One way to remove the sense of frustration debilitating democracy at the roots today in our midst is to get the voter to keep in touch with his representative after the election. He should demand of him that he should keep in touch with his constituency and that he should visit his constituency in the intervals of parliamentary sessions and inform his supporters and others of what was taking place in the legislatures.  He should explain the policies of the party in power and of the criticisms of the opposition. It is this contact between voter and representative during off-session periods that creates a sense of reality in parliamentary government in the multitude of voters. During sessions, voters should communicate by post with their candidate in the legislature. On important occasions, they can send delegations to him to explain local reactions to Bills on the anvil of parliament.  Rousseau foresaw this difficulty in representative democracy. He said that the British voter was free only on election day once in four year. But with our large populations, we cannot go back to the direct democracies of Greek days. All we can do is to increase contacts and communication between primary voter and representative through modern means of communication. Supplemented by increased intimacy between them during  off-sessions, when direct meetings in the constituency may take place. The indirect information obtained by voters through the newspapers and photographs and radio can acquire direct face-to-face primary, personal character and vitality during these exchanges between voters and representatives.  The second snag in the electoral process that any candidate comes up against is the fact of caste. It is natural for voters of any caste to feel a kinship with a representative of their own caste and to vote for him. But it has been the writer's experience that in this matter, it is the candidate and the party managers who are the greater sinners against nationalism and democracy. They deliberately appeal to caste feelings where they help to secure the favour of their candidate. It is not the uneducated voter who is primarily responsible for the havoc done in his name and for the eclipse of broader nationalist motivations during elections and in the democratic governance ,generally. It has been found that where an appeal is made straight to the national and democratic consciousness of the people, caste barriers have been crossed to a considerable and. encouraging extent. The present writer received a few hundred votes even from Muslims, after  a straight appeal, in a single speech in a predominantly Muslim locality! It ls wrong to assume that Hindu wiil vote Hindu and that Muslim will vote MusIim, that Brahmin will vote Brahmin and Non-brahmin, Non-brahmin and so on. It is the sacred duty of the candidate and his supporting party not to appeal to sectarian motives but to have faith in human nature  and the higher feelings of nationalism and democracy even in uneducated and unsophisticated voters. It is a mistake to think that formal education confers any superiority on the graduate. The unlettered person can understand ethical motives better and generally reacts to ethical appeals better than the educated. The ignorant persons lack information about the world but they are shrewd Judges of character and can judge who is a better representative to speak for them in parliament. The feeling of participation in a human and classless way with the lives and hopes and fears of the masses is what counts in the electoral process and this can be conveyed  to the uneducated more easily than doctrines regarding democracy.  But the voter also needs some basic information to vote intelligently and to have the right expectations about democratic government. The constitution and the fundamental rights should be understood by all voters whether literate or illiterate. The role of the press, the distinction of party from government, the responsibility of Ministers, the difference between delegate and democratic member of parliament and the duty of voting using his best judgment. Such information should be imparted to the voters. It is best done by non-party Voter's Clubs, one for each Assembly constituency, which ought to develop into a primary face-to-face association, cutting across wealth, office, birth, education and political power. Such Clubs run on a non-party basis should develop into basic cells of the national democratic organism. They will take the sting out of the party boss system.  Patriotism demands that some educated persons should come forward to form and develop such Voter's Clubs all over the country. Particular attention should be paid to remove or at least mitigate the cynicism and frustration of the individual voter. The voter should be informed that in view of the vastness of the country, it is impossible to establish a direct democracy, as in Greek City States and in the Indian republics of old in the days of Chanakya and Chandragupta Maurya. The next best thing is to have assemblies of representatives and in order to keep the assemblies manageable for business and effective discussion, it is necessary to limit their number to around 500 for the country as a whole and 200 for the state. And the necessity has its own advantages to countervail the disadvantage, namely we can have a selection of the abler among the rank and file who will act as representatives to think for the people and develop an expertise instead of being gramaphone records for more delegates. It is also impossible to convey all the differing opinions of tens of thousands of voters. The members should listen to aU opinions and· form his own views and arrive at a consensus that may include an element of value,. hi. "important aspects of the matter under discussion.  The voter should be informed that he should regard the vote as an element of sovereignty which he should put into action as in sacred duty by the nation. He should not disregard it as of no avail. Avail or no avail, he should use his vote as a matter of duty. Every people obtain the government they deserve and if the voter does not exercise their vote, the opinion of others will prevail and he has himself to blame. Also the voter should never sell his vote or otherwise misuse it. He should form the habit of using it in favour of the best candidate offering himself for election, best to represent the constituency as a whole and not a section of it, not a sect or caste or kinship group or the following of a local leader who has become prominent on other grounds.  A candidate from a high family in the last elections stood as an independent for the Lok Sabha and was supported by the communist party. His only claim was that he could see Pandit Nehru at any time of the day without a formal engagement for an interview! A business magnate paid his election expense in the hope that such a person could obtain permits and quotas and licenses which could compensate him for his outlay many times over! The candidate was also a sort of comic poet and brought cinema stars, male and female, to gather huge audiences for him. And be did succeed in getting 45,000 votes though he hailed from a different part of the· country and did not know the language of the voters!  The frustration of the voter could be overcome by pointing to the opportunities for rising for them in the local bodies which they could later use as stepping stones for the Lok Sabha or Assembly. Participation in Voter's Clubs will restore the human touch and fill the void to a great extent. --- ## [Musing] Enduring Challenges in Indian Public Administration - V.P. Menon URL: https://indianliberals.in/musings/enduring-challenges-in-indian-public-administration-v-p-menon-1958/ ### Body _The following excerpt has been taken from V.P. Menon's 'Indian Administration: Past and Present', published in June 1958 by the [Forum of Free Enterprise](https://indianliberals.in/periodicals/forum-of-free-enterprise/). The publication provides a comprehensive account of the Indian administration's origins, from the days of the East India Company, and its evolution until the Planning Era. Menon stresses the expansive nature of the services, the role played by viceroys and governor generals, the exponential increase in the number of officers, and the challenges faced by the Indian administration over a span of three centuries. You can read the unabridged text[here](https://indianliberals.in/forum-of-free-enterprise/indian-administartion-v-p-menon-jun5-1958.pdf)._ _[Vappala Pangunni Menon](https://en.wikipedia.org/wiki/V._P._Menon) (30 September 1893 – 31 December 1965) was an Indian civil servant who served as Secretary to the Government of India in the Ministry of the States, under Sardar Patel._ _The text highlighted in the musing remains highly relevant in today's India, reflecting enduring challenges within public service. _ _Political interference in administration continues to undermine effective governance and demoralise public servants even today. Corruption runs rampant without any institutional responsibility for course correction, further keeping honest people away from the service and painting the entire machinery as ‘corrupt’. The perception of governors as political appointees rather than impartial overseers continues to impact their effectiveness. These are some of the problems underscored by Menon in the excerpt._ _He concludes by emphasising the roots of Indian administration in the British era and the pressing need to overhaul the institution to make for a more decentralised system, one that does not overestimate the power of the Centre or fall prey to petty party politics. _ **Political Interference in Administration** Sardar Patel was always at pains to impress on his party men not to interfere in the administration; but interference goes on, differences being only a matter of degree, in all the States. The District officer gets no credit for good work. Often he is judged by reports from political busybodies in the district. **Public Perception and Corruption** We are being treated _ad nauseam_ to communiques from various Governments on the action taken against "corrupt" officers. These statements leave an impression on the public mind that all officers are corrupt. By all means, I say, punish officers found guilty of corruption, but this sort of publicity only serves to undermine the prestige of the Services generally. In fact, corruption is not the monopoly of the Services. I remember the time when Sardar Patel ordered the prosecution of certain Ministers on a charge of corruption. The prosecutions were actually launched but were withdrawn after the death of Sardar. One of these very gentlemen is today an absconder in a non-bailable warrant case of misappropriation of public funds. **Election Expenses and Moral Standards** I do not blame the politician. Consider the amount which he has invested in order to get himself elected! Do not mistake me. I know as well as you that there are honourable exceptions. But the point I want to make is that the election expenses of parties and individual candidates under adult franchise are becoming prohibitive. Good candidates with limited means have no chance to fight elections. Money is playing a leading part and if we are not careful it will undermine our moral and ethical standards. **Role of the Governor** In this sorry state of affairs the head of a State could play an important role. But what the Ministries have done is to reduce the position of the Governor to that of a figurehead. It is always dangerous in an administration to create functionaries without responsibility, but the Congress are apparently quite unable to forget their past conflicts with Governors during the days of the British. The Governor is still distrusted and is generally ignorant of day-to-day administrative problems. The Governor, at any rate during his term of office, is supposed to be a non-party man, a position enabling him to ascertain not only the views of the Congress but also the reactions of other parties in the State. **Indian Administration: Roots and Reform** The basis of the existing administrative machinery is still that which was left to us by the British Government. The Central Government has embarked on various activities and is employing officers on those activities, for which they have no training. Congress has declared its ideology as "a socialistic pattern of society", whatever that may mean. The officers must have some guidance on the Congress policy and how they are expected to implement it. Some of the provincial districts are too large for one man to manage, and if development activities are to be properly supervised, some of the districts should be reduced.  The Collector, on whom all development activities converge, cannot be expected single-handed to carry out his responsibilities. There should be appropriate agencies created for particular development work, e.g., the Grow More Food campaign. Ours is a vast country and we cannot govern it from Delhi. The Centre must be strong but consistent with that there should be decentralisation at all levels.  These and other considerations lead me to the conclusion that we must appoint forthwith a high-powered Commission to examine and make recommendations for, reorganising the existing administrative structure, both at the Centre and in the provinces. Our task should be to lay down the foundations of a good administration which would be outside party politics and serve whatever party comes into power. type=content&p=8562). Needs editorial review._ --- ## [Musing] Examination of Objections to Limitations of Amending Power URL: https://indianliberals.in/musings/examination-of-objections-to-limitations-of-amending-power-1960/ ### Body _This piece is an excerpt about Parliament’s Amending Power from Nani Palkhivala’s “Our Constitution Defaced and Defiled”. This was first published in 1960 by The Macmillan Company of India Limited. In the introduction to this publication, Nani Palkhivala says “WE, THE PEOPLE OP INDIA, adopted, enacted and gave to ourselves the Constitution. We, the people, are also its only keepers. We have to pay the State not only in taxes but in time and in thought.”_ _You can read more about Nani Palkhivala [here](https://indianliberals.in/content/nani-palkhivala/) ___ The arguments frequently urged against imposing any limits on Parliament’s amending power may nowbe examined. **“The democratically expressed will of the people”** It is argued that unlimited power of amendment is necessary to meet the democratically expressed will of the people and that the representatives of the people should be trusted not to abrogate the basic freedoms. If this argument is right, it would be equally true to say that unlimited power of passing ordinary laws is necessary to meet “the democratically expressed will of the people”, and that would be the end of fundamental rights. If the representatives of the people could be trusted to respect citizens’ basic freedoms, there would have been no need for the chapter on fundamental rights at all. To say that the founding fathers of the Constitution did not trust Parliament with unlimited power in dealing with citizens’ rights by ordinary laws, but trusted them with unlimited power in dealing with citizens’ rights when amending the Constitution, is to attribute to the founding fathers incredible irrationality. The destruction of the basic freedoms is no longer an academic question but has become a painful reality, and therefore the plea about trusting the people’s representatives is wholly misconceived. The point that between 1951 (when the Sankari Prasad case recognised unlimited power of amendment) and 1967 (when the Golaknath decision* reversed that view) the basic freedoms were not abridged although Parliament was credited with unlimited power of amendment, has no relevance to the issue of the real ambit of the amending power. Constitutional morality between 1951 and 1967 was immeasurably higher than it is today. An amendment like Article 31C would have been unthinkable before 1967 and yet it came to pass in 1972. Extremists may have in their hands the levers of power at one time in the country’s history and not at other times. **The special majority in Article 368** It has been pleaded that the special majority in Article 368 is an adequate safeguard against abuse of an unlimited amending power. When the Constitution-makers did not permit Parliament even by a unanimous vote to pass an ordinary law violating a single fundamental right, it is impossible to believe that they put their faith in the special majority in Article 368 as a sufficient safeguard against the abrogation of fundamental rights. Besides, the special majority in Article 368 can be reduced to a bare majority by following the procedure in Article 368 itself. Again, an amending power of the same width is vested in Parliament under the Fifth and Sixth Schedules which deal with the lives and freedoms of millions of citizens and which permit all amendments by a simple majority. It is clear that the Constitution has in mind a more potent way of preserving its essential features than the requirement of a special majority. **Judicial review of constitiutional amendments** Another plea against holding the amending power to be limited has been that it would inevitably bring in judicial review. A constitutional amendment cannot enjoy the same immunity from judicial scrutiny as the original Constitution. The validity of an amendment is capable of being judged on the touchstone of the Constitution, whereas that is not the case with the original Constitution. Judicial review of constitutional amendments would be no different from that of ordinary laws with reference to questions of legislative competence or fundamental rights. If an amendment is struck down as going beyond the limits of the power, the court would be merely upholding the supremacy and sanctity of the Constitution, exactly as it does when an ordinary law is struck down as being unconstitutional. Such judicial review does not make the judiciary superior to the legislature; it only postulates that the sovereignty of the people is superior to both. Where the will of Parliament, declared in an amendment, stands in opposition to that of the people declared in the Constitution, the will of the people must prevail. One of the most futile points urged is that to let the court have the power of judicial review over constitutional amendments would involve the court in political questions. It is meaningless to say that the considerations which lead to an amendment are political, for nearly every consideration arising from the Constitution can be so described. The Constitution is a political instrument. Many constitutional problems are often not so much legal as political, social or economic, yet they must be solved by a court of law. It is vain to invoke the voice of Parliament. **Are essential features vague and unascertainable?** It has been urged that a test which involves consideration of the essential features of the Constitution would be vague, because the essential features are not precisely ascertainable. It is true that the borderline cannot be definitely drawn between amendments which would be valid and those which would be invalid on the principle that the essential features cannot be altered or destroyed ; nor would it be possible to specify exhaustively the amendments which would be invalid by this test. But this is no argument against the validity of the principle. Rejecting a similar plea that administrative action should not be struck down on the ground that it violated the rules of natural justice since the concept of natural justice was too nebulous to afford a legal test, Lord Reid* observed. In modern times opinions have sometimes been expressed to the effect that natural justice is so vague as to be practically meaningless. But I would regard these as tainted by the perennial fallacy that because something cannot be cut and dried or nicely weighed or measured therefore it does not exist. The idea of negligence is equally insusceptible of exact definition, but what a reasonable man would regard as fair procedure in particular circumstances and what he would regard as negligence in particular circumstances are equally capable of serving as tests in law, and natural justice as it has been interpreted in the courts is much more definite than that . . . Adapting the words of Frankfurter, one may say that the essential features of the Constitution are not authoritatively formulated anywhere as though they were prescriptions in a pharmacopoeia. The fact that judges among themselves may differ whether in a particular case an amendment alters or destroys a fundamental principle of the Constitution is no disproof that general rather than idiosyncratic standards have to be applied. Legal tests of the validity of a law, based on the concept of what is essential, fundamental or basic in a constitution, in a power, in a religion, etc.^ arc well- known. They have been applied time and again in interpreting the Constitution and determining the vires of legislative or administrative action. These legal tests have been universally accepted despite the fact that in no case can there be an exhaustive enumeration of the laws which would be valid or invalid by the application of the tests, nor can there be unanimity of judicial opinion in the cases which arise from time to time. A few examples may suffice. Delegated legislation is invalid where the legislature has parted with ‘^its essential legislative function”. “Exactly what constitutes an essential feature cannot be enunciated in general terms, and there was some divergence of view about this . . . , but this much is clear . . . : it cannot include a change of policy.” The protection of Articles 25 and 26 has been held to extend to “ceremonies and modes of worship which are integral parts of religion. . . . What constitutes an essential part of a religion or religious practice has to be decided by the courts. . . . “ Our Constitution requires the courts to use legal concepts which are no less “vague” than the concept of fundamental or essential features. The rule of pith and substance which is to be applied to any ordinary law with a view to ascertaining whether it is within legislative competence is surely no more precise. Legislation which usurps or infringes the judicial power is void, although it would be an impossible task to trace where the line is to be drawn between what will and what will not constitute such an interference. Even in the field of fundamental rights, restrictions are permissible if they are “reasonable”, “in the interests of the general public”, or arc imposed on the ground of “decency” or “morality”. These tests do not permit any abstract standard to be laid down as applicable to all cases. Yet they have to be applied in determining the validity of ordinary laws. In Australia it has been held that there are implied limitations which prevent the Commonwealth Parliament from interfering with the “essential functions” of State government, although there can be no complete or precise formulation of such functions, “A recognition that there are difficulties in formulating a single test in precise and comprehensive terms does not provide . . . a reason for denying that there can be any limitation by implication upon the power to affect the States.” No esoteric test is required to discern the essential features of our Constitution. The essential features are those which arc vital to the constitutional scheme and which give the Constitution its identity and integrity. If any guidance were needed in tins matter, it is afforded by the Preamble which expressly enumerates several basic elements. The Constitution is framed to be worked not by robots but by men. It is a fair assumjjtion that those who seek to amend the Constitution would have at least sufficient understanding to perceive its essential features. There cannot possibly be any mistake about the authentic voice of our Constitution, its ringing tones proclaiming the sanctity of our sovereign democratic republic, and the rights and duties of freedom. The following are some of the essential features of the Constitution which Parliament cannot alter or destroy in the exercise of its amending power. - The supremacy of the Constitution. Ours is a “controlled constitution” par excellence. All institutions, including Parliament, arc merely creatures of the Constitution and none of them is its master. - The sovereignty of India. This country cannot be made a satellite, colony or dependency of any foreign country. - The integrity of the country. The unity of the nation, transcending all the regional, linguistic, religious and other diversities, is the bedrock on which the constitutional fabric has been raised. - The republican form of government. India cannot be transformed into a monarchy. - The democratic way of life as distinct from mere adult franchise. There is a guarantee of fundamental rights to ensure justice, social, economic and political; liberty of thought, expression, belief, faith and worship; and equality of status and of opportunity. - A State in which there is no State religion. All religions are equal and none is favoured. - A free and independent judiciary. Without it, all rights would be writ in water. - The dual structure of the Union and the States. It permits centralization and decentralization to coexist. - The balance between the legislature, the executive and the judiciary. None of the three organs can use its powers to destroy the powers of the other two, nor can any of them abdicate its power in favor of another. - The amendability of the Constitution according to the basic scheme of Article 368. The Constitution must continue to be amendable without being alterable in its essentials. _Previous musing: [Economic Growth with Social Justice(1969)](https://indianliberals.in/content/economic-growth-with-social-justice-1969/)_ --- ## [Musing] Farmers Need Freedom, Not a Guardian Angel URL: https://indianliberals.in/musings/farmers-need-freedom-sharad-joshi/ ### Body The following is an article published in the June 2007 edition of the Freedom First magazine. Mr. Sharad Joshi, in this piece titled 'Farmers Need Freedom, Not a Guardian Angel', wrote about the need to free farmers from the shackles of all sorts of bureaucracy. While reflecting upon the developments during that time, he brought forth farmers' issues which have plagued India's republic since a long time but never understood as part of the problem. A senior member from the treasury benches of India's Parliament has proposed the establishment of an autonomous board for ensuring remunerative prices for the agricultural produce of farmers through fixation of minimum support prices; compulsory purchase of the produce by governmental agencies and compulsory market intervention by such governmental agencies in cases of bumper crops. This concern for the farmer is to be appreciated. The question is, is establishing one more comprehensive and potent authority for carrying out the work, at present entrusted to the Commission for Agricultural Costs and Prices (CACP), the Food Corporation of India (FCI), The National Agricultural Federation (NAFED) and the large number of state bodies, the right direction for improving the situation of our farmers? So far, the Central government has been trying to attribute the epidemic of suicides by farmers to water scarcity, lack of credit, high cost of production, low productivity of agriculture, smaller holdings and lack of extension services. A seditious attempt has also been made to put the blame on a general failure in their social moral standards. Some state governments have even tried to organise programmes with the help of some venerable spiritual gurus to contain the epidemic of suicides. Given this background, it is indeed commendable that a prominent member of the treasury benches of the House is admitting that low prices are the main culprit. He ought to be further complimented for admitting the under-remunerative nets of the prices obtained by the farmers at present. The remarkable thing is that the author proposes an authority whose job will be to fix prices that will cover the 'costs of production' as opposed to 'index based prices' proposed by some of the economists or 'income assurance plans' of the type resorted to in countries like the United States of America or 'blue box' schemes of the type resorted to in various countries. All these alternative schemes involved massive bureaucratic machinery and intervention that is unlikely to work with any chances of success in a country like India. The proposed board is not supposed to try and bring down the prices of agricultural inputs as an alternative method of making agriculture a remunerative vocation. It is rather unfortunate that the contemplated board will be given a mandate to calculate the remunerative prices practically by the same methodology that is deployed by the CACP for some years now. The author, evidently, is unaware that the basic methodology for calculating the cost of production by the CACP itself is full of holes and the method of collecting cost data from the sample fields and working out some kind of a statistical average thereof brings out costs of various elements that do not relate to any living farm.  That is the reason why the old Agriculture Prices Commission (APC) had calculated for the year 1976-77 Rs. 0.01 as the cost of pesticide per hectare of wheat in Punjab. It is the averaging method, which is responsible for numerous cases of contradictions. The cost of manure was calculated at Rs. 1.27 per quintal in the year 1997-78. Curiously enough, the cost for the same thing was even lower in 1980-81 (Rs.1.14 per quintal). The examples of this kind can be multiplied till the cows come home. The irrigation cost per hectare was calculated at Rs. 181.45 in 1916-17. This could not have met even the electricity charges of it too well. Surprisingly, the same cost is shown to have drastically gone down to a bare Rs. 70.86 in 1980-81. To one's surprise, the cost estimates of the state committees that calculate the costs of production in their states are around 20 per cent higher than the costs computed by the CACP. If agriculture is a state subject, it is difficult to understand why the calculation of costs is not left entirely to the state governments. Further, farmers have been demanding that the CACP switchover to the "synthetic model method" which gives structured costs that are logically linked with each other and correspond to real situations in the field. Coming from a distinguished member of the treasury benches of the House, one could not have expected a confession that successive post-independence governments have been deliberately trying to depress agricultural prices in order to provide a fillip to industry moved by the kind of economic theory that prompted Stalin to send tanks against kulaks in Russia. That is the reason why those who moved the idea of establishing a new authority are, at the same time, supporting the government's plan to put a ban on the futures market for wheat and paddy and backing the government's moves to keep private traders out of the wheat market in order to provide a clear field for the benefit of the Food Corporation of India. The basic question is, do we need to have elaborate machinery that is even more complex than the existing one for calculating remunerative prices, ensuring procurement and the operation of minimum support prices mechanism in order to ensure that the farmer gets the price that covers, at least, his cost of production? The price that a producer gets in a free-market must cover his cost. Why then have elaborate bureaucratic mechanisms for this simple task? If the government scraps the Essential Commodities Act that puts restrictions on storage, transport, processing and export of agricultural commodities, the farmer will automatically get a price that covers his cost of production. lnformation Technology (IT) has now opened up before the farmers two possibilities. Before IT he could not take advantage of the much higher prices that, he knew, would invariably come within the two months of the harvest, because he had no waiting capacity. The farmer was not able to get the advantage of higher prices prevailing at distant places because he had no capacity to transport his produce there. The advent of IT and the futures markets have made it possible for the farmers to add time and space utilities without having to move in time or space. It is rather unfortunate that the government has moved in with clay to block this escape route for the farmers. The government forgets that no prison walls have ever succeeded in containing the spirit of freedom. The farmers in Punjab and Haryana have already provided this by refusing to give their wheat to the Food Corporation of India. Meanwhile anti-farmer forces will try to create the illusion that not freedom but a more benevolent and efficient State authority will improve the lot of the farmers. The original article can be accessed [here.](http://www.freedomfirst.in/uploads/issues/pdf/481.pdf) --- ## [Musing] Fifteen Years of Indian Planning URL: https://indianliberals.in/musings/fifteen-years-of-planning/ ### Body _Prof. B R Shenoy’s “Fifteen Years Of Indian Planning” was published on August 10, 1966, assessing the economic progress of the country in the last three Five Year Plans. The author mentioned national income and mass well-being and recalled the damaging consequences these Plans caused to the economy of the country. The musing also discusses investment & foreign aid, inflation, foreign exchange difficulties, mounting food shortages, social injustice, the malaise of the capital market, the need for policy shifts, maximization of national income, centralized planning, radiance on free market forces and the free pricing system, monetary reforms, relaxation and removal of controls, and cuts in public sector activity._ _ You can read the complete, unabridged version here__ [Fifteen Years of Planning](https://indianliberals.in/wp-content/uploads/2023/07/Fifteen-Years-of-Planning.pdf)_ **I. National income and mass well-being** For assessing economic progress, we must define the term. By economic progress, we must first define the term. By economic progress, we shall mean, first, a continued rise in the standard of living of the masses of the people. Since the masses of the Indian people are close to the margin of subsistence, for quite some time, the measure of economic progress will lie in the consumption of food, the average of which is below the nutritional norm, and the consumption of cloth, the average of which is sub-standard. In democracies, the expectation would be that, while the level of living of the masses rose fast enough, the affluence of no sector should go up significantly faster than the national average. If the incomes of the more prosperous groups galloped ahead whilst the economic condition of the masses remained comparatively stagnant, there will be complaints of social injustice. Therefore, the second test of economic development is in a reduction of income contrasts between the more affluent sectors of the community and the masses. With these two criteria of economic progress in our mind, it is easy to say what does not constitute economic progress. First, if the standard of living of the people as a whole did not rise or lagged far behind the accelerating opulence of some groups, we do not have economic progress. Such a state of affairs may be described as the economic development of the classes; it is not Indian economic development. Secondly, spectacular progress in nuclear science, the science of rocketry and space science, and the stockpiling of missiles and other nuclear weapons, in the context of shortages of food, clothing, house-room, and the like, is not economic progress either. These developments may add enormously to the striking power of the nation and may be termed military development. Thirdly, heavy engineering and heavy chemicals, mammoth river valley projects, idle production capacities, and indiscriminate industrialization, when the masses of the people are ill-clad and underfed, do not constitute economic development. We may call it show-window economic activity and, at best sectoral development.  Ordinarily, in free societies, production would get adjusted to meet the changing needs of consumers, this adjustment being effected by the pricing system. Prices of commodities in larger demand would rise, and entrepreneurs would increase the output of such commodities under the inducement of higher returns on the capital invested, which higher prices would bring. Under such conditions, the increase in the national product may provide a dependable measure of the trend in consumption, i.e., the standard of living of the people in general. Under the policies which we have pursued during the past one and a half decades and which are generally described as planning, there is, on the other hand, a divorce between production and consumer needs. Production is directed or indirectly controlled by the Planning Commission, the instruments of control being import restrictions and exchange controls, controls over the distribution of domestic supplies, capital issues controls, and price controls of essential goods. Being constrained by these controls, entrepreneurs have not been free to orient production to satisfy consumer demands. Production has been governed more by the policy measures laid down by the Planning Commission. During the Third Plan, about 70 percent of the investment resources are drawn into the so-called "infrastructure" undertakings in the Public Sector; and a considerable part of the rest of the resources are used up in industrialization, including import substitution. This has involved comparative neglect of the production of food, agriculture generally, and basic consumer goods industries such as cotton textiles.  These policies have caused two damaging consequences. First, they have retarded the expansion of the national product. This retardation is the direct outcome of the shift of resources from sectors where the output of the capital invested is high, namely, agriculture and cotton textiles, into sectors where such output is low, namely, "infrastructure" industries and industries brought into existence under policy pressures for substituting import goods. It has been estimated that Rs. 1 crore worth of additional resources invested in agriculture may add to the national product about Rs. 57 to Rs. 69 lakhs of output. The same amount of resources may add to the national product about Rs. 36 lakhs if invested in cotton textiles and about Rs. 19 lakhs if invested in iron and steel. Our policy preferences for "infrastructure" industries and for import substitution, regardless of costs, to the neglect of agriculture and cotton textiles thus have involved producing less in place of producing more for the same quantum of resources. This, in large part, explains the slow pace of growth of the Indian national product during the past 15 years, despite a more than three-fold increase in investment.  Secondly, these policies have led to a pattern of production diverging from the pattern of consumer needs. In place of more food and cloth, the economy has been producing more of other things–iron and steel, cement, chemicals, machinery, and other industrial output. This divergence has meant that we can no longer depend on the statistics of the national product for a measure of overall economic progress, defining the latter term, as we have done, to mean a rise in the level of living of the masses. For the statistician, whatever is produced–whether rice, butter, guns, chemicals, or machinery–adds to the national product. When there is a heavy armaments program, as in Communist countries, or when economic policies foster programs of expansion of heavy engineering and heavy chemicals and other “basic” industries, as in India, the curve of the national product present a misleading picture of mass well-being. For an assessment of mass well-being, we have then to take a look, not at national income statistics, but at the consumer goods content of the national product. During the past ten years, Indian national income rose at an annual rate of 4.6 percent and the population at an annual rate of about 2.5 percent. This yields a per capita annual rise of about 1.8 percent. The provisional estimate for 1964-65 shows an impressive jump of 7.7 percent in the national income and of 5.3 percent in per capita income. The Economic Survey, 1965-66, fears that during the current year, because of a decline in agricultural output, national income may be less than in 1964-65. At this low pace of growth in per capita income, seeing that economic development in the more affluent countries of Europe and America is much faster, we may be never able to catch up with the order of economic well-being in these countries. The gap between our level of living and theirs may continually widen. It is not a welcome idea that this widening gap may have a chance of being reduced only in the event of catastrophes such as wars in which these other countries may be engaged, and we may keep out. Unsatisfactory as these statistical averages are, the actual well-being of the masses may be less than semi-stagnant. First, as pointed out by Mr. Narottam Shah of The Economic Times, through an old-standing and inexplicably un rectified error, incomes from Commerce, Transport, and other “Services” sectors of the national income are considerably exaggerated in the statistics. Incomes at current prices are converted into incomes at constant prices by deflating the former to allow for the inflationary rise in prices. Though prices have risen by ~38 percent from 1955-56 to 1963-64, incomes at current prices have been deflated only, nominally, by 2.4 percent. If we make full allowance for the inflationary price rise with respect to these sectors, the increase in national income during the past decade may be at the lower annual rate of 3.5 percent and of per capita income at the lower annual rate of 1.2 percent. Secondly, for a proper assessment of mass well-being, due allowances must be made from the statistics of per capita income for the considerable income shifts from the masses to the upper-income groups. Though this takes us to a subject that does not make welcome discussion in public, its exclusion may detract from the full appraisal of the basic forces now operating in the Indian economy, comprehension of which is essential to a correct diagnosis of the maladies confronting us. These income shifts have resulted from three factors: (1) from inflation, which has corroded the incomes of the fixed and the sticky money income groups, which comprise the masses, wage earners, and salaried people, and has added correspondingly to the incomes of a fraction of the community, traders, businessmen, and industrialists; (2) from controls, in particular, import controls, which have transferred incomes as monopoly gains or illicit earnings through corrupt practices, which controls give rise to, from the general body of consumers to the privileged upper-income groups, who include entrepreneurs, intermediaries, and the corrupt functionaries of the State; and (3) from the phenomenal expansion of the Public Sector, which has added enormously to the illicit gains of the contractors and other participants in this expansion. In recent years, aggregate income transfers due to inflation, controls, and the expansion of the Public Sector may not be far lower than the annual increases in national income, the bulk of this being due to import licensing and exchange restrictions. If we may assume that the whole of the values with respect to import licenses issued to Public Sector undertakings accrue to the Public Sector, we may regard them as a species of taxation. But the values of the import licenses issued to the Private Sector accrue to private parties, to which they have neither an economic nor moral title. Currently, the premia on these licenses are reported to vary from 500 to 700 percent with respect to 10 percent of the licenses and to be below 200 percent with respect to the rest. Assuming an average premium of 75 percent on all Private Sector licenses–on which my computations elsewhere, too, have been based–the income shifts on account of import licenses on Private Sector imports–which averaged Rs. 625 crores annually during 196-62 to 1964-65–may be of an annual order of Rs. 470 crores. If so, the benefit of the largest part of the annual expansion of the national income has accrued to a thin upper crust of the privileged sections of the people, leaving the condition of the masses unchanged or worse than before. With the rich becoming richer and the poor remaining poor or becoming poorer, income contrasts between the rich and the poor have become sharper. Though this is an unwelcome phenomenon, much cannot be gained by ignoring it as any prolonged persistence of it may not be conducive to continued social and political stability, which is so essential not only for rapid economic progress but also for the preservation of the higher values which we cherish. Thirdly, to get a clear picture of the trends in mass well-being, statistics of per capita income have to be adjusted for (a) the unduly large output of non-consumer goods and the creation of excess production capacities; and (b) for the undue build-up of inventories, which attends rising prices. Productive activity, which ends up in idle production capacities and idle stocks, would no doubt drive up the curve of national income in the same way as productive activity, which ends up in effective capital formation and increased consumption. But the former does not add to the well-being of the people, which the latter does. Excess capacities exist both in the capital goods and consumer goods industries and in the public as well as the Private Sector. They are estimated at about one-third of the total capacity in the major and minor irrigation works, somewhat less in the power projects, and at an average of 45 to 50 percent in 40 industries. Additions to inventories are inevitable under inflation, though it is not possible to assess their precise magnitudes. --- ## [Musing] Fighting for Freedom : The Tumultuous Legacy of Raghunath Karve URL: https://indianliberals.in/musings/fighting-for-freedom-the-tumulous-legacy-of-raghunath-karve/ ### Body _Raghunath Dhondo Karve is known as a staunch supporter of individual liberty and freedom. He believed in individual autonomy and attempted to normalize non-procreative sexuality. He challenged existing customs and argued for individual sexual freedom and awareness through his publication समाजस्वास्थ्य  (Health of the society)._ “Our communities and countries can flourish only when every individual has the power to make decisions about their bodies and to chart their own futures” - Natalia Kanem (Director, UNFPA) Raghunath Dhondo Karve is largely known as the son of the social reformer Maharshi Karve, who worked for the cause of women’s education, widow remarriage and women’s welfare. Raghunath Karve often tends to be overshadowed by the work and the personality of his father. However, Raghunath Karve (henceforth Karve) has a noteworthy and tumultuous legacy that remains relevant today. A scholar of Mathematics, Karve attained the Diplome d'Etudes Superieures from Paris. He went on to teach at Wilson College in Mumbai till 1925 when he was forced to resign. This event foreshadowed the difficult journey that lay ahead for Karve.  Karve was a strong believer in individual autonomy especially of the corporeal kind and was a strong supporter of birth control. At a time when the hush-hush of taboo prevailed over the articulation of information, Karve wrote extensively on matters such as legalizing prostitution, imparting sex education and creating greater awareness among men and women alike. Recognising the necessity to communicate with people in an accessible language and the need to acquaint people with Western writings, Karve wrote almost exclusively in Marathi. He wrote संततीनियमन : आचार आणि विचार (Family Planning : Thoughts and Action) in 1923, आधुनिक कामशास्त्र (Modern Kamshastra) in 1934, आधुनिक आहारशास्त्र (Modern Science of Diet) in 1938 among several others. As part of his initiative to impart sex education, Karve started a monthly called समाजस्वास्थ्य  (Health of the society) where he offered an intellectual opposition to the then extant institution of marriage and attempted to normalize non-procreative sexuality, which also included homosexuality. The editorial of the first edition highlights Karve’s aims - “व्यक्तींच्या व समाजाच्या शारीरिक व मानसिक आरोग्याची व त्यासंबंधी उपायांची चर्चा करणे हा या मासिकाचा उद्देश आहे. विशेषतः ज्या विषयासंबंधी लेख इतर पत्रकार छापत नाहीत असे विषय कितीही महत्त्वाचे असले तरी त्यासंबंधी माहिती मिळवण्यास सामान्य वाचकांस अतिशय अडचण पडते. ही अडचण दूर करण्याचा आमचा विचार आहे. यात तत्त्वज्ञानाचा खल न करता व्यवहारोपयोगी माहितीही दिली जाईल” (र.धों. कर्वे यांचे समाजस्वास्थ्य, 2022) (The aim of this magazine is to discuss and elaborate on the physical and mental health of individuals and the society as a whole. Specifically, a lot of important topics are not covered by several journalists making it difficult for the reader to find information. We plan to resolve this difficulty faced by the readers. Without getting into philosophical deliberations, this magazine will provide information on such topics along with information on other practical considerations).  Karve spoke and wrote in support of sexual liberation from the dictates of customs, morality and the law, for both men and women. He criticized the customary labels of ‘virtue’ and ‘chastity’ and suggested that each individual must have the opportunity to liberate themselves. He opposed the then existing system of marriage which according to him allowed women’s bodies to be treated as property. It is important to note that Karve’s support for birth control did not come from the view of distribution of national resources or allowing the state to take control of family planning. In fact, in one of his pieces titled कायदे करणाऱ्यांची अक्कल (Karve, 1931) (The Intelligence of the Lawmakers), Karve refers to English and French laws on selling tools that help prevent transmission of STDs and on selling contraceptives (both of which, as Karve points out, not only overlapped but were more or less the same). He points out the sheer pointlessness of state action where each country, England and France allowed the sale of one but prohibited that of the other. Karve ends the short piece by mocking the lawmakers and by lamenting the takeover of personal liberty by the state. Karve’s support for birth control came with a view to enable women to exercise autonomy over their body and their sexuality. He firmly believed that sexual freedom was a right that must be available to every adult irrespective of their gender, orientation, place in society among others. The monthly magazine समाजस्वास्थ्य also featured write-ups and correspondences supporting homosexuality and transgender individuals.  In his writings, Karve often made allusions to the societies of ancient India to remind his readers of the freedom enjoyed by their ancestors and the shackles brought on by Victorian morality. Karve investigates Kautilya’s approach towards prostitution and the nature of prostitution during the times of Vatsayana and he compares that with the modern legislation on prostitution. He believed very strongly that the state must not prohibit prostitution. In वेश्यांसंबंधी कायदे (Laws on Prostitution), he offers evidence from across Europe to show that prohibition of prostitution had disastrous effects on society (Karve, 1931). In another piece, titled वेश्यावृत्तीचा हक्क (Right to prostitution), Karve reiterates the argument made in a magazine called ‘The New Freeman’. He suggests that choosing prostitution as a means of livelihood is a right enjoyed by adult citizens; as long as all parties involved offer their consent, the state cannot and must not interfere (1931).  Needless to say, Karve’s writings attracted a severe backlash from several sections of the society. Following the resignation from Wilson College in 1925, Karve faced two major lawsuits. He was arrested on charges of indecency in 1931 on the orders of the government of Bombay Presidency. His appeal was turned down in the High Court and he was charged a fine of Rs. 100 . In the Gujarati edition of समाजस्वास्थ्य, while answering readers’ queries, Karve wrote on homosexuality. His responses brought him another lawsuit and he was once again arrested in February 1934 (BBC News मराठी, 2022). Dr. Babasaheb Ambedkar took up his case and represented him in court. Dr. Ambedkar raised pertinent questions about censorship, freedom of speech and expression, and individual freedom. Justice Indravadan Mehta stated that there was no need for Karve to publish readers’ questions if they were filled with perversion. Dr. Ambedkar stated in response that if there was indeed perversion among the readers, then the only way to dispel that was through awareness, education, and information. Dr. Ambedkar offered evidence from the works of Havelock Ellis to argue that homosexuality was not a vice nor a sin; hence writing about it could not be considered a crime. Dr. Ambedkar stated that Karve had exercised his right to freedom of speech and expression; what offended a particular section of society could not become grounds for curtailing Karve’s right to free speech. Despite the brilliant arguments, Karve lost the case and was fined Rs. 200. The setback and the storm of criticism didn’t stop Karve and he continued writing in समाजस्वास्थ्य. He continued voicing his support for sex education and sexual liberation for men and women alike. Karve found it difficult to make ends meet. Karve often printed the magazine with pictures of naked men and women to normalize the human body. Due to the nude pictures on the cover and the often controversial content inside, many middle-class men hesitated to bring copies of समाजस्वास्थ्य into their homes (Botre & Haynes, 2017, p.10). Subscriptions were low, amounting to 250 in the early 1930s and reaching only 700 in 1952. Due to low subscriptions and legal troubles, Karve struggled financially throughout his life. Although his ideas never fully found acceptance, they influenced generations to come. Armed with nothing but the desire to create awareness and a strong commitment to individual liberty, bodily autonomy for women, and the right to choose, Karve published समाजस्वास्थ्य till his death in October 1952. The one-man-led initiative to make sex education available and make sexual liberation possible was captured in the Marathi movie titled Dhyasparva (2001) and in the Marathi play Samaj Swasthya (2017). **References** BBC News मराठी. (2022, October 14). र. धों. कर्वेः डॉ. बाबासाहेब आंबेडकर जेव्हा ’समाजस्वास्थ्य’साठीचा खटला हरूनही जिंकले होते. BBC News मराठी. https://www.bbc.com/marathi/india-42236452 Botre, S., & Haynes, D. E. (2017). Sexual Knowledge, Sexual Anxieties: Middle-class males in western India and the correspondence in _Samaj Swasthya_, 1927–53. _Modern Asian Studies_, _51_(4), 991–1034. https://doi.org/10.1017/s0026749x16000184 Karve, R. D. (Ed.). (1931). समाजस्वास्थ्य मासिकातील निवडक लेख [Print]. र. धों. कर्वे राईट एजन्सी. र.धों. कर्वे यांचे समाजस्वास्थ्य. (2022, June 20) [https://radhonkarve.com/](https://radhonkarve.com/) [_Previous musing: Gurcharan Das: Champion of Liberal Ideas_](https://indianliberals.in/content/gurcharan-das-champion-of-liberal-ideas/) [](https://indianliberals.in/wp-content/uploads/2023/09/IMG_4159_Original.jpg) **Avanti Lele** Avanti Lele is a Minoo Masani Liberal Fellow. She is pursuing her PhD in English Literature from Lancaster University. She has worked as a lecturer of English Literature and as a Spanish language instructor. Her research interests include but are not limited to women's writing, liberal feminism, postcolonial studies, indigeneity. --- ## [Musing] For Absolute Freedom of Expression URL: https://indianliberals.in/musings/for-absolute-freedom-of-expression/ ### Body _The following essay is part of a 2012 booklet published by The Liberty Institute, New Delhi, in partnership with the Friedrich Naumann Foundation for Freedom. The booklet was title **[At Liberty: Freedom to Express and Offend.](https://indianliberals.in/content/at-liberty-freedom-to-express-and-offend/)** Authored by Ravi Shanker Kapoor, the essay explores ideas of absolute freedom of expression. In doing so, it revisits Mill's idea of the harm principle, the fear of  freedom, and the roots of such fear. _Is it possible to have freedom of expression which is not absolute? The answer is a big 'no.' Freedom of expression ought to be absolute - or it is no freedom at all.  The immediate objection to this assertion, especially in the Indian context, is that there is no point in offending people. Novels, short stories, and poetry can be written, and movies made, without hurting the sentiments of groups and communities. After all, a huge amount of literature is created and a large number of films produced without any objections from anybody. So, why should writers and filmmakers come up with works which can offend somebody? Why can't they promote harmony, instead of breaching it? Why can't creativity be harmless?  We are told that even John Stuart Mill, arguably the greatest champion of "the fullest liberty of professing and discussing," talked about what came to known as the Harm Principle: "the only purpose for which power can be rightfully exercised over any member of a civilized community, against his will, is to prevent harm to others."  American philosopher Joel Feinberg went a step further and in 1985 recommended an Offence Principle to act as a guide to public censure. According to him, Mill's Harm Principle is not sufficient to check wrong behaviors: "It is always a good reason in support of a proposed criminal prohibition that it would probably be an effective way of preventing serious offense (as opposed to injury or harm) to persons other than the actor, and that it is probably a necessary means to that end." He favored legal prohibition on some forms of expression if they are very offensive, though he recommended lower penalties for offence than for harm. Feinberg suggests that a number of factors need to be taken into account when applying the offense principle, including: the extent, duration and social value of the speech, the ease with which it can be avoided, the motives of the speaker, the number of people offended, the intensity of the offense, and the general interest of the community at large.  Feinberg intends to legitimately prohibit some forms of expression because they are very offensive. He, however, agrees that offending someone is less serious than harming someone.  **The Harm Principle ** The impression that we sometimes get is that Mill favored some governmental control over freedom of expression. It arises from confusing 'action' with 'expression of views.' The full passage is:  The object of this Essay is to assert one very simple principle, as entitled to govern absolutely the dealings of society with the individual in the way of compulsion and control, whether the means used be physical force in the form of legal penalties, or the moral coercion of public opinion. That principle is, that the sole end for which mankind are warranted, individually or collectively, in interfering with the liberty of action of any of their number, is self-protection. That the only purpose for which power can be rightfully exercised over any member of a civilized community, against his will, is to prevent harm to others. (emphasis added). [Introductory, On Liberty, John Stuart Mill].  It is unfortunate that even those who champion the cause of liberty sometimes refuse to distinguish between the two. Consider Bibek Debroy's article, titled 'Politics of bans and rights,' in The Indian Express on November 28, 2007. He wrote: "...is an individual right ever absolute? It can't be, for it is conceivable that the exercise of my individual right might constrain yours, and there is a difference between exercising an individual right in my private domain and doing it in public. For instance, it might be fine for me to walk around nude in my apartment, but should I be allowed to do it in public? If I am a serial killer, exercise of my individual right might require me to murder people. Should that be allowed? Even in relatively free countries, including the US, freedom of expression is a relative, not absolute right- defamation, obscenity, perjury, copyright violations, actions that incite hate, sedition and blasphemy, are all instances where freedom of expression has been curbed in developed countries."  Notice how he mixes various things- freedom of expression with freedom of action, defamation with perjury and copyright violations. But freedom of expression has little to do with perjury and copyright violations, for these are crimes by their very definition and have little to do with freedom of expression: perjury is lying under oath, whereas copyright violations steal somebody's intellectual property. Defamation, on the other hand, is related to freedom of expression.  More misleading is the blurring of distinction between opinion and action. Loitering nude on streets and killing people are actions; airing of views- howsoever controversial, unconventional, seditious, or blasphemous- is just a way of telling others what one thinks and/feels about something. Mill is clear about the distinction. He wrote:  No one pretends that actions should be as free as opinions. On the contrary, even opinions lose their immunity when the circumstances in which they are expressed are such as to constitute their expression a positive instigation to some mischievous act. An opinion that corn-dealers are starvers of the poor, or that private property is robbery, ought to be unmolested when simply circulated through the press, but may justly incur punishment when delivered orally to an excited mob assembled before the house of a corn-dealer, or when handed about among the same mob in the form of a placard. Acts, of whatever kind, which, without justifiable cause, do harm to others, may be, and in the more important cases absolutely require to be, controlled by the unfavorable sentiments, and, when needful by the active interference of mankind. The liberty of the individual must be thus far limited; he must not make himself a nuisance to other people.  Opinions ought to be freer than actions, because words break no bones. Mill would not accept any curbs on the freedom of speech except in rare circumstances- to "an excited mob" against corn-dealers "before the house of a corn-dealer." That is, when the harm to life, limb, and property of the targeted person is almost imminent. But then in such a situation, haranguing an angry mob is incitement to violence rather than an expression of opinion; and there is nothing improper in penalizing incitement to violence. At any rate, such penalizing would be against felonious intent and action rather than freedom of expression. When a mafia don orders his henchmen to eliminate a rival, he is not exercising his right to freedom of expression; he is triggering off a crime. There is a difference between freedom of expression and crime.  A socialist is not only entitled to his view that private property is theft but also free to express it. It is when he convinces, coaxes, or instigates his followers to indulge in violence that he crosses the line.  **Fear of Freedom ** It can be argued that incitement may not always be imminent or immediate; it is possible to fill the hearts and minds of a group with hatred against some person(s), institution, religion, or country on a long-term basis. Should indoctrination be allowed? As it is, Islamic terror and Maoist menace, to name the two biggest threats India faces, are a headache for the people and the government. If freedom of expression is made absolute, it would be possible for the most venomous jihadis and hardcore Maoists to teach their violent doctrines. Would not that be a recipe for disaster?  It may appear that unrestrained freedom of expression would give a fillip to, among other things, jihadist and Red terror, but a proper analysis would show otherwise.  To begin with, it must be made clear that these two problems have not been caused because of the limited freedom of expression that is allowed in the country; nor would these be exacerbated if this freedom is made unlimited. These have been caused, and exacerbated, by politicians' machinations, by their bad policies, and by their reluctance to uphold the rule of law. The rule of law, it may be mentioned, is the necessary condition for freedom of expression in an open society. Maoism came into being in the late 1960s; it has seen several peaks and troughs. A variety of factors were responsible for its birth and current violence: socialist economic policies, bad governance, and the lack of political will to combat Leftwing violence. Even today, the Maoist sympathizers openly propagate the justness of the Maoist cause. So, absolute freedom of expression will not aggravate the problem.  As for jihadist violence, it needs to be emphasized that curtailment of freedom of expression has actually boosted the morale of Islamic fundamentalists, emboldening them to directly and indirectly help terrorists. A watershed in the history of freedom of expression in India was the ban of Salman Rushdie's Satanic Verses in 1988; it proved that the Indian political class could be subdued by a mix of rhetoric, threat, and downright violence. Published on September 26, 1988, in the UK, it was reviewed by prominent journalist and author Khushwant Singh in Illustrated Weekly of India. He recommended a ban on the book, arguing that it could lead to trouble. Another journalist-author who called for proscription was M.J. Akbar. Parliamentarian and editor of the monthly magazine Muslim India Syed Shahabuddin petitioned the Rajiv Gandhi government the same. The government immediately responded and banned the book on October 5. Years later, Bangladeshi author Taslima Nasreen was also haunted and persecuted by Muslim fanatics; and she also received minimal support from the government.  An intended consequence of proscription and persecution has been the demise of all meaningful debate on Islam; everybody knows that any critical observation about theology and practice of Islam would attract opprobrium and possibly prosecution. All writers and journalists know that criticism would make them vulnerable to the accusation of being bigoted and fascistic. For a critical Muslim, the predicament could be worse: even his physical existence would be in danger. There have been cases where fundamentalist Muslim politicians have tried to incite violence against those who are critical of Islam. So, we have a perverse inversion of the freedom of expression: while writers and artists are restrained from freely expressing themselves, those who are opposed to this freedom are rarely restrained. The perversity is comprehensive: the views which are frowned upon by the tetchy are proscribed or suppressed, but the violence of the most retrograde elements is tolerated.  The unintended consequence is that the malaise has spread among other sections of Indian society. The success of retrograde elements in Muslim society has encouraged similar elements in other communities to thrust their narrow viewpoint. So, the Hindus have violently protested against some of the paintings of M.F. Husain on the grounds that these hurt their sentiments. Another painter, Jatin Das, also had to face the ire of Hindu zealots.  **Roots of the Fear ** Where does this fear of absolute freedom of expression emanate from? The fear has its roots in the belief that there is a reality (or Reality) which can be misrepresented or distorted if the freedom of expression is absolute. This presupposes a universally accepted definition of the reality But the fact is that no such definition exists; there are as many definitions of reality as there are philosophers and philosophies. There are Christian theologians interpreting the faith in numerous ways; there are six orthodox Hindu schools of philosophy (with several sub-schools); there are Marxists, again following countless lines; there are Western conservatives (Burkeans in harmony with tradition, others ardently anti-state); there are libertarians (followers of Ayn Rand and others); there are postmodern thinkers (who actually do not believe in any reality); and long goes the list. So, what is the reality or ultimate reality? What is the truth (or the Truth)?  I do not claim that the reality does not exist or, as Kant said, that it is unknowable (noumenon); this question is beyond the scope of my thesis. My assertion is that since there is no universally accepted understanding of (ultimate) reality, the question of its misrepresentation or distortion does not arise.  Let's climb down from the metaphysical plane and concentrate on the mundane aspects of life. Let's discuss topics like state, market, society, individual rights, and property. Again, we face the same plurality of views. What is state? Marxists tell us something which libertarians and conservatives can never agree with. What should be the role of state? While Left-leaning thinkers would argue for its greater role in the economy, libertarians and conservatives would like it to keep away from the market. Should market take care of itself, or should it be kept under the watchful eyes of government functionaries and regulators? Again, there is a wide divergence of views. Even among Leftists and Rightists there is considerable difference of opinion. For instance, Rand is against regulators, whereas in India even those who are considered pro-market favor regulators.  What is society? Is it organic and more than the sum-total of individuals, as Burke and many conservatives believe? Is society, as Burke put it, "a partnership not only between those who are living, but between those who are living, those who are dead, and those who are to be born? Rand would hit the roof hearing such a definition of society; in her scheme of things, everything is subservient to the individual and his rights. Interestingly, both Burke and Rand are placed on the Right of the ideological spectrum.  Individual rights are also understood in vastly different ways by thinkers of different persuasions. Those on the Right would want nothing but freedom from the clutches of government, freedom to be left alone- laissez faire. The Leftists, on the other hand, find such freedom vacuous; they talk about the right to food, work, etc., all of which requires big state.  Similarly, on property there are diametrically opposite views across the ideological spectrum. While the Left views it as the result of exploitation (if not downright theft), the Right regards it as the cornerstone of liberty.  Therefore, there is no unanimity on any kind of reality, metaphysical or mundane. I will reiterate that this is not a thesis promoting epistemological nihilism; on the contrary, mine is an attempt to undermine such nihilism. This nihilism is actually promoted by the postmodern dogma in association with various anti-Enlightenment tendencies like political correctness (PC), multiculturalism, and Islamism.  The only way we can know any truth is by letting the free-play of ideas in the arena of public discourse, a veritable laissez faire. A genuine quest for knowledge and a yearning for wisdom (or philosophy, which is, etymologically, 'love for wisdom') is an onward march to gain more and more facts; we shall realize as many truths as possible. The quest may or may not lead us to the 'Ultimate Reality' (if it exists), but we can hope to go near that. But this march is impossible without unrestrained freedom of expression.  **Controversy is inevitable** A large number of truths came to be acknowledged as such without much fuss, but there are many which were preceded with long and often acrimonious debates and sometimes also with violence. And acrimony takes place because somebody or some group feels offended by a truth. It is often argued that we must avoid the truths which violate the Offence Principle, for the consequences could be apocalyptic.  The Galileo affair needs special mention in the context of Offence Principle. Galileo published his Sidereus Nuncius (Starry Messenger) in 1610. This was based on the observations that he had made with his the telescope. Some of these discoveries- lunar mountains, small moons around Jupiter, the phases of Venus, and sunspots- indirectly undermined the geocentric Christian cosmology. They harmed nobody but surely offended the sensibilities of people in an age in which religious faith was a great, if not the ultimate, concern. Had Galileo decided not to offend the Christians- and this would have been a rewarding option- he would have deprived the world of important truths and science would have been poorer. He was not granted freedom of expression; he had to grab it. And he did offend many- and suffered because of the 'offence.' Without the freedom to offend, Salman Rushdie said, freedom of expression ceases to exist.  There are many other instances where science offers explanations which conflict with religious beliefs. But the science-religion conflict is beyond the scope of our thesis. What is pertinent here is that even religions that have evolved over the centuries could not have without challenging the established orthodoxies and offending many- often most of- people. Jesus Christ propagated beliefs which offended many people, leading to his crucifixion. Shankaracharya (788-821) famously disputed with great theologians. Martin Luther enraged the Pope's clergy. In fact, it is in religion rather than in science that new expositions are generally frowned upon.  **End of Time? ** To say that freedom of expression should be curtailed lest it offend or hurt the sentiments of people, or some people, implicitly accepts a ludicrous postulate: that all facts and truths that mankind ought to know have been known, and any new expositions would merely distort truths. One need not be a philosopher to say that the postulate is not only ludicrous but also smacks of hubris and complacency. At any rate, the Offence Principle would end up banishing philosophy and any serious contemplation. As Bertrand Russell wrote in The Problems of Philosophy, "Philosophy is to be studied, not for the sake of any definite answers to its questions since no definite answers can, as a rule, be known to be true, but rather for the sake of the questions themselves; because these questions enlarge our conception of what is possible, enrich our intellectual imagination and diminish the dogmatic assurance which closes the mind against speculation; but above all because, through the greatness of the universe which philosophy contemplates, the mind also is rendered great, and becomes capable of that union with the universe which constitutes its highest good." _Last week's musing: [MANIFESTO FOR INDIAN LIBERALS](https://indianliberals.in/content/manifesto-for-india-liberals/)_ --- ## [Musing] For Freedom, Farm and Family URL: https://indianliberals.in/musings/for-freedom-farm-and-family/ ### Body _“For Freedom, Farm And Family” was the presidential speech delivered by C. Rajagopalachari at a meeting organized by the Bangalore Centre on May 29, 1959. He talks about what democracy and self-government mean and the considerable responsibility of every citizen. He then goes on to highlight how the citizens have lost the habit of thinking independently and discourage this habit while supporting independent thinking. __You can read the original, unabridged version _[_here_](https://indianliberals.in/forum-of-free-enterprise/for-freedom-farm-and-family-m-a-sreenivasan-aug7-1959.pdf)_. __ _Democracy and self-government mean considerable responsibility for every citizen. Unfortunately, we have come to feel that as long as Mr Nehru is there, none of us need worry about anything. In the first place because he is a very good man; in the second place because we cannot do anything. We have lost the habit of thinking independently. Somehow or other and for some reason or other, we have become indolent in the matter of thinking. That is the greatest difficulty in getting the government to do the right thing when we do not agree with what the government is doing. But I shall not dwell on this because I do not want to encourage that habit but rather to discourage it. We must get out of this atrophy of thinking if we wish to achieve anything. We must think independently, rightly or wrongly - it does not matter. If everybody began to think freely–and that is the meaning of freedom, ultimately–we shall get something done. But if we get frightened of thinking ourselves or too lazy to think, handing over all responsibility to the men who brought us the freedom to carry on the administration of the country as they think fit, it is a dangerous situation. Now I wish to tell you something. Megalomania–a strong word–has vitiated our planning. If only our rulers had been more humble than they are, we would not have gone so badly, we would not have gone so wrong. The megalomaniac ambition is at the root of all the inherent errors that are now showing themselves in heavy and distressing measures without giving us time even to wait. Pandit Nehru sees India "standing up on the top of golden hours and human nature is seeming born again." That is how he sees things. But some of us, standing on the ground, with our feet on the ground, see differently. We see a bankruptcy on the horizon. The sorry picture of our country as a chronic beggar before the Western nations. This is not pleasant and we feel distressed. Large dreams are no consolation for immediate calamity. But that is the thing that is keeping the Government of India in its present adventure. I shall not cover the very wide ground after these general remarks. I wish to confine myself to the most urgent single problem of the day, viz., the deficit in food production. That is the basic necessity of our teeming millions, and a deficit in food production is a very serious matter. Now, what is the Government proposing to do about it? Compulsory transfer of land from the larger owners to cultivators who have to begin with debt. That is the main policy of the Nagpur resolution - the switchover from individual ownership to multiple ownership and management. The word "Joint" is a misleading word. "Joint" has a sweet flavour about it. "Co-operation" has a very sweet flavour about it. We can easily be deceived by the phrases "Joint farming and "Cooperative farming'. It looks very odd that anyone should oppose cooperation. Therefore we should understand what it really is and why we really object to it. In my phraseology, I would call it multiple ownership and multiple management. Now, do you think that multiple ownership will produce good results? Do you think that multiple management will produce good results? It was long ago found that too many cooks spoil the broth. This is a vivid description of multiple management. It is bad enough to spoil a single meal, but it is worse to spoil all food production on that basis. That is what I understand to be the public policy now with regard to food production. Do away with individual management and introduce multiple management and multiple ownership. Now that leads necessarily to a new bureaucracy having to be created for the management of land. We have done with one kind of bureaucracy for the management of public offices. We shall hereafter have to deal with bureaucracy which manages the cultivation of land. Because the inherent weakness of multiple management is that they will look to the government to supply an efficient manager, and therefore we shall have a new bureaucracy, subsidies, interest-free loans, and at every crisis looking up to the government for assistance. Now, do you think this will lead to a rise in food production? It will immediately–my telescope tells me–lead to a fall in food production and when we can ill-afford to bear such a fall in food production. In fact, what we want eagerly is a rise in food production, not 40%, not 50% - some little rise at least is what we want but instead, the present policies, if everything is going to be given effect, will lead to a considerable fall in food production. But my telescope may be wrong; I may be looking at it from the wrong end possibly. If the Prime Minister thinks that this kind of new management of land–taking over land from those who have it now and handing it over to multiple owners and multiple management through a bureaucracy–will ever lead to a rise in food production, I think, he will soon be disappointed. The general plans, the plans produced by the Planning Committee - all these have already accentuated the rise in prices all around before starting to give any expected results from the plan. Now the policy of acquisition of land to satisfy the doctrine of multiple ownership will add to the inflation because, unless the intention–I would like you to follow me here with some attention–is to expropriate the present owners, discarding the principles of the Constitution, money will have to be issued by Government to meet the demands for compensation and wherefrom will they get that money? The new owners have no money to give. They are indeed selected on that basis. There are people here who know the secrets of money. Money is not you know what we all understand it to be. It is a piece of paper that is printed in Nasik. There will be plenty of money available to give as compensation to all those land owners from whom land is to be taken; or, if people do not like the look of the Nasik paper, they will be given Bonds, Government Bonds. In any case, it will add to the total amount of money in circulation; the natural result of converting land ownership into money is to add to the inflation that we already have. I may be wrong, but that is what I think, and if that inflation is to be accompanied by a fall also in food production, you can imagine the result. And what is all this for? The object is a dogma of equalisation of social happiness. Instead of equalising social happiness, we shall have a fall in food production. Let us talk in concrete terms. Social happiness is a vague affair but food production is very concrete, and when that is reduced you may easily go on thinking further about whether we can have happiness. We may not have any happiness in small measure, in big measure or in equal measure or in unequal measure. The interference of the government in other matters may be tolerated but if they begin to interfere in agriculture–it is a very sensitive and delicate thing–it will damage the plant at the root. And the industry, as it is even now, is maintained by long tradition and the pressure of poverty in the country. When that is interfered with by the government to offer incense to some doctrine or dogma, the situation will be–it is an understatement to say–dangerous. The present owners of the land, whether they are small or whether they are big, ask for no subsidy from Government. The good prices that food grains now fetch are acting as an incentive for agriculture. But now the atmosphere of total uncertainty that the Government policies and the Government adumbrations of policies have created–the total uncertainty that has been created–has destroyed incentives in agriculture to a very great extent. People who are devoting and who are likely to devote much more attention if they are left alone have been rendered hopeless about it, uncertain about it, and they do not propose to take any further interest in agriculture. Is it a good thing? It is one of the most important problems in the country. Again, take another thing. Can there be anything more foolish (I have already warned you that I will use harsh terms) than the idea that the State should take up trading State Trading? Of course, the Gujarati proverb puts it very nicely and briefly. But some of you may not understand Gujarati. The proverb is, "when the State takes to trade, the people take to begging". Now is there any justification for the exaggerated fears that are deliberately propagated about hoarding and cornering? Look at the situation. We have a large body of people who are eager to compete and share in the profits of trading in food grains. We have a very large body of people engaged and willing to compete with one another in the wholesale and retail businesses. Competition is the best security for the consumer. And if the State stops this competition and takes over the business, will there be any freedom for the consumer? Look at the nature of the commodity. The bulky nature of the commodity of food grains should be kept in mind before you talk about hoarding and cornering and things like that. The nature of the commodity is such that it will deteriorate, the rats and the mice will attack it, and the moths will attack it if it is secreted and kept for a long time. Under these circumstances, if there is free competition among a large class of people who are not well off, who all want to make something out of it, and who are ready to compete with one another in the wholesale business and in the retail business, is there any likelihood of the consumer being cheated? I think the stories of cornering and hoarding have been greatly exaggerated when related to food grains. In food grains, the quality is such that we need not be afraid. Therefore State Trading in foodgrains has no justification. Look at the other result. It will put out of employment those who are now doing the work of distribution on the most frugal terns. Compare the position of any member of the bureaucracy, even the lower division clerk, if you like. How frugally the shopkeepers do their work, how simply they live, and how vigilant and just they are. We should have industries started to accommodate and give work for all these people before you deprive them of their occupation. When these people are dividing the profits of trade in a fair way, they are doing unconscious socialism which you want to introduce by legislation. The profits in the trade are divided among so many people. Why do you stop that division before you create industries to absorb those people? It is not a good thing to put the cart before the horse, and that is what is being done. Every day we read about astronomical figures of money to be raised in order to relieve unemployment. Somebody said the other day that we want only Rs. 43,000 crores to relieve unemployment. Now let us not look at Rs. 43,000 crores; let us take only the Rs. 2,000 crores that have been proposed for taxation. Going beyond a certain measure in taxation will lead to retrenchment in every business, either closing down or retrenchment. Heavier and heavier taxation will lead to heavier and heavier retrenchment. And what will retrenchment lead to? It will lead to unemployment. It is like filling up small pits by digging them somewhere else. You dig big pits by way of taxation and you try to fill the smaller pits with it. If you have two cooks, you will have only one cook thereafter. If you have two clerks you will try to get the work done by one clerk; that clerk will try to do less work than he was formerly done. And that is what will be going on, inefficiency and retrenchment side by side. Taxation is a dangerous thing when it goes beyond a certain measure. It is dangerous because it will lead men to dislike all governments and improve deceiving skills. Dr Chandrasekhar contributed a very interesting article I read in the New York Times in a recent issue. He described how Mao, in China, was waging war against the family in China. The stories about China and other Communist countries did not interest us much because they were different countries with different ways of life. But today, now that the Government of India is going on the same road, what is described to be happening in China will happen–and is bound to happen–here also. So there will be an attack on the family by and by. That is why Dr Chandrasekhar's description frightens some of us. In China, we are told, they are regularly carrying on a campaign, a campaign not in speeches and meetings you know, the Communist 'campaign' is a campaign of getting things done and they are getting the families dislocated and extinguished by mixing up people for all matters. Now that is why we have to protect the farm and the family. I conclude with this remark that the time has arrived when we should protect the farm and the family against the inroads of a Totalitarian State. Opposition based on this farm and family protection policy is essential now, not necessarily for changing the government at once. We need not change the government but the opposition will help to keep the government in proper order. Reference was made to the coming 1962 elections. Don't wait till then; don't think about it at all; that is what I would say. We want an opposition in the country–whether it is in the Parliament or whether it is not in the Parliament– we want an opposition first in the country. We want an opposition thereafter in Parliament; and that opposition, starting from the country and going into Parliament, will keep even the present government in good order. Their confused thinking will begin to settle down into orderly thinking. Otherwise, conceit and arrogance will grow to feed on themselves. _Previous musing: [Panchayati Raj](https://indianliberals.in/content/panchayati-raj/)_ --- ## [Musing] Forests to Forest Dwellers URL: https://indianliberals.in/musings/forests-to-forest-dwellers/ ### Body This is an excerpt from the book 'The Terracotta Reader: A Market Approach to the Environment'. In this piece Parth Shah and Trupti Parekh advocate for forest dwellers' community rights over forests, given that they have a greater incentive to preserve and optimally use forest resources. The history of state forestry, from the British to our government, has been of replacing the diverse species of a natural forest with mono species. Both the scientific and sustainable forestry management has led to the same results. Communities are more likely to find economic and social benefits from the existing diversity of resources that the forests offer. There is higher probability of a natural fit between diverse needs of communities and diverse offerings of forests. In addition to all the utilitarian or efficiency arguments, it must be remembered that local communities have a prior claim—a moral claim—on the forests. They have been living there and using the resource for generations. It is on the premise of prior use that all resources have been settled in any civilised society. It is gross injustice not to recognise the rights of forest dwellers. Community ownership and management solve two problems simultaneously: the protection of forests and of dignified livelihood to the poorest communities in the country. They build their future from the natural asset of forests. The most efficient as well as moral resolution is to take our forests from the foresters and put them in the hands of forest dwellers. _This is an excerpt by Trupti Parekh and Dr Parth J Shah from the book ‘[The Terracotta Reader: A Market Approach to the Environment‘.](https://ccs.in/sites/default/files/2022-08/terra-forest-dwellers-versus-foresters.pdf)_ Read more: [https://spontaneousorder.in/forests-communitisation-or-privatisation/](https://spontaneousorder.in/forests-communitisation-or-privatisation/) --- ## [Musing] Forty-Three Years of Independence URL: https://indianliberals.in/musings/forty-three-years-of-independence/ ### Body The following text is based on the Jawaharlal Nehru Memorial Lecture delivered by Nani Palkhivala at Trinity College, Cambridge, on 7th November 1990. At 43 years of independence, the author analyses India as a democracy, an economy, a united nation. Palkhivala was an Indian jurist, liberal economist and the President of the Forum of Free Enterprise (at the time). At the stroke of midnight on 14th August 1947, Jawaharlal Nehru made his famous speech wherein he referred to India keeping her tryst with destiny and awaking to life and freedom. To review the last three and forty years in an hour is like trying to see the Himalayas at night in one flash of lightning. One thing I promise you - I shall "nothing extenuate, nor set down aught in malice". I would be dishonouring the memory of Pandit Nehru and of his mentor, Mahatma Gandhi, if I try to be economical with the truth.  The greatest achievement of Indian democracy is that it has survived unfractured for forty-three years. Eight hundred and forty million people - more than the combined population of Africa and South America - live together as one political entity under conditions of freedom. Never before in history, and nowhere else in the world today, has one-sixth of the human race existed as a single free nation. Professor Rostow of the Texas University regards the survival of Indian democracy as the most important phenomenon of the post-war era. The achievement is all the more creditable since no other democracy has had such diversity in unity, such a mosaic of humanity. There are twelve great living religions in the world (incidentally, the word "living" is tautologous, since no great religion has ever perished), and all the twelve flourish in India. We have fifteen major languages written in different alphabets and derived from different roots and for good measure, our people - whom you can never call taciturn - express themselves in 250 dialects. English, which is not included in the fifteen major languages listed in the Constitution, yet continues to be the only link-language for the whole country; it is the only language in which the South is prepared to communicate with the North! British jurisprudence is the matrix of our non-personal laws.  **THREE INESTIMABLE ADVANTAGES** In 1950, we started as a Republic with three inestimable advantages.  _First, _we had 5000 years of civilization behind us - a civilization which had reached "the summit of human thought" in the words of Ralph Waldo Emerson. We inherited great skills and many - splendored intelligence, since the genes had evolved over five luminous millennia. We had a superb entrepreneurial spirit, honed over a century of obstacles. A few years ago a World Bank report on India mentioned the two very favourable factors - an unlimited reservoir of skilled labour and abundance of capital available for investment in new projects. The trader's instinct is innate in Indian genes. An Indian can buy from a Jew and sell to a Scot, and yet make a profit! _Secondly, _whereas before 1858 India was never a united political entity, in that year the accident of British rule welded us into one country, one nation; and when independence came, we had been in unified nationality for almost a century under one head of state.  _Thirdly, _our Founding Fathers, after two long years of laborious and painful toil, gave us a Constitution which a former Chief Justice of India rightly described as "sublime". It was the longest Constitution in the world till, a few years ago, Yugoslavia had the impertinence to adopt a longer Constitution.  The substance of the Universal Declaration of Human Rights adopted by the United Nations on 10th December 1948, is embodied as Fundamental Rights in our Constitution. The right to equality before the law is guaranteed to citizens, and non-citizens alike. In one respect our constitutional law is more secular than that of the United Kingdom - religion is no bar to the holding of any public office whatsoever in the State. In another respect, our Constitution may claim to be more progressive than that of the USA - equality of the sexes is a guaranteed right in India, whereas the recent attempt to incorporate a similar right in the US Constitution has so far been unsuccessful.  The right to carry on any occupation, trade or business is, again, a guaranteed right. The concept of "socialism'' did not figure anywhere in the Constitution as originally enacted. On the contrary, the Constitution provided for the Directive Principle of State Policy that the State shall endeavour to secure that "the ownership and control of the material resources of the community are so distributed as best to subserve the common good" and that "the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment". These words rule out State ownership—the Monolithic State—which is the hallmark of communism, euphemistically called socialism.  India is the only country in the world where in the States which are governed by the Communist party human rights are fully respected - and that is only because the Bill of Rights is firmly entrenched in our national Constitution.  We can proudly say that our Constitution gave us a flying start and equipped us adequately to meet the challenges of the future. Unfortunately, over the years we dissipated every advantage we started with, like a compulsive gambler bent upon squandering an invaluable legacy. I am afraid, India today is only a caricature of the noble democracy which Nehru strove to bring to lift and freedom in 1947.  **SHELLS OF SOCIALISM AND STATE CONTROLS** Successive governments imposed mindless socialism on the nation, which held in thrall the people's endeavour and enterprise. They respected the shells of socialism - state control and state ownership - while the kernel, the spirit of social justice, was left no chance of coming to life. We shut our eyes to the fact that socialism is to social justice what ritual is to religion and dogma is to truth. The peacock is our national bird, but we could have more appropriately chosen the ostrich!  _The Economist _rightly remarked in January 1987 that socialism as practised in India has been a fraud. Our brand of socialism did not result in transfer of wealth from the rich to the poor but only from the honest rich to the dishonest rich.  We built up State-Owned Enterprises - called the public sector in India. The sleeping sickness of socialism is now universally acknowledged, - but not officially in India. No less than 231 public sector enterprises are run by the Union Government, and 636 by the State Governments. These public sector enterprises are the black holes, the money guzzlers, and they have been extracting an exorbitant price for India's doctrinaire socialism. There is a tidal wave of privatization sweeping across the world from Bangladesh to Brazil, but it has turned aside in its course and passed India by.  The most persistent tendency in India has been to have too much government and too little administration; too many laws and too little justice; too many public servants and too little public service; too many controls and too little welfare. Every segment of the people's enterprise is festooned with red tape. From the very first decade of the republic the steel claws of the permit-licence-quota _raj _were laid upon the national economy, and even today their grip continues with insignificant relaxation.  The administrative techniques pursued by the government are the same as were cast in a concrete mould more than a century ago. Files and minutes still go perpetually from official to official and from ministry to ministry. In the result, nothing moves except the river Ganges. "Round and round," Lord Curzon the Viceroy noted, "like the diurnal revolution of the earth went the file - stately, solemn, sure and slow." Decades later, Malcolm Muggeridge observed the same phenomenon: "It was government pure and undefiled; endlessly minuting and circulating files, which, like time itself, had neither beginning nor end, but just were."  Today the situation remains unchanged, - only the number of files has increased a thousandfold. Millions of man hours are wasted every day in coping with inane bureaucratic regulations and a torrential spate of amendments.  Legal redress is time-consuming enough to make infinity intelligible. A lawsuit once started in India is the nearest thing to eternal life ever seen on this earth. Close to two million cases are pending in the eighteen High Courts alone, and more than 2,10,000 cases in the Supreme Court for admission or final hearing or miscellaneous relief.  History will record that the greatest mistake of the Indian republic in the first forty years of its existence was to make far less investment in human resources - investment in education, family planning, nutrition and public health - than in brick and mortar, plants and factories. We had quantitative growth without qualitative development. Our gross national product increased, but not gross national happiness. Different parts of India still live in different centuries, so far as basic amenities and cultural awareness are concerned.   The quality of life cannot improve in India so long as the population keeps on increasing at the present alarming rate. In the time I shall take to deliver this lecture, the population of India will have increased by 2000.  It has been said that development is the best contraceptive but development itself would not be possible if the present increase in numbers continues. Education, particularly education of girls, is another excellent contraceptive. But we have totally failed to use education as an instrument. of national development. Two-thirds of our people, and four-fifths _of _our females, are literally illiterate after more than forty years of independence: According to the World Bank, by the turn of the century 54 per cent of all illiterates will be in India.  We keep. on tackling fifty-year problems with five-year plans, staffed by two-year officials, working with one-year appropriations - fondly hoping that somehow the laws of economics will be suspended because we are Indians. **LIBERALIZATION IN THE EIGHTIES** "Men will do the rational thing," said Lord Keynes, “but only after exploring all other alternatives." After the other alternatives had failed dismally, India in the Eighties initiated a policy of liberalization and dismantling of controls. For the first time we talked of economic rationalism in place of economic theology, and we realized the imperative necessity of fruitful egalitarianism in place of sterile socialism.  For years we had suffered crushing rates of income-tax and wealth-tax - the highest in the world in their aggregate impact. We had a supreme ironic procession of budgets historically retrograde, economically un-progressive, and socially stagnant. Over-taxation, corrupted the national character overtly. The nation survived only because the tax system continued to breathe through loopholes and the economy used to breathe through the window of tax evasion.  The Budget of 1985 was epoch-making. It was the finest Budget free India ever had. It represented not a breath of fresh air but a blast of fresh air in the mouldy corridors of the North Block from where the Finance Ministry functions. It represented a mood - the people's new mood of optimism and self-confidence. It abolished estate duty. It slashed wealth-tax to the maximum rate of two per cent and personal income-tax to maximum fifty per cent. Luckily, the low rates of income-tax and wealth-tax by and large continue in force, though unwise increases have been made in the thinly disguised temporary form of a surcharge.  The new budgetary philosophy was eminently suited to prepare and equip India for a place in the 'Prosperity League' in the unfolding future. The new philosophy was that the government should no longer be the power above the people, to be lobbied, petitioned and propitiated for favours.  Unfortunately, the government's sensible new policy - the one ray of hope for fast economic growth - was never fairly implemented. It encountered formidable opposition from three quarters: (a) the top-heavy bureaucracy reluctant to shed its enormous powers; (b) influential politicians who preferred to let socialism remain the opiate of the people and of whom it can be truly said that if ignorance is bliss they should be the happiest men alive; (c) quite a few Indian businessmen who were much more interested in their own personal prosperity than in the future of the country and who preferred to flourish in the non-competitive environment.  The result of the working of these three obscurantist forces is that India continues to remain the only significant country in the free world to hold aloft the torn and tattered flag of socialism.  **STILL PLAGUED BY THREE PROBLEMS** Small wonder that after forty-three years of independence, we are still plagued by three basic problems - poverty, unemployment and foreign exchange trade deficit. In the Second Nehru Memorial Lecture delivered here, Lord Mountbatten referred to his first interview with Nehru on 24th March 1947, when he asked Nehru what he thought was the greatest problem confronting India. Nehru replied, "the economic problem". That problem stubbornly refuses to go away. India has 15 per cent of the world's population, but only 1.5 per cent of the world's income. In the four decades since we became a republic, our per capita income in real terms did not even double but increased by only 91 per cent. Today we are still the twenty-first poorest nation on earth.  Perceptive observers in foreign countries where Indians work and prosper are baffled by one question - how does India, with its great human potential and natural resources, manage to remain poor? The answer is that we are not poor by nature but poor by policy. You would not be far wrong if you called India the world's leading expert in the art of perpetuating poverty.  Sir William Ryrie, the Executive Vice President of the International Finance Corporation, said when he was in India in January 1989 that India has some of "the most creative entrepreneurs... the most dynamic business leaders... and the sharpest financial brains in the world." These words give you an idea of the magnitude of the effort needed to keep India impoverished.  Most of our politicians and bureaucrats, untainted by knowledge of development in the outside world, have no desire to search for genes of ideas which deserve to be called "a high-yielding variety of economics". We are smugly reconciled to low yield from high ideals.  India is rattling - and rattling violently - with spare human capacity. More than 30 million are registered on our 840 Employment Exchanges. According to objective estimates, there must be at least 20 million other unemployed who are not registered.  In 1950, India ranked sixteenth in the list of exporting countries of the world; today it ranks forty-third! Using another yardstick, in 1950 India had 2.2 per cent of the world export market; today its share stands reduced to 0.45 per cent.  As the Chancellor of the Exchequer pointed out in your House of Commons some time ago, the population of Hong Kong is less than one per cent of India's (0.7 per cent to be precise) and its land area is 0.03 per cent of India's, and yet it has twice the trade of India.  One of the main reasons for our failure to fulfil our export potential is the maddening instability of our fiscal and economic laws. A new Stable Export- Import Policy was announced in April 1985 and a second Stable Policy in April 1988. But since 1985 the enormous number of Notifications which have amended the Stable Policy works out to one change every alternate working day!  Apart from exports, another rich source of foreign exchange earnings can be tourism. Unfortunately, India has less than half of one per cent of the world tourist traffic. We get only 1.2 million tourists a year and earn annually about Rs.18 billion in foreign exchange from tourism. This is a pathetically deplorable performance for a country which has such fantastic riches to offer tourists.  **MORAL DECAY** The picture that emerges is that of a great nation in a state of moral decay, of which corruption and indiscipline are two of the several facets. In the land of Mahatma Gandhi, violence is on the throne today. Mobocracy too often displaces democracy. The contribution of modern India to sociology has been _Bandh- _the closure of an entire city by militant rowdies.  Never before in our republic's history has violence marked our national life on a scale so widespread as at present. We have enough religion to hate one another but not enough to love one another.  One may apply to India the words used by the late Benigno Aquino about the Philippines- "Here is a land in which a few are spectacularly rich while the masses remain abjectly poor... where freedom and its blessings are a reality for a minority and an illusion for the many... a land consecrated to democracy but... a land of privilege and rank... a republic dedicated to equality but mired in an archaic system of caste."  The greatest problem of India is that its finest men- men of calibre and vision, knowledge and character - are not in politics and stand little chance of getting elected having regard to the murky atmosphere of our political life. Caste is the football in the political game which our men in public life play.  **DIVISIVENESS- THE INDIAN DISEASE** Unfortunately, divisiveness has become the Indian disease. Truly, divisiveness is the AIDS of India - a disease which is spreading fast and wide, preys on the public mind and is without a cure in sight. Communal hatred, linguistic fanaticism and regional loyalty are gnawing at the vitals of the unity and integrity of the country. To the growing army of terrorist~ and professional hooligans, caste or clan, creed or tongue, is a sufficient ground to kill their fellow citizens.  The most crying need of India today is to undergo catharsis, a course of emotional cleansing. We must not allow the moral bedrock of our society to turn to lava.  National integration is born in the hearts of the Citizens. When it dies there, no army, no government can save it. States of mind precede States. Inter-faith harmony and consciousness of the essential unity of all religions is the very heart of our national integration.  The soul of India aspires to integration and assimilation. Down the ages, Indian culture - a tremendous force of power and beauty - has been made richer and deeper as a result of absorbing what is best in outside influences and integrating those various influences to grace and enrich its own identity.  **HOPE FOR THE FUTURE** But the landscape is not one of unrelieved gloom. Some measure of the innate potential of the country is afforded by its actual achievements against heavy odds. Among the industrialized nations of the world we are the tenth. The country has set its sights high. It has nuclear reactors and satellites in space. It even exploded an atomic device (1974) - the only one - and learnt the bitter lesson that one explosion activates international reaction but a series of explosions anaesthetizes it. One blast brings discredit, while a sequence brings prestige and power.·  Though there is no instant solution for our multitudinous problems and the short-term prospect may only be of shadows lengthening across the path, an objective overview would justify confidence in the long-term future of the country. In the affairs of nations, as in the world of elements, winds shift, tides ebb and flow, the ship rocks. Only let the anchor hold. History records the gloomy forebodings of some of the wisest Britishers in the first half of the nineteenth century about their country's future, but the decades which followed the pessimistic predictions saw Britain rise to the height of its glory. In the first few decades of the USA, the depressing situation led so perceptive a man as Joseph Story to talk of the possibility of the Constitution perishing "before the grave has closed upon the last of its illustrious founders", but the 200-year republic lives on as the most vibrant on earth.  The vitality of India is remarkable. The country does not have a powerful economy, but has all the raw materials to build one. It would not be an exaggeration to say that the Indian economy is a sleeping giant who, if awakened, could make an impact on the global economy.  There are various factors which go to make foreign investments in India very attractive. First and foremost, when you invest in India, you invest in democracy. The survival of democracy in India ought to be a matter of the most vital concern to the free world.  Further, our domestic market is itself enormous. Almost all manufacturing units in India , with foreign collaboration have garnered golden grain.  Generally speaking, we are a sloppy nation. But there is one surprising thing. If you insist upon nothing but the best, you often get it in India, comparable to world standards. India can and does respond to uncompromising insistence on quality.  Finally, the great appreciation of most foreign currencies against the Indian rupee offers an excellent opportunity of using India as a manufacturing base.  A nation's worth is not measured merely by its gross national product, any more than an individual's worth is measured by his bank account. Ambassador John Kenneth Galbraith remarked that while he had seen poverty in many countries of the world, he found one unusual attribute among the poor of India - ''There is richness in their poverty."  The heart of the nation is sound and the human raw material is excellent. To a western mind, the Indian's inner strength and capacity for patient endurance are almost unbelievable.  Hundreds of millions, who have no standard of living, still have a standard of life. The nation is able to take in its stride situations which would cause a revolution in other countries. The ancient civilization has survived and will survive when the raucous and fractious voices of today are lost in the silence of the centuries.  Nature has been kind to India in one respect. It has endowed the country with the gift of producing great leaders in the darkest hour- leaders with the gift of grace who can arouse the trusting millions to great heights. Look at the galaxy of character and calibre India produced at the time of the struggle for independence in the Thirties and the Forties.  When the hour struck, the man was found - Mahatma Gandhi- the greatest of our leaders. He lit the imagination of the entire nation. He created men out of dust. He taught the unforgettable lesson of that cynicism corrupts and absolute  cynicism corrupts absolutely. He made us realize the profound  truth that single-minded pursuit of money impoverishes the mind, shrivels the imagination and desiccates the heart.. "The golden age only comes to men," said C.K. Chesterton, "when they have, if only for a moment, forgotten gold".  Mahatma Gandhi asked businessmen to be engaged in commerce but without a commercialized outlook. He exhorted youth to cultivate its mind, but not merely with a view to offering it as a commodity for sale in the market place.  At the Gandhi Samadhi - the memorial to Mahatma Gandhi - in New Delhi, are inscribed what the Mahatma regarded as the Seven Deadly Sins:  "Commerce without ethics; Pleasure without conscience; Politics without principle; Knowledge without character; Science without humanity; Wealth without work; Worship without sacrifice." There is a basic lesson of Indian history. Our people have always taken their moral standards from their rulers: the people have risen to great heights when they have basked in the glow of noble kings or leaders. The present generation is waiting for a leader who will make it relearn the moral values, and who will inculcate in the people as Gandhi did, a sense of the responsibilities which fall on every citizen of a free society.  It is true that eternal vigilance is the price of liberty. But it is true, in even a deeper sense, that eternal responsibility is also part of the price of liberty. Excessive authority, without liberty, is intolerable; but excessive liberty, without authority and without responsibility, soon becomes equally intolerable. De Tocqueville made the profound observation that liberty cannot stand alone but must be paired with a companion virtue: liberty and morality; liberty and law; liberty and justice; liberty and the common good; liberty and civic responsibility.  One last thought, and I shall have done. Today, the unity and integrity of India seems to be at stake. But ''even this shall pass away". Indian society will, in course of time, acquire the requisite political culture - the attitudes and habits of tolerance, mutual respect arid goodwill, which alone can make democracy workable.  The day will come when the 26 States of India will realize that in a profound sense they are culturally akin, ethnically identical, linguistically knit and historically related. The greatest task before India today is to acquire a keener sense of national identity, to gain the wisdom to cherish its priceless heritage, and to create a cohesive society with the cement of Indian culture. We shall then celebrate the 15th day of August not as the Day of Independence but as the Day of Inter-dependence- the dependence of the States upon one another, the dependence of our numerous communities upon one another, the dependence of the many castes and clans upon one another - in the sure knowledge that we are one nation. _Previous musing: [OBSTACLES TO LIBERALISATION AND MARKET ECONOMY](https://indianliberals.in/content/obstacles-to-liberalisation-and-market-economy/)_ --- ## [Musing] Free Enterprise and Freedom URL: https://indianliberals.in/musings/free-enterprise-and-freedom-murarji-vaidya/ ### Body _The following musing is an excerpt from a booklet under the same name, authored by Murarji Vaidya and published by the Forum for Free Enterprise in 1956. The author addresses the objectives of the Second Five Year Plan proposed by the Planning Commission of India – highlighting the restrictions on private enterprise to prevent concentration of economic power, arguing that extension of the public sector is bound to result in the same outcome. _ The obvious objective [of the Second Five Year Plan] is to eliminate the supposed existence of a concentration of economic power in the hands of a few and to prevent the growth of such power in the hands of a few in the future. But the extension of the public sector in an expansionist economy is bound to result in the concentration of economic power in the hands of those who form the Government and of those who administer public enterprises. Consequently economic power will be concentrated in the hands of those who have the political power in their hands. With the development of the country's economy at a rapid rate, such concentration of economic power will also grow equally rapidly in the hands of politicians or of bureaucrats who will be working initially under the directions of the politicians who occupy the places of power under our present democratic set up.  Human nature being what it is and the standards of integrity, patriotism and selfishness being at a common low level among all the sections of the community whether they are businessmen, industrialists, politicians or civil servants, what is the guarantee that the evils which are supposed to exist at present by the concentration of economic power in the hands of a few so-called capitalists will cease to exist when a larger and greater concentration of economic power in the hands of a few politicians and civil servants takes place under the new economic order? It can hardly be denied that having taken several generations for the achievement of political freedom, we should value democracy, freedom and liberty of the individual citizens as of far greater basic value than the pace at which the economic development had taken place. Having granted this, can it be denied that it would be unwise to run the risks which I have indicated? Can it then be denied that it would be in the larger interests of the basic preservation of our freedom, of the strengthening development of our nascent democratic institutions and of the development of our economy that the new economic order which is intended to usher in an era of social and economic equality should be achieved through the surer and historical proven processes of comparatively slow moving democracy rather than through the rapid but highly dangerous methods which have been witnessed in totalitarian countries?  The new economic order should not endanger our newly won freedom and towards that end it is the duty of all the citizens, no matter what station of life they find themselves in to see to it that our leaders and our planners follow the surer path of democracy and of gradual achievement of economic development rather than the dangerous paths of totalitarian methods to achieve a higher degree of economic development at a faster pace. type=content&p=8493). Needs editorial review._ --- ## [Musing] Free Enterprise and Freedom URL: https://indianliberals.in/musings/free-enterprise-and-freedom/ ### Body _The following essay was published by the [Forum of Free Enterprise](https://indianliberals.in/content/free-enterprise-and-freedom-by-murarji-j-vaidya-april-10-1956/) in 1956. Authored by Muraji J. Vaidya, the essay examines the approach of the Planning Commission in the Second Five-year Plan and what it meant for the private sector. _The approach of the Planning Commission and of the Government to the question of the scope for and sphere of Private Sector in the Second Five-Year Plan is evident from the first chapter of the draft outline.  It has been largely conditioned by the Socialist Pattern to which the present Government are committed ever since the adoption of the well known resolution on Socialistic Pattern of Society by the Avadi session of the Congress. The speeches and declarations of policy by the Prime Minister and other Congress leaders from time to time have not only confirmed this but even indicated a step forward in this direction by now clearly adopting the "Socialist" in place of "Socialistic Pattern of Society." The draft outline has further emphasised this aspect of the Government policy.  Among the objectives of the Second Plan indicated by the Planning Commission the fourth objective of reduction of inequalities in income and wealth and a more even distribution of economic power has, it appears, very largely influenced the approach of the Commission in dealing with this sphere of the private sector in the Second Five-Year Plan.  In this context it is interesting to note the following observations of the Commission. "Economic growth means not only more production but also more - and increasingly more - capacity to produce. The Second Five-Year Plan has to increase the flow of goods and services available and also to carry forward the process of institutional change... The achievement of a Socialist Pattern of Society has been accepted as the objective of economic policy. This means that the basic criterion for determining the lines of advance is not private profit but social gain. Major decisions… must be made by agencies informed by social purpose…” “...the public sector has to expand rapidly, and the private sector has to play its part within the framework of the comprehensive plan accepted by the community... The Socialist Pattern of Society is not… rooted in any doctrinaire dogma… economic policy and institutional changes have to be planned in accordance with democratic and egalitarian ideals which the country cherishes and is resolved to pursue."  The Commission are not apparently satisfied with laying down the objective of elimination of inequalities of wealth and income as between different sections of the population but desired “that the entire pattern of investment is adapted to the securing of balanced regional development in the country, and to eliminating disparities in levels of development between different regions in the country.” They have pointed out in this context that… “up to a point the growth of” large towns and cities is a necessary accompaniment of industrialization... Beyond a point, however, there are social costs like the emergence of slums and increased incidence of ill health. They therefore favour “decentralized industrial production.”  The Commission have further pointed out that economic objectives cannot be divorced from social objectives and means and objectives go together. It is only in the context of a plan which satisfies the legitimate urges of the people that a democratic society can put forward its best efforts. “All these objectives require a diversified economic pattern.” They emphasize at the same time that “the process and pattern of development should reflect certain basic social values and purposes. Development should result in diminution of economic and social inequalities and should be achieved through democratic means and processes.” “It is the last aspect of this process of development viz., the democratic means and processes which, in my opinion, requires to be kept in view very prominently in considering the effect which the evolution of a socialist pattern of society is likely to have in an underdeveloped economy working under an infant democracy as in a country like ours. Ideologically, it would indeed be a consummation highly cherished that democracy and a socialist pattern of society should be developed simultaneously in a country where the fruits of freedom and of economic development have just begun to be tasted.  The question, however, is whether in the context of the existing economic, social and political circumstances in the country, such a simultaneous development of these plans is feasible without running the risks which appear to be inherent in a rapid advance on all the fronts. And what are these risks? It has been the experience of the countries in Eastern Europe including Russia that Socialism, which later developed into Communism, has sounded the death-knell of democracy and of individual liberty. It is often argued that we in this country have to make up for a time lag of decades of backwardness in the course of a few quinquennial of planned development, just as a country like Russia claims to have done and a country like China attempting to do. But as I have said before, in Russia. Socialism has abolished Democracy, the Chinese experiment is still in the process of being worked out.  The risk before our country therefore is that democratic processes and means, we may achieve in our anxiety to evolve a Socialist Pattern by neither. At best, perhaps, we might achieve one at the expense of the other. The fact that this risk exists has been proved by the history of Eastern countries of Europe. What then are the chances of our achieving these dual objectives of Socialism with Democracy in our country? As a means towards the achievement of a Socialist Pattern of Society, the Commission proposes the extension of the Public Sector.  The obvious objective is to eliminate the supposed existence of a concentration of economic power in the hands of a few and to prevent the growth of such power in the hands of a few in the future. But the extension of the public sector in an expansionist economy is bound to result in the concentration of economic power in the hands of those who form the Government and of those who administer public enterprises. Consequently economic power will be concentrated in the hands of those who have the political power in their hands. With the development of the country's economy at a rapid rate, such concentration of economic power will also grow equally rapidly in the hands of politicians or of bureaucrats who will be working initially under the directions of the politicians who occupy the places of power under our present democratic set up.  Human nature being what it is and the standards of integrity, patriotism and selfishness being at a common low level among all the sections of the community whether they are businessmen, industrialists, politicians or civil servants, what is the guarantee that the evils which are supposed to exist at present by the concentration of economic power in the hands of a few so-called capitalists will cease to exist when a larger and greater concentration of economic power in the hands of a few politicians and civil servants takes place under the new economic order? It can hardly be denied that having taken several generations for the achievement of political freedom, we should value democracy, freedom and liberty of the individual citizens as of far greater basic value than the pace at which the economic development had taken place. Having granted this, can it be denied that it would be unwise to run the risks which I have indicated? Can it then be denied that it would be in the larger interests of the basic preservation of our freedom, of the strengthening development of our nascent democratic institutions and of the development of our economy that the new economic order which is intended to usher in an era of social and economic equality should be achieved through the surer and historical proven processes of comparatively slow moving democracy rather than through the rapid but highly dangerous methods which have been witnessed in totalitarian countries?  The new economic order should not endanger our newly won freedom and towards that end it is the duty of all the citizens, no matter what station of life they hid themselves in to see to it that our leaders and our planners follow the surer path of democracy and of gradual achievement of economic development rather than the dangerous paths of totalitarian methods to achieve a higher degree of economic development at a faster pace.  Apart from the considerations mentioned above, the other important point is that the rate of development envisaged in the Second Five-Year Plan particularly in the industrial sector, as compared to the rate of development already achieved during the First Five-Year Plan period, is not of such magnitude apart from the Steel Plants which the Government themselves have already decided to establish, that it can be considered to be beyond the capacity of the private sector to undertake that development nor is it of such high magnitude that the institutional charges in the frame work of industrial ownership and management should become necessary.  The record of the private sector in the First Five-Year Plan, as accepted and acknowledged by the Planners themselves, is sufficient to justify the continuation of the existing institutional frame work. Even, on this score, therefore, the changes envisaged can be considered to be entirely dictated by the ideological determination based upon the Avadi resolution and not on considerations of the need for rapid rate of development._Last week’s musing: [CENSORSHIP AND THE LAW OF INEXORABILITY](https://indianliberals.in/content/censorship-and-the-law-of-inexorability/)_ --- ## [Musing] Free Enterprise in Danger - B.R. Shenoy URL: https://indianliberals.in/musings/free-enterprise-in-danger-b-r-shenoy-1975/ ### Body _Produced below is an excerpt from 'Economic Prophecies' – a collection of BR Shenoy's theoretical writings dating from 1932 to 1953. __The featured article 'Free Enterprise in Danger' was written by Shenoy in support of statements made by industrialist JRD Tata at a seminar in 1975, sounding a warning about the impending extinction of the private sector._ The institution of free enterprise and the liberty of the individual are in a critical phase in India. JRD Tata has stated that "the time has come for a cry of alarm that the private enterprise part of the mixed economy is threatened with early extinction". The communist strategy in India aims at overthrowing the government and the established order of society not by violent revolution but through peaceful infiltration. As part of the strategy, 'a number of persons' who 'had been members of the Communist Party' had, Mr Tata averred, gained 'access to critical important positions in government'; and though 'momentous changes' of a Marxist nature have been 'introduced in our economic life', this process has taken place with such 'gradualness' that neither the 'intelligentsia nor the public at large seem to be fully alerted as yet' to the 'incipient dangers' of the mixed economy being replaced by the 'totally planned and regimented economy'. P N Haksar, deputy Chairman, Planning Commission, reacted to these home truths in extraordinarily strong terms. Addressing the annual meeting of the Federation of the Indian J R D Tata Chambers of Commerce and Industry, India's premier trade association, Mr Haksar asserted that the mixed economy was not in the morgue, but very much up and doing. He argued that, as 90 per cent of the national product came from the private sector, there was no factual basis for Mr Tata's alarm. The high percentage of private sector output is no evidence against Mr Tata's assessment. His forebodings rest on, first, the vast control which government has acquired over the establishment, expansion and functioning of businesses and industrial undertakings; secondly, on the option to convert loans to public sector financial agencies and private companies into equity capital of the latter; and, thirdly, on the annual appropriation by the public sector of as much as 65 per cent of the total investment resources (the sum of current domestic savings, foreign aid and drafts on currency reserves). It has been estimated that by 1980, the third factor alone may bring under government ownership 50 per cent of the industrial and mining capital in the country. Government ownership may rise to 80 per cent if loans are converted into equity capital. THUS, UNDER THE prevailing 'mix' of the mixed economy, the Marxist doctrine of the public ownership of the means of production may become an established fact with the simple lapse of time - a case of communism, or a leap forward into it, without tears. Witness, moreover, the political ease with which the wholesale trade of wheat was nationalised in 1973. The prevailing political climate in India is such that if electoral exigencies called for it, the takeover of the so-called 'monopoly houses' - the top-grade business undertakings in the private sector - should raise no political problems. This possibility is not idle speculation. It is in the mainstream of the ideology to which the top policymakers and the dominant wing in the Congress party subscribe; and it may receive the same public approbation and ballot box windfall as the bank nationalisation of july 1969 had done. Moreover, most observers believe that there is nothing the party in power will shrink from in order to remain in power. It is these features of the Indian scene that constitute the credentials of Mr Tata’s evaluation. The continued high proportion of the private sector component of the national product, cited by Mr Haksar, is but the joint reflex of, first, agriculture constituting about 50 per cent of productive enterprise and, secondly, the expansion of public sector output at less than snail's pace, despite the galloping investment in this sector - the result, as we sharply presently see, of corruption and resource wastages. Strangely, the predicament facing private enterprise has not alarmed the Indian business community. Businessmen argue that India has survived, to quote Mr Tata, 'disasters which had destroyed other civilisations' in the past, and that somehow we would escape the communist menace too. During two decades of socialism, some businessmen amassed wealth and affluence on a scale beyond their own dreams; and they have been among the strongest supporters of socialist measures, though they like to describe them as mixed economy measures. The third factor reviewed above as being responsible for undermining private enterprise - the appropriation by the public sector of 65 per cent of the total available investment resources – merits closer attention. This appropriation is not only out of all proportion to the contribution of public sector to the Indian national product a mere 4 to 9 per cent, it is also responsible, in large measure, for the rather odd phenomenon of stagnation of per capita output and income since 1964-65, in the context of a continued acceleration of total investment. These investments multiplied by as much as 5.3 times (at 1961-62 prices) the expansion of population, as between the First Plan (1951-56) and 1973-74. The link between the two - heavy public sector appropriation and economic stagnation - is easily stated. First, when Rs 1 billion ($ 124 million) are 'invested' in public sector projects, what redly goes into them may vary, depending on projects and the parties concerned, from Rs 600 to 800 million ($74.4 to 99.2 million). The balance Rs 200 to 400 million ($24.8 to 49.6 million) is distributed as corrupt payments by contractors and others - 'kickbacks' in American usage - and, consequently, gets transformed into consumer income. Though such transformation is part of the old PWD (Public Works Department) tradition, the amounts involved are no longer peanuts. With public sector outlays in 1973-74 at Rs 41,250 million (US $5,124 million), the corrupt payments, i.e. investments converted into private incomes, may be of an order of Rs 8,250 to 16,500 million ($ 1,025 to 2,050 million). This is about 17 to 34 per cent of total domestic savings during the year. To the extent of these conversions, Plan investments are only paper investments and can make no contribution to the national product. Second, unused production capacities, which in recent years have ranked as high as 35 to 55 per cent, add nothing to current output. On the other hand, the national product would be less by the capital maintenance costs of unused capacities. To this must be added the debit effect on the national product of various inefficiencies and laxatives of public sector undertakings – which include overstaffing, worker idleness, wastage of raw materials and accessories, neglect of capital equipment maintenance and poor attention to quality control. Third, the private sector, which accounts for 84 to 92 per cent of the national product, receives but 35 per cent of the total investment resources, the balance left after the draft of these resources into the public sector. As the manufacturing industry in the private sector receives priori~ resource allocations, the abnormally heavy public sector appropriations have involved the capital starvation of agriculture. Evidence of this capital starvation lies in the decline in rural per capita private investments in agriculture, still the main source of agricultural-finance, and in the consequent decline, at an annual rate of 0.14 per cent (compound) in agricultural production per head of the rural population during the period 1961-74. THOUGH INDUSTRIAL PRODUCTION rose simultaneously at an annual rate of 4.9 per cent (compound), as agriculture accounts for 47 per cent of national product and industry only 14.3 per cent, the decline in per capita agricultural output negated, almost wholly, the expansion of per capita industrial production; and the net per capita income in 1974-75 was still at Rs 339 ($42.11) as against Rs 338 ($41.99) in 1964-65, both at 1960-61 prices. Corruption has eroded not only the moral standards of the people but also the pace of Indian economic growth. We have been standing still while most parts of the rest of the world are marching forward, some - like Japan and the several mini-Japans in Asia - at a galloping speed. The expansion of employment being a function of the expansion of the overall national product, with the latter remaining semi-stagnant, natural additions to the labour force have not been fully absorbed into employment. Consequently, unemployment in 1971 was 5.7 times the unemployment in 1951 (3.3 million). One must realise that even a hypothetical government of Gandhian ascetics - with J.P. Narayan or Vinoba Bhave as prime minister - could make no significant difference to these developments under the prevailing 'schizophrenic policies', as Mr Tata aptly describes them. It is not possible to clear the chaos created and place the country along the right road to progress without a thorough restructuring of these policies, of which heavy cuts in public sector outlays are among the first essential steps. Read the complete book **[here](https://indianliberals.in/liberals/economic-prophecies.pdf)**. type=content&p=8601). Needs editorial review._ --- ## [Musing] Free Enterprise in India: A Call for Leadership - A.D. Shroff, 1961 URL: https://indianliberals.in/musings/free-enterprise-in-india-a-call-for-leadership-a-d-shroff-1961/ ### Body _Ardeshir Darabshaw Shroff (1899-1965) was an eminent industrialist, banker, and economist. He was one of the architects of free India’s banking and insurance business. Shroff was amongst the earliest proponents of free enterprise in India. In 1956, Shroff co-founded the Forum of Free Enterprise, a think-tank, as a means to counter the socialist tendencies of the Nehru government. _ _The following excerpt has been borrowed from the text of the presidential address given by _**_AD Shroff_**_ at the fifth annual general body meeting of the _**_Forum of Free Enterprise_**_ In Bombay on 25 October, 1961._ Knowledge shall make man free, it is said. This is illustrated by the impact of the Forum of Enterprise on national thinking since its formation a little over five years ago. An atmosphere darkened by slogans of socialism is getting brighter today, thanks to the dissemination of knowledge on economics of free enterprise which is nothing but application of common sense to problems of production, distribution and exchange. It is a matter of consolation that the intellectually honest among socialist friends have been realistic enough to grasp the significance of economic commonsense. For instance, Mr Jayaprakash Narayan, a founder of socialist movement in India, is thoroughly disillusioned about nationalisation, one of the main planks of doctrinaire socialism. He is reported as having declared at a public meeting at Srirampur on May 2, 1961, that nationalisation of big industries would not solve India's economic problems nor would it achieve the general well-being of society. Such nationalisation would only create an "economic bureaucracy" in addition to the other administrative personnel that would get high salaries without looking after the interests of the common people, he added.  The Indian economy is dominated today by the Five Year Plans. Therefore, the Third Plan naturally forms the main theme of economic debate and discussions. Although the Plan datewise was to have commenced on April 1, 1961, the final draft was published on August 7, 1961, and Parliamentary approval was gained on August 24, 1961. This time-lag in itself is a sad commentary on the type of planning adopted at present. Committed as we are to an industrialised society, it is worth our while to know the sagacious observation of \Vilhelm Roepke, eminent economist who was in no small measure responsible for the Economic Miracle in West Germany, on the time element in such a society. Commenting on the enthusiasm of underdeveloped countries to transplant economic forms of industrialised West without examining all its bases, he warned: "Modern economic activities could thrive only when whoever says 'tomorrow' means tomorrow and not some undefined time in the future."  The Third plan imitates the Second in the strategy of planning. It is a carbon copy of the Soviet Communist model of planning. On previous occasions, I have warned the country that the Soviet Communist model of planning with its emphasis on heavy industries, collectivisation of agriculture, centralisation of all ownership and power in the Government, neglect of consumer goods as well as a gross disrespect for the basic human liberties is eminently unsuited to India. As we cherish the democratic way of life, we cannot afford to imitate totalitarian planning while trying to maintain a democratic structure. Moreover, it is becoming apparent with the passage of time that the Soviet model of planning is not leading to the promised El Dorado. According to Mr. W. W. Rostow, whose theory of economic development is in vogue now, “revolutionary changes in agricultural productivity are an essential condition for successful take-off; for modernisation of a society increases radically its bill for agricultural products.” Agriculture has been described as a dead rat in the Soviet economy. The imbalance between the agricultural and industrial sector continues in an aggravated form. Recently, it has also been observed that the Soviet economy has become one of “Conspicuous Production”. If the phrase “standard of living” has to have any meaning, then there should be meaningful production of goods and services as required and desired by the people, and not production according to the concept of the State planners without any relevance to the needs of the people. Such meaningful production of goods and services required by the people, as historical experience has shown, can never be had in a collectivist economy.  As ably stated by Arthur Larson in his book, _What We are For_, “An economy directed by the state will ultimately always serve the ends of the state. Only an economy directed by consumers will ultimately serve the needs of the consumers…Yet totalitarian Communism not only defaults on the job of creating a prosperous modem consumer economy, but for this dismal performance still exacts the price of personal freedom.”  Read the complete speech [here](https://indianliberals.in/forum-of-free-enterprise/free-enterprise-in-india-a-call-for%20leadership-by-Ad-shroff-November-8-1961.pdf). type=content&p=8529). Needs editorial review._ --- ## [Musing] FREE ENTERPRISE IN INDIA AND FREEDOM URL: https://indianliberals.in/musings/free-enterprise-in-indian-and-freedom/ ### Body The following essay was originally published by The Times of India in 1956 and reproduced by the [Forum of Free Enterprise](https://indianliberals.in/forum-of-free-enterprise/free-enterprise-in-india-and-freedom-a-d-shroff-january-4-2011.pdf). The essay was authored by Indian banker, economist, liberal and the founder of Forum of Free Enterprise A.D. Shroff.The role of Private Enterprise in the future can be assessed only in the context of Government's decision to establish a Socialist State in this country.  Two broad implications of this decision are obvious, viz., (i) that the State will assume increasing control and ownership of the means of production, and (ii) that the resources available to the Private Sector will be gradually diverted to the Public Sector.  Government have already taken certain measures, both fiscal and others, to work towards the attainment of this objective.  Government claims that their policy has been endorsed by the country which means that the vast majority of the unthinking millions of the country have understood the implications of this policy and are satisfied that it will ultimately lead to a substantial increase in the standard of living of the masses. On the other hand, there are thousands of thinking people in the country who are honestly convinced that from a long-term point of view this policy will not only not help the country in achieving a rapid and all sided economic development, but may well hamper the attainment of this objective which is so anxiously desired by every section of the community. To take, however, a realistic view of the situation, everyone must be prepared to concede sincerity and honesty to the Ruling Party and their determination to pursue this policy till they realise that their philosophy is a good horse in the stable but may well prove an arrant jade on the journey. After considerable cogitation, I have come to the conclusion that the most urgent need of the Private Sector is to organize on a country-wide basis a campaign to educate the public about the mistaken policy of the ruling party and to satisfy the country that the attempt to establish a Socialist State is not calculated to serve the best interests of the hundreds of millions inhabiting this country. In my daily contact with people engaged in trade and industry, big and small, I find that in recent months a large number of people have been seized with a feeling of despondency. A number of them are expressing a feeling whether it is at all worth while for them to make any additional commitments and, in some cases, even whether it would not be in their interests to reduce their existing commitments.  As a result of the cruel operation of Section 23-A of the Indian Income-tax Act, a number of small people who started in a small way and have by their personal effort and sacrifice built up over a period of years successful businesses have been trying, to my personal knowledge, to dispose of their businesses. I have also come across some people with a fine record of achievement over the last generation or two, who are seriously thinking of migrating from this country before their anticipated fears of the worse coming in future materialise. Whilst fully appreciating the feelings of such people in the prevailing situation in the country, I am definitely of the opinion that this is a defeatist mentality and it can only result in the suicide of the Private Sector in the not very distant future.  From the country's point of view, this fast-diminishing morale amongst that section of the community which has made no mean contribution towards the development of the country's economy, cannot but be the matter of concern to everybody interested in elevating the economic status of India. I suggest, therefore, that the educative campaign should be organized on the following lines :-  There is a widespread lack of understanding as to what the Private Sector means. People interested in propagating the Socialist faith have been mischievously representing the Private Sector as consisting of a few "tall poppies" comprising a few hundred people who today happen to be responsible for the management of some large-scale industries. It is not generally appreciated that the Private Sector consists of all Agriculture, large, small-scale and cottage industries and the whole range of Trade, including import, export, wholesale and retail. Even in the range of industrial activity, according to the estimates recently made by the National Income Committee, the value of net output of "Small Enterprises" in 1950-51 was of the order 910 crores while that of "Factory Establishments" it was around 550 crores. Similarly, the number of workers employed in "Small Enterprises" in 1950-51 was about 11-5 millions as against three million workers in "Factory Establishments."  Throughout the length and breadth of the country there must be millions and millions of people engaged in retail distributive trade, either as individuals or as small partnership firms, who constitute a very important part of the Private Sector. It is, therefore, very necessary that the country at large should be made aware of what constitutes the Private Sector. Much of the excitement and fury that is often displayed on public platforms in deliberate misrepresentation of the Private Sector could be dispelled and the correct perspective established if the meaning of the Private Sector was made known in a sufficiently intelligible form to the country.  The achievements of the Private Sector hitherto in sustaining the daily economic life of the 365 millions and in the gradual development of trade and industry providing employment for an increasing number of people should be presented to the country in graphic and pictorial for the average man and woman in the country can be made to understand the vital necessity of the uninterrupted continuance of these activities with the potential risk involved in disrupting the economic life of the country if the normal functioning of the Private Sector is disturbed by the implementation of the Socialist policy.  The stage has been reached when thinking people in the Private Sector, if they wish to serve the large interests of the country, cannot keep their thoughts and feelings to themselves in the fear of incurring the displeasure of the ruling authorities. The greatest danger, to my mind, today, is that those who have pronounced their faith in the implementation of Socialist policies have all the advantage of propagating their gospel through the Central and Local Legislatures and through the countrywide organization of the majority party. It is an unfortunate tragedy that with few exceptions even a large section of the press is giving the widest prominence to the views of the majority party, if not actually applauding them. The continued and ceaseless propaganda against the sins of omission and commission of the Private Sector is producing an impression, in the absence of any attempt to counter this propaganda, that the whole country has tacitly accepted a policy which will ultimately lead to the complete elimination of the Private Sector. For instance, the foul campaign of vilification against the entire management of Life lnsurance business to bolster up Government's decision to nationalize life lnsurance has created a feeling of distrust for all management of Private Enterprise.  Bereft of all sense of proportion, responsible spokesmen, both of Government and the majority party, have exploited mismanagement by a small number of people as an excuse for a sweeping condemnation of everybody concerned with the management of Life lnsurance in the country. I believe, therefore, that unless the Private. Sector realises the danger of such unfair tactics on the part of its detractors and counter such propaganda by placing facts in their correct perspective before the country, this process of slaughtering the innocents will gather momentum which, in course of time, would be impossible to resist.  It is absolutely imperative that thinking people in the Private Sector should make an organized endeavour to establish amongst all sections the highest standards of integrity and efficiency. However much we may disagree with Government in their policies and actions, everybody engaged in the Private Sector must recognise it as their elementary duty to respect the laws of the country and to pay their dues promptly without any attempt to avoid their obligations. Organized bodies like Chambers of Commerce and various Trade Associations should insist on the observance by their members of rules of conduct which would not be open to challenge. Employers should cultivate relations with their employees in a progressive and liberal manner so as to ensure the identity of interests between the two.  The Private Sector should also be prepared, as far as possible, to co-operate wholeheartedly with Government in all measures are satisfied, intended to promote national interests. The country must be given concrete proofs of the preparedness of the Private Sector to sincerely act in the above mentioned directions if the capacity of the Private Sector to serve the country is to be made generally acceptable to the country.  A concrete plan for the rapid development of the country should be drawn up and presented to the country. This plan should be drawn up on the basis of mixed economy. It is generally accepted that in order to attain a speedy development of the country's economy in all its aspects, every section of the community must play its own part. The most imperative need today is increased production and, therefore the plan must point out how such increased production can be attained in the shortest possible period of time by utilization of the brains, energies, resources and experience of everybody in the country, whether he artificially happens to be placed in the Private or Public Sector.  Mere ideologies and dogmatic assertion of preconceived ideas should not be allowed to stand in the way of the organized utilization of all available talent and resources in the country. If real progress is to be achieved, there is an obvious demarcation of functions between the State and the Private Sector. Apart from the obvious and elementary duty of maintaining peace, order and stability, it is the function of Government to provide the essential prerequisites for an orderly progress. These prerequisites are a quick and countrywide spread of education, essential health services, clearance of slums, opening of the country through district and trunk roads, rail road and river transport, and larger provision of postal, telegraph and radio services.  There is a tremendous field for the State to devote its energies for making our agriculture more profitable and reliable through extension of irrigation facilities, use of better seeds and fertilizers and more modern methods of intensive cultivation. Provision of warehousing, marketing and credit facilities in our rural areas will certainly result in enriching, over a period of years, 70 per cent of our people who depend for their living on agriculture.  It will thus be seen that if the State confines itself for the next fifteen to twenty years to an adequate fulfilment of these functions, it will not only have enough on its hands but will make a substantial contribution towards the economic development of the country. In attempting to extend its scope of activities, the State is not doing justice to its own obligations.  To give a few illustrative experiences, the Postal services are so inadequate that even in a city like Bombay, the General Post Office would not accept more than 500 registered letters per day from any party. Wherever one travels throughout the country, it is heart-rendering sight to see the manner in which third-class passengers are packed like sardines on our railways. Railway transport still continues to be a serious bottleneck, constituting a handicap to the free movement of, goods and causing artificial shortages at different places in the country. The terrific congestion at Docks in important port-towns holds up both receipt and despatch of goods for inordinate length of time.  At an important air-port like Calcutta, three months ago, the Air-off ice was short of luggage tickets and it is reported that recently a Telegraph Office in Bihar ran short of telegraph forms. If the Stale, therefore, concentrates its energies in providing these elementary prerequisites at a speedy rate, it will succeed in creating both an atmosphere and scope for the Private Sector to do its job in bringing about a rapid economic development. It is undoubtedly true that fiscal measures of recent years have considerably denuded the Private Sector of its financial resources and the State, therefore, will have to make available adequate finance on suitable terms to safe-guard the interests of the general tax-payer. Otherwise, with the background of experience and trained personnel, the Private Sector should prove capable of undertaking a large-scale industrial development of the country.  However limited the scope left to the Private Sector and the uncertainty about its continuance, whatever be the handicaps and disabilities imposed by fiscal and other measures, the Private Sector must still be prepared to energetically continue its own allotted task, and I have no doubt that it will satisfy the country of its capacity to serve the country in future as it has done in the past.  In conclusion, I only wish to sound a note of warning that in a country like ours, with one dominant political party and with no effective organized opposition, the thin borderline between democracy and totalitarianism can soon be crossed. There is already evidence of totalitarian thinking at least in the economic field and  unless public opinion becomes more vigilant, we may lose our most cherished possessions, viz., the freedom to think and the freedom to criticise.  _Previous musing: [MAKING CAPITAL OUT OF CONSUMER GOODS](https://indianliberals.in/content/making-capital-out-of-consumer-goods/)_ --- ## [Musing] Free Enterprise is Economic Democracy URL: https://indianliberals.in/musings/free-enterprise-is-economic-democracy/ ### Body Free enterprise works because, like democracy, it gives real power to the people. Indeed it can be described as economic democracy. It limits the power of government, by maximizing the power of the people. _On her visit to India in 1994, the apostle of free-market gospel Margaret Thatcher revealed her take on implications of economic freedom for prosperity. In a keynote speech delivered in Bombay, she stressed upon the necessity of economic freedom; the need for fiscal prudence; the limited role of the state; and move towards privatisation. While extolling the Indian peculiarity of having both democracy and capitalism, she also pointed out the tension between the two and its implications for India’s economic trajectory ahead._ _Below is the full keynote speech, published by the Forum of Free Enterprises in 1995 in the booklet form_ – Economic freedom is real freedom. Just as coercion exercised on economic grounds is no less real coercion. Free enterprise works because, like democracy, it gives real power to the people. Indeed it can be described as economic democracy. It limits the power of government, by maximizing the power of the people. It removes industry and management from the hands of the state by selling off companies and business to those who will buy them, mostly through the stock market. Free enterprise capitalism is a necessary – though not a sufficient – condition for political democracy itself. Perhaps we in business have been too slow to point out that capitalism is therefore not only about material things, it is about the human spirit and its creativity. In seeking to liberate people from poverty and servitude it is the business ethic in action which is the cutting edge of progress. **The Role of the State** The role of the State should be limited but strong to do those things which only governments can do. First government should be strong to keep the finances and the currency sound. We need to preach and practice the wisdom of thrift as a virtue in itself, and of high savings as necessary for high investment and that public spending must be strictly limited. This is common sense. Every businessman and housewife knows that they have to live within their income. The laws of arithmetic are not suspended merely because you are working in billions or because you are in government. But these things do not come naturally to all politicians. Interest groups are very strong and vociferous, particularly in the public sector, and there is a constant temptation to increase public spending to appease them or to postpone awkward decisions. **Privatising – Transforming Britain** A system like state control which is fundamentally bad because it denies people the power to choose and the opportunity to bear responsibility for their own actions, can’t be made good merely because it is run by ‘clever’ people who make the arrogant assertion that they ‘know best’ and that they are serving the ‘public interest’ – an interest which of course is determined by them. Privatisation shrinks the powers of the state and free enterprise enlarges the power of the people. **Asia – Great Expectations** The world has never seen such a rapid economic expansion as it is witnessing today. The age of automation has been even more radical than the age of mechanization. ‘Smart’ machines now transfer technology instantaneously from one country to another. Development which used to take years can be achieved in months. Hence the economic miracles in the countries of Asia, both large and small. A hurricane of change has swept across Asia, carrying millions out of poverty and bringing new hope. The people of the Asia Pacific are out-stripping much of the rest of the world in growth, investment, new technology and trade. Today the Asia Pacific region has the highest growth rates in the world in spite of the world recession. **India – Looking Ahead** What does all this mean for India, for her place in the wider world? Your influence and example are crucial to the future. While Russia has democracy but struggles for economic reform, China has economic reform but resists democracy. But India has the advantages of both economic reform and an established democracy. In some ways this may make reform even more difficult as every move is publicly debated and sometimes the arguments are distorted. Nevertheless, once the decisions are taken they are all the stronger because of the openness of parliamentary democracy. Also you have large, enterprising middle-class, with an enviable capacity to exploit the advance of science and to attract the requisite investment. Add to that your’ international trading links and it would seem from the outside looking in, that your success is assured. _The original booklet and the full text of the speech could be accessed _[_here_](http://indianliberals.in/~_admin/pdflanguage?id=117599251.pdf)_._ _[IndianLiberals.in](http://indianliberals.in/index)is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context._ [Read more SO Musings](https://spontaneousorder.in/category/so-musings/) --- ## [Musing] FREE MARKET ECONOMY: Key to Economic Progress and Freedoms URL: https://indianliberals.in/musings/free-market-economy/ ### Body Originally published by the [Forum of Free Enterprise,](https://indianliberals.in/forum-of-free-enterprise/free-market-economy-key-to-economic-progress-and-freedoms-by-ma-rangoonwala-1982.pdf) the following text was an address by M. A. Rangoonwala, the past President of the International Chamber of Commerce, delivered as the Chief Guest on January 12, 1982, at the function held to celebrate the Forum's Silver Jubilee. It is a great honour to be speaking at the Silver Jubilee celebrations of this august institution. I offer you my deepfelt thanks for inviting me. And I offer you my sincere congratulations and those of the world business community represented in the International Chamber of Commerce, on your first, immensely successful, 25 years. May you go from strength to strength during the course of your next quarter century!  The Forum was, of course, founded by a very great man, the late A. D. Shroff. And the high standards he set have been admirably maintained by the eminent persons who have followed him as President- the late Murarji Vaidya, J. H. Doshi, and your present distinguished leader, N. A. Palkhivala, who enjoys the profound respect not only of his fellow countrymen but of informed people and decision-makers throughout the whole world. His annual lectures on the Union Budget must rank as one of the most remarkable phenomena of the modern age and I'm sure I do not need to remind you how fortunate the Forum is to have such a celebrated statesman in its Presidential chair.  I have been greatly impressed by the work this Forum accomplishes in this huge country. May I suggest that one of your objectives for your next 25 years should be to share your ideas and methods - your recipe for success, as it were - with as many other countries as possible. So very many of them desperately need their own Forums of Free Enterprise. Could not India take the lead in encouraging their establishment elsewhere? The ICC would be more than willing to help with such an initiative. Your shining example would be a major asset in inducing others to pursue the same path towards a better future for a larger part of mankind.  It is with some hesitation that I rise to address you today - you the descendants of those great entrepreneurs which this sub-continent produced. They were far-sighted individuals who both believed in and practised free enterprise. They ventured all over the world, men of no formal education or technical knowhow, but honest and hard-working and with a firm and confident faith in the free economy system. Is it not presumptuous of me to lecture the sons and grandsons of such masters of entrepreneurship on the virtues of free enterprise? Or is it perhaps salutary to remind ourselves of those virtues in an age which so takes freedom for granted that it is being whittled away under our noses, diluting the blood of entrepreneurship in our veins without us fully realising it?  Any individual who did business at the beginning of this century would be shocked by today's world if he had not gradually got used to it over the passage of time - as many of us have. He would be shocked not so much by the oneness of the world and the closeness of different countries forged by the revolution in communications and transport- advances of which humanity is justifiably proud. Rather he would be shocked by the degree to which business is restricted, hampered and fenced in by government regulations and controls. In this sense, distances are far greater than before. You may be able technically to finalise a deal over the telephone or by telex in a few short minutes or hours - and may even be able to rush supplies to wherever they are needed with what must effectively be considered no delay at all. Bu·t and it is a very important 'but' - these technical gains in speed are frequently more than offset by the tediously protracted processes of completing official formalities and seeking bureaucratic permissions and approvals. In this respect, we live in many different worlds which relate with each other only over and around considerable man-made obstacles. As has been the case throughout history, the unifying forces of commerce are frustrated by the divisive forces of politics.  Barriers to trade and investment between countries, though regrettable by the absolute standards of the one-world ideologue and frequently harmful to the cause of maximising global economic efficiency, are not alone and of themselves a major catastrophe. What does the real damage is that government controls and restrictions extend deep and wide into our national economies, thwarting and distorting competition and the free enterprise system on a massive scale.  The fundamental raison d'etre of the free enterprise system is that it harnesses for progress the energy and drive of individuals and their yearning for self-betterment. It achieves this through a competitive process which encourages people to work hard and efficiently in producing what consumers wish to buy at minimum cost. Remove competition, and private enterprise stands defenceless. Profit ceases to have either economic significance or moral justification. If we allow controls to proliferate which strangulate both competition and individual initiative, why do we need private enterprise at all?  In my own mind, I have no doubt whatsoever that the free market economy is the key to all freedoms. In fact, the market and freedom are really synonymous terms. We should never forget that the only thing governments can control is people. One yard of textile does not care what its price is. But people care: the people who manufacture the textile, the wholesalers who sell to the retailers, and the retailers who sell to the consumers. And that is all controls can ever mean: 'people' control. It is never prices or goods and services but only people who are controlled, subsidised or supported by government. It is this that so many citizens fail to see or choose to ignore.  The expression "control" frequently conjures up an image of government action to help people. But when we give it its correct descriptive title of "people control", quite another image comes to mind. For obviously, when government controls people it necessarily deprives them of some freedom. Economic controls are automatically destructive of the market economy in which people voluntarily buy and sell on mutually acceptable terms. For controls involve compelling people to act in ways they would not necessarily choose voluntarily.  In many developing countries where there is a conscious striving for economic progress, almost every policy of government has come to be justified as necessary for development and the success of the PLAN. Yet there is scarcely any yardstick by which such claims can be measured and evaluated. This would be a difficult enough exercise even if we had access to the sort of sophisticated statistics and tools of analysis available in the developed countries. Given the notorious unreliability of total absence of data in the developing countries, it is downright impossible. So the policies and programmes campaigned for by vocal sections of our population can all be justified as promoting development without fear that their actual impact might be subject to critical measurement.  I am not at all against the idea of government publishing its view on future developments in a country in the form of an overall development plan for the general guidance of its own agencies and the private sector.. But that is all it should be. Unfortunately, as far as the private sector is concerned, our experience both now and in the past is just the contrary. I once engaged in a discussion with a planner in a high official position who Clearly believed that, without his forecasts and guidance, his country's economy would be "flying blind". To him, as to all planners, the world of private enterprise was one in which everybody works at cross-purpose and takes decisions solely in his "private" interest rather than in the wider "public" interest – whatever that may be.   Planning always involves compulsion even when, as it usually is, dressed up in a variety of guises to misguide its victims. Government planners will, of course, try to persuade people that The Plan has been drawn up for their own good and that the only persons who will be subject to coercion are those whose activities are "not'' in the public ''interest". They will claim, in their new-fangled phraseology, that their plans are not "imperative" but merely "indicative". They will make a great public parade of democracy, freedom and co-operation by "consulting all groups in society" — "business", "industry", "workers", and even "consumers" — to seek their help in drawing up The Plan and their acceptance of its specific goals or targets.   But, of course, if the planners really succeeded in accommodating the wishes of everyone, if The Plan allowed everyone to arrange their economic activities in the manner they intended to do anyway, then it would be quite pointless and useless exercise, a complete waste of time and effort. The Plan is only meaningful if it compels individuals to produce and consume different items — or different quantities of those items — than they would have done voluntarily given the freedom to choose in unfettered markets. If The Plan is to be meaningful, it must in the nature of things resort to compulsion. Two excuses are invariably offered for the inevitable coercion. One is that the free market produces the "wrong" goods and only government planning and direction can assure the production of the "right" ones — with the bureaucracy, of course, possessing a monopoly of mystical powers to determine what is right and what is wrong. The second excuse is that the free market does not produce enough goods and that government planning is needed to speed up the production process. In actual practice, of course, government planning does not so much speed it up as impede the progress.   I want to dwell a little on this strangely powerful notion that government direction and coercion can in some magical way increase production above the level achievable by individual citizens applying their own enterprise and taking their own decisions in a regime of economic freedom. It seems to me self-evident that when people are free, welfare tends to be maximised — or, at least, optimised. This is because in a system of free markets and private enterprise everybody's reward tends to equal the value of what he produces. What he gets for his production (assuming he is allowed to keep it) is what it is worth in the market — the value placed on it by voluntary, uncoerced buyers. If he wants to double his income next year, he is free to try — and may succeed if he is able to double his production over the year, or if the market worth of his production rises. If he is content with the income he has - or if he feels he can only increase it by excessive effort or risk, then he is under pressure to raise his output. In a free market economy everyone is at liberty to maximise his own satisfaction, whether this consists of more leisure or more goods.  There is among planners a profound mystical belief in the power of words. They declare, for example, that they are not content with an annual growth rate of. a .mere 2.8% and stipulate that henceforth it shall be 5%. And having thus stipulated, they assume that that in itself has propelled the economy half-way to their new target. I am not being frivolous. Such must be their assumption for, otherwise, it would be impossible to explain the deep earnestness with which they argue among themselves whether the growth rate ought to be 4 or 5 or 6%. The only thing they always agree upon is that it ought to be higher than whatever it actually is.  But why do they assume that setting their magic targets will increase the rate of production? By what processes do they imagine that the behaviour of millions of individual citizens will suddenly change to ensure that the national economy as a whole hits their targets? Is the man who is already making 50,000 rupees a year to be coerced into working for an income of 52,000 next year? Is the man who is making only 5,000 rupees a year to be forbidden to earn more than 2,500 next year? If not, what is gained by setting a specific annual growth rate as a government target? Why not just permit or encourage everybody to do his best and make his own decisions and let the average growth be whatever it turns out to be. Rapid economic growth is a by-product of good government policy; it cannot be a government policy in itself.  The effective route to rapid economic growth - assuming this is the aim - is to encourage production, saving, investment, and employment. And the way to do this is to maintain a free market economy and a stable currency freely convertible into others at a rate determined by the market. It is to respect profits - which will in turn promote both investment and jobs. It is to refrain from oppressive taxation which drives away funds for productive investment. It is to refrain from wage controls and cumbersome labour legislation which destroy jobs. It is to permit interest rates to find their own levels and thus maximise saving and investment.  The way to slow down economic growth is, of course, precisely the opposite of this. It is to discourage production, saving, investment and employment by incessant government interventions, controls, threats, harassment  and exorbitant taxation. It is to frown upon profits, to repeatedly declare them excessive, to control prices by law or intimidation, to hold interest rates down artificially, to bestow exceptional privileges and legal immunities on labour unions so that their demands become chronically excessive and threaten chronic unemployment - and then to try to offset the ill-effects of all these policies by higher government spending and consequent deficits which have to be financed by inflationary recourse to the currency printing presses.  All persons of goodwill share the same goal of raising the living standards of mankind. The differences – about which men fight, including men of goodwill – revolve around the methods to achieve the goal. Let me briefly compare those methods. The free market method permits individuals to use their own money, skills and hardwork to back their own economic decisions in the market place. They reap the rewards of good judgement and suffer the consequences of poor judgement. Under this system, no one buys or sells or participates unless his judgement tells him to.  The socialist or centralised method means that government compels individual citizens against their will and better judgement to contribute their money or time to implement its ideas and schemes. There is no sure way to determine whether the official decisions are commercially sound because the only true economic measurement there is – the test of the market – is forbidden.  And there is a third method now popular in several developing countries – a method which I call the "compromising way" and which stems from the delusion that a middle path exists between the market method on one side and the socialist method on the other. In my book, this middle path is the socialist method. The fact that government may permit a great deal of private ownership and some private initiative in partnership with itself in no way means that government is not fully in charge. When you think about it, why should government bother to nationalise productive assets or need to compel people to act in this way or that if they cooperate voluntarily and submissively? Stalin would never have murdered any one if he had been sure that everyone would willingly have done exactly as he wanted.  The advocate of the third method may sincerely and indignantly deny that his is the government way. He will claim to favour only certain specified controls by government. But, in so doing, he opens the way for one control after another because he cannot put his finger on any generally accepted principle defining the limits of government activity, and thus he has no logically defensible ground for protesting against an indefinite number of additional controls. This is how - even though they may be quite innocently unaware of the ultimate consequences of their acts - the proponents of the third method are paving the way for socialism and coercion.  I accept that, if we are forbidden a free market economy, then a half-free one is better than none at all. But I hope we all agree that a half-free one is not only very far from ideal but is also invariably unstable in the sense that the coercive part is inherently expansionist. And that is bad for business confidence, bad for investment, bad for jobs and bad for economic growth and development.  Let me try to pinpoint some of the specific consequences of the socialist method which has been adopted to a greater or lesser degree in practically all countries of the world today. I shall, however, gear my remarks towards the developing countries and towards the impact on the business sector.  Does anyone seriously believe that government intervention in the economy nowadays is merely to protect the weak or to redress the inequalities supposedly produced by the free enterprise system? I hope not. For, in reality, the intervention goes far beyond that. The truly disturbing aspect today is the intervention – large and growing – that takes place purely and simply to placate or curry favour with organised, vocal and politically powerful groups in society irrespective of their economic condition.  Out of this arises much of the wastage of human and other economic resources which holds production below its potenti.al capacity. Because the assets and dynamism of the free enterprise system are suppressed, distorted and prevented from translating their full capability into actual output of goods and services, poverty and misery persist and a large part of humanity lives in constant fear of unemployment and starvation. Glaring examples of this can be found in the developing countries of Asia, Africa and Latin America. And I would like to highlight some of the policies pursued in these regions in the name of industrialisation and economic development but which have the perverse effect of perpetuating poverty and backwardness. Not that I believe their poverty is entirely of their own doing, I may add. The developed world is far from blameless in pursuing policies - particularly on the trade front - which inhibit the progress of poorer countries and set the additional obstacles to overcome which they could well do without. But let us look at ourselves for the moment since prosperity - like charity begins at home.  _Previous musing: [HOMI MODY: FREE ENTERPRISE & FOREIGN EXCHANGE](https://indianliberals.in/content/homi-mody-free-enterprise-foreign-exchange/)_ --- ## [Musing] Freedom of Self-Expression URL: https://indianliberals.in/musings/freedom-of-self-expression/ ### Body _The following is an article written by T.V. Subba Rao and  published in the January 1954 issue of the Freedom First Magazine. The author talks about freedom, restraint and the false notions of prudery and decency. The article emphasizes the importance of free expression, a topic relevant for all ages and all times. _The most potent force that has influenced the conduct of man both in his individual and social aspect is love of freedom. Since absolute freedom can only spell anarchy leading to its entire suppression, man has had to submit to restraint to preserve at least a fair measure of it. All the struggles of society are to be attributed to the disturbance of the balance of these forces. In their perfect harmonisation lies the maximum amount of liberty consistent with order and security. Unqualified freedom is unthinkable in practical life. When the spirit of radicalism grows ever-strong there is always- a reaction in favour of conservatism. Again, when in any sphere of human activity traditionalism is found to express the creative urge, the desire for self-expression bursts forth from the dead weiqht of oppressive incrustations and shines resplendent in all its glory. Thus does the Time-spirit fulfil itself in the progress towards a higher perfection. The greatest masters of Religion and Art have been rebels against degenerate obscurantism. The teaching of the Buddha was a protest against rituals and ceremonies that were bereft of humanity. Shakespeare broke the conventions of his age to give the world the finest verse, dramatic form and characterisation which to this day remain unsurpassed. The great sculptors and painters of the west were equally heroic in the freedom of choice of form and colour which have stood the test of centuries, Kalidasa was a great romanticist who pleaded with his audiences not to reject a work merely because it was new. The enrichment of the world of culture has been more the contribution of the unbound spirit than of traditionalism. In the realm of Carnatic music Tyagaraja stands as thc supreme embodiment of the spirit of freedom and self-expression. In his compositions are to be found the marvellous elements of beauty undreamt of in the preceding ages, The progressive development of his contribution is well based on the solid foundation of the great traditions which reach back to the Vedic ages. His art achieves the finest reconciliation between the forces of liberty and restraint. The Kirtana which is the only type of composition he handled-for he could not conceive of a composition not dedicated directly or indirectly to God-becomes so elastic in his hands that every type of composition like the Gita, Varna, Pada, Javali etc., is presented under the apparent form of Kirtana. It was his genius that transformed the recitative music of compositions into _Manodharma Sangita_ with all the freedom and beauty of improvisation. The infusion of Sangatis into the Kirtana was a revolution which though now familiar to us, was yet a phenomenon which took his contemporaries by storm. It was perhaps the greatest event in the history of Carnatic Sangita. The freedom of his creative spirit finds most emphatic expression in the new modes aud melodies of his invention. They possess ineffable charm and have served vastly to enrich our heritage. Tyagaraja with the possible exception of Purandaradasa is the only composer who his embodied in his songs every variety of human experience. Not content with praise and invocation of the Deity, he not only presents the essence of the great scriptures but exhorts mankind to live a life of truth and beauty, of love and goodness instead of losing the soul in doctrinarian disputation. Composer as he was, he yet played the heroic role of the poet, philosopher and prophet and employed his Kirtanas to convey the most healing message of love and music as easy means of salvation. His spirit of reform was undaunted by the conventions of snobbery. The aesthetic excellence in them is so well suffused with a high moral that to enjoy them is to derive inspiration for a noble life. It is most remarkable, however that, Tyagaraja’s love of free self expression has its roots in hoary tradition. He pays the sincerest tribute of homage to the great Purvacharyas, divine, semi-divine or human. In the Arabhi Pancharatna one of the attri-butes he gives to Krishna is that he was "Sangita Sampradayakum." If the composer considered that even the Lord was not exempt from respect for tradition, although He was the fountain of all Knowledge, it may well be imagined how much greater was the need for men to revere the time-honoured usage. Numerous are his pieces which stress the benefit to be derived from the counsels of wise and sage-like men. Enduku Peddala, Buddhiradu, Guruleka and Vidulaku are some of the songs that voice his reverence for the elders. Tyagaraia's career is a shining example of the heroic spirit, of the creative urge sobered by the ripe experience of a rich tradition. In him was the perfect reconciliation of the opposite elements of liberty and restraint. It is perhaps that great form of musical beauty which we call the Raga, exclusive creation of the genius of Indian Music that reveals the co-existence of vast liberty of improvisation by creating talent with numerous restraints that maintain the individuality, form and complexion of the melody. It affords unlimited scope for self-expression. Yet, it is governed by the laws relative to the application of scales, notes, tones, graces, and traditional usages and rhythm that serve to maintain the unmistakable identity of the mode. The alap is the highest form of self-expression. To super - musicians, the alap has attractions which compositions do not possess. In the Raga the freedom of creation reaches the utmost limit in art. The spirit of freedom is apt to suffer restraints from sources alien to the art itself. The interference may come from false notions of prudery and decency as well as from politics, race, community and language. Time was when the Padas of Kshetragna, Astapadis of Jayadeva and Javalis of certain composers were banned as tending to debase morals. Uninformed public opinion condemned Bharatnatya as obscene and voluptuous. Happily it has, thanks to the efforts and propaganda of institutions like the Music Academy, now veered round to a just appreciation of an art which is both drisya and sravya. Art is universal and appeals to the heart of man whatever his race, colour or tongue. Censorship is a restraint upon free expression. If it is necessary evil in any stage of society, the office must be held only by persons of high taste and discernment. --- ## [Musing] Freedom and Economic Freedom - Bibek Debroy, 2008 URL: https://indianliberals.in/musings/freedom-and-economic-freedom-bibek-debroy-2008/ ### Body _The following musing is taken from the “_**_Handbook of Transformation to Market Economy”_**_ written by _**_Bibek Debroy_**_ and published by the __the_**_ Liberal Institute of the Friedrich Naumann Foundation _**_in 2008. The text reproduced below is an excerpt from its second chapter titled “_**_Freedom and Economic Freedom_**_”. _ _In this chapter, Debroy details the conflict between negative and positive rights. He claims that problems arise when the state, entrusted to safeguard negative rights, begins catering for positive ones such as the right to education. Besides highlighting sources of conflict between modern-day planners and liberals, he also warns against the dangers of enforcing positive rights via centralized planning that threatens individual liberty._ _**Bibek Debroy** is an Indian economist, serving as the chairman of the Economic Advisory Council to the Prime Minister of India. He is the author of several books, academic papers and popular articles and is a member of the Mont Pelerin Society. _ As human beings we ought to be assured of a minimum of core human rights. For example, these rights may cover security (protection against crime), liberty (belief, religion, association, assembling, movement), politics, due process (protection against abuses of the legal system), equality, welfare and so on. The existence of a state implies that some of these individual rights are going to be constrained, in the name of a greater public good. But which of these rights are inalienable or irrevocable, in the sense that they cannot be taken away by the state? Human rights that are called negative rights clearly belong to this category. The use of the expression “negative” implies that the state, or even a private body, cannot take action to remove these rights. Examples are right to life and individual security, freedom from slavery, equality before the law, due process followed by law, freedom of movement, freedom of speech, freedom of religion, freedom of assembly and even the right to bear arms. These core human rights represent the essence of freedom and have been captured in legislation, national as well as international. The Universal Declaration of Human Rights in 1948 is an example of such international legislation, although it is not quite a legally binding instrument. This declaration covers human, civil, economic and social rights. And such notions of negative rights are perfectly in consonance with what one understands by freedom and economic freedom.  The problem arises when one moves from negative rights to positive rights, also set out in the Universal Declaration of Human Rights. These rights are supposedly rights that the state must protect and provide. Examples are right to education, right to health-care and right to a livelihood. In the 30 Articles that constitute the Universal Declaration, these positive or economic rights occur towards the end. For example, Article 22 states, "Everyone, as a member of society, has the right to social security and is entitled to realization, through national effort and international cooperation and in accordance with the organization and resources of each state, of the economic, social and cultural rights indispensable for his dignity and the free development of his personality." Article 24 adds. "Everyone has the right to rest - and leisure, including reasonable limitation of working hours and periodic holidays with pay." Finally, in Article 26(1) we have, "Everyone has the right to education. Education shall be free, at least in the elementary and fundamental stages. Elementary education shall be compulsory." Many people wouldn't regard these positive rights as core human rights that should be protected, unlike the negative ones. Indeed, these positive rights go against the notion of economic freedom, since their delivery adversely affects the freedom of others.  Be that as it may, there can be several different facets of freedom - civil, political and economic. In 1944, **Friedrich Hayek** wrote a very influential book titled “[The Road to Serfdom](https://en.wikipedia.org/wiki/The_Road_to_Serfdom).” This book not only represents the essence of what is now called economic freedom, it also makes the important distinction between negative human rights (the core) and positive human rights (the undesirable and the noncore). “Planning' owes its popularity largely to the fact that everybody desires, of course, that we should handle our common problems with as much foresight as possible. The dispute between the modern planners and the liberals is not on whether we ought to employ systematic thinking in planning our affairs. It is a dispute about what is the best way of doing so. The question is whether we should create conditions under which the knowledge and initiative of individuals are given the best scope so that they can plan most successfully; or whether we should direct and organize all economic activities according to a 'blueprint', that is, 'consciously direct the resources of society to conform to the planners' particular views of who should have what .[...] The successful use of competition does not preclude some types of government interference. For instance, to limit working hours to require certain sanitary arrangements, to provide an extensive system of social services is fully compatible with the preservation of competition."Or, "But there are two kinds of security: the certainty of a given minimum of sustenance for all and the security of a given standard of life, of the relative position which one person or group enjoys compared with others. There is no reason why, in a society which has reached the general level of wealth ours has, the first kind of security should not be guaranteed to all without endangering general freedom; that is: some minimum of food, shelter and clothing, sufficient to preserve health. Nor is there any reason why the state should not help to organize a comprehensive system of social insurance in providing for those common hazards of life against which few can make adequate provision. It is planning for security of the second kind which has such an insidious effect on liberty. It is planning designed to protect individuals or groups against diminutions of their incomes.” Read the complete handbook [here](https://indianliberals.in/other-publications/handbook-for-transformation-to-market-economy.pdf). type=content&p=8587). Needs editorial review._ --- ## [Musing] FUNDAMENTAL RIGHT TO PROPERTY BY V. M. TARKUNDE URL: https://indianliberals.in/musings/fundamental-right-to-property-by-v-m-tarkunde/ ### Body V.M Tarkunde’s “Fundamental Right to Property” explains how the right to property is fundamental to a human being to enjoy other fundamental rights. He explains the provisions meant to protect the right to property and their limitations. He discusses various arguments on both sides of the importance of this right for an individual. He raises questions on the efficiency of the amendment removing it as a fundamental right in reducing economic disparities and ensuring social justice. This was taken from an editorial published in 1971 issue of “Radical Humanist” by Forum of Free Enterprise. V.M. Tarkunde was a former judge of the Bombay High Court. You can read the complete unabridged version below. --- ## [Musing] Fundamental Rights: Our Protection Against Tyranny URL: https://indianliberals.in/musings/fundamental-rights-protection-against-tyranny/ ### Body In a 1967 Judgement, the Supreme Court declared that it is not within the powers of the Parliament to take away Fundamental Rights under Part III of the Constitution. In April 1967, MP (Parja Party) Nath Pai proposed a Bill securing such powers for the Parliament. In September, MP (Independent) Sriraj Meghrajji proposed a Bill (considered an amendment to Pai's Bill) provided that any amendment of the Fundamental Rights must be the subject of a Referendum. The following text covers Sriraj Meghrajji's justification for proposing a Bill that aims to amend Nath Pai's Bill. The text was originally published by the [Swatantra Party.](https://indianliberals.in/content/fundamental-rights/)Mr. Speaker, I share Shri Nath Pai's faith in the people of India and it is for this very reason that my amendment provides for a Referendum.  Before I go to that, I should like to make one or two observations on the points made by my learned friend, Shri N. C. Chatterjee. He says that article 368 on the amendment of the Constitution, has the words: "the Constitution shall stand amended". (Meaning that every part of it is amendable.) I may point out that actually the words are: 'the Constitution shall stand amended in accordance with the terms of the Bill." Elsewhere in the Constitution, the Constitution provides what the terms of the Bill may be or what they may not be. As to Constitutions being vital, living, dynamic instruments, nobody has ever denied it. When Shri Nehru said that he had not made the Constitution 'so rigid', he meant surely that he had made it 'partly rigid', that there was some rigidity about it. A house can be repaired and renovated but in repairing or renovating a house one does not change the foundations of the house. That is the point. I hope hon. Members will bear it in mind.  Sir, the Constitution, the Polity of India, stands at a fork in the road. The passage of the Bill presently before this House. . . or its rejection at the hands of Parliament. . . will determine for all time the future of democracy in this country. The Constitution of a country is its supreme fundamental law. But a political or statutory Constitution does not embody and exhaust the whole of the fundamental social law or Constitution of a people or society. The political Constitution, whether written or unwritten, is but a part of the total social constitution. The latter, which governs all social and organic relationships, is a product of long evolution, the result of generations of social experience and wisdom. It includes in it such elementary things as the respect for parental authority. We do not include these things in a written Constitution. But our not doing so, does not invalidate them.  A written Constitution simply codifies a part of the fundamental constitution. Its primary concern is the superstructure of society, the body politic, rather than its foundations. But some written Constitutions go further than this. They touch the foundations of society. Ours is one. Not all Constitutions embody a declaration of Fundamental Rights. But this does not mean that those societies do not possess Fundamental Rights or that they are not recognised and enforced by their legislatures and their judiciaries.  **Why Fundamental Rights form a Separate 'Chapter'** The wise and farseeing framers of the Constitution of India saw fit to delve into the foundations of society, . . . to pick out what they thought was essential (Hear, Hear);. . . and they included a statement of Fundamental Rights in our Constitution. The object of their doing so was to give these rights preeminence;. . . to invest them with an aura of sanctity;. . . to guide, curb, and inhibit the future rulers of society;. . and to make these rights-whether of majorities, minorities, or individuals, - justiciable in the courts of law. These natural rights belong to the people and are a part of the fundamental constitution of any civilized society. The object of selecting these particular rights and codifying them was not to expose them to the power of passing parliaments but to safeguard them from legislative interference (Hear, Hear).  Otherwise, what was the object of codifying them at all? Since most of these rights are natural rights in any democratic society, the future legislatures might have been trusted to respect them.. . as the judiciary was bound to enforce them. It is, therefore, clear that the object was to place these Fundamental Rights beyond the reach of the ordinary legislative process. This object is fully revealed and categorically stated in Article 13,. . .the fateful article, of the Constitution. As I have said, the Constitution is not exhaustive Neither is the Part on Fundamental Rights. If I may give a homely example,. . . the love of a mother for her child is something natural and fundamental. It does not find a place in Part 111. But if it did, it would not mean that it would then come within the reach of Parliament and that it could be snatched away by a two-thirds majority or even by unanimity. Nor do I believe that any judge worth the name would fail to recognize, uphold, and enforce such a fundamental thing in society, whatever the consequences (Interruption).  Shri Nath Pai: Why are you interrupting? Mr Speaker, I want to listen to him carefully. How can we hear when members keep np running dialogues? I want to listen to this speech.  Mr. Speaker: Order please.  **Historic Reasons ** Shri Sriraj Meghrajji: The historic reasons for including a statement of Fundamental Rights in our Constitution has been most cogently dealt with by Shri Justice Hidayatullah (as he was then) in the Supreme Court judgement in the Golaknath case - an epochal judgement which I hope will be read by every lover of freedom and democracy in India.  I may quote here from the 1928 Report, on this subject, by Pandit Motilal Nehru: "It is obvious", he said, "that our first care should be to have our Fundamental Rights guaranteed in a manner which will not permit of their withdrawal under any circumstances." Almost 20 years later. . . this high, once distant goal as at length achieved. On 30th April 1947, Pandit Jawaharlal Nehru, proposing the Interim Report on Fundamental Rights, for adoption by the Constituent Assembly, said: "A fundamental right should be looked upon, not from the point of view of any particular difficulty of the moment, but as something that you want to make permanent in the Constitution."  Note the distinction between things permanent and things that can be amended.  **Justice Hidayatullah ** Now, what are the things permanent which find a place in the Third Part of our Constitution? I cannot do better than quote Shri Justice Hidayatullah. Summing up the judgment in the Golaknath case, he said:  "Our liberal Constitution has given to the individual all that he should have - freedom of speech, of association, of assembly, of religion, of motion and locomotion, of property and trade and profession. In addition, it has made the State incapable of abridging, or taking away, these rights to the extent guaranteed, and has itself shown how far the enjoyment of those rights can be curtailed. It has given a guaranteed right to the person affected to move the court. The guarantee is worthless if the rights are capable of being taken away."  These are the rights of the people, given by the people, unto themselves in their Constituent Assembly. Who, hon. Members, shall take them away?   **The Late Dr. B. R. Ambedkar**  Let us turn to the avowed intentions of the Constituent Assembly itself. The Hon'ble Dr. B. R. Ambedkar, while explaining that the procedure for amending the Constitution was simple, expounded on the necessity of curbing the powers of Parliament. He said:  "In considering the Articles of the Constitution, it (the Constituent Assembly) has no eye on getting through a particular measure. The future Parliament if it met as a Constituent Assembly, its members will be acting as partisans seeking to cany amendments to the Constitution to facilitate the passing of party measures which they have failed to get through Parliament by reason of some article of the Constitution which has acted as an obstacle in their way. Parliament will have an axe to grind: while the Constituent Assembly has none." (Constituent Assembly, 4 November 1948.)  Shri Ranga: This is the distinction which Shri N. C Chatterjee has forgotten-conveniently.  Shri Sriraj Meghrajji: I beg to draw the pointed attention of hon. Members to the distinction made between the nature and spirit of a Constituent Assembly and that of a Parliament. This is a distinction well-known and repeatedly emphasised. The purpose of the framers of our Constitution was that the distinction must endure as long as the Constitution itself. I submit that the effect of this Bill. . . will be to arrogate the functions of a Constituent Assembly to the existing legislatures of the day.  **The Power to Amend**  This idea, of thus empowering the existing legislative bodies, had not escaped the broad vision of the Founding Fathers of the Constitution. They were not unaware that the legislative bodies of the land would be elected bodies,. . . composed of the chosen representatives of the people. They did reserve certain amending powers to these bodies collectively. But they, in their corporate wisdom, . . . acting under the mandate of the whole people, . . . did not bequeath to Parliament or to the legislative bodies collectively, . . . the power of abridging or abrogating Fundamental Rights. This was made explicit by Dr. Ambedkar during the discussions on Draft Article 304 (now Article 368). He said:  "If the future Parliament wishes to amend any particular article, which is not mentioned in Part 111, or Article 304, all that is necessary for them is to have two-thirds majority. Then they can amend it." (Constituent Assembly, 17 September 1949.) Had there been any intention to vest the power collectively in the existing Parliament and State Legislatures..  'Part III' would have been included in the proviso to this Article, - as is now being sought to be done. Instead, the Fundamental Rights were placed beyond the reach of amendment by the legislative process. But let it be noted that the articles in Part III already do contain built-in provisions for the legitimate curtailing of Fundamental Rights.  Sir, the life and health of democracy depend not so much on written Constitutions as on traditions and the enjoyment of freedoms such that are embodied as ‘Fundamental Rights’ in our Constitution. The Supreme Court, after deliberating the Constitution, has concluded that the State is "incapable of abridging or taking away these rights to the extent guaranteed". In other words, the people may perhaps yield up a right of their own volition, but even the supreme legislature, or all the legislatures put together, do not have the power of depriving them of it without their consent (Hear, Hear). . . That is to say, so long as national supremacy and the springs of power are conceived and deemed to reside in the people, and so long as India has a parliamentary democracy and not a parliamentary autocracy (Hear, Hear). Parliamentary supremacy is only safe where the democratic tradition is deep - ingrained and unassailable. Therefore, comparisons with other countries,-comparisons which ignore the governing factors and circumstances of their whole polity and society, - are not merely naive and irrelevant, but highly dangerous.  Sir, certain Fundamental Rights may be inscribed in the Constitution, but they transcend the Constitution. They are now, if they were not before, part and parcel of the fundamental constitution and of our self-given way of life. They are inherent in the people. They are their birthright (Hear, Hear). If they are to survive, without danger from the variable five yearly parliamentary preponderances and pre-dispositions, - indeed from the mid-term fluctuations of legislative majorities, - they must be shielded from the passing tempers and prejudices of the times and have a sanctity abore the Constitution itself. This is clearly the whole trend, the anxiety and motivation of the judgement of the Supreme Court, - . . . which body cannot be too highly praised as the repository and vigilant guardian of the Law and the Constitution (Hear, Hear). The independence of the judiciary, also a fundamental provision, is one of the brightest ornaments of our national polity (Hear, Hear). Sir, we, Members of Parliament, have been elected to protect and promote the people's interests, . . . not to abridge or derogate their rights. We have sworn to uphold the Constitution. How can we, . . . by what right can Parliament, turn itself into a sort of Constituent Assembly and so assume to itself the powers which the Constitution has expressly denied to it? We have neither asked for, nor been given, such a mandate. Sir, I ask:  "Has any hon. Member put the issue to his electorate in clear and explicit terms that, if elected, he will try and procure for Parliament the comprehensive power to amend, not this or that right, but the entire gamut of Fundamental Rights embodied in Part III of the Constitution?"  If any one has, . . . he alone has the right to speak in support of this Bill.   **Parliament - Its Limitations ** I grant that Parliament, the national legislature, is supreme . . . but only so in the legislative sphere, just as the national executive and the national judiciary are supreme in their respective spheres.. . . I deny that Parliament is supreme in India. It has no such warrant from the people. It can only attain such supremacy by the trespass and usurpation of the right, which, under the Constitution, belong to and are vested in the Republic of India. I am sure, no member will claim that Parliament and Republic are interchangeable terms. The basic features of our Constitution, including the Fundamental Rights enshrined in it, cannot be amended by the legislatures of the day. The Parliament of the day . . . means the Party in power, . . . which in turn means the Government of the day. No Government, - and I do not mean the present Government, - but any Government, however much to the right or to the left, - should be enabled to undo what the Constituent Assembly has so painstakingly done.   But if I am wrong in what I have submitted, and it has always been open for Parliament to exercise or give itself a power it does not at present possess, then must Article 13 be deprived of all meaning and be redundant. Clause (2) of this article says: "(2) The State shall not make any law which take away or abridges the rights conferred by this part and any law made in contravention of this clause shall, to the extent of the contravention, be void."  Here 'law' cannot mean only the ordinary laws enacted by public authority, since any law which contravenes any part whatsoever of the Constitution would be ultra vires and void. It must therefore specifically include 'constitutional law'. Else, this clause would have been redundant ab initio.  In the matter of the constitutional innovation introduced by Article 31B, which bars the jurisdiction of courts from the Acts placed under the shelter of this Article, Shri Justice Hidayatullah had this to say (in the judgement I have referred to before): "By this device which can be extended to other spheres, the Fundamental Rights can be completely emasculated by a two-thirds majority even though they cannot be touched in the ordinary way by a unanimous vote of the same body of men. The State Legislatures may drive a coach and pair through the Fundamental fights and the Parliament by a two-thirds majority will then put them outside the jurisdiction of the Courts. Was it really intended that the restriction against the State in Article 13(2) might be overcome by the two agencies acting hand in hand?"  That is to say, an ordinary Act unanimously passed if it contravenes a Fundamental Right would be void. But passed as a Constitution Amendment Act, by just two-thirds majority, it would become law. Shri Justice Hidayatullah went on to observe:  "If a halt is to be called, we must declare that right of Parliament to abridge or take away Fundamental Rights. Small inroads lead to larger inroads and become as habitual as before our freedom was won."  Put in another way, it can be said that the process can gradually take away the freedom we have so painfully won.  **The Constitution - Sheet-anchor or Plaything? ** Sir, the Constitution as it stands, is the sheet-anchor of our freedom, of our democracy, and of Parliament. Of this sheet-anchor the weightiest part, the most valuable part, is the fundamental provisions. The vital question before this House is whether the Constitution should be the sheet-anchor or the plaything of Parliament. I cannot here resist quoting Shri M. C. Setalwad (who has been hailed as one of the great jurists of the English-speaking world). He said:  "Amendments of the Constitution have been too frequent and if I may use the expression, without any disrespect to Parliament, too irresponsible."  His proposal is to replace the two-thirds majority by a three-fourths majority,. . . a suggestion which I strongly commend as a fit subject for the serious consideration of the House.  Shri Surendranath Dwivedy: He had supported the Bill (interpretation).  Shri Nath Pai: When you are quoting Mr Setalwad, you may also quote what he has said about this Bill.  Shri Virendrakumar Shah: Let him quote as he likes (Interruption).  Mr. Speaker: Order please. Let him have his say.  Shri Sriraj Meghrajji: Sir, I put it to the supporters of the Bill that the present is the most inopportune time they could have chosen. I do not believe that the object can be simply to provoke a debate, or a confrontation between the legislative and judicial branches of government, which would put a further strain on the Constitution, in these troublous times, when our whole attention and energy should be concentrated on keeping the country together and upholding the Law (Hear, Hear), . . . on strengthening rather than weakening our constitutional and administrative institutions.  **Why this Bill?** Then, what is the need? . . . I submit, Sir, that there is none. There is no particular need or practical measure in contemplation for utilising the new power now sought to be assumed by Parliament. Then where is the hurry?. . . As I have said the articles on provisions Fundamental Rights themselves contain built-in for their modification. Are we then to open a door which at present does not need to be opened . . . but which, once opened, cannot be shut?  We shall have opened the way, if not for this Parliament, then, for a future Parliament, . . . and the Party which rules that Parliament, . . . to do what Hitler did to the German Constitution. I am not being far-fetched. In the process we shall have made the national judiciary impotent. Even the able Mover of this Bill, Shri Nath Pai, cannot predict the future course and complexion of things. Let him not, then, lead us away from the shelter of the Constitution. He has himself, I believe, said that he finds no difficulty with the Constitution as it stands. On the contrary, he has claimed to be an ardent champion of Fundamental Rights. I therefore conjure him to support my amendment instead of his own Bill.  I do not say that an occasion may not arise for amending something in Part III of the Constitution But I would still say and hope that the fundamental values of human life and society must remain. For example, Article 11 of the Japanese Constitution declares that the Fundamental Rights are eternal and inviolable. And Article 97 provides that these rights are to be held inviolable for all time.   Let the People Decide But if we are to alter the Fundamental Rights, . . . then, it is my humble but most earnest submission, . . . that the arbiter must be the people themselves (Hear, Hear). My amendment to the Bill provides for a Referendum. The device is known to other Constitutions, such as the Swiss. In Australia, no part of the Constitution can be amended without this recourse. Let the matter be put the people themselves, in the simplest language and unclouded by any other issue.. . . Let them weigh the pros and cons.. . . Let them judge and decide. It would be an exercise in real democracy.   Mr. Speaker, I thank you and the House for the patient hearing you have given me. I am afraid I am no orator. I beg of you, hon. Members, to search your hearts and minds. Should there not be something basic and permanent in the grand contract of the Constitution, by which all the people of India have consented to be governed? Let us not go down in history as the witting or the unwitting subverters of Indian democracy, and of civic rights and liberties, for which our people have so long struggled under an autocratic power. I beg of you not to do this thing. Let us not, in this Fourth Lok Sabha, incur the future woes and opprobrium of posterity. There is no pressing need for justification for this Bill. Then where is the hurry? This is a matter calling for the most sober consideration. It is too momentous for routine or summary disposal. It is not, please do not let it become, a party issue. It is an all-time national issue, a matter for your individual political conscience and sober statesmanlike judgement.  There are a fair number of us in this honourable House and Parliament, and a large body of intelligent and enlightened opinion in the country, that are deeply agitated by this proposal . . . and dreadfully apprehensive of its ultimate consequences. Will you not consider it possible, hon. Members, that there may be good reasons for this anxiety and agitation? Will you not give yourselves time to ponder these reasons? I include in my appeal the hon. Mover of the Bill and the Treasury Benches. I remind you of the oath you have taken to uphold the Constitution. I beg of you to give plenty of time. and even more reflection. to I this fateful measure, .. which may seal the doom of Democracy in India.  And when you have considered the issue, . . . I pray that you will be moved to relegate the Bill as it stands.. . . In so doing, you will be hailed and be acclaimed in history as the defenders and champions of a free democracy … and a free society (Hear, Hear).  Sir, now I beg to commend my amendment to the Bill for the consideration of this honourable House.  _Previous musing: [THE ROLE OF JUDICIARY IN PARLIAMENTARY DEMOCRACY](https://indianliberals.in/content/the-role-of-judiciary/)_ --- ## [Musing] Globalisation and The Poor URL: https://indianliberals.in/musings/globalisation-and-the-poor-2/ ### Body _The following essay was published in November 2003 by the [Friedrich Naumann Foundation for Freedom](https://indianliberals.in/content/globalisation-and-the-poor/). Authored by Johan Norberg, the essay provides an evidence-based argument against anti-globalist theories that suggest poverty is a result of globalisation.  _The anti-globalisation movement had its coming-out party in Seattle in 1999, when thousands of activists and trade union members protested against a new round of trade negotiations in the World Trade Organisation. Millions were drawn to these protests because of a preceding anti-WTO statement that was circulated on the internet, and signed by about 1500 different groups, from churches to militant communists. Their first accusation against the WTO in the statement was that free trade and globalisation:  “has contributed to the concentration of wealth in the hands of the rich few; increasing poverty for the majority of the world's population; and unsustainable patterns of production and consumption."  Poverty is also the major issue when you read anti-globalist writers and theoreticians. Their view is that globalisation is making the rich richer and the poor poorer. If this is their biggest concern, surely they should change their mind about the globalisation process if they got new information, which not merely shows that globalisation is not increasing poverty, but in fact an efficient way of reducing human poverty. That is what I am going to argue for in this paper, and I will also present the current debate on poverty measurements. What has happened to poverty in the era of globalisation, and why?  **Relative or absolute? ** To begin with, we must define what we mean when we discuss poverty. Most often there is a discussion whether absolute or relative poverty is the most relevant measurement. In this debate, I am an absolutist. Relative poverty is not a measure of poverty, but of inequality. Instead of measuring how poor someone is, it says how poor that person is in relation to others. One poverty concept frequently used, e.g. by the UNDP, rates a person as poor if they have less than half the median wage in the country where they live. This means that a person regarded as 'loaded' when living in a poor country like Nepal is considered as poor as a church mouse when living in the affluent USA. These relative figures, consequently, cannot be compared internationally.  But the biggest problem with the relative concept is that it completely distorts our view of poverty. Poverty in China has been reduced faster than ever in the last two decades. People have higher wages and better living standards than ever before. But at the same time income gaps within China have widened because towns and cities have grown faster than the countryside. Inequality has grown, and therefore, relative poverty has grown, even though everybody is richer than before. Surely there must be something wrong with a measure that says that poverty is increasing when everybody gets richer? Only those who consider wealth a greater problem than poverty can find a problem in some millionaires becoming billionaires while others get out of poverty.  An absolute poverty concept is to be preferred, for example a specific money line. But that view has also been challenged. As Amartya Sen, Indian economist and Nobel laureate, has emphasised, poverty is not just a material problem. Poverty is something wider, it is about powerlessness, about being deprived of basic opportunities and freedom of choice. Small incomes are often symptomatic of the absence of these things, of people being subjected to coercion and marginalization. Human development means leading a reasonably healthy and secure life, with a good standard of living and freedom to shape one's own life.  But even though I accept this criticism to a big extent, the investigation of material development is important. Both because it indicates how these conditions have developed and also because it contributes to development as such. It is material resources, individual and societal, which enable people to feed themselves, be educated, obtain health care and be spared watching their children die. It can and should be combined with other indicators of human welfare, but it is one of the most important ones in itself. The most common international poverty line is the World Bank's definition of absolute poverty. According to this definition you are poor if your income is less than one dollar a day, to be exact, $1.08. And this is adjusted for purchasing power, so that it corresponds to the same standard in all countries. This definition was chosen because it was the median of the poverty definitions in the ten poorest countries that the World Bank had detailed statistics from. And probably also because it is easy to popularise and remember. Let's use that definition to dig into the historical change in poverty rates.  **The Extent Of Poverty ** In 1820, about 85 per cent of the world population lived on the equivalent of a dollar a day, converted to today's purchasing power. The biggest misconception in the debate on globalisation is that poverty is supposedly something new, and that things are getting worse. It is not. One hundred years ago, every country was a developing country. The new things in our modern world is not poverty, but wealth. The fact that some countries and regions have escaped that poverty.  In the beginning of the 19Ih century something happened and poverty began to decline. In 1910 only 65 per cent lived in absolute poverty and in 1950 55 percent. Then came another big change. UNDP, the United Nations Development Programme, has observed that, all in all, world poverty has fallen more during the past 50 years than during the preceding 500. In 1970 absolute poverty had shrunk to 35 per cent, in 1980 it was slightly more than 30 per cent, and today it is about 20 per cent. (Often the figure 23 per cent is mentioned, but that is as a proportion of the developing country population.)  Even though the proportion of people in poverty has been shrinking in the last 200 years, the number of poor has increased, because world population has been increasing constantly. The unique with the decline in the last twenty years is that not only the proportion, but also the absolute number of absolute poor has declined - for the first time in world history. During these two decades, world population has grown by about 1.8 billion, but yet the number of absolute poor has declined by about 200 million people, according to the World Bank. Material developments in the past half-century have resulted in the world having over three billion more people liberated from poverty.  Even those encouraging findings, however, probably overestimate world poverty, because the World Bank uses survey data as the basis for its assessments on consumption. This data is notoriously unreliable. It suggests that South Koreans are richer than the Swedes and British, for example, and that Ethiopia is richer than India. Furthermore, surveys capture less and less of an individual's income. The average poor person at exactly the same level of poverty in surveys in 1987 and 1998 had in reality seen her income increase by 17 per cent. One of the most basic problems is that people begin to forget what they consumed after just one day, but the surveys are about their consumption a week or a month back. An Indian survey from 2000 showed that questions about the consumption during a shorter period changed the answers dramatically. When they shortened the period to just the last days, the extent of rural poverty in India was 'cut' from 43 to 24 per cent.  Former World Bank economist Surjit S. Bhalla recently published his own calculations supplementing survey results with national accounts data (in the book _Imagine there's no country_, Institute for International Economics, 2002). Bhalla found that the United Nations's goal of lowering world poverty to below 15 percent by 2015 has already been achieved and surpassed. Absolute poverty had actually fallen from a level of 44 percent in 1980 to 13 percent in 2000. According to Bhalla's calculations, 800 million people have been lifted out of absolute poverty in 20 years. If this is true, we have just witnessed poverty reduction on such an astonishing scale which we will probably never see again.  **Economic Growth ** It's extremely difficult to make global calculations about poverty, so it's impossible to say who is right and who is wrong about the true extent. But what we do know is the direction, there is a consensus between the World Bank and Surjit Bhalla that the world has never before seen such a big reduction in human poverty as we have seen in the last 20 years. And such poverty reduction does not happen arbitrarily. It is a natural consequence of economic growth. No country has ever succeeded in reducing poverty without having long-term growth. Nor is there any case of the opposite, i.e. of a country having had long-term sustainable growth which has not been of benefit to the poor population. If we have 3 percent growth per annum, this means that the economy, our capital and our incomes double every 23 years. If growth is twice as fast, these things double about every 12 years. This is an unparalleled growth of prosperity, compared with which even vigorous government measures for the redistribution of incomes take on a puny aspect.  This makes growth the best cure for poverty. Some economists have spoken of a 'trickle-down" effect, in the sense of some taking the lead and getting rich first, after which parts of this wealth trickle down to the poor, as a result of the rich demanding their labour. This thesis rather reminds one of the image of the poor man getting the crumbs that fall from the rich man's table, but this is a completely mistaken picture of the true effect of growth. On the contrary, what happens is that the poor derive benefit from growth to roughly the same extent and at the same speed as the rich. They benefit immediately from the value of their labour increasing and from the goods they buy becoming cheaper in relation to their income.  Two World Bank economists, David Dollar and Aart Kraay, studied 40 years' income statistics from 80 countries. Their studies show that growth benefits the poor just as much as the rich. With 1 per cent growth the poor increase their income on average by 1 per cent, with 10 per cent growth they raise it, on average, by 10 percent. Not always and not everywhere - there are exceptions and variations - but on average.  This has also made it possible to fight misery and increase living standards generally. During the last 30 years chronic hunger and the extent of child labour in the developing countries have been cut in half. In the last half century, life expectancy has gone up from 46 to 64 years and infant mortality has been reduced from 18 to 8 per cent. These indicators are better in the developing countries today, than they were in the richest countries a hundred years ago.  It is not a coincidence that the great waves of poverty reduction have also been the periods of two unique growth stories. In its 1997 _Human development _report, the UNDP notes that humanity has seen two 'great ascents". The first began in the 19th century, with the industrial revolution in the US and Europe. The second began during the post-war era and is now in full swing, with especially Asia noting ever-greater advances in the war against poverty, hunger, disease and illiteracy. Six Asians in ten were absolutely poor in 175. Today's figure is less than two out of ten.  It is also absolutely essential to understand that this was the two periods in which the West, and later Asia began to globalise in a serious way. Let me pick two examples to show the link between globalisation and poverty reduction. The European example is Sweden in the 19th century, and the Asian example is Taiwan in the 20th century.  **Economic Miracle 1 : Sweden**  In 1870, Sweden was poorer than Congo is today. People lived twenty years shorter than they do in developing countries today, and infant mortality was twice as high as in the average developing country. My forefathers were literally starving. The lack of trade, markets and communications in one region meant that a crop failure resulted in hunger there. In 1870 Swedes had to make bread from bark, lichen and straw to survive. They minced bones from fish and other animals to meal, on which they made porridge.  If you had levelled out all Swedish property in the middle of the 19th century, it would still have given everybody a life in poverty, of the levels of today's Mozambique. So redistribution was not the solution. Instead Sweden was saved by liberalisation. In a few decades, a couple of classical liberal politicians gave Sweden religious liberty, freedom of speech, and economic liberty, so that people could start their own business and buy and sell freely on the market.  A trade agreement with England and France in 1865 made it possible for Swedes to specialise in what we did best. We couldn't produce food well, but we could produce steel and timber, and sell it abroad. From the money we made, we could buy food. And because we had a free market, people and companies had to think of new and better ideas - otherwise consumers would turn to someone else. In 1870, the industrial revolution began in Sweden. New companies exported to countries across the world, and production grew rapidly. The competition forced our companies to become more efficient, and old industries were closed so that we could meet new demands, such as better clothes, sanitation, health care and education.  By 1950, before the Swedish welfare state was built, the Swedish economy had quadrupled. Infant mortality had been reduced by 85 per cent and life expectancy had increased by a miraculous 25 years. We were on our way to abolish poverty.  Even more interesting is that Sweden's economy grew at a much faster rate than the developed countries it traded with. The wages in Sweden grew from 33 per cent of the average wage in the US in 1870 to 56 per cent in the early 1900s, even though American wages soared at the same time. This shouldn't surprise anyone. Economic models predict  that poor countries should have higher growth rates than affluent ones if there is a free flow of capital, trade and ideas between them. They have more latent resources to harness, and they can benefit from the existence of wealthier nations to which they export goods and from which they import capital and more advanced technology, whereas affluent countries have already captured many of those gains. This is why globalisation is the hope of poor countries.  **Economic Miracle 2: Taiwan ** The transition that took Sweden 80 years took Taiwan 25 a century later. Because Taiwan began in an even more globalised world, with even richer countries to do business with and borrow ideas from. In 1950 Taiwan was an extremely poor country, with a hungry population. Taiwan was as poor as Kenya and other African countries, today it is 20 times richer. The difference was that Taiwan decided to go global. In contrast to African and Latin American countries, where they produced everything they needed themselves, Taiwan followed the normal East Asian pattern, and specialised in the industries they were best at, exported it to the West, and imported the rest. The factories were dirty, the machines dangerous and the Taiwanese worked long hours.  Taiwan's transition from hunger to South European living standards is personified in an old gentleman I met when I visited the country, Mr. Wang. His parents were poor farmers, who got property rights to their farm in the 60s, so that they could invest and borrow money. So Wange started factory production of toys such as Barbie dolls, sports gear like skateboards, stainless steel scissors with plastic handles.  If the anti-globalisation movement had been around when Taiwan was industrialised, they would have protested against the factories and told us we were exploiting cheap labour. Surely they would have organised a boycott. If enough Americans and Europeans had joined that boycott, Taiwan would still be poor today.  Because these sweatshops were the stepping stones for the Taiwanese. Mr. Wang lost two fingers to a machine, but he also became a millionaire. The decision to go global resulted in the Taiwanese economic miracle. In just ten years, the number of businesses more than tripled, and poverty was cut in half. Until today, Taiwan's foreign trade grew 400- fold, and real wages grew 10-fold. Today it is a country with living standards close to Southern Europe.  **Economic Miracle 3: Vietnam ** From these historical examples we learn that economic growth is necessary for poverty reduction. And we learn that economic freedom and trade is essential for economic growth. That is why we can see that Sweden's and Taiwan's economic transitions are repeated today, by the globalising nations of our era. Studies show that on average, countries with open markets grow 3 to 5 times quicker than closed economies. Poor, open economies today grow faster than Sweden and Taiwan do. Let me pick an example. A couple of months ago I visited Vietnam, a communist country that has had second thoughts. When the socialist policies led to starvation in the mid-80's they began to open the economy and liberalise the markets. Since then the country's economy has doubled, and poverty has been halved. The most important reason is Vietnam's surge in exports. And the introduction of foreign multinationals has been an essential element, because it gave Vietnam access to the benefits of globalisation - foreign ideas, capital and technology. Nike is often branded an enemy of the poor. But when I visited Nike's supplier in Saigon the local union leader told me that even the communist party officials use the factories as positive examples of good business, where workers get high wages and a good and healthy work place.  When Nike started there ten years ago, the workers walked for hours to the factories, after three years on Nike wages, they could afford bicycles, another three years later they all drove mopeds to work. I visited Tsi-Chi, a young Vietnamese woman. Her work at Nike has made it possible for her to leave the heavy and unhealthy work on the family farm, where she had to be outdoors all the day, in burning sun and during the rain period. Now she earns five times what she did, and earns more than her husband - which of course makes independence possible. She now has access to health care, she has bought a television set and built an extension to the house. A generation ago, she would have to put her son to work on the farm from an early age. But Tsi-Chi told me she wants to give him a good education, so that he can become a doctor. She is not an exception. Growth triumphed where prohibition had failed: 2.2 million Vietnamese children have gone from child labour to education in ten years.  If the anti-globalists got as they wanted, and we all boycotted sweatshops and goods produced by cheap labour, Tsi-Chi would lose her job, and have to go back to farming, and put her son to work. If multinationals and better wages is exploitation - then the problem in our world is that the poor countries aren't sufficiently exploited.  **Domestic Obstacles ** Vietnam is not an isolated success story. A recent World Bank report concluded that 24 developing countries with a total population of 3 billion are integrating into the global economy more quickly than ever. Their growth per capita has also increased from 1 per cent in the 1960s to 5 per cent in the 1990s. At the present rate, the average citizen in these developing countries will see her income doubled in less than 15 years.  Something worth noting is that the industrialised countries during this time only grew by 2 per cent. In other words, big developing countries are growing faster than the rich countries, which means that world inequality is being reduced today. But this doesn't happen everywhere. The biggest problems exist in Africa, where the number of poor continue to climb rapidly. I think there are two common, but false explanations for this fact. The first is that globalisation is to blame. The problem with this explanation is that Africa is the least democratic, least liberal, least capitalist and least globalised part of the world: if globalisation is so horrible, how can it create growth and poverty reduction everywhere, and at the same time be responsible for poverty and misery in the place where it has penetrated the least?  The other false explanation is some variation on cultural or biological traits. Asians are for example supposed to be more hard working or more intelligent than Africans. The problem with this explanation is that there is no clear-cut difference between Asian and African economies like that. We can see that Asian exceptions such as Burma and North Korea, with extremely isolationist and anti-market policies, have not followed the region's success. They are stuck in the deepest misery. And we can also see that African exceptions, that tried a more pro-market, pro-globalisation approach, countries such as Botswana, Uganda and Mauritius, have seen economic growth and poverty reduction.  The difference is not that some poor countries fail because people there are stupid, or not hard working. The difference is that some get the liberty to use their intelligence, and the freedom to work for their own benefit, some don't. Earlier I mentioned that Taiwan was as poor as Kenya 50 years ago, but that it is now 20 times richer. I think two better explanations for the poverty in Kenya and many other developing countries are domestic and external obstacles to globalisation and capitalism.  Recently I visited Kenya, and I saw the people working hard and being innovative - the problem is that they had to devote all that energy - not to production - but to avoid regulations, trade restrictions and corruption. I met Simon, a poor farmer who grew cabbage. His dream was to improve the farm, to get irrigation for the crops, and build a house. But how can he get that, when the government doesn't recognize his property right to his land? In that case he can't borrow the capital to invest. And if he would improve the land, he wouldn't reap the rewards - the government would.  The Peruvian economist Hernando de Soto has explained the problem of this lack of property rights in his innovative work _The Mystery of Capital_. People in the Third World occupy common lands, build simple houses in shanty towns which they are constantly improving, and establish small corner shops, just as poor people in the western world were doing a couple of hundred years ago. The trouble is that in Latin American and African countries today it is practically impossible to register this as property. In fact, the poor of the world are not really poor, but the government does not recognise their wealth, and because of that real estate worth about 9.3 trillion dollars is not officially registered. This is a huge sum, more than the combined value of all companies listed on the stock exchanges of the affluent countries - New York, Nasdaq, Toronto, Tokyo, London, Frankfurt, Paris, Milan - and a dozen more besides.  I also met Pamela in the enormous slums of Kibera in Kenya, who explained to me that she is not allowed to sell her samosa food without a government license. If you don't get a license, the police can demand bribes every time they see you. As someone said about the slums: 'It's not safe to carry money around, there's too many policemen'. Without a license she can't borrow money or expand. To get a license takes 11 bureaucratic procedures, 61 days and half a year's income. Want to start a business to become rich? Forget it, in Kenya you have to be rich to start a business. As a result almost two thirds of all Kenyan jobs are in the informal sector. Production is small scale for the local market, often hidden from potential customers because they have to hide from the authorities.  Once again, this problem is the same in most African and Latin American countries. Starting a business in Argentina takes 15 bureaucratic procedures and 68 days, in Paraguay it takes 18 bureaucratic procedures and 73 days. In Bolivia it costs you almost two year's income to get an official license, in Nicaragua it takes you more than three years of income. If, as I think, globalisation is an extension of the classical market economy, with its specialisation and competition, then surely countries have to have basic market institutions to be able to participate fully. And therefore, people need more freedom and liberalisation, not less. **Protectionism ** But often, even that is not enough. There are also external obstacles. It was difficult to find success stories in Kenya. No booming sectors, no expanding industries. Except one. Flowers. I met June who was a manager at a rose farm, who explained to me that Kenya is the leading exporter of cut flowers to Europe. When I asked her what was the difference between her sector and others, she replied that the European Union had agreed to keep tariffs on Kenya's flowers low. They allowed free trade to work its magic. But this is an isolated Kenyan success, and an isolated example of free trade. Because our guilt, the shame of the Western countries is that we are not practising what we preach. The problem is not that the western world is supposedly trying to trick poor countries into some sort of corporate, neo-liberal globalisation - it is that we are shutting them out from it. The problem is not that we don't have something called 'fair trade', the problem is that we do not have free trade.  Over the last 50 years, we have liberalised trade, but we made two major exceptions - textiles/garments and agriculture. This happens to be the sort of labour intense goods a poor country is able to produce in the early stages of development. So we give developing countries the right to sell everything that they can't produce. The United Nations Conference on Trade and Development calculates that the developing countries could export for $700 billion more per year if we abolished our protectionism. That is 14 times more than they get in foreign aid.  Someone has said that after the liberalisation of the Chinese economy there are only three centrally planned economies left in the world, Cuba, North Korea and the Common Agricultural Policy of the European Union. This agricultural policy shut poor countries' goods out with quotas and tariffs, but it also subsidises our farmers with billions, and through export subsidies and so called food aid, we dump the surplus in poor countries, so that farmers there are knocked out on their home ground. Sweden makes expensive sugar from sugar beets, instead of importing them from countries with the climate, the soil and cheaper labour. An average cow in the European Union gets more in subsidies every day than 3 billion people in the developing countries have to live on.  But an end to subsidies and protectionism is not an act of generosity. It is an act of rationality. Because we lose ourselves by these policies, only a tiny special interest profit. The OECD-countries barriers and support for agriculture and horticulture amounts to almost 1 billion dollar a day. It's hard to grasp such a huge sum. 1 billion is a fortune, 300 billion is just a figure. Therefore it's best to put it in perspective. For that sum you could fly all the cows in the OECD, 60 million of them, around the world every year in business class. In addition, the cows could be given almost $2,000 each in pocket money to spend in tax-free shops during their stopovers. The cows could have this sort of trip every year. This much we are forced to pay, tax payers and consumers, to destroy the possibilities for poor countries to compete.  The problem with protectionism is not merely a problem with Western protectionism. An even bigger problem is poor country protectionism. Countries generally need more trade, that means not only exports but also imports. Imports are needed for the consumers and for competition and specialisation in the economy, and to fight monopolies. And low import tariffs are needed for exports as well. Something like 40 per cent of exports from the developing countries go to other developing countries. If, then, poor consumers are forced to pay heavy prices for products from companies in their own country, they are prevented from buying from companies in the neighbouring countries, in which case the producers will also lose by this policy. They may get a monopoly of their own market, but on the other hand they are stopped to sell to other markets. This destroys specialisation, which is an engine for growth. Developing countries' tariffs against other developing countries today are more than two and a half times higher than the industrialised countries' tariffs against developing countries. Thus more than 70 per cent of the customs dues which developing countries are forced to pay are levied by other developing countries. Poor countries would benefit more from poor country liberalisation, than from rich country liberalisation.  **What The Poor Say ** Often in the end of discussions about poverty and globalisation, critiques say that statistics give a superficial view. Economics isn't everything. We should also ask poor people about what they think about globalisation. I agree. But in that case, we can't be content with asking two or three individuals hand-picked by antiglobalists and ask them. We need a broad statistically sound selection of representative individuals. Recently, that was done when the Pew Center surveyed 38,000 people in 44 nations, with coverage of the developing world in all regions. The interesting result was that people hold a positive view of globalisation in all regions, but that views of globalization are much more positive in poor countries than in rich ones. If there is a group which is relatively sympathetic to the anti-globalisation views it is the well-off in rich countries. This Pew Global Attitude Survey showed that only 28 per cent of people in the US and Western Europe thought growing global trade and business ties was 'very good'. In developing Asia 37 per cent thought so, and in Sub-Saharan Africa no less than 56 per cent thought it was very good. More than a quarter of Americans and West Europeans thought that globalisation has a bad effect on their country, fewer than 1 in 10 in developing Asia and Sub-Saharan Africa thought the same. Only a little more than half in rich countries thought that multinational corporations has a good effect on their country, but as many as 75 per cent of Africans thought so. More than a third in rich countries think that antiglobalisation has a positive effect, only a little more than a quarter in Africa thought so.  It seems like Americans and Europeans more than others take freedom, wealth and technology for granted, without examining or understanding the process of markets and internationalisation on which this depends. But people who are deprived of freedoms and opportunities see globalisation as the way to get it.  Even though we have seen history's biggest reduction in poverty, poverty is still with us, and in many places it deepens. According to the World Bank 1.2 billion live in absolute poverty, and 900 million people live in chronic hunger. History, statistics, theory and the poor themselves all-say that the problem is not globalisation, it is that they do not yet have access to the fruits of globalisation. It is worth repeating the words of UN Secretary-general Kofi Annan at the UNCTAD Conference in Bangkok on 12th February 2000, soon after the demonstrations against the WTO: 'The main losers in today's very unequal world are not those who are too much exposed to globalisation. They are those who have been left out" _Last week's musing: [MANIFESTO FOR INDIAN LIBERALS](https://indianliberals.in/content/manifesto-for-india-liberals/)_ --- ## [Musing] Globalisation and the Poor - Johan Norberg URL: https://indianliberals.in/musings/globalisation-and-the-poor-johan-norberg-2003/ ### Body _The following excerpt has been taken from the Occasional Paper titled ‘Globalisation and the Poor’ written by Johan Norberg. The paper is based on a contribution of the author to the workshop Campaigning for Free Trade; organised by the Liberal Institute of the Friedrich Naumann Foundation in November 2003._ The anti-globalisation movement had its coming-out party in Seattle in 1999, when thousands of activists and trade union members protested against a new round of trade negotiations in the World Trade Organisation. Millions were drawn to these protests because of a preceding anti-WTO statement that was circulated on the internet, and signed by about 1500 different groups, from churches to militant communists. Their first accusation against the WTO in the statement was that free trade and globalisation:  _“…has contributed to the concentration of wealth in the hands of the rich few; increasing poverty for the majority of the world's population; and unsustainable patterns of production and consumption."_  Poverty is also a major issue when you read anti-globalist writers and theoreticians. Their view is that globalisation is making the rich richer and the poor poorer. If this is their biggest concern, surely they should change their mind about the globalisation process if they got new information, which not merely shows that globalisation is not increasing poverty, but in fact an efficient way of reducing human poverty. That is what I am going to argue for in this paper, and I will also present the current debate on poverty measurements. What has happened to poverty in the era of globalisation, and why?  ### **Relative or absolute?** To begin with, we must define what we mean when we discuss poverty. Most often there is a discussion whether absolute or relative poverty is the most relevant measurement. In this debate, I am an absolutist. Relative poverty is not a measure of poverty, but of inequality. Instead of measuring how poor someone is, it says how poor that person is in relation to others. One poverty concept frequently used, e.g. by the UNDP, rates a person as poor if they have less than half the median wage in the country where they live. This means that a person regarded as 'loaded' when living in a poor country like Nepal is considered as poor as a church mouse when living in the affluent USA. These relative figures, consequently, cannot be compared internationally.  But the biggest problem with the relative concept is that it completely distorts our view of poverty. Poverty in China has been reduced faster than ever in the last two decades. People have higher wages and better living standards than ever before. But at the same time income gaps within China have widened because towns and cities have grown faster than the countryside. Inequality has grown, and therefore, relative poverty has grown, even though everybody is richer than before. Surely there must be something wrong with a measure that says that poverty is increasing when everybody gets richer? Only those who consider wealth a greater problem than poverty can find a problem in some millionaires becoming billionaires while others get out of poverty.  An absolute poverty concept is to be preferred, for example a specific money line. But that view has also been challenged. As Amartya Sen, Indian economist and Nobel laureate, has emphasised, poverty is not just a material problem. Poverty is something wider, it is about powerlessness, about being deprived of basic opportunities and freedom of choice. Small incomes are often symptomatic of the absence of these things, of people being subjected to coercion and marginalisation. Human development. means leading a reasonably healthy and secure life, with a good standard of living and freedom to shape one's own life.  But even though I accept this criticism to a big extent, the investigation of material development is important. Both because it indicates how these conditions have developed and also because it contributes to development as such. It is material resources, individual and societal, which enable people to feed themselves, be educated, obtain health care and be spared watching their children die. It can and should be combined with other indicators of human welfare, but it is one of the most important ones in itself.  The most common international poverty line is the World Bank's definition of absolute poverty. According to this definition you are poor if your income is less than one dollar a day, to be exact, $1.08. And this is adjusted for purchasing power, so that it corresponds to the same standard in all countries. This definition was chosen because it was the median of the poverty definitions in the ten poorest countries that the World Bank had detailed statistics from. And probably also because it is easy to popularise and remember. Let's use that definition to dig into the historical change in poverty rates.  ### **The extent of poverty ** In 1820, about 85 percent of the world population lived on the equivalent of a dollar a day, converted to today's purchasing power. The biggest misconception in the debate on globalisation is that poverty is supposedly something new, and that things are getting worse. It is not. One hundred years ago, every country was a developing country. The new thing in our modern world is not poverty, but wealth. The fact that some countries and regions have escaped that poverty.  In the beginning of the 19th century something happened and poverty began to decline. In 1910 only 65 per cent lived in absolute poverty and in 1950 55 percent. Then came another big change. UNDP, the United Nations Development Programme, has observed that, all in all, world poverty has fallen more during the past 50 years than during the preceding 500. In 1970 absolute poverty had shrunk to 35 per cent, in 1980 it was slightly more than 30 per cent, and today it is about 20 per cent. (Often the figure 23 per cent is mentioned, but that is as a proportion of the developing country population.)  Even though the proportion of people in poverty has been shrinking in the last 200 years, the number of poor has increased, because the world population has been increasing constantly. Unique with the decline in the last twenty years is that not only the proportion, but also the absolute number of absolute poor has declined - for the first time in world history. During these two decades, the world population has grown by about 1.8 billion, but yet the number of absolute poor has declined by about 200 million people, according to the World Bank. Material developments in the past half-century have resulted in the world having over three billion more people liberated from poverty. Read the complete paper [here](https://indianliberals.in/other-publications/globalisation-and-the-poor.pdf). type=content&p=8619). Needs editorial review._ --- ## [Musing] The Gold Problem in India URL: https://indianliberals.in/musings/gold-problem-india/ ### Body The gold problem in India, if there is such a problem at all, has been the subject of intensive public debate and discussion in recent days. The gold problem in India, if there is such a problem at all, has been the subject of intensive public debate and discussion in recent days. The Forum of Free Enterprise, following its practice of stimulating public thinking on national economic problems published a booklet on the gold problem in July 1963. The booklet included four essays, examining the gold problem from the historic, economic and constitutional viewpoints. The authors of the booklet are: Prof. B. R. Shenoy, Director of the School of Social Sciences, Gujarat University, an authority on the gold problem; Mr. M. A. Sreenivasan, eminent industrialist who was formerly the Chairman of the Kolar Gold Mines; Dr. Kersi Doodha, of the Department of Economics of the University of Bombay, who is author of books on monetary problems, and Mr. Phiroze J. Shroff, well-known economist and an authority on constitutional law. The booklet examines the Gold Problem under four principal heads: - What is the Gold Problem? - How and when did it arise? - What measures have we adopted to tackle it and with what success? - If these measures have not been successful, what alternative measures could we adopt? _Access the full document[here](http://v2.indianliberals.in/~_admin/pdflanguage?id=1750398613.pdf)._ _First Published in the Forum of Free Enterprise in July 1963._ _Other editions of the publication can be accessed at [Indian Liberals](http://indianliberals.in/index), an open, multilingual digital archive committed to preserving liberal voices in the Indian public sphere._ [Read More SO Musings](https://spontaneousorder.in/?s=SO+Musings) --- ## [Musing] Gopal Ganesh Agarkar and the Vindication of Women’s Education URL: https://indianliberals.in/musings/gopal-ganesh-agarkar-and-the-vindication-of-womens-education/ ### Body _In the face of opposition from several sections of the society, Agarkar held on to the liberal ideas of equality of opportunity, individual choice, individual freedom, and education for women. Agarkar’s treatment of the subject of women’s education was at once insightful, critical and persuasive._ Gopal Ganesh Agarkar was an Indian thinker, known primarily for his writings in the Marathi newspapers Kesari and Sudharak. His writings and visionary thoughts often come to be overshadowed by his difficult association with Lokmanya Tilak. The mutual diatribes between the two obscure the clarity and conviction of his ideas. However, Agarkar’s thoughts and ideas continue to be relevant and his predictions accurate.  The late 19th century in India was an era of conflict of ideas. Women’s education became the center of such a conflict with both sides making sharp attacks against the other. Agarkar in his writings, often cited the attacks made against his position. Following is one among the several attacks leveled against Agarkar - ‘And these are the leading figures in our society. We used to think of them as intellectuals, now we know how intelligent they really are! How did these ‘intellectuals’ get this ridiculous idea of putting women in schools! It would be better to throw India’s wealth into the sea than to use it for women’s education’ (Agarkar, 1994, Vol. 3, 157). Agarkar wrote in sharp and precise words with the view to counter the status quo and to persuade his readers and opponents alike.  Agarkar did not take a revolutionary position on women’s education and instead framed his argument in terms of simple questions. He first articulated the need for primary education in India by discussing the positive impact of primary education in Europe. He begins _शिक्षणाबद्दल सक्ती करावी काय?_ (_Should education be made compulsory?_) by referring to Lord Macaulay’s Speech on Education in the House of Commons in 1847; here Lord Macaulay endorsed the phrase, ‘educate the people’, and attributed it to William Penn, George Washington and to Thomas Jefferson. Agarkar believed that all developed nations had one thing in common and that was primary education. In _इंग्रजी विद्या व आमची सामाजिक स्थिती _(_English Education and our social condition_) he elaborates on the positive impact that education tends to have in any society - Education offers the freedom to think and also offers business freedoms. In a related article titled _प्राथमिक शिक्षण सरकारचे आवश्यक कर्तव्य आहे _(_Primary Education is the Responsibility of the State_), he states that the state cannot and must not shirk from providing primary education to its people. He further elucidates that European political systems may have abridged the role of the king or the state. And yet primary education finds a place within the role of the state. Even those who believe in a very limited state, hold the belief that the protection of people’s life and property is the primary function of the state’ (Agarkar, 1994, Vol. 1, 158). Agarkar’s insistence on a state-provided primary education stemmed from two concerns. Firstly, the lack of civil-society-run educational institutions, and the lack of awareness among people about the need for primary education leaves no alternative but to rely on the state. He further suggested that it doesn’t matter if children get education at home or through institutions established by civil society. If the society is able to provide education, the state need not interfere. However, if the society is unable to provide education, the responsibility lies with the state’ (Agarkar, 1994, Vol. 1, 161). Secondly, Agarkar strongly believed that the absence of education leads people to indulge in antisocial and criminal behavior; one uneducated individual becomes a potential danger to the rest of the society and hence the state must play its role in protecting its citizens. Agarkar ends his discussion on primary education by stating unequivocally that educating people does not mean providing higher education or vocational education. It refers to the basic education that helps people carry out daily activities and business (Agarkar, 1994, Vol. 1, 156). Agarkar proceeds to build a case for women’s education on the foundation of primary education for all. His intent and his ideas on women’s education are deeply reminiscent of Mary Wollstonecraft. In one of his early writings, Agarkar speaks of the need to provide education that enables women to become financially independent. In _स्त्रियांस चरितार्थसंपादक शिक्षण देण्याची आवश्यकता_ (_The Need for Providing Women with Education for Employment_), he portrays how women have to depend on the mercy of a male relative after the death of their husbands, and in several cases women prefer death over seeking pity. In such a scenario, the only way out is an education that can bring some means of livelihood to the woman. Agarkar espouses the argument made by Wollstonecraft a hundred years ago. In Chapter 12 of _Vindication_, titled ‘On National Education’, Mary Wollstonecraft states that it is essential for women’s dignity that they be given the right and the ability to earn their own living and support themselves (The British Library, n.d.).  Agarkar supported women’s education not just as a liberal idea but he also saw in it a way to prevent child marriages. In the then prevalent society, men’s education continued undisturbed through marriage and fatherhood. However, early marriage and motherhood forced young girls to keep away from education. If young girls are to take exams, they must prepare for those in a free manner, and as unmarried women living in the comfort of their parents’ house. And for married women to take exams, they must be able to do so with the complete support and cooperation of their in-laws, and with the same freedoms as enjoyed by unmarried women (Agarkar, 1994, Vol. 1, 167). Agarkar laments the waste of intelligence and talent brought on by early marriages and motherhood, and points out the immense national loss caused by such multi-generational waste. Mary Wollstonecraft suggested that along with the discriminatory practices, the cause of the waste of women’s talent was the conditioning of the female mind for docility and generally submissiveness. Agarkar’s writings criticize the idea that the only role of a woman is that of a wife and a mother. He counters the general assumption that education will propel women to abandon their ‘natural’ role of being a caring mother and an obedient wife. Agarkar’s ideas show yet another parallel to those of Wollstonecraft, as he recommended that men and women must be provided education in a co-ed manner. He believed that co-ed classrooms enabled students to interact comfortably with the opposite gender, making for a freer society, and enabling women to undertake activities that were once forbidden for them. Providing education to men and women in a mixed setting offers equal learning opportunities to women. However, Agarkar was cautious in demarcating equal from standardized. While he believed in equal opportunities, he also stated that women must not be expected or compelled to do the exact same things that men did. Instead, he offered the following liberal solution : If each person is allowed to do the work that they are good at and the work they want to do, it benefits the doer and the world at large  (Agarkar, 1994, Vol. 1, 171).  He countered the popular progressive opinion which held that unlike men, women should not be allowed to learn in English; there was a palpable fear that if both men and women started learning in English, then Marathi would fall out of use and become extinct. Agarkar offered a simple solution based on individual choice. He suggested that women who do not wish to have English as the medium should take up Marathi as the medium. It is not necessary to teach every subject in English (Agarkar, 1994, Vol. 3, 164). He found the argument about the medium of instruction as a weak one, meant purely for opposing women’s education. Agarkar recognised the larger purpose of women’s education as he moved from the empowerment of an individual woman to the larger community of women. In _स्त्रीशिक्षणावर शेवटचे दोन शब्द_ (_Final Thoughts on Women’s Education_), he wishes that the educated women keep using their education to help liberate other helpless women who are struggling and suffering (Agarkar, 1994, Vol. 3, 164).    Agarkar swam against the tide, vociferously arguing for women’s education. He was a visionary in the sense that his predictions and hopes for the future were accurate. In _स्त्रियांस वरिष्ठ प्रतीचे शिक्षण द्यावे की नाही?_ (_Should Women be given Higher Education or Not?_) he articulated that both men and women should be able to take up whichever job they want, learn whichever skill, take whichever exams, obtain whichever certifications and degrees that they want, get married when they want, and live the married life the way they want - I am convinced that these freedoms will be available to every individual in the future (Agarkar, 1994, Vol. 1, 167). In the face of opposition from several sections of the society, Agarkar held on to the liberal ideas of equality of opportunity, individual choice, individual freedom, and education for women. Agarkar’s treatment of the subject of women’s education was at once insightful, critical and persuasive. He did not hesitate to call out the hypocrisy of conveniently using religion to oppose education for women. He addressed every possible opposition to women’s education in his writings and wrote to convince his readers and rivals alike. He saw the opposition to women’s education as a part of the larger dialectic or what he called as खंडन-मंडन (khandan-mandan). He often treated with serious consideration the most ridiculous of ideas put forth by his opponents with a view to counter them and lead to the synthesis. In _स्वच्छतेसाठी घाणेरडा विषय _(_A Filthy Subject for Cleaning_), Agarkar firmly established the role of a true reformer in the following words : If a particular belief or practice is harmful to the society, then it is the responsibility of the reformer to point out the flaws in it and openly discuss the subject notwithstanding whether the topic is taboo or not (Agarkar, 1994, Vol. 2, 159).   **References** Agarkar, G. G. (1994). _संपूर्ण आगरकर : खंड एक _(Vol. 1). वरदा बुक्स. Agarkar, G. G. (1994). _संपूर्ण आगरकर : खंड दोन_ (Vol. 2). वरदा बुक्स. Agarkar, G. G. (1994). _संपूर्ण आगरकर : खंड तीन _(Vol. 3). वरदा बुक्स. The British Library. (n.d.). _Mary Wollstonecraft, A Vindication of the Rights of Woman_. Discovering our Collections. Retrieved August 02, 2023, from [https://www.bl.uk/collection-items/mary-wollstonecraft-a-vindication-of-the-rights-of-woman](https://www.bl.uk/collection-items/mary-wollstonecraft-a-vindication-of-the-rights-of-woman) [_Previous musing: The Forgotten Legacy of Yashodabai Agarkar_](https://indianliberals.in/content/the-forgotten-legacy-of-yashodabai-agarkar/) [](https://indianliberals.in/wp-content/uploads/2023/09/IMG_4159_Original.jpg) **Avanti Lele** Avanti Lele is a Minoo Masani Liberal Fellow. She is pursuing her PhD in English Literature from Lancaster University. She has worked as a lecturer of English Literature and as a Spanish language instructor. Her research interests include but are not limited to women's writing, liberal feminism, postcolonial studies, indigeneity. --- ## [Musing] Government and Society in a Free and Prosperous Commonwealth URL: https://indianliberals.in/musings/government-and-society-in-free-commonwealth/ ### Body _The excerpt below is from the publication “Natural Order: Essays Exploring Civil Government & The Rule of Law”, authored by Sauvik Chakraverti. _ _The collection of essays explores the concepts of civil government and the rule of law from a philosophical perspective. The book discusses the nature of political power, the role of the state, and the relationship between the individual and society. Throughout the book, Chakraverti engages with classical liberal thinkers such as John Locke and Adam Smith and contemporary political philosophers such as Amartya Sen and Martha Nussbaum. He also draws on examples from history and current events to illustrate his arguments._ _Sauvik Chakraverti was an Indian columnist and author. He wrote extensively on politics, economics, and culture, and his writings often focused on promoting classical liberal ideas and regularly contributed to several Indian newspapers and magazines, including Livemint._ _You can read the original, unabridged version [here](https://indianliberals.in/wp-content/uploads/2023/04/natural-order-essays-exploring-civil-government-and-the-rule-of-law.pdf)._ A free and prosperous commonwealth does not depend for its motive force on any great political leader. On the contrary, the varying degrees of success that different commonwealths achieve rely entirely on the people, their entrepreneurial abilities, their knowledge, and any other advantages they may possess. Such a society is people-driven. The government is on standby to act against those who break the law and nothing else. This, too, at the local level. The word ‘commonwealth’ originates in the ancient term ‘common weal’, which meant ‘common benefit’ or, as it was later called, ‘common profit of the realm.’ The word ‘commonwealth’ means collective decision-making not guided by particular interests. This ‘impartiality’ to special interests has remained the highest ‘value’ of law and government, including civil service. This value was often expressed as ‘an empire of laws and not of men.’ Under such a government and legal system, what matters is ‘how the competition was carried out, not its result.’ The ‘common interest’ of the people comprising a ‘body politic’ thus lay in uniformly applicable laws binding upon all. In English history, the word ‘commonwealth’ is used to describe the Republic government of Oliver Cromwell that ruled between 1649 (the execution of Charles I) and 1660 (the death of Cromwell and the restoration of the monarchy). Cromwell did not accept teh title of king- “We have mot cut off this king’s head in order to steal his crown!”-- and was known simply as “Lord Protector of the Commonwealth.” The word ‘commonwealth’ has all but disappeared from modern political discourse; my modern dictionary of political ideas does not contain the word. This is not surprising when interest group politics has become the norm almost everywhere. Mancur Olson’s _The Rise and Fall of Nations_ analyses this trend and warns of its serious consequences. DESTRUCTION OF THE COMMONWEALTH IN MODERN INDIA The sad story of modern India, free from the British but not free from the machinations of all sorts of particular interests, is a story in which the word ‘commonwealth’ does not feature. If anything, the government of independent India has scripted a story favouring special interests alone: crony businessmen, the vast bureaucracy, and the innumerable public sector enterprises that offer so many opportunities for patronage as well as kickbacks…as the story unfolds, the honest taxpayer is forced to admit that nothing has been done to further those vital interests that all Indians have in common, and for the pursuance of which they are supposed to have come together to set up this republic. The license-quota-permit raj played private interests in a closed economy against each other– but in the end, most of these businessmen gained at the expense of the citizens as consumers. The annual budget was always used to bestow favours by varying tax rates so that competition was affected because relative prices were altered. These ills are still with us. Let us take the example of the import of cars, including second-hand ones, which is the direct path to universal automobile ownership– and thus in the genuine interest of the ‘commonwealth’ because if every Indian owns a car, every Indian is wealthy. However, how the ‘voodoo liberalisation’ of the automobile industry has been carried out has meant that, instead of aiming for an India where everyone has a car, India has become a nation where most Indians own bikes and scooters, some Indians own cars, some foreign multinational car companies are operating small assembly lines for some of the products of their extensive stables, and all the old cronies are still prospering–and yes, in all that, we still have some amount of government ownership in Suzuki India, a company with a commanding market share. Quite clearly, ‘commonwealth’ is not the objective; instead, playing favours in the marketplace–where the government remains a major player– is the dominant ethic(!). The citizen as the consumer has always had his interests sacrificed, so this exploitation is nothing new, but what of the citizen as a taxpayer? Now, customs duties on second-hand car imports are 180 per cent. This means there is zero trade and hence zero revenue collection. The same is the case with imports of wines and spirits, where duties are over 400 per cent and have become a matter of international dispute at teh WTO. At such an astronomical tariff level, there is once again zero trade and, consequently, zero revenue collection. As far as the citizen as a taxpayer is concerned, the overall size of the public treasury is the ‘commonwealth’ – and the bigger it is, the better, provided the collections place an equitable burden on all. In both these cases, if imports had been allowed on low duty, citizens would have gained hugely as consumers–dump the bike and drive the wife and kids in a second-hand Toyota, chuck up the horse’s rum for an inexpensive and healthy bottle of Italian wine. But the citizens would have also gained as taxpayers because huge revenues would have been painlessly collected. If the government had these revenues, it could have avoided imposing a special education tax; indeed, many–if not all– of the new rapacious taxes that have been devised could have been avoided. I recently flew Delhi-Goa by a budget airline. My cheap ticket cost 2100 rupees, but the taxes totalled 1700 rupees! When the government gives up vast amounts of revenue by imposing tariff walls that bar trade, it must collect it by some other means – for it must feed its troops. But the taxpayer loses a great deal in the process because the idea of ‘commonwealth’ has not informed the authorities. Poor citizen! Condemned to ferrying the wife and kids on a motorcycle; Condemned to hauling the wife and kids on a bike; condemned to the uncomfortable autorickshaw when in need of public transport; condemned to the harsh grogs of IMFL, and condemned to cough up the revenues thereby sacrificed to restore the public treasury! How far removed indeed from the idea of ‘commonwealth’? The socialist Indian state is always a predator of the people because it has no principles and always acts according to expediency. In an earlier age, especially in politics, a man without principles would be disgraced. Still, in the _chalta hai_ (it’s okay) times we live in, expediency is considered clever and intelligent, while principled people are considered ‘idealistic’, ‘utopian’ or, worse still, ‘theoretical’. However, the absence of principles in our opponents is ultimately derived from a complete lack of understanding of society, economics and politics– and such a level of ignorance can only spell doom. In the long run, I am confident principles must prevail. Enough of this government! Socialists and protectionists have converted the ‘ship of state’ into a ‘pirate ship’. For the common profit of the realm, a new ‘merchant ship’ must be built. Let us, therefore, turn away from government and consider how free commerce can significantly improve the wealth of every ordinary Indian, thereby augmenting the ‘commonwealth’ via what Adam Smith called the ‘invisible hand’. THE CASE FOR UNILATERAL FREE TRADE Let us start with the most extreme position: Would we Indians, as far as our ‘common profit’ was concerned, lose anything if the customs department was abolished at one stroke and the entire sub-continent became the largest duty-free trading area in the world, wherein every shop, even the paan-bidi shop, was a duty-free shop? Frederic Bastiat, a great free trader who Richard Cobden and the Masnchesterites inspired, gave us the best way to answer this question through a thought experiment: Make an inventory of every possession of every Indian on the night before the abolition of the customs department and then make another such inventory a year later. Will the latter inventory show that the possessions and properties of all Indians have improved or declined? Of course, they will offer a marked improvement. This, the ‘wealth of the nation’, which correctly consists of the wealth of every Indian added up, which is the ‘common profit’, will significantly rise. However, many particular interests would lose out in the competition. But then, impartiality demands that what matters is how competition is played out, not its results. It is then that the ‘common profit’ is realised. There is no ‘right to profit’. Therefore, the antics of India’s minister of foreign trade, Kamal Nath, who walked out of the WTO ministerial in Hong Kong–and who is consequently a protectionist at heart as well as in practice–must be viewed as opposed to the expected profit of the realm: in other words, he is, strictly speaking, an ‘anti-national’. But do we need WTO to trade with foreigners? According to our principle, the government is subsidiary to the natural order that extends beyond our shores. For example, when we order books or music from Amazon.com with our credit cards and receive them without the assistance of any government. Does the freedom to trade with foreigners need our government to meet with other governments to ‘negotiate’ terms? Can we not negotiate terms with our foreign buyers and suppliers much better as free individuals? The best way to investigate foreign trade is, once again, through individualism. Individuals trade, not nations. When individuals trade, reciprocity is meaningless. I do not buy a Nokia phone because the Nokia manager dines in my restaurant regularly. Indeed, I can jolly well buy a Motorola phone and not offend my customer. It is not a ‘just expectation’ that those who believe in you should demand that you buy from them. In the market, there is ‘continuous competition’. The act of buying and the act of selling are two separate acts to which different forces of competition apply. Since reciprocity is meaningless when individuals trade, it must be utterly devoid of all meaning when applied to nations. We do not need the WTO: we must declare free trade unilaterally. If revenue is what the government needs –which is not the situation today, when income is being sacrificed for particular interests – then the customs department can stay, but a flat rate, extremely low revenue tariff should be imposed. Revenues will soar, other taxes can be slashed, and competition will be free and fair because relative prices will be unaffected. I once lectured to a group of students in Panjim, Goa, and the lecture hall on the rooftop overlooking the Arabian Sea. I pointed to the blue waters and asked my class: Suppose you want a car. Will you get it from this direction? Or, I continued, pointing towards the land, from the other side, where Poona lies and where the Bajaj types live? After hesitating, my class said they wanted to get their cars via the sea route. It is a symptom of the absence of principles in the thinking of our rulers that overland trade routes between India and China are being opened in Sikkim and Arunachal Pradesh while the 2000-mile-long coastline is 364 not being opened up to free international trade. When principles do not guide action, nothing makes sense. Madmen or idiots might as well rule us. _Previous musing: [Dr B R Ambedkar on Village Panchayats](https://indianliberals.in/content/dr-br-ambedkar-on-village-panchayats/)_ --- ## [Musing] Grievances in and of the Supreme Court URL: https://indianliberals.in/musings/grievances-in-and-of-the-supreme-court/ ### Body With the four senior judges of the Supreme Court publicly expressing their dissatisfaction with the Chief Justice of India, Vineet Bhalla reflects on the lack of an institutional grievance redressal mechanism in the Judiciary. On 12 January, four of the senior-most puisne judges of the Supreme Court of India invited a[press conference](http://indianexpress.com/article/india/supreme-court-crisis-4-retired-judges-write-open-letter-to-cji-dipak-misra-5024257/) to express their dissatisfaction with the Chief Justice of India (CJI). Speaking up against the arbitrariness in case allocation, a power exclusive to CJI as master of the roster, in a manner unprecedented in the history of independent India, they left no doubt that there has been a complete breakdown of trust and communication between the CJI and the four judges. A key takeaway from this fiasco is that there is no institutional mechanism in the judicial system to address the judges’ grievances. This is symptomatic of the larger malaise of lack of accountability within the Indian judiciary, indicated by, among other things, the Supreme Court’s [resistance](https://thewire.in/124766/judiciary-accountability-transparency-rti/) to the application of the Right to Information Act, and being completely [opaque](http://www.thehindu.com/opinion/editorial/towards-transparency/article19829914.ece) about judicial appointments and promotions till October of last year. It is vital for us to keep in mind that this crisis is as much an indictment of institutional failure within the Supreme Court as it is of the individual occupying the CJI office. That Justice Misra can choose to completely ignore this matter without any ramifications is deeply troubling. Unless the judiciary makes some concerted efforts to whittle down the walls of its closed Big Boys Club (and the reforms need to come from within, since the principles of judicial autonomy effectively insulate it from any outside interference), it could risk losing the exalted status it occupies in the minds of the Indian public. Currently, the unwritten rules of judicial convention dictate administrative matters in the court, from judicial appointments to setting of the case roster. The first step should be, [as suggested by several experts](http://indianexpress.com/article/opinion/columns/supreme-court-crisis-constitution-judiciary-cji-unconventional-wisdom-5026083/), to put these rules out in the form of a written document to act as an express guide to the Hon’ble Judges of the Supreme Court as well as the public on these matters. The Supreme Court is far too important an institution to leave its credibility on the conscience of individuals. As doubts arise over the [silence of the CJI](https://scroll.in/article/865686/one-week-of-top-judges-dissent-to-ride-out-the-crisis-on-silence-is-a-disservice-to-the-people) over the matter, we must all keep this conversation going. What are the different ways in which structural reform can be brought into the workings of the apex court, without imperilling judicial autonomy? _Views expressed are of the author’s, and should not be taken as the stance/opinion of Spontaneous Order or Centre for Civil Society._ --- ## [Musing] Gurajada Apparao: Liberal and Feminist Insights in Kanyasulkam URL: https://indianliberals.in/musings/gurajada-apparao-liberal-and-feminist-insights-in-kanyasulkam/ ### Body _Gurajada Venkata Apparao also called as ‘Gurajada’ was a social reformer and liberal thinker. He is also considered as the pathfinder of modernism in Telugu literature. Through his works, he strongly criticised social evils such as child marriage and dowry. He was a strong advocate for Women’s education and empowerment. He was posthumously awarded the Padma Bhushan, India’s third-highest civilian award, in 1954. _ Gurajada Venkata Apparao was a remarkable literary figure in the late 19th and early 20th centuries, acclaimed for his eloquent contribution to liberal ideas in literature. He was born on September 21, 1862, in Rayavaram village of Visakhapatnam District. Gurajada is regarded as a modernist pioneer in Telugu literature. Kanyasulkam is the first Telugu drama written entirely in spoken dialect. Even after a century of publication, the prose play Kanyasulkam, written in the Visakhapatnam dialect, remains popular. In 1892, Gurajada's acclaimed drama "Kanyasulkam" was staged for the general public. His other works include 'Kukku', an English poem (1882), 'Sarangadhara' an English poem (1883), 'Kondubhattiyam' (1906), 'Neelagiri paatalu' (1907), 'Mutyalasaramulu', 'Kasulu'(1910), 'Bilhaniyam', 'Lavana Rajula Kala'(1911), 'Kanyaka' (1912), 'Subhadra'(1913), 'Dinchu Langaru'(1914) and 'Langarettumu'(1915). Through his works, Apparao challenged the authoritarian and orthodox beliefs deeply ingrained in Indian society and culture. As a pioneer of liberal ideas, he advocated for individual freedom, rational thinking, and empowerment of women and marginalised communities. His exposition of social hindrances and his progressive stance on prevalent social issues made him a revolutionary figure in the literary scene of his era. His works testify to art's capacity to inspire social change and oppose repressive ideologies.  By emphasising individual freedom and progressive values, Apparao consistently encouraged the conception that individuals have the right to live according to their beliefs and desires, free from social prejudices. His works are often linked with themes such as personal autonomy, the pursuit of happiness, and challenging traditional norms and values.  Kanyasulkam is the price paid by the bridegroom to the bride’s family in exchange for the girl in marriage. Kanyasulkam was an evil practice that perpetuated treating women as commodities to be bought and sold. It also forced women into unwanted marriages and relationships.  Apparao’s patron, Maharaja Ananda Gajapati of Vizianagaram, was gathering information on child weddings a decade before Gurajada wrote the play, with the purpose of saving the unfortunate segment of womankind from a galling type of social demoralisation. This heinous tradition pricked the heart of Maharaja Ananda Gajapati. As a member of the Madras Legislative Council, Ananda Gajapati proposed a bill to prevent such marriages; nevertheless, the Committee rejected the bill, and he was unable to bring out the necessary legislation to restrict this social scourge.  Gurajada created Kanyasulkam drama with Maharaja Ananda Gajapati's encouragement. The drama depicts not just Kanyasulkam practice but also corruption, language reform, widow remarriages, child marriages, and prostitution. He used humour to deal with sensitive topics of that age. He dedicated Kanyasulkam drama to Maharaja Ananda Gajapati, who, as a liberal thinker of his time, was deeply worried about societal problems and evils. Kanyasulkam drama centres around Lubdhavadhanulu, an elderly, scholarly, thrifty, and widowed man of means. He is manipulated into a remarriage by a shrewd mediator Ramappa Pantulu, who seeks personal gain. Lubdhavadhanulu's union is arranged with the 10-year-old Subbi, the younger daughter of the determined yet scholarly Agnihotravadhanulu, who intends to marry off his son using the money. Subbi’s uncle Karataka Sastry devises a plan to save her from this marriage. He disguises his student Mahesam as the bride and himself as the bride’s father. Thwarting the alliance with Subbi, Lubhdhavadhanulu is lured into marriage with the disguised student Mahesam.  As the story unfolds, Kartaka Sastry’s insistence on a gold ornament during the wedding causes tensions between Lubdhavadhanulu and Ramappa Pantulu. The latter borrows a gold ornament from Madhuravani, his mistress, to stop the cancellation of the marriage. Kartaka Sastry then performs a rushed, one-night marriage and later escapes from the scene with the Kanyasulkam money. He instructs Mahesam to escape from the scene. After Mahesam escapes, Lubdhavadhanulu is accused of murder.   Amid the confusion, Lubdhavadhanulu is accused of murder when the bride disappears, leading to a legal battle. Madhuravani reveals the truth to the lawyer Soujanya Rao Pantulu, saving Lubdhavadhanulu from a grim fate. The play poignantly exposes the societal pressures, deceptions, and gender-related struggles during its time, weaving a compelling narrative that remains relevant in exploring timeless human complexities.  Coming to the characters and themes of the play, each character is significant since each reflects a distinct social reality of that period. Agnihotravadhanlu, Venkatesham, Girisham, and Madhuravani are the main characters of the play. Especially characters of Girisam and Madhuravani are the finest characters in Telugu Literature which stand for foolishness, immorality, sarcasm, and incongruity.  Girisam can be considered as the main protagonist of the play, if not a hero who represents so-called modernity, western ethos, and embodiment of crookedness with his command over English and philosophy. Readers often regard his character as “a pest, an enemy within”, “evil product of the alliance between traditional and modern social orders on the one hand and patriarchy on the other”. Gurajada created this character to shed light on the plight of the young widows at the hands of exploitative men. Posing as a reformer, Girisam abuses young widows and prostitutes. But Girisam, with all his flaws, is a loveable negative character, much like Mr. Jingle of The Pickwick Papers by Charles Dickens. Probably, Girisam represents the generation of social reformers who have internalised the progressive outlook but not solutions. Another main character of the play is Madhuravani. Born into the family of Devadasis, she is a young, beautiful, and charming woman of 22 years. As a prostitute, her character depicts issues such as the morality of occupation, righteousness, and courage to speak up for oneself. Her dialogues represent dilemma and skepticism about the social reform activity of that time. She displays intelligence and liberal thinking, and as the play progresses, her actions contribute to conflict resolution. Madhuravani challenges traditional gender roles and expectations.  Gurajada Venkata Apparao's legacy as a liberal thinker shines through his unwavering commitment to progressive thought. A literary luminary of his time, he wrote stories that dismantled the chains of convention. Through Kanyasulkam, he ignited a fire of belief in the audience and illuminated a path towards a liberated and equitable society.  References - Rao, V. N. (2011). The indigenous modernity of Gurajada Apparao and Fakir Mohan Senapati. In _Palgrave Macmillan US eBooks_ (pp. 135–152). [https://doi.org/10.1057/9780230118348_6](https://doi.org/10.1057/9780230118348_6) - Srilatha, G., & Siddhartha, P. B. (2018). Language and Culture in Kanyasulkam. _International Journal for Research in Engineering Application & Management_. _Previous musing: [FIGHTING FOR FREEDOM : THE TUMULTUOUS LEGACY OF RAGHUNATH KARVE](https://indianliberals.in/content/fighting-for-freedom-the-tumulous-legacy-of-raghunath-karve/)_ [](https://indianliberals.in/wp-content/uploads/2023/08/IMG_20220724_121630_copy-removebg-preview.png) **Ch Prashanth** Prashanth is pursuing his Master's in International Relations and Politics at the Central University of Kerala. He likes to spend his weekdays at the library or gym. His weekends are spent in front of the television watching the Premier League. --- ## [Musing] Has Private Enterprise Failed? URL: https://indianliberals.in/musings/has-private-enterprise-failed-a-d-shroff/ ### Body With the impending slowdown in the Indian economy, many analysts have wondered if Private Enterprise has failed in India. It is imperative to point out that since the 1950s the failures of Private Enterprises in India have been questioned. In this speech made before the Commerce Graduates' Association in Bombay in October 1956, eminent industrialist, banker and economist A D Shroff points out that despite numerous impediments to growth Private Enterprise in India is alive and flourishing. His words remain as true today as they were in then. For some time past, Private Enterprise in India has been continuously under fire. It has been suggested that Private Enterprise is incapable of undertaking large-scale and rapid economic development of the country. It is also suggested that Private Enterprise only results in the concentration of economic power in the hands of a few people. It is further said that-and it was said only a few days ago by no less a person than the Prime Minister of India in Calcutta-that Private Enterprise and Democracy are incompatible. But the main provocation for the choice of the subject is a speech made by Mr. T. T. Krishnamachari, who was then the Union Minister for Commerce and Industry, at Madurai on 4th of August. In the course of his speech, he observed that “Private Enterprise has failed me”, and that Private Enterprise was not showing either initiative or enterprise. Before I proceed to examine the validity of the various contentions which have led some people to the conclusion that Private Enterprise has failed in this country, I should mention that of all Ministers of Industries since India attained independence, Mr. T. T. Krishnamachari must be acknowledged as an outstanding success. Some of us may differ from him on some of the views he holds and propagates. But I think there is not the slightest doubt that in the discharge of his very high responsibilities as the Minister for Industries, he has shown remarkable drive, energy and understanding of business problems, and above all a capacity for taking quick decisions. It is, therefore, all the more incomprehensible for me that a man of such fine understanding of business and industrial problems and a man who has first-hand opportunities of witnessing from day to day what was being done in the industrial sphere in the last few years, should have preferred to make this charge against Private Enterprise in this country. To quote a Shakespearean phrase, to me it has come as “the most unkindest cut of all”. Before I examine the charge, it is very necessary that I should give you a brief historical review of Private Industry in this country, particularly before India attained Independence. If you look back to the history of Private Enterprise for 60 or 70 years before India attained independence, you must take into consideration the circumstances and the environment under which Private Industry had to struggle. For one thing, we were under a regime, which was quite indifferent and apathetic, if not in some cases definitely antagonistic, to any industrial development in the country. If you for instance study the Tariff Policy of those days, the Transport Policy, or the fixation of Railway freight, all these will show you the conditions under which Private Enterprise had to struggle. ‘Even in later years, when the Government came to adopt-and that too very grudgingly-a policy of discriminating protection, that policy was too halting and unsuited to bring about any rapid development of industries in the country. In spite of all these limitations and disabilities, Private Enterprise was subject to in those days, it was surely I through the enterprise and endeavour of Private Enterprise that India was put on the industrial map of the world and attained the eighth place among the industrial nations in the world. To quote one or two instances; the Cotton Textile Industry (remember only about 40 years ago we used to import every year Rs. 60 crores worth of piece-goods from abroad) has now developed substantially in the last few years when we have become a very important exporter of cotton piece-goods to about 40 to 45 different markets in the world. The very fact that Indian piece-goods should effectively compete with shrewd and established exporters from Lancashire and Japan bears ample testimony to the efficiency with which Textile Industry has been built up in this country. I would also like to remind you of the days when the late Mr. J. N. Tata first thought of starting the Steel Industry. I do not know if you are aware that a leading British businessman of Calcutta ridiculed the idea as a dream, and he even offered to consume every pound of steel made in India! Fortunately for him, he is not alive today; otherwise he would have suffered not a little from indigestion. But the fact of the matter is that a great pioneering effort succeeded in giving India the largest single individual steel-making unit in the British Commonwealth of Nations, and I believe India will be proud also of the fact that she is today one of the most economical and cheapest producers of steel in the world. Take for instance also the development of hydroelectric power-entirely undertaken by Private Enterprise-a tremendous venture in those days, a venture not only in the sense of generating power but even of making Bombay millowners believe that power could be generated and supplied to Bombay mills. You know today what it stands for in the economic life of Bombay. The above two or three instances might show what Private Enterprise, functioning under the limitations and disabilities to which it was subject in those days, could achieve. I may also mention Shipping. Shipping in India against the powerfully entrenched foreign shipping companies almost looked like a dream. It was due to the pioneering effort of the late Shri Narottam Morarji and Shri Walchand Hirachand that Indian Shipping has come to stay and offers today very fine promise of supplying a much-needed complementary transport service to sustain our economy. Even before we attained Independence, in 1944 seven business men of India got together and put before the people a plan for the economic development of the country. The plan was sufficiently ambitious; it involved an estimated expenditure of Rs. 10,0001 crores over a period of 15 years and out of that it envisaged spending something like Rs. 4,4001 crores on development of Industries. I am mentioning this to show that Private Enterprise in India, even before Independence, was fully conscious of the needs of the country and also had faith in itself that it could undertake development on a very large and extensive scale. After 1947 the Government started taking more active interest in the economic development of the country. Private Enterprise also did not fail to assist in the process of development. The curve of industrial production during the last five years has been continuously rising. If you take 1946 as the base year, i.e., 100, industrial production went up to 117.2 in 1951, 128.9 in 1952, 135.3 in 1953, 146.6 in 1954, and in 1955 it stood at 161.5. Let me make it clear that the overwhelming proportion of the increased production was contributed by Private Enterprise because the few State Enterprises which came into operation were mainly confined to the Sindri Fertilizer Factory, the Chittaranjan Locomotives, and the Indian Telephone Factory at Bangalore, etc. If you take the aggregate value of the production, contribution by the Public Sector represents a comparatively negligible percentage of the total. But the more interesting thing was this: if you break up the general index of industries and some of the new industries, taking 1946 as the base year representing 100, the increase has been for Old Industries: ![](https://spontaneousorder.in/wp-content/uploads/2019/11/Capture.jpg) This remarkable increase in industrial production during the past five years in which both old and new industries have equally participated and to which the State Enterprise has contributed comparatively very little ought to give a lie direct to the very charge that Private Enterprise has Failed to do its duty in this country. The index figures I have just read do not convey the whole story; besides this, important new industries were started, for instance Rayon. It was started and is prospering well and perhaps in the course of the next 3 to 5 years India will be self-sufficient in regard to requirements of Rayon yarn. Take again the Steel Tubes industry. Though this project was mooted even before the last war, owing to the exigencies of the War it could not be brought into operation. It has since been started and is one of the important industries in the country. Similarly, reference may be made to automobiles and trucks. These are facts which of course cannot particularly be unknown to the Ministry of Commerce and Industry. They are there to tell their own story. But I would not like to quote anything which comes from private enterprise itself. Here is a statement made by the Planning Commission in a publication which is entitled “Progress of Industrial Development 1956-1961”: “New investment on industries in the public sector during the First Plan was expected to amount to about Rs. 94 crores. The actual outlay according to the latest estimates has only been about Rs. 57 crores. Investment by the Private Sector on new projects and expansion programmes was expected to about Rs. 233 crores and the latest estimates indicate that the actual investment has been of this order.” There is a body called the Industrial Finance Corporation of India-one of the few financial institutions which have come into existence after India attained independence. It has just published its 8th Annual Report in which it is stated that the total amount of loans sanctioned has risen from Rs. 9.5 crores in 1951 to Rs. 43.20 crores in 1956, and the number of applications for loans received have doubled from 43 to 86 during the course of the last 2 years. Further, from the office of the Registrar of Jt. Stock Companies, you will find that the number of joint stock companies registered and in actual operation have risen from 22,675 in 1947-48 to 29,779 in 1954-55. You must be aware that one of the important new pieces of legislation after independence is the Industries (Development and Regulation) Act of 1951. Under this Act, you cannot put up a factory without obtaining a licence. According to the latest figures available, for 3 years up to 1955, out of 1,440 applications made to the Government for licences, 1,142 were granted. Of these, there were 363 licences for new schemes, 657 for expansion schemes and 122 for organisational changes without additional capacity. I have referred to these few facts to confirm that private enterprise is not only alive, but is kicking all right. Private Enterprise would have shown perhaps a much better and a more impressive record of achievement, if it had not to work under a certain set of circumstances of which you are all so painfully aware for the last few years. I was on a Committee, which was asked by the Reserve Bank to consider the circumstances under which Private Enterprise was functioning and to explore ways and means of helping Private Enterprise particularly in the financial sphere. We had a very good opportunity of studying the situation in different parts of the country, and the unanimity of opinion which was represented to the Committee was that Government’s economic policy in the last few years had created an atmosphere of uncertainty in which naturally incentives are likely to be at a low ebb and that capital had been rendered very shy. Even if you refer to the First Industrial Policy Statement of April 1948, the threat of nationalisation which was uttered in respect of basic industries has served as a serious disincentive to further industrial effort in the country. Nationalisation of Airlines dealt a very serious blow to confidence and, as a matter of fact, it has created an atmosphere of crisis of confidence which still continues. I am very surprised that the charge of lack of incentive or enterprise should be laid at the door of Private Enterprise when it is too well known that it was only through Private Enterprise that a first-class international air service was built up within a comparatively short period. Nationalisation of Airlines gave a rude shock to confidence amongst the investing public and since then we have found it increasingly difficult in attracting the average investor to subscribe to any fresh industrial enterprise. Nationalisation of the Imperial Bank and recently Nationalisation of life Insurance have dealt further blows to Private Enterprise and have made capital more and more shy. I have been trying to look up the new Industrial issues during the last 8-9 months, and I have not come across, perhaps with the exception of one or two, any public issues for new industrial enterprise which has been supported by the investing public. The Industrial Policy statement of this year has certainly created further apprehensions not only in the minds of business men but of the investing public in general. The tragedy of the situation is this-that with a few exceptions, Indian business men and Indian public in general have not shown any due apprec6ation of the implications of this policy. Even a man like Sir John Strachey, who visited India some months ago, in his report has pointed out, although he is a man who has a definite Leftist bias, he was really surprised that when the Industrial Policy Statement was issued some Indian business men definitely welcomed it, while, most of them in general showed apathy or indifference about it. I will now come to the second criticism, viz., that “Private Enterprise results in concentration of economic power”. In this connection, I have particularly to ask members of the Commerce Graduates’ Association to read an article which recently appeared in the Tata Quarterly of April-July which deals in detail with some structural aspects of industry in India. The article in a very objective manner examines the problem whether in view of the fact that particularly in the last few years when demand has been outstripping the supply position generally in the country there has not been a trend towards the establishment of a sort of monopoly by Indian Industrialists. If you study that article, you will agree with the writer of the article that applying any test, which is usually applied to the scrutiny of the establishment of a monopoly in any branch of economic activity, you will come to the conclusion that no such thing has happened in India. The establishment of a monopoly for one thing suggests that those who are interested in the manufacture of particular products or commodities get together and manipulate the prices of these products or arrange production in such a manner that prices can be whipped up to the detriment of the community in general. An examination of the working of a number of leading industrial units in India, relating the price trends to the growing demand for the products, will lead to the objective conclusion that there is no basis of even an attempt to establish monopoly in #any of these industries in India. But when critics talk of concentration of economic power, they do not so much mean the establishment of monopoly, but what they really mean is that there are only a few industrial firms which are interested in a large number of industries, and, therefore, exercise control over them. In the first place, I need hardly point out that this betrays a lack of understanding of the basis of Joint Stock Enterprise. The basis of Joint Stock Enterprise is this: however big, influential and wealthy a firm may be, the magnitude of modern industrial operations is of such a character that no single firm can get together all the monetary resources to make any such enterprise possible. For instance, in one of our leading companies, the Tata Iron and Steel Company, there are about as many as 42,000 shareholders. It is true that the creditworthiness of some of the firms in India, their past record of achievement, enabled them to mobilise the savings of hundreds and thousands of small investors which alone make industrial enterprise in the modern sense possible. Legislation was recently undertaken in the shape of amendment to the Indian Companies’ Act which goes far enough to break any such concentration if it exists in the country. But conceding for a moment, the concentration of economic power in the hands of a few people, it is forgotten that in an underdeveloped country like India you cannot expect hundreds and thousands of people who could be promoters of industries. If one studies the economic history of a country like Japan, for instance, or even of Germany, it is the pooling of resources and the working together of two or three big firms which made possible the industrial progress achieved in these countries. There is one other important reason which might explain why industrial development in the last few years could not be quicker than what it has been. We who work in the private sector are believers in planned development. Planned development does assume some sort of regulation. But such regulation should not become restrictive as it has been in India. Take for instance, the Industries Development and Control Act and the licensing scheme which it has put up. Even if you think of starting an industry on your own, unless you satisfy certain norms which have been established by the Planning Commission, you are not likely to get permission to go into that industry. There are also certain administrative procedures and my Committee was particularly shown definite instances of administrative procedures where so much of red tape was involved that a number of industrial proposals which were put up in Madras and Bangalore had to be abandoned since the promoters got simply tired of travelling from Bangalore and Madras to New Delhi and back. It is not out of place to point out to the Government that in the interest of the industrial development of the country, some of these administrative procedures will have to be considerably simplified. Another subject of topical interest is the publication of a letter addressed by Mr. Eugene Black, Chairman of the World Bank, to our Finance Minister, Mr. T. T. Krishnamachari. The genesis of the letter is this: a few months ago, the World Bank sent out a mission-the World Bank has the practice of sending out missions to different countries getting loans from the Bank to make periodical surveys of economic conditions in those countries. The mission, after surveying the situation and after having very intimate talks with Government officials, Planning Commission and Ministers, submitted their report to the World Bank. In that Report, within the short space of about 18 paragraphs, the mission has highlighted the main elements of our economic situation. In one paragraph the mission writes thus: “The importance of private enterprise in the continuing economic development of the country is another factor which we would like to stress. We appreciate that the Second Five Bear Plan offers an opportunity for the ‘co-existence’ and simultaneous expansion of both the public and private sector and we have noted with gratification that the Prime Minister and other responsible Ministers have emphasised the need for Private Enterprise. Nevertheless, we believe that the importance of private business has not yet been sufficiently recognised and publicized. The record bears out the fact that private enterprise has performed creditably during the last five years with respect to both investment and production. In the organised sector of manufacturing and mining private business has contributed 90% of the increase in net output during this period. Owing to the capital-intensive nature of much of the contemplated public investment in Industry and mining during the Second Plan, Government plants and mines are expected to contribute only 29% of the anticipated increase in net output of mining and manufacturing as compared with a 54% share in the total planned investment. On the other hand, private business in this sec- tor is expected to account for 71% of the rise in net output. Considering the probability that the villages and small-scale industries may fall considerably short of the targets set for them by the Plan, the importance of the organised private sector becomes even more evident. It is, therefore, vital that the private sector be given adequate incentives and resources to enable it to make its requisite contribution.” On the basis of this report, Mr. Eugene Black addressed a letter to our Finance Minister, Mr. T. T. Krishnamachari. In the course of that letter Mr. Black has said: “In making my own comments, I should like first to emphasise once again my conviction that India’s interests lie in giving private enterprise, both Indian and foreign, every encouragement to make its maximum contribution to the development of economy, particularly in the industrial field. While I recognise that the Government itself must play an important role in India’s economic development, I have the distinct impression that potentialities of private enterprise are commonly under-estimated in India and that its operations are subjected to unnecessary restrictions there.” This letter has created a little flutter in certain dovecots. I do not know on how many occasions we have been told by the highest in the country that distinguished foreigners who are visiting India have been terribly impressed with the progress that this country is making. This is perhaps the first occasion when a friendly critic has dealt with a few things in a very outspoken fashion. I can personally vouch for one thing-that Mr. Eugene Black is a real and sincere friend of India. I have reasons to tell you that he earnestly desires that India should develop economically at a rapid pace. But Mr. Eugene Black also is a man who by his extensive knowledge of conditions in different parts of the world is convinced that there are certain well-proved and well-tried methods of economic development which have resulted in substantial progress in many countries of the world and there is no reason that one could see of a hasty departure from these proved and well-tried methods. It is after a very close study of conditions in India as reported to him by the mission, and also because of the great personal interest he takes in watching the progress that India is making, that he has expressed views and tendered some advice which one could expect will be taken in the same spirit in which it was offered. I must say that the reply given by the Finance Minister is a very courteous, dignified and understanding reply. On the other hand, the criticism that we hear from other quarters appears to be rather unwarranted. It appears to be based again on the same thing to which Mr. Black refers–doctrinaire and ideological approach to the problems. There are certain people highly placed in this country who simply refuse to come down to earth and face problems in a realistic manner. I would like to pay my personal tribute to Mr. Black for the service he has rendered to India particularly at this critical juncture when we want a little more realism in the formulation and implementation of our economic policy. I am not referring to other parts of Mr. Black’s letter or to other suggestions which have been made by the World Bank Mission. I am glad that the views held by some of us are being fully confirmed by the conclusions given by the World Bank Mission in its report in a matter like the Textile Policy. The textile problem is a very simple problem provided it is approached in a realistic way. Money worth crores is being pumped into circulation. How many people, who had no employment before, or who had no adequate employment, have started earning! In a poor and underdeveloped country like India, the two essential things to be provided are – food and clothing. The demand for food and cloth is on the increase and if our economy is to be sustained on a largely independent basis, it will be the first and primary responsibility of Government to see that demand does not outstrip supply. It is a very simple problem, and instead of tackling the problem in a realistic way, ideological and doctrinaire approach is brought to bear on the solution of the problem, with the result that there is nothing else but tinkering with the problem. Merely putting additional excise duties or advertising what are considered as fair prices will not result in producing additional cloth which is being needed every day by the country. There is, however, one very interesting statement made by Mr. T. T. Krishnamachari in his reply to Mr. Black’s letter. Mr. Black refers to State Enterprises and Private Enterprises, and Mr. T. T. Krishnamachari of course thinks differently on the relative importance of the two sectors. He makes a bold statement that although the experience of State Enterprise has not been very long, at least in some cases State Enterprise has been found to be more efficient than Private Enterprise. In the course of my activities in the Forum of Free Enterprise, I have had to answer questions in different places. In Calcutta I was pointedly asked whether I had any opinion to express on the working of State Enterprises. In any case, it would be fair to State Enterprise to say that the experience has been so short that it is premature to express any definite opinion. However, since Mr. T. T. Krishnamachari has found it fit to make up his mind that State Enterprise had been in some cases more efficient than Private Enterprise, I can only suggest to him that he should ask for some impartial assessment of the problem. We, in Private Enterprise, are very willing to learn. The more we learn and the more we improve; it is better for us and the country. Therefore, if Mr. T. T. Krishnamachari would call for an impartial assessment of the working of State Enterprise, Private Enterprise will have a lot to learn. Finally, I will examine if Private Enterprise and Democracy are incompatible. Coming as it does from the highest in the land, it does need very close consideration and examination. I would, however, like to state that there are a number of thinking people in India who not only do not agree with the view but on the contrary honestly believe that if Free Enterprise is not allowed to continue in this country, subject of course to our accepting planned development of the country and the necessary regulations involved, and if Free Enterprise is going to be thwarted and restricted in its operations, it can only result in a serious diminution of the democratic way of life if not its ultimate destruction. I for one have been thinking for some time past and trying to understand if this statement could be correct-that Private Enterprise and Democracy are incompatible. Either I do not understand the content of democracy or I cannot understand the meaning of the statement “Private Enterprise and Democracy are incompatible.” As a matter of fact, we, particularly in the Forum of Free Enterprise, find our view confirmed by thousands of people in the country that Democracy, which is a blessing we enjoy and the Democratic way of life which has been assured to us in our constitution, is likely to suffer very severely if Free Enterprise is not allowed to be practised in this country. _Access the original document [**here**](https://indianliberals.in/forum-of-free-enterprise/has-private-enterprise-failed-ad-shroff-230ct-1956.pdf)._ _First Published by the Forum of Free Enterprise in November 1956._ _Other editions of the publication can be accessed at [**Indian Liberals**](http://indianliberals.in/index), an open, multilingual digital archive committed to preserving liberal voices in the Indian public sphere._ [**Read More SO Musings**](https://spontaneousorder.in/?s=SO+Musings) --- ## [Musing] Have We Lost Our Will To Be Free? URL: https://indianliberals.in/musings/have-we-lost-our-will-to-be-free/ ### Body _C Rajagopalachari’s “Have We Lost Our Will To Be Free,” written in 1965, speaks about the difference between freedom from British rule and freedom in its true sense. He suggests that the people should be free from the excessive control by a State-Socialist Economy and should not succumb to a slave mentality. This essay was published in ‘Souvenir’ at the Swatantra Party’s Sixth National Convention in 1973 after he passed away._ _You can read the complete, unabridged version [here](https://indianliberals.in/swatantra-party/sixth-national-convention-swatantra-souvenirs-1973.pdf) ___ Shortly after the Philadelphia Convention, the story goes that a lady asked Benjamin Franklin about the nature of the Constitution hatched at the convention, to which he replied "We have given you a republic, madam if you can keep it." In 1947 we were emancipated from British sovereignty. We were made free. But in the course of time, the Government into whose hands we placed ourselves has, in the name of socialism, taken away all the economic freedom that the citizens enjoyed for thousands of years, and the people have shown little inclination to resist this usurpation, the will to be free not being exercised.  Two elements are relevant in this connection. One is the basic human desire to be free or its obverse, the dislike to be ruled by any external authority. The other element is the economic rationality of socialism, apart from the question of the citizen's liberty. Even when the second point is thoroughly discussed and accepted, viz., the irrationality of disregarding natural laws and seeking to increase production and furthering prosperity through bureaucratic management, replacing private ownership and private management, the economic conviction does not take shape in action, where the will to be free is not strong enough but has been weakened by long sufferance of foreign rule. People appear to be quite willing to suffer bondage as they did before 1947.  Freedom rests not on constitutions but on the will to be free. Freedom endures only in the measure and only so long as this will last. Liberty lies in the hearts of men and women. When it is not there burning and alive, no constitution, no law, no court can save it, as an American judge put it. Often have I felt surprised when at by-elections the Congress Party won in spite of widespread dissatisfaction with Congress rule and disapproval of Congress policies shown beyond doubt at vastly attended public meetings? I have asked myself the question, why do these people get into the Congress lorries and buses and jeeps and go and vote for shackles? Is it to be attributed to bribery? Or the terror of pains and penalties likely to issue from disobedience? Surely, I have said to myself, this cannot be. This absence of the will can resolve the puzzle of being free. Gandhiji used to call it slave mentality. He fought hard to eliminate it. But the reaction was just anti-Britishism, not, as we now regretfully realize, the positive love of freedom and a readiness to sacrifice for retaining those precious possessions against anyone interfering with it. 'Our' own Government can be as great an enemy of freedom as any foreign usurper. The problem is, therefore, how to revive this will to be free and to recover it from the terrible entanglements of the State-socialist economy. It was not so entangled when the British Parliament governed us. Controlled production, controlled prices, and other similar controls mean in the ultimate analysis controlling of persons. Under a controlled economy, it is persons, not things, who are told by some persons who are collectively called government what they must or must not do. It is this that goes contrary to respect for human personality, gradually robs the victims of the will to be free, and develops in the government a hunger for owning slaves. Happiness, even mere physical happiness, requires not only food, clothing, and shelter; but also a sense of freedom. A shortage or total deprivation of any of these essentials makes men and women unhappy. Whether the rope that strangles human beings is made in England or elsewhere or is indigenous make, makes no difference. Men and women can by continued force be got to accept unhappiness as a normal condition either by society or governments. And this can be carried up to a point when protests and resistance disappear, and they even prefer a state of dependence to the responsibility which goes with freedom. One may wonder whether the electorate in India has come to that stage; or whether we can save ourselves from that sub-human condition. The Swatantra Party hopes that this is possible. It has been truly said that every significant movement in history has been led by one or just a few individuals with a small group of energetic supporters. We saw it not so long ago in Gandhi’s Swaraj movement in 1920, which came like an accident on top of the Khilafat movement. Liberation from the present permit-license-raj will come, too, in that way. _Previous musing: [Profit-Shy Asians (1957)](https://indianliberals.in/content/profit-shy-asians-by-kd-valicha/)_ --- ## [Musing] Hindi Raj and Hindu Raj URL: https://indianliberals.in/musings/hindu-raj/ ### Body All attempts to sustain and promote the national and emotional unity of India are gravely thwarted by the imminent threat of Hindi Raj and the potential threat of Hindu Raj. This is an excerpt from an article written by P Kodanda Rao for the July 1962 issue of The Indian Libertarian Journal. “Normally, if people desire anything, for pleasure or profit, they seek it voluntarily and without official pressure. For instance, more and more people are travelling by rail, road, air and water, voluntarily and without official coercion. The voluntary demand for educational facilities has far exceeded the current supply, and more students are voluntarily seeking education in science and technology than in arts because of their superior usefulness. Similarly, if Hindi has any all-India value, it will be sought after without the unconscionable pull and push of the mighty Government of India armed with enormous persuasive and coercive powers and only too willing to use them ruthlessly. English, on the other hand, because of its intrinsic merits, is being sought voluntarily, in spite of discouragements and restrictions imposed by the Government… … Hindi Raj is a sinister advance guard of Hindu Raj. The Government of India, with Its Hindi mania, is, consciously or unconsciously, playing into the hands of Jan Sangh and RSS. The patriotic and nationalist Indians, who would stave off the twin calamity, must bestir themselves before it is too late and bring into operation maximum constitutional pressure on Hindi Government and Hindu RSS by agitating immediately for _English Ever: Hindi Never_.” _Access the full document [here.](http://v2.indianliberals.in/~_admin/pdflanguage?id=654359818.pdf)_ _First Published in The Indian Libertarian – September 1958_ _Other editions of the publication can be accessed at [Indian Liberals](http://indianliberals.in/index), an open, multilingual digital archive committed to preserving liberal voices in the Indian public sphere._ --- ## [Musing] Gurcharan Das: Champion of liberal ideals URL: https://indianliberals.in/musings/gurcharan-das-champion-of-liberal-ideas/ ### Body _Gurcharan Das is a prominent liberal thinker promoting individual freedom and free market economics. His critical analysis of inequality, socialism and the pursuit of fairness continues to shape India’s liberal discourse. This article narrates different ideas and viewpoints of Gurcharan Das through his works._ Gurcharan Das is an Indian author, liberal thinker, and acclaimed public intellectual known for his wise writings on various aspects, including economics, politics, culture, and society. He was born in Lyallpur (present-day Faisalabad, Pakistan) on October 3, 1943, and grew up in India after his family left following the partition.    Das attended Harvard University and had a successful career in business and management. He worked in various roles for several international organisations, including Procter & Gamble, which equipped him with a thorough awareness of the economic and corporate world.  His primary passion, however, was writing and contributing to India’s intellectual dialogue. He quit the corporate world in the late 1990s to pursue a full-time career as a writer and political pundit. He is now primarily considered a leading contemporary liberal author and commentator in India.  As a liberal figure, Das advocates for individual freedom, limited government intervention, and free-market economics. His book “India Unbound: From Independence to the Global Information Age,” published in 2000, is one of his critically praised works. Das provides a detailed account of India’s economic journey since independence, analysing the country’s transformation from a closed, socialist economy to an open, market-oriented one.  Some of his other influential works include "The Difficulty of Being Good: On the Subtle Art of Dharma," which delves into the concept of dharma and its relevance in modern times, and "The Elephant Paradigm: India Wrestles with Change," in which he reflects on India's distinct cultural and historical identity in the face of globalisation.  In one of his articles titled “Worry about Opportunity, Not about Inequality”, Das explores the rhetoric of inequality, presenting a thoughtful perspective on economic inequality and its implications for India’s social and political landscape.  One of the key takeaways from the article is the recognition that the pursuit of absolute equality might be idealistic but impracticable. Human nature pushes us to seek fairness and justice, yet achieving complete equality in all facets of life is complicated.  The Russian Revolution of 1917 was a significant event in world history. Attempting to create an egalitarian society, the Bolsheviks aimed to overthrow the Tsarist monarchy from power. The idea was to establish a classless society that pledged equality and prosperity for all. The reality of pursuing absolute equality led to a series of failures that culminated in the collapse of the Soviet Union.  The Soviet Union in 1922 embarked on a program of central planning and state control over the economy. The measures initiated were the nationalisation of industries, agriculture collectivisation, and planned economy establishment. The results were production inefficiencies, shortages, and misallocation of resources.  India’s quest for economic equality during the Nehru era severely impacted the economy. Nehru’s socialistic tendencies hurt India economically. Between 1947 and 1990, the license raj was in place as a system of licenses and regulations to regulate the Indian economy and promote growth. However, it stifled the economy by creating bureaucratic red tape, making it difficult for businesses to operate. India missed out on opportunities for economic growth during this period.  Das is an ardent critic of socialist societies. He wrote, “If greed is the vice of capitalism, envy is the flaw of socialism”.  The Soviet Union was plagued by envy, which arose more commonly between near equals than those widespread in fortune. As an egalitarian liberal, John Rawls said, “A person who envies another is prepared to make both persons worse off to reduce the gap between them.” Socialist societies not only produce envious citizens, but it also kills the hardworking instincts of their subjects. Thus, socialism ruins the fundamental human incentivisation of work, the reward.  Gurcharan Das presents a different viewpoint on inequalities and how societies accept inequalities. In his article, he writes, "We accept inequalities if we believe them to be fair”. A [study](https://www.pewresearch.org/social-trends/2020/01/09/views-of-economic-inequality/)conducted by the Pew Research Center in the United States Of  America found that Americans are more likely to accept inequalities if they believe it is due to hard work and talent rather than luck or privilege. If the rich pay their taxes on time, create employment, and generate wealth for the nation, then the inequalities that rose during this process are justified. [Figures](https://www.oxfam.org/en/india-extreme-inequality-numbers)reported by Oxfam International suggest the widening gap between the rich and the poor in India. The gap occurs mainly due to a lack of opportunity for the poor oppressed classes. Das [analysed](https://timesofindia.indiatimes.com/blogs/men-and-ideas/modis-moment-is-about-middle-class-dignity/)the power shift in the 2014 general elections from a socio-economic perspective. While the UPA promised jobs for the unemployed, the general public was tilted in favour of the BJP, which promised to create 2 Crore jobs every year if it came to power. The difference here was that the UPA’s approach towards job creation was solely based on employment guarantee schemes, whereas the BJP promised jobs based on “Development”. This development included creating economic systems that allowed Individuals and Firms to pursue their interests in an enabling environment. Apart from employment creation, the BJP pledged to reduce corporate taxes and simplify the tax system. In short, the government was liberal in its approach towards complex issues such as unemployment, corporate taxation, economic growth and infrastructure improvement. While the government’s intent is positive, more must be done to fuel India in the right direction.   Das is also an ardent supporter of a robust education and healthcare system. Indeed, they are essential for individual development and the overall well-being of a nation. A robust education system provides the knowledge and skills to improve employment opportunities. A robust healthcare system ensures universal access to quality healthcare, providing people with proper facilities to stay healthy and lead productive lives. Education and Healthcare are thus powerful tools to reduce inequalities because of their potential to level the playing field for everyone. As both sectors play a decisive role in shaping the life of citizens, the State must play an enabling role to ensure the delivery of Progressive Education and Quality healthcare services. Education and Healthcare essentially provide the environment for equality of opportunity.  Gurcharan Das’s writings and his liberal ideas have profoundly impacted India’s intellectual landscape. His staunch advocacy for individual freedom and equal opportunities has left a legacy for young thinkers to follow. Through critical analysis of issues and events, he challenges societies to seek pragmatic solutions that prioritise individual growth and fairness.  References - Das, G. (2014, June 1). _Modi’s moment is about middle class dignity_. Times of India Blog. [https://timesofindia.indiatimes.com/blogs/men-and-ideas/modis-moment-is-about-middle-class-dignity/](https://timesofindia.indiatimes.com/blogs/men-and-ideas/modis-moment-is-about-middle-class-dignity/) - _India: extreme inequality in numbers | Oxfam International_. (2022, September 9). Oxfam International. [https://www.oxfam.org/en/india-extreme-inequality-numbers](https://www.oxfam.org/en/india-extreme-inequality-numbers) - Mitchell, T. (2020, January 9). _2. Views of economic inequality_. Pew Research Center’s Social & Demographic Trends Project. [https://www.pewresearch.org/social-trends/2020/01/09/views-of-economic-inequality/](https://www.pewresearch.org/social-trends/2020/01/09/views-of-economic-inequality/) _Previous musing: Dr Muthulakshmi Reddi: Beacon of Women's Liberty_ [](https://indianliberals.in/wp-content/uploads/2023/08/IMG_20220724_121630_copy-removebg-preview.png) **Ch Prashanth** Prashanth is pursuing his Master's in International Relations and Politics at the Central University of Kerala. He likes to spend his weekdays at the library or gym. His weekends are spent in front of the television watching the Premier League. --- ## [Musing] Homi Mody: Free Enterprise & Foreign Exchange URL: https://indianliberals.in/musings/homi-mody-free-enterprise-foreign-exchange/ ### Body The following text was originally delivered as a presidential address at the Annual General Meeting of the Employers' Federation of India in Calcutta by Homi Mody in February 1957. The text was published by the [Forum of Free Enterprise.](https://indianliberals.in/content/two-alarming-phenomena-by-sir-homi-mody-mr-s-l-kirloskar-and-mr-ramnivas-r-ruia-february-1957/) In my speech last year, I had commented at some length on the Second Five-Year Plan, examined its targets and the resources available and had pressed for a little more gradualness in the process of transforming our age-old economy. I had also expressed my apprehensions with regard to the imposition of penal taxation, widening controls and consumption curbs, which were calculated to cause considerable hardship to every section of the people. Mr. K.C. Neogy, a member of the Planning Commission, subsequently voiced similar apprehensions and uttered a warning that inflation, progressively heavy taxation and rigid controls might well set in motion forces of reaction and demoralization at different levels of society. Mr. John Strachey, a British labour leader and economist who had visited India recently, also expressed the view that the danger of serious inflation developing, was real. Similarly, the World Bank, after an investigation by its representatives on the spot, arrived at the conclusion that the Plan was too ambitious and that, insofar as the public sector was concerned, the targets were too high to be completed within the time limit of five years. Recent developments have lent point to these observations. The problem of foreign exchange, particularly, has become very acute. The total requirements of the Plan had been estimated at Rs. 1,100 crores. It was recognised that, without a liberal measure of assistance from the U.S.A. and under the Colombo Plan, it would be difficult to meet these requirements. The experience of the last nine months shows that the planners have underestimated the foreign exchange component of the large investment programme which they wanted to undertake. It was intended to spend, over the five years, Rs. 200 crores from the exchange reserves of the country, consisting mainly of sterling balances. This amount has, however, been spent during the first nine months of the Plan. Foreign exchange resources can only be obtained by stepping up the export trade of the country and by securing foreign aid and investment and it is hoped that, as a result of the recent visit of our Prime Minister to the U.S.A., American aid will be forthcoming in a larger measure than might otherwise have been the case. It is not likely, however, to cover the entire gap in India's foreign exchange requirements, and it is to be seen to what extent the measures which the Government have adopted will relieve the situation. So far as the development of the industry in the private sector is concerned, they are bound to have adverse effects. The action taken to restrict import licenses for capital goods to those cases only which would not involve large foreign exchange commitments, or in which assurances of long-term credit or deferred payment on the part of foreign manufacturers have been obtained is an instance in point. In consequence of the stepping up of the investment in the State sector from Rs. 4,800 to Rs. 5,300 crores, the difficulties pointed out last year have been further aggravated. As deficit financing of the order of Rs. 1,200 crores is in itself likely to give rise to dangerous inflationary pressures, the higher investment would obviously have to be sought to be met chiefly by means of additional taxation, as an upward revision of the resources to be obtained through loans and small savings, rai1way receipts, provident funds and other deposits would add up to a small amount. Taking into account the uncovered gap of Rs. 400 crores, which cannot be bridged by any other means except by fresh impositions, the total additional taxation which may have to be resorted to would reach an alarming figure. Even after implementing all the proposals of the Taxation Enquiry Commission, additional revenue of such proportions would be impossible to secure without disrupting the entire economy. It is unnecessary to emphasize that the objectives of the Plan command wide-spread support and, if there are differences, they relate to the manner and method of implementing them. I have no doubt whatever that, in a matter of a couple of decades, India is bound to become one of the most important industrial nations of the world. The real issue is whether, in the process of achieving such a position, policies are to be pursued which would strain the economy of the country to breaking point and whether the fundamental liberties and democratic institutions which are ours today would remain intact and inviolate. Since liberty is never lost at one stroke, but by a gradual and step by step abridgement, it is necessary that the closest scrutiny should be applied to Governmental measures purported to be taken in the general interest. Equally necessary it is to ensure that the steady and progressive development of the country's resources is not jeopardized by any hastily conceived measures to force the pace.  The revised Industrial Policy Statement issues in April 1956, was welcomed by some of us, as at least a clear enunciation of future policy and as affording a promise of co-existence to the private sector in a defined sphere. However much we may deplore the fact that the policy which was announced displaced the private sector from a number of industries which are its legitimate sphere of activity, we felt it embodied some valuable assurances which we had sought. We had the promise of adequate assistance in fulfilling the role assigned to free enterprise, and we had the assurance that there would be no precipitate encroachments on the private sector of the economy. We were, therefore, greatly surprised by the announcement that the Government had decided to take over, by executive fiat, the internal trade in cement and other commodities. No valid reason was advanced in support of this drastic action. We were vaguely told that State trading had become necessary for facilitating trade with communist countries. Whatever the validity of this argument, the subsequent extension of the limits of State trading afford another example of the snow-balling effect of power in the hands of the Government. Commerce and trade are so essentially the province of individual enterprise and so little suited to bureaucratic handling that we cannot but look upon this action as the severest encroachment, to date, on the functions of private enterprise.  Measures have also been taken to curtail the resources available to the free sector of industry to carry out its allotted tasks. The recent imposition of fresh taxation of an unusual character and the proposal for compulsory deposit of reserves announced by the Finance Minister have created a crisis of confidence at a moment when all available resources need to be employed in utilizing, to the fullest extent possible, the productive capacity of the country. In the present political climate, it may appear an academic exercise to assess the proper role of the State in economic matters. But all over the world, thought is being given to the question, and even socialist thinkers are deprecating the arrogation of unlimited power by the State. In this connection, it may be profitable to recall a dictum of Abraham Lincoln: "The legitimate object of Government is to do for a community of people whatever they' need to have done, but cannot do at all, or cannot so well do for themselves in their separate and individual capacities. And in all that the people can individually do as well themselves, Government ought not to interfere.''  _Previous musing: _[CONSUMER SOVEREIGNTY LEADS TO RAPID ECONOMIC DEVELOPMENT](https://indianliberals.in/content/consumer-sovereignty-leads-to-rapid-economic-development/) --- ## [Musing] Any Hope for Indian Liberals? URL: https://indianliberals.in/musings/hope-for-indian-liberals/ ### Body In this article, late Sharad Anantrao Joshi, President of the Swatantra Bharat Paksh, questions if there is any promise to Indian liberalism and comes to the conclusion that despite plenty of gloom, history has ample evidence that liberty blossoms in the most unexpected of places and at seemingly impossible times. _The ancient “Vedanta tradition was a cradle of liberal tenets. The liberalism of ancient India, however, got suppressed under successive foreign rulers. Even the forces that came along with the freedom movement were all statist in the sense that they all favoured a strong interventionist state and even Gandhi’s anarchism proved to be little more than a scoring point with them. Today, with the fall of the Nehruvian model, there still seems to be little hope for the liberal democrats. With the Government itself resorting to blatantly populist measures, a serious programme of liberalisation would require the restoration of law and order, clearance of the Aegean stables of the judiciary, further pruning of the forest of economic regulations, dismantling of the bureaucracy, restoration of fundamental rights under the constitution and the working out of a reasonable exit policy._ Liberalism is far from being the dominant or even the mainstream school of thought in India. Worse still, most consider liberalism as an idea imported from abroad and as being derogatory to national pride. Within the country, the cry goes, that liberalism suits the convenience of the affluent and the strong minority and militates against the welfare security net that the weaker masses of the society need so badly. The defunct Nehruvian Socialism is being replaced not by the vibrant forces of liberal entrepreneurship but by lumpen chauvinistic and communal jingoism… …**But history has ample evidence that liberty blossoms in the most unexpected of places and at seemingly impossible times**. The world is moving towards demolishing walls that have fragmented and distorted the world. India could not remain for long an island of statism. Indian history shows that people believe in minimal decencies and are capable of fighting against tyrants if a Gandhi comes along. An Indian Hitler will have to be exceptionally lucky to survive for any length of time. This much hope ought to be enough for seekers of liberty and equality. _Access the full document [here](http://v2.indianliberals.in/~_admin/pdflanguage?id=477849139.pdf)._ _First Published in The Liberal Times – November 1995_ _Other editions of the publication can be accessed at [Indian Liberals](http://indianliberals.in/index), an open, multilingual digital archive committed to preserving liberal voices in the Indian public sphere._ --- ## [Musing] Humanism, Science and Rationalism URL: https://indianliberals.in/musings/humanism-science-and-rationalism/ ### Body _Produced below is a piece published in the[February 1961 issue of the Indian Libertarian Magazine](https://indianliberals.in/the-indian-libertarian/the-indian-libertarian-feb1-1961.pdf). The author Mr. R.C. Traill discusses the origins of humanism and its interplay with religion. He further goes on to explain the way forward for humanist discourse. _Primitive man in tribal society is surrounded on every hand by superstition, and he practices a magical ritual which, ostensibly to him, controls his environment for his benefit. It does not of course have any such effect, but we should not therefore condemn it as useless, while having no objective effect on nature it does have a subjective effect on him and maintains the tribal structure without which he would be just an animal on a level with other animals. The tribe, and the beliefs that hold it together, are all that he has to preserve his human status.As the tribe emerged into a class society, magic and ritual were taken over by the priestly caste, and put to use to maintain their special status. Such a society is well represented by ancient Egypt.  A rational, naturalistic attitude to the world was first developed by the Ionian Greeks; Cornford writes : “The Milesian system pushed back to the very beginning of things the operation of processes as familiar and ordinary as a shower of rain. It made the formation of the world no longer supernatural but a natural event. Thanks to the Ionians, and to no one else, this. has become the universal premise of all modern science. To later Greeks, especially those concerned with. maintaining the structure of the principal City states in Greece proper, based as they were on slavery, such ideas were disruptive, and a theistic view was actively encouraged. Christianity developed out of Judaism, which had helped the struggle of Jewish nationalism against enslavement by neighboring powers; and carried this struggle forward into the new conditions under the Roman empire, until it was astutely bought out by Constantine. Neither religion contributed appreciably to science, but they did contain important humanitarian ideas otherwise unknown at the time such as the Sabbath day of rest, and the commandment against murder. In Britain, catholicism, the religious counterpart, companion, and upholder of feudalism, was replaced by militant protestantism, which for centuries rightly regarded catholicism as the enemy of its new-found liberty and individualism. Though modern science was born soon after the rise of protestantism, its real development awaited the rise of industries following the industrial revolution. Rationalism arose at the same time, by making man the centre of interest, it inherited the mantle of humanism, and by using the results of science and criticism as tools it became more firmly established theoretically and can justly lay claim to the title of scientific humanism. This is not to suppose that rationalists as such are scientists, though a large proportion of scientists tend to take up a rationalist position, in their scientific work at least, and very often in their private beliefs.  While the defeat it has suffered in the battle of ideas has caused religion to retreat everywhere, it is still very strong and officially encouraged because it is still needed to give support to powerful people (even our so called secular Federal Government managed to give material aid to the British and Foreign Bible Society by making land available free for its Canberra offices). And seemingly any religion is better for this purpose than none, for the protestant militancy that once defied Rome has given place to a complacent acceptance of the flirtation with Rome by highly placed persons in the state. What of the future of rationalism, or scientific humanism? We shall continue to affirm the place of man in the centre, not indeed of the universe as in the middle ages, but of our purposes, so that what is of benefit to man on earth will be good to us, and what is of no benefit will be rejected. But we must mean by man not just one class or nation, or even a group of nations, but all human beings on the earth. Before the last century it was possible to maintain that only a few could benefit from the limited resources available, and that the majority must needs go without but with the expansion of economic life brought about by the industrial revolution, and the scientific revolution of today, it becomes more and more apparent that we can extend the world's benefits to all. This change in outlook made the birth of rationalism possible; and, when we have learned how to complete our new industrial revolution, it will make possible also a true humanism in which each man is really free to develop himself to his own ends.  How such a practical humanism is to be achieved is a political matter, and rationalists will not all agree on the steps we should take. This then must set the boundary to what we, as a movement, can achieve under present conditions, though it need not set a boundary on our discussions. We are however agreed that it must be achieved by the use of rational thought, based on the best available scientific evidence, and free from the shackles of religious prejudice, which, rooted in the past, tries to hold us back in the past, to prevent change, in the interest of this or that group; and to frustrate the expectations of millions in the benefits that science and industry could heap upon us. --- ## [Musing] The Role of Ideas in Politics URL: https://indianliberals.in/musings/ideas-in-politics/ ### Body Many of the sources of trouble in current politics is due to the prevalence of notions only imperfectly understood and applied hastily in garbled forms to justify partisan interests. The following is an excerpt from an article published in the Indian Libertarian Magazine by M A Venkata Rao in November 1960. _“The pen is mightier than the sword. This adage is being illustrated in several spheres of life today in the world and particularly in our country. The idea of the sovereignty of the people as the basis and justification of democracy, in particular, is being enacted in politics before our very eyes._ _Many of the sources of trouble in current politics is due to the prevalence of notions only imperfectly understood and applied hastily in garbled forms to justify partisan interests. This is an age of propaganda. Half-truths with an aura of authority derived from some popular leader or author, Hitler or Nietzche. Nehru or Gandhi are riding rough-shod over our lives creating havoc and seem to be well-nigh uncontrollable. . . _“ Access the full document **[here](http://v2.indianliberals.in/~_admin/pdflanguage?id=601783472.pdf)**. (page 4) First Published in the Indian Libertarian in November 1960. Other editions of the publication can be accessed at [Indian Liberals](http://indianliberals.in/), an open, multilingual digital archive committed to preserving liberal voices in the Indian public sphere. --- ## [Musing] The US-India Alignment in Cold War URL: https://indianliberals.in/musings/in-name-of-freedom-the-us-india-alignment-in-cold-war/ ### Body _The Indian defeat in the 1962 border war with China not only resulted in loss of territory, but also raised questions about the foreign policy conduct of India’s first Prime Minister Jawaharlal Nehru. _ _Nehru’s formulation of Non-Alignment, which was couched in the language of third block neutrality, was interpreted as hedging by revisionist scholars, and came under intense criticism. _ _Indian liberals, a minor but vocal force of public opinion, were highly sceptical of Nehru’s neutral posturing and instead, advocated closer alignment with the US-led block. For Indian liberals, such posturing made sense given their own deep aversion to both the Chinese and Russian communism, the shared democratic credentials of India and US and with the benefit of hindsight, the possibility of allying with the winning side in the Cold War. _ _The muted Soviet response, hapless Non-Aligned Movement (NAM) posturing, and the Anglo-American promise and delivery of military support in the crucial moments of 1962, seemed to vindicate Indian liberals, even if temporarily._ _Produced below is the editorial from the 15__th__ December 1962, issue of the _Indian Libertarian_ magazine, which warns of the dangers of Chinese expansionism, suggests Indian leveraging of China’s Tibet problem, and argues for closer US-India alignment based on clear headed political realism._ 1962 will go down in history as a memorable year which, for the first time, witnessed the invasion of India by foreign hordes through the Himalayan passes. The impregnability and inviolability of India’s Himalayan borders have now proved to be a myth. Beyond the Himalayas, stretches today not the sacred land of the Lamas, but the Tibetan colony of the Chinese Red bandits who drove The Dalai Lama and his patriotic followers out of their motherland in 1960 and are now busy rooting out the time-hallowed Tibetan culture and civilisation and implanting there in its stead their miserable and despicable communist faith and their crude values of terror, deceit and fraud. No longer does India enjoy the centuries old peaceful and happy neighbourly relations with Tibet. The Red enemy from China is now not only at India’s Northern gates but he has also forcibly broken them open and occupied a strategically important position within India’s own precincts. Having accomplished this feat in one grand stride, he is now using all his communist wiles to lull India into a false sense of security so that he might be enabled to consolidate his position there. This, in short, is what the ‘Cease-Fire’ proposals of China amount to. China will never willingly relinquish unless forced to do so, her control of all the passes in the Himalayas right up from the Karakoram Pass near-about Ladakh in the North West, to Tawang and Walong in the NEFA region in the North East and the adjoining areas. She still reserves to herself by her cease-fire proposals, the right of a conqueror to re-occupy the proposed No Man’s Land (which, in fact, belongs to India) in case Nehru’s Government proves too intractable, pugnacious and defiant. She also wants some respite from her adventurist military operation in this region just to consolidate her ill-gotten gains and further tighten her grip of the Himalayan passes so as to be able to dominate and mould as suits her liking, India’s internal life, political, social and economic, by ever pointing out a loaded gun at her from these northern heights. To isolate India from her neighbours, China is cleverly wooing Pakistan, which is reeking, from its very birth, with intense communal and religious hatred for India. Communist intransigence of China and communal fanaticism of Pakistan may well come together as they have done. For they have one thing in common. Both detest the secular democratic spirit of India. But Pakistan will do well to remember that the day is not far off when she will have to pay dearly for such ill-conceived romantic adventure with China as India has done at a heavy cost. In this situation, India finds herself between the devil of China on the one hand and the deep sea of Pakistan on the other. Her leadership is at bay. It finds it hard to wriggle itself out of the ties and attachments for communist countries, fostered and strengthened over a number of years by its very ‘Non-Alignment’ policies. The leaders including Mr Nehru are now sincerely wanting to hurl back the Chinese invaders from our soil and for that purpose, have entered into military agreements with USA and Britain. But some mysterious forces seem to hold them back from going ahead with the full implementation of these agreements. The probable reason is that the ardent desire so long entertained by our leaders to carve out a distinctive kingdom of socialist pattern in India has drawn them irresistibly closer to the Communist bloc than to the Democratic bloc, despite India’s neutrality. It seems that they are not yet able to outlive this past even when the logic of Sino-Indian war has made them realise the stern reality of a world-wide titanic struggle proceeding between the forces of Red slavery and those of democratic freedom. They are now casting, however, a wishful look towards the Western nations for military aid and financial help in this hour of peril. The tragedy of the situation is that in the absence of a clear assurance forthcoming from India that she, as a genuinely non-aligned but democratic country, would always stand against totalitarianism and colonialism, wherever found, either in the old colonies of Western nations or the new colonies held by Russia and China, USA and UK willy-nilly have to carry on with a dubious ally like Pakistan in this region of South Asia. If only India should prove her bona-fides in regard to her faith in democratic freedom, all her difficulties with China and Pakistan would vanish into thin air. India would then be in a position not only to fight successfully the Chinese invaders but also to effectively counter and neutralise Pakistan’s capacity for mischief and trouble. But all this would be impossible without a furious rethinking on the part of our leaders of India’s foreign policy. Mr Nehru would then be not justified in making a fine metaphysical distinction after the manner of a Vedantin, between the ‘Maya’ (illusion) of Chinese chauvinism and the ‘Parabrahma’ (the Supreme Reality) of Communist Vedantism, as he did the other day. He would then have to rally the whole nation behind him not only to throw out the Chinese from the Indian soil, but also to fulfil the positive and inspiring ideal of preserving India’s Free Way of Living now menaced by the twentieth century Red Napoleonism of China. He would have also to dispel from the minds of the Western nations, the fears and suspicions that India’s Non-Alignment is not a mere way of escape from shouldering the onerous responsibility devolving on her as a Democracy, to fight relentlessly for saving Freedom and Democracy from world communism. In that event, India would have to play the special role of the Defender of Freedom of all South-East Asia- a role assigned to India by the prophet of Indian nationalism, Shri Aurobindo Ghosh as far back as 1950, with rare prophetic vision and political insight. Thus if our leadership should free itself from the political and ideological cobwebs that have polluted its mind and follow the straight – and may be even narrow- path to a fuller and richer democratic life, Western countries, which have proved themselves to be India’s real friends in the hour of her need, will do everything in their power to replenish her military strength and augment her economic resources and help her solve the knotty Kashmir problem. Thus, on a proper analysis of the relation of forces in the East and the West, it will be found that India finds herself in the present delicate situation as a result of her past misguided policies and ideological aberrations. It is, therefore, high time that India made a clear and unambiguous confession of her unflinching faith in Freedom and Democracy, which went into the very framing of the Indian constitution. The spiritual crisis she is passing through is no less great than her military crisis. In fact, the former has aggravated the latter. Let India make a wise and deliberate choice here and now and “Seek First the Kingdom of Freedom”. And it is certain as anything that within a short time ‘All Other Things Will be Added unto Her’ from within and from without and she will come triumphantly out of her present trials and travails. _The original text can be accessed _[_here_](http://indianliberals.in/~_admin/pdflanguage?id=300361867.pdf)_._ --- ## [Musing] India: Seeing the Future in its Past URL: https://indianliberals.in/musings/india-seeing-the-future-in-its-past/ ### Body Because employment was so important for India, encouragement was given to small-scale industries by reserving specific areas of production for them. But because firms could not grow to efficient scale, production was unprofitable, so few jobs were actually created. _Back in 2006, Dr Raghuram Rajan, a leading economist, professor, and bureaucrat, delivered a public lecture under the auspices of the Forum of Free Enterprise as part of its Golden Jubilee celebration series. In the speech, he outlined the broad trajectory of economic mismanagement under socialism in India; the differing impact of economic reforms under decentralized federalism; and the high-skilled, capital-intensive nature of economic dynamism. He also laid out his reform agenda which included liberalization of higher education; management of urban growth; building faith in public institutions; flexible labour laws; infrastructure development; and a focus on incentives, not coercion._ _Produced below is an excerpt from the lecture. The lecture was published in the booklet form by the Forum of Free Enterprise._ AD Shroff, who started the Forum of Free Enterprise in the 1950s, was an unofficial delegate to the Bretton Woods Conference that set up the International Monetary Fund – an interesting connection between this forum and my organization. His aim was, in part, to combat the tendencies towards excessive regulation that permeated the Indian economy. Among the others associated with this organization was Nani Palkhivala. These were important but lonely voices against the socialism practised in India then, arguing as Palkhivala said, that it was a fraud – transferring wealth from the honest rich to the dishonest rich. Instead, people like Mr Shroff and Mr Palkhivala maintained a lonely but necessary vigil then, keeping alight the lamp of free enterprise. I am privileged to be speaking from the same forum as these stalwarts. Since I am an international bureaucrat, what I say reflects my own opinions, and not necessarily those of my organization. But the Fund clearly welcomes free enterprise and attempts to help create the conditions for it to flourish around the world. I therefore particularly welcome the opportunity to speak at this forum and thank the organizers for inviting me. What I want to focus on today is not just how far India has come from those lonely days, but also how far it has to go. Let me start by asking you to go back just 25 years. Unlike today when you can walk across to a shop to get a working state-of-the-art mobile phone, then one had to wait for years to be allotted a phone, and when that miracle happened, it took a further act of God and the benevolence of the P&T man for the phone to work after that. We had black and white TV then. Urban youth like us had to watch Krishi Darshan for entertainment on the monopoly Doordarshan network, where farmers responded to penetrating questions like “Kya aap khet ko pani dete hain?” Of course, most of the intended audience, villagers, did not have access to a TV even in the few cases they had the electricity to power it with. Starting around 1980, the Indian economy became a veritable dynamo, posting an average growth of nearly 6 per cent per year over the last twenty-five years. Despite the inevitable unfavourable comparisons with China, very few countries have grown so fast for such a prolonged period of time, or reduced poverty so sharply. We should indeed be proud of what India has achieved, and clearly, many of us are. There is a buzz today in India, a sense of limitless optimism. But is it justified? To answer this question, let us start by asking how we got here. The best description of India’s path is really “constrained adaptation”. “Constrained” because of the numerous policies and regulations inflicted on us by an untrusting government and “adaptation” because Indians are by nature entrepreneurial. As a result, the law of unintended consequences was at work big time – what the policies produced was very different from what was intended. Consider some. Barriers were erected against the foreign competition to protect domestic enterprise – the idea was this would give a respite to our infant industries, allowing them a nurturing environment while they would grow up and became competitive. But the nurturing environment proved so comfortable that our infants adapted by never growing up. The canonical example was the Ambassador car – a version of the Oxford Morris which remained virtually unchanged over 40 years of production. We waited with bated breath for every new model to see what the shape of the headlights would look like – for it seemed that was all that changed. A second objective was to use scarce capital resources in the most effective way possible. To do this, the so-called “commanding heights”, such as steel, petrochemicals, and heavy electricals, were commandeered by the public sector. In yet other sectors, private entrepreneurs were allowed in, but heavily constrained by regulations on how much, and what they could do, and where. But because much of the economy was in the hands of those who did not care about profits, and in the rest, the profitable could not grow, the outcome was that India used its scarce capital very inefficiently. Because employment was so important for India, encouragement was given to small-scale industries by reserving specific areas of production for them. But because firms could not grow to efficient scale, production was unprofitable, so few jobs were actually created. The government sought to protect unskilled labour in large firms – for example, through laws against firing. But this again meant that large firms stayed away from labour-intensive industries, so fewer jobs were created. Moreover, firms resorted to temporary workers or stayed small so that labour laws did not apply. In short, labour laws neither led to the creation of more jobs nor to the protection of most workers. I can go on but will stop with one last example. An overarching principle was to prevent the concentration of wealth in a few hands. This was another rationale for licensing, as also the Monopolies and Restrictive Trade Practices Act. But again, in an attempt to use government rules to eliminate privilege, we created the opposite – the industrialist who magically got all the licenses as well as the requisite financing. No wonder business was a dirty word. So what were the consequences of this jumble of policies for India’s pattern of development circa 1980? First and foremost, these policies held India’s growth to a low, but not disastrous, level, famously dubbed the Hindu rate of growth. Indian industry was inefficient, not innovative, and exported very little. Surprisingly, these policies did not mean that India produced less manufacturing goods as a whole for a country at its stage of development. It did mean, however, that the composition of its manufacturing activity was unusual: India produced more than its share of capital- and skill-intensive goods (think public sector petrochemical plant) while underutilizing what it had in plentiful supply-its abundant labour or even its innovative capacity. That many engineering graduates like me left engineering or even the country was partly because the economic environment in the country at that time simply did not need the creativity and the innovation that we brought to the table. To me, this message was forcefully reinforced when after doing a degree in management, I joined one of the country’s foremost business groups as a management trainee. A CEO of one of the group companies berated the engineers in the group of management trainees he was taking around, arguing that we had wasted the nation’s money by taking a precious engineering place and then departing to the ranks of management. While he was showing us around the factory, however, we noticed two elevators going up. We appeared to be waiting for the elevator on the left even though the elevator on the right was available. When asked why, he replied, “We are waiting for the management elevator, this one is for the engineers and workers”. It was not just the middle class that did not benefit, our villages were still not electrified and our poor still had no access to safe clean drinking water. So despite all the rhetoric about socialism, government policies were of the few, by the few, and for the few. I have argued that this may have been unintended, but perhaps I am being charitable. Perhaps indeed the consequences were fully intended but were cloaked in the rhetoric of social purpose, and the public confused with smoke and mirrors. Perhaps India’s greatest enemy was not the proverbial foreign hand but the vested interests inside. Be that as it may, there was a silver lining. The constraints caused India to be highly diversified in its manufacturing even back in 1980. And a portion of its labour force was highly skilled, a clear legacy of Pandit Nehru’s emphasis on science, higher education, and also leading-edge technologies for the public sector. How many countries, at India’s then stage of development, could boast of having a space program? How many advanced countries even now can boast of schools of the calibre of the IIT’s? Thus India had the capabilities provided the constraints were loosened and the right opportunities emerged. And that is indeed what happened. In 1980, government attitudes towards the economy, and the private sector, in particular, started to change. Under Mrs Gandhi and then Rajiv, pro-business reforms were set in motion, with liberalized access for domestic firms to capital imports (including, presciently, to computers), technology, and foreign exchange, and the gradual relaxation of industrial licensing. Later, in the aftermath of the foreign exchange crisis in 1990, broader reforms that were more genuinely pro-competition were introduced-barriers to foreign trade were dismantled, inward foreign investment was liberalized, and important services such as telecommunications and finance were opened up. Second, but no less important, India started becoming more decentralized politically. The decline of the Congress’ power and the rise of regional parties conferred greater political autonomy on the states, translating to autonomy even in the economic sphere. States increasingly prospered, or not, based on what they did rather than because of actions at the centre. _The full text of the lecture is accessible [here](http://www.forumindia.org/images/pdf/4lot/India-Seeing_the_future_in_its_Past.pdf)_ (page no. 5). To read more musings, [click here](https://spontaneousorder.in/?s=SO+Musings). _[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context._ --- ## [Musing] India, the Tiger Caged URL: https://indianliberals.in/musings/india-the-tiger-caged/ ### Body The public debate over the IMF loan has been turned into a question of India’s self-respect and sovereignty. The fact of the matter is we are broke - thanks to forty years of "Nehruvian socialism". Like an individual who in state of a financial crisis goes to a bank for a loan, our country is compelled to go to the IMF for a loan. _As India scrambles to respond to the novel COVID-19 disease, experts have also warned of the severe economic repercussions from the pandemic outbreak. Indian economy, of late, has already been in a bad shape and the virus-induced lockdown further adds to the worry. As the _[_emerging markets_](https://foreignpolicy.com/2020/03/28/coronavirus-biggest-emerging-markets-crisis-ever/)_ brace to face the recessionary pressure, here is a detailed analysis of another monumental economic crisis which entailed a fundamental shift in the Indian political economy._ _In the wake of the balance of payment crisis in 1991, The Economist produced a story on economic mismanagement under socialism. The story generated considerable attention in the Indian press and was cited by the Indian liberal opinion-makers. Freedom First, a liberal magazine established by Minoo Masani, published the report in two parts in its own issues for a wider public reach._ _Produced below is an excerpt (with an introductory note by the editors) from the first part of the story from the July 1991 issue of the Freed0m First._ The Economist “Survey of India” (May 4, 1991) has attracted considerable attention in the Indian press. Yet, none of our newspapers have, to our knowledge, thought it useful to share with their readers its contents, The story of what went wrong and why India went bankrupt need to be understood. The public debate over the IMF loan has been turned into a question of India’s self-respect and sovereignty. The fact of the matter is we are broke – thanks to forty years of “Nehruvian socialism”. Like an individual who in state of a financial crisis goes to a bank for a loan, our country is compelled to go to the IMF for a loan. We patterned our development on the Soviet model. The Soviets are broke. So are we. They are going around asking for help. So are we. The Survey helps us understand what went wrong and suggests what needs to be done. We wish we could have reproduced the Survey in its entirety. We cannot afford to. Hence we have done the next best. Given you extract in this issue- and, hopefully, some more in the next. “…few of India’s troubles are as intractable as Indians, especially, suppose them to be. Of all its miseries, the greatest by far is the country’s economic failure, which is as broad and deep as the poverty that it sustains. If India could put its economy right, many of its other difficulties would immediately seem less overpowering; they would not vanish, by any means, but they would at least begin to seem to be beatable. Undeniably, political stability and human progress in India depend on greater economic success. That is exactly why so many Indians smile with resignation at the hopelessness of their case. They are wrong. Nowhere else, not even in communist China or the Soviet Union, is the gap between what might have been achieved and what has been achieved as great as in India. The country is rich in the resources that matter most for economic advance- not physical resource which it also has but human resources. Indian are capable of punishingly hard work; remarkably for people so poor, they are thrifty; they are entrepreneurial; they are ambitious and materialistic. When Indians have ignored the Hindu injunction never to cross the “black sea” and travel abroad, they have prospered within a generation. Only at home are so many imprisoned, in their hundreds of millions, in a sink of despair and degradation. _The full text is accessible _[_here_](http://www.freedomfirst.in/issue/issue.aspx?issue=410). (page 17 onwards) [_IndianLiberals.in_](http://indianliberals.in/)_ is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context._ Read more: [SO Musings](https://spontaneousorder.in/category/so-musings/). --- ## [Musing] Indian agricultural policy in a nutshell URL: https://indianliberals.in/musings/indian-agricultural-policy-in-a-nutshell/ ### Body _The following is an article written by Farmer Leader Mr. Sharad Joshi in Down to Earth in 2012. Joshi founded the Shetkari Sanghatana, a non-political union of farmers formed to secure ‘Freedom of access to markets and technology,’ which later emerged as one of the largest farm groups in India. He was also the founder of the largest organization of rural women, Shetkari Mahila Aghadi, celebrated for its work for women’s property rights. _ A large number of researchers and scholars who wish to study agriculture in India are intrigued by the extreme penury of the farmers and the low levels of productivity. It surprises them that the peasantry of a country so well endowed in water resources and sunlight should be so miserably placed. It was only as late as in 1990 that the documentation of the World Trade Organization (WTO) clearly established that the government of India imposed a negative subsidy on Indian farmers. In the WTO parlance, the term ‘negative subsidy’ has a specific meaning. It refers to cases where the income received by the farmer by the sale of his proceeds is less than the income he would have received in a hypothetically free market where the government does not intervene in any manner. On the other hand, ‘positive subsidy’ refers to cases where the farmers receive an income that is higher than what they would have received in a hypothetically free market, thanks to the intervention of the government. The central and the most essential fact about Indian agriculture is that it suffers from either the caprices of nature or, when the nature is benign, by the tyranny of governmental interventions. It is astonishing that most learned reports and books on Indian agriculture skillfully avoid referring to this central fact. For years, all economists and agronomists have held that the poverty of the farmers and the low productivity of agriculture in India are interconnected and are both caused by the illiteracy, wasteful expenditure and large incidence of alcohol and other vices amongst the farmers. It is strange that this calumny persisted for long decades of the British Rule as also the first five decades after independence. The farmers and the agriculture are the source of all wealth and multiplication thereof, at least in the physiocratic sense. In the peasant idiom, ‘if a farmer sows one seed the crop is hundred- or even a thousand-fold.’ How come the one industry where there is an actual physical multiplication suffers from the most serious deprivations? Practically every regional language in India has a proverb that maintains that agriculture is the best of all vocations; the trade comes only second and the service is the least honorable of all. The proverb persists even though the reality has turned upside down, particularly after the independence. Now a job, particularly the government service is the most prestigious and agriculture almost passage to poverty, indebtedness and suicide. Even though the learned economists and the erudite scholars refuse to recognize the fact of the negative subsidy in agriculture, there was abundant evidence of the social recognition that agriculture was the most arduous of all vocations. Children of farmers, who had the good fortune of getting higher education, systematically preferred jobs and turned their backs on the parental lands. Daughters of non-agrarians have, for decades, clearly expressed their reluctance to be married into agricultural families. The life of a farmer housewife is a continuous misery comparable to life imprisonment. Now, even the farmers’ daughters indicate a clear preference for grooms in non-agricultural vocations, be they even menial. The instruments of intervention that the government of India used were simple but lethal. Until as late as 1960s, government imposed a compulsory levy on the food grains produced by the farmers. If a farmer had produced less quantity than was required to be given as ‘levy’ he was required to make up the difference by purchasing the food grains in the open market at higher prices and delivering them to the government at lower levy prices. If he failed to discharge his ‘levy’ obligations he risked being handcuffed and paraded in public places in great ignominy. All transport, storage, trade, processing and export of agricultural produce were severely restricted if not totally banned. This was done by raising the boggy of consumers’ interest and the obligation on the part of the government to ensure food security. The government did put up a show of ensuring remunerative prices by introducing a system of Minimum Support Prices (MSPs); but manipulating to make them work not as minimum prices the farmers should ever receive but as the signal of the maximum prices the traders need to pay for the agricultural produce. The government did not need to depress the prices of each of the hundreds of agricultural commodities. It could depress the agricultural economy in general and keep the farmers permanently ‘needy’ by depressing artificially prices of just about a dozen commodities. These anti-farmer policies were sought to be justified by various arguments: 1. The desirability of low-cost economy; 2. The need to promote industry by keeping prices of wage goods and raw material low; 3. Need for comprehensive consumer protection; etc This is a brief summary of the essentials of the State policy on agriculture. And, all that I have written in last 30 years was essentially a commentary on the various methods used by the government to exploit the ‘Bharat’ to the benefit of the ‘India’. _Previous musing: [Fundamental Right to Property by V M Tarkunde](https://indianliberals.in/content/fundamental-right-to-property-by-v-m-tarkunde/)_ --- ## [Musing] Is Socialism Outdated? URL: https://indianliberals.in/musings/is-socialism-outdated/ ### Body The following text is taken from a booklet published by [Forum of Free Enterprise](https://indianliberals.in/forum-of-free-enterprise/is-socialism-outdated-n-a-palkhivala-mar10-1966.pdf) published on March 10, 1966. The first article, ‘The Shells of Socialism’ was authored by Nani A Palkhivala. It addresses the policies proposed by the then Union Minister for Planning. A time of trouble is a time of imbalance and distortion; at such a moment mere words from men in high office can easily sap people's morale and blight public confidence. Mr. Asoka Mehta's convocation address to Saugor University, described as "his first major speech after joining the Central Cabinet," contained such sweeping pronouncements of economic policies and was imbued with such political undertones that one wonders whether a university convocation address was the appropriate vehicle for conveying to the nation such portentous views of the Union Minister for Planning. If the speech did not reflect the collective thinking of the present Cabinet, it was a grave mistake to give a gratuitous jolt to the capital market, unnerve foreign investors and cast a pall of gloom over the national economy. If it did presage Cabinet action, we can only see ahead even dimmer days and shadows lengthening across the path. The tragedy of India today is the tragedy of waste - waste of manpower, waste of industrial capacity, waste of talent, experience and the spirit of enterprise which could be harnessed to greater national purposes. The need of the moment is that the Government and the people, the authorities and the business community, should come closer together and work in harmony for the common good. The Tashkent spirit should be imported into the economic sphere, the spirit of mutual trust and understanding, mutual respect and consideration. Till then we shall not be able to get out of the quagmire in which we have been floundering so dangerously long. On the other hand, Mr. Asoka Mehta's speech will only serve to widen the chasm between the Government and private enterprise. In other countries, the issue of nationalisation is naturally decided in different ways by different political parties succeeding each other. But in our country, although the same political party continues in uninterrupted power with the same economic objects, fear and uncertainty grip the public mind because of divergent views publicly expressed by different Ministers from time to time. On May 22, 1964 Prime Minister Nehru assured the public that "there was no immediate question of bank nationalisation." On June 5, 1964, Mr. T. T. Krishnamachari announced that "nationalisation should be the last step in any effort to control banks." There was little justification for such State action in 1964; and there is less justification now. If our economy is not to be dogged by a growing feeling of insecurity and instability, it is imperative that on such a basic issue as bank nationalisation individual Ministers should not air their personal views but that the Cabinet alone should speak as a body. The State Bank of India (which is almost wholly owned by the Government) and its subsidiaries, account for 25 per cent of the paid-up capital and 32 per cent of the deposits of all Indian Scheduled Banks. They extend 29 per cent of the total crcclit to the public and own 32 per cent of all Indian branches and offices of scheduled banks. Thus, there is already a hard core of the public sector in the field of banking. Pragmatism, and not ideology alone, should dictate any further change in the structure of Indian banking. Under the Reserve Bank of India Act and the Banking Companies Act, the Reserve Bank enjoys as wide powers as are known to the central bank of any other country, for imposing general credit controls and selective credit controls on banks. The Reserve Bank has full powers - which it constantly exercises - of controlling banks' ending policies, the rates of interest to be charged to customers or to be paid to depositors, the size of loans to particular individuals or groups, the creation of reserves, and in fact of controlling all banking activities. It is difficult to envisage what new laws Mr. Mehta has in mind as necessary to promote healthy banking. Mr. Mehta referred to 650 accounts constituting roughly two-thirds of the total advances of the banking system. That shows that some companies, because of the size of their operations, have much larger requirements for loans than others. It does not prove unfair banking practice. If one looks at the figures of advances by the State Bank of India, which is in the public sector, they would make the same pattern. All successful socialist countries have big corporate bodies, whose borrowings, compared with the borrowings of smaller units are on the scale referred to by Mr. Mehta. India has already priced herself out of the world market and is going through a phase of abnormal inflation. Both these unhealthy features would be aggravated but for the functioning of big companies with large bank accounts. The trade unions of the United Kingdom expressly submitted to the Monopolies Commission in that country that they were in favour of big corporations since such corporations could give security of service, afford to pay better wages and at the same time help to hold the price line. Not all the theories of economists, not all the wit of our Planners, can get round the ineluctable law of life you cannot divide more than you produce. No doubt, rewards must be shared, but first they have to be earned; wealth must be distributed, but first it has to be created. What one sadly misses in Mr. Mehta's address is that whereas there is no reference at all to the claimant's need to increase production in the fields and in the factories, the emphasis is solely on increasing state ownership and widening state control as if that were a sure panacea for all economic ills. Are we sure that the bureaucrat's love of power and zest for more power will be any less detrimental to economic progress than the citizen's love of profit? What public good is promoted by continuing control on textiles, with six months' stocks accumulated with the mills; and what disasters have followed in the wake of decontrol of steel and cement? Mr. Mehta referred to the desirability of "curbing the private sector monopolies". This type of suggestion may be politically useful in that it conveys to the ill-fed, ill-clothed and ill-housed citizen that his economic plight is due not to official incompetence but to the anti-social activities of a few business houses; but it is not based on facts and is contradicted by the Report of the Monopolies Commission. In India enterprises can be brought into existence and they can expand and diversify under Government control and license only; and there can be as much and as free competition as the Government alone wills. When India faces the most acute food crisis of decades and our food production has to be increased by all proper incentives, Mr. Mehta suggests that the bigger agriculturists are unduly favoured and he favours a "trend towards making ownership of say, over ten acres of irrigated land uneconomic by levying heavy imposts upon such holdings." It is impossible to see how food production will be increased, or what sound agricultural policy will be promoted, by such a levy. There seems to be no doubt that a heavy impost which would render ownership of more than ten acres of irrigated land uneconomic would only aggravate the food crisis. Does our socialism primarily aim at filling empty stomachs with food, or at filling them with the satisfaction that their neighbours are no less hungry than they are? Mr. Mehta is reported to have said that the constitutional guarantee about the right to property made it difficult for "the forces of socialism to operate on the level of a change in the structure of private property". The fundamental right to property at present exists in a most attenuated and abridged form: the adequacy of compensation paid for property acquired by the State is not even justiciable in a court of law. If this truncated right to property stands in the way of "socialism", there must be something wrong with that brand of socialism. Mr. Mehta referred to "the spectacular tussle between the old capitalistic economic order and the new socialist order in India", and ruefully noted the continuation of "a capitalistic economic order with a powerful hangover of a feudal social framework." Such words are wholly unrelated to reality. So long as the official thinking of our planners is that a mixed economy like ours must tolerate the private sector as a necessary evil, and that the end of the private sector is merely private benefit and the end of the public sector alone is public good, there can be no hope of reviving the comatose economy. Economic wisdom can never be reduced to an unbending system. Indian socialism, in the true sense, aims at reducing the disparity between wealth and poverty, and raising the standard of living of the people and giving them social security. In that sense, today every thinking mind must be socialist. It is important to remember that the Preamble to our Constitution does not use the empty label "socialist" at all, but uses the meaningful words, "justice, social, economic and political; and Equality of status and opportunity." The concept gets distorted when one stubbornly adheres to state ownership as the only means of achieving the goal. You may adopt state ownership in areas where such ownership affords the only sure and safe launching pad; or you may tap the immeasurable reservoir of the people's response and initiative, energy and endeavour, prosaically called the private sector. Socialism must be elastic enough to promote economic growth by drawing upon normal human instincts and incentives; otherwise, we shall be only planning for poverty and equal distribution of misery. It is trite knowledge that even Russia has awakened to the necessity of absorbing that heresy of capitalism-the profit-motive. The quintessence of socialism consists not in levelling down but in levelling up. It strives to bring forth "the maximum gifts of each for the fullest enjoyment of all". State ownership is to social justice what ritual is to religion and dogma to truth. State ownership and State control are the shells of socialism which were really intended to protect and promote the growth of the kernel; but rigid shells merely constrict its growth. - (Reproduced from "Economic Times" of Feb. 7, 1966, _with kind permission of the Editor._)**  ** _Previous musing: [MAKING INDIAN INDUSTRY GLOBALLY COMPETITIVE](https://indianliberals.in/bn/content/making-indian-industry-globally-competitive/)_ --- ## [Musing] Is There A Middle Way? - Dr F. A. Mehta URL: https://indianliberals.in/musings/is-there-a-middle-way-dr-fredie-a-mehta/ ### Body _Produced below is a booklet by Dr F. A. Mehta, published in January 1995 by the [Forum of Free Enterprise.](https://indianliberals.in/content/is-there-a-middle-way-by-dr-f-a-mehta-january-15-1995/)  In the booklet, Mehta explores the possibility of a "Middle Way" between capitalism and socialism, between efficiency and equity. _The question that I propose to answer and elaborate upon is: Is there a Middle Way between Capitalism and Socialism, between the Price Mechanism and Planning, between Efficiency and Equity? The question is simple, so simple as to be denounced superficial to a point of being superfluous. The spiritual heritage of mankind has long advocated the virtues of moderation. Lord Zarathushtra expressly insisted on moderation as one of the supreme virtues of the Good Life; Lord Buddha dwelt at length on the virtues of the Middle Path; and Confucious insisted that life must be a mixture of the positive and the negative. Every calamity has in it the seeds of an opportunity and every great fortune the seeds of a collapse. The Middle Path, therefore, is almost spiritually ordained.  But, to come down (literally!) from the sublime to the ridiculous, the middle path also has some pragmatic virtues. It seems to offer the best of both the worlds; it also offers an easy escape route for people. A classic example of the former was when Isadora Duncan is alleged to have approached George Bernard Shaw with a request for marriage on the ground that the product would be unique, combining her beauty with his brains. But GBS is alleged to have retorted: "Madam, what if the child has my beauty and your brains?" The classic case of the escape route is provided by the Chairman of a club who had to introduce the Mayor of the city. He took the middle path by stating that some people thought that the Mayor was a rogue and others thought that he was not. He, on his part, took the middle view!  We, in India, now stand in the Company of nearly a hundred countries which have dedicated themselves to a Free Enterprise System. We are conscious that the transitional period from a system of bureaucratic regulation to one of free enterprise is fraught with several problems and pains. But, as the entire world has discovered, there is no escape from the system of free enterprise. Yet, as we all agree, it has to be free enterprise with a human face.  When, therefore, early this year the Prime Minister pushed aside his written speech before the August gathering of World Economic Leaders at Davos, and said that India's destiny is to follow The Middle Path, he was, in fact, stating no more and no less that India as a Democratic, Federal country with innumerable vested interests ranging from the Industrial Lobbies through the Farm Lobbies to the Trade Unions, with 3 States at varying levels of socio-economic development, and with a background of 40 years of bureaucratic socialism could not be expected to perform a miracle overnight. The Thatcherite Big Bang thesis cannot work here. In a Democratic country, PEOPLE CAN BE BRAIN-WASHED; THEY CANNOT BE BROW-BEATEN. MILITARY TANKS CANNOT BE USED; THINK TANKS HAVE TO BE USED. People must have time to adjust themselves intellectually and emotionally to the new regime of Free Enterprise. We need Gradualism both on pragmatic and humane grounds. More specifically, the Prime Minister said that a program of rapid Industrial Productivity such as would throw millions of workers on the streets was totally unacceptable to a country committed to the doctrines of Mahatma Gandhi. No less, and perhaps more significantly, he added; "We must recognise that even if 7 to 10 years from now, the MNCs are able to deal with the problems of the first 50% of India's population, it will remain the responsibility of the Government of India to deal with the problems of employment, and of livelihood of the remaining 50%.” These observations were received with surprise by the Proponents of the Economic reforms in India; by fear from the Right Wing Critics, and with scorn by the Left Wing Opponents. The Proponents of Economic reforms were surprised as India, perhaps uniquely among the 40-45 developing countries of the World attempting Economic reforms, had secured the maximum gains with the minimum pains. No doubt, in the initial 2-3 years, the transitional period saw a contraction in the Industrial output of the country; no doubt, the reduction in subsidies resulted in intensified inflation; and no doubt, the reduced allocations due to reduced Governmental expansion did cause hardship to various sectors of the economy. Most importantly, the sharp inflation in the prices of basic items, particularly all food grains was a disconcerting factor which could not be missed out, particularly with a relatively weak Public Distribution System (PDS).  But, having said all this, there has been no large scale displacement of labour, even though Industrial employment may not have gone up. On the other hand, there was a tremendous outburst of activity, first in the Financial and then in the Industrial Sector of the Economy. The Foreign Exchange reserves rose magnificently from Rs. 1.6 Mn. in June 1991 to nearly Rs. 20 Bn; the rate of inflation, though still worrisome, had been subdued; Industrial Houses were vying one with the other to come out with new programs of modernisation, expansion, diversification and globalisation. Foreigners no longer spoke of "China, then India"; indeed, many reversed the scheme, with India emerging as the darling of foreign Investors. Why then did the Prime Minister, apparently all too suddenly break out into a discourse on "The Middle Path" at Davos?  **Free Enterprise But With Gradualism ** Fear was then expressed that the Prime Minister was now trying to put a break on the speed of Economic reforms. He was trying to prevent any significant attempts to secure major gains in Industrial productivity. He was, in effect, trying to protect the old bureaucracy, and far more importantly the question was raised: "Has the Prime Minister begun to think of his Vote-Banks rather than of Economic reforms?"  On the other hand, the Left Wing criticism was true to form. It saw his speech as nothing but a skillful decoy to continue with his policy of liberalisation but uttering the slogans of soft socialism. Be that as it may, the Prime Minister had made the intelligentsia and the Policy Makers in India sit up and ask the question: Have we moved three steps forward only to move two steps backwards?  One can debate whether one should move one step or two steps backwards, but anyone familiar with the problems of Management must know that no policy implementation takes place at once and down the line. It meets resistance; it even invites a back-lash. Therefore, skillful Managers always prepare for a fall-back position when a Policy runs into too many problems with too many people at too many places. This is all the more so in a Democracy. Are we not indirectly preaching that The Middle Path must always make a provision of not going towards extremes and with extreme haste?  Even at a downright practical level, we have to recognise that the ills of 40 years cannot be undone in four years. For 40 years, Indian industry was condemned to be small and to remain small. It was, in fact, "Pygmytised". To call upon it all of a sudden, to compete with giant global MNCs within a matter of 3-4 years does not make sense. Again, proponents of Privatisation - and I am one of them - would certainly want to see the programs in this area move faster and more meaningfully. But, we have to recognise that the Public Sector is today the dominant sector, and inspite of programs of privatisation will remain a dominant sector for years to come. Managerially, the Public Sector needs to be re-activated and re-oriented towards the goals of Free Enterprise, but given the fact that the Public Sector today accounts for 96% of the power supply in the country and 92% of the Bank deposits, let us not believe that even giant leaps into Privatisation will radically alter these ratios. We are not, therefore, arguing for dragging our feet when it comes to Economic reforms. Nothing would be more dangerous and self-defeating. We are arguing for a correct perspective to be brought to the programs of Economic reforms, and their sequencing. Unless this perspective is obtained in a correct manner, we are inviting back-lashes, perhaps even disasters.  **Pains In The Short-Run, Gains In The Long-Term ** John Maynard Keynes once said in a celebrated sentence "In the long run, we are all dead". The tragedy is that for a country embarking on Economic reforms with the goals of Free Enterprise and Competition, the reverse is true, and it is the short run that is particularly painful. In the short run, Economic reforms carry a variety of pains and penalties; with the reduction in subsidiaries, with the reduction in Government allocations, with a compression in the availability of both domestic credit and foreign exchange, the first round of Economic reforms becomes one of both stagnation with inflation. We have seen this in one country after another, but no where so dramatically and tragically as in Russia today. By contrast in the first round of Socialism, people "enjoy the bliss" of assured employment, social services and for the masses a great degree of law and order.  In the long run, Free Enterprise almost always delivers the goods, whereas a planned economy almost always breaks down. This makes Capitalism and Competition particularly painful in the short run; by contrast, it makes Socialism particularly attractive. That is why we are today witnessing in one country after another, that the Communists, now in their new garb of "Social Democrats”, are coming back to power. The greatest problem before Economic reformers is that while in the long run their remedies do promise a great deal of success and prosperity, in the short run, they do tend to bring a great deal of economic insecurity and dislocations, often accompanied by outburst of crime and corruption which imperils the law and order situation. In short, periods of transition have often been accompanied by chaos, corruption, and even crime.  From this point of view, we have to congratulate our present Government that by a wise system of gradualism on the one side and proper sequencing of reforms on the other side, they have been able now to ward off those tragic consequences which one has witnessed in so many countries embarking on Economic reforms. It has been said repeatedly that our Economic reforms have not touched the politically sensitive areas. Even granting that this is true, is there no wisdom in going "one step at a time?" There is this basic conflict between the short-run and the long-term. Most political and economic reformers know this only too well and our Government, to-date, has succeeded in doing a good piece of "fine-tuning". Once again the triumph of "The Middle Path".  **Free Enterprise And The Caring State Mutually Beneficial ** It is necessary, however, that we clear a considerable amount of misunderstandings that have developed in this area, of what may be called "The Middle Path". Over the last century, the Leftists have been so vigorous in demanding a greater share for the State that today Statism is almost automatically equated with Leftism. This is really interesting, because Adam Smith when he called for an attack on the powers of the State over two centuries ago was, in fact, attacking what in modern terminology would be called "The Right Wing, Mercantile Lobby". The State has been used by both the Right-Wing and the Left-Wing and indeed, in a number of Asian Pacific countries that have recently shown a spectacular rate of economic growth, the State and the free enterprise forces have worked in an amazing harmony for quite a few decades. Statism, therefore, is not the monopoly of the Leftists though in the last century, it has been largely so.  The second point on which we must be clear is that the Price Mechanism on whose altar the proponents of Free Enterprise offer their incense is not a sweet, soft or sugary mechanism. The Price Mechanism is, in fact, a very strict disciplinarian, and sometimes, the proponents of Free Enterprise themselves seek the help of the State to escape its rigours. As Sir W. Arthur Lewis has said, "The Free market is a powerful instrument of social control, which directs production to the service of demand, stimulates progress and eliminates excessive earnings". In countries, where the free market operates, there are more bankruptcies per thousand companies than anywhere else. The Price Mechanism allocates resources to different industries on the basis of their conceived profitability, but if these companies or industries do not supply what the market needs, they could literally be out of existence. That is why Joseph Schumpeter spoke of Competition as "the gale of creative destruction" - creative, insofar as new products, new processes and new technologies come into existence, and destruction because those not so equipped to face competition now face extinction. The popular conception that the Price Mechanism is a magic wand that inflicts few hardships and ensures fast growth is somewhat misplaced. In strict truth, it demands continuous innovations, continuous cost-cutting, continuous R and D, and continuous obedience to the consumers. It is rewarding to sustained efficiency - it is very punishing to sustained inefficiency.  **Free Enterprise And The Creation Of Social Surplus ** Thirdly, Free Enterprise Economics, even when they keep the economic activities of the State to what may be called the barest minimum, do not hesitate to utilise the State for a number of activities, Social Military and Humanitarian. Thus, it has been a striking feature of several Free Enterprises of the World, particularly since 1945 that while the pure economic role of the state is diminished, the expenditures of the State on Defence, Social Services, Subsidies and so on, are so large as to account for not less than 45-70% of the Gross Domestic Product (GDP). Sweden is an extreme case, but by no means a rare example of a country which is basically committed to Free Enterprise, but where Public Sector expenditure consumes some 73% of the GDP of Sweden and the tax burden is close to 60% of GDP. No less conspicuously, the share of employment in the Public Sector in the total employment has shown an increase in Europe from about 25% in the mid-fifties to as much as 50% in the mid-eighties. Indeed, ironical as it sounds, the battle cry against "over-regulations, over-taxation, over-government", has been raised in the very countries which are basically dedicated to Free Enterprise, and this is precisely what gave rise to the phenomenon of Thatcherism and Reaganism. Free Enterprise and the Public Sector both grow together, especially when their activities far from being competitive are mutually complementary; free enterprise releasing the surplus resources for the State, and the State, in turn, creating the socio-economic infra-structure for the benefit of the private sector.  The reason why in not only the advanced countries of the World, but also in the fast-developing countries of the Asia Pacific Region we find two seemingly contradictory trends developed is on bottom a simple one - atleast it must appear simple to those who are not ideological addicts. On the one side, Free Enterprise with its concomitants of the Price Mechanism and competition are allowed the maximum freedom, subject to certain regulations; on the other side, the public sector share in both the total employment and in the national expenditure of the country continues to increase. There is no contradiction because once the State, or more accurately the Government in power, has set the broad guidelines, and in the case of indicative planning the specific deadlines (as currently the Indian Government is seeking to do), then the State finds that instead of wasting its abilities, energies, and expenditure on a number of activities which the private sector can do, or can do better, these can now be dedicated to such vital visible and invisible areas of the economic and social infrastructure of the country. Health, education, the rural sector, the administration of specific anti-poverty schemes - to all these areas the State must now dedicate its capabilities and its resources, apart of course, from those of national defence and law and order.  **Productivity Central To The Welfare State ** It then becomes the duty of the economic sector of the country (including the private, the public, the co-operative and the joint sectors) to create such increases in productivity as will release the resources to the Government to implement its programmes of socio-economic development. The failure to increase productivity will imperil the creation of a Welfare State. Subsidies, social services and safety nets are vital to ensure Free Enterprise with a humane face, but at the end of the day they can be sustained only by such continuous increases in productivity as will release resources for the State. The collapse of the erstwhile Soviet Russia and the agony of such welfare States like Sweden can, in no small part be attributed to the fact that without continuous increases in productivity, surpluses cannot be generated as will finance subsidies, safety nets and social services.  **Low Tax-Rates And High Tax-Revenues ** If the first condition of creating a socially-oriented market economy in which welfare schemes can be continuously maintained is the continuous increases in national productivity, then the second condition is for the tax revenues to increase not only because of sharp increases in economic growth, but also due to a continuous expansion of the tax base. It cannot have escaped notice that during the decade of the 1980s, though there has been unfortunately, an alarming increase in income inequalities in both the U.K. and the U.S.A., the single most important fad is that the sharp decreases in tax rates were accompanied by sharp increases in tax revenues. This, therefore, supplies the relevant model under which productivity increase must be accompanied by tax incentives in such a manner that surpluses are created on the one side and increased tax revenues are obtained on the other side.  **The Role Of Privatisation  ** If we do take privatisation to be a very meaningful mechanism of the transition of a bureaucratic, over-planned State to one of the market mechanism, then it is also the duty of the private sector to release resources such as will increasingly supplement the resources of the state in such vital areas like power generation, telecommunications, road-building, etc. The very essence of privatisation is that while the State reduces its expenditure and its activities in this area, the private sector comes forth with increasing resources so as not only to compensate, but to more than make up the reduction in the resources allocated to these vital sectors.  **The Role Of Price Mechanism ** Last but not the least, the market mechanism cannot do all at all times, and in any case, in conditions of war or of a crisis, it has to be subordinated to broad State activity. Having said this, one can legitimately entertain the hope that the price mechanism will now allocate resources of the country in a most productive manner. Resources will be allocated and made use of in the most economical manner due to the price mechanism. Switzerland does not produce cars and planes; Sweden does not produce textiles and shoes; but none is the poorer for it. The discipline of the price mechanism ensures not only consumer sovereignty but also the optimisation of the economic resources of the country.  **The Middle Way Can Be A Muddled Way ** However, at a practical level, one has to recognise that the "mix" between Free Enterprise and the Welfare State will vary from country to country, and even within the same country, from one time period to another. That is why in a light-hearted manner, the opponents of the Mixed Economy say that it often ends up by being a "Mixed-up economy". More severe critics allege that the Mixed Economy ends up by being a "a muddled economy". In truth, these accusations may be valid every now and then but it is in the very nature of the Middle Path that there will be some swings from one position to another at varying times. At the onset of the economic reforms, we had to go lock, stock and barrel for ascertaining the virtues of Free Enterprise with a humane face, we want a market economy that is socially-oriented and socially-motivated.  Indeed, as the Appendix to our lecture will show some of the greatest proponents of the Price Mechanism have been none other than the socialists themselves; and some of the greatest proponents of the social conscience of society have been none other than the proponents of Free Enterprise. This is the beauty of the Middle Path and our quotations spread over a period of a century from 1894 show that again and again it is the socialists who have argued for the Price Mechanism, and it is the Capitalists who have argued for the Welfare State.  **The Middle Class And The Middle Path ** It is in this context that I may have to say a few things about the Middle Class, to which I myself belong, which may not be altogether complimentary. In too much of the literature on our economic reforms, in general, but on the Free Enterprise system in particular, we have made it appear as if the entire success of economic reforms are of the middle class, by the middle class and for the middle class. It is perfectly true that both the Prime Minister and the Finance Minister have been stressing time and again the dangers of this misconception, but the fact remains that in our presentations both within and outside India, the role of the middle class is eulogised to an extent which is politically dangerous for its survival and growth.  Do the middle classes of India recognise that there is a middle path? One can easily take a bet that of the over 1,000 articles written or speeches delivered on the process and progress of economic reforms from June 1991, 750 are almost entirely dedicated to lauding the process and the purchasing power of the middle classes of India. In the remaining 250 some references are made here and there to the "poor masses of India", but there should be no doubt as to who are the heroes in this drama.  To the middle classes it appears as the dawn of a glorious era with the spectacular rise in the prices of scrips in the stock market, with the abundant availability of more consumer durable goods coming on to the markets, with the sizable increases in the salaries and perquisites, and not least, with India's triumphs in the "beauty contests'' in the world. Every now and then some words of sympathy for the poor do leak out, but we expect that somehow the poor will be taken care of in some way. The Trade Unions and the managerial classes both say in harmony: "I am all right, Jack". The former are protected by the increasing Dearness Allowances guaranteed to them; the latter have been protected by the increasing pay scales. The question as to whether the poor do come into the picture is treated virtually as a cry of out-dated socialism.  It is not. Even at the most obviously pragmatic level, the poor still have the vote banks with them. They do not get inspired by the schemes of VRS; they want the effective working of the Public Distribution System. They are not impressed by the spectacular increases in stock market prices; they are affected by the sizable increases in the prices of foodgrains. They are not impressed by the schemes of safety net for the privileged few who belong to the organised sector; they want a safety net not for the organised classes, but for the unorganized masses.  **The Need For Honest And Efficient Anti-poverty Programmes ** The fact that "anti-poverty programs" in the past have been both political hoaxes and economic frauds, does not mean that we do not need them; it only means that they need correction, administratively and economically. Indeed, contrary to a popular assertion, the Central and the State expenditures on social services and rural development as a percentage of total GDP has not declined during the last three years, but it has not increased either. Secondly, and, perhaps more agonisingly, there has been a re-allocation within these heads so that some sectors have suffered by way of reduced allocations and others have benefited. But the perception is there, that the true victims of inflation have been the poor and the needy; not the middle classes of India.  If we do wish to follow the Middle Path, then the middle class must give considerable attention to how they can devise safety nets, not for their own selves but for the millions who do not belong to this class. After all, the very use of the words "The Middle Class'' implies that there is not only "an Upper Class", but also a larger "Under Class". All this has nothing to do with socialism. To plead that we must have a passion for economic growth with a compassion for the poor is not to repeat a cliché of socialism; it is only to recall the "talisman" that Gandhiji bequeathed to all of us.  I seem to have sung the praises of the Middle Path so eloquently that I may leave you with an impression that it is an easy path to follow. In some ways, it is; in many ways it is not. To reiterate: If during the initial transitional period of the introduction of economic reforms, in fact the inequalities multiply, inflation rages, unemployment shrinks or is believed to have shrunk, crime and corruption is visibly increased, then people are going to swing to one extreme or the other, and here it is that it is going to be extremely difficult to maintain and assist The Middle Path.  **Middle Path Can Convert Economic Warfare Into Economic Welfare** However, I do believe, and this I now say as the finale to my speech that if we approach The Middle Path with a spirit of compassion, with a sense of compromise and with some degree of innovation in our thinking, The Middle Path offers to us a path both of peace and of progress. Let me hasten to elaborate.  During the last 40 years of our economic policies, we, consciously at sometimes, but sub-consciously at most times have created not merely an economy, but a society that is split into warring segments. Through our policies of licensing, controls, reservations, taxations, differentials and subsidies, we have reared a society which far from being harmonised into the _INDIA INC_ on the pattern of _JAPAN INC_ has actually converted our economy into warring segments. We may not have had competition in the market place, but we have had any amount of savage struggles by all sorts of vested interests. Each economic policies had put -  THE PUBLIC SECTOR AGAINST THE PRIVATE SECTOR  THE INDIAN SECTOR VERSUS THE FOREIGN SECTOR  THE LARGE SCALE SECTOR VERSUS THE SMALL SCALE SECTOR  INDUSTRIAL LABOUR AGAINST INDUSTRIAL MANAGEMENT  TENANTS VERSUS LANDLORDS AND SO ON  In splitting our Society into such warring fragments by ever-multiplying legislation of all types, we have deprived our society of the quest for unity, the will to compromise, of the skills in innovative policy-making, of the sense and spirit of harmony - the very virtues which have made the various conflicting interests in Japan come together in a spirit of harmony to forge Japan Inc - a cry so frequently heard in India, but hardly, if ever, achieved, except during periods of war.  **Examples Of Needless Economic Warfare ** How else can we explain to the World what we have come to have in India:  - **Rents prevalent in 1994 which in money terms are the same as in 1940 and in real terms 2% as those in 1940**. By what canons of democracy can this dictatorship of tenants be defended? Yet, is it too much to ask that an innovative formula be worked out reconciling in a spirit of give-and-take the conflicting interests of the tenants and landlords? The late L.K. Jha once submitted a whole Report showing how so many democratic countries (and cities) have worked out a number of innovative formulae in a spirit of compromise; in 1983 he noted, for example, that in Washington D.C., rents were revised once every three years to the extent of one half of the increase in the Consumer Price Index. But till very recently, Government legislation in many parts of India ruled out any attempt at innovation and compromise by its draconian rent-control legislation. The search for vote-banks negated all principles of fair-play, atrophied the spirit of compromise - the Middle Path was exiled. - **The same tragedy has befallen us in the area of Industrial Relations.** Foreign commentators, on the Indian economy, are absolutely horrified to find that, per 1000 Industrial man-days, India loses due to poor Industrial relations, more man-days than any other country in the World. Ironically, our very Legislation and Labour Judiciary exalts the conflicts and cleavages between Labour and Management instead of encouraging them to arrive at some measure of consensus at the bargaining table, the table of Collective Bargaining. Consider the gigantic losses suffered by the Indian economy: each year, 15 days are lost due to Port strikes, 15 days are lost due to Transporters' strike, 10 days are lost due to Bank strikes, and 22 to 26 million man-days are lost due to strikes and lock-outs in Indian Industry - not to speak of the many, many more millions of man-days lost due to deliberate, go-slows and the disruptions and destructions caused by public ire or "public-interest" causes. **** - **Consider again the cleavages and conflicts deliberately introduced by government legislation between the small scale and the large scale sector. ** The manner we have structured and fostered our small scale industries is a tribute to our spirit of generosity but not to our sense of economics. Thanks predominantly to a continuously enlarged list of reservations, tax rebates and outright subsidies the small scale industries of India have been brought to a stage when even with these major crutches, most of them cannot justify their existence. Conspicuously in Japan, in Germany and in Sweden, over 75% of all industrial establishments employ less than 100 persons. In some areas, their productivity per person is even higher than that in the large-scale industries; in other areas, they have carved out a niche for their activities and products; but in most areas, they have built up a synergistic relationship with the large-scale industries. In India, on the other hand, a great majority of the small scale industries have been nothing but, small scale replica of the large-scale industries, and instead of relying on their basic economic or technological strength to grow, they have relied almost entirely on tax incentives and the system of reservations in order to survive. Once again, instead of building up synergistic relationship between large-sale and the small-scale, as we find so prominently in the two great industrial countries of the world, namely Japan and Germany, the small-scale industry in India has been reduced largely (though happily, not entirely) to being a sector, whose principal survival is built on subsidies and governmental protection, and the continuous clashes between small-scale and the large-scale have, therefore, become the order of the day; what should have been an arena for joint growth has become a battle-field for snatching concessions.  All the above three illustrations show that with some degree of innovation and a greater degree to compromise, we could have evolved a situation which instead of giving us economic warfare, would have given us economic welfare.  **Middle Path Leaves Room For Compromise And Innovation ** Not only is the Middle Path one that makes us seek compromises and evolve consensus to the mutual good of the conflicting parties, but it also provides by its very nature a fertile field for the evolution of imaginative policies. By definition, the Middle Path is free from ideology; but it is not free from the conflict of different interests. Let us see how it could have been, or it could now have been applied to a question which is so dear to the hearts of so many Industrialists.  **A Scheme To Marry The Interests Of Indian Promoters, Investors And The Poor**  Right at this present moment, many Indian industrialists are disturbed that, sooner or later, they will be subjected to a raid by either Indian or Foreign parties, and for this purpose, there has been a persistent demand that a preferential allotment of shares be issued to the Promoters of Indian industries at preferential prices. This demand has been perceived throughout the country as nothing but an example of blatant selfishness. Could it have been possible to come out with alternative schemes? My own suggestion takes its inspiration from the Trusteeship Concept bequeathed to us by Mahatma Gandhi. In such a scheme of things, the following could be the major planks:  - The Indian promoters would be allowed to hold additional shares of upto 10% of the enlarged capital of the Company that they manage, provided these shares would be put in a Specified Trust, whose activities would primarily deal with genuine applications from and for the poor and the needy. - The Indian promoters would be permitted to create shares by paying one-third of the average price for the last six months. - In return, this investment made by the Indian promoters would become the property of the Trust, but the voting power would be exercised in favour of the Indian promoters, and would continue to do so unless the Company managed by them fails to declare a dividend for 3 years in succession. - The dividend received would, after deducting the cost of administering the Trust be distributed by the Trust for specific purpose which must be directly related to the needs of the poor. - The Trustees must be persons totally independent of the Industrial house, and once appointed should not be removed except for moral turpitude. - The Trust shall stand dissolved after a period of 15 years and its corpus of the shares vested in the Trust by the Indian promoters will revert to them. - In this manner, the Indian promoters will be able to buy their shares at a relatively low price, provided the dividends received during this period of 15 years are entirely used for charitable purposes. It simultaneously assures that in the absence of total inefficiency or non-viability of the Company, they have managed that they will be protected by the voting rights invested in the Trust against hostile raids. This then would represent the marriage of both the practical and the philanthropic goals, and the Trust would, in effect, serve as a concrete symbol of the Trusteeship concept bequeathed to us by Gandhiji. By no means is our suggestion fool-proof. Certainly, it is subject to several improvements and various legislative changes. But this is the very essence of the mixed economy, that we bring a pragmatic consensus approach to most matters and in so doing are not only to subdue our own passions and prejudices, but also to use law for man, and not man for law.  The Middle Path is not free from difficulties, particularly for an economy, which is about to make a transition from 40 years of over-planning, over-bureaucratisation, over-controls but, the key words in this are: Gradualism, Compromise, Tolerance and Pragmatism. At the best of times, the market-mechanism, the hand-maiden of Free Enterprise, has its limitations, its injustices, its excesses. That is why over a century ago, Count Otto von Bismark insisted that German Capitalism must be "oiled" with the safety-nets of social security schemes, and that is why sixty years later, Dr. Ludwig von Erhard insisted that the market mechanism must be "socially oriented". That is why both Franklin Delano Roosevelt and Lord Keynes insisted on strategic State Intervention and a social security network as essential concomitants of a Free Enterprise system. That is why so many democratic socialists sing the praises of the price-mechanism; and in reverse, so many exponents of Free Enterprise call for "the safetynet of social services."  **Conclusion ** We, in India, need Free Enterprise to unleash the gigantic entrepreneurial wealth of our country. We need it to correct the excesses of an over-politicalised, over-planned, over-bureaucratised economy. We need it to prevent the further global isolation of India and instead make her a global player in the next six to seven years. But, let us reiterate our credo: Gradualism, Compromise and Compassion must be simultaneously our watchwords. As we said before, and now say it again in conclusion, to combine a passion for rapid economic growth with a compassion for the poor is not to repeat a cliché of socialism - it is only to recall the 'talisman' which the Father of our Nation bequeathed to all of us long years ago. --- ## [Musing] Is This The Freedom We Fought For? URL: https://indianliberals.in/musings/is-this-the-freedom-we-fought-for/ ### Body _Produced below is an essay by _Sadanand Varde, published in a 1997 booklet titled [Fifty Years After.](https://indianliberals.in/content/fifty-years-after/)_ The booklet was edited and published by Indian liberal stalwart S.V. Raju, and was jointly sponsored by the Project for Economic Education and Friedrich Naumann Stiftung. _I left Elphinstone college where I was a student, joined the freedom struggle in 1942 and was jailed for a year. Hence I was labelled 'freedom fighter'. But the nomenclature 'freedom fighter' and all that is associated with it is not something that I carry with any pride or enthusiasm because many persons who carry that 'designation' have ruled the country and some of them, very distinguished ones at that, have been hauled in courts for criminal offences. Those who have been freedom fighters and those who were born after freedom, have a sense of sadness, a sense even of alienation with the sorry state of affairs of our country today.  **A Vision of Free India ** When Gandhiji gave the "Do or Die" call, many like me responded. We had dreams of what we would do after freedom. And those dreams, or the vision that we had were described, for example, in the 8th August 1942 Gowalia Tank resolution which proclaimed that power would belong to the toilers in the fields and factories and depicted a very inspiring picture of things to come.  **Why Bhagat Master Wept ** Recently I was at an institution in Neral called the Kotwal Wadi Trust. Kotwal was a freedom fighter. By profession a lawyer, he belonged to the barber community, and responding to Gandhiji's call, he did a big job in the Karjat taluka, to the extent of making the functioning of government administration almost impossible. He was much sought after by the British, and he went underground. This function to which I went was to celebrate the completion of 50 years of the Kotwal Wadi Trust, founded by Mr. Haribhau Bharsale, a humble Gandhian who has been working among the adivasis. On that occasion, my friend Liladhar Hegde sang a ballad composed by Vasant Bapat on the revolutionary exploits of Bhai Kotwal, who was shot dead during an encounter in 1943. As he was singing that beautiful composition, Mr. Bharsale said that of the 18 people who were associated in that struggle in 1943, only one had survived and pointed out to an old man ('Bhagat Master', he called him) sitting in a corner. I could see tears flowing down his cheeks, and I asked myself the question why Bhagat Master was crying. Is it because he remembers Bhai Kotwal or is it because he is sorry that he is alive today to witness the sorry state of affairs of the country.  **What Have We Done to India? ** The question is what has happened to India? What have we done to India? What have we done to our representative institutions, to our law and order agencies, to our education; to our growing population? Now, while trying to answer these questions, I must mention two things that struck me. Once, while going through India Today magazine I came across a beautiful photograph of Gandhiji. In fact, it was Ben Kingsley's photo. And the title said: "India, the land that worships feet". Gandhiji was sitting and an elderly woman with her little child was touching his feet. The lower portion of that page read: "Lakhani, the shoes that worship feet". Gandhiji was being used to promote a product. I am not going into the question of whether it was right or wrong, but when this advertisement is criticised by many as the outcome of the influence of Western ideas, I feel highly offended. This is a totally indigenous product. I don't remember having seen any advertisement or product promotion using Lincoln's or Kennedy's name.  Recently, I read a news item that some six so-called 'freedom fighters' were sentenced to five years rigorous imprisonment for having forged documents to create a record that they were freedom fighters. Though they did not undergo any imprisonment during the freedom struggle they did undergo rigorous imprisonment after freedom!  I don't take the view that over the last fifty years, nothing has happened in the country. Take a balance sheet. We have had industrial development, our coverage of education has expanded, we have succeeded in establishing a large network of railways and communications and we have a reasonably modern scientific establishment to mention a few. But by and large when we take an overall view, the development that has taken place has bypassed a large majority of the people for whom, the 1942 resolution proclaimed, freedom was to be fought. Maybe we had this illusion that when we attained freedom, all our problems would be solved. And therefore, I would like to quote from Winston Churchill's speech in the British Parliament when he attacked Clement Attlee. It is a very malicious statement. This is what he said:  "Power will go into the hands of rascals, rogues and freebooters. Not a bottle of water or loaf shall escape taxation. Only air will be free and the blood of these hungry millions will be on the head of Clement Attlee. These are men of straw of whom no trace will be found after a few years. They will fight among themselves and India will be lost in political squabbles."  When I look at the present scenario in the country, the most dominant factor in our public life today is political squabbles, be it in a state or in Delhi.  **Who is to Blame? ** When I said that the Development that has taken place has bypassed a large majority of the people, I refer to the lack of the basic minimum amenities of life. We have, after 50 years of independence, a government drawing out a common minimum programme, in terms of drinking water, primary education and health facility! This is not the result of the new economic policies that have been pursued in the last 5 years i.e., since July 1991. It is as though Mr. Manmohan Singh is the real villain of the piece, on account of whom we have landed ourselves into problems of growing poverty, unemployment, overpopulation and so on. I don't also subscribe to the view that the onslaught of multinationals in the country is jeopardising our sovereignty - our freedom. When I make my submissions, let it not be misunderstood that it is with reference to policies that have been pursued in the last five years.  As the poet William Wordsworth wrote 'Bliss was it in that dawn to be alive, but to be young was very heaven". That was the period in which I was involved in the freedom movement, and therefore I quote from an interview which Mr. Achyut Patwardhan gave over fifteen years ago around the time the Bofors scandal had surfaced. This is what he, one of the tallest among freedom fighters, said:  "Initially I believed that India would flourish when the British left; later I believed that India would flourish when it adopted socialism. Now that I am proved wrong both times, I would prefer to be quiet."  It is only great men like him who could speak with such humility. Achyut Patwardhan went on to say:  "Today, the State has lost all moral authority. It is viewed as the creation of crooks, by crooks for crooks. Nothing seems to work without the use of money, muscle power or influence. So even if we have achieved a little prosperity, people think it is "inspite" and not "because" of the State. Back in 1947, you could distinguish between 'bandits" and "politicians", not now. That is a measure of how far we have fallen."  These agonising words came from him much before the Kesris and the Sukhrams, came on the Indian political scene.  **An All-Powerful State ** When, after Independence, we established the National Planning Commission, in our early enthusiasm we placed the State at the head of the economy in all the decision making processes hoping that the controlling mechanism would bring out all that is necessary for rapid economic development. We did not realise that the business of government is not business. We therefore created a closed economy, raised a big tariff wall to protect our industrial structure so that it could grow, which for some time no doubt was necessary. But we created an industrial and trade regime in which enormous powers were handed over to ministers and bureaucrats. We followed in the wake of that model of development, with fiscal policies or taxation policies which could never be expected to be complied with, but which instead led to the growth of a parallel economy which today accounts for nearly half the economic activities equated to half the national production of the country.  We created a huge public sector. We have sunk more than Rs. Two lakh crores in the public sector. And we associated the public sector with public interest in only one sense - protecting the employment of those who are employed. Whether they are productive, whether they add to national wealth, whether they meet the needs of the community, were considered irrelevant considerations and the capital of over two lakh crores did not give a return of even 2.5% on investment.  As the loss making industries were supported with annual budgetary grants, the managers were happy that losses would be taken care of. The result was, that funds from the state exchequer which ought to have legitimately gone to education, infrastructure, health services, were denied those resources. In the process, we inherited a system where government became a very important agent, a very powerful factor in all decision-making processes.  **VIP Republic ** The next point I would like to refer is the complete debasement of the entire political class. There are very many outstanding examples, no doubt, of men committed to ideals, to values. The debasement of the political class has led to what we have in the last 50 years created - a VIP Republic. We wanted to create a democratic republic but what we have created is a VIP Republic.  In this VIP Republic we have MPs who occupy government bungalows even though they have ceased to be MPs. They are in heavy arrears of rent and telephone bills. The result is that those to whom people look to solve their problems, to set the economy going, are the very people who are using their positions of power, their offices whether as MPs or MIAs, to pursue interests which are neither social nor national. During a discussion I attended recently someone asked "How is it that Dr. Ambedkar, after having considered so many constitutions of the world did not make any provision for controlling defections?”  **Crabs or Lobsters? ** We have representative institutions which speak in terms of parliamentary privilege. I remember, when Pandit Nehru was the Prime Minister, he picked up the telephone and spoke to the Speaker Mr. Mavalankar: 'Will you please drop in, I have some work' requested Pandit Nehru. In reply Mavalankar sent him a note saying: ‘Mr. Prime Minister, the Speaker does not go to the ministers' chambers.' Within seconds, Nehru rushed to Mavalankar's chamber and said, 'I am sorry.’ But what do we have now? We have in our parliamentary institutions new conventions e.g. a government is defeated, yet its budget survives! These are the result basically of the debasement, the degeneration of the political class. Mr. Biju Patnaik (he is no more) was also a part of that establishment. He described the United Front which is in power, as a group of lobsters. George Fernandes in his response said that crabs were being upgraded as lobsters.  I mentioned earlier the point made by Achyut Patwardhan in his press interview about criminals being indistinguishable from politicians. We have a very similar version here in Mumbai. The Shiv Sena took the stand that if you want to apprehend the goondas, you must not apprehend the Marathi goondas before you have apprehended the other goondas! We have the spectacle of an elected member of parliament going on fast within the precincts of a police station because a notorious criminal was arrested by the police. And the MP could not be arrested because parliament was in session. When parliament is in session, you cannot arrest an MP without the permission of the Speaker of the Lok Sabha or the Chairman of the Rajya Sabha. If parliament was in session, he should have been there.  That is why I said we have created a VIP democracy. Crores that go into VIP security and the crores that go into maintaining this establishment is an indication of the opportunities that are denied to the common people. I don't think the law and order situation immediately after independence or even in the worst days of Partition was so bad as it is today. The agents of law and order are looked upon more as enemies of the people than as friends.  The question is: Is this a systemic failure? Have we adopted a political system, a constitutional apparatus which is alien to our genius and our tradition, or is it a shameful failure of the principal play actors in the system?  **A Question of Legitimacy ** Then there is the question of legitimacy. What is legitimate? We have come to a situation where anything that has the sanction and support of powerful groups or interests or the power to hold society to ransom is considered legitimate. Demands get legitimised on the basis of the capacity of those who make the demand to hold the society to ransom. And then, in sheer helplessness the people on the other side yield to the demand. Today is the third day of the BEST strike. It has caused considerable hardship to millions of people travelling by buses. So we now have new ideas of legitimacy.  **Competitive Populism ** In our zeal to provide for those who are below the poverty line, we have been dishing out various kinds of programmes with a delivery system which is incompetent and corrupt. Andhra Pradesh has been following for quite some time a policy of dual cards in their rationing system. A study made of their scheme proved that the total number covered by the dual card system, amounted to more than the total population of Andhra Pradesh!  And then we have, both on the side of people's organisations and on the side of the government what one may call competitive populism. Whether it is a trade union, a government department or it is a people's organisation clamouring for something, the demands made are often at variance or totally indifferent to the overall requirements of the nation. This has resulted in our governments following the policy of open ended subsidies of different kinds representing a wastage of resources and which are not cost effective - be it in the power sector, or in the sector of education as a result of which our economy has suffered.  **New Federalism? ** Currently there is talk about what is called new federalism. This is a new development. I am of the view that the founding fathers of the Indian Constitution conceived India as a federation where the focus of power would be more in the states than in the central government. The provision of the Grants Commission every five years is in itself some kind of a guarantee for balanced regional development so that resources can be transferred from the better off states to the not so better off states. We have now a situation where the chief minister of Punjab after having come to power gives water and power free to farmers and before the ink on that order has dried, and without batting an eyelid, he comes to the central government with a request that a particular loan extended by the central government for a particular purpose be completely waived.  To what extent is the Tamil Manila Congress an expression of the regional aspirations of the Tamilians other than that represented by the DMK and the AIADMK. I concede the point that there is such diversity in terms of problems etc. that it is necessary to take note of this, but let us remember that it is in this era of planned development that the central government in the name of centrally sponsored schemes has acquired more and more power. So this again is a problem with our republic.  And then, we have over 2.5 million pending court cases. We have not been able as yet to devise a system where we could do something to sort out this problem.  **Wasted opportunities ** Therefore, when I look back, I do feel that these 50 years have been years of wasted opportunities and lost morality. I think the decline started when Indira Gandhi became the prime minister. Not that these elements were not present in the polity before that, but using men as material to achieve objectives became fashionable and the decline started from that time. Therefore, we are now in a situation where we want freedom without responsibility, power without accountability, rights without duties, remuneration without work. In such a situation where there seems to be an attitude of total unconcern and a no-holds barred obsession to pursue sectional interests, the country is really facing a major crisis. This is not the freedom that I visualised when at the age of 17. I left college and joined the struggle.  I would like to end by reading out to you a letter from Sheila Kaul to Nanasaheb Goray. At that time, Rajiv Gandhi was the prime minister, during whose tenure, there were different kinds of gimmicks. And one such gimmick was the 'Freedom Run'. Another was 'Dandi March Run'. In her letter Sheila Kaul requested Nanasaheb Goray to associate himself with this particular run. This was Nanasaheb's reply:  "March 8, 1988.  Dear Sheilaji,  I have to thank you for your letter dated 22.2.1988. The proposed 'Dandi March' is, in my opinion, a parody of the original, as comic as the freedom run in Delhi. Instead of wasting money on this pseudo heroic march, make salt cheaper by 50%. That will be some tribute to the memorable event. Why not leave Bapu alone? At that time, Gandhiji had compared the real income of the common man with the salary and perks of the Viceroy of India Is Rajivji willing to do it now. Needless to say, I will have nothing to do with these funsters. I hope they will have plenty of Pepsi Cola on their way to Dandi." --- ## [Musing] Jamshed Antia's Views On Sales Tax URL: https://indianliberals.in/musings/jamshed-antia-views-on-sales-tax/ ### Body _Produced below is a piece published in the [June 1958 issue of the Forum of Free Enterprise periodical.](https://indianliberals.in/content/sales-tax-by-jamshed-m-antia-jun-1-1958/) The author Mr Jamshed M. Antia discusses implications of existing implementation of sales tax in India at the time. He further goes on to recommend changes in implementation mechanism that could benefit industry, consumer, and national economy. _During the last 20 years Sales Tax has become an important feature of India's Public Finances. The first Sales Tax took the form of a tax on the sale of motor spirit, which was imposed by the Central Provinces in 1937. Madras was the first Province to adopt the General Sales Tax in 1938. With the recognition of its potentialities as a revenue earner Sales Tax has been adopted by all the States. Indeed, today it has become the mainstay of State Finances, rivalling in importance even Land Revenue. In States such as Bombay its importance is greater than that of Land Revenue. It has also proved one of the most fruitful sources of revenue. Whereas in 1944 the total revenue of all States from Sales Tax was only Rs. 8 crores, today it is more than Rs. 80 crores, and is very nearly equal to the revenue from the Central Income-tax other than Corporation Tax. With rising money incomes the Sales Tax promises to rival in importance even the Income-tax. **THE NATURE OF SALES TAX** Sales Tax, as its name implies, is a tax on the sale of goods, and is assessed on the seller. It may take the form of a General Sales Tax imposed on the sale of all goods, or alternatively, it may take the form of Selective Sales Tax imposed on the sale of certain specified goods only. Selective Sales Tax in India is imposed on the sale of motor spirit, electricity, entertainment and transport. There are also General Sales Taxes which, in India, are imposed by the Centre as well as by the States on the sale of goods generally. One variant of the tax on a sale is the Purchase Tax. As the purchase and sale are two aspects of the same transaction it will be readily appreciated that the Purchase Tax is really a form of Sales Tax. There is, however, one difference. It is assessed on the purchaser instead of the seller. This tax is found in some States in India. There are three main systems of Sales Tax, namely, the multi-point, the single-point and the double-point. When tax is levied on every sale regardless of whether the goods involved in each sale have borne tax on any previous occasion, the tax is known as the Multi-point Sales Tax. On the other hand, under the Single-point system of Sales Tax the tax is levied at only one point before the goods are finally sold to the consumer. This tax may be levied either on the first point of sale or the last. In some States the Single-point Sales Tax is levied both at the first point of sale and at the last point of sale. Such a system has come to be known as the Double-point system. All the above systems with their variants are to be found in the States of India. Sometimes the Single-point system is applied in the case of certain specified goods, while the Multi-point system applies to all other transactions. There is no uniformity in taxation of sales by the States. The Union, however, only levies the Multi-point Inter-state Sales Tax on sales in the course of Inter-state Trade. In the discussion which follows, references to Sales Tax will refer not so much to any particular type of tax, but rather to the totality of the various Sales Taxes, General and Selective, which are levied by the States of the Union. Our discussion will also cover the Central Sales Tax on Inter-state Trade. **CONSTITUTIONAL BACKGROUND** Let us review, very briefly, the history of the Sales Tax legislation against the Constitutional background, as it throws some light on the reasons for lack of uniformity in taxation of sales in India. Under a Federal Constitution such as India's, there is a division of powers between the Centre and the States. All laws have, therefore, to be framed in accordance with the Constitution; otherwise they will be held invalid by the Courts. The Government of India Act, 1935, divided the sources of revenue between the Centre and the Provinces. Under that division Sales Tax was made a Provincial subject and the various Provincial Sales Taxes were levied under the authority of that Act. However, there were no clear cut principles for determining the location of a sale and various States claimed the right to tax the same transaction for a variety of reasons. As a result there was confusion and great diversity in Sales Tax laws accompanied by multiple taxation of the same transaction by different States. After Independence, the Constituent Assembly applied itself to the task of dividing the revenues between the Union and the States. The States were given the right to tax purchases and sales inside the State of goods other than newspapers or advertisements in newspapers. Further, by Article 286 of the Constitution, they were prohibited from levying Sales Tax on sales effected outside their territorial limits even when such sales were made by resident dealers. The Constitution also prohibited them from taxing sales in the course of import and export or in the course of Inter-state Trade. Accordingly, State Sales Tax laws were modified to conform to the Constitutional requirements. However, there was an Explanation to Article 286 according to which a sale was deemed to take place in the State in which the goods were delivered. Under this, States claimed the right to tax non-resident dealers, and hence sales in the course of Inter-state Trade. The interpretation of this Explanation caused a great deal of difficulty. Ultimately the Supreme Court ruled that it was within the competence of the States to tax sales effected within the States by dealers resident outside the State. This Court ruling nullified the prohibition of taxation by States of sales in the course of Inter-state Trade. Later the Court reversed its stand. The whole question was reviewed by the Taxation Inquiry Commission and, following this inquiry, the Constitution was amended in 1956. This Amendment removed from Article 286 the Explanation which caused so much difficulty. The amended Article 286 prohibits States from taxing - Sales outside the State. - Sales in the course of import or export. - Sales in the course of Inter-state Trade. It also authorises Parliament to formulate principles for determining where a sale takes place in any of the three ways just mentioned. Further, Sales Tax on sales in the course of Inter-state Trade was made a Central subject. The Constituent Assembly recognised that certain goods were essential to the life of the nation and that taxes on their sales should be Centrally regulated. It was, therefore, provided by the Constitution that no tax on the sale or purchase of any goods declared by Parliament by law to be essential to the life of the community should be imposed unless it had received the prior approval of the President. Accordingly, the Essential Goods Act, 1952, was passed and 15 commodities, including among others, cereals, coal, and raw cotton, were declared to be essential goods. The aim of the Constituent Assembly was to introduce a certain degree of uniformity in the taxation of these goods and not to completely exempt them from taxation. The President however adopted the policy of freezing the existing tax structures which caused considerable discontent, and the opportunity was taken at the time of amending the Constitution to introduce a further provision to the effect that taxation of the sale or purchase of goods declared by Parliament by law to be of special importance in Inter-state Trade or Commerce would be subject to such restrictions and conditions in regard to the levy, rates and other incidents of taxes as Parliament may by law impose. **THE CENTRAL SALES TAX ACT, 1956** Following the Sixth Amendment, Parliament enacted the Central Sales Tax Act, 1956. Its object was threefold. Firstly, it formulated the principles for determining whether a sale took place in the course of Inter-state Trade, or whether it took place in the course of import or export, or inside a State. Secondly, it declared certain goods to be of special importance in Inter-state Trade and imposed restrictions and conditions which all State laws imposing taxes on these declared goods have to observe. Thirdly, it provided for the uniform levy, collection and distribution of taxes on the sale of goods in the course of Inter-state Trade. a. Principles for determining various types of Sales: The Central Sales Tax Act has formulated the principles for determining various types of sales under the Act. A sale is defined as any transfer of property in goods from one person to another for cash or deferred payment or for any valuable consideration. Four types of sales are distinguished by the Act. - **Sale inside a State** - A sale will be deemed to have taken place inside a State if at the time of the contract of sale the goods are within the State. - **Sale outside a State** - Any sale which is inside any State will be deemed to be outside all other States. - **Sale in the course of Import or Export** - A sale is regarded as being in the course of import or export if the property in the goods passes by transfer of documents while the goods are still beyond the frontiers 9f India, or if such sale or purchase occasions the export or import of goods. - **Sale in the course of Inter-state Trade** - A sale will be deemed to be in the course of Inter-state Trade either when the contract of sale occasions the movement of goods from one State to another, or when the property in the goods passes by transfer of documents while the goods are in transit from one State to another. b. Goods declared to be of special importance in Inter-state Trade:  The Central Act repealed the Essential Goods Act, 1952 and in its place declared certain goods to be of special importance in Inter-state Trade. The States are prohibited from taxing sales of these declared goods at rates higher than 2%, nor may they levy such tax except at the last stage. But if the goods enter into Inter-state Trade the States will not be permitted to levy this tax even at the last stage. c. Uniform levy of Sales Tax on sales in the course of Inter-state Trade: The Central Sales Tax is a Multi-point Sales Tax and every dealer who sells goods in the course of Inter-state Trade is chargeable to it. All dealers are required to register themselves in whichever State their liability to Central Sales Tax arises. There is no exemption limit related to turnover. The tax is levied by the Centre but the collection and administration of the tax is entrusted to the appropriate State Governments. It is, therefore, interesting to ascertain the meaning of "appropriate State". In relation to any sale the "appropriate State" under the Act will be either the State from which goods are despatched or the State in which the sale is effected by delivery of documents. **STRUCTURE OF SALES TAX RATES** a. Rates of Sales Tax on sales in the course of Inter-state Trade: The effect of the several provisions of the Central Act as regards rates of tax on Inter-state sales is as follows: -  - In the case of declared goods intended for resale Central Sales Tax is chargeable at 1%. Where, however, such goods, sold in the course of Inter-state Trade, are intended for manufacture of other goods, they will not be liable to any tax. - Where a registered dealer sells to another registered dealer in the course of Inter-state Trade, Sales Tax is chargeable at 1% of the price, provided the purchasing dealer obtains from the selling dealer a declaration in Form "C" to the effect that the goods are either intended for resale or for use in the manufacture of goods for sale or for use by him in the execution of any contract and that such goods are included in his certificate of registration. Where, however, such goods are either exempt or are chargeable at rates lower than 1% in the appropriate State, the Tax will be either nil or at the lower rate prevailing in that State. - Where a registered dealer sells in the course of Inter-state Trade or Commerce goods to an unregistered dealer or to a consumer, the sale will be treated as though it had taken place inside the State and will be taxed at the General Sales Tax rate in the despatching State. b. Sales Tax on sales inside the State: Intra-state sales are subject to varying rates ranging from less than 1% to 30%. These differ from State to State. **THE BURDEN OF SALES TAX** On whom does the burden of Sales Tax fall? Whatever be the initial impact of this tax, it is ultimately borne either by the consumer or the manufacturer or by the trader. The proportion in which it is borne depends upon the relative bargaining power of the consumer and the manufacturer. Sales Tax can be passed on fully to the consumer only where the consumer's demand is totally unaffected by price changes. Where higher prices lead consumers to purchase smaller quantities of goods only a part of the Sales Tax can be passed on, as any attempt to pass it on fully would result in stocks being left unsold. The profit margins of the manufacturers and dealers will, therefore, be squeezed to some extent depending upon the relative bargaining position of the consumer vis-a-vis the dealer and the manufacturer. However, in conditions of short supply most of the burden of tax will be passed to the consumer. No comprehensive statistics of the burden of the tax on manufacturers are available. However, figures published by the Millowners' Association suggest that profit margins of the cotton mills have been squeezed to some extent, and this probably holds good for other industries as well. Let us now consider statistics of the distribution of this tax, between the States, between social groups and on the consumers. The burden per head for all-India population works out to nearly Rs. 2.2. But the Finance Commission's report shows that this burden is heavier, per head, in Industrial States than in Agricultural States. Thus Bombay and West Bengal are the most heavily taxed States, while Rajasthan has the lowest tax burden per head. Further, the tax weighs more heavily on town population than on rural population. Thus, out of the total Sales Tax revenue of Rs. 32 crores in Bombay, more than half came from Bombay city and Ahmedabad. The Taxation Inquiry Commission worked out the burden on the consumer with an income below Rs. 300 p.m., and came to the conclusion that the burden was 1% and that it was proportional to income. Following the same basis I have re-worked the burden of the Sales Tax in Bombay City taking into account the present rates of Sales Tax in Bombay and including Selective Sales Taxes. The analysis reveals that the present burden is approximately 4% of the income. However, when this Sales Tax burden is compared with the Income-tax burden, the analysis takes on new significance. Thus all unmarried individuals having incomes between Rs. 300/- to Rs. 400/- per month would actually pay twice as much by way of Sales Tax as they would by way of Income-tax, and individuals having incomes between Rs. 400/- per month and Rs. 650/- per month would pay more by way of Sales Tax than by way of Income-tax. It is only at an income level of about Rs. 700/- that the burden of Sales Tax and Income-tax become equal. But these comparisons refer to unmarried individuals. In the case of married individuals having two children the burden of Sales Tax is actually greater than that of Income-tax on all such individuals having incomes below Rs. 9oo/- per month. How can there be integration in taxation when all the efforts of the Centre to give reliefs based on equitable principles are undone by State Governments with their regressive taxes? _Table illustrating the relative burden of Sales Tax __and Income-tax in Bombay City_ **Income Monthly** **(Rs.)** **Monthly Estimated Sales Tax if the Monthly Income is spent (Rs.)** **Monthly Estimated Income-tax (Rs.) ** _Married individuals with 2 children _ _Unmarried individuals_ 300 12.01 nil 6.50 400 17.99 3.00 9.50 500 22.11 8.50 15.00 600  27.76 14.50 21.00 700 33.20 23.89 30.71 800 39.95 33.34 40.16 900 45.26 44.18 49.01 **EFFECTS OF SALES TAX ON THE INDIAN ECONOMY** a. Effects on Trade: Under the powers given by the Government of India Act, 1935, and by the Constitution, the States started levying Sales Tax solely to raise revenues to cover their deficits arising from Prohibition and from their Development Schemes. There was no all-India co-ordination, and the various States experimented with and imposed taxes based on various formulae. As the rates and systems of Sales Tax differed, the incentives to sell goods in different parts of the Union were distorted. As sales outside the State in which the selling dealer was registered could not be taxed by the dealer's State, trade was diverted to those States which had the lower Sales Tax. Indeed, so pronounced was this diversion that States found it profitable to tax non-resident dealers selling goods within the State. This diversion of trade was more pronounced amongst adjacent States than among those more distant, as higher transport charges sometimes wiped out the tax advantage. In States like Madras, having multi-point taxes at high rates, the competitive position of the Madras dealers was destroyed by the cumulative effects of the multi-point tax. The economic adjustment took the form of elimination of certain middle channels of distribution and manufacturers set up their own purchasing and distributing organizations. But the most serious aspect of these diversities in rates was felt by the nation as a whole. Differences in Inter-state Sales Tax rates act like tariff barriers and hamper the growth of trade. This has serious consequences for the economy. If trade does not expand, each State will aim at self-sufficiency and specialization will not be encouraged. Inability to specialise will result in inefficient small scale methods of production as the market for each product will be limited by the State boundaries. Production will, therefore, decline. The Inter-state difference in Sales Tax rates will thus reduce the level of production, the level of employment and of national income. The standard of living will be lower than if trade was allowed to flourish unhampered by differences in Sales Tax rates. The tremendous distortion of channels of distribution which these complex and varied taxes produced underlined heavily the need for the introduction of uniformity and all-India co-ordination. But as sectarian interests predominated, nothing much was achieved. Ultimately Parliament had to pass the Essential Goods Act, 1952, regulating the taxation of goods which were essential to the life of the nation, but its administration only resulted in freezing the rate differentials. These have been sought to be removed by the Central Sales Tax Act. Furthermore, recently certain goods have been removed from the list of goods subject to State Sales Tax and have been made subject to Central Excise Duties. These have gone some way towards introducing uniformity and order into the scheme of Sales Tax but they have not eliminated rate differentials. The Central Sales Tax Act provides for uniform levy of Sales Tax on transactions in the course of Inter-state Trade. But the uniformity of rates is more apparent than real, for the rates differ according to the Sales Tax status of the dealers and upon the declaration forms obtained. So, the Central Sales Tax Act cannot be said to have completely eliminated rate differences which act as barriers to Inter-state Commerce. Indeed, other barriers to trade have been raised as a result of the reaction of the States to the Central Act. Thus, in Bombay, dealers are now unable to purchase goods free of General Sales Tax unless they intend to re-sell these in the State of Bombay. It is true that Sales Tax paid on purchases is refunded or set-off in the final assessment, but full set-off is only obtained if goods are sold in Bombay or in the course of Inter-state Trade. There is also a reduced refund in the case of consignment stock transfers outside Bombay, the net effect of which is to leave the dealer bearing a charge of 1% of the purchase price paid by him. As 1% tax on the selling price is normally higher than 1% on the purchase price dealers have an inducement to sell outside Bombay on consignment basis and, therefore, Inter-state Trade, as visualised by the Central Act, will decline. The Bombay Set-off Rules represent double and unwarranted taxation of Inter-state Trade and Commerce. b. Effects on Agriculture: Agriculture has been favoured by the Sales Tax legislation. Widespread exemptions on the grounds of essentiality, smallness of turnover, lack of money consideration and the desire to avoid rises in food prices have left agriculture comparatively unaffected except in Multi-point States like Madras. However, agricultural producers have not really suffered as the tax has been passed to the consumer. c. Effects on Small-Scale and Cottage Industries: With a view to encouraging the growth of small-scale and cottage industries, many Governments have exempted the sale of their products from Sales Tax, and the effect on these industries has been to give them a relative and substantial advantage over machine-made goods competing with them. d. Effects on Industry: Let us now consider the effects on costs in industry. Where the distribution channels for supplies of industrial raw materials have been long, raw material costs have been increased by as much as 10% in States imposing Multi-point Taxes. Some industries have, therefore, reacted by undertaking all the processes from the purchase of raw materials to the sale of the finished product. This has meant that industries supplying these firms have suffered a set-back. Moreover, some industrial States have levied taxes based on purchase of goods used in any manufacture in the State (Bihar). As a cumulative result of these taxes entering into the cost of production the cost structures have been indeed distorted and made very rigid. But raw materials are not the only items entering into cost. There are also Selective Taxes on electricity and on motor spirit. The tax on electricity is most unfortunate. It increases industrial costs. It is a tax on power to drive the industrial machine. It is, therefore, a tax on industrialization and keeps down the standard of living of the common man by denying him the fruits of technological progress. It is a tax on health and on mechanization. Similarly, the tax on motor spirit and on certain industrial oils is most undesirable as these fuels are the spear-heads of modern technological progress. It means the continuance of outmoded and obsolete methods of production and represents a drag on development of road transport. When you consider that more than two-thirds of all motor spirit is used for industrial purposes the seriousness of the effects on industrial costs can hardly be underestimated. Another aspect of increases in industrial costs deserves more than a passing mention. We all work so that we may enjoy the fruits of our labours and we all have a certain scale of preference between leisure and work. We all want a fair wage for a fair day's work. That is our birthright, and when it is denied to us we naturally fight for it. And so industrial labour, when it finds its standard of living reduced by Sales Taxes demands higher wages and we have a series of industrial disputes, which end in wage increases. As labour spends its increased wages, prices and the cost of living go up. This results in new demands for higher wages. Thus, Sales Tax on commodities which enter into the cost of living of industrial labour may touch off a wage-price inflationary spiral. In India, some States like Andhra and Madras have not appreciated the effects on industrial costs of Sales Tax and have imposed Sales Tax on items consumed by labour. Thus we find States taxing food products, clothing, etc., with a total disregard for the inflationary effects of their taxes. The Government has often talked of hanging on grimly to the hard core of the Plan. Has it occurred to them how difficult they are making it for themselves by raising industrial costs? How can targets under the Plan be achieved if money costs and money incomes keep on rising without a corresponding increase in productivity? e. Effects on Exports: Sales in the course of export are free from State Sales Taxes. But the definition of such a sale under the Central Act only makes the final sale, resulting in the actual export, free of tax. All sales prior to the final sale may be taxed. It is, therefore, probable that our competitive position in export markets has been undermined to some extent. At a time of foreign exchange shortage, such as we are experiencing today, it would be desirable to refund all Sales Tax borne by exports at any stage. Other countries like the U.K. experiencing foreign exchange difficulties give full remission of their Purchase Tax with a view to promoting exports. Apart from keeping our prices competitive, such a remission would make the export markets more attractive to manufacturers than the home market, and the country would benefit from higher foreign exchange earnings. **ADMINISTRATION OF SALES TAX** The burden of administration of Sales Tax falls on the State Governments. Even in the case of the Central Sales Tax, although it is levied by the Centre, its collection is entrusted to the appropriate State Governments who collect the Central Sales Tax on behalf of the Union. The machinery of assessment, collection and appeals has generally followed the lines of the Income-tax administration. How efficient is the Sales Tax administration? Considerable dissatisfaction with the administration of Sales Tax has been expressed amongst the business community. As the administration of the Act affects the interests of the community in general and of the dealers in particular, the dealers' complaints deserve close examination. Dealers have generally complained of the departmental delays arising from the cumbersome machinery of registration, licensing, assessment and appeal. It appears that this machinery has been built up against the background of suspicion with which the Sales Tax Authorities approach the inspection of the dealers' accounts. This suspicion results in the accounts being verified first by the Inspectors and then by the Sales Tax Officers themselves. Where accounts audited by Chartered Accountants are submitted, there should be no need for this long-winded double verification, but for some unknown reason Sales Tax consultants are not popular. Why should this be so? Do Sales Tax Inspectors know more about accounts than Chartered Accountants? Or are Chartered Accountants less skilled in detecting frauds? It is also a common complaint that Sales Tax Officers follow very closely departmental instructions and have no initiative. It would be advantageous if the Sales Tax Officers made more and proper use of the discretionary powers vested in them. Failure to exercise them and adherence too closely to procedure and departmental instructions have been the causes of unnecessary hardship to dealers who have been thus subjected to penalties even for inadvertent procedural omissions. Particularly unfortunate is the practice of imposing penalties when the recitals in the declaration form are not complied with due to unforeseen circumstances. The machinery of appeals has been instituted by the legislature to ensure that the assessee receives a fair deal. But it has been noticed that the Department is not very efficient or expeditious in the disposing of appeals. To keep the appeals pending is tantamount to denial of justice. As a great jurist has said, "Justice delayed is justice denied." It has also been alleged that the Administration is corrupt. I believe that our Sales Tax Administrators are men of integrity, but as there is no smoke without fire, the charges of corruption deserve to be investigated. Even the Taxation Inquiry Commission was not prepared to discount wholly these charges. It would appear that conditions in the Sales Tax Department do provide scope for corruption. The complicated rules and laws, the secrecy attached to departmental instructions and the elastic interpretation put on various terms leave room for questionable practices. Furthermore, the inspection of accounts is entrusted to the subordinate staff who are more likely to be amenable to material inducements. The departmental salaries also do not appear to bear a proper relation to the responsibilities shouldered by the officers. **SUGGESTIONS FOR IMPROVEMENT** In conclusion, it may fairly be said that Sales Tax as it has been operated in the country has retarded the pace of urbanization, has put a heavy burden on manufacturers and consumers, has seriously distorted the cost structures, has reduced the volume of trade and thereby the level of national income and employment. Last but not least it has stifled free enterprise, caused great hardship to the trading community, resulted in unwarranted interference with the rights of individuals through the inordinate growth of delegated legislation, has done incalculable harm to the small dealer and has denied justice and fair treatment to the man in the street. The recognition of some of the damage wrought by the Sales Tax laws has resulted in efforts to rationalise the Sales Tax laws. In the main, efforts have been directed in five directions. Firstly, schemes are being devised for introducing uniformity in taxation within each State. The Bombay Sales Tax Inquiry Committee is at present applying itself to that task. Secondly, tariff barriers on goods which are of special importance in Inter-state Commerce are sought to be eliminated vide Section 15 of the Central Sales Tax Act, 1956. Thirdly, a measure of uniformity has been sought to be introduced in the taxation of Inter-state sales. Fourthly, certain goods which were subject to Sales Tax have now been made subject to Central Excise. Lastly, Mr. B. R. Bhagat, the Union Deputy Finance Minister, announced in Parliament that efforts were being made to persuade State Governments to impose taxes at uniform rates on certain less essential goods sold inside the State. However, all suggestions for reform of the Sales Tax system seem to proceed on the assumption that it is essential to provide the States with a source of revenue. This assumption has wrought more mischief than any other factor. Unfortunately, our legislators and administrators have not been able to disabuse their minds of the conception that the purpose of taxation is to raise revenue and that the States must raise their own revenues. But the purpose of taxation is not merely to raise revenue for the State. Taxation is today used to promote public policy and to control the tempo of economic activity. The needs of the National Economy must dictate fiscal policy in regard to all taxes. The aim of an integrated tax structure would be defeated if the States of the Union followed divergent policies. Accordingly, it is my recommendation that  - sales tax should be made a Central subject by an amendment of the Constitution; - the tax structure should be simplified so that the man in the street and the trading community may be able to understand their obligations. It should minimise hardships and spread the burden of the tax equitably on all sections of the community; - the tax should be levied uniformly all over India. This will eliminate the necessity for a separate Inter-state Sales Tax, at the same time reducing considerably the hardships arising from the existence of different systems and the paper work associated with them; - the tax should be a single-point tax levied on the dealers only at the last point of sale to the consumers. This will enable the level of consumption in the economy to be controlled effectively and democratically by changes in Sales Tax rates; - the rates of tax should be governed by the needs of the economy but there should be no differences in rates in different parts of the country. Necessaries of life and exports should be totally exempt from tax and rates of tax on luxuries should be higher than those on semi-luxuries to make the tax progressive. - the States should be compensated for loss of revenue by grants in accordance with formulae which can be worked out by the Finance Commission. To make the Administration more efficient, I recommend that the salaries of Sales Tax Officers should be increased to make them more consistent with the wide powers wielded by these officers. Revision of salaries may be expected to eliminate any possible temptations to stray from the path of strict integrity. But revision of salaries will not by itself be sufficient. It is also essential that the Department and its Officers should be re-educated in their responsibilities. Further, Sales Tax Officers should be thoroughly trained and should be made to approach the assessee with an open mind. I also most strongly urge that the Department should insist on accounts and sales breakdowns being audited by Chartered Accountants. In this connection I point to the practice adopted by the Income-tax Department. Thirdly, the machinery of Administration should be streamlined so as to eliminate departmental delays. The appointment of a Public Relations Officer may help in this direction. If the above improvements in the Sales Tax are undertaken, they will place in the hands of the Government a most powerful weapon for controlling the economy in a democratic manner. Through the medium of Sales Tax the Government will be able to control the direction of resources without stifling private enterprise. It will mean more popularity for the Government, lower burdens on the consumer, and greater flexibility in the economy resulting in higher living standards and more production. It will create a climate of confidence in which free enterprise will be able to play a major role in promoting the welfare of the nation and will bring nearer the day when India's dream of an integrated tax structure will become a reality. --- ## [Musing] Kandukuri Veeresalingam: Icon of Andhra’s Renaissance URL: https://indianliberals.in/musings/kandukuri-veeresalingam-icon-of-andhras-renaissance/ ### Body _Sri Kandukuri Veeresalingam is considered the father of Renaissance in Andhra Pradesh. He was not only a literary figure but also a social reformer. He awakened the masses out of their medieval orthodox customs and superstitions.  He was a multifaceted personality whose literary and revolutionary activities left an indelible mark on Andhra society._ Rao Bahadur Kandukuri Veeresalingam Pantulu was born on 16 April 1848 at Rajahmundry, Andhra Pradesh. Veersalingam was born to an orthodox Brahmin family as the son of Subbarayudu and Poornamma. Unfortunately, he lost his father when he was just four years old. His paternal uncle raised him, and through his support, Veeresalingam studied in local schools. His zeal to learn earned him academic accolades at a young age.  With constant support from his mother and uncle, Veeresalingam finished his matriculation in 1869. He then worked as a schoolteacher in Korangi Village, Andhra Pradesh. Later, he got married to Rajyalakshmi.  Veeresalingam used literature as a tool to banish the darkness of superstition and social vices, and spread awareness. He adopted a simple, lucid, and straightforward style of writing. He was the first writer to pen a Telugu novel. In 1880, his novel titled “Rajasekhara Charitramu” was published.  Veeresalingam is also credited with introducing essays and autobiography into Telugu literature. His autobiography, “Sweeyacharitha,” was the first autobiography written in Telugu. He also composed several plays in Telugu. Through his plays, he addressed the social evils of his time.  In 1880, Veeresalingam wrote ‘Vyavahara Dharmabodhini’. This became the [first](https://www.thehindu.com/features/friday-review/theatre/Telugu-theatre-day-celebrated/article14691489.ece) staged Telugu drama. In the same year, he wrote ‘Bramha Vivaham’ which ridiculed the opposers of women’s education through satire. He also penned ‘Satyaraja Poorvadesayatralu’, a satirical piece on male dominance in society.  Hailing from a Brahmin family, Veeresalingam never hesitated to criticise the upper-class attitude of Brahmins in society. Some of his plays portrayed the attitude of Bramhin priests and Bramhins in power. Among his notable works are “Viveka Deepika” in 1880, “Prahlada” in 1885, “Satya Harischandra” in 1886, and “Tiryag- Vidvan Mahasabha” in 1889.   Veeresalingam translated several prominent works into Telugu. His valuable translations include primarily from Sanskrit and English. He enabled the typical Telugu reader to access prominent Sanskrit and English works through his translations.  Apart from being an exceptional writer, Veeresalingam was also a progressive social reformer. He was heavily influenced by the ideas and activities of  “Bramha Samaj”. He greatly respected thinkers such as Atmuri Lakshmi Narasimham, district munsif of Rajahmundry and a staunch critic of caste system, and Keshav Chandra Sen, philosopher and social reformer. He ardently supported women’s education. In 1874, Veeresalingam opened a girls school in Dhavaleshwaram. In 1884, he opened another girls school in Innisipeta, Rajahmundry. Besides supporting women’s education, he took time to educate his wife, Rajyalakshmi.  In 1876, Veeresalingam started a monthly magazine called “Vivekavardhini”. Through this magazine, he fearlessly exposed the corrupt practices of government officials. He wrote several articles on ‘the importance of women’s education ’ and ‘evils of child marriage’. In 1873, Veeresalingam penned “Stree Vidhya” a collection os poems. In stree Vidhya he maintains strong stance on women’s education.  Apart from these, he ardently criticised superstitious beliefs. He also launched “Sahithabodhini” to advocate for widow remarriage and women’s education.  Veeresalingam was heavily moved by societal norms and practices that denied women several opportunities. He was the torch bearer for the widow’s remarriage movement in Andhra Pradesh. In 1879, Veeresalingam delivered a speech on widow’s remarriage. This speech created a sensation throughout Andhra Pradesh. Many upper-caste members vehemently criticised him for his stance on widow’s remarriage.  In 1910, he published “Athibalya vivaham”, a commentary on child marriage. In that Veeresalingam writes _“These child marriages have been prevalent in our country for a very long time. But the question arises, what is the necessity of this practice in today's world? Why should young girls and boys be forced into a marriage at such a young age? The injustices related to marriage are not just limited to the poor, it's widespread. It's time to rethink and break this cycle._ _We should ensure that our children have a good education and lead a life full of happiness and fulfillment rather than being burdened with the responsibilities of marriage at such a tender age. We need to stop these injustices and stand up for what is right. It's high time that we put an end to child marriages, whether among the rich or the poor.” _ The plight of young widowed women influenced Veersealingam. He believed that young women can lead a joyful life after remarriage. Despite the strong opposition from orthodoxy, Veeresalingam conducted the first widow remarriage in Andhra Pradesh on December 11, 1881.  In India, this news quickly spread across different parts of the country, and many imminent social reformers appreciated his efforts.  In 1898, MG Ranade, in a meeting, acclaimed Veeresalingam as “Iswar Chandra Vidyasagar of South”. He went on to deliver several lectures on widow’s remarriage. He often cited Shlokas from ancient Hindu scriptures to educate people that Hindu dharma didn’t forbid widow’s remarriage.   Sri Kandukuri Veeresalingam Panthulu dedicated his whole life to eradicating the social injustice against women. As a literary icon, he fearlessly attacked the prevailing social evils through his plays, journals, and magazines. As a social reformer, he inspired people to think and act progressively. He laid the foundation of a modern Andhra society with the significant reforms he brought during his time.  References - [https://amritmahotsav.nic.in/district-reopsitory-detail.htm?3788](https://amritmahotsav.nic.in/district-reopsitory-detail.htm?3788) - [https://indianculture.gov.in/node/2833251](https://indianculture.gov.in/node/2833251) - Rani, S. (2012). Women’s worlds in the novels of Kandukuri and Gilman. _CLCWeb_,_14_(2). [https://doi.org/10.7771/1481-4374.1963](https://doi.org/10.7771/1481-4374.1963) - Uma, A., & Sridhar, M. (2021). Kandukuri Veeresalingam: Women’s Education [February 1875]. In _Routledge eBooks_ (pp. 28–34). [https://doi.org/10.4324/9781003224761-2](https://doi.org/10.4324/9781003224761-2) _Previous musing: [TWO STRANDS OF LIBERAL EXPRESSION : DR. ANANDIBAI JOSHI AND LAKSHMIBAI TILAK](https://indianliberals.in/content/two-strands-of-liberal-expression-dr-anandibai-joshi-and-lakshmibai-tilak/)_ [](https://indianliberals.in/wp-content/uploads/2023/08/IMG_20220724_121630_copy-removebg-preview.png) **Ch Prashanth** Prashanth is pursuing his Master's in International Relations and Politics at the Central University of Kerala. He likes to spend his weekdays at the library or gym. His weekends are spent in front of the television watching the Premier League. --- ## [Musing] Kanwal Rekhi on Liberalisation for the Sake of the Poor URL: https://indianliberals.in/musings/kanwal-rekhi-on-liberalisation-for-the-sake-of-the-poor/ ### Body Spontaneous Order presents “Spontaneous Musings”, a section for tid-bits that inspire discussion and debate. Economic Liberalisation in India, since 1991, has been by and large liberalisation of the elite, by the elite and for the elite. Taking good care of them, India has liberalised every sector to the limit that affects its elite- may it be the financial sector, the automobile sector, aviation, foreign exchange, or even overseas investments — the list goes on. However, the sectors that help the poor have yet to be liberalised in the same manner and efficiency. This barring of liberalising anything that directly affects the poor is ironically done under the banner of “protecting the poor”. Liberalisation of India’s labor laws, for example, would directly uplift the poor as it would enable labor intensive industries to absorb those employed in the unorganised sector. At present, only 10% of the indian workforce resides in the organised sector (with 90% employment in agriculture and 70% in non- agricultural economy falling under the unorganised sector) — a statistic that instinctively bears grim consequences for the country’s poor. India’s labor laws (most stringent in the world) have thus, choked off employment opportunities- by focusing more on preservation of jobs rather than its creation! India should be creating low-end labor intensive industries for its multitude of unskilled and semi-skilled population. Instead, it is creating a plethora of high-end service jobs. The way forward is to have a single item economic policy, with the sole focus of creating jobs. Labor policy, Tax policy, Land policy, FDI policy should only have one goal- does it create jobs in India? Everything else will take care of itself. _1) http://www.thehansindia.com/posts/index/Young-Hans/2017-07-14/An-analysis-on-the-role-of-Indias-informal-economy/312388_ --- ## [Musing] Khoj : January - February, 2008 URL: https://indianliberals.in/musings/khoj-january-february-2008/ ### Body Khoj : January - April, 2009 type=content&p=1612). Needs editorial review._ --- ## [Musing] Laying The Foundations For An Economic Miracle URL: https://indianliberals.in/musings/laying-the-foundations-for-an-economic-miracle/ ### Body _Published by the Forum of Free Enterprise, a non-political organization founded in 1956 by AD Shroff, the text titled “Union Budget 1993-94: Laying The Foundations For An Economic Miracle” was delivered as a speech by HP Ranina at a public meeting in Bombay on 1st March 1993._ _HP Ranina was a well-known tax expert and lawyer based in India. He founded H.P. Ranina & Co., a Mumbai-based law firm specializing in taxation and corporate law._ _Ranina was known for his extensive knowledge and expertise in tax law, and he was often sought after by businesses and individuals for his advice and guidance. He was also a prolific writer and speaker on tax-related topics, with articles and insights widely respected in the Indian business community._ _You can read the original, unabridged version _[_here_](https://indianliberals.in/forum-of-free-enterprise/the-union-budget-1993-94-laying-the-foundation-for-an-economic-miracle-by-HP-ranina-april-13-1993.pdf)_._ This year’s Budget will go down in the fiscal history of India as the one which will create the right environment for engineering an economic miracle that has, so far, eluded the country. India is indeed fortunate to have one of its most distinguished and internationally respected economists, Dr Manmohan Singh presents his third successive Budget within twenty months. Certainly, Dr Singh has performed a miraculous feat of cutting indirect taxes by Rs. 4,522 crores, increasing developmental plan expenditure, and at the same time, reducing the budgetary deficit to Rs. 4,314 crores, which is the lowest ever in the fiscal history of India. The greatest merit of the budget proposals is that the Finance Minister has, with single-minded devotion, attempted to revive the recession-ridden industrial sector. The cutting of excise and customs duties, resulting in a loss of revenue of almost Rs. 4,500 crores, will galvanize industry because the cut will enable industrial units to achieve two objectives: - Compensate them for the increase in costs; and - Pass on the part of the reliefs to the consumers, which would create a new wave of demand, reversing the recessionary trend. The government has put the economy in high gear and sought to achieve the following objectives after having gotten over the critical period of the last one and a half years successfully: - Globalization of the Indian economy by making the Indian industry truly competitive; - Strengthening the fundamentals of the corporate sector in India by reducing excise duties and customs duty across the board, reducing the interest rate, and making more credit available through a reduction in the CRR and SLR ratios on deposits with banks; - Creating an environment for a new consumer boom, which will also help the growing middle class; - Giving a boost to exports by removing the indirect tax imposed as a result of the dual exchange rate; exports slated to register a growth rate of 9% in dollar terms; - Infusing the right amount of funds in the rural and agricultural sectors would also increase the purchasing power in the hands of the rural masses, leading to greater demand for consumer durables. ...The Finance Minister has emphasized the development of the agricultural sector. The farm output will be at an all-time high of about 190 million tonnes. Coupled with this increase, the higher procurement prices will result in greater purchasing power in the hands of the rural masses. Thus, the demand-oriented boom will revive industrial fortunes and set the consumer goods industry on unprecedented growth. The consumer goods industry, which is labour intensive, will also generate greater employment opportunities, again generating more funds in the hands of the people to fulfil their need for consumer goods. The Indian agricultural sector will significantly benefit from the Government’s strategy of reducing the high levels of protection given to Indian industry. The more competitive exchange rate, which has been brought about, will also boost exports of agricultural commodities and agro-based products, again leading to greater resources in the hands of the rural masses... As enunciated by the Finance Minister in his first Budget introduced in July 1991, the new policy towards foreign investment has led to the globalization of the Indian economy. While our neighbouring country China attracts around US$ 40 billion of foreign investment annually, India’s record in this regard has been dismal over the past decade, as we have attracted no more than US$ 300 million annually. During 1992-93, about US$ 2.3 billion in investment proposals were approved, but the funds have yet to flow into the country. In this context, the announcement made by the Finance Minister in Paragraph 28 of his Budget Speech is indeed heartening. He has mentioned that the Government has signed the MIGA Convention, whereby investments made by foreign countries will be guaranteed so that foreign investors have the requisite security, especially regarding their repatriation rights. Once India becomes a member of the Multilateral Investment Guarantee Agency, separate bilateral investment treaties will be signed by India with several countries, including the United States of America, Germany, and the United Kingdom. This will ensure a substantial flow of investible resources into India, and by 1996-97, India should be assured of a flow of at least US$ 10 billion per annum. Foreign investment will, in its wake, bring about the upgradation of the technical base of India as well as new disciplines, apart from generating employment opportunities for the millions of unemployed and contributing an immense amount of revenue to the Exchequer. The Finance Minister has been wise enough to realize that industrial modernization, and especially the creation of internationally competitive industries, requires a massive expansion of and qualitative improvement in infrastructure. This is especially true of power generation, telecommunications, and roads. Traditionally, these areas have been the preserve of the public sector. Substantial expansion of public investment in these areas is undoubtedly necessary. However, the country's needs are far beyond the capacity of the public sector to deliver in a reasonable time frame. The Government has, therefore, adopted a policy of encouraging private sector involvement and participation in these areas to supplement the efforts made by the public sector. Changing these sectors' policies, procedures, and regulatory frameworks will be necessary to attract such investment... ...To sum up, the budget proposals for 1993-94 will put the economy on the fast lane to industrial recovery and growth. A new phase of consumer boom is on the anvil, leading to a demand-oriented recovery. Exports are also set to record an increase in Dollar terms which will improve the balance of payments situation and put the Indian economy in a better position to reduce its dependence on external borrowing. Undoubtedly, the last three Budgets of Dr Manmohan Singh have embarked on the exciting task of economic rejuvenation. Industrial and social development have been given top priority and have been put back on the national agenda. India should now play a significant role in the global economic scene. A vibrant and rapidly expanding economy is accelerating its pace to achieve a growth rate of 9% per annum beginning from 1995. This would ensure that the per capita national income will increase before this century is out from US$ 350 to well over US$ 1,000. A sizeable number of people will emerge from the grinding poverty they are in today. Then, the people will look back and consider the twenty-month tenure of Dr Manmohan Singh's Finance Ministership as constituting the turning point in India's economic history. _Previous musing: [The Liberal Budget](https://indianliberals.in/content/the-liberal-budget/)_ --- ## [Musing] Liberalism and Freedom URL: https://indianliberals.in/musings/liberalism-and-freedom/ ### Body This is an excerpt from the Liberal Times, a forum for liberal policy in South Asia, Volume III. In this excerpt, the editor refers to the principles embedded in the very philosophy of Liberalism, the bedrock of which is freedom. At the core of the concept of Liberalism lies the principle of freedom. Therefore, ‘ democracy, rule of law, market economy, free trade and pluralism are integral parts of Liberalism. This further implies ‘that values like tolerance, self-reliance, freedom of expression and attitudes like critical assessment, openness, dialogic and dissent, truthfulness and fairness also inherent in this concept. The essence of liberal belief was in fact defined in 1776 in the Virginia Declaration of Rights which formed a model for the Bill of Rights added to the U. S. Constitution 15 years later. It declared that “all men are by nature equally free and independent and have certain inherent rights” of which they cannot deprive themselves or their posterity. These were “the enjoyment of life and Liberty, with the means of acquiring and possessing property, and pursuing and obtaining happiness and safety.” _Access the full document [here](http://v2.indianliberals.in/~_admin/pdflanguage?id=477849139.pdf)._ _This article is from the Liberal Times, Volume III- Number 4, published in 1995._ [Read More SO Musings](https://spontaneousorder.in/?s=SO+Musings) --- ## [Musing] We Wish You A Happy New Year! URL: https://indianliberals.in/musings/libertarian-happy-new-year/ ### Body Libertarianism, with its limited government, sets a limit, both on the actions of the individual as well as the State. Liberty of one must not encroach on the like liberty of his fellow-being. Citizens of a State under libertarianism have full right to do as they please so long as they do not infringe on the like rights of their fellow-beings. Under libertarianism, the State is not allowed to become the industrialist, the trader, the transporter, the educationist, the ethical preacher, the "do-gooder". _The following article, published in the January 1958 issue of the Indian Libertarian by Kusum R Lotwalla highlights the basic tenants of libertarianism and highlights the fact that the fight for freedom is not a lost cause. Her words hold as true today as they were then. Around the world, and in India, people today are taking to the street to defend the freedoms our forefathers fought for. Just like Ms Lotwalla, we at Spontaneous Order also pledge to “fight against all the old and present-day socio-political clichés that thwart human progress, explore new roads to human happiness, along the libertarian paths, while examining anew old traditions and institutions, drawing from them all which human experience has proved valid and sound. That is our creed and our belief.”_ Time marches on and one more year–1957–has gone into the limbo of oblivion. We face the new year–1958–with hopes and aspirations for better times and a world free from the tensions of hot wars or cold wars. the rivalry between the rival Power blocs on the international plane, the end of internal tensions between “haves” and the “have-nots,” the exploited and the exploiters, the workers and the employers, between class and class and nation and nation. To the eternal rivalry between the Power blocs is added the enormous destructive potential of the nuclear weapons and the atomic developments. Humanity is threatened with total annihilation. Underlying all these conflicts are institutions that breed exploitation, inequality and oppression. These old, archaic and anti-diluvian institutions have to be replaced by a society based on Libertarian principles, which proclaim “equal freedom for ALL in a Free Society.” The libertarians have no cut and dried Plan or a blueprint. Without trying to put forth a so-called Code of Conduct to be strictly adhered to, we can indicate the general lines along which a solution for these problems could he found. The exploitative societies of today be replaced by a new Libertarian world, free from oppression and exploitation. Freedom without equal opportunities leads to privilege and injustice. Freedom without political liberty leads to totalitarianism. The monopoly of power which is the State must be replaced by a federation of free communities, labour councils and cooperatives operating according to the principles of free agreement, healthy competition and co-operation. Centralism, totalitarianism or Marxism means regimentation from the top down. This must be replaced by federalism which means cooperation from the bottom up. **What is libertarianism** In a word, the world must switch back once more to Libertarianism. Libertarianism, as described by Webster’s dictionary, means, “One who holds to the principle of free will; also one who upholds the principles of liberty, especially individual liberty of thought and action.” Politically it means strong opposition to the authoritarianism of all kinds. whether of the Right or of the Left. It is opposed, therefore, to all forms of regimentation and totalitarianism which absorb the whole field of private relations and individual life into the sphere of Government action. It is opposed to all the so-called welfare plans. It stands for limited Government. Government, according to the philosophy we stand for should confine itself to Defence, Justice and the Rule of Law as against “welfarism” or regimentation. The Libertarians oppose that the Government is above the law, whether in the name of Government, administration or the State. Thus, we run counter to the present-day fashionable slogans of socialism, communism, and even Planned Economy. The Libertarians believe that the human collective has no being and consciousness of its own, to override the rights and happiness of the individual citizen. The State has evolved into being, in the course of human history, to defend society against external aggression and to enforce justice between man and man. Beyond it the State should not go and if it does that, it encroaches on the inalienable rights of the individual. In the limited government the right entrusted to the State to enforce justice between man and man, and to defend against aggression, through organised Army and the Police, is to be used strictly according to law and in conformity with the rights of the individual. The libertarians are not concerned with the metaphysical discussion as to the ultimate nature of the human being, whether it is a soul, a spirit or only organic nature with an emergent consciousness. In any case, it is clear that the human being needs liberty of action to realize its full consciousness, and blossom forth to the full height of his stature. Liberty of action is part of his being, and without this liberty of action, he is reduced to a robot or a mere tool in the gigantic machinery of a totalitarian State. Freedom to choose his calling or trade, his hobbies and his pursuits, is an integral part of human nature. If these rights are denied to the individual, as it always happens under totalitarianism. such as earning a livelihood of his choice, associating with men of like mentality for the enjoyment of art, science and fellowship, the life of an individual is reduced to dead routine. without purpose and without any future. **Libertarianism doesn’t mean licence** Libertarianism does not mean licence or anarchy. Libertarianism, with its limited government, sets a limit, both on the actions of the individual as well as the State. Liberty of one must not encroach on the like liberty of his fellow-being. Citizens of a State under libertarianism have full right to do as they please so long as they do not infringe on the like rights of their fellow-beings. Under libertarianism, the State is not allowed to become the industrialist, the trader, the transporter, the educationist, the ethical preacher, the “do-gooder”. The practice of all “Welfare” States in taking upon themselves these duties invariably lead to corruption and an irresponsible and unremovable bureaucracy. As obligations of the State increase under totalitarianism, the taxes rise to ever-increasing spiral, until all incentive to production diminishes and production takes a downward trend. Added to these on the economic plane, the political trends of socialism and communism are ultimately destructive of democracy and democratic institutions. Since the Government of India embarked on their Planned economy all these evil trends are seen in the country. It is, therefore, all the more necessary for the intelligent section of the Indian public to clearly understand what is meant by “socialist pattern of society” and what is connoted by socialism or planned economy. It is here that the Libertarian philosophy shows the way out. It may appear to the superficially-minded person that we are championing a “lost cause”. It is not so, the more so when one knows how the British Socialist Party found itself against a dead wall in its crazy pursuit of socialism, and it had to be ousted. This has led to real re-thinking amongst the “brain-trust” of the British Socialist Party. The same thing is happening in the Iron Curtain countries, the hesitant policy of de-Stalinisation in Moscow, the Gomulka programme in Poland, and lastly the Hungarian revolt against communism and planned economy-all these events show that we, the Indian Libertarians, ARE CHAMPIONING A LIVE CAUSE. Man cannot be long deprived of his inherent right of Liberty and Freedom. On this New Year Day, the Indian Libertarian pledges itself to go ahead with its propaganda and education, strong in the belief that in the ultimate end it is bound to succeed to the glory of India and of Humanity. The Libertarian Social Institute, Bombay, with its branches at Bangalore, Baroda, Nagpur, Patna and Madras is keeping aloft the torch of Libertarianism in the country. By our consistent propaganda and education, we shall fight against all the old and present-day socio-political clichés that thwart human progress, explore new roads to human happiness, along the libertarian paths, while examining anew old traditions and institutions, drawing from them all which human experience has proved valid and sound. That is our creed and our belief. Here’s wishing all our readers a Happy and Prosperous New Year and the best of life’s good things. _The original document can be accessed _[_here_](http://indianliberals.in/~_admin/pdflanguage?id=928760873.pdf)_._ [_IndianLiberals.in_](http://indianliberals.in/)_ is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context._ [_Read More SO Musings_](https://spontaneousorder.in/?s=SO+Musings) --- ## [Musing] The Mission of Libertarianism URL: https://indianliberals.in/musings/libertarian-mission/ ### Body Libertarians call for a greater simplification of institutions, a reform in the use of property and a return to the limited role of the State in social life so that the submerged individual may be released for a new career of purposeful, healthy activity in which science and the other achievements of the modern spirit may be used more wholesomely to help men and women to fulfil themselves in pursuits within their reach and power of assimilation. _The following article, written by M A Venkata Rao first appeared in the [October 1958 issue](http://indianliberals.in/~_admin/pdflanguage?id=877412702.pdf) of [The Indian Libertarian](http://indianliberals.in/periodicals-details?id=28)magazine._ In Europe and America, a branch of the Enlightenment school of thought that prepared for and preceded the French Revolution developed a strand of socialism. While the central stream of inspiration released by the Revolution guided thought and reconstruction into channels of national democracy under the lead of the new commercial and industrial classes (whom Karl Marx called the bourgeoisie) side streams of what may be roughly called “socialist thought” sprung up seeking to mould social institutions including property and State on equality and fraternity rather than on liberty. The liberal democratic State evolved all over the continent and in North America on the basis of individualism which in the realm of economics assumed the shape of capitalism. The leaders of the French Revolution and of the subsequent democratic evolution in England and other States evolved a philosophy of individualism stressing the key role of free economy or freedom of enterprise as the pivot of progress. Socialist thinkers like Proudhon, Fourier and Saint Simon were not satisfied with the early decades of the working of capitalism in the Napoleonic era and the Restoration of the Bourbons. They saw clearly that the ideals of equality and fraternity that imparted such a glow to the revolutionaries as if they were the creators of a new dawn of perfection were jettisoned by the bourgeoisie. The new enterprise and wealth joined hands with empire and were concentrated in the hands of the new rich, a small section of the nation. The bulk of the masses remained poor and were exploited by the bourgeoisie almost as much as the aristocracy oppressed the peasants in their ancestral estates. In England too discontent at the new exploitation of the bourgeoisie strengthened and expressed itself in a number of movements of which the Chartist struggle was the chief. Factory Acts and the First Reform Act of 1832 were the first symptoms of the new social conscience. The new world of commerce and industry of the Industrial Revolution came to be defended by liberal democratic thought of which Bentham, James Mill and his more famous son John Stuart Mill were the principal protagonists. Their work in economic, legal and political thought guided the development of democratic institutions and civil rights throughout the nineteenth century. But towards the end of it, new streams of thought came to be felt making for socialism and collectivism. One was the idealism of T. H. Green and Bernard Bosanquet, which gave a new ethical basis to the State and coalesced in its effect with socialism. Fabianism assumed greater importance as the source of reform and welfare as the century turned the corner and the Labour Party adopted it as the sheet-anchor of their policy. Thus British thought sublimated the hate-filled class-war doctrine of violent revolution sponsored by Karl Marx into its own characteristic evolutionary, non-violent, parliamentary way of introducing socialism or collectivism. Today it has become the official philosophy of the Labour Party and the climate of thought generally among the intelligentsia of all parties. On the continent, the early part of the century began with the dominance of the Positivism and Religion of Humanity of August Comte. His scientific humanitarianism coloured the intellectual landscape in France and was reinforced with the integral or communitarian forms of socialism sponsored by Proudhon, Saint Simon and Fourier. These thinkers tried to cure property of its individualism or selfishness by suggesting methods of sharing it in communes or phalansteries of various kinds. They opposed also the centralising bureaucratism of the expanding State. A sideline of thought adopted forms of anarchism in trying to resist the crushing power of the Omni-competent State. Prince Kropotkin and Bakunin became the principal representatives of this anarcho-communist trend of thought. But the most successful of these trends was that represented by Karl Marx, partly because he founded the International Working Men’s Movement which acquired influence from the middle of the century and ultimately became the dominant form of socialism. It has been the misfortune of humanity that it was the violent, class-war doctrines of Karl Marx that got crystallised as the authentic form of socialism and the sole scientific system and saviour of labour throughout the world. The adherence of Lenin and the Russian revolutionaries and that of the German social democrats under Lassalle contributed to enthrone Marxist communism in this dominant position. The Russian Revolution of 1917 and its triumphant career to its present position of World Power challenging the whole free world has added hypnotic power to this collectivist, conspiratorial, violent form of communism. Communism has today become the climate of thought in most countries. Even where a small part of the intelligentsia is free from the prevailing views, they are influenced all the same to a more or less extent, so that the cause of freedom is put on its defence. It is not State aggrandisement that has to explain and justify itself but on the other hand the claim of human liberty and individuality! The capitalist Robert Owen fell in with the French socialists and initiated worker’s communes or settlements in England, Scotland and even the United States in the early decades of the last century. An American thinker called Josiah Warren joined Owen’s socialistic settlement and was inspired to start his own village settlements on a more individualist basis. He developed a time and labour theory of value in his own way. In Karl Marx’s hands, the theory was distorted to become the surplus theory of value in order to support the thesis that all capital is robbery of the value created by labour. In Warren’s hands, it became the foundation of a new equalitarian individualism which asserted the right of each individual to the proceeds of his labour as measured by the time taken in producing the product of industry. Measurement of labour contributions became a subtle and vexatious calculation and source of trouble among members of settlements. His example inspired a line of thinkers to reflect on the social aspects of individual liberty. Stephen Pearl Andrews developed the outlines of a science of society. Others developed the aspects of cooperation and mutual aid in banking and other forms of economic production and exchange. Others specialised in problems of currency and inflation. Others investigated the effects of State interference in banking, currency and economy generally. These thinkers of the libertarian school in America developed reflection both into the role of property, its meaning, function and limitations and into the role of the State in social affairs and individual life. The general line of thought in regard to both aspects was to discover the degree of waste and frustration and complication involved in anti-social uses of property such as are indulged in by monopolies and cartels by the State outrunning its legitimate field of police and justice and by welfare policies of robbing Ram to pay Kishen. These excesses of the individual and the State lead to ever-rising costs of production, to excessive pressure of economic groups on the State to get something for nothing, to rising inflation and confusion of values all round and to the collapse of confidence in currency and economic production generally and to the emergence of unnecessary economic crises with over-or under-production and unemployment. The remedy is to return to individualist economy regulated by provisions against monopolies to safeguard the equal liberty of all. This principle of the equal liberty of all for engaging in free enterprise within the law (to exclude fraud and the annexation of unearned profits) is sufficient, say the libertarians, to justify the imposition of checks on those who take undue advantage of the freedom granted. If these principles are intelligently followed, it is urged, the State and society will be freed from the excessive burdens from which they are suffering at present under the influence of collective ideas. They will be free from much of the present load of public debt. The State will be compelled by individualist citizens to live within its means and not to create artificial money by issue of loans and not to burden the present generation by ever-rising loads of interest on public debt. Though the principal is supposed to be paid by future generations, as a matter of fact, it is the present generation that has to pay heavy interest. These interest payments to one class of citizens namely bond-holders will distort the economy by conferring on them more purchasing power than on the rest of the community. This distorts the economy in favour of unearned incomes annexing too much of the capital resources of the community towards the satisfaction of a few, leaving the demands of the vast majority starved and unfulfilled or under-fulfilled. The central stream of thought in advanced democratic countries like the USA is that of liberal democracy formulated in the early and middle periods of the nineteenth century. Today technological industry, the growth of population and the advance of communication media-radio, newspapers, wireless, aeroplane for passenger and goods traffic etc. have all conspired to confer more and more powers on the State to regulate the myriads of new inter-relations among citizens. Organisation has tended to become ever more complex and interwoven. Hence the feeling of inevitability in regard to the growing tendency towards collectivism and the expansion of State power. Collectivism has become the _illusion of the epoch_ today in which the rights and duties of the individual citizen as a self-determining and self-realising person are lost to view. Individuals and small groups feel lost in the vast agglomerations of large nation-States. Even small States feel a prey to massive influences and pressures impinging into their life from outside. The wheel has come full circle. The individualist philosophy of John Stuart Mill and his followers which guided liberal democracy is today eclipsed by the communist collectivism of Karl Marx, particularly in respect of economy. Adam Smith and Mill are both put into the shade. They have become “Gods that failed”. But today doubts and misgivings are being felt in many quarters that we have embraced a remedy worse than the disease. After all, the only known reality in human life is the individual centre of experience, of thought, feeling, action and fellowship-individual men and women. Sociologists are formulating theories of the right relationship between primary and secondary groups. The former like the home, neighbourhood and religious or educational fellowship are primary in moulding human life. They deal with individuals as full rounded persons and not as fragments-hands or members or customers or wage earners or employers or officers or rank and file anonymous common men. Secondary associations like occupations, amusements or casual groups as in hotels and railway carriages are necessary but if they crowd out much of the scene and activity of life, man is atomised and impoverished. Neuroses come to prevail. Suicides, mental aberrations, juvenile delinquents, divorce proceedings, prostitution, gambling, alcoholism, corruption in economic and political life-will all make themselves felt in disturbing degrees. Libertarians call for a greater simplification of institutions, a reform in the use of property and a return to the limited role of the State in social life so that the submerged individual may be released for a new career of purposeful, healthy activity in which science and the other achievements of the modern spirit may be used more wholesomely to help men and women to fulfil themselves in pursuits within their reach and power of assimilation. The libertarians call for a new relationship to land, so that unearned income may not accumulate in hands that do not contribute to production. Since land is limited unlike other forms of industrial or commercial property, it needs to be kept in the hands of people who actually use it for production, eliminating functionless or parasitic holders. The libertarians are also interested in education. They are exploring the avenues whereby the individual may be led through self-directed thought and investigation to discover the right relations between individual and society. The new aim is to strengthen dispositions of cooperation and individual self-reliance during the process of learning. It is also necessary to destroy the roots of class antagonism by imparting the joys and skills of using tools so that the ancient class distinction of workers and lords may disappear in the minds of men and women. Work and culture should be integrated. Freedom in economic and political life has to be supported by a new psychology of cooperative and creative living. fostered in creative education inspired by a vision of human unity and human progress in free and joyous fellowship. If a gradually increasing _elite_ imbued with these ideals could be developed through discussion, propaganda and group life, the collectivist _illusion of the epoch_ could be made to melt and a better day of happy, free, cooperative humanity can be ushered in by and by. This is the aim of the Libertarian Social Institute. _The original document can be accessed [here](http://indianliberals.in/~_admin/pdflanguage?id=877412702.pdf)._ _[IndianLiberals.in](http://indianliberals.in/index)is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context._ [Read More SO Musings](https://spontaneousorder.in/?s=SO+Musings) --- ## [Musing] Limits and Limitations of State Trading URL: https://indianliberals.in/musings/limits-and-limitations-of-state-trading/ ### Body _The Forum of Free Enterprise organised a Convention on State Trading in Bombay on April 28, 1958, attended by: Mr N Dandeker, I.C.S. (Retd.); Mr S C Bose, President of Utkal Mining and Industrial Association, Calcutta; Mr Murarji J Vaidya, former President of the Indian Merchants' Chamber, and Mr D B Futnani, President of Iron, Steel and Hardware Merchants' Chamber of India._ _Following is the speech delivered by Mr N Dandekar, also a Member of Parliament, Lok Sabha (Jamnagar) 1967, called “The Limits and Limitations of State Trading.”_ _You can read the complete unabridged version here: [State Trading](https://indianliberals.in/wp-content/uploads/2023/06/State-Trading.pdf)_ I wish to confine myself to some general observations concerning the grounds on which I think rigorous limits ought to be set to Trading by the State and also as to the limitations to which State Trading is necessarily subject. Now, quite frankly, when it comes to the first question, namely, what precisely should be the limit, in general terms, beyond which State Trading is not justifiable at all, and within which alone it can have some justification, the answer to a question of that kind depends entirely upon one’s own political philosophy. The political society that we have adopted for ourselves–quite irrespective of the political policy announced by the ruling party, whether it is a socialistic pattern, communistic pattern or any other pattern–is to be found in the Constitution. There it will be seen that we have adopted in this country a democratic Constitution grounded on two very important foundations–a series of fundamental rights and a series of personal or individual liberties. This is the context within which we have all to work, including the State itself. The State is not entitled to disregard this context because that is the context within which both the state (the Central and State Governments) as well as individuals and corporations-every one of us in this country–in fact, have to work. For it is our “organic law”, that is to say, the basis on which we are required to work and within the limits of which we have to work. Therefore the first proposition that I make as to the limit of State activity is that it must be such as in no way encroaching upon the fundamental rights or individual liberties because the moment it does so, it destroys the very foundation of our Constitution. Until the country changes that Constitution, nevermind what particular policy the ruling party may follow; for instance, the Communist party has got its own political policy and so have several other parties–that democratic Constitution which has given us certain fundamental rights and certain individual liberties, the preservation of that ‘Constitution sets a definite limit on any State activity. I deliberately refer to “State activity” in general terms because any activity of the State, and in particular State Trading, must be considered from that standpoint. Actually; State Trading is one of those activities which is the most dangerous because it has no clear-cut boundaries, as is the case with state activity in Industry, such as Steel projects or Hydroelectric projects. State Trading can be anything from international trading restricted to teh Iron Curtain countries to a very wide range of international and internal trading; it can embrace the holding of stocks, the financing of international trade, the owning and chartering of ships etc. It can thus go so very deep into the economic fabric of the country that it becomes a matter of the utmost importance to be clear in our minds as to what is the limit within which alone the State shall function in this field and beyond which State Trading may not go. ‘Has the State laid down any general proposition or test to limit its activities in matters of that kind? What is the specific test that one should apply when the proposition is “Shall the State trade in commodities X or engage in a particular field of trading Y?” In other words, by what test should be we satisfied before we admit the validity of State Trading so that if it does not satisfy those criteria, it can be said to have overstepped the poor limit? It is a difficult problem, but not too difficult. In any case, an attempt to define the limit is very necessary and must be made. In my view, the test can be formulated in the form of a statement in two propositions. In the first place, any new State activity in the economic field, irrespective of what it is–any activity of a kind that has not been previously undertaken by the State and which encroaches upon the domain of individual rights and liberties–must be _demonstrably necessary_ for the public interests. Secondly–and this is just as important as the first because there is a lot of hot air talked over what is in the public interest, the specific characteristic with reference to which one can test the validity of any given State activity is whether the desired purpose is not capable of being achieved equally well, if the activity in question were left to ordinary individuals, i.e., to free enterprise, or whether it is essential that the State must step in. In other words, if it is a question of State trading in general, or shall we say the merits or demerits of State trading in specific things like cement, textiles, chemical manure etc., the primary question would be: is it _demonstrably necessary _in the public interest? Is it, moreover, in the public interest that the State _and nobody else_ should trade in any given commodity? Because that is one of the inevitable corollaries of State Trading. It is not merely a question of State Trading but of _exclusive_ State Trading. The first question, therefore, is: is it demonstrably necessary in the public interest that the State and nobody else should undertake that trade? Or be allowed to undertake that trade? Can the desired objectives, which are to be achieved in the best public interests by State Trading, not be achieved in the best public interests by State Trading not be achieved equally well in the field of free enterprise by the ordinary men and private corporations? To put it more specifically, cannot the desired objectives be achieved by the regulated operation of free enterprise of free men indulging in those trades? If the answers to those questions are unequivocally and fundamentally in favour of the State, then alone would the State be within proper limits in indulging in a particular trade; but not otherwise. Now if you look at some of the things that the State Trading Corporation has been trading in–from these angles–was it demonstrably in the public interests that it should have done so? Was it demonstrably in the public interest that it alone should be engaged in those trades and no one else? Was it demonstrably in the public interest that others should have been excluded? Was it demonstrably established that the desired objectives could not have been attained through all the other persons previously engaged in these trades, that is to say, by ordinary Free Enterprise, you and I, all of us engaged in the trade and commerce in the country? When we put it that way, we begin to get somewhat startling answers; we begin to get a more clear-cut idea as to the limit beyond which State Trading cannot be allowed to go, except at the cost of our own fundamental rights and liberties and without thereby achieving any major over-riding public objective. Now let us turn to the question of the _limitations_ inherent in State Trade Trading, as distinct from the _limits_ within which alone it should function. Of course, in general, the limitations from which State Trading cannot escape will be more or less the same as those which we encounter in any other field of State activity, e.g., in industry or public utility. In other words, there are certain inherent limitations in State activity in the economic field from which State Trading also necessarily suffers. Assuming, for example, that within given limits, State Trading, whether in iron and steel or manganese with, for instance, the Iron Curtain countries, might be considered to the benefit of the country and that such trade should be undertaken by the State–even in an admitted case of that kind, State activity has very definite limitations. The first of these is the lack of autonomy from which these Public Corporations suffer. This may be inevitable, and I don’t want to join the issue over it here. But the fact remains that there is factually and inevitably almost complete absence of autonomy. What is the result? Let us not talk here vaguely in terms of public services being inefficient and incompetent; they are actually very much the opposite. What happens in the absence of autonomy is that you begin to get backdoor avenues for the impact of political parties upon things with which they are not concerned. Also, backdoor avenues for doubtful interests to exercise an influence which they ought not to have–not in that particular way and at the public expense. So the first limitation of State enterprise, the absence of autonomy, is rightly or wrongly a fact. Being a  very serious limitation, it leads us quite properly to the proposition: State activity in this field should be limited to the barest necessities of the case and should not go beyond it. Another serious limitation, specifically in relation to State Trading, is the unfortunate fact that the moment State Trading goes beyond the limit that I indicated earlier, as is the case when it embraces internal trade in cement, trading in iron and steel, trade with America in Manganese, the trade in boots and shoes and so on–the moment the State Trading Corporation extends its activities in that way, you get not only misuse but also abuse of the power vested in the Government servants or in the same persons acting in another capacity. Controls over imports and exports, the grant or refusal of licenses–these can be manipulated in numerous ways to suit the State Trading Corporation. They can manipulate transport priorities in collaboration with another wing of the Government to suit the requirements of the State Trading Corporation at the expense of some other person engaged in the same trade. They can create not merely a monopoly in a commodity but also a monopoly in the procedures upon which the success in trade often depends. Why should public servants have powers of that kind to abuse in the field of trading? But such abuse and misuse of power are unavoidable and inevitable. When you get concentration in the hands of officers of the State Trading Corporation of the bulk of the trade in various commodities, internally or externally, and those same officers, and their colleagues in charge of other departments of Government, have also at their disposal the power to grant or withhold licenses, transport priorities and numerous other items of discretionary patronage of that kind, there is bound to be a misuse of not abuse of these powers.  Then there is another thing. I won’t call it misuse. That would be characterising as bad something which is essential. After all, if the State has got to trade, the trading organisation has got to have finance. But I don’t know whether many of you have had a look at the State Trading Corporation’s Report. There is almost _unlimited finance_ placed at its disposal. The effect of this on trading by other people is immense. Such huge and unlimited resources are not available to any other private person or trading corporation. It enables the State Trading Corporation to advance money here, to give credit there and do all kinds of transactions of a colour, magnitude and character which enable it, in fact, to acquire a _de facto_ financial monopoly over the situation and which, in turn, renders it impossible for any ordinary man or private corporation or for the ordinary importer or exporter, to compete. If one takes into account these inherent limitations, which count for abuse or misuse of power, it becomes a matter of the utmost urgency that any proposal for State Trading must be scrupulously scrutinised and rigorously limited to the very barest essential purpose. Otherwise, what usually happens is that whenever the occasion arises, whatever argument that suits the occasion _ex post facto_ is pressed into service to justify the results of State Trading. If the STC makes profits, State Trading is justified on the ground that it makes good money for the State. If it does not make money but incurs losses, the State Trading is justified on the ground that it was in the “public interest” _not_ to have made money in that particular trade or a particular commodity. If it makes too much money, as the State Trading Corporation did in cement, the charge of immoral profiteering is brushed aside on ‘the ground that it was, after all, the _State_ which earned the profits, even though admittedly it would have been highly immoral if any individual or private corporation made that money. Altogether, we get a whole lot of hotchpotch, contradictory and conflicting explanations which merely suit the occasion and draw upon a whole stock of doctrinaire arguments, or commercial considerations, or non-commercial considerations, whichever may for the time being suit the occasion, to justify the results of State trade _ex post facto_. This leaves the field wide open for the Government to do (through the STC) in an uncontrolled way whatever they wish. My submission is, therefore, that this tremendous increase in the State’s activities in the field of Trading is far worse than any specific State activity, for instance, the steel plants. You and I may disagree on whether it shouldn’t have been just one steel plant or two instead of three. But most of us will agree there was an urgent need for one or two more steel plants in the country of the highest public interest. Most of us will also agree that it was not within the capacity of free enterprise to increase the steel output of the country by anything like the figure contemplated. I do not say that the need was for an increase of five million tons or four or 3 1/2 million, but something of that order of magnitude was certainly required. In a specific case of that kind, therefore, it is comparatively easy to come to agreed conclusions. But when you come to State Trading, I must emphasise, over-emphasise and reemphasise, firstly, that the fundamental limits to State Trading must be set by things that are fundamental and guaranteed in our Constitution; and secondly, that State Trading, even when permissible within those limits, must be rigidly circumscribed. Otherwise, the limitations inherent in this field of State activity are so injurious that State Trading is most likely to get completely out of hand. _Previous musing: [Swatantra Party: 64th Foundation Year](https://indianliberals.in/content/swatantra-party-foundation-year/)_ --- ## [Musing] Lokmanya Tilak : A Conservative Liberal? URL: https://indianliberals.in/musings/lokmanya-tilak-a-conservative-liberal/ ### Body _Bal Gangadhar Tilak was well known as an extremist and revolutionary. By limiting him to these terms, historians misjudged him with a bias towards Anglo-saxan supremacy and left different facets of Tilak unexplored._ Bal Gangadhar Tilak, popularly known as Lokmanya Tilak has been referred to as ‘the father of Indian unrest’. He has often been interpreted and largely misinterpreted as a revolutionary, an extremist, and a nationalist leader who supported the use of violence. Historians, both British and Indian have classified Indian leaders into water-tight compartments of “liberal” and “conservative” (implying orthodox); it is no surprise then that Tilak has been forced into the box of conservatism. It is imperative to understand the reasons behind this misinterpretation of Tilak - what A.B Shah terms as ‘miscarriage of historical scholarship’[1]. According to Shah, while studying Tilak and his ideas, Indian historians have judged Tilak entirely according to the norms of the Gandhian age. Their scholarship fails to recognise that M.K Gandhi’s ideas were a product of the dialectic between the previous generation of Indian leaders like Tilak, Gokhale, Bipin Chandra Pal, Sir Rashbehari Ghosh among many others. Secondly, Indian historians have favoured British sources over vernacular Indian sources. It is implicit that the sources of an imperial government, of racist writers and journalists, cannot do much justice to Tilak[2]. Indian scholarship has comfortably relied on writers like Valentine Chirol who were instructed by their belief in the white man’s burden and in Anglo-Saxon supremacy. The introduction to Chirol’s book written by Sir Alfred C. Lyall reveals the larger attitudes held by such writers. Lyall writes, “Chirol’s whole narrative illustrates the perils that beset a government which finds its own principles perverted against its efforts, and its foremost opponents among the class that has been the first to profit” (Lyall, 1910, viii). It is interesting to note that the repressive measures of the imperial government have been touted as liberal principles and the opposition to such repression has been criticised. The idea of European supremacy is voiced unambiguously as Lyall writes, “In India, the eighteenth century was a period of abnormal and extensive political confusion. In Europe, on the other hand, national wealth, scientific discoveries, the arts of war and peace, had made extraordinary progress” (Lyall, 1910, ix). While commenting on the possibility of democracy in India, Chirol states unequivocally, “There was and is no room for Parliament in India, because, so long as British rule remains a reality, the Government of India, as Lord Morley has plainly stated, must be an autocracy - benevolent and full of sympathy with Indian ideas, but still an autocracy” (Chirol, 1910, 154). How a “benevolent” autocracy is compatible with the liberal British political system must be best known to Valentine Chirol. The ideas of leaders like Tilak come to be distorted when seen through the lens of writers like Chirol.  The purpose of this article is to bring to light the liberal nuances of Tilak’s ideas which challenge the labels attributed to him. The Age of Consent controversy of 1891 is routinely used to paint Tilak as a parochial traditionalist. However, a closer look at Tilak’s position reveals that Tilak was not opposed to increasing the age of consent from 10 to 12 years of age for girls. Tilak’s opposition was not against social reform but against state intervention. Tilak believed that an alien government, the state, had no right to meddle in the affairs of a community, however beneficial the meddling may be. He reiterated the liberal principle that law must be derived from the practices, beliefs and traditions of the community; he suggested that the public opinion had to be shaped before enacting laws. What is often missed is that Tilak got his daughters Krushnabai, Durgamai, and Mathutai married only after they turned 12 years of age. While Tilak opposed the Age of Consent Bill, he believed in increasing the age of consent for girls, and he practised what he believed in. In contradiction to Tilak’s attitude of practising what he preached, several reformers within the Bombay presidency failed to practise what they preached. In October 1890, Tilak proposed a convention before the reformers who had gathered for a meeting. The convention stated that the reformers would not get their daughters married before they turned 12 years of age and that reformer men above the age of 40 would only marry widows. The convention also stated that those reformers who were found to violate these clauses would be fined. It is interesting to note that only Tilak, Agarkar, Bhandarkar and a few others signed the convention while most others refused to sign the convention[3].   As a leader from the Brahmin community, Tilak has been presented as a man who believed in caste hierarchy. Once again, the Indian historical scholarship falls short in understanding the true nature of Tilak’s ideas on caste. The ‘moderate’ leadership in the late 19th century included Gopal Krishna Gokhale, M.G Ranade, Dadabhai Naoroji, Pherozeshah Mehta, Sir Surendranath Bannerjee, Sir Rashbehari Ghosh among others. The moderate leadership was largely homogenous in their composition in the sense that all were English educated. The moderate leadership believed in prayers and petitions and sought to develop a dialogue with the British administration. The moderates believed in gatekeeping this dialogue for a few elite intellectuals (mostly from classes and castes that were considered as upper). Gokhale firmly believed that the ordinary citizens of the country must not become a part of the struggle against the imperial state (Pagdi, 2011). B. Pattabhisitaramiah suggests that Gokhale’s methods sought to win the foreigner, Tilak’s to replace him; Gokhale looked to the intelligentsia, Tilak to the masses; Gokhale’s arena was the Council Chamber, Tilak’s forum was the village mandap[4]. Tilak sought to give the national struggle a truly national character by involving people from all walks of life. Tilak was given the epithet ‘तेल्या - तांबोळ्यांचे पुढारी’ (_telya-tambolyanche pudhari_), meaning the leader of the working classes[5]. He spoke and wrote in favour of abolition of untouchability. Tilak spoke at the Conference on Abolition of Untouchability, held on 23-24 March 1918, and presided over by Sir Sayajirao Gaekwad. Tilak stated unequivocally, “If God were to tolerate untouchability, I would not recognise him as God at all” (Shah, 1983, 206). Tilak has often been portrayed as a Hindu revivalist and as a leader who was dismissive of minorities. A thorough study of Tilak and his relation with his contemporaries, however, reveals a different truth. Tilak believed that the minorities, especially the Muslims must have an equal place in the local and national platforms for Swarajya. The accusation that Tilak alienated Muslims from the struggle against the imperial state is rightly challenged by his 1916 speech. At the Lucknow session in 1916, Tilak put up the proposition of changing the three-way fight among the British, the Hindus and the Muslims into a two-way fight where Hindus and Muslim would fight united against the imperial British state. Among Tilak’s close friends and admirers were Barrister Mohammed Ali Jinnah and Maulana Hasrat Mohani. When Tilak was charged with sedition in 1908, Barrister Jinnah quickly moved the bail application which eventually was rejected. The Lucknow pact signed between Tilak and Jinnah in 1916 was a sincere attempt at weaving a thread of unity between the Hindu and Muslim communities. When in Chindwara prison, Jinnah wrote to Tilak, “Your courage, resolution and fortitude are an example to us, younger men, whatever be our politics, and these have convinced me, that after going through all this, you could never contemplate with equanimity, much less desire, that even a particle of the same suffering should be inflicted on a fellow countryman, no matter of what caste or creed, equally in the defence of freedom and self-respect”[6]. Although Tilak was a staunch practising Hindu, “Tilak was free of communal bias and preferred to keep religious agenda out of politics” (Pagdi, 2011, 115). Maulana Hasrat Mohani was a strong supporter of Tilak[7]. In 1907, when Tilak walked out of the Congress party, Maulana left with him[8]. Maulana wrote a moving poem on the death of Tilak. He wrote :  _Maatam ho na kyun Bharat mein bapa, duniya se sidhare aaj Tilak_ _Balwant Tilak, Maharaaj Tilak aazaadon ke sartaaj Tilak_ _Jab tak wo rahe duniya mein raha hum sab ke dilon par zor unka_ _Ab reh ke behisht mein nizde Khuda rooho’n par karenge raaj Tilak _ (Why wouldn’t Bharat grieve, Tilak has left this world today.  Balwant Tilak, Maharaj Tilak, the pride of the free-spirited  Till he lived he ruled our hearts Now that he’s with the maker, he will rule our souls)  The liberal nuances in Tilak’s thoughts and ideas are crystallised in his defence arguments when he was charged with sedition in 1908. Tilak’s central concern “was to publicly articulate the Indian people’s rejection of a law grounded in the primacy of colonial/ imperial power and not on popular sovereignty. Colonial law so far as it was not anchored in society, nation and community, Tilak publicly declared, was by its very nature, illegitimate” (Mukherjee, 2017, 4). Tilak defended not only his writings in Kesari but sought to defend the freedom of the native press in India. According to Gerald Barrier, more than two thousand Indian newspapers came to be censored by the British government between 1901 and 1947 (Barrier, 1974). Against the repressive measures taken against native press, Tilak asked the jury, “if the press in England had the right to criticise the bureaucracy and raise public opinion about the policies of the government in England, why should the press in India be denied the same rights?” (Mukherjee, 2017, 11) The British rule of law could interpret any word as seditious or libellous, and in such conditions, Tilak said, “you could only beg, not claim as a right. Political discussion could only be carried out on the sufferance of the government” (Kelkar, 1908, 175). Inevitable as it was, the imperial British judiciary convicted Tilak of sedition. His remarks on the pronouncement of his verdict are deeply reminiscent of Thomas More’s last words addressed to King Henry VIII[9]. Thomas More said before his execution, “I die the King’s good servant, but God’s first”. Tilak rejected the very legitimacy of the law which convicted him and yet accepted the consequences. “All I wish to state is that in spite of the verdict of the Jury I maintain that I am innocent. There are higher Powers that rule the destiny of things and it may be the will of Providence that the cause which I represent may prosper more by my suffering than by my remaining free” (Kelkar, 1908, Part 2). Lokmanya Tilak is an amalgamation of a variety of political thoughts. A staunch believer in spirituality, Swarajya, and a man who vehemently opposed state intervention and British misrule, Lokmanya Tilak was a teacher, a writer, a journalist, and a national leader. He relentlessly exposed the hypocrisies and the fallacies of the British administration in India. He believed that those who were in awe of the colonisers could never put up a genuine fight to get rid of them; they could never concede the shortcomings of the imperial state and instead would keep pointing to the perceived progress the British brought to India. Tilak never publicly endorsed the use of violence but he was critical of the ‘moderate’ method of prayers, petitions and constitutional political movement. In an article in Kesari, titled, _Sanadshir ka Kaydeshir_ (Constitutional or Legal), Tilak refuted the idea of constitutional movement saying, “Britain has not set any Charter of rights to Hindustan, therefore it would be ridiculous to say that the movement be conducted as per the Charter” (Pagdi, 2011, 96). Tilak was a man of many facets and an excessive focus on any one facet leads to an obfuscation of others, as has been the case with Indian scholarship. In Tilak, the conservative and the liberal intertwine imperceptibly. As A.B Shah says that Tilak was a conservative liberal and certainly not a revivalist as he is often painted. **Endnotes** [1] Shah, A. B. (1983). Tilak and secularism [Print]. In _Political Thought and Leadership of Lokmanya Tilak_ (pp. 201–220). Concept. [2] See Arthur Crawford’s _Our Troubles in Poona and the Deccan_ (1897). Gayatri Pagdi refers to Crawford as ‘a man maddened by racism’ (2011). [3] Find more in A.B Shah’s _Tilak and Secularism_ (1983). [4]_Tilak and Gokhale : A Comparative Study_, Mohammed Shabbir Khan, Ashish Publishing House, 1992. Qtd in Pagadi, 2011, 91. [5] Tilak was a strong supporter of workers’ rights and he organised the workers to fight for the cause of boycott of foreign goods and Swadeshi initiatives. For more, refer to Pagdi, 2011, pp 199-214 [6] Inamdar, N. R. (Ed.). (1982). _Political Thought and Leadership of Lokmanya Tilak_ [Print]. Concept. [7]  Qtd. in Pagadi, 2011, 116 [8] For more on Maulana Hasrat Mohani, see Jawed Naqvi’s piece in _Dawn_, 11 August 2010. [9] Thomas More was an English judge, philosopher, bureaucrat and a humanist. He opposed King Henry VIII’s takeover of the church which in his view was a violation of secular principles. Along with many other dissidents, More was executed in 1535. **References ** Barrier, N. G. (1974). _Banned; Controversial Literature and Political control in British India, 1907-1947_. [Columbia] : University of Missouri Press. Chirol, V. (1910). _Indian Unrest_ [Print]. Macmillan and Co. Limited. Inamdar, N. R. (Ed.). (1982). _Political Thought and Leadership of Lokmanya Tilak_ [Print]. Concept. Kelkar, N. C. (Ed.). (1908). _Full and Authentic Report of the Tilak Trial_. Indu-Prakash Steam Press. Lyall, A. C. (1910). Introduction [Print]. In _Indian Unrest_ (pp. viii–xvi). Macmillan and Co. Limited. Mukherjee, M. (2017). Sedition, Law, and the British Empire in India: The Trial of Tilak (1908). _Law, Culture and the Humanities_, _16_(3), 454–476. https://doi.org/10.1177/1743872116685034 Pagdi, G. (2011). _Lokmanya Tilak: The First National Leader_ [Print]. Indus Source Books. Shah, A. B. (1983). Tilak and secularism [Print]. In _Political Thought and Leadership of Lokmanya Tilak_ (pp. 201–220). Concept. [_Previous musing: Gopal Ganesh Agarkar and the Vindication of Women’s Education_](https://indianliberals.in/content/gopal-ganesh-agarkar-and-the-vindication-of-womens-education/) [](https://indianliberals.in/wp-content/uploads/2023/09/IMG_4159_Original.jpg) **Avanti Lele** Avanti Lele is a Minoo Masani Liberal Fellow. She is pursuing her PhD in English Literature from Lancaster University. She has worked as a lecturer of English Literature and as a Spanish language instructor. Her research interests include but are not limited to women's writing, liberal feminism, postcolonial studies, indigeneity. --- ## [Musing] MAKING CAPITAL OUT OF CONSUMER GOODS URL: https://indianliberals.in/musings/making-capital-out-of-consumer-goods/ ### Body The following text was originally delivered as a speech by Abid Hussain at the 24th A. D. Shroff Memorial Lecture held in October 1989, originally published by the Forum of Free Enterprise. The author was an Indian economist, civil servant, and member of the Planning Commission, Government of India. It is a great honour to be speaking at the Silver Jubilee celebrations of this august institution. I offer you my deepfelt thanks for inviting me. And I offer you my sincere congratulations and those of the world business community represented in the International Chamber of Commerce, on your first, immensely successful, 25 years. May you go from strength to strength during the course of your next quarter century!  The Forum was, of course, founded by a very great man, the late A. D. Shroff. And the high standards he set have been admirably maintained by the eminent persons who have followed him as President- the late Murarji Vaidya, J. H. Doshi, and your present distinguished leader, N. A. Palkhivala, who enjoys the profound respect not only of his fellow countrymen but of informed people and decision-makers throughout the whole world. His annual lectures on the Union Budget must rank as one of the most remarkable phenomena of the modern age and I'm sure I do not need to remind you how fortunate the Forum is to have such a celebrated statesman in its Presidential chair.  I have been greatly impressed by the work this Forum accomplishes in this huge country. May I suggest that one of your objectives for your next 25 years should be to share your ideas and methods - your recipe for success, as it were - with as many other countries as possible. So very many of them desperately need their own Forums of Free Enterprise. Could not India take the lead in encouraging their establishment elsewhere? The ICC would be more than willing to help with such an initiative. Your shining example would be a major asset in inducing others to pursue the same path towards a better future for a larger part of mankind.  It is with some hesitation that I rise to address you today - you the descendants of those great entrepreneurs which this sub-continent produced. They were far-sighted individuals who both believed in and practised free enterprise. They ventured all over the world, men of no formal education or technical knowhow, but honest and hard-working and with a firm and confident faith in the free economy system. Is it not presumptuous of me to lecture the sons and grandsons of such masters of entrepreneurship on the virtues of free enterprise? Or is it perhaps salutary to remind ourselves of those virtues in an age which so takes freedom for granted that it is being whittled away under our noses, diluting the blood of entrepreneurship in our veins without us fully realising it?  Any individual who did business at the beginning of this century would be shocked by today's world if he had not gradually got used to it over the passage of time - as many of us have. He would be shocked not so much by the oneness of the world and the closeness of different countries forged by the revolution in communications and transport- advances of which humanity is justifiably proud. Rather he would be shocked by the degree to which business is restricted, hampered and fenced in by government regulations and controls. In this sense, distances are far greater than before. You may be able technically to finalise a deal over the telephone or by telex in a few short minutes or hours - and may even be able to rush supplies to wherever they are needed with what must effectively be considered no delay at all. Bu·t and it is a very important 'but' - these technical gains in speed are frequently more than offset by the tediously protracted processes of completing official formalities and seeking bureaucratic permissions and approvals. In this respect, we live in many different worlds which relate with each other only over and around considerable man-made obstacles. As has been the case throughout history, the unifying forces of commerce are frustrated by the divisive forces of politics.  Barriers to trade and investment between countries, though regrettable by the absolute standards of the one-world ideologue and frequently harmful to the cause of maximising global economic efficiency, are not alone and of themselves a major catastrophe. What does the real damage is that government controls and restrictions extend deep and wide into our national economies, thwarting and distorting competition and the free enterprise system on a massive scale.  The fundamental raison d'etre of the free enterprise system is that it harnesses for progress the energy and drive of individuals and their yearning for self-betterment. It achieves this through a competitive process which encourages people to work hard and efficiently in producing what consumers wish to buy at minimum cost. Remove competition, and private enterprise stands defenceless. Profit ceases to have either economic significance or moral justification. If we allow controls to proliferate which strangulate both competition and individual initiative, why do we need private enterprise at all?  In my own mind, I have no doubt whatsoever that the free market economy is the key to all freedoms. In fact, the market and freedom are really synonymous terms. We should never forget that the only thing governments can control is people. One yard of textile does not care what its price is. But people care: the people who manufacture the textile, the wholesalers who sell to the retailers, and the retailers who sell to the consumers. And that is all controls can ever mean: 'people' control. It is never prices or goods and services but only people who are controlled, subsidised or supported by government. It is this that so many citizens fail to see or choose to ignore.  The expression "control" frequently conjures up an image of government action to help people. But when we give it its correct descriptive title of "people control", quite another image comes to mind. For obviously, when government controls people it necessarily deprives them of some freedom. Economic controls are automatically destructive of the market economy in which people voluntarily buy and sell on mutually acceptable terms. For controls involve compelling people to act in ways they would not necessarily choose voluntarily.  In many developing countries where there is a conscious striving for economic progress, almost every policy of government has come to be justified as necessary for development and the success of the PLAN. Yet there is scarcely any yardstick by which such claims can be measured and evaluated. This would be a difficult enough exercise even if we had access to the sort of sophisticated statistics and tools of analysis available in the developed countries. Given the notorious unreliability of total absence of data in the developing countries, it is downright impossible. So the policies and programmes campaigned for by vocal sections of our population can all be justified as promoting development without fear that their actual impact might be subject to critical measurement.  I am not at all against the idea of government publishing its view on future developments in a country in the form of an overall development plan for the general guidance of its own agencies and the private sector.. But that is all it should be. Unfortunately, as far as the private sector is concerned, our experience both now and in the past is just the contrary. I once engaged in a discussion with a planner in a high official position who Clearly believed that, without his forecasts and guidance, his country's economy would be "flying blind". To him, as to all planners, the world of private enterprise was one in which everybody works at cross-purpose and takes decisions solely in his "private" interest rather than in the wider "public" interest – whatever that may be.   Planning always involves compulsion even when, as it usually is, dressed up in a variety of guises to misguide its victims. Government planners will, of course, try to persuade people that The Plan has been drawn up for their own good and that the only persons who will be subject to coercion are those whose activities are "not'' in the public ''interest". They will claim, in their new-fangled phraseology, that their plans are not "imperative" but merely "indicative". They will make a great public parade of democracy, freedom and co-operation by "consulting all groups in society" — "business", "industry", "workers", and even "consumers" — to seek their help in drawing up The Plan and their acceptance of its specific goals or targets.   But, of course, if the planners really succeeded in accommodating the wishes of everyone, if The Plan allowed everyone to arrange their economic activities in the manner they intended to do anyway, then it would be quite pointless and useless exercise, a complete waste of time and effort. The Plan is only meaningful if it compels individuals to produce and consume different items — or different quantities of those items — than they would have done voluntarily given the freedom to choose in unfettered markets. If The Plan is to be meaningful, it must in the nature of things resort to compulsion. Two excuses are invariably offered for the inevitable coercion. One is that the free market produces the "wrong" goods and only government planning and direction can assure the production of the "right" ones — with the bureaucracy, of course, possessing a monopoly of mystical powers to determine what is right and what is wrong. The second excuse is that the free market does not produce enough goods and that government planning is needed to speed up the production process. In actual practice, of course, government planning does not so much speed it up as impede the progress.   I want to dwell a little on this strangely powerful notion that government direction and coercion can in some magical way increase production above the level achievable by individual citizens applying their own enterprise and taking their own decisions in a regime of economic freedom. It seems to me self-evident that when people are free, welfare tends to be maximised — or, at least, optimised. This is because in a system of free markets and private enterprise everybody's reward tends to equal the value of what he produces. What he gets for his production (assuming he is allowed to keep it) is what it is worth in the market — the value placed on it by voluntary, uncoerced buyers. If he wants to double his income next year, he is free to try — and may succeed if he is able to double his production over the year, or if the market worth of his production rises. If he is content with the income he has - or if he feels he can only increase it by excessive effort or risk, then he is under pressure to raise his output. In a free market economy everyone is at liberty to maximise his own satisfaction, whether this consists of more leisure or more goods.  There is among planners a profound mystical belief in the power of words. They declare, for example, that they are not content with an annual growth rate of. a .mere 2.8% and stipulate that henceforth it shall be 5%. And having thus stipulated, they assume that that in itself has propelled the economy half-way to their new target. I am not being frivolous. Such must be their assumption for, otherwise, it would be impossible to explain the deep earnestness with which they argue among themselves whether the growth rate ought to be 4 or 5 or 6%. The only thing they always agree upon is that it ought to be higher than whatever it actually is.  But why do they assume that setting their magic targets will increase the rate of production? By what processes do they imagine that the behaviour of millions of individual citizens will suddenly change to ensure that the national economy as a whole hits their targets? Is the man who is already making 50,000 rupees a year to be coerced into working for an income of 52,000 next year? Is the man who is making only 5,000 rupees a year to be forbidden to earn more than 2,500 next year? If not, what is gained by setting a specific annual growth rate as a government target? Why not just permit or encourage everybody to do his best and make his own decisions and let the average growth be whatever it turns out to be. Rapid economic growth is a by-product of good government policy; it cannot be a government policy in itself.  The effective route to rapid economic growth - assuming this is the aim - is to encourage production, saving, investment, and employment. And the way to do this is to maintain a free market economy and a stable currency freely convertible into others at a rate determined by the market. It is to respect profits - which will in turn promote both investment and jobs. It is to refrain from oppressive taxation which drives away funds for productive investment. It is to refrain from wage controls and cumbersome labour legislation which destroy jobs. It is to permit interest rates to find their own levels and thus maximise saving and investment.  The way to slow down economic growth is, of course, precisely the opposite of this. It is to discourage production, saving, investment and employment by incessant government interventions, controls, threats, harassment  and exorbitant taxation. It is to frown upon profits, to repeatedly declare them excessive, to control prices by law or intimidation, to hold interest rates down artificially, to bestow exceptional privileges and legal immunities on labour unions so that their demands become chronically excessive and threaten chronic unemployment - and then to try to offset the ill-effects of all these policies by higher government spending and consequent deficits which have to be financed by inflationary recourse to the currency printing presses.  All persons of goodwill share the same goal of raising the living standards of mankind. The differences – about which men fight, including men of goodwill – revolve around the methods to achieve the goal. Let me briefly compare those methods. The free market method permits individuals to use their own money, skills and hardwork to back their own economic decisions in the market place. They reap the rewards of good judgement and suffer the consequences of poor judgement. Under this system, no one buys or sells or participates unless his judgement tells him to.  The socialist or centralised method means that government compels individual citizens against their will and better judgement to contribute their money or time to implement its ideas and schemes. There is no sure way to determine whether the official decisions are commercially sound because the only true economic measurement there is – the test of the market – is forbidden.  And there is a third method now popular in several developing countries – a method which I call the "compromising way" and which stems from the delusion that a middle path exists between the market method on one side and the socialist method on the other. In my book, this middle path is the socialist method. The fact that government may permit a great deal of private ownership and some private initiative in partnership with itself in no way means that government is not fully in charge. When you think about it, why should government bother to nationalise productive assets or need to compel people to act in this way or that if they cooperate voluntarily and submissively? Stalin would never have murdered any one if he had been sure that everyone would willingly have done exactly as he wanted.  The advocate of the third method may sincerely and indignantly deny that his is the government way. He will claim to favour only certain specified controls by government. But, in so doing, he opens the way for one control after another because he cannot put his finger on any generally accepted principle defining the limits of government activity, and thus he has no logically defensible ground for protesting against an indefinite number of additional controls. This is how - even though they may be quite innocently unaware of the ultimate consequences of their acts - the proponents of the third method are paving the way for socialism and coercion.  I accept that, if we are forbidden a free market economy, then a half-free one is better than none at all. But I hope we all agree that a half-free one is not only very far from ideal but is also invariably unstable in the sense that the coercive part is inherently expansionist. And that is bad for business confidence, bad for investment, bad for jobs and bad for economic growth and development.  Let me try to pinpoint some of the specific consequences of the socialist method which has been adopted to a greater or lesser degree in practically all countries of the world today. I shall, however, gear my remarks towards the developing countries and towards the impact on the business sector.  Does anyone seriously believe that government intervention in the economy nowadays is merely to protect the weak or to redress the inequalities supposedly produced by the free enterprise system? I hope not. For, in reality, the intervention goes far beyond that. The truly disturbing aspect today is the intervention – large and growing – that takes place purely and simply to placate or curry favour with organised, vocal and politically powerful groups in society irrespective of their economic condition.  Out of this arises much of the wastage of human and other economic resources which holds production below its potenti.al capacity. Because the assets and dynamism of the free enterprise system are suppressed, distorted and prevented from translating their full capability into actual output of goods and services, poverty and misery persist and a large part of humanity lives in constant fear of unemployment and starvation. Glaring examples of this can be found in the developing countries of Asia, Africa and Latin America. And I would like to highlight some of the policies pursued in these regions in the name of industrialisation and economic development but which have the perverse effect of perpetuating poverty and backwardness. Not that I believe their poverty is entirely of their own doing, I may add. The developed world is far from blameless in pursuing policies - particularly on the trade front - which inhibit the progress of poorer countries and set the additional obstacles to overcome which they could well do without. But let us look at ourselves for the moment since prosperity - like charity begins at home.  _Previous musing: [FREE MARKET ECONOMY: KEY TO ECONOMIC PROGRESS AND FREEDOMS](https://indianliberals.in/content/free-market-economy/)_ --- ## [Musing] Making Indian Industry Globally Competitive URL: https://indianliberals.in/musings/making-indian-industry-globally-competitive/ ### Body The following text is taken from a booklet published by [Forum of Free Enterprise.](https://indianliberals.in/liberals/making-indian-industry-globally-competitive-15-may-1995.pdf) Authored by Indian jurist and liberal economist Nani Palkhivala, the text is based on the 12th T. A. Pai Memorial Lecture delivered on 17th January 1995 and takes an approach towards understanding the mighty scope of Indian human resource in the coming years. I feel happy and honoured to have been invited to deliver the Memorial Lecture this year to commemorate the birth anniversary of the late T. A. Pai which falls today. Entrepreneurship comes naturally to Indians. In the field of entrepreneurship it may be doubted whether any single family has done more than the Pai family of Manipal. And in the Pai family no one distinguished himself more than the late T. A. Pai. His was a rare blend of vision and pragmatism. He had the Midas touch. He used his enormous talent to turn a small rural bank into one of the top ten in the country. He was a master of the art of business management before that art was recognized as the most priceless asset of any corporation or business group. I remember meeting him on several occasions when he was connected with the Life Insurance Corporation of lndia or was a minister in the Central Cabinet. He served the country in a number of capacities, and it would be true to say of him that, in the hackneyed phrase, he did not touch anything which he did not adorn. It is true that T. A. Pai was a member of the I government which imposed strangulating controls on India, even as Mr. P. V. Narasimha Rao, our present Prime Minister, and Dr. Manmohan Singh, our present Finance Minister, were also members of the same government. But T. A. Pai’s natural inclination was towards liberalization; just as Mr. Narasimha Rao's and Dr. Manmohan Singh's instincts incline them in that direction. Nations go through periods of concerted folly when individuals with the right instincts are not able to assert themselves. Having known T. A. Pai as I did, I have no doubt that he would have been much happier if he had to function in the present climate. Let me cast a glance at the lost decades which have been, providentially, gathered to the past. For the first forty years of our history as a republic the pace of our economic growth had been sedate, if not glacial. Then came the economic transformation with a big bang. The period of collective insanity was over. The biggest metamorphosis in the economic climate came with the enunciation of the New Industrial Policy in July 1991. The world's fifth largest democracy reached a turning point in its history: for the first time it looked less like a tortoise and more like a tiger. The arthritic economy started performing like an athletic economy. Liberalization and globalization are dictated by the Zeitgeist - the spirit of the times. To be globally competitive, a country must be blessed with two favourable factors - an unlimited reservoir of talented and skilled labour and an abundance of capital available for new projects. A World Bank report, published a few years ago, indicated that lndia had both these factors in abundance. We have 5000 years of civilization behind us - a civilization which reached "the summit of human thought" in the words of Ralph Waldo Emerson. We inherited great skills and many splendoured intelligence, since the genes had evolved over five luminous millenia. The trader's instinct is innate in our ethos. I am never tired of repeating that an Indian can buy from a Jew and sell to a Scot, and yet make a profit! Giant multinational corporations are engaged in worldwide competition for the most scarce resource of all - talent. lndia has never been charged with an inadequate supply of this resource. Sir William Ryrie said, as the Executive Vice President of the International Finance Corporation, that lndia has some of "the most creative entrepreneurs . . . the most dynamic business leaders . . . and the sharpest financial brains in the world." Incidentally, IFC has invested nearly $ 650 million in India's private sector in fiscal 1994, raising the country to the status of Number One in its worldwide portfolio. I should like to give you some figures which illustrate the sea change - revolutionary transformation which has been effected in the last three years. An annual average amount of just Rs. 90 crore was raised in the 1970's in the primary market by promoters of new companies; while Rs. 30,900 crore was raised in 1993-94 - an astonishing 344 times upsurge. Coming to the secondary market, the number of listed companies has risen from less than 2,300 in 1980, to about 8,000 today, catapulting lndia to the first position in the world overtaking the United States which had about 7,250 listed domestic companies at the end of 1993. No less than 500 new public companies were floated during the last twelve months. The Centre for Monitoring the lndian Economy (CMIE) places the value of total investments on ongoing projects at the end of 1994 at Rs. 776 thousand crore, comprising 3,093 projects. For those who are still unconvinced that lndia has arrived, let me quote a few more facts. There are 23 stock exchanges in lndia and 30 mutual funds (public and private). Truly, lndia has now become a shareholding democracy. Among those who buy or subscribe for shares there are many who have no idea whether Wall Street is a thoroughfare or a new mouthwash. But they take the view that the stock exchange is the one place where you can get money without earning it. The number of shareholders and investors in mutual funds has risen sharply from about two million in 1980 to over 40 million. Thus lndia has today the second largest investor population, next only to the United States which has about 51 million investors. I now come to the main theme of my talk - the necessity for making lndian industry globally competitive. The first necessity is to spread education more widely among our people. Today, lndia is competing, with only half its manpower, with the rest of the world, - since half of the lndian population is literally illiterate. We must make education the priority of priorities. The real resource of any country today is knowledge. Instead of capitalists and the working class, we are today having knowledge workers and service workers. Even in America, the Morgans, the Rockefellers and the Carnegies have been replaced by professional managers. Today, the well established pension funds increasingly control the supply and allocation of money in developed countries. These funds own in the USA half of the capital of the country's largest businesses. The pension funds are run by a new breed of "capitalists" - the faceless and anonymous employees who run the pension funds, and investment analysts and portfolio managers. As Peter Drucker observed, we are living in a new era which is both non-socialist and post-capitalist. Investing in education is to the 1990s what nationalization was to the 1940s and privatization was to the 1980s - the universal panacea of the day. All thinkers are agreed that in our times human capital is the most precious form of capital there is. The skill and calibre of corporate manpower can never appear in any balance sheet; but it is widely acknowledged throughout the world that the greatest resource of a company is trained manpower. In a book published recently by the famous economist, Julian Simon, the human resource is rightly defined in the title of the book as "The Ultimate Resource." Among the nations of the world, India ranks very high in innate intelligence, but abysmally low in wisdom - what the ancient rishis called _buddhi_. This is both the cause and the effect of our total indifference towards education. The criminalization of politics and the deplorably low moral tone of our public life are the direct consequences of the failure to impart value based education. When Indians are better educated, they will know how to behave better as workers and to discharge with greater responsibility their duties as citizens. Liberty without accountability is the freedom of the fool. Our concept of freedom will remain an impoverished one, until it is rounded and deepened by liberal education. Education is the rock on which India must build her political salvation. Our country will be built not with bricks but with brains; not with cement but with enlightenment. If we cannot afford education, we cannot afford to remain a civilized society. Secondly, we must privatize the public sector undertakings. Privatization means that the majority of shares should be allowed to go into public hands, while the government may only retain a minority interest. British Airways was privatized, and the standard of service improved beyond recognition. The Government of lndia has never understood that half-hearted reforms yield only half-baked results. There are hundreds of public sector enterprises run by the Union government, and more than three times that number are run by the State governments. These public sector enterprises are the black holes, the money guzzlers, and they have been extracting an exorbitant price for our past doctrinaire socialism. India's public sector earns a return of barely two per cent on the capital employed. The British government is toying with the idea of privatizing even Air Traffic Control. In India, there is no political will to privatize any of the industries which are today in the public sector. The utmost the government is willing to do is to offer a minority shareholding in public sector enterprises to private parties, which means that control and management would continue to be in the hands of the government. The products and services offered by the public sector undertakings, - e.g. the coal mined by the Coal Corporation of lndia - are excessively expensive, with the result that many of the inputs in lndian industry are proportionately costlier than they should be. The inevitable result is that some of our end products are uncompetitive in the world markets. Thirdly, the quality of service rendered by the public sector undertakings is pathetic, if not hopeless. lndia has vast infrastructural gaps. It has to add 100,000 mw of power capacity in the next ten years. It has to upgrade, both quantitatively and qualitatively, telecommunications network. Take our telephone service which still continues to be the monopoly of the Union government. The lndian telephone service is undoubtedly the most inefficient in any important country of the world. But it has now reached a degree of inefficiency and corruption which is almost unbelievable. Quite often, you have to dial the required number half a dozen times before you get a connection, and dead telephones and wrong connections are the rule rather than the exception. The most serious fraud is committed in those cases where an outsider bribes telephone employees to illegally divert to himself a telephone line and makes calls for which the bill goes to the registered owner of the telephone. On the top of it all, service tax has been imposed upon every telephone call since last July. If there were a World Cup to be awarded to any government which has levied the most impudent and shameless tax, the lndian government would, without question, defeat all its rivals. The tax on telephones is called a service tax. As a matter of fidelity to the English language, I suggest that the service tax on our telephones should be called "disservice tax". It is a long time since the lndian telephones last rendered any service to the long suffering public. What a dramatic change there would be in the field of telephones if the government monopoly were ended. Competition is the only answer as in other areas of the public sector. Fourthly, strangulating controls have, to a considerable extent, been relaxed. But the top-heavy bureaucracy still continues to function. The lndian governmental machinery has been likened to some prehistoric monster incapable of intelligently controlling itself. The general impression has been that the lndian bureaucracy is the most obdurate and most inflexible the free world has ever known. As I have said before, there is a persistent tendency in lndia to have too much government and too little administration; too many laws and too little justice; too many public servants and too little public service; too many controls and too little welfare. The licence raj has been dismantled, but the inspector raj still lives on. I am aware that all this is changing but the rest of the world is changing much, much faster. We must stop frittering away our people's time and energy in inane, unproductive, useless activities. The tax system has reached the point where its tangled mass helps nobody. India's tax system is a nightmare. To call the lndian Income-tax Act a national disgrace would be to err on the side of under-statement. Even the last four Budgets which changed the fiscal and economic laws beyond recognition, were cluttered with about 600 amendments which serve no purpose other than create work for the legal and accountancy professions. Fifthly, we must drastically change our labour policy. Lee Kuan Yew, the wisest statesman of our times, had a point when he said that the main reason why lndia has not progressed as fast as the other countries of the East, is that all emphasis is on liberty while there is no regard for dedication and discipline. The Finance Minister had promised an exit policy but no action whatever has been taken in that direction. lndia will find it impossible to compete with the rest of the world so long as the law forbids even a humane exit policy and prohibits closure of a unit without the government's permission. Our labour unions live in a thought-free zone. For reasons which are painfully apparent, they are stoutly opposed to the government offering even a minority shareholding to the public in nationalized industries. Sixthly, if there is any one political factor which is bound to impede the forward economic march of India, it is the resurgence of the age-old curse of casteism. History will record that the greatest Himalayan blunder of lndia in this decade has been to encourage casteism by making rigid reservations for employment under the state in its infinite variety and for admission to educational institutions, on the basis of caste. Ever since Mr. V. P. Singh began to use casteism as a political weapon, lndia has been paying the highest price any country has ever paid for democracy. Reservations in different States have already resulted in the substandard replacing the standard and the reins of power passing from meritocracy to mediocrity. Unfortunately, the calibre of politicians in lndia has reached an all-time low and intellectual pygmyism is the order of the day. There is already a scramble among State politicians to vie with one another in prescribing larger reservations. Reservations of the type sought to be made in different States can be allowed to prevail only by scrapping what Chief Justice Mahajan called "our sublime Constitution" and by promulgating a backward Constitution for a backward nation. It would not be too much to say that one of the policy imperatives for creating a globally competitive Indian industry is to change our policy of shortsighted political expediency, adhere to the clear mandate of the Constitution, and prevent the States from pursuing the suicidal policy of casteism. Verily, lndia has an unusual talent for self-destruction. Lastly, the government must make sure that the fruits of liberalization reach the masses. This is the most important lesson which lndia has to learn from Mexico. Our inflation must be brought down from 9.9 per cent to a level where it hurts the lower classes less. For instance, the price of food articles has risen as much as 55 per cent since the economic reforms began in July 1991. Let me say a word about the future prospects of lndia in the world which has become globally competitive. I do believe that lndia has a great future and can hold its own in competition with other countries. All that it needs is great moral leadership. No democracy in the world today has great moral leadership. But in countries like Japan this desideratum does not have discernible ill-effects because the people are totally disciplined, characterized by exemplary dedication, and there is hundred per cent literacy. By contrast, we Indians lack discipline and dedication and have at least half of our population literally illiterate. Therefore, we find ourselves rudderless in the absence of moral leadership. We suffer acutely from four plagues - regionalism, communalism, casteism and corruption. There are various categories of democracies - intelligent democracies, guided democracies and misguided democracies. The four plagues have made it possible for self-seeking politicians to convert our democracy into a misguided democracy. lndia produced Mahatma Gandhi, the greatest moral force of this century. But today it is pathetically lacking even in mediocre moral leadership. Some decades ago, the weekly Punch, now defunct, came out with one word of advice to those about to get married - Don't. Sir Thomas Bingham, the Master of the Rolls, gave the same advice the other day to those about to embark on a litigation. Today, the opposite would be the advice to those about to invest in lndia - Do. Lord Keynes said that investment is not just a matter of cold calculation, but an act of faith on the part of risk-taking entrepreneurs. A recent issue of Forbes, the American business magazine, says in its lead story, "lndia may be the best emerging market of all". Forbes marshals facts in support of its view. There is twice as much American direct investment now going into lndia as into China. Unlike China, lndia operates within the rule of law. lndia also has a much larger and far more capable infrastructure of local companies which serve as good partners and tough competitors. Forbes further added that unlike China, lndia had much more than cheap labour to offer. That is why Motorola is planning to make lndia what it calls a 'brain centre' for engineering and design work; and why the Japanese subsidiary of Digital Equipment Corporation chose Indian software engineers, over its own Japanese employees, to write the tricky computer programmes that translate English code into Japanese characters. The celebrated investment bank, Merrill Lynch, has opined that liberalization in lndia had reached a point where it would be impossible to turn the clock back. In a recent report, Baring Securities mentions lndia among the best emerging markets. The vitality of lndia is remarkable. The country does not have a powerful economy, but has all the raw materials to build one. The Indian economy is like a sleeping giant who, if awakened, could make a powerful impact on the global economy. It would not be mere chauvinism to say that lndia is a giant with a bad cold, not a pygmy with cancer. The heart of the nation is sound and the human raw material is excellent. To a western mind, India's inner strength and capacity for patient endurance are almost beyond belief. Hundreds of millions who have no standard of living, still have a standard of life. Ambassador J. K. Galbraith remarked that while he had seen poverty in many countries of the world, he found an uncommon attribute among the poor of lndia - a richness in their poverty. They do not count their wealth in money alone. A nation's worth is not measured merely by its gross national product, any more than an individual's worth is measured by his bank account. Credit should go to Dr. Manmohan Singh for his endeavour to introduce fruitful egalitarianism in place of sterile socialism. But in that direction we still have a long way to go. lndia still waits for the type of revolutionary turnaround effected by the Labour Party of Britain under John Smith, its great leader and one of the finest gentlemen of our times, who passed away recently. Last year, John Smith said that he was relaunching the Labour Party as the party of the citizens and that he intended to chart a future in which the traditional associations of the Party with state ownership, high taxation and trade union power would be buried for ever. In a reference to the Labour Party's old attachment to public ownership of the commanding heights of the economy, John Smith said that the new commanding heights were education and training. He categorically said that there would be no commitment to renationalization in the next manifesto of the Labour Party and that the most important priority would be to invest in people, to provide opportunities and skills that were the building blocks for individuals and national prosperity. India purported to become a Socialist Republic by a constitutional amendment in 1976. The nation anxiously waits for the dawn of a new era when our politicians will, like John Smith and the present British Labour leader, Tony Blair, openly dissociate themselves from ideological socialism and espouse social justice which is ethical socialism. _Previous musing: [NANI PALKHIVALA: THE TASK BEFORE A FREE PEOPLE](https://indianliberals.in/content/the-task-before-a-free-people/)_ --- ## [Musing] Manifesto for Indian Liberals URL: https://indianliberals.in/musings/manifesto-for-india-liberals/ ### Body _The following manifesto was drawn up at the Conference Of Indian Liberals held on November 21, 1985 at the Royal Bombay Yacht Club.  It was originally published in the same year by the _[_Indian Liberal Group._](https://indianliberals.in/content/manifesto-for-indian-liberals-1985/)_  _We, the liberals of India assembled in Bombay on November 21, 1985 at a time of gross violations of human rights and persistent grave tensions which threaten peace and democracy, are convinced that this condition is largely due to the abandonment of liberal principles and affirm our faith in this Declaration. I. Democracy & Freedom - Man is first and foremost a being endowed with the power of independent thought and action, and with the ability to distinguish right from wrong. - Respect for the individual as guaranteed under the original Constitution of 1950 is the true basis of society. - The State is only the instrument of the community: it should assume no power which conflicts with the fundamental rights of the citizens and with the conditions essential for a responsible and creative life; namely: a) Personal freedom, guaranteed by the independence of the administration of law and justice.  b) Freedom of worship and conscience.  c) Freedom to associate or not to associate.  d) Free choice of occupation.  e) The right to free and compulsory education for all upto a minimum basic level.  f) The right to private ownership of property and the right to embark on individual enterprise. g) Consumer's free choice and the opportunity to reap the full benefit of the productivity of the soil and the enterprise of man.  h) Equality of rights between men and women.  - These rights and conditions can be secured only by true democracy which is inseparable from political liberty and is based on the conscious, free and enlightened consent of the majority, expressed through a free and secret ballot, with due respect for the liberties and opinions of minorities and even the individual. - The wide-spread disenchantment or disaffection, prevalent especially among the young, is the result of the failure to create, support and promote desirable values as well as of the  incapacity to adapt institutions and to ensure more justice and a better quality of living. In extreme cases, this disaffection has led to terrorism, in others, to anarchism or to a refusal to participate in public life. The values of freedom and independence, promoted by liberalism, can overcome this void, particularly if liberals make it clear that freedom for the individual is not to be confused with egoism, but is freedom within the context of community, implying responsibility and solidarity with fellow men. II. Decentralisation and Freedom i) Co-operation and solidarity between free men are a growing necessity in the modern world. However, the drive towards unhealthy centralisation has encouraged the downgrading of parliamentary institutions, the excessive dependence of the individual on the State and the growth of new forms of absolutism and of irresponsible centres of power through uncontrolled bureaucratic growth, the formation of public and private monopolies and the restrictiveness of some combination of employers, of workers, or of both together. ii) We believe that these tendencies can only be fought by devoted concentration on the overriding need for freedom in all its aspects, and in particular by: - The greatest possible devolution and spread of power in the economic, social and governmental fields, especially by determined action against monopolies. - maintenance of the widest multiplicity of expression and initiative in all matters of education and culture, including mass media of communication. - making all necessary information available to enable each citizen to form objective judgments on all matters of public interest. - protection of the rights of minorities to enjoy the essential liberties. - elimination of racial and all other forms oppressive discrimination. - protection of the individual and group from all forms of unwarranted invasion of personal, private life. iii) One area which requires immediate consideration is the relationship between the Centre and the States. The Constitution of India enacted in 1950 has balanced fairly the needs of national unity with those of reasonable authority for States. During the last 30 years, however, all major economic power has been concentrated in the hands of the Union Government, as a consequence of centralised planning. This imbalance has to be rectified by a greater measure of autonomy for the States and local self Government within the frame-work of the original Constitution of the Republic. There is no reason why a strong Centre should mean weak States or vice-versa. III. Institutional Issues In Modern Democracies i) Liberalism requires the continual reform and renewal of democratic institutions.  ii) Improvement and renewal in the institution of State and Society is seen by modern liberals as most important in:  (a) the effective representation of the people's will in the legislative power, e.g. through proportional representation which will ensure a legislature which fairly reflects the will of the people and the protection of minorities to ensure equality of opportunity; b) the decentralization of power by the proper and clearly defined organisation of State and local self government; c) the inclusion of trade unions and business professional associations in the liberal democratic system of checks and balances, in order to achieve healthier and more just industrial relations; (d) without individual initiative and responsibility both in the private and public sectors, the State turns itself into a soulless bureaucratic machine and rapidly loses efficiency. IV. Educational and Cultural Issues i) Modern liberalism is faced with:  - worldwide pluralism of cultures; - the need for a uniform Civil Code; - the need for freedom and pluralism in the media; ii) The main instrument with which to break down barriers to culture and to fight cultural, political and racial intolerance is education, based on democratic methods. Liberals, therefore, ask for the promotion of education for both sexes and all ages.  iii) Freedom and pluralism in the mass media are essential to a liberal society. There can be no political freedom where the media are in the hands of a monopoly or a quasi-monopoly, private or public. Liberals see, with growing concern, the powerful attacks against press freedom. V. Economic Issues i) The following are of crucial importance today:  - the role of economy in a liberal democracy; - the limited role of the State and planning in a social market economy; - new technologies and protection of the environment. ii) The basic liberal principle in the economy is that there can be no political freedom where the State dominates the economy and less room is left for private initiative. Notwithstanding some delusions to the contrary, there can also be no real and lasting economic freedom where the importance of political freedom is not understood and human rights are not respected. It is particularly emphasised that economic growth cannot and should not be at the cost of political freedom.  iii) The link which exists for liberals between a social market economy and liberal democracy also implies a constant battle against monopolies, cartels, restrictive trusts, restrictive practises, and so-called “dominant positions”, open or disguised, private or public except for cases authorised by law for justified and defined social needs.  iv) The liberal concept of the market is not that of the economy controlled by purely monetary means but to the contrary it includes and is closely associated with the interests of the poor and the community as a whole.  v) The state controlled and dominated the system as practised in India for the past over three decades is the root of slow economic growth, rampant lawlessness and corruption and proliferation of the black market economy. The only solution is a changeover to a liberal system which can undo the damage.   vi) Planning, in the liberal sense of the word, means indicative planning of and for liberty leading to a minimum or limited government. A strong vested interest has developed in the existing system where the public sector has become the private sector of the politician, the bureaucrat, the trader and entrepreneur who thrive on it and the disciplined worker with the consumer, left to fend for himself and live in a despondent milieu of 'choicelessness' and resulting 'voicelessness’.  vii) With this undogmatic approach towards the role of the State in the economy, liberals do not see the relations between the private and the public sector in a given economy and at a given time as static or final. Whilst the State or local authorities can be at times forced by their obligations to public welfare to take over economic activities, there must be a constant review of the public activities, to decide which of them should be returned in some form to private enterprise or to voluntary organisations.  viii) The corrective role of the State must not make everybody dependent on it. The main dangers inherent in an overextended welfare State are: - It makes people dependent on the government and bureaucracy, thereby reducing their sense of responsibility and their freedom; - It creates an expanding bureaucracy which inclines to grab power for itself which is detrimental to the national economy, increasing waste and corruption. - by taxes or by waste, it subtracts too large a portion of the national income from the growing needs for productive investment , research and development; - it can feed inflation and, therefore, make employment and investment more difficult. ix) Liberals believe that taxation should be fairly balanced between the needs of the individual and the needs of society for saving and investment. Taxation should, therefore, play a positive role in encouraging enterprise and in ensuring a greater equality of opportunity. x) To try to eliminate poverty and social injustice is not to accept egalitarianism viz. the abstract right to rigid equality of conditions for all, independent of talent, work or forethought. While liberals strongly support measures to reduce differences in wealth, to protect each citizen and to increase equality of opportunity, they decidedly oppose egalitarianism which degrades the individual, whereas the recognition of merit in conditions of social justice is stimulating.  The Test of Character  India's development by a democratic and liberal philosophy and action presupposes and requires that the elected representatives firmly believe in integrity and competence. India also needs men and women who uphold values and excellence, protect public interest, whose motivation is achievement - not power - and whose faith is outside partisan politics. To develop such men and women with such faith and principles is the real task and goal before liberals. If India has to reach its full potential, the test of Character is of prime importance. _Last week's musing: [DEMOCRATIC SOCIALISM IN INDIA – A SYMPOSIUM](https://indianliberals.in/content/democratic-socialism-in-india/)_ --- ## [Musing] Manifesto for Indian Liberals URL: https://indianliberals.in/musings/manifesto-for-indian-liberals/ ### Body _The following manifesto was drawn up at the Conference Of Indian Liberals held on November 21, 1985 at the Royal Bombay Yacht Club.  It was originally published in the same year by the _[_Indian Liberal Group._](https://indianliberals.in/content/manifesto-for-indian-liberals-1985/) We, the liberals of India assembled in Bombay on November 21, 1985 at a time of gross violations of human rights and persistent grave tensions which threaten peace and democracy, are convinced that this condition is largely due to the abandonment of liberal principles and affirm our faith in this Declaration. I. Democracy & Freedom - Man is first and foremost a being endowed with the power of independent thought and action, and with the ability to distinguish right from wrong. - Respect for the individual as guaranteed under the original Constitution of 1950 is the true basis of society. - The State is only the instrument of the community: it should assume no power which conflicts with the fundamental rights of the citizens and with the conditions essential for a responsible and creative life; namely: a) Personal freedom, guaranteed by the independence of the administration of law and justice.  b) Freedom of worship and conscience.  c) Freedom to associate or not to associate.  d) Free choice of occupation.  e) The right to free and compulsory education for all upto a minimum basic level.  f) The right to private ownership of property and the right to embark on individual enterprise. g) Consumer's free choice and the opportunity to reap the full benefit of the productivity of the soil and the enterprise of man.  h) Equality of rights between men and women.  - These rights and conditions can be secured only by true democracy which is inseparable from political liberty and is based on the conscious, free and enlightened consent of the majority, expressed through a free and secret ballot, with due respect for the liberties and opinions of minorities and even the individual. - The wide-spread disenchantment or disaffection, prevalent especially among the young, is the result of the failure to create, support and promote desirable values as well as of the  incapacity to adapt institutions and to ensure more justice and a better quality of living. In extreme cases, this disaffection has led to terrorism, in others, to anarchism or to a refusal to participate in public life. The values of freedom and independence, promoted by liberalism, can overcome this void, particularly if liberals make it clear that freedom for the individual is not to be confused with egoism, but is freedom within the context of community, implying responsibility and solidarity with fellow men. II. Decentralisation and Freedom i) Co-operation and solidarity between free men are a growing necessity in the modern world. However, the drive towards unhealthy centralisation has encouraged the downgrading of parliamentary institutions, the excessive dependence of the individual on the State and the growth of new forms of absolutism and of irresponsible centres of power through uncontrolled bureaucratic growth, the formation of public and private monopolies and the restrictiveness of some combination of employers, of workers, or of both together. ii) We believe that these tendencies can only be fought by devoted concentration on the overriding need for freedom in all its aspects, and in particular by: - The greatest possible devolution and spread of power in the economic, social and governmental fields, especially by determined action against monopolies. - maintenance of the widest multiplicity of expression and initiative in all matters of education and culture, including mass media of communication. - making all necessary information available to enable each citizen to form objective judgments on all matters of public interest. - protection of the rights of minorities to enjoy the essential liberties. - elimination of racial and all other forms oppressive discrimination. - protection of the individual and group from all forms of unwarranted invasion of personal, private life. iii) One area which requires immediate consideration is the relationship between the Centre and the States. The Constitution of India enacted in 1950 has balanced fairly the needs of national unity with those of reasonable authority for States. During the last 30 years, however, all major economic power has been concentrated in the hands of the Union Government, as a consequence of centralised planning. This imbalance has to be rectified by a greater measure of autonomy for the States and local self Government within the frame-work of the original Constitution of the Republic. There is no reason why a strong Centre should mean weak States or vice-versa. III. Institutional Issues In Modern Democracies i) Liberalism requires the continual reform and renewal of democratic institutions.  ii) Improvement and renewal in the institution of State and Society is seen by modern liberals as most important in:  (a) the effective representation of the people's will in the legislative power, e.g. through proportional representation which will ensure a legislature which fairly reflects the will of the people and the protection of minorities to ensure equality of opportunity; b) the decentralization of power by the proper and clearly defined organisation of State and local self government; c) the inclusion of trade unions and business professional associations in the liberal democratic system of checks and balances, in order to achieve healthier and more just industrial relations; (d) without individual initiative and responsibility both in the private and public sectors, the State turns itself into a soulless bureaucratic machine and rapidly loses efficiency. IV. Educational and Cultural Issues i) Modern liberalism is faced with:  - worldwide pluralism of cultures; - the need for a uniform Civil Code; - the need for freedom and pluralism in the media; ii) The main instrument with which to break down barriers to culture and to fight cultural, political and racial intolerance is education, based on democratic methods. Liberals, therefore, ask for the promotion of education for both sexes and all ages.  iii) Freedom and pluralism in the mass media are essential to a liberal society. There can be no political freedom where the media are in the hands of a monopoly or a quasi-monopoly, private or public. Liberals see, with growing concern, the powerful attacks against press freedom. V. Economic Issues i) The following are of crucial importance today:  - the role of economy in a liberal democracy; - the limited role of the State and planning in a social market economy; - new technologies and protection of the environment. ii) The basic liberal principle in the economy is that there can be no political freedom where the State dominates the economy and less room is left for private initiative. Notwithstanding some delusions to the contrary, there can also be no real and lasting economic freedom where the importance of political freedom is not understood and human rights are not respected. It is particularly emphasised that economic growth cannot and should not be at the cost of political freedom.  iii) The link which exists for liberals between a social market economy and liberal democracy also implies a constant battle against monopolies, cartels, restrictive trusts, restrictive practises, and so-called “dominant positions”, open or disguised, private or public except for cases authorised by law for justified and defined social needs.  iv) The liberal concept of the market is not that of the economy controlled by purely monetary means but to the contrary it includes and is closely associated with the interests of the poor and the community as a whole.  v) The state controlled and dominated the system as practised in India for the past over three decades is the root of slow economic growth, rampant lawlessness and corruption and proliferation of the black market economy. The only solution is a changeover to a liberal system which can undo the damage.   vi) Planning, in the liberal sense of the word, means indicative planning of and for liberty leading to a minimum or limited government. A strong vested interest has developed in the existing system where the public sector has become the private sector of the politician, the bureaucrat, the trader and entrepreneur who thrive on it and the disciplined worker with the consumer, left to fend for himself and live in a despondent milieu of 'choicelessness' and resulting 'voicelessness’. vii) With this undogmatic approach towards the role of the State in the economy, liberals do not see the relations between the private and the public sector in a given economy and at a given time as static or final. Whilst the State or local authorities can be at times forced by their obligations to public welfare to take over economic activities, there must be a constant review of the public activities, to decide which of them should be returned in some form to private enterprise or to voluntary organisations.  viii) The corrective role of the State must not make everybody dependent on it. The main dangers inherent in an overextended welfare State are: - It makes people dependent on the government and bureaucracy, thereby reducing their sense of responsibility and their freedom; - It creates an expanding bureaucracy which inclines to grab power for itself which is detrimental to the national economy, increasing waste and corruption. - by taxes or by waste, it subtracts too large a portion of the national income from the growing needs for productive investment , research and development; - it can feed inflation and, therefore, make employment and investment more difficult. ix) Liberals believe that taxation should be fairly balanced between the needs of the individual and the needs of society for saving and investment. Taxation should, therefore, play a positive role in encouraging enterprise and in ensuring a greater equality of opportunity. x) To try to eliminate poverty and social injustice is not to accept egalitarianism viz. the abstract right to rigid equality of conditions for all, independent of talent, work or forethought. While liberals strongly support measures to reduce differences in wealth, to protect each citizen and to increase equality of opportunity, they decidedly oppose egalitarianism which degrades the individual, whereas the recognition of merit in conditions of social justice is stimulating.  The Test of Character  India's development by a democratic and liberal philosophy and action presupposes and requires that the elected representatives firmly believe in integrity and competence. India also needs men and women who uphold values and excellence, protect public interest, whose motivation is achievement - not power - and whose faith is outside partisan politics. To develop such men and women with such faith and principles is the real task and goal before liberals. If India has to reach its full potential, the test of Character is of prime importance.  Access/download the pdf version of the manifesto [here](https://indianliberals.in/indian-liberal-group/manifesto-1985.pdf). --- ## [Musing] Marx and Theory of Value URL: https://indianliberals.in/musings/marx-and-theory-of-value/ ### Body Marx's theory of surplus-value is not the result of unbiased research. Marx knew what he wanted to prove. What he wanted was to unmask exploitation under capitalism but the economic development made by capitalistic countries has falsified the very basic structure of Marxism. The following is an article written by **Prof. G N Lawande** in November 1962 issue of The Indian Libertarian, an independent journal of public affairs. In the article, Prof. Lawande provides a critical analysis of Marx’s labour theory of value. At present that there are many in our country who believe that capitalism has failed to deliver the goods and the only remedy to overcome the evils of capitalism is to adopt socialism. On the basis of this assumption, our government has adopted a socialist pattern of society as one of the objectives of our Five-Year Plans. Karl Marx was the first economist to give us a systematic analysis of socialism. There were other economists but they were called Utopian Socialists. Marx was the most powerful of all critics of capitalism. At present many have accepted Marxism as the gospel of truth and have embraced it as a religion, “which promises paradise on this side of the grave”. Marx’s critique of capitalism is based on the idea that there is no harmony of interests as believed by classical economists. Marx “conceives of economic life in terms of conflict of interests between owners of property who do not work and workers who own no property”. He wanted to show that the capitalist process was the process of exploitation of one class by the other and that the economic consequence of this exploitation will ultimately destroy capitalism. The economic theory which explains this process of exploitation is the theory of surplus-value which in tum is based upon the labour theory of value. Marx begins his labour theory of value with the analysis of a commodity. In order to maximise his profit capitalist is spending money on labour, transforms labour into commodities and sells these commodities for a larger amount of money. This can be expressed as M—C—M’. The difference between M and M’ Is the surplus-value, the result of exploitation. According to Marx, this kind of exploitation is attributable to the variable capital i.e. the wages of labour because the constant capital i.e. machinery does not undergo any quantitative alteration of value. Marx defines a commodity as an article which has utility and is the result of human labour and that it is produced for sale in the market. One can easily see that Marx excludes gifts of nature which have exchange value. Marx argues that because as use-values commodities are of different qualities the exchange value cannot contain ‘”an atom of use-value”. From this, he has drawn the uncalled-for conclusion “If then we leave out of consideration the use-value of commodities, they have only one common property left, that of being products of labour”. It must be pointed out here that there are certain other qualities which are common to commodities, namely that they are scarce and secondly that they are the products of the scarce factors of production and not mercenarily of labour alone. Marx bad Ignored the simple fact that commodities which were not the products of human labour but which have exchange value and this he did so because he wanted to support the labour theory of value of Ricardo in order to prove exploitation in capitalism. In the words of John Robinson, “Marx wanted to keep insistently before the mind of the reader a picture of the capitalist process as a system of piracy, preying upon the very life of the workers.” Marx did not realise the fact that the labour theory of value was unnecessary to support the conviction that capitalism is mainly a system of exploitation. It is in the words of Lerner “an unfounded dogma that, unless we go in for all this rigmarole about value, we cannot say that capitalists get part of the social product without working”. “Marx’s assertion that the exchange value of a commodity is determined by the only property common to all i.e. abstract human labour, is entirely arbitrary. Its fallacy is revealed by even the most superficial observation of how prices are actually determined on the real markets of the capitalist economy. Nowhere do commodities exchange according to the amount of abstract human labour contained in them. The exchange value of commodities is determined by conditions of demand and supply and, in equilibrium by production costs provided that the commodities in question are the result of production. Production costs do not consist of wages alone; they consist of anything which is needed, is scarce and commands a price. Labour itself is a factor supplied in an infinite variety of qualities reducible to abstract human labour only by market forces”. Though Marx Insisted upon the labour theory of value in order to prove the exploitation process in capitalism yet he returns to market conditions of demand and supply when his labour theory does not offer him any solution. He admits: ”that in order that a commodity may be sold at its market value, that is to say, in proportion to the necessary social labour contained in it, the total quantity of social labour devoted to that total mass of this kind of commodities must correspond to the quantity of the social demand for them meaning the solvent social demand.” From this, it is quite clear that Marx throws his labour theory to the wind when he does not derive any solution from it. While elaborating his labour theory of value to determine the exchange value of commodities Marx points out that only socially necessary labour should be counted. To find out the socially necessary labour time the following points should be kept in mind, namely, the normal conditions must be given. Labour must be supported by machinery. Secondly, the product must be in demand. Labour cannot be called socially necessary labour unless the product is demanded by the people. Thirdly labour time includes the past as well as present labour. Lastly socially necessary labour time is the time spent by labour possessing the average skill and working with average intensity. Skilled labour should be reduced to average labour. Marx admits that there must be social demand for the product in order to define socially necessary labour. If the supply of a commodity is greater than demand for it then it cannot be sold at a price which corresponds to the socially necessary labour time and the production must be contracted and on the other, if the exchange value of commodity exceeds the value of the labour contained in it must be expanded. Marx did not pursue this matter further because It endangers his labour theory of value. “The exchange value of labour must not be derived from the exchange value of its product if the labour theory of value and the theory of surplus-value are to be maintained. As soon as the relative scarcity of the product and of the factors of production are admitted as determining factors the whole labour theory of value becomes superfluous and is exposed as an excessively weak foundation of the theory of capitalist development. “Some critics have pointed out that the prices do not in capitalist economy correspond with Marxian values which Marx was mainly concerned to analyse. They find a contradiction in the analysis. To Bohm Baerk and Pareto this contradiction is fatal to the whole Marxian theory since it appears to them that Marx’s solution Is logically unsound. To Bernstein, the contradiction reduces the Marxian concept of value to nothing more than a reality but only as a theory of natural right or a mere standard of comparing one type of society to another. To Joan Robinson, the contradiction reduces the theory to mystification and metaphysics. Though the labour theory of value as analysed by Marx does not explain existing price relations in capitalism yet Marx maintains that his theory can be applied to explain exchange values in planned economy when he says, “only when production will be under the conscious and prearranged control of society, will society establish a direct relation between the quantity of social labour-time employed in the production of definite articles and the quantity of demand for them. It may be for this cryptic remark that our government has adopted a socialist pattern of society as one of the objectives of our plans, which has resulted in the expansion of public sector at the cost of the private sector. Our economic progress cannot be accelerated unless we reverse this policy and give a proper role to the private sector in the economic development of our country. Our progress cannot be based on Marxian analysis which is a myth, and not a reality. Marx conceived his theory of surplus-value before he worked out his theory.” He knew the result he wished to obtain and must obtain, and so he twisted and manipulated his patent ideas and logical premises with admirable skill and subtlety until they actually yielded the desired result in seemingly respectable syllogistic form”. His theory of surplus-value is not the result of unbiased research. Marx knew what he wanted to prove. What he wanted was to unmask exploitation under capitalism but the economic development made by capitalistic countries has falsified the very basic structure of Marxism. Access the original text **[here](http://v2.indianliberals.in/~_admin/pdflanguage?id=2036209718.pdf)**. (page 9) First Published in the Indian Libertarian in November 1962. Other editions of the publication can be accessed at [Indian Liberals](http://indianliberals.in/), an open, multilingual digital archive committed to preserving liberal voices in the Indian public sphere. --- ## [Musing] Corruption of Thought URL: https://indianliberals.in/musings/mavenkata-rao-corruption-of-thought/ ### Body This is an excerpt from an article written by M A Venkata Rao for the September 1958 issue of The Indian Libertarian Journal. In the article, Mr Rao explains how Marxist ideas have corrupted public discourse in favour of statist interventionism and emphasises the need for intellectuals to seek and propagate the truth behind harmful policies to purify public opinion. “But in addition to such academic functions performed by trained persons in existing institutions, there is a dire need for a group or groups of thinkers who will devote themselves to applying pure thought to the stream of ideas coursing through the public mind, influencing public policies and creating dominant centers and streams of tendency in ideas. The climate of thought and opinion, imagination and sense of values in which the modern world lives has been the creation of Eur-American experience and thought through the centuries. India has taken this body of ideas and values over into her social life and plans of reconstruction without proper assimilation. Indian thinkers have no doubt done a certain amount of thinking about social problems. But it is all too little and too superficial. It has not enabled Indians to relate the new ideas to their own experience today and their inherited traditions and standards of judgment and values. Hence we find hasty policies being introduced by the ruling group. During the life of Gandhi, older ideas of life’s values were predominant though he stimulated much thought on all matters of current reconstruction. But today we find the current of _Leftist thought_ dominating everything and forcing the pace in directions that have already produced a reaction in Eur-america and are under strong criticism. We are taking over the cast-off clothes of the West!…” _Access the full document [here.](http://v2.indianliberals.in/~_admin/pdflanguage?id=654359818.pdf)_ _First Published in The Indian Libertarian – September 1958_ _Other editions of the publication can be accessed at [Indian Liberals](http://indianliberals.in/index), an open, multilingual digital archive committed to preserving liberal voices in the Indian public sphere._ --- ## [Musing] Minoo Masani on Liberalism URL: https://indianliberals.in/musings/minoo-masani-liberalism/ ### Body _Produced below is part of an essay by Minoo Masani, published in the 1970. The essay was originally published by the Indian Liberal Group, founded by the author.  Among the most prominent proponents of classical liberalism at the time, in this essay, Mr Masani outlines the essentials of Liberalism. The original publication can be accessed on the [Freedom First website](https://indianliberals.in/periodicals/freedom-first/). _The word "Liberalism" derives from liberty. In other words, the individual is in the centre of the picture. Society is there to serve the individual and not the other way round as certain other systems of thought like communism or socialism try to make out.  The essential elements of Liberalism are all-pervasive and touch every aspect of life. Insofar as matters of the spirit are concerned, tolerance, particularly tolerance of dissent, is basic. Whether an issue is religious, communal, regional, national or pertains to small groupings like caste and linguistic groups, tolerance of the other point of view and willingness to argue about it are of the essence of Liberalism. Insofar as religion is concerned, Liberalism is not anti-religious but it is non-denominational and perhaps sceptical. A good Liberal does not attack all religions equally as a 'secularist' would do. A good Liberal would tolerate and respect all religions equally. In that sense, Gandhiji's attitude to religion was much more liberal than that of those who call themselves 'secular' and who look at all religions with an equally malevolent eye. The Indian Constitution is, in that sense highly liberal and extends equal respect to all religions and religious institutions.  **Pragmatism ** Another basic characteristic of Liberalism is its pragmatic approach to whatever problem there may happen to be at a particular time. The Liberal does not approach any problem with a dogmatic or preconceived attitude. He is open-minded on all issues. Thus, for instance, in so far as democratic socialism is concerned, the Liberal would be quite prepared to accept a large dose of State control as the circumstances of a particular country, case and time may warrant. While holding the view that competition, consumer preference and the laws of the market should predominate, the Liberal is flexible about the exact nature of the mixed economy which would be desirable in a particular context.  **Pluralism ** The Liberal is of necessity a pluralist, that is, he does not accept the predominance of any one line of thought or dogma or even one class of society. In the Liberal's mansion, there are many chambers and there is room for everything. The Liberal, therefore, believes in a pluralistic society where there are checks and balances between different organs of government, such as the executive, the legislature and the judiciary. In a federal form of government, there have also to be checks and balances between the federal government on the one side and the state government on the other. ln the case of countries with multi-religious, multi-ethnic and multilingual groups, such as India, the Liberal believes in the protection of the rights of the minorities. ln the conflict between the individual and the state, there should be fundamental rights for the citizens with an appeal to the Courts of Law. There should be a separation of political and economic power. In other words, the Liberal believes in limited government. “Render unto Caesar the things that are Caesar's, and unto God the things that are God's”. God, in this case, is the conscience of the individual.  The Liberal is never a determinist. He never says that such and such a thing is bound to happen, as does the Marxist. All he can say is that, on the basis of a rational analysis, certain things are likely to result if certain things happen.  **Justice And Modernity ** The Liberal stands for justice for the underdog, whoever he may be. Thus, he is for equality of women with men, though he may not be for Women's Lib with all its aberrations. The Liberal stands up for the rights of children and decent treatment for them. So too, the Liberal pleads for sympathy for the criminal and the odd man out.  The Liberal is a modernist. He is an advocate of change. He welcomes and cheerfully accepts modern technology with all its implications. He stresses the role of managerial skills in industry and business and other walks of life. He accepts the importance of science in modern society. It is not an accident that technology only thrives in freedom and, where freedom is denied to the scientist and technologist, there is stagnation.  ln the conflict between modernism on the one side and obscurantism, whether that of the nation, caste or religion on the other, the Liberal is on the side of modernism and change. The Liberal is not against tradition. On the contrary, the Liberal respects what is good in the tradition of people and seeks to build and change on the basis of the tradition. ln that sense, the Liberal is not an incendiary or disrupter but a constructive element of change.  **"Bread Or Freedom?" ** The Liberal rejects the false antitheses between freedom and bread which the communists and the fascists always pose. They ask: "Do you want bread or freedom?" As if we have to choose the one or the other. As if, when you have freedom, you don't have bread or, to have bread, you must give up your freedom? Now this is a huge hoax. Because, actually you don't get bread except through freedom. There is no known instance in human history where a country of slaves get bread. Now, by bread, we don't mean only bread. By bread we mean the good things of life - the material values of life, consumer goods, as we call them. There is no known example in human history till this day where, by denying people freedom, you give them a prosperous life. On the contrary the 'Affluent Society' comes only where there is maximum freedom.  Which are the countries where you have the most bread, to put it like that, that is, the best time? Obviously, the U.S.A. leads, Canada, Australia and New Zealand come very close, then come the Scandinavian countries of Sweden, Norway, Denmark, then comes Switzerland, then you get West Germany, France, Italy, Japan and so on. Right down at the bottom along with us, you get the Soviet Union ahead of us, and China below us. In other words, when you do deny people freedom, you take away their bread also. That is natural. Why should slaves be well fed? Why should any government feed its slaves well? The Egyptians, who used slave labour to build pyramids, did not treat them well. They flogged them until they built the Pyramids and died in the process. It is only the free man who has a right to ask for bread. Because he has the right, he has got the strength, he has the vote, whatever you like to call it. **A Free Economy ** A free economy therefore means that government has to play a rather limited and restricted part. Social control must be limited to a minimum. The whole idea of control is to interfere with people when something is going wrong. You stop a man from stealing, you stop a man from hitting somebody else, you stop a man from cheating somebody else, you stop an employer from cheating his worker - that is fair. But you don't stop a man from doing something which he should be doing. So controls are only police measures to stop somebody from doing something he should not. The government should not be like the mother who told the nanny: "Mary, go and see what Johnny is doing and tell him not to"! Johnny should only be stopped when he is really doing something which he shouldn't.  The second characteristic of a free society is that "the consumer is king". Everything must be done to serve the needs of the consumer, not of the industrialist, not of the businessman, not of the factory worker, but of the man who consumes, because he is the ordinary citizen. We all consume. There is not a single human being in India today who doesn't consume. He would be dead if he didn't. We consume, you consume, our children consume. Now what does "the consumer is king" mean? It means that the consumer must determine the pattern of production. The consumer must tell the industrialist what to produce and what not to produce. The consumer can do this by his purchasing power, by the little money in his pocket. The industrialist or businessman only produces what he thinks will make a profit. In other words, if there is a demand for a commodity, you produce it. If there is no demand, you are a fool if you produce it because nobody will buy it and you will lose your capital. In this way, the smallest consumer can determine the pattern of production in a free country.  Every time we go shopping, we cast a vote. As you buy a ticket to back a horse, so you go to a shop and say "I want Hamam" or "I want Liril", or whatsoever it is. You cast a vote for that particular brand of soap against another brand, just as you vote for the Congress Party and not for me, or just as you back one horse and not another. Now, all these preferences for soaps and perfumes, for bread and biscuits and cakes, and whatever else you like, are totalled up on the economic tote and, by looking at the economic state, the business community and industrialist decide what is popular, what is favoured. They shift their production according to the demand.  That is what consumer being king means. It has led to the highest prosperity known in history, the highest standard of life and also of equality of opportunity and status. This is a paradox. The countries where there is greatest equality - there is nowhere perfect equality, nor can there be - but wherever there is equality of opportunity and of status, it is in the capitalist countries. Which is the country in the world where the worker calls his boss by his first name? The American worker never call his boss Mr. so and so. He always says Tom or John. That is the United States. People in Europe are shocked at this kind of "vulgarity" or lack of good breeding because they are still class bound. So you get this strange phenomenon that you get not only the most prosperity but also the greatest measure of equality, which is supposed to belong to socialism, only in so called capitalist, or what I call liberal countries.  Mr. Lee Kuan Yew, the very intelligent Prime Minister of Singapore, who is a socialist came to Bombay to meet Indian socialists some years ago and he asked a question of them. He said: "It is pertinent to ask how is it that in Asia, countries like Japan, Hongkong, Formosa, Thailand and Malaysia, which are bustling free enterprise economies, have achieved success, while countries professing Socialism have failed to produce satisfactory results?"  Prof. Kenneth Galbraith, who was American Ambassador in Delhi and who was an ardent socialist and planner in Mr. Nehru's time wrote a book called _The New Industrial State_. This is what he writes in this book:  "In India and Ceylon, and also in some of the new African countries, public enterprises have not, as in Britain, been accorded autonomy. Here the democratic socialist prerogative has, in effect, been fully asserted. India, in particular, has a legacy of colonial administration, has an illusion of official omniscience which extends to highly technical decisions... The effect in these countries of this denial of autonomy has been exceeding inefficiency in operations by the public firms... In India and Ceylon, nearly all public-owned corporations operate at a loss. The situation is similar in other new countries... One result is, that a large number of socialists have come to feel that public corporations are by their nature, in the words of a minister in the Wilson Government, 'remote', irresponsible bodies, immune from public scrutiny or democratic control".  The reason why this should be so is very simple. The body politic is like our own bodies. It consists of organs developed by society over the last few thousand years since we were primitive apes or beasts. Now as human society develops, it throws up institutions. The Joint Stock Company has been thrown up in the last two hundred years to run business. The Government or State has been thrown up to rule, to maintain order. Our bodies are like that. We smell through our nose, we eat through our mouth, we hear through our ears, we breathe through our lungs, we digest in the stomach and so on. Now what would happen if we tried to distort our organs and asked them to do something different from what they were meant to do. Supposing we tried to breathe through our stomach and digest with our lungs or hear through the nose and smell with the ear? What would happen? It just wouldn't work. That is exactly what happens when we try to misuse an organ of society. Governments were thrown up by society and civilisation to protect the country from attack, to stop one person from attacking another, to see that justice is done. In other words, governments are there to keep law and order, do justice, protect people, protect the country from attack. That is where the basic functions of government stop. When government tries to run a factory and to produce either penicillin or steel or whatever it is, it makes a flop because governments are not made to make profits or to produce goods. Governments are not made to produce anything. Governments are meant to consume things, to keep order and give you a chance to produce. So State Socialism and Communism are a perversion of the laws of social growth. Therefore, they are bound to fail. The conclusion to which one is driven then is that we have got to turn to Liberalism from this barren path. --- ## [Musing] Minoo Masani: Old Liberalism & New Liberalism URL: https://indianliberals.in/musings/minoo-masani-old-liberalism-new-liberalism/ ### Body _Produced below is part of an essay by Minoo Masani, published in the 1970. The essay was originally published by the Indian Liberal Group, founded by the author.  Among the most prominent proponents of classical liberalism at the time, in this essay, Mr Masani outlines the essentials of Liberalism. The original publication can be accessed on the** [Freedom First website](https://indianliberals.in/periodicals/freedom-first/).** Read the first half of the essay **[here.](https://indianliberals.in/content/minoo-masani-liberalism/) **_**The Old Liberalism** Liberalism is making a beginning in India. But this is not the first time that Liberalism has come to India. It came in the 19th century also. There was the old liberalism in India. Its leaders were Dadabhai Naoroji, Ranade, Gokhale, Ram Mohan Roy, Surendra Nath Bannerjee, whose names you know. I saw many of them when I was a boy or a student, attending lectures of Srinivasa Shastri. I remember as a boy playing around the feet of Dadabhai Naoroji at Versova where he was a neighbour of ours. I have seen Dinshaw Vachha. I saw Pherozeshah Mehta. I knew Sapru and Jayakar. They have all gone and the old Liberalism has gone also. It was killed by Mahatma Gandhi. When Gandhiji came on the scene as a dynamic nationalist following Tilak and Lajpatrai, he had no use for the old Liberalism, because the old Liberals were extremely moderate in their opposition to British rule. They were for Indian self-government. As you know, Dadabhai Naoroji coined the word _Swaraj_. But the method of fight was very temperate and very moderate. He joined the British Parliament as a Liberal Member. He argued for India, but was a constitutionalist. Liberals are not people who go to the streets, wreck things, attack people and so on. Even today, they are not. So, being constitutional, they appeared to be terribly moderate. As a young man, I was extremely impatient with my father and liberals of that type for being so slow and gentle about the evil of foreign rule.  **Nationalism** Even today, I am not against nationalism. I have been a very ardent nationalist in my time. But when we become free, we don't need nationalism any more. It is like the measles. When you grow up, you don't have children's diseases like chickenpox and measles. Nationalism is a disease of foreign rule. When somebody is sitting on your chest, you want independence very ardently. You can't breathe without freedom and that is as it should be. But when you are free, you don't have to go on talking about your nationalism. Mature, advanced countries are not very nationalistic. They don't need it. Go to Switzerland. They are a very patriotic people, but they don't talk about Switzerland being the most wonderful country in the world! They are wonderful, but they don't talk about it. So, as we grow up, there is no need to be juvenile about nationalism. Of course, love of the country must be there. When the country is attacked, we must rush to its rescue. We must make sacrifices for it every day. But we don't want to be chauvinists. We don't have to hate foreigners. We don't have to throw out missionaries. Nationalism, while a good thing, has had its day. We can afford to relax on nationalism. **Ends And Means** Socialism has failed to deliver the goods. It has produced neither equality nor a better life for the masses of the people. The aims of socialism are good: I am still a socialist in that sense. If you put it to me: "Do you believe in Lenin's 'free and equal society' " I will say 'yes'. If freedom and equality are the objectives of socialism, I am for it. But when I find that the weapon that I have used does not create freedom or equality, but creates tyranny and slavery on the one side and inequality and poverty on the other, then I would be a fool if I stuck to that weapon. I am not that conservative that I cling to an out-of-date blunderbuss when the weapon has become obsolete. What I am trying to say is, that the objectives of socialism are still valid, but the methods are lousy. The methods have failed. State planning, nationalisation, collective farming, these are weapons that have been tried and failed and only a stupid man hangs on to a weapon when he knows it can't deliver the goods. We have to be true to the objective, not true to the method.  This I learnt from Mahatma Gandhi with whom I used to argue as a young socialist. He kept on saying that by doubtful methods, you can't gel a good end. Ends and means are meshed, interlinked. The end does not justify the means. We have seen from experience that we cannot gel the good result of a free and equal society by injustice, by regimentation, by oppression, by lies.  **The New Liberalism** So the new Liberalism has come to India after the failure of socialism. It is a fusion of western Liberalism and Gandhi. When the Swatantra Party was formed and I was drafting its programme, that is how I put it in an article in Life magazine - that two streams of thought had gone into the making of this effort, Western Liberalism as they understand it plus the teachings of Mahatma Gandhi.  What are these teachings that we graft on to Liberalism or fuse with Liberalism. First, that ends and means are interlinked; that if we want a decent society our methods must be decent. We cannot create a free and equal society by expropriation, liquidation, lying as the communists claim they can. Secondly, as Gandhiji used to say repeatedly, "that Government is best which governs the least.'' Minimum government. The essential thing is to leave the people free. Thirdly, Trusteeship, that those who have the good things of life, those who have wealth must use them for the good of the community. While we have a good time with what we have, we must not be devoid of a social conscience or a sense of social obligation. Gandhiji called it Trusteeship of the rich for the poor. He said: let every rich man use his wealth. Certainly, let him keep it. Nobody should take it away. But let him use it so that he can have a good conscience that he is doing what he can for those around who are not so fortunate.  Now democracy has its disadvantages. I am not starry eyed about democracy. I realise its limitations, its corruption, its deficiencies. Winston Churchill was a great democrat. He was asked a question about democracy towards the end of his life. He had tasted both the fruits and bitterness of democracy. He had been in political exile for many years before World War II. He was brought in during World War II, and then he was put back on the scrap heap when World War II was over. This is how democracy works. It is just as well. We in this country don't place our great men on the scrap heap and that is why we are going down. After giving a little thought, Churchill said: "Of all the known systems of government, democracy is undoubtedly the worst - except for all the others"! That great Liberal in Asia, Carlos Romulo was once heckled by some communist students, in the University of which he was President, who asked him for a declaration of policy. They asked: "Mr. President, are you going left or right?" Romulo answered: "I am going forward". That is the essence of Liberalism. Neither left nor right, but right ahead. --- ## [Musing] Minoo Masani on Citizenship URL: https://indianliberals.in/musings/minoo-masani-on-citizenship/ ### Body As the recent wave of youth-led protests surge across the country, Indian civil society seems to have come of age in demanding accountability from the government. Political scientists and keen observers have often deplored the mere procedural nature of Indian democracy where democratic participation amounts to the ritual of voting. However, recent mass mobilisations, mostly in urban areas, herald an active civil society, practicing “everyday democracy” in streets. Most notably, the protests are concerned with state coercion and citizenship rights. _Below is an excerpt from the Minoo Masani piece on Citizenship, first published in 1969. In this piece, Masani deplored the inefficient state capacity, made case for a strong but limited government, and exhorted the youth to actively engage with democracy in the domain of civil society. Many of his arguments are still relevant as prescriptions for strengthening Indian democracy._ What are the causes of decay in our public life? I think I would analyse it under three or four major heads. One is the reluctance to be in opposition. Everyone wants to be in power or office today or tomorrow. Normally, parliamentary democracy functions in countries where 40 per cent of the country’s politicians are prepared to be in opposition at any given time. About 60 per cent are in office, about 40 per cent in Opposition. This is the law of democratic politics. But not in India. In India, 90 per cent of the politicians must be in the office at any given time! This, I suppose, was the basic reason why the Congress Party rejected Gandhiji’s advice on the achievement of Independence when he suggested that the Congress retire from political life, become a constructive organisation and that two parties be formed – a radical one under Jawaharlal Nehru, a conservative one under Vallabhbhai Patel. Both sides rejected the advice because both wanted to be in office at the same time. A second basic factor is that the party, which is a means to an end, has become an end to itself. Not only “my country right or wrong”, but “my party right or wrong”. Politics is about power, but power is not an end in itself. Power is for the purpose of carrying out your principles and your policies. Now, it has become power for its own sake; office for its own sake. Nothing is more painful to me than to watch my friends in the office today – old friends of the Congress Party to which I once belonged. A third reason for the decay of our politics is the cult of personality – the preoccupation with men rather than with measures, with personalities rather than with principles. “Will Mr Kamaraj Nadar get into the cabinet” is a question I am asked more often by my fellow intelligentsia than any other question concerning this country. But what does it matter whether Mr Kamaraj Nadar is in the Cabinet or not? Do you think it will make two _annas_ worth of difference to the life of the common man in India? Lastly, there is the fact of an illiterate electorate – not that illiterate people are stupid, but illiterate people are difficult to communicate with since they can’t read, your manifesto doesn’t touch them, you can’t write to them. You can meet only a few persons, you can attend a few public meetings. The radio is under government control, T.V. will be under government control. The channels of communication, the conveyor belt, is missing. This, of course, makes for the quality of the politician being what it is. Now, we as a people have some very strong points. We have love of religion, love of the family, and the home, love of the land, patience, contentment, perhaps even resignation with our individual lot, a high degree of intelligence, strong individualism – these are very fine traits of the Indian character. The full article could be accessed [here](http://indianliberals.in/~_admin/pdflanguage?id=590973500.pdf). (page 51) To read more works by Minoo Masani, [click here](https://spontaneousorder.in/minoo-masani-from-socialism-to-liberal-swatantra-party/). type=content&p=2185). Needs editorial review._ --- ## [Musing] Modern Policing for Modern India URL: https://indianliberals.in/musings/modern-policing-for-modern-india/ ### Body _The following is an excerpt from a talk delivered by Mrs. Maja Daruwala who served as the Executive Director, Commonwealth Human Rights Initiative, New Delhi. The text is based on a talk delivered in Mumbai on 30th January 2009 under the joint auspices of Forum of Free Enterprise, M.R. Pai Foundation, Action for Good Governance and Networking in India, BCAS Foundation, Mahiti Adhikar Manch, Public Concern for Governance Trust and Citizens Take Charge. _A good vibrant stable solid democracy must belong to the people and for this people need information and people need justice. They need easy remedies so that they can enforce their rights. The big issue is of course that the challenges of accessing justice are so large and so much needs repair and remedy that to do anything well needs focus. My focus today is police reform. Surely that will prompt someone to say but what about the Judiciary? I agree we cannot look just at policing if we want to right the whole system. But when the problem is as big as we have in our criminal justice system there is merit in breaking it up to focus on one area. Changes in that area - if it can be brought about - will create tensions in the status quo and have a knock on effect on other areas and hopefully the whole will change.  Few human rights groups presently look at and seek to address whole systems but rather are justifiably concerned with individual human rights violations by police. We (Commonwealth Human Rights Initiative, CHRI) are trying to address the problem of violations through seeking to bring about systemic reforms, particularly in the context of developing countries and certainly in the context of India, which is the crucible of our work.  Police Reforms is really a vital issue and it is desperately needed. There can be little doubt about that. I won't rehearse all that is wrong but suffice it to say we don't deserve the police we have. The proof of this lies in the public's perception of the police as inefficient, untrustworthy and ineffective.  Today, even when the police do the right thing and even when their actions are credible there are few who will believe them. They are seen as the most corrupt agency by the Transparency International. Year after year after year, the National Human Rights Commission's statistics indicate that over 60%, 70%, even 80% of all the complaints they receive are against the police. All the Commissions that have looked into the police reforms say that even when they are trying to be effective 60% of all the arrests that they make are quite unnecessary. So much so that now the legislature has recently felt it necessary to pass a law about how and when the police can use their discretion to make an arrest.  If the public are getting a raw deal the police are too. They have their problems. Some systemic, others to do with outsiders, but a great many brought upon themselves. They too easily allow themselves to be wrongfully used by their political masters and extend too many excuses for doing so. Their unwillingness to face this problem has meant that their operational efficiency has been badly mauled over the years and their chain of command has been broken and compromised by the unconscionable levels of political interference at every level of policing that has come into play. The service conditions their rank and file has to put up with are evidence of poor leadership. The lot of the majority is in desperate need of improvement. Improvements have to go beyond mere hardware and equipment. Attention needs to be paid to fair internal management, honest recruitment, providing soft skills, training and investigation skills and reasonable service conditions: they need specialization and most of all they need the confidence of the public they serve. This is something they are unable in their present situation to get.   But all these deficiencies and difficulties even when taken together cannot be an excuse for the way in which the police function today. I am not talking about large egregious violations that come easily to our minds. They are shocking, shameful and inexcusable. It is true, but here I am talking about day to day performance. Surely we as free citizens of a democratic country, whose taxes pay for policing, can expect the police not to be an oppressive force but an essential service with our safety and security as its core function. The greatest problem of policing today is not that they are unable to be effective in highly dramatic and sensational circumstances like terrorist attacks. But they are not everyday effective on the streets. They are not effective against petty or grave crimes or against individual criminals or organized gangs. They are baffled by the subtleties of white collar crime and don't easily accept that it is their duty to implement social legislation against the traditionally vulnerable groups like women, Dalits and children. They are certainly not effective in punishing their own. If they could do just that much, there would be a high level of trust in the police once again. There would be cooperation and respect from a population that badly wants to believe in the police but simply has no basis on which to do this at the moment.  Even as I am critical of the police I am not against them. They are after all an essential service and provide amazing examples of personal courage in the face of danger. In Mumbai their acts of personal bravery are deeply appreciated and will be remembered long after the recent incidents are forgotten. But frankly, I would rather see an ordinary, average, work-a-day human being working in the police doing a good job and going home to his wife and children than have to look at the coffins of dead heroes. Someone has to look after the public and someone has also to look after the police. That is the responsibility of the government. They are bound to take care of the police, equip them well and make them into an effective service andait is the duty of the public to insist that they get these services.  If there are problems in policing there are also cures. We cannot believe that a solution is impossible. If we did, we must accept that we need to disband the police and start all over again. But in the absence of such radical surgery, over the decades the experts have indicated many practical ways to cure this institution. To devise a cure we must begin with the question: what kind of a police we need in a democracy? What kind of police do we want? Democratic countries need democratic policing. It is true that the colonials left behind a police that was structured for the colonies. But that was over 60 years ago. We cannot keep on pointing to the dead carcass of imperialism and keep saying we can do nothing to change it. If we are retaining an outmoded outdated structure it is because we are comfortable with it.   But there are many alternatives to our present way of policing. We seem to be ignoring them deliberately. For example, the common law countries with which we share a common legal heritage have worked to develop some of the best policing in the world. We need to look at the best and adapt it for ourselves. In a democracy the first thing to recognize is that the police are not mere enforcers alone. They are upholders of the law. There is a difference. Enforcement has the connotation of unquestionable authority. It assumes all power to the police and no challenge to it; the notion of upholding the law adds the dimension that in doing their duty the police must also act always in accordance with the law, never be outside it and ever be answerable to it.  If the police are to be turned from being a force to becoming a service their functions must be restated to take account of many things that today are taken for granted as basic Constitutional assumptions but which had no place in colonial policing. Colonial rule required that the government of the day own the police. The police had to be a force that could quell any rebelliousness in the population. So it had to be extremely hierarchical, over-disciplined and militaristic. White officers from within the power elite had to rule with an iron hand over less trusted 'coloureds' and finally native men, who were stereotyped as less intelligent and essentially untrustworthy occupied the bottom rungs with no hope of ever rising through the ranks to positions of responsibility. The primary function of the police was the maintenance of law and order; prevention and detection of crime was almost an adjunct function and intelligence gathering was prioritized as a means of keeping the rulers informed. This formula was suitable for a numerically small number of foreigners ruling over a vast heterogeneous population.  That model has no relevance today. Today we rule ourselves. Our leaders are our elected representatives. They, as well as ourselves, the people and the police, function under the Constitution. We are all equal to each other and equally bound by it. The role of the State, the police and the public and their relationship with each other is governed only by what is in the Constitution.  According to the Constitution we all have a duty to live by the rule of law. The State's primary duty is to protect life and liberty, ensure each citizen equal safety and security. As an arm of the State, the police has the duty not only to protect our lives and our property but also to protect our liberties and ensure us an environment in which we can enjoy our freedoms optimally. This is the true function of the police in a democratic society. This is the only way of understanding what the legitimate role of police is in a democracy, defining its vision and designing the machinery that can fulfill that role. Once the vision is in place it will tell us what the police organizations, their structures, systems, and their functions should look like so that the vision is best implemented.  It is not as if we as a nation have never thought about these things. We have. State commissions have repeatedly looked at how to remodel policing but stubbornly retained the 1861 Police Act as a template on which to model our present laws. In 1978, after the Emergency, we saw the police acting as prime functionary in the violations and the oppressions of those months. Serious consideration was given to reformulating policing and really good recommendations, relevant even today were produced - in 8 volumes- which examined policing from top to toe. Political considerations again raised its ugly head and nothing was done to implement the National Police Commission's recommendations. Similar State commissions set up from time to time suffered no better fate.  The decay and degeneration of policing was allowed to continue. It remained a fiefdom of whichever ruler was momentarily in power. Crime and uncertainty increased, distrust and civil disorder thrived, until there was and is no power in the State to deal with extremism, militancy, violent fundamentalism, communalism, and other types of social unrest - call it what you will. Decades later prompted by concerned citizens and retired police officers who kept calling for attention to this fundamental area of governance the then Central Government set up more committees. Mr. J.F. Ribeiro, an ally of my work for a long time, was the head of one. Mr. K.Padhmanabiah was the head of another. Mr. Soli Sorabjee was head of yet another. There are even now other committees and sub-committees of the Police Mission looking at the same tired issues. A cursory examination of all of them shows their agreement on core issues and the similarity of recommendations, with some variations, can be the basis of serious informed public debate and sound beneficial changes.  In the meantime for over ten years, Mr. Prakash Singh, a retired police officer has been before the Supreme Court in a public interest litigation that basically asks that the sensible recommendations of the National Police Commission be implemented in order to improve the police's ability to do their job better.  Finally in 2006 the Supreme Court directed the Central and State governments to make six major changes that would - if taken together in the spirit of the judgment - tackle the major ills that plague policing today. Simply put, these ills relate to: ensuring the police are at arms length from illegitimate political interference, have professionalized internal systems of management based on transparent criteria, and are much more accountable.  The Court's orders include a fixed tenure for the head of the police and also indicate how he should be chosen. This is in order to introduce the notion of merit rather than patronage and a scheme to strengthen this most important office. Their directions also indicated the way other seniors should be appointed. To make sure that they were selected on a combination of merit and seniority the Court said that each state should have a State Security Commission.  The State Security Commission is a body that is made up of individuals who are independent. They can be experts, can be from the ruling party and most importantly must also have in it, the opposition. This is to ensure that policing is a bi-partisan subject outside the exclusive ruling party zone. Having an independent body with properly appointed people, that creates a panel from which the Chief Minister can choose his chief and which collectively with government and police lays down the overall policing policy for the state and its annual policing goals, makes policing a non-party organization whose unbiased character people can have faith in.  Those who resist the creation of a buffer body say that this amounts to interference with the functions of the elected representatives who have primary responsibility of providing safety and security and should therefore have a completely free hand in how they handle the police. This is a misreading of the intention of the Court, which by the way only reflects the arrangements which are in place in jurisdictions which have very well respected police services.  No police with all its powers to use authorized violence can be completely independent of all executive control. That would be wrong and was never the Court's intention. The responsibility of the political executive and the operational responsibility of the police are interlinked spheres. But the control and supervision of the police by the political executive has to be conditioned so that each one's powers and spheres of responsibility are specifically put down in a way that there is no room for ambivalence or overlap. The Legislations of Australia, New Zealand, Ireland, U.K., South Africa, all lay down clear spheres of responsibility for politicians, bureaucrats and police chief. This is the kind of effort we have to make. It is not enough for legislation to make general statements that leave wide discretions open. Today when something bad happens, we don't know whom to blame. Blame shifts. Accountability suffers and comes to rest on the most powerless. The Chief Minister shifts his problem on to the Home Minister; from there it will likely move to the Home Secretary and then through the police hierarchy. Indeed a very bad precedent has come up of blaming the constable or the mid level policeman and to insulate the Chief of Police from his responsibility. Few heads roll. No lessons are learned and the public remains as insecure and un-served as ever.  The new systems directed by the Supreme Court - and based on various earlier recommendations - is intended to make sure that every single police officer is working to the maximum of his ability to provide day to day security. Not just when, and only when unusual circumstances - like terrorist attacks or communal riots - happen. Good policing is intended to protect every person everyday: the woman being teased on the street or assaulted at home, the worker going for night work without having to fear for safety or attacks on her person, the Dalit, the migrant, the stranger, the foreigner, the tourist, the minority, must all have a high and equal level of assurance that they can go about their business in an atmosphere of certain safety. This is not the case today and the outcomes are plain to see.  The Supreme Court also recognized that the police themselves were fearful and unhappy within their own hierarchies. It recognized that merit is not respected, that seniority goes by the board; that to accommodate discontent the government creates new posts, without specific and clearly defined mandates, until nobody is certain of what their jobs or their authorities are. No one would tolerate such fuzziness in the corporate world.  To curb ad hocism and patronage the Court has said that there must be established within the force a Police Establishment Board with four people from within the police including the Chief of Police on it, so that promotions are done in a transparent manner against laid down criteria without undue influence peddling and extraneous considerations seeping in.  In order to address the issue of too little police accountability for both everyday performance and serious violations and abuse of power the Court directed states and the Centre to set up Police Complaints Authorities at state and district levels. This is a body of civilians who may be experts or lay people but should be made up of a diverse group of credible people from various segments of society. Its mandate is to examine complaints from the public against the police for a variety of criminal and disciplinary acts. Police Complaints Authorities can be recommendatory or binding.  Unfortunately, in its order the Court did not specify that these Complaint Authorities must be independent civilian authorities. Nowhere in the world do Police Complaint Authority's members include either sewing or even retired police officers. Occasionally you may find one but you can be sure that people will criticize. But in the few states which have set up these Authorities there are inevitably policemen on it which means that you have created nothing. Simple logic indicates that the police have their own independent internal machinery for correcting the police and the new Authorities were intended as outside oversight bodies. This additional level of oversight was necessary because internal mechanisms do not at all function or function very badly or function only to correct small and minimal disciplinary proceedings. They also function behind closed doors and do nothing to persuade the public that there is real accountability for police misbehaviour.  The Police Complaints Authorities presently set up are nascent. They are not fully provisioned and are hardly known. Their design is faulty and their powers weak. Any impact may take a long time to discern. Has the Supreme Court's scheme for all round improvement in policing been embraced with respect that must be accorded to the Apex Court? The answer is no. It is now nearly three years since that September 2006 ruling and everywhere there is resistance to bringing about beneficial changes. To get out from under the Supreme Court's orders some states have legislated pretending to obey the Court's orders but in reality subverting and diluting them so they will have little corrective value. Some States have taken the opportunity to introduce retrograde legislation that leaves the 1861 colonial model behind in its unsuitability. Other states have protested the Court's orders and sought a review. The Court has refused to countenance this.  The Centre, which could have provided a reformative model for others to follow has instead been completely disobedient to the Court's orders and done nothing toward obeying them. In exasperation the Court has set up a monitoring commiitee under Justice K.T. Thomas, a former Supreme Court Judge. Along with two others he is to monitor what each state is doing and to report back to the Supreme Court. We at CHRl have analysed the compliance of every state's behaviour up to the present and provide the Committee with briefs on the state that is under review. The Committee which has a two year mandate will present its interim findings 1 to the Court in July or so.  While the matter meanders through the courts and the bureaucracy, hits hurdles and takes steps backwards, forward and sideways toward any discernable progress, time is flying and with it people's discontent with policing. As well, the police are continuing their deterioration through deliberate neglect.  A few days ago I read a report on torture in India. And I thought I was reading a current report when I found that it was dated 1903. We have to recognize that we have had the opportunity in Independent India to do something but we have never done it. It is my view that nothing will change or gather speed unless there is a public groundswell for reform. This in turn will not happen unless there is knowledge about what reform means and how it can be achieved. At the moment there is silence.  It is particularly striking in Maharashtra where the recent bombings of the train, the station and the hotels should have spurred people to ask for reformed policing and question what has been done to improve it. Queries to the Maharashtra Government indicate that, to date, there has been neither compliance with the Supreme Court's orders nor any moves to change things outside of that. The furthest the Government has gone is to have internal resolutions saying that they will set up a Security State Commission and all the three bodies that the Supreme Court has asked for.  Several people have gone to the Bombay High Court in public interest litigation. The judiciary has set up what is known as the State Security Council under Justice Shri Krishna. But that is a Council set up by the Court and has nothing to do with what the Supreme Court has said. In the meantime the Maharashtra State has set up a State Council on its own. It has over 60 people on it from different walks of life. At present one meeting has been held. The ungainly number and broadly worded terms and conditions do not hold out the hope of developing concrete steps towards ensuring better safety and security for the Mumbaikar.   It is important to understand where the resistance to reform is coming from so that one can counter it. First the resistance comes from politicians. They do not want their unfettered control over the police to be curbed but want to retain their present ability of using them for narrow political ends and to intimidate enemies and stifle dissent. To my mind this is a short sighted view and does not in the end benefit politicians. Increasingly as each government changes, the ones in power level the most horrendous charges of rape, murder, corruption, against the opposition. When their five years are up the process reverses itself with the obliging police now doing the bidding of another set in power. The upshot is that the criminal justice process has become a locus for political bargaining and not for the delivery of justice.  Then there is resistance from within the police themselves. They want better conditions, less interference, perhaps, but they don't want accountability and many are simply comfortable with the present system of patronage, unevaluated performance and unchecked power. There is also resistance from the bureaucracy. There has been a traditional rivalry between IAS and IPS and an increasing inter-service tension which sees any improvement as a gain for one service that will threaten present power structures by removing the police from the clutches of the bureaucracy. So, maintaining the status quo becomes a goal in itself.  I must immediately add here that this analysis is a broad brush and does not take into account those voices from within each system of government that do want change and will argue for it. It is just that the space for this is limited and the voices still muted. Finally there is ambivalence within the public itself. Everyone wants better policing but differ on what that may mean. Some want a police that will in all circumstances uphold the law, provide a service and enhance the environment in which we can realize our human rights. But there are many others who are quite content with the way the police is because there are favours to be bought, influence to be pedalled and also because many of us - within the middle class particularly - like the notion of 'tough policing' 'Tough policing' is usually a nice way of saying there is a willingness to go along with illegal policing if it eases the way and so long as it does not impact on you yourself in a negative way.  My talk today is intended to be a call to action. Mumbaikars deserve a better police than they have at present. They deserve that the government acts to ensure future safety and security even if it could not provide it earlier. Their efforts and actions have to go beyond merely giving police arms and ammunition but insisting that underlying systems change and be responsive to the public's needs and rights. I am not sure we have evidence of that intention today. --- ## [Musing] My Idea of A Welfare State - B.R. Shenoy URL: https://indianliberals.in/musings/my-idea-of-a-welfare-state/ ### Body _Produced below is an essay by B.R. Shenoy, published in a December 1957 issue of [The Indian Libertarian Magazine](https://indianliberals.in/content/the-indian-libertarian-december-1-1957/). The author was an Indian economist and notable critic of the India's five-year planning model. A proponent of individual freedoms, in this essay, Shenoy outlines the characteristics of a true welfare state. _The accent of the welfare state is, clearly, on welfare as there can be no welfare state without welfare. The question at once arises, whose welfare does the welfare state aim at achieving? The answer, probably, would be the welfare of the common man. If it is objected that the common man is very hard to find, we would, probably, amend our answer and say that the objective of the welfare state is the welfare of the masses of people, the maximum of well-being of the maximum of people.  At first sight this answer might seem to satisfy the question well enough. But it really begs the question. We have said little more than that welfare is equal to well-being of man. We are still far from formulating the issues. If we wish to be scientific and logically consistent, we cannot run away from certain fundamentals of the problem of welfare. Human well-being is inseparably bound up with the immediate and the ultimate purpose of human existence. We cannot escape the question, what are we here for? Are we here to worship on the altar of man's standard of living? Would it be right to say that the purpose of human existence is to live a life of carefree comfort? Much of our thinking to-day seems to move in that direction.  **What Is The Aim Of Life ** What has Gandhi to say on the subject? He is always a good and safe guide in these matters. Gandhi had his feet firmly on Indian soil. His thinking went to the roots of our tradition. He has answered the question of what is the purpose of human existence in the Introduction to _The Story of My Experiments with Truth_. Says Gandhi: "What I want to achieve- what I have been striving and pining to achieve these thirty years is self-realisation,.... to attain Moksha. I live and move and have my being in pursuit of this goal. All that I do by way of speaking and writing, and all my ventures in the political field, are directed to this same end" (p. 5). Since it is Gandhi that writes, he means every syllable of what he has recorded. The purpose of all his activities, public and private, political activities not excluded, was the attainment of Moksha. This goal of life conforms to the traditional teachings of this land.  The problem of human welfare, of how best to cater to it, is not a recent problem. It is as old as the human race, and, therefore, dates back to the early phase of this Manvantaric age when man, with the lighting (activation) of Manas, which had been hitherto latent, acquired self-consciousness. Man has been since pursuing the goal of his life, the Compassionate Ones who attained the goal helping the rest in the great task.  Our institutions and our way of life were attuned to it. The attunement was done scientifically and with rigorous logical consistency. Our daily duties and responsibilities on the mundane plane broadly fall under two categories, the wealth or income acquiring (Arthic) activities and the want satisfying (Kamic) activities. Since both activities had to be regulated as to attain Moksha, their roots had necessarily to be well-grounded in Dharma. For speeding up the inner journey towards Nirvana, it is important that we acquire wealth only in consistence with Dharma and Dharma alone should govern the propensity for the satisfaction of wants.  Where does the State fit into this context? It is obvious that the State has no jurisdiction over the inner changes leading to self-realization, Nirvana. But the remaining three, Dharma, Artha and Kama, the thri-vargas, fall within its purview. The responsibility of the king, who symbolised the State, was to propagate the thri-vargas, subject to the overriding requirement that the Arthic and the Kamic activities were always conditioned by Dharma. It is significant that, under Indian polity, sovereignty lay, not in the people, but in Dharma. The concern of the executive wing of the State, the king and his ministers, was to ensure that the rule of the sovereign Dharma prevailed. Dharma, like Truth, is indivisible and all pervasive. The state enforced the Rule of Dharma in all the activities of the people coming within its ambit, in the administration of justice, in the collection and disbursal of revenues, in the defence of the country, and in every other of its functions and responsibilities.  A state where the Rule of Dharma prevails, is a welfare state, the objective of welfare here being the creation, to the extent permissible on the governmental side, of conditions facilitating the attainment of the goal of life by individuals. How far can such a state go in developing its public sector of economic activity, to borrow a familiar phrase of present-day discussion on planning in India? It is relevant to quote here that tradition enjoins an individual to select a vocation which is homogeneous with his nature. **The Essence Of Welfare State ** It follows that under the Indian concept of a (welfare) state each individual should be left free to pursue his lawfully chosen vocation. Free enterprise, subject only to the Rule of Dharma, is an essential feature of the economic set-up of the (welfare) state. As the injunction applied to the king and the ministers, it follows, too, that the state, consistently with the Rule of Dharma, cannot enter into the sphere of economic activities, which is the sacred domain of the private sector, even if the state was capable (which is a matter of serious doubt) of more efficient production than private firms. The Rule of Dharma would restrict governmental activities to public utilities, basic industries (which the private sector is unable to undertake), basic needs of development, industries of strategic importance from the standpoint of defence, and the like. In particular, a policy of indiscriminate nationalisation of private enterprise was contrary to this doctrine. **Minimum State, The Ideal Of India ** This suggests that the Indian concept of a welfare state was a minimum state. It was wholly antagonistic to a garrison police state. The latter rests on violence and _Adharma_; under it the individual is coerced into yielding to the will of the state, which, in practice, means the tyranny of an individual or a group of individuals, who are, for the time being, in possession of the machinery of state.  The concept of a welfare state to-day is linked up with the provision for all citizens of "minimum" standards of consumption. It provides (or aims at providing) minimum standards of food, shelter, education, health and income (either by way of minimum wages or public assistance for the destitute). The minima are a floor below which no individual would be allowed to fall. In an economy with an expanding national income, the minimum standards would be progressively lifted up.  This concept of a welfare state does not necessarily conflict with the Indian concept. It is the responsibility of an enlightened state to provide relief from abject poverty, which causes starvation or such other suffering. Even in the richer economies, there may be people in need of such relief. But how far shall the state go in lifting up the minimum for all? Will it be the responsibility of the state to provide the more unfortunate families of the nuclear age with motor cars, at least scooters, washing machines, refrigerators, telephones, television and radio sets, and the like? Or would we say, that to do so would be  going too far. I wish to suggest that this difficult problem may not confront the welfare state of the Indian conception. The limiting condition of the Rule of Dharma will prevent the state from acquiring such large revenues as vulgar charity of this character may demand. Already in U.K. the national government acquires over 25 per cent of the national income in furtherance of the concept of the welfare state and in U.S.A. over 30 per cent. The need for ensuring minimum standards of consumption is great in under-developed economies, like ours, where the level of consumption of even foodgrains by the masses of people is below nutritional standards. But this cannot be done by legislation alone, Indian national income at the close of the First Plan averaged Rs. 23.42 per month, per individual. The corresponding figure for U.S.A. was Rs. 775 and for U.K. Rs. 413. It is not possible to prescribe, with any hope of successful implementation, minimum consumption standards before the physical volume of output would permit such benevolent action.  **The Lurking Danger ** The pressing necessity for a speedy increase in national output has presently rivetted our attention on a successful execution of the Second Plan. An overriding emphasis on accelerated economic growth is beset with serious dangers to the welfare of the individual in the sense of maximum freedom to arrange and pursue his own affairs in his own way. This may lead, step by step, to a totalitarian state, so that, if the tendency was not curbed soon enough, we may be cutting at the very roots of welfare in an effort to accelerate the pace of attaining it.  Economic development was a function of invested savings. Savings were both limited and slow to grow in a democratic set-up, where the individual, after payment of tax, had full sovereignty of disposal over income. As habits of consumption changed slowly, savings in the short-run were a more or less rigidly fixed percentage of the national income, the change in the rate of saving responding only to changes in real national income. During the five years of the First Plan period the rate of saving in India rose 6 to 7 per cent of the national income. The rate of investment which this permitted, yielded but a commensurate rate of growth of national income, the rate during the First Plan period being 3.5 per cent per annum.  Communist experience has shown that it is possible to accelerate the pace of progress by an expansion of the public sector to cover the entire economy. The state would, then, take over from the pricing system the allocation of the resources of production among the several trades and industries, such allocation being effected arbitrarily by the Planning Commission. By reducing the allocations to the consumption trades sufficiently, it becomes possible, under this arrangement, to add to the quantity of saved resources and implement a plan of development much more speedily than a democratic set-up would permit. According to official statistics the rate of increase in national income of communist economies varies between 12 to 16 per cent per year. The rate of increase in U.S.A. during the past decade was 4.9 per cent. Under communist technique it may be possible to implement the Second Plan even without foreign aid.  **Guided By Communist Advisers ** In the formulation of the Second Plan we have availed of the advice of technicians subscribing to the communist philosophy of life. We are not without Marxists in the Administration and among our advisers. Some have advocated, in the interest of speed in production, communist planning under the euphemistic guises of "co-operativization" "physical controls", and "extension of the public sector."  But to take recourse to this device would be to sacrifice freedom for speed in economic progress. For, the changed conditions will no longer permit free enterprise, a free pricing system, free markets, and, what is most diabolical, freedom of choice of one's own occupation. We will have total planning and a totalitarian state- a garrison police state in the name of planning. Is it possible to strike a via media between these extremes? We cannot surrender our freedom and have it at the same time. The self of matter and the self of spirit can never meet. One of the two must disappear. There is no place for both. To accept this development would be to extinguish with our own hands the best heritage of this land, which it should be our effort to revive. In the Indian context of poverty, the urgency to raise the ratio of goods to man needs no stress. But shall we do this at the sacrifice of the dignity and freedom of the individual?  What use is that welfare, which ignores the true goal of human life and sets aside the elevating Rule of Dharma. A welfare state, which aims solely at Artha and Kama (suppressing Dharma or leaving it out in the cold), is devoid of true welfare. Our happiness and welfare (and also our greatness) would be in proportion to our success in recapturing and translating into our daily life and activities the Dharma-pradhan ideal of life. To think that to do so, we would have to run away from the external appendages of the modern world or of the nuclear age of tomorrow, is to miss the essence of that ideal. Consistently with that ideal, our conception of a welfare state would be a minimum state. To quote Gandhi: "That state is perfect and non-violent where the people are governed the least" (Harijan, 12, 1940).  To summarise, the objective of life, was the attainment of self-realisation (Nirvana). The changes, inner to man, which characterised the progress toward Nirvana, were beyond the jurisdiction of the state.  But they were attained in the course of the mundane activities of man. These fell broadly under two categories, Arthic (wealth or income earnings) and Kamic (want satisfying). The objective of life being Moksha, both activities were rooted in, conditioned by, Dharma. These three, Dharma, Artha and kama, (the Thrivargas) fell within the ambit of the state. Their propagation was its sole purpose.  Sovereignty, according to Indian polity, lay, not in the people, but in Dharma. It was the responsibility of the king to enforce the Rule of Dharma. A state where the Rule of Dharma prevailed was a welfare state, the objective of welfare being to assist man in the attainment of the goal of life. The welfare state of the traditional Indian concept was, thus, a minimum state. It was wholly antagonistic to a garrison police state. It did not conflict with the present-day idea of a welfare state guaranteeing minimum standards of consumption. In the excessive importance we are paying to the successful implementation of the Second Plan there was inherent danger to this concept of the welfare state as, insistence on the Plan, might lead, step by step, to the adoption of totalitarian devices for raising the requisite resources. To prevent this we have to be constantly on the vigil.  - From a speech at a symposium on “My Idea OfA Welfare State'' at Bharatia Vidya Bhavan, Bombay. --- ## [Musing] N. A. Palkhivala's Views on Socialism URL: https://indianliberals.in/musings/nani-palkhivala-on-socialism/ ### Body The following is an article published on March 10, 1966  in Forum of Free Enterprise's booklet titled "Is Socialism Outdated?" The author Mr. Nani Palkhivala, in this article on "The Shells of Socialism", discusses various aspects pertaining to socialism and State control. A time of trouble is a time of imbalance and distortion; at such a moment mere words from men in high office can easily sap people's morale and blight public confidence. Mr. Asoka Mehta's convocation address to Saugor University, described as "his first major speech after joining the Central Cabinet," contained such sweeping pronouncements of economic policies and was imbued with such political undertones that one wonders whether a university convocation address was the appropriate vehicle for conveying to the nation such portentous views of the Union Minister for Planning. If the speech did not reflect the collective thinking of the present Cabinet, it was a grave mistake to give a gratuitous jolt to the capital market, unnerve foreign investors and cast a pall of gloom over the national economy. If it did presage Cabinet action, we can only see ahead even dimmer days and shadows lengthening across the path.  The tragedy of India today is the tragedy of waste - waste of manpower, waste of industrial capacity, waste of talent, experience and the spirit of enterprise which could be harnessed to greater national purposes. The need of the moment is that the Government and the people, the authorities and the business community, should come closer together and work in harmony for the common good. The Tashkent spirit should be imported into the economic sphere, the spirit of mutual trust and understanding, mutual respect and consideration. Till then we shall not be able to get out of the quagmire in which we have been floundering so dangerously long. On the other hand, Mr. Asoka Mehta's speech will only serve to widen the chasm between the Government and private enterprise. Perhaps the most disquieting feature of Mr. Mehta's address was the unveiled threat to commercial banks. He contemplated the possibility of the State being "directly involved in the operation of these powerful bodies," or, in plain words, nationalisation of the banking system.  In other countries, the issue of nationalisation is naturally decided in different ways by different political parties succeeding each other. But in our country, although the same political party continues in uninterrupted power with the same economic objects, fear and uncertainty grip the public mind because of divergent views publicly expressed by different Ministers from time to time. On May 22, 1964 Prime Minister Nehru assured the public that "there was no immediate question of bank nationalisation." On June 5, 1964, Mr. T. T. Krishnamachari announced that "nationalisation should be the last step in any effort to control banks." There was little justification for such State action in 1964; and there is less justification now. If our economy is not to be dogged by a growing feeling of insecurity and instability, it is imperative that on such a basic issue as bank nationalisation, individual Ministers should not air their personal views but that the Cabinet alone should speak as a body.  The State Bank of India (which is almost wholly owned by the Government) and its subsidiaries, account for 25 per cent. of the paid-up capital and 32 per cent. of the deposits of all Indian Scheduled Banks. They extend 29 per cent. of the total credit to the public and own 32 per cent. of all Indian branches and offices of scheduled banks. Thus, there is already a hard core of the public sector in the field of banking. Pragmatism, and not ideology alone, should dictate any further change in the structure of Indian banking. Under the Reserve Bank of India Act and the Banking Companies Act, the Reserve Bank enjoys as wide powers as are known to the central bank of any other country, for imposing general credit controls and selective credit controls on banks. The Reserve Bank has full powers-which it constantly exercises-of controlling banks' :ending policies, the rates of interest to be charged to customers or to be paid to depositors, the size of loans to particular individuals or groups, the creation of reserves, and in fact controlling all banking activities. It is difficult to envisage what new laws Mr. Mehta has in mind as necessary to promote healthy banking. Mr. Mehta referred to 650 accounts constituting roughly two-thirds of the total advances of the banking system. That shows that some companies, because of the size of their operations, have much larger requirements for loans than others. It does not prove unfair banking practice. If one looks at the figures of advances by the State Bank of India, which is in the public sector, they would make the same pat- tern. All successful socialist countries have big corporate bodies, whose borrowings, compared with the borrowings of smaller units are on the scale referred to by Mr. Mehta. India has already priced herself out of the world market and is going through a phase of abnormal inflation. Both these unhealthy features would be aggravated but for the functioning of big companies with large bank accounts. The trade unions of the United Kingdom expressly submitted to the Monopolies Commission in that country that they were in favour of big corporations since such corporations could give security of service, afford to pay better wages and at the same time help to hold the price line.  Not all the theories of economists, not all the wit of our Planners, can get round the ineluctable law of life-you cannot divide more than you produce. No doubt, rewards must be shared, but first they have to be earned; wealth must be distributed, but first it has to be created. What one sadly misses in Mr. Mehta's address is that whereas there is no reference at all to the clamant need to increase production in the fields and in the factories, the emphasis is solely on increasing state ownership and widening state control as if that were a sure panacea for all economic ills. Are we sure that the bureaucrat's love of power and zest for more power will be any the less detrimental to economic progress than the citizen's love of profit? What public good is promoted by continuing control on textiles, with six months' stocks accumulated with the mills; and what disasters have followed in the wake of decontrol of steel and cement?  Mr. Mehta referred to the desirability of "curbing the private sector monopolies". This type of suggestion may be politically useful in that it conveys to the ill-fed, ill-clothed and ill-housed citizen that his economic plight is due not to official incompetence but to the anti-social activities of a few business houses; but it is not based on facts and is contradicted by the Report of the Monopolies Commission. In India enterprises can be brought into existence and they can expand and diversify under Government control and licence only; and there can be as much and as free competition as the Government alone wills.  When India faces the most acute food crisis of decades and our food production has to be increased by all proper incentives, Mr. Mehta suggests that the bigger agriculturists are unduly favoured and he favours a "trend towards making ownership of say, over ten acres of irrigated land uneconomic by levying heavy imposts upon such holdings." It is impossible to see how food production will be increased, or what sound agricultural policy will be promoted, by such a levy. There is no doubt that a heavy impost which would render ownership of more than ten acres of irrigated land uneconomic would only aggravate the food crisis. Does our socialism primarily aim at filling empty stomachs with food or at filling them with the satisfaction that their neighbours are no less hungry than they are?  Mr. Mehta is reported to have said that the constitutional guarantee about the right to property made it difficult for "the forces of socialism to operate on the level of a change in the structure of private property". The fundamental right to property at present exists in a most attenuated and abridged form: the adequacy of compensation paid for property acquired by the State is not even justiciable in a court of law. If this truncated right to property stands in the way of "socialism", there must be something wrong with that brand of socialism. Mr. Mehta referred to "the spectacular tussle between the old capitalistic economic order and the new socialist order in India", and ruefully noted the continuation of "a capitalistic economic order with a powerful hangover of a feudal social framework." Such words are wholly unrelated to reality. So long as the official thinking of our planners is that a mixed economy like ours must tolerate the private sector as a necessary evil, and that the end of the private sector is merely private benefit and the end of the public sector alone is public good, there can be no hope of reviving the comatose economy.  Economic wisdom can never be reduced to an unbending system. Indian socialism, in the true sense, aims at reducing the disparity between wealth and poverty, and raising the standard of living of the people and giving them social security. In that sense, today every thinking mind must be socialist. It is important to remember that the Preamble to our Constitution does not use the empty label "socialist" at all, but uses the meaningful words, "justice, social, economic and political; and Equality of status and opportunity." The concept gets distorted when one stubbornly adheres to state ownership as the only means of achieving the goal. You may adopt state ownership in areas where such ownership affords the only sure and safe launching pad; or you may tap the immeasurable reservoir of the people's response and initiative, energy and endeavour, prosaically called the private sector. Socialism must be elastic enough to promote economic growth by drawing upon normal human instincts and incentives; otherwise, we shall be only planning for poverty and equal distribution of misery. It is trite knowledge that even Russia has awakened to the necessity of absorbing that heresy of capitalism-the profit-motive.  The quintessence of socialism consists not in levelling down but in levelling up. It strives to bring forth "the maximum gifts of each for the fullest enjoyment of all". State ownership is to social justice what ritual is to religion and dogma to truth. State ownership and State control are the shells of socialism which were really intended to protect and promote the growth of the kernel; but rigid shells merely constrict its growth._-(Reproduced from "Economic Times" of Feb. 7, 1966, with kind permission of the Editor.)_ --- ## [Musing] Nani Palkhivala’s Publications to Serve Public Education | M.R. Pai URL: https://indianliberals.in/musings/nani-palkhivala-publications-to-serve-public-education/ ### Body _MR Pai paid a heartfelt tribute to Nani Palkhivala through his book titled "The Legend of Nani Palkhivala", published in 2002. The book is an attempt to record Palkhivala’s great achievements, from the vantage of a close associate who was part of his public life for over four decades since 1957. _ _While Nani Palkhivala is known to be a legendary figure, there are fewer sources that document major events of his lifetime. This book fills that gap.  Nani Palkhivala’s belief in principles of freedom was unshakable. He was a prolific writer who expressed these ideas in a clear way. An excerpt from one of the chapters called "Public Education through Publications", reproduced below, contains MR Pai’s recollection of Nani Palkhivala’s writing repository, the impact of his written works, and tales of various individuals involved in their publication._ Everyone concerned with taxation is familiar with the book The Law and Practice of Income-Tax by Kanga and Palkhivala. It is the standard reference book on Taxation. Even income tax authorities respect its authoritative contents. Chief Justice M.C. Chagla referred to it as “The Book”. Once I had to meet an income tax officer with regard to an assessment of a Trust as a trustee. He said, “Mr. Pai, I know that the Chairman of your Trust is none other than India’s leading income tax authority, Mr. Nani Palkhivala. According to his standard book of reference, what you are saying is right. I also agree with him personally. But my department takes a different view.” When I reported the matter to Palkhivala, in his typically pragmatic manner he said: “Pay the small amount, but with a letter saying that the assessment is unjustified. However, in order to avoid litigation involving a great deal of wastage of time and money of a public charitable trust, which could be fruitfully used for promoting its objective, the amount is paid under protest.” While Palkhivala’s classic on the law and practice of taxation was popular in corporate and tax circles at all levels, his enormous contribution to public education through the written word deserves great appreciation. He has left for future generations a legacy of noble thoughts. It is noteworthy that he did not derive any personal monetary benefit from these public service publications. The first such work which literally shook the Establishment and opened the eyes of the educated was his [**Highest Taxed Nation**](https://books.google.co.in/books/about/The_Highest_Taxed_Nation.html?id=MEVKAAAAMAAJ&redir_esc=y). By citing facts and figures he demonstrated that India was the highest taxed nation, and that hurt not only taxpayers, but also the economic development of the country because it destroyed individual initiative and enterprise. His theme was that by raising taxation to such high levels, the honest rich were being destroyed while the dishonest were being encouraged. He pointed out that when the tax rate reached 97.5 per cent, human nature asserted itself because it was easier to conceal thirty Rupees rather than earn one thousand Rupees and pay the Government nine hundred and seventy five Rupees. The book was like a bombshell. As one of his great critics, an economist from London School of Economics, who propagated the idea of heavy taxation, wrote: “The most conservative of all Government departments was made to change its thinking as a result of this book”. For sceptics, this book is an illustration of the power of ideas to change the hard realities of life. Neither the Government, nor the socialist apologists could refute either the facts or arguments in this book. A book which literally shook the establishment was [**Our Constitution — Defaced and Defiled**](https://archive.org/details/in.ernet.dli.2015.136232). First published in December 1974 by Macmillans, it went into several editions. The theme of the book as stated in the Introduction was “1947 and 1973 are the key dates in India’s twentieth century history. The first marked the end of the struggle for winning freedom. The second saw the beginning of the struggle for preservation of freedom... Politicians have been able to get away with virtual destruction of our fundamental rights simply because of the ignorance and apathy of the people... Freedom cannot be inherited in the bloodstream. Each generation will have to defend it and fight for it — then alone will it survive to be passed on to the next.” The book is a scholarly review of basic human rights, Rule of Law, and the power of the judiciary. Parliament’s power to amend the constitution, what had happened to India's noble constitution, and how in the Fundamental Rights case the law of the land was finally laid down. Whenever Palkhivala addressed a meeting after its publication hundreds of copies were eagerly snatched by the audience as the book had been modestly priced, only to cover the cost of production and distribution. As with his other books, Palkhivala did not derive any monetary benefit, and M.G. Wasani of Macmillans considered it a privilege to serve this great cause by pricing it nominally. Exactly a decade afterwards appeared another magnificent book, a compilation of selected articles by Palkhivala under the title [**We, the People**](https://ia804709.us.archive.org/29/items/in.ernet.dli.2015.147290/2015.147290.We-The-People-India-the-Largest-Democracy.pdf). The genesis of this book is interesting. For years, I had been urging him to write the story of his life, a proposition he did not accept. It was suggested that as he was reluctant to write an autobiography, he should at least record the major cases he had fought. Even this he would not agree to. His view was that he would have to reveal many things about several persons on the Bench, Bar and the Government and he had no desire to hurt anyone. He was not willing to write at all unless it was the truth as he saw it. Palkhivala did not agree even to write it for posthumous publication. Such was his concern for truth on the one hand, and adherence to his principle in life of not hurting anyone by telling the truth. While rejecting the pleas for an autobiography or a book on historic cases he had fought, Palkhivala agreed for a compilation of his important works. The result was a magnificent compilation, We, the People, which any publisher would have been glad to publish. It was, however, published and0 marketed by a non-conventional publisher, a bookseller who out of his regard and admiration of Palkhivala broke his rule of not going into publishing line, Strand Book Stall of Bombay. The book was a bestseller from the time it hit the markets, and ran into several reprints. The introduction and a personal note of this book is noteworthy. For the first time, Palkhivala wrote something about himself — his belief in destiny, and his eternal gratitude to his parents. The last paragraph of his personal note was touching: “I can hope for no greater reward than that young readers with their life before them may find in this volume something to inspire them with an earnest and unflagging zeal for renewing the youth of the State.” Exactly after a decade, he published another book, a sort of companion volume, under the title [**We the Nation — the Lost Decades**](https://archive.org/details/in.ernet.dli.2015.170056/mode/2up). It was a collection of his articles on various subjects — with comments on great Indians like Dadabhai Naoroji to political subjects like dismissal of a Governor, to budgets and musings on life. It showed the vast range of Palkhivala’s reading, and considered views on men and matters. Published by UBS Publishers’ Distributors Ltd., in 1994, this book was also lapped up by the readers. By this time, Palkhivala commanded a big following of intellectuals as also common people. The unabridged version of the book chapter can be found [here](https://indianliberals.in/wp-content/uploads/2023/09/M.R.-Pai-The-legend-of-Nani-Palkhivala.pdf#page=56). type=content&p=8544). Needs editorial review._ --- ## [Musing] National Priorities for 1970 URL: https://indianliberals.in/musings/national-priorities-for-1970-by-minoo-masani/ ### Body _Published by the Swatantra Party in 1970, the musing below was originally the transcript of a press conference addressed by Mr M. R. Masani, M.P., President, Swatantra Party, in New Delhi on 31 December 1969. The speech laid emphasis on matters that needed to be given immediate priority. First, a clean, efficient and prompt administration; second, the restoration of law and order; third, increased production and hard work; and lastly, a pragmatic approach to national problems, free from ideological emphasis or pre-conceptions. Masani argued how the Indira Gandhi government failed to address any of the aforementioned matters of priority._ _You can read the complete, unabridged version here [National-Priorities-for-1970](https://indianliberals.in/wp-content/uploads/2023/06/National-Priorities-for-1970.pdf)_ **I: Introductory Remarks ** First of all, let me wish you all, what is coming in a few hours time, a happy and satisfactory New Year, and we all hope it will be a good one for our country, also. I thought I should share a few thoughts with you at this juncture. The first thought that comes to me is that, in the euphoria of the rival Congress session in Bombay, the question of whether the ruling party has the mandate to give effect to its economic programmes appears to have been overlooked. Nobody seems to have mentioned it. As far as I can make out, the original mandate that Mrs Gandhi had got from the people in 1967 has expired as a result of the breaking up of the Party and her losing her majority. For the proposals made in Bombay and elsewhere, she has no mandate at all to legislate or carry out those policies, and democratic practice requires that she should go to the people for a fresh mandate. I would, therefore, like to suggest that, if she knows her constitutional duty, she will dissolve Parliament and go to the people and get a mandate. If she does not, then it is obvious that she recognises that she does not enjoy the confidence of the people and is not prepared to face them. I would be inclined to agree with her on that! My own feeling is that if she goes to the polls, she will be decisively defeated at the present juncture. I think her so-called popularity is grossly exaggerated. I, for one, do not think it extends beyond the bigger cities and urban areas. Even there, my own impression is that her main support comes from two classes in the cities–one is that class of businessmen which wants to make a quick rupee through permit-license-raj, and the other class is what the Marxists would call the lumpen (rag) proletariat, the rootless sections in the cities who have been well-known to support the Fascist parties in Germany, Italy and other parts of the world. I think these are the two classes from whom real support comes to her. I believe the need for a change of government is more than ever acute because the security and stability of the country require a change. What can be more dangerous to the stability and security of the country requires a change. What can be more dangerous to the stability and security of the country than a minority government, particularly when it depends for its survival on Communist support? I think this poses a threat to the security and stability of the country. Nor is this government, in my view, capable of dealing with any of the major needs of the country. I would like to suggest for your consideration that there are four things which almost every one of us would accept the country’s needs call for, namely, first, a clean, efficient and prompt administration which is at present utterly lacking; the second is the restoration of law and order, particularly in Bengal, but also in the bulk of the country where there has been an abdication of the obligation to provide law and order; the third is hard work and increased production; and the fourth is a pragmatic approach to our problems, free from ideological emphasis or preconceptions. As far as I can make out, this government is incapable of providing any one of these four needs. In so far as the economic programmes that have emerged from the Bombay session are concerned, they give no answer to two of the prime needs of the country, one of which is a stable price level or, if you like, a stable rupee and the other is more jobs, more employment to cope with the growing unemployment. So far as a stable rupee is concerned, there seems to be galloping inflation in the last few weeks. The official figures for the week ending 12th December 1969 show that there has been an increase in the circulation of currency notes; money in the hands of the public has increased by Rs 50.53 crores during that one week. If you take two weeks, that is, the fortnight before 12th December, the figure is Rs. 125 crores; that is to say, more and more currency notes are pumped into the system. This inevitably means increasing Inflationary tendencies, a rising price level, and consequent suffering for the people. As for jobs, we all recognise that without more production, there cannot be more jobs. The policies that have been suggested in Bombay give no hope of increased production. Indeed, all the policies suggested are going to retard production in various fields. It was interesting to find in one of the dailies of yesterday a Finance Ministry estimate of the effects of the nationalisation of industries, all of which show no increased production or output but a loss, which is not at all surprising. What can be expected from a party whose President makes the remark, which Mr Jagjivan Ram did in Bombay, that distribution is more important than production? Distribution of what? Of something that does not exist? Can one distribute what one has not produced? It is interesting that Mr Jawaharlal Nehru, while speaking in Kathmandu in the middle fifties, gave the answer to Mr Jagjivan Ram when he said, “Socialism in a poor country means only the distribution of poverty.” Finally, there is talk of abolishing teh fundamental right to property. There can be no other fundamental right without man’s right to property. If a man does not control his environment, he cannot exercise any other fundamental liberty. In other words, a pauper is not likely to enjoy the rights of a free press, freedom of expression, freedom of association or freedom of movement. It is only through control over one’s physical environment that, to some extent, one is able to operate as a free man, as Karl Marx said. That is why he wanted the proletariat to revolt. But, while saying so, he made a big mistake in coming to the wrong conclusion. Instead of saying that everyone must therefore have property so that everyone may be free, he came to the conclusion that everyone must be deprived of property! The Marxist Congress Party, led by the Prime Minister, wanted to follow that policy at a time when Marxism itself had become out of date. Here I would like to refer to what Justice Hegde said a few days ago in Bangalore when he answered the suggestion that the present Constitution comes in the way of progressive social and economic legislation. He said it was not so. I quote from _The Hindu_ of 28th December 1969- “To Mr Hegde’s mind the criticism made by some that the fundamental rights guaranteed under the Constitution were incompatible with the social goals envisaged in the Constitution and that they should therefore be scrapped did not appear to be well-founded. Theirs was a Constitution which provided for securing the interests of the society as well as of individuals composing it. Experience had shown that legisltaures and governments were likely under stress of circumstances to ignore basic human rights. Therefore it was necessary to safeguard the individual against the State. The best Constitution was that which harmonised individual rights with his social duties.” I think this is a wise statement, coming from the quarter it does. The motive for this attack on the property as a right can only be the intention to take the farms away from the peasants. Of all forms of property, this is the least vulnerable, and undoubtedly, you cannot take away a man’s four acres or eight acres under the present Constitution because the Courts will not allow it. It appears to me that the new attack on the right to property can only be aimed at the system of peasant proprietorship which exists in India. You will remember that a similar attack was started by Mr Jawaharlal Nehru after the Nagpur Resolution in 1959. That, in fact, was the provocation for the coming into existence of my Party. That attack was beaten back. It seems to me that this attack is going to be revived by another misguided attempt to co-operativise or collectivise the farms. This is the first short of the coming attack on peasant farms, however small they may be. If that is so, we shall certainly lead the fight against any such attempt, as we led the fight against any such attempt, as we led the fight against any such attempt, as we led the fight against the Constitution (Seventeenth Amendment) Bill in 1963. We would like to appeal to the rural population throughout the country to beware of this danger and to rise against it and wage war in defence of the basic way of life in the countryside–of a small farmer cultivating his own land.  All this inevitably leads to the need for an alternative government. That alternative government is not so far visible. I, for one, do not claim that my Party can single-handedly do this job. It will be wise for all other parties to recognise that in the present political situation, no single party can do the job of replacing the present government. I am very glad, therefore, that a strong opponent of coalitions like Mr Morarji Desai has now veered around to the view that coalitions are now inevitable. As you know, I have been talking about the era of coalitions for the last few years. I am glad that it is now becoming an accepted fact, a reality. There is no democratic country in the world where one party is always in the majority. So, often, a coalition government is a normal democratic way of life. In West Germany, Italy, Israel, Scandinavian countries, and in so many parts of the world, there have been permanent coalitions since the Second World War and yet no instability. Therefore, we need not worry. My Party stands for a combination, the coming together of all patriotic and democratic elements in the country, cutting across present party alignments, leaving out the Communists alone. The issue is not one of “left” or “right”. There are meaningless terms. After all, all parties accept a mixed economy, which Mrs Gandhi commended recently in Bombay. The difference is only on the question of emphasis, how much of each element is in a mixed economy, and what should be the emphasis from time to time. This is something which is negotiable between Liberal democrats like myself and Social democrats. There is no barrier. It is a matter of argument, negotiation, give and take. These economic differences, in my view, are negotiable. What is not negotiable is the security of the country, its independence, and its democratic way of life under the Constitution. So, we want all patriotic and democratic elements to come together. I, therefore, welcome Acharya Kripalani’s very sane advice, given at Ahmedabad, that opposition parties like the Opposition Congress, the Jan Sangh, and the Socialist parties should stop competing with the Prime Minister in her demagogy. The opposition would do better for itself if it were to give up competing with the ruling party in socialist slogan-mongering and engage itself in building a broad-based, patriotic, democratic front so that it could provide a clean government. We have been saying always that we would like to bring together people on a minimum programme of the basic needs of the country. I have listed them as good and efficient government, the restoration of law and order, hard work and more production, and a pragmatic approach to our economic problems. We think that if the parties in opposition which belief in democracy agree on these four points or something of this nature, it should be possible, even immediately, to provide the country with an alternative government. Before I end, may I take a few minutes to refer to my own Party, which has elected me as President for the next two years? We are a party of change. We came into existence in 1959 to change the pattern of socialism which has been imposed on the country during the last twenty years. We, therefore, stand for drastic change and the liberation of the people from the shackles of control, red tape and Statism. We agree with Dr Ludwig Erhard, the maker of the German miracle, when he said, “Let the men and the money loose; and they will make the country strong.” This is the policy of liberalisation which Mr Dubcek, for instance, was trying in Czechoslovakia when it was run over by the Soviet Red Army. Our basic creed is free competition, a free market economy, plus Gandhiji’s theory of Trusteeship. We believe in the Gandhian path to social justice, as opposed to that of Karl Marx. We stand for modernism. We want to modernise this country so that it can come up to the level of the more advanced countries of the world. Take Japan, for instance. It is emerging as Super Power No 2 in the industrial world, next only to the United States. We do not see why we should not follow that path. We have nothing in common with obscurantism. For instance, Mr Atal Behari Vajpayee of the Jan Sangh is quoted in the _Indian Express_ this morning as saying that there are three classes of people who need to be brought back to the “path of rectitude” and “Indianised”. One of them is the Muslims, the second is the Communists and the third, I am rather interested to hear, are people who like the Western way of life. By this, I presume he means the modern way of life. If that is so, I am afraid he is up against quite a number of people because, as I understand it, there are lakhs and lakhs of young men and women in this country who want nothing more than to modernise this country. If anyone wants to turn back that tide, wants to turn India back from the march towards modernism, he will find it a very difficult task indeed. We have nothing in common with the state of mind which wants to turn its back on modernism. We are essentially a Party which believes in progress–modern techniques, modern management, modern administration, and thus catching up with the rest of the world. The National Executive and the office-bearers elected in Madras on the 27th and 28th, I find, are a new team with a lot of young blood; particularly the five Joint Secretaries that the party has elevated to help us, each of them is a new man to the national leadership and a young man. I know that they are all dynamic young men. The key-note to the leadership of the Swatantra Party will be dynamism and discipline. We believe that Indian politics are now entering a period of a war of movement, a turbulent period, when a Maginot Line mentality of staying put and defending one’s position will not do. We will have to show a lot of initiative and drive. So, the first keynote will be dynamism. The second will be disciplined. You are aware of the fact that I have been arguing within my Party for having disciplined and ethical methods of work. Since the Party has placed me at the helm of affairs, I assume it has accepted the plea that I had made. If that is so, then I expect the new Executive to provide full support in putting an end to the kind of indiscipline which, unfortunately, we have been witnessing for the last year or two. _Previous musing: [Democracy in India (1959)](https://indianliberals.in/content/democracy-in-india-by-jm-lobo-prabhu/)_ --- ## [Musing] Not a Rich People’s Lobby URL: https://indianliberals.in/musings/not-a-rich-peoples-lobby/ ### Body The Swatantra Party's principles and the policies it commends are the only policies and principles that can help general welfare and national progress. _The detractors of the Swatantra Party, PM Nehru included, used to dismiss it as a reactionary party serving the business interest. The party’s advocacy of pro-market policy (competition, low entry barrier, less taxation, easy regulation, etc.) were dismissed as masking the interests of the Bombay business houses. It fell upon C Rajagopalachari to lay out the difference between pro-business and pro-market policies in an article published on July 6, 1968. In the article, Rajaji laid out the need for a market-driven economy to generate prosperity for all; took dig at big businesses which had a vested interest in maintaining socialist controls; and decried the lack of nuance in the public discourse to make the distinction between freedom and cronyism._ _Rajaji’s advocacy of market capitalism has bearing today for a relatively liberalized but still crony and stagnant Indian economy. Produced below is the full text of the article-_ There can be nothing more untrue than the notion that still persists among people who ought to be better informed but who do not care to enquire, that the Swatantra Party works for rich people. The Swatantra Party works to propagate truth, to educate people who have undertaken the difficult tasks of democracy in the truth that economic progress rests on healthy competition and on the incentives that make people work for their own advantage while also serving the nation. The party works to make people see that management by Government means management by inefficient and uninterested officials or the creation of monopolies for favoured licencees who are interested in making more for themselves than for their customers or for the general public. The Swatantra Party finds some help from some moneyed individuals because it has to find it somehow. But these people give help, not to win politicians to serve their personal or group interests but because they are convinced that the economic principles advocated by the Swatantra Party are correct principles and will contribute to the national good. But there is nothing harder than to get money from wealthy folk even for a good cause which they appreciate and accept as right in principle. The Swatantra Party has learnt, as libertarians have learnt in other countries, those big businessmen cannot be relied upon as good allies in the battle against government’s encroachments. Businessmen will often advocate tariffs, import prohibitions and restrictions on competition because they think rightly or wrongly that these interventions will be in their personal interest or in the interest of their companies, and are not concerned whether they may be at the expense of the general public. Many businessmen do not realize or reflect on what the actual consequences will be of the particular measures they propose or support. They do not perceive the cumulative debilitating effects of growing restrictions on human liberty. Most often businessmen acquiesce in controls out of sheer timidity. In the capitalistic system, there is a tendency towards self-destruction. Big businessmen facing direct attack display much cowardice. Truth must and will triumph at last. But this may take far too long a time for the national economy to wait. We want success in the elections and resulting strength in the State and Central legislatures in order to hasten the victory of reality over illusion. Parliamentary democracy has made this necessary, because it is a form of government in which the relatively ill-informed get power, and in India, this takes a very acute shape. In fact, without disrespect, I may say the Government in India is nearly as illiterate in the effective sense, as the electorate is in the ordinary sense. It is Government of the illiterate by the illiterate but unfortunately not for the illiterate. The national good can be served only by those who are truly educated and are motivated not by a party or personal interests but by an ardent desire to lift the nation up from poverty and bankruptcy to solvency. Calumny has had a start and it keeps on maintaining the falsehood that the Swatantra Party is a rich men’s lobby. The rich men know where to go; they go to the party in power. “Be thou as chaste as ice, as pure as snow, thou shalt not escape calumny.” I make bold to assert that the Swatantra Party has never once stood up for untruth or to help any single rich exploiter at the cost of justice or fair play. The Party has stood for reduction of taxes and for reduction of public expenditure. This is because such a reduction is good for the nation since it increases savings and productive investment of such savings. The Swatantra Party’s principles and the policies it commends are the only policies and principles that can help general welfare and national progress. The original text could be accessed [here](http://indianliberals.in/~_admin/pdflanguage?id=804797230.pdf). [_IndianLiberals.in_](http://indianliberals.in/)_ is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context._ To read more about C. Rajagopalachari, [click here](https://spontaneousorder.in/rajaji-relevance-to-todays-politics-of-the-right/). --- ## [Musing] OBSTACLES TO LIBERALISATION AND MARKET ECONOMY URL: https://indianliberals.in/musings/obstacles-to-liberalisation-and-market-economy/ ### Body The following text was originally delivered by Manu Shroff as the keynote address delivered at a seminar organised by the Project for Economic Education in November 1992. It was published by the [Forum of Free Enterprise](https://indianliberals.in/content/obstacles-to-liberalisation-and-market-economy-by-manu-shroff-february-14-1993/) in 1993. Shroff was an Indian economist, Editor of The Economic Times and Advisor to the Unit Trust of India (statutory public sector investment institution).If I have to speak on the theme of the seminar - viz. Obstacles to liberalisation, there could not be an easier task set for me. This is because there is, sadly, no dearth of obstacles to liberalisation and no elaborate search is necessary. The social, political, economic and administrative environment in our country has been bedevilled by feudal attitudes which are totally at variance with individualism and enterprise. Status rather than contract, by and large, determines human relations in our society. And this has been so as much in the traditional society ridden with the divisions of caste as in the modern educated segment which has inherited quite a bit of the British-style hierarchy deriving from lineage, school and civil service status.  When we sought to bring about economic change, it was almost natural for us then to choose the path of a paternalistic government taking on the major responsibility for setting the pace and direction of economic development. In the name of socialism, we ignored individual enterprise and looked to the state to provide the impetus for growth and removal of poverty. The result was comprehensive central planning backed by an ever expanding bureaucracy which undertook to direct economic activity in its minutest detail.  From one economic crisis to another, we learnt from experience, but ever so slowly, preferring at every stage to believe that the path chosen by us was wrong, only the implementation went awry, as if the distortions which the licensing system created were not the inevitable consequence of the system but resulted from its corruption; as if the poor performance of public sector was not a consequence of the inherent weaknesses of extensive public ownership of means of production, but was caused only by the corruption of the political and administrative system; as if the very corruption did not have its roots in the design of central planning and extensive government intervention. May I draw your attention at this stage to the late Dr. Sukhumoy Chakravarty's little book entitled "Development Planning" which typified the attitudes I have just described and which I had occasion to point out in my review of that book entitled "Learning by learning" published in the Economic Times dated 11th January 1988. We never learn from experience. We try to learn only from our own previous learning! Such a Brahminical mind-set has been the major obstacle to liberalisation and I am constrained to say that we have not yet managed to get rid of it.  Those who thought that after July 1991, it would take but a short space of time to move to free enterprise and market economy probably understated the strength of the attitudes I have just described. And it is a change in these attitudes which is far more important than specific policy reforms if we are to move to a market economy in a meaningful way. The hope is that deregulation and competition will help bring about such a change. And they well may, if the society is able to absorb the harsh shocks of competition without political turmoil.  Let me turn now to the specific policy initiatives taken in the past few years and the obstacles they have encountered. It is hardly necessary for me to recount to a distinguished and experienced audience like this the various policy reforms that have been introduced. As is well known, they have straddled the areas of fiscal and monetary policies, industrial licensing, price controls, foreign trade and foreign investment. Fiscal policy, in a way, is at the centre of the reform package. Without stabilisation, structural reforms do not work. The defined objective is to reduce the fiscal deficit to 5% of GDP this year, having already brought about a reduction from 8.6% to 6.5% last year. The major instruments have been reduction in government expenditure, in particular, subsidies and privatisation. As you all know, the task has not been  easy. The agricultural lobby has stalled the progress on cutting subsidies, forcing the government to adopt a gradualist approach - and push forward much of the burden of cuts in fertiliser subsidies from wealthy farmers to the general tax payer and the less-well-to-do consumers of food. As fertiliser subsidies have been reduced, the procurement prices of foodgrains have been raised necessitating partly an increase in issue price of foodgrains to some extent and partly an increase in food subsidies. The general reduction in government expenditure is also moving at a slow pace. Although industrial licensing is virtually abolished and import controls greatly reduced, not a single government department has been closed down. Retrenchment is next to impossible; even redeployment encounters stubborn resistance. There are numerous activities which scores of government departments have got into which can be easily dispensed with or contracted out. But the pull of vested interests is strong. Privatisation moves have aroused suspicion and anger among left politicians and the employees of public enterprises - the former unable to shed the ideological baggage of the past, the latter reluctant to part with the cosy comforts provided by the so-called model employers. The result is that instead of privatisation, all that the government is able to do is divestment of a part of its holdings in public enterprises to raise resources. The techniques of divestment have not been without criticism. Is the government underselling its assets ? Is it 'forcing' publicly owned investment institutions to overbid ? Who is exploiting whom is not specified, and no one seems to care, so long as some "exploitation" is shown to have occurred. Auction means competition. But we seem to be averse to accepting the reality of competition. After the latest auction which was a bit of a flop, there seems to be an impasse.  Similar problems have been encountered in the progress of the reform of the financial sector. The extreme view would be denationalisation of the banking system in order to restore its health and viability. But even a compromise position that new private banks be allowed to set up in order to promote genuine competition has not so far been accepted. The Reserve Bank has issued guidelines for achieving capital adequacy norms, but there was little hint (until a few days ago) that at least a few of the banks which have strong balance sheets, would be allowed to raise capital from the market. And yet, the burden of providing adequate capital for banks can hardly be borne by the budget. The dilemma is acute and leads to inaction. But how long can we postpone facing the issues squarely?  True, the Government and the Reserve Bank have taken steps to gradually implement some of the Narasimham Committee's recommendations. The SLR has been reduced. Interest rates are freer than before. Accounting norms have been laid down. Capital issues control is abolished and SEBI clothed with statutory powers. But the securities scam has caused doubts about the future. The blame for the scandal is wrongly laid at the door of liberalisation. As I have argued elsewhere (ET 23rd June 1992), the scam was the result of incomplete liberalisation. The furious activity in the ready forward market was the inevitable consequence of the RBI controls on call money rates (since given up), on interest rates on deposits (which continue) and restrictions on leading to certain categories of borrowers which included brokers. Restraints on public sector units about where they can bank and the forms in which they can deploy their surplus funds, while at the same time imposing new norms of profitability on them, added fuel to fire. Had all interest rates been free, SLR reduced to reasonably low levels and bank financing of stock market transactions permitted and hence brought within the discipline of the RBI, the scam could not have occurred. And yet the mind-set I referred to earlier would derive the opposite conclusion from this experience and block all further reforms in this sector!  Let me now turn to domestic and foreign investment. Reforms in these areas have moved speedily and despite the continued doubts and apprehensions on the part of foreign investors, they represent a genuine break with the past. Industrial licensing and MRTP restrictions have been virtually given up. The rigour of import licensing has been greatly reduced and import duties brought down. There are hardly any price controls left. Several activities have been thrown open to private sector, the latest being steel. Direct foreign investment upto 51% is allowed as a matter of course in a large number of sectors and higher ratios considered for approval. Technology import has been freed to a great extent. Greater freedom has been given for Indian joint ventures abroad. Foreign institutional investors can buy and sell stock on the Indian stock markets without too many restraints. The Indian economy has been rapidly opened up and the stage set for Indian industry '" achieve world-scale capacities, technology and competitive strength. But there are grave doubts if these policies will be allowed to reach their fruition. What the Finance Minister has called the East India Country syndrome or chauvinism for short, has been displayed by the opposition parties, who seem to be all agreed that while domestic liberalisation is all right, opening up to the world is anti-national. Such an attitude reduces the credibility of the steps already taken, endangers their success and slows down further moves in the same direction. Meanwhile, China, which has been regarded by most observers as our competitor in the development process, has gone ahead with unprecedented vigour attracting massive foreign investments, not all of which is from the overseas Chinese and has shown a remarkable double digit growth rate.  I do not want to make light of the burdens society has to bear during the initial period of reforms; nor do I want to belittle the importance of ensuring that these burdens do not fall on the poor. To a large extent this means a dogged determination on the part of government to control inflation. But how can anti-inflationary policies succeed if every section of society wants to pass on the burden of adjustment to the next section? The politically powerful generally succeed in doing so, and they are by no means poor. As the impact of liberalisation and competition begin to be felt the problem is likely to become more acute. An aspect of this is the so-called 'exit' policy.  It stands to reason that if 'entry' into an activity is free from controls, exit from it must also be possible without restraint. This is the law of competition. Winners survive; losers have to quit and do something else. But what happens to the labour force made redundant when an enterprise has to close down? We have no social security other than that provided by the family or traditional · community. There is no unemployment insurance. Can we throw workers out on the street ? Clearly, this is not feasible, whatever the logic of competition. Hence what is needed is a policy of redeployment and renewal of the potentially redundant labour force, be it in industry or the service sector, including government administration. And the government has rightly followed a cautious approach, developing a consensus before going ahead with the statutory and other reforms which are required. Slowly the idea is being accepted that poor productivity in loss-making activities is not wholly due to inefficiency of labour but a consequence of market forces or bad government policies in the past. Labour alone cannot be asked to bear the cost of these failures. Equally, therefore, redeployment of labour in more successful activities, with some retraining as necessary, should ensure improvement in productivity in general. The notion that employment has to be secured in the same firm, in the same occupation at the same site is clearly infeasible and detrimental to the long term interests of labour. However secure the workers may feel in  their present employment, they just cannot ignore that change invariably means some dislocation and must further learn that the challenge such change offers can prove to be a strong stimulus to improvement in their productivity and hence welfare. Most of us have been displaced from our traditional milieu. As the villages move to towns and the towns to cities, there is dislocation and 'redeployment' all along the line. Such a process has not been allowed to take place for many years in the case of industry. The clearance of the accumulated problem thus assumes critical proportions and causes serious socio-political tensions. In almost all areas of economic reform, we are dealing with the neglect of decades. The task cannot be accomplished overnight. And yet it has to be done soon enough.   One of the reservations about liberalisation, especially of the external sector, is that it will push us even more heavily into foreign indebtedness. Even those who favour deregulation of economic activity generally are thus wary of excessive or speedy liberalisation of imports. Clearly, it would be wrong to permit import of luxury consumer goods and the recent gaffe of policy makers about special import licenses for exporters which would be valid for import of consumer electronics is a pointer to the temptations which arise. At the same time, it is next to impossible to insulate all export activity from domestic sales even when we go the route of export zones. Should we then give up the prospect of promoting export of consumer goods (which will require freer imports of capital goods and components required for their production) merely because some of these goods e.g. the so-called white goods - will be sold to domestic consumers, usually the relatively well-to-do? I think we fall prey to what the late Prof. Alan Whitehead called the "fallacy of misplaced concreteness" if we confuse the need to curb consumption generally with the notion that particular kinds of goods should not be produced or imported. A good tax policy should be able to take care of the distortions that may arise. To say this is not to imply that we do not need to worry about foreign debt. The economic reform is of no significance to the country if it does not aim at and succeed in bringing about improved allocation of resources which enhance productivity and exports, thus closing, over the next five years or so, the critical gap in our balance of payments. But this does not mean that we can close the gap and reduce our foreign indebtedness by import restrictions. Our own experience shows the futility of such policies.  Another reservation about liberalisation is. that it will accentuate the duality in our society While the urban middle class forges ahead, borne on the dynamism of a market economy, the rural poor will be left behind. This assumes that the rich will look after themselves any way and that the urban poor being vocal will not lose out a lot. How will the reforms affect the rural poor? Is there anything in the package to directly address their problem ? The answer is clearly in the negative. It is a paradox of our experience that while the failures in industry have been due to excessive government intervention, those in agriculture seems to be due to inadequate intervention. The introduction of market economy in agriculture, in the absence of land reforms, spell disaster for the poor farmers. And the massive transfers from the urban to the rural sector through pricing policies and subsidies of all kinds have only accentuated rural inequalities, reinforcing the acute caste-based inequalities which persist.  To ask for greater and more meaningful Government intervention in the rural sector is not a contradiction but an assertion that market forces cannot work without a strong framework of laws and rules which ensure that markets are not distorted. This is true of industry and financial services as well. A level playing field is necessary for economic agents freely to compete. In the rural sector, this means meaningful land reforms, massive public or publicly induced investments in social and economic infrastructure - transport, power, irrigation, technology diffusion and policies which aim at direct attack on poverty and unemployment - e.g. employment guarantee schemes and enlarged and more meaningful public distribution system.  But what about existing inequalities of wealth and incomes? This is a legitimate question to which there are no easy answers. Other models of development which try to attack these inequalities through state action seem to have failed. What is being tried now is allowing freer play of market with safety nets for the weak, in the hope that the resulting gains will, in the end, benefit all. But this is not yet a proven case. I cannot assert that distribution of income and wealth has become more equal in developing countries which have followed the market-oriented pattern. But with growth, poverty has been reduced in most such societies. In this context, the Chinese experiment with "market socialism" will be watched with interest.  In sum, I have argued that but for the economic crisis, we may never have moved so far the direction of a liberal market economy, given the feudal attitudes and the ideological baggage of the past. Happily, the direction is set and as the Prime Minister has said more than once, the process of economic reform is irreversible. The old mind-set must, however, change, as it may under the impact of reforms, in order that we may move forward in the same direction.  _Previous musing: [FREE ENTERPRISE IN INDIA AND FREEDOM](https://indianliberals.in/content/free-enterprise-in-indian-and-freedom/)_ --- ## [Musing] Our Economic Future URL: https://indianliberals.in/musings/our-economic-future/ ### Body _The following essay was published in April 1958 by [**The Forum of Free Enterprise.**](https://indianliberals.in/content/our-economic-future-by-a-d-shroff-apr-7-1958/) Authored by A. D. Shroff, the essay talks about the challenging economic situation of the country and makes a rapid survey of the economic situation, the hardships of the common man. _Of all the problems facing this country today, none is as challenging as the present economic situation. It is a tragedy that when all the energy of the country should be mobilised in meeting the unusually difficult economic situation, comparatively smaller issues of regional interest are tearing the country to pieces. The country will not grow one inch taller in stature nor will its material prosperity be enhanced whether English or Hindi was the official language or whether the reorganization of States which has recently been brought about is allowed to stay or is changed. The fruitless controversies over these regional problems confirm the impression that the country is not sufficiently appreciative of the dangers it is confronted with on the economic front. I would, therefore, make a rapid survey of the present economic situation in the country. That a country which is in the process of an enormous development programme should experience hardships and privations is nothing unexpected, but that after ten years of independence with unfettered freedom to our Government to shape its policies, the country should experience continued shortage of foodgrains is significantly symptomatic of something wrong in the State of Denmark. Making due allowance for the freaks of nature, insufficient monsoons and droughts, we must confess that we have failed to plan with intelligence and foresight for adequate supplies to meet the most elementary requirements of our people. The Food Minister has times without number given the country an estimate of the food situation and, without exaggeration, till very recently all his estimates have proved wrong as soon as they were made. Very recently we were told by the Food Minister that all the efforts made by him to procure additional rice from abroad have not produced much result. The country, therefore, will have to be content with whatever supplies are available which would mean a very heavy call on a large section of the people to go without the bare quantity of rice to which they have been accustomed as a primary diet. From the Prime Minister downwards the country has been told that the food production can be raised by 60 to 70 per cent, but we are yet to be told how it is to be done. The only concrete contribution made by Government towards the solution of this grave problem is, we are told, a decision by the Cabinet Minister not to eat rice till there is shortage in the country.  Apart from the hardship involved to the common man in putting up with this acute shortage of foodgrains, the problem involves a heavy drain on our foreign exchange resources at a time when we are at our wit's end in collecting every Dollar or Pound to honour our international obligations. It is not generally realised that when Ministers talk glibly of increasing the food production of this country, this objective cannot be attained quickly without importing large quantities of expensive fertilizers from abroad. The process, therefore, of augmenting our food resources in the coming years will involve substantial expenditure of foreign exchange in the purchase of fertilizers. That Government are seriously thinking of giving up or at least postponing one or two of the fertilizer projects in the immediate future is a tragic reminder of the vicious circle in which the country has been caught by the ill-considered policies which are pursued in the economic field. The country must be educated to appreciate that the food problem is not a passing difficulty. It is a long-term problem which will continue to be with us for many years to come, and further that till we attain self-sufficiency, ensuring adequate supplies of food-stuffs would continue to cause a heavy drain on our foreign exchange resources.  Apart from food, we are faced today with a very critical situation in regard to our external resources. For the week ended 3rd January, our Sterling balances have declined in a year by Rs. 330 crores. Deducting Rs. 95 crores which was a temporary loan from the International Monetary Fund, we were left last week with Rs. 198 crores. Against this, according to Government's own statement, we have outstanding gap of Rs. 700 crores. Ignoring for the present our total requirements for the balance of the Second Five-Year Plan period, our minimum requirements for the next 12 months are so heavy that they are causing serious concern to all thinking people and Government: have not yet cared to take the country into confidence as to how the country will meet its maturing liabilities in the next 12 months. India has a very fine record of meeting all her international obligations punctually and faithfully and let us only pray that Province will come to our assistance in maintaining this unsullied record. Very serious and earnest efforts have been made in recent months to secure assistance from foreign countries. It is, however, still anybody's guess as to the extent and magnitude of the assistance that may be forthcoming, but unless a very energetic effort is made at our end not to allow any further drain on our available resources, the situation will become extremely critical in the next six months. I have pleaded before and I plead again today for a very drastic cut in imports. I am fully conscious of the hardships such restrictions may cause, involving a reduction on the tempo of our industrial activity in general, but any complacency in this regard and undue optimism about foreign aid will bring us nothing but disaster.  Whilst it is imperative that we should concentrate all our energies in a constructive way towards meeting this immediately difficult situation, it is only fair to the country that it should know how this crisis was created. It is really amazing that nobody yet has raised a discussion in Parliament as to the origin of this crisis. The thoughtless and indiscriminate issue of import licenses in 1956, possibly inspired by an over-enthusiastic effort to push the tempo of development, has been responsible for creating our present plight. This has been sought to be explained away as a crisis of development, as something which is inevitable in a country which has embarked on a large-scale programme of economic development. Without the slightest fear of contradiction, I would say that this has been a crisis of planless planning. The Planning Commission recently issued a statement explaining a number of causes which have led to the present crisis of foreign exchange. The only one and the real explanation has been omitted, viz., that it was due to their under-estimate of the foreign exchange resources which would be needed to implement the Plan targets that the country today has been landed into this perilous situation. I want to leave it to the common man in this country to judge for himself the validity of the explanation that it has been a crisis of development. Only a few days ago I received a circular from an importing house stating that German Silver-plated ware and Rosenthal Crockery have just been received. This stuff might have arrived in India under one of the licences given in 1956 and we are asked to believe that the economic development of this country could not have proceeded if German Silver-plated ware and Rosenthal Crockery was not licensed to be imported into India. I still feel, and I know that there are a number of thinking people strongly feeling that way, that Parliament should order an enquiry into the method and manner in which licences were indiscriminately issued in 1956.  It would not be proper to hold the Commerce Ministry solely responsible for this exchange crisis unless the Government tells us that there is no co-ordinating machinery between the Commerce and Finance Ministries to regulate import policy. The Commerce Ministry cannot, of course, plead complete ignorance of the availability of foreign exchange resources when it sanctioned all the import licences, but, at the same time, the Finance Ministry which handles our foreign exchange resources should have been vigilant enough to pull up the Commerce Ministry in its senseless spree over the issue of licences.  The country is undoubtedly most anxious that every possible effort should be made to augment our external resources at least to meet the obligations we have so far undertaken. In our anxiety to secure adequate foreign assistance it is very essential that we should continuously keep under review the total amount of obligations we are incurring abroad though they have to be paid in subsequent years. Nobody who has even a nodding acquaintance with the problem of our foreign trade and external resources can seriously contend that this is a passing short-term problem. If development is to continue, and it must continue, the problem of foreign exchange will continue to engage our attention for the next many years to come. And, having been lost in the muddle which has been created during the last two years, we should keep a very close watch of the total new commitments we are creating abroad and how they can be related to the total available resources.  It is only very recently that a realistic appreciation is to be found in official circles regarding the availability of internal resources. Government have not been very successful on their public borrowings. The Small Savings Movement on which so much reliance was placed has, in recent months, shown definite signs of dwindling interest. Taxation, both direct and indirect, has been raised so high that there is very little scope left for imposing further burdens on the tax-payer. The additional taxation of about Rs. 100 crores through the fantastic Budgets of last year will soon be absorbed in meeting the demands of Government employees and the Defence Ministry. There will thus be very little left for meeting the expenditure under the Plan. At the same time, we are told that Government have decided to control deficit financing and, on the other hand, the Prime Minister stated only a few days ago that the Second Five-Year Plan must be implemented at all costs. This is for the Public Sector.  When you turn for a moment to the requirements of the Private Sector, you find that the new Capital Market is practically dead. Under-writers of new issues have had the unfortunate experience of being left with large chunks of new issues, in some cases as high as 90 to 95 per cent of the total issue. Industries, therefore, have to lean more heavily on banks with the result that in order to maintain reasonable liquidity banks are finding it increasingly difficult to meet all the demands made on them. The leading Stock Exchanges in India present a pathetic picture with brokers reporting that investors are not interested in any further investments. Investments in preference shares have become practically unrealisable and equity shares today are seeking buyers with attractive yields: from anything up to 10 or 12 per cent. Analyse the situation as you like, but you cannot escape the unavoidable conclusion that the taxation policy has both drastically reduced the capacity to save and has also dissuaded investors from taking the normal risk of investment as all incentive to save and invest has been destroyed by the growing burden of taxes. I make bold to suggest that all the implications of the new taxation pattern and the almost confiscatory level to which direct taxation has been pushed have not yet been sufficiently realised by the country. As the incidence of these new taxes comes to be felt, there will be an undoubted slowing down of economic activity in the country in general.  Having made a brief survey of the principal aspects of our economy today, it seems to me that the immediate economic future of the country is definitely bleak and will continue to be so unless there is a radical change in our economic policies.  Whilst I am a consistent and convinced believer in planned development, I have come to feel that the concept of periodic Plans is not suited to our conditions. The economic development of the country must be a continuous process. In view, moreover, of our experience of the inadequacy of the necessary tools and equipment for coordinated and comprehensive planning, what we should do in future is to draw up a programme of development which should not be attempted to be completed within a specified period. The idea of making planning flexible under a rigid periodic plan is not practicable. The programme should outline a number of targets in respect of various items of production and the detailed drawing up of the projects for the fulfilment of the targets should be conditioned by the availability of resources and the inter-relation of the simultaneous progress made by different targets under various heads. The Second Five-Year Plan has broken down on many fronts mainly because of the wrong determination of priorities and lack of coordination in the simultaneous progress of different projects. That failure can be avoided in future if a suitable readjustment in priorities was made so that, for instance, transport should be found available to move materials for construction projects or that adequate quantities of cement would be available for building dams, shipbuilding yards and new factories before the projects for the latter are finally decided upon.  One important contributory cause in delaying implementation of projects and substantially increasing the cost of the projects is to be found in the elaborate procedures which are a concomitant of the endless regulation of practically every economic activity in the country. I would very strongly urge Parliament to appoint a small committee to examine the procedures set up under the various regulations with a view to simplify and I am sure that simplification of procedures will both accelerate the pace of development and reduce substantially its cost.  Our economic future will be seriously impeded if inflationary pressure is not continuously kept under control. It has been suggested that the expenditure during the Second Five-Year Plan in the Public Sector may now be restricted to Rs. 4,800 crores. As Rs. 1,500 crores will have been spent in the first two years, Rs. 3,300 crores will have to be spent in the next three years. In view of the attenuated resources; both internal and external, I am definitely of the opinion that expenditure of this magnitude in the next three years will release additional purchasing power which will not be matched with increased production and will thus accentuate inflationary pressure on the economy, particularly when the drastic import restrictions which are unavoidable will not be able to off-set this pressure. If expenditure of this magnitude is persisted in, I am afraid our economy will not be able to stand the additional strain and may well aggravate an already difficult situation. I will never tire of repeating that the Second Five-Year Plan has been basically wrong and although realism has been recently dawning on our authorities in that the Plan has now been reduced to what is called the "core of the Plan", any persistence for the sake of prestige will subject the country to untold and unjustified hardship and misery. In this regard the country must realise to an increasing extent that if the price-line is to be held, Government alone cannot do the job. There are sufficient indications already that as a result of import restrictions prices of various commodities have started rising. Unscrupulous dealers have been exploiting shortages and have been holding back stocks with a view to profiteering. The public must be disciplined to take concerted action against such antisocial activities and I suggest that consumers' associations should be formed to keep a vigilant watch over these anti-social activities, the most effective way of controlling which would be by mobilizing public opinion against them. If the voluntarily organized consumers' associations act vigilantly and rouse public opinion against unjustified increase in prices and expose the miscreants, it would be possible to control these anti-social activities.  Government themselves can help the public in resisting hoarding and profiteering by setting a good example through their own trading activities. It has now been abundantly proved that the State Trading Corporation has profiteered to the tune of over five crores of rupees in the exclusive monopoly of distributing cement in the country. It is really surprising that Government should not immediately reduce the price of cement and avoid profiteering and thus set a good example to other traders in the country.  One serious threat to our economic future lies in the extent of corruption that prevails both in the Private and Public Sector. Recently the Home Minister assured Parliament and the country that Government will take very active measure to eliminate corruption, particularly in the Administration. The Forum of Free Enterprise, while assuring the Home Minister of their wholehearted support in any measures Government may take in eliminating corruption, suggested that Government should compile for the information of the public a statement in respect of relations of Ministers both at the Centre and in the States who are connected with any Government department either through service or through contracts or through firms in which they are directly or indirectly interested in respect of contracts with Government departments or of licences for import and export. The Home Minister considered this proposal not practicable. I fail to see what practical difficulty the Home Ministry sees in compiling such a statement and publishing it for general information. The very publication of such information will prove a deterrent to the continuance of corruption through such relationship with the Ministers and officers of Government. I would strongly urge Parliament to insist on obtaining this information from Government.  The economic future of this country can be assured by creating a climate in the country which would make possible a regular flow of capital from foreign investors. Apart from other things, the most important deterrent today is the pattern of taxation. In an amateurish attempt to plug all real and imaginary loopholes, a pattern of taxation has been devised which can only result in destroying all incentive to enterprise in the country and to act as a scarecrow to possible investment from abroad. Unless, therefore, there is a radical overhaul of this fantastic pattern of taxation, it is difficult to see how further development on any extensive scale can be expected in future.  In the background of our experience of the last ten years, it is becoming increasingly clear that large-scale and rapid economic development cannot be the exclusive responsibility of one ruling party in the country. Certainly the members of this ruling party cannot claim that they are the exclusive and ultimate repository of all economic wisdom in the country. If our economic future is to be ensured on right lines, what is needed today is the pooling of ideas, experience and resources of all citizens of the country irrespective of their political affiliations. Amateurs of yesterday cannot be accepted by the country as authorities on planning and public finance. The actions of such men have landed the country today in a mess which now calls forth the combined wisdom of all sections of the community to find a way out. The attempt to destroy the acquisitive society is fast turning into an acquisitive society and the continuous addition of powers assumed by Government happens to turn this country into an authoritarian State. Let us pray that both wisdom and realism will soon dawn upon the authorities in power and this country may be saved from the disaster with which it is faced today._Last week's musing: [MANIFESTO FOR INDIAN LIBERALS](https://indianliberals.in/content/manifesto-for-india-liberals/)_ --- ## [Musing] Panchayati Raj URL: https://indianliberals.in/musings/panchayati-raj/ ### Body _This article was published in the March 1961 issue of Freedom First by Jayaprakash Narayan, popularly referred to as Lok Nayak (Hindi for "People's leader"). This excerpt was part of a paper prepared for the Seminar on “South and South-East Asia has Second Look at Democracy.” You can read the original, unabridged version _[_here_](http://www.freedomfirst.in/uploads/issues/pdf/106.pdf)_.__ _In the past few months much has been written about Panchayati Raj and there is no need to describe it in any detail. A few observations, however, are called for. First, it should be noted that the initiative for Panchayati Raj originally came not from the political motive of broadening the bases of our democracy or laying the foundations of what I have called ‘participating democracy’ but from the anxiety to obtain full public cooperation in the execution of development programme. On account of this restricted aim with which the experiment was started, its significance has not so well been grasped even by the conscious political elements in the country, much less by the people at large. It is clear, however, that the logic of the movement is driving it forward and constantly enlarging and deepening its implications. There is still a need, however, to arouse popular enthusiasm about this measure and to make the people realize that what was intended was not a procedural reform of the administration at the lower levels but a political revolution of the greatest significance for the people: that in effect the intention and the attempt were to bring Swaraj to the people. This understanding and enthusiasm cannot be brought about by Development Officers but by the democratic and popular leaders of the country irrespective of party and ideology and by social workers and intellectual and moral leaders generally. In order for the Panchayati Raj may become the base of a true participating democracy, certain conditions must be fulfilled. First, the education of the people, understood in the widest sense of the term, is an essential condition for the success of the experiment. This education can best be imparted by disinterested, non-partisan agencies engaged in social service or tasks of rural development. Political parties may also make a great contribution in this respect, provided they address themselves to the task in a non-partisan spirit. Perhaps the best way for them would be to create a common agency through which to carry on this work. Government officers and agencies might also do useful work in this sphere. Schools, libraries, and cooperative societies have an important role to play here. It should also be considered whether a non-party and purely educative body of the voters which might be called the 'All-India Voters' Association' should not be formed in order to render educative service to the voters. There might also be a Centre jointly set up and conducted by the Union Community Development Ministry, the All-India Panchayat Parishad, and other All-India Rural Service Agencies. Such a Centre could help by way of producing literature, conducting surveys, studying problems, etc. Second, it is well worth emphasising that the success of the Panchayati Raj would depend upon the extent to which organised political parties refrained from interfering with it and trying to convert it into their hand-maiden and use it as a jumping ground to climb to power. There is no doubt that as consciousness grows among the people at the ground level, they would be less liable to be moved about as pawns by political parties and ambitious politicians. But in the initial stages, it is necessary for political parties, in the interests of the people whom they claim to be anxious to serve, to place themselves under a self-denying ordinance and keep away from either setting up party candidates or putting pressure on the elected representatives to become party members, so as to be able to control the basic institutions of democracy. Third, there should be a real devolution of power and not a make belief. It is possible to construct the outward structure of Panchayati Rai and to give it no substance. That would be like a body without a soul, dead from the start, a stillborn child. What is needed here are sincerity, imagination and courage. The people must be trusted. There is a tendency among those of us who have received some education to distrust the ability and intelligence of the common people, and it is possible to talk of devolution of power without in reality surrendering any power. No one can learn to discharge responsibility unless responsibility was really given to one. Withholding of responsibility, either on account of a lack of confidence in the people or of reluctance to surrender power, would lead naturally, as it has already done to a considerable extent, to an attitude of irresponsibility in the people who will forever be the look-out for heroes and miracle-makers to solve their problems. It is out of such a psychological situation that dictators are born. For democracy to be a success, it is necessary that the people are prepared and given full opportunity to shoulder responsibility. Fourth, it is imperative that at each level the local authority should be given its own minimum resources. If control of resources remains in the hands of the State Government, the devolution is bound to be rather nominal. ‘He who pays the piper calls the tune’ would be as true here as anywhere. I am afraid in this sphere the progress has been even less marked than in the case of the devolution of authority and functions. In this connection, Iand revenue, even though it does not amount to very much, should be the first resource to be placed totally at the disposal of the village Panchayat and Panchayat Samiti. It should not be the prerogative of the State Government to allocate certain sums out of land revenue to these bodies. Subject to an equalization fund for the purpose of aiding the poorer villages and blocks, the entire land revenue should be left in the hands of the Panchayats and the Samitis.  Other possible sources of revenue must be found and placed at the disposal of the Panchayati Raj in order that it might function with dignity and enjoy its autonomy. Fifth, Panchayati Raj should be able as soon as possible to exercise real authority over the civil servants under its charge, who should be held fully accountable to it. Even in the matter of recruitment, it would be advisable to associate with the local authorities or their nominees. At the same time provision should be made to assure the civil servant's justice and security of service and freedom to discharge their duties without improper interference. Sixth - and as important as any of the previous conditions - it is my emphatic view that elections to village panchayats should be held without any electoral contests. This view has been severely criticised in some quarters. In some other quarters, opinion seems to have veered around to my point of view. I should like to say that the more I have thought over this question, the more convinced have I become that if Panchayati Raj is to succeed, contests in the elections to village panchayats must be avoided. The village today is a much-divided house. There are caste and class differences; there are family and other factions. There is no collective will in the village. On the other hand, the task that the villages face can never be tackled unless there is a united and collective effort. A community spirit must first be created before there might be proper community development. To introduce electoral contests into the village is to throw a monkey wrench into the works. Several suggestions have been made as to how contests could be avoided. It should be remembered that I am speaking only of the village panchayats which, it has been generally agreed, should not be constituted of more than a thousand to two thousand souls. If the principle is accepted, it should not be difficult to find a way of putting it into practice. Unfortunately, it is the view in many quarters that unless there is an electoral contest, there is no democracy. It is this static, abstract and narrow view of democracy that comes in the way of finding a solution. But I am certain that unless a solution is found, Panchayati Rai and participating democracy would never be a success. While the attempt to establish Panchayati Raj is a step in the direction of a more stable, popular and satisfying form of democracy, a step that, when properly executed, might succeed in taking swaraj to the people, it is not adequate by itself. In order that the edifice of democracy might be strong and invulnerable, the top layers of it must be built into the foundational structure. But, as the situation stands at present, the foundational structures will rise only upto the district level. Beyond which, i.e., at the State and Union levels, a completely different structure will continue to exist, resting on nothing more solid than a sand heap, namely, the amorphous mass of individual and disparate voters. This is a very unhappy mixture of two different principles and processes of democracy that, like water and oil, will not mix. The differences between the two may be summed up as follows: The system that rests on individual voters has invariably a tendency towards concentration of power at the top, while the other system tends towards dispersal of power; in the former, organised parties that are run from above by small and powerful elites play the decisive role; in the latter, communities and communal representative bodies working from below exert the decisive influence; in the former, again, the representatives elected by the unorganised voters are not and cannot be under their control, in the latter the communal bodies exercise a continuous influence over the representatives they send to the higher levels; in the former system peoples’ participation is limited to casting of votes, in the latter there is direct participation of the whole people through the _gram sabha_ and fairly close participation through the higher communal representative bodies; in the former system elections are expensive, in the latter just the opposite; the former requires mass media of propaganda and involves unhealthy psychological and emotional excitement, in the latter these evils are reduced to the minimum; in the former most voters are more unlikely to understand the issues which are placed before them than in the latter in which the voters at each level are likely to be well acquainted with the problems that they have to deal with. It has been observed earlier that the amorphous, or inorganic, democracy, based on individual voters, tends to concentrate power at the top and does not provide for any control over the voters' representatives. This is a very vital matter but unfortunately is not much appreciated. In this type of democracy, there is hardly any force that tends to pull power down towards the people. The voters, though their number may run into millions, in the nature of things lack any organizational means to check the upward concentration of power. There are, of course, political parties and their membership too might run into millions, but the trend everywhere is, even in the democratic parties, for power to be concentrated in a caucus of leaders. There are also special interests, chiefly economic, that attempt to influence this type of democracy, but this influence tends to be exercised over the centres of power. The growth of economic centralization which aids and abets political centralization has already been referred to. It is true that there are trade unions, cooperative societies and other similar organizations that provide a broadening structure for this democracy, but (a) they are not built-in structures of the democratic pattern concerned and (b) they themselves tend to become top-heavy and over-centralized. The position is quite different in the case of participating or organic democracy. It is indeed being created in our country right now, but quite illogically, only halfway through. Because this democracy will be built up several tiers beginning with the basic tier of the _gram sabha _(which should be distinguished from a mere arithmetic sum of the voters in the village because it is endowed with a political entity and definite collective powers and privileges) and going up to the Lok Sabha, and because the powers and functions and duties and resources of each tier are clearly defined, power cannot but be dispersed in this system. Further, because the higher tiers are constituted of the representatives of the bodies at the lower tiers, power is much more likely to be exercised from below upwards rather than from the top downwards. For the same reason, the representatives at the higher level are under the constant gaze of the bodies–they are organised, statutory bodies and not a mere collection of amorphous individuals, let it be remembered–at the lower levels, and thus subject to the control of the latter. This little elaboration will serve to make clear the vital differences between the two types of democracy. Now if Panchayati Rai stops at the district level and above that, shall we say, Party Raj rules supreme, the people are bound to feel cheated. They will interpret this illogical situation to mean reluctance on the part of the politicians really to give up power. It should seem to them–and they would be right–that real power still remained locked up in Delhi and the State capitals and that what had been given to them was not the real stuff. This kind of disillusionment might produce disastrous results. Therefore, Panchayati Raj must not be terminated at the district level but extended forward upto New Delhi. Although this cannot be, done immediately, this should be declared to be our goal. _Previous musing: [Constitution and the Common Man](https://indianliberals.in/content/constitution-and-the-common-man/)_ --- ## [Musing] Pandita Ramabai: A Trailblazing Feminist URL: https://indianliberals.in/musings/pandita-ramabai-a-trailblazing-feminist/ ### Body _Pandita Ramabai (1858-1922) was an Indian social reformer, women's rights activist, scholar, and educator. She is best known for her pioneering work in promoting women's education and empowerment in India, publishing books on a wide range of topics, including the status of women in India, the Bible, and Sanskrit literature. She travelled extensively in India and abroad, advocating against child marriage, widowhood, and other social injustices against women. Ramabai's life and work continue to inspire feminists, educators, and social justice activists worldwide._ Born on April 23, 1858, in a Marathi-speaking Brahmin family as Rama Dongre, Ramabai was the daughter of Lakshmibai and Anant Shastri Dongre, a Sanskrit scholar and roving reciter of Hindu epics and religious books. Ramabai had two elder siblings: her sister Krishnabai and her brother Srinivas.  When her parents and Krishnabai died in the great famine of 1876, Ramabai, equipped with only her education, moved with Srinivas to Calcutta for a better life. Upon reaching Calcutta, Ramabai defied societal expectations and took up the cause of distressed women as her calling. She made a name for herself in the city as a reputed scholar and passionately advocated for the emancipation of women. At the age of twenty, she became the first woman in India to earn the titles of **_Pandita_** (the feminine of pundit, or Sanskrit scholar) and **_Saraswati_** after examination by the faculty of the University of Calcutta. She joined the **_Brahmo Samaj_** in June 1880. The same year, after her brother's death, she married his friend, Bepin Behari Das Medhavi, a Bengali lawyer from a lower caste- thereby creating fury amongst the society members. Her only child, Manorama, was born in April 1881. Less than a year later, her husband died of Cholera, leaving her in the unenviable situation of a high-caste Hindu widow. After Medhavi died in 1882, Ramabai moved to Pune, where she founded the **_Arya Mahila Samaj_**, a society of high-caste Hindu women working to educate girls and against child marriage. She published her first book, **_Morals for Women_**, in the original Marathi _Stri Dharma Niti_. She also testified before the Hunter Commission on Education in India, an enquiry set up by the British government. She suggested that teachers be trained, women school inspectors be appointed, and that Indian women should be admitted to medical colleges. Ramabai’s evidence created a great sensation and reached Queen Victoria. In time, it also contributed to the beginnings of the Women’s Medical Movement, which aimed to improve women’s healthcare in India. Through the influence of Nehemiah Goreh’s apologetical writings, she became intellectually convinced that whatever was true in Brahmo theology was Christian in origin. In 1883, during her visit to England, she was baptised in Wantage, England, and pursued her studies at the Cheltenham Ladies’ College and Bedford College. She was in Europe to pursue a medical degree; however, her deafness caused serious impediments to her medical education. Instead, she used her time to continue the study of Christianity, which she had begun in India and had her young daughter baptised as Anglican Christian. From 1883 to 1886, Ramabai was, in the formal sense, an Anglo-Catholic, lecturing and studying social reform and education.  Having relinquished her dreams of a medical degree, in 1886, she travelled to the USA to attend the graduation from the Women’s Medical College in Philadelphia of Anandibai Joshee, the first Indian woman to become a medical doctor, who was also her cousin. She remained in the USA for two years, translating textbooks and giving lectures throughout the United States and Canada. In 1887 she published her first English book, **_The High-Caste Hindu Woman_**, a relentless indictment of Hindu India’s treatment of its women. The same year, Ramabai met Frances Willard–an American educator and a woman suffragist– who later invited her to address the convention of women’s organisation. On February 1, 1889, Ramabai returned to India and, within a month, established **Sharada Sadan**, or the Home of Learning, in Bombay with two students. She successfully lobbied for aid to start a secular school for child widows in India and formed **The Ramabai Association**, which pledged ten years of financial support for the cause. Under the **_Mukti Mission_**, the school quickly grew and was transferred to Poona. In 1891, the school was involved in controversy when the Indian reformers condemned Ramabai for preaching Christianity to students. Despite the condemnation, by 1895, the school was a resounding success, with 26 child widows and 13 non-widows in the school.  In 1896, during a severe famine, Ramabai toured the villages of Maharashtra with a caravan of bullock carts, rescuing thousands of children, child widows, orphans and destitute women and bringing them to the shelter of Mukti and **_Sharada Sadan_**. By 1900, 1500 residents and over a hundred cattle were in the Mukti mission. The **_Pandita Ramabai Mukti Mission_** is still active today, providing housing, education, and vocational training to widows, orphans and those with sight impairments. Her daughter Manoramabai also established a new school, and in 1919, government recognition was finally granted to the Sharada Sadan School. Pandita Ramabai was awarded the Kaiser É Hind Medal in 1919. By 1920, Ramabai sensed a growing physical weakness and designated her daughter to supervise the activities of the Mukti Mission. Manorama died in 1921, and Ramabai herself died in 1922. She authored several influential works in her lifetime, including **_The Testimony of an Indian Woman_**, **_Pandita Ramabai’s American Encounter: The Peoples of the United States (1889)_** and **_Mukti Prakash_** (1923) - a Marathi-language book compiled and published posthumously by her followers. Through these works, she brought the plight of women in Indian society out of the closet and made relentless efforts to realise their emancipation and empowerment. **References ** Zubaan. [_Pandita Ramabai_.](https://artsandculture.google.com/story/pandita-ramabai-zubaan/4wVx8_4U248xIQ?hl=en) Google Arts & Culture. Eric J. Sharpe, “[Ramabai, Dongre Medhavi.](https://www.bu.edu/missiology/ramabai-dongre-medhavi/) The History of Missiology, Boston University. Edited by Gerald H. Anderson (New York: Macmillan Reference USA, 1998), 557. _Previous musing: [Government and Society in a Free and Prosperous Commonwealth](https://indianliberals.in/content/government-and-society-in-free-commonwealth/)_ --- ## [Musing] Pitfalls in Our Industrial Policy URL: https://indianliberals.in/musings/pitfalls-in-our-industrial-policy/ ### Body _The following booklet, titled “Pitfalls in Our Industrial Policy,” was published in 1959 and was authored by M A Master. The author highlighted the momentum of private enterprise that made it possible to develop several privatised industries against all the substantial odds. He highlighted the radical shift that transgressed to economic thinking, leading to the state's industrial policy breach against the private sector. M A Master concentrated on the approach the then government adopted and highlighted the creation of economic revolution and the monopoly of the State. Furthermore, the author focused on the democratic stand, corroborating the balance between the public and the private sectors, and laid down the contention of anything contrary to the former approach as the model for the prevalence of dictatorship._ _The author concluded by accentuating the prevention of the concentration of wealth and power in the hands of a few individuals through the governance of the fundamental principles in the directive policy of the State. _ While India was under British Rule, there was no national policy for the industrialisation of the country. It was in the interest of Great Britain that India should continue to be the exporter of raw materials and the importer of finished products. It was only a few years before the fight for Independence gathered strong momentum that the Policy of discriminating protection was announced. It was halting and half-hearted. That Policy was hemmed in with so many limitations and restrictions that neither could it provide opportunities nor supply a driving force for India's rapid and all-sided industrial development. Private enterprise has, therefore, earned the country's gratitude for the faith and courage with which it developed such industries as Textiles, Jute, Steel, Sugar, Shipping, etc., against heavy odds and at considerable sacrifices. With the advent of independence, the position has radically changed. The days of laissez-faire have been over. The age of development under a planned economy has already gathered strength. It should not, however, be forgotten that Private enterprise had recognised the need for a planned economy even before India obtained her freedom. The publication of the Bombay Plan in 1944 was one of the most remarkable documents which recognised and advocated the vital need and great importance of developing the country in all directions under a well-thought-out and well-balanced plan. On the 6th of April, 1948, the Government of free and independent India announced for the first time the National Industrial Policy of the country. It made it clear that the manufacture of arms and ammunition, the production and control of atomic energy, and the ownership and management of railway transport shall be the exclusive monopoly of the Central Government. It also laid down that in six other industries, viz., coal, iron and steel, aircraft manufacture, shipbuilding, manufacture of telephones, telegraph and wireless apparatus and mineral oils, the State alone will be exclusively responsible for the establishment of new undertakings.  The rest of the industrial field will normally be open to private enterprises, individuals, and co-operatives. The economic thought in New Delhi had not visualised at that time the public sector becoming the dominant feature of the industrial landscape purely on ideological considerations. It is also significant to note that the First Five-Year Plan made the following categorical national policy statement. It laid down that _“**the scope and need for development are so great that it is best for the public sector to develop those industries in which private enterprise is unable or unwilling to put up the resources required and running the risks involved, leaving the rest of the field for private enterprise.**”_ The first radical shift in this economic thinking of the Government came with the nationalisation of air services on the 1st of August 1953. This was the first breach in the Industrial Policy of the State. With the return of the Prime Minister from China in the latter part of 1954, the government's economic thinking witnessed a further fundamental departure from the announced industrial Policy of India. Although the First Plan had stated that “the ownership and the control of the material resources of the community are so distributed as best to subserve the common good”, the Prime Minister announced on the 9th November 1954, before the National Development Council, that “the means of production should be socially owned, and controlled for the benefit of society as a whole.” Here lay the vitalising germ of the revolution in the economic policy to follow. On the 21st December 1954, the Prime Minister remarked in the Lok Sabha- “We cannot progress except by State initiative and by enlarging the public sector and except also by controlling the private sector.” This was followed by another statement made by the Prime Minister in his address to the A.I.C.C. on the 19th of January, 1955, when he clinched the issue and observed- “In any planned approach to a socialised economy, the public sector must grow and become the dominant feature of the landscape.” With the Lok Sabha of the Avadi Resolution's endorsement for establishing a Socialistic Pattern of Society, the revolution in economic thought in New Delhi was complete. The private sector's ability and willingness to play its part were no longer the criteria for the country's industrial development. The ideological considerations underlying the new gospel of building up a socialistic pattern of society would alone be the determining force of the future industrial Policy of India. The invasion of the rights of private property guaranteed by the Constitution, the provision of a clause in the Act making the compensation issue unjustifiable, and the investing of the Government with full powers to acquire any industry and run it at the risk of the shareholders without the payment of any compensation, was the first revolutionary steps taken for the building up of a socialistic pattern of society by making vital changes in the Constitution of India. There was no halt in this onward revolutionary march of the Government. The Imperial Bank of India was nationalised in July 1955; the Life Insurance Companies in the country were swallowed in one stroke by the State in January 1956. There was thus a three-fold attack on private enterprise. The people were deprived of their sacred rights of property. The services they had built up with the struggles and sacrifices of several decades were taken away by the State. The streams which provided finance for the private enterprise were brought entirely under the control and ownership of the State. The real objects of nationalising Life Assurance seem to be two-fold: the first was to take over crores of rupees which accumulated from the premia collected by the Life Assurance Companies, and the second was to obtain control, when necessary, over several important industries in which the Life Assurance Companies held a substantial number of shares.  Nationalisation was coming in by the backdoor. This was the new technique of the Government to provide opportunities for the people to cooperate with them, and all this in the name of democracy! The visit of the Prime Minister to China and Russia had brought new wisdom and a new philosophy which, no doubt, were playing their effective part in shaping the future destiny of our country. The new industrial policy resolution was announced on the 30th of April, 1956. The revolution in the government's economic thought, manifesting during the First Plan period in several directions, as mentioned above, found its fuller and more vigorous expression in the new national industrial Policy placed before the county. Not only was the field of activities of the private sector drastically limited, but it was also assigned a subordinate place even in the industries in which it had been allowed to play its part. The ability and the willingness of the people, as mentioned above, will not continue now to be the true tests of economic growth and the speeding up of industrialisation. Still, the ideological considerations and the zeal for establishing an egalitarian society will inspire the State to “progressively assume a predominant and direct responsibility for setting up new industrial undertakings and for developing transport facilities.” The resolution added that “the adoption of the socialist pattern of society as the national objective as well as the need for planned and rapid development, require that all industries of basic and strategic importance or in the nature of public utility services, should be in the public sector.” The new philosophy was thus creating a new economic revolution. Even the field of trade and commerce was to become the monopoly of the State. The resolution stated that the State “will also undertake state trading on an increasing scale.” The country has already witnessed the unjustifiable inroads of the State Trading Corporation in diverting several trades from their normal channels to the monopolistic field of the State and under State control. People engaged in some of these trades have lost their means of livelihood. This is how the socialist pattern of society is being built up, and this is how democracy functions in actual life. It is difficult to imagine how it will affect the country when the procurement and distribution of foodgrains are brought completely under the control of the State. Eleven more industries have now been included in the field of industrial development, which will be the exclusive monopoly and responsibility of the State. Even in the field of industries where the private sector is allowed to function, the resolution has made it crystal clear that it will be the Policy of the State to “take the initiative in establishing new undertakings.” Private enterprise is expected now even in that field, namely, the 12 industries included under schedule ‘B’, merely “to supplement the effort of the State.” Private enterprise will not be allowed in future to be the driving and inspiring force of creating a new industrial India. Still, it will only be allowed to play a minor role as an agent for planned national development._You can access the complete, unabridged musing [here](https://indianliberals.in/forum-of-free-enterprise/pitfalls-in-ouri-ndustrial-policy-m-a-master-nov6-1959.pdf)._ _Previous musing: [Pandita Ramabai: A Trailblazing Feminist](https://indianliberals.in/content/pandita-ramabai-a-trailblazing-feminist/)_ --- ## [Musing] Parth Shah on Education and Choice URL: https://indianliberals.in/musings/parth-shah-on-education-and-choice/ ### Body The following is an excerpt from the transcript of Education in India (an audio podcast) hosted by K. Satyanarayan with Parth J. Shah (Founder President of Centre for Civil Society). The podcast was recorded on June 09, 2014. In the excerpt, Parth comments on the importance of “choice” as a prerequisite to articulating the definition of quality education. In any country, there are three key issues that plague education- access, quality and equity. All three hold equally true in the case of India as well. In terms of the first issue, there is pretty good consensus now that we have been able to provide access to education to most children in India through SSA and other government reforms. The key challenge remains of quality and equity. Equity cannot be addressed without first gaining clarity on what we mean when we say ‘quality of education’. So we looked into the relevant literature, and what we realised is that quality is ultimately in the eye of the beholder. There is no absolute standard of quality. Of course we can agree on many parameters of quality, there’s no doubt. But to say definitively that this is quality and get everybody to agree to it is next to impossible. So we worked backwards and looked at the consumers of education. Parents and students can only articulate what good education or quality education is, if they are able to explore different options by having the freedom to choose. What follows then is that choice is a prerequisite for defining quality education. As long as we create an ecosystem of education, where every parent has a choice of school, choice of pedagogy, choice of curriculum, of examination system etc., then the consensus on the definition of quality education can be reached more organically. There has to be a bottom-up approach to defining quality rather than something that comes top-down. But without the first step of ‘choice’, the progression to what quality education is and how it should be disseminated is moot. Note: The full version of the trancript can be found [here](http://prayatna.typepad.com/files/2014_06_09_parth_shah_education_in_india_podcast_transcript.html). --- ## [Musing] Philosophy of Freedom URL: https://indianliberals.in/musings/philosophy-of-freedom/ ### Body _Published in Freedom First Magazine 1955, the following article by Mr. M.B Shah has timeless relevance to issues surrounding the idea of freedom, the position of an individual and the challenges of totalitarianism which the world faces in various forms. The author attempts to bridge the gap between positive and negative freedom while recognizing the sovereignty of the individual. _The function of philosophy is to find out the fundamental postulates from which a particular system of thought or values is derived. The task of the philosophy of freedom is to explain the basis on which the value of freedom is founded. In nature itself there is neither freedom nor bondage. Freedom is a human value. The primary urge of every living organism is to exist, grow, develop and perpetuate its species. In order to satisfy this primary urge, the living organism has to act on its surrounding environment. In the sub-human animal world, this urge leads to mechanical adaptation to the environment. However, as man has a better organized neural system endowing him with the powers of memory, reflection and transmission of his experiences to his like species, the primary urge expresses itself in conscious action and reaction to his environment. In the course of this action and reaction on the environment, man gathers experiences and knowledge of his surrounding nature. This knowledge becomes a powerful lever in man's further progress. However, man as an individual is powerless to struggle against the mighty forces of nature. Hence, his co- operation with other human beings which ultimately results in the development of society and all its various organizations, political, economic, social, cultural, spiritual and the like. With the help of these organizations growing up in the course of the satisfaction of his primary urge, man embarks upon the attainment of freedom. Freedom can be defined as "the progressive disappearance of all restrictions on the unfolding of the potentialities of the individuals as human beings and not as cogs in the wheels of a mechanized social organism". _(M N Roy in the Principles of Radical Democracy)_. Functionally, freedom means "the conditions necessary and sufficient for the formation of a purpose, it's translation into effective action through organized cultural instrumentalities and the full enjoyment of the results of such activity”. _(Bronislaw Malinowsky in Freedom and Civilisation). _ Freedom has two sides, one positive and another negative. Negative freedom is freedom from the forces crushing man's assertion of individuation from the rest of the nature including human society. Positive freedom is one which creates the necessary conditions and affords proper opportunities for "the realization of his individual self, i.e. the expression of his intellectual, emotional and sensuous potentialities". _(Erich Fromm in The Fear of Freedom)_. ln the course of his struggle for the satisfaction of his primary urges, man has to struggle against nature to secure his physical requirements like food, shelter, clothing, etc. The overpowering of natural forces has been attained to a very large extent and man has now come of age with the help of scientific knowledge and technological advancements. Likewise, in the course of history, man progressively liberated himself from the controlling forces of church, state and social slavery. With the ushering in of the industrial revolution, a powerful ideology of liberalism and economic laissez faire made man a completely individualistic person to care for himself. However, this very process of individuation from the original ties working for his security and oneness with nature and society made him also an atomized individual to make his way wherever he could single-handedly. With the Declaration of the Rights of Man in the great French Revolution, man's inherent dignity was asserted. Democracy, the greatest invention of man's genius. was ushered in and put on a practical experimental plane. However, in practice, it turned out that democracy was working in the social and economic frames which were not conducive to the assertion of human dignity and realization of the best potentialities in man. Man was not considered as an end in himself to be respected and cultivated but an economic entity driven by his animal passions and selfishness. ln these circumstances, the ideals of fraternity, equality and liberty were negatived in practice and man became a lonely and powerless creature at the mercy of uncontrollable economic and social forces. Man of flesh and blood ceased to be an entity, an end in itself. lnstead of security and co-operation of society, man became isolated from society and a dichotomy was created between man and society. The issues were posed like man versus society, freedom versus organization, etc. instead of man in society, freedom with organization and the like. Thus all the values of man like love, brotherhood, creativity, etc. were nullified in practice. Individual man not endowed with the biological superior capacities to make room for himself by elbowing out others and also man with principles and scruples was relegated to the devil's care as good-for-nothing. The result was man's loss of confidence in the utility of freedom and democracy, the loss of confidence in himself and in society. Ultimately, helplessness, resignation, frustration, destructiveness, submissiveness and such other anti-human and anti- social characters took hold of man. Man became afraid of his own freedom and was prepared to surrender the same in search of security though it may be an illusory one. Man preferred to be either a slave, master or an automation rather than a free, spontaneous, creative, acting and loving person. In this situation of frustration, resignation, submission and destructiveness all sorts of totalitarian and authoritarian ideologies like fascism, nazism, nihilism and communism drawing their inspiration from extra-human forces possessed man. All these movements exhibited and exhibit the symptoms of the sickness of society and the spiritual and cultural crises of mankind. They all promised panaceas and liberation from anxiety, isolation, frustration, resignation. ln the search of security from this burden, man surrendered his freedom and self to these authoritarian and totalitarian ideologies. After the defeat in the last world war, fascism and nazism have been weakened to a very large extent, though they are not completely annihilated. However, on account of the combination of certain factors, communism has come out as a nightmare to the free world. It has expanded its control over vast areas and populations. And with the resources at its command, it is threatening other parts of the free world. Therefore, the main problem facing mankind today is freedom versus totalitarianism. All other problems and issues are either subordinate to this problem or merge in it. However, if totalitarian onslaughts are to be fought out, democracy will have to orient itself to positive freedom and will have to overhaul its social, economic, cultural and spiritual set up with a view to give full scope for the assertion of the human self, i.e. for the full realization of emotional, intellectual and sensuous potentialities of human beings. Its new set up will be of a kind in which man's individualism is integrated with society on a higher level of co-operation, equality, liberty, creativity and love as between free men. The economic-man will have to end and a new rational and moral man will have to rise to take his place. The whole social set up will be based on the principle that he is the measure of all values. All collective endeavours will be measured in terms of the actual benefit conferred on constituent units. The position of the individual will be the measure of the progressive and liberating significance of any collective effort or social organization. As Erich Fromm states in his _Fear of Freedom_, "The victory of freedom is possible only if democracy develops into a society in which the individual, his growth and happiness, is the aim and purpose of culture, in which life does not need any justification in success or anything else, and in which the individual is not subordinated to or manipulated by any power outside himself, be it the state or the economic machine; finally, a society in which his conscience and ideals are not the internalization of external demands, but are really his and express the aims that result from the peculiarity of his self. These aims could not be fully realized in any previous period of modern history; they had to remain largely ideological aims, because the material basis for the development of genuine individualism was lacking. Capitalism has created this premise. The problem of production is solved in principle at least - and we can visualize a future of abundance, in which the fight for economic privileges is no longer necessitated by economic scarcity. The problem we are confronted with today is that of the organization of social and economic forces, so that man - as a member of organized society - may become the master of these forces and cease to be their slave" **Mr. M. B. Shah was a rationalist and a businessman.** The article was originally published [here.](http://www.freedomfirst.in/uploads/issues/pdf/455.pdf) --- ## [Musing] Piyush vs Piyush -‘Beautiful Policies are Not Enough’ URL: https://indianliberals.in/musings/piyush-vs-piyush-beautiful-policies-are-not-enough/ ### Body In the following passage, Luis Miranda recounts the highlights of a gripping panel discussion at the AIIB AGM wherein a Minister and CEO articulated the loopholes of policy-making in India. While the policies may seem effective on paper, their “operational challenges” render them handicapped. Luis, thus, underscores the need to create policies that can be implemented on the ground as well as they can be expressed on paper. Policy stability is more than just drafting ‘beautiful’ policies; if there are hurdles to implement them, it is not easy to do business. These are the words of the President of the Asian Infrastructure Investment Bank (AIIB), Jin Liquin, as he played referee at the battle of the two Piyush’s recently at the AIIB AGM in Mumbai. They were on a panel to discuss mobilising finance for infrastructure in Asia. Most panels are boring because everyone is polite and agrees with the other panellists. This one was different because two panellists had very different views — Piyush Goyal, India’s Finance Minister, and Piyush Gupta, CEO of DBS Bank Singapore. The fact that we could have such a frank exchange of views is a tribute to the open society that we have in India. So, here are the highlights of the Piyush vs Piyush debate. Piyush Goyal kicked off with a very lucid summary of the regulatory environment in India. He talked about how infrastructure improvements have transformed lives in India. And how the integrity of processes and individuals are attracting funding to infrastructure. He quoted examples — licenses cannot be subsequently cancelled and he talked about the change in mindset with more focus on monitoring and accountability. If projects are designed properly there will be enough finance. India has rule of law and frameworks like the media and public response. India has never had a default in international infrastructure financing. Politics will continue to play a role in any democracy, and that should be factored in when looking at the large opportunity in the country. He also talked about how land acquisition challenges are being reduced by involving communities in the upside of infra projects. Piyush Gupta, the CEO of DBS Bank of Singapore, countered by saying that money is not that easy to come by for projects in India. There is an urgent need for long term debt markets. Pre-operation risks like land acquisition have deterred investors and regime changes across the region have led to policy uncertainty (as is being currently seen in Malaysia). Banks need more capital for longer tenor loans and higher perceived political risks. He concluded that in India there is indeed no sovereign risk, but there is significant project risk. If the government anchored key infra projects, the risk could be significantly reduced. Jin Liquin moved in to say that money is like water — it follows the path of least resistance. Therefore, governments should not just focus on policies. They should also help reduce the practical difficulties faced by infra developers and financiers in their daily work. And therein lies a lesson for policy makers — drafting good policies is not enough. Day-to-day hassles faced by infra developers have also to be also addressed to see significant increase in private sector participation in infrastructure. The key central ministries in India — power, roads and railways — have seen huge investment interest thanks to the policies of the central government. But operational challenges at the State level and challenges with the implementation of these policies can negate the benefits of ‘beautiful’ policies. --- ## [Musing] Planning by Minoo Masani URL: https://indianliberals.in/musings/planning-by-minoo-masani-1945/ ### Body _The following piece on 'Planning' is taken from Minoo Masani at 90 published by Freedom First in 1995. This article written by Minoo Masani in 1945 takes the reader through various viewpoints on Central Planning and the role of the state. You can read the original article [here.](https://indianliberals.in/liberals/minoo-masani-at-90-freedom-first-1995.pdf)_ Who is to organise the increased production, and who is to see to it that the benefits are equitably shared? The answer is - we ourselves, all of us. After all, this is our country, or rather it is going to be, and if we don't do all this, who else will? Our instrument for this purpose is the one which people throughout the world have created to manage their affairs. This is called the Government or ,the State. Now, what kind of Government or State shall we need in order to put such a Plan into effect? A British scientist recently declared that India's greatest need is the fuller application of science to her problems. A Plan like this is in fact nothing more than the application of various sciences to our economic problems. We have to make sure, however, that the people who give effect to the Plan will have only the interest of our people at heart. Just as an injection can cure or kill a man, so too a Plan can enrich or ruin a country. And because the patient must have confidence in his doctor, a Plan such as this can only be put into operation by a purely Indian government representative of the people. That does not mean that any and every government made up of Indians will do. We shall have to see to it that it is not made up of selfish people who are out to feather their own nests. The only method human beings have so far devised of guarding against selfish cliques is what is called democracy - that is, making the government look for its authority to the people as a whole. Such a government is called a responsible government - that is, it is elected by the people, it is responsible for its actions to the people, and it can be removed by the people. Abraham Lincoln described it as government of the people, by the people and for the people. This is the only kind of government which can be trusted with a Plan of this kind. For many years now, people have been arguing about the respective merits of various kinds of economic systems. Roughly, they have so far been labelled as either 'capitalist' or 'socialist'. To put it very simply, a capitalist society is one where the ownership and control of things like land,' mines, factories, ships, railways, banks and shops belong to individuals or groups of people organised in what we know as corporations or joint-stock companies. Those who own and control these enterprises supply the wants of the people, and, in the course of doing so, make profits and run the riskof losses. Another name by which the capitalist system is known is that of Free Enterprise. A socialist society by contrast is one where the instruments of production, distribution and exchange are owned and controlled by the State representing the community - all individuals being employees of one kind or another of the State. The State meets the wants of the people by planning production and distribution in such manner as it thinks best. The profits of production go to the State which can then use them for the good of the community as a whole. It is claimed that such a system of society would not only make for increased production but also for equitable distribution and would create a classless society based on the principle: From each according to his capacity, to each according to his need. Actually, neither system in its pure form exists at present in any country in the world. On the one hand, in what are called the capitalist countries, the principle of free enterprise has in the course of this century been so largely modified by State intervention in various spheres of economic activity that 'in many of its characteristic aspects capitalism has been transformed almost beyond recognition." On the other hand, Russia, which after the revolution of 1917 attempted to build a socialist society, has in recent years found it necessary to accept the capitalistic ideas of competition and differential monetary reward as incentives to efficient production. Also, the claim that Russia has been able to raise the standard of life of the people only because of collectivization is not borne out by the facts. All this indicates the desirability of concerning ourselves with ways of life rather than with labels. Experiments in developing what has been called a middle way of life have so far been successfully carried out in small countries like the Scandinavian States of Sweden, Finland, Norway and Denmark, and in such regions as the one served by the Tennessee Valley Authority in America. Professor Julian Huxley has written that 'the initials TVA are beginning to be familiar as the symbol of a new possibility for the democratic countries - the possibility of obtaining the efficiency of a co-ordinated plan without totalitarian regimentation' A more positive role to be played by the State in the economic sphere is the prerequisite of all planning. The control of the instruments of production, distribution and exchange is the method by which the State can perform this task. In India, the land is by far the greatest single unit of production. What part is the State going to play in relation to the land? Today, only about a third of our land belongs to those who actually cultivate it. The percentages of areas owned by cultivators in other countries before World War I1 were : France 60, Switzerland 80, Germany 88, and Czechoslovakia 90. As we have seen earlier, the State will have to examine the claims to ownership of those who do not work on the land. How then will the land be redistributed? Should the State create huge collective farms and set the people to cultivate them with the use of tractors and other machines? There are people who claim that collectivized and mechanized agriculture in Russia has worked wonders and transformed the face of the countryside. There are others, however, who take a different view and rule out such a course on the ground that it would tend to impoverish the soil, reduce the peasantry to serfdom, and create unemployment of staggering proportions. It would seem that the choice for India lies between two systems. One would be that of peasant farming of inalienable and indivisible farms of an economic size, with the State helping and guiding the peasant in various ways to put his land to the best use. The other would be co-operative farming of a larger unit, such as a village, where the ownership of the smaller plots which make up the unit would remain with the peasant but farming operations would be jointly performed. There is ample room in India for both these systems to play their part. In so far as industries are concerned, we have seen that a great part of our industrial production will be in cottages and small workshops spread throughout the countryside. The ownership and management of such industries will be with those individuals or groups or co-operatives who run them. The State here can only play the part of 'big brother' in helping such industries along by making tools. raw materials, electric power and credit facilities available to them and helping with the marketing of their products. Till recently, it was considered modern to describe rural and cottage industries as antediluvian, but in the last few years a different attitude is coming to be adopted by people all over the world. In our country, Mahatma Gandhi stressed the importance of village industries almost twenty years back and educated us slowly to stop thinking, in a lop-sided way, of industries consisting only of huge factories situated in big cities. In the West too, people have more recently started realizing that the latest developments of science no longer make it necessary for people to congregate in huge cities, work in giant factories, and live in foul slums. We must remember, however, that neither agriculture nor rural industries can flourish without certain basic large-scale industries sometimes called key industries and public utilities. Such are mining and metallurgy, engineering, heavy chemicals, fertilizers, cement, electric power, railways, shipping, aviation, posts, telegraphs, telephones and radio. Here the State will have to be more assertive. For one thing, in the kind of society we are thinking of, there should be no place for a few Big Businessmen who own these workshops and utilities to control the lives of the people and to make big profits at their expense. For another, planning implies a deliberate decision taken in advance regarding operations which cannot therefore be left to the sweet will or caprice of individuals, each concerned with his own profits. Does that mean that all these industries should be owned and managed by the State? Not necessarily. The experience of Russia and Germany has shown that what matters most is neither legal ownership nor management but control. The case of elasticity and diversity, in controlling industries in general as well as particular units within each industry, has been put by the British socialist writer G.D.H. Cole as follows: 'There is no need to socialize at once all the forms of production, it may prove desirable to socialize some time; nor is there any reason why a form of production, socialized at first, should not be handed back, under proper safeguards, to private enterprise if socialization does not yield good results. Within a single branch of production, there may be some parts which it is desirable to socialize, and others which are best left under private ownership and control. The less rigidly the line is drawn, the more room will there be both for diverse experiment and for suiting different types of men and women with jobs in which they have a decent chance of being happy ... the more gigantic the essential instruments of power become, the greater grows the danger that, in centralizing their administration, we may be drawn to create a political machine too vast and complicated to be amenable to any real democratic control, and may thus become ourselves the victims of the very power-mania which we are organising ourselves to defeat. It is a clear lesson of recent history that democracy cannot be real unless it rests on small groups as its basic units - on groups small enough to be competently administered and led by men of normal stature and mental makeup. This should make even Socialists wary by now of tearing up by the roots any small man's refuge that is left in a world so ridden as ours by hugeness. It should make them regard the farmer, the shopkeeper, the small manufacturer, not as obstacles in the way of universal centralization, but as valuable checks upon a dangerous agglormerative tendency.' This leads to the conclusion that our objective should be the 'mobilization of all the available means of production and their direction towards socially desirable ends'. This Object can in some cases be furthered best by State ownership and management, in other cases by State ownership without management or by State management without ownership, and in yet other cases by State control without either State ownership or management. What should be constant in all such cases is the control of the State. This will take the form of licensing, the nomination of some directors on the board of management, the prescribing of conditions of work and wages, ,the fixing of prices, and the limitation of dividends. Whether ownership or management should be added to these forms of control is a matter of convenience to be decided on in each case. It is possible, however, to state broadly the categories where such ownership or management may be called for. Where the State finances an enterprise , there is a strong presumption in favour of its also acquiring the ownership. In fact, in the case of some non-existent industries, that may be the only way in which under the present conditions they can be started at all. Other enterprises which it may be necessary for the State to own are monopolies, and such vital services and public utilities as post, telegraphs, telephones, radio and railways. State management should normally follow where an enterprise is owned by the &te, but it need nnot do so in all cases. Even State owned enterprises may sometimes with advantage be left to the management of private parties, as in the case of many enterprises in the United States during World War 11, or to ad hocpublic corporations of the type of the London Passenger Transport Board, in which the State would be represented. In addition to the control of key industries and public utilities, the State would also, during the period of the Plan, have to exercise a more general control over economic processes. Such a control would include that of prices, of priorities in the distribution of raw materials and manufactured goods, of the flow of investmennt of capital, and of foreign trade and exchange. The part that the State will thus have to play will obviously call for a great increase in the administrative machinery. Till the outbreak of war in 1939, the administration in the country could fairly be described as most rudimentary - its main purpose being the collection of revenue and the maintenance of order. A State of the kind we have imagined would need, a far larger body of persons with special education, training and experience. Perhaps one of the best instruments for such a purpose would be a newly created Economic Civil Service. The creation of a large army of officials of various kinds and the concentration of administrative and economic power in their hands bring us face to face with perhaps the basic problem of the rest of our century, which is that of whether the people are to own the State or the State is to own the people. To put the matter differently, it is the problem of finding 'the most fruitful method of combining planning - the right kind and degree of planning - with freedom'. It has been argued by a-learned professor that the path of total planning is the road to serfdom. Is this assumption true, that a planned econmy can only function within the political framework of dictatorship? Such a fear is natural, 'since in the two countries which have witnessed the most impressive experiments in economic planning undertaken in recent years, namely Soviet Russia and Germany, the State has exerted over the activities of its citizens in every sphere of life a degree of authority which provides little scope for the exercise of individual freedom'. These States have been described as 'Managerial States', that is, State where the managers of industry and the bureaucrats of administration monopolize all power. It has been said that 'in a country where the sole employer is the State, opposition means death by slow starvation. The old principle: who does not work shall not eat, has been replaced by a new one: who does not obey shall not eat'. It is therefore a natural fear that Lin Yu-Tang has put it, 'When democracy falls into the hands of the experts, democracy just falls'. But to agree to surrender liberty for the sake of planning, or vice versa, would be to accept defeat too easily. There is no reason why, learning the lessons which these experiments have to teach us, we should not devise safeguards which will make it possible for planning in India to take place democratically. In our planning we have to make a choice not so much between Socialism and Totatlitarian Collectivism. 'Democracy rests on the belief that the freedom of the individual to give full expression to his personality is one of the supreme values of life and among its basic needs: the State cannot demand a surrender of that freedom except for well-defined ends and except with the assent of the community freely expressed through constitutional channels and with opportunities for the free functioning of parties holding divergent views. If a planned economy involves, as it necessarily must, the restriction of individual freedom in varying degrees, such restriction under a democratic government will be of limited duration and confined to specific purposes. Whereas in a totalitarian society the individual is merged in the State and belongs to it, having no rights except those which the State chooses to confer, in a democracy the State belongs to the people and is but a means of securing the fulfilment of the Individual's rights and therefore any restriction which it imposes on his freedom must be justified by that test.' On the economic side, planning for freedom calls for the widest possible decentralization of the process of production and the widest possible distribution of economic power. As far as possible, such decentralization of ownership should be combined with co-operative endeavour - through the encouragement of co-operative farming by peasant proprietors and industrial co-operative movement. The value of co-operation is that it gives scope for individual initiative and freedom without the evils of individual selfishness and for the benefit of collective action without the evils of bureaucratic collectivism which reduces the common people to being 'small screws in the great machine of State'. The best guarantee for the preservation of political liberty is that of free opposition to the government of the day. Indeed, an acid test of democracy is the existence of opposition parties functioning freely and with every hope of winning the support of the majority and thus becoming the government. No State which does not allow such freedom of oppostion can claim to be democratic in any sense of the word. A mixed society, with several autonomous sections acting as checks and balances, provides the most likely soil in which such democracy can flourish. Above all, what needs to be remembered is that planning is but a means to an end. It is an instrument by the use of which certain desired results may be achieved and, like all tools, it can be used for good or for ill. The question therefore arises: Planning, yes, but to what end? _Previous musing: [Fundamental Right to Property by V M Tarkunde](https://indianliberals.in/content/fundamental-right-to-property-by-v-m-tarkunde/)_ --- ## [Musing] Population Causes Prosperity URL: https://indianliberals.in/musings/population-causes-prosperity/ ### Body _Published by the Centre for Civil Society, a public policy think tank based out of New Delhi, the excerpt below has been borrowed from the handbook “Free Your Mind: A Beginner’s Guide to Political Economy” by Sauvik Chakraverti in 2002._ _The handbook is a concise introduction to the principles of political economy and is aimed at readers who are new to the subject. An easy read for anyone interested in understanding how the politico-economic system works and makes them conversant with the essential errors of socialism, the book is written in a clear and accessible style. It uses real-world examples to illustrate its key concepts._ _One of the book's central themes is the importance of individual freedom and the harmful effects of excessive government intervention in the economy. The author argues that a free market system, where individuals can make their own choices and pursue their interests, is the best way to promote prosperity and innovation._ _Sauvik Chakraverti was an Indian columnist and author. He wrote extensively on politics, economics, and culture, and his writings often focused on promoting classical liberal ideas._ _Chakraverti regularly contributed to several Indian newspapers and magazines, including Livemint. He was also the author of several books, including "Udarwad: Raj, Samaj aur Bazar ka Naya Paath,” “Antidote: Essays against the Socialist Indian State,” and “Natural Order: Essays Exploring Civil Government and the Rule of Law.”_ _Chakraverti's writings were known for their incisive analysis and unconventional perspectives, and he was a strong advocate of individual freedom and free markets. He passed away in 2014, leaving a legacy of thought-provoking commentary on Indian society and politics._ _You can read the original, unabridged version _[_here_](https://ccs.in/sites/default/files/2022-08/free_your_mind_1-40_Part1.PDF)_._ Having said that _Homo Economicus _is a machine programmed to generate wealth, it becomes necessary to examine the argument taught in Indian Economics that India’s substantial human population is a cause of poverty.  If humans are the only species capable of creating wealth, then how can more of their number cause poverty? What is the truth? The truth is that every dot on the map, representing a town or a city, is densely populated with human beings–and is rich. More millionaires, cellphones, Mitsubishi Lancers, and swimming pools are in crowded Delhi than in vacant Jhoomritalaiya. Why is this so? For the answer, we must turn to Economics, which studies_ the production of wealth._ Because we can trade, we SPECIALISE in doing what we do best and exchange with others for what they do best. Unlike animals, human beings are **_not self-sufficient. _**Instead, they tend to find specialised niches in which to work. They produce goods and services from these niches, which they exchange in the market economy. Thus you have farmers, fishermen, goatherds, journalists, dentists, washermen, etc. No other species specialises in this manner because they do not have a market economy, resulting from our remarkable trade ability. _This is how wealth is created._ Human beings, being “economical”, should never be advised to be “self-sufficient.” Imagine your plight if you decided to opt out of the exchange of goods and services and had to do everything yourself. Imagine what would happen if your family became “self-sufficient”; and then your village or town. This would mean that not only would you be compelled to grow your food and wash your clothes, but it would also mean that you would have to learn to build your own house and learn surgery. At no level does self-sufficiency improve the lives of those who practice it. All it does is divert your productive energies from areas where you are most competent to those in which you are relatively unskilled. If it is terrible for a person, a family, a village or a town to practice self-sufficiency, a great nation like India cannot gain by pursuing such a path. _Self-sufficiency is economic suicide._ A little experiment can be attempted: Go to a kindergarten class and ask the little children what they want to be when they grow up. They will answer: actor, dancer, policeman, and so on. I’ll bet that little child will not say: I want to grow up and be self-sufficient. If it goes against the logic of little children, how could it be logical for the entire nation to practice self-sufficiency? When we specialise in the market economy, a phenomenon occurs that economists call the **_Division of Labour._** ECONOMICS IS THE STUDY OF THE PRODUCTION OF WEALTH THROUGH THE DIVISION OF LABOUR. Dividing labour into numerous specialised roles is the best possible in an urban area– denoted by a dot on the map. It is challenging in a rural area where there are very few people, and thus, the minimal scope for being, for example, a successful dentist or even a _dhobi_. Therefore, every dot on the map (representing a town or city) is densely populated and relatively affluent. Wherever human veins are densely crowded, as in a city or a town, there is greater prosperity than in any vacant countryside simply because of a more significant division of labour. The extent/degree of the division of labour depends on the market size. For example, if you wanted to open a Thai restaurant and you needed 100 diners a day to break even, and if one out of every 100 people wanted Thai food on any given day, you would have to set up shop in a town where are at least 10,000 potential customers. This is why crowded cities are prosperous: there is a more significant division of labour. This is a universal phenomenon: not just Delhi and Bombay but London, Tokyo, New York, and Paris are densely populated and affluent. The world is 50 per cent urbanised today: half the world’s population lives in towns and cities. India is far below the world average at about 30 per cent, but the wealthiest states of India–Gujarat and Maharashtra–report urbanisation levels close to the world’s average of 50 per cent. India's poorest states, like Assam and Bihar, reported urbanisation levels below 10 per cent. It is important to note that the word “civilisation” has its root in the Latin word _civitas_, which means “city.” The story of civilisation is the story of great cities coming up around the Mediterranean and linking up, supplying goods and services to each other: the small, safe sea provides the transportation backdrop around which trade could take place. Mohenjodaro and Harappa were great cities linked to the Mediterranean through the port of _Lothal._ _Cities and towns are the anthills of human colonists. _It is futile to pursue “development” while cities face ruin. Across the world, urbanisation causes prosperity by aiding the division of labour. Countries like India would therefore be better off pursuing urbanisation as a means to wealth instead of doing what our government has been doing all these 50 years–spending money uselessly on “rural development.” A recent Arthur Andersen-_Fortune_ survey of cities worldwide found Indian cities to be the worst in the world! This is not the way to become a prosperous country, Apart from general misgovernance, one of the prime reasons for the ruination of our urban areas is the undersupply of roads. We shall later discuss this issue in greater detail. For now, let it be understood that there are over 400 names in the STD code book. Still, most of urban India (62.5 per cent of India’s total urban population by some estimates) is focused on a handful of huge metros growing daily. Urban geographers, those who study the geography of towns and cities, call this phenomenon **_primacy_**. Primacy occurs when the primary city bloats up because it is not adequately linked to the surrounding villages. If there had been proper roads, satellite towns would have blossomed, and each of the 400 names in the STD code book would have become a tiny Singapore. The British built many acceptable cities and countless “hill stations” in their time. In the last 50 years, our urban areas have all been ruined. In British India, the hill stations were all linked to a metro: the Darjeeling-Shillong belt to Calcutta; the Poona-Mahabaleshwar belt to Bombay; the Ooty-Coonoor belt to Madras; and the Simla-Mussoorie belt to Delhi. With such strong links to urban metropolises, all our urban centres can become like Singapore. Remember, Singapore received independence only in 1965. From a dirty little town crowded with coolies and hawkers, it has become a thriving city today. Because of the undersupply of roads, there is urban overcrowding in India, but that does not mean the country is “overpopulated.” Travel by train or plane around India, and you will see vast open spaces. India’s population density (number of people per square kilometre) is LESS than that of Japan, Germany, Holland, and Belgium. And these countries do not report urban overcrowding. The solution to urban overcrowding lies not in birth control but in inroads that will allow many more towns to come up and link up with the central city. With more urban areas–400 Singapore–Indians will have sufficient living space, and overcrowding will end. This argument, therefore, generates **_A Conflict of Visions._** Instead of seeing the future of India in terms of thousands of self-governing and self-sufficient village republics (the Gandhi-Nehru vision), we can see India as an urban civilisation. With 400 excellent cities, all well linked to each other by rail, road and air, a maximum of trade can take place at the least cost. A poor transportation network makes business slow and expensive. A truck travels 250 km a day on Indian highways; they do more than 600 km a day in the rest of the world! It is said that “every great city sits like a giant spider on its transportation network.” India needs such cities and towns. SINCE HUMANS ALONE ARE ECONOMICAL, AND SINCE CITIES ARE RICH, IT MUST BE SAID THAT THE ARGUMENT THAT POPULATION CAUSES POVERTY IS THE DEVIL’S PHILOSOPHY. It makes mothers and fathers ashamed of producing children. It makes children feel that they are not a resource; instead, they are a problem. It makes cynics look at traffic accident statistics and say that our unsafe roads are a means of solving “the population problem.” Human beings are the world’s ultimate resource–because they all possess the human mind. You are trying to pour knowledge into that mind. Please make sure that what you feed your mind is the truth. A false philosophy will deaden your mind. It will not make you see that, with your mind and the ability to trade, you can generate wealth by doing what you do best in a free market economy. Instead, it will train you to look upon yourself and your brethren as a huge problem that requires political action to solve. To understand why political interference in the market economy harms us and our country, let us focus on the **_political market._** I’m off to Bombay To make my fortune There are jobs a-plenty there— I’ll be a watchman, waiter, cop Even a film star— if I dare I’m off to Bombay Where millions live And a million dreams come true. My village is poor, with nothing to give So what else is there to do? _Previous musing: [Laying The Foundations For An Economic Miracle](https://indianliberals.in/content/laying-the-foundations-for-an-economic-miracle/)_ --- ## [Musing] Post Reform Labour and Employment Issues - The Liberal Budget URL: https://indianliberals.in/musings/post-reform-labour-and-employment-issues-liberal-budget/ ### Body _The following musing is taken from ‘_**_The Liberal Budget_**_’ published by the _**_Indian Liberal Group_**_ for the year 2007-08, titled ‘_[**_Taking Reforms to the Poor_**](https://indianliberals.in/indian-liberal-group/liberal-budget-reforms-for-poor.pdf)_’. The text reproduced below is the introduction of its third chapter on _**_Post Reform Labour and Employment Issues_**_._ _In light of the [2024 budget](https://www.financialexpress.com/budget/budget-2024-live-updates-when-will-govt-make-a-formal-announcement-on-the-budget-presentation-date-stay-tuned-3540014/#:~:text=Budget%202024%20Live%20Updates%3A%20FM,%2C%20sources%20told%20FinancialExpress.com.) being presented by the newly formed government this month, which aims to address the [ever increasing problem of unemployment](https://www.cmie.com/kommon/bin/sr.php?kall=warticle&dt=20240502160006&msec=476) in the country, this aspiring liberal budget gives some much needed perspectives on the challenges and opportunities that we are faced with._ Being a populous country, lndia has had to face the perennial problem of **labour and employment**. Providing employment to the millions of job seekers has been a major challenge for our planners since the beginning of India's planning process. Till the economy remained closed (mid-80s and more particularly the beginning of the 90s) under the socialistic pattern model, employment generation and labour protection was an overriding goal. Particularly, the organized sector was legally obliged to protect employment in return for protection from competition. The interventionist regime created a complex web of labour laws and extensive executive machinery.** This resulted in a well-laid framework seeking to provide security of tenure of employment in the organized sector while largely ignoring similar efforts in the unorganized and small-scale sectors.**  The economic scene started changing in the nineties. The New Economic Policy (NEP) introduced stabilization and structural adjustment programmes. Stabilization measures basically aimed at controlling fiscal balance, balance of payment deficit and maintaining lower inflation while structural programmes focused on measures for integrating the domestic economy with the global economy, productivity enhancement, and higher movement of capital. This exposed the economy to both domestic and global competition. During the post reforms period labour-saving modern technology was adopted by industry in order to attain higher goals in terms of quality and quantity, while de-reservation led to increasing the scale of the economy. These measures in turn resulted in higher output but lower employment generation particularly in the organized sector. As a result, the higher growth achieved during the post-reforms period without a corresponding rise in employment was termed as 'jobless-growth'. Even as the protection given to the organized sector was taken away under the new policy framework, labour law rigidities remained unchanged. This started the conflict between employers and employees. As the employment generation potential of the organized sector started waning, labour started moving into the unorganized sector. This in turn led to an increase in the number of those engaged in low quality employment (lack of decent jobs) and other related issues. _The growing unorganized sector also became a source of income inequalities in the country._ After a decade and half of reforms, lndia is at the crossroads.** It is high time to complete the unfinished agenda of reforms by adopting a second dose of hardcore reforms including the labour reforms. **At the same time, demographic changes resulting in a growing proportion of economically active younger population, throws a major challenge as well as an opportunity for the economy. The trade off between capital intensive (higher productivity) and labour intensive (employment generating) techniques adds to the complexities. Simultaneously, the problems of child labour, and gender bias in the labour market continue to bother.  In the post-reform period, lndia has embarked on a high growth path leaving behind a Hindu growth rate of 3.5%. Today the economy is capable of posting a sustained growth of 8%. Most importantly, our policy makers have realized the significance of 'inclusive growth'. The draft Approach Paper to the 11th Five Year Plan mentions that “...the 11th plan provides an opportunity to restructure policies to achieve new vision of growth that will be much more broad-based and inclusive..” **Labour and employment issues in our economy cannot be seen in isolation. On the contrary they are closely connected to the issues of income and poverty levels and overall developmental policies** - the topics dealt separately in this edition of the Liberal Budget.  With this background, we attempt to briefly analyse the issues relating to labour and employment particularly during the post-reforms period and also try to find out solutions in broad terms. The chapter is broadly divided into three parts. The first part deals with the structural changes in the labour and employment scene in India. The second part discusses the imperatives inherent in the problem while the last part deals with the challenges posed by these problems Read the complete chapter [here](https://indianliberals.in/indian-liberal-group/liberal-budget-reforms-for-poor.pdf) (pages 23-30) type=content&p=8576). Needs editorial review._ --- ## [Musing] Profit-Shy Asians URL: https://indianliberals.in/musings/profit-shy-asians-by-kd-valicha/ ### Body _K D Valicha’s piece “Profit-Shy Asians,” featured in the August 1957 edition of The Indian Libertarian magazine, discussed "free enterprise." The edition was released on the 10th anniversary of the Indian Independence movement. While the country was still carving its niche on the global map, Valicha’s cogent analysis of the significance of free enterprise and the skewed definition and, therefore, aversion to Profit not only gives a glimpse of the country’s economic outlook but also finds relevance even after six decades of publication._ _You can read the complete, unabridged version here [The India Libertarian Aug 1957](https://indianliberals.in/wp-content/uploads/2023/08/The-India-Libertarian-Aug-1957.pdf)___ Many people in India today believe that free enterprise, unchecked and unrestricted by any State control, will lead to anarchy and disorder. This wrong notion arises from a misconception about the term 'free enterprise.' Logically, there can be no anarchy; there can only be various orders. The difference between free enterprise and socialism or communism is not that the former is disorderly while the latter is given to order but a difference between patterns of economy. Under free enterprise, there is an absence of an authority to establish and regulate the hierarchy of needs and wants and the proportion of each for the individual, while under communism, all desires of the individual are dictated by a central, supreme authority. Thus those libertarians who defend free enterprise are not in the pay of capitalists but in the pay of their conscience. The libertarian believes that liberty is the sine qua non to progress, that progress is impossible without freedom. Liberty is defined as the faculty and possibility of making a choice. This implies a double-ness; for freedom is both social and individual. The faculty to choose is a personal quality and calls for individual development. Whereas the possibility to exercise choice depends upon social conditions and environment. Free enterprise is the only guarantee of the broadest possible choice. Free enterprise does not mean repealing all laws, for all laws are by no means necessarily a narrowing of freedom. Specific laws are necessary for the maintenance of justice and the prevention of crime. The method of free enterprise is that of democratic legislation; it seeks to minimize injustice through legislation and not through political intervention. Thus, for example, evils like the various monopolies can only be eradicated by proper legislation reform, not by nationalization.  Furthermore, free enterprise is the only system that guarantees maximum productivity and hence the greatest good of the most significant number. Capital in a capitalistic society is the tool used for production. Since any socialist State which owns all the tools will have to pay interest on its bonds, it boils down to a question of State capitalism versus Private capitalism. The capitalist payment or profit is a payment for using tools. So far, no State has been devised which will use the tools for greater productivity. Why then concentrate all the capital into the hands of the politicians and create the greatest and the most tyrannical monopoly that ever existed?  From irrational inclinations comes also the vilification of profits. Profits and morality have nothing to do with each other. Profits are bad only when they are not enough; profits are the wealth of a nation. The more the profits, the more the prosperity. All abuses against profits arise from a misconception and ignorance of the nature of economic processes. Some profits are no doubt improper, but these are due to monopolies. Even Government enterprises cannot afford to neglect profits. The test of any enterprise is ultimately profits, except in the case of social and public works. Maurice Zinkin writes in Development for Free Asia:  _“All Asian planning, therefore, should make profit the centre of its attention. Yet so deep is the aversion to the idea of profit…that none of the plans which have been prepared, not even the lengthy and detailed Indian First Five-Year Plan, discusses profit at all. The question the planners ask in Asia is not 'How can the national income (which, it must be remembered, is purely a measure of satisfactions in terms of money and takes no account of the relative moral value of those satisfactions) be increased the most at the least cost? Instead they begin from a whole series of different premises and build upon them. They argue that wealth comes from industrialisation; so they create uneconomic industries and bolster them with protection. They accept that national safety requires a high degree of autarchy [autocracy]; so they build up defence industries and automobile industries which run expensively because their production is too small. They consider that the handicraftsman represents certain social values it is important to preserve; so they keep him in existence by subsides. They worry about their balance of payments; so they lend money to shipping companies at uneconomiCally low rates of interest, or talk of synthetic petrol plants. They  have the political pressures on their Ministers to consider; so they spread schemes evenly over the country and give special attention to backward areas. They share the intelligentsia's suspicion of the businessman and faith in the State; so they crib and cabin the businessman at every turn and extend the State's sphere constantly, though the State is short of entrepreneurial and managerial talent, and its size gives it a bias towards the long-term low-return scheme rather than the short-term high-return scheme.”_ Rational economic thinking cannot afford to be dictated by personal whims and ideological quackery. To brush aside capitalism as evil or to decree profits is to neglect one's interests. Capitalism is the bedrock of all economic progress. Socialism is a parasite. British socialism is all the while sustained on American capitalism. Libertarianism, which seeks to retain capitalism while curing it of monopoly, has always been fighting. In the anti-mercantilist epoch, its champion was Adam Smith. In the anti-conservative epoch, John Stuart Mill stood out as its defender. Today is the anti-socialist era. Libertarianism is fighting, dedicated with all its power and love of liberty. It does not matter whether it wins in the political sphere. What matters is not political parties but ideas. _Previous musing: [The Evils of Child Marriage (1850)](https://indianliberals.in/content/the-evils-of-child-marriage-by-ishwar-chandra-vidyasagar/)_ --- ## [Musing] Rajaji- Man with a Mission URL: https://indianliberals.in/musings/rajaji-man-with-a-mission/ ### Body In the book 'Profiles of Courage: Dissent in Indian Socialism', G Narayanaswamy writes about the journey of C Rajagopalachari, the pioneer of the liberal movement in India. Rajaji, as he was popularly known, realised the urgency of strong opposition to the single dominant party at the time, which led him to establish the Swatantra Party. Rajaji frequently interacted with his visitors from different walks of life and news appearing in the press had kept him informed of political developments both at national and international levels. He had also realized that Congress had become the largest monolithic party and Nehru its unquestioned leader. There was no one in Congress to criticize him. Even if there was criticism, Nehru resented and silenced the critics. Rajaji had always been emphasising the importance and the need for an effective opposition in a democracy. To use his own phrase, a democracy “without a strong opposition is a motor car without a break and is liable to get involved in an accident at any time.” Probably the most significant contribution which he had made- and which none else could have- to the Indian political life was the founding of the Swatantra Party and thus proving that an alternative to Congress was possible. If there is a fairly stable non-Congress Government functioning in Centre and States, its seeds were sown by Rajaji in 1959. _This is an excerpt from the book Profiles in Courage: Dissent in Indian Socialism, a compilation on the lone voices of liberalism and economic freedom, including those of Rajaji, __Minoo Masani_ _, N G Ranga, B R Shenoy, Piloo Mody, Khasa Subba Rau and A D Shroff during the era of socialist command. You can access this book for free on _**[_our website_](https://ccs.in/sites/default/files/2022-08/profiles_in_courage.pdf)**_._ [Read more on Indian Liberal Tradition](https://spontaneousorder.in/tag/indian-liberal-tradition/) --- ## [Musing] Prospects of Democracy in India URL: https://indianliberals.in/musings/prospects-of-democracy-in-india/ ### Body _Published in the June 1961 issue of Freedom First magazine, author SP Aiyar makes a case for the evolution of democratic ideals and institutions in India. The introduction of Montagu-Chelmsford reforms ensured that India and its leaders were trained in the democratic system, unlike the future of some other colonies in the world. He lauds the leaders of independent India for trusting and consolidating the democratic system through the 1951 general election._ _You can read the original, unabridged version on _[_Page 7_](http://www.freedomfirst.in/uploads/issues/pdf/109.pdf)_ here._ Democratic government and politics rest on the idea of the responsibility of the rulers to the people, who are considered to be the ultimate repositories of political power. Implicit is the notion that people can exercise their choice to decide who, in their opinion, is most trustworthy and competent to govern them. They have the right to recall a government in which they have no confidence. By People is meant the electorate, which exercises its political decisions through the electoral system on the principle of one man, one vote. The bewildering variety of opinions in society is polarised by the party system, which in democratic countries is considered the bedrock of representative government. From this, it follows that though men are unequal in the endowments of Nature, they have the equal right to decide the form of government under which they live–for what touches all must approve all. They also have the right to live in a society that does not hamper their natural development. Further, from the fundamental postulate that every man is a centre of absolute value, it follows that democracy is not an arbitrary government but one of the principles, the principles being embodied in the constitution of the land which is considered more important than the men who framed it or those who are at the helm of a temporarily constituted government. This is the implication of the saying that_ democracy is a government of laws, not men_. When men conflict with the arbitrary actions or decisions of those in authority, they have the right to appeal to the law of the land interpreted by a free and fearless judiciary. The corpus of democratic ideas in the form non stated is a product of Western political development. “Looking back to traditional societies of Asia”, says a wise interpreter of Asian institutions, “it is difficult to discern any approach to the values of democracy.” In India, the British official policy for a long time rested on the assumption that the people of India were not mature enough to run the institutions of free government and that it would be unwise and unfair to introduce these into the country in the form of which they were found in England. A good deal of current sociological thinking still supports this view. But the articulate sections of Indian society educated in the liberal ideas of English politics furiously repudiated the official point of view and condemned it as the excuse of an imperialist power to hold on to India. A great Indian statesman and one who all along was deeply sympathetic to British policy in India wrote an article with a significant title, “Leave India, to her Fate.” The temper of Indian nationalism after the First World War compelled England to work out a compromise, and it was decided by the Montagu-Chelmsford Reforms to grant self-governing institutions by stages. The executive was to become gradually responsible to the people's representatives in a lawfully elected legislature. The strength of political forces within the country and outside compelled a speedier transfer of power than what was contemplated by the rulers or anticipated by the people of the country. But for an entire generation, the country's governing elite had been under probation–under the guidance of a foreign government that, with all its faults, was constitutional-minded. This training period has been of immense advantage to India. To view it from the proper perspective, one must compare India’s experience under the British to that of Indonesia under the Dutch or of Congo under the Belgians. The comparative stability of democracy in India in spite of fissiparous tendencies too well-known to require comment is an eloquent testimony to the advantages of British rule. When Independence came, those who had long been in opposition and trained in the techniques of agitation found themselves in positions of power and were naturally confident of their ability to govern the country. Nor did the people doubt their competence. Within a remarkably short period, a Constitution was framed for the country, which, though it has not been wanting critics both within the country and abroad, has stood the test of a decade of stress and strain. By the end of 1951, it was decided to hold a general election based on an adult franchise, which produced an electorate of 190 million. Dr Rajendra Prasad described this as an act of faith. Professor Hugh Tinker says that this was an act of faith in another sense also–in the Civil Service–for upon the officials fell the valuable task of making the elections possible. Considering the peculiarities of Indian society, even the task of preparing the electoral roll has been a great achievement. A second election in 1957 gave the country greater confidence in the operating technique of elections. Two five-year plans have registered a programme which is remarkable when one considers the difficulties in implementing these plans and the immature administration techniques which cannot be changed all of a sudden. The challenges in keeping close to the targets set in the plan and the divergent points of view that have been expressed are due to the fact that the Planning Commission has itself been passing through a phase of experimentation. The achievements of the Indian Government in many fields, however, are contrasted by considerable popular discontent. The fissiparous tendencies that one notices in India today and the pulls exercised by State Governments on the National Development Council to procure for themselves as many resources as possible are at least partly economic in character, the prospects of democracy must be viewed against the background of Indian economic conditions and the struggles that they have given rise to. It is significant that 13 years ago, few people asked whether democracy would succeed in India; today, few don’t ask this question. This change in outlook is partially accountable for the unfortunate experience of newly independent countries in Asia and Africa. What thinking men and women in the country want to know is whether the institutions of democracy have taken root after the efforts of a decade. There is, of course, no way of ascertaining this. Even an experienced gardener is not always sure if the saplings that he has planted will grow. In the case of human institutions, it is indefinitely more challenging to speak with confidence, for they do not grow by themselves and are moreover constantly disturbed, if not uprooted, by the violent passions of men. Criticism of democracy in India is made from many angles, and it is impossible to examine all these here. Let us consider the working of democracy from a few prominent angles. It is said that in India, there is no opposition, and where there is no opposition, there can be no genuine democracy either. The idea that democracy requires opposition arises from the fact that no individual or group of men in society can claim to be infallible. The human mind, even if it has access to all the channels of information, including a free press, is an imperfect instrument for knowing the truth in all its aspects and it is necessary to evolve a system which ensures the dash of opposite points of view so that the different facets of an intricate problem can be seen as a whole. The word opposition in politics has a meaning similar to what it has in mechanics. When opposition becomes an end in itself, it defeats its own purpose and degenerates into obstructionism. This is what has happened in India. Often the attitude of the opposition parties has been negative and destructive rather than positive and purposeful. On the other hand, the Government of India needs to be more responsive to public opinion. This is true or false according to what one is thinking about. In several cases, the Government of India has yielded to public opinion. In this context, one is reminded of the difficulties in the passage of the Hindu Code Bill. But in several cases, the government has also been obstinate. The influence of Government works subtly in various directions, and we often hear of pressures on particular issues or persons. All this may be true or false to varying degrees. It must be admitted, however, that a widespread belief in these undesirable ways of Government can, in the long run, be damaging to the cause of democracy. Further, critics of democracy in India maintain that Parliamentary control over the administration is too imperfect to ensure responsibility. It must be admitted that there are twilight areas in the country’s administration. Students of Public Administration have often pointed this out - Dean Appleby, for instance. It is also true that publicity in Indian Administration is highly defective. There is no systematic or organised way of enabling the public to receive reports concerning various aspects of administration—the more critical the information, the greater its scarcity, e.g., Mr Gorwala's Report on the Administration of Mysore is extremely difficult to get in Bombay. Even for research purposes, institutions need help to keep themselves continuously informed. A word must also be said concerning the authenticity of the reports. Prof. Morris-Jones tells us that the inaccuracies in the Rau Committee's report on the administration of the Damodar Valley Corporation were due to the inaccurate information supplied by the Government to the Committee. There is also a large measure of truth in the criticism often heard that the Government does not take action on several reports. In other directions, the conduct of the Government has been praiseworthy. For example, the U.P.S.C., in its Report for 1957-58, states that during the year, there was not a single instance in which its advice was not accepted. If the Commission can report in this manner in the coming years, nourishing traditions will have been laid, and it will go a long way in providing a clean, civil service. Though we have yet to go a long way in learning the ethics of parliamentary life, the working of India's parliament leaves no room for despair. Parliament has become conscious of its rights and privileges. It is also necessary to remember that Nehru has been an educative influence on the Parliament and has been responsible for making the country aware of its value. What is essential to consider in any evaluation of democracy in India is not the weakness of the opposition parties but the temper and outlook of the ruling party. What strikes the student of Indian politics most is not the occasional departure from strict democratic etiquette, which one notices in the statement of rival political parties but the fact that all political parties consider the Constitution as preeminent and believe in the efficiency of constitutional methods. It is, of course, confirmed that the rank and file of the principal parties have yet to be thoroughly educated, but this will necessarily be a slow process. The present leadership of the country under Nehru has sound democratic instincts and can be trusted not to misuse the tremendous powers that it now enjoys. The prospects of democracy in India will ultimately depend on whether the democratic leadership will perpetuate itself. The electorate in India is free to choose between rival political parties and will exercise its right in the future as it has done in the past. Meanwhile, much will depend on Congress as the ruling party sets up norms of political morality and standards of behaviour for its rank and file and other political parties in the country. The excellent task before Congress for the present and future is to conduct itself in recognition that in a democratic system, no party enjoys the privilege of immortality. _Previous musing: [The Education of the Electorate](https://indianliberals.in/content/the-education-of-the-electorate/)_ --- ## [Musing] Rajaji Was Prescient About Electoral Funding URL: https://indianliberals.in/musings/rajaji-was-prescient-about-electoral-funding/ ### Body As I have often pointed out, much of the expense is really what the State ought to bear on behalf of all the candidates. We should see to this transfer of the burden from candidates to the State, while at the same time safeguarding the voters against the blandishments of the party in power. _The post-1947 polity in India was characterised by the dominance of  a single party or the ‘Congress System’, as the political scientist Rajni Kothari termed it. The single-party dominated democracy went together with the state-controlled planned economy. _ _Apparently, the stymied competition in both electoral and economic marketplace didn’t bode well for the progress of the fragile Republic. One obvious manifestation of the monopolised political economy lay in the domain of electoral funding mechanism. Since the Congress politicians in power could employ levers of the state (license, quota, permit, import substitution mechanism) to decide the fate of the corporate houses, the Big Business paid paeans to socialism and filled Congress coffers with donation money. _ _These corporate donations oiled the Congress electoral machinery, which was formidable until the onset of the second phase of the party system in 1967.  The corporate houses also walked the talk on India’s mixed economy model which protected them from foreign competition and allowed them to make profits in an economy characterized by scarcity for consumers. It was a win-win for both, the big business and the political party in power._ _The monopolising tendency in the system didn’t go unnoticed and unchallenged though. Politicians, public intellectuals, and columnists warned of the dangers of the system degenerating into totalitarianism. Most prominent of the lot undoubtedly was the freedom fighter C Rajagopalachari. Apart from the criticism of planned economy and single-party dominance, he also wrote on corporate funding of political parties, which was connected with both matters of polity and economy. _ _Produced below is his column from 1968, in which he argued for making the elections inexpensive. Such a proposal, in his view, would lead to an influx of deserving and meritorious public-spirited leaders in legislatures and serve as an important check on the attempts by political parties to hijack the agenda for governance.  _ Serious and sufficient attention has not been given in responsible quarters to the problem of making elections to Parliament and to the State legislatures very much less expensive than they are now. I have for a long time been insisting on this as an essential reform. If we desire to have good Government in India this is an absolutely necessary step to be attended to at once. Whether we desire to rest the Government on the majority party basis, or on a coalition basis or a no-party basis, or on a proportional representation system, this reform is a condition precedent. We must make it possible for candidates to contest seats though not able themselves to bear much expense and not desire to depend on wealthy friends or wealthy parties. The more expensive we make elections, the greater the dependence on political parties will be. The loss of that independence which Edmund Burke wanted for members of Parliament becomes a necessary consequence. The nexus that has developed between the ruling party and the permit-licence-raj which prevails will be a permanent feature of India’s economy if we do not take serious, effective steps to make elections very much less expensive. The party in the office can raise funds from its potential clientele; not other parties. Every nation has its own peculiarities. Poverty is our peculiarity in India. Poor people should perhaps be content with a monarchic system of government. But we have been ambitious and plunged for democracy, based on elections. This ambition cannot be truly fulfilled unless our experienced administrators find a way to make elections dead cheap. I would go so far as to say that we ought to be willing to sacrifice many good features if we can succeed in making seat in the legislature available to a man or woman of merit, however poor he or she may be, without having to go and beg for money from others to enable him or her even to try. We have had quite a few general elections, and some of our retired officials as well as some still in office, have acquired considerable knowledge of all the details of expenditure which a candidate has to go through. They can sit together and devise adequate measures to bring about the reforms I am insisting upon. The party now ruling in Delhi should realize that this is one of its most important and urgent responsibilities. It should give up the temptation to maintain its own life by perpetuating the expensiveness of elections for candidates willing to serve in Parliament or in the State legislatures. As I have often pointed out, much of the expense is really what the State ought to bear on behalf of all the candidates. We should see to this transfer of the burden from candidates to the State, while at the same time safeguarding the voters against the blandishments of the party in power. The High Command of the election proceedings should be an autonomous Board totally independent of the ruling executive. This is not a difficult task to organize, as we have already a fairly independent judiciary throughout the country as well as at the top in the Supreme Court. Let us remember that there is not a single reference to political parties in the Constitution. The tendency has however been to make the party system more and more firmly planted. Instead of this, we ought to make it more and more easy and popular for independent candidates to enter the legislatures. It may be administratively easier to handle things if candidates come in only through recognized political parties. But what is easy is not always the best way to attain national welfare and efficiency. We have had enough of political parties. Wherever else this system may have done well, it is not doing well in India, and will not do better as time goes on but will get worse and worse. It is crude, undemocratic and immoral to make elections so expensive as to drive candidates to sell themselves to parties by shutting other avenues against them in order to reduce the number of candidates and make official work easy. A panel of experienced men should be immediately set up to deal with this matter of making elections less expensive for candidates desiring to be independent of the financial help of political parties or of wealthy bosses. If the increase in the number of candidates is thought to be undesirable from any other point of view, a system of voting which will obtain the voters preferences and enable the unspent vote to be transferred to the next preference can be devised. All aspects of the problem should be thoroughly gone into by an expert committee, without losing sight of the main objective, viz., to make elections as inexpensive as possible for candidates. Politics should not become a preserve of wealthy parties or of wealthy men’s stooges. _The original text of the article can be accessed _[_here_](http://indianliberals.in/~_admin/pdflanguage?id=785760897.pdf)_._ _[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context._ Read more: [De-Stalinisation Versus Communism](https://spontaneousorder.in/so-musings-de-stalinisation-versus-communism/) --- ## [Musing] Rajkumari Amrit Kaur: Philanthropy and Politics URL: https://indianliberals.in/musings/rajkumari-amrit-kaur-philanthropy-and-politics/ ### Body _Known as “a princess in her nation’s service”, Rajkumari Amrit Kaur of Kapurthala wore many hats  – a freedom fighter, philanthropist, Parliamentarian, and a far-sighted Union Health Minister–the first woman to hold a Cabinet rank in Nehru’s Cabinet post-Independence. She was also one of the 15 founding members of the 299-member Constituent Assembly that came together to debate and draft the Constitution in December 1946._ _Like many women in the Constituent Assembly, she did not believe in reservations for women. “In the matter of representation it was felt that if practical equality were secured for women in the domain of franchise, they would be able to find their way into the legislative and administrative institutions of the country through the open door or ordinary election, and no special expedients such as reservation of seats, nomination, co-option or separate electorates would then be necessary,” she wrote._ Amrit Kaur was born on 2 February 1889 in the royal family of Kapurthala in Punjab to Raja Sir Harnam Singh Ahluwalia and Priscilla Golaknath- whose father had mentored Harnam Singh and guided him during his conversion to Christianity. Amrit Kaur was raised as a Christian and shared her father’s political inclinations, introducing her to freedom fighters like Gopal Krishna Gokhale. She said, _“The flames of my passionate desire to see India free from foreign domination were fanned by him [Gokhale].” _ Amrit Kaur received her education in England and, upon her return, took up the cause of the Indian independence movement. Deeply inspired by Mahatma Gandhi’s commitment to the nation’s freedom and development, she joined Gandhi’s Sewagram Ashram and worked as his secretary for 16 years. Her close association with Gandhi’s views and ideals made her determined and committed to India’s independence. She said, _“There was a quiet strength, an earnestness and deep humility about him that went straight to my young heart .... I feel I have owed allegiance to him and to his cause from that time on."_ Despite her privileged background, she led a simple life at the Ashram, wearing _Khadi_ and doing regular chores like cleaning, sweeping, and washing. She actively participated in the Salt Satyagraha and was arrested in Bombay. Later, she was detained for leading many processions during the Quit India movement for 20 months. Amrit Kaur was one of the founder members of the All India Women’s Conference (AIWC) in 1927 and worked as AIWC’s secretary in 1930 and as its President from 1931-33. The organisation was dedicated to improving education for women and children and other women’s rights issues, like the right to divorce, vote and inherit. She was a strong advocate of women’s education and believed that primary education uplifts the social status of women. She said, _“In the realm of educational reform, we have urged ever since our inception that there should be free and compulsory education. Again as far as proper facilities for female education are concerned until such time as universal, free and compulsory primary education as well as an adequate supply of infant and girl's schools equipped with trained women teachers are introduced, we must continue to do our utmost to have the system of education in our existing institutions changed.”_ She vehemently opposed child marriages and the dowry system. She supported women’s right to inheritance of property in the Hindu Code Bill. She believed in women’s political participation for better representation and even criticised Jawaharlal Nehru for not having enough women members in the 1936 Congress Working Committee. Her accomplishments as a Union Health Minister (1947-1957) were exemplary. She introduced the All India Institute of Medical Sciences (AIIMS) Bill in Lok Sabha in 1956, establishing the AIIMS as one of the premier medical education institutions in South East Asia. She said, _“It has been one of my cherished dreams that for postgraduate study and for the maintenance of high standards of medical education in our country, we should have an institute of this nature which would enable our young men and women to have their postgraduate education in their own country.”_ She collected donations and medical equipment for AIIMS from countries like New Zealand and Australia and international organisations like Rockefeller Foundation and Ford Foundation. Rajkumari Amrit Kaur protected the autonomous nature of the Institute. She maintained that the Institute became autonomous from 15th November 1956, and all posts with a minimum pay of Rs. 600/- per month or more would be created with the approval of the Government, while no prior permission was necessary for posts carrying a minimum pay of less than Rs. 600/- per month.  This decision allowed the Governing Body to fill 35 Assistant Professors' posts without waiting for the Government's prior approval. She considered increasing the number of trained nurses as a more practical solution to rural health care than increasing the number of doctors. She set up a committee to study various aspects of nursing service and nursing education in 1954. Kaur emphasised the need to maintain high standards of nursing and promote nursing as a profession in her speeches during the Indian Nursing Council Amendment Bill 1957.  Amrit Kaur represented India at World Health Organization (WHO) meetings (years). Elected as the President of WHO in 1950, she noted in her presidential address, _“I am sure history will record that in spite of wars and rumours of war which every country witnessed throughout and also continues to witness, the most significant human development has been in the field of social welfare. The world has been so narrowed down by the discoveries of science which have eliminated the obstacles of  both time and distance that it is impossible any longer for any one nation to live unto itself.”_ She was a realist and looked at the healthcare infrastructure of India through a practical lens. In one of her speeches about health amenities in rural areas, she noted, _“So long as we do not pay our doctors adequately we cannot have both good men and women and good work. You have to pay the doctors a living wage, a wage that will not only attract them, but will make it possible for them to serve. We should not make conditions of service impossible for anyone.”_ She was the President of the Indian Leprosy Association and the Tuberculosis Association. She campaigned to eradicate Tuberculosis and promoted BCG vaccination amidst mass scepticism about its efficacy. Kaur also was Chairperson of the Indian Red Cross Society for 14 years. In 1957, she was awarded the Court Bernadotte Gold Medal by the League of Red Cross Societies of 14 countries–Europe, Asia and Africa for her outstanding contribution and dedicated service. She was a member of the Lok Sabha from 1952-57 and the Rajya Sabha from 1957-62 and contributed to the legislation and Parliamentary debates on health and other issues like the Prevention of Food Adulteration Bill 1954, Delhi Municipal Corporation Bill 1957, Dowry Prohibition Bill 1959, and Geneva Conventions Bill 1960. Rajkumari Amrit Kaur thus carved a special place for herself in Indian history. As India’s first female Health Minister, she became an architect of public healthcare infrastructure in India’s nascent years as an independent Republic. She paved the way for forthcoming health welfare schemes. Rajkumari Amrit Kaur was a pioneer who inspired many women to aspire to and follow their true calling. **References** [_Eminent Parliamentarians Monograph Series: Rajkumari Amrit Kaur_](https://eparlib.nic.in/bitstream/123456789/761593/1/Eminent_Parliamentarians_Series_Rajkumari_Amrit_Kaur_English.pdf)_,_ Lok Sabha Secretariat (New Delhi, 1993). V Srinivas, [_AIIMS Diamond Jubilee Celebrations_](https://www.aiims.edu/images/pdf/notice/aiims-23-9-16.pdf), AIIMS New Delhi (New Delhi, 2016). Adrija Roychowdhury, [_Rajkumari Amrit Kaur: The princess who built AIIMS_](https://indianexpress.com/article/research/rajkumari-amrit-kaur-the-princess-who-built-aiims-6570937/), Indian Express (New Delhi, 2020). [_Learn About Rajkumari Amrit Kaur_](https://artsandculture.google.com/story/learn-about-rajkumari-amrit-kaur/lwVxJZq1ZEmmWg?hl=en), Google Arts & Culture. _Previous musing: [A Resilient Soul: Ramadevi Chowdhuri](https://indianliberals.in/content/a-resilient-soul-ramadevi-chowdhuri/)_ --- ## [Musing] Raja Ram Mohan Roy on Press Freedom URL: https://indianliberals.in/musings/ram-mohan-roy-press-freedom/ ### Body The following text has been taken from Indian historian and author, Ramachandra Guha's _Makers of Modern India _(2010). In the book, Guha recognizes Raja Ram Mohan Roy as India's first liberal. The text below is among the letters Roy wrote to the Colonial government, persuading them to allow press freedom in Bengal. The strategically and carefully worded letter was written after an ordinance curbing press freedoms was passed in 1824. The ordinance required newspapers and journals to attain a license that would be issued and withdrawn, issued and withdrawn on government discretion.Your Lordship may have learned from the works of the Christian Missionaries, and also from other sources,  that ever since the art of printing has become generally known among the Natives of Calcutta, numerous Publications have been circulated in the Bengalee Language, which by introducing free discussion among the Natives and inducing them to reflect and inquire after knowledge, have already served greatly to improve their minds and ameliorate their condition. This desirable object has been chiefly promoted by the establishment of four Native Newspapers, two in the Bengalee and two in the Persian Languages, published for the purpose of communicating to those residing in the interior of the country, accounts of whatever occurs worthy of notice at the Presidency or in the country, and also the interesting and valuable intelligence of what is passing in England and in other parts of the world, conveyed through the English Newspapers or other channels … While your Memorialists were indulging the hope that Government, from a conviction of the manifold advantages of being put in possession of full and impartial information regarding what is passing in all parts of the Country, would encourage the establishment of Newspapers in the cities and districts under the special patronage and protection of Government, that they might furnish the Supreme Authorities in Calcutta with an accurate account of local occurrences and reports of Judicial proceedings, they have the misfortune to observe, that on the contrary, his Excellency the Governor General in Council has lately promulgated a Rule and Ordinance imposing severe restraints on the Press and prohibiting all Periodical Publications even at the Presidency and in the Native Languages, unless sanctioned by a Licence from Government, which is to be revocable at pleasure whenever it shall appear to Government that a publication has contained anything of an unsuitable character. Those Natives who are in more favourable circumstances and of respectable character, have such an invincible prejudice against making a voluntary affidavit, or undergoing the solemnities of an oath, that they will never think of establishing a publication which can only be supported by a series of oaths and affidavits, abhorrent to their feelings and derogatory to their reputation amongst their countrymen. After this Rule and Ordinance shall have been carried into execution, your Memorialists are therefore extremely sorry to observe, that a complete stop will be put to the diffusion of knowledge and the consequent mental improvement now going on, either by translations into the popular dialect of this country from the learned languages of the East, or by the circulation of literary intelligence drawn from foreign publications. And the same cause will also prevent those Natives who are better versed in the laws and customs of the British Nation, from communicating to their fellow subjects a knowledge of the admirable system of Government established by the British, and the peculiar excellences of the means they have adopted for the strict and impartial administration of justice. Another evil of equal importance in the eyes of a just Ruler is, that it will also preclude the Natives from making the Government readily acquainted with the errors and injustice that may be committed by its executive officers in the various parts of this extensive country; and it will also preclude the Natives from communicating frankly and honestly to their Gracious Sovereign in England and his Council, the real condition of his Majesty’s faithful subjects in this distant part of his dominions and the treatment they experience from the local Government; since information cannot in future be conveyed to England, as it has heretofore been, either by the translations from the Native publications inserted in the English Newspapers printed here and sent to Europe, or by the English publications which the Natives themselves had in contemplation to establish, before this Rule and Ordinance was proposed. After this sudden deprivation of one of the most precious of their rights, which has been freely allowed them since the Establishment of the British Power, a right which they do not have, and cannot be charged with having ever abused, the inhabitants of Calcutta would be no longer justified in boasting, that they are fortunately placed by Providence under the protection of the whole British Nation or that the King of England and Lords and Commons are their Legislators, and that they are secured in the enjoyment of the same civil and religious privileges that every Briton is entitled to in England. Your Memorialists are persuaded that the British Government is not disposed to adopt the political maxim so often acted upon by Asiatic Princes, that the more a people are kept in darkness, their Rulers will derive the greater advantages from them; since, by reference to History, it is found that this was but a short-sighted policy which did not ultimately answer the purpose of its authors. On the contrary, it rather proved disadvantageous to them; for we find that as often as an ignorant people, when an opportunity offered, have revolted against their Rulers, all sorts of barbarous excesses and cruelties have been the consequence; whereas a people naturally disposed to peace and ease, when placed under a good Government from which they experience just and liberal treatment, must become the more attached to it, in proportion as they become enlightened and the great body of the people are taught to appreciate the value of the blessings they enjoy under its Rule. Every good Ruler, who is convinced of the imperfection of human nature, and reverences the Eternal Governor of the world, must be conscious of the great liability to error in managing the affairs of a vast empire; and therefore he will be anxious to afford every individual the readiest means of bringing to his notice whatever may require his interference. To secure this important object, the unrestrained Liberty of Publication is the only effectual means that can be employed. And should it ever be abused, the established Law of the Land is very properly armed with efficient powers to punish those who may be found guilty of misrepresenting the conduct or character of Government, which are effectually guarded by the same Laws to which individuals must look for protection of their reputation and good name. Your Memorialists conclude by humbly entreating your Lordship to take this Memorial into your gracious consideration; and that you will be pleased by not registering the above Rule and Ordinance, to permit the Natives of this country to continue in possession of the civil rights and privileges which they and their fathers have so long enjoyed under the auspices of the British nation, whose kindness, and confidence, they are not aware of having done anything to forfeit. _Previous musing: [AMBEDKAR’S ANNIHILATION OF CASTE](https://indianliberals.in/content/ambedkar-annihilation-of-caste/)_ --- ## [Musing] Remembering Dr Ambedkar URL: https://indianliberals.in/musings/remembering-dr-ambedkar/ ### Body Masani had the chance to read Ambedkar’s work on Indian finance in his college days and was also examined by him. Next, they worked together in the Constituent Assembly. On the issue of Uniform Civil Code, Masani and Ambedkar were on the same page though their efforts didn’t come to fruition. _Of late, Dr Ambedkar has emerged out of oblivion to reclaim a prominent space in India’s public life, and rightly so. As a political leader, social reformer, and author, Ambedkar interacted with a range of other leading figures of his times, all belonging to different ideology and political camps. _ _Produced below is a short article by the liberal politician Minoo Masani reminiscing his interactions with the Doctor. Masani had the chance to read Ambedkar’s work on Indian finance in his college days and was also examined by him. Next, they worked together in the Constituent Assembly. On the issue of Uniform Civil Code, Masani and Ambedkar were on the same page though their efforts didn’t come to fruition. Masani’s admiration for Ambedkar’s intellect and service to the nation is clearly reflected in the piece. To us, Masani’s recollection piece is a reflection of the shared pedigree of Indian liberalism which went on to shape the nation._ Recently Dr. B.R. Ambedkar’s 35th death anniversary was celebrated in Bombay with great eclat. My path crossed Dr. Ambedkar’s at two stages of my life. One was when I was a student of economics at Elphinstone College and I read Dr. Ambedkar’s excellent book, “The Problem of the Rupee”. The book was both readable and sound. The Common Indian point of view based on the businessman’s interests was that the rupee should be pegged at 1 sh 4 d. I happened to agree with Dr. Ambedkar who took the other view espoused by the British Government that the rupee should be pegged at 1 sh 6 d. When I appeared for the B.A. examination, my economics paper contained a question on this issue. I naturally wrote in favour of Dr. Ambedkar’s view on the subject. I did not know then that he would be the examiner. The result of this accident was that my paper was very well marked by him! It was not till 1947 when I was a Member of the Constituent Assembly of India that I came across Dr. Ambedkar in person. He was a very active member of the Constituent Assembly and our Constitution owes a lot to his labours. He and I were both members of the Advisory Committee on Fundamental Rights. There were several issues of a progressive nature when Dr. Ambedkar and I did not have our way. In the company of Mrs. Hansa Mehta, we therefore signed Minutes of Dissent to the official line. As far as I can recall two of the issues were a Common Civil Code and making free and compulsory primary education a fundamental right enforceable by law and not merely a Directive Principle as was the majority view. Dr. K.M. Munshi refers to this in his book on the subject and describes us as the three idealists which I suppose we were. I am very proud that I was in the distinguished company of Mrs. Hansa Mehta and Dr. Ambedkar. _Published in the January-March, 1992 issue of the Freedom First magazine, the original text could be accessed [here](http://www.freedomfirst.in/uploads/issues/pdf/412.pdf). (page 23)_ _[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context._ To read more about Minoo Masani, click [here](https://spontaneousorder.in/minoo-masani-from-socialism-to-liberal-swatantra-party/). --- ## [Musing] Replace the GDP URL: https://indianliberals.in/musings/replace-the-gdp/ ### Body Adam Smith said that the final measure of an economy is the well-being of the people. Yet this is the one question that the policy establishment never asks. The government studies the supposed means to that end in exacting detail. It can tell us how many televisions we buy, how much money the drug or record industry invests, practically down to the last penny. _Originally conceived as a measure of national production around the Great Depression and WWII, Gross Domestic Product has turned into the magical single yardstick indicative of a nation’s progress. The discourse on prosperity and poverty across the globe in media, political slugfest, think-tanks, and academics revolves around the benchmark of GDP growth. However, as a statistical instrument originally meant to cater to the wartime manufacturing economy, the relevance of GDP has come under doubts in the increasingly digitised economy threatened by ecological collapse._ _Back in 1996, Jonathan Rowe in his The Washington Monthly article titled “Replace the GDP” pointed to the deficiencies of GDP as a measure for the flourishing of society. GDP’s focus on production, Rowe argued, accounted for the activity as gain which actually caused hardship for people. He also questioned the monetary focus of GDP which ignored the care economy and environmental quality, an essential aspect of human well-being. _ _India’s leading liberal journal Freedom First republished Rowe’s article in its April 1996 issue. Produced below is an excerpt._ Adam Smith said that the final measure of an economy is the well-being of the people. Yet this is the one question that the policy establishment never asks. The government studies the supposed means to that end in exacting detail. It can tell us how many televisions we buy, how much money the drug or record industry invests, practically down to the last penny. But nobody bothers to ask whether such means actually bring about the desired end. Economists simply assume it, and this assumption is the implicit baseline of just about every policy debate in Washington. More consumption or investment will bring about more well-being, regardless of what that consumption and investment consist and the actual impact on people’s lives. The result has been a growing chasm between the way the policy establishment measures the economy and the way Americans actually experience it. The experts keep saying the economy is up; Americans experience it as down. Economist Robert Lucas, the Nobel laureate, says the economy is in “excellent shape.” Ask your neighbours about that. Like the former Soviet rulers, America’s policy establishment dismisses such skepticism of official economics as a sign of the psychological disorder. You are spending more money, folks, they say; what possibly could be troubling you? Alan Greenspan, the Federal Reserve Board chairman, has scratched his head publicly over the ” extraordinarily  deep-rooted foreboding about the (economic) outlook.” Yet just maybe the people are on to something. Until our politicians cast off their archaic assumptions about well-being and what it helps bring about, their efforts to make things better will continue to make them worse. A good place to start would be the official gauge of economic progress, the Gross Domestic Product. The GDP is accepted as the main measure of economic policy and performance. Yet it is built upon several stunning fallacies. The first is the assumption that everything produced and sold is a ” good” by definition; more production and buying automatically equal more economic well-being. The result is a Mad Hatter’s accounting system that adds but can’t subtract. Car wrecks, divorces, disease, crime – social and environmental breakdowns of all kinds- get tallied in Washington as economic growth, simply because they cost money. _The full article could be accessed _[_here_](http://www.freedomfirst.in/uploads/issues/pdf/429.pdf)_._ Read More: [SO Musing: The Tiger Caged – Part II](https://spontaneousorder.in/the-tiger-caged-concluding-installment-from-the-economists-survey-of-india/) [_IndianLiberals.in_](http://indianliberals.in/)_ is an online library of all Indian liberal writings, lectures, and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century to the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explains the relevance of the writings in today’s context._ --- ## [Musing] Satyagraha and the Political System URL: https://indianliberals.in/musings/satyagraha-and-the-political-system/ ### Body _The Gandhian form of non-violent civil disobedience i.e. the Satyagraha has been a part of India's political picture before as well as after Independence. It has manifested in various protests against State action. H0wever, there has always been a debate on people's assertion of their demands through Satyagraha in an independent India governed by a working Constitution. In an article published in July-September 1970 issue of Quest magazine, the author Mr. Nageshwar Prasad discusses the relevance of Satygaraha in the political system. Produced below is the full text of the article. _The technique of non-violent direct action (satyagraha) has not been examined with reference to its application to a political system that claims to rest on legitimacy. The term legitimacy was first used by Max Weber while discussing the typology of authority on the basis of its acceptance or non-acceptance by the people in the system. The International Encyclopaedia of Social Sciences defines legitimacy as 'the foundation of such governmental power as is exercised both with consciousness on the government's part that it has a right to govern and with some recognition by the governed of that right.' (International ... 1968 p. 244). Legitimacy, therefore, in the first instance, presupposes the right of the authority to govern and second the consent of the governed to such a right. From the point of view of this definition, no other system than democracy can approximate an ideal type of legitimacy because the democratic authority rests on the consent of the majority of the governed.  The technique of satyagraha was not developed in a system which claimed to rest on legitimacy. Both in South Africa and India the system that confronted Gandhi was based on illegitimacy. They derived their authority to govern from naked force rather than consent. Alienation from the system rather than participation in it was the distinguishing feature of these systems. It was to such illegitimate systems that the technique of non-violent direct action was directed. And therefore it could be justified. But in a legitimate system such as democracy, it is supposed that democratic institutions and procedures are effective means of satisfying the basic functions of the government. In such a system, therefore, no other means which fall outside the boundary of the democratic framework, it is argued, can be used if the end sought is the fulfilment of the basic functions of the government. At this point, we should define the functions of the government. For the time being, we accept the government and the political system as the same, although the latter is a much wider concept (Almond and Coleman, 1960, p. 5). According to Almond, there are four input and three output functions of a political system. (Ibid., p. 17). Of the seven functions, two are most germane for our discussion here. The political system articulates the interests, claims and demands for political action. This he calls interest-articulation. The second function which the political system performs is the formulation of general policies where interests which have been articulated may be combined, accommodated and compromised. This he calls the interest-aggregation function of the political system. The effectiveness of a system therefore can be judged in terms of the extent to which it aggregates different interests which are articulated by different groups in society. In other words, the demands that the system articulates at the political level must be combined and accommodated at the policy output level. This does not mean that the political system performs its interest-aggregation function in a natural or a mechanical way, that there remains nothing to be done once the demands have been articulated. The ideal situation of course would be that the system should combine and compromise demands into policy output. But this does not happen. There are many groups competing with each other, demanding that their interests be responded to by the political system. In a democracy, such competition is very common. The more developed democracy is, the more organised will be the competition of different groups in society. But however organised group competition might be, it is not always possible for the system to aggregate the interests and demands of all the groups at the same time. This is for three reasons. First, the political system may not command sufficient resources to satisfy the demands of all competing groups. Second, as a natural corollary of the first, the groups that command greater political resources (Dahl, 1963, p. 15) may be able to influence the policy output in their favour and third, a politically resourceless group may not command easy access to the political machine to influence it in their favour, because as Dahl says, the 'control over political resources is distributed unevenly even among adults.' (Ibid.). Among political resources, Dahl mentions 'money, information, food, the threat of force, jobs, friendship, social standing, the right to make laws, votes and a great variety of other things.' (Ibid.) This state of resourcelesness is likely to exist in all societies, perhaps in under-developed societies more than others. To the extent that these resources are not accessible to the groups in society, the legitimacy of the political system will always remain questionable to them. The greater the number of such groups, the greater will be their alienation from the system and the lower will be the scale of legitimacy. In turn the greater the inaccessibility of such groups to political resources, the more haphazard, intermittent, spasmodic and unorganised will be their interest articulation. If this happens, the legitimacy of the political system will always remain in crisis. It is necessary here to refer to two of the categories among Dahl's political resources mentioned above. The first is the vote and the second is the threat of force. A case is often made out that the right to vote guarantees certain mechanisms through which groups periodically may express their demands for satisfaction. Together with votes go other instruments through which demands can be articulated. It is true that in such a system opportunities for the expression of demands exist. But the democratic political system has till now not been able to satisfy all sections of the population through these traditional means. This applies even to such an advanced political system as the American where the ethnic minority still continues to languish under many disabilities. Thus the necessary guarantee of the usual instruments of interest articulation may not succeed in inducing the system to respond to the demands of certain groups in society. Or the process of interest aggregation may be partial and slow, with the result that the frustration resulting from such groups might outstrip the usual channels. We now turn to the political resource that Dahl characterises as 'threat of force'. By this, we mean to resort to violence by certain politically resourceless groups for making demands upon the political system. The use of force in a system may be justifiable on many counts. First, the system may have alienated an overwhelming majority of the population. Second, the system may be bogged down in continuous ineffectiveness and the ruling elite might have become so self-centred as not to permit interest articulation and interest aggregation functions to take place at all. Such a closed system will then need to be replaced and therefore the use of force in such extreme cases may be justified. But in an open political system such as democracy, the politically resourceless groups should find some other instrument of self-articulation which is different from the usual democratic channels and which eschews violence but does not become dysfunctional for the democratic framework.  Gandhi faced this problem, as I have stated, early in his public career in South Africa and later in India. In South Africa, the Indians as a group were shut off from the political system. Gandhi, therefore, challenged the very basis of the legitimacy of the system. In India, a whole nation was rigorously kept out of participating in the decision-making process of the system. In terms of Lipset's formulation, therefore, the systems were both illegitimate and ineffective (Lipset, 1963, p. 69). Gandhi, therefore, invented the technique of satyagraha (non-violent direct action) to undo this unequal status of the groups in the former and overthrow the latter. But what about a situation in which the legitimacy of the democratic system is unquestioned but effectiveness in terms of response to the demands of certain groups in society is low? And if these groups are politically resourceless, can the use of satyagraha be justifiable? Gandhi's answer in such a situation would be a straight 'yes'. If the system becomes so inefficient that demand input and policy output are not in equilibrium, it obviously loses the confidence of certain sections of the population. In the face of persisting inertia on the part of the system, non-violent direct action is the only course that can be conceived outside the usual democratic procedures. Such a system at least ceases to depend upon the consent of the politically resourceless groups. Gandhi, therefore, wrote as long back as 1914 in Indian Opinion 'In politics, its (satyagraha’s) use is based upon the immutable maxim that government of the people is possible only so long as they consent either consciously or unconsciously to be governed .. .' (Gandhi, 1951, p. 35). In other words, the legitimacy of the system rests only on the consent of the different groups in the political system.  If, then, some of the constituents of the system, as a result of persistent denial of access to it, come to a point where they have to choose between violent and non-violent direct action, Gandhi prefers the latter. Such a situation is not unlikely to develop in a legitimate political system, especially in emerging nations which have opted for the democratic system. In his evidence before the Hunter Committee, Gandhi conceded this point. 'I can conceive the necessity of satyagraha in opposition to the would-be full responsible government.' (Ibid. p. 33). To the question whether 'with all the rights of self-government we shall be able to dismiss the government', he replied, 'I cannot feel on that point so assured forever. In England, it often happens that ministers can continue in the executive even though they lose all the confidence of the public. The same thing may happen here too and therefore I can imagine a state of things in this country which would need satyagraha even under Home Rule.' (Ibid., p. 34). Once the use of satyagraha is conceded in a democracy, certain consequences might follow for the system. One of these, which has been very often emphasised, is that any mass action, however non-violent, is likely to generate forces of anomie which may endanger the stability of the system. The answer to this will depend upon the responsiveness of the system. How soon can the system process the demand and satisfy the groups making it- this will, eventually, test the system's stability. Apart from the system’s ability to satisfy demands, Gandhi prescribed some pre-conditions for non-violent direct action. In the first place, the technique was to be used only when all legal, formal and other peaceful methods had been exhausted. In the second place, if satyagraha seemed inevitable, the participants had to be trained in such a way as to be able to exercise this weapon without deviating from the norms and values envisaged by the technique. In other words, like Almond's political culture, the culture of satyagraha presupposed cognitive, affective and evaluative orientation of the participants in the action process.  Just as democracy cannot be sustained without a certain kind of attitude orientation, satyagraha too cannot be sustained without the psychological orientation to the whole process. In other words, the culture of satyagraha, like the political culture, refers to the entire technique with all its norms and values as internalised in the cognitions, feelings and evaluations of the participants in the action process.  Almond and Verba, 1963, p. 14). Gandhi subsumed it under what he called the discipline of satyagraha. We call it the culture of Satyagraha because the term broadens the entire meaning of the technique. Thus the term signifies the participant’s knowledge and belief about the technique which we subsumed under cognitive orientation. Similarly, by affective and evaluative orientation, we mean the emotive commitment to and judgment and opinion of the participants about the action technique.  The question is how realistic it is to expect a large mass of people to participate in the action to internalise the satyagrahi culture. To the extent that the participating masses are not trained in the culture, the danger of deviation from the strict path of non-violence will always loom on the horizon. It is here that the role of training in non-violence and leadership is of inestimable value. This leadership aspect of the action is of crucial value to our discussion.  Almond and Verba in the Civic Culture discuss this aspect of the political culture in detail. I am trying to apply it to the concept of what I call the culture of satyagraha (see Almond and Verba, pp. 14-15). The role of leadership consists of planning, directing and guiding the whole course of satyagraha action. Gandhi made this very clear before the Hunter Commission. ‘As I intended to make it a mass movement, I thought the constitution of some such Committee (i.e. the satyagraha Committee) as we had appointed was necessary, so that no man should become a law unto himself, and, therefore we conceived the plan that the Committee should be able to show what laws might be broken'. (Gandhi, 1951, p. 21). If, therefore, the participants were not as well trained as could be expected, the leadership of the movement must be thoroughly soaked in the satyagrahi culture. Emphasising this aspect, Gandhi declared, 'Satyagraha by the vast masses of mankind would be impossible if they had all to assimilate the doctrine in all its implications. I cannot claim to have assimilated all its implications nor do I claim even to know them all. A soldier in an army does not know the whole of military science; so also does a satyagrahi not know the whole science of satyagraha. It is enough if he trusts his commander and honestly follows his instructions and is ready to suffer unto death without bearing malice against the so-called enemy.’ (Ibid., p. 363).  _The article was originally published [here.](http://www.freedomfirst.in/uploads/quest/pdf/QT066.pdf) _ --- ## [Musing] Rukhmabai Raut: A Beacon of Courage and Change in British India URL: https://indianliberals.in/musings/rukhmabai-raut-a-beacon-of-courage-and-change-in-british-india/ ### Body ______ Rukhmabai Raut was a pioneering woman who became one of the first female doctors to practice medicine in British India. Born in 1864, Raut's life took a significant turn when she was married off at a young age of 11. However, she courageously resisted the marriage and fought a legal battle, the Dadaji Bhikaji vs. Rukhmabai case, which attracted national attention. Eventually, Queen Victoria dissolved her marriage, and Raut pursued further medical studies in England. Her activism and influence played a pivotal role in enacting the Age of Consent Act in 1891, which ended child marriages. Raut dedicated 35 years of her life to serving as the Chief Medical Officer at a state hospital in Rajkot before retiring to Bombay. Her remarkable contributions to medicine and the cause of women's rights continue to inspire generations. Read more about her journey [here](https://indianliberals.in/bn/content/rukhmabai-an-unrelenting-force-against-patriarchal-norms/). Read the stories of many other Indian Liberals [here](https://indianliberals.in/25-visionaries-indian-liberals-of-modern-india/) where we celebrate 25 visionaries of modern India. _Previous musing: [Acharya N G Ranga: The Farmer's Friend and Swatantra Party Stalwart](https://indianliberals.in/content/acharya-n-g-ranga-the-farmers-friend-and-swatantra-party-stalwart/)_ --- ## [Musing] The Secular State URL: https://indianliberals.in/musings/secular-state-rajaji/ ### Body What the Indian Constitution-makers aimed at was not a general indifference to religion but a tolerant and broadminded appreciation of all creeds and denominations and a respect for one another's religious beliefs and practices. It has been repeatedly affirmed that when the Indian Constitution laid down that India shall be a secular State, it was not intended that the State should discourage or be hostile towards religion, but that what was intended was impartiality towards all creeds and denominations. It was a refusal to accept the theory that different religions made different nations or that the State should belong to one religion more than another. In a recent article in the _American Review of Politics_, an eminent writer has expounded (it great length how although the United States of America is a ‘secular’ State as far as any one denomination is concerned, it is at the same time a ‘religious commonwealth’. America, according, to this writer, believes in the necessity of a truly religious basis of citizenship. According to the American Constitution, Congress cannot make any law ‘establishing’ any religion or prohibiting the free exercise of any religion. But the American Constitution presupposes a religious society. ‘Secular’ in the American language means ‘non-sectarian’, and not a negation of or indifference to religion. The basic relationship between religious life and politics in America is not founded on a negative policy of non-encouragement. It is a positive policy of impartial encouragement of all religions and of all religious life and activity in American society. The European concept of the ‘secular’ State is very different. It is a concept hostile to religion starting out of a feeling that religion is a political nuisance and that religious belief is a threat to political unity and stable government. The American concept of the ‘secular’ State, on the other hand, is grounded on a firm belief in the incomparable value of the religious life. The separation of the State and Church in America arose out of the desire to protect religion and not out of hostility or dislike. The American people hold religion to be indispensable to the maintenance of republican institutions (Tocqueville). The framers of the American Constitution believed that the State can be free only it the people are basically a religious people. Although there has been some misunderstanding in some quarters about it, it may be stated that the Indian conception of a ‘secular’ State is nearer to the American concept than to the European. The Constitution did not intend to discourage or undervalue the place of religion in society. It placed all denominations and creeds on a religious basis without reference to the strength of their following. It marked out a different path from what was chosen by Pakistan. It is true that national integration is rendered more difficult by differences in creed or denomination. But national stability would be fully endangered if all religious faith should gradually disappear. Whatever the forms and rituals of different creeds and denominations, religion and the restraints it imposes on human behaviour are of inestimable value to society, What the Indian Constitution-makers aimed at was not a general indifference to religion but a tolerant and broadminded appreciation of all creeds and denominations and a respect for one another’s religious beliefs and practices. This article by C. Rajagopalachari (Rajaji) first appeared in the August 1957 issue of Swarajya Magazine. The original document can be accessed [here](http://indianliberals.in/~_admin/pdflanguage?id=477576353.pdf). _[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context._ [Read More SO Musings](https://spontaneousorder.in/?s=SO+Musings) --- ## [Musing] Sharad Joshi on Liberalism in India URL: https://indianliberals.in/musings/sharad-joshi-on-liberalism-in-india/ ### Body _Published in Freedom First Magazine 1996, the following article by Mr. Sharad Joshi offers valuable insights on liberalism in India vis-a-vis its past, present and future.  The author who was himself a liberal farmer leader and parliamentarian reflects on liberalism in ancient India and the lessons it has for liberals today. _Liberalism is far from being the dominant or even the mainstream school of thought in India. Worse still, most consider liberalism as an idea imported from abroad, derogatory to national pride. Within the country, the cry goes that liberalism suits the convenience of the affluent and the strong minority and militates against the welfare security net that the weaker masses of society need so badly. The defunct Nehruvian socialism is being replaced not by the vibrant forces of liberal entrepreneurship but by lumpen chauvinistic and communal jingoism. Socialism is yielding place to fascism and the fastest riding comets on the Indian horizon flaunt unabashedly their admiration for Hitler. The liberals, on the other hand, are handicapped under the electoral laws which require that to be eligible for registration and recognition political parties must swear allegiance to socialism and so reaffirm in a specific affidavit before the Election Commission. The situation is serious and fraught with grave consequences. If India goes the wrong way, even if temporarily, the cost could be very high and the long term consequences could well spread to other regions as well. The doctrine as also the 'realpolitik’ of liberalism in India would bear close scrutiny. **Seven Centuries of Liberal Eclipse** Is it true that liberalism is an alien transplant on Indian soil? Liberal writers are partly to be blamed for this mistaken impression. Most of them come from the city-based English-speaking western-cultured class of elites. In their writings, they trace the beginnings of liberalism to J.S. Mill and Adam Smith and of Indian liberalism to Dadabhai Naoroji, Gokhale, Raja Rammohan Roy, Narmad, Phule, Agarkar, et al. These great masters remained briefly on the centre stage in the early days of British rule between 1860 and 1920, and were swept aside by the tide of nationalist-chauvinistic and socialist forces. Liberal writers have left an impression that the pre-British indigenous culture was one of despotic authority tyrannizing subjects resigned to their preordained fate. Apart from being untrue, this notion has given rise to a broad feeling that this alien phenomenon is unlikely to take root here. Indian liberals are, at least partly, responsible for their predicament. The 'despotic rulers and tyrannized masses’ scenario certainly fit the situation in India after the Muslim invasions in the 13th century. Aggressors can never rule a conquered territory through liberal democracy. Power in occupied territories, not only political but also educational, economic and even cultural, tends to get centred in the political government. Liberalism in India got stamped out as far as the non-muslim subjects were concerned, except perhaps at the village level. **Early Polycentred Society** That does not mean liberalism was unknown to India. In fact, there is reason to believe that ancient India was the cradle of tenets that form  the core of modern day liberalism. Traditional Indian societies were generally pluralistic. The king, kshatriya by caste, was the unquestioned sovereign who was venerated as the very incarnation of super-god ‘Vishnu’ but had little power over the seats of learning and over the poor but scholarly brahmins. Rajaji was fond of quoting a Gujarati proverb meaning, ‘Where the king is a trader his subjects are paupers’. The political head had little to do in matters of learning and trade.  This polycentrism may not, because of its caste basis, pass modern day scrutiny; but it constituted, at least in theory, a rare combination of muzzled monarchy and social prestige divorced from both wealth and power. The reality might not have been fully as rosy as all that; that such values were cherished at all so early in history is itself remarkable even when compared to the situation then prevailing in Europe, China or Japan. **Cradle of Liberal Tenets ** The liberalism of ancient Indian society does not appear to have been limited to superficial social and political structures. The ancient Indians, particularly of the mainstream ‘Vedanta' school propounded theses that came very close to the philosophical assumptions of modern liberalism - uniqueness of the individual, rejection of absolutism, scepticism of authority and trust in the efficacy of competition. Firstly, the ‘Vedanta' system held all qualitative attributes to be illusory and refuted all claims of authority by temporal institutions claiming divine contacts. Truth, beauty and goodness represent eternal pursuits - paths and not stations- on which the mighty 'Shiva’ wends his way.  Secondly, since the journey is the thing, every individual charts his course according to his own light. Despite the illusory nature of all existence one is not to renounce action but pursue with full devotion all undertakings without any attachment.  Thirdly, there is no contradiction between the unitary and the holistic. The lights of an individual are consistent with the object of the Universe. All intermediaries like the Church and Planning Commission are pointless and counter-productive.  The tyranny of a monarch or of a church would have been inconceivable in the ‘Vedanta’ society. It is a pity that those wise men sought to increase their degrees of freedom through abstinence rather than through generation of affluence. This made them vulnerable to attacks by barbarian hordes. Worse still, they succumbed to the vainglory that they had come to the end of history and could not do better than continue in static equilibrium till the end of time. This they ordained the disastrous caste system- division of labour by accident of birth- resulting in internal contradictions that were to prove so disastrous.  **Plethora of Statists** The British who, unlike the Muslim invaders, had a liberal background, established the rule of law and in many ways treated India as a laboratory for model-building. Their efforts to bring equality in the caste-ridden land were effectively thwarted by the revolt of 1857 and, thereafter they limited their rule to administration and colonial exploitation. Maintenance of the Raj, naturally, had overriding priority. Consequently British rule, though soft by colonial standards, was far from being a liberal democracy. The coming of the British gave rise to the grand masters of Indian liberalism, who generally held the view that freedom without equality would be pointless and that a period of probation under the British would help in removing the inequalities of Indian society. It would also give birth to a genuine nation of unified people in a new era of freedom. But there were other schools which pandered to popular chauvinistic cravings more effectively.  **Socio-Religious Movements** Firstly, there were a number of socio-religious reformist movements which argued that there was nothing basically wrong with Hindu society. All it needed was some face-lift and a few corrections here and there. Hindus were divided and needed to be forged into unity through community activities. These movements prompted various activities like community or mass prayers on the lines of the Christian prayers and Muslim ‘namaz’. This was tantamount to abandoning the essence of the Hindu’s individualistic relationship with one’s personal God. There were others like Tilak who used public worship of God Ganesha for political mobilization.  Secondly, there were movements that sought to glorify indigenous traditions and history in order to concretise the idea of a Hindu nation- yet another attempt to follow the example of the victors. They were ostensibly upholding Hinduism, but in fact jettisoning its precious core frightened by the engulfing storm. The present day communal forces- BJP, RSS, VHP, Shiv Sena- are descendants of these movements.  **Oppressed Communities** A third force that sprung up was basically a reaction to the attempts of the high-castes to arrogate to themselves the leadership of the entire Hindu people including those castes and communities that were not allowed to enter Hindu temples or to touch Hindu scriptures. These were denied all access to education, decent livelihood and were considered untouchable. Ambedkar, Periyar, Ramaswami Naicker and others organised certain castes and communities from the backward classes. The oppressed communities have traditionally been artisans, and largely self-employed workers. A programme for the de-strangulation of village industries would have been appropriate for the general advancement of these people. It is strange that the leaders of the oppressed classes failed to evolve an economic programme of this type. To this date, the modern day descendants of this movement are infatuated with reservation of jobs.  **Gandhian Platform** Gandhi represented  a platform much truer to Hindu thought that upheld at the same time some sort of ecumenism- the identity of all faiths. The Mahatma worked actively for social reform, propounded a village-based constructive programme for economic advancement and introduced a spiritual dimension in political activity which was to become his hallmark. Truth and non-violence were his creed and he was opposed to the very idea of a state which could not exist without violence. Gandhi was as close as one can come to the idea of an anarchist society. Faced with the harsh realities of life, he made concessions and compromises in his later years to such an extent that he accepted at one stage the need to nationalize all basic industries. Nevertheless, Gandhism essentially stood for minimal and decentralised Government. **Failure of the Nehruvian Model ** The Russian revolution, claims of socio-economic achievement by the new czars there and the anti-imperialist tirades of these latter had struck a sympathetic chord and endeared socialism to the Indian masses as also intellectuals. The Congress Socialist Party was formed within the Congress itself, Nehru was himself full of social effervescence since his visits to the USSR. Socialism in India meant not nationalization but rather ownership by the toiler. But the State was to be the instrument of this transformation. In sum, the ‘Vedanta’  tradition of liberalism got suppressed under successive foreign rulers and the forces that participated in the freedom movement were all statist in the sense that they looked upon the State as the instrument for  the desired transformation. All of them favored a strong interventionist State. Gandhi’s anarchism proved to be little more than the scoring point of an obscurantist vision. Independent India, instead of marking the first step in the direction of dissolution of the State, as the Mahatma envisioned, became an infamous example of the license-permit regime with all its inevitable consequences: poverty, illiteracy, unemployment, indebtedness, an inefficient and corrupt bureaucracy, criminalisation of politics, etc. The end of the Cold War pulled the rug from under the feet of many a tinpot socialist edifice had begun to crumble.  This ought to gladden the hearts of all freedom-loving people who have suffered for almost half a century under the heels of a moth eaten planning regime. A regime which worked, in effect, as crony capitalism- everything is banned unless you have the necessary contacts. Unfortunately, they find themselves caught between the devil and the deep sea.  The fall of a socialist brand of Statism, however, holds little promise for liberal democrats. The socialists are fighting a not so valiant last ditch battle advocating welfare programmes, protection of the environment and a policy of doles. The economic _impasse _has caused disillusionment in the public mind over the capacity of any government to do any collective good.  The situation is very similar to the post Versailles situation in Germany. The foreign exchange crisis that forced the then ruling party to start talking of economic reforms has been overcome, at least for the time being, without any improvement in the balance of trade.The fiscal deficit is running uncontrolled. Political stability is a thing of the past. It only needs one reversal, economic or political, to put the people in a mood to welcome any comic-book Hitler. A good number of aspirants are already hovering around stoking the fires of  age-old animosities and preaching communal and caste hatred. **Fascism to Replace Socialism?** Out of the various political forces which emerged after the advent of the Raj, the anarchist Gandhian school has fallen by the wayside and become irrelevant. Nehruvian socialism stands discredited but the dynasty continues to be venerated all the same. Left-to-Centre parties are trying to sensitize the nation to the issue of ‘reverse injustice’ through reservation of jobs in a bureaucracy that has become the most difficult burden for the country. It is the Hindu chauvinistic parties capitalising on issues like desecration or demolition to this temple or that, the absence of a common civil code, Bangladesh immigrants, or the status of Jammu and Kashmir, to mention a few, that appear to be benefiting from the situation.  The Hindu political parties are understandably taking a protectionist position in their economic programme to reinforce their patriotic image. They are drawing a good response to their opposition to the entry of multinationals into India. Where do the liberal forces stand in all this? Organising liberals is almost a contradiction in terms and hence a formidable task in any country. How does one set about organising a highly individualistic people opposed to the very idea of authority? **The Swatantra Party** Rajaji, who had a very high standing among the followers of Gandhi and who became the first Indian Governor General of independent India, had correctly foreseen the disaster that Nehru’s license-permit quota Raj would produce. He founded the first liberal political party in India, The Swatantra Party. It started off well but was swept out in the Indira wave after her Bangladesh triumph in 1971. **Swatantra Bharat Party** In 1994, an attempt was made to create a new liberal party, Swatantra Bharat. It pulled over a million votes in the elections to the Maharashtra State assembly but  secured only two seats. Its chances in forthcoming elections are negligible since it cannot even register  itself without dishonestly swearing allegiance to socialism. Economic reforms have come to a grinding halt. The government considers itself under obligation to take recourse to blatantly populist measures. A serious programme of liberalisation will need to restore law and order, clear the Augean stables of the judiciary, cut down the forest of economic regulations, dismantle bureaucracy, restore fundamental rights under the Constitution and work out a reasonable exit policy. Such a formidable agenda would require a strong government. There is no prospect of this happening in the near or distant future.  **Chances for a Liberal Polity** In fact, very few appear to be interested in a liberal polity. The beneficiaries of the socialist epoch are trying hard to thwart reforms in every possible way. Political leaders have got used to earning commissions for securing government favours. Industrialists think they cannot do without state protection. Employees with their cushy jobs and side-incomes want the bureaucracy to expand and are not enthusiastic about privatization. Mafias control politicians and governments and would not like to see their underground empires demolished through liberalisation. The only two categories of people who would be interested in liberalisation and globalisation would be the farmers who have suffered hefty negative subsidies and consumers who have been fleeced by the socialist monopolist and have had to pay exorbitant prices for shoddy goods. The prospects are far from bright. **The Indian Liberals’ only Ally** But history gives ample evidence that liberty blossoms in the most unexpected of places and at seemingly impossible times. The world is moving towards demolishing walls that have fragmented and distorted the world. India cannot remain for long an island of statism. Indian history shows that our people believe in fighting over tyrants if an Indira Gandhi comes along. An Indian Hitler will have to be exceptionally lucky to survive for any length of time. This much hope ought to be enough for seekers of liberty and equality. --- ## [Musing] The Shetkari Sangathana and the History of the Farmers' Movement in India URL: https://indianliberals.in/musings/shetkari-sangathana-history-farmers-movement-india/ ### Body _The farmers’ movement in India is as old as time itself. Throughout our independent history, there have been numerous struggles and demands for reforms by Indian farmers against all dispensations. The demand for reforming the agricultural sector, giving access to open markets and de-regulating the economic freedom of farmers has been time and again raised in the past decades._ _The following musing is an excerpt from a booklet titled ‘Visionaries of a New Bharat – Shetkari Sanghathana’ which traces the evolution, the ideology, and the vision of the Shetkari Sanghatana, a farmer’s movement spearheaded by Sharad Anantrao Joshi, and elaborately lays down their demands with their rationale. _ The Shetkari Sangathana (SS) in Maharashtra functioning since 1998 is a true representative of the present epoch of the farmer’s movement. The SS has been spearheading the developmental and ideological debate. The SS was kick-started in the late 1970s by Sharad Joshi. The SS is a non-political, non communal and non-pastoral union of peasants with a single point-programme – “Securing remunerative prices for the agricultural produce.” The single point may seem to be extremely simplistic, but, according to the thought of SS, it is the key to the economic development of India.  ## HISTORY OF FARMERS’ MOVEMENT IN INDIA Movements; agitations, uprisings and revolts by peasants are as old as history itself. The primary objective of the farmers’ uprising, agitations and conquests during the period of British Rule was to seek abolition of the Zamindari as against the Ryotwari (lease holder) system. In the long tradition of lndian history, the land in the village belonged to the village Panchayat. The division of agricultural labour continued from generation to generation between the cultivators and the artisans. The British brought in their own revenue system based on private ownership of land. Land was measured, numbered and allotted to prominent villagers who undertook to collect their revenue for the government or to those whose traditional role came closest to that of the cultivator/accountant.  The British land tenure system had two effects. The invasion of the Indian domestic market by cheap products of the British industry, particularly textiles, crippled the village artisans and dried up the money inflows into the village economy. Under these circumstances, levy of land-taxes payable strictly in cash, drove even the relatively well-off farmers to borrow money from whoever happened to have some spare cash, howsoever paltry. In a very short time, indebtedness mounted and the mortgaged lands passed on to the moneylenders/zamindars. The resultant discontent was directed at the moneylender and revenue collecting landlords instead of the prime villains i.e. the Colonial State. The newly English educated and articulate nationalists movement blamed the state of Indian agriculture on the internal contradiction between the rich farmers and the small peasants.  Till the independence in 1947, the poverty of the countryside was attributed to either the weaknesses of the cultivator or to the exploitation by the landlords and the moneylenders. The independence in 1947 brought in the abolition of both the revenue collector zamindars as also the moneylenders. The despised institutions were replaced by rigid credit and bureaucratic institutions that did not attenuate the level of exploitation but carried the agricultural surplus away from the countryside to the urban areas.  The independence and the partition marked the beginning of the years of food shortage and famines. The new national State started taking draconian measures calculated to take away food surplus from the villages to urban industrial areas. The commonly prevalent notion, at the time, was that the poverty of the farmers was due to low productivity, illiteracy, poorer health conditions and age-old social customs. The generally pervading spirit of nationalities did not permit the emergence of any farmers’ movement directed against the State. The Green Revolution of the 1960s changed all that. The agricultural productivity in most areas and crops multiplied manifolds. The farmers found, nevertheless, that their income was inversely proportional to the yields they obtained. India had a “Green Revolution” producing an abundance of crops but leaving the farmers indebted and poor.  This signalled the right moment for the emergence of a Nationalist farmers’ organisation. The blame for the poverty could no more be put on the moneylenders or on the landlords. It was no more possible to blame the illiteracy, the indolence and wasteful social customs. The time survived for the emergence of the Shetkari Sanghatana.   To read the full text, click on this [link](https://indianliberals.in/liberals/visionaries-of-a-new-bharat-shetkari-sanghatana.pdf). type=content&p=8520). Needs editorial review._ --- ## [Musing] Sharad Joshi on The Tragedy of Being a Farmer in India URL: https://indianliberals.in/musings/sharad-joshi-tragedy-of-being-a-farmer-in-india/ ### Body The following is an extract from a speech delivered in the Rajya Sabha by Mr. Sharad Joshi in August 2005 on the question of farmers' suicides. It was subsequently published in the October 2007 edition of the Freedom First magazine with a brief introduction written by Sharad Joshi himself.  In this piece, he has aptly captured the problem faced by India's farmers and advised the Government to take immediate measures by addressing the root of the crises. I have accepted the editor's suggestion to keep the readers of 'Freedom First informed about my interventions in the Rajya Sabha. I am the only Member of Parliament of the Swatantra Bharat Paksha (SBP), India's only liberal party that proudly claims to be the successor of the erstwhile Swatantra Party of Chakravarti Rajgopalachari. Every party in Parliament is allotted a quota of time depending upon its numerical strength in the Parliament. No quotas are given for alliances like UPA or NDA. Fortunately, even the minor parties get a minimum of five minutes in each debate. This is a serious handicap and also an opportunity - On most subjects, as an activist of the farmers' movement and the national President of the SBP, I have something to say that marks a different paradigm. Hence, considering the time limit, there is no scope for any explanations, elaborations, and elucidations and much less for ornamentation. The paradox is that parties like the Congress and the BJP who have been in power at the Centre and hence, responsible for the present sad state of affairs in the country, get the maximum time most of which is consumed by one or two senior leaders of the party to indulge in soapbox oratory accusations and counter-accusations. The SBP's turn comes invariably at the end of the debate, mostly late in the evening, when the Rajya Sabha often wears a deserted look. In the last two years there is growing awareness that the liberal point of view that I put forward is always original and, hence, quite a few members from all sides make it a point to be present when I get up to speak. Since I have little respect for the Nehru-Gandhi dynasty and an unconcealed antipathy for leftist economists, there are often interruptions and rowdy sloganeering from their benches during my speech. My speech, published below, for the readers of Freedom First was marked by intermittent interruptions from the Congress benches and a spirited defence by Mrs. Sushama Swaraj For the last two years farmers have been committing suicide practically every hour. It is not just a matter of social tragedy or a tragedy for the whole of the farmers' movement, it is a personal tragedy for me. The fact that the Prime Minister himself went to Vidarbha supported by so many eminent economists but could not forge a solution that could give the farmers hope enough to, at least, postpone the decision of suicide by a couple of hours or by a couple of days, is a personal tragedy for me. Thirty years back, we launched the first farmers' movement in lndia after the Green Revolution. The Green Revolution had increased the productivity of agriculture by 10 to 15 times and farmers had reached a state where the more they grew, the less they got and that was when the farmers' movement began. We took an oath, extracts of which are saying that we will secure for the farmers remunerative prices for their produce, the full reward for their toil so that they can live a life of self-respect and happiness exactly like any other citizen in this country. Now, I confess that I have failed. Because, 25 years after I took that oath, for the first time I find that the whole of India is strewn with bodies of the farmers who found it impossible to make a living and had no hope that their conditions would be any better. In the 1950s, Lal Bahadur Shastri's slogan of ' Jai lawan, Jai Kisan' and the accompanying Green Revolution started two processes: - the Jawan went on the war-front, sacrificed himself and became a martyr; - the Kisan, on the food front, fought and tried his best to contribute to the foodgrains production in the country. The Green Revolution succeeded; productivity increased. But, at the same time, the government failed to see that for his added effort would the farmer get an adequate reward. While productivity grew while production grew, the farmers were not able to cover even the cost of production and it is this wound which has gangrened over the last 50 years. This was the policy which was followed regularly over the last 55 years. We do not need to find out whether the BJP government followed policies that hurt the farmers or whether the successive Congress governments did it. All that you have to see is during which period was the farmers' subsidy negative. If the Aggregate Measurement of Support (AMS) was negative, that is to say the farmers' prices were less than the cost of cultivation, that means that government is guilty of the ongoing genocide by farmers. In which case, governments are also guilty of murder. The simple index is, did you have a negative AMS or a positive one. C. Subramaniam, the minister of Agriculture under Lal Bahadur Shastri recognised, for the first time, that agriculture was a losing proposition and that to make with the Green Revolution a success, farmers have to be given adequate remunerative prices. He appointed an Agricultural Prices Commission (APC). That was a creation of Bharat Ratna C. Subramaniam. For the first five years, the Agricultural Prices Commission did succeed in giving comfortable prices to farmers which resulted in not only agricultural growth in Punjab, but even industrial development in that State. But, after those five years were over and after Indira Gandhi became the Prime Minister, the Chairmanship of the Agricultural Prices Commission was given to one of the Leftists, who are by their dogma, against the farmers, calling them kulaks and so the Commission was used systematically against farmers. It is the appointment of Leftist Chairmen which resulted in farmers getting inadequate prices. I am not putting these things on record to criticize this or that government. The farmers' present critical state is a gangrene wound of more than 50 years. Before giving suggestions one has to do the diagnosis. How can one give a prescription without diagnosis? Whether the government was good to the farmers or not, can be examined by an objective criterion, i.e., whether during that period, the AMS was positive or negative. This is a very positive criterion. When you examine it, you will find that all this period the AMS was negative. A calculation shows that from 1980 to 2000 alone the loss caused to the farmers by government policies was of the order of Rs. 300,000 crores. Finally, I came to the conclusion that the gangrened wounds of the farmers over these 55 years are now expressing themselves in the form of mass suicides. Now, I will come to the prescription as to what has to be done, and, these are some very concrete suggestions. I think, what the Prime Minister could not achieve in going to Vidarbha, you will be able to achieve, if government is sincerely concerned about the lot of the farmers and is prepared to show the necessary courage to act on these suggestions. Providing additional credit is not going to help. When the Prime Minister declared from the Red Fort that the supply of credit has increased from Rs. 87,000 crores to Rs. 1,68,000 crores, a senior officer of NABARD was declaring that not only has refinancing come down, but cooperative banks are also not giving loans at 7 % because they have certain apprehensions about the policy of 7 %. At the same time, the same officer declared that even though the amount of credit had increased, the number of beneficiaries had not increased. That means that the same people were getting the new loans as well. Now, if this is the situation, additional credits are not going to help the farmers. On the other hand, additional credits will get them into further indebtedness and suicides. There is a finding of a very respectable body that 40% of our farmers want to leave agriculture because they find that it is no more possible to live in it. And, I had made a suggestion and this is something that I am prepared to convince the farmers about. The farmers, even though they talk of the black mother, the mother earth, etc., in fact, whenever they get an opportunity, they quit agriculture. They vote with their feet. I think, what needs to be done is, (as happened before the Green Revolution, that when the farmers got a chance to quit because of the tenancy legislation, because of the Land Ceiling Act, etc., on the threshhold of the coming agricultural revolution) they have to be given some, kind of a way out, a kind of a golden handshake, a Voluntary Retirement Scheme (VRS) by developing a land market where the farmers can offer a land for sale and those who think they can do better in agriculture in the new atmosphere, can purchase the land and come in. That is going to be the best solution, giving a ray of hope to the farmers, if the Minister for Agriculture shows the courage. A point particularly about Vidarbha. The accentuating factor in Vidarbha, where a thousand farmers committed suicide in 2006 so far, has been the forcing of Vidarbha, for political reasons, into Maharashtra. This resulted in the imposition of the Cotton Monopoly Procurement Scheme which has resulted in a massive exploitation of the cotton-growing farmers in Vidarbha and in the diversion of irrigation funds from Vidarbha to Southern Maharashtra on the pretext that if water there is not saved, it will go to Karnataka or Andhra Pradesh. If the present government makes an announcement, (it is already talking about Telangana) that they will also give serious consideration to the separation of Vidarbha, that itself will be a good signal and will stop most of the farmers' suicides which are mainly due to indebtedness. I am glad that the Agriculture Minister's party has already given a sort of green signal to the idea of a separate Vidarbha, provided the people there support it. I hope, ultimately, it will result in the formation of a separate Vidarbha. From that day onwards, I am sure there will not be a single farmer suicide in Vidarbha. Prepare a Helpline network so that farmers, who feel desperate, can contact the competent official who should see them and find out what precisely are the problems that the family is facing and try to resolve them. Last but not the least, the government should stop paying compensation for people who commit suicide because that actually encourages suicides. People find that if the bereaved family is to get the money, then, it is worthwhile committing suicide so that, at least, the rest will live happily. In fact, there are doubts that, at least, in some cases, old and invalid members of the family have not been dissuaded sufficiently energetically from committing suicide. This is a very dangerous precedent. If payment of lump sum compensation, results in encouraging suicide it is, in law, a crime. Giving them Rs. one lakh as compensation is bad in law, bad in public policy. And I hope the Minister for Agriculture will review the situation and take some positive steps that will put an immediate halt to suicides. [Extracts from Sharad Joshi's speech during the debate in the Rajya Sabha on 23 August 2005 on Farmers' Suicides. The piece was originally published [here](http://www.freedomfirst.in/uploads/issues/pdf/473.pdf).] --- ## [Musing] Socialism or State Capitalism URL: https://indianliberals.in/musings/socialism-or-state-capitalism/ ### Body _The musing shared below is a 1970 piece published by the Forum of Free Enterprise and authored by K Santhanam. In 1948, Santhanam was the Minister of State for Railways and Transport in the Government of India, followed by a stint as the Lieutenant Governor of Vindhya Pradesh. A prolific writer, Santhanam also served as the first editor of the Indian Express from 1932 until 1940, subsequently becoming the joint editor of the Hindustan Times. In 1962, Santhanam was appointed as the chairman of the Committee on Prevention of Corruption. The recommendations of this Committee, also known as the Santhanam Committee, resulted in the establishment of the Central Vigilance Commission in 1964._ _You can read the unabridged version with contributions from Dr R C Cooper and Prof. C L Gheevala here [Socialism or State Capitalism](https://indianliberals.in/wp-content/uploads/2023/06/Socialism-or-State-Capitalism.pdf)___ It is bad enough that India should be a hundred years behind advanced nations in industrial development. It is a much more serious handicap that intellectuals and politicians should be more out of date in their ideals. This is particularly true of capitalism and socialism, the nature of which has undergone a great change since Karl Marx expounded his theory. Both these concepts arose out of the industrial revolution. In the early stages, the main characteristics of industrialisation were: 1) low wages based upon the ordinary wages of persons engaged in agriculture and cottage industries; (2) harsh conditions of labour, long hours, unhealthy and unsanitary conditions and no provision for sickness etc. (3) large surpluses due to the productivity of machinery in comparison with manual labour and cheap labour; and (4) appropriation of the surpluses by a small number of capitalists owning the new industries. Karl Marx put forward his doctrine of socialism, assuming that these were inescapable conditions of capitalist production. He argued that in order to prevent the exploitation of labour, ensure reasonable conditions for workers and utilise the surpluses produced by machine production for social welfare, it was necessary to socialise the means of production. He did not mean by socialisation State ownership or management of industry or commerce. In his essay, “Socialism, Utopian and Scientific”, Frederick Engels wrote, “The modern state, no matter what its form, is essentially a capitalist machine, the state of the capitalists, the ideal personification of the total national capital. The more it proceeds to the taking over of productive forces, the more it actually becomes the national capitalist, and the more citizens it exploits. The workers remain wage-earners-proletarians. The capitalist relation is not done away with. It is rather brought to a head." When the revolution took place in Russia, industrialisation had not proceeded far in that country, and such industrialisation as existed was controlled by foreign capitalists to a large extent. Therefore Lenin turned to State Capitalism as the only means of industrialising Russia.  Stalin wanted to make dictatorship absolute and totalitarian and, therefore, made State Capitalism the exclusive form of economic development in the USSR, and this has to a large extent, been followed by other communist countries of Eastern Europe. As a matter of fact, the capitalism of modern times is almost the opposite of that of the 19th century. The capital of big industrial undertakings is not owned by a few individuals and their families but by thousands of shareholders distributed over a wide area. They are managed by highly skilled and trained managers who almost dictate their terms to the Board of Directors. Far from being exploited, the workers in such undertakings are members of labour unions, which are recognised and regulated by law and are able to bargain with the management on equal terms. Not only are high wages provided, but the undertakings are obliged to provide proper conditions of health and sanitation, medical care, bonus, provident fund and other benefits which the 19th-century worker did not even dream of. Finally, a major part of the profits earned by the undertaking is taken away by the State in the form of taxation and utilised for providing social services like education, health, roads etc. In advanced countries, these undertakings have also contributed substantially to a comprehensive social security system available to all citizens. The company laws under which these organisations function are complicated and seek to ensure that they work largely in the spirit of public trust. In India, the remuneration of the Directors and their perquisites, limitation on investments of surplus profits and proper auditing and publication of accounts are all provided for. It is, therefore, a misnomer to call a public limited company as belonging to the Private Sector. It is private only in the sense that it is not a direct Government undertaking and has got its own Board of Management responsible to the shareholders. There are, of course, industrial and commercial undertakings managed by cooperative societies and individuals or partnerships. The latter is generally only medium and light industries where the capital requirement is not much. It should be carefully noted that modern industrial production is essentially capitalistic. It does not matter who owns the capital or manages the undertakings. The characteristics of accumulation of capital, expert management, satisfactory labour relations and elaborate accounting are all common characteristics. It is also generally agreed that competition is a necessary factor to enable these undertakings to function responsibly and in the public interest, and monopolies should be prevented and, where it is not possible to do so, should be strictly regulated. From the beginning, the Planning Commission in India has made the mistake of confusing State Capitalism with socialism. There may be some scope and even necessity for State Capitalism in India. Railways, Posts and telegraphs, Irrigation, Roads, Forts and other services which constitute the indispensable infrastructure of the modem economy can best be developed as State enterprises, mainly because private capital will not flow into them, especially in undeveloped countries. But it is a great mistake to think that these undertakings managed by the State serve the people in some unique way which cannot be claimed for corporate, cooperative or individual capitalism. As a matter of fact, State Capitalism suffers from three special disadvantages, which makes it less beneficial to the interest of the people than the other forms of capitalism. It tends to become a monopoly as it finds it difficult to compete with the more efficiently and economically managed undertakings of the same kind run by corporate or other forms of capitalism. State Capitalism also suffers from bureaucratic management and complicated official procedure. Thirdly, its management is liable to be interfered with by politicians in power and their party henchmen. It is also not true that labour gets a better deal in State Capitalism. Wages and conditions of labour benefit in proportion to the economy and efficiency of the undertaking, and as State Capitalism is generally wasteful and inefficient, its capacity to pay the workers is proportionately less. In the case of disputes between the management and labour in a non-State undertaking, the Government can come in as an impartial conciliator and arbitrator. Still, where there is a dispute in a Government undertaking, all the official influence is bound to be on the side of the management and against the labour. In the rather unstable political conditions of India, workers in State undertakings may be able to bully the management through threats of strikes and go-slow methods. Still, no sooner than the Central and State Governments become strong and well-established, then their first task will be to ensure labour discipline through banning or severe restriction of the right to strikes and participation in absenteeism and go-slow methods. It is the only way by which state undertakings can show even moderate results and escape incurring unbearable losses. The record of the Public Sector in India during the last 20 years has not been such as to justify their expansion. The myth has been propagated that the State should control the commanding heights of the economy as the necessary means to socialism in India. State Capitalism tends to expand its activities without limit till it monopolises all economic activities. The more inefficient and unprofitable it is, the greater its hunger for expansion. The Government of India has recently decided to set up a Government undertaking for the manufacture of a small car, for establishing a scooter unit and for taking over the cotton trade, both imports and exports. Pressure has been exercised on the U.P. Government to take over the sugar industry in the State. It is to be noted that none of these projects has been recommended by the Planning Commission or included in the Fourth Plan, nor can it be contended that any of these three is necessary for promoting the welfare of the masses or for the reduction of economic inequalities or for purposes remotely connected with true socialism. The concentration of economic power under the influence of the State has become an obsession. In communist countries, the evils of inefficiency and unprofitability of State Capitalism are sought to be mitigated through the banning of strikes and forcible disciplining of labour on the one hand and judging management by performance accompanied by stern punishment to those who cannot deliver the goods. Even with all these, not only Yugoslavia but also other communist countries like Romania and Hungary are seeking to find a way out of rigid State Capitalism without reverting to ordinary capitalism. They are experimenting with the idea of autonomous and competitive industrial and financial undertakings. In India, State Capitalism suffers not only from the inefficiency and inability of bureaucratic management but also intransigence and indiscipline of workers. The costly Durgapur Steel plant and its allied industrial complex are paralysed. Owing to the sudden illegal strike in Ashoka Hotel, an official lunch in honour of the visiting Japanese Foreign Minister had to be transferred at the last moment to another hotel. In the case of private undertakings like the Standard Motors of Madras, they have the remedy of closure on account of labour trouble. Big Government undertakings cannot close without incurring intense popular displeasure. In these circumstances, it is sheer madness and irresponsibility for the Government of India to seek to enter new fields which are not of essential importance. It would be strange if those who are shaping the industrial policy of the Government of India were not aware that motor cars, scooters etc., are not considered to be important in communist countries. Only a small number of persons are allowed to possess them for functional purposes. It is indeed strange socialism that the major concern of our government should be to increase the differences between the upper and lower middle classes, which can be the only result of the production of large numbers of small cars and scooters in the Public Sector. While cotton is produced by individual farmers and is finally used by the textile mills, which are in the non-Government sector, is it not altogether foolish that the Government should intervene in the middle stage? It is natural that the State Government in India also should wish to imitate the Centre in extending its own share of State Capitalism. Successive Finance Commissions have found that the States are not able to run their transport and electricity undertakings without incurring losses. If they are allowed to take up commercial undertakings like the Standard Motors or Sugar factories, the finances of State Governments are bound to deteriorate further, with a consequent increase in bitterness in the relations between the Centre and the States. Socialism is essentially a doctrine relating to the equitable distribution of national work and income. Its principal objectives are (i) full employment on living wages, (ii) progressive development of social services free for all members of the community, and (iii) a comprehensive system of social security ensuring the development of children and generous protection for the old and the unfortunate victims of sickness, accident or other misfortune. Developing on these ideas, the Scandinavian and other countries of Western Europe, including the UK, have developed a modem and highly beneficial conception of socialism which deserves to be understood and accepted by Indian politicians and economic thinkers. It is now conceded that one of the major objectives of socialism is full employment on living wages. This is perhaps the most difficult as well as the most important objective to be aimed at in this country. On the one hand, scientific and mechanised agriculture is likely to displace agricultural labour. On the other, the adoption of the most modern equipment and management, including computerisation in our factories, is likely to render a certain fraction of labour unemployed. Ultimately, when our economy is fully modernised and highly productive, the expanding needs of social services and social security may be expected to absorb a large number of our educated youth. Still, the transitional problems are bound to exist for some decades, if not for a century, and are so difficult and complicated that they require endless patience, farsightedness and human sympathy. It is in this context that the claims of large-scale industries, small-scale industries and cottage industries have to be equitably adjusted. Such adjustment has necessarily to be flexible and capable of readjustment after a period of 10 or 15 years. It is a matter of surprise that while, on the one hand, the Planning Commission and the Government of India are anxious to promote small-scale industries to provide employment for the technicians coming out of our higher technological institutions and polytechnics, large rice mills and bakeries should be established in various parts of the country. It may be admitted that modem rice mills and bakeries have advantages from the point of view of the consumer. Still, it cannot be claimed that without these, there would be any serious inconvenience. It is necessary to sort out what products can be economically produced in cottage industries, small-scale industries using power, medium industries and large-scale industries. There should be no rigid schedule for coding any product to any of these classes. Still, taxation, particularly customs duties on raw materials, export duties, import duties and sales taxes, should be so adjusted that where there can be no competition, cottage industries may get a preference of about 20 per cent over small-scale industries and the latter, the same amount over medium and large scale industries. In order to provide full employment, develop social services and provide social security, it is necessary that all material production by whatever agency should produce a surplus after wages, depreciation and interest on capital are met. Efficient means should be evolved through taxation to appropriate these surpluses for the development of social services and social security. It is a great pity that too much concentration on inefficient and unprofitable State Capitalism has prevented the Government of India from making even the beginning of a social security system, which is particularly essential for the poorer sections of the population in rural and urban areas. Any economic system in which the socialistic objectives mentioned above are achieved satisfactorily will have automatically reduced the range of inequality between incomes. The people are not generally told that this range is less in many of the modern so-called capitalist countries of Western Europe and even in Japan and the USA than in communist countries or undeveloped countries like India, which profess socialism. The reason is evident. When all persons are employed, and productivity is high, the lowest wages tend to be high. On the other hand, where productivity is low, and production is inefficient, the lowest-level worker is paid low wages. At the same time, the technicians and managing staff have to be paid comparatively high salaries in order to induce them to use their talents to the utmost. While in most advanced countries, the general range between the highest and the lowest income is of the order of 10 to 1, in India, it is 1 to 40. It may be true that in the USA, Japan and other advanced countries, there may be a few individuals who derive very large incomes. Still, under progressive income and wealth tax, a very large part of their income is appropriated by the State. Socialism is often claimed to aim at a classless society where there is no distinction between the classes and the masses. But when we look at the structure of the so-called communist States, which claim to be based on the teachings of Karl Marx, we find that the classes in those countries are as sharply distinguished from the masses as in the capitalist countries. The leaders and officials of the Communist party, the management personnel of their nationalised undertakings, and the academicians and professors of their universities occupy a higher status than even the upper classes in the non-socialist States. Even among the workers, the skilled, the semi-skilled and the unskilled form distinct sections. The only difference between the classes in the socialist and the capitalist society is that in the latter, there is a class based on ownership of property and receipt of unearned income. At the same time, in communist countries, they are replaced by party officials for whom the profession of communist ideology performs the same function as possession of the property in capitalist countries. Thus, the class structure is inherent in any social system, which is based on the division of labour and provision of inducements for the skilled and the unskilled labour and special facilities for highly complicated work such as scientific research, management of big industries and administering the big departments of modern government. The main thing is that these classes should not become rigid. There should be easy mobility from one class to another on the basis of skill and merit, and as I have stated already, the range of inequality should be strictly limited. In India, almost all politicians and thinkers demand an immediate and visible improvement of the condition of our peasant masses and urban proletariat, but this is no issue between capitalism and socialism, and those who cherish the illusion of eliminating poverty and squalor through State Capitalism miscalled socialism is only postponing the attainment of this legitimate objective. All those who are interested in the uplift of the masses should let the protagonists of all forms of capitalism, including State Capitalism, fight amongst themselves and arrive at whatever compromise they deem fit. The major issues for the masses in India, whether urban or rural, are employment, food, houses, health and education. Some efforts have been made under the plans to increase food production and promote health and education, but little has been done in the matter of housing. I would like any member of the Planning Commission or of the Government of India to stand up and say where and when the landless agricultural labourers and small peasants and slum dwellers of the cities and towns will be able to have houses which are fit for human living. I have no doubt that so long as these people live in miserable and unsanitary huts, as at present, neither education nor high wages will benefit them. If any of our leaders paused to think of the psychological, emotional and sanitary aspects of the problem of housing, they would have to admit that their indifference is almost criminal.  I think it is possible to have a housing programme by which the village panchayat and municipal corporations will undertake to build houses on a phased programme so that there will be no unsanitary huts and slums in our villages and towns. A similar concerted attack on unemployment is no less essential. It is almost a cynical contempt of our masses which permits the Central and State Ministers to talk airily of socialism when the number of unemployed in rural and urban areas is steadily increasing. It is foolish to contend that there is no work for the 20 or 30 million unemployed in this country. At the same time, West Germany and Japan, which were almost completely destroyed in the Second WorId War, not only provided full employment for their people but provided work for the unemployed of the neighbouring countries. State Capitalism cannot now or in the near future provide work for the unemployed. It is only through a wide decentralisation of economic initiative and active encouragement of all agencies of production and use of social services that the problem of unemployment and housing can be adequately tackled. India has still to make a beginning in social security which requires that our production be efficient and produce a surplus. I stand whole-heartedly for true socialism in India, which I equate with efficient production, full employment, generous social services and comprehensive social security. Every form of production which is consistent with these objectives should be actively encouraged, and every form which, through inherent inefficiency or psychological inadequacy, is likely to obstruct their achievement should be rejected as inconsistent with true socialism. _Previous musing: [Limits and Limitations of State Trading (1958)](https://indianliberals.in/content/limits-and-limitations-of-state-trading/)_ --- ## [Musing] Sikkim – Through Other Eyes URL: https://indianliberals.in/musings/sikkim-through-other-eyes/ ### Body "In 1975, before I had ever had any thought of visiting Sikkim, I followed the events leading up to annexation by India very closely because I could see no justification for the takeover, the abolishment of the sovereignty of the tiny nation of 300,000 people, the rude levelling of their Chogyal, whose dynasty was 340 years old, to the rank of a commoner, and the subsequent house arrest to which he was confined." _The anti-colonial genesis of Indian nationalism allowed the postcolonial Indian state to position itself as the promoter of the anti-colonial, anti-racist Third World solidarity agenda on International platforms. The most influential and eloquent proponents of this variant of Indian exceptionalism included Pandit Nehru, VK Krishna Menon, Indira Gandhi, KM Panikkar. Periodic paeans to India’s syncretic civilizational heritage and Gandhi’s principles of satyagraha and non-violence buttressed the Indian Foreign Policy rhetoric. However, the imperatives of survival often drove the postcolonial nation-state to pursue the hegemonic policy. Notable examples would include the tensions over Kashmir, Goa, Nagaland, Sikkim, and Punjab where the Indian state applied the prerogative of a sovereign in a manner that contradicted its claim to idealism. _ _Whatever the underlying motives of the Indian state, the civil society didn’t unequivocally support these actions. Some saw in the Indian deployment of force over its own population or in the neighbourhood the signs of imperial conduct. The most prominent anti-imperialists, not incidentally, were the veteran nationalists, lifelong fighters of India’s anti-colonial movement. The camp boasted the likes of Jayprakash Narayan, C Rajagopalachari, and Minoo Masani. _ _The triumvirate was unified in its advocacy for a peaceful solution to the Naga question and opposition to the detention of Sheikh Abdullah in Kashmir. JP offered to mediate between the Naga rebels and the Indian state. Rajaji led the delegation to President Kennedy advocating nuclear non-proliferation. Masani objected to the way Sikkim was made part of India and made his displeasure known in public in 1982. _ _In responding to a reader in the Freedom First magazine, Masani questioned the double standards of his compatriots on the ‘Indian imperialism’, dubbed JP the ‘real anti-imperialist’, and upheld the liberty of people in cases of Nagas, Kashmir, and Sikkim._ _Produced below is the article by Minoo Masani._ The other day I received a letter from a regular reader of Freedom First, who happens to be living in another Asian country. That letter contained, along with praise for Freedom First, a challenge which was posed in the following words: “l have now read twice the two lead articles in the January Freedom First, No, 348, Nissim Ezekiel’s brilliant editorial “Lies About Poland,” and “Betrayal of Poland” by Mr P. N. Irkbi. Both magnificent, forthright, dauntless, moving pieces of writing. I am glad-very glad indeed-that such ringing blows were struck for Poland, and my only wish, if I may be granted a wish, is that these valiant, intrepid warriors would bring their forces to bear in the cause of Sikkim, the tiny, defenceless kingdom that has vanished under the heel of imperialism, not Russian but Indian.” How are we in Freedom First who have stood for the freedom of all countries without exception to respond to this challenge? But first let me quote a few extracts from the letter I have received as they stem from deep conviction and anguish: “In 1975, before I had ever had any thought of visiting Sikkim, I followed the events leading up to annexation by India very closely because I could see no justification for the takeover, the abolishment of the sovereignty of the tiny nation of 300,000 people, the rude levelling of their Chogyal, whose dynasty was 340 years old, to the rank of a commoner, and the subsequent house arrest to which he was confined. I saw no reason whatsoever for India to resort to the same brand of imperialism that Nehru and others spent years in prison trying to fight, in their struggle to wrest India’s independence from Britain. And now, more than ever after having visited Sikkim three times, I see absolutely no reason for India’s presence there. “You have in this whole sordid story of political annexation of a sovereign state a perfect example of the double standard that has come to be popularly associated with India in the eyes of the world. Everyone from Mahatma Gandhi to Indira Gandhi loathes imperialism in any form, except of course where India herself can employ it with impunity on tiny neighbouring states.” A pretty angry indictment which I for one do not feel like contradicting. When Sikkim was taken over by India in the seventies, I felt quite disgusted. Not being in parliament then, I had no opportunity to voice my protest, but I was glad when Mr. Morarji Desai, Prime Minister of India some years later, admitted that he could not justify the taking over of Sikkim. Unfortunately, he did not feel strong enough to undo the mischief. Long before the occupation of Sikkim, I had noticed the double standards observed by most of our compatriots on the issue of imperialism. Whether it was in regard to our persecution of Sheikh Mohammed Abdullah or our Government’s activities in Nagaland there was only one prominent Indian who acted like a real anti-imperialist and that was my good friend Jayprakash Narayan. In regard to Kashmir, he formed the India-Pakistan Conciliation Group which still exists in New Delhi with Mrs. Malati Singh as convener. I readily joined that group. In so far as Nagaland is concerned, I supported JP’s efforts, which finally succeeded in bringing about a cease-fire between the Indian Army and the army of the Nagaland “Republic”. I was able, during my visit to Nagaland as a member of the Parliamentary delegation sent there by Prime Minister Lal Bahadur Shastri, to do my bit in helping Mr Shastri and his Government to bring about a better awareness in Parliament about the case of the Naga people. But, alas! the names of Indian public men who have stood up against the imperialism of their own country are few and far between. Most of us who have declaimed against British imperialism, French imperialism in Algeria, American imperialism in Latin America and Russian imperialism in Eastern Europe and Afghanistan are unable to apply the same yardstick to our own country. We can see the mote in the other man’s eye, but not the beam in our own. So we can say to our reader overseas: “You are right to be angry and we as a nation must, we feel, plead guilty to your charge, but all we can say is that we in Freedom First have never lowered our flag and that our record, whether on Kashmir or Nagaland, is one of which we have no reason to be ashamed. We thank you for having given us an opportunity to speak up for the people of Sikkim.” _The original text can be accessed _[_here_](http://www.freedomfirst.in/uploads/issues/pdf/352.pdf)_. _ [_IndianLiberals.in_](http://indianliberals.in/)_ is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context._ Read more: [SO Musings: The Retreat from Socialism](https://spontaneousorder.in/the-retreat-from-socialism/) --- ## [Musing] Soviet Dissidents, Detente and Liberty URL: https://indianliberals.in/musings/soviet-dissidents-detente-and-liberty/ ### Body The hub of the matter is that while Russia accepted an agenda for the Geneva talks which includes references to human rights and "better conditions for increased cultural and educational exchanges, for broader dissemination of information, for contacts between people, and for the solution of humanitarian problems," on the other hand it has insisted that co-operation should be "carried out on the basis of respect for the sovereignty, laws and customs of each country," a euphemism for its totalitarian system. _The global Cold War has been variously interpreted as the conflict between two Great Powers for global hegemony (John Mearsheimer) or conflict between two strong versions of nationalism (Jawaharlal Nehru). But, the most prevalent explanation of the Cold War pits it as a fight between two opposing universalistic ideologies- liberalism and communism. The presence of nuclear weapons and the threat of Mutually Assured Destruction (MAD) prevented direct military confrontation between the two powers. However, the proxy war which was in full swing included the promotion of competing visions of the arrangement of society. _ _The US and its Western allies saw themselves as the promoter of individualism, democracy, freedom of expression, consumerist prosperity, human rights, and free markets. Communist USSR saw itself as the defender of the oppressed against Western imperialism and capitalist exploitation by presenting an alternate model of planned economy and authoritarian polity, euphemistically called the dictatorship of the proletariat._ _The global extent of the Cold War competition meant India wasn’t to be left untouched. Indian public space engaged with the events in the wider field of the Cold War around the globe. Indian liberals here were no exception. For instance, in 1975, A G Noorani published his critique of Soviet communism in the form of a book review in the liberal journal Freedom First. Noorani’s review article focused on edited volumes of the writings of Nobel prize winners Andrei Sakharov and Aleksandr Solzhenitsyn, two of the most remarkable dissidents against Soviet Communism in the 1970s._ _Sakharov and Solzhenitsyn used their writings effectively to criticize the human rights violation by the USSR. Historian Thomas Borstelmann has argued that the revelation of the horrors of Soviet governance in the 1970s contributed significantly to the weakening of the Soviet empire.  Noorani’s review of the writings of the two courageous dissidents praised the good fight and made the case for the Western powers to put pressure on the USSR to accept human rights norms as part of the ongoing detente negotiations. The negotiations finally culminated in the Helsinki Accords of 1975. According to Thomas Borstelmann, the Accord provided a very powerful weapon to the dissidents within the Soviet regime and advanced the cause of human rights._ _Noorani’s book review, in this sense, was prescient in agreeing with the Western intellectuals who demanded the USSR’s acceptance of human rights as part of the ongoing negotiations during the Conference on Security and Co-operation in Europe in 1973. The review further focused on the need for intellectual freedom to uncover the arbitrary uses of state power. Noorani portrayed the dissident duos as examples of lovers of liberty the world over would forget only at their peril._ _Following the exhortation of Noorani, produced below is an excerpt from his book review._ In October 1973, more than twenty West European intellectuals signed and published a statement declaring that vital principles of intellectual freedom were in danger of being neglected at the Conference on Security and Co-operation in Europe which Russians were trying to hustle through. They said “We hope for growing political detente, but so far attempts to achieve this have in fact been accompanied by a worsening in the cultural situation both within the countries of Eastern Europe and in their relations with the West . . . Intellectual co-operation and mutual understanding will remain empty slogans unless minimum conditions of cultural freedom are observed in all countries concerned.” (The Times, London October 12, 1973). Among the signatories were men like Raymond Aron, Denis de Rougement, Gunter Grass, and Leopold Labedz. The hub of the matter is that while Russia accepted an agenda for the Geneva talks which includes references to human rights and “better conditions for increased cultural and educational exchanges, for broader dissemination of information, for contacts between people, and for the solution of humanitarian problems,” on the other hand it has insisted that co-operation should be “carried out on the basis of respect for the sovereignty, laws and customs of each country,” a euphemism for its totalitarian system. Is the quest for detente, then, reconcilable with support for individual liberty in Russia? No more authoritative opinion on this subject can be expressed than the one Dr Andrei Sakharov, the distinguished nuclear physicist and spokesman for Russia’s Human Rights Movement did in an interview he gave to Western correspondents at his Moscow flat on August 2I, 1973, “Detente without democratization, a rapprochement when the West in fact accepts our rules of the game in this process of rapprochement, such a rapprochement would be very dangerous in that respect, and wouldn’t solve any of the world’s problems, and would mean simply a capitulation to our real or exaggerated strength. lt would mean an attempt to trade, to get from us gas and oil, neglecting all other aspects of the problems. I think it’s very dangerous. “By liberating ourselves from problems we can’t solve ourselves, we could concentrate on accommodating strength, and as a result, the whole world would be disarmed and facing our uncontrollable bureaucratic apparatus. I think that detente without any qualifications, accepting our rules of the game, would be very bad. _The full text of the review can be accessed _[_here_](http://www.freedomfirst.in/uploads/issues/pdf/276.pdf)_.  _ [_IndianLiberals.in_](http://indianliberals.in/)_ is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context._ Read more: [SO Musings: Liberalism and Freedom](https://spontaneousorder.in/liberalism-and-freedom/) --- ## [Musing] STATE MONOPOLIES AND THE CITIZEN IN A DEMOCRACY URL: https://indianliberals.in/musings/state-monopolies-and-the-citizen-in-a-democracy/ ### Body _The following essay was published in August 1959 by the [Forum of Free Enterprise](https://indianliberals.in/content/state-monoplies-and-the-citizen-in-a-democracy-by-v-k-narasimhan-aug-7-1959/). Authored by V.K. Narasimhan, the essay provides a comprehensive understanding of how state monopolies impact the economy and citizens' rights in a democracy. _I propose to examine the question how far the promotion and maintenance of State Monopolies in the production of goods or the operation of services is compatible with the rights of citizens in a democracy to operate similar enterprises.  I was attracted to this subject in 1956 when by an ordinance the Life Insurance Companies in India were taken over by the Government and subsequently they were nationalised and a completely state-owned monopolistic Life Insurance Corporation was brought into existence. I shall discuss later the merits and demerits of the state operation of monopolies but what struck me most at the time was whether it was proper for the state to take over businesses which were well run and which, to all intents and purposes, satisfied the needs of the customers whom they served. It seemed to me that where a business was being run according to the law of the land and where apparently it was carrying on a perfectly legitimate and socially useful activity a democratic state had morally no right to take over such a business.  The question then intrigued me how there was no protest at all from any quarter against what seemed to be a palpable invasion of the right of the citizens in a democracy to come together and operate any kind of legitimate business or industrial activity. I then discovered that the power to extinguish the citizens' rights in this regard had been taken by an amendment to the Constitution in 1951. Probing further into this amendment, I discovered an astonishing failure on the part of democratic-minded public men to realise the danger implicit in this amendment and the need to correct the situation created by the amendment if we are not to let ourselves in for the complete regimentation of economic life in this country by the State.  To explain my point, I shall go in detail into the history of this constitutional provision. The wise makers of our Constitution provided in the Fundamental Rights clause of the Constitution a provision which declared :  Article 19(1)(g): All citizens shall have the right to practise any profession or to carry on any occupation, trade or business.  To this clause there was a proviso in Article 19(6) which stated: “Nothing in sub-clause (g) of the said clause shall affect the operation of any existing law in so far as it imposes, or prevent the State from making any law imposing, in the interests of the general public, reasonable restrictions on the exercise of the right conferred by the said sub-clause, and, in particular, nothing in the said sub-clause, shall affect the operation of any existing law in so far as it relates to, or prevent the State from making any law relating to, the professional or technical qualifications necessary for practising any profession or carrying on any occupation, trade or business."  This was the original provision. It conferred a right to carry on any profession, trade, occupation or business subject to reasonable restrictions in the interests of the general public and subject to the power of the State to fix professional or technical qualifications. Shortly after the Constitution came into force, the U.P. Government decided to take over the operation of certain bus services and in pursuance of this decision did not renew the licences of certain private bus operators after the expiry of licences. The Allahabad High Court held that the denial of licences on the ground that the State intended to take over the services was _ultra vires_ of the Motor Vehicles Act. In the course of the proceedings in this case, a distinction was sought to be made between the power to impose restrictions on the exercise of a right and the power of total exclusion from its exercise. To impose conditions in the public interest for operating any service or industry is one thing; to say that no citizen shall operate a particular service is entirely different.  That this judgment should have alarmed the Government, which had its own programme of nationalisation and extending the public sector, was understandable. To meet the situation created by the Allahabad judgment, an amendment was incorporated in the comprehensive Bill embodying the First Amendment to the Constitution which made a sweeping provision for the creation of State monopolies which potentially negatived the right given under Article 19(1)(g). This amendment added to the original proviso to Article 19(6) an additional clause, viz., "Nothing in the said sub-clause shall affect the operation of any existing law in so far as it relates to, or prevent the State from making any law relating to, the carrying on by the State or by a corporation owned and controlled by the State, of any trade, business, industry or service, whether to the exclusion, complete or partial, of citizens or otherwise." Judged by any test, this is an astonishing provision. It seems to me that this clause is of such a sweeping character that there is no business, trade, industry or service which the State cannot take over at any time if it so chose. The mischief of this provision is so far-reaching that unless this provision is repealed or a fresh constitutional safeguard is added to it, it looks as if no form of private enterprise, however innocuous and however legitimate it may be, is safe from the unholy hands of the State. As you all know, the "State", under the Constitution, may refer to any public authority from a Panchayat to Parliament and as the Constitution stands there is nothing to prevent, say, the Communist Government of Kerala from passing a law enabling panchayats in that State to operate all businesses and industries in their areas and thereby completely destroy any form of private enterprise.  I do not want to be alarmistic. Having seen how the power under the provision has been actually utilised in the past eight years for the incursion of the State into various forms of business from life insurance to the export of iron and manganese ore on a monopolistic basis, I feel that it would be extremely dangerous to let the amended constitutional provision remain unchallenged and unqualified.  It is a great pity that at the time this provision was being incorporated in the Constitution, public attention was so much diverted to other amendments and provisions of the Constitution (First Amendment) Bill-particularly the amendment relating to freedom of speech and expression-that little or no attention was paid to this far-reaching and, in my opinion, utterly anti-democratic provision of the amending Bill. Out of curiosity to see whether and how many members had cared to study the provision of the amending Bill and to draw the attention of Parliament to the mischief of this provision, I went through the Parliamentary debates on the Constitution (First Amendment) Bill and I was surprised to make two discoveries. The first was that except two gallant members who spoke on this particular provision and showed some realisation of its dangerous potentialities, few other members realised its implications. The second discovery was that an amendment to this provision moved by Mr. Shyam Nandan Sahaya with a view to providing some safeguard to citizens who may be adversely affected by an act of the State in excluding them from a business or trade was printed in the official records as having been adopted but which, to my surprise, I found had not been incorporated in the final Act. When I pursued this matter with the Speaker of the Lok Sabha I was told there was a misprint in the official proceedings and that where it was stated that Mr. Shyam Nandan Sahaya's amendment had been "adopted", it should read that it had been "negatived". It is extraordinary that on a vital matter like this there should have been such a major printer's error which had not been corrected in any subsequent issues of the official proceedings.  I mentioned earlier that only two members had referred to this clause during the debates on the Constitution Amendment Bill. One was Pandit Hridayanath Kunzru. Pandit Kunzru argued that contrary to the Law Minister's view that the Allahabad judgment necessitated the amendment to Article 19(6), there was no need for such an amendment at all on this particular ground. Pandit Kunzru went on to refer to the more serious implications of the amendment and stated:  "There is another point, too, that I should like the House to consider. For, though clause (6) of article 19 has not received the attention that it deserves in view of its importance, it relates to a very important matter. The amendment of the latter part of clause (6) provides for any restrictions that the State may place on trade, business, industry or service in order to carry it on itself or have it carried on by a corporation owned or controlled by it. These provisions do not really mean nationalisation so much as the creation of a State monopoly. Suppose Government starts a cotton textile mill of their own in Delhi and they issue an order to the Delhi Cloth Mill to cease working. I suppose such an order would, if the necessary legislation were passed, be valid. And, as the Government would not, merely by issuing the order, be acquiring a property, their action, I suppose, would not fall under article 31 of the Constitution. I should like to know from the Prime Minister what is the exact intention of the Government in respect of this matter. How do they propose to use the amendment to the latter part of clause (6) of article 19? I am sure the House will agree that if it is used in such a way as to give no compensation to people whose property is rendered valueless, then, although they might not come under the operation of Article 31, they would nevertheless be committing a grave injustice. I do not want that this amendment should be used to circumvent article 31 in respect of trade and industry in the same way as the proposed article 31A and 31B would be used in respect of agricultural estates. I hope that my hon. friend the Prime Minister would be able to throw light on this matter and to assure us that Government wants to do nothing contrary to the spirit of the Constitution and have no intention of setting at naught in an indirect way the provisions of Article 31 in respect of trade and industry."  There is nothing in the subsequent proceedings to suggest that the Prime Minister recognised the importance of this issue or cared to answer the points raised by Pandit Kunzru.  I now come to Mr. Shyam Nandan Sahaya's intervention in this affair. He moved an amendment to the effect:  "Provided, however, that where such exclusion results in the displacement of citizens or otherwise from pursuing their normal avocation, the State shall either take over their property affected by such exclusion or shall compensate them to the extent of their loss due to such displacement."  As I mentioned earlier, according to the official proceedings (column 9878 of Parliamentary Debates dated 1st June 1951) Mr. Shyam Nandan Sahaya's amendment is stated to have been adopted. Considering the sweeping character of the official amendment, I should have thought that the adoption of Mr. Sahaya's amendment was the barest minimum that Parliament could have thought of as a safeguard or protection for those citizens whose interests might be adversely affected by the creation of State monopolies. I am still unable to discover how this misprint occurred when the report scrupulously records how hundreds of other amendments to the official Bill were negatived. I shall leave it to members of Parliament and to interested persons to probe into this mystery and ascertain what really happened.  I may mention this connection that several other amendments to this provision were moved by other members which were all negatived. One of those amendments was a very salutary provision suggested by Prof. K.T. Shah that where a State-sponsored enterprise functions side by side with a private enterprise in the same field, no discrimination should be made by the State in the conditions for carrying on the trade or business in favour of the State enterprise. Dr. S.P. Mookerjee had suggested that a law passed under the amended Article 19(6) by any State Legislature shall be reserved for the consideration of the President.  The position today as a result of the Constitutional amendment of 1951 is this: The State has an unrestricted right to create monopolies in "any trade, business, trade or service." Where such monopolies are created, as in the case of the nationalisation of life insurance companies, by the taking over of existing enterprises compensation will no doubt be given to the owners of the businesses taken over. Under the amended Article 31 such compensation need not be necessarily adequate compensation for the full value of the assets taken over. But nationalisation is not the only means by which a new state monopoly can be brought into existence. As we have seen in the case of the State excluding private motor transport services from operating in certain areas and in the manner in which the State Trading Corporation has acquired a monopoly of the export or import trade in certain commodities, it is clear that by the mere process of refusing to renew licence or by specific legislation in this behalf, the State can extinguish private business in any field and bring a state monopoly into existence.  The question I am concerned with is not whether under the amended provision the State may do something absurd or not but whether it should have a power which is liable to abuse. In discussing this matter we must proceed on some fundamental assumptions. The democratic system, I take it, is based on the principle that the State exists for the citizens and that there are some fundamental rights which the Stale cannot infringe except under clearly laid down conditions. It is implicit in this concept that the citizens of a democratic state shall have the right, individually or in concert, to pursue any trade, business or industry so long as they do not work against the public interest or violate the laws of the land. Implicit in this right is the principle that whenever the citizen is excluded, partially or otherwise, from a business, trade or vocation, it shall be for reasons demonstrably in the public interest and also on demonstrable grounds that the State can serve the public interest better than the citizens concerned. From this it follows that there ought to be, in every case of the creation of a State enterprise or monopoly, a prior enquiry into the operation of private enterprise in the particular field and an opportunity given to citizens engaged in it whether or not they have served the public interest. There would be no case for the State stepping in unless it is proved that the private enterprise in question has failed to promote the public interest or that a public enterprise would promote public interests better than private enterprise.  In the case of the nationalisation of the life insurance companies, for instance, arguments in defence of nationalisation were advanced after the country had been presented with a _fait accompli_. Except for some articles in the "A.I.C.C. Economic Review,"-the author of which is no longer connected with the journal,-the country was given no indication that anything was seriously wrong with the Life Insurance Companies as a whole though as in every industry, public or private, there may be some black sheep. The nationalisation of life insurance came, in fact, after a year in which record business had been done by the insurance companies and it looked as if they were well set for further striking progress. No case was made out for setting up a monolithic corporation unknown in any other democratic country in the world. What justification could there be for nationalising companies which were well-managed and whose record was unimpeachable? Why should co-operative and mutual insurance societies which were well run and financially sound be nationalised? What canon of public interest or social justice demanded that no citizen or combination of citizens shall have anything to do with life insurance as a business? In other countries there are life insurance businesses run by private managements to which no State operated insurance concern can hold a candle. We were told that once the 200 odd competing companies were eliminated, there would be a great economy in operation and that life insurance premia would be reduced and insurance would be made accessible to the masses. I do not know whether the expenses of the Life Insurance Corporation are less than what the combined companies were spending before nationalisation. I agree that in strict theory there is a case for a monopolistic operation of social insurance because in insurance the larger the number of people over whom the risks are spread the cheaper the costs of insurance. But in the life insurance business which the Government took over, it was not merely a minimum social insurance for everybody that was involved, but life insurance of all kinds from policies running into lakhs of rupees to so-called _Janata_ policies. I cannot understand why a State wedded to a socialistic pattern, should care to insure anybody for very large sums in a State enterprise.  From the experience of the working of the Life Insurance Corporation in the past three years we can see most of the evils of a State monopoly in operation. The organisation tends to be bureaucratic. The absence of competition makes for complacency and indifference to the consumer at every level. The danger of misuse of large public funds passing through a single agency are enormously increased. Above all freedom of choice for the consumer and the employee, which are very real advantages under conditions in which there are a number of competing enterprises in a particular industry, is completely destroyed under a monopoly. What this means can be seen, for instance, in the opportunities for employment open to capable insurance organisers or actuaries under the L.I.C. as a sole employer. Anyone who is not satisfied with conditions of service in the Corporation has no option but to give up life insurance as a career altogether and turn to some other enterprise in which he cannot be equally interested or for which he cannot be equally qualified.  Another fundamental question which arises in connection with the starting of State monopolies is whether it is proper on the part of the State just because it feels that it can improve its financial resources, to take over any existing well-conducted private enterprise. Under the United States Constitution, State incursion into business is virtually impossible except under severely limited conditions. In India we may concede that the State has to play a more positive role and there is considerable room for public enterprise of various kinds to be started. Of course, where large investments are involved out of public funds, whatever the source from which they may be raised, there is constant need to see that the utmost economy is practised and to ensure that the public enterprises are run efficiently and economically. Subject to this essential safeguard, we may concede that there is room for extension of public enterprises.  But if we accept the democratic basis of our system and consider that the citizen has a fundamental right to pursue any legitimate business, trade, profession or industry, it must be laid down that no citizen shall be excluded from any business or industry he has built up except on grounds of overwhelming public interest. This implies that any citizen who may be adversely affected by the extension of the public sector shall have a right to see a judicial remedy, not only to prevent the State from excluding him from the business which he has been, carrying on, but also to seek compensation for any loss he might suffer as a result of such exclusion if the Court holds that the exclusion was justified in terms of the larger public interest but the citizen in question had suffered a loss thereby for no fault of his and, therefore, deserved to be compensated.  Senior Members of Parliament who were in the Constituent Assembly at the time when the First Amendment was being discussed have told me that when the amendment to Article 19(6) was included in the Bill they had imagined that it was only intended to cover cases of nationalisation like the taking over of bus transport and public utilities. They also told me that they never expected that this power would be utilized for extending State activity in fields like trading in ores. If State monopolies had been thought of in this limited sense, there would be some justification for the Constitutional amendment. Although all monopolies, whether public or private, lend themselves to abuse in one way or other and therefore have to be checked by some regulatory device, we know that in certain types of activity monopolistic operation is inherent in the nature of the service if economy and efficiency are to be ensured. Operation of a tramway or the distribution of electricity) in a particular area or the running of a telephone system, to give only a few examples, necessarily call for operation by a single agency. All over the world recognised methods have been evolved to see that such monopolistic operators are governed by regulations which ensure the public interest in regard to efficiency of operation and the rates charged to users. If State monopolies are limited to this category of public utilities there would be no serious grievance, provided the safeguards which consumers will have in the case of private monopolies are maintained even when they are operated by the State. The mischief of the amended Article 19(6) would have been considerably reduced if the scope of State monopolies had been limited to essential public services like transport, electric lighting, etc., and had not been omnivorously extended to cover "any trade, business, industry or service".  But for this omnibus provision it would have been inconceivable that persons in authority would have lightheartedly thought of creating State trading monopolies to handle foodgrains and other products. Public opinion must be vigorously educated to realise that whenever a monopoly is created, whether in the public or private field, there is an inherent and grave danger to the public interest. Even when the public interest demands that prices should be controlled by regulating movement and sale of goods, it is always wiser to keep, as far as possible, competing agencies in operation instead of eliminating them. Here is an example of how unthinking intervention by the State with the mechanism of trade and distribution can create incalculable hardship and misery. I quote from the report of the Gauhati correspondent of The Statesman on State Trading in foodgrains which "is running a chequered career in the Nowgong District of Assam." He wrote: "I made a sample study of the State trading operation round about Hojai, the district's rice bowl, and had discussions with people connected with and affected by State trading early this week … State trading had thrown out of gear the district's 30 rice mills, which for decades had been carrying on the procurement, storing, milling and distribution of food through the network of their organisation. Dealer's licences held by rice millers had been abruptly cancelled, and the millers' traditional machinery for procurement and distribution indirectly employing 4,000 personnel in the district, replaced overnight by those of the co-operatives”.  "This has given rise to new problems for the rice milling industry, which had not been forewarned about this changeover. As a result, the district's milling industry, having a stake of Rs. 1.54 crores in block and working capital and about 2,200 employees on the permanent payroll, is faced with the question, to be or not to be. In the present scheme of things the mills are not allowed to procure paddy by themselves. Secondly, there is no guarantee by the Government to keep the mills going by supplying paddy according to the capacity of each mill. Thirdly, milling charge per maund of paddy has been fixed at 75 nP. against the actual cost of Rs. 1.35 nP. as quoted by millers in Assam, and Rs. 1.50 nP. milling charge fixed by the West Bengal Government in North Bengal.  "What is most lacking is popular enthusiasm and co-operation, an essential pre-requisite of the scheme. On the contrary, an impression has got currency that the primary co-operatives are not real producers' co-operatives, and that these have been hastily drawn up more or less on the basis of existing Mandal Congress Committees with Mandal Congress presidents and secretaries as chairman of the co-operatives, thus indirectly lending a political colour to the whole scheme. Even Leftist political parties, who had once been the more steadfast supporters of State trading, are today among its bitterest critics."  This tragic story which has been more or less repeated in other parts of the country where similar rude intervention with the existing machinery of distribution has produced more or less similar consequences, should be a warning to the general public as to what is in store whenever a multiplicity of buying or selling agencies is replaced by a monopolistic agency. The growth of bureaucracy or corruption and a widespread black-market have been the inevitable results each time State intervention in trade has taken the form of substituting monopoly procurement and monopoly distribution for the channels of competitive private trade. Whatever may be the justification for such monopolistic controls during a grave emergency, like war or during a very severe food crisis, it would be an unmitigated disaster to envisage such monopolistic State trading as a normal appurtenance of peace time.  I should like to sum up my broad conclusions on the subject of State monopolies and the citizen as I follows:  - It is implicit in the basic conceptions of the democratic system that all citizens shall have the amplest freedom to engage in any form of economic activity that is not demonstrably against the public interest, without their being subject to threats actual or potential, of their exclusion from such activities by the intervention of the State. - There must be a more precise and narrowed definition of the area in which the State would be entitled to set up monopolies than is envisaged under the existing provisions of the Constitution. (It is significant that in Britain, where the Labour Party has long been an advocate of nationalisation, there has been in recent years a complete change in opinion in regard to the advantages of nationalisation and a radical change in attitude towards well-managed private enterprises. Not only is there no enthusiasm for renationalising the steel industry but there is a recognition that "under increasingly professional management, large firms are as a whole serving the nation well." The Labour Party now admits that no intervention by the State will take place "where any firm is doing a good job." Moreover, opinion in the Labour Party is veering to the view that where private Companies are "failing down" on their job, it is preferable to control them instead of nationalising them). - No State monopoly should be brought into existence without a prior enquiry into the operations of the private sector in that field and without a full opportunity being given to those engaged in that industry to vindicate themselves. - In no circumstance should an enterprise conducted by citizens on sound lines-except in the limited field of public utilities- be taken over by the State or be prevented from operation by the setting up of a State monopoly. (If such a safeguard had been in existence before 1956 some at least of the Life Insurance Companies which were nationalised could not have been taken over by the State). - When any particular existing enterprise suffers a loss as a result of the creation of a State monopoly there should be provision for compensation to the extent of such loss by the State. - In addition to purely Parliamentary bodies like the Public Accounts Committee or the Estimates Committee, which may periodically go into the working of State-run enterprises, there must be an impartial and quasi-Judicial body like the Tariff Commission in India, or the Monopolies Commission in England, to review the operations of State monopolistic enterprises to hear complaints from the public and from private concerns that may suffer in one way or other and to make recommendations for the better functioning of these enterprises to prevent abuses. _Last week's musing: [GLOBALISATION AND THE POOR](https://indianliberals.in/content/globalisation-and-the-poor-2/)_ --- ## [Musing] Swatantra Liberals and Indian Foreign Policy URL: https://indianliberals.in/musings/swatantra-liberals-and-indian-foreign-policy/ ### Body On November 15, 1965, Minoo Masani gave a speech in the Parliament outlining his vision of foreign policy for India. After diagnosing the failure of the government on matters connected to India’s external relations, Masani came up with his own agenda. The measures proposed included the formation of a regional security alliance, support to Tibet and Taiwan, diplomatic relations with Israel, normal relations with Pakistan in order to focus on the biggest threat and acceptance of help from both the US and USSR. _In the everyday politics of the chaotic democracy that India is, foreign policy issues figure down the priority list except when it comes to matters of Pakistan-sponsored terrorism and the Kashmir dispute. _ _The recent border impasse with China, however, has brought foreign policy and strategic analysis to the forefront. It is likely that the current crisis would lead to a change in the direction of Indian foreign policy. The shibboleth of Indian foreign policymakers has been the mantra of ‘strategic autonomy’, which might as well be a repackaged version of Non-Alignment. _ _As the balance of power is clearly skewed in favour of China, some analysts have argued for a closer alignment with the US to balance against China. The proposal also includes sustained cooperation with middle powers in the Indo-Pacific region like Japan, Australia, Indonesia, among others, which goes against the grain of strategic autonomy._ _As the debate over contours of foreign policy continues, produced below is an excerpt advocating revision in the then well-known Indian external affairs strategy of Non-Alignment. On November 15, 1965, Minoo Masani gave a speech in the Parliament outlining his vision of foreign policy for India. After diagnosing the failure of the government on matters connected to India’s external relations, Masani came up with his own agenda. The measures proposed included the formation of a regional security alliance, support to Tibet and Taiwan, diplomatic relations with Israel, normal relations with Pakistan in order to focus on the biggest threat and acceptance of help from both the US and USSR._ Mr. Speaker, Sir, I rise to support our (the Swatantra Party’s) alternative motion which says: “The House … is of opinion that, in the face of the combined hostility of Communist China and Pakistan, the country needs a radical revision in its foreign policy, the discarding of dogma and the adoption of realistic diplomacy involving, inter alia, (a) measures for building a system of regional collective security for all countries between India, Japan and Australasia; (b) forthright support for the defence of South Vietnam and Malaysia against aggression; (c) steps towards the liberation of Tibet and the recognition of the Dalai Lama as the head of a Free Tibetan Government; and (d) the establishment of diplomatic relations with the Republic of China and Israel.” Sir, on an occasion like this, we in this House speak from a sense of heightened responsibility, both because what we say may have implications for our national interests which we must bear in mind, and at the same time, because we are anxious that the advantage that this country possesses over its opponents in Pakistan and China, of being a Democracy in a crisis, where free discussion, free criticism and free opposition prevail, that advantage this country should not lightly throw away. As the Foreign Minister has said, this country has gone through a tremendous experience. We cannot do otherwise than to start with paying our tribute to the gallantry of our Armed Forces; we have had the unfortunate memories of 1962 thus wiped out, and the prestige and pride of our armed forces, which they had over centuries, have been re-established. Let us hope that there will be no tinkering or tampering with the morale of our forces, which has thus been re-established. The Foreign Minister was also right in paying a tribute to our people for rallying to the defence of the country, for the unity of purpose that they showed and for the communal harmony that was maintained throughout. **Unwarranted Complacency** But I wish I could share the smug complacency with which he referred to the successes of our diplomacy and our foreign policy. These recent events have also some very hard lessons to teach us. The hardest of them was that, in the face of that crisis, India was isolated. I do not say that we did not have friends. But in our own corner, in our fight with Pakistan, except for Malaysia and Singapore, there was nobody. Let us not try to forget this fact of isolation; it is pretty bad. In the General Assembly of the UN, at the end of the debate, the Press Trust of India made an analysis of the trends in regard to our dispute with Pakistan. I am quoting from the Hindustan Times of 23rd October: According to the PTI, the spokesmen of 63 nations were neutral and did not go beyond appealing for peace, 19 were hostile to India and, of these 19, 11 were members of the Arab League. 3 made passing references but did not say anything. 25 ignored the issue. Out of 110, not one spoke up for us. This is something that cannot be side-tracked by recording satisfaction at our success in the Security Council. This has left our people bewildered; it has left some of our people rather angry. It is no good flying into a rage when nobody else can see our point of view. It reminds me of the story of the fond mother who went to see a military parade. At the end of the parade, her comment was, “Everybody was out of step except my Johnny”. That was her son! We cannot afford to be Johnny. We are living in a world community, where we must be in step with decent, democratic nations, whose friendship we regard. We cannot resign from the Human Race and turn our back on humanity. In a way, let us console ourselves that, since imitation is the sincerest form of flattery, other nations have copied us and remained non-aligned in our dispute. We have so many times taken the stand that we will not judge what is right or wrong over the last 15 years. We should take sportingly the fact that other countries are now giving back to us a little of our own medicine! The important thing is: why did this happen and how do we prevent a recurrence of this isolation? That, surely, should be the purpose of this debate. Let us look at the facts in the face. Was it only bad public relations, as some of our colleagues allege? Was it the fault of our diplomats? Let me say, in all fairness to our diplomatic service and publicity, that it was not a failure of public relations or diplomacy. I have been a practitioner of public relations. You cannot sell a product if the product cannot be sold. The first thing in public relations is to have a good product which can be sold. Then only can you advertise it and sell it. It is no good blaming our diplomats and ambassadors. The fault lay deeper. It lay in our foreign policy. We did not give them a product they could successfully sell in the councils of the world. _The full text of the article can be accessed [here](http://indianliberals.in/~_admin/pdflanguage?id=590973500.pdf)_. _[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context._ Read more: [Venkataraman Sundaram-Scholar, Economist and Civil Servant (1942-2014)](https://spontaneousorder.in/venkataraman-sundaram-scholar-economist-and-civil-servant-1942-2014/) --- ## [Musing] Statement of the Principles of Swatantra Party URL: https://indianliberals.in/musings/statement-of-principles-of-swatantra-party/ ### Body The Statement of the Principles of the Swatantra Party was adopted at the Preparatory Convention held at Bombay on August l and 2, 1959. The 21 principles which were adopted laid the ground for a liberal and market-oriented approach to politics in India. The Swatantra Party was the first political party to openly endorse free enterprise and liberal values in India.1. The Swatantra Party is pledged to Social Justice and equality of opportunity for all people without distinction of religion, caste, occupation, or political affiliation. 2. The Party holds that the progress, welfare, and happiness of the people depend on individual initiative, enterprise, and energy. The Party stands for the principle of maximum freedom for the individual and minimum interference by the State, consistent with the obligation to prevent and punish anti-social activities, to protect the weaker elements of society, and to create the conditions in which individual initiative will thrive and be fruitful. The Party is, therefore opposed to increasing State interference of the kind now being pursued. 3. The Party holds that the State should foster and utilise the sense of moral obligation, the pride, satisfaction, and fulfilment felt by individuals in serving others, which are inherent in our tradition, instead of adopting legislative or other forms of compulsion which commence with want of faith in the people and are consummated in the serfdom of the governed under the official machine, in an omnipotent State controlled by a political party voted to power. The Party, therefore, adheres to the principle of Trusteeship adumbrated by Gandhiji. 4. The Party holds that the policies of Government should be founded on faith in the people and not on State compulsion and the encouragement of hatred and conflict between class and class, expropriation, repudiation of obligations, and the conferment of more and more powers on the officials of Government at the expense of the freedom of the citizens. 5. The Party stands for every effort being made to foster and maintain spiritual values and preserve what is good in our culture and tradition, and avoid the dominance of a purely materialist philosophy of life which thinks only ·in terms of the standard of life without any reference to its content or quality. 6. The Party holds that steps should be taken to remove the pervading sense of uncertainty that has been created by the present policies of the Government and its varying forecasts of future plans, leading to the drying up of initiative and enterprise in land, shop and factory alike. The Party holds that a sense of stability and incentive for individual effort can be restored only by strict adherence to the Fundamental Rights and Guarantees specified in the Constitution as originally adopted in respect of freedom of property, trade and occupation, and just compensation for any property compulsorily acquired by the State for public purposes. 7. The Party holds that in the policies adopted for national development, priority must be assigned to the basic needs of the people, namely, food, water, housing, and clothing. 8. The Party believes that every citizen has a fundamental right to educate his children according to his choice and in a free atmosphere untrammelled by official directives and that the State should afford facilities for such education without discrimination. 9. The Party holds that the paramount need is for increasing food production and that this is best attained through the self-employed peasant-proprietor who is interested in obtaining the highest yield from his land. The Party believes in an intensive programme of agricultural improvement by promoting the material and psychological inducements for greater production without disturbing the harmony of rural life. The Party holds that there should be no disturbance of ownership, management, and cultivation of land, but believes in a more effective programme than is being followed at present in respect of irrigation, and the supply of material, implements, credit and marketing facilities. The Party believes in the need for giving every kind of help to agriculture, but is opposed to cultivation through organisations which reduce private ownership to an empty paper-title and which bring into being a loose kind of multiple ownership which is certain to sap the incentive of the farmer and his family, reduce output, and take us to a collective economy with official management. It is firmly opposed to collectivisation and bureaucratic management of the rural economy. The Party takes note of the dissatisfaction amongst the rural population that adequate attention has not been paid to their needs. It holds that the level of life of the rural people Should be improved by removing all such impediments as are likely to stand in the way of their attaining a high standard of life and by taking all steps necessary for the purpose, in particular for maintaining a reasonable and steady price for agricultural produce, which is in parity with other prices. 10. In industry, the Party believes in the incentives for higher production and expansion inherent in competitive enterprise, with adequate safeguards for the protection of labour and against unreasonable profits, prices and dividends, where there is no competition or where competition does not secure the necessary corrective. The Party stands for the restriction of State enterprise to heavy industries such as are necessary to supplement private enterprise in that field, such national services as Railways, and the starting of new enterprises which are difficult for private initiative. The Party is opposed to the State entering the field of trade and disturbing free distribution, and introducing controls and official management with all its wastefulness and inefficiency. The Party believes that in the field of production, the free choice of the producer and the consumer must be given basic place and importance. 11. The Party stands for the preservation of the freedom of the small and self-employed artisans, craftsmen, and traders, who are in danger of losing their occupational opportunities, by reason of the policy of Statism. These persons perform a great, widespread, and inexpensive function in our society, and their gradual extinction will be a national misfortune and add to our unemployment problem. 12. The Party stands for greater thrift in public expenditure, It holds that taxation should be kept at such levels as will not interfere with reasonable living standards for the people, both rural and urban, and which, while being necessary and sufficient for the carrying on of administration and such social and economic services as are taken up by the State, is yet not so high and exacting or so ubiquitous as to prevent capital formation and private investment.. 13. The Party is opposed to a programme of development based on crippling taxation, abnormal deficit financing, and foreign loans which are beyond the capacity of the country to repay. 14. The Party is opposed to all policies that lead to excessive inflation, high prices that reduce the value of savings, endowments, and fixed incomes, and which create undue hardship for the present generation in the hope of a distant gain. 15. The Party believes that the cost of Public Administration should be reduced considerably. It stands for integrity and efficiency in the services. It is against the expansion of the bureaucratic machine, with a hierarchy of officials asked to do work which is best done by citizens and private agencies, resulting in unproductive waste of national resources. 16. The Party believes that the State will best serve the nation by encouraging and affording facilities for a decentralised distribution of industry and by limiting its own regulatory function to the prevention and punishment of antisocial activities wherever called for. 17. The Party stands for the creation of opportunities for full and lasting employment in all sectors of life. It stands for a programme of all-round industrialisation with a view to developing national resources and reducing unemployment. It believes in a balanced development of capital-goods industries, organised consumer goods industries, and rural industries that afford supplementary employment in the small-scale processing of the products of agriculture. 18. The Party stands for a fair deal for labour, whether in the field, factory or office and for correlating wages to increased productivity and for the workers’ right to organise for the purpose of collective bargaining. It stands for harmonising the interests. of capital and labour when they get into conflict. 19. The Party is opposed to any form of political pressure being put on officials to deflect them from the course of fair and just discharge of duties without discrimination. It stands for the rule of law, an independent judiciary, and for the full play of the powers of judicial review given to the Courts by the Constitution. 20. The Party shall, in all matters, keep before itself the cardinal teachings of Gandhiji, maintaining faith in the people and in the efficacy of truth and non-violence. 21. The Swatantra · Party holds that democracy is best served if every political Party allows freedom of opinion to its members on all matters outside the Fundamental Principles of the Party. It, therefore, gives its members, full liberty on all questions not falling within the scope of the Principles stated above. --- ## [Musing] Swatantra Party: 64th Foundation Year URL: https://indianliberals.in/musings/swatantra-party-foundation-year/ ### Body _To commemorate the 64th Foundation Year of the first and the only Liberal political party in India, we share the following musing published by the Swatantra Party. "Why Swatantra" is a conjoined effort of C Rajagopalachari, N G Ranga, K M Munshi and Minoo Masani as they analyse with incisive logic the need for a new party and explain with great clarity the party’s fundamental philosophy and programmes. Why Swantantra? They answer: To Save Freedom (Rajagopalachari), To Preserve the Family Economy (N G Ranga), To Restore Fundamental Rights (K M Munshi) and To Provide a Democratic Alternative (Masani)._ You can read the complete musing here: [Why Swatantra](https://indianliberals.in/wp-content/uploads/2023/06/Why-Swatantra.pdf) **C Rajagopalachari - To Save Freedom** The Swatantra Party stands for the protection of the individual citizen against the increasing trespasses of the State. it is an answer to the challenge of the so-called Socialism of the Indian Congress Party. It is founded on the conviction that social justice and welfare can be attained through the fostering of individual enterprise in all fields better than through State ownership and Government control. It is based on the truth that bureaucratic management leads to loss of incentives and waste of resources. When the State trespasses beyond what is legitimately within its province, it just hands over the management from those who are interested in frugal and efficient management to bureaucracy which is ingrained and uninterested except in its own survival. The Swatantra Party is founded on the claim that individual citizens should be free to hold their property and carry on their professions freely and through binding mutual agreements among themselves and that the State should assist and encourage in every possible way the individual in this freedom, but not seek to replace him. The new party seeks to oppose the trend of the ruling Congress Party to adopt the ways and ideals of the Communists in its eagerness to prevent the Communists from going forward. The Swatantra Party believes that going over to the enemy is not a defence but a surrender. The Swatantra Party apart from the ideology here explained, hopes to furnish a real opposition to the Congress Party so that parliamentary democracy may be properly balanced. The absence of true opposition has led to the rapid deterioration of democracy into a kind of totalitarianism. Voices have been heard from all quarters calling for a strong opposition and the new party is supplying a felt want. This party of freedom is further making a novel experiment in restricting disciplinary control over party members to essential issues, giving freedom in all other matters to vote according to individual opinion. This is not a mere strategy to "net in" discordant miscellaneous elements as at first might appear. It is really an answer to the constantly expressed sense of dissatisfaction with party rigidity and to the complaint that it often amounts to suppression of opinion and rule by a minority in the name of a majority. A majority in the ruling caucus can always, under present conditions, impose their views on all and every issue in the Parliament of the nation. The Swatantra Party intends to initiate a departure from the usual practice of political parties and, true to its name, give _Swatantra_ or freedom to its members to vote according to their own convictions and conscience on all but the party's fundamentals so that the decisions of Parliament may on those issues truly reflect the prevailing opinion, and not be just a replica of the majority opinion of the ruling party or the fads of the ruling clique. Without the inconveniences resulting from proportional representation and, in particular, the instability of governments formed under such a system, the reduction of voting in accordance with whips to the barest minimum, as proposed by the Swatantra Party would be a healthy example for all parties. If followed generally or even by the more important ones among the various parties, the freedom given to members on all but essential issues would result in government more in accordance with the ideals of those who conceived the system of proportional representation and laid high hopes hereon. In this matter, the new party may claim to have initiated a great democratic advance worthy of trial in all countries really believing in democracy and not willing to be subjected to a form of dictatorship in the name of party discipline which often serves only th ambition of individuals or groups. The new party does not believe that legislative compulsion, any more than the violence that preceded and enthroned Communism in certain countries, can contribute to true or lasting human happiness. We must depend on the moral sense of the people in order to equalise without destroying freedom. It may be that there are a large number of people in our ancient land who have now lost the capacity to respond to moral appeals and who are impervious to the call of _dharma_. There have been causes that have brought about this state of things. But this large number of bad and successful men of the world should not blind us to the fact that in the large mass, _dharma_ still rules and supports our society. The millions that make up our nation are still moved and guided by their sense of _dharma_ and the voice of their conscience. If the cynics who deny this were right, our society would have broken down long ago and perished. We should have been hearing of starvation deaths in thousands every day. If we take a survey of the numerous charitable foundations and trusts that work as a matter of routine in the country and which were born of a sense of _dharma _without any kind of State compulsion, we can cure our cynicism with irrefutable and abundant facts. The charitable motives and compulsions of the heart prevailed in the days when these trusts and charitable institutions were founded and can prevail today, for we are the same people after all. "There is no need for charity when there is an obligation; let the State compel." This is the slogan of the Socialists. But it is forgotten that this will lead irresistibly to total serfdom. The cynics are not right. Our society is still maintained by the inner law. The outer laws can touch but the fringe of life. They deal with criminals and keep order going. Normal life does not depend on the laws. It depends on the moral consciousness of people. This moral sense has not been effaced whatever changes may have taken place in the rituals and observances of forms. It is by _dharma_ that society is sustained, _Lokah dhriyate._ It is on _dharma_ we must build and not on the sand of material motives and our capacity to satisfy them quickly and get votes to be in power. The good seed is not lost. It is still there. We must not ignore its availability. The soil also is good and God will send us the rains. Let us not fail to look after it. _Previous musing: [Rajkumari Amrit Kaur: Philanthropy and Politics](https://indianliberals.in/content/rajkumari-amrit-kaur-philanthropy-and-politics/)_ type=content&p=8107). Needs editorial review._ --- ## [Musing] Tagore's Humanistic Approach To Indian Nationalism URL: https://indianliberals.in/musings/tagore-s-humanistic-approach-to-nationalism-a-ranganathao/ ### Body _Produced below is an excerpt from an article by A. Ranganathan called "Tagore's Humanistic Approach to Indian Nationalism," where the author explores Rabindranath Tagore's unique perspective on Indian nationalism. The article delves into how Tagore distinguished Indian nationalism from European forms, emphasized the importance of cultural exchange with the West, and believed that true freedom extended beyond political independence into the realm of the mind and spirit._ In order to appreciate the significance of Tagore's most precious gifts to our country, it is necessary to view the backdrop of the 'Indian Renaissance' in its historic setting. The transition from medieval to modern India, which resulted in that great cultural awakening known as the 'Indian Renaissance', was effected by Raja Ram Mohan Roy. Indeed, the day of Raja Ram Mohan Roy's birth was also the birthday of modern India. A new spirit was abroad, a new buoyancy of life symbolizing the streaks of a rosy dawn after the long medieval night which had enveloped India for centuries. The various forces which have contributed to the shaping of modern India originated in the mind of Raja Ram Mohan Roy. And Tagore not only constituted a historic link in the long chain of India's cultural evolution, but was also the prophet of the Indian Renaissance heralded by Raja Ram Mohan Roy. Tagore had drawn the vital distinction between the Western Nation and the spirit of the West in his celebrated lectures on "Nationalism": "This reign of law in our present government in India (the British Government) has established order in this vast land inhabited by peoples different in their races and customs. It has made it possible for these peoples to come into closer touch with one another and cultivate a common aspiration." Indian nationalism was an aspect of the 'Indian Renaissance' movement. It is well to remember, however, that the nature of Indian nationalism, although influenced by European nationalism, is entirely different from European nationalism. Indian nationalism succeeded in welding the political unity of India, whereas European nationalism split up Europe into several nations based on ethnic considerations. If Swami Vivekananda could be regarded as the prophet of Indian nationalism in its philosophical (Vedantic) context, Dr. Ananda Coomaraswamy, who had spent much of his career at the Boston Museum, can be looked upon as the most articulate exponent of the aesthetic philosophy of Indian nationalism. And Tagore's approach to Indian nationalism differed from that of his distinguished contemporaries, who had merely Indianized the concept of Mazzinian nationalism. Tagore's greatness lies in the fact that he infused the spirit of poetry into the Indian national movement. In the final analysis, Tagore had universalized the concept of freedom. 'Swaraj', as Tagore interpreted it, was not a mere political actuality. It was a process which extended the frontiers of the mind. He was certainly opposed to the continuance of British rule in India. However, even in the heat of political controversies, he never lost his sense of perspective. In fact, he had relinquished his knighthood in the wake of the Amritsar tragedy of 1919. And our National Anthem was one of his greatest contributions to Indian nationalism. Like Raja Ram Mohan Roy, Tagore knew the value of English and could foresee its impact on Indian cultural life. Tagore, who was profoundly influenced by Keats and Shelley, had felt that the impact of the English language on the mind of the Indian nation did not generate a process of cultural enslavement, but was the harbinger of a new era of creative consciousness. Western literary forms like the essay and the novel which became assimilated into the mainstream of our languages, and the brilliant contributions to modern science by some of our scientists, are some of the outstanding features of the 'Indian Renaissance'. Indeed, Tagore commented: "Gandhi Mahatma is making various efforts to make Hindi the language for the entire country. These efforts, however thriving today, may one day as well peter out." And Tagore had hoped in his "Talks in China" that "the awakening of the East" would "impel us consciously to discover the essential and universal meaning of our own civilization." Viewed in the perspective of cultural history, the British impact on India resulted in a phenomenon similar to the effect of the Westernizing policy of Peter the Great. And today, there is undoubtedly a need for a rethinking of the philosophy of nationalism in its proper perspective. It is remarkable that Tagore had pioneered a new approach to nationalism in tune with the Time-Spirit. As the eminent historian of Nationalism, Prof. Hans Kohn wrote in his "A New Look at Nationalism": "None has spoken more strongly against the cult of one's own nation or nationalism than Vladimir Solovyov in Russia or Rabindranath Tagore in India, both men deeply rooted in the spiritual tradition of their community and yet wide open to the critical insight of the West." As pointed out by Prof. Hans Kohn, the possibility of a deeper cultural intercourse between India and the liberal West can arise only if we no longer allow our thinking to be channeled into widely accepted stereotypes about nationalism and its relation to liberty. "The time has arrived," wrote C. E. Trevelyan in his "The Education of the People of India", "when the ancient debt of civilization which Europe owes to Asia is about to be repaid; and the sciences cradled in the East and brought into maturity in the West may now by a few efforts overspread the world." And this dispensation, which followed in the wake of Raja Ram Mohan Roy's letter to Lord Amherst, was not regarded by Tagore as an invasion of Western ideas, but as a step towards the intellectual dialogue of cultures and civilizations. Read the complete text and other articles from this issue of the Indian Libertarian **[here](https://indianliberals.in/the-indian-libertarian/the-indian-libertarian-nov15-1962.pdf)**. type=content&p=8647). Needs editorial review._ --- ## [Musing] Tanguturi Prakasam Panthulu: A Visionary Leader and pioneer of Press Freedom URL: https://indianliberals.in/musings/tanguturi-prakasam-panthulu-a-visionary-leader-and-pioneer-of-press-freedom/ ### Body _Tanguturi Prakasam was the first Chief Minister of Andhra Pradesh. He was a visionary leader and able administrator. His dynamic personality earned him a lasting reputation in the hearts of the Telugu people. He championed Press freedom as a reputed journalist and carried out crucial reforms for the development of Rural people._ - Tanguturi Prakasam was born on 23rd August 1987 to Sri Gopalakrishnayya and Srimati Subbamma. He was born into a middle-class family and spent most of his childhood in his native village, Vinodarayudupalem, in Ongole taluk of then Madras Province. When Tanguturi was twelve years old, his father passed away. The sudden demise of his father left Tanguturi in shock. By 1885, Tanguturi’s family was facing financial difficulties. Owing to these circumstances, Tanguturi and his mother moved to Ongole Town. Tanguturi’s mother ran a small hotel and supported him to study. Tanguturi departed for Rajahmundry, located in Andhra Pradesh, where he successfully passed his Matriculation examination. In 1890, he entered into matrimony with Hanumayamma. Subsequently, he enrolled at Arts College in Rajahmundry and successfully completed the 'Fellow of Arts program’. In 1892, he relocated to Madras, where he joined the Law College and completed his legal education. After completing his legal studies, he began his career as a pleader. Later, he returned to Rajahmundry, establishing a solid presence as a pleader and actively participating in local politics.In 1904, Tanguturi moved to the United Kingdom to further his legal studies. Upon completing his studies and qualifying as a Barrister, he returned to India in 1907 and commenced legal practice in the Madras High Court. For the ensuing fourteen years until 1921, he continued his dedicated service in the legal profession. However, Tanguturi’s career started taking a political turn when he began to attend Congress party meetings regularly. After the ‘Surat Split’ in 1907, Tanguturi became an active follower of Congress. Inspired by Mahatma Gandhi, he renounced his profession as an advocate and got wholly involved in politics. On October 29, 1921, he founded ‘Swarajya’, an English daily. He was also the working editor of the publication. Swarajya’s closure came in the year 1936.  Later, in 1956, Khasa Subbarao, freedom fighter and journalist, started a magazine with the patronage of C Rajagopalachari and named it “Swarajya” magazine, carrying forward the legacy of Tanguturi Prakasam. Through Swarajya, Tanguturi published Congress's aims and its blueprint of events. During the Nationalist movement, Swarajya was published in English, Telugu, and Tamil.  During the provincial elections held in 1937, Congress came into power in Madras province. Under the ministry of Shri C Rajagopalachari, Tanguturi worked as the Revenue Minister of Madras. He played a brave role during the ‘Anti-Simon’ agitations in South India. During the Anti- Simon protests, Tanguturi faced the armed police, tore his shirt bared his chest and dared them to shoot. Due to his brave act of defiance, he was called “Andhra Kesari”. In 1946, he became the Chief Minister of Madras province. He remained in office for eleven months and later relinquished his post.  Apart from his political achievements, his liberal outlook towards press freedom was remarkable. The Library movement started in India in 1910 and played a significant role in promoting literacy, education, and dissemination of knowledge throughout the country. The Andhra Library movement began in 1914, and Tanguturi actively attended the Andhra Library conferences. He suggested establishing printing presses to spread the library movement. He contributed significantly to publications like Madras Law Times, Praja Patrika, and Swarajya.  Tanguturi was passionate about introducing village libraries to promote literacy and knowledge among the rural folk. He firmly believed that Journalism and the Library Movement could be used for education and the political awareness of the masses.  Tanguturi immensely contributed to the social development of Andhra Pradesh. After several years of agitation, the Andhra State was formed in 1953. Tanguturi became the first chief minister of the newly formed state. As a visionary leader, he understood the importance of educating the masses. He believed everyone must have access to education irrespective of caste, creed, religion, and gender. To cater to the educational needs of the people in the Rayalaseema region of Andhra, Tanguturi founded Sri Venkateshwara University in 1954 at Tirupati.  He also laid great emphasis on rural development. Inspired by Mahatma Gandhi, Tanguturi pioneered reforms to uplift Dalits, handloom workers, and downtrodden sections of society. He believed that villages must be formed based on self-sufficiency and self-governance. He was appointed Chairman of the “Zamindari Enquiry Committee” in Madras. Under his guidance, the committee prepared a report which became the precursor of the Government's efforts to abolish the Zamindari system in the country.  In the early 1950s, Tanguturi came up with the Firka development concept for rural development. The prime objectives of this concept were to improve the standard of living of the rural folk and to develop the rural economy through self-employment and community building. This concept was implemented in Madras presidency and focused on several areas, including agriculture, rural infrastructure and cottage Industries. Firka development concept was successful as it brought positive changes to the lives of rural people in Madras presidency. It became a vanguard of the community development programme launched throughout India in 1952.  Tanguturi Prakasam inspired a generation of leaders as a role model politician of all times. His dauntless courage and bravery during Anti- Simon movement brought him widespread admiration. He had a  multifaceted personality. He was a valiant freedom fighter for the nation, a distinguished editor of Swarajya, and an able administrator of Andhra Pradesh. With a liberal outlook towards rural development, Tanguturi always remained an idol of the masses.  References [Proud Moment For Swarajya: University Named After First AP CM And Publication’s Original Founder Prakasham Panthulu (swarajyamag.com)](https://swarajyamag.com/insta/proud-moment-for-swarajya-university-named-after-first-ap-cm-and-publications-original-founder-prakasham-panthulu) - [T. Prakasam - Constitution of India](https://www.constitutionofindia.net/members/t-prakasam/) - [Tanguturi Prakasam's Role in the Library Movement | INDIAN CULTURE](https://indianculture.gov.in/node/2831650) - [Tanguturi Prakasham (amritmahotsav.nic.in)](https://cmsadmin.amritmahotsav.nic.in/unsung-heroes-detail.htm?376) - [Tanguturi Prakasham Pantulu (amritmahotsav.nic.in)](https://cmsadmin.amritmahotsav.nic.in/unsung-heroes-detail.htm?2885) _Previous musing: [KANDUKURI VEERESALINGAM: ICON OF ANDHRA’S RENAISSANCE](https://indianliberals.in/content/kandukuri-veeresalingam-icon-of-andhras-renaissance/)_ [](https://indianliberals.in/wp-content/uploads/2023/08/IMG_20220724_121630_copy-removebg-preview.png) **Ch Prashanth** Prashanth is pursuing his Master's in International Relations and Politics at the Central University of Kerala. He likes to spend his weekdays at the library or gym. His weekends are spent in front of the television watching the Premier League. --- ## [Musing] The Budget Versus The People URL: https://indianliberals.in/musings/the-budget-versus-the-people-2/ ### Body _The Budget versus The People is a compendium of speeches delivered by Swatantra Party Members of Parliament like MR Masani and N. Dandekar in the Lok Sabha and Dahyabhai V Patel, M Ruthnaswamy and SS Mariswamy in the Rajya Sabha during the discussion on the Union Budget of 1965-66. __Across the five speeches, the MPs were able to highlight some fundamental problems caused by the Congress administration and the lack of emphasis on the Budget on some issues. In contrast, there was an over-emphasis on some others._ _Dahyabhai Vallbhbai Patel was a Congressman and an elected member of the Bombay Municipal Corporation in 1939. He was the mayor of Bombay in 1954, and after quitting the party in 1957, he became the vice president of the Maha Gujarat Janta Parishad. He was elected to Rajya Sabha as a Parishad member in 1958. He was elected thrice and remained a Rajya Sabha MP till his death in 1973 at the age of 67. He was remembered in his obit as 'an outspoken Swatantra leader and a stalwart parliamentarian'._ _You can read the original, unabridged version on _[_Page 42_](https://indianliberals.in/wp-content/uploads/2022/06/The-Budget-versus-the-people.pdf)_ here._ The Budget for next year has provided for a total expenditure of Rs 4,290 crores; of this, Rs 2,116 crores will be in the revenue account and Rs 2,174 crore in the capital account. The total expenditure of the Government will be higher than the previous year's revised estimate by Rs 216 crores-Rs 117 crores on the revenue account and Rs 99 crores on the capital account. The Budget provides a total defence expenditure of Rs 879 crores in 1965-66 on revenue and capital account, compared to the revised estimate of Rs 835 crores in 1964-65. The Finance Minister has, however, mentioned that the actual rupee expenditure would not increase much because purchases of stores and aircraft, the total value included in the expenditure estimates, are being made on deferred payment terms. To this extent, the inflationary impact of such expenditure will be less. The total transfer of resources by the Centre to the States will be Rs 1,307 crores in 1965-66, as against Rs 847 crores in 1961-62, the first year of the Third Plan. teh share of divisible taxes and duties in the Third Plan period has increased by Rs 93 crores, revenue grants by Rs 89 crores, capital grants by Rs 35 crores and loans by Rs 241 crores. Thus, the States have come to depend more on the Centre for financial assistance. Has not this over-dependence on Central assistance encouraged lassitude on the part of the States and impaired fiscal prudence? It is worth thinking over. ### **Assurances Flouted** The assurance given at the time of the Chief Ministers' Conference in June 1964 that the Centre would save Rs 70 crores mainly on non-productive items has not been given effect to, and the total expenditure has actually exceeded the Budget provision. It has become imperative to achieve greater fiscal discipline and secure better use of funds, for such expenditures generate inflationary pressures and weakens productive enterprise. The Budget has been formulated on the assumption that balancing the capital expenditure cannot be done entirely by mobilising voluntary savings and external assistance and that it has to be supplemented increasingly by public savings realised through revenue surplus. The present tax rates have discouraged savings of the people and the corporate sector, and it has not been possible for Government to make good these deficiencies. As a result, the overall savings capacity of teh economy has remained depressed. A large part of national production, particularly agricultural, is almost wholly unrelated to the Budget. In 1964-65 it was expected that foodgrain production would reach about 87 million tonnes, nearly 8 million more than in 1963-64. This will improve the present food shortage and enable us to accumulate buffer stocks. ### **No Incentives** Industrial production and growth are, on the other hand, conditioned by Budget operations. In his Budget speech, the Finance Minister accepted the necessity and the urgency for Indian industry to branch out into new and complex lines of development. Still, the Budget itself does not contain any incentives and does not even aim at creating normal conditions in which growth can take place. The factors which depressed the development of industry in the first four years of the Third Plan continue. The climate for investment is not such as would promote the inflow of private foreign investment in the requisite measure. If at all, the only redeeming factor is the assurance that the "policy of hospitable and fair treatment (to foreign investment) will be continued in future." It is further indicated that the "general policy, whether in regard to taxation, industrial licensing or price controls, must be consistent with our desire to harness every possible source of dynamism and enterprise, whether domestic or foreign, public or private, to the task of rapid economic growth." The last two are quotations from some of the pronouncements made by the Finance Minister. Referring to the need for significant investments in the public and private sectors during the following Plan, the Finance Minister, in his Budget Speech for the Union Budget for 1965-66, stated: _"The first and foremost precondition for mobilisation of resources for financing these investments is the maintenance of an environment of financial and monetary stability. It is only then that voluntary savings could be encouraged and directed to productive uses. Equally important is a degree of stability in our taxation policies. A greater degree of stability in regard to the structure of direct taxation is of vital importance as it has a bearing on long term decisions in regard to savings and investment."_ He also observed: _"It is equally important to encourage a larger flow of individual savings so as to promote a greater participation by individual citizens in the growth of industry…The primary objective must be to  raise the capacity for individual savings and to improve the performance of industry so that it is able to earn and offer an attractive return on the capital invested."_ Despite these observations, like those he made in his Union Budget Speech last year and on several occasions, the Budget proposals he has formulated and announced do not reflect the proper perspective of the principles he has enunciated so far. ### **Half-Hearted Reliefs** The reliefs he has announced have been granted in a halting and hesitant manner. They do not go for enough and have failed to infuse the confidence and vigour the capital market has needed for some time. The concessions are only marginal and do not relieve the pressures on the industry at the vital spots. With a large surplus of Rs 237 crores next year at the existing rate of taxation and a small overall surplus of Rs 10 crores, the Finance Minister could have given genuine relief to the industry and taxpayers. ### **Punitive Taxes** Unfortunately, in India, we still seem to be clinging to old notions. India has the unique position of being the most taxed nation in the world. We have the largest number of taxes, and their complexity is indeed bewildering. Even tax experts sometimes find themselves at sea when trying to correctly interpret the implications of the various tax laws whose rates at certain levels are punitive and confiscatory because they exceed the total income of an assessee. Nowhere in the world does such a situation obtain. Even socialistic countries like Norway, Sweden and Denmark, which are often referred to as ideals to be followed, have a ceiling rate of 80 per cent tax liability on assessable income. Even compared to other developing countries like Pakistan, Burma, Malaya and Brazil, India has the distinction of having much higher tax rates. It is so in regard to the rates of both personal and corporate taxation. ### **Inaccurate Estimates** The revenue surplus for 1963-64 is expected to be as high as Rs 229 crores as against the Budget Estimate of Rs 83 crores. No matter how often it is stressed and who stresses it, even if it be the Public Accounts Committee, the Finance Ministry continues to underestimate its revenues grossly. If these estimates had been properly made, perhaps the need for imposing such high taxation rates would not have been there. It would be pertinent to quote from the Twenty-Seventh Report (Third Lok Sabha) of the Public Accounts Committee, 1964-65. The Committee stated: "Even so, it cannot be denied that the estimates of revenue, the estimates of expenditure and the fresh taxation proposals are closely inter-linked; and that the former two serve as some indicators for the quantum of fresh taxation effort necessary. The importance of arriving at accurate budget estimates cannot therefore, be overstressed so as to avoid teh risk of the public being taxed unconsciously more than necessary." Despite these observations, wide variations between Budget Estimates and actual collections continue. Next year also, the same story will be repeated. Year after year, the need for restraint on wasteful and avoidable expenditure is emphasised, and the Finance Minister has recognised its validity. However, it remains a matter of speculation how far Government's efforts to enforce the economy and avoid wasteful expenditure are fruitful. ### **Investors Reluctant** We must take note of the observations of Dr Hans Kuntze, leader of the West German Business Delegation, which recently visited India when he said that India was not the only country asking for aid. He said, "You should remember that other countries are competing with you. I would be delighted if in this competition you beat them all." Similar sentiments were expressed at the last sessions of the International Chamber of Commerce, which was recently held in Delhi. The delegates then pointed out that the private investor in developing countries faced several obstacles, including insufficient return on investment, inhibiting tax structures and too many restrictive controls by the local governments. The Finance Minister has granted concessions regarding excise duties on certain articles consumed by the common man. Still, the burden on the consumers is raised by the increase in the import duty on stainless steel plates and sheers and steel tin plates, etc., which is over and above the regulatory Customs duty at 10 per cent of the value of the imported goods, which was announced a few days back. It is disappointing to note that despite representations made by the industry and its genuine need, the dividend tax has been retained. Similarly, there has been no change in the capital gains tax, though a marginal relief has been granted in the case of bonus shares. ### **Confidence Destroyed** As pointed out earlier, these taxes have profoundly affected the capital market and the general sentiment of the investing public. They have done incalculable harm to the process of capital formation. The argument of the Finance Minister that the dividend tax has not materially affected the distribution pattern of dividends is fallacious. The proposal to provide a ceiling limit to the income tax, including the tax charges with reference to the distribution of equity dividends and surtax at 70 per cent of companies' total income, is illusory. This high ceiling will be beneficial to a few companies only. It should be reduced to a more rational level, as in the case of other advanced countries. The proposal to impose an additional wealth tax on urban properties beyond a specific limit comes like the proverbial last straw on the back of the assessees - who are already overburdened by a multitude of taxes of a highly oppressive character. This is indeed a very harsh step to take and will cause undue hardship. Moreover, it will greatly affect private housing construction in urban areas, aggravating urban housing scarcity. ### **Government All-Powerful** In India, Government has vast discretionary and arbitrary powers. Due to the licensing and permit system, every citizen of the country has to run from pillar to post to get the necessary clearance for his application. In the circumstances, it appears idle to talk of economic power in anybody's hands. Economic power rests in the hands of the Government and the Ministers and the enormous bureaucracy that has increased during the last few years. As long as income-tax rates, the Estate Duty and the Gift Tax remain at the existing high levels, the will to save and invest will be lacking. It is only when these taxes are brought down to more reasonable levels that the investor will feel inclined to work, save and invest in productive enterprises because if, after all his efforts and endeavours, his savings and capital are taken away as a result of confiscatory rates of income-tax, Estate Duty and Gift Tax, he will be left with no initiative. ### **Sheer Waste** I would also like the Finance Minister to examine the matter in one way. What is the amount of expenditure the Government must incur to collect small amounts of tax? It will be about Rs 80  to Rs 90 from small assessees yearly. Is it worth the expenditure? Government has to maintain a large department to do all this. Is it worth all the trouble, the paper and the staff required to collect the money? Another aspect–I know that he cannot do it by himself–by which the Finance Minister can help the country with his Budget is through greater production. Whether in State enterprises, Railways, or everywhere, the production level is very low. It is so even in the industry. Therefore, what the Finance Minister needs to do is to increase production everywhere. All Government Departments are known for being overstaffed, for people not having enough work, though many people are kept on the payroll. Charity should begin at home. The Government should start with Government Department, State enterprises and the Railways. How long will we have this sorry spectacle of State enterprises being deficit institutions? We were just told that our public steel projects, the biggest in the public sector, are still making five per cent losses instead of making that much profit. ### **Public Sector Obsession** This morning we had a question about the Coal Development Corporation. There too, we are losing Rs 40 lakhs every year. That also adds to our tax burdens. As if this were not enough, this morning's papers announced that the Government still has the faulty notion of placing small car production in the public sector. I thought the matter had been set at rest a few years ago, but some people revived it. I hope the Finance Minister understands this implication and will not allow this to be done; it will not help the country. Apart from the Steel and Coal Corporations, we understand that the State Trading Corporation had bought edible oil worth Rs 80,000, which it had to sell for Rs 20,000 recently. If such is the achievement of the State Trading Corporation, can anybody say it is giving us any benefit? The Government have got a large number of Advisory Committees, but I do not know whether they listen to what is said in these committees. In the Central Advisory Council of Industries, Mr Tata disclosed that taxation confiscated the whole income. Mr Birla said that the Bihar Government was fatally interfering on behalf of labour - particularly for the monopoly of Bihari labour. ### **Corrupt Rampant** Then, of course, we have the burning question of the day what is happening in the great State of Orissa? What do Mr Nanda and the Sadachar Samiti have to say? I will not repeat what I said yesterday on certain provisions of the Bill before us, but is this the way the Sadachar Samiti and the Home Minister are proceeding? Will the Sadachar Samiti be turned into a Gestapo of the Home Minister? The country is entitled to know why we are being asked to pay more and more if this is how the money will be taken and spent. ### **Discrimination** Before I conclude, I would also like to add how Departments of Government - it is not only the Finance Department but other Departments also - are being used. I have before me the case of a paper taught was supposed to be started as a weekly by no less a person than a grandson of Mahatma Gandhi. I hope nobody will say he is not a patriotic citizen. He did not get a license for newsprint. He cannot get it even now, while the allies of the Communists and fellow travellers get the machinery, paper, buildings and everything in this country, in this city of Delhi. Where are we heading? These are some severe shortcomings that Government should apply its mind to and correct if it wants the people's confidence. Of course, I have been often held, I have often said, that the policy of the Government, the taxation policy particularly, is oppressive. It is a policy aimed at crushing the people so that they cannot rise and do nothing but meekly submit.  Before I sit down, I would repeat my appeal to the Finance Minister to reconsider and revise his proposals and give some relief to the poor who have been taxed so much, particularly after the fall in the value of the rupee. _Previous musing: [The Party or the People?](https://indianliberals.in/content/the-party-or-the-people/)_ --- ## [Musing] The Education of the Electorate URL: https://indianliberals.in/musings/the-education-of-the-electorate/ ### Body _MA Venkata Rao published this piece in the October 1961 issue of The Indian Libertarian magazine  The edition was published amid the time when India’s frontier policy failed. M. A. Venkata Rao in “The Education Of The Electorate,” highlighted the strategy needed for winning the votes through the purview of the economic standing of the voters in order to maintain a national democratic stand._ _You can read the original, unabridged version _[_here_](https://indianliberals.in/the-indian-libertarian/the-indian-libertarian-oct1-1961.pdf)_. __ _ The characteristics of the electorate everywhere determine the quality of democracy and its influence on beneficial or otherwise affairs. In our country today, we have substantial constituencies consisting of voters given political rights on an adult basis irrespective of property, education and sex. For the Lok Sabha, we have constituencies running into lakhs of voters in rural areas, spreading over several townships. To contact them would require ample funds for conveyance and great leisure. Only men of means can contemplate candidature for Lok Sabha or men favoured by parties with significant funds to "invest" in the enterprise of capturing power. In such circumstances, the strategy to win a majority will have to consider several psychological factors, even where sufficient funds are secured. The strategy depends on the psychology and economic standing of the voters as well as their scatter over a large area. It would be helpful to record the outstanding features of the mind of the voters in a city, as revealed to the present writer during his campaign for a seat in Lok Sabha in the last elections. They will resemble similar electoral districts in other parts of the country in urban constituencies. One of the outstanding impressions left on the writer's mind during his contacts with individual voters, both educated and uneducated, was the surprising degree of cynicism they displayed. They said frankly that in their deliberate opinion, one candidate was as good or as bad as another and that parties made little difference to the outcome of good administration! One of the educated voters, a prominent lawyer, cut the candidate's appeal short with the curt remark, “Stop that stuff. All parties make promises and claim to be better than their rivals! But I am voting for you as an individual because I know you. We want informed and reliable persons in Parliament”. Another graduate said he would not vote for any candidate, for all parties and candidates would be the same. They stand for their advancement, and parties only aim at power and the opportunity to exercise patronage among their supporters. A cigarette and pan vendor asked, “Why should we vote for you to enable you to become one of the ‘high and mighty’, travelling to and from Delhi First Class? We shall not see your face after the elections and remain as uncared for as ever!”  A farmer asked whether he or his party would reduce taxes. He answered the question himself and said that _no government would do so_. He felt that new governments would impose new tariffs to favour their groups. Whether _Maharajas_ or elected Ministers, there is no respite from tax burdens to the farmers and other producers. And so, these elections are a costly farce. People's governments are in fashion these days, and so the world goes on until the fashion changes, as in Pakistan, as we hear.” Many voters of all ranks feel helpless and ineffective in the democratic system. Their vote coming at long intervals and giving no control to them over the representatives ultimately chosen to govern the country gives them a feeling of frustration and futility. The doctrine of the people's government of the sovereignty of the people does not enthuse them. It makes no difference in their lives. The class of representatives and the rulers chosen by them to form Ministries become a new class to take the place of the old white bureaucrats. In the exercise of power, they do not find any difference between the old and the new system, except that the new men make several hypocritical claims to serve the people, but they “serve” the people _at a higher cost_ with less justice and integrity. The individual voter feels lost in the vast machinery and numbers involved. He does not think that his vote counts for anything. Hence, the most significant difficulty is bringing him to the polling booth. Large proportions of the middle and educated lower middle classes enjoy the holiday given to offices and factories and spend it in recreation or mid-day siesta or visiting relatives and friends. Only a few can be persuaded to take the trouble to vote if a conveyance is furnished. Such conveyance offer is contrary to electoral law but is more honoured in the breach than in the observance. All parties provide such convenience to the extent they can afford it. It is an open secret. If the workers of parties seek to report the malpractices of their rivals, disputes and fights often break out. Even the breaking of heads and murders are not out of the reckoning. The coming elections are likely to engender more bitter feelings and cause more significant law and order disturbances than previous ones. The Congress will go all out to retain power, more significant numbers of communists will enter the fray, and the _Jan Sangh_ men are not pacifists or timid in emergencies they are extending their influence to new areas and consolidating their hold in their original districts and States. There is a great need to dispel the ordinary voter's cynicism and give him a sense of purpose and importance in participation in the electoral process. Most voters complain that the candidate is remote from their lives and indifferent to their interests. Therefore, parties should take care to nominate candidates who have a sense of rapport with the bulk of the voting people in the constituency. The other day, a Swatantra party organiser was boasting that a high official, a director of medical services, and a doctor of wide popularity during his term of service would be given a party ticket. He was confident that he would sweep the polls. He may, but he has to reckon with the fad that there is a social and intellectual gulf between the eminent doctor and the bulk of the electorate. The ranks of voters don't want high qualifications like M.R.C.P. etc. but like a person who _identifies himself_ with them, with their joys and sorrows and their grievances and is willing to give time and energy to act as an effective liaison between them and the ranks of government. Most think not so much of the government's general policies like socialism and five-year plans but of their individual needs. They expect members of parliament, whether of Lok Subha or of the State Assembly, to use their influence to get jobs, promotions and seats in college for their sons and sons-in-law and nephews! Or they want them to assist in the securing of trade licences or quotas or permits if they are businessmen. These are undoubtedly illegitimate demands on the part of voters, but they are in their minds while voting or joining a party. Corruption is condemned in the abstract, but everyone seeks to get a more than equal share in the loaves and fishes of office! Of course, there are genuine cases where the representative is expected to secure justice for his constituents if it had been denied in any case owing to negligence or the influence of rival party men in positions of power or advantage. One way to remove the frustration debilitating democracy at the roots today is to get the voter to keep in touch with his representative after the election. He should demand of him that he should stay in touch with his constituency and visit his constituency at intervals of the parliamentary sessions and inform his supporters and others of what was taking place in the legislatures. He should explain the policies of the party in power and the opposition's criticisms. This contact between voters and representatives during off-session periods creates a sense of reality in parliamentary government in the multitude of voters. During sessions, voters should communicate by post with their candidate in the legislature. On important occasions, they can send delegations to him to explain local reactions to Bills on the anvil of parliament. Rousseau foresaw this difficulty in representative democracy. He said the British voter was accessible only on election day once in four years. But with our large populations,  we cannot go back to the direct democracies of Greek days. All we can do is increase contacts and communication between primary voters and representatives through modern means of communication supplemented by increased intimacy between them during off-sessions, when direct meetings in the constituency may occur. The indirect information voters obtain through the newspapers, photographs, and radio can acquire direct face-to-face primary, personal character and vitality during these exchanges between voters and representatives. The second snag in the electoral process that any candidate comes up against is the fact of caste. It is natural for voters of any caste to feel a kinship with a representative of their own caste and to vote for him. But it has been the writer's experience that in this matter, it is the candidate and the party managers who are the greater sinners against nationalism and democracy. They deliberately appeal to caste feelings where they help secure their candidate's favour. It is not the uneducated voter who is primarily responsible for the havoc done in his name and the eclipse of broader nationalist motivations during elections and in democratic governance. It has been found that where an appeal is made straight to the national and democratic consciousness of the people, caste barriers have been crossed to a considerable and encouraging extent. The present writer received a few hundred votes even from Muslims, after a straight appeal in a single speech in a predominantly Muslim locality! It is wrong to assume that Hindus will vote Hindus and Muslims will vote Muslims, that Brahmins will vote Brahmins and Non-brahmins, Non-brahmins and so on. It is the sacred duty of the candidate and his supporting party not to appeal to sectarian motives but to have faith in human nature and the higher feelings of nationalism and democracy, even in uneducated, unsophisticated voters. It is a mistake to think that formal education confers any superiority on the graduate. The unlettered person can better understand ethical motives and react to moral appeals than the educated classes. The ignorant persons lack information about the world, but they are wise judges of character and can judge who is a better representative to speak for them in parliament. The feeling of participation in a human and classless way with teh lives, hopes, and fears of the masses counts in the electoral process. This can be conveyed to the uneducated more easily than doctrines regarding democracy. But the voter also needs some basic information to vote intelligently and to have the right expectations about democratic government. All voters, whether literate or illiterate, should understand the constitution and its fundamental rights. The role of the press, the distinction of the party from government, the responsibility of Ministers, the difference between delegate and democratic member of parliament and the duty of using his best judgement–such information should be imparted to the voters. Non-party Voter’s Clubs best do it, one for each Assembly constituency, which ought to develop into a primary face-to-face association, cutting across wealth, office, birth, education and political power. Such Clubs run on a non-party basis should develop into primary cells of the national democratic organism. They will take the sting out of the party boss system. Patriotism demands that some educated persons come forward to form and develop such Voter’s Clubs all over the country. Particular attention should be paid to removing or at least mitigating the cynicism and frustration of the individual voter. The voter should be informed that given the country's vastness, it is impossible to establish a direct democracy, as in the Greek City States and the Indian republics of old in the days of Chanakya and Chandragupta Maurya. The next best thing is to have assemblies of representatives. To keep the masses manageable for business and practical discussion, it is necessary to limit their number to around 500 for the country and about 200 for the state. And the necessity has its advantages to countervail the disadvantage; namely, we can have a selection of the abler among the rank and file who will act as representatives to think for the people and develop expertise instead of being gramophone records or more delegates. It is impossible to convey all the differing opinions of tens and thousands of voters. The members should listen to all ideas, form their own views, and arrive at a consensus that may include an element of value in essential aspects of the discussion. The voter should be informed that he should regard the vote as an element of sovereignty which he should put into action as in sacred duty by the nation. He should not disregard it as of no avail. Avail or no avail, he should use his vote as a matter of duty. Every people obtain the government they deserve, and if the voter does not exercise his vote, the opinion of others will prevail, and he has himself to blame. Also, the voter should refrain from selling his vote on otherwise misusing it. He should form the habit of using it in favour of the best candidate offering himself for election, best to represent the constituency as a whole and not a sect of caste or kinship group or the following of a local leader who has become prominent on other grounds. A candidate from a high family in the last elections stood as an independent for the Lok Sabha and was supported by the communist party. His only claim was that he could see Pandit Nehru at any time of the day without a formal engagement for an interview! A business magnate paid his election expenses in the hope that such a person could obtain permits, quotas, and licenses that could compensate. He was also a comic poet and brought cinema stars, male and female, to gather huge audiences for him. And he succeeded in getting 45,000 votes though he hailed from a different part of the country and did not know the voters' language! The voter's frustration could be overcome by pointing to the opportunities for rising for them in the local bodies, which they could later use as stepping stones for the Lok Sabha or Assembly. Participation in Voter’s Clubs will restore the human touch and fill the void to a great extent. _Previous musing: [The Universality of Human Values](https://indianliberals.in/content/the-universality-of-human-values/)_ --- ## [Musing] THE DANGERS OF JOINT CO-OPERATIVE FARMING URL: https://indianliberals.in/musings/the-dangers-of-cooperative-farming/ ### Body _The following essay was published in 1950 by the [Forum of Free Enterprise.](https://indianliberals.in/content/the-dangers-of-joint-co-operative-farming-by-m-r-masani-m-p-mar-7-1950/) Authored by M. R. Masani, the essay outlines the Chinese and Soviet models of co-operative farming. He highlighted the possible shortfalls of co-operative farming in India and the Gadhian vision of rural industries for increasing employment. _I have been a life-long supporter of co-operation. I am one of the founders of the Industrial Co-operative Association in Bombay, and my own little bank account has never been in a capitalist bank but always in the Bombay State Co-operative Bank. I believe very strongly in the principle of genuine co-operation. But when we use these terms like co-operation, we have to be very clear as to what co-operation really is, and what it is not. The views I express will be in line with those of co-operators such as the Indian Co-operative Union in India, the British Co-operative Union and all co-operators throughout the free world.  True co-operation can take many forms. It can take the form of co-operative credit; of multipurpose co-operatives which help the peasant who owns his own land to get good seed, borrow or loan a tractor, if necessary, to have fertilisers, to get credit for all these services. And he can also use the co-operative for selling his goods in the market, that is, marketing co-operatives. They can be separate or together. But the essence of genuine co-operation is that the peasant must own and cultivate his own land. Co-operation can only be between free men, not between serfs. Co-operation can be between men who say, "This land is mine, I shall cultivate it with the members of my family, but for the sake of greater production and mutual assistance, I shall come together with others of my kind."  But there is another kind of co-operation, so-called, which is not co-operation at all, and that is collective farming of the Soviet-Chinese model. That collective farming, as Marshal Tito recently said about China, has nothing to do with Marxism or socialism. That system has been devised so that the greatest amount of surplus value or surplus grain can be squeezed out of the peasantry for the greater glory of the dictatorship, its military machine and for the forced process of industrialisation which is being erected on the backs of the 4 groaning peasantry of Russia and China.  According to an editorial in "The Hindu" of the 11th January, 1959: "The Nagpur programme appears to be borrowed from China where the fabric of society was destroyed by war and revolutions and where the Communist party was in a position to do anything it wanted."  It is in the light of this distinction that I would judge the policies which today go under the name of joint "cooperative" farming. In my view and the view of co-operators, the dividing line is: if you allow a peasant to keep his land and his boundaries, if he farms it with his own hands and those of his family and hired labour, then he is member of a genuine co-operative; but if you uproot these boundaries, if you pool the land, if you create a big farm and call it a co-operative, it does not change anything. It is still collective farming minus the name. In the light of this distinction, let us look at the Nagpur Resolution. "The future agrarian pattern", says the resolution, "should be that of co-operative joint farming in which the land shall be pooled for joint cultivation, the farmers continuing to retain their property rights and getting a share from the common produce in proportion to their land. Further, those who actually work on the land, whether they own the land or not will get a share in proportion to the work put in by them on joint farms. As a first step", says the resolution, "prior to the institution of joint farming, service co-operative should be completed within a period of three years; even within this period, however, wherever possible and when generally agreed to by the farmers, joint cultivation may be started."  In the context of the resolution, what will property rights mean? When the boundaries of the farm have been uprooted, when tractors and machines are running over that land which once was six, eight, ten or twenty farms, the right of property will mean a mere piece of paper given to the peasant to console him saying "You once owned so many acres; your property is still intact." This is the dodge that was tried and practised in China and in other Communist countries. But after a while, the question is raised "Why should this man who is not working hard or not doing as much as the other fellow draw a large share because he owned once some land?" In other words, you start by saying that the people in the farm will be remunerated partly in proportion to the land contributed, and partly in proportion to labour contributed. That is fair enough. But this can never last, because the functionless owner is no owner. His property actually has been taken away from him without telling him so, and he is being fobbed off with a scrap of paper which a future government will have no hesitation on "equitable grounds" in tearing up, because his utility to society ends on the day on which the farm ceases to be his.  It is doubtful whether those who are party to this decision have understood the implications of what has been enacted in their name. I have no hesitation in asserting that the resolution passed at Nagpur, whether those who passed it are aware or not, is a resolution for collective farming of the Soviet-Chinese pattern and not for genuine co-operative farming. Therefore, this insidious attempt to bring in collective farming by the back-door needs to be opposed by every true democrat.  Some reasons have been given why co-operative or collective farming - let us use the two interchangeably, because the Congress pattern of co-operative farming, if ever carried 'out, will be collective farming - is advocated.  The first is that production will increase. I am amazed that, in the face of all the facts from every country in the world there should still be Government spokesmen who repeat this claim parrot-like. Collective farming or co-operative farming of that pattern has failed to increase production. On the contrary, production has invariably gone down, whether it has been tried in a Communist country or otherwise.  First of all, the assumption that a bigger farm produces more is not true. Statistics of rice and wheat produced throughout the world show that countries which have small farms, like ours, produce more per acre than countries with big farms. Let us take an example of wheat and rice. The two countries with big farms in the world are the U.S.A. and TJSSR; both have relatively very low yields of wheat. The USA produces 12.2 quintals per hectare and the USSR 9.3. In the U.K., with small farms, the figure is 28.5 quintals per hectare, in Denmark - smaller still - it is 34.4 quintals and in Japan - whose average holdings are smaller than ours - the figure is 22.6 quintals per hectare or twice as much as in the U.S.A. and 2-112 times that in the USSR. - The USA produces 28.3 quintals of rice per hectare and the USSR produces 25. Japan, with smaller farms, produces 48.5 quintals per hectare - twice as much.  In India according to a study made by the Indian Agricultural Research Institute of sugarcane production, ploughing by bullocks yielded 410 maunds of sugarcane, ploughing with tractor farming upto 6 inches 361.5 maunds; with tractor farming upto 10 inches 356 maunds. In other words, the bullocks gave the best return, a little dose of tractor farming gave less, and full tractor farming gave the least.  Countries which have tried collective or co-operative fanning have always failed. The USSR, it is notorious, lags behind the rest of the world in production per acre and per man. Yugoslavia, which tried collective farming from 1948, gave it up in 1957. The Yugoslav Parliament passed a law on April 27, 1957, abandoning collective farming. It said that it had shown negative results - loss of interest by the peasants and decrease in production. Communist Poland, which also in its Stalinist phase, tried collectivisation, had to give it up. In Poland, 80 per cent of the collective farms and co-operatives have been liquidated in the last two or three years. Motor tractor stations have been broken up and the tractors have actually been sold to individual peasants. The tax advantage given to co-operatives has been taken away by the Gomulka Government on the ground that there should be fair competition between co-operatives and individual peasants. Mr. Gomulka, Prime Minister of Poland, said in October 1956 that peasant production per hectare was 16.7 per cent higher than in the co-operative farms and 37.2 per cent higher than in State farms. This was the reason why even the Communist Government of Poland has given up cooperative and collective farming and given back land to the peasants. Eighty per cent of the co-operatives and collectives have been liquidated.  By going in for this red herring of joint co-operative fanning on doctrinaire grounds, the Government and the Congress Party are diverting interest and attention from the real need which is to give the peasant more water, better seed, better know-how and better tools.  It is said that co-operative farming would increase employment. Co-operative or collective farming reduces employment. By pooling land, by bringing in methods of rationalisation or mechanisation, you reduce the need for labour. The one thing that co-operative farming can be expected to do - whatever else it does not - is to increase unemployment in the countryside.  There is only one way to create more employment in the countryside, and that is the method that Mahatma Gandhi always urged, the establishment of rural industries, the taking of industry to the countryside with electric power or without. My own emphasis, like Mahatma Gandhi's, would be on decentralised industry, small people working on electric tools through power taken to the countryside. I believe that that ahead of all of us by many generations.  Finally, it has been said that co-operative farming is a higher form of society, it is part of the socialist pattern. Collectivisation is no part of democratic socialism in any part of the free world. Warning this country against following the Chinese path of so-called co-operatives, on his last visit to Delhi, Mr. Aneurin Bevan, Left-wing leader of the British Labour Party, said:  "India cannot afford to make the mistake that Russia has committed, because she does not possess empty spaces which could be called upon to make up for the failures and mistakes in agriculture as in Russia. India has to bring about an economic revolution in harmony with the needs of the countryside. The application of the principles of collectivisation, mechanisation and centralised control has  proved a failure in the field of agriculture in the Soviet Union. The whole countryside in Russia seethed with discontent. The number of cattle in Russia today is less than before the revolution. The Russian experience was being repeated in China and the Communist States of Eastern and Central Europe."  Let us examine what has been said on this subject by a man whose knowledge on this subject is unsurpassed in this country. Mr. Charan Singh, who is a member and leading light of the Congress Party, has made a lifelong study of this subject much better than anybody else. This is what he says:  "Human nature being what it is, even brothers usually separate from one another after the head of the family, the father, has been removed by death or other cause. In the circumstances, it is Utopian to expect that an average householder will, all of a sudden, identify his interest with the interests of these hundreds of persons in the village or neighborhood who were total strangers to his life before."  We know that murders are committed between cousins and between relations for land. To say that because of a resolution or a law, we are going to change a human being overnight and make people who love their lands with passion to pool their lands in a voluntary manner is thoroughly Utopian.  There is only one way in which this kind of joint farming can be brought about, by coercion and violence.  Let us take another example. We know about the gramdan villages. In Koraput, Acharya Vinobha Bhave and Mr. Jaya Prakash Narayan tried to ask the local people to cultivate them as a village and not to ask for distribution of the land. Mr. Jaya Prakash confessed that this experiment had not succeeded because the peasant does not want to farm village lad jointly; he wants something of his own. That is part of human nature. We all want something of our own. We are not prepared to share everything with everyone in an equal measure. The human being is largely selfish, though not entirely so. Are we going to legislate for human beings or for angels who do not exist?  The Government of India announced last April that there should be 3,000 co-operative farms by the end of the Second Plan and of them 600 should be brought into existence by the end of the financial year 1958-59. It is a farce to talk of voluntary co-operation and targets. Mr. Gomulka pointed out very rightly that targets and voluntary co-operation cannot go together, He said:  "Quantitative development of producers' co-operation cannot be planned because, on the basis of voluntary entry to co-operatives, this would mean the planning of the growth of human consciousness, and that cannot be planned."  What kind of administration have we with which to guarantee this gigantic experiment, after three years, of destroying peasant proprietorship, in taking people away from their lands, millions and millions of them, and pooling them in joint farms?  In its Report, the Agriculture Administration Committee appointed by our Government says that there is only a handful of competent senior officers in the Department of Agriculture. No replacements are available for this handful of senior competent officers. Directors of Agriculture in the States have said that if such replacements were available, they would like to replace 30 to 40 per cent of their staff who are not up to the mark. The scales of pay in the Agricultural Service are lower than in other services. It is common for an Officer to be promoted to a gazetted post after 20 years of service and then to retire on the magnificent salary of Rs. 400 a month! The service rules have in many States not been revised for 25 years. It is no wonder that Sir Malcolm Darling, an experienced and enthusiastic co-operator, who was asked by Government to come to this country a couple of years ago and have another look at the picture that Indian co-operatives presented, summed up his impressions by saying: "In every State the path of co-operation is strewn with wreckage." Out of this wreckage, this great mausoleum. of joint co-operative farming is to be erected after three years!  Hazarding a guess as to the kind of autonomy these cooperative societies will enjoy, we may wonder: "Are we really serious when we talk of co-operatives, or are we only intending that we will impose a super-zamindari from Delhi on the poor peasants and call it co-operation in order to pacify them?"  Let us look at the recommendations of the Co-operative Law Committee which reported only a few days back. It was a committee of Registrars of Co-operative Societies and other gentlemen who will have to administer co-operative farming after three years. Their main recommendations are:  - The Registrar should have the right to have the accounts of any society audited "under his own direction and control" and then to give directives to the society to put its house in order. - The Registrar has the right to "settle disputes of any kind, to appoint another officer to settle the disputes or to appoint an arbitrator." And no appeal shall lie to a court of law in regard to any of these disputes. (At one stroke the Registrar would abolish the jurisdiction of the rule of law.) - The Registrar will have the power to supersede any society; and he may run any society so superseded for two years and, at his own discretion, extend the period to four years. (What kind of a co-operative society is it which has to be run by a nominated official over the heads of the society for 4 years? Why not admit defeat and dissolve the society?) - The Registrar may make an order directing the winding up of any society. - The State Government may become a member of any co-operative society and when it becomes a member of a co-operative society, "each person nominated by the State Government on the committee shall have one vote." It is surprising to have this kind of report from those who are going to administer the agricultural co-operatives in this country. The Indian Co-operative Union, a leading body of co-operative enthusiasts in this country, have said that the effect of such a report, if accepted, would be to 'reduce the co-operatives to little colonies of backward, ignorant and helpless people to be "administered," "controlled", "supervised", "audited", "inspected", "superseded", "adjudged" and "dissolved" by one single authority, the Registrar of Co-operative Societies.'  There is no wonder that Prof. Chandrasekhar, one of our finest demographers who recently visited China, described the Chinese communes as a "a new form of colonialism".  It seems to me that there are two alternatives with which we are faced. One is that an attempt will seriously be made to implement this programme of destroying peasant proprietorship after three years and to try to bring in collective farming. I hope that such an attempt will not be made. But, if it is made, it can only be made by threats, by coercion; if a serious attempt is made, it will unfortunately lead to civil war and bloodshed and the death of thousands of people in this country. Anyone who thinks he' can persuade the peasants of India to give up their lands and become landless serfs again or a super-zamindari in Delhi or the State capital is living in a fool's paradise. It is to caution the government against taking steps that may involve the country in such horrible developments that I am mentioning these dangers. Untold damage will be done in the attempt to bring it about even if the effort is given up half-way. In Communist Poland, only 9.2 per cent of land was actually collectivised but the production in even the private farms fell until the policy of collectivisation was abandoned for every peasant felt that his turn might come in a few months' time. The incentive to production was taken away. Even the psychological damage of talking about joint "co-operative" farming will be considerable.  The Prime Minister, talking at Bareili on the 10th February, is reported to have said: "Those who tell you that co-operative farming amounts to some sort of confiscation of land are trying to cheat you."  I wish he had not used this uncharitable remark about people as diverse as Shri C. Rajagopalachari, Shri K. M. Munshi, Shri Jaya Prakash Narayan and many others who have said that. For instance, Shri Jaya Prakash Narayan has said in Banaras that co-operative farming in today's context means creating "puppets in the hands of officials." It is not good to say of these patriotic sons of the soil that they are cheating the people.  Whatever the motives may be, whatever they may be thinking they will be doing, the people who are really misleading the country are those who say that this Nagpur pattern of joint co-operative farming will not take the land away from the peasants. It is those who are denying this who are misleading the people and not those who are bringing this matter to the light of the people and performing a patriotic duty that they must perform. The ruling party has set its face on the wrong road, wrong from the point of view of public morality, from the point of view of a free society and also, wrong from the point of view of self-interest.  It is wrong even from the point of view of self-interest because for the sake of a minority, a majority is sought to be penalised. Let us see figures of the landed and the landless people in this country. The National Sample Survey of 1954-55 came to the conclusion that there were 66 million households owning land with five members per household, while there were 15 million households not owning land at all - about 20 per cent of those with land. "Indian Agriculture in Brief," published by the Ministry of Agriculture in 1957, gives these figures. Those who are self-employed in agriculture are 53.7 per cent of the population. Those who are landless labourers are only 12.6 per cent. You may say it is a small plot that most of the peasants own, but they love that land, small as it may be, as they love their baby, because it is small.  Our real duty to the peasant today lies in giving water to the cultivator. In giving them better fertilisers and seed and teaching them how to cultivate their lands better than they have been used to do through the ages. This is the way in which Japan and other countries have shot forward in the production of wheat and rice. Instead of doing that, we are drawing the red herring of collective farming across the track and diverting attention from our gigantic tasks. Even if it is never carried out, it will divert attention from constructive pursuits and will take class war into the villages setting the landless against the landed, small-landed against the big-landed, and so on.  Gandhi ji used to say: "We of the cities will do everything for the peasant except get off his back." This formula of joint co-operative farming is invented by urban, doctrinaire people who have very little to do with them and is another attempt in a roundabout way to keep on the backs of our peasantry._Last week’s musing: [FREE ENTERPRISE AND FREEDOM](https://indianliberals.in/content/free-enterprise-and-freedom/)_ --- ## [Musing] The Emerging Scenario in Education URL: https://indianliberals.in/musings/the-emerging-scenario-in-education-2/ ### Body _Published by the Nani A Palkhivala Trust in 2011, the following [booklet](https://indianliberals.in/content/the-emerging-scenario-in-education/) is the textual reproduction of the eighth Nani A Palkhivala Memorial Lecture delivered by Kapil Sibal. The booklet outlines his vision for transforming the Indian education landscape over the course of the next decade. _I remember the day way back when Nani was arguing before the thirteen judge constitutional bench in the Supreme Court which was seeking the reversal of Keshavnand Bharati, I happened to be in court mesmerized by his forensic ability and realised what a giant he was. Nani was no ordinary man. He single handedly stood for Constitutional principles against unconstitutional means and fought the battle alone. At the end of the second day, the Chief Justice dispersed the bench. The rest is history. For me to remember such a man at the Eighth Memorial Lecture is indeed a great honour. I have also had the great privilege to be with Nani In several matters in court and, in particular, the river water dispute between Haryana and Punjab where he, at my request, led me for the State of Haryana. He single handedly interpreted the references in such a manner that it has till date not been implemented. This was the extent of his forensic ability. Nani, apart from being a giant of an intellect, was also a wonderful human being. He had qualities of both head and heart and the way he spoke to you no matter how high a dignitary you might be, he spoke from his heart honestly, directly and never held back the truth. It is time that in India, leadership does that; it is time for the political establishment to set the facts out so that people are informed and through that process a dialogue starts between Government and civil society. Together, we then can face the challenges of today and come up with solutions for tomorrow.  Today, I hope to start a dialogue with you on the emerging scenario in education. Let me give you some facts before we start this dialogue.  The facts are these. We are about 1.2 billion people and of those 1.2 billion people, 220 million children go to school. To put things in perspective, 220 million children are twothirds the population of the United States of America and almost half the population of Europe. In India, that is the number of children who go to school. But of the 220 million children who go to school, only 13 million reach college. This is a frightening scenario. How can a nation move forward when of the 220 million children who go to school only 13 million reach college? The reason why I say this to you is because the wealth of a nation does not depend on the physical assets of the nation. It does not depend on factories and bank balances or multinational corporations. It depends on the intellectual capital of a nation. It depends on the intellectual capital of a nation. The wealth of a nation is created by that intellectual capital and that intellectual capital finds its germplasm in the university system.  If you don't have a critical mass of people moving into the university system you will never be able to create national wealth. Now let me give you the difference between lndia and Europe and lndia and the United States of America. The first point of difference is evidenced by the Gross Enrollment Ratio (GER), which is the number of children between the age group 18 to 24 who go to college. The GER in the developed world is anywhere between 50 per cent to 70 per cent. That means for every 100 children, in the age group of 18 to 24, 50 to 70 go to college. In stark contrast, the GER in lndia is 12.4 per cent. This is the real difference between the developed and the developing world. The gap between the developed and developing countries is not on account of the national highways of Europe or the autobahns of Germany. Nor is it the result of the scale of their factories or the export figures or the GDP growth.  The root cause of this gap is the wide chasm in education between the developed and the developing world. This needs to be addressed.  Let me share with you another fact that might surprise you.  In the ultimate analysis I firmly believe, national wealth grows in the university system. This wealth grows through research. Research creates IPR, intellectual property. Successful IPR is translated into goods and services that then become the foundation of trade and finally generates national wealth. Therefore, it is very important to figure out what is the extent of research and technology within the university system in any country.  Let us look at some numbers. For every million people in the Western world, the number of people doing research is anywhere between 4700 and 7000. The figure is close to 7000 in the Scandinavian countries. In America it is around 5000. In lndia the figure is 156. What does that tell you? That tells you that it is time that lndia started investing in knowledge because that is the only way to create wealth. Wealth needs to be understood along with the concept of empowerment. The word "power" is very important there because it tells you that it is an unequal commodity in any society. People are powerful because they have wealth. They are powerful because they have access to schools, to universities and access to all the resources. Those who are marginalized, those who are disadvantaged, have no access to power and therefore they are not empowered. We need to empower people and Nani used to say that the best way to empower people is through education. How do you bring about that empowerment? Our Prime Minister Dr. Manmohan Singh said the other day that we need to give access to people at the bottom of the pyramid and we need to ensure that there is investment in research and technology at the top of the pyramid. The Right to Education Act, 2009, takes care of the bottom of the pyramid. The reason why it was important for us to pass this legislation is because we wanted to get that critical mass of people into the university system. If I can ensure through the Right to Education Act that all the marginalized children in the country, from the schedule caste/ tribes, members of the minorities, especially the Muslim minorities ; children in the North East, tribals residing in the central and other regions of our country, if we can get all these disadvantaged groups into the school system, and we ensure in the years to come that the rate of retention of the children as they move through school is a hundred percent, we would have created a critical mass of people in the age group of 18 to 24 who will go to college. This is the rationale and philosophy behind the Right to Education Act. It needs to be understood that this vision is not something that the Central Government can enforce overnight. The Right to Education Act (RTE), 2009 came into effect on April 1, 2010. But under the Act itself we are giving ourselves three years for implementation. We have set a timeline of five years for teachers to acquire minimum qualifications to be able to teach in schools. Implementing this vision needs the cooperation of civil society. In fact, we need the cooperation of all the key players in the system, This includes the State Government, the Municipalities, the school management, the NGOs, the teachers, the parents, and most importantly the buy in from the children. It would be wrong to think that the Central Government on its own can drive this movement and achieve the goal that we want to achieve. This is a national priority I and it requires a national effort. People in this country need to realize the significance of RTE 1 as a national endeavour. At present, I do not think even the political establishment realizes the importance of this national endeavour. There can be no politics in this because we are talking about our children. We are talking about the future of India. So there should be no political debate. You can have a political debate as to how to reach the goal but to educate our children is a goal in itself. But more needs to be done to the system of education than just getting children to schools. We need to understand that merely sending children to school does not create intellectual property. That is not enough. We need to change the way we teach our children. We I need to change the relationship between the teacher and the student. We need to change the way the student reacts to the teacher. We need to change our discourse in education. For the last sixty years we have been foisting text books on our children so that their vision is restricted by the four corners of the class room. It is important to understand the difference between education and study. You study text books but they do not necessarily educate you. You get educated when you relate what you read to the world outside the four walls of the class room, which is what Gandhiji talked about. Your knowledge must be related to the problems of tomorrow so that you can, through the investment in the child, seek the solutions for tomorrow. The teacher is no longer the repository of knowledge. Children today have access to knowledge from sources beyond the teacher. And therefore the teacher needs to be a collaborator through this journey of the child as the child grows and moves from one class to the other. And that requires a different approach. Each child, I believe and I am passionate about that, has a genius in him or her and the role of the teacher is to allow that genius to mushroom. One of the ways to do this, is not to have end- semester exams or end of a year Board exams that test, mainly the memory of the child.  What you need is a continuous and comprehensive evaluation of the attributes of the child. One child maybe interested in mathematics, the other may be interested in music. One child might want an art form, which he wishes to develop, another child may be immersed in literature.  Democracy in the political sense is about the choice to elect your own people. But real democracy, I believe, is freedom in the class room. Democracy is not about politics. It is about freedom in the class room. That's the way India will move forward.  So we have brought about through the Right to Education Act, a process of continuous and comprehensive evaluation. Under this, the teacher evaluates the child comprehensively and continuously. The evaluation process is designed to be comprehensive.  This recognizes that the attributes of the child are multifarious and the teacher needs to evaluate those attributes. Unlike the memory based system of year-end examinations, this process evaluates the children's ability to learn; his/ her ability to concentrate, as also, his or her ability in the context of their interests; sensitive to what the child wants to do.  It assesses whether the child has capacities to communicate. The new evaluation process under RTE also attempts to capture what are the child's thought processes. Most important, it puts into place a framework so that the teacher can help the child realize his/ her real potential.  Unfortunately, we talk about education in the context of management most of the time. We talk about administration; we talk about teachers; we talk about salaries of teachers. But education is none of this.  Education is about children. And it is time that education policies of our Government are based on what the children of our country want. It should not be based on what administrations, State or Central Government, desire. This spells out the heart of the matter. This is the rationale behind the Right to Education Act. An important component of the RTE is a provision by which 25 per cent children from the disadvantaged community must be admitted to private schools. Why did I have this stipulation? It is because I think that will empower the children. Access to the best education should be made available to the most disadvantaged. I know that there are private interests involved and I know that this wind will face storms but the wind has the capacity to destroy those storms as long as we are together and as long as we know what is in our national interest.  Well having looked at issues related to primary education, let us move on to college and higher education.  There is a revolution happening in the world outside. You cannot even imagine how education will be as a way of learning in the twenty-first century. The mouse was discovered in 1964 and see how it has changed the way we learn things and communicate with each other. And what is going to happen in the next ten to fifteen years?  Let me give you a little insight into it so that we know what the challenges are and what are the emerging scenarios. At the moment, there is a movement around the world dealing with connectivity. The world is truly becoming a global village. But I dare say in the times to come, in the field of education, it will be a global enterprise.  In the next two to three years lndia will be connecting every university, every college in India. We have 26,000 colleges and about 800 universities. All of these will be connected through fiber optics. This implies that there will be a free flow of information and most of that information will be open source. So a child in one college, if he/she likes, can access a lecture or lecturer in another university, and earn credits for it.  I go back to the issue of choice. The more choice we give our children, the more freedom and flexibility they have in choosing their courses, the more we will empower them. Why should a child not do mathematics and music together? There is a lot of mathematics in music. And for some, mathematics is music. So why should children not have both? Why should a child not study physics and literature? You know Nani, essentially was a man of literature and which is why he was uniquely sensitive. He could keep you spell bound by his knowledge of literature. Why cannot literature and mathematics go together? They can. But we need to change our mindset to understand that. And so the world of knowledge will be compressed and people around the world will have access to knowledge like never before. When I talked about fiber optics, I talked about the delivery systems of knowledge. But the knowledge has to be created. Those courses have to be created. The content of courses has to be created.  The enormous work that we have to do now is to ensure that the content to the knowledge, national knowledge network, reaches every child so that they can access that.  Today knowledge is created at the cross sections of disciplines. What do I mean when I say that? If you go to a hospital or you go to a university teaching medicine, you will find there are people who are mathematicians and biologists working today; bio-scientists, people specializing in physics and biology, working together. And the reason is simple, because in many of the cutting edge solutions of today, we need the multi-disciplinary approach.  That again brings us to the element of choice in education. How do you have a multi-disciplinary approach if you cannot allow the child to choose whatever subject he or she wants to choose? Which means you must have a system in lndia where the university allows the flexibility to the student. That flexibility will only come about if we change our administrative structures.  I am sorry to say that a large number of politicians own educational institutions. And this is standing in the way of reform. But this is a national battle. We have to fight it. And the only way to fight it is to ensure that there is an element of uniformity in quality within our educational systems. Why do you think I have been talking day in and day out about the semester system being embraced by every university in this country? The reason why I want the semester system to be embraced is because that will allow flexibility. If one university does not have a semester system and it is an annual exam at the end of three years or at the end of one year, then you cannot have the flexibility, you cannot earn the credits. And in the absence of that flexibility you will not have that element of choice, which is necessary for education.  To put in place the National knowledge network and allow data to flow through that network to the students, it is imperative that adequate administrative systems at the State level are put in place. The State Governments have an enormous responsibility to change their administrative structures so that we can actually allow that information and data to flow freely to the student, enabling him to access whatever he wants and discard what he doesn't.  Now let me go back to the numbers that I gave you. Earlier, I told you that 13 million children go to college in lndia which gives us a gross enrollment ratio of just 12.4 per cent. I aim to increase this to 30 per cent by 2020.  Out of India's population of around 1.2 billion people, there are 220 million children between the age group of 18-24. If 30 per cent of them actually go to college, I will have a critical mass of our population actually creating the intellectual property that will breed national wealth. This is my firm belief. So we have made a commitment that by 2020 we shall ensure that the Growth Enrollment Ratio moves from 12.4 per cent to 30 per cent. If this happens by 2020, the number of children going to college and university will increase from 13 to 45 million. But this puts a lot of demand on the facilities that are required to meet that increasing demand.  That means that if 26,000 colleges serve 13 million children, you can imagine how many colleges will have to be built to serve 45 million. That means in the next ten years, we need another 50,000 colleges. If 800 universities serve 13 million children then how many universities will we need in the next ten years to serve the balance 32 million? We will need more than 1000 universities. So if I need another forty, fifty thousand colleges and I need a thousand universities for the next ten years, what should I do to the education system to allow that to happen? That is the philosophy behind the reforms in the Higher Education. Because I know that when there will be a proliferation of colleges and universities, there will be large number of disputes.  There is therefore a need for a redressal system. In anticipation of this we have enacted the Educational Tribunals Bill and the Bill to Prohibit and Punish Educational Malpractices.  You may be familiar with certain educational malpractices in the institutions. At least I am familiar with reported malpractices. The primary reason for this problem in lndia is the typical demand and supply mismatch in educational institutions that Nani talked about in the context of our economy. And Nani's words proved right. We decontrolled the system after 1991 and are now witnessing a new India. You couldn't have imagined the lndia of today if we thought of lndia prior to 1991. Nani was talking about this vision of lndia all the time. This is what we want to do with education. We want to open up the system and bridge the problem of demand and supply. Therefore, we need to ensure that there is enough investment that goes into education. We need to ensure that there are enough number of good institutions for children to opt for. This will ensure that children do not have to pay the kind of capitation fee they are paying currently. The reason and the rationale for the capitation fee is that there are very few good institutions. Everybody's parents want admission into these institutions. Educational institutions take advantage of this mismatch between demand and supply. So we need to expand this sector. Allow the private sector to come in because no Government can set up 1000 universities and 50,000 colleges. We neither have the finances nor do we have the administrative wherewithal.  But we also want to make sure that we move away from the 'licence raj'. In the current system people inspect institutions and declare them fit/ unfit institutions. We must move away from this inspection raj. And so under the Education Malpractices Bill, I have a system under which we are not going to inspect any educational institution. At the beginning of the academic year, the educational institution has to placein the public domain, on their website details of its infrastructure, what is the fees they are going to charge, what is the faculty it has. (There are instances where institutions rent faculty. During inspection institutions would rent faculty from somewhere else and show it as permanent faculty). Under the new proposal the institutions have to disclose comprehensive details on its website. It discloses faculty, infrastructure, fees and the services that it has on its website.  The institution has to disclose everything about itself on its website. This pool of information is then housed in the Ministry of Human Resources Development. If and when we find that any fact in that website is wrong, we shall prosecute. No inspection raj. So it depends on the institution. If it wants to tell the truth and save itself from prosecution, it must disclose all the facts. And we are going to make capitation fee, a cognizable offence. That is the second legislation.  Along with the Educational Tribunals Bill and the Bill to Prohibit Educational Malpractices, the third legislation that will be put in place to monitor the system of Higher Education is the Bill on Mandatory Accreditation.  This deals with quality because education is not just about reading and writing, it is, about quality. And quality impacts on national wealth and therefore under the Accreditation Bill every educational institution has to be mandatorily accredited. It is quality that has to be ensured. At the moment, seeking accreditation is voluntary. Once the Act comes into force then there will be separate agencies for accreditation that will accredit institutions for quality.  This will allow children to know which institution they are getting admission into, what is the quality of that institution, and all the facts about that institution. Ultimately, I want a situation in which my child sitting at home through his computer can access every institution, can actually walk through every institution. It is easy through technology. All we need to do is combine aerial photography with satellite imagery and software. I can make you walk through an institution, so that the child can choose where he wants to be. That's the kind of future that you have in the field of education.  And then the next legislative move is the Foreign Education Provider's Bill. The reason why we want the Foreign Education Provider's Bill is that willy-nilly education is not about living in silos. It's about collaboration. It is about expanding your mind.  One day Nani was arguing a case in the Supreme Court. He was talking about education and he said "steel plants produce steel". This was a newsprint case. He said, steel plants produce steel but newsprint produces ideas, and therefore he defended the freedom of newsprint because it is directly related to freedom of speech. This argument is very important and it is what prompts our Foreign Education Provider's Bill. With the support of appropriate science and technology, we aim to give access and allow foreign institutions to invest in India. Remember I gave you the figure of 45 million but you know I forgot about the balance from the estimated 220 million children in India. If 45 million reach university, what happens to the balance? We need to think about them as well.  Not all of them go to university, or become doctors and engineers. Neither all of them will get doctorates or opt for post doctoral research. These are children who want a job. A child on completing class 12 may not want to go to university, but may want a job.  How do you make your education system such that the child can have access to a job? What are we going to do for these children? Do we have an answer to their situation?  The National Vocational Qualification Framework, proposed to be announced by May 2011, is an answer I have for this situation. We are going to offer vocational courses from class IX, X, XI and XII. Now what does 'vocational' include? To name a few prominent vocational courses that are thrust areas for our economy: Hospitality, Para legal, para medics, lab assistants, music (which I consider as a vocation), tourism, simple electrician, mechanics and several such hands-on, skill oriented courses. In fact, we have started planning for structuring these courses with the help of industry. I have initiated a dialogue with industry because these courses can be made meaningful only with their collaboration.  I had a meeting with the automobile sector the other day. And I discussed the proposal, to introduce, automobile engineering in the school CBSE system. I also called all State Chief Ministers and explained this proposal to them. They are very happy about it and they want to move forward with its implementation. We had a three to four hours long meeting with the automobile sector. We realized that there are about 150 vocational courses that can be taught just in the automobile sector. Automobile technology is moving to electronics now. Previously it was mechanical engineers who would deal with automobiles. In the technologies of tomorrow everything will be telemetric. The industry will need electronic engineers. We need to see where the industry is moving and how to ensure that the education system actually relates itself to the industry. This will ensure that industry gets the people they want.  Similarly, other than automobiles, we are going to prepare diverse vocational training courses in various fields.  We had a talk with the telecom sector. And there are about hundred potential vocational training courses appropriate for this sector.  We proposed a meeting with the construction sector. The Prime Minister said recently, that one trillion dollars would be invested in the construction sector in the next five years. You can imagine the kind of expertise that will be required by the construction sector in the years to come. The education system must be geared to make that expertise ready. This is my vision for the children who opt out of the university track of higher education and want jobs instead.  Some of the courses have already started. For example for the city of Mumbai, Bollywood is a great place to begin executing this vision. Hence, I called Mr. Subhash Ghai and had a dialogue with him. The outcome of which are courses in animation, which are now offered in about 26 to 29 schools in this country. A lot of people in Bollywood need young children who know about animation. And it is like playing with computers which young children are adept at. We have started such courses so that children, who do not want to go in for formal higher education can be endowed with skills to be directly employed by Bollywood. While in a limited way such options do exist at present, what is unique of my vision is that children will have flexibility to change tracks as they go on in life. For example, a student completing vocational education may after a few years want to re-enter academic life.  So if he wants to do a doctorate/ go for higher studies we are going to have systems in place by which he can move from school to polytechnic and from polytechnic to university  if he so wants, so that he can get additional credit. Supposing a person getting a CBSE academic degree wants to do vocational course, he will do an additional 'X' number of hours in a particular vocation and can move to vocational and if he wants to come back to academics, within the university system he should have the flexibility to do so.  This is what we are going to do, to take care of the balance children, who are not opting for higher education immediately on completing their school/ XII grade. We envisage that most of the investment by the Foreign Education Providers will come in such skill development. If you look at the world in 2050 what is the scenario? The scenario is that lndia by 2050 will be the most populated country in the world. That is frightening but that is the reality. There is a demographic decline in almost all of Europe, Japan, Australia and Canada. Do you know that Quebec has recently passed a law that anybody who comes to do post graduation in Quebec can get citizenship? It's economics. They don't have the workforce. We have the workforce and we can supply that workforce not just for our own national needs but supply it for the global community as well. Therefore this is a great opportunity for us. Foreign investors are interested in investing in vocational education in lndia because they are very keen to get the workforce that they don't have. I know for a fact that lot of foreign universities want to come to lndia and are already collaborating with Indian universities. We benefit from such collaboration by getting access to best global practices and this will improve the quality of our own university system. This is the global scenario in which we live. In this scenario, in the ultimate analysis, we as a nation have to move forward. This I reiterate, cannot happen unless we invest in knowledge. This is the philosophy of the UPA Government in the field of education. In the heart of this philosophy is the belief that every child in this country is important. I I remember when Nani was a young child and he had a bowl of almonds, and his father told him, don't forget the orphan next door. He, in his generosity, gave the entire bowl to the orphan. It is time for us to have the bowl of almonds to give it to those who don't have it. Education is the only way forward._Last week’s musing: [WHAT MAKES JAPAN TICK: SOME LESSONS FOR INDIA](https://indianliberals.in/content/what-makes-japan-tick-some-lessons-for-india/)_ --- ## [Musing] The Essence of Democracy URL: https://indianliberals.in/musings/the-essence-of-democracy-3/ ### Body The following text was authored by Indian Parliamentarian and liberal thinker, Minoo Masani. It was originally published by the Harold Laski Institute of Political Science, Ahmedabad in March 1989. In the essay, Masani discusses several necessary conditions of a liberal democracy. In a Parliamentary Democracy, the role of a speaker is crucial. A good start to a young Democracy on the achievement of Independence was given by Mr G.V. Mavlankar, who was an excellent Speaker of the Lok Sabha, and set a good example of independence from all political parties by his fair play and keeping the Prime Minister of the day in his place. Unfortunately, there has been a continuing fall in the behaviour of those occupying the Speaker’s office since the prevailing sycophancy has engulfed even the Speaker’s office, with a corresponding lack of respect for the chair shown by the Member of Parliament. Many years ago, Mr. E.F.M. Durbin, a junior member in a Labour Government in Britain, published a book entitled _The Politics of Democratic Socialism._ In one of his chapters Mr. Durbin, after rejecting various tests of a real democracy, came to the conclusion that where there was no effective opposition there was no democracy. According to him, the right to dissent is useless unless it is actually allowed to be exercised. **MAJORITY RULE**** ** Some people would reply that democracy means majority rule. How wrong they are! Stalin and Hitler after coming to power, repeatedly won elections by huge majorities which were presumably bogus, and then carried on ruthlessly oppressive and tyrannical regime. The dictators of the Black African countries, who are often ferocious autocrats, also claim to have been elected by a majority. As the anthropologist, Elspeth Huxley, has put it: “One man, on vote, once”. Mr. R. Venkataraman, President of our Republic, mentioned this in his Inaugural Address as President on July 25, 1987 that 'most of the newly independent countries which adopted a democratic form of government have lapsed into dictatorships'. There are countries covered by Mr. Venkatraman’s statement in Asia and Latin America which also qualify along with Africa.  The concept of majority rule is a particularly pernicious one in countries which are not of a homogenous nature ethnically, linguistically or by religion. Examples of such countries are the Union of South Africa, Fiji, Sri Lanka, and, of course, our own country. In these countries there is a built-in permanent majority based on race, language or religion. Majority rule in such cases would mean the tyranny of the majority community over the minority community or communities. In South Africa the result of "one man one vote" majority rule would be the domination of the Blacks over the Whites and the coloured peoples, including Indians who are all minorities. In Fiji it would mean the domination of the Indian immigrants over the original inhabitants there. In Sri Lanka it would mean the domination of Sinhalese over Tamils and in India it would mean the domination of the Hindus over the Muslims, Sikhs, Christians and other minorities. It is quite obvious, therefore, that majority rule is not democracy and can often be undemocratic. Having disposed of this myth, let us now turn to the various factors that make a real democracy.  **LIMITED GOVERNMENT** It is quite clear that a government which is not limited to essential purposes but dominates economic, educational, literary and artistic life of the country cannot be a democratic one. Where this happens, an effective opposition ceases to be possible, and Mr. Durbin's test cannot be fulfilled.  This has been proved by the case of the Soviet Union, Communist China and others in our time.  Italian theorist Benedetto Croce was able to foresee this when he wrote in the last quarter of the 19th century that where the Government or the State tends to become the only employer and the only landlord, that society ceases to be democratic, because there would be no one left to oppose except at great peril. That is why he argued that in a free society there have to be "autonomous social forces " such as the farmer owning his land, the industrialist owning his factory or business, the shopkeeper owning his shop and the professional man like the lawyer or doctor or consultant who works for himself. Later developments have proved how right Croce was.  In my opinion, India is in the border line between a limited government and a total one because of excessive controls, destruction of the balance of the mixed economy, control of the dominating heights of the economy, as Jawaharlal Nehru grandiloquently described it, through giant industrial units, the control of the State over universities, the absence of economic freedom, the institution of _Sahitya Academics_ and other government institutions which have undermined the independence of writers, artists and other members of the intelligentsia. Writing on 5th January 1969 in the _Times of India_, Mr. Nirad Choudhary asked :  “Where do contemporary Indian writers stand in the light of these ideals ? I cannot say they are not involved in current affairs. On the contrary, I would assert they are only too much involved in them, which means that they are wrongly involved. Most of them are doing their best to have a share of the loot of public money that has become the vocation of the upper middle class since Independence. All of them are enlisting or trying to enlist in the horde of _Pindaris _that the present ruling order of India is. The writers in this army will not indeed be _Amir Khans or Chittus _but they aspire to become quite prosperous thugs."  There have been repeated attempts to destroy the freedom of the press. All these have brought India to the position where it is possible to say that the so-called 'socialist pattern' and democracy cannot co-exist for long. This already happened for a brief period of two years after 1975, and could easily happen again for ' a longer duration. Therefore it is that the liberal insists that unless Government is limited and kept in its proper boundaries, it cannot be called a democratic one. Mahatma Gandhi said : "That Government is best which governs the least."  **SHARING OF POWER** Democracy has been defined as government of the people, for the people, and by the people, the last of these being the most important of the three. The sharing of power has to be both horizontal and vertical. It should be horizontal in the sense that minority groups have a right to participate in the government of the day along with the majority. It is not enough for members of the minority to be condescendingly included in the cabinet as are Muslims, Sikhs and others in India, and, Tamils and Muslims in Sri Lanka, at the 'meherbani' of the majority or of the White 'Uncle Toms' whom the Communist- dominated African National Congress would perhaps include in their new government, if ever they are allowed to come to power. What is necessary is for the Tamils and Muslims in Sri Lanka to be represented by those chosen by them. That Muslims and Sikhs in India should similarly have the right to choose their own members of the cabinet and that the Whites in a Black dominated country should have ministers of their own choice. This has been ensured only by the Swiss Constitution to which I shall refer later.  Vertical participation is equally important. The infrastructure of a democracy lies with grassroots vigilance and initiative which keeps political parties and governments on the straight and narrow path. Where such grass- roots vigilance and initiative are weak as in India today, political parties float on top without any infrastructure, without internal democracy, and with "Kangaroo courts" which 'expel' members without even asking them to show cause.  The element of grassroots vigilance is not one that can be created by law. It is primarily one that is dependent on home and school education and training of the young in the right to think for themselves, training in the right to stand up to authority-whether domestic, industrial or political, when the conscience demands it. Gandhiji defined a real _satyagrahi _as one who defies a law which he thinks is immoral even if he is in a minority of one, provided he is prepared to pay the price for his act. 111other words, democracy is contingent on the existence of independent, aware and courageous citizens who are prepared to speak up for their rights and do not always count the cost. As the poet said: "They are slaves who dare not be In the right with two or three". The main enemies of such initiative are the cult of personality, misguided loyalty of party “high command”, sycophancy which abounds in the capital and other parts of India and the presence of a controlled economy where the permit-license or quota is a precondition to economic survival. Here we are on very weak ground, The concept of good and active citizenship is not well understood in India, The result is “too much politics, too little citizenship”. We need much more grassroots vigilance and action. It is not periodic five-year elections that determine the quality of democracy but the day-to-day intervention of the ordinary citizen in the affairs of the state. Here we are very weak, and unless the quality and activity of our citizenship and becomes much more democratic, our political parties will continue to float on top and be utterly irresponsible as they are today. It is important that the people of India be educated on this subject. The Leslie Sawhny Programme, with which I am associated and the Harold Laski Institute of Political Science at Ahmedabad, are both examples of the kind of activity that may result in making India a real democracy. **RESERVATION** There remains the problem of ensuring participation and sharing in power by the backward classes in society who are unable to pull their full weight along with the rest of society. Such are the Schedules Castes (_Harijans_), the Scheduled Tribes (_Adivasis_) and the backward classes. As a remedy, but not to last more than ten years, our Constitution provided for reservation of seats in legislatures and jobs in government service for these classes. Unfortunately, this device has become a habit, like a pair of crutches. Every ten years Parliament prolongs its life because by now the spokesmen of the poorest classes have become a vested interest. Also, it provides one of the main points of corruption in our public life. The politicians, therefore, go along with this easy way of professing to provide social justice. This matter is dealt with in detail by an excellent report of a Seminar on Reservations organised in Bombay in may 1985 by the Indian Liberal Group and the Freedom First Foundation. I believe that time has come for Reservations to be terminated and if that is not feasible, at least to be phased out expeditiously. Both the U.S. Supreme Court in Bakke’s case, and the Supreme Court in our country in the case of the State of Kerala _vs _Thomas, have arrived at rather similar judgements taking the line that affirmative action in favour of these classes has to be both temporary and moderate. Any discrimination that is permanent or excessive should be struck down as _ultra vires _of the Constitution. **PROPORTIONAL REPRESENTATION** A much more civilised way by which minorities including the backward elements of society can be ensured fair representation in these legislature in some form of Proportional Representation. The only democratic countries in which the rule of race course, _viz._ “First past the post” is practised, are the U.K. and the U.S.A. the recent re-election of Mrs. Margaret Thatcher, however, welcome it might be on political grounds, illustrates the archaic nature of this system, since she obtained only a minority of votes cast but a big majority in Parliament as a result of gross under-representation of the Alliance of Social Democrats and Liberals, who polled a large proportion of votes cast but succeeded in getting only a miserable number of seats in Parliament. The Anglo-Saxon system involves a waste of millions of votes which remain unrepresented in parliament, Votes cast in the country do not carry the same weight, since the votes cast for some party carry more weight than those cast for other parties. Even the principle of “one man, one vote” is thus violated, since one man does not get one vote. Some get more than a vote and yet others have no effective vote at all. In India, which has followed the archaic British system since independence, not once has the Congress Party secured  majority of the votes cast. Yet in every Parliament including the present, the Congress Party has been a huge majority which is entirely bogus and does not reflect the will of the people. If, therefore, justice has to be done to the voter and particularly to minorities, the acceptance of some form of proportional representation is a must. With an illiterate electorate like ours, the Single Transferable Vote is not feasible. Some form of the List System such as is prevalent in West Germany, Israel and other countries is worth considering. **SEPARATION OF POWERS** Where power is allowed to be centralised in a few hands, democracy shrinks. That is why, in all written democratic constitutions, there is a provision for a division of powers or functions. The separation of powers in the U.S. Constitution between the President or the Administration, Congress and the Supreme Court is a good example of three independent authorities functioning side by side and often clashing with one another. Even where there is a Parliamentary form of government, as in France after Gaulle amended the Constitution, and in Sri Lanka after Mr. Jayewardene amended it, though there is a Prime Minister responsible to Parliament, there is also a President, who acts as a check on the Prime Minister and the Cabinet. It is not, therefore, true that in every Parliamentary Democracy the Prime Minister and Cabinet can overrule the President. Quite the contrary. The Constitution of the Republic of India as it emerged from the Constituent Assembly, of which I was proud to be a member, did precisely this by curbing the powers of the Prime Minister and Cabinet of the day through: - a)     The President - b)    The Supreme Court - c)     The Civil Service - d)    The States - e)     The Fundamental Rights of the citizen Unfortunately, most of these checks have been eroded by those in office in Delhi through their lust for centralising power in their own hands. Prime Minister Indira Gandhi was able, with the bogus majority in Parliament that she enjoyed, even to amend the Constitution and truncate the Prerogatives of President and the Fundamental Rights of the citizen. **THE RULE OF LAW** An essential precondition of democracy is what the British called in Britain the Rule of Law and in the USA ‘due process of law’. This protects the citizen from arbitrary action on the part of government of the day and gives him the protection of the courts in case the law is violated. Obviously, when the courts are not independent and there is no Rule of Law, rule by parliamentary majority can be highly tyrannical and undemocratic.  **INDIVIDUAL LIBERTY** “The state is made for the individual and not the individual for the State”. This is a basic principle of liberal democracy. The rights of the individual, therefore, become the supreme consideration. As Lord Action has put it, liberty is the supreme good. Hence, freedom must come first. In countries like the USA, India and several others, the Fundamental Rights of the citizen are guaranteed under a written constitution or what is often called ‘A Bill of Rights”. Britain is one of the few real democracies which have no written constitution or Bill of Rights, and technically Parliament is sovereign and can pass any law it likes. However, as Dicey points out, if the House of Commons were to pass a law that all blue-eyed babies should be put to death, the people will throw the Parliament out the following day! This is what he calls the ‘external check’ which exists in Britain which has no written Constitution. Another old saying which draws attention to this priority is the Biblical one which says: “Render unto Caesar what is Caesar’s and unto God what is God’s”. In our context, the individual’s conscience is his god. **FREEDOM OF THE PRESS** What applies to the individual’s right to dissent applies with even greater force to the Press. Freedom of the Press, is of course, an essential part of a free society. **POLYGLOT SOCIETIES** In the case of multi-lingual, multi-ethnic or multi-religious societies, the importance of these safeguards becomes more marked. Majority rule can have no meaning where there is a permanent majority of those bound together by a common race, common religion or common language. It is not democratic for such a majority to impose its will on minorities. Thus for instance, in Sri Lanka the nomination by Sinhalese of Tamil and Muslim minorities is not democratic. In India the nomination by Hindus of Sikhs, Muslims, Christians and others is not democratic, and in South Africa, the nomination by Blacks of Whites would be undemocratic. It is not enough in such cases that members of minorities are included in governments or cabinets. In Sri Lanka and India as of today, such minority membership is only at the behest or ‘_meherbani_’ of the majority. It is important for ministers belonging to minorities to be elected by their own kind through proportional representation. The only country where this is being practised is Switzerland owing to the existence of three groups- German Swiss, French Swiss and Italian Swiss, and of cantons which are jealous of their independence. The Government of Switzerland is run by a Council which is elected by proportional representation by Members of Parliament who, in turn, are themselves elected to Parliament by proportional representation. This means a National Government or a permanent coalition of sizable linguistic groups and political parties. The Swiss Constitution goes further and provides that the position of the Chairman of the Executive or the Prime Minister shall rotate among the members. It also provides for maximum autonomy to the cantons which are almost sovereign and have minimum government. Switzerland is among the least but the best administered countries of the world. Politics counts for little. Production counts for a lot. It is customary for a Swiss Cabinet Minister to call at the office of a Bank President, and not _vice-versa_. I have only briefly outlined my views on what constitutes the essence of democracy. _Previous musing: [FORTY-THREE YEARS OF INDEPENDENCE](https://indianliberals.in/content/forty-three-years-of-independence-2/)_ --- ## [Musing] The Evils of Child Marriage URL: https://indianliberals.in/musings/the-evils-of-child-marriage-by-ishwar-chandra-vidyasagar/ ### Body _Originally published in 1850 in Calcutta-based Bengali language periodical Sarva Subhakari, Ishwar Chandra Vidyasagar established numerous girls' schools, wrote many textbooks in addition to regular schools to realize the noble intention of education. And he used his writing for social reform. 'The fault of child marriage' is one such social consciousness work of his. In the article, Vidyasagar discusses the causes, ill effects, and other related issues of child marriage. Every chapter of the composition is the identity of his progressive mentality._ _As was later established by literary historians (Gopal Halder, 1972), this happens to be the very first among a multitude of articles and monographs that Ishwar Chandra Vidyasagar (1820-1891) had penned in the course of his life as a tireless and pioneering social reformer of Bengal and India. _ _You can read the original, unabridged version in __Bengali here: [Evils of Child Marriage](https://indianliberals.in/wp-content/uploads/2023/07/Evils-of-Child-Marriage.pdf)_ Marrying an 8-year-old daughter is a holy act of _gauri-daan_ (marrying the daughter before her first period) for her parents; giving away their 9-year-old daughter is as precious as their prized possession of land; arranging a groom for their 10-year-old daughter will lead the parents to the doorway of heaven…and all kinds of imagination, interpretation of religious texts, living in a delusional dream without much consideration of reality and the after-effects of one's actions, has led this country's humanity to normalize everything that is about child-marriage. Who can feign ignorance of the evils that these mindless acts have unleashed? The writers of such Shastra scriptures have not only sought to establish child marriage. They have also laid down rigid dicta to prevent waiting until post-pubescence when it comes to marrying girl-children off. Thus, if a girl is still unmarried and at her paternal home when she begins to menstruate, it is considered a grave sin not only of the parents but also of seven generations of their predecessors – who all go to hell because of such transgression – as the scriptures lay down. In such a situation, both the parents become 'impure,' have to perform penance all their lives, and are to be humiliated, ostracized, and considered 'untouchable' to such extent that they cannot be allowed to have food sitting beside other people of the society. Thus, A girl who turns into a woman without getting married is considered a source of evil, shame, and disgrace for her parents and the community.   Even if anger against this swells up in the heart of some suitable person, such a person can hardly speak out or take action in opposition to such rigidly enforced social diktat. Despite all earnestness, such thoughts rise like streaks of lightning, merely to fade to the timid darkness within. Tied to such widely prevalent and thoroughly enforced codes of conduct mandated by the Shastrascriptures, we have been witnessing and suffering from the harm of child marriages for ages. Boys and girls get married before ideas of love develop in their minds; thus get denied and, in turn, divest themselves of the sweet fruit of marriage that love is. Therefore, families live through discord and disaffection instead of living in harmony with love. Children born and raised in such families fail to receive a harmonious upbringing and grow up in harsh and rugged family environments. Newly wedded boys and girls keep themselves busy learning words of seduction and try all the time to learn and practice the arts of titillating, arousing, and entertaining each other sexually, and such becomes the sole source and purpose of their childhood and adolescence. As a result, they get denied all additional education necessary for all humans to develop themselves as wholesome beings. With their minds thus deprived of opportunities to grow, they turn into beings with human forms but empty of all humanity and human qualities necessary to stake claims to the human identity. The root of all happiness is physical health. Even that faces severe detriment from the practice of child marriages. Thus, undoubtedly, this harmful custom of child marriages is also the primary reason behind our country's abysmal and lamentable condition of physical and mental capacities compared to likewise capabilities and faculties of people from other human races. Alas! How long must we suffer till providence rescues us from such plight? How long must we wait? In any case, a movement has arisen on this issue, which is a good thing to happen. Perhaps, one blessed day, this custom shall be abolished, and the people of this country can find relief and respite. These days, much is being written and read about this and other harmful habits affecting society. Thus, undoubtedly, positive steps shall one day be taken toward ameliorating and abandoning such detrimental customs. If the earth is dug long enough, water is bound to come up. If two pieces of wood are rubbed against one another long enough, sparks are bound to fly, and fire will begin burning. Likewise, if the truth is sought for long enough, the same cannot stay entrapped forever within the nets woven by falsities. Such thoughts have played in my mind for long. So, I embark upon this voyage of writing my two bits on the issue of child marriages. The creator has created the male and female species among almost all creatures on the earth. Among all such animals, the female and the male unite to beget, that is, to create progeny. In this way, new life is born, and the species survives and sustains itself. Pertinently, among human beings, one female and one male, acceding to each other's requests, given to each other's love and the good rules of nature and instincts, unite to give birth to new human beings, thereby preserving the human order. It is difficult to say how long the human race has come to be since the world's creation. It isn't easy to ascertain how long since the arrival of the human race that the custom of marriage evolved. However, it can be stated without doubt that when clear ideas of matter, property, and ownership were conceived when political notions of power and rule began to rear their strong heads when concepts of distinction between the self and the other evolved along with those of conscience and conscientiousness, and, when it was realized by many human beings that, without affection, empathy, kindness, mercy, and pride, it is impossible to continue with the journey as human beings in the human community and society, that marriage becomes one of the prime causes behind origination and development of such sentiments – the concepts of wedding and matrimony evolved. The marriage and married life system has, ever since, evolved and made itself better and more humane in all countries. However, in our country, far from developing into better conditions, the system of weddings has worsened and fallen such that, through veritable discretion and consideration, it can be realized that the present rules of marriage that society binds us to have been the reasons behind the rueful plight of this country today. Here, parents of daughters seek to marry their children off at an early age. Either they search for the groom by themselves or through others. The only perceived quality they seek as 'ideal' in the groom is being high-born, born in a high-caste family. If this condition is satisfied, then it does not matter if the soon-to-be groom is illiterate or has not yet attained any age of maturity that would, in more hopeful circumstances, be deemed ideally suited for marriage. Thus, such parents pay no heed to their daughter's happiness or otherwise in her future, that is, married life. Marital bliss is one of the primary fountainheads of joy in this human world. When such pleasure and happiness are impeded, the married couple spends their marital and familial life in utter sorrow and dismay. Alas, for such is a matter of much sadness! The happiness of the husband on the wife depends on how much love one has for the other. The marital bond becomes happy if both are good, kind and of firm character. If such qualities and virtues are amiss, both lead lives drowned in sorrow. If no consent from the woman, the girl, is deemed necessary, if she is to give herself to her husband's sexual needs irrespective of his character, inconsequential to how much love he has and expresses towards her, then is there any scope of happiness for such a couple in their marital life? The roots of love lie in the unity of minds. Such agreement depends on many factors, such as age, situation, looks, virtues, character, external and internal volitions, etc. In this country, before their weddings, boys, and girls do not get to know anything about each other's intentions, hearts, characters, or material conditions. They are denied all opportunities to get to know one another in person and befriend or converse with others. They are even denied all chances of meeting or looking at one another. Instead, it is their parent's penchant and volition, dependant on the words of apathetic socially sanctioned matchmaker – _'Ghatak'_ – determine the staunch, inalienable, and absolute laws of matrimonial bonding that are to bind them for their lives in entirety. This is why, in our country, we find no love between the husband and the wife in marriage. The husband merely performs his social functions as the money earner. The wife stays subjugated to the social processes that necessitate her performance as the one who maintains & upkeeps the domestic households. Wise practitioners of the medical sciences, who were well versed with the theories, practices, and philosophies surrounding the human body, have said that a child, conceived and born when its parents are yet to attain the complete physical maturities that can develop only after such human beings reach a certain age, is prone die in infancy. Even if such a child does not die at childbirth, even if the child grows up till a certain age, such a child is often found to be of infirm health and natural dispositions. Such a child suffers much from physical ailments and afflictions and stays incapable of many human functions. Soon, as is seen quite often, even such a child falls into the throes of death, despite having lived for some years. Marriage and marital relations have evolved to ensure and sustain new lives, and generations keep coming up so that ns survive and function as societies. The custom of child marriage, the way it has evolved in this country by contributing to the ever-burgeoning rates of infant deaths, has ensured that the primary purpose and function of unions and conjugality gets and stays severely hampered. The people of our country are often seen as the meekest, cowardly, and feeble mental and physical dispositions compared with those from all the other places and races of the world. From a very early age, the people from our country become incapable of and inept at all forms of toil, involving agility and hardship. Listless weariness sets in. There might be multiple inter-connected reasons behind this. However, with a deep and insightful search, it can be established that the widespread prevalence of child marriages is one of the definitive causal factors behind such lamentable conditions. If the parents are not strong and do not possess firm, stable physical dispositions, they can't conceive and beget strong children. Everyone agrees that weak causes cannot lead to substantial effects. For instance, if we plant good-quality seeds in lands of inferior quality, we cannot harvest good crops. The harvest is terrible even when the field has good, fertile soil, but the seeds are lousy. Likewise, children begotten when the bodies of their parents have still not developed all functions involving childbirth to their full extent of maturity cannot have nature on their side. The situation was not like this in the olden days. It is not so that India – Bharatvarsha – had a shortage of heroes and brave people. Scriptures record annals of children born in the Kshatriya and, at times, even in the Brahmin caste, grew up to have their glorious deeds of valor, as put on display, often through adept skills in warfare, remembered in history. Histories embedded into mythic tales establish that once there were so many heroes, that is, Veer-s, in India, it had held the epithet Veer Prasavini – the Begetter of Heroes. Even today, in countries that lie in the western climes of the Indian subcontinent, we see many people who, through their deeds, actions, and vocations, uphold the truths behind such historically documented gallantry of their ancestors. And yet, Hindu people born in these more eastern parts of the same subcontinent have fallen to such feeble constitutions and dispositions. Is the widespread prevalence of the custom of child marriages not one of the leading causes behind such dereliction? In the olden days, people from all castes and races – _jaatis_ – would marry only after attaining maturity. The _Shastra_ scriptures speak of eight types of marriages. However, the most prevalent were four customs – _Gandharva, Asura, Rakshasa,_ and _Paishach_. Other than these, the custom of _swayamvara_ was also general, by which brides would get to choose and select a suitable groom among a host of prospective ones who would arrive at the pre-determined place at an agreed-upon time for the ritual to commence. None of these types and forms of marriages would happen until both the bride and the grown had attained ages of maturity. Further investigations make us realize that, in the places that lie more towards the western parts of the subcontinent, even to date, no wedding happens until the bride and the groom have fully grown up. Children born & brought up by such grown-up parents show no mental or physical infirmity. They grow up to become mighty and courageous. This is proved by the fact that, when denied opportunities to take up any alternative mode of employment, they take up professions as soldiers of royal forces or as gatekeepers and security guards of wealthy people. On the other hand, people from Bengal would instead and much more readily take up far more hideous and repulsive vocations than undertake tasks that necessitate courage and strength. This is why we see no Bengali person in the royal armies. It is said that the people from Utkala – Odisha – also possess very feeble physical and mental strength, just like the Bengalis. Even Bengali people denigrate people from the Utkala countries for their perceived lack of bravery and courage. Unlike in the western provinces of the subcontinent, the custom of child marriages akin to Bengal is also very much present in Odisha. The people from Bengal and Odisha – where child marriages are rampant – are perceived as weak and cowardly. On the other hand, those from the more western parts of the subcontinent, where such a heinous custom is not encouraged in society, are considered firm and courageous. Can we still not see how people born in places where child marriages are an everyday, happening reality are far more feeble and of weak bearings and dispositions compared to those born in areas where the same are not in practice? Had women's education been prevalent in our country, children could have begun to learn many things and receive instruction from their mothers from a very tender age. Children are closest to their mothers during their earliest years. During that phase of their lives, children do not feel as close with their fathers or other relatives as they do with their mothers. During such ages, sweet words spoken with love stir deep feelings and emotions in children; words of moral advice do not resonate as much. So, children, during their most tender ages, feel happier when they are with their mothers and other women in the family and society, as compared to when they are with men. So, children who begin to hear words learning and education spoken with kind love and fondness as soon as they quit drinking their mothers' milk become well educated at a very young age. Mothers' advice can make deep-seated impacts on the minds of young children. No other teacher's advice can ever have even a fraction of such an impact on them. In Europe, women's education is widespread. There, women can bestow educational advice to their children. Thus, from a very tender age, European children become well-educated and civil in disposition. Such benefits can never happen to our country unless the prevalence of child marriages is not curbed and the same is not abolished. We have learned that some people from educated families seek to educate their girl-children on par with their boy-children from an early age. However, when such girls even know the alphabet, the hour for their nuptials arrives. Their education comes to a halt. Afterward, such girls must go to their in-laws' place and stay there. Therein, they have to make themselves adept at homemaking skills such as caring for their inlaws, sweeping and cleaning the house, preparing the beds for sleeping, cooking and serving food, and other domestic chores. Every day, they have to make themselves acquainted with pots, pipkins, kettles, ladles, spoons, crockery, and cutlery; they have to become skilled at using the same to perform their social functions as housewives. Thus, before long, whatever little education they receive at their parental abodes before their weddings wither away from their minds. Had the parents of girls in this country not been so obedient to these custom of marrying their daughters off even before their education has barely begun, such daughters could have learned more, could have imparted better advice to their children, and could have turned such children into educated beings from a very young age. So, we appeal to the learned people of our civil society today – if you wish to work on the spreading of women's education, please also endeavor to eradicate the custom of child marriages – for if women are married off at such tender ages as they are today, it is impossible to ensure education for them. Marrying at a tender age can only disturb and distract us. This is because childhood and adolescence – the primary period for receiving an education – get spent in the sensual fun, frolic, and merriment that marital life brings. Then, before we are capable of earning, we become parents of children. As a result, we become desperate to solicit money from whichever source possible. The whole world seems empty to a householder faced with abject poverty. Even dishonest or criminal works become very much feasible and doable for them. The tendency to partake in such loathsome work rises in such conditions. We have even seen this in many instances that people of otherwise honest predispositions, when faced with situations of pennilessness and when surrounded by people in their families and society who are incapable of earning honest livings or partaking in natural livelihoods, turn to commit heinous works all for the sake of some money. Sometimes they lead their lives with their father's money and properties; sometimes, they mooch off from their brothers; sometimes, they live off their relatives. Such parasitic existence leads to them being and feeling humiliated and insulted at every step, and their lives wither away in such disgraceful a manner as is unbefitting of any productive member of the human race. The custom and widespread prevalence of child marriages lies at the root of such indignant life and living for so many. Is it thus not for the sake of society's broader, bigger, and wholesome benefit that this evil custom is discarded forthwith? Some people argue in favor of child marriages – stating that if the custom is abolished, young boys and girls will take to licentious activities from a very young age. This argument cannot be discarded in its entirety. However, it is clear that if childhood and adolescence are spent receiving worthwhile education, such young men and women can't turn to such prurience because instruction ensures that such base and vile intentions do not take root in their sensitive minds. Through education, we learn what is right and wrong – what brings benefit and what causes harm – we know what honest work is and what constitutes dishonesty. Thus, education strengthens the moral and conscientious foundations of our characters. Therefore, if we discern the role of education in character building with logic and reason, such arguments about child marriages keeping young men and women at bay from taking to lustful, passionate, and debased lifestyles cannot arise. If we approach the issue from the perspective of mortality rates, we discern that the chances of human beings who are not senile dying are the highest between the ages of zero and twenty. Thus, if the custom of child marriages is abolished, the number of widows will also decrease. Even parents of girls will not have to worry about their daughters becoming widows at a tender age in such situations. Who is unaware of the austere penances that the scriptures and customs of this country impose on widows? The lives of widows are weighed down by immense sadness. This strange human world is a forest devoid of human beings for a widowed woman. All her happiness ends with the life of her husband. With the grief of having to lose her husband arrive all other sorrows. Her penances include fasting without water on regular occasions. If, during the performance of such penances, she finds herself in the throes of death out of thirst or illness, our heartless societal customs permit not for a single drop of water to be poured on her dried and shriveled up tongue, nor for a single morsel of medicine to be given to her. Child marriages increase the chances of even young girls becoming widows while they are still young and increase the chances of them having to lead their lives at the crushing anvil of woe and penitence. Whose plight can be as lamentable as theirs are? Such vows and penances bring pain, which is unbearable even for grown-up people. Can there be anything as cruel as making young women, even ill-fated little girls, go through such harsh pain and suffering - something that is so widespread in our society? Child marriages, by increasing the risk of the girl child becoming a widow while still at a tender age, thus hurls such a girl child before the grinding wheels of the juggernaut of social and scripture-ordained customs – wherein she has to spend her entire life through such burning pain and suffering. Words do not suffice to narrate the full extent and intensity of this suffering. We have witnessed with our own eyes how, on nights of such fasting and repentance, hundreds of luck-bereft young girls – widowed at a tender age – become half-dead with thirst, their tongues and entire bodies dry up, all strength departs their limbs, and yet, nobody shows the courage to break such rigidly clamped social and scriptural norms, to give them, out of sheer empathy if nothing else, a drop of water to drink or a little bit of food to eat. Such customs become so firmly entrenched even in the minds of the young widows who fast and perform such severe penances that, even when they reach the very doors of death, even when life becomes all set to depart from their persons, they do not seek to drink a drop of water – even they do not dare to breach the stern rules that hold our society in three today. It indeed is extreme injustice that, when little girls should have grown up at their parental homes and should have found environments suited to the natural development of their minds and bodies – they are sacrificed at the altar of marriage, thrown into households of people who were strangers to them until they married into those families, into such vast an ocean of sadness as this woe of leading the life of a widow is in this society. As it can easily be discerned, families where widowed women live, fear the risk of grave sins being committed. Such widows, driven by the bodily instincts of nature, can engage in secretive, passionate relationships. If they get impregnated in the process, the heinous sin of feticide can also cast its long malevolent shadow on such households. All in all, the arrival of widowhood at young and tender ages is directly linked to the unjust atrocity of the custom of child marriages. So, we appeal before all the civil people of this country to unite and work towards ensuring that this inequity that child marriages are wiped away from the face of society in its entirety. The thoughts and arguments we publish today against the evil of child marriages are barely the beginning. It is akin to an introduction. Much of logic and reason, as well as exemplary, anecdotal, and empirical expositions against the social ailment of child marriages, lie yet to be placed. With time, we shall keep no stone unturned in our endeavor to write and publish more on this topic. _Previous musing: [Your Prosperity Through Freedom](https://indianliberals.in/content/your-prosperity-through-freedom/)_ --- ## [Musing] The Essence of Democracy URL: https://indianliberals.in/musings/the-essence-of-democracy/ ### Body _The following piece was published in the August 1953 edition of the Freedom First Magazine. It is an editorial piece written in response to Jayprakash Narayan's views on democracy as well as the role of opposition in a democratic setup. According to Mr. Narayan, there was no need for an opposition or political parties. The editorial contends with those arguments and presents a clearer picture of democracy and the flaw in Mr. Narayan's reasoning. _“Perhaps it is a mistake to always imagine that in a democracy there should be a ruling party and an opposition party. There should be some other way...They (political parties) do propaganda and set up their own candidates in elections. People have to select from amongst them. This is not correct democracy. People may not be able this way to select the best worker." Such were the disconcerting sentiments expressed by Shri Jayaprakash Narayan, the PSP leader, in the course of his whirlwind tour of Gujarat in support of Vinoba's Bhoodan Movement. Were it not for the fact that our infant democracy is already denounced as a sham and a fraud by those who would forcibly overthrow it in favour of "'a dictatorship of the proletariat," we might have taken the criticism in good part as that of a friendly critic who, moved by the misery and suffering of his people, is impatient with the slow and inefficient functioning of an imperfect democratic machinery. As it is, the criticism is liable to be misconstrued by interested parties as a repudiation of the democratic system by one of democracy's best friends, Let us, therefore, examine Jayaprakash's pronouncements dispassionately to see how far they are justified. Jayaprakash begins by questioning the validity of the unstated assumption in the Western concept of parliamentary democracy that there should be an Opposition to the party in power. In reply, we cannot do -better than quote E.F.M. Durbin in his excellent book _The Politics of Democratic Socialism_. Says Durbin, "If liberty is to exist, if the dependence of government upon the will of the people is to be real, there must always be a real choice before the people. This implies the steady maintenance of a critical and essential institution - that of freedom to oppose the Government of the day. Unless the electorate has more than one possible government before it; unless there is more than one party able to place its view before the country; unless that is to say that the opposition is free to prepare itself to take over power, and the government -to surrender it peacefully after an electoral decision against it; there is no choice before it." So there ! This is not to say that the duty of the opposition is to oppose everything and propose nothing. But it does unmistakably mean that opposition to the government of the day is of the very essence of democracy. And yet Jayaprakash thinks there should be some other system. As to what that system should be like, he is delightfully vague. And so we are left none the wiser for all his criticism of what to him is an outdated concept of democracy. In his philosophical peregrination, however, Jayaprakash is not altogether unconscious of the dangerous grounds he is treading. For he hastens to add: "I do not mean that there should be one party administration in the country. This will be suicidal. What I mean is that there should be no party at all. The constitution could be run without any party," Thanks for the tender mercy ! But without previous agreement on fundamentals how is a non-party administration set about its work? Will it stand for free enterprise, mixed economy or nationalisation? And what will be its foreign policy? We have no quarrel with the ideal of a non-party administration as our ultimate goal. But in the context of the present realities -it is a "consummation devoutly to be wished" but not attainable in the foreseeable future. Jayaprakash is, however, on surer ground when he says that the restricted choice the electorate is offered in voting for the candidates put up by political parties is not correct democracy, as the voters may not then be able to select the best worker. But here again the fault lies not with the system of democracy but with party politics. Intent upon enforcing rigid party discipline, leaders of political parties prefer docile men who can be relied upon to toe the party line and vote for the party regardless of the issues at stake. Independence of mind is not among the qualities they admire. As a consequence, the sins of party politics visit upon the machinery of democracy, defeating the very purpose of a democratic election which is to put at the helm of affairs the best men with whose general outlook the voters find themselves in sympathy. It is for the party leaders, therefore, to choose as their candidates men of outstanding ability and character so that people may have a chance to vote for them.  To sum up, we believe that the existence of a responsible opposition to the party in power is of the very essence of democracy and that the election of people's representatives by a vote of the people themselves is the best method of selecting an aristocracy of the ablest and the most outstanding men in the state. So vitally important in any democratic society is this freedom of the people to choose that to deprive it of the freedom would be to drain away its very lifeblood. It is precisely because Jayaprakash's criticism of democracy impinges upon the freedom to choose that we are provoked to pin issues with him. For if a cat may look on a king, so may in a democracy the editor of a small bulletin cross swords with a leader of Jayaprakash's stature. And if the leader wishes to attempt a riposte, the columns of this bulletin are open to him. For the editor is a great admirer of Voltaire when he says: "I disapprove of what you say, but I will defend to the death your right to say it." --- ## [Musing] The Forgotten Legacy of Yashodabai Agarkar URL: https://indianliberals.in/musings/the-forgotten-legacy-of-yashodabai-agarkar/ ### Body _Yashodabai Agarkar, known to most as Gopal Ganesh Agarkar's wife, was a social reformer and an advocate of women's education. The story of her personal struggles shows her courage and determination to follow the ideas inculcated by her husband and how she stood as an example to other women and widows ill treated by the society._ Yashodabai Agarkar is a figure missed entirely by history. An inconspicuous reference as Gopal Ganesh Agarkar’s wife has defined her identity. Born as Ambu Phadke in 1868, very little is known of her early life. She was married to Gopal Ganesh Agarkar in 1877, at the age of nine and lived as Yashodabai Agarkar all her life. Yashodabai’s marital life was one of countless struggles. She lived with her parents till she attained puberty and met Agarkar a few times after their wedding. Yashodabai writes of this time period[1], “It had been five years since our wedding. Every year when he [G.G Agarkar] came home for vacation, I would visit him for one-two months. And I would spend the rest of the time at my parents’ home”[2] (Ranade, 1997, p. 64). Even after Yashodabai moved into her matrimonial home in 1882, the separation continued. In 1883, Agarkar was convicted for defamation against the British-appointed Regent and was imprisoned for seven months[3]. Battling financial hardship, Yashodabai spent these seven months alone.  Gopal Ganesh Agarkar educated Yashodabai and kindled the spirit of reform in her. His thoughts on women’s upliftment and feminism seeped into Yashodabai. Against the wave of criticism and mockery leveled by the society against Agarkar, she stood by his side. While Agarkar was mockingly called as ‘Sudharak’ (meaning reformer; eponym of the newspaper started by Agarkar), Yashodabai was called as ‘Sudharakachi bayko’ (Reformer’s wife) (Deshpande, 2021). After Agarkar’s death in 1895, Yashodabai refused to shave her head, as was customary for widows. People around her advised her, warned her and at times even threatened her to follow the custom and shave her head. Yashodabai recounts - “People tried to instill fear in me telling me - ‘the kids are young and they are yet to be married. Just shave your head and follow the custom so that things will fall in place. Or else you will inflict pain on your family.’ But I didn’t care about their warnings or threats and I continued on the path Gopalrao had shown me”[4] (Ranade, 1977, p. 109). What empowered Yashodabai to fight the custom was her courage and also the promise she had made to Gopalrao. In 1893, Gopal Ganesh Agarkar had asked Yashodabai to promise him that she wouldn’t shave her head after his death.  Agarkar was saddened to see how the widows of his contemporaries were reduced to penury. He kept a small amount aside for his funeral expenses and asked his uncle Dattopant Bhagwat to look after Yashodabai and their children after his death. Accordingly, Yashodabai moved to Akola and was under the care of Dattopant Bhagwat. Dattopant was a rigid traditionalist and he fumed over Yashodabai’s decision to keep her hair intact. However, he was moved by Yashodabai’s commitment to her late husband; her resilience gradually brought about a change in him. Later in his life, he insisted that widows in his family not shave their heads. (Deshpande, 2021).  In Akola, Yashodabai met Manutai Bapat, a child widow. Recognising that it was education that had set her free from the clutches of customs and society, Yashodabai decided to start a school for widows. With Manutai as her first student, Yashodabai invited child widows across Akola to join her school (Deshpande, 2021). Under her leadership, Akola became a center for widow education. Several of her students went ahead and started imparting education to other widows. While working as an educator for widows, Yashodabai also began working as a midwife where she visited women from different castes. She had dedicated her life to women’s upliftment and despite financial hardships, Yashodabai did not charge money for her services as a midwife. Yashodabai was also instrumental in setting up Dabke medical center, the first maternity home in Akola.  According to Dr. Deshpande, a controversial conference was held in Akola and was presided over by Yashodabai Agarkar. The aim of this conference was to challenge regressive practices and to encourage widows to participate in society freely. Yashodabai applied kumkum to the widows who attended the conference[5]. Yashodabai is recorded to have delivered a fiery speech recounting her widowhood, her experience of teaching widows, and the importance of empowering widows in specific and women in general. Inspired by her late husband, Yashodabai later also joined the national struggle against the imperial state. She was a part of the Salt march and later in the 1930s, she supported the cause of satyagraha. She sought to involve widows in the national struggle; she took an active part in the Satyagraha organized by Varhad Prantik Sabha where she unfurled the national flag. Yashodabai was detained by the police for her involvement in various protests and satyagrahas but since she was above the age of sixty, she was never arrested.  Yashodabai Agarkar passed away in 1939 at the age of seventy one. Her life was marked by endless struggle as she faced widowhood, resistance from her family, mockery by the society, and poverty. She stood by Gopal Ganesh Agarkar through his hardships; Agarkar awakened the feminist, the liberal in her and she inculcated his commitment to social reform. The society discredited her as ‘sudharakachi bayko’ but through determination and dedication to upliftment of widows Yashodabai Agarkar carried her pursuit, molding the opinions of traditionalists and touching the lives of many. **Endnotes** [1] The translations are by the author of this piece. [2] होता होता पाच वर्षे लोटली. तेवढ्या अवधीत मी दरसाल दीड-दोन महिने ते सुट्टीत घरी आले म्हणजे सासरी जात असे. बाकीचा वेळ माहेरी असे. [3] For more, see _Public Opinion in Colonial India : The Kesari and the Kolhapur Affair, 1881-83_, Patil, A., Indian History Congress, 2006-07. [4] मला लोकांनी नाना तऱ्हांनी भीती घातली - 'तुझ्या मुलांची लग्नकार्य व्हायची आहेत. आपली मुकाट्याने सोवळी होऊन रुढींप्रमाणे वाग म्हणजे सर्वकाही सुसूत्र होईल. नाहीतर उगीच हाल अपेष्टा करून घेशील'. पण मला त्यावेळी कोणाच्याच म्हणण्याची पर्वा वाटली नाही व मी गोपाळरावांनी सांगितलेल्या मार्गापासून एक पाऊलभरही ढळले नाही.    [5] According to prevailing customs, applying kumkum on the forehead was forbidden for widows.  **References** Deshpande, A. (2021, August 3). _विद्रोहाची शलाका_. Maharashtra Times. https://maharashtratimes.com/editorial/article/dr-ajay-deshpande-talks-about-yashodabai-gopal-agarkar/articleshow/85005667.cms Ranade, P. (1997). _यशोदाबाई आगरकरांच्या आठवणी : एक आकलन_ (2nd ed.) [Print]. Rajhans Prakashan. [_Previous musing: Fighting for Freedom: The Tumultuous Legacy of Raghunath Karve_](https://indianliberals.in/content/fighting-for-freedom-the-tumultuous-legacy-of-raghunath-karve/) [](https://indianliberals.in/wp-content/uploads/2023/09/IMG_4159_Original.jpg) **Avanti Lele** Avanti Lele is a Minoo Masani Liberal Fellow. She is pursuing her PhD in English Literature from Lancaster University. She has worked as a lecturer of English Literature and as a Spanish language instructor. Her research interests include but are not limited to women's writing, liberal feminism, postcolonial studies, indigeneity. --- ## [Musing] The Indian Constitution And Judiciary URL: https://indianliberals.in/musings/the-indian-constitution-and-judiciary/ ### Body _The following piece was published in [The Forum of Free Enterprise](https://indianliberals.in/forum-of-free-enterprise/the-indian-constitution-and-judiciary-p-b-mukharji-october-1973.pdf) in October 1973. Following is the first A D Shroff Memorial Lecture delivered by  Dr. P B Mukharji on 27th October 1973. Dr Mukharji eloquently explains the relationship between the Indian Constitution, judiciary and the role politicians, executives and bureaucrats play. _Law, justice and judges of India are today at the crossroads. The atmosphere in the country is filled up with the hubbub of debates and controversies, is clouded by confused thinking and ideologies and is marred by political attacks on the system and ideas by interested parties. This public controversy has produced many slogans. Some of them are "Committed judiciary", "Servile judges", "Politicians are the masters of judges", "the Executive alone is to determine the calibre of judges", "neither the Constitution nor the Courts can stand against the so-called voice of Parliament and the Executive, and judges must decide according to the so-called public opinion". There are many more similar slogans. These battle cries indicate a misconception and misunderstanding of the whole problem. Misleading philosophies are used to support and contest these groups of contending thought. A new discovery is made about the social philosophy of the judges which has suddenly acquired a sinister meaning. Unless a man is of a particular social philosophy, he is not fit to become a judge or win the prizes of the judiciary. It disregards the signal fact that a social philosophy of a man or even a judge is not static but an evolving concept. Then there is looming large behind it, the question of class war and the classes from which judges are recruited. It is openly said with an aroma of modern logic that a judge from a particular class will always decide against some other class; a socialist judge, a communist judge, a capitalist judge, a traditional judge, an anti-tradition judge and so on. I want you to view the entire scene with as much composure as possible in the circumstances. At the dawn of history, justice was an individual notion. The problem then was an individual getting justice from another individual. The subject of this justice was crimes, personal laws of the family, marriage and children, private properties and of the prevailing morality and customs. Later on came further entrants into the fields-the tribes and the communities. Justice then became a question of tribal customs, tribal ownership, tribal wars and of tribal and communal rights and obligations. Then with the modern age came a further widening of the notion of justice. It began with the state regarded as an umpire and an arbitrator of the conflicts in society and the community, which developed on pluralistic lines of groups and interests. Gradually, the State became more involved as a direct participant in the conduct, control and regulation of human behaviour in the totality of life including crimes, property, civil rights, personal rights, trading rights and taxation. In other words, modern State slowly emerged into a Welfare State. Social welfare is its main accent. It is no longer a mere police state or a taxing state. As a result, we find today a vast body of laws, rules and regulations which touch a man's existence from life to death. On a proper administration of these laws, rules and regulations depends the happiness of millions of people. Economic prosperity, social expressions, happiness, cultural affluence and political and civic living-all depend upon the administration of law and justice. Justice has become a universal concept. Law and justice are today synonymous with life and living.   We have a Constitution. This Constitution is the common denomination of all laws, acts and regulations in the country. They must obey the constitutional mandates, observe its prohibitions and follow its directions. Therefore, judges in India swear by the Constitution. Ideally, a judge's first allegiance is to his own conscience. This conscience is shaped in a judge by his training, his education, his experience of nature, of the working of human mind and behaviour in the affairs of life. This conscience is not a whim or idiosyncrasy of a judge. This is a trained and finished product which contains the element of evolving. This is basically rooted in reverence and respect of individual freedom which is the basis of all creative judgements. This conscience is the resultant of the complex forces which we call life. His second allegiance is to the Constitution of India, which is the source of his appointment, which prescribes the oath of his office to uphold the Constitution and within the framework of which he has to fashion his legal and judicial concepts and cut his individual diamonds. Justice is a concept of a myriad-facet diamond. As no two individuals are the same, so different societies and cultures are not the same and therefore no two cases are similar. The Indian judges' commitment to the written Constitution is therefore absolute and yet elastic to suit the varying needs of changing individuals, society, time and environment. The word, "commitment' has acquired a sinister significance. Commitment to his conscience is understandable. Commitment to the Constitution is plain and explicit. The expression "Committed Judiciary" has come to mean that a Judiciary is committed to the policies and dictates of the Executive. The argument runs thus: the conscience of the judges is not free but is enslaved by the Constitution. The Constitution again is not transcendent and immutable. It is changeable by Parliament and the Cabinet and the ruling party depending on the exigencies of votes, elections and passions. So, ultimately it is the Parliament's and Executive's dictates which the judges should administer. In this view, judges are reduced to a bureaucracy and administrators. The experience of the world throughout the centuries and the mature political philosophy, political science and sociology therefore evolved a division of power in a state to keep the sources of law and justice and their administration pure and unsullied. Separation of powers is the very cornerstone of this safeguard. The three main divisions of state power are the Legislative, the Executive and the Judiciary. The Constitution separates and clearly demarcates their diverse spheres. No one is allowed to encroach upon the other. Parliament is regarded as supreme so far as the making of laws are concerned. Parliament is naturally jealous of this power. The Executive in turn, carries out the mandates of the law, as passed by Parliament and acts largely as the handmaid of the government. The Judiciary deals with the impact of the laws and the impact of the Executive on the public and the people in general. The Judiciary has to see whether the laws of Parliament mean a certain thing or a certain course of action and whether the Executive, in their application of these laws, is acting in accordance with them. Naturally, the Judiciary interprets the laws of Parliament and the orders of the Executive in the light of these considerations. The Constitution is the supreme law of the land. In a sense, it is above Parliament and the Executive. The interpretation of the Constitution belongs to the Judiciary. It is an inevitable fact and inexorable logic. It has been said that the Constitution is what the judges interpret it to be and that judgement must be supreme in a society of many conflicting interests. It is true that Parliament can change the Constitution and that it can override the decisions of the Courts by legislation. But neither the amendment of the Constitution nor the overriding of the decisions of the Courts is to be resorted to at every turn when the Government of the day feels the pinch of the judicial verdict. The Constitution should not be amended as ordinary Legislative Acts, and specially a written Constitution. The sanctity of the Constitution must be observed and it should not be treated as a mere Legislative Act. That does not mean that the judges have to be blind to what goes round them in the sociological and economic environment. Judges, apart from individual instances, few and far between, have never been blind to these considerations. Law and justice have always been regarded as a sociological phenomena. Isolated living for a man is no longer possible in the world today. A few illustrations will help to clear the idea which I have in view; A handful of men cannot in the present circumstances own the entire land-wealth of the country and control its ownership and its use in the present age. It is no longer possible to accept the principle of absolute ownership of all lands and natural resources. So ceiling of some sort is enjoined in view of circumstances and by the turn of events. Then again privileges of the few cannot stand the scrutiny against the background of the unprivileged many. Poverty in India has been stark and naked. Most people are condemned to a life of sheer drudgery and small pittance. Eradication of this massive poverty is an urgent need in any society claiming to build a just social order. The problem is the same in education, health, food, necessities and housing. In spite of criticisms which are made of Benthem, this principle of the greatest good for the greatest number even today remains a vital Principle for any system of justice. Justice and system of justice, laws and their patterns would be meaningless in the midst of this appalling poverty and destitution in India which leads to widespread frustration and degradation of human beings. This means that all the resources of the country have to be harnessed with that one end in view. That means again that some of our basic concepts of law and justice require to be replaced by justice oriented by social principles. Control of enterprises, directions of human agency and building up organization suitable for that purpose are the prime needs of the hour. The legal system, the system of justice, the Courts and the laws generally have been under severe strain in the last twenty five years. The costs of the law courts are prohibitive for the common man. The mounting arrears and dockets in the courts are a glaring fact today. Many proposals are afoot today to deal with this problem - increase the number of judges, reduce their holidays and make the legal profession open to all and sundry, to make the laws simple and to make the courts' processes much quicker. Remember this is an atomic age, an age of computers and electronics, of space travels and interplanetary explorations, of mutation and biological changes and of most dynamic alterations in the physical, environmental and mental atmospheres. Air pollution, river pollution and land pollution have reached an alarming proportion and we have to find out certain methods to control, restrict and minimise these evils, if mankind is to survive. Controlling pollution is but one aspect of the more general problem of conservation of the environment and of the natural resources. Is it any wonder that our laws and system of judges is breaking under the strain of modern changes? I hope this will yield a place for something new and effective. This need for economic and social planning is presenting a problem to the world of law and justice. Law and justice are primarily a possible, but not a necessary quality of a social order, regulating the mutual relationships of men. Only secondarily it is a virtue of men, since a man is just, if his behaviour conforms to the norms of a social order supposed to be just. But what is the meaning of the expression that a social order is Just? A social order is never static except, but a living and dynamic aspect. Justice is a multifocal adjustment of manifocal differences, stress and strains of society. Justice is social happiness and the law and its administration must reflect it. Social ideals and systems of justice and law are organically united. It is to this commitment of the judges for which I plead. _Previous musing: [The Individual and Indian Constitution](https://indianliberals.in/content/the-individual-and-indian-constitution/)_ --- ## [Musing] The Indian Libertarian URL: https://indianliberals.in/musings/the-indian-libertarian-3/ ### Body ‘The Indian Libertarian’ was a fortnightly journal, founded in 1954 by Indian liberal, Ranchhoddas Bhuvan Lotwala, and edited by his daughter Kusum R Lotwala. This edition (Vol. 8, No. 5) of the journal was published on June 1, 1960. The editorial covers the Summit Conference of 1960, developments in the Russia-Pakistan relations as well as Israel-Palestine conflict, and the tenth Commonwealth Conference, among others. The journal also publishes articles contributed by several writers. This edition contains works of M. N. Tholal, Sidney Hook and Henry Hazlitt, and in its ‘Rationalist Supplement’, articles by S. Ramanathan, Christopher N Finney and Walter Breen. The journal also features book reviews, a Delhi-specific column and letters to the editor. The main topics of discussion in this edition include the rising tensions between the United States and the Soviet Union in the international sphere, and economic and political developments in the domestic sphere. The latter includes the establishment and policy declaration of one of the earliest classical liberal political parties in India, the Swatantra Party, and opinion pieces on religion, caste, rationalism and rising inflation. type=content&p=1887). Needs editorial review._ --- ## [Musing] The Individual and Indian Constitution URL: https://indianliberals.in/musings/the-individual-and-indian-constitution/ ### Body _The following piece was published in the [June 1959 edition](https://indianliberals.in/the-indian-libertarian/the-indian-libertarian-jun1-1959.pdf) of the Indian Libertarian Magazine. The author of this piece, Mr. A Ranganathan discusses the Indian Constitution vis-a-vis individual freedom in the light of amendments as well as the enactment of laws promoting Co-operative farming. The issue of property rights has been mentioned as fundamental to the relationship between the individual and the Indian Constitution. _The success of democracy does not merely depend on the eloquent words enshrined in the Constitutional Preamble. Every student of political science knows that even such a centralized State as Russia is based on a constitution which is federal in theory! In the last analysis, the Constitution is an extremely delicate mechanism which is controlled by the mainspring of liberty in creating the proper balance between public authority and individual freedom.  The Indian Constitution is at once evolutionary and revolutionary-evolutionary because India's new constitution is patterned to a great extent on the Government of India Act of 1935, except for a few changes necessitated by the achievement of Indian Independence, and revolutionary since the Constitution is based on the republican idea, which is definitely a break with the Indian tradition of a monarchial form of government. The nineteenth century was a period of internecine struggle between democracy and monarchy ultimately resulting in the triumph of the democratic idea, which can be said to be the legacy of the twentieth century. But countries which emerged from a period of political domination (there have been exceptions in European history) generally plumped for a republican form of government. The adoption of the republican idea is therefore a product of the forces of history. THE PREAMBLE  The preamble, eloquently enough wishes to secure: 'JUSTICE, social, economic and political. 'LIBERTY' of thought, expression, belief, faith and worship. 'EQUALITY' of status and of opportunity and to promote among them all 'FRATERNITY' assuring the dignity of the individual and the unity of the Nation. The Indian Constitution is different from the previous ones in many respects. Nearly five hundred States which formed 'NATIVE INDIA' vanished from the scene. While the old dichotomy between 'British India' and 'Native States' had been removed, a new classification was introduced - part A states, part B states; and so on. The old princes were made to fit in with the new constitutional pattern, because clad in pseudo-purple and designated as _Rajpramukhs_ who have been abolished. Another important feature of the Constitution is adult suffrage which confers the status of a voter to every man and every woman who is a citizen of India and who is not less than twenty-one years. Perhaps the most Important feature of our new constitution is the section on Fundamental Rights.   CURBING INDIVIDUAL RIGHTS  Any discussion of a constitution must necessarily take into consideration the various amendments which take place from time to time. It is well known that changes, both economic and technological, promote the tendency towards centralization. In this connection it is interesting to recall the great role played by the American Supreme Court in fashioning a legal apparatus which was responsible in adopting the American Constitution, framed for a predominantly agricultural country with a few million people, to the ever growing needs of a great industrial power with more than thirty times the original population. The justification for a judicial interpretation of a constitution finds its expression in the historic words of Chief Justice Marshall who declared: "It is emphatically the province and duty of the judicial department to say what the Law is." And if a comparative study of the various amendments of the American Constitution and the amendments effected in the Indian Constitution is made, one can easily arrive at the conclusion that the scope of individual rights has been broadened in US whereas the area of individual freedom in India is being steadily narrowed.  EXECUTIVE POWER INCREASED Since Indian Independence, there has been a sustained effort to increase the powers of the Executive at the expense of the courts. Pandit Nehru has violently opposed the idea of the Supreme Court being the final arbiter on the quantum of compensation on the plea that the Supreme Court ought not to make itself a third chamber of legislature. It would be difficult to deny that this amendment which vested this power in parliament has made great inroads into the domain of the individual. This new power of fixing the amount of compensation is theoretically vested in parliament but in actual practice will have to be delegated to the ruling party and finally administered by the Executive officers. And it becomes all the more serious when the Government proposes to introduce Co-operative Farming.  In a recent lecture Mr. V. P. Menon has said that the policy of fixation of ceilings raises the question of right to property - "In contrast to the Zamindaris, the land to which the ceiling applied was purchased in the market out of honest savings and these land Reform Bills, would be the means for expropriation of private property." Indeed, there can be no doubt that cooperative farming on a nation-wide scale which is sought to be implemented by the nostrum-fed planners will do violence to the individual's freedom of action guaranteed by the Constitution. Another proposal of a serious nature is to set up administrative tribunals in different states on behalf of the Central Government to pronounce the final verdict on revenue disputes and also matters pertaining to Government employees. This measure, if brought into force, will prevent High Courts from discharging their normal functions. On the one hand we are assured of Fundamental Rights and on the other hand, everything is taken away in the name of social "progress and freedom." The Court is the last resort of the aggrieved citizen and if he is deprived of this right, it simply means the negation of democracy. This proposal is most surprising, if we reflect on the statements of Congress leaders who had asked for a separation of the judiciary from the executive during the British regime. The idea of instituting administrative tribunals is to take over the functions of the Judiciary by the Executive. The serious implications of this proposal can be grasped if we examine it in the light of various measures - Preventive Detention Act, Wealth Tax, Expenditure Tax, the Essential Services Maintenance Bill, all leading to an over-centralized bureaucracy contributing to an atmosphere of a police state.  THE NECESSARY AMENDMENT  Our Constitution as it is needs only one amendment. The time limit for the use of English in our day-to-day administration must be extended by a further period of twenty-five years, if not more. The most important thing at the moment is to make the Government take suitable steps to amend the Constitution to include English as one of the languages mentioned in the Eighth Schedule. The next step would be to delete Part XVII of the Constitution.  Indeed, even article 315 of the Constitution has made it clear that Hindi is still an undeveloped language and it is difficult to understand the reason behind the idea of imposing Hindi, when English serves our purposes admirably. Again Article 344 (3) says that in making their recommendations, the (official language) commission shall have due regard to the industrial, cultural and scientific advancement of India and the just claims and the interests of persons belonging to the non-Hindi-speaking areas in regard to the public services. Mr. P. Medapa, says foreign language is legally untenable and constitutionally incorrect. It is well to remember in this connection that the Bombay High Court had shown that English is not a foreign language in pronouncing judgement on the celebrated Bombay School case. _Previous musing: [IS SOCIALISM OUTDATED?](https://indianliberals.in/content/is-socialism-outdated/)_ --- ## [Musing] The Liberal Budget: Building an Equitable Society URL: https://indianliberals.in/musings/the-liberal-budget/ ### Body _Published by The Indian Liberal Group, a think tank founded in 1964 by Minoo Masani, the text titled “The Liberal Budget: Building an Equitable Society” authored by Mr Sunil S Bhandare - Chairman of the Group, Dr Ajit Karnik, Dr CS Deshpande, Mr Sanjay Panse and Ms Seetha - all members of the Indian Liberal Group was published in 2004 and has a total of three chapters: “Liberal perspectives and human development”, “The current budget scenario” and “Policy framework and structure of the Liberal Budget”._ _The following text is the Executive Summary of the brief. __You can read the original, unabridged version _[_here_](https://indianliberals.in/indian-liberal-group/liberal-budget-building-equitable-society.pdf)_._ Man is the measure of all things. This about sums up the Liberal credo. Liberalism has no dogma except one - the centrality of the human being; what is good for him or her is acceptable. What is not is not. Liberalism, like Socialism, aims to promote the welfare of all. As Ludwig von Mises, the great Liberal philosopher, put it, where the two differ is "_not be the goal at which it aims, but the means that it chooses to attain the goal._" Philosophically speaking, the Liberal position is very clear. It is that the business of government is governance and not business. In a Liberal State, the individual is supreme, and the State must work to further his or her potential. So it will focus its activities on law and order, defence, and physical and social infrastructure (health, education and a social safety net). When preparing this Liberal Budget from a Liberal perspective, we have kept these fundamentals in mind. The key basic tenets of this Liberal Budget are: - Effective Fiscal Governance - Fiscal Consolidation and Stabilisation - Efficiency and Productivity - Acceleration of Growth - Promotion of Equity The main focus of the Liberal Budget will be issues concerning human development or human capital formation - health, education and a social safety net for those who are not capable of looking after themselves. At the same time, no budget can be genuinely Liberal in its essence and powerful in its impact unless the overall economic policy regime becomes genuinely liberal, deregulated and capable of nurturing and fostering private and individual initiative. In other words, an interventionist State cannot be the right setting for a Liberal Budget. Unfortunately, over the past fifty years, the Indian State has become an interventionist, appropriating practically every aspect of human life. As a result, it has spread itself too thin and cannot play an effective role in any area, let alone the areas of its main responsibility. The Liberal Budget will, in a sense, attempt to set this right and provide resources for the government to effectively carry out its main responsibilities. What kind of targets relating to human development should the Liberal State set for itself? The Liberal Budget sets out the following **nine-point objectives** of a Liberal State: - Reduction of poverty ratio by 5 percentage points by 2007 and 15 percentage points by 2012. - All children in school by 2005; all children to complete five years of schooling by 2009. - Increase in the literacy rate to 75 per cent by 2007. - Reduction of infant mortality rate (IMR) to 45 per 1000 live births by 2007 and 28 by 2012. - Reduction in maternal mortality ratio (MMR) to 2 per 1000 live births by 2007 and 1 by 2012. - Improve infant and child feeding and caring practices to reduce the prevalence of underweight children under three years from 47 per cent to 40 per cent. - Reduce the prevalence of severe undernutrition in children in the 0-6 age group by 50 per cent. - Provide 100 per cent coverage of the rural and urban population with safe drinking water. - Provide cost-effective means of safe and sanitary disposal of solid waste and wastewater. While framing the Liberal Budget, we have recognised some distinctive recent changes, especially the tax policy, which reflects what Indian Liberals have been advocating in the preceding several decades. This change has already brought about several remarkable gains in our economic performance, particularly in the industry and the external sector of the economy. But this exercise is far from complete. Much more remains to be done, and we will endeavour to set out a strategy to make India a truly world-class economic power over the next decade, even while attending to the basic needs of the population, particularly in rural India. The liberal economic philosophy recognises the importance of expenditure policy as a powerful tool of fiscal policy. The expenditure policy impacts key parameters of socioeconomic development, employment generation and poverty alleviation. It directly affects or indirectly the sectoral composition of growth as well as patterns of the income distribution. Thus, an efficient expenditure policy is a critical component in accelerating growth and improving its quality. In this context, the effort of the Liberal Budget is not merely to reduce and rationalise expenditure but to shift the focus and direction of the expenditure policy. What are the key guideposts for this purpose? - First, expenditure growth in real terms over the next three years shall not exceed the anticipated real GDP growth. - Second, the composition of expenditure must change decisively in favour of developmental spending over the next three years. Thus, the development expenditure ratio shall increase from the present average of about 7% of GDP to 9% in stages over the next three years and remain at least around this level after that. - Third, the Liberal Budget strongly advocates the case for reducing non-developmental expenditure. The savings from non-developmental expenditure shall be redeployed largely to finance sustainable, well-conceived social sector and welfare programmes such as (i) primary education and healthcare; (ii) employment guarantee scheme; (iii) mid-day meal scheme for deserving school children ; (iv) health insurance for the poor; and (v) an effective pension scheme, etc. - Last, it is imperative to devise specific qualitative benchmarks to evaluate the effectiveness of both development and non-development expenditure. The Liberal Budget envisages a systematic and rigorous expenditure management process, essentially reflecting the following elements: - First, each Ministry and Department shall formulate inspiring missions, aspirations and targets for its activities for the future. At the same time, there must be a mechanism for mid-course corrections when found necessary; - Second, on the pattern of the "profit centre" favoured by corporate enterprises, there shall be "performace cells" in each Ministry and Department; - Third, there shall be an effective performance management system to monitor the achievements separately of each Ministry and Department together with those of the top officials from the level of Principal Secretary to Deputy Secretary. This must also be accompanied by a suitable "reward - punishment" mechanism; - Fourth, while there must be tight controls on budgets and performance against targets, there should be operational autonomy for the implementation of various projects/programmes. - Fifth, in designing the process, there must be a participation of the officials concerned so that there is a clear understanding of the missions, aspirations and targets. Also, a quarterly report card would become a useful tool for constantly monitoring the process. - Sixth, the process shall be transparent, and the aspirations and targets of these missions shall also become part of the public domain. Expenditure reduction has to be accompanied by steps to raise revenues to fund government spending in essential areas. Both tax and non-tax revenues have to be tapped. The policy prescriptions (both Budget and non-budget) set out in this document will result in significant buoyancy in tax and non-tax revenues. Restoring high growth levels and increased investment activity will automatically lead to the growth of revenues. Rationalising and simplifying Direct and Indirect Tax Laws and bringing them in line with the current needs of a liberalising and competitive global economy is an urgent task. Accordingly, in the area of tax reforms, the Liberal Budget would be guided by the following two broad principles: (i) Any increase in tax revenues would not be by growth in the tax rates but by rationalisation and simplification of the tax system. (ii) tax reforms would be through creating a simplified and rational tax policy and globally competitive tax rates. It is imperative to stress that the falling tax-GDP ratio is a source of worry. Still, the Liberal State doe snot envisage any drastic increase in this, given the need for substantive reduction and rationalisation of taxes, especially indirect taxes. However, the fact remains that the State does need to raise revenue to finance its various functions. This can be done, without increasing the incidence of tax rates, through efficient and innovative tax administration. The Report of the Task Force on direct/indirect taxes under the chairmanship of Dr Vijay Kelkar was submitted in November 2002. Though it provides radical changes in tax administration and addresses issues in the tax policies to achieve rationalisation and simplification, it has unfortunately not found acceptability with the government. However, the Liberal response to this report has generally been favourable, and hence, Liberals will give it serious consideration. All this will lead to better tax compliance. However, there will still be a host of defaulters, and the State cannot ignore its responsibility of improving tax administration without giving draconian powers to tax authorities, which they can use to harass taxpayers. While supporting a government with a will to govern and implement laws necessary to ensure their compliance, the Liberal way does not accept actions that lead to intimidation and the invasion of the individual's privacy. Thus, provisions for search and seizure will be abolished since they have not served their purpose of acting as deterrents but have been misused to harass taxpayers. Similarly, the "public interest provisions" (relating to disclosure of information about the assessee, exemption or reduction in taxation rates for oil companies, etc.), which give the government undue discretionary powers, would also be abolished. Inefficiencies in the tax administration system would be eliminated, and the powers of the assessing officers will be reviewed. Tax collections can be strict without being brutal. Taxpayers with an income up to Rs 5 lakhs will not be required to maintain books of accounts, and assessing officers will not have the right to demand books of accounts from them. Computerisation of all tax operations, including customs clearances, will be given the highest priority in the interest of transparency and efficiency. The Liberal Budget is concerned that the ratio of non-tax revenue to GDP has declined over the years. This occurs when the tax/GDP ratio has also been stagnant, putting considerable pressure on government finances. Therefore, we will endeavour to expand resource generation through dividend and interest receipts from PSUs and Departmental Undertakings by improving their efficiency and profitability on a continuing basis. In recent years, the Union Budget has been looked upon as an Annual Financial Statement and as a signalling mechanism to the world at large (and the investing community in particular) of the progress in India's economic reforms programme. Hence, it is necessary to: - Identify some of the crucial factors that influence the Budget; and - Suggest specific policy reforms to enable the Liberal Budget to become functionally effective. The process of disinvestment/privatisation of PSUs needs to be speeded up substantially and extended to state-level public sector enterprises. The criterion for privatisation must not be whether a PSU is loss-making or profit-making. The test should be whether the State should be in that field of activity in the first place. While deciding on issues of disinvestment/privatisation, the Liberal Budget will not be guided by arbitrary or ad hoc considerations of the strategic reasons for PSUs' businesses and operations. At the same time, while privatising a PSU, care will be taken to ensure that the process is completely transparent. Also, it is necessary to safeguard against a public sector monopoly being replaced by a private sector monopoly. The best way to do this would be to open up all sectors to competition. Where this is impossible or may take time, privatisation must be preceded by a strong independent regulator. This privatisation exercise is a temporary one in the sense that it is correcting a policy (of nationalisation) that was adopted at one point in time and which has resulted in putting a huge strain on the fiscal health of the country. In a genuinely liberal economic environment, there will be no PSUs in areas where the private sector is interested and capable of investing. Moreover, a whole range of reforms is necessary to improve the investment climate in the country. These include deregulation and liberating industry from the tyranny of inspectors; ending the practice of reserving sectors for small-scale industry or restricting entry into non-strategic areas; allowing companies the freedom to restructure; faster liquidation of companies; and a more flexible labour law regime, among other things. In the area of labour law, the government must not take upon itself the task of deciding the level of wages, etc. or standing judgement over whether or not companies should retrench workers. Instead, it should confine itself to enforcing contracts, for example, ensuring that workers get their termination benefits and that companies do not default on social security obligations. An improvement in the domestic investment climate need not do anything more apart from ensuring no restrictions on FDI in any areas or placing ceilings on levels of FDI. The Liberal Budget also calls for the following crucial policy initiatives: - A movement towards a more liberal interest rate and exchange rate regime. - Agriculture: The declining trend in investment in this sector has to be reversed. This has to be accompanied by better targeting of subsidies and increased investment in infrastructure, especially irrigation, power and rural infrastructure. All controls on the domestic movement in and trade of agricultural goods need to be lifted. An atmosphere conducive to attracting private investment in the agriculture sector needs to be created. Land ceilings also discourage investment and inhibit growth. These need to be reviewed. Contract farming and partnerships between the corporate sector and farmers must be encouraged. These steps will only strengthen the agricultural sector and enable it to not only face up the global competition but fully exploit global opportunities. - Trading Activity: Reforms are necessary for the legal arena, which should be geared towards creating a transparent system integrating the country into a single market. States should consider a single procedure for granting licenses. - Physical Infrastructure: It is necessary to have a phased but definite movement towards the promotion of private sector participation and public-private partnerships in the development and/or management of infrastructure, whether it be power, roads, ports, transport or telecom. - Reform of Legal/Judicial Appartus: A mammoth exercise has to be undertaken to repeal and amend several Central and state-level laws to reduce the costs of doing business and promote greater economic efficiency. In addition, judicial reforms are necessary to ensure the speedy disposal of cases and enforcement of contracts. The judiciary also needs to be sensitised about the effect of its decisions in economic matters. - Policies of States and Local Bodies: There is a dire need to ensure the percolation of liberal policies and procedures at the State and decentralised levels of administration. - Independent Regulators: Even in a free economy, a certain amount of regulation (like coordination, checking negative externalities and ensuring that the rules of the game are observed) is needed. Rather than the government, the task should be carried out by independent regulators. However, these regulators must be genuinely independent. They are still heavily dependent on the government, and their independence depends on the person heading the regulatory body. This is not a desirable state of affairs and will neither promote true competition nor check market failure. - Restructuring Government: The re-orientation of the role of the State will necessitate a restructuring of government as well. Reducing the number of government employees is an important measure which is outside the scope of the Budget but has a tremendous impact on it. Government salaries and pensions account for over 25 per cent of total revenue receipts and are one of the committed liabilities that cannot be cut down. The only answer, then, is to reduce the number of people to whom salaries are to be remunerated. Each ministry must be subjected to a performance audit, and ministries/departments found inconsistent with the liberal conception of the role of the State should be closed down. At the same time, a Liberal Budget does not call for a blind downsizing across the board. What is needed is rightsizing. This means that staff will be retained - and numbers increased - in areas where the government is needed, and this should be accompanied by measures to ensure accountability and increased responsibility. - Political Environment: It will not be possible to create a liberal economic environment unless there is a major change in the political environment and culture in the country. Political parties and politicians must learn to rise above narrow personal and partisan ends and addresses the needs of the nation. Besides, there is the phenomenon of legislative work being sacrificed at the altar of political grandstanding in Parliament and state assemblies. All this needs to be checked. Law and order is another issue that needs to be addressed. Though not an economic issue, it has a far-reaching impact on the country's economy. Neither domestic nor foreign investors would like to put their money in areas where the law and order situation is poor. The government has to make efforts to address the root causes of violence and maintain law and order firmly. In substance, the Liberal economy requires the Liberal Budget of the kind envisioned in this document. _Previous musing: [The Missed Opportunity](https://indianliberals.in/content/the-missed-opportunity/)_ --- ## [Musing] The Light of the Constitution URL: https://indianliberals.in/musings/the-light-of-the-indian-constitution/ ### Body _The following piece was published in [The Forum of Free Enterprise](https://indianliberals.in/forum-of-free-enterprise/the-light-of-the-constitution-n-a-palkhivala-october-20-1976.pdf) in October 1976. The text is derived from an article originally published in The Indian Express highlighting the demerits posed by The Constitution (Forty-fourth Amendment) Bill 1976. Palkhivala elucidates how the Bill threatens the integrity of the constitution and infringes on the fundamental rights of the citizens while raising questions regarding the freedom and liberty of the citizens and the imbalance of powers between the Executive, Legislature and Judiciary through this Bill. _Next week the Constitution (Forty-fourth Amendment) Bill 1976 will be taken up by Parliament, while the Prime Minister's wish that there should be a ‘free and open public debate’ and a ‘study in depth’ before the amendments are passed into law has remained unfulfilled. The Bill is so wide-ranging in its scope that a critical examination of its provisions, combining adequacy with brevity, would fill a handsome volume. The limited purpose of this article is to point out the glaring inconsistency between two of the ‘fundamental duties’ sought to be enjoined by the Bill on the one hand and the other provisions of the Bill and the arguments marshalled in support of them on the other hand. One of the fundamental duties is that every citizen of India (including two-thirds of the population who are still left illiterate) shall develop ‘the scientific temper’ and ‘the spirit of inquiry.’ The scientific temper postulates the habit of thinking with clarity and using words with precision and a calm and dispassionate consideration of every issue in conditions of normalcy. Thus, by definition, the scientific temper would necessarily rule out, in times of emergency, changes in the basic structure of the Constitution as are sought to be made by the Bill (assuming that Parliament is at all competent to make such changes). The Constitution is part of the heritage of every Indian citizen, irrespective of party politics. Any vote for or against any provision of the Bill, within or outside Parliament, should be according to the citizen's conscience regardless of party affiliations. In order that such a vote may be cast with the care and knowledge which the subject deserves, ‘the spirit of inquiry’ - one of our fundamental duties would imperatively indicate an intensive discussion for several months and an equal opportunity through the mass media of the radio, the television and the press for differing points of view to ascertain and arouse public opinion. It cannot be suggested that such a spirit of inquiry has been brought to bear on the Amendment Bill. Such a spirit involved almost three years of totally free public debate and profound deliberations in which all political parties and all shades of expert opinion took part before the founding fathers of the Constitution gave it the final shape. The other fundamental duty of every citizen is ‘to cherish and follow the noble ideals which inspired our national struggle for freedom.’ One of the noblest ideals of the great visionaries and fighters for national freedom was to ensure for the country certain fundamental rights which would be inalienable and to guarantee liberties for man's unconquerable mind. The Constitution of India Bill, 1895, which is believed to have been inspired by Lokamanya Tilak, visualized a Constitution guaranteeing to every citizen certain basic rights, subject to reasonable legal restrictions, including the rights (a) to ‘take part in the affairs of his country’, (b) to ‘express his thoughts by words or writings, and publish them in print without liability to censure’, (c) to have ‘in his house an inviolable asylum’, and (d) of equality before the law.  The Commonwealth of India Bill, 1925, in the preparation of which Mrs Annie Besant had played an important part, enumerated fundamental rights which were almost identical in scope and nature with those adopted by the Irish Free State in its Constitution of 1921. In the authentic summary of the Bill, the ‘Declaration of Rights’ appeared in the forefront: “The following shall be the Fundamental Rights of every person: (a) liberty of person and security of his dwelling and property,...(c) free expression of opinion and the right of assembly peaceably and without arms and of forming associations and unions…(f) equality before the law…” In December 1927, the Forty-third Annual Session of the Congress at Madras passed a resolution empowering the Working Committee to opt and confer with similar Committees to be appointed by other organizations and ‘to draft a Swaraj Constitution for India, on the basis of a Declaration of Rights.’ Pursuant to the above resolution, the Motilal Nehru Committee was appointed, which submitted its Report in August 1928. The Committee observed that ‘the conditions obtaining in the Irish Free State approximated broadly to those prevailing in India; and the first concern of the people of Ireland, as of the people of India, is to secure fundamental rights hitherto denied to them… It is obvious that our first care should be to have our fundamental rights guaranteed in a manner which will not permit their withdrawal under any circumstances.’ Clause 4 of the Nehru Report set out nineteen fundamental rights. In 1945 a non-party Committee of intellectuals, of which Sir Tej Bahadur Sapru was the Chairman, reiterated the demand for fundamental rights. The Sapru Committee rested its demand on the ground that in the ‘peculiar circumstances of India fundamental rights are necessary, not only as assurances and guarantees to the minorities but also for prescribing a standard of conduct for the legislatures, the government and the courts.’ In answer to the British Cabinet Mission's Plan of May 1946, the Congress Working Committee passed a resolution in that month emphasizing that among the objectives of the Committee were ‘the guarantee of the fundamental rights of each individual so that he may have full and equal opportunities of growth, and further that each community should have opportunity to live the life of its choice within the larger framework.’ In the Constituent Assembly, a number of architects of the Constitution talked of the fundamental human freedoms as permanent and inalienable. Dr B. R. Ambedkar said: “The Declaration of the Rights of Man…has become part and parcel of our mental make-up…These principles have become the silent, immaculate premise of our outlook.” Dr S. Radhakrishnan said: “We must safeguard the liberty of the human spirit against the encroachments of the State. While State regulation is necessary to improve economic conditions, it should not be done at the expense of the human spirit…This declaration, which we make today, is of the nature of a pledge to our own people and a pact with the civilized world.” Pandit Jawaharlal Nehru said: “A fundamental right should be looked upon, not from the point of view of any particular difficulty of the moment, but as something that you want to make permanent in the Constitution.” Z. H. Lari said: “To assess the provisions of the Draft Constitution, we have to see how far the Draft Constitution ensures the inherent rights of man, rights without which life is not worth living.” Sardar Hukam Singh said: “It may be argued that under a national government, the legislature, representative of the people and elected on adult franchise, can and should be trusted for the safe custody of citizens' rights. But as has been aptly remarked, if the danger of executive aggression has disappeared, that from legislative interference has greatly increased, and it is largely against this danger that the modern declarations of fundamental rights are directed, as formerly they were dirested against the tyranny of autocratic kings.” Hundreds of similar passages can be quoted from the Constituent Assembly Debates to illustrate ‘the noble ideals which inspired our national struggle for freedom.’ How can one reconcile the fundamental duty to ‘cherish and follow’ the aforesaid ‘noble ideals’ with the proposal in the Bill to take away the basic human freedoms enshrined in Articles 14, 19 and 31 of the Constitution, including the right to equality before the law, freedom of speech and freedom of the press, the right to form associations or unions and to move freely throughout the territory of India? There is no socio-economic policy for the welfare of the masses which is in any way impeded by these human freedoms. (I am wholly in favour of removing the pathetic remnant of the right to property from the Chapter on fundamental rights so as to put an end to the perpetual and deliberate distortion of the issue of the basic human freedoms by snide references to the right to property.) Article 31C, as sought to be amended by the Bill, will permit any law giving effect to any of the directive principles of State policy to take away or abridge any of the aforesaid fundamental rights. Since every government acts or purports to act in pursuance of the directive principles of State policy, most laws, however arbitrary and authoritarian, would be said to be related to those principles. Article 31C empowers even State legislatures to pass laws which virtually involve a repeal of the fundamental rights. The consequence is that it will be open to the State legislatures to supersede a whole series of the basic human freedoms. Hereafter liberty may survive in some States and not in others, depending on the complexion of the political party in power. The Bill seeks to deny the protection of fundamental rights to any anti-national activities or anti-national associations and permits unrestricted freedom to enact a law to provide for the prevention or prohibition of such activities and associations. It is but right that anti-national activities and associations should not be allowed to wreck the State under the shield of fundamental rights. The real question is which authority should decide whether an activity or an association is anti-national. Under the Bill, it can be left solely to the executive to make such a decision without a judicial adjudication of the issue involved. In a country where the check of a strong well-informed public opinion is absent, there would be all. too natural a tendency to treat even honest criticism of the Government's policy as anti-national. Many other provisions of the Bill, particularly those dealing with restrictions on the powers of the Supreme Court and the High Courts, the devaluation of the High Courts, and the absolute obligation on the President of India to act in accordance with the advice of the Council of Ministers in all cases, are fraught with great dangers. The President's limited power, under Clause 59 of the Bill, of amending the Constitution would virtually be the power of the Central executive. In four respects at least, the Bill aims at altering or destroying the basic structure of the Constitution. First, it proposes to overthrow the supremacy of the Constitution and install Parliament (a creature of the Constitution) as the supreme authority to which the Constitution will be subservient. The instrument will become the master and the master the instrument. Secondly, the Bill seeks to enact that the eternal values enshrined as fundamental rights in the Constitution will no longer be justiciable or operate as brakes on legislative and executive action in most fields. Thirdly, the balance between the executive, the legislature and the judiciary will be rudely shaken, and the executive at the Centre will enormously gain in power at the expense of the other organs of the State, particularly the judiciary. Fourthly, the Bill envisages the enforcement of laws even after they are held unconstitutional by a majority of the Supreme Court or the High Court. Every major constitutional change represents a mood. Today, the mood of the nation which is searching for its identity is hardly conducive to a proper evaluation of the long-term, mind-boggling consequences of the proposed amendments. The Bill merely seeks to provide for the exigencies of the moment, forgetting that the Constitution is meant to endure through generations to come. It is Diwali, the festival of lights. As the lamps glimmer in and outside millions of homes, inexorable time will be ticking away the remaining few days before the light goes out of the Constitution. _Previous musing: [The Indian Constitution and Judiciary](https://indianliberals.in/content/the-individual-and-indian-constitution/)_ --- ## [Musing] The Missed Opportunity URL: https://indianliberals.in/musings/the-missed-opportunity/ ### Body _Published by Swatantra Party, “The Missed Opportunity” comprises speeches by its MPs MR Masani, Charanjit Rai and N Dandekar, each of whom expressed their discontent towards the Central Budget of 1967-68. The Swatantra Party MPs, in addition to highlighting the shortfalls of the central budget, shed light on the poor outcome of previous policies of the then-ruling party that have failed to achieve their original objective._ _The following text is the speech delivered by Mr Charanjit Rai, MP from the constituency of Dausa, Rajasthan on June 8, 1967, in the Lok Sabha during a discussion on the General Budget._ _You can read the original, unabridged version on _[_Page 27_](https://indianliberals.in/wp-content/uploads/2022/06/Copy-of-The-Missed-opportunity.pdf)_ here._ Mr Deputy Speaker, Sir, it is a matter of common sense that the economic prosperity of any country can be brought about by the maximum utilisation of resources of that country. In that process, the human factor is important. It is the man who makes use of these resources to the maximum extent through his knowledge, hard work and sincerity of purpose, but for this, he needs incentives. Even Sri Morarji Desai did not wish to join the Cabinet till he was offered the incentive of a Deputy Prime Ministership. The day before yesterday, even Shri Dange accepted the principle of incentives. Sir, slogans, preaching and lectures can never be a substitute for incentives. The budget is not merely a statement of income and expenditure. It signifies much more. The budget starts a chain reaction in the economy, and it can either promote economic growth or retard it. I am going to comment on the budget from this angle. But, before I do that, I would like to briefly review the effect of the previous fiscal policies of the Government in relation to the Three Plans. ### **Plan Objectives** The objectives of the Plans were mainly: - To increase the National Income - To raise the Standard of Living of the people - To increase production, both agricultural and industrial, and - Lastly, to provide employment opportunities To achieve these objectives, the outlay on the Plans, leaving aside the investment in the private sector, was about Rs. 16,000 crores, of which leaving other things, Rs. 4,200 crores were by additional taxation, Rs. 2,500 crores from foreign aid, and Rs. 3,700 crores by deficit financing. The hardships caused to the people by high taxation and deficit financing would not have mattered much if the objectives had been achieved, but they matter because this did not happen. Let us see what has actually happened. ### **Failure** In the case of national income, the increase was 3.9 per cent annum, against a target of over 5 per cent per annum. Regarding the standard of living of the people, the per capita income on average increased by about 3 per cent per annum, whereas the consumer price index went up on average by about 6.6 per cent. It is very clear, therefore, that the standard of living of the people, instead of going up, has gone down. Regarding production, food production, particularly, the results were disappointing! Against a target of 101 million tonnes at the end of the Third Plan, the average production, with fluctuations, reached about 74 million tonnes. Self-sufficiency in food is the long-standing promise of this Government to the people, but it is as distant today as it was 15 years ago. Regarding industrial production, it is the same story. In many cases, production has fallen short of the target. As for employment, I am sorry to say that the number of unemployed men today is far higher than expected in the Plans. Actually, the number of unemployed has been increasing progressively with every Plan. Now the question arises why it is so when so much money has been spent. Why has it happened like that? Among other reasons, I will mention only three. The first is the undue importance given to the public sector. This defies reason when it has proved beyond doubt that most of the public sector undertakings were badly managed and, therefore, gave very small returns on the capital, as compared with the private sector. Secondly, crippling taxation was inflicted to meet the demands of the Congress Government’s policies. Very large sums were pumped into either non-yielding projects or low-yielding projects, with the result that less money was left to the people and the private sector. The result was that the productive effort of the private sector was hindered. Thirdly, the Government placed impediments in the path of economic progress of the country by checks and controls, particularly the Industrial Licensing Policy. By this policy, they created a very large installed capacity without caring to find out whether the country could feed this installed capacity with raw materials, either local or imported. It does not speak very well of a government which spends huge amounts of money for importing machinery, both for the public and private sectors, when that machinery cannot be used to the optimum extent just because the raw material is not there. ### ### **Lessons not Learnt** Sir, I have given you the aims, the failure and the reasons. Now the question arises whether the Government has learnt any lesson. The answer is “No”. I said originally that I would like to comment on the Budget from one angle; to see whether it promotes economic growth. Frankly, I see nothing in the Budget which does this. Economic growth can take place, and prices can be brought down only by higher production, both in industry and agriculture. About agriculture, we are told, the reason is “drought”. Surely the planners and the Government know that Indian agriculture has been dependent upon rainfall for thousands and thousands of years. It is not a new phenomenon. What has the Government done for the last twenty years to see that, if in one year there is a shortage of rain, the production does not go down to the level where people starve? I admit that they have started very large irrigation projects either in this part of the country or in that part of the country. They should have started minor and medium irrigation projects throughout India so that a farmer, no matter from which part of the country he comes, gets water to cultivate his land. To take shelter under drought is just to cover their own mistakes. I may point out that we have imported food grains even when we had a good year. The only difference is that we imported less when the rainfall was good, and we imported more when the rainfall was less. I am glad to see that the Government is giving up priority to agriculture. At least 15 years, they have learnt one lesson. Coming to the Industrial sector, I see that very small, minor reliefs have been given, which will not have much effect on growth. The same is the case with the capital market. What was required to be done was that there should have been a reduction in taxation on the corporate sector, dividend tax should have been abolished, the rebate should have been given for ploughed-back capital, and profit surtax should have been abolished. This would have brought in more investment in the Industry, and with the ploughed-back capital, the industrial growth would have been sizeable. They could have gone for expansion, and that would have enabled them to give a reasonable return to the investor. Today, the investor is not getting a reasonable return result because he is investing in unproductive spheres like land, houses and gold. ### ### **Economic Realities** The Finance Minister has a very fine opportunity to boost our economy by making an overall reduction in taxation so that in the corporate sector, it would not be more than 50 per cent; and on individuals 66 per cent. He might say, “I will lose money. Where will I get revenue from?” Countries like Japan, Germany and America have proved that if you judiciously lower taxation, the overall recovery is more. Some people might say that it may not work in India. I disagree with that. Surely, if we want to achieve anything, we cannot be cautious to the extent of being timid, as our Finance Minister has been. I would like to suggest that this experiment should be given a trial for at least one year, and even if it does not succeed, the heavens are not going to fall. The Finance Minister was very nice today that he would check prices. He must be a magician to do that. The prices can only come down when there is higher production. There is nothing in the Budget which promotes production. On the contrary, by the measures adopted by him, the common man will have to pay more for coffee, tea, shoes and cigarettes; he has to pay higher postal and telegraph charges; he has to pay more for rail journeys and lastly, the freight which has been increased would raise the cost of industrial products as well as agricultural products, excepting food. I am afraid we are going to see not what the Finance Minister sees, but we will see a price rise all around because when prices rise on one side, it has an overall effect on the general price level. Then there will be the same vicious circle of high prices, high wages, and high cost of production. Our Finance Minister has given some concessions for manganese ore and jute in order to promote export. Excise duty on tea and coffee has also been proposed for the same purpose. I admit that there will be some effect on the export of jute and manganese ore, but if you really want to go fast enough to achieve our target of exports, what needs to be done is to give incentives for all those products which have an international market. Our Finance Minister has been very shrewd. He has not given any figure of cut in the expenditure of Government; he has tried to satisfy us by saying… A Hon Member: That is the secret preserve of the Finance Minister. _Shri Charanjit Rai…_ by saying, “yes, we are going to cut”, and he says that he is going to start it with his own Department. I would remind the Finance Minister that he sent a note to the Congress Working Committee where he had suggested a cut of 10 per cent in Government expenditure. He has suggested this to the Congress Working Committee, but he has not taken any action on the Budget. ### ### **Concrete Steps** We have no quarrel with the Finance Minister when he says that we should bring confidence in the minds of investors, both in India and abroad. But this needs, taking concrete steps, and I can suggest a few: - Bold reduction of taxation on the corporate sector as well as on individuals; - No nationalisation for the sake of nationalisation because this sends fear into the mind of investors both in India and abroad; - Reduction of stress on the public sector; the projects should be placed in the private sector wherever they are likely to produce better results; and lastly, - I would like the Finance Minister to put into effect what he has recommended to the Congress Working Committee, and that is a cut of 10 per cent in Government expenditure. Once this is done, he has no need to propose new taxes; on the contrary, he can give relief. Sir, I have done, but before I sit down, I want to tell the Treasury Benches that they should take lessons from the past. The masses of India are seething with discontent. _(Interruptions)_ An Hon. Member: _Laissez-Faire_ _Shri Charanjit Rai: _I was talking about the economy. The dragon of mounting prices stares us in the face all the time. Mr Morarji Desai says that he would like to rehabilitate his confidence, but he has not taken any steps for it. I am afraid our Finance Minister looks at the problem, the economic problem, like so many Congressmen, through the glasses of politics. As long as this goes on, we will never be able to increase production; we will never be able to produce enough food and industrial and consumer goods, and the economy will just go down. _Previous musing: [The Budget Versus The People](https://indianliberals.in/content/the-budget-versus-the-people-2/)_ --- ## [Musing] The Nation by R N Tagore URL: https://indianliberals.in/musings/the-nation-by-rn-tagore/ ### Body _Rabindranath Tagore (1861-1941) was a renowned poet, novelist, and playwright widely acclaimed for his prolific literature in Bengali and English. His remarkable writings earned him the Nobel Prize for Literature in 1913 for his collection of prose poems called Gitanjali. In addition to his literary achievements, Tagore was a prominent educator who founded Visva Bharati University at Shantiniketan. This esteemed university is renowned for its internationalism and excellence in the arts and is now considered one of the leading universities in India._ _In the following essay, Tagore reflects on the concept of nationalism and its relationship with culture. He argues that true nationalism should not be based on narrow and exclusive definitions of identity but should embrace diversity and celebrate the commonalities that unite humanity._ The People are living beings. They have their distinct personalities. But nations are organisations of power, and therefore their inner aspects and outward expressions are everywhere monotonously the same. Their differences are merely differences in the degree of efficiency. In the modern world, the fight is going on between the living spirit of the people and the methods of nation-organizing. It is like the struggle that began in Central Asia between cultivated areas of man’s habitation and the continually encroaching desert sands till the human region of life and beauty was choked out of existence. When the spread of higher ideals of humanity is not held to be important, the hardening method of national efficiency gains a certain strength; and for some limited period of time, at least, it proudly asserts itself as the fittest to survive. But it is the survival of that part of man which is the least living. And this is the reason why dead monotony is a sign of the spread of the Nation. The modern towns, which present the physiognomy due to this dominance of the Nation, are everywhere the same, from San Francisco to London, from London to Tokyo. They show no faces but merely masks. The People, being living personalities, must have their self-expression, and this leads to their distinctive creations. These creations are literature, art, social symbols and ceremonials. They are like different dishes at one common feast. They add richness to our enjoyment and understanding of truth. They are making the world of man fertile of life and variedly beautiful. But the nations do not create, they merely produce and destroy. Organisations for production are necessary. Even organisations for destruction may be so. But when actuated by greed and hatred, they crowd away into a corner the living man who creates, then the harmony is lost, and the people’s history runs at a break-neck speed towards some fatal catastrophe. Humanity, where it is living, is guided by inner ideals; but where it is a dead organisation, it becomes impervious to them. Its building process is only an external process, and in its response to the moral guidance it has to pass through obstacles that are gross and non-plastic. Man as a person has his individuality, which is the field where his spirit has its freedom to express itself and to grow. The professional man carries a rigid crust around him which has very little variation and hardly any elasticity. This professionalism is the region where men specialise their knowledge and organise their power, mercilessly elbowing each other in their struggle to come to the front. Professionalism is necessary, without doubt; but it must not be allowed to exceed its healthy limits, to assume complete mastery over the personal man, making him narrow and hard, exclusively intent upon the pursuit of success at the cost of his faith in ideals. In ancient India, professions were kept within limits by social regulation. They were considered primarily as social necessities and in second place as the means of livelihood for individuals. Thus man, being free from the constant urging of unbounded competition, could have the leisure to cultivate his nature in its completeness. The Cult of the Nation is the professionalism of the people. This cult is becoming their greatest danger because it is bringing them enormous success, making them impatient of the claims of higher ideals. The greater the amount of success, the stronger the conflicts of interest and jealousy and hatred which are aroused in men’s minds, thereby making it more and more necessary for other peoples, who are still living, to stiffen into nations. With the growth of nationalism, man has become the greatest menace to man. Therefore the continual presence of panic goads that very nationalism into ever-increasing menace. Crowd psychology is a blind force. Like steam and other physical forces, it can be utilised for creating a tremendous amount of power. And therefore rulers of men, who, out of greed and fear, are bent upon turning their peoples into machines of power, try to train this crowd psychology for their special purposes. They hold it to be their duty to foster in the popular mind universal panic, unreasoning pride in their own race, and hatred of others. Newspapers, school books, and even religious services are made use of for this object; and those who have the courage to express their disapprobation of this blind and impious cult are either punished in the law courts or are socially ostracised. The individual thinks, even when he feels; but the same individual, when he feels with the crowd, does not reason at all. His moral sense becomes blurred. This suppression of higher humanity in crowd minds is productive of enormous strength. For the crowd mind is essentially primitive; its forces are elemental. Therefore the Nation is forever watching to take advantage of this enormous power of darkness. The people’s instinct of self-preservation has been made dominant at particular times of crisis. Then, for the time being, the consciousness of its solidarity becomes aggressively wide awake. But in the Nation, this hyperconsciousness is kept alive for all time by artificial means. A man has to act the part of a policeman when he finds his house invaded by burglars. But if that remains his normal condition, then his consciousness of his household becomes acute and over-wrought, making him fly at every stranger passing near his house. This intensity of self-consciousness is nothing of which a man should feel proud; certainly, it is not healthful. In like manner, incessant self-consciousness in a nation is highly injurious for the people. It serves its immediate purpose but at the cost of the eternal in man. When a whole body of men train themselves for a particular narrow purpose, it becomes a common interest with them to keep up that purpose and preach absolute loyalty to it. Nationalism is the training of a whole people for a narrow ideal; when it gets hold of their minds, it is sure to lead them to moral degeneracy and intellectual blindness. We cannot but hold firm the faith that this Age of Nationalism, of gigantic vanity and selfishness, is only a passing phase in civilisation, and those who are making permanent arrangements for accommodating this temporary mood of history will be unable to fit themselves for the coming age when the true spirit of freedom will have sway. With the unchecked growth of Nationalism, the moral foundation of man’s civilisation is unconsciously undergoing a change. The idea of the social man is unselfishness, but the idea of the Nation, like that of the professional man, is selfishness. This is why selfishness in the individual is condemned, while in the nation, it is extolled, which leads to hopeless moral blindness, confusing the religion of the people with the religion of the nation. Therefore, to take an example, we find men more and more convinced of the superior claims of Christianity merely because Christian nations are in possession of the greater part of the world. It is like supporting a robber’s religion by quoting the amount of his stolen property. Nations celebrate their successful massacre of men in their churches. They forget that Thugs also ascribed their success in manslaughter to the favour of their goddess. But in the case of the latter, their goddess frankly represented the principle of destruction. It was the criminal tribe’s own murderous instinct deified—the instinct, not of one individual, but of the whole community, and therefore held sacred. In the same manner, in modern churches, selfishness, hatred and vanity in their collective aspect of national instincts do not scruple to share the homage paid to God. Of course, the pursuit of self-interest need not be wholly selfish; it can even be in harmony with the interest of all. Therefore, ideally speaking, nationalism, which stands for the expression of the collective self-interest of a people, need not be ashamed of itself if it maintains its true limitations. But what we see in practice is that every nation which has prospered has done so through its career of aggressive selfishness, either in commercial adventures or in foreign possessions, or in both. And this material prosperity not only feeds continually the selfish instincts of the people but impresses men’s minds with the lesson that, for a nation, selfishness is a necessity and, therefore, a virtue. It is the emphasis laid in Europe upon the idea of the Nation’s constant increase of power, which is becoming the greatest danger to man, both in its direct activity and its power of infection. We must admit that evils there are in human nature, in spite of our faith in moral laws and our training in self-control. But they carry on their foreheads their own brand of infamy, their very success adding to their monstrosity. All through man’s history, there will be some who suffer and others who cause suffering. The conquest of evil will never be a fully accomplished fact but a continuous process like the process of burning in a flame. In former ages, when some particular people became turbulent and tried to rob others of their human rights, they sometimes achieved success and sometimes failed. And it amounted to nothing more than that. But when this idea of the Nation, which has met with universal acceptance in the present day, tries to pass off the cult of collective selfishness as a moral duty, simply because that selfishness is gigantic in stature, it not only commits depredation but attacks the very vitals of humanity. It unconsciously generates in people’s minds an attitude of defiance against the moral law. For men are taught by repeated devices the lesson that the Nation is greater than the people, while yet it scatters to the winds the moral law that the people have held sacred. It has been said that a disease becomes most acutely critical when the brain is affected. For it is the brain that is constantly directing the siege against all disease forces. The spirit of national selfishness is that brain disease of a people which shows itself in red eyes and clenched fists, in the violence of talk and movements, all the while shattering its natural restorative powers. But the power of self-sacrifice, together with the moral faculty of sympathy and cooperation, is the guiding spirit of social vitality. Its function is to maintain a beneficent relation of harmony with its surroundings. But when it begins to ignore the moral law which is universal and uses it only within the bounds of its own narrow sphere, then its strength becomes like the strength of madness, which ends in self-destruction. What is worse, this aberration of a people, decked with the showy title of ‘patriotism’, proudly walks abroad, passing itself off as a highly moral influence. Thus it has spread its inflammatory contagion all over the world, proclaiming its fever flush to be the best sign of health. It is causing in the hearts of people, naturally inoffensive, a feeling of envy at not having their temperature as high as that of their delirious neighbours and not being able to cause as much mischief but merely having to suffer from it. I have often been asked by my Western friends how to cope with this evil, which has attained such sinister strength and vast dimensions. In fact, I have often been blamed for merely giving a warning and offering no alternative. When we suffer as a result of a particular system, we believe that some other system would bring us better luck. We are apt to forget that all systems produce evil sooner or later when the psychology which is at the root of them is wrong. The system which is national today may assume the shape of the international tomorrow; but so long as men have not forsaken their idolatry of primitive instincts and collective passions, the new system will only become a new instrument of suffering. And because we are trained to confound efficient systems with moral goodness itself, every ruined system makes us more and more distrustful of moral law. Therefore I do not put my faith in any new institution but in the individuals all over the world who think clearly, feel noble, and act rightly, thus becoming the channels of moral truth. Our moral ideals do not work with chisels and hammers. Like trees, they spread their roots in the soil and their branches in the sky without consulting any architect for their plans. **Reference:** Edited by Anikendra Sen, Devangshu Dutta and Nilanjana Roy, introduced by Ramachandra Guha. [Patriots, Poets and Prisoners: Selections from Ramananda Chatterjee's The Modern Review, 1907-1947](https://books.google.co.in/books/about/Patriots_Poets_and_Prisoners_Selections.html?id=F9oQvgAACAAJ&redir_esc=y). HarperCollins Publishers India. _Previous musing: [Pitfalls in Our Industrial Policy](https://indianliberals.in/content/pitfalls-in-our-industrial-policy/)_[(1959)](https://indianliberals.in/content/pitfalls-in-our-industrial-policy/) --- ## [Musing] The Myth of Free Education URL: https://indianliberals.in/musings/the-myth-of-free-education/ ### Body _Produced below is an essay by Om Prakash Kahol from the magazine ‘The Indian Libertarian’ published in January 1959. _ There used to be a wide-spread belief among the illiterate masses before Partition that in Free India, milk and ghee would be supplied free to every child; all sorts of medicines would be available in the hospitals without any cost; customers would get provisions and sweet-meats in the market without having to pay any price. And in the same train of ideas came the fanciful notion that education up to the highest degree would be free. Ours is a land, where people seem to believe in all seriousness that Aladdin's Lamp is still preserved in the Mughal Fort at Delhi and Herculean tasks like the manufacture of penicillin, construction of moon-rockets and installation of thermonuclear plants can be accomplished without entailing any cost to ourselves.  When, for our defence, we can confidently depend upon the arrival of the Lord Himself with His Sudarshana Chakra and consider all military preparations unnecessary is there any wonder if we also genuinely believe that some superhuman race of teachers will someday descend on earth this part of it and convert by a magic touch, all students into engineers, doctors and lawyers without demanding a penny by way of remuneration? Thank God, ten years experience in Free India has taught them that we cannot get "something out of nothing." There are no shortcuts in the scheme of nature. We can deceive ourselves into the belief that in a free country we can get amenities without having to pay anything in return but we cannot deceive nature. Most people have been disillusioned by now and no longer labour under the myth that they can freely help themselves with a rosagulla, at the confectioner's shop and nobody would bother them about the price. Provisions, medicines and other necessaries have to be paid for even in Free India; and if someone is getting them free, rest assured, someone else not always in sight, is paying the price. Whenever we get comfort and have not paid for it, we must realise clearly that we are enjoying it at somebody else’s cost.  ### **“Free education” - a mere jugglery of words** The day dream of a free-education scheme is a hangover of the anti-rational mental attitudes of pre-Partition days. The talk of 'free-education’ appears very fashionable at first sight and, as the fallacy involved in it is not easy to detect, it proves a handy tool in the hands of crafty political demagogues at the time of elections.  Educational procedure involves labour of the teacher-which must be paid for. The question is: who should pay for it? If education is not 'free', the scholars pay for it in the form of tuition fees. And if it is imparted 'free', the teaching staff has still to be remunerated, but now the money comes in the form of taxes, or special levies from those, who may not be directly concerned in the matter. The description 'free education’ thus turns out in the ultimate analysis, to be a clever device for confusing the public mind and to keep them well-fed on glittering slogans. There is nothing 'free' about it, for what is rejected as tuition fee, is accepted in another form-as ‘educational cess' or as a 'special levy.' This jugglery with words can collectively hoodwink masses in lands of befogged intelligence only, where people are unable to detect, by analysis, the subtle fallacies inherent in the arguments of state bureaucrats and professional politicians. Any decision by a government to make education ‘free' or even 'cheap', must be taken by the people as a warning to be prepared for increased taxation; and the step would not be in any way different from a decision to abolish postal charges and quietly to double railway freight! In a rational financial system, the expenditure on a public utility department should, at least in part, be met by revenue accruing from the same. And when viewed against this background, the realisation of reasonable tuition fees from the scholars, especially from those in the higher classes, does not seem to be as baneful a practice as it is made out to be and need not be done away with. This, in fact, appears to be the only sound method to finance the education department. Extra taxes should only supplement income from tuition fees.  ### **Death warrant against private institutions** The point we have developed brings out the unsound nature of the decision of the Punjab Government to impart free education in state-controlled junior schools. From where will the money come for the salary bills of the teachers? No matter how cleverly they put it has to come from the public; and the procedure they have adopted means only one thing, if it means anything. It means that money spent on Tom should not come from Tom- that is a cruelty. Money spent on the education of Tom should come from the pocket of Dick. Let us look at the scheme from another angle. The number of scholars actually studying in government institutions is much smaller than those attending private ones. In the very nature of things, these privately-managed institutions cannot give education gratis, unless the salary bill of the staff is paid from the state exchequer. All other philanthropic sources- capitalists, landlords, Rajas and religious endowments-whence money could go to finance private enterprise in education in the past-have virtually dried up, thanks to the much-advertised Socialist and Secular pattern of society. If the state bureaucrats were really interested in popularising education they should have concurrently accepted the moral responsibility of meeting the annual budget of private institutions from the state revenues. The decision to remit fees in government schools, without any substantial aid to the privately-managed ones, is in effect a death warrant against them. And if some of them manage to survive, they will survive not because of the benign government but in spite of it.  If out of chagrin, the management of private institutions decide to withdraw from this unpleasant competition with the all-powerful government and suspend their activities, the education over seventy percent of the children, now at school, will come to a stop. It is a strange way of promoting child-welfare to provide free educational facilities to a privileged few, and to leave the vast majority to rot by the road-side! And that will be the result if some privately-managed institutions are forced to close down, being unable to compete with those financed by the government from out of the state funds. ### **Concrete suggestions** To sum up, we must recognise that: - There is no such thing as free education. Money paid to the teachers comes ultimately from the people, as taxes if not as school tuition fees. - The talk of free-education is tendentious. It is a clever device by which politicians are trying to confuse the public. - If the Government seeks to collect funds for purposes of education, not by raising tuition fees, but by enhanced taxes, the benefit of 'free' studentship must accrue to all pupils, who belong to the school-going age, and not to a favoured few only. The government must forthwith ban imposition of tuition fees on pupils in all the schools and remunerate the teachers engaged in approved institutions, from the government treasury. - If the government cannot bear the burden of imparting 'free-education' to all the scholars, it should desist from creating difficulties in the way of those private agencies which are sharing this burden with it. This means, that while all persons deriving the benefit of educational facilities must be required to pay the prescribed fees, whether in a government school or in a private one, the grant-in-aid rules should be so liberalised that the private institutions do not have to look to philanthropic people for help, but their deficit should be wholly met by the government. In the end, I should like to submit that, in my opinion, the educational institutions should be maintained neither exclusively on special taxes, nor exclusively on tuition fees, but on both. The fees should be rated low enough to leave a deficit of about 25% at the school stage and about 50% at the college and University stages. The deficit should be paid from the state treasury to the private institutions as well as to those under the direct control of the government. After all, the private agencies are promoting the same cause, for which the government stands and are drawing money from the public-money in the form of fees-by using their own influence on people, where the government may have to resort to more coercive methods: taxation and compulsory levy for achieving the same end.  All talk of 'free education' must end once for all, because it is deceptive. type=content&p=8606). Needs editorial review._ --- ## [Musing] The Party or the People? URL: https://indianliberals.in/musings/the-party-or-the-people/ ### Body _Vasant Bhagawant Karnik an eminent trade unionist, author and writer penned his thoughts on “human nature’s difficulty to conform to a less-significant role” in the January 1961 issue of Freedom First magazine. He cites the tension between Dr Sampurnanand (the then-Chief Minister of Uttar Pradesh) and Mr Chandra Bhanu Gupta (the future Chief Minister of Uttar Pradesh) as one of the examples of differences between organisational and parliamentary wings of a political party in India._ _You can read the original, unabridged version on _[_Page 1_](http://www.freedomfirst.in/uploads/issues/pdf/104.pdf)_ here._ Differences and disputes between the organisational and the parliamentary wings of the Indian National Congress have now become a commonplace affair. Every day newspapers publish reports of a conflict in this or that State or of the efforts to patch it up. Ordinarily, these internal disputes in the party need not have concerned others. But the Congress Party holds such a preeminent position in the country that even internal quarrels amongst its members have a vital bearing upon its interests and, more particularly, upon the growth of democratic institutions and conventions. This gives those quarrels a much broader significance, and how they are tackled becomes a matter of national importance. In most cases, the quarrels involve no issues of principle or programme. They usually relate to questions of power and patronage. Those who are in charge of the organisational wing find it to their shame that, while they had some importance during the days of the elections, after the elections and the formation of the Ministry, all power and patronage get concentrated in the hands of Ministers, and they lose all their importance. Human nature being what it is, it is difficult for them to reconcile themselves to that position. In addition, there are always groups and cliques in a State. There is a variety of local and sectional interests. A Chief Minister can only satisfy some of their claims. Dissatisfaction and discontent develop, and they can easily assume the form of a dispute between the organisational and parliamentary wings and create a crisis for a Ministry. In Uttar Pradesh, the crisis appeared in its crassest form. A person disliked by the parliamentary wing was elected the President of the Pradesh Congress Committee. The Chief Minister, Dr Sampurnanand, had earlier made the election a prestige issue and had declared that he would regard the election of Mr CB Gupta as a vote of no-confidence in him. There was such a reason why Dr Sampurnanand should have adopted that position. It was not proper for him to dictate to the organisational wing as it would be wrong for the executive wing to dictate to the parliamentary branch. In the end, the dictation of the organisational wing prevailed, and Dr Sampurnanand had to make room for Mr CB Gupta as the Chief Minister. The dictation of the organisational wing prevailed through the instrumentality of the Congress High Command. The Congress High Command decided that Dr Sampurnanand should go and Mr CB Gupta should take his place. This decision was thrust upon the unwilling Congress Parliamentary Party of the State. The Parliamentary Party wanted Dr Sampurnanand to continue as the Chief Minister. When he disagreed, a large majority of its members decided to elect another to the post of another senior Minister. It was not, however, allowed that freedom. It was compelled to choose Mr CB Gupta as the High Command had decided to give him the place of Dr Sampurnanand. To any dispassionate observer, this would appear to be a gross violation of all democratic principles and practices. In a parliamentary democracy, it is the persons selected by the people who should have the final voice regarding the ministry's leadership and composition. They represent the people far better than the members of a party committee. The people elect them as a whole. In contrast, a party committee is elected only by the members of the party, who usually form a small percentage of the population. If a people’s government is aimed at it, the elected representatives of the people should rank higher than the officials of a party. If the latter is allowed to dictate to the former, the ultimate result will be the rule of a party in opposition to the rule of the people. The choice that the Indian National Congress has to face is the choice between the party and the people. What will its policy aim–to assert and maintain the importance of the party machine or help the people rule themselves through their elected representatives? There was a time when the people as a whole were identified with Congress. That was during the national struggle when the people’s will was expressed through that organisation. The situation underwent a radical change after attaining national independence and establishing a democratic government. A Parliament and State Assemblies are elected based on the adult franchise selected as the organs of the people’s will. The Congress had then taken a back seat as one of the political parties in the country though, no doubt, the most numerous and influential amongst them. The best and most talented Congress leaders entered Parliament and State Assemblies and began to function through them rather than through the party organisation. The parliamentary wing began to gain importance and precedence over the organisational wing. That process has begun; the organisational wing dislikes the development, but it will have to be reconciled to it if the country is to progress towards democracy. A parliamentary party is primarily responsible to the electorate which elects it. The organisational wing of a party must accept this essential fact and adjust its actions and policies accordingly. It is only in communist countries that the organisational wing gets the primacy, for in those countries, there is no parliament in the real sense of the term, and the highest authority that party members have to serve is the party and not the people. In our country, we have yet to build up our democracy. The Congress has to shoulder that task as the main and the major party. It has to create healthy conventions. Conflicts between the organisational and the parliamentary wings will arise from time to time. Instead of relying on the exigencies of the situation, a rule of general application will have to evolve for their solution. The rule will have to conform to the principles of democracy. Democracy demands that elected representatives must have in any conflict primacy over the managers of the party machine. As democracy develops, the parliamentary wing will gain predominance over the organisational wing. In UP, the former subordinated to the latter. That connotes the subordination of the people to the party, which is the sure road towards dictatorship and totalitarianism. _Previous musing: [Prospects of Democracy in India](https://indianliberals.in/content/prospects-of-democracy-in-india/)_ --- ## [Musing] The Perils of a Welfare State URL: https://indianliberals.in/musings/the-perils-of-a-welfare-state/ ### Body Bibek Debroy, in this excerpt from the book 'After the Welfare State', talks about the perils of a Welfare State and questions whether it has actually aided the country's growth and if it is a sustainable model to follow. What has the socialist State done in India? It has prevented freedom of choice and opportunity. It has created a shortage economy. It is a myth that licensing ended in 1991. 1991 brought an end to licenses for manufacturing. Licensing and controls continue for assorted services and agriculture. The socialist State prevented competition. This deprived consumers and also made producers inefficient. And in the name of reducing poverty and inequality, the socialist State introduced public expenditure of doubtful efficacy and efficiency. Though the expression “welfare State” is not used all that often in India, when the public expenditure is criticized, there is often a defence in terms of the welfare states in developed countries. People who advance such justifications are rarely aware of what such so-called welfare States do in practice and of the opportunity costs of those expended resources, in terms of what future generations have to pay for that profligate public expenditure. _Access the full document [here](https://ccs.in/sites/default/files/2022-08/book-after-the-welfare-state.pdf)._ _This is an excerpt from the book ‘After Welfare State’_ _Read _more: [https://spontaneousorder.in/so-musings-the-limits-of-state-action/](https://spontaneousorder.in/so-musings-the-limits-of-state-action/) --- ## [Musing] The Perils of State Support URL: https://indianliberals.in/musings/the-perils-of-state-support/ ### Body Plato the first philosopher-statesman had no compunction in accepting the fact that it was the business of the rulers to lie. In the Republic Plato wrote: "it is the business of the rulers of the city if it is anybody's business to tell lies, deceiving both its enemies and its own citizens for the benefit of the city." He urges that these are useful only as medicine, but the ruler of the state must not behave like some of those ordinary doctors who have no courage to administer strong medicines. He must be a more courageous man since he must be determined to administer a great many lies and deceptions - of course for the benefit of the ruled. In this sense, all modern rulers and politicians are 'Platonists.' _Public intellectuals and institutions like think-tanks essentially dabble in ideas, both to explain the world and help change it. The mechanism of the entrenched power, if exclusionary,  often poses an obstacle to widespread prosperity and human flourishing. Intellectuals, in this regard, uncover the operation of power and end up speaking truth to power. Liberals, in particular, tend to be wary of power exercised by the state, given its legitimate monopoly over violence._ _How should then the liberals see the relation between intellectuals and the state? In a 1986 article published in Freedom First, the prolific Marathi editor Govind Talwalkar provides an answer. For him, the pursuit of political power and intellectual endeavours are fundamentally contradictory undertakings. The former involves lying as business as explained by Plato while the latter is concerned with telling the truth and also beauty in case of literature. As such, intellectual morality ought to turn into a project of uncovering state oppression. _ _Talwaklar further argues against the state patronage of intellectual and creative undertakings, for it breeds inefficiency and makes intellectuals subservient to the state. Additionally, Talwalkar warns against the tendency of intellectuals to man the state-funded institutions only to perpetuate mediocrity and nepotism. The public universities and government-funded research institutions in India are the prime examples of ideological capturing, enabled by state control of funding and appointments. The implication of Talwalkar’s writing couldn’t be more explicit: intellectual enterprises would do well to maintain distance from state patronage and to keep speaking truth to power._ _Produced below is an extract from the article._ The modern state is all pervasive and the world of letters cannot function completely independent of it. But the role of the state and that of letters is contradictory if not in conflict with each other. Ideological states pledge themselves to control all aspects of human activity. Fired by a certain philosophy, they want to build an utopia and, what is worse, they concentrate excessive power and build a closed society. Plato the first philosopher-statesman had no compunction in accepting the fact that it was the business of the rulers to lie. In the Republic Plato wrote: “it is the business of the rulers of the city, if it is anybody’s business to tell lies, deceiving both its enemies and its own citizens for the benefit of the city.” He urges that these are useful only as medicine, but the ruler of the state must not behave like some of those ordinary doctors who have no courage to administer strong medicines. He must be a more courageous man, since he must be determined to administer a great many lies and deceptions – of course for the benefit of the ruled. In this sense all modern rulers and politicians are ‘Platonists.’ Literature as philosophy must seek truth as well as beauty and cannot reconcile itself with politics or the state. So, for centuries we have witnessed a conflict between the two and many writers, poets, and intellectuals have been condemned to poverty and prisons, even to sacrificing their lives. Nazi Germany, Fascist Italy, many South American states and many Communist states offer examples. Osip Mandlestam’s life is a moving account of a poet’s struggle and Solzhenitsyn a living example of the undaunted spirit. If it is the business of the ruler to lie, it is the business of the writers to tell the truth. lt is not only totalitarian states that strangulate truth; democratic governments too do the same. ln Truth and Power, Mr. Hans Morgenthau wrote: “The President of the United States, too can do almost anything. He can play with truth, deform it and discard it at his whim. But there is one thing he cannot do, he cannot still the voice of truth.” Therefore the intellectuals have to stick to their guns. “In the face of this misunderstanding and scorn for the function the intellectual can and must perform for the political sphere, the intellectuals of America can do one thing; live by the standard of truth – that is their peculiar responsibility as intellectuals and by which the man of Power will ultimately be judged as well,” Morgenthau averred. However, it is not my contention that in a democratic society the world of letters should all the while be at loggerheads with the state. lt never is. Insolence of power must be resented but at the same time the arrogance of the intellect should not be tolerated. We have also to guard against hypocrisy and intellectual dishonesty. Everyone loves flattery, the difference is only one of degree. Writers and artists are easy victims. Even though writers and intellectuals are zealous about their freedom many of them crave for recognition from the powers that be. _The full text can be accessed _[_here_](http://www.freedomfirst.in/uploads/issues/pdf/391.pdf)_ (page 13). _ [_IndianLiberals.in_](http://indianliberals.in/)_ is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context._ Read more: [Connected Histories of Rammohan Roy’s Liberalism](https://spontaneousorder.in/connected-histories-of-rammohan-roys-liberalism/) --- ## [Musing] THE MISSION OF LIBERTARIANISM URL: https://indianliberals.in/musings/the-mission-of-libertarianism/ ### Body The following essay by M.A. Venkata Rao has been taken from a 1958 issue of [The Indian Libertarian](https://indianliberals.in/content/the-indian-libertarian-october-1-1958/). While outlining the rise of Karl Marx's labour theory of value, the author revisits theories of labour rooted in individualism. He revisits the need for individualism and a limited State, highlighting his take on the libertarian vision for labour, land, production, and education.In Europe and America a  branch of the Enlightenment school of thought that prepared for and preceded the French Revolution developed a  strand of socialism. While the central stream of inspiration released by the Revolution guided thought and reconstruction into channels of national democracy under the lead of the new commercial and industrial classes (whom Karl Marx called the bourgeoisie) side streams of what may be roughly called "socialist thought" sprung up seeking to mould social institutions including property and State on equality and fraternity rather than on liberty. The liberal democratic State evolved all over the continent and in North America on the basis of individualism which in the realm of economics assumed the shape of capitalism. The leaders of the French Revolution and of the subsequent democratic evolution in England and other States evolved a philosophy of individualism stressing the key role of free economy or freedom of enterprise as the pivot of progress. Socialist thinkers like Proudhon, Fourrier and Saint Simon were not satisfied with the early decades of the working of capitalism in the Napoleonic era and the Restoration of the Bourbons. They saw clearly that the ideals of equality and fraternity that imparted such a glow to the revolutionaries as if they were the creators of a new dawn of perfection were jettisoned by the bourgeoisie. The new enterprise and wealth joined hands with empire and were concentrated in the hands of the new rich, a  small section of the nation. The bulk of the masses remained poor and were exploited by the bourgeoisie almost as much as the aristocracy oppressed the peasants in their ancestral estates. In England too discontent at the new exploitation of the bourgeoisie strengthened and expressed itself in a number of movements of which the Chartist struggle was the chief. Factory Acts and the First Reform Act of 1832 were the first symptoms of the new social conscience. The new world of commerce and industry of the Industrial Revolution came to be defended by liberal democratic thought of which Bentham, James Mill and his more famous son John Stuart Mill were the principal protagonists. Their work in economic, legal and political thought guided the development of democratic institutions and civil rights throughout the nineteenth century. But towards the end of it, new streams of thought came to be felt making for socialism and collectivism. One was the idealism of T. H. Green and Bernard Bosanquet, which gave a new ethical basis to the State and coalesced in its effect with socialism. Fabianism assumed greater importance as the source of reform and welfare as the century turned the corner and the Labour Party adopted it as the sheet-anchor of their policy. Thus British thought sublimated the hate-filled class-war doctrine of violent revolution sponsored by Karl Marx into its own characteristic evolutionary, non-violent, parliamentary way of introducing socialism or collectivism. Today it has become the official philosophy of the Labour Party and the climate of thought generally among the intelligentsia of all parties. On the continent, the early part of the century began with the dominance of the Positivism and Religion of Humanity of August Comte. His scientific humanitarianism coloured the intellectual landscape in France and was reinforced with· the integral or communitarian forms of socialism sponsored by Proudhon, Saint Simon and Fourrier. These thinkers tried to cure property of its individualism or selfishness by suggesting methods of sharing it in communes or phalansteries of various kinds. They also opposed the centralizing bureaucratism of the expanding State. A side line of thought adopted forms of anarchism in trying to resist the crushing power of the Omnicompetent State. Prince Kropotkin and Bakunin became the principal representatives of this anarchocommunist trend of thought.  But the most successful of these trends was that represented by Karl Marx, partly because he founded the International Working Men's Movement which acquired influence from the middle of the century and ultimately became the dominant form of socialism. It has been the misfortune of humanity that it was the violent, class-war doctrines of Karl Marx that got crystallised as the authentic form of socialism and the sole scientific system . and saviour of labour throughout the world. The adherence of Lenin and the Russian revolutionaries and that of the German social democrats under Lassalle contributed to enthrone Marxist communism in this dominant position. The Russian Revolution of 1917 and its triumphant career to its present position of World Power challenging the whole free world has added hypnotic power to this collectivist, conspiratorial, violent form of communism. Communism has today become the climate of thought in most countries. Even where a small part of the intelligentsia is free from the prevailing views, they are influenced all the same to a more or less extent, so that the cause of freedom is put on its defence. It is not State aggrandisement that has to explain and justify itself but on the other hand the claim of human liberty and individuality! The capitalist Robert Owen fell in with the French socialists and initiated worker's communes or settlements in England, Scotland and even the United States in the early decades of the last century. An American thinker called Josiah Warren joined Owen's socialistic settlement and was inspired to start his own village settlements on a more individualist basis. He developed a time and labour theory of value in his own way. In Karl Marx's hands, the theory was distorted to become the surplus theory of value in order to support the thesis that all capital is robbery of the value created by labour. In Warren's hands, it became the foundation of a new equalitarian individualism which asserted the right of each individual to the proceeds of his labour as measured by the time taken in producing the product of industry. Measurement of labour contributions became a subtle and vexatious calculation and source of trouble among members of settlements. His example inspired a line of thinkers to reflect on the social aspects of individual liberty Stephen Pearl. Andrews developed the outlines of a science of society. Others developed the aspects of cooperation and mutual aid in banking and other forms of economic production and exchange. Others specialised in problems· of currency and inflation. Others investigated the effects of State interference in banking, currency and economy generally. These thinkers of the libertarian school in America developed reflection both into the role of property, its meaning, function and limitations .and into the role of the State in social affairs and individual life. The general line of thought in regard to both aspects was to discover the degree of waste and frustration and complication involved in anti-social uses of property such as are indulged in by monopolies and cartels by the State outrunning its legitimate field of police and justice and by welfare policies of robbing Ram to pay Kishen. These excesses of the individual and the State lead to ever rising costs of production, to excessive pressure of economic groups on the State to get something for nothing, to rising inflation and confusion of values all round and to the collapse of confidence in currency and economic production generally and to the emergence of unnecessary economic crises with over-or under-production and unemployment. The remedy is to return to individualist economy regulated by provisions against monopolies to safeguard the equal liberty of all. This principle of the, ·equal liberty of all for engaging in free enterprise within the law (to exclude fraud and the annexation of unearned profits) in sufficient, say the libertarians, to justify the imposition of checks on those who take undue advantage of the freedom granted. If these principles are intelligently followed, it is urged, the State and society will be freed from the excessive burdens from which they are suffering at present under the influence of collective ideas. They will be free from much of the present load of public debt. The State will be compelled by individualist citizens to live within its means and not to create artificial money by issue of loans and not to burden the present generation by ever-rising loads of interest on public dept. Though the principal is supposed to be paid by future generations, as a matter of fact it is the present generation that has to pay heavy interest.. These interest payments to one class of citizens namely bond-holders will distort the economy by conferring on them more purchasing power than on the rest of the community. This distorts the economy in favour of unearned incomes annexing too much of the capital resources of the community towards the satisfaction of a few, leaving the demands of the vast majority starved and unfulfilled or under-fulfilled. The central stream of thought in advanced democratic countries like the U.S.A. is that of liberal democracy formulated in the early and middle periods of the nineteenth century. Today technological industry, the growth of population and the advance of communication media-radio, newspapers, wireless, aeroplane for passenger and goods traffic etc. have all conspired to confer more and more powers on the State to regulate the myriads of new inter-relations among citizens. Organisation has tended to become ever more complex and interwoven. Hence the feeling of inevitability in regard to the growing tendency towards collectivism and the expansion of State power. Collectivism has become the illusion of the epoch today in which the rights and duties of the individual citizen as a self-determining and self-realising person are lost to view. Individuals and small groups feel lost in the vast agglomerations of large nation-States. Even small States feel a prey to massive influences and pressures impinging into their life from outside. The wheel has come full circle. The individualist philosophy of John Stuart Mill and his followers which guided liberal democracy is today eclipsed by the communist collectivism of Karl Marx, particularly in respect of economy. Adam Smith and Mill are both put into the shade. They have become "Gods that failed.” But today doubts and misgivings are being felt in many quarters that we have embraced a remedy worse than the disease. After all the only known reality in human life is the individual centre of experience, of thought, feeling, action and fellowship - individual men and women. Sociologists are formulating theories of the right relationship between primary and secondary groups. The former like the home, neighbourhood and religious or educational fellowship are primary in moulding human life. They deal with individuals as full rounded persons and not as fragments - hands or members or customers or wage earners or employers or officers or rank and file anonymous common men. Secondary associations like occupations, amusements or casual groups as in hotels and railway carriages are necessary but if they crowd out much of the scene and activity of life, man is atomised and impoverished. Neuroses come to prevail. Suicides, mental aberrations, juvenile delinquents, divorce proceedings, prostitution, gambling, alcoholism, corruption in economic and political life will all make themselves felt in disturbing degrees. Libertarians call for a greater simplification of institutions, a reform in the use of property and a return to the limited role of the State in social life so that the submerged individual may be released for a new career of purposeful, healthy activity in which science and the other achievements of the modern spirit may be used more wholesomely to help men and women to fulfil themselves in pursuits within their reach and power of assimilation. The libertarians call for a new relationship to land, so that unearned income may not accumulate in hands that do not contribute to production. Since land is limited unlike other forms of industrial or commercial property, it needs to be kept in the hands of people who actually use it for production, eliminating functionless or parasitic holders. The libertarians are also interested in education. They are exploring the avenues whereby the individual may be led through self-directed thought and investigation to discover the right relations between individual and society. The new aim is to strengthen dispositions of cooperation and individual self-reliance during the process of learning. It is also necessary to destroy the roots of class antagonism by imparting the joys and skills of using tools so that the ancient class distinction of workers and lords may disappear in the minds of men and women. Work and culture should be integrated.  Freedom in economic and political life has to be supported by a new psychology of cooperative and creative living. fostered in creative education inspired by a vision of human unity and human progress in free and joyous fellowship. If a gradually increasing elite imbued with these ideals could be developed through discussion, propaganda and group life, the collectivist illusion of the epoch could be made to melt and a better day of happy, free, cooperative humanity can be ushered in by and by. This is the aim of the Libertarian Social Institute. _Previous musing: [THE APPLICATION OF SCIENCE AND TECHNOLOGY TO SOCIO-ECONOMIC DEVELOPMENT](https://indianliberals.in/content/application-of-science-and-technology/)_ --- ## [Musing] The Place of Free Enterprise in a Backward Economy URL: https://indianliberals.in/musings/the-place-of-free-enterprise-in-a-backward-economy/ ### Body _D. N. Hosali’s publication, "The Place of Free Enterprise in a Backward Economy," critiques the shift towards socialism in India. Hosali argues that socialism stifles the growth and efficiency of the private sector, which is crucial for developing backward economies. He contends that free enterprise is more effective in driving economic progress and ensuring freedom._ Chambers of Commerce and trades bodies in the country performed a very useful function in our economy in the past. It was through the Chambers of Commerce that the business community voiced its grievances and sought redress for them at the hands of the Government. The Governments of the past also attached great importance to the pronouncements made by them and tried to modify their policies to the extent possible to suit the requirements of trade and industry. It was as a result of this that even under an alien Government our commerce and industry made significant progress during the past quarter of a century. But alas, during the past years we have seen a complete reversal of these policies. Although the old procedure of inviting Ministers of the Government to the Annual Meetings and submitting to them the difficulties of trade and industry continues, little or no importance is attached to the pronouncements of the Chambers of Commerce, and the policies of the Government are shaped in complete disregard of, and often in detriment to, the interests of trade and industry. I state this after due deliberation. As to the numerous representations made by this Chamber during the past two or three years, it has obtained redress hardly on any issue. This is a significant matter, as it indicates a change in the attitude of the Government towards that section of the population which is traditionally in the pursuits of private trade and industry. Since the decision of the Government to establish a socialist economy in the country, this section has come in for quite an unnecessary measure of discrimination and has been discredited and discouraged at every stage. It is told that ours is now a socialist state and hence the private sector must subordinate its interests to the state plan and if need be liquidate itself in course of time. The statements made by Ministers of the Government are quite baffling and are many a time diametrically opposed to each other. Prime Minister Nehru, who is a great believer in democracy, said at the A.I.C.C. meeting in January last that he would prefer slow progress to risking individual independence for rapid progress. On the other hand, Shri T. T. Krishnamachari, the Finance Minister, has declared that the Second Plan would demand sacrifice and regimentation of our economy, and Shri M. M. Shah, Union Minister of Heavy Industries, said the other day that the public and private sectors could easily coexist without any kind of trouble for the next ten or fifteen years which means by implication that after that the private sector must expect the deluge. Where do all these statements lead us? The private sector needs as much planning as the public sector. Is it possible for any group of entrepreneurs to go in for any big plan of industrialisation when the only lease of life you give them is ten to fifteen years? Needless to state that the policies of the Government act as a serious deterrent to the growth of any new industry in the private sector. This serious situation has arisen as a result of the adoption of the socialist economy by our Government. Our Government claim that their policy has been endorsed by the country; which means that the vast majority of the unthinking millions of the country have understood the implications of this policy and approve of it. On the other hand, there are thousands of thinking people in the country who are convinced that these policies will not only result in raising the standard of living, but may well create a totalitarian regime. But nevertheless the determination of our Government to press forward with their socialist plans seems to gather strength as time goes on, as though socialism is the only panacea for our economic ills, and the private sector represents all the anti-social evils in our body politic. Read the complete text [here](https://indianliberals.in/forum-of-free-enterprise/the-place-of-free-enterprise-in-a-backward-economy-by-dn-hosali.pdf). type=content&p=8592). Needs editorial review._ --- ## [Musing] The Retreat from Socialism URL: https://indianliberals.in/musings/the-retreat-from-socialism-2/ ### Body _A publication of the [Project for Economic Education](https://indianliberals.in/content/the-retreat-after-socialism/), co-sponsored by the Friedrich Naumann Foundation, the following text is a reproduction of the 7th C. D. Deshmukh Lecture. The lecture was conducted by the India International Centre and delivered by B. K. Nehru. Through the lecture, he examined India's experiment with democratic socialism and why socialism retreated from the global political scenario. _I am thankful to the India International Centre for having invited me to deliver the Seventh C.D. Deshmukh Memorial Lecture thus giving me an opportunity to pay my tribute to a man whom I knew well and with whom I had the privilege of working for a number of years in various capacities. In fact, such knowledge of the mysteries of high finance that I ever had was due to the meticulous care which he took in chalking out the programme for training for me when I went to the Reserve Bank of India to be trained in those mysteries, as a fresh recruit to the then newly constituted finance and commerce pool of the Government of India 50 years ago.  Sir Chintaman Deshmukh, by which title his contemporaries knew him better, was then Secretary of the Reserve Bank and although he was physically absent, being on what was then called "home leave", the stamp of what he had decided I should learn was clearly visible on the teachers who taught me.  Sir Chintaman was a man of extraordinarily variegated talents and interests which he pursued till the end of his days. His knowledge of finance was of course well-known. He made a name for himself in this field first as Finance Secretary, of the then Central Provinces, then successively as Secretary, Deputy Governor and Governor of the Reserve Bank of India, for a short period as Ambassador at Large for Economic Affairs - in which capacity I followed him after a respectful interval - and finally as Finance Minister of India, during all of which time I came into intimate contact with him.  His interest in botany was lifelong; it was evidenced in the striking beauty of the gardens of the houses in which he lived - I remember particularly the Reserve Bank House in Bombay and No. 1, Willingdon Crescent in Delhi which developed under his tender care and became things of great beauty. To spend an evening with him when he was in the mood to recite Sanskrit slokas was a memorable experience, though for ignoramuses such as myself his recitation went above our heads and had to be translated into elementary English.  His contribution to this Centre is well-known to all of you; it could not have become what it now is had it not been for his guidance and the care with which he tended this infant plant. This afternoon I have chosen as the title of my lecture "The Retreat from Socialism". An alternative title could well have been "Chun kufr az ka'aba bar Khezad kuja manad musalmani". For when the High Priests of Socialism in the Soviet Union and China have themselves forsworn it, it is time to ponder at some length over this complete "bouleversement" in the existing world order. I do not wish this evening to discuss at all the political changes that are taking place but to limit myself to the economic. This is because while the political consequences of the change are of great importance they are not likely overly to affect our foreign policy.  I say this for the same reason as Mr. Lee Kuan Yew so pithily summed up in his remark "It is well-known that when elephants fight it is the grass alone that suffers; it is not equally well-known that when elephants make love it is again the grass alone that suffers". The economic changes on the other hand have lessons which it would be wise for us to learn. I propose to examine with you what this socialism is from which the world is retreating, the reasons why we in India adopted socialism as our guide, what the reasons are which have caused this retreat, the consequences of socialism in our country and finally what, in the light of changed circumstances, we should now do.  The word socialism literally is meant to convey only that society should be so organised that the interests of the members of that society as a whole should take precedence over the interests of a part of that society whenever there is a conflict between sectional interests~ and social interests that conflict must invariably be resolved in favour of the latter. With this objective nobody can possibly differ; whence it is that the word has got attached to it a magic connotation. But how this desirable end has to be achieved in human society, with its innumerable injustices and unfairnesses and illogicalities, is something on which people have never agreed.  Modern socialism, which has had its roots in the thoughts of seekers after a juster society in the Europe of the 18th and 19th centuries, can be separated broadly into two streams. One is the humanism of St. Simon and 3 Fourier in France and Robert Owen in England which believed in evolution, which culiminated in the Fabian socialism of the turn of this century in England. The other school was born in 1848 with the publication of Karl Marx's Communist Manifesto which believed not in evolution but in revolution and which has had the most profound effect on the history of the world. Fabian socialism (which was essentially what we adopted in India in common with much of the democratic world) while including in itself the humanism of the earlier thinkers was nevertheless powerfully affected by Marxist thought. While the Fabians rejected outright the revolutionary approach, they accepted certain parts of Marxism. These included, very importantly, the concept of ownership by the State of the means of production and distribution and the rejection of the free market economy, which they wished to replace with a command economy regulated through physical controls.  This was because quite patently a market economy unregulated by the State was not necessarily free. Being subject to enormous pulls and pressures of powerful vested interests, it did not result in the best utilisation of resources that the divine hand of Adam Smith thought that it would. The Great October Revolution of 1917 established for the first time in history a State based on Marxist principles. It is a strange irony that while Marxist theory, as propounded by its founder, said that communism could really only be established as a result of the growth of the contradictions inherent in a capitalist society, and therefore predicated the existence of a fully grown capitalism society before communism could be established, his greatest follower, Lenin, established, or at least attempted to establish, a fully communist state in a society which was, at that time, still at the threshold of capitalism.  That the kind of society that Lenin had in view was never in fact established; that the dictatorship of an individual, that the leadership of the communist party, as a result of the natural wastage of the earlier idealistic leaders and the long monopoly of power, resulted in corruption and inefficiency is another story.  The heyday of socialism as the ideal form of social organisation and the panacea for all the ills of society was between the 1920s and 1930s. It was then that in the colleges and universities throughout the world and certainly in the United Kingdom (from which we used to borrow, and continue to borrow, all the modern ideas which we have) it was believed that all progressive thought was socialistic.  The Soviet Revolution and the apparent success in the establishment of socialism in that country gave a great fillip to those ideas, and people began to look towards the new society that was being created in that state as the ideal society. I recall that Sydney and Beatrice Webb, two of the founders of Fabian socialism in Britain, published in 193 1 a book after their return from that country and called it "Soviet Communism - A New Civilization". We all looked towards that new civilization as something which we should try and establish in our own countries; its seamier side, which started to become apparent soon after, was then quite unknown.  The socialist creed spread throughout the world. Socialist and Communist parties had great support in the Western democracies; many had socialist governments in power then and later. India was no exception. There were in fact additional special reasons for its popularity in our country. It was during this period that there were trained, largely in the United Kingdom, that band of young people who occupied in India the seats of power after Independence and helped enthusiastically in the attempt to establish here what we thought would be a socialist society.  Jawaharlal Nehru's own early upbringing was during the beginning of Fabian thought, his later reading was that of socialist thinking as it developed, his visits abroad where he met the leaders of socialism and his visits to the Soviet Union (where he was shown and saw only the better sides of the new society) all helped to strengthen his belief in socialism. He was convinced that the socialist form of organisation was the only one which could give the answer to the problems of our country, and give to the enormous mass of the underprivileged who surrounded tiny islands of privilege, the rights which were by nature theirs.  The great appeal of socialism to all noble and sensitive minds, among whom Jawaharlal's was pre-eminent, was that it stood for the poor and the depressed and the oppressed as against those who were the possessors of property, the masters, the rulers and the oppressors. World War I1 again had the effect, though not deliberate, of encouraging socialism. It becomes essential in wartime for the state to play a far greater role in the regulation and management of all aspects, political, social and economic, of a country's life than it normally does in peacetime.  And the results among all belligerents was &t -taxes went up steeply, the play of the free market was interfered with and largely suppressed, the production apparatus of the country was put under government control producing exactly what the government needed for the war and not what the people wanted and the distribution of major commodities was controlled by the government. Production was largely taken up directly for the war effort and price control and large scale rationing introduced virtually all over the world. The war could not be efficiently fought except through these means. Additionally, during and particularly after the war, in the countries of Europe there were large scale nationalisations of industries which had nothing to do with ideology but which were caused by the political effects of the aftermath of the conflict. After the peace it was assumed, as it were, that if the economy could be made to produce and distribute during wartime all the goods and services required for the war, the organisation which had proved so successful in meeting the challenge of the enemy could also be harnessed to meet the challenge of underprivilege and poverty throughout the world. The United Kingdom voted to power in 1945 a socialist government wedded to the theory of Fabian Socialism.  It continued the controls and rationing of wartime into peacetime; it nationalised the basic industries such as coal and steel. Nationalisations were also practised in France and other European countries, and where fresh nationalisation was not undertaken, no 4 attempt was made to return to private ownership the industry which the government found itself owner of after the war. This was particularly true in Italy and Germany which had, as Italy continues to have, a very large 7 proportion of industry under government ownership. The combination in India of the controls on production, distribution and prices, and of rationing were continued in peacetime after Independence. Not only were they thought to be appropriate ways of organising the economy but they corresponded to socialist thought and the practice then prevalent in our mentor the United Kingdom.  Further, there were large scale nationalisations of the basic industries and very large sectors of the economy were reserved for the government sector. Where the private sector was allowed to operate, it was permitted to do so only subject to controls which went on proliferating in their numbers and complexity so that in essence the private sector became indistinguishable from the activities directly owned by government.  The advent of planning helped this process because a planned economy, it was assumed, could not be run or developed according to plan, unless it was subject to the command of the planners. The market mechanism was in effect suppressed; the economy became a command economy. In short, what we attempted to do was to put into practice the kind of economy that we thought had been established in the Soviet Union but attempted, at the same time, to combine it as a free and liberal political democracy with all the rights and privileges of a democracy enforceable by an independent judiciary. This was an experiment that had never been made in the world; its difficulties were recognised by our leaders but it was expected that there would be no contradictions between the political and the economic system.  The one great pillar of Fabian socialism was the ownership by the State of the means of production and distribution; the other was high rates of direct taxation so as directly to transfer wealth from the rich to the poor. This also we put into practice raising our taxes on income to a level which was almost confiscatory. Additionally, with the zeal of the convert, we introduced a wealth tax, which in effect is a recurring capital levy, which even the more committed socialist countries like the United Kingdom had never introduced.  However, with our ignorance of the realities of life and the conversionary zeal with which we followed the theories of our teachers, we continued to raise the rates of direct taxation to levels at which they could, realistically speaking, not be paid at all. There was a time when the rate of income tax went up to 97% and the rate of wealth tax to 5% of wealth. This was carrying our theories to absurdity but though the tax levels have been somewhat reduced our thinking remains as it was.  The reason for the retreat from socialism is that societies which tried to base their economies on ownership by the State, economic equality and the replacement of the market by the command of the bureaucracy, simply did not work. Such societies produced neither the non-material nor the material benefits which were supposed to follow from this kind of economic organisation. Believers in socialism were convinced that socialism would guarantee individual freedom; the facts showed that the freedom of citizens of socialist States was in reality markedly less than in the capitalist States.  In the communist societies of Eastern Europe and China no individual freedom existed at all no matter what theoretical claims were made about it. The expectation that the worker and the peasant would work harder and more willingly for enterprises owned by the State or by a collectivity because he would feel that he was working for himself rather than for a capitalist, simply did not happen; people worked more or less as they work under capitalism, being driven by the twin forces of the carrot and the stick. In fact, there was more slackness and more pilfering on the part of the workers and probably more corruption on the part of the management than in capitalist societies. On the material side, it became obvious after the first spurt in production that the rate of growth of the economy of the genuinely socialist societies was markedly lower than that of the societies relying on the market to regulate their economies.  One of the most striking failures of State or collective ownership has been in agriculture where a super-power like the Soviet Union, possessing one sixth of the land surface of the Globe finds seventy years after revolution that it cannot feed itself. Nor has the quest for equality succeeded. Communist societies have reduced, in law, the differential between various categories of workers. They found the aim of virtually absolute equality from which they started quite as totally unworkable as the attempt, with which also they started, to abolish all ranks in the defence services.  They soon discovered that all organised society must necessarily have a hierarchy, and that the hierarchy must not only be differentiated by power but the differences have also to be economic. A very long time ago, therefore, the communist motto of "From each according to his ability, to each according to his need" was changed in the Soviet Union without fanfare and almost surreptitiously to "From each according to his ability, to each according to his work". The Stakhanovites made a big dent into socialist theory by being given economic rewards for their work and the differentiation that has been subsequently introduced consists not so much in the money wage but payments in kind and in privilege to those who occupy higher positions in the hierarchy; this, if translated into money, would show a very substantial difference. One can live on revolutionary slogans and ideals for a short time but the flame does not last long. Lenin lived till the end of his life in one room in the Kremlin. Brezhnev lived in the equivalent of many palaces and owned a fleet of the most expensive of the world's cars.  _Last week’s musing: [THE DANGERS OF JOINT CO-OPERATIVE FARMING](https://indianliberals.in/content/the-dangers-of-joint-co-operative-farming/)_ --- ## [Musing] The Principle of State Interference URL: https://indianliberals.in/musings/the-principle-of-state-interference/ ### Body _Limited Government is one of the cardinal principles of liberalism. Although there has historically been a debate among liberals on where to draw the line on government interference, there is unanimity on expanding individual freedom. Produced below is a piece published in the August 1958 issue of the Indian Libertarian magazine. It discusses the principles behind State Interference. _We are being led speedily along the paths of a revolution made elsewhere. The social, economic and political ideas forming the substance of our revolution, of which the masterpilot is Jawaharlal Nehru, have been based on European experience and European speculation. They have no doubt some universal application in as much as all humanity has something in common. But ideas have to be assimilated in terms of our own experience and thought if they are to be beneficent in practice. Such relation to national experience is indispensable, especially where revolutionary ideas changing the governing ideals of society at breakneck speed have to be put into force in a democratic setup with the understanding and consent of the people. FOREIGN EXPERIENCE The socialistic pattern of society that is being imposed on our people by the "idealism" of Jawaharlal Nehru is in fact the end-result of a distorted reading of Eur-american experience and thought extending over a century and a half between the French Enlightenment and Revolution of the eighteenth century and the Marxist revolution of Tsarist Russia in October 1917. To the political freedom of the democratic revolution in France, the Russian revolution of 1817 added, in intention, the goal of economic freedom. Mere external freedom at law was found to be equivalent in practice only to the freedom to starve, and political equality was found to be surprisingly compatible with extreme inequality in economic condition. The two branches of revolutionary thought that arose in response to this situation, parliamentary and extra-parliamentary, evolutionary and catastrophic, one relying on rational persuasiveness and peaceful moulding of public opinion, and the other relying on class war, conspiracy and mobilisation of the working class for a final war on the capitalist class and their governmental agents, have influenced leaders of opinion ,everywhere, and came to be known as socialism. In our country, the advent of independence brought Pandit Nehru the opportunity at last to put his vision of socialism into practice. UNWILLING AND UNCONVINCED Today this situation has created a lag between the mind of the nation and the plans of the leaders. There is also a gulf between the socialism of the leaders and the ruling ideas and feelings of the bulk of persons in the administration and the ruling party. The socialistic pattern of society is being hustled into shape by the drive of the Prime Minister, without the understanding and willing consent of the bulk of the intelligentsia and the rank and file of the middle world between them and the masses. Sri Hanumanthaiya,  former chief minister of Mysore, compared this situation to the artificial religion of Din-i-ilahi imposed on his court and subjects by Akbar the Great Moghul. It disappeared like mist at sunrise after the emperor's demise. The socialist faith of our intelligentsia and administrators is largely a matter of outward conformity supported by sentiment and deference to authority. So too the opponents of socialism do not resort to any serious analysis of socialism and do not seek to defend their libertarian views concerning the freedom of the vocations (including that of economic enterprise) through rational criticism and constructive suggestion. They just demur faintly to the ideological nature of Government's policies and urge the authorities, with decreasing success, to let business survive on the empirical ground that it is making a success of its job, that it is fulfilling its targets in the Five Year Plan, and that Government will do well to use its own money for starting new industries instead of locking it up in the acquisition of existing units, and so on. This position is extremely unsatisfactory, both for the realisation of socialism as a permanent and beneficent revolution and for a safe and practicable return to a better basis or order of society if socialism should fail after all and not achieve the plenty and progress that it promises. ALL ROUND RE-THINKING From this point of view, the lacuna in thought between policy and experience should be bridged by fundamental thinking on all the issues involved in the socialistic pattern of society. Many aspects of social life are involved - _political_: concerning the nature of the State, of its legitimate sphere of action and of the conditions of successful democracy; _economic:_ concerning the role of private enterprise, the nature and limits of Governmental intervention, the destiny of the capitalist class, the status of the working class; _social and individual ideals_: whether a rising standard of living can be the be-all and end-all of social evolution or whether limitation of economic development may not be necessary to keep the pace of progress from corrupting the quality of human life; the role of equality as a social ideal and its apparent conflict with the equally indispensable ideal of liberty etc. The great issue of freedom versus totalitarianism throws its sombre colour over the whole scene of social life and organisation, and invests every question with the utmost gravity. It would be untenable to maintain that events in India are being guided by the composite elite in power on the basis of knowledge and foresight.  It is proposed in this article to suggest a point of view that may afford the right clues to the beneficent function of the State in relation to economic life. Such a vision of the right relation between the State and economic affair will resolve the conflict between individualism and collectivism, both of which are extremes and abstractions, bringing disaster if pressed into action in isolation unmodified by each other. The philosophical background that the present writer has in view is the opposing theories of individualism represented by J.S. Mill and of idealism represented by T. H. Green and Bernard Bosanquet. These two opposing lines of thought cover the field of social policy in principle and help us to define the lines of fruitful policy in every field of social life and enable us to resolve conflicts arising from partial views. If we take over the inspirations and conflicts of Marxism, as we are doing, we might as well (indeed we must) use the more comprehensive and wiser insights of these philosophers of the same period from the West to heal the wounds of class-war ideas. Indeed we may find it justifiable and useful to restrict the attractive term socialism to the golden mean between the extremes of individualism and collectivism and free it from undue and misleading association with Marxist-Leninist-Stalinist-Khruschevist Communism. THE NECESSITY OF FREEDOM Though the inherent inconsistencies of J.S. Mill's view of liberty have been shown by his opponents, the enduring value of the core of his thought has been recognised all round. It consists in a clear demonstration of the necessity of freedom for the growth and fulfilment of individuality. Freedom. from this point of view, is not only a means but an integral part of the end. No achievement in society-military power, scientific development, growth in the arts, etc is of any intrinsic value unless it issues from freedom and is assimilated in freedom by the individuals. This is the distinctive human quality, without which we will have only an ant-like society without independent self- reliant members, each a centre and efforescence of value-for-self as well as value-for-others. Freedom of thought and discussion, freedom of economic enterprise and political participation in public affairs, are all necessary for growth in individuality, self-fulfillment and realisation of the powers inherent in human personality. This view is substantially identical with the core of thought in the later "positive liberalism" of T. H. Green, though the philosophical background is different, namely concrete idealism deriving from Plato and Aristotle, Rousseau and Hegel, as against the empiricism of Locke, Hume and Mill. THE ANALYSIS OF FREEDOM According to idealism of this type, freedom has meaning at two levels. The basic meaning of freedom is freedom from restrictions preventing or limiting self-prompted activity. Freedom in the higher sense includes this but expands to include opportunity to choose ways of self-realisation through law. Law is the liberator of the higher self which restricts the lower of narrower self and makes possible the emergence of the self into the larger life of morality and truth. Morality is action which co-ordinates the activities of many to help their rise to more inclusive ways of life, reconciling their impulses into harmony and making possible the emergence of common good. Common good is good that synthesises the good of individuals and society. Self-realisation in society is achieved through contribution to common good through one's "station and its duties," to use the famous phrase of F. H. Bradely. The value of individuality and freedom for its growth and fulfillment is therefore common to Mill and Green. To safeguard this value, Mill proposed a distinction between two spheres in the life of the individual, one self-regarding or private and other public. The self-regarding sphere has consequences for the individual alone, while the public sphere is that concerned with the social consequences of our actions. In practice this distinction breaks down.as is pointed out by the idealist school. Society is an integral whole, such that every action of the individual has both self-regarding and other-regarding consequences. It is not possible to base law and State action on pure other-regarding consequences. Even intimate experiences like married life, and religion, where the self is supposed to be alone with his God, have aspects in which individuals may impinge on society, bringing them within the legitimate sphere of Government. Excessive cruelty, dessertion, adultery are matters which bring married life within the sphere of the law, for they have social consequences. · In religion, Government will have to intervene if gurudwaras or mosques are used for anti-social activities such as the encouragement of treachery in the guise of religious addresses or for attacking other religious groups from the protected premises. Even sleeping can come within governmental notice if the sleeper is a watchman or sentry who sleeps while on duty! --- ## [Musing] The Retreat from Socialism URL: https://indianliberals.in/musings/the-retreat-from-socialism/ ### Body This is an excerpt from B.K. Nehru's C.D. Deshmukh Memorial Lecture on 14th January 1990. Mr Nehru makes a case against the reactionary economic policies that India followed post-independence at its own cost. He highlights the reasons behind the global shift away from Socialism. The reason for the retreat from socialism is that societies that tried to base their economies on ownership by the State, economic equality and the replacement of the market by the command of the bureaucracy, simply did not work. Such societies produced neither the non-material nor the material benefits which were supposed to follow from this kind of economic organisation. Believers in socialism were convinced that socialism would guarantee individual freedom; the facts showed that the [freedom of citizens of socialist States](http://scholarship.law.upenn.edu/cgi/viewcontent.cgi?article=6224&context=penn_law_review) was in reality markedly less than in the capitalist States. In the communist societies of Eastern Europe and China, no individual freedom existed at all no matter what theoretical claims were made about it. The expectation that the worker and the peasant would work harder and more willingly for enterprises owned by the State or by a collectivity because he would feel that he was working for himself rather than for a capitalist, simply did not happen; people worked more or less as they work under capitalism, being driven by the twin forces of the carrot and the stick. In fact, there was more slackness and more pilfering on the part of the workers and probably more corruption on the part of the management than in capitalist societies. On the material side, it became obvious after the first spurt in production that the rate of growth of the economy of the genuinely socialist societies was markedly lower than that of the societies relying on the market to regulate their economies. One of the most striking failures of State or collective ownership has been in agriculture where a super-power like the Soviet Union, possessing one-sixth of the land surface of the globe, finds 70 years after the revolution that it cannot feed itself. [**Read More SO Musings**](https://spontaneousorder.in/?s=SO+Musings) --- ## [Musing] The Role of Judiciary in Parliamentary Democracy by Justice M.C. Chagla URL: https://indianliberals.in/musings/the-role-of-judiciary-in-parliamentary-democracy-by-justice-m-c-chagla/ ### Body _The following is an excerpt from the A.D. Shroff Memorial Lecture titled 'The Role of Judiciary in Parliamentary Democracy' published by the Forum of Free Enterprise and delivered by Justice M.C. Chagla in 1974. It was republished as a booklet by Forum of Free Enterprise in January 2011. Justice M.C.Chagla, one of the finest Judges India has produced, had made in 1974, some very pertinent observations which have great bearing on contemporary developments in India._ The role of the Judiciary in our parliamentary democracy is a unique and crucial one. Parliamentary democracy is ruled by the people through their representatives elected to Parliament. In England, Parliament is supreme and sovereign. It does not only speak for the people, it decides for them. Its decisions are final and cannot be challenged by any authority. The Judiciary there must accept the laws as passed by Parliament - they cannot challenge their validity. Their role is comparatively a subsidiary one of interpreting the law and giving effect to it. Our Judiciary on the other hand, plays a major role which in a sense places it above Parliament. It does not merely interpret the laws passed by it, but it also decides their constitutionality. In our country, the Constitution is Supreme. And the Judiciary has been designated by the Constitution to keep Parliament within the bounds of the Constitution. If it oversteps it, the Judiciary can strike down the law. And there is no appeal from the Judgement of the Supreme Court. Its Judgement becomes the law of the land unless Parliament acting under its amending power changes the law as declared by the Supreme Court. It will be immediately noticed that vast and wide are the powers of the Supreme Court in this regard. Parliament may pass any law but it is the Supreme Court which is the ultimate arbiter of its validity. It would be erroneous to say that this gives a power of veto to the Supreme Court or constitutes it as a third chamber. The Supreme Court is only acting under the Constitution as indeed the Legislature or Executive is bound to do. One learned author has gone to the extent of suggesting that the Supreme Court in exercising its right of Judicial review is, in effect, legislating. I do not agree with this view. Legislation is quite a different process from the exercise of the Judicial function of considering the constitutionality of a law. The result may be that the view of the Supreme Court prevails over that of Parliament. But the Constitution has so willed it and has placed in the hands of the Judges a powerful weapon which can be wielded with consequences of infinite importance, both for the country and the nation. The American Supreme Court has a similar power and our founding fathers preferred the American model to the British one with a wisdom and foresight, which, particularly today, we can only appreciate and admire. In England, Parliament is elected by a small country and voters vote in small constituencies which make it possible for the candidate and the voters constantly to come in contact. Parliament there has also inherited the traditions of centuries and acts with restraint and the party in power never uses its majority to ride rough-shod over the opposition. Because it is conscious of the fact that the opposition also represents a section of the people and at the next election, it may come into power. In our country, the position is quite different. The Congress from being a national organisation which won us our freedom suddenly became the party in power with no viable opposition I to speak of. Unlimited power is a dangerous thing, more insidious than a heady wine. Because you can recover from intoxication caused by alcohol, but the intoxication caused by power may become a permanent state of alcoholism. Further, the voters in Britain are literate and educated. Here we have millions who are illiterate and although gifted with practical common sense, can be carried away by the tub-thumping orator or the millennium promised by the ideological fanatic. Therefore, without the power of Judicial review, we will be governed not by democracy, but by a one party Government and that one party might resolve itself into the dictatorship of a single individual. The most dangerous dictatorship is one which is based on democratic process, on the forms and paraphernalia of democracy-on general elections, on adult suffrage which ultimately throws up not a real representative Government but a dictator who masquerades as a democrat representing the people but is really carrying out his own whims and fancies however illogical they may be and however prejudicial to the country. The other function of the Judiciary is the protection of the individual's rights against the ever expanding powers of Government. Our Government is tending day by day to become more and more monolithic. It possesses power and patronage , in full and even extreme measure. Any opposition to its policies is either muted or silenced. The voice of dissent is either not heard or suppressed. This is really a negation of real democracy. For democracy postulates dispersal of power, the freedom to think and write what may be most unpalatable to Government. The citizen is helpless before such display of gargantuan power. The only check that the Constitution has provided to this runaway inflation of power is the Judiciary. It alone can safeguard the fundamental rights of the citizens. It alone can tell the Government-so far and no further. It alone can act like the angel with flaming swords guarding the citadel of human rights. Undoubtedly there has to be a balancing between the needs of society and the rights of the individual, and our Constitution rightly provides for reasonable restrictions on the freedoms it has guaranteed to the citizen. But in this balancing, the scales must tip in favour of the citizen. The state must prove that there is a clear and present danger which would justify it in depriving the citizen of his rights. Under the first amendment to the American Constitution, the right to freedom of speech and of the press and of assembly is absolute and cannot be abridged under any circumstances. That is why it was said that maximum personal freedom was the touchstone of a mature society. One American Judge has said that the freedoms guaranteed by the first amendment must be accorded to the ideas we hate or sooner or later they will be denied to the ideas we cherish. Justice Black has eloquently stated, "if there is any fixed star in our constitutional constellation, it is that no official, high or petty, can prescribe what shall be orthodox in politics, nationalism, religion or other matters of opinion", and Mr. Justice Jackson has stated, "Legislation whose basis is economic wisdom can be redressed by the process of the ballot box or the pressure of opinion. But when the channels of opinion and of reasonable persuasion are corrupted or clogged, these political corrections can no longer be relied upon and the democratic system is threatened at its most vital point. In that event, the Court by intervening restores the processes of democratic Government, it does not disrupt them." This is the star in the constitutional constellation by which the Judiciary should chart its course. Our right to freedom is enshrined in Article 19-the charter of seven freedoms. It is true that it has been considerably curtailed by the recent Judgement of the Supreme Court enlarging the power of Parliament to amend the Constitution but one redeeming feature of that Judgement is that Parliament cannot alter the basic structure of the Constitution. If freedom is not the basis of democracy, what is ? It is like the savour of salt without which it is not salt. It is to be hoped that Parliament will not tamper with the seven freedoms and if it does, the Supreme Court will strike down such a law as affecting the basic structure of our Constitution. It may be pointed out that the American Supreme Court during Earle Warren's Chief Justiceship extended the principle of personal liberty to innumerable questions that had so far remained untouched. To give a few instances - the tremendous advance in civil rights, the rights of the accused of being represented by Counsel and setting its face against convictions extracted by confessions, the prohibition against any minority being forced to take part in religious exercises-even when it came to salute the national flag; the liberal attitude on obscenity laws on the ground that a discerning public should be left to judge what is literature and what is trash except when the case is of obvious and unmitigated pornography. In this connection, I may quote from an article written by Earle Warren, "Our Judges are not monks or scientists, but participants in the living stream of our national life, steering the law between the dangers of rigidity on the one hand and formlessness on the other. Our system faces no theoretical dilemma but a single continuous problem how to apply to ever changing conditions the never changing principles of freedom". In one sense, the Judiciary has a creative role to play, Justice Douglas has gone to the length of saying that the Judiciary is in a high sense the guardian of the conscience of the people as well as of the law of land. The conscience of the people is not always reflected in legislation. Without doing offence to the doctrine of judicial restraint, it can by its judgement awaken the conscience of the people to the evils in Society which are crying out for a remedy and quicken the rate of progress where social legislation is tardy or ineffective. If freedom as embodied is a star of first magnitude in the constitutional constellation, the Rule of Law is also a star of magnitude if not possessing the same brilliance as the former. The Rule of Law emerges from Article 14 of the Constitution which prohibits the state from denying to any person equality before the law or the equal protection of the laws. Therefore, in the eye of the Constitution all citizens are equal and have equal rights. No discrimination is permitted as between citizen and citizen and no citizen is branded as a second class citizen or suffers from any disqualification because of his caste, community or sex. Even the lowest of the land can aspire to become the President of India. This represents the triumph of secularism which is one of the most important pillars on which the edifice of our Constitution stands. But you have also to read in Article 14 the provision that our country is governed by laws and not by men. No one, however powerful, can defy or refuse to give obedience to the Constitution and the laws of the land. In a recent historic judgement, our Supreme Court laid down that our President is not above the Constitution. His oath requires him to preserve, protect and defend the Constitution. The U.S. Supreme Court has equally in Nixon's case denied executive immunity to the President from obeying subpoenas legitimately served upon him. In an earlier case, the U.S. Supreme Court set aside the order of President Truman to seize the steel Mills to avert a strike during the Korean War. Truman relied on the aggregate of his powers as Chief Executive and Commander-in-Chief. The Court held that the order was not authorised by law. The Rule of Law also requires that law must be administered fairly. The standard of "fairness" has to be applied to all executive actions. Where rights are taken away, the Court insists that the party affected must be given notice and should be heard. Chief Justice Warren once confessed that when he heard cases affecting the rights of citizens, the question he always asked himself was "Is it fair?" Our Judges may well emulate the learned Chief Justice. Legal technicalities must take a second place before the paramount consideration of fairness. It is at the heart of equity if not of law and if Law is not tempered by equity, then it becomes a barren soulless ritual, a formality which fails to take into consideration the injury a decision might cause or fail to promote the remedy which the law itself intended. One learned author has opined that the Judicial function in representing the rule of law is best discharged when the Judge realises that he is on the Bench to protect the helpless and oppressed and uphold the values of free thought, free utterance and fair play. It is a mere truism to say that if the Judiciary is to be the custodian of the rights of citizens, it must inspire the confidence of the public. It must be independent and impartial. It must not call any one its master nor should any one be allowed to call it its servant. It must assign to the waste paper basket any directions it may receive even from the President or the Prime Minister, Every Judge before he comes to the Bench has a personal philosophy based on what Holmes called the inarticulate major premise. He may believe in a certain ideology. He may believe in communism, socialism or the tenets of the Maha Sabha or the Muslim League. He must leave all these behind and forget them. The only scripture he must consult and the only Bible he must revere is the Constitution. His philosophy must be the philosophy which is to be found in the Preamble of the constitution. That must be his friend, philosopher and guide, the light which must illumine his years on the Bench. The Courts are not a department of Government. They are an authority to coordinate with the Legislature and the Executive. Even Parliament, however wide and vast its powers, can only function under the Constitution. Even if legislation is passed by an overwhelming majority and Parliament has expressed its clear intention in no unequivocal terms, the legislation can be tested on the anvil of judicial review and if it fails the test, Parliament must submit to the decision of the Court. It is a mistake to call this a confrontation between Parliament and the Judiciary. Each is discharging its duty assigned to it by the Constitution. If we have faith in our Constitution, we should call it collaboration between two coordinate authorities rather than confrontation. Our judiciary down the years has enjoyed a reputation second to none in the judicial world. We have produced Judges of great eminence, of great learning, of great humanity who have enriched the pages of die Law Reports. Their independence and impartiality has never been doubted or suspect. Like a clap of thunder in a clear night, the atmosphere has changed. For the first time in the history of Judicial administration of our country, Government has publicly and officially proclaimed a policy which if given effect to, will destroy the independence of the Judiciary and make it not impartial, but partisan, and render the Judges henchmen of those in authority. I do not want to go into the question of the supersession of the three Judges of the Supreme Court in any detail. The facts are well known and the matter has been debated from a hundred platforms and the action of Government has been universally condemned-except by those who have eyes and will not see and ears and will not hear or by those who are committed body and soul to Government or by those who have gained or hope to gain by this policy of Government. But human memory is notoriously short and it is necessary to recapitulate briefly the highlights of this sorry and sordid episode. Chief Justice Sikri's term of office was coming to an end and he was never consulted about his proposed successor. He came to know when the name was announced on the radio like any other man in the street. The Judges superseded were also never informed. So important an event as the appointment of the Chief Justice of India was manipulated and presented as a fait accompli in the utmost secrecy, so that there should be no time for the Bar or the public to protest against so egregious an action. A similar action was intended at the time of Mr. Justice Shah, but it was foiled because the Bar and the Bench protested strongly when it came to know about it. The convention of appointing the senior most Judge to succeed as Chief Justice never departed from in the past was callously disregarded without any justification although the senior most Judge was respected by the Bar as one of the ablest incumbents of the Bench. The three judges superseded had all voted against the Government in the well-known Fundamental Rights case to which Government attached the greatest importance and treated it as a prestigious issue. The mere narration of these facts is sufficient to satisfy any impartial Judge that what happened was a calculated and preconceived plot on the part of Government to undermine if not destroy the independence of the Judiciary. The official explanation on the floor of Lok Sabha when there was a pained and shocked outcry from Bars all over lndia and from the general and thinking public, made matters worse. Government claimed an absolute right to appoint such Judge as they thought proper, and they left no doubt as to who they thought were proper Judges. A Judge must be forward looking; a Judge must be conscious of any change of wind; he must be in tune with the Congress policy. It need hardly be said that if this was going to be the policy in future for the appointment of Judges, every Judge who thought more of his preferment and promotion than his Judicial reputation or honesty of purpose would try to give satisfaction to Government by looking forward as far as he could from his chair on the Bench-the clearer the vision the greater the prospects. He would study the political weather report every morning, which way the political wind was blowing and he would try to decipher what the Congress policy was at any given point of time - a task which even political scientists would find difficult to accomplish. A deadly blow had been dealt at the one institution in lndia which had refused to conform to Government's views, which time and again had told Government in no unmistakable terms that it was wrong and which had courageously and steadfastly protected the rights of citizens against the ever increasing inroads of Government and Government-controlled Parliament, upon a free society which is another name for democracy in contradistinction to a captive and totalitarian society. But the Bar reacted gloriously. It was their finest hour and Government was made to realise that public opinion will not tolerate the destruction of one of the most important pillars of the Constitution. The Bar will always support an independent Judiciary, but in the ultimate analysis., it will depend upon the Judiciary itself. I have no doubt that our Judges with the glorious traditions of the Indian Judiciary which have been built up in the course of a century, will not succumb to the threats, blandishments or the temptations which Government will undoubtedly hold out. I may end this part of my lecture by a quotation from Lord Bryce's modern democracies: "There is no better test of the excellence of a Government than the efficiency of the Judicial system. If the law is dishonestly administered, the salt has lost savour. If the lamp of justice goes out in darkness, how great is the darkness". There are two or three provisions in the Constitution relating to the Judiciary to which I wish to advert. The first and foremost is the salary of High Court Judges. It is fixed at Rs. 3,5001-. It can neither be reduced nor increased without an amendment of the Constitution. By a strange irony, the provision regarding the salary of the Judges was inserted in the Constitution in order to give security to the Judges. It has now turned out that the salary has become frozen and instead of security, it has lead to penury. The Judges of the Bombay High Court, 100 years ago, used to draw a salary of Rs. 4,0001--today it is Rs. 3,5001-. In those halcyon days of old the Judges hardly paid any tax and the cost of living was about 10 times less and the Rupee was worth a rupee and not 30 paise as at present (It might have gone down further since I wrote these lines). The prospects at the Bar are much brighter. There are more Courts and Tribunals to practise before than there were when I was a Junior. And the rewards of success are most glittering. The result has been that every Chief Justice finds it almost impossible to persuade a young and able lawyer to accept a seat on the Bench. Perforce he has to depend for the strength of the Bench on District Judges. I have nothing against them - some have proved to be very good Judges. But I cannot conceive of the High Court as a glorified District Court. Unless the Bar is fully represented on the Bench, the whole character and atmosphere of the High Court will change. A practising lawyer brings to the Bench something which a District Judge, however able, can never do. We are told that now the highest Government Officer in the Civil Services does not draw more than Rs. 3,5001-. This is an entirely fallacious argument. There must be some relationship between income at the Bar and the salary you pay to your Judges. It is true that every good lawyer, when he accepts a Judgeship, must make a sacrifice in the public interest. But the sacrifice must be reasonable-not such as to break the back of the person making it. I have often suggested that if it is not possible to increase their salaries (for it would almost be impossible for a constitutional amendment to go through Parliament as it is at present constituted with its antipathy towards the Judiciary and its ideological outlook) there are several -what I might call-peripheral benefits that the Judge can be given so as to give him some relief. Consider such benefits which a member of the Civil Service enjoys or for the matter of that, a Minister or a Member of Parliament, even though on paper, their salary is the same or much less than that of the Judge. The second important matter which requires an immediate amendment of the Constitution is to place the Judge in the same position as the Auditor-General. The latter cannot hold any office under the Government or under the Government of any State after retirement. This is a salutary provision to ensure the utmost impartiality and integrity in an office of high responsibility. Does a Judge hold an office which is less responsible and which calls for less independence or impartiality? It is sad to see the number of Judges who pay Court to Ministers to get appointed to some Tribunal after retirement and it is sadder to see how many tribunals are manned by ex-Judges. There is one Judge I know of who has never ceased to be in charge of a Tribunal of some sort or another ever since his retirement which was a very long time ago. Only the cruel and relentless hand of death can remove him from a Tribunal. The consequences of this policy of Government have been highly prejudicial to the fair name of the Judiciary. Short time before retirement, every Judgement of a Judge, however honest, becomes suspect. If it is in favour of Government, and rightly so, he is accused of pleasing those who have patronage to bestow. And some Judges I know go out of their way to decide against Government in order to assert their independence, which is equally unfortunate. Government, in defence of their policy, say that they want judicial talent for most of their tribunals. The solution is very simple; take a sitting Judge and, if necessary, fill up his temporary vacancy by a fresh appointment. The other advantage of this solution will be that it would be the Chief Justice who would recommend the Judge for the Tribunal. Today, it is Government who bestow favours upon those whom they like or who have given them satisfaction by their Judgements. What about the right to practice? That stands on an entirely different footing. I may have the right to practice, but that does not mean that I will enjoy a practice. That would depend upon my own ability and the confidence that my clients may have in me. Government cannot dictate to a client which Counsel he should brief, except in Government cases, where there is considerable abuse in the preparation of a panel of Government advocates. But no system can be perfect and even Government wants able lawyers to fight their cases. Government has claimed the exclusive right and privilege of appointing Judges and Chief Justices of High Courts, and Supreme Court. Even in the U.S.A. where the President appoints the Federal Judges it is with the advice and consent of the Senate and the President before submitting his name to the Senate usually consults Bar Associations and leading jurists. In India, our constitution only provides for consultation in one of the modes provided by the Constitution. But consultation more often than not is an empty formality. For all practical purposes, the power to appoint is absolute in the hands of Government. After Government has announced its policy as stated before with regard to the qualifications required for appointment as a judge this absolutism has become even more dangerous and should no longer be permitted and the constitution should be amended to entrust the appointment of Judges to an independent authority. One suggestion is that the concurrence of the Chief Justice should be necessary in the case of every appointment of a Judge of the High Court or Supreme Court. In the case of appointment of the Chief Justice of a High Court, the concurrence of Chief Justice of lndia should be necessary add in the case of the appointment of the Chief Justice of lndia, the concurrence of the retiring Chief Justice should be required. Another suggestion is the constitution of a high powered Judicial Council whose concurrence would have to be sought. The Council should consist of retired chief justices not holding any office of profit under the state. It is also necessary that the initiative for the appointment of a Judge should come from the Chief Justice and not from the Government. This will empty the Darbar Halls of some Ministers and stop unnecessary canvassing by candidates to this high office. The last question I will deal with is the appointment of ad hoc Judges. The provision has been made for such appointment to seek a sudden contingency. But what was intended as a contingency has tended to become a settled practice. The  retiring age of every Judge is known-he cannot hide it as a woman is supposed to hide hers. Why does not Government make up its mind to fill up a vacancy long before it occurs, so that the strength of the Court is not reduced even for a short time ? Today, the vacancy is not filled up when it occurs  and the retiring Judge is very often asked to continue as an ad hoc Judge. This is a pernicious practice and contrary to the spirit of the Constitution. In effect, it extends the retiring age of a Judge. If a retired Judge continues as an ad hoc  Judge, then he retires not at the point of time fixed by the  Constitution but after an indefinite period determined by the Chief Justice. It may not be charitable to say so, but it is not far from the truth that Ministers like candidates for Judgeships to pay court to them, to attend their Darbar, dangle the glittering prize before them, to impress them with their power and authority and finally when a decision has reluctantly to be taken, appoint the favoured one. In conclusion, I must stress the importance of public opinion as far as the independence of the Judiciary is concerned. Whoever believes in democracy must believe in the ultimate triumph of public opinion, if it is strong, united and fearless. If it is the people who have to govern the country, then the will of the people can only be manifested through public opinion. Recently, it has toppled (to use an expression which has now become part of the political vocabulary of our country) the President of the United States-than whom there is no more powerful person in the world with the possible exception (and I must mention the exception) of our Prime Minister. If it can do that it can surely condemn back-sliding Judges and see that they remain on the right track, true to themselves, true to their high office and loyal to the Constitution. It can also prevent Government from pursuing any policy or taking any action which will undermine the prestige, the dignity and independence of the Judges. --- ## [Musing] The Role of Judiciary in Parliamentary Democracy URL: https://indianliberals.in/musings/the-role-of-judiciary/ ### Body The following text is taken from a 1974 address by Justice M.C. Chagla, Indian judge and liberal, at the A. D. Shroff Memorial Lecture. Presenting a comparative analysis among the British, American and Indian judicial system, Justice Chagla highlighted challenges and responsibilities unique to the Indian judiciary.The role of the judiciary in our parliamentary democracy is a unique and crucial one. Parliamentary democracy is ruled by the people through their representatives elected to Parliament. In England, Parliament is supreme and sovereign. It does not only speak for the people, it decides for them. Its decisions are final and cannot be challenged by any authority. The judiciary there must accept the laws as passed by Parliament—they cannot challenge their validity. Their role is comparatively a subsidiary one of interpreting the law and giving effect to it. Our judiciary on the other hand, plays a major role which in a sense places it above Parliament. It does not merely interpret the laws passed by it, but it also decides their constitutionality. In our country, the Constitution is Supreme and the judiciary has been designated by the Constitution to keep Parliament within the bounds of the Constitution. If it oversteps it, the Judiciary can strike down the law. And there is no appeal from the Judgement of the Supreme Court. Its Judgement becomes the law of the land—unless Parliament acting under its amending power changes the law as declared by the Supreme Court.  It will be immediately noticed that vast and wide are the powers of the Supreme Court in this regard. Parliament may pass any law but it is the Supreme Court which is the ultimate arbiter of its validity. It would be erroneous to say that this gives a power of veto to the Supreme Court or constitutes it as a third chamber. The Supreme Court is only acting under the Constitution as indeed the Legislature or Executive is bound to do. One learned author has gone to the extent of suggesting that the Supreme Court in exercising its right of Judicial review is, in effect, legislating. I do not agree with this view. Legislation is quite a different process from the exercise of the Judicial function of considering the constitutionality of a law. The result may be that the view of the Supreme Court prevails over that of Parliament. But the Constitution has so willed it and has placed in the hands of the Judges a powerful weapon which can be wielded with consequences of infinite importance, both for the country and the nation.  The American Supreme Court has a similar power and our founding fathers preferred the American model to the British one with a wisdom and foresight, which, particularly today, we can only appreciate and admire. In England, Parliament is elected by a small country and voters vote in small constituencies which makes it possible for the candidate and the voters constantly to come in contact. Parliament there has also inherited the traditions of centuries and acts with restraint and the party in power never uses its majority to ride rough-shod over the opposition. Because it is conscious of the fact that the opposition also represents a section of the people and at the next election, it may come into power. In our country, the position is quite different. The Congress from being a national organisation which won us our freedom suddenly became the party in power with no viable opposition to speak of. Unlimited power is a dangerous thing, more insidious than a heady wine. Because you can recover from intoxication caused by alcohol, but the intoxication caused by power may become a permanent state of alcoholism.  Further, the voters in Britain are literate and educated - here we have millions who are illiterate and although gifted with practical common sense, can be carried away by the tub-thumping orator or the millennium promised by the ideological fanatic. Therefore, without the power of Judicial review, we will be governed not by democracy, but by a one-party Government and that one party might resolve itself into the dictatorship of a single individual. The most dangerous dictatorship is one which is based on democratic process- on the forms and paraphernalia of democracy on general elections, on adult suffrage which ultimately throws up not a real representative Government but a dictator who masquerades as a democrat representing the people but is really carrying out his own whims and fancies however illogical they may be and however prejudicial to the country.  The other function of the Judiciary is the protection of the individual's rights against the ever expanding powers of Government. Our Government is tending day by day to become more and more monolithic. It possesses power and patronage in full and even extreme measure. Any opposition to its policies is either muted or silenced. The voice of dissent is either not heard or suppressed. This is really a negation of real democracy. For democracy postulates dispersal of power, the freedom to think and write what may be most unpalatable to Government. The citizen is helpless before such display of gargantuan power. The only check that the Constitution has provided to this runaway inflation of power is the Judiciary. It alone can safeguard the fundamental rights of the citizens. It alone can tell the Government so far and no further. It alone can act like the angel with flaming swords guarding the citadel of human rights. Undoubtedly there has to be a balancing between the needs of society and the rights of the individual, and our Constitution rightly provides for reasonable restrictions on the freedoms it has guaranteed to the citizen. But in this balancing, the scales must tip in favour of the citizen. The state must prove that there is a clear and present danger which would justify it in depriving the citizen of his rights.  Under the first amendment to the American Constitution, the right to freedom of speech and of the press and of assembly is absolute and cannot be abridged under any circumstances. That is why it was said that maximum personal freedom was the touchstone of a mature society. One American Judge has said that the freedoms guaranteed by the first amendment must be accorded to the ideas we hate or sooner or later they will be denied to the ideas we cherish. Justice Black has eloquently stated, "if there is any fixed star in our constitutional constellation, it is that no official, high or petty, can prescribe what shall be orthodox in politics, nationalism, religion or other matters of opinion", and Mr. Justice Jackson has stated, "Legislation whose basis is economic wisdom can be redressed by the process of the ballot box or the pressure of opinion. But when the channels of opinion and of reasonable persuasion are corrupted or clogged, these political corrections can no longer be relied upon and the democratic system is threatened at its most vital point. In that event, the Court by intervening restores the processes of democratic Government, it does not disrupt them."  This is the star in the constitutional constellation by which the judiciary should chart its course. Our right to freedom is enshrined in Article 19—the charter of seven freedoms. It is true that it has been considerably curtailed by the recent Judgement of the Supreme Court enlarging the power of Parliament to amend the Constitution but one redeeming feature of that judgement is that Parliament cannot alter the basic structure of the Constitution. If freedom is not the basis of democracy, what is? It is like the savour of salt without which it is not salt. It is to be hoped that parliament will not tamper with the seven freedoms and if it does, the Supreme Court will strike down such law as affecting the basic structure doctrine or our constitution. It may be pointed out that the American Supreme Court during Earle Warren’s Chief Justiceship extended the principle of personal liberty to innumerable questions that had so far remain untouched. To give a few instances—the tremendous advance in civil rights, the rights of the accused of being represented by Counsel and setting its face against convictions extracted by confessions, the prohibition  against any minority being forced to take part in religious exercises—even when it came to salute the national flag; the liberal attitude on obscenity laws on the ground that a discerning public should be left to judge what is literature and what is trash except when the case is of obvious and unmitigated pornography. In this connection, I may quote from an article written by Earle Warren. "Our Judges are not monks or scientists, but participants in the living stream of our national life, steering the law between the dangers of rigidity on the one hand and formlessness on the other. Our system faces no theoretical dilemma but a single continuous problem how to apply to ever changing conditions the never changing principles of freedom".  In one sense, the Judiciary has a creative role to play. Justice Douglas has gone to the length of saying that the Judiciary is in a high sense the guardian of the conscience of the people as well as of the law of land. The conscience of the people is not always reflected in legislation. Without doing offence to the doctrine of Judicial restraint, it can by its judgement awaken the conscience of the people to the evils in Society which are crying out for a remedy and quicken the rate of progress where social legislation is tardy or ineffective.  If freedom as embodied is a star of first magnitude in the constitutional constellation, the Rule of Law is also a star of magnitude if not possessing the same brilliance as the former. The Rule of Law emerges from Article 14 of the Constitution which prohibits the state from denying to any person equality before the law or the equal protection of the laws. Therefore, in the eye of the Constitution all citizens are equal and have equal rights. No discrimination is permitted as between citizen and citizen and no citizen is branded as a second class citizen or suffers from any disqualification because of his caste, community or sex. Even the lowest of the land can aspire to become the President of India. This represents the triumph of secularism which is one of the most important pillars on which the edifice of our Constitution stands.  But you have also to read in Article 14 the provision that our country is governed by laws and not by men. No one, however powerful, can defy or refuse to give obedience to the Constitution and the laws of the land. In a recent historic Judgement, our Supreme Court laid down that our President is not above the Constitution. His oath requires him to preserve, protect and defend the Constitution. The U.S. Supreme Court has equally in Nixon's case denied executive immunity to the President from obeying subpoenas legitimately served upon him. In an earlier case, the U.S. Supreme Court set aside the order of President Truman to seize the steel Mills to avert a strike during the Korean War. Truman relied on the aggregate of his powers as Chief Executive and Commander-in-Chief. The Court held that the order was not authorised by law.  The Rule of Law also requires that law must be administered fairly. The standard of "fairness" has to be applied to all executive actions. Where rights are taken away, the Court insists that the party affected must be given notice and should be heard.  Chief Justice Warren once confessed that when he heard cases affecting the rights of citizens, the question he always asked himself was "Is it fair?" Our Judges may well emulate the learned Chief Justice. Legal technicalities must take a second place before the paramount consideration of fairness. It is at the heart of Equity if not of law and if Law is not tempered by equity, then it becomes a barren soulless ritual, a formality which fails to take into consideration the injury a decision might cause or fail to promote the remedy which the law itself intended. One learned author has opined that the Judicial function in representing the rule of law is best discharged when the Judge realises that he is on the Bench to protect the helpless and oppressed and uphold the values of free thought, free utterance and fair play.  It is a mere truism to say that if the Judiciary is to be the custodian of the rights of citizens, it must inspire the confidence of the public. It must be independent and impartial. It must not call anyone its master nor should anyone be allowed to call it its servant. It must assign to the waste paper basket any directions it may receive even from the dilemma but a single continuous problem how to apply to ever changing conditions the never changing principles of freedom".  In one sense, the Judiciary has a creative role to play. Justice Douglas has gone to the length of saying that the Judiciary is in a high sense the guardian of the conscience of the people as well as of the law of land. The conscience of the people is not always reflected in legislation. Without doing offence to the doctrine of Judicial restraint, it can by its judgement awaken the conscience of the people to the evils in Society which are crying out for a remedy and quicken the rate of progress where social legislation is tardy or ineffective.  If freedom as embodied is a star of first magnitude in the constitutional constellation, the Rule of Law is also a star of magnitude if not possessing the same brilliance as the former. The Rule of Law emerges from Article 14 of the Constitution which prohibits the state from denying to any person equality before the law or the equal protection of the laws. Therefore, in the eye of the Constitution all citizens are equal and have equal rights. No discrimination is permitted as between citizen and citizen and no citizen is branded as a second class citizen or suffers from any disqualification because of his caste, community or sex. Even the lowest of the land can aspire to become the President of India. This represents the triumph of secularism which is one of the most important pillars on which the edifice of our Constitution stands.  But you have also to read in Article 14 the provision that our country is governed by laws and not by men. No one, however powerful, can defy or refuse to give obedience to the Constitution and the laws of the land. In a recent historic Judgement, our Supreme Court laid down that our President is not above the Constitution. His oath requires him to preserve, protect and defend the Constitution. The U.S. Supreme Court has equally in Nixon's case denied executive immunity to the President from obeying subpoenas legitimately served upon him. In an earlier case, the U.S. Supreme Court set aside the order of President Truman to seize the steel Mills to avert a strike during the Korean War. Truman relied on the aggregate of his powers as Chief Executive and Commander-in-Chief. The Court held that the order was not authorised by law.  The Rule of Law also requires that law must be administered fairly. The standard of "fairness" has to be applied to all executive actions. Where rights are taken away, the Court insists that the party affected must be given notice and should be heard.  Chief Justice Warren once confessed that when he heard cases affecting the rights of citizens, the question he always asked himself was "Is it fair?" Our Judges may well emulate the learned Chief Justice. Legal technicalities must take a second place before the paramount consideration of fairness. It is at the heart of Equity if not of law and if Law is not tempered by equity, then it becomes a barren soulless ritual, a formality which fails to take into consideration the injury a decision might cause or fail to promote the remedy which the law itself intended. One learned author has opined that the Judicial function in representing the rule of law is best discharged when the Judge realises that he is on the Bench to protect the helpless and oppressed and uphold the values of free thought, free utterance and fair play.  It is a mere truism to say that if the Judiciary is to be the custodian of the rights of citizens, it must inspire the confidence of the public. It must be independent and impartial. It must not call anyone its master nor should anyone be allowed to call it its servant. It must assign to the waste paper basket any directions it may receive even from the President or the Prime Minister, Every Judge before he comes to the Bench has a personal philosophy based on what Holmes called the inarticulate major premise. He may believe in a certain ideology. He may believe in communism, socialism or the tenets of the Mahasabha or the Muslim League. He must leave all these behind and forget them. The only scripture he must consult and the only Bible he must revere is the Constitution. His philosophy must be the philosophy which is to be found in the Preamble of the constitution. That must be his friend, philosopher and guide, the light which must illumine his years on the Bench. The Courts are not a department of Government. They are an authority to coordinate with the Legislature and the Executive. Even Parliament, however wide and vast its powers, can only function under the Constitution. Even if legislation is passed by an overwhelming majority and Parliament has expressed its clear intention in no unequivocal terms, the legislation can be tested on the anvil of Judicial review and if it fails the test, Parliament must submit to the decision of the Court. It is a mistake to call this a confrontation between Parliament and the Judiciary. Each is discharging its duty assigned to it by the Constitution. If we have faith in our Constitution, we should call it a collaboration between two coordinate authorities rather than confrontation.  Our judiciary down the years has enjoyed a reputation second to none in the Judicial world. We have produced Judges of great eminence, of great learning, of great humanity who have enriched the pages of die Law Reports. Their independence and impartiality has never been doubted or suspect. Like a clap of thunder in a clear night, the atmosphere has changed. For the first time in the history of Judicial administration of our country, government has publicly and officially proclaimed a policy which if given effect to, will destroy the independence of the Judiciary and make it not impartial, but partisan, and render the Judges henchmen of those in authority.  I do not want to go into the question of the supersession of the three Judges of the Supreme Court in any detail. The facts are well known and the matter has been debated from a hundred platforms and the action of Government has been universally condemned- except by those who have eyes and will not see and ears and will not hear or by those who are committed body and soul to Government or by those who have gained or hope to gain by this policy of Government. But human memory is notoriously short and it is necessary to recapitulate briefly the highlights of this sorry and sordid episode. Chief Justice Sikri's term of office was coming to an end and he was never consulted about his proposed successor. He came to know when the name was announced on the radio like any other man in the street. The Judges superseded were also never informed. So important an event as the appointment of the Chief Justice of India was manipulated and presented as a fait accompli in the utmost secrecy, so that there should be no time for the Bar or the public to protest against so egregious an action. A similar action was intended at the time of Mr. Justice Shah, but it was foiled because the Bar and the Bench protested strongly when it came to know about it. The convention of appointing the senior most Judge to succeed as Chief Justice never departed from in the past was callously disregarded without any justification although the senior most Judge was respected by the Bar as one of the ablest incumbents of the Bench. The three judges superseded had all voted against the Government in the well-known Fundamental Rights case to which Government attached the greatest importance and treated it as a prestigious issue. The mere narration of these facts is sufficient to satisfy any impartial judge hat what happened was a calculated and preconceived plot on the part of Government to undermine if not destroy the independence of the Judiciary.  The Official explanation on the floor of Lok Sabha when there was a pained and shocked outcry from Bars all over India and from the general and thinking public, made matters worse. Government claimed an absolute right to appoint such Judge as they thought proper, and they left no doubt as to who they thought were proper Judges. A Judge must be forward looking; a Judge must be conscious of any change of wind; he must be in tune with the Congress policy. It need hardly be said that if this was going to be the policy in future for the appointment of Judges, every Judge who thought more of his preferment and promotion than his Judicial reputation or honesty of purpose would try to give satisfaction to Government by looking forward as far as he could from his chair on the Bench- the clearer the vision the greater the prospects. He would study the political weather report every morning, which way the political wind was blowing and he would try to decipher what the Congress policy was at any given point of time- a task which even political scientists would find difficult to accomplish.  A deadly blow had been dealt at the one institution in India which had refused to conform to Government's views, which time and again had told Government in no unmistakable terms that it was wrong and which had courageously and steadfastly protected the rights of citizens against the ever-increasing inroads of Government and Government-controlled Parliament, upon a free society which is another name for democracy in contradistinction to a captive and totalitarian society. But the Bar reacted gloriously. It was their finest hour and Government was made to realise that public opinion will not tolerate the destruction of one of the most important pillars of the Constitution.  The Bar will always support an independent Judiciary, but in the ultimate analysis, it will depend upon the Judiciary itself. I have no doubt that our Judges with the glorious traditions of the Indian Judiciary which have been built up in the course of a century, will not succumb to the threats, blandishments or the temptations which Government will undoubtedly hold out.  I may end this part of my lecture by a quotation from Lord Bryce's modern democracies :  "There is no better test of the excellence of a Government than the efficiency of the Judicial system. If the law is dishonestly administered, the salt has lost savour. If the lamp of justice goes out in darkness, how great is the darkness".  There are two or three provisions in the Constitution relating to the Judiciary to which I wish to advert. The first and foremost is the salary of High Court Judges. It is fixed at Rs. 3,500. It can neither be reduced nor increased without an amendment of the Constitution. By a strange irony, the provision regarding the salary of the Judges was inserted in the Constitution in order to give security to the Judges. It has now turned out that the salary has become frozen and instead of security, it has led to penury. The Judges of the Bombay High Court, 100 years ago, used to draw a salary of Rs. 4,000 —today, it is Rs. 3,500. In those halcyon days of old the Judges hardly paid any tax and the cost of living was about 10 times less and the Rupee was worth a rupee and not 30 paise as at present (It might have gone down further since I wrote these lines). The prospects at the Bar are much brighter. There are more Courts and Tribunals to practise before than there were when I was a Junior. And the rewards of success are most glittering. The result has been that every Chief Justice finds it almost impossible to persuade a young and able lawyer to accept a seat on the Bench. Perforce he has to depend for the strength of the Bench on District Judges. I have nothing against them- some have proved to be very good Judges. But I cannot conceive of the High Court as a glorified District Court. Unless the Bar is fully represented on the Bench, the whole character and atmosphere of the High Court will change. A practising lawyer brings to the Bench something which a District Judge, however able, can never do.  We are told that now the highest Government Officer in the Civil Services does not draw more than Rs. 3,5001-. This is an entirely fallacious argument. There must be some relationship between income at the Bar and the salary you pay to your Judges. It is true that every good lawyer, when he accepts a Judgeship, must make a sacrifice in the public interest. But the sacrifice must be reasonable- not such as to break the back of the person making it.  I have often suggested that if it is not possible to increase their salaries (for it would almost be impossible for a constitutional amendment to go through Parliament as it is at present constituted with its antipathy towards the Judiciary and its ideological outlook) there are several - what I might call- peripheral benefits that the Judge can be given so as to give him some relief. Consider such benefits which a member of the Civil Service enjoys or for the matter of that, a Minister or a Member of Parliament, even though on paper, their salary is the same or much less than that of the Judge.  The second important matter which requires an immediate amendment of the Constitution is to place the Judge in the same position as the Auditor-General. The latter cannot hold any office under the Government or under the Government of any State after retirement. This is a salutary provision to ensure the utmost impartiality and integrity in an office of high responsibility. Does a Judge hold an office which is less responsible and which calls for less independence or impartiality? It is sad to see the number of Judges who pay Court to Ministers to get appointed to some Tribunal after retirement- and it is sadder to see how many tribunals are manned by ex-Judges. There is one Judge I know of who has never ceased to be in charge of a Tribunal of some sort or another ever since his retirement which was a very long time ago. Only the cruel and relentless hand of death can remove him from a Tribunal. The consequences of this policy of Government have been highly prejudicial to the fair name of the Judiciary. Short time before retirement, every Judgement of a Judge, however honest, becomes suspect. If it is in favour of Government, and rightly so, he is accused of pleasing those who have patronage to bestow. And some Judges I know go out of their way to decide against Government in order to assert their independence, which is equally unfortunate.  Government, in defence of their policy, say that they want judicial talent for most of their tribunals. The solution is very simple; take a Sitting Judge and, if necessary, fill up his temporary vacancy by a fresh appointment The other advantage of this solution will be that it would be the Chief Justice who would recommend the Judge for the Tribunal. Today, it is Government who bestow favours upon those whom they like or who have given them satisfaction by their Judgements.  What about the right to practice? That stands on an entirely different footing. I may have the right to practice, but that does not mean that I will enjoy a practice. That would depend upon my own ability and the confidence that my clients may have in me. Government cannot dictate to a client which Counsel he should brief, except in Government cases, where there is considerable abuse in the preparation of a panel of Government Advocates. But no system can be perfect and even Government wants able lawyers to fight their cases.  Government has claimed the exclusive right and privilege of appointing Judges and Chief Justices of High Courts, and Supreme Court. Even in the U.S.A. where the President appoints the Federal Judges it is with the advice and consent of the Senate and the President before submitting his name to the Senate usually consults Bar Associations and leading jurists. In India, our constitution only provides for consultation in one of the modes provided by the Constitution. But consultation more often than not is an empty formality. For all practical purposes, the power to appoint is absolute in the hands of Government. After Government has announced its policy as l stated before with regard to the qualifications required for appointment as a judge this absolutism has become even more dangerous and should no longer be permitted and the I constitution should be amended to entrust the appointment of i Judges to an independent authority.  One suggestion is that the concurrence of the Chief Justice should be necessary in the case of every appointment of a Judge of the High Court or Supreme Court. In the case of appointment of the Chief Justice of a High Court, the concurrence of Chief Justice of India should be necessary add in the case of the appointment of the Chief Justice of India the concurrence of the retiring Chief Justice should be required. Another suggestion is the constitution of a high powered Judicial Council whose concurrence would have to be sought. The Council should consist of retired chief justices not holding any office of profit under the state.  It is also necessary that the initiative for the appointment of a Judge should come from the Chief Justice and not Government. This will empty the Darbar Halls of some Ministers and stop unnecessary canvassing by candidates to this high office.  The last question I will deal with is the appointment of ad hoc Judges. The provision has been made for such appointment to seek a sudden contingency. But what was intended as a contingency has tended to become a settled practice. The retiring age of every Judge is known- he cannot hide it as a woman is supposed to hide hers. Why does not Government make up its mind to fill up a vacancy long before it occurs, so that the strength of the Court is not reduced even for a short time ? Today, the vacancy is not filled up when it occurs and the retiring Judge is very often asked to continue as an _ad _hoe Judge. This is a pernicious practice and contrary to the spirit of the Constitution. In effect, it extends the retiring age of a Judge. If a retired Judge continues as an ad hoc Judge, then he retires not at the point of time fixed by the Constitution but after an indefinite period determined by the Chief Justice. It may not be charitable to say so, but it is not far from the truth that Ministers like candidates for Judgeships to pay court to them, to attend their Darbar, dangle the glittering prize before them, to impress them with their power I and authority and finally when a decision has reluctantly to be taken, appoint the favoured one.  In conclusion, I must stress the importance of public opinion as far as the independence of the Judiciary is concerned. Whoever believes in democracy must believe in the ultimate triumph of public opinion, if it is strong, united and fearless. If it is the people who have to govern the country, then the will of the people can only be manifested through public opinion. Recently, it has toppled (to use an expression which has now become part of the political vocabulary of our country) the President of the United States- than whom there is no more powerful person in the world with the possible exception (and I must mention the exception) of our Prime Minister. If it can do that it can surely condemn back-sliding Judges and see that they remain on the right track, true to themselves, true to their high office and loyal to the Constitution. It can also prevent Government from pursuing any policy or taking any action which will undermine the prestige, the dignity and independence of the Judges.  _Previous musing: [THE ESSENCE OF DEMOCRACY](https://indianliberals.in/content/the-essence-of-democracy-3/)_ --- ## [Musing] The State of Enterprise in Free India URL: https://indianliberals.in/musings/the-state-of-enterprise-in-little-india/ ### Body _The following excerpt has been taken from an essay titled 'Prosperity Beyond Our Cities by Spreading Enterprise' written by R. Gopalakrishnan, published by the Forum of Free Enterprise in 2007._ _The term “Little India” has been used to refer to over 600,000 small towns and villages with a population less than 50,000._ India has had so much regulation that no amount of deregulation seems adequate. The chambers of commerce conduct conferences on subjects like "Is India Inc over-regulated?" If India Inc thinks so, imagine the situation in Little India.  There are many anecdotes about the feeling of hopelessness among the small town/rural population-about the lack of rural infrastructure, banks, schools, healthcare or transport to nearby towns, all of which are essential to support commerce and enterprise and the creation of jobs. I have traveled into small towns and villages to assess these feelings. I am shocked that it is a live story of economic deprivation, social injustice and hopelessness that big town folks like I cannot comprehend.  An IGP of police in UP once described to me the harsh social and economic realities he encounters every day. To my astonishment he concluded by saying "You folks from Delhi and Murnbai do not really live in India."  Citizens who have worked in Little India have experienced these shocking standards of public service and governance. "For more than 50 years, successive governments have initiated several programs to deal with poverty, but they have not made any major dent in the economic and social status of hundreds of millions," observes one such worker. The various public schemes are not entirely useless; but the state of public services by corrupt governments and inefficient bureaucracies are far below the community's needs. Looking at the way programs are managed by the government, these conditions are unlikely to change in the foreseeable future. So they may continue to appear useless for quite a long time.  The solution lies in leveraging the natural spirit of enterprise among the people of Little India by empowering them more. Intuitively it sounds like a worthy approach. Despite legislation and public pronouncements to delegate power to the communities in Little India through decentralized governance, our system has found it difficult to do.  There is of course a debate to be had on the practical merits: are the people capable, can they take care of their self-interests, will local 'lords' spirit away public money from the community? These are valid concerns and, as I have pointed out earlier, the debate was had even sixty years ago. Intellectuals and bureaucrats in the urban areas make the decisions about Little India. They are intrinsically more interested in subjects like organized industry, foreign investment, stock markets and so on.  The issue of Little India's economic growth continues to be partially attended. Something has to change. But having tried other alternatives in the past, it is now time to do something different.  However, we cannot replicate the dramatic effects achieved in industrial and urban India by the single act of scrapping industrial licensing. Being rooted in society and politics, Little India's change agenda will be somewhat evolutionary. But the time has come. Robert Reich, a professor of public policy, observes, "Democracy means more than a process of free and fair elections. Democracy is a system for accomplishing what can only be achieved by 12 citizens joining together with other citizens." The role of capitalism is to enlarge the economic pie. The slicing up of the economic pie is the role of governance and democracy. type=content&p=8610). Needs editorial review._ --- ## [Musing] The Swatantra Economy : Obstacles and Challenges URL: https://indianliberals.in/musings/the-swatantra-economy-obstacles-and-challenges/ ### Body _The following piece was originally published in the October 1994 edition of the [Freedom First Magazine.](http://www.freedomfirst.in/issue/issue.aspx?issue=423) It contains important excerpts from the speech of Prof. Gangadhar Gadgil who was invited to deliver the Rajaji Birthday Lecture in 1994, by the Rajaji Foundation. _Prof. Gangadhar Gadgil delivered this year's. Rajaji Birthday Lecture. The subject: "The Swatantra Economy - Obstacles and Challenges". Referring to the new economic policy, Prof. Gadgil observed: "Even five years ago, it seemed impossible that such far-reaching changes in our economic policy and system would take place so soon and on such a scale. But the seemingly impossible appears to be taking place. Rajaji and those like Minoo Masani who shared his views stand vindicated. A Swatantra economy is enlarging and is taking shape."  Is the process of liberalization irreversible or will it continue by its own momentum and even gather strength? asked the speaker and answered that the process was unlikely to reverse itself for the simple reason that "socialist centrally planned and highly regulated economies do not work. They are not only inefficient, they are also unsustainable." However, warned Prof. Gadgil: "A realistic assessment of the situation does not indicate that the liberalization process will be unhampered and smooth." According to Prof. Gadgil factors favouring liberalisation were:  Economic power in the world was now in the hands of free economies who also control international institutions like the World Bank and the IMF. The rulers of these countries are convinced that "the economic lame ducks in the world can be set on their feet only through Liberalization" In Europe, in North America and in the Asia Pacific Region, large free trade areas are being established. Even diehard dictatorships in countries like Burma, Vietnam are liberalizing their economies for survival and growth. To obtain essential imports we have neither to export or obtain in capital from abroad. This necessitates our attracting foreign private investment which will only come if our economy is free and open in large measure.  While these factors indicate that liberalization is by and large irreversible, there are threats, as is evidenced from the problems in Russia where the process could end in failure and reversal.  Dealing with the conditions that could defeat the liberalization process in India, Prof. Gangadhar Gadgil pointed out the crucial importance of law and order and price stability. "If life and property are not secure, if criminals can interfere with and impose arbitrary burdens on business and commerce, if there is an unholy marriage of crime and politics and inflation runs wild the liberalization process would be arrested and throttled," warned Prof. Gadgil.  Evidence of a breakdown of law and older are already available not only in North East India and Kashmir but has reached serious proportions also in states like UP and Bihar. In Bombay criminal elements engaged in smuggling, drug trade and real estate development virtually brought commercial activity to a standstill twice in the recent past Another factor obstructing the liberalization process is the activities of trade unions engaged in large scale intimidation. By opposing the closure of inefficient, loss-making units;, the break-up of public sector monopolies and privatisation of public sector enterprises, these unions were actually throttling growth. What is worse is that they make use of criminal elements in doing so and some of them have been taken over by criminals.  Among other dangers to the liberalization process were :  - Fiscal discipline, frauds in the financial sector and uncontrolled monetary expansion; - the reluctance of public sector monopolies to relinquish their monopoly control with ministers in charge of these monopolies themselves resisting the process of liberalization and insisting on giving approvals on ‘a case by case’ basis or as some wags put it on ‘a suitcase by suitcase’ basis; - the fact that despite the declared intention in giving up licencing, controls and subsidies, entrepreneurs are continuously subjected to various regulations by politicians and bureaucrats. The politicians and bureaucrats who obstruct the liberalisation process for their own narrow selfish ends have unfortunately the support of large classes of people like employees in the public sector, farmers, small manufacturers and others who benefit from the controls, regulations and subsidies in our present economy. In reality the losses they suffer because of the present economic system, are far more than the gains they secure from it. It is however a very difficult task to bring it home to them. Perhaps the biggest obstacle to liberalization is the emasculation of the people and the development of the habit of total dependence on the state for the solution of their problems. "When a population loses its character and ability to be sturdily self-reliant, it is unlikely to support the dismantling of the socialist welfare state. On the contrary, the people are likely to support continuation of the socialist welfare state because it protects them from demands that a free market economy makes on them,” observed Prof. Gadgil.  Emphasizing the importance of voluntary organizations and voluntary effort in social life, Prof. Gadgil expressed the view that this would help reduce the social and political malaise from which the country is suffering. Unfortunately the country had "a large army of pseudo voluntary social workers, who are exploiting society for their.own benefit. Instead of being the defenders of individual liberty and independent voluntary effort, they are becoming instruments of corruption. These voluntary workers and the politicians generate cynicism in society and give rise to extremist movements, which are committed to wholesale destruction of the existing order." Pointing out the need for voluntary workers who steadily build independent social organisations which are committed to steady, constructive effort and which firmly resist encroachments on individual liberty by the Government”, Prof. Gadgil said that fortunately there were, even today a few such organisations in India. He pointed out men like Anna Hazare and Pandurangshastri Athavale who have built such organisations.  Concluding the 1994 Rajaji Birthday Lecture, Prof. Gangadhar Gadgil underlined the crucial need for the policy of liberalisation to succeed. He said: "Liberalisation might cause pain in the short run but it will bring immense benefits in the long run. It has been done in so many Asian countries, which until recently were as poor and undeveloped as we are. We must learn from their experience and find ways of minimizing economic distress as we progress along the path of liberalisation." --- ## [Musing] The Swatantra Manifesto URL: https://indianliberals.in/musings/the-swatantra-manifesto/ ### Body _Produced below is an essay by Prof. G.N. Lawande, published in a 1961 edition of_[_The Indian Libertarian._](https://indianliberals.in/content/the-indian-libertarian-december-15-1961/)_ The essay dissects the forward-looking, reform-oriented manifesto of the Swatantra Party that argued against statist policies of the time. _The two year old party, namely, the Swatantra Party has just released its election manifesto to the press with a clear cut programme. What distinguishes it from other parties is that it makes no tall promises to the people in spite of the fact that its leaders are fully aware that there is little chance of its being voted to power. It will be welcomed by the intelligentsia of the Country because it is based on certain objectives and policies for which it will work, if given the opportunity. It is a challenge to the ruling party who by the acts of commission and omission and with a rule of dictatorship in the name of democracy has brought about misery, suffering and hardship to the people. In the preindependence era miseries and hardships were attributed to the British rule and it was expected that our national leaders would set the matter right but now the people have realised that the sufferings of the preindependence era were more enjoyable than the present ones. The British at least had some ideals and principles which are thrown to the wind by the present rulers. "Hoarding and unscrupulous black marketing are resorted to as a social menace to keep the position and influence and the distressed are overlooked for the privileges of a few. Character is thrown to the winds as against wealth. Justice is getting blinder and there is growing of a wide disparity amongst individuals. Unemployment is on the increase, the able-bodied men have to beg and live on doles; honesty is more a disqualification for a peaceful living and all is in turmoil. The country is being driven towards Communism and communalism and the democracy we dreamt of is now only the concentration of power and responsibility in the hands of a few people supported by Yes men and if this state of affairs is allowed to continue teeming millions of Indians will have to face more and more miseries in times to come." This is the sad experience that we are facing during the last fourteen years of Independence. This is mainly due to the fact that we have no strong opposition party either in the Centre or in the State. The various parties that exist today are not quite different from the ruling party and they have no proper programme and policies to be placed before the electorate for their support. The present opposition parties in Legislature are too weak and powerless. There is an urgent need to put a brake to the statism of the ruling party and the manifesto of Swatantra Party has offered the country “for the first time” with an opposition with a clear cut alternative way of governance which can take over from the present ruling party whenever the people call upon it to do so. The manifesto says "every voter who realises the importance of such an opposition and who does not want the all embracing statism of the Congress party will refuse to give it a fresh lease of untrammelled power, which would be tantamount to perpetuation of one party rule and will give their support to Swatantra Party candidates whenever they offer themselves for election, so that democracy may be safeguard."  The manifesto says that the primary obligation of the Government is to provide man with food, clothing and shelter and also fuller employment, more schools, more minor irrigation projects and more small industries. It also gives top priority to clean drinking water, to rural areas and to housing in both rural and urban areas. It has also realised the supreme importance of the development of roads and inland water transport. The manifesto realises the urgent need of mobile ambulance facilities in rural areas. The leaders of the Swatantra Party rightly believes that all these objectives are within the reach of the country, provided the large funds which are now spent on spectacular and gigantic projects are properly utilised for the welfare of the common man. At present the prices of consumer goods and especially of foodgrains are rising day by day and during the Second Five Year Plan they have increased by 42% and ruling party has miserably failed to stabilise them. The Swatantra Party rightly believes that the prices should be stabilised. It also promises that there should be a drastic reduction in heavy and reckless taxation and wasteful expenditure. It is against joint farming because of the official control that it involves and its conviction that individual ownership and effort will be more conducive to better results than collective ownership and organisation of production. It has also made attractive promises to the farmers. It promises abolition of land taxes except to the extent necessary for maintaining ownership records; support to an adequate level of agricultural prices relative to the prices of industrial commodities; establishment of insurance fund against natural calamities; adequate wages to the landless agricultural labour and protection of permanently employed labour in agriculture; speedy electrification in rural areas; establishment of small scale modernised industries in the country in order to absorb the surplus agricultural labour.  The manifesto of Swatantra Party is against Trading, bureaucratic controls, centralised planning and "extra constitutional dictation of the Planning Commission." On the other hand it is in favour of the development of small scale industries, consumer goods industries, rural electrification and road transport. The party is against monopoly and concentration of economic power whether in the public or in the private sector.  From this it is quite clear that the leaders of the Swatantra Party have rightly realised the difficulties of the common man. He is suffering from the rising prices but greatest peril according to the manifesto is statism which has expressed itself in "permit-licence-raj." This concentration of political and economic power has resulted in reckless and wasteful expenditure, spiralling inflation and blackmarketting. It is a fact that the ruling party has sacrificed the urgent needs of common man by adopting near communist planning. It must be admitted that the Swatantra Party is fully aware of the fact that it has to give a tough fight to a party well entrenched in the seats of power. It has to fight against the prevailing mood of the country in which large scale State intervention and initiative are taken for granted. This mood of looking up to the State for everything has to be changed if a libertarian society with minimum of state control is to be achieved. The chief merit of this manifesto lies in the fact that it has refused to make impossible promises in a bid for popular support. The manifesto may not have glamour but to say that it is uninspiring is nothing but nonsense. The party does hope not to come to power in the immediate future but to play the role of "missing component in the democratic framework of our national life." In other words it seeks to function as a strong Opposition Party which will serve as a check on the growing statism of the ruling party.  The manifesto is a challenge to the people because it is based on different outlook and ideology. It may be called a manifesto of Opposition and not the manifesto of Government. Economic development of our country cannot be rapid unless the present trends are reversed and that can be done only by Swatantra Party as a strong, vigilant opposition party. Economic development in India requires both accelerator and a brake. The public sector has provided an accelerator by increasing purchasing power through deficit financing and now time has come to apply a brake and a wise and intelligent voter will recognise that Swatantra Party in opposition is quite essential at this stage if the individual liberties as guaranteed in the Constitution are to be safeguarded. It is the duty of every voter to cast his or her vote in favour of Swatantra candidate. That is the only way to allow our democracy to function properly. One must congratulate those who have framed the Manifesto of the Party because "in that they have concentrated in a concise form both a philosophy and a plan of action which is new to Indian political life. It is hoped that it will have significant success at the polls to achieve its prime function, namely to place a brake on the monolithic power of the Congress effectively to promote individual effort and freedom." The party is to be judged by what it offers positively and this Swatantra Manifesto is a unique one because it has not only indicated what it will do and what it will not do but also how it proposes to implement its promises. It is the manifesto that will lead our country to prosperity through freedom. An impression is gaining ground that Swatantra Party is against Planning, foreign aid and development of heavy industries. But a careful study of the manifesto shows that it tries to show to the public the shortcomings of the approach of the party in power on a number of issues and to suggest workable alternatives such as would not offend the traditional and spiritual values that have always been prized by the people of this country. "However impressive the manifesto of a political party may be, its import and implications cannot be expected fully to percolate to the man in the street or the people in the remotest village. The voting will not therefore necessarily reflect an appreciation or understanding of the manifesto but it is bound to reflect at least in part, in the disapproval of certain policies and actions of the party in power, and if the section registering such disapproval is sufficiently large, the feeling in business circles is that it is probable that the political party benefitting largely by this will be the Swatantra Party. It would then be for the Swatantra Party to prove how effective as an opposition it will function. For it is not only the leaders and spokesmen of the Swatantra Party that want an effective opposition but all lovers of parliamentary democracy generally." We are sure that manifesto will infuse courage in the minds of the electorate and we have no doubt that a large number of voters will vote in favour of the Swatantra Party because it will lead the country to prosperity without destroying the individual liberties. All lovers of freedom are therefore required to cast their votes in favour of Swatantra. _Last week's musing: [MINOO MASANI: OLD LIBERALISM & NEW LIBERALISM](https://indianliberals.in/content/minoo-masani-old-liberalism-new-liberalism/)_ --- ## [Musing] Nani Palkhivala: The Task Before A Free People URL: https://indianliberals.in/musings/the-task-before-a-free-people/ ### Body The following text is taken from a booklet published by [Forum of Free Enterprise.](https://indianliberals.in/content/the-tasks-before-a-free-people-by-n-a-palkhivala-may-20-1977/) Authored by Indian jurist and liberal economist Nani Palkhivala, the text is based on an open letter written to the then Prime Minister, originally published in 1977. Marking the end of the Emergency, the 1977 Parliamentary election was among the most important in Indian political history. The impossible happened; and the inevitable did not happen. The triumph of the Janata-CFD party must have rung the bells of heaven the wildest peal for years. Reason, that torch of smoky pine, anticipated results which hovered between narrow victory and narrow defeat for the Congress. The difference between the expectation and the reality was the difference between a tremor and an earthquake, between a drizzle and a hurricane. The last Parliamentary election in India was one of the most significant in the entire history of freedom. At one stroke it doubled the number of free people on earth. In the words of Bernard Levin, India voted in a manner which put ancient and sophisticated democracies to shame. The electorate's verdict has vindicated our national motto- "Truth shall prevail"- which was wholly forgotten for 20 months. Secondly, it has once again proved that to the soul of India, sacrifice appeals more than success the returned candidates were mostly those who had suffered and sacrificed for the good of the country. Thirdly, the "illiterate intelligence" of the masses brought about a result which the "educated incapacity" of the intelligentsia could not foresee. A free nation can be stifled by indigenous autocrats only through its own apathy and folly - apart from brute military force. An authoritarian regime is only as puissant as the sycophants and the time-servers, the cringing and the craven, will make it. No human being can be more powerful than his henchmen will allow him to be. History will apportion the blame and the responsibility among a wide spectrum of the elected representatives who betrayed their trust. Jawaharlal Nehru's description of the condition of India under British domination must have come home with the atrocities of the Emergency to countless people: "We seemed to be helpless in the grip of some all-powerful monster; our limbs were paralysed, our minds deadened. . . . The dominant impulse in India was that of fear-pervasive, oppressing, strangling fear; fear of the army, the police, the widespread secret service, fear of the official class; fear of laws to suppress and of prison." Fear, born of terror, was more acute- particularly among the innocent- during the twenty months of the Emergency than it was during the two centuries of British rule. The first act of the liberated people should be to thank, from the depths of their souls, whatever Higher Forces they believe in- for the deliverance. "Above blind fate and the antagonist powers, Moveless there stands a high unchanging Will; To its omnipotence leave thy work's result. All things shall change in Cod's transfiguring hour." Human propensity to err is the favourite instrument of Providence for achieving its beneficent designs. Hitler, despite his super-efficient organization, attacks Russia instead of invading Britain- and it is the beginning of the end of the engulfing night. Nixon, notwithstanding his unsurpassed political cunning, tapes his own misdeeds- and the United States enters a brighter phase. The Indian autocracy, although armed with an all-powerful and all-pervasive secret intelligence force, calls for elections at a time of seething discontent simmering under the surface- and India secures a fresh lease of freedom. Next, since public memory is so alarmingly short, let us reiterate our gratitude to the men who suffered in diverse ways and whose sacrifices made the restoration of freedom possible. The first name which springs to anyone's mind is that of Jayaprakash Narayan. Not since the time of Gandhiji has moral force- personified by a frail invalid- triumphed so spectacularly over the forces of evil. He changed decisively the course of history. One life transformed the destiny of 620 millions. His epoch-making work must be carried on and the process of public education must never cease. Others will have to continue to propagate the great values which Jayaprakash has taught the nation - a lesson which our people may not always remember but which they will never wholly forget. There were of course countless others,- prominent figures as well as the humble and nameless who will never be known to the roll-call of honour. They were the ones who withstood the hundred thousand petty tyrants that mushroomed all over the country during the Emergency. William Makepeace Thackeray observed in "Pendennis": "Men serve women on their knees. When they rise, they go away." It is the same with our electorate. They love and worship their leaders. But when the spell is broken, they unfailingly transfer their allegiance elsewhere. In history there are few more telling examples of this truth than the difference between the results of the 1971 and the 1977 elections. Today the people are in a mood which comes rarely in the life of a country. They are looking forward, starry-eyed, to a new direction, a new era, a new life. It is time not merely for a new budget or a new licensing policy or a new price structure. It is the moment for shaping and moulding a new society, for giving a new and clear identity to the nation. Although we developed highly sophisticated technical skills, we basically remained a feudal and caste-ridden society. A deep and sudden realization dawned on the people last month which made their vote cut across the immemorial feudal and caste lines. The election could be made the matrix of a reborn nation. The mood of the people today clearly marks a transition from the feudal age to the modern age. The outdated values of feudalism-birth, wealth, position and power-have been drastically eroded, and the age of the common man has begun. This is the golden moment to transform our caste-ridden society into a modern society. Our people take their morals and their mores from their leaders. What can selfless leadership, imbued with vision and understanding, with knowledge and dedication, not do for this country at this historic juncture? We have in Shri Morarji Desai a Prime Minister who is a firm believer in moral values and high principles, and a Cabinet with vast talents and high administrative competence. All the auguries are auspicious for tackling the daunting tasks. The first task is to have leadership at all levels from the Prime Minister's to the panchayat's. True leadership is the exact opposite of the concentration of all power and decision-making authority in one individual. To be a true leader is to unleash the full power of the organization and to release the potential and energy in the rank and file by means of personal impact. Given selfless and dedicated leadership at this juncture, the objective, in the Janata Party Manifesto, of removing destitution within ten years can be achieved. We have to motivate the people so that they put the national interest above the sectional interest. It would be a tragedy if, having regained our freedom, we do not use it wisely and well and allow democracy to degenerate into mobocracy. The crying need of the hour is self-discipline and self-restraint. During the post-war period, trade unions in Germany voluntarily applied a wage-freeze on themselves, on condition that industry ploughed back its profits to increase the output and create further employment. The consequence of this self-imposed wage-freeze was more and more investment, resulting in more and more employment. Real wages per person were steady during this recovery period, but real wages per family increased because of more employment. In a country where all the groups function harmoniously, the results are fantastically gratifying-totally out of proportion to the inputs. Germany and japan are examples of the synergistic effect of such harmonious co-operation. Great Britain and Italy serve as warnings of the consequences of its absence. Plato thought poorly of democracy because it always degenerated into mobocracy. On the other hand, Gandhiji had great faith in the masses and believed that given the right leadership they were capable of self-restraint and self-discipline. Let us so conduct ourselves that we prove Gandhiji right and Plato wrong. At the Centre we must establish Government of India Limited - limited not in responsibility, but limited by the rule of law, by the discipline of the Constitution, and limited in its capacity to release an unending torrent of ill-digested laws on the people. The last Government treated the Constitution of India as its private property and dealt with Indian law as its personal backyard. Between 1971 and 1976 it made 19 amendments to the Constitution, passed 463 statutes, promulgated 96 Ordinances and 30 Regulations, and enacted 114 President's Acts for the States under Presidential rule. For good measure the Law Ministry drafted 36,515 Rules, Orders and Notifications. One of the first tasks is obviously to undo the mischief perpetrated by the 42nd Amendment--that monstrous outrage on the Constitution. Our original Constitution provided for stability without stagnation and growth without destruction of human values. The recent amendments have only achieved stagnation without stability and destruction of human values without growth. On 9th December 1946, Sachchidananda Sinha, in his Inaugural Address as Provisional Chairman to the Constituent Assembly, quoted the words of joseph Story (with reference to the American Constitution) which have proved truly prophetic: "The structure has been erected by architects of consummate skill and fidelity; its foundations are solid; its compartments are beautiful as well as useful; its arrangements are full of wisdom and order; and its defences are impregnable from without. It has been reared for immortality, if the work of man may justly aspire to such a title. It may, nevertheless, perish in an hour by the folly, or corruption, or negligence of its only keepers, the people. Republics are created-these are the words which I commend to you for your consideration -by the virtue, public spirit, and intelligence of the citizens. They fall, when the wise are banished from the public councils, because they dare to be honest, and the profligate are rewarded, because they flatter the people, in order to betray them." The Government need not worry about getting a two-thirds majority in both the Houses of Parliament to nullify the worst features of the 42nd Amendment. The Supreme Court can do the job equally effectively in appropriate proceedings taken by a citizen. The Supreme Court held in Kesavananda Bharati's case that, while Parliament has the power to amend any part of the Constitution, the power cannot be so exercised as to alter or destroy the basic structure of the Constitution. This is the law of India today and it is binding on every authority throughout India, including Parliament. Following that decision, the Supreme Court can and should hold those provisions of the 42nd Amendment to be void which alter or destroy the basic structure of the Constitution. In four respects at least, the 42nd Amendment does alter or destroy the basic structure of the Constitution. First, it overthrows the supremacy of the Constitution and instals Parliament (a creature of the Constitution) as the supreme authority to which the Constitution is to be subservient. The instrument becomes the master, and the master the instrument. Secondly, the Amendment enacts that the eternal values enshrined as fundamental rights in the Constitution will no longer be justiciable or operate as brakes on legislative and executive action in most fields. Thirdly, the balance between the executive, the legislature and the judiciary is rudely shaken, and the executive at the Centre gains enormously in power at the expense of the other organs of the State, particularly the judiciary. Fourthly, the Amendment envisages the enforcement of laws even after they are held unconstitutional by a majority of the Supreme Court or the High Court. These provisions are clearly ultra vires the amending power of Parliament and should be struck down by the Supreme Court as void. The only remaining question is whether the Supreme Court is debarred from declaring the 42nd Amendment to be void by reason of the clauses added to Article 368 which are to the effect that no amendment "shall be called in question in any court on any ground" and that "there shall be no limitation whatever on the constituent power of Parliament to amend... the Constitution .. The correct position in law is that the above-quoted arrogant provision is itself void. Kesavananda Bharati's case makes it clear that if Parliament's original power was limited, it could not be enlarged or made plenary by any exercise of that very amending power. How can Parliament, whose amending power is limited, rationally or validly enact that any transgression of the limits of its power shall not be called in question in any court? How can the done of a limited power enlarge its own power? To any logical mind, the answer is beyond the pale of controversy. The members of the last Parliament, after taking the oath of true faith and allegiance to the Constitution, had no compunction in altering or destroying its basic structure. The members of the present Parliament, who took the pledge at Rajghat on 24th March 1977 "to uphold the inalienable rights to life and liberty of the citizens of our republic", cannot fulfil the pledge unless they are prepared to accept the supremacy of the fundamental rights in the Constitution. It is not the MPs, dressed in brief authority, who are supreme. It is the Constitution which is supreme. It is the eternal human freedoms which are supreme. It is the people who are supreme and it is they who have given the Constitution unto themselves. The facile assumption that the will of Parliament is the will of the people has never been so violently exploded as at the last election. It was Parliament which passed the 42nd Amendment and also approved of the proclamation of Emergency. Did it represent the will of the people? The people have given their resounding verdict on those misguided representatives who claimed to be supreme over the Constitution and over basic human values. The Australian electorate has approved only five of the thirty-two changes in the Constitution proposed by their Parliament in the last seventy-seven years. At the end of 1973 the Australian Parliament passed by an impressive majority two proposals for constitutional amendment, but both the proposals were rejected (on a referendum) by equally impressive majorities by the people in every single State of Australia. It is to be hoped that the present Government will pass such laws and take such executive action as are not meant merely to provide for the exigencies of the moment but calculated to ensure the good of the country in the long years ahead. Though the present electoral system has brought the Janata Party to power, the party would be rendering a lasting national service by effecting electoral reform. · Despite its shortcomings, proportional representation would, on the whole, be more just and fair than the present system of "first past the post". The Janata Party Manifesto is admirably drafted. With the amount of zeal and dedication that we have in the Cabinet today there is every hope that the Manifesto will not remain a historic parchment in a glass case but will be translated into action with all convenient speed. There can be no two opinions on the point that the topmost priority must be given to amelioration of the lot of the 40 percent who still live below the minimum subsistence line. Our first concern must be to look after the weakest-the man who is bowed by the weight of centuries, stolid and stunned, "dead to rapture and despair, a thing that grieves not and that never hopes". There are at least 40 million unemployed today in a country which cannot and does not afford any social benefits. Poverty is cruel, but it is curable. The only known cure is economic rationalism instead of economic theology. In the field of economics the tree of ideology has never borne any fruit. All "isms" are lethal. In a poor country like India, there can never be social justice without economic growth. We have countless chances for development. Opportunities multiply when they are seized; they die when neglected. We have barely tapped our immeasurable potential for growth. Immense man-power, superb skills and enterprise are to India what oil is to the Middle East. At least 250 million of our citizens are contributors to the national product. There is one way, and one way only, in which India can banish poverty, and that is by putting to the maximum productive use the 2,000 million man-hours which fleet over India every day, never to come again. To every economic policy and legislation we must apply the acid test-how far will it bend the talent. energy and time of our people to fruitful ends and how far will it dissipate them in coping with legal inanities and a bumbling bureaucracy. "Much to cast· down, much to build,. much to restore; Let the work not delay, time and the arm not waste; Let the clay be dug from the pit, let the saw cut the stone; Let the fire not be quenched in the forge." Irrigation has been sadly neglected during the last thirty years. On an average, India receives 3,000 million acrefeet rainfall in a year, - sufficient to submerge the entire country in a 45 feet deep layer of water. The total area under cultivation was about 422 million acres in 1975-76. Of this area, only about 111 million acres (or 26.3 percent) was provided with irrigational facilities. At the rate of extension of irrigational facilities achieved in the last fifteen years, we shall not be able to bring even half the arable area under irrigation till 2007 A.D. Three-fourths of the total flow of our rivers is wastefully emptied into the seas. Out of our groundwater resources of an estimated potential of 86 million acres, barely half is being utilized. How much greater would be our agricultural output, with a reduction in prices on account of economies of scale, if irrigation plans were vigorously pursued. In the Fifth Plan only 0.83 percent of the total public sector outlay is earmarked for roads, and even out of this paltry percentage three-fourths is intended to cover those road projects which have spilled over from the Fourth Plan. Few countries of the world are so poor in market roads. Road construction is one of the best ways to generate employment and to stimulate agricultural output by opening up enormous new markets. As regards industry, those laws should be scrapped which obstruct progress and constrict growth without any countervailing public benefit. While direct taxation on individuals has been brought to a reasonable level, the burden of indirect taxes is ridiculously high on many commodities. Out of the price paid for a truck by a consumer as much as 57 percent represents the burden of various indirect taxes levied at different stages. The excise on airconditioners is at the unconscionable level of 100 percent ad valorem on the wholesale price. The excise on cement is as much as 50 percent of the retention price allowed to the manufacturer. The Finance Minister has a great nation-building task ahead of him. An honest and efficient Government should be able to contain inflation and stop anti-social activities like smuggling, without suspending the rule of law. Now that the rule of law has been restored, prompt measures will have to be taken to deal with inflation which is raging at 15 percent per annum. An index to the revival of smuggling is provided by the fact that whereas during the last twelve months there was no depreciated rate for the rupee against foreign currencies in the free market, within a week of the election results a black market sprang into existence. For instance, whereas at the beginning of March the Singapore dollar fetched Rs. 3.45 (the official rate) in the free market, now the Singapore dollar quotes at Rs. 4.50. The remittances from Singapore and Malaysia to India through the official banking channels have now dwindled to just a trickle. The country can never prosper or be saved through the efforts of only ministers and civil servants. The people must be associated at all stages with the formulation and implementation of policies. We can have a truly participating democracy for the first time in India. Under the last regime, the Government and the people virtually became two hostile armed camps. Now we can have an exciting joint venture between the Government and the people. There should be no obsession with either the public sector or the private sector. The concept would be that of only one sector- the national sector. Pragmatism is all. The first major economic measure of the Government will be the budget. Millions of man-hours, crammed with intelligence and knowledge,- of tax gatherers, tax payers and tax advisers-are utterly wasted every year in grappling with the unmanageable spate of amendments. A stable fiscal policy is to a nation what a stable family life is to an individual. The rates of direct taxes should be fixed in advance for three to five years, as they are in other countries like the U.S.A. and Canada. There is no need for the outdated and ridiculous shroud of secrecy which envelops every budget-except as regards changes in customs and excise rates. Many progressive nations have a free and open public debate on budgetary proposals before the Bill is introduced in the legislature. It would be a historic event if under the present Government the Union Budget ceases to be an annual scourge and partakes of the nature of the presentation of annual accounts of a partnership between the Government and the people. Every budget contains a cartload of figures in black and white- but the stark figures represent the myriad lights and shades of India's life, the contrasting tones of poverty and wealth, and of bread so dear, and flesh and blood so cheap, the deep tints of adventure and enterprise and man's ageless struggle for a brighter morn. The very enormity and variety of the challenges facing the country are such as to touch the least tender to tears and the most incredulous to prayer. Shall we maintain discipline-or shall we witness revival of the barbarous Bandhs when government ceased to govern, mobocracy displaced democracy, and c1t1es were paralyzed by groups of men who regarded themselves as above the law? Shall we increase production, create national wealth and settle industrial disputes in the forums provided by the law-or shall we abuse our regained freedom by nine morchas a day? The nation is mature enough, and the Prime Minister and his colleagues are experienced enough, to ensure the rule of law while providing liberty under law. Those who talked of chaos as the alternative to authoritarianism overestimated their own calibre and underestimated the intelligence of our people. The Government should have the fullest co-operation from all quarters in the epochal demonstration watched by the whole civilized world-that liberty is not an "optional extra" in a democracy, that human rights are not a luxury intended merely for the elite and the affluent, and that our people, poor and downtrodden, are as intensely committed to the free way of life as the richest under the sun. _Previous musing: [ECONOMIC REFORMS IN INDIA: WHERE ARE WE AND WHERE DO WE GO?](https://indianliberals.in/content/economic-reforms-in-india-where-are-we-and-where-do-we-go/)_ --- ## [Musing] The Three Meanings of Secularism URL: https://indianliberals.in/musings/the-three-meanings-of-secularism/ ### Body _The relationship of the State with religion has been a contentious issue. Can an individual's private practice of religion be curtailed by the State? Is secularism a challenge or an opportunity for religious traditions? A piece authored by M.P. Rege and republished in the March 1993 edition of the Freedom First Magazine sought to deconstruct the many meanings of secularism and their implications. _Given the Indian context the first component in the meaning of secularism which one would naturally single out is the idea that the state as a social institution has to be secular. This means that there is a shared area of social affairs in which all Indians, irrespective of the religious communities to which they belong, have an equal status and equal rights. Further, the goals and norms which direct and govern these affairs are not derived and do not draw their sanction from any particular religious tradition. In this sense they are secular or 'rational'. They include such values as law and order, equality before law, economic welfare, egalitarian justice, promotion of intrinsically worthwhile activities like scientific research, pursuit of knowledge and the arts. These values have complicated relationships, both genetic and logical with the values which were developed and propagated by various religious traditions. But as a matter of fact, in modern times they have come to be regarded as autonomous, in the sense that they do not need any religious sanction and that they can be perceived to be an essential part of a good human life, in its social as well as personal aspect. **Historically Multi-religious** In the Indian context, the idea of a secular state partly draws its significance from the fact that historically Indian society has been a multi-religious society. It must be remembered that this character antedates the advent of Muslim and Christian communities in our country. And may remark in passing that it is the primary responsibility of the majority community to safeguard the secular character of the Indian state. Unless members of minority communities experience, in their day to day living, that they are treated on par with members of the majority communities in all situations which fall within the jurisdiction of the state, the idea of a secular state embracing all Indians will lack substance and reality. And it is the responsibility of all religious communities to reformulate their traditional values and norms and reform traditional practices so as to bring them in harmony with the values and principles which govern the secular jurisdiction of the state. For these latter represent the moral consensus of modern times. **Sarva Dharma Samabhava** Another, peculiarly Indian element, in the concept of secularism is the value of sarva-dharma-samabhava, i.e. the attitude of equal respect for all religions. This value has nothing to do with the functioning of the state. It is recommended as a social and also religious value. A society in which this attitude is widespread and deeply rooted will be a secular society in this sense of secularism. To describe as secular a multi-religious society in which members of one religious community do not merely tolerate the presence of other religious communities but respect their individuality and autonomy certainly looks paradoxical. But it will not have this appearance for those who realise that the basic character of Indian society is that it is a group or federation of many religious communities and that these diverse religious traditions are living forces which determine the moral and spiritual values of their adherents, the goals they pursue in life, their whole way of life. Only a widespread attitude of respect for the autonomy of other religious communities provides a viable basis for a secular state in which individuals drawn from diverse communities treat and respect each other as equals. **Secularism Based on Rational Morality** The third sense of secularism is that it is a world-view which claims to be based on rational, i.e. scientific knowledge of things and rational morality, i.e. utilitarian morality qualified by some principle of justice. This is the aggressive element in secularism because it denies any place to the transcendent whether in the scheme of things or as a component in the human personality. Secularism even in this aggressive form has a positive role to play because it throws a challenge to traditional religions to put their houses in order, to purify, refine and develop their values so as to enable them to face the problems of contemporary life. But what place reason has in human knowledge and human life is a largely philosophical question which can have no agreed and definitive answer. As a world-view secularism is no more than one member of a family of world-views, relations between which need to be based on the principle of sarva-dharma-samabhava. --- ## [Musing] The Tiger Caged – Part II URL: https://indianliberals.in/musings/the-tiger-caged-concluding-installment-from-the-economists-survey-of-india/ ### Body To stem the flood of imports that this regime might otherwise allow, the system has been bolstered in several other ways. Imports can be brought in only by an "actual user"; in other words, intermediaries are banned. As part of the domestic capacity licensing scheme, firms can be obliged to sign up for a "phased manufacturing programme": they are allowed to expand their factories, but only if they promise to reduce the import content of the goods they produce. _In continuation with last week’s _[_musing_](https://spontaneousorder.in/so-musing-india-the-tiger-caged/)_, produced below is an extract from the second part of The Economist’s coverage of the political economy of India in wake of the 1991 economic crisis. The article was re-published in the October 1991 issue of Freedom First, a liberal magazine established by Minoo Masani._ In the last issue of Freedom First, we had published extensive extracts from the Economic Survey of India (May 4, 1991). The comprehensive survey written in easy to understand English needs to be read by as many Indians as possible – particularly those being misguided by vested interests into opposing Dr Manmohan Singh’s reforms. The vested interests oppose the freeing of the economy for they will no longer have the protection of the state to keep their sinecures and continue making a fast buck at the expense of the people of India. While the reformists need our full support, we are unable to appreciate their plea that no purpose will be served discussing the past four decades. We must know what went wrong and why – to avoid such mistakes. Hence we at _Freedom First_ decided we should share with you the rest of the ‘Survey of India’. The first post discussed the ‘cage’ in general. The second dissects the nature of the cage and what needs to be done to enable the Indian tiger spring the cage. **Plain tales of the licence raj** India has one of the most protected domestic economies in the world. The guiding principle has been to allow imports only when necessary. Bureaucrats make that judgment largely case-by-case. To stem the flood of imports that this regime might otherwise allow, the system has been bolstered in several other ways. Imports can be brought in only by an “actual user”; in other words, intermediaries are banned. As part of the domestic capacity licensing scheme, firms can be obliged to sign up for a “phased manufacturing programme”: they are allowed to expand their factories, but only if they promise to reduce the import content of the goods they produce. An entirely separate set of procedures is used to monitor imports slated for a reduction under these programmes. Then there are 16 “canalising agencies”, government bodies that are granted a monopoly of certain imports: oil, steel, rubber, newsprint and so on. Finally, to be on the safe side, there are tariffs – which are the highest in the world. To complete India’s isolation from the world economy, the government has discouraged inward flows of know-how and capital. Despite some recent liberalisation, there are limits on the fees that Indian producers can pay for the use or purchase of foreign technology; technology imports may be banned if the import content of the production process is deemed too high. The Foreign Exchange Regulation Act of 1973 keeps a tight control on inward investment. Most foreign companies have been obliged to reduce their equity holdings to a maximum of 40%. The others are more tightly regulated than equivalent Indian firms. _The full text could be accessed _[_here_](http://www.freedomfirst.in/issue/issue.aspx?issue=411)_._ [_IndianLiberals.in_](http://indianliberals.in/)_ is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context._ Read more: [SO Musings](https://spontaneousorder.in/category/so-musings/). --- ## [Musing] The Tiger Caged – Part II URL: https://indianliberals.in/musings/the-tiger-caged-part-ii/ ### Body To stem the flood of imports that this regime might otherwise allow, the system has been bolstered in several other ways. Imports can be brought in only by an "actual user"; in other words, intermediaries are banned. As part of the domestic capacity licensing scheme, firms can be obliged to sign up for a "phased manufacturing programme": they are allowed to expand their factories, but only if they promise to reduce the import content of the goods they produce. _In continuation with last week’s _[_musing_](https://spontaneousorder.in/so-musing-india-the-tiger-caged/)_, produced below is an extract from the second part of The Economist’s coverage of the political economy of India in wake of the 1991 economic crisis. The article was re-published in the October 1991 issue of Freedom First, a liberal magazine established by Minoo Masani._ In the last issue of Freedom First, we had published extensive extracts from the Economic Survey of India (May 4, 1991). The comprehensive survey written in easy to understand English needs to be read by as many Indians as possible – particularly those being misguided by vested interests into opposing Dr Manmohan Singh’s reforms. The vested interests oppose the freeing of the economy for they will no longer have the protection of the state to keep their sinecures and continue making a fast buck at the expense of the people of India. While the reformists need our full support, we are unable to appreciate their plea that no purpose will be served discussing the past four decades. We must know what went wrong and why – to avoid such mistakes. Hence we at _Freedom First_ decided we should share with you the rest of the ‘Survey of India’. The first post discussed the ‘cage’ in general. The second dissects the nature of the cage and what needs to be done to enable the Indian tiger spring the cage. **Plain tales of the licence raj** India has one of the most protected domestic economies in the world. The guiding principle has been to allow imports only when necessary. Bureaucrats make that judgment largely case-by-case. To stem the flood of imports that this regime might otherwise allow, the system has been bolstered in several other ways. Imports can be brought in only by an “actual user”; in other words, intermediaries are banned. As part of the domestic capacity licensing scheme, firms can be obliged to sign up for a “phased manufacturing programme”: they are allowed to expand their factories, but only if they promise to reduce the import content of the goods they produce. An entirely separate set of procedures is used to monitor imports slated for a reduction under these programmes. Then there are 16 “canalising agencies”, government bodies that are granted a monopoly of certain imports: oil, steel, rubber, newsprint and so on. Finally, to be on the safe side, there are tariffs – which are the highest in the world. To complete India’s isolation from the world economy, the government has discouraged inward flows of know-how and capital. Despite some recent liberalisation, there are limits on the fees that Indian producers can pay for the use or purchase of foreign technology; technology imports may be banned if the import content of the production process is deemed too high. The Foreign Exchange Regulation Act of 1973 keeps a tight control on inward investment. Most foreign companies have been obliged to reduce their equity holdings to a maximum of 40%. The others are more tightly regulated than equivalent Indian firms. _The full text could be accessed _[_here_](http://www.freedomfirst.in/issue/issue.aspx?issue=411)_._ [_IndianLiberals.in_](http://indianliberals.in/)_ is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context._ Read more: [SO Musings](https://spontaneousorder.in/category/so-musings/). --- ## [Musing] THE UNION BUDGET 1992-93 by Nani Palkhivala URL: https://indianliberals.in/musings/the-union-budget-1992-93/ ### Body _Following is an excerpt from a March 1992 booklet, titled [The Union Budget 1992-93.](https://indianliberals.in/forum-of-free-enterprise/the-union-budget-1992-93-by-na-palkhivala-march-3-1992.pdf) Authored by Indian jurist and liberal economist Nani A Palkhivala, the booklet was originally published Forum of Free Enterprise. In the booklet, Palkhivala critically examines India's first Union Budget post the 1991 liberalisation.  _This year's Budget is not a budget for the greedy, paid for by the needy. The Budget provisions properly so called (as distinct from the proposed amendments to the direct tax laws) are well conceived, and deserve the support of the well informed irrespective of party affiliations. **Four main thrusts of the Budget** The four main thrusts of the Budget are - liberalization, integration of India into the global economy, reduction of taxes, and a stable and healthy balance of payments.  - Liberalization is the key to the Budget. (The only criticism can be that it measures liberalization with coffee spoons.) It is a Watershed Budget which marks the beginning of a new chapter in India’s economic history. We have left behind the terminal stage of our forty-year affair with shabby State socialism. It was our ideological socialism which had been responsible for India remaining the twentieth poorest nation on earth. Our gross domestic product is smaller than that of greater Los Angeles (population 14 million). We have more than 15 per cent of the world’s population, and less than 1.5 per cent of the world’s income. Our per capita income did not even double since we became a republic — it only increased 92 per cent in real terms. This year’s historic Budget for the first time reflects the consciousness of our government that fast economic growth would be impossible with woolly, outworn socialism which betrays a severe hardening of intellectual arteries and a pathetic lack of knowledge of the revolutionary changes which have recently swept across the world. During the last 25 years, China’s economic growth, despite its communism, has been more than twice as fast as India’s. The annual investment in China by foreign companies exceeds the total  investment in India in the last 44 years. The new foreign investment in China totalled $10 billion last year! There are already more than 2500 foreign enterprises operating in the .27 hi-tech industrial parks recently started in China.  I have the highest opinion of Indian capacity and potential. But I find it impossible to refute the universal criticism that our two besetting sins are self-complacency and obstinate refusal to face the truth. We could have more realistically chosen the ostrich instead of the peacock as our national bird. The Survey on India, published by _The Economist _of 4th May 1991, showed the tiger “caged”. It should be made compulsory reading in every school and college, as well as for those adults who choose to enter Parliament or the civil service. The jugular vein of the article is that if India has more than its fair share of the world’s misery, it is not the fault (If former colonial masters or wicked western capitalists or the cruel hand of fate: it is largely India’s own doing.  We are slipping behind the rest of the world — except in population growth. This truth can hardly be better illustrated than by the fact that the present per capita income in South Korea is 13 times, and in Hong Kong 30 times, that of India, though the three countries started at about the same level.  The United Nations Development Report, published last June, ranks the nations of the world by reference to the Human Development Index (HOI). In determining a nation's position in the list, the HOI takes into account the expenditure incurred by the state on human priority sectors- health, water, sanitation, daily calorific intake, literacy, and education at primary and secondary levels. Having regard to the HOI, India is placed, for the second year running, pretty much at the bottom of the list- 123rd out of 160 countries. Dr. Manmohan Singh has rightly emphasized that unless certain values are adhered to by the nation, it  cannot come out of the recession. The Finance Minister has no Midas touch; he has no snake oil which can be used as having a  magical healing power in matters economic. - The proposed integration of India into the global economy has not come a day too soon. The emerging world economy has erased national boundaries. Capital and companies no longer stop at the border. If  India is to grow and prosper, it has no alternative but to be integrated into the world economy. - Reduction of taxes is one of the avowed aims of the Budget. In a  global economy, cutting taxes has become a  matter of national interest: high tax countries inevitably lose out. The days when the government could adopt any tax policy, as if the nation existed within a vacuum, are over. - If India is to have a stable and healthy balance of payments, it can only be through increased exports. Our share has dropped from 2.2 per cent of world exports in 1950 to 0.44 per cent. Among the exporting countries, India ranked sixteenth in 1950: today its rank has dropped to fortythird! Even Holland, one of the tiny countries of the world with a population of 15 million, has six times the exports of India! Hong Kong has almost three times the international trade of India, although its population is less than one per cent of India's - 0.7 per cent to be precise, while its land area is 0.03 per cent of India's. **Unjustified criticism** The least justified criticism of the Budget is that it has been framed under the dictates of the World Bank and the International Monetary Fund. The censure is levelled by those whose critical perception does not exceed forty watts. They should credit India with enough intelligence to make the right decision for itself after forty years of mistaken policy. Some of the ablest men in the two international institutions are Indians: to say that the Indian Government cannot think for itself is gratuitous self-condemnation. In any event we must judge the policy underlying the Budget on its merits, and it is wholly irrelevant to be concerned about who suggested the path of wisdom. One of the great failings of democracy is the mistaken belief that it is the duty of the opposition to oppose. Secondly, the fear has been expressed in some quarters that India will be swamped by multinationals. The truth is that India runs no risk whatever of being dominated by foreign corporations. We must get rid of the illusion that we are still fighting the East India Company.  Thirdly, the view has been expressed that the Budget has not done enough to check inflation or to counter recession. To control inflation is possible, but to eliminate it is beyond hope at this juncture. The last time we had "negative inflation" (to use bad English) was when Mr. Morarji Desai was the Prime Minister (1977-79). The spirit of the nation -  the spirit of national dedication and confidence which then emerged after the tyranny of the Emergency -  had as much to do with the fall in prices as any budget.  Inflation is a worldwide phenomenon. A  dollar today is worth only 13 cents in 1945 money; a pound is worth six pence. Even the Deutschemark is only one-third of its value in 1948 when it replaced the worthless Reichsmark.  Again, the world economy is going through a period of recession. The current economic depression in the United States is billed as "the mother of all recessions" -the longest since 1945. General Motors, the giant among corporations, incurred a loss of $4.5 billion in 1991 -unparalleled in the Company's 84-year history. The critics claim that in Britain the recession is deeper than in any other country. About 20,000 companies went into liquidation in 1991, which works out to one in every 50 British companies. _Read the complete text: [The Union Budget 1992-93](https://indianliberals.in/content/the-union-budget-1992-93-by-n-a-palkhivala-march-3-1992/)__Read previous musing: [THE EMERGING SCENARIO IN EDUCATION](https://indianliberals.in/content/the-emerging-scenario-in-education-2/)_ --- ## [Musing] The Universality of Human Values - M.R. Masani URL: https://indianliberals.in/musings/the-universality-of-human-values-m-r-masani/ ### Body _Published below is an article written by Minoo Masani which appeared in the December 2002 edition of the Freedom First Magazine. This piece was written during the years of the cold war wherein Mr. Masani makes a coherent, impassioned and prudent plea to safeguard universal human values. (Image Credit : The Print)_In the Presidential Address delivered a few days back at the Annual Meeting of the British Association by Professor A. V. Hill, he took a step further the familiar proposition that Science has put in Man's hand more power than he has the wisdom to use. Dealing in particular with the problem of food and population, which is most acute in countries like India, Professor Hill asked whether Human Rights extended to unlimited reproduction with a consequent obligation falling on those more prudent. This is a question to which I, for one, would hesitate to venture an answer more specific than that given by Mahatma Gandhi in a wider context, namely, that each right carries with it a corresponding obligation. Certainly, all in India who ponder that the country's massive problems realize that the most serious attention needs to be devoted to the rectification through an all-sided approach, of the prevailing unbalance between production and population. An International Conference on Planned Population, which is due to meet in Bombay later this year and in which Dr. Margaret Sanger and other pioneers in the field will participate, is only one of the many signs that we in India are not altogether unaware of the pressing problem by drawing pointed attention to which Professor Hill performed a public service. As Professor Hill himself went on to state, the problem he raised is not confined to India nor to food. The wider question of what is the purpose of human life on earth is involved. The scientist is only the expert witness; the entire community is the judge; and to help in expressing that moral judgement is, according to Professor Hill, the "compelling duty of a good citizen". One thing is clear, as indeed the Universal Declaration of Human Rights adopted by the United Nations recognizes, and this is that Human Rights must be universally recognized and applied. lf any attempt were to be made to restrict them to any narrower circle, they would cease to be human and indeed in some measure become exploitative. Obviously as this may sound, there is reason to believe that the universality of Human Values needs to be constantly re-asserted. In the _New Fabian Essays_, alongside much that is reasonable and humane, Mr. R. H. S. Crossman propounds a thesis that calls for analysis. Having made it clear that he regards totalitarian Communism as a reactionary force which the peoples of the Atlantic community must resist, Mr. Crossman proceeds to the assumption that, to quote his own words, "the coolie in Malaya, or for that matter the tribesman in Nigeria does not want _either_ liberty, equality and fraternity or the dictatorship of the proletariat. He is below the level of such political aspirations," says Mr. Crossman. He then asks his readers to join him in accepting "both intellectually and emotionally the fact that Communism outside Europe is still a liberative force”. We are then brought to a remarkable conclusion: "The American isolationist," writes Mr. Crossman, "who reacts so violently against the gigantic bill of rearmament and foreign aid, is nearer the tradition of Americanism than the New Deal prophets of America's world-wide responsibilities." Americans should, therefore, be encouraged, says Mr. Crossman, "to take the risk in Asia and Africa of leaving unfilled the 'political vacuum’ left by the dismantling of the old European empires ...We are opposed" writes Mr. Crossman, "to Russian expansion but also to American victory." Whatever the motivation of this line of thought may be, its implications are unfortunately hard to mistake. First, that Human Values are different for the peoples of Western Europe and North America on the one hand and for the peoples of the underdeveloped countries of Asia and Africa on the other. Secondly, that the claims of bread and freedom are antithetical and should in the case of the underdeveloped countries be resolved in favour of bread. Thirdly, that the West should write off these countries and these peoples and do nothing to protect them from being taken over by Communist expansion and aggression. Here then, from a leading spokesman of "left" wing Socialism in the West comes a strange echo of Rudyard Kipling” “East is East and West is West”; East of Suez, “there ain’t no Ten Commandments”; and what is reaction and tyranny for the European and American is liberation and progress for the “lesser bread without the law”.  Is there perchance any truth in this assertion that the masses of illiterate and underprivileged people in Asia and Africa are just empty stomachs and hungry food? The facts testify precisely to the contrary. While it may be true that some left wing intellectuals in India, as elsewhere, are obsessed with the desirability of the Soviet Model Five-Year Plans and of what Lewis Mumford has called "gigantism", the common people in India are much more attached to such things as their traditional way of life, their religions and their places of worship, their families and their homes, their cattle and their farms. While the Communist Party of India has attracted a section of the English speaking intelligentsia and is today more entrenched among its ranks that it is among classes less privileged, the Indian masses on the other hand have, by their unique response over three decades to Mahatma Gandhi shown that the man who evokes a response in their hearts is the one who talks to them of non-material values like God, Love, Truth, Human Brotherhood and the Equality of the untouchable Harijan and the proud Brahmin. Gandhi represents the complete antithesis to the Communist and has been recognized as such in the Moscow press and radio over three decades. The Communist swears by dialectical materialism - matter is the essence, the mind a by-product; Gandhi preaches the supremacy of spirit, of mind over matter. To the Communist, the end justifies the means; to Gandhi the means are everything - means and ends are like the seed and the tree; and so Gandhi pronounced Soviet Communism to be "repugnant to India". Stalin preaches the need to hate the class and national enemy; Gandhi the need to love all. Communism seeks to centralize and collectivize everything; Gandhi preaches the need to decentralize and distribute power both politically and economically. The Communist glorifies the State; Gandhi, conscious of the distinction drawn by Reinhold Niebuhr between Moral Man and Immoral Society, stresses the individual as an end in himself. Identifying himself with the lowliest in the scale of Caste - the Harijan or untouchables Gandhi recalls the words of Him who said: 'As long as you did it to one of _these my least brethren_, you did it to me." Those who today work for the lowliest of our people cannot escape the spirit of Gandhi. Only last month Jayaprakash Narayan wrote: "For many years I have worshipped at the shrine of the goddess Dialectical Materialism, which seemed to me intellectually more satisfying than any other philosophy. But while the main quest of philosophy remains unsatisfied, it has become patent to me that materialism of any sort robs man of the means to be truly human ... lt is clearer today than ever that social reconstruction is impossible without human reconstruction ... Only when materialism is transcended does an individual man come into his own and become an end in himself," concludes Jayaprakash. It is obvious then that for India the only genuine, the only Indian social revolution is the one that Gandhi commenced. I have felt it essential to stress the universality of human values so rudely questioned by Mr. Crossman because it is only too likely that his assumptions are not confined to the Bevanites in Britain and that they might indeed be shared by many men and women of goodwill in the United States. Let us put bread into the hungry mouths of the Asian masses, let us fill their empty stomachs, and we shall save Asia from Communism. Now, this line of thought is, in my view, fundamentally fallacious. Man does not live by bread alone - not even the brown or yellow or black man. Empty minds and souls provide as good a breeding ground for Communism as empty stomachs. Czechoslovakia did not go under the Iron Curtain because its people were groaning in starvation in the months that preceded the _coup d'etat _of February 1948. The model housing of Socialist Vienna provided no deterrent to Dolfuss and then to Hitler. How mistaken have been proved those prophets who foretold that once Iran lost the revenues that came to her from oil and felt the pinch, she would be brought to her senses. It would seem then that the lesson that Peter Drucker taught in his book _The End of Economic Man_ is all too easily forgotten. What decides whether a people will adhere to Democracy or succumb to Communism is primarily whether or not they believe in another ideology superior to Communism, whether or not they have the will to resist and whether or not they possess the leadership that will guide them to do so. Asia is today asserting not only its right to economic prosperity and progress but even more to equality of status in the world family, to self-respect and dignity, to racial equality and the end of discrimination. Surveys of opinion among industrial workers made in America in recent years have shown that in listing the priorities among incentives the American worker is inclined to place wages somewhere near the bottom of the list. It is the non-material incentives that take priority. This is true of our workers in India. If I have stressed non-material values and incentives as against material ones, it is not that I am insensible to the value that material things and their possession have in providing a fuller life and greater dignity to the human being. Nor is this to be construed as a plea that the United States should go slow on economic aid to the under-developed countries. On the contrary, I have been one of those in India who were for the acceptance of United States economic aid even before it became generally acceptable. Nor am I suggesting that America should stop rearming for the collective security of the free world against totalitarian aggression. On the contrary, I know that, to the extent that America rearms and reasserts the strength of the free world, she defends us who are militarily weaker, whether we know it or not. I do, however, urge the need to follow up economic and military cooperation on the ideological plane. Mr. Arthur Goodfriend in his significant book _The Only War We Seek,_ makes a similar plea. Writes Mr. Goodfriend: "They (the Chinese Communists) reached the people by means of education and political indoctrination. We tried too often to win them with charity ... We can, as we did in China, keep mum about the shameful record of Russian Communism. Or we can attack the soft underbelly of Communism by reciting its record on the values most precious to Asians and others - religion, the family, national independence and the ownership of the land ... Unless we are prepared to face the problem, the United States and the free world may be betrayed into a grievous error. The governments of underdeveloped peoples may rally to our side - but behind this facade the people may remain aloof and even antagonistic". Thus Mr. Goodfriend. There is no country in the world today so well placed to lead the social revolution in Asia as the United States of America, Professor M. A. Lineberger on the basis of his own personal experience in the Far East, presents us with a paradox. “The Americans believe in spiritual things," writes Professor Lineberger, "but they try to buy them by material means - by dollars, by gifts, by aid. The Communists believe in material things, but they offer people something to join, something to do, something to fight. We Americans offer property; the Communists offer a reason to be alive ... People who join the Communist side feel that they are needed, that the Communists want them. You could not join the American side, if you were an Asian. There isn't anything to join." How very true. Neither militarily, nor ideologically, nor morally, can one part of humanity afford to write off any other. If it was true in the time of Abraham Lincoln that no nation could be half slave and half free, it is equally true today in this shrinking world that we cannot have a world that is half slave and half free. More than ever it is true today that as the English poet, John Donne, wrote: "No man is an Island, entire of itself; every man is a piece of the Continent, a part of the maine, if a Clod bee washed away by the Sea, Europe is the lesse, as well as if a Promontorie were, as well as if a Mannor of thy friends or of thine owne were; any man's death diminishes me, because I am involved in Mankinde; And therefore never send to know for whom the Bell tolls; it tolls for thee." (The piece was originally published[here.](http://www.freedomfirst.in/uploads/issues/pdf/455.pdf) ) --- ## [Musing] The US-India Alignment in Cold War URL: https://indianliberals.in/musings/the-us-india-alignment-in-cold-war/ ### Body _The Indian defeat in the 1962 border war with China not only resulted in loss of territory, but also raised questions about the foreign policy conduct of India’s first Prime Minister Jawaharlal Nehru. _ _Nehru’s formulation of Non-Alignment, which was couched in the language of third block neutrality, was interpreted as hedging by revisionist scholars, and came under intense criticism. _ _Indian liberals, a minor but vocal force of public opinion, were highly sceptical of Nehru’s neutral posturing and instead, advocated closer alignment with the US-led block. For Indian liberals, such posturing made sense given their own deep aversion to both the Chinese and Russian communism, the shared democratic credentials of India and US and with the benefit of hindsight, the possibility of allying with the winning side in the Cold War. _ _The muted Soviet response, hapless Non-Aligned Movement (NAM) posturing, and the Anglo-American promise and delivery of military support in the crucial moments of 1962, seemed to vindicate Indian liberals, even if temporarily._ _Produced below is the editorial from the 15__th__ December 1962, issue of the _Indian Libertarian_ magazine, which warns of the dangers of Chinese expansionism, suggests Indian leveraging of China’s Tibet problem, and argues for closer US-India alignment based on clear headed political realism._ 1962 will go down in history as a memorable year which, for the first time, witnessed the invasion of India by foreign hordes through the Himalayan passes. The impregnability and inviolability of India’s Himalayan borders have now proved to be a myth. Beyond the Himalayas, stretches today not the sacred land of the Lamas, but the Tibetan colony of the Chinese Red bandits who drove The Dalai Lama and his patriotic followers out of their motherland in 1960 and are now busy rooting out the time-hallowed Tibetan culture and civilisation and implanting there in its stead their miserable and despicable communist faith and their crude values of terror, deceit and fraud. No longer does India enjoy the centuries old peaceful and happy neighbourly relations with Tibet. The Red enemy from China is now not only at India’s Northern gates but he has also forcibly broken them open and occupied a strategically important position within India’s own precincts. Having accomplished this feat in one grand stride, he is now using all his communist wiles to lull India into a false sense of security so that he might be enabled to consolidate his position there. This, in short, is what the ‘Cease-Fire’ proposals of China amount to. China will never willingly relinquish unless forced to do so, her control of all the passes in the Himalayas right up from the Karakoram Pass near-about Ladakh in the North West, to Tawang and Walong in the NEFA region in the North East and the adjoining areas. She still reserves to herself by her cease-fire proposals, the right of a conqueror to re-occupy the proposed No Man’s Land (which, in fact, belongs to India) in case Nehru’s Government proves too intractable, pugnacious and defiant. She also wants some respite from her adventurist military operation in this region just to consolidate her ill-gotten gains and further tighten her grip of the Himalayan passes so as to be able to dominate and mould as suits her liking, India’s internal life, political, social and economic, by ever pointing out a loaded gun at her from these northern heights. To isolate India from her neighbours, China is cleverly wooing Pakistan, which is reeking, from its very birth, with intense communal and religious hatred for India. Communist intransigence of China and communal fanaticism of Pakistan may well come together as they have done. For they have one thing in common. Both detest the secular democratic spirit of India. But Pakistan will do well to remember that the day is not far off when she will have to pay dearly for such ill-conceived romantic adventure with China as India has done at a heavy cost. In this situation, India finds herself between the devil of China on the one hand and the deep sea of Pakistan on the other. Her leadership is at bay. It finds it hard to wriggle itself out of the ties and attachments for communist countries, fostered and strengthened over a number of years by its very ‘Non-Alignment’ policies. The leaders including Mr Nehru are now sincerely wanting to hurl back the Chinese invaders from our soil and for that purpose, have entered into military agreements with USA and Britain. But some mysterious forces seem to hold them back from going ahead with the full implementation of these agreements. The probable reason is that the ardent desire so long entertained by our leaders to carve out a distinctive kingdom of socialist pattern in India has drawn them irresistibly closer to the Communist bloc than to the Democratic bloc, despite India’s neutrality. It seems that they are not yet able to outlive this past even when the logic of Sino-Indian war has made them realise the stern reality of a world-wide titanic struggle proceeding between the forces of Red slavery and those of democratic freedom. They are now casting, however, a wishful look towards the Western nations for military aid and financial help in this hour of peril. The tragedy of the situation is that in the absence of a clear assurance forthcoming from India that she, as a genuinely non-aligned but democratic country, would always stand against totalitarianism and colonialism, wherever found, either in the old colonies of Western nations or the new colonies held by Russia and China, USA and UK willy-nilly have to carry on with a dubious ally like Pakistan in this region of South Asia. If only India should prove her bona-fides in regard to her faith in democratic freedom, all her difficulties with China and Pakistan would vanish into thin air. India would then be in a position not only to fight successfully the Chinese invaders but also to effectively counter and neutralise Pakistan’s capacity for mischief and trouble. But all this would be impossible without a furious rethinking on the part of our leaders of India’s foreign policy. Mr Nehru would then be not justified in making a fine metaphysical distinction after the manner of a Vedantin, between the ‘Maya’ (illusion) of Chinese chauvinism and the ‘Parabrahma’ (the Supreme Reality) of Communist Vedantism, as he did the other day. He would then have to rally the whole nation behind him not only to throw out the Chinese from the Indian soil, but also to fulfil the positive and inspiring ideal of preserving India’s Free Way of Living now menaced by the twentieth century Red Napoleonism of China. He would have also to dispel from the minds of the Western nations, the fears and suspicions that India’s Non-Alignment is not a mere way of escape from shouldering the onerous responsibility devolving on her as a Democracy, to fight relentlessly for saving Freedom and Democracy from world communism. In that event, India would have to play the special role of the Defender of Freedom of all South-East Asia- a role assigned to India by the prophet of Indian nationalism, Shri Aurobindo Ghosh as far back as 1950, with rare prophetic vision and political insight. Thus if our leadership should free itself from the political and ideological cobwebs that have polluted its mind and follow the straight – and may be even narrow- path to a fuller and richer democratic life, Western countries, which have proved themselves to be India’s real friends in the hour of her need, will do everything in their power to replenish her military strength and augment her economic resources and help her solve the knotty Kashmir problem. Thus, on a proper analysis of the relation of forces in the East and the West, it will be found that India finds herself in the present delicate situation as a result of her past misguided policies and ideological aberrations. It is, therefore, high time that India made a clear and unambiguous confession of her unflinching faith in Freedom and Democracy, which went into the very framing of the Indian constitution. The spiritual crisis she is passing through is no less great than her military crisis. In fact, the former has aggravated the latter. Let India make a wise and deliberate choice here and now and “Seek First the Kingdom of Freedom”. And it is certain as anything that within a short time ‘All Other Things Will be Added unto Her’ from within and from without and she will come triumphantly out of her present trials and travails. _The original text can be accessed _[_here_](http://indianliberals.in/~_admin/pdflanguage?id=300361867.pdf)_._ --- ## [Musing] The Wisdom of the Rulers URL: https://indianliberals.in/musings/the-wisdom-of-the-rulers/ ### Body _The qualifications, characteristics as well as the ideal values of rulers has been debated by various philosophers for ages. These philosophical debates have informed modern day democratic setups and they continue to catch the eye of those who seek to engage in the relationship between the ruler and the citizen. The following piece, published in the December 1961 edition of the Indian Libertarian magazine elucidates on the characteristics of rulers vis-a-vis ideas from ancient Indian thinkers. _Now that the principal parties in all the land have published their manifestos and there is but a short period for the voters to digest their programmes and assess their merits before the general elections in February 1962, it is worthwhile reminding ourselves of what qualifications and wisdom we wish the rulers to possess to deserve our choice and approval.  It is usual in a democracy with adult franchise to consider the qualifications of the voter and to feel that at least literacy should be universalised as soon as possible. But though literacy in the sense of the bare capacity to read and write in the native tongue is necessary, it is not enough by itself.  This will take decades more to compass at the slow rate at which primary schools are being increased under Congress rule. Meanwhile, the more important question is the qualification of the candidates for election i.e., for the right and power to rule.  **Yatha raja, tatha praja: **as is the king, so will be the people. It is not mere time that makes the yuga or time spirit but it is the king that determines the entire “progress-and-happiness conditioning” climate of society and state at any time. These sayings in Sanskrit literature bring out the critical importance of the character and ability of the rulers and governing class generally in any society and state.  Every considerable civilisation has developed its own nations of the model to be followed by the rulers- Greece, Rome, Medieval Christian Europe, the modern Eur-American civilisation of the present day as well as Indian and Chinese cultures. In Indian tradition, accepted treaties on raja dharma like the code of Manu in part, Arthasastra, Sukra Niti and a host of lesser ones lay down the type to which rulers were expected to conform.  The qualifications are twofold: one group refers to knowledge and wisdom. The raja or ruler together with his counselors should be trained in the highest sciences and arts then extant. First of all, they should have a knowledge of philosophy i.e., a knowledge of the vedas by which they meant a vision of the universe as governed by spiritual forces. They should have a view of nature as the field of natural enemies ultimately dominated by spirit.  But by the time of the **Arthashastra of Chanakya, **it was realised that it is possible for the ethical aspects of government to be pursued satisfactorily by kings and rulers and administrators even without faith in a spiritual reality pervading the universe. Chanakya himself was a **lokyata **or materialist in philosophy. But what was insisted upon was a clear and passion-free attitude to moral values i.e., **dharma**. The aim of the state was the maintenance of dharma or social morality through law and custom and **danda, **police and magistracy and defense against foreign aggressors.  Even in the Upanishads we have a glimpse of such a view. Narada in the Brihadaranyaka Upanishad asks Sanatkumara for instruction in the highest knowledge. We profess to have a mastery of many sciences and arts but lack knowledge of the final unity of reality and value.  This synoptic vision is emphasised in Manu as essential to the education of the ruler. The vision of order and unity in the cosmos is held to be essential to help the ruler to stir his imagination and conscience to motivate his duty to maintain order and unity in the human society entrusted to his care. Dharma refers to the translation of such cosmic order in the social sphere.  In addition to such a synoptic view of the universe and of society, the ruler should have a high **character. **The first requisite should have mastered the passions of greed, miserliness, selfishness, indulgence in sense pleasures to the neglect of duty, such as women and wine and vice. Positively, he should have a high sense of duty to society and state and devote his entire energies to the tasks of administration without fear or favour. He should be above class. The welfare of the people in every sphere of life should be his sole care. Justice should be his ruling emotion. In addition to knowledge and justice, he should have respect to the ethos of the society-respect to men of wisdom, of experience, followers of the sciences and the arts. He should consult the elders in these lines everyday. He should develop ingrained habits of tapas by constant practise, that is, meditation for short spells everyday so that the great values can sink into the subconscious mind. The attitudes and conduct expected of the ruler and his subordinates in high administration, civil and military, were held in solution as they were in a keen and living public opinion of the society of the governing class. It was known to the people at large that the governing class were held responsible by public opinion and popular expectation.  To what extent such codes were actually effective in practice is another question that needs a historical investigation for answer. Turning to the western world, we find in Plato’s delineation of the philosopher kings a close approximation to the Indian ideas mentioned here. “Until philosophers are kings or until the kings and potentates of the world imbibe the spirit of philosophy, the world will not cease from ill.” This is the famous sutra or key sentiment of the treatise of Plato called The Republic. It would be interesting to compare and contrast the Indian and Platonic ideas of the ideal rulers but that would require more room than can be taken in this article. But the main approaches can be indicated briefly which would be if current interest in choosing our democratic rulers in the general elections.  Plato also puts synoptic knowledge of philosophy and science in the forefront of the qualifications of the ruler. In order to bring about a harmony of values and to adjust the claims of classes in society both feel that the ruler should have a vision of harmony in the cosmos and in society. The guardians should have transcendent devotion to social good. To fortify them in this spirit of service, Plato is not content with the public opinion as a cheque and stimulus. He proposes the abolition of private family and private property for the rulers! They can have all necessaries and comforts but no individual property. But instinct is not altogether suppressed, for Plato provides for sex and children in seasonal hymenial festivals when guardians of different sexes can unite in temporary marriage. Children are brought up by nurses without knowledge of their own parents. All the children are regarded as children of all the guardians. Women are given full equality and guardians are chosen among them also through educational sifting like men.  Capacity to think on the highest level is thus secured in both Indian and Platonic systems. In addition to pure theory, Plato’s guardians are put through practical experience in different branches of administration and are given military service as well. Their character and integrity are tested through fires of temptation while holding positions of power in the administrative hierarchy. They should be able to resist both pleasure and pain and to maintain their loyalty and devotion to duty unsullied.  Turning to the modern world, we find that the communist system as developed in Moscow approximates in several important respects to these ancient ideals so far as form and devotion to the state are concerned. The governing elite consists of the members of the communist party which numbers a few millions among the huge population of more than 200 million. There is a rigid hierarchy among the members of the party, tier on tier, rising from the recruits at the bottom to the top power-holders in the executives of the party and government.  Recruits are trained in the ideology of Marxism-Leninism which is developed as a closed system of dogmas or truths held to be final. This view of history and materialism as used by Lenin in the guidance of the October Revolution takes the place of the philosophy and sciences in the older systems of India and Greece. One difference is that theory is held in the spirit of final truth unmodifiable by anyone except in the way of practice. Such practical adaptations are to be made only by the authorised top masters in the Kremlin. The rest in the hierarchy should accept them in toto in a spirit of loyal devotion. The spirit recalls Semitic theologies in its rigour and intolerance. Deviations however honest are not allowed and are punished with savage cruelty if persisted in. Just as the Bible built its authority on current notions of creation with their false geology and ethnology and crude legal system, today communism has built itself on the theories of Karl Marx. To doubt the theory is to shake the throne of the Kremlin rulers which they cannot of course tolerate.  It is like doubting the theological doctrines of the Incarnation of Christ, his resurrection from the cross on which he was implied and of the Trinity. Such doubt shakes the throne and authority of the Pope, the sole Vicar of Christ on earth, lord of men and rulers! Catholic theology and law prescribes death by fire for heresy. More than 30,000 heretics are said to have been burned by the authority of the Inquisition Court in the centuries of Catholic supremacy in Europe! The liquidations of the Nazis and Communists run into several millions for a similar offense against authorised belief. This is a return to the Dark Ages.  But the kernel of truth behind this insistence on dogma refers to the need and value of a philosophy or total vision of affairs, natural and human, for the purpose of governing nations.  Communists take over Marx’s view of history as a gradual development of classes through different stages of organisation of property ownership and economic production- the primitive horde, nomadic cattle owners, landlords, industrial craft guilds, and finally the capitalist class of machine production. A change in the mode of property and production introduces a change in the relationship of the classes. New classes of owners arise with new classes of workers who are exploited by them, slaves, serfs and wage labourers in today’s factories.  There is a dialectic in these changes, each system provoking its opposite and giving place to it in a synthesis. Today’s stage of wage labour and factory ownership has provoked and trained the property-less class of the proletariat. They will seize power in the next stage of socialism and communism by the immanent law of dialectic history. It is also a law of materialism. The idealism of Hegel is repudiated and his spiritual dialectic is stood on its head and turned upside down by Marx. The next stage is regarded as inevitable and that no effort of will on the part of any group of people can prevent the revolution from emerging. It can hasten it or delay it but ward it off it cannot, by any means. This is the historical and economic determinism of Karl Marx.  This belief gives communist rulers an inexpugnable assurance of final victory, since history and the entire process of the cosmos is supposed to be on their side. This theory gives communists their orientation on the present social world and defines to them their mission of world revolution. They hold to this theory with marvelous tenacity since it is bound up with their fortunes as individuals and as a group holding supreme power. It gives them the feeling of being engaged in an exalted purpose tending to save humanity in the future from the dark ages of exploitation forever. They envisaged an earthly paradise through their ideology and rule.  Communist ideologies reproduce the fanaticism and fervour and deathless devotion and social cohesion of semitic faiths in their prime. It has the force of a living religion. Knowledge and character, faith and devotion of a particular kind are therefore inculcated by the communists system in their elite. The knowledge of Marxism-Leninism gives them a blueprint for revolution and world conquest. To set against the formidable rival entrenched in the Kremlin spreading its powerful tentacles throughout the world through its subordinate conspiratorial communist parties, the free world needs a philosophy and character of comparable power and scope.  What are the motive forces of such a saving system available to the free world?  The rival includes the whole of humanity in its province. The free world should do no less. We need therefore a strong and lively vision of humanity progressing in freedom and unity on the planet for our philosophy. Within its universal range, as a practical stage, we should harness the forces of nationalism and democracy for the substance of value-making faith. Our mission should be to prevent the calamity of mechanisation and robotisation of man under communism. Positively, we should develop the vision of a free world of nations cooperating as a world commonwealth pursuing the sciences, the arts and the philosophies in a spirit of free reason and universal sharing and goodwill. We should have the ideal of using science and technology to create abundance of the necessities and comforts of life for all members of the human family, not merely for a small class of governors.  The rulers should have sufficient knowledge of nature as can be pictured from time to time from a synthesis of scientific results. The open mind should be retained. “Order” which is common to all possible scientific views is sufficient without commitment to matter or spirit.  A new scale of moral values like humanism, nationalism and democracy such as the new Declaration of Human Rights should be expected of electoral candidates amongst us.  _The original piece appeared in the December 1961 edition of the Indian Libertarian Magazine which can be [accessed here.](https://indianliberals.in/the-indian-libertarian/the-indian-libertarian-dec1-1961.pdf) _ --- ## [Musing] The Universality Of Human Values URL: https://indianliberals.in/musings/the-universality-of-human-values/ ### Body _Published below is an article written by Minoo Masani in 1952, which appeared in the December 2002 edition of Freedom First Magazine. This piece was written during the years of the cold war wherein Mr Masani makes a coherent, impassioned and prudent plea to safeguard universal human values._ _You can read the unabridged version of the article _[_here_](http://www.freedomfirst.in/uploads/issues/pdf/455.pdf)_.__ _ In the Presidential Address delivered a few days back at the Annual Meeting of the British Association by Professor AV Hill, he took a step further with the familiar proposition that Science has put in Man's hands more power than he has the wisdom to use. Dealing in particular with the problem of food and population, which is most acute in countries like India, Professor Hill asked whether Human Rights extended to unlimited reproduction with a consequent obligation falling on those more prudent. This is a question to which I, for one, would hesitate to venture an answer more specific than that given by Mahatma Gandhi in a wider context, namely, that each right carries with it a corresponding obligation. Certainly, all in India who ponder that country's massive problems realize that the most serious attention needs to be devoted to rectification through an all-sided approach to the prevailing unbalance between production and population. An international Conference on Planned Population, which is due to meet in Bombay later this year and in which Dr Margaret Sanger and other pioneers in the field will participate, is only one of the many signs that we in India are not altogether unaware of the pressing problem by drawing pointed attention to which Professor Hill performed a public service. As Professor Hill himself went on to state, the problem he raised is not confined to India nor to food. The wider question of what is the purpose of human life on earth is involved. The scientist is only the expert witness; the entire community is the judge, and to help in expressing that moral judgement is, according to Professor Hill, the “compelling duty of a good citizen.” One thing is clear, as indeed the Universal Declaration of Human Rights adopted by the United Nations recognizes, and this is that Human Rights must be universally recognized and applied. If any attempt were to be made to restrict them to any narrower circle, they would cease to be human and, in some measure, become exploitative. Obviously, as this may sound, there is reason to believe that the universality of Human Values needs to be constantly re-asserted. In the New Fabian Essays, alongside much that is reasonable and humane, Mr RHS Crossman propounds a thesis that calls for analysis. Having made it clear that he regards totalitarian Communism as a reactionary force that the peoples of the Atlantic community must resist, Mr Crossman proceeds to the assumption that, to quote his own words, “_the coolie in Malaya, or for that matter the tribesman in Nigeria does not want either liberty, equality and fraternity or the dictatorship of the proletariat. He is below the level of such political aspirations_,” says Mr Crossman. He then asks his readers to join him in accepting “_both intellectually and emotionally the fact that Communism outside Europe is still a liberating force. We are then brought to a remarkable conclusion: “The American isolationist_,” writes Mr Crossman, “_who reacts so violently against the gigantic bill of rearmament and foreign aid, is nearer the tradition of Americanism than the New Deal prophets of America's worldwide responsibilities._” Americans should, therefore, be encouraged, says Mr Crossman, “_to take the risk in Asia and Africa of leaving unfilled the “political vacuum” left by the dismantling of the old European empires_... _We are opposed_,” writes Mr Crossman, “_to Russian expansion but also to American victory_.” Whatever the motivation of this line of thought may be, its implications are unfortunately hard to mistake. First, Human Values are different for the peoples of Western Europe and North America on the one hand and for the peoples of the underdeveloped countries of Asia and Africa on the other. Secondly, the claims of bread and freedom are antithetical and should in the case of underdeveloped countries be resolved in favour of bread. Thirdly, the West should write off these countries and their peoples and do nothing to protect them from being overtaken by Communist expansion and aggression. Here then from a leading spokesman of “left” wing Socialism in the West comes a strange echo of Rudyard Kipling’s “_East is East and West is West_”; “_East of Suez, there ain't no Ten Commandments_”; and “_what is reaction and tyranny for the European and American is liberation and progress for the “lesser breeds without the law”_. Is there perchance any truth in this assertion that the masses of illiterate and underprivileged people in Asia and Africa are just empty stomachs and hungry for food? The facts testify precisely to the contrary. While it may be true that some left-wing intellectuals in India, as elsewhere, are obsessed with the desirability of the Soviet Model Five-Year Plans and of what Lewis Mumford has called “giantism”, the common people in India are much more attached to such things as their traditional way of life, their religions and their places of worship, their families and their homes, their cattle and their farms. While the Communist Party of India has attracted a section of the English-speaking intelligentsia and is today more entrenched among its ranks that it is among classes less privileged, the Indian masses on the other hand have, by their unique response over three decades to Mahatma Gandhi shown that the man who evokes a response in their hearts is the one who talks to them of non-material values like God, Love, Truth, Human Brotherhood and the Equality of the untouchable _Harijan_ and the proud Brahmin. Gandhi represents the complete antithesis of the Communist and has been recognized as such in the Moscow press and radio for over three decades. The Communist swears by dialectical materialism - matter is the essence, the mind a by-product; Gandhi preaches the supremacy of spirit, of mind over matter. To the Communists, the end justifies the means; to Gandhi, the means are everything - means and ends are like the seed and the tree, and so Gandhi pronounced Soviet Communism to be “repugnant to India”. Stalin preaches the need to hate the class and national enemy; Gandhi the need to love all. Communism seeks to centralize and collectivize everything; Gandhi preaches the need to decentralize and distribute political and economic power. The Communist glorifies the State; Gandhi, conscious of the distinction drawn by Reinhold Niebuhr between Moral Man and immoral Society, stresses the individual as an end in himself. ldentifying himself with the lowliest on the scale of Caste - the _Harijan_ or untouchable Gandhi recalls the words of Him who said, “_As long as you did it to one of these my least brethren, you did it to me._” Those who today work for the lowliest of our people cannot escape the spirit of Gandhi. Only last month Jayaprakash Narayan wrote, “_For many years I have worshipped at the shrine of the goddess Dialectical Materialism, which seemed to me intellectually more satisfying than any other philosophy. But while the main quest of philosophy remains unsatisfied, it has become patent to me that materialism of any sort robs man of the means to be truly human...lt is clearer today than ever that social reconstruction is impossible without human reconstruction...Only when materialism is transcended does individual man come into his own and become an end in himself,_” concludes Jayaprakash. It is obvious then that for India the only genuine, the only Indian social revolution is the one that Gandhi commenced. I have felt it essential to stress the universality of human values so rudely questioned by Mr Crossman because it is only too likely that his assumptions are not confined to the Bevanites in Britain and that many men and women of goodwill might indeed share them in the United States. Let us put bread into the hungry mouths of the Asian masses, let us fill their empty stomachs, and we shall save Asia from Communism. Now, this line of thought is, in my view, fundamentally fallacious. Man does not live by bread alone - not even the brown, yellow, or black man. Empty minds and souls provide as good a breeding ground for Communism as empty stomachs. Czechoslovakia did not go under the “lron Curtain” because its people were starving in the months preceding the coup d'etat of February 1948. The model housing of Socialist Vienna provided no deterrent to Dolfuss and then to Hitler. How mistaken have been proved those prophets who foretold that once Iran lost the revenues that came to her from oil and felt the pinch, she would be brought to her senses. It would seem then that the lesson that Peter Drucker taught in his book “The End of Economic Man” is all too easily forgotten. What decides whether a people will adhere to Democracy or succumb to Communism is primarily whether or not they believe in another ideology superior to Communism, whether or not they have the will to resist and whether or not they possess the leadership that will guide them to do so. Asia is today asserting not only its right to economic prosperity and progress but even more to equality of status in the world family, to self-respect and dignity, to racial equality and the end of discrimination. Surveys of opinion among industrial workers made in America in recent years have shown that in listing the priorities among incentives, the American worker is inclined to place wages somewhere near the bottom of the list. It is the non-material incentives that take priority. This is true of our workers in India.  If I have stressed non-material values and incentives as against material ones, it is not that I am insensible to the value that material things and their possession have in providing a fuller life and greater dignity to the human being. Nor is this to be construed as a plea that the United States should go slow on economic aid to underdeveloped countries. On the contrary, I have been one of those in India who were for the acceptance of United States economic aid even before it became generally acceptable. Nor am I suggesting that America should stop rearming for the collective security of the free world against totalitarian aggression. On the contrary, I know that, to the extent that America rearms and reasserts the strength of the free world, she defends us who are militarily weaker, whether we know it or not. However, I urge the need to follow up on economic and military cooperation on the ideological plane. Mr Arthur Goodfriend in his significant book “The Only War We Seek,” makes a similar plea. Writes Mr Goodfriend, “_They (the Chinese Communists) reached the people by means of education and political indoctrination. We tried too often to win them with charity...We can, as we did in China, keep mum about the shameful record of Russian Communism. Or we can attack the soft underbelly of Communism by reciting its record on the values most precious to Asians and others - religion, the family, national independence and the ownership of the land...Unless we are prepared to face the problem, the United States and the free world may be betrayed into a grievous error. The governments of underdeveloped peoples may rally to our side - but behind this facade the people may remain aloof and even antagonistic_”. Thus Mr Goodfriend. There is no country in the world today so well placed to lead the social revolution in Asia as the United States of America, Professor M. A. Lineberger on the basis of his own personal experience in the Far East, presents us with a paradox. “_The Americans believe in spiritual things_,” writes Professor Lineberger, “_but they try to buy them by material means - by dollars, by gifts, by aid. The Communists believe in material things, but they offer people something to join, something to do, something to fight. We Americans offer property; the Communists offer a reason to being alive...People who join the Communist side feel that they are needed, that the Communists want them. You could not join the American side, if you were an Asian. There isn't anything to join_”. How very true. Neither militarily, ideologically, nor morally can one part of humanity afford to write off any other. If it was true in the time of Abraham Lincoln that no nation could be half slave and half free, it is equally true today in this shrinking world that we cannot have a world that is half slave and half free. More than ever is it true today that as the English poet John Donne wrote, “_No man is an island entire of itself; every man is a piece of the continent, a part of the main; if a clod be washed away by the sea, Europe is the less, as well as if a promontory were, as well as any manner of thy friends or of thine own, were; any man's death diminishes me, because I am involved in mankind. And therefore never send to know for whom the bell tolls; it tolls for thee_”. _Previous musing: [Democracy means Bread and Freedom](https://indianliberals.in/content/democracy-means-bread-and-freedom/)_ --- ## [Musing] To Prosperity through Freedom URL: https://indianliberals.in/musings/to-prosperity-through-freedom-v-r-1960/ ### Body _The following musing is an excerpt from ‘To Prosperity through Freedom’, published in journal Incorporating the 'Free Economic Review' and 'The Indian Rationalist’ Vol. 8 No. 5. The piece written by V. R. discusses and contextualizes Swatantra Party’s Philosophy and Policy which was declared at Patna on 19 and 20 March 1960. _ Like Luther at Godeoburg, Mr. C. Rajqopalachari has nailed his Fourteen Points on the door of the Ruling Party in the crucial challenge. The Patna Convention authorised a statement of policy on 19 and 20 March 1960 which is issued to the general public in the form of a brochure called: To Prosperity through Freedom.  The Congress cannot ignore it any longer. The congress from the days of its founder Mahatma Gandhi has contented itself with practical programmes leaving ideology and refinement of ideals to the supreme leader. Moreover, the aim then was simple, namely, to get rid of the foreign ruler and to establish swaraj or government by the people. The governing sentiment was nationalism. The particular ideas and ideals developed by Gandhi in the course of his conduct of different campaigns had a general appeal but were not accepted by all on grounds of rational conviction. Even non-violence which Gandhi erected into an End in itself was accepted, for instance, by Jawaharlal Nehru as a Means necessary and inevitable under the circumstances of an unarmed people facing a modern fully-armed Government which could command every sphere of life and dominate every corner of the country through an all-pervasive network of government, roads, telegraphs, strategic railways and mobile military forces.  Khadi, prohibition, simplicity or even austerity of life, constructive work in preparing villages imbued by the Gandhian ideas, prayer, fasta. vows etc. were all accepted along with his theoretical notions of Hind Swaraj in a vague way.  One who was a Minister in Mysore told the present writer that there was no need to think afresh on social and political ideals and policies because all that had been sufficiently and efficiently done by Gandhi long ago. He represented the closed mind so characteristic of the Congress intellectual and politician.   Today we have a similar situation in the country with Nehru as supreme leader. Congress leaders and rank and file take their ideology and policy from Nehru passively without much of heart-searching and analysis or discussion. The very constitution queers the pitch for the future by including socialistic programmes in the directive principles of policy such as levelling the disparities of wealth, providing welfare through State control, the right of the State to take over any line of business from private hands for public purposes etc. The abolition·of the zamindari was accepted without discussion as something above and beyond reasonable challenge.   The Policy Declaration of 1948 regarding industrialization laid down the dogma of State ownership and control of all key industries. This is socialism before Avadi (1955). The ideology of Nehru by way of Marxist economy has come into force from the very beginning of independent government in 1947 and has now reached proportions threatening the destruction of the democratic foundations and structure of free India.  The Patna brochure of the Swatantra party describes this state of crises confronting the country in all its aspects, both general referring to the overall psychological effects on national character and specific referring to the actual policies, economic and social. It proceeds to delineate an alternative policy and programme designed to reverse these destructive trends and set the country on the true path of stability and progress. In doing this, it takes issue in a frontal manner with the basic doctrine of socialism and traces the of congress policy to the blind way in which the Soviet pattern of industrialisation with its undue stress on heavy industries and neglect of consumer goods and agriculture is being put into force despite all warning by knowledgeable persons both Indian and foreign. The Swatantra party is doing a genuine and much-needed service to the country by forcing a rational discussion of the philosophy and economy and polity of democracy in the light of our social and historical conditions. Democracy is goverment by discussion and it cannot be established accurately without the development of an unusually large class of persons in all walks of life taking part in the discussion of public affairs in different degrees. A free press and platform and the habit of discussing public events and policy proposals should be fostered in a democracy. So far the Congress Government is pursuing policy as if it were a private matter of the party and of its leaders. Publicity is sought only for approval and endoroement by the masses. Criticism is not welcomed, Day by day, the press is finding increasing pressure for conformity with ruling views.  In such a situation, the brochure of the Swatantra party as well as the challenging speeches of  Sri C. Rajagoalachari, Mr. M. R. Maoani, Mr. K. M. Muhani, Prof. Ranga, Mr. Ratnaswamy and others have initiated a debate on the fundamentals of socialism vs democratic freedom as governing principles of national reconstruction and progress consistent with stability.  As regards the general aspect of the situation, the brochure points out that the great aspirations natural to a great country with a historic culture and civilisation imposes a special responsibility on the Government. It holds that the Congreos governent has not risen to the occasion but has caused a deterioration in the national fibre by its conduct with wide gaps between high professions and demoralising slackness in administration. Nor has the lot of the common man improved in spite of huge expenditure on grandiose projects and industrial establishments. The middle classes in particular are being wiped out under conditions of great hardship and frustration due to the growing difficulty of maintaining their standards of education and simple comforts. A small group of Congress leaders has come to exercise an excess of governmental authority irresponsive to public opinion, banking on the past services of the Indian National Congress. Other Statist parties like the PSP have become but satellites of the ruling party with similar socialist ideals borrowed unintelligently from abroad. In the last section, the brochure discloses the mission of the Party of winning for the individual citizen freedom in the context of democratic life, which the struggle for national independence won for the nation. It declares that it will train the country for freedom, continuing the work of Gandhi and claims that the Swatantra party is a party that the country needs in order to fulfil its destiny-the party of ordered progress in and through freedom.  Like the Congress, therefore, the Swatantra party also claims to be a movement for building a society of free individuals and realising greatness for the country in the comity of nations and fulfilling the promise inherent in the greatness of past culture and civilisation.  Man does not live by bread alone. He needs some overflow feeling, some overall objectives beyond bread and butter, some horizon to expand his outlook and yield large aims for his immediate activities. Hence we find the Westerner referring to the white man's burden. Even the South African Boer has the ideal of preserving Christian white civilisation. The Nazi dreamt of Nietzsche's goal of supermen lording it over the earth by virtue of superior aristocratic blood. Mussolini dreamt of reviving the glories of the old Roman empire. The communists have the heady goal of ruling the whole world and transforming the whole of human society into the pattern of a New Mass Man in a New Mass society in which Government fades away after producing self-sustaining Plenty. Gandhi dreamt of Hind Swaraj. a republic of autonomous villages living an Arcadian life of simplicity close to nature.  Nehru has the vision of socialised society with industrialisation carried to its apogee, full of science and technology. To these glamorous visions, the Swatantra party opposes its own picture of a free society functioning in accordance with the principles of free economy with a minimum amount of social, political and legal regulation. Voluntary associations fill the scene in a free society with the State confining itself to the limited sphere of law, order, and justice. Perhaps it may pioneer industries in case of the unreadiness of voluntary groups to take them up. Free self-realisation through self-chosen activities in all the spheres of knowledge and action, art and science, industry and commerce, transport and communications, education, amusement and relaxation and happy associated activity in excursions and fellowship of various kinds; this is the picture presented by the Swatantra party. Hegel proclaimed that the goal of human society and civilisation is the attainment of Freedom. Karl Marx (the perverse student of Hegel) also had some dim notion of Freedom as the culmination of his communist society the State withering away, all class oppression vanishing and everyone doing his best for State and Society and every one obtaining from State and Society everything needed for human satisfaction and growth. It is in the picture of proximate ideals, of actual governmental policies that social goals come to have vastly differing impacts on the day-to-day lives of the people, giving them the exhilaration of expanding freedom or cribbing, cabinning and confining them into narrow grooves charged with pain and frustration. _You can access the complete piece _[_here_](https://indianliberals.in/the-indian-libertarian/the-indian-libertarian-jun1-1960.pdf)_._ type=content&p=8512). Needs editorial review._ --- ## [Musing] Trample the Wall URL: https://indianliberals.in/musings/trample-the-wall/ ### Body Fechter's death also exposed the flabbiness of the Western position in Berlin. The American troops at the Checkpoint Charlie could have, if permitted, given medical aid to Fechter who was moaning helplessly for about half an hour before he succumbed to his injuries. But the fear of possible consequences of such an act rendered the American military authorities on the spot powerless. _The recent rise of right-wing strongmen and left-wing populists around the globe threaten the liberal world order premised on free trade, rule of law, human rights, and individual liberty. In the US, _[_both_](http://bleedingheartlibertarians.com/2018/09/in-defense-of-openness-excerpt/)_ the left-wing Bernie Sanders and right-wing Donald Trump oppose the free movement of immigrants and by extension their bid for a dignified life._ _As the liberal values of freedom come under attack with the erection of walls on borders and hostile public discourse, it is imperative for liberals to push back. And what better way to do that than offering a lesson from history? Produced below is an excerpt from the 1962 reportage on the Berlin Wall published in the Freedom First magazine. _ _BK Desai recounts the life at the forefront of the Cold War in Berlin as the Berlin Wall had recently sprung up to divide the city between the capitalist and communist sphere of influence. The economic dynamism of the Western part in contrast to the staid Eastern Berlin offered a miniature natural experiment in history on the efficacy of Capitalism and Communism as an economic system. The reportage also captures the horrendous pain suffered by the Berliners as they sought to escape the misery of Communism even at the expense of putting their lives at risk._ A week before our arrival in West Berlin, the city was convulsed by the sudden explosion of an orgy of riots in which, for four days, thousands of West Berliners hurled rocks at East Berlin border guards, stoned Russian soldiers and shouted insults at American troops. The cause of this sudden outburst of violence was the tragic death of an eighteen-year-old East Berliner, Peter Fechter, who, while trying to cross the Wall, was shot by East Berlin border guards. Wounded by the bullets, he fell down from the Wall and was allowed slowly to bleed to death in full view of the crowd gathered on the Western side of the Wall who could do nothing but hopelessly watch his slow untended death from his wounds. Fechter was the fiftieth East German known to have been killed while trying to escape across the Wall. But the horrifying manner of his death suddenly spotlighted, for the West Berliners, the inhuman misery in which their 16 million countrymen were living behind the Wall, and the utter hopelessness of their own situation in the face of the brute power that was determined to retain its stranglehold over their countrymen in the Eastern zone. Fechter’s death also exposed the flabbiness of the Western position in Berlin. The American troops at the Checkpoint Charlie could have, if permitted, given medical aid to Fechter who was moaning helplessly for about half an hour before he succumbed to his injuries. But the fear of possible consequences of such an act rendered the American military authorities on the spot powerless. They refused, inspite of repeated requests from West Berliners, to extend the dying boy any medical assistance. This exaggerated fear of provoking the Soviet authorities into retaliatory measures has always paralysed the Western power at critical times and put them on the defensive. This has forced them to reduce their commitments in Berlin to the barest minimum and given the Soviets a free hand to accomplish their designs of piecemeal annexation of Berlin into the Soviet bloc. _The full text can be accessed _[_here_](http://www.freedomfirst.in/uploads/issues/pdf/125.pdf). [_IndianLiberals.in_](http://indianliberals.in/)_ is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context._ Read more: [SO Musings: Replace the GDP](https://spontaneousorder.in/so-musing-replace-the-gdp/) --- ## [Musing] Towards Party-less Democracy URL: https://indianliberals.in/musings/towards-party-less-democracy/ ### Body _The issues plaguing our electoral system have much to do with the tyranny of political parties and any step towards reforming the system on this path is a welcome. The following article was written in February 1961 and published in the Freedom First magazine. It challenged the popular notion of multi-party democracy. The author M.A. Venkata Rao discussed the modalities of a party-less democracy and proposed structural adjustments.  _Distressed by the Himalayan evils that have corrupted public life and administration during these years of self-rule, thoughtful people are suggesting a form of parliamentary democracy without the party system. The late Mr M. N. Roy had worked out the idea in some detail. And now Mr. Jayaprakash Narayan is mobilising public opinion by means of seminars and the circulation of concrete proposals among uncommitted thinkers. The first question whether such a system is desirable does not need much persuasion to those aware of the evils that the party system has brought in its wake. The first casualty is that of moral and intellectual conscience. The party whip demands loyal support even when the member disapproves of the measure under contention. The fear of losing his parliamentary seat with the defeat of the party (that has been won at great expense) brings many a member to heel. Majority rule is prostituted too often to pass measures to win the suffrage of the people or a class of the people, like the astronomical subsidies paid in the USA to farmers to refrain from producing too much, whether grains or commercial crops.The American way of life with its sacred principle of free competition is thus flagrantly violated and no party has been able to end the policy for fear of losing the farmer's vote. In India, even grave excesses committed by the administration like police firing ending in the death of dozens of citizens have been refused judicial review for fear of revealing the extent of the enormity indulged in. The unprecedented provincial jealousy in Assam issuing in riot and arson to drive a section of population out of the State has escaped inquiry and punishment for fear of losing party popularity. In the financial sphere, the way in which the ruling party is collecting campaign funds from industrialists has been a scandal. The narrow-minded feelings of caste solidarity have had such a field day since independence that all ideals of integral nationalism and individual merit have been shamefully jettisoned. The natural process of transcending tribalism and extending social competition and emulation to the whole arena of the nation, under the principle that everyone in the nation is to have an equal chance on the ground of merit and service, has been halted by patty men rallying caste support in return for jobs and other favours. Indeed the extent of dissatisfaction with the role of the ruling party is so great today that many fear that India too may follow (suddenly without warning) the way of the rest of the newly independent countries of Asia and succumb to dictatorship. The situation today here is not much superior to that of the regime of Chiang Kai Shek on the eve of the communist takeover in 1949. What then is the remedy? Mr. Narayan’s suggestion is that of jettisoning the party altogether. What the administration in a democracy needs is a number of representatives of the people to whom the tasks of government are to be entrusted. It has been the solid result of history that no individual or family can be entrusted permanently with the powers and privileges of government. Power corrupts and absolute power corrupts absolutely. Monarchies, aristocracies or oligarchies belong to the immaturity of political evolution. People’s representatives elected on the widest franchise possible should elect the governors of the country, watch their policies and doings from day to day and dismiss them if they are found unworthy or incompetent. Democracy has come into existence to enforce such responsibility on the holders of power. Representatives also interpret the interests of the people and help in translating them into practicable policies from time to time. The permanent civil servant will not concern himself with policy making but will occupy himself with the expert task if realising policy in the details of administration. The combination of the amateur representative and expert administrator has been found beneficial in democratic administration. These functions can be performed, it is felt by the sponsors of party-less democracy, without the organisation of rival political parties, each appealing to the people as if public salvation depended exclusively on returning them to power in preference to the others. There is something false and undignified in such claims. Power should be conferred unsought on worthy persons by a discerning public. It should not be sought with passion and the pledging of exclusive loyalties to groups. The party system has been so ingrained everywhere in the modern world where democracy prevails that an alternative way of electing and supervising leaders of government seems unthinkable. But there is nothing unthinkable or contrary to human nature or political actuality or possibility in the idea of democracy without parties. It is suggested that voters' associations be formed in each polling booth area. Voters in such areas will meet some time before the elections and discuss the several ideas, principles and policies before the public mind from the standpoint of immediate realisation by the next government to be elected. Teachers, political thinkers and men of experience in every line- doctors , lawyers, cooperators, merchants, industrialists and workers sufficiently awake to the appeal of public questions and good government will bring their minds and experience to bear on current ideas. The _small community _of the polling booth district will revive the _primary community_ corresponding to the village panchayat community. They may function like a club with departments to cater to the other interests of culture and develop a face-to-face community in which members get interested in each other as full persons and not merely representatives of a narrow line of business or occupation. Democracy in government by public discussion and the voters' association can provide a forum for' discussion and healthy clash of ideas from all points of view. Abstract ideas from books and accounts of experience from other countries may be tested in the light of common sense, experience and current needs of the country as they appear to the voters. The function performed by the party of formulating clear-cut programmes out of the floating welter of ideas and proposals may be performed by leading members of the voters' association. Voters' associations from all the different districts of the city may meet periodically for discussion so that ideas could be pooled and currents of public opinion may pervade the whole city in all the constituencies . Mr. Jayaprakash Narayan envisages full discussion and the canvass of all relevant ideas but without the distorting influence of the party. Ideas will be discussed and entertained on their own merit as affording guidance to policy makers.  One great advantage of this system if adopted is that the people of the locality can meet as _citizens_ without incurring the displeasure of ruling parties.At present many people, particularly, from the commercial and industrial classes, are afraid of seeming to support opposition parties. I know of authentic cases where the police have called upon wealthy people who had attended meetings of the Swatantra or Jana Sangh parties on the pretext of private enquiries. There is intimidation at many levels and in different degrees today vitiating the atmosphere. A party-less democracy will certainly clear the air. In fact, some prominent members of the suburbs in many cities have asked for such non-party associations under whose auspices they could all meet and hear the views of different leaders without fear of seeming to support the opposition. The voters' association will function all the time following current problems, Indian and foreign, as a discussion club but at election time, it will consider the choice of representatives. Mr. Narayan suggests that 'each voters' association might nominate three of their members. All these members from all the constituencies can then meet in an electoral college which will nominate candidates. The scramble for tickets so deleterious to political morals will be eliminated. To provide choice, they will have to nominate three or four persons for each constituency as competing candidates. They will have become known to each other through the meetings of the voters association held throughout the year. People with clear views and with a capacity for forceful expression will easily stand out from the rest of the citizen body. The elections will perform the final function of choosing the legislators. The legislators, say some 200 in number in the States of the Union, will then choose the Ministers by election from among themselves. The present system of the party choosing the Chief Minister and he nominating his colleagues will not be resorted to, naturally, in the absence of parties.  All Ministers will be elected by the whole body of legislators who will all have equal status. A chief will be chosen by the Ministers from among themselves. He will not have the power of appointing his colleagues and will not have much more power than the rest.  The legislators will discuss all relevant proposals and under the lead of ministers will formulate policies and programmes for being carried out in their term of office. They will not be divided into different groups on the basis of parties each committed to certain principles or party programmes. The programmes will be shaped on the basis of the merits of ideas from the standpoint of national interest as a whole. The deliberations will have the character of scientific discussion, taking all facts and possibilities into account. Administrative experts and special commissions for studying difficult and complex proposals and questions will furnish the data necessary for a wise decision. The procedure of formulating programmes will not be distorted by the inward anxiety to promise more than is possible or desirable to win support for the party at the next elections.  The press and pamphlet and platforms will also contribute as now to the mobilisation of ideas relating to public needs and programmes. There is nothing to prevent the Government from combining ideas from different philosophies into practicable programmes. For instance, it is possible to have a mixed economy programme combining socilist and individualist outlooks. The question of the priority or otherwise of heavy industries in the Plan can be discussed in terms of immediate effects.on the economy such as the level of prices, inflation and so on without taking a final decision on the theoretical value of communism. It is possible to evolve social security programmes without paying hostages to socialism and centralising all economic power. It can be done through private insurance aided by the Government if necessary. It is known that expenditures on social security such as old age pensions, socialised medicine, unemployment aid sickness insurance have risen so high that it has become more profitable for the beneficiaries to ask for their abolition in return for tax reliefs! Parties are tempted to increase these benefits to win the support of pressure groups and the mass of voters, particularly the most numerous of them, namely, the lower middle class. In some countries welfare legislation has advanced so much that the classes contributing to the public exchequer in their period of earning are beginning to resent such a large proportion of their earnings being spent on those who have passed the age of work!  The slogan of "social justice" has obliterated all restrictions stemming from merit, individual contribution and self-reliance. The process of soaking the rich has given place to that of soaking the poor through indirect taxation on all goods of common use.These temptations will disappear if party-less democracy can be got into working order. Instead of each party trying to stand well with the public as executive givers of plenty, deserved or undeserved, individual Ministers will stand out in the public eye for efficiency and integrity and devotion of public duty.The immense expense of party organisation, not only during election time but also during ordinary times for maintaining party bosses while out of office (and those out of office when their colleagues are enjoying office) will be saved. Pressure groups can be resisted more by individual Ministers and exposed than by party leaders anxious for augmenting party finances. Such Ministers will be in demand and will be elected again and again without the interruptions of party exigencies. In Switzerland, some such system of democratic functioning has been in existence for a long time. Parties exist there but are not regarded as exclusive and sacrosanct. Ministers are chosen by the elected representatives more for personal merit cutting across party alignments. It has been possible there on account for some favourable circumstances in that country. The cantons are little democracies in themselves wherein individual merit stands out in the primary community. Also, there is a high level of employment so that disappointed party men need not put pressure for illegal and unworthy gratifications from the ruling party. Also, Ministers need not accumulate enough to last them for the rest of their lives! They can get employment any time. Moreover, the great thing making such a system possible is the psychology of public service and simple living prevailing among the Swiss. These are virtues congenial to our best tradition and can be captured again. The difficulty stems from the fact that it is very difficult to affect a change from the present system. A body of volunteers have to set about organising voters' associations throughout the country and the Government should be persuaded to cease recognising parties during elections. But if it can be realised, the gain to political life will be immense.  The article was originally published[here.](http://www.freedomfirst.in/uploads/issues/pdf/105.pdf) --- ## [Musing] Two Greater Enemies of Freedom URL: https://indianliberals.in/musings/two-greater-enemies-of-freedom-john-ridpath/ ### Body The following is an excerpt from the book 'History of the World' written by John Clark Ridpath. It was republished in [the Indian Libertarian magazine on October 15, 1962](https://indianliberals.in/the-indian-libertarian/the-indian-libertarian-oct15-1962.pdf). In this piece, the author puts forward some compelling arguments on the threat posed to freedom by the State and Society. One of the greatest enemies of freedom, and therefore of progress and happiness of our race is over-organisation. Mankind has been organised to death. The social, political, and ecclesiastical forms which have been instituted have become so hard and cold and obdurate that the life, the emotion, the soul within, has been well-nigh extinguished. Among all the civil, political and churchly institutions of the world, it would be difficult today to select that one which is not a large measure conducted in the interest of the beneficiaries. The Organisation has become the principal thing and the Man only a secondary consideration. It must be served and obeyed. He may be despised and neglected. It must be consulted, honoured, feared, crowned with flowers, starred and studded with gold. He may be left a starving pauper, homeless, friendless, childless, shivering in mildewed tatters, a scavenger and a beggar at the doorway of the court. All this must presently be reversed. Organisation is not the principal thing; man himself is better. The institution, the party, the crowd, the government – that does not serve him; does not conduce to his interests, progress and enlightenment; is not only a piece of superfluous rubbish on the stage of civilization, but a real stumbling block, a positive clog and detriment to the welfare and best hopes of mankind. Closely allied with this over-wrought organisation of society is the pernicious theory of paternalism –that delusive, medieval, doctrine, which proposes to effect the social and individual elevation of man by “protecting,” and therefore, subduing him. The theory is that man is a sort of half-infant, half imbecile, who must be led along and guarded as one would lead and guard a foolish and impertinent child. It is believed and taught that men seek not their own best interests; that they are natural enemies and destroyers of their own peace; that human energy when liberated and no longer guided by the factitious machinery of society and the state, either slides rapidly backward into barbarism or rushes forward to only to stumble and fall headlong by its own audacity. Therefore, society must be a good master, a garrulous old nurse to her children. She must take care of them; teach them what to do; lead them by the swaddling bang; coax them into feeble and well regulated activity; feed them on her inspired porridge with the antiquated spoons of her superstitions. The State must strengthen her apparatus, improve her machinery. She must put her subjects down; she must keep them down. She must keep them to be tame and tactable; to go at her will; to rise, to halt, to sit, to sleep, to wake at her bidding; to be humble and meek.  And all this with the belief that men so subordinated and put down can be, should be, ought to be, great and happy. They are so well cared for, so happily governed! On the contrary, if history has proved any one thing, it is this:  Man when least governed is greatest. When his heart, his brain, his limbs are unbound, he straightaway begins to flourish, to triumph, to be glorious.  Then indeed he sends up the green and blossoming trees of his ambition. Then indeed, he flings out both hands to grasp the skyline and the stars. Then indeed, he feels no longer a need for the mastery of society; no longer a want for some guardian and intermeddling state to inspire and direct his energies. He grows in freedom. His philanthropy expands; his nature rises to a noble stature; he springs forward to grasp the grand substance, the shadow of which he has seen in dreams. He is happy. He feels himself released from the dominion of an artificial scheme which has been used for long ages for the subjugation of his fathers and himself. What men want, what they need, what they hunger for, what they will one day have the courage to demand and take is less organic government – not more; a freer manhood and fewer shackles; a more cordial liberty, a lighter fetter of form and a more spontaneous virtue. (The above is an excerpt from the concluding portion of the book ‘History of the World’ written by one of the greatest American Historians – John Clark Ridpath. Though he wrote it 70 years ago, it could have been written today with equal force and truth) --- ## [Musing] Two Strands of Liberal Expression : Dr. Anandibai Joshi and Lakshmibai Tilak URL: https://indianliberals.in/musings/two-strands-of-liberal-expression-dr-anandibai-joshi-and-lakshmibai-tilak/ ### Body _Dr. Anandibai Joshi and Lakshmibai Tilak embarked on two separate paths for education and yet their paths coalesce into a strong liberal expression for emancipation of the individual._ As liberal feminist ideas became more articulate and the suffrage movement became stronger in America, an intellectual churning shaped the Indian psyche in the latter half of the 19th century. At the center of this churning lay the issue of women’s education. Pandita Ramabai, Savitribai Phule, Ramabai Ranade, Dr. Anandibai Joshi, Lakshmibai Tilak among others, worked towards emancipation of women through education. This article looks at Dr. Anandibai Joshi and Lakshmibai Tilak and their fight for education. Dr. Anandibai Joshi and Lakshmibai Tilak embarked on two separate paths for education and yet their paths coalesce into a strong liberal expression for emancipation of the individual. At the mere age of 17, Anandibai Joshi sailed alone to America with the dream of becoming a doctor. Her journey up till this point is infused with grief, loss, and a constant battle against orthodoxy. Ever since their marriage when Anandibai was 9 years old, her husband, Gopalrao Joshi was keen on educating her. Against the wishes of Anandibai and her family, Gopalrao began educating her. His methods of teaching were often exacting and naturally Anandibai showed no keen inclination towards learning. When she was 14, she lost her infant; Anandibai came to believe that her infant could have been saved had there been a native, Hindu, female doctor that she could seek help from. This loss awakened the desire for education in her and she sought to get medical education. Gopalrao supported her decision and the couple decided to look for medical colleges abroad. In a speech at Serampore, Anandibai explained that most Indian medical colleges trained women for midwifery; the only college in Madras presidency which trained women to become doctors, treated female students with disdain.  Gopalrao began correspondences with several philanthropic organizations but received no response. He also appealed to Rev. Wilder of Princeton for helping him and his wife travel to America in September 1878. Rev. Wilder advised the couple to stay in India and to “confess to Christ immediately.” (Kosambi, 1996, p. 3190) While Gopalrao gave the suggestion a serious thought, Anandibai firmly rejected it. Anandibai was a staunch Hindu and refused an education that would strip her of her faith. Anandibai then applied to Women’s Medical College of Pennsylvania where she could study while practicing her faith. Before leaving for America, Anandibai took a public vow at a gathering in Serampore, “I will go to America as a Hindu and return as a Hindu.” (Kosambi, 1996, p. 3195) Contrary to Gopalrao’s ambiguous position on colonialism and Hinduism, Anandibai was a nationalist and sought to retrieve ancient Hindu knowledge. Anandibai wrote to Mrs. Carpenter on 15 November 1880, “The Europeans are under the impression that there is nothing worth knowing in Hindu scriptures and I have therefore taken up Sanscrit to show them how sublime, useful, and instructive are the precepts in Hindu Shastras.” (Kosambi, 1996, p. 3194) Her steadfast belief in her faith is seen in her medical dissertation for MD, which was titled, ‘Obstetrics among the Aryan Hindoos’.  When Dr. Anandibai Joshi and Gopalrao returned to India in 1886, the Mahratta newspaper congratulated Dr. Anandibai and praised her for abiding by her public vow. “We bid a hearty welcome to Gopalrao Joshi and his wife, now Dr. Anandibai Joshi who returned to India by the last Mail Steamer… the difficulties of Mrs. Anandibai were such as no man or woman of ordinary moral and physical strength could have overcome. Happy it is that the worthy husband and wife have conquered all these difficulties and come back to India with Western culture but without a taint of Western vice. Mrs. Joshi has preserved her Hindu habits and customs and that too at no small personal inconvenience.” (_Mahratta_, 21 November 1886) While Dr. Anandibai stood by her public vow and her faith, she spoke openly about the restrictions imposed on Hindu women. In her speech at Serampore, she also highlighted the difficulties faced by Hindu women while seeking education. Dr. Anandibai said, “I am neither a Christian nor a Brahmo. To continue to live as a Hindu and go to school in any part of India is very difficult. A convert who wears an English dress is not stared at. Native christian ladies are free from the opposition of public scandal which Hindu ladies like myself have to meet within and without the zenana.” (Kosambi, 1996, p. 3194) Like Dr. Anandibai, another tale of perseverance, was taking shape in the form of Lakshmibai Tilak. Manakarna Gokhale was married off to Narayan Waman Tilak (henceforth Rev. Tilak) at the age of 11 and assumed the name Lakshmibai Tilak. Lakshmibai’s childhood was scarred by her father’s extreme conformity with orthodoxy and she was made to remain illiterate. After her marriage, she kept tackling orthodoxy as her father-in-law, Wamanrao Tilak ran the house on dictatorial terms. Wamanrao’s wife was literate and composed poems; concealing his contempt behind the facade of orthodoxy, Wamanrao burnt all of his wife’s poems. He also burnt a book on morality that was gifted to his wife by missionary women.  Against the severe contempt for women’s education, Rev. Tilak began educating his wife, Lakshmibai Tilak. His methods of teaching, much like those of Gopalrao, were taxing and Lakshmibai found no joy in learning. “Tilak wanted his wife to become something, someone renowned - a writer, a poet, or an orator. And he always took efforts in that direction” [1](Tilak, 2012, p. 251)[2]. But Tilak’s insistence on perfection and the larger societal restrictions became obstacles for Lakshmibai.  Rev. Tilak often left his wife alone as he went on spiritual quests and traveled in search of answers. At one point, he even declared renunciation of the world. Rev. Tilak’s erratic behavior was attributed to Lakshmibai, and her presence was often treated as a bad omen at her marital home. When Rev. Tilak converted to Christianity, he was excommunicated from his community. Lakshmibai, though continued to be a Hindu, suffered mistreatment at the hands of her own community. Lakshmibai and her toddler Dattu moved villages and lived isolated lives. During this period of isolation, Lakshmibai started reading books, working hard to master the difficult जोडाक्षर (alphabet with a vowel and two or more consonants). It brought about a transformation within her as writes in her autobiography, “the chains of casteism that had gripped my mind broke down. I shed my casteist beliefs. Henceforth, every living being is equal in my eyes.”[3] (Tilak, 2012, p. 231-2) In order to seek an education free of caste biases and of boundaries of ‘pure’ and ‘impure’, Lakshmibai converted to christianity. Lakshmibai refused to receive her baptism from the English missionaries or from upper caste christians and instead she received it from Rev. Vaniramji Bapuji Ohol. Staying true to her transformation, Lakshmibai adopted three beggar kids - Houshi, Daya and Bhiku.  Lakshmibai had also started addressing religious congregations in Ahmednagar. She refused to read out the speeches that Rev. Tilak wrote for her. “I will not read out [what you have written down]. I will speak what comes to my mind.”[4] (Tilak, 2012, p. 252) Around the same time, Lakshmibai decided to take up medical education from Dr. Julia Bisel, Dr. Bills and Dr. Harding. Lakshmibai had earlier studied Indian medicine and she complemented it with her American medical training. She also worked at the Plague camp as a nurse, providing medical aid to the patients. Lakshmibai had broken free of the orthodoxy that had kept women illiterate; this liberation set her mind free and she started composing poetry. Rev. Tilak had undertaken the task of writing ‘Khristayan’, an epic detailing the life of Christ; he passed away after writing 10 chapters. Lakshmibai completed the epic by adding 64 chapters to the poem. Subsequently, Lakshmibai also wrote her autobiography serialized in the weekly magazine _Sanjeevani_. Knowingly or unknowingly, Lakshmibai had truly transformed into a ‘a writer, a poet and also an orator’. Lakshmibai Tilak and Dr. Anandibai Joshi fought for emancipation and education. Both sought to free themselves from the orthodoxy that had caged and scarred women. Building on the primary education imparted by their respective husbands, both Lakshmibai and Dr. Anandibai carved out their own path and embodied agency. Dr. Anandibai and Lakshmibai, through their separate paths for empowerment, reiterated and affirmed liberal ideas in the intellectual churning of the 19th century.   **References** Kosambi, M. (1996). Anandibai Joshee : Retrieving a Fragmented Feminist Image. _Economic and Political Weekly_, _31_(49), 3189–3197. http://www.jstor.org/stable/4404856 Tilak, L. (2010). _Smritichitre_ (4th ed.) [Print]. Samanvay Prakashan. **Endnotes** [1] All translations are by the author of this piece. [2] टिळकांना फार हौस की आपल्या बायकोने कोणी तरी मोठ्ठे व्हावे. लेखिका, कवयित्री, वक्ती तिने बनावे. व ह्या दिशेने ते नेहमी प्रयत्न करीत.   [3] माझ्या मनाला जखडून टाकणाऱ्या जातीभेदाच्या साखळ्या खळाखळ तुटून पडल्या. बस. माझा जातीभेद गेला. यापुढे मला सर्व सारखे आहेत.  [4] मी पाठ करून बोलणार नाही. मला माझ्या मनाला वाटेल तसे बोलेन.   [_Previous musing: Lokmanya Tilak: A Conservative Liberal?_](https://indianliberals.in/content/lokmanya-tilak-a-conservative-liberal/) [](https://indianliberals.in/wp-content/uploads/2023/09/IMG_4159_Original.jpg) **Avanti Lele** Avanti Lele is a Minoo Masani Liberal Fellow. She is pursuing her PhD in English Literature from Lancaster University. She has worked as a lecturer of English Literature and as a Spanish language instructor. Her research interests include but are not limited to women's writing, liberal feminism, postcolonial studies, indigeneity. --- ## [Musing] Sharad Joshi on The Unchanged Quarter Century for Farmers URL: https://indianliberals.in/musings/unchanged-quarter-century-for-farmers-sharad-joshi/ ### Body The following is an article written by Farmer Leader Mr. Sharad Joshi and published on 1st September 2004 in the Hindu Business Online and later reproduced on the website of Shetkari Sanghathana. The article is part of the _Down to Earth _series which Mr. Sharad Joshi used to write for the Hindu Business Online. In this article, he highlights the evolution of Farmers's movements in India, the formulation of the remunerative price theory and the many agitations which emphasised the need for freer markets for farmers. At the end of a quarter century of struggle, the typical farmer is as badly indebted as he was at the beginning but stands vindicated and cleared of all charges of being indolent, ignorant and incompetent. Farmers agitations in the present epoch started over a quarter century back in Tamil Nadu, with Narayan Swamy Naidu's bullock-cart blocking roads in protest against farm power tariff hikes and seeking their rollback. Farm power is free now in Tamil Nadu, Andhra Pradesh and Maharashtra. But the farmers, crushed under the burden of debt, still commit suicides in large numbers. Indian agriculture continues to be a gamble in the monsoon and suffers from poor infrastructure. What has a quarter century of farmers' movement to show by way of gains and what are the losses to the farm community? The movement concentrated on reduction of input costs for the first half-decade. It was only with the onion agitation in 1980 that it developed a comprehensive economic theory. "Remunerative prices for agricultural produce" came up as a single-point prescription for agriculture's malady and general poverty. Remunerative prices were to be obtained through elimination of all governmental interventions in the commodity market. Till such time as the State adopts the necessary level of liberalisation and economic reforms, it must ensure a minimum support price to make up for the price-depressing effects of its interventions: Restrictions on exports, domestic movement, processing, storage, etc., and non-commercial imports of farm commodities. General poverty arose out of the fact that the economy's main activity, agriculture, was a losing proposition. This, in turn, was directly attributable to the government's policies that depressed agricultural prices. The formulation of the `remunerative price' theory was straightforward and simple, and captivated the hearts of peasant masses that participated in large numbers in the farm agitations from Karnataka to Punjab and from Gujarat to Uttar Pradesh. However, the economic pundits and the politicians protested vehemently. They cried: - "Remunerative prices for agriculture are tantamount to subsidising the rural rich at the expense of the urban poor." - "Remunerative prices will benefit only the rural rich and not the landless poor." - "Agricultural losses are due to the long chain of intermediaries that needs to be eliminated so that, side-by-side with remunerative prices for farmers, the consumers will get the produce at reasonable prices." - "Free markets for agricultural commodities can produce shortages and food insecurity and, eventually, even starvation." The opposition of all the establishment economists notwithstanding, the farmers rallied in ever-larger numbers to the call of remunerative prices. The agitations produced immediate gains in the form of increase in support prices. - The Chakan agitation (1980) got the onion farmers a support price of 60 paise a kg in the place of the mere 7 paise they were getting at that time. The constant reaction of onion producers to all attempts at restricting export of the commodity ensured aprice of Rs 3-5 a kg now. - The tobacco Rasta Roko at Nipani (1981) was a terrible setback. The tobacco growers got little to show for the 13 dead in the SRP firing. - The Maharashtra-wide blockade of milk (1982) was also a failure. The farmers could not stop the supply of milk beyond three days and the government remained stubborn. - The sugarcane agitation centred in Nashik district (1980) succeeded in hiking the Statutory Minimum Price (SMP) of sugarcane from Rs 180 to Rs 300 per tonne. - The agitation against the Maharashtra State Cotton Monopoly Procurement Scheme, which required the growers to sell their produce exclusively to the State dragged on for 18 years and ended by vanquishing the monopoly procurement scheme. The guaranteed price of cotton was Rs 700 per quintal in 1986. Now growers get around Rs 3,000 per quintal. Apart from the concessions wrested by the thrust of farmers' agitations, the demonstrated clout of farmers' opinions and unity had its political consequences and the Minimum Support Prices (MSPs) continued to increase year after year. In the decade since 1990-91, the procurement price of wheat went up by 258 per cent, that of coarse cereals by 215 per cent, of arhar by 275 per cent, of cotton by 270 per cent; and the Statutory Minimum Price of sugarcane by more than 300 per cent. The sheer strength of agitations and the political clout of the farm lobby were supplemented by yet another major development. The historic fall of the Soviet Union and the shift to the market paradigm ensured a successful culmination of the Uruguay Round GATT negotiations. The Agreement on Agriculture (AoA) of the World Trade Organisation (WTO) endowed a large number of benefits to farmers in India. First, there was a clear vindication of the fact that the farmers here suffered under heavy negative Aggregate Measurement of Support (AMS). Second, the abolition of Quantitative Restriction (QRs) took away all incentives for the political decision-makers and the bureaucracy to order imports in the nature of dumping. In 1996-97, the quantum of negative AMS for 14 major crops in India was Rs 113,000 crore. Since 1998, the indications are that the AMS has actually turned positive. That does not mean the Indian agriculture is no more a losing proposition. The AMS is probably positive; that is, the prices in India are not lower than those prevailing in the international referral market. But it also does not mean that the prices are higher than the costs. Since 1995, the domestic costs have increased while the international prices have remained low. The gains of the farmers' movement on the price front were too modest compared with the swelling costs and farmers continue to fall into debt, and death, traps. However, the gains of this movement on the doctrinal front are spectacular: - There is a universal acceptance that India has had a long regime of price-depressing policies that need to be reversed. - There is a clear understanding there is little conflict between the interests of the landless labourers and those of the landholding farmers. The wage rates increase much faster than farm produce prices. - There is also a realisation that the local chain of intermediaries is not the cause of the gap between the consumer and the producer prices. The India-Bharat syndrome is the more significant cause of the chasm and can be corrected by overall liberalisation and market reforms. At the end of a quarter century of struggle, the typical farmer is as badly indebted as he was at the beginning but stands vindicated and cleared of all charges of being indolent, ignorant and incompetent. [ The piece was originally published [here](http://www.sharadjoshi.in/node/55).] --- ## [Musing] Nani Palkhivala: Education, Leadership, and Vision of Free India URL: https://indianliberals.in/musings/vision-of-free-india/ ### Body The following text is taken from a 1998 booklet published by [Forum of Free Enterprise.](https://indianliberals.in/content/education-leadership-and-vision-of-free-india-by-nani-a-palkhivala-february-20-1998/) This text includes two speeches by Nani Palkhivala - an acceptance speech delivered by him when he was conferred with the 1997 Dadabhai Naoroji Award and response speech Palkhivala to the University of Mumbai’s Special Convocation for conferment of Honorary Degree of Doctor of Laws (LL.D.) in 1998. **Dadabhai Naoroji's Vision of a Free India** Dadabhai Naoroji's vision of a free India was the vision of an enlightened and well-educated society. Dadabhai was an ardent advocate of free education and of the principle that every child should have the opportunity of receiving all the education it is capable of assimilating. His own words were, "I realize that I had been educated at the expense of the poor, to whom I myself belonged .... The thought developed itself in my mind, that as my education and all the benefits arising therefrom came from the people, I must return to them the best I had in me. I must devote myself to the service of the people."  Dadabhai was a great pioneer in the promotion of female education. He used to tell his grandchildren some stories of his early days- how as a college student he would go from house to house with a friend, persuading parents and guardians to allow him and his friend to sit on their verandahs and to teach the three R's to their girls; how some of them took advantage of the offer but some irate fathers threatened to throw them down the steps for making such a preposterous proposal! His biographer, Sir R.P. Masani, said that to capture a pupil was sometimes as difficult a task as to conquer a city: against them were arrayed the forces of stern orthodoxy and with it the misgivings of the ignorant regarding the consequences of such a movement on the social life of the people.  Dadabhai realized that the two finest characteristics of the British were that they had a sense of justice and, further, they had a sense of fairness. An instance of the average Englishman's sense of justice and fairness is supplied by Dadabhai's own election by Eng I ish men to the House of Commons. Unfortunately, Indians lack both these characteristics. We, Indians, need Article 17 of our Constitution to tell us that untouchability shall be abolished and its practice in any form shall be forbidden.   I have no doubt that if Dadabhai had lived long enough to take part in the framing of the Constitution of India, he would have embodied similar fund;:tmental rights as have been given by our Constitution. In other words, I believe that if Dadabhai had to frame a constitution for free India, he would have envisaged the same type of secular constitution, and any minorities, whether based on religion or language, would have the right to establish and administer educational institutions of their choice. Dadabhai believed that India's salvation lay in equality of all religions and equal reverence for all religions.   Dadabhai, in his wildest nightmare, would have never thought that India would reach such a low level of degradation and corruption as it has reached today fifty years after attaining independence, - the lowest level of degradation in its entire history of 5,000 years.  Dadabhai, the greatest Indian of his time, was a Zoroastrian by birth and by conviction, and he lived the religion of Prophet Zarathushtra - good thoughts, good words, good deeds. A regenerated secular India would have been the greatest monument to his memory.  **Education & Moral Leadership** I would like to pay my humble tribute to the teachers and the professors of this University and at the other universities of our country who trim the silver lamp of knowledge and keep its sacred flame bright from generation to generation. They expend their lives on significant but unadvertized work. Quite a few of them plough the lonely furrow of scholarship. Their dedication bears witness to the selflessness of the human spirit.  I am proud to say that during my days as a student, our teachers and professors used education as the technique of transmitting civilization. The education we received helped us to enlighten our understanding and enrich our character. If I may speak in a lighter vein, the greatest lesson taught to us was that a formal education at a university cannot do you much harm provided you start learning thereafter!  I am using the word "education" in its profound sense. Animals can be trained; only human beings can be educated. Education requires personal participation and transformation. It cannot be given to anyone; it must be inwardly appropriated. In ancient India, kings and emperors thought it a privilege to sit at the feet of men of learning. Intellectuals and men of knowledge were given the highest honour in society. King Janaka, himself a philosopher, journeyed on foot into the jungle to discourse with Yajnavalkya on high matters of state. In the eighth century, Sankaracharya travelled on foot from Kerala to Kashmir and from Dwarka in the west to Puri in the east. He could not have changed men's minds and established centres of learning in the far-flung corners of India but for the great esteem and reverence which intellectuals enjoyed.  Thomas Jefferson, one of the founders of the United States of America, remarked, "If a nation expects to be ignorant and free, it expects what never was and never will be." When a republic comes to birth, it is the leaders who produce the institutions. Later~ it is the institutions which produce the leaders. The question - where are the leaders of tomorrow? - can only be answered by the other question - where are the nation-building institutions which can produce the leaders of tomorrow.  Do we have educational institutions which aim at generating excellence? - institutions which are equipped to produce "movers of people, mobilizers of opinion" - integrated personalities whose minds, hearts and character have been developed in the noble traditions of our invaluable heritage?  Education today is in total disarray in our country. The ministry of education is considered a minor cabinet post which reflects a serious misunderstanding of the pivotal role of "human" capital in taking a nation to great heights. We have failed in imparting value-based education to our youth which I was fortunate in receiving both as a student and in the home. The result is that India which "should have led the world in life-nurturing ideas, is being led by the crass materialism of others."  We are quite right in making constant endeavours to raise the standard of living of our people. But the standard of life is even more significant than the standard of living. If we lose our sensitivity towards the quality of life, it can only mean that while our knowledge increases, our ignorance does not diminish.  What we need today more than anything else is moral leadership at all levels. It is particularly essential in the field of education - moral leadership founded on courage, intellectual integrity and a sense of values. We, the citizens of Maharashtra, are very fortunate that we are living in a State which has produced some of the greatest Indians of the last hundred years - Dr. Dadabhai Naoroji, Sir Pherozeshah Mehta, Mahadev Govind Ranade, Bal Gangadhar Tilak, Gopal Krishna Gokhale- all of whom had the distinction of passing through the portals of this great University. They lived their lives in the service of the country and its people. I am sure none of the above eminent Indians, in their wildest nightmares, would have ever thought that India would reach such a low level of degradation and corruption as it has reached today fifty years after attaining independence - the lowest level in its entire history of five thousand years.  A regenerated secular India would have been the greatest monument to their memory.  I can only say that just as we do not deserve our sublime Constitution, just as we do not deserve to have great leaders like Mahatma Gandhi, we did not deserve the galaxy of Indians mentioned earlier, who gave of their lives and of their selves in the service of the country. _Previous musing: [THE ROLE OF JUDICIARY IN PARLIAMENTARY DEMOCRACY](https://indianliberals.in/content/the-role-of-judiciary/)_ --- ## [Musing] Voltaire On Trade URL: https://indianliberals.in/musings/voltaire-on-trade/ ### Body The following is an excerpt from Voltaire’s essay “On Trade” from Letters Concerning the English Nation, a key work from the Enlightenment period. Known for his sharp wit, the observations of the satirical polemicist are just as provocative and relevant in the 21st century as they were in the 18th. In France the Title of Marquis is given gratis to any one who will accept of it; and whosoever arrives at Paris from the midst of the most remote Provinces with Money in his Purse, and a Name terminating in ac or ille, may strut about, and cry, Such a Man as I! A Man of my Rank and Figure! And may look down upon a Trader with sovereign Contempt, whilst the Trader on the other Side, by thus often hearing his Profession treated so disdainfully, is Fool enough to blush at it. However, I cannot say which is most useful to a Nation; a Lord, powder’d in the tip of the Mode who knows exactly at what Clock a King rises and goes to bed; and who gives himself Airs of Grandeur and State, at the same Time that he is acting the Slave in the Anti-chamber of a prime Minister; or a Merchant, who enriches his Country, dispatches Orders from his Compting-House to Surat and Grand Cairo, and contributes to the felicity of the world. --- ## [Musing] War Between Opposing Ideologies URL: https://indianliberals.in/musings/war-between-opposing-ideologies/ ### Body The founding father of Malaysia, Mr Tunku Abdul Rahman saw the border war as a struggle between communism and democracy. According to him, Chinese aggression towards a large democracy like India was an exercise in humiliating India. The humiliation was meant to serve as a lesson for other Asian countries. _In wake of the 1962 Sino-Indian war, the lack of proactive support from the Afro-Asian block put a question mark on Nehru’s pet project of Non-Alignment for its failure to serve the national interest. The few voices of explicit support, however, included that of the Malaysian Prime Minister, Tunku Abdul Rahman. The founding father of Malaysia, Mr Rahman saw the border war as a struggle between communism and democracy. According to him, Chinese aggression towards a large democracy like India was an exercise in humiliating India. The humiliation was meant to serve as a lesson for other Asian countries. Recognising the threat of communist advancement in Asia, Mr Rahman explicitly linked the fate of Malaysia’s democracy with that of India. He also took the initiative to set up a wartime donation fund to aid India in the war effort._ _Produced below is the November 10, 1962, radio speech that Mr Rahman delivered over Radio Malaya and was republished in the Freedom First magazine._ When I was in India, the border trouble blew up and it caught the Indian Government and the Indian people by surprise. They never thought that Communist China, whose cause they have been championing in the United Nations from time to time, and whose occupation of Tibet they have tolerated without a murmur of disapproval, should have turned against them without a word of warning and without rhyme or reason. To me, it came as no surprise. I told my Indian friends when I was there that Malaya had 12 years of emergency because of the acts of terrorism by the communists. After the first election, even before we were independent, I met the communist leader, Chin Peng, and pleaded with him to give up the struggle as we were approaching independence. He agreed to stop all hostilities as soon as Malaya gained independence from the British and as soon as my appointment as Chief Minister turned to Prime Minister. He tried to convince me that he was fighting not against the Malayan people but against the British to end colonialism and bring freedom to the Malayan people. I myself metaphorically speaking, saw him safely into the jungle, and gave a tacit order that in no circumstances should Chin Peng be hurt and if he were captured his life would be spared as I admired his honesty and sincerity. It was through him I learnt that communism will tolerate no other ideology or “ism”. I told him before we parted that his ideology and mine did not agree as I believe in a democracy which means complete freedom. Between us, there could be no pact, either he triumphed, and I was vanquished or more likely than not, he would be vanquished, and I would triumph as I was sure the Malayan people were with me. _The original text can be accessed _[_here_](http://www.freedomfirst.in/uploads/issues/pdf/127.pdf)_._ _[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context._ Read more: [Road For LGBTQ+ Community In India Is Long And Uphill](https://spontaneousorder.in/road-for-lgbtq-community-in-india-is-long-and-uphill/) --- ## [Musing] Wastage in Public Sector Enterprises URL: https://indianliberals.in/musings/wastage-in-public-sector-enterprises/ ### Body This is an excerpt from an article written by M A Venkata Rao for the September 1958 issue of The Indian Libertarian Journal. In the article, Mr Rao explains how Marxist ideas have corrupted public discourse in favour of statist interventionism and emphasises the need for intellectuals to seek and propagate the truth behind harmful policies to purify public opinion. “But in addition to such academic functions performed by trained persons in existing institutions, there is a dire need for a group or groups of thinkers who will devote themselves to applying pure thought to the stream of ideas coursing through the public mind, influencing public policies and creating dominant centers and streams of tendency in ideas. The climate of thought and opinion, imagination and sense of values in which the modern world lives has been the creation of Eur-American experience and thought through the centuries. India has taken this body of ideas and values over into her social life and plans of reconstruction without proper assimilation. Indian thinkers have no doubt done a certain amount of thinking about social problems. But it is all too little and too superficial. It has not enabled Indians to relate the new ideas to their own experience today and their inherited traditions and standards of judgment and values. Hence we find hasty policies being introduced by the ruling group. During the life of Gandhi, older ideas of life’s values were predominant though he stimulated much thought on all matters of current reconstruction. But today we find the current of _Leftist thought_ dominating everything and forcing the pace in directions that have already produced a reaction in Eur-america and are under strong criticism. We are taking over the cast-off clothes of the West!…” _Access the full document [here.](http://v2.indianliberals.in/~_admin/pdflanguage?id=654359818.pdf)_ _First Published in The Indian Libertarian – September 1958_ _Other editions of the publication can be accessed at [Indian Liberals](http://indianliberals.in/index), an open, multilingual digital archive committed to preserving liberal voices in the Indian public sphere._ --- ## [Musing] What is Fascism? By Minoo Masani URL: https://indianliberals.in/musings/what-is-fascism-minoo-masani/ ### Body _The following is a short article written by M.R. Masani and  published in the February 1975 issue of the Freedom First Magazine. Minoo Masani discussed the tenets of fascism, its pre-requisites and the various nuances under which it works. Masaani's reflections on Fascism are timeless and are relevant to the discussion surrounding Fascism today. _Writing about the so called anti-fascist conference in Patna sometime in December the leftist _Economic and Political Weekly_ wrote under the title 'Innocents at a Conference': "Thronging the venue of the conference were people ignorant of such matters as the interests of contending power blocs, of the meaning of fascism and of the import of the goings-on in the one-square-kilometre of Lalit Narain Mishra Nagar." In this context, it may perhaps be useful to delineate the essential features of fascism so that it may become easier to decide who is a fascist. Fascism is a historical phenomenon that originated in Italy under Mussolini and developed in Germany under Hitler. The essential features of Fascism may be listed as follows: Fascism attempts by the manipulation of nationalist sentiment to impose a dictatorship whose basic slogan is "One Nation, One Party, One Leader." A Fascist dictatorship and its leader are above the Law and the Judiciary is in consequence reduced to subservience. Fascism may tolerate some kind of mock Parliament which, however, is a tame instrument for rubber stamping its dictates. There can be no question of a free press under Fascism and the press is placed under heavy censorship and is prevented from providing honest reporting or dissenting comment. Opposition Parties are not tolerated and the leading opponents of the regime are deprived of their freedom. The economic expression of Fascism took the form of the "Corporate State" in Mussolini's Italy and "National Socialism" in Hitler's Germany. Capital, management and labour are all subordinated to the dictates of the Government which professes to act in the national interest. Collective bargaining and the right to strike become a dead letter and Trade Unions thus lose the very purpose of their existence, though they continue to function in name. While private ownership in Industry and Trade is not altogether abolished, Industry and Trade function under very heavy controls and all economic power is concentrated in the hands of the rulers. In an editorial article on 2nd December, 1975, the London Times, while discussing the nature of Fascism, observed: "There is therefore a characteristically corporatist transfer of rights or liberties from the individual to the corporate bodies concerned and to the state. Some people would say that this is indeed corporatism but not fascism, since fascism implies illegality. Yet if you control the State and pass laws which are binding on other people, and other laws which remove restraints on yourself, you are left with no advantage from illegality. All corporatism is oppression, because it is inherently anti-individual; in this sense, all corporatism is fascism." In such a regime, as Jawaharlal Nehru once wrote, "Fascism makes of the State a God on whose altar individual freedom and rights must be sacrificed". To justify all this, Fascism claims to have the monopoly of truth. It follows from this that Fascism hates the intellectual and culture. "Whenever I hear the word culture", said Goering, "I reach for my gun." This then is Fascism. ( The article was originally published [here. )](http://www.freedomfirst.in/issue/issue.aspx?issue=279) --- ## [Musing] Whithering Indian Urbanisation? - FP Antia URL: https://indianliberals.in/musings/whithering-indian-urbanisation-fp-antia/ ### Body Produced below is an excerpt from an essay by FP Antia titled ‘Whither Indian Urbanisation?’ published by the Forum of Free Enterprise. The author is an eminent authority on transport and urban problems. This text is based on two lectures delivered in Chandigarh, under the auspices of the Department of Commerce & Business Management, Punjab University. Antia says that India's rapid urbanisation leads to overcrowded cities, inadequate housing, and strained infrastructure, especially in megacities like Bombay and Calcutta. He highlights that effective regional planning and controlled migration are essential for improving living conditions and managing urban growth. India’s rapid urbanisation is a defining feature of its modern landscape. The 1971 census recorded 109 million people, approximately 20% of the total population, living in urban areas. While this percentage is lower than countries like the US and Japan, the sheer number of urban dwellers ranked India as the third largest urban population globally. The rapid expansion of cities, especially those with populations exceeding 100,000, paints a picture of a nation grappling with the complexities of urban growth. The number of large cities has increased significantly over the decades, from 74 cities with populations over 100,000 in 1951 to 142 in 1971. Urbanisation in India, however, is often synonymous with the growth of mega-cities like Calcutta, Bombay, and Delhi. By 1971, Calcutta housed 7 million people, Bombay 6 million, and Delhi 3.6 million. These figures, already alarming, have only swelled in the years since. The urbanisation process appears certainly to have run amuck in this country. While urbanisation promises economic development, it also brings forth severe challenges, particularly in housing. In cities like Bombay, the disparity between pucca (permanent) and kaccha (temporary) housing is stark. In slum areas, basic amenities like water and sanitation are often nonexistent or shared by large numbers of people, adding to the misery of overcrowded living conditions. For instance, the percentage of households with access to independent water taps in Bombay’s pucca areas was only 49%, while in hutment areas, the figure dropped to 32%. Such challenges are compounded by an unreliable water supply. The common sight of taps running dry even in wealthier areas speaks volumes about the infrastructure strain in these urban spaces. The housing crisis is similarly dire. In Bombay, 77.6% of households had just one room, with many families comprising three or more people living in this space. The need for basic services like proper sanitation further aggravates living conditions. A 1971 survey found that only 31% of households in pucca areas had independent water closets, while in hutment areas, this figure was an abysmal 2.3%. What then is the solution? Controlling migration to urban areas is essential. The influx of people into cities like Bombay, Calcutta, and Delhi places enormous pressure on their limited resources. Regional plans that foster decongestion through the creation of satellite towns and employment opportunities in smaller towns and villages could help ease this urban stress. Urban planning that integrates new industrial townships and prioritises a holistic approach to housing and infrastructure is key to addressing India's urban challenges. But beyond infrastructure, the ultimate test lies in the quality of life provided to urban dwellers, as urban sociologists and planners have repeatedly pointed out. A concerted effort to improve living standards in India's rapidly expanding urban centres is the need of the hour. Read the complete text [here](https://indianliberals.in/forum-of-free-enterprise/whither-indian-urbanisation-f-p-antia-1977.pdf). type=content&p=8637). Needs editorial review._ --- ## [Musing] WHAT MAKES JAPAN TICK: SOME LESSONS FOR INDIA URL: https://indianliberals.in/musings/what-makes-japan-tick/ ### Body _The following work was published as a [booklet](https://indianliberals.in/content/what-makes-japan-tick-some-lessons-for-india-by-minoo-r-shroff-october-15-1988/) in 1988 by the Forum of Free Enterprise. Authored by Minoo R Shroff, the booklet discusses the historical development in industrial and technology spaces in Japan. Outlining Japan's harmonious employer-employee relationships and government-market business relationship, the author focuses on some key learning areas for India. _Japan is one of the oldest states dating back to the later days of the Roman Empire, well before many of the countries of Europe came into existence. In fact, the power of the Court extended as far as the southern part of Korean peninsular in the fourth century.  Until the middle of last century, Japan was a very insular state. It was under Emperor Meiji in 1868 that the country broke off from the old shackles and entered a new era. This is why it is called Meiji Restoration and not Meiji Revolution. The Restoration marked the turning point between feudal and modern Japan. One aspect which clearly differentiates the Meiji Restoration from the revolutions of modern Europe and the 1911 Revolution in China is that, instead of overthrowing the traditional monarchy, it restored it to power.  The Meiji Government devoted its energies for the development of industry with focus on import of advanced technologies from the west. It abolished the various feudal trappings- ranks, titles and classes, thus declaring all men equal in the eyes of law. The Government also established a modern school system with elementary education compulsory.  The Second World War was indeed a most traumatic experience for Japan. It was the first experience the Japanese had of defeat by a foreign power and the occupation of their country by alien armed forces. In fact Japan’s victory over Russia in 1904 when it overwhelmed the formidable forces of the Czar by deploying submarines, was a reflection of the technological and industrial capabilities Japan had acquired at the turn of the century.  **PHYSICAL ENVIRONMENT**  Japan is a long strip of land stretching 3,000 kms. from the north to the south. It embraces every conceivable climatic zone and is subject to hostile weather conditions like typhoons, cyclones, tidal waves and earthquakes. Consequently, the people have developed an immense capacity for combating the vicissitudes of nature and in the process have acquired great survival capability.  Japan has very limited arable land. In area, it is comparable to the state of Maharashtra with twice its population. However only 27% of total area is available for development, 15% being used for cultivation and 12% for industrial, commercial and domestic purposes. Naturally, land prices are prohibitive even by US and European standards. Barring water, the country has no natural resources worth the name. It has some coal deposits but the annual output is barely 18-20 million tonnes, which is sufficient to meet one fifth of its requirements. It is dependent on imports for as much as 90% of its energy needs and almost entirely for all raw materials and minerals. One third of its food requirements has to be imported, it being self-sufficient only in rice and fish.  The foundation laid for heavy industries like steel, engineering and chemicals before the Second World War provided the base for massive defence build-up. It also helped Japan in deploying a reservoir of technical skills.   The Allied occupation of Japan under General MacArthur led to considerable democratization of the country. The Zaibatsus which had held complete sway over practically all important economic sectors - trading, banking and manufacturing were dismantled and forced to unload their shareholdings. The Zaibatsus were also responsible for the present widely prevalent system of lifetime employment. However, its impact was totally onesided with employees committed to serve for a lifetime while the employers reserved the right to fire them.  The disbanding of Zaibatsus was accompanied by major land reforms and heavy taxation, the object being to usher in a more egalitarian society. There was also a new deal for labour which made it possible for them to get organised at the same time, making it virtually impossible for, industry to dismiss them.  **ATTITUDE TO WORK ** One of the striking features of the Japanese scene is their attitude to work. For an average Japanese work takes precedence over family, leisure and other creature comforts. This characteristic emerges from the social and spiritual ethos of the people- a degree of reverence for elders and for authority which is instilled right from childhood, both at home and school. It has had a traumatic impact on many individuals creating serious psychosomatic problems. This trait, however, is changing perceptibly with growing affluence- particularly among the growing tribe of young corporate executives and professionals with large discretionary incomes. **HARMONIOUS RELATIONS ** Japan went through serious industrial relations problems immediately after the war, but from this emerged an amazingly harmonious industrial milieu. Union-management relations in Japan are extremely cordial. There are, of course, problems and even strikes, but the interest of the enterprise is kept uppermost by the workers. They do their best to ensure that production is not lost at any cost even while striking.  This understanding has been a process of evolution and has found root in the fact that the unions are worked largely at enterprise level which in turn come together under an industrial federation of labour unions. These federations are further united to form joint organisations of which there are half a dozen. The federations set the guidelines for demands to be made for improvement in wage scales, benefits and working conditions and they also decide on campaign strategies. In certain industries, negotiations are held at industry level with the representatives of both labour union federations and employers' organisations participating. The demands made by the unions are generally moderate and reasonable and negotiations are conducted in an atmosphere of mutual trust. Unions respond very positively to the efforts made to improve productivity through automation and robotization. An average employee puts in 10%-20% more hours of work than his counterpart in the US or Europe. He has experienced his real income go up each year thus increasing his purchasing power enormously over the last two decades.  As a nation Japan is wedded to the philosophy of keeping the unemployment rate as low as possible. The national unemployment rate has hovered between 2.2% to 2.9% in recent years. This has been made possible as a result of close understanding between unions and management and the perception of shared sacrifices by all, particularly during periods of business recession. ·  On their part corporate managements adopt a highly enlightened approach and are known to be very sensitive to employee needs.  While the welfare system run by the state is modest by US or European standards, the employers have been known to be quite generous in providing two annual paid holidays, generally of ten days each, holiday homes and payment of bi-annual bonuses which range anywhere between three and six months' wages. The large lumpsum bonus payments inject substantial discretionary incomes and manifest themselves in increased expenditure on leisure and travel (both within the country and overseas) especially among the younger generation.  The lifetime employment concept which is often referred to does still exist, though it covers less than one fourth of the total employed population and is prevalent only in the larger companies. This ensures security and stability to employees; there is, of course, no absolute guarantee against dismissal in extreme cases. The Japanese system of management lays great stress on seniority, though merit is increasingly getting greater weightage in promotions. Wage increments also taper off with age. The ·differential between the maximum and minimum salaries in Japan is less than 10 to 1, far lower than in the other industrialised countries. Besides, top executives are not eligible for bonuses, stock options or golden parachutes. Mobility is now rising particularly amongst the qualified youth especially in areas such as financial services, computer software and other hi-tech operations.  The normal retirement age is 55, though this is not observed in the case of senior and top management personnel. Managers are generally not retrenched but absorbed in staff functions in the same company or provided openings in associate companies. When very senior personnel are retired, they are retained as advisors and counsellors and their advice is highly valued.  One remarkable factor of the Japanese industrial scene is that the employers perceive employees as associates. This is because, whenever companies experience serious problems or go into losses, the prescription for saving on costs or retrenchment tends to cover all employees - starting from the very top.  **GOVERNMENT RAPPORT WITH BUSINESS ** Since 1955 Japan has had one party in power, the Liberal Democratic Party. The Party has four major factions representing different interest groups. However, it is basically conservative in its economic outlook and has always enjoyed the close support of like minded bureaucrats and. businessmen.  Business and Government have worked in very close cooperation in Japan as integral parts of society and have not taken adverserial postures. Japan has a very strong federal organization of employers called Keidanren. This body projects unified thinking of business. It is widely respected for objectivity and enjoys close rapport with Government. In fact, it exerts an influence over public policy that business organisations in other countries can only envy. However, there is a growing feeling that it is too staid and needs to be rejuvenated in keeping with the fast changing industrial profile of the country.  **RESOURCES CONSERVATION** In view of the total dearth of resources and its consequent vulnerability in the event of any global hostility, Japan has been obsessed with the need to conserve. Hence, while selecting technologies or manufacturing processes, Japan has always opted for those which entail minimum use of resources. This is also the reason why it has excelled in miniaturisation.  Being totally devoid of petroleum resources, the five-fold hike in oil price in 1973 came as a bolt from the blue. National attention was immediately focused on exploring ways and means of how the use of energy could be minimised, the use of petroleum conserved and alternative sources of energy developed. As a consequence, Japan has now developed technologies and processes which are among the most fuel efficient in the world. The most notable success has been in the area of steel and automobiles. Japan imported 5.3 million barrels a day in 1979. In the 1979-85 plan, it was projected that it would be consuming between 6.3 and 6.9 million barrels a day in 1985 and assumed the price of crude as US$ 50 in yen equivalent terms. In actual fact, Japan's current consumption of oil is well under 5 million barrels a day with the price ruling at US $ 13 per barrel. Consequently, the oil import bill currently is less than one half of what it was in 1980 in US $terms and much lower in Yen terms, a major contributing factor for the enormous trade surplus.  **SAVINGS ** Asians as a race are generally thrifty by temperament. However, Japan takes the cake for having recorded the highest rate of saving in the last three decades averaging over 30% of GNP with a peak of 35% in the 1960's and 1970's. Out of this, personal savings have been between 16% and 20% of GNP. Personal annual savings currently exceed US$ 500 billion. Banks and financial institutions are by far the largest mobilizers of savings. The reasons behind the very high rate of saving in Japan, as compared to Western Europe, and more particularly the US, are the relatively early retirement age, modest welfare facilities provided by the state, longevity and incredibly high cost of housing. Besides till March 1988, the fiscal structure had provided  considerable inducement for savings by exempting interest on deposits upto 3 million Yen anti government bonds upto Yen 3-5 million each year. This led to widespread misuse by many individuals keeping multiple accounts in different names. The deduction of interest from taxable income has since been abolished.  Interest rates in Japan are among the lowest anywhere. Savers on an average get 12.5% to 3.5% on their short term investments. With the surge in savings and the removal of tax exemption on deposit interest money has been pouring into real estate and the stock market. By 1987, Japan had the highest market capitalization in the world exceeding that of the U.S.A. Currently, capitalization is reckoned to be over $3.5 trillion, representing 41% of the world market capitalization as against only 4.6% in 1970. Yields on equities are very low, the current average being 0.7%. The P/E ratio is the highest anywhere presently over 60, with the high flyers being quoted in the range of 100-150. The wide gap between Tokyo and other leading stock exchanges in regard to P/E ratio is due largely to differences in accounting, depreciation and reporting methods. The collapse in the world stock exchanges in October 1987- affected Japan the least. The current Nikkei index is near the peak touched last year( and 30% over the December 1987 level in Yen terms.  It is an established fact that the stock exchanges in Japan, particularly in Tokyo, are fairly well regulated with the fluctuations not allowed move beyond a certain range on any day. For some years now, warnings have been sounded to the effect that the Tokyo Stock Exchange has become overheated and that there could be a crash. The very robust performance of the Japanese economy since last year, now being led by 5% plus domestic growth, does not indicate any such likelihood in the foreseeable future. There is always the possibility of a downward slide along the way but the underlying trend is upwards due to the strong fundamentals.  **PRODUCTIVITY ** Japan has clocked the highest productivity rates attained anywhere in a wide segment of industry. Between 1960 and 1980, an annual growth of 10 to 11% in productivity was achieved in transportation equipment, electrical machinery, steel and chemical industries. While the rate has slowed down considerably to 4% - 5% since 1980, it is still the highest in the industrial world. This has been one of the contributing factors to the surge in overall production witnessed in Japan and its tremendous capacity to compete in world markets despite substantial rise in wages and sharp appreciation of yen. In fact, the Japanese have displayed an uncanny capacity to adapt to the vastly changed economic environment in a relatively short period of time. Corporations in Japan believe in the continuous renewal of their facilities, The average period being 6 years compared to 10 or 12 years in Europe and USA. Being great sticklers for high quality and productivity, the Japanese have not hesitated to replace equipment which would be considered completely serviceworthy in other countries, if replacement ensured higher productivity and lower costs.  Industry has also gone in for extensive robotisation backed by controlled technology.  **TECHNOLOGY ** The Japanese have been prolific importers of technology and more importantly the greatest adapters. In all major areas where Japan has achieved a spectacular breakthrough in global markets the invention was made elsewhere- transistor in the US, quartz watch in Switzerland and semi-conductor in the US and Europe. However, despite the initial lead-time the inventing countries had, Japan converted these inventions into marketable products well before anybody else and managed to have enormous penetration. The Japanese have been late entrants in the realm of technology and hence their research 9 and development efforts are largely focused on the developmental angle with relatively less emphasis on pure research. Their thrust lies been on developing products for today and. tomorrow's market place. Japan has not followed the west in accepting that successful applications of products cannot follow without first having successful basic research.  Over the years, Japan has perhaps paid more money as patent royalties than any other nation in history. Competition among Japanese manufacturers is so fierce that it has created a new standard for fees paid for borrowing technology. Many of the leading manufacturers of the world have, therefore, flocked to Japan to sell their technologies. Given the surplus of capital and an amazing capacity to adapt, Japan has transformed imported technologies into products which have changed the lifestyles not only in Japan but in many other countries. The same situation has occurred in the field of quality control (QC) which, though developed in the US, was put to practical use and produced very impressive results in Japan. It has gone to such an extent that the Americans and Europeans now come to Japan to learn QC. With unquestioned zeal, Japan proceeded through its own process of trial and error, continually adding new innovations to evolve a QC system that is uniquely Japanese. **FACING UP TO STRUCTURAL PROBLEMS ** The spectacular success achieved by Japan has been only to a limited extent export-led, though the presence of Japanese products in international markets has become so visible. Exports as a percentage of GNP have ranged between 9% and 12%, certainly much lower than the 20%-40% of NP consistently achieved by U.K., West Germany, Belgr.um, Netherlands, Switzerland and other European countries. Nevertheless, as far as the exporting industries and leading units therein are concerned, such as steel automobiles, consumer electronics, watches and cameras, the percentage has ranged anywhere between 35% to 60%. As a result of very high volumes, extensive standardisation, high productivity and cost effectiveness, exports were very profitable for most companies till 1985. The surge in the value of yen has no doubt posed considerable problems to Japanese manufacturers despite their best efforts to cut down costs and reduce margins. It has particularly hit hard the small and medium sized units. This has resulted in major strategy changes within the country. The Government partly under international pressures has been trying to stimulate the domestic economy and encourage imports. There is also the economic compulsion to do so in view of the enormous competition posed by the emerging tigers in Asia- South Korea, Taiwan, Hongkong and Singapore. Japan imports currently items like black and white television sets, calculators and fans to meet over 50% of the domestic market.  As a result of the growing affluence, the Japanese are becoming avid consumers of high priced designed consumer products. These products are in great demand in major cities despite the exceedingly high mark-ups, resulting in retail prices being 2 to 3 times those ruling in the exporting countries. The Japanese are also taking to foreign travel with great gusto and have become an important force in world tourism. Japan is now looking increasingly to overseas locations for siting plants for three important reasons: to get over the quota and/or tariff barriers erected or being erected by many countries to ward off Japanese competition; to overcome the problem of rising wage cost at home and meeting stiff competition in several fields from newly industrialised countries (NICs) in South East Asia; and to be near to the market place and thus save on marketing and distribution costs.   In view of the large capital surpluses, Japanese overseas investments are growing. Even so, Japan is still a relatively new entrant and the manufacture of Japanese goods overseas still accounts for only 4% of total national output as compared to 18% to 20% for US. This is projected to grow to 10% by 2000 A.D.  The Japanese Constitution prohibits the country from organizing its defence forces beyond the level required for its own defence. Hence, they are termed self-defence forces. Japan's expenditure on defence has been by far the lowest for any major country, an average of 0.8% of GNP till the current year when it is being raised to 1.0% as against 4%-7% for Western Europe and US. As a consequence, Japan has been able to channelise a much larger percentage of its savings for economic development and attain the highest level of growth in the industrialised world. However, pressures are building up for Japan to assume a larger defence burden.  **SOME SOCIAL ASPECTS ** Despite the economic heights attained by it, Japan does face several problems particularly social. While the average real earnings have increased more than four-fold since 1950, housing shortage is acute, particularly in big cities like Tokyo, conditions are very difficult in view of overcrowding. An average Japanese home is tiny (barely 500 sq. ft.) and incredibly expensive. Most employees have to commute to work daily involving 2 to 3 hours journey leading to strain on life. Indeed, one out of every three workers is treated for stress-related illness.  Japan has the highest longevity with an average life expectancy of 76 for males and 78 for females. The population over 60 is fast growing and a large number of businesses have to evolve strategies to cope with the ageing work force. On the plus side, as the work force ages, employees have a great deal to offer in terms of job experience and corporate loyalty. However they lack the background and the skills required for manning business men which call for newer technologies and international competitive_ strength. Hence to cope with future requirements, businesses now recognise the need for developing managerial capabilities and readapting the same to meet the emerging challenges. Instead of hiring new business graduates, many establishments are planning to secure the required personnel through hiring of experienced mid-career employees. These people are especially sought in areas such as new project development, R and D, and overseas projects.  The ageing population is making increasingly heavy demands on social welfare. Payments are expected to exceed contributions, making an increasing draft on general budgetary resources.  With enormous purchasing power in the hands of younger couples, the marketing emphasis is naturally changing fast to meet the needs of the youth.  There is a growing shift from saving to consumption. Household savings have been slowly declining and now account for 16% as against the peak of 23%. The younger generation is also acquiring taste for imported products including luxury automobiles, and travel. This year over 1.6 million Japanese are expected to travel overseas.  The middle-aged, more particularly the college educated, constitute the growing middle class with an average annual income of$ 75,000. They are becoming more conscious of their quality of life style and what they own -a marked change from the traditional frugal ethic. The national policy to encourage domestic consumption to soak up the output of the overheated economy also supports this trend. Japan is now facing increasing competition from the NICs in South East Asia. The penetration by the NICs in the main OECD markets has increased rapidly over the last 15 years. Initially the thrust of NICs was in clothing and textiles, but now it is increasingly being felt in industries like steel, ships, cars, consumer electronics, telecommunications equipment and machine tools.  **LESSONS FOR INDIA ** Japan and India have a lot in common in two respects- high personal savings rate and abundance of human skills. However, there are several areas where we have to learn a good deal from Japan, more particularly the following:  Importance of Time: To the Japanese time is money. They are extremely finicky about meeting their commitments on time. In contrast, in India, there is generally little concern for time. Work Ethos: An average Japanese takes enormous pride in his work. It is because of this that they as a nation have been able to attain high quality standards and penetrate deep into world markets. There is dire need in our country to infuse this sense of pride amongst employees at all levels.  Productivity: The Japanese lay utmost emphasis on consistently attaining the highest productivity levels possible. No wonder, Japan has emerged as one of the major competitors globally. But in India, productivity has either remained stagnant or tended to decline in almost all fields barring exceptions here and there. That is why our cost structure is so high and our products are being priced out internationally despite our relatively low wage costs.  Cost-Consciousness: With no natural resources worth the name, any waste is a matter of sacrilege for the Japanese. Hence every effort is made to conserve almost everything. Relatively India is a much poorer country than Japan, though it is abundantly endowed with natural resources. But that is no reason why we should be so profligate in their use, whether it be water or timber or electricity, or coal or petroleum. Even in the case of agricultural products there is enormous wastage for lack of adequate storage and preservation facilities. We need to become more alive and sensitive to conservation in the interest of ensuring speedy improvement in living standards.  Industrial Relations: Although Japan has a larger industrial labour force than ours, industrial relations are quite cordial. Not more than half a million man hours are lost on an average annually as against the loss of anywhere between 30 and 40 million man hours in India. A developing country like India just cannot afford this luxury. Conscious efforts to improve industrial relations through better understanding between management and labour are of the utmost importance.  Urge to Excel: As a people the Japanese have been constantly-striving to excel other countries, even themselves. This is because of the confidence gained as a result of wide acceptability of their products in almost all markets of the world. The Indians, too, had great pride in their craftsmanship once. This needs to be rekindled. To conclude, there is no doubt that, despite the current problems of adjustment, Japan will continue to forge ahead. This is because of the several innate qualities which  the nation has demonstrated over the years, the most remarkable of them being the capacity to adapt and innovate. The enormous investments made in technology development will also ensure sustained progress, though the annual growth may be relatively lower than the trend rate._Last week’s musing: [THE RETREAT FROM SOCIALISM](https://indianliberals.in/content/the-retreat-from-socialism-2/)_ --- ## [Musing] Why I Oppose Socialism - M.R. Pai URL: https://indianliberals.in/musings/why-i-oppose-socialism-m-r-pai/ ### Body _Many prominent Indian Liberals challenged the Socialist leaning of successive Indian Governments. They did not just critique the philosophy of Socialism but also presented a better approach to solving India's problems. Produced below is a piece published in the February 1970 edition of the Freedom First Magazine. The author Mr. M.R. Pai presents a coherent and comprehensive case on his opposition to Socialism. _Socialism is fashionable in India today, like sideburns and tight pants in her cities. The competitive race that politicians professing socialism are running with each other does not, however, mean that socialism is good for India. Nor, that it would endure. As a citizen of Indian democracy, I oppose socialism mainly on four grounds.  First, socialism cannot solve our problem of poverty. With socialism, India would slide from poverty to pauperism. Second, it would lead to the destruction of individual liberties. Our democratic constitution would disintegrate under the pressure of socialist policies. Third, socialism would result in glaring inequalities between the rulers and ruled and lead the country away from the path of social justice. Finally, it would come in the way of India’s greatness while destroying her noble traditions.   Since there is considerable confusion even among socialists on what it means, it is better to define socialism. Broadly, its objective is to create a society of the free and the equal. This is also the objective of several other ideologies and non-socialists. The crucial difference lies in the methodology of socialism. The methodology is (a) Central Planning of economic activities by the State, and (b) State ownership of means of production, distribution and exchange.  This methodology has failed elsewhere. It will not succeed in India either.  Opposition to Central Planning is generally confused with opposition to all planning or all state intervention in economic affairs. It is dubbed as a plea for _laissez-faire. _Far from it. The modern state has to _plan_ its own duties and obligations towards citizens. For instance, defence of territorial integrity and freedom; maintenance of law and order; provision of infrastructure facilities (such as honest and good administration, roads, ports, etc) which cannot be provided by citizens by themselves but without which there can be no economic activity; provision of basic amenities like drinking water, public sanitation, education, regulation of private enterprise, a stable currency, an institutional and legal framework for economic transactions etc., are obligations of the modern states. They have to be planned and provided for.  In place of these basic functions, which would keep an underdeveloped country’s government fully occupied, central planning has come to mean high-cost steel plants and other inefficiently run state enterprises and a tangle of monopolies or near-monopolies in insurance, air transport, banking etc. impeding economic activities of citizens and rapid economic growth.  State ownership through a Public Sector and nationalisation of private industries is no longer acceptable even to socialists in countries like Sweden and Great Britain, which have had socialist governments. In Sweden, over 90 per cent of the economy is in private enterprise. Yet Sweden has had socialist rule now for about 40 years! Most European Socialist have found that state ownership does not transform the economy into a paradise of plenty. In state enterprises, technological and managerial problems remain much the same. Production and productivity, the very basis of a better life for all, tend to fall precipitously. If Parliamentary control over the Public Sector is sought to be made effective, efficiency falls. If autonomy is granted in the interests of efficiency, then the bureaucracy in charge of the Public Sector runs amuck, enjoying power without accountability. Individual freedoms, including trade union rights of employees, are progressively destroyed. Poverty, our basic economic problem, can be solved quickly only by releasing the creative energies of the people. Freedom, not statism, is the answer. Socialists in India have developed a vested interest in poverty, just as communists have in disorder and chaos. The prescription of both will not eliminate poverty; it will add the tyranny of Authority to the tyranny of Poverty. Moreover, socialism in India will lead the country from poverty to pauperism because of the tremendous waste of scarce resources. The Public Sector, with its record of losses (Rs. 35 crores on an investment of Rs. 3,200 crores in central “running undertakings”) and misdirection of scarce resources into capital intensive, low-employment potential industries will aggravate Indian Poverty. Other consequences of this statism are food problems and inflation (i.e. a cruel tax on hard-working fixed income groups). Neither are calculated to eradicate poverty, nor promote social justice.  If the economy and people of India have survived the shock of socialist economic policies over the past 15 years, the reasons are to be found in the fortunate circumstance of a good sector of the population being beyond the pale of monetisation (and consequently the mischief of several government’s economic policies) and the immense capacity of the people to circumvent the plethora of impractical laws imposed on them by the rulers in the pursuit of socialism. As an old saying attributed to a farmer says: “What I eat today is mine: what I save for tomorrow will go to the king.” Socialism was described by someone as the bridge of totalitarianism. Socialists are verbal champions of freedom, but their actions destroy freedom. Thus, they pave way for totalitarianism.  With increasing state ownership, and control over the economy, Trotsky’s warning will come true: Formerly the rule was that he who does not work shall not eat, but now the rule is he who does not obey shall not eat! There need be no surprise over the totalitarian trends in our public life on the heels of bank nationalisation and other socialist measures. Threats to the freedom of the Press, the right to property, to every industry and trade, to sacred treaty obligations, and misuse for personal and factional ends, demand for a “committed bureaucracy” which will be followed by a demand for “committed armed forces” (in other words, “commissar” system) are inevitable first steps in the march towards a full-fledged socialist state. Destruction of family and religion would complete the process of transformation.  It is seldom realised that socialism is not only the enemy of individual freedoms- the socialist's rulers always having the uncontrollable itch to control everyone except themselves- but also specially so of farmers, middle classes and generally the small man. This is necessary because state ownership has a tendency towards bigness for sake of bigness, and for easy control over all the rules that bigness affords.  The developments in the banking field illustrate this. When we became independent, there were about 740 banks. Most of them were catering to the needs of small men. They were systematically destroyed by mergers and dissolutions until barely 70 banks were left at the time of nationalisation in 1969. Except in the case of a few weak units, this process was unjustified, and small people were adversely affected. Between 1960 and 1967, over 200 banks were thus destroyed. Now, when. Seven-eighths bank is appropriated by the government through nationalisation, and the trend towards centralisation and monopoly has been initiated, there are tears for helping the small man through these huge nationalised banks!  To cover up this thirst for bigness and monopolies in the state sector, there is a lot to talk about by socialists about monopolies and Big Business in private enterprise. Truth is of little consequence. A government-appointed commission could not find any monopolies in private enterprise. An intricate licensing policy of the government has prevented competition which is the best anti-dote for any tendencies towards monopolies in the economy. As for bigness, not a single Indian private company figures in the list of the world’s top 200 firms. A small country like Japan has 45, while a huge country like India, ranking 15th in national income in the world, has no private enterprise big enough to figure in the list!  The socialists always speak of social justice and set out to do things that destroy it. Take equality for instance. Equality of income and wealth is a mirage except in a stagnant society or a colony of slaves. The essence of equality is equality before the law. In the socialist state, it is destroyed. The rulers and the ruled become two distinct classes, with the same set of laws administered with a split personality. Socialists who preach equality of income and ceilings on income have no hesitation in enjoying huge perquisites at public cost. Central ministers who draw barely Rs. 2500 a month and enjoy perquisites worth Rs 17,000 a month are but one example of this conspicuous hypocrisy. Legislators are not much behind in the race for perquisites. Under socialism, professional politicians evolve a perquisites society and destroy equality before the law.  Equality is destroyed in another way. The huge and growing army of government servants is denied access to political power. The area of decision-making left to the citizens is progressively reduced and there is a concentration of decision-making in a few political hands. Social injustice is perpetuated in yet another way. The emphasis on equality of income and cry for ceilings result in similar rewards to the deserving and undeserving alike. After 50 years of bitter experience, the Soviet regime is realising the necessity for income differentials. As one Soviet economist, Prof. Alexander Birman, put it: Why should “loafers” get the same pay as good and efficient workers?  Socialism has introduced in Indian society the poison of class welfare. Big against small business, businessmen against the public, urban workers against farmers, landless labour against peasants - all are taught to hate others instead of creating economic opportunities for all and building bridges of understanding. The professional politicians are not aware of the consequences of setting a placid society on fire. When the day of disillusionment with socialism comes, as it is bound to, nobody can save these politicians from the fury of the masses which have been systematically taught to hate. The sight of legislators jumping from windows to escape the wrath of the ill-treated police in one State is only a warning to be heeded by all politicians of what happens when class warfare introduces distortions in society.  The cumulative effect of all these things is to place a premium on sub-mediocrity and to destroy excellence. Is it any wonder that with vigorous socialist measures, a larger number of people are running away from this country? In the phenomenon broadly known as the Brain Drain, during 1968-69, about 9,500 persons left this country. How many socialists politicians have left this country for good? Certainly not when they can live as the self-appointed sons-in-law of the Indian people.  A strategically located country like India, with its vast natural resources and resourcefulness of people, is designed to become a Big Power. Socialism is an obstacle in the early realisation of that supreme status because socialism will take the country from poverty to pauperism; and from freedom to slavery. But with the inevitable process of disillusionment, ultimately Indian people will reject socialism and find a philosophy more in tune with the genius and requirements of the country. Till such time, those who believe in freedom and national greatness have to fight a battle against incipient authoritarianism because socialism is indeed the Road to Disaster.  Those well-versed with organizational dynamics know that the real crisis in the rural areas is fragmentation of whatever organization that had traditionally existed. It is often not realised that break-up of existing organizational set-up generates quite a lot of tensions when compensatory new forms of organizations have not been built up. Our policy-makers and planners are so busily engaged in the process of breaking up existing organizations with least caring to provide for substitutes that many of the aspects of violence in rural areas are the conclusions of organizational break-up.  Where organizational integration has taken place in rural areas, stability has resulted and this stability has been able to cushion many onslaughts on it. For instance the best standards are possible for development when we see a phenomenon as organised as agriculture in the Plantations in rural areas. When plantations with larger and larger size developed, they generated standards arising out of orderliness and measurement that benefited everybody involved in the process of such organization. This organization has been able to provide a high degree of stability all around without in any way sacrificing equity and justice requirements. Somehow these lessons do not seem to have been learnt by the policy-makers nor by the Home Ministry when they deal with the problem of rural violence.  All vote-catching devices of radicalism can have very little significance if in actual fact the impact of such radicalism is towards break-up of organisation instead of generating or integrating organization. The present race seems to be between competitive anarchy and organisation, with the latter gradually losing the battle. The Home Ministry announcement about rural violence seems to be one more nail in the coffin of organizational development in the rural areas. --- ## [Musing] Your Prosperity Through Freedom URL: https://indianliberals.in/musings/your-prosperity-through-freedom/ ### Body _“Your Prosperity Through Freedom” was written by M. R. Pai and designed by Eric Francis. A graphic novel, it illustrates the meaning and essence of a Free enterprise–that work is not the only vital component for a prosperous economy; freedom is equally essential. Under state capitalism, the Government directs and owns all means of production, and it makes all the economic decisions without the nation’s consent. This leaves no place for individual liberty. Communist countries are the perfect example of state capitalism, where everything is directed, dictated, and managed by the Government. The author explains that even though socialism is minutely distinct from communism, its economic policies are similar to communist policies. Thus, the only way to have both prosperity and freedom is by having free enterprise. Free Enterprise is not reflective of an individualistic system but a society where rules and regulations are laid down by the economic representatives elected by the people. It is not against planning but asserts planning in favor of free enterprise. In such an atmosphere, the result is more industries, more employment, better opportunities for all, etc. Thus, Free Enterprise is a People’s enterprise and is the key to prosperity and freedom. _ _You can read the complete, unabridged version here [Your Prosperity Through Freedom](https://indianliberals.in/wp-content/uploads/2023/07/Your-Prosperity-Through-Freedom.pdf)___ Work–yes, everyone has got to work. But few know why. Mostly all will say that we work for a livelihood. But it is not only for a livelihood we work. - We work because it is a social necessity. Today we are fast moving towards an industrial-based society that is based on **specialization **and **division** of labor. Example 1- Pattu is a farmer who grows wheat for his use. The surplus he sells to others. He needs a pair of _chappals_, cloth, kerosene, etc., and cannot live on wheat alone. So with the money he gets from his extra wheat, he buys chappals and cloth for himself and his family.  What he buys has, in turn, been produced by specialization and division of labor. The following factors lead to the final product: labor, management, raw material, and capital. This arrangement helps to create more goods and services for all. Since everyone specializes in one particular line, he does his job very well. Alone we could never produce everything and so many things.  - We work because it gives us a sense of satisfaction (an essential element in human nature) - Isn’t this article I wrote really great! - Look what a wonderful cake I baked! - O Boy! What a wonderful job I’ve done! - We work in order to buy leisure For instance, an employee gets his privilege leave every year, holidays every week, and on festival days or days of national importance. He also gets time for himself once he completes his eight-hour stretch at work. These leisure hours he can put to any use he likes, for instance-resting, photography, music, reading, outdoor life, games, etc.  It is important to not only have work but also the freedom to enjoy leisure and to lead a life of human dignity. A society can be organized in such a way that all means of production, distribution, and exchange of goods and services are exclusively in the hand of private individuals. In the hands of the government, which means state capitalism or a combination of both, what is known as mixed economy. When the government dominates and owns all means of production, distribution, and exchange, then there is **State Capitalism** as in communist countries. This means that, in effect, the state is above the individual. The government directs all economic activities without the consent of the people. This leaves no choice for individuals– - in choosing their work - spending their money - in what they buy - in putting their leisure to activities of their choice - neither have the liberties Leon Trotsky, the communist leader, after seeing communism in action, said: “Formerly the rule was- he who does not work shall not eat.’ Now the rule is– he who does not obey shall not eat.” Good examples of this state of affairs, viz. of **State Capitalism,** are communist countries. - No rule of law–the government is the law - No freedom of association - No freedom of expression, no free press - Strikes banned. No choice of jobs. - Buy what is sold at prices dictated by government factories - No private property but collective farms and state factories - No freedom of thought - There are no parties except one and no free elections Socialist countries, in their end result, are no different from communist ones. Like communism, socialism is a collectivist ideology. Socialism professes faith in individual freedom. But its method of promoting it by nationalization of private industries and state ownership of all means of production, distribution, and exchange led to state capitalism similar to that of a communist society. State ownership leads to state capitalism! _Previous musing: [National Priorities for 1970](https://indianliberals.in/content/national-priorities-for-1970-by-minoo-masani/)_ --- # Opinions ## [Opinion] Anandibai Joshee: First Indian Woman Doctor URL: https://indianliberals.in/opinions/anandibai-joshee/ ### Body The following essay revisits the interesting life of Anandibai Joshee. Anandibai went from being married at the age of nine by her orthodox family to becoming India's first female doctor of Western medicine. _“_In my humble opinion there is a growing need for Hindu lady doctors in India, and I volunteer to qualify myself for one” – Anandibai Joshee (Dall) Anandibai Joshee nee Yamuna Joshi was born to a Brahmin family in Kalyan on March 30, 1865. At the tender age of nine, she was married to Gopalrao Joshee, a twenty-seven-year-old postmaster who lived in Nashik. On the condition of no interference from Anandi’s family in pursuit of her education, Gopalrao Joshee married Anandi. Thus began her journey to become the first Indian woman to receive an MD in western medicine.  Hailing from an impecunious orthodox family, Joshee’s entrance into Anandi’s life became the only source of her education. While Anandi’s father enrolled her in school, the kind of education she received owing to Joshee’s connections was not something her father could have provided even if he wanted to. This could be the reason why most of Anandibai’s biographers have indulged in painting Joshee as the hero of her life. Indeed, Joshee became an important medium through which Anandi set on a journey of higher education and enlightenment. It would, however, be wrong to not view Anandi in the context of her developing womanhood, liberal thinking, and fragmented feminism.  In pursuit of better educational opportunities, Anandi and Joshee frequently moved places within India. From Alibag to Bombay to Bhuj and then to the Bengal Presidency. In all these places, Anandi received heavy backlash from society for pursuing education. In one of her letters, she explains the backlash in detail,  “The Babus lay bare their levity by making fun of everything. "Who are you?" "What caste do you belong to?" "Whence do you come?" "Where do you go?" are, in my opinion, a question that should not be asked from strangers” (Dall). Even amidst societal distress,  Joshee was hell-bent on sending Anandi to America for higher education. Anandi shared her husband's ambition but for her independent reasons. She was determined to go to America for a medical degree as she believed in the urgent need for an Indian female doctor. She also believed that female doctors were better suited to understand the plight of female patients. Female patients were shy and would seldom consult male doctors. Anandibai’s aim to produce a safe space for women to avoid health repercussions was therefore an important and inclusive measure in healthcare.  In the process of finding ways to go to America, Joshee took the help of various Missionary reviews in America. It was a correspondence published in a review for the same that caught the eye of B.F Carpenter, a Philadelphian missionary. Carpenter was persuaded to offer her full support to Anandibai in her pursuit of a medical degree. In India, their ambition resulted in vehement societal opposition. In 1883, Anandibai successfully overcame the opposition through her cogent public address at Serampore College, West Bengal.  An excerpt from her speech,  “I go to America because I wish to study medicine. I now address the ladies present here, who will be the better judges of the importance of medical assistance in India. I never consider this subject without being surprised that none of those societies so laudably established in India for the promotion of sciences and female education have ever thought of sending one of their female members into the most civilized parts of the world. In my humble opinion, there is a growing need for Hindu lady doctors in India, and I volunteer to qualify myself for one” (Dall).  In 1883, with Carpenter’s help and escorted by American missionary women, an eighteen-year-old Anandibai reached America and joined the Women’s Medical College of Pennsylvania. In 1886, Anandibai received her medical degree thus becoming the first Indian woman to successfully receive an MD in western medicine. Owing to her degrading health conditions, Anandibai scrapped the idea of spending another year in the US to gain experience and moved to Kolhapur where she was appointed as a lady doctor. Unfortunately, due to her deteriorating health, Anandibai was unable to start her practice and passed away soon after returning to India on February 29, 1887. Anandibai Joshee maintained a patriotic and nationalist stand in most of her public addresses.  She did not shy away from preaching the ideals of a devoted wife. She, alongside her husband, was also an ardent supporter of child marriage. However, in her many private letters to Carpenter, with whom she had developed a deep familial bond, she wrote about the gender discrimination she faced throughout her education. Her privately expressed views acknowledged women's subordinate role in marriage, obstacles in women's education, and lack of healthcare infrastructure for and by women. Further, her stance on healthcare for women was something she never shied away from, both publicly and privately. Despite being grateful to her husband,  she was critical of his ways which involved emotional and physical abuse, the scars of which had forever been imprinted in her heart. She was also extremely critical of son preference among Indian parents (Dall).  Anandibai’s critical liberal thinking on varied social issues travels back and forth between a sense of internalised loyalty towards her culture and the enlightenment she received through her education which allowed her to question everything around her. This brings into question the very nature of critical thinking. Are views only taken into consideration when they are explicitly expressed or do private views also find a space in intellectual liberal discourse? Women throughout history have been silenced and denied basic rights which have led to their absence in public life. It becomes necessary to acknowledge the liberal standpoints around marriage and education that women like Anandibai developed even if they were formed in a private setting. The fragments of these thoughts found their way in her public statements that demanded social reforms. Not only that but it also led a young Anandi to travel overseas alone to an alien land and culture and gain a medical degree amidst all odds.  Besides being an inspiring historical figure, Anandibai raised important questions about the parity of women’s views and opinions between public and private life. She encourages one to pick on the fragmented agency that women were allowed in societal structures and analyse the independent critical liberal thinking that women developed. It is only when one acknowledges and works directly towards decreasing the said parity can we have more liberal thinkers.  Even if Anandibai never got the chance to practice her education, she left a legacy to be remembered for eternity. Not only as a pioneer of women's education but also as a developing, transitioning critical liberal thinker. **References ** Dall, Caroline Healey.[_The Life of Dr. Anandabai Joshee: A Kinswoman of the Pundita Ramabai_.](https://collections.nlm.nih.gov/catalog/nlm:nlmuid-55130700R-bk) Boston: Roberts Brothers, 1888. Print. Joshi, [Through a Changing Feminist Lens: Three Biographies of Anandibai](https://www.epw.in/journal/2014/33/perspectives/through-changing-feminist-lens.html). "Prachi Gurjarpadhye." _Economic and Political Weekly, Vol. 49, No. 33 _(August 16, 2014): 37-40. Print. Kosambi, Meera. "[Anandibai Joshee: Retrieving a Fragmented Feminist Image](https://www.jstor.org/stable/4404856)." _Economic and Political Weekly, Vol. 31, No. 49._ (Dec. 7, 1996): 3189-3197. Print. --- ## [Opinion] B.R. Ambedkar on Justice Ranade, Social Reform and Failure of Indian Liberalism URL: https://indianliberals.in/opinions/b-r-ambedkar-social-reform-failure-of-indian-liberalism/ ### Body _Ambedkar argued, that the leading liberal figure reposed his faith in Congress, effectively paving way for a single party hegemony. Thus the collapse of the Liberal party was ‘really a disaster to the country’ because ‘the rule of a single party is fatal to Popular Government.’_India’s anti-imperial struggle against British colonialism constituted of many voices of the nation. Given the sheer geographical and social diversity of India, it only made sense that the national political aspirations took different expressions. Some forms of activism went beyond a narrow political demand for self-rule to fashion a broader conception of freedom and dignity. Prominent strands along this line consisted of moderate liberals and radical Dalit leaders. Differing in their modus operandi and view of the role of state, both constitutionalist liberals and subaltern leaders recognized the need to reform Indian society from inside to enable a ‘true’ sense of freedom for Indians. These two largely marginalized visions of nation overshadowed by the big tent Congress nationalism were brought in conversation in a speech by Bhimrao Ambedkar. Delivered in 1943 at the invitation of the Deccan Sabha to commemorate the 101st birthday of the liberal leader Mahadev Govind Ranade, Ambedkar’s speech discussed a host of issues relevant for the prevailing political climate, Ranade’s contributions, and the larger cause of social reforms. The speech was supposed to be an assessment of Ranade’s legacy, but it received widespread coverage in the contemporary press for an altogether different reason. Ambedkar’s embittered take on both Gandhi and Jinnah as a sideway reference in the speech opened him to criticism in the Indian press. Ambedkar defended himself on the ground that his love for India explained his dislike for the two giants who were no greater than the country. To me, though, the relevance of Ambedkar’s incisive speech lies in the meat of the matter which shall be discussed below. Bereft of any personal connection with Ranade, Ambedkar relied on the Great Man theory as propounded by Carlyle to assess him. Ambedkar’s view of history did not deny the role of structural forces in shaping human history but also underlined human agency in responding to structural constraints. For Ambedkar, Ranade’s sincerity, intellect, and commitment to social reform made him worthy of the epithet. Ranade’s recognition of ills in the Hindu society was complemented by his tireless efforts to bring change. Like a marathon sprinter, Ambedkar recalled, Ranade would conduct meetings, arrange missions, deliver lectures, publish articles, give interviews, write letters, establish societies, and found journals, all in pursuit of the noble cause. To give a more permanent footing to his social reform initiatives, Ranade founded the Social Conference, a pan-Indian body pursuing the agenda. The body operated as an adjunct to the Indian National Congress which in early years kept itself distanced from matters of social reform. Ambedkar’s appreciation of Ranade and by extension other contemporary liberal social reformers stemmed from his own preoccupation with the cause of Dalit dignity. Having borne the brunt of caste discrimination, Ambedkar was well aware of the tyranny of society which to him was more pernicious than the tyranny of the state. Consequently, his vision of individual freedom saw a role for the state as a counterbalance to the social sanction for untouchability, reflected later in constitutional sanction against untouchability and provision for affirmative action. Moreover, the stiff opposition faced by Ambedkar from social conservatives perhaps made him recognize the struggle of liberal social reformers who were in the same position in the late 19th century. Ambedkar argued that a reformer challenging established social mores is even more courageous than a political prisoner because the reformer lacks support and praise otherwise received by political activists. In line with Ambedkar’s argument, Ranade and other like-minded reformers faced opposition in the western province, not just from the masses but also from conservative thinkers like Bal Gangadhar Tilak and Vishnushastri Chiplunkar. In Bengal province, things were no different for liberal-minded reformers like Raja Rammohan Roy, Ishwar Chandra Vidyasagar, and Henry Derozio who were opposed by the likes of Raja Radhakanta Deb and his Dharma Sabha. Ambedkar recognized two different strands within the conservative intelligentsia. Activists like Chiplunkar were orthodox in belief but kept away from politics. They believed in a stylized vision of Hinduism serving as a guiding mechanism to arrange the society. Ambedkar in his speech tore down this conservative social vision by pointing out the graded hierarchy of caste system which would hollow out any society instead of infusing it with a sense of national unity. The idealistic individualism of Hindu philosophical schools, Ambedkar rightly pointed out, never came to challenge the dominating hold of hierarchical caste practice. Though, one might argue that such philosophical traditions might provide an indigenous intellectual base for Indian liberals to make the case for social reforms. The other strand of opposition to social reforms came from modernist politicians like Tilak who prioritized self-rule and thus opposed any colonial state intervention in local customs. In that sense, their modernist vision prioritized political emancipation over the social. Ambedkar, of course, took exception to this view. According to him, a Jeffersonian limited state protecting the natural rights of people would not make sense in India because these rights did not exist for a vast majority of people. Thus, ‘[R]ights must exist before policing becomes a serious matter of substance.’ Moreover, Ambedkar also recognized the futility of granting fundamental rights after political independence without a profound change in social attitude. Legal provisions against discrimination would not mean much if the social conscience refuses to recognize the validity of legal rights. In Ambedkar’s assessment, India’s prevalent condition was not suitable for social democracy. Echoes of such concern could also be heard in his famous last speech to the Constituent Assembly. It was the fundamental unsuitability of India for a social democracy that necessitated the breakdown of the artificial division between social reforms and political rights. Ranade, Ambedkar, and Gandhi recognized that social reforms were a necessary precursor to a functional democracy premised on substantive citizenship. Not only did Ambedkar recognize the important groundwork laid by Ranade and Phule in this regard, but he also approved of liberal gradualism as the method to bring change. The argumentative Ambedkar though was not just all praise for Justice Ranade and liberals. Speaking in front of a largely liberal gathering, he presented a clinical analysis of the failure of Indian liberals. Indian liberalism at the time basically amounted to a bunch of elite leaders, deemed the ultimate ‘contemptible’ of Indian politics. They lacked organization, mass outreach, ideological propaganda, emotional connection, and a rallying cry. The tragedy was such, Ambedkar argued, that the leading liberal figure reposed his faith in Congress, effectively paving way for a single party hegemony. Thus the collapse of the Liberal party was ‘really a disaster to the country’ because ‘the rule of a single party is fatal to Popular Government.’ In conclusion, Ambedkar himself was no liberal. That much he made clear in the speech itself. Yet, he was able to find a lot of common ground with them. Ranade’s career and his struggle for social reform in many sense mirrored Ambedkar’s later efforts in a similar direction. The radical in him notwithstanding, Ambedkar was very much willing to admit the connection. To me, herein lies the possibility of making an alliance between the ideological descendants of Ambedkar and Ranade in ensuring individual freedom. Moreover, Ambedkar’s diagnosis of Indian liberal failure also has relevance today. The lack of mass outreach, a distaste for identity-based emotive politics, and largely elite character of liberal individuals still account for the absence of a liberal political party in India. Indian liberals might as well do better to pay heed to Ambedkar’s counsel. --- ## [Opinion] B.R. Shenoy : India's First Neoliberal? URL: https://indianliberals.in/opinions/b-r-shenoy-indias-first-neoliberal/ ### Body _Shunned by Indian planners and economists for his radical views on India’s development trajectory, Shenoy found a home among the small and closely knit free-market advocacy group in India and the vigorous transnational network of neoliberal intellectuals active mostly in the West._Bellikoth Raghunath Shenoy, the monetary economist turned public intellectual in the decades of 1950s-60s, faced marginalization in his life and a prophetic revival in the afterlife. Shunned by Indian planners and economists for his radical views on India’s development trajectory, Shenoy found a home among the small and closely knit free-market advocacy group in India and the vigorous transnational network of neoliberal intellectuals active mostly in the West. The recent revival of interest in Shenoy has undoubtedly been enabled by India’s post-liberalization moment which seemingly saw economic growth enabled by policies advocated by Shenoy years earlier. Mostly espoused by Indian neoliberals, this revival undoubtedly has a vindictive streak tinged with a sense of loss of wasted decades when Shenoy’s policy prescriptions remained marginalized.     Born in the town of Bellikoth, Shenoy turned to the Gandhian non-cooperation movement in his early youth days. During his jail stint, he met nationalist and Hindu revivalist leader Madan Mohan Malaviya and went on to join the Banaras Hindu University for higher education. Historian Aditya Balasubramanian [points](https://penguin.co.in/book/the-language-of-history/) out Shenoy’s neoliberal tendency was shaped at BHU only as he studied for an MA degree under Professor Pran Nath. Professor Nath held a Ph.D. from Vienna where Austrian economics ruled the roost. Shenoy specialized in monetary economics as he proceeded to the LSE in late 1930. At LSE, he studied mostly under Philip Barrett Whale and Theodore Gregory and graduated with an MSc thesis on central banking in India. It was at LSE that Shenoy came in contact with Friedrich Hayek who was there to deliver lectures in the wake of the Great Depression of 1929. In the great economic debate on tackling the economic slump, Hayek’s influence on Shenoy was visible in [two](https://www.jstor.org/stable/1885616?seq=1#metadata_info_tab_contents) [papers](https://doi.org/10.2307/1885190) that he published in the prestigious _Quarterly Journal of Economics_. The influence translated into Shenoy’s advocacy of price theory and market efficiency.      After his stint at LSE from where he would fail to get a Ph.D. degree, historian Aditya Balasubramanian argues that Shenoy went on to have a peripatetic career as an economist. His employers would include Rajaram College in Kolhapur; the Ceylon University College and Board of Commissioners of Ceylon Currency in Colombo; SLD Arts College in Ahmedabad; the Reserve Bank of India in Bombay; the India Mission of the IMF in Washington. In his later role as a Cold War public intellectual, he would join the prestigious neoliberal Mont Pelerin Society; contribute to the _Times of India_, the _Wall Street Journal_, _Swarajya_; dispense advice to Swatantra Party on economic matters; run his own think-tank for a while. His published writings would advance a distinctly neoliberal position which saw him ignored at home but gained him recognition in the western neoliberal circle.       The turning point probably came with his Note of Dissent to the Second Five-Year Plan Frame which he submitted as part of the Panel of Economists working on the Frame. Shenoy took a dislike to the proposed financing measures to build the industrial capacity in India. His Note argued that a high degree of deficit financing would lead to uncontrolled inflation and it would be difficult for a democratic government to usurp a large part of domestic savings. The Note happened to receive the attention of economist Peter Bauer who inducted Shenoy into the 1959 annual meeting of the MPS at Oxford. Shenoy’s charged speech on the danger of Indian planning turning into a communist specter entrenched his position firmly in the neoliberal circles. Shenoy’s cautionary vision of Indian planning, though, did not have much traction in his time as most anti-communist and statist economists and policy-makers in the US saw Indian planning as a [model case](https://doi.org/10.1080/07341512.2016.1142633) of state-led development under a democratic framework. To these influential statist opinion-makers, the Indian story seemed to follow the path of American capitalism which was nurtured by the largesse of state intervention. In any case, Shenoy’s strident posturing brought him membership to MPS; effusive praise from the likes of Milton Friedman, Friedrich Hayek, Peter Bauer, Henry Hazlitt; earned him a column space in The _Wall Street Journal_; visiting professorship to LSE and fellowship to the Hoover Institute. In the last few years of his life, Shenoy ran the think-tank called _Economics Research Centre_.                Apart from the fiscal profligacy-induced horror of inflation, Shenoy’s other pet peeve was the strident opposition to foreign aid to India which he saw as a wasteful distortion allowing Indian policymakers to get away with faulty economic policy. He had an unswerving [commitment](https://penguin.co.in/book/the-language-of-history/) to a balanced budget, rupee devaluation and export promotion, [direct cash transfer](https://swarajyamag.com/economy/how-b-r-shenoy-would-have-tackled-the-economic-slowdown), privatization of public enterprises, lower taxation rates, abolition of gold control measures, and a general approach of minimal state intervention. As a public intellectual, Shenoy’s trope to make the case for free-market involved contrasting the [postwar economic experience](https://www.libertarianism.org/publications/essays/east-west-berlin-study-free-vs-controlled-economy) of the West and East Germany under two different economic systems. Shenoy’s influence on Indian economic policy, though, remained minimal in his own lifetime. Interestingly, in a book review article, economist Jagdish Bhagwati [dismissed](https://doi.org/10.2307/2230415) Shenoy’s ‘strong ideology of the Friedmannite variety’ and saw his opposition to foreign aid as an ‘unfortunate tendency’. Further, Bhagwati argued that Shenoy’s ‘overall view of Indian economic policies is flawed seriously by his antipathy to planning _per se_.’ Published in 1969, Bhagwati’s remarks make for an interesting read today in the context of his consistent free-market advocacy and appreciation of Milton Friedman. Based on [declassified records](https://www.cia.gov/readingroom/docs/CIA-RDP86T00268R000800110008-6.pdf), though, we now know Shenoy’s views on the wasteful impact of foreign aid had some hearing in the US. A _Wall Street Journal_ article of September 18, 1959, discussing Shenoy’s Mont Pelerin speech was taken up by the National Security Council’s Planning Board for consideration on September 30. The WSJ article was circulated to the Planning Board members. It was of no use however as by 1961 the Eisenhower administration came up with an emergency aid package to India and the MPS [lost](https://doi.org/10.1080/07341512.2016.1142633) the public battle in the US. Peter Bauer’s [tribute](https://www.cato.org/sites/cato.org/files/serials/files/cato-journal/1998/5/cj18n1-1.pdf) to Shenoy recalled the prevailing hostility to Shenoy’s ideas in the Delhi School of Economics and the National Council of Applied Economic Research. However, after his death, Shenoy’s daughter, a formidable economist in her own right, [received](https://penguin.co.in/book/the-language-of-history/) a moving letter from Henry Hazlitt. Peter Bauer, of course, was and remained an [admirer](https://www.cato.org/sites/cato.org/files/serials/files/cato-journal/1998/5/cj18n1-1.pdf). Jagdish Bhagwati has tuned out to be a forceful proponent of India’s integration with the global economy. Aditya Balasubramanian, the leftist historian of Indian neoliberalism, has [published](https://penguin.co.in/book/the-language-of-history/) a comprehensive assessment of Shenoy’s career. Lastly, the [contemporary](https://twitter.com/CafeEconomics/status/952034022791655424?s=20) [admirers](https://twitter.com/kumaranand/status/605986884276215809?s=20) of B R Shenoy could be [found](https://twitter.com/dhume/status/605934182263422977?s=20) in India’s small but influential neoliberal circle. --- ## [Opinion] Babytai Kamble's Resolute Feminism URL: https://indianliberals.in/opinions/babytai-kamble-resolute-feminism/ ### Body Babytai Kamble was a pioneering voice of intersectional feminism in India. As a Dalit woman, she understood the complexities of caste, class and gender-based oppressions and their overlapping nature. Her life and work provides a critical lens into the intersectionality of feminism. "It is the woman who is the doer" – Babytai Kamble (Pandit) Babytai Kamble brings forth the struggles and oppression of Dalit women, who have conveniently been silenced and overshadowed in history. She created a space for herself and her community in the world of literature, activism and education. She did so through the standpoint of a Dalit woman, a rarity at the time. Her take on feminism within the multi-layered oppressions of class, caste and gender create a space for intersectionality.  A teacher, entrepreneur, human rights activist and a champion of women’s rights, Babytai Kamble’s life becomes an example of purposeful determination. An inspiration to many women, Kamble herself was inspired by the life of Dr B.R. Ambedkar and the contributions he made to the Dalit community. Taking his beliefs and morals forward, Kamble not only became a torchbearer of Ambedkar's values and motives but also created her legacy by paving the way for Dalit women in the realms of activism and literature. Kamble was born as Baby Kamble in the year 1929. She was given the name Babytai by her peers and supporters out of affection and adoration. A member of the Mahar community, one of the largest marginalized communities in Maharashtra, Kamble began her activism at a young age. She began going to public meetings that were organized by various Dalit activists that inspired her to work for her community. The meetings primarily focussed on emancipation of the marginalized communities. The prime ideas discussed in these meetings acknowledgement of violations of human rights, absence of fundamental individual rights,  and ways to implement these rights for the betterment of disadvantaged communities. In one such meeting, an activist portrayed women as leaders, which struck a chord with young Kamble. As per societal norms, women in the forefront of was a rare sight. Therefore to hear about the possibility of a woman being in a leadership position encouraged Kamble to follow the same path. These meetings led a lot of women within the community to actively take part in public life. It encouraged them to fight for their rights.  Kamble was married off at the tender age of thirteen, which was considered old in those times. Surrounded by poverty and unemployment, it was extremely important for Kamble and her husband to get jobs. Owing to the restrictions the upper caste community bestowed upon them, it was extremely difficult for anyone from the Mahar community to get a job. Therefore, Kamble and her husband both started a small business selling grapes. Slowly, they started making profits off of their business, which helped Kamble to support her family financially. This not only gave them the economic agency that was much needed but it also brought out the entrepreneur in Kamble. Her ideas and motives with regard to the business gave her the agency which most women were not allowed to access.  Kamble soon became a part of the[Mahila Mandal](https://roundtableindia.co.in/index.php?option=com_content&view=article&id=5035:i-hid-everything-i-wrote-for-20-years&catid=127:post-ambedkar-leaders&Itemid=158) that[Raja Malojiraje Nimbalkar and his wife Lakshmibai formed in Phaltan, Maharashtra.](http://lib.unipune.ac.in:8080/jspui/bitstream/123456789/9291/11/11_chapter%205.pdf) The Mahila Mandil focused on Dalit women's right to education and employment. Since her father had never allowed her mother to take part in public meetings and gatherings she made way for herself and became a member of the Mahila Mandil. She alongside other members of the organization fought for social equality for their community. In these meetings, they also took part in various deliberations in regards to women's emancipation. Kamble also ran an ashram for children of the disadvantaged and vulnerable communities that focused on the overall growth and development of those children through education. Being an advocate of human rights, Kamble wanted to pass on the same ideas of social equality and enlightenment to the children of her community. To be aware of one’s social rights at a young age is not only important for the emancipation of one’s community but also for the development of the individual self. By imparting her ideas and motives to the children of the ashram she was not only creating a safe space for them but also giving them the scope to be independent, something that she believed was crucial for one’s individuality.  While selling grapes at her shop, Kamble often used to read stories and narratives from the newspapers she used for packaging. In those stories, the lack of representation of the marginalized, especially Dalit women encouraged her to pen down her own lived experiences. Through extensive reading, note-taking, and utmost secrecy from her husband, Kamble's autobiography,[_Jina Amacha_ (_The Prisons We Broke_)](https://www.amazon.in/Prisons-We-Broke-Baby-Kamble/dp/935287370X) was born.   Through her book, Kamble made a significant achievement in the world of literature. Her book sheds light on the oppression of Dalit women, which lacked in mainstream narratives of literature. Being a woman from a marginalized community doubles the oppression through the virtue of gender and caste. The identification and acknowledgment of the layers of oppression Dalit women face becomes crucial to achieve individual fundamental rights. Kamble was not scared of being critical of her community when it came to the patriarchal subjugation of women. Dalit women are indeed doubly marginalized as they are not only subjected to the humiliation of the upper caste community but also from men of their community.  Kamble's autobiography becomes a way of reclaiming her identity as a Dalit woman. Not being allowed to read and write by her husband and often subjected to physical violence if caught in the acts of education, Kamble created a space for herself in a male-dominated world. The mere process of writing becomes an act of resistance from the atrocities and enormity of the world. By documenting the lived experiences and narratives of her community and individual self, Kamble creates a space for herself not just in the context of Indian literature but also Dalit history. The experiences of marginalized communities which have often been ignored and disregarded by history find room through her work.  Her autobiography becomes an important landmark in Indian literature as it not only throws light on Dalit experiences and narratives but specifically carves space for Dalit women's lived experiences.  She also published a collection of poems in Marathi titled _Man Bolata_. It mainly focused on the teachings of Ambedkar and the emancipation and empowerment of the Mahar Community. Kamble passed away in April 2021, leaving behind a legacy of freedom and equality. Her teachings, motives, and beliefs of education, unity, and morality become foremost to achieve intellectual freedom. She firmly believed in the urgency of young intellectuals who'd be responsible to bring significant change in their lives as well as in the lives of their community. Her ideals and beliefs help us to understand feminism on liberal ideas in a different context. A context which is seldom ignored and silenced. Her experiences as a Dalit woman - reclaiming her agency through entrepreneurship, activism and her biography puts light on the multi dimensional aspects of feminism. It forces one to think about the multifacetedness of narratives and that to visualize those narratives becomes the need of the hour. **![](https://indianliberals.in/wp-content/uploads/2021/09/bio.png)** --- ## [Opinion] C Y Chintamani: The Liberal Editor, Politician URL: https://indianliberals.in/opinions/c-y-chintamani-the-liberal-editor-politician/ ### Body _A prodigy, nationalist, journalist, politician, thinker - C.Y. Chintamani was a liberal in every sense of the word.  As the editor of a leading national daily, Chintamani placed utmost importance on free speech. He did not shy away from criticizing the British Raj, INC, and even fellow liberals.  _In the first half of the 20th century, C Y Chintamani was among the few liberal Indian politicians balancing between opposing the British Raj and the Gandhian method of civil disobedience. The liberal commitment to constitutional means in the age of Gandhian mass movement nudged one away from public sentiment. However, this should not lead us to underestimate the notable, patriotic contributions of liberals. Neither should the liberal strand of Indian anti-colonial movement be allowed to lie in oblivion. In this context, the contribution of Chintamani as a politician and editor warrants commemoration. Born on 10 April 1880, in the town of Vizianagaram in Madras presidency, Chintamani spent much of his public life in the North Indian town of Allahabad. Back then, Allahabad was a vibrant intellectual and cultural center for Indian nationalists in North India. These included the Nehrus, Madan Mohan Malaviya, and moderates. Interestingly, Chintamani was able to sustain his intellectual and political activism in the Hindi heartland town without having learned to read and write in Hindi. Right from his young days, Chintamani was drawn to the moderate leaders of the Indian National Congress, who were influenced by liberal ideas. They focused on social reforms and political rights for Indians. Chintamani had a prodigious mind. He began editing the _Vizag Spectator_ at the age of 18. After his joining, the newspaper was renamed as Indian Herald. His biographer mentions that owing to financial difficulties which were all too common for native press ventures back then, Chintamani was not only an editor, but also the foreman, proof-reader, reporter, sub-editor, and manager all rolled into one. After 1899, he moved to Madras to join the _Madras Standard_ with G Subramania Iyer. However, the pinnacle of Chintamani’s journalistic career was to come with his association with _The Leader_. Published from Allahabad, _The_ _Leader_ emerged as a leading English nationalist newspaper in the United Province. Earlier, print media was mainly dominated by Anglo-Indian papers like the _Pioneer_, _The_ _Statesman_, and_ Times of India._ These did not see much representation of Indian issues. The only notable exceptions were Pandit Ajodhia Nath’s _India Herald_ and Babu Ganga Prasad Varma’s weekly _Advocate_. The _India Herald_ was a short-lived experiment, while the _Advocate_ didn’t carry much weight. _The Leader_ began as an English daily from Allahabad and incorporated the weekly _The Indian People_. This nationalist print media initiative was a joint venture of leading figures including Pandit Madan Mohan Malaviya, Motilal Nehru, Sachchidnanda Sinha, and Tej Bahadur Sapru. Chintamani was first brought in as a joint editor with Nagendranath Gupta. He soon became the sole editor. In his role as the editor, Chintamani put a premium on editorial independence. He conceded to newspaper proprietors the right to frame the paper’s agenda and hire/fire people at will. However, he reserved to himself the right to decide the content and everyday management of the paper. The key to editorial independence in Chintamani’s case, argues his biographer, was his readiness to quit the job. Chintamani’s editorial integrity cost him friendship with Motilal Nehru and put him in the opposing camp to Malaviya, both of whom happened to be on the board of _The Leader_. The bone of contention with Motilal was rooted in his decision to invite Nautch dancers to perform at the Allahabad Congress session in 1910. The move drew sharp criticism from Chintamani who had no patience for this act of cultural rejuvenation amidst serious discussion of political matters. The final straw though came with Chintamani’s refusal to publish Motilal Nehru’s letter to the editor during the 1915-16 debate on the separate electorate for Muslims in  United Province municipalities. An incensed Motilal resigned from _The Leader_. The conflict with Malaviya occurred over the issue of Montagu-Chelmsford reforms. Predictably supported by Chintamani and opposed by Malaviya. In this case, however, it was Malaviya who resigned from the board of _The Leader_ in the best interest of the newspaper which was served in the able hands of its editor. Chintamani served in this capacity until his death in 1941, except for a brief stint with the _Indian Daily Mail_ in 1925. _The Leader_ was seen as a liberal party newspaper but it was not merely a mouthpiece organ. The newspaper criticized the British Raj, but also Congress leaders and even liberal colleagues. For instance, Gopal Krishna Gokhale, the patron saint of the Indian liberal pantheon, was not spared for his support to the Press Act of 1910. Chintamani’s response to Gokahle’s protest at the criticism went: ‘Sir, I have worshipped you all my life. Must you grudge my freedom even for one day?’ Chintamani’s political career began with the Congress in 1898. He left Congress in 1918 to form the Liberal Party with Surendranath Banerjea, Dinshaw Wacha, Chimanlal Setalvad, and Tej Bahadur Sapru. As a liberal, his preferred solution for India was the use of constitutional means to secure a dominion status for India within the empire. Like other liberals, he disagreed with the Gandhian mode of civil disobedience. He saw it as a sure path to disaster for it undermined the respect for law and authority among the masses. Apart from being a participant in the first Roundtable Conference, his other political roles involved membership in the Legislative Council and being a Leader of the Opposition. Chintamani’s fiercely independent personality was reflected in his unwavering commitment to principles which saw him criticizing fellow liberal travelers as well. Even after he was awarded the Knighthood, his criticism of the British Raj did not cease. Edwin Montagu recognized the genius of the Indian liberal nationalist editor-politician - "An extraordinarily intelligent man, I think the cleverest Indian in debate I have yet seen."          **![](https://indianliberals.in/wp-content/uploads/2021/07/Latest-Photograph-264x300.jpg)** --- ## [Opinion] Dadabhai Naoroji: Social Reforms, Transnational Connections and Statistical Liberalism URL: https://indianliberals.in/opinions/dadabhai-naoroji-social-reforms-transnational-connections-statistical-liberalism/ ### Body _In his decades-long career in Britain, Naoroji laboured relentlessly to popularise the Indian cause. Given the uncooperative attitudes of colonial bureaucracy at home, Naoroji figured that the best way to serve Indian interests would be to influence decision-making in the British parliament. (Image Credits : The Asian Age) _The early phase of nationalist movement in India, dominated by the largely liberal-minded moderate faction of the Indian National Congress (INC), saw them envision a wholesome agenda for the regeneration of India. Prior to creating an Indian political subject, these liberal leaders were invested in the project of creating an Indian public sphere. The eventual culmination of the liberal political project lay in achieving self-rule- interpreted differently as political independence or dominion status- by constitutional means. The vision of modernisation wasn’t limited only to the political realm as Indian liberals also sought to reform the society deeply anchored in orthodoxy. The native Indian modernisation project under the colonial tutelage, though, had to contend with both the obstructive and accelerating tendencies of the imperial metropole. The career of Dadabhai Naoroji, the Grand Old Man of Indian nationalism and perhaps the most prominent liberal figure, captured the zeitgeist of this early phase of Indian nationalism. Even as liberals were first challenged by the ascendant Congress extremists and were later completely side-lined during the mass nationalism phase under Gandhi, their vision and ideas were co-opted by the later generation of Indian nationalist leaders, as shown by the late CA Bayly. In that sense, Indian liberalism remained foundational to the idea(s) of India even if in adopted fashion and as such merits scholarly attention. In pursuit of their agenda for social reform, political rights, and economic regeneration, Indian liberals, including Naoroji, employed a variety of measures. These included educational enterprise, creation of a reading public sphere, formation of political associations, petitions to the Raj administration, counter-preaching, historicism, turning of the defence witnesses, and both upward & downward hermeneutics. Naoroji’s career was emblematic of this liberal phase of Indian nationalism, in both his ideas and methods, which shall be explored below. **Naoroji as Social Reformer** Given the challenges of regressive social practices, religious orthodoxy, repressive colonialism as well as imperatives of the democratic polity, the need to create a civil society beyond the tyrannies of state was evident to Indian liberals. Gopal Krishna Gokhale’s Servants of India society, Mahadev Govind Ranade’s Deccan Sabha, and Poona Sarvajanik Sabha were some notable associations, which sprang up to represent Indian interests and demand rights from the state.  Mass illiteracy, however, posed a challenge to the broadening of civil society as well as the promulgation of rational discourse. Indian liberals thus turned to educational initiatives to foster mass literacy. The pedagogical element of the social reform agenda of liberals was concerned with both mass education and female literacy. Himself a beneficiary of benevolent scholarships, Naoroji was an ardent advocate of free education for masses. In his Bombay stint as an academic in the mid-1800s, he belonged to the Young Bombay clique of social reformers and educationists. As historian Dinyar Patel has argued convincingly, in contrast to Kolkata, the Bombay-based native Indian elites exercised considerable agency in the education sector as instructors and financiers. It was the alliance between progressive intellectuals and rich _shetias _(mercantile community) that fostered the social reform agenda of the Young Bombay. With its belief in the intrinsic value of the western liberal education, the Young Bombay group deployed education in service of social reforms and modernisation to create the liberal political subject in India. Naoroji was instrumental in shaping the educational reform agenda along with fellow western-educated, liberal-minded reformers- Navrozji Fardunji, Karsondas Mulji, Bhau Daji, Ardeshir Framji Moos and Behramji Malabari. The most enduring contribution of Naoroji came in the form of creating an enduring institutional base for liberal values in the domain of pedagogy. The initiatives undertaken included _Parsi Lehak Mandli_ where he was the founding member and first editor; the _Parsi Natak Mandli_ where he was a co-founder; and the _Framji Cowasji Institute_ where he was instrumental in raising funds. At Elphinstone’s College where he was teaching, Naoroji founded the _Students’ Literary and Scientific Society_ (SLSS) in 1848. Three months later, SLSS was followed by the _Dnyan Prasarak Mandli_ (Society for the Diffusion of Knowledge) as a branch of the SLSS, which produced content in Gujarati and Marathi language. Part of the initiative also included the promotion of female education. Naoroji’s reformist zeal for gender equality spurred his endeavour. In October 1849, he would go on to open six schools for girls under the banner of the SLSS. Again, the progressive _shetias _came to provide the financial ballast. The donors included Jagannath Shankarsheth, Jamsetjee Jejeebhoy, Framji Cowasji Banaji, and Cowasji Jehangir Readymoney. The ambit of reforms went beyond social issues to rationalise religious practices deemed irrational. The initiative was partly an insider response to critical charges from Christian missionaries and partly a bid to create the liberal political subject through character building. Naoroji’s religious reforms were mostly focused on his own Parsi community. In this initiative, his partner was the haltingly English-speaking but reform-minded _shetia, _Kharshedji Nasarvanji Cama. Apart from widening the distribution of the Dnyan Prasarak Mandli’s publications, Cama was involved with Naoroji in two other reformist enterprises that riled the Parsi orthodoxy. In 1851, Naoroji and colleagues founded the _Rahnumae Mazdayasnan Sabha_ (Society of the Guides of the Mazdayasnan Path) and _Rast Goftar_, a newspaper in Gujarati. According to Dinyar Patel, the Sabha went on ‘protestantising aspects of Zoroastrianism by removing supposedly foreign and inauthentic customs and practices.’ Reformist in its orientation, _Rast Goftar _took a slew of causes, including the discontinuance of child marriages, the inappropriateness of nautches, and the rights of women in adopting European clothing. However, as Dinyar Patel points out, Naoroji succumbed to oriental stereotypes in his bid to reform Parsi tradition. Naoroji’s excuse for certain ‘irrational’ Parsi practices lay in attributing it to corruption borrowed from Hindu and Muslim traditions. In later years, the involvement of Karsandas Mulji increased the scope of the _Rast_._ _Meanwhile, Naoroji would go on to broaden the scope of both issues that he espoused and places that he went in advancing India’s interests. **Advancing Indian Causes in the Transnational Public Sphere** Naoroji’s concern with India’s regeneration was set in the context of the globalised production system and circulation of ideas. As a man of letters and public figure in both Britain and India, Naoroji was involved in crucial conversations on matters of anti-imperialism, political economy, race, gender rights and political economy. His long stay in Britain, including a parliamentary stint as an MP, meant he was a noteworthy participant in the transnational public sphere. The transmission of ideas happened in both directions, best captured in Bayly’s conception of upward and downward hermeneutics. Naoroji made references to international events in his writings, formed alliances with a variety of political actors abroad, and influenced public debates in Britain and other countries. For example, his formulation of the ‘drain of wealth’ theory deployed international statistical comparisons to hammer his point on India’s persistent impoverishment home. In “_The Wants and Means of India_”, he drew the balance of trade comparisons with the US, Australia, and Canada. By the mid-1870s, he turned to study the US economic experience and initiated correspondence with the US state officials in the Army Corps of Engineers and various state departments including those from Agriculture, Treasury, and the Interior. Dinyar Patel writes that Naoroji’s correspondence with the US officials concerned with statistics collection continued in the early 1900s. His work on the drain of wealth influenced public debates as far as Cyprus and the USA. In July 1902, Naoroji received the request for a copy of his recently published _Poverty and UnBritish Rule in India_ from the Cyprus-based M Sevasly. Mr Sevasly wanted to analyse the impact of British rule on his country with reference to Naoroji’s work on India. In the USA, Naoroji’s arguments on the exploitative nature of imperialism were wielded by the anti-imperial Progressives. According to Dinyar Patel, it was George Freeman, a reporter for the _New York Sun_, who introduced Naoroji’s ideas to Edward Atkinson, the founder of the American Anti-Imperialist League and William Jennings Bryan, the leading progressive leader in the US. In Naoroji’s description of degrading poverty under imperial rule, Freeman found support for his warnings against the US expansionism in the Pacific and Latin America. Freeman popularised Naoroji’s ideas by distributing it to political leaders, universities, public libraries and newspapers. He also convinced Naoroji to send his writings to the elected leaders in the US Senate. Though, we aren’t aware of further correspondence between Naoroji and serving senators on this matter. In his decades-long career in Britain, Naoroji laboured relentlessly to popularise the Indian cause. Given the uncooperative attitudes of colonial bureaucracy at home, Naoroji figured that the best way to serve Indian interests would be to influence decision-making in the British parliament. To this end, he fought multiple election campaigns in Britain, twice as a Liberal Party candidate and once as an independent Liberal candidate. The active political career in Britain entailed courting different constituencies in order to win elections as well as garner support for India. Naoroji’s wide-ranging connections as a politician had a distinctly progressive and anti-imperial character. Historian Dinyar Patel has uncovered Naoroji’s long friendship with and influence over Henry Hyndman. Among the leading members of British socialist movement, Hyndman drew heavily upon Naoroji’s drain theory in his article titled “_The Bankruptcy of India_”. Interestingly, as Dinyar Patel shows, Hyndman also told Karl Marx that “I want you very much to meet Mr Dadabhai Naoroji to whom I am much indebted for facts and ideas about India.” In August 1904, both Hyndman and Naoroji attended the International Socialist Congress in Amsterdam. In the initial stage of his electoral run, Naoroji also briefly considered courting a Tory candidacy, which he discussed with Scawen Blunt. To this end, George Birdwood offered to arrange meetings with British Conservative politicians. Dinyar Patel has argued that Naoroji mainly courted three constituencies during his stint in British politics- workers and trade unions, Irish nationalists, and the disenfranchised feminists. His alliance with feminist activists was reflected in his involvement with the feminist associations. Naoroji served as a vice president of the Women’s Progressive Society and the International Women’s Union. He was also a council member of the Women’s Franchise League. Himself a target of vicious racist jibes from no one less than the Conservative prime minister Lord Salisbury in the infamous Black Man incident of 1888, Naoroji took an active interest in transnational initiatives against racism. He forged ties with Catherine Impey who was the founder of a journal called _Anti-Caste_. The journal campaigned against all forms of racial injustice and attacked both casteism in India and lynching of Blacks in the post-reconstruction American South. Remarkably, Impey also introduced Naoroji to the famous black civil rights activist, Ida B Wells. Later in 1907, WEB DuBois published excerpts from Naoroji’s radical presidential speech at the Calcutta session of the Indian National Congress (1906) in his magazine _Horizon_. For all his progressive views and socialist leanings, Naoroji remained at core a member of the liberal establishment, both in India and Britain. In fact, it was his friends in Bombay, most notably AO Hume, who leveraged their connections to induct him in the British Liberal establishment of politicians, civil society associations and journalists. Not only did Naoroji fight the elections twice on the Liberal Party ticket, but he also engaged with the National Liberal Federation, London-based Liberal Central Association, Manchester-based National Reform Union, and the Holborn Liberal Association to name a few. **Statistical Liberalism and Drain of Wealth** Coined by CA Bayly, the term ‘statistical liberalism’ refers to the Indian political economy fashioned by liberals to challenge colonial appropriation and exploitation. According to Bayly, the “fundamental principle of Indian Statistical liberalism was that impoverishment and famine were not the natural outcomes of human improvidence and extravagance combined with overpopulation.” The most prominent practitioners of this version of political economy were RC Dutt, KT Telang, and Dadabhai Naoroji. Given his academic background in mathematics, Naoroji deployed statistics and empirical data to counter the official reports, which served the narrative of progress under the Raj’s ethnographic state and legitimised the colonisation project. Naoroji was, by no means, the original proponent of the drain theory. Noted Indian liberal Raja Rammohan Roy and the little known Ramkrishna Vishwanath as well as British officials, including James Silk Buckingham, Montgomery Martin and others had broached the topic earlier in their own ways. But, Naoroji arguably was the most prominent proponent of the theory. His statistical liberalism consisted of calculating the extent of poverty in India,  identifying the causal mechanism behind the drain (council bills deployed in the salary and pension payments for British officials in the Indian civil service), vigorously promoting the solution (Indianisation of the bureaucracy as well as self-rule under the dominion status which Dinyar Patel calls the ‘political corollary’ to the drain). Naoroji’s first public pronouncement on the matter came in 1867 with his delivery of “_England’s Duties to India_”. Dinyar Patel has identified two factors behind this political economy turn in Naoroji. The so-called Orissa famine of 1865-67 and the financial crisis in Bombay in the wake of the culmination of the American Civil War showed the precariousness of Indian lives and livelihoods. It was this degrading economic condition that might have drawn his attention to the matter. In a detailed study, Dinyar Patel has identified several methods involved in Naoroji’s engagement with statistical liberalism. To begin with, Naoroji ‘made the first-ever estimates of the country’s gross income per capita (technically, gross production per capita).’ The result punctured the myth of bountiful progress under the British Raj. To further make his polemical case effective, he relied on statistical comparisons for the shock value they produced. Witness for instance his claim that the income of the average Indian peasant was less than the bare minimum living expenditure on an Indian prisoner or coolie emigrant. The third method involved deploying the testimony of British officials to argue his case. CA Bayly argued this kind of turning of the defence witnesses ‘not only undermined the authority of the Anglo-Indians but it also neatly deflected the charge of sedition.’ The final step was criticising the veracity of official statistics on empirical grounds. This involved pointing out the obscuration of differing local conditions in the official data and relying on sources on the ground for additional information. Naoroji’s drain theory has come under criticism from later scholars of economic history and rightly so. Even historian Bipan Chandra, who otherwise sympathetically treated economic nationalism of Congress moderates- which is understandable given his Marxist leanings- found Naoroji’s fixation with the remittances absurd. More substantial criticism has come from other scholars though. KN Chaudhuri, for instance, calculated the drainage amounting to ‘less than 2 per cent of the value of India’s exports of commodities’ during the late nineteenth and early twentieth centuries. Others have pointed out the productive output generated in India from the so-called drain, which should be an investment. Vera Anstey argued if India had maintained its own army and navy, this arrangement might have cost more than the drain amount. Tirthankar Roy has argued that the services purchased abroad might have spurred the growth of businesses at home. Moreover, Indian nationalists were being cynical (Roy’s words, not mine!) in calling the cost of buying the technical knowledge drain. More recently, Dinyar Patel’s defence of Naoroji has come in the form of positioning drain theory as a political polemic rooted in data and empirical observations to further the anti-imperial cause, not a neutral, objective analysis. Of course, there is no denying the fact that the drain debate served the intended purpose of puncturing the legitimacy of the Raj. However, in so far as ideas tend to have an afterlife, the far-reaching impact of the drain formulation has been negative for the Indian economy. Naoroji and his fellow statistical liberals’ protectionist economic agenda, suspicion of foreign capital and trade, and envisioning of a larger role for the state went on to shape the economic agenda of Indian nationalists including Gandhi and resulted in the Nehruvian mixed economy. As the economic liberalisation of 1991 has made clear, for the folly of economic nationalism, part of the onus lies on Naoroji and his fellow travellers who institutionalised such ideas in the Indian nationalist movement. And, if anyone doubts the enduring impact of Naoroji’s ideas, one only has to look at the swadeshi ideology of the Rashtriya Swayamsevak Sangh (RSS) and politician Shashi Tharoor’s tirade against the British Raj, which extensively quotes Dadabhai Naoroji! **Conclusion** In my opinion, the moniker that best captures the legacy and status of Indian liberal tradition is ‘forgotten’. Naoroji’s long public career in service of the nation has been no exception to this general trend. In this regard, a new biography of Dadabhai Naoroji, _Naoroji: The Pioneer of Indian Nationalism_, by historian Dinyar Patel might serve as a much-needed corrective though. _Author’s Note: This article draws heavily on the research of historian Dinyar Patel. The author gratefully acknowledges his contribution._ --- ## [Opinion] Vaad Vivad on Decentralisation and Panchayati Raj in India URL: https://indianliberals.in/opinions/decentralisation-and-panchayati-raj-system-in-india/ ### Body **"**When the Panchayat Raj is established, public opinion will do what violence can never do.**" - Mahatma Gandhi** The Centre for Civil Society (CCS) in collaboration with Friedrich Naumann Foundation for Freedom (FNF) South Asia is pleased to announce Vaad Vivad on "Decentralisation and Panchayati Raj System" in India scheduled on 23rd April 2023 at CCS Office, New Delhi. To observe the 30th anniversary of the 73rd Amendment Act, our upcoming discussion Vaad Vivad will seek to explore the history of decentralisation in India, the constitutional status of the Panchayati Raj institution, and the status of implementation of local governance in India through the works of classical and contemporary literature. **What is Vaad Vivad?** An in-depth Socratic discussion wherein participants explore a specific theme together deliberating the methodology, ideology and approach in depth. A reference reader will be shared with the participants two weeks prior to provide a basic overview and understanding of the topic. Through this program, we create an environment where participants are encouraged to contribute to the discussions. Their shared inquiry is guided by a moderator who encourages thinking, asks probing questions and presents as devil's advocate. We would provide a certificate of participation for those who successfully attend and a few prizes. **Eligibility:** 18+ years of age **Last Date for Application: 12th April 2023** **Registration fee: INR 799/- (Early bird discount available), payable upon selection and has to be made online, details of which will be communicated later.** To apply, [click here](https://form.typeform.com/to/l9Imvnro) For any other queries, mail Sourya (sourya@ccs.in) or Anushka (anushka@ccs.in) --- ## [Opinion] Dr Janaki Ammal: India’s First Woman Botanist URL: https://indianliberals.in/opinions/dr-janaki-ammal/ ### Body The following essay celebrates the life and works of Indian botanist and cytogeneticist, Dr Janaki Ammal. A brilliant scientist and often the only woman in a room full of men, Dr Janaki was awarded the Padma Shri in 1977.At a time where the country focuses on the importance of women’s education and employment, Edavaleth Kakkat Janaki Ammal, a botanist and cytogeneticist, best known for putting sweetness in India’s sugarcane varieties through her scientific methods, remains unknown outside of academia.  Janaki Ammal born in Tellicherry, Kerala inherited the curiosity and love for the natural sciences from her father, [Dewan Bahadur EK Krishnan](https://en.wikisource.org/wiki/The_Indian_Biographical_Dictionary_(1915)/Krishnan,_E._K.) who was a sub-judge in the then Madras Presidency. He was a man who was deeply interested in science. After completing her schooling in Tellicherry, Kerala, Janaki moved to Madras where she completed her Bachelor’s degree from Queen Mary’s College and her Honours degree in Botany from the Presidency College in 1921. After that, she started teaching at Women’s Christian College where she got the prestigious Barbour scholarship from the University of Michigan.  Janaki was among the few women who chose her career over marriage. A rather brave decision in those times.  She completed her Master’s in Botany which was followed by a doctoral thesis on the same. After that, she returned to India and became a Professor of Botany at Maharaja’s College of Science in Trivandrum. She taught there for two years, between 1932 and 1934. The decisions that she took for her education become an inspiration for women even today, which is the choice to prioritize one’s hopes and dreams even if it means going against the set norms of society. Even though we consider ourselves to be surrounded by modernity, most women today are not encouraged to study more than required with the fear that it would result in the passing of the “marriageable age”. The hardships and comments Janaki had to endure because of her marital status did not stop her from exploring better and bigger educational opportunities around the world. Her quest for knowledge led her to join the Sugarcane Breeding Station in Coimbatore, where she used her expertise in cytogenetics (the study of chromosomes and inheritance) to work on sugarcane biology. Janaki helped create a high-yielding strain of the sugarcane that would thrive in Indian conditions. Her research also helped analyze the geographical distribution of sugarcane across India. Owing to her brilliance, Janaki was selected as a research fellow under C V Raman but she constantly faced gender and caste discrimination. It created problems with her male colleagues, who refused to look beyond her gender and caste. Scientific curiosity and an unyielding spirit, however, led Janaki to London where she joined John Innes Horticultural Institute as an assistant cytologist. Impressed by her work, the [Royal Horticulture Society](https://www.rhs.org.uk/) invited her to work as a cytologist at their campus at Wisley. At the Society, one of the plants she worked on was the magnolia shrubs. Her work ethics were so exemplary that the Society’s campus at Wisley named their magnolia shrubs after her: Magnolia Kobus Janaki Ammal.  In 1951, the then prime minister Jawaharlal Nehru personally invited her to return to India and restructure the [Botanical Survey of India](https://bsi.gov.in/)(BSI). In a quest to make a name for herself and do something for her country through her ideas and abilities she accepted the offer and was appointed as the Officer on Special Duty to the BSI. She restructured the organization in a way that helped BSI to better its operations.   Janaki did not limit herself to a certain sect of the society and was always interested to look beyond what academia had to offer. This is also why Janaki was not afraid to also travel to remote areas of the country in search of the plant lore of the indigenous peoples of the subcontinent. She would spend time searching for medicinal plants in Wayanad before visiting Ladakh to explore methods of sustainable agriculture at high altitudes. Janaki was also an environmental activist. She took part in various protests that were held against environmental damage, one of which was the protest held against the building of a hydropower dam across the river Kunthipuzha in Kerala’s Silent Valley. Her active participation brought the credibility of a scientist to activism.  Janaki was also the only woman invitee to the landmark international symposium on environmental history, “[Man’s Role in Changing the Face of the Earth](http://www.wennergren.org/history/conferences-seminars-symposia/wenner-gren-symposia/wenner-gren-symposia1952-1960/mans-role-c)” organized by the Wenner Gren Foundation for Anthropological Research at Princeton in 1955. Creating a space for women at a conference which had “Man’s Role” in its title. It was Janaki’s individuality and belief in her ideas that led her to participate in conferences, protests, and events that had no space for women and were reserved for the privileged. She crossed every hindrance that life threw at her. Even her age could not stop her. After retirement, she continued researching. She served for a short period at the Atomic Research Station at Trombay before serving as an Emeritus Scientist at the Centre for Advanced Study in Botany, University of Madras. Few know that during her last years, Janaki’s main interest had been the rearing of a large family of cats and kittens.  For her exemplary contribution to science in India, Dr. Janaki Ammal was awarded the Padma Shri in 1977. In 2000, the Ministry of Environment and Forestry created the National Award of Taxonomy in her name. Janaki leaves her presence in the smell of Magnolia and her individuality in the sugar of Indian sugarcane reminding us that the result of believing in oneself is often sweet.  Books by Janaki [_The Chromosome Atlas of Cultivated Plants_](https://www.journals.uchicago.edu/doi/abs/10.1086/395326) **![](https://indianliberals.in/wp-content/uploads/2021/09/bio.png)Naina Ojha ** Naina is a writer from Ghazibad, Uttar Pradesh. She is pursuing a Master’s in Gender Studies from Ambedkar University, Delhi. If she is not frantically typing on her computer to meet a deadline, she is probably sipping on green tea, reading or laughing at her own jokes. She loves books, movies and food. She is also a spoken word artist and has been a part of the community for six years. --- ## [Opinion] Diversity, Democracy, and Dissent URL: https://indianliberals.in/opinions/diversity-democracy-and-dissent/ ### Body **DIVERSITY, DEMOCRACY AND DISSENT** - Lakshmi Ramanandan (Fourth Prize Winner, Indian Liberals Essay Contest 2019) Not much has been talked about Yuyutsu, Kaurava’s half-brother from the epic tale of Mahabharata. He openly protested against the injustice meted out against the Pandavas and decided to fight with them, against his own brothers. Cut to the modern era, we see Mahatma Gandhi, the “arch dissenter of the twentieth century” winning India its freedom in 1947.  In November 2015, writers from various Indian languages registered their dissent in the light of attacks against freedom of expression, by returning their Sahitya Akademi awards.  Evidently, the argumentative, skeptic Indian has continued to dissent and it is very much a part of the Indian psyche as much as democracy and diversity are. In any sophisticated society, there has to be a range of diverse opinions or philosophical departures to offer a variety of ways to seek the explanation of the world. Dissenting opinions enrich public discourse and they are to be encouraged. There was a strong tradition of dissent in India, beginning from the Ancient period, with the controversy between the ‘brahman’ and ‘shraman’/ nastik traditions. This contestation found echoes in works of Megasthenes, Ashokan inscriptions and Al Beruni who talks about the counter religion of the time, that of the Shramanas. In the Medieval era, there existed a great deal of sharp difference of opinion. For example, Sant Kabir and Ravidas gave one idea of religion and society while others propagated different, opposing ideas. To deny it would be wiping out half of Indian tradition and philosophy. What does the term ‘dissent’ entail? It is not just protesting or a difference of opinion on a particular subject; it is an art of questioning and an attempt to challenge the conformism and blind complacency in a democracy; it is an invitation to awareness. Recently, the Supreme Court of India came up with, perhaps, the best definition of the term when it referred to dissent as “the safety valve of democracy”. The Court was discussing the arrest of activists by Maharashtra Police post Bhima Koregoan violence that took place in January 2018. As a right, right to dissent is one facet of Article 19 (1) (a) of our Constitution. Along with the much celebrated demographic, religious, linguistic, cultural diversity we also have caste divisions within religions; rise of difference of views is quite inevitable in such a landscape. Despite speculations and arguments that such a country cannot hold together long as a single political entity, we did survive. The Indian model and its encounter with diversity offer a lesson to modern democracies in dealing with deep diversities. Interestingly, the ways in which dissent is articulated have changed across the years.   Films and documentaries are screened, books and articles are written, hunger strikes staged, speeches are made and cartoons drawn, songs sung and dances performed. Comedians are impressively using their medium of humor to drive home their views and make strong, subtle statements against the status quo. People kissed openly on the streets of Kochi to protest against moral policing and students shouted ‘azadi’ at the top of their voices. One major factor that has played a groundbreaking role in this space is the advent of the social media and the growing number of people using social networking sites like Facebook and Twitter to express their opinions and views openly. This has two-fold implications. One, more people have awareness of the issues being discussed, thanks to the popularity of the media among the masses especially youth. Two, is a democratization of communication/ media. Social media offers an ordinary citizen the chance to be a journalist and speak out the truth, or be a whistleblower. Trolls and memes have totally overtaken the internet these days! However, this has had its own share of issues, the lack of a regulatory mechanism being a worrying aspect. How dissent and disagreement are dealt with by any government is an interesting aspect to examine. In a huge democracy like India, to be able to deal with the ideas and opinions of a diversity of people is a delicate task. Lately, criticisms have been leveled against what was perceived to be quite an irresponsible way of accommodating the dissenters and reluctance to take part in constructive dialogues. It is ironical that this happens in a country whose Constitution makers emphasized on cultivating constitutional morality and encouraged the citizens to interrogate the institutions when they trample upon people’s rights. We shall look into three such instances to understand the issues at hand. One is the continued use of sedition and criminal defamation laws against those who criticize the government. In April 2018, a folk singer was arrested by the Tamil Nadu state police for singing a song that allegedly criticized the Prime Minister. In June 2018, eight people were arrested in Bihar for sedition – they were accused of playing and dancing to an “anti-India” song.  Criticism of the government has begun to be equated with a criticism of the nation! Second, is the instance of State Governments resorting to blanket internet shutdowns to prevent people from using social media to incite violence.  Jammu and Kashmir and Rajasthan had to face this issue frequently last year. Third is the use of the Unlawful Activities Prevention Act (UAPA) indiscriminately to target human rights activists and of Foreign Contribution Regulation Act (FCRA) to shut down NGOs that complain against specific government projects. Hate campaigns against journalists in social media have also to be mentioned. More than 70 years of independence, is the atmosphere not conducive to those who are trying to make their voice heard against those at the helm?  India’s ranking in Press Freedom Index dropped down to be ranked 140th in a list of 180 countries this year. This reminds one of the Orwellian universe, where nations are turned into republics of fear.  People are not able to make a speech questioning the state without being dubbed a threat to the country’s security and sovereignty. Fear and prejudice are ruling the day and journalists are scared of standing with the truth. This threatens both the liberal space that India has promised its citizens and the very idea of democracy where lies its identity. Accountability and transparency are affected which tarnishes the ideal of democratic paradise that India is projected to be. However, there are certain steps that can be taken to save the nation from taking an ugly turn. 2018 saw a historic Supreme Court verdict that ensured that the ‘safety valve’ is still relevant. The part of the colonial law - Section 377 of IPC, repeatedly used as a weapon against the LGBTQ community was decriminalized by the SC pointing out that it violated the right to equality guaranteed by the Constitution. It was a culmination of years of collective dissent by a group of activists and public against not just the regressive law but the societal prejudice towards the LGBTQ community as well. The Court reiterated that the dynamic and democratic nature of the Indian Constitution allows dissent. This stood out as an example of how diverse opinions are to be heard and answered to. The way forward might not be easy, but if democracy and diversity are to survive, the fresh breath of dissent has to blow. The first task is to take steps to repeal or amend regressive pieces of legislation, policies and regulations like the Sedition Act by holding discussions with the civil society and ensuring enough transparency in both the process and the laws. There have been laudable steps in this direction. Consider, for example, the repeal of Section 66A of IT Act that reinforced the belief in our right to free speech and expression. Archaic colonial laws like Section 153 – ‘wantonly giving provocation with intent to cause riot’ and Section 153A – ‘promoting enmity between different groups on grounds of religion, race, place of birth, residence, language, etc’ that place limits to freedom of speech are to be re-examined in this post-colonial era. The police force and security institutions need to be sensitized to address such situations properly; there have been cases where we saw them taking the side of those who harass, say, writers or artists. Northern Ireland passed a legislation that made protection of human rights a police duty, on an equal level with other traditional police duties.  Also, inappropriate cases which impinge on free speech are filed in the courts. Steps should be taken to develop internal mechanisms and policies to support a robust legislative framework. To this end, NGOs play a huge role. They are significant to a functional democracy like India as they provide a platform for the civil society to engage productively with the governments and dissent in a reasoned manner. Laws that ensure transparent functioning of NGOs is what we need, not ones which disrupt their smooth conduct. A matter of urgent importance is to address the issue of journalist murders and take steps to ensure that press can work fearlessly and with complete freedom. Attack against freedom of speech is rampant on a global scale too; the near silence over the arrest of Julian Assange, publisher of WikiLeaks, hailed as the “first media hero of the 21st century” is frightening. Reports from Israel where government is creating barriers like fines and fees on people to exercise their right to protest is discouraging. It is our responsibility to ensure that another Ambikesh Mahapatra is not arrested for sharing cartoons, no Ravi is jailed for questioning  a minister’s assets and never again a Jawan is haunted for raising concerns about something as basic as quality of food. It is not just our right; it is our duty and obligation to dissent. There are international law principles and standards that guarantee protection against repressive practices that undermine freedom to speak and right to protest. Efforts have been taken by International Network of Civil Liberties Organisation (INCLO) and United Nations framework towards this end. The International Covenant on Civil and Political Rights (ICCPR) has identified certain “rights to protest” – a list of rights that a state must protect to enable the citizens to protest and dissent. India should take steps to align the systems in place with these international benchmarks. For a democracy to function, dissent is indispensable as it renews the am aadmi’s faith in its representative nature. After all, a country that has celebrated dissent and revered fighters like Gargi who used arguments to wage wars of words cannot remain in the dark for long. Let more movements like #MeToo emerge and let more ‘pinjra’s be broken into pieces. Keralite. Completed Masters in English Language and literature from University of Delhi. Currently working as Assistant Professor, English at Christ Nagar College, Thiruvananthapuram, Kerala. Interested in public policy, women’s studies and cultural studies. type=content&p=1575). Needs editorial review._ --- ## [Opinion] Encoding Privacy in a Digital World URL: https://indianliberals.in/opinions/encoding-privacy-in-a-digital-world-by-shivani-a-tannu/ ### Body **Encoding Privacy in a Digital World** - Shivani A Tannu (Third Prize Winner, Indian Liberals Essay Contest 2019) The rise of internet and social media has led to privacy concerns as it encroaches our personal space and gives the online social providers access to the user’s personal data. The cost that user’s pay for accessing online services is not cash but voluntarily giving up on our personal data. The flip side – potential abuse and sharing of the data. In the case of most online providers, the consent to collect data is presumed and one can opt-out or disable some of these features that allow the provider to collect as well as share the data. The user gives up the ownership of his data when signing up for these online services.   While there are justifiable uses of data that are vastly beneficial, such centralization of data, profiling of individuals and increased surveillance, has led to mounting concerns relating to erosion of privacy of individuals, ability to impact public decision-making process and national security. Information could be used for the beneficial purpose; but the arbitrary and unregulated use of personal information has increased concerns regarding freedom of an individual and the privacy. The concerns are mostly related to centralized databases, individual profiling, surveillance leading to erosion of individual’s freedom. Data protection refers to the practices, safeguards, and binding rules put in place to protect user’s personal information and ensure that users remain in control of it[i]. The purpose of personal data protection isn’t to just protect a person’s data, but to protect the fundamental rights and freedoms of persons that are related to that data[ii]. Data protection doesn’t mean abandoning intelligent business use of personal data – it means being responsible and transparent with that use; continuing to pursue company objectives, but not at the expense of, or even with priority over, the individual data rights of the customer[iii]. One challenge stands out when framing data protection regime for e-commerce– how to create a supporting environment for e-commerce that fosters innovation while placing the privacy concerns at the forefront of the approach. Good legislation should complement market forces in bringing values and welfare to both consumers and organizations[iv]. Privacy can have various meanings based on different context. It is important to understand the concepts of Privacy according to their context. Privacy has been identified with 3 broad types– s_patial privacy _(related to physical spaces and things), _decisional privacy _(related to certain significant decisions) and _informational privacy _(related to personal information)[v]. Data protection is related to informational privacy. With ubiquitous nature of technology, the impact of data protection can also be seen on spatial and decisional privacy too. In its judgement in the Puttaswamy vs. Union of India case, in August 2017, the Supreme Court recognised the fundamental Right to Privacy under the Indian Constitution. Existing Indian Laws[vi] India does not have an independent data privacy legislation; however, it does have what can be inferred as the code for data protection laws that is embedded in the Information Technology Act, 2000 (“IT Act”) and Information technology (Reasonable Security Practices and Procedures and Sensitive Personal Data or Information) Rules, 2011 notified under the Section 43A IT Act. These Rules provide privacy law for protection of data in electronic transactions. Data as defined in the IT Act is restricted to collection, possession, handling/dealing or transfer of “personal” information which related to natural person. Thus, the law is restricted to an individual and does not deal with data between corporate entities. Also, the law makes no distinction regarding the obligation of a data collector and a data processor. Some salient features of privacy rules– ### **Personal Information vs. Sensitive Personal Data or Information (SPDI)** Data protection law in India does not protect all personal information but only “sensitive” personal data. The threshold of what is included as part of “sensitive” data is low. The definition includes critical financial information such as bank account details, debit and credit card details and other information related to payment instruments. These are deemed to be included as part of SPDI. ### **Collection of Information ** Regarding information, the obligation is to inform the data subject (an entity whose data is being protected under the law) that its information is being collected. In case of SPDI, the bar for compliance is higher since a written consent is mandated which can be revoked by intimation in writing. Rules 5(2) and 5(4) are laid down in accordance with global best practices that are known as “data minimization”. To ensure data subjects do not disclose SPDI, it creates an obligation on data collectors to obtain information only when necessary and must be retained only for as long as it is necessary to achieve the purpose of collection. ### **Transfer of Information: Consent vs. Necessary for Performance** Consent does not result into legitimizing all data collection, but only “necessary” information can be collected and transferred. As opposed to collection, in case of transfer compliance is not just restricted to SPDI but also applicable to the entire pool of information. Over and above, information can be transferred to a third party only when (i) the third party also adopts the same level of data protection as mentioned under the IT Rules; (ii) the transfer is necessary for performance of an existing contract and (iii) consent of data provider is obtained. ### **International Laws** GDPR is an important law that has recently been in force in European Union (EU) and the provisions of this regulation have been referred in the Indian draft Data Protection Policy and Justice B N Srikrishna Committee report. GDPR is a legal framework that provides guidelines for the collection and processing of personal information. While its jurisdiction is limited to EU, any state that transacts with EU member state and has access to its customer’s critical personal data will have to abide by GDPR guidelines. Non-compliances also attract a hefty penalty. While GDPR is not an act but guidelines that can be used to draft legislation by member nations, yet it is fruitful to compare the broad contours of GDPR with the relevant Indian law – Data Protection Bill. The major points of difference between the two are[vii] – - While GDPR mandates entities to share names and categories of other recipients of personal data with citizens whose data is being processed, the Indian draft bill does not require this rule - Citizens in Indian draft bill cannot demand erasure of their data while there is a separate article ‘Data reassure’ in GDPR for this provision - GDPR mandates time frame for which data will be stored by entities while the Indian draft bill does not mention any such time frame - GDPR explicitly mentions sharing of the source from which data has been acquired about citizens if it was not directly collected from him/her while there is no such requirement in a draft Indian bill - In the case of a data breach, the entities are not required to share this information with the citizens whose data is compromised according to draft Indian bill. Instead, the Data Protection Authority determines whether the breach should be reported to the affected persons. GDPR provides for such provision where all breaches are to be reported to the affected persons - GDPR requires that the data which is being processed about the citizens shall be made available to him/her while the Indian draft bill mentions the provision of the summary to the citizens without defining what summary means ### **Conclusion** Data privacy is a legal right and existing data protection framework in India under the IT Act is largely inadequate, in terms of implementation, protections and remedies and it lacks basic protections such as provisions for data breach notifications[viii]. Therefore, India urgently needs to enact a dedicated data protection law. In framing the data privacy regime, the policy makers will have to balance the access of businesses to technological innovations in data analytics with the need to protect customer data. This would also include the requirement of the government to ensure law enforcement and regulatory authorities would have access to Indian data upon requests and that the government would be able to limit the unwillingness of MNCs to respond to law enforcement requests. [i] Accessnow.com. _Data protection: why it matters and now to protect it_. (2018). Retrieved from [https://www.accessnow.org/data-protection-matters-protect/](https://www.accessnow.org/data-protection-matters-protect/) [ii] Njordlaw.com. _Three reasons why we need strict data protection regulations_. Retrieved from [https://www.njordlaw.com/three-reasons-need-strict-data-protection-regulations/](https://www.njordlaw.com/three-reasons-need-strict-data-protection-regulations/) [iii] Information-age.com. _Getting Value from your data under GDPR_. Retrieved from[https://www.information-age.com/data-under-gdpr-123476524/](https://www.information-age.com/data-under-gdpr-123476524/) [iv] Iapp.org. _Can we balance data protection with value creation._ Retrieved from[https://iapp.org/news/a/can-we-balance-data-protection-with-value-creation/](https://iapp.org/news/a/can-we-balance-data-protection-with-value-creation/) [v] Meity.gov.in. _White Paper of the Committee of Experts on a Data Protection Framework for India._ Retrieved from[http://meity.gov.in/writereaddata/files/white_paper_on_data_protection_in_india_18122017_final_v2.1.pdf](http://meity.gov.in/writereaddata/files/white_paper_on_data_protection_in_india_18122017_final_v2.1.pdf) [vi] Bar & Bench. (2018). Understanding Data Protection Laws in India. Retrieved from[https://barandbench.com/india-law-connect/legal-briefing/understanding-data-protection-laws-india/](https://barandbench.com/india-law-connect/legal-briefing/understanding-data-protection-laws-india/) [vii] Cioandleader.com. (2018). _8 differences between Indian data protection bill and GDPR!_ Retrieved from[https://www.cioandleader.com/article/2018/07/30/8-differences-between-indian-data-protection-bill-and-gdpr](https://www.cioandleader.com/article/2018/07/30/8-differences-between-indian-data-protection-bill-and-gdpr) [viii] Nipfp.org.in _Data localisation in India: Questioning the means and ends. (2018). _Retrieved from[https://www.nipfp.org.in/media/medialibrary/2018/10/WP_2018_242.pdf](https://www.nipfp.org.in/media/medialibrary/2018/10/WP_2018_242.pdf) I am Shivani Tannu, a Chartered Accountant from Pune. I am currently pursuing an MBA at IIM Bangalore. I have previously worked at Accenture as a Financial Analyst and now interning at Citi – securities and markets. Besides finance and law, I have a keen interest in the process of policy making, I have taken part in various youth parliament sessions before. My hobbies include trekking and reading. type=content&p=1572). Needs editorial review._ --- ## [Opinion] Forgotten Feminist, Educator: Fatima Sheikh URL: https://indianliberals.in/opinions/forgotten-feminist-fatima-sheikh/ ### Body A rarely remembered social reformer, Fatima Sheikh was among the first Indian Muslim woman educator. Speculated to be the first Muslim woman education of the 19th century. A peer of Jyotibai and Savitribai Phule, Fatima Sheikh made tremendous contributions to Indian women's education, especially those belonging to marginalised sections of society.Jyotirao and Savitribai Phule are widely known pioneers of Indian women’s education movements. Revered for their persistent efforts for securing individual rights, they are celebrated leaders in Indian political history. However, little do we know about Fatima Sheikh. A woman who played an important part in the lives of Jyotirao and Savitribai, without whom they would not have implemented their ideas in the ways they did. Like many women social reformers, Fatima Sheikh has been ignored in history.  So little is known about her that even her birth anniversary is speculated and not confirmed. The question then arises, why are we not celebrating her and why is so little known about her? Jyotirao and Savitribai’s liberal ideas of women’s education and emancipation were not accepted by society at large. This included their families. When Jyotirao and Savitribai were made to leave their ancestral home, it was Fatima who gave them refuge in her house. It is also said that it was the same house and building where Fatima lived that was used to start a [school](https://r.search.yahoo.com/_ylt=AwrPgxGJFGxhRlkAZwK7HAx.;_ylu=Y29sbwNzZzMEcG9zAzEEdnRpZAMEc2VjA3Nj/RV=2/RE=1634501897/RO=10/RU=https%3a%2f%2fwww.kractivist.org%2findia-first-girls-school-started-by-savitribai-phule-and-fatima-begum-to-converted-into-commercial-complex-wtfnews%2f%23%3a~%3atext%3dSavitribai%2520Phule%2520was%2520the%2520wife%2520of%2520the%2520radical%2cfor%2520many%2520years%252C%2520is%2520no%2520longer%2520in%2520existence./RK=2/RS=eGGdPslA8h4HOz1AdV621d5fkzU-) for women by the Phules. Fatima also started teaching in the same school as Savitribai Phule. She was so resilient in her efforts towards women’s education that she used to spend hours counseling parents who did not wish to send their girls to schools. She is also speculated to be the first Muslim woman teacher of the 19th century, who went on to inspire other Muslim women to do the same. Savitribai and Fatima were accompanied by Saguna Bai, who also went on to become a leader of the education movement for Indian women. Yet another woman mercilessly ignored by history. Not to say that Savitribai was easily able to find space in history but the consistent elusion of Fatima from the pages of history draws a clear picture of the [exclusion of Muslim women reformers from social and political areas of the society](https://minorityrights.org/wp-content/uploads/old-site-downloads/download-130-Muslim-Women-in-India.pdf). Owing to the little to no documentation of her work or life, not much is known about Fatima. It is, however,  not hard to assume the kind of struggles a Muslim woman fighting for women’s education and emancipation would have had to face at the time.. Supporting Hindu leaders who were extremely vocal about the ill deeds of the caste system and who encouraged women’s education, she was reprimanded by the Hindu-dominated society as well as the Muslim community. This could also be the reason why she has been ignored by both Hindu and Muslim scholars.  It is fair to assume that Fatima valued individual rights over social validation. The same is evident through her unapologetic and revolutionary contributions. It was one thing to go against a community you belong to but it was a whole other thing to speak up against the dominant community. This tells us about the liberal ideas of education, progress, and individuality she possessed and wanted to inculcate in society.  There have been some attempts to recognize her work. Apart from her association with the Phules, the [Maharashtra State Bureau of Textbook Production and Curriculum Research included a brief profile in their textbooks in 2014.](https://bookofachievers.com/articles/did-you-know-that-the-first-muslim-teacher-started-the-beti-padhao-movement) Special attention should also be paid to the friendship that Fatima formed with the Phules on the grounds of having the same ideologies of freedom, equality, and feminism. The lengths that Fatima went to maintain this friendship, be it going against her community and giving space to a Hindu woman in a Muslim household or supporting ideas that were frowned upon by the society at large throws light on the existence of female friendship that is based on mutual respect and admiration.  It also marks the start of an extremely important friendship between the representatives of the Dalit and Muslim communities and the paths this friendship opened up for other members of the said communities. This relationship implemented the ideology of secularism in its purest form and went beyond the restrictive shackles of sameness of one’s social category. Needless to say, Fatima’s contributions to society are of utmost importance concerning women’s rights and education. The amount of resistance and opposition she must have faced at the time is unfathomable. The lack of mention of any male figure in her life except her brother Usman can be indicative of the fact that her life was a rebellion in every sense against the patriarchal and orthodox nature of life in the 19th century.  Almost two centuries have passed since Fatima challenged the status quo to ensure that all children from all sections of the society have access to education despite their caste, class, gender, and religion. It is important to recognize her efforts and inculcate her ideas of freedom and equality in our day-to-day lives. **![](https://indianliberals.in/wp-content/uploads/2021/09/bio.png)Naina Ojha** Naina is a writer from Ghazibad, Uttar Pradesh. She is pursuing a Master’s in Gender Studies from Ambedkar University, Delhi. If she is not frantically typing on her computer to meet a deadline, she is probably sipping on green tea, reading or laughing at her own jokes. She loves books, movies and food. She is also a spoken word artist and has been a part of the community for six years. --- ## [Opinion] Encoding Privacy in a Digital World URL: https://indianliberals.in/opinions/encoding-privacy-in-a-digital-world/ ### Body _**Arguing that you don't care about the right to privacy because you have nothing to hide, is no different than saying you don't care about free speech because you have nothing to say."**_ _- Edward Snowden_ The privacy debate of today is a glass-half-empty, glass-half-full scenario. As soon as technophiles rejoice that “We’ve never had it so good”, a cautionary note is sounded by the less enthusiastic: “The world and our privacy is falling apart!”. Today’s digital age is the proverbial double-edged sword, and our privacy is increasingly the hilt of that sword. Never has this been more true than in light of the revelation that users’ Facebook data was harvested and exploited for political profiling, without these users’ direct consent1. When Sting crooned to “Every breath you take”2 in the 80s, who would have thought that ‘every move you make’ in the online world today is visible to not only those you trust but also those you don’t know. Privacy can be seen as a reflex of innovation. While one approach would be to say that privacy is a norm and that with modern technologies, the norm must be reconsidered and if necessary, abandoned. The conundrum, however, is how to ensure protection while retaining the critical aspects of our democratic systems such as free speech, freedom of assembly and association, and critically, the right to privacy. Artificial Intelligence (AI) and other digital technologies have huge opportunities in strengthening national competitiveness, but also threats that are difficult to foresee today. From an economic perspective, in the early 1990s, Michael E. Porter, a professor from Harvard University, pointed out that “a nation’s competitiveness depends on the capacity of its industry to innovate and upgrade”.3 However, all it takes is one small glitch in the image for the Artificial Intelligence to see a toaster instead of a face! The feeling of excessive surveillance and the multiplication of errors can be particularly worrying. Another cause for concern is that the racial and social profiling techniques these intelligent systems might use could lead to significant errors and abuses.Consumers say they care about privacy, but at multiple points in the process end up making choices that are inconsistent with their stated preferences. The observation that small  incentives, costs or misdirection can lead people to safeguard their data less, can have two interpretations. On one hand, it might lead to policy makers to question the value of stated preferences for privacy when determining privacy policy. On the other hand, it might suggest the need for more extensive privacy protections, from the standpoint that people need to be protected from their willingness to share data in exchange for relatively small monetary incentives. Moreover, whenever privacy requires additional effort or comes at the cost of a less smooth user experience, participants are quick to abandon technology that would offer them greater protection. This suggests that privacy policy and regulation has to be careful about regulations that inadvertently lead consumers to be faced with additional effort or a less smooth experience in order to make a privacy-protective choice. Economists’ interest in privacy has primarily focused on its informational dimension: the trade-offs arising from protecting or sharing of personal data. Hal Varian, now Chief Economist at Google, argued in 1996 that customers are better off sharing information about themselves with marketers because it makes life easier. Junk mail or unsolicited calls that are an annoyance to consumers become less so when the company could target them better through data analysis. In particular, Varian (1997) noted how the consumer may rationally decide to share certain personal information with a firm because he/she expects to receive a net benefit from that transaction; however, he/she has little knowledge or control over how and by whom that data will later be used. Who, then, should hold an economic claim over personal data? The subject to whom the data refers, or the organization that invested resources in collecting the data? In accordance with the Coase Theorem (Coase, 1960), Noam (1997) argued that whether ornot a consumer’s data will remain protected does not depend on the initial allocation of rights on personal information protection (that is, it does not depend on the presence or lack of a privacy regulatory regime). Instead, whether data will eventually be disclosed or protected ultimately depends on the relative valuations of the parties interested in the information. The potential for an individual’s personal data to be used against him/her is the defining feature of this contemporary privacy debate. Economists such as Richard Posner have based their defence of this on Utilitarian grounds. Since businesses value the data more, imposing onerous ‘opt-in’ rules is a significant transaction cost. This could jeopardize the ability of digital companies to provide services and significantly degrade user experience. The efficient solution would be to award the initial ownership of data to the business but let users ‘opt-out’ if they want to. There is a need to redefine private spaces that will not be infringed as framing of Intellectual Property Rights (IPR) is a win-win for everyone. IPR provides the necessary incentives to the producers and balances progress with the public distribution of intellectual goods. Moreover, Laudon (1997) proposed the creation of information markets where individuals own their personal data and can transfer the rights to that data to others in exchange for some type of compensation. Similar to the view proposed by Chicago School scholars, Laudon argued that the mere legal protection of privacy is outdated, and a system based on property rights over personal information would better satisfy the interests of both consumers and firms. George Orwell4 opined that the ultimate threat to privacy would be the bugging of bedrooms and offices. Today, an equally large threat to freedom is the systematic monitoring of public places through microphones, video cameras, surveillance satellites, and other remote sensing devices, combined with information processing technology. Soon it may be impossible for most people to escape the watchful outdoor eye. In the worst cases, countries are actually listening in on their own citizens using spy technology that we see on James Bond movies, remotely hacking into their computers and turning on web cameras, or logging in and intercepting video calls. Is it possible to be secure without giving up some privacy? Theoretically yes, although it is not so easy to implement as intelligence gathering has increasingly become integral to national and international security. The debate has become quite heated black swans of security or the worst-case scenarios. Another question often raised is that ‘Is it problematic if government agencies collect our digital footprint, metadata, online habits and digital history for eternity? This data can potentially be used and abused, however, it can also keep people safe. Privacy is indeed at a crossroads. Today, it is all too easy to imagine a world in which our digital autonomy has been stripped away, a world where our actions are monitored, our secrets are known, and our choices are therefore circumscribed. The only way that we can avoid this dystopian future is by acting today and tomorrow to bring about a different future The growing prominence of the Right to Privacy in the Digital Age over the past years would not have occurred without the presence of a robust and expert civil society constituency. Civil society organizations have been highly effective in influencing the evolving discourse on the right to privacy in the digital age. As we head into an era where we are intrinsically connected, to our devices and each other through the Internet of Things, privacy will become an even more disparate and complex landscape. Thus, civil society organisations should continue to have a strong voice in the privacy debate in order to make sure privacy rights are maintained and respected. Consider the following hypothetical situation - A rabid dog bites a person, what would you do? Impose a ban on people interacting with the dog or treat the dog for rabies? The former would give you short-term relief; remember there is still a rabid dog at large. The latter would ensure that an interaction with the dog in the future will be substantially safer, so would be the answer to this problem. Similarly, when there is a deep systemic problem such as the current attacks to our privacy, the solution does not come from ad hoc deletion of problematic software or applications, but it comes from education, digital literacy, global cooperation and tirelessly advocating on best practices. The strategic challenge for the future of the digital economy is to keep data open and free but, simultaneously, protected. This vision hinges on a balance of legislation and business ethics. What if you have no right to privacy to begin with? China is already undertaking the ‘Social Credit System’, a national trust score that is based on monitoring and evaluating citizens’ daily activities5. In addition to regulations, businesses also need to codify a set of ethics and bake it into their business models. In the words of Senator Bill Nelson of Florida speaking at a congressional hearing to Mark Zuckerberg: _“Let me just cut to the chase. If you and other social media companies do not get your act in order, none of us are going to have any privacy anymore.”6_ Just like in the past and present, privacy must remain an enduring virtue for our digital civilization, democracy and economy survival into the future. Do state’s rights overwrite the individual’s? Does national security outweigh privacy? Does economic liberty supersede social equality? While the fundamentals of these questions have been with us since the age of enlightenment, the future now rests on how we treat and manage data. Privacy implies serenity at home and the right to be let alone. Think before the next time you blithely sign up for a grocery store ‘bonus’ card, automatically hand out your telephone number or mumble the phrase, “What do I have to hide?” While it is the eleventh hour, it is not too late for the government to stop this vicious cycle of unlawfulness since privacy is a fundamental right that forms the backbone of democratic societies. ‘Do no harm’ in the digital age! 1 Matthew Rosenberg, Nicholas Confessore and Carole Cadwalladr, “How Trump Consultants Exploited the Facebook Data of Millions,” The New York Times, March 17, 2018, https://www.nytimes.com/2018/03/17/us/politics/cambridge-analytica-trump-campaign. html. 2 The Police, “Every Breath You Take,” Synchronicity, 1983, https://www.youtube.com/watch?v=OMOGaugKpzs. 3 See: https://hbr.org/1990/03/the-competitive-advantage-of-nations 4 Orwell, George. 1984. New York: Harcourt Brace Jovanovich, 1949. 5 Simina Mistreanu, “Life Inside China’s Social Credit Laboratory,” Foreign Policy, April 3, 2018, http://foreignpolicy.com/2018/04/03/ life-inside-chinas-social-credit-laboratory/. 6 “Transcript of Mark Zuckerberg’s Senate Hearing,” The Washington Post, April 10, 2018, https://www.washingtonpost.com/news/the- switch/wp/2018/04/10/transcript-of-mark-zuckerbergs-senate- hearing/?utm_term=.acf5a31b87bf. Coase, R. H. (1960). The problem of social cost. Journal of Law and Economics 3(1), 1–44. Laudon, K. (1997, January). Extensions to the theory of markets and privacy: Mechanics of pricing information. Stern School of Business - New York University - Working Papers. Noam, E. M. (1997). Privacy and self-regulation: Markets for electronic privacy. In Privacy and Self-regulation in the Information Age. US Department of Commerce. Varian, Hal R. 1997. “Economics Aspects of Personal Privacy.” In Privacy and Self-Regulation in the Information Age. Washington, DC: US Department of Commerce, National Telecommunications and Information Administration. Age-22, Education- B.A. Economics Honours, St. Stephen’s College, Delhi (2015-18), Masters in Public Policy (MPP), St. Xavier’s College (Autonomous), Mumbai (2018-20), Centre for Civil Society (CCS) Alumna; ‘i-Policy for Development Leaders’ (October 2016). Simran is of the opinion that reality is what people make of it, more or less on the lines of Alexander Wendt. Her reality is about creating a shared space where people, diplomacy, economics and international realities can merge together to provide for an atmosphere of peaceful co-existence. She has been surviving on Amartya Sen, Fukoyama and Karl Marx not only for the sheer joy of critiquing, analyzing and learning their works but to see how economics and developmental policies could work in tandem. While currently interning at the Ministry of External Affairs (MEA) under the Multilateral Economic Relations (MER) Division, she is looking into the economic and political relations between G-20, BRICS and India. She is also working on her research paper on the bilateral trade relations between China, India and the United States. Her dissertation is centred around the theme of ‘Community and Healthcare’ wherein she would be analysing the positive correlation between increased community participation and the effectiveness of the Integrated Child Development Services (ICDS) scheme under the Ministry of Women and Child Development to reduce child malnutrition in Mumbai. type=content&p=1556). Needs editorial review._ --- ## [Opinion] Fourth Industrial Revolution - What it Means for India? URL: https://indianliberals.in/opinions/fourth-industrial-revolution-what-it-means-for-india/ ### Body **Fourth Industrial Revolution - What it means for India?** - Tanisha Mitra (Second Prize Winner, Indian Liberals Essay Contest 2019) The Fourth Industrial Revolution is a term which was coined by a gentleman by the name of Klaus Schwab, the founder and executive chairman of the World Economic Forum. He defines the world as a place where individuals use technology to make the move between offline reality and digital domains which enables them to manage their lives. Though the previous three revolutions are considered to be separate events where the first revolution made the shift from an agrarian and handicraft economy to an industry and machine dominated one, the second focused on mass production brought about by oil and electricity, and the third automated the production process using information technology, studying them as a part of a continuous series in the form of innovations they have led to will assist in the creation of more advanced methods of production. Experts in the corporate, policy, and scholarly space over the past decade have reached the conclusion that when risks are mitigated, the ability of states to exploit the benefits of Big Data processing, Internet of Things (IoT), blockchain, artificial intelligence (AI), 3-D printing, and automation will play a significant role in the shaping of their growth, security, and stability prospects. But the debate surrounding the fourth industrial revolution is primarily based on what kind of impact these technologies and their coordination will have. The newspapers are flooded with lopsided headlines of the super-intelligent robots replacing humans and taking up their jobs and ultimately their dignity and political control which has created an environment of confusion and fear. The expectations often associated with technologies has been overinflated which has not only provided a conservative analysis of the perils and promises of emerging technologies in India and their adaptation but has also drawn fatalistic scenarios. Despite entering the race of producing beneficial technologies at a rather late stage, India has certain strategic advantages which can give it a distinct edge in the years to come. The technologies that belong to the fourth industrial revolution are united by the scope of their impact, the velocity of their cross-sectoral disruption, and the exponential pace of emergence. They possess the capability of transforming entire systems of production, management, and governance on the fusion of biological, digital, and physical strata. Economic gains associated with these technologies have also seen a tremendous rise. AI funding alone has increased from $862 million in 2012 to $6.4 billion in 2016 and a study by PwC confirmed that it could contribute $15.7 trillion worldwide by 2030, mainly by enhancing the productivity of labour using automation and product improvement in the sectors of internet and communication, finance, health, agriculture, military, intelligence analysis, transportation, and manufacturing. Therefore, to maintain competitiveness in the field of economics and the military, states are fostering and capitalizing the AI culture of innovation. Indian society has traditionally viewed technology as an enabler of economic growth and has perceived it as a vehicle to advance over modernized economies. The recent smartphone revolution and software miracle has entitled India to maintain its trademark as ‘info-nation’ and ‘IT superpower’ and is thus positioned to gain from the fourth industrial revolution and the ongoing digital transformation. Services have been extensively computerized in India since the late 1980s because of which it is the leading sourcing destination for the IT industry in the world today along with the largest IT workforce and the fastest growing startup and ecommerce market. Even though it is lagging behind China, Europe, and the USA in terms of private investment volume, India’s AI sector has grown by $150 million in the last five years and private investment has doubled from $44 million in 2016 to $73 million in 2017. Further, India has digitalized its economic, social, and political systems at an unprecedented scale and has experienced the highest growth rate of internet access. The potential benefits will only continue to multiply with the AI-enabled breakthroughs in this ecosystem. Yet, the fourth industrial revolution has its own set of economic, political, and military risks and the one which requires immediate attention is the displacement of millions of workers and the risk of losing jobs. This could escalate social tensions in the job market and magnify inequality by segregating the market into the high and low skill/pay categories. A sense of dissatisfaction is increasing among the middle class as incomes have stagnated or decreased due to technological progress. In comparison to high-wage economies like Japan and Germany, India can create sufficient new jobs to offset automation and has a modest potential for automation of about 19 per cent, given its low wage rates, but still the fear of ‘jobless growth’ persists. The disruption of democratic political processes and the facilitation of oppressive and authoritarian practices by the emerging technologies is another cause for major concern. Examples to consolidate authoritarian rule and subvert democracy include computational propaganda, robotic policing, social media abuse fuelling discontent, enhanced surveillance through AI-enabled group cognition, and AI-enabled election hacking. A novel system of digital authoritarianism where social organization combines with effective state control and economic growth is emerging, China being the most prominent example. Additionally, other experts have also highlighted the hollowing of privacy rights and loss of control over data. According to a study by the NGO Access Now, between January 2016 and May 2018, India under Prime Minister Narendra Modi has intentionally disrupted mobile applications and the internet more than any other state and has been keen to control content. Moreover, the risk of misusing technology for fomenting violence is exhibited in a climate of hyper-nationalism. These technologies also have the potential to compromise national and international security. The weaponization of AI has already been begun by states which will revolutionize the military by empowering asymmetric warfare as small groups or individuals can cause mass harm, increase armed conflict escalation as ethical hurdles decrease, and instigate arms races as weaponized applications evolve and create market incentives. Despite India being a rival of China, a nation which has amassed sophisticated AI capabilities, policymakers believe that such scenarios lie only in the future and do not pose any threat today. However, a scenario which does hold relevance today is the detection of the AI-enabled attacks in November 2017 where malware used was spread by learning and adapting its methods, thus, revealing the vulnerabilities of India’s infrastructure to attacks powered by AI. National and international policy measures have been adopted by states to mitigate threats and maximize the benefits of these emerging technologies and not undermine innovation by managing social disruptions through multi-stakeholder regulation. Numerous efforts have been initiated by the United Nations at the global level to promote dialogue on how the means of warfare and nature of work is being transformed by AI and negotiations have been held between the global arms control regimes for the regulation of AI’s research and development. India, among other nations has published national AI strategies over the past years but overall has been struggling to keep pace with the rapid technological advances which calls for the need for coordinated policy responses that would not trigger any backlash, social disintegration, or gender exclusion. The challenges posed by the fourth industrial revolution have received a relatively fragmented and late response by the Indian state. By doubling public investment, an allocation of $480 million was made for AI and other emerging technologies in the federal budget for the financial year of 2018-2019. NITI Aayog, a government think tank released a discussion paper in June 2018 outlining a national AI strategy which concentrated on how IoT-based systems, data analytics, and AI can improve the quality and access to social services in the priority sectors of agriculture, education, health, smart mobility, and smart cities. The strategy acknowledges that India has experienced a delay in foundational AI resources, regulation, and research but now commits to securing a pool of talent by drawing on the vast IT and engineering workforce and expanding the startup scene in the country. By taking these nascent steps, involving all the stakeholders, and amalgamating comprehensive, integrated policy responses with strategic dialogue, India will not only be able to emerge as a major provider of AI solutions for the developing world but will also play a focal role in creating valuable fourth industrial revolution technologies.Currently interning at the Nepal Development Research Institute (NDRI), Patan in addition to working on a research paper on USA's foreign policy after 9/11 with UNESCO, India. I graduated from the University of Nottingham, UK with a BSc (Hons) in Economics and shall graduate from SOAS, University of London this year with an MSc in Development Economics. I wish to gain practical experience in developing nations in the near future after which I am keen to pursue a Ph.D. in the field of public policy/international development. When I am not critiquing articles in The Economist or writing my next article to be published (or not!), I enjoy reading, playing music, cooking lip-smacking dishes, indulging in self-care, and spending time with my friends and family (including my dogs Hector and Coco). type=content&p=1569). Needs editorial review._ --- ## [Opinion] Freedom First's Resistance to Indira Gandhi's Emergency URL: https://indianliberals.in/opinions/freedom-first-resistance-to-indira-gandhis-emergency/ ### Body _Minoo Masani's Bombay-based journal, [Freedom First](https://indianliberals.in/periodicals/freedom-first/) was an undeniable force for safeguarding people's rights and liberty during the Emergency. The following essay encapsulates the role the journal played in enhancing ideas of liberalism in India._Not only did the promulgation of the Emergency saw the suspension of electoral democracy but also the curtailment of press freedom. The state of affairs was best summarized by Lal Krishna Advani’s remark **that** . While major media houses succumbed to the authoritarian pressure, Minoo Masani’s liberal journal _Freedom First_ stood as a notable exception in its resistance to the Emergency. To be sure, Masani’s magazine was not the only media platform to resist the censor diktats. But _Freedom First _undoubtedly played a [remarkable role](https://thewire.in/history/emergency-free-press) in advancing civil liberties, more so given its small clout and reach. Masani’s Freedom First was in the proverbial eye of the storm when it comes to press censorship. In the second half of 1975, after the promulgation of Emergency in June, _Freedom First_ ceased publication. The Bombay-based journal’s incorrigible democratic editor Minoo Masani had enough with the diktats of the censor. Instead of putting up with the order to prohibit eleven items from publication, he rather decided to stop publishing the magazine and also filed a case in the Bombay High Court. Fought by Soli Sorabjee on Masani’s behalf, first the judge R P Bhatt’s and later the division bench of D P Madon and M H Kania**’**s verdict saw the censorship order being quashed. With this victory, _Freedom First_ resumed its publication in January 1976. In the coming months, the pages of _Freedom First_ would see Masani’s constant railing against the Indian democracy’s authoritarian turn under Indira Gandhi. **Saving the Constitution** In response to a slew of constitutional changes brought to bolster the Emergency, Masani often cited his laurels as a founding member of the Constituent assembly to bolster his case. He also rhetorically pointed out that Indira Gandhi and her sycophants’ bid to overturn constitutional provisions was a turn away from the vision of Jawaharlal Nehru, Bhimrao Ambedkar, and Sardar Patel. Masani was, in particular, worried about the discarding of federalism due to the increased executive centralization during the Emergency. After the removal of state governments in Tamil Nadu and Gujarat, Masani lamented about the effective demise of federalism in India: ‘Now there is no State government left of a different political colour from that at the Centre. India has for the time being become a unitary state.’ For Masani, the danger of centralizing overreach lay in paving way for fissiparous tendencies. The [argument](http://www.freedomfirst.in/uploads/issues/pdf/281.pdf) went that a country as diverse as India ‘needs a federal structure’ and the lack of reasonable autonomy for states would have led to a separatist tendency. In light of the Swaran Singh Committee recommendations, Masani again defended the constitution as promulgated by India’s founding fathers. He [argued](http://www.freedomfirst.in/uploads/issues/pdf/285.pdf) that the proposed fundamental duties should be voluntary in nature, not to be enforced by the sovereign in law. Gandhi’s warning of the state as the greatest threat to human liberty was also invoked repeatedly in Masani’s writings. To him, the three essential elements of the constitution which constituted basic structure included fundamental rights, federalism and state rights, and the right of presidents and governors to dissolve the legislatures and cabinets. The 42nd amendment bill, he argued in Bangalore, had watered down the basic doctrine of the constitution in favor of a move towards ‘a centralised and unitary government’. On the importance of fundamental rights to human freedom, he [wrote](http://www.freedomfirst.in/uploads/issues/pdf/286.pdf): ‘There are certain rights that the citizen possesses that cannot be subjected to the whims and fancies of the majority of the day and these are rights that we listed and described as Fundamental Rights.’  **Advancing Liberalism** Masani clearly saw the Emergency’s threat to liberal democracy and opposed different manifestations of the threat. For him, the invocation of Emergency amidst the prevailing situation was unconvincing as there ‘was no clear and present danger to the security of the State.’ The so-called positive steps undertaken by the Emergency regime might as well have been achieved without the severe cost. For all the gross violations of human rights and suspension of fundamental rights, Masani was careful enough to see the Emergency as a limited form of authoritarianism, not a turn towards fascism or a communist dictatorship. In his analysis of the Emergency in _Encounter_ magazine (republished later in _Freedom First_), Masani couldn’t avoid the temptation of playing a prophet whose pontifications came true. The Emergency proved correct his warnings in the 1960s about the incompatibility of the democratic process with a highly controlled planned economy and public sector monopolies, [wrote](http://www.freedomfirst.in/uploads/issues/pdf/283.pdf) Masani. One of the justifications provided to legitimize the suspension of political rights during the Emergency included the promise of prosperity under a centralized, authoritarian regime. However, the democrat in Masani took the opportunity to highlight the link between democracy and economic development. He pointed out that countries with a functioning democratic system were also more successful at providing economic betterment to their citizens. On the famous Bread versus Freedom choice offered by the apologists of totalitarian regimes, Masani [made](http://www.freedomfirst.in/uploads/issues/pdf/290.pdf) his choice clear: ‘There is no clash between bread and freedom or between elections and economic prosperity. On the contrary, by and large, they go together.’ Years later, S V Raju’s [editorial](http://www.freedomfirst.in/uploads/issues/pdf/402.pdf) on the Tiananmen Square massacre in _Freedom First_ would deploy a similar argument against the CCP regime. **Supporting Resistance** _Freedom First_ not only did feature Masani’s musings on the prevailing situation but also gave coverage to the acts of resistance against the Indira regime. Interestingly though, when the Emergency was in operation, the magazine did not discuss the clandestine resistance movement and neither did it cover RSS’ role in the anti-Indira coalition. This omission can perhaps be accounted for by the liberal tenor of the editor who believed in rule of law, free speech, and public debates. Be that as it may, Masani published in the [April 1976 issue](http://www.freedomfirst.in/uploads/issues/pdf/281.pdf) the Maharashtra Bar Council’s July 1975 resolution. The resolution appealed to the President to revoke the proclamation that made the Emergency possible. The delay in the publication of the resolution can be explained by the censorship order which was later struck down by the Bombay High Court. Apart from the Bar Council resolution, the magazine also covered the draft statement on the formation of a new party that would culminate in the Janata experiment. While S V Raju was sympathetic to the initiative, his editorial took objection to ‘egalitarian’ and ‘socialist’ pieties which found a mention in the draft. Apparently, Raju’s [liberal sensibility](http://www.freedomfirst.in/uploads/issues/pdf/284.pdf) made it difficult for him to accept the new party advancing the same old socialist talking points as their opponent Mrs. Gandhi. Later, Minoo Masani would [express](http://www.freedomfirst.in/uploads/issues/pdf/292.pdf) satisfaction at the improved manifesto of the Janata Party as it dropped ‘objectionable references to an “equalitarian society” and “total planning”.’ Further, the [March 1977 issue](http://www.freedomfirst.in/uploads/issues/pdf/292.pdf) featured a sharp commentary on the suppression of Justice H R Khanna for the position of Chief Justice of India despite him fulfilling the seniority criteria. The explanation was not difficult to find: ‘Mr. Justice Khanna had distinguished himself by passing down a minority judgment asserting the right of the citizen to the writ of _habeas corpus_ even during the Emergency. _The New York Times_ had remarked that the time would come when a statue of his would be erected in every city of India.’ The same issue also covered the statement from Freedom House in honor of C R Irani who received the prestigious Freedom House Award. Irani was the managing director of The Stateman and had fought a courageous battle for press freedom during the Emergency.               **Conclusion** The Cold warrior in Masani occasionally interpreted the events of Emergency from an anti-USSR prism. Two such instances could be found in the pages of _Freedom First_ published during the Emergency. In the [May 1976 issue](http://www.freedomfirst.in/uploads/issues/pdf/282.pdf), the punctilious Masani took a shot at Law minister H R Khanna for advocating watering down of Article 226 of the Constitution which empowers High Courts to admit writ petition. Masani argued that Gokhale’s coincidental meeting with the leader of a Soviet Law delegation might have something to do with the proposed measure: ‘His Soviet mentors will have no doubt nudged the Law Minister’s elbow in case this was needed.’ Second, the [August 1976 issue](http://www.freedomfirst.in/uploads/issues/pdf/285.pdf) saw a TASS report juxtaposed with The Times one on India’s authoritarian turn. The TASS commentator took umbrage with the western critique of ‘cardinal socio-economic transformations’ of the Indira government under the Emergency. The Times report, on the other hand, captured the British discontent and disappointment with India’s recent authoritarian turn. The underlying implication for Masani was clear: Indian democrats should not be in two minds about their friends abroad. The communists in USSR certainly weren’t the ones. It was in 1977 that Indira Gandhi finally decided to lift the Emergency and conduct elections again. In the wake of Janata’s electoral success in the 1977 general election, a jubilant Masani described it as not so much a victory for the Janata Party but a rejection of the dictatorship. As a cautious democrat in vigil, he took the opportunity to [suggest](http://www.freedomfirst.in/uploads/issues/pdf/293.pdf) remedies for democratic backsliding. The recommendations included the adoption of proportional representation system, independence of the judiciary from the purview of parliamentary majority, maintenance and strengthening of federalism, and limited government. Finally, Masani’s abiding belief in the redeeming feature of common folks of India led him to argue for cultivating citizenship and a voluntary sense of service. His idea of grassroot democracy comprised of voluntary institutions like consumer associations, environment protection groups, and the Bombay Civic Trust. --- ## [Opinion] India's Nuclear Ambitions: Minoo Masani as a Liberal Peacenik URL: https://indianliberals.in/opinions/freedom-firsts-resistance-to-indira-gandhis-emergency/ ### Body The following essay explores the stance taken by Minoo Masani against India's nuclear ambitions. In doing so, Masani made a critical economic argument to deter Indian policymakers from focusing on nuclear weapons development at the time.From the time of Nehru laying the foundation of the atomic energy program, India as a nuclear power has come a long way now with its acceptance in the global nuclear regime. India’s path to the bomb and emergence as a responsible nuclear power has not been a straightforward one. Among other factors, the domestic political debate has played a crucial role in shaping India’s nuclear trajectory.  PM Nehru was a proponent of nuclear disarmament but also endorsed the peaceful use of nuclear energy for development. Nehru’s party, the Indian National Congress had an ambivalent attitude towards nuclear weapons, given its ideological commitment to Gandhian principles and Nehru’s advocacy of disarmament. In contrast, scholars Harsh Pant and Yogesh Joshi have [argued](https://global.oup.com/academic/product/indian-nuclear-policy-9780199489022?cc=in&lang=en&) that ‘the right-wing political parties such as the Jan Sangh and the Swatantra Party....have always been pro-bomb.’ This article would uncover a part of the neglected but vigorous domestic nuclear policy debate by focusing on the Swatantra Party’s stand, as enunciated by its cerebral leaders Minoo Masani and C. Rajagopalachari. Rajaji’s vigorous campaign for the nuclear test ban has been discussed in some detail here. [link my earlier sent article on Rajaji against nuclear bomb] He disagreed with the logic of the balance of threat and was deeply worried about the repercussions of nuclear rivalry for human security. The preferred method to deal with the problem, of course, stemmed from his Gandhian conviction as a unilateral moratorium amidst a bipolar arms race would amount to nothing short of moral courage and sacrifice of self-interest.  Admittedly, Rajaji seems to have leaned favorably towards Khrushchev in his writings in the late 1950s, probably because Khrushchev first politely refused to pay heed to his call and then went on to announce a unilateral test moratorium. This, for Rajaji, stood in contrast with belligerent US posturing and the doctrine of brinkmanship under John Foster Dulles. Nonetheless, he went on to meet Kennedy to make the case for the nuclear test ban. About two years after the Sino-Indian border war, the People’s Republic of China declared it to be a nuclear weapons power in October 1964. In wake of the additional nuclear dimension to India’s security challenge in the neighborhood, it fell upon Minoo Masani to articulate Swatantra’s response to the Chinese bomb. In the December 1964 issue of [_Freedom First_](http://www.freedomfirst.in/uploads/issues/pdf/151.pdf), Masani presciently argued that China’s nuclear bomb posed peculiar challenges to India and both superpowers. The bomb would help China mitigate the threat of the US-backed Kuomintang invasion of the Chinese mainland. In the case of India, a nuclear-powered China would further diminish the prospect to wrestle back the territory lost in 1962 by way of force. Already facing strains and not too far from the split, the Chinese nuclear test tilted the Sino-Soviet relation in the favor of the former.          Not only did the bomb accord military and political advantage to China, but the PRC also harnessed the reputational gain among recently decolonized Third World nations as the first ‘colored’ country to break the ‘white’ monopoly of nuclear weapons. Masani pointed out that there came no condemnation of Chinese action from African nations and the Arab world which had objected to earlier tests. The nuclear test also dealt a blow to India’s prestige based on its self-image as a contender for leading the Third World, argued Masani. What should be the Indian response to China’s rise as a nuclear power? Masani could see three possible options for Indian policy-makers. According to him, the line toed by the likes of Krishna Menon of not doing anything since it would be foolish to enter the nuclear race amounted to foolishness. Such a position, argued Masani, would lead to ‘the consequent erosion of our national independence and our gradual deterioration to satellite status.’  The other option of India going nuclear also did not seem palatable to Masani. He would cite a range of sources on the unpalatable economic costs of the Indian nuclear weapon program. Apparently, Masani stressed butter in the classic guns versus butter debate as it corresponded to India’s nuclear policy under the PM Lal Bahadur Shastri. In making the economic objection to the nuclear bomb, Masani was on the same page with Shastri and Vikram Sarabhai. On the other hand, both the influential nuclear scientist Homi Bhabha and the right-wing Bhartiya Jan Sangh made the case for an Indian nuclear bomb.  Masani’s favored option was the demand for an extended nuclear deterrence guarantee from nuclear powers against China. However, there existed an ambivalence on Masani’s side on the question of approaching the nuclear guarantor. In his November 23rd [speech](https://eparlib.nic.in/bitstream/123456789/55399/1/lsd_03_10_23-11-1964.pdf) in Lok Sabha, he was okay with India entering into an agreement with the US and USSR, either jointly or separately. His acceptance of the multilateral nuclear umbrella for India against China at this stage was in line with Shastri’s own diplomatic approach of not dithering from non-alignment on the issue of nuclear deterrence.  However, a month later in _Freedom First_, Masani outlined his clear preference for the US on the matter of nuclear umbrella. He ruled out the Soviet Union on grounds of reliability. His suspicion of communist brethren bonhomie which would be inimical to Indian interest evinced in no less measure from the 1962 Sino-Indian war. On the matter of the US nuclear umbrella, president Lyndon Johnson’s assurance of support to Non-Nuclear Weapons States against nuclear blackmail was not sufficient to Masani. In a clearly pronounced case for greater alignment with the US, he advocated for getting the US nuclear defense commitment to India as a pre-emptive measure, not a responsive action. The next major turn in India’s nuclear trajectory would come with the Pokhran-I in May 1974 which turned India into nuclear power. By this time, Swatantra Party was routed in the last general election and would soon decide to dissolve itself in August, Rajaji had already passed away, and Masani was no longer in [active party politics](https://ccs.in/masani-and-swatantra-party). The larger motive behind Indira Gandhi’s decision [Oxford Short Introduction] to go nuclear stemmed from the now uncertain status of implicit US nuclear umbrella after the US-China rapprochement scripted by Henry Kissinger. Masani’s predictable criticism of India’s nuclear shift appeared in the July 1974 issue of [_Freedom First_](http://www.freedomfirst.in/uploads/issues/pdf/266.pdf). Taking umbrage to the Washington Post’s claim of widespread jubilation in India after Pokhran I, Masani cited a host of critical editorials - including from the Indian leftist outlets and western press - to oppose the WaPo report. His own criticism rested on the infeasibility of the nuclear weapons program for a country facing economic woes.  A self-proclaimed liberal, he saw the test as a hypocritical move from the preachers of socialist doctrine. From the socialist perspective, argued Masani, the money spent on building the bomb ought to be spent on digging wells and minor irrigation projects. What of the crucial importance of nuclear power for Indian national security interest though? Masani did not exactly address this question except for taking the US nuclear aid and reactors for peaceful uses.  In any case, three things are clear from the discussion so far: Rajaji’s worry about the health fallout of nuclear tests and his constant advocacy for disarmament; Masani’s opposition to indigenous nuclear weapons program on economic grounds; and his support to India seeking nuclear deterrence guarantee, preferably from the US. The archival records concerned with the Swatantra Party’s take on nuclear policy thus belies scholar Yogesh Joshi’s argument [bundling](https://warontherocks.com/2017/03/debating-the-nuclear-legacy-of-india-and-one-of-its-great-cold-war-strategists/) both the Swatantra and Jan Sangh as pro-bomb parties. As Howard Erdman has [argued](https://www.jstor.org/stable/2755178#metadata_info_tab_contents), there was a significant divergence between the Swatantra and Jan Sangh on Indian foreign policy. The ideological and policy difference extended to the nuclear bomb issue as well with the Jan Sangh taking a more bellicose, pro-bomb approach. Thus, not only does this discussion on Swatantra’s approach to nuclear policy seeks to set the record straight on the matter, but also indicates the vibrancy and diversity within the Indian right-wing tradition. --- ## [Opinion] GG Agarkar : Modern Indian Liberal and Reformer URL: https://indianliberals.in/opinions/gg-agarkar-modern-indian-liberal-and-reformer-2/ ### Body _The social reformer Gopal Ganesh Agarkar remains a marginalized figure in public discourse. The great Indian classic liberal that he was, Agarkar championed the cause of rationality and women emancipation in colonial Maharashtra. On his 163rd birth anniversary, here is a tribute to the man._The modern liberal tradition in Maharashtra has seen many remarkable individuals furthering the cause of individual dignity and human freedom. The prominent figures include western-educated M G Ranade, P M Mehta, K T Telang; orientalist R G Bhandarkar; nationalist Bal Gangadhar Tilak; and moderate S N Banerjee, Dadabhai Naoroji and Gopal Krishna Gokhale. Among the modern liberal luminaries stands out Gopal Ganesh Agarkar, for his radical social reformism and emphasis on rationality. Gopal Ganesh Agarkar was [inspired](https://books.google.co.in/books?id=6YxpAgAAQBAJ&printsec=frontcover&source=gbs_ge_summary_r&cad=0#v=onepage&q=agarkar&f=false) from the Age of Enlightenment in Europe and the writings of Mill, Spencer, Voltaire and Rousseau which made him a proponent of scientific rationalism. His social reform agenda included women liberation, opposition to superstitious rituals, removal of caste discrimination, spread of scientific temperament and promotion of education for both men and women. Recognised by historian Gordon Johnson as the [most radical](https://books.google.co.in/books?id=4kaZV5CdzsAC&printsec=frontcover&source=gbs_ge_summary_r&cad=0#v=snippet&q=pandita%20ramabai&f=false) Maharashtrian social reformer, Agarkar is remembered best for his rivalry with Bal Gangadhar Tilak. He first met Tilak at the Deccan College where they were classmates. The Tilak-Agarkar duo went on to set up a series of educational institutions to promote literacy and social reform, and evoke patriotism among masses. The _New English School_ was the first to be founded in Pune in January 1880. The collaboration further led to the formation of the Deccan Education Society (1884) and Fergusson College (1885). Meanwhile in 1881, Agarkar also took charge of the English journal _Keshari_ as an editor where he promoted the cause of social reform, often in [conflict](https://books.google.co.in/books?id=4kaZV5CdzsAC&printsec=frontcover&source=gbs_ge_summary_r&cad=0#v=onepage&q=editorials&f=false) with other prominent nationalist leaders. The public exposure of Tilak-Agarkar duo came in 1882 due to the infamous [Kolhapur affair](https://www.jstor.org/stable/44147990?seq=1#page_scan_tab_contents). The nationalist critique by _Kesari_ of the British attempt to control the Kolhapur Raja Shivaji IV by declaring him mentally unstable led the regent Karbhari Barve to file a defamation case against the duo. While the court implicated Tilak-Agarkar in the case, the public opinion lent overwhelming support to them. The differences between Tilak and Agarkar, however, laid in their priorities for the nation which has come to define the legacy of Agarkar. Tilak focused on the primacy of political freedom with a conservative approach towards social reform while for Agarkar, social reform came ahead of political freedom. The disagreement made Agarkar start his own journal _Sudharak_ as Tilak captured control of _Kesari_ to further his revivalist nationalism. As a modern liberal Agarkar was a strong proponent of rationalism and saw morality as distinct from religion. He lent support to Age of Consent Bill and Pandita Ramabai’s Widows’ Home in Puna. However, his [critics](https://books.google.co.in/books?id=6YxpAgAAQBAJ&printsec=frontcover&source=gbs_ge_summary_r&cad=0#v=onepage&q=agarkar&f=false) accuse him of ignoring the writings and works of Puna-based contemporary caste crusader Jyotiba Phule. In assessing Agarkar’s legacy in Maharashtra, [N H Kulkarnee](https://books.google.co.in/books?id=6YxpAgAAQBAJ&printsec=frontcover&source=gbs_ge_summary_r&cad=0#v=onepage&q=kulkarnee&f=false) argues that he is adopted most prominently by the organized rationalist movement. However, his writings and activism also influenced Hindutva activist Vinayak Savarkar who sought to rationalise Hindu religion. Even the rise of Marxism in Maharashtra in 1920s was unconsciously influenced by Agarkar, an ardent devotee of John Stuart Mill! Agarkar today remains a forgotten figure outside Maharashtra. The social reformer’s radical approach though merits him a place in the national pantheon of [Indian Liberals](http://indianliberals.in/). --- ## [Opinion] GG Agarkar- Modern Indian Liberal and Reformer URL: https://indianliberals.in/opinions/gg-agarkar-modern-indian-liberal-and-reformer/ ### Body The modern liberal tradition in Maharashtra has seen many remarkable individuals furthering the cause of individual dignity and human freedom. The prominent figures include western-educated M G Ranade, P M Mehta, K T Telang; orientalist R G Bhandarkar; nationalist Bal Gangadhar Tilak; and moderate S N Banerjee, Dadabhai Naoroji and Gopal Krishna Gokhale. Among the modern liberal luminaries stands out Gopal Ganesh Agarkar, for his radical social reformism and emphasis on rationality. Gopal Ganesh Agarkar was inspired from the Age of Enlightenment in Europe and the writings of Mill, Spencer, Voltaire and Rousseau which made him a proponent of scientific rationalism. His social reform agenda included women liberation, opposition to superstitious rituals, removal of caste discrimination, spread of scientific temperament and promotion of education for both men and women. Recognised by historian Gordon Johnson as the most radical Maharashtrian social reformer, Agarkar is remembered best for his rivalry with Bal Gangadhar Tilak. He first met Tilak at the Deccan College where they were classmates. The Tilak-Agarkar duo went on to set up a series of educational institutions to promote literacy and social reform, and evoke patriotism among masses. The _New English School_ was the first to be founded in Pune in January 1880. The collaboration further led to the formation of the Deccan Education Society (1884) and Fergusson College (1885). Meanwhile in 1881, Agarkar also took charge of the English journal _Keshari_ as an editor where he promoted the cause of social reform, often in conflict with other prominent nationalist leaders. The public exposure of Tilak-Agarkar duo came in 1882 due to the infamous Kolhapur affair. The nationalist critique by _Kesari_ of the British attempt to control the Kolhapur Raja Shivaji IV by declaring him mentally unstable led the regent Karbhari Barve to file a defamation case against the duo. While the court implicated Tilak-Agarkar in the case, the public opinion lent overwhelming support to them. The differences between Tilak and Agarkar, however, laid in their priorities for the nation which has come to define the legacy of Agarkar. Tilak focused on the primacy of political freedom with a conservative approach towards social reform while for Agarkar, social reform came ahead of political freedom. The disagreement made Agarkar start his own journal _Sudharak_ as Tilak captured control of _Kesari_ to further his revivalist nationalism. As a modern liberal Agarkar was a strong proponent of rationalism and saw morality as distinct from religion. He lent support to Age of Consent Bill and Pandita Ramabai’s Widows’ Home in Puna. However, his critics accuse him of ignoring the writings and works of Puna-based contemporary caste crusader Jyotiba Phule. In assessing Agarkar’s legacy in Maharashtra, N H Kulkarnee argues that he is adopted most prominently by the organized rationalist movement. However, his writings and activism also influenced Hindutva activist Vinayak Savarkar who sought to rationalise Hindu religion. Even the rise of Marxism in Maharashtra in the 1920s was unconsciously influenced by Agarkar, an ardent devotee of John Stuart Mill! Agarkar today remains a forgotten figure outside Maharashtra. The social reformer’s radical approach though merits him a place in the national pantheon of Indian Liberals. type=content&p=1563). Needs editorial review._ --- ## [Opinion] G.G. Agarkar : Revisiting a Misunderstood Legacy URL: https://indianliberals.in/opinions/gg-agarkar-revisiting-a-misunderstood-legacy/ ### Body _ Agarkar’s commentaries may be carrying a tinge of the 'enlightened despotism' that was the characteristic of philosophical radicals, but his works are still very useful to understand his diligence to expose common people to liberal-individualistic ideas._ Agarkar is most frequently remembered as a 'friend-turned-opponent' of Tilak. In Maharashtrian popular culture, Agarkar perhaps got this hyphenated identity that was seldom devoid of a reference to Tilak. I too got acquainted with Gopal Ganesh Agarkar through Tilak. Agarkar was an equal of Tilak in terms of his love for the land and intellectual prowess. Tilak's meteoric rise as a national leader was owing to his appealing and aggressive rhetoric. He had to tone it down as he widened his world-view after becoming a national leader. But Agarkar, his prison-mate of one time who later became a compeer, maintained his moderate and liberal positions all along.   Agarkar is commemorated for his work as a social reformer, as a rationalist and as an educationist. However, it is safe to say that even after 125 years of his demise, academicians failed to objectively understand and recognise his positions on many issues especially the ones on economics.  He often wrote essays commenting on the nature of discourse on economics prevalent during his time.  His essays are of particular significance to understand where exactly he stood as a 19th -century liberal and to comprehend the philosophical influences that propelled him to take those positions. The two essays that reveal his economic thoughts are titled ‘_Teen Arthashastre’ - _which can be broadly translated as ‘Three Strands of Economics’.  He opens his first essay with the analogy of an ongoing 'Tug of war' between what he called the extremely ignorant people of India on one hand and an extremely self-serving British government in India. And the liberal-intellectuals in the society were dismayed by the self-serving policy initiatives of the British government and equally by the lack of logic in Indian demands for economic redressal. As a member of the third party of intellectuals, not aligning with the views of the government or the vast majority of Indian nationals, he advanced suggestions for both the government and the people of India. Economics is about production, distribution and transactions or exchanges. India had a grave problem concerning all three aspects. India’s production was diminutive and thus the wealth produced was limited. Therefore, the other two factors of a healthy economy were also impaired. This was a result of the foreign rule in India. Agarkar categorized the then-existing views on economics under three labels. These can be broadly called Axiomatic or Classical Economics, Practical Economics and Illusory Economics. We shall discuss the three categories of the then prevalent thought in the same sequence as Agarkar did.   As per the tenets of Classical Economics, a government should stay away from interfering in production, distribution and trade in general. However, the British government in India used this very principle of non-intervention to ignore the grave economic conditions and to turn a blind eye toward the debilitating effects of its economic policies. It was obvious to Agarkar that the government chose to be brazenly opportune and abide by this principle where it helped serve the British national interest and it blatantly violated the same principle when it was not beneficial for its national interest. Given the complex political relationship between the British government of India and the Indian people, the conventional rules of economics wouldn't apply to the Indian conditions. According to Agarkar political freedom and economic freedom were inextricably intertwined and he was convinced that Indians would have to win them back in the same sequence in which they lost those to the British. He further argued that the British held India as a precious possession not because they cared for India or her people, but because India was geographically important in continuing the trade with other Asian countries. The colonial masters valued India for the access it granted to Britain to the distant parts of the orient. The trade via India benefited the British more than their occupation of Indian possessions and the Indian resources. Agarkar pointed out that India never had a consumerist culture. Wantonly enjoying different goods and services was yet to be deemed normal. This was one of the reasons why Indians never developed the skills, talents and means required to produce goods. Ironically, Indians had to depend on the British even for the essentials that could be easily and cost-effectively produced in India. This led to the infamous economic drain and rendered the nation vulnerable to rustification.  This begs a question that if the economic ordeal was real and so overt, then how did the government manage to govern India for decades after the first spark of consciousness among the Indian intellectuals? The answer lies in the fact that the government mastered the art of controlling the impoverished masses by offering temporary relief in various ways. At times the government appointed a commission when the popular discontent was too conspicuous. On some other occasions, it offered some concessions to the farmers. Yet another time it dug canals and wells, distributed seeds of cotton or wheat, established farms to carry out experiments or even established veterinary hospitals. Apart from these usual methods, Agarkar touched upon two more ways in which the government used its power supposedly for the redressal of grievances. One, the government at times sought to save the peasants by inflicting costs on the landlords - by pitting the classes against each other.  Secondly, the government opened up a ministry to manage agrarian affairs and manned it with intelligent bureaucrats. They had a lucrative remuneration for which Indians paid through their tax money. The government did all of this in the name of ‘agrarian reforms’ but none of the so-called reforms elevated the lifestyle of crores of poor Indians fundamentally.  As Agarkar put it "the fatal and deep wound of systemic impoverishment (that the economic policies of the government) inflicted on Indians could not be healed by mere band-aids." No amount of temporary relief could improve the economic condition of India. If India had to recover and reinvigorate herself, it would take some serious effort - a reliable 'tonic'.  Increasing the volume of the production (and subsequently trade) was the only suitable tonic that could impart vitality among Indians. He argued that countries like France, the United States of America, Germany, Italy, Russia, Japan, Switzerland and even England worked toward increasing the trade when their industries were at a nascent stage. But, when this historical fact was brought to the notice the British officials would respond frantically as if the laws of classical economics had always been sacrosanct for them. “Indian thinkers like Justice Telang, Justice Ranade and Dadabhai Naoroji had devised ways of stimulating Indian industries, commerce and agriculture without violating the laws of economics. But to what end?” Agarkar didn't hide his pessimism about the British nonchalance when he declared that these sane voices were falling on deaf ears. "Afterall one can be woken up from slumber if they are asleep, how can a person who pretends to be asleep be woken up?" - questioned Agarkar.    Given the nature of British rule, Agarkar concluded that the general laws of classical economics were not entirely suitable for the then prevailing conditions. His explanation for deviating from classical thought was that the principles of classical economics cannot be applied to every society as their applicability hinges upon the level of economic development in a given society. Typically the new colonies or underdeveloped countries require some modifications.  'If there are compelling reasons to believe that industry, if promoted, for the time being at least at the outset, can flourish and if it creates self-sustainable enterprises, it won't require the support of the state then such an industry should be incentivized by the state.' This state support would be purely temporary. This was the second and less prevalent view called Practical Economics.  It was the one that Agarkar adhered to. However, this was his second-best and he considered it a transitional arrangement to reach the ideals of Classical Economics.   The Indian public intellectuals such as Agarkar and economists like Ranade demanded a specific, temporary and transient role for the state - one that of a facilitator for free trade and industry. But the British government naturally showed the proclivity to protect the British businesses from any emergent competition. More so, if it was coming from the natives. On the other hand, Agarkar was also concerned with how many Indians extolled the so-called virtues of Indian products.  He ridiculed them as people with a 'misplaced sense of patriotism’. He placed them in the third category of those who believed in Illusory Economics. Dismissing the false sense of being useful to the nation that one may derive by promoting Swadeshi, he declared that 'no one has ever benefited from buying a costly product just because it is (swa)deshi’ or made in India.  Agarkar was convinced that both the British state and the Indian people had something in common. The extremely self-seeking character of the government and the naivety of the common people in India indeed had a point of concurrence - both the Indians and the British fell for protectionism of some sort. It clarifies that Agarkar wanted the state to create good conditions for industries to increase production, trade and commerce. He did not seek protection. His unequivocal rejection of the preferential treatment to products based on the place of their origin and opposition to state or society sponsored protection to businesses is testimony to his belief in fair play and competition.        A seasoned economist may find his methodology questionable because Agarkar was not an economist. He was still an educationist and editor who believed in liberty for all and all walks of life. Yet he had convictions much like the philosophical radicals in England. The influence of Mill on Agarkar is conspicuous. Agarkar’s commentaries may be carrying a tinge of the 'enlightened despotism' that was the characteristic of philosophical radicals, but his works are still very useful to understand his diligence to expose common people to liberal-individualistic ideas. --- ## [Opinion] Hamid Dalwai and the Muslim Satyashodhak Mandal URL: https://indianliberals.in/opinions/hamid-dalwai-and-the-muslim-satyashodhak-mandal/ ### Body _The Muslim Satyashodhak Mandal believed that the sanctimonious people from all major religions in India have escaped from accepting modern secularism in its truest sense and have resorted to a fraudulent term called ‘Sarvadharma samabhav’._In order to explain the true nature of communalism in India, Hamid Dalwai – a Marathi social reformer drew a parallel between India and Europe in his book _Rashtriya Ekatmata ani Bharatiya Musalman. _ He takes us back to the times when Arabs invaded Europe through Gibraltar in A.D 711. Arabs reached Tours (France) by A.D 732, in 21 years. After reaching Tours they steadily met with defeat and their campaign lost its steam. The Christians initiated a pushback, however, this process of winning back – Reconquista, took a long time. This process was over with the fall of Granada in 1492. This process of the Arab invasion and the Christian Reconquista indicates a complete cycle in the medieval history of Europe. The accounts of these invasions, conversions and even Christian inquisitions are well documented by European scholars. Hamid Dalwai argued that a similar process started in India when Mohammad Kasim invaded Sindh in A.D. 711. Interestingly enough, according to Dalwai, India’s communal problems exist because the aforesaid cycle that occurred in Europe did not take its full course in India. Therefore, a sense of disappointment engulfed the radical sections of the Muslim community for they couldn’t fully Islamize India and because they had to lose the power to the British. On the other hand, many Hindus regret their inability to salvage the situation the way Christians successfully did in Spain. (Dalwai, 2012, p. 26) Hindus not only couldn’t turn the tide but they also had to settle with a partition. In Dalwai’s words, ‘India couldn’t become Spain but she did not become Afghanistan either’. The historic conflict has led us to deadlock and the inability to resolve it has been a characteristic of late 19th and early 20th century India. This communal deadlock has also shaped the politics, history and geography of modern India and has left deep impressions on the thought processes of the two major communities in the subcontinent. **Indian Muslims after Independence****  ** The partition of India rendered the Muslims in India politically more vulnerable. (Kazi, 1996) In the face of uncertainty and insecurity, Indian Muslims responded in two major ways. Some traditionalists looked at the modern Indian Constitution as a _Mahida_ between Hindus and Muslims. Mahida refers to the contract that extended concessions to the religious minorities in the form of religious liberties and guarantees of non-intervention on the part of the state. But Dalwai argued that the same section that demanded religious autonomy also demanded government jobs in proportion to their numerical strength. (Dalwai, Swatantryottar Kalatil Muslim Rajakaran, 1996) This philosophy was dependent on a two-fold strategy of stating equal claims on national resources and at the same time refuting the superiority of political authority of the state over the religious authority. Unfortunately, the prime political parties in India exploited the insecurities and flirted with these retrograde sections.        On the other hand, there were social reformers like Dalwai and progressive organizations like the Muslim Satyashodhak Mandal (henceforth Mandal) who could see the regressive nature of the demands of the orthodoxy. They envisaged a truly secular nationalism based on equality. Therefore, the Mandal took an unequivocal stance against the demands for religious autonomy which they thought were akin to the Muslim League’s demands before independence.  After the partition, forging a secular compact among people (not communities) and secular institutions was perhaps our best chance at containing communal tensions and starting afresh by shedding the burden of history. The challenge was to create a society devoid of caste and religious discrimination. Working for the upliftment of women was indispensable. Jawaharlal Nehru’s government introduced and passed the Hindu Code Bill in 1955-56, defying the Hindu orthodoxy; however, his government couldn’t reform the unjust laws affecting Muslim women. Nehru clarified his intentions of introducing a uniform civil law applicable to both Hindus and Muslim in the future as soon as the community was amicable to such an idea. (Muslimancha Anunay, 2017)    The Mandal was convinced that a Uniform Family Code  is the only way to safeguard the women and their equal rights, to reform the community and impart a sense of national unity based on equal citizenship. Their support had a firm philosophical grounding in the modern principles of liberty, equality and most importantly the superiority of political authority as against religious authority. To understand what they stood for, we must look at what they stood up against. **Muslim Orthodoxy Deciphered** In its publication, the Mandal highlighted some problems with the psyche of the orthodox Muslims in India. In their observation, the Muslims who opposed the Uniform Civil Code had not developed the attitude necessary for living in a modern democracy. It was so because some still relished in the nostalgia of the medieval era when India was under Islamic dominance. According to the Mandal, many of them were yet to reconcile with the modern democratic institutions based on secular principles. (Saman Nagari Kayda, 2017, p. 32) The apprehensions of Muslims about Hindu collectivism and dominance under the democratic system were valid. But there were no signs of Muslim organizations arguing in favour of liberal constitutionalism which expects both the constitution and the state apparatus to be subjected to the principle of rule of law. The Mandal pointed out when the Islamic countries enacted new laws based on reformist interpretations that were suitable for modern times. These legislations were introduced by making changes to Sharia.  But the orthodoxy didn’t want the Indian parliament to enact laws even if they were in the best interest of Muslims. Some stretched it so far as to argue that Sharia is divine and thus sacrosanct. Going by this logic, no person or political authority including the ones in the Islamic world had the sanction to change the Islamic law.  Another group among the traditionalists argued that the Indian constitution granted rights to the minorities to protect their language, culture, and religious identity; they further added that the Indian Constitution recognizes and protects the personal laws that originate from Sharia. That is exactly why personal laws cannot be tempered. They questioned the sovereignty of the Indian parliament and upheld the religious laws as superior. (Saman Nagari Kayda, 2017) The attempt to alter these laws, according to them, would be tantamount to violation of the Indian Constitution. This attempt of using the constitution as the shield was seen as unfortunate by the Mandal. These socio-religious constructs and the notion of the infallibility of religious scriptures made Muslims too sensitive to have any reasonable discussion, change or reform, claimed the Mandal in its publication. (Dharmanirapekshata, 1996, p. 56) **Limiting Religion to the Private Sphere - Concepts of Aadat and Ibaadat** The Muslim Satyashodhak Mandal opined that the State had to work towards the introduction of the Uniform Civil Code. They outrightly rejected the argument that Sharia is a divine law created by God. They reasoned that the concept of religion encompasses two core ideas – namely, ‘Aadat’ and ‘Ibaadat’. Aadat deals with temporal affairs or the world that we live in. The other concept of Ibaadat is concerned with all that is spiritual. This broad distinction lies in the fact that what falls under Aadat is amendable, whereas the other part - Ibaadat should be protected by the state. However, most fatwas issued by the clergy deal with daily life and worldly matters. Laws that govern our lives are always made by society or people. Thus, Mandal believed that laws cannot be associated with the divine and the authority to govern the society must remain with the state and not with any religious institution. The Mandal was certain that where worldly affairs are segregated from the spiritual life, the religious liberties can remain relatively untouched. Rather the Mandal argued that the worldly aspects enshrined in any religious scripture must change as per the changing requirements of the society. The possibility to amend the way of life is what brings the much-needed flexibility that can in turn help us protect the cherished tenets and values of our respective religions. (Saman Nagari Kayda, 2017, p. 35) While the Mandal favoured managing worldly matters at the hands of the political authority, curtailing the pervasiveness of the religion, it also had a stated objective of destroying the clergy’s monopoly. Based on the aforesaid arguments and based on the philosophy of the Preamble to the Indian constitution, the Mandal believed that article 44 directs the State to work towards legislating to bring about social welfare and reform. However, only the power to legislate doesn’t suffice. These laws will fall short of achieving their stated objective if the mental make-up of people does not change. (Mukadam, 1996)   **Plea for Secularism, not Sarvadharma-Samabhav** The Muslim Satyashodhak Mandal believed that the sanctimonious people from all major religions in India have escaped from accepting modern secularism in its truest sense and have resorted to a fraudulent term called ‘Sarvadharma samabhav’. India is a country with multiple cultures, religions, sects and innumerable castes. There are religions, sects and castes that have contradictory traditions and customs. How can they all practice their customs together at the same time? How can a mongoose and a snake dwell in the same house? If neither wants to die, the only solution would be to make them both change their nature. Sarvadharma samabhav cannot achieve that. Because the term implies that if a particular religious institution is supported by the state, a similar concession is also to be extended to the institutions of other denominations. This will eventually culminate in a competition between religions. Which demands will the state fulfil? How far can it make concessions and favours to the religious denominations? And a more fundamental question is, what are the functions of the state? Why was the state created in the first place? It would defeat the whole purpose of the state if it degenerates into machinery stimulating religious institutions and (unduly) protecting religions.    Mandal firmly believed that only Secularism can help us. It drives religion out of the public sphere but it protects religion in private life. Secularism recognizes the right to practice any religion, any way of worship so far as it is contained in the private sphere. It does not support or promote religion. Secularism also stands for the recognition of the right to not believe in any religion.  The question persists, as to why we should read the works of Hamid Dalwai or the works of members of the Muslim Satyashodhak Mandal? They were social reformers whose economic ideas were more or less in tandem with the social democrats in the Congress or the Socialist Party. However, their political and social ideas were rooted in individualism. “India [Indian Constitution] has put restrictions that prompt the society to take the path of secularism. The religious liberties have been bestowed upon the individual, not religions.” (Dharmanirapekshata, 1996, p. 57).  The works of Hamid Dalwai and the Muslim Satyashodhak Mandal have been consciously written in a regional language and without any jargon of the academic language. The main reason behind such a practice is the firm belief in making the public politically informed, with the hope that if the citizens have an informed opinion, they are less likely to be swayed by the rhetorics of the political elites and the clergy. These works have a greater value than just being one more addition to many political ideas because they aim at releasing the citizens from being held emotionally hostage by people in power. --- ## [Opinion] Justice H.R. Khanna and the Art of Speaking Truth to Power URL: https://indianliberals.in/opinions/hans-raj-khanna-justice-speaking-truth-to-power/ ### Body _“The smallest minority on earth is the individual. Those who deny individual rights cannot claim to be defenders of minorities.”  ― Ayn Rand_“What is the cost of one’s voice – one man’s dissent?” – The life of Hans Raj Khanna depicts utmost courage and the hefty price paid for such courage.  Hans Raj Khanna was born in 1912, in Amritsar, Punjab. He was the son of lawyer and freedom fighter Sarb Dyal Khanna who later took charge as the Mayor of Amritsar. He was an alumnus of the DAV High School, Amritsar, the Hindu College, Amritsar and Khalsa College, Amritsar. Once he completed his Bachelor’s degree in Arts, he went to the Law College, Lahore and pursued his legal education. Post his graduation, he practised law (primarily civil) in Amritsar and grew & maintained his practise until his elevation to the bench in 1952. In September 1971, he was appointed as a Judge at the Supreme Court of India. Apart from tracing his academic and professional achievements, his contribution to the protection and growth of the **Right to Life and Freedom **is of grave importance, especially in the contemporary national as well as global context. The Emergency period of 1975 – 1977 is one of the darkest eras of Indian democracy, if not the most. A large number of people had been detained without trial under the regressive Maintenance of Internal Security Act. Several High Courts had given relief to the detainees by accepting their Right to Habeas Corpus as stated in Article 21 of the Indian Constitution. This issue was debated upon in the case of the Additional District Magistrate of Jabalpur v. Shiv Kant Shukla, popularly known as the Habeas Corpus case, which came up for hearing in front of the Supreme Court in December 1975.  Considering the precarious nature of this subject, five of the most senior judges of the Supreme Court of India were appointed to hear this matter. Avoiding technical and legal jargon and flowery wordplay, the crux of the matter to be debated upon was quite simple – **Whether the citizens of India have the right to approach the court for the enforcement of their Fundamental Rights during the declaration of Emergency? **The Fundamental Right in question was primarily the Right to Life secured under Article 21 of the Indian Constitution.  To a lay man or any man with a reasonable moral compass, it would appear that the Right to Life or his mere existence in safety and freedom should be given most importance. However, au contraire, the learned judges of the Supreme Court had an opposing viewpoint and went about declaring a Judgment to the effect that the Fundamental Rights and their enforcement stand suspended during the time of Emergency. Four of the judges of the Constitution Bench had agreed to this stance and Justice H. R. Khanna was the lone dissenting voice to this opinion.  While giving his dissenting opinion, Justice H.R. Khanna was quite aware of its implications and the lack of enthusiasm of the bench with regard to dissenting opinions. However, he was not ready to sacrifice his opinions for the ‘apparent unanimity’ of the judgment, especially when he had such strong opinions regarding the same. He explained the same in the judgment and stated that -  “_I am aware of the desirability of unanimity, if possible. Unanimity obtained without sacrifice of conviction comments the decision to public confidence. Unanimity which is merely formal and which is recorded at the expense of strong conflicting views is not desirable in a court of last resort.……… A dissent in a court of last resort to use his words, is an appeal to the brooding spirit of the law to the intelligence of a future day, when a later decision may possibly correct the error into which the dissenting judge believes the court to have been betrayed_.” Like he mentioned in this judgement, his dissent has made its mark in the history of the judiciary and became a reference point for the judgments to come. In his dissenting opinion in the Judgment, he upheld the values of man’s liberty and how it should be preserved at all costs. In plain terms, the Constitution is to exist for the protection and liberty of a citizen and it should not be used as a tool to deprive a man of his birth rights of Life and Freedom. This can be understood as a rather morally upright and simple reasoning for this matter of grave importance. He had analysed the role of Article 21 and its position as the safeguard of any individual’s fundamental right to life and liberty -   _“__It is urged that article 21 is the sole repository of one's right to life or personal liberty. The moment the right to move any court for enforcement of article 21 is suspended, no one can, according to the submission, complain to the court of deprivation of life or personal liberty for any redress sought from the court on that score would be enforcement of article 21. Petition under article 226 for the issue of a writ of habeas corpus, it is contended by learned Attorney General, is essentially a petition to enforce the right of personal liberty and as the right to move any court for the enforcement of the right conferred by article 21 is suspended, no relief can be granted to the petitioner in such petition.__”_ Contrary of the pleadings of the Attorney General, Justice H. R. Khanna was of the opinion that Article 21 should not be the sole guardian or enforcer for rights of an individual. He was a scholar of the school of natural rights and went on, in the judgment, to elaborate upon how the rights of an individual exist in a free world. In a vacuum, devoid of law and state mechanism, the individuals are still entitled to basic natural rights to live in peace and prosperity. Therefore, he was of the view that the Right to Life existed freely in a civil society and was not an additional benefit or safeguard provided by the Constitution or the State. The Constitution merely upholds the already existing rights and provides a thorough framework to ensure each individual access to his freedoms and rights in case of deprivation.  The Constitution of India does not explicitly mention the term Natural Rights. The bench recognised that the Fundamental Rights ensured in the Constitution is nothing but the natural rights. The following excerpt was taken from the conclusions made by Justice H. R. Khanna–  _(1) Article 21 cannot be considered to be the sole repository of the right to life and personal liberty. _ _(2) Even in the absence of article 21 in the Constitution, the State has got no power to deprive a person of his life or personal liberty without the authority of law. The essential postulate and basic assumption of the rule of law in every civilised society._ _(3) According to law in force in India before the coming into force of the Constitution, no one could be deprived of his life or personal liberty without the authority of law. Such a law continued to be in force after the coming into force of the Constitution in view of article 372 of the Constitution._ _(6) According to article 21, no one can be deprived or his life or personal liberty except in accordance with procedure established by law. Procedure for the exercise of power of depriving a person of his life or personal liberty necessarily postulates the existence of the substantive power. Then article 21 is in force, law relating to deprivation of life and personal liberty must provide both for the substantive power as well as the procedure for the exercise of such power. When right to move any Court for enforcement of right guaranteed by article 21 is suspended, it would have the effect of dispensing with the necessity of prescribing procedure for the exercise of substantive power to deprive a person of his life or personal liberty, it cannot have the effect of permitting an authority to deprive a person of his life or personal liberty without the existence of such substantive power.__”_ The conclusion emphasizes that the Right to Life and Liberty is the forerunner to the Constitution in itself. The Constitutional provisions are mere safeguards and facilitators for these existing natural rights and thus, the state mechanism cannot use the same to deprive man of these basic natural rights – as one does not have the authority to take away something that was not his to give in the first place.  The Constitution should not take away the rights of man and his redressal mechanisms to regain his rights. The due process of law is not something to be taken lightly. The law does provide for Preventive Detention in matters of internal security and for the prevention of unlawful activities. However, preventive detention can also be challenged in a court of law as there exists provisions for the same. The due process of law exists to make sure that there is no misuse of powers and Justice H. R. Khanna was adamant on his stand that the majority opinion stifles the Right to Life and Freedom of man and furthermore disregards the due process of law. He believed their interpretation to be flawed and detrimental to liberal values. And thus, even today, his dissenting opinion is an important text in the judicial history of India and as well as in the context of the development of individual liberty in India. The Constitution of India provides for a system of Separation of Powers, where there exists an independent Executive, Judiciary and Legislature. These three organisations are to function independent of each other with utmost good faith so as to uphold the values of Democracy. However, what followed this judgement was a rather dismal turn of events. Due to the pressure from the Executive, contrary to the usual practice of appointing the most senior Judge of the Supreme Court as the Chief Justice of India, Justice H.R. Khanna was surpassed by Justice M.H. Beg as the Chief Justice of India. It was intended as a blow to him for his dissenting opinion on the matter.  He promptly handed over his resignation and left the office in great dignity following this matter. Furthermore, once Former Prime Minister Mrs. Indira Gandhi lost the election of 1977, the newly victorious Janata Party offered him the position of the Head of the Commission of Inquiry against the illegal imposition of the Emergency and the various atrocities committed under the garb of the same. However, he courteously refused the position as he felt that he would appear to be biased against the Former Prime Minister Mrs. Indira Gandhi.  In my personal opinion, this truly depicts the sheer grace and high moral standards of H. R. Khanna. Even though he was in the right, the man truly followed the first principle of Natural Justice which states that _no man shall be the judge of his own cause_.  With reference to the words of eminent philosopher and writer Ayn Rand, H. R. Khanna was able to be the defender of the smallest minority of the world i.e., an individual, during one of the darkest days of Indian Democracy, where the letter of the law was sharpened against any voice that spoke against the State.  Thus, Justice H.R. Khanna deserves his own niche and spotlight in the history of the growth of liberalism in the Indian context. He pushed forth the values of liberty in a time where it was being muffled by the State, and that too, at the cost of a glorious career. His rigid stand in what he believed and grace in self conduct make him a hero the contemporary world deserves more to know about. --- ## [Opinion] Harish Chandra Mukherjee - A less known liberal URL: https://indianliberals.in/opinions/harish-chandra-mukherjee-a-less-known-liberal/ ### Body In the pre-independence era, two editors left an indelible mark on Indian journalism. Both of them were Bengalis. While one has been described as the father of Indian journalism, the other was a** **crusading commentator on events of his time. Ramachandra Chatterjee was the editor of The Modern Review (1907-1965) while Harish Chandra Mukherjee of Hindu Patriot (1853-84). Starting his career with writing bills, letters, petitions, and translating Bengali documents to English, he rose to the highest position an Indian could aspire for in those times - that of an assistant military auditor. In 1852 he joined the British India Association - becoming a man proficient in politics, leadership, history, and law. Harishchandra’s political and social views found expression in Hindu Patriot - an English weekly published under the proprietorship of Madhusudhan Roy, a Burrabazar banker. By 1856, he became the in-charge of writing and editing, coming forth nightly in support of Ishwar Chandra Vidyasagar who had launched a movement for introduction of remarriage for Hindu widows. For Harishchandra, politics and journalism were inseparable. Through his writings he fought against the onslaught on women, both as economic agents and as people. He wrote against the oppression of indigo planters, leading to the appointment of a commission of enquiry. His active years coincided with a event that is considered by many historians as the first war of independence - the revolt of 1857. Although the British managed to crush the revolt in the end, it was a direct attack on them in which regional rulers got together against foreign rule. They soon realized that in order to govern India, it is necessary to adopt stringent controls which meant liquidation of the East India Company and transference of its functions to the British crown. This led to imposition of direct rule by the British government and the shaping up imperialistic ambitions. Using principles of natural justice and fairness, Harishchandra sharply criticized the profligate use of Indian resources and indiscriminate practices employed by planters in Bengal. He assisted them, remarking: _"I invariably advised them to apply to the district authorities in the proper form for redress, and to go to the next appellate authority, if they found no redress at the hands of district authorities. I cautioned them against ever committing breaches of the peace, or committing themselves in any manner by acting illegally. I explained to them that the operation of the Act was temporary, and that better measures would be devised next year, when I was sure that they would be free to take or not to take advances. I generally advised them to seek for redress in Civil Courts, a mode of proceedings which I found was much less resorted to, than it should have been.”_ It is pertinent to mention here that there were some intellectuals such as Rammohan Roy and Dwarkanath who defended indigo planters as a class of entrepreneurs who wanted to raise the productivity of land and improve the condition of rural populace. Ultimately, Harishchandra’s demand for setting up a commission of enquiry to enquire into the charges levied by ryots against the planters was accepted. With Sector Karr as chairman, the commission found various instances of abuse and prejudiced practices being employed by planters and ordered remedial measures to be adopted. Some other issues brought forth by the Hindu Patriot were female education and widow remarriage. The columns in the paper supported legalizing widow remarriage and female education - asking people to follow the footsteps of Drinkwater Bethune - the lawyer who started a secular school for females in Calcutta. In those times, female education was seen as antithetical to the religious beliefs of Hindus, particularly Brahmins. While liberals such as Vidyasagar, Harishchandra and Dwarkanath supported it, the orthodox society reacted by saying: “Whatever was left of Kali Yuga (age of darkness), has come.Once the girls get hold of the books, nothing will be left.” In spite of financial crunches in the late part of the 19th century, Harish Chandra;s paper stood out as a highly influential paper. After his death Kristo Pal became its editor. He avowed British liberalism and offered vigilant criticism of government measures. Harish Chandra may be remembered as a not so conspicuous contributor to Indian journalism, boldly remarking: _“Can a revolution in the Indian Government be authorised by Parliament without consulting the wishes of vast millions of men for whose benefit it is proposed to be made.”_ type=content&p=1581). Needs editorial review._ --- ## [Opinion] Hauling Down the Angels URL: https://indianliberals.in/opinions/hauling-down-the-angels/ ### Body **_Founders and investors in India have been roiled by the angel tax controversy. Who is responsible for this looming crisis and has the government found ways to address this issue?_** In 2016, the newly formed government launched the startup India initiative to nurture innovation and promote startups in the country. This initiative, inter alia, set up a corpus of 10,000 crores for the purpose of funding startups and gave tax exemption on capital gains invested in fund of funds (FOF). But not all is well in the Indian entrepreneurial story. The central government is facing flak from start-ups for issuing them notices every now and then about something called “Angel Tax”. This tax was introduced in the Union Budget of 2012 by then Finance Minister, Pranab Mukherjee. It refers to income tax payable under section 56 (2) of the Income Tax Act, 1961 payable on capital raised by unlisted companies through the issue of shares where the price of the shares sold is considered exceeding the fair market value of those shares. The difference amount is reckoned as “income from other sources” and taxed at the rate of 30.9%. So a startup receiving equity in excess of its fair value will be taxed. Consider for example Company A whose shares are valued at Rs. 1000 each sells them to an angel investor for Rs. 1500, the difference of Rs. 500 would be treated as income and not as investment. India being one of the youngest nations in the world, skill development, entrepreneurship and commensurate job creation are vital for harnessing the potential of our youth. With many early stage startups being harrassed on account of raising money, the concerns of budding entrepreneurs and investors (under Section 68 of Income Tax Act, 1961) have resurfaced. This has resulted in 40% reduction in angel investment and seed funding, much to the disappointment of young startups in the country. Several high profile investors have been vocal about expressing their displeasure with the government over this. In December 2017, former Infosys board member Mohandas Pai tweeted to finance minister Arun Jaitley: _@arunjaitley: Sir Start ups are getting harassed by IT for raising Capital,threatening to consider it as income!very bad scene and very many are angry and upset,may shift overseas.Appeal process broken, takes 15 years. Pl intervene, @OMOIndian @narendramodi @amitabhk87 @rprasad_ Tweeting in support of abolishing angel tax, billionaire entrepreneur Kiran Mazumdar Shaw tweeted: _Why is the Modi Govt blundering on the Start-up economy by recklessly introducing a tax on angel investments?  This will only drive away investments overseas n starve Indian start ups. @NITIAayog __ n MoF r failing young entrepreneurs n even killing jobs. @PMOIndia @TVMohandasPai_ **So why was this tax brought in?** Touted as an anti-abuse measure, angel tax was introduced in 2012 to curb money laundering. The rationale was that grafts and black money could be disguised as angel investment so as to evade taxes. Although the issue of angel tax has been stewing over among startup founders and angel investors for quite some time, recent trouble erupted in November 2018 when the Ministry of Consumer Affairs (MCA) sent notices to over 2000 startups that had raised money since 2013. In some cases, startups received notices levying taxes amounting to almost 40-50% of the total income raised. After startups, investors started receiving notices, asking them to explain the valuation of the company they had invested in. **Was it an ill-conceived move?** The intention may have been good, but the government was not mindful of the problems that could arise out of it. How does a taxman value a startup? Don’t valuations change quickly with time? Is there a credible formula that can be used to ascertain the fair value of a startup? For startups with little or no revenue and dicey futures, the task of valuation is very tricky and cumbersome. The cost to duplicate method which is often the starting point of valuing startups is not error-free. It uses objective variables, but does not capture intangible assets and therefore does not accurately reflect a startup’s future potential (profits, sales, returns, brand value, etc.) Another method used is the Discount to Cash Flow method. It involves forecasting the cash flows which the company will generate in future. The trouble here is that it depends overmuch on the analyst’s ability to forecast the future market landscape and make assumptions about how a company will perform in the long run. Thus, it is extremely difficult to estimate the future value of a company when it is still in its infancy. Well established methods for valuing mature companies do not work in case of startups. **Way forward** Sources of funding may be unscrupulous in certain cases, but being cynical and disbelieving of the valuations submitted by startups is not conducive to businesses. While speaking at the third edition of the National Entrepreneurship Awards this year, Minister of commerce and industry and civil aviation, Suresh Prabhu stated that the government is completely supportive of entrepreneurs and all possible efforts are being made to solve the regulatory and financing issues for enterprises. Investors and entrepreneurs are hoping for an instrumental change in the current policies so that the startup ecosystem in the country is promoted for the benefit of all and sundry. There is an impending fear of investors backing out of funding new startups for fear of being caught up in litigations. In an economy that is hardly producing jobs, having a tight bureaucratic structure may not bode well for those wanting to set up their own enterprises. An anti-evasion provision that should punish people who use startups as a way to launder money and turn black money into white is becoming a problem for genuine, honest investors. After much backlash, the government last week eased the process of startups seeking tax exemption on investments made by angel investors. It notified changes to section 56 of the IT Act for easing startups gain recognition. Startups need to send an application to DIPP which will then be scrutinized by the Central Board of Direct Taxes (CBDT). However, in order to be eligible for exemption, the startups need to fulfil certain criteria. They will be required to furnish bank account details and return of income for the last three years. The exemption limit has been raised to Rs. 50 lakh from the earlier Rs. 25 lakh for financial year preceding the year of investment. Also, the earlier requirement of a startup having to submit a fair value certificate from a merchant banker specifying the fair market value of shares has been done away with. New and young establishments will shape the growth story of this country. Government initiatives for such as Startup India, Standup India and Skill India will not yield results with rigorous tax laws discourage youngsters from setting up new businesses. The government should revisit the valuation methodology and come up with a balanced policy that does not harass a promising community of startups in this country. With millions of young people joining the labour force every month, stifling entrepreneurship and innovation will be disastrous for one and all. type=content&p=1584). Needs editorial review._ --- ## [Opinion] Homi Mody’s Liberalism: From Pro-Business to Pro-Market URL: https://indianliberals.in/opinions/homi-modys-liberalism-pro-business-to-pro-market/ ### Body _For Homi Mody, excessive regulation and increased outlays on planning posed a threat to economic freedom inherent in a democracy. He would use the business organisations' platform to voice his criticism._On the ideological inclinations of Indian business houses in the colonial era, Political Scientist Stanley Kochanek makes an interesting generalisation. The Bombay-based business houses sought to cooperate with the British Raj while the Marwaris were mostly aligned with the Gandhian, nationalist Congress. The businessman cum politician Homi Mody fell in the former faction. Temperamentally liberal and a constitutionalist, Homi Mody straddled the public life in both colonial and Independent India as a member of two outsized minority groupings, _i.e. _big business and Parsis. Mody’s relative obscurity in all the flavours of the “idea of India” warrants a novel approach towards engaging with India’s past. A brief career sketch of Homi Mody would help make the point clear. In the political domain, he was the member of Indian Legislative Assembly (1929-43), Viceroy’s Executive Council (1941-43), the Constituent Assembly (1948-49); a participant in the First Roundtable Conference (1930) to represent the Indian commerce and industrial interests; a delegate to the ILO Conference (1937) in Geneva; an appointed governor of Bombay (1947); and the Governor of UP (1949-52). In the business domain, he was the president of the Bombay Mill Owners’ Association, the Indian Merchants Chamber, and the Employers’ Fund of India; the chairman of the Associated Cement Companies and the Central Bank of India; a founder of the Indian Banks’ Association; and a close aide to the House of Tatas. Homi Mody’s politics during the colonial period was limited to the domain of the legislature and civic activism. He wasn’t associated with any political party and mainly served the interest of the Bombay business. The British policy of functional representation in the assembly ensured his membership in the legislative body. In this regard, he stood out from the Congress nationalists, Communists, the Muslim League, and Hindu Mahasabha politicians who indulged in the politics of masses. In fact, Mody often came at the receiving end of the brickbats of Congress politicians and the nationalist press for his close association with the Raj. As the Indian nationalist triumph in 1947 has come to guide history-writing, political figures like Mody remain marginalised because their roles don’t fit in the grand narrative of the Congress nationalist struggle. However, the colonial period saw varied “Indian” actors, strategies, and interests at play that didn’t necessarily conform to Congress nationalism but deserve due recognition. Mody’s politics as such could be categorised as liberal, albeit with certain caveats. Mody’s biographer called him a liberal by instinct in the mould of Pherozeshah Mehta. Mehta was also his political mentor, argues his biographer. Interestingly, both Mehta and Mody were Parsis who came to dominate the Bombay municipality. During his long stint with the Bombay municipality, Mody led the Progressive group against the Congress nationalists. His focus mostly lay on addressing the administrative issues plaguing the city. In the early 1920s, he was an active advocate of Home Rule. In 1928, he protested against the appointment of an all-white Simon Commission. Later in 1943, he would resign from the Executive Council as a protest against the Viceroy’s failure to release an ill Gandhi on fast. But, his belief in constitutionalism made him averse to the Gandhian methods and philosophy. In this sense, he was close to the liberals like Sapru and Sastri. But, he wouldn’t join the National Liberal Federation because they were too “spineless” and vacillating for him. In contrast, Homi Mody’s interests compelled him to advocate for the business community with a decisive fervour, largely on account of his oratorical skills. His pithy speeches laced with witty quips would receive special mention in the press. Not to mention, they also landed him in unsavoury controversies. It is in his advocacy of Indian industrial interests that Mody takes an illiberal turn. His constant prodding for tariff protection, calls for serving’ national interest’, criticism of ‘consumers’ interest’ arguments, cartelisation of the textile market based on the Bombay-Lancashire collusion in the Mody-Lees Pact, etc. perfectly fits in the framework of pro-business policy. In fact, on his retirement from the chairmanship of the Bombay Mill Owners’ Association, the Indian Textile Journal called him “an ardent protectionist” in its glowing tribute! In the wake of heated assembly debates, Mody would champion economic nationalism to counter the free-market policy. For instance, at the annual meeting of the FICCI in February 1930, he moved a resolution favouring the Coastal Reservation Bill and hit out at the opponents: _“Somehow or other, whenever national industries of the country were going to be protected, this bogey of consumer’s interests was trotted out as if these people whose Business it was to throttle the economic progress of the country were all the time doing so because they felt for the dumb millions of the country and poor inarticulate and unfortunate consumers.”_ Today, Homi Mody’s attitude may come as a surprise to Indian liberals who see him as one of the founding members of the Swatantra Party, featured on the [Libertarianism](https://www.libertarianism.org/publications/essays/whither-indian-planning/) blog. But, the colonial-era liberals were the champions of economic nationalism. Gokhale argued for the infant industry protection; Dadabhai Naoroji propounded the drain of wealth theory; Justice Ranade criticised the conservative statesmen for sacrificing Indian interests in the name of free trade. Like the earlier group of liberals known as the Congress moderates, Mody sought to tread a fine line between the full-blown nationalism and cooperation with the Raj. Mody held the demand for dominion status desirable; supported the Hindu Child Marriage Bill; and approved of the federal scheme during the first Roundtable Conference. He was also an enthusiastic supporter of the 1918 Montagu-Chelmsford reforms and the 1935 Government of India Act. In these regards, he was no different from his liberal predecessors. The making of the Indian Republic brought with it uncertainty as the state-business relation was open for negotiation and reshaping. The provision for the universal franchise came along with an end to the functional representation. In terms of economic policy, the state-led centralised planning was seemingly poised to play a significant role, as evident from the constitution of the [National Planning Committee](https://www.jstor.org/stable/pdf/312676.pdf/) in 1938.  The capitalist tycoons made a pact with planning-driven development. They came with their own version – the Bombay Plan of 1944. Mody was no exception. He “whole-heartedly welcomed the appointment of an Advisory Planning Board” by the interim government in 1946. Soon followed the December 1947 Tripartite Industrial Conference, with the state, industrialists, and labour being the parties. The outcome was the Industrial Policy Resolution of 1948. The resolution, writes Shankkar Aiyar, “paid obeisance to Gandhian thought, was socialist in tone and business-friendly in content.” The respite, however, was short-lived. In February 1953, Homi Mody attacked the government policy towards the private sector for the first time. In his speech to the Employers’ Fund of India, he criticised “the flow of labour legislation, irksome control over profits, production and distribution.” In January 1956, he was part of the delegation of industrialists to the PM Nehru. In an off-the-record meeting, he pointed to the deviations already made from the 1948 IPR and drew attention to the difficulty of doing business in the license-permit Raj. The arrival of the Second Five-Year Plan in 1956 entailed full-blown state domination of the economy as the Mahalanobis model sought to develop India in its image. Homi Mody criticised the Plan for being too ambitious in the wake of constrained resources. Mody’s discontent was shared by a bunch of public-spirited professionals and leaders. BR Shenoy was the part of the advisory committee of the economists to the Second Five Year Plan and had written a [note of dissent](http://indianliberals.in/~_admin/pdflanguage?id=2002251069.PDF) to the proposed measures. Rajaji’s [columns in the Swarajya](http://indianliberals.in/~_admin/pdflanguage?id=477576353.pdf) were increasingly turning critical of the centralisation in both economy and polity. Minoo Masani was [battling the communist](https://spontaneousorder.in/minoo-masani-from-socialism-to-liberal-swatantra-party/) propaganda in the public sphere with his Democratic Research Service, Indian Committee for Cultural Freedom, and Freedom First magazine. It probably was their close association with the Tatas that brought Mody [in contact](https://www.livemint.com/Opinion/AL1dGwrVLENYQm0YhuGXFI/Unaffiliated-the-case-of-1957.html/) with Masani. The incorrigible Masani persuaded Homi Mody and a few other friends to fight the 1957 general election. The idea was to form a grouping of independent parliamentarians to challenge Congress domination. Mody lost to the local Congress candidate and only Masani managed to reach the Lower House. The defeat, however, didn’t dampen Mody’s attacks on government policies. For Homi Mody, excessive regulation and increased outlays on planning posed a threat to economic freedom inherent in a democracy. He would use the business organisations’ platform to voice his criticism. The political consolidation of disparate oppositional voices was enabled by the [1959 Congress Resolution at Nagpur](https://www.epw.in/system/files/pdf/1959_11/4-5-6/the_nagpur_resolutionagrarian_organisation_pattern.pdf) proposing cooperative farming. The resolution came out in January, and in the next month, Homi Mody stressed the need for a new party. The enterprising Masani was on the task and managed to persuade Rajaji to come on the board. He had also approached JP though the venerable Gandhian declined on the ground of his retirement from party politics. With Rajaji in charge, the formation of the Party was announced publicly in a 4th July 1959 meeting. Masani wrote to Mody on 19th June offering a position in the organising committee. Mody accepted the offer and came on board as the treasurer. Pundit Nehru and other detractors of the Party called it a party of frustrated old people championing the reactionary and business interests. A 1967 [analysis](https://books.google.co.in/books?id=0v0KFAAQCLkC&printsec=frontcover#v=onepage&q&f=false) of political donations, however, shows that the Congress received almost thrice as much from the business houses than the Swatantra. Political scientist Howard Erdman has also pointed out the difficulty for the Swatantra party in [attracting donations](https://archive.org/details/swatantrapartyin00erdm/mode/2up) from the business houses. No less than Rajaji [bemoaned](https://spontaneousorder.in/so-musing-pro-market-policies/) the unfair charge: “Calumny has had a start, and it keeps on maintaining the falsehood that the Swatantra Party is a rich men’s lobby. The rich men know where to go; they go to the Party in power.” As a member of the “inner circle” of the Party, Homi Mody mostly addressed the public meetings criticising the economic and foreign policy of the government. For instance, in an article published in 1965 by the Forum of Free Enterprise, he criticised the continued infatuation with planning despite repeated failures: _“Agricultural and industrial production is stagnant—there have even been signs of a recession—and there are shortages in practically every commodity and service. But that does not seem to dampen the enthusiasm of the Planners who, as soon as a plan is nearing its end, are ready with another.”_ Homi Mody enunciated the Swatantra principles in terms of democratic freedom, social justice, and efficient administration. In the domain of foreign policy, Mody and the Party both advocated a pro-western stance and were critical of the NAM posturing. In the wake of China’s India war in 1962, Homi Mody criticised Nehru’s conduct, “Our so-called neutrality has brought us very few friends, and it is time the Prime Minister stopped airing his concepts of international diplomacy which have landed us in so many difficulties.” In one of his public speeches, he also criticised the Defence Minister VK Menon’s decision of continuing the support to China for its UNSC membership. He demanded the withdrawal of the Indian ambassador to China; resignation of the Defence Minister; and constitution of a National Defence Council to enable effective decision-making for the war. For all his eloquent witticism, Homi Mody’s role in the Party seemingly was limited as he catered to the westernised, English-speaking, urban constituency of business interests. Nonetheless, it is no unremarkable feat for him to go against the grain when opening up against the government could do real damage to his personal business interests. It becomes more evident when putting in the context of his earlier moderate conduct in the Raj years, maintaining a delicate balance between the colonial administration and the Congress nationalists. What, however, explains the transition of the temperamentally liberal Mody from being a pro-business to a pro-market politician? Mody’s biographer suggests an answer. The political philosophy, in Homi Mody’s case, was guided by a sense of practicality that sought to gain concession without consternation. As the broader context of the political economy changed, Mody’s response invariably varied. What remained constant, though, was his liberal conviction and sense of humour. --- ## [Opinion] Hriday Nath Kunzru – The Liberal Institution Builder URL: https://indianliberals.in/opinions/hriday-nath-kunzru-the-liberal-institution-builder/ ### Body The trajectory of liberal nationalism in colonial India is characterized by an early prominence followed by a steady marginalization in the nationalist discourse. The moderate phase of the Indian National Congress reflects a strong liberal tradition which is also well-recognized. However, the liberal contribution to the nation-building project after 1947 remains sketchily documented. The liberal “makers of modern India” seem to have been overshadowed by their equally-worthy Gandhian, socialist and democrat compatriots in the historical narrative. As even the icons of Hindu right are being revived, the liberal figures remain disowned in an increasingly illiberal India characterized by social majoritarianism and economic statism. Hriday Nath Kunzru embodies this typical caricature of the “ignored Indian liberal”, dedicated to the task of nation-building in its early years. Kunzru’s public life though goes back to the anti-colonial movement. His illustrious career began with his request to join the Servants of India Society when Gopal Krishna Gokhale visited Allahabad in 1908. The dedicated and tough public servant that Gokhale was, he cross-questioned Kunzru in Calcutta and made him write an essay on Madras Congress. Not until 1909 did Kunzru was admitted into the society. In 1911, Gokhale sent him to the London School of Economics on the behest of Gandhi’s friend Sheldon Pollack. At LSE, Kunzru was taught by the likes of Alfred Marshall and Sir John Maynard Keynes. Back in India, he worked for the Indian National Congress until came the liberal split of 1918. He would go on to join the Indian National Liberal Federation along with Tej Bahadur Sapru, V S Srinivasa Sastri and C Y Chintamani. In upcoming decades, Kunzru emerged as one of the few major liberal voices in both the legislature and public domain as the nationalist movement swept aside the liberal agenda. Alike other fellow liberals, he advocated constitutional means and was against non-cooperation, he demanded self-government within the then Commonwealth and fought for the indigenization of military and bureaucracy. A major part of Kunzru’s public career was dedicated to legislative participation. He was a member successively of the Legislative Council of the United Provinces (1921-26), the Central Legislative Assembly (1926-30), the Council of State (1936), the Constituent Assembly (1946-50), the Provisional Parliament (1950-52), and finally the Rajya Sabha (1952-64). As a quintessential parliamentarian, he fostered the democratic decision-making tradition with his impeccable debating skills and intelligent interventions. The roots of Indian democracy in the Nehru years were, in no small measure, strengthened by the labour of the likes of Kunzru. Kunzru’s more significant contribution to Indian democracy though lays elsewhere in his role as an institution builder. It is also here that his liberal conviction very clearly comes into play. On the state funding of civil society institutions, he was clear that “if the public cannot support the institution, I would prefer it to be closed down, rather than go to the government for help!” His wide-ranging associations with civil society organizations included his stint as the national commissioner of the Bharat Scouts and Guides; president of the Film Cultural Association of Delhi, president of Uttar Pradesh Harijan Sevak Sangh, executive committee member of the Bharatiya Adimjati Sevak Sangh, and connection with the Children’s Film Society of India. He also founded two pioneering Indian institutions in the domain of International Studies – the Indian Council of World Affairs (ICWA) and Indian School of International Studies (ISIS, which now is the School of International Studies at Jawaharlal Nehru University). His adherence to liberal values was evident in the way he handled the functioning of these institutions. Former JNU professor and a close friend of Kunzru, Prof M S Rajan [wrote](https://www.jstor.org/stable/pdf/45070851.pdf?seq=1#page_scan_tab_contents) that he would never interfere in the intellectual freedom of the educational and research institutions he headed. Rajan also attested to the liberal political values embodied by Kunzru including individual liberty, freedom of the Press and association, the sanctity of private property, and a multi-party political system. Kunzru argued that the best government was the one that governed the least. He advocated for the limitation of state power in favour of the freedom of citizens. As a liberal, he made the distinction between the good intention and outcome of state policy or action. His criterion for the judgment of an individual, policy, or action was very clearly rooted in liberal philosophy, writes M S Rajan. Kunzru’s pioneering legacy is thriving today in the Sapru House and Jawaharlal Nehru University which house the institutions that he built from scratch. He helped found ICWA in 1943 and remained its President from 1949 to 1976. Kunzru travelled around the country to collect funds for the construction of Sapru House building. Prof B Vivekanandan [recounts](https://journals.sagepub.com/doi/abs/10.1177/002088171104700403) the event in his tribute to M S Rajan who was also part of the initiative. Prof Rajan brought skilled artisans from Makrana (Rajasthan) who were persuaded by Kunzru to design the building without charging wages. The publicly funded project thus came to fruition. ICWA would later go on to host the famous Asian Relations Conference in 1947. The decline of ICWA after the death of Kunzru in 1978 only underscores his role in fostering institutions with care. His other initiative in the Indian study of international affairs came in the form of the Indian School of International Studies. Established in 1955 by ICWA and affiliated to Delhi University, the School was meant to create an Indian intellectual tradition in international affairs. The project also had the support of Pandit Nehru who sought foreign policy scholars to steer India in international affairs. In 1961, ISIS became an autonomous deemed university and pioneered area studies in India. Though, it also became involved in [controversy](https://journals.sagepub.com/doi/abs/10.1177/002088171104700403) in the 1960s over its refusal to accept Hindi imposition. With the formation of JNU in 1969, the government sought to merge ISIS with the newly formed university. Kunzru, though opposed to the move, allowed himself to be persuaded by the faculty and students. The institution came to be known as the School of International Studies (SIS). Kunzru’s association with the school continued as he would consult faculty members in preparation for his speeches and debates. SIS annually conducts the prestigious [H N Kunzru Memorial Lecture](https://www.jnu.ac.in/content/sis-organising-pandit-hridya-nath-kunzru-memorial-lecture-series/) in tribute to its great liberal founding father. This is perhaps, unfortunately, what remains the only living memory of him. type=content&p=1566). Needs editorial review._ --- ## [Opinion] Indian Liberals Annual Lecture 2023 URL: https://indianliberals.in/opinions/indian-liberals-annual-lecture-2023/ ### Body **"The Dilemma of an Indian Liberal"** **Introduction** The Indian Liberals Project (www.indianliberals.in) is managed by the Centre for Civil Society, New Delhi, and supported by the Friedrich Naumann Foundation for Freedom, South Asia. Launched in 2015, indianliberals.in remains India’s only online digital portal offering an exhaustive and comprehensive archive of resources on the liberal thought traditions in India. The digital archive continues to take India’s liberal histories to a growing audience of scholars, researchers, and keen readers. Along with digitized original and rare collections from India’s more and lesser-known liberal giants, the archive also holds audio-visual content. We continue to strive to curate and digitize content in multiple languages, with the archive already holding translated texts from Hindi, Marathi, Gujarati, and Bengali. The digital archive today holds nearly 1 lakh digitized pages. **The Indian Liberals Annual Lecture ** The Indian Liberals Annual Lecture was started in November 2021 to have the ideals of classical liberalism highlighted by contemporary voices in India. Delivered by an eminent liberal philosopher, historian, thinker, or economist, the objective of the Indian Liberals Lecture is to educate and disseminate liberal understandings of India’s past as well as its implications on the advancement of liberalism today. The objective is to highlight the importance of liberal values such as freedom of expression, free enterprise, rule of law, constitutionalism, participatory democracy, religious freedom, and all other human liberties. The Lecture is part of our efforts to increase interest in the necessity of liberal thought in maintaining India’s vibrant democratic ethos. The first Indian Liberals annual lecture was delivered on the 27th of November 2021 by Ms. Sagarika Ghosh, noted author and journalist, who spoke on **[The Case for Individual Liberty](https://www.youtube.com/watch?v=yjOWX9zaUGc).** The second Indian Liberals annual lecture was delivered on the 27th of November 2022 by Dr. Jayaprakash Narayan, ex-IAS (Andhra Cadre), politician, and activist on [**The Sc**](https://www.youtube.com/watch?v=vWyLdJoqDrs)**[ope for Political Liberalism in India](https://www.youtube.com/watch?v=vWyLdJoqDrs).** In 2023, Mr. Gurcharan Das, noted author, commentator, and public intellectual, would deliver the Indian Liberals Annual Lecture 2023 on_ "**The Dilemma of an Indian Liberal."**_ **Duration: **The Indian Liberals Lecture is scheduled to be for 60 minutes which includes a tentative 45 minutes of the Speaker's key address followed by a 15-minute Q&A session with the audience. **Date & Time: **4th September (Monday), 2023 **Venue:** India International Centre (IIC), 40, Max Mueller Marg, Lodhi Gardens, Lodhi Estate, New Delhi, 110003 To apply, **[click here.](https://form.typeform.com/to/DYIG9wQL?typeform-source=ccs.in)** For any other queries, mail Sourya (sourya@ccs.in) or Anushka (anushka@ccs.in) --- ## [Opinion] Indian Liberals Essay Contest - Results URL: https://indianliberals.in/opinions/indian-liberals-essay-contest-results/ ### Body **Results** **First Prize**: Encoding Privacy in a Digital World by _Simran Massie _ **Second Prize: **Fourth Industrial Revolution by _Tanisha Mitra_ **Third Prize:** Encoding Privacy in a Digital World by _Sihvani A Tannu_ **Fourth Prize: **Diversity, Democracy, and Dissent by_ Lakshmi Ramanandan _ **Fifth Prize: **The Imagined Democracy in India by _Dilip P Chandran_ Congratulations to all winners and participants! Read the winning essays on the **Opinion** page. type=content&p=1591). Needs editorial review._ --- ## [Opinion] Indian Liberals Essay Contest URL: https://indianliberals.in/opinions/indian-liberals-essay-contest/ ### Body **"They are slaves who dare not be In the right with two or three." - Minoo Masani** An online repository of Indian liberal writings, indianliberals.in was launched in 2015. The intent of the Indian Liberals archive which presently hosts up to 50,000 digitized pages is to offer exhaustive and comprehensive resources on the liberal discourse in India by ensuring high diversity of content. Indian Liberals portal is a platform for consolidating and curating Indian liberal literature, to document, preserve and disseminate the robust strands on liberalist thinking that have marked Indian history. **Eligibility:** Open to youth throughout India. You must be at least 18 years and no older than 30 years of age. **Last Date for Submitting Your Essays (via email): 15th May 2019** **Registration fee:** The is NO registration fee for this event. **Language:** Essays should be written in English. You are welcome to write in your native language, but it must be translated into english for submission. **Where to submit:** All entries should be mailed to indianliberals@ccs.in OR hinan@ccs.in before the last date (15th May) Along with the essay, you are required to send a photograph and a brief bio. **Topics:** You can choose any one of the following topics - Diversity, Democracy, and Dissent - Liberalism in India - Then and Now - Encoding Privacy a Digital World - A Liberal Constitution for India - Manifesto for a Prosperous India - Vigilantism, Nationalism and Techno-Nationalism - Fourth Industrial Revolution - What it means for India? **Prizes:** - First Prize: INR 9,000 - Second Prize: INR 6,000 - Third Prize: INR 3,000 - Fourth and Fifth Prizes: INR 2,000 All the winners will receive a certificate of recognition from Centre for Civil Society. - Essays must be no fewer than 700 and no more than 2000 words. Spelling errors will count against the final grades. - Name your submission file as "firstname_ilessay2019". Mail your photograph and brief profile along with the submission. - Winning essays will be featured on our Indian Liberals website, alongside a brief profile and picture of the author. - One entry per participant. - All entries become the property of Centre for Civil Society and will not be returned.They may be reproduced on our website and/or shared with third parties for purposes of marketing. - For any other queries, mail Hinan at hinan@ccs.in type=content&p=1594). Needs editorial review._ --- ## [Opinion] Indian Liberals Interviews Hindol Sengupta URL: https://indianliberals.in/opinions/indian-liberals-interviews-hindol-sengupta/ ### Body **An award-winning author of nine best selling books, Hindol is an author and journalist. His book, “Recasting India” was shortlisted for the Hayek Prize while his other book, “Being Hindu” won the Wilbur Award in 2018. He has worked for Bloomberg TV, CNN and CNBC. In 2011, he was voted by the global ideas platform IdeaMensch on its list of 33 Entrepreneurs Who Make The World A Better Place. In this interview with Hinan Ali, he talks about his books, politics, growth, elections, and entreprenuership in India.** #### _**From journalism to film making to to a historian and author. Hindol, tell us more about this exciting journey.**_ When I think about my career, I think that one of the most pertinent ways to perhaps explain it is through the divide between post-independence Indian history before and after 1991. Economic liberalisation was a clear break in the narrative. It gave rise to a generation, my generation, which has completely changed the country. My work represents a break from many of the traditions that had been set before 1991. I am one of the few writers who emerged through the process of liberalisation to tell a very different story of India from the one that had been set and told and retold since independence from colonial rule in 1947. How is it different? Well, in the following ways. First, our generation that rose to adulthood and prominence alongside economic liberalisation has, unlike any other since independence, has only known a growing (economically) country. This rising prosperity, as unequal as it has been in many ways, has still been broad-based enough (pulling out more than 130 million from abject poverty) for this to have become a cultural expectation for a whole generation. Along with that has come the expectation of shedding diffidence. My work has been about telling the story of how India shed its economic, social, historical and cultural diffidence. There are traces of this argument in some of my earliest work which argued for an Indian idea of global design - why should India only be a consumer of design, content, armament, goods and services? India should be a producer, an ideator, a conceptualiser and not merely a consumer. My work has also tried to go beyond the usual tropes of Indian history-writing, with its elitist definitions of heroes and villains, and explored other perspectives to nation-building and nationhood. Whether its Being Hindu, which won the first Wilbur Award for a book on Hinduism in 70 years in America or retelling the modernist tale in the life of Vivekananda or rediscovering Vallabhbhai Patel, my attempt has been to delve into the stories neglected by elitist India and explore all the nuances and richness that a shallow, indeed callow, idea of cosmopolitanism brings. As a believer in the depth and richness of the philosophy of plurality in India, writers like me go far beyond the 'tolerance' matrix - which I frankly find pedestrian - to dig deep into an epistemology of understanding and respect which mere tolerance can never bring. My generation will have to rewrite the history of India, this much is clear. We have to shed this rather superficial 'idea of India' and explore the ideas of India - and there are many of those. A lifetime of exciting work awaits.I am, for instance, writing a new book with a Pakistani co-author which aims to interrogate the absurdities of the 'Aman ki Asha' level of analysis and study the India-Pakistan relationship in all its depth and magnitude, and with critical realism to put forth ideas that could help citizens of both countries zero in on an achievable idea of peace and prosperity for the region. #### _**India is poised to become the youngest workforce by 2020. Your book Recasting India talks about the rise of entrepreneurship in India. Has the government realized the importance of skill development and entrepreneurship?**_ It is not well-understood that all talk of entrepreneur-led economy means nothing unless a far greater level of formalisation does not take place. As important as the informal sector has been, there is no doubt that it has also led to a forced downsizing of Indian firms. This enforced malnutrition of Indian enterprise is a tragedy. The task of formalisation has now begun in earnest and our tax collection depth is increasing significantly. It cannot be disputed that demonetisation did not achieve some of its key goals. It did not for instance reduce the use of cash or did not keep enough cash from being returned. What it did achieve was a sort of massification of the use of digital payments systems and it widened and added depth to the tax collection pool. The combination of deeper banking, mass use of digital technology and easy identification is the base upon which a wide formalisation of the economy will take place, and is taking place. It is only when this happens that we can have a realistic conversation about an economy fuelled by entrepreneurship. #### _**Are you an advocate of market capitalism (and against an idea of a social welfare state)?**_ I am an advocate of market capitalism with the very important caveat that evidence from around the world shows us that the market can only work efficiently if extremely strong rules and regulations are already in place and the penalty for breaking the rules is very high. Without an appropriately powerful punishment system for breaking rules, no market system can work. But the moment you talk about punishment, a gaggle of irresponsible and, frankly, dim-witted, emoticon-driven screaming and shouting begins. This sort of thing is bogus and irresponsible. If we are committed to prosperity, then we must be committed to a market economy - with the complete understanding that there are a few things that a government needs to deliver. Everything cannot be delivered efficiently through the market alone. For instance, healthcare and heavy infrastructure are things where a government role can never be ignored. Also, law and order - this you cannot privatize. You need a state-run police system. I am for a small but very strong government. The government needs to do a few things but do those things very well. The rest it should leave to the markets._**Capitalism, like America for Amerigo Bonasera in The Godfather, has been good to me.” Has it been good to all? If not, why?**_ It hasn't all been good because the deep-rooted corruption and the rotten core of elitism, faux socialism in India. In the name of socialism, what the Indian elite has always wanted is to keep the proletariat away from the fruits of the country, to keep them starved for crumbs from their high table. Capitalism is about the opening of doors of opportunity whereas the Indian elite ensured that even with capitalism they only opened the doors just enough to let in their cronies and shut the doors for everyone else. I believe that the doors that the elite shut should be kicked open so hard that they collapse behind them. We the people of India need to rise and kick open these doors and let the winds of opportunity gladden every heart. The time is now. I see my career as a journey of facing one closed door after another and facing one bitter elite after another - and kicking each of the doors open (and kicking the elites hard) one by one. There is no class that has done more disservice to its own civilisation, and the potential of its own country women, as the Indian elite._**You say that the book (Being Hindu: Old Faith, New World and You) is an act of dissent against what you call “popularly known truths”. Can you explain as to what truths you are talking about?**_ That book, Being Hindu, in particular is an act of dissent against what I felt was stifling opinion-making among the Indian elite where many say the assertion of ideas of spirituality in the public sphere as antithetical to the propagation of the ideals of liberalism. I, on the contrary, believe that some of the most profound and complex liberal ideas and ideals are in fact contained in some of the most ancient treatise of India. As I have pointed out, the Nasadiya Sukta or the origin hymn in the Rig Veda even questions the existence of god. But all this wisdom has been lost. Students are barely taught this. A student in India goes through all the years of schooling with almost zero understanding of what in other parts of the world would be called the classics. That because of a fake debate, students are not taught Sanskrit as a compulsory subject is truly tragic. Not one ever suggested that reading the ancient Greek and Latin texts would 'convert' you to the pagan religions of the ancient world (has everyone who has ever studied The Odyssey become a believer in the goddess Athena? What utter nonsense!), and similarly an Indian student learning the basics of the Vedas and Upanishads as some of the most profound philosophizing in history would not be 'converted' to Hinduism. That is stupid, silly idea that has kept generations away from the classics. And this is my dissent - against the stupidity of the Indian education system. How can the study of classics be denied?_**Your book, The Man Who Saved India discusses Sardar Patel’s idea of India. What was his idea of India and has that idea been realized?**_ Sardar Patel's idea of India was based on the ideas of enterprise and national security, i.e., a small but strong state. We are far away from his vision - though since 1991 and economic liberalisation we have come closer to it - because in the public sphere there is little or no understanding of India's core security concerns or the importance of economic reforms as the single-biggest anti-poverty measure in Indian history. The Patelian idea of India, though, is not about mindless privatization. It is about sensible and widespread privatisation but also making state-owned resources more and more efficient by measures like pay linked to performance and better accountability of public sector workers, especially bureaucrats. The Patelian idea of India would have a far stronger intelligence gathering system. We cannot forget that one prime minister in India, though this man was prime minister very briefly, managed to destroy years of assiduously created intelligence gathering system including a strong Pakistan desk in the Research and Analysis Wing. This is the sort of tragedy that a Patelian idea of India would prevent._**India adopted a secular constitution. But we are far from realizing this ideal. Recent controversies over religious conversions, bans on books and movies, hate speeches and mob violence is deplorable. What should be done to fix this?**_ The founding fathers of the Indian constitution, in their wisdom, and after much debate, decided to keep away the explicit assertion of secularism through the addition of that word in the constitution. This is not because they did not want the constitution to be secular but because it already was. In fact, it was more than secular - which is really a word that denotes the division between church and state and is not exactly applicable to the Indian context - it was plural and promoted plural in its assertion of the freedom to practice and propagate any religious belief etc. They understood that this was superfluous as pluralism in spirit and letter was already part of the Indian constitution and the word, a borrowed term from a different culture whose meaning was not very relevant to the Indian lived experience, might not be helpful in the Indian context. However, this word, along with socialism, were brought into the constitution illegally when parliament was not in session during the Emergency. As B. R. Ambedkar suggested, there was no need for these. There were other clauses in the constitution that anyway carried the spirit of greater material equality and pluralism. I am a believer in the pluralism of India. Pluralism is the lived experience of India. No one can take that away. The state needs to equally - in equal measure - exit from interfering on religious matters except when it is a case of impinging on fundamental rights. We have a curious case in India today that the state controls religious institutions of only one religion - Hinduism. These kinds of things are problems areas that we need to resolve. There are people who say that there was no 'Ganga-Jamuni tehzeeb'. That's not true. We did have, and we do have, many examples of a truly heartwarming composite culture. But we also have a long history of terrible violence, plunder, invasion, destruction and suffering. Our history has conflict and it has bonhomie. We should recognise, contemplate, understand both. As I wrote in Being Hindu, one does not diminish or negate the other._**You gave us a list 100 things to know and debate before we voted to elect a new Parliament in 2014. What would be your first five things to know and debate before voting in the upcoming general elections?**_ a. A deeper, and more evolved, understanding of the India's national security challenges and where those challenges comes from. This is absent in our public sphere. b. A reflection on the question: do we as a people want our country to exist in the form that it does, in the very map that we use today? If yes, what would it take to preserve it? c. An appreciation of how far we have come since 1991 and all the progress that has only been possible because the country opened its economy. We are being brainwashed to hate all our achievements since 1991, to hate economic liberalisation. This is wrong. We have to appreciate that this was a seminal turning point that changed all our lives in myriad ways - mostly for the better. d.  A massive questioning of the environmental disaster that we face. Every major Indian city is unlivable and just the act of living in them is killing people. e. Why is that we still one of the most abysmal standard of primary education and healthcare in the world? How can we continue to grow and prosper if this remains true? type=content&p=1587). Needs editorial review._ --- ## [Opinion] Indian Liberals, Quest Magazine and India's First Dictatorship URL: https://indianliberals.in/opinions/indian-liberals-quest-magazine-india-first-dictatorship/ ### Body _In what could be seen as the unfolding of high modernist ideology, Quest’s criticism took the form of rationalist railing against the religious objection to family planning. In its support of forced family planning and sterilization, the limits of Indian liberalism become apparent in terms of its rationalist high modernity and economic anxiety._India under the Emergency (1975-77) imposed by Indira Gandhi saw the suspension of fundamental rights, electoral democracy, and press freedom. A recent book aptly calls this authoritarian turn India’s first dictatorship. For the better, the dictatorship had its detractors as well who faced the risk of prison time yet resisted Indira Gandhi’s throttling of India’s audacious democratic experiment. India’s liberal intelligentsia formed a small but significant part of this resistance. One of the major intellectual outposts for Indian liberals during this period was _Quest_ magazine. Published by the Indian Committee for Cultural Freedom (ICCF), _Quest _sought to advance the cause of cultural freedom and anti-communism in India. **Indian Anti-communism: ICCF and Quest** The ICCF was affiliated with the Paris-based Congress for Cultural Freedom (CCF), a covert CIA offensive to counter Soviet propaganda in the Cultural Cold war. Broadly speaking, the Cultural Cold War was a global competition between the Free World and Socialist Camp to win the heart and minds of people by way of covert/overt propaganda and soft power operations. India as a non-aligned nation fit into the CCF scheme of things so much so that the second CCF conference was organized in Bombay. Subsequently, ICCF was[formed](http://www.freedomfirst.in/freedom-first/about-iccf.aspx) under the tutelage of a broad anti-communist tent, comprising Jayaprakash Narayan, Minoo Masani, Asoka Mehta, and A D Gorwala. Initially, the group[launched](http://www.freedomfirst.in/uploads/issues/pdf/1.pdf) _Freedom First_ magazine in 1952, edited by Minoo Masani. But Masani’s sharp anti-Nehru editorial line in _Freedom First_ made the Paris-based CCF secretariat uncomfortable. For Michael Josselson at the Paris headquarter of the Congress for Cultural Freedom, antagonizing Nehru would only make the job difficult for CCF in India. Nehru had already made clear his dislike of foreign propaganda efforts in India trying to affect his government’s foreign policy. Consequently, soon followed in 1954 the CCF decision to launch another Indian magazine which was less political and more literary in its tone. _Quest_, thus, officially arrived in the Indian public sphere in August 1955. By 1975, when the Emergency was declared, it was pretty clear that _Quest_’s impact on Indian public discourse had been minuscule. Published in English which largely remains the language of upper-class elites in India, the magazine had limited circulation and was seen as a [tool of US propaganda](https://www.palgrave.com/gp/book/9781137598660) by the left-leaning Indian public intelligentsia. During the Emergency, historian Eric Pullin has [argued](https://www.palgrave.com/gp/book/9781137598660), ‘**_Quest_**** opposed Gandhi’s policies only indirectly, if at all. The few articles that attempted to consider India’s interruption in constitutional government did so generally and theoretically.**’ (emphasis mine) Pullin cites a few articles published during the Emergency to make his point. These include the ICCF statement on censorship, Rajni Kothari on the crisis of India’s representational system, and the Pavnar resolution on restoring democracy in India. However, a more detailed perusal of articles related to the Emergency published in _Quest_ would make a plausible case for _Quest_’s clear oppositional stand on the Emergency.   **Press Censorship and Bureaucratic Centralisation** The September/October 1975 [issue](http://www.freedomfirst.in/uploads/quest/pdf/QT097.pdf) of Quest published the ICCF Executive Council’s resolution on censorship. As an organization dedicated to protecting cultural freedom from the totalitarian onslaught, ICCF affirmed its commitment to freedom of expression during the Emergency. In an unequivocal resolution, the Executive Council demanded ‘an immediate revocation of the pre-censorship regulations and the restoration of the freedom of the press.’ In another article on the contemporary situation in the same issue, Daya Krishna sounded alarm on the future of democracy. He saw in the continuation of Emergency the betrayal of hope for liberal democracy’s audacious success in the Third World. Later in the March/April 1976 [issue](http://www.freedomfirst.in/uploads/quest/pdf/QT100.pdf), A B Shah’s editorial on censorship again affirmed ICCF’s commitment to freedom of expression and steadfast opposition to the Emergency. In a clear reference to Emergency’s press censorship provision, Shah argued if the press is in chains, ‘it can neither be healthy nor uphold democracy.’ He also reminded Indira of his father’s commitment to absolute press freedom that he made in a speech in 1950: ‘I would rather have a completely free press with all the dangers involved in the wrong use of that freedom than a suppressed or regulated press.’ Shah’s no-hold-barred editorial raised objection over government authority threatening the indomitable A D Gorwala whose journal _Opinion_ was scathingly critical of the Emergency. _Quest_’s fearless editor made it clear that his publication was ‘‘prepared to face the consequences’ of our action.’     Quest’s November/December 1975 issue [published](http://www.freedomfirst.in/uploads/quest/pdf/QT098.pdf) political scientist Rajni Kothari’s incisive speech that indirectly situated Indira’s Emergency in the long context of centralization of power under India’s centralized _administrative state_. Kothari argued that the centralization of power in the bureaucratic executive machinery had come at the expense of party organization and evaded democratic accountability. This centralizing tendency was further exacerbated by the planning model of economic development and endemic political instability in states which necessitated control from the high command. As Pullin has argued, Kothari’s remarks could be seen as an indirect swipe at excessive centralization that was a core feature of the Emergency. **Liberal Criticisms** The pages of Quest also saw an interesting debate on the Paunar statement on the Emergency which is understandable given the influence wielded by Vinoba Bhave. A meeting of public intellectuals called the All-India Acharya Sammelan saw the discussion on the current situation of democracy suspension. The gathering demanded a return to democratic normalcy but in a balancing attempt also praised ‘constructive developments’ of the crackdown on hoarding, the decline in the labor and student unrest, and check over inflation. However, in a clear stand against draconian trampling of fundamental rights, the resolution decried the arrests of political activists, curtailment of civil liberties, and press censorship. The conference resolution also called for constitutional amendment enacting fundamental duties for citizens, recommended curb over rich consumption, paid obeisance to Gandhi’s trusteeship doctrine, worried about population explosion, suggested Bhave’s mantra of self-restraint as the solution, decried ‘directionless’ science which can only be saved by an infusion of spirituality. The notable participants of the conference included Hindi literary figures like Jainendra Kumar and Kamil Bulke, former bureaucrat Tarlok Singh, economist P R Brahmanand, and BITS, Pilani director C R Mitra. The Paunar resolution instigated a vigorous debate in the pages of _Quest_. In his editorial, A B Shah endorsed the Paunar resolution but also made his difference known. Shah’s disagreements were concerned with the dubious statement on science and spirituality as well as the stress on the Fundamental duties of citizens. He, however, appreciated what he saw as the Conference’s unambiguous demand for lifting the Emergency. In the March/April 1976 [issue](http://www.freedomfirst.in/uploads/quest/pdf/QT094.pdf), an author under the pseudonym ‘S’ also objected to parts of the resolution. In an affirmation of liberal constitutionalism, S took objection to the resolution on inserting fundamental duties in the constitution. For the author, a constitution is supposed only to determine the rights of citizens and division of power among state organs. In so far as citizens have obligations to each other and the state, these could be demarcated in the civil and criminal codes. The moral bearing brought by Bhave’s saintly proclivity also came under modern, liberal rationalist attack in the pages of _Quest_. Released in [May 1976](http://www.freedomfirst.in/uploads/quest/pdf/QT101.pdf), _Quest_’s last issue published a detailed criticism of the Swaran Singh Committee’s report. Authored again by S, the article took objection to recommendations including subordination of fundamental rights to directive principles, abolition of the right to property as a fundamental right, inclusion of terms ‘socialist’ and ‘secular’ in the preamble, and curtailment of judicial review. In its affirmation of liberal constitutionalism based on individual rights and separation of power; support to private property rights; and advocacy of judiciary’s check on the executive, _Quest_’s criticism of the Swaran Singh committee report was clearly liberal in tenor. **Compulsory Sterilization** Interestingly though, it was on the issue of population control and compulsory sterilization that the _Quest_ lent support to the Indira Gandhi regime. Two articles dealing with the issue, both authored by S and published in 1976, supported the Maharashtra government’s legislative measure mandating sterilization to promote family planning. The justification was provided in terms of lack of natural resources and inability to feed ‘an ever-growing population’. The articles also criticized Muslim and Catholic organizations objecting to compulsory sterilization bid by the Maharashtra government. In what could be seen as the application of high modernist ideology, _Quest_’s criticism took the form of rationalist railing against the religious objection to family planning. In its support of forced family planning and sterilization, the limits of Indian liberalism become apparent in terms of its rationalist high modernity and economic anxiety. **Conclusion** During the Emergency, _Quest_ published in total six issues, from July 1975 to March 1976. These issues included _at least_ eight articles, editorials included, which were related to the Emergency. Far from indirect and theoretical opposition to Mrs. Gandhi’s suspension of Indian democracy (Pullin’s argument), as the above analysis purports to show, _Quest_ stood for press freedom, lent support to A D Gorwala’s _Opinion_ journal, debated the Pavnar statement on lifting the Emergency, criticized the Swaran Singh Committee report, and discussed the trend towards bureaucratic centralization in India.  To be sure, Quest also lent support to the forced sterilization drive of the Maharashtra government. Yet, instead of facing the wrath of government censor, the editors themselves decided to shut the magazine in mid-1976. Given the fact that _Quest_ was established in 1954 with the mandate to focus less on politics and more on cultural issues, it could plausibly be argued that the journal took a clear oppositional stand against the Emergency, with the support to compulsory sterilization program being the sole exception. Eric Pullin’s study on _Quest_, thus, warrants revision when it comes to the magazine’s role during the Emergency. However, Indian liberals’ opposition to the Emergency was not only limited to the pages of _Quest_. _Freedom First_, another Indian liberal magazine run by enterprising Minoo Masani, played an even more active role in fighting the Emergency. --- ## [Opinion] Iqbalunnisa Hussain: A Stalwart of Muslim Women’s Education URL: https://indianliberals.in/opinions/iqbalunnisa-hussain/ ### Body Iqbalunnisa Hussain's immense contribution to feminist literature and her vision for women's education played a tremendous role in reforming the lives of Muslim women in the 20th century. Her understanding of skill-based education for women is relevant to this day.In India, deep-seated patriarchal attitudes continue to subject women to subjugation and discrimination in the 21st century.  We have, however, come a long way from the state of affairs in the 20th century. The final years of the British Raj in India saw the rise and works of a spirited feminist and a liberal activist, Iqbalunnisa Hussain. She spent her life resisting orthodoxy and judgement from against emancipation and education of women, specifically Muslim women. Iqbalunnisa Hussain was born to Salima Ahmed in 1897, in Bangalore, Karnataka. Like most young girls at the time,  Iqbalunnisa fell prey to child marriage and was married off at the tender age of 15. She was wedded to a government official, Syed Ahmed Hussain. Her husband was an encouraging and progressive presence in her life. He pushed Iqbalunnisa to complete her education post their marriage. Iqbalunnisa proved to be an exceptional and talented student, winning accolades such as the gold medal for her undergraduate studies from Maharani’s College, Mysore. She then proceeded to travel to the United Kingdom in 1933 for her postgraduate studies in education, from the University of Leeds. Her oldest child out of seven, an infant at the time, accompanied her too. This was a major stride in Indian women’s quest for education. Iqbalunnisa was among the few Indian Muslim women of her time who held a degree from the United Kingdom to their name. Iqbalunnisa was fluent and well-versed in Persian and Urdu, and eventually in English too. Her grasp of the three languages coupled with her critical analysis of patriarchy enabled her to make immense contributions to feminist literature. Among these, the most prominent contributions were _Changing India: A Muslim Woman Speaks_ (1940) and _Purdah and Polygamy: Life in a Muslim Household_ (1944). _Changing India: A Muslim Woman Speaks_ (1940) is a collection of her essays that have been compiled together into a book.[_Purdah and Polygamy: Life in a Muslim Household (1944)_](https://thewire.in/books/iqbalunnisa-hussain-purdah-and-polygamy) is another highly acclaimed work of hers. The novel acts as a scathing critique of patriarchy, highlighting the problematic ideologies of the society which relegate women to a discriminatory status.  **Literary Contributions to the Feminist Movement** _Purdah and Polygamy: Life in a Muslim Household_ belongs to the genre of social realism, and deploys sarcasm often. The story is set in an unnamed Indian city, and revolves around gender-based tensions and conflicts that unfold within the ‘high walls’ of the protagonists’ family’s residence, named _Dilkusha_. The book tackles the themes of classical patriarchy and female solidarity. _Purdah and Polygamy: Life in a Muslim Household_ has garnered tremendous praise for a number of reasons. Notably, it was one of the first full-length English fiction work by a Muslim woman in British India. As argued by literary journalist and writer Muneeza Shamsie, _Purdah and Polygamy: Life in a Muslim Household_ is written in English as the language provides a ‘secular intellectual space’. Writing in English allowed liberal authors such as Iqbalunnisa Hussain to explore and write about controversial themes that would otherwise run into the risk of antagonising religious sentiments. Additionally, 19th century Indian society abhorred the idea of women learning to read and write in English. This was particularly true for Muslim men who belonged to highly patriarchal households. The act of writing and publishing a critique of  patriarchy, entirely in English, was a giant act of rebellion on Iqbalunnisa Hussain’s part. Her books are not solely targeted towards the men of the community. Iqbalunnisa did not spare the women belonging to what she terms[“uncivilised families](https://www.dawn.com/news/1204906),” for they shunned the reforming times and instead tied themselves to a regressive and archaic approach towards life. She goes on to label them as ‘she-dragons’, and expresses her anger at the lack of awareness and creativity that plagues these women. She also reprimands them for their attachment to the role of ‘selfish mischief-mongers’. Hence, Iqbalunnisa’s liberal outlook at life and breaking open women from their designated subservience attacked the patriarchal mind-set, and applied to both men and women. **Hussain’s Influential Contributions as an Educationist** As a pioneer for women’s education, Iqbalunnisa began her career as the headmistress of a primary school. Over time, her goals as a feminist and educationist led her to convert the school into an Urdu Girls’ Middle School. This step fuelled the fire of extreme ostracisation that Iqbalunnisa was already facing. The backlash from society, especially within her community, was quite severe. Despite the opposition forces, Iqbalunnisa Hussain treaded ahead and contributed towards Muslim women’s education. She achieved this by setting up an association of Muslim women educators, as well as establishing a school of home industries for Bangalore’s Muslim women. Notably, she was also a member of the historic Girl Guide Movement. In _Changing India: A Muslim Woman Speaks_, Iqbalunnisa Hussain delves into the educational lessons she grasped through the Girl Guide Movement. Through the essay _The Educative Value of the Girl Guide Movement_, she sheds light upon the scantiness that exists in the Indian education system, which ends up making women feel incapable of stepping out of their homes and working physically and psychologically. Her solution to the same was offered through her tireless advocacy for upskilling women and providing them with vocational training. She believed that developing a resourceful skill set was an essential aspect of reforming Indian education and making it accommodating of women from all walks of life. Along with her goal of educating girls and women, Iqbalunnisa was also a vocal critic of societal evils widely prevalent in her day, such as child marriage. **Contributions to Improving the State of Muslim Women** Arguably, her centre-most concern was the status and role that a Muslim Woman held within her community. Iqbalunnisa Hussain argued that the plight of Muslim women emerged from a male-centric view of society. She also felt that as individuals, Muslim women find themselves in a time-warp that does not encourage them to strive for better status. When appealing to the community about the emancipation of Muslim women from the shackles of the patriarchy, she deployed Islam, and presented the faith in a modern light. She called for the tenets of the faith to be interpreted and practiced in a way that does not trap women, but instead frees them. She elaborates in _Changing India: A Muslim Woman Speaks_, that Islam is a ‘religion of hope’. This proved to be an incredibly instrumental step, especially in pre-partition India, when there were increasing associations of backwardness with religion. Her contributions in this sphere also attempted to alienate faith from how it ended up being practiced. **Opposition and the Unwavering Spirit of Hussain** For her revolutionary and liberal advocacy within the feminist movement, Iqbalunnisa Hussain was also put through severe harsh criticism from the authoritative orthodoxy. She felt that communities suffered and were pushed into regressive practices with major influence from ‘male-dominated’ families. Patriarchal communities, regardless of faith, made women’s lives increasingly difficult and restrictive. No exception to this, she argues that Muslim patriarchy too worked persistently on making women dependent on the choices of the men of the households. She was tenacious in her movement to urge Muslim women to break the shackles that bound them to a sub-servient role, and fight for their agency and autonomy. Just like her continuous efforts, the ostracism too seemed endless. Despite the naysayers, Iqbalunnisa Hussain went on to represent India at the[Twelfth International Women’s Conference in Istanbul](https://feminisminindia.com/2021/05/31/iqbalunnisa-hussain-muslim-women-education/) - a platform for strong-minded, influential, and able women from all across the globe, to come together. **Inspirations, Influences, and Legacy** Iqbalunnisa Hussain’s return from the United Kingdom proved to be the first major step in her road to revolutionise the lives of Indian women- particularly, Muslim women. She led a path-breaking movement to dismantle the patriarchy. Using the power of educating women, and her expressive literary contributions, she managed to stand out of the norm and crack open the insecurity of men, who seethed at the sight of her success and capabilities. Her influence on her contemporaries and on the generations of women who have come after her, is unforgettable. Other reformers such as Khwaja Altaf Hussain authored pieces that shed light on the oppression faced by women. Scholar and reformist duo Mumtaz Ali and Mohammadi Begum together launched a newspaper called _Tehzeeb-e-Niswaan_. The newspaper laid emphasis on societal evils such as child marriage and woemn’s illiteracy. To this day, the feminist movement, just as other liberal struggles, are dismissed within orthodoxy as ‘modern’ and ‘western’ concepts that are solely aimed at dismantling the status-quo. Iqbalunnisa Hussain’s life and works, among many others, are proof of the fact that the struggle for gender equality has had trailblazing contributions in India’s glorious history. --- ## [Opinion] Kanuparti Varalakshmamma: A Feminist Writer And Social Activist URL: https://indianliberals.in/opinions/kanuparti-varalakshmamma-feminist-writer-social-activistwoman-doctor/ ### Body The following article revisits Kanuparti Varalkashmamma’s literary contributions to social change and improving women’s lives. Kanuparti Varalakshmamma was a prominent Telugu writer and social worker who contributed to the women’s movement during the Indian freedom struggle. Born in 1896 in Bapatla, Andhra Pradesh, she was encouraged by her father and brothers to read and write. She married early and was supported by her husband in pursuing her social and literary activities. She used to read and write letters for illiterate women around her and thus developed an interest in writing stories herself. She began her writing journey with a Telugu translation of an English story. It was published under her pseudonym ‘Saudamini’ in the monthly journal, ‘_Anasuya’_. She later wrote many stories like _Kuteeralakshmi_, _Penshanu Puchukunna Naati Ratri_, and novels like _Vasumati and Viswamitra_. She wrote columns named _Maa Chettuneeda Muchatlu_ in Andhrapatrika and _Sarada Lekhalu_ in Gruhalakshmi. She established _Stri Hitaishini Mandali_ in Bapatla, an organisation for women’s welfare.  She wrote and spoke vociferously on contemporary issues like Child marriage, Sarada Act, non-cooperation, Divorce Act, and so on.  Kanuparti Varalakshmamma was a pioneer of a literary process called _Lekha Sahityam_. These writings are in the form of letters written by the author or another fictional character and are in a casual tone similar to day-to-day conversations. _Sarada Lekhalu_ is one such literary marvel created by Varalakshmamma. It is a compilation of letters published as a column over six years that she wrote to her imaginary friend Kalpalata under the pseudonym Sarada. Through these letters, she promoted awareness, evoked debates about many social evils and problems faced by women, and tried to educate women about their rights. One of the letters narrates a conversation among women on a train about child marriage while Sarada was returning home from a trip.   An old woman says, ‘I heard they are bringing a law restricting a girl’s minimum age of marriage to fourteen years. Isn’t it against our customs and traditions?’ Then a young widow says, ‘Let it be! I was married off when I was five, and my husband died three months later. At least the women in the future would be saved from such episodes.’ Then the old woman replies, ‘Widowhood is a matter of fate. Can you avoid it even if you are married after fourteen years?’ The young widow responds, ‘At least women don’t have to experience it before fourteen. They would know what marriage is and who the husband is. Now I can’t even remember the face of my husband. Is it fair?’ The old woman had no answer. Another woman says, ‘This law has to be passed. Only then would the parents stop selling and trading their daughters in exchange for something. Girls are merely a tradable currency or a useless coin in the hands of their parents. My mother died when I was five, and my father was fifty. Society and his relatives advised him to remarry. Do you see the irony? If an old man becomes a widower, he is allowed to satisfy his desires by marrying someone again. But if a young girl becomes a widow, she has to give up all her desires and live the rest of her life alone. A young widow is expected to embrace _Vairagya_(renunciation), and an old widower is expected to embrace a new wife. How is this fair?’ She continued, ‘His new bride’s parents wanted my hand in exchange for their son, and my father agreed. My husband was sixteen and addicted to all kinds of vices. Parents don’t care whom their daughter is getting married to as long as their son is getting married. They care only about their son’s welfare and happiness and are willing to sacrifice their daughter’s life. Isn’t she also their offspring? My husband became a criminal and went missing. My father died, and my stepmother asked me to leave the house. Now I have nowhere to go!’ ‘My father sacrificed my life for his happiness. My in-laws sacrificed their daughter’s life for their son’s happiness. If women like me had agency over themselves, would they let these kinds of incidents happen? Considering the stories of such women, I support _Har Bilas Sarda’s Child Marriage Restraint Act_. I request all kind men and women to support this Act too. If women oppose this Act, they are digging their own graves. Our ancient scriptures don’t support child marriages as well. Child marriages continue to happen only because of our.…’ The train came to a halt ending the conversation abruptly, and Sarada had to get down at her station. In another letter, she described the abrupt rise in the number of child marriages just before this Act was implemented. In a letter published two years later, she discussed how the proposed amendments to the Sarada Act allowed parents to apply for an exemption to get their daughter married before the age of fourteen and how they made the Act useless. She used a simple conversational writing style in _Sarada Lekhalu_ to ask ingenious questions and promote awareness about women’s issues, contributing to the social movement of pre-independent India. --- ## [Opinion] Karsandas Mulji – The Forgotten ‘Indian Luther’ URL: https://indianliberals.in/opinions/karsandas-mulji-the-forgotten-indian-luther/ ### Body _Karsandas Mulji's reformist legacy is rooted in his efforts to break through conformist tendencies and question even the most superior authority. He is most famously known for the Maharaj Libel Case, 1852._Karsandas Mulji, a contemporary of Dadabhai Naoroji, was one of the pioneer Indian social reformers working for the cause of women emancipation. In 1850s-60s, Mulji was a prominent member of the “[Bombay intelligentsia](https://books.google.co.in/books?id=1V40DAAAQBAJ&lpg=PP1&pg=PA121#v=onepage&q=bombay%20intelligentsia&f=false)” in conflict with the “merchant aristocracy” over social issues. Mulji’s place in Indian history as a reformer is due to the Maharaj libel case in 1862, which earned him the [title](https://books.google.co.in/books?id=1V40DAAAQBAJ&lpg=PP1&pg=PA119#v=onepage&q=martin%20luther%20of%20banian%20caste&f=false) of “a Reformer, a Martin Luther of the Banian Cast”. Mulji’s early life was devoid of comfort as he was disowned by his family. He took to multiple professions – writer, editor, teacher, cloth merchant, and government administrator – to make ends meet. His reformist credentials, argues [J Barton Scott](https://books.google.co.in/books?id=1V40DAAAQBAJ&lpg=PP1&pg=PA122#v=onepage&q&f=false), put him at a disadvantage when it came to finding stable work. Mulji’s ideas were shaped in the [Elphinstone](https://books.google.co.in/books?id=1V40DAAAQBAJ&lpg=PP1&pg=PA121#v=onepage&q&f=false) of the 1840s-50s, where he shared space with the likes of Dadabhai Naoroji and Mahadev Govind Ranade. The Elphinstonians, well-versed in Western texts and the language of the new elites, were favourably positioned in the British-led administration. Mulji was no different; he was [mocked](https://books.google.co.in/books?id=1V40DAAAQBAJ&lpg=PP1&pg=PA121#v=onepage&q&f=false) for wearing trousers which amounted to a classic instance of Macaulay man. His reformism was first visible in public domain in 1853, with the publication of an essay advocating foreign travel, which was read in front of Buddhi Vardhak Hindu Sabha. The [essay](https://books.google.co.in/books?id=1V40DAAAQBAJ&lpg=PP1&pg=PA122#v=onepage&q=buddhi%20vardhak%20sabha) made him a rising star of the reform world. However, another draft essay advocating widow remarriage had him thrown out of his widowed aunt’s home, leading to his withdrawal from the Elphinstone College. Afterwards, he took work as a newspaper editor and school administrator. Then came the _Satya Prakash_ in 1855, a reformist paper targeting Gujarati Hindus. The paper had a meagre subscription of 500, yet its impact on the Bombay’s conservative Gujarati Hindu community can’t be overstated. In the 1850s, he went on to edit a series of newspapers. However, it was an article, _The Original Religion of the Hindus and the Present Heterodox Opinions,_ that has come to define the legacy of Mulji. Published in 1860, it was a reformist critique of the Vallabhacharyas and accused one of the Maharajas of sexual misconduct with the devotees. The Vallabha sampradaya is a Vaishnavite sect worshipping the child-god Krishna. The Maharajas are considered the priestly authority, acting as a mediator between the devotee and God. In response to the attack by Mulji, the Maharaja filed a libel case against him. The case was [called](https://books.google.co.in/books?id=1V40DAAAQBAJ&lpg=PP1&pg=PA124#v=onepage&q=greatest%20trial%20of%20modern%20times&f=false) the “greatest trial of modern times since the trial of Warren Hastings”. After the heated debate and salacious newspaper coverage, the Court dismissed the claims of the Maharaja. The decision was hailed as a victory for reform-minded liberals. For his contribution in exposing the corrupt practices of religious guru, Mulji was hailed as “Indian Luther” by his biographer B N Motiwala. However, historian [J Barton Scott](https://www.academia.edu/6412719/Luther_in_the_Tropics_Karsandas_Mulji_and_the_Colonial_Reformation_of_Hinduism_Journal_of_the_American_Academy_of_Religion_) has argued that representing Mulji as a reformer involved in _Protestantizing Hinduism_ would be an inadequate assessment of his legacy. Rather a more sound approach would be “to situate him within a network of reformist exchanges” as part of horizontal linkages with fellow reformists in Britain. In assessing his legacy, [Scott](https://www.academia.edu/6412719/Luther_in_the_Tropics_Karsandas_Mulji_and_the_Colonial_Reformation_of_Hinduism_Journal_of_the_American_Academy_of_Religion_) has further argued that Mulji’s reform agenda was “not simply about liberating liberal subjects but rather about producing them.” In that sense, Mulji deserves to occupy the place among the founding fathers in Indian liberal pantheon. **![](https://indianliberals.in/wp-content/uploads/2021/07/Latest-Photograph-264x300.jpg)** --- ## [Opinion] M.G. Ranade on Revival and Reform URL: https://indianliberals.in/opinions/m-g-ranade-on-revival-and-reform/ ### Body _Ranade’s ideas were so distinct because he managed to have a fine blend of Indian sensibility and Western Liberalism. Steering clear from the militancy of any kind, he sought to introduce reforms through persuasion._Aroon Tikekar, a renowned author, journalist and intellectual delivered a couple of lectures in 1998 at the University of Mumbai and the motivation behind the series was that he wanted to make the audience aware of the contribution of M.G. Ranade as a social reformer and also acquaint them with the forgotten intellectual landscape of the city. His passion for engaging with the audience and informing them about various persons, issues and events in history remains unparalleled. “It is my fond belief that, just as every aspiring cricketer wishes to exhibit someday his prowess at the game on the lawns of the Lords in London, so also every genuine Liberal, be he a professional researcher or journalist, in Maharashtra, nurtures a deep desire to interpret in his way the mission and message of Mahadeo Govind Ranade, progenitor of many reform movements in Western India,” said Late Prof. Aroon Tikekar at the beginning of his book about Mahadeo Govind Ranade. Interestingly, not long after having said this, he observed that the intellectual legacy of M.G Ranade is indeed in danger. He lamented that “The ruling elites in Maharashtra seem to have totally forgotten Ranade and the work he did for national regeneration.” Tikekar’s first statement demonstrates his high regard for Ranade. The second statement, however, attests to his level of disappointment in the political class for their utter disregard for the legacy of a truly versatile person who contributed immensely to the making of what we today call Maharashtra. In the rich tapestry of history, there are sporadic events or people whose memories or personalities shine through, Ranade was one of them. Tikekar enunciated his attainments and the most commendable aspects of his personality in the following words – “… a distinguished university student, eminent judge, brilliant ‘nationalist’ historian and economist, educative journalist, enlightened religious and social reformer, exemplary moral preacher, builder of institutions, maker of great men, friend, philosopher and guide of the young generation of his time…”.  When Tikekar saw how little people knew about Ranade during his public lectures at the University of Mumbai, he converted the transcripts and notes of his lectures into a small book ‘Ranade: Prabodhan Purush.’ Its English version is titled_ ‘Ranade: The Renaissance Man’_. This booklet serves as a primer for those who are interested in the contribution of Justice Ranade. It gave me a unique opportunity to revisit two brilliant liberals who in their way contributed to the intellectual life of Mumbai before, and to borrow the term from Tikekar himself, Mumbai got de-intellectualized. My objective is to shed light on some relevant ideas of Ranade as discussed by the author in the first chapter of the book. Ranade explained his brand of Liberalism in the prospectus of the then newly founded Deccan Sabha: “The spirit of Liberalism implies freedom from race and creed prejudices and steady devotion to all that seeks to do justice between man and man, giving to the rulers the loyalty that is due to the law they are bound to administer, but securing at the same time to the ruled the equality, which is their right under the law.”  Isn’t it interesting that Ranade was not suspicious of the political authority, but ‘giving the rulers the loyalty’ was entrenched in his idea of liberalism? This was because, unlike western liberalism that looked at the government with suspicion, Ranade’s liberalism had a strong element of moderation. Explaining the importance of moderation, he argued that “Moderation imposes the conditions of never vainly aspiring after the impossible or after too remote ideals, but striving each day to take the next step in the order of natural growth by doing the work that lies nearest on our hands in a spirit of compromise, and fairness…”. This attitude of his stood in stark contrast with some of his younger contemporaries such as Agarkar. Agarkar’s stance was anything but compromising on some of the important social issues. The difference lies in how they both approached the concepts of ‘social reform’ and ‘revival of traditions’.  Ranade strongly disapproved of revivalist ideology for he considered society as a living organism. While addressing the Eleventh Social Conference at Amraoti in 1897, he elaborated his views on the undesirability of revival. Responding to the extreme orthodox sections – those advocating a return to old ways and olden days, to the old authorities and the old sanctions, Ranade posed a simple yet important question - “What shall we revive?” The question left his orthodox friends perplexed. He reminded them of the wretched past that we could somehow leave behind. To establish the gravity of demands of returning to bygone days, he cited a vast array of questionable practices that the Hindu society had deemed normal in the past. Let us take the example of the institution of marriage. The old Hindu tradition recognized eight different types of marriages including the marriage by capture. Our society, once upon a time, recognized what is construed to be illegitimate intercourse today. The Niyoga system allowed procreating sons with the widowed wife of one’s brother. Practices like animal and human sacrifice, Sati, infanticide, hook-swinging and crushing beneath the chariots were prevalent in old days. The destructive wars between castes – especially between Brahmins and Kshatriyas and the cruel persecution of the aboriginal population was also a reality in the past. Lastly, going back in time would also require the Brahmins to cease being noble landlords and they would be expected to lead a modest existence. Ranade used these examples to prove that the plan to revive ancient customs was not a way to salvation. Those practices were far from being practicable. He concluded that “The dead and the buried or burnt are dead, buried and burnt once for all, and the dead past cannot, therefore, be revived except by the reformation of old materials into newly organized beings.” Once it is clear that revival is impossible, reformation remains as the only alternative open to sensible people. How should one tread carefully on the tough path of Reformation? In his address at Hislop College - Nagpur, Ranade outlined four methods of bringing about the desired reform. Of the four methods, the first is called the method of tradition. Those who support this method argue that the reform has to come from within and the reform has to come evolutionarily to be lasting.  This method tries to bring about reforms through the old texts that enjoy wide legitimacy in religious circles. Many times, renewed interpretations of these old texts can be used to propose reform. The second method was directly appealing to the conscience and reason of the people. Many newly educated writers like Dadoba Pandurang Tarkhadkar, Jyotiba Phule and Gopal Ganesh Agarkar were the most influential ones to appeal to the sense of justice and humanity of their readers. The third method of social reform was Reform by Penalties. This was the imposition of the constraint by the wise upon the ignorant in their common interest. The penalty was to be imposed by the state.  Ranade didn’t prefer this method of reform through social legislation. He believed that the state should step in only when the other non-coercive methods of reforms had failed.  The fourth and the last method was about separating from the rest and forming a new camp. Ranade did not approve of the last method; he opposed revivalism but he never advocated a complete break from the past. When he promoted healthy social practices such as widow marriages and marriages between grown-up persons, he was essentially revisiting the ancient traditions because they were conducive for social reforms. As Tikekar put it, “His recipe for reform was thus, a Tradition-Modernity Continuum.” He was convinced that “...there was nothing like optimum reform, it is always a half-written sentence. Every generation adds a word or two to it.” Tikekar argues that Ranade was unwilling to start on a _tabula rasa_, a clean slate.  Ranade’s idea of reform was to discard those elements in the past that were inimical to progress. And to use the enduring elements that were conducive to human welfare as a starting point for a new advance. Ranade’s ideas were so distinct because he managed to have a fine blend of Indian sensibility and Western Liberalism. Steering clear from the militancy of any kind, he sought to introduce reforms through persuasion. Ranade believed in convincing and persuading rather than imposing reforms. He tried to enkindle reason into the hearts and minds of those who opposed reforms instead of looking down upon them as the lesser mortals. The imposition of reforms was the last resort. Unfortunately, not many liberals have taken interest in interpreting the mission and message of Mahadeo Govind Ranade as Tikekar had envisaged. It makes one wonder if ideas are really immortal and can survive the onslaught of changing times as Mazzini once suggested. He said: "You may kill men; you cannot kill a great idea." Ambedkar thought it was a mistaken view. He argued “Men are mortal. So are ideas. It is wrong to hold that an idea will take roots _proprio vigore_. An idea needs propagation as much as a plant needs watering.” Ambedkar uttered these words in a[speech](http://www.columbia.edu/itc/mealac/pritchett/00ambedkar/txt_ambedkar_ranade.html#10) he delivered in remembrance of Ranade. The liberal, reformist and moderate ideas of Ranade are now required by the society more than ever, it is incumbent upon us to not allow Ranade's ideas to gather dust. --- ## [Opinion] M. G. Ranade on Wealth Creation URL: https://indianliberals.in/opinions/m-g-ranade-on-wealth-creation/ ### Body _A scholar, judge, reformer and liberal, M.G. Ranade played a significant role in dissecting the root causes behind India's economic stagnation in the second half of the 19th century. This article analyses two speeches by Ranade that outline his vision for wealth creation and economic progress in India.     _The latter half of the 19th century was very significant for the growth of Liberalism in India. For the first time census data of a country as vast as India was released. This data revealed unseen patterns and some crucial facts about the country and its economy. The concern of economic decay in the country prompted the intellectuals and businessmen to meet on 8th December 1872, at Phadtare Wada in Pune. The main motivation behind the meeting was to contemplate new ways of creating wealth and a skilled workforce in India. Rao Bahadur M.G. Ranade was invited to discuss the implications of the political condition and the economic policy of the British Indian government. He delivered two speeches in the meeting which saw the attendance of the members of Pune Vyapar Company. The arguments in these speeches were later collated by Vinayak Balkrishna Damle and were verified by Justice Ranade himself. A booklet was published in August 1873 with the title ‘_Vyapar Sambandhi Vyakhyane_’ which translates to ‘Lectures on Trade’.  In the first speech, Ranade discussed the reasons why the economic condition in India was exacerbating rapidly.  Any thinking mind in India could observe that India had a stagnation of sorts – people around were working hard and urban centres were increasing rapidly, the trade was growing and yet the nation was staggering. Many could see this phenomenon but very few could make a complete sense of it. Mahadeo Govind Ranade belonged to the latter category. He likened this situation to wasting disease. In the first few days and months, one doesn’t realize that he or she is suffering from a fatal disease because it doesn’t show any apparent sign of having swallowed the person. But it keeps on eroding the health of that person from inside. Similarly, the economic condition of India was deteriorating day by day and the people hadn’t yet realised that it was fatal for the nation. Ranade identified two root causes of this phenomenon. First, at that time India was being governed from London. It wasn’t just his criticism of the British who were governing India, but it was also about the place from where they administered the country. Secondly, India lacked the industries and the means of acquiring the skills and talents necessary for modern industries. India had not been a beneficiary of the industrial age and hence Indians didn’t have the means to gain the skills required to run the industries. The genius of Ranade lies in the fact that he used data to substantiate his economic arguments. He used ballpark estimates when data wasn’t easily available. He also supported his tentative estimates with reasons sound enough to prove that those estimates were moderate and were unlikely to produce a skewed result. For instance, he calculated and compared the per capita tax levied on the people in the territories and provinces governed by the British. According to him, it was Rupees 9 per person per annum in the British territories. On the other hand, the average tax for the people in princely states was technically higher. He estimated it to be around Rupees 12 per person per annum. This may give an impression that the native kingdoms and princely states were more exploitative. However, Ranade argued that this prima facie evidence about the average tax may be misleading. He provided the following details: - The British Indian government ordered the material for its offices from England and that cost around 1.5 crores. - The salaries of government servants in England and the establishment there would consume half a crore. - The army and navy had their share of two and a half crores. - The British fought wars and protected India from time to time for which they incurred heavy costs. This created a huge war debt of a hundred crores which the British decided to exact from Indians in instalments. When Ranade argued about this in 1872, there was still debt worth Rupees 90 crores and India was paying it back with the interest. This accounted for 4.5 crores per year. - The British government introduced the railways and since the project was running in loss, it was also being recovered from the revenues collected in India. The above-mentioned factors amounted to approximately 10.5 crores and this amount would effectively go to Britain. Around 150000 Europeans were working in India in the military and other bureaucratic positions and there were few traders. They had huge salaries and incomes, the total of which was worth 5.5 crores. This coupled with the previous 10.5 crores would ultimately end up in Britain. Ranade highlighted that India was sending a tribute worth 16 crores. He further argued that even if things were slightly different – such as if the government was being run from India and if possible, by Indians with the same salaries, a large amount of wealth would remain in India. He elaborates this giving the example of native states. In those princely states no matter how frivolously Indian princes and kings behaved they would still empty their treasures by and large on the native Indians. They might shower their wealth irrationally on the darbaris and dancers, and the prostitutes or priests. The wealth would still be distributed and circulated among Indians. That’s why Ranade opined that the princely states fared well in terms of protecting the Indian resources and wealth. After he made the point about the tributes being exacted by the British Indian government, he shifted his attention to the question of trade. He once again presented exhaustive data about the nature of India’s trade with the world. It may come as a surprise to many of us that India’s trade hadn’t reduced even when there was a continuous drain of wealth. Ranade established that international trade had risen in volume. The trade was increasing in terms of volume but the problem was that the terms of trade were unfavourable for India. India sent a humongous amount of raw material and imported finished goods of all sorts. These trade policies were formulated by the British government in a way that violated the cardinal principles of economics.   Ranade opined that India should import more than what she exports or she should import at least as much as she exports. This was not happening in the case of India. If India exported materials worth 52 crores she imported products worth 32 crores. The situation had remained constant in the last 20 odd years and he lamented that India was the exception to the general trend in international trade to allow this discrepancy between imports and exports.  He also mentioned that this system had created a situation where Indians were incrementally becoming dependent on imported goods and the Indian artisans and workers were now losing their market to the foreign goods due to artificial conditions. Ranade further tried to estimate the total savings of Indians based on the collection of income tax and the population in the British territories. According to his calculations around a quarter of the total savings of Indians would go abroad in the form of tribute. He argued that if this money was contained in India, it would have helped a great many people. He compared the situation in India to a vessel with a hole at its bottom. He wanted to convey that a country that regularly loses so much wealth to artificial conditions, cannot become prosperous.  Therefore, he suggested that we couldn’t possibly reinvigorate the economy without bringing about the most fundamental changes in how this country was being governed. There was very little that Indians could do about this political problem. The drain of wealth in the form of tribute and tax was not the only way the Indian economy was decaying. If the government was guilty of bad policies, the people of India were also guilty, to a lesser extent if not equally, of some irrational behavioural patterns that were costing them a fortune.  Ranade argued that Indians had a propensity to waste around 1/8th of the total savings. Warning people to not consider this as an exaggeration he stated the following sequence of facts.   - Gold and silver worth rupees 165 crores had come to India in ten years before 1872. - Gold and silver worth rupees 15 crores went out of India. - From the rest of 150 crore rupees worth of gold and silver, half was used to mint money. - The residual gold and silver – which was around 75 crores in value just disappeared into thin air! In other countries, the excess gold and silver would get into transactions and that is how it would quickly become a part of the economy. Whereas in India people made ornaments of all sorts for their wives and kids. This gold or silver would gradually wear off and reduce in quantity. Once the ornaments were made out of these valuable metals, they were hardly useful for the owner. They would be used if the owner suffered from economic difficulty. However, in most cases, these ornaments would just wane. According to Ranade, it was a dangerous and self-defeating practice. Gold and silver worth rupees 7-8 crore were reduced to nothing every year. When added to the aforesaid tribute of 16 crores, this amount was almost tantamount to a sum of 24-25 crores. This was the loss that India incurred regularly. Ranade proposed a simple but useful solution to increase the possibility of accumulation of wealth in India. He suggested that Indians, at such a juncture, must spend less. He argued for increasing the savings to nullify the effect of the lost 25 crores. He was also clear about how this accumulated wealth was to be used. This capital was to be wisely invested in profit-making businesses. Good returns would create a greater amount of new wealth. Finally, Ranade warned them against blindly accumulating the money and emphasized why it should be invested and reinvested to create more wealth for one’s own sake and for the nation. Thus Ranade’s solution to the worsening economic condition of India depended on a measured and disciplined frugality and well-thought investment of capital. --- ## [Opinion] Minoo Masani : From Socialism to Liberal Swatantra Party URL: https://indianliberals.in/opinions/minoo-masani-from-socialism-to-liberal-swatantra-party/ ### Body _In Masani, Indian liberals should find a more appropriate icon to emulate. Rajaji, after all, was a self-identified conservative rooted in his Hindu identity. Minoo Masani, in contrast, drew his ideas from the West to shape liberal India._The forgotten politician Minoo Masani’s illustrious public career was an exercise in collaboration and confrontation with the other leading Indian nationalist figures. Himself one of the founding fathers of modern India, Minoo was both a nationalist and an internationalist in his intellectual pursuits. As a young admirer of the USSR experiment and an advocate of democratic socialism, Minoo worked with Jayaprakash Narayan and Nehru to turn Congress towards the left in the 1930s. His active leadership of Congress Socialist Party (CSP) turned both Sardar Patel and C Rajagopalachari against him. Later in the 1950s though, Minoo Masani would collaborate with JP, Patel, and Rajaji to counter the spread of communism and Nehruvian socialist policies. Masani’s transition from an admirer of the Bolshevik Russia to the propagator of market liberalism in India reflects his pragmatism and open-mindedness, traits rarely found in most intellectuals and politicians. ### **Soviet Admiration and Communist Leanings ** Minoo Masani’s tryst with politics began during his stint at the London School of Economics. There, he came in contact with Harold Laski and V Krishna Menon; dabbled in student politics as a Labour member; and visited the Soviet Union. Masani [admitted](https://books.google.co.in/books/about/Bliss_was_it_in_that_Dawn.html?id=ulyUnAEACAAJ&redir_esc=y) to learning more about politics in LSE than many Indian politicians would do in a lifetime. While Moscow was a great improvement, Masani found Leningrad a shadow of its former self while visiting USSR in 1927. After his return, an impressed Masani wrote a series of articles for the Bombay Chronicles and advocated the USSR as a model for a free India to emulate. In his zeal, he even urged Pandit Nehru to visit the Soviet Union when the two met in London in 1927. Minoo Masani’s second visit to USSR would come in 1935 as a member of the CSP to foster a deal with the Soviet Communists. _Soviet Sidelights_, his book on the Russian experience, paid a glowing tribute to the Soviet achievements. Later, in retrospect, he would call it naïve. Back in India, Masani’s effort to start a socialist front had to wait for Gandhian manoeuvring. The failure of the first Roundtable talk led Gandhi to revive the civil disobedience movement. Masani also got involved this time and was imprisoned in Nashik in 1932. A group of socialists including JP, Achut Patwardhan, and Ashok Mehta were among the political prisoners in the Nashik jail. Minoo Masani’s discussions with JP paved the way for an anti-imperial socialist outfit within the Congress party. After their release, the Bombay branch of the CSP was formed in 1934. The CSP positioned itself as a national socialist group within Congress to challenge the programs of both Mahatma Gandhi and the conservative faction. Masani, who was then the Joint Secretary, went on a mission to bring more leaders to the fold. Earlier, in December 1933, he met Nehru in Allahabad and requested him to join the group. Nehru welcomed the formation of the socialist group in Congress. The radical socialists of Congress also had to face flak from outside and inside the party. CPI, following the Sixth Comintern Congress, labelled them as the social fascist. At the Lucknow Session of Congress in 1936, Rajendra Prasad took a jibe at Nehru and his socialist colleagues for deriving ideas from foreign books, inaccessible to Congress conservatives who came from a humble peasant background. Sardar Patel also had an intense dislike for the reds. He denounced the Congress socialists as the “sappers and miners of the Communist Party”. The wittiest takedown, however, came from Gandhi himself. In response to Minoo Masani’s socialist agenda, he wrote, “the progressive nationalisation of all the instruments of production, distribution and exchange” was “too sweeping to be admissible. Rabindranath Tagore is an instrument of marvellous production. I do not know that he will submit to be nationalised.” ### **Socialism Reconsidered and Democratic Planning ** Masani’s distancing from Soviet-style communism was seemingly precipitated by a series of events. In his later writings, he [attributed](https://ccs.in/sites/all/books/com_books/profiles_in_courage.pdf) it to the failure of the USSR to deliver material prosperity and the influence of Gandhi. The internationalist Masani was aware of the Stalinist purges and had criticised it in 1938 in the following words – “dictatorship of the proletariat has degenerated into a personal dictatorship”. He asked his fellow socialists to mobilise world socialist opinion to check further bloodshed. Characteristically, Indian communists, Nehru and JP criticised Minoo Masani for his scathing denouncement of totalitarian communism. By this time, Masani was also making a [distinction](https://books.google.co.in/books/about/Bliss_was_it_in_that_Dawn.html?id=ulyUnAEACAAJ&redir_esc=y) between his scientific socialism and the sentimental socialism: “The real choice today seems to me to be between scientific socialism and dogmatic or authoritarian socialism.” Minoo’s criticism of the communist movement was further bolstered by the Communist Party of India’s bid to capture the CSP. Under the United Front strategy of the 7th Communist International, CPI was seeking to collaborate with the CSP, only to use it later for communist ends. Masani published in 1938 the secret communist circular which detailed the tactics for the capture. Ultimately, both JP’s insistence on the Left unity and the Congress vacillation over joining World War II led Masani to resign from CSP and retire from active politics. In 1956, Masani [explained](https://ccs.in/sites/all/books/com_books/profiles_in_courage.pdf) Gandhi’s role in turning him away from communism. Gandhi’s dictum that the end doesn’t justify the means translated into a repudiation of communist insurrections. Moreover, his characterisation of the state as the biggest threat to human liberty helped Masani fix his battles. However, as Minoo Masani’s biographer [S V Raju notes](https://ccs.in/sites/all/books/com_books/profiles_in_courage.pdf), his departure from CSP didn’t turn him into an advocate of liberty. A series of essays on socialism published in the 1940s gives insight into the evolution of Masani as an intellectual shaped by the events around the globe. [_Socialism Reconsidered_](http://indianliberals.in/~_admin/pdflanguage?id=590973500.pdf), published in 1944, sought to question four core assumptions of Marxism. Masani, in a candid admission, stressed on the need for self-criticism after 25 years of Bolshevik revolution. The pamphlet though didn’t go down well with Pandit Nehru who was furious at Masani for [calling](https://books.google.co.in/books/about/Bliss_was_it_in_that_Dawn.html?id=ulyUnAEACAAJ&redir_esc=y) October Revolution “a false dawn”. The four Marxist assumptions put under test included nationalisation leading to economic democracy; the dictatorship of the proletariat as a temporary transition phase; mobilisation of an international proletariat collective; and socialism as the only alternative to capitalism. On all these counts, the dogmatic doctrine floundered when applied to the real world. Minoo Masani’s desirable version of socialism would combine economic equality with individual liberty and political democracy. The influence of Gandhi was visible in Masani’s advocacy of trusteeship which for him served as a valuable transition technique. Masani’s conception of planning, as outlined in a [1945 article](http://indianliberals.in/~_admin/pdflanguage?id=590973500.pdf), sought to combine Big State machinery with individual freedom and private enterprise. His democratic planning was seemingly influenced by FDR’s Big Deal and the Scandinavian social democracy. Gandhi’s agenda of small cottage workshops in the countryside also found a place in the plan. Even though Masani recognised the need to balance planning with freedom, his policy prescriptions (licensing, wage and working condition regulations, price fixation) would have led to the curtailment of economic freedom. India’s socialist regime later implemented many of these ideas resulting in economic inefficiency. With the publication of his next big idea on the mixed economy in 1947, Minoo Masani seems to have inched closer to liberalism. Delivered as a lecture at the Bombay University, [_A Plea for a Mixed Economy_](http://indianliberals.in/~_admin/pdflanguage?id=590973500.pdf) sought to combine free-market capitalism with a degree of state involvement. The importance of economic growth was recognised as he argued that the “economics of production must take precedence over the economics of distribution”. He would now oppose the nationalisation of the economy, explain profit in terms of incentive to entrepreneurs, compare the free market in the USA with the communist USSR, and advocate foreign capital inflow to spur industrialisation. The peculiar feature of Minoo Masani’s mixed economy was the three-sector model – nationalised existing sectors barring the basic industry; new Public-Sector Enterprises covering areas left by the free enterprise; and the rest of the economy driven by free markets. The PSEs were to be managed by a small board of professionals seeking to combine efficiency with welfare. The influential proposal was later adopted under the Nehruvian socialism which, according to [Masani](https://ccs.in/sites/all/books/com_books/profiles_in_courage.pdf), _turned ‘mixed economy’ into a ‘mixed-up economy’_! ### **Liberal Dissent and Swatantra Years ** Seemingly the failure of the mixed economy model propelled Masani into the liberal fold. He spent his earlier years on combating communist influence in India rather than a positive articulation of liberal ideas. In response to the communist infiltration of media and cultural outfits, Masani joined hands with JP, Ashok Mehta, and A D Gorwala to form the [Indian Committee for Cultural Freedom](https://ccs.in/sites/all/books/com_books/profiles_in_courage.pdf) in 1950. The Committee was affiliated with the Paris based Congress for Cultural Freedom, an American anti-communist advocacy group. Masani’s anti-communist avatar also made him amenable to Sardar Patel. With the help of Patel in the form of office space in Bombay, a telephone connection and funding, Masani founded Democratic Research Service in November 1950. The Service published pamphlets and Freedom First magazine, both disseminating anti-communist propaganda to the Indian public. In the_ Communist Party of India: A Short History_ (1954), Minoo Masani [called it](https://ccs.in/sites/all/books/com_books/profiles_in_courage.pdf) a dagger pointed at the heart of Indian democracy. The [1950s saw Minoo as a lonely liberal voice in parliament](https://www.livemint.com/Opinion/AL1dGwrVLENYQm0YhuGXFI/Unaffiliated-the-case-of-1957.html/) railing against the socialist policies of the Nehru government. Masani’s efforts at creating a liberal political front had to wait for the end of the decade. The opportunity came with the Nagpur Resolution of Congress in 1959. The Congress Socialists’ advocacy of joint cooperative farming was widely interpreted as the state bid to collectivise peasants’ property in emulation of China and the USSR. Sensing an opportunity to create a broad-based coalition of big business, urban middle class, peasant proprietors and big landlords, Minoo Masani persuaded Rajaji to lead the new political party. Rajai, for quite some time, was very critical of state interventionism in his public pronouncements. As political scientist [Howard Erdman](https://archive.org/details/swatantrapartyin00erdm) has argued, the newly minted Swatantra Party had both Forum for Free Enterprise and All India Agriculturists’ Forum as its midwives. The fact that Swatantra was a coalition of big business, feudal zamindars, princely interests as well as urban middle class and peasant-proprietors had opened it to criticism from the left. Pandit [Nehru dismissed the party](https://penguin.co.in/book/non-fiction/rajaji-a-life/) as belonging to ‘the middle ages of lords, castles and zamindars.’ Never mind the fact that the Party had difficulty in [attracting funds](https://penguin.co.in/book/non-fiction/rajaji-a-life/) from big business who were afraid of the repercussions from the Congress controlled state. In ideological terms as well, the party inherited a diverse lot. Rajaji and KM Munshi were Hindu conservatives; Homi Mody and Minoo Masani were westernised liberals; N G Ranga was the Gandhian peasant leader; the Raja of Ramgarh and Maharani Gayatri Devi represented princely interests. The Swatantra Party’s electoral career was akin to a short-lived boom and bust cycle. The 1967 election saw it emerging as the single largest opposition party only to be swept aside in the Indira wave of 1971. Masani had skilfully steered party as a General Secretary and then the President. The devastating defeat made Minoo Masani resign from the party presidency and retire from politics altogether. The sorry demise of Swatantra, however, didn’t put an end to Masani’s liberal activism. He would go on to build and nurture civil society organisations wedded to the liberal cause. DRS [winded up](https://ccs.in/sites/all/books/com_books/profiles_in_courage.pdf) after the fall of communism, and the Freedom First shifted focus from anti-communism to positive advocacy of liberalism. The [Leslie Sawhny Programme of Training for Democracy](https://web.archive.org/web/20010809230349/http:/www.liberalsindia.com/indianliberals/profiles/minoomassani.php/) was Masani’s effort to train young people in democracy and build a liberal cadre. He also set up the Project for Economic Education in collaboration with the liberal economist B R Shenoy’s Economic Research Centre to disseminate liberal economic ideas in public domain. In Masani’s institution-building drive could be found lessons for Indian liberals of fostering a pro-liberty public opinion. Zareer Masani, historian and Minoo’s son, has [argued](https://theprint.in/opinion/no-accident-india-forgot-swatantra-leader-my-father-minoo-masani-the-beef-eating-parsi/250483/) that the public discourse in India has recently seen a revival of Rajaji’s legacy while Minoo, the beef-eating, westernised, and atheist Parsi, remains forgotten. I would argue that in Masani, Indian liberals should find a more appropriate icon to emulate. Rajaji, after all, was a [self-identified conservative](https://penguin.co.in/book/non-fiction/rajaji-a-life/) rooted in his Hindu identity. Minoo Masani, in contrast, drew his ideas from the West to shape liberal India. --- ## [Opinion] Mithan Tata Lam – The Unexplored Life of an Indian Suffragist URL: https://indianliberals.in/opinions/mithan-tata-lam/ ### Body _Indian suffragists had an immense role to play both in the nationalist struggle and the subsequent universal adult franchise. One among them was Mithan Tata, one of the first women to be called to the English Bar and the first woman lawyer ever appointed to the Bombay High Court. _Unlike most large democracies, the Indian constitution has adopted universal suffrage from its inception. Indian suffragists deserve a significant share of the credit for this progressive cornerstone of independent India. Along with Madam Bhikaji Cama, Princess Sophia Duleep Singh, and Lolita Roy, Mithan Tata Lam too joined the women’s suffrage movement in British India. Mithan Tata Lam (1898-1981) was born in Maharashtra to Ardeshir Tata and Herabai Tata. Her father worked as an employee in a textile mill, while her mother was a women’s rights activist. Mithan’s parents ensured that their daughter gets a well-rounded education, and sent her to reputed schools. She pursued her graduate studies at Elphinstone College, Bombay, where in she earned an honours degree in Economics. Her brilliant academic performance also won her the Cobden Club Medal.  Mithan’s mother, Herabai, had an immense role to play in her introduction to the suffrage struggle. Together, the mother-daughter duo achieved many firsts for Indian women. Herabai’s interest in Theosophy led her to make acquaintances with Annie Besant. In addition to being a theosophist, Besant was a prominent women’s rights activist and Indian self-rule supporter at the time. In 1911, Herabai met with suffragette Princess Sophia Duleep Singh. At the time of their meeting, Singh donned a badge that read, “Votes for Women.” Much like the words on the badge, Singh's thoughts influenced Herabai’s understanding of the suffrage movement in India. She also interacted with other influential suffragists of the 20th century. By 1915, Herabai had become the honorary secretary of the Women’s Indian Association. In 1919, Mithan joined her mother’s work as a suffragist. The duo travelled to London to present[a memorandum on the women’s franchise](https://blogs.bl.uk/untoldlives/2015/07/herabai-and-mithibai-tata-british-support-for-indian-suffragists.html), alongside Sarojini Naidu, before the Southborough Franchise Committee. The  Committee was set up by the British in 1918. They sat in India for a year, and recommended a scheme of territorial urban and rural constituencies based on land revenue, communal and special interest representation. The suffragists’ meeting with the Franchise Committee was to address the British government while the final readings of the Government of India Bill (1919) were being put through the British Parliament. The suffragists’ goal was to eliminate sex disqualification in the bill, which explicitly barred women in India from franchise. Mithan and Herabai’s statement - titled _“Why Should Women Have Votes?” -_ was brought to the India Office on September 25th, 1919. Among their reasons for granting voting rights to women, Mithan and Herabai’s statement read: _“It has been recognised now in all countries that the sex barrier has been a grave mistake, is out of date, unworthy of the times, a relic of past days when might was above right … Why should India lag behind others in this respect and create a sex barrier where one does not exist, and thus brand Indian women as inferior to their sisters in other countries.”_ They also argued, _"Attempt to reform without the cooperation of women, and you are simply raising a paper fabric on foundations of sand."_ Mithan, Herabai and other Indian suffragists succeeded in placing the rights of Indian women on a global platform. For this liberal cause, they [brought together organisations and individuals from India and the United Kingdom](https://parsikhabar.net/events/commemorating-zoroastrian-and-indian-women-in-the-british-suffrage-movement/18713/). Though one nation was colonised by the other, individuals from both recognised their common goals in raising women’s presence and impact in the public sphere. In their support, suffrage organisations and individuals in Britain began sending letters to the India Office. Unfortunately, these statements and petitions from Mithan and Herabai, as well as British suffragists proved to be unsuccessful. The Government of India Bill (1919) did not include women’s franchise. However, the British government did concede autonomy to individual Indian provinces to provide enfranchisement to women. These efforts by the suffragists led to the enfranchisement of women for the first time, in Madras in 1921. The mother-daughter duo continued their stay in the United Kingdom. While Mithan pursued a post-graduate degree in economics and law at the  [London School of Economics](https://blogs.lse.ac.uk/lsehistory/2018/10/31/a-mother-and-daughter-at-lse-herabai-and-mithan-tata/), Herabai also enrolled in courses in administration, social sciences and economics at the institute, from 1919 to 1922. During the course of her [studies in London](https://www.lse.ac.uk/about-lse/lse-leading-women/biographies/herabai-mithan-tata), Mithan was one of the two students to be introduced to George V and Queen Mary. Mithan was also admitted to Lincoln’s Inn as a barrister in 1920 - only a year after Sex Disqualification (Removal) Act (1919) had allowed women to enter public office. In 1923, she became one of the first women to be called to the English Bar. A year later Herabai and Mithan returned to India, where Mithan practiced at the Bombay High Court as the first woman lawyer in its history. She was also a professor of law at the Government Law College, making her the first woman to be a law professor in India. Mithan described her time at the Bombay High Court as its lone female lawyer: _“Like a new animal at the zoo, with folks peeping through doorways…as soon as my shadow crossed from the library to the common room, there would be an uncomfortable silence, making me feel even more self-conscious."_ Interestingly, her first appearance at the Bombay High Court was fuelled by systemic misogyny. Reportedly, a solicitor whose client had a watertight case approached Mithan. He claimed about his client, “He has such a good case that he cannot lose…but he wants to inflict upon the opponent the humiliation of being defeated by a woman”. Being the first of her kind, Mithan rallied against sexism within the legal profession by asking [“how can a woman be declared unfit without even being given a trial?](https://www.bbc.com/news/world-asia-india-55134978)” Gender biases and misogyny within theoretical and professional disciplines is quite pervasive. Yet her efforts in the legal practice challenged the age-old hierarchies that thrive in courtrooms and public offices. These hierarchies are created and sustained by patriarchal powers, and Mithan led the way to dismantle those to the best of her ability. She is not only seen as a feminist icon but a liberal icon too, for her interventions in the legal sphere challenged and disrupted systemic misogyny. In doing so, they led to law becoming a more inclusive profession. Soon, Mithan became a reputed name in the legal channels of Bombay, and worked on cases ranging from currency counterfeiters to Jewish betrothals. Outside the court, her liberal attitudes caused her to work extensively on gendered legislation for inheritance and marriage. She also became a popular advocate for women’s and children’s rights. Mithan was married to fellow lawyer, Jamshed Sorab Lam. He supported her work on the betterment of Bombay’s slum dwellers by improving health and infrastructure facilities. After three years of practice at the Bombay High Court, Mithan Tata Lam was appointed as a Justice of Peace, and as a member of the committee on the Parsi Marriage Act (1865). Her contribution to the committee led to an [amendment](https://first100years.org.uk/mithan-tata-1898-1981/) of the Act, i.e. the Parsi Marriage and Divorce Act (1936). Adding to her list of firsts, in 1947 Mithan became the first woman Sheriff of Bombay. She also chaired the Women’s Committee set up for the Relief and Rehabilitation of Refugees from Pakistan, in 1947. She was also an active member of the All India Women’s Conference, and served as its president from 1961-62. The AIWC also ran a journal called _Stri Dharma_, and Mithan served as its editor for five years. She held leadership and representative positions in the National Council of Indian Women, the Women Graduates Union of Bombay, the Indian Federation of Women Lawyers, the International Federation of Women Lawyers, and the United Nations. For her efforts and contributions, she was awarded the Padma Bhushan in 1962, by the Government of India. Mithan Tata Lam passed away in 1981, leaving behind an everlasting legacy that revolutionised legal, social, and political reform in India. What sets her apart from most of the liberal and feminist figures of her time is the kind of upbringing she had. Through her mother, Mithan was inducted into the struggles on women’s rights. Herabai also provided a bridge for her daughter to interact and be influenced by pioneers in the Indian suffragists movement. Her father, Ardeshir Tata is also credited for being far ahead of his time. To this day millions of women are denied an education, and yet in the early 20th century, Ardeshir [helped his wife and daughter create a better future for themselves](https://feminisminindia.com/2019/12/13/mithan-tata-barrister-advocated-womens-voting-rights/). In 2021, we mark the 100 year anniversary of women first being enfranchised in Madras. The largest democracy in the world would not be what it is today without the consistent efforts and contributions of women such as Mithan Tata Lam. Hence, it is essential that we remember the efforts of the women who led the way for an inclusive and liberal society for the future generations of Indian women. **![](https://indianliberals.in/wp-content/uploads/2021/08/Kavya-Sharma-Yearbook-Picture-scaled-e1628765339239-287x300.jpg)** --- ## [Opinion] N. Dandekar on the Role of the Indian Navy URL: https://indianliberals.in/opinions/n-dandekar-on-the-role-of-the-indian-navy/ ### Body When the world was divided between the communist and the capitalist blocs, India chose to remain non-aligned. The Indian government decided to use its resources primarily to undertake developmental programmes. Considerations of defence and security were always secondary. The accepted objective of the Indian armed forces was the defence of the country. The problems associated with strict adherence to this objective came to the fore after the Indo-Pakistan War of 1965. In the 1965 war, the Indian government issued an extraordinary instruction that Indian vessels should not operate north of a line due west of Porbunder. Even in the South of this line, the Indian Navy was not expected to engage enemy vessels beyond 200 (nautical) miles of the Indian coast. This was an inappropriate defence posturing in times of war. The weaknesses in this strategic thinking were exposed by Narayan Dandekar, a Member of Parliament representing the Swatantra Party in the Lok Sabha. In his speech delivered in 1967, he argued that defensive posture did not mean supinely waiting for somebody to attack us or waiting till we were ‘gheraoed’. This indifference towards the enemy when he armed himself and prepared for the war, coupled with our retaliation only in times we were under attack was seen as a misinterpretation of the word ‘defence’. Dandekar asserted that an appropriate posture for the armed forces would involve defence from strength. He described it as an aggressively defensive posture. In what came after the introduction to his speech he offered several examples of how the approach towards defence needed a complete conceptual and material overhaul.   **Need for Two Fleets** When N. Dandekar argued for this aggressively defensive role of the Indian Navy, he was unhappy with how the Indian Navy was organised at the time. Therefore, he made a strong case for two separate fleets operating under two commands. In 1967 when he expressed his dissatisfaction with India’s defence preparedness India had only one fleet based at Bombay and Cochin. It strained India’s capacity to guard its coasts at the same time. Even though the question of having two commands had been under consideration since Independence, the decision was not made. The Swatantra Party pressed for the creation of two naval commands and releasing grants for naval preparedness to protect India’s sovereignty and defend her freedom. **Defining the Role of the Indian Navy in the Bay of Bengal** In his speech, Dandekar identified Pakistan and China as two hostile countries. He expected India to prepare to defend itself against these two either acting separately or jointly or simultaneously. This threat perception from the neighbours informed the Swatantraite's understanding of what the Indian Navy’s role should have been. He listed five simple principles that the Indian Navy on the east, in the Bay of Bengal and the Indian Ocean would have to perform.  - Keeping a strict and continuous watch on the entrances into the Bay of Bengal and the Indian Ocean. - In case of hostilities with China or Pakistan the navy should detect, hunt down and destroy any intruder coming into the Bay of Bengal. - If the intruders entered India’s waters it was the job of the Indian Navy to defend the Andaman Islands. - If the enemy forces managed to go beyond these islands, the navy had to guard the eastern coast. - If the enemy was already present in the Bay of Bengal, the navy had to protect the commercial sea routes in the Bay of Bengal and Indian Ocean. **Centrality of Aircraft Carriers in the Fleets**** **Further, N. Dandekar discussed the composition of the proposed fleet protecting the East Coast. He highlighted the need to have two aircraft carriers for the Eastern Fleet. In case having two aircraft carriers was not possible, India needed at least one aircraft carrier in the Eastern Command. The fleet would also have an appropriate number of fast, well-armed protective units for each one of these aircraft carriers. These smaller faster well-armed offensive units would include destroyers, corvettes, and frigates poised to intrude vessels and especially submarines. While surface naval units would rarely intrude into Indian waters, Dandekar raised concerns about hostile submarines moving freely through the Indian waters. **Fortification of Andamans**** **Interestingly, Dandekar strongly recommended the fortification of Andamans. He wanted Andamans to be converted into a first-class Advance Base. He wanted this to become the Defence Ministry’s top consideration. This base would have highly trained units of the army, navy and air force. They should be constantly alert and routinely carry out combined exercises. In addition to this, he emphasised the need for the chain of airfields on the eastern coast of India from where long-range land-based reconnaissance air force units could keep an eye on incoming intruders.                **Relevance of Dandekar’s Ideas in Peacetime** The prescriptions of the Swatantra Party and its insistence on reorganisation of the Indian Navy did not fall on deaf ears. Indian Navy established the second naval command in March 1968. Today Indian Navy has two operational aircraft carriers. The second aircraft carrier was inducted only in 2022. The role of the Indian Navy has evolved and its footprint has now grown manifold. Now the Indian Navy deploys its ships from Seychelles to the South China Sea. The Indian Navy checks the Chinese threat in the neighbourhood and also defends the smaller neighbours and sea lanes of communication from non-state actors such as pirates. India responded quickly and perhaps was the first responder reaching out to Indonesia after the Tsunami in 2004 and to Myanmar when Cyclone Nargis hit in 2008. In 2014 when the desalination plant in Maldives got damaged in a fire, India moved quickly to provide 35 tonnes of freshwater. The Indian Navy played a crucial role in the delivery of water. India sealifted stranded Indian nationals and at times nationals of friendly and hostile countries alike from war zones and conflict-ridden areas of the Middle East. Operation Sukoon (2006) during the Israel-Lebanon crisis and Operation Raahat (2015) during the Yemen crisis are examples of the growing involvement and capabilities of the Indian Navy in the region. These are a few examples from among numerous instances of the Indian Navy offering humanitarian assistance.  The Swatantra Party and its members are remembered for their appreciation of the old liberal ideas. However, one must not forget that their ideas were shaped in the context of the Cold War. The Indian government had decided not to join any collective security arrangements. India chose to remain non-aligned and adopted a defensive self-help approach. Though Swatantraites were liberals so far as the economic issues were concerned, they frequently took a realist view of national security and foreign policy. Dandekar too was a realist and his threat perception was further augmented by the Cold War reality. The ideas he proposed and the approach of aggressive defence as outlined by him are relevant even today. The evolving role of the Indian Navy is in tandem with his approach of acting from the position of strength. The role of the Indian Navy is appreciated across the world because of its capabilities and long experience. Only the powerful can indeed protect their freedom in times of crisis, for which they prepare in times of peace. type=content&p=8580). Needs editorial review._ --- ## [Opinion] Palkhivala’s Lost Battle Shapes the Future of Indian Online Gaming URL: https://indianliberals.in/opinions/palkhivalas-lost-battle-shapes-the-future-of-indian-online-gaming-2/ ### Body In 1957, the courtrooms in India witnessed a high-stakes legal battle. It was fought in two innings, first in the Bombay High Court and later in the Supreme Court of India. The Supreme Court's verdict in _R. M. D. Chamarbaugwalla vs. Union of India_ outlined core principles to determine if any economic activity constituted gambling. Even after 69 long years, the doctrines applied to interpret the Constitution inform our understanding on matters pertaining to gambling and betting. In the light of the recent ban on online real money games by the Union Government, this oft-forgotten legal dispute demands a fresh glance from anyone interested in public policy. One of the brightest advocates in independent India represented the parties involved in this legal conflict. Nani Palkhivala represented R. M. D. Chamarbaugwalla, the founder and Managing Director of R. M. D. C. (Mysore) Limited against the State of Bombay and later against the Union of India. **The Witch-hunt** The state legislature of Bombay regulated gambling and betting through the Bombay Lotteries and Prize Competitions Control and Tax Act, 1948. This law made licences mandatory for legal recognition. It further imposed taxes on the amounts received by promoters of licenced competitions. Renewal of licences was subject to administration’s discretion. To avoid taxes, stricter controls, and uncertainty, Chamarbaugwalla shifted his operations to the neighbouring State of Mysore. Anyone who understands the distinction between tax avoidance and tax evasion would appreciate this as a rational and economic choice.[1] Chamarbaugwalla ran a crossword prize competition in his weekly newspaper ‘Sporting Star’ printed and published from Bangalore in the erstwhile State of Mysore. He operated from this alternative location and continued to conduct the crossword competition in the State of Bombay until the state law was amended to his disadvantage. The Bombay Lotteries and Prize Competitions Control and Tax (Amendment) Act, 1952 deleted the clause that excluded prize competitions from newspapers ‘printed and published outside the province of Bombay’.[2] It extended the law's reach to include operations of R.M. D.C. (Mysore) Limited. Moreover, it inserted _Section 12(A)_ introducing a new tax for such competitions. Chamarbaugwalla was already paying substantial tax to the State of Mysore on his gross receipts from the crosswords. The amended rules increased compliance and operational costs and substantially eroded the profits of Chamarbaugwalla. Therefore, he challenged the Act and the amended rules. **Palkhivala Stunned the Government** The first round of legal action was played out in the Bombay High Court. The main contentions of Nani Palkhivala against the validity of law are summarized below. - The amendments introduced in 1952 were extra-territorial or outside the jurisdiction of the State of Bombay. - The prize competitions under scrutiny were valid commercial or trade activities. Therefore, the disputed Act fell within the scope of entries 26 and 60 of the State List in the Seventh Schedule of the Indian Constitution.[3] This meant that these enterprises enjoyed the constitutional protection of _Article 19(1)(g)_ and _Article 301_ against unreasonable restrictions.[4] - The impugned act was meant for gambling, whereas the crossword prize competition was hardly a lottery or chance-based competition. Instead, it required exercise of skill and considerable knowledge. The Indian Constitution had protected the games that involve skill under the right to trade. Games of chance would not have enjoyed the same protection. The single judge bench of the Honourable High Court delivered a verdict in favour of Palkhivala. It ordered the State of Bombay to refrain from implementing the impugned Act and allowed the petitioners to carry on the business as usual. The State of Bombay appealed in the High Court.  The Court of Appeal upheld the ruling of the trial court while differing in some respects.[5]  It held that the State of Bombay was competent in enacting the Act under dispute. The Court held that prize competitions were valid businesses and they did not constitute gambling. Therefore, _Article 301_ was applicable to prize competitions. Moreover, the tax imposed on prize competitions under _Section 12(A)_ was to be seen as a tax on trade or profession under Entry 60 of List II. Lastly, it argued that the prize competitions including lottery-based ones, were not against public interest. **Supreme Court : The Final Frontier** **** After struggling to get judicial clearance, state legislatures chose a different path. Using provisions under _Article 252(1)_, several Indian states passed resolutions authorizing the Union Government to enact legislation on prize competitions. It was unusual because ‘gambling and betting’ which is a subset of prize competitions, is a subject enumerated in the State List. Regardless, the Union Government immediately passed the Prize Competition Act, 1955. The law limited the total prize value to Rs.1000/- per month and the number of entries to Rs. 2000/-. It introduced licences for all prize competitions falling under the prescribed limits. It mandated strict maintenance of accounts and laid down penalties. The licences could be suspended or cancelled.[6] This law effectively crippled the operations of Chamarbaugwalla and others. This led to Chamarbaugwalla and several aggrieved others to challenge the Prize Competition Act, 1955.    Palkhivala firmly argued that the law was unconstitutional in its entirety. He based his argument on three major pillars. - The definition of prize competitions under the law was too broad. It was so unqualified that along with gambling its scope included competitions that required a substantial degree of skill. - For skill-based competitions any legal provision limiting the prize value and restricting the number of entries was not reasonable regulation, but in effect prohibition. - The law constituted a single, indivisible enactment. Since it misassessed skill-based competitions, the entire law must be struck down even if it legitimately restricted some chance-based competitions. The Union Government contended that gambling activities were not trade or commerce. Therefore, the law was intended to regulate competitions with characteristics of gambling. It further conceded that the law was indeed broad. It argued that the provisions of the law were void for skill-based games. The government argued that the valid parts applicable for gambling could be separated from invalid parts related to skill-based competitions. The government was suggesting that the law automatically would not be applicable to skill-based competitions. In its verdict, the Supreme Court declared gambling _res extra commercium._**_[7]_** This meant gambling would not be considered commerce. Since gambling would not be a lawful trading activity it would not enjoy the protection of _Article 19(1)(g)_. Contrary to Palkhivala’s plea, the Supreme Court rejected a purely textual reading of the law. While recognizing that the law was partly void, the Supreme Court embraced the doctrine of severability. The Supreme Court upheld a law which was partly valid and partly invalid, echoing the argument made by the legal representatives of the Union Government. Earlier, the doctrine of severability had only been applicable in cases where the government exceeded its subject matter competence. It had not been applied when the government violated fundamental rights. The Supreme Court opined that the principle of severability was applicable even when the partial invalidity of the Act arose from its contravention of constitutional limits in the form of fundamental rights. **Summing Up** Independent India’s legal journey has come full circle with the promulgation of the Promotion and Regulation of Online Gaming Act (2025). This law seeks to address the social and economic risks associated with the digital gaming industry. The law is admittedly rooted in the proverbial ‘good intentions’—specifically protecting vulnerable youth from predatory designs, addictive algorithms and subsequent financial ruin. This legislation marks a legal milestone in conceptualising safeguards for Indian citizens from what it considers an exacerbating public health problem. It mentions a wide range of problems such as social, economic, and national security threats. However, the law bans Online Money Games in their entirety. The current broad-brush approach is reminiscent of the Indian State’s position in 1957. It blurs the legal distinction between online money games of skill and money games of chance—a distinction upheld by the Supreme Court since 1957. The doctrine of severability applied by the Supreme Court in Chamarbaugwalla vs Union of India sets a somewhat frightening precedent. By severing bad parts of a law, rather than striking the whole thing down, the Court essentially saves poorly drafted legislation. It allows the government to be overly broad in its lawmaking. Let us imagine its implications for the online gaming industry. The degree of skill involved in a particular online game will ultimately be decided in a court of law. This will not only continue to burden the judiciary with scrutinising vague laws, but also allow the Union Government to keep introducing similarly broad laws. Persons and companies adversely affected by the law will be compelled to approach the court. The legal battles that would ensue will take several years for resolution or settlement. It would increase the costs for the companies developing online money games. This does not paint an encouraging picture for enterprises in India. This can create a ‘litigate-to-operate’ environment or an endless, exhausting hurdles-race that treats every entrepreneur as a gambler until proven otherwise in court. This is saddening given the abundant potential the industry holds in terms of growth and employment. In 2024,  the online gaming industry was a $3.7 billion ecosystem. It was projected to reach $9.1 billion by 2029.[8] The recent blanket ban has not just halted growth, it has caused flight of investments, and has triggered economic contraction in the sector.  Perhaps, Nani Palkhivala foresaw the possibility of such an unintended outcome. Therefore, he staunchly argued for treating exceedingly broad laws as single, indivisible enactments before striking them down fairly and squarely. type=content&p=9215). Needs editorial review._ --- ## [Opinion] Palkhivala’s Lost Battle Shapes the Future of Indian Online Gaming URL: https://indianliberals.in/opinions/palkhivalas-lost-battle-shapes-the-future-of-indian-online-gaming/ ### Body In 1957, the courtrooms in India witnessed a high-stakes legal battle. It was fought in two innings, first in the Bombay High Court and later in the Supreme Court of India. The Supreme Court's verdict in _R. M. D. Chamarbaugwalla vs. Union of India_ outlined core principles to determine if any economic activity constituted gambling. Even after 69 long years, the doctrines applied to interpret the Constitution inform our understanding on matters pertaining to gambling and betting. In the light of the recent ban on online real money games by the Union Government, this oft-forgotten legal dispute demands a fresh glance from anyone interested in public policy. One of the brightest advocates in independent India represented the parties involved in this legal conflict. Nani Palkhivala represented R. M. D. Chamarbaugwalla, the founder and Managing Director of R. M. D. C. (Mysore) Limited against the State of Bombay and later against the Union of India. type=content&p=9208). Needs editorial review._ --- ## [Opinion] Piloo Mody: Swatantra’s Witty Parliamentarian URL: https://indianliberals.in/opinions/piloo-mody-swatantra-witty-parliamentarian/ ### Body _An architect by training and the son of venerable Parsi entrepreneur Homi Mody, Piloo also had a long political career as a parliamentarian_“[I am a CIA Agent](https://www.outlookindia.com/magazine/story/no-aliens-under-our-beds/238178/),” read the placard on a politician in the premises of the Indian Parliament on one fine day in the 1970s. The pronouncement was a jibe at Indira Gandhi’s cynical approach towards her opponents. She would dub politicians the agents of US imperialism who sought to curtail her pro-people agenda. At the receiving end of her populist demagoguery were often the members of the Swatantra Party. And understandably so, because their eloquent advocacy of markets and liberalism had created consternation for the failed socialist government. The witty politician in the act was Piloo Mody. With a recourse to placard humour, he blunted the jingoistic politics of Indira Gandhi. An architect by training and the son of venerable Parsi entrepreneur Homi Mody, Piloo also had a long political career as a parliamentarian. However, there is a clear lack of published material on his ideas and legacy. Much of the press coverage reveals his good sense of humour which added joy to the parliamentary sessions. He was also a vocal oppositional voice during Indira Gandhi’s rule. After the imposition of [Emergency](https://timesofindia.indiatimes.com/city/mumbai/Politicians-wife-recalls-Emergency-times/articleshow/50701366.cms/) in 1975, he was one of the first politicians to be put behind bars under the provisions of the Maintenance of Internal Security Act. A close friend of Indira Gandhi though, Piloo Mody was offered conditional release which he rejected multiple times. Later in parliament, he vocally supported the bid to repeal the draconian act. Author and parliamentarian [Swapan Dasgupta](https://www.dailypioneer.com/2015/columnists/revisiting-unsung-heroes-who-defied-emergency.html/) recalls that Piloo Mody would visit the prestigious St Stephen’s College to address the student community. His witty take against the prevailing socialist narrative would draw a standing crowd. For such an unusual politician by Indian standards, it is rather tragic that Mody didn’t dabble much in writing. During the jail stint, he worked on the book titled _Democracy Means Bread and Freedom_. Called a [liberal polemic](https://www.indiatoday.in/magazine/society-the-arts/books/story/19790831-book-review-democracy-means-bread-and-freedom-by-piloo-mody-822609-2014-02-27#ssologin=1#source=magazine/) by one reviewer, the book was his attempt to describe the meaning of democracy. Piloo Mody argued for a limited role of the state in the book to strengthen democracy. For him, decentralisation was the way for deepening of Indian democracy. While he began his political career with Swatantra, the death of Rajaji and subsequent defeat of the party in 1971 led to an existential crisis. Minoo Masani put in his resignation papers accepting the responsibility for the defeat. In the last general meeting of the party in 1974, Piloo Mody decided to [merge](https://swarajyamag.com/politics/the-rise-and-fall-of-the-swatantra-party/) the party with Charan Singh’s Bhartiya Kranti Dal. The decision came under fire from the liberal intelligentsia for understandable reasons. However, as [S V Raju](https://swarajyamag.com/politics/the-rise-and-fall-of-the-swatantra-party/) admitted, the party was already in terminal decline. Raju traced the [decline of Swatantra](https://ccs.in/sites/all/books/com_books/profiles_in_courage.pdf/) to Masani’s tenure as the president. He was a more efficient organiser-ideologue than the leader. The vacuum created at the organisational level and his lack of popular appeal probably caused damage to the party’s prospects in elections. I would also argue that the lack of a strong cadre added to the decline as the star leaders either passed away or left the outfit. Swatantra was able to attract people based on leadership and agenda. It was unable to create a loyal vote base though because it lacked organisational setup. Mody later went on to join the Janata Party and served as a parliamentarian till death. In one of his last interviews, he described his plan to create a [new political party](https://www.indiatoday.in/magazine/indiascope/story/19830228-the-world-revolves-around-an-idea-piloo-mody-771282-2013-08-23#ssologin=1#source=magazine/). Nav Nirman was intended to be a political movement of honest and dedicated individuals who would take out hours from their schedule to serve the citizens at the booth level in a constituency. His utopian vision of decentralised political activism though didn’t come to fruition. The project was left midway due to his death. --- ## [Opinion] Poona Sarvajanik Sabha and Its Liberal Affiliations URL: https://indianliberals.in/opinions/poona-sarvajanik-sabha-and-its-liberal-affiliations/ ### Body _Despite the predominantly urban middle-class character of the Sabha, its work as a mediating body between the state and peasantry stemmed from the liberal conviction of the Sabha leaders who sought to operate in the domain of civil society. _The formative years of the modern, pan-Indian nationalism can be traced back to the latter half of the 19th century. The culmination of the British expansion into a centralized governance mechanism partly contributed to this pan-Indian political consciousness. Inspired by the induction of ideas of modernity in India, the newly emergent political associations in major provincial centers responded to this consolidation of colonial administration. These associations fashioned themselves as representatives of native opinion and made claims on behalf of the community. Prominent among them in the western province was the Poona Sarvajanik Sabha. With a recent past of political gravity as the Maratha center of power that underpinned Poona, the local elites were infused with a strong nationalist sentiment that was inimical to the raj. Of course, as C A Bayly argued, the Marathas demonstrated a strong sense of territoriality which could be interpreted as an indigenous root of primordial patriotism. But, also influential were the ideas of European nationalists like Mazzini and Garibaldi. Moreover, the liberal ideas of self-rule, civil society, press freedom, and a responsible executive as well came to find adherents among the English-educated elites. After a couple of short-lived experiments in associational politics, the Poona Sarvajanik Sabha was founded on 2nd April 1870. Prior to the coming of the Indian National Congress, the Sabha easily was among the leading native associations in India. The origin story of the Sabha has been a matter of historical debate. Scholars like Ravindra Kumar, R C Majumdar, and S R Tikekar have seen it as a revived form of the earlier Poona Association which was founded in 1867. The Association went defunct by the middle of 1869. On the other hand, late historian S R Mehrotra traced its origin to the Parvati Temple fund controversy. Author N C Kelkar and historian Anil Seal regarded both the defunct Association and the temple fund controversy as the impetus for the formation of the Sabha. Based on the contemporary account in the 9 May 1871 issue of the Bombay-based _Star of India_, Mehrotra made a convincing case for the latter. The Sabha was meant to work as a mediating body between the state and people by airing the grievances of people and helping them make claims on the state. The Sabha has been described as the first Indian association with a representative character which lent some credence to its claim of being a mediating body. The membership to the Sabha was contingent on the production of a _mukhtiarnama_ (power of attorney) signed by at least fifty adults. What it essentially means is that every member of the Sabha could claim to represent and speak on behalf of these signatories on public matters. S R Mehrotra showed that by June 1871, the Sabha had 140 members serving as representatives of about 17,000 people. Moreover, the internal functioning of the Sabha also reflected its democratic character. The Sabha’s constitution made the provision for an annual meeting of all the electors. The office bearers who were to be elected annually and could stand for re-election included the President, Vice-President, secretaries, and treasurers. A general committee and a managing committee formed the governing apparatus of the Sabha. The decision-making in the Sabha followed the democratic principle of majority voting. However, there also existed a provision for dissenting members to have their arguments annexed in the minutes. The democratic functioning and representative base of membership apart, the Sabha was dominated by the wealthy and intellectual elites of the local community. As Mehrotra showed on the basis of the lists of members and office bearers, the Sabha was dominated by _sardars_, landholders, businessmen, retired government servants, lawyers, and teachers. Despite the heavy influence wielded by the Hindu brahmin elites, ‘the Sabha also had a fair number of Parsi, Moslem, and Christian members.’ The Sabha played a crucial role in creating a civic consciousness and public sphere in Poona and the nearby rural areas of Deccan. Moreover, despite the local character of the Sabha in initial years, it also made strides in fomenting a pan-Indian political community by making overtures to political associations in other provinces. In its demands, the Sabha was a moderate association jostling for concessions in terms of political representation and Indianisation of administrative services. Major issues that were of concern to the Sabha included relaxation in the age limit for and simultaneous conduct of the Indian Civil Services exam, state protection for nascent Indian industries against foreign competition, promotion of the swadeshi agenda, famine relief work, liberal political reform in native states, compulsory primary education, press freedom, fiscal accountability, the extension of the limited elective franchise in municipalities, and native Indian representation in the British parliament. According to Mehrotra, under the able leadership of Mahadev Govind Ranade and Ganesh Vasudev Joshi, the Sabha emerged as the foremost political association in India with a progressive bent. The Quarterly Journal of the Sabha was launched in July 1878 to educate and shape public opinion on matters of social, economic and political interest. In line with the Indian liberal tendency to find an indigenous root of liberal political institutions, the Sabha began to organize arbitration courts in the Deccan for the private settlement of civil disputes. As was stated in Poona Observer, the Sabha here was emulating the ancient institution of the panchayat. In the years of Deccan famines in 1872, 1876-78, and 1896-97, the Sabha sent its representatives to rural areas to collect accurate information which then were sent to the government demanding adequate famine relief measures. In the 1896-97 famine, the Sabha volunteers also made the peasantry aware of their rights under the Famine Relief Code. Despite the predominantly urban middle-class character of the Sabha, its work as a mediating body between the state and peasantry stemmed from the liberal conviction of the Sabha leaders who sought to operate in the domain of civil society. The Sabha’s mediating role though was essentially contingent upon the state acceptance of its legitimacy. Hence, it shouldn’t come as a surprise that with the state derecognition of the Sabha as a representative body, it went moribund after 1897. Earlier in 1895, the extremist faction under Tilak had taken control over the Sabha. The liberals- Gopal Krishan Gokhale and Mahadev Govind Ranade – left the Sabha to form Deccan Sabha in 1896. During the famine of 1896-97, the extremist criticism of the Bombay government led the latter to pass a resolution on 17th March 1897 derecognising the Sabha as a representative body. The Anglo-Indian press was already hostile to the Sabha due to the threat posed by its representative character. Problems were also exacerbated by the death of Joshi earlier in July 1880 who was the dynamic force behind the Sabha. The rift between liberals and conservatives weakened the prospect of cooperation under the auspices of a single body. The coming of new associations like the Indian National Congress, Abhinav Bharat, Deccan Sabha, Satyashodhak Samaj, Dinabandhu Sarvajanik Sabha, and Servants of India Society in the western province made the older association riven with conflict even more irrelevant in public discourse. In the long run, though, the legacy of the Poona Sarvajanik Sabha lies in its pioneering effort at representative politics and a pan-Indian outlook that has contributed to the making of modern Indian democracy. --- ## [Opinion] C. Rajagopalachari's Thoughts on Culture URL: https://indianliberals.in/opinions/rajagopalacharis-thoughts-on-culture/ ### Body _Rajaji defines that “culture is not just character or morality. Character is the inside of a man. Culture is external rather than internal. Culture has more to do with behaviour and way of living than with character. Broadly speaking, culture is external though of course, it has much to do with character too. Because, the outside has always much to do with the inside.”_The word culture denotes many things to many countries. But undoubtedly, it is one of the most misused and abused words in every literature. The word culture is also most confused among people during the debate and discussions in the domain of politics, administrations, social reforms, renaissance, etc. Chakravarti Rajagopalachari (1878-1972) was one of the greatest scholars of twentieth-century India. He was a multifaceted personality. He was a visionary and thinker. He ventured into many fields and excelled at great depth, like a legal and constitutional expert, freedom fighter and astute politician, a scholar in Indian literature, classical liberal thinker, statesman, an able administrator, scholar in Tamil literature, prolific writer, and author of hundreds of books, etc.  He was fondly called as Rajaji or C.R. by many. He was among few scholars who applied their mind into deep musing about what is culture not just in India but also of the other nations and how it evolves around the people’s social and economic progress. In the late 1950s, Rajaji was invited by Bharatiya Vidya Bhavan, Mumbai to deliver a series of lectures on Culture. The Bhavan later published the lectures in a slim book which went several editions over the years since then.  Rajaji was a principled man and hesitated to give lectures on Culture. Though he has mastered and written quite copiously on Indian literature and knew world history, philosophy, and culture. He warned, however, that _“nothing can be expected from me on music, dance, the theatre or the silver screen”_ which were and still considered as the culture but these alone did not describe Rajaji. He spoke about the process of evolution of the culture of different nations and the case of India.   He succinctly asked _“how to utilise the traditional position to the best advantage for the general community, Shall we try to enforce the obligation on the individual in respect of the entire whole and reconcile ourselves to lapses and failures? Or Shall we utilise the natural force actually prevailing in smaller circles and add it all upto make it serve the whole?” _ According to Rajaji _“the way of living built up by groups of human beings and transmitted from one generation to another. People each with their own long history build up separate patterns of cultures. There is much that is common, but also a great deal that is particular to each nation.” _Further, _“culture is not literacy or ability to play on the veena” _said Rajaji, but_ “it has to do with general behaviour, speech, and conduct, and is different from goodness and badness of character." _Think about behaviour of political leaders in contemporary India. Also, think about behaviour of spiritual leaders across different faiths, the goodness and badness would vividly expose their character and their culture.  Unlike our confused textbooks in schools and colleges, Rajaji defines that _“culture is not just character or morality. Character is the inside of a man. Culture is external rather than internal. Culture has more to do with behaviour and way of living than with character. Broadly speaking, culture is external though of course, it has much to do with character too. Because, the outside has always much to do with the inside.”_ Most of the contemporary social ills have strong negative influences and distortions of cultural values of communities in different countries including India. Partly, the government system seems to be a vital force paving towards distortions of communities' culture which imposes restraints on an individual. _“Civilisation is not mere advance in technology and in the material aspects of life”_ warned Rajaji. _“We should remember it is an abstract noun and indicates a state of living and not things. Mainly, civilisation connotes the curbing of wildness, barbarity, and over- indulgence of passions and appetites”_ observed Rajaji.  According to Rajaji _“civilisation has two instruments to achieve the object of curbing the sensual instincts and preventing or deterring over-indulgence.”_ He explains that one instrument is the government's enforcement of the law through penal codes and other instruments, Importantly, the _“civilisation is culture which acts through family training, tradition, religious belief, literature, and education. Culture puts down over-indulgence acting as an internal force, as distinguished from penal laws which operate from outside. Where it fails, it acts, though social obloquy and in very bad cases, through social ostracism". _ As witnessed time and again in contemporary society, Rajaji warned of distortions of culture decades ago. He said that _“government and laws use physical force and compel people to restrain themselves. Culture is a subtle instrument. It acts silently. It makes people feel they are not forced to obey, but do it of their own free will and gives them a sense of pride in good behaviour.”_ Therefore, he vividly defined that the true _“culture is the habit of successful self-control; and that nothing that reduces self- control or which does not help self-control is culture”. _ Irrespective of the social and economic development status of any community in India, we could sensibly relate to their cultural values practiced over several centuries and trace back the ills found among the same people and community with which contemporary India is striving with multiple challenges especially ills against women and the girl child. Over-indulgence of pleasure by some people neither upholds the self-restraint nor keeps goodness of character both within their family and the community. This is a dangerous trend and India is now facing a furious frightening over culture.  Unlike other societies in the world, _“Indian culture is predominantly self-restraint”. And it is largely believed as noted by Rajaji that “man attains completion only when culture is added to what he has acquired for fulfilling his wants for the physical body and for satisfying his thirst for knowledge”. Thus, Rajaji observed that “so far as India is concerned, where we find simplicity in the pattern of our culture, it is not mere stunted development, but deliberate preference for simplicity and a conscious rejection of the complicate life and multiplication of wants, this being consistent with the philosophy and ethical code of our people.”  _ The fierce battles waged against the Hindu culture or any other culture has to do with the character of goodness and badness. The welfare state alone cannot solve the social illness seen against women or men of varied faiths. This also applies to societies in western countries wherein the racial issues are at the flame of constant fire with either instigation or undermining particular culture. In the war against the supremacy of culture, the people tend to _“forget the natural laws of propinquity and of emotions”_ said Rajaji.   Soon after attaining independence, the leaders at the helm of affairs had gravely ignored the strength of civilisational culture in India, which aided for the development of humanity for centuries. Rajaji spoke more often that how _"life depends on property, contracts, and security of possessions. All this was managed by culture wherever and whenever there was no law in the Austinian sense…Culture not only made life fuller; but in India, during many long periods of anarchy, it did duty for kings and officers who vacated their posts.”  _ The first forty years of independent India proved that a path chosen for development without cultural nurturing would lead to economic disasters or social chaos. Rajaji believed that the adoption of western culture and modern ideas of education have done their best to caricature and stifle the Indian culture by substitution of materialism and selfishness for narrow life.   However, Rajaji had never lost his hope of reviving Indian culture and nourishing it for generations to come. He wrote copiously on major ancient literature of India and Tamil. He firmly observed that _“from among our millions suddenly comes up someone who gives a new lease of life to religion and philosophy among our people.”_ Indian culture would aide for eternal boasting upon the progress of the peaceful social and economic development of all segments of people in years to come. Let’s not forget that our behaviour is our culture.  _The article is an excerpt from the author's original piece published [here.](https://theverandahclub.com/article/crajagopalacharis-venerable-thoughts-on-culture-90)_ --- ## [Opinion] Rajaji's Views on Nuclear Bomb URL: https://indianliberals.in/opinions/rajajis-views-on-nuclear-bomb/ ### Body _Rajaji’s September 1962 meeting with US President Kennedy. Credit: Abbie Rowe. White House Photographs. John F. Kennedy Presidential Library and Museum, Boston._As the onset of the Indian republic coincided with the postwar bipolar order of superpower rivalry, Indian politicians with an active interest in international politics intervened vigorously in the debates about global order, world government, great power politics, and the nuclear arms race. While the internationalist vision of Nehru and his advocacy of non-alignment is well-recognized and deservedly so, the same is not the case with his comrade-turned-opponent C Rajagopalachari, also known as Rajaji. In a bid to uncover the forgotten internationalist vision of Rajaji, this article would focus on his take on the nuclear arms race unfolding between the US and USSR in the initial phase of the Cold war. The nuclear threat to stability and global order apparently haunted the conservative imagination of Rajaji. As a perusal of his [columns in _Swarajya_](https://archive.org/details/satyamevajayatev032466mbp) would clearly demonstrate, he was deeply concerned about the possible radioactive fallout of nuclear testings and saw with derision the mad specter of nuclear brinkmanship between the two superpowers. A trusted lieutenant of Gandhi in days of anti-colonial struggle, he reinvented himself as an anti-nuclear weapons activist as the Cold war picked pace. His main concern lay with the dangerous radioactive fallout from nuclear testing and the threat to human survival from nuclear weapons. Commenting on the tendency of nuclear powers to evade the responsibility for radioactive danger to human health, he compared them to Big Tobacco which dubiously tried to mislead public opinion on the deleterious health implications of smoking. Writing in the May 30, 1959 issue of _Swarajya_, he also criticized ‘hired scientists’ making the case against the nuclear test ban for their misleading claims about health hazards. He argued that ‘the health of the world is the real issue but that issue is pushed out by issues of security and mistrust as between the cold war blocs.’ In the race to achieve nuclear hegemony, the Cold war superpowers were willing to ignore the danger of radioactive fallout from nuclear tests. This, for Rajaji, amounted to ‘a wholly illegitimate attack on the health of the present and future generations of the uninvolved millions, who have not yet written off their rights in favour of the nuclear pugilists.’ (_Swarajya_, 20 June 1959)  Rajaji’s criticism, though, was not merely limited to the advocates of nuclear weapons. His disagreement also extended to a section of anti-nuclear activists. As he wrote in the January 3, 1959 issue of _Swarajya_, in most countries, the campaign against nuclear tests was closely associated with the campaign for the world government. Proponents of both sought to first establish the world government and then use it to put an end to the nuclear menace. Untenable and impractical a proposal that the world government was, Rajaji saw it as a convenient escape route for activists from the more difficult task of the campaign for peaceful co-existence of nuclear powers.  In the initial phase of the Cold war, the nuclear arms race led to an innovative nuclear strategy of Mutually Assured Destruction for survival in both Washington and Moscow to deal with the Cold war adversary.  However, the logic of the fragile balance of terror strategy of superpowers to pursue peace did not exactly sound convincing to Rajaji. For instance, he saw the Truman administration’s policy of brinkmanship as a contradiction in the sense that NATO wanted to avoid war at any cost and the West dreaded actual hostilities, yet believed in walking on the brink. In the exit of the abrasive Secretary of State John Foster Dulles, Rajaji saw the opportunity for a turning point in western policy away from brinkmanship. Earlier, he had criticized the Eisenhower doctrine which according to him nullified any hope for world disarmament in the near term. In a surprising endorsement of the Indian policy of non-alignment despite a clear break with Nehru in 1959, Rajaji clearly resented ‘the recent effort of some Western statesman to frighten India about China.’ To him, it was an invitation to India to join the Cold war which warranted unhesitating rejection. In the same article, he went on to criticize the lack of co-operation from America in Indian efforts to ban nuclear weapons. In line with the dominating theme of Third Worldism, he gave a call to action to other nations to hold the US and USSR accountable for nuclear damage. The tendency of western powers to treat newly decolonized nations as the playground for the Great Power rivalry also did not find favor with him. Rajaji’s initial adherence to non-alignment and advocacy for Third World autonomy seems to suggest a greater degree of convergence with Nehruvian foreign policy vision than what is commonly believed. This is not to deny the sharp differences that existed between the two giants on the issue of China, Pakistan, Kashmir’s autonomy, and alignment with the US. A veteran practitioner of the Gandhian civil disobedience mode of resistance to power, Rajaji favored morally courageous unilateral moratoriums as the way forward for the nuclear tests ban. In this regard, Nikita Khrushchev’s March 1958 unilateral announcement of the cessation of tests vindicated his belief that ‘there is greater moral power in right action, unilaterally undertaken.’ Interestingly, Rajaji had earlier written to Khrushchev asking the same which might explain his jubilatory tone at this move towards easing the nuclear tension. In service of the cause, he also undertook an arduous tour to meet president Kennedy in 1962. The meeting saw an eloquent Rajaji making case for a unilateral nuclear test moratorium and a charmed Kenndy listening patiently. B K Nehru, the then-ambassador to the US, later [noted](https://books.google.co.in/books/about/Rajaji.html?id=JjPHeRd7_UYC&redir_esc=y) ‘... I had seldom seen a case presented with such lucidity of argument, such economy of speech, such felicity of language, such gentleness of manner and such commands of facts as Rajaji displayed that day. It was interesting to watch President Kennedy’s reactions, for he too was a great admirer of style. One could almost see his eyes open wider and wider in wonder and in admiration of the frail little man who was making this masterly presentation.’ The US tour was followed by a meeting with Pope John XIII seeking his blessing for the campaign against nuclear tests. Rajaji also asked for a Papal plea against the nuclear tests. The Pope delivered on the demand by [issuing](https://books.google.co.in/books/about/Rajaji.html?id=JjPHeRd7_UYC&redir_esc=y) an encyclical containing a plea for stopping the nuclear test explosions.  In 1963, the Partial Test Ban Treaty followed the suit. In response to Rajaji’s congratulatory letter, Kennedy [acknowledged](https://books.google.co.in/books/about/Rajaji.html?id=JjPHeRd7_UYC&redir_esc=y) the great statesman’s role: ‘Even so limited a beginning cannot help but carry forward the cause of peace for which you have so devoutly laboured.’ Rajaji’s intellectual activism for a world safe from the menace of nuclear weapons stemmed from the conservative concern for stable order and was guided by a belief in the efficacy of Gandhian civil resistance to power. Even at a frail age, his sane voice made a small impact on bipolar powers as recognized in his correspondence with Kennedy and Khrushchev. --- ## [Opinion] Rani Rashmoni Das: Reform in 19th Century Bengal URL: https://indianliberals.in/opinions/rani-rashmoni-das/ ### Body The following essay celebrates the life of Rani Rashmoni Das, an unorthodox reformer of 19th century Bengal. Das, a widow who belonged to a lower caste community, established a revered position for herself among upper caste reformers like Raja Ram Mohan Roy and Ishwar Chandra Vidyasagar.19th century Bengal witnessed conflict between English aristocracy and elite Hindu priests and scholars. The priests perceived the increasing influence of the English as a threat to traditional Hindu society, and amped up the orthodoxy of rituals. This was, however, also a time of reform. Raja Ram Mohan Roy’s efforts had led to the abolishment of _Sati_. During this time, Rani Rashmoni Das, who belonged to what was deemed the lowest Hindu caste (_Shudra_), joined the reformist struggle.  Today, Rani Rashmoni Das is credited with the founding of the Dakshineswar Kali Temple, the construction of Babughat and Nimtala Ghat, and her philanthropic contributions to the Imperial Library and Presidency University. Das’ husband, Raj Chandra Das, belonged to one of the wealthiest business families of British Calcutta. The couple spent a fair share of their family wealth and resources on public service and welfare infrastructure. They built metal roads, ghats, and potable water resources. With her husband’s support, Das was able to interact with reformers and intellectuals such as Raja Ram Mohan Roy and Ishwar Chandra Vidyasagar. Inspired by their works and beliefs, Das also became a prominent voice against child marriage, and submitted a draft Bill against polygamy to the British authorities. In widowhood, Das took charge of her late husband’s business. She devoted her life to bringing social reform for women and lower-caste communities, fighting against elite Hindu orthodoxy and the oppressive colonisers. Das has also been hailed as a champion of the fishermen community in the Hooghly river region. In the 1840s, the East India Company imposed a tax on fishing boats as a means to reduce river traffic and increase revenue. Having had no help from the upper-caste landlords, who were unwilling to jeopardise their relations with the Company, the lower-caste fishing community turned to Das. She employed her pragmatism and business acumen to make the Hooghly and its usage more inclusive. Das offered ₹10,000 to the Company to lease a 10 km stretch along the river. She barricaded her zone for the fisher community to cast their nets. As the fishers flocked to the leased area, they met with a halt in passenger and commercial traffic on the Hooghly. They approached Das regarding the same, who then took it up with the Company. The traffic lowered the lease’s profitability. Das argued that as a leaseholder she had the right to protect any income generated from her property under British law, and if the Company believed otherwise, they could take her to court. Using the rule of law to protect her private property, she managed to get the taxes repealed and won free access to the Hooghly for the fishing community. Das did not shy away from taking on powerful British aristocracy or influential Bengali entrepreneurs. One such example was Bengali entrepreneur Dwarkanath Tagore. The entrepreneur had taken multiple loans from Das’ late husband, which remained due for repayment. Das tactfully persuaded Tagore to give away two of his highly profitable estates, which she then used for inhabiting thugs and their families. This acted as a rehabilitation mechanism for the thugs, who abandoned their old ways to build fisheries and join fishing communities. For a lower-caste widow in 19th century Bengal, Das was the first of her kind to exercise such confidence and power in an orthodox, upper-caste, patriarchal and colonial society. Her most famous contribution is the Dakshineswar Kali Temple, located on the eastern banks of the Hooghly river in Kolkata. The temple is today considered one of the holiest sites of Hindu pilgrimage. Legend has it, Das dreamt of the goddess Kali as she was on her pilgrimage to Banaras. The goddess called for a temple to be made in her honour on the banks of the Hooghly, and thus that was precisely the task Das undertook. In the 1850s, it was unheard of for a lower-caste widow to build a temple. Nevertheless, she acquired 33 acres of land for the temple from a Protestant businessman, Muslim landowners, and Hindu villagers. She did, however, keep intact a factory and water tank that belonged to the original plot. Given her so-called lower caste and widowhood, the priests refused to accept the Dakshineswar Temple as a valid Hindu temple. They argued that _Shudra _women were forbidden from offering _prasad_ to the deity according to the scriptures. However, the scriptures would allow for it to be considered a valid place of worship if the land was donated to a _Brahmin _priest, who would also install the deity. Das complied and set up what is today an immensely popular site in Hindu pilgrimage. The temple also became home to one of the most recognised Hindu philosophers and mystics, Ramakrishna Paramahamsa. An icon in Bengali folklore, often hailed as the _Shudra _Queen, _Rani­_ Rashmoni Das made a place for herself among some of the most influential upper-caste men who led the social reform movements of 19th century Bengal. Das remains cemented in Bengali history through the temple, ghats, other infrastructural contributions, as well as her liberal outlook, individualism, and reformist efforts. **[](https://indianliberals.in/content/mithan-tata-lam/attachment/kavya-sharma-yearbook-picture/)** --- ## [Opinion] Rukhmabai - An Unrelenting Force Against Patriarchal Norms URL: https://indianliberals.in/opinions/rukhmabai-an-unrelenting-force-against-patriarchal-norms/ ### Body _Rukhmabai’s contributions in the areas of medicine and social justice formed the foundation of the subsequent Indian feminist movements._ Colonial India witnessed the rise of social reformers from various parts of the country. While most of us are aware of the works of the prominent male socio-religious reformers like Raja Rammohan Roy, the contributions of the female reformers, at a time when Indian society was still at odds with the concept of women’s rights and liberty, need to be highlighted. One such female social-reformer that deserves mention is Rukhmabai. Born on November 22, 1864, in Mumbai, Rukhmabai went on to become the first practising female doctor in British India. Apart from breaking the glass ceiling in the field of medicine, she became a major force against child marriage and other social evils in India.  Married off at the age of eleven, Rukhmabai continued to stay with her parents and prioritized her education. Her bold refusal to stay with her husband even after almost a decade of marriage resulted in the landmark case of the [Dadaji Bhikaji vs Rukhmabai case, 1885](https://indiankanoon.org/doc/623704/). Bhikaji, her husband, demanded the[‘restitution of conjugal rights’](https://www.indianbarassociation.org/restitution-of-conjugal-right-a-comparative-study-among-indian-personal-laws/). During this time, Rukhmabai wrote articles against infant marriage and forced widowhood under the pseudonym of 'A Hindu Lady' which were published in Times of India. In one of her widely read letters, she expressed, “The wicked practice of child marriage has destroyed the happiness of my life. It comes between me and the things I prize above all others - study and mental cultivation. Without the least fault of mine, I am doomed to seclusion; every aspiration of mine to rise above my ignorant sisters is looked down upon with suspicion and is interpreted in the most uncharitable manner.” Subsequently, [Justice Robert Hill Pinhey](https://indiankanoon.org/doc/623704/) ruled in favour of Rukhmabai and observed that since she was married off in ‘helpless infancy’, she cannot be coerced into cohabiting with Bhikaji. He expressed, “it would be a barbarous, a cruel, a revolting thing to do to compel a young lady, under those circumstances, to go to a man whom she dislikes, in order that he may cohabit with her against her will, and I am of opinion that neither the law nor the practice of our Courts either justified my malting such an order or even justifies the plaintiff in maintaining the present suit.” He also included a crucial clarification by noting, “It is a misnomer to call this a suit for the restitution of conjugal rights. When a married couple, after cohabitation separate and live apart, either of them can bring a suit against the other for the restitution of conjugal rights according to the practice in England, and according to the later practice of the Courts in India. But the present suit is not of that character.” He further highlighted that the practice of allowing suits for the restitution of conjugal rights originated in England and was transplanted from England into India; it had no foundation in Hindu law. The judgement drew flak from staunch Hindu conservatives for undermining their religious customs. Bal Gangadhar Tilak criticized Justice Pinhey for his inability to understand the spirit of Hindu laws.  While the wrangling over Hindu traditions and women’s autonomy continued, the final judgement of the retrial in 1887 compelled Rukhmabai to choose between either living with Bhikaji or facing imprisonment for six months. Her unrelenting resolve made her choose incarceration. However, the matter came to rest when Queen Victoria responded to Rukhmabai’s appeal by dissolving her marriage. Rukhmabai’s fight for justice set the ball rolling for a greater public discourse on women’s rights and liberty, resulting in but not limited to the [Age of Consent Act, 1891](https://journals.sagepub.com/doi/abs/10.1177/026272809201200202?journalCode=sara) which raised the age of consent for sexual intercourse for all girls, married or unmarried, from ten to twelve years. Her career in the field of medicine kicked off when she moved to London to pursue a degree in medicine from the University of London. Rukhmabai making her way into the medical profession caused ripples in India where women’s education and equal status to men were frowned upon and proved to be an exemplary act in England where women were discouraged from obtaining degrees. Instead of settling in London and leading a comfortable personal and professional life, she chose to return to India to serve as a medical practitioner. She recognized the perilous state of women’s healthcare in India. The lack of women medical practitioners and health awareness in the country further deterred women to seek medical help from a man at that time. Rukhmabai served as the chief medical officer for almost thirty-five years in Surat and Rajkot. During this long period of unwavering service, she continued to voice her concerns against social evils like child marriage and the prevalent practice of ‘purdah’. Some of her published works include 'Indian Child Marriage (an Appeal to the British Government)' and 'Purdah - the Need for its Abolition'. Her work and personal life stood as a bulwark against unjust social practices inherent in the Hindu Law and customs because of which she unabatedly found herself to be disdained and outcasted by Indian society, especially by Hindu nationalists like Tilak and his followers. She passed away at the age of ninety-one while battling lung cancer.  Rukhmabai’s contributions in the areas of medicine and social justice formed the foundation of the subsequent Indian feminist movements. Her refusal to stay in wedlock triggered crucial debates and public discourse around women’s autonomy within. Her unrelenting spirit to prioritize her education and express her opinions unabashedly in a deeply patriarchal nineteenth-century colonial India is laudable. **![](https://indianliberals.in/wp-content/uploads/2021/07/20210315_141544-282x300.jpg)** --- ## [Opinion] Sharad Joshi and the Crisis of Trade Unions URL: https://indianliberals.in/opinions/sharad-joshi-and-the-crisis-of-trade-unions/ ### Body _Sharad Joshi addressed his criticism against the government as well as the then labour movements in the country. According to him, trade unionism in India had taken a path far different from their predecessors in Europe.  (Image Credit : The Times of India) _There's no better or succinct way to introduce Sharad Joshi than by narrating an interesting anecdote that he shared in his book [_Khulya Vyavasthekade Khulya Manane_](https://indianliberals.in/content/khulya-vayvasthekade-khulya-manane/)_._ It gives a glimpse of his politics and personality. In 1996, the government employees of the Department of Post went on one of their routine strikes and this irked Sharad Joshi so much that he made an interesting offer to the government. He proposed that the government should let him run the department of Post. He challenged that he would not only employ just half of the existing number of workers but he would also give them only half of the current remuneration and still ensure the required level of efficiency to distribute all postcards from any major city in India to another within 24 hours. His challenge to the government may seem a bit foolhardy today. But the fact remains that at that time it took almost five days for a postal delivery to take place from one major city to another. We can not even fathom the unending delays for a letter or parcel to reach the remotest corners of the country. Sharad Joshi addressed his criticism against the government as well as the then labour movements in the country. According to him, trade unionism in India had taken a path far different from their predecessors in Europe. The trade unions in nineteenth-century Europe emerged as a response to the nascent industrialization. The workers used strikes as a potent weapon to organize themselves and have their collective voice heard. These ‘have nots’ had no other option but to use such techniques. One must not forget that unlike today the working class of that time had very little role to play in political decision making. The franchise was limited and it often excluded the poor and the illiterate. The instrument of the strike was not easy to use. The workers would lose their daily wages and it would render them vulnerable to joblessness and dire hunger. The state would look at their strikes as a law-and-order problem and the police crackdowns used to be unbearable. Even if the state spared their lives, there was no guarantee that the goons hired by the owner of the workplace would be equally generous. The workers of the nineteenth century shed their blood and even made the ultimate sacrifice for basic economic rights. Sharad Joshi acknowledged the higher ideals and causes for which these early unions fought. Having acknowledged those, he argued that much of these above-mentioned excesses were a characteristic of an early capitalism which hadn’t developed enough. Sharad Joshi ascertains that much of these evils were a function of an economy that was devoid of properly developed markets. However, when the doctrine of Socialism took roots in Europe, a simplistic and permanent dichotomy of ‘monstrous haves’ and ‘oppressed have nots’ was established. Many legislations alleviated the working class from earlier miseries. The workers got several concessions in terms of their salary, bonus, allowances and the security of a job. This overhaul occurred first in the private sector and then in the public sector. Talking about the socialistic practices in India, Sharad Joshi argued that Socialism protected the rich industrialists from an international competition that never brought the best out of Indian producers. According to Joshi, socialism could never sustain without the licensing regime. It was a license - given to the industrialists to plunder the Indian consumers. While the Indian consumer used the substandard goods, the profits of these industrialists soared. The exponential growth in profits was not hidden from the union leaders. The smartest of leaders knew the extent of profit earned by the company owners. They also knew that many of these capitalists were not sharing the details of real profits with the workers and in turn threw peanuts at the workers. The union leaders exploited such opportunities to advance their unrealistic demands for wage hikes.  The owners of industries would have only two options; first, to raise the salary twofold or threefold and second to let the workers stop working and go on strike. If workers stopped working even for a day or two the owners would lose a humongous amount of money. Therefore, the reluctant capitalists would reconcile with the workers and make as many concessions as quickly as possible. This got converted into a trend where the union leaders started competing with each other. Blackmailing the capitalist became the quickest way to establish influence on the workers and prove their credibility as  leaders. If the economic reforms exposed the Indian capitalists to outside competition, they also reduced the vulnerability of the capitalist vis-à-vis the union leaders. After seeing the approaching liberalization of the economy, the industrialists turned more or less immune to the blackmailing of these trade unions. Therefore, upon hearing the news of the textile workers in Mumbai going on strike under the leadership of Dr. Datta Samant, far from being under pressure, the textile mill owners and their managers were ecstatic and thus unwavering! Joshi argued that by the 1980s the tide had turned against the workers and in favour of the industrialists. Now the blackmailed capitalists of yesteryears weren’t entirely vulnerable as they had multiple options at their disposal to maneuver against the calls for a strike. They could take strict measures in the face of reduced productivity. These measures come in different forms – right from reducing the number of workers by firing inefficient and underperforming workers to hiring workers on a contractual basis. They could also terminate all operations if the business showed no promise or if it ran into the irreparable loss. As stringent as these measures may seem they were necessary, after all the industrialists didn’t have the option of printing more money to fulfil the whims and fancies of the workers on strike. Unfortunately, these changes remained limited to the private sector. The government servants remained no less protected than the indigenous capitalists during the days of import substitution and socialism. The government jobs became prestigious due to the unreasonable amount of protection that the government granted to its workers. The government jobs became so lucrative that even doctors and engineers who could practice privately started contemplating and considering government positions. The protection provided to the government jobs created a political economy where the caste groups started demanding reserved positions in the recruitment to be able to enjoy the spoils of the spoils system called the government bureaucracy. Thus, the political demands of castes for quotas in government jobs can be traced back to the guarantee of security and economic benefits attached to these jobs.    Sharad Joshi draws our attention to another important fact related to the wages of Indian workers. He argued that the wages of Indian workers or servants are modest as compared to the workers and servants having similar responsibilities or performing the same tasks abroad. But if we compared the two based on their productivity and efficiency, the pay scales offered to Indian counterparts were higher than what they deserved. This invited the economic crisis, and the government became bankrupt. The economic compulsions propelled the government to lay off the workers and adopt austerity measures. There was a growing realization that consumers deserved commodities and services of good quality and that license raj was becoming a hurdle.  The License-permit regime was removed but the Indian economy was faced with new problems. There was an absolute dearth of good infrastructure. India didn’t have a steady supply of electricity and water; the roads were in a bad shape and the railways were inadequate. If India had to build a robust infrastructure it required capital and technology. Therefore, India was desperately looking for foreign investment. But the basic services like the postal service, telecom services, insurance and the banking sector were so obsolete that foreign investors would think a thousand times before considering India as a potential destination to invest their capital. Joshi unequivocally asserted that when the nation was embroiled in economic distress these workers and government servants were relatively silent because they were aware that they had put the country in this situation. However, as soon as the economic threat was averted, they bounced back and demanded that the government must spend more. They wanted the bureaucracy to expand once again. They wanted a regular and uninterrupted increase in their salaries and allowances. Joshi made a very interesting and pertinent argument when he said that these workers never utilized their superior position and economic standing to organize the unorganized workers or peasants. They used the trade unions to retain old economic benefits and acquire new privileges for themselves. Such workers have no right to talk about the (rich) legacy of workers’ movements, claimed Sharad Joshi. Sharad Joshi warned against the increasing government expenditure mainly on public sector enterprises that plundered consumers and created hurdles for those who wanted to increase productivity. He believed that unless the institutions can hire the efficient and fire the inefficient, this country is destined to see doomsday.  Sharad Joshi further commented that the members of trade unions carrying out the aforesaid strike have a strong belief that calling a strike is just and constitutional. He agreed with the just nature of the individual and collective rights of workers to negotiate the terms of their work. However, he emphasized that these workers don’t have the right to dictate that their factory owners should have a monopoly to produce a particular commodity. Such a monopoly or protection can hurt the way the consumers choose to live their lives and the workers don’t have a right to benefit financially at the cost of the rights of consumers. If the workers have a right to negotiate, the consumers have a right to choose, claimed Joshi. Gone are the days when the workers enjoyed all rights and the consumer had none.   If the workers claim that they can protest by calling strikes, the industrialists should have a right to decrease, increase or even cease the operations of a factory. The workers do have rights but their rights will be called just and fair only if they recognize the freedom of consumers, businessmen and industrialists to exercise their respective rights. No wonder Sharad Joshi’s challenge fell on deaf ears. Neither the government nor the government employees took it upon themselves to prove Sharad Joshi wrong. He made it a point to draw an example of the state of affairs in the country marked by blatant heedlessness of the government by saying “…this is what happens to the real owner (the common people of India) when the servants (the government bureaucracy and the political class) become the owners.” (The author has highlighted the key arguments of Sharad Anantrao Joshi from the ninth article - _Khuli Vyavastha ani Sampa_ of his book [_Khulya Vyavasthekade Khulya Manane_](https://indianliberals.in/content/khulya-vayvasthekade-khulya-manane/).) --- ## [Opinion] Shareefa Hamid Ali: A Pioneer of Intersectional Feminism URL: https://indianliberals.in/opinions/shareefa-hamid-ali/ ### Body The following essay revisits the life and legacy of a largely neglected Indian liberal, Shareefa Hamid Ali. A prominent advocate of an intersectional approach to feminism and individual rights, Ali was the president of the All India Women's Conference and a founding member of the United Nations Commission on the Status of Women. We often come across inspiring tales of those who have made a mark in Indian history. Seldom, however, are these tales of women. Does this mean women were largely absent from Indian public spheres and hardly ever took on leadership roles? Or have they been neglected in Indian political and social history? The latter seems more plausible. A prey to such negligence have been the contributions of Shareefa Hamid Ali.  Ali was born on December 12, 1883, to a progressive Muslim family in Gujarat. Surrounded by family members whose ideologies were inherently liberal, Ali grew up with similar beliefs and ideas. Her father [Abbas J. Tyabji](https://heritagetimes.in/abbas-tyabji/), an Indian freedom fighter who also served as the Chief Justice of Baroda state (now known as Vadodara), and her mother [Ameena Tyabji](https://thewire.in/women/women-dandi-march-gandhi), among the first and most prominent Muslim women to disavow _purdah_, sowed the liberal seeds of individuality and justice in the mind of young Ali. Ali, like her mother, also explicitly disavowed the practice of _purdah _as she believed that the practice concealed a woman’s individuality and personality both literally and metaphorically.   Owing to her parents’ liberal outlook, Ali was among the few fortunate women who received an education at the time. She became well versed in Urdu, Marathi, Persian, French, and English.  Her political interests and ideas of justice and women's emancipation came to the forefront when she attended a session of the [Indian National Congress in 1907](https://inc.in/brief-history-of-congress/1905-1915). The session focused on the Swadeshi movement, which piqued Ali’s interest. It also encouraged her to work for the women of her community and the disadvantaged and marginalised sections of society.  Ali also helped improve access to health and education for the marginalised and neglected by teaching them about their right to education and healthcare. She firmly believed that to break the shackles of societal categories it was important for people to recognize their individual rights and value their personal liberty. Ali believed the same could be achieved through education. As a mother of seven daughters, two of whom had fallen prey to child marriages, Ali argued for a minimum marriageable age of 18 years for women. She organised a campaign in Sindh to support to mobilising Muslim women against child marriage. At the campaign, Ali argued that child marriage restricts women from identifying their individuality and often denies them their basic right to education. The campaign was supported by women from all sections of society. The movement was met with success and [the Sarda Act](https://wcd.nic.in/child-marriage-restraint-act-1929-19-1929) (Child Restraint Act, 1929), aimed at enforcing 21 years and 18 years as the minimum marriageable age for men and women respectively, was passed on 28 September 1929. This was the first legislation in India for the minimum age of marriage.  Ali, being a prominent leader in the Indian independence movement, was also a part of various organisations and committees that worked towards women’s emancipation. She was the president of the [All India Women’s Conference](https://web.archive.org/web/20180417173219/http://www.aiwc.org.in/pdf/History.pdf) (AIWC). The organisation aims to improve education for women and children. It also focuses on women's rights. Through this organisation, Ali gave her ideas of women's education a wider platform, not limited to India. She represented the organisation at the [Istanbul Congress of the International Alliance of Women](https://www.womenalliance.org/category/news/). By representing her country on an international platform, Ali marked her presence as a woman seeking basic rights for all women. She also brought to the forefront the presence of different kinds of feminism often separated by regions and countries.  By not limiting feminism to a one-dimensional view and understanding the role of intersectionality in feminism, Ali inspired one to look beyond one’s own social position in society and adopt a more inclusive lens.   Ali was also appointed to a women's sub-committee of the [National Planning Committee](https://www.npc.gov.np/en) in 1939. The sub-committee adopted an intersectional approach to women’s upliftment, reviewing social, economic, and legal status of Indian women. Ali represented Muslim women at the committee. She believed that to recommend measures of equal opportunity it was important to have representatives from all communities. It is only when violations of individual rights, and by extension violations against the rights of communities, are identified can a society achieve equality in all contexts.  In 1947, Ali represented India as one of the fifteen founding members the first [United Nations Commission on the Status of Women](https://www.unwomen.org/en/csw). Ali, alongside other delegates from all around the world established the guiding principles of the Commission. Needless to say, Ali brought her ideas of inclusivity while drafting the principles. The principles include the idea of raising the status of women irrespective of nationality, race, language and religion. These principles continue to guide the functioning of the Commission. Its presence can also be found in the principles of the [United Nations Universal Declaration of Human Rights](https://en.wikipedia.org/wiki/Universal_Declaration_of_Human_Rights).  An ardent advocate of individual, human and women's rights, Ali paved the way for younger generations of women to live their lives on their terms. --- ## [Opinion] Swatantra Party : A Big Tent Challenge to Congress Hegemony URL: https://indianliberals.in/opinions/swatantra-party-a-big-tent-challenge-to-congress-hegemony/ ### Body _What enabled this coalition of disparate groups was the Nehruvian Congress’ grip over political power which effectively turned India into one-party democracy and a radical left drift in economic policy_The[recent](https://theprint.in/opinion/when-maharajas-business-tycoons-and-peasant-leaders-joined-the-mundu-clad-rajaji-to-form-the-swatantra-party/33246/)[revival](https://spontaneousorder.in/why-we-need-a-swatantra-party-in-present-day-india/) of the Swatantra Party in the [public](https://theprint.in/opinion/60-years-ago-a-right-liberal-swatantra-party-had-challenged-nehrus-socialist-raj/246715/) [discourse](https://www.livemint.com/opinion/columns/opinion-the-contemporary-relevance-of-swatantra-party-s-liberal-view-1559032923329.html) has mostly been focused on its [economic](https://magazine.outlookindia.com/story/a-case-for-swatantra/291551) [liberalism](https://spontaneousorder.in/rajaji-relevance-to-todays-politics-of-the-right/) [agenda](https://twitter.com/ShashiTharoor/status/1135875167542865923?s=20). The underlying driving factor, of course, is the Indian market liberals’ search for the [Indian roots](http://indianliberals.in/) of liberalism. Also reflected in the Indian neoliberal writings on the Swatantra is a wishful tendency to see a [viable political home](https://www.youtube.com/watch?v=nvGTl2JCNFo&t=4s&ab_channel=CentreforCivilSociety) in the Swatantra party, if only it had managed to survive the Indira onslaught in the early 1970s. Of course, the Swatantra’s economic and foreign policy positions have been[vindicated](https://books.google.co.in/books?id=Kkyom-cQNecC&lpg=PA446&vq=swatantra%20party&pg=PA436#v=snippet&q=swatantra%20party&f=false/) and in that sense, the party could claim victory, if only posthumously. Also, in contrast to the earlier[dismissive attitude](https://theprint.in/opinion/when-maharajas-business-tycoons-and-peasant-leaders-joined-the-mundu-clad-rajaji-to-form-the-swatantra-party/33246/) towards the Swatantra policy as a mere pro-business agenda, recent writings have brought more nuance to the debate about [economic](https://spontaneousorder.in/not-a-rich-peoples-lobby/) and even [foreign policy](https://theprint.in/opinion/swatantra-party-had-a-lot-to-say-on-china-after-1962-if-only-nehru-had-heard-them/465578/) elements of the Swatantra vision. However, what has been absent in the current discourse about the Swatantra is its interest/identity aggregation function. It is true that under the intellectual leadership of Minoo Masani, the party espoused a classic liberal agenda. But it also operated as a broad tent secular, conservative coalition of social groups. These groups included the business class, middle peasants and proprietors, conservative ex-Congressmen, former administrators, princely rulers, free-market liberals, and cultural conservatives. What enabled this coalition of disparate groups was the Nehruvian Congress’ grip over political power which effectively turned India into one-party democracy and a radical left drift in economic policy. Minoo Masani was arduously trying to stitch together a political platform to challenge Nehruvian socialism for some time. The immediate trigger was provided by the Nagpur Congress resolution which stoked the fears of Soviet-style farm collectivization. The disparate dissidents this time hobbled together and the Swatantra was born. As Howard Erdman argued, the core inner group of the Swatantra leaders [reflected](https://archive.org/stream/swatantrapartyin00erdm/swatantrapartyin00erdm_djvu.txt) three ideological streams- self-sufficient village conservatism, cultural nationalism, and industrial capitalism. This core group consisted of Rajaji, Minoo Masani, N G Ranga, K M Munshi, and a less active Homi Mody. Rajaji was a veteran Gandhi disciple turned dissident Congressman who had earlier served as the Chief Minister of Madras and the Home Minister of India. Ranga was an Oxford-educated Andhra peasant leader with a rather proficient party-hopping tendency. Educated at the London School of Economics, Masani participated in the Indian nationalist movement and founded the Congress Socialist Party only to be disillusioned with the left politics. Munshi was a freedom fighter, leading cultural nationalist, an architect of the Indian constitution, and an entrepreneurial revivalist of Hindu civilizational heritage reflected notably in the Bharatiya Vidya Bhavan initiative. Homi Mody was a leading voice of the Bombay business community with significant experience of local self-governance in the Bombay municipality. Notables among the aristocrats included Maharani Gayatri Devi, Raja Kamakhya Narain Singh of Ramgarh who controlled a significant vote bank in the tribal Bihar, and Maharaja of Kalahandi whose Ganatantra Parishad [imitated](https://archive.org/stream/swatantrapartyin00erdm/swatantrapartyin00erdm_djvu.txt) Tory democrats. Rajaji is regarded as a leading Indian conservative figure and rightly so. In his writings, the Gandhian skepticism towards the destabilizing and degrading impact of the industrial urban landscape is often reflected. His defense of social stability against creative destruction brought by industrial capitalism made him a traditionalist seeking to unwittingly preserve the caste system. The charge was made explicitly against him when he sought to introduce a hereditary skill-based training program in Madras’ schools. However, it is my sense that as Rajaji turned to the political battleground with an anti-statist agenda, his writings reflected [a classic liberal turn](https://archive.org/stream/swatantrapartyin00erdm/swatantrapartyin00erdm_djvu.txt) that favored individualism and market forces. The anti-industrial attitude though was also shared by Ranga who was opposed to large-scale factories for its impact on artisans. With his rather unusual form of leftist populism, Ranga stood for peasant proprietorship against both feudal landlordism and state collectivization of farms. Mody, in sharp contrast, was one of the most influential voices of the business community and had been proactive in negotiations from the side of the community. His closeness to the business establishment probably led to his appointment as the party treasurer. Masani by then had adopted a classical liberal worldview with all its emphasis on individualism, free market, strong civil society, and a limited state. In terms of economic policy, he was critical of Nehru’s statism and advocated economic freedom for farmers, industrialists, and consumers. He would cite the likes of Milton Friedman and Friedrich Hayek in his writings. Moreover, in the Indian context, he was close to the economist B R Shenoy and would receive his advice on economic matters. In cultural terms, Rajaji again was a conservative sans communal leaning, rooted in the Hindu civilizational worldview. Biographer Rajmohan Gandhi [dubbed](https://books.google.co.in/books/about/Rajaji.html?id=JjPHeRd7_UYC&redir_esc=y) him ‘as unabashed a Hindu as a defender of Muslim rights’. Apart from authoring a very popular telling of the Hindu epic Mahabharata, Rajaji also talked about the spiritualization of politics. In his view of progress driven by the restoration of culture and spirituality, Rajaji came closer to Munshi. Social institutions like _jati_, joint family, and village were seen by him as the pillars of Indian society serving the function of a welfare state of sorts. Rajaji’s spiritualized Hinduism though was no bar to progress and modernization. In many of his actions and speech-act, as Erdman [noted](https://archive.org/stream/swatantrapartyin00erdm/swatantrapartyin00erdm_djvu.txt), Rajaji reflected a Burkean acceptance of gradual progress. Munshi shared Rajaji’s belief in the relevance of Hindu cultural values but the similarity also went with differences. He certainly held more strong views on territorial nationalism than Rajaji and favored a strong centralized state. It is plausible that his views stemmed from the prevalent context of communal mobilization and partition-induced violence. For the same reason, he also wanted to ban religious outfits’ involvement in politics. Like many right-wing nationalists of today, Munshi deplored ‘minorityism’ and linguistic assertions. In contrast to the ‘unity in diversity’ vision of Indian nationalism, he preferred a strong sense of Indian national identity overriding other forms of identity. Moreover, his concern for Hindu unity led him to advocate social reforms and deplore the orthodoxy which defended the caste order. In sharp contrast to Rajaji and Munshi, [Masani](https://theprint.in/opinion/no-accident-india-forgot-swatantra-leader-my-father-minoo-masani-the-beef-eating-parsi/250483/) was a secular, westernized, and modern Parsi. Reflective of Masani’s credential was the [remark](https://archive.org/stream/swatantrapartyin00erdm/swatantrapartyin00erdm_djvu.txt) by political scientist Morris-Jones that no person prominent in Indian public life today is more unambiguously modernist than Masani. The discussion above captures the ideological diversity of the core Swatantra leadership in economic and cultural domains. However, not only did the Swatantra harbor a range of ideological positions, but it also had to deal with contending interest groups across provinces. Thus, the classic liberal, free-market agenda was part of a broad secular and conservative platform. Given the formidable political opposition from a statist left, it only made sense for market liberals like Masani to ally with traditionalists and democratic aristocrats. In fact, the fight against Congress hegemony led the Swatantra to enter into a grand alliance with the Jan Sangh and others. In the current context, the Swatantra lesson on coalition building to fight the ideological and electoral hegemony of a single party should be clear for political actors in India. --- ## [Opinion] The Aborted Promise of Economic Liberalisation in Mid-1960s URL: https://indianliberals.in/opinions/the-aborted-promise-economic-liberalisation-1960s/ ### Body _Shastri’s appointment as the PM was welcomed by the business community for his non-ideological, pragmatic approach and connections with the business class. This stood in contrast to the socialist-minded Nehru who preferred to hobnob with the modern, secular intelligentsia instead of courting relations with the traditionalist businessmen operating in his mixed economy._From 1991 onwards, two characteristic features of economic liberalisation in India have been reforms during crisis and reforms by stealth. The successive political regimes after the watershed year of 1991 have resorted to the same mechanism. However, these twin features of the political economy of liberalisation were also present in the mid-1960s. Those years were marked by political uncertainty after Nehru’s death, serious food crisis, high levels of inflation, war with Pakistan, shortage of foreign exchange reserves, decline in industrial growth, rampant unemployment, and the failure of the plan to meet the targets.  Faced with such challenges in the post-Nehru era, Lal Bahadur Shastri as the prime minister sought to bring radical changes in the economic paradigm. After his sudden death in Tashkent, his successor PM Indira Gandhi initially followed a similar policy agenda. Ironically for the leader of the capitalist bloc during the Cold war, it actually took a betrayal by the US for India under Indira Gandhi to abandon the economic liberalisation agenda in favor of leftist populism. Shastri’s appointment as the PM was welcomed by the business community for his non-ideological, pragmatic approach and connections with the business class. This stood in contrast to the socialist-minded Nehru who preferred to hobnob with the modern, secular intelligentsia instead of courting relations with the traditionalist businessmen operating in his mixed economy. During his tenure as the Minister for Commerce and Industry between 1958 and 1960, many contracts for technical and foreign collaboration were approved while the number of new companies established in those nine months amounted to 1252. His track record thus showed the possibility of a wider role for the private sector now that he was the PM.  Moreover, the key members of the Shastri cabinet (T T Krishnamachari, C Subramaniam, Asoka Mehta) were devoid of an ideological commitment to socialism, sans the labor minister D Sanjivayya. All these influential ministers favored greater reliance on the market. The Railways minister and powerful regional _satrap _S K Patil had been openly critical of Nehruvian planning. L K Jha, the influential Principal Secretary to Shastri, was also very much a pro-market bureaucrat. Soon after his appointment to the post, he was involved in almost every secretary level committee on economic affairs in the Government of India. The first concrete step for liberalisation under Shastri came in the summer of 1964 when he announced in Parliament his intention to reconsider controls in general. It was followed by the removal of controls in the steel and cement sector. The privilege enjoyed by the unwieldy public sector came under question as Shastri ordered a review of major projects that had not taken off. Further, he sought to devolve decision-making power away from the Planning Commission. To this end, the National Planning Council as an advisory body on policy issues was set up in February 1965. The Council consisted of stakeholders like industrialists, economists, trade unionists, and rural workers. Also announced was the formation of a Business Advisory Council as a consultant body to the Planning Commission for formulating the industrial sector agenda in the Fourth Plan. The 1965 budget was seen as an attempt to recognize the importance of the private sector in the economy. The notable measures included relief in direct taxation, reduction in excise duty on several basic consumer items, tax relief to industries, and reduction in the rate of personal tax. In overall terms, the budget was seen as export and production oriented. Further impetus to economic liberalisation came from the outside. By this time, it was widely recognized in the West that the audacious project of democratic state-led development in the seemingly neutral India was faltering. Several studies by the World Bank and the ten-volume Bernard Bell Report made the case for a comprehensive overhaul of Indian economy by way of liberalisation. The World Bank and IMF wielded influence over Indian political leadership by way of the instrument of aid, a perennial need at that time given the failure to achieve sustained economic growth. Noticeably, Indian businessmen like G D Birla, S L Kirloskar, and M S Oberoi served as an intermediary between the donor organisations and Indian policymakers. The 1965 consultations between Indian policymakers and World Bank officials led to the understanding that India would liberalise its economy by changing exchange rate and allowing imports in return of promised aid. By the end of 1965, the decision to devalue the rupee in principle was communicated informally to the IMF. Soon after, though, Tashkent happened. In the ensuing succession battle, Indira Gandhi emerged as the next PM. In her early months in office, she continued with the economic policies and technocratic team put in place by Shastri. At a FICCI meeting in 1966, she made her intentions clear: “We have weeded out some controls and we will always be ready to eliminate those that outlive their utility.” The words were followed by action with the delicensing of eleven industries in May 1966. In late March 1966, Indira Gandhi visited the US to secure food and foreign exchange. Interestingly, the ground for her visit was prepared by G D Birla who went to Washington in the early March. Based on his extensive consultations, Birla suggested Ms Gandhi to adopt a positive approach towards liberalisation. During her visit, she agreed to devalue the currency, bring the US collaboration in fertiliser industry, and reduce state controls on industry. In return Johnson promised both food and aid in dollars. In a follow-up to her successful visit, Asoka Mehta engaged with the World Bank president George Woods and promised to replace import control with tariffs, simplify industrial licensing, and devalue the rupee. On June 6th 1966, the rupee devaluation drive was announced. The decision received flak from all corners mostly on sentimental grounds and put Indira Gandhi in a precarious political position. Even the Congress Working Committee passed a resolution denouncing the government move. More importantly, though, the Johnson administration went back on its promise and the aid did not materialise. Given the political fallout and the US betrayal, historian Medha Kudaisya has argued that Indira Gandhi decidedly shifted her economic policy away from liberalisation and also shunted out the pro-market technocrats. Nonetheless, the aborted liberalisation drive of the mid-1960s makes for a fascinating what-if account in contemporary Indian history.  ![](https://indianliberals.in/wp-content/uploads/2020/12/sanjeet.jpg) --- ## [Opinion] The Imagined Democracy in India URL: https://indianliberals.in/opinions/the-imagined-democracy-in-india/ ### Body **THE IMAGINED DEMOCRACY IN INDIA: A DEMOCRACY MINUS DISSENT?** _- _Dileep P Chandran (Fifth Prize Winner, Indian Liberals Essay Contest 2019) Democracy, in practice, is a rowdy affair. The definitional lacuna between the notions of democracy and majoritarianism is becoming less significant today. The ‘sacred’ sovereignty of states is an untouchable entity even for its own citizens. No one has the legitimate right to question majoritarian decisions taken by the “democratic state” which claim to establish a ‘good’ and ‘orderly’ society. Disagreeing with each other is a fundamental and natural human trait. Dissent, forming the essence of human nature, is quintessential for the ‘social’ survival of any human community. In simple terms, dissenting is a natural way of being in a society. Those who are in power is comprehending the notion of dissent in a way diametrically opposite to what it really is; and they are oblivious to the productive potential of the act of dissent which form and reform the human society perpetually. Once we are in power, we tend to think that every voice of disagreement as intended efforts to destabilize the apparatus of our orderly state. This prejudice goes to the extent in which the dissenting voices are silenced in the name of security and integrity of the nation. These are not abstract observations at least for India. For instance, Indira Gandhi, who was infamous for declaring national emergency in India in 1975, sometimes interpreted criticisms against herself as a move supported by external forces to stabilize her government. A society which ignores and discourages the right to dissent is doing an act of self-destruction or entering to the state of complete stagnation. Even for an individual, self-dissent is central to internal formation. One’s progress is possible only when one allows critical faculty within to act against oneself. Self-progress, in this sense, is not antithetical to self-rejection. So is the case with a human society. J S Mill in his _On Liberty _makes these arguments clear. He observes: _“If all mankind minus one were of one opinion, and only one person were of the contrary opinion, Mankind would be no more justified in silencing that one person, than he, if he had the power, would be justified in silencing mankind. … But the peculiar evil of silencing the expression of an opinion is, that it is robbing the human race; posterity as well as the existing generation; those who dissent from the opinion, still more than those who hold it. If the opinion is right, they are deprived of the opportunity of exchanging error for truth: if wrong, they lose, what is almost as great a benefit, the clearer perception and livelier impression of truth, produced by its collision with error.”_ Thus, Mill rejects the assumption of infallibility of those who are in a position to make decisions with the consent of majority. For Mill, truth is possible only by collision of adverse opinions. Formation of truth is an act of reconciliation and combining of adverse opinions.  What we can infer from Mill’s words is that dissenting opinions are not only to be tolerated but also need to be encouraged. Then the idea of “tacit consent” of Locke - which is vulnerable to authoritarianism - is inherently a bad idea. Silent agreement as the sole determiner of social and political stability is a myth which has an immanent tendency for violence. Mature society or society of minimum evil knows at least how to respect the right to dissent of their members. In that sense democracy is the best available matured form of governance or social formation which has the inherent potential to encourage and combine adverse opinions in a diverse society. It is because of the presence of dissent in it which functions to rescue from the narrowing perspective of orthodoxy and corresponding abuses of power. Representative democracy in India is an imagined idea. The people who are represented do imagine the democracy when their voices are reflected in the formal apparatuses of government. Everyone’s opinion may not necessarily constitute the final decisions of the government. But the minimum acceptable condition is that their voices are not arbitrarily depressed or rejected. The representatives are expected to act and reflect on everyone’s behalf; not that of a majority which she or he may wish to please. When affirming and dissenting voices are in conflict with each other and final decisions are stem out of this conflict, everyone’s opinion is truly valued; only in that state everyone could equally imagine a democracy. Democracy fails when this imagination fails. Parliamentary debate and discussions is one formal level in which dissenting voices can be encouraged. Effective debates and discussions are possible outside the political society as well. Civil society movements are effective in raising voices which are neglected by the state.  Media is another effective agency of dissent. But the shrinking time of parliamentary debates and shrinking spaces of informal discussions are major concerns of democracy in India. Unfortunately, responses of the state against the dissenting movements show that both the method of violence and non-violence are judged by similar rationale. Partisan attitudes of other agencies of dissent such as media are also matter of concern. In this context Supreme Court of India recently observed: “Dissent is the safety valve of democracy. If you don’t allow the safety valve, pressure cooker will burst”. Gandhi gave a fine model of practicing dissent. His model which successfully practiced against the British colonial government, especially during the Salt _satygraha_ was unique in expressing dissent against the draconian law of the state. Ruler’s perceived fear of chaotic disorder was addressed by the agents of dissents, i.e. by freedom fighters, by expressing their willingness to accept consequences of the violation of the law as well. Gandhi knew that the reaction of a colonial government to all modes of dissent is solely grounded on fear of losing power. Does this Gandhian model of dissent is replicable in a democracy? Modern legal systems do not always exist to punish crimes which are already done, but to prevent human beings from committing crimes against the ‘common interest’ of the state. Hence, fear of human potential to err is the defining character of modern legal system. Disagree with the morality imposed by the power-mongers is also an intolerable crime even in the eyes of a democratic state. Democracy and dissent are not antithetical to each other is a principle which practitioners of democratic governance sometimes forgets intentionally. Rulers in democracy also wish to rule in a “state of exception” (state of undeclared emergency). As defined by Carl Schmitt “sovereign is he who decides on the exception”. Schmitt is of the opinion that it is the sovereign who alone decides on the exception. In this normal state of things the natural potential of the ruled to decide for themselves is undermined and neglected. Minority dissents are tagged as ‘anti-national’ now a day. But in fact, what is ‘anti-national’ is not dissent, but silence. Because, silence encourages complete stagnation of society by allowing only majority decisions to flourish. A true democracy needs dissenting opinions to conflict with majority decisions which in turn can create inclusive and better decisions. Then only a democracy can be imagined by everyone equally. In that sense, what is not ‘anti-democratic’ may not become ‘anti-national’ too. Right to dissent without the fear of possible victimization makes democracy the most acceptable form of government. The question of dissent emerges only when there is diversity in society. Hence the challenge of a heterogeneous society is to legitimize dissent and make the imagination of democracy complete for everyone equally. What makes democracy without right to dissent can be anything except democracy. Without dissent, there is no democracy between adversaries and hence no politics. There arise only forced unity and unmitigated enmity that is the end of politics and democracy. As Prof. Jyotirmaya Sharma rightly observed, “there are no good people and bad people, only good ideas and bad ideas”. Dissent has the immense potential to make every bad idea into relatively well. But no superpowers can convert bad people into good. Simply because both doesn’t exist. Ph.D Scholar (UGC-JRF), School of Gandhian Thought & Development Studies, Mahatma Gandhi University, Kerala type=content&p=1578). Needs editorial review._ --- ## [Opinion] The Liberalism of Ishwar Chandra Vidyasagar URL: https://indianliberals.in/opinions/the-liberalism-of-ishwar-chandra-vidyasagar/ ### Body _An undeniable pioneer of Indian liberalism and modernity, Ishwar Chandra Vidyasagar  was a social reformer, writer, educationist, and feminist. His reformist legacy is rooted in his efforts to end child marriage and high-caste polygamy, and enable widow remarriage.    _Ishwar Chandra Vidyasagar’s many roles as an educationist, writer, social reformer, and feminist have rightly earned him the credential of being one of the early progenitors of Indian modernity. Underlying all these credentials of Vidyasagar, however, was his own brand of liberal humanism. While the modernising metropolitan West is considered to be the fertile ground for [liberal humanism](https://books.google.co.in/books?id=dWYyCwAAQBAJ&lpg=PA247&vq=liberal%20humanism&pg=PA247#v=snippet&q=liberal%20humanism&f=false) and indeed the colonizing mission brought these [newfound influences](https://www.cambridge.org/core/books/recovering-liberties/DFFAC6CCD37E1844C0425E6B8866E443) to the periphery of Indian society, Vidyasagar essentially embodied [practical humanism](https://books.google.co.in/books?id=QqtVC-IUu2QC&lpg=PT117&vq=practical%20humanism&pg=PT117#v=snippet&q=practical%20humanism&f=false). The practical humanism of Vidyasagar was shaped by both his readings and lived experience. Born a poor Brahmin, his deprived childhood was made bearable by the generosity of kind strangers. Vidyasagar fondly recalls one particular widow Raimoni in [his memoirs](https://books.google.co.in/books?id=QqtVC-IUu2QC&lpg=PT119&dq=raimoni&pg=PT119#v=onepage&q=raimoni&f=false), who treated him as her own son. Besides, despite his training as a Sanskritist, he was also exposed to the Western Enlightenment ideas of secularism, agnosticism, rationalism, and liberty. These two distinct experiences determined the career trajectory of Vidyasagar. While it may be tempting to compare Vidyasagar with the great Bengali reformer and Father of Modern India, Raja Ram Mohan Roy, author Subrata Dasgupta underlines an important distinction between the two. This was in terms of their approach towards religion. The Raja’s worldview was always theocentric, rooted in his propagation of Vedanta and close study of Christian monotheism. The Sanskritist, on the other hand, had a [manifestly secular outlook](https://books.google.co.in/books?id=QqtVC-IUu2QC&lpg=PT119&dq=raimoni&pg=PT117#v=onepage&q=manifestly%20secular%20worldview&f=false). The remarkable reformism of Vidyasagar has been aptly captured in historian [Sarmila Bose](https://www.aljazeera.com/indepth/opinion/2012/02/201225115415732564.html)’s profile of the scholar: _“He was a Bengali Brahmin Sanskrit scholar. His image is that of a quintessential pandit, traditionally dressed in dhuti-chador. This was no Anglicised “brown sahib”. Yet this Sanskrit scholar battled to end child marriage and high-caste polygamy, and to enable Hindu widows to re-marry.”_ Vidyasagar’s reformism was informed by the plight of women who were at the receiving end of discriminatory social practices. It also extended to the domain of education as he advocated the policy of mass education to modernise the Bengali society. In 1854, he wrote a memorandum to the Council of Education arguing for use of vernacular for teaching masses, in contrast to the Anglicist liberal reformers. In a sense, Vidyasagar, himself a product of the Orientalist Sanskrit College, was merely continuing the “[Anglicist v/s Orientalist](https://scroll.in/magazine/821605/thomas-macaulay-and-the-debate-over-english-education-in-india)” debate of the 1830s. The year 1854 was remarkable in this regard. Wood’s Despatch incorporated Vidyasagar’s agenda in its recommendation of three-tier education system with primary education for the masses in vernacular medium. His efforts at educational reform, however, didn’t always bear fruit as in case of opening up of [Sanskrit College](https://books.google.co.in/books?id=H3g9BAAAQBAJ&lpg=PA42&ots=hu5L4rCbGr&dq=vidyasagar%20opening%20of%20sanskrit%20college%20to%20shudras&pg=PA42#v=onepage&q=vidyasagar%20opening%20of%20sanskrit%20college%20to%20shudras&f=false) to non-Brahmin students. He succumbed to orthodoxy and could only extend admission to Kayastha students. His more successful reform measure though had an earlier pedigree reflected in [Raja Rajballav](https://www.aljazeera.com/indepth/opinion/2012/02/201225115415732564.html)’s 1757 bid to remarry his widowed daughter as well as in the campaign of [radical Derozians](https://books.google.co.in/books?id=QqtVC-IUu2QC&lpg=PT119&dq=raimoni&pg=PT127#v=onepage&q=the%20bengal%20spectator&f=false) in the 1840s. But Vidyasagar’s advocacy turned out to be more effective. His skillful employment of colloquial language, mass media, the authority of the scriptural text and perhaps credential as a Brahmin scholar of Sanskrit resonated with the Company administrators who were seeking to reform Indian society under the influence of the dominant ideology of reformist [utilitarian liberalism.](https://books.google.co.in/books?id=0oVra0ulQ3QC&lpg=PP1&dq=editions%3AKhM5P9aBwwIC&pg=PA72#v=onepage&q&f=false) Vidyasagar’s approach towards widow remarriage was visible in two pamphlets that he published in 1855. The first pamphlet turned out to be an instant bestseller in which he used _Shastras _to advocate for widow remarriage, drawing sharp criticism from the Hindu orthodoxy. The relevant passages were found in the _Parasara Samhita_ which laid out the ground for a woman to remarry in certain circumstances. For widowed women, it suggested three options: remarriage, asceticism, and sati. Vidyasagar reasoned that since sati was illegal now and asceticism was too difficult a path to follow, the only plausible option remained was widow remarriage. His reformist campaign though had to face [opposition](https://books.google.co.in/books?id=QqtVC-IUu2QC&lpg=PT119&pg=PT128#v=onepage&q&f=false) from Hindu orthodoxy. The chief antagonist, of course, was the conservative Raja Radhakanta Deb who had also sparred with Ram Mohan Roy over Sati. Vidyasagar had to face opposition on the streets of Calcutta and amongst the Bengali _bhadralok_. The backlash also came in the form of a counter-petition with 30,000 signatories. However, the Widows’ Remarriage Act was passed successfully in 1856. Vidyasagar though was not so lucky in his other endeavor to emancipate the fallen women of the Hindu society. His campaign against the _kulin_ marriage tradition hit the wall in the post-mutiny Raj ruled by Queen Victoria. Victorian paternalism, argues [Shekhar Bandhopadhyay](https://books.google.co.in/books?id=0oVra0ulQ3QC&lpg=PP1&dq=editions%3AKhM5P9aBwwIC&pg=PA73#v=onepage&q&f=false), blamed the liberal reformism for the mutiny of 1857, and distanced itself from the earlier bid to liberalise the natives in Enlightenment mode. What followed was the limited sharing of power with the [conservative elite](http://thebookreviewindia.org/reappraising-an-intellectual-legacy/) and the ugly [racial authoritarianism](https://books.google.co.in/books?id=0oVra0ulQ3QC&printsec=frontcover&dq=editions:KhM5P9aBwwIC&hl=en&sa=X&ved=0ahUKEwiL6IPb4tnjAhWbXSsKHSlyA6wQ6AEIKjAA#v=onepage&q&f=false) rooted in the racial anthropology of Victorian England. In this context, it is unsurprising to find that a native reformer’s plea saw no taker. Dejected at the conservatism of the Bengali _b__hadralok,_ which was sprinting towards the mystic guru Ramakrishna and racially charged authoritarian colonial overlords, Vidyasagar spent his last years working with the tribal population. Assessing the reformism of the ilk of Vidyasagar (Ram Mohan Roy included), historian [Ranjit Sen](https://www.jstor.org/stable/44142693) underlines two peculiar features- dependency on the Brahmins and the rich elites who determined the changing social parameters. For Sen, the oriental liberalism in this sense differed from the Western liberals. Mill, for instance, would never resort to appeal to priestly authority to make case for women’s rights. Indian reformers though had to resort to religious authority to successfully implement their liberal social agendas. Sen’s charges, I would argue, merit further clarification. The 19th century liberalism in the core and periphery of the Empire were rooted in their particular milieu. The Indian aspect of liberal tradition has been captured deftly in C A Bayly’s _Recovering Liberties_. John Stuart Mill’s liberalism was rooted in a Britain which inherited the legacy of the 16th century Reformation contributing to [secularization](http://www.hup.harvard.edu/catalog.php?isbn=9780674045637); [Glorious Revolution](https://en.wikipedia.org/wiki/History_of_liberalism) of 17th century advancing constitutionalism and “consent of the governed”; and the Industrial Revolution in the late 18th century underpinned by a [laissez-faire market](http://jenni.uchicago.edu/WJP/papers/Harris_govt_and_econ.pdf) system. The cumulative effect of these historical developments shaped the ideas of classical liberal thinkers in Britain. India, in contrast, was a highly religious society with bustling port-centric commerce and fragmented polity in the 18th century as the East India Company’s political project was taking shape. The [orientalist disposition](https://books.google.co.in/books?id=0oVra0ulQ3QC&lpg=PP1&dq=editions%3AKhM5P9aBwwIC&pg=PA67#v=onepage&q&f=false) of the Company, in fact, cemented the hold of Brahmanical authority over Hindu society. Thus, the reformers had to contend with the forces of Hindu orthodoxy and also convince the new rulers of the merits of enacting reformist legislation. It is in this context that the resort of an otherwise [avowedly secular](https://books.google.co.in/books?id=QqtVC-IUu2QC&lpg=PT11&pg=PT130#v=onepage&q&f=false) Vidyasagar to the scriptural authority begins to make sense. [Dasgupta](https://books.google.co.in/books?id=QqtVC-IUu2QC&lpg=PT11&pg=PT127#v=onepage&q&f=false) further makes it clear in his discussion of widow remarriage that the rational and humanist arguments aren’t sufficient to bring change in a fundamentalist Hindu society and thus “the argument must be supported by scriptural sources to carry any weight.” Gandhi later adopted a similar strategy in his [battle against untouchability](https://india.oup.com/product/gandhi-against-caste-9780199474295?WT.mc_id=gac) where he proclaimed to be the most _sanatani_ of all while simultaneously attacking the pernicious practice of untouchability. How does one then assess the reformism of Ishwar Chandra Vidyasagar, the Bengali Brahmin Sanskritist who was “rooted in traditional brahmin literati culture” for all his modernist ideas. I would venture out to suggest that [Vidyasagar](https://harvardmagazine.com/2014/05/vita-ishvarchandra-vidyasagar) was a [Mill-esque liberal](https://www.economist.com/open-future/2018/10/05/the-scandalous-love-affair-that-fuelled-john-stuart-mills-feminism) in his temperament towards women as the personal lived experience of both shaped their advocacy of women’s rights. However, in his reform methods, Vidyasagar approximated a Burkean approach of gradual reform and appealed to traditional authority. In his resort to rational argumentation, use of pamphlets to persuade public opinion and submission of a petition to the government, Vidyasagar emerges as a quintessential classical liberal. The poet-saint Rabindranath Tagore’s pithy tribute accurately captures the stature of Vidyasagar: “One wonders how God, in the process of producing forty million Bengalis, produced a man!” **![](https://indianliberals.in/wp-content/uploads/2021/07/Latest-Photograph-264x300.jpg)** --- ## [Opinion] The Radical Humanism of Jyotiba Phule URL: https://indianliberals.in/opinions/the-radical-humanism-of-jyotiba-phule/ ### Body _In his struggle against the caste system, Jyotiba Phule’s innovation lay in overturning the ideological foundation of what he called Brahmanical order. He sought to transcend the caste-based division to unite the lower castes and untouchables in the category of Sudras-atisudras. (Image Credit: khabar.ndtv.com)_Brought by the modernising force of British Raj, the cosmopolitan ferment of Pune in the late 18th century fostered a small Indian intelligentsia which had an immense influence on the shaping of modern India. Ramchandra Guha has [pointed out](https://newrepublic.com/article/104203/the-other-liberal-light) that “between 1875 and 1910, the city of Poona (now Pune) was in the vanguard of social reform.” The likes of Gokhale, Tilak, Chiplunkar, and Agarkar sought to reform and mobilise the native population to create a modern Indian society and polity. Jyotiba Phule, a fellow Punekar, stands out in the group though for his radicalism and advocacy of the lower castes. Historian Gail Omvedt has [argued that Phule was an anti-nationalist](https://www.outlookindia.com/magazine/story/jyotirao-phule-1827-1890/296679/) in the sense that he would prioritise the emancipation of lower castes over the project of national unity which left unaddressed the question of social justice. His idea of patriotism wasn’t limited to mere territorial unity. Instead, an educated and enlightened society constituted his swadeshi ideals. Jyotiba Phule’s radical humanism made him distinct from other nationalist leaders and was emulated by both E V Ramaswamy and Bhimrao Ambedkar. His remarkable legacy could be attested by the fact that a set of [social movements](https://www.downtoearth.org.in/blog/the-fragmented-heritage-of-jotiba-phule-30457/) in Maharashtra involving women, farmers, Dalits, and environmentalists consider Phule as their forerunner. Born in a family of gardeners that supplied flowers to the city’s elite, Jyotiba Phule had the opportunity to move between the upper caste elites and his _shudra_ community. This, argues historian Sunil Khilnani, [introduced him to a social arrangement](https://www.outlookindia.com/magazine/story/jyotirao-phule-1827-1890/296679/) where opportunity was reserved for the few and privilege was preserved by the instrument of tradition. However, it was his missionary education that enabled him to challenge the oppressive caste system perpetuated by the Brahmanical order. With the introduction of western norms and administrative structure in the colonial enclaves, Phule sensed the importance of education in enabling social mobility for the lower castes and women. With the support of his wife Savitribai Phule, he went on to open the first school for girls by an Indian in 1848. The initiative drew resistance from the orthodoxy, and his father made him leave the paternal home. Undeterred, Phule the social reformer would go on to champion the cause of widow remarriage (1860s), establish an orphanage for illicit children (1863), published the seminal text Ghulamgiri (1873), write on the exploitation of the peasantry, and establish the Satyashodhak Samaj (1873). His activism merged the plight of lower castes with the subordination of women. In his struggle against the caste system, Jyotiba Phule’s innovation lay in overturning the ideological foundation of what he called Brahmanical order. He sought to transcend the caste-based division to unite the lower castes and untouchables in the category of Sudras-atisudras. To cement his construct of a united oppressed grouping, he inverted the Brahmanical mythology in a brilliant polemic and created a mythology for the subalterns. The then-prevalent notion of Aryan Invasion theory was employed by the Brahmins to talk of an Aryan Golden Age during the Vedic period. Phule’s golden age, in contrast, predated the arrival of Aryans when the original inhabitants ruled the roost. The aborigines offered stiff resistance to the Aryan invaders which is why they were hated and pushed into the lower fold in the Brahmanical social order. Phule equated the Aryan invasion to the western colonisation drive in their destruction of native population: _“The cruelties which the European settlers practised on the American Indians on their first settlement in the new world, had certainly their parallel in India on the advent of the Aryans and their subjugations of the aborigines.”_ Like a deft sociologist, Jyotiba Phule traced the continued exercise of power by the Brahmins to the system of laws, mythology and caste system that they devised. The counter came in the form of alternate mythology in which the different incarnations of Vishnu represented different phases of Aryan assault. Bali was a just Kshatriya king and brought prosperity for his people. Kshatriyas were the native inhabitants of the land (kshetra) who resisted Aryan onslaught and hence were labelled Shudras after their defeat. Maratha ruler Shivaji was the shudra king in the tradition of Bali who defended the lower castes- Kunbis, Mali, Mahar, etc. However, it was in the 1880s-90s that the Bahujan unity project of Phule geared towards an exclusive focus on the mobilisation of the Kunbi peasantry. This shift of focus, argues historian Shekhar Bandhopadhyay, led to an assertion of Maratha identity and their Kshatriya-hood. On the flip side, it meant less emphasis on the mobilisation of Dalits. It was, though, not only in the past that Phule sought emancipation. In his search for an emancipatory vision, Phule drew from West as well, and it is here that Indian liberals could stake a claim on him. In 1848, Phule came across Thomas Paine’s “Rights of Man” which was the most widely read pamphlet for reform in Britain in the 1790s. Paine’s ideas were influential in shaping Phule as well. Paine himself belonged to the classical liberal tradition and had provided intellectual support to the American Revolution. Jyotiba Phule dedicated his pamphlet Ghulamgiri to “the good people of the United States as a token of admiration for their sublime disinterested and self-sacrificing devotion in the cause of Negro slavery”. He also expected his fellow Indians to follow the American abolitionists in their fight for a just and equal order. In Phule, thus, we have an intellectual and activist with a global vision seeking to reform his own society. --- ## [Opinion] The Resolute Abala Bose: Educationist, Suffragist, Philanthropist URL: https://indianliberals.in/opinions/the-resolute-abala-bose/ ### Body The following essay celebrates Ambala Bose's remarkable contributions as an educationist, suffragist and philanthropist. She used her education, liberal upbringing and privileges to uplift the status of marginalised sections, largely focused on changing the peripheral role women played in Indian society at the time.There is a tendency of reducing women to their relationships with men who have achieved great feats. Lady Abala Bose too has been treated no differently by history. She spent her life working on the education, emancipation, and independence of women, and it is imperative that we remember her monumental contributions. Abala Bose (1865-1951) was born to Brahmo reformer Durga Mohan Das and Brahmamoyee Debi. While her father is known in history as a renowned advocate for women’s rights, her mother too helped young widows with education and shelter, in her short lifetime. During Abala’s childhood, her family faced ostracism from the community for their advocacy towards widow remarriage.  Abala was raised in a household with a highly liberal outlook in the 19th century, and their reformist thinking is also reflected in Abala’s siblings. Her sister Sarala Roy was a distinguished educationist, while her brother Satish Ranjan Das was the Advocate-General of Bengal. Moreover, her cousins were the celebrated freedom fighter Chittaranjan Das, and former Chief Justice of India, Sudhi Ranjan Das. Fostering an environment that encourages progressive attitudes has led to the creation of this highly decorated family in Indian history. Each member has made colossal contributions to the India that we live in today. At a time when educating women was not the norm, Abala did her schooling from Bangla Maha Vidyalaya and the celebrated Bethune School. With support from her father, she decided to pursue higher education in medicine. She secured admission at Madras University on a Bengal government scholarship. Though she cleared her final examination, she had to return to Calcutta due to her poor health. **Bose as an Educationist ** After her education, Abala got married to the ‘Father of Radio Science’- Sir Jagadish Chandra Bose. With his[knighthood](https://www.shethepeople.tv/sepia-stories/heres-what-you-should-know-about-abala-bose-the-early-indian-feminist/) in 1916, Abala too gained the title of a ‘Lady’. Owing to Sir Bose’s career, Lady Bose travelled the globe. It is during her travels that she began to learn different pedagogies adopted for educating girls in different parts of the world. She then applied these collected pedagogies to India. In 1910, she was elected as the Secretary for the Brahmo Balika Shikshalaya, a girls’ school in Kolkata. Over her 26-year-long term, Abala brought in significant innovations to the curriculum. Among the most prominent was the newly-devised Montessori system. Abala also approached the eminent teacher and social activist, Sister Nivedita, to train the teachers working at the kindergarten-level. Under the latter’s guidance, the school witnessed a reform in curriculum and educational methods. The girls enrolled in the school were exposed to a unique and unprecedented mode of learning. They were also provided self-defence training and visits to places of interest.  In 1919, Abala brought together influential individuals such as Jadumati Mukherjee, Prafulla Chandra Ray, Chittaranjan Das, Sir Nilratan Sircar, and Priambada Banerjee to set up the Nari Shiksha Samiti. The _Samiti_ was set up to bring about reforms for women at a mass level. The organisation was aimed at creation of a gender-sensitive curriculum, and the expansion of women’s education. It also sought to provide financial support to widows, promote women in STEM, and increase women’s representation in educational institutions - all of which aimed at enhancing individual freedom and agency for the women. She also co-founded the Beltala Girls’ School in Bhowanipore and the Muralidhar Girls’ College. Through the course of her life, Lady Bose set up[88 primary schools and 14 adult educational institutions](https://in.style.yahoo.com/the-story-of-lady-abala-bose-an-indian-feminist-who-spent-her-life-empowering-young-girls-and-widows-030044669.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAANItsgm9ycdt3k0vjxpO3312g3niNv7N3vaSjHufLOq4P_5FsPtTCsNn8cMlvj2SGQo5hiT5MmbPmcBQQ0qRp6dvo7_lgS8ySxlJZAcC2CI4r2I2SjEq7G3TewE4EauFGDsO7N_emg0ylLG3b7j4qlR-a72WTInk37eN-fr9e_qa) in the Bengal Province of British India. **Bose as an Advocate for Widows’ Upliftment** From her family, Abala inherited a concern for widows and the hardships they face in a society that stigmatises them. With this in mind, she set up the Vidyasagar Bani Bhavan in 1925. It served as a rehabilitation centre for widows, especially from underprivileged households, who had been expelled from their families. At the centre, these widows were equipped with vocational skills. Teacher training and education was provided to the widows, who would further go on to gain employment at the primary schools established by the Nari Shiksha Samiti. Along these lines, the Abala Bose-led Nari Shakti Samiti also established Bani Bhavan and Mahila Shilpa Bhavan. These organisations skilled young unmarried girls, housewives, and widows in embroidery and sewing, so as to provide them with a channel of income. In 1935, the Women’s Industrial Cooperative Home was set up to aid financial independence. In addition to this, Abala was also appointed as the first president of the Bengal Women’s Education League. **Bose as a Suffragist ** Seen as one of the earliest Indian feminists, Abala is said to have influenced social worker Kamini Roy into the feminist movement. Roy is today seen as one of the most vocal advocates for women’s voting rights. What remains relatively unknown, however, is her classmate from Bethune, Abala, played a tremendous role in Roy’s feminist struggle.  Abala Bose’s contributions to the feminist movement extend well beyond educational reform and widow upliftment. She was also among the earliest trailblazers of the Indian suffragists’ movement. In 1917, she was part of a[delegation that met with Edwin Montagu](https://www.thebetterindia.com/246706/lady-abala-bose-indian-feminist-jagadish-chandra-bose-radio-science-women-education-widow-upliftment-british-raj-womens-suffrage-inspiration-div200/), during the negotiations of the Montagu-Chelmsford reforms. The delegation, which included suffragists such as Sarojini Naidu, Margaret Cousins, Ramabai Ranade, and Dorothy Jinarajadasa, contributed to women in India being first granted the right to vote in 1921, in Madras. In the English Magazine _Modern Review_,[Lady Abala Bose argued:](https://www.jstor.org/stable/pdf/3517870.pdf?ab_segments=0%252Fbasic_search_gsv2%252Fcontrol&refreqid=excelsior%3A29962efe66849ad61d9a491178347544) _“women should have a deeper and extended education, not because we may make better matches for our girls ... not even that the services of the daughter-in-law may be more valuable in the home of her adoption, but because woman like man is first of all a mind, and only in the second place physical and a body”_. This excerpt perfectly captures her progressive attitudes and the beliefs that drove her goal to uplift women. Her viewpoint was not to uplift women to make them more resourceful for their families or for their future generations. Instead, she primarily believed that a woman deserves a right to quality education simply because she too is first and foremost, a mind, that consists of the same human condition that makes up a man. This is an extraordinarily liberal outlook for a woman living in the early 20th century British India, and it is echoed in her work throughout her lifetime. **Bose’s Philanthropy and Final Days** Abala Bose had an empathetic understanding of the trials and tribulations most women faced in the society. Using her connections, resources, and privilege, contributed greatly towards broadening access to education. She also realised that in order to bring about significant change in society, she had to go beyond just setting up schools and educational centres. Holistic teacher training also played a major role in improving the quality of education imparted. Following Dr. Bose’s death in 1937, Abala Bose set up the Sister Nivedita Adult Education Fund, where she donated Rs.10,00,000. The fund sought to provide for first aid, literacy classes, home gardening, and other skills to women hailing from rural areas. She had also set up Sadhana Ashram, and handed it over to the Brahmo Samaj a day before her passing in 1951. Her drive to educate women went beyond the social hierarchies that are prevalent in society. As an early feminist, her work as an educationist was intersectional. One of the central aims behind her work was to eradicate casteism especially from rural areas. Additionally, she stressed on the need to bring women in purdah within the scope of her educational reforms, rather than wait for them to be able to venture out and seek an education for themselves. Moreover, in order to make the learning experience truly effective, Abala also underlined the fact that female teachers needed to replace Brahmin pandits to make the girls comfortable. Abala Bose’s aims were not just to expand the access to education, and ameliorate the quality of education. She also believed that basic education was necessary to combat the major societal evils of that time. For this, her efforts were centred around ensuring literacy, and to convey the basic elements of hygiene and sanitation- specifically for women. As an early feminist, Abala also influenced many educationists who came after her.[Saroj Nalini Dutt](https://feminisminindia.com/2019/01/04/abala-bose-pioneer/,) for instance, too emphasised on village reform. She advocated against the orthodoxy that prevented women from getting an education and having agency over their decisions. As a feminist, Abala Bose dedicated her life to championing the liberal cause, one that would put men and women on the same footing. As a philanthropist, social reformer and educationist, she paved the path for an equitable, progressive, and liberal India of the future. She channelled her resources and privileges towards the betterment of the marginalised sections of society. Though coming from a highly illustrious family and being married to a renowned scientist, Lady Abala Bose made a name for herself in history that often overlooks the efforts made by women. --- ## [Opinion] The Swatantra Way for Forging a Formidable Coalition URL: https://indianliberals.in/opinions/the-swatantra-way-for-forging-a-formidable-coalition/ ### Body India, the world’s largest democracy, recently concluded its general elections. The date of the election results 4th June 2024 coincided with the date of establishment of the Swatantra Party. The formations that emerged from this largest electoral exercise in the world have more in common with the Swatantra Party than just the date. One would correctly wonder what could be so similar between a recently concluded election and a political party that was founded sixty-five years ago. The Swatantra Party contributed immensely to Indian political and electoral thinking. Much of this invaluable treasure of ideas has remained hidden in the old Swatantra documents and souvenirs waiting for researchers, young and old, willing to explore them. This article discusses the timeless wisdom of the Swatantrites, especially for the opposition parties faced with a formidable ruling party or a ruling coalition.  ### Pragmatism of the Swatantra Party The Swatantra Party had acquired a weird reputation for being too principled and politically promiscuous at the same time. It is more important to focus on the serious accusation of promiscuity.  A contemporary observer, Howard Erdman objected to the Swatantra Party’s decision to negotiate with all non-communist political parties including the right-wing parties to avoid a multi-cornered contest against the ruling Congress in the 1962 elections. To avoid a multi-cornered contest against the powerful Congress, the Swatantra Party negotiated with Ram Rajya Parishad, Bharatiya Jana Sangh and even Hindu Mahasabha. Swatantra Party had preferred to contest elections on its programme and yet it was ready to negotiate for the electoral arrangements.  Congress at the time was an amalgamation of ideologically divergent groups and interests. The flipside of this diversity was that ideologically the Congress stood for nothing specific. The Swatantra Party believed that the alternative to the then-dominant Congress had to be fundamentally different from Congress. In a democracy, parties and alliances must offer alternatives or choices to the voters through their programmes. The Swatantra Party held that there was a need for the polarisation of political parties based on principles and well-defined programmes and not on personalities or identities. Any attempt to create a consensus among all opposition parties was futile. It would not only create confusion but also lack a well-defined policy programme. (Masani, 1966a)  Coming from this position the Swatantra Party was ready to cooperate to the maximum extent specifically with ‘like-minded’ parties. Thus, the Swatantra Party was willing to defer to other illiberal right-wing parties to maximise the chances of defeating the Congress.  Minoo Masani did not support the Swatantra-Hindu Mahasabha association in the Lok Sabha given the latter’s frank position on the communal issues. However, the other founding member of the Swatantra Party - Rajaji, was ready to _‘ally with the devil himself’_ to defeat the Congress. (Erdman, 1963-1964) According to S. V. Raju, Masani and Rajaji were two liberals who agreed on nine out of ten things. Yet on an issue as crucial as the coalition policy of the Swatantra Party, they were rarely on the same page. **The Problem with the First-Past-the-Post System** The Swatantra Party diagnosed a problem in Indian democratic institutions. India adopted the first-past-the-post electoral system. This system is patterned after the British system. India has multiple political parties. According to Minoo Masani, the first-past-the-post electoral system evolved for countries with two-party systems. When only two candidates representing the two major political parties contest, the winner invariably garners support from the majority. However, abiding by the first-past-the-post rule in a multiparty democracy meant that an elected candidate would more often be the one whose performance was only marginally better than others and not necessarily the candidate who had the support of the majority of voters (above 50% votes) from his constituency. Latin American countries with multiparty systems had started moving away from the first-past-the-post system and adopted a system of majority run-offs as early as the 1960s. This meant that if no candidate won a clear majority in the first round of voting there would be another round of voting between the top two candidates from the first round. The electoral system in India in a way compelled the Swatantra Party to enter into electoral arrangements with other democratic political parties in the opposition. The Swatantra Party preferred contesting elections under its own banner. But to put an end to the distortion of the popular will through the first-past-the-post system, it was necessary to eliminate the contest between opposition parties. The opposition parties had to resort to the ‘second ballot’ or a majority runoff among themselves in advance. (Masani, 1966b) This meant they had to gauge who from among them could win against the Indian National Congress in a given constituency. **Importance of Collective Action** Sohrab Batlivala, a Swatantrite, made an interesting observation about the 1967 state election results. Certain states in India had shown a marked preference for particular opposition parties and their respective ideologies. For instance, Tamil Nadu voted Dravida Munnetra Kazhagam to absolute power. Kerala voted for the Communists. Orissa elected a contingent of the Swatantra Party to its legislature. Madhya Pradesh and Rajasthan had shown a liking for Bharatiya Jana Sangh.[1] There were very few states and regions without a well-organised opposition to the ruling Congress Party. Batlivala argued that these states could be strategically targeted by opposition parties. (Batlivala, 1971) A party like Bharatiya Jana Sangh could make inroads into Himachal Pradesh and Jammu and Kashmir. Similarly, the Swatantra Party could extend its influence to the southern state of Andhra Pradesh. Doing this tactfully and with mutual agreement was indeed the right thing for the opposition parties willing to put an end to the dominance of Congress. The like-minded opposition parties could collectively decide to not poach on the preserves of one another and share the states as their exclusive areas of influence amongst themselves. This arrangement would result in the following scenario: - Most of the states would immediately come under a two-party system consisting of only the ruling Congress and one opposition party. - If a non-Congress opposition party succeeded in getting a majority in the state assembly without forming a coalition, it would form a compact and homogeneous ministry of its own. This was seen as a much better option than forming a United Front with disunited partners. - The non-Congress Party would not have to get into the agonising task of forging the electoral adjustments with political rivals. Only if the opposition parties had adopted this way, the people of India would have been able to judge these parties for their ability to govern well. It would have led to a real competition between the political parties to prove to the nation the intrinsic worth of their respective economic policies, programmes and ideologies. Had this plan of having one opposition party per state been carefully implemented, it would have substantially reduced the overall cost of conducting the election campaigns. Every party would have had a congenial area for itself against the ruling Congress. They would not have to worry about contesting a much larger number of legislative seats which strained their resources in uncongenial regions. Most of the opposition parties would have secured far more seats than by competing against several rivals, claimed Batlivala. Further Batlivala observed four main divisions of nearly equal strength among the non-Congress opposition. Firstly, there was a Rightist group consisting of the Swatantra Party and the Bharatiya Jana Sangh. Secondly, there was a Middle or Centrist one consisting of the Opposition Congress or the Congress (O). Thirdly, there was a Leftist camp consisting of the Communists and the Socialist groups. Lastly, there was a motley crowd of various state parties and independents representing and advocating divergent views and policies on economic and political problems facing India. Such a heterogeneous and divided opposition would never be able to join hands to form a coalition to oust the ruling Congress from the seat of power.  According to Batlivala, the Congress could be stopped in the Lok Sabha if the opposition achieved at least one of the two things: (a) The opposition parties split up into Rightist and Leftist factions of nearly equal strength; or (b) The strength of the Congress was reduced to less than thirty percent of the entire membership of both Houses. ### **Conclusion** The Indian National Congress is no longer the dominant party. Most of the parties mentioned above have changed, have been replaced or have been rendered irrelevant. The Swatantra Party ceased to exist as early as the mid-1970s. However, some of these observations and ideas produced by the Swatantrites are valid even today. The political parties of today have gradually adopted these ideas after trial and error. When the opposition parties contesting against a common dominant ruling party fish in the same pond for the electorate, they inadvertently end up helping the dominant ruling party. This was evident during the Lok Sabha elections of 2014 and 2019 when the left-of-centre political parties such as the Samajwadi Party and the Indian National Congress contested against each other in Uttar Pradesh. This led to the victories of the Bharatiya Janata Party in two consecutive elections.  In the 2024 general elections, the Samajwadi Party entered into an arrangement with the Congress. The regional party (Samajwadi Party) in this case was able to persuade the much larger national party (Congress) to contest only 17 seats in Uttar Pradesh. The Samajwadi Party decided to contest 62 out of the 80 seats in Uttar Pradesh. This led to a direct contest between the Samajwadi Party / Indian National Congress on one side and the Bharatiya Janata Party on the other in each constituency. This trend is much wider and goes beyond Uttar Pradesh.  Swatantrites observed that the Indian multiparty system could create a strong government at the centre but it was incapable of putting such a government on leash. The electoral rules adopted by India were more suitable for the two-party system. The first-past-the-post rule would not be reformed as it benefitted the political parties across the board. If this electoral rule cannot be reformed, the Indian multiparty system has to be converted into a two-party system. Therefore, the Swatantra Party sought to convert the elections into a two-party contest unofficially. Indian parties in opposition and parties in power can learn a lot from Swatantra’s prescription and avoid distortion of popular will.  **Notes:** - Other examples of the marked preference for regional parties included Akali Sikhs in Punjab, the new local Vishal Haryana Party in Haryana, the Peasants and Workers Party and Shiv Sena in Maharashtra. **References:** - Batlivala, S. H. (1971). _Alternatives to Coalitions: United Fronts and Electoral Adjustments_. Swatantra Party. - [Erdman, H. (1963-1964, Winter)](https://doi.org/10.2307/2754685). _India's Swatantra Party_. Pacific Affairs, University of British Columbia, 36(4), 394-410. - [Masani, M. R. (1966a)](https://books.google.co.in/books/about/Why_Swatantra.html?id=oSdEAQAAIAAJ&redir_esc=y). _Why Swatantra?_ Popular Prakashan. - [Masani, M. R. (1966b)](https://indianliberals.in/liberals/congress-misrule-and-the-swatantra-alternative.pdf). The Socialist Pattern. In _Congress Misrule and the Swatantra Alternative_ (pp. 1-40). Manaktalas, Bombay. type=content&p=8552). Needs editorial review._ --- ## [Opinion] The Moderate Liberalism of “Ferocious Mehta” URL: https://indianliberals.in/opinions/the-moderate-liberalism-of-ferocious-mehta/ ### Body _A prominent voice of the liberal strand of the nationalist struggle was that of Sir Pherozeshah Mehta. A lawyer by education and among the founders of INC, Mehta advocated for local self-governance. His work towards the same in Bombay earned him the title of the "Father of the Municipal Government in Bombay."   _The enduring role of the Bombay-based moderate liberals in demanding political freedom and self-governance from the British Raj has been overshadowed by the subsequent turns in the Indian nationalist storytelling. Both the radicalism of the extremists and revolutionaries as well as the mass subaltern politics of Mahatma Gandhi have found a viable political constituency in the Republic of India. However, the shrinking of the liberal space and a clear absence of substantial liberal constituency have left the moderate nationalists heirless, so to speak. While Dadabhai Naoroji was the patron saint of the liberal nationalism, the Bombay-based, lawyer-dominated liberal intelligentsia comprised of a remarkable set of politicians. Sir Pherozeshah Mehta was part of this grouping, which went on to found Indian National Congress later in 1885. Born in a Parsi merchant family, the bid for upward mobility brought Mehta to London to pursue a degree in law. It was during this Britain stint (1865-68) that his liberalism was forged. In London, he actively engaged with the activities of the East India Association, an initiative of Dadabhai Naoroji to further Indian interests in Britain. Naoroji’s place in London was the hub of Indian liberal activists and it is here that Mehta made valuable connections. His friendship with the likes of Badruddin Taiyabji and Wyomesh Chandra Banerjee would later go on to shape the history of Indian nationalism. Besides, he was also influenced by Gladstonian liberalism, in vogue in Britain at the time. Mehta’s career as a politician would see him putting into practice his liberal conviction. In the annals of Indian nationalism, Mehta is largely seen as one of the founders of Indian National Congress and a leader of the moderate faction. But I would argue that his involvement with the Bombay self-governance project merits further recognition. It is also here that his political liberalism appears more prominently. Mehta has been dubbed as the “Father of the Municipal Government in Bombay”, both for his involvement in and advocacy for local self-governance. In response to the 1871 municipal reform agitation in Bombay, the Bombay Municipal Act of 1872 was passed which also incorporated Mehta’s proposal of a representative body. According to his biographer Homi Modi, Mehta’s proposals revealed “a political sagacity and breadth of outlook, which for a young man of twenty-six may well be considered astonishing…” [Mehta’s involvement](http://www.ampltd.co.uk/digital_guides/indian_newspaper_reports_parts_1_to_4/Publishers-Note-Part-6.aspx) with the Bombay city administration would continue in his role as municipal commissioner (1873), and chairman (1884-85 and 1905). In his role as a member of both Bombay and Imperial Legislative Council, he championed the interests of native Indians with a liberal stance on issues. He went on to oppose the Arms Act and Vernacular Press Act while lent support to Ilbert Bill. He also opposed Lord Curzon’s policy of bringing universities under the control of the government. In arguing for the introduction of elective principles in local bodies and decentralisation of authority, he resorted to John Stuart Mill and Herbert Spencer - _“We know that the highest authorities on the subject- Herbert Spencer and John Stuart Mill- have pointed out that you must have external or internal check on the working of these municipal bodies.”_ The [Ilbert Bill controversy](https://books.google.co.in/books?id=0oVra0ulQ3QC&lpg=PA213&vq=ilbert%20bill&pg=PA214#v=snippet&q=ilbert%20bill&f=false) (1883) turned out to be the last straw for Indian nationalists as they soon went on to form the Indian National Congress. One of the charges laid out by its detractors in early years was the limited reach of Congress, best captured in Lord Dufferin’s “microscopic minority” phrase. As one of the founding fathers of INC, it fell upon Mehta to defend the organization. In the 1890 Congress annual session, he argued that for all their differences and shortcomings, “the microscopic minority can far better and far more intuitively represent the needs and aspirations of their own countrymen than still more microscopic minority of the omniscient district officers.” Mehta’s advocacy of local self-governance and moderation in politics though had to face challenges from the political extremism of Tilak which demanded “_poorna swaraj_”. And, then the descent of Gandhi on national scene swept aside the “_plea-prayer-petition_” mode of political liberalism in favour of a non-violent mass movement. **![](https://indianliberals.in/wp-content/uploads/2021/07/Latest-Photograph-264x300.jpg)** --- ## [Opinion] The Unwavering Feminism of Tarabai Shinde URL: https://indianliberals.in/opinions/the-unwavering-feminism-of-tarabai-shinde/ ### Body _Tarabai Shinde deserves to be known as one of the early feminists of India and a figure who espoused the cause of liberalism through her commitment to equal rights for women.  _The nineteenth century India was characterized by increasing demands of social reforms in the country. Along with their male contemporaries, women like Ramabai Ranade and Savitribai Phule questioned patriarchal norms of the society. One such advocate of women empowerment and gender equality was Tarabai Shinde.  Little is known about the background of Tarabai Shinde. Born in the town of Buldana in Maharashtra, her family was a part of the socially elite Maratha community. Though she did not receive formal education, she learnt to read and write Marathi, some English and Sanskrit at home under the guidance of her father. She was an avid reader of the newspapers and kept herself abreast about the happenings in the society. Her father Bapuji Hari Shinde worked as the Head Clerk at the office of Deputy Commissioner for Revenues. He was associated with Mahatma Phule’s Satyasahodhak Samaj though the level of participation and involvement is unknown. Like the traditions of the times, she was married at a young age but her husband went to live in her household (_gharjavai_) which is unusual in a patriarchal society. She believed that a woman had the same [value](https://www.thebetterindia.com/135270/me-too-19th-century-feminist-tarabai-shinde/) with or without a child and chose to remain childless in her marriage. She rallied against the patriarchal [code](https://www.the-criterion.com/V8/n3/IN22.pdf) of honour and morals when the then controversial ‘Vijaylakshmi case’ came up in 1881. [Vijaylakshmi](https://feminisminindia.com/2017/03/01/remembering-tarabai-shinde-essay/), a young pregnant widow, killed her unborn child in Surat. She was awarded a death penalty which was later changed to life imprisonment. The orthodox newspaper [Pune Vaibhav](https://m.dailyhunt.in/news/india/english/women+s+web+english-epaper-wmnwbe/tarabai+shinde+the+feminist+pioneer+of+the+1800s+who+s+still+relevant+to+us+today-newsid-n150133314) published a series of articles criticising Vijaylakshmi as the child symbolised the sexual relation she had, despite being a widow. The articles went on insulting women in general for their ‘loose morals’. As a response to these conservative articles, Tarabai Shinde penned her magnum opus- _Stri Purush Tulana_ (A comparison between men and women) in Marathi. It is a scathing critique of gender inequality and questions the institutional gender inequality entrenched in the social institutions of that time. The booklet resurfaced only after it was [republished](https://englishsummary.com/stri-purush-tulana-analysis/#gsc.tab=0) by S.G. Malshe in 1975.  It sheds light on the shortcomings of society with reference to the rights of women. She not only put forth her views and arguments but also criticised narrow literature works like _Stricharita_, _Manorama_ and _Muktamala_ for defining gender roles, giving it a moral sanction and generalization. In a society that looks down upon prostitutes, she humanised them and understood their plight. She argued vehemently against child marriages, polygamy, and forced marriages. She advocated agency of women when it was unheard of.  _Stri-Purush Tulana_, which is addressed to all the men, raises many questions about the unjust practices prevalent in the society that leads to subjugation of women. Considering that it was provoked due to injustice handed to a widow, she underlined the issues of widows in great detail. At the very start, Tarabai highlighted the plight of widows and questioned the authority of men over women and the concept of ‘pativrata’ i.e. undoubted obedience towards husband. At a time when widows were treated unfairly, she spoke about widow marriage and their conditions.  The societal norms mandated that a woman would be deprived of her ornaments, hair and beauty and led into an isolated life after the death of her husband. The loss of husband would translate into her loss of the already limited rights she previously enjoyed. She would be considered as an ill omen and not be invited for the social functions. However, in case of the wife’s death, the husband was free to marry and live his life. Tarabai Shinde was aghast at this unequal treatment and challenged the men to undertake the same path as women. She traced this sense of superiority of men to patriarchy and money. While making a case for widow marriage, she argued that the death of a king without a male heir caused instability in the kingdom. If women were allowed to remarry, the woman would not lose her rights and the kingdom would be stable.  She also promoted the cause of education and firmly believed that education would help the girls to face the circumstances around them. The interaction of educated women would make their minds aware, critical, and averse to superstitions. The training would give them courage to make decisions and chart their own life- a change not everyone was comfortable with. She criticised the editors of Pune Vaibhav for being enemies of women and opposing change. At a time where even talking about widow’s marriage was considered as a taboo, she openly spoke about the sexual desires of the widows and wives ignored by their husbands. In case of adultery, she blamed the husbands for not keeping their wives happy. However, she argued for equal punishment for the man and woman for committing adultery instead of only penalizing women.  She critically evaluated the Shashtras and pointed out how the interpretations have been misconstrued to suit the patriarchal narrative. By citing instances from mythology, she illustrated the importance of a woman’s role in a man’s life as a mother and wife. Tarabai Shinde demonstrated the way in which women were blamed, in mythology and real life, for the mistakes committed by men.  She denounced the menfolk for doing lip service to social reforms in the country. She observed: _“You hold these great meetings, you turn up at them in your fancy shawls and embroidered turbans, you go through a whole ton of supari nuts, cartloads of betel leaves,  you use up a tank full of rosewater, then come home. That’s it. That’s all you do”_.  [Published](https://thewire.in/books/a-lesson-in-tolerance-for-smriti-irani-from-19th-century-india) in 1882 by Shri Shivaji Press and priced at nine annas, the booklet generated great turbulence. The orthodox community was visibly shaken by the publication of the booklet . The local [newspapers](https://feminisminindia.com/2017/03/01/remembering-tarabai-shinde-essay/) ran targeted articles mocking her work. She was [condemned](https://www.longdom.org/open-access/a-case-study-of-tarabai-shinde-in-maharashtra-a-research-hypothesis-2167-0358-1000200.pdf) by social reformers like Krushnarao Bhalekar and Narayanrao Lokhande who were colleagues of Jyotiba Phule. It is speculated that the widespread criticism forced her to disappear from the public eye after the publication of her only work. In the public realm, only Jyotiba Phule voiced his support for Tarabai Shinde and her thoughts. He authored an elaborate defence of her work in the second issue of its magazine, [Satsar](https://www.shethepeople.tv/home-top-video/stri-purush-tulna-tarabai-shinde-first-feminist-text-india/). Addressing her as _chiranjivini_, he recommended the booklet to his colleagues for understanding the charges she put forth about the ill-treatment meted out to women and to respond suitably. He lauded her courageous and original attempt in articulating her views.  Unfortunately, some of the criticisms she made during her times hold true even today. Her work was more of a reaction to the circumstances around her in a scathing manner. However, she argued rationally by calling attention to the problematic trends in society that have been accepted as status quo. Her thoughts on other issues are unknown as _Stri Purush Tulana_ remained the sole work  authored by her. In the context of the times she lived in, the thoughts she articulated were way ahead of her times. The noted historian Ramchandra Guha [opines](https://www.amazon.in/Makers-Modern-India-Ramachandra-Guha-ebook/dp/B06XY58CWZ) that her writing deserves serious attention as it remains one of the most powerful pieces of social criticism ever written by an Indian. In a time where women received little or no education, she used her education to raise her voice to criticise the harsh gender realities. Reeta Kumari [observes](https://www.longdom.org/open-access/a-case-study-of-tarabai-shinde-in-maharashtra-a-research-hypothesis-2167-0358-1000200.pdf)that throughout her arguments, she demanded gender equality and refused to accept the superiority of men. Tarabai Shinde deserves to be known as one of the early feminists of India and a figure who espoused the cause of liberty through her commitment to equal rights for women.   **![](https://indianliberals.in/wp-content/uploads/2021/05/IMG_20200220_220742_725-e1622060117627-284x300.jpg)** --- ## [Opinion] Why Remember Sharad Joshi? URL: https://indianliberals.in/opinions/why-remember-sharad-joshi/ ### Body _Sharad Anantrao Joshi, founder of the Shetkari Sanghatana, was a champion of individual freedom; a liberal in the truest sense of the word. He envisioned an India where the state was not placed on a pedestal, one where individual freedoms would guarantee a dignified life.     _When Sharad Joshi came to India in the 70s, there was a huge boom of tragedy leaders in our country. Based on the points of mutual disputes and differences that have been rooted in the society for centuries, the leaders, who run their shops of prestige on them, used to pretend social service by sitting on the chests of farmers, Dalits and the underprivileged. All these leaders had one thing in common, their mood was feudal and they were going to invalidate and unroot the contribution of modern western countries in our lives. Their imagery of social service was like continuing the life-long treatment of the ailing patient but never treating. Their methods of the social reforms were cosmetic in nature, which on the face seemed very compassionate and giving, but internally could not be treated anywhere. As a result, the multiple so-called attempts to reform the society and the economy created an army of such reforming leaders in this country who had almost no knowledge and were not even remotely related to economics and modern science. By representing and leading their respective castes and religious crowds, these leaders had become the biggest enemies of India’s modernity and liberation. It almost seemed like that it was a well-strategized, well thought of formula to never demand freedom, instead, table a long list of demands before the government. Sharad Joshi was one of the first leaders to acknowledge the importance of freedom and dignity, and, that, there is no greater value than leading a free and dignified life. He firmly believed that governments were a necessary evil and thus he simply sought independence from the government and nothing else. He advocated that governments should not be made a matter of virtuous faith by repeatedly placing long demand letters in front of them. This puts the government on a pedestal and allows it to use its brutal power to infringe the dignity and freedom of a common man. Sharad Joshi had also initiated freedom of the producers by demanding relaxation and in fact complete elimination of the existing laws instead of seeking stringent laws. Laws which do not promote stronger punishments for the enemy, but promote values of freedom for them. After meeting Sharad Joshi, my entire view and way of respecting politicians had changed. Because of him, I started understanding leaders, not from their words or speeches, but the impact their thoughts on society. Today, I do not respect the leaders that build their imagery and prestige on the suffering of the others. I see them as the problem itself and not the problem-solvers or solution. These people are selfish and egoistic, they want people to remain unhappy so that they can be immortal in their remembrance. Had I not met Sharad Joshi, I would have been idolizing the Robinhood type heroes in Indian films, the leftist writers and environment activists But meeting Sharad Joshi on 25 December 1994 created a parameter within me on developing a binary of like and dislike about the leaders, which never there before. The real tribute to Sharad Joshi would not be to table a long list of demands to the government. It would rather be to make people’s lives more productive, dignified and artistic by posing in front of them, the ideas, thoughts and human innovations that have taken place in every corner of the world. As much as he was interested in the art and culture of the past, he was equally fascinated by the knowledge of the West. While he could recite and explain a poem written in Sanskrit, he was equally interested in French. He was a cosmopolitan, pioneered global greats of the era, who was beyond the boundaries of religion, caste, language, and nation. And that’s why he used to pick a funny bone by minimizing these identities as “degeneration of birth” only. He hoped from the youth to not fall prey to any misunderstanding of their past and present. He hoped from the youth to travel to the skies at the risk of failing, to go beyond the horizon but always keep finding ways of liberating their nation and the whole of humanity. For him, a vendor selling food on the streets was a much more valuable element than an unemployed youth seeking employment by sitting on his degrees. If he would have, he would probably go to the food selling vendor’s shop and get a photo of him. Sharad Joshi ridiculed and pointed out to the leaders who advanced the idea a casteless society, by sticking to their own caste identities. He wanted to inflict conceptualize and promote a world where nobody should ever require birth and caste certificates. At whatever age, whichever place one stand, one should get the right to the best expression. He aspired to reject every loop that binds human birth at any limit. I consider myself lucky that I got a chance to meet and interact with him, I got the fortune to hear his golden words from his mouth. I offer my heartfelt tribute to the great soul on this memorial day today. _(This piece has been sourced, translated and reproduced here with permission from the Facebook wall of Mr Dinesh Sharma.)_ --- ## [Opinion] V S Srinivasa Sastri: Diplomat, Politician, Liberal URL: https://indianliberals.in/opinions/v-s-srinivasa-sastri/ ### Body Sastri’s liberalism was evident in both his role as a politician and diplomat. He asserted the demand for equal rights and partnership under the Raj, not subordination: “We want political power; let there be no mistake about it. We want the right to rule ourselves.”Mahatma Gandhi is among that rare category of politicians which defy the conventional ideological label of liberal, left, conservative, or anarchist. His long career of engagement with ideas drew inspiration from scores of writings. Yet, Indian liberals, in some measure, could claim pedigree over Gandhi. His political activism in India was preceded by a year-long tour of the country, undertaken on the advice of Gopal Krishna Gokhale, the Poona-based leading liberal patriot. As is widely known, Gandhi accepted Gokhale as his political guru. The less known, however, is the another liberal politician who Gandhi called his elder brother, V S Srinivasa Sastri. He was a Tamilian school teacher-turned-editor, who joined the liberal fold under the influence of a single pamphlet written by Gokhale. A confidential note on the preamble and rules of Gokhale’s Servants of India Society, the pamphlet made Sastri leave his job to join the society. Around a decade later Gandhi would also seek to join the society only to withdraw the membership because of differences in thought. Sastri remained firmly in the liberal fold though, assisting Gokhale in his role as the Secretary of Indian National Congress and the member of Indian Legislative Council. He would highlight Gokhale’s patriotism in an article published in 1905 in the following words: “_If we look for the noblest type of patriotism, that which impels to sacrifice of self and takes joy therein, what name can be placed beside his, save only that of Dadabhai [Naoroji]?_” After Gokhale passed away in 1915, Sastri was made the President of the society which he would lead till his death in 1946. Sastri’s liberalism was evident in both his role as a politician and diplomat. He was one of the architects of the Congress-League scheme of 1916. The Lucknow Pact of 1916 was an Indian bid to prove their fitness for devising a constitutional mechanism. Sastri asserted the demand for equal rights and partnership under the raj, not subordination: “_We want political power; let there be no mistake about it. We want the right to rule ourselves._” Initially, though he only pushed for dominion status in internal matters for India. It was only later in 1922 that he would come to advocate self-determination. His moderate approach of changing stance in light of prevailing condition was also visible in the shift from responsive to the responsible model of governance. Not dissimilar to the [bitter experience](https://www.cambridge.org/core/books/recovering-liberties/DFFAC6CCD37E1844C0425E6B8866E443) of other Indian liberals, Sastri also experienced [ugly racism](https://medium.com/afro-asian-visions/a-diplomat-a-speech-and-a-bomb-907e67077e5e), both within India and outside it. He came to advocate racial equality and argued for British dominions to accept citizenship right of Indians residing in their territories. In the domestic politics, he advocated democratization of princely states, saw separate electorate for Muslims as fait accompli, moved a resolution against the draconian Rowlatt Act, and demanded equal rights for women in all domains. Sastri’s opposition to Civil Disobedience and Non-cooperation sit uncomfortably with the mainstream nationalist movement and as such merits further explanation. In fact, Congress disapproval of the Montagu reforms and 1919 elections in favour of non-violent agitation led to the liberal break with the Congress. Though an admirer of Gandhi, Sastri’s principled opposition to non-cooperation was based on his faith in the rule of law. He had presciently argued that in breaking laws, Indian nationalism was setting the wrong precedent for future citizens. The sorry state of disregard for law today could, in some measure, be ascribed to the legitimacy accorded to [extra-constitutional protests](http://acorn.nationalinterest.in/2011/08/14/faq-why-is-anna-hazare-wrong-and-lok-pal-a-bad-idea/) by the nationalist movement. Sastri also had to face accusations of being a Raj sympathizer in his opposition to Congress. His response went that in appealing to the liberal faction of British law-makers, he was no different from the non-cooperation _satyagrahis_ seeking to influence British opinion. Besides, Sastri’s principled liberal stance of constitutional advancement conditioned him to seek cooperation with the Raj to earn its goodwill. I would here argue for the need to recognize the validity of differing Indian bids for dignity and political freedom instead of pitting one against the other. Such an approach would accurately capture the heterogeneous nature of Indian nationalism. Sastri’s illustrious career went beyond domestic politics to include his stint as a roving diplomat of colonial India. Vineet Thakur, historian and upcoming biographer of Sastri, sums up his approach to international relations in terms of [liberal internationalism](https://nias.knaw.nl/fellow/thakur-vineet/). Sastri the diplomat made a successful case for granting of citizenship rights to the Indians living in British dominions in the 1921 Imperial Conference. At the Geneva conference of the League of Nations, he outlined his vision for global citizenship and made case for disarmament. The Geneva stint was soon followed by a visit to Washington for the Naval Treaty Conference. Glowing coverage followed in the pages of the New York Times outlining his liberal credo: "_He [Sastri] has spoken for India twice, and those who predicted that he would present a purely official view, still more a purely British official view, have been badly mistaken. That he wants Indian self-government he does not conceal, nor that he takes the Indian national culture and character and Hindu religion seriously. But when he talks as a sane man who knows that everything cannot be done in a day and that it is much easier to tear down something fairly good than to build something a little better."_ His status as the “_de facto global ambassador of India_” would further be cemented by his visit to South Africa to make case for the Indian cause, egged on by both Gandhi and the Viceroy. His powerful rhetorical skill based on his mastery over English earned him accolades as well as helped further his cause. In the South African town of Klerksdorp, his public event was disrupted by [bombing](https://medium.com/afro-asian-visions/a-diplomat-a-speech-and-a-bomb-907e67077e5e) which fortunately didn’t cause much damage. Back at home, he would make case for Indian participation in international affairs by arguing that the arrangements made at the high seats of power had implications for India as well. It would thus serve India well to represent itself in the conferences and share responsibilities. Historians like Bipan Chandra have argued that under the visionary statesmanship of Nehru, Indian Republic punched above its weight in international affairs in initial years. I would argue that in V S Srinivasa Sastri, India has prehistory of outsized involvement in international affairs, dating back to its colonial moment. --- ## [Opinion] Women and Liberalism : The Life of Ramabai Ranade URL: https://indianliberals.in/opinions/women-and-liberalism-life-of-ramabai-ranade/ ### Body _ A distinctively liberal feature of Ramabai's work is how all women, despite their social or economic background, were accepted in the Seva Sadan._Ramabai Ranade was married at the age of 11, and according to the conventions of the era she lived in, her life should have been over with widowhood. However, Ramabai was not one to let society dictate. One of the most important social reformers of pre-independence India, Ramabai Ranade’s contributions have led to massive strides in the sphere of women empowerment. At a time when women were not to be seen in public often, and heard even less, Ranade’s life was nothing less than revolutionary. Ramabai Ranade was born on 25 January 1863 in the Kurlekar family, in Maharashtra. Albeit living in an era when women’s education was not considered important, Ramabai was able to educate herself with the active support and encouragement of her husband, M G Ranade. Justice Ranade was a scholar, social reformer, and a founding member of the Indian National Congress. His ideals inspired Ramabai Ranade and she devoted herself to getting educated, despite the criticisms of several members of her family. M G Ranade taught her several subjects such as mathematics, geography and languages, himself. Ramabai was also greatly inspired by Pandita Ramabai, with whom she took English classes from a christian missionary during the former’s stay at the Ranade residence.  It could be said that Ramabai’s most important legacy lies in the field of women empowerment. Ramabai’s foray into activism began with her involvement with the Prarthana Samaj, which first exposed her to the ideas of social reform and its liberal undertones. Prarthana Samaj was a movement for social reform and conducted meetings and lectures that addressed several important issues, including that of women empowerment. Ramabai Ranade attended these meetings, and would pass on these ideas to other women during social gatherings. She utilised social spaces provided by ritual gatherings like _kirtan_ to organise educational activities like essay writing and lectures that would further promote the reformist values among women.  Ramabai gradually developed her oratory skills and became a well-known public speaker. Her maiden speech was as the Chief Guest at Nasik High School, and since then she spoke in public on countless occasions, delivering simple and eloquent speeches in both English and Marathi. She also began to actively take on leadership roles, and established a branch of Arya Mahila Samaj in Bombay. She then went on to found the Hindu Ladies Social and Literary Club in the city. This organisation sought to train women in languages, handwork like knitting and tailoring, public speaking and other basic skills. Gradually she became increasingly involved in social service, which she’d initially engaged in due to M G Ranade’s influence.  After Justice Ranade’s death, Ramabai went into isolation for a year. But after this mourning period, she renewed her efforts as a reformer and an activist. She organised the first Bharat Mahila Parishad in Bombay, and became a regular visitor to the women’s wing of the Central Prison. She also visited the boys in the reformatory school and patients in local hospitals. During the famine of 1913, she organised relief in Gujarat and Kathiawar. She chaired the first session of India Women Conference, which was held in Bombay in 1904. She fought for the cause of the indentured labourers in Fiji and Kenya. She organized aid for female pilgrims visiting the shrine of Sant Dnyaneshwar. Ramabai also worked extensively to dismantle the system of child marriage. Until the very end of her life, she continued working to help a range of marginalised and oppressed groups, although the majority of her efforts were directed towards the cause of women empowerment.  Ramabai Ranade’s most liberal characteristic, it can be argued, was the manner in which she _practiced_ her precepts. Her most significant contribution is considered to be the establishment of Seva Sadan, to the extent whereby evoking Ramabai’s name is today synonymous to referring to the Seva Sadan. Seva Sadan was initially an idea that B M Malbari and Dayaram Gidumal put forth, with the aim of providing women with the training to become nurses. Ramabai joined the Bombay branch, and later established a Pune Seva Sadan.  She worked very closely with this organisation and by the time she passed away, the Pune branch alone was training over a thousand women. This was a significant feat to have achieved during a time when even literacy among women was not considered important or even accepted in many circles. Many conservative men and women, in fact, actively opposed such organisations. Despite the prevalence of such prejudices, under Ramabai’s guidance the organisation expanded to include a Women’s Training College, three hostels and several new departments that focused not only on basic education, but also vocational and professional training for women. The Seva Sadan in Bombay acted as a home for distressed women, including widows. A distinctively liberal feature of her work is how all women, despite their social or economic background, were accepted in the Seva Sadan. In her times, even reforms and upliftment activities were largely biased towards middle and upper class women. Eight other branches of Seva Sadan opened up across Maharashtra subsequently. The Seva Sadan encouraged economic independence among women through training women in activities like pickle making and basket weaving, in addition to nursing and other healthcare roles. Ramabai personally worked extensively to break prejudices surrounding working women, like in the case of the taboo surrounding female nurses touching male patients. Ramabai ingeniously combined several ‘traditional’ notions of womanhood such as the service involved in a woman’s role as wives and mothers, with more modern ideals of economic independence to enable women to transcend social barriers that prevented their entry to the public sphere of work.  Her role as a social activist in her later years focused on two main causes. One, extending primary education to all girls. Two, voting rights for women. Her work in these two aspects can be said to have been a major factor in liberalising Indian society as a whole, and in dismantling much of the oppressive structures of the patriarchy. Her almost single-minded focus on extending compulsory primary education to all girls can be credited with at least making a dent in the popular societal opposition to girls’ education. She established a girls’ school in Pune called the Poona Native Girls High School, which is incidentally the oldest Indian run girls’ high school in the country. Today the school is known as Huzurpaga.  On the political and civic rights front, Ramabai was at the forefront of organising the Women’s Suffrage Movement in Bombay in 1921-22. This was during the early stage of the suffrage movement in India, which can be said to have begun only as late as 1917 when the Women’s Indian Association was founded in Madras. The Association, under the leadership of Sarojini Naidu, raised the demand for including women’s suffrage in the new Franchise Bill that was being discussed by the Government of India at the time. Ramabai, along with other influential women, sent telegrams of support to the then Secretary of State, Edwin Montagu. Ramabai was, therefore, one of the earliest persons in the country to raise the demand for equal political rights for women.  Ramabai Ranade’s life and work can be read in her own words in ‘Himself: The Autobiography of a Hindu Lady’, written in Marathi and published in 1910. Like most things Ramabai had done in her life, she was the first woman to write an autobiography in the Marathi language. She details her experiences as a married woman and as a social reformer in this work. Ramabai was, ultimately, one of the most important liberal figures in Indian history whose work has brought about immense change in the conditions of Indian women. What makes her work even more inspiring is the fact that she did not have any precedence to draw upon; she was one of the first women in India to ask for political rights, support girls’ education and work for women’s economic independence. She was essentially one of the pioneers of the Indian women’s movement. Although she claimed to be nothing more than a shadow of her husband, whose own ideals and work initially inspired her to enter social service and activism, it is clear that her work has undeniably altered the social fabric of an erstwhile oppressive society. She grew up in a world where educating women would be laughed upon as a waste of resources, and she left the world after carving out space for women to stand up for themselves.  The idea of Seva Sadans, or the many women empowerment groups which Ramabai helped steer, becomes important when ascertaining Ramabai’s liberal credentials. She realised the role of civil society, community and entrepreneurship as the way forward for women and throughout her life engaged in harnessing the potential of women by making them economically independent as well as giving them a sense of individual dignity. ![](https://indianliberals.in/wp-content/uploads/2021/01/IMG_20210106_084858_Bokeh__01-scaled-e1610530101294-285x300.jpg) --- ## [Opinion] Women and Liberalism : The Life of Begum Rokeya URL: https://indianliberals.in/opinions/women-and-liberalism-the-life-of-begum-rokeya/ ### Body _Her life was itself her message and although she never focussed on defining herself within an ideological spectrum, most of her life struggles were indeed integral aspects of the liberal tradition._19th century Bengal is known for its renaissance movements that witnessed the awakening of intellectual currents in religious, social, cultural, economic, and artistic spheres. Begum Rokeya was one of the most prominent figures of the Bengali renaissance as she is considered the mother of Bengali Muslim women awakening. Rokeya Sakhawat Hossain also known as Begum Rokeya, was a litterateur, educationist, social reformer and feminist who worked tirelessly for the emancipation of Muslim women. Her book 'Sultana's Dream' is a rare feminist literature that imagined a utopia of an advanced scientifically developed society where gender roles were reversed; men were confined and women ruled the world. Such an extreme thought experiment was reflective of the condition of women in the era in which she lived.  Begum Rokeya was born on 9 December 1880 in a well-to-do aristocratic family in Pairaband, Rangpur in undivided Bengal. She grew up in an orthodox family, her father an orthodox Muslim only allowed women to learn Arabic and insisted that women maintain purdah. But she had always been keen on studying and learning new things, and with the assistance of her brother, she and her sister Karimunnesa got to learn to read and write Bangla and English. Karimunnessa was an erudite poet but she got married at the age of 15 and this led to the end of her academic exercise and what might have otherwise been a career in poetry. Perhaps during this time, Rokeya understood education as an important tool for the liberation of women. At the age of 16, her father arranged her marriage to a 40-year-old widower named Khan Bahadur Syed Sakhawat Hossain. He was a man of progressive ideas as he helped and made all the arrangements for her studies; with his help, Rokeya published her writings in Indian periodicals of that time. Her happiness didn't last long as her husband suffered from acute diabetes. It led to his loss of eyesight and eventually to his death. But this trauma couldn't become an impediment for her to work as an educationist and advocate for the cause of women. After five months of his demise, with the help of money that her husband left behind, she started a school called Sakhawat Girls Memorial High School in Bhagalpur. But due to a family feud with her stepdaughter and her husband, she was forced to close it down. Then, Rokeya moved to Calcutta where she re-opened the Sakhawat Memorial Girls High School. During those times, society considered it unnecessary to educate women. It was a daunting task for Rokeya to bring girls to the school who were mostly confined in the four walls of their homes. Muslim women coming from privileged backgrounds were the only ones who were allowed for religious studies by their instructors and that too in seclusion. Due to conservative influence on society, women of the time lacked self-awareness especially concerning their basic rights to be treated equally and with dignity. Rokeya understood this and her philosophy of education was mainly based on her personal experiences as she had experienced the condition of women in the Bengali Muslim community which suffered from the age-old traditions. She was passionate in her approach towards equal access to education to women and firmly believed that education would lead to the awakening of women regarding their rights. When Rokeya started visiting the houses to convince parents to send their girls to school, she faced severe criticism from orthodox and religious Muslims. During those times, it was considered a heretical activity, she understood that awakening was not possible without triumphing over religious orthodoxy. Rokeya had profound faith in Islam and she believed that it is the men who misrepresented the teachings of Islam in a way to manipulate and subjugate women, and as a practising muslim she considered it her duty to correct this wrong.  In 1916 she founded the Islamic women's organization named Anjuman-e-Khawateen-e-Islam. Through this organization, she offered financial and educational assistance to downtrodden Muslim women and raised the issue of Muslim women's rights to the general public. In this regard it is pertinent to mention her speech at "Bengal Women Educational Conference" : "I have been crying for the lowliest creature in India for the last twenty years. Do you know who that lowliest creature in India is? It is the Indian women...There are also people who feel for animals, so we see animal’s rights groups everywhere. If a dog is hit by a car, we hear an outcry in the Anglo-Indian media. But there is not a single soul in the whole of the subcontinent to mourn for incarcerated women like us." Rokeya perceived that men with their physical superiority have made women subservient to them and banished them from the economic zone. She identifies two main conditions for the subjugation of women: physical weakness and economic dependence. In her various works like "Istrijatir Abanati", "Delicia Hatta" and "Padmarag" she advocated for the economic independence of women. Rokeya reasoned that without economic independence it was impossible to imagine women's liberation. She wanted women to be educated, self-reliant, become good citizens, and contribute to society. In one of her writings, Rokeya gave a clarion call to the women to rise and take their rights wherein she stated that "I know that it is not easy to rise at the beginning. I know too that society will create a huge fuss about it. I know that Indian Muslims will be inclined to "slaughter‟ us (i.e., condemn us to capital punishment) and Hindus will drag us to the funeral pyre or a fire of eternal affliction. (I also know that our sisters have no intention to rise.) But rise we must for the sake of society." In her various writings, she draws the comparison of both Muslim and Hindu women as to how they have been both subjugated by the patriarchy. In one of her books 'Nari Puja,' she depicts vividly the nature in which the purdah system has plagued and subjugated the women from both ( Hindu and Muslim) religious communities for centuries and how men have treated them like animals and sometimes worse than animals. She asserted the rights of women and wanted men and women to stand side by side in both material and spiritual spheres of life. Begum Rokeya died on December 9, 1932. Her life was itself her message and although she never focussed on defining herself within an ideological spectrum, most of her life struggles were indeed integral aspects of the liberal tradition. Her commitment to uphold equal rights for men and women, her unwavering resolve to focus on economic independence of women and her use of civil society action as a tool for change, are all liberal values. The lives of women like Begum Rokeya need to be explored more in order to understand the socio-historical context in which liberal values shaped the progress of Indian society. Their focus towards establishing equality as well as dignity of the individual regardless of caste, creed, gender or any other similar consideration, are important lessons to recall and to emulate in light of the liberal struggle for freedom and opportunity. --- ## [Opinion] The Zealous Azizun Nisa URL: https://indianliberals.in/opinions/zealous-azizun-nisa/ ### Body The following essay revisits the liberal and patriotic contributions of Azizun Nisa, a forgotten warrior of the 1857 Revolt. It also raises important questions concerning rigid colonial ideas of morality that were historically alien to Indian minds.The First War of Independence in 1857 gave India a host of freedom fighters that would be revered for generations to come. Rani Lakshmi Bai, Tantia Tope, Nana Saheb Peshwa II and Begum Hazrat Mahal have been memorialized in Indian history for their contributions. Among the many names that do not end up getting the same kind of recognition for their contributions is Azizun Nisa - a courtesan who fought in the Siege of Cawnpore.  Azizun Nisa, also known as Azizun Bai, was born in Lucknow and spent her life in Kanpur. Professionally a courtesan of Lurkee Mahil, she donned the role of a warrior and a strategist in the Revolt of 1857. Kanpur was one of the primary sites of the 1857 conflict, where Tantia Tope and Nana Saheb were amassing support to fight the British. Azizun Nisa’s efforts aided the 2nd cavalry unit of the rebel soldiers from Kanpur. It is also reported that rebel soldiers and Indian freedom fighters often used Azizun Nisa’s residence as their venue to hold clandestine meetings and sessions among themselves. Azizun Nisa also[contributed to the struggle](https://ranasafvi.com/the-forgotten-women-of-1857-2/) by collecting and distributing arms, ammunition and other weaponry to these soldiers. In addition to this, she is also believed to have trained women for combat. During the Siege of Cawnpore in the First War of Independence, Azizun Nisa established her headquarters, where she stayed put with the soldiers. These headquarters were located in one of the gun batteries that were deployed to fire at the British soldiers, and when the need arose, she too armed herself with pistols and made her way into the battlefield. As one of the key conspirators,[it is believed that she was taken into custody by General Havelock](https://www.knocksense.com/kanpur/azizun-bai-courtesan-warrior-kanpur), who made multiple attempts at forcing her to confess. However, Azizun Nisa’s unyielding strength and courage ensured that she did not confess for forgiveness from the colonial powers. Her selfless and brave attitude chose martyrdom for her country over confessions. Despite her contributions in one of the most important moments in Indian history, Azizun Nisa remains forgotten. The lack of recognition and awareness regarding Azizun Nisa’s contributions is in tandem with the fate of the others who belong to marginalized sections. Courtesans have for centuries been seen as non-combatants. Their involvement and contributions in the movements forming the struggle for India’s independence have been erased. For example, Azizun Nisa’s role as a strategist and her engagements have been overlooked in the mainstream narrative. Involvement of these marginalized powers were so strong that even after the colonial rulers quelled the 1857 uprising, their properties were confiscated. In addition to this, resources were also deployed to malign the reputation of Azizun Nisa and other courtesans. Narratives were pushed to the forefront that pit the puritan ‘good and moral life’ against the ‘immoral and vulgar prostitute’. Azizun Nisa was referred to as a _tawaif_, which unlike today, could be used only by privileged women with intensive training in the classical arts, music, and dances. Additionally, these[_tawaifs_ were also seen as connoisseurs](https://feminisminindia.com/2021/09/29/azizun-nisa-the-courtesan-strategist-who-played-a-crucial-role-in-the-revolt-of-1857-indianwomeninhistory/) of literary works and performing arts, while also practicing poetry in Persian and Urdu. In the current day and age, _tawaifs _have been reduced to immorality. The British powers faced threats in the form of courtesans who held powerful, respectable, and well-connected positions in the royal courts. Narratives surrounding courtesans were built up in such a way that stripped them of an idea of respect, and continually reiterating that courtesans do not deserve it. This benefited the colonial powers as it kept these women at bay, and added obstacles in courtesans’ support for rebellion movements along the lines of the 1857 war. This ultimately caused the cultural, political, social, and economic decimation of courtesans’ power and contributions in the royal court. Women such as Rani Lakshmi Bai and Begum Hazrat Mahal have been at the forefront in discussions about the First War of Independence. At first instance, it could seem to future generations as one of the initial instances of interventions by women in the Indian independence movement. However, though history puts some women under spotlight, those such as Azizun Nisa have been made invisible due to ideas regarding morality and respect, as perpetuated by the British themselves. It is essential that we view all women’s contributions to the freedom struggle, as it would help us better gauge the society from the mid-19th century. We have come over 150 years from the Revolt of 1857, and it is high time that all women involved get their due credit- regardless of their profession or any other social marker. --- # Interviews ## [Interview] A.D. Shroff - Champion of Free Enterprise URL: https://indianliberals.in/primary-works/a-d-shroff-champion-of-free-enterprise/ ### Body # A.D. Shroff - Champion of Free Enterprise Source: https://www.youtube.com/watch?v=J5PVOC-V5jU Duration: 110.6s (empty transcript) _Cleaned: skipped (transcript empty or too short for speaker identification)._ --- ## [Interview] An Auxiliary for Historians: The Contribution of Older Austrians URL: https://indianliberals.in/primary-works/an-auxiliary-for-historians-the-contribution-of-older-austrians/ ### Body # An Auxiliary for Historians: The Contribution of Older Austrians Source: https://www.youtube.com/watch?v=R5dXcOx98LU Duration: 2769.6s **Sudha Shenoy** (00:04): Thank you, Mr. Chairman. I hope you will excuse my sitting down. I hope you can hear me, even if you can't — all that you see is a sort of bit of hair sticking up or something. Right. Now, I said I'd be talking about an auxiliary for historians, the contribution of the older Austrians. Auxiliary is something which is auxiliary to a primary activity. The primary activity for which the older Austrians, that is to say, Menger, Mises and Hayek, were developing their work. That primary activity was history, history. The study of history because that is the actions of human beings, the actual actions of human beings, concrete actions of human beings in a particular historical context, the actions which actually create that context. And in developing this, the as we'll see, the older Austrians, in fact, came at the end of a long line of previous people who also worked in the same field, starting with Edward Coke back in the early seventeenth century and then continuing on from there. Now before I actually get into all that, I thought what I might do is illustrate the points practically. Because after all, we are looking at the, quote, the real world, historical world. I thought, therefore, that I might begin by simply looking at a couple of example, a couple of fairly simple, relatively simple historical facts, and then working through to see exactly what lies under the surface to show how that auxiliary works with the material to be studied to bring out particular points which otherwise would simply not be accessible. Okay. I'm starting out there with family in California, two adults, two children, and one invisible cat, who, of course, actually owns the family. And that's their weekly shopping. Okay. What's immediately visible, of course, is that there's very large quantities of the stuff. They're all industrial consumer goods, manufactured consumer goods. There's a large range, large variety, and superior quality. Okay. We now go to the other extreme, And we now have a family in Mali in West Africa. Now if you want to find Mali on the map, you first find the Sahara Desert, and then you move south until you hit Timbuktu. Because Timbuktu is, in fact, in Mali, surrounding it is Mali. Okay. Now, if we have a look at the, you know, what's, again, what's immediately visible, if we just have a look. First of all, there seems to be rather a lot of them. There's, in fact, four adults, young adults and about nine children. The second thing, of course, is that there's very much less weekly shopping or whatever it is, is very much less than for the Californian family. Also, you'll notice that much of it consists of basically raw materials. As you'll see, it consists of things like millet, rice, dried onions, a few tomatoes, etcetera. Okay. So, what I'll now do is put up a list which shows us a comparative list which allows us to see the difference between the two. Okay. As I said, the cat refused to be in the photograph, but the humans were there. Okay. Now, you go through that list, it's something which is familiar to all of us. We're all living in a developed country in the late twentieth century. And when I showed this list to my husband in Australia, he said, well, what we buy isn't all that different from what those Californians buy. Now, we have a look now with the family in Mali. We've got there 30 kilos of corn, 20 kilos of rice, 20 kilos of millet, oil, onions, etcetera. In other words, to repeat raw materials which have to be worked up further. And I thought I might add there, as simply an account of what they actually eat, the breakfast which consists of millet porridge with tamarind juice or, alternatively, rice porridge with sour milk. And lunch, which consists of that stew of tomatoes, onion, salt, and if they have money, they actually buy some dried fish. And supper, again, millet and corn or griddle cakes, okra soup, etcetera. Okay. Now what I'll do is start asking the next question. What are the production processes that go into the production of what the family in Mali consume. And we have a look there. Sorry. Okay. The I'll have a look at the millet porridge with tamarind juice. Now I don't know if any of us have actually eaten millet or products made with millet. But believe you me, it is not easy to eat. It's very heavy. It's not tasty, but just feel good. Okay. Now the final bit, as I said, millet porridge with tamarind juice. So what are the production processes, the capital structure which produces this? Well, you've got your cooking vessels. You've got your pounded millet, and we'll come to that in a minute. We've got a low earthen platform on the floor, which has a u shaped hole in it. And that's where you have your fire, and you've got twigs and sticks and so on, which you send the kids out to collect. And you've got well water and a hand fan of reeds because you have to keep fanning the thing to keep it going. It's going to boil your your porridge for you. The pounded millet, hand pounded several times daily. You've got a staff, a wooden staff about that big, and you've got a mortar, a wooden mortar about that high. And you put in your handfuls of millet, and you take your pestle your staff and you go thud, thud, thud until the wretched thing gets pounded. And then you do that several times daily. So as soon as you've had breakfast, you start pounding the millet for lunch, and so it goes. Okay. And I hope the ladies here are beginning to feel contented with their life. Okay. And there again, it's a household which has to do it. No one else is going to do it. Your soaked tamarind. Now a tamarind is a fruit which is sort of flat and sort of u shaped almost. And you have a large tree which is rather spready, and you get the fruit by throwing stones at the tree. Or alternatively, you climb it or you get a pole and try and shake the the fruit down. And that, again, someone has to do. Again, you send the kids out to do it. Well water, which you use, you have to go out and get it. And, again, you carry the urn on your head and you store it. And in other parts of the underdeveloped world where there's more water than in Mali, if you have if you're an upper income person in the village, you actually have the well inside the house. So that you all have to do is drop the bucket out the kitchen window and you get your your water. You don't have to go all the way down to the bottom of the street to the well to get the water. Okay. You then have to thresh the millet, which you pound every day. And the threshed millet is stored in sacks in the house. If you had a look at if you remember the photograph, everything was in sacks. And that's because you buy the thing at harvest and store it in the house and keep it until the next harvest. Okay. The fresh millet has to be picked over and winnowed, and I've done this sort of thing. And believe me, it is labor intensive. You have winnowing baskets, which are made of flat of reeds. You winnow the thing by shaking it up and down. Again, you have household labor. You've got harvested millet. You've got a threshing floor. You've got donkeys to tread the crop. I forgot to say that most many households in Mali also have a working donkey. This particular one doesn't, but other families do. Okay. Now, that household is autarkic. It produces its own millet. You have a small piece of land for each wife, and the land is obtained from the lineage head. Hubby belongs to a particular lineage. The head of that lineage gives him a bit of land for his wife, each wife, as he gets one. And then she grows the food for the household. Okay. So you've got seeds and you have pointed sticks in which you dig and put in the seeds. And then you have hoes. And throughout the season, you've got to put in your own labor, the household labor, sickles for harvesting. And you've got baskets and sacks and, of course, your donkey to transport the millet. Now, you only go outside the household now when you start getting your utensils, pottery utensils, pounding staffs, baskets, fans, etcetera. You've got a craftsman with hand tools, and you've got the things that come in, the wooden, the clay, and the reeds, and so forth. The pottery is sometimes fired out in the open. You have branches which you put on top of the pottery. You fire the branches, and then you get some sort of pottery. Alternatively, you've got a furnace which is much more expensive, and then you put in coal and coal or charcoal or whatever. And again, it's a craftsman's household who puts in the labor. Again, donkeys and sacks and so forth. Now, you've got a woodcutter then and a donkey with a rope for transporting the wood. The clay has to be dug out. It's transported in baskets again on poor donkey's back. And finally, we've got a blacksmith who makes all these tools, and he has hand tools and a shed and a furnace and iron bars and bellows. He does have an apprentice and, of course, again, your donkey for transport. Okay. Now I'll put that picture back up again because now we see something which we didn't see before. What we're looking at here is a production unit. It is not the same as that Californian family. The Californian family just consumes, if you want. This is a production unit. That's why you have all these people there. They're all helping in the production process. And I should add that the two ladies in the picture on either side of the of the gentleman, confided to the photographer that they hoped Hubby would get a third wife. The reason for this is they wanted some additional labor to help in the household production. Okay. So, when you've got autarkic production, you enlarge the household. That's the only way you're going to get the additional output. Alright. Now some further observations if we have a look at the oops. Where are we? Yep. Here we go. If you have a look at that capital structure, if you want, the one which produces your millet porridge every morning for breakfast. First point to note is that it's a relatively short production process. You're thinking in terms of one harvest to the next, one season to the next. It doesn't take very long to establish that production structure, and it doesn't take very long to turn out whatever you're producing. What you're producing in the end, the final goods that you get out, small in quantity, poor in quality, uncertain because you don't know what the weather is going to be like and you're completely dependent on the weather, and very limited in range. Okay. Again, if we have a look at that production structure there, we notice that we have extremely limited division of labor, extremely limited division of labor, a small group involved, small number of people, and we have, therefore, limited small groups, limited amount of interdependence. The bulk of the labor goes into the autarkic segment of the production process. Now, a broader point, which emerges when you have a look at the historical record. This is the way things have always been. This is the norm for humanity, the normal way that things are for all human beings, the way it's been since time began, the way it is for the bulk of the population of this planet. Short production processes, considerable autarky, and all that goes with it. The other point which also comes out is that what you have is a status based legal system. Chief major production asset is the land. And you get the land or get access to the land because of your status as a member of a particular lineage. And then you're allocated the land by the head of that lineage. There is where does the status legal system stop? And that stops when you start exchanging goods. You've got to pay the craftsman, and therefore, the exchange there is a different set of rules, a different kind of rule. That is your ends-independent commercial rule. It's a commercial exchange, whereas, of course, within the household, it's autarkic exchange. And you have very much well, it's central planning, basically. Each wife manages what she's going to produce. Okay. So you have, therefore, largely what you might call status based legal rules and a certain number of independent instrumental legal rules for the limited amount of exchange that you've got with the craftsman and so on and so forth. Okay. Now, you remember that Californian family complete with not not complete with cat and so on. We'll now use the example of one single item, which was there, which we all remember in in the photograph, and that is the bread. Your investments now, first order investments, you've got foodstuffs in the pantry or the larder or kitchen cupboards or whatever. Bread and other foodstuffs are there ready to go. You get that from the supermarket, the supermarket building fixtures and fittings, trolleys, etcetera, labor power and transport, kinds of labor that you'd need for producing whatever you produce in that stage of production. Okay. You then go on to get to the bakeries, which take in flour of various kinds. You've got yeast and salt and other ingredients, etcetera, etcetera. You can fill in those blanks. Or if you want, you can continue reading that. You've got a flour mill, again, with wheat or grains and so on, machinery, sacks and labor, power, transport, etcetera, distributors for the bakery equipment, warehouses for the grain, factories producing the flour mill machinery, factories producing stuff for the bakeries. And how far have you got? And it isn't until we finish going through there that we actually get to the farms. The farms, again, have seeds and fertilizers and pesticides and so forth, agricultural machinery, factories there producing the agricultural machinery, producing fertilizers and pesticides, separate farms which produce the seeds, steel mills, mines, and the factories who produce the mining machinery, and so on and so forth. Okay. Now as we go along through there, a couple of comments again. First comment, of course, is that in addition to everything else, we've got legal and insurance services at every stage. We've got certain loops in the flow. It's not a linear flow. We've got steel which goes into fifth, sixth, seventh, and tenth stages of production or whatever. Key point is that this is the way in which people use the goods. That's what the classification tells us. Okay. The other point, of course, is that what we have there is only the barest sketch the barest sketch of the kind of capital structure which you've got in developed countries in the late twentieth century. And even as we look at this very crude representation, we find that clearly that capital structure is going to produce millions upon millions of final products. In trying to find out how much the supermarket locals Woolworths supermarket carried, I went in there and trustingly asked them, can you tell me total number of items that you have on your shelves? They were scandalized. They accused me of being a spy for a rival grocery chain. Instead, it's a commercial secret. We can't tell you. But, again, you know, I mean, from from our daily experience in the developed shopping in a developed area, we can we know. We're talking about millions of items being turned out by this given this capital structure. And bread is being one item. But once you start going through it, what you find is that you've got a capital structure which in fact produces all these millions of items. And again, what you've got therefore is the stage of final production, whatever the range of goods are that come out in that stage. And then whatever other investments that you've got in stages further removed. Okay. Now let me make a few observations there on the capital structure that we've got here. Is there any way we can put both of those up? Let me try and put up both together if we can. Or it can rate, if saw it. Is it all there? Excellent. Good. Okay. First point I'd like to make is that at all stages of production, you've got both fixed and circulating capital. So that we're not talking about fixed capital by itself or circulating capital by itself. You need both. And there in every stage of production, you've got both fixed and circulating capital or what is known as that. You also got in all stages, everywhere you've got a range of capital combinations. This is one of the things which Menger noticed very early on. Capital combinations, and they have to be available in the right capital combination if they're going to have further production. Okay. The other point to note is the time taken from the time you start producing your mining machinery to the time when you finally turn out your millions upon millions of final consumer goods at the other end. Okay. Again, a point I want to emphasize, we are not simply saying inputs at one end plus t for time plus outputs at the other end. You have to have all of these things specifically if you're going to produce the final goods and services that you're producing. Okay. Another point. This capital structure did not drop from the sky overnight. It took time to develop. In fact, if we say take the example, say, of England or even of America, England, it started this sort of thing started to build it up to that level. You had to start you did start back in eleventh century or earlier, twelfth century, and so on. So this capital structure took time to develop. And another point, this is exceptional. Developed countries are exceptional. I said for most of mankind sorry. Politically incorrect. For most of humanity. For most of humanity, it is your shorter capital structure, which is what we are familiar with, what we live with. And even in in underdeveloped areas, even with higher income groups, you're still dependent very much on what is essentially a short capital structure. Structure. You're buying this year's harvest of grain. You're storing it, and you're using it you're using eat actually eating last year's harvest because grain is supposed to improve with keeping. And a lot of the final stages of production, in other words, are still within the household. Every time the harvest comes in, you hire women to come along and help you to winnow and pick over the grain, oil it down, store it in these great zinc drums with little bowls of insecticide for the legs to stand in so you don't get insects in the in the grain. The zinc, of course, means the rats can't get at the grain. And then it is still true, certainly in India, that you don't buy flour ready made. When you're ready to have, you know, some sort of grain food in the house, the grain is then taken down to the flour mill to be turned into flour and then brought back and stored in for three or four days, and then you the whole process starts again. Okay. And, of course, the bulk of your foodstuffs consists still of grain, not of the other foodstuffs which require much longer production processes before they turned out. Okay. Now, you notice that in all of the this longer production process, the capital structure in the developed countries, late twentieth century, we do not have any sort of status exchange a status system. Everything there, the title is through exchange. In other words, an ends independent and instrumental legal order. And another thing to notice, the developed countries are the common law countries, the English common law countries. Western Europe has Roman law. Roman law is like English common law, a grown law. And not legislation. It is not status either. It ends independent. It is instrumental. The more developed parts of the underdeveloped world are the ones in which English common law has become more widely absorbed and used. Roman law has become more widely absorbed and used. The Anglophone areas of the underdeveloped world or the francophone areas. Japan, the other developed area, has had similarly grown law, Japanese merchants law, which has been going since at least the sixteenth century, if not earlier. And again, in the Japanese case, the samurai, the ruling classes, simply concerned with themselves. They couldn't be bothered with, you know, such people beneath their notice like the merchants or farmers or whatever. And therefore, the Japanese economic order developed over centuries again with grown law rather than any sort of imposed legislation or status. It also was exchange based law, you might say. Okay. Next point. We've been talking about the capital structure here. It's a social formation. Again, what we're looking at, the investments in each firm are, as it were, small bits in the capital structure. They don't stand independently. They cannot. They're all part of capital structure. Okay. Now the other the question, therefore, which emerges from looking at things like in terms of the capital structure is, with any investment, what is the final good or service to which it contributes, which it helps to produce? Where does it stand in relation to that final good or service? In other words, every investment is really only part of the whole network of investments. Okay. We're looking here at a social formation which involves millions upon millions upon millions of people. The other point is that, except for The US, which is always odd man out, in the other developed countries you find that as early as fifteenth century, what you had were production processes which are already crossing political boundaries. And so if we are looking at a capital structure like this, we're looking at something which is already international. That's why Mises said, of course, that the market economy's field is the world. Okay. I'll put up now a little diagram. That's the stage furthest removed. Then you have the other stages, standard Hayekian triangle or what you want to call it. Okay. Now that, of course, is not really an en bloc. What you've got is an intricate, very intricate network of investments. And again, it's so complex that as Hayek said, you can state the principle on which it's formed, but you can't really describe each and every investment that goes into it. So you have to think of it as a sort of highly intricate sort of network like that. Okay. Now you've got your regular production processes then which turn out your final goods and services, but you've also got political boundaries. And what happens is that your political boundaries in relation to the production processes are completely random. So when you look at your export and import statistics, what you're really picking up, of course, are simply the flows from one stage to the next or within a stage or whatever. Okay. Now, for The US, for most of your history, your exports and imports, foreign trade has been about 10% or less of total aggregate output, however you measure it or define it. For all other developed countries foreign trade which is today exports and imports combined has always equaled 40 to 50% of total output. And in countries like France which don't like foreign trade very much it's still 35. And of course it goes up higher. Now that is simply another way of saying that the production processes that you've got here don't simply end there because you've got a political boundary. They continue on. And what you've really got there for is really by the time you get to the late nineteenth century, it's been growing for, you know, for centuries. By the time you get to the late nineteenth century you really have an international economic order worldwide economic order in which what you've got is say the Australia sector, the British sector, the German sector and so on. So, if you start studying economic history of any one country, you soon find that by the time you get to the sixteenth, seventeenth centuries or later, you're really very conscious, find that you are looking at only one part of a very much bigger, very much bigger picture. Okay. Now, as I said, that capital structure which I put which I, you know, very crudely put up, did not develop recently. What you had was a switch, a change from the status based economic activity, status based legal system, as you found in poor old Mali, gradually changing over time in the course of centuries to become what we see today. Now, the story is different in different countries. Being British I only know English, of course, complete monoglot. And I can tell you that so far as England is concerned, the switch changeover started, you might say, about roundabout the the fifteenth century. And what you notice if you compare the economic and the legal changes is that the substantial legal changes occur in the same period in which you've got your substantial economic changes. The major period of transformation of the English common law, and this is done by legal historians who haven't a clue as to what is happening in the economy even economic activity. Major changes were in the period 1450 to 1550. And you had a complete transformation. And that is the legal order which still continues. And you've got changes that still continues today in the common law countries. The autarkic restricted range of exchange, restricted range of goods being produced stage, if you want, circumstance, in England, at any rate, was certainly during the Anglo Saxon period and earlier periods. And after William the Conqueror came around, he then got a change for various reasons. And you got you can see in particular areas of England. Interestingly, those areas of England where you have what is known as a weak lordship. The lord didn't particularly know what was going on in his estates. Those are the areas where you start getting quite definite indicators of economic growth, of extension of the capital structure, and then the whole thing sort of merging eventually after the Black Death and then developing thereafter. Okay. Again, another point I want to emphasize. This is also in a very real sense an historical process. You started with the specific kinds of rules that you had in eleventh, twelfth century England, and then you started gradually changing those until you reached the kind of legal system, broader legal system, the ends independent instrumental rules that you've got today. If Mali were the country that were doing it, then Mali's rules would have changed. It would have been a specifically Malian sort of process. Okay. Some further observations. The difference between what we've seen for Mali and what we've seen for the developed areas, it cannot be summed up by the term industrialization. What Mali lacks is not just a few factories. Maybe you plunk down a few factories, it isn't going to help matters. You have to start with what you've got there in Mali, and then gradually transform it until it becomes developed, if you want. Okay. Now I'll put up that picture again, because there are a few indicators there of I can find my copy of the picture. Okay. Now, yes, now there are a few indicators of wider exchange. Where do we see see those? I don't know if it's very clear, but the young man there actually has a watch. He's wearing a watch from Taiwan or Japan or, you know, a very cheap watch. He's also wearing a shirt and trousers, factory made shirt and trousers, not the handmade hand woven clothing that the rest of the family are wearing. And if you can just see the young lady is obviously wearing a pair of manufactured slippers. Okay. Now that means that they are in contact with a wider international economic order, and they bought their things more cheaply than they would have bought otherwise. What Mali exports are livestock, ground nuts, or what you would call peanuts, and cotton. Obviously, all very poor quality. It is surrounded by countries like Nigeria, Ghana, and so on, which produce cocoa, which is obviously an internationally traded good. And so therefore, what you've got is part of this great multilateral exchange through Ghana, Nigeria, the cocoa production. You've got Mali also, the people in Mali also participating in and obtaining these international goods if you want, and therefore, obviously, somewhat better off than if they didn't have this sort of contact. Okay. Now, historically speaking, the greatest development of the international economy or the international economic order is in the nineteenth century. It's one of the most remarkable centuries that the world has seen. There were no major wars between 1815 and 1914. In fact, when 1914, the war broke out, the Royal Navy didn't know what to do. So they commissioned a report on how the Battle of Trafalgar had been fought back in the twelfth, whenever it was. It as I said, it's it's also the period in which you had greatest peaceful movement of people, 43 odd million people moving for no reason at all except to improve their conditions. From the areas in which you had large numbers of people, perhaps not quite as much capital, to places, of course, like The US, Canada, Argentina, Australia, New Zealand, South Africa, and so on. Okay. That is also the period. Now, the other point to note is that, of course, you also have population growth along with the extension of the capital structure. Population in sixteenth century England was around 5,000,000 people. By the time you get to the late nineteenth century, it is in the region of 50,000,000 people or somewhat less 45,000,000 people or so. Enormously more prosperous, obviously, in living in proper brick houses, etcetera. And with much larger output. Okay. Have we reached the end of our time? Another fifteen minutes? Okay. I shall stop. Well, I won't stop there abruptly. What I will do now, I have one last handout to put up. And that is, of course, to tell you that how do we get this picture? What do we do here? What we've been doing here is, of course, looking at historical materials. And we've been using an auxiliary, which is our friend, the capital structure. That is not the only social formation that we got. In addition to the capital structure, similar social formations are, of course, the English common law, Roman law, private law, language as a whole, society itself, habits, customs, ways of doing things, and so on. They all belong in the same category. And what I've got there are, as it were, is as it were the where are we? Where's my copy of this thing? Here we are. The the list the the line which we have culminates, of course, in our the three that I mentioned, Menger, Mises, and Hayek. The first social formation of the kind which we've been looking at ends independent, growth over time, historical, rules based, etcetera, with the English common law. And Sir Edward Coke is, of course, the name there. Sir Matthew Hale also famous for his debate with Hobbes, Hobbes being the legal positivist, Matthew Hale trying to explain how the common law developed. Matthew Hale was a legal historian as well. Hale also mentioned that law was like language, but he hadn't any no further investigation after that. Mandeville, customs, habits, and economic activity, analyzed the develop the production of a piece of scarlet, scarlet being a kind of cloth. And what he showed there was not only the regional division of labor, but also the extent to which by this time, late seventeenth century, you were already getting in, say, dyestuffs from Russia, from Brazil, and all over the place. And he anticipated Menger by pointing out that the fixed investments or investments in the dye dyeing vats, the weavers' product production goods and so on was also a part of the total story. Okay. He saw that the division of labor is the foundation of society. And that, piece of analysis was then picked up by Mises later on. Hume wrote a history of England and, legal analyst as well as, economic activity. Adam Smith, as we know, the father of our science, such as it is. And if you read the Wealth of Nations, what you find is extensive historical comparisons. China, France, etcetera. Add Edmund Burke. Edmund Burke wrote an unfinished history of England and an unfinished history of the common law. Again, a legal thinker. Important because it is through Edmund Burke that the analysis of the common law reached Menger. Menger points out that Edmund Edmund Burke's historical analysis is at opposite poles from that of younger German historical school. They both historically says but in totally opposite senses. Adam Ferguson language again, the first to notice the development of the international economic order and, again historical sociologist wrote a history of the Roman Republic. Sir William Jones, the founder of historical linguistics, and it is by this time that you start to see language as something that belongs in the same category as economic activity, say, customs and so on and the common law. Humboldt, again, legal sorry, a linguist. Again, important because, again, through him reached Menger. And Dugald Stewart, again, law, mathematician, a philosopher, and an economist, and therefore totally impractical. And finally, of course, our great founder, Carl Menger. And you'll notice that he also he analyzes the common law and he adds another economic formation, which I've not mentioned yet. And that is the what Hayek later called the catalaxy. If you look at his appendix on national economy, you'll see he discovers that we have here an a formation which is much larger than your economic than your individual firm. It is analogous to what I've just drawn here, the capital structure with each firm being only an element in something much bigger. Okay. Mises. Again, the point about Mises here is that he analyzed the development of society. It's very, very interesting how he does it. He says that society is not an invention. It is not a large thing in itself. It is not the result of a social instinct, because that is not an explanation. It is not God given and therefore mysterious. It is the result of the division of labor. Division of labor, reason, and language, he says, are the three things which distinguish humanity from other beings. And those three, of course, he takes pre he takes from Adam Ferguson and Adam Smith. Okay. And finally Hayek, culminate culmination, you might say, who gives the name the catalaxy. Capital structure we have through from Menger, through Mises, and Hayek. All three contributed to, obviously, to what I've been saying here. And, also analyze the common law. Right. So that what we have here, a range of social formations which all belong in the same category and which all have to be analyzed as actions of individual people. Now I'll gallop through, Mr. Chairman, another minute or so. I won't go into the economics or whatever. I'll simply say what how linguists analyze language. It's something which people already do. They've been doing it for ever since they came out of the stage of being just ordinary primates. Complex set of rules on which people act, which they don't even know that they're acting on, developed historically over time. And so that is what the linguists are analyzing scientifically, systematically. The same sort of thing for all these other formations that I've mentioned, capital structure, common law, other economic phenomena. And finally, a point which I think I want to stress, and that is that both Mises and Hayek always talked about the pricing system as a whole. They did not talk about isolated prices or isolated markets. And Hayek in particular points out that it is only the economist's imagination which breaks up the economic system into individual markets. In fact, the whole thing is one interrelated social formation. Okay. Well, I think I'll stop there. Thank you very much. --- ## [Interview] Bollywood and Cultural Change in Attitude URL: https://indianliberals.in/primary-works/bollywood-and-cultural-change-in-attitude/ ### Summary Economist and academic Nimish Adhia delivers a monologue analyzing how Hindi cinema reflected shifting Indian cultural attitudes between the 1950s and the 1980s-90s. Drawing on his study of films across these decades, he observes that mid-century Bollywood cast pandits, jailers, poets, and tour guides as heroes, while businessmen were almost invariably villains — a reflection of a broader societal suspicion of commerce and a zero-sum view of profit-making. By the 1980s and 1990s, Adhia argues, films began portraying businessmen as legitimate heroes, signaling a deeper ideological transformation. Indians increasingly accepted that commerce could benefit society as a whole, not merely enrich individuals at others' expense. He frames this not as cinema driving ideology but as cinema mirroring a cultural sea change. A second shift Adhia identifies is the move from collectivist subordination — where individual desires for business or imported goods were suppressed in service of national economic planning — toward a more rebellious affirmation of individual pursuit of happiness as legitimate in its own right. ### Body # Bollywood and Cultural Change in Attitude Source: https://www.youtube.com/watch?v=N6xDBpZ5McA Duration: 217.5s **Speaker** (00:04): In the films that I studied, I noticed a pattern that in the films of nineteen fifties and nineteen sixties, no hero in the film was ever a businessman. The heroes tend to be pandits, Joshis, jailers, even poets, philosophers, tour guides. Okay? But they were never businessmen. In fact, any character that was a businessman was almost inevitably the villain in that movie. So I think in the fifties and the sixties, there was a very strong suspicion of businessmen. And in fact, the whole activity of commerce, of profit making was looked down upon as an antisocial activity. I think the underlying belief was that trade or commerce is a zero sum game. Okay? If one person benefits, then it must necessarily come at the cost of the other person. And I think that changed over time. In eighties and the nineties, what I began to notice is that a lot of films had heroes who were shown to be businessmen. And that was — that was a dramatic shift, I thought, that revealed something about what was going on in the Indian society, some change in ideology or cultural beliefs. And I think that change was that people no longer considered business to be dirty or an antisocial activity. And it is something that is worthy of a hero to engage in. So I don't think the films had a particular tryst with any particular ideology, but I do think that films reflected the change in ideology that I talk about. People were more open to the idea that commerce can benefit society as a whole rather than benefiting just particular individuals. So I think this was a huge cultural change that took place in India. A second cultural change that took place in India is that earlier, the needs of the nation state as the national leaders defined it were considered above the individual needs of people. So if people wanted to earn money through business, if people wanted to consume imported goods, those needs were suppressed for the benefit of national economic development planning. And people were able to endure that suppression of their desires for the greater good. In the nineteen eighties and the nineteen nineties, I think that changed. People became more rebellious. Individual pursuit of happiness was considered to be more legitimate than it was previously. --- ## [Interview] BR Shenoy - A Prophet Without Honour? URL: https://indianliberals.in/primary-works/br-shenoy-a-prophet-without-honour/ ### Body # BR Shenoy - A Prophet Without Honour? Source: https://www.youtube.com/watch?v=ij6KISXzIGM Duration: 221.8s **Speaker** (00:09): One thing you could say about BRS is that he followed his own star. He followed his own opinion. We were sort of brought up with that as children. I mean, he he did not follow what other economists were saying unless it met the test of his own understanding. I mean, it's a bit like Lord Buddha. Right? He said, do not follow me blindly, but unless it meets the test of your own critical intelligence. So it's not surprising that he did not follow the existing party. I mean, party didn't pick him up for public policy because the atmosphere at the time was very difficult to imagine now. Entrepreneurship was a dirty word. Business was a dirty word. Profit was a very dirty word. And the concept of a market was simply not there. The concept of competition and a market. So in those, in the, and and the whole thing was to imitate the Soviet Union and heavy industry and having a central planning mechanism and so on. And one of the things my father used to say is that he didn't have much respect for the Indian well known economists who were what he called economic lawyers. He said a politician gives them a policy and then they formulate an argument to support that policy. So his early ideas was India is poor, India is unemployed, India needs employment. So therefore, you should invest in areas which generate employment and generate goods and services, in the most efficient way. This seems obvious, but not to the policymakers of the time. And they they just, one of the phrases which you used to describe the Planning Commission were just imitating the gross output index for economic growth and so on. This is, these people support a menu without prices. So yeah. As I said, it wasn't surprising he was not popular and he continued to be unpopular until his ideas and those of others in the Indian liberal movement had some impact in the form of the Swatantra Party, which is sadly no more, but the idea spread. And then when the time came, without invoking his name, the idea were used in the 1991 reforms, which have been referred to as a second independence of India. --- ## [Interview] Centre for Civil Society : A Journey in Time URL: https://indianliberals.in/primary-works/centre-for-civil-society-a-journey-in-time/ ### Body # Centre for Civil Society: A Journey in Time Source: https://www.youtube.com/watch?v=WGEp5QOr51g Duration: 285.8s **Parth J. Shah** (00:05): I think I would consider — I really like the biographical book, autobiographical book, of Rose and Milton Friedman. It's *Two Lucky People*. I certainly feel that way, that I got very fortunate in support that I received when I wanted to start a think tank in India. I saw that that was interesting way to combine academic life with an activist life. So I'm not a kind of activist who can go on the street and do the — and fight those battles on the street. I'm more of an academic by training, by temperament, and I think, generally, as a person. And I like the idea that I could engage with the ideas through think tank. Right? And maybe thereby contribute to larger public discourse in India. And I would say, no. Overall, looking back on the twenty four year journey, I'm quite happy with what we have been able to do despite the great odds against our survival and continuation. I think most people, when I started in 1997, thought that it was sort of crazy idea, a crazy game. I think many of them predicted that within a couple of years, I would get tired and go back to US. Some had given me five years, so that was most generous time horizon that I've seen at the time. That maybe five years would be good enough for you. After that, you are — will actually go back to where you came from in a sense. But I'm happy that I could stay on. I think largely because of the people like you as well and some of the people who are with CCS today and have been with CCS over the entire journey. So many people who worked with CCS, many of them who worked through our training programs and began to promote these ideas in their own walks of life wherever they went, you know, in their own career path. So I feel, overall, it's a very successful journey. I wouldn't do it otherwise, maybe any differently. Well, one can think about doing things differently. But I think in terms of broad choice, of doing what I set out to do, I think it has been a very fulfilling journey. I think in terms of initial experiences of starting CCS, I think one that comes to my mind, first and foremost, is about talk I had given, I think, first couple of years of CCS to one of the newspaper editorial team. So I was invited by the editor of the newspaper to give us a talk to the team in terms of, you know, what's my motivation, why I'm here, what I want to do, what trajectory of the work that I foresee CCS doing moving forward. So I've tried to make my brief presentation about the broad ideas about CCS and what I want to achieve, one of the first question that came from the actual team — and this was one of the pink newspapers, as we call it, in the business newspapers in India. Right? The first question I got from one of the senior members of the editorial team was, how much is CIA paying you? And I think that question is really symptomatic, right, in a very, very fundamental way of Indian mindset. Right? And that is how I think most people thought. Of course, some people are able to articulate and say it out loud. But many suddenly thought, yeah, in the back of their mind, right, that nobody will come to India to talk about liberal ideas and sort of open markets, market working for the poor, and how the market actually help the poor. Right? Why markets are important for them, not just for future business for goods. Right? And their whole set of ideas, they thought that nobody can talk about this. Nobody would willing to come to India to talk about them unless somebody is paying them, right, in some sinister way and promoting them to come to India to do this. Right? I think that's certainly the mindset, of course, popularized by Indira Gandhi in terms of the foreign hand, and even continues to some extent today in much of the public discourse. --- ## [Interview] Chakravarti Rajagopalachari - Gandhi's Conscience Keeper URL: https://indianliberals.in/primary-works/chakravarti-rajagopalachari-gandhis-conscience-keeper/ ### Body # Chakravarti Rajagopalachari - Gandhi's Conscience Keeper Source: https://www.youtube.com/watch?v=YNsu2k-U3DA Duration: 128.3s (empty transcript) _Cleaned: skipped (transcript empty or too short for speaker identification)._ --- ## [Interview] D R Pendse on Doing Business in India before 1991 Reforms URL: https://indianliberals.in/primary-works/d-r-pendse-on-doing-business-in-india-before-1991-reforms/ ### Summary D. R. Pendse, who retired in 1991 alongside JRD Tata, recounts what it was like to operate inside India's controlled economy, particularly from 1969 onwards when controls intensified. He catalogs the apparatus of the License Raj: industrial licensing under the Dutt Committee recommendations, the MRTP Act of 1969 and its 'Concentration of Economic Power' chapter, waves of nationalization (banks, life insurance, general insurance, coal), FERA's micromanagement of foreign exchange, the Planning Commission's gap-based licensing, and even a gold control order limiting Indian women to 14-carat jewelry. Pendse contrasts two industrialist responses to this regime. Most firms gamed it — grabbing licenses in industries where they had no expertise, then sitting on them to manufacture scarcity, inflated prices, and untaxed black money. JRD Tata refused that path, insisting that a bad law must still be obeyed while one worked publicly to change it. As a result, Tata Power could not get clearance for a 500 MW project, and TELCO was denied expansion in commercial vehicles on 'concentration of economic power' grounds, while less scrupulous competitors thrived. Pendse frames the 1991 reforms, delivered through Manmohan Singh's first budget, as vindication of JRD's stance: the very provisions Tata had fought were repealed, and the group could finally grow — though by then both he and JRD had retired. ### Body # D. R. Pendse on Doing Business in India before 1991 Reforms Source: https://www.youtube.com/watch?v=vbdFNzbM1P8 Duration: 645.8s **D. R. Pendse** (00:09): I myself retired in 1991. JRD himself retired in 1991. So my experience is with pre-reform. Post-reform, we both had retired. So I don't think he can say much about it or I can say much about it. But you have to observe, observe the the economy, what is happening. Yes, but my main experience and direct contact was in connection with pre-reform or the controlled economy. And the controls were at the worst from 1969 onwards. And that was the time when I was there. And JRD also was very much perturbed about that. So our experiences were about controls which were becoming worse and worse almost every day. And I will give you several examples of that. First, they had started what you call the industrial licensing system, which was not there. There was a Dutt Committee report on industrial licensing, whereby all major or big companies required a license to start any industry in any commodity. There was the MRTP Act, that is the Monopolies and Restrictive Trade Practices Act 1969. The worst part of that was a chapter called Concentration of Economic Power. That chapter was derived from a part in a constitution apparently saying that concentration of economic power to the common detriment should be curbed. But that word to the common detriment was conveniently forgotten, that any concentration of economic power was considered bad and they decided to curb it, which was absurd. Any large entity cannot be bad for the country. If it is working to the common detriment, it is bad. But that is MRTP Act, concentration of economic power. Then they started nationalizing at the drop of the hat, as I said. They nationalized banks, they nationalized life insurance, they nationalized general insurance, they nationalized coal mines and all sorts of things. One after another they started nationalization, which was again very wrong thing to do. But as I said, they are parts of the controlled Raj. Then they had what you call the Foreign Exchange and Regulation Act, FERA. So every small transaction in foreign exchange had to be controlled, regulated and approval of the government of of babus had to be taken. So if you have to go abroad, I had to take six, seven different approvals to get my daily allowance in foreign exchange. So that was a Foreign Exchange Regulation Act. Then there were the Planning Commission, which was the one of the worst. It became a fifth wheel, I would say, or super cabinet because every project of any size had to be approved also by the Planning Commission. Their approach was they they looked at how much was being produced in the country. Then they decided how much we needed at the end of the five year plan. Then they worked out the gap. That means if 5,000 were produced and they required 8,000, I mean, the 3,000 is the gap. So they will allow people to start industries to produce up to 3,000. That was the gap. Now who will produce it? The public sector was given the first chance. If the public sector does not want to produce it, then the small scale industry would be. Then they also don't want to produce, then it will be open to the private sector. So that whole thing was absurd to the maximum extent. So that was the way I am putting it very crudely, but that is exactly how it works. That was a Planning Commission. Then so the Planning Commission and then the various controls. Planning Commission, instead of becoming a help, became a control or control part. Then there was a gold, gold policy also decided that Indian ladies should not use more than 14 carat of gold. One day, then she decided, and anything more than 14 carat became illegal. You can't do that. One suddenly one. Hundreds and thousands of years, Indian ladies have been using 22 carat gold jewelry. Now everybody who was using 22 carat became became a unlawful, became a law breaker for doing nothing. So that is a sort of way the way things, now, of course, after twenty years, his successor, he withdrew all that. But after twenty years, when enough damage was done, and was gracious enough to say it was glad that his successor removed it, though it was not working. But he introduced it in the first place. So I am giving you all these examples how the controls were at the maximum and where comes your throttle of the industry. So that is the area, that is the time when we were functioning or we could not function effectively. Now JRD's approach or response to this area of there are two approaches. One approach many industries took the approach. So what do they want? They want to know what is the gap and they want to give you license for if there's a gap. So even if you are capable, supposing you are not capable, you are you are you are in one industry, say, commercial vehicles, and you have nothing to do with some other industries like wagons. But there's a gap in wagon, and they are allowing giving licenses to wagon. Apply for wagons. You have no no expertise, nothing at all. So you got a license. So ask for license wherever licenses are available. Not worried about what you are capable of. Then take the license, then sit over it. Then don't start producing. Don't start producing. Well, if you produce, then the production will increase, prices will come down. So they don't get the license and then give them excuses why you cannot produce, some trouble, this thing, that thing, and give them excuses for not producing it. So get a license, sit over it, and then make, so if you sit over the license and the production does not increase, the scarcity is increased. And then your scarcity is increased, then you make black money on the existing production. So that was the approach of many industrialists. That in this in this wonderful economy, best thing is to just get a license, whatever you can get, and then not don't act on it. And you make magnificent money for the next three generations. Because you make scarcity profits, then don't pay tax on it. So that is also black money. So nothing, everything was fine. But was not like that. Felt this is very wrong. Approach was different. Approach was that law, you see, it is famously said that law is an ass, but we must respect it as long as it exists. That is I think William Peter or somebody said that. Believed in that. Say law is a law may be bad. So you are having this law. The MRTP, bad law. Gold, bad law. Industrial licensing, bad law, but government has made it. So you can't break it. That was his approach. If you have if you have made the law, you must try to change the law. So create public opinion, explain to the public, create public sentiment that the laws are bad and not in the interest of the country and get the law changed. But as long as the law remains, you must abide by it. That was JRD's approach. Now that approach, because of that most of the companies of JRD Tata Group, they could not expand because of all these controls. They found it extremely difficult to put. Now Tata giving two example, Tata Power, they wanted to have a 500 megawatt project. For five years, they went down from here to there, there to here, no license given. And Tata Motors, TELCO, at that time, it was called TELCO. They wanted a expansion of producing producing truck, commercial vehicles. No way. Well, they said that will increase the concentration of economic power. You are already a large company. You will become larger and your economic power will be more concentrated, so we don't want it. So all that, that is a sort of thing they were having. So we had big problems in all that. So we are trying to get a license for becoming a problem. And others were doing it enjoying that Licensing Raj. But we could not do that. That was the JRD's effort. But he remember, ultimately, he won. His team, from 1960 to 1991, the whole whole philosophy was changed. Everybody agreed that whatever was done was wrong, and all the laws were repealed by Manmohan Singh first budget 1991. Reforms, we call it. The first budget that was a reform, a repeal of all these provisions. Now that is a great compliment to JRD's thinking that all these things were bad. So they were repealed and then JRD's company and Tata company started growing. But by that time he retired, I had also retired. But after seeing that we got what we wanted, that is what I am saying. So that was the added department. Other industries again were telling, so so many people used to tell me in industries, Mister Pendse, why are you worried of changing all these structure? Wonderful. If we did want the license, you get a license, but we are making a profit. So while trying to get the change and competition and market, who wants all that? Without doing anything, sitting at home, we are making good money. So that was it. That is the Control Raj, as I told you. First first question, I think that is what I wanted to say. --- ## [Interview] D R Pendse on his Relationship with JRD Tata URL: https://indianliberals.in/primary-works/d-r-pendse-on-his-relationship-with-jrd-tata/ ### Body # D R Pendse on his Relationship with JRD Tata Source: https://www.youtube.com/watch?v=si8F_I4P8xY Duration: 124.7s **D. R. Pendse** (00:09): When I made a proposal, I will always first write a note, send it to — I will write — publish the article or send a note to JRD. And JRD, he will always say first class, excellent, very good. And and I also said, do you agree? He said, yes. I seem to agree with everything what you say. Because that is a fact because I mean, I'm a huge economist. So if I have interest of Tata than private sector industry, I'm bound to say something which is the interest of industry. You could see that. He — and he often said that there are really nothing to say. I seem to agree with everything what you say. So he never never obstructed me from writing anything. Never. Never obstructed me from giving a speech. Never obstructed me to make a comment. Nothing. Never. Just left it to me because he was confident. He had complete faith that I will do something. Whatever I do will be in the interest of the country. It will be in the interest of industry. Because I was in — in my opinion, I was in his 18. He believed in me. And that is — and he decided why should he not believe in me? I've certainly done something which is good for the country in terms of economic policy. And all these economic policies which adopted, most of them are straight from articles. I I proposed this. Monopoly act canceled. I will propose. Industrial, send in gold control. This, that, that, all these things were — and that that he didn't do it directly because I propose. He did it because I may propose. I may propose because they had long discussions with me, and they are symbiotic. I'm not saying that they did only because I — they must have been convinced about it. --- ## [Interview] D R Pendse on India’s ‘Open and Prosperous Past’ URL: https://indianliberals.in/primary-works/d-r-pendse-on-indias-open-and-prosperous-past/ ### Body # D R Pendse on India's 'Open and Prosperous Past' Source: https://www.youtube.com/watch?v=DKkwm22E5bY Duration: 212.7s **D. R. Pendse** (00:10): Throughout history, except the last two hundred years, which include the industrial revolution and of course the post-independence, including post treatment, except the last two hundred years, India has been an open and prosperous country. That is the first fact which people have forgotten. People have always considered India to be perennially a backward poor country, which is wrong. India has been a perennially backward poor country only for the last two hundred years. Thousands of thousands of years before that, all along India has been an open and a prosperous country. Now India was not one country. India was a several kingdoms. They made into one country when the British came. So otherwise, there were small kingdoms all over the all over the geographical area of India. But all these kingdoms, they were famous for being very prosperous, very prosperous. I was telling you yesterday that our balance of trade was so surplus, we had nothing to buy from the world. We had only produced everything which the world needed, we produced it. And where there was nothing which the world produced and we didn't we didn't produce. So there was nothing which we could buy from the world. But we the world kept on buying things from us. We kept on buying clothes, kept on buying instruments, kept on buying jewelry, kept on buying everything. They wanted it and India had it. And every day, one ship fully laden with gold would come to the Indian shores. They would buy whatever it is and since India had nothing, they had nothing to give, they would give gold to the Indians. That is the only thing which Indians could accept because there was nothing else to accept. They didn't want anything. That was the level of prosperity where and there is not one year or two year, there is for thousands of years. But that is that people have forgotten. Right? Anyway, so we were and we were open and we are prosperous. Now we are closed and we are poor. So I want to say it. So we want to have two areas. One is we want to establish that we were we were all along in history. We were open, and because we were open, we were prosperous. So we now go on to convince people that we should be open again so that we become prosperous. Fantastic. That is what and and then with with the independence and all the industrial revolution, we started controlling. I told you first control large. Whole thing was absurd to the limit. We never had economy and never experienced such controls. So that is one thing is that. So we want the first thing is we to reestablish and rewrite world history is to establish that India was prosperous, India was all open, India was open, and therein prosperous. So let us make it open in order to make it prosperous. --- ## [Interview] D R Pendse on Liberating India s Entrepreneurs URL: https://indianliberals.in/primary-works/d-r-pendse-on-liberating-india-s-entrepreneurs/ ### Body # D R Pendse on Liberating India's Entrepreneurs Source: https://www.youtube.com/watch?v=VJtw5aOk1Pw Duration: 421.1s **D. R. Pendse** (00:10): Indian entrepreneurs are tops, tops, tops. Entrepreneurs — that was the, that important idea is entrepreneur. Entrepreneurship was, instead of entrepreneurship being given full scope, we try to control entrepreneurship. So then what when we try to control entrepreneurship and they say, no. Don't take that industrial and don't do that. The people, the entrepreneurs said, oh, we we want to make money. The entrepreneurs want to make money. What is wrong in it? Everybody, you want to work salary, so they want to make money. So if they want to make money and you don't allow them to make money by starting industry and you want, you say that you can make money by grabbing a license and sitting on it, we will do that. But we want to make money. Naturally, that is the business. They want to make money, you wanna allow them to make money. What is wrong in it? The whole world is making money. So why should you stop them from making money regularly so that and induce them to make money in the wrong way. That is the Indian entrepreneurship is, therefore, I'm saying, is absolutely tops. And therefore, I'm now concluding by quoting Alfred Marshall. Alfred Marshall was one of the best known, by one, the best known economist of the twentieth century. He was from Kenya. He had a picture of a poor man in his study, and he used, he said, a score of Tatas might do more for India than any government, British or indigenous, can accomplish. It is not the government where the country needs. It is a score, 20 Tatas, will do more for this country than any number of, whether it is British government or Indian government. They, we don't need them. They're contented there. The score of Tata, Tatas been good. Remember, he didn't say score of entrepreneurs or score of industrialists, score of Tatas. Tatas are very well known, honest, good, integrity industrialists. So score of 20 industrialists like Tata can do better, more for the Indian, India, than any government, whether it is British government or Indian, and he said it in 1924 when we were in the British rule, under the British rule. He said that. Now that is important. So he also realized that Indian entrepreneurship is superb. Nobody can bear go ahead of that. So but we are curbing Indian, that is the whole thing. Our whole tragedy has been there. Whatever is good, we curb that instead of promoting that. The Indian, we're curbing that. I told you that if if somebody wants to make a property, you don't allow him to make a property. And he said, then they grab industrialized and make a profit. They don't realize that making profit is helping both of us. That benefit both of us. No. But why not? What is what is wrong? You see, if you, you are earning a salary, you want the promotion? Promotion, want more income? If you want more income, somebody in the industry, he wants more income. Why not? If he fails, he will fail. He will, he will go out. He will go to gutters. Nobody will remember him. Doesn't matter. He's not asking you for any favor. He taking the risk. But if he fails, if he succeeds, if he succeeds in the industry, we should be rewarded. And he's not coming to the government for that. He's succeeding. People are paying him. What is wrong about all this? Now others will compete with him. They will drive him out. Others will not be able to compete with him. They will make still more money. What is wrong about all this? That is what I'm saying. The whole idea is score of Tatas can do more for India than any government, indigenous or British, can ever accomplish. So it is not the government with the government India needs for India growth. It is the Tatas, the good entrepreneurs, with the Indian, Indian needs. And we have the entrepreneurs, but the government is curbing them. Twenty, thirty, forty years, we curbed that, as I told you right in the beginning. It was absurd to the extent, maximum. That is why people like me felt that why our entrepreneurs are being, that is why they told you some industries that if it is good for the country, I don't care whether it is in the law or not. I will do it. I can understand their feeling. I don't share that. I, I shared JRD's approach, but I can understand them. If they feel that something is good for the country, who cares for the law? You should change your law in your own time. If you don't want to change, I'm going to do that. I'm convinced that it is in the industry of the country. That is entrepreneurship. And Indian entrepreneurs are absolutely on top. So that is my second message, message — the last message is two. One is to have two, two points established. One is India's past was, India was always open and therefore prosperous. So let us make it open to make it prosper, one. And second, give Indian entrepreneurship the position which it deserves and don't curb it. So if that is, this is the role for a think tank. Both these are to be done by a proper think tank, massive think tank industry is required to establish these things. And that is why CCS is just a small part. Use, use scope. As I told you, these are ideas industry. There are so many, so many ideas. This is just a one point, which, but this point, to be established, require 50 points. One after one, after another. So 50 books, 50 research papers, 50. Easy. It never ends. There's a continuous thing. It is a very big idea industry. So that is a role of a think tank. And I feel that it didn't necessarily, I, I really feel that India is absolute. We don't see our, our own problem is ourselves. We ourselves are our own enemies. There's all these things. Anyway. --- ## [Interview] D R Pendse on the 1991 Crisis URL: https://indianliberals.in/primary-works/d-r-pendse-on-the-1991-crisis/ ### Body # D R Pendse on the 1991 Crisis Source: https://www.youtube.com/watch?v=gXe-SwtuHww Duration: 607.7s **D. R. Pendse** (00:09): India ultimately got the whole thing changed, as I told you. All the — the laws were — most of the laws were repealed in 1991 budget and the reforms of Doctor — which Doctor announced in 1991. Most of the things were repealed, and the very fact that the government, whatever they had done over the last twenty years were repealed, that showed that they were wrong. But they repealed it. So anyway, they repealed it and then they got — and we benefited by that. We see the benefits of the reform we — we could see immediately. So that is — but who is responsible for that? You see, normally, the people say — I mean, have great respect for Doctor Manmohan Singh. He is a personal — he used to be a personal friend of mine. He used to be even now, but I have not met him for last ten years. But he was also from Cambridge University as I was, and I used to meet him many times in the past. So and I have great respect for him. I have very great even now. I think we did not deserve the man of that height anyway. So what he — he was not, in my opinion, he was not a reformer. He was ideologically. He was left of centre. He did not honestly believe in the sort of reforms that we ultimately accepted. The reforms were accepted, to use a very strong word, at the point of gun from the IMF. And at the point of gun in the sense — because our socialist, all these things which we are practicing made our situation so bad that we had to — we had to move our gold actually from India, actually physically move gold to Geneva to deposit it to get foreign exchange. It was so bad. It has never happened. It is a very great humiliation for a sovereign country that the people don't believe in your word. They actually want to possess gold. So we had to despatch the gold from Bombay to Geneva, give — hand over the gold, and then we could get foreign exchange. It was so bad. And because it was so bad, it was very humiliating indeed for us. I mean, there's no doubt at all about it. But we — we led ourselves to that situation. Our all these wrong policies drove us to that situation. We were ourselves responsible for it. So we can't blame anybody else for that. Anyway, since that happened, the IMF was the only party in the world which were able to give us a loan which will cover temporarily, help us — call it. Nobody else. At the — at that time, the private loans — as now their private loans are huge — private loans are available. IMF handed over that package to him on that if you accept that package, then you will get our loan. And that loan was absolutely necessary if you wanted to get our gold back and if we wanted to come out of the complete value of this. So we had to accept the IMF package because there was nobody else giving — willing to give us a loan at all in the whole world. We had such a bad — bad name. Nobody else. So we went to the IMF because they were the only people who were willing. And IMF is a lender. They want to make sure that what they'll give us a loan must come back. So they said if we will give you a loan, but we will give you a loan if you accept certain changes in economic policy. Because they felt that unless the changes in economic policy are made, your situation will not improve. That is exactly what we were feeling. Because the whole situation was dragged to that because of the wrong economic policy. So we had to change the economic policy and the economic — how they had to be changed, I — I have been — I and maybe one or two others, we have been writing all along last twenty — those twenty years, I have been doing exactly that. Every time I used to write, do this, do this, not do this, do this. Every now and then, every — on every aspect of economic and industrial policy, I've been writing articles, giving speeches that do this and do that. So and that was exactly what the IMF also wanted. So it's all that. So, ultimately, you see, you must remember that ultimately — well, IMF — lucky that IMF wanted something which we also wanted. We — we mean they are Pendse and some other few others like — like me — want — wanted. So IMF gave you a package, gave one more thing — a package that accept this economic policy package. Say that we will introduce these policies, then we will give you the loan. Now you see, that is also humiliating for independent country, sovereign country, for somebody else to tell you that do this economic policy. Even if the policies are right, for a foreigner to tell you that adopt these policies, otherwise, I will not give the money. It is — it is humiliating. Yes. I know. So it was — it was humiliating, but had to accept it because the whole country was driven to that debt. So he accepted that. But as — a humiliation was so great and he was such a patriot that he decided that if I am expected to return the money in four years, I will do it before that. And he introduced the reforms in such a great passion that we repaid the loan one year earlier. Our loan was to be repaid in four years. We actually repaid in three years. And in IMF history, this is the first loan which was prepaid. First loan. Now see Greece at present. For months and months, it is going on. Nothing is happening. And IMF is not giving, and Greece is going down and down and down. But we did that. But, anyway — so we — so we said that, you know, this humiliation is no good. So I will do reforms so passionately that this thing will improve. Not because he was impressed by the — he knew that this was the package which was necessary, and if the package is accepted, the economic situation will improve. He — he knew that. And he had to accept it because there was no other way. So he accepted it not because he was convinced, because he, in my opinion, was not a man who was intellectually or emotionally convinced about those. He accepted it because the IMF asked him to do that. And he was a patriot. He wanted to get the loan and get the loan repaid quickly. And there was no alternative except to accept it. Now coming to personally, I'm — I told you that I have been writing articles and given speeches on all aspects of economic policy. Well, and JRD knew it very much, he strongly supported me. And that was my whole function in Tata. First, to inform the — inform or guide the Tata management as to what the government policies are, how they are bad, how they impact — and then suggest changes. Suggest changes to the public, suggest changes to the government, and tell the Tata management how the policy will affect different industries. So that was my work, and that is what I was doing. Now I will tell you, and it is a fact that it is on record. There was one big news — newspaper, whole eight columns. I gave an interview, and they published that interview with the title, "The shortest route from Bombay to Delhi is via Washington," says — . Now what is this shortest route from Bombay? Bombay means economists like me from Bombay. And we wanted to convince the Delhi — Delhi central government to do this, do that, do that. They never accepted it. So I said in my mind, if you don't accept it, then I think — that is absolutely necessary we must do it. And I know that one day you will have to go to IMF with a begging bowl. You can't do anything. You have to do it because you will go down and down. And then they will tell you, and you will accept whatever they tell you. So best thing is that I go to IMF myself. Tell them what is necessary for the country. And if they accept what — what I think, I'm — one day, they will tell you and do that. Exactly. Tell you whatever. So shortest route — if I want to convince the Delhi government to do something, I must go to Washington. I will go to IMF, convince them that these are the economic policy packages necessary. Then they are convinced that they will impose the packages, and then our government will accept. But if I tell you that accept these packages, they will not accept. That was unfortunate. And that is exactly what happened. Now mind you, it is on record. Our Bombay House — there are three IMF delegations, three times in two years, came to Bombay and had three hour discussions with me and my one or two of my officers in Bombay House about the — what should be done about economic policy. And it is — it is on record. In Bombay, they — they came to see me, the IMF delegation. It is a fact. So they didn't come to discuss — whether they came because they — they realized that I was writing something which is exactly what they wanted. --- ## [Interview] D R Pendse on the Criticism he faced through his Career URL: https://indianliberals.in/primary-works/d-r-pendse-on-the-criticism-he-faced-through-his-career/ ### Body # D R Pendse on the Criticism he faced through his Career Source: https://www.youtube.com/watch?v=lrZSeDVMwEI Duration: 316.9s **D. R. Pendse** (00:09): In India, many people, politicians, economists call me anti-national. They just couldn't believe what I was talking was the right thing for the country. So so many — I've got so many letters — like reactionary, fundamentalist, anti-national. All these are adjectives for me. Well, I will not — I'm not going to stop that. I — I'm convinced in my mind that I'm doing the right thing. I will do it. And, eventually, you have proven right? Ultimately. And that in my book, there's a — towards the end, I have written one — one I After JRD. There's one section I have written. Actually, that is slightly beyond the our discussion, but I don't — because it's anecdote, as you said. There was a college in — So they had a — in that college, Premay said there was a meeting. Some — in the some industries call it — some Japanese people or something like that, and they invited me as a — So I went there. Somebody was a professor of economics in that college introduced me. I don't remember his name now, by the way. Introduced me. And during the introduction, he said, and I still remember that. He said, I would like to introduce Mister Pendse to me because Mister Pendse has always been writing letter articles for the last twenty five years. I've been reading them, and we always considered him as a reactionary and anti-national. He was writing something which we never — which we could never accept in our society. We thought he was a stooge of the monopoly, stooge of that. That's all. He said that in introducing me. We thought that. And but then gradually, things became — started becoming so bad that we realized one day — and one day when our gold had to be transported and all that. We never knew that things were so bad. Then we realized that we were all wrong, and he was the only man right. And that is what Mister Pendse is — Mister Pendse. But there's a lot of Japanese people who had come there. So introducing me to them, It was a big meeting. So he said that. So that is — that is my my testimony. That I was considered anti-national, but then they said, no. There is — not anti-national. I had also a sense of patriotism in my mind. And that is that I mentioned in my JRD book, I After JRD. And because, you know, what I said is that one must — you see, there again, He put me on a Octroi alternatives committee. He was against the Octroi, and I was also against it. So there was a Government of Maharashtra that appointed a committee. Well, this is a change of subject, but it's as a — as a — Please. I think doctors will be interested. So I'll donate you. So they asked him to be a member. He said, no. I'm not an economist. I will — my Mister Pendse is our economist. I will request him to be a — said, alright. So I became a member. And then I find — found that whatever I was saying, none of the members could accept. I just couldn't — what had happened to me. And I become — whatever I said, they were always object, other members of the committee. Some bureaucrats, some of these, some of professional. I said, this is bad. I — I told Mister one day. So I said, you have appointed me, but I'm becoming very unpopular in the committee. Nobody accept my view. Nobody would want to listen to me. And then you know what he told me? He said remember, we have not put you there to win any popularity contest. If you are convinced that what you are saying is the right thing, you must say it and you must keep on saying it emphatically. Don't worry. We have not put you there to win any popularity contest. And that is what has guided me. I kept on saying — if I am convinced, I kept on saying that whatever people say, I will skip. That is what this man also, he said, we thought that he was anti-national, but he evolved. Now we formed it. And even if we are not formed, it doesn't matter. Now many sides and which I have made, still people think they're absurd. It doesn't matter. Let them say so. I'm convinced about it. I'm going to say that. You see what I'm — so that thinking that — do not — we have not put you there for winning any popularity contest. So the economic adviser job is not to win any popularity contest. The economic adviser job is to pursue — to first think, analyze, develop thinking, which is right, and then speak it. Whatever it is. That is what he was thinking. I have followed that. --- ## [Interview] D R Pendse on Think Tanks and the Power of Ideas URL: https://indianliberals.in/primary-works/d-r-pendse-on-think-tanks-and-the-power-of-ideas/ ### Body # D R Pendse on Think Tanks and the Power of Ideas Source: https://www.youtube.com/watch?v=si8F_I4P8xY Duration: 124.7s **D. R. Pendse** (00:09): When I made a proposal, I will always first write a note, send it to — I will write, publish the article or send a note to JRD. And JRD, he will always say, "First class, excellent, very good." And I also said, "Do you agree?" He said, "Yes. I seem to agree with everything what you say." Because that is a fact, because I mean, I'm a Tata economist. So if I have interest of Tata than private sector industry, I'm bound to say something which is the interest of industry. You could see that. And he often said that there are really nothing to say. "I seem to agree with everything what you say." So he never, never obstructed me from writing anything. Never. Never obstructed me from giving a speech. Never obstructed me to make a comment. Nothing. Never. Just left it to me because he was confident. He had complete faith that I will do something. Whatever I do will be in the interest of the country. It will be in the interest of industry. Because I was, in my opinion, I was in his 18. He believed in me. And that is — and he decided, why should he not believe in me? I've certainly done something which is good for the country in terms of economic policy. And all these economic policies which adopted, most of them are straight from articles. I proposed this. Monopoly Act cancelled. I will propose. Industrial, send in gold control. This, that, that — all these things were. And that — he didn't do it directly because I propose. He did it because I may propose. I may propose because they had long discussions with me, and they are symbiotic. I'm not saying that they did only because I — they must have been convinced about it. --- ## [Interview] D R Pendse on the Indian Liberal Tradition URL: https://indianliberals.in/primary-works/d-r-pendse-on-the-indian-liberal-tradition/ ### Body # D. R. Pendse on the Indian Liberal Tradition Source: https://www.youtube.com/watch?v=z_7NoDmhvvA Duration: 391.2s **D. R. Pendse** (00:09): In terms of economic policy or economic thinking, we can say there's a center. Then there is a right of center, which is a — there's a far right at the extreme end. Then there's a left of center, which is a complete communist. And then there's a center. Isn't it? There is center. So somebody — are, are you a liberal? I mean, somebody asked me, are you a liberal? I would say, what is a liberal? Well, if you say, do you believe in a right of center policy? I say, yes. Now if you look at that, I'm talking mainly from the point of view of economic policy, as economy. So my approach is that at present, I find that liberal policy, or policies which the so-called liberals would have favored, are being favored. So although there are some — subject to some exceptions, but although never before in the last twenty, forty, fifty years, the policies have been so close to the world thinking. Because since last year, BJP government taking over, whatever broad orders we see as a policy, the government policy, seem to be broadly close to the world thinking. Not exactly equal to, but close to. They're closer to the world thinking than ever before. So I'm going by that. So if I'm going by that, the — so, so then that I say, yes. I, I favor liberal — liberal — I, I definitely favor right of center economic policy. That is, if that is liberalism, yes, I am, I am liberal. But unless you define what is a liberal, or unless you say these are liberal party, and are you a member? I said, no, I'm not a member of any party. Well, I mean, that's broadly what we have. You see, people say, lone liberal, lone warrior, Raju. But why lone warrior? Whatever he was aspiring, whatever he was fighting for is won. The liberal values are weak now. So we should celebrate whatever he was fighting for, whatever we all wanted — our present policies are close to that. They are not exactly equal, but are close, closer than ever before. So that is what I'm — saying, looking at it, unless you have a proper definition of a liberal — so unless you have a — I, I don't think there is a definition of a liberal party. So if there is no — that is why I, I find it very difficult to answer the question when you use the word liberal, Indian liberal group. I mean, I can understand liberal group. So, anyway, with that, that is a broad thing. I'm definitely in favor of economic policy — on the whole, the government policies to be, let, right of center. At present, they are on the whole right of center. They are more — they are closer to what most liberals would have liked than ever before. So to that extent, liberals are winning, in my opinion, to that extent, and I'm happy about it. So with that, I'm — with that preface, I'm giving the answer to that. Now when you say Rajaji, I never met Rajaji, I do not really know. Isn't it? He wanted to see how he can get across the laws and all that sort. That is also important. Palkhivala was not a politician. He was an ambassador and all that — that is a separate thing. But that is it. Then MRP, he was the implementer. He was the, what do you call, media man. So he knew what the things — knew the conclusions of this thing, he knew how to put them across. Forum of Free Enterprise was a model through which he used that, which is — which is also important. There's no use having all the things in a book. They will be carried forward to the people. So Forum of Free Enterprise was one way of doing it. So he did extremely well. So I'm not — but there are four different categories. Rajaji, Palkhivala, Minoo Masani, and Vinaymar. They're all important, but they are all in different categories, all generally favoring the right of center economic policy. And they all should be very happy about the present day. That's what I'm saying. And I did not know Rajaji. I knew Minoo Masani only — to some extent I knew him. But, of course, I have the greatest respect for public opinion, developing public opinion, creating public opinion, and getting things done. --- ## [Interview] Did Bollywood Liberalise India or Did India Liberalise Bollywood? URL: https://indianliberals.in/primary-works/did-bollywood-liberalise-india-or-did-india-liberalise-bollywood/ ### Body # Did Bollywood Liberalise India or Did India Liberalise Bollywood? Source: https://www.youtube.com/watch?v=lqoEQS_LJPI Duration: 231.6s **Speaker** (00:05): Yeah. It's like the chicken and egg question. Right? Which one came first? And it's hard to tell, but I suspect it's both. Right? I think, the liberal ideas being reflected in Indian films, were a reflection of what was going on in the society, but also in turn, it spurred further, liberal ideas. So I think we were in kind of a self reinforcing loop over there. What came first? I don't know. But once it started, they kept on feeding each other. I don't think anyone was consciously doing it. I think people were simply making movies that they thought appealed to the audience that they they had. And I guess films about self sacrifice were no longer selling the way they were before, and therefore they decided to experiment with different themes which were much more successful and more in tune with, the sensibilities of the people of the time. There was this movies, I think it was Zanjeer of Amitabh Bachchan. I forget the name. I'll have to quickly look up the name. But in that film, like Amitabh Bachchan is a young man and he's looking for a job and you know, he's working for this like this shady underworld don. And his father advises him. He says, you know, don't don't work for this guy. He seems shady. And Amitabh Bachchan just says, well, all businesses are shady, you know. And I thought that that line kind of reflected a very common sentiment of the earlier era, of the seventies particularly, that all businesses are shady. Okay? And if you look at the films in the nineteen nineties, you know, the Yash Chopra-Karan Johar films. Right? The heroes are fabulously wealthy. They run business, but they are also very virtuous and moral. They take such good care of their employees. You know, they're kind to their servants. They are very solicitous of the women and their family. You know, so there is like a 360 degree turn in how business people are morally portrayed or how their morality is being portrayed. That is really, really stunning. We don't have films anymore where they show businessmen like beating widows and children to extract a few pennies that, you know, though in nineteen fifties, we did have such films. Okay. So some of these changes are so striking. Okay? And you have to you have to have to admit that, you know, it reflects a very different mindset that has, bearing on what kind of economic policies the country as a whole is likely to pursue in these two different times. If you believe that, you know, businessmen are basically evil and, you know, they would, they would beat widows and children to pinch pennies out of them, then you're not gonna have very liberal economic policies. Okay? But if you make allowance for the fact that business people are just like other people, they may or may not be moral, then you are much more open to to liberal economic policies. --- ## [Interview] Forest Departments, Incentives and the Environment URL: https://indianliberals.in/primary-works/forest-departments-incentives-and-the-environment/ ### Body # Forest Departments, Incentives and the Environment Source: https://www.youtube.com/watch?v=FrOK1gu3-Cc Duration: 463.9s **Speaker** (00:05): The very idea. The very idea. And that this was also in a way, in a way, this was also the so-called rationale for the creation of forestry. The whole thing was that these are common lands not owned by any individuals. Forests are — is the common resource, common property resource. So if not regulated by state, it would lead to tragedy of commons, and we would lose if it is left, if the things are left on its own. The people would destroy it because no single person owns this land or owns forest. So it would — tragedy of commons would be. So unless and until we have a state authority which controls and manages this resource, this resource would be lost. That was the whole reason for creation of forestry. Now there is a very good article by Ridley, Ridley, Ridley. Ridley. Ridley. In fact, that is — although this was a commons, this is, this is a common area. It's a regulated commons because people are living there on the ground, and they know that who is extracting more and who is extracting, who is overusing, and who is underusing, so they can easily control. So a regulated common, well-regulated common can function sustainably for a very long time. Initially, they had all the rights over the resource. They could use it, and they could benefit if the resource is in good health. And they would have to pay a price if the resource is in the bad health. So they had all the incentive to preserve and regenerate and use it in a proper way. But once this — it becomes forest department properties, the tribals who are living there, other forest communities who are living in the midst of the forest, they lost all interest in protecting this forest, forest, because they won't get — in any case, they won't get anything that belong to the forest. So even outsiders started coming, destroying the forest. And most of the destruction of forest post-Independence — it was done by the forest department legally. They took down — I don't know whether you know or not. During sixties and seventies, large tracts of very productive multi-species forests were clearly removed, clear-felled. All trees were cut to create plantations, in plantations. That was the major assault on the forests of India, during which most of the forests were destroyed. These were destroyed by forest department, not the tribals. And — and so even forest department is an agency, government agency. So individual foresters, they don't have that that type of commitment, some in there, some exceptions apart. Generally, the people don't have that much stake. It belongs to the state, and it is open access. So hardly — most of the time, you find that forest officers are involved in illegal smuggling of wood, illegal cutting, encouraging cutting also. And — and at that time and at the same time, blaming tribals for the loss of forests. So they could get away, get away, get away with lots of things and blaming tribals for the same thing. That happens. On-the-ground priority. And that is what the Forest Rights Act is also — aims. Its overall philosophy is that if you give to the local communities the rights over the resource, that is why the ownership of not only minor forest produce, but also even of major forest produce matters. The very fact that you have — you have the right to manage the forest, and then it gives us strength. We have seen it. And their incentive to preserve, regenerate, recreate forest goes up like anything. And we have seen this with our own eyes. Once the Forest Rights Act came into being and people were confident that now all the rights are going to be recognized, not only individual rights, but community rights. And community rights have also been recognized. We immediately saw in our area. We are working with about thirty, fifty villages in that whole area. Everywhere Gram Sabhas became active, they informed our neighbors from Maharashtra and other places who were coming to cut the trees in their area that now the forest belong to us. And whole thing stopped. They also respected it. And the, the, the those, those who were coming, they also respected it. Now this belongs to the villagers, so now we cannot go and cut any tree without the permission of the local. But individuals within the forest, our in — yeah. Individuals within the villages, they also started respecting this. What happens is that this confidence, it all depends on whether the people have confidence that forest department will allow them to reap the benefits. First, preserving and regenerating forest is a long-term goal. You — you are not going to be able to see the forest regeneration within few years. Will take five years, ten years. And once if they regenerate the forest with all their efforts, after ten years, if they are not allowed to use, use the benefits of them, then — and when they lose this benefit, lose this confidence that they would be able to use it, they lost — they lose interest. Here we have seen that whenever individual forest rights, they are confident that now rights on agriculture are going to improve, they would start preserving the forest. Once they've done that is up, then then the rights are rejected. In the — even individual forest rights claims are rejected, and their enthusiasm to work for forest protection goes down. Stop doing it. No else. These all sorts of things happen. But once if you give them freedom and if you give them proper authority, then they are the people. And most of the enlightened foresters also recognize that without involving — involving local communities or without giving them the freedom to manage the forest in their own way, there is no way a government department can manage it immediately. That is very much very well known. So although this is counterintuitive, this is — it is one has to really see. We have seen in these villages where all the denuded hilltops, which were all denuded in just 1989, are now full thick thick with forests. They have regenerated forests without any major investment. No plantation, no other activity, just protection. The protection given by the villagers. Protection against harmful cutting and protection against forest fires. When the forest fires happen, they would go there and see to it that it does not spread. We take measures so that the forest fires do not occur. All these measures, they help a lot in regenerating forest. But one has — one needs to see these things with their own eyes. Normally, we can realize, realize that this is what happens. --- ## [Interview] Forest Rights Act, 2006 : The Struggle for Implementation - Part I URL: https://indianliberals.in/primary-works/forest-rights-act-2006-the-struggle-for-implementation-part-i/ ### Body # Forest Rights Act, 2006 : The Struggle for Implementation - Part I Source: https://www.youtube.com/watch?v=0mcSR2vAUBA Duration: 233.9s **Speaker** (00:05): As I said, this act recognizes two types of mainly two types of rights. One is individual rights on individual land for cultivation and for habitation. And there is a condition that the land should be occupied before 2005, December 2005. Another very important provision of this act is Gram Sabhas and people's rights on the forest resources. That includes rights on all minor forest produce. That is ownership. 100% ownership rights on all minor forest produces, including bamboo. And that is the first time the Forest Rights Act, because in the Indian Forest Act, bamboo was considered a tree. But in 2006, the Forest Rights Act considered bamboo as minor forest produce and not trees. And so it gives 100% ownership rights of bamboo and other minor forest produce to the Gram Sabha and the people. Another means other rights are rights of water, water waste, water produce, grazing, all sorts of these things. My my means and intellectual property rights also. But the most important right which is given in this act, is right to manage, to use sustainably and to manage their — and not only that, people, means they are interested to prepare a management plan of their forest. That would be and that should be included in the forest department's working plan. And I think that is the most important provision for our right recognizing this act. And so what happened that as I said, Gram Sabha was interested to initiate the process, to invite the claims, to record the claimants' evidences or to verify them, to go for a field verification and to write down whatever was there and not means and after all these verification, verification of the field and of the record, then they will have to come to a conclusion that whether he or she was cultivating this land or having means she he or she was occupying this land for cultivation or for habitation before 2005 or not. And if yes, how much? So in that sense, Gram Sabha's task and Gram Sabha's responsibility was too much. And as you know, in tribal areas, most of the people are either semi literate or many of them are illiterate. And so the it was a very big task, big responsibility on the heirs of the Gram Sabha. There is a provision in the act to that the Gram Sabha would form a forest rights committee amongst from amongst the members of the Gram Sabha. And the forest rights committee would carry out all this work on behalf of the Gram Sabha. --- ## [Interview] Forest Rights Act, 2006: The Struggle for Implementation - Part II URL: https://indianliberals.in/primary-works/forest-rights-act-2006-the-struggle-for-implementation-part-ii/ ### Body # Forest Rights Act, 2006: The Struggle for Implementation - Part II Source: https://www.youtube.com/watch?v=g9k9zmFRn9w Duration: 445.8s **Speaker** (00:05): The first and foremost challenge before us when we started the implementation, we started helping them in the implementation. The first and foremost challenge was how these gram sabhas would carry out all these responsibilities. Not only that, they didn't know all these things. They knew who was cultivating or who was occupying the land, where from when, but the question was to put it down on the paper, formally write it down. And so we had lots of meetings with the people, not only in our organizational villages, but across Gujarat, 12 districts, tribal districts. And we with the help of our payments, our interaction with the people, we formulated some of the model forms. How do means how when they go for field verification, what to know, what to write down. We didn't know that what would prove that this land was before 2005 or more. But the people knew that what types of signs and signals would show this thing. So all these things were put down in the Panchnama and Rojkam and means in Gujarat, we call it Rojkam when we go for field verification. They have to write down all these things formally. Means this thing. So and the people, we were so means, we still cannot believe that people put in so much efforts to do all these things, and we are witness to that that this FRC persons, presidents, means the chairperson, and the secretaries, and other members, they did a lot of work during this time. Because the first thing that and in the gram sabhas also more unlike the gram sabhas, which the panchayat gram sabhas, which are means being held. Most of the people remain present in this gram sabhas because it was their work. It was their land, which was the agenda. And so these people carried out all these things. Problem was another at that time, we were thinking that this is the only problem. But no. We also had some inkling that and we used to tell the people also that we have to prepare such type of claims, claim files that even if the forest department or the government wanted to reject them, they could not. So they prepared the files, the claim files in such a way that we believe, and people also believe that this would be of course, all the evidences are there, everything, every procedural. I mean, they had followed all the procedures, and evidences were there. And so their their claims are going to be approved. But, no, that was not the case. And after one year, one, two years, we found out that the government the forest departments was so against this. And so because of the forest department's interference another thing is that even the forest department is the forest department's representative is only one member of the subdivisional level committee and the district level committee. These are the committees which are which have to examine whatever the resolution the Gram Sabha passes. So after the Gram Sabha submitted their claims with the resolution to the sub regional level committee, what it did in most of the in I should I I could say in Gujarat, that was the norm, and I could also say that that have this happened in all over India. That these files, these claims files were sent to the forest department for verification. And the forest department approved only one 10% or so and with reduced area and sentiment. And the sub divisional level committee and the district level committees, they just passed. They just approved whatever the forest department approved. And so after one or two years, most of the claims in Gujarat were rejected. I should I I I can say the in Gujarat, one lakh 82,000 claims were filed in all the tribal districts. From this one lakh 82,000 claims, only 30,000 claims were approved, and one lakh 20,000 claims were rejected without giving any reasons. Reason approved. Because reason was this that you they gave of course, they gave the reasons, but they were all wrong reasons. Say for example, in Narmada, there were 17,000 claims, and only one reason that was given was because of the lack of the evidences, which was not true. So these were the hurdles which we encountered, and then we had to go to the High Court, Gujarat High Court. Gujarat High Court gave a very good landmark judgment in this, And and that means the government had to re Sorry. Government had to renew reopen all the rejected claims. And so after 2013, all the claims were reviewed in all the districts, 90,000. So from 30,000 to 90,000 claims are is approved till now. But it's not it is also not not enough and not correct. So we are still trying. So after twelve years of implementation, we are at this stage. And because mainly because one thing, forest department's total opposition. Another thing is general administration and the government's apathy and carelessness, just carelessness. --- ## [Interview] How I Stopped Worrying and Learned to Love the Trade Deficit | Sudha Shenoy URL: https://indianliberals.in/primary-works/how-i-stopped-worrying-and-learned-to-love-the-trade-deficit-sudha-shenoy/ ### Body # How I Stopped Worrying and Learned to Love the Trade Deficit | Sudha Shenoy Source: https://www.youtube.com/watch?v=iQgsvzJaBD8 Duration: 2641.9s **Interviewer** (00:00): Okay, let's get started here this afternoon for our special lecture with Doctor Sudha Shenoy. I'd like to begin by of course reminding everybody that the imperialism conference starts tomorrow here at the institute. We'll be broadcasting on the Internet starting at 01:30 Central Time. Professor Shenoy is an honorary associate at the University of Newcastle in Australia. She is an adjunct faculty member at the Mises Institute and a research associate with the European Center for Austrian Economics. She is the author of India, Progress or Poverty, Underdevelopment and Economic Growth and the editor of A Tiger by the Tail: The Keynesian Legacy of Inflation. Her topic today is How I Stopped Worrying and Learned to Love the Trade Deficit. And for your further information, we have an interview, an in-depth interview with Doctor Shenoy on mises.org called The Global Perspective, which I encourage you all to take a look at. Professor, thank you. **Sudha Shenoy** (01:12): Thank you, Mark. Rather small group here. Think we can all ask questions at any point if anything strikes you. Okay. What happened originally, which got me started looking into this particular topic, is actually back in 1992, the Smith Centre at Hayward College asked me to talk about something and I started — at that time, everybody was hugely worried about the Japanese capital inflow and so on and so forth. So I started looking and discovered that the U.S. had turned around from capital surplus, capital exporting, to capital importing, roughly around about 1980, 1983. And at that time, of course, it was only nine years into the changeover or whatever, no one was worried, no jumping up and down, sky was not falling or anything of the sort. 2006 now and the sky is falling. Sky is falling, we've got this huge U.S. trade deficit, we've got all these huge sums of money flowing in. Stiglitz, a Nobel Prize winner, believe, no less, tells us that the world financial system can't put up with all this money flowing into the U.S., etc, etc. The reason for the inflows — rise in U.S. consumption, your Puritan heritage coming in, you know, you mustn't consume too much, it's not good for you, etc. Everybody is now concerned. Okay, so as I said I started looking into this and I started looking at it from the historian's perspective. We have had some sort of change occurring in the US balance of payments, which is an historical phenomenon. The question is when it started and the reasons. Now, I've already given away one part of the secret, the one part being of course that it did not start three months ago, six months ago, even eight years ago. 1980 is when we started with the change in the trade figures. And is that quite clear? Yes. 1983 was when we changed round to capital importing. Now, a point which even economists forget, the trade balance is not the current account balance. The current account balance includes income from abroad or income paid abroad. It also includes unilateral transfers and it includes services. For some countries the invisibles as they are called are much more important than the visibles, the things that go chunk when you drop them. Okay, so 1980 we find that the US balance of trade has turned. We are in deficit. But the current account is still in surplus. And it's in surplus because of the other items which I mentioned, the invisibles. 1983 is when you get a complete turnaround. And of course, what's been happening is that you have a rise now in the trade deficit and therefore, obviously, in due course, get a current account deficit and therefore, net capital inflows. Okay, now that is lesson number two, which I keep trying to hammer into my students. And that is that you have a balance of payments, you do not have a simple balance of trade, you do not even have a simple current account balance. You always have capital and current account together. So it's always the balance of payments overall which gives you a complete picture as to what is happening, what is not happening and so on. Okay, so our turning point is 1983. In other words, if we're going to explain the trade deficit, our explanation must begin in 1980. It's no use saying that housing prices started rising in 1992. The trade deficit began in 1983. And similarly, it's no use saying U.S. consumption started rising in 1995 because you've got capital inflows since 1983 on net. And so the explanation has to start then. You may have later changes occurring, later influences, which replace your original, but that is when your explanation has to start. Okay, the other point which I then decided to have a look at because one hears so much about rising US consumption causing problems, etc. I hadn't done this before, so I thought I'm bound to find that US imports, huge rise in consumer goods imports, decline in capital goods imports, because we're all consuming too much. Okay. The composition of US imports I found has remained unchanged, broadly unchanged, since 1951. For fifty years or more, you have had no change in basic composition of US imports. As you can see, broadly speaking, you always had production goods, capital goods, industrial inputs, one sort or another. The bulk of your imports, two thirds or more, and roughly a third, or less than a third, of consumer goods imports. Okay, so for fifty five years approximately, fifty one, whatever, however many years you want to take it, there's been no change. Okay, so in other words, just by looking at the composition of US imports you would not know that all these dreadful things have been happening, capital imports and all the rest of it. One caveat, and that is of course over this period of fifty odd years, half a century, you've had obvious changes in the standard industrial classification. And so therefore, the categories, the definitions and things have changed. However, if you look at the very broad categories that there are, you can broadly identify the industrial inputs. Rotary drills are clearly not consumer goods. Most furniture is likely to be a consumer good, but of course some furniture could be going into restaurants or hotels or offices or whatever. Okay, so the composition of imports hasn't changed despite all the fuss and feathers about rising U.S. consumption. We'll come back to that question later. Okay, next point is the rise in consumption therefore obviously fall in capital formation. Rising consumption, fall in GFCF. We're all economists here, gross fixed capital formation. Correct? Okay, so I thought I'd have a look at what is happening in the US and incidentally other countries as well. And what do I find? Virtually no change in the U.S. GFCF and that goes back to 1970. And that is partly because, well that is because I looked at the OECD figures. Again on the grounds that if you're looking at more than one country an intergovernmental organization goes around homogenizing the national figures you hope and therefore I use the OECD figures. Right. Okay, now there's been a slight decline in the U.S. GFCF, but again by looking at the U.S. GFCF figures, capital formation figures, going back to 1970, which is what, thirty six years now, you would not know that there was anything drastic happening at all. Okay, now I'm anticipating here because the figures are up there already. The anticipation is simply that in Western Europe, which is where most of your capital comes from, in Western Europe you find that the capital formation figures have been declining and in more recent years from the 1990s onwards they have come more or less close to the U.S. figures. Now the odd years up there, UK 1970–79, Germany 1973, etcetera, is because when you look at the figures for each country individually, the decline begins in different years. The periodization is different and obviously that is because the circumstances for various countries are different. Okay, so as you can see they all started up above the US and now they're all come down to pretty close to the U.S. And again, I'll anticipate and say that we know that U.S. household savings figures have been falling. And what the OECD have found at least from 1988 onwards is that you also had declining household savings in Western Europe. But these figures, Western European savings figures for most countries, are still above the U.S. figures. So that prima facie, you have savings in one country, investment in another. Savings being made, looking for investment opportunities as it happens crossing a political boundary, therefore showing up in balance of payments figures. That's not the complete story because some countries have very low household savings figures and in Western Europe and they still invest here in the US and some of them are even lower than the US. So it's not the complete story. The other point is that I found that alone of all the figures that you could look up, the household savings figures were all over the shop. For the same three years in succession OECD tell me that the US household savings figure was 7%. I look at the U.S. statistical abstract, one year it says 4%, another year it says 4.5%, the third year when I look up it says 3.5% or whatever. And so when you look at the U.S. statistical abstract, alone of all the statistical runs you can look at, these figures are all over the shop. And so therefore I'm a bit wary about household savings figures anyway, just as a warning. Okay, so now we have at least part of the story. Part of the story being that you have savings in Western Europe looking for investment outlets, finding those in the US. All right, now one point I would like to stress and that is we have two separate chains of causation operating here. There is no necessary link between capital imports and savings, rising consumption. If there were no savings abroad, if there were no investment opportunities in the US preferable to others, you would not have a capital imports coming in. So that is a separate causation. Without the capital imports supposing you stop saving in the US, all that would happen is that you would eat up your capital stock, end of story. As it happens, this is circumstantial, not necessary, as it happens there are investment opportunities here or appearing here and therefore you've drawn in savings from Western Europe. Okay, the other point about the dates that we are looking at, that is from the 1983, 'eighties onwards, that is when you also start getting the end of increased capital formation, you might say, in Western Europe, therefore savings and therefore investment in other countries. Okay, now that is the main thing. If we now analyze further the capital, as we all know, we have foreign direct investment. We have FDI and we also have portfolio investment, investment in stocks and shares. And the FDI, when you look it up for the US, it's the same countries, the same firms virtually, and virtually the same lines of production for the last one hundred and thirty years. The same Philips and others who invested here one hundred and thirty years ago are still continuing to invest here. And that's the foreign direct investment. However, you've also got a large number of European countries who have foreign direct investments in the US. And some countries which appear to be slightly odd if I can remember them. If I can find my notes, disorganised as I usually am. Okay. Here we go. The UK, Netherlands and Switzerland have always been investors here. But in the last forty four years since between 1960 and 2004, you added in Spain, Austria, Norway, Ireland, Denmark, Finland. Finland which has a household savings ratio of virtually zero, if the OECD are to be believed. You also got a whole heap of little smaller countries now investing in the US, including Australia, as well as Israel and the Cayman Islands which is obviously pulling in money from who knows where. Okay, now the other change which has occurred and that has occurred in both directions, into the U.S. and out of the U.S., is the rise in portfolio investments. Again since 1980, we find that the U.S. investment abroad for some reason 1990 it dropped and then it shot up again. Whatever. I mean, main point is that portfolio investment has always been part of the total. The particular point about investment in the U.S. is that it's become an increasing part of the whole. And I read somewhere and I was unable to find the reference afterwards that apparently Wall Street waits every month with fingers crossed for the European portfolio investors to arrive to keep the stock market going. It's a fairly important part of U.S. stock market investment. Okay. Now so much for all that. When I put this up initially on the web as part of the blog I do with Liberty and Power, libertarian historians, I got a number of responses, a number of responses which I'll come to later on because I've just looked at my notes here and what I've forgotten is the US government. So far we've been looking at, I forgot to say again, should have stressed, we've been looking simply at private investments, private flows, goods and services, capital, what have you, the private sector. The US balance of payments figures in that respect are very neat. You can neatly separate out private from government transactions. Most cases, it's fairly clear and therefore you can sort out the honest from the dishonest transactions. Okay, now with the US government, what you find is the equivalent, if you're looking at the numbers, find the equivalent of a bull in a China shop. Figures are proceeding as it were as usual, no great changes, then all of a sudden whammy, something happens to capital inflows or somewhere else and then the dust settles and you carry on as usual. Okay, now so far as the U.S. government is concerned, I think it is proper to say, I think we would all agree, that what we have is a very clear case of capital being borrowed to finance current consumption. I had a quick look at the U.S. budget and I was unable to find anything which looked like capital investment. I'm sure there is, but I didn't have the time to invest in looking for investment. So far as I could see, the whole shebang was nothing but consumption. Okay. Now I don't seem to put up — any put together any tables for the U.S. government capital flow, I'll come back to that later. What I can tell you is is a government capital inflows are a rising proportion of the total. 1980–85 roughly 16% of total capital inflows were government borrowings abroad. By the time you get to February, which is the latest figures that I've got, it is something like 36% of the whole. And between 1980, '85 and February, private capital inflows have risen just under nine times, roughly nine times. Government capital inflows have risen 24 times. And again what you find is that particular years you find the things concentrated, the capital coming in. Okay, now at this point I'm going to again knock one of the criticisms that I had on the head. I want to make it quite clear that the US government only borrows from other governments, presumably those that can bully or otherwise want to hold US dollars for God knows what reason. What you find is that all the capital inflows are on the official side of the ledger. Can look at the figures. They're all official capital inflows. You do have some sales of treasury securities to private investors, but they're very small. They're less than one half of 1%. They're about one half of 1% of total private investment, and they're not a very large proportion of US government finances anyway. So basically it's US government borrowing from other foreign governments, those governments holding US government securities. So one of my critics said in capital letters, you know, this is going to cause real problems because it's not private investors but a few governments are going to make these decisions. And the short answer is in that case that the governments are going to suffer. Everyone else sensibly has refused to buy US government securities. So if the central banks or governments want to do stupid things, so be it. Okay, now again I'll pick up some of the other points. Yes, one of the points which came up more than once was that the composition of US imports, which we've just looked at mostly production goods, minority consumer goods. One objection which was raised was that the US production of capital goods has been falling, US production of consumer goods has been rising and therefore you have capital imports replacing domestic production. Reply number one, I mean that cannot have been happening for fifty five years. So you have to explain at what point something happened in the changeover or whatever happened. What happened before and what happened afterwards. Point number two is that capital formation rates have remained constant in the US. And therefore, you cannot say. Obviously domestic production has also remained constant. And the two together, imports having remained constant over the years means domestic production of capital goods has remained constant and that's why your capital formation figures have remained constant. The proportion has remained constant. The other thing is, let me point out, that the people who raised these objections were all economists. Economists are supposed to be numerate and these historians are supposed to be innumerate. Not one of these people looked up the US figures to tell me this is what actually happened to capital goods production and this is what actually happened to consumer goods production. They just, you know, waved their hands in the air and said, you know, this is what's happening. Historians couldn't get away with that. They would be asked to produce the evidence. In other words, the figures. Okay. Now another point which I would like to raise and which I think is fairly important, again related to the inflow of capital and the fact that it is a separate thing from the U.S. rise in U.S. consumption. The point I want to stress is that we do not have a knee jerk relationship between rising U.S. consumption in the capital. It's definitely a case of people looking for investment opportunities and therefore you must remember they are two separate things. Again, sort of footnote in case I hadn't mentioned it earlier. Alright, okay. Now, what else? Two more points, again, people talking again without looking at the numbers which are easily available if they're prepared to look for them. Standard point which is constantly raised: certain reasons why the US trade deficit is being pushed upwards. That is demand for US dollars for various purposes. Okay, here we go. I'll put that up as well. For some we have figures, for some we don't. Official demand for U.S. dollars. Governments want to hold U.S. dollars as a reserve currency and therefore there is pushing up the trade deficit. Again, bearing in mind that the trade deficit began in 1983 and that was not when the U.S. started selling securities abroad, it was much later. We have a look at the numbers there, just bear those in mind for later reference. The other reason we are told why there is a demand for U.S. dollars, OPEC. OPEC insists on being paid in U.S. dollars, God bless them, and therefore there is demand. People want to buy U.S. dollars. So all right, here we have the OPEC, all OPEC oil exports for what year, whatever the year is, 2003, that is the last year I could get information. And that OPEC figure is off the official OPEC website. So it has to be accurate. The official demand for US dollars is the same thing as official capital inflow into the US. Okay? Three other sources of demand for US dollars, which there are no estimates that anyone has made that I know of, illegal narcotics, financing of international transactions, and people who want to hold dollars as a store of value. Now for those three, if they are going to affect the US deficit, they must bear some sort of relationship to the components of the US balance of payments. In other words, they must be somewhere close to those figures. If they're not close to the components of the US balance of payments, you can't say that they're having any real influence on the trade deficit. Alright, we now have gone to have a look at some of these components and see what happens. Again, I am separating the private sector from the government sector on the grounds that government in any case is law unto itself. Okay, components of the U.S. balance of payments, private sector only. Exports of goods and services for the same year, 2003, well over a million million dollars, and it's a trillion dollars. And I put it there as demand for US dollars, that is exporters must be paid in US dollars, therefore you need US dollars for that. Income from abroad, because that is converted into US dollars by US residents. And capital inflow, foreign investors need dollars to invest in this country. Alright, you add all of those up, there's also demand for US dollars. It's almost five times the official capital inflow and 4.7 times OPEC oil exports. So that if OPEC oil and the official demand for US dollars are driving up the US deficit, why are the other components that much bigger? Right, the other side, supply of US dollars to supply the illegal narcotics trade etc, all these people who want to hold US dollars. Here we go. Imports of goods and services. Importers have to be paid in their own currencies. You can't use US dollars in France. Income which is sent abroad from the US, foreigners have to be paid in their own currencies. If you're investing abroad you have to invest in foreign currencies. So these are the supply of US dollars and therefore demand for foreign currencies and therefore supply for illegal narcotics blah blah blah. Okay, they add up to more than five times the capital inflow, U.S. official demand for dollars, more than five times again OPEC demand for dollars. And so therefore, I would say that neither OPEC nor official demand for dollars are a huge explanation of the US trade deficit. Figures aren't big enough. And so far as the other items are concerned for which we have no estimates of any sort, they would have to come close to at least somewhere near these components if they're going to have any influence. In fact, where these things do show up is in the errors and omissions segment of the balance of payments. That's where the illegal payments all show up. I haven't looked into that again, what's been happening to errors and omissions. But if someone wanted to do that, suspect that that's where they find the evidence for these non quantified and non quantifiable demands for U.S. dollars. Okay, again someone made a virtue out of the borrowing by foreign governments or lending by foreign governments to the US government. The argument being that the rate of return on government securities is very low. And therefore, you have a contribution to net inflow of income into the US on current account. You pay out less to foreign governments but you do have more coming in from abroad and therefore you have net inflow of income into the US. Alright, again we have a look at the numbers. Economists don't look at numbers, historians do. Okay, 2002 this time, sorry. 2002, no, should be 2000 no, this is 2002, 2024. Sorry, it's a separate set of calculations that I did for this. Alright, if you have a look at government income payments out and you have a look at private income in, private income out, same thing for the ten odd years or eleven odd years 1991, 2001. In all cases you find that the private flows swamp government flows. So it's the other way about. It's the earnings abroad on US investments plus the fact that the payments out on foreign investments in the US is still not very high or relatively high, that sustains that gap which brings a net income into the US. Private income in, which would pay for the government income out, is about almost four times. Private income out, which also requires foreign exchange, is almost three times. So whichever way you look at it, the private flows swamp government flows. And so the fact that the US government pays a low rate of interest on its securities abroad is neither here nor there. It's between the two governments concerned, another example of government stupidity on both sides. Right, okay, I think I've covered all the points that were raised against me. Yes, there we go. I pointed out that there cannot be any reserve demand for US dollars. That is itself a misnomer. It's a misnomer because we've had floating exchange rates since 1973. You don't need reserves. However, we do have some governments holding US dollars for various reasons. One is the Chinese government. The Chinese government does this because it wants to prevent the yuan from rising. And by preventing the yuan from rising, what it's doing is cutting the real wages of some of the poorest workers in the world, the Chinese workers. The other large holder of US dollars is the Japanese government. The Japanese government has been doing this again stupidly trying to prevent the yen from rising against the US dollar. Know, finger in the dike virtually trying to stop it from breaking. And we can see with what success. Here we go. The Japanese government has managed to prevent the yen from rising despite holding all those large quantities of US dollars buying foreign exchange to prevent the yen from rising down to about less than half in the space of a rise of double against the US dollar in the space of about twenty four years. It's again whistling in the wind. And those are your OECD figures again, so again reasonably homogenized and reliable. Right, okay, now I think I've managed to deal with all the points that I generally made in relation to, oh yes, now hang on, the East Asians and the Chinese, yes, the cunning foreigners as always. Alright, I'll do it from memory. No, here we are, I have got it here. Now, the Chinese. Again, I want to make a point here. First of all, if you go back and read the Guardian article and if you read other articles, Chinese are supposed to be sinister, baleful, blah, what have you. Okay, 2004. China supplies somewhat over 13% of US imports of goods. In other words, the rest of the world supplies 87% of US imports. Okay, the change in sources of imports, 1965 to say 2004, decrease in the developed countries share, increase in the share of East and Southeast Asia. And that is South Korea, Hong Kong, Taiwan, Philippines, Vietnam, Indonesia, Singapore, Malaysia and Thailand. The reason for this is simply industrialization in these areas. Industrialization in these areas therefore production of good quality but cheaper manufactured goods of all sorts. South Korea is in fact the world's number one supplier for a range of electronics goods and therefore since they supply the world they also happen to supply the US. And I don't know if anyone wants to guess how important the U.S. is as a market to China. Know, all these jumping up and down and sky is falling and all that. Do we in the U.S. take perhaps 50% of Chinese exports? 60%? 21%. The rest of the world takes another whatever it is 87%, 88, 89%. And a good proportion in fact goes to other parts of Southeast Asia, Japan, Taiwan, Hong Kong, So it's circulating within the countries which are already themselves industrializing. Okay, and I must repeat again perhaps ad nauseam and that is that the Chinese have not developed on the basis of the U.S. trade deficit as some people have suggested. Nor have they developed on the basis of US investments, they have developed on the basis of overseas Chinese investments. Huge investments from Taiwan and from Hong Kong. In fact the sociologists have discovered the Taiwanese businessmen go across to China to supervise their investments, see how things are going and Chinese style is set up concubines there. And wife number one in Taiwan discovers what's going on and you can imagine divorce courts are very busy. Okay. Alright, now the other point I want to, I should have perhaps mentioned with regard to this notion of a reserve currency, etcetera, and all that. World currency markets operate twenty four hours a day and a little over five days a week. Sydney's opening time to San Francisco's closing time is your trading period which is twenty four hours a day except for a Friday evening in San Francisco to Monday morning in Sydney. If you're doing internet banking you can do it twenty four hours, seven days a week. And so therefore any idea that you could have even dirty floats is I think simply impossible. What you do do is central banks losing large quantities of money by pretending to influence exchange rates. And 1973, the fixed exchange rate system collapsed, the Bretton Woods system collapsed. That was exactly the Asian crisis of 1997–98 or whatever the year was. Southeast Asian governments for some reason wanted to have fixed exchange rates against the dollar and of course the whole thing went bank in the space of a very short period of time. Okay, I think I've covered more or less all the points that were raised either I raised or were raised by people who wrote in criticism including as I said one economist Brad Setser in some financial blog or the other. Amongst other things he accused me of misusing statistics without bothering to use any statistics himself, that's by the way. Right, okay. Any questions, please? **Interviewer** (40:36): Yes. Without all that stupid central bank intervention, particularly on the part of the Japanese and the Chinese, what would you expect to happen to the value of our dollar and trade patterns in general? **Sudha Shenoy** (40:55): Would expect — the U.S. dollar has risen and has fallen and has risen and fallen over the years. I would expect simply to continue to rise and fall according to whatever changes and circumstances there are. I mean the same thing has happened to other countries including for example the Australian dollar. At one time it was worth almost 2 American dollars. Now it's down to about 75–80 cents US. And at one time the US dollar was plunging heavily against all other currencies. And since then it's been rising. It's like any other price. I mean what happens to a price if there is no intervention? Prices change according to whatever the circumstances are. The price of the US dollar is simply price of foreign exchange. The US dollar price of foreign exchange. So, you know, it's pretty much what's happening now anyway. As I said, the quantities that are flowing through exchange markets, the forward foreign exchange markets, it is in fact now very much a market price. And the yuan and the yen, yen important though it might be, it's still only one of a number of other currencies. Mean the Japanese government has not been able to hold the yen down. And they won't be able to hold the yuan down either. There's already a black market in the yuan. So once you start getting black markets and currencies, you're on the way to something happening. Yes. I imagine it's U.S. dollar government securities. I think when you trace back these official capital inflows into the US, they are probably going to be not only Japan and China, but various other Southeast Asian countries apparently governments have also been holding U.S. dollar government securities. The Japanese government's holdings are partly because of the attempt to keep the yen down. So they've had to buy in huge quantities of U.S. dollars, which would include obviously commercial bank deposits. But presumably, would exchange those for U.S. government securities of one sort or another. However, again, of these US commentators bothered to read anything outside the US. The Asia Times has been saying for weeks now, months now, that various East Asian governments have been quietly getting out of the US dollar including the Bank of China. It's all of course hidden behind all these official figures. --- ## [Interview] IL Explainer - Ep 2 | Sultana's Dream by Begum Rokeya URL: https://indianliberals.in/primary-works/il-explainer-ep-2-begum-rokeya/ ### Body # IL Explainer - Ep 2 | Sultana's Dream by Begum Rokeya Source: https://www.youtube.com/watch?v=7eGt-oaFcvU Duration: 163.8s **Narrator** (00:01): Begum Rokeya is a popular name in feminist circles. She was a liberal, a thinker, an educator, and an author. Among her most popular works is Sultana's Dream. This is a feminist utopian novel that talks of a world called Ladyland. Now Ladyland is a place free from seclusion of women and purdah. It's a place free from the domination of men over women, and it's also a place that is filled with virtue. It's a place where women roam free and have a say in their social affairs. The literary brilliance of this text, however, is rooted in its unconvinced protagonist, Sultana, who must then be convinced that seclusion of women from their own social affairs is an absurdity. When the confused protagonist is told that in Ladyland men are kept indoors and women roam free, she's perplexed and she almost interprets this as a joke. She laughs at the absurdity of locking men indoors, an idea that was more than normalized for women at the time. Sultana's guide to Ladyland then urges her to think about how unfair it was to lock harmless women indoors. To which Sultana, her response, we are nat— we have a naturally weak sex. It's nothing but natural for us to be locked indoors. This was also reflective of women's social conditioning at the time and the internalization of patriarchal seclusion. After some back and forth, the guide gets Sultana to question whether it's fair to cage social deviance or to cage the victims of social deviance. The guide then says, as a matter of fact, in your country, this very thing is done. That is, caging victims of social deviance is what is done in your country. Men who do or are at least capable of doing harm to women roam free while innocent women are locked up. The guide then says, we have no hand or voice in the management of our own social affairs. In India, man is lord and master. He has taken to himself all powers and privileges and shut up women. Begum Rokeya's Sultana's Dream was published in 1905, a decade before American author and feminist Charlotte Gilman's Herland, a similar utopian text that talks about a world where women are in power or are in charge, and it's a world free of dominance, conflict, and war. --- ## [Interview] IL Explainer - Ep 3 | Streer Potro by Rabindranath Tagore URL: https://indianliberals.in/primary-works/il-explainer-ep-3-streer-potro-tagore/ ### Body # IL Explainer - Ep 3 | Streer Potro by Rabindranath Tagore Source: https://www.youtube.com/watch?v=vg9gKnFIY-U Duration: 410.5s **Speaker 1** (00:00): Today, we'll be discussing Streer Potro, the wife's letter, by Rabindranath Tagore. It's a 1914 epistolary, and Tagore is, as we know, he's a poet, thinker, writer, and, of course, an Indian liberal. And and it's very interesting to me that she's she just treated like an unpaid servant. She's not, and especially because she is a relative of the sister-in-law, she's not directly related to them. She's, you know, she's she's just an outsider who's seeking refuge, and she, and a widowed young widow at that. And she, you know, it's it's really poor treatment for her. And then Mrinal grows fond of her. She tries to stand up for her. But, eventually, nothing's come, nothing comes of that that as well. She's just married off to to an unstable violent man. When she, when she runs away from that, she, you know, she's again, she's the one who's seen shown in poor light for running away from from. And eventually, she succumbs, and she, you know, she commits suicide, and Mrinal is not able to stand up for her, save her despite her desperate attempts. I think I think that brings us to something very interesting. This was written in 1914, so widow remarriage was a legal right for a few decades now. But despite that legal right existing, **Speaker 2** (04:09): in front of the vast ocean, and she's talking about freedom. She writes the letter to her husband, and that's the treatment of the story. Right? It's in the form of the letter that Mrinal writes to her husband. And the way she that she mentions that, you know, she just wants to be herself. She does not want to be identified as a mother, as a wife, as a sister. She just wants to be herself, and, you know, writing poetry or expressing herself through words is not done in, you know, confined space where she's not hiding that poetry or that, you know, that that form of expression anymore. And and and I think she mentions it also in the story that she, you know, mentions it to her husband saying that you never realize that I write poetry. It was a well hidden fact from you. And when that fact was hidden, it was also my identity that I was, you know, hiding away from you. So even though she stood up for Bindu from time to time, even when Bindu's own sister did, she not, was lacking in her personal life where she was not treated as an equal an equal --- ## [Interview] IL Explainer - Ep 4 | Socialism Reconsidered by Minoo Masani URL: https://indianliberals.in/primary-works/il-explainer-ep-4-socialism-reconsidered-by-minoo-masani/ ### Body # IL Explainer - Ep 4 | Socialism Reconsidered by Minoo Masani Source: https://www.youtube.com/watch?v=sHWzp2Z0ONA Duration: 277.6s **Narrator** (00:00): Today, we'll be discussing Socialism Reconsidered. This is a 1944 essay by Minoo Masani. Minoo Masani was an Indian parliamentarian, a public intellectual, and, of course, an Indian leader. In Socialism Reconsidered, Masani included, there were at least four assumptions of Marxist socialism that required reconsideration. The first among these was the assumption that argued that the abolition of private property and its nationalization would automatically lead to a society with economic democracy and a classless and and would lead to a classless society. Now Masani spoke of this assumption in the context of Russia where where despite Marxist socialism, we weren't able to arrive at a classless society. Now if we want to consider this in the Indian context, in a society where caste, caste, class, gender based, their equalities are so deep seated, to think of a society which is which lacks private property and has absolute nationalization, it's it's very difficult for marginalized and vulnerable groups that lack political bargaining power to to to achieve socioeconomic mobility. The second Marxist assumption that Masani suggested, he did while viewing, assumed that the dictatorship of the proletariat was is a possible and indeed a necessary transition state to socialism. The theory was that having served its purpose, the dictatorship would evaporate and indeed as Lenin following Engels put it, the state will then wither away. Now, Masani spoke of this assumption in the context of Russia. He said the state was far from withering away. In fact, the stranglehold of the state on individual liberty had increased. Let's look at this assumption in the context of India or let's generalize it further and think about it in the context of the incentives that get created in a society where the state is so greatly empowered. In a society where state holds great power to this extent, there do not exist incentives to for there to be a change in structure for the power to shift from the governing to the One assumption that Masani suggested that it required reviewing was one that argued that socialism could be achieved by appealing to the collective selflessness of the working class and its collective hatred for the property owning classes. Now, unfortunately, Masani said that this this appeal to the collective selflessness of the working class often leads to them becoming them becoming party to the injustice that they were essentially arguing against. Now he he explains this in the context of Britain when the collective working class was empowered through the Labour Party and was given a small share of the profits of the empire, the Labour Party then eventually ended up becoming a perpetuator of the same imperialism that it was, you know, that it was trying to oppose. Now if you were to think of this in a more abstract sense, in a society where you try to counter the flaws or gaps in the in the system by becoming, you know, part of the system and so deeply such a deeply seated part of the same system, then you end up perpetuating the gaps or the flaws of the system. Now the fourth assumption that Masani outlined before I I jump into the fourth assumption, I must tell you that Masani himself held socialist belief till the light late nineteen thirties, shortly before this this essay was written. And he then suggested that the fourth assumption of socialism was that it is the only alternative to capitalism or existing gaps in capitalism. Now he he he said that this might be a might be an unfair assumption to say the least because there must exist a system that is better. One and Masani, in fact, was among the the early proponents of mixed economy. Now whether or not the mixed economy that India eventually ended up having was the one that Masani envisioned is is is up for debate, but he was definitely among the first proponents of a mixed economy. --- ## [Interview] IL Explainer - Ep 5 | Free Enterprise and Freedom URL: https://indianliberals.in/primary-works/il-explainer-ep-5-free-enterprise-and-freedom/ ### Body # IL Explainer - Ep 5 | Free Enterprise and Freedom Source: https://www.youtube.com/watch?v=DOqQV3_qb3M Duration: 177.4s **Murarji Vaidya** (00:01): Today, I'll be discussing freedom and free enterprise. This is a 1956 essay by Murarji Vaidya. The essay begins by talking about the second five year plan of India. Now as per the Planning Commission, the second five year plan, what is the main objectives of the second five year plan was reducing income and wealth inequalities and improving the redistribution of economic power. Now with this, their business owners or industrialists or they're politicians and bureaucrats. Now exploited by the few. It will simply shift from business owners and industrialists to, call it, those with political power, that is politicians and civil servants. Now however, with such concentration of both political and economic power, India might risk its individual liberty and democracy. --- ## [Interview] IL Explainer - Ep 1 | Economic Growth with Social Justice by B.R. Shenoy URL: https://indianliberals.in/primary-works/il-explainer-ep1-br-shenoy/ ### Body # IL Explainer - Ep 1 | Economic Growth with Social Justice by B.R. Shenoy Source: https://www.youtube.com/watch?v=3hCLozngwE8 Duration: 157.7s **Narrator** (00:00): In a 1977 paper titled Economic Growth with Social Justice, B. R. Shenoy, an Indian liberal and economist, spoke about the relationship between consumer sovereignty, economic freedoms, and social justice. In this video, I'll take a deeper look at what he meant by the relationship between consumer sovereignty and social justice. Shenoy argued that in truly free societies, citizens or consumers control economic affairs. All economic affairs of a free ir own. Then do that we have make goods and services in an economy, and then in turn the prices define the direction of the economy. Now but what exactly is meant by consumer sovereignty? Consumer sovereignty as an economic concept argues that consumers have some power over the goods and services that are produced in an economy. This also means that consumers are the best judge of their own welfare in an economy. Now an economy that is focused on the individual on individual consumer can be better understood by what it's not. Shenoy did this by talking about the consumer in a communist society. In his paper, he wrote, in a communist society, the state determines the needs of consumers, arranges the distribution of goods and services, and allocates resources among alternative uses. Individuals do not enjoy fundamental economic rights, and forward markets do not exist. What did Shenoy mean when he used the word social injustice in this context? He defined social injustice as an inevitable state under the socialist economic system, which would inevitably then reinforce various inequalities. These inequalities, he argued, would be reinforced through monopolies, privileges, and even subsidies. He argued such a system would bring to privilege in individuals and groups unearned and unmerited incomes at the expense of the rest of the community. With greater economic freedom, he argued that there was no need or no room for monopolies to exist. Now there was also no need for monopolies in production, distribution, imports, and exports. All incomes of all individuals, wages, interests, rents, and profits would correspond to their respective contributions to the national project. Situation permits windfalls. Hence, no one can appropriate someone else's earnings. That is there can be no social injustice. --- ## [Interview] IL Explainer - Ep 6 | Why Are Fundamental Rights Not Amendable? URL: https://indianliberals.in/primary-works/il-explainer-episode-6/ ### Body # IL Explainer - Ep 6 | Why Are Fundamental Rights Not Amendable? Source: https://www.youtube.com/watch?v=XhJlE9kIgbU Duration: 356.8s **Narrator** (00:02): In a 1967 case, see Golak Nath versus the State of Punjab, Justice Hidayatullah, former Chief Justice of India, declared that it was — it was not within the powers of the Parliament to abridge or take away fundamental rights of a citizen. Said, our liberal constitution has given the individual all that he should have, freedom of speech, of association, of assembly, of religion, of promotion, and locomotion, of property, trade, and profession. Now now in addition, it has made the state incapable of abridging or taking away these rights to the extent guaranteed and itself shown how far enjoyment of these rights can be curtailed. It has given guaranteed right to the person affected to move the court. The guarantee is worthless if the rights are capable of being taken away. What followed was very interesting. In April 1967, then member of parliament, Nath Pai, proposed a bill which was — which aimed at securing these rights for the Parliament or these powers for the Parliament. What were these powers? This is the power to amend the fundamental rights mentioned in Part Three of the Indian Constitution. Now following which later the same year, in September 1967, an amendment to this bill was proposed, which was admitted as a bill by Shri Raj Mehra. Now Shri Raj Mehra was then a member of Parliament and a member of the Swatantra Party. His bill proposed that any amendment to the fundamental rights should be a subject of referendum. Now Shri Raj Mehra defended this, this line of thought of why it should be a subject of referendum. But before that, we must understand that Nath Pai aimed at securing those powers for the Parliament because he believed that the Parliament was an elected body of people's chosen representatives. And therefore, any amendment to fundamental rights or any amendments to Part Three of the Constitution would have been made by people's chosen representatives. Now Shri Raj Mehra did agree with this line of thought and then he still proposed that we think about it in — we we think about when we think about amending or abridging or taking away fundamental rights, we must make it a subject of referendum. Why? This was because as we explained, yes, the part — the Constitution is a dynamic amendable document, and it is — it it is not completely rigid in — in being an amendable document but it is partly rigid. And before I get into how it's partly rigid, let's think about the Constitution for a second. Constitutions in many parts of the world, whether written or unwritten, may be political — may may comprise the political constitution and may not extend to the fundamental constitution of society or of a people. What does this mean? That a lot of the things that — or a lot of the rights that are mentioned in our fundamental rights may be seen as natural rights in most democrats. And legal protection for these natural rights would be normal in most countries or in most democratic countries. But Shri Raj Mehra argued that our far seeing framers of the Constitution — of the Constituent Assembly — was was mindful when they put the fundamental rights in our written Constitution. They went beyond the political constitution and really included the fundamental constitution of the society of the people. They — in doing so, they also protected these rights from legislative action. They protected these — lie — rights from the state and the Parliament as citizens' rights for supreme. And the supremacy of of the fundamental rights compared to other part — amendable parts of the Constitution is well reflected in — in a court by Ambedkar. Shri Raj Mehra quoted Ambedkar. He said, if the future Parliament wishes to amend any particular article, which is not mentioned in Part Three, all that is necessary for them is to have two thirds majority, then they can amend it. Clearly states that Part Three, that is the fundamental rights of the Constitution, are not amendable by the Parliament. Shri Raj Mehra then went down to point out to the members of the Parliament present there that it was the responsibility of the Parliament to promote and protect the interests of the people. It was the responsibility of the Parliament to uphold the Constitution. He said, by what right can the Parliament turn itself into a sort of constituent assembly and so assume itself the powers which the Constitution has expressly denied. This clearly pointed out that not only is — is Part Three of the Constitution amendable. The power of amending it has not been given to the Parliament, but also it has actively been denied to the Parliament. The state or legislative bodies do not have the right to take away people's fundamental rights. He ended his powerful statements by asking the Parliament, has any honorable member put the issue of his elect — put this issue to his electorate that in clear and explicit terms, if elected, he will try to procure for Parliament the comprehensive power to amend not this or that right, but the entire gamut of fundamental rights embodied in Part Three of the Constitution. If anyone has, he alone has the right to support Nath Pai's bill. --- ## [Interview] In Conversation with Ronald Meinardus - Regional Director, FNF South Asia URL: https://indianliberals.in/primary-works/in-conversation-with-ronald-meinardus-regional-director-fnf-south-asia/ ### Body Transcript not available. --- ## [Interview] Indian Liberal Tradition - GP Manish URL: https://indianliberals.in/primary-works/indian-liberal-tradition-gp-manish/ ### Body Transcript not available. --- ## [Interview] India's forest-dwellers: From Owners to Encroachers URL: https://indianliberals.in/primary-works/indias-forest-dwellers-from-owners-to-encroachers/ ### Body # India's forest-dwellers: From Owners to Encroachers Source: https://www.youtube.com/watch?v=NF6pYsIkPLM Duration: 515.5s **Speaker** (00:05): It is important to realize how the tribals have lost their rights on the natural resources — land, forest, and other livelihoods — is very, very, very, very important in that sense. Historically, they have been living in these mountains, hilly areas where the reach of the administration was not very much there. They were living there, largely living a sort of a self-sufficient life, very little, few exchanges with outside world. The of the of the kings or whatever, princely states or whatever other governments were there, their reach, of their administrative reach was also very, very, very minimal. So they were largely on their own. And so, and also the resources were abundant compared to the populace. Populace was really populace and density was relatively low. So people used to cultivate their lands, and they did not have to really think of future, in the sense that they were cultivating lands. They were collecting forest produce, selling forest produce. All these things — technically, all the forest areas belong to the state or the princely king or whatever, the princely state or any other government. So legally, all these areas belong to the state. But in effect, people were enjoying all these rights. They could cultivate whatever piece of land they were cultivating. They really did not have to worry about future also, in the sense that when the son, family and ladies and the sons get adult, they would start cultivating the new piece of that. So, and one thing was clear — clearing the forest, yes. And this second cultivation started only after population started beginning to rise. So, so the — because then now you, no longer you can depend on collecting through, say, hunting sort of a, or. So then settled agricultural practices started as population began to rise. And then also, the whole thing was that there were no, there was nothing in those, in the, in in the way of, in which that the state has given you right. People themselves acquired rights of the lands by clearing the forest, starting cultivating. So by basically, to open up the forest and clear the land for cultivation requires a lot of labor and a lot of effort. So once a person puts in effort to clear a piece of land and starts cultivating it, the remainder of the society, all the remaining people, they would respect that right. And they would, they they would without any law, also, would understand that this happens, and they would — it passes from him to his son or or daughter, whatever it is. But they basically, it's a sort of, his right is recognized by everybody. So once you put in your labor on the natural right, on the natural resource of land, you can't, like to work it. That was the situation. But none of this was in, on government records — this person is cultivating this land. Although in the society, everybody knows who is cultivating which land, what are there. So those sorts of things were already there, but nobody knows that. That was one thing. Settlement and forest also. Similarly with forest. They, legally, they had no right over the forest. But in actual practice, most of them had access to forest produce. They could collect the forest, sell not only just minor forest produce, but also teak and other major forest produce, bamboo, everything. If you look through these Gazetteer records, you'll find that there have been traditions where, where people have been collecting forest produce and selling them. Similarly with the homes, their bandhs, their habitats, their settlements. And so those also — whenever they can create houses, this practice continued till late, not only before the independence, but up till now, this practice was very much there. But eventually, British has decided that since they have, they are the ruler, they had defeated the previous ruler, and these lands and forests belong to the ruler. So now by legally, it belongs to them. So they they are not bound to respect any of the rights of the local people. That was one thing. The — and this thing started from 1927 onwards. Although there were previous history that forest rights, forest acts were enacted previously, but the main main main assault on the forest areas or the tribal areas of, you know, and and many other states started after 1937. So, historically, it is very well known that during this settlement of forest, during this of forest, the rights which the people had over forest — both forest and the lands which they were cultivating — they were not recognized. This was very much true for the colonial period, but even after independence. After independence, you can, you'll have seen so many forest settlement reports of the forest settlement officers. Revenue officers were appointed. They went to the village, stayed in the village for one month, actually surveyed all the lands that were being cultivated by the families, individual families. They surveyed them. They — each person is cultivating how much of land. All these records were prepared. And as per the Forest Act, all these lands would have been surveyed because these calculations are made prior to the notification for forest. So they were cultivating this land, so they should have regularized these lands and given proper rights, made them as agricultural land. Most of them, they recorded the rights. And in the end, they treated as encroachers because they did not meet a specific demand of twenty years back. This would have one possession of twenty-five, thirty years. Then only it can be recognized, as if they treated as if the land was already forest. Although land was not forest. There were new land. For these — and these practices, princely states were there in many areas, princely states were there. Whatever forests were there in the princely states, after independence, they were overnight declared as reserve forest without carrying out any settlement process. Who is contributing there? Who is living there? Nothing was, nothing was recorded, and everything was declared as. So overnight, by declaration of a piece of land and the area as reserve forest, people became sort of encroachers because although they were cultivating this land from very beginning, they were collect — not only encroachers as far as agriculture is concerned, the encroachers and illegal collectors as far as forest goods were concerned. Because now the forest would be state, and even minor forest goods, bamboo, everything belong to state. And whoever collects anything, it becomes a thief. He's an illegal encroacher or illegal collector. So did this in, in a way, this is the main bane of our tribal areas. This is responsible for the poverty of these tribal, tribal areas, for people living in the, in this forest. But — and also that you have criminalized the whole section of. All these thousands of people living and eking out their livelihood. Right? Doing their own labor, collect, cultivating lands, collecting produce, and buying, selling. Everything is illegal. It's criminal. We have criminalized the whole section of people and wronged them. And that is the main important — because now that, so that led to so many problems. This is only in the tribal areas you find that areas where the people are living are very, they are very rich. So many resources are there. Minerals are there. Forests are there. Lands are there. And yet local communities or local individuals have no right or any, no legal right over any of these resources. That is how, that is the context of historical injustice. --- ## [Interview] India's Greatest Liberal - Gopal Krishna Gokhale URL: https://indianliberals.in/primary-works/indias-greatest-liberal-gopal-krishna-gokhale/ ### Body # India's Greatest Liberal - Gopal Krishna Gokhale Source: https://www.youtube.com/watch?v=mfRjMb_2GHY Duration: 119.4s (empty transcript) _Cleaned: skipped (transcript empty or too short for speaker identification)._ --- ## [Interview] India's Transition : Choice, Competition, and Individual Dignity URL: https://indianliberals.in/primary-works/indias-transition-choice-competition-and-individual-dignity/ ### Body # India's Transition: Choice, Competition, and Individual Dignity Source: https://www.youtube.com/watch?v=eOZuRhNETrU Duration: 405.0s **Parth Shah** (00:04): I had not realized how much impact on a personal life, right, that the current system of governance has. Right? So we talk about the statism and then how state dominates the economy and the reserve of services to citizens. Right? We think the more in terms of at least, was thinking more in terms of the larger system principles and principles of philosophy and design in a way. Right? And then how do you create institutions that would support freedom and to support people's desire to achieve best in their lives? I think coming to India, I so the first experience that made me sort of you know, brought me face to face. This is not just about it's not about politics. It's not about economics. It's not about political sort of principles. It's so much about your personal life. So I wanted to be independent just like I was, you know, running in my own apartment in The US. I thought I can do the same with a single person, the small apartment that I had in Delhi. But, you know, I, of course, clean my own toilet, clean my own bathrooms, did the for quite some time on my own to maintain the apartment. And that was when has bigger problem, frankly. I could do all of those things. But when I had to pay my first electricity bill, right, and I sort of took the bill, went to pay the bill, and I stood in the line for almost three hours. I said, yeah. Of course, I must have forgotten. I grew up in India, obviously. Was and that time, my parents must have taken care of all these things. And I just was so shocked that, you know, you to give money. This is like, I'm not even asking for anything. I'm just doing that to give money. Right? Even to take money, government makes you wait for this many hours. And, actually, I was fortunate because some people just took pity on the effect that they realized that I was not used to this this kind of standing in queues and got me up up out of the line. But paying, let's say, the bill, paying the telephone bill. Right? Well, luckily, I had a telephone already installed in my apartment, so that wasn't a problem. I already had a gas connection also. That was all taken care of the apartment that I rented. But paying those bills really is felt how it makes you small just makes you lose your basic dignity, right, as a human being, right, as a citizen. And that actually had a huge impact on me in terms of my own sort of deeper understanding of why we need to fight this battle. Right? It's not just for larger ideas, not from largest system reform, which is, of course, as I was thinking earlier, been training economics and all of that. Right? But it's so much personal. Right? It's so much, that each individual's life is so directly impacted by what kind of system we put in place. Right? How we design this service delivery, in the country. And I think that was really a big learning experience in my own life. And that's been sort of made my resolve even stronger to do what I set out to do. Of course, life has changed dramatically as you pointed out. It's no longer the case. It was turning to to pay your bills. I think it's largely because I think this simple principle, right, of promoting choice and competition, which is very sort of market principle. So even though you may have government provision of service, we don't want to have government monopoly of provision of service. Right? Which is what it was in case of telecom and electricity earlier. Right? We have government companies providing those services. It's only one place to go. It was MTNL or BSNL at the time. Right? I remember very clearly at CCS office, that, you know, a linesman would come regularly almost sometime every month to say hello, to say Right? And, you know, of course, he's not asking for how you are doing. He's just reminding you that your telephone is working in your office because of pain, and he needs to be given some baksheesh, some consideration for making it work. Right? And I saw I mean, we had the same linesman after a few years when the private sector was allowed to operate in telecom. Right? The same linesman in this in our office area. After when the private telecoms came in, after some time, he stopped coming to office asking for those gifts. Right? And I can see that how it has changed. Even the linesman understood that now there's a competition. People have a choice in terms of where they want to go, and therefore, cannot extort as normally did. Right? And I think after that, we are giving him some baksheesh with sort of open heart. Right? Yes. We recognize his contribution. He's the one who's there at twelve at midnight, right, to fix the telephone line if it does break down. So you want to recognize his contribution, his support that he's providing. It was much more voluntary out of goodness of the heart, out of service that we provided. Right? It wasn't seen as extortion or a bribe that we have to pay. And I think that has been a huge change. People don't realize that how much corruption has been eliminated just by the simple competition that we brought in, the choice that we are allowed to consumers in many of these public services, which are used to be a government monopoly earlier. I'm sort of afraid that we are not applying the same principle to other domains that we need to apply even today. Right? Why is the government supporting students as it does in case of, you know, in case of private schools as it does in case of state schools? So then opening those choices to citizens is a far better way of, giving them dignity, first of all, but also to provide better service to lower cost. Right? All the good thing that you want can come out of that process of giving more choice to citizens, and this should be a no brainer in a democracy. People are given the power to choose their own representatives. Why can't we trust them to give power to choose their school, their hospitals? Right? And that service providers. --- ## [Interview] Jagdish Bhagwati on Milton Friedman URL: https://indianliberals.in/primary-works/jagdish-bhagwati-on-milton-friedman/ ### Body # Jagdish Bhagwati on Milton Friedman Source: https://www.youtube.com/watch?v=W_k6v-rVR40 Duration: 327.3s **Jagdish Bhagwati** (00:08): I heard him actually in the Planning Commission, and he was bold enough to say in the in the Planning Commission that my main advice is that you people should be wound up. So it was then, of course, he was a fine debater, so it was very difficult to trap him in anything. But there were a lot of people who were for planning in the audience. And then Friedman went a little too far, and he said there was not a single instance where a public sector enterprise had ever been successful. So one of my English friends who was who was also an adviser, Robert Neild, and he said, what about Volkswagen? So Milton Friedman said, but that's only one example. But the point is, he had said that there's no example. So he just turned around very quickly and so on. So but he also had the he went around the country at that time. I don't know if anybody has told you that. And at that time, when Mrs. Robinson came later and she was, of course, for planning and so on, she found out what the itinerary of Milton Friedman was, you know, all the different cities he had visited. And then she went through each one of them to undo the damage which Milton Friedman had done. It was very funny. Who actually said that you know, how we should loosen up and so on. It was not even reported in the newspapers at the time. And, you know, it was quite astonishing. But, you know, there's a sort of self censorship sometimes. And particularly if you're challenging the very assumptions under which the government is doing the planning and so on, it's very difficult to get any kind of, you know, outlet. I mean, now, of course, there are more people. But I think it was generally the feeling was that any economist who was not in favor of planning was not a very good was an ideological economist. Whereas if you were practical and, you know, pragmatic, then you would really go for some element of intervention. The only problem was as soon as you admitted that possibility that you could actually have a, you know, essential intervention with them, then the question was, you know, whether government would actually be doing the correct things and in many cases, they don't do that. De facto, the under under Prime Minister Nehru, it was it was sort of not strong socialism of any kind. None. There was not even a licensing system in the first five year plan. And because the economy was doing reasonably well, it all came in with the second five year plan, and as a result of balance of payments difficulty. As soon as balance of payments difficulty arose, then people began to say, Ah, now, foreign exchange is scarce, therefore, we must start allocating foreign exchange, which is again, you know, I mean, sounds like reasonable that if something is scarce, you should allocate. Right? It's like, I mean, when you're driving a car in snow in in in United States, they say if the car starts skidding, then you must steer in the direction of the skid, which is completely counterintuitive because if it's going that way, you want to steer this way, right? And so this is the same thing about intervention also. When you think things are scarce, you feel you've got to kind of hustle the resources, must, you know, allocate. So it is counterintuitive idea. And I think most most people fell for it, you know, and that obviously it is so obvious, so pragmatic, so non ideological that you should really, you know, manage something which is scarce. So it took a long time, you know, also way down the road that people began to really think through the thing in light of experience because the thing became so ridiculously bad that, you know, people who had appeared ideological at one time like Milton Friedman, and to some extent, Milton was ideological. He wasn't speaking from actual because there weren't there weren't so many experiments. He was just ahead of his time to think through all these things. Right? I mean, he turned out to be right, you see, but he appeared ideological. So one of the problems in the early days was that anybody who was from markets appeared ideological rather than really, you know, in command of the I mean, to be really perceptive. That happened after when people like, you know, me and Padma Desai and T. N. Srinivasan, a whole slew of us started departing from the ranks. In light of experiences, I said, you know, we saw what Yojana Bhavan was doing, and we were horrified, I mean, that anybody could be planning that way. --- ## [Interview] Liberalism and the Challenge of Polarisation URL: https://indianliberals.in/primary-works/liberalism-and-the-challenge-of-polarisation/ ### Body # Liberalism and the Challenge of Polarisation Source: https://www.youtube.com/watch?v=18qwRftuXoc Duration: 439.8s **Dr. Jayaprakash Narayan** (00:05): I think it's a challenge, as of that. I would not like to minimize the challenge. I'm a great optimist. But a good optimist is also a realist, while an optimist is is fundamentally a believer that things can improve, and after all, history is constant struggle for improvement with success. But we must not underestimate the challenges ahead, and it's a global challenge. It's not merely Indian. We are also part of the decline in public discourse, unfortunately. But, unfortunately, many other countries are seeing a very similar pattern, so we should not underestimate that. And if anything, the social media, which are actually liberating instrument and empowering instrument, have also become a very polarizing instrument. So we have a challenge. I think we can do some things to make it better. I I don't have any prescriptions as to how to handle social media. I don't know much about it, the technology stuff. I only can, come out with examples of what we can do as individuals, and hopefully, if enough people do it, things will improve because people realize the value of it for their personal lives. The first is, and this is important, particularly for a country like India with so many caste, regions, religions, languages, sub caste. No. Everything is about identity, sub identity, sub sub identity, all kinds of things. I think the most important principle that we have ignored in India in fighting polarization is that ultimately individuation politics of individuation. Look at what matters to people. The the elevator, whether it functions well or not, the electricity that you get at home or not, the school your kids go to, the hospital your family needs, the road in front of your house, the potholes there, or the drainage or the stormwater drainage are in Hyderabad City. I am in Hyderabad City right now. And the two, three days of heavy rain and even moderate rain, the the the the roads are flooded. These are the things that matter. If you focus on those, then that is the best way people can forget their alleged differences, their perceived differences of caste, religion, religion, etcetera. Individuation, a lesson that we all forget. That is the art of democratic politics. You know? As behavioral economists tell us, the the great book of Daniel Kahneman, for instance, Thinking, Fast and Slow, and many other behavioral economists got a few got Nobel Prizes in recent past. They told us that human beings are tribal by nature. There is a clash between our technology and our mind power on the one hand, our instinct and tribalism on the other hand, the old brain and the new brains. Oftentimes, if you don't give enough time and if you don't reflect carefully, the old brain, the instinct kicks in. That is the nature of things. Otherwise, imagine the kind of support Donald Trump gets, not for the economic policies or some of the more rational things that he argues for, but for the irrational outbursts and for the very uncivil behavior because of tribalism. I'm not talking of party politics. I'm talking of human behavior. And we can only counter that when we make people realize what's important for their families, not by telling them how wonderfully important it is to look at all mankind. I know what I'm saying is not very romantic, but I would urge you to consider that. And if that is the case, then focus again as individual on individuals on issues, not individuals and parties. And therefore, on a certain issue, the individuals and parties can be right. Another issue, they can be wrong. And be consistent, be truthful. Do not doctor the information, the data, or do not pervert the logic to suit your conditions, be consistent about it. Then over time, people will listen because they realize their self interest, not because they are the most logical people, but because they understand their self interest. And in all political parties, in all movements, there are good people. Do not categorize them and brand them and say they're all bad, or they're deplorable, or they're bad, but nothing of the kind. There are good people in in Indian conditions, BJP, in Congress, in TDP, in regional parties, in TRS, in any party, DMK, any party. And there are people who are out for their own personal gain in any formation. Recognize the people of value and respect them and encourage them. Do not brand them just because they happen to have, in a broad sense, a different point of view or belong to a different formation. And then have faith in technology. While technology is in some ways a problem today, the social media are actually creating more and more of this, this polarization and this hatred. The same technology, if you persevere and if you innovate, and if you stick to truth consistently with certain safeguards, can also propagate the the right message. We have to have faith in that. Sometimes in the short term, there may be some hard knocks. But unless we have faith and unless we look at the human history and that's where our deeper understanding of human history. I think as any serious student of public life and politics in the world must also be a serious student of anthropology. What happened to human societies over over millennia and how we have actually matured. Remember, not too long ago by by the by the standards of geological age, if somebody said that earth revolved around the sun, they would have been hanged or crucified or shot to death. Not too long ago. Today, it's an absurd proposition that you would oppose that. Not too long ago, people argued that earth is flat. Today, it's a ridiculous thing. It's an object of ridicule. If somebody says that, it's an object of ridicule. Remember. So human beings do change, but not immediately. They change generationally. A few individuals, they see the truth, they have the smartness, they have the goodness, they have the decency. They lead, but they pay the price oftentimes. But eventually, as most people realize what's important for them and how it's beneficial to them, they change their beliefs. And we must have the patience and perseverance, and we must have the optimism. And finally, we must be willing to constantly innovate. Don't be dogmatic. Do not make liberalism or your principle a dogma which is unchanging. Be more empirical. Be more humble. Recognize that you are prone to error as well, recognize that no philosophy works in all times, be the first to recognize so that they recognize that this philosophy also has strengths. Instead, if you only harp on your basic orthodoxy, then they harp on their own basic orthodoxy, and there's no meeting point. Be nimble. Be innovative. Be flexible. I don't know if more can be done, but at least if these we practice individually and collectively, I'm sure things will get better. --- ## [Interview] Liberalism and the Populist Challenge URL: https://indianliberals.in/primary-works/liberalism-and-the-populist-challenge/ ### Body # Liberalism and the Populist Challenge Source: https://www.youtube.com/watch?v=B9BJbO9L9aM Duration: 468.8s **Speaker** (00:05): I think, broadly, my take is that the current understanding of the rise of populism is not fully accurate. So the standard storyline that tries to explain the phenomena of global populism is that that economics is broken. What has happened is because of the superglobalization, of the last twenty five, thirty years, right, under WTO and the international trading regime, which has given particularly, access to global market for China. Right? So China joined the WTO in 2001, got sort of favored nation treatment from The US. And therefore, China's export market opened up in The US and which has led to this sudden rise of China. So I think that globalization and the related developments, particularly with with China, is what is seen as the larger reason behind this backlash. And because of this, China becoming the world's factory, people begin to lose jobs in manufacturing, particularly, which were the sort of blue collar jobs, not just in The US but around Western countries. And that has the loss of those jobs, the breakdown of community, therefore, the despair, which has taken over much of this blue collar world. And that's the explanation which has been given for the rise of populism in The US and I think much, much around the world. Though, obviously, that does not gel, if you see the current regime in India as a populist regime, then that's not the reason why I think the current regime has come to power for this from that from that point of view. But, anyway, that's the larger global story. My sense is that that's not fully accurate story. I think globalization has been generally very positive. There's a lot of research being done in terms of impact of China and The US and the western countries particularly. It doesn't really stand up to the scrutiny. If you begin to look at the data about the imports from China and the the industrialization, in much of the world. Right? To my mind, what is broken? First and foremost is the politics. What is broken is that we have not been able to deal with the challenges or emerging challenges mid mid twentieth century or mid twenty first century. And those challenges are the ones which are having dealt still have been dealt with by the politics in these countries. It's not so much an economic issue, but much more a political issue. Right? And why is politics broken? I think it's broken fundamentally because the rules of the game that apply to politics are not as transparent, not as accountable, right, nor as democratic as they are, for the economy. So we look at the, for example, the basic unit of economy being a firm for a company. The rules which govern a company, right, in India or any other country for that matter are far more severe, far more detailed. They require huge amount of transparency and accountability from the companies. Now if you compare those rules that apply to companies, the rules that apply to, say, a political party. A political parties are the basic unit of democracy just like companies are for the economy. The rules that apply to political parties are rather feeble. Right? They are not as watertight. Right? They don't require much democracy, even within the political parties even though they are supposed to be serving the larger cause of democracy. Right? There are as you know, there are hardly any elections that happens in the political parties in India, and I'm sure that's true with many, many countries in a similar situation. So I think what is broken are the rules that govern political parties, which is basic unit of democracy, and the larger rules of the govern the democracy itself. So as we know, the public choice theory and the constitutional economics tells us a lot about how the constitution and the rules which are laid down in the constitution are so much more important, right, in structuring the interaction within economic domain as well as in the political domain. And those rules, I think, are not thought through, have not been updated as the society and economy have evolved. And unless we update those rules that govern democracy, that govern particular political parties, I see that that fixing cannot happen. And that's where I see is the biggest challenge in addressing the problem. Not just from the political point of view. I think one can argue what kind of rules liberals you want to see governing political parties and the democracy. But I think I think generally from any particular point of view, those are the important rules that need to be thought through. Just to give an example, we know that we have India has the first past the post system. The selection in The US is done through a primary system. There are many such electoral systems around the world, and we know that quite often, the result of an election is not so much is what voters want. It is also result as much of the electoral system through which we process the preferences of the voter to convert them into a final outcome. Right? And I think there has not been much thought around the electoral systems, which are better ones, what impact they have currently in the outcome of the elections. Right? So, ideally, you want elect electoral system that converts converts the preferences of the voters as faithfully, as comprehensively as possible into the outcome that voters would like to see in terms of who are the elected representatives and how are they going to be governing the system once they are elected. And I think those rules are not really robust. Those electoral systems are not so robust. And that, I think, fundamental problem of democracy of how effectively are we able to convert voter preferences into final electoral outcomes or in the final election of representatives. That's the fundamental issue in the whole process, not really deeply thought about. As you know, we want we have probably more than 100 democracies in the world, and each one has a very different system of selecting representatives at the local level, state level, at provincial level, or at the national level. I think there needs to be much deeper thought around that. And my so I suspect that is the really the thinking that needs to be done by liberals as well as by the people who are concerned about the current populism that is on the rise. Unless we are able to fix politics broadly defined, I don't really see how we can address the populist challenge. --- ## [Interview] Making Tax Compliance Attractive URL: https://indianliberals.in/primary-works/making-tax-compliance-attractive/ ### Body Transcript not available. --- ## [Interview] Minoo Masani on Nehru's Adoption of Socialism - In Conversation with Zareer Masani URL: https://indianliberals.in/primary-works/minoo-masani-on-nehrus-adoption-of-socialism-in-conversation-with-zareer-masani/ ### Body Transcript not available. --- ## [Interview] Minoo Masani's Disenchantment with the Soviet Economic Model - In Coversation with Zareer Masani URL: https://indianliberals.in/primary-works/minoo-masanis-disenchantment-with-the-soviet-economic-model-in-coversation-with-zareer-masani/ ### Body # Minoo Masani's Disenchantment with the Soviet Economic Model - In Conversation with Zareer Masani Source: https://www.youtube.com/watch?v=hLJXAWvmi18 Duration: 117.2s **Zareer Masani** (00:05): He made a couple of trips to Russia. I think one in the nineteen twenties and one later in the nineteen thirties. And on both occasions, he traveled quite widely and was sympathetic to the Russian experiment, but noticed all kinds of things which people like Krishna Menon and Nehru didn't when they went. I mean, he noticed the fact that it was being run as a dictatorship, one party state, that, you know, there was a lot of one didn't know the full extent then of Stalin's purges and the gulags and how many people were killed, but he saw the tip of the iceberg and didn't like what he saw. So he came back to India around 1930 as a socialist but quite an anti-communist socialist. He also wrote a book called Socialism Reconsidered, which was his, you know, reasons for disenchantment with the Soviet model and Stalin's purges and why what the role of the communists in India and why socialism itself needed to be reconsidered. --- ## [Interview] Minoo Shroff on A D Shroff Memorial Trust and the Forum of Free Enterprise URL: https://indianliberals.in/primary-works/minoo-shroff-on-a-d-shroff-memorial-trust-and-the-forum-of-free-enterprise/ ### Body # Minoo Shroff on A D Shroff Memorial Trust and the Forum of Free Enterprise Source: https://www.youtube.com/watch?v=0rI3OuqWi7k Duration: 267.8s **Minoo Shroff** (00:08): Yes, it was founded a year after he died and there are many people who said that this is fine, but why don't you have a memorial trust for objects which were... because one was public education, financial literacy, partly overlap of the Forum. But if Forum was not there, this would... because there was no organization. Then it was for publishing biographies of famous people and elocution contests and the other because he was a professor, part time professor in Sydenham College. So keep the memory on, started in a small way, now we are much better organized because we have so many trusts' support, you see, Palkhivala Trust is there, they have a large corpus. And Forum is there, M. R. Pai Trust is there, all have their separate niche. And now everybody is supporting, Piramals, Godrej is supporting Palkhivala Trust. And ECC and Tatas gave large corpus donation, ITC also, to Palkhivala Trust and because Palkhivala, if there is a body, it can carry on. So we provide the infrastructure, the word which has become common. And Pai was central and he trained up... One of Pai's great contributions was Diwakar. It was a great help. When when Mr. Palkhivala was getting... had his strokes and was getting very inactive, he approached me, and I took on first the Leslie Sawhny Foundation for Democracy. He asked me to take over and then the Forum of Free Enterprise. He asked me to preside at a meeting and then followed. And then A. D. Shroff Memorial Trust for a year or two, Deepak Parekh was there. So Deepak says you are a natural choice and I've got so many things in. It requires more attention. By that time, I was the executive vice chairman of the JK group, very involved with Raymond and going abroad. Malegam is associated with the A. D. Shroff Memorial Trust. Adi Godrej is there. Deepak Parekh is there. They're all senior to me, my colleagues, but I'm there. And in Forum also, have got a battery of... but people with active involvement is involved, giving money, raising money. So we have built up quite a solid corpus now and I also go and speak at various... You see people with vast experience are very few. It is difficult to go across now. So he has got an assistant who was with ICICI, Swati Kapadia, she is also very helpful. So at least in our periphery and even to Southern states, most colleges call us. So we have mobilized several trainers and we get very laudatory remarks of these people have never had like good grooming, effective speaking, time management. He was very, very particular about time management. Even now, Diwakar gets very impatient when we start a minute late whether there is audience or not. He is training from five because both Mr. Shroff and Mr. Palkhivala were immaculate about keeping time and keeping their commitments. They went around the country, they spoke to people, opened their eyes. But you see now the things have opened up, Forum's role is on the economic literacy and so on. Our booklets are very much appreciated. We have memorial lectures, two, one — A. D. Shroff by Forum, now we have decided to have one. Difficult, all people who are worthwhile have, if you see our booklets, I write to anybody worthwhile, he will say, if people like Governors of Reserve Bank, ex finance ministers have all come on your platform, how can I say no? Like Subbarao. When he couldn't come, he said, look, can I do it next day? He rang me up. So you see the... it has that brand image. --- ## [Interview] Minoo Shroff on Doing Business in Nehru's India URL: https://indianliberals.in/primary-works/minoo-shroff-on-doing-business-in-nehrus-india/ ### Body # Minoo Shroff on Doing Business in Nehru's India Source: https://www.youtube.com/watch?v=mkKmQMD_Kcs Duration: 679.3s **Minoo Shroff** (00:10): I was a student of economics and was involved in business and I felt things were getting off the rails. Of course, one was greatly inspired by the national movement and I had great regard for Nehru, but I thought his economic policies were wonky. As I started reading, I could see how he was inspired. In all fairness to him, when he went in the early 30s to Soviet Union, and Soviet Union in those days was a massive empire, was very underdeveloped, agrarian, and the reforms which Stalin brought in — though he shut people up and there was no freedom, what they wanted was some economic development and so he took on agricultural reforms, though they were communes and so on, but they needed large capital and state support. The other thing one impressed about the Soviet Union was the great importance they gave to education. In fact, at that point in time, their literacy standards were as good or better than those of America and Britain. So anyway, and power was another thing, which we find out now, which is so critical to development. So, Nehru was greatly impressed that our country, though huge, but very low growth rate, no development, no long term vision, had been in a few years transformed. When he saw this was counterpoised with how the British had kept Indians backward, our growth rate was hardly half a percent, there was hardly any industry but basic. Of course, we had industry of cotton, jute, sugar, cement to some extent and Tata had started a steel plant and that led to some building of heavy industry as well. But by and far, we were quite backward. So he felt that the capital formation was very low, savings rate was hardly one fourth of what it was at the peak. So it struck him that the quicker and better way of the rapid development was through government's major participation, not totally keeping out our private sector, but involving them only at the fringes. But he thought all heavy, the basic roadblocks of development, steel, cement was not on their agenda then, heavy industry, machinery building and so on should be in the public sector for two reasons, one the government could mobilize funds and do it rapidly. So that thinking permeated, and this was not new because when he was President of the Indian National Congress in 1936, his philosophy was that he was against private profit motive and against accumulation of capital beyond what was required for immediate needs like housing, farm and so on. And that is how it led to the acquisition of surplus land and abolition of Zamindari and so on and so forth. Now, in the initial years 1947 to 1954-1955, it did not gather much momentum, because the state was not organized and we had the steel frame, which was not very convinced whether bureaucracy could do the job. Many of them were attuned to development of Indian industry, whatever it was, by the private sector. In fact, India became the theatre of war and a lot of rail equipment, even modest armament, ordnance factories were all mobilized in India. Ordnance factory was under because of security reasons, but the other mobilization was done by the private sector or jointly with the private. Tata Steel played a very key role in supplying, because if we did not have steel, we would not have at least the light armaments, railway equipment, which was very necessary for communication. Now, when it came to the Planning Commission was set up, and let us face it that the members were initially ideologues, they also believed that was the temper of the many of were educated at the London School and they believed in the Keynesian theory. And so that was the shape of the first and second plans, till we found that the public sector was neither producing the resources nor did they have the manpower to really manage it well and strong criticism arose in the country out of from academics and business community. First plan was a marginal success, because we had foreign exchange balances that ran out by '57, '58, there were massive import cuts that again reduced the capital inflow of savings to support the large import bill, because we were largely dependent on imported inputs. So there was a sudden clamp down and then we were in a tizzy going around the world, but our policy was not appealing to the Western countries and particularly United States was inimical. The only country which came forth was Soviet Union to start with, there was no Eastern Zone and Western Zone in those days and the Eastern European countries were very much, I know I was agent for Skoda and so on, the Czechs were as prominent capitalists as any Western country and made some very sophisticated equipment. So that imports continued under the rupee payment agreement and Soviet Union gave us large credits, they were the first to give credits, so steel plant came in and they came in later for heavy equipment. And we had the Bharat Heavy Equipment and Bharat Electricals and all these factories coming up under the public sector umbrella. Some Western technology was later taken, but it was only technology not capital, because we found that Eastern equipment was not up to par and you could not develop and what we got from the Eastern Union was backdated, obsolete, but we had to because there was no foreign exchange available and the rupee payment started. And there were lot of gaps there and corruption grew, because we had the licence permit Raj and as licensing become more difficult, somewhat dubious crowd of businessmen grew on this, who could pedal influence in Delhi, and for which we are still suffering to an extent of course reduced considerably. The British started leaving, their might was largely in Calcutta or Braithwaite and Burn and Company and Indian Iron and Steel and so on. And they had set up some capital equipment plants, but they were not up to par. So foreign inflow was very difficult, we did not have the technical skills and Nehru's great contribution or some coming part of that was setting up our own technical institutions, the IITs and the IIMs that created the bedrock, which has later helped India. But then not seeing opportunities here, a lot of managerial and technical flights, and this is why the America today, Silicon Valley is more a creation of India. Of course, it has helped us also, there has been a rub off effect. Now in this state of mind, there was a lot of frustration, people went to Delhi for licences, they were not forthcoming, but they did not have the courage to speak out. Then State Trading Corporation was added, that even trading was transferred to the public sector and they did not know what to buy, because they were not trade savvy and we got sort of substandard material, it was all tied up to rupee payment areas and so on, and getting licences was necessary whether it was state trading or not. So you started this leakages in the system because anybody who could pedal favours in Delhi rightly or wrongly could. Now, this frustrated the wing of people who are pretty straightforward who had set some platforms for private development, the Minders in a small way starting with importing jeeps and trucks and so on. Walchand started the heavy industry, the Hindustan Electronics and making some heavy trucks and so on. And Tata's, so Tata's first was given a licence for making locomotives because they were imported, that is how TELCO — Tata Locomotive and Electronic — and they found the orders were electronic. So what they thought the right fit was trucks and heavy trucks and they entered into collaboration with Mercedes-Benz, Daimler-Benz, and that really created a platform, a nuclei for the automobile industry and also heavy equipment, because TELCO diversified then into making of lot of heavy equipment like earth movers and stone crushers and road building equipment. Largely training was also done to Soviet Union, I think the first technical agreement for exchange. So, the first bait of people who came. The other thing is the eminent economics and intellectuals were also groomed in Britain. At the time, they were not socialist then, but there was a lot of socialist thinking. --- ## [Interview] Minoo Shroff on His Uncle A D Shroff URL: https://indianliberals.in/primary-works/minoo-shroff-on-his-uncle-a-d-shroff/ ### Body # Minoo Shroff on His Uncle A D Shroff Source: https://www.youtube.com/watch?v=6rYRIs9byu8 Duration: 332.2s **Minoo Shroff** (00:10): We thought democracy or freedom in life, speech, doing business, were as important as critical to democracy. He greatly admired Nehru's idealism, his democracy, that he was sincere in what he did. But he thought that he was carried away on the wrong path, and somebody had to resist it. It's a great pity that in those days business didn't support, they wanted to curry favour with the government, and they could easily do it because the government didn't know business. I know this because I started as a young man in import export business. How often you had to go there, and you had to explain to those people what was right for the country, what was right. When they thought you were sincere, they helped you with a license, but they were too small, fragmented. Some people have criticized him that he talked to private enterprise, but he was the first one to suggest that there should be conversion of loan into equity. He said, look, let there be an astroker, let there be some, because all businessmen know that's why the code of conduct, the code of conduct of the Forum is better than most. In fact, many people, Padgaonkar and others came to give their memorial lectures when they saw our code of conduct. People thought of when he was rebuked by Krishnamurti that this is all no freedom, all enterprise, what he meant was exploitation. He said that look, we are prepared by a code of conduct, but the dishonest are supported by you. Who are the chaps who got in through the STC? Who are the chaps who got the licenses for coal mining? Who are the licenses who got for aircraft? People who had only sat in it. He was a born liberal, though born in a lower middle class family, but I suppose going to England also liberated him, not only that, I was wondering how people like R. D. Tata, Purushottamdas Thakurdas, Sarkadas, Sir Dinshaw Wacha recommended, how he got in touch with them. And they encouraged him to go to London. Dinshaw Wacha said, you should become the first covenanted Indian officer in State Bank of which he was the Governor. He was a nationalist, I don't know how he got into the State Bank Board, but he was not that rabid, and the British government supported him, then became the president of the Indian National Congress. And so they supported him, he went there, and he came back and he was rejected. He was rejected because he was trained by American banks, Chase Bank. Now look at the British dogmatism, trained in London, London branch of Chase Bank but stayed an American bank and the British banks never took Indian training. So when he came back, the State Bank didn't take him and you must have read in his book by J. R. D. Tata himself that later when the State Bank asked him to become a director, he said, I have no interest. It requires lot of courage for a young man, it was great. In those days, it was great honour to be a director of State Bank, other banks were very tiny. So that was built in, it was no hypo what was he gaining by? He was getting alienated even amongst his colleagues, many of his colleagues were Congress supporters, I do not mean to mention him. It was because of his tremendous courage and that he lasted in Tatas. If a foreigner told him that, oh, you criticize the government this morning and you are asking me to invest, his ready report was that, I am not against the government, against the nation. India has the best entrepreneurs and the largest market and future skills. I'm against the policies of the present government. So it was a staunch and I have heard this from many. Lord Bagri, who was the first Indian to be chairman of the London Metal Exchange, Komanko Binani, he is still a lord and he is old now. So he was sitting next to me in a plane one day going to London, and he was a great admirer of me. He said, oh, are you are you? He is my guru, mentor, and I wanted to take my collaborators. So but Mr. Shroff said that look, I mean, you will be putting them off because I will be very frank and one. No, but the collaborators want to meet somebody who can give an objective opinion. So he was on the second plane. He said, don't talk of my public criticism. What am I criticizing? I'm not criticizing Nehru as a man criticizing his policy. I'm criticizing because he's misguided. Otherwise, I would not have joined the Congress Planning Commission. You see that the question is, you turn around not for a political advantage. So he was steadfast too, and the code of conduct which is so beautifully drafted itself shows. --- ## [Interview] Minoo Shroff on Nehru, Welfare and India's Promise URL: https://indianliberals.in/primary-works/minoo-shroff-on-nehru-welfare-and-indias-promise/ ### Body # Minoo Shroff on Nehru, Welfare and India's Promise Source: https://www.youtube.com/watch?v=v2q2QiXK7zY Duration: 239.8s **Minoo Shroff** (00:09): We thought look at the welfare from cradle to grave, there was welfare. In fact, some of the people in Eastern Europe could not get themselves reconciled even after Soviet Union collapsed. Even today, there are some who are thinking of that, because they got used to that entitlement. This is what we are suffering from and what many people are saying that this entitlement business, people totally dependent on the state, and we are not able to deliver, our public services are not kept busy, because their mindset for service is not there. We have set up a lot of institutions, passed a lot of acts, well meaning, but we didn't see that our capacity to deliver, and that is our weakness even today. We are some of the greatest conceptualisers, our plans have been greatly lauded abroad, but they said, where is the delivery? When the first chemical factory was settled, they were great. When Alexander Fleming, the discoverer of penicillin came here, he said, I find the best museum of British equipment here, I hope they deliver. Where were the manpower? We had set examples. Look look at the foresight of JN Tata, starting an Indian Institute when he was looked down upon that you can't feed your people. And when did he think of it? In eighteen nineties, when he was totally discouraged. But one thought that if I get somebody, let me get the best. That is how Tata Steel is a model of development. We talk of now smart cities. There is no better city. Now many people have said that why do you want to learn a CSR, go to Jamshedpur. Many socialists have also written articles on this. The question is, we have got such models. We have got model farms also in Punjab and Haryana and so on. But we don't when we want, we totally lean on the West, or we land on the developed countries. Now Russia is also a developed country, but look how it's broken down because there was nothing there except armament and steel, no consumer goods. People want bread, they want lipsticks, women, they want clothes. And how our consumer product industry has gone up, we were living in a country, I remember because I am older than many of you, now there nothing available here. Look at the shops today, in the smallest towns you get everything from a motorbicycle, even a car. Our biggest motorcar demand for small cars is in small places like Nanded, Aurangabad, even Mercedes Benz, they used to open up their showrooms there. Now that has blazoned aspirations. So just calling, passing resolutions on aspiration did not take us to the promised land. What you need is coterminous delivery. So I think now that we have been opened up at least very substantially, we see the benefit from Hindu rate of growth of three and a half percent to an average of six and a half, seven now going aspiring for eight, eight and a half, which we achieved. And which is the prime word? The private sector. Of course, there are always shortcomings. Are there not robber barons in United States? But didn't they satellite United States development? Later they all became philanthropists and educationists. --- ## [Interview] Mithan Tata Lam- An Indian Lawyer & Suffragist URL: https://indianliberals.in/primary-works/mithan-tata-lam-an-indian-lawyer-and-suffragist/ ### Body # Mithan Tata Lam - An Indian Lawyer & Suffragist Source: https://www.youtube.com/watch?v=FRXCo8XWgXQ Duration: 494.5s **Narrator** (00:04): India's 2014 general elections saw a women's voter turnout of 65.3%. The total voter turnout for the 1957 general election was 63.73%. The women's suffrage movement has been a topic of great interest for scholars across the globe. Between New Zealand enfranchising its female citizens in 1893 and Saudi Arabia granting women equal voting rights in 2015, we have come a long way in formally introducing universal adult franchise in electoral politics. Today, we would like you to meet someone who along with her fellow suffragettes appealed, convinced, and ensured equal voting rights for women in India. At 25, Mithan Tata became the first woman allowed to practice law before the Bombay High Court. Mithan was born in a Parsi family to Ardeshir Tata, a textile mill employee, and women's rights activist Herabai Tata in 1898. Having a progressive and encouraging father who helped her focus on education, Mithan grew up with strong support since childhood. Her mother, Herabai Tata, was a passionate advocate of women's rights who tried to elevate the condition of rural Indian women. Mithan pursued her bachelor's in economics from Elphinstone College in Bombay. She was the first woman awarded the Cobden Club Medal for securing the highest marks in economics. In 1911, while on holiday in Kashmir, Herabai Tata met Princess Sophia Duleep Singh. Princess Sophia was active in the British suffrage movement, and her influence led to both Herabai and Mithan taking up the cause of women's votes in India. Mithan Tata saw no contradiction between the two demands, branding men's reservations against women's voting rights as soap bubble material. **Mithan Tata Lam** (01:49): Men say Home Rule is our birthright. We say the right to vote is our birthright, and we want it. **Narrator** (01:57): In 1919, Mithan toured around Britain with her mother and other women to present a memorandum on the women's franchise while the 1919 Government of India Bill was under discussion. **Mithan Tata Lam** (02:08): Why should India lag behind others in this respect and create a barrier where one does not exist and thus brand Indian women as inferior to their sisters in other countries. **Narrator** (02:19): On behalf of the Bombay Women's Committee of Social Workers, Mithan toured England and Scotland lecturing on the need for equal voting rights for Indian women. She was one of the speakers in the House of Commons along with Annie Besant, Sarojini Naidu, and Major Graham Pole to speak for women's right to vote in India. The effort resulted in the first Indian reform bill passed as an act of parliament. The only one to let women vote immediately was Madras in 1921. While in London, she decided to pursue a legal education and a master's degree in economics from the London School of Economics. On 04/13/1920, Miss Tata got admitted to Lincoln's Inn only one year after the 1919 Sex Disqualification Removal Act had allowed women to enter public office. In 1933, Mithan married Jamshed Sorab Lam, a lawyer and registrar who encouraged her in her work and activism. In her early days, Mithan stated how grateful she was to have a supportive father who encouraged his wife and daughter's education. **Mithan Tata Lam** (03:21): I have been greatly lucky in my menfolk, a liberal father of very advanced views, a loving and generous husband, and a fine son. **Narrator** (03:31): During her stay in London, she associated with several other women leaders such as Sarojini Naidu and Annie Besant, who helped her liberate her thoughts and were also active in campaigning for women's rights in India. She was called to the bar on 01/26/1923, less than a year after Ivy Williams, the first woman to be called to the English bar. In the winter of 1923, Mithan Tata joined the chambers of legendary Bhulabhai Desai at the Bombay High Court and became a professor of law at the Government Law College in Mumbai, the first woman professor of law in India. Mithan bagged her first legal case from a client who wanted to inflict upon the opponent the humiliation of being defeated by a woman. She recalls appearing in court, arousing the curiosity of men who peep through the doorways to catch a glimpse of this unique species. In 1925, Lady Meherbai Tata, wife of Sir Dorab Tata, established the National Council of Women in India. President Tata led the legislative committee to improve women's status. As a sign of their first victory, the Bengal presidency passed the bill for women's suffrage in 1925, and Punjab approved it in 1926. The same year, the British parliament allowed the government of India to amend the electoral rules, granting women the right to become legislative members. Madras immediately granted women the right to contest elections from the provincial legislative council. Mithan wrote in her journal to educate the public about women's empowerment and the need for education, which should be equal for both men and women. When Mithan was called to the bar in London, she stated **Mithan Tata Lam** (05:21): The history of India holds witness to the women rulers and philosophers who fought for their territory and that they should receive the right to vote and be considered equal. **Narrator** (05:31): She was appointed as a justice of peace and executive magistrate as well as a member of the committee of the Parsi Marriage Act of 1865, which helped her to contribute to the amendment of the act that came to be known as the Parsi Marriage and Divorce Act of 1936. In 1947, the government of India appointed Mithan as the women's committee's chairman for the relief and rehabilitation of refugees from Pakistan. The same year, she was appointed the first woman sheriff to the Bombay High Court. From their headquarters, Mithan with other women workers visited the camps at Mulund, Kalyan, and other parts of the state, traveling extensively to bring comfort and help to the uprooted women and children who had been victims of the partition of India. Later, Mithan retired from the legal profession of her own will and devoted her time to social work. She joined the Maharashtra State Women's Council and was elected chairman of its labor subcommittee. Along with other committee members, she started to work in the Matunga Labor Camp, which was one of the slums in Bombay. She advocated for democratic rights, otherwise deprived to women, especially voting rights. As part of her work, she also succeeded in providing them with some basic facilities like electricity, water, a dispensary, a nursery school, and sewing classes for women. Later, she became the president of the Maharashtra State Women's Council. But her activism was not restricted to only women's issues. She also spearheaded hunger eradication programs, anti child labor advocacy, and slum improvement projects in India. In 1928, she joined protests with the Bombay Youths League about a proposed school fee hike for secondary education in India. The Bombay Chronicle noted In 1962, the government recognized her contribution to Indian society, and she became a recipient of the Padma Bhushan. --- ## [Interview] N.G. Ranga - Guardian of Peasants' Rights URL: https://indianliberals.in/primary-works/n-g-ranga-guardian-of-peasants-rights/ ### Body # N.G. Ranga - Guardian of Peasants' Rights Source: https://www.youtube.com/watch?v=L8cROlCrq-Q Duration: 122.5s (empty transcript) _Cleaned: skipped (transcript empty or too short for speaker identification)._ --- ## [Interview] The Public Distribution System : A Boon or a Bane? URL: https://indianliberals.in/primary-works/public-distribution-system-boon-or-bane/ ### Body # The Public Distribution System : A Boon or a Bane? Source: https://www.youtube.com/watch?v=1yErKQisBB8 Duration: 149.1s Speaker 0 (00:05): Public distribution system politicians corruption. _Cleaned: skipped (transcript empty or too short for speaker identification)._ --- ## [Interview] Role of Civil Society in the Pandemic URL: https://indianliberals.in/primary-works/role-of-civil-society-in-the-pandemic/ ### Body # Role of Civil Society in the Pandemic Source: https://www.youtube.com/watch?v=wmuWgBJ9OWM Duration: 342.9s **Speaker** (00:05): The pandemic has done two things. Yes, you are right that it's expanded the scope and the scale of government role or engagement. Right? There's no doubt that's true across the world. But it, I think, also at the same time — that this something is not as emphasized or talked about, unfortunately. Right? Is the scope, the scope and the scale of civil society. Right? As you know, it is in India that we know more, more specifically. Right? Much of the initial help that people needed, right, as the businesses, as a lockdown got implemented, right, businesses got closed down. Right? People who were daily wage earners, the small entrepreneurs on the streets of India, right, all of them lost their livelihood almost overnight. And much of the support for that group of people in the country — and there are 700 millions of people in that group, right, who live, making living on a daily basis. Right? And they got support not so much from the state. A civil — how civil society has come together and take up the mantle of leadership in providing that initial support. Yes, civil society is limited in capacity to some extent — it comes so hard, the skill that they can provide you support. And, ultimately, you do depend on the state to continue that work, but much of the initial help came from civil society. Right? And it also makes sense. The government does not know where the people are in that sense. Right? People know where the people are, and therefore, people are the best sort of early helpers in any, any catastrophe, any tragedy. I think lockdown impact, in the severity of that impact, to the extent that it was so counterbalanced is largely because of civil society efforts. So I think that part must be emphasized. I think we don't see much talk about it because data is not easy, as easily available. Right? Nobody talks about that I contributed 10,000 or 20,000 more, plan to lakhs, or 10, right, to various groups of people, including people who used to work in my own company or household. And then that part of this is difficult to collect data, but I think it's important to remind people how critical that has been in weathering the storm. I, I do agree that, no, there's a huge challenge of the scale at which state has expanded, both in terms of, in terms of private lives. And, of course, there are very good reasons given that we need to do contact tracing, that requires that you authorize particular apps to be able to track you down, right, and also track who you are meeting, who are the people in your surrounding areas, where you have gone. Now I think we know there are better ways of doing it. Right? You can have contact tracing without any central database being created. So we can keep things localized on the cell phones of the people, right, the app that people are using. So there are many ways in which we can follow some of the procedures we need to follow for safety and health, right, without giving too much power to the state, without giving the data the state can abuse now or later. I think there's a lot of learning that we had in terms of how to use technology more effectively and then constructively, so that we don't give up the personal liberties and freedoms. And also, I think, personal information, to people who don't need to add that information. There's also other side to it is a fiscal problem. Right? So one is the privacy and personal freedom issue. Second is, there was fiscal issue in terms of the expansion of the state. Right? And as you know, the scale of subsidies and handouts and the state support which has been given to people. I think that this needs to be analyzed a little more deeply in terms of how much is really helping, how much is simply helping the state to expand its powers and intrusion in people's lives? I think there has to be some balancing act that we need to think about. Yes, people do need help. There is no doubt. But there are better ways of helping them, as we found in case of technology, better ways to do the contact tracing without really giving all information to one single central database. I think we do apply that thinking also to the fiscal support that we need to provide. I don't want to go into sort of mechanics of how to do that because there are, of course, many ideas on the table. Right? And this is well discussed, debated issue. I think it does require deep thinking on our part. But how do you create a system where people get the help they need without actually the fear of the future? Important phase. The internal vigilance is the price of liberty. Right? It's far becoming far more evident, right, on a day to day basis now. Unless you keep eye on what the state is doing, how it's been done, we are going to be in a far worse situation coming out of the pandemic than we went into. --- ## [Interview] Role of Ideology in India's Liberalisation URL: https://indianliberals.in/primary-works/role-of-ideology-in-indias-liberalisation/ ### Body # Role of Ideology in India's Liberalisation Source: https://www.youtube.com/watch?v=SFVJ7aF5ts0 Duration: 392.0s **Speaker** (00:05): So I think there was an ideological component to India's economic liberalization that started in 1991. I think the old economic policies were motivated by a different ideology that changed in the course of the eighties. And what shaped the new policies was a different ideological vision, a more liberal ideological vision. The old ideology was what is often called a Nehruvian consensus. So the Nehruvian consensus was that, unlike in China and Russia, we want to avoid a conflict between the property holders and without property. And the Indian leaders were very much in favor of redistribution, but they wanted to avoid the class conflict that had led to violent revolutions in Russia and China. And so what they did was they said, okay, we are not going to expropriate the property after property class after independence, but instead, we are going to implement such economic policies that the fruits of any future economic growth, okay, would largely go to the poor people. Okay? So property people, you can keep your property. Okay? But future growth is going to be for the benefit of the poor. And that was the Nehruvian consensus. Now, implementing that Nehruvian consensus required sacrifices all around. It required the freedom of the property holders and the business people to be highly circumscribed, ok, because of the interventionist state. There were high taxes. There was the License Raj. There were import controls. Also, people's consumption had to be curtailed in order to generate the resources for investment to push for the state led, the state led industrialization. And it is difficult to extract resources from people for, for that was required for planning under a democratic setup. And, in order to justify their actions, in order to justify their interventionist economic policies, the Indian leaders relied on certain ideological beliefs that were already very prevalent in the Indian society. So one of those beliefs was a strong suspicion of businessmen in India, and that is also related to the caste structure. So in the Indian caste structure or the Hindu caste structure, the businessmen don't rank very high. They are the third caste in the hierarchy of castes. And so those who come from the top two castes, the Brahmins, the scholars, the castes from which most of the national leaders were drawn from, looked down upon businessmen. And so traditionally, business activity has not been accorded a very high social status in Indian or Hindu society. And the Indian leaders were able to draw upon that low status of businessmen to to to justify exercising control over them. You don't want to entrust the nation to these business people, do you? Right? And it's better to leave economic policy to the hand of the scholars, disinterested people, which is what the Indian leaders considered themselves to be. The second ideological point that Indian leaders were able to draw on was this idea that individual desires should be subdued to the needs of the community. And, in this case, the community was the nation state rather than, you know, your smaller local community. And so people were told, right, you guys wanna consume, you guys wanna import, you guys wanna do business, but we can't let you do that because the needs of the community, the nation state, the developmental needs of the nation state are paramount. Okay? Now, over the course of the nineteen eighties, those ideological beliefs kind of weakened and this is what we see in the films. Okay? People were no longer willing to suppress their individual desires, okay, for the benefit of the community as a whole. And businessmen were no longer seen as necessarily antisocial elements. Okay? People were beginning to think that trading, commerce has some redeeming social qualities. And it was because of these two cultural or ideological changes in India that the Indian government was able to move towards more economically liberal policies in the nineteen nineties. --- ## [Interview] S. Divakara on Nani Palkhivala's Union Budget Commentaries URL: https://indianliberals.in/primary-works/s-divakara-on-nani-palkhivalas-union-budget-commentaries/ ### Body # S. Divakara on Nani Palkhivala's Union Budget Commentaries Source: https://www.youtube.com/watch?v=3imZDLWPs3A Duration: 473.6s **S. Divakara** (00:08): One of the objects of the Forum also is to bring younger and younger people on its platform. That's how Mr. M. R. Pai, who was the first Secretary of the Forum of Free Enterprise right since the day it started until 1978 when he resigned as Secretary and became our Honorary Vice President, he discovered Mr. Nani Palkhivala in 1957. Somebody told him that there is a very brilliant lawyer, who is specialised in taxation, so he had set an appointment with him, he met him on the 11/01/1957. The result was Mr. Palkhivala's first talk, public lecture, the subject was recent changes in tax structure, that was on 12/02/1957 at the Green's Hotel near Gateway where the Taj Intercontinental is standing now. And he spoke on the Union Budget for the first time in March 1958. The audience was about 800. From 1958 to 1962, he spoke in that venue, when the hotel people told Mr. Pai, we can't afford to have our meetings here because we can't accommodate the people who come, audience went on increasing. So 1963 the meeting had to be shifted to Museum Hall, even that was found to be inadequate. So 1965 it was shifted to the CCI East Lawn, and there the first year the audience was in the region of about 3,000. It went on increasing — 3,000, 5,000, 10,000. 1982, it exceeded 20,000 people, I could see because I was involved in arranging that meeting, and people standing on the walls, sitting on the balconies, everywhere, every possible place. And Mr. Vijay Merchant, he was presiding over that meeting. Casually he told me, Divakar, why don't you shift it to the Brabourne Stadium? And next day, I went to him in his office, he was President of the CCI, Cricket Club of India. What brings you here? I said, Mr. Merchant, yesterday you said that we should shift it to Brabourne area, we want to shift. Then he thought, no, I only joked. I said no, we want to take it seriously. Then he said, you give a letter, I'll put it in the committee. And within matter of two weeks he said, the committee has agreed to your proposal, we'll be happy to accommodate your meeting. So from 1983 till 1994, all our meetings addressed by Mr. Palkhivala on the budget were on the Brabourne Stadium, which is now known as Brabourne Stadium. Except in one year in 1991, he did not speak because of the heart surgery, and the attendance went on increasing. The first time we went to Brabourne Stadium it was 35,000, it went on increasing — 92, 93, 94. It is not my estimate, estimated by the newspaper, they said it was in excess of 100,000. I still remember we used to be very closely in touch with Professor Milton Friedman, because we had the privilege of having him on our platform a couple of times earlier, we have also published his booklets. We used to keep him informed about our activities. One of the annual reports mentioned about the attendance at this meeting, he saw the photographs, said it is mind-boggling, this attendance is mind-boggling. And in fact there are many — in many meetings I could see people from other countries coming. Mr. Pai too also told me that there have been instances where parliamentarians from England and from Australia, they have attended. I used to get telephone calls right from November-December onwards — the meeting is always in the first week of March — from November-December onwards from company secretaries asking, Mr. Divakar, when is the meeting of Mr. Nani Palkhivala on the budget next year? Because we want to schedule our board meetings to suit our outstation members and our directors to attend the meeting. And there have been many such instances. And from February onwards, I was always flooded with telephone calls, please reserve a seat for me, please. Actually these invitations had no meaning because it was a public meeting open to anyone. We were only blocking a few seats in the front rows for Mr. Palkhivala's friends and our own supporters and others. We are keeping about 10,000 chairs, and in no time we open the gate at five, by 05:15 it will be full. And then people who come later will go to the stands, and there has not been one single instance where we had any problem with the audience, I must salute the audience. And we always were keen — Mr. Palkhivala said don't put up any barricade anywhere, because he did not like those barricades which are generally put up in such meetings. Not once did anyone give us any trouble. If there is a chair they will go and sit, otherwise they go to the stand or they come and sit on the lawns. In fact I remember a couple of times when at least once two Tata directors came a little late, one of them got a chair, the other man did not get. I saw him sharing a chair with another one. Next day I telephoned him, I said sorry, I did — Dr. Freddy Mehta. I said, Dr. Mehta, I'm very sorry, we couldn't give you a chair. And no, Divakar, it is not your fault, it was my fault, I came late. Initially, we were from 1956 till 1991, we used to have a number of meetings every year on economic subjects, and there were any number of subjects also available. And after the liberalization, of course, what we wanted was achieved through liberalization, the rates of taxation came down. At one time in the early 60s it was 97.5, now it is in the 30s, 35% or something like that. And in fact, he used to address meetings on the budget in other places also. After speaking first in Bombay, he will go to Bangalore, Chennai, Hyderabad, Calcutta, Delhi, Ahmedabad and sometimes Pune also, and sometimes there are couple of other places. Every time in Bangalore the meeting was held at Vidhana Soudha Banquet Hall, because the local chamber of commerce, the Federation of Karnataka Chamber of Commerce, always involved the Chief Minister as president of the meeting. In one meeting Mr. Veerappa Moily was the Chief Minister, he was presiding, he made a very fine remark. He said, as a student I used to attend Mr. Palkhivala's lectures, he was very critical of the budget. This time he has praised this budget. Because that time it was V. P. Singh's budget, he praised the first budget of Mr. V. P. Singh. Mr. Palkhivala said there are many good things in the budget. So, what Mr. Veerappa Moily said was, all these years he was critical, this year he has praised the budget, that means Mr. Palkhivala has not changed, the government has changed its policies. --- ## [Interview] S. Divakara on The Forum of Free Enterprise URL: https://indianliberals.in/primary-works/s-divakara-on-the-forum-of-free-enterprise/ ### Body # S. Divakara on The Forum of Free Enterprise Source: https://www.youtube.com/watch?v=DBdRExrgG2I Duration: 445.4s **S. Divakara** (00:00): I had the good fortune of working with Mr. M. R. Pai from 1964 till he passed away in 2003. He used to tell me some interesting story about two articles which appeared in Times of India on 03/31/1956. One was written by Mr. Murarji Vaidya and the other was written by Mr. A. D. Shroff, both were on the same theme about protecting free enterprise in our country. And Mr. Pai told me a number of times on that day I believe Mr. Farooq Mulla, who was at that time the Chief Public Relations Officer of Tatas, he was in the lift in Bombay House, Mr. Eddie Shroff also was there in the same lift. Mr. Mulla complimented Mr. Shroff, Mr. Shroff the your article is very good, he has said that an organization should be set up to protect and preserve free enterprise in our country, I will be happy to help you. Then Eddie Shroff said I will give you the money, you start, I will also be there. That is how the forum started, it was Mr. Farooq Mulla, Mr. Eddie Shroff and a number of other people. The Forum of Free Enterprise was started in 1956 by Eddie Shroff with the main object of educating the public on economic affairs. The Forum publishes booklets on economic subjects, we have published so far about 800 booklets. Initially, we were publishing almost every month one booklet, sometimes more than one booklet, all having a bearing on economics. Number of public meetings have been held since 1956, in fact it's just more than 2,400 public meetings, most of them in Bombay, but hundreds of them have also been held in different parts of the country with different speakers on different economic subjects. When the forum started, of course, there was some opposition in fact from the business community itself because they were scared of coming on a platform which was opposed to the Government's economic policies. But it must be said to the credit of the founders of the Forum that they maintained their integrity, their transparency and their approach to issues. The Forum does not take any stand on any economic subject or any policy matter, but it allows people to come and air their different views on economic subjects. A number of well known economists and others have appeared on our platform. We had the privilege of having on a platform Professor Milton Friedman on more than one occasion, Professor Peter Bauer had come. In fact, I had the privilege of arranging his meeting. In August 1965 when Mr. A. D. Shroff was President of the Forum, he always liked to encourage the young students to participate in economic activities. His belief was every Indian whether you are a doctor, engineer or any other professional should have some knowledge about basic economic problems of the country. He always encouraged the students. From the very first year the forum was conducting All India essay competition for college students with the object of helping them to think and write on economic subjects. So, in August 1965, Mr. Eddie Shroff at one of the committee meetings of the forum said we must also institute elocution competitions for college students to enable them to think and speak on economic subjects. After Mr. Pai died in 2003, we started the M. R. Pai Foundation in 2004 and after Mr. Palkhivala passed away in 2002, we started the Nani Palkhivala Memorial Trust in 2004. So together with these two organizations, the A. D. Shroff Memorial Trust, the Forum of Free Enterprise has been organizing jointly various programs for the youth, main object is developing good citizenship. Palkhivala Memorial Trust organizes every year a memorial lecture and the first lecture was delivered by Mr. Fali Nariman and then a series of eminent persons have delivered this lecture. Last year we had Mr. Harish Salve, before that we had the then Chief Justice Mr. S. H. Kapadia, then Mr. Soli Sorabjee, Mr. Narayana Murthy, Mr. Arun Shourie, Dr. Bimal Jalan, the various number of eminent people have delivered the lecture. The Trust also gives the Nani Palkhivala Civil Liberties Award to those who protect and preserve civil liberties and human rights in India every year. The award carries a cash prize of 2.5 lakhs at the citation. The M. R. Pai Foundation is an organization where we have been mandated to have programs for the youth in small towns and cities. So, we go to at the present we are going to about six states Gujarat, Maharashtra, Andhra Pradesh, Tamil Nadu, Karnataka and Goa where we have about 40 to 50 leadership camps of two days each, where interactive sessions are conducted by expert trainers on subjects such as goal setting, communication, teamwork, communication, self esteem and allied subjects. And we are deliberately going to small towns and cities because there the youngsters do not have any exposure. In cities the students are saturated with any number of activities, but in small places this is the only activity they have. The forum is still like non profit, non political organization and fortunately for us their brand has been built over a period of now we will be completing sixty years in 2016, that brand name has been built, we are happy about it, wherever I go the forum is recognized, I don't have to, in fact Mr. Pai had the experience, he was travelling in aircraft and for me I believe Mr. George Fernandes who was a minister at that time, he was in one of the front rows and he happened to see Mr. Pai and then he come where he was sitting he showed a book of the forum to Mr. Pai, Mr. Pai I am reading your booklet, that is the brand that is the popularity of the forum that Mr. Pai has been able to build. And I met Dr. V. K. R. V. Rao who was known to be a very, was a minister in the Indira Gandhi government, was supposed to be a staunch socialist and I met him in a wedding, I was introduced to him and then he asked me what are you doing, I told him I gave him my card, this was in the 80s, by the time he had given up his office, then he took me to a small corner, you are doing good work, you continue. Mr. Pai told me when the forum started he was one of the staunchest opponents, now he is recognizing what we are doing but this is a fact. --- ## [Interview] Shetkari Sanghathana : A Movement for Freedom - Part II URL: https://indianliberals.in/primary-works/shetkari-sanghathana-a-movement-for-freedom-part-2/ ### Body # Shetkari Sanghathana : A Movement for Freedom - Part II Source: https://www.youtube.com/watch?v=kUaD_a1VdVE Duration: 274.0s (empty transcript) _Cleaned: skipped (transcript empty or too short for speaker identification)._ --- ## [Interview] Shetkari Sanghathana : A Movement for Freedom - Part I URL: https://indianliberals.in/primary-works/shetkari-sanghathana-a-movement-for-freedom-part-i/ ### Body # Shetkari Sanghathana : A Movement for Freedom - Part I Source: https://www.youtube.com/watch?v=D8tp7pIdEA0 Duration: 362.3s (empty transcript) _Cleaned: skipped (transcript empty or too short for speaker identification)._ --- ## [Interview] Sunil Bhandare on Getting Disillusioned With Socialism and His Journey to Become A Liberal URL: https://indianliberals.in/primary-works/sunil-bhandare-on-getting-disillusioned-with-socialism-and-his-journey-to-become-a-liberal/ ### Body # Sunil Bhandare on Getting Disillusioned With Socialism and His Journey to Become A Liberal Source: https://www.youtube.com/watch?v=3S_AFbaYqZs Duration: 685.6s **Sunil S. Bhandare** (00:06): I was working with the Reserve Bank of India from 1962 to '67. We were under tremendous influence of Nehruvian ideology and that was quite natural because the surroundings in the Reserve Bank of India was typically supportive of that kind of a thought process. And for us, we were being told during those days that at the age of 20, if you are not a socialist, you need to examine your heart. And therefore, all of us were typically emotionally being driven. We were more guided by the socialist thought process. My journey towards liberal thought came very much later. Till about 1974, I was typically a socialist minded in thought process. In 1967, I joined Tata's. Although in my early stages of career, I would have probably been influenced by what the private sector is trying to do. And there was giants like Mr. Palkhivala, and we used to hear about A. D. Shroff, we used to hear about the Forum of Free Enterprise, Mr. M. R. Pai. And I used to attend some of their public meetings, but nevertheless, I never got really impressed by what was being done there. And I used to read Economic and Political Weekly and those those were the days when Economic and Political Weekly used to be quite attractive for us. Also, my colleagues from the university, they were also by and large of leftist orientation by and large. And although there were couple of professors like Professor Brahmananda, C. N. Vakil, they had a different thoughts even on the second five year plan for example. But nevertheless, I think we never got very much sort of impressed by the liberal thought process. And I never got even in fact, you will be quite surprised that 1969 when bank nationalization took place, we were the ones who sort of appreciated that kind of a state while working with Tata's and that was quite, I mean, in tune with the prevailing scenario. Then the whole process went on till about the emergency was declared. Around that time, we started reading about what is going wrong with the public sector enterprises, how the third five year plan has failed, and then how the plan holidays are getting announced, planning commission was not becoming effective. Then the Nehruvian ideology gradually was losing some kind of an appeal for the youngsters. So somewhere around after that emergency, we started thinking about different thought process and that's how the liberal thought process sort of started guiding my own thinking. And then, I got in touch with Raju and then also the Forum of Free Enterprise and that's how the the influence started gathering momentum. And then I started also addressing some of their public meetings on very interesting, but not necessarily deep thinking kind of public meetings. So gradually, we started feeling that there is nothing great about the erstwhile socialist thought process, it has not done anything for the last previous twenty years since the beginning of five year plan. And therefore, I think we need to think in terms of something which is better alternative for the for the economic system. We started analyzing what what is going wrong with the public sector enterprises and then there there was a Professor B. R. Shenoy's wonderful speech and articles on the public sector vestige wherein he tried to sort of articulate how the public sector has not done the kind of things which were expected. But here are fundamental issues also and those fundamental issues about public sector is not the thing which is right for this for this economy. The the the idea of government is needs to be quite different. It has not to be in the business. The the business of the government is to do the governance and not to be in the business. So those ideas started attracting our attention, and we started believing in those ideas. Now, we also saw that private sector by and large has started doing lot of good things and having worked with Tata's and then that was a interesting experience because before the reforms process started, we were used to sending the memorandum to the government and memorandum on what issues on licensing policy, memorandum on Monopoly Restrictive Practices Act and it will be quite sort of people would not believe that during those days a group of enterprises which had asset together of 100 crores were considered concentration of economic power. Now, are small medium sized companies nowadays which invest 100 crores. But during those days Tata Steel, Tata Motors, Tata Chemicals, all these companies got interrelated. And by virtue of their interrelationship, they became a monopoly house. And being a monopoly house, we used to approach the monopolies commission whenever the applications were being made for some industrial license. The classical example was when Tata Steel wanted to expand its capacity, I believe from 2,000,000 tons to 3,000,000 tons for that extra 1,000,000 tons you have to your application used to be held up, it used to go through the licensing committee from licensing committee to monopolies commission and the whole thing oftentimes gets scuttled. There never used to be things which were granted easily. Similarly, when the Tata Motors wanted to expand their capacity, I thought it was 12,000 numbers they were producing commercial vehicles and they wanted to increase it by another 8,000. There was a whole lot of capacity in terms of infrastructure which was there, but the Tata Motors was denied that. So those were the days and you know during those time I think the JRD Tata, the chairman of the Tata Group used to write in his chairman statement stories about how the companies have been denied the opportunities of expansion and growth. In fact, he wrote on the question about entire pricing policy for steel. And that pricing policy led to, of course, creation of black market in the steel sector. But the companies were denied the opportunities of generating enough of profits by pricing the steel depending upon the market conditions. And he said that if they were given the right kind of prices, probably the Tata Steel would have been able to expand its capacity multifold. And we were importing steel, and the domestic producers were denied the opportunities to expand their production only because there will be so called concentration of economic power. Effectively that kind of a system created huge opportunities for black market use. And there used to be queues as many people would be aware, queues for cement bags to be made available, steel supply being made available for construction activity. Then there is a shortage of two wheelers. People used to stand in the queue for eight years. And my own personal experience about my telephone. My telephone, I I made an application, it took seven years for us to get the telephone. And when we got the telephone, we actually did a Puja of that telephone. So those were the days of pre liberalization period which was dominated by particular thought process. That thought process was based on the economic ideology of democratic socialism. That democratic socialism did not deliver anything for the common man, for to the consumers at large, it did not create job opportunities, it created all sets of inefficiencies and corruption and all these questions about the black money in generation used to happen during those days through this whole process. So, that was complete disillusionment about the system, the disillusionment about the model of economic development which we had chosen. And we believed in that model only because it it came down from Pandit Jawaharlal Nehru and everybody fancied him so well, so much, and that was his legacy. Of course, contribution number of other years is remarkable. But in the economic philosophy of this country and economic planning and strategy, I think he did not do right thing. He could not envisage what could happen by the kind of economic system he was trying to give to the country. So that was the story about how we moved towards different thought process, namely of liberal economic thinking. But you see, I think I mean, this was a good process. You started experiencing yourself and learning by experience you came to realize that what was being done was not correct and therefore after you realize that your earlier thought process has to be evolved and you cannot stubbornly held hold those earlier views you know in a in a dogmatic fashion. So, we became more practical and we started learning by experience and we became more oriented towards the to towards the right kind of economic thinking. I am not saying liberal economic thinking, right kind economic thinking, because liberal economic thinking eventually has proved to be the right economic thinking. --- ## [Interview] Sunil Bhandare on enlarging the "constituency of reforms" in India URL: https://indianliberals.in/primary-works/sunil-bhandare-on-enlarging-the-constituency-of-reforms-in-india/ ### Body # sunil-bhandare-on-enlarging-the-constituency-of-reforms-in-india Source: https://www.youtube.com/watch?v=toFirg2z7bQ Duration: 333.8s **Sunil S. Bhandare** (00:06): What I would call the constituency of reforms or constituency of liberal economic thinking is still restricted, is restricted to a the urban class within urban class to the elites of the urban class, the professionals, the business people, the industrialists, the traders and so on. It has not gone to the bottom end of the pyramid. Now, how does one expand that constituency of reforms, because that is the major challenge for the liberal thought process. That constituency of reforms requires a great deal of communication skills, the kind of communication skills which probably the Prime Minister Modi is trying to display. Now, that communication skills amongst the liberals is still found wanting. Now, that credibility issue comes into the picture, because people still as you said very rightly look upon with lot of suspicion on the private enterprise. The reason is that there have been number of those scams and scandals and people are familiar with what is being said as a crony capitalism, and that crony capitalism arises of the because of the fact that there are still gaps in the entire regulatory judicial system, because the system of justice, system of taking actual recourse to the various kinds of grievances that still found wanting. Now, if you have that system in place, a proper regulatory system in place, institution system in place, judicial reforms in place, probably large part of this skepticism will get out of the system. Also political leadership needs to be showing some degree of maturity, maturity in terms of what they preach and what they perform. So that is not going to be there, and I think it's going to be a very long drawn process. The long drawn process because the fact that last fifty years people have sort of completely disillusioned about the system. And because of that disillusionment, it takes very long time. For example, even the Swachh Bharat Yojana. Now if you go and ask people walking on the streets of Shivaji Park, all all of those people, they say it is a photo op operations. It's a photo kind of a session. And therefore, people don't believe. People say that this is not going to happen. So number of such schemes, which probably are seen to be doing some good is not being looked upon with certain degree of confidence and credibility. And for that mindset to change I think will take many many more years to come. Basically, I think there will be multiple approach one can think about. One is of course, there has to be good networking amongst the institutions which are working to on the similar cause. For example, I think your organization that is Centre for Civil Society, Freedom First, Liberals India for Good Governance, Forum of Free Enterprise, I think they need to network and there may be many such organizations in Chennai, Bangalore, Hyderabad and Calcutta. So, at least in cities where such organizations are there, they should do good bit of networking. The second important thing is that you normally make use of this sort of all these e-publications, those e-publications need to be shared amongst wider audience. But, you see but, that again you know all these networking e-communications and all that serves limited purpose, because people are not sort of you know used to accessing them. The third of course, is that you need to have many more sort of you know interactions to workshops being held and we need to find out a good sponsors typically the media kind of a sponsors. So, is a media organizes number of those annual summits and meets they should also organize similar kind of meets and summits of the for the liberal thought process. So, that is the kind of thing one could think about immediately. The Project for Economic Education also got subdued. The one reason for this is that there is basically a leadership problem, and the second is the funds problem, organizational problem. So and I think just for the liberal thoughts, nobody is going to give you funding. So one has to find out the right kind of funding mechanism, right kind of leadership, and organization for these things to really get off the ground. --- ## [Interview] Sunil Bhandare on his experiences with Indian liberal organisations URL: https://indianliberals.in/primary-works/sunil-bhandare-on-his-experiences-with-indian-liberal-organisations/ ### Body # Sunil Bhandare on his experiences with Indian liberal organisations Source: https://www.youtube.com/watch?v=g52qPVVXICE Duration: 222.6s **Sunil Bhandare** (00:05): My sort of association with Forum of Free Enterprise started probably somewhere in the mid eighties, quite late, and with the Indian Liberal Group early nineties. Now, in early nineties I think there were lots of those conferences which are being organized by the Raju on understanding the economic reforms process, question about privatization, questions about globalization and so on. So I used to participate in that and there used to be a great number of great thinkers coming for those kind of deliberations and discussions. And that is how the whole process became sort of you know participative for me getting involved with the Raju's Freedom First and as well as the Project for Economic Education. Now, the Project for Economic Education, which is a wing of the Indian Liberal Group sort of thought about producing alternative budgets and just before the presentation of the normal central budget, just about two to three weeks before that or about a month before that, we used to come out with our own publication. And there were in the early stages of this particular first liberal budget which was being presented, We had a had a conference held in in what is this place sort of in Nashik, close to Nashik, I forget the name of the place, but Leslie Sawhney programme which was there and we used to have the this kind of a workshops and conferences. And the first that kind of a conference was attended by T. N. Ninan, then Suresh Tendulkar all these people were there and we used to discuss about what should be the fiscal policy for this country, what should be the trade policy, what should be the pricing policy, what should be the regulatory institutions and all that. Based on those deliberations we came out with the first Indian liberal budget and we also made presentations on that liberal budget both in Bombay and in Delhi held the press conferences and so on. It did receive some attention, but the kind of attention which we were expecting from that kind of activity did not happen. We came out with another three subsequent publications of the Indian Liberal Group's, so in all about four or five such alternative budgets were being prepared. So, these budgets enable us to at least look at the entire fiscal system at a great deal of sort of in a specific details. We had discussions with Geethakrishnan who was the former finance secretary and he was from Chennai and many others. That was a good kind of contribution which came from the Project for Economic Education for liberal economic thinking. --- ## [Interview] Swatantra Party : India's First Liberal Party URL: https://indianliberals.in/primary-works/swatantra-party-indias-first-liberal-party/ ### Body # Swatantra Party : India's First Liberal Party Source: https://www.youtube.com/watch?v=yHRwzulx6dY Duration: 202.0s (empty transcript) _Cleaned: skipped (transcript empty or too short for speaker identification)._ --- ## [Interview] Sunil Bhandare on private enterprise post 1991 reforms URL: https://indianliberals.in/primary-works/sunil-bhandare-on-private-enterprise-post-1991-reforms/ ### Body # Sunil Bhandare on private enterprise post 1991 reforms Source: https://www.youtube.com/watch?v=g52qPVVXICE Duration: 222.6s **Sunil S. Bhandare** (00:05): My sort of association with Forum of Free Enterprise started probably somewhere in the mid eighties, quite late, and with the Indian Liberal Group early nineties. Now, in early nineties I think there were lots of those conferences which are being organized by Raju on understanding the economic reforms process, question about privatization, questions about globalization and so on. So I used to participate in that and there used to be a great number of great thinkers coming for those kind of deliberations and discussions. And that is how the whole process became sort of you know participative for me, getting involved with Raju's Freedom First and as well as the Project for Economic Education. Now, the Project for Economic Education, which is a wing of the Indian Liberal Group, sort of thought about producing alternative budgets, and just before the presentation of the normal central budget, just about two to three weeks before that or about a month before that, we used to come out with our own publication. And there were in the early stages of this particular first liberal budget which was being presented, we had a conference held in in what is this place sort of in Nashik, close to Nashik, I forget the name of the place, but Leslie Sawhny Programme which was there and we used to have these kind of workshops and conferences. And the first that kind of a conference was attended by T. N. Ninan, then Suresh Tendulkar, all these people were there and we used to discuss about what should be the fiscal policy for this country, what should be the trade policy, what should be the pricing policy, what should be the regulatory institutions and all that. Based on those deliberations we came out with the first Indian liberal budget and we also made presentations on that liberal budget both in Bombay and in Delhi, held the press conferences and so on. It did receive some attention, but the kind of attention which we were expecting from that kind of activity did not happen. We came out with another three subsequent publications of the Indian Liberal Group's, so in all about four or five such alternative budgets were being prepared. So, these budgets enabled us to at least look at the entire fiscal system at a great deal of sort of in a specific details. We had discussions with Geethakrishnan who was the former finance secretary and he was from Chennai and many others. That was a good kind of contribution which came from the Project for Economic Education for liberal economic thinking. --- ## [Interview] The Case for Liberalism in Indian History URL: https://indianliberals.in/primary-works/the-case-for-liberalism-in-indian-history/ ### Body # The Case for Liberalism in Indian History Source: https://www.youtube.com/watch?v=_-N8fgzrIro Duration: 234.5s **Speaker** (00:05): Most people, when they hear about these ideas about markets, empowering poor to enter markets, to make better life for themselves through the markets as opposed to through states from handouts and subsidies. Right? People are still finding very difficult, and they feel that these are sort of Western ideas. They don't see that these are Indian ideas, which actually is one of the biggest challenge. Nothing is great disservice we have done in teaching our own history to our own children. Right? They feel that some of these ideas are completely Western ideas. Even though it's very true that, you know, most of these ideas have been there in our own intellectual life, particularly in the, you know, late nineteenth, early twentieth century, and, of course, even before him to some extent. So I think looking at these ideas as much as part of the Indian ethos, yes, they have not been dominant ideas, which is true. Like, they're not the most prominent ideas in the intellectual life of India, but they have been there. Right? There's a publication called Indian Libertarian in nineteen twenties. Right? Even though I think most people find the term libertarian very out of the context in India today. Right? But we had Indian Libertarian magazine being published regularly. There's a huge intellectual life of India that did focus on some of these ideas in a very fundamental way. Somehow we have lost that sort of trajectory, you know, in in the likes. This is not being taught anywhere in our history books, not just in school, but also in, you many people who masters in history for that. I think that's important part of our journey that we need to remember. Right? I think, secondly, if you look at the ideas of Gandhi, for example, Tagore, Ambedkar, Rajaji, right, some of just a few names of recent modern times that one can think about, you can pull those ideas together, and you will see that there is very unique Indian sort of liberal theme or a version of liberalism that one can construct. Right? Just it's already there. Right? So Gandhi's ideas in politics, for example, which are very much anarchist ideas, Gandhi did not believe in the last state. Actually, he did not believe in state at all for that matter. Right? And believed in sort of people taking charge of their lives, the public life, and not running into the state. Right? Rajaji obviously talked about free markets, completely markets, laissez faire in very different context, but very similar ideas. Right? I will talk about why this would be cosmopolitan, why world is of a theater, and we should not be limited by the boundaries of our sort of walls of the house or windows being not being opened. Right? And Ambedkar talked about how the social transformation needs to happen in India. Right? And how and there are very liberal ideas in that sense about how societies would treat each individual with the same dignity and respect. Right? Irrespective of the caste or class. Right? And that's very much a very liberal ethos in a sense that Ambedkar had talked about in terms of what India has to do to bring people the same level of dignity. I think these are very much Indian ideas. And I think we can build on those ideas. And CCS has tried, as you know, do since academy work and many other program that we run to build on those ideas. I'm hoping that, you know, as we move forward, as we have more and more people thinking about this deeply, addressing the current challenges that we are facing, that we'll we will go back and look at these ideas and begin to see how we can apply them, how we can adapt them to the modern sort of current situation. --- ## [Interview] The Case Against Neo-Protectionism URL: https://indianliberals.in/primary-works/the-case-against-neo-protectionism/ ### Body # The Case Against Neo-Protectionism Source: https://www.youtube.com/watch?v=u1tih4LpfwA Duration: 3116.6s **Sudha Shenoy** (00:02): Okay. Now what gave rise to this was reading things that is that legible there? Reading stuff that Paul Craig Roberts wrote, which is posted up on the Mises website and then the subsequent attempts to reply to him, which I thought very poor show. And so I thought someone should tackle it particularly when I found the time after time people are prepared to make grandiose statements without taking the slightest look at any facts or any figures or anything. So I thought that as an historian, it's my job to set the record straight. Incidentally, if you have any questions or anything, just keep asking as we go along because there aren't very many of us anyway, and we're all friends. So just feel free to comment or whatever. Okay. We'll start now with the things which I put up there, which are the elements of the argument. We begin by saying manufacturing employment in The US has fallen. You now import manufactured goods. You have trade deficits. Income flows out to those wicked foreigners. American assets are sold to pay for the trade deficit. Now foreigners, god bless them, own trillions of dollars worth of assets. More income flows out in rent, interest, dividends, profits. Manufacturing jobs have been exported as a result of investing overseas. Americans are now investing to sell goods inside America, dreadful thought. And now they've started importing services from Asian countries where you have low living standards, people live on the smell of an oil rag, excess supply of labor, marginal product, is not labor doesn't get its marginal product. We cannot, the Americans cannot reduce our living standards to match. We have large and growing deficits and so free trade and goods is one thing, capital mobility is something else. You might have very sinister consequences. Okay. Now my initial reaction after looking at that is, first of all, apparently, we foreigners do nothing but sit around with folded hands waiting for the Americans to make a mistake and then we come rushing in with our manufactured goods. Okay? We're just sort of sitting there passively. Second point is that the world should have stood still. If it had stood still when the American manufacturing employment was x million or whatever the magic figure is, everything would have been alright. It's only because the world has changed, yeah, in this dreadful position. Third question, of course, why has US manufacturing employment fallen? In order to create trade deficits and problems, you know, it has to be a reason. So what you've got is something simply dropping from the sky, concentrating on a few fairly what appear to be fairly obvious things. US balances saving certain features in the late nineteen nineties and then carrying on as if, you know, it all simply occurred in a total vacuum. Okay. Now my response to that runs to about three pages, but we proceed step by step. Okay. Now I have another thing somewhere here. I can't find where I put it. Oh, here we are. I'm taking everything out. Okay. So the first point, of course, is that the world does not stand still. There have been vast changes since the nineteen seventies, and what we want to do is have a look at what some of these changes are. Okay. The what the changes will add up to ultimately is simply vast increase in capital accumulation in the rest of the world, production in areas which hitherto had not had industrial production, and therefore everybody else obviously having to adapt. You can't keep on doing what you've been doing for the last fifteen, twenty, thirty, forty, a hundred years and then expect to continue along those lines. Okay. So that the first thing is the new developments that we've got. First of all, we have continued capital accumulation, continued development in all the developed countries. Western Europe, Japan, all moving even further into industrial production, new types of industrial production, etcetera. Then what we also have is the the growth of industrial development in the East And Southeast Asian territories, South Korea, Taiwan, and the newly industrialized countries of Southeast Asia, Singapore, Malaysia, Thailand, Indonesia, etcetera. Okay. And therefore what we have is, as I said, also now China. And so therefore in consequence what we have is the need to adapt. And so what we have is adaptation in the developed areas. Developed areas adapting which has been occurring in all developed areas since the nineteen seventies. Okay. I might add that the growth in these countries is not new, and it is something which has been going on for a long time. Now finally, it's reached the point where even The US has to take account of what's going on. Okay. Japan, as we know, has been developing since at least the sixteenth century. It's continuing. South Korea, seventeenth century onwards. And in the early nineteenth early twentieth century started developing as part of the development of the Japanese economy in relate as you might say the career sector of the Japanese economy. Southeast Asian countries, international growth of the international economy in the late nineteenth century produced growth there. Growth in both the economy and in populations. Huge increase in populations all around And that growth was of course export of commodities to manufacturing countries. And then on top of that you had further industrial growth in the twentieth century. Okay. I might add that the newly industrializing countries of Southeast Asia only developed after the late nineteen seventies because then government stopped protecting industries and open economies up. So that is in itself another example of the growth to market order. And of course China only developed after its rulers opened it up to the market economy. Okay. And so therefore, as a result, you have the growth in all these areas, therefore growth in exports from these countries. Okay. US therefore no exception also having to adapt. One method of assessing the growth of production in the outside world, and that is the proportion of foreign trade to aggregate output in The US. 11% in 1970, 26% in 2000. I might add that for all the developed countries, the proportions usually run from 35 to 60% and more. In other words, they're all completely and fully integrated into, world economy. And most developed countries are in a sense sectors, the British sector, the Australia sector, the German sector, etcetera of the world economy. Okay. Another example of increasing capital accumulation in the early nineteen sixties, as I if you've got a I haven't put it up there, but if you looked at the world's largest banks, insurance companies, chemicals producers, car manufacturers, etcetera, most were American. But by the early nine early nineteen eighties, the majority were non American. Japanese, German, Canadian, French, Swedish, what have you. In other words, capital accumulation elsewhere produces results which everyone has to adapt to. Okay, as capital accumulation grows and diversifies, we have labor moving into those occupations where labor is the chief import. Therefore, you find growth of services. And that has been true of all the developed countries. I don't know if any of you remember this, but I do. Back in the late nineteen sixties, and this was first observed, the chancellor of the exchequer imposed his notorious selective employment tax in Britain to try and reverse the process. And what happened? Manufacturing employment declined by 38.5% between 1975 and 2001. Okay? Even in Japan you find the decreases. Now the decreases are first proportional. And then in more recent times, can have a look, there are absolute declines. So that again, The US is not exceptional. Everybody has been experiencing decline in manufacturing employment. Even in the newly industrializing countries, you find there's a slight relative growth in services. Okay. Now I've got I don't know if I've mentioned there the I'll come to that later. Anyway, if you have a look at the direction of trade for The US, what you find is that, of course, the bulk of the trade is with the developed countries. In other words, its trading main trading partners are the ones whose manufacturing employment is also falling. Okay. Right. Now if we go on from there and tackle next question, And that is capital exports and imports. Capital exports and imports. Now I would like to underline the point that US capital exports have been going on since the late nineteenth century. So capital exports are not new. And the, operations overseas or in foreign countries have been exactly virtually this, in the same category throughout manufacturing. Particular kinds of manufacturing at which the Americans are best, mass production, high technology, capital intensive, relatively little labor, relatively little skilled labor, and producing again the kinds of mass production goods. A range of things, cars, of course, obviously, goods, adding machines, office machinery, lifts, all the lifts in the world are probably American elevators and so on. They've been doing this since, you know, late '18 late nineteenth century. US inward investment into The US again unchanged. Going on since the nineteenth late nineteenth century, exactly the same, people as who invested in the late nineteenth century are still chief investors today. And more or less, again, broadly the same lines, the kinds of things which they are best at doing, French producing cars, tires, Italians also producing tires, and certain sorts of highly specialized goods, which in fact, these companies produce for the world market. So they're simply add also producing for the for The US market. Okay. So that it's no use looking at capital exports or capital imports. As I said, these things have just been going on. Okay. So we now come therefore to the other points that were made. The actual figures for US balance of payments. Now one reason why I again raised that issue is because again we have lots of economists who are prepared to say, of course, it's really foreign central banks and others holding US dollars. Therefore, we can run a trade deficit. In other words, the rest of the world gives us the goods, free in order that they might have the privilege of holding US dollars. Okay. Well, let's have a look at the numbers then to try and see, exactly what sorts of numbers are involved. I've also, looked at separating the private transactions from government transactions for a particular reason. And what we see okay. Have a look at all these numbers anyway. Yeah. Might be useful. Okay. There we are. I've just pointed out that the FDI in The US comes mainly from the developed countries. And if you have a look, it's exactly the same countries that were investing at the end of the nineteenth century. Japan is in fact minor proportion of the total and all the others have in fact declined again proportionately. Alright. Now what I did there for the next two tables, if you'll have a look, please, is classified according to the inflow and outflow of foreign exchange. That is probably the simplest way of putting it all together because then put in both capital and current account transactions. And I did that for 2001. You can do the same for all the other, years. Right. Now, if we look at private transactions, we find exports of goods, exports of services, and imports of services, and we'll come back to this. We have, you know, import of services increasing, etcetera, etcetera. You notice that there is still net export of services. Income in, income out, there's still net income inflow. Capital inflow which provides foreign exchange, and you'll notice at the end that the private sector has not only been providing all of its own foreign exchange requirements, there's even a surplus which can go to government if government wants it, probably always does. Okay. And if you look at government transactions, you'll notice a very small inflow, very large outflow. And in fact, I don't know why that's happened there but the income out has been a huge increase in more recent years and possibly someone who knows what's going on would be able to tell me but that is a major outflow on a government account. Okay. And as you can see, it's in deficit and the deficit has been made up by private sector earnings. Okay. Now what does this mean? This means that again the sky is not falling. Exactly, you know, perfectly normal situation. From various sources, private sector has been obtaining foreign exchange from various sources, and it's been using it for various purposes. Okay. Now before I let me go on to have a look at the overall picture, and then we'll go back to see about capital inflows and outflows, what exactly they do. **Speaker 1** (17:07): The number at the bottom **Sudha Shenoy** (17:08): there Mhmm. 94,000,000,000. Yep. Is that trade debts? No. No. No. No. No. No. What is it's simply inflow foreign exchange, outflow foreign exchange. Ignoring everything. Just whichever things brings in the exchange and takes it out. And as you can see, the US government overall is in deficits and someone else has we had to supply the foreign exchange. That's for 2001. Now I haven't done all the years. It could be done. I work better at using computers. What I've done there is simply looked at these one two three four five years. Now I haven't actually looked further into these figures, would like to, but you'll notice that so far as the private sector is concerned, in general except for two years, it's been providing itself with its own foreign exchange. So the earnings of foreign exchange and outcurve foreign exchange more not just balanced, but in 2001 you provided the US government with some money. 1990, there was a small surplus. And in the two years in which apparently US government has been supplying the foreign exchange, you'll notice that practically all went straight into private sector transactions. The important thing really is the extent to which the US government has been met, demanding foreign exchange with someone else has to supply and that someone else being either other central banks which means that the poorer populations of poorer countries are providing goods for free so that their governments can hold US dollars so that US government can run a deficit on its own account. Alternatively, in some years, as I said, you've had the inflows. Now as I said, I want to go into these further, but I suspect that in the years in which I haven't had a look, you'll have pretty much the same sort of pattern. Okay. Now capital imports, capital exports, what do capital imports and capital exports do? If you're going to be a net capital exporter, you have to save the foreign exchange, and that means you have to run a capital current account surplus. This is first your economics, sir. And, therefore, you can run a capital account deficit. Vice versa, if you're a net capital importer or net, then you have a surplus in capital account and because people are investing in your country, your territory, you can now get in extra goods from abroad over and above your own current earnings. So you have extra goods coming in. And if it's on capital account, it means that in, in effect, you're you're, getting in extra capital goods from somewhere without reducing your own domestic production of consumer goods. Okay. Now The US before 1981 ran a capital account surplus, deficit in the current account surplus. In other words, it was a net capital exporter. Since then, things turned around and The US is now capital importer and therefore runs the current account deficit. It is in a position to import effectively, increase its supplies of capital goods without, reducing consumption because other people are wanting to invest in here. Okay. Now it's consistent. That picture is consistent because clearly you've got far greater capital accumulation elsewhere, therefore, they're investing here. It is not a case of individually outrunning your own budget and therefore having to borrow and therefore having to sell your house, etcetera, etcetera. The great fallacy of treating the nation as if it were a single individual, it is not. Your balance of payments is a summary of what millions of people are doing. And that's the way it has to be analyzed is what millions of people are doing, the net result. And that shows up because someone somewhere collects an estimate. So balance of payments figures. Okay. What else can I go on to talk about, which I had a note, to talk about? Oh, yes. The growth in capital flows, again consistent with increasing capital accumulation everywhere. In, China as I said, investment has come from Hong Kong, from Taiwan, the overseas Chinese. The Japanese have not only been investing in Western Europe and The US, they've also been investing in South Korea and in the newly industrialized countries. Most of the growth in Southeast Asia is to a large part due to Japanese capital exports. And South Koreans now exporting to Southeast Asia etcetera and therefore obviously part of all this you've got, increasing flows from The US to Western Europe and increasing flows from Western Europe to The US. If you look at the figures, you have, what appear to be two away flows, what is really simply increasing production of specific kinds of goods as a result of capital accumulation, complementarity if you want. Okay. Import of services, I'll go back to that argument. People in the underdeveloped areas have very low living standards, live on the smell of an oil rag, Americans have mortgages to meet, we can't reduce our living standards and therefore it's impossible for us to compete with suppliers of services elsewhere. Two comments, one, these were exactly the arguments that are put forward for objecting to import of goods from the poorer countries. The workers live on the smell of an oil drag and therefore they'll be able to sell their goods dirt cheap and therefore we will all suffer and we can't allow these imports to come in. Exactly the same services. Three comments actually. Second comment, this is a very insulting attitude to take towards peoples of the undeveloped areas because the peoples who supply these services represent the investments of their families. You have to have long training periods in order to provide computer services, bookkeeping, whatever services are being imported. Lots of people fail, fall by the wayside. So what you've got are people who have large debts to pay, who owe their families, sums of money and therefore to say that, of course, you could afford to reduce your living standards. This is I said pure insult. Lots of people now who could not otherwise get high incomes are now able to do so. Again, you know, for a rich country like The US or rich Americans to complain is I think very poor show. Third point, of course, the great Ricardian principle of association which, which Mises enunciated. It doesn't matter even if someone is better at doing everything than someone else, they can still gain from specialization and exchange. And that is precisely the situation here. Okay. So the people some people in the underdeveloped areas are specializing in providing certain sorts of services that opens up opportunities for providing other sorts of services. And that is the same argument of course for goods. If they provide certain sorts of goods, it opens up opportunities for providing other sorts of goods. Okay. Another point is that in India, in particular, which is where most of these services come from, not China. Again, you couldn't even be bothered to look at the facts. The in in India, why has the computer industry developed or why have these exports of services developed precisely because the planners in their wisdom did not get there. Planners in their wisdom have been concentrating on industrial production centrally planning it and therefore killing it. On the other hand, two things which have really developed in India and taken off the two viable exports which have occurred more recent years, polishing of gemstones. Diamonds and so forth are imported into India from all over the place Israel and so on. Polished and set and so on, highly skilled labor, very little capital, highly skilled labor and then the gemstones are sent out. And the plan is of course never thought of this therefore they could not interfere therefore it developed. Similarly with services, this is the one thing the planners can't control. Therefore, it developed and as you can see developed, to the extent to which, you have Indian computer companies now floating themselves on, the New York Stock Exchange no less. And again, it's because they've managed to somehow get around what otherwise the planners would have loved to stop. Okay. Various other points which I noted. Bear with me and I'll find where they are and get at them. Oh, yes. Incidentally, again, more patronizing and insulting comments from Gephardt no less. He says the minimum wage, we should have a minimum wage imposed in various countries according to each country so that the Americans do not have to import goods produced by slave labor, child labor, sweatshop labor, Thank you very much. There's 29,000,000 people employed in factories, modern factories doing far better than they would have done otherwise throughout South Korea, the newly industrialized countries of Southeast Asia. And, you know, I mean, it's I can't imagine a greater insult. I find it very insulting and patronizing to say this. Okay. Oh, yes. Now there are some economists who are prepared to say that exports increase jobs, imports reduce jobs. Capital exports increase reduce jobs, capital imports increase jobs. Okay. The other side of capital imports is import of goods. I can't have it both ways. If the capital imports increase jobs, the corresponding capital imports imports of capital goods have to reduce jobs. Conversely, if capital exports reduce jobs, the other side of capital exports is of course the export of capital goods, other goods correspondingly. That therefore increases jobs. And let us proceed now. We haven't done this before, but I think we should do that. Let us proceed to the reduction ad absurdum of exports creating jobs and imports reducing jobs. Okay? We will ban all imports because they reduce jobs. We export every single thing that we produce. We have no goods in the country but we have a very high level of employment indeed. The poor foreigner, all of his goods are at home. No exports. He's unemployed. What's more, all these imports that have come in from elsewhere sitting there on the walls. He's even more unemployed. Just sitting there wistfully looking at all these goods, which you can't get. And, you know, I mean, there's clearly something wrong. It's that's the kind of reasoning. Now the superficial plausibility is, of course, that if you have tariffs or in other words subsidies, what you're doing is preventing those incremental adjustments which would occur day by day, month by month, year by year. And then when you remove the tariffs, you then have to do everything all at once. And therefore, you know, remove tariffs, free trade, dreadful things happen. Let's go back to the old regime. Okay. Another point which I'd like to make is that many of these points we already see in the rest of the world. And the kinds of arguments which I've been mentioning here, which have been being put forward seriously. My serious papers like the Christian Science Monitor and so on. My second year students in Australia would laugh at them, because we've had the experience and we know positively that with growth in real incomes and output in Southeast Asia and elsewhere, we can now sell them goods. With the import, cheaper goods, living standards have increased. The other question which isn't asked, everybody says how nice, imports reduce prices. Okay. But what do people do with the extra income which they save? Stick it under the mattress, sit on it. You can now buy not only what you had before, you can buy other goats. I mean, very homely example. Before we reduce tariffs in Australia, we had to buy Australian made jerseys, woolen jerseys. They cost $50.60, $70 a piece. After the tariffs were removed, Chinese send in jerseys. You can buy them for $10 apiece. So now I can buy two two jerseys for tennis and I still have $30.40, $50 leftover which I can spend on other things. Of course, I do. Now the real problem, of course, is that that expenditure is diffused. Because it's diffused, there's no way anyone can actually see it. You don't have other other outputs increasing and then coming with little labels tied on their neck saying, you remember those tariff reductions? Well, I am the increasing output that resulted. Okay. Your steel tariffs here. Okay. The lesson here is the conclusion which I will be reaching is that laissez faire is best, not because this is the best of all possible worlds, because anything you do is going to make things worse. Therefore, do nothing. Okay. Your government in its wisdom has imposed steel tariffs. What is the consequence inside the country? Higher costs and therefore reduced output. People doing exactly working as hard as they did before but getting less in return because output has fallen. And the other consequence, you start importing cheaper goods from elsewhere and therefore surprise surprise, your trade deficit gets worse and, you know, everybody jumps up in and says, you know, terrible, terrible. Okay. Now, the Franco German Empire imposes restrictions on US exports. In its wisdom, what happens? Real income falls inside the EU. People are working just as hard as before, they're getting less. Both sets of populations are suffering because they've got governments. And therefore, as I said, laissez faire is the best policy. The US government had done nothing when in when steel import cheaper steel imports were coming in, then you would have had the adjustment which is necessary. Capital and operating losses in the steel industry, people having to move out and find somewhere else to work. Painful for them. Yes. But eventually, things would have settled down. If the EU had not imposed restrictions on US export, what would have happened? Okay. Steel exports are reduced, but at least you don't suffer further reduction in real income. And now what's happened is as a result of the so called retaliation, both countries have suffered double reductions in real incomes. And the only people are better off, if anyone is better off, these bureaucrats who can now hit the headlines of politicians and, you know, saving the economy and blah blah blah, etcetera etcetera. Okay. I think that's about all the thoughts that I had after reading Craig Roberts. As I said, I was infuriated. Kinds of things he was saying, and no one was answering you properly. Yes. Well, he didn't actually write out say that government should do something but the implication was clearly left hanging there. Somebody has to do something sometime at some point and the real villain in the piece is capital export. I mean, if you think that's true again, it's garbage because you cannot ever have balanced trade. You're going to have some capital movements one way or the other. And of course, with the kinds of changes you've had going on in the real world, growth of capital accumulation, you're going to have increasing capital movements. **Speaker 2** (35:34): In his testimony before congress, you kindly did that the other shoe drop and proposed a a kind of regional a global system of regional autarky. **Sudha Shenoy** (35:48): Oh, yep. Another point. Yes. Another point we said with, again, economists have been bringing up, and that is that all the now developed countries developed first and then they removed their tariff barriers. Okay, garbage. The British had unilateral free trade from 1846 to 1931 and free trade was abandoned only with the very greatest reluctance because they felt they had no choice partly because of what The US was doing. And in that period of unilateral free trade, all its trading partners, of course, restricted did try to restrict British exports one way or the other, even the colonies did. And colonial office didn't stop them. Nevertheless, of course, Britain as we know flourished as the green bay tree. You had, you know, huge increases in output per capita income rose, population rose, etcetera etcetera. The other twentieth century example is, of course, Hong Kong. You know, what's Hong Kong going to do to anybody who tries to, reduce its exports, you know, send a popcorn out or something. So, again, you've had unilateral free trade throughout. And as you know, it flourished as the green bay tree. It now exports more than most developed countries. South Korea, by the way, is the world's twelfth largest exporter and the world's second largest producer of certain types of electronic consumer goods and so on. If anybody wants to talk about South Korea, I can say, definitively that it is in fact the result of free access to world markets. Because if you look at what South Korea has been doing, in effect, the inputs were purchased at world prices, capital goods and so forth were purchased at world prices. And if you look at their trading partners, the major trading partners for a long time were The US and Japan. So that in effect, what you had was a trilateral, you might say, free trade area. And then, of course, with the Southeast Asia developing, you started getting more multilateral trade. Okay. That's the other thing that your US trade figures show, and that is growth in multilateral trade. In other words, trade not only with the developed countries, but growing trade, of course, with all these other countries, that are growing. Okay. Back to, the late the the nineteenth century. Even the French had very low tariffs. In the course of the nineteenth century, there was even a short period of free trade, the Cobden treaty, with Britain. Germany had relatively low tariffs. They had internal huge free trade area with the with free trade. And, of course, throughout free trade area except for where, you know, the colonies imposed tariffs. Even then, not all of them did in Australia and New South Wales is a free trade area, but Victoria, it's always been a very bad state had, again, tariffs and protection. The Indian textile industry developed as a result under, precisely under this regime. In fact, we had the first textile mill in India before Japan got a textile mill. So the Japan the Indian textile industry is older than the Japanese. The Japanese were forbidden to impose tariffs as a result of the so called unequal treaties. And so the early period when you're supposed to need the tariffs precisely when they didn't have them. And tariffs in any case of subsidies, I mean, most are saying that if you subsidize something, it's going to grow. But of course, it's going to grow, but at which whose expense? You know, what's really happening is that the growth has overtaken the results of the tariffs. And then you're in other words, you're peacocking around in borrowed feathers. That's about what it amounts to. **Speaker 1** (40:00): Yes. With Jobs business program on CNN? **Sudha Shenoy** (40:04): Yes. Yes. I was horrified when **Speaker 1** (40:06): I No. No. He's become from some unknown reason of being a protectionist. And I can't quite figure that out unless he's planning on running for president someday. **Sudha Shenoy** (40:17): But **Speaker 1** (40:19): he turned his guns last week to the the export of service jobs to India **Sudha Shenoy** (40:25): Mhmm. **Speaker 1** (40:26): And other countries. And he had a a professor, a business professor from New York. I think he's a management professor from New York University of Columbia. And he made a very good argument that the export of these service jobs actually saves jobs in The United States because companies that basically were in the absence of these service jobs being exported abroad, that they would have to shut down or at least curtail operations **Speaker 3** (40:58): in The **Speaker 1** (40:58): United States so that our retail operations and finance and electronics can remain viable simply by exporting various categories of of service jobs. **Speaker 3** (41:15): I think it was a **Speaker 1** (41:17): good argument that he that he made it. Well, it actually was effective in encountering the docs. The only sad part of that was that they reported the the next night that the that that professor had died. **Sudha Shenoy** (41:29): Oh, yeah. Overnight. Mhmm. All **Speaker 2** (41:31): of those were talking about. **Speaker 3** (41:33): Okay. Well, I don't know. But it's **Speaker 1** (41:36): it's an interesting development. **Sudha Shenoy** (41:38): Yeah. Well, I mean, it's it's common sense says if you can get something cheaply, a fraction of what it used to cost you, it's a good thing. You know, you've got the extra income, output, whatever to do something else with. So that if the Asians can supply particular services, particular goods or whatever, anybody can supply it. A fact a fraction of the previous cost. You can now use your resources to produce the whole range of other things. As I said, the only trouble is that the other things which you produce will not come with these labels tied around their necks saying, you know, remember those cheap imports, we are the result of, you know, increased output. So therefore, one has to argue in a sense it is a completely abstract argument, which I think many people would find difficult to to follow through. **Speaker 2** (42:29): Can I ask about the the politics of these international trade negotiations? It seems that at at the Cancun that talks to World Trade Organization, the developing world represented on balance, of course, for free trade, and the industrialized world is all for harmonization of regulation, opening up tariffs, removing tariffs abroad, but keeping them on at home, and generally promoting a kind of regulatory protectionist program. Is that a new development, or is it just more visible now that we have these international trade talks? Is the developing world always been a force for liberalization? **Sudha Shenoy** (43:10): Yes. The developing world would have been here long since if it hadn't been for your blessed development economists who taught the policymakers there that you have to subsidize, you have to regulate, you have to plan, etcetera. The developing world is developed only after all that was dropped. And therefore, they are now discovering, of course, that, you know, all these things are a real problem now. Again, I think in these in these circumstances, given that all governments are going to be doing something nasty all the time, the best principle for everybody is unilateral free trade. Okay. So The US negotiators come out and say, open up your economies. We want to send goods and let them get the goods. The Americans by maintaining their tariffs are cutting off their nose to spite their face. They are busy buying things at higher cost than they need to. We can buy whatever Americans produce at world prices. Why should we you know, why complain? **Speaker 3** (44:20): I I have two questions. Strictly speaking true so that the trade deficit was not financed by dollars. And you printed okay, but I didn't see — none of your figures seem actually to address this point. **Sudha Shenoy** (44:54): Ah, yes. Well, I didn't want to do it the conventional way, which is, you know, balance on services, balance on goods and because that is just analytically meaningless. The trade deficit is huge. Huge. And as you can see, you also have very large capital imports. And that's the link between the two. The link is between those two. The growth in capital in, capital accumulation elsewhere, and therefore, exported capital directly to the exporting of our goods. And again, if you import capital, it means you can import more goods than with your current earnings. And that's what's been happening. That's why the, demonstration, I think, there or at least what the figures seem to show that the private sector earns all its own foreign exchange plus some, which means that none of this is being financed by somebody somewhere holding dollars. That trade deficit is being paid for by either capital imports or foreign exchange earnings of some sort. Because when you balance when you compare that to what you've got is at least in 2001, a small surplus for the private sector. **Speaker 3** (46:12): But, I mean, we we agree that if there are dollars being stockpiled in the Bank of China or Bank of India or wherever, **Speaker 1** (46:19): that has been used to finance **Speaker 3** (46:23): commodity imports in The US. Now the question the question is only how, what is the actual quantitative significance of this? **Sudha Shenoy** (46:31): Quantitative significance is zero. That's what the figure showed because if some of the deficit was being, some of the trade deficit was being financed by people holding dollars, then you would not be able to show that the private sector was earning all the foreign exchange which is spent. There would be a discrepancy in the figures, at least you would have some inputs coming in, some imports or something coming in, which is not paid for by foreign exchange earnings. Okay. You would be running a deficit. The only sector which is running a deficit is the US government. It's The US Government's expenditures that are being financed by central banks holding dollars or whatever, you know, however they they've been doing it, pulling others to pay for it or whatever. **Speaker 3** (47:21): My my second question would be, do you know what forfeit Robert's views on immigration are? **Sudha Shenoy** (47:28): No. I don't. Does anyone other people might know if he has **Speaker 3** (48:35): and immigration. I mean, these people do not come just because they love so much the Alps or and and you know, that's cheaper than that. Yeah. **Speaker 1** (48:48): The one there was an interesting possibility you sort of raised, which is when you said that in 1981, The United States had a trade surplus. But that now, of course, the trend seems to be upward ever higher, is that we have a trade deficit, a growing trade deficit. Of course the government deficits have also decreased during that period, but in 1981, you have the monetary decontrol act here in The United States, was a major regime shift Mhmm. Of the US dollar. Mhmm. We have ramifications **Speaker 3** (49:34): as we go forward **Speaker 1** (49:35): in terms of trade. **Sudha Shenoy** (49:38): No. What have we been looking at really are these fairly long term changes, real changes. And basically, think what's been driving the whole scenario is the growth in capital accumulation output diversification elsewhere. And that's how the I mean, it's these adjustments that are showing up in the trade figures. Now up to 1981, what happened was that The US as I said was a net capital exporter and therefore it had to have, a trade surplus. The rest of the world therefore by definition was a net capital importer from The US and therefore had a trade deficit with The US. Okay. Now that's another point which we might perhaps make. If the Craig Roberts argument is correct, then before 1981, it was The US which was busy draining income away from the rest of the world to because they had a trade deficit with The US. In The US, it was which is busy, you know, obtaining trillions of dollars worth of assets from other people, because it was exporting capital to them and further draining away rent. That case, how did the rest of the world suddenly turned around and, start doing exactly the same to The US itself? You know, I mean, that is not what's been happening. What it has been happening are these other changes. These other changes have been therefore showing up one way or the other inside, in the structure and competition whatever, balance of payments everywhere. And the these are, you know, solid long term changes, solid long term developments. **Speaker 1** (51:25): For the rest of **Sudha Shenoy** (51:27): the For everyone. I mean, there's no way we're going to, you know, drive in Southeast Asian countries back to where they were 1861 or wherever. There's no way Japan is going I mean, you know, they're there. And already, I would you know, seriously, the rest of the world has adjusted. It's just The US, which is now beginning to discover that even it has to adjust despite the size of its economy. Yep. --- ## [Interview] The Challenges for Liberal Grassroots Movements URL: https://indianliberals.in/primary-works/the-challenges-for-liberal-grassroots-movements/ ### Body # The Challenges for Liberal Grassroots Movements Source: https://www.youtube.com/watch?v=DIfQ-rkTsYw Duration: 358.3s **Jayaprakash Narayan** (00:04): Yazad, if you recall, even the word liberalism was hardly known in India at that time. And if people understood the meaning of liberalism, most people considered that as a dirty word because the state was the presiding deity. It was accepted that the state was right, despite the economic reform out of compulsion — partial reform, I would say, in 1991 — was not out of conviction, remember. Though, we must compliment Mr. and Dr. Manmohan Singh for doing it honestly to the limited extent they attempted it. They did not do it in, you know, in patches. They actually did it sincerely, though very partially. But despite that, the state was still god in the minds of the people. So the biggest challenge for me was twofold. The first was, politics was rejected by the middle classes, the educated people, and the and the youth, particularly the urban people. They thought it was dirty. You must not sully your hands. You must stay away from that. Therefore, one of my primary concerns in those days was to to communicate to my fellow countrymen and women that, look, politics cannot be ignored because it shapes your lives. The obvious, truism, a self-evident proposition have to be drilled into the minds of the people again and again and again. Perhaps even now, continue to do that, but it's a little less necessary now because a lot more people recognize that whether you like politics or not, you have to be engaged because, you know, politics does shape your life and your future and your surroundings. But in those days, that that consciousness was not there, particularly among the middle classes and the and the youth and the urban people. The second is the muddled notions of the state. As I said, despite economic liberalization, a very partial economic liberalization attempt in '91, the default options for most Indians is that state is right. And therefore, the commonest question I faced — no. My interactions were unlike normal moments and the public discourse in India. I always had a question-answer session, a very lengthy one, not five minutes, ten minutes perfunctory one, but no. There used to be typically a two-hour session. Every day I was traveling intensively. Thirty days a month, thirty-one days a month. Morning to night. From morning 5:00, my tour would begin and end oftentimes at 10 or 11:00 in the night. That's the kind of intensity that I had to bring to the table. And almost every interaction had detailed question and session, at least in our question and answer session. Very honest, they were not premeditated. They were not doctored. There was no screening or anything. It was very open, free-for-all kind of a thing. So the commonest question in those days I faced is public sector versus private sector. People were so, so anxious because public sector was supposed to be good. That was the given thing. Maybe because the word public sector or because of the notion that government is right ultimately and private is bad. Today, I don't think it's that, that serious. Though even today, you do have some remnants of that. But for a liberal reform movement, that was a very testing time. The third is the difficulty in mobilizing people the way I wanted to mobilize, because I have forsaken the dharna and the and the typical vociferous noise-making protests and rasta rokos. Because I always believed that in a constitutional democracy, the only tools available for people for change are the vote and the freedom exercised responsibly. That's what Doctor said, and that's what we have forgotten, unfortunately. I have never, I can say with complete conviction, never ever deviated from that no matter what provocation or what what temptation. But that means it was very difficult to mobilize people. And remember, we had no technology — yet, you know, the Internet, but just beginning, the emails, nothing more. No social platforms, social media platforms, and a very difficult environment. That's the reason why I had to travel every single day. For about ten, twelve years, I traveled every single day. I must have addressed, at least at the very least, about 10,000 gatherings in about ten, twelve years, ranging from a few dozens to a few, few hundreds, and, literally, a few cases, a few thousands across the length and breadth of Telugu land, but also in Karnataka and and Maharashtra and Tamil Nadu. But mostly in the Telugu land and both the states of Andhra Pradesh. And, of course, oftentimes travel to Delhi and other parts of India when there were some national deliberations and and conferences and so on and so forth. Therefore, to mobilize people and public opinion in a responsible way, the way it should be in a constitutional democracy without the power of technology that is now available today. So as I would say, these are the three fundamental challenges: the middle-class apathy, the and rejection of politics; the notion that government is good and private is bad still prevailing in the country; and the inefficient tools in the Indian — prevailing Indian — climate where the normal mobilization is, you know, a lot of noise and and all that, not thoughtful, thoughtful action, not informed collective assertion. --- ## [Interview] The Challenges leading to the Forest Rights Act, 2006 URL: https://indianliberals.in/primary-works/the-challenges-leading-to-the-forest-rights-act-2006/ ### Body # The Challenges leading to the Forest Rights Act, 2006 Source: https://www.youtube.com/watch?v=EqCp8knf-_A Duration: 471.1s **Speaker** (00:05): From the nineteen eighties, people like us were struggling, were helping the people to struggle and have their rights recognized. So in many of the states, there were some government resolutions also passed that regularize the land. Say, for example, in Gujarat, there was one 1972 resolution. And then in 1992 resolution, they had stated, they provided that so and so person was cultivating land before 1980, he or she should be, her, their, his or her rights will be recognized. But in Gujarat, we saw that most of the people who were cultivating, they didn't get their, they could get the rights recognized. So there was a big, I mean, big movement. Almost means the people, the tribal people, and the people like us were, of course, had means were struggling to get it. At that time, meanwhile, what happened that in 1995, there was a case in the Supreme Court. One Mr. Godavarman filed a public interest litigation in the Supreme Court against the illicit cutting that was taking place in the estate that was there, his own forefathers had nurtured. So Supreme Court took up this case. Not only that, the Supreme Court gave many orders regarding this. Supreme Court extended the scope of the of this PIL and extended to all the states of India. So it was known as forest case, and it is, only it is now also, it is very much there in the Supreme Court. So in 2001, in November 2001, Mr. Michael's query, he filed an interlocutory application in this case that there are so many encroachers, and that is very worrisome. So the Supreme Court just wanted to ask, wanted to know how much encroachment exists in five or six states. And the Supreme Court passed an order on that. Interestingly, taking a cue from this, the Ministry of Environment and Forest, what they did, they passed an order. They just, they just wrote out a circular to all the states, not only five to six states, but to all the states, asking the state governments to remove all the encroachments in their respective states within three months. So this order was passed. This circular was brought out in on 05/03/2002. And they gave the timeline of that before September 30, they they have to remove all the encroachments. And it happened also in Maharashtra, in Odisha, in Assam. Many of these forest departments, they started removing these encroachments. They started razing the houses also with the help of elephants also. So at that time, there was very much, you and I. And many many people like us, this ticket means for us, it was enough, for enough was enough. So we worked together, and then this Campaign for Survival and Dignity was born. That is a organization. It is a loose organization. Well, it's it's an umbrella organization in which most of, means, most of the organizations and grassroots activists and individuals who were working on this issue, tribal's rights, they joined this campaign. We were also part of that, and then we lobbied and we campaigned for this. We met the prime minister, at that time was Manmohan Singh, and Manmohan Singh suggested that we should have a statute. I'm not going into the details of the history. Why he suggested this? Because in the time of Vajpayee government, there was the Ministry of Environment. They had brought out one circular to regularize this thing, but the Supreme Court shut, shut it down, that shut it down that because of this, this is a election gimmick. And so it is no longer, it should not be valid. So Manmohan Singh himself suggested that there should be a statute, and the nodal agency should not be the Environment and Forest Ministry, but it should be the Tribal Ministry. And at that time, this, this the seeds were sown in this meeting with the, month with the prime minister. He also suggested that some of the people from campaign also should be a part of this drafting process, and it was, I think, it was very good because it, because this is the first statute. This is the first act which has recognized the role of the Gram Sabha. Otherwise, what has happened? In most, in not most, in all of the acts, it is the, the officers either from the revenue department or from the forest department. It is the officers who would decide who cultivates where and all these things, and they prepare a basic list of the people. Here, the whole situation was changed. It was the Gram Sabha which should initiate the process of inviting the claims. And then it is, it is the Gram Sabha which decides, which examines and decides the claims of the individuals. So in that sense, this act was a very, I think, landmark act, and it was unprecedented. And this was the, I think it was, it was the beginning of the drafting process, and it was the beginning of the act. So after, means we had to lobby with all the political parties and everything. Meantime, it they they were the years of too much lobbying and campaigning and everybody, means all the parties, because this act was passed unanimously in the parliament, and it was passed in 2006. So, so one year was left before the rules were notified and the act came into being, came to be implemented. And in January 2008, the Forest Rights Act was notified, and it's done, the implementation of the act was started. --- ## [Interview] The Early Years, Emergency Era and Tryst with Civil Services URL: https://indianliberals.in/primary-works/the-early-years-emergency-era-and-tryst-with-civil-services/ ### Body # The Early Years, Emergency Era and Tryst with Civil Services Source: https://www.youtube.com/watch?v=mN1kPu5pTzk Duration: 481.8s **Jayaprakash Narayan** (00:05): Yes. I grew up in a village in circumstances that are anything but privileged. You know, an ordinary village school, Telugu medium, primary school, the, what we call high school of tenth grade. Then went to plus two to a Jesuit college at Loyola. And then medical school because if you're supposed to be a reasonably bright kid, you know, your family has ambitions for you and you look at medicine and engineering, that's the normal trajectory in India, particularly in those days. I really had no understanding of society or politics beyond what I could read in textbooks or other things. So because I had tremendous curiosity, though the access was limited, and therefore, I would read everything that is printed anywhere that I could access. But slowly, by about nineteen seventy one, seventy two, seventy two, I was 16 years old, I began to seriously explore, understand what's happening in our country and the rest of the world. Probably by about '73-'74, I was one of the best informed persons in the world among young people. I spent about six to eight hours, ten hours a day listening to BBC. Almost anything that happened anywhere in the world at any point of time, was instantly aware and I was discussing, debating, analyzing, thinking, studying, so on and so forth. That's the backdrop. By nineteen seventy two, seventy three, the first flush of enthusiasm about the freedom of India started diminishing because people were recognizing that we were shortchanged. We were not getting what we expected. The opportunity for all people or a decent government or corruption free services, you know, and of course, and poverty, the whole thing. And as a medical student, one advantage that I had related to my compatriots in other branches of learning is now most education in India is isolated. It's very little to do with the society, sadly. But medicine, by the way of training, you have to deal with patients. Even if you don't go to society often, the society comes to you every day. So you understand intuitively and instantly what is happening to their lives, the suffering, the sickness, the links between the living conditions and the sickness, between poverty and the disease, and their own lives, so on and so forth. And then there were two developments, parallel developments. One in India, the movements that arose out of the anger against the misgovernance and failed governance and missed opportunities resulted in Nav Nirman Samiti in Gujarat, then Lok Nayak JP movement, Chhatra Sangharsh Samiti in Bihar, and the emergency that those things led to. Unfortunately, the elites of India, the governance system, instead of creatively engaging with the people and figuring out what are the changes required, has dealt a body blow to democracy and freedom. Remember, 1978 is when China has actually changed course in terms of economic freedom and opportunity and so on and so forth. This was in nineteen seventy four, seventy five. Our elites in a democratic society with far greater exposure to the rest of the world should have seized that opportunity to change course and figure out where we have gone wrong. Instead, they doubled down and imposed emergency, incarcerated a 100,000 people, converted the whole nation into a jail, so to speak, extinguished all liberties. And that was extremely, extremely distressing to many, many of us. Tens of thousands of young people. I was one of those. If Lok Nayak JP or somebody said, you jump off from the 3rd floor hospital of yours, and that'll help the country in some way or the other, I would have gladly jumped off. We were that angry, that emotional, that excited, and that charged and that committed. And on the other hand, around the same time in the United States, Watergate, a mighty president was felled by the institutional strength of American democracy because of relatively minor infractions. You know? When you look back what Nixon had done, they were pretty trivial offenses by contemporary American standards, let alone Indian standards, what Donald Trump is doing today in America, for instance. I mean, there's no comparison at all. And, of course, India was a different world altogether. And yet, the system rejected a powerful president who otherwise served the nation pretty well. The contrast between the two, though, notionally, are democracies, both have written constitutions, both swayed by rule of law and accountability and so on and so forth, that was one of the most powerful impressions on my mind. I remember writing an editorial in the college magazine. I was editor of the English section of the college magazine in those days. And if I look back and read that editorial, if I can find that, I'm pretty certain what I feel and believe today are very much the beliefs and my feelings in 1974. That was August 11. I wrote the edit piece two days after Nixon resigned. And in a broad sense, my worldview has not changed except that I acquired knowledge and understanding after I joined civil services and a depth and experience that certainly enhances your ability to impact. But the broad worldview is fundamentally shaped then. Then the angst, you know, post emergency, they were all rejoicing that Janata Party came to power. We thought there was a Gandhian revolutionary dawn. Those are the times when we still believed that an election actually meant a revolution. Now I know it doesn't really matter. It's just the change of players. It's what they do that matters. But in those days, now I still remember on the 21st of March 1977, literally dancing with joy. I don't know how to dance, but the ecstasy quickly gave way to agony. Well, the freedom was restored. Nothing much has changed. And from that angst came the decision when a friend of mine suggested you're already deeply distressed about the country. Why don't you join the civil services? Around the same time, doctors who were earlier foolishly banned from joining the civil services were allowed. You know, the Kothari Commission they appointed, and they recommended among other things the doctors should be allowed to join civil services. So my journey into civil services was accidental. It was not aspirational in a creative sense. It was not premeditated. It was at the late stage in my internship, house surgeoncy as we call it in India. I finished my medicine and acquired my degree, and the path for most medical doctors from my college in most parts of India those days is pretty well laid out. You do a post graduation, practice medicine in a country which is desperately in need of health care providers. Or as my college contemporaries did, about 80% or so, 50 to 80% moved for the registration in next six months to one year. Opportunities are there all over the world. But I never opted for that. I was clear in my mind that I had to do something in this country. And it should be about democracy, and it should be about the fruits of democracy reaching the people. So for me, it is not merely a notional thing, and it's not merely freedom but without any opportunities. It has to be freedom. It has to be opportunity. It has to be fairness and justice. It has to be harmony in society. It has to be better living conditions for everybody. --- ## [Interview] The Future of Liberalism in a Post-Pandemic World URL: https://indianliberals.in/primary-works/the-future-of-liberalism-in-a-post-pandemic-world/ ### Body # The Future of Liberalism in a Post-Pandemic World Source: https://www.youtube.com/watch?v=MBQCrw6L6MY Duration: 232.3s **Speaker** (00:05): One thing I do see as a result of the pandemic, not just pandemic, but the populist sort of uprising that you see around the world, right, that the sort of thinking people, that's me sort of, I don't know how to define them, basically, but thinking people from left and from the right, all left, all right, so put it that way, right, are coming together. Both of them realize, right, that what they cherish the most, right, would be personal liberty or economic liberties. Right? Both are under threat and by the current system, like current sort of expanse of state powers. I think I see that that's a potential sort of ground to build off. So common ground that's emerging. I think there's sort of right thinking people that is no longer about, right, state versus market or state versus personal freedom. Right? I mean, state for state as individual. It is going to be about state and everybody else from the other side, and therefore, we all need to come together. Right? Keep some differences aside. Yes. We do have differences in terms of the role of the state and how the party should do and should not do. But I think by any measure, all sides agree that what the state is doing is far, far greater than what it should be doing. Right? And therefore, I think I see that as a potential sort of post-COVID scenario that can emerge with the people on the left and the right finding a common ground on many of the issue. Maybe not on all the issues, but many, many issues, a common ground would exist. Right? And that could be, I think, a a way of dealing with the situation that we are in, is building that common ground. So I see collaboration, building common ground as an important way of rethinking the engagement of civil society with the state, with with the larger social social challenges that we face. And that could be, I think, one way to think about it. I think second is becoming more and more obvious by looking at some of the social justice movements around the world, and particularly in The US, that the moral outrage is only on one side. Nothing the liberals do not show as much moral outrage. I think we, in a sense, seem to be more I mean, it's the word complacent or is it tolerance on what we have? We believe in tolerance. We believe in accommodation, right, of different points of views. But when I think our values are being crushed, right, trampled upon, killed. Right? At that point, I think I feel that we need to show our own moral outrage as much. Right? I think unless we find a way of channeling that outrage, first of course, generating the outrage to begin with. Right? Feeling that outrage in our own hearts and minds, and then channeling that outrage to the larger society. We need a balancing of the outrage in the sense. Outrage is only on one side by and large, and that also is pushing society despite the fact I think most people don't want to go there. Right? It's pushing us in that direction. I think that's important that liberals, the right mind right minded people find a way to show their own outrage, right, and find a way to communicate that with larger public, why some of these values are so critical to our society, to our way of life, and why we need to fight for them and continue to fight for them. --- ## [Interview] The Hayek-Keynes Debate, 1931-1971 | by Sudha R. Shenoy URL: https://indianliberals.in/primary-works/the-hayek-keynes-debate-1931-1971-by-sudha-r-shenoy/ ### Body # The Hayek-Keynes Debate, 1931-1971 | by Sudha R. Shenoy Source: https://www.youtube.com/watch?v=SdqP9_U1GjE Duration: 1536.4s **Sudha R. Shenoy** (00:02): The Hayek-Keynes debate, 1931-1971, by Sudha R. Shenoy. This article is excerpted from A Tiger by the Tail, The Keynesian Legacy of Inflation. The roots of current economic ideas and of those guiding wage policy lie in the 1930s in discussion inspired by the publication of The General Theory. Though Keynes' ideas diverged significantly from the theoretical structure of Pigou and Marshall with which he was most familiar, Keynesian ways of thinking had been fairly widespread in Britain and The United States before the general theory appeared in 1936. Keynes provided a theoretical foundation for these new ways of thinking. Since the publication of the general theory, there has been an extensive elaboration of the theoretical system outlined in or generally associated with it together with a further development of an alternative system of concepts called the classical system. This was close to a mirror image of the Keynesian system in the main relationships, for example, between the quantity of money and total expenditure, between interest, saving, and investment, between the wage level and the level of employment, and so on. But whereas the Keynesian system was couched wholly in terms of aggregates, the so called classical system contained what may be termed a price dimension. The changes in the price level associated with changes in the total money stock were held by the classical system to imply equiproportional changes in all prices. And variations in the price level, in turn, were associated with changes in the level of economic activity. In a sense, the Keynesian approach may be regarded as a logical extension and elaboration of this rather crudely aggregative element in the classical system. Challenge to Keynes. The doctrines generally accepted among English economists contemporaneous with Keynes were challenged in fundamental respects by an alternative analysis developed on the continent and propounded in Britain by Professor Hayek. But by the 1940s, the Keynesian approach was almost universally adopted by economists. Initially, many appeared to believe that the macro problems of unemployment and depression were solved and that few other major economic problems would emerge. The only problem remaining, it seemed, was the methods required to ensure full employment. Now that the principle of adequate effective demand is so firmly established, declared Professor Arthur Smithies, economists should devote particular attention to defining the responsibilities of the state. The British white paper on employment policy in 1944 and the full employment commitment in the UN Charter reflected this belief as did the 1946 Employment Act in The United States. A few dissenting voices warned of trouble ahead. Professor Jacob Viner observed of a report to the Economic and Social Council of the United Nations, National and International Measures for Full Employment, prepared by a group of distinguished economists, J. M. Clark, A. Smithies, N. Kaldor, P. Uri, and E. R. Walker. The $64 question with respect to the relations between unemployment and full employment policy is what to do if a policy to guarantee full employment leads to chronic upward pressure on money wages through the operation of collective bargaining. The authors take a good look at the question and run away. Effective demand to provide employment was the key concept in recommendations that Professor Viner rated as much more Keynesian than was the final Keynes himself. Shortly after the general theory appeared, Professor W. H. Hutt argued that it was a specific for inflation. Even Keynes had doubts a few years after the general theory. In his essay, How to Pay for the War, London Macmillan 1940, he warned the trade unions of the futility of demanding an increase in money rates of wages to compensate for every increase in the cost of living. To prevent inflation, he insisted, some means must be found for withdrawing purchasing power from the market or prices must rise until the available goods are selling at figures which absorb the increased quantity of expenditure. In other words, the method of inflation. And in the discussion of financing war expenditure, a demand on the part of the trade unions for an increase in money rates of wages to compensate for every increase in the cost of living is futile and greatly to the disadvantage of the working class. Like the dog in the fable, they lose the substance in grasping at the shadow. It is true that the better organized might benefit at the expense of other consumers, but except as an effort at group selfishness, as a means of hustling someone else out of the queue, it is a mug's game. The approach to an income policy. Over the following twenty five odd years, the early Keynesian theory was further elaborated and refined and a highly sophisticated series of macroeconomic models developed. The 1950s, more especially, saw the discovery of cost inflation in which a rise in wages pushed up the cost level. As prices were determined by cost and in crucial sectors of the economy were administered on the cost plus markup practice, prices rose to protect profit margins. But since wages were also incomes, the cost and price increases had no deflationary effect as effective demand rose simultaneously. In these circumstances, a contractionary monetary fiscal policy would be deflationary. It would lead to socially intolerable levels of unemployment and excess capacity. An alternative measure, directed specifically at rising cost, would have to be devised. If price stability and full employment could both be achieved by keeping wage increases within the limits set by rises in productivity, this implied an income policy. Further investigation into the implications for the price and wage level of linking sectoral wage increases with productivity strengthened the case for a nationally determined wage policy covering both relative wage rates and the general wage level. If wages rose in the sectors where productivity was rising, the result would be a rise in demand for the outputs of other sectors resulting in a rise in their prices. Economic policy in The United Kingdom and The United States from 1950 on reflected the adoption of these views. There was a gradual shift from exhortations, guidelines, and pay policies to more direct attempts to influence and control wages. That such direct control of wages and prices would be needed to forestall the vicious wage price spiral resulting from full employment had been forecast by Lord Beveridge as early as 1944. By the late 1960s and early 1970s, more economists came to favor an income policy. Some reluctantly, Robbins, Meade, Paish, Brittan, Morgan. Others enthusiastically, Balogh, Streeten, Opie. Lord Robbins' case is particularly interesting. In the early 1950s, he analyzed clearly the inflationary implications of the full employment policy contemplated by Beveridge. It gave union leaders a virtual guarantee that whatever wage rates they succeeded in getting, unemployment would not be permitted to emerge. It would give them a continuous incentive to push wages beyond increases in productivity setting off a vicious spiral of more inflation. This, in turn, might force governments to act directly on wage rates. The present determination of wages by bargain between employer and employed would be suspended. Wage fixing by the state would take its place. He believed, however, that this alternative would be rejected on the ground that in the end, its efficient operation would prove to be incompatible with the continuation of political democracy. Seventeen years later, he argued for an income policy as temporary shock tactics to afford a breathing space in which fundamental monetary fiscal reforms might be advanced and understood. Despairing of the good sense of union leaders, he sought to bring pressure on them indirectly, suggesting that businessmen be restrained from granting inflationary wage increases by restrictions on aggregate demand, even to the point of precipitating bankruptcies, thus preventing the payment of higher wages that would simply be recouped by higher prices. A suggested alternative or parallel measure would be to tax inflationary wage increases granted by firms. He hoped that union leaders' expectations of automatic increases in wages would thereby be frustrated. A similar view is taken by Professors E. Victor Morgan, F. W. Paish, and Sidney Weintraub. An alternative type of income policy was proposed by Mr. Samuel Brittan. The government would control the level to which wage rates would be permitted to rise while allowing employers short of labor to offer higher rates, but without pretending to determine relative wage rates on the basis of social justice. Such a policy, he said, must be treated as a supplement to monetary and fiscal policies that provide sufficient demand to prevent unemployment but prevent the emergence of excess demand. He suggested, as a stop gap, a temporary price and wage freeze until these policies were implemented. Two possible implications of this suggestion may be considered. First, if such a brake on wage increases is to be more than advice, unions must be willing to accept the guidance of the income authority, implying a permanent watchdog role for the authority, or at least an existence parallel to that of the unions as wage fixers. If the unions refuse to cooperate, presumably the authority will have to take over their wage fixing function. Secondly, in common with other recommendations for income policies, this proposal would perpetuate a given structure of relative wage rates since all the rates to which it applied would be allowed to rise only by a given percentage, save in labor scarcity. This relative wage structure today reflects not so much the allocative forces of the market, but the relative power or pushfulness of the different unions. Can we assume that they would be content to retain indefinitely whatever relative positions they had achieved at the moment the income policy came into existence? Micro dimensions acknowledged. The common thread running through these discussions is the alleviation of specific wage rate maladjustments. They have moved some distance from the aggregative analysis. The macro problem of adequate demand management has, it now appears, a micro dimension, that of establishing or obtaining an appropriate scale of prices. In other words, from the viewpoint of practical policy, the macro problem of a persistent upward push or pull on the price level is now seen to have micro roots in the specific pricing methods used by specific groups of workers. Macro measures acting on aggregate expenditure may have allowed us hitherto to ignore this basic micro discoordination, but events have seemingly brought the issue forward unavoidably. Macro measures, it would appear, may offset micro problems, but they are no substitute for appropriate micro solutions. The significance of coordination at the micro level appears here, in the light of a third type of analysis, which Professor Hayek developed on foundations laid by the Austrians Menger, Wieser, and Böhm-Bawerk, culminating in the works of Mises. Hayek concentrated on the analysis of the structure of relative prices and their interrelations. He did not adopt the framework of a general equilibrium system nor treat price changes as elements in a dynamic shift between two general equilibria. He regarded prices, rather, as empirical reflectors of specific circumstances and price changes as an interrelated series of changes in these signals that produced a gradual adaptation in the entire price structure and hence in the outputs of different commodities and services to the constant unpredictable changes in the real world. Pricing, in short, is seen as a continuous information collecting and disseminating process. But it is the institutional framework that determines both the extent to which and the degree of success with which prices are enabled to perform this potential signaling or allocative function. This Austrian analysis constitutes a substantial break with classical economic theory from Adam Smith to J. S. Mill. It differs also both from the doctrines of the English economists after Mill and from the theoretical preoccupations of the Lausanne school with the conditions of general equilibrium. Is there a price level? In his first English work, the four lectures published as Prices and Production, Hayek questioned the concept of price level, that is a relationship between the total money stock and the total volume of production, variations in this level being associated with variations in aggregate output. He argued that such a concept failed to show that there were specific influences of changes in the stream of money expenditure on the structure of relative prices and hence on the structure of production. These price and output changes, he maintained, occurred irrespective of changes in the price level. Hayek's analysis implied that if the price level is held stable by offsetting monetary measures under conditions where the relative price changes would result in a falling price level, the real dislocations would be the same as if prices were made to rise by monetary measures, if otherwise they might have remained stable. In either case, the outcome is a painful correction of the preceding real misdirection, that is, a depression. During the 1920s, the widespread theoretical and policy influence of the stabilizationists meant that considerations of the kind sketched by Professor Hayek were not incorporated into either theoretical or policy analysis. Consequently, the price level stability of the period was read as implying a lack of maladjustment in the underlying price structure. This is an extremely oversimplified summary of a complex historical situation, the specific conditions of which were not uniform in all countries. Theoretically and practically, it may be argued that in conditions of depression, there is little choice save to augment the level of monetary expenditure to the highest possible degree. Hayekian analysis, while readily conceding that depressionary symptoms may thus be overlaid, would argue that the problems are then transformed into those arising out of a situation where every reappearance of recessionary symptoms has to be met by ever larger increases of monetary expenditure, eventually issuing in the stagflationist dilemma. This is not necessarily to say that the specific policies pursued in the 1920s and 1930s or the economic and monetary framework of the time represented an approximation to the Hayekian ideal. Hayek has said with regard to the period 1927-1932, up to 1927, I should indeed have expected that because during the preceding boom period prices did not rise but rather tended to fall, the subsequent depression would be very mild. But as is well known, in that year, an entirely unprecedented action was taken by the American monetary authorities, which makes it impossible to compare the effects of the boom on the subsequent depression with any previous experience. The authorities succeeded by means of an easy money policy inaugurated as soon as the symptoms of an impending reaction were noticed in prolonging the boom for two years beyond what would otherwise have been its natural end. And when the crisis finally occurred, for almost two more years, deliberate attempts were made to prevent by all conceivable means the normal process of liquidation. It seems to me that these facts have had a far greater influence on the character of the depression than the developments up to 1927, which from all we know might instead have led to a comparatively mild depression in and after 1927. Shortly after the publication of the first edition of Prices and Production, Professor Hayek published in Economica, the first part of a long substantive review of Keynes' Treatise on Money. This provoked a reply from Keynes followed by rejoinder before the publication of the second part of the review. Hayek criticized Keynes for his neglect of the real structure of production, arguing that Keynes' predilection for concentrating on the immediate and purely monetary phenomena accompanying changes in money expenditure, together with his penchant for aggregative macro concepts, total profits, total investment, had led him into contradictory or untenable conclusions. Keynes apparently held that if there were no entrepreneurial profits or losses in the aggregate, total output would be held constant. Hayek replied that if profits in the lower stages of production, nearer consumption, were exactly counterbalanced by losses in the higher stages, there would be a contraction in the capital structure and a fall in output and employment even though there were no aggregate profits or losses. In his reply, Keynes failed to take up the numerous substantial criticisms made by Hayek. The main point of interest is his explicit statement that in my view, saving and investment can get out of gear, there being no automatic mechanism in the economic system to keep the two rates equal. Hayek's reply to this was based on his analysis of the relative price structure. Mr. Keynes' assertion that there is no automatic mechanism in the economic system to keep the rate of savings and the rate of investing equal might, with equal justification, be extended to the more general contention that there is no automatic mechanism in the economic system to adapt production to any other shift in demand. Further implications of Hayekian analysis. There are further implications of the Hayekian approach. A, if the current level of output and employment is made to depend on inflation, a slowing down in the pace of inflation will produce recessionary symptoms. Moreover, as the economy becomes adjusted to a particular rate of inflation, the rate must itself be continuously increased if symptoms of a depression are to be avoided. To inflate is to have a tiger by the tail. B, to limit price or wage rate increases by an income policy is to freeze a particular set of price and wage rate interrelationships while underlying circumstances of supply and demand are continually changing. This is like the stability of a set of defective gauges perpetually pointing to the same set of readings. It reinforces other institutional factors preventing the specific changes in relative prices and wage rates necessary to the maintenance of full employment. Or to put this same point from a different angle, if full employment is to be maintained at union determined wage rates, which are inflexible downwards, all other prices and wage rates must be adjusted to them. Other prices and wage rates must be set at or reach levels consistent with this objective. Even if union determined wage rates were held down to a maximum percentage increase, it still does not follow that the same percentage increase or lesser increase in all other prices and wage rates would suffice to achieve full employment. This is why it may be necessary for incomes to rise faster than output even to secure that increase in output. C, the major objection to an income policy approach is that it merely freezes a given array of prices and wage rates. It does nothing to bring about coordination or to introduce coordinated institutions into the labor sector. So long as the discoordinative potential of such nonmarket institutions as unions is not tackled, the problem will recur again and again. There may be no substitute for a very painful reshaping of institutions or other means of bringing within the ambit of the pricing system wage rates made impervious to market forces. The alternative is a permanent income policy, an all around fixing of wage rates and prices, that is, an effectively centrally controlled economy with all its problems. Although we may, as it were, back into this situation unintentionally, this is to say nothing about whether it is desirable politically. --- ## [Interview] The Hope for a Liberal Political Alternative URL: https://indianliberals.in/primary-works/the-hope-for-a-liberal-political-alternative/ ### Body # The Hope for a Liberal Political Alternative Source: https://www.youtube.com/watch?v=3fWgfaSvlyM Duration: 558.8s **Jayaprakash Narayan** (00:05): It's a great question, Yazad. I keep getting it every day, and the people who would like to see something like Lok Satta, they sometimes are angry with me out of love and affection, but still angry because they believe that they have taken away the option for them in parts of India where we could make that impact. But while I understand their angst, we must understand the reality. Politics is about people's voice. Vox populi, vox Dei. It's about the people's willingness to vote on the day that matters. It's not what you say in between alone. It's not your pious proclamations. It's about political choices. It's not for any fault of the people of the country, but for a variety of reasons, we created conditions where the people cannot really work in their best interest. When we founded a political party, it was with great reluctance because I'm not a — by now, you would have realized over the past twenty years that I'm not a combative person who tries and fights and isolates and separates people and polarizes them and converts them into war. My temptation, my proclivity, my basic inclination always is to unite people, bring them together, to build harmony, and to see how best we can come together rather than how to exaggerate the differences. Therefore, politics in a normal sense, in a party political sense, partisan sense is not my cup of tea. But after a great deal of internal debate and very public discussion, we have decided to found a political formation because we felt two things. One, that the path for fundamental reform in India is going to be somewhat more difficult without a political formation. While Lok Satta is very lucky, singularly fortunate perhaps in the country and perhaps even in the world in achieving significant outcomes — three constitutional amendments, seven or eight major laws, four or five major policy changes in the country, including some judicial pronouncements and so on and so forth — very few organizations in the world can have that privilege of being able to significantly change at least certain sectors and certain legal frameworks without formal political power. But we could see that there is a limit. The parties in office or out of office, willing to go up to a point but not beyond. The fundamentals of Indian politics and governance, they're less likely to change because there's too much of resistance, too much of status quoism and inertia. So we felt that if the political parties, the major parties, see a significant proportion of vote — let us say about 10% of vote — you may not get the seats, and it's not important. But it could be helpful because we are in the first past the post system. 10% vote will not give you any seats really in most cases, but doesn't matter. But if 10% vote is consistently available, then the parties are smart enough to recognize that they have to embrace that. And when it's also good for the country, there's a perfect synergy. What is good for the country, what's good for you as a political party. So we wanted to demonstrate that. But the second is, we made an assessment that given India's partial liberalization by that time and therefore embracing the market principle and the urban middle classes, rising income, some optimism in the country, perhaps 10% vote is there in the country. But our experience taught us that politics at the grassroots level in most parts of India, particularly rural India, is extremely harsh. We all know the problems of money power, freebies, fostering divisions in society for political gain. The three things which are an enigma for any civilized person, an enigma for Lok Satta. I have never ever, even in a most indirect manner, supported these three. I consistently and vociferously opposed and resisted these. And we took a stand that we will never compromise on these for the sake of short term political gain because it'll then become part of the problem. Some people criticize me for being too rigid and principled. I plead guilty. Future will decide whether my approach is right or wrong. It is too short of duration to be able to say that. What is right? What is wrong? But what we found is that urban India, we are getting 10% vote, metropolitan India in particular. Rural India, we were getting 2% vote, not because people did not know. If you ask about the trust and credibility in the two states of Telugu speaking region — Andhra Pradesh and Telangana — even today, I probably stand tall. Even today, my word is respected as more or less the last word on any issue, on any fundamental issue beyond party politics. The moment there is a crisis and people want to know what is right, what is wrong, when I open my mouth, in general, that is more or less the last word. So it's not about the credibility or trust. It's about the political process. The first past the post system, where unless you are seen to be a potential winner, a vote for you is seen as wasted. And second, the immense money power. People take money from both the parties and vote for whomever they like, but without money being transferred to them, the party is not in contention in most cases. Once in a while, an occasional candidate may get a chance. Unless by a miracle you become a second party. A third party disappears for whatever reason. And, of course, the dependence on the political parties and the political machine for the delivery of even the simplest services in rural India in particular. So we realized that we don't have conditions for reformist forces to become politically powerful. But it happens in urban India where — Delhi, for instance. The reason why Delhi, there could be some beginning of change, whether you like the change fully or not, liberal — illiberal — but it's definitely an attempt to try and transform politics, an attempt in the right direction, an attempt to gather votes without money power, and focusing on education, health care, and service delivery free from corruption. I think we should welcome that. And it could happen because there is a powerful local government by Indian standards there because of historical accident. Delhi's chief minister is India's most empowered mayor, less empowered than mayors of any other city in all the civilized countries in the world, but more empowered than any mayor of India. Though the power is limited, it is definite. It's real. People could see that there is a link between the vote they give and the consequences to their lives, not some Bharat Mata. And therefore, the impulse for change could be translated into vote. And any liberal who wants change through political vote must recognize that. To me, there are three things we should focus on if you're serious about this pursuit. One, how to completely democratize the political parties? Because you can't always form a new political party and make it viable. Believe me, it's an incredibly hard thing, and it's very unlikely to work in most parts of the world most of the time. Very occasionally, because of unique set of circumstances, it may work. But in general, it is not possible to found a political party and make it work anywhere in the world. Therefore, changing the existing dominant political parties is the key. Internal democracy in the parties, in the choice of candidates and the choice of leadership, in particular, these two things. That's critical — fight for that. Then all the party workers, they're a vast majority. They're the palanquin bearers. They are the people who have the flag. They are the workers of the party. Without them, there's no party. They all become your allies. They're not your enemies. So fight for them. It may take some time. The second is fight for local government. At least some degree of empowerment like in Delhi, at least in urban India, at least in cities, if not elsewhere. Because rural India, even if you have local empowerment, the scale and the flight of talent and the lack of resources and the complete dependence and poverty — in all those conditions, to make democracy much more mature overnight is harder. But urban India must lead the way. And the third is fight for the electoral system which will make it easier. It should not be so hard and so painstaking to fight for the right things for the constitutional values and the same electoral system. And once you fight for these things and fight on specific issues, there'll be opportunities opening up in cities, in some of the important cities, and seize them. Let's see how it goes. But don't have illusions that there's going to be a dramatic political change in a sense of the party coming to power overnight in many parts of the country given the existing systemic rigidities. --- ## [Interview] The Life and Times of Sharad Joshi URL: https://indianliberals.in/primary-works/the-life-and-times-of-sharad-joshi/ ### Body # The Life and Times of Sharad Joshi Source: https://www.youtube.com/watch?v=a72QmbIbDe4 Duration: 460.2s Speaker 0 (00:05): Is a great man. He was one of the best English speakers in India. _Cleaned: skipped (transcript empty or too short for speaker identification)._ --- ## [Interview] The New Global Marketplace | Sudha Shenoy URL: https://indianliberals.in/primary-works/the-new-global-marketplace-sudha-shenoy/ ### Body # The New Global Marketplace | Sudha Shenoy Source: https://www.youtube.com/watch?v=y856OjQDLwg Duration: 1734.2s (empty transcript) _Cleaned: skipped (transcript empty or too short for speaker identification)._ --- ## [Interview] The Relationship Between Citizen and State URL: https://indianliberals.in/primary-works/the-relationship-between-citizen-and-state/ ### Body # The Relationship Between Citizen and State Source: https://www.youtube.com/watch?v=RzFNdSpu4ZU Duration: 536.8s **Speaker** (00:05): So we are often lost in the economic, principles of, liberalism and market and so on and so forth. But there's a larger philosophy at work. It's about the relationship between the citizen and the state. We are free people. We are born free. We have collectively come together to organize ourselves into a state system, a government, in order to fulfill our collective needs that we as individuals cannot fulfill. Therefore, the sovereignty rests with us. Even today, even in a country like India where people don't understand the role of the state adequately, those in power think that they are the lords and masters of the universe. The reality is that 80 to 90% of the things that matter in our lives are decided by us and our family or individually, good, bad, ugly, and we go on with life. And that's a saving grace. That's the reason why India is surviving despite bad governance and abject poverty and many other maladies. So the state has a limited role, but definite role. And that role cannot not necessarily be in one focus of power in Delhi, in Red Fort or in the the the union secretariat, I I despise the word central or central government or central therefore, you know, I'm pedantic, and I use some of these terms. Forgive me for that. Indulge me. The union government secretariat or Rashtrapati Bhavan. No. The power to the extent that has to be accessed collectively must be as close to the citizen as possible. That is the principle of subsidiarity. If a family cannot take care of the issues, collective work is required, then transfer the power to community or stakeholders. It may be a farmers producers organization. It may be a cooperative. It may be a school board to take care of your school because after all, who are the people who are concerned about the school's functioning? The parents and the kids who go to their school. Others don't really care except in a broad, generic sense that, you India is poorly educated. But otherwise, you don't have personal stakes in that. A community of stakeholders. Define them and empower them as much as you can. Then the local government, because there are some areas where you cannot define a stakeholder. I cannot define precisely who are the people who use the road in front of my house. Anybody can use it. You cannot say only you people use it. If it's a gated community, probably the road inside the gated community is primarily used by the residents of the community. But otherwise, there's there are a lot of things, services and public goods, which are used by people who cannot be defined clearly as stakeholders. There's a larger community as stakeholder. Therefore, territorial government as local as possible. There are some things because of economies of scale or because of jurisdictional overlap or complexity of management, they require organization and management at a larger level. That is where the province, the state comes. The state has province. The state government. There are some things, by the very nature of things, the defense of the realm, the currency management, and some other areas of the national highways framework, larger communication network, or or the transport transportation networks, or electricity grid at the national level, obviously require a broad national framework, then the union government comes. So unless we understand the link between the citizen and the states and the relationship, we always get confused. This notion that government is god, that the head of the government is a monarch. He is thereby a divine dispensation, and that he knows everything, that he encompasses everything, that we are subjects. It is a notion of monarchy. It is a notion of a feudal government. It is completely antiquated. It is completely unreal. It is completely dangerous. Now unless we understand that, it is not giving up the role of the state. You you have seen even in this discussion, I have been repeatedly urging. Do not underestimate the role of the state. State has a critical, though limited role. Whoever dismisses the role of the state is is doing that at his own peril. It is at the cost of society. Only when there is a strong and effective state, efficient state that clearly defined functions discharged well, can there be an efficient and working market. But that state need not be at one place for a number of good reasons. Number one, absolute power corrupts absolutely. Don't give anybody absolute power. Therefore, horizontal decentralization. Number two, if there are multiplicities of of authority, then you can experiment and innovate. Supposing I commit a horrendous mistake, I may be well meaning, but we are all human. Human beings are frail. We are prone to error. Now my misjudgment, my mistakes will not visit upon the whole society. A thousand people will try a thousand experiments. We'll see which works better, and then the society learns from that. The cost of mistakes is low, and the price of innovation is low. The benefits of innovation are high. That's the advantage of decentralization. The third is you and I, as citizens, we have the voice. Now your voice and my voice is much more effective in our own community. I keep telling people about I I right now, I'm speaking to you from the fifth floor apartment, in this residential complex. Suppose the elevator does not function here, I'm going to holler, not because Bharat Mata is in danger or constitution is in jeopardy. Because the elevator doesn't function, I cannot simply climb up every time. I'm now 64 years old. I'm pretty healthy, I believe. But doctors tell me that after a certain age, you walk as long and as fast as you want, but don't climb upstairs and climb down. And therefore, elevator is important. And my aged mother certainly cannot climb upstairs. So I'm not going to keep quiet until the elevator is set right or the water supply to my apartment, or the electricity, the outages within the apartment complex, you know, because there's a fuse box problem or something, or the watch and ward, because these are things that matter to me and my quality of life. I holler. I make it happen. Because there are other mobilizations, the caste, the the region, the religion, or the bigger Bharat Mata or emotional, they don't matter. What matters is what's important for me and my family. And that's what true democracy is. Democracy is not about Bharat Mata. Democracy is not about an emotional sloganeering. It's about the link between the citizen and the services she gets. What happens with the tax money? That link is clear only when the power is as local as possible. It does not require genius. Every successful democracy, without exception, has very effective local governments. You know, a country like Sweden, with just about five, six million population, maybe seven, eight million, you know what they're saying about local governments, Sweden and Norway? My god. We cannot look at school education at a centralized level, a small tiny country which is equal to, say, a large district in India. I held a district charge some thirty three years ago with a population at the time of 5,000,000 people. Now a country of 5,000,000 size, they say, my god, it's too big. We cannot centralize. We have to transfer power to the local communities. I was with many people talk about Singapore. Now I was with Singapore Public Service Commission chairperson, a lady in 2005 or so. She said, look, we do not and we cannot recruit public servants for all of Singapore. My god. It's too centralized. Each department recruits their own. We only make sure that there is a proper mechanism and there's a fairness in recruitment. Whereas in India, we think it's perfect and natural for that one authority at one level to do everything, and that's the right way. It's an absurd way of doing things. You take United States, you take Germany, you take Britain, you take France, Australia, New Zealand, Canada, any country. It's the communities and the local governments, and then the states and the federation, and then the federal government. Federal government may may get a lot of publicity in this age because the media people love the the the capital of the country and politics at a mega scale, but the real things that matter are local. --- ## [Interview] The Life & Legacy of Lady Abala Bose URL: https://indianliberals.in/primary-works/the-life-legacy-of-lady-abala-bose/ ### Body # The Life & Legacy of Lady Abala Bose Source: https://www.youtube.com/watch?v=d5Iak1JY59Y Duration: 437.7s **Narrator** (00:00): A renowned suffragist, social reformer, and an Indian liberal. Born on 08/08/1865 in the river bound district of Barisal in South Central Bangladesh, Abala devoted her entire life to break the oppressive shackles of a society that engulfed the lives of women. Inheriting reformist instinct from her parents, Durga Mohan Das, a renowned Brahmo reformer and one of the founders of Bethune College School for Girls, and Brahmamoyee Devi, who devoted all her short lived life to the betterment of the conditions of the widows. Bose devoted her life advocating for women's rights and education. When Abala Bose was five, her family was ostracized by the community for advocating the remarriage of widows. Abala and her sister, Sarala, received their education from Bethune School for Girls. The sisters went on to become two of the first women to attend Calcutta University, after which Abala pursued medicine in Madras. Post college, Abala married Jagadish Chandra Bose, who went on to be known as the father of radio science. In 1916, he received his knighthood, and Abala subsequently came to be known as Lady Bose. Accompanying her celebrated husband, she was one of the few women in nineteenth century Bengal who traveled abroad. Articulated her travel experiences in the narratives, which trace her personal growth and adventures in foreign lands. Bose recorded her travel experiences in England, Italy, America, and Japan. England Bhraman, traveled to England, written in three parts in 1897 to 1898. Italy Bhraman, traveled to Italy, written in 1901. In 1915, her traveler called Japan Bhraman, traveled to Japan, published in famous Bengali periodical Mukul, she wrote how the birth of a child, irrespective of its gender identity, was an occasion of merriment there. She recollected how women are liberated there without feeling ashamed. They freely roam on the roads. If the maidservant is not available, the housewives take the children out. As the practice of veiling does not exist here, the women here are healthy and strong. Men and women traveling together in rails and trams is a familiar sight there. Japanese women are educated, hardworking, and adept housekeepers. Bose presented herself as an informed discriminatory observer and acute commentator under the pseudonym Srimati Abala Bose. Her insightful female gaze found a similarity between the gender based discrimination in the zenana of Lucknow and the apparently liberated space of the English parliament. Her voyage to Japan played an instrumental role in shaping up her subjectivity and journey towards self fulfillment. In her essay, Nari Shiksha Samiti, women's education committee in Modern Review, she recollected how she was inspired by the Japanese women. On witnessing the development of education in Japan during my visit there in 1914, I became conscious of the deplorable state of education in my country. It triggered me to set up the Nari Shiksha Samiti. In 1919, she established the Nari Shiksha Samiti to promote the spread of education for women and provide financial assistance to widows. The organization worked hard to ensure female representation in educational bodies and pressed for gender sensitive syllabus in schools. Bose's travel writings presented a fine arrangement between the traditional culture and foreign culture, highlighting the inner conflict to fit in with the modern colonial mannerisms while keeping alive one's traditional upbringing. She published her travel writings in Mukul and Prabasi. Abala was appointed as secretary of the Brahmo Balika Shikshalaya in 1910 and became an educational innovator, broadening the curriculum to include self defense and introducing new methods such as the Maria Montessori system. In her lifetime, Abala set up around 275 primary schools and 32 adult education centers in different parts of undivided Bengal. Abala and her husband were close friends with Swami Vivekananda and Sister Nivedita, his disciple. With her help, Abala was able to train teachers at the kindergarten level, and the two revolutionized the educational system. In 1925, Abala established the Vidyasagar Bani Bhavan, the first institution in Bengal that trained primary and preprimary teachers. It provided teachers trainings as well as education to widows. These women would then be employed by schools that came under the jurisdiction of the Nari Shiksha Samiti. Abala's exposure to the contemporary education system in Europe proved to be helpful in setting up the training system. In 1926, Lady Bose set up the Mahila Shilpa Bhavan in Kolkata and Jhargram to encourage distressed women and widows to take up entrepreneurship and ensure financial independence. These women were trained in different arts and crafts, and the institute would then help them set up their own business. In 1935, she opened the Women's Industrial Cooperative Home in Kolkata, which later became a relief and rehabilitation center for women from Bangladesh. Abala Bose did not limit herself to education. She was amongst the earliest trailblazers of the Indian suffragist movement. In 1917, she was part of a delegation that met with Edwin Montagu, the then secretary of state during the negotiations of the Montagu-Chelmsford reforms, which included suffragists such as Sarojini Naidu, Margaret Cousins, and Ramabai Ranade. In a piece, the present state of primary education in Bengal, she wrote for Modern Review in March 1927. Women were entitled to better education not so they can get better matches in terms of marriage and not even so they become more valuable as daughters in law in their new homes, but because a woman like a man is first of all a mind and only in the second place physical and a body. --- ## [Interview] What is the Role of Government in Agriculture? URL: https://indianliberals.in/primary-works/the-role-of-government-in-agriculture/ ### Body # What is the Role of Government in Agriculture? Source: https://www.youtube.com/watch?v=azQ-UjT-zHA Duration: 360.1s Speaker 0 (04:04): 40%. _Cleaned: skipped (transcript empty or too short for speaker identification)._ --- ## [Interview] Tribals and Development: Countering the Myths URL: https://indianliberals.in/primary-works/tribals-and-development-countering-the-myths/ ### Body # Tribals and Development: Countering the Myths Source: https://www.youtube.com/watch?v=i4lKI0b-J5k Duration: 277.7s **Ambrish Mehta** (00:05): Most of the tribals, you ask them, this is the myth. The tribals don't want development. This is complete myth. They don't want better life for themselves and their children and their families. First of all, no outsider has any right to say that they must live like this. That is our first thing. At the same time, we would also believe that in the name, no government has the right to displace them in the name of their work. Because then we are not carrying out any developmental activity for them. They're basically making making them sacrifice for the development of others. That is what has happened throughout the last sixty years after independence that we have asked. Right? We have not really given them an alternative of developing themselves. We have given them the alternative of sacrificing for the development of others. That has has happened. And that is the thing which is creating resistance, protest, and all these things are because of that and not because the the tribals don't want development. They want development. They want education. They want good health. They want good houses. Tribal women who said that they're dead. They don't enjoy living in these kachcha huts where they're where they they have to do back-breaking work every year. They want good houses where they don't have to work all the time, and they don't have to spend most of the time maintaining those houses. These types of things are happening. And the main thing which we have found and which we have thing, because what happens that it all depends on how much you do you have the right over the resource or not? As soon as FRA titles, people started receiving FRA titles. First thing they have done in most of the villages, and, you know, I am sure this must be true for all all over the country where the people have issued proper titles. First thing they invest in, to develop the land. They would carry out land levelling activity. They would create irrigation infrastructure. They would create construct farm ponds. They would create even orchards, mango orchards, and all this. So their overall view of that land, initially, they could not do these things because the land did not belong to them. And they would be investing their hard earned money from the labour which they go out to the cities and earn money. Whatever money they earn from their migrant through migration, they are investing in these lands. And the productivity of the land is going up like anything. And this we could see only in very few years, over three years, the whole landscape of the villages have changed. And where you saw initially barren, unirrigated land, you now see cultivated lands with greenery all over the year. And growing forests. Now they have improved productivity, and they are selling their produce. They are growing vegetables. They are growing mangoes for sale in urban area. And they are they they they are demanding irrigation so that the productivity goes even further. All these things are happening. And they are all of them with little bit economic security. Once the economic situation started improving through earnings from the labour and through this improved level of productivity, the first priority is education of the children. They are the children are they are spending a lot of money. Send them children for education outside because locally, there are no good schools. So they will send them outside in residential schools where they have to gain much more money. It's not that they get free education. And even for higher education, technical education, nurse, and all of the things, they are the type of farmers that's spending a lot of money. So these are the these are this is what they want. The most important thing is that you give them the rights, and there is no conflict between development and environment. Forests also can also become healthy, and tribals can also prosper. That is what we we believe in and live in. --- ## [Interview] Union Budget 1992-93 by Nani Palkhivala URL: https://indianliberals.in/primary-works/union-budget-1992-1993-by-nani-palkhivala/ ### Body # Union Budget 1992-93 by Nani Palkhivala Source: https://www.youtube.com/watch?v=br2z9rOkPbE Duration: 372.9s **Nani Palkhivala** (00:00): Balance of trade deficit arises from the fact that we import goods worth 33,000 crores as we did in this year, and we export goods worth 28,000 crores. So there is a deficit of 5,000 crores. But it's not the deficit of one year. It has been going on year after year after year. If you ask me, is this country capable of exporting more? I think there is not the slightest doubt that it can, provided we follow the right policies. This country, I'm never tired of saying, is not poor by nature, but it is poor by policy. **Narrator** (00:42): Today, we are going to talk about Nani Palkhivala's take on the Union Budget nineteen ninety two ninety three, which was done as part of India's liberalization reforms. He mentioned that the four main thrusts of this budget were liberalization, integration of India into the global economy, reduction of taxes, and a stable and healthy balance of payment situation. He called this a watershed budget, which indeed it was, and that it marked the beginning of a new chapter in India's economic history. Of course, it did. He believed that India's poverty since independence was a result of our ideological socialism. He made his point by comparing India's economic indicators with other similar countries. Back then, we had 15% of the world's population, but less than 1.5% of the world's income. While South Korea, Hong Kong, and India started at the same level, South Korea's per capita income was 13 times, and Hong Kong's per capita income was 30 times higher than that of India's. India's per capita income did not even double since it became a republic. He also addressed unjustified criticism made about this budget. While some said this budget was dictated by the World Bank and IMF, Nani Palkhivala said that he believed in the potential of this country and that the government was capable of thinking by itself after forty years of mistaken policy. He rebutted the fears of being swamped by the multinationals, saying that the entire world is not East India Company and that the emerging world economy was erasing the national boundaries. While some complained that the budget did not do enough to counter inflation, he said that inflation was a worldwide phenomenon in the context of the then ongoing recession. He explained why this budget made sense through various macroeconomic indicators. First, India was facing a balance of payments crisis before this budget. Let us try to understand this in a simple manner. Balance of payments of a country is an account statement of its transactions with respect to the rest of the world. It comprises of current account and capital account. The current account comprises imports and exports of goods and services, grants, transfer payments, etcetera, while the capital account comprises foreign investments, loans, assets, and so on. The sum of these two should be zero for the balance of payments to be in equilibrium. By June 1991, our imports far exceeded our exports, and our foreign reserves were insufficient to pay for our imports. In addition, India saw withdrawal of non-resident deposits, a rise in oil prices due to the Iraq war, and lackluster exports. This was called the balance of payments crisis. In this article, Nani Palkhivala pointed out that the balance of payments was restored to less than critical level. Second, Nani Palkhivala called the partial convertibility of the rupee a sensible step. Convertibility of a currency means the ease at which the currency can be converted into international currencies at market exchange rates. When we say a particular country's currency is fully convertible, it means that it can be converted into any other country's currency without any regulatory hurdles. When we say a particular currency is partially convertible, it means that the currency can still be converted into other currencies but might need regulatory approvals beyond a certain threshold. Currency convertibility accelerates global trade in that currency because it can be used by anyone across the world. Prior to 1991, any transaction in foreign currency through the Indian rupee had to be approved by the RBI, and this imposed restrictions on the magnitude of exports from India. Nani Palkhivala explained this using the example of Pakistani rupee. At the beginning of 1992, 100 Pakistani rupees equaled 86 Indian rupees. But after Pakistani rupee was made fully convertible, 100 Pakistani rupees equaled 111 by the time of this budget. Nani Palkhivala also appreciated the reduction of statutory liquidity ratio from 38.5% to 30% since it would allow banks to lend more to businesses and reduce the bank interest rate. SLR refers to a minimum reserve that the commercial banks have to maintain with them according to the RBI's monetary policy. The idea behind this policy is to reduce the risks taken by the banks and thereby protect the deposits of the public. However, a high SLR means that the bank has less capital to lend, thus negatively impacting the credit options for the entrepreneurs. Hence, a moderate SLR helps to maintain this balance between reducing the risk rate of the banks and enabling the growth of businesses. Currently, SLR is at a rate of 18%. If you want to know more about Nani Palkhivala's take on the Union Budget nineteen ninety two ninety three, read his entire article on the link provided below. --- ## [Interview] Vision for a Prosperous India - Gurcharan Das URL: https://indianliberals.in/primary-works/vision-for-a-prosperous-india-gurcharan-das/ ### Body # Vision for a Prosperous India - Gurcharan Das Source: https://www.youtube.com/watch?v=xvLLuK8wYiE Duration: 361.9s **Gurcharan Das** (00:07): It is true that we can't even begin discussing a prosperity for India unless we have growth. So growth skeptics are basically idiots. The reality is, yes, we want that growth to be inclusive. We want to create formal jobs. But unless you have a growth rate between above eight, between 9%, you won't get those things. And so it's very easy to say, oh, but it's jobless growth. Well, that's rubbish. There's no such thing as jobless growth. Jobless growth may be but certainly for a country like India. And even now when people say this is jobless growth, it's it's wrong. I mean, it's not the kind of growth we wanted to bring Ached in. We wanted more jobs which come through exports, etcetera, more productive high productivity jobs. But so, you know, I'm saying these are the issues exactly that to make up your mind whether growth and equity go together or do they go separately. The best thing you can do for entrepreneurship is what you can do for the whole economy. One, you have to get rid of the labor legislation that we have on record. It's the worst in the world. It positively discourages jobs. Secondly, land. So land, labor, and capital, are the three factors of production, today we have got them wrong. Those need to be fixed. So as long as you can make India an as a friendly place to do business, meaning keep raising the country's rank, we brought it this government brought it from 142 to a 100. That's a big jump. I think if you can take that up, we should be aspiring to be in the top 30 countries in the world. Now Modi had this target of 50. We'll find out what the 2019 will show. Certainly, yes, I do still believe that India needs to get rid of this Inspector Raj. A lot of it is going away because everything is going online. And so the citizen and the official are not you know, you're removing the official from the citizen interface. We've got to keep doing more of that. We have to keep improving the the enforcement of contracts, which is one of the worst in the world in India. So all these areas will help improve will ease the doing of business in India. That will do plus the labor, land reforms will make India a better place to do business. So if you do that, you automatically help entrepreneurs. That's the mistake because nobody has sold the market in India, and that's why the leaders can make this false trade off between growth and equity. It's a false trade off because real equity real equity comes through jobs. It comes from the market, comes through economic growth. Yes. The economy is going to change. There'll be new kinds of jobs. But I would say that India's priority is still to deliver the basics of a good education. You know, the basics of a good education means to be able to ask questions with confidence, to be able to interrogate a text rather than mug up text, you know, the the the confidence to which comes from writing clearly, writing a paragraph clearly, communicating in five minutes clearly, these are the needs. And all the rest, one will learn through if we can if you can get the basics right and you can have the confidence to write and speak clearly, that's the best thing that education can give you. Education is about making a life. It's not only about making a living. And if you can learn to make a life, you have it for the rest of your life. And you have to change the attitude of people like the tax department who treat everybody like a criminal. You know? So I I I would say that just and and the tax department too. They've they've clipped their wings, you know, of the tax department. You can now online put your I mean, I paid my taxes online. I paid the I got the refund online. I never saw a taxman in the last three years. --- ## [Interview] The Life & Legacy of Dr Janaki Ammal URL: https://indianliberals.in/primary-works/women-liberals-dr-janaki/ ### Body Transcript not available. --- ## [Interview] Why is it Difficult to De-regulate Labor in India? URL: https://indianliberals.in/primary-works/why-is-it-difficult-to-de-regulate-labor-in-india/ ### Body # Why is it Difficult to De-regulate Labor in India? Source: https://www.youtube.com/watch?v=iO8hP9ZwUhc Duration: 275.2s **Speaker** (00:26): On labor relations, the problem is a little larger. That it is undisputed that as soon as you provide an incentive for industry to remain small or for industry not to grow, it will do so. Because it is profitable for them to use the incentives, the subsidies that are provided for the small and medium sector. It is also useful for them to evade the heavy handed regulation that we do of the labor sector. But I think that it would be in the Indian context is it would be politically unsellable to completely deregulate on the labor regulation aspect for the simple reason that we are a fairly lawless society in that sense. Our judicial system is not as active as it should be. So a person who is aggrieved by let us say his employer or a person who is a consumer who is aggrieved by a supplier, they have no recourse really in the near term and at an economical level of cost to the judicial system. As a result of that, heavier regulation, right, was one way of ensuring a low level of security from risk. That's a short term solution we need to— Yeah. The forming the issue is strengthening. Absolutely, yeah. But the chicken and the egg situation also have to be thought of. You know, which do you do first? Do both do both together? Or should there be a sequencing? I mean, in a very practical sense, imagine if you were a minister tomorrow, and you stood up in parliament and you said that I am deregulating labour completely. Right? Knowing full well that no other legal recourse then, real legal recourse would be left to those people amongst the labor force who may have genuine grievances. I mean, consider the case of Vijay Mallya for instance. This is a guy who is living in luxury even in London today. But he left the country without paying his employees a few thousand crores, which is probably the cost of his buttons or, you know, maybe the cost of one month's culture. But he didn't pay these guys, and he left. And he's not a small time entrepreneur. He's been a member of parliament. He was one of the biggest, you know, formal sector industrialists. They have to be they have to become more socially responsible in a far more positive way than they are today. And until that is done, just removing labour regulation is a long call politically. In terms of, you know, if you take a very technocratic approach, certainly, you know, the more you know, a nanny state is no good for anybody. And labor regulations are part of the nanny state where you're considered to be a child all your life and there is a mother which is the state, the maibaap, you know, which is looking after you. Certainly that has to go but I think we need to think a little more about the sequencing. --- # ThePrint mirror > Canonical version on theprint.in. Cite the theprint_url field, not this mirror. ## [ThePrint] Free-enterprise features are reshaping Russia’s socialist institutions: AD Shroff URL: https://indianliberals.in/theprint-mirror/ad-shroff-socialism-free-enterprise-lessons/ ### Body _Mirrored from [ThePrint](https://theprint.in/opinion/indian-liberals-matter/ad-shroff-socialism-free-enterprise-lessons/2794663/) on 2026-05-16. Originally published 2025-11-29. Author retains all rights; the canonical version on ThePrint should be cited. This mirror exists for AI-agent readability — search engines are asked not to index it (canonical SEO weight stays with ThePrint)._ # Free-enterprise features are reshaping Russia’s socialist institutions: AD Shroff Democratic socialism has been offered as a solution. A scientific study of democratic socialism is, therefore, necessary. Fortunately for us, the experience of countries which have experimented with it is available. Socialism has no commonly accepted definition. There are so many definitions that C. E. M. Joad observed that socialism was like a hat which had lost its shape because too many people had worn it. But, for a scientific economic analysis, socialism can be divided into two parts: its objective, and methods employed to achieve that objective. The objective: “a society of the free and the equal.” The methodology: *state ownership* of the means of production, distribution and exchange, by nationalisation of existing enterprises, and through the establishment of a Public Sector (or state enterprise); and centralised comprehensive planning of all economic activities under the auspices of the state. Democratic socialism uses this methodology through parliamentary means and relies on evolutionary changes. Communism, also described as “scientific socialism,” relies on the dictatorship of one party and revolutionary changes. Several European countries like Great Britain and Sweden have experimented with democratic socialism, while Soviet Russia, Poland, Yugoslavia, Communist China, etc. have experimented with Communism or “scientific socialism.” Their experience is worth close study because the universally acceptable objective of human welfare itself is considerably affected by the socialist methodology. The swing today is away from both state ownership and centralised comprehensive planning in socialist and Communist countries. A well-known British economist, Graham Hutton, has commented: “Private property, private enterprise and private enterprisers provide a democracy’s dynamic. Take these away and you take away both democracy and its dynamic, as we have long seen in communist countries. This is a dilemma in which Europe’s Social-Democrats called by Communists ‘reformist socialists’ today, but formerly termed ‘capitalist lackeys’ have been landed with what used to be called “socialism.” The changing ideas of European socialists are expressed in a remarkable book entitled : “Socialism in the New Society”. The author is Mr. Douglas Jay, a leading member of the British Labour Party and a close associate of the former party leader, the late Mr. Hugh Gaitskell. Having observed the effects of socialist methods, Mr. Jay concludes that “absence of private property is also a denial of freedom.” Dismissing the socialist concept of “perfect equality” as impractical, he pleads for “not equal shares, but fair shares; not equality, but social justice”. While on the one hand state ownership and nationalisation thus stand discredited among socialists, on the other, communist countries, notably Soviet Russia, are progressively finding that the socialist method of centralised, comprehensive planning does not lead to rapid economic growth. To appreciate this changed thinking, one must understand what is meant by centralised comprehensive planning. Essentially it means (a) mobilisation of all resources by the state and their use on the basis of a comprehensive plan drawn up by a planning board or commission according to its ideas of priority; (b) the strategy of concentrating on heavy industries at the cost of agriculture and consumer goods industries; (c) management of industries through state enterprises and of farming through state farms or collectives also known as joint co-operative farms;(d) and, finally, administration of all economic activities by the Government through a framework of extensive and intricate controls at every stage of production, distribution and exchange. This form of economic activity ignores some basic laws of economics such as incentives as a means of greater production, consumer preference as a source of investment decision and rational allocation of resources in the economy, and the cost factor in production. But these factors are slowly finding their entry into the Soviet economic system. Just as the economic waste of centralised planning and the price of ignoring incentives are being realised, the failure on the agricultural front and in the production of consumer goods is also making a dent on doctrinaire thinking in the Soviet Union. The emphasis has shifted from heavy industries to agriculture. Having been put to the necessity of importing food grains from free enterprise countries like Canada, “the Central Committee of the Party is presently planning to carry out such measures which will make it possible to lay a stable foundation for our country to obtain big guaranteed harvests, especially of grain.” Years of experimentation with joint co-operative or collective farming have had disastrous results on production of food grains. Once again, principles of free enterprise have been vindicated even in this sphere. A survey by the U.N. Food and Agricultural Organisation, in October 1962, revealed that private small holdings accounted for about a third of Soviet agricultural output. It said that the family plot of farmers of every collective or state farm represented not only a “compromise between the persistent individualism of the peasant and the communist doctrine” but also met current Soviet economic needs. With growing realisation of such inadequacies under centralised planning, Russians are introducing free enterprise features in their economy. For instance, trade marks and advertising have been introduced. One Soviet economist says: “The trademark makes it possible for the consumer to select the goods which he likes. This forces other firms to improve the quality of their own product in harmony with the demands of the consumer. Thus the trademark promotes the drive for raising the quality of production.” Dr. Marshall Goldman, of Harvard’s Russian Centre, has disclosed that in 1963 Soviet enterprises would spend about 40 million dollars (about Rs. 20 crores) on advertising. There were already over 30 advertising agencies as a link between the producer and the consumer. Thus free enterprise features are not only changing socialist economic institutions in Russia, but also finding vigorous proponents there. It is amusing to read the advice offered by Soviet economists to Communist China. Recent Soviet press articles have chided Chinese leaders for ignoring “objective economic laws.” A Soviet economist is quoted as saying that Chinese leaders had ignored “all laws of economic development” and had sought to replace “planning and cost accounting” by “volitional decisions.” These policies and the setting up of communes, he declared, had led to an “abrupt drop in the living standard” of the Chinese people. *This essay is part of a series from the [Indian Liberals](https://indianliberals.in) archive, a project of the [Centre for Civil Society](https://ccs.in). The following is an excerpt from the Indian Libertarian Journal, titled: “Make English The Lingua Franca of India,” published on 15 January 1964. The original version can be accessed [here](https://indianliberals.in/the-indian-libertarian/the-indian-libertarian-jan15-1964.pdf).* --- ## [ThePrint] Bank nationalisation will be a blow to India’s mixed economy, lead to totalitarianism: Phiroze Shroff URL: https://indianliberals.in/theprint-mirror/bank-nationalisation-indias-mixed-economy-totalitarianism-phiroze-shroff/ ### Body _Mirrored from [ThePrint](https://theprint.in/opinion/indian-liberals-matter/bank-nationalisation-indias-mixed-economy-totalitarianism-phiroze-shroff/2717568/) on 2026-05-16. Originally published 2025-08-09. Author retains all rights; the canonical version on ThePrint should be cited. This mirror exists for AI-agent readability — search engines are asked not to index it (canonical SEO weight stays with ThePrint)._ # Bank nationalisation will be a blow to India’s mixed economy, lead to totalitarianism: Phiroze Shroff Every now and then we hear the cry that banks should be nationalised. The taking over of banks by the State is urged on various grounds, namely, that it is necessary in order “to mobilise resources” for the economic development of the country, “to prevent the concentration of economic power”, “to check malpractices in the working of banks” and to put a stop to profiteering” by banks. All these arguments will be found to be untenable on a dispassionate scrutiny of the issues involved. The primary function of banks is to mobilise resources for economic development and that is exactly what the banks in our country have been doing. They have been working to attract deposits from those who have funds to spare on [a] long or short term basis. They have been making loans for industrial as well as agricultural expansion in accordance with numerous legislative requirements. During recent years, they have opened numerous branches in order to extend credit facilities to people even in remote areas, even though the banking business in several branches has proved unremunerative. They have invested more than Rs 600 crore in Government securities. They have been broadening their capital base and increasing their reserves in accordance with statutory requirements. The enormous increase in their deposits during recent years bears testimony to the confidence which the public have in their working. By undertaking the foreign exchange business, our banks render considerable help in promoting exports. An occasional appearance of a black sheep in the sphere of banking, as in any other sphere, does not detract from the value of the service which the banks as a whole are rendering to the country. What is regrettable is that though the Reserve Bank is invested with extensive powers to prevent malpractices, in one or two cases it failed to exercise them to protect the interests of the depositors as well as shareholders. Ninety-five per cent of bank advances in India are secured loans. The corresponding figures for the USA, is only thirty per cent. This amply bears out the fact that our banks pursue a very conservative and safe policy while using the depositors’ money for making loans. Various legislative measures have been taken to prevent possible malpractices by banks. The Deposit Insurance Scheme ensures security to depositors. Under the Scheme, the premium payable is 1/20 of 1 per cent. At present, the annual premium on the total deposits with the banks amounts to a little over one crore of rupees. If the Government desires to increase banking facilities, nothing prevents it from expanding the number and activities of its own banking and credit institutions and competing with banks in the private sector in terms of equality and fair play. There is no force in the argument that the banks are making huge profits. The dividends which the shareholders receive on their investments work out to about six to eight per cent taxable, on the basis of ruling quotations. In most cases, dividends are considerably less on the basis of actual investment by the shareholders. Assuming some banks have made somewhat higher profits during recent years, it is the Government which has been the greatest beneficiary. Not only does it take 50 per cent of the profits by way of the corporation tax, but it takes a considerable slice as income-tax on dividends in the hands of the shareholders. Indeed, the Government itself makes much higher profits in a few of the Public Sector concerns where it enjoys a virtual monopoly, though its over-all performance in the working of the numerous public sector concerns is highly disappointing. The banking industry in our country is subject to numerous controls, some of which are not only irksome but are uncalled for in the interest of the development of banking along right lines. However, the sphere in which banks can work on their own initiative is very valuable from the point of view of the society. The relationship between a bank and its client is one of great mutual confidence. It should be as intimate as between a physician and his patients. If the banks were to be nationalised this relationship would become truncated if not totally destroyed. A banker is required to make quick decisions after bearing in mind various factors in his relationship with his client. He has to assume a reasonable degree of responsibility in making the decisions. The employee of a state-managed bank is naturally reluctant to shoulder this responsibility. He is anxious to fortify himself with authority and approval from his superiors. The process of obtaining such approval is time-consuming and defeats the purpose for which the institution of banking exists. It would be pertinent to quote in this context Mr C Subramaniam, Union Minister for Steel and Heavy Industries. Mr Subramaniam recently said that the Government had thought that members of the I.C.S., who had been excellent public administrators, would manage public corporations too, but very few of them had proved successful. The Minister observed that, “In Government departments decisions are taken on the basis of precedents, no matter how long it takes to find out the precedent. In industry and business, it is absolutely necessary to take quick decisions. Hesitancy and delay in taking decisions is the greatest harm to industry and business.” An unimaginative compliance with regulations for extending credit is not the best way of transacting banking business. Government servants in the role of bankers would import red-tapism into banking. Needless to say these inseparable adjuncts of civil service are fatal to sound banking practices. Further, it has to be noted that civil servants have not made themselves conspicuous for courtesy or consideration to the members of the public. To give one instance, whereas some banks have made arrangements for the cashing of the current account cheques within five minutes of their presentation, we need not be surprised that because of red-tape procedures under bank nationalisation a holder of a cheque may have to wait for fifty minutes or more before his cheque is cashed. If banks were to be nationalised, politicians would start interfering with bank officials and put on them undue pressure. The Government would get huge patronage in respect of making appointments on the staff as also extending credit to various interests. An element of nepotism and favouritism may be introduced in the sphere of banking which should be free from these vices. Unscrupulous elements may use the enormous power of granting or denying credit to stifle political opposition. This might deal one more blow to the working of democracy in our country. Nationalisation of banks would not be to the interest of the bank employees. Against the combined role of the State and the employer, the employees will not be able to get their legitimate dues. Complaints have been made that labour legislation is often ignored in Public Sector concerns, giving rise to much discontent amongst labour. Friction between management and labour is responsible for lowered productivity. A number of Public Sector concerns are notorious for indiscipline of the employees and high degree of absenteeism. The country suffers as a result of all this. Idle capacity in men as well as machines in Public Sector concerns has been criticised by the Estimates Committee of the Lok Sabha. The latest Audit Report (commercial) placed on the table of the Lok Sabha by the Finance Minister has referred on the irregularities in the accounting and auditing systems of Government companies. For instance, Hindustan Shipyard and Indian Rare Earths diverted their audit staff for the preparation of final accounts, thereby, as rightly pointed out by the Audit Report, “defeating the very object of internal audit.” This kind of irregularity in keeping accounts in case of nationalised banks would undermine the credit structure in the country, resulting in the loss of public confidence and consequent economic disruption. Our banks are sometimes blamed for not holding the price line. The banks, their employees and the public generally are themselves victims of governmental measures and policies which push up prices. To hold the banks responsible for the failure to hold the price line is unjustified. Far from nationalising banks, the time has come to institute a thorough probe into the working of the Public Sector concerns and to hand over to private management all State concerns which are working inefficiently. Without a free market economy there will be an end to all fundamental rights. There can be no true democracy without the recognition and enforcement of fundamental rights. Fundamental rights must necessarily include the right of the people to practise any legitimate trade, profession or calling. Accordingly, people should be free to carry on banking subject to reasonable regulation. State monopoly of banking will deal a serious blow to our mixed economy and pave the way for a totalitarian regime. Advocates of totalitarianism are fully conscious of this development, which explains their enthusiasm for bank nationalisation. The people and the Government must, therefore, remain vigilant against the machinations of the enemies of democracy and basic freedoms. *This essay is part of a series from the [Indian Liberals archive](https://theprint.in/indianliberals.in), a project of the [Centre for Civil Society](https://ccs.in/). It is taken from the economic supplement of The Indian Libertarian and titled ‘Bank Nationalisation Will Endanger Our Democracy And Economic Growth’, published on 15 December 1963. The original version can be accessed [here](http://indianliberals.in/the-indian-libertarian/the-indian-libertarian-dec15-1963.pdf#page=11).* --- ## [ThePrint] Capitalism is the bedrock of all economic progress. Socialism is a parasite: KD Valicha URL: https://indianliberals.in/theprint-mirror/capitalism-is-the-bedrock-of-all-economic-progress-socialism-is-a-parasite-kd-valicha/ ### Body _Mirrored from [ThePrint](https://theprint.in/opinion/capitalism-is-the-bedrock-of-all-economic-progress-socialism-is-a-parasite-kd-valicha/2784867/) on 2026-05-16. Originally published 2025-11-15. Author retains all rights; the canonical version on ThePrint should be cited. This mirror exists for AI-agent readability — search engines are asked not to index it (canonical SEO weight stays with ThePrint)._ # Capitalism is the bedrock of all economic progress. Socialism is a parasite: KD Valicha Many people in India today believe that free enterprise, unchecked and unrestricted by any State control, will lead to anarchy and disorder. This wrong notion arises from a misconception about the term ‘free enterprise.’  Logically, there can be no anarchy; there can only be various orders. The difference between free enterprise and socialism or communism is not that the former is disorderly while the latter are given to order but a difference between patterns of economy. Under free enterprise, there is absence of an authority to establish and regulate the hierarchy of needs and wants and the proportion of each for the individual while under communism all wants of the individual are dictated by a central, supreme authority. Thus those libertarians who defend free enterprise are not in the pay of capitalists but in the pay of their own conscience. The libertarian believes that liberty is the sine qua non to progress, that progress is impossible without freedom. Liberty is defined as the faculty and possibility of making a choice. This implies a double-ness; for, freedom is both social and individual. The faculty to choose is a personal quality and calls for individual development. Whereas the possibility to exercise choice depends upon social conditions and environment. Free enterprise is the only guarantee of the widest possible choice. Free enterprise does not mean a repeal of all laws for all laws are by no means necessarily a narrowing of freedom. Certain laws are necessary for the maintenance of justice and prevention of crime. The method of free enterprise is that of democratic legislation; it seeks to minimise injustice through legislation and not through political intervention. Thus, for example, evils like the various monopolies can only be eradicated by a proper reform of legislation, not by nationalisation. Furthermore, free enterprise is the only system that guarantees a maximum of productivity and hence the greatest good of the greatest number. Capital in a capitalistic society is the tool used for production. Since any socialist State which owns all the tools will have to pay interest on its bonds, it boils down to a question of State capitalism versus Private capitalism. For, the capitalist payment or profit is really payment for the use of tools. Now, so far no State has been devised which will use the tools to a greater productivity. Why then concentrate all the capital into the hands of the politicians and create the greatest and the most tyrannical monopoly that ever existed?  From irrational inclinations comes also the vilification of profits. Profits and morality have nothing to do with each other. Profits are bad only when they are not enough; profits are the wealth of a nation. The more the profits, the more the prosperity. All abuses against profits arise out of a misconception and ignorance of the nature of economic processes. Some profits are no doubt improper; but these are due to monopolies.  Even Government enterprises cannot afford to neglect profits. The test of any enterprise is ultimately profits, except in the case of social and public works. Maurice Zinkin writes in Development for Free Asia: “All Asian planning, therefore, should make profit the centre of its attention. Yet so deep is the aversion to the idea of profit. . .that none of the plans which have been prepared, not even the lengthy and detailed Indian First Five-Year Plan, discusses profit at all. The question the planners ask in Asia is not ‘How can the national income (which, it must be remembered, is purely a measure of satisfaction in terms of money, and takes no account of the relative moral value of those satisfactions) be increased the most at the least cost?’ Instead they begin from a whole series of different premises and build upon them. They argue that wealth comes from industrialisation; so they create uneconomic industries and bolster them with protection. They accept that national safety requires a high degree of autarchy; so they build up defence industries and automobile industries which run expensively because their production is too small.  “They consider that the handicraftsman represents certain social values it is important to preserve; so they keep him in existence by subsidies. They worry about their balance of payments; so they lend money to shipping companies at uneconomically low rates of interest, or talk of synthetic petrol plants. They have the political pressures on their Ministers to consider; so they spread schemes evenly over the country and give equal attention to backward areas. They share the intelligentsia’s suspicion of the businessman and faith in the State; so they crib and cabin the businessman at every turn and extend the State’s sphere constantly, though the State is short of entrepreneurial and managerial talent, and its size gives it a bias towards the long-term low-return scheme rather than the short-term high-return scheme.” Rational economic thinking cannot afford to be dictated by personal whims and ideological quackery. To brush aside capitalism as evil or to decree profits is to neglect one’s own interests. For capitalism is the bed-rock of all economic progress. Socialism is a parasite. British socialism is all the while sustained on American capitalism. Libertarianism which seeks to retain capitalism while curing it of monopoly has always been fighting. In the anti-mercantilist epoch, its champion was Adam Smith. In the anti-conservative epoch, John Stuart Mill stood out as its defender.  Today is the anti-socialist era. Libertarianism is fighting; dedicated with all its power and love of liberty. It does not matter whether it wins in the political sphere. What matters is not political parties but ideas. *This essay is part of a series from the *[*Indian Liberals*](https://indianliberals.in/)* archive, a project of the *[*Centre for Civil Society*](https://ccs.in/)*.** It is excerpted from The Indian Libertarian Journal, with the essay originally titled: “Independence Day-looking before and after,” published on 15 August 1957. The edition was released on the 10th anniversary of the Indian Independence. The original version can be accessed *[*here*](https://indianliberals.in/the-indian-libertarian/the-indian-libertarian-aug15-1957.pdf)*.* --- ## [ThePrint] Capitalism isn’t responsible for mass unemployment. Look at Japan, Singapore: BS Iyer URL: https://indianliberals.in/theprint-mirror/capitalism-mass-unemployment-japan-bs-iyer/ ### Body _Mirrored from [ThePrint](https://theprint.in/opinion/indian-liberals-matter/capitalism-mass-unemployment-japan-bs-iyer/2848007/) on 2026-05-16. Originally published 2026-02-07. Author retains all rights; the canonical version on ThePrint should be cited. This mirror exists for AI-agent readability — search engines are asked not to index it (canonical SEO weight stays with ThePrint)._ # Capitalism isn’t responsible for mass unemployment. Look at Japan, Singapore: BS Iyer It is only in recent times that a good deal of attention has been given to the problem of unemployment. Not very long ago, it was thought that a person was unemployed because of some defect in him. It took very long time to realise that personal characteristics may not have anything to do with unemployment which may arise due to inefficiency of economic system. However, when this was realised, the problem was analysed in detail because the cost of unemployment is heavy. Further unemployment must be eradicated at the earliest because prolonged unemployment works like trap which turns unemployed workers into unemployable workers. By unemployment let us take it to mean involuntary unemployment. Further in the context of Indian conditions it’s necessary for us to add one more branch of unemployment viz., that of disguised unemployment. The problem of unemployment has taken a serious turn in India because of the high rate of growth of population and the consequent growth of potential labour force amounting to 1.5 to 2 million per year. ### **Is socialism the solution to the problem of unemployment?** Apparently there seems to be no relationship between a particular “ism” and the successful solution of the problem of unemployment. No economic system has “unemployment” as one of its implied or expressed feature. The most important factors responsible for unemployment and underemployment in India is the scarcity of capital. The solution, therefore, lies in stepping up the rate of investment. We may have to invest as much as 20% of the national income to have any favourable impact on unemployment situation. There are certain factors which must be taken into consideration. The first is the growth of consumption. If more employment is created, the demand for consumer goods will step up, and unless steps are taken to restrict the growth of consumption inflationary pressures in the economy will increase and either the pace of development will be reduced or the painful process of inflation will bring about a redistribution in consumption. Therefore, it becomes necessary to control prices of essential commodities and to restrain consumption of non-essential commodities by taxing them or stepping their imports or production in the economy. In addition, steps must be taken to increase the supply of consumer goods (mainly wage goods) and to increase productivity of available resources. Such drastic controls cannot function automatically in a free enterprise economy. But, in a socialist economy, there is ample scope for the introduction and success of such step when taken through governmental machinery. There are many lines of production where labour can be utilised in schemes which have a short gestation period. Some labour intensive activities in rural areas are; local capital construction (to increase and regulate water supplies build roads, constructing storage facilities, improving village social services and amenities, more labour intensive methods of cultivation (double or treble cropping, heavy manure, deeper ploughing, closer planting, more wedding) development of rural industries or other productive activities (animal husbandry; afforestration, poultry farming, fruit growing, rural handicrafts, etc.) In urban areas more employment opportunities can be created by fuller utilisation of existing capacity, (multiple shifts) development of handicrafts cottage and small-scale industries, construction works etc. It may, however, be pointed out that the crux of the problem, of successful implementation depends much upon the ability and efficiency of a central organisation. The effective supply of complimentary resources can be increased by raising the productivity of existing resources which does not require much additional investment. These measures will increase production of capital and consumer goods and thus improve the employment potential of the economy. In agriculture output can be increased by introducing simple improvements in farming methods, selection of seeds, rotation of crops, soil protection, use of machines insecticides etc. In handicrafts and small scale industries, productivity can be stepped up by providing adequate and cheap credit facilities improved arrangements for purchasing, a steady flow of cheap and good raw materials, improved marketing arrangements, merger of small uneconomic units, establishment of co-operatives etc. Further, small-scale industries can be establish by maintaining complimentary relationships with modern industries which will increase their productivity and also reduce the problem of displacement of labour. Lastly in modern large scale industries productivity and output can be raised by effective use of existing plant and equipment of the labour force, etc. ***Also read:**** [Welfare state is socially and economically a national disaster: GN Lawande](https://theprint.in/opinion/indian-liberals-matter/welfare-state-is-socially-and-economically-a-national-disaster-gn-lawande/2841240/)* ### **The role of capitalist enterprises in financing socialism** The fact that there exists in almost every country permanent mass unemployment is confirmed by public opinion as conclusive proof that capitalism is incapable of solving this economic problem and that, therefore, government interference, totalitarian planning and socialism are necessary. Unemployment in capitalist countries is not a proof of the inefficiency of capitalist system, nor is the absence of unemployment in communist, Russia proof of the efficiency of communist system. It is not capitalism which is responsible for the evils of permanent mass unemployment but the policies of the stateman which paralyses its working. What has been done in recent years has been nothing else than a series of attempts to conceal the effects of an economic policy which is rightly blamed for the productivity of labour; which is now needed is a return to a policy which ensures higher productivity of labour. The confidence in capitalistic methods to solve the problem of unemployment will be strengthened if we have a look at the miracle that capitalistic approach has played in countries like Japan, Singapore etc. Should we then, therefore, ask ourselves why and how those and many other developing countries have done so much better than we have in creating mass employment, widely shared prosperity of stability for their people while, after twenty years of planning, draconian controls and Rs. 30,000 crores invested in development, our economy continues to stagnate, unemployment grows and wholesale shortages prevail? All these countries, unlike India, are totally free from economic dogma. All of them, including those with socialist governments, rely mainly on private enterprise for production and distribution and hence for creating employment opportunities. All of them go out of their way to create conditions favourable to private investment, initiative and enterprise. None of them impose on their business and industrial community India’s nightmarish licensing system and paralyzing all pervasive controls. None of them seek to counter the mythical danger of a concentration of economic power in private hands by concentrating it in those of a handful of ministers and bureaucrats. None of them believe, as our government does, that socialism primarily means the nationalisation of trade and industry and a dominant public sector. On the contrary, they consider a dominant private sector entirely compatible with socialism. None of them have adopted the savagely high rate of personal taxation prevailing here which have provided such a powerful deterrent to investment and initiative and hence to the creation of more employment opportunities. Thus we see modern socialist governments going all out to encourage private enterprise to create the wealth from which they can extract the tax resources required to pay for the welfare services of a socialist state. They have understood, what our socialists have failed to do, that capitalist enterprises can play a crucial role in financing socialism, and in making available the fruits of economic development to the people in the very process of development; the cake, so to speak, being distributed while it is being made. *This essay is part of a series from the [Indian Liberals](https://indianliberals.in/) archive, a project of the [Centre for Civil Society](https://ccs.in/). It has been excerpted from the journal ‘The Indian Libertarian’, published in July 1971. The original version can be accessed [here](https://indianliberals.in/the-indian-libertarian/the-indian-libertarian-jan-1971-2.pdf).* --- ## [ThePrint] Violent class-war doctrines of Marx became the sole saviour of labour: MA Venkata Rao URL: https://indianliberals.in/theprint-mirror/collectivism-liberty-limited-state-ma-venkata-rao/ ### Body _Mirrored from [ThePrint](https://theprint.in/opinion/indian-liberals-matter/collectivism-liberty-limited-state-ma-venkata-rao/2866268/) on 2026-05-16. Originally published 2026-02-28. Author retains all rights; the canonical version on ThePrint should be cited. This mirror exists for AI-agent readability — search engines are asked not to index it (canonical SEO weight stays with ThePrint)._ # Violent class-war doctrines of Marx became the sole saviour of labour: MA Venkata Rao It has been the misfortune of humanity that it was the violent, class-war doctrines of Karl Marx that got crystallised as the authentic form of socialism and the sole scientific system and saviour of labour throughout the world. The adherence of Lenin and the Russian revolutionaries and that of the German social democrats under Lassalle contributed to enhance Marxist communism in this dominant position. The Russian Revolution of 1917 and its triumphant career to its present position of World Power challenged the whole free world has added hypnotic power to this collectivist, conspiratorial, violent form of communism. Communism has today become the climate of thought in most countries. Even where a small part of the intelligentsia is free from the prevailing views, they are influenced all the same to a more or less extent, so that the cause of freedom is put on its defence. It is not State aggrandisement that has to explain and justify itself but on the other hand the claims of human liberty and individuality! The capitalist Robert Owen fell in with the French socialists and initiated workers’ communes or settlements in England, Scotland and even the United States in the early decades of the last century. An American thinker called Josiah Warren joined Owen’s socialistic settlement and was inspired to start his own village settlements on a more individualist basis. He developed a* time* and* labour* theory of value in his own way. In Karl Marx’s hands, the theory was distorted to become the surplus theory of value in order to support the thesis that all capital is robbery of the value created by labour. In Warren’s hands, it became the foundation of a new equalitarian individualism which asserted the right of each individual to the proceeds of his labour as measured by the time taken in producing the product of industry. Measurement of labour contributions became a subtle and vexatious calculation and source of trouble among members of settlements. His example inspired a line of thinkers to reflect on the social aspects of individual liberty. Stephen Pearl Andrews developed the outlines of a science of society. Others developed the aspects of cooperation and mutual aid in banking and other forms of economic production and exchange. Others specialised in problems of currency and inflation. Others investigated the effects of State interference in banking, currency and economy generally. These thinkers of the libertarian school in America developed reflection both into the role of property, its meaning, function and limitations and into the role of the State in social affairs and individual life. The general line of thought in regard to both aspects was to discover the degree of waste and frustration and complication involved in anti-social uses of property such as are indulged in by monopolies and cartels by the State outrunning its legitimate field of police and justice and by welfare policies of robbing Ram to pay Kishen. These excesses of the individual and the State lead to ever rising costs of production, to excessive pressure of economic groups on the State to get something for nothing, to rising inflation and confusion of values all round and to the collapse of confidence in currency and economic production generally and to the emergence of unnecessary economic crises with over- or under-production and unemployment. The remedy is to return to individualist economy regulated by provisions against monopolies to safeguard the equal liberty of all. This principle of the equal liberty of all for engaging in free enterprise within the law (to exclude fraud and the annexation of unearned profits) is sufficient, say the libertarians, to justify the imposition of checks on those who take undue advantage of the freedom granted. If these principles are intelligently followed, it is urged, the State and society will be freed from this excessive burdens from which they are suffering at present under the influence of collectivist ideas. They will be free from much of the present load of public debt. The State will be compelled by individualist citizens to live within its means and not to create artificial money by issue of loans and not to burden the present generation by ever-rising loads of interest on public debt. Though the principal is supposed to be paid by future generations, as a matter of fact it is the present generation that has to pay heavy interest. These interest payments to one class of citizens namely bond-holders will distort the economy by conferring on them more purchasing power than on the rest of the community. This distorts the economy in favour of unearned incomes annexing too much of the capital resources of the community towards the satisfaction of a few, leaving the demands of the vast majority starved and unfulfilled or under-fulfilled. The central stream of thought in advanced democratic countries like the U.S.A. is that of liberal democracy formulated in the early and middle periods of the nineteenth century. Today technological industry, the growth of population and the advance of communication media-radio, newspapers, wireless, aeroplane for passenger and goods traffic etc. have all conspired to confer more and more powers on the State to regulate the myriads of new inter-relations among citizens. Organisation has tended to become ever more complex and interwoven. Hence the feeling of inevitability in regard to the growing tendency towards collectivism and the expansion of State power. Collectivism has become the* illusion of the epoch *today in which the rights and duties of the individual citizen as a self-determining and self-realising person are lost to view. Individuals and small groups feel lost in the vast agglomerations of large nation-States. Even small States feel a prey to massive influences and pressures impinging into their life from outside. The wheel has come full circle. The individualist philosophy of John Stuart Mill and his followers which guided liberal democracy is today eclipsed by the dominant collectivism of Karl Marx, particularly in respect of economy. Adam Smith and Mill are both put into the shade. They have become “Gods that failed.” But today doubts and misgivings are being felt in many quarters that we have embraced a remedy worse than the disease. After all, the only known reality is human life is the individual centre of experience, of thought, feeling, action and fellowship-individual men and women. Sociologists are formulating theories of the right relationship between primary and secondary groups. The former like the home, neighbourhood and religious or educational fellowship are primary in moulding human life. They deal with individuals as full-rounded persons and not as fragments-hands or members or customers or wage earners or employers or officers or rank and file anonymous common men. Secondary associations like occupations, amusements or casual groups as in hotels and railway carriages are necessary but if they crowd out much of the scene and activity of life, man is atomised and impoverished. Neuroses come to prevail. Suicides, mental aberrations, juvenile delinquents, divorce proceedings, prostitution, gambling, alcoholism, corruption in economic and political life-will all make themselves felt in disturbing degrees. Libertarians call for a greater simplification of institutions, a reform in the use of property and a return to the limited role of the State in social life so that the submerged individual may be released for a new career of purposeful, healthy activity in which science and the other achievements of the modern spirit may be used more wholesomely to help men and women to fulfil themselves in pursuits within their reach and power of assimilation. The libertarians call for a new relationship to land, so that unearned income may not accumulate in hands that do not contribute to production. Since land is limited unlike other forms of industrial or commercial property, it needs to be kept in the hands of people who actually use it for production, eliminating functionless or parasitic holders. The libertarians are also interested in education. They are exploring the avenues whereby the individual may be led through self-directed thought and investigation to discover the right relations between individual and society. The new aim is to strengthen dispositions of cooperation and individual self-reliance *during the process of learning*. It is also necessary to destroy the roots of class antagonism by imparting the joys and skills of using tools so that the ancient class distinction of workers and lords may disappear in the minds of men and women. Work and culture should be integrated. Freedom in economic and political life has to be supported by a new psychology of cooperative and creative living, fostered in creative education inspired by a vision of human unity and human progress in free and joyous fellowship. *This essay is part of a series from the [Indian Liberals](https://indianliberals.in) archive, a project of the [Centre for Civil Society](https://ccs.in). This essay is excerpted from the journal “The Indian Libertarian”, published on 1 October 1958. The original version can be accessed [here](https://indianliberals.in/the-indian-libertarian/the-indian-libertarian-oct1-1958.pdf).* --- ## [ThePrint] Communism is based on self-deluding assumptions, it can’t be realised in practice: GN Lawande URL: https://indianliberals.in/theprint-mirror/communism-assumptions-gn-lawande/ ### Body _Mirrored from [ThePrint](https://theprint.in/opinion/indian-liberals-matter/communism-assumptions-gn-lawande/2878812/) on 2026-05-16. Originally published 2026-03-14. Author retains all rights; the canonical version on ThePrint should be cited. This mirror exists for AI-agent readability — search engines are asked not to index it (canonical SEO weight stays with ThePrint)._ # Communism is based on self-deluding assumptions, it can’t be realised in practice: GN Lawande In view of the importance of Communism at the present time, some acquaintance with the principles which lead men become communists is desirable. It must be said at the outset, that communism is a reaction to capitalism; it is believed by communists that capitalism is the cause of all the present ills that the people face and the only remedy lies in the adoption of communism.  But if we examine its philosophy we find that it is based on self deluding assumptions which can never be realised in actual practice. The most important of these assumptions is the public ownership of the means of production. It is said that under capitalism wealth is concentrated in the hands of a few individuals and the large number of people is exploited by these privileged few.  But in any regime providing free opportunity, a small percentage will rise to the top. This fact will cause no injury to anyone if the way is kept open for all persons to strive toward the top, and for each to go as far as he can. It is the law of progress that a few persons must go to the top in order to show the possibilities and opportunities, so that others might emulate and follow them.  If all the people were to try to march at the same time, then who will guide them? There is every possibility that like goats they may fall in ditches and there will be none to lift them up from their positions. “Plant a vine, watch it grow, and you will find how human society is carried upward by the individuals who first go upwards.” ### **Public ownership** It is assumed by the Communists that under Communism alone the proletariat will own the capital and other economic processes of a country; but it appears that communists have either not properly understood the meaning of the term public ownership or they are practising a self-deception or fraud on the minds of the people.  “The ownership of a thing is the right of one or more persons to possess and use it to the exclusion of others”. If this is so, then the terms “public” and “ownership” are contradictory to each other. The Communists have failed to recognise this distinction. If they had realised it, then their argument does not stand; and if it can be shown that the argument is invalid then the whole ideology of communists falls to the ground. ### **No control by the people** In public ownership only a few individuals at any given time have control of public property and the people as a whole cannot have the control and management of any item of property: they cannot have the possession of it as they can have under capitalism. Under capitalism an individual is free to own and dispose of his property as he likes.  Under communism, the capital assets of a nation are in the absolute control of a handful of individuals over whom the people have no control. This same small group controls all activities of the people and their main object is to maintain their own position and their own power at any cost. At this they are cunning, cruel and relentless.  In spite of their power they are always under fear. They too do not enjoy complete freedom. It is said by one writer “there is no freedom on earth or in any star for those who deny freedom to others.” So under communism people have no control of the nation’s property and they lose what they have. They have to accept without any visible complaint what they receive from these tyrant-capitalists. ***Also read: **[Indian welfarists destroyed right to property by guaranteeing rights to life, liberty](https://theprint.in/opinion/indian-liberals-matter/indian-welfarists-right-property-life-liberty/2872286/)* ### **Utopian dream** It is also assumed that the handful of planners in control of a nation’s economic progress can plan and handle those processes to better advantage for the people than the people can, if free to use their own resources, their own genius and to direct their own energies to the supplying of their own and others needs and wants.  This is nothing but an Utopian dream. Even Nature does not concentrate her resources into the possession of any few entities. “Billions of stars and millions of galaxies are in her heavens; on earth, the variety of her creation, in relation to any person’s knowledge is infinite; among human beings aptitudes and capacities are so widely distributed that no one can foretell where talent, extraordinary ability or genius can crop out. In this fact lies the second most cogent practical justification for freedom (The first lies simply in the spirit of the individual man, which no other person has an authority to dominate in the inelienable rights that derive from that fact).” Men must be free if society is to receive what nature intends that it shall have, and what she is prepared to give. No handful of dictatorial planners can even conceive more than the tiniest fraction of the varied contributions that people if free, could and would make to cultural and economic advancement and to varied utilitarian values in their society. This would be true even if the dictator-planners were persons of extraordinary wisdom, intellectual fertility, character and understanding-Only little men profess to know enough to run everybody’s business. It is that little man at times definitely psychopathic who having acquired in some way (may we say foul?) a ruling authority becomes the arbitrary planner for a nation’s economic activities. It is that little man, sometimes a madman who in his fear, surrounds himself with a labyrinthine army of secret police, closes all the channels of free information, discussion and education and dissipates much of the energies of his subjects to bulwark himself and his co-conspirators with Cyclopean armament not needed for any honest or constructive purpose.  “It is that little man always behind the promulgation of an ideology that makes the individual only a pawn and helot of a mystical god called the “state,” a promise derived from either a profound ignorance or a licentious lust for power.”  In capitalism we know that all these functions are performed by individual persons in the most economical and efficient manner each “a self aware, self disciplined spirit that can best serve society through the guidance of his own inspiration, ideals, intuition, intelligence, self-knowledge, judgment, will and ambition.”  So competitive and open capitalism is keyed to the facts and as Goethe said “there is no trifling with nature-it defies incompetency, but reveals its secret to the competent, truthful and the pure.” ### **Classless society** Communism promises to produce a classless society but this is nothing but a dream. When Nature has made human beings as different as they can be and still have enough in common to be identifiable as members of the same species, it is impossible for the Communists to achieve this false promise in practice.  Even in Russia class distinctions are still existing, in spite of the fact that she had enjoyed the fruits of Communist for the last 40 years. In open and competitive capitalism no class exists except the natural groupings of people and none exists with a closed door as we see in Communists countries. So the idea of classless society is nothing but a fraud of communist propaganda. ***Also read: **[Violent class-war doctrines of Marx became the sole saviour of labour: MA Venkata Rao](https://theprint.in/opinion/indian-liberals-matter/collectivism-liberty-limited-state-ma-venkata-rao/2866268/)* ### **Dictatorship by proletariat** The other fraud of Communism is the promise to establish a dictatorship of the proletariat. This is a bait for the ignorant people; it is not fulfilled and will never be fulfilled. It allows the tyrant capitalists to gain the control of a nation’s capital assets, to use mob psychology and ignorance and lastly cruelty of the mob.  The term ‘dictatorship of the proletariat’ is a self-contradiction. If there are more than one dictator, either the dictators must agree or one of them must disappear. This same phenomenon we find at present in Russia. How can the people become dictators over themselves?  If they were to be the dictators over themselves, how could they learn what dictates they might agree on except by a full, free and secret ballot? And if they disagreed how could they recouncile their disagreement except by the principle of majority rule? In case they would pursue these methods, what they actually would have is democracy and not dictatorship. There is no possibility of adopting these methods by Communists. ### **Low wages in Communism** In communism workers are promised that they would receive full fruits of their labour and that they would not be exploited by the capitalists. In every economic system workers have to be paid wages to live. The wage is much greater in capitalism than in communism.  The proof of this statement can be verified by comparing the living standards and per capita income of the people in Russia and America. If the workers are to receive a share of profits above their wages, then profits must be made at first, but under communist profits are taboo; they are the evils that the communists want to end.  In capitalism profits are earned by the capitalists as a compensation for the use of the funds invested by them and the services rendered by them for the satisfaction of the needs of their own as well as of the others. The purpose and methods of communism are to deprive everyone of profits, and make everyone completely dependent upon the state or rather upon the few who rule and who call themselves the ‘State.’ *This essay is part of a series from the [Indian Liberals](https://indianliberals.in/) archive, a project of the [Centre for Civil Society](https://ccs.in/). It has been excerpted from the journal “The Indian Libertarian”, published on 1 August 1963. The original version can be accessed [here](https://indianliberals.in/the-indian-libertarian/the-indian-libertarian-aug1-1963.pdf).* --- ## [ThePrint] Demonetisation is a wild hit at the bull’s eye. It will not hurt the guilty: BP Adarkar URL: https://indianliberals.in/theprint-mirror/demonetisation-black-money-bp-adarkar/ ### Body _Mirrored from [ThePrint](https://theprint.in/opinion/indian-liberals-matter/demonetisation-black-money-bp-adarkar/2813221/) on 2026-05-16. Originally published 2025-12-27. Author retains all rights; the canonical version on ThePrint should be cited. This mirror exists for AI-agent readability — search engines are asked not to index it (canonical SEO weight stays with ThePrint)._ # Demonetisation is a wild hit at the bull’s eye. It will not hurt the guilty: BP Adarkar How to deal with black money? In the hot pursuit of black-money holders, some people seem to have lost their sense of direction and have advocated the demonetisation of 100-rupee notes. However, this remedy will be worse than the disease itself. First of all the real culprits have got away; they have converted their 100-rupee notes into notes of smaller denomination, viz., Rs 20, Rs 10, Rs 5. Also, as stated earlier, they have bought land and housing property, gold and jewellery, art treasures etc., and also dispersed their holdings in small bank accounts in the names of members of their families, apart from paying for various goods, services, rents etc., in cash. By all means, track down black money, if you can, to its source, although it does become a wild-goose chase.  But, demonetisation of 100-rupee notes is a wild hit at the bull’s eye: it will not hurt the guilty ones but a lot of innocent people. Not all 100-rupee notes are black money. Many are held in small numbers by middle-class people. In fact, statistically speaking, although the people of these classes have only a few 100-rupee notes each, the number of the people multiplied by the average holding of each will probably add up to a figure far bigger than the holdings of the richer holders, who are comparatively fewer and many of whom have already got rid of them.  Actually, demonetisation is no terror to those politicians, officials and big business men, who have had enough notice to take the necessary precautions. It is the dumb goats which will be caught: the black sheep have jumped the fence long ago! Moreover, the other side of the medal of black money is corruption, which seems to prevail at all levels, from top to bottom. In the event of demonetisation, the Devil will take care of his own, and many may escape the rigours of demonetisation. Administratively, it will involve enormous and fruitless work for the Reserve Bank of India of investigating claims of hundreds of thousands of people all over the country, for which it may have to open thousands of temporary offices in many cities, towns and even villages. Also, inevitably, there can be much corruption in the process. Apart from this, the effects of demonetisation on the economic system as a whole may prove quite disastrous. Black money accumulation is unethical and needs to be strongly condemned. However, currently whether we like it or not, black money is used for financing many (even normal) business transactions partly or wholly. If it is suddenly withdrawn, much of the business**—**even regular business—will come to a grinding halt. Also, demonetisation could shake the public confidence in the nation’s currency, with serious repercussions on its international value as well. This confidence factor becomes particularly important in view of the fact that nearly half of the rupee currency is in terms of 100-rupee notes. Does black money cause inflation? This is a major misconception which seems to have coloured the thinking of those who have been advocating demonetisation. Far from causing inflation, black money is actually an anti-inflationary factor, as its velocity of circulation is much lower than that of white money. Where it is locked up in safes or in safe deposit lockers, its velocity of circulation is actually zero; where it is used for illicit transactions, it can be somewhat higher. In a sense, it has been a blessing. So far as inflation is concerned, a large part of the currency expansion brought about by deficit financing has not circulated freely but gone underground! If all black money became white overnight, prices would indeed rocket sky-high, and indeed that would be some Inflation! ### **The real solution for black money****** The real solution for the evil of black money lies not in lopping off its branches (by demonetisation etc.) but in attacking it at its roots. In other words, we must identify the causes and then try to remove them or at least to mitigate them. First of all, the Government should reduce the level of taxation all round. In spite of the fact that the Wanchoo Committee made this as a major recommendation, the Government has set it aside in the mistaken belief that by reducing the tax rates, less revenue would be collected. This, however, is a fallacy and an optical illusion. The experience of France, which I quoted earlier, gives the lie directly to it. Not only the income tax rates should be reduced, but the lower limit of Rs. 5,000 for exemption should be raised to Rs 7,500 or even Rs 10 000, in view of the fall in the value of the rupee and the fact that at this level the poor taxpayer has less incentive to avoid taxation, As regards the Wealth Tax, it should be abolished altogether, as it involves double taxation and is a potent cause of black money and corruption. The third suggestion I would like to make is that the entire system of licensing and controls, which has resulted in the creation of the “Permit Raj”, should be drastically overhauled and gradually done away with. The more the controls, the greater is the black money and corruption potential. Even the foreign exchange control should be abolished. In the first place, this control was never very essential, as India had been receiving large chunks of foreign exchange under the various Aid programmes and Loans, which were quite adequate for the five-year plans. Secondly, because of the exchange control, large quantities of foreign exchange have been held abroad by Indians in number accounts etc., which would have normally been repatriated to India, if the owners of the funds had a reasonable guarantee that they would get their exchange requirements from the Government whenever necessary. This would have provided for a great relief in our foreign exchange market and could have even strengthened our currency in the international market. Not only this, but the Government would have had at its disposal large amounts of foreign exchange also.  Whether the Rupee should be a free currency and be based upon floating rates is a separate question, which cannot be considered here. It was unfortunate that the Government in its hurry to grab every possible pound and dollar in its anxiety and obsession for Planning did not consider the possible effects of exchange control on the Rupee and indirectly on the functioning of the planned economy itself. Similarly, instead of import and export controls, which were no doubt partially responsible for the exchange control, the Government could have (a) raised the import duties on various items to a sufficiently high level, and (b) in suitable cases, put an embargo on imports of certain types. As it is, the system of controls has encouraged smuggling on a vast scale, and in the process, the Government has lost much of its foreign exchange as well! The fourth measure I would suggest is that the Government should issue a notification asking holders of black money to hand it over and accept 90% of its value in white money from Government, up to a fixed date, say 1st April 1974: after that, any further surrender of black money should be allowed against 75% of its value, up to say, 1st July 1974. And, after that date, the Government should confiscate any undeclared black money, wherever it is found, as also property etc. purchased with black money. Such rigorous measures alone will be necessary to eradicate the evil of black money, but they will be of no use, unless the Government’s administrative machinery is strict and incorruptible, which means a reform of the corrupt, which must start at the top everywhere and end up at lower levels. In this connection. I may refer to the successful measures recently adopted along these lines by President Morcos in the Philippines. The fifth group of measures in this connection will be those relating to the Government’s plan and non-plan expenditures. There is no doubt that a large part of the money spent by the Government both at the Centre and in the States through the Five-Year Plans and through the normal non-plan budgets, has not only inflated the money supply beyond the limits of necessity and thus caused a steep rise in prices, but also enabled unscrupulous politicians, officials and even ministers to feather their own nests in the process. On the whole, the Government should now go slow on the Five-Year Plans. For one thing, the Plans have not been at all successful in achieving their target rates of economic growth. Many developing countries which had no five-year plans of any kind have been able to achieve much higher growth rates than India with her plans. For another thing, the system of planning adopted by the Government has tied up into knots all industrial and commercial activity throughout the country.  Therefore, I am inclined to the view that there will be no great calamity if we now gradually wind up the entire system of Planning and replace it with a system in which the Government concentrates on its main nation-building functions, viz., the provision of an infra-structure for a free national development, consisting of increased transport facilities, technical education, population control, aerial navigation, tele-communications, various public utilities etc. I feel that the country has by now after 20 years of planning somehow reached the “take-off stage” of industrial development, and if private enterprise, as well as the public sector industries, are given complete freedom to grow and function, economic development will not only take care of itself but achieve a rate of growth far better than the Government planners have been able to achieve. *This essay is part of a series from the [Indian Liberals](https://indianliberals.in) archive, a project of the [Centre for Civil Society](https://ccs.in). This essay is excerpted from a journal published by the Forum of Free Enterprise, based on a speech delivered by Prof BP Adarkar in September 1973. The original version can be accessed [here](https://indianliberals.in/forum-of-free-enterprise/rising-prices-black-money-and-demonetisation-prof-b-p-adarkar-october-14-1973.pdf).* --- ## [ThePrint] Nothing suits dictatorship more than a subservient judiciary: Justice HR Khanna URL: https://indianliberals.in/theprint-mirror/dictatorship-subservient-judiciary-justice-hr-khanna/ ### Body _Mirrored from [ThePrint](https://theprint.in/opinion/indian-liberals-matter/dictatorship-subservient-judiciary-justice-hr-khanna/2775553/) on 2026-05-16. Originally published 2025-11-02. Author retains all rights; the canonical version on ThePrint should be cited. This mirror exists for AI-agent readability — search engines are asked not to index it (canonical SEO weight stays with ThePrint)._ # Nothing suits dictatorship more than a subservient judiciary: Justice HR Khanna Free enterprise, in the words of A. D. Shroff, “was born with man and shall survive as long as man survives”. It is an offspring of the quest for freedom, a live rendering of the longing in human heart to shape one’s affairs unhindered by official cramps The freedom to disseminate ideas, opinions and concepts, the freedom to treat with complete candour the various aspects of human life and activity, and the freedom to voice one’s aspirations and feelings are vital to progress in a free society. Freedom of enterprise is one step ahead of the freedom to disseminate ideas, still the two have a close nexus and are linked with each other.  Nothing brings law into greater disrepute and breeds [a] stronger feeling of defiance than an attempt on its part to make men see opinions which they hold for true, regarded as crime. Likewise nothing creates greater frustration and dismay than the mandarin obstruction to any venture marked by spirit of initiative and enterprise. Freedom at the same time is not and cannot afford to be allergic to all restraint. It indeed needs some restraint for its own survival. As such there is no conflict between restraint per se and freedom. The real conflict is between the restraint that cramps the personal life and the spiritual order and the restraint that is aimed at securing the external and material conditions of their free and unimpeded development.  The essence of freedom lies in the unhampered development of the personality of each individual so that the efflorescence of his faculties might lead to satisfactory harmonisation of impulses. Restraint degenerates into an attack upon freedom where it stifles such development. Any restraint which frustrates life and spiritual enrichment must be looked upon as an evil. The world has a certain stock of knowledge, which has been garnered through the toil of succeeding generations of men. Each generation as the successor of the earlier generations has a right to put that knowledge to use. It is not wise under the garb or because of any notion of paternal supervision to deny opportunities to individual members of the society from pushing the bounds of that knowledge further and harnessing it to proper use. All that has to be ensured is that in doing so the individual does not impinge upon the rights of others or commit breach of any provision for the benefit of society as a whole. Any talk of freedom inevitably takes our thoughts to the courts and judges, for through the course of years and in the corridor of time they have acquired the image of being sentinels of human freedom and guardians of basic rights. Whenever, therefore, there is a mission of freedom and infringement of rights we turn to the courts and judges to provide redress. Indeed it is the capacity of the judges and the courts to provide redress in such cases, which furnishes the real index of the prevalence of the rule of law as against the rule of men.  But courts and judges have not always satisfied that test. Past history of mankind and contemporary world are not lacking in instances when law has been used as an instrument to abridge or extinguish freedom instead of expanding its frontiers and the machinery of courts has been used to exterminate the political opponents and silence the voice of dissent.  While ideals of justice and the concept of over-riding rule of law have at times helped to limit arbitrary and unjust rule, it is also unfortunately true, as observed by a discerning writer, that great and systematic iniquity has been done by men who claimed to be acting under law and whose actions were facilitated by institutions like legislatures and courts that we would generally characterise as legal. Nothing suits dictatorship more than a subservient judiciary willing to carry out its behest. The totalitarian states indeed are never tired of claiming a legal basis for their action and are too eager to make use of conventional legal institutions to further their ends. Justice then has to bow out because the court in such a situation becomes an instrument of power.  Judges are soldiers putting down rebellion and a so-called trial is nothing more than a punitive expedition or ceremonial execution — its victims being Joan of Arc, a Bruno or a Galileo. It is for this reason that all lovers of freedom have also espoused the cause of a strong and independent judiciary, of having persons on the Judge’s seat who would not falter or swerve from the ideal of administering justice without fear or favour, whatever may be the pressure and however great the temptation. Weak minds and timid characters, they know, ill go together with the office of a judge. The title, “Reform of the Judiciary” should not lead us to suppose that there is something basically wrong with the judiciary and it calls for radical and wholesale reform. By and large the judiciary, especially the judiciary in India, has maintained high standards. Speaking as I am to an audience in the city of Bombay, I have no doubt that most of you would agree having had experience during post independence years on Bombay High Court of a Chief Justice who though now frail in health is strong in will and epitomises within himself the great and noble traditions of judiciary. At the same time it would not be realistic to shut our eyes to some of the infirmities which have crept into the judiciary and made themselves manifest. It is apposite that the question of reform not only of the judicial system but of the judiciary is engaging serious attention. We are today passing through an age of social questioning. There is all round a spirit of iconoclasm. The gods we worshipped till yesterday have been slowly and gradually dethroned from the minds of the people. No institution can take for granted the reverence of the community. The community demands from every institution the justification of its existence, the proof of its utility. There was, at one time, an aura about the judiciary. It created a sense of there being something mystique about it in the minds of the people. Under the cover of that, we could hide some of the short-comings and drawbacks of the institution.  To some extent, we in the world of law have thus thrived on the ignorance of others. Such a time is now past and no more. The legal institutions and the courts have to earn reverence through the test of truth. They cannot brush under the carpet criticism, if true, however unpalatable it may be. It may become essential to do a bit of heart-searching and indulge in a bit of introspection. If, in the process, we discover drawbacks and infirmities, enlightened self-interest demands that we should set the same right.  *This essay is part of a series from the [Indian Liberals](https://indianliberals.in) archive, a project of the [Centre for Civil Society](https://ccs.in). This essay is excerpted from a lecture delivered by Justice HR Khanna, former Judge of the Supreme Court of India, as part of the AD Shroff Memorial Lecture under the auspices of the Forum of Free Enterprise, on 13 October 1980. The original version can be accessed [here](https://indianliberals.in/forum-of-free-enterprise/the-reform-of-the-judiciary-justice-h-r-khanna-october-15-1980.pdf).* --- ## [ThePrint] Congress was committed to alcohol ban law without being practical: MA Venkata Rao URL: https://indianliberals.in/theprint-mirror/congress-alcohol-ban-ma-venkata-rao/ ### Body _Mirrored from [ThePrint](https://theprint.in/opinion/indian-liberals-matter/congress-alcohol-ban-ma-venkata-rao/2902018/) on 2026-05-16. Originally published 2026-04-11. Author retains all rights; the canonical version on ThePrint should be cited. This mirror exists for AI-agent readability — search engines are asked not to index it (canonical SEO weight stays with ThePrint)._ # Congress was committed to alcohol ban law without being practical: MA Venkata Rao The law prohibiting the consumption of intoxicating drinks in any form or quantity except for medicinal and research purposes was passed as part of the reformist new Gandhian life of free India after the advent of national independence in August 1947. It was part of the Gandhian ideology like khadi and nonviolence to which the Congress was committed without much thought about the practical aspects of carrying out the spirit of the reform through legislation. Congress leaders had before them the example of the United States of America that had to abolish the Prohibition Law after years of futile attempts to enforce it through special police. It was passed in a moment of exalted idealism during the war of 1914-18 at the instance of temperance propagandists, cleric and lay, and reformers, educational and penal. They had collected impressive statistics of the amount of man-hours wasted by the ill-effects wrought by drink and of the demoralisation it worked in the domestic life of all classes from labour to the intellectual elite. But actual experience of the enforcement of the law showed that the bulk of the people did not agree that the right of the individual citizen to drink in moderation for pleasure and social enjoyment should be abrogated by the compulsive force of the state. It was felt that state action in this sphere of life was an intolerable infringement of personal liberty and should not be allowed in a free country. Since the bulk of citizens did not regard drinking as a crime, they had no respect for the prohibition laws and did not cooperate with the police and vigilance associations to enforce them. There was widespread defiance of the unwanted laws. Illicit manufacture and sale of liquor became widespread and made a mockery of the laws. Law was brought into contempt and legal offences increased. We have been having similar experiences in India since 1947. People are beginning to doubt the wisdom of legislation of this kind to make men moral by law and governmental force. A number of auxiliary repercussions unfavourable to decency in social life and purity in administration have made themselves felt in India as in America before the cancellation of prohibition. There has been much illicit distillation of country liquor throughout the countryside (and even in towns and cities) by classes and groups thrown out of employment by the abolition of legitimate toddy tapping and the manufacture and sale of liquor under licence. It is said that the only cottage industry that is flourishing in the countryside is that of illicit distillation and sale of toddy! The big traders (some of them) have taken to smuggling foreign liquor and secret sale in the black market. It has become a lucrative trade for them. Habitual addicts succeed in obtaining permits on grounds of health for limited quantities but they manage to exceed the limitation by collusion with the licensed traders. Foreigners and army men are permitted to have drinks under permit which is obtainable liberally by them. Before the prohibition laws came into force, the women of the working class were largely free from the drinking habit. They censured their menfolk for indulging in the costly habit which cut into household finance. The higher castes were largely free from the habit on the whole, though It was only the Jains and Brahmans who observed the rule against drink strictly, barring exceptions. The other high castes Indulged in drink in moderation and mostly on festive occasions. This example had a great social effect in keeping the drink evil within limits. Alcoholism in India never rose to the dangerous limits that it did in Europe and America, where it has become a serious economic and social evil. The quantity of wine consumed by the average farmer in France and Italy is enormous and has had deleterious effects on the efficiency of the population. ***Also read: **[Farmers’ agitations started in developed states like Coimbatore & Ludhiana: Sharad Joshi](https://theprint.in/opinion/indian-liberals-matter/farmers-agitations-coimbatore-ludhiana-sharad-joshi/2890665/)* But the question is whether this social and moral evil, (which drinking becomes when It passes wholesome limits) is a suitable subject for governmental legislation. Government has to act by force and by automatism and uniformity which can only be worked satisfactorily by a paid whole-time staff. The administrative machine is not likely to have any genuine interest in temperance or any of the moral fads that may be taken up by governments at the pressure of propagandists. Pacifists, for example, urge unilateral disarmament. If this is applied to the police and the police force reduced to any extent, it is not hard to anticipate the devastating effects it will have on law and order and security of life and property. Prohibition has been introduced without widespread discussion on the different aspects of the question out of a deference to the opinions or feelings of Mahatma Gandhi. Law has a chance of success only where it can secure the willing consent and support of the bulk of the citizen body. A minority of recalcitrants can then be dealt with by force successfully. The sphere of law is the sphere of force. The sphere of moral action on the other hand is the realm of freedom and self-determination.  Religion and morality derive their quality and essence from a free motivation and response of the inmost self of man to the mysterious element in the universe and to the sense of values operating in motives and Intentions issuing in plans of life and fulfilment. Force will only produce outer conformity, if it is efficiently applied with punishment that cannot be easily escaped. And enforced religion and morality are no religion and morality at all. “Compulsory religion is better than no religion,” said a religious leader. “I fail to see the difference”, answered a lay citizen. The first thing to consider in this controversy is that drinking an intoxicating stuff is not a crime by itself. It is true that drinking to Intoxication leads to loss of self-control temporarily until the effects disappear after sleep and rest in a few hours. But the damage, if any, is confined to the individual, if he does not go in for drunken and disorderly conduct in public, producing disgust in and inconvenience to others. Generally speaking, law should come into operation only where an individual impinges on others disadvantageously through the unwise exercise of his freedom. It is truly said that a man’s freedom to swing his stick or umbrella stops at the tip of the nose of another in his vicinity! In extreme cases, we may admit that an exercise of freedom that damages only the agent is also contrary to civilised law. The well-known instance is suicide. Even in suicide, the agent may try to evade his moral obligations to his family or dependents. It is a question whether the law against suicide should apply in cases where the ill effects concern only the individual. In such cases, it may be that the law against attempted suicide needs reconsideration. From this point of view, euthanasia or the attempt to died by suicide by slow poison without painful effects is defended as permissible by some social thinkers. We know that in India Jain saints are respected for the act of courting death by fasting when undertaken at the end of life to quit life voluntarily instead of being subject to the vicissitudes of the bodily condition. A parallel case where similar problems arise is vice-sexual or other. Rape definately is a crime because it violates the freedom and dignity of the woman. But if the woman consents and she is adult and free from contractual obligations by marriage to a different person, namely her legally wedded husband, the sexual relation between that man and that woman would concern only themselves alone. Law will have no ground to enter and interfere with them. But if a child appears, they will assume legally enforceable obligations to the child in respect of maintenance and upbringing. Thus if an individual drinks in moderation in a manner that does not affect his normal conduct, law should have no ground to interfere. Many people can take a certain amount of drink without any visible effects on their efficiency in work or decency of behaviour in society. Law has no business to punish such persons for the mere act of drinking. This is where the prohibition law errs against freedom and personality. It empowers the police to book any man or woman for merely drinking and containing liquor, if only the smell thereof is detectable! *This essay is part of a series from the [Indian Liberals archive](https://indianliberals.in/), a project of the [Centre for Civil Society](https://ccs.in/). This essay is excerpted from the journal “The Indian Libertarian”, published on 15 December 1962. The original version can be accessed on this [link](https://indianliberals.in/the-indian-libertarian/the-indian-libertarian-dec15-1962.pdf).* --- ## [ThePrint] A shame-faced modesty pervades 1991 reforms. This is strange and inappropriate: Ashok Desai URL: https://indianliberals.in/theprint-mirror/economic-controls-in-india-liberalisation-history/ ### Body _Mirrored from [ThePrint](https://theprint.in/opinion/indian-liberals-matter/economic-controls-in-india-liberalisation-history/2804705/) on 2026-05-16. Originally published 2025-12-13. Author retains all rights; the canonical version on ThePrint should be cited. This mirror exists for AI-agent readability — search engines are asked not to index it (canonical SEO weight stays with ThePrint)._ # A shame-faced modesty pervades 1991 reforms. This is strange and inappropriate: Ashok Desai As part of the British empire, India took part in the second World War on the side of the Allies; it thereby also became a part of the economic machine created by the Allies to fight the war. This economic machine embodied stringent controls. For instance, shortage of shipping and the risk of its loss on high seas led to the rationing of shipping space and hence of imports; to allocate the scarce imports, a Chief Controller of Imports and Exports was set up. The high war expenditure generated inflation and shortages; to protect urban population from food shortages, a system of food grain procurement and distribution was set up. Imported and local raw materials had to be rationed out amongst industrial firms; to govern this allocation, productive capacities of firms were monitored and controlled. In this way, a comprehensive framework of economic controls was built up during the war. After the war, inflation and shortages continued, and they justified the continuance of wartime controls. So when India became independent in 1947, it had a very comprehensive system of controls. Independence was followed by a conflict in power sharing between the industrialised provinces on the eastern, western and southern coasts and the northern agricultural hinterlands: in a democratic framework, the under-industrialised north won. Hence, the government retained the controls as a means of keeping industry on a leash and bending it to the will of the north. Socialism was a mere slogan, in India as elsewhere: it was a means of regulating conflicts between regions and between classes. Over the ensuing forty years, the system of controls was used for favouring the development of the north to the retardation of the more advanced regions, and concurrently to favour the growing educated middle class against owners of industry. The major instruments of control employed were: **Industrial licensing: **This was used at various times for favouring state enterprises, small enterprises and co-operatives (which were mostly a form of state enterprises) against large and foreign enterprises. *Control of capital flows*: Through central ownership of the major banks as well as long-term investment Institutions, the government controlled the flow of investible funds to industry. This control further reinforced industrial licensing. *Import controls*: These were primarily used for favouring import substitution. But within import-substituting enterprises, the same priorities were followed as in industrial licensing. In particular, state enterprises were favoured against private enterprises. *Agricultural procurement and distribution*: These controls were initially employed for ensuring secure and cheap supplies of foodgrains for the urban population. But as farmers acquired political power, the aim of agricultural controls also changed to raising farm incomes through high prices. *Discriminatory taxation*: This further reinforced the preferences embodies in the other controls. But as the taxes rose, pressure grew from various lobbies, and exemptions and rebates were introduced which made the tax systems, both at the centre and in the states, very complex. **Liberalisation episodes without liberal philosophy** This comprehensively controlled system was highly inefficient and ran into a crisis every few years. But when this happened, some of the controls were relaxed to introduce competition and to curb inefficiency. As the economy grew, the old-style, labour-intensive controls also became impractical; so they were modified to accommodate the growth in the size and complexity of the system. But as soon as a crisis was over, the system tended to return to its old mode. This was because powerful interests grew up in politics, bureaucracy and industry which benefited from the controls. The bouts of relaxation of controls were termed liberalisation episodes by *Bhagwati and Srinivasan,* and so they were in a sense. In every episode certain controls – mainly industrial licensing and import licensing – were relaxed. But liberalisation had a practical aim, namely to reduce systemic inefficiency to sustainable levels. There was economic liberalisation, but there was no liberal philosophy behind it. **Liberal philosophy** Liberal philosophy has two roots. There is the liberalism of Western Europe – the liberalism of the Whigs and the Liberals in Britain and the Liberal Party in Germany: comparable parties were to be found in most western Europe countries. This liberalism was an outgrowth of monarchic systems and developed in conflict with monarchic autocracy. It opposed absolutism and put forward individual freedom protected by rule of law. As monarchic systems gave way to managed democracies, kings were replaced by conservative parties – parties of property owners which tried to use the state for the preservation of inherited hierarchical systems. This change in the character of the ruling elite led to a change in the orientation of liberals. Besides individual freedom and the rule of law, Liberals also came to espouse a caring state which assumed growing social responsibilities – responsibilities towards the poor but later towards entire populations. These social responsibilities came to be taken even more seriously after the second World War. The draconian systems of taxation that were built up during the war yielded large surpluses once the need for wartime expenditures was over. At the same time, the war left a great deal of devastation in some countries. Hence the surpluses were used in industrial countries to fund social services. In this way, very elaborate systems of social security were built up. In a sense, social liberalism triumphed over personal liberalism in the post-war era. **Social liberalism** India belongs to the post-war era and was more influenced by social liberalism. The highly attractive ideals of social insurance, health insurance, free education etc. were readily received. But the means to finance those laudable social services were very limited. The result was that the services always ran in the midst of unmanageable shortages, their reach remained limited and fitful. The failure of social liberalism in India is a failure to match the means to the ends. **Idea of personal liberty** On the other hand, libertarianism has always been a weakly growth in India. The basis of libertarianism is the idea of human freedom, and the related idea of tolerance for the freedom of others. Indians regard themselves as highly tolerant. But tolerance is relative. Because India is such a large and diverse country, the diversity gives Indians the feeling that they tolerate it. But the same diversity leads them to put curbs on individual freedom designed to keep down social tensions. Thus, there have been occasions when the Indian government has banned publications. Yet, bans are not frequently imposed; and the grounds for the bans are very limited. The most common are religion and history; the object every time is to avoid offending some religious or parochial sentiment. Despite their limited scope, the bans reflect a widespread underlying consensus that personal freedom must be curbed for the sake of social order. Instead of an ideology of personal liberty, there is an underlying sense of personal duty; of restraint on behaviour, enforced if necessary by the state. **Economic reforms: On the defensive** This, in my view, is why the liberal economic reforms since 1991 have always been on the defensive. It is not for lack of success; starting from an abyss of collapsed growth and self-confidence, the economy is growing today at a very creditable rate which may well touch 11 percent this year. The balance of payments, which was impossibly adverse only four years ago, is strong today. Industry is growing at 13 per cent. Apart from these cold statistics, there is for the first time a sense of excitement in the air; people feel that there are undefinable opportunities, unquantifiable hope. This is a revolutionary change in the atmosphere, and it is entirely due to the economic reforms. And yet, no one boasts of the reforms, least of all those who did the reforms. No one celebrates the reforms. A certain shame-faced modesty pervades the reforms. This is strange and inappropriate. This shyness, this awkwardness arises from the fact that liberty is not accepted in India as the ultimate goal of political systems. This is why, for instance, there is so much paranoia about foreign investments. The foreign enterprise is seen as an intruder upon the economic space of the Indian enterprise, just as yesterday, the large enterprise was seen as an intruder on the space of the small enterprise, or the private enterprise as an intruder on the space of the government enterprise. The idea that the consumer is sovereign, that it is in the consumer’s interest that all enterprises, Indian and foreign, small and large, private and public, should compete in a level playing field, is still very foreign to India. The idea that choice is a part of individual freedom, that an individual should be able to choose from where he wants to buy his electricity or telephone services, is still very grudgingly accepted, and even then, many people would make all sorts of unnecessary reservations. The whole point of being the national of such a large and diverse country as India is to be free – free to believe what one likes, free to do what one likes, as long as it does not impinge on others’ freedom. Now that economic liberalism has arrived, almost by stealth, we must cultivate extremism in the service of liberty; only then will we provoke a fertile ground for the growth of economic liberalism. *This essay is part of a series from the [Indian Liberals](https://indianliberals.in) archive, a project of the [Centre for Civil Society](https://ccs.in). It is excerpted from the article titled ‘Liberalisation and Liberalism in India,’ published in Liberal Times Magazine in 1995. The original version can be accessed [here](https://indianliberals.in/liberal-times/liberalism-in-south-asia.pdf).* --- ## [ThePrint] Economist DR Pendse’s 7-point plan to cut expenditure and control budget deficit URL: https://indianliberals.in/theprint-mirror/economist-dr-pendse-cut-expenditure-budget-deficit/ ### Body _Mirrored from [ThePrint](https://theprint.in/opinion/indian-liberals-matter/economist-dr-pendse-cut-expenditure-budget-deficit/2752397/) on 2026-05-16. Originally published 2025-09-27. Author retains all rights; the canonical version on ThePrint should be cited. This mirror exists for AI-agent readability — search engines are asked not to index it (canonical SEO weight stays with ThePrint)._ # Economist DR Pendse’s 7-point plan to cut expenditure and control budget deficit The root cause of India’s Budget crisis is in impossibly high deficits. Deficits can be controlled only in two ways: (a) by raising revenue, and/or (b) by cutting expenditure. Harsh budgets come in two flavours: Budgets that would unravel either a savage plan for revenue generation or a savage plan for cutting expenditure, or possibly both. I remain convinced that, for various reasons, revenue generation is not the answer for us; It does not work. In fact, it aggravates the malady. We must concentrate on curbing expenditure, and this is still within our capabilities. Therefore, if the F. M. had produced a budget with a savage revenue generation plan, I would not have liked it at all; but it would have certainly passed the test of being called a harsh budget. If on the other hand, the F. M. had produced in his Budget a plan for savage cuts in expenditure, I would have readily welcomed it. He produced neither. I therefore, will take the liberty to outline my illustrative seven-point plan to control expenditure. It is not only harsh, it is ‘savage’. Not one single element in it will be politically acceptable. However, if we want to avoid yet more ominous implications in future, there is no escape from it. - Total government expenditure should be frozen. If the total expenditure is Rs. 3,03,738 crores in 1999-00, so it shall be Rs. 3,03,738 crores in 2000-01 too. This will apply to every Ministry and Agency. Thus, e.g., if the expenditure of the Ministry of Chemicals and Fertilisers is Rs. 9,147 crores in 1999-00, it should be the same in 2000-01 too. Each Minister concerned should be delegated complete freedom to manage his Ministry’s affairs within the overall ceiling. If he chooses to spend more on a particular activity, he will thus be obliged to first effect equivalent savings on some other activities. Some may wish to start more projects that are new and postpone existing ones; others the other way round. Some, to spend more on cars; others, more on travelling. Some, on employing more people; others on less. Some may want more office space, others may sell away some of the existing space. Etc.  - Borrowing and/or lending of resources among the various ministries should be permitted. If Minister A feels that from his allocation he can save say, Rs. 500 crores this year, he is welcome to lend this amount to his colleague Minister B, for say, one or two years, at a mutually agreed rate of interest. Similarly, Ministers can lend and borrow employees, office space and other resources. I visualise that large chunks of funds and employees will be made available under this dispensation.  - At present there is a spending spree among ministries and departments in February and March every year. For, if the actual expenditure is less than budget grant, the grant for the next year is almost certain to be reduced proportionately. If it exceeds the grant, the ministry’s hands are stronger in demanding a higher grant for the following year. Not only a carry-forward should be permitted, it should be well rewarded. If a ministry has a budget grant of say Rs 1,000 crores for 2000-01 but manages within Rs. 900 crores, not only should the saved Rs 100 crores be added to its allocation in the following year, but the ministry should be given an extra 15% of the saved amount as a gesture of appreciation.  - Ministries should be free to ask surplus staff members to sit at home for say two years or so, with their full salary cheques being sent to them every month. There are at least four good reasons to propose this. First, it is well accepted that the total cost of an employee to the employer is much more than the salary paid. Many prosperous organisations work out these estimates to ensure that the extra return to them from every additional employee is well above this total cost. Secondly, as a necessary result of market-oriented structural reforms, several government activities have become largely superfluous. Thirdly, this not only works but also in fact gives striking results. Recently, a multinational company reportedly asked hundreds of workers in its Sewri factory to thus stay at home. It is also well known that when the employees working at some Octrai nakas in Mumbai went on strike, the octrai collections increased more than two-fold at the hands of substitute college students! Finally, there is evidence from other countries too that most of the workers sitting at home, even on full salary cheques, find other and better jobs, and do not report back after the stipulated period.  - When employees retire, the resulting vacancies should not be filled up, particularly when there are several posts of an identical designation. If there is only one single Cabinet Secretary, it is understandable that his post should be filled up when he retires. However, if there are say fifty undersecretaries and five were to retire, the remaining forty-five should have to manage the total workload. Here again the Minister concerned should be given the freedom not to fill up specific posts.  - After all these steps are taken on Day-1, a further exercise of zero-based budgeting should be forthwith initiated and implemented. Persons with a radical mind-set who are not bogged down by conventional wisdom should be requested to advise, with an assurance of implementation. There are dozens of government activities that have lost their relevance in the context of reforms. There is duplication all round. I feel often sad to see so many talented and well-qualified Indians rusting in the bureaucracy. Some friends, with a more radical mindset, have argued with me e.g. that there is a strong case for privatising the Planning Commission and turn it into an independent think-tank; or that if Octrai collection can be privatised with conspicuous success, why not the income tax collection? The possibilities of zero base budgeting are immense. That perhaps explains why everybody talks of zero-based budgeting, but none will actually do anything about it.  - This much about the existing spread of the Government. Government should not take up any, repeat any, new activities of any size without the express approval of the Prime Minister; and unless they are of a strategic or sensitive nature, details about these should be publicised. The latest Economic Survey has underlined the fact, in the context of the success of the IT industry, (Information technology, not income tax please), that things move far better when the Government keeps itself out of them[6] and that many more success stories will be added if only, government would free those areas from its helping (!) hand. Lord Keynes reportedly said, “Man will do the rational thing, but only after trying all the irrational alternatives.” Did he foresee the budgets of the Government of India? Are anymore irrational alternatives left? *This essay is part of a series from the [Indian Liberals archive](https://indianliberals.in), a project of the [Centre for Civil Society](https://ccs.in). This essay is taken from the budget commentary titled “Budget (200-01) Drifting Towards the Cliff” published by the Forum of Free Enterprise in March 2000. The original version can be accessed on [this link](https://indianliberals.in/liberals/budget-2000-01-&-drifting-towards-the-cliff-march-2000.pdf#page=7).* --- ## [ThePrint] English didn’t enslave India. It was the harbinger of a new creative consciousness: A Ranganathan URL: https://indianliberals.in/theprint-mirror/english-didnt-enslave-india-it-was-the-harbinger-of-a-new-creative-consciousness-a-ranganathan/ ### Body _Mirrored from [ThePrint](https://theprint.in/opinion/indian-liberals-matter/english-didnt-enslave-india-it-was-the-harbinger-of-a-new-creative-consciousness-a-ranganathan/2756857/) on 2026-05-16. Originally published 2025-10-04. Author retains all rights; the canonical version on ThePrint should be cited. This mirror exists for AI-agent readability — search engines are asked not to index it (canonical SEO weight stays with ThePrint)._ # English didn’t enslave India. It was the harbinger of a new creative consciousness: A Ranganathan In order to appreciate the significance of Tagore’s contribution to modern political thought, it is necessary to view the background of the ‘Indian Renaissance’ in its historic setting. And the transition of mediaeval to modern India, which resulted in that great cultural awakening now known as the ‘Indian Renaissance’ was effected by Raja Ram Mohan Roy. Indeed, the day of Raja Ram Mohan Roy’s birth was the birthday of modern India. A new spirit was abroad, a new buoyancy of life symbolizing the streaks of a rosy dawn after the long mediaeval night which had enveloped India for centuries. The various forces which have contributed to the shaping of modern India originated in the mind of Raja Ram Mohan Roy. And Tagore not only constituted a historic link in the long chain of India’s cultural evolution, but was also the prophet of the Indian Renaissance heralded by Raja Ram Mohan Roy. Indian nationalism was an aspect of the ‘Indian Renaissance’ movement. It is well to remember, however, that the nature of Indian nationalism, although influenced by European nationalism, is entirely different from European nationalism. Indian nationalism succeeded in welding the political unity of India, whereas European nationalism split up Europe into several nations based on ethnic considerations. If Swami Vivekananda could be regarded as the prophet of Indian nationalism in his philosophical (Vedantic) context, Dr. Ananda Coomaraswamy, who had spent much of his career at the Boston Museum, can be looked upon as the most articulate exponent of the aesthetic philosophy of Indian nationalism. And Tagore’s approach to Indian nationalism differed from that of his distinguished contemporaries, who had merely Indianised the concept of Mazzinian nationalism. Tagore’s greatness lies in the fact that he had infused the spirit of poetry into the Indian national movement. And in the final analysis, Tagore had universalized the concept of freedom. “Swatantra,” as Tagore interpreted it, was not a mere political secularity. It was a process which extended the frontiers of the mind. He was certainly opposed to the continuance of British rule in India. However, even in the heat of political controversies, he never lost his sense of perspective. In fact, he had relinquished his Knighthood in the wake of the Amritsar tragedy as a protest against the atrocities committed by the British Indian Government. Tagore’s most precious gift to our country. But, Tagore was opposed to any form of ignorant and uninformed cultural chauvinism. Tagore, who had much in common with the artist-philosophers of Renaissance Humanism had warned the nation that “in this morning of the world’s awakening, if in only our own national striving there is no response to its universal aspiration, that will betoken the poverty of our spirit”. Tagore had drawn the vital distinction between the Western Nation and the spirit of the West, in his celebrated lectures on “Nationalism”: “This reign of law in our present government in India (the British Government) has established order in this vast land inhabited by peoples different in their races and customs. It has made it possible for these peoples to come into closer touch with one another and cultivate a common aspiration”. The reference is to Macaulay’s Penal Code which had transformed the basis of Indian society, since it established the legal principle of equality for the first time. Indeed, the movements of liberal thought which developed in England during the course of one or two centuries were compressed into a few decades in an entirely different setting. The Indian Penal Code was drafted by Lord Macaulay (who, incidentally had pleaded for religious liberty in the House of Commons while speaking in the debate on the civil disabilities of the Jews) was a landmark in the evolution of democracy in India. Independent India’s secular outlook owes not a little to the legal system based on Macaulay’s Code. While Tagore had appealed to certain sections in the West to rid themselves of that narrow cultural provincialism which tacitly assumed that the history of Western civilization was also the history of civilization he made it clear that “the desire for a common bond of comradeship among the different races of India has been the work of the spirit of the West, not that of the Nation of the West”. Mahatma Gandhi (incidentally, it was Tagore who had first hailed Gandhiji as the ‘Mahatma’), who was deeply influenced by Ruskin’s “Unto This Last” was opposed to the Western mode of industrialism. ‘Industrialism’ as Gandhi understood it was the ‘Curse of mankind’ and machinery constituted the ‘great sin’. And Tagore agreed with Gandhi upto a point. Tagore’s view was essentially that of an artist—“the product of the artist’s loom, the magic of man’s living fingers find its expression and its human harmonies with the music of life”. However, when Mahatma Gandhi began his nation-wide campaign to burn foreign cloth, Tagore had strongly opposed this proposal. With his characteristic dignity and the strength that flows from deep conviction, Tagore stated that in considering foreign, especially British-made cloth, as impure, economics was bundled out and a fictitious moral dictum dragged into its pace”. And Tagore was also against this “terrible habit of blindly obeying orders” and felt that “the clothes to be burnt really belong to those who most sorely need them”. And he cogently argued his case in these reflections: “In the West, a real anxiety and effort of their higher mind to rise superior to business considerations is beginning to be seen…I have seen…many in England…who have accepted persecution and contumely from their fellow-countrymen in their struggles to free other peoples from the oppression of their own Government in their struggles to free other peoples from the oppression of their own country’s pride of power. Some of them are amongst us here in India…Romain Rolland…is an outcast from his own people…I have watched the faces of European students all aglow with the hope of a united mankind, prepared manfully to bear all the blows, cheerfully to submit to all the insults, of the present age for the glory of the age to come. And are we alone to be content with telling the beads of negation, harping on others’ faults and proceeding with the erection of ‘Swaraj’ on a foundation of quarrelsomeness”. Like Raja Ram Mohan Roy, Tagore knew the value of English and could foresee its impact on Indian cultural life. Tagore, who was profoundly influenced by Keats and Shelley had felt that the impact of the English language on the mind of the Indian nation did not generate a process of cultural enslavement, but was the harbinger of a new era of creative consciousness. Western literary forms like the essay and the novel which became assimilated into the instrumental of our languages and the brilliant contributions to modern Science by some of our scientists are some of the outstanding features of the ‘Indian Renaissance’. Indeed, Tagore commented: “Gandhi Mahatma is making various efforts to make Hindi the language for the entire country. These efforts, however thriving today, may one day as well peter out”. And Tagore had hoped in his “Talks in China”, that “the awakening of the East” would “impart the conscious discovery of her own mind and universal meanings of our civilization, to re- derive its freedom from its past, to rescue it from the bondage of stagnation that produces impurities, to make it a great channel for communication between all human races”. Tagore was convinced that to realize the ideal of “Vishwabharati, which is similar to Whitman’s poetic ideal “of the marriage of continents, Climates, and Oceans”, in a world which has shrunk due to scientific advances we need a bridge of fundamental ideas and cultural values spanning civilizations through time and space. The impact of Indian philosophical thought on Western thinkers like Emerson, Whitman, Thoreau, W. B. Yeats, A. E. and several others, and Western influence on our thinkers like Ram Mohan Roy, Tagore and Tilak and Tagore’s impact on Gandhi are some aspects of this cross- fertilization of culture leading on to an International exchange of ideas. In fact, Tagore stated that “Vishw-Bharathi acknowledges India’s obligation to offer to others the hospitality of her best culture and India’s right to accept from others their best”. Viewed in the perspective of cultural history, the British impact on India resulted in a phenomenon which is similar to the effect of the Westernizing policy of Peter the Great. And today, there is undoubtedly a need for a re- thinking of the philosophy of nationalism in its proper perspective. It is remarkable that Tagore had pioneered a new approach to nationalism, in tune with the Time-spirit. As the eminent historian of Nationalism, Prof. Hans Kohn wrote in his “A NEW LOOK AT NATIONALISM”: “None has spoken more strongly against the cult of one’s own nation or rather than Vladimir Solovyev in Russia or Rabin- dranath Tagore in India, both men deeply rooted in the spiritual tradition of their Community and yet wide open to the critical insights of the West”. And as pointed out by Prof. Hans Kohn, the possibility of a deeper cultural intercourse between India and the liberal West can arise only if we no longer allow “our thinking to be channelled into widely accepted stereotypes about nationalism and its relation to liberty”. “The time has arrived”, wrote C. E. Trevelyan in his “The Education of the People of India”, “when the ancient debt of civilization which Europe owes to Asia is about to be repaid; and the sciences created in the East and brought to maturity in the West are now by a final effort to overspread the world”. And this new dispensation which followed in the wake of Raja Ram Mohan Roy’s letter to Lord Amherst was not regarded by Tagore as an invasion of Western ideas, but as a step in the direction of intellectual dialogue of cultures and civilizations. *This essay is part of a series from the [Indian Liberals archive](https://theprint.in/indianliberals.in), a project of the [Centre for Civil Society](https://ccs.in/). It is taken from The Indian Libertarian, with the essay originally titled ‘Tagore’s Humanistic Approach to Indian Nationalism’, published on 15 November 1962. The original version can be accessed [here](https://indianliberals.in/the-indian-libertarian/the-indian-libertarian-nov15-1962.pdf#page=14).* --- ## [ThePrint] Farmers’ agitations started in developed states like Coimbatore & Ludhiana: Sharad Joshi URL: https://indianliberals.in/theprint-mirror/farmers-agitations-coimbatore-ludhiana-sharad-joshi/ ### Body _Mirrored from [ThePrint](https://theprint.in/opinion/indian-liberals-matter/farmers-agitations-coimbatore-ludhiana-sharad-joshi/2890665/) on 2026-05-16. Originally published 2026-03-28. Author retains all rights; the canonical version on ThePrint should be cited. This mirror exists for AI-agent readability — search engines are asked not to index it (canonical SEO weight stays with ThePrint)._ # Farmers’ agitations started in developed states like Coimbatore & Ludhiana: Sharad Joshi Though it manifested in full strength in the early 1980s, the new agrarian mobilization was launched in the early 70s. The farmers’ agitations did not start in the poorest of the states but in the more developed and progressive ones such as Coimbatore district of Tamil Nadu in 1970 and Ludhiana district of Punjab in 1972. Unlike many parts of the country having subsistence agriculture, these districts were well endowed with irrigation facilities and their agriculture, by the late sixties, had already become heavily market-oriented. The leaders of agitations in Maharashtra and Tamil Nadu showed a remarkable capacity to formulate effective political strategies and articulate powerful idioms for rural mobilization. Sharad Joshi, in Maharashtra in particular, stood out as the strategist and communicator, whose imaginative slogan of the ‘Bharat-India’ divide became a new idiom of rural mobilization. With “remunerative agricultural prices” and “Freedom of access to markets and Technology” as its principal slogans, the Shetkari Sanghatana and other associated farmers’ organizations led many successful agitations under the banner of the Kisan Co-ordination Committee (KCC), which attracted farmers in numbers ranging between 1,00,000 to 5,00,000 on successive occasions over the last three decades. By 1982, over 36 farmers were shot down by the police for the ‘crime’ of demanding fair prices. At the global level, this was far more massive movement than the one led by Lech Walesa in Poland. The farmers’ cause is not a popular one in the urban intellectual milieu. Consequently, the farmers’ revolt in India went largely unnoticed. ***Also read: **[Social injustice is inevitable under socialist economic systems: BR Shenoy](https://theprint.in/opinion/indian-liberals-matter/social-injustice-socialist-economic-systems-br-shenoy/2884958/)* ### **The role of Shetkari Sanghatana** SS (Shetkari Sanghatana) underlines five distinguishing features of the new agrarianism. First, the new agrarianism does not put on a pedestal lifestyle as being particularly virtuous for its blissful simplicity and spiritual richness. Second, it does not glorify the pastoral/agrarian pattern. Rather, the new agrarianism is aimed at ensuring, for the farmers, highest possible degrees of freedom as also a life of self-respect on par with that of the non-farming communities. Third, the SS recognizes that capital formation of the new industry needs to come out of surplus from agriculture. In the Soviet Union, the matter was debated in during the Stalin reign, to the conclusion by Stalin sending tanks against farmers. In India, the debate was resolved by establishing a complex of economic system which encouraged higher production but denied the farmer remunerative prices. Fourth, unlike peasants’ movements of the past, which pitched tenants against the landlords, the lower castes against the higher castes, the SS farmers’ movement was not ‘divisive’ of the rural community. The significant line of internal contradiction was between “Bharat” and “India”. Mahatma Gandhi as also Marx have emphasized the conflict between the town and the country. Sharad Joshi’s view does not make a geographical division. As he states it, “Bharat is that notional entity which continues to be exploited by the same policies as those of the Colonial Rule even after the British left; while India is that notional entity which has obtained the inheritance of Colonial exploitation.” The misery in the village is not caused by the “slightly” better-off farmers in the neighborhood but by an “outside exploiter” – the urban India. “Transcontinental imperialism” represented by the British has been replaced by “internal colonialism.” Finally, since surplus in agriculture expropriated through a policy of cheap raw materials and artificially depressed prices constitute the main technique used by the exploiters (the government) the agenda of the SS has been to bring in a one-point programme of “Remunerative prices”. The remunerative prices for their agricultural produce are to be acquired not through a hackneyed system of Agricultural Produce Marketing Committees (APMCs), Commission for Agricultural Costs and Prices (CACP), Food Corporation of India (FCI), and Public Distribution System (PDS). These four institutions have been the basic instruments of exploitation of the farmers. A genuinely free market assures a price that adequately covers the cost of production. Freedom of market and opposition to all forms of State interventions in the market mechanism becomes the basic plank of the farmers’ movement. The rationale for the remunerative price agenda is as follows: - Farmers respond rationally to price movements; they will react to price incentives by increasing acreage and investment and by adopting improved technology. - Farmers’ response will increase demand for labour and, hence, wage earners will benefit even more than the cultivators. - As a consequence of additional income so received, farmers will undertake non-agricultural activities; thus, creating employment and the incremental income that will bolster secondary, tertiary as also service sector growth. - Trade and the exchange are beneficial for attaining higher levels of production and higher standards of living. Self-sufficiency is the virtue of less cerebral species. The system based on self-sufficiency will often be exposed to lists of droughts and famines. - The cerebral character of the human species would sit in a separate category. Human societies have ruled many Bloomsbury forecasters wrong through innovation and technology. The history of mankind shows that the good of the masses comes not so much from social or political institutions as from advancement of technology. - All technologies have their good aspects and bad aspects. Societies accept technologies when their benign expressions are more relevant. Societies tend to question the use of those very technologies when the times change and the less savoury aspects thereof manifest themselves. - The advancement of human societies has been achieved not by going back into obscurantist past but by innovating higher technology that will limit the bad effects of the old ones. Thus, the overall philosophy of the Shetkari Sanghatana is that price incentives in agriculture and a “natural” process of capital accumulation driven by an agriculture revolution can benefit the entire economy and break the vicious circle of poverty. As opposed to this, an accumulation process driven by industrial revolution (before agricultural revolution takes place) is always premised upon a coercive expropriation of agricultural surplus.  The SS is the only farmers’ organization in favour of an uncontrolled market in agriculture produce and international free trade in both inputs and outputs in agriculture. Though regional in base, the Shetkari Sanghatana has been able to force a debate on the developmental path chosen by India in the context of its demands at the highest level. The organization has played a crucial role in shaping the ideology and the demands of the largest coalition of farmers’ organisations in India. *This essay is part of a series from the Indian Liberals *[*archive*](https://indianliberals.in/)*, a project of the *[*Centre for Civil Societ*](https://ccs.in/)*. This essay is an excerpt from a booklet published by “Shetkari Sanghatana”  titled “Visionaries of a new “Bharat ” in 1999. The original version can be accessed on this *[*link*](https://indianliberals.in/liberals/visionaries-of-a-new-bharat-shetkari-sanghatana.pdf)*.* --- ## [ThePrint] Free education is mere jugglery of words. A hangover of anti-rational pre-Partition days URL: https://indianliberals.in/theprint-mirror/free-education-is-mere-jugglery-of-words-a-hangover-of-anti-rational-pre-partition-days/ ### Body _Mirrored from [ThePrint](https://theprint.in/opinion/indian-liberals-matter/free-education-is-mere-jugglery-of-words-a-hangover-of-anti-rational-pre-partition-days/2665374/) on 2026-05-16. Originally published 2025-06-21. Author retains all rights; the canonical version on ThePrint should be cited. This mirror exists for AI-agent readability — search engines are asked not to index it (canonical SEO weight stays with ThePrint)._ # Free education is mere jugglery of words. A hangover of anti-rational pre-Partition days There used to be a wide-spread belief among the illiterate masses before Partition that in Free India, milk and ghee would be supplied free to every child; all sorts of medicines would be available in the hospitals without any cost; customers would get provisions and sweet-meats in the market without having to pay any price. And in the same train of ideas came the fanciful notion that education up to the highest degree would be free. Ours is a land, where people seem to believe in all seriousness that Aladin’s Lamp is still preserved in the Moghal Fort at Delhi and Herculean tasks like the manufacture of penicillin, construction of moon-rockets and installation of thermo-nuclear plants can be accomplished without entailing any cost to ourselves. When, for our defence, we can confidently depend upon the arrival of the Lord Himself with His Sudarshana Chakra, and consider all military preparations unnecessary, is there any wonder if we also genuinely believe that some superman race of teachers will some day descend on earth—in this part of it—and convert, by a magic touch, all students into engineers, doctors and lawyers, without demanding a penny by way of remuneration? Thank God, ten years’ experience in Free India has taught them that we cannot get “something out of nothing.” There are no shortcuts in the scheme of nature. We can deceive ourselves into the belief that in a free country, we can get amenities without having to pay anything in return, but we cannot deceive nature. Most people have been disillusioned by now, and no longer labour under the myth that they can freely help themselves with a rosagulla at the confectioner’s shop, and nobody would bother them about the price. Provisions, medicines and other necessaries have to be paid for even in Free India; and if someone is getting them free, rest assured, someone else, not always in sight, is paying the price. Whenever we get comfort and have not paid for it, we must realise clearly that we are enjoying it at somebody else’s cost. ### **Free education—a mere jugglery of words** The day-dream of a free-education scheme is a hangover of the anti-rational mental attitudes of pre-Partition days. The talk of ‘free-education’ appears very fashionable at the first sight, and, as the fallacy involved in it is not so easy to detect, it proves a handy tool in the hands of crafty political demagogues at the time of elections. Educational procedure involves labour—of the teacher—which must be paid for. The question is: who should pay for it? If education is not ‘free’ the scholars pay for it in the form of tuition fees. And if it is imparted ‘free’, the teaching staff has still to be remunerated, but now the money comes in the form of taxes, or special levies from those, who may not be directly concerned in the matter. The description ‘free education’ thus burns out, in the ultimate analysis, to be a clever device for confusing the public mind and to keep them well-fed on glittering slogans. There is nothing ‘free’ about it, for what is rejected as tuition fee, is accepted in another form, as ‘educational cess’ or as a ‘special levy’. This jugglery with words can effectively hoodwink masses in lands of befogged intelligence only, where people are unable to detect, by analysis, the subtle fallacies inherent in the arguments of state bureaucrats and professional politicians. Any decision by a government to make education ‘free’ or even ‘cheap’, must be taken by the people as a warning to be prepared for increased taxation; and the step would not be in any way different from a decision to abolish postal charges and quietly to double railway freights! In a rational financial system, the expenditure on a public utility department should, at least in part, be met by revenue accruing from the same. And when viewed against this background, the realisation of reasonable tuition fees from the scholars, especially from those in the higher classes, does not seem to be as baneful a practice as it is made out to be and need not be done away with. This, in fact, appears to be the only sound method to finance the education department. Extra taxes should only supplement income from tuition fees. ***Also read:** [Slide in govt school enrolments continued in 2024-25; UP alone witnessed drop of 21.82 lakh](https://theprint.in/india/education/slide-in-govt-school-enrolments-continued-in-2024-25-up-alone-witnessed-drop-of-21-82-lakh/2624027/)* ### **Death warrant against private institutions** The point we have developed brings out the unnatural nature of the decision of the Punjab Government to impart free education in state-controlled junior schools. From where will the money come for the salary bills of the teachers? No matter how cleverly they put it, it has to come from the public; and the procedure they have adopted means only one thing, if it means anything. It means that money spent on Tom should not come from Tom—that is a cruelty. Money spent on the education of Tom should come from the pocket of Dick! Let us look at the scheme from another angle. The number of scholars actually studying in government institutions is much smaller than of those attending private ones. In the very nature of things, these privately-managed institutions cannot give education gratis, unless the salary bill of the staff is paid from the state exchequer. All other philanthropic sources—capitalists, landlords, Rajas and religious endowments—whence money could go to finance private enterprise in education—in the past have virtually dried up thanks to the much-advertised Socialist and Secular pattern of society. If the state bureaucrats were really interested in popularising education, they should have concurrently accepted the moral responsibility of meeting the annual budget of private institutions from the state revenues. The decision to remit fees in government schools, without any substantial aim to the privately-managed ones, is in effect a death warrant against them. And if some of them manage to survive, they will survive, not because of the ‘benign’ government, but in spite of it. If out of chagrin, the managements of private institutions decide to withdraw from this unpleasant competition with the all-powerful government and suspend their activities, the education of over seventy per cent of the children, now at school, will come to a stop. It is a strange way of promoting child-welfare to provide free educational facilities to a privileged few, and leave the vast majority to rot by the roadside! And that will be the result if some privately-managed institutions are forced to close down, being unable to compete with those financed by government from out of the state funds. ***Also read: **[Govt school enrolments dipped by 87 lakh in 2023-24. Bihar saw sharpest decline, followed by UP](https://theprint.in/india/education/govt-school-enrolments-dipped-by-87-lakh-in-2023-24-bihar-saw-sharpest-decline-followed-by-up/2427200/)* ### **Concrete suggestions** To sum up, we must recognise that: - a) There is no such thing as ‘free-education’. Money paid to the teachers comes ultimately from the people, as taxes if not as tuition fees. - b) The talk of ‘free-education’ is tendencious. It is a clever device by which political leaders are trying to confuse the public. - c) If the Government seeks to collect funds for purposes of education, not by raising tuition fees, but by enhanced taxes, the benefit of ‘free’ studentship must accrue to all pupils, who belong to the school-going age, and not to a favoured few only. The Government must forthwith ban imposition of tuition fees on pupils in all the schools and remunerate the teachers, engaged in approved institutions, from the government treasury. - d) If the Government cannot bear the burden of imparting ‘free-education’ to all the scholars, it should desist from creating difficulties in the way of those private agencies, which are sharing this burden with it. This means, that while all persons deriving the benefit of educational facilities must be required to pay the prescribed fees, whether in a government school or in a private one, the grant-in-aid rules should be so liberalised that the private institutions do not have to look to philanthropic people for help, but their deficit should be wholly met by the government. In the end, I should like to submit that, in my opinion, the educational institutions should be maintained neither exclusively on special taxes, nor exclusively on tuition fees, but on both. The fees should be rated low enough to locate a deficit of about 25% at the school stage and about 50% at the College and University stages. The deficit should be paid from the state treasury to the private institutions as well as to those under the direct control of the government. After all, the private agencies are promoting the same cause, for which the government stands, and are drawing money from the public—money in the form of fees—by using their own influence on people, where the government may have to resort to more coercive methods—taxation and compulsory levy—for achieving the same end. All talk of ‘free-education’ must end once for all, because it is deceptive. *This essay is part of a series from the [Indian Liberals archive](https://indianliberals.in), a project of the [Centre for Civil Society](https://ccs.in). This essay first appeared in the Indian Libertarian magazine on 1 January 1959. The original version can be [accessed on this ](https://indianliberals.in/the-indian-libertarian/the-indian-libertarian-jan1-1959.pdf)link.* --- ## [ThePrint] Without free enterprise in economic life, we cannot maintain democracy: Minoo Masani URL: https://indianliberals.in/theprint-mirror/free-enterprise-in-economic-life-minoo-masani/ ### Body _Mirrored from [ThePrint](https://theprint.in/opinion/indian-liberals-matter/free-enterprise-in-economic-life-minoo-masani/2920077/) on 2026-05-16. Originally published 2026-05-02. Author retains all rights; the canonical version on ThePrint should be cited. This mirror exists for AI-agent readability — search engines are asked not to index it (canonical SEO weight stays with ThePrint)._ # Without free enterprise in economic life, we cannot maintain democracy: Minoo Masani I shall give two major reasons why it is important that free enterprise remains a major element in our economic life. My first argument is purely on economic grounds that free enterprise is the more productive way of life. It delivers the goods more than any other system. So far as industry is concerned, we know the facts. There are so many fields where we can test this. Mr. Graham Hutton, the British Liberal writer, gave a good analogy. He says that the government, when it enters the field of production, is like a dog in the barnyard—it can’t lay eggs itself and it stops the hens from laying eggs.  This experience of inefficiency of State enterprise in industry is making countries, even Communist countries like Yugoslavia and, for a little while, Poland, try to edge away from the State capitalist system. The Yugoslavs have invented a theory of workers’ control in order to end what they call State Capitalism of the Soviet kind. They do not admit that Russia is communist or socialist in any way. They say that it is a distortion of Marxism and Socialism. Russia is state capitalist in a vicious kind of way, and so the Yugoslav communists are trying to get away from the Statist pattern by ostensibly giving the factory back to the workers. That is partly theoretical, but one thing happens—the enterprise becomes more autonomous and the laws of competition come into existence.  I have heard leading Yugoslav Communists tell me in 1955, “We must get back to the laws of the market”, and they are quite logical and ruthless about it. If you ask them what happens if a shoe factory cannot sell its shoes. Because either the price is high or the products are not acceptable, they say that the factory must shut down. It must go out of competition because the consumer does not want their products. Consumer preference comes back and not the dictat of the Planning Commission. If you ask what happens to the workers, they say they are unemployed, and they will have to find other jobs. The managers are punished by not being allowed to be managers any more for some gears and being sent back to the bench because they have made a hash of their enterprise. So they get back to the laws of the market in a rather downright and crude way even in a communist economy, the moment it feels able to edge away from the unproductive system of production that State capitalism always is.  Even on the land, it is very clear that only private enterprise delivers the goods and that wherever the government tries to collectivise the land and farm it under State control, the yield drops. The smaller the farm, the more productivity per acre and the higher yield per acre, contrary to fashionable thinking in Delhi. I was very amused to see some time ago with a great sense of discovery the Delhi papers announced that the larger the farm the less the production, as if some new law of nature had been discovered. This was based on a study by a government official, who investigated on behalf of the Institute of Agricultural Research and the Ministry of Agriculture have now published a monograph which contradicts completely everything that the Prime Minister said in Parliament during our big debates on Co-operative Farming. This is a historical and universal phenomenon. In the U.S.S.R., which has the system of highly mechanised collective farms, the weekly yield is 9.3 quintals per hectare; U.S.A., which has private enterprise on big farms, also mechanised, 12.2 quintals per hectare. In Britain, where the farms are very much smaller and private, it is 28.5 quintals. In Denmark, where the farms are even smaller and private, 34.4 quintals, and in Japan 22.6, where the farms are only 1/2 acres to 1 acre or 2 acres, much smaller than in India. In other words, Japan, with farms much smaller than ours, produces twice as much wheat per hectare as the USA and two and a half times as much as the U.S.S.R. In the case of rice, you will find the same story — U.S.S.R., 25 quintals per hectare, U.S.A., 28.3 quintals and Japan and Formosa, 48.5 quintals per hectare.  My other reason for saying that the continuance of free enterprise is essential or desirable is its political and social effects. Unless there is a large measure of free enterprise in economic life, we cannot maintain a free society; we cannot maintain a democratic constitution or Government. To start with, there is no known example in the world of a State owning everything—land, factories and business— and yet having a Parliamentary or any other kind of democracy with individual liberty. There is no known example yet. Maybe, thousands of years from now, such an example might evolve, but at present, human beings as they are, if there is no private enterprise there can be no political democracy and individual liberty.  Apart from the fact that it has not yet been done, which is pretty conclusive, logically also it must be so. Let us start by saying that unless we can have freedom of speech and expression and opposition in a society, we cannot have political democracy, democratic government and individual liberty. The need for an opposition, therefore, is at the core of a democratic system; if we cannot tolerate opposition, then obviously the Government becomes permanent, and it cannot be changed or replaced by the will of the people.  There cannot be a free opposition or effective opposition without free enterprise. Let us consider who will provide the opposition. In a system of society where everyone is either an officer or an employee of Government, as would be the case in Russia and China today–more or less everyone is an employee of government—where does the opposition come from? Obviously, a civil servant cannot start an opposition and get elected to Parliament in the face of a government that owns everything. So since one cannot go into opposition without losing one’s job and ration card, one does not go into opposition. Therefore, there is no opposition. Trotsky, who was a communist till he was murdered by Stalin, in his later years realised rather belatedly the nature of this truth when he said that in place of the old slogan “he who does not work neither shall he eat”, the new slogan in a communist society is “he who does not obey, neither shall he eat”. He came to the conclusion that this was the nature of State ownership. When the State became the universal employer, then obedience to the universal employer, the Government, was the test of whether one earned a living and could eat.  The only classes which can possibly provide opposition or the basis of opposition in society are what an Italian political thinker in the second half of the 19th century called “autonomous social forces”. The autonomous social forces are the businessmen, the factory owners, the shop keepers, the peasants who own the land, the artisans who create with their hands, the self-employed people, the professionals, (the lawyers, the doctors, the architects, the auditors etc.). These are “the autonomous social forces”, which means that they stand on their own legs.    ***Also read: **[Farmers’ agitations started in developed states like Coimbatore & Ludhiana: Sharad Joshi](https://theprint.in/opinion/indian-liberals-matter/farmers-agitations-coimbatore-ludhiana-sharad-joshi/2890665/)* They are not beholden to the government of the day for their bread and butter. The professional man, the businessman in a free economy, the landed peasant, the artisan and the self-employed man stand on their own legs and they can say to Government that they do not agree. They are the classes who can possibly go into opposition. They are the classes who can maintain a free press. They are the classes who can have any kind of voluntary society or organisation which is not dependent on Government patronage. Abolish these classes by nationalisation of private property and land and industry, and you will destroy every autonomous social force.  Then everyone is at the mercy of the State. That is why a command economy replaces not only the ballot box of the marketplace but a totalitarian Government replaces a democratic government provided by the Constitution.  These are two very basic reasons why everyone who believes in individual liberty and democratic government or the Constitution of Indian Republic cannot but come to the conclusion that the maintenance of free enterprise in agriculture and industry is a sine qua non of the maintenance of the free Constitution of India. *This essay is part of a series from the Indian Liberals *[*archive*](https://indianliberals.in/)*, a project of the *[*Centre for Civil Societ*](https://ccs.in/)*. This essay is an excerpt from a monograph published by the Forum of Free Enterprise titled “The Future of Free Enterprise in India” in June 1961. The original version can be accessed on this *[*link*](https://indianliberals.in/forum-of-free-enterprise/the-future-of-free-enterprise-in-india-jun8-1961.pdf))*.* --- ## [ThePrint] The Press is not artillery — neither for the ruling party nor the Opposition: Sachin Sen URL: https://indianliberals.in/theprint-mirror/free-press-sachin-sen/ ### Body _Mirrored from [ThePrint](https://theprint.in/opinion/indian-liberals-matter/free-press-sachin-sen/2770399/) on 2026-05-16. Originally published 2025-10-25. Author retains all rights; the canonical version on ThePrint should be cited. This mirror exists for AI-agent readability — search engines are asked not to index it (canonical SEO weight stays with ThePrint)._ # The Press is not artillery — neither for the ruling party nor the Opposition: Sachin Sen Man lives differently; hence he thinks differently. It is, therefore, not strange that there are competing beliefs and differing ideologies. The Press is to serve society. Two points are to be taken note of. First, the needs of a plural society cannot be answered by uniform principles. Secondly, there are several roads to the achievement of the goal. In this view of the situation, the Press must be free to serve society in its own way. It must have a soul of its own. It must not play a subservient role. It has to function as an autonomous institution. In political science, it is accepted that the State is the most supreme authority. It knows no competitor. But in sober reality, the State never acts; it is acted for by those who are in control of the coercive apparatus of the State. They form the government. Democracy cannot function on creative lines if governments do not encourage the growth of autonomous institutions to serve society in their own way without any pressure. Thus, the interests of democracy demand that the Press has to be nursed as an autonomous institution. In political theory, anti-State activities and anti-government activities are not to be confused. The Government has the inherent right to curb anti-State activities; but it must not use its coercive authority to drill and discipline legitimate activities against it. A democratic government must respect this border-line. The ruling party must not think that it is coeval with the State, nor should it try to create conditions for the withering away of all dissenting opinions. That is what liberal democracy asks for. The accent of Communist democracy is on the creation of the party-State, so that, in fullness of time the State may wither away and the dominance of the party is installed. In my view, the freedom of the Press cannot be understood unless the character of the State is known. The expression, freedom, cannot have identical connotations in a liberal democracy and in a Communist democracy. In a police State, much importance is attached to subjective truths; in a social service State, there is the emphasis on objective truths; in the Communist party-State, there is the supremacy of party truths. Liberal democracy of today has favoured the emergence of the social service State, and it stands for objective truths. To get at objective truths, we need experimental minds. There should be trial and error methods; all experimentations have to be assessed scientifically. There can be no experimentation in social growth and progress if the doctrine of free trade in ideas is rejected. Truth has different facets. It is the basic assumption of a liberal democracy that truth cannot be known unless both sides are presented. Thus, the Press in a liberal democracy has to be a forum for the expression of different points of view. It must not suppress, taint or adulterate news. Hence, it is said that news is sacred. The same news may be read differently by different persons. Thus, Press freedom consists in the freedom of gathering and printing news and in the freedom of reading and commenting on news without prompting from any extraneous authority. On a rigorous analysis, it can be argued that any newspaper which feeds its readers with one-sided news may win a political bout, but it does not serve the cause of liberal democracy. Pressmen are not a type of artillery, clearing the deck either for the ruling party or for the Opposition. They are not to “brainwash” people, nor should they carry iron curtains in their skulls. They are to serve society and to widen the horizon of the people. The world is both diverse and dynamic. We pressmen must not remain indifferent to this stern reality. The freedom of the Press is an institutional freedom, and as such all newspapers need not sing in the same tune. But every newspaper must have the freedom to gather and to receive news and to read news in its own way. A modern newspaper has two facets, the commercial aspect and the public service aspect. We journalists are concerned with the public service aspect of the newspaper. If we lose our historical role, we vulgarise the profession. Advocates of the Press or the Government should not think that they are infallible. It is the vulgar mind which has confidence in its infallibility. The Press must not falter to judge; it must not hesitate to present news fairly. Accordingly, I do not think much of the subsidised Press or of the obliging Press or of the party Press or of the irresponsible Press. A free Press is linked with free enterprise and a free society. Those who frown on free enterprise and free society are the grave-diggers of the free Press. *This essay is part of a series from the [Indian Liberals archive](https://indianliberals.in), a project of the [Centre for Civil Society](https://ccs.in). It is taken from a monograph published by the Forum of Free Enterprise titled: “A Free press is linked with Free Enterprise and a Free Society,” published on 8 June 1960. The original version can be accessed [here](https://indianliberals.in/forum-of-free-enterprise/a-free-press-is-linked-with-free-enterprise-&-a-free-society-by-dr-sachin-sen-june-8-1960.pdf).* --- ## [ThePrint] If fundamental right to property can be taken away, so can all the others: AG Mulgaokar URL: https://indianliberals.in/theprint-mirror/fundamental-right-to-property-ag-mulgaokar/ ### Body _Mirrored from [ThePrint](https://theprint.in/opinion/fundamental-right-to-property-ag-mulgaokar/2761912/) on 2026-05-16. Originally published 2025-10-11. Author retains all rights; the canonical version on ThePrint should be cited. This mirror exists for AI-agent readability — search engines are asked not to index it (canonical SEO weight stays with ThePrint)._ # If fundamental right to property can be taken away, so can all the others: AG Mulgaokar The Indian Constitution in embodying in a separate chapter certain rights including those to personal freedom and to private property and designating this as the Chapter of Fundamental Rights recognised certain cardinal principles, some explicitly and others by implication. What is fundamental if it is not inherent and unalterable; and how much fundamental is a right if it can be restricted or taken away by just an ordinary legislative process as the fancy takes some legislators? The issue involves not only legal or constitutional but moral as well as social and economic considerations. If all these considerations are fully and dispassionately weighed it will be seen that the move is an altogether retrograde step. The fundamental rights guaranteed to the Indian citizen in the Constitution are broadly his life and freedom, certain liberties like free speech and right to practice any profession or trade, and lastly acquire and hold property. It should be remembered that the term property covers a very wide field, but it is not necessary to go into all its details for the purposes of our discussion. What is attempted by the contemplated move is for the present to remove the right to acquire and hold property from those guaranteed to the citizen in the Constitution. How long, then, before the others are attacked? Perhaps one by one, as the whim or fancy takes the necessary number of legislators. Take the right to move to any place in the union territory given to every citizen. Is it difficult to imagine that it will be one of the next ones to be attacked? At this rate no right can be considered fundamental. If anyone can be taken away, so can all. Now the Indian Constitution in guaranteeing these various rights and freedom to the Indian citizen has not placed them in a totally rigid and inviolate form. They are subject to abridgement and even suspension provided this is reasonable and in public interest. So if the public interest necessitates it and it is reasonably done, a fundamental right can be by legislation restricted. If in spite of all this the move is to be persisted in, then who can believe in the fundamentalness of these fundamental rights? This, then, is the moral issue. There is also another aspect to this moral issue which no sensible legislator can afford to omit from his consideration. Nature has planted in Man the instinct of self-preservation. We see evidence of it even in a child when it refuses to part with a battered toy and in an adult when he saves for his own future or for his dependants. The result of his savings is his property and he is entitled to do what he likes with it subject to what is known as social control. (Even the paper Constitution of the U.S.S.R. recognises this right.) This world-wide, not excluding communist countries, recognition is as much due to the natural instinct planted in man as also because thereby the national economy is strengthened. As the individual citizen saves, he adds to national wealth. Therefore, if you take away the individual’s rights over his property, two results can be expected to follow. We have already seen what disastrous results have followed from prohibition. This is what naturally happens when an attempt is made to fly in the face of public opinion or a natural human instinct. This is exactly what will happen, there will be widespread evasions and breaches of the law. In the second place there will be, if this step even partially achieves its desired results, so much dislocation in the country’s economic structure as to prove a national calamity. Indian history tells of a Delhi King transferring his seat from Delhi to Daulatabad and forcing the whole population to follow suit. The disastrous results that followed have to be read to be believed. ***Also read: **[Watch CuttheClutter: How the Socialist state took right to property & new SC order starts a correction](https://theprint.in/judiciary/watch-cuttheclutter-how-the-socialist-state-took-right-to-property-new-sc-order-starts-a-correction/2347209/)* Having considered the moral and economic aspects of the question, it only remains briefly to consider the legal or constitutional aspect of the matter. By a recent decision of the Supreme Court it has been held that Parliament has no power to amend the Constitution so as to take away or abridge the fundamental rights. The Court has however expressly saved from the application of this ruling all the earlier amendments to the Constitution on the doctrine of prospective overruling. It held that under Art. 368 the Parliament has the power to amend the Constitution. But under 13(2) no law which takes away or abridges fundamental rights is valid. It answers the question whether an amendment is law affirmatively. Five of the six judges who expressed the majority view hold that amendment is made in exercise of residuary power under Art. 245 and Art. 368 prescribes the procedure to be followed. One judge, however, held that the power to amend was explicitly given in Art. 368. But as we see, in any case, as the result of an amendment to a law is also a law and therefore, if it abridges a fundamental right, it must attract the application of Art., 13(2) which prohibits the making of any law which takes away a fundamental right. The only alternative therefore would be the summoning of another Constituent Assembly charged with the specific task of either amending the Constitution or writing up another. Here, again, another very important constitutional consideration arises. It cannot be said that the last general election was fought by any party on the issue of amendment of the Constitution. It is a cardinal principle of parliamentary democracy that no bill causing major constitutional change should be allowed to be brought in the life of a parliament unless this was placed before the electorate at the election time by the party concerned. Those who know their Constitutional Law will remember that Asquith fought a general election in January 1910 (in Edward VII’s lifetime) and came to power. The issue had been the revolutionary Budget of Lloyd George which the House of Lords was blocking. When Asquith approached George V (Edward VII had died in May 1916) to promise to create enough number of peers to ensure the successful passage of the Budget through the Lords, the King, though only a few weeks on the throne, insisted that Asquith face another general election on the specific issues of Budget and amendment of the powers of the Rouse of Lords. So that, although a general election had only taken place in January 1910, the ruling Liberal Party under Asquith had to fight another general election within a few months (in October 1910) and the country had to face all the inevitable dislocation and expense. That Asquith won the election and the two measures, the Budget and the Parliament Act, were duly passed is a matter of history. My object in recounting this important event in the constitutional history of British democracy is to point out the great lesson it holds for this country but in a great sense for President Giri. It is his bounden duty to warn the Prime Minister that whatever the Supreme Court does or does not do, he will be unable to accord his assent to an Act amending the Constitution in such a major way unless the people have had a chance of declaring their wishes in the matter in a general election. *This essay is part of a series from the [Indian Liberals archive](https://indianliberals.in), a project of the [Centre for Civil Society](https://ccs.in), and originally appeared in the December 1969 issue of Freedom First magazine under the title ‘Is Right to Property Not Fundamental?’ It was then reproduced in a publication of Forum of Free Enterprise on 9 April 1970. The original version can be accessed [here](https://indianliberals.in/forum-of-free-enterprise/is-right-to-property-c-k-daphtary-april-9-1970.pdf).* --- ## [ThePrint] Govt should respect the autonomy of higher education institutes: GD Parikh URL: https://indianliberals.in/theprint-mirror/govt-autonomy-higher-education-institutes-gd-parikh/ ### Body _Mirrored from [ThePrint](https://theprint.in/opinion/indian-liberals-matter/govt-autonomy-higher-education-institutes-gd-parikh/2932764/) on 2026-05-16. Originally published 2026-05-16. Author retains all rights; the canonical version on ThePrint should be cited. This mirror exists for AI-agent readability — search engines are asked not to index it (canonical SEO weight stays with ThePrint)._ # Govt should respect the autonomy of higher education institutes: GD Parikh The educational policies of the Indian Union and of some of the state governments have been responsible recently for raising the issue of academic freedom. The Universities (Regulation of Standards) Bill, circulated by the Ministry of Education to the universities for eliciting their opinion, came in for a strong criticism from these bodies on the ground that it threatened their autonomy and was likely to jeоpardise academic freedom.  In UP, a controversy seems to be growing around the issue of interference by the state government in the working of the universities. In Bombay, a Bill to consolidate the law relating to the University of Bombay has been published and has come in for criticism on the ground of its failure to concede the autonomy of the university. These and similar other developments are likely to focus increasingly the attention of the people on the nature of the freedom of the institutions of higher education. The purpose of this note is to analyse briefly this problem and to bring out possible directions in which it can be tackled, given our concern for promoting the democratic way of life. To formulate a clear definition of academic freedom and to indicate its precise limitations is a difficult task, not perhaps altogether free from controversy. What can better be attempted is a general description of it, which may serve a useful purpose in tackling problems pertaining to it on a practical level. It is generally recognised that such freedom is essential for institutions working at all the different levels of the educational pyramid.  Although the respective spheres of ‘guidance’ and ‘spontaneity’ and the relation between the two at the early levels of education may be a matter of difference of opinion, prevention of indoctrination is a point of general agreement. At the same time, the responsibility of the public authority, national, regional or local, has generally been viewed as more direct at these levels, and a certain amount of control in their behalf as unavoidable. Instruction tends to become education, ‘method’ begins yielding place to ‘content,’ which again later comes to serve the purpose of promoting the quest of truth as we proceed higher up in the educational structure and the need for freedom becomes all the more pronounced and essential.  Such freedom has therefore come to be looked upon as one of the most basic and vital principles of a free society. Academic freedom can be said to imply the freedom and autonomy of the institutions of higher education in their functioning, the freedom of their academic and administrative bodies from any external influence or authority in laying down courses and curricula, prescribing texts, recommending readings and references, determining minimum standards for entrance as well as the necessary attainments to qualify for the degrees, diplomas and other honours, and regulating the nature and functioning of constituent or affiliated institutions.  It also implies the freedom of research, of collecting and arranging data and presenting the same along with findings deduced therefrom, on any problem considered as worthy of investigation. It also involves the freedom of the teacher to teach the prescribed courses of studies in his own manner, on the basis of free access to all material with a bearing, direct or remote, on his work and in doing so, the freedom to comment on issues, events, personalities or controversies in a manner he considers necessary for enhancing the understanding and appreciation of the subject.  It is also essential that a teacher as a citizen must be free to participate in the social, political and cultural life of the community provided that such participation does not affect adversely the discharge of the duties and responsibilities of his function as a teacher. And in respect of the latter, the verdict of his academic and administrative supervisors, and not the *prima facie* views of an external authority, ought to be the decisive factor. ***Also read: **[An inefficient entrepreneur deserves to be branded as anti-social: Arvind Narottam Lalbhai](https://theprint.in/opinion/indian-liberals-matter/inefficient-entrepreneur-anti-social-arvind-narottam-lalbhai/2926117/)* Given the level of our development along democratic lines, it is natural that the problem of academic freedom should arise in our country in a form different from that elsewhere. We have a formal democratic constitution but hardly any deep-rooted democratic sentiments or traditions. Our institutions of higher education do not have their autonomy threatened; by and large, they have still to win it. On the other hand, the continual characterisation of the existent system as built up essentially for producing suitable personnel to man the administrative machinery of an alien rule has promoted a crass utilitarian attitude towards education, further rendered vulgar through growing skepticism about its usefulness.  The system has thus come to be dominated by curriculum, the teachers preoccupied with texts and the students, with their degree-mindedness, concerned solely with the examinations. Though improving when viewed against the background of the past, our educational standards compare unfavourably with many other countries of the world. Thus a peculiarity of our educational situation is the simultaneous appearance of the problem of widening the freedom of our universities and other institutions of higher education and ensuring an improvement in their functional efficiency and standards. And with the passage of time, growing numbers and the resultant overcrowding in institutions, or issues like that of the medium of instruction may be expected to aggravate these problems. Two distinct points of view seem to be gradually crystallising regarding the basic issue. One is the view that improvements in functional efficiency and standards of education are not possible in the absence of an external control, exercised directly by or under the supervision of the political authority; and the other is the view of those who argue that widening of the freedom of educational institutions is an essential pre-condition for improving their functioning and the educational standards. The former finds an expression in the policies of the governments, the latter in the report of the University Education Commission and the views of the Inter-University Board, individual universities and educationists. A choice between the two approaches is inescapable. It is not necessary, however, that the protagonists of the two aforementioned views must come in clash with each other. Given the realisation, on one side, that state control of education making it subservient to ends considered by politicians as desirable is the very negation of a democratic outlook, and the recognition, on the other, that the autonomy of educational institutions cannot be absolute, any possibility of such a clash can be easily ruled out. And a common ground between the conflicting approaches can be discovered on which solutions consistent with the promotion of the freedom and autonomy of educational institutions can be tried on the practical level with a view to improving the standards of education. External control can only pave the way to regimentation. It can lead to standardisation and not to an improvement of standards. It will substitute a dull lifeless uniformity for the enriching variety available at present. Instead of trying to impose such control, the state should, while devising suitable methods of co-ordination and safeguards against any irretrievable deterioration, recognise and respect the autonomy of institutions of higher education.  An intensive functioning of the Inter-University Board can be depended upon for solving the problem of coordination; the power of the State to lay down the constitution of the universities is, on the other hand, one significant safeguard against deterioration in their functioning; and a University Grants Commission along the lines recommended by the University Education Commission can be another. There is hardly any reason why the autonomy of the universities should not be recognised in such a setting by those concerned with the promotion of the democratic life and institutions. To refuse to do so is not merely to harm the present but also to undermine all healthy possibilities for the future. It would not be desirable to be scared away by the argument that the universities have hitherto shown numerous defects and deficiencies in their functioning, and if left to themselves, may deteriorate further. It is true that abuse of freedom is potentially involved in freedom itself. But there is no better guarantee against the possibility of such abuse than a sense of responsibility and discrimination which freedom alone can produce. It is therefore desirable to create an atmosphere in which the inner correctives of our university life will be able to emerge and influence the situation. That alone will create the basis of a sound and stable improvement. Our universities need not be looked upon as our despair; they are, on the other hand, one of the few hopes we have for the future of a free society in India. *This essay is part of a series from the [Indian Liberals archive](https://indianliberals.in), a project of the [Centre for Civil Society](https://ccs.in). This essay is excerpted from the booklet Freedom First with the title “On Academic Freedom”, which was published in March 1953. The original version can be accessed [here](https://indianliberals.in/wp-content/uploads/2026/05/FF010_compressed.pdf).* --- ## [ThePrint] Henry George’s Single Tax offers a democratic alternative to communist remedies: DM Kulkarni URL: https://indianliberals.in/theprint-mirror/henry-george-single-tax-land-value-taxation/ ### Body _Mirrored from [ThePrint](https://theprint.in/opinion/indian-liberals-matter/henry-george-single-tax-land-value-taxation/2809653/) on 2026-05-16. Originally published 2025-12-20. Author retains all rights; the canonical version on ThePrint should be cited. This mirror exists for AI-agent readability — search engines are asked not to index it (canonical SEO weight stays with ThePrint)._ # Henry George’s Single Tax offers a democratic alternative to communist remedies: DM Kulkarni The ideals of individual Liberty and Freedom, long cherished by mankind, are being constantly challenged today by the Communist totalitarianism. All freedom loving people of the world are therefore greatly exercised over finding out the best means and ways of combating this menace to modern civilisation. The great American Economist and thinker, Henry George, (1839 -1897) was one of those great minds that applied themselves to this serious problem. The remedy that he suggested in his epoch-making book “PROGRESS & POVERTY (1879)” has come to be known as “Single Tax” and his followers now call themselves “Single Taxers”. **In tune with the moral law****** It is generally agreed that communism and its mild variety [of] socialism thrive well in a society in which extreme poverty of the many prevails side by side with the great affluence of the few. So all leading democratic countries of the world have evolved elaborate and complicated systems of taxing the rich heavily for the benefit of the poor. But this method, as experience has shown, has its own serious defects. The special tax on the rich, can be evaded in more ways than one, or a large portion of it can be passed on to the poor consumers, who are made to pay higher prices of goods they purchase in the market. The worst part of it is, that it dries up the springs of industry and enterprise. Henry George, therefore, did not favour it. After mature thought and study, his acute mind lighted upon an effective method of taxation which would at once remove the appalling poverty of the workers, without obstructing the smooth running of the wheels of modern industry and also would supply the modern governments with necessary funds to discharge their public functions. The reform that he proposed was “to appropriate rent by taxation and to abolish all taxation save that upon rental values.” (“PROGRESS & POVERTY” Book V, Chapter II) In this reform, Henry George saw perfect harmony between the moral, law and the economic law. The amazing phenomenon of persistence of poverty in the midst of plenty, resulting from modern industry, led him to infer that “in the social organisation, moral law has been defied and the natural rights of man have been ignored.” (H. George—’Social Problems’ Chapter—’Rights of Man’). In this view, social institutions, in order to have a healthy growth, must conform to the great absolute moral laws. He implicitly believed in the malienable human rights of “Life, Liberty and the pursuit of Happiness”, as set forth in the American Declaration of Independence, and heartily agreed with the diagnosis of social evils made in the Declaration of Rights of the French National Assembly (1789), that “ignorance, neglect or Contempt of Human Rights are the sole causes of public misfortunes and corruptions of Government”. He held that these equal rights of all to life and liberty were flagrantly violated by denying to man the right to the free and equal use of land, which was as much of nature’s bounty as sunshine and air. A few land-owners monopolised all land and unjustly took rent from the tenants for its use and thus deprived the producers of their full share in the produce of their labour. This rent was a social value attached to the land, created by the presence of the community and its social and economic activities. Rents rose high with the growth of the population. Therefore, this social value should properly go to the community and the State would be perfectly justified in assessing a tax on land, equal to its annual rental value, and using it for the benefit of the community. Thus alone would the equal rights of the people to the equal use of the land, basically essential for the pursuit of life and happiness, be fully assured and protected. This rent, according to this theory, did not include the consideration paid by the people to owners for the use of the buildings, industrial structures raised and other improvements made by the owners on the land with their capital and labour. So improvements and such other forms of wealth were to be exempted from taxation, since they constituted the private property of the individuals in the real sense of the term, on which the State could lay no claim. This “Single Tax” was to be assessed on all lands whether used or kept out of use by landowners, out of speculative considerations, since what was to be taxed really, was not merely the actual rent yielded by the land but also the potential rental value of every land in use or out of use. ### **The benefits of ‘Single Tax’ ****** The immediate beneficial effect of this tax would be to reduce the sale prices of land to nominal ones. Landowners would no longer find it profitable to keep for themselves idle lands, since they would have to pay taxes for them equally with the rest. So lands would be available to the farmers and industrialists on easy terms. New industries would spring up; production would rise to great heights and wealth would increase by leaps and bounds. The element of rent, having been largely eliminated from the prices of commodities, the cost of living would go down considerably. Workers would be in a position to employ themselves on easily accessible lands. They would no more be compelled to sell their labour for a minimum wage. Hence, competition would not be one-sided among the labourers only, but employers also would be competing with one another for getting good and efficient labour. This would tend to increase workers’ wages, bring about a fair distribution of wealth, and normalise the relations between capital and labour. Consequently, the intervention in such matters, of the Trade Unions which Henry George called “Trade Trusts” would become outmoded and unnecessary.  Industrial prosperity, thus induced in a natural way, would stop the periodic paroxysms of booms and slumps overtaking trade and industry. Industrial stability and full employment at home, would pave the way for international free-trade and consequently for international peace, amity and goodwill. Moreover, Georgians claim that this “Single Tax”, if properly assessed on land values or annual rentals, would provide ample funds even to modern governments for carrying out their manifold duties. ### **His confession of faith****** After the publication of “PROGRESS & POVERTY”, Henry George came in for a good deal of criticism at the hands of Herbert Spencer and others, that he was no better than a Communist, out for nationalisation of land. In a spirited rejoinder to such criticism, Henry George succinctly and precisely made his confession of faith in the following words : “I have never been a land nationalist. I have never advocated taking of land by the State or the holding of the land by the State, further than needed for public use. From my first word on the subject, I have advocated what has come to be widely known as the ‘Single Tax’, i.e raising of public revenues by taxation which, as far as possible, and as far as practicable, should be made to absorb economic rent, and take the place of all other taxes. I have been an active, consistent and absolute free-trader and an opponent of all schemes that would limit the freedom of the individual. I have opposed every proposition to help the poor at the expense of the rich. I always insisted that no man should be taxed because of his wealth and that no matter how many millions a man might rightfully get, society should leave him every penny of them.” (Henry George in “THE PERPLEXED PHILOSOPHER” page 66). He did not detest capital. It was to him the ‘hand-maid’ of labour. He did not set a ceiling on wealth as our Indian Government and our socialist friends are seeking to do. In fact, he denounced communism as “robbery that would bring destruction.” Nor did he base his system on charity or “Dan” as we call it in India. This reform rested solely on human rights and moral justice. He was not opposed to the accumulation of riches. He wrote “I would not have it dinned into his (rich man’s) ears that it is his duty to help the poor. What he does with his wealth is his own business.” (‘Social Problems’). Our ‘Bhoodan’ and trusteeship faddists, who are never tired of sermonising to the rich and the well-to-do that they should hold their wealth and property in trust for the poor, may well ponder over these wise words of a great economist, moralist and humanitarian. His means of achieving the ends were legislation, persuasion and education of public opinion and appealing to the sense of duty which was “more potent for social improvement than the idea of self-interest, that in sympathy is a stronger social force than selfishness.” Therefore the communist methods of appealing to the narrow and selfish class interests and of violent class conflict had no use for him. ### **The great law of progress****** A close study of ancient civilisations of Rome and other countries enabled him to discover the important law of progress which he expressed in the telling phrase “Association in Equality”. It meant humanity progressed through mutual association among men and this association could be effective only among equals. Inequality bred fruitless struggles and conflicts and frittered away the creative energies of people needed for the building of a healthy society. This law, he held, explained the growth and decay of all civilisations ancient and modern, “all diversities, all advances, all halts and retrogressions.” (“PROGRESS & POVERTY” Book VI Chapter III). ### **Radical cure for a deep-seated malady****** Georgians look upon ‘Single Tax Reform’ as the most natural and radical cure for the disease of the poverty of the masses. Communist remedies, in their opinion, are at most palliatives and may in the end, do more harm than good. This reform movement is gaining influence in all industrialised democratic countries of the world like America, Australia, Denmark, Canada, New Zealand and South Africa, especially in consequence of the ever increasing burden of taxation on the people in the aftermath of the Second Great War. There are, according to ‘Encyclopaedia America’, a million ‘Single Taxers’ throughout the world today. India, too with her traditional respect for ‘Dharma’ that is to say the Moral Law, which is also the central core of Henry George’s teachings, will find in the ‘Single Tax’ much that is useful and instructive in her present endeavour to end poverty and to catch up industrially and materially with the progressive nations of the world. *This essay is part of a series from the [Indian Liberals](https://indianliberals.in) archive, a project of the [Centre for Civil Society](https://ccs.in). This essay is excerpted from the journal “The Indian Libertarian”, published in January 1960. The original version can be accessed [here](https://indianliberals.in/the-indian-libertarian/the-indian-libertarian-jan-1971-2.pdf).* --- ## [ThePrint] No constitutional provision deserves repeal more than the one imposing Hindi: P Kodanda Rao URL: https://indianliberals.in/theprint-mirror/hindi-imposition-constitution/ ### Body _Mirrored from [ThePrint](https://theprint.in/opinion/indian-liberals-matter/hindi-imposition-constitution/2799636/) on 2026-05-16. Originally published 2025-12-06. Author retains all rights; the canonical version on ThePrint should be cited. This mirror exists for AI-agent readability — search engines are asked not to index it (canonical SEO weight stays with ThePrint)._ # No constitutional provision deserves repeal more than the one imposing Hindi: P Kodanda Rao Mr. C. Rajagopalachari lamented that 1965 was a “mournful new year for the South.” The Dravida Munetra Kazhagam cursed January 26 as the “day of mourning” because on that day Hindi replaced English as the official language of the Government of India according to the terms of the Constitution. On the other hand, the champions of Hindi hail the occasion as the day of deliverance from English. And they invoke the Indian Constitution, which unlike the American Constitution—which it follows in some other respects—provided for an official language for the Government of India, and named Hindi for it. They claim for the Indian Constitution, and for Hindi for an integral part of it, the high moral sanctity and legal finality accorded to the American Constitution by the Americans. But the comparison is not on all fours. The Indian Constitution has, no doubt, the same legal authority as the American, but it has not the same ‘moral sanctity’ because of several major differences in evolution. For one thing, the American Constitutional Convention, which was called into existence by the American people after they had, by their unilateral action, declared independence. On the other hand, the Indian Constitution was enacted by the Indian Constituent Assembly, or Consembly for short, which was created by the British Government before it conceded Dominion status to India. Unlike its American counterpart, the Indian Consembly was based on communal electorates and was conducted on party lines and acted both as a body to enact the Constitution and as Parliament to enact laws. The Indian National Congress acted as a political party with a majority in the Consembly, met separately and privately, took decisions, invoked party discipline, and secured the enactment of its decisions. As a consequence, the Consembly was more a legislature than a Consembly. These, among other deviations and departures from the proprieties, denied to the Indian Consembly and the Indian Constitution the moral authority which their American counterparts rightly command. **Casting vote****** The moral sanction for Hindi is very much less than for the Constitution. At the critical meeting of the Congress party, Hindi secured a majority of one vote at a second ballot! And that was the casting vote of the chairman, who in violation of all proprieties and well-established conventions, gave it in favour of “Change” to Hindi instead of the status quo ante, that was English. The proceedings of the meetings of the party were private and have not been published. But Dr. B. R. Ambedkar, then the chairman of the Drafting Committee of the Consembly, had access to the private meetings. In his book, Thoughts On Linguistic States, he said : “There was no article which proved more controversial than Article 115 which dealt with the (Hindi) question. No article produced more opposition. No article more heat. After prolonged discussion: when the question was put, the vote was 77 against 77. The tie could not be resolved. After a long time, the question was put to the meeting once more, the result was 77 against 78 for Hindi. Hindi won its Place as a national language by one vote.” **Bitter conflict****** The sharp differences of opinion were voiced in the open meetings of the Consembly almost from its beginning. Some members like Seth Govind Das insisted that Hindi should first be declared as the “national” language of India, and that the Constitution should be drafted, discussed and passed in that language. As there was strong opposition to it, discussion on the official language was postponed till September 12, 1948, the fag end of the Consembly, in the hope of securing an agreed solution. In the meanwhile the draft Constitution in English was discussed and passed. The article to adopt Hindi as the official language of the Union was moved by Mr. N. Gopalaswami Iyengar. The fact that he was from Madras has been exploited to assert that non-Hindi members welcomed Hindi. If this had been the case, there would not have been the prolonged and bitter conflict in the Congress party itself, and there should have been no occasion to vote on it. Mr. Gopalaswami Iyengar’s speech in proposing Hindi as the official language was not of an enthusiastic supporter, as it would have been the case if Seth Govind Das had moved it. Said Mr Iyengar: I for one did not easily reach the conclusion that was arrived at the end of the discussion because it involved our bidding goodbye to a language on which, I think, we built and achieved our freedom. Though I accepted the conclusion at the end that the language should be given up in due course and in its place we should substitute a language of this country, it was not without a pang that I agreed to this decision.” As chairman of the Drafting Committee, Dr. Ambedkar should have moved the proposition. In pressurising Mr. Iyengar to do so, the Hindi champions resorted to an astute diplomatic maneuver or a mean and cruel trick. But their success was marred by the public confession of Mr. Iyengar of his real feelings and his efforts to salvage English for as long as possible. The speeches of Mr. T. A. Ramalingam Chettiar and other non-Hindi members were more bitterly against Hindi than friendly to it. They resented the chauvinism of the Hindi champions so much so that Mr. Nehru was driven to admonish the latter. He said : In some of the speeches I have listened to here and elsewhere, there is very much a tone of authoritarianism, very much a tone of Hindi-speaking areas being the centre of things in India, the centre of gravity, and others just the fringes of India. This is not only an incorrect approach, but it is a dangerous one. **Hopes dashed****** Those who reluctantly acquiesced in Hindi as the official language sought comfort in the constitutional provision that English should continue for 15 years after the Constitution was passed, which would give them opportunities for reconsideration of the decision without precipitating an insuperable deadlock immediately. They also hoped that, since the Congress itself was pretty equally divided on the issue, the Congress Government of India would not take advantage of the proviso that Hindi might also be used during the first 15 years of the Constitution. But their hopes were dashed. The Government of India started pushing Hindi almost immediately and steadily and relentlessly. Under power given by the Constitution, Parliament passed an Act in 1963 permitting the use also of English for another ten years, after which a parliamentary commission would decide its future. Speaking in the Consembly on November 5, 1949, Mr. T. T. Krishnamachari, who is now the Union Finance Minister, said that the English language was no longer hated in South India, that he refused to be compelled to learn Hindi to participate in parliament, and that he would not willingly learn Hindi because of the constraint put on him. To this day he has not spoken in Hindi in Parliament. He warned that “Hindi imperialism” would mean the “enslavement” of the non-Hindi people, and pointed to the movement in South India for separation because of Hindi imperialism.” He ended by saying that it was for the Hindi champions to decide whether India would remain as a single unit, or suffer partition. “If we are left out, well, we will only curse our luck and hope for better times to come.” He hoped in vain. He has not so far publicly recanted his dreadful apprehensions. Whether he does or not, he never said anything truer than when he asserted that Hindi ‘imperialism’ would lead to the enslavement of India. No article in the Constitution is less worthy of respect and more worthy of repeal. Hindi has the same moral value as Shylock’s bond. *This essay is part of a series from the [Indian Liberals](https://indianliberals.in) archive, a project of the [Centre for Civil Society](https://ccs.in). The following excerpt is from the Indian Libertarian Journal, published on 24 March 1988. The original version can be accessed [here](https://indianliberals.in/the-indian-libertarian/the-indian-libertarian-jan-1971.pdf).* --- ## [ThePrint] Hitlerite vegetarianism is not virtue. India’s food debates need more science, less sentiment URL: https://indianliberals.in/theprint-mirror/hitlerite-vegetarianism-india-food-science-sentiment/ ### Body _Mirrored from [ThePrint](https://theprint.in/opinion/indian-liberals-matter/hitlerite-vegetarianism-india-food-science-sentiment/2766589/) on 2026-05-16. Originally published 2025-10-18. Author retains all rights; the canonical version on ThePrint should be cited. This mirror exists for AI-agent readability — search engines are asked not to index it (canonical SEO weight stays with ThePrint)._ # Hitlerite vegetarianism is not virtue. India’s food debates need more science, less sentiment In a country like India where pure milk and cheap vegetables are not easily available in sufficient quantities, any campaign against meat-eating is not desirable. In Delhi, pure milk is sold at the rate of As. 12 a seer. Nothing to say about the views of Jawaharlal Nehru, in whose opinion milk is not a “must*”* maintaining normal health. While addressing Congress MPs recently in the Capital, the Prime Minister quoted a Chinese scientist as having attributed the resistance of the Chinese people to diseases to their avoiding milk. In these circumstances man again finds himself between the devil and the deep sea. What to eat and what to avoid seems to be the most pricking question which does not appear to have been solved as yet. ### **Pills of happiness****** Much has been said against non-vegetarian foods. Dr. Rajendra Prasad, President of the Indian Republic, says vegetarianism can save humanity from the devastations of the nuclear weapons. Madame Clarence Gasque, President, World Vegetarian Congress, charges meat for causing cancer and other diseases to the Americans. Her advice to the Indian people is, “If you do not want diseases from the West to come to you, do not change your vegetarian food habits.” Good words and a nice suggestion indeed. But what about the bad effects of the “Pills of Happiness” widely used by the people of America to get relief from mental worries and nervous tensions. It is quite possible that the mounting number of diseases in the U.S.A. may be due to her present social, political and environmental conditions which are quite different from ours. To say that man by nature is vegetarian is baseless and misguiding. Primitive man lived by hunting, and man by nature is violent, which is why wars have not yet ended. The way of living of the various tribes in India and other parts of the world is enough to support this view. ### **Hitler was a vegetarian****** Moreover, one may also agree with the argument of Hakim Abdul Hameed of Delhi, who has discussed the subject of vegetarianism in the editorial columns of his fortnightly news-magazine “Hamdard”, an organ of the indigenous systems of medicine. While quoting three staunch vegetarians from Cabel to Hitler and Godse, Hakim Hameed asks in his editorial, “Is it possible to popularise vegetarianism without studying the various aspects of man’s life such as his physiological system, individual temperament, geographical conditions, economic problems, social environment etc.?” Cabel, the eldest vegetarian son of Adam, killed his non-vegetarian brother Abel in a love affair. Hitler, the staunch vegetarian of his time, and whose cook also used to be a vegetarian, launched the Second World War. And vegetarian Godse assassinated vegetarian Mahatma Gandhi. “Suppose if the philosophy of the vegetarians is accepted in its present form, various new animal problems will arise along with the present food difficulties of the human beings,” Hakim Abdul Hameed adds in his article under reference. Of the ten basic rules of Buddhism, the first is “I accept the precept to refrain from harming living beings”. But there are historical evidences that it did not involve complete vegetarianism, though it came to do so in many Buddhist communities. A monk might eat meat if the animal providing it was not specially killed for his benefit. When a Chinese traveller Fa-hsien visited India in the 5th century he reported that no respectable person ate meat the consumption of which was confined to low castes. The growth of vegetarianism in India was of course linked with the doctrine of non-violence, which was already old at the time of Fa-hsien. ### **Meat-eating and drinking not against Indian tradition****** But the Arthashastra accepts meat-eating as quite normal and lays down rules for the management of slaughter-houses and the maintenance of the purity of meat. Medical texts even of ancient India go so far as to recommend the use of both meat and alcohol in moderation and do not forbid the eating of beef. It is doubtful if complete vegetarianism has ever been universal in any part of India. With the prohibition of meat-eating some religious texts included that of eating garlic and onions. But the Russian scientists have developed a science of “Onionology” for the treatment of the decayed gums and other diseases of the mouth and stomach. For such a controversial subject like vegetarianism, it will be very difficult to determine the category of fish and eggs. Because fish has life, it has bones, sinews and blood. To eat fish one has to catch and kill it. And also, an egg is intended to be a chicken and those who eat it, do really eat chickens in the embryo. It is an act of infanticide. If you leave eating fish and egg, you are deprived of two most potent foods. Eighty per cent of an egg is said to be protein. Fish provides you with Vitamins A and D. And it has been declared by some American scientists recently that cod-liver oil is specific for T.B. ### **Vegetarianism — a fad****** Furthermore, animal protein is generally accepted to be more valuable than vegetable protein for growth because the creation of new tissues requires abundant supplies of essential amino acids, which are more readily available and in appropriate quantities and groupings in the animal product. The truth is that much depends upon the appropriate mixing of animal and vegetable proteins. Investigations have shown that milk and eggs, alone of the animal protein foods, exceed in value the mixed proteins found in normal dietaries. And if man is unfortunately persuaded to avoid non-vegetarian foods like fish, eggs, meat etc. nature knows better what will happen to him. *This essay is part of a series from the [Indian Liberals archive](https://indianliberals.in), a project of the [Centre for Civil Society](https://ccs.in). It is taken from The Indian Libertarian journal, with the essay originally titled: “Hitlerite Vegetarianism,” published on 1 January 1953. The original version can be accessed [here](https://indianliberals.in/the-indian-libertarian/the-indian-libertarian-jan1-1958.pdf).* --- ## [ThePrint] India’s labour policy left it unable to compete with other eastern economies: Nani A Palkhivala URL: https://indianliberals.in/theprint-mirror/india-labour-policy-competition-eastern-economies-nani-a-palkhivala/ ### Body _Mirrored from [ThePrint](https://theprint.in/opinion/indian-liberals-matter/india-labour-policy-competition-eastern-economies-nani-a-palkhivala/2789818/) on 2026-05-16. Originally published 2025-11-22. Author retains all rights; the canonical version on ThePrint should be cited. This mirror exists for AI-agent readability — search engines are asked not to index it (canonical SEO weight stays with ThePrint)._ # India’s labour policy left it unable to compete with other eastern economies: Nani A Palkhivala I now come to the main theme of my talk — the necessity for making Indian industry globally competitive. The first necessity is to spread education more widely among our people. Today, India is competing, with only half its manpower, with the rest of the world, — since half of the Indian population is literally illiterate. We must make education the priority of priorities. The real resource of any country today is knowledge. Instead of capitalists and the working class, we are today having knowledge workers and service workers. Even in America, the Morgans, the Rockefellers and the Carnegies have been replaced by professional managers. Today, the well established pension funds increasingly control the supply and allocation of money in developed countries. These funds own in the USA half of the capital of the country’s largest businesses. The pension funds are run by a new breed of “capitalists” — the faceless and anonymous employees who run the pension funds, and investment analysts and portfolio managers. As Peter Drucker observed, we are living in a new era which is both non-socialist and post-capitalist.  Investing in education is to the 1990s what nationalization was to the 1940s and privatization was to the 1980s — the universal panacea of the day. All thinkers are agreed that in our times human capital is the most precious form of capital there is. The skill and calibre of corporate manpower can never appear in any balance sheet; but it is widely acknowledged throughout the world that the greatest resource of a company is trained manpower. In a book published recently by the famous economist, Julian Simon, the human resource is rightly defined in the title of the book as “The Ultimate Resource”. Among the nations of the world, India ranks very high in innate intelligence, but abysmally low in wisdom — what the ancient* rishis* called *buddhi*. This is both the cause and the effect of our total indifference towards education. The criminalization of politics and the deplorably low moral tone of our public life are the direct consequences of the failure to impart value-based education. When Indians are better educated, they will know how to behave better as workers and to discharge with greater responsibility their duties as citizens. Liberty without accountability is the freedom of the fool. Our concept of freedom will remain an impoverished one, until it is rounded and deepened by liberal education. Education is the rock on which India must build her political salvation. Our country will be built not with bricks but with brains; not with cement but with enlightenment. If we cannot afford education, we cannot afford to remain a civilized society. Secondly, we must privatize the public sector undertakings. Privatization means that the majority of shares should be allowed to go into public hands, while the government may only retain a minority interest. British Airways was privatized, and the standard of service improved beyond recognition. The Government of India has never understood that half-hearted reforms yield only half-baked results. There are hundreds of public sector enterprises run by the Union government, and more than three times that number are run by the State governments. These public sector enterprises are the black holes, the money guzzlers, and they have been extracting an exorbitant price for our past doctrinaire socialism. India’s public sector earns a return of barely two per cent on the capital employed. The British government is toying with the idea of privatizing even Air Traffic Control. In India, there is no political will to privatize any of the industries which are today in the public sector. The utmost the government is willing to do is to offer a minority shareholding in public sector enterprises to private parties, which means that control and management would continue to be in the hands of the government. The products and services offered by the public sector undertakings, — e.g. the coal mined by the Coal Corporation of India — are excessively expensive, with the result that many of the inputs in Indian industry are proportionately costlier than they should be. The inevitable result is that some of our end products are uncompetitive in the world markets. Thirdly, the quality of service rendered by the public sector undertakings is pathetic, if not hopeless. India has vast infrastructural gaps. It has to add 100,000 mw of power capacity in the next ten years. It has to upgrade, both quantitatively and qualitatively, telecommunications network. Take our telephone service which still continues to be the monopoly of the Union government. The Indian telephone service is undoubtedly the most inefficient in any important country of the world. But it has now reached a degree of inefficiency and corruption which is almost unbelievable. Quite often, you have to dial the required number half a dozen times before you get a connection, and dead telephones and wrong connections are the rule rather than the exception. The most serious fraud is committed in those cases where an outsider bribes telephone employees to illegally divert to himself a telephone line and makes calls for which the bill goes to the registered owner of the telephone. On the top of it all, service tax has been imposed upon every telephone call since last July. If there were a World Cup to be awarded to any government which has levied the most impudent and shameless tax, the Indian government would, without question, defeat all its rivals. The tax on telephones is called a service tax. As a matter of fidelity to the English language, I suggest that the service tax on our telephones should be called “disservice tax”. It is a long time since the Indian telephones last rendered any service to the long suffering public. What a dramatic change there would be in the field of telephones if the government monopoly were ended. Competition is the only answer as in other areas of the public sector. ***Also read:**** [Capitalism is the bedrock of all economic progress. Socialism is a parasite: KD Valicha](https://theprint.in/opinion/capitalism-is-the-bedrock-of-all-economic-progress-socialism-is-a-parasite-kd-valicha/2784867/)* Fourthly, strangulating controls have, to a considerable extent, been relaxed. But the top-heavy bureaucracy still continues to function. The Indian governmental machinery has been likened to some prehistoric monster incapable of intelligently controlling itself. The general impression has been that the Indian bureaucracy is the most obdurate and most inflexible the free world has ever known. As I have said before, there is a persistent tendency in India to have too much government and too little administration; too many laws and too little justice; too many public servants and too little public service; too many controls and too little welfare. The licence raj has been dismantled, but the inspector raj still lives on. I am aware that all this is changing but the rest of the world is changing much, much faster. We must stop frittering away our people’s time and energy in inane, unproductive, useless activities. The tax system has reached the point where its tangled mass helps nobody. India’s tax system is a nightmare. To call the Indian Income-tax Act a national disgrace would be to err on the side of under-statement. Even the last four Budgets which changed the fiscal and economic laws beyond recognition, were cluttered with about 600 amendments which serve no purpose other than create work for the legal and accountancy professions. Fifthly, we must drastically change our labour policy. Lee Kuan Yew, the wisest statesman of our times, had a point when he said that the main reason why India has not progressed as fast as the other countries of the East, is that all emphasis is on liberty while there is no regard for dedication and discipline. The Finance Minister had promised an exit policy but no action whatever has been taken in that direction. India will find it impossible to compete with the rest of the world so long as the law forbids even a humane exit policy and prohibits closure of a unit without the government’s permission. Our labour unions live in a thought-free zone. For reasons which are painfully apparent, they are stoutly opposed to the government offering even a minority shareholding to the public in nationalized industries. Sixthly, if there is any one political factor which is bound to impede the forward economic march of India, it is the resurgence of the age-old curse of casteism. History will record that the greatest Himalayan blunder of India in this decade has been to encourage casteism by making rigid reservations for employment under the state in its infinite variety and for admission to educational institutions, on the basis of caste. Ever since Mr. V. P. Singh began to use casteism as a political weapon, India has been paying the highest price any country has ever paid for democracy. Reservations in different States have already resulted in the substandard replacing the standard and the reins of power passing from meritocracy to mediocrity. Unfortunately, the calibre of politicians in India has reached an all-time low and intellectual pygmyism is the order of the day. There is already a scramble among State politicians to vie with one another in prescribing larger reservations. Reservations of the type sought to be made in different States can be allowed to prevail only by scrapping what Chief Justice Mahajan called “our sublime Constitution” and by promulgating a backward Constitution for a backward nation. It would not be too much to say that one of the policy imperatives for creating a globally competitive Indian industry is to change our policy of shortsighted political expediency, adhere to the clear mandate of the Constitution, and prevent the States from pursuing the suicidal policy of casteism. Verily, India has an unusual talent for self-destruction. Lastly, the government must make sure that the fruits of liberalization reach the masses. This is the most important lesson which India has to learn from Mexico. Our inflation must be brought down from 9.9 per cent to a level where it hurts the lower classes less. For instance, the price of food articles has risen as much as 55 per cent since the economic reforms began in July 1991. *This essay is part of a series from the [Indian Liberals archive](https://indianliberals.in)**, a project of the [Centre for Civil Society](https://ccs.in)**. This essay is excerpted  from a booklet published by the Forum of Free Enterprise, based on the 12th TA Pai Memorial Lecture delivered by Nani A Palkhivala on 17 January 1995. **The original version can be accessed [here](https://indianliberals.in/liberals/making-indian-industry-globally-competitive-15-may-1995.pdf).* --- ## [ThePrint] Indian bureaucracy should be given incentives and rewards: MH Mody URL: https://indianliberals.in/theprint-mirror/indian-bureaucracy-incentives-rewards/ ### Body _Mirrored from [ThePrint](https://theprint.in/opinion/indian-liberals-matter/indian-bureaucracy-incentives-rewards/2817020/) on 2026-05-16. Originally published 2026-01-03. Author retains all rights; the canonical version on ThePrint should be cited. This mirror exists for AI-agent readability — search engines are asked not to index it (canonical SEO weight stays with ThePrint)._ # Indian bureaucracy should be given incentives and rewards: MH Mody Bureaucracy, which is the machinery through which a government functions, closely follows the politicians in power. The bureau concept is wide enough to encompass governmentally-run undertakings—such as railways or telecommunications, as well as state sector undertakings—in addition to the administrative machinery that administers the law and order system. Irrespective of the wideness or narrowness of the concept, an underlying relationship can be easily detected between the politicians and the bureaucracy. The politician is dependent on the bureaucracy for its services that are in compliance with his interests. In turn, the bureaucracy is dependent on the politician for its annual grants or budgets. Over a period of time, a relationship of mutual interdependence develops so that the activities of a bureau fosters and at the same time feeds upon the politician. But for the fact that this is a socially destructive activity, one would call this relationship symbiotic. All bureaucratic activities must be subject to what the Americans call “sunset laws”, i.e., any government department must, by a specific statutory provision, have a limited life. Under this provision, on the expiry of the period, which in my view should seldom exceed ten years, its continuance beyond that period would require specific legislative approval and would therefore involve a re-examination of its functions. Consider now the limitations of the bureaucracy. Firstly, the bureaucracy is not subject to any quantitative test of efficiency. Secondly, there are no economic incentives that could motivate a bureau to make the most of a given budget. In short, there is the absence of a measure of performance and the incentive of “profit”. The word “profit” is anathema to a bureaucrat. Indeed, the secular trend in bureaucracies is that they grow in size rapidly irrespective of the relevance or the efficiency of the function they perform. Inevitably, they find a rationale for their existence even if the underlying basis of their creation may have ceased altogether. Even in areas which are considered as appropriate for a modern government to undertake, there is no method by which the cost of delay by a bureaucracy can be quantified. The Indian bureaucracy has much to account for in this area of delay. Many decisions taken are wise, if not actually profound; but the delay to which the decision-making process is subjected is itself self-defeating. A bureaucracy may be very effective in its work but the official rhetoric of a bureau is socialistic. One big advantage of socialism over capitalism is clearly a matter of rhetoric and argumentation rather than performance. It simply appears too self-serving when an individual who has profited greatly from the system says: “My labours also improve the country as a whole”. In a socialist system, all are presumably working directly for the common good. The fact that the elites in most third world socialist countries are uncommonly well rewarded for their labour is frequently overlooked. A perceptive and witty scholar has observed: “Those countries devoted to freedom have done more for equality than those devoted to equality have done for freedom or equality”. The concept of the faceless bureaucrat who self-effacingly carries out orders from above, merely executing but not making policy, and motivated by the noble motive of public interest, is a myth deliberately created by the bureaucracy. Bureaucrats, as has been demonstrated in the last few decades, cannot be considered as economically neutral. They will seek to expand the size of their bureaus since it is universally accepted that the salary and perquisites of office are related directly to the size of the budget which is administered by a bureau. The built-in force for expansion, which inherently exists in a bureaucracy, results in a budget maximising department. Tax payers end up by being no better off than they would be without the provision of a public good or service. All their “net benefits” are squeezed out by the bureaucrats. The implication is that each and every public good or service, whether it is medical services, education, transport or defence, tends to be expanded beyond a tolerable level of efficiency. It would be ideal if a system of incentives and pecuniary rewards is introduced in the bureaucracy. A competitive environment is as healthy for a bureau as it is for industry. Anyone who has worked with bureaucrats will agree that so many of them are admirable and gifted individuals. They must surely be capable of better performances in their task than we actually get from them. Is there a place for a counter-bureaucracy, such as that represented by the Ombudsman? Or a separate and competing bureaucracy under the administrative and financial control of parliamentary committees to counter balance the force of the executive’s bureaucracy? Other likely solutions would be competition between bureaus, altering the reward system for bureaucrats, payments being made on results or on economy in use of resources, turning over the production of certain goods and services to private firms for a price, e.g. education, sewage disposal or waste disposal, hospital services. *This essay is part of a series from the [Indian Liberals archive](https://indianliberals.in))**, a project of the [Centre for Civil Society](https://ccs.in))**. This essay is excerpted from a journal published by the Forum of Free Enterprise, based on an address delivered by M. H. Mody to an international seminar at Goa in December 1980. The original version can be read [here](https://indianliberals.in/forum-of-free-enterprise/the-new-class-in-a-state-dominated-economy-by-mh-moody-1980.pdf).* --- ## [ThePrint] Indian welfarists destroyed right to property by guaranteeing rights to life, liberty URL: https://indianliberals.in/theprint-mirror/indian-welfarists-right-property-life-liberty/ ### Body _Mirrored from [ThePrint](https://theprint.in/opinion/indian-liberals-matter/indian-welfarists-right-property-life-liberty/2872286/) on 2026-05-16. Originally published 2026-03-07. Author retains all rights; the canonical version on ThePrint should be cited. This mirror exists for AI-agent readability — search engines are asked not to index it (canonical SEO weight stays with ThePrint)._ # Indian welfarists destroyed right to property by guaranteeing rights to life, liberty The so-called welfare state is a new phrase for an old theory of government under which planners or Government Officials, as the case may be, assume complete responsibility for the material welfare of the people. The actions of the government in the material sphere naturally affect the other aspects (vital as they are in many cases) of human life. Welfare has to balance the basic ideas that will never be at ease with one another—property vs equality. Each of those incompatible ideas stem out of the implementation of welfarism without regard to the sacrifice of both these ideas, namely, liberty and property. The evolution of human life is consistently the idea of guaranteeing first, a right to life; secondly to liberty; thirdly to property. The Welfarists destroy property by guaranteeing rights to life and liberty. But in the process of securing welfare to the masses, they withhold liberty against the promised guarantee of plenty to the community. The issue is profound because it sticks by man’s conception and feeling of dignity. It is clearly not the duty of government to take a measure of freedom from one person to enhance the freedom of another. The myth of welfarism largely consists in the liberal guarantee of the welfarists to make possible for everyone to be completely free at the same time. The essence of the welfare state which the equalitarians have developed is quite a paradox. The federal units single out special groups for unequal treatment under law—agriculturist, factory workers, consumers—in order to keep the various segments, of the country’s population in rough balance. As the federal units push forward these groups, the centre pulls back others. ### **Practical alternative to welfare state** Welfare is an end by itself and not a means to an end. Welfarists in India, are not only concerned with the attainment of this end, but also advocate drastic policies which, in their opinion, lead to Welfare State. Their suggestions will wither and deaden the average citizen’s sense of participation and partnership in governmental affairs. They forget that this citizen participation is largely responsible in strengthening democracy. The practical alternative to the Welfare State is not something called laissez-faire or rugged individualism, or any of the other hackneyed phrases for capitalism. I am inclined to call the alternative the free economy if—we did not distract the objective connotations which the word ‘Free’ has come to have. In so far as security must be one objective of the good society, the practical alternative to the Welfare State should be of securing a situation wherein welfare devices such as productivity, excellence, creativeness, adventure, dignity, and the chance to take a chance, are effectively guarded and promoted. Such a society relies not on government but on organisation promoted by the people themselves. Thus when people are not restrained to experiment with their own forms of association for mutual aid true welfarism emerges. I am not here figuring a society without a government. Far be from me. The government has a defined role in securing general welfare such as public works, conservation which cannot always be promoted on a large and efficient scale by voluntary private organisations. I would like to emphasise that welfare on a self-reliant basis is not a vague utopian hope but a very practical thing, the realisation of which largely depends on the experimentative spirit of the people, and government on a limited basis. ***Also read:***[* Violent class-war doctrines of Marx became the sole saviour of labour: MA Venkata Rao*](https://theprint.in/opinion/indian-liberals-matter/collectivism-liberty-limited-state-ma-venkata-rao/2866268/) ### **Social prestige at stake** The free economy produces true welfare of the masses, as it adheres firmly to the following two principles: - “Whenever the welfare of a community requires a common action, the unity of that common action must be assured by higher organs of the community.” - “Whenever a task can be satisfactorily achieved by the initiative of the individual and that of small social units, the fulfilment of that task must be left to the initiative of the individual or that of the small social units.” Because the vitality of free society does not come from the gifts of a ruling group at the top. The Welfarists in India want the government to launch Welfare programmes and carry them out in utter disregard to the wishes of the people. A Welfare State grows out of mutual co-operation and spontaneity and not through measures thrust forcibly upon the masses and carried out by mere compulsion or sheer violence. Then democracy disappears and in its place totalitarianism and dictatorship reign supreme. The individual dignity and social prestige are then at stake. We cannot establish a good society simply by a series of uncorrelated measures pushed through by pressure. A good society abhors those welfare measures which involve a denial of personality and an abrogation of responsibility. The welfarism secured in a free economy is bound to last longer since the two ideas of authority and administration of authority are divorced by the allowance of spontaneity in the public life of the country, and reconciled successfully by the preservation of individual dignity and liberty. The anarchy of totalitarianism is bound to come to an end from its own instability and grave lack of logical unity. But once fostered, retreat from totalitarianism is cent per cent impracticable. There is no hope of restoring democracy, of reviving liberty; the destination of totalitarian government being ultimate destruction of liberty and individual dignity. Men intoxicated with power will never voluntarily surrender the power to spend the money of other people in the name of welfare and general well being. Life always has been, and always will be, something of the nature of a race. But there is not much fun in taking part in or in watching a race where in advance the Umpires impose handicaps which will effectively ensure that all the competitors will arrive simultaneously at the winning post. And it is not I, but Alexander Gray, who says so. Now, are you willing to participate in such a race or prefer one in which your ability to run is recognised and rewarded? *This essay is part of a series from the [Indian Liberals](https://indianliberals.in) archive**, a project of the [Centre for Civil Society](https://ccs.in)**. This essay is excerpted from a journal published by “The Indian Libertarian”, published in March 1959. The original version can be accessed on [this link](https://indianliberals.in/the-indian-libertarian/the-indian-libertarian-mar1-1959.pdf)**.* --- ## [ThePrint] From Vedanta, India turned to Nehruvian socialism and buried its liberal roots: Sharad Joshi URL: https://indianliberals.in/theprint-mirror/indian-liberalism-vedanta-nehruvian-socialism/ ### Body _Mirrored from [ThePrint](https://theprint.in/opinion/indian-liberals-matter/indian-liberalism-vedanta-nehruvian-socialism/2732308/) on 2026-05-16. Originally published 2025-08-30. Author retains all rights; the canonical version on ThePrint should be cited. This mirror exists for AI-agent readability — search engines are asked not to index it (canonical SEO weight stays with ThePrint)._ # From Vedanta, India turned to Nehruvian socialism and buried its liberal roots: Sharad Joshi The ancient “Vedanta” tradition was a cradle of liberal tenets. The liberalism of ancient India, however, got suppressed under successive foreign rulers. Even the forces that came along with the freedom movement were all statist in the sense that they all favoured a strong interventionist state and even Gandhi’s anarchism proved to be little more than a scoring point with them. Today, with the fall of the Nehruvian model, there still seems to be little hope for the liberal democrats. With the Government itself resorting to blatantly populist measures, a serious programme of liberalisation would require the restoration of law and order, clearance of the Aegean stables of the judiciary, further pruning of the forest of economic regulations, dismantling of the bureaucracy, restoration of fundamental rights under the constitution and the working out of a reasonable exit policy. **Misconceptions****** Liberalism is far from being the dominant or even the mainstream school of thought in India. Worse still, most consider liberalism as an idea imported from abroad and as being derogatory to national pride. Within the country, the cry goes that liberalism suits the convenience of the affluent and the strong minority and militates against the welfare security net that the weaker masses of the society need so badly. The defunct Nehruvian socialism is being replaced not by the vibrant forces of liberal entrepreneurship but by lumpen chauvinistic and communal jingoism. The liberals, on the other hand, are handicapped under the electoral laws which require that to be eligible for registration and recognition, parties must swear allegiance to socialism and so reaffirm in a specific affidavit before the Election Commission. The situation is serious and fraught with grave consequences. If India goes the wrong way, even temporarily, the cost could be very high and the long-term consequences could well spread to other regions as well. **Seven centuries of liberal eclipse****** Is it true that liberalism is an alien transplant on Indian soil? Liberal writers are partly to be blamed for this mistaken impression. Most of them come from the city-based, English-speaking westernised class of elites. In their writings, they trace the beginnings of liberalism to J. S. Mill and Adam Smith and of Indian liberalism to Dadabhai Naoroji, Gokhale, Ram Mohan Roy, Narmad, Phule, Agarkar, etc. These great masters remained briefly on the centre stage in the early days of British rule between 1860 and 1920, and were swept aside by the tide of nationalist-chauvinist and socialist forces. Liberal writers have left an impression that the pre-British indigenous culture was one of despotic authority tyrannising subjects resigned to their preordained fate. Apart from being untrue, this notion has given rise to a broad feeling that this alien phenomenon is unlikely to take root here. **Cradle of liberal tenets** That does not mean liberalism was unknown to India. In fact, there is reason to believe that ancient India was the cradle of tenets that form the core of modern-day liberalism. The traditional Indian societies were generally pluralistic. The King — *Kshatriya* by caste — was the unquestioned sovereign who was venerated as the very incarnation of Super-God *Vishnu*, but had little to do with the affairs of learning and trade. Rajaji was fond of quoting a Gujarati proverb meaning, “Where the King is trader, his subjects are paupers.” This poly-centrism may not, because of its caste basis, pass modern-day scrutiny; but it constituted, at least in theory, a rare combination of muzzled monarchy and social prestige divorced from both wealth and power. The reality might not have been exactly as rosy as all that, but that such values were cherished at all so early in history is itself remarkable when compared to the situation then prevailing in Europe, China or Japan. The liberalism of ancient Indian society does not appear to have been limited to superficial social and political structures. The ancient *Vedanta* philosophy comes very close to the philosophical assumptions of modern liberalism — the uniqueness of individuals, rejection of absolutism, scepticism of authority, and trust in the efficacy of competition. The ‘Vedanta’ system held the material world to be illusory and rejected all claims of authority by temporal institutions claiming divine contacts. **Plethora of statists****** The British, who unlike the Muslim invaders had a liberal background, established the rule of law and in many ways treated India as a laboratory of model-building.  After the revolt of 1857, they limited their rule to administration and colonial exploitation. Maintenance of the Raj, naturally had overriding priority. Consequently British rule, though soft by colonial standards, was far from being a liberal democracy. The coming of the British gave rise to the grand masters of Indian liberalism, who generally held the view that freedom without equality would be pointless and that a period of probation under the British would help remove the iniquities of Indian society. It would also give birth to a genuine nation of unified people in a new era of freedom. But there were other schools which pandered to popular chauvinistic cravings more effectively. Firstly, there were a number of socio-religious reformist movements which argued that there was nothing basically wrong with Hindu society. Hindus were divided and needed to be forged into unity through community activities. These movements promoted various activities like community or mass prayers on the lines of the Christian prayers and Muslim ‘namaz’. Secondly, there were movements that sought to glorify indigenous traditions and history in order to concretise the idea of a Hindu Nation — yet another attempt to follow the example of the victors. They were ostensibly upholding Hinduism, but in fact jettisoning its precious core. A third force that sprung up was basically a reaction to the attempts of the high-castes to arrogate to themselves the leadership of the entire Hindu people including those castes and communities that were not allowed to enter Hindu temples or to touch Hindu scriptures. To this date, the modern day descendants of this movement are infatuated with the reservation of jobs. **Gandhi – proponent of anarchism****** Gandhi represented a platform much truer to Hindu thought, upholding at the same time ecumenism — the identity of all faiths. The Mahatma worked actively for social reform, propounded a village-based constructive programme for economic advancement and introduced a spiritual dimension in political activity which was to become his hallmark. Truth and non-violence were his creed, and he was opposed to the very idea of a state which could not exist without violence. Gandhi was as close as one can come to the idea of an anarchist society. Faced with the harsh realities of life, he made concessions and compromises in his later years to such an extent that he accepted at one stage the need to nationalise all basic industries. Nevertheless, Gandhism essentially stood for minimal and decenatralised government. **Decline and fall of the Nehruvian model****** The end of the cold war pulled the rug from under the feet of many a tin-pot socialist regime. The Nehruvian socialist edifice had begun to crumble. This ought to gladden the hearts of all freedom-loving people who have suffered for almost half a century under the heels of a moth eaten planning regime which worked, in effect, as crony-capitalism – everything is banned unless you have the necessary contacts. Unfortunately, they find themselves caught between the devil and the deep sea. **Prospects for the liberals?****** Where do the liberals forces stand in all this? Organising liberals is almost a contradiction in terms and, hence, a formidable task in any country. How does one set about organising highly individualistic people opposed to the very idea of authority? Rajaji who had a very high standing among the followers of Gandhi and who became the first Indian Governor-General of Independent India, had correctly foreseen the disaster that Nehru’s license-permit-inspector Raj would produce. He founded the first liberal political party in India, the ‘Swatantra Party’. It started off well but was swept out in the Indira wave after the Bangladesh triumph in 1971. In 1994, an attempt was made to create a new liberal party – ‘Swatantra Bharat’. It polled over a million votes in the state Assembly elections of Maharashtra but secured only two seats in the Assembly. Its chances in the forthcoming parliamentary elections are negligible since it cannot even register itself without dishonestly swearing false allegiance to socialism. A serious Programme of liberalisation will need to restore law and order, to clear the Aegean stables of the judiciary, to cut down the forest of economic regulations, to dismantle bureaucracy, to restore fundamental rights under the constitution and to work out a reasonable exit policy. Such a formidable agenda would require a very strong Government. There is no prospect of this happening in the near or distant future. In fact, very few appear to be interested in a liberal polity. The beneficiaries of the Socialist epoch are trying hard to thwart reforms in every possible way. The political leaders have got used to earning commissions for securing governmental favours. Industrialists think they cannot do without state protection. Employees with their cushy jobs and side incomes want the bureaucracy to expand and are not enthusiastic about privatisation. Mafias control politicians and governments, and would not like to see their underground empires demolished through liberalisation. The only two categories of people who would be interested in liberalisation and globalisation would be the farmers who have suffered hefty negative subsidies and consumers who have been fleeced by the socialist monopolist and have had to pay exorbitant prices for shoddy goods. The prospects are far from bright. **History – Indian liberals’ only ally****** But History has ample evidence that liberty blossoms in the most unexpected of places and at seemingly impossible times. The world is moving towards demolishing walls that have fragmented and distorted the world. India could not remain for long an island of statism. Indian history shows that people believe in minimal decencies and are capable of fighting against tyrants if a Gandhi comes along. An Indian Hitler will have to be exceptionally lucky to survive for any length of time. This much hope ought to be enough for seekers of liberty and equality. *This essay is part of a series from the [Indian Liberals archive](https://theprint.in/indianliberals.in), a project of the [Centre for Civil Society](https://ccs.in/). It is an excerpt from a monograph titled ‘Any Hope for Indian Liberals?’ published by the Liberal Times Magazine in 1995. The original version can be accessed [here](https://indianliberals.in/liberal-times/liberalism-in-south-asia.pdf#page=4-8).* --- ## [ThePrint] An inefficient entrepreneur deserves to be branded as anti-social: Arvind Narottam Lalbhai URL: https://indianliberals.in/theprint-mirror/inefficient-entrepreneur-anti-social-arvind-narottam-lalbhai/ ### Body _Mirrored from [ThePrint](https://theprint.in/opinion/indian-liberals-matter/inefficient-entrepreneur-anti-social-arvind-narottam-lalbhai/2926117/) on 2026-05-16. Originally published 2026-05-09. Author retains all rights; the canonical version on ThePrint should be cited. This mirror exists for AI-agent readability — search engines are asked not to index it (canonical SEO weight stays with ThePrint)._ # An inefficient entrepreneur deserves to be branded as anti-social: Arvind Narottam Lalbhai It is a great misfortune that we are more concerned with symptoms rather than the diseases. We feel self-complacent by treating the symptoms by palliatives. If there is a shortage of sugar, we think more in terms of distribution channels, controls and price fixations. But we do not think in terms of increasing the supply and thereby respecting the law of supply and demand.  We think seriously that controls, price fixation and distribution of commodities through co-operative stores and fair price shops will solve the problem. We do not think in terms of allowing the prices to rise according to the law of supply and demand and thereby induce entrepreneurs to expand their productive capacities or to set up new plants. The thinking in those terms requires the firm determination to enlighten and educate the public that this is the only effective way to hold the level of prices. The determination is not there. During the intervening period, prices are bound to rise. But, that being a passing phase, should not cause unusual concern. If the policy of competitive economy and free markets is allowed to operate, the prices are bound to register a permanent and substantial fall in the long run. We are not prepared to think in terms of shifting emphasis from heavy capital industries to agricultural produce and consumer products industries, nor are we taking effective measures against the rate of population growth, which substantially offsets the rate of economic growth.  What holds good in the matter of holding the level of prices, holds good equally in respect of other fields of economic activities and the fiscal policy pursued by the government.  Instead of being moved by the stark poverty of millions of people in the direction of encouraging higher and higher volume of economic activities, which will ensure higher employment; fall in prices, adequate supply of commodities and even larger amount of taxes, we feel more concerned with the concentration of economic power in the hands of a few individuals and avoidance of monopolistic trends. An unwise policy aimed at mitigating the fear of concentration of economic power in a few hands is pursued; the fear is only imaginary. But in following such a policy, economic development is slowed down. One wonders and feels indignant whether our concept of socialism is one of the distribution of poverty. The concept of monopoly conveys the existence of one or a few large concerns that have acquired such a dominant control over the production of a commodity that they are in a position, if they so desire, to manipulate the supply and price of that commodity in their own interest, with the full awareness that there is a large demand for the same in the country. In such a monopoly, there is no effective competition from other parties and this is the source of the strength of the monopolists. In our country, the monopoly so defined does not really exist. But in fact, a situation similar to that is allowed to persist not because of the entrepreneurs having joined hands for the purpose, but because of the government’s unwise policy of imposing controls in the name of planned economy and avoidance of wastage of scarce resources.  The policy, apart from encouraging, really discourages the growth of a competitive economy, which is the only antidote to monopoly. This gives a very curious picture of self-contradiction that though the Government, on the one hand, is anxious to prevent the growth of monopolistic trends, it pursues a policy which leads to the opposite result. The position becomes still more aggravated when judged in the context of the facts that while the imports are curtailed in advance, in very many cases the targets of production are not hit in time which creates scarcity conditions and provides a sellers’ market. It gives suppliers an opportunity to dictate prices, ultimately leading to inflation. The very fact that such a policy of the government itself creates a sellers’ market does not make the manufacturer think seriously in terms of reducing costs. People in authority have wrong notions about profit. Profit is not being hailed as an index of efficiency but is being condemned as a sin against society by labelling it as profiteering. It is high time that a firm line of demarcation is drawn between profit and profiteering. Profit is not only an index of efficiency but is also a must for the continuance and growth of all economic activities. Profit is a legitimate return on funds employed in the business and a reward for the efforts put in by the managerial personnel. One fails to understand how any economy can ever progress without its entrepreneurs making adequate profits from the economic activities carried on by them.  ***Also read: **[Without free enterprise in economic life, we cannot maintain democracy: Minoo Masani](https://theprint.in/opinion/indian-liberals-matter/free-enterprise-in-economic-life-minoo-masani/2920077/)* The word profiteering needs to be correctly understood and well defined. Simply because certain industrial managements happen to be competent and make more profits compared with others even in the same industry, those who make more profits cannot be labelled as profiteers. If the entrepreneurs join hands either in curtailing production and thereby creating an artificial shortage leading to soaring prices or if they jointly decide not to charge prices below a certain level, and if in this way they make huge profits they can be accused of profiteering. If an entrepreneur happens to be inefficient and does not make any profit, he is not by any means serving society. In fact, he does a greater amount of disservice by not avoiding waste, raising efficiency and reducing costs. Such a level of performance deserves to be branded as anti-social.  Of the latter class, undertakings in the public sector provide overwhelming evidence. Many a time, the workings of the undertakings in the public sector have been analysed by the application of various management accountancy ratios, which really provide a very sad and disappointing reading. In spite of this painful realisation, the government is thinking more and more in terms of setting up undertakings in the public sector. All these ideological obsessions make them forget the fundamental that the super-structure of a socialist pattern of society cannot rest on the mud foundations of waste and inefficiency, but only on the solid foundation of prosperity.  *This essay is part of a series from the Indian Liberals *[*archive*](https://indianliberals.in/)*, a project of the *[*Centre for Civil Society*](https://ccs.in/)*. This essay is an excerpt from a monograph published by the Forum of Free Enterprise titled “Are there monopolies and concentration of economic power in India?” in July 1964. The original version can be accessed on this *[*link*](https://indianliberals.in/forum-of-free-enterprise/are-there-monopolies-and-concentration-of-economic-power-in-india-arvind-narotta-lalbhai-h-venkatasubbiah-july-5-1964.pdf))*.* --- ## [ThePrint] Jawaharlal Nehru opposed idea of SC being final arbiter of compensation: A Ranganathan URL: https://indianliberals.in/theprint-mirror/jawaharlal-nehru-sc-compensation-a-ranganathan/ ### Body _Mirrored from [ThePrint](https://theprint.in/opinion/indian-liberals-matter/jawaharlal-nehru-sc-compensation-a-ranganathan/2907825/) on 2026-05-16. Originally published 2026-04-18. Author retains all rights; the canonical version on ThePrint should be cited. This mirror exists for AI-agent readability — search engines are asked not to index it (canonical SEO weight stays with ThePrint)._ # Jawaharlal Nehru opposed idea of SC being final arbiter of compensation: A Ranganathan Essentially the Indian Constitution,” observed Sir Iver Jennings “is an individualist document. Its prophets are Burke, Mill and Dicey; yet some at least of the members of the Constituent Assembly thought in collectivist terms. The result is a curious dichotomy. On the one hand the individualism of the nineteenth century has sought to limit the powers of the government in the interest of liberty; on the other hand the collectivist trend of the century has sought to expand the powers of government in order that the state may regulate economic life and incidentally restrict liberty.”  And since Indian Independence, there has been a gradual but sustained effort to increase the powers of the executive at the expense of the courts. Indeed, Pandit Nehru had opposed the idea of the Supreme Court being the final arbiter of compensation on the plea that the Supreme Court ought not to make itself a “third House of Parliament”. It is well known that the Due Process Clauses of the Fifth and Fourteenth amendments to the American Constitution constitute a source of reserved power for the judiciary to act as a restraining influence on legislative and executive bodies when they tend to limit the freedom of the individual. While there is no Due Process Clause as such in the Indian Constitution, the Indian judiciary became empowered to regulate property rights in India. The ‘Right to Property’ was originally guaranteed by Article 31 of the Indian Constitution. In the document as drafted in 1950, Article 31(1) read: “No person shall be deprived of his property save by authority of law”. And Article 31(2) read: “No property, movable or immovable, including any interest in, or any company owing any commercial or industrial undertaking, shall be taken possession of or acquired for public purposes under any law authorising the taking of such possession or such acquisition, unless the law provides for compensation for the property taken possession of or acquired and either fixes the amount of compensation or signifies the principles on which and the manner in which the compensation is to be determined and given.” However, on 27 April 1955, an amendment was passed which substituted for Article 31 (2) the following clauses: 31(2) No Property shall be compulsorily acquired or requisitioned save for a public purpose and save by authority of a law which provides for compensation for the property so acquired or requisitioned and either fixes the amount of compensation or specifies the principles on which and the manner in which the compensation is to be determined and given; and no such law shall be called in question in any court on the ground that the compensation provided by the law is not adequate. 31 (2-A) where a law does not provide for the transfer of the ownership or right to possession of any property to the State or to a corporation owned or controlled by the State, it shall not be deemed to provide for the compulsory acquisition or requisitioning of property, notwithstanding that it deprives any person of its property”. The article, as amended, creates a situation of intense uncertainty since we do not have clauses similar to the Due Process Clauses in the American Constitution.  ***Also read: **[Congress was committed to alcohol ban law without being practical: MA Venkata Rao](https://theprint.in/opinion/indian-liberals-matter/congress-alcohol-ban-ma-venkata-rao/2902018/)* Indeed as pointed out by Justice Douglas (in “We the Judges), it is clear that India has broken with one tradition of the law of eminent domain—the 1955 Amendment casts a shadow over every private factory, plant or other individual enterprise in India. The legislature may now appropriate at any price it desires, substantial or nominal.  There is no review of the reasonableness of the amount of compensation. The result can be just compensation or confiscation, dependent wholly on the mood of Parliament”. This new power of fixing the amount of compensation is theoretically vested in Parliament, but in actual practice will have to be delegated to the ruling party and finally administered by the executive officials. The situation is particularly gloomy if viewed in the light of the various measures which have followed in the wake of the ‘Socialistic Pattern of Society’—the Nagpur resolution on Cooperative Farming, Nationalisation of the Insurance, State Tradings, Ceilings on land holdings etc.  It is well to recall that several years ago, Lord Hewart, a distinguished jurist and former Lord Chief Justice of England, pointed to the dangers of what he termed “the new despotism” of those in authority who are allowed to dominate the private sector. This is even more true in a country like India where (as accurately summed up by N Raghunathan in his “Our New- Rulers”) “we have an illiterate public which plausible demagogues promising the millennium out of hand can sway with unpredictable results, a long tradition of docile submission to authority, and what is in reality a one-party State.” In the final analysis, the right to own property is linked with individual freedom. As argued by the liberal historian Prof. Massimo Salvadori, Karl Marx was correct when he said that those who owned property were free and those who did not were unfree, but was wrong when he deduced illogically that greater freedom would be achieved through the abolition of private property.  Actually, it is this concept of individual freedom as explained by thinkers like Locke, Turgot and Jefferson which gives democracy its distinctive profile. The belief of our planners who are perpetually thinking in terms of constitutional encroachments into the domain of the individual can only find its scope in gigantomania by building colossal structures and voicing the usual slogan of production and more production at the expense of urgent consumer needs and dismissing informed criticism as “reactionary or lacking even a grain of intelligence”. It is high time that we halted this remorseless process of divesting the people of their property rights, if we are to preserve the spirit of democracy as distinguished from its outer trappings. *This essay is part of a series from the *[*Indian Liberals archive*](https://indianliberals.in)*, a project of the *[*Centre for Civil Society*](https://ccs.in)*. This essay is excerpted from the journal “The Indian Libertarian”, published on 1 January 1962. The original version can be accessed on this *[*link*](https://indianliberals.in/the-indian-libertarian/the-indian-libertarian-jan1-1962.pdf)*.* --- ## [ThePrint] Like a gambler, govts squandered India’s legacy through mindless socialism: Nani Palkhivala URL: https://indianliberals.in/theprint-mirror/like-a-gambler-govts-squandered-indias-legacy-through-mindless-socialism-nani-palkhivala/ ### Body _Mirrored from [ThePrint](https://theprint.in/opinion/indian-liberals-matter/like-a-gambler-govts-squandered-indias-legacy-through-mindless-socialism-nani-palkhivala/2722087/) on 2026-05-16. Originally published 2025-08-16. Author retains all rights; the canonical version on ThePrint should be cited. This mirror exists for AI-agent readability — search engines are asked not to index it (canonical SEO weight stays with ThePrint)._ # Like a gambler, govts squandered India’s legacy through mindless socialism: Nani Palkhivala At the stroke of midnight on 14th August 1947, Jawaharlal Nehru made his famous speech wherein he referred to India keeping her tryst with destiny and awaking to life and freedom. To review the last three and forty years in an hour is like trying to see the Himalayas at night in one flash of lightning. One thing I promise you — I shall “nothing extenuate, nor set down aught in malice.” I would be dishonouring the memory of Pandit Nehru and of his mentor, Mahatma Gandhi, if I tried to be economical with the truth. The greatest achievement of Indian democracy is that it has survived unfractured for forty-three years. Eight hundred and forty million people — more than the combined population of Africa and South America — live together as one political entity under conditions of freedom. Never before in history, and nowhere else in the world today, has one-sixth of the human race existed as a single free nation. ### **Three inestimable advantages****** In 1950, we started as a Republic with three inestimable advantages. First, we had 5000 years of civilization behind us — a civilization which had reached “the summit of human thought”. The trader’s instinct is innate in Indian genes. An Indian can buy from a jew and sell to a Scot, and yet make a profit! Secondly, whereas before 1858 India was never a united political entity, that year the accident of British rule welded us into one country, one nation; and when independence came, we had been in unified nationality for almost a century under one head of state. Thirdly, our Founding Fathers, after two long years of laborious and painful toil, gave us a Constitution which a former Chief Justice of India rightly described as “sublime.” It was the longest Constitution in the world till, a few years ago, Yugoslavia had the impertinence to adopt a longer Constitution. The right to carry on any occupation, trade or business is again guaranteed right. The concept of “socialism” did not figure anywhere in the Constitution as originally enacted. On the contrary, the Constitution provided for the Directive Principle of State Policy that the State shall endeavour to secure that “the ownership and control of the material resources of the community are so distributed as best to subserve the common good” and that “the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment”. These words rule out State ownership – the Monolithic State – which is the hallmark of communism, euphemistically called socialism. India is the only country in the world where, in the States which are governed by the Communist party, human rights are fully respected — and that is only because the Bill of Rights is firmly entrenched in our national Constitution. We can proudly say that our Constitution gave us a flying start and equipped us adequately to meet the challenges of the future. Unfortunately, over the years we dissipated every advantage we started with, like a compulsive gambler bent upon squandering an invaluable legacy. I am afraid, India today is only a caricature of the noble democracy which Nehru strove to bring to life and freedom in 1947. ***Also read: ***[*Easier to throw off foreign tyranny than tyranny of elected representative: Nani Palkhivala* ](https://theprint.in/opinion/great-speeches/easier-to-throw-off-foreign-tyranny-than-tyranny-of-elected-representative-nani-palkhivala/2452052/) ### **Shells of socialism and state controls****** Successive governments imposed mindless socialism on the nation, which held in thrall the people’s endeavour and enterprise. They respected the shells of socialism — state control and state ownership — while the kernel, the spirit of social justice, was left no chance of coming to life. We shut our eyes to the fact that socialism is to social justice what ritual is to religion and dogma is to truth. The peacock is our national bird, but we could have more appropriately chosen the ostrich! The Economist rightly remarked in January 1987 that socialism as practised in India has been a fraud. Our brand of socialism did not result in transfer of wealth from the rich to the poor but only from the honest rich to the dishonest rich. We built up State-Owned Enterprises — called the public sector in India. The sleeping sickness of socialism is now universally acknowledged, — but not officially in India. No less than 231 public sector enterprises are run by the Union Government, and 636 by the State Governments. These have been the black holes of our economy. There is a tidal wave of privatization sweeping across the world from Bangladesh to Brazil, but it has turned aside in its course and passed India by. The most persistent tendency in India has been to have too much government and too little administration; too many laws and too little justice; too many public servants and too little public service; too many controls and too little welfare. From the very first decade of the republic the steel claws of the permit-licence-quota raj were laid upon the national economy, and even today their grip continues with insignificant relaxation. Today the situation remains unchanged, – only the number of files has increased a thousandfold. Millions of manhours are wasted every day in coping with inane bureaucratic regulations and a torrential spate of amendments. Legal redress is so time-consuming enough to make infinity intelligible. A lawsuit once started in India is the nearest thing to eternal life ever seen on this earth. Close to two million cases are pending in the eighteen High Courts alone, and more than 2,10,000 cases in the Supreme Court for admission or final hearing or miscellaneous relief. History will record that the greatest mistake of the Indian Republic in the first forty years of its existence was to make far less investment in human resources — investment in education, family planning, nutrition and public health — than in brick and mortar, plants and factories. We had quantitative growth without qualitative development. Different parts of India still live in different centuries so far as basic amenities and cultural awareness are concerned. ***Also read: **[Private enterprise didn’t fail in India. JN Tata’s steel dream soared despite British ridicule](https://theprint.in/opinion/indian-liberals-matter/private-enterprise-didnt-fail-in-india-jn-tatas-steel-dream-soared-despite-british-ridicule/2688008/)* ### **Still plagued by three problems****** Small wonder that after forty-three years of independence, we are still plagued by three basic problems — poverty, unemployment, and foreign exchange trade deficit. India has 15 per cent of the world’s population, but only 1.5 per cent of the world’s income. In the four decades since we became a republic, our per capita income in real terms did not even double but increased by only 91 per cent. Today we are still the twenty-first poorest nation on earth. Perceptive observers in foreign countries where Indians work and prosper are baffled by one question — how does India, with its great human potential and natural resources, manage to remain poor? The answer is that we are not poor by nature but poor by policy. You would not be far wrong if you called India the world’s leading expert in the art of perpetuating poverty. Most of our politicians and bureaucrats, untainted by knowledge of development in the outside world, have no desire to search for genes of ideas which deserve to be called “a high-yielding variety of economics.” We are smugly reconciled to low yield from high ideals. India is rattling — and rattling violently — with spare human capacity. More than 30 million are registered on our 840 Employment Exchanges. According to objective estimates, there must be at least 20 million other unemployed who are not registered. In 1950, India ranked sixteenth in the list of exporting countries of the world; today it ranks forty-third. Using another yardstick, in 1950 India had 2.2 per cent of the world export market; today its share stands reduced to 0.45 per cent. ***Also read: **[Free education is mere jugglery of words. A hangover of anti-rational pre-Partition days](https://theprint.in/opinion/indian-liberals-matter/free-education-is-mere-jugglery-of-words-a-hangover-of-anti-rational-pre-partition-days/2665374/)* ### **Hope for the future****** There is no instant solution for our multitudinous problems and the short-term prospect may only be of shadows lengthening across the path, an objective overview would justify confidence in the long-term future of the country. In the affairs of nations, as in the world of elements, winds shift, tides ebb and flow, the ship rocks. Only let the anchor hold. The vitality of India is remarkable. The country does not have a powerful economy, but has all the raw materials to build one. It would not be an exaggeration to say that the Indian economy is a sleeping giant who, if awakened, could make an impact on the global economy. A nation’s worth is not measured merely by its gross national product, any more than an individual’s worth is measured by his bank account. Ambassador John Kenneth Galbraith remarked that while he had seen poverty in many countries of the world, he found one unusual attribute among the poor of India — “There is richness in their poverty.” It is true that eternal vigilance is the price of liberty. But it is true, in an even deeper sense, that eternal responsibility is also part of the price of liberty. Excessive authority, without liberty, is intolerable; but excessive liberty, without authority and without responsibility, soon becomes equally intolerable. De Tocqueville made the profound observation that liberty cannot stand alone but must be paired with a companion virtue: liberty and morality; liberty and law; liberty and justice; liberty and the common good; liberty and civic responsibility. The day will come when the 26 States of India will realize that in a profound sense they are culturally akin, ethnically identical, linguistically knit, and historically related. The greatest task before India today is to acquire a keener sense of national identity, to gain the wisdom to cherish its priceless heritage, and to create a cohesive society with the cement of Indian culture. We shall then celebrate the 15th day of August not as the Day of Independence but as the Day of Inter-dependence — the dependence of the States upon one another, the dependence of our numerous communities upon one another, the dependence of the many castes and clans upon one another — in the sure knowledge that we are one nation. *This essay is part of a series from the [Indian Liberals archive](https://theprint.in/indianliberals.in), a project of the [Centre for Civil Society](https://ccs.in/). It is an excerpt from a monograph titled ‘Forty-three years of Independence’ published by the Forum of Free Enterprise in 1991. The original version can be accessed [here](https://indianliberals.in/forum-of-free-enterprise/forty-three-years-of-independence-by-nani-a-palkhivala-january-18-1991.pdf).* --- ## [ThePrint] Marxism extinguishes democratic rights the moment it captures power: MA Venkata Rao URL: https://indianliberals.in/theprint-mirror/marxism-democratic-rights-ma-venkata-rao/ ### Body _Mirrored from [ThePrint](https://theprint.in/opinion/indian-liberals-matter/marxism-democratic-rights-ma-venkata-rao/2835440/) on 2026-05-16. Originally published 2026-01-24. Author retains all rights; the canonical version on ThePrint should be cited. This mirror exists for AI-agent readability — search engines are asked not to index it (canonical SEO weight stays with ThePrint)._ # Marxism extinguishes democratic rights the moment it captures power: MA Venkata Rao Even today there are too many good citizens in all lands including Western countries like Britain who think of communism in terms of a humanitarian ethical movement for propagating notions of social justice and for quickening the social conscience. And in addition, they think of it on the analogy of democratic parties out to win power through honest propaganda for well-thought-out policies of redistributive justice and economic re-organisation with a view to obtain a better deal for the under-dog. Most fellow travellers are quite innocent of the sinister implications of joining in the communist movement. They are not aware that more than being a simple democratic party, it is primarily a conspiracy to win political power exclusively for itself as a one-party totalitarian dictatorship extinguishing democratic rights the moment power is won! Also, many good people are not aware that the communist party in their midst owes its primary allegiance to international communism by passing loyalty to their own nation and country. They are pledged to obey the dictates of Moscow rather than those of Delhi in India. The only hesitation in the minds of some Indian communists concerns the relative importance of Moscow and Peking in their Authority over them! This attitude of communists is rooted in the theory and practice of Karl Marx himself. It appears that there are some socialists (strange as it may seem to students of the subject acquainted with the fundamental texts of Marx, Lenin, Stalin and the Resolutions of the world Congresses of all Communist Parties led by the Russian Communist Party) who hold that Karl Marx is innocent of all responsibility for the doings of the Russian Revolutionists—Lenin and Stalin and the system they established and are carrying on—(today by Khrushchev.) A letter appearing in The Indian Libertarian of 1st June 1963 over the signature of Mrs Goodman, secretary, Overseas Contacts, The Socialist Standard, London, asserts that the Socialist Party of Great Britain has taken up this position exonerating Marx of all taint of responsibility by doctrine and precept and example for the system established in Russia in 1917 and its operation ever since! It must be conceded that England was led more by evolutionary communism or socialism than by the revolutionary variety which was more prominent in the thought and precept of Karl Marx. British socialists were primarily Fabian socialists who [relied on] gradual, educative methods for introducing socialism through the ballot box. Marx himself admitted once that perhaps in Britain and the United States (as also in Holland), peaceful democratic methods of persuasion might succeed in realising socialism, namely, the liquidation of the capitalist class. But he also held [that] more likely than not, the bourgeoisie will sooner resort to arms to preserve their privileges than surrender them even to the ballot box verdict! Marx was always ambiguous about violence but he made no bones about it. He was not squeamish about its use when necessary for the sake of the revolution. Dr. Karl Popper in his substantial two volume work The Open Society and Its Enemies has expounded the turns and twists of Marx’s teaching on all these points in great detail which leaves no excuse for any innocence or ignorance on the part of fellow travellers to remain blind to the dangers of the Marxist revolutionary ideas. Now, even Mr. Attlee’s Government (socialist in character) proceeded to nationalise a good part of the economy—the commanding heights of the economy as they were called—i.e. road transport, railways, communications by air steel, the Bank of England and a number of other institutions. This policy curtailed personal freedoms to invest capital in accordance with one’s own judgment. The result was a marked degree of inflation, high prices, a decrease in production, a flight of capital from the land to foreign parts, lack of investment in capital goods in sufficient degree and so on. The result is that today the rate of England’s production is lesser than Italy’s and Germany’s! As a contrast, the experiment in free competition conducted boldly in West Germany by Dr [Ludwig] Erhard has registered a remarkable success and has taken that country to the first place among European countries in resurgent economic development and prosperity. Socialist Britain adopted Marxist economics to a significant extent and suffered markedly therefrom. Socialist Russia adopted the same Marxist economy to a fuller extent but any success by way of higher rates of production there is vitiated by unprecedented repression and regimentation, force and intimidation. The difference is one of comparative freedom but the failure of economy stems from the same policy, namely, Marxist centralisation of economy and its identification with political power. Marx was a-moral with regard to violence both as a means to achieve revolution and to maintain socialism after it was achieved. Hence Lenin and Stalin were only carrying out the letter and spirit of the Master’s Word in applying force in day-to-day administration—the reign of terror. The revelations of [Nikita] Khrushchev in 1956 in the Twentieth Congress of Communist Parties of the world in Moscow that shook the communist bloc and shocked the whole world concerned only the brutalities of Stalin with regard to his own official and party subordinates. They did not show any concern for the part of Khrushchev and his friends for the Russian citizen as such—the unknown man, the ordinary communist citizen and his dignity, his rights of person and property; what the free world is accustomed to think of as fundamental rights. If Khrushchev is less terroristic than Stalin, it is only because he does not dare to! His power is not so secure and well-established as Stalin’s was! Stalin’s violence in liquidating millions (for example eight millions of peasants to make cooperative and state farming secure!) is thus only a matter of degree! It does not transcend Marx’s principles. If British democracy behaves differently with greater regard to the sacredness of the human personality, it is more due to the 800 years of British history in which the Britisher and his race have fought his ruling groups to establish his rights as a free man. The British do not owe them to Marx or any socialist of them all. The British socialist experiment during 1945–50 has already produced a reaction and second thoughts even among socialists. The New Fabian Socialist Essays edited by Crossman (a prominent British Labour Party ideologist M.P.) speaks of the new despotism, of the encroachments of the vast bureaucracy that had proliferated during Labour socialist rule. This is the thin end of the wedge which might make room for liberty to leak away in course of time! Socialism has a built-in tendency to damage democracy since it concentrates both political and economic power in the hands of [the] Government—that is, the same party and ruling group! The dispersion of power among different semi-independent or totally independent groups, economic, legal, political, religious, educational, cultural etc. that is such a healthy feature of a free society will vanish in a society ruled by socialism which will become severely monolithic in power and affiliation. Another angle of vision popularised by Marx which is also dangerous to independence of judgment and character is his economic determination of culture or class derivation of truth. In this view of the super-structure of culture as determined by the economic foundation which in turn is determined by the pattern of property ownership in production (relations of production), Marx abandons his rationalist spirit and method and becomes a relativist in his view of truth and science, philosophy and culture. So [the] truth will differ from class to class! That is to say, there is no such thing as objective, universal and necessary truth! If so, there is nothing to choose between Fascism and Communism, Marx and Hitler! Why blame the bourgeoisie if they take to arms to crush the communist gangs? Marx himself gives up the quest for objective truth when he declares that the main thing is to change. history not— understand it. Another tenet of Marx was internationalism. He believed in the internationalism of the proletariat and repudiated nationalism. But there can be different varieties of internationalism. One variety will recognise the nations as a social unit entitled to run its social affairs under a government of its own democratically chosen and democratically conducted. Such democratically conducted national governments of particular national societies small or large can co-operate to establish a world federation with a minimum of Police Powers under a World Court interpreting a World Law confined to international relations. This would leave internal affairs to local autonomy. The present United Nations Organisation would be mended in this direction or ended and a new One erected in its place. Meanwhile nations would proceed by collective security, all nations entering into a pact to rush to the defence of any of their number who may be attacked by any one. But Marx’s internationalism is erected on the abolition of existing national structures and the antagonising of all classes and middle classes not educated, leading classes in all countries. It is based on class war which is a totally unnecessary and false doctrine motivated more by universal hatred engendered by racial memory of the oppression of the Jews by Gentiles (Marx coming of Jewish ancestry). Being founded on class war, any State founded on Marxism is bound to set itself in opposition, bitter and all-out, against all other nations. This is what we find in Soviet Russia and the Communist States adopting her ideology like China. They cannot therefore feel safe until they conquer the whole world! The difference between the different communist states is only about the pace and method and timing of war strategy against the rest of the world. The Communist Party of India is camouflaging its true position as an agent of international communism and of Soviet Powers, Russia and China. It is getting respectability by being recognised as a patriotic and entrusted with negotiating with Communist States! This is the limit. *This essay is part of a series from the [Indian Liberals](https://indianliberals.in) archive, a project of the [Centre for Civil Society](https://ccs.in). It has been excerpted from the journal “The Indian Libertarian”, published on 1 August 1963. The original version can be accessed [here](https://indianliberals.in/the-indian-libertarian/the-indian-libertarian-aug1-1963.pdf).* --- ## [ThePrint] Liberal methods reach social justice faster than socialism: Minoo Masani URL: https://indianliberals.in/theprint-mirror/minoo-masani-liberalism-free-markets-india/ ### Body _Mirrored from [ThePrint](https://theprint.in/opinion/indian-liberals-matter/minoo-masani-liberalism-free-markets-india/2823730/) on 2026-05-16. Originally published 2026-01-10. Author retains all rights; the canonical version on ThePrint should be cited. This mirror exists for AI-agent readability — search engines are asked not to index it (canonical SEO weight stays with ThePrint)._ # Liberal methods reach social justice faster than socialism: Minoo Masani What is liberalism? Liberalism, according to Hobhouse, the great British liberal, in his book on *Liberalism,* which is a classic, is “a belief that society can safely be founded on the self-directing power of personality, that it is only on this foundation that the true community can be built. Liberty then becomes not so much a right of the individual, as a necessity of society.” Prof. Parkinson said in an article recently published in England, “The word Liberal means generous or open-handed. Be generous with what? With freedom and political responsibility.” Now, these are two quite good definitions of liberalism. How do we apply them to the problems of social welfare or social justice with which we are concerned? Their application to the economy means a free economy. What is a free economy? There are many variations of the free economy in different parts of the world, but one thing is common to all of them—the Government plays a limited and restricted part. Liberal economics are the economics of limited government. Social controls and regulation are necessary, but must be restricted to the minimum. That is one aspect. The other aspect of a free economy is that “the consumer must be king”. What does this mean? Who is the consumer? All of us are consumers. We all buy something or other. Therefore, the whole country is made up of consumers. What doe; it mean that the consumer must be king? This means that what is produced in a country should be what the people want, should be something for which the people are prepared to pay a price in the market. The pattern of production must be dictated, not by Government, not by a Planning Commission, not by the diktat of anyone, but by the collective will of the people as expressed in the marketplace. This has been well described as “the ballot of the marketplace”. The ballot of the marketplace is superior to the ballot of the political election. You can shift your choice from hour to hour and day to day. You can buy one brand of soap one day, change over to another brand the next day, if you do not find it good. You can change your perfume, your shoes, your clothes—everything. How does this choice of the small man—it does not matter whether he has ten rupees in his pocket or a thousand rupees—affect the pattern of production? It affects it through the profit motive, through what is called the *law* of the *market*, which is the only sane economic law—the law of supply and demand. The industrialist or the businessman does not produce for fun or for love. He produces for *a* profit. He produces what will get him a profit in the market. Any profit is made when the demand exceeds the supply, because when the demand exceeds the supply, then prices go up. But where the supply exceed; the demand, prices drop. The biggest capitalist has thus to consider what the smallest man in the market wants. This is how the consumer is king and this is what is called a free market economy. This is the liberal economy, as opposed to the socialist. Socialism says that a group of 5 or 10 or 15 people sitting in Moscow or Delhi will dictate to the people what they shall take. This is 100 per cent true in Moscow and 40 per cent true in Delhi. The National Planning Commission, arbitrarily selected, become God. They decide what you shall buy and what you shall not buy, and at what price you shall buy it. The liberal way, on the other hand, is the way of letting people freely decide what shall be produced for their needs. This is a system which is practised in the whole world, except for the communist countries, in different forms. The Manifesto of the Liberal International, which was adopted many years ago, is still valid because liberal principles do not change every five or ten years. Among these principles in the Manifesto, there are certain items of an economic nature: “The right to private ownership of property and the right to embark on individual enterprise; consumers’ free choice, and the opportunity to reap the full benefit of the productivity of the soil and the industry of man. The suppression of economic freedom must lead to the disappearance of political freedom. We oppose such suppression whether brought about by State ownership or control or by private monopolies, cartels and trusts. We admit State ownership only for those undertakings which are beyond the scope of private enterprise, or in which competition no longer plays its part. The welfare of the community must prevail and must be safeguarded from abuse of power by sectional interests.” I think this is a very fair statement of what I have been trying to say. The examples of this kind of a free economy range from the United States, which have achieved the highest standards of life and equality for their people, Britain, the Scandinavian countries, France, West Germany, with its German miracle produced by Dr. Erhard, a great Liberal, Japan, the one country in Asia which has raised its standard of life to the European level, Australia and New Zealand. What are the results? One is prosperity. The buying power of the man in these countries is out of all proportion to what it is in the socialist countries. Here are the figures of how long a worker has to work in America and Russia to obtain the same commodity. It is very interesting. It shows you where labour is exploited, and where it is really free. For a loaf of bread—this was valid last year and could not have changed now very much—the U.S. worker had to work for six minutes. The Soviet worker had to work for 36 minutes to buy the same loaf of bread. For a pound of butter the U.S. worker works 19 minutes, the Soviet worker 3½ hours, a ratio of 10:1. For a pound of sugar, the American worker works for three minutes, the Soviet worker for 54 minutes—18:1. For a man’s cotton shirt, 1¼ hours in the U.S. and 13 hours in the Soviet Union—again 10:1. The same for shoes, 10:1, 11:1 for a suit: 10:1 for women’s shoes: 10:1 for soap,—and 5:1 for vodka. Even the Indian worker, under so-called capitalism, is better off than Russia under socialism, since he does not have to work as long as a Russian worker, to get a pair of shoes or some cloth. I think I have said enough to show that there is no question about the fact that liberal methods lead much faster to the socialist objective than socialist methods. Liberal methods. which are economic freedom or economic democracy, lead to social justice, equality, prosperity and freedom much quicker than the methods of State Capitalism or State-ism, which in France is called *Etatisme*. That is a much more accurate name than socialism, which may mean anything or nothing. It is interesting that most of the world is beginning to see this. The world trend is away from communism and socialism and towards liberal democracy. This is not surprising because, after all, human intelligence wins in the end. Even the Communists are now moving away from socialism. Even in Poland, Hungary and the Soviet Union they are edging away, as fast as they can under a dictatorship, from collectivism or Stat-ism. You have only to read the works of Professor Liebermann who, while protesting that he is a socialist, is trying to get away from the dead hand of the past, which is keeping down the standard of life of the Russian people. It is important that we discard labels and look at the facts behind them pragmatically. An American professor has coined a very good phrase on this point. He has said that in our time all “isms” have become “wasms”. There is a great Liberal in the Philippines, He is Carlos Romulo, who represented his country with great distinction in the UN for many years. Two or three years ago he was nominated President of the University of the Philippines in Manila. A group of “Leftist” or communist students went to him and put to him a question, asking for his declaration of policy. He was asked: “Mr. President, are you going left or right?” Carlos Romulo, a good Liberal, answered: “I am going forward.” *This essay is part of a series from the *[*Indian Liberals*](https://indianliberals.in)* archive, a project of the *[*Centre for Civil Society*](https://ccs.in)*. This essay is excerpted from a booklet (Is Socialism Outdated?) published by the Forum of Free Enterprise, based on an article by Minoo Masani, in March 1966. The original version can be accessed *[*here*](https://indianliberals.in/forum-of-free-enterprise/is-socialism-outdated-n-a-palkhivala-mar10-1966.pdf)*.* --- ## [ThePrint] Socialism doesn’t deliver prosperity or produce equality. Does it give freedom? Of course not URL: https://indianliberals.in/theprint-mirror/minoo-masani-liberalism-vs-socialism-liberal-democracy/ ### Body _Mirrored from [ThePrint](https://theprint.in/opinion/indian-liberals-matter/minoo-masani-liberalism-vs-socialism-liberal-democracy/2702912/) on 2026-05-16. Originally published 2025-07-26. Author retains all rights; the canonical version on ThePrint should be cited. This mirror exists for AI-agent readability — search engines are asked not to index it (canonical SEO weight stays with ThePrint)._ # Socialism doesn’t deliver prosperity or produce equality. Does it give freedom? Of course not There is an idea afoot that liberalism came before socialism and therefore must fade out before socialism. I would like to examine that assumption and, looking fifty or a hundred years ahead, to consider which is more likely to survive, and which is getting outdated today. Our great leader, Mahatma Gandhi, used to say that consistency in political affairs is “the virtue of an ass.” He was himself a very inconsistent person, who moved from position to position as he developed and the world developed. The point I am making is that it would be very stupid for anyone to hold on to a point of view or a dogma, disregarding what is happening around him. Now, Gandhi taught us two things, basically. One was that ends and means are interlinked, that you cannot produce a better society by methods that are not clean and decent, that the end does not justify the means. By the time your means, which are dubious, are practised, your end gets vitiated. In other words, to cite the Soviet Union, by liquidations and butchery, by distortion and lying, you cannot produce a more fraternal society. The other thing Gandhiji taught us was that the State in the 20th century is no longer a great friend of freedom and progress, that perhaps the biggest threat to human freedom comes from the State. This Gandhi repeated a hundred times in different ways, by saying that there is no violence as evil as the violence of the Government. All other violence can be forgiven, understood or controlled, but when the Government becomes violent and dominates and oppresses the people, that is the most foul kind of violence. Socialism does not deliver prosperity. It does not produce equality. Does it give freedom? Of course not. The loss of liberty is the most obvious thing in the socialist countries. Lenin was a great man. He was an idealist gone wrong. He imagined that, after a short period of dictatorship, liberty would be restored by the benign Communist Party to the people. The State would “wither away.” Now, some of us have been waiting patiently for this process to start. There are no signs of it yet, either in the Soviet Union or in any other communist country. The State keeps its monopoly of power very securely in its hands. Now, all this had been foreseen by a very wise Italian philosopher, Benedetto Croce, who said that in any country where there were no “autonomous social forces,” liberty was bound to disappear. By “autonomous social force” he meant people who own their factories, people who own their shops, people who own their land, people who practise independent professions like lawyers, doctors, engineers and accountants. In other words, when everyone is an employee of the Government, you cannot have freedom or democracy because there is no one to oppose or criticize the Government. It is only when a peasant can say: “This land is mine,” that he can stand up to the official. But when you have no peasant proprietors, no businessmen, no free professional people, it becomes a slave State. ***Also read: **[Socialism hinders India’s industrial growth. We need free enterprise first](https://theprint.in/opinion/indian-liberals-matter/socialism-hinders-indias-industrial-growth-we-need-free-enterprise-first/2695489/)* Now, let us consider what has been happening in a semi socialist society like India. We have been practising, or trying to practise, socialist methods for the last 15 years. Is there more prosperity? Are we better off than we were in 1947? The answer is “No.” Living standards have been stagnant since the British left in 1947. Some classes have benefited, some are worse off. The Government admits that the real income of the agricultural labourer, the landless labourer in the village, has gone down in the last fifteen years. He does not take home as much as he could in the old days under the British. The real income of the industrial labourer is more or less stagnant, thanks to dearness allowances. Anyone who knows anything about the middle class knows that its standards have gone down shockingly in the last fifteen years. In fact, the middle class is being ground out of existence today in India. The biggest victim of socialism is the lower middle class, the educated man with a small income, the clerk, the schoolmaster, the shopkeeper. Then, who has benefited? If the middle class, the working class and the landless labourer are all worse off, who has benefited? The answer is a small number of people have benefited. Because we have a mixed economy, we have a mixed “New Class.” They are not all commissars. Some of them are commissars and some are businessmen. What they do is that by means of a controlled so-called socialist economy, where more or less sheltered conditions are created, they share the profit. If I am in power and I give a licence to somebody to produce something with a protected market, he gives me back 10 per cent or 20 per cent of what he makes. So political patronage, operated by dishonest politicians, officials and businessmen, creates a new ring of exploiters which replaces the old system. Equality? Even the advocates of socialism themselves complain that every time a Five Year Plan is put across, it creates more inequalities, for the reason I have just explained. Now I come to the alternative, the Liberal path. If socialism does not serve the purposes for which it was intended, that is, moving towards a freer and more equal society, is liberalism the alternative? What is liberalism? Liberalism, according to Hobhouse, the great British liberal, in his book on Liberalism, which is a classic, is “a belief that society can safely be founded on the self-directing power of personality, that it is only on this foundation that the true community can be built. Liberty then becomes not so much a right of the individual, as a necessity of society.” Professor Parkinson said in an article recently published in England: “The word Liberal means generous or open-handed. Be generous with what? With freedom and political responsibility.” Now, these are two quite good definitions of liberalism. How do we apply them to the problems of social welfare or social justice with which we are concerned? Their application to the economy means a free economy. What is a free economy? There are many variations of the free economy in different parts of the world, but one thing is common to all of them—the Government plays a limited and restricted part. Liberal economics are the economics of limited government. Social controls and regulations are necessary, but must be restricted to the minimum. That is one aspect. The other aspect of a free economy is that “the consumer must be king.” What does this mean? Who is the consumer? All of us are consumers. We all buy something or other. Therefore, the whole country is made up of consumers. What does it mean that the consumer must be king? This means that what is produced in a country should be what the people want, should be something for which the people are prepared to pay a price in the market. The pattern of production must be dictated, not by Government, not by a Planning Commission, not by the dictates of anyone, but by the collective will of the people, as expressed in the market place. This has been well described as “the ballot of the market place.” The ballot of the market place is superior to the ballot of the political election. You can shift your choice from hour to hour and day to day. You can buy one brand of soap one day, change over to another brand the next day, if you do not find it good. You can change your perfume, your shoes, your clothes—everything. How does this choice of the small man—it does not matter whether he has ten rupees in his pocket or a thousand rupees—affect the pattern of production? It affects it through the profit motive, through what is called the law of the market, which is the only sane economic law—the law of supply and demand. The industrialist or the businessman does not produce for fun or for love. He produces for a profit. He produces what will get him a profit in the market. A profit is made when the demand exceeds the supply because when the demand exceeds the supply, then prices go up. But where the supply exceeds the demand, prices drop. The biggest capitalist has thus to consider what the smallest man in the market wants. This is how the consumer is king and this is what is called a free market economy. This is the liberal economy, as opposed to the socialist. What are the results? One is prosperity. The buying power of the man in these countries is out of all proportion to what it is in the socialist countries. Even the Indian worker, under so-called capitalism is better off than Russia under socialism, since he does not have to work as long as a Russian worker, to get a pair of shoes or some cloth. Liberal methods, which are economic freedom or economic democracy, lead to social justice, equality, prosperity and freedom much quicker than the methods of State Capitalism or State-ism, which in France is called Etatisme. That is a much more accurate name than socialism, which may mean anything or nothing. It is interesting that most of the world is beginning to see this. The world trend is away from communism and socialism and towards liberal democracy. This is not surprising because, after all, human intelligence wins in the end. *This essay is part of a series from the *[*Indian Liberals archive*](https://theprint.in/indianliberals.in)*, a project of the *[*Centre for Civil Society*](https://ccs.in/)*. **It is excerpted from Minoo Masani’s essay in the book* Congress Misrule and the Swatantra Alternative*, published in November 1966. The original version can be accessed *[*here*](https://indianliberals.in/liberals/congress-misrule-and-the-swatantra-alternative.pdf#page=201)*.* --- ## [ThePrint] There’s no need for the outdated and ridiculous shroud of secrecy around Budget: Nani Palkhivala URL: https://indianliberals.in/theprint-mirror/nani-palkhivala-poverty-economic-growth-liberalism/ ### Body _Mirrored from [ThePrint](https://theprint.in/opinion/indian-liberals-matter/nani-palkhivala-poverty-economic-growth-liberalism/2829385/) on 2026-05-16. Originally published 2026-01-17. Author retains all rights; the canonical version on ThePrint should be cited. This mirror exists for AI-agent readability — search engines are asked not to index it (canonical SEO weight stays with ThePrint)._ # There’s no need for the outdated and ridiculous shroud of secrecy around Budget: Nani Palkhivala Poverty is cruel, but it is curable. The only known cure is economic rationalism instead of economic theology. In the field of economics the tree of ideology has never borne any fruit. All “isms” are lethal. In a poor country like India, there can never be social justice without economic growth. We have count-less chances for development. Opportunities multiply when they are seized; they die when neglected. We have barely tapped our immeasurable potential for growth. Immense man-power, superb skills and enter-prise are to India what oil is to the Middle East. At least 250 million of our citizens are contributors to the national product. There is one way, and only one way, in which India can banish poverty, and that is by putting to the maximum productive use the 2,000 million man-hours which fleet over India every day, never to come again. To every economic policy and legislation we must apply the acid test—how far will it bend the talent, energy and time of our people to fruitful ends and how far will it dissipate them in coping with legal inanities and a bumbling bureaucracy. “Much to cast down, much to build, much to restore; Let the work not delay, time and the arm not waste; Let the clay be dug from the pit, let the saw cut the stone; Let the fire not be quenched in the forge.” Irrigation has been sadly neglected during the last thirty years. On an average, India receives 3,000 million acrefeet rainfall in a year—sufficient to submerge the entire country in a 45 feet deep layer of water. The total** **area under cultivation was about 422 million acres in 1975-76. Of this area, only about 111 million acres (or 26.3 percent) was provided with irrigational facilities. At the rate of extension of irrigational facilities achieved in the last fifteen years, we shall not be able to bring even half the arable area under irrigation till 2007 A.D. Three-fourths of the total flow of our rivers is waste-fully emptied into the seas. Out of our groundwater resources of an estimated potential of 86 million acres, barely half is being utilized. How much greater would be our agricultural output, with a reduction in prices on account of economies of scale, if irrigation plans were vigorously pursued. In the Fifth Plan only 0.83 percent of the total public sector outlay is earmarked for roads, and even out of this paltry percentage three-fourths is intended to cover those road projects which have spilled over from the Fourth Plan. Few countries of the world are so poor in market roads. Road construction is one of the best ways to generate employment and to stimulate agricultural output by opening up enormous new markets. As regards industry, those laws should be scrapped which obstruct progress and constrict growth without any countervailing public benefit. While direct taxation on individuals has been brought to a reasonable level, the burden of indirect taxes is ridiculously high on many commodities. Out of the price paid for a truck by a consumer as much as 57 percent represents the burden of various indirect taxes levied at different stages. The excise on air conditioners is at the unconscionable level of 100 percent ad valorem on the wholesale price. The excise on cement is as much as 50 percent of the retention price allowed to the manufacturer. The Finance Minister has a great nation-building task ahead of him. An honest and efficient Government should be able to contain inflation and stop anti-social activities like smuggling, without suspending the rule of law. Now that the rule of law has been restored, prompt measures will** **have to be taken to deal with inflation which is raging at 15 percent per annum. An index to the revival of smuggling is provided by the fact that whereas during the last twelve months there was no depreciated rate for the rupee against foreign currencies in the free market, within a week of the election results a black market sprang into existence. For instance, whereas at the beginning of March the Singapore dollar fetched Rs. 3.45 (the official rate) in the free market, now the Singapore dollar quotes at Rs. 4.50. The remittances from Singapore and Malaysia to India through the official banking channels have now dwindled to just a trickle. The country can never prosper or be saved through the efforts of only ministers and civil servants. The people must be associated at all stages with the formulation and implementation of policies. We can have a truly participating democracy for the first time in India. Under the last regime, the Government and the people virtually became two hostile armed camps. Now we can have an exciting joint venture between the Government and the people. There should be no obsession with either the public sector or the private sector. The concept would be that of only one sector- the national sector. Pragmatism is all. The first major economic measure of the Government will be the budget. Millions of man-hours, crammed with intelligence and knowledge, of tax gatherers, tax payers and tax advisers-are utterly wasted every year in grappling with the unmanageable spate of amendments. A stable fiscal policy is to a nation what a stable family life is to an individual. The rates of direct taxes should be fixed in advance for three to five years, as they are in other countries like the U.S.A. and Canada. There is no need for the outdated and ridiculous shroud of secrecy which envelops every budget-except as regards changes in customs and excise rates. Many progressive nations have a free and open public debate on budgetary proposals before the Bill is introduced in the legislature. It would be a historic event if under the present Government the Union Budget ceases to be an annual  11 scourge and partakes of the nature of the presentation of annual accounts of a partnership between the Government and the people.  Every budget contains a cartload of figures in black and white- but the stark figures represent the myriad lights and shades of India’s life, the contrasting tones of poverty and wealth, and of bread so dear, and flesh and blood so cheap, the deep tints of adventure and enterprise and man’s ageless struggle for a brighter morn. The very enormity and variety of the challenges facing the country are such as to touch the least tender to tears and the most incredulous to prayer. Shall we maintain discipline-or shall we witness revival of the barbarous Bandhs when government ceased to govern, mobocracy displaced democracy, and cities were paralyzed by groups of men who regarded themselves as above the law? Shall we increase production, create national wealth and settle industrial disputes in the forums provided by the law-or shall we abuse our regained freedom by nine morchas a day? *This essay is part of a series from the *[*Indian Liberals*](https://indianliberals.in)* archive, a project of the *[*Centre for Civil Society*](https://ccs.in)*. This essay is excerpted from *the journal “*Forum of Free Enterprise,*”* *published on 20 May 1977*. The original version can be accessed *[*here*](https://indianliberals.in/forum-of-free-enterprise/the-tasks-before-a-free-people-n-a-palkhivala-may-20-1977.pdf)*.* --- ## [ThePrint] Planning for the free market, not state control, will lift India out of poverty: BR Shenoy URL: https://indianliberals.in/theprint-mirror/planning-free-market-state-control-india-poverty-br-shenoy/ ### Body _Mirrored from [ThePrint](https://theprint.in/opinion/indian-liberals-matter/planning-free-market-state-control-india-poverty-br-shenoy/2727537/) on 2026-05-16. Originally published 2025-08-23. Author retains all rights; the canonical version on ThePrint should be cited. This mirror exists for AI-agent readability — search engines are asked not to index it (canonical SEO weight stays with ThePrint)._ # Planning for the free market, not state control, will lift India out of poverty: BR Shenoy Professor JK Galbraith has made planning a theme of his weighty pronouncements more than once during his tour round India. At a press conference in Ahmedabad, commenting on the fears expressed in some quarters in India that the present tempo of our planning might lead to an authoritarian regime, he observed that “lack of planning” in underdeveloped economies “carried a greater risk of leading to authoritarian regimes than proper planning”. He utterly ridiculed these fears, saying that “whenever somebody wants to denounce something, he says it is likely to lead to authoritarianism.” In addition to planning, he continued, public ownership, agricultural price support, trade unions and large corporations had been accused, by different sections of the people, at different times, as precursors of authoritarianism. But their cry of “wolf” had proved false alarms. It was safe enough guarantee against this calamity, if the “spirit of democracy is deeply implanted in the mind of peoples and in their institutions”. The logical basis of Prof. Galbraith’s conviction, which is widely shared in India, is simple. A country facing the problem of lifting itself from poverty and of providing a better life for its people would be condemned to frustration without planning. From the “discontent” born of the tyranny of unrelieved poverty, they might fall an easy prey to the promises of Communism. This danger can be averted by a “proper planning of its resources”. It will at once be agreed that the greatest single problem before underdeveloped countries is their abject poverty. Everything hangs on its eradication. Failure to tackle it effectively might engender social and political instability, though the fear in this regard is often unduly overdrawn. The question is whether this central objective — the eradication of poverty — may be best and most speedily achieved through planning as we have seen it in action during the past decade; and as Prof. Galbraith, a devotee of Indian planning, seems to understands the term. The answer centres round the problem of maximising output from our meagre resources. The faster the growth of output, the sooner is poverty liquidated. Any programme for maximising output cannot ignore the prevailing, extremely complex, pattern of production of the Indian economy. Fully 50 per cent of the national product is from agriculture and about 70 per cent of the population lives on it. Agricultural production is in the hands of 67 million independent farmers scattered round the country, the average holding per family being 5.5 acres. Cotton textiles comprise about 38 per cent of industrial production. Textile output ensues from 478 mills, 80,000 to 90,000 powerlooms and 2 million handlooms. The remaining sectors, too, comprise tens of millions of independent production units. Save and except under the Communist steam-roller, this production set-up cannot change overnight, so to speak. Two policy compulsions emerge from this set-up, if we must accelerate output. First, agriculture, textiles and the basic consumer goods industries, which constitute the bulk of productive activity, must receive first claim on productive resources. Secondly, centralised planning—in the sense of state control over the allocation of resources—is not practical, though simpleton administrators might think otherwise. Centralised planning can only produce chaos and retard the hands of progress, when the planners have to deal with tens of millions of production units scattered round a sub-continent. We have violated both policy compulsions in the name of planning. The Public Sector will appropriate, in the Third Plan, 65 per cent of investment resources. The percentage was 57 in the Second Plan. These resources will go to heavy industries, mammoth river valley projects and costly social overheads. Large parts of the remaining resources would also be forced into heavy industries and industries producing intermediate and other non-consumer goods, through exercise of the control over capital issues, import licensing, permits for raw materials, concessions and quotas. This leaves little of the productive resources for use in agriculture and for producing cloth and the other consumer needs of the masses. Resources drawn into heavy industries would add to the national product, but an order of 14 per cent of their value; they would add an order of 36 per cent if employed in consumer goods industries and of 65 per cent if employed in agriculture. The outcome of our developing heavy industries at the expense of consumer goods industries, and of developing both at the expense of agriculture, has been two-fold: Indian national income has risen during the past decade at an annual rate of about 3.5 per cent; and the consumption of food and cloth by the masses has declined, or is semi-stagnant. In the absence of planning-forced diversion of the largest bulk of Plan finance into wasteful projects-productive resources would flow into channels where they yield the highest output, through the usual market mechanism. Two results would ensue from this, simultaneously: first, national income might increase at an annual rate of 8 to 10 per cent; secondly, output of the basic consumer needs of the masses—principally, food and cloth—would go up simultaneously with the national product, as investments in these directions yield the highest returns and as economic activity would now be controlled and directed by the consumer, not by the Planning Commission. This is not to say that, under the free-market system and the sovereignty of the consumer, there is no room for any planning. Orderly progress is inconceivable without planning. In the private sector, then, planning will be done by the millions of individual production units; in the Public Sector, by the state. The Public Sector will be confined to activities which cannot be effectively undertaken by private enterprise, e.g., the provision of an honest rupee, the rule of law, basic transport and communications, standardisation of weights and measures, education and public health. In particular, the state should not stray into trade and industry, or interfere with the distribution of productive resources. To do so would be to upset the planning of millions of production units, to the detriment of the national product and social justice, causing untold human suffering in the Indian context of extreme poverty. Thus, the “discontent”, and possible explosion, which must ensue from the pursuit of the prevailing economic and social policies, carries the very “risks of authoritarianism”, which Prof. Galbraith thinks we would avert through the so-called “proper planning of our resources”. These risks cannot be averted with greater certainty than through planning for the free market under the banner of consumer sovereignty. Planning for the free market has yielded blinding economic and social dividends wherever it has been given a chance. In the post-war world, it produced the first miracle in West Germany. It then spread, with as good or better results, to the other EEC countries, Israel, Japan, Hong Kong, Spain and, latterly, the Philippines. The eagerness of UK to join the EEC, even risking severance from its political kith and kin, is evidence of the vitality of the new movement. News of this powerful reaction away from statism has not reached New Delhi yet; nor the Indian universities generally, where economists still fondly cherish outmoded dirigiste doctrines, fancying them to be tenets of the nuclear era. The Galbraiths, Millikans, Rostows and Wards, not to mention the pronounced left-wingers like the Baloghs, Bettelheims, Langes and Robinsons—all sincere theorists and hot favourites of our Government–through their expositions, probably stand in the way of our properly appreciating the tremendous potentialities of planning for the free market under the aegis of consumer sovereignty. The illicit beneficiaries of planning, now the power behind the throne, who, too, are champions of mass prosperity, are another great hurdle to be overcome. But neither economic nor social salvation is possible except through policies of economic and social freedom. The task before the policy reformer is indeed overwhelming. The situation provokes the prayer: “Good Lord, protect me from my friend; against mine enemies I can defend myself.” *This essay is part of a series from the [Indian Liberals archive](https://theprint.in/indianliberals.in), a project of the [Centre for Civil Society](https://ccs.in/). It is taken from the economic supplement of The Indian Libertarian and titled ‘Consumer Sovereignty Leads To Rapid Economic Development’, published on 15 January 1963. The original version can be accessed [here](https://indianliberals.in/the-indian-libertarian/the-indian-libertarian-jan15-1963.pdf#page=11-12).*** --- ## [ThePrint] Planning in India has failed because political factors dominate economic ones: MR Pai URL: https://indianliberals.in/theprint-mirror/planning-in-india-has-failed-because-political-factors-dominate-economic-ones-mr-pai/ ### Body _Mirrored from [ThePrint](https://theprint.in/opinion/indian-liberals-matter/planning-in-india-has-failed-because-political-factors-dominate-economic-ones-mr-pai/2939160/) on 2026-05-27. Originally published 2026-05-23. Author retains all rights; the canonical version on ThePrint should be cited. This mirror exists for AI-agent readability — search engines are asked not to index it (canonical SEO weight stays with ThePrint)._ # Planning in India has failed because political factors dominate economic ones: MR Pai There is no yardstick of efficiency to judge the performance of monopoly services like LIC and Indian Airlines, wrote Mangalore Ranga Pai in 1962. --- ## [ThePrint] Socialist planners aggravated unemployment problem URL: https://indianliberals.in/theprint-mirror/planning-unemployment-india-five-year-plans/ ### Body _Mirrored from [ThePrint](https://theprint.in/opinion/indian-liberals-matter/planning-unemployment-india-five-year-plans/2711035/) on 2026-05-16. Originally published 2025-08-02. Author retains all rights; the canonical version on ThePrint should be cited. This mirror exists for AI-agent readability — search engines are asked not to index it (canonical SEO weight stays with ThePrint)._ # Socialist planners aggravated unemployment problem Our Five-Year Plans are based on certain objectives and one of them is to achieve maximum utilisation of manpower in order to achieve full employment but one must say with regret that employment is not the main objective with our planners with the result that little attention has been paid to the need for maximising employment which has been regarded as the bye-product of economic development. This view can be seen from the following excerpts. At the time of Second Five-Year Plan it was stated by the Planning authorities that “the problem of unemployment especially in an under­developed country like ours can only be solved after a period of intensive development in determining the programme for the next five years the prime consideration is that at least the deterioration in the unemployment situation should be arrested”. The same view persisted during the Third Five-Year Plan, “Full utilisation of manpower resources can be achieved after a considerable period of development”. From these it is quite clear that the Planners have given a secondary importance to the employment aspect with the result that the backlog of unemployment is increasing from plan to plan. Now the question is whether it is possible and advisable to plan to achieve full employment in the short period, and whether our planners bent upon establishing socialist pattern of society can achieve the same. It is now recognised that the two objectives of achieving maximum rate of economic growth and the attainment of full employment do not go together in the short period of time though they are compatible in the long run. In the words of Shri V. V. Giri, “The primary object of democratic planning in India should be to absorb the surplus work force by so drafting the programme of development as to yield full employment.” The Directives in the Constitution envisage full employment and the right to work and live, but employment is full when everybody who wants to work can find it at established rates of pay. According to W. Beveridge, “Full employment exists only when there are always more vacant jobs than unemployed men. It means that the jobs are at fair wages, of such a kind, and so located that the unemployed men can reasonably be expected to take them; it means, by consequence, that the moral lag between losing one job and finding another will be very short”. It must be remembered here that in normal times 100% of the working population in employment can never exist; a minimum of unemployment is bound to exist but in our country unemployment problem has become a very serious problem next to exchange crisis; it was argued that free capitalist countries failed to achieve full employment and only socialist economy can do the trick but our socialist planners have aggravated the problem by adopting unrealistic fiscal policy. By imposing direct as well as indirect taxes in the name of emergency and development incentives to save and invest have been greatly reduced. Employment cannot be increased without investment. Investment is based on the expectation of profit, which is a sine qua non of economic progress, but our Finance Minister has imposed super profit tax in the last budget so that the private sector will have no incentive to invest and as a consequence of this, employment will tend to fall. The backlog of unemployment at the end of Second Plan in 1961 is reckoned at 9 million. The number of new entrants to the labour force during the Third Plan period (1961-66) will be as many as 17 million. The Planners are expected to provide employment opportunities for about 14 million people. Thus the reserve army of man-power at the end of the Third Plan will be as high as 12 million persons. For this reason, the planners should give priority to the eradication of unemployment once and for all during the Third Plan. The Mahalanobis strategy, in this respect, has miserably failed because it was based on a wrong assumption, namely, that increasing purchasing power through investment in heavy industries in the public sector, and through expenditure on health, education, and social services, and, secondly, a planned supply of consumer goods could meet the increasing demand. The problem of unemployment can be solved. This strategy would have been successful if capital were available in adequate quantity to expand the consumer goods industries when the development and expansion of heavy and basic industries were given top priority in the Second Plan period. The Planning Commission gave more emphasis on cottage and household industries rather than on large-scale consumer goods industries. The problem of unemployment could not be tackled satisfactorily by the Planning Commission due to the absence of the creation of adequate new employment opportunities in large-scale industries producing consumer goods. The problem of unemployment would not have taken a serious turn during the Second Plan period if the planners had curtailed the volume of investment in heavy industries and released capital was utilised for the expansion of employment in the large-scale consumer goods industries. As a consequence of this policy the price level would have come down and the value of rupee would have gone up. During the Second Plan period the prices rose by 6 per cent per annum and this was mainly due to the large dose of deficit financing during the last two years of the Second Plan. In the Third Plan we find that the Planning Commission has not attempted to frame a co-ordinated policy for creating employment opportunities for 26 million persons. The Planning Commission has chalked out a programme for creating employment for 14 million persons, but whether even this can be achieved or not is problematic. The imposition of super profit tax will certainly kill the incentive of the private sector to invest and this will aggravate the problem of unemployment in the Third Plan and the Fourth plan will begin with a backlog of unemployment not less than 15 million persons. The major burden of reducing unemployment lies in raising the level of investment in the economy which is the key factor in increasing employment as well as to increase the tempo of economic development. To achieve this objective, the private sector should be given proper scope to play a vital role in the economic growth of our economy. The present policy based on ideological grounds should be reversed and then alone the twin problems of unemployment and rapid economic growth can be solved. The private sector should not be treated with indifference. Economic growth should not be the monopoly of the public sector alone. Rural as well as urban unemployment can be successfully tackled if labour intensive or capital saving techniques are adopted. This may lead to a slow progress in our planning but that is inevitable. Planning aims at utilisation of available resources in the best possible manner to attain the higher standard of living. Economic growth of a country is as much dependent on the development of its people and the people who are denied employment are the people who are denied the chance of development. In a country like ours with large unemployed and underemployed manpower planning for employment is preferable because employment will bring about an increase in output. Abundant labour supply should be regarded as an asset rather than a liability in the sense that it presents opportunities for augmenting production. Because of this factor, employment planning has a greater significance in a country like India. A suitable strategy for employment planning can be thought out only in regard to the future. In the Third Plan greater attention is paid to growth than to employment. The unemployment problem is bound to become serious and the Fourth and Fifth Five-Year Plans should give top priority to the employment problem. It is estimated that during the Fourth and Fifth Plan, addition to the labour force would be about 23 and 30 million. This reinforces the case for an active population policy. In the Third Plan, the Government has also failed to frame a realistic population policy to control the rate of growth of population. The price policy has failed to keep the rising prices under control. In this respect, one cannot expect that the Government should be able to create employment opportunities for 14 million persons. In this regard, Japanese experience has a good bearing for India. In that country, the absorption of manpower in non-agricultural occupations has shown a very great rise in the inter-war period. This was mainly due to the labour intensiveness of Japanese small-scale units. This policy can be followed in our country by giving small-scale industries, which are employment-creating industries. They will not only create employment opportunities but will also increase the total supply of consumer goods, which is scarce in relation to demand. In these industries, the gestation period is shorter than in the large-scale heavy industries, which are capital intensive. So the problem of unemployment can be eradicated in the next two Five-Year plans if top priority is given to the employment aspect instead of the growth aspect. Economic development and employment must go hand in hand and this can be achieved by adopting a free market economy. The planned economy has failed to solve the problem. West Germany and Japan have shown the way. *This essay is part of a series from the [Indian Liberals archive](https://theprint.in/indianliberals.in), a project of the [Centre for Civil Society](https://ccs.in/). It is taken from the economic supplement of The Indian Libertarian and titled ‘Planning and Employment in India’, published on 15 April 1963. The original version can be accessed [here](https://indianliberals.in/the-indian-libertarian/the-indian-libertarian-apr15-1963.pdf#page=9).* --- ## [ThePrint] Population causes poverty is the devil’s philosophy. It causes prosperity: Sauvik Chakraverti URL: https://indianliberals.in/theprint-mirror/population-poverty-prosperity-sauvik-chakraverti/ ### Body _Mirrored from [ThePrint](https://theprint.in/opinion/indian-liberals-matter/population-poverty-prosperity-sauvik-chakraverti/2779838/) on 2026-05-16. Originally published 2025-11-08. Author retains all rights; the canonical version on ThePrint should be cited. This mirror exists for AI-agent readability — search engines are asked not to index it (canonical SEO weight stays with ThePrint)._ # Population causes poverty is the devil’s philosophy. It causes prosperity: Sauvik Chakraverti Having said that *Homo Economicus* is a machine programmed to generate wealth, it becomes necessary to examine the argument taught in Indian Economics that India’s huge human population is a cause of poverty. If humans are the only species capable of creating wealth, then how can more of their number cause poverty? What is the truth? The truth is that every dot on the map, representing a town or a city, is densely populated with human beings—and is rich. There are more millionaires, cellphones, Mitsubishi Lancers, and swimming pools in crowded Delhi than in vacant Jhoomritalaiya. Why is this so? For the answer, we must turn to Economics, which is the study of the production of wealth. Because we can trade, we specialise in doing what we do best and exchange with others for the things that they do best. Unlike animals, human beings are not self-sufficient. Instead, they tend to find specialised niches in which to work. From these niches they produce goods and services which they exchange in the market economy. Thus you have farmers, fishermen, goatherds, journalists, dentists, washermen and so on. No other species specialises in this manner because they do not have a market economy, which is the result of our special ability to trade. This is how wealth is created. Human beings, being “economic”, should never be advised to be “self-sufficient”. Imagine your plight if you decided to opt out of the exchange of goods and services and had to do everything yourself. Imagine what would happen if your family became “self-sufficient”; and then your village, or your town. This would mean that not only would you be compelled to grow your own food and wash your own clothes, it would also mean that you would have to learn to build your own house and learn surgery. At no level does self-sufficiency improve the lives of those who practice it. All it does is to divert your productive energies from those areas which you are most competent to those where you are relatively unskilled. If it is bad for a person, a family, a village or a town to practice self-sufficiency, surely a great nation like India cannot gain by pursuing such a path. Self-sufficiency is economic suicide. A little experiment can be attempted: Go to a kindergarten class and ask the little children what they want to be when they grow up. They will answer: actor, dancer, policeman, and so on. I’ll bet that not a single little child will say: I want to grow up and be self-sufficient. If it goes against the logic of little children, how could it be logical for the entire nation to practice self-sufficiency? When we specialise in the market economy, a phenomenon occurs which economists call the Division of Labour. Economics is the study of the production of wealth through the division of labour. The division of labour into innumerable specialised roles is best possible in an urban area—denoted by a dot on the map. It is extremely difficult in a rural area where there are very few people, and thus, very little scope for being, for example, a successful dentist or even a *dhobi*. Therefore, every dot on the map (representing a town or city) is densely populated and quite rich. Wherever human beings are densely crowded, as in a city or a town, there is greater prosperity than in any vacant countryside simply because there is greater division of labour. The extent/degree of the division of labour depends on the size of the market. For example, if you wanted to open a Thai restaurant and you needed 100 diners a day to break even; and if one out of every 100 people wanted Thai food on any given day, you would have to set up shop in a town where there are at least 10,000 potential customers. This is why crowded cities are rich: there is greater division of labour. This is a universal phenomenon: Not just Delhi and Bombay, but London, Tokyo, New York, and Paris are densely populated and rich. The world is 50 per cent urbanised today: half the world’s population lives in towns and cities. India is far below the world average at about 30 per cent, but the richest states of India—Gujarat and Maharashtra—report urbanisation levels close to the world’s average of 50 per cent. The poorest states of India, like Assam and Bihar, report urbanisation levels below 10 per cent. It is important to note that the word “civilisation” has its root in the Latin word *civitas*, which means “city”. The story of civilisation is the story of great cities coming up around the Mediterranean and linking up supplying goods and services to each other: the small, safe sea providing the transportational backdrop around which trade could take place. Mohenjo­daro and Harappa were great cities, linked to the Mediterranean through the port of Lothal. *Cities and towns are the anthills of human colonists.* It is futile to pursue “development” while cities face ruin. Across the world, urbanisation causes prosperity by aiding division of labour. Countries like India would therefore be better off pursuing urbanisation as a means to prosperity instead of doing what our government has been doing all these 50 years—spending money uselessly on “rural development.” A recent Arthur Andersen-*Fortune* survey of cities world-wide found Indian cities to be the worst in the world! This is not the way to become a prosperous country. Apart from general misgovernance, one of the prime reasons for the ruination of our urban areas is the undersupply of roads. We shall later discuss this issue in greater detail. For now, let it be understood that there are over 400 names in the STD code-book but most of urban India (62.5 per cent of India’s total urban population by some estimates) is focussed in a handful of huge metros, which are growing every day. Urban geographers, those who study the geography of towns and cities, call this phenomenon primacy. Primacy occurs when the primary city bloats up because it is not properly linked to the surrounding towns. If there had been proper roads, satellite towns would have blossomed, and each of the 400 names in the STD code-book would have become a little Singapore.Justify all the para. The British built many fine cities and countless “hill-stations” in their time. In the last 50 years our urban areas have all been ruined. In British India, the hill-stations were all linked to a metro: the Darjeeling–Shillong belt to Calcutta; the Poona–Mahabaleshwar belt to Bombay; the Ooty–Coonoor belt to Madras; and the Simla–Mussoorie belt to Delhi. With such strong links to urban metropolises, all our urban centres can become like Singapore. Remember Singapore received independence only in 1965. From a dirty little town crowded with coolies and hawkers, it has become a thriving city today. Because of the undersupply of roads there is urban overcrowding in India, but that does not mean the country is “overpopulated.” Travel by train or plane around India and you will see vast open spaces. India’s population density (number of people per square kilometre) is LESS than that of Japan, Germany, Holland, and Belgium. And these countries do not report urban overcrowding. The solution to urban overcrowding lies not in birth control, but in roads that will allow many more towns to come up and link up with the main city. With more urban areas—400 Singapores—Indians will have sufficient living space and overcrowding would end. This argument therefore generates a conflict of visions. Instead of seeing the future of India in terms of thousands of self-governing and self-sufficient village republics (the Gandhi–Nehru vision), we can see India as an urban civilisation. With 400 excellent cities, all well linked to each other by rail, road and air, a maximum of trade can take place at the least cost. A poor transportation network makes trade slow and expensive. A truck travels 250 km a day on Indian highways; they do no more than 600 km a day in the rest of the world! It is said that “every great city sits like a giant spider on its transportation network.” India needs such cities and towns. Since humans alone are economic, and since cities are rich, it must be said that the argument that population causes poverty is the devil’s philosophy. It makes mothers and fathers ashamed of producing children. It makes children feel that they are not a resource, rather, they are a problem. It makes cynics look at traffic accident statistics and say that our unsafe roads are a means of solving “the population problem.” Human beings are the world’s ultimate resource—because they all possess the human mind. You are trying to pour knowledge into that mind. Please make sure that what you feed your mind is the truth. A false philosophy will deaden your mind. It will not make you see that, with your mind and the ability to trade, you can generate wealth by doing what you do best in a free market economy. Instead, it will train you to look upon yourself and your brethren as a huge problem that requires political action to solve. To understand why political interference in the market economy is very harmful to us and our country, let us now turn our attention to the political market. *This essay is part of a series from the [Indian Liberals](https://indianliberals.in) archive, a project of the [Centre for Civil Society](https://ccs.in). This essay is excerpted from Chapter 2 of Sauvik Chakraverti’s book *Free Your Mind: A Beginner’s Guide to Political Economy*, published in 2002. The original version can be accessed [here](https://ccs.in/sites/default/files/2022-08/free_your_mind_1-40_Part1.PDF). * --- ## [ThePrint] Why legal provisions are necessary to curb the power of trade unions: MH Mody URL: https://indianliberals.in/theprint-mirror/power-of-trade-unions-mh-mody/ ### Body _Mirrored from [ThePrint](https://theprint.in/opinion/indian-liberals-matter/power-of-trade-unions-mh-mody/2859967/) on 2026-05-16. Originally published 2026-02-21. Author retains all rights; the canonical version on ThePrint should be cited. This mirror exists for AI-agent readability — search engines are asked not to index it (canonical SEO weight stays with ThePrint)._ # Why legal provisions are necessary to curb the power of trade unions: MH Mody The trade union movement has come to play a very significant role in all the advanced economies of the world. Even where the movement is ruthlessly suppressed, as in communist countries, it still exerts a pressure upon the system to achieve some of its ends. Recent developments in Poland are an illustration of what could happen even in communist countries. The trade union movement in most western countries as well as in India was started to improve the working conditions of the work force. There is no question that they made a very substantial contribution, in the early stages of the movement, to ameliorating the conditions of the working classes and there is scope even now for *bona fide* trade union activities in certain sectors of the economy. But trade union bosses soon came to realise that their power lay not only in their capacity to withhold their labour from the employer. In a modern democracy, they had also acquired the power to influence, if not actually to coerce, the political system. The trade union movement therefore has become a very important and significant part of the political system in most countries, except possibly in America where, in spite of the power which they have, the trade unions have continued to have a healthy distrust of the political system. Employers themselves have contributed not a little to add to the power of the trade unions. This happens where they are engaged in activities which are of a monopolistic or oligopolistic nature, or where the goods are in short supply as in the controlled economies of the developing countries. Employers have in these circumstances not hesitated to arrive at liberal settlements with their trade unions in paying wages and other benefits which are totally out of line with their skills, or comparable levels of salary in other industries. In India, for instance, many employers, in spite of a legal provision to the contrary, have made under various guises settlements involving payment of bonus at rates of 35 to 40 per cent. This they have been able to do because they have felt confident that the increased burden will be passed on to the consumer in the form of higher prices without in any way impairing the profitability of their businesses. We have instances now of large public companies where company drivers appear in the list of persons drawing a remuneration of more than Rs. 3,000 per month and yet there are people who even today pay a salary of Rs 300 per month to the drivers employed by them. By a tacit concurrence, businessmen and trade unions are able to raise the wages of their work forces only at the expense of reducing employment opportunities or at the expense of other workers who receive lower wages. Several economists have felt that collective bargaining will inevitably lead to an increase in both unemployment and the rate of inflation. I think that it is necessary to make suitable legal provisions for curbing the power of the trade unions along the following lines:- (a) Elimination of inter-union rivalry through a provision that only one union will be recognised as a bargaining agent in any manufacturing enterprise. (b) In order that the actual status of the union can be ascertained, a system of union checkoff must be introduced so that union contributions can be collected in a *bona-fide* and voluntary manner. (c) All contracts entered into by a union would be legally binding and the union and its officials would be liable for financial and other penalties for breach of contracts as in the case of any other commercial contract. (d) No strikes can be started except as a result of a strike ballot and with the support of a majority of the work force, whether unionised or not. The collusion between the new class of bureaucrats, politicians, businessmen and trade union bosses perpetuates itself partly because of the short-run benefits and also partly because they see no way out of the system. The average businessman realises that his profits in the existing system are only illusory. They are the profits of inflation. The real worth of his enterprise is not going to sustain him long. The bureaucrat is also aware of the limits to the fiscal capacity of the government, and of the fact that the bureaucracy’s expenditure of government resources does not create my great wealth.  As has been demonstrated in India, the limit of taxation is reached soon enough and there are therefore no additional resources available. Hence the constant complaint of the politician, at least in this country, of a resource constraint. The politician too nurses a fear that if the economy does not grow, it would be prone to internal turbulence as well as external dangers. The trade union bosses know only too well that their action has reduced the growth of employment, and the rapidly growing but unorganised group of rural workers, the self-employed and the workers in the unorganised sector constitute a threat to their cosy system. It is time now that the bureaucrat, the politician, the businessman and the trade union boss shed their cloak of pretence and open up to the real issues that threaten a bleak future. If they begin to be true to themselves and prepare themselves for a workable reform, there should not be any question about their being able to change the system. A vicious system is not amenable to change, without those operating it themselves accepting the need for reform. I feel that the time has now come for this. There.is a slow recognition even in our country that there is a need for a radical reform of the present system. There is, still a lot of groping in the dark about what needs to be done but I personally feel that it is a hopeful sign that there is a recognition of the need for reform. *This essay is part of a series from the [Indian Liberals archive](https://indianliberals.in))**, a project of the [Centre for Civil Society](https://ccs.in))**. This article is excerpted from an essay titled ‘The New Class in a State Dominated Economy’ by MH Mody, published in the journal “Forum of Free Enterprise” in December 1980. The original version can be read [here](https://indianliberals.in/forum-of-free-enterprise/the-new-class-in-a-state-dominated-economy-by-mh-moody-1980.pdf).* --- ## [ThePrint] Prices, like water, will find their own level. Controls breed vested interests: Minoo Masani URL: https://indianliberals.in/theprint-mirror/prices-like-water-will-find-their-own-level-controls-breed-vested-interests-minoo-masani/ ### Body _Mirrored from [ThePrint](https://theprint.in/opinion/indian-liberals-matter/prices-like-water-will-find-their-own-level-controls-breed-vested-interests-minoo-masani/2670255/) on 2026-05-16. Originally published 2025-06-28. Author retains all rights; the canonical version on ThePrint should be cited. This mirror exists for AI-agent readability — search engines are asked not to index it (canonical SEO weight stays with ThePrint)._ # Prices, like water, will find their own level. Controls breed vested interests: Minoo Masani Controls are the main bane of our economy. It is said we should stop prices rising by putting on controls. If I may say so, that is flying in the face of the laws of economics. Nothing can stop prices rising if the supply and demand position warrants it. A British economist has said that to try to stop prices by controls is like a lady going to a surgeon to remove her double chin, and the thing comes out at the back of her neck in a bump! In other words, you treat a symptom, you do not treat the disease. The disease of inflation is due to the policies pursued by the Government. Until these are changed, no controls are going to succeed. Two days ago, I read that the L.K. Jha Committee having failed to stop the rise in prices, the matter will now be referred to a committee at a higher level of Cabinet Ministers, as if the level of the committee decides whether controls would be effective or not! Suppose the Ministers’ committee fails, where are you going any higher? Who is going to form the next committee to stop prices rising if the committee of three Cabinet Ministers fails where Mr Jha and his colleagues have failed? You cannot defeat the law of supply and demand. Prices, like water, will find their own level, and no amount of juggling will stop the laws of hydrodynamics or the laws of economics from having play. And that is why the team of the World Bank which visited India in February or March this year—let me remind the House that the World Bank is our biggest foreign benefactor today, generous, friendly and helpful—singled out for particular castigation Government’s present policies, which in its opinion make for inefficiency and high costs, and controls which hamper industry at every turn. ***Also read:** [For Minoo Masani, Indira Gandhi’s bank nationalisation Bill ‘came in the dark, like a thief’](https://theprint.in/opinion/great-speeches/for-minoo-masani-indira-gandhis-bank-nationalisation-bill-came-in-the-dark-like-a-thief/1942507/)* What is a control? A control is giving an official, even a small one, the power of life and death over a peasant, a shopkeeper or a businessman. Human nature being what it is, is it a matter for surprise that our public life is now riddled with corruption? I am not putting on any cloak of moral superiority. We are all the same under the skin, whatever party we may belong to. But the danger is that, when you combine economic and political power in the same hands, you are creating opportunities for corruption that should not be created. I would not entrust anybody, including my own party, with the unlimited power that you give to the bureaucracy and politicians to exercise controls. I would recognize that human nature being what it is, there must be checks and balances, a division of power. Why do we have a division of power between the judiciary, executive and the legislature? Similarly, we must have a division of authority, political and economic. The day on which you give economic power to those with police power, you have surrendered the liberties of the people, and that is what state capitalism as practised by the present Government means. ***Also read:** [Minoo Masani is India’s forgotten liberal who went against Nehru’s all-pervasive socialism](https://theprint.in/opinion/minoo-masani-is-indias-forgotten-liberal-who-went-against-nehrus-all-pervasive-socialism/836948/)* Controls involve bureaucracy. Let me give you a few findings of the studies made by the Organization and Methods Division of the Government itself. Official files in the Union Ministries increase at an annual rate of three lakhs; 21 lakhs of files are awaiting screening and destruction; 22 to 45 per cent of the working space allotted to the staff on an austerity basis is occupied by undisposed files. In the Central Public Works Department, 18 to 25 months are needed for a proposal to reach the stage of execution. And in that particular Ministry the study cites the case of the Land and Development Office where the allotment of a piece of land involves no less than 370 steps from the beginning till the end. This is the controlled economy. I was very glad that my friend, the Minister for Steel and Heavy Industries, speaking at a seminar in Delhi on August 6, confessed that we are now over-regulated, and he has stated that our framework of detailed control needs alteration, and the multiplicity of points at which they operate needs to be reduced. I am quoting him now: “It is a painful but inexorable fact that today an industrial manager spends more time getting across or around controls than in the task of management.” This is a very laudable discovery, however belated it may be, but the removal of controls is not so easy. The Minister for Steel has already found that out in his very laudable desire or attempt, which has so far failed, to decontrol steel. That is because every control breeds a new vested interest. Vested interests on the business and official side creep up which resist the abolition of the control, and it needs a very stout heart and great guts, like the late Mr Kidwai, to scrap the whole lot and go back from control to decontrol as Mahatma Gandhi advised. *This essay is part of a series from the [Indian Liberals archive](https://indianliberals.in)**, a project of the [Centre for Civil Society](https://ccs.in). This essay first appeared in the book ‘Congress Misrule and the Swatantra Alternative’, published in November 1966. The original version can be accessed on this *[*link.*](https://indianliberals.in/liberals/congress-misrule-and-the-swatantra-alternative.pdf#page=71) --- ## [ThePrint] Private enterprise built India’s industries. Now it’s strangled by Gods in Delhi URL: https://indianliberals.in/theprint-mirror/private-enterprise-built-indias-industries-now-its-strangled-by-gods-in-delhi/ ### Body _Mirrored from [ThePrint](https://theprint.in/opinion/indian-liberals-matter/private-enterprise-built-indias-industries-now-its-strangled-by-gods-in-delhi/2680404/) on 2026-05-16. Originally published 2025-07-05. Author retains all rights; the canonical version on ThePrint should be cited. This mirror exists for AI-agent readability — search engines are asked not to index it (canonical SEO weight stays with ThePrint)._ # Private enterprise built India’s industries. Now it’s strangled by Gods in Delhi It is stated as one of the objectives of planned economy in India that there should be “reduction of inequalities in income and wealth and more even distribution of economic power.” We are told again and again that we should prevent the concentration of economic power in the hands of a few individuals. What do the critics of private enterprise mean to convey? Do they contend that too much power is already concentrated in the hands of private enterprise and it should, therefore, be broken up? Or is it their view that there is the danger of such power being concentrated in the hands of the private sector and all possible steps should, therefore, be taken to stop such concentration? Let us, therefore, examine what has happened hitherto and what is being done now and ascertain where economic power is being concentrated in recent years. It may be argued that individuals acquire economic power (1) by building up industries, (2) by widening their trade activities, (3) by regulating production, (4) by keeping the distribution of important and vital commodities in their hands, (5) by determining the price policy of products which are largely in demand, and (6) by acquiring and building up monopolies in industries, trade and in the distribution of vital products. At the same time, it is admitted on all hands, that if a nation has to develop its economic life, it must have the spirit of enterprise; it must have the private sector. No nation can become prosperous without the existence of a vigorous private sector which plays its vital role in the development of trade, commerce and industry of the country. I, therefore, felt very happy when I heard the Prime Minister telling us recently that he welcomed enterprise in individuals, enterprise to take risks, to climb the Mount Everest. We all realise the hazards, dangers and risks of going to the top of the greatest mountain in the world. I was, therefore, glad to find that here at last was the Prime Minister who appreciates and is anxious to encourage the spirit of enterprise in the private sector. But when I went on reading his speech further, I felt a sense of keen disappointment. After welcoming the spirit of enterprise in individuals in his characteristic manner, I wonder whether the Prime Minister was giving expression to his deep conviction when he added: “Free enterprise means creation of monopoly which prevents others from progressing, unless they come under the shadow of that monopoly.” When such a serious charge is made by the Prime Minister of the country, it is bound to have serious repercussions on the fortunes of private enterprise. The question before us, therefore, is: “Does free enterprise create monopoly?” It is the private enterprise that built up a number of industries during the last few decades. It is responsible for the present position of the textile, the jute, the silk, the rayon, the cement, the sugar, the shipping, the automobile and such other industries. Whichever industry we take, we find that private enterprise has made a remarkable contribution to its development. It had to struggle hard for the establishment of these industries against heavy odds. It had to make heavy sacrifices in putting them on a sound economic basis. No attempt has been made or can be made under such circumstances, to establish monopoly in any of these industrial fields. Whether the monopoly is acquired or not in any industrial field can be determined by the application of two important tests. Can you prevent the entry of a new entrepreneur to run the industry in which you are engaged? Can a single illustration be given to prove that if anybody wanted to start the textile industry or the jute industry, or the sugar mill, etc., he was prevented from doing so? The second test is whether any industrialist created such conditions in any industry as helped him in continuously exploiting the consumers of the products of that industry, or in raising the price of his products to such high levels as would hold the public to ransom. The critics have not adduced any evidence to justify their charge. We must, therefore, discard the theory that enormous economic power was concentrated in the hands of a few individuals before Independence, particularly when we know that some of these industries had actually to struggle for their very existence. I do not, therefore, for one moment believe that free enterprise creates monopoly. On the contrary, competition of free enterprise is the best guarantee against formation of monopolies. Coming to recent times, let us see if any radical change has taken place in the situation. Is such a monopoly being secured by a few individuals since India attained independence? With the enormous powers which the Government has taken to itself for the licensing of industries, for regulating production and distribution, for fixing the prices of commodities and for appointing the managing agents or the managing director of the industries concerned, it is unthinkable that private enterprise can establish monopoly in any industry either by preventing a fresh entrepreneur from coming into his field or by fixing such a price of his products as would lead to the complete exploitation of the consumer. We, therefore, regret we cannot agree with the view of the Prime Minister that free enterprise means the creation of monopoly. With the vigorous manner in which the industrial activities of the individuals and of the joint stock companies are controlled under the various provisions of the Industrial Development and Regulation Act, from pre-birth to after-death, it would not be possible for individuals and companies now to build up monopolies in any industries in which they may have been working. There are a number of controls which are imposed under the different provisions of the Industrial Development and Regulation Act. I do not wish to deal with all the controls which the Government is exercising today. There is one control which, however, merits special attention because it cuts at the very root of the economic power which one might like to acquire. Suppose my friend, Mr. A. D. Shroff, wants to start an industry. Suppose he has acquired the licence to do so and has also obtained the permission to raise the necessary capital from the Controller of Capital Issues. He then invites the public to go in for the shares of the company he may have floated. You and I will run to buy the shares of that industry. The capital may even be oversubscribed. The response of the public to his invitation to subscribe to the shares of his company will show that they have got full confidence in his integrity and ability to run the industry in question. But the crucial question is—and it is a serious “but”—will he be able to run the industry if the Gods at Delhi are not favourably inclined towards him? In spite of the unanimous decision of the shareholders of the company, the Government may not appoint him as the managing director or the managing agent. Who has got the economic power – the industrialist who wants to run the industry or the powers-that-be at Delhi, who accuse private enterprise in season and out of season, that vast economic power is being concentrated in the hands of a few individuals? Let us, therefore, remain under no delusion that private enterprise will come into its own because the Prime Minister wants competition between the public and the private sectors. There can be no competition in a field which is the monopoly of the State. Moreover, even in the fields which are open to private enterprise, the basic and large-scale industries are to be directly developed by the State. No competition worth the name can, therefore, find its place in those industries. Moreover, competition can only be possible and can be carried on healthy lines, if both the sectors are given uniform and encouraging treatment. We have been told repeatedly from the Prime Minister downwards that we are living under democracy. But actual power and responsibility, as remarked by Acharya Vinoba Bhave, has got concentrated in the hands of a very few at the apex. As rightly remarked by him: “Government has power over the entire life of the people. There is hardly a sphere of life which  is absolutely private and personal. This is a dangerous state of affairs.” Both political authority and economic power are being now concentrated more and more in the hands of the ministers and the bureaucracy. Democracy is bound, under such circumstances, to degenerate into dictatorship. Private sector, as remarked by Mr. J.R.D. Tata, is not against “the general objectives of a Welfare State.” If the true values of real democracy are, therefore, to be maintained and if the real salvation of the Indian people is to be attained; the Government will have to radically revise its present policy and will have to create a new atmosphere of hope, confidence and cheer where, as remarked by Mr. Tata, private enterprise will get the fullest encouragement and inspiration “to contribute to the fullest extent to the industrial development of the country and in the process to earn and pay a reasonable return on the monies entrusted to it. It asks no special favour but claims the right to live and serve the country in dignity and in peace and to be afforded some relief from the surfeit of Government control and interference.” *This essay is part of a series from the [Indian Liberals archive](https://indianliberals.in/), a project **of the [Centre for Civil Society](https://ccs.in/). This essay first appeared as a monograph titled “Where is Economic Power Being Concentrated?” published by the Forum of Free Enterprise on 8 August 1960. The original version can be accessed on [this link](https://indianliberals.in/forum-of-free-enterprise/where-is-economic-power-being-concentrated-m-a-masters-august-8-1958.pdf)).* --- ## [ThePrint] Private enterprise didn’t fail in India. JN Tata’s steel dream soared despite British ridicule URL: https://indianliberals.in/theprint-mirror/private-enterprise-didnt-fail-in-india-jn-tatas-steel-dream-soared-despite-british-ridicule/ ### Body _Mirrored from [ThePrint](https://theprint.in/opinion/indian-liberals-matter/private-enterprise-didnt-fail-in-india-jn-tatas-steel-dream-soared-despite-british-ridicule/2688008/) on 2026-05-16. Originally published 2025-07-12. Author retains all rights; the canonical version on ThePrint should be cited. This mirror exists for AI-agent readability — search engines are asked not to index it (canonical SEO weight stays with ThePrint)._ # Private enterprise didn’t fail in India. JN Tata’s steel dream soared despite British ridicule For some time past, Private Enterprise in India has been continuously under fire. It has been suggested that Private Enterprise is incapable of undertaking large-scale and rapid economic development of the country. It is also suggested that Private Enterprise only results in the concentration of economic power in hands of a few people. It is further said that—and it was said only a few days ago by no less a person than the Prime Minister of India in Calcutta—that Private Enterprise and Democracy are incompatible. But the main provocation for the choice of the subject is a speech made by Mr. T. T. Krishnamachari, who was then the Union Minister for Commerce and Industry, at Madurai on 4th of August. In the course of his speech, he observed that “Private Enterprise has failed me”, and that Private Enterprise was not showing either initiative or enterprise. Before I proceed to examine the validity of the various contentions which have led some people to the conclusion that Private Enterprise has failed in this country, I should mention that of all Ministers of Industries since India attained independence, Mr. T. T. Krishnamachari must be acknowledged as an outstanding success. Some of us may differ from him on some of the views he holds and propagates. But I think there is not the slightest doubt that in the discharge of his very high responsibilities as the Minister for Industries, he has shown remarkable drive, energy and understanding of business problems, and above all a capacity for taking quick decisions. It is, therefore, all the more incomprehensible for me that a man of such fine understanding of business and industrial problems and a man who has first-hand opportunities of witnessing from day to day what is being done in the industrial sphere in the last few years, should have preferred to make this charge against Private Enterprise in this country. To quote a Shakespearean phrase, to me it has come as “the most unkindest cut of all”. Before I examine the charge, it is very necessary that I should give you a brief historical review of Private Industry in this country, particularly before India attained Independence. If you look back to the history of Private Enterprise for 60 or 70 years before India attained independence, you must take into consideration the circumstances and the environment under which Private Industry had to struggle. ***Also read:** [India hasn’t done much on privatising PSUs. Unprepared for 21st century: Vajpayee](https://theprint.in/opinion/great-speeches/india-hasnt-done-much-on-privatising-psus-unprepared-for-21st-century-vajpayee/2681093/)* For one thing, we were under a regime, which was quite indifferent and apathetic, if not in some cases definitely antagonistic, to any industrial development in the country. If you for instance study the Tariff Policy of those days, the Transport Policy, or the location of Railway freight, all these will show you the conditions under which Private Enterprise had to struggle. Even in later years, when the Government came to adopt—and that too very grudgingly—a policy of discriminating protection, that policy was too halting and unsuited to bring about any rapid development of industries in the country. In spite of all these limitations and disabilities Private Enterprise was subject to in those days, it was surely through the enterprise and endeavour of Private Enterprise that India was put on the industrial map of the world and attained the eighth place among the industrial nations in the world. To quote one or two instances; the Cotton Textile Industry (remember only about 40 years ago we used to import every year Rs. 60 crores worth of piece-goods from abroad) has now developed substantially in the last few years when we have become a very important exporter of cotton piece-goods to about 40 to 45 different markets in the world. The very fact that Indian piece-goods should effectively compete with shrewd and established exporters from Lancashire and Japan bears ample testimony to the efficiency with which Textile Industry has been built up in this country. I would also like to remind you of the days when the late Mr. J. N. Tata first thought of starting the Steel Industry. I do not know if you are aware that a leading British business man of Calcutta ridiculed the idea as a dream, and he even offered to consume every pound of steel made in India! Fortunately for him, he is not alive today; otherwise he would have suffered not a little from indigestion. But the fact of the matter is that a great pioneering effort succeeded in giving India the largest single individual steel-making unit in the British Commonwealth of Nations, and I believe India will be proud also of the fact that she is today one of the most economic and cheapest producers of steel in the world. Take for instance also the development of hydroelectric power—entirely undertaken by Private Enterprise—a tremendous venture in those days, a venture not only in the sense of generating power but even of making Bombay mill owners believe that power could be generated and supplied to Bombay mills. You know today what it stands for in the economic life of Bombay. The above two or three instances might show what Private Enterprise, functioning under the limitations and disabilities to which it was subject in those days, could achieve. I may also mention Shipping. Shipping in India against the powerfully entrenched foreign shipping companies almost looked like a dream. It was due to the pioneering effort of the late Shri Narottam Morarji and Shri Walchand Hirachand that Indian Shipping has come to stay and offers today very fine promise of supplying a much-needed complementary transport service to sustain our economy. Even before we attained Independence, in 1944, seven businessmen of India got together and put before the people a plan for the economic development of the country. Private Enterprise in India was fully conscious of the needs of the country and also had faith in itself that it could undertake development on a very large and extensive scale. After 1947, the Government started taking more active interest in the economic development of the country. Private Enterprise also did not fail to assist in the process of development. The curve of industrial production during the last five years has been continuously rising. If you take 1946 as the base year, i.e., 100, industrial production went up to 117.2 in 1951, 128.9 in 1952, 135.3 in 1953, 146.6 in 1954, and in 1955 it stood at 161.5. Private Enterprise would have shown perhaps a such better and a more impressive record of achievement, if it had not to work under a certain set of circumstances of which you are all so painfully aware for the last few years. I was on a Committee, which was asked by the Reserve Bank to consider the circumstances under which Private Enterprise was functioning and to explore ways and means of helping Private Enterprise, particularly in the financial sphere. We had a very good opportunity of studying the situation in different parts of the country, and the unanimity of opinion which was represented to the Committee was that Government’s economic policy in the last few years had created an atmosphere of uncertainty in which naturally incentives are likely to be at a low ebb and that capital had been rendered very shy. Nationalisation of the Imperial Bank and recently Nationalisation of life Insurance have dealt further blows to Private Enterprise and have made capital more and more shy. Another subject of topical interest is the publication of a letter addressed by Mr. Eugene Black, Chairman of the World Bank, to our Finance Minister, Mr. T. T. Krishnamachari. The genesis of the letter is this: a few months ago, the World Bank sent out a mission. After surveying the situation and after having very intimate talks with Government officials, Planning Commission and Ministers, it submitted their report to the World Bank. On the basis of this report, Mr. Eugene Black addressed a letter to our Finance Minister, Mr. T. T. Krishnamachari. In the course of that letter, Mr. Black has said: “In making my own comments, I should like first to emphasise once again my conviction that India’s interests lie in giving private enterprise, both Indian and foreign, every encouragement to make its maximum contribution to the development of economy, particularly in the industrial field. While I recognise that the Government itself must play an important role in India’s economic development, I have the distinct impression that potentialities of private enterprise are commonly under-estimated in India and that its operations are subjected to unnecessary restrictions there.” This letter has crested a little flutter in certain dovecots. I do not know on how many occasions we have been told by the highest in the country that distinguished foreigners who are visiting India have been terribly impressed with the progress that this country is making. This is perhaps the first occasion when a friendly critic has dealt with a few things in a very outspoken fashion. I can personally vouch for one thing — that Mr. Eugene Black is a real and sincere friend of India. I have reasons to tell you that he earnestly desires that India should develop economically at a rapid pace. But Mr. Eugene Black also is a man who by his extensive knowledge of conditions in different parts of the world is convinced that there are certain well-proved and well-tried methods of economic development which have resulted in substantial progress in many countries of the world and there is no reason that one could see of a hasty departure from these proved and well-tried methods. I am glad that the views held by some of us are being fully confirmed by the conclusions given by the World Bank Mission in its report. *This essay is part of a series from the [Indian Liberals archive](https://indianliberals.in/), a project of the [Centre for Civil Society](https://ccs.in/). It is excerpted from a monograph published by the Forum of Free Enterprise on 23 October 1956, titled *Has Private Enterprise Failed*. The original version can be accessed [here](https://indianliberals.in/forum-of-free-enterprise/has-private-enterprise-failed-ad-shroff-230ct-1956.pdf).* --- ## [ThePrint] Russian-style socialism dominated Nehru’s imagination. It was disastrous URL: https://indianliberals.in/theprint-mirror/russian-socialism-nehru-imagination/ ### Body _Mirrored from [ThePrint](https://theprint.in/opinion/indian-liberals-matter/russian-socialism-nehru-imagination/2742456/) on 2026-05-16. Originally published 2025-09-13. Author retains all rights; the canonical version on ThePrint should be cited. This mirror exists for AI-agent readability — search engines are asked not to index it (canonical SEO weight stays with ThePrint)._ # Russian-style socialism dominated Nehru’s imagination. It was disastrous Hemingway has a short story set in the Spanish Civil War context in which an old man leaving his town on the approach of rebel armies sits on the outskirts and shows concern, to a questioner (a foreign correspondent) with the fate of his old cat that he was obliged to leave behind than with the tragedy of the people involved in the horrors of the unusually savage civil war! We know that all through the long national liberation movement in India the British could find quite a number of Indian collaborators at the expense of their own countrymen. They did not feel the passion for freedom to any marked extent. They could not imagine how the country could manage without the British to govern them! To the large majority of people everywhere the status quo and the customary round seem to be as much part of nature as the stars, the sun and the moon. They cannot imagine a different state of affairs. **Marxist Gospel** In moral experience we are keenly aware that people have the greatest difficulty in realising in imagination the inward feelings and attitudes of their own neighbours. A great writer has a short story showing how the heads of husband and wife on adjacent pillows entertain widely different thoughts that seem to belong to separate worlds! The great problem of human life is this one of increasing understanding of men of each other’s inward life by means of a more sensitive imagination. Socialist (communist) propaganda takes full advantage of this failing of human beings. It depicts the ideal state of affairs under their Utopia in such a complete fashion that nothing is left to the imagination of those who are carried away by the promises of socialism regarding its new heaven and new earth, regarding its abolition of poverty, its reign of equality, its opportunity for self-realisation for all and so on. No schemes of logical criticism of the economics, psychology and philosophy of communism can have any effect on the believer and the fellow traveller. He comes to believe in the Marxist Gospel as in a new Bible or Koran as an infallible revelation for the scientific age of the present and future. The picture presented by the propaganda of the communist-socialists occupies the imagination of the intelligentsia of the present age, by and large, by reiteration, emphasis and appeal to humanitarianism as the only way of redeeming the under-dog. It benumbs the critical faculties. Moreover, criticism presupposes knowledge of alternatives. The greatest service that philosophy as a systematic science of reflection on ultimate reality and ultimate values renders to civilisation, as pointed out so impressively by Dr. A. N. Whitehead, is the suggestion of alternative vision of society and natural relations or structure. Such alternative ideas release the mind from the stranglehold of custom or dogma, new or old and create an attitude of mind more open and hospitable to new ideas and rival hypotheses. It is therefore necessary to break the spell of socialist dogma on the imagination of fellow travellers and those attracted by its dogma on travellers and those attracted by its Utopia as the only way of progress based on science. This can be done by showing alternatives. ***Also read:**** [State control blocks India’s progress and exploits its people: C Rajagopalachari](https://theprint.in/opinion/indian-liberals-matter/state-control-india-progress-exploitation-c-rajagopalachari/2737203/)* **Failure of imagination** Professor Bauer (specialist in the economy of backward peoples in the University of London) has said after a study of Indian Plans and Policies that the Indian Government seems more interested in realising socialism than in economic development itself! He has recorded his deliberate opinion that in the absence of the elaborate structure of controls and regulations, cribbing, cabinning and confining Indian enterprise in the private field, a faster and more many-sided progress in development would result. That is to say, his special knowledge of economic facts and ideas enabled him to see other alternative possibilities in the Indian scene at present blocked by official programmes and policies and their acceptance as good and inevitable by the public. Even the opposition parties have failed to present sufficiently well-informed and comprehensive schemes of development making for better results without curbing individual initiative, repressing capital formation and freezing investment in the private sector. Another reason for this state of affairs, that is, for the failure of imagination on the part of critics and the general public to visualise their own schemes of development inspired by their own principles, views of social ideals and economic well-being and to present them to the electorate in rivalry to the official policy is their inability to think of alternatives. There was an opportunity before Indian leaders at the advent of independence in August 1947. But unfortunately India had a leader, sold body and soul to socialism at the moment of national self-government. Even before the first Five-Year Plan was launched under the auspices of the Planning Commission in perfect imitation of the Soviets, Parliament was enacting the Industrial Policy Resolution (1949) which laid down the outline of socialist policy reserving the commanding heights of the economy, as the phrase goes (in British Socialist parlance) meaning nationalisation or otherwise taking control of the key industries, transport, insurance, railways, communications, mines, steel and other heavy industries for government ownership and management. The imagination of Shri Jawaharlal Nehru was completely dominated by the socialist programme of centralised economy after the pattern of Soviet Russia. **Slave mentality of Indian leaders** The other members of Parliament had not the imagination to visualise the deleterious consequences for production and liberty, price levels, tax levels, misery depths and so on of such socialism as was realised through the years. They did not think out the rationale of the policies of socialism afresh. They took the European programmes for granted. They betrayed slave mentality in the intellectual and temporal field to an astonishing extent, for which the country is suffering even today. For one thing, the policies have not been reviewed from a rationalist and experiential point of view in the light of Indian conditions. The results of the Plans in terms of actual effects on the economy—prices, taxes, production, redistribution, national income, prosperity all round etc. have not been assessed from an independent point of view even yet. The founding of the Swatantra party is one sign of the awakening on the part of the intelligentsia that an alternative policy is possible and necessary. The work of the Libertarian Social Institute of Mr. Lotvala has been earliest in the field with its own independent and critical rethinking of Marx and communist programme in general and criticism of Indian policies in particular in the light of free economy and free society. Research and publicity has gone hand in hand in this work with its library at Bombay and Bangalore and the journal Indian Libertarian published fortnightly. **Dictatorship, not democracy** In the field of agriculture, the very first plan contained the germ of the policy which blossomed fully into the communist pattern of co-operative farm, the imposition of ceilings on holdings with nominal compensation to lands acquired by the state for transfer to the tiller. The full communist tactics of salami division of the farming community into landless labourer, small farmer, middle farmer, large farmer and large landowner was adopted. The zamindar corresponded to the feudal large landowner and was removed with ridiculous compensation in 1948. This is proof that the governing leadership had their minds made up before the advent of independence and put their notions of imported land revolution into force at the earliest opportunity without taking the intelligentsia in confidence. They posed as omniscient rulers and disdained to consult the people. This is not democracy but dictatorship—doing good to the people without their knowledge and intelligent consent! It was the good intention of the socialists in Germany that ruined her in the Hitler regime’s policies. The people did not read either the Industrial Policy Declaration of 1948 which is fully socialist in inspiration and aim nor the Five-Year Plan Reports on Land Reforms, which is modelled on the Russian and Chinese patterns, even to the minute details except for the killings and violence. The killings were unnecessary in India as the intelligentsia had not yet taken a measure of their responsibilities under democracy. The peasants and their leaders were too scattered to organise resistance. They held their first Federation in 1958 which precipitated the Nagpur Resolution of the Congress party and the founding of the Swatantra Party but the so-called ‘land reforms’ have only been slowed down a little. No alternative scheme modelled on the democratic, constructive, evolutionary reforms of the Dutch, German and Scandinavian countries have yet been presented to the country by Indian agricultural leaders. They lack constructive imagination and the necessary stamina, grit, devotion and unsleeping vigilance both in their own interests and in the interests of democracy, to build an alternative society bringing men freedom. Both facts and creative imagination are necessary. The Seventeenth Amendment to be brought forward in August seeks to make ryotwari land also subject to the zamindari abolition reforms tactics. If passed, it makes an end of poverty as a fundamental right and so weakens democracy at a vital point. *This essay is part of a series from the Indian Liberals [archive](https://indianliberals.in), a project of the [Centre for Civil Society](https://ccs.in). This essay is an excerpt taken from ‘Indian Libertarian’ magazine with the original title “Social Imagination and Revolution” published on 15 August 1963. The original version can be accessed [here](https://indianliberals.in/the-indian-libertarian/the-indian-libertarian-aug15-1963.pdf#page=5).* --- ## [ThePrint] Social injustice is inevitable under socialist economic systems: BR Shenoy URL: https://indianliberals.in/theprint-mirror/social-injustice-socialist-economic-systems-br-shenoy/ ### Body _Mirrored from [ThePrint](https://theprint.in/opinion/indian-liberals-matter/social-injustice-socialist-economic-systems-br-shenoy/2884958/) on 2026-05-16. Originally published 2026-03-21. Author retains all rights; the canonical version on ThePrint should be cited. This mirror exists for AI-agent readability — search engines are asked not to index it (canonical SEO weight stays with ThePrint)._ # Social injustice is inevitable under socialist economic systems: BR Shenoy Under consumer sovereignty, four desiderata are integral to the functioning of the system. First, to seek consumer patronage, entrepreneurs would strive to reduce costs and improve quality. With consumer approval and appreciation of such effort, high-cost and low-quality products would continually tend to be replaced, through resource shifts and technological progress, by low-cost and high-quality products; and this will continually tend to lift up production, and hence employment, income and the level of living.  Secondly, rapid expansion of employment is built into the economic system where everybody’s concern is to meet the demands — which, it may be noted, are most exacting, in addition to being ruthless —  of the consumer. The expansion of employment at current, or rising, wage rates is a function, not of investment, as Indian experience has shown; nor of stepping down the technology of production, which is currently in use. It is solely a function of the expansion of overall production. Since consumer sovereignty makes for rapidity of growth of the national product, it may, therefore, liquidate unemployment with corresponding rapidity. To illustrate the working of this built-in urge to expand employment: in Japan, low wages, the heavy pressure of population on land, 291 persons per square kilometer, – the average land holding in the country, as a result of this population pressure, is but 1.01 hectares  —  the scarcity and high cost of capital, induced farmers to adopt labour-intensive methods of cultivation in agriculture.  Japanese agricultural output is well above the world average. The Japanese output of paddy, per hectare, in 1974 was 5.84 tonnes, as against the world average of 2.36 tonnes. Japanese agriculture employs 2,031 workers per 1,000 hectares of cultivated land. In the US, on the other hand, capital is less scarce; the average holding is 157.6 hectares, population density is 22 per square kilometer, and the country adopted capital-intensive methods of cultivation, the labour employed per 1,000 hectares of cultivated land being a mere 17.  These differing systems of cultivation were adopted, not under the direction of a planning commission, but by independent farmers in free economies, the course and destinies of which are, on the whole, determined by sovereign consumers. By contrast, the Russian Gosplan copied the American method of capital-intensive cultivation, notwithstanding low wages, with none too complimentary results.  Thirdly, under full consumer sovereignty, there is no need, nor room for monopolies in production, distribution, imports or exports; and incomes of all individuals — wages, interest, rent and profits — would correspond to their respective contributions to the national product. Such a situation permits no windfalls. Hence, none can appropriate someone else’s earnings, i.e., there can be no social injustice. Social injustice, on the other hand, is inevitable under socialist economic systems, which abound in monopolies, privileges and subsidies; and hence bring to privileged individuals and groups unearned and also unmerited incomes, at the expense of the rest of the community.  Fourthly, income contrasts tend to decline as economic development progresses, under consumer sovereignty. This is so not merely because of the absence of social injustice, but also as a consequence of, on the one hand, a natural decline in interest, rent and profits, the earnings of the economic elite, and a natural increase, on the other, of wages and salaries. As a free economy progresses, the proportion of wages and salaries to the national product tends to increase and the proportion of interest, rent and profits tends to decline. In Japan, wages and salaries rose continually from 41.3% of GDP, in 1960, to 50.8%, in 1974. In West Germany, this percentage rose from 46.9 to 54.7. By contrast, in Socialist India, this percentage fluctuated within a narrow range and was, in 1974-75, 28.2 or lower than in 1960-61, 29.9.  The growing prosperity of the masses of the people in free societies is evidenced by the overwhelming proportion of economic activity being directed to the turning out of articles of mass consumption and by the vast multiplicity of departmental stores, safeways, shopping centres and the endless series of retail shops which purvey these products.  Many of these products would be, if then available, matters for envy among the noblemen and the elite of the 18th century. The shoppers that crowd these places are not plutocrats but farm and factory workers and salaried people. Except in Communist countries, cars are no longer a luxury transport, accessible only to the favoured top crust of the community.  In a communist society, none of the economic constituents of a free economy hold true. The state determines the needs of consumers, arranges the distribution of goods and services and allocates resources among alternative uses. Individuals do not enjoy fundamental economic rights; and forward markets do not exist. *This essay is part of a series from the Indian Liberals *[*archive*](https://indianliberals.in/)*, a project of the *[*Centre for Civil Society*](https://ccs.in)*. This essay is an excerpt from a monograph published by the “Forum of Free Enterprise” titled “Economic Growth with Social justice” in August 1977. The original version can be accessed *[*here*](http://indianliberals.in/forum-of-free-enterprise/economic-growth-with-social-justice-dr-b-r-shenoy-august-1977.pdf)*. * --- ## [ThePrint] The so-called ‘socialist pattern’ and democracy cannot co-exist for long: Minoo Masani URL: https://indianliberals.in/theprint-mirror/socialism-democracy-minoo-masani/ ### Body _Mirrored from [ThePrint](https://theprint.in/opinion/indian-liberals-matter/socialism-democracy-minoo-masani/2854700/) on 2026-05-16. Originally published 2026-02-14. Author retains all rights; the canonical version on ThePrint should be cited. This mirror exists for AI-agent readability — search engines are asked not to index it (canonical SEO weight stays with ThePrint)._ # The so-called ‘socialist pattern’ and democracy cannot co-exist for long: Minoo Masani Some people would reply that democracy means majority rule. How wrong they are! Stalin and Hitler, after coming to power, repeatedly won elections by huge majorities which were presumably bogus, and then carried on a ruthlessly oppressive and tyrannical regime. The dictators of the Black African countries, who are often ferocious autocrats, also claim to have been elected by a majority. As the anthropologist, Elspeth Huxley, has put it : “One man one vote, once”. Mr. R. Venkataraman, President of our Republic, mentioned this in his Inaugural Address as President on July 25, 1987 that ‘most of the newly independent countries which adopted a democratic form of government have lapsed into dictatorships’. There are countries covered by Mr. Venkataraman’s statement in Asia and Latin America which also qualify along with Africa. The concept of majority rule is a particularly pernicious one in countries which are not of a homogenous nature ethnically, linguistically or by religion. Examples of such countries are the Union of South Africa, Fiji, Sri Lanka, and, of course, our own country. In these countries there is a built-in permanent majority based on race, language or religion. Majority rule in such cases would mean the tyranny of the majority community over the minority community or communities. In South Africa the result of “one man one vote” majority rule would be the domination of the Blacks over the Whites and the coloured peoples including Indians who are all minorities. In Fiji it would mean the domination of the Indian immigrants over the original inhabitants there. In Sri Lanka it would mean the domination of Sinhalese over Tamils and in India it would mean the domination of the Hindus over the Muslims, Sikhs, Christians and other minorities. It is quite obvious, therefore, that majority rule is not democracy and can often be undemocratic. Having disposed of this myth, let us now turn to the various factors that make a real democracy. ***Also read: ***[*Liberal methods reach social justice faster than socialism: Minoo Masani* ](https://theprint.in/opinion/indian-liberals-matter/minoo-masani-liberalism-free-markets-india/2823730/) ### **Limited government****** It is quite clear that a government which is not limited to essential purposes but dominates [the] economic, educational, literary and artistic life of the country cannot be a democratic one. Where this happens, an effective opposition ceases to be possible, and Mr. Durbin’s test cannot be fulfilled. This has been proved by the case of the Soviet Union, Communist China and others in our time. Italian theorist Benedetto Croce was able to foresee this when he wrote in the last quarter of the 19th century that where the Government or the State tends to become the only employer and the only landlord, that society ceases to be democratic, because there would be no one left to oppose except at great peril. That is why he argued that in a free society there have to be “autonomous social forces” such as the farmer owning his land, the industrialist owning his factory or business, the shopkeeper owning his shop and the professional man like the lawyer or doctor or consultant who works for himself. Later developments have proved how right Croce was. In my opinion, India is in the border line between a limited government and a total one because of excessive controls, destruction of the balance of the mixed economy, control of the dominating heights of the economy, as Jawaharlal Nehru grandiloquently described it, through giant industrial units, the control of the State over universities, the absence of economic freedom, the institution of *Sahitya Academies* and other government institutions which have undermined the independence of writers, artists and other members of the intelligentsia. Writing on 5th January 1969 in the *Times of India*, Mr. Nirad Choudhary asked: “Where do contemporary Indian writers stand in the light of these ideals? I cannot say they are not involved in current affairs. On the contrary, I would assert they are only too much involved in them, which means that they are wrongly involved. Most of them are doing their best to have a share of the loot of public money that has become the vocation of the upper middle class since Independence. All of them are enlisting or trying to enlist in the horde of *Pindaris* that the present ruling order of India is. The writers in this army will not indeed be* Amir Khans* or *Chittus *but they aspire to become quite prosperous *thugs*.” There have been repeated attempts to destroy the freedom of the press. All these have brought India to the position where it is possible to say that the so-called ‘socialist pattern’ and democracy cannot co-exist for long. This already happened for a brief period of two years after 1975, and could easily happen again for a longer duration. Therefore it is that the liberal insists that unless [the] Government is limited and kept in its proper boundaries, it cannot be called a democratic one. Mahatma Gandhi said: “That Government is best which governs the least.” ***Also read: ***[*Prices, like water, will find their own level. Controls breed vested interests: Minoo Masani* ](https://theprint.in/opinion/indian-liberals-matter/prices-like-water-will-find-their-own-level-controls-breed-vested-interests-minoo-masani/2670255/) ### **Sharing of power****** Democracy has been defined as [the] government of the people, for the people, and by the people, the last of these being the most important of the three. The sharing of power has to be both horizontal and vertical. It should be horizontal in the sense that minority groups have a right to participate in the government of the day along with the majority. It is not enough for members of the minority to be condescendingly included in the cabinet as are Muslims, Sikhs and others in India, and, Tamils and Muslims in Sri Lanka, at the *‘meherbari*’ of the majority or of the White ‘Uncle Toms’ whom the Communist-dominated African National Congress would perhaps include in their new government, if ever they are allowed to come to power. What is necessary is for the Tamils and Muslims in Sri Lanka to be represented by those chosen by them. That Muslims and Sikhs in India should similarly have the right to choose their own members of the cabinet and that the Whites in a Black dominated country should have ministers of their own choice. This has been ensured only by the Swiss Constitution to which I shall refer later. Vertical participation is equally important. The infrastructure of a democracy lies with grassroots vigilance and initiative which keeps political parties and governments on the straight and narrow path. Where such grassroots vigilance and initiative are weak as in India today, political parties float on top without any infrastructure, without internal democracy, and with “Kangaroo courts” which ‘expel’ members without even asking them to show cause. The element of grassroots vigilance is not one that can be created by law. It is primarily one that is dependent on home and school education and training of the young in the right to think for themselves, training in the right to stand up to authority—whether domestic, industrial or political, when the conscience demands it. Gandhiji defined a real *satyagrahi* as one who defies a law which he thinks is immoral even if he is in a minority of one, provided he is prepared to pay the price for his act. In other words, democracy is contingent on the existence of independent, aware and courageous citizens who are prepared to speak up for their rights and do not always count the cost. As the poet said: “They are slaves who dare not be  In the right with two or three”. The main enemies of such initiative are the cult of personality, misguided loyalty to party “high command”, sycophancy which abounds in the capital and other parts of India and the presence of a controlled economy where the permit-licence or quota is a pre-condition to economic survival. Here we are on very weak ground. The concept of good and active citizenship is not well understood in India. The result is “too much politics, too little citizenship”. We need much more grassroots vigilance and action. It is not periodic five-year elections that determine the quality of democracy but the day-to-day intervention of the ordinary citizen in the affairs of the State. Here we are very weak, and unless the quality and activity of our citizenship improve and become much more democratic, our political parties will continue to float on top and be utterly irresponsible as they are today. It is important that the people of India be educated on this subject. It is important that the people of India be educated on this subject. *This essay is part of a series from the [Indian Liberals](https://indianliberals.in) archive, a project of the [Centre for Civil Society](https://ccs.in). This essay was published by the Harold Laski Institute of Political Science, Ahmedabad on 24 March 1989. The original version can be accessed [here](https://indianliberals.in/wp-content/uploads/2022/08/Copy-of-The-Essence-of-Democracy.pdf).* --- ## [ThePrint] Socialism hinders India’s industrial growth. We need free enterprise first URL: https://indianliberals.in/theprint-mirror/socialism-hinders-indias-industrial-growth-we-need-free-enterprise-first/ ### Body _Mirrored from [ThePrint](https://theprint.in/opinion/indian-liberals-matter/socialism-hinders-indias-industrial-growth-we-need-free-enterprise-first/2695489/) on 2026-05-16. Originally published 2025-07-19. Author retains all rights; the canonical version on ThePrint should be cited. This mirror exists for AI-agent readability — search engines are asked not to index it (canonical SEO weight stays with ThePrint)._ # Socialism hinders India’s industrial growth. We need free enterprise first Chambers of Commerce and trade bodies in the country performed a very useful function in our economy in the past. It was through the Chambers of Commerce that the business community voiced its grievances and sought redress for them at the hands of the Government. The Governments of the past also attached great importance to the pronouncements made by them and tried to modify their policies to the extent possible to suit the requirements of trade and industry. It was as a result of this that even under an alien Government our commerce and industry made significant progress during the past quarter of a century. But alas, during the past years we have seen a complete reversal of these policies. This is a significant matter, as it indicates a change in the attitude of the Government towards that section of the population which is traditionally in the pursuits of private trade and industry. Since the decision of the Government to establish a socialist economy in the country, this section has come in for quite an unnecessary measure of discrimination and has been discredited and discouraged at every stage. It is told that ours is now a socialist state and hence the private sector must subordinate its interests to the state plan and if need be liquidate itself in course of time. The statements made by Ministers of the Government are quite baffling and are many a time diametrically opposed to each other. Prime Minister Nehru, who is a great believer in democracy, said at the A.I.C.C. meeting in January last that he would prefer slow progress to risking individual independence for rapid progress. On the other hand Shri T. T. Krishnamachari, the Finance Minister, has declared that the Second Plan would demand sacrifice and regimentation of our economy, and Shri M. M. Shah, Union Minister of Heavy Industries, said the other day that the public and private sectors could easily coexist without any kind of trouble for the next ten or fifteen years which means by implication that after that the private sector must expect the deluge. Where do all these statements lead us? The private sector needs as much planning as the public sector. Is it possible for any group of entrepreneurs to go in for any big plan of industrialisation when the only lease of life you give them is ten to fifteen years? Needless to state that the policies of the Government act as a serious deterrent to the growth of any new industry in the private sector. This serious situation has arisen as a result of the adoption of the socialist economy by our Government. Our Government claim that their policy has been endorsed by the country; which means that the vast majority of the unthinking millions of the country have understood the implications of this policy and approve of it. On the other hand there are thousands of thinking people in the country who are convinced that these policies will not only result in raising the standard of living, but may well create a totalitarian regime. But nevertheless the determination of our Government to press forward with their socialist plans seems to gather strength as time goes on, as though socialism is the only panacea for our economic ills, and the private sector represents all the anti-social evils in our body politic. ***Also read:** [Private enterprise built India’s industries. Now it’s strangled by Gods in Delhi](https://theprint.in/opinion/indian-liberals-matter/private-enterprise-built-indias-industries-now-its-strangled-by-gods-in-delhi/2680404/)* The tirade against capitalism is wholly unfounded. Capitalism as it has shaped during the past quarter of a century is a far better method of developing the economic resources of any country, as well as obtaining the ends of social justice, whereas socialism is inevitably a tyranny. To say that the people of this country have accepted socialism as their goal is false. The large mass do not understand what they are being bamboozled into accepting. The view of those who understand its implications is being treated with contempt. It will be therefore right for us to dwell here on the merits and demerits of the two systems. There was a time when the socialists were able to make damaging criticisms of the system of free enterprise. They pointed to the high degree of economic inequality it gave rise to, the insecurity of the worker, and the inadequate use of resources, causing persistent unemployment. In those days there were no socialist systems with which comparisons could be made. They were comparing socialist theory with capitalist practice. If socialist practice had been brought into the discussion, the balance might have been less unequal. Nevertheless these were serious defects in the private enterprise system. But all have been largely or wholly abolished by the developments of the past quarter century. Perhaps the decisive event was the publication of Keynes’ great book, *The General Theory*, in the early 1930s. This book showed how, by manipulation of the bank rate, direct investment activity, and deficit financing, it is possible for a government while preserving private enterprise, to secure full employment and the maximum use of economic resources. At the same time the doctrine of the Welfare State began to be put into force on a large scale. This greatly reduced economic inequality and secured the worker against the economic disasters of casual unemployment, injury, sickness and old age. It is now possible for upholders of free enterprise to challenge the socialists and deny that their system is in any respect superior. Socialism in practice has not fulfilled its promise to bring about equality among men. In fact socialist societies show just as much inequality as capitalist societies. And the free enterprise system retains the inestimable advantage, in which no socialist system can rival it—that it is free. Far back in the nineteenth century, when these problems were first discussed, the opponents of socialism pointed out that that idealistic system would in practice turn out to be a system of slavery. They have been fully justified by the test of experience. Socialism is slavery, whereas free enterprise is free—not only for the capitalist but for the worker, and for the professional man and the intellectual. But all this discussion applies to highly industrialised economies. What is its application to India, where industrialism is still far from fully developed? Until very recently it was the assumption of all on both sides that socialism has no application to backward economies. Marx himself, and all the other socialists, laid it down that the backward economies must be industrialised by free enterprise, and that when that process had reached a certain stage of completeness, socialism would take over. The socialists believed that socialism requires a wealthy economy: it is no use distributing poverty. They also held that for socialism to be practicable, the public, including the workers, must be highly educated, and that cannot be the case unless the nation has been wealthy enough to afford a comprehensive educational system for a generation or more. If you try to impose socialism on a poor and ill-educated community, you inevitably get a dictatorship of the educated minority over the illiterate majority. The socialists were therefore arguing quite sensibly when they said that socialism has no application to backward economies. But now we are faced with a new proposal, unheard of among the classical theorists of socialism. That is that socialism is to be introduced into backward countries straightaway, without waiting for free enterprise to lay the necessary economic foundations. What becomes of Marx’s warnings against this policy? They are ignored. But they will come true: we can see them coming true in India today. Under the form of democracy, we see growing up an economic dictatorship of the politicians and the bureaucracy; and the illiterate electorate is powerless to check it. The socialist theorists go further. They argue that socialism can carry a backward country through the process of industrialisation quicker than free enterprise can do it. Look, they say, at our huge hydroelectric and steel plants: how could private enterprise ever undertake tasks of that magnitude? But the argument is a fallacy. It is right for the state to build hydro-electric and steel works, because it is known that there will be a market for their products, and the magnitude of these enterprises places them, for the present, beyond the reach of private capital. In fact the state, with its vast resources, can jump ahead faster than free enterprise can. But that is true only where there is a known demand and therefore a clearly defined economic goal—so much steel, so many kilowatt-hours. Where the state takes it upon itself to supply all the vast variety of the wants of the public, it has no such advantage. In fact, it suffers from great disadvantages as compared with private enterprise. For the state cannot solve the problem of allocation of resources. Under free enterprise that problem is solved by the market, by public demand. Under socialism it is solved by bureaucratic decrees, and such decrees must often be wrong. A bureaucratic management cannot take the place of the market economy. It does not know, and cannot know, how to allocate resources. Only the market can tell that. And moreover, the bureaucratic type of management is less efficient in detail than private management. I know there will be protests at this statement, but you have only to glance round at the state enterprises in Bangalore to see that, whatever else they may achieve, efficiency and economy are minor considerations with them. I conclude that this new-fangled theory of socialism as specially suitable for backward countries is a huge mistake. Socialism in India now is putting the cart before the horse: it is distributing poverty and obstructing development; and worst of all, it is putting into power a vast, irresponsible bureaucracy which will make either political or economic democracy impossible. *This essay is part of a series from the [Indian Liberals archive](/indianliberals.in), a project of the [Centre for Civil Society](https://ccs.in/). It is excerpted from a monograph published by the Forum of Free Enterprise in 1956, titled *The Place of Free Enterprise in a Backward Economy*. The original version can be accessed [here](https://indianliberals.in/forum-of-free-enterprise/the-place-of-free-enterprise-in-a-backward-economy-by-dn-hosali.pdf).* --- ## [ThePrint] State control blocks India’s progress and exploits its people: C Rajagopalachari URL: https://indianliberals.in/theprint-mirror/state-control-india-progress-exploitation-c-rajagopalachari/ ### Body _Mirrored from [ThePrint](https://theprint.in/opinion/indian-liberals-matter/state-control-india-progress-exploitation-c-rajagopalachari/2737203/) on 2026-05-16. Originally published 2025-09-06. Author retains all rights; the canonical version on ThePrint should be cited. This mirror exists for AI-agent readability — search engines are asked not to index it (canonical SEO weight stays with ThePrint)._ # State control blocks India’s progress and exploits its people: C Rajagopalachari A workman who quarrels with his tools is a bad workman. Amendments to the chapter on Fundamental Rights in the Constitution are an insult to the intelligence of those who framed the Constitution, besides being a demonstration of the incapacity of the Government to govern. Before going into this matter, let me make a Swatantra affirmation so that the ground may be cleared. The Swatantra Party and the Swatantra movement have often been classified by foreign observers as ‘conservative’. Swatantra does want the State to conserve what is good in anything before proceeding to reform it. It can be called conservative for that reason. But the word ‘conservative’ has been put to such various uses that it has become quite a misleading appellation. The Swatantra Party wants the fundamental rights guaranteed in the Constitution of 1950 restored and preserved intact. What Swatantra stands for, as its name implies, is the ‘restoration of the citizen’s freedom of action not inconsistent with the general welfare, and therefore it wants the removal of the barbed-wire entanglements known as the permit-licence-quota raj, which sits heavily over all national production and trade. This was conceived with the intention of preventing chaotic development and illegal exploitation; but in fact it has impeded development and actually promotes exploitation. What appears as progress has been achieved in spite of the incubus, and not on account of the regimentation. Swatantra wants this permit-licence-quota entanglement removed. It wants the constitutional guarantees of fundamental rights fully restored. Swatantra wants less government and more freedom. At no time in the history of India did Government press so heavily on the minds of the people at all levels as now. And this pressure is an incubus, not a contributor of health or strength to the individuals who, after all, compose the nation, and whose health and strength make up the nation’s health and strength. **Protecting workers** Let it be clearly remembered that Swatantra wants everything to be done to give full security to tenants and every opportunity for the welfare of workers, rural and industrial. Swatantra wants urban and rural workers to be well protected against any tyranny on the part of those who furnish capital and manage production and distribution. It holds at the same time that sound management and capital are necessary both for the production of goods and for the welfare of all those engaged in that production. Swatantra opposes State regimentation and State interventionism for any purposes other than such protection and such welfare as aforesaid; Swatantra is opposed to interventionism to prevent free competition, and is opposed to every policy that tends to frighten capital out of its function. We cannot produce without capital, and we should not levy taxes to obtain capital but furnish incentives for savings voluntarily to become capital. It is only this that distinguishes progress and prosperity under freedom from a mere appearance of prosperity. **Dresed-up statism** Swatantra wants the Congress to realize the complicated nature of our large country. Agricultural practices and the structure of the agricultural apparatus vary from region to region. Steam-roller ‘reforms’ designed by people ignorant of conditions and by persons scheming to develop popular prejudices and exploit ignorance for party purposes, have caused widespread uncertainty and damaged production. Swatantra wants land reforms to be based on informed leadership, to be executed without attempting to extinguish the fundamental freedoms guaranteed in the Constitution. Swatantra is opposed to statism dressed up in attractive garments. The authors of the Constitution desired all the tenancy reforms and all the protection for workers that Congress policies now seek to achieve, but they were convinced that they could all be achieved without withdrawing any of the fundamental rights they wrote down as inviolable in Part III of the Constitution. The Directive Principles formulated in Part IV of the Constitution were framed for the purpose of achieving general welfare, without subtracting from the principles of the free way of life guaranteed in the earlier chapter, viz., Part III of the Constitution. It was taken for granted that there was no contradiction between these two chapters of the Constitution and that the two parts can stand together, and the nation can march to progress without asking the people to accept the economy or the way of life of communist countries. It is an insult to the intelligence of the Fathers of the Constitution to presume that there is any contradiction between the principles underlying one part of it and those formulated in another. **Communist conception of progress** The Swatantra Party and Swatantra movement cannot be equated with the conservatives or the liberals or any other party in UK or US. It would be best to call it a ‘Constitutionalist Party’ if Swatantra is not enough of a name. The ruling Congress Party’s conceptions are bodily lifted from communist conceptions of the short and coercive way to progress and prosperity. The original of this copy has failed, as we are able to see in the present plight of those countries which adopted the communist economy. The communist conception was based on coercion and does not provide an adequate substitute for the functions performed by competition and self-interest in the free way of life. Any system working against human nature is bound to fail, even if it began with a deceptive promise at the outset as a result of brutal compulsion. Some human activities can be kept up at a good pitch through pure idealism—art or science, for example. But the hundreds of humble and difficult jobs like rice-growing or brick and mortar work, or fruit-gardening or weaving call for the satisfaction of the urge to earn and save and keep something for oneself; further, this must be adequate in relation to the work and drudgery involved. The desire to have property is rooted in human nature, and civilization itself is rooted in it. In a free economy, zeal and enthusiasm are automatically guaranteed: whoever is not owner today hopes to become an owner tomorrow. In the socialist world, the only proprietor is the State; therefore, neglect and apathy become the national climate where coercion is evaded or removed. This cannot be counteracted by the wasteful proliferation and enlargement of the bureaucracy. The Swatantra Party thus opposes the ruling Congress Party’s Statist policies based on a repudiation of the fundamental principles of the Constitution and the freedoms guaranteed therein. To those who are in the Swatantra movement and who feel abashed at the power which the ruling party has secured by being in office and acquiring control over the economy, I say, let us do what we should do and not be concerned about results; let us not yield to the temptation of non-doing and become apathetic. Let us have faith in the national mantra, *Satyameva Jayate*, and carry on our work, not looking for results. *This essay is part of a series from the [Indian Liberals archive](https://theprint.in/indianliberals.in), a project of the [Centre for Civil Society](https://ccs.in/). It is taken from the Delhi Letter section of the Indian Libertarian magazine, with the original title, ‘Workman Quarrels With His Tools’, published on 15 December 1963. The original version can be accessed [here](https://indianliberals.in/the-indian-libertarian/the-indian-libertarian-dec15-1963.pdf#page=16).* --- ## [ThePrint] Was India’s public sector born out of European envy? URL: https://indianliberals.in/theprint-mirror/was-indias-public-sector-born-out-of-european-envy/ ### Body _Mirrored from [ThePrint](https://theprint.in/opinion/indian-liberals-matter/was-indias-public-sector-born-out-of-european-envy/2747391/) on 2026-05-16. Originally published 2025-09-20. Author retains all rights; the canonical version on ThePrint should be cited. This mirror exists for AI-agent readability — search engines are asked not to index it (canonical SEO weight stays with ThePrint)._ # Was India’s public sector born out of European envy? The biggest problems facing India today are poverty and unemployment. Eight months ago, a new government was formed in New Delhi. People’s hopes were aroused but for a short time only. Already, there is strong evidence of manifestations of frustration. As no other large country in the world faces the twin’ problems of poverty and unemployment of the magnitude as India, the new government’s responsibility is very grave. It would do well to bear in mind that ultimately economics rules politics. It is recognised in some quarters that even with half of India’s population, everything else remaining the same, the difficulties in transforming India into a welfare state are immense.  When India became free on the 15th August 1947, a tremendous euphoria was generated. It was considered to be the dawn. But it is clear as daylight now that the economic dawn is nowhere in sight.  After the end of the Second World War, the common man’s lot, especially in Western Europe, improved vastly and rapidly. He was better fed, clothed, and housed than ever before. In developed countries, economic growth and social welfare proceeded side by side. This feature gained universal acceptance. The proportion of the national income spent by the state in democratic capitalist countries rose sharply, and thus gave rise to the concomitant growth of the public sector. Indian thinking was naturally influenced by this. In a number of capitalist countries, up to one-half of the national income was spent on the public sector. The running of the public sector was something entirely new for Indians. Take, for example, the case of the railways. In 1947, India had one of the biggest networks, and several joint-stock companies were owned and run by Britishers. In the financial and engineering management, Indians had no part and no experience. Apart from that, the concept of predominance of the public sector was adopted for ideological reasons, without checking the likelihood of its success under the then prevailing Indian conditions. The question that naturally arises is whether Parliament was enamoured of this idea even before considering whether it was in a position to make a success of it. Whether the government sector of industry was conceived out of envy as a prominent and responsible industrialist once said in a public lecture, is worth a doctoral dissertation on the part of an enthusiastic youngster. It is pertinent to quote Collins in this context: “When I was young I thought socialism was the mathematics of justice. Now I realize it is only, the arithmetic of envy.” **Hunger in India** Let us now review what characterizes India today. More than three decades after Independence, half the people are below the Poverty Line. Most of the other half are also poor. What happens when someone consumes calories below the minimum daily requirement? The Minister for Planning did not go into this question nor did members of the Rajya Sabha think of asking him this question. However, there is information from elsewhere about the effects of malnutrition. Someone found that among 500 middle class children only one had an IQ below 80, but among 500 poor children who suffered serious protein calories malnutrition in their first months, some 62 per cent had IQs below 80. There is another way of looking at calories intake. A daily intake of some 2,250 calories is appropriate according to dieticians for an eight year-old child in a Western country. In India, an adult male doing heavy physical labour in the fields for more than 12 hours a day gets less than 2,000 calories from his food. The human effects of this have also been described “chronically hungry people are physically less developed and mentally less alert than people who eat enough.” In this connection, we would be wise to heed Bernard Shaw’s warning: “Those who minister to poverty and disease are accomplices in the two worst of all crimes.” **Neglect of agriculture** About 70 per cent of Indians are dependent on agriculture. If the first priority had been given to agriculture, and the second priority to industry, we would have fared much better in every way. As things stand, many of the poor do not have the purchasing power to buy enough foodgrains, the per-person consumption of which is gradually falling with every passing year, although the consumption earlier was always on the low side. A significant consequence of the neglect of agriculture is that the per-hectare yields of most agricultural crops are about half of the world average, let alone the peaks achieved in many countries. If we had provided all the agricultural inputs; when the world-wide rate of inflation was low, even after deficit financing, if found necessary; we would have been a surplus agricultural country *par excellence*. We should not forget that among big countries, lndia is unique, in that half of the total area is arable. Nature has liberally endowed us, as no other country in the world. At the same time, like foodgrains production, our oilseeds production would also have gone up, and given a tremendous impetus to another huge agricultural industry. **Neglect of education** The other front on which we have failed is education. It always got a low priority, possibly, because the economic growth was too low to fund the education department from the national savings. It is said that there are more illiterates now than in 1947. This comes in the way of the birth control programme, as it is very difficult to convey any message to the illiterates. As compared with the achievement of other countries, ours, in this field also, pales into insignificance. Economic growth and the reduction of illiteracy help in overcoming the problem of population growth. Priority should be given to a sound economic policy. In my opinion, only that economic policy can be successful which is framed within an average real (that is, after accounting for inflation) economic growth of at least three per cent per annum per person. One may well question how we can achieve in future three times the actual growth in the past. The answer is that the envisaged figure is by itself modest but could not be achieved because of the system we adopted. In the case of India, one cannot put the blame on the people, but only on the economic system which stifles initiative, obstructs activity, saps vitality, leads to corruption, etc. Medicines cannot cure our ills. What we need is surgery. In future, the free market economy is necessary. Otherwise it would be like hoping against hope. And this should be within the framework of democratic capitalism which has worked wonders in many countries, and which has unfortunately not even been given a trial in India. Just as there is only one optimum move in chess, there is no alternative. The trouble in India is, as the growth diminishes the squeeze on the private sector increases. No one can say that the present economic system was not given a long enough trial. The biggest threat to the private sector is the loss of freedom of action. **Dynamic force of capitalism** For all capitalism’s proven success in producing material prosperity, the ultimate justification for the system does not rest on its output of cars or cosmetics. Capitalism’s fundamental rationale is that it permits and promotes freedom by enhancing the rights of the individual and limiting the power of the state. While some capitalist countries are not democracies, no Communist or totally socialist economy has remained a democracy for long. And every democracy practices some version of capitalism. The reason is clear: political freedom is impossible without economic freedom. As the. British poet and essayist Hilaire Belloc noted, “The control of the production of wealth is the control of human life itself.” While tackling the herculean task, capitalism must demonstrate anew the daring and flexibility that were once its hallmarks. Plainly, capitalism is not working well enough. But there is no evidence to show that the fault is in the system or that there is a better alternative. Though neither comfortable nor easy, free enterprise contains. The protean potential that will be needed in the coming difficult years. For all its obvious blemishes and needed reforms; capitalism alone holds out the most creative and dynamic force that any civilization has ever discovered: the power of the free, ambitious individual. Every child should have Freedom, Bread, and Enlightenment. Freedom is considered even more important than Bread, because otherwise a tyrant can deny Bread, as history teaches us. Enlightenment should be such that the younger generation should not have any scope to put the blame on the older generation. Teaching self-restraint should be an integral part of the enlightenment. The youth should be reared in such a way that all the safety valves of their bodies are intact. This way, their future will be in their hands. Such children can impart the benefit of their experience to others. We can thus prevent wastage of humankind. John Dewey’s fervent wish “What the best and wisest parent wants for his child, the community should want for all its children” would become a reality. We should not forget that it is the system which creates deviates. With the introduction of the right kind of enlightenment, it is hoped to eliminate violence, and also the degeneration of mankind. At present, even in affluent countries, happiness is rare. *This essay is part of a series from the [Indian Liberals archive](https://indianliberals.in/), a project of the [Centre for Civil Society](https://ccs.in/). This essay is an excerpt from a monograph published by the ‘Forum of Free Enterprise’ with the original title, “A Blueprint for Eradication of Poverty”, published on 15 December 1980. The original version can be accessed on [this link](https://indianliberals.in/forum-of-free-enterprise/a-blueprint-for-eradication-of-poverty-dr-b-p-godrej-december-15-1980.pdf).* --- ## [ThePrint] Welfare state is socially and economically a national disaster: GN Lawande URL: https://indianliberals.in/theprint-mirror/welfare-state-is-socially-and-economically-a-national-disaster-gn-lawande/ ### Body _Mirrored from [ThePrint](https://theprint.in/opinion/indian-liberals-matter/welfare-state-is-socially-and-economically-a-national-disaster-gn-lawande/2841240/) on 2026-05-16. Originally published 2026-01-31. Author retains all rights; the canonical version on ThePrint should be cited. This mirror exists for AI-agent readability — search engines are asked not to index it (canonical SEO weight stays with ThePrint)._ # Welfare state is socially and economically a national disaster: GN Lawande Socialists claim that the “welfare” state alone has the merit of granting us social and economic security, but such a security will not function permanently, and even if it could do so, it would be as a long-term policy, both morally and socially undesirable. The political object of security is to remove from the minds of the people the fear of unemployment. Full employment, which is regarded as one of the aims of the Welfare State, is, in the final analysis, a fraud. It is a farce because as soon as employment is created in one direction, it creates unemployment in the other direction. This is what we find at present in our country, and to add salt to the injury, our ministers, well-versed in making illogical and irresponsible statements, tell us that their aim is to increase the welfare of the people, raise their standard of life and give them complete freedom. These are empty slogans which do not fill the stomach of the common man. “Welfare” is based upon employment and employment is based upon production. What we find today more and more people are thrown out of employment due to confiscatory pattern of taxation. Unless our production increases, national income cannot increase, and unless national income rises the welfare cannot increase. Welfare State is the prime cause of reducing productivity of the country. Coercion can always provide full employment, but what it cannot do is to provide us with a civilized standard of living and the means to enjoy it in the free fresh air of freedom. The real problem is not that there will be 11 millions of jobs by 1961 i.e. by the end of the Second Five Year Plan, but how much shall we produce and what in consequence will be our standard of life? The problem of distribution on which much stress is being laid today and for which confiscatory taxation is imposed upon the people, rich and poor alike, is after all more easily solved, the more there is to distribute. It is this truth that must prevail, if we, in India are to survive. Our national survival depends not on employment *qua* employment, but production *qua* production and given the latter, the former will take care of itself. At present we are suffering from rising prices due to inflation and the people are not even able to get two square meals per day. Is it ever possible under this circumstance to increase their welfare under socialist pattern of society? Certainly not. The only solution to the present economic malaise is the increase in production but this can take place only if the private enterprise is allowed free scope. ### **Economic emancipation** American Economy is successful at increasing production i.e. the output per man hour. This is mainly due to economic freedom and to the large measure of free enterprise. West Germany was able to achieve a “miracle” due to economic freedom. God helps those who help themselves. Soon we say farewell to the State welfare and become our own physicians sooner. We will achieve emancipation from the State itself. Welfare cannot be increased unless we have economic freedom. Political freedom is meaningless unless we have economic freedom. Economic freedom can be understood in two senses, namely, international field and domestic field. In the international field economic freedom means free trade and free currency exchange and in the domestic field it means freedom to choose your profession and occupation, free competition at all levels, freedom to grow rich or go broke, freedom to make all the profit you can to acquire a fortune and to bequeath or inherit the said fortune. Economic freedom means private enterprise and the free market as against Statism or socialism or the rugged market. The imposition of checks and controls by Government, especially transference of income from one class of community to another by means of taxation is not only monstrous but also blasphemous and to hope to increase welfare is to cry for the moon. It is the private enterprise and free competition that work for the public good and sooner we realise this and bid farewell to the welfare state we will be increased. So the remedy for the present malaise is the free economy and not planning. Von Mises, Hayek and Schumpeter like three witches in Shakespeare’s Macbeth had predicted that every deviation from free enterprise would propel the free nations irresistibly from capitalism to socialism and from socialism to some sort of police state, and it is our misfortune to see that this prediction has come to pass in our own country. We allowed our leaders to make our country a Heaven and they have turned it into a Hell. It is our “Herculean” blunder to place our destiny in the hands of others. Now we cannot escape the consequence of degradation of our manhood. We have become cyphers in the code of politics and now we must be prepared to love, obey and honour the State against our own free will. The “Welfare” State presupposes political and economic planning. It also assumes that man can live by bread alone but the loaf is shamelessly poor. The Planning Commission does not realise the fact that it is first-class Plans (if at all) produce third class results at first class prices. So welfare state is both socially and economically a national disaster. Socially because man is incited to believe that it is not his own personal responsibility to work out his own destiny and economically because it leads to inflation and bankruptcy. It is parasitic and retrogressive. It produces so many unhappy, frustrated and disgruntled citizens that superintendents and inspectorship become imperative, if good order is to prevail. In a welfare state the rule of law has been defiled and public opinion and sovereignty of the people, the very foundations of democracy, are being superseded by the undemocratic decrees of the ministers. The distinguishing feature of welfare state is universal poverty. It tries to make the wrong people strong but as Abraham Lincoln aptly puts it “You cannot strengthen the weak by weakening the strong”. ***Also read: **[Marxism extinguishes democratic rights the moment it captures power: MA Venkata Rao](https://theprint.in/opinion/indian-liberals-matter/marxism-democratic-rights-ma-venkata-rao/2835440/)* ### **The vicious circle** It is wrongly assumed that the taxation of higher income groups means limitation of expenditure on the part of these groups and what is expended off from the purchasing power can be directed to social ends in the lower income groups. But it must be remembered that higher income groups according to professor Ropke provide the foundations which are essential to certain functions of society, namely, capital formation, investment etc. If higher income groups, are liquidated by means of progressive taxation, these functions will hardly be carried out since they are vital to a healthy society, there is no alternative but for them to be take over by the State. It means that purchasing power is not available for the purpose of welfare state and welfare mechanism has to be abandoned. It is not the masses who gain through confiscatory taxation of higher income but the State which acquires extra power and influence. The consequence is an extraordinary promotion of modern absolutism with its centralisation of decision in all the most important fields i.e. in capital formation, in capital expenditure, in education, research and profits, “charity, honorary functions, liberality, conversation, leisure,” everything that Burke included in the expression “unbought graces of life” all these are strangled by the choking grip of the State. ### **The road to serfdom** The moral that can be drawn from this is simple. To run after Welfare State is to degrade oneself. Socialism seems to involve a state monopoly of supreme economic planning and in the words of professor Hayek this is a road to serfdom. The only remedy for this is libertarianism. Libertarianism tries to secure the greatest possible freedom for the greatest number of individuals and groups. According to libertarianism real happiness cannot exist without freedom. Libertarians believe that man is born with and without freedom and cannot feel happy if subdued and subjugated. To him liberty is the essential basis for happiness and welfare. State is not a welfare producing machine. Libertarianism is not a specific economic system, and it is rooted in a non-materialistic conception of human nature. It represents a contrast to Marxian Socialism. The fundamental idea of libertarianism is that of freedom or liberty. Liberty is the faculty or possibility of making a choice. Liberty is individual and social. As an economic system it makes predominant use of reason appeal and interest appeal. The interest appeal is effected by price mechanism. Freedom of purchase is the very cornerstone of economic liberalism. It is through the use of this liberty that the people direct production and trade. Free purchase means the liberty of everyone to acquire the means for the satisfaction of his wants to the extent his economy permits. It is more democratic than democracy itself. Liberalism does not wish the State to enter as party into any conflict between capital and labour. It regards the State as the supreme institution which has to stand above economic conflicts. Libertarian State always has some form of democratic government. Forced free competition is a contradiction in terms. Economic libertarianism is a system of free economic adaptation. So it is Free Economy and not Welfare State that will raise the standard of living of the people and increase their welfare. *This essay is part of a series from the [Indian Liberals](https://indianliberals.in/) archive, a project of the [Centre for Civil Society](https://ccs.in/). It has been excerpted from the journal “The Indian Libertarian”, published on 1 August 1963. The original version can be accessed [here](https://indianliberals.in/the-indian-libertarian/the-indian-libertarian-aug1-1963.pdf).* --- ## [ThePrint] Worker has no freedom in socialist society. India is moving in that direction: MA Venkata Rao URL: https://indianliberals.in/theprint-mirror/worker-in-socialist-society-india-ma-venkata-rao/ ### Body _Mirrored from [ThePrint](https://theprint.in/opinion/worker-in-socialist-society-india-ma-venkata-rao/2913464/) on 2026-05-16. Originally published 2026-04-25. Author retains all rights; the canonical version on ThePrint should be cited. This mirror exists for AI-agent readability — search engines are asked not to index it (canonical SEO weight stays with ThePrint)._ # Worker has no freedom in socialist society. India is moving in that direction: MA Venkata Rao It is the chief characteristic of libertarian societies that such social exchange and association (and culture generally) is totally free from State control and regimentation, except for the universal subjection to civil and criminal law.   In totalitarian societies, on the other hand, the State lays down the lines of thought to be accepted as a dogma in all professions. The case of Lisenko is relevant in this context. As a biologist, he had to defend the State doctrine of the transmission of acquired characters from parent to offspring without respect for his own personal opinion based on findings by his own research. Even in art, the State in Russia (and her satellites) lays down the overall policy to be embodied by the artists in their creations—even in music, opera, drama, poetry, literature. The test laid down is Partism; that is, the doctrine that the work should, in its overall effect on the reader or listener or spectator, have the effect of strengthening the Socialist sentiment. It should make them more resolved to go forth and put more will and energy into their work in the building of socialism! It should not raise doubts about Marxism-Leninism-Stalinism or Khrushchevism in the Soviet people. The doctrine of State authority in the arts and sciences and philosophies and even in history and anthropology resembles the dogmatic theology of the Roman Catholic Church which is laid down only by the authorised clergy and should be believed in on pain of punishment even unto death:—Witness the claims of the dread institution of the Inquisition in the Catholic Church, which is said to have got thirty thousand heretics burnt at the stake in the days of its power! The purges of Stalin are similar, though more extensive in numbers. In recent years, we have had the example of the literary man Dr. Pasternak, whose work was disapproved by the Kremlin and who was prevented from accepting the Nobel Prize award from abroad. Even the friends who used to help him in his work were persecuted after his death. In the libertarian pattern of society, cultural life in all its spheres—literature, the other arts, sciences, technologies, history, education etc. will be totally free from State interference both in their internal administration such as the appointments of experts and their housing of deserving personnel as well as in the ideas they accept from time to time as the truth in their specialties. They will be free to follow truth entirely on the guidance of their own experience and investigation, experiment, hypothesis and verification. Every accepted idea will be held subject to continual verification by others and so long as it satisfies their criteria of truth and verification.  Works of art will be appreciated solely on the grounds of their appeal to qualified persons– as in the music and art. Fashions may change but change will follow the free impulse of the devotees of the vocation or speciality. State ideology will not influence their ideas and appreciations. Similarly in economic life. The libertarian society will not seek to pour the entire economic activities of the people into any strait-jacket of State Planned system of targets hemmed in by State-determined regulations of trade quotas, of licences and tariffs in import and export except to the extent necessary for revenue and probably for short periods for protecting nascent industries. Even then the degree of protective tariffs will not shut our foreign goods altogether but will make them somewhat costlier so that the citizens may encourage *swadeshi *manufactures without too great a loss. In socialism, there will be no private industry and commerce at all. We in India are moving in that direction, our mixed economy being in the nature of Lenin’s New Economic Policy—a temporary make shift. All investment will be made by planning authorities without any say in the matter being granted to the consumer. In the libertarian society, on the other hand, all investment will be made by private individuals in industrial plants established by industrialists. They will choose industries likely, on the strength of the market for the goods to be manufactured and of the efficiency likely to be attained by the Directors of the enterprise. There will be scope for the intelligence, knowledge and experience of the investor in putting his savings into industry. The consumer thus determines the lines of production in a free society. In socialism, he loses this *sovereignty* and has to buy whatever is put on the market by the State at prices determined by officials. He cannot plan his own economic life, his savings and his provision for the future. Even banking will be run by the State in a socialist countries with the result that interest rates are fixed by the State and will not attract voluntary deposits. Socialist dictatorships have this disconcerting habit of repudiating debt obligations. Khrushchev declared two years ago that the Government Loans that had matured after twenty years would not be paid; he postponed payment to an indefinite future! Even the accumulated interest was not paid! Moreover, since all income earners in Soviet Russia and other communist countries are government employees, the State collects forced Loans from them whenever necessary, deducting them from their salaries! In a dictatorship, grumbling against such levies is dangerous and will be visited with dire punishment. Moreover, the earnings of everybody in socialist States depend on their worth as assessed by their official superiors who watch their work day-in; day-out in factory or office. Human nature being what it is, it happens too often that it is not the conscientious worker who gets recognised for salary improvements and promotions to better posts, but he who pleases the bosses by servility and extra-work service or compliance! The subservient sycophants have better chances of rising than the honest and efficient worker or officer! And since all employment depends on the same* State everywhere* within the country, the dissatisfied worker cannot seek justice elsewhere. If he leaves in search of better or alternative employment, he must carry a card giving clearance from his previous employing unit. No one will be taken anywhere without such clearance cards!  The worker, therefore, has no freedom worth the name in a socialist society. Marx spoke of the industrial workers under capitalist employers as wage slaves. But the workers in Socialist States are more of such wage slaves–(in fact actual serfs tied to work in the units allotted to them by the State)–than workers in free economy and free society. The first sufferers on the emergence of socialism are the workers who will lose their right to strike and deny their labour if dissatisfied with the terms and treatment they get.  Workers in a free society have the further advantage of having the freedom and opportunity of obtaining work from an alternative establishment run by competitors of the unit they are leaving. Workers in Bombay Mills have been known to acquire skills and obtain better paid employment from time to time in the other mills. Without the possibility of such alternative employment, a man cannot enjoy freedom in any real sense. Legal freedom is not enough though it is not to be despised. Variety of alternative opportunities as well as facilities for acquiring higher skills by experience and in continuation, technical schools are essential for the realisation of freedom. This is feasible only in a libertarian or free society with a free economy. At all levels of capacity and income, whether that of the worker, foreman, mechanic, office clerk, accountant, manager or capitalist director and investor as entrepreneur, what functions as a powerful incentive to work and improvement is the knowledge that every one can get the reward naturally accruing, from the contribution: It may be labour, supervision, office work, accounts, management, risk-taking with regard to investments or skill in salesmanship or knowledge of markets facilitating economical purchase– no one can work to the top of his capacity with zeal unless he has the assurance that social and economic institutions work in such a way as to harmonise skill and reward, effort and compensation, efficiency and monetary returns. Progress in career should also depend, not on the opinion of superiors entirely but no objective tests of contribution. In free economy, the management have a motive in rewarding merit and efficiency in their own interest– namely that of maximising profits by the marketing of good articles of consumption needed by society. The priorities of production in a free economy are those determined by the consumer. A free economy therefore will show a bubbling enthusiasm and self-reliance on the part of all participants in production, marketing and distribution and will elicit the maximum levels and variety of production. This does not mean that the State has no role to play beyond the maintenance of civil and criminal law in a libertarian pattern of society.  The State has to watch the working of the economy in all spheres and aid it by means of fiscal and monetary policies to keep it at an even keel. It can encourage investments into priority lines of consumer goods by the offer of suitable inducements, such as tax reduction or subsidy. It can pioneer new industries such as steel manufacture in India if private enterprise is unready for it. But it should turn it over to private enterprise as soon as it is ready. The State should maintain statistical institutions that gather and disseminate accurate information on important matters of commercial and industrial development.  It should also develop communications and transport either directly or indirectly through the encouragement of private bodies.  It should maintain educational and research institutions without monopolising them for itself. It should carry on international negotiations for the facilitation of foreign trade. It should not nationalise industries on a doctrinaire basis. Only the socialisation of the “economic vacuum” is permissible and not the supplantation of citizen enterprise.  *This essay is part of a series from the *[*Indian Liberals archive*](https://indianliberals.in/)*, a project of the *[*Centre for Civil Society*](https://ccs.in/)*. This essay is excerpted from the journal “The Indian Libertarian”, published on 1 January 1962. The original version can be accessed on this *[*link*](https://indianliberals.in/the-indian-libertarian/the-indian-libertarian-jan1-1962.pdf)*.* --- ## [ThePrint] No amount of welfarism and futurist illusion can remove poverty of Indian people: BS Sanyal URL: https://indianliberals.in/theprint-mirror/welfarism-poverty-indian-people-bs-sanyal/ ### Body _Mirrored from [ThePrint](https://theprint.in/opinion/welfarism-poverty-indian-people-bs-sanyal/2896578/) on 2026-05-16. Originally published 2026-04-04. Author retains all rights; the canonical version on ThePrint should be cited. This mirror exists for AI-agent readability — search engines are asked not to index it (canonical SEO weight stays with ThePrint)._ # No amount of welfarism and futurist illusion can remove poverty of Indian people: BS Sanyal No amount of welfarist blab can prove that their poverty has been caused by capitalism. On the contrary it is the absence of capitalism that is the root cause of their poverty. And the absence of capitalism may be traced to the vestigial ascetic and feudal mentality, hostility to foreign investors, lack of energy honesty and righteousness, increasing population, little capital accumulation, extremely low per capita quota of capital investment, low capacity to absorb capital, encysted market, and, above all, the new found love for escapist and self-stultifying method of realising economic good. All these and many other factors checkmate the growth of a healthy and virile profit-seeking entrepreneurship. No amount of welfarist nationalist sentiment, again can blame the erstwhile colonial powers for the poverty of the Indian people. That the Imperialists in India did some harm to our age-old cottage industries is offset by the fact that the foreign rulers imported and invested capital and did all they could for the material well-being of the people. Neither has the poverty of the Indian people been caused by the microscopic minority of the allegedly privileged groups inside or outside the country.  ### **Welfarism creates slavery and poverty** And, even an ignoramus like the present writer has no difficulty in seeing that the political shortcut to the welfarist utopia is like Belzeebub’s driving the special train along the celestial rail-road.  Again, no amount of welfarist wish-fulfilment and futurist illusion can remove the poverty of the Indian people. The operation of the Free Market alone can deliver the goods.  The relationship between consumption and investment being that of inverse variation, quick economic development makes the problem of poverty and backwardness acute. Besides, look into the aspirations of erstwhile colonial peoples. Individually, they would like to have the prosperity of an American, and nationally, the security of the British Welfare State. Given the above relation between investment and consumption and the above aspirations of the people, the welfare politicians will have to give them only regimentation and totalitarianism.  We are not taking an alarmist view. To add to the available resources, the plough-back of resources and the pace of development, the State takes over and actually runs the industries; it tries to mobilise the saving potential latent in rural unemployment and then begin to control production in the rural sector. And one dark noon it reaches autarchy. That this will not be a mere transitional phase followed by a release of private initiative is more than well-founded on the contemporary experiments in totalitarian economies in the backward countries which are now communist states. Neither can state action be justified on grounds that a mixed economy involving coexistence of a public sector and private sector ‘amounts merely to a modification of the components of the mixture and hence constitutes no threat to freedom.’ The reason is, as Prof. G. D. Parikh has pointed out, that “with the replacement of atomistic decisions about investment by the so-called social priorities, the private sector in such controlled economies ceases to be private and the entrepreneur is often reduced to a semi-civil servant. There being no theoretical basis for determining the nature of the sectoral mixture, a mixed economy remains an inherently unstable pattern subject to pressures of diverse kinds. And the pressures that generally assert themselves in underdeveloped countries are those leading to increasing centralisation and bureaucratisation.” (RIViALRY BETWEEN DEMOCRACY AND TOTALITARIANISM, The Future of Freedom, p.302).  Mixed economy of the welfarist is a myth. By definition, it is a negation of the market economy. Interventionism is the beginning of totalitarianism. We are already in the throes of it. It uses the method of compulsion. That the government would graciously give the private sector “encouragement in every way” and “would not touch them for at least ten years, may be more” does not do away with the grim facts that the government has already taken control of the economic life of the people, and that the government may nationalise whatever and whenever it leases. The words quoted were recently spelled by the arch welfarist of India, namely, Nehru, who also added, “We do not know when we shall nationalise them.” (Jawaharlal Nehru, Independence and After, p. 192). So it is coming, the day of universal pauperization and regimentation.  Thus, we are left with only two alternatives: the free market economy and the totalitarian economy. The free market implies that people use their own money and skills to realise their own economic decisions and either gain or lose. If their judgements are correct, they gain; if wrong, they lose. There is thus a freedom and there is an equality of freedom which is justice. The socialist pattern works through compulsion. The market is by-passed. The bureaucrat collects taxes and compels the participants against their will and judgement to give a portion of their money or energy to realise the official plans and schemes.  The welfarist may argue, though he does not, that this proves only loss of freedom and that this does not prove that poverty is not removed. The capitalist rejoins that welfarism creates poverty too. Bureaucrats have won a notoriety for their inefficient utilisation of the available resources. Credit expansion and inflation foil the common man’s attempts to save. Taxation appropriates savings for the public sector and atrophies the private sector. Private sector retaliates by diverting the savings. A part of the tax receipts may represent the potential savings of the taxpayers: heavy taxation thus reduces the national saving and retards economic progress. The bureaucrats cannot increase savings by tampering with the usual devices: they cannot invest resources which are simply not there. A part of the tax-receipts is consumed by administrative expenditure. Tax measures thus produce the opposite effect. Deficit financing is a plain fraud. Over-investment diverts a part of the resources away from the Public investment.  The various big Hydel projects like TVA, Dneprostroi, Aswan and our DVC are glaring instances of colossal waste achieved by our politicians turned economic bosses. Also look into the repercussions of the tax proposals towards the financing of the Second Five Year Plan. The artificial pressure of the expected heavy taxation has already resulted in a decline in the prices of industrial equities. The fall in share values is showing a tendency to cause a diversion of savings {into less essential urban property, concealed investment overseas or into gold hoards) and also a withdrawal of private foreign capital and a further flagging in national product. Thus, tax-measures to accelerate progress may produce the opposite effect.  ***Also read: **[Violent class-war doctrines of Marx became the sole saviour of labour: MA Venkata Rao](https://theprint.in/opinion/indian-liberals-matter/collectivism-liberty-limited-state-ma-venkata-rao/2866268/)* ### **The capitalist attitude of poverty** The capitalist attitude to poverty is more rational than that of the welfare propagandists who are suffering from a fixation on feudalist mentality. In a Capitalist society, the notion of poverty refers only to those who are invalids, have no property of their own and are not taken care of by their next of kin. And in the capitalist society, both the government and private charitable institutions, religious or secular, vie with one another in charity. Welfare romanticists do not approve of charity on two counts, economic and psychological. Individual charities can never yield sufficient wherewithal with which all invalids can be fed clothed and housed The psychological objection rests on a sentimental reason that charity is mere charity and mercy, that there is an indignity inherent in it.  The capitalist rejoinder to the first objection is that the progress of capitalism will add to the capacity for donation and reduce the number of the beneficiaries. Besides, as Dr. Mises sardonically points out, it is highly probable that had there been no interventionism sabotaging the market economy, the charity funds in capitalist societies would be more than sufficient. Credit expansion and inflation foil the common man’s attempts to save for bad days. Thus the majority of the beneficiaries are needy only because of interventionism. Besides, inflation and interventionist tampering with the rate of interest bringing it down below the potential market rate virtually expropriate the endowments of orphanages, asylums, hospitals etc. Dr. Mises thus rightly concludes that in lamenting the paucity of charity funds, the welfarists lament one of the results of their own policies.  The other objection of the welfarist is valid. The element of indignity and humiliation in becoming an almsman cannot be denied even by the greatest of rational Spinoza-like egoists.  But then, no interpersonal relationship can escape a similar fate. The chances of indignity and humiliation will always be there, may be in changing forms. On the contrary, the chances will be greater when a professional class of ‘do-gooders’ in power will dispense their providential care to the class of ‘done good to’.  Compare this with the capitalist’s attitude. The invalids’ right to sustenance is justified on grounds of the metaphysical doctrine of natural right, that before God or Nature all men are equal and have an inalienable right to live. While fully endorsing the religious and moral duty in this respect, we may very well question whether the recognition of this duty enjoins the choice of uneconomic methods. The methods of the welfarist reduce the productivity of the human effort and thus affect the welfare of the invalids as well as of the able-bodied. This is a greater injustice. *This essay is part of a series from the [Indian Liberals](https://indianliberals.in/) archive, a project of the [Centre for Civil Society](https://ccs.in/). It has been excerpted from the journal “The Indian Libertarian”, published on 15 July 1957.. The original version can be accessed [here](https://indianliberals.in/the-indian-libertarian/the-indian-libertarian-jul15-1957.pdf).* --- # Primary works (Tier B — summaries only) > Tier B: cite to the PDF, not as if the body text was read. ## [Primary work] 15th Finance Commission URL: https://indianliberals.in/primary-works/15th-finance-commission-dr-indira-rajaraman-dr-abhay-pethe-dr-c-rangarajan-dr-d-k-srivastava/ ### Summary This Forum of Free Enterprise booklet, edited by Sunil S. Bhandare and sponsored by the Shailesh Kapadia Memorial Trust, compiles three Livemint articles (all May 2018) by four senior Indian economists — Indira Rajaraman, Abhay Pethe, C. Rangarajan and D. K. Srivastava — on the contested Terms of Reference (ToR) of the 15th Finance Commission, constituted in November 2017 and due to submit its recommendations by October 2019 for the award period 2020–25. The collection addresses the most politically charged provision of the ToR — the shift from 1971 to 2011 census population data for determining state shares — as well as the appropriate size of the vertical divisible pool, the use of GST data for measuring taxable capacity, migration-related fiscal strains, and the governance of cities. Bhandare's editorial introduction identifies five cross-cutting themes on which all three articles converge: the intellectual case for using current (2011) population figures, the constitutional question of whether the divisible pool share should be fixed by amendment rather than by each FC, the equalization logic of the formula, the role of GST in revealing true relative taxable capacities, and the neglect of urban local bodies. Indira Rajaraman's essay responds to the April 2018 Thiruvananthapuram meeting of southern finance ministers protesting the 2011-census ToR by dismantling the anti-southern-bias claim: the fall in southern states' statutory shares since the mid-1980s mostly predated FC-14 and largely reflects faster economic growth, a legitimate formula outcome. She then argues constructively that GST provides the first direct cross-state measure of relative taxable capacity (reducing reliance on imperfect SDP proxies) and that temporary migration, uncaptured in census counts, creates real fiscal strains on destination states that need compensation — defending finance commissions' institutional independence in dealing with their ToR. Abhay Pethe focuses on the population census basis and the composition of the commission itself, strongly endorsing the 2011 figures, dismissing the 'Business As Usual' north-south divide argument as premature, and attributing the real risk of north-south division to the commission's lack of southern representation rather than to the census change. He is also the dissenting voice on the vertical share, arguing that the 14th FC's 42% devolution rate was wrong-headed and should be reduced to 36%, while pressing for better fiscal provision for urban local bodies. C. Rangarajan and D. K. Srivastava co-author the third article, raising the possibility of a constitutional amendment to fix the vertical divisible-pool share permanently — removing it from each Finance Commission's discretion — and arguing that equalization and growth are not in tension. Together with Rajaraman and Pethe they converge on endorsing 2011 census figures and rejecting the 1971 freeze as 'irrelevant and long-outdated'. ### Body ## Summary This Forum of Free Enterprise booklet, edited by Sunil S. Bhandare and sponsored by the Shailesh Kapadia Memorial Trust, compiles three Livemint articles (all May 2018) by four senior Indian economists on the contested Terms of Reference (ToR) of the 15th Finance Commission, constituted in November 2017 and due to submit its recommendations by October 2019 for the award period 2020–25. The collection addresses the most politically charged provision of the ToR — the shift from 1971 to 2011 census population data for determining state shares — as well as the appropriate size of the vertical divisible pool, the use of GST data for measuring taxable capacity, migration-related fiscal strains, and the governance of cities. Bhandare's editorial introduction identifies five cross-cutting themes on which all three articles converge: the intellectual case for using current (2011) population figures, the constitutional question of whether the divisible pool share should be fixed by amendment rather than by each FC, the equalization logic of the formula, the role of GST in revealing true relative taxable capacities, and the neglect of urban local bodies. ## Essays ### Essay 0 Sunil S. Bhandare's Editorial Introduction traces the constitutional basis of the Finance Commission under Article 280, reviews the landmark 14th FC decision to raise the states' share in the divisible pool from 32% to 42%, and contextualises the 15th FC's controversial ToR. Bhandare summarises the three collected articles in five pointed observations: all three authors converge on endorsing 2011 census figures; Rangarajan and Srivastava raise the possibility of a constitutional amendment to fix the vertical share permanently; all authors argue that equalization and growth need not be in conflict; Rajaraman highlights GST as a new tool for measuring taxable capacity and flags the problem of temporary migration; and Pethe dissents from the 42% devolution rate, arguing it should be reduced to 36%, while also pressing for better fiscal provision for urban local bodies. - Article 280 mandates a Finance Commission every five years; fourteen have been constituted before the 15th FC. - The 14th FC's unprecedented jump from 32% to 42% state share in the divisible pool forms the baseline context. - All three essays endorse using 2011 census population data and reject the 1971 freeze as 'irrelevant and long-outdated'. - Rangarajan and Srivastava float the idea of a constitutional amendment to fix the vertical share, removing it from FC discretion. - Pethe controversially argues that the 42% devolution rate was wrong-headed and recommends reduction to 36%, while also advocating fund-flows to urban local bodies. ### The Southern Alliance and the 15th Finance Commission *By Dr. Indira Rajaraman* Rajaraman's essay responds to the April 2018 meeting of finance ministers from Tamil Nadu, Kerala, Karnataka, and Puducherry who convened at Thiruvananthapuram to protest the 15th FC's ToR — specifically the direction to use 2011 census data. She dismantles the claim of anti-southern bias in this shift, arguing that the fall in southern states' statutory shares over the past two decades predated FC-14 and largely reflects faster economic growth, which is a legitimate formula outcome rather than discrimination. She then turns constructive, making two significant arguments: first, that the arrival of GST provides, for the first time, a direct measure of relative taxable capacity across states, reducing the need to rely on imperfect state domestic product proxies; and second, that temporary migration — not captured in census counts — creates real fiscal strains on destination states that are not adequately compensated. She concludes by defending the institutional independence of finance commissions from their ToR, noting that a strong tradition exists by which commissions deal with their terms as they choose. - The southern states' declining statutory share since the mid-1980s is largely due to faster economic growth — a formula consequence, not an anti-southern bias. - More than 90% of the post-2000 drop in southern shares happened before FC-14, while the 1971 census freeze was still in force. - GST provides the first close approximation to relative taxable base across states, reducing reliance on state domestic product as a proxy. - Temporary migration (estimated at 9 million per year net, or 27 million gross) creates infrastructure strains on destination states not reflected in census-based entitlements. - Delhi, as a Union territory, is excluded from FC calculations even though it is the largest migrant destination; Rajaraman suggests a carve-out from the divisible pool for Union territories. - Finance commissions have an established institutional tradition of treating their ToR freely — the independence of the commission is itself a safeguard. ### Why 15th FC ToR flaws need to be addressed urgently *By Dr. Abhay Pethe* Pethe's article opens by establishing the Finance Commission's constitutional function as the arbiter of grant-in-aid to states and local bodies for ensuring equity in public service delivery. He focuses on two specific ToR elements: the population census basis and the composition of the commission itself. On population, he strongly endorses switching to 2011 figures, dismissing the 'Business As Usual' north-south divide argument as premature and arguing the 15th FC has the capacity to manage the transition through adjusted weighting. He attributes the real risk of north-south division not to the census change but to the commission's lack of southern representation. The essay continues past the 20 pages rendered. - The Finance Commission determines grant-in-aid to states and local bodies under Article 280, aiming for equity in public service delivery across India. - The 1971 census, used as the basis for the last ten FCs with NDC support, is described as 'an irrelevant and long-outdated statistical dataset'. - The current population is the best measure of states' 'need'; even Panchayati Raj Institutions and Urban Local Bodies computations already use latest population figures. - The north-south divide argument is challenged as a 'Business As Usual' scenario that underestimates the 15th FC's ability to reduce weight on the population criterion. - The more probable cause of north-south tension is the commission's lack of representation from southern states — a composition problem, not a formula problem. --- ## [Primary work] A Blueprint for Eradication of Poverty URL: https://indianliberals.in/primary-works/a-blueprint-for-eradication-of-poverty-dr-b-p-godrej-december-15-1980/ ### Summary Delivered as a public lecture under the auspices of the Forum of Free Enterprise in Bombay on 16 September 1980 and published as a pamphlet in December of that year, Dr. B. P. Godrej's address opens by naming poverty and unemployment as India's greatest crises. Drawing on official surveys and press reports, he establishes that more than 356 million Indians lived below the poverty line in 1978—defined as the caloric threshold below which a worker cannot perform a full day's labour—and that malnutrition was measurably depressing the cognitive development of the rural poor. The first half of the lecture dissects the causes of this failure. Godrej argues that the ideological adoption of a dominant public sector, without regard for India's actual conditions, had produced a nationalised economy that could not deliver energy, transport, or industrial goods efficiently. The government sector absorbed Rs. 15,000 crores of investment yet chronically underperformed; monopolistic bank employees exploited their captive position; and the Monopolies and Restrictive Trade Practices Act starved legitimate private enterprise of licences and room to grow.… ### Body ## Summary Delivered as a public lecture under the auspices of the Forum of Free Enterprise in Bombay on 16 September 1980 and published as a pamphlet in December of that year, Dr. B. P. Godrej's address opens by naming poverty and unemployment as India's greatest crises. Drawing on official surveys and press reports, he establishes that more than 356 million Indians lived below the poverty line in 1978—defined as the caloric threshold below which a worker cannot perform a full day's labour—and that malnutrition was measurably depressing the cognitive development of the rural poor. The first half of the lecture dissects the causes of this failure. Godrej argues that the ideological adoption of a dominant public sector, without regard for India's actual conditions, had produced a nationalised economy that could not deliver energy, transport, or industrial goods efficiently. The government sector absorbed Rs. 15,000 crores of investment yet chronically underperformed; monopolistic bank employees exploited their captive position; and the Monopolies and Restrictive Trade Practices Act starved legitimate private enterprise of licences and room to grow. Confiscatory personal and corporate tax rates drove capital underground, rewarding evasion rather than production. Agriculture, neglected in favour of state industry, lagged at half world-average yields despite India's unique endowment of arable land. The second half, under the heading 'THE SOLUTION', offers a programme anchored in free-market democratic capitalism. Godrej's first priority is population control by persuasion, backed by a dedicated well-funded ministry staffed by serious administrators rather than publicity-conscious figures. His second priority is a sound economic policy capable of delivering at least three per cent per annum real per-capita growth—something he judges unachievable without surgery on the present system: liberalisation of the private sector, conversion of government units to joint-stock enterprises with professional chief executives, rationalisation of tax rates to end evasion, and an ambitious national water-management scheme that could simultaneously address unemployment and food security. He draws on the post-war trajectories of Germany and Japan to argue that democratic capitalism—not aid or reparations—is the reliable engine of mass welfare, and cites international data showing that development assistance sent from Germany to the Third World returns one-and-a-half times its value to Germany itself. The lecture closes with a humanist coda: the ultimate desideratum is not poverty eradication as a statistic but the happiness of all people, and every child deserves freedom, bread, and enlightenment—in that order. ## Key points - Over 356 million Indians (50% of the population) lived below the poverty line in 1978, defined by a caloric floor that adult male labourers were failing to meet. - The state-dominated industrial policy produced a public sector absorbing Rs. 15,000 crores in investment while chronically underdelivering on energy, transport, and consumer goods. - Confiscatory personal and corporate tax rates—the highest among developed countries—drove massive evasion of taxes and accumulation of unaccounted money, harming honest taxpayers. - Agricultural neglect left India's per-hectare yields at roughly half the world average despite the country having a uniquely large share of arable land. - The lecture's solution calls for a minimum 3% real per-capita annual growth, achievable only through free-market reform, tax rationalisation, professional management of public assets, and a national water-management scheme. - Germany and Japan are cited as proof that democratic capitalism, not socialist planning, is the reliable post-war route to prosperity; the Soviet path produced neither quality consumer goods nor adequate agricultural output. - The lecture ends with a three-fold aspiration for every child: Freedom, Bread, and Enlightenment—with freedom ranked first because a tyrant can deny bread to those who lack it. --- ## [Primary work] A Drastic Budget URL: https://indianliberals.in/primary-works/a-drastic-budget-n-a-palkhivala-1959/ ### Summary Delivered under the auspices of the Forum of Free Enterprise in Bombay on 9 March 1959 and subsequently printed as a pamphlet, "A Drastic Budget" is N. A. Palkhivala's forensic assault on the Union Budget for 1959–60. Speaking as one of India's leading tax lawyers, Palkhivala argues that the Budget is the most destructive India has seen within living memory — not merely harsh in its rates but reckless in its drafting, illogical in its structure, and contemptuous of parliamentary scrutiny. His central charge is that year-on-year legislative churn, driven by what he sardonically labels a 'dynamic' ideology, has stripped the tax code of its two most essential qualities: stability and certainty. The speech works through the three major direct taxes in turn. On income-tax, Palkhivala condemns the proposed abolition of the grossing-up of dividends principle, a long-standing safeguard against double taxation of shareholders, and attacks the arbitrary hiking of mandatory dividend declarations under Section 23A with no justification in changed economic circumstances. On wealth-tax, he shows arithmetically that a salaried professional with a capital of just Rs.… ### Body ## Summary Delivered under the auspices of the Forum of Free Enterprise in Bombay on 9 March 1959 and subsequently printed as a pamphlet, "A Drastic Budget" is N. A. Palkhivala's forensic assault on the Union Budget for 1959–60. Speaking as one of India's leading tax lawyers, Palkhivala argues that the Budget is the most destructive India has seen within living memory — not merely harsh in its rates but reckless in its drafting, illogical in its structure, and contemptuous of parliamentary scrutiny. His central charge is that year-on-year legislative churn, driven by what he sardonically labels a 'dynamic' ideology, has stripped the tax code of its two most essential qualities: stability and certainty. The speech works through the three major direct taxes in turn. On income-tax, Palkhivala condemns the proposed abolition of the grossing-up of dividends principle, a long-standing safeguard against double taxation of shareholders, and attacks the arbitrary hiking of mandatory dividend declarations under Section 23A with no justification in changed economic circumstances. On wealth-tax, he shows arithmetically that a salaried professional with a capital of just Rs. 2 lakhs could face a combined income-tax, super-tax, and wealth-tax burden exceeding 109 per cent of his investment income, a result he calls a reductio ad absurdum of the Welfare State. On expenditure-tax, he exposes how the Finance Bill proposes to extend the tax's reach to ordinary property maintenance, gifts from third parties, and family expenditure — all while the Notes on Clauses attached to the Bill are, in his view, not merely misleading but positively fraudulent in their description of the proposed changes. Palkhivala closes with a broader political indictment: the Five-Year Plans, he argues, divert a large share of the enormous sums raised by punitive taxation into waste and scandal, while the national income twenty years hence will still leave India among the world's poorest nations. He contrasts India's direct-tax ceiling — which already exceeds 100 per cent of income at certain wealth levels — with the 11 per cent maximum in the Soviet Union and the practice of no other country in the world. The conclusion is that a Welfare State which denies a citizen the fruits of his own labour is a contradiction in terms. ## Key points - The 1959 Union Budget is characterised as the most drastic in India's living memory, militating against capital formation and the financial policy the government itself professes. - Abolition of the grossing-up principle for dividends will result in effective double taxation of shareholders, reducing the yield on middle-class equity investments. - Mandatory dividend percentages under Section 23A are raised yet again — for the twelfth time in a few years — without any rational economic justification, exemplifying the instability of Indian tax law. - The combined income-tax, super-tax, and wealth-tax on investment income of a person with Rs. 2 lakhs in capital can exceed 109 per cent of that income — a burden Palkhivala calls irrational and internationally unique. - The Expenditure-tax Act amendments extend the tax to property maintenance, third-party gifts, and family expenditure while the accompanying Notes on Clauses are described as actively misleading Parliament. - Important amendments are routinely introduced through Finance Bills that bypass Select Committee scrutiny, which Palkhivala characterises as oligarchy rather than democracy. - Twenty years of Five-Year Plan spending will still leave India among the world's poorest nations; a large portion of tax receipts is wasted on public-sector scandals and extravagance. - No other country in the world levies direct taxes aggregating more than 100 per cent of income; India's tax structure is divorced from all considerations of justice and fairplay. --- ## [Primary work] A FREE PRESS IS LINKED WITH FREE ENTERPRISE & A FREE SOCIETY URL: https://indianliberals.in/primary-works/a-free-press-is-linked-with-free-enterprise---a-free-society-by-dr-sachin-sen-june-8-1960/ ### Summary In this brief 1960 leaflet — originally published in the New Delhi journal 'The Editor' and reprinted by the Forum of Free Enterprise — Dr. Sachin Sen, then editor of the 'Indian Nation' (Patna) and former President of the All-India Newspaper Editors' Conference, argues that a free press is structurally inseparable from free enterprise and a free society. His core claim is that democracy requires autonomous institutions, and the press must function as one such institution: free from State coercion, free from party discipline, and free from the obligation to serve any government's ideological agenda. Sen draws a pointed contrast between liberal democracy and Communist democracy. In a liberal democracy, freedom of the press means access to objective truths; in a communist party-state, the press merely transmits party truths. He insists that press freedom consists in the freedom to gather, print, and comment on news without prompting from any extraneous authority — and that any newspaper feeding its readers one-sided views may win political battles but does not serve the cause of liberal democracy. The leaflet closes with a direct warning: those who frown on free enterprise and a free society are the grave-diggers of the free Press. ### Body ## Summary In this brief 1960 leaflet — originally published in the New Delhi journal 'The Editor' and reprinted by the Forum of Free Enterprise — Dr. Sachin Sen, then editor of the 'Indian Nation' (Patna) and former President of the All-India Newspaper Editors' Conference, argues that a free press is structurally inseparable from free enterprise and a free society. His core claim is that democracy requires autonomous institutions, and the press must function as one such institution: free from State coercion, free from party discipline, and free from the obligation to serve any government's ideological agenda. Sen draws a pointed contrast between liberal democracy and Communist democracy. In a liberal democracy, freedom of the press means access to objective truths; in a communist party-state, the press merely transmits party truths. He insists that press freedom consists in the freedom to gather, print, and comment on news without prompting from any extraneous authority — and that any newspaper feeding its readers one-sided views may win political battles but does not serve the cause of liberal democracy. The leaflet closes with a direct warning: those who frown on free enterprise and a free society are the grave-diggers of the free Press. ## Key points - The Press must function as an autonomous institution, not a subservient arm of the State or ruling party. - Democracy demands that the Press be nurtured as an autonomous institution because the State, though supreme in theory, is in practice controlled by those who hold the coercive apparatus. - A sharp contrast is drawn between liberal democracy (where press freedom means access to objective truths via trial-and-error methods) and Communist democracy (where the press is an organ of party truths). - Press freedom is defined operationally: the freedom to gather and receive news and to comment on it, without prompting from any extraneous authority. - Pressmen are not artillery for any party or government; their role is to serve society and to widen the horizon of the people. - A newspaper may win a political bout with one-sided news but it does not serve the cause of liberal democracy. - Free press, free enterprise, and free society are presented as a single, mutually dependent triad — opponents of any one are 'the grave-diggers of the free Press'. --- ## [Primary work] A Historic Budget URL: https://indianliberals.in/primary-works/a-historic-budget-by-hp-ranina-april-13-1994/ ### Summary This 19-page FFE pamphlet, based on a talk delivered by tax lawyer H.P. Ranina at a public meeting in Bombay on 1 March 1994, offers a detailed commentary on Dr. Manmohan Singh's fourth Union Budget (1994-95). Ranina frames the budget as 'historic' because it advances three inter-linked objectives: structural simplification of indirect-tax law, acceleration of industrial liberalisation out of recession, and a push toward full current-account convertibility within three years. Writing from a free-enterprise standpoint, he celebrates the corporate sector's gains — reductions in corporate tax rates, long-term capital gains tax, and import duties — while flagging two adverse provisions: the move of the first advance-tax instalment to 15 June and the shortening of the filing deadline to 31 October. A substantial section is devoted to the revamping of capital gains law, where Ranina explains at length how the Finance Bill, 1994 proposes to override settled Supreme Court interpretations on self-generated assets (citing CIT v. BC Srinivasa Setty, 128 ITR 294 SC, and Ms. Dhun Dadabhoy Kapadia v.… ### Body ## Summary This 19-page FFE pamphlet, based on a talk delivered by tax lawyer H.P. Ranina at a public meeting in Bombay on 1 March 1994, offers a detailed commentary on Dr. Manmohan Singh's fourth Union Budget (1994-95). Ranina frames the budget as 'historic' because it advances three inter-linked objectives: structural simplification of indirect-tax law, acceleration of industrial liberalisation out of recession, and a push toward full current-account convertibility within three years. Writing from a free-enterprise standpoint, he celebrates the corporate sector's gains — reductions in corporate tax rates, long-term capital gains tax, and import duties — while flagging two adverse provisions: the move of the first advance-tax instalment to 15 June and the shortening of the filing deadline to 31 October. A substantial section is devoted to the revamping of capital gains law, where Ranina explains at length how the Finance Bill, 1994 proposes to override settled Supreme Court interpretations on self-generated assets (citing CIT v. BC Srinivasa Setty, 128 ITR 294 SC, and Ms. Dhun Dadabhoy Kapadia v. CIT, 63 ITR 651) and to deem nil the cost of acquisition for tenancy rights, route permits, and loom hours. He also analyses the treatment of rights entitlement and the unchanged capital gains structure for Foreign Institutional Investors, arguing that the Government should abolish capital gains tax altogether subject to reinvestment conditions, so as to align FII and domestic investor treatment. Ranina then turns to presumptive taxation, noting that India's 150-million-strong middle class yields only 8 million taxpayers, and explaining the new Sections 44-AD (civil construction contracts up to Rs. 40 lakhs, income estimated at 8% of gross receipts) and 44-AE (truck operators owning up to ten trucks, income estimated at Rs. 2,500 per heavy-goods vehicle per month). The final section, 'Further Liberalisation Measures', endorses export-earnings retention at 25%, tourism liberalisation (U.S. $2,000 per year for foreign travel), full foreign-exchange liberalisation for medical and educational purposes, and the halving of hotel-expenditure tax from 20% to 10%. Ranina concludes that 1994-95 will see liberalisation bear fruit through industrial growth, rising GDP, burgeoning forex reserves, greater FDI inflow, and, above all, more employment for the poor. ## Key points - Budget 1994-95 identified as historic for its structural overhaul of customs and excise law, pace-setting on liberalisation, and push toward full convertibility within three years. - Corporate sector is the principal beneficiary: cuts in corporate tax, long-term capital gains tax, and import duties; extension of Modvat to capital goods and petroleum; excise restructuring toward ad valorem rates and a future VAT. - Finance Bill, 1994 overrides Supreme Court judgments on self-generated assets by deeming nil the cost of acquisition for tenancy rights, route permits, and loom hours — a move Ranina treats as legally significant. - Capital gains tax structure for FIIs left unchanged; Ranina argues for total abolition conditioned on reinvestment, to remove discrimination against domestic investors. - Presumptive taxation schemes (Sections 44-AD for civil contractors, 44-AE for truck operators) aim to widen the tax base from the anemic 8-million taxpayer count in a 150-million middle-class country. - Exporters may now retain 25% of earnings in foreign currency; Indians permitted U.S. $2,000 per year for foreign travel; hotel expenditure tax halved from 20% to 10%. - Government to prepay IMF obligations ahead of schedule; Rupee expected to remain strong, requiring RBI intervention to protect exporters. - Ranina projects that 1994-95 will produce higher industrial growth, rising GDP, growing forex reserves, larger FDI, and greater employment for the poor. --- ## [Primary work] A Formula for Increasing Agricultural Production URL: https://indianliberals.in/primary-works/a-formula-for-increasing-agricultural-production-by-ma-sreenivasan-march-8-1964/ ### Summary In this four-page FFE leaflet dated 8 March 1964, M. A. Sreenivasan — a former Minister of Agriculture in Mysore and a plantation-sector authority — argues that India's coffee industry achieved its remarkable production gains in the decade 1950–1960 precisely because it was left relatively free from bureaucratic interference. Coffee output more than tripled over those ten years, earning the country substantial foreign exchange, and the plantation companies paid significant taxes while providing housing, water, canteens, and crèches to their workers and families. Sreenivasan attributes this success to the freedom planters enjoyed to manage their own estates without the encroachments that hamper other agricultural sectors. The bulk of the essay is a detailed indictment of the legislative and fiscal assault that cut short this freedom from around 1962 onward.… ### Body ## Summary In this four-page FFE leaflet dated 8 March 1964, M. A. Sreenivasan — a former Minister of Agriculture in Mysore and a plantation-sector authority — argues that India's coffee industry achieved its remarkable production gains in the decade 1950–1960 precisely because it was left relatively free from bureaucratic interference. Coffee output more than tripled over those ten years, earning the country substantial foreign exchange, and the plantation companies paid significant taxes while providing housing, water, canteens, and crèches to their workers and families. Sreenivasan attributes this success to the freedom planters enjoyed to manage their own estates without the encroachments that hamper other agricultural sectors. The bulk of the essay is a detailed indictment of the legislative and fiscal assault that cut short this freedom from around 1962 onward. Sreenivasan catalogs the layered taxes — a Mysore agricultural income-tax raised from 25% to 40% then to 60%, Kerala excise duties on Arabica coffee, a 20% surcharge, fresh duties on Robusta — plus two new Acts (the Mysore Agricultural Income-Tax Amendment Act and the Mysore Forest Bill) and a mandatory fidelity-guarantee insurance scheme administered exclusively through the government-owned Life Insurance Corporation at a premium of Rs. 1,250 per year. He shows that by 1963 taxation consumed over 57% of a bumper crop and that the slab system falls most heavily on large companies, incentivising subdivision and fragmentation of plantations. He also attacks a Company Law amendment that bars deduction of directors' remuneration as a legitimate business expense. Together, he argues, these measures have reversed the production incentive: output is falling, not growing. Sreenivasan closes with a plea to the Planters' Associations and the U.P.A.S.I. to press for a legislative reversal, and asserts that if the industry is granted another decade of the relative freedom it enjoyed in the 1950s it can reach still higher production peaks and earn more foreign exchange. The essay is squarely in the FFE mould of policy advocacy: free the producer, reduce taxation, remove bureaucratic controls, and output will follow. ## Key points - Coffee production in Mysore more than tripled between 1950 and 1960 under conditions of relative economic freedom, earning valuable foreign exchange and vindicating a market-friendly model. - From 1962 onward a cascade of taxation — Mysore agricultural income-tax raised in steps to 60%, excise duties on Arabica and Robusta, and a 20% surcharge — consumed over 57% of a bumper crop by 1963. - The slab-rate system penalises large plantation companies disproportionately, incentivising subdivision of holdings: the number of holdings of 250 acres and above fell from 227 to 157 over seven years while sub-10-acre holdings rose to 38,000. - New legislation (Mysore Agricultural Income-Tax Amendment Act, Mysore Forest Bill) and a mandatory LIC fidelity-guarantee insurance scheme at Rs. 1,250 per year added further non-tax burdens. - A Company Law amendment that disallows directors' remuneration as a deductible expense is singled out as an especially counterproductive measure. - Sreenivasan argues that paddy cannot be produced by legislation nor coffee grown by exhortation or export drives — only boom or near-boom conditions for the grower will raise output. - The essay calls on the Planters' Associations and U.P.A.S.I. to lobby for a reversal of recent deals and a restoration of the freedom the industry enjoyed in the previous decade. --- ## [Primary work] A Job-Oriented Fifth Five-Year Plan URL: https://indianliberals.in/primary-works/a-job-oriented-fifth-year-plan-j-m-lobo-prabhu-september-15-1972/ ### Summary J. M. Lobo Prabhu, a retired ICS officer, economist, and former Member of Parliament, argues in this 1972 Forum of Free Enterprise pamphlet that India's forthcoming Fifth Five-Year Plan will fail unless it reorients itself around full employment as the primary goal rather than treating employment as a by-product of aggregate development. He opens with the stark observation that the Plan must offer work to five million registered unemployed and many times that number in rural areas — including 80 million agricultural workers with only five months of employment per year — and warns that persisting with the existing approach will produce nothing more than another five-year collection of budgets providing restrictions rather than resources. The bulk of the essay advances a series of institutional and sectoral proposals. On institutional design, Lobo Prabhu calls for a Bureau of Agricultural Costs and Prices to set rational floor prices, a Bureau of Wages and Fees to anchor all wages to a minimum pegged at 25 per cent below current market rates, a Bureau of Construction Rates and Costs to stabilise the building sector, and anti-corruption vigilance committees at every district level.… ### Body ## Summary J. M. Lobo Prabhu, a retired ICS officer, economist, and former Member of Parliament, argues in this 1972 Forum of Free Enterprise pamphlet that India's forthcoming Fifth Five-Year Plan will fail unless it reorients itself around full employment as the primary goal rather than treating employment as a by-product of aggregate development. He opens with the stark observation that the Plan must offer work to five million registered unemployed and many times that number in rural areas — including 80 million agricultural workers with only five months of employment per year — and warns that persisting with the existing approach will produce nothing more than another five-year collection of budgets providing restrictions rather than resources. The bulk of the essay advances a series of institutional and sectoral proposals. On institutional design, Lobo Prabhu calls for a Bureau of Agricultural Costs and Prices to set rational floor prices, a Bureau of Wages and Fees to anchor all wages to a minimum pegged at 25 per cent below current market rates, a Bureau of Construction Rates and Costs to stabilise the building sector, and anti-corruption vigilance committees at every district level. He argues that the Joint Sector — with mandatory minimum public dividends and up to 49 per cent private participation — should replace both purely private and purely public enterprise, partly as an anti-inflation device. For agriculture, he proposes 16.6 million hectares of idle land development, a Land Development Corporation, expanded minor irrigation funded without additional Plan allocation, and crop insurance for small farmers. For industry, he indicts the Planning Commission for ignoring data showing that a crore of rupees invested in agriculture yields employment for 4,000 people while heavy industry yields only 500, and calls for an end to the sheltered market conditions and labour regulations that make Indian industry uncompetitive. On trade, he is sharply critical of the State Trading Corporation, arguing that its import monopoly insulates domestic prices from international competition and suppresses export competitiveness, as illustrated by steel pipes and tubes selling abroad at Rs. 915 per tonne while the internal price was Rs. 2,162. For transport and communications, education, and health, he offers detailed Plan-allocation critiques, advocating Railway conversion to the joint sector, a Kerala-style shift-system in schools to absorb illiterates, and a frank assessment that Family Planning expenditure (Rs. 437 crores) has failed. The essay closes with a finance section arguing that an employment-oriented plan need add only Rs. 5,000 crores to the Fourth Plan baseline and that the Planning Commission's Rs. 30,000 crore total would be dangerously inflationary. ## Key points - The central argument is that employment must be the primary goal of the Fifth Plan, not a by-product: 'Development being a product of full employment' rather than employment being a by-product of development. - Four new institutional bureaux are proposed: Agricultural Costs and Prices, Wages and Fees (with a minimum wage 25 per cent below current wages), Construction Rates and Costs, and Industrial Costs and Prices — all intended to introduce transparency and curb inflation. - The Joint Sector model — combining public minimum dividends with up to 49 per cent private participation — is presented as the solution to both the inefficiency of state enterprises and the anti-social tendencies of purely private capital. - Lobo Prabhu marshals productivity-per-rupee figures from Prof. Mahalanobis to show that agriculture and roads create far more employment per crore of investment than heavy industry, and criticises the Planning Commission for ignoring these ratios. - The State Trading Corporation and Cotton Corporation are singled out for practices that raise internal prices, suppress exports, and enrich intermediaries at the expense of producers and consumers. - 16.6 million hectares of idle and waste land are identified as developable for agriculture, and the Maharashtra Government's Standing Offer of Work programme is held up as a constitutional model the Fifth Plan should generalise. - The total Plan outlay proposed by the Commission (Rs. 30,000 crores) is condemned as inflationary; Lobo Prabhu argues the employment objectives can be met by adding only Rs. 5,000 crores to the Fourth Plan baseline. --- ## [Primary work] A Look at the Bombay Plan in the Light of Today URL: https://indianliberals.in/primary-works/a-look-at-the-bombay-plan-in-the-light-of-today-h-v-r-iengar-january-11-1968/ ### Summary Delivered as the Second A. D. Shroff Memorial Lecture in Bombay on 27 October 1967 and published as a Forum of Free Enterprise booklet on 11 January 1968, H. V. R. Iengar's address takes the 1944 Bombay Plan — co-authored by A. D. Shroff alongside Purshotamdas Thakurdas, J. R. D. Tata, G. D. Birla, Sriram, Kasturbhai Lalbhai and John Matthai — as a mirror for India's later experience with state planning. Iengar reads the Bombay Plan as the prototype of the post-independence Planning Commission's approach: massive State intervention, a mixed economy with public-sector primacy, emphasis on heavy industry, foreign capital, and deficit financing. He argues that the Planning Commission "got its inspiration from the Bombay plan", and that A. D. Shroff himself was, in 1944, one of its principal proponents. The core of the lecture explains why Shroff later broke with that doctrine and set up the Forum of Free Enterprise in 1956.… ### Body ## Summary Delivered as the Second A. D. Shroff Memorial Lecture in Bombay on 27 October 1967 and published as a Forum of Free Enterprise booklet on 11 January 1968, H. V. R. Iengar's address takes the 1944 Bombay Plan — co-authored by A. D. Shroff alongside Purshotamdas Thakurdas, J. R. D. Tata, G. D. Birla, Sriram, Kasturbhai Lalbhai and John Matthai — as a mirror for India's later experience with state planning. Iengar reads the Bombay Plan as the prototype of the post-independence Planning Commission's approach: massive State intervention, a mixed economy with public-sector primacy, emphasis on heavy industry, foreign capital, and deficit financing. He argues that the Planning Commission "got its inspiration from the Bombay plan", and that A. D. Shroff himself was, in 1944, one of its principal proponents. The core of the lecture explains why Shroff later broke with that doctrine and set up the Forum of Free Enterprise in 1956. Quoting at length from the Forum's manifesto, Iengar locates the difference "in two things": the Forum demands the greatest possible scope for private enterprise rather than a vast and rapidly expanding public sector, and the reduction of controls to a minimum so that a market economy can operate. He traces Shroff's growing disillusion through the 1960 speech "Controls in a Planned Economy", in which Shroff condemned licensing, capital-issue and foreign-exchange controls as bad in practice however defensible in theory — a "wintry despair" compared with the "high noon" of the Bombay plan. Iengar then offers his own diagnosis of why India's planning experiment has disappointed. The Bombay Plan and the Government plans both assumed two impossible conditions — a Government in real rapport with the people, and an efficient administrative machinery for executing controls and public-sector projects — and both assumptions, he says, have proved false. Repeated electoral dominance by a monolithic Congress bred doctrinaire intolerance of criticism; treatment of industry as "anti-social and unpatriotic"; proliferation of red tape; and a bureaucracy demoralised in the face of an impossible task. He recalls J. R. D. Tata's call (later vindicated by events) for a "plan holiday" after the third Five-Year Plan, and his own self-censored years at the Reserve Bank as illustrations of the price India pays for the "fear complex" between business and Government. The lecture closes with a guarded liberal optimism. The Forum's manifesto — which rejects both nineteenth-century laissez-faire and Marxist state ownership in favour of "socially responsible private initiative" within a planned economy — would, Iengar argues, form the best foundation for economic progress. India is passing through a transitional stage between forces of property rights and the Rule of Law on one side and forces of expropriation and "revolution through chaos" on the other; survival of the liberal option depends on frank speech, governmental willingness to listen, and the special responsibility resting on business leaders — "Herein lies the great example of A. D. Shroff." A short editorial biography of Shroff and the Forum's standard membership pages close the booklet. ## Key points - Iengar argues that the 1944 Bombay Plan — co-authored by A. D. Shroff with Thakurdas, Tata, Birla, Sriram, Kasturbhai Lalbhai and John Matthai — supplied the template of massive State intervention later adopted by the Planning Commission of India. - The Bombay Plan envisaged doubling per-capita income in 15 years at a total outlay of Rs. 10,000 crores (about Rs. 50,000–60,000 crores at late-1960s prices), and explicitly required rigorous State controls including price-fixation, dividend limits and licensing. - Shroff's subsequent founding of the Forum of Free Enterprise in 1956 and his 1960 lecture "Controls in a Planned Economy" mark a substantive break from his Bombay-Plan-era acceptance of "rigorous" State control. - The Forum's manifesto, which Iengar endorses, rejects both nineteenth-century laissez-faire and Marxist state-ownership, advocating instead "socially responsible private initiative" within a planned but market-led economy. - Iengar identifies two false assumptions behind Indian planning: real rapport between Government and people, and an efficient bureaucracy capable of administering controls and public-sector projects. - He attributes the Congress regime's intolerance of criticism, doctrinaire posture and proliferation of red tape to the monolithic dominance of a single party — a condition only now beginning to loosen. - He invokes J. R. D. Tata's earlier proposal for a 'plan holiday' after the third Five-Year Plan, noting that events ultimately forced Government to adopt it. - The lecture closes by framing India as passing through a transitional contest between forces of property rights and the Rule of Law and forces of expropriation and revolutionary chaos, and assigns a 'special responsibility' to business leaders to defend the liberal option. --- ## [Primary work] A National Water Policy for India URL: https://indianliberals.in/primary-works/a-national-water-policy-for-india-k-l-rao-15-december-1975/ ### Summary Dr. K. L. Rao, a former Union Minister for Power and Irrigation, delivers the A. D. Shroff Memorial Lecture for the Forum of Free Enterprise (27 October 1975, Delhi) on India's looming water crisis and the case for a planned, integrated, nation-level response. He frames water — alongside air — as the binding physical constraint on the future progress of mankind: the world's stock is fixed, demand is rising, and pollution and evaporation are eroding what is usable. India's resources are erratic by geography and monsoon: 14 major and 44 medium rivers carry roughly 90% of the flow, total annual river flow averages about 1,645 thousand million cubic metres, and ground water adds another 2,55,000 million cum — but only about half is usable, and storage today captures only 15% of that. Rao argues that irrigation is the decisive lever for Indian agriculture and that the popular line that 'minor irrigation will be sufficient' is propaganda. He benchmarks Indian foodgrain output against the U.S.A., U.S.S.R.… ### Body ## Summary Dr. K. L. Rao, a former Union Minister for Power and Irrigation, delivers the A. D. Shroff Memorial Lecture for the Forum of Free Enterprise (27 October 1975, Delhi) on India's looming water crisis and the case for a planned, integrated, nation-level response. He frames water — alongside air — as the binding physical constraint on the future progress of mankind: the world's stock is fixed, demand is rising, and pollution and evaporation are eroding what is usable. India's resources are erratic by geography and monsoon: 14 major and 44 medium rivers carry roughly 90% of the flow, total annual river flow averages about 1,645 thousand million cubic metres, and ground water adds another 2,55,000 million cum — but only about half is usable, and storage today captures only 15% of that. Rao argues that irrigation is the decisive lever for Indian agriculture and that the popular line that 'minor irrigation will be sufficient' is propaganda. He benchmarks Indian foodgrain output against the U.S.A., U.S.S.R. and China, noting that India farms 16% of the world's foodgrain area but produces only 9%, that Punjab (with 80% irrigation) far outproduces Madhya Pradesh (with 8%) per unit land, and that irrigation today still reaches only about 25% of India's sown area. He also surveys non-agricultural demands — urban water supply (Delhi from 2 million gallons/day in 1896 toward an expected 1,000 million gallons/day by century's end), industry, hydro and thermal power cooling, fishing and recreation — and warns about sewage pollution at Banaras on the Ganga and at Delhi on the Jamuna. The heart of the lecture is a centralising policy prescription. Drawing on California's 5,200 million cum north-to-south transfer, Soviet inter-basin plans, and India's earlier Periyar, Jamuna and Indus diversions, Rao endorses a 'National Water Grid' — a Brahmaputra–Ganga–Son–Cauvery link via Farakka, with a feeder linking the Chambal to the Rajasthan canal at Nagaur — quoting a United Nations team that says such a grid 'will be a necessity' by the year 2000. To execute it he calls for the formal declaration of a National Water Policy and the creation of a National Water Authority chaired by the Prime Minister, on the premise that the waters of the country belong to the nation and not to its states. He frames cooperation with Nepal, Bangla Desh, Bhutan and even China on the Brahmaputra as essential, and proposes a 'Bhagirath Service' — a citizens' national service for cheap canal construction — alongside cost-saving engineering (system analysis, computer studies, radar rainfall measurement, aerial flood survey) and independent post-valuation of completed projects. He closes with a warning on rising per-acre irrigation costs (from Rs. 300–400 a quarter-century earlier to Rs. 1,500–2,000) and a plea to put planning on a 'correct footing' so that India's precious water reaches all in good time. The booklet carries the standard Forum of Free Enterprise disclaimer that the views are not necessarily those of the Forum. ## Key points - Frames water (with air) as the fundamental physical constraint on human progress and warns that pollution and unchecked use are shrinking India's usable share. - Quantifies India's hydrology: 14 major and 44 medium rivers carry ~90% of flow; annual river flow ~1,645 thousand million cubic metres; ground water ~2,55,000 million cum; only half usable and only 15% presently stored. - Rejects the line that 'minor irrigation will be sufficient,' arguing that India produces 9% of world foodgrains from 16% of the area while the U.S.A. produces 17% from 9%, and that Punjab's 80% irrigation outperforms Madhya Pradesh's 8% land-for-land. - Surveys non-agricultural demand — urban supply (Delhi rising toward 1,000 million gallons/day), industry, hydro and thermal cooling — and flags Ganga and Jamuna sewage pollution at Banaras and Delhi. - Endorses inter-basin transfer (citing California, the USSR, Periyar, Jamuna, Indus) and a 'National Water Grid' linking Brahmaputra–Ganga–Son–Cauvery with a Chambal–Rajasthan feeder, citing a UN team's call for a grid by AD 2000. - Calls for a declared National Water Policy and a National Water Authority chaired by the Prime Minister, on the principle that India's waters belong to the nation, not to its constituent states. - Proposes international cooperation with Nepal, Bangla Desh, Bhutan and China — including upper-Brahmaputra dams — to control floods (Ghagra, Rapti, Brahmaputra) and unlock hydro power. - Proposes a 'Bhagirath Service' of citizen-built canal works, cheaper engineering through system analysis and computer studies, and independent post-valuation, in response to per-acre irrigation costs rising from Rs. 300–400 to Rs. 1,500–2,000. --- ## [Primary work] A NEW ECONOMIC POLICY FOR INDIA URL: https://indianliberals.in/primary-works/a-new-economic-policy-for-india-murarji-j-vaidya-november-15-1967/ ### Summary Delivered as the eleventh annual presidential address at the Forum of Free Enterprise in Bombay on October 4, 1967, and published as a booklet by the Forum on 15 November 1967, Murarji J. Vaidya's lecture is a sustained indictment of the Soviet-style centralised comprehensive planning that India adopted from the Second Plan onwards and a manifesto for what he calls a "new economic policy". Vaidya opens by registering the disenchantment with planning that has reached even Indira Gandhi, Dr. S. Radhakrishnan, G. L. Nanda, Jayaprakash Narayan and Planning Commission Deputy Chairman D. R. Gadgil, and reads the 1967 election verdict, via an Indian Institute of Public Opinion analysis, as the country settling "slightly right of centre". He weighs the achievements of fifteen years of planning — a near-doubling of national income, food output rising to a potential 90 million tonnes, an industrial production index up from 73.5 to 200, expanded social services — against a long bill of failures: dependence on food imports, galloping inflation, idle capacity in heavy industry, foreign-exchange assets crashing from Rs.… ### Body ## Summary Delivered as the eleventh annual presidential address at the Forum of Free Enterprise in Bombay on October 4, 1967, and published as a booklet by the Forum on 15 November 1967, Murarji J. Vaidya's lecture is a sustained indictment of the Soviet-style centralised comprehensive planning that India adopted from the Second Plan onwards and a manifesto for what he calls a "new economic policy". Vaidya opens by registering the disenchantment with planning that has reached even Indira Gandhi, Dr. S. Radhakrishnan, G. L. Nanda, Jayaprakash Narayan and Planning Commission Deputy Chairman D. R. Gadgil, and reads the 1967 election verdict, via an Indian Institute of Public Opinion analysis, as the country settling "slightly right of centre". He weighs the achievements of fifteen years of planning — a near-doubling of national income, food output rising to a potential 90 million tonnes, an industrial production index up from 73.5 to 200, expanded social services — against a long bill of failures: dependence on food imports, galloping inflation, idle capacity in heavy industry, foreign-exchange assets crashing from Rs. 1,030 crores to barely above the statutory minimum, public debt swelling to Rs. 15,308 crores, and unemployment back to 12 million on the eve of the Fourth Plan. The core diagnosis is that the Soviet model inverted the natural order of growth by starving agriculture to feed massive heavy industries, and that even the U.S.S.R., Burma, Britain's Labour Party and Soviet enterprises under the Liebermann thesis are now reversing course toward markets and the profit motive. Vaidya then unfolds three lessons. First, agriculture is the "king-pin" of the Indian economy and the farmer must be given price incentives rather than monopoly procurement, food zones and hidden export bonuses that punish both producer and consumer; he cites Ceylonese rice gains and the Administrative Reforms Commission's call to abolish food zones. Second, plans cannot be financed beyond the country's resources: he tracks money supply from Rs. 2,016 crores in 1950–51 to Rs. 4,529 crores by 1965–66, calls inflation "a tax on the cash holdings of the community", and exposes the Reserve Bank's "unfunded debts" as concealed deficit financing. Third, money is more productive in private than in state hands: he marshals Auditor-General figures showing Rs. 9.93 crores returned on Rs. 2,226 crores of central public-sector capital, Punjab audit objections worth Rs. 74 crores, chronic losses at Durgapur, and an Economic and Scientific Research Foundation estimate of Rs. 100 crores per year of lost industrial output from public-sector inefficiency. The prescription is a turn from centralised comprehensive to French-style indicative planning, scrapping of controls, drastic cuts in government expenditure, abolition of confiscatory and Annuity Deposit taxation, and firm restoration of law and order against gheraos and bandhs. Citing Malaysia under Tun Abdul Razak, Britain under James Callaghan and President Lyndon Johnson's Asian Development Bank appeal, Vaidya closes that a new economic policy which releases "the creative energies of the people" is the only route out of stagnation toward prosperity in a free society. ## Key points - The text is the eleventh annual presidential address of the Forum of Free Enterprise, delivered by Murarji J. Vaidya in Bombay on 4 October 1967 and printed as a booklet on 15 November 1967. - Vaidya registers a bipartisan disenchantment with centralised planning, citing Indira Gandhi, Radhakrishnan, G. L. Nanda, Jayaprakash Narayan and D. R. Gadgil, and reads the 1967 elections as a verdict 'slightly right of centre'. - He tabulates planning's achievements (national income, food, industrial index, social services) but argues these are dwarfed by deficits: food imports, inflation of 16.5% in 1966–67, idle heavy-industry capacity, foreign-exchange exhaustion, Rs. 15,308 crores of public debt and 12 million unemployed. - His central thesis is that the Soviet model inverted the natural order of growth by starving agriculture; he insists the farmer is the 'king-pin' of the Indian economy and must be given price incentives, not monopoly procurement and food zones. - He attacks inflation as a hidden tax 'on the cash holdings of the community' engineered by deficit financing concealed in Reserve Bank 'support to public loans' and 'unfunded debts'. - Public-sector enterprises are pilloried with Auditor-General data: Rs. 9.93 crores return on Rs. 2,226 crores of capital, cumulative Hindustan Steel losses of Rs. 59.3 crores, Durgapur losses of Rs. 13 crores, and a national output loss of about Rs. 100 crores per year. - Vaidya invokes the U.S.S.R.'s Liebermann thesis, Burma's reopening of food trade, Britain's Labour Party under James Callaghan, and Malaysia under Tun Abdul Razak as evidence that even socialist economies are retreating toward private enterprise. - The prescription: replace centralised comprehensive planning with French-style indicative planning, scrap controls, abolish confiscatory taxation and the Annuity Deposit Scheme, restore law and order against gheraos and bandhs, and unleash the creative energies of private enterprise. --- ## [Primary work] A Package Plan to Fight Inflation URL: https://indianliberals.in/primary-works/a-package-plan-for-inflation-dr-r-c-cooper-dhirajlal-maganlal-minoo-r-shroff-prof-gangadhar-gadgil-july-1974/ ### Summary A Package Plan to Fight Inflation gathers four public lectures delivered in July 1974 under the auspices of the Forum of Free Enterprise — by Dr. R. C. Cooper (Bangalore Centre, 11 July), Dhirajlal Maganlal (Bombay, 11 July), Minoo R. Shroff (Bombay, 10 July), and Prof. Gangadhar Gadgil (Bombay, 10 July). Speaking against a backdrop of devaluation, a 54.1% rise in the Wholesale Price Index between May 1972 and May 1974, and the spectre of mass unrest already manifest in Gujarat and Bihar, the four contributors converge on a common diagnosis: India's inflation is not an imported accident but the cumulative product of deficit financing, heavy-industry-biased planning, licensing-permit raj, hoarding, and the suffocation of agriculture and consumer-goods output. ### Body ## Summary A Package Plan to Fight Inflation gathers four public lectures delivered in July 1974 under the auspices of the Forum of Free Enterprise — by Dr. R. C. Cooper (Bangalore Centre, 11 July), Dhirajlal Maganlal (Bombay, 11 July), Minoo R. Shroff (Bombay, 10 July), and Prof. Gangadhar Gadgil (Bombay, 10 July). Speaking against a backdrop of devaluation, a 54.1% rise in the Wholesale Price Index between May 1972 and May 1974, and the spectre of mass unrest already manifest in Gujarat and Bihar, the four contributors converge on a common diagnosis: India's inflation is not an imported accident but the cumulative product of deficit financing, heavy-industry-biased planning, licensing-permit raj, hoarding, and the suffocation of agriculture and consumer-goods output. ## Essays ### I. Some Practical Measures *By DR. R. C. COOPER* Dr. R. C. Cooper opens the volume with a programme of 'some practical measures' to attack the basic causes of inflation. He argues that committees and notifications cannot help — only a fundamental change of attitude can — and lists what such a change would mean in operation: scrapping the licence-permit-quota system rather than tinkering with it, narrowing the Monopolies and Restrictive Trade Practices Act so it targets actual consumer exploitation rather than penalising scale, freeing the larger industrial houses to organise mass production of essentials, and rejecting fashionable hoarding 'solutions' (high interest rates, ECA/MISA enforcement, freezing of deposits or demonetisation) as either unworkable or destructive of public confidence in banking. In their place he proposes selective dumping of imported commodities to break hoarding rings, an attack on the parallel black-money economy via political-funding reform and tax-rate cuts, a massive integrated rural-roads programme as a make-work and growth multiplier (at least Rs. 500 crores a year), peaceful underground and external nuclear explosions for mining and water-works, recycling of scarce resources including municipal garbage, and Free Trade Zones to attract West German, Japanese and American labour-intensive industry. The Tata Chemicals Fertiliser Project is held up as the emblematic instance of ideological delay damaging the real economy. - Frames inflation as solvable only by attacking basic causes — production, employment, population growth — not by committees or controls. - Calls for wholesale scrapping of the licensing-permit-quota system; argues the 'Subramaniam Formula' failed because bureaucrats resent loss of patronage. - Reads the MRTP Act as a brake on the very industrial houses best able to organise mass production of essentials; the 'fear of dominance' is 'a myth.' - Proposes a Rs. 500-crore-a-year rural roads programme as the principal plank — integrating rural and urban economies and easing congestion. - Argues for peaceful underground/external nuclear explosions in mining, dams and irrigation; recycling of scarce materials; and Free Trade Zones to import capital and technology at no cost. ### II. Planning Policies are Defective *By DHIRAJLAL MAGANLAL* Dhirajlal Maganlal — a past President of the Bombay Stock Exchange writing as a businessman who watched the warnings ignored — locates the seeds of present inflation in the Second Five-Year Plan's heavy-industry bias and the consequent neglect of agriculture. He marshals the figures: 80 per cent price rise across the Second and Third Plans; 57 per cent rupee devaluation in 1966; a 60 per cent rise in the general price level over 1969–1974; food prices up 62 per cent, paper money up 70 per cent, while real output of necessities rose only 12 per cent; in 1973–74 alone, prices up 29 per cent, money supply up 17 per cent and the rupee's purchasing power down 19 per cent. The disastrous effects, he writes, run from labour unrest and mass upsurges in Gujarat and Bihar to a corruption of moral standards that 'may even devour democracy.' His package: positive incentives for production via excise relief and lower taxes, an end to deficit financing, replacement of price controls by dual pricing, liquidation of inventories under industrial pressure, and mopping up of high-denomination black money through schemes like SEMIBOMBLA. - Diagnoses Second Plan heavy-industry bias and agricultural neglect as the structural origin of India's inflationary pressures. - Cites cumulative price rises of 80 per cent over the Second and Third Plans, a 57 per cent devaluation in 1966, and a 29 per cent price rise in 1973–74 alone. - Reads inflation as the 'worst form of taxation on weaker sections' and the engine of mass upsurges in Gujarat and Bihar. - Demands stoppage of deficit financing and unauthorised overdrafts on the Reserve Bank (Rs. 1,200 crores in 1973–74). - Recommends replacing price controls with dual pricing for sugar and steel and demonetising high-denomination notes via SEMIBOMBLA-type schemes. ### III. Increase Production to Curb Inflation *By MINOO R. SHROFF* Minoo R. Shroff rebuts the consoling claim that, because inflation is now a global phenomenon, its Indian incidence need not cause anxiety. The test, he writes, must be a country's own growth record; on that test India is failing. Wholesale Price Index inflation, under 2.5 per cent compound through the 1950s and 6.5 per cent through the 1960s, rose 54.1 per cent between May 1972 and May 1974. Money supply has grown at 15 per cent annually in the last two years — twice the rate of WPI rise in the preceding decade — driven by lower per-capita foodgrain availability, stagnant industrial production, the psychology of scarcity, and government incapacity. Compound growth rates of rice, pulses, oilseeds and cotton actually fell between the 1950s and 1960s; Fourth Plan industrial targets in cloth, fertilisers, cement, steel and aluminium were missed by 15–60 per cent; power shortages run 15–60 per cent across the country. Shroff insists that monetary instruments, despite their limitations, have a 'vital role' at the present juncture, and that the most enduring solution is to raise productivity across all sectors with active cooperation from trade, industry, labour, administration and consumers. - Rejects the argument that worldwide inflation makes Indian inflation tolerable — each country must be judged by its own growth record. - Reports WPI rising 54.1 per cent between May 1972 and May 1974, with money supply growth of 15 per cent per annum, twice WPI growth in the previous decade. - Documents falling compound growth rates between the 1950s and 1960s for rice, pulses, oilseeds and cotton, and Fourth Plan shortfalls of 15–60 per cent in cloth, fertilisers, cement, steel and aluminium. - Warns of a 'virtual breakdown' of infrastructure — power, coal at 79 million tonnes growing only 5 per cent in a decade, rail and wagon shortages. - Argues monetary measures plus a national push on productivity, not theatrical anti-hoarding raids, are the path out of inflation. ### IV. Measures to Control Inflation *By PROF. GANGADHAR GADGIL* In the rendered pages of his lecture, Prof. Gangadhar Gadgil — Economic Adviser to the Apte group of industries — places India's situation on a spectrum: inflation below 10 per cent is a 'worry but not serious worry'; 10–15 per cent is serious; above 15 per cent is cause for alarm; India's prices have risen over 28 per cent in the past year, so 'all the alarm bells should be ringing.' Unchecked, he warns, the economy will collapse and the social and political structure will disintegrate. He attributes the inflation to six factors — 14.2 per cent money-supply growth in 1973–74, stagnation in industry and agriculture, an inefficient distribution system, hoarding and speculation in the parallel economy, imported inflation, and the oil-cum-PL480 shock. With production unlikely to rise in the near term, he argues, monetary measures must do the heavy lifting; the rendered pages survey demonetisation (likely to lower prices and wages mechanically without eliminating scarcity psychology), the SEMIBOMBLA variant (more effective in the organised sector and on black money but a 'surgical operation' with disturbing effects on contracts), and compulsory savings (an equitable, predictable squeeze of purchasing power) — the discussion is cut off at page 18. - Treats inflation above 15 per cent as a regime-level alarm; cites India's last-year rise of over 28 per cent. - Lists six contributory factors: rapid money-supply growth (14.2% in 1973–74), industrial-cum-agricultural stagnation, inefficient distribution, hoarding, world-market inflation, and the oil-and-PL480 import shock. - Argues monetary measures must lead the response because production cannot rise quickly enough. - Surveys demonetisation, SEMIBOMBLA and compulsory savings; weighs their efficacy on prices, wages, black money and the 'scarcity psychology.' - Reads SEMIBOMBLA as more potent than demonetisation but a 'surgical operation' that disturbs contracts and inflicts undeserved losses on buyers. --- ## [Primary work] A PHILOSOPHY OF BUSINESS URL: https://indianliberals.in/primary-works/a-philosophy-of-business-s-s-kanoria-january-1972/ ### Summary Delivered as the A. D. Shroff Memorial Lecture at the Calcutta Centre of the Forum of Free Enterprise on 27 October 1971, this pamphlet is S. S. Kanoria's attempt — written as the then-President of FICCI — to articulate a positive 'philosophy of business' for Indian private enterprise. Kanoria opens by honouring Shroff as an industrialist-economist whose convictions inspired the Forum, and uses Keynes' dictum about the long reach of ideas to argue that India's economic debates are at root a 'battle of ideas, a struggle for men's minds'. He rejects two extremes: the laissez-faire of Adam Smith and the Manchester School, which he calls 'as dead as the dodo', and full state ownership and centralised planning, which he treats as its dogmatic mirror image. The philosophy he advances is that of a mixed economy in which private enterprise is 'infused with social purpose' and accountable to consumers, workers, investors, the state, and the local community.… ### Body ## Summary Delivered as the A. D. Shroff Memorial Lecture at the Calcutta Centre of the Forum of Free Enterprise on 27 October 1971, this pamphlet is S. S. Kanoria's attempt — written as the then-President of FICCI — to articulate a positive 'philosophy of business' for Indian private enterprise. Kanoria opens by honouring Shroff as an industrialist-economist whose convictions inspired the Forum, and uses Keynes' dictum about the long reach of ideas to argue that India's economic debates are at root a 'battle of ideas, a struggle for men's minds'. He rejects two extremes: the laissez-faire of Adam Smith and the Manchester School, which he calls 'as dead as the dodo', and full state ownership and centralised planning, which he treats as its dogmatic mirror image. The philosophy he advances is that of a mixed economy in which private enterprise is 'infused with social purpose' and accountable to consumers, workers, investors, the state, and the local community. Drawing on Gunnar Myrdal's Asian Drama, he attacks discretionary administrative controls, industrial licensing, and the bogey of 'concentration of economic power', arguing that the diffusion of economic power through small and medium enterprise and broad-based shareholding — not its transfer to the state — is the proper liberal remedy. He cites Hayek's Road to Serfdom and Mahatma Gandhi on the dangers of state aggrandisement, defends profits as a signal of efficient resource use, and rejects the doctrine of class war. Kanoria closes by stretching the philosophy outward and forward. Echoing Galbraith's New Industrial State, he welcomes the rise of professional management; drawing on Kuznets, Bauer, Yamey, Streeten and others, he insists that human-capital expenditure (health, education, training) is genuinely developmental, citing the post-war recovery of Germany and Japan. He warns against the 'soft state' diagnosis that would trade democratic freedom for social discipline, arguing instead that India's mission is to demonstrate that rapid development of an underdeveloped economy is achievable within a democratic framework. Business, he concludes, must be the vanguard of a 'relevant radicalism' — outward-looking, export-competitive, and constructively engaged in eradicating poverty. ## Key points - The lecture honours A. D. Shroff and grounds the Forum of Free Enterprise's mission in Shroff's life and convictions. - Kanoria rejects both classical laissez-faire and Soviet-style state ownership, arguing for a mixed economy where private enterprise is regulated in the common interest. - He insists that 'dogmatism' in the name of socialism has turned what should be a philosophy of business into a theology, hardening orthodoxy in policy circles. - Profits are defended as the seeds of growth and an indicator of efficient resource use — including by reference to public-sector underperformance in India. - He attacks discretionary administrative controls and industrial licensing, drawing explicitly on Gunnar Myrdal's distinction between positive/negative and discretionary/non-discretionary controls in Asian Drama. - The supposed problem of 'concentration of economic power' is treated as a political bogey; the remedy is the spread of small and medium enterprise and broad shareholding, not statisation. - Citing Kuznets, Bauer, Yamey, Streeten and others, he argues that investment in human capital — health, education, training — is itself developmental and crucial to growth. - Closing the lecture, Kanoria argues India must demonstrate rapid development is compatible with democratic freedom, and calls for a forward- and outward-looking 'relevant radicalism' rooted in private enterprise. --- ## [Primary work] A Policy for Harmonious Industrial Relations URL: https://indianliberals.in/primary-works/a-policy-for-harmonious-industry-relations-naval-h-tata-april-14-1980/ ### Summary Naval H. Tata, President of the Employers' Federation of India, delivers a Forum of Free Enterprise address (14 April 1980) diagnosing what he calls a labour scene of chaos, confusion and despair. He frames the brief in starkly practical terms: 32 million man-days lost to strikes in 1979 alone, illegal lock-outs and gheraos becoming routine, and State Governments amending labour law unilaterally outside the tripartite Labour Conference. The new Government, he argues, cannot revive growth without first restoring cordial industrial relations, and he sets out four areas demanding immediate attention — orderly collective bargaining through truly representative unions, speedy dispute settlement through independent labour courts and voluntary arbitration, prevention of violence with strict enforcement of law and order, and an equitable wage policy with indexing for cost-of-living fluctuations and a clear bonus law. The first half of the pamphlet works through each of these heads.… ### Body ## Summary Naval H. Tata, President of the Employers' Federation of India, delivers a Forum of Free Enterprise address (14 April 1980) diagnosing what he calls a labour scene of chaos, confusion and despair. He frames the brief in starkly practical terms: 32 million man-days lost to strikes in 1979 alone, illegal lock-outs and gheraos becoming routine, and State Governments amending labour law unilaterally outside the tripartite Labour Conference. The new Government, he argues, cannot revive growth without first restoring cordial industrial relations, and he sets out four areas demanding immediate attention — orderly collective bargaining through truly representative unions, speedy dispute settlement through independent labour courts and voluntary arbitration, prevention of violence with strict enforcement of law and order, and an equitable wage policy with indexing for cost-of-living fluctuations and a clear bonus law. The first half of the pamphlet works through each of these heads. Tata urges statutory recognition of a sole bargaining agent under a Central law applicable to undertakings employing more than one hundred workers, with the secret ballot preferred over verification of membership for selecting that agent on democratic principles. He calls for reviving and activating the tripartite National Commission on Labour's recommendation to set up independent Industrial Relations Commissions at the State and Centre, freed from executive influence, with concurrent rights to refer disputes to adjudication. Voluntary arbitration on the American model — where the arbitrator is named in the agreement itself — is offered as a way out of the cumbersome compulsory adjudication regime. On violence, he insists that gheraos and physical assault forfeit the immunity that trade unions otherwise enjoy under the Constitution: unions guilty of violence should face derecognition for three years, and office-bearers disqualification for five to seven. The wage-policy section is illustrated by a 'Wage Map of Bombay' tabulating basic plus dearness allowance for sixteen occupational categories as of June 1977. The second part of the pamphlet, 'The Bonus Tangle: A Way Out', argues that the Payment of Bonus Act of 1965 — far from securing industrial peace — has become a recurring trigger for agitation every June through November. Tata defends the original Bonus Commission view (chaired by the late M. R. Meher, I.C.S.) that bonus is a share in profits, not a deferred wage, and warns that treating it as a deferred wage would require disbursements running to Rs. 1,500 crores per annum for Government employees alone. He proposes deleting the existing minimum bonus by abolition or, as a compromise, merging it into wages over three years; restoring the productivity-linked bonus provision the Janata Party abandoned; scrapping Section 34(1) of the Act, which has been exploited by militant unions to extract awards of 35 to 40 per cent through coercive bargaining; and, more radically, financing an annual national dividend to labour through a four-per-cent excise surcharge on industrial production to displace plant-level bonus disputes altogether. ## Key points - Diagnoses the 1979–80 labour climate as one of chaos: 32 million man-days lost to strikes in 1979, illegal lock-outs, and unilateral State amendments to central labour law bypassing the tripartite Labour Conference. - Proposes four reform heads: orderly collective bargaining through truly representative unions, speedy dispute settlement, prevention of violence, and an equitable indexed wage policy with a clear bonus law. - Argues for statutory recognition of a sole bargaining agent under a Central law for undertakings of 100+ workers, with the secret ballot preferred over membership verification on democratic grounds. - Calls for reviving the National Commission on Labour's proposal for tripartite Industrial Relations Commissions at State and Central levels, independent of the executive and capable of adjudicating disputes referred by either party. - Endorses voluntary arbitration on the American model — where the arbitrator is named in the collective agreement itself — to escape the cumbersome compulsory-adjudication regime. - Holds that violence, gheraos, and intimidation are not legitimate parts of collective bargaining and should forfeit union immunity, with derecognition of offending unions for three years and disqualification of office-bearers for five to seven years. - Treats the Payment of Bonus Act, 1965 as a recurring trigger of industrial strife (notoriously between June and November each year), and defends the M. R. Meher Bonus Commission's reading of bonus as a share in profits, not a deferred wage. - Proposes deleting the minimum bonus, restoring productivity-linked bonus, scrapping Section 34(1) of the Bonus Act, and exploring a national bonus fund financed by a 4-per-cent excise surcharge as an alternative to plant-level bonus disputes. --- ## [Primary work] A Policy Framework for Broadbasing the Capital Market URL: https://indianliberals.in/primary-works/a-policy-framework-for-broadbasing-the-capital-market-james-s-raj-february-17-1978/ ### Summary James S. Raj's 1978 A. D. Shroff Memorial Lecture — delivered in Bombay on 18 January 1978 and published by the A. D. Shroff Memorial Trust — sets out a policy framework for broadbasing India's capital market. Raj, then Chairman of the Reserve Bank's Committee on Public Sector Banks and Deputy Chairman of ICICI, argues that a 'broadbased and expanding capital market is absolutely essential for any developing country which has chosen a mixed economy in preference to a completely State-run one.' His central diagnostic move is to visualise the policy environment as a series of concentric circles surrounding the capital market: basic attitudes towards economic administration on the outside, industrial policy next, monetary policy nearer the core, and the capital-market regulations themselves at the centre. He works his way inward, identifying at each layer the constraints that inhibit the volume and diversity of savings reaching the market. On attitudes, Raj names 'the all-pervading mistrust of the market mechanism, and the firm belief that all prices can be controlled by administrative fiat' as the binding constraint that policy-makers and the public share.… ### Body ## Summary James S. Raj's 1978 A. D. Shroff Memorial Lecture — delivered in Bombay on 18 January 1978 and published by the A. D. Shroff Memorial Trust — sets out a policy framework for broadbasing India's capital market. Raj, then Chairman of the Reserve Bank's Committee on Public Sector Banks and Deputy Chairman of ICICI, argues that a 'broadbased and expanding capital market is absolutely essential for any developing country which has chosen a mixed economy in preference to a completely State-run one.' His central diagnostic move is to visualise the policy environment as a series of concentric circles surrounding the capital market: basic attitudes towards economic administration on the outside, industrial policy next, monetary policy nearer the core, and the capital-market regulations themselves at the centre. He works his way inward, identifying at each layer the constraints that inhibit the volume and diversity of savings reaching the market. On attitudes, Raj names 'the all-pervading mistrust of the market mechanism, and the firm belief that all prices can be controlled by administrative fiat' as the binding constraint that policy-makers and the public share. He treats this as politically immovable, but draws out its consequences for equity investment: pervasive price controls turn most large-industry shares into instruments of risk without upside, and dividend limitation — a 'plank in the Janata Party's economic policy' — punishes the very middle-class shareholders, widows and orphans who have been caught when 'the music' stopped. On industrial policy he is sceptical that the small-scale and 'tiny' sector emphasis matters for the capital market, since a single fertiliser project at Rs. 150 crores dwarfs thousands of tiny units; what matters is the pace at which nationalisation and the establishment of new public-sector units pre-empt the savings pool. Moving to the inner layers, Raj documents how monetary and capital-market regulation now operate as a 'captive supply' system: banks must invest roughly 33% of deposit liabilities in Government securities at under 6% interest, LIC and Provident Funds are similarly bound, and a 4.5% gap between Government and industrial-debenture rates has been rationalised on grounds that Government projects do not even earn 5% on capital employed. Tax policy is 'loaded against equity shares'; institutional underwriters end up holding new issues; and growth companies' shares are gradually 'soaked up' by public financial institutions, hollowing out small-shareholder oversight. Raj closes the rendered section by arguing that India must abandon the consumption-oriented model it has imitated and 'build up a savings-oriented society, using the same methods of marketing to popularise savings,' and that the first order of business is a Government policy decision restoring the attractiveness of direct equity, debenture, and preference-share investment relative to deposits in monolithic financial institutions. The lecture pivots at the end of these rendered pages to begin outlining specific modifications to industrial-sector policy, which continue beyond this chunk. ## Key points - Raj frames the capital-market policy environment as concentric circles: basic economic attitudes on the outside, industrial policy, monetary policy, and the capital-market regulations themselves at the core. - He identifies the binding ideological constraint as an 'all-pervading mistrust of the market mechanism' and a belief that all prices can be set by administrative fiat — a creed shared by authorities and the urban public alike. - Dividend limitation, described as a plank of the Janata Party's economic policy, is criticised on the ground that it hurts middle-class shareholders, widows and orphans rather than 'bloated capitalists'. - Industrial policy's tilt towards small-scale and 'tiny' units is largely irrelevant to the capital market, because those units do not draw on it; what matters is the public-sector's pre-emption of savings via nationalisation and new units. - Roughly 33% of bank deposit liabilities are locked into Central and State Government securities at under 6% interest, with LIC and Provident Funds similarly captive — creating a hidden 4.5% gap between Government and industrial-debenture rates. - Tax policy is 'loaded against equity shares': dividend deduction at source, liquidity penalties via holding-period rules for capital-gains treatment, and no incentive for subscribers to new issues that may yield no dividend for years. - Public financial institutions are gradually 'soaking up' the equity of attractive growth companies (Larsen & Toubro, TELCO, Century Enka, CAFI), shrinking the small-shareholder base both relatively and in vigilance. - Raj's prescription: stop imitating a consumption-oriented society and build a savings-oriented one, beginning with a Government policy decision restoring direct investment in equities, debentures and preference shares to attractiveness. --- ## [Primary work] A Review of Current Economic Problems URL: https://indianliberals.in/primary-works/a-review-of-current-economic-problems-sir-h-p-mody-sep10-1965/ ### Summary A slim Forum of Free Enterprise booklet dated 10 September 1965, collecting three short pieces that together amount to a classical-liberal post-mortem on the first decade and a half of Indian planning. Sir H. P. Mody opens with a polemic against the planning apparatus itself; Prof. B. R. Shenoy diagnoses the food crisis as the product of deficit financing and the misdirection of public-sector resources rather than hoarding; and P. S. Narayan walks through the country's foreign exchange crisis, arguing that ad-hoc controls and devaluation are no substitute for getting at the fiscal and monetary fundamentals. The shared frame is that India's troubles are self-inflicted by ever-larger plans, expanding public expenditure, and bureaucratic controls, and that consolidation, fiscal discipline, and a serious rehabilitation of private enterprise are the only honest remedies. ### Body ## Summary A slim Forum of Free Enterprise booklet dated 10 September 1965, collecting three short pieces that together amount to a classical-liberal post-mortem on the first decade and a half of Indian planning. Sir H. P. Mody opens with a polemic against the planning apparatus itself; Prof. B. R. Shenoy diagnoses the food crisis as the product of deficit financing and the misdirection of public-sector resources rather than hoarding; and P. S. Narayan walks through the country's foreign exchange crisis, arguing that ad-hoc controls and devaluation are no substitute for getting at the fiscal and monetary fundamentals. The shared frame is that India's troubles are self-inflicted by ever-larger plans, expanding public expenditure, and bureaucratic controls, and that consolidation, fiscal discipline, and a serious rehabilitation of private enterprise are the only honest remedies. ## Essays ### Whither Indian Planning? *By Sir H. P. Mody* Mody's address 'Whither Indian Planning?' arraigns the entire mechanics of the Five-Year Plan regime. He notes that since 1951 the country has lived under a succession of plans whose targets, resources and production schedules have proved 'hopelessly wrong', yet each new plan is required to be larger than the last. He argues that planning, far from being questioned in principle, has been corrupted in practice: large-scale public enterprises have aggravated shortages, agricultural productivity remains low, the Centre blames the cultivator instead of itself, and the tax burden — by Ashok Mehta's own admission — has reached staggering proportions. Mody warns that unless the obsession with 'gigantism' is abandoned in favour of consolidation and realism, the Third Plan target of food self-sufficiency by 1981 will be a fresh casualty of the same mindset. - Frames Indian planning as a self-perpetuating ritual where each plan must be larger than its predecessor regardless of how badly the prior one failed. - Blames large-scale public enterprises and bureaucratic interference for accentuating, not relieving, shortages across foodgrains, water, housing, transport and telecommunications. - Argues the State has used the cultivator as a scapegoat while remaining itself the 'all-powerful Government' responsible for low agricultural productivity. - Cites Ashok Mehta's admission that India is the most heavily taxed country in the world as evidence that the tax burden is no longer defensible. - Calls for ideology and reckless experimentation to give way to realism, and for the Third Plan's gigantism to be replaced by consolidation. ### India's Food Problem *By B. R. Shenoy* Shenoy's 'India's Food Problem' refuses the then-fashionable explanation that the food crisis is the work of hoarders and traders. Rains and physical shortages, he argues, are the symptoms; the underlying cause is the misdirection of resources, the neglect of agriculture, and above all the inflation generated by deficit financing — the Planning Commission, Ministry of Finance and Reserve Bank inflating monetary circulation while traders and farmers are scapegoated. He distinguishes short-term remedies (PL-480 imports already in train) from the long-term task of raising domestic farm output through better seeds, fertilisers, irrigation, storage, marketing and, crucially, restoring the credit-worthiness of farmers and tenants whose access to the money-lender has been legislated away without a working substitute. Without redirecting public-sector investment funds away from steel mills and 'so-called infra-structure industries' towards agriculture, he warns, no permanent solution to the food problem is possible. - Rejects the 'unholy alliance' theory of traders and farmers as the cause of high food prices; locates the real cause in physical shortages plus monetary inflation. - Names the Planning Commission, Ministry of Finance and Reserve Bank as the agents 'inflating monetary circulation' while farmers and traders are blamed. - Identifies neglect of agriculture — only 6.7 per cent of plan investment, even as 70 per cent of investment resources come through public appropriation — as the structural distortion. - Argues anti-usury legislation has crippled tenant credit-worthiness, pushing money-lenders out without functioning replacements, and inflating effective interest on farm credit. - Concludes no lasting solution is possible without redirecting public-sector investment away from steel and 'infra-structure industries' towards agriculture. ### The Foreign Exchange Crisis *By P. S. Narayan* Narayan's 'The Foreign Exchange Crisis' surveys the deficit in India's balance of payments and rejects palliatives. Foreign exchange scarcity, he writes, should not cause alarm unless it persists and leads to stringency and a critical situation — which is precisely where India now is, with reserves down from Rs. 188 crores in March 1964 to Rs. 116 crores in March 1965 and an IMF gain and standby credit consumed within a year. He surveys recent measures (raising the Bank Rate, ten per cent regulatory duty surcharge, compulsory deposits on imports) and finds them piecemeal and counter-productive: credit squeeze hits small and medium industries hardest while inflationary government expenditure goes untouched, and import-substitution drives are pushed through under conditions where domestic costs cannot match imports. He argues for genuine export promotion (including tourism), serious cuts in Government expenditure, and rejection of devaluation and moratorium in favour of long-term funding of obligations. Citing A. D. Shroff, he concludes that the wise course is consolidation, completion of projects in hand, and a Fourth Plan outlay framed with realism rather than gigantism. - Quantifies the crisis: reserves fell from Rs. 188 crores (March 1964) to Rs. 116 crores (March 1965); standby credit of 200 million dollars from the IMF largely consumed in a year. - Argues piecemeal credit and import controls hurt small and medium industries while leaving inflationary public expenditure untouched. - Rejects devaluation and moratorium: devaluation will not solve the deficit because exports are price-inelastic and imports inelastic in quantity; moratorium would damage credit standing. - Calls for serious export promotion (including tourism — citing France, Switzerland and the U.A.R. as commercial-tourism models) and full utilisation of installed capacity through fiscal incentives. - Endorses A. D. Shroff's prescription: halt new expansion programmes, consolidate, and finance the Fourth Plan from realistically available resources. --- ## [Primary work] A REVIEW OF THE FINANCE (No. 2) BILL, 1962 URL: https://indianliberals.in/primary-works/a-review-of-the-finace-bill-n-a-palkhivala-jun8-1962/ ### Summary N. A. Palkhivala's pamphlet — based on a talk delivered under the auspices of the Forum of Free Enterprise in Bombay on May 7, 1962 — is a clause-by-clause critique of the Finance (No. 2) Bill, 1962. His central charge is that the Bill's treatment of capital gains and capital losses is the "most blatantly unjust proposal" in the Budget, indefensible "by any process of reasoning or by reference to any notion of fairplay in a socialistic or welfare State." By limiting the rate on long-term gains while abolishing the right to carry forward long-term capital losses, the Bill places "the thrifty citizen who helps the progress and growth of the nation by saving and investing, in a worse position in many respects than the gambler and the speculator." Palkhivala walks through three archetypes — Mr. Speculator, Mr. Trader and Mr. Investor — to show that only the long-term investor, "the backbone of a stable and progressive nation," is denied symmetrical treatment of losses. The pamphlet then turns to corporate taxation, dividend taxation, the abolition of entertainment-expense deductions, the export incentive, and personal taxation.… ### Body ## Summary N. A. Palkhivala's pamphlet — based on a talk delivered under the auspices of the Forum of Free Enterprise in Bombay on May 7, 1962 — is a clause-by-clause critique of the Finance (No. 2) Bill, 1962. His central charge is that the Bill's treatment of capital gains and capital losses is the "most blatantly unjust proposal" in the Budget, indefensible "by any process of reasoning or by reference to any notion of fairplay in a socialistic or welfare State." By limiting the rate on long-term gains while abolishing the right to carry forward long-term capital losses, the Bill places "the thrifty citizen who helps the progress and growth of the nation by saving and investing, in a worse position in many respects than the gambler and the speculator." Palkhivala walks through three archetypes — Mr. Speculator, Mr. Trader and Mr. Investor — to show that only the long-term investor, "the backbone of a stable and progressive nation," is denied symmetrical treatment of losses. The pamphlet then turns to corporate taxation, dividend taxation, the abolition of entertainment-expense deductions, the export incentive, and personal taxation. Palkhivala argues that the proposed rise in corporate tax to 50 per cent, layered onto cascading taxes on inter-corporate dividends, will leave net margins below what the Tariff Commission itself contemplated when fixing administered prices. He notes that the Department's fear of bogus capital-loss claims is already met by Section 52 of the Income-tax Act, 1961, and that suspending genuine rights because of a handful of wrong-doers "is not a democracy, it is despotism." In the final pages Palkhivala turns to personal income-tax and wealth-tax rates — among the highest in the world — showing that the marginal investor of an additional Rs. 100 yielding Rs. 6 will pay more than Rs. 6 in combined wealth-tax and income-tax, a confiscatory result. He praises Morarji Desai's "great courage and independent thinking" in abolishing the Expenditure Tax but laments that the recommendations of the Law Commission, the Direct Taxes Administration Enquiry Committee, and the Mudaliar-led export committee continue to be ignored. The piece closes with the hope that the Finance Minister will "rise to the occasion and respond to the appeal of reason and justice and withdraw some of the unsatisfactory features of the Budget proposals." ## Key points - Frames the capital-gains and capital-losses provisions of the Finance (No. 2) Bill, 1962 as the Bill's most indefensible feature, penalising the long-term saver relative to the speculator and the trader. - Walks through three archetypes — Mr. Speculator, Mr. Trader, Mr. Investor — to show that only the investor is denied the right to carry forward losses, despite being the country's source of productive capital. - Argues that abolishing carry-forward of long-term capital losses, while leaving long-term gains taxed at a concessional rate, has "the astounding result of putting the thrifty citizen ... in a worse position than the gambler and the speculator." - Rejects the Department's anti-abuse rationale: Section 52 of the Income-tax Act, 1961 already empowers it to disallow bogus loss claims, so collective punishment of genuine investors is unjustified. - Critiques the proposed rise in corporate taxation to 50 per cent and the cascading taxation of inter-corporate dividends, which renders the Tariff Commission's earlier price-fixing assumptions obsolete. - Attacks the ceiling on entertainment expenses (Rs. 1,00,000 dropped to Rs. 60,000) and the arbitrary cuts in the export-profits rebate as ill-conceived and likely to deter legitimate business activity. - Documents that individual income-tax rates in India are among the highest in the world — rising to 82 per cent on earned and 87 per cent on unearned income — and that combined wealth-tax plus income-tax can exceed the total yield on an additional investment. - Calls on the Finance Minister to honour the recommendations of the Law Commission, the Direct Taxes Administration Enquiry Committee, and the Mudaliar-led export committee, and to withdraw the Bill's most unjust features. --- ## [Primary work] A Review of the Rupee Trade URL: https://indianliberals.in/primary-works/a-review-of-the-rupee-trade-dr-jayashekar-june-15-1983/ ### Summary Dr. Jayashekar, a Jawaharlal Nehru University faculty member, audits India's two-decade experience under the Rupee Payments Arrangement with the Soviet Union and Eastern Europe. He marshals trade data from 1970-71 through 1981-82 to show that although the total turnover of Rupee trade rose more than five-and-a-half times, its compound growth lagged India's trade with hard-currency partners, and its share in India's foreign trade fluctuated wildly between roughly 9 and 23 per cent. The pamphlet argues that this instability, combined with India's persistent trade surplus in non-convertible roubles, has converted Rupee trade from a development asset into a structural drag on India's exports and industrial choices. The argument is organised around four critiques. First, the secrecy surrounding India's Rupee dealings denies citizens the data needed to evaluate the gains, with Jayashekar bluntly observing that 'Rupee trade rivals defence matters' in opacity.… ### Body ## Summary Dr. Jayashekar, a Jawaharlal Nehru University faculty member, audits India's two-decade experience under the Rupee Payments Arrangement with the Soviet Union and Eastern Europe. He marshals trade data from 1970-71 through 1981-82 to show that although the total turnover of Rupee trade rose more than five-and-a-half times, its compound growth lagged India's trade with hard-currency partners, and its share in India's foreign trade fluctuated wildly between roughly 9 and 23 per cent. The pamphlet argues that this instability, combined with India's persistent trade surplus in non-convertible roubles, has converted Rupee trade from a development asset into a structural drag on India's exports and industrial choices. The argument is organised around four critiques. First, the secrecy surrounding India's Rupee dealings denies citizens the data needed to evaluate the gains, with Jayashekar bluntly observing that 'Rupee trade rivals defence matters' in opacity. Second, the static and dynamic gains-from-trade analysis fails on India's side: economies of scale and technical change in agricultural-heavy export baskets are negligible, and switch trade, high rouble exchange rates, and rising import content of exports compound the losses. Third, the terms of trade have moved against India because cash crop prices have stagnated while machinery and oil prices have multiplied, with Soviet data suggesting India is the cheapest or near-cheapest supplier of most commodities into the Soviet market. Fourth, the Soviet response to India's changing development needs has been 'reluctant, tardy, and inadequate,' offering instead pressure to absorb obsolete Soviet machinery and unwanted textile equipment. In the closing 'Proposal for Modification' section Jayashekar calls for progressively switching Rupee surpluses into convertible currencies, diversifying the export basket so that 70 per cent of exports to the Rupee Trade Area consist of manufactured goods within five years, resisting Soviet dumping of unwanted equipment, insisting on global tenders, building Soviet-US Grain-Agreement-style commodity ceilings, and treating any continued surplus as an interest-bearing loan at 2.5 per cent. He frames the moment — falling oil prices, a widening Soviet deficit with India, and India's own industrial maturation — as opportune for India to move to convertible-currency trade with the Soviet Union. A short table appendix (Tables I-III) supplies the balance-of-trade and export-composition figures that underpin the polemic. ## Key points - Total India-Eastern Europe/Soviet trade turnover rose from Rs. 589.9 crore in 1970-71 to Rs. 2,782.6 crore in 1981-82, but compound growth in Rupee trade lagged India's trade with hard-currency partners. - India accumulated a Rupee-trade surplus in ten of the twelve years since 1970-71, with cumulative surplus exceeding 1,145 million roubles in India's favour — a 'phenomenon that ought not to have come about under the Rupee trade system'. - Jayashekar attacks the secrecy of Indo-Soviet trade, arguing it 'rivals defence matters' and denies citizens the data needed to assess gains, leaving even researchers to make 'impressionistic' judgements. - Static and dynamic gains-from-trade are weak on India's side: export baskets are concentrated in agricultural raw materials and cash crops whose prices have stagnated, while imports (machinery, oil) have appreciated. - Surplus production in Soviet capital-goods industries — driven by planning inconsistencies, technological obsolescence, and frequent policy shifts — has led the USSR to dump unwanted machinery and obsolete textile equipment on India. - Soviet aided projects such as BHEL, HEC, MAMC, IDPL and Instrumentation India Ltd 'languished for long periods' before being made viable through Western technology infusion. - Jayashekar proposes converting Rupee surpluses into convertible currencies, diversifying exports so 70 per cent become manufactured goods within five years, charging 2.5 per cent interest on any continuing surplus, and adopting Soviet-US Grain-Agreement-style commodity ceilings. - He frames the present moment — falling oil prices, widening Soviet deficit with India, India's industrial maturation — as the opportune time to switch to convertible-currency trade with the Soviet Union. --- ## [Primary work] A Socialist Society Cannot Be Democratic URL: https://indianliberals.in/primary-works/a-socialist-society-cannot-be-democratic-t-mathew-june-8-1960/ ### Summary T. Mathew's prize-winning essay — awarded the second prize in a Forum of Free Enterprise public competition on "Democracy in India" — argues that the socialist programme being pursued by the Congress Party is logically and historically incompatible with the democratic ideals enshrined in the Indian Constitution. Mathew, a lecturer in economics, first reconstructs democracy from first principles: it is not majoritarian quantity but a society of "living selves" whose moral and material progress depends on liberty, equality, justice, education, and the rule of law. Each of these is then turned into a yardstick against which planned socialism is measured and found wanting. A long central section anchors liberty in the right to private property. Citing Hilaire Belloc, Max Eastman, and Marx's own logic, Mathew argues that diffused control of the means of production is the precondition of every other freedom, and that the Fourth Amendment of 1955 — which removed judicial review of compensation in property acquisition — has made the constitutional guarantee illusory and put "the mansion of democracy" in a precarious condition.… ### Body ## Summary T. Mathew's prize-winning essay — awarded the second prize in a Forum of Free Enterprise public competition on "Democracy in India" — argues that the socialist programme being pursued by the Congress Party is logically and historically incompatible with the democratic ideals enshrined in the Indian Constitution. Mathew, a lecturer in economics, first reconstructs democracy from first principles: it is not majoritarian quantity but a society of "living selves" whose moral and material progress depends on liberty, equality, justice, education, and the rule of law. Each of these is then turned into a yardstick against which planned socialism is measured and found wanting. A long central section anchors liberty in the right to private property. Citing Hilaire Belloc, Max Eastman, and Marx's own logic, Mathew argues that diffused control of the means of production is the precondition of every other freedom, and that the Fourth Amendment of 1955 — which removed judicial review of compensation in property acquisition — has made the constitutional guarantee illusory and put "the mansion of democracy" in a precarious condition. Equality, in turn, is reframed as a spiritual claim about the unique personality of every individual, against which India's caste system and a centralising state apparatus are equally corrosive. Education must therefore be free of state regimentation, and political parties must be programmatic and national rather than communal, linguistic, or sectional — the Hindu Mahasabha, Jan Sangh, DMK and Muslim League are named as failing this test. Mathew then turns to party competition itself, claiming Indian democracy lacks a real opposition because Congress, having absorbed first the Praja Socialist and then the Communist programme at its Nagpur session, has reduced parliamentary debate to "a huge joke" — a state of affairs the newly formed Swatantra Party is welcomed as the corrective for. The argument culminates in the rule-of-law section, where, drawing on Dicey, Hayek and Tocqueville, Mathew contends that planning's necessary discretion is constitutive of arbitrary government, that "discretionary authority of the government" is contradictory to the rule of law, and that a planned socialist economy cannot coexist with the certainty under known rules that allows individuals to pursue their lives in freedom. The essay closes by quoting Tocqueville's line that democracy seeks equality in liberty while socialism seeks equality in restraint and servitude, endorsing W. M. Chamberlin's view that democratic socialism belongs "to the world of utopias," and appealing to India's "centuries-old tradition of 'Dharma'" not to be "disowned" in the "fashionable craze after material mirages." The booklet is rounded out by A. D. Shroff's signature dictum on free enterprise and Eugene Black's epigraph that private enterprise must be accepted "not as a necessary evil, but as an affirmative good." ## Key points - Democracy is defined morally rather than numerically: it is a society of "living selves" requiring liberty, equality, justice, education and the rule of law as its operating conditions. - Private property is treated as the foundational right that secures all other liberties; the 1955 Fourth Amendment is criticised for hollowing out the constitutional guarantee by removing judicial review of compensation. - Equality is reframed as a spiritual recognition of the unique personality of each individual, against which both India's caste system and centralised state planning are corrosive. - Free, non-"nationalised" education is presented as essential to democratic citizenship and to national unity, with criticism of linguistic-state regimentation and politicised education ministries. - Communal and regional outfits — Hindu Mahasabha, Jan Sangh, DMK, Muslim League — are disqualified as democratic parties because they appeal to sectional rather than national constituencies. - Congress is faulted for absorbing the Praja Socialist and (at Nagpur) the Communist programmes, eliminating real opposition until the formation of the Swatantra Party. - Drawing on Dicey, Hayek and Tocqueville, the essay argues that the discretionary authority required by central planning is structurally incompatible with the rule of law. - The closing appeal invokes the Indian tradition of "Dharma" against the "material mirages" promised by socialism "or any other 'ism'." --- ## [Primary work] A Pragmatic Economic Policy for a Government That Works URL: https://indianliberals.in/primary-works/a-pragmatic-economic-policy-for-a-government-thatworks-june-13-1981/ ### Summary Reproducing an article originally published in Tata Economic Consultancy Services' bulletin Economic Scene and reissued as a Forum of Free Enterprise pamphlet in June 1981, this anonymous "study team of three" steps back from year-to-year quarrels over rains, strikes and remittances to argue that India's three-decade rise in prices is an endemic phenomenon driven by aggregate investment that exceeds the economy's capacity to bear. The authors call for a tough counter-inflationary programme even at the risk of recession, and reject the popular consolation — voiced by the Prime Minister and many industrialists — that more production will by itself cure inflation. In an Indian setting of overstretched resources, they argue, the attempt to push output further raises money incomes more than proportionately and so feeds the very inflation it claims to fight. The authors propose treating monetary stability and the mobilisation of savings as two distinct functions, personified as the "Stability Man" and the "Growth Man".… ### Body ## Summary Reproducing an article originally published in Tata Economic Consultancy Services' bulletin Economic Scene and reissued as a Forum of Free Enterprise pamphlet in June 1981, this anonymous "study team of three" steps back from year-to-year quarrels over rains, strikes and remittances to argue that India's three-decade rise in prices is an endemic phenomenon driven by aggregate investment that exceeds the economy's capacity to bear. The authors call for a tough counter-inflationary programme even at the risk of recession, and reject the popular consolation — voiced by the Prime Minister and many industrialists — that more production will by itself cure inflation. In an Indian setting of overstretched resources, they argue, the attempt to push output further raises money incomes more than proportionately and so feeds the very inflation it claims to fight. The authors propose treating monetary stability and the mobilisation of savings as two distinct functions, personified as the "Stability Man" and the "Growth Man". They want the Stability Man — the monetary authority — given much greater authority, including a stiffer liquidity ratio, higher interest rates, an end to the "lend more and be lenient" reflex of nationalised banks, tighter discipline on state overdrafts and, above all, a sharp curb on Reserve Bank credit to the Centre, which they identify as the principal factor behind India's endemic inflation. They are sceptical of the new special bearer bonds (because their transferability makes them quasi-money), critical of Maruti as inflation-financed investment that private money could have bought for one-hundredth of the cost, and impatient with a finance ministry that refuses to let a private unit trust compete with the public one or to publish "White Papers" arguing the pros and cons of policy. On the savings side they urge a richer ecology of institutions and incentives — state lotteries that convert consumption into savings, denationalisation of some banks to restore competition, easier capital-issue rules, and minority public shareholding in public-sector undertakings — arguing that India has been so preoccupied with controlling the use of savings that it has neglected the prior question of generating them. The closing pages turn to industrial policy, which the team says has shrunk to "two ideas: control the big industrialist and help (protect) the small industrialist", neither of which has worked. They propose dropping the small/medium/large dividing lines, adopting a "universalised" industrial policy that asks every firm to bear social obligations in proportion to its capacity, and re-conceiving the state not as owner of a "sector" but as a multi-role "ARM" — builder, promoter, manager, collaborator, specialist and trouble-shooter — whose entry into lucrative consumer fields like polyester is judged on its merits rather than as a cross-subsidy device. ## Key points - Frames India's three-decade price rise (1.5% in the '50s, 6.1% in the '60s, 9.7% in the '70s) as endemic inflation driven by aggregate investment outrunning the economy's capacity to bear it, not by passing shocks. - Rejects the Prime Minister's and industrialists' claim that more production cures inflation, arguing that in an overstretched Indian economy higher output raises money incomes more than proportionately. - Proposes separating the functions of monetary stability ("Stability Man") from savings mobilisation ("Growth Man") and giving the Stability Man much greater authority over liquidity, interest rates and credit. - Identifies Reserve Bank credit to the Centre as the principal source of created money behind the endemic inflation, and presses for the Centre to be "strict to itself" in deficit financing. - Criticises the Finance Minister's special bearer bonds (transferability makes them token money), Maruti as inflation-financed investment, and the refusal to let a private unit trust compete with the public one. - Argues for re-energising private savings through state lotteries, easier capital-issue rules, minority public shareholding in PSUs, and asks whether India will have the "courage to denationalize some banks" to restore competition. - Reframes industrial policy as "universalised" — scrap the small/medium/large dividing lines, free every industrialist to expand subject to public-interest rules, and impose social obligations in proportion to capacity. - Proposes the term "ARM" rather than "sector" for the state's industrial role, recognising it as builder, promoter, manager, collaborator, specialist and trouble-shooter rather than as a permanent owner of segments. --- ## [Primary work] A Strategy for Exports URL: https://indianliberals.in/primary-works/a-strategy-for-exports-16-july-1975/ ### Summary In this 1975 Forum of Free Enterprise pamphlet, Dr. R. L. Varshney — then Jt. Director of the Indian Institute of Foreign Trade — assesses the dramatic jump in India's exports during the closing years of the Fourth Plan and argues that the boom is largely a windfall rather than a tribute to Indian policy. He attributes the 22.6 per cent rise in 1972-73 and the 26 per cent rise in 1973-74 to four fortuitous factors: trade with Bangla Desh, the de facto devaluation of the rupee through its sterling link, the international price boom in primary products, and the energy crisis's revival of natural fibres and leather. Once those tailwinds are stripped out, India's structural position remains weak: its share of world trade has fallen continuously from 2.2 per cent in 1950 to 0.577 per cent in 1973, and exports as a share of GNP have collapsed from 6.3 per cent in 1950-51 to about 4.2 per cent in 1970-71. The heart of the pamphlet is a strategy menu for converting the cyclical bounce into a sustained export drive.… ### Body ## Summary In this 1975 Forum of Free Enterprise pamphlet, Dr. R. L. Varshney — then Jt. Director of the Indian Institute of Foreign Trade — assesses the dramatic jump in India's exports during the closing years of the Fourth Plan and argues that the boom is largely a windfall rather than a tribute to Indian policy. He attributes the 22.6 per cent rise in 1972-73 and the 26 per cent rise in 1973-74 to four fortuitous factors: trade with Bangla Desh, the de facto devaluation of the rupee through its sterling link, the international price boom in primary products, and the energy crisis's revival of natural fibres and leather. Once those tailwinds are stripped out, India's structural position remains weak: its share of world trade has fallen continuously from 2.2 per cent in 1950 to 0.577 per cent in 1973, and exports as a share of GNP have collapsed from 6.3 per cent in 1950-51 to about 4.2 per cent in 1970-71. The heart of the pamphlet is a strategy menu for converting the cyclical bounce into a sustained export drive. Varshney calls for identifying sectors of true comparative advantage (steel, aluminium, engineering goods, components and spare parts), increasing production rather than relying on "distress sales" forced out of a constrained domestic market, taming inflation through fiscal-monetary reform, and lowering costs through modernisation, full capacity utilisation, and linking wage growth to productivity. He challenges the regulatory architecture directly: he wants the export sector exempted from the MRTP "freeze" on large industrial houses, urges decanalisation and free competition between the STC and private exporters, and asks why India cannot welcome foreign capital and joint ventures of the kind the USSR has invited from West Germany, the U.S. and Japan. Throughout, Varshney positions weak performance as a policy choice rather than fate. He criticises diffuse incentive bureaucracies, opaque drawback schemes, an export-obligation regime pegged at a punitive 60 per cent of new capacity, and the absence of any parliamentary follow-through on the 1970 Export Policy Resolution. Drawing repeatedly on the Japanese and West German examples, he insists that price stability, scale economies, professional market intelligence, and an industry-government "rapport" — not exhortation, compulsion, or state monopoly — are what turn export markets into durable foreign-exchange earners. ## Key points - India's 22.6% (1972-73) and 26% (1973-74) export surges produced a 12.8% Fourth Plan compound growth rate against a 7% target, but Varshney argues 85% of the rise was unit-value (price) gains, not real volume. - India's share of world exports fell continuously from 2.2% in 1950 to 0.577% in 1973; exports/GNP collapsed from 6.3% in 1950-51 to 4.2% in 1970-71. - He attributes the recent boom to four fortuitous causes — Bangla Desh trade, the rupee-sterling devaluation, the 1972-73 primary-commodity price boom, and oil-crisis substitution toward natural fibres and leather — none of which is durable. - Capacity constraints (raw materials, power cuts, transport, labour, credit) and a profitable sheltered domestic market starve exports; banning or compelling exports has produced "distress sales" without expanding supply. - Strategy proposals: identify true comparative-advantage sectors (steel, aluminium, engineering goods, components), use foreign capital where needed, control inflation, and modernise plant to international scale. - Regulatory reform: exempt export-oriented industrial units from the MRTP freeze, allow private exporters to compete with the STC, decanalise inputs, and re-examine the 60% minimum export-obligation on new capacities. - Institutional reform: cut the diffuse exporter-assistance bureaucracy down to one or two agencies, introduce selectivity in licensing export houses, and set up an Export-Import Bank to finance turnkey and consultancy exports to Asian and African co-developing countries. - He repeatedly invokes the Japanese and West German models — price stability, scale, "filling the order", and industry-government rapport — as the operative template, and notes that the 1970 Export Policy Resolution has gone largely unimplemented. --- ## [Primary work] A Solution to the Housing Problem in India URL: https://indianliberals.in/primary-works/a-solution-to-the-housing-problem-in-india-h-t-parekh-14-august-1976/ ### Summary Writing in 1975-76 as Chairman of ICICI, H. T. Parekh opens with a blunt indictment: after twenty-five years and five Five-Year Plans, India has made no significant dent in its housing shortage — roughly four million units in the cities and twelve million more in the villages. Indian planning, he argues, has consistently treated housing as a low-priority sector, allocating only Rs 4,200 crores (under 8 per cent) of the Fifth Plan and just Rs 600 crores from the public sector. Most of whatever has been built has come from private initiative, supplemented by State Housing Boards, LIC and the newly-established HUDCO. Parekh's central rebuttal to the "low priority" argument is economic: housing construction is labour-intensive, with a capital-employment ratio of about Rs 5,000 per worker — five to ten times better than industry or transport — and an investment multiplier in which one Rupee of construction outlay yields Rs 10 of income, largely in wages.… ### Body ## Summary Writing in 1975-76 as Chairman of ICICI, H. T. Parekh opens with a blunt indictment: after twenty-five years and five Five-Year Plans, India has made no significant dent in its housing shortage — roughly four million units in the cities and twelve million more in the villages. Indian planning, he argues, has consistently treated housing as a low-priority sector, allocating only Rs 4,200 crores (under 8 per cent) of the Fifth Plan and just Rs 600 crores from the public sector. Most of whatever has been built has come from private initiative, supplemented by State Housing Boards, LIC and the newly-established HUDCO. Parekh's central rebuttal to the "low priority" argument is economic: housing construction is labour-intensive, with a capital-employment ratio of about Rs 5,000 per worker — five to ten times better than industry or transport — and an investment multiplier in which one Rupee of construction outlay yields Rs 10 of income, largely in wages. He cites the United States (two million dwellings a year), the United Kingdom, and Singapore (forty per cent of its population rehoused by government in fifteen years) to argue that house-building doubles as employment policy and welfare policy. He then audits the existing institutional sources of housing finance — HUDCO's Rs 127 crores of sanctions and 93,000 dwellings, LIC's Rs 582 crores of cumulative housing contribution, the Delhi Development Authority, Bombay's stock of 30,000 buildings (20,000 of them over fifty years old) — and concludes that these efforts are "only marginally helping" against demand of this magnitude. The booklet's constructive core is a proposal for a new, privately-organised specialised housing finance institution — "The Housing Finance and Development Corporation of India Limited (HFDCI)" — modelled on building societies in Britain and savings-and-loan associations in the United States. It would lend to individuals, cooperative societies and groups in urban and rural areas; finance estate development, shopping centres and major repairs; lend to contractors and builders; and concentrate on low- and middle-income housing. Crucially it would operate on a viable basis at moderate interest rates, take no direct capital, grant or subsidy from government, and instead mobilise household savings while initiating a separate interest-subsidy fund for the poorest borrowers. This is, in effect, the public blueprint for what would become HDFC. The text is followed by three appendices reproducing official sources — the Working Group on Housing for the Fourth Plan (1968), the Middle Class Family Living Survey (1958-9), and the Draft Fifth Five-Year Plan's housing chapter — which together document the scale of the shortage and the modesty of official ambition. ## Key points - Twenty-five years of five-year planning have failed to make material progress on housing; urban shortage is around four million units and rural shortage about twelve million. - Of the Rs 53,000-crore Fifth Plan, only Rs 4,200 crores (under 8 per cent) is earmarked for housing, and only Rs 600 crores of that from the public sector — most expected investment (Rs 3,600 crores) is private. - The standard defence of low housing priority — that scarce resources must go to higher-priority sectors — collapses once housing is reframed as employment generation: construction is labour-intensive, with a capital-employment ratio of Rs 5,000 per worker. - Per the Planning Commission, in the Fifth Plan construction generates Rs 10 of income per Rupee invested (against Rs 3.50 economy-wide), mainly as wages. - HUDCO, LIC, State Housing Boards and the Delhi Development Authority are doing useful work — HUDCO has sanctioned Rs 127 crores for 93,000 dwellings, LIC has contributed Rs 582 crores cumulatively — but their scale is marginal against demand and HUDCO does not lend directly to individuals. - In Bombay, 20,000 of the existing 30,000 buildings are over fifty years old; private builders show enterprise but concentrate on the better-off, while buyers themselves furnish most house finance through instalment payments. - Parekh proposes a new privately-organised "Housing Finance and Development Corporation of India Limited (HFDCI)" modelled on UK building societies and US savings-and-loan associations to mobilise individual savings for low- and middle-income housing in urban and rural areas. - The proposed corporation will take no government capital, grant or subsidy, will lend at moderate rates on a viable basis, and will separately create a fund to subsidise interest for low-income housing. --- ## [Primary work] A Study of a State Monopoly Enterprise in Operation URL: https://indianliberals.in/primary-works/a-study-of-a-state-monopoly-enterprise-in-operation-by-m-r-pai-june-9-1963/ ### Summary M. R. Pai's two-page Forum of Free Enterprise leaflet, dated 9 June 1963, is a tightly argued critique of the Life Insurance Corporation as a working example of a state monopoly. Pai opens by recalling the Forum's 1956 manifesto, which warned that monopoly of any kind — public or private — would upset the delicate mechanism of a free and democratic social order, leaving consumers, workers, investors and entrepreneurs all stripped of meaningful choice. He frames the LIC's recent annual statement as a case study that vindicates that warning. The core of the piece is a forensic reading of the LIC chairman's own figures. The Corporation's switch from a calendar year to a financial year of accounting from 1963 stretched the comparison period to fifteen months (January 1962 to March 1963), producing a headline new-business figure of Rs. 745 crores that the chairman called 'a tinge of complacency'. Pai shows that when the figure is restored to a twelve-month basis (Rs. 596 crores) it actually falls Rs. 12.82 crores, or 2.2 per cent, below the Rs. 608.82 crore calendar-year figure for 1961 — the first decline since LIC's inception six years earlier.… ### Body ## Summary M. R. Pai's two-page Forum of Free Enterprise leaflet, dated 9 June 1963, is a tightly argued critique of the Life Insurance Corporation as a working example of a state monopoly. Pai opens by recalling the Forum's 1956 manifesto, which warned that monopoly of any kind — public or private — would upset the delicate mechanism of a free and democratic social order, leaving consumers, workers, investors and entrepreneurs all stripped of meaningful choice. He frames the LIC's recent annual statement as a case study that vindicates that warning. The core of the piece is a forensic reading of the LIC chairman's own figures. The Corporation's switch from a calendar year to a financial year of accounting from 1963 stretched the comparison period to fifteen months (January 1962 to March 1963), producing a headline new-business figure of Rs. 745 crores that the chairman called 'a tinge of complacency'. Pai shows that when the figure is restored to a twelve-month basis (Rs. 596 crores) it actually falls Rs. 12.82 crores, or 2.2 per cent, below the Rs. 608.82 crore calendar-year figure for 1961 — the first decline since LIC's inception six years earlier. He further notes that monthly averages and per-policy averages tell the same story, and that two extra post-harvest seasons inflate the rural component of the fifteen-month window. Pai stacks two further pieces of evidence against the official optimism: a lapse ratio that has climbed continuously from 6.4 in 1958 to 7.0 in 1961 and 5.1 in 1958 — pointing to deteriorating policyholder retention, weak monetary capacity of the insured, or aggressive selling to unsuited clients — and an insurance coverage that, with only 8.36 lakh policies in force on 31 December 1961, reaches less than one per cent of the country's population. He closes by anticipating, and dismissing, the likely defence that the 1962 national emergency depressed business, observing that the downward trend was already visible by mid-1962 and that countries such as the United States showed new-business growth despite war footing. ## Key points - Frames the LIC's 1962-63 results as a real-world test of the Forum of Free Enterprise's 1956 warning against monopoly of any kind, public or private. - Argues that the Corporation's shift from a calendar to a financial accounting year stretched its reporting period to fifteen months and disguised a year-on-year decline. - Recasts the Rs. 745 crore new-business figure on a proportionate twelve-month basis at Rs. 596 crores — Rs. 12.82 crores, or 2.2 per cent, below 1961's Rs. 608.82 crores. - Highlights that the fifteen-month window includes two post-harvest seasons rather than one, inflating the rural-policy component of the comparison. - Points to a continuously rising lapse ratio (6.4 in 1958, 7.0 in 1961) as evidence of deteriorating retention, weak premium-paying capacity, or mis-selling. - Notes that only 8.36 lakh policies were in force on 31 December 1961 — less than one per cent of the population — undermining LIC's claim of broad reach. - Pre-empts the official defence that the 1962 national emergency caused the fall, observing that the downward trend predates the emergency and that wartime America showed growth in new insurance business. - Presents a tabular reconstruction of LIC new business from 1957 to 1962-63, normalised to twelve months, to make the comparison transparent for readers. --- ## [Primary work] A Survey of Socialism Today URL: https://indianliberals.in/primary-works/a-survey-of-socialism-today-a-d-shroff-murarji-vaidya-professor-c-l-gheevala-september-8-1961/ ### Summary A short pamphlet issued by the Forum of Free Enterprise (Bombay, 1961) collecting three contributions on the meaning and consequences of pursuing a 'socialist pattern of society' in India. The unsigned introduction frames the booklet's central premise — that 'a democratic society and a socialist society cannot be the same; in fact, they are mutually contradictory concepts' — and previews three essays: A. D. Shroff contrasts socialist comprehensive planning with planning for free enterprise, Murarji J. Vaidya reviews state enterprises in Indian democracy, and Prof. C. L. Gheevala subjects the concept of socialism to a searching analysis with comparative reference to socialist experience elsewhere. Two appendices — selected quotations on socialism and a reading list — close the volume. The rendered pages cover the cover, an epigraph from Eugene Black of the World Bank, the title page, the two-page introduction, Shroff's essay in full, and the opening seven printed pages of Vaidya's essay. Gheevala's essay and the appendices are not in this chunk.… ### Body ## Summary A short pamphlet issued by the Forum of Free Enterprise (Bombay, 1961) collecting three contributions on the meaning and consequences of pursuing a 'socialist pattern of society' in India. The unsigned introduction frames the booklet's central premise — that 'a democratic society and a socialist society cannot be the same; in fact, they are mutually contradictory concepts' — and previews three essays: A. D. Shroff contrasts socialist comprehensive planning with planning for free enterprise, Murarji J. Vaidya reviews state enterprises in Indian democracy, and Prof. C. L. Gheevala subjects the concept of socialism to a searching analysis with comparative reference to socialist experience elsewhere. Two appendices — selected quotations on socialism and a reading list — close the volume. The rendered pages cover the cover, an epigraph from Eugene Black of the World Bank, the title page, the two-page introduction, Shroff's essay in full, and the opening seven printed pages of Vaidya's essay. Gheevala's essay and the appendices are not in this chunk. The booklet reads as an argumentative intervention: it accepts the case for planning in an underdeveloped economy but insists planning need not be monolithic, totalitarian, or hostile to private enterprise; instead the State should act as a 'catalyst' that builds infrastructure, fosters competition, and respects private property, while State Undertakings should be justified case by case on grounds of efficiency, accountability and consumer welfare rather than ideological compulsion. ## Essays ### Socialist Planning vs. Planning for Free Enterprise & Prosperity *By A. D. Shroff* Shroff opens by puncturing what he calls the cultivated myth that private enterprise in India is opposed to planning, reminding readers that the Bombay Plan of 1944 — the first major attempt to mobilise Indian opinion around planning to raise mass living standards — was authored by industrialists, himself among them. The real argument, he says, is not whether to plan but how: the First Five-Year Plan worked as a loose conglomeration of projects under which the 'much maligned private sector' over-fulfilled its investment targets while the public sector fell roughly 40% short; the Second Plan, by contrast, imported totalitarian techniques from the Soviet Union — all-comprehensive central direction, physical targets searched for resources after the fact, a heavy-industry bias that starves agriculture and consumer goods, and a monolithic administrative apparatus backed (in its parent form) by secret police. None of these conditions, Shroff argues, can be reproduced inside a democratic, pluralistic India without dismantling democratic values themselves. The essay's positive programme outlines 'planning for free enterprise': start from human nature as it is, not as it ought to be; firmly establish private property; recognise the pluralism of Indian society and the limits of any central authority's knowledge; let the State set reasonable targets, build infrastructure (roads, railways, ports, schools, telecoms, an apolitical administration), foster competition rather than monopoly, and refrain from nationalising existing industries or starting insulated state monopolies. Where the State must enter industry, it should compete on fair terms with the private sector. The goal — production of adequate consumer goods, rising incomes, all-round prosperity — depends on millions of individual decisions rather than 'godlike book-keeping of human destiny' by a few planners. - Private enterprise is not anti-planning; the Bombay Plan (1944) was conceived by industrialists, and the First Five-Year Plan saw the private sector over-fulfil its investment targets while the public sector fell ~40% short. - The Second Five-Year Plan imported Soviet-style totalitarian planning techniques (all-comprehensive scope, physical targets without resources, heavy-industry bias, monolithic administration) which are structurally incompatible with Indian democracy and pluralism. - Comprehensive central planning fails in India for two further reasons: inadequate statistical data magnifies any error nationally, and a pluralistic society cannot be subjected to monolithic solutions. - Realistic planning must begin from human nature 'as it is and not as it ought to be,' firmly establish the right to private property, and treat the State as a catalyst rather than a substitute for individual and joint-stock enterprise. - The State's positive role is to build infrastructure, ensure an apolitical administrative machinery, foster competition, and avoid creating insulated monopolies — production of consumer goods, not ideology, gives meaning to 'standard of living.' ### State Enterprises in a Democracy *By Murarji J. Vaidya* Vaidya opens with a semantic complaint: 'people's democracies' are not democracies and the Indian 'public sector' is not public — its undertakings are merely owned in theory by the people, the way a reflection in a river is part of the river. He surveys the eight varieties of State Undertaking catalogued by a Congress Parliamentary Party sub-committee (State Banks, statutory corporations, departmental undertakings, commodity and control boards, commissions, port trusts and local authorities, limited companies) and notes that state ownership of mints, postal services and mines is ancient, not a socialist invention — what is new in India is the ideological compulsion behind the expansion of the politico-bureaucratic sector. As an illustration, the diversion of ordnance factories to truck production while private automobile capacity sits idle has produced an arms shortage at the very moment Chinese 'Communist imperialism' threatens the frontier. From this Vaidya derives six criteria by which any State Undertaking must be justified: that the move is productive rather than ideological; that it is not a monopoly holding the consumer hostage; that it is run efficiently and economically; that workers are fairly treated without imposing disproportionate burdens on the community; that it can be freed of political interference and patronage; and that it remains controllable by Parliament and ultimately the people. Applied honestly, he argues, the criteria mostly disqualify the existing expansion. The rendered pages reach the third criterion — efficiency — where Vaidya cites the Congress sub-committee's own admission that Hindustan Aircraft Ltd. and Bharat Electronics Ltd. cannot even be compared with private firms because they operate under defence secrecy, and a 1959 CPSU decree confessing consumer-goods shortages in the Soviet Union, before the chunk ends mid-argument on political freedom for state employees. - 'Public sector' is a misleading label: State Undertakings are public only in the notional sense that their ownership theoretically vests in the people. - State ownership of certain functions (mints, postal services, mines) is ancient and uncontroversial; what is novel is the *ideological* compulsion driving the present expansion in India. - The diversion of ordnance factories to truck production while idle private capacity exists has caused an arms shortage at a moment of Chinese threat — an illustration of ideological allocation harming national interest. - Vaidya proposes six tests for justifying any State Undertaking: productive (not ideological) motive, absence of monopoly power, efficient operation, fair treatment of workers without burdening the community, freedom from political patronage, and accountability to Parliament. - Even much-praised state undertakings like Hindustan Machine Tools show the gap between professed worker-ownership and actual labour-management schism; the Pay Commission has endorsed denying state employees the political freedoms guaranteed to other citizens. --- ## [Primary work] A Survey of State Enterprises in India URL: https://indianliberals.in/primary-works/a-survey-of-state-enterprises-a-d-shroff-may8-1962/ ### Summary A Survey of State Enterprises in India is a 1962 Forum of Free Enterprise booklet that reprints a sequence of Economic Times articles and editorials from 8 and 16 February 1962, framed by an introduction signed by A. D. Shroff, the Forum's President. The booklet collates a comparative study of sixteen large Central Government companies — covering roughly 91 per cent of actively functioning Central Government undertakings by paid-up capital — alongside private-sector benchmarks drawn from a Reserve Bank of India sample of 1,001 industrial companies and the Economic Times' own panel of 51 industrial giants. Shroff's introduction frames the booklet as a corrective to information opacity: even Parliament's Estimates Committee, he notes, has had to flag the difficulty of obtaining authentic data on state enterprises.… ### Body ## Summary A Survey of State Enterprises in India is a 1962 Forum of Free Enterprise booklet that reprints a sequence of Economic Times articles and editorials from 8 and 16 February 1962, framed by an introduction signed by A. D. Shroff, the Forum's President. The booklet collates a comparative study of sixteen large Central Government companies — covering roughly 91 per cent of actively functioning Central Government undertakings by paid-up capital — alongside private-sector benchmarks drawn from a Reserve Bank of India sample of 1,001 industrial companies and the Economic Times' own panel of 51 industrial giants. Shroff's introduction frames the booklet as a corrective to information opacity: even Parliament's Estimates Committee, he notes, has had to flag the difficulty of obtaining authentic data on state enterprises. The argumentative spine of the survey is that the public sector underperforms the private sector across every standard profitability measure — profits before tax as a percentage of total capital employed, gross profits to net worth plus borrowings, and profits after tax to net worth alike — and that the position is aggravated by the very low interest charge (around 2½ per cent) on government loans to these enterprises, which at normal market rates would have wiped out reported profits. The booklet further argues that, contrary to claims of pro-consumer pricing, public-sector units realised a 15.3 per cent profit margin on sales in 1959-60 and 24.9 per cent in 1960-61 against an average of 10 per cent charged by the private sector — so the consumer, too, has 'had a raw deal'. A second cluster of pieces attacks the accounting practices of state enterprises directly: publication delays beyond the limits set by Section 210 of the Companies Act; aggregation of salaries, fuel and power into uninformative 'overhead' lines; physically uncounted or wrongly valued stocks at Hindustan Shipyard, Praga Tools, Hindustan Steel, the National Coal Development Corporation and Fertiliser Corporation of India that have left profits overstated by lakhs and crores; and a Reserve Bank Bulletin study judged to have 'struck a vacuum instead of gold' by skipping the profit analysis altogether. An Appendix of six tables, supported by illustrative bar-charts of relative size, balance-sheet structure and profit ratios, supplies the underlying data on which the polemic rests. The booklet brackets its data with two ideological frames: a quoted line from Eugene Black, then President of the World Bank, insisting that private enterprise be accepted 'as an affirmative good' rather than 'a necessary evil', and a closing aphorism by Shroff himself — 'Free Enterprise was born with man and shall survive as long as man survives.' ## Key points - The booklet reprints two Economic Times articles (8 February 1962) and an editorial (16 February 1962) under the Forum of Free Enterprise imprint, framed by an introduction by A. D. Shroff. - The survey covers 16 large Central Government companies — about 91 per cent of actively functioning Central Government undertakings by paid-up capital — benchmarked against a Reserve Bank sample of 1,001 firms and the Economic Times' panel of 51 industrial giants. - Across every standard ratio — profits before tax to capital employed, gross profits to net worth plus borrowings, profits after tax to net worth — the public sector trails the private sector substantially. - The relative advantage public-sector units show in post-tax figures is attributed to large tax concessions arising from the youth of the companies, not from operational efficiency. - Public-sector units charged a higher profit margin on sales (15.3 per cent in 1959-60, 24.9 per cent in 1960-61) than the private sector's ~10 per cent average, refuting claims of consumer-friendly pricing. - Interest on government borrowings worked out at only about 2½ per cent — well below market rates — and at commercial rates would have wiped out reported public-sector profits. - Published accounts of state enterprises are shown to breach Companies Act Section 210 timelines, conceal salaries and fuel within 'overhead', and carry unverifiable inventory and unrecognised losses across multiple corporations (Hindustan Shipyard, Praga Tools, Hindustan Steel, National Coal Development Corporation). - A Reserve Bank of India Bulletin study of these enterprises is dismissed for skipping the profit analysis altogether — 'struck a vacuum instead of gold'. --- ## [Primary work] A Total War on Indian Poverty URL: https://indianliberals.in/primary-works/a-total-war-on-indian-poverty-eric-p-w-da-costa-january-1973/ ### Summary "A Total War on Indian Poverty" is the text of the A. D. Shroff Memorial Lecture delivered by Eric P. W. da Costa at the Delhi Centre of the Forum of Free Enterprise and issued as a Forum booklet dated 15 January 1973. Da Costa, then Managing Director of the Indian Institute of Public Opinion, opens by restating what he calls Shroff's two-strand economic philosophy: that the central role of development belongs to individual entrepreneurs who conceive and shape productive enterprises, and that such entrepreneurship is best secured in societies not overwhelmed by State regulations and the armoury of political power. He measures India's record against that philosophy and finds it wanting — the 1961 Census revealed that employment projections had been built on a 1.25 per cent population growth that was in fact twice as fast; the Second and Third Plans squandered scarce capital; foreign debt approached Rs.… ### Body ## Summary "A Total War on Indian Poverty" is the text of the A. D. Shroff Memorial Lecture delivered by Eric P. W. da Costa at the Delhi Centre of the Forum of Free Enterprise and issued as a Forum booklet dated 15 January 1973. Da Costa, then Managing Director of the Indian Institute of Public Opinion, opens by restating what he calls Shroff's two-strand economic philosophy: that the central role of development belongs to individual entrepreneurs who conceive and shape productive enterprises, and that such entrepreneurship is best secured in societies not overwhelmed by State regulations and the armoury of political power. He measures India's record against that philosophy and finds it wanting — the 1961 Census revealed that employment projections had been built on a 1.25 per cent population growth that was in fact twice as fast; the Second and Third Plans squandered scarce capital; foreign debt approached Rs. 8,000 crore; prices had doubled since 1961; and the country was now planning a Fifth Plan around a growth rate of perhaps 6 per cent while Brazil, Iran, South Korea and Taiwan had moved into the 10–15 per cent range. The positive programme da Costa proposes is a "total war" on poverty along Gandhian lines but with classical-liberal instruments. He calls for halving the Capital:Output ratio toward the 2:1 figure of the First Plan, sustaining a 7 per cent annual growth rate, generating six million jobs a year (63 million over the coming decade), and channelling rural works of roughly Rs. 1,250 crore per year into agriculture, small irrigation, medium and small industry, and the labour-intensive "mistri" economy. Punjab is held up as a working prototype of integrated agricultural and industrial revolution, contrasted with the "great losing giants like Hindustan Steel" and the inflationary record of large multi-purpose projects. Government must mobilise resources and raise revenues from about 20 to 25 per cent of GNP by 1982, but the people must equally be able to discipline the Government — freedom of expression and constitutional rights, even as though in an emergency, must operate without restraint. Da Costa frames the lecture as a moral as well as economic argument. Quoting Diocletian's failed price edict of 301 A.D. and warning against Fair Price Shops without supplies, he insists that the basic laws of supply and demand are no respecters of persons. He concedes he cannot prescribe a single ideological answer — "We know that it is not Socialism, nor Free Enterprise, nor Resources nor Plans, which have down the years, been the catalytic agents of any nation's will" — but reduces the social content of justice in India to food, clothing, shelter and jobs, declaring that "Social Justice means jobs." The closing paragraphs invoke 1922 and the 1971 Bangladesh war as proof that India retains the capacity for superhuman tasks, and call on intellectuals and the private sector alike to abandon hobby-horses and join a single-point national programme against endemic poverty. ## Key points - Restates A. D. Shroff's twin theses: development is driven by individual entrepreneurs, and entrepreneurship requires societies not overwhelmed by State regulation and political power. - Uses the 1961 Census revision of working-population growth (from 1.25% to roughly twice that rate) to indict the Second through Fourth Plans for relegating employment to a 'lowly place'. - Charges economists and planners with wildly inefficient use of scarce capital — foreign debt near Rs. 8,000 crore, prices doubled since 1961, growth stuck near 4% while South Korea, Taiwan, Brazil and Iran posted 10–15%. - Prescribes a Capital:Output ratio of 2:1, a 7% growth rate, 14% domestic savings, and 6 per cent foodgrain growth as the non-inflationary path. - Calls for rural works of around Rs. 1,250 crore per year and 63 million additional jobs over the coming decade — about 6 million jobs annually. - Holds up Punjab as a working prototype of simultaneous agricultural (8%) and industrial (10%) revolution, and rejects high-capital labour-short technologies outside steel, cement, paper and petrochemicals. - Argues that Government must raise revenues from ~20% to 25% of GNP by 1982 but that people must equally discipline Government — constitutional rights and free expression must operate without restraint even in emergency. - Reframes 'Social Justice' as concretely food, clothing, shelter and jobs, refusing both pure socialist and pure free-enterprise answers and invoking a Gandhian register of mass mobilisation. --- ## [Primary work] A Viable Agriculture Policy for Sustained Growth URL: https://indianliberals.in/primary-works/a-vaiable-agriculture-policy-s-starapore-september-3-2012/ ### Summary S. S. Tarapore — economist and former Deputy Governor of the Reserve Bank of India — uses this Forum of Free Enterprise booklet (a reprint of his April–June 2012 Inclusion article, framed by an introduction from editor Sunil S. Bhandare) to argue that Indian agriculture has been hollowed out by a development model that lets the share of agriculture in GDP fall to 14.4 per cent while seventy per cent of the population still lives in rural areas. Writing against the looming 2012-13 drought, he warns that if this 'sectoral distribution of income' is not corrected, the resulting rural-to-urban migration will not be absorbed by Indian cities and will produce a 'severe social explosion'. Tarapore lays out a five-point reform agenda for a 'viable' agricultural policy: India must become a major and predictable commodity producer and exporter; overhaul its procurement-pricing system; expand the production of pulses and oilseeds; selectively corporatise farming on uncultivated government land; and promote allied activities such as livestock, fisheries, horticulture and floriculture.… ### Body ## Summary S. S. Tarapore — economist and former Deputy Governor of the Reserve Bank of India — uses this Forum of Free Enterprise booklet (a reprint of his April–June 2012 Inclusion article, framed by an introduction from editor Sunil S. Bhandare) to argue that Indian agriculture has been hollowed out by a development model that lets the share of agriculture in GDP fall to 14.4 per cent while seventy per cent of the population still lives in rural areas. Writing against the looming 2012-13 drought, he warns that if this 'sectoral distribution of income' is not corrected, the resulting rural-to-urban migration will not be absorbed by Indian cities and will produce a 'severe social explosion'. Tarapore lays out a five-point reform agenda for a 'viable' agricultural policy: India must become a major and predictable commodity producer and exporter; overhaul its procurement-pricing system; expand the production of pulses and oilseeds; selectively corporatise farming on uncultivated government land; and promote allied activities such as livestock, fisheries, horticulture and floriculture. Central to all of this is the demand that the 'export control raj' — periodic bans on rice, sugar, onions and cotton — 'must be totally abandoned' so that domestic producers receive world prices and farm incomes rise. The second half of the essay is a critique of the foodgrain procurement-and-storage regime. Drawing on a seminal Economic Times piece by CACP Chairman Ashok Gulati, Tarapore notes that public-sector foodgrain stocks would exceed 75 million tonnes against storage capacity of only 50 million tonnes, generating a 'colossal damage' the authorities cannot publicly acknowledge. He recommends exporting stocks even at 20–25 per cent below MSP, ending state bonus-leapfrogging above the MSP, and using free PDS distribution to clear excess inventories rather than feed rats. Recalling Indira Gandhi's 1980s admission about scuttled oil-palm corporatisation — 'We did some funny things, didn't we?' — he urges leasing uncultivated government land to corporates for pulses and oilseed production. The booklet ends with a Prime Minister's Economic Advisory Council data table on farm crop output for 2004-05 to 2011-12, a tribute to Shailesh Kapadia (whose memorial trust sponsored the booklet), and a one-page note on the Forum of Free Enterprise. ## Key points - Frames the 2012-13 drought as a precipitating crisis that exposes deeper, structural fault-lines in Indian agriculture rather than a one-off shock. - Identifies the central macroeconomic problem as the gap between agriculture's 14.4 per cent share of GDP and its 70 per cent share of population, which guarantees forced rural-to-urban migration unless reversed. - Calls for India to become a major commodity producer and exporter by abolishing the 'export control raj' of periodic bans on rice, sugar, onions and cotton. - Proposes overhauling the procurement-pricing regime, restricting state bonuses above the MSP, and exporting surplus foodgrain stocks even at 20–25 per cent below MSP rather than letting them rot in open storage. - Cites Ashok Gulati on the 'foodgrain mountain' — stocks projected to exceed 75 million tonnes against only 50 million tonnes of covered storage — as evidence of a political-economic-social imbroglio. - Recommends selective corporatisation of agriculture by leasing uncultivated government land to corporates for pulses and oilseed production, invoking Indira Gandhi's regret over a scuttled 1970s oil-palm proposal. - Argues that without an aggressive policy to lift agriculture's growth rate to four per cent per annum, 'abject poverty will never be alleviated' even if overall GDP grows at ten per cent. - Frames the booklet within the Forum of Free Enterprise's broader project, opening with A. D. Shroff's 'Free Enterprise was born with man' epigraph and closing with Eugene Black's defence of private enterprise as 'an affirmative good'. --- ## [Primary work] A VISION OF INDIA IN 2020 URL: https://indianliberals.in/primary-works/a-vision-on-new-india-2020-mukesh-a-ambani/ ### Summary Delivered as a Forum of Free Enterprise talk in April 1998 under the auspices of the Ladies' Wing of the Indian Merchants' Chamber, Mukesh D. Ambani's booklet is a sustained argument that India can become one of the world's five leading economic powers by 2020. Ambani frames the coming two decades as a transition from the industrial age to an information-driven, globalised economy in which transparency, speed, and human capital decide national success. He insists that the orthodox forecast of 7% annual growth would condemn India to wait 68 years to reach developed-world GDP, and instead urges a strategy aimed at doubling per capita income every five years — a target India must meet because, he writes, the country has "really no options" between great-power status and going under. The substantive programme rests on two leapfrog sectors. Agriculture, with 329 million hectares of land and a competitive advantage in soil, sunshine and rain, can be quintupled in output by raising yields to international standards, employing 120 million additional workers on wasteland and reversing rural-to-urban migration.… ### Body ## Summary Delivered as a Forum of Free Enterprise talk in April 1998 under the auspices of the Ladies' Wing of the Indian Merchants' Chamber, Mukesh D. Ambani's booklet is a sustained argument that India can become one of the world's five leading economic powers by 2020. Ambani frames the coming two decades as a transition from the industrial age to an information-driven, globalised economy in which transparency, speed, and human capital decide national success. He insists that the orthodox forecast of 7% annual growth would condemn India to wait 68 years to reach developed-world GDP, and instead urges a strategy aimed at doubling per capita income every five years — a target India must meet because, he writes, the country has "really no options" between great-power status and going under. The substantive programme rests on two leapfrog sectors. Agriculture, with 329 million hectares of land and a competitive advantage in soil, sunshine and rain, can be quintupled in output by raising yields to international standards, employing 120 million additional workers on wasteland and reversing rural-to-urban migration. Information technology can place an Indian worker at USD 20,000 a year, eventually drawing in roughly a trillion dollars over twenty years as 50 million skilled young workers service global demand. Around these pillars Ambani lists six "foundations" — a young population (400 million Indians under 35 by 2020), a large domestic market, the dramatic compression of doubling times since Japan and Korea, India's pluralist and democratic ethos, the resilience of the Indian family, and the easing of infrastructure constraints by technology. The second half of the booklet shifts from forecast to prescription. Ambani argues that a 21st-century economy cannot be administered by an 18th-century state apparatus: the government-people relationship must move from "benefactor and supplicants" to one of partnership, and he explicitly rejects the cliché that the state has no role in a market-driven economy, assigning it macro-economic management and a competition-promoting regulatory framework. Education reform, participatory institutions, the return of non-resident professionals, and — given centrality — the full participation of women in the knowledge economy are presented as non-negotiable. The work closes with a personal credo, the "Mantras" Ambani says he learned from his father at Reliance: think big, work long-term, demand excellence, embrace technology, never accept defeat. An A. D. Shroff epigraph at the front and a Eugene Black epigraph at the back frame the booklet within the Forum's classical-liberal advocacy of private enterprise as an affirmative good. ## Key points - Sets the target of India becoming one of the world's five major economic powers by 2020, alongside USA, Germany, China and Japan. - Rejects the consensus 7% growth path; argues India must double per capita income every five years and that double-digit GDP growth is feasible on a sustained basis. - Identifies agriculture and information technology as the two leapfrog sectors capable of generating maximum wealth on modest investment. - Frames a demographic dividend: roughly 400 million Indians below 35 by 2020 — a young, English-conversant workforce primed for the information economy. - Argues that India's pluralist, tolerant, democratic and family-centred ethos is itself a competitive advantage in the information age. - Calls for modernising the state — a 21st-century economy cannot operate with an 18th-century state apparatus — while explicitly rejecting the view that government has no role in a market-driven economy. - Treats full participation of women in the workforce as a non-negotiable condition of a knowledge-based society, holding up Sushmita Sen, Aishwarya Rai and Kalpana Chawla as exemplars. - Closes with a personal credo ("Mantras") learnt at Reliance — think big, demand excellence, embrace technology, never accept defeat. --- ## [Primary work] आंदोलन URL: https://indianliberals.in/primary-works/aandolan-anant-umrikar/ ### Summary आंदोलन (Andolan, 'Agitation/Movement') is a Marathi-language book of four long reportage essays by Anant Umrikar, a journalist and associate of Shetkari Sanghatana leader Sharad Joshi, first published on 9 August 1992 and revised for a third edition in 2008. The book is dedicated to Sharad Joshi. In the rendered pages (covering the preface, TOC, and the opening of the first two essays), Umrikar writes in a first-person eyewitness style, immersing readers in the lived texture of the farmers' agitation movement in Maharashtra in the early 1990s. The first essay, 'पाउले चालती परभणीची वाट' ('Footsteps on the Parbhani Road'), documents a large Shetkari Sanghatana conference held in Parbhani. In the rendered pages, Umrikar describes arriving at the weekly market, meeting a local activist named Prasad, and then witnessing the extraordinary mobilisation of tens of thousands of farmers from across Maharashtra. Sharad Joshi himself arrives and addresses the crowd; folk songs (powadas) in praise of the movement and its leader are reproduced in the Marathi text.… ### Body ## Summary आंदोलन (Andolan, 'Agitation/Movement') is a Marathi-language book of four long reportage essays by Anant Umrikar, a journalist and associate of Shetkari Sanghatana leader Sharad Joshi, first published on 9 August 1992 and revised for a third edition in 2008. The book is dedicated to Sharad Joshi. In the rendered pages (covering the preface, TOC, and the opening of the first two essays), Umrikar writes in a first-person eyewitness style, immersing readers in the lived texture of the farmers' agitation movement in Maharashtra in the early 1990s. The first essay, 'पाउले चालती परभणीची वाट' ('Footsteps on the Parbhani Road'), documents a large Shetkari Sanghatana conference held in Parbhani. In the rendered pages, Umrikar describes arriving at the weekly market, meeting a local activist named Prasad, and then witnessing the extraordinary mobilisation of tens of thousands of farmers from across Maharashtra. Sharad Joshi himself arrives and addresses the crowd; folk songs (powadas) in praise of the movement and its leader are reproduced in the Marathi text. The essay captures not only the logistics and spectacle of mass organising but also the ideological conviction that the Shetkari Sanghatana's advocacy of free-market agricultural economics represents a genuinely revolutionary idea, one the mainstream urban reader has yet to appreciate. The second essay, 'आंदोलन' ('Agitation'), begins with a train journey to Delhi for a Shetkari Sanghatana protest march. In the rendered pages, a large contingent of activists — including named organisers such as Vijay Jawandhia, Bhaskarrao, and Prahlad Patil, alongside many women workers — boards a train from Parbhani and travels north. Umrikar records snatches of conversation, the mood of anticipation and apprehension on the journey, and early scenes of the protest. The preface explicitly frames the book's purpose: to carry the Shetkari Sanghatana's free-market ideas beyond the rural base and into the urban Marathi reading public. ## Key points - The book is dedicated to Sharad Joshi and is written entirely within the intellectual and organisational orbit of the Shetkari Sanghatana farmers' movement. - In the rendered pages, Umrikar writes as a participant-observer, embedding himself in the crowd at the Parbhani conference and then in the Delhi-bound protest train. - The preface explicitly identifies the book's political purpose: to popularise free-market (मुक्त अर्थव्यवस्था) agricultural ideas among urban Marathi readers who treat them as heretical. - Marathi folk songs (powadas) praising Sharad Joshi are reproduced verbatim in the first essay, signalling that the book blends journalism with movement literature. - Named activists appearing in the rendered pages include Prasad (Parbhani), Harshendra Deshkar, Anant Gore, Madhav Khandekar, Vijay Jawandhia, Bhaskarrao, and Prahlad Patil — indicating the thick network of Shetkari Sanghatana cadre across Vidarbha and Marathwada. - The Parbhani conference described in essay 1 drew participants from Gujarat, Andhra Pradesh, Karnataka, Madhya Pradesh, Rajasthan, and other states, marking the Shetkari Sanghatana as a supra-regional mobilisation. - The third edition (2008) incorporates pieces from an earlier Umrikar book 'Vatchal', expanding the original 1992 volume. --- ## [Primary work] Access to Medicines at Affordable Prices URL: https://indianliberals.in/primary-works/access-to-medicines-at-affordable-prices-dr-y-k-hamied-january-4-2014/ ### Summary Dr. Y. K. Hamied, Chairman of Cipla Ltd., uses his 25th Bhogilal Leherchand Memorial Lecture (delivered 12 November 2013 in Mumbai under the auspices of the Forum of Free Enterprise) to argue that access to affordable, life-saving medicines is a fundamental human right that India's patent regime ought to protect. He divides the world into a Rich global North of 600 million and a Developing global South of 3 billion, observing that one-third of humanity — and roughly half of Asia and Africa — lacks access to even basic medicines. Against this backdrop he indicts both multinational drug companies that have aggressively blocked low-cost AIDS drugs to Africa, and the Indian government, whose 2005 Indian Patent Bill (incorporating product patents and section 3(d) loopholes) he says has stalled the affordability gains that the 1970 Patent Act, which patented only the process and not the product, had previously secured. Hamied walks the reader through the legal mechanics: the distinction between patents and compulsory licensing (CL), the GATT-era pressures that forced India to accept TRIPS in 1995, the 10-year transition that ended in January 2005, the introduction of EMR and the mail-… ### Body ## Summary Dr. Y. K. Hamied, Chairman of Cipla Ltd., uses his 25th Bhogilal Leherchand Memorial Lecture (delivered 12 November 2013 in Mumbai under the auspices of the Forum of Free Enterprise) to argue that access to affordable, life-saving medicines is a fundamental human right that India's patent regime ought to protect. He divides the world into a Rich global North of 600 million and a Developing global South of 3 billion, observing that one-third of humanity — and roughly half of Asia and Africa — lacks access to even basic medicines. Against this backdrop he indicts both multinational drug companies that have aggressively blocked low-cost AIDS drugs to Africa, and the Indian government, whose 2005 Indian Patent Bill (incorporating product patents and section 3(d) loopholes) he says has stalled the affordability gains that the 1970 Patent Act, which patented only the process and not the product, had previously secured. Hamied walks the reader through the legal mechanics: the distinction between patents and compulsory licensing (CL), the GATT-era pressures that forced India to accept TRIPS in 1995, the 10-year transition that ended in January 2005, the introduction of EMR and the mail-box system for 6,000–7,000 backdated patents, the 2001 DOHA declaration that 149 countries unanimously adopted (and the USA later tried to gut), and the I. K. Gujral Parliamentary Committee's 1993 verdict that the process-patent regime should be maintained and a 20-year term should not be conceded. He insists that compulsory licensing — better named 'Obligatory or Essential Drug Licensing' — is fully TRIPS-compliant when used pragmatically to break monopoly pricing on essential medicines. The lecture closes on a credo: vision, imagination and enthusiasm are the qualities India's pharmaceutical industry must marshal to remain the 'Pharmacy Center of the world', expanding R&D capacity and matching the technological parity of the developed world without sacrificing its mission of affordability. Hamied quotes a 1981 WHO statement attributed to Indira Gandhi — that medical discoveries should be free of patents and free of profiteering on life or death — and frames Cipla's work, including its free Palliative Care Centre in Pune, as a working demonstration that corporate capability can serve moral obligation. A foreword by Minoo R. Shroff, President of the Forum of Free Enterprise, situates the lecture alongside the documentary 'Fire In The Blood' as evidence of how vision and daring can be wielded by private enterprise to alleviate suffering. ## Key points - Frames access to affordable medicines as a fundamental, universal human right, with one-third of the world's population (50% in Asia and Africa) lacking access to even basic medicines. - Defends the 1970 Indian Patent Act's process-only patent regime as the engine that made Indian generics globally competitive, and faults the 2005 Indian Patent Bill (excepting section 3(d)) for restoring product monopolies that price drugs out of reach. - Argues that compulsory licensing is a legally recognised, TRIPS-compliant tool to overcome access barriers when a patented drug is unavailable or unaffordable, and proposes renaming it 'Obligatory or Essential Drug Licensing' to reflect its public-health logic. - Recounts India's reluctant acceptance of GATT/WTO/TRIPS under US pressure (1989 onward), the 1995 grant of a 10-year transition, and the December 2000 introduction of EMR and a mail-box system for 6,000–7,000 backdated patents — describing the backdating itself as 'beyond all rational thinking'. - Cites the disease burden in India — 110 million mentally ill, 80 million cardiac, 60 million diabetic, 60 million asthmatic, 50 million hepatitis cases, 1 in 3 Indians with latent TB — and projects 1.65 billion population by 2050 with 800 million still without sanitation and 500 million without electricity, to argue for a 'need-based patent regime'. - Highlights the 2001 DOHA declaration (149 countries) and the USA's 2003 attempt to dilute it (vetoed 148-to-1 in a Doha ratification meeting, leaving the declaration unratified), as evidence that powerful states resist a public-health reading of TRIPS. - Calls on the Indian pharmaceutical industry to expand R&D, achieve technological parity with the developed world, and remain self-reliant — invoking vision, imagination and enthusiasm as the three values that must guide future progress. - Closes with a 1981 WHO statement attributed to Indira Gandhi — that medical discoveries should be free of patents and free of profiteering on life or death — as the moral horizon for India's pharma policy. --- ## [Primary work] Accountability in Public Service URL: https://indianliberals.in/primary-works/accountability-in-public-sevice-n-vittal-february-4-2011/ ### Summary Reproduced from successive issues of Freedom First (November–December 2010 and January 2011), this Forum of Free Enterprise booklet by former Central Vigilance Commissioner N. Vittal frames accountability as the missing soul of Indian public service. Sunil Bhandare's editorial preface places the essay in the immediate context of the 2010–11 scams and an open letter of fourteen prominent citizens calling for empowered Lok Ayuktas and the Lok Pal Bill, while invoking M. C. Chagla's Ninth A. D. Shroff Memorial Lecture on the judiciary as a long-standing Forum touchstone for the 'principle of zero tolerance' toward corruption. Vittal's central argument is a simple equation — Input × Accountability = Output — that he uses to insist accountability is finally fixable only on individual human beings, never on the abstract 'organisation'.… ### Body ## Summary Reproduced from successive issues of Freedom First (November–December 2010 and January 2011), this Forum of Free Enterprise booklet by former Central Vigilance Commissioner N. Vittal frames accountability as the missing soul of Indian public service. Sunil Bhandare's editorial preface places the essay in the immediate context of the 2010–11 scams and an open letter of fourteen prominent citizens calling for empowered Lok Ayuktas and the Lok Pal Bill, while invoking M. C. Chagla's Ninth A. D. Shroff Memorial Lecture on the judiciary as a long-standing Forum touchstone for the 'principle of zero tolerance' toward corruption. Vittal's central argument is a simple equation — Input × Accountability = Output — that he uses to insist accountability is finally fixable only on individual human beings, never on the abstract 'organisation'. He diagnoses several Indian pathologies that erode this individual responsibility: Parkinson's Law expansion of the bureaucracy; the constitutional cushion of Article 311, which converts the public servant's relationship with the state from a contract into a security tenure and 'blunts' performance discipline; a broken Annual Confidential Reports system in which 'good' has become a synonym for average or even poor; caste and reservation-related complications around adverse remarks; entrenched opacity nourished by the Official Secrets Act; and corruption itself, which Transparency International's Corruption Perceptions Index tracks year after year. The second half of the essay turns prescriptive. Vittal endorses the Right to Information Act of 2005 as 'a great blessing' and recommends the standard procedural toolkit of elimination, combination, e-sequencing, substitution and modification, alongside aggressive use of information technology (the Railways' passenger reservation system is his model case). He draws extensively on Pradip Khandwalla's Transforming Governance through New Public Management to argue for a directly elected Prime Minister and Chief Ministers serving fixed five-year terms, run-off elections requiring 50%+1 majorities, Margaret Thatcher-style agencification of two-thirds of departmental functions, and competition as a cure (the 1994 telecom de-monopolisation having delivered teledensity from 1 in 1990 to 53 by 2010). The 3G spectrum auction is cited approvingly against the 2G scam as proof that transparent processes pay. Vittal closes optimistically at 'the age of 72', resting his hope on India's free press, alert electronic and print media, residual self-correction (the courts have forced corrections via the Hawala case and the Vineet Narain judgement of December 1997, which made the CBI and Enforcement Directorate statutory under CVC supervision), and on culture-building through professional ethics codes and Hippocratic-style oaths. A short biographical note on Shailesh Kapadia (1949–1988), whose Memorial Trust sponsored the booklet, and a Eugene Black epigraph on private enterprise as 'an affirmative good' close the volume. ## Key points - Frames the quality of public service as Input × Accountability = Output (I × A = O), with accountability fixable only on individuals, never on the abstract organisation. - Diagnoses Article 311 of the Constitution as a security-tenure shield that converts the public servant–state relation from contract to status and blunts accountability; proposes replacing it with a rolling contract. - Indicts the Annual Confidential Reports system: 'good' has become a synonym for average or even poor, with adverse remarks chilled by reservation politics and post-Andhra Pradesh judicial scrutiny. - Identifies four root causes of corruption in Indian bureaucracy — lack of transparency, red tape, complicated procedures, and 'groupism or brotherhood' culture nourished by the Official Secrets Act. - Endorses the Right to Information Act 2005 as 'a great blessing' and recommends elimination–combination–e-sequencing–substitution–modification of procedures plus e-governance (Railways reservation as model). - Borrows Pradip Khandwalla's New Public Management agenda: directly elected PM/CMs on fixed five-year terms, run-off elections at 50%+1, Thatcher-style agencification of two-thirds of departmental functions. - Cites the 1994 telecom de-monopolisation and the 3G auction as evidence that competition and transparent design dramatically reduce corruption while expanding service. - Closes with a culture-and-ethics argument: Hippocratic-style oaths, ethics modules in professional education, and a free press as the indispensable countervailing force. --- ## [Primary work] Adapting Indian Industry to Globalization URL: https://indianliberals.in/primary-works/adapting-indian-industry-to-globalization-tarun-das-may-8-2007/ ### Summary Delivered on 19 July 2006 at the Forum of Free Enterprise's Golden Jubilee in Mumbai and published as a 2007 booklet, Tarun Das's address tracks Indian industry's transit from the post-1947 'commanding heights' regime to the open, competitive landscape of the mid-2000s. Speaking as Chief Mentor of the Confederation of Indian Industry, Das frames 1947–1991 as four decades in which 'stringent controls, licensing and regulations with extensive micro management of the private sector' preempted enterprise; 1991 onward then ushers in a continuous regime of competition, foreign capital, and globalised consumer markets in which Indian firms are expected to perform without protection. The argumentative centre of the talk is that competitiveness has become an unending discipline rather than a milestone — 'one can not say I am competitive and stop at that' — and that Indian companies must move past the joint-venture model of the mid-1990s towards indigenous strength in technology, R&D, and corporate governance.… ### Body ## Summary Delivered on 19 July 2006 at the Forum of Free Enterprise's Golden Jubilee in Mumbai and published as a 2007 booklet, Tarun Das's address tracks Indian industry's transit from the post-1947 'commanding heights' regime to the open, competitive landscape of the mid-2000s. Speaking as Chief Mentor of the Confederation of Indian Industry, Das frames 1947–1991 as four decades in which 'stringent controls, licensing and regulations with extensive micro management of the private sector' preempted enterprise; 1991 onward then ushers in a continuous regime of competition, foreign capital, and globalised consumer markets in which Indian firms are expected to perform without protection. The argumentative centre of the talk is that competitiveness has become an unending discipline rather than a milestone — 'one can not say I am competitive and stop at that' — and that Indian companies must move past the joint-venture model of the mid-1990s towards indigenous strength in technology, R&D, and corporate governance. Das catalogues the externalities Indian industry must now absorb (US interest rates, the Iraq war, the rise of China, global commodity shifts) and the rising non-tariff barriers in the West reacting to outsourcing and to Indian acquisitions abroad such as Tata's Corus deal and Hindalco's Novelis purchase. He calls for ethics and values to anchor the new corporate ambition, holding up the Tatas as a benchmark and identifying a domestic 'crab mentality' that pulls down pioneers. A second register of the address attends to corporate social responsibility, employability, multinational workforces, and the still-pending liberation of food and agriculture from the controls already lifted from industry. Das closes optimistically on three engines — government 'gradually getting out of the way', Indian entrepreneurship coming of age, and India's demographic youth — predicting manufacturing parity with China, R&D-led global emergence, and India as 'the food factory to the world'. The booklet wraps Das's address with a 1956 Forum 'A Manifesto' creed of free enterprise and standard organisational matter — historical material reproduced from earlier Forum publications rather than authored by Das. ## Key points - Frames the 1947–1991 era as one of 'stringent controls, licensing and regulations' that preempted private initiative, contrasted with post-1991 liberalization that now requires Indian firms to compete without protection. - Argues that competitiveness is a continuous, never-completed process — quality, productivity, cost control, and R&D must be sustained, not declared. - Critiques the joint-venture model dominant before 1991 because foreign partners retained virtual control of technology; calls for Indian industry to build R&D and technology capacity on its own. - Reads globalization as multi-directional: Indian firms acquiring abroad (Tata–Corus in the UK, Hindalco–Novelis in the US) while Western markets erect non-tariff barriers in response to outsourcing. - Identifies a domestic 'crab mentality' that pulls down successful Indian pioneers, and urges adoption of Tata-style ethics and corporate values as a competitive moat. - Reads CSR — community health, disaster response, training, HIV/AIDS programmes — as integral to globalized corporate citizenship, not optional add-on. - Calls for deregulation of food and agriculture along the same lines as industry, predicting India will emerge as 'the food factory to the world' and as a global R&D destination. - Anchors optimism in three forces: government withdrawal from operational economy, maturing Indian entrepreneurship, and a youth-heavy demographic (≈500 million under 30). --- ## [Primary work] Administrators, Managers and Leadership URL: https://indianliberals.in/primary-works/administrators-managers-and-leadership-by-deepak-parekh-1997/ ### Summary Delivered as the Lalit Doshi Memorial Lecture in Mumbai on 4th August 1997 and reprinted by the Forum of Free Enterprise, Deepak Parekh — then Chairman of HDFC — uses the occasion to argue that India's bureaucratic cadre must consciously evolve from administrators into managers and finally into leaders. He sketches the three roles as a developmental arc: the administrator ensures that decisions are executed and rules followed; the manager organises and reacts to information and external stimuli; the leader overlays both with risk-taking, vision, and the charisma to inspire willing followers. The lecture is anchored in the contention that the ICS legacy inherited from the British, while disciplined, produced a rule-bound and at times elitist civil service whose attitudes must now be re-engineered in step with India's liberalisation. The core argument unfolds through a discussion of the emerging environment.… ### Body ## Summary Delivered as the Lalit Doshi Memorial Lecture in Mumbai on 4th August 1997 and reprinted by the Forum of Free Enterprise, Deepak Parekh — then Chairman of HDFC — uses the occasion to argue that India's bureaucratic cadre must consciously evolve from administrators into managers and finally into leaders. He sketches the three roles as a developmental arc: the administrator ensures that decisions are executed and rules followed; the manager organises and reacts to information and external stimuli; the leader overlays both with risk-taking, vision, and the charisma to inspire willing followers. The lecture is anchored in the contention that the ICS legacy inherited from the British, while disciplined, produced a rule-bound and at times elitist civil service whose attitudes must now be re-engineered in step with India's liberalisation. The core argument unfolds through a discussion of the emerging environment. With governments rightly retreating from breadmaking and bicycles, Parekh insists that bureaucracy must shift from patron, licenser and enforcer to facilitator and partner — a transition he illustrates with Singapore Inc., where the head of state delivers an annual chairman-style report and the civil services work in tandem with private enterprise. He maps the same arc on to career progression: an IAS probationer should hone administrative skills until the level of director, develop managerial skills up to joint secretary, and be groomed for leadership thereafter, much as a corporate Vice-President is prepared for a CEO role. Examples from the central, state and PSU cadres convince him that the talent exists; the problem is that too few make the full transition, and that top slots are too often filled with officers carrying only a few months of residual tenure — a structural design that makes vision and judgement calls almost impossible. The second half turns to governance. Corporate governance in family-run private firms needs strengthening, but Parekh reserves his sharpest critique for public-sector corporate governance, where PSU boards are subservient to ministries, government nominees crowd out independent representation, and managements are encouraged to maintain the status quo. He extends the same diagnostic to the state itself: a peculiarly complex legal, fiscal and regulatory environment that regulates rather than supervises and complicates rather than clarifies, producing what he memorably calls a 'corruption tax'. The remedy is a concerted re-engineering of government procedures — the famous file-noting system, he argues, suits rule-based administration but breaks down under public-private partnership where judgement calls are routine — together with the development of specialists inside the civil service and a willingness to draw talent from the private sector. The rendered chunk closes as Parekh begins his final section on what constitutes a good leader, naming customers and employees as the two constituencies that emerging leaders must serve. ## Key points - Parekh posits a three-tier developmental arc — administrator (rule-executor), manager (process-organiser and information-handler), and leader (risk-taker with vision and the charisma to inspire willing followers). - He attributes the rule-bound, sometimes elitist character of the Indian bureaucracy to its ICS inheritance and argues that liberalisation now demands a shift in approach and a segmentation of roles. - Career segmentation should mirror corporate grooming: administrative skill at probationer-to-director level, managerial skill from joint secretary onward, and conscious leadership development at the top. - The role of the state must move from patron, licenser and enforcer to partner, facilitator and regulator — illustrated through the Singapore Inc. model and through India's own creation of bodies like NHAI and TRAI. - Public-sector corporate governance is the weakest link: PSU boards are subservient to ministries, lack independent representation, and managements are pushed toward inertia rather than risk. - A peculiarly complex Indian regulatory environment regulates rather than supervises and complicates rather than clarifies, producing what Parekh terms a 'corruption tax' that accrues to others rather than the exchequer. - Filling the highest bureaucratic slots with officers who have only months of residual service makes leadership impossible, since no CEO can lead within a horizon of a few months. - Civil services need to cultivate specialists alongside generalists and should be opened more systematically to talent from the private sector, as Parekh has done at IL&FS. --- ## [Primary work] Agricultural Investment URL: https://indianliberals.in/primary-works/agricultural-investment-by-dr-gvk-rao-september-14-1993/ ### Summary Dr. G.V.K. Rao — then Chairman of Agricultural Finance Corporation Ltd. and a former Member of the Planning Commission — diagnoses why Indian agricultural growth slackened in the 1980s and lays out an investment-and-credit programme to revive it. Although agriculture's share of GDP had fallen to about 28 per cent, the sector still supported roughly 70 per cent of the labour force and supplied wage goods, industrial raw material and export earnings. Foodgrain output grew at only 1.7 per cent per annum during the first seven years of the eighties, a slackening Rao attributes to a relative decline in investment in agriculture. The pamphlet argues that future growth must come from intensification, technology upgrading and watershed-based rain-fed farming, and lists nine concrete investment areas — better water management in existing irrigation projects, bio-technology applications, a National Poultry Development Board on the Operation Flood model, drip and sprinkler irrigation, food processing, afforestation of 40 million tree-less forest hectares, sericulture, agricultural exports through APEDA, and horticultural marketing infrastructure modelled on the Delhi NDDB scheme. The seco… ### Body ## Summary Dr. G.V.K. Rao — then Chairman of Agricultural Finance Corporation Ltd. and a former Member of the Planning Commission — diagnoses why Indian agricultural growth slackened in the 1980s and lays out an investment-and-credit programme to revive it. Although agriculture's share of GDP had fallen to about 28 per cent, the sector still supported roughly 70 per cent of the labour force and supplied wage goods, industrial raw material and export earnings. Foodgrain output grew at only 1.7 per cent per annum during the first seven years of the eighties, a slackening Rao attributes to a relative decline in investment in agriculture. The pamphlet argues that future growth must come from intensification, technology upgrading and watershed-based rain-fed farming, and lists nine concrete investment areas — better water management in existing irrigation projects, bio-technology applications, a National Poultry Development Board on the Operation Flood model, drip and sprinkler irrigation, food processing, afforestation of 40 million tree-less forest hectares, sericulture, agricultural exports through APEDA, and horticultural marketing infrastructure modelled on the Delhi NDDB scheme. The second half of the booklet is a credit-supply calculation. The share of agriculture in total investment had fallen from 26.1 per cent in the First Plan to 11.9 per cent in the Seventh, and real gross capital formation in agriculture had actually contracted at 2 per cent per annum between 1979-80 and 1987-88. Rao estimates the Eighth Plan credit requirement at Rs. 53,600 crores against an institutional supply of Rs. 39,200 crores — a gap of Rs. 14,400 crores. To close it he proposes raising the credit-deposit ratio per the Narasimham Committee, exempting incremental rural deposits from SLR and CRR, freeing co-operatives from official interference so they function like business institutions, mobilising rural surpluses through bonds and mutual funds, and recovering the Rs. 8,026 crore overdue book (55 per cent of demand) so that lendable resources can be recycled. Rao closes by emphasising that volume of credit alone will not suffice: project formulation, monitoring, cost-effective alternatives to expensive hard-rock dug-wells, and community participation through watershed-style compact-area development are equally necessary to maximise returns on agricultural investment. ## Key points - Agriculture's share of GDP has fallen to about 28 per cent but the sector still supports nearly 70 per cent of the labour force and supplies wage goods, industrial raw material and a growing share of exports. - Foodgrain growth slowed from 4 per cent per annum in the post-Green-Revolution years to only 1.7 per cent per annum in the first seven years of the eighties, rescued to 3.1 per cent only by exceptional 1983-84 and 1988-89 harvests. - The share of agriculture in total investment fell from 26.1 per cent in the First Plan to 15.1 per cent in the Sixth and 11.9 per cent in the Seventh; real gross capital formation actually declined at 2 per cent per annum between 1979-80 and 1987-88. - Future growth must come from intensification and technology upgrading — watershed-based rain-fed farming, biotechnology, horticulture and floriculture, oilseeds and pulses, post-harvest technology, and agri-business. - Nine specific investment heads are identified, including World Bank-style irrigation upgrades, a National Poultry Development Board on the Operation Flood model, drip irrigation on 1,00,000 hectares with a 50 per cent government subsidy, and afforestation of 1.5 million hectares per year. - Eighth Plan term-credit requirement is estimated at Rs. 53,600 crores against institutional supply of Rs. 39,200 crores, leaving a gap of Rs. 14,400 crores at 1991-92 prices. - Proposed remedies: raise the credit-deposit ratio per the Narasimham Committee, exempt incremental rural deposits from SLR and CRR, free co-operatives from official interference, and mobilise rural savings through bonds, mutual funds and other instruments. - Recovery of the Rs. 8,026 crore overdue book (55 per cent of demand in 1989-90) and cost-effective project design — not interest-rate manipulation — are presented as the binding constraints on rural credit performance. --- ## [Primary work] Agriculture & Economic Growth URL: https://indianliberals.in/primary-works/agriculture-and-economic-growth-9-january-1974/ ### Summary Based on a public lecture delivered under the auspices of the Forum of Free Enterprise in Bombay on 9 January 1974, this booklet by the economist Colin Clark — then Director of the Agricultural Economics Institute at Oxford — argues that India is on the verge of aborting its post-1950 economic take-off through a self-inflicted food crisis. Clark warns that the gravest threat is not external but a Government response built on procurement, price control, and the systematic neglect of agriculture. The famines that followed Lenin's procurement policy, Stalin's 1929 collectivisation, China's collectivised farming, and the experiments in Cuba, Algeria and Tunisia are paraded as the empirical record of what happens when the state replaces the market in the countryside. The core diagnosis is that Indian agriculture has been stagnant since 1910 — per-capita output essentially flat for sixty years — while the planners under Mahalanobis privileged heavy industry.… ### Body ## Summary Based on a public lecture delivered under the auspices of the Forum of Free Enterprise in Bombay on 9 January 1974, this booklet by the economist Colin Clark — then Director of the Agricultural Economics Institute at Oxford — argues that India is on the verge of aborting its post-1950 economic take-off through a self-inflicted food crisis. Clark warns that the gravest threat is not external but a Government response built on procurement, price control, and the systematic neglect of agriculture. The famines that followed Lenin's procurement policy, Stalin's 1929 collectivisation, China's collectivised farming, and the experiments in Cuba, Algeria and Tunisia are paraded as the empirical record of what happens when the state replaces the market in the countryside. The core diagnosis is that Indian agriculture has been stagnant since 1910 — per-capita output essentially flat for sixty years — while the planners under Mahalanobis privileged heavy industry. About 25 per cent of Indians are hungry in the literal sense; yields of rice, wheat, maize and sorghum are a fraction of those obtained in Japan, Italy, Taiwan or Egypt; more than 60 per cent of the labour force remains tied to the land at productivity barely above subsistence. Clark identifies fertiliser starvation as the binding constraint: India uses 12 kg per hectare to China's 30, Egypt's 100, and Taiwan's 250, and the Government's six-year blockage of the Tata Fertiliser Project in Gujarat has, on his calculation, destroyed 4½ million tonnes of grain a year. The prescription is unsparing. Abandon procurement entirely; postpone land ceilings by ten to twenty years until literacy improves; give absolute priority to fertilisers and to capital spending on agriculture and exports; cut the Central and State Governments' deficit spending to halt inflation; sink tube-wells in preference to mechanisation outside Punjab; and restore land taxation on the Australian model of unimproved capital valuation, which would reward rather than penalise the improving farmer. Clark closes by noting that he favours, for now, continuing not to assess agricultural income to income-tax, given the depth of India's food shortage. The Forum's standard disclaimer that the views are not necessarily its own is appended. ## Key points - Clark dates India's economic take-off — in W. W. Rostow's sense — to around 1950, with the savings rate rising from about 5% to 10% of national income, but warns the take-off can still be aborted by food crisis and inflation. - He rejects food procurement as 'utterly and completely wrong,' invoking a personal interview with Mahatma Gandhi at the end of 1947 in which Gandhi opposed Nehru's procurement, price-control and rationing scheme. - Collectivisation is condemned via comparative history: Lenin's procurement, Stalin's 1929 collectivisation and the 1933 famine, China's 1961 famine, and recent declines in Cuba and Algeria; Tunisia reversed its 1969 collectivisation on seeing the effect. - Indian agricultural production per capita has stagnated since 1910, while industry and services have advanced; about 25% of Indians are hungry in the literal sense (calorie minimum estimated at 1,650). - Yields are a fraction of those in Japan, Italy or Egypt — rice 1.67 vs 5.5 t/ha, wheat 1.23 vs 2.4, maize 1.15 vs 5, sorghum 0.49 vs 4 — and Indian fertiliser use (12 kg/ha) trails China (30), Egypt (100) and Taiwan (250). - Land ceilings, Clark argues from his Oxford fieldwork, work only where farmers are literate (Japan, Taiwan, Egypt, Ireland) and should be postponed 10–20 years in India. - The Government's six-year blockage of the Tata Fertiliser Project in Gujarat is held responsible for the loss of about 4½ million tonnes of grain a year and Rs. 500 crores in foreign exchange savings. - Policy recommendations: end deficit spending, give capital priority to agriculture and exports, sink tube-wells, mechanise only in Punjab-like regions, restore land taxation on the Australian unimproved-capital-valuation model that rewards farmer improvements. --- ## [Primary work] Administrators, Managers and Leadership URL: https://indianliberals.in/primary-works/administrators-managers-leadership-deepak-parekh/ ### Summary Delivered as the Lalit Doshi Memorial Lecture in Mumbai on 4 August 1997 and reprinted by the Forum of Free Enterprise, Deepak Parekh's address argues that India's post-liberalisation moment demands a deliberate metamorphosis of its civil services from rule-bound administrators into managers and, ultimately, leaders. Parekh begins by distinguishing the three roles: an administrator ensures decisions are executed and rules followed; a manager organises people and information to react to external stimuli; a leader adds risk-taking, foresight and the charisma to inspire willing followers. He treats his late friend Lalit Doshi as the case study — a celebrated IAS officer whose work on inward investment to Maharashtra showed bureaucracy at its best. The core diagnosis is that the ICS-to-IAS legacy bred an elitist, rule-bound officialdom that suited an information-scarce industrial age but is now obsolete. With liberalisation, the state must shrink from patron-licenser-enforcer to partner-facilitator. Parekh borrows the Singapore Inc.… ### Body ## Summary Delivered as the Lalit Doshi Memorial Lecture in Mumbai on 4 August 1997 and reprinted by the Forum of Free Enterprise, Deepak Parekh's address argues that India's post-liberalisation moment demands a deliberate metamorphosis of its civil services from rule-bound administrators into managers and, ultimately, leaders. Parekh begins by distinguishing the three roles: an administrator ensures decisions are executed and rules followed; a manager organises people and information to react to external stimuli; a leader adds risk-taking, foresight and the charisma to inspire willing followers. He treats his late friend Lalit Doshi as the case study — a celebrated IAS officer whose work on inward investment to Maharashtra showed bureaucracy at its best. The core diagnosis is that the ICS-to-IAS legacy bred an elitist, rule-bound officialdom that suited an information-scarce industrial age but is now obsolete. With liberalisation, the state must shrink from patron-licenser-enforcer to partner-facilitator. Parekh borrows the Singapore Inc. analogy — civil services working in tandem with the private sector, with the head of state issuing a chairman's-style annual report — and urges India's bureaucracy to follow CEOs in evolving from administrator to manager to leader. He calls for in-service training (Stanford, Oxford-style executive courses), lateral entry of private-sector talent, and the cultivation of specialists alongside generalists. On governance, Parekh argues that the loudest deficits sit in the public sector: PSU boards subservient to ministries, CEO appointments delayed, and accountability missing. He attacks the "peculiarly complex legal, fiscal and regulatory" environment that "regulates rather than supervises; complicates rather than clarifies" and coins the line that complexity generates "a corruption tax which accrue to others rather than the exchequer." Two structural pathologies receive special censure: the colonial-era filing system, ill-suited to public-private partnership projects that require quick judgement calls, and the practice of filling top bureaucratic slots with officers who have only months of tenure left — leaving them risk-averse, especially given the threat that pensions could be revoked years into retirement. Parekh closes by sketching the leader of tomorrow: customer-and-employee facing, willing to re-engineer government as the corporate sector has re-engineered itself, and citing IL&FS as proof that talented IAS officers, given specialist roles, deliver outsized results. The rendered chunk runs through page 18 of a 24-page pamphlet; the closing pages on what constitutes a good leader continue beyond this set. ## Key points - Frames a three-tier hierarchy — administrator, manager, leader — and argues that India's civil services must climb it, with probationers honing administrative skills to director level, joint secretaries shifting to managerial focus, and senior bureaucrats consciously cultivating leadership. - Treats the ICS/IAS legacy as a rule-bound, elitist inheritance suited to an information-scarce industrial age but obsolete in an information-rich, liberalised economy where government must become a partner and facilitator, not a patron-licenser-enforcer. - Proposes Singapore Inc. as a model: civil services working in tandem with the private sector under a unified national framework, with the head of state issuing a chairman-style annual report on the country's balance sheet. - Diagnoses public-sector governance as the real corporate-governance crisis — PSU boards subservient to ministries, CEO appointments delayed, accountability absent — and contrasts this with private-sector AGMs scrutinised by analysts and financial journalists. - Attacks India's regulatory complexity as itself a corruption-generating mechanism, coining the line that complexity is a "corruption tax which accrue to others rather than the exchequer." - Identifies two structural pathologies of governance: the century-old colonial filing system, which breaks down on judgement-call decisions needed for public-private partnership projects; and the practice of filling top bureaucratic slots with officers whose residual tenure is only months, sapping vision and risk appetite. - Notes that the threat of post-retirement pension revocation and decades-later allegations from junior officers' file notings disincentivises bureaucrats from making honest judgement calls — a candid defence of risk-averse senior officials. - Calls for specialist tracks within the civil services alongside general-management grooming, and for opening the doors consciously to private-sector lateral entry, citing IL&FS's success in deploying seconded IAS officers. --- ## [Primary work] Agriculture in Asia URL: https://indianliberals.in/primary-works/agriculture-in-asia-colin-clark-march-10-1971/ ### Summary Colin Clark's pamphlet, reproduced from the Autumn 1970 issue of Pacific Community and re-published by the Forum of Free Enterprise on 10 March 1971, argues that Asian agriculture is widely misdescribed by Western economists, international agencies, and central planners. He traces a continuum from 'cut and burn' cultivation through ox-plough subsistence to mechanised mixed farming, using De Vries's grain-equivalent classification to locate India, Pakistan, Ceylon, and Burma uncomfortably close to the subsistence line while Malaysia, Taiwan, South Korea, and Thailand are pulling ahead. He insists that 'subsistence' has a precise calorific meaning and attacks Lord Boyd-Orr's and the F.A.O.'s repeated claims that one-half to two-thirds of humanity is malnourished as statistical confusions that an Australian anthropologist and a Stanford researcher have already exposed. The second movement of the essay is a sustained critique of planning orthodoxy.… ### Body ## Summary Colin Clark's pamphlet, reproduced from the Autumn 1970 issue of Pacific Community and re-published by the Forum of Free Enterprise on 10 March 1971, argues that Asian agriculture is widely misdescribed by Western economists, international agencies, and central planners. He traces a continuum from 'cut and burn' cultivation through ox-plough subsistence to mechanised mixed farming, using De Vries's grain-equivalent classification to locate India, Pakistan, Ceylon, and Burma uncomfortably close to the subsistence line while Malaysia, Taiwan, South Korea, and Thailand are pulling ahead. He insists that 'subsistence' has a precise calorific meaning and attacks Lord Boyd-Orr's and the F.A.O.'s repeated claims that one-half to two-thirds of humanity is malnourished as statistical confusions that an Australian anthropologist and a Stanford researcher have already exposed. The second movement of the essay is a sustained critique of planning orthodoxy. Clark dismantles the idea that Asian farming suffers from 'disguised unemployment' or rural over-population — the doctrine, he notes, that Mao acted on in the Great Leap Forward 'and the resulting chaos in Chinese agriculture has not yet been fully repaired.' He revisits the Law of Diminishing Returns using Ishikawa's productivity comparisons and shows that, country by country, intensification of labour on land continues to yield more output, with Taiwan supporting up to 64 persons per hectare at subsistence. Population growth, he contends, has historically driven productivity gains in Holland, England, Japan, and now India, rather than producing the disasters predicted by 'population explosion' theorists. Clark then turns to land reform and trade. He concedes that concentrated ownership creates 'unbearable social and political tensions' but warns that legislated rent controls are easily evaded and that the world's record on land reform — from Mexico in 1910 through Eastern Europe in the 1920s to Diem's South Vietnam — is uneven; the Irish 1904, Japanese 1945, and Taiwanese 1950s reforms are the rare successes. He rejects the Marxian preconception that export agriculture is intrinsically exploitative, points out that Russia and Spain are the only modern non-communist economies to have tried autarky and suffered for it, and argues that the wealthier countries can help developing Asia most by cutting their own subsidised farm exports and granting market preferences for manufactures — measures Australia, he notes with approval, has begun to legislate. ## Key points - Asian agriculture spans a technical ladder from 'cut and burn' through ox-plough to mechanised mixed farming; most of Asia sits at the ox-plough stage that European agriculture left only in the eighteenth century. - Clark redefines 'subsistence' in calorific terms (roughly 1,600–2,000 kcal per head per day, 250 kg of grain-equivalent per year) and rejects the F.A.O.'s 2,300-calorie universal standard as statistically and biologically unfounded. - Using De Vries's grain-equivalent classification, India (382 kg/head) and Pakistan (432 kg/head) sit close to subsistence while Malaysia, Taiwan, South Korea, and Thailand show output growth markedly outpacing population. - The doctrine of 'disguised unemployment' or rural surplus labour — believed by Mao and embedded in much planning — is shown to be empirically wrong; seasonal labour shortages, not surpluses, characterise monsoonal Asia. - The Law of Diminishing Returns holds only when technique and social organisation are fixed; Ishikawa's data show productivity rising sharply with labour input in Japan, China, Korea, and especially Taiwan (10,000 man-hours per hectare, 16 tons of milled rice). - Population growth historically facilitates industrialisation and saving — demonstrated by the Dutch, English, Japanese, and now Indians — contradicting 'population explosion' alarmism. - Land reform has a mixed historical record; Clark cites Ireland 1904, Mexico 1910, Japan 1945, and Taiwan in the 1950s as outcomes ranging from successful to destructive, and warns that rent-control legislation is easily evaded. - Soviet collectivisation (1933), Maoist agriculture (1961), and autarkic policies under Stalin and Franco are presented as cautionary failures; export-oriented producers like Malaysia and Taiwan fare better than countries that retreat from trade. --- ## [Primary work] AIR TRAVEL IN INDIA — SAFETY AND SERVICE URL: https://indianliberals.in/primary-works/air-travel-in-india-safety-and-service-by-wing-commander-vijay-mahajan-alka-sen-rn-kini-june-14-1990/ ### Summary This Forum of Free Enterprise booklet, dated 14 June 1990, gathers three talks delivered at a public meeting in Bombay on 13th March 1990, in the shadow of the Indian Airlines A-320 crash at Bangalore the previous month. Wing Commander Vijay Mahajan, a former Indian Air Force officer with over 6,000 flying hours, argues that India lacks a national aviation policy, that political and bureaucratic meddling has corroded the airlines' selection, training and route-planning, and that the country's airports, navigational aids and air traffic control are unfit for the traffic that the 1990s will bring; he ends with three reform options — autonomy, deregulation or privatisation — and defends privatisation by comparing British Airways, Lufthansa, KLM, Quantas and Singapore Airlines with their state-owned Indian counterparts. Aviation journalist Alka Sen, editor of Indian Aviation - Civil and Military, locates the problem in indiscipline among employees and in government neglect of infrastructure and senior appointments, endorsing the National Transport Safety Board's tougher pilot-rating procedures and Cockpit Voice Recorder checks, calling for serious follow-through on the Ramdas Committee Report on A320 induction, and praising Civil Aviation Minister Arif Mohammed Khan for treating discipline as a 'non-negotiable issue' while faulting the government for leaving DGCA, IAAI, Indian Airlines and Vayudoot top posts unfilled and for stalling the Rs. 300 crore Bombay-Delhi airport modernisation programme. R. N. Kini, General Manager of Voltas Systems Ltd. and a survivor of the Indian Airlines A-320 crash at Bangalore on 14 February 1990, contributes a short address that distils his experience into 'Ten Commandments' for passengers — fasten seatbelts, learn the emergency-exit literature, listen to the safety briefing, leave hand baggage behind, run from the wreck without looking back, report medical history at hospital — insisting that a crash 'is not the time for decision-making on a participative basis' and recording public appreciation for the air hostesses' presence of mind and for the Bangalore hospital and Indian Airlines staff who attended the injured. The argumentative centre of the volume is a Forum-house case for retreat of the state from civil aviation, with the Tata Commission's recommendations, the booklet repeatedly notes, having been 'consigned to the dustbin' by the bureaucracy. ### Body ## Summary This Forum of Free Enterprise booklet, dated 14 June 1990, gathers three talks delivered at a public meeting in Bombay on 13th March 1990, in the shadow of the Indian Airlines A-320 crash at Bangalore the previous month. Wing Commander Vijay Mahajan, a former Indian Air Force officer with over 6,000 flying hours, argues that India lacks a national aviation policy, that political and bureaucratic meddling has corroded the airlines' selection, training and route-planning, and that the country's airports, navigational aids and air traffic control are unfit for the traffic that the 1990s will bring. Aviation journalist Alka Sen, editor of Indian Aviation - Civil and Military, locates the problem in indiscipline among employees and in government neglect of infrastructure and senior appointments. R. N. Kini, a survivor of the Bangalore A-320 crash, distils his experience into ten commandments for passengers. The argumentative centre of the volume is a Forum-house case for retreat of the state from civil aviation: Mahajan ends with three options — making the corporations autonomous, deregulating, or privatising — and defends privatisation by comparing British Airways, Lufthansa, KLM, Quantas and Singapore Airlines with their state-owned Indian counterparts. The Tata Commission's recommendations, the booklet repeatedly notes, have been "consigned to the dustbin" by the bureaucracy. ## Essays ### AIR TRAVEL IN INDIA — SAFETY AND SERVICE *By Wing Commander VIJAY MAHAJAN* Wing Commander Vijay Mahajan opens with four indictments of Indian civil aviation: no national aviation policy, failure to attract the best young talent into the field, three national airlines whose internal policies do not complement each other, and pervasive political and bureaucratic interference in day-to-day operations. He contrasts U.S. "aviation management science" training — selection boards, months as cockpit observers, flight-engineer apprenticeships — with Indian boys returning from American flying clubs with a Commercial Pilot's Licence and 200 hours of flying who are seated straight away as co-pilots. He notes that the heads of Indian Airlines, Vayudoot and Air-India are all non-aviation men, more preoccupied with logos, liveries and hostesses' saris than with the safety of those whose lives depend on the men at the controls. The second half catalogues infrastructural decay: none of India's four international airports meets ICAO standards; air-traffic control at Bombay is manned at two-thirds of its 1980 sanction with ninety per cent of controllers "unrated"; VOR, DME, VHF/HFR/T and NDB equipment is erratic or broken; runway lights fail without standby generators; the DGCA, IAAI and NAAI work at cross-purposes; and the Tata Commission's recommendations sit ignored. Mahajan closes with three options — autonomy, deregulation, or privatisation — and argues that privatisation is the best, citing British Airways, Aeroflot, Quantas, Lufthansa, KLM and Singapore Airlines as evidence that privately owned carriers have better safety records and that 90 per cent of India's current airline management would not survive accountability to private owners. - India has no national aviation policy; selection and training of pilots, personnel and equipment is bureaucratic and quota-driven. - Chairmen and managing directors of Indian Airlines, Vayudoot and Air-India are non-aviation men focused on image rather than flight safety. - None of India's four international airports meets full ICAO standards; ATC at Bombay is manned far below sanction and most controllers are unrated. - Three overlapping agencies (DGCA, IAAI, NAAI) do not coordinate; merging IAAI and NAAI would relieve NAAI's fund shortage by ending IAAI's tax outflow. - Tata Commission recommendations have been consigned to the dustbin by the bureaucracy. - Privatisation is the best of three reform options (autonomy, deregulation, privatisation) because privately owned carriers worldwide show lower accident rates. ### [Section II — untitled, by ALKA SEN] *By ALKA SEN* Alka Sen, editor of Indian Aviation - Civil and Military, frames the safety problem at Indian Airlines, Vayudoot, Pawan Hans and Air-India less as a training failure than as a discipline failure. She endorses the National Transport Safety Board's recent measures — random Cockpit Voice Recorder checks, stricter procedures for pilot-in-command rating, prohibiting pilots from flying more than one type of aircraft — and calls for serious follow-through on the Ramdas Committee Report, which had found Indian Airlines unprepared to induct so many Airbus A320s in so short a time. She defends Indian pilots from foreign condescension, citing Capt. Xavier Baral of the French Pilots' Union and Capt. V. K. Mehta on the Ahmedabad 737 crash. The essay then widens to industrial action: continual employee agitations over A320 training and engineer training abroad. She praises Civil Aviation Minister Arif Mohammed Khan for making discipline "a non-negotiable issue" and faults the government for letting key posts (DGCA, IAAI chairman, Indian Airlines MD after Prasad's resignation, Vayudoot MD after Harsh Vardhan's exit following the Pune Dornier 228 crash) lie unfilled. She closes by faulting the government for stalling on a Rs. 300 crore Bombay-Delhi airport modernisation programme and on infrastructure for the smaller airports beyond. - Indian Airlines' safety problems are mainly indiscipline, not inadequate training syllabus. - Cockpit Voice Recorder random checks, tougher pilot rating procedures and the Ramdas Committee findings on A320 induction must be acted on. - Indian pilots are as competent as their foreign counterparts; foreign condescension (Baral's "Mercedes Benz to a camel driver") is misplaced. - Continual employee agitations — over which pilots train on the A320, over engineers' training abroad — disrupted maintenance. - Civil Aviation Minister Arif Mohammed Khan's hard line on discipline is welcome; government delay in filling DGCA, IAAI, Indian Airlines and Vayudoot top posts is not. - Approved Rs. 300 crore modernisation of Bombay and Delhi airports has yet to be cleared, and the rest of the airport network is being ignored. ### [Section III — TEN COMMANDMENTS, by R. N. KINI] *By R. N. KINI* R. N. Kini, General Manager of Voltas Systems Ltd. and a survivor of the Indian Airlines A-320 crash at Bangalore on 14th February 1990, offers a short address that opens with thanks to God for his lease of life and sorrow for his fellow passengers who did not survive. He then sets out "Ten Commandments" for passengers drawing on what he saw: fasten seatbelts always; read the emergency exit literature; listen to air-hostess safety briefings; do not retrieve hand baggage from the overhead rack in danger; keep running once off the aircraft and do not look back; report previous medical history and blood group at hospital; be alert at take-off and landing; and recognise that "this is not the time for decision-making on a participative basis." He closes by recording public appreciation for the air hostesses who opened the door as soon as the plane crashed and for the Bangalore hospital and Indian Airlines staff who attended the injured. - Author is a survivor of the Indian Airlines A-320 crash at Bangalore on 14 February 1990. - Ten commandments for passenger conduct: seatbelts, emergency-door literacy, listen to safety briefings, leave bags behind, run from the wreck without looking back, observe no-smoking, share medical history at hospital. - A crash is not a moment for participative decision-making — passengers must act on training and instructions, not deliberate. - Public acknowledgement for the air hostesses' presence of mind and for the Bangalore hospital and Indian Airlines staff. --- ## [Primary work] Rural Development is Key to Welfare of the Masses URL: https://indianliberals.in/primary-works/an-analysis-of-the-bonus-problem-m-c-munshi-september-14-1977/ ### Summary Note: the file is labelled "An Analysis of the Bonus Problem — M. C. Munshi (September 14, 1977)" in the pipeline, but the rendered booklet is in fact "Rural Development is Key to Welfare of the Masses" by J. H. Doshi, President of the Forum of Free Enterprise, based on his presidential address at the Forum's 21st Annual General Meeting in Bombay on 17 October 1977. Doshi opens with a stock-taking of three decades of independence and twenty-six years of planning: real progress, he concedes, but small compared to the country's potential — a record of lost opportunities driven by policymakers who ignored India's most favourable assets, especially entrepreneurial talent and the Indian diaspora. He marshals an extended quotation from agriculture minister Bhanu Pratap Singh to show that, despite headline buffer stocks and foreign-exchange reserves, per capita consumption of foodgrains, pulses, edible oils, sugar and cloth has fallen; that growth in major crops has stalled since 1960-61; and that industrial growth slipped from 7.9% (1950–65) to 3.3% (1965–75).… ### Body ## Summary Note: the file is labelled "An Analysis of the Bonus Problem — M. C. Munshi (September 14, 1977)" in the pipeline, but the rendered booklet is in fact "Rural Development is Key to Welfare of the Masses" by J. H. Doshi, President of the Forum of Free Enterprise, based on his presidential address at the Forum's 21st Annual General Meeting in Bombay on 17 October 1977. Doshi opens with a stock-taking of three decades of independence and twenty-six years of planning: real progress, he concedes, but small compared to the country's potential — a record of lost opportunities driven by policymakers who ignored India's most favourable assets, especially entrepreneurial talent and the Indian diaspora. He marshals an extended quotation from agriculture minister Bhanu Pratap Singh to show that, despite headline buffer stocks and foreign-exchange reserves, per capita consumption of foodgrains, pulses, edible oils, sugar and cloth has fallen; that growth in major crops has stalled since 1960-61; and that industrial growth slipped from 7.9% (1950–65) to 3.3% (1965–75). Taiwan, South Korea and Singapore are held up as the contrasting model. Doshi then offers a four-part post-mortem of "what has gone wrong": (1) deficit financing from the Second Plan onwards, driven by a confusion of expenditure with investment; (2) misdirection of planned outlays towards heavy industry and urban areas while neglecting agriculture, dairy and craftsmanship — pushing millions "from poverty to pauperism"; (3) over-centralisation that diverts a third of national income through Central and State governments and traps it in loss-making state-owned industries (he cites West Germany, Sweden and Singapore for the proposition that the modern state's role is regulation, not ownership, and singles out the State Trading Corporation and the MRTP Act); and (4) a "plethora of controls" — including state excise versus sales tax, octroi, and licensing — that breed corruption, black money, and wasted entrepreneurial energy. The constructive programme is rural development understood broadly: roads to distant villages, irrigation, warehousing, fertilisers and pesticides, agricultural R&D, reforestation, drinking water, primary education, postal facilities and rural health. Doshi welcomes the new "rolling plan" and the Janata government's pragmatic, anti-control turn (citing Morarji Desai), and closes on the theme that economic democracy — citizen participation as consumers and producers — is what makes political democracy substantive. The pamphlet is bookended by quotations from Eugene Black (private enterprise as "an affirmative good") and Forum founder A. D. Shroff ("Free Enterprise was born with man and shall survive as long as man survives"). ## Key points - Frames the 30-year record post-1947 as one of "lost opportunities" — real progress dwarfed by what better policy could have delivered. - Argues that headline indicators (buffer stocks, forex reserves, doubled agricultural output since 1950-51) mask falling per capita consumption of foodgrains, pulses, edible oils, sugar and cloth. - Documents the slowdown of industrial growth from 7.9% (1950–65) to 3.3% (1965–75), and holds up Taiwan, South Korea and Singapore as countries that pulled the common man up despite tighter constraints. - Offers a four-factor post-mortem: deficit financing from the Second Plan, misdirection of outlays to heavy industry over agriculture, over-centralisation of decision-making, and a stifling network of controls. - Distinguishes ownership from regulation — invokes West Germany, Sweden and Singapore to argue the modern state should regulate, not own, productive enterprise; criticises the State Trading Corporation and the MRTP Act by name. - Identifies state sales tax versus excise, octroi, and licensing controls as anachronisms that produce delay, corruption and black money. - Proposes rural development as the constructive agenda: roads, irrigation, warehousing, fertilisers, agricultural R&D, reforestation, drinking water, primary education, postal services and rural health. - Welcomes the Janata government's "rolling plan" and anti-control turn and frames economic democracy — daily citizen participation as consumers and producers — as the foundation of political democracy. --- ## [Primary work] An Analysis of the Bonus Problem URL: https://indianliberals.in/primary-works/an-analysis-of-the-bonus-problemm-c-munshi-september-14-1977/ ### Summary This Forum of Free Enterprise booklet, written by Dr. M. C. Munshi a few days before the Janata government's September 1977 decision on bonus, traces the legal and administrative history of bonus payments in India and indicts the policy edifice that has grown around them. What began as an ex-gratia festival payment around the First World War drifted by stages into a compulsory statutory entitlement: through wartime industrial bargains, the Bombay High Court's 1944 General Motors decision, the 1950 Labour Appellate Tribunal's "available surplus" formula, Supreme Court obiter dicta in the 1955 Kanpur mills case, the 1962 Meher Commission, and the Payment of Bonus Act, 1965 with its 4% minimum and 20% maximum. Munshi argues that each successive concession — raising the floor to 8.33%, jettisoning the ceiling under Section 34(3) collective bargaining, repeated tax-rebate amendments — has further unmoored bonus from any coherent economic rationale. The 1972 Bonus Review Committee under Dr. B. K.… ### Body ## Summary This Forum of Free Enterprise booklet, written by Dr. M. C. Munshi a few days before the Janata government's September 1977 decision on bonus, traces the legal and administrative history of bonus payments in India and indicts the policy edifice that has grown around them. What began as an ex-gratia festival payment around the First World War drifted by stages into a compulsory statutory entitlement: through wartime industrial bargains, the Bombay High Court's 1944 General Motors decision, the 1950 Labour Appellate Tribunal's "available surplus" formula, Supreme Court obiter dicta in the 1955 Kanpur mills case, the 1962 Meher Commission, and the Payment of Bonus Act, 1965 with its 4% minimum and 20% maximum. Munshi argues that each successive concession — raising the floor to 8.33%, jettisoning the ceiling under Section 34(3) collective bargaining, repeated tax-rebate amendments — has further unmoored bonus from any coherent economic rationale. The 1972 Bonus Review Committee under Dr. B. K. Madan ended in divided counsel and its report was never officially published; the Emergency produced a 1975 Ordinance re-pegging bonus to profits and a 1976 Amending Act allowing production-linked payments, but no universal principle was laid down. He treats the "deferred wage" thesis — popularised by labour leaders and conceded in the Janata Party's election manifesto — as a slogan with no scientific basis, marshalling the Supreme Court, the National Commission on Labour, and the ILO's 1948 Payment of Wages convention to argue that bonus is surplus-based, not cost-based, and that the Marxian Labour Theory of Value which underwrites alternative claims was "exploded nearly a century ago" in economic doctrine. The polemical centre of the booklet is the consumer's missing seat at the bargaining table. Munshi contends that available surpluses in an era of inflation and protected markets are not "adventitious gains" from the risks of enterprise but extractions from higher prices paid by consumers, who are unorganised and routinely forgotten while employers and unions divide the spoils. He warns that the organised sector covered by bonus is only about 1½ to 2 per cent of the labour force and that compulsory bonus has therefore created a "privileged class" inside a country where 40 per cent live below subsistence and another 30 per cent just above. The booklet closes with prescriptions: government should declare bonus a form of profit-sharing, lighten the consumer's burden, work out coherent wages and prices policies, and consider an industry-by-industry Wage-Incentive Scheme — while cautioning that profit-sharing schemes elsewhere in the world have not been uniformly successful. ## Key points - Traces bonus from a WWI ex-gratia festival payment to a compulsory statutory entitlement under the 1965 Payment of Bonus Act, via M. C. Chagla's 1944 General Motors ruling, the 1950 Labour Appellate Tribunal "available surplus" formula, and the 1962 Bonus (Meher) Commission. - Documents how successive concessions — raising the floor from 4% to 8.33% (and ad hoc 8¼% and 4%+4% "advance" formulas), suspending the 20% ceiling under Section 34(3) collective bargaining, and the 1969 Section 5 tax-rebate amendment — progressively detached bonus from the surplus formula. - Recounts the 1972 Bonus Review Committee under Dr. B. K. Madan: divided counsel, never officially published, with one member (Mahesh Desai) breaking with the majority to demand uncapped bargained bonus. - Argues that despite being primarily an economic issue, no economist was consulted in the formative judicial decisions, and that the "deferred wage" theory has been rejected by the Supreme Court (Greaves Cotton, 1954) and the National Commission on Labour as surplus-based not cost-based. - Charges that compulsory bonus has manufactured a "privileged class" of workers — 1½ to 2 per cent of the labour force, organised — who impose costs on the unorganised 98 per cent as consumers, in a country where 40 per cent live below subsistence and 30 per cent just above. - Insists that the consumer is "conspicuous by its absence at the bargaining table": in an era of inflation and controlled markets, the available surplus is extracted from higher prices, so part of it should flow back to consumers as lower prices. - Dismisses the Marxian Labour Theory of Value underwriting labour-union claims to the whole surplus as long discredited, citing S. R. Mohan Das's June 1977 Economic Times column on "deferred wages" as a "parrot cry". - Recommends: declare bonus a form of profit-sharing; lighten the consumer's burden; develop wages and prices policies; introduce industry-specific Wage-Incentive Schemes — while noting that profit-sharing schemes worldwide have not been uniformly successful. --- ## [Primary work] An Analysis of Union Budget 1965-66 URL: https://indianliberals.in/primary-works/an-analysis-of-union-budget1965-a-d-shroff-apr10-1965/ ### Summary A. D. Shroff, President of the Forum of Free Enterprise, delivers a clause-by-clause critique of the Union Budget 1965-66 (originally a talk of 9 March 1965). He opens by praising Finance Minister T. T. Krishnamachari for being unusually transparent — for the first time the budget papers, especially the Economic Survey, allow the tax-payer to see the country's true position — and for the welcome simplification of the tax structure (the folding of surcharges into a unified income-tax). But his approval ends there. The compilers, he argues, habitually underestimate revenue and overestimate expenditure; the upshot is an unnecessary additional tax burden on a country whose statistical machinery is itself decades behind the times. The core of the pamphlet is a sustained attack on the rising burden of indirect taxes — customs and especially excise — which have climbed from Rs. 157 crores in 1950-51 to Rs. 827 crores by 1965, falling hardest on items of daily necessity like kerosene, matches and sugar consumed by 62 percent of villagers.… ### Body ## Summary A. D. Shroff, President of the Forum of Free Enterprise, delivers a clause-by-clause critique of the Union Budget 1965-66 (originally a talk of 9 March 1965). He opens by praising Finance Minister T. T. Krishnamachari for being unusually transparent — for the first time the budget papers, especially the Economic Survey, allow the tax-payer to see the country's true position — and for the welcome simplification of the tax structure (the folding of surcharges into a unified income-tax). But his approval ends there. The compilers, he argues, habitually underestimate revenue and overestimate expenditure; the upshot is an unnecessary additional tax burden on a country whose statistical machinery is itself decades behind the times. The core of the pamphlet is a sustained attack on the rising burden of indirect taxes — customs and especially excise — which have climbed from Rs. 157 crores in 1950-51 to Rs. 827 crores by 1965, falling hardest on items of daily necessity like kerosene, matches and sugar consumed by 62 percent of villagers. Shroff calls for the abolition of the Annuity Deposit Scheme, the Estate Duty and the Dividend Tax, which between them destroy the investor's incentive and starve the capital market; he urges India to learn the "Kennedy philosophy of taxation" that lower rates yield higher revenue and shrink the black-money economy. On public expenditure he is scathing: a total investment of Rs. 1,500 crores in public undertakings yields the Government a "magnificent" return of Rs. 2 crores 85 lakhs. He invokes the post-First-World-War Inchcape Committee as a model for a powerful expenditure-scrutiny body, arguing that at least Rs. 150–200 crores a year could be saved on an outlay of over Rs. 2,000 crores. On the foreign-exchange front he commends the Finance Minister's frank admission that the position has deteriorated every year through the Plan periods, but warns that the new 10 percent regulatory import duty will inflate costs, defeat export promotion and worsen idle industrial capacity. Throughout, the underlying plea is that economic policy be "informed by basic and inexorable laws of economics" rather than ideology — the standing Forum of Free Enterprise refrain. ## Key points - Welcomes the Finance Minister's Economic Survey and the simplification of the income-tax structure (merging surcharges into a unified rate) as the first genuinely informative Budget in years. - Charges that compilers systematically underestimate revenue and overestimate expenditure, imposing an unnecessary additional tax burden — non-Plan expenditure that was to fall by Rs. 70 crores has instead risen by Rs. 117 crores. - Attacks the runaway growth of indirect taxes: Excise Duty climbed from Rs. 157 crores in 1950-51 to Rs. 827 crores in 1965-66, with regressive incidence on kerosene (45% of the price), matches (62%) and sugar. - Calls for abolition of the Annuity Deposit Scheme (a Rs. 65-crore drain on investors), the Estate Duty (destroys the saver's natural desire to provide for his family) and the Dividend Tax on the corporate sector. - Endorses the Kennedy lesson that lower tax rates expand the economy and shrink black money; punitive Indian rates leave "no incentive to earn as much as he likes". - Indicts the public sector: Rs. 1,500 crores invested in Government undertakings returned only Rs. 2 crores 85 lakhs in 1965-66 — a "magnificent" yield that hides cross-subsidy by the tax-payer. - Proposes a powerful expenditure-scrutiny committee modelled on the post-WWI Inchcape Committee, arguing Rs. 150–200 crores could be saved annually on an outlay of over Rs. 2,000 crores. - Warns that the new 10% regulatory import duty will inflate costs, leave industrial capacity idle, and defeat export promotion; foreign-exchange situation has worsened with every Plan. --- ## [Primary work] An Economic Review — 1957 URL: https://indianliberals.in/primary-works/an-economic-review1957-a-d-shroff-dec9-1957/ ### Summary Delivered under the auspices of the Forum of Free Enterprise in Bombay on December 9, 1957, A. D. Shroff's address is a frontal critique of the Second Five-Year Plan and of the Nehru government's economic management one year into its execution. Opening with the line that "speech is silvern and silence is golden," Shroff argues that the moment demands public honesty: the Plan was built on the "socialist pattern of society," pursued comprehensive planning without the technical and informational base to support it, and is now manifestly unworkable. He charges the Planning Commission and its supporters with substituting slogans — most pointedly the newly minted phrase "core of the Plan" — for an actual operating strategy, and he criticises ministers for honouring Gandhi's memory by "practising considerable economy of truth." Shroff then turns to the foreign-exchange collapse, noting that India's balances fell from Rs. 536 crores at the end of November 1956 to roughly Rs. 214 crores a year later (net of an IMF loan of Rs. 95 crores), and that ad-hoc, secretive licence allocations have squandered scarce reserves.… ### Body ## Summary Delivered under the auspices of the Forum of Free Enterprise in Bombay on December 9, 1957, A. D. Shroff's address is a frontal critique of the Second Five-Year Plan and of the Nehru government's economic management one year into its execution. Opening with the line that "speech is silvern and silence is golden," Shroff argues that the moment demands public honesty: the Plan was built on the "socialist pattern of society," pursued comprehensive planning without the technical and informational base to support it, and is now manifestly unworkable. He charges the Planning Commission and its supporters with substituting slogans — most pointedly the newly minted phrase "core of the Plan" — for an actual operating strategy, and he criticises ministers for honouring Gandhi's memory by "practising considerable economy of truth." Shroff then turns to the foreign-exchange collapse, noting that India's balances fell from Rs. 536 crores at the end of November 1956 to roughly Rs. 214 crores a year later (net of an IMF loan of Rs. 95 crores), and that ad-hoc, secretive licence allocations have squandered scarce reserves. He calls for a drastic curtailment of future imports, a serious effort to attract foreign capital and tourism, and the abandonment of "humiliating conditions like reporting to the police on arrival." On taxation, he attacks the Wealth Tax and Expenditure Tax — what he calls Prof. Kaldor's "test-tube babies" — as a Pandora's Box that has frightened domestic investors, killed the new-issue market, idled the textile industry, and produced an overall climate in which "first-class investments on a yield basis of anything between 6 and 12 per cent are going a-begging." The second half of the talk indicts the bureaucratic and public-sector apparatus of the planned economy. Citing a Hindustan Times report of November 29, 1957, Shroff recounts the Prime Minister's own admission that under the present law on co-operatives he could not get a project through; he relays an American industrialist's account of contacting more than twenty authorities to start an industrial project; and he highlights Mr. Gulzarilal Nanda's restriction of the Plan to Rs. 4,800 crores as a belated concession to realism. He documents how the State Bank's dominance, the routing of P.L.480 counterpart funds away from the private sector, and the State Trading Corporation's profiteering on cement imports have all squeezed private enterprise out of working and long-term capital. Shroff closes with a constitutional warning rather than a fiscal one. The "limitless powers vested in the bureaucracy" are producing, he says, a "growing army of 'chota Hitlers'" that threatens democracy itself; the remedy is candour. "A true democracy always functions best when it is told the worst," he insists, and his "earnest appeal and strongest advice to the authorities is, 'consult your purse, and not your pride.'" The pamphlet ends with the slogan that became his signature: "Free Enterprise was born with man and shall survive as long as man survives." ## Key points - Shroff frames public criticism of the Second Five-Year Plan as a moral duty, accusing the government of an 'economy of truth' inconsistent with Gandhi's legacy. - He argues the Plan rests on a socialist-pattern philosophy and on amateurish, unrelated assumptions, and that its commitments have already proved unworkable — the newly coined phrase 'core of the Plan' is a face-saving fiction. - Foreign exchange reserves collapsed from Rs. 536 crores (Nov 1956) to roughly Rs. 214 crores (Nov 1957) net of a Rs. 95 crore IMF loan; licence-issuing machinery was indiscriminate and lacked basic arithmetic. - Solutions he proposes: drastic curtailment of imports, a serious climate for foreign private capital, and a tourism push (Rs. 15–20 crores investment could yield Rs. 50 crores of exchange annually). - The Wealth Tax and Expenditure Tax — Kaldor's 'test-tube babies' — have destroyed incentives, killed the new-issue market, idled textile mills, and made first-class equities yielding 6–12 per cent unsaleable. - Internal resources are starved as much as foreign ones: the State Bank's predominant position distorts banking data, P.L.480 counterpart funds are denied to the private sector, and the State Trading Corporation has profiteered on cement imports. - Citing a Hindustan Times report and an American industrialist's testimony, Shroff dramatises bureaucratic obstruction — even the Prime Minister could not push a co-operative through the Registrar's office in Punjab. - His closing warning is constitutional: a 'growing army of chota Hitlers' in the bureaucracy menaces democracy, and recovery requires that the government 'consult its purse, not its pride.' --- ## [Primary work] An Evaluation of Common Minimum Programme URL: https://indianliberals.in/primary-works/an-evaluation-of-common-minimum-programme-by-ss-bhandare-and-jk-mukhopadhyay-july-15-1996/ ### Summary This 16-page Forum of Free Enterprise booklet, jointly written by Tata Services economists S.S. Bhandare and J.K. Mukhopadhyay within days of the United Front (UF) Government's installation in 1996, offers a sceptical but not hostile reading of the 13-party coalition's Common Minimum Programme. The authors concede that the CMP is a creditable consensus statement of intent — covering federalism, decentralisation, fiscal consolidation, PSU restructuring, financial-sector reform, agriculture, and a 'human face' for adjustment — and they note that it broadly tracks the famous 10-point medium-term objectives of Dr. Manmohan Singh's interim 1996-97 budget.… ### Body ## Summary This 16-page Forum of Free Enterprise booklet, jointly written by Tata Services economists S.S. Bhandare and J.K. Mukhopadhyay within days of the United Front (UF) Government's installation in 1996, offers a sceptical but not hostile reading of the 13-party coalition's Common Minimum Programme. The authors concede that the CMP is a creditable consensus statement of intent — covering federalism, decentralisation, fiscal consolidation, PSU restructuring, financial-sector reform, agriculture, and a 'human face' for adjustment — and they note that it broadly tracks the famous 10-point medium-term objectives of Dr. Manmohan Singh's interim 1996-97 budget. But they argue that, as a coalition compromise, the CMP is 'neither a blue-print' nor a credible action programme: it dodges the politically costly items (exit policy, Companies Act amendment, opening coal and oil to private capital) and leaves the institutional mechanism for delivery unspecified. The analytic core of the booklet is what Bhandare and Mukhopadhyay call the 'financial iron triangle' — an inadequate domestic savings ratio (around 24% of GDP, against the 30-35% of East Asian peers), an unsustainable fiscal deficit the CMP wants to bring from roughly 6% down to 4% of GDP, and the RBI's prudent 1.5%-of-GDP cap on the current account deficit. Inside that triangle, the authors argue, the CMP's simultaneous goals of 7% GDP growth, 12% industrial growth and significantly higher social-sector spending (an extra Rs. 12,000-15,000 crore) are 'not internally consistent', and trade-offs between growth, inflation and social justice are bound to bite. They flag a missing 'resource position' chapter, the crowding-out from a high revenue deficit, ambivalence about whether fiscal discipline will spare 'development or investment', and the populist drift in CMP-style federalisation as States pursue prohibition, cheap-rice and free-power schemes that mount fresh claims on the Centre. The political reading is equally hard-edged. The authors warn that some UF constituents — notably the CPI(M) on insurance — may walk back even the diluted commitments, that trade-union militancy could be reawakened, and that Mr. Narasimha Rao's epigram 'unity at Centre and struggle in the States' captures the coalition's tight-rope walk. The CMP, they conclude, is 'Common Maximum Pussy-footing' — a deceleration of reform rather than a reversal — and 'there is still some enchanting music of socialism even in the midst of the market oriented reform.' Yet they end on a constructive note: reforms have now acquired wider acceptability across the Indian polity, Finance Minister P. Chidambaram's early expenditure-management and PSU-dividend guidelines are commended, and the booklet closes with an exhortation that the CMP demands a matching 'Common Maximum Effort' from all stakeholders. An Appendix reproduces a detailed digest of the CMP's policy proposals across federalism, agriculture, industry, fiscal issues, and social-sector goals. ## Key points - Treats the United Front's 25-page Common Minimum Programme as a creditable but compromised consensus statement of intent rather than a deliverable blueprint, while noting the CMP is 'not a White Paper' on the state of the economy. - Argues that the CMP largely re-states the 10-point medium-term objectives of Dr. Manmohan Singh's interim 1996-97 budget, signalling continuity of reforms but at a decelerated pace ('Common Maximum Pussy-footing'). - Identifies a 'financial iron triangle' — inadequate domestic savings (~24% of GDP), high fiscal/revenue deficits driving crowding-out, and the RBI's 1.5%-of-GDP current-account cap — as the binding constraint that the CMP fails to address. - Flags the internal inconsistency of pursuing 7% GDP growth, 12% industrial growth, a 4% fiscal-deficit-to-GDP target, and an additional Rs. 12,000-15,000 crore of social-sector spending simultaneously. - Catalogues areas the CMP 'deliberately overlooked or ignored' — exit policy, reconstruction of the National Renewal Fund, amendment of the Companies Act, and opening of coal, minerals and oil to private investment. - Warns that the federalisation drive — review of Sarkaria Commission recommendations, more autonomy to States — risks aggravating fiscal imbalance as States pursue populist schemes such as Andhra Pradesh's prohibition and cheap-rice programmes. - Notes coalition fragility: the CPI(M)'s stated opposition to opening insurance, the prospect of trade-union militancy, and Narasimha Rao's barb about 'unity at Centre and struggle in the states'. - Commends Finance Minister P. Chidambaram's early guidelines on expenditure management and minimum PSU dividend payouts (20% of equity or 20% of post-tax profits, 30% for oil/petrochemical/infrastructure PSUs) as a 'business-like' early signal. - Concludes with cautious optimism that reforms have gained acceptability across the Indian polity and that the CMP demands an answering 'Common Maximum Effort' rather than coalition spoils-sharing. --- ## [Primary work] An Inflationary Budget URL: https://indianliberals.in/primary-works/an-infationary-budget-a-d-shroff-jun7-1959/ ### Summary Delivered as a speech on 11 March 1959 under the joint auspices of the Democratic Group and the Progressive Group in Bombay, and published by the Forum of Free Enterprise, A. D. Shroff's address dissects the Union Budget for 1959-60 presented by Finance Minister Morarji Desai. Shroff opens by chiding the Lok Sabha for the casual treatment given to a document that shapes the livelihood of millions, then walks his audience through the budget's revenue and expenditure sides before issuing his central warning: the budget is fundamentally inflationary, and the inflationary trajectory of the Second Five-Year Plan has now reached a point where 'runaway inflation' is a live risk. On revenue, Shroff highlights how excise duties have leapt from Rs. 156 crores in 1956-57 to Rs. 325 crores in 1959-60, becoming the single largest individual head, while the gap between estimates and Plan demand is closed by deficit financing that compels the Reserve Bank to print fresh notes at the Nasik Security Printing Press. Defence expenditure, although reduced to Rs. 243 crores, still exceeds the Rs. 200-crore ceiling he urges for a country that professes Gandhian non-violence.… ### Body ## Summary Delivered as a speech on 11 March 1959 under the joint auspices of the Democratic Group and the Progressive Group in Bombay, and published by the Forum of Free Enterprise, A. D. Shroff's address dissects the Union Budget for 1959-60 presented by Finance Minister Morarji Desai. Shroff opens by chiding the Lok Sabha for the casual treatment given to a document that shapes the livelihood of millions, then walks his audience through the budget's revenue and expenditure sides before issuing his central warning: the budget is fundamentally inflationary, and the inflationary trajectory of the Second Five-Year Plan has now reached a point where 'runaway inflation' is a live risk. On revenue, Shroff highlights how excise duties have leapt from Rs. 156 crores in 1956-57 to Rs. 325 crores in 1959-60, becoming the single largest individual head, while the gap between estimates and Plan demand is closed by deficit financing that compels the Reserve Bank to print fresh notes at the Nasik Security Printing Press. Defence expenditure, although reduced to Rs. 243 crores, still exceeds the Rs. 200-crore ceiling he urges for a country that professes Gandhian non-violence. The Plan has come to dominate the entire budget: during the first three years of the Second Plan only about 36% of expenditure was met from domestic borrowings while 63% came from foreign borrowings and deficit financing. Sterling balances are essentially exhausted, the price level has risen by some 15%, and the Government's earlier assumption that Rs. 1,200 crores of deficit financing would not be inflationary has been falsified by events. The bulk of the address scrutinises taxation. Shroff judges the much-advertised 'simplification' of corporate tax — abolition of the excess-dividend tax and a re-grossing of dividends in shareholders' hands — to be in practice a form of double taxation that raises the effective burden on joint-stock companies to roughly 51.5%, while Section 23-A, restored as the 'most obnoxious' provision in the Income-Tax Act, will throttle small and medium enterprises. The new wealth tax (introduced earlier by T. T. Krishnamachari), the expenditure tax, the gift tax and the capital-gains tax are dismissed as variously unworkable, perverse or counter-productive; estate duty has produced only Rs. 1.20 crores because, in one of his most memorable lines, 'rich people are not obliging the Government by dying too soon.' Throughout, Shroff frames the budget as further evidence of a deliberate diversion of resources from the private to the public sector — a drift, he insists, that contradicts the Congress Party's own Nagpur resolution affirming that national income rises with rapidity only when private-sector-led capital formation is sustained. He concedes one welcome reform: Morarji R. Desai's formal abolition of the compulsory deposit scheme that the Forum had earlier denounced. The pamphlet closes with the signature Shroff epigram — 'Free Enterprise was born with man and shall survive as long as man survives.' ## Key points - Speech delivered 11 March 1959 in Bombay under joint auspices of the Democratic Group and Progressive Group; issued as a Forum of Free Enterprise pamphlet analysing the Union Budget for 1959-60. - Excise duties have risen from Rs. 156 crores in 1956-57 to Rs. 325 crores in 1959-60, becoming the single largest individual head of revenue; corporation tax expected to yield Rs. 58.75 crores against Rs. 56 crores. - About 63% of Plan financing in the first three years of the Second Plan came from foreign borrowings and deficit financing, against only ~36% in the First Plan — sterling balances are nearly exhausted. - Cost of living has risen by roughly 15%; with imports falling under exchange restrictions the cushioning effect on prices is gone and inflationary pressure is set to intensify. - Defence outlay at Rs. 243 crores still exceeds Shroff's recommended Rs. 200-crore ceiling for a country committed to Gandhian non-violence. - Corporate-tax 'simplification' raises the effective burden on joint-stock companies to roughly 51.5% by re-grossing dividends and reintroducing what amounts to double taxation; Section 23-A is revived as the most obnoxious provision in the Income-Tax Act. - Wealth tax (introduced earlier by T. T. Krishnamachari), capital-gains tax, expenditure tax, gift tax and revived Section 23-A together suppress private capital formation; estate duty yields only Rs. 1.20 crores against earlier projections of Rs. 12-15 crores. - The budget's pattern continues a deliberate diversion of resources from the private to the public sector, contradicting the Congress Party's own Nagpur resolution on private-led capital formation. - One welcome reform: Morarji R. Desai's formal abolition of the compulsory deposit scheme, previously denounced by the Forum. --- ## [Primary work] An Integrated Approach to Pricing & Marketing of Agricultural Produce URL: https://indianliberals.in/primary-works/an-integrated-approach-to-pricing-and-marketing-of-the-agricultural-produce-bhanu-pratap-mehta-november-14-1981/ ### Summary Bhanu Pratap Singh, a former Union Minister of State for Agriculture and Irrigation, argues that India's foodgrain pricing and marketing regime — built in the 1960s scarcity years to shield urban consumers — has become structurally hostile to the producer in a country that is now sitting on a marginal surplus. Drawing on the National Demonstration Plots and the Punjab experience, he contends that India has the land, water, sunshine, technology and seed to be the world's largest farm exporter, and that the gap between potential and performance is the product of a feudal-colonial mental inheritance under which agriculturists are the only producers who have no say in the price of their own produce. The booklet then dissects the machinery of price suppression: heavy buffer stocks built on subsidised imports, transport and wagon shortages that trap grain in deficit pockets, export bans, and an Agricultural Prices Commission whose cost-of-production methodology ignores risk, assumes sub-optimal input use, and is selectively followed only when its recommendations suit the consumer.… ### Body ## Summary Bhanu Pratap Singh, a former Union Minister of State for Agriculture and Irrigation, argues that India's foodgrain pricing and marketing regime — built in the 1960s scarcity years to shield urban consumers — has become structurally hostile to the producer in a country that is now sitting on a marginal surplus. Drawing on the National Demonstration Plots and the Punjab experience, he contends that India has the land, water, sunshine, technology and seed to be the world's largest farm exporter, and that the gap between potential and performance is the product of a feudal-colonial mental inheritance under which agriculturists are the only producers who have no say in the price of their own produce. The booklet then dissects the machinery of price suppression: heavy buffer stocks built on subsidised imports, transport and wagon shortages that trap grain in deficit pockets, export bans, and an Agricultural Prices Commission whose cost-of-production methodology ignores risk, assumes sub-optimal input use, and is selectively followed only when its recommendations suit the consumer. He documents the widening divergence between farm and non-farm wholesale price indices, the hidden losses and concessional credit lavished on the Food Corporation of India, the captive dumping of deteriorated stocks on roller flour mills, and the near-total neglect of coarse foodgrains consumed by adivasis and the rural poor — concluding that the present arrangement has pauperised the farming community while protecting only the urban consumer. In the closing pages Singh sets out a ten-point alternative: treat the whole country as a single market, fix a 'parity' price tied to a base year, define a 'support'–'intervention' band of 85–115 per cent, build co-operative warehouses at vikas kendras for prompt payment to small farmers, license only stocks above 100 quintals through a light register-and-return regime, free perishables for export, and build grading, processing and cold-chain infrastructure for horticulture. The case is buttressed by two appended tables — the widening farm/non-farm price divergence to 1980, and the collapse in the purchasing power of one quintal of wheat against fertilisers, insecticides, diesel, tractors and other key inputs. ## Key points - Pricing and marketing policies framed in the scarcity decades remain in force even though India has shifted from import-dependence to marginal surplus, so the protected party should now be the producer rather than the consumer. - India has the land, irrigation, climate and technology to become the world's largest farm exporter; National Demonstration Plots already yield three to four times the national average, and replicating Punjab's performance on all irrigable land would transform the country's external position. - Open-market farm prices are not natural but contrived — through buffer stocks built on subsidised imports, liberal import policy, export bans, and wagon and credit constraints that block private movement of grain. - The Agricultural Prices Commission's cost-of-production method is methodologically broken: it ignores weather and pest risk, uses year-old input figures, assumes actual rather than optimum input use, and is followed selectively only when its findings keep procurement prices low. - Public distribution looks cheap but costs over Rs. 191 per quintal of wheat once subsidies and FCI losses are counted, while the rural poor (who exceed the urban population) receive less than one-fourth of distributed grain and coarse cereals are almost wholly ignored. - Modernising one hectare of farmland costs roughly Rs. 8,000; with 90 per cent of Indian farms still unmodernised, the required Rs. 1,024 billion cannot be raised so long as price manipulation prevents capital formation within the farm sector itself. - Singh proposes a 'parity' pricing system with a Government-announced 85–115 per cent support–intervention band, free internal movement of foodgrains, light-touch stock licensing above 100 quintals, co-operative warehouses at vikas kendras for distress-sale protection, and free export of perishables. - Two annexed tables show the farm/non-farm wholesale price divergence widening from 0.8 per cent in 1973 to 36.6 per cent in 1980, and the purchasing power of one quintal of wheat falling to 40–70 per cent of its 1970–71 level against fertilisers, diesel, tractors and other inputs. --- ## [Primary work] An Open Letter to L.I.C. URL: https://indianliberals.in/primary-works/an-open-letter-to-lic-by-peregrine-december-5-1962/ ### Summary An Open Letter to L.I.C., signed by the pseudonymous "Peregrine" and reproduced from the Amrit Bazar Patrika of September 1, 1962, is a sceptical reading of the Life Insurance Corporation's first major progress report by a writer who is also a policy-holder. While most papers, the letter notes, have "sung hallelujah" to the LIC's claimed jump in new business from Rs. 497.54 crores in 1960 to Rs. 608.82 crores in 1961, Peregrine argues that the corresponding rise in "business in force" — Rs. 452 crores, or 19.8 per cent — is too small to be consistent with that growth once first-year lapsation is honestly counted. The gap of Rs. 156.82 crores, he writes, either reflects accounting jugglery or simply measures policies that lapsed within the first year; his own estimate of true first-year lapsation is about Rs. 182.4 crores, or roughly 30 per cent of new business nationally and as high as 59 per cent in pockets such as Jalpaiguri. The second half of the letter shifts from arithmetic to incentives. Peregrine traces the LIC's promotional culture back to Morarji Desai's 1959 Lok Sabha exhortation to reach Rs.… ### Body ## Summary An Open Letter to L.I.C., signed by the pseudonymous "Peregrine" and reproduced from the Amrit Bazar Patrika of September 1, 1962, is a sceptical reading of the Life Insurance Corporation's first major progress report by a writer who is also a policy-holder. While most papers, the letter notes, have "sung hallelujah" to the LIC's claimed jump in new business from Rs. 497.54 crores in 1960 to Rs. 608.82 crores in 1961, Peregrine argues that the corresponding rise in "business in force" — Rs. 452 crores, or 19.8 per cent — is too small to be consistent with that growth once first-year lapsation is honestly counted. The gap of Rs. 156.82 crores, he writes, either reflects accounting jugglery or simply measures policies that lapsed within the first year; his own estimate of true first-year lapsation is about Rs. 182.4 crores, or roughly 30 per cent of new business nationally and as high as 59 per cent in pockets such as Jalpaiguri. The second half of the letter shifts from arithmetic to incentives. Peregrine traces the LIC's promotional culture back to Morarji Desai's 1959 Lok Sabha exhortation to reach Rs. 1,000 crores of new business as soon as possible, and argues that the resulting target-chasing has hardened into a system where field workers are rated chiefly on "gross completed business" — with the predictable result that officials are promoted for booking volumes of "unsound or simply fictitious" policies. He recounts a Calcutta Division episode in which Rs. 20 crores of new business was reportedly booked in a single day to save end-of-year quotas, and cites the Lok Sabha Estimates Committee's April 1962 report — which scolded the Corporation for emphasising expansion over servicing — to show that even Parliament has noticed the pattern. The pamphlet closes by demanding that the LIC make its admitted "adverse trend" public and asserts a citizen-and-policy-holder right to know the actual condition of the national insurance monopoly. The Forum of Free Enterprise reissued the letter in December 1962 with its standard disclaimer that the views expressed are not necessarily those of the Forum. ## Key points - Frames itself as the dissenting "brickbat" against a press chorus celebrating the LIC's 1961 results. - Argues that the Rs. 156.82 crore gap between claimed new business (Rs. 608.82 cr) and the marginal increase in "business in force" (Rs. 452 cr) measures first-year lapsation hidden by the Corporation's framing. - Estimates true first-year lapsation in 1961 at about Rs. 182.4 crores (~30 per cent of new business), citing Jalpaiguri's 59 per cent ratio as an example of regional concentration. - Cites the LIC's own admission that 5.46 lakh of 14.70 lakh policies issued in 1961 lapsed, and works out a unit economics example showing each lapsed policy costs the Corporation a net Rs. 13. - Traces the incentive distortion to Morarji Desai's 1959 Lok Sabha target of Rs. 1,000 crores and to internal appraisal formulae that weight "gross completed business" above servicing and retention. - Recounts a Calcutta Division episode where Rs. 20 crores of new business was reportedly booked on the last day of the year to save divisional prestige. - Invokes the Lok Sabha Estimates Committee's April 1962 report, which faulted the LIC for prioritising expansion over servicing, as Parliamentary corroboration. - Closes by asserting a citizen-and-policy-holder right to know, demanding the Corporation publish the "adverse trend" it has admitted only internally. --- ## [Primary work] An Analysis of Direct Tax Laws (Amendment) Bill, 1988. URL: https://indianliberals.in/primary-works/analysis-of-direct-tax-laws-amendment-bill-dinesh-vyas-1988/ ### Summary Dinesh Vyas, a practising Supreme Court advocate, takes apart the Direct Tax Laws (Amendment) Bill, 1988 — a piece of legislation introduced to walk back the most contentious portions of the Direct Tax Laws (Amendment) Act, 1987. He sets the dispute in long historical terms: taxation is a perpetual battle between the State's financial claims and the citizen's proprietary rights, and the 1987 Act provoked the bitterest such battle Indian tax law has seen, with public bandhs in Delhi, Bombay, and Ahmedabad and an appeal to the President to withhold assent. The 1988 Bill, he argues, is the Government's incomplete retreat: it deletes some provisions, restores some pre-1987 schemes (notably for charitable trusts and the taxation of firms and partners), but retains the new assessment scheme and reintroduces stiffer concealment penalties. Section by section, Vyas weighs which 1988 changes are welcome and which deserve resistance.… ### Body ## Summary Dinesh Vyas, a practising Supreme Court advocate, takes apart the Direct Tax Laws (Amendment) Bill, 1988 — a piece of legislation introduced to walk back the most contentious portions of the Direct Tax Laws (Amendment) Act, 1987. He sets the dispute in long historical terms: taxation is a perpetual battle between the State's financial claims and the citizen's proprietary rights, and the 1987 Act provoked the bitterest such battle Indian tax law has seen, with public bandhs in Delhi, Bombay, and Ahmedabad and an appeal to the President to withhold assent. The 1988 Bill, he argues, is the Government's incomplete retreat: it deletes some provisions, restores some pre-1987 schemes (notably for charitable trusts and the taxation of firms and partners), but retains the new assessment scheme and reintroduces stiffer concealment penalties. Section by section, Vyas weighs which 1988 changes are welcome and which deserve resistance. He praises the new Section 80HHD for hotels and licensed travel agents earning convertible foreign exchange, the carve-out of export profits from the Section 115J minimum-tax net, the new Section 10(6C) exemption for technical-services fees paid to foreign companies, and the reintroduced Investment Allowance for new plant and machinery installed after 31 March 1988. He objects, however, to the proposed reading of Section 80HHC that would condition the export deduction on actual profits — removing the impetus that previously sustained loss-making exports — and to new valuation rules under the Wealth Tax and Gift Tax Acts that switch unquoted shares to break-up value and burden post-1974 residential property owners. His fiercest criticism is reserved for the proposed widening of "income" in Section 2(24) to bring employee allowances within the tax net, made retrospective to 1 April 1962. The amendment would supersede two decades of judicial pronouncements favouring employees, fall hardest on the salaried lower-middle class, and require even completed assessments to be reopened. He treats the move as both unjust to working-class taxpayers and a violation of the canons of certainty and stability in tax law. Vyas closes with a broader indictment: the Income-tax Act, 1961 has been mauled by Parliamentary onslaught since its birth, the canons of simplicity and certainty have been "mercilessly violated", and the "undue anxiety to reach the last paisa through a statutory net" has produced a foolproof-on-paper system that in practice weakens administration and rewards evasion. India deserves, he writes, simpler direct tax laws tailored to the twenty-first century. ## Key points - Frames the 1988 Bill as a partial Government retreat after the 1987 Direct Tax Laws Amendment Act provoked unprecedented public protest (city bandhs in Delhi, Bombay, Ahmedabad) and an appeal to the President. - Welcomes restoration of the pre-1987 schemes for charitable trusts and institutions, and for taxation of firms and their partners, while noting new conditions on trust exemptions. - Praises export-sector reliefs: new Section 80HHD for hotels and licensed travel agents earning convertible foreign exchange, and the exclusion of export profits from the Section 115J minimum-tax computation. - Criticises the amendment to Section 80HHC, arguing that conditioning the export deduction on profits removes the incentive that sustained exports even in loss years. - Welcomes the reintroduction of Investment Allowance for plant and machinery installed after 31 March 1988, but flags as illusory the requirement that the option, once exercised, is locked in for five years. - Strongly opposes the widening of "income" in Section 2(24) to tax employee allowances retrospectively from 1 April 1962, arguing it supersedes two decades of judicial pronouncements and crushes the salaried lower-middle class. - Objects to new Wealth Tax / Gift Tax valuation rules that depart from settled Supreme Court principles by applying the break-up method to unquoted shares and that adversely revalue post-1974 residential property. - Diagnoses Indian direct tax law as suffering chronic instability — invoking a 1958 verdict that no Act in the country's history had been changed beyond recognition like the 1922 Income-tax Act, and arguing the 1961 Act has been worse. - Argues that the canons of simplicity and certainty have been violated by the State's anxiety to plug every gap, weakening administration and aiding evasion, and calls for direct tax laws tailored to twenty-first-century India. --- ## [Primary work] AN ANALYSIS OF BUDGET PROPOSALS (1963-64) URL: https://indianliberals.in/primary-works/ananalysis-of-budget-proposals-n-a-palkhivala-feb15-1963/ ### Summary N. A. Palkhivala's pamphlet — published by the Forum of Free Enterprise on the eve of the post-1962 emergency Budget — is a sustained classical-liberal attack on the 1963-64 Union Budget, with the proposed Super Profits Tax as its central target. Palkhivala opens by insisting that even an emergency cannot suspend "the principles of economics and the rules which regulate human conduct," and uses cross-national comparison (Japan halving its income-tax on the middle classes, US/UK/Germany/France direct-tax reductions, the National Institute's report to the UK Government, articles in The Times, The Economist and Time) to argue that progressive economies grow revenues by lowering rates, not by piling them on already-confiscatory marginal rates of 50% on companies and 87% on individuals. The heart of the booklet is a numbered indictment of the Super Profits Tax under eight heads: it taxes capital rather than profit; ignores the labour component of firms like agencies and partnerships; punishes lean-year recoveries; double-taxes corporate-shareholder structures; deters foreign collaboration; freezes new company formation; cripples banks by exhausting their reserve base; and will trigge… ### Body ## Summary N. A. Palkhivala's pamphlet — published by the Forum of Free Enterprise on the eve of the post-1962 emergency Budget — is a sustained classical-liberal attack on the 1963-64 Union Budget, with the proposed Super Profits Tax as its central target. Palkhivala opens by insisting that even an emergency cannot suspend "the principles of economics and the rules which regulate human conduct," and uses cross-national comparison (Japan halving its income-tax on the middle classes, US/UK/Germany/France direct-tax reductions, the National Institute's report to the UK Government, articles in The Times, The Economist and Time) to argue that progressive economies grow revenues by lowering rates, not by piling them on already-confiscatory marginal rates of 50% on companies and 87% on individuals. The heart of the booklet is a numbered indictment of the Super Profits Tax under eight heads: it taxes capital rather than profit; ignores the labour component of firms like agencies and partnerships; punishes lean-year recoveries; double-taxes corporate-shareholder structures; deters foreign collaboration; freezes new company formation; cripples banks by exhausting their reserve base; and will trigger a financial crisis worse than the emergency it is meant to fund. Palkhivala renames the proposal "The Economic Hara-kiri Act, 1963" and, if abolition is impossible, prescribes eight statutory amendments — restricting the levy to the emergency period, lifting the 6% standard return, excluding inter-company dividends from a third round of tax, ringfencing the Income-Tax Officer's discretion over commission and entertainment expenses, and exempting banks entirely. The later pages widen the attack to Section 40 of the Income-Tax Act, 1961 (the proposed Rs. 60,000-per-year ceiling on deductible employee remuneration, which he calls double taxation and a deterrent to foreign talent), the 20% surcharge on registered firms ("Tyranny through the Democratic Process"), and the 5%-plus-10% surcharge on machinery customs that he says will choke private investment in power and other capital-intensive sectors. Palkhivala closes by demanding that New Delhi receive "not merely a breath of fresh air but a blast of fresh air to sweep away the cobwebs of wrong fiscal thinking," with A. D. Shroff's epigraph on free enterprise sealing the pamphlet's worldview. ## Key points - Frames the Budget critique with the dictum that emergencies may suspend fundamental rights but not the principles of economics. - Marshals comparative evidence — Japan, USA, UK, Germany, France, plus citations of The Times, The Economist, Time and a National Institute report — to show that lowering direct-tax rates expands revenue. - Treats the Super Profits Tax as the Budget's central evil and lists eight specific defects, from taxing capital rather than profit to crippling bank reserves. - Renames the proposed levy 'The Economic Hara-kiri Act, 1963' and offers eight statutory amendments to make it bearable if outright repeal is impossible. - Attacks Section 40's Rs. 60,000 ceiling on deductible employee remuneration as arbitrary, double-taxing, and a deterrent to recruiting foreign technical talent. - Calls the 20% surcharge on registered firms 'Tyranny through the Democratic Process', arguing it confuses partnerships with limited companies and taxes labour income as if it were capital. - Warns that the customs surcharge on machinery (raising rates to 22% and 16.5%) will derail thermal-electricity and other capital-intensive projects already budgeted under earlier rates. - Closes with A. D. Shroff's aphorism on free enterprise and Palkhivala's own metaphor of needing 'a blast of fresh air to sweep away the cobwebs of wrong fiscal thinking' in New Delhi. --- ## [Primary work] An Analysis of Dutt Committee Report on Industrial Licensing URL: https://indianliberals.in/primary-works/ananlaysis-of-dutt-committe-november-9-1969/ ### Summary Published by the Forum of Free Enterprise in November 1969, this short booklet bundles two journalistic critiques of the Dutt Committee Report on Industrial Licensing. The first piece, by an unnamed "Special Correspondent" reproduced from the Indian Express, argues that the Committee's loaded terms of reference produced a document whose summary recommendations do not flow from its own factual analysis. Marshalling the Committee's own tables — the 23.8 per cent share of licences held by the 73 large houses and their second tiers, the 4.2 per cent share of the large independents, the 9.3 per cent and 6 per cent rates of non-implementation respectively — the correspondent contends that on every numerical criterion (share of licences, share of capital goods imports, rates of rejection and non-implementation) the large industrial sector performed at least as well as, and often better than, the rest of the private sector, the small-scale sector and the public sector.… ### Body ## Summary Published by the Forum of Free Enterprise in November 1969, this short booklet bundles two journalistic critiques of the Dutt Committee Report on Industrial Licensing. The first piece, by an unnamed "Special Correspondent" reproduced from the Indian Express, argues that the Committee's loaded terms of reference produced a document whose summary recommendations do not flow from its own factual analysis. Marshalling the Committee's own tables — the 23.8 per cent share of licences held by the 73 large houses and their second tiers, the 4.2 per cent share of the large independents, the 9.3 per cent and 6 per cent rates of non-implementation respectively — the correspondent contends that on every numerical criterion (share of licences, share of capital goods imports, rates of rejection and non-implementation) the large industrial sector performed at least as well as, and often better than, the rest of the private sector, the small-scale sector and the public sector. The villainising of "large houses" therefore rests on rhetoric rather than data, and the report's failure to summon witnesses or examine demand-forecasting reflects a methodological vacuum that the Monopolies Bill and bank nationalisation have, in any case, already overtaken. The analysis then turns to policy. It charges that the Committee ignored the role of demand variability, raw-material availability and the long lead-times between licensing and production; it accepts the case for a joint sector but warns that financial-institution directors cannot be expected to participate meaningfully in management; it notes that the recommendation for a "core sector" reserved to public undertakings contradicts the Industrial Policy Resolution and the Industrial Development Minister's own statement on entrepreneurial freedom; and it argues that a rigid five-year ban on growth in the "middle sector" would suppress exports, raise prices and depress public revenues. Citing the Maharashtra Government's SICOM scheme, the correspondent recommends positive incentives over blanket area bans, an independent judicial chairman for the licensing committee, and a high-quality monitoring committee under a retired Supreme Court judge. The second piece, an editorial titled "Vintage in Small Pack" reproduced from the Economic & Political Weekly of 6 September 1969, takes a sharper tone. It complains that two years of labour have yielded a report unable to demarcate clearly between the "core" and "middle" sectors, that the Committee's casual recommendation to plant public-institution directors on company boards betrays an outdated "pocket-sized" conception of control, and that neither technology nor organisation — the two factors most integral to size — receives any worthwhile attention. The editorial closes with the booklet's central indictment: that the Committee has bequeathed more problems than it has solved, and that "its contribution is more academic. And that is a failure of mind." Two epigraphs — Eugene Black on accepting private enterprise as an "affirmative good" and A. D. Shroff on the perpetuity of free enterprise — frame the booklet as a Forum statement of position rather than a neutral commentary. ## Key points - The booklet packages two press critiques of the Dutt Committee Report — a Special Correspondent piece from the Indian Express and an Economic & Political Weekly editorial titled "Vintage in Small Pack". - Central argument: the Committee's summary recommendations do not flow from its own factual analysis; its conclusions "loaded" the case against large industrial houses in spite of data that exonerates them. - Statistical case: the 73 large houses and their second tiers accounted for only 23.8 per cent of licences and 9.3 per cent of non-implementation; large independents, only 4.2 per cent of licences and 6 per cent of non-implementation — performance at least as good as other sectors. - Methodological critique: the Committee did not summon witnesses, failed to address demand forecasting, the three-to-five-year lead-times between licensing and production, raw-material variability, or capacity definitions. - Policy critique: the recommended five-year ban on growth in the "middle sector" would damage exports and revenues; the Maharashtra SICOM model of positive incentives is preferred to blanket area bans. - On the joint sector: financial-institution nominees cannot meaningfully participate in management; modern control rests on investment, reporting and information systems, not on directors' physical presence. - On the core sector: the Committee's recommendation of state monopoly over basic and heavy industries contradicts the Industrial Policy Resolution and the Industrial Development Minister's own pronouncements on entrepreneurial freedom. - Implementation reform: the licensing committee should be chaired by an independent judicial figure, ideally a retired Supreme Court judge, supported by a high-quality top-level monitoring committee. - The booklet positions itself as a Forum of Free Enterprise polemic — book-ended by Eugene Black's epigraph defending private enterprise as an "affirmative good" and A. D. Shroff's posthumous declaration on the perpetuity of free enterprise. --- ## [Primary work] अंगारमळा URL: https://indianliberals.in/primary-works/angarmala-sharad-joshi/ ### Summary अंगारमळा (Angarmala, literally 'Ember-Garden') is a Marathi-language collection of nineteen essays by Sharad Joshi, the founder of the Shetkari Sanghatana, first published in 2008 and expanded in a second edition (2015). The title is a metaphor for the scorching toil of the peasant life and the movement Joshi built around it. In the rendered pages the book opens with three autobiographical essays drawn from columns published in the weeklies Saptahik Vakari and Saptahik Gyanba. The publisher's foreword by Shrikant Umariker notes that the book received Maharashtra government recognition for outstanding literary creation and that the second edition adds four new essays, including biographical portraits of former Prime Minister Charan Singh, Shetkari Sanghatana leaders Anil Gote and Ramchandrabapu Patil, and a history of the Vakari weekly itself. The title essay 'अंगारमळा' is an intimate autobiographical account of Joshi's early activist decades — his marriage, the family's peripatetic life across Delhi, Shimla, Agra, and Pune, and the grinding daily reality of building a mass farmer movement from scratch.… ### Body ## Summary अंगारमळा (Angarmala, literally 'Ember-Garden') is a Marathi-language collection of nineteen essays by Sharad Joshi, the founder of the Shetkari Sanghatana, first published in 2008 and expanded in a second edition (2015). The title is a metaphor for the scorching toil of the peasant life and the movement Joshi built around it. In the rendered pages the book opens with three autobiographical essays drawn from columns published in the weeklies Saptahik Vakari and Saptahik Gyanba. The publisher's foreword by Shrikant Umariker notes that the book received Maharashtra government recognition for outstanding literary creation and that the second edition adds four new essays, including biographical portraits of former Prime Minister Charan Singh, Shetkari Sanghatana leaders Anil Gote and Ramchandrabapu Patil, and a history of the Vakari weekly itself. The title essay 'अंगारमळा' is an intimate autobiographical account of Joshi's early activist decades — his marriage, the family's peripatetic life across Delhi, Shimla, Agra, and Pune, and the grinding daily reality of building a mass farmer movement from scratch. Joshi writes with unusual candour about the personal cost of political life: his wife Shreya's sacrifices, the difficulty of farm-income questions, encounters with landless labourers, and the slow radicalisation that turned a civil-servant intellectual into a peasant-movement leader. The narrative reaches the January 1973 agitation launch and closes with Joshi's reflections on collective action and land-amalgamation policy failures. The second essay, 'माझी ब्राह्मण्याची गाथा' ('My Story of Being a Brahmin'), turns inward: Joshi examines the tension between his Brahmin caste identity and his role as the chief voice of Maharashtra's farming poor. He interrogates the pride, shame, and political vulnerability that attach to caste in activist life, and asks whether Hindu religious tradition can be reconciled with genuine agrarian solidarity. The third essay, 'इति एकाध्याय' ('Thus Ends a Chapter'), is a vivid, scene-by-scene account of a crisis period in the Shetkari Sanghatana in the early 1990s, weaving together episodes of agitation, his wife Gauri's serious illness in Delhi, confrontations with government officials, and the emotional cost of sustaining a movement under hostile political conditions. All three essays in the rendered pages are sourced to their original periodical publication dates (1988–1992), underscoring the collection's character as recovered journalism. ## Key points - The book is a single-author collection of essays originally published in Marathi weeklies; the rendered pages cover essays 1–3 (printed pp. 7–34) out of 19 essays across 104 PDF pages. - The title essay is an autobiographical account of Joshi's entry into the shetkari movement, combining personal memoir (marriage, family displacement, financial hardship) with political history of the 1960s–1970s agitation period. - Essay 2 directly confronts the caste question: as a Brahmin leading a farmers' movement, Joshi reflects on how caste identity complicates and sometimes delegitimises agrarian activism in the eyes of both supporters and opponents. - Essay 3 records a crisis in the Shetkari Sanghatana in the early 1990s, including his wife Gauri's illness, political setbacks, and the strain of sustaining collective action against bureaucratic and electoral pressures. - The publisher's foreword identifies a Maharashtra state literary award, the inclusion of four new essays in the 2015 edition, and the book's warm reception among farmers and literary critics alike. - Each of the three rendered essays is anchored to a specific periodical source and date, affirming the collection's nature as compiled journalism rather than retrospective memoir. - Sharad Joshi employs lyrical, literary Marathi — as the publisher foreword notes, making him a rare movement leader whose writing crosses into literary culture. --- ## [Primary work] अन्वयार्थ - १ URL: https://indianliberals.in/primary-works/anvyartha-1-sharad-joshi/ ### Summary अन्वयार्थ - १ (Anvyartha Vol. 1) is a Marathi-language collection of newspaper columns by Sharad Joshi, the founder of the Shetkari Sanghatna (Farmers' Organisation), published in 2010 by Janashakti Vachak Chalavala, Aurangabad. According to the publisher's note, the pieces were originally published in Dai. Lokmat between 1992–1994 and 2000–2001 under the 'Anvyartha' column-head, and the collection is being issued as part of Joshi's amrit-mahotsav (75th birthday) publication series. The book carries a government of Maharashtra award. In the rendered pages, Joshi advances his signature thesis — that the root cause of India's political and social dysfunction is the systematic looting of agricultural production by the state, a pattern he traces from British colonial rule through post-independence socialism. His preface frames every topic he writes on — literacy, science, electoral corruption, gender, the arts — as ultimately connected to this foundational agrarian critique.… ### Body ## Summary अन्वयार्थ - १ (Anvyartha Vol. 1) is a Marathi-language collection of newspaper columns by Sharad Joshi, the founder of the Shetkari Sanghatna (Farmers' Organisation), published in 2010 by Janashakti Vachak Chalavala, Aurangabad. According to the publisher's note, the pieces were originally published in Dai. Lokmat between 1992–1994 and 2000–2001 under the 'Anvyartha' column-head, and the collection is being issued as part of Joshi's amrit-mahotsav (75th birthday) publication series. The book carries a government of Maharashtra award. In the rendered pages, Joshi advances his signature thesis — that the root cause of India's political and social dysfunction is the systematic looting of agricultural production by the state, a pattern he traces from British colonial rule through post-independence socialism. His preface frames every topic he writes on — literacy, science, electoral corruption, gender, the arts — as ultimately connected to this foundational agrarian critique. The opening essay, 'नव्या शतकातील माणूस — माणूस असेल' (Human in the New Century — Will He Remain Human?), surveys human progress from evolution through organised religion and modern science, arguing that whereas each ideology has tried to reform human nature rather than accept market-compatible self-interest, the new century's challenge is to harness rationality and science toward genuine individual flourishing. A second essay, ''सियावरत्यक्ता सीता' एक अनादी पीडित' (Sita Abandoned by Siyavar — A Timeless Victim), reads the Ramayana's Sita as an emblem of the woman who is perpetually punished despite blamelessness, and attacks the continuing social norm that enforces female sacrifice for family and male honour. A third essay, 'विद्वानांची 'स्वायत्तता लिमिटेड'' (Scholars' Autonomy, Limited), targets academics and literary institutions — universities, the Sahitya Akademi — for their dependence on and deference to the ruling party, arguing that genuine intellectual autonomy has been extinguished by state patronage. A fourth essay, 'नवे कलुषा कब्जी' (The New Corrupt Captors), attacks the post-liberalisation rentier class of economists and planning-commission functionaries, notably Ashok Mitra and Dantewala, who champion planning-era controls while benefiting from them, and exposes how price controls damage farmers. The fifth essay fragment visible in the rendered pages, 'पाहिजे 'एक सरकार'' (We Need 'One Government'), critiques the policy chaos that followed the 1992 Ayodhya riots and the resulting loss of foreign investment confidence. ## Key points - The collection gathers Marathi columns originally published in Dai. Lokmat (1992–94 and 2000–01); in the rendered pages only the front matter, preface, table of contents, and the first five essays (partially) are visible. - Joshi's preface states the central thesis of Shetkari Sanghatna: all governance systems — colonial and post-colonial — have sustained themselves by looting agricultural output; licence-permit-quota raj is the post-independence avatar of the same extraction. - The first essay surveys evolutionary and intellectual history to argue that human nature cannot be reformed by religion, ideology or collectivism, and that the new century should accept rational self-interest as the basis of economic organisation. - The Sita essay deploys the Ramayana as a critique of patriarchal social norms, arguing that women remain punished for their own virtue; Joshi's reading is explicitly feminist and anti-traditionalist within a liberal frame. - The 'Scholars' Autonomy Limited' essay argues that Indian universities and cultural institutions have surrendered independent thought to state patronage, creating a class of intellectuals who cannot critique the government that funds them. - In the rendered pages, Ashok Mitra and M. L. Dantewala are named as economists who provide ideological cover for planning-era price controls while personally benefiting from the system. - The table of contents shows 77 essays across 197 pages spanning topics from agrarian economics and liberalisation to the Ramayana, Bofors, the Dunkel Draft, Russia's transition, and Shiv Sena — none of these later essays are visible in the rendered pages. --- ## [Primary work] APPROACH TO THE FIFTH PLAN URL: https://indianliberals.in/primary-works/approach-to-the-fifth-plan-dr-phiroze-b-medhora-february-1973/ ### Summary Reproduced from the first of two lectures Dr. Phiroze B. Medhora delivered at Surat under the auspices of the South Gujarat University on 6 February 1973, this Forum of Free Enterprise booklet is a sustained critique of the Planning Commission's revised Approach Paper to the Fifth Five-Year Plan (1974–79). Medhora argues that after a quarter-century of planning the Commission has 'apparently learnt nothing—and has certainly not forgotten the cliches.' He compares the original Approach Paper of October 1972 with the revised version of January 1973 and finds the latter to be a 'slide-back' — a fundamental change in concept and strategy disguised as a drafting revision, the most visible symptom of which is the cut in the target growth rate from 6.5 per cent to 5.5 per cent. Medhora frames the planning debate as one over objectives. He distinguishes the western 'growth versus distribution' dilemma popularised by Mahbub-ul-Haq from the Indian problem, which he insists is essentially distributive, since India's physical resources are not so exhausted as to force a trade-off with employment.… ### Body ## Summary Reproduced from the first of two lectures Dr. Phiroze B. Medhora delivered at Surat under the auspices of the South Gujarat University on 6 February 1973, this Forum of Free Enterprise booklet is a sustained critique of the Planning Commission's revised Approach Paper to the Fifth Five-Year Plan (1974–79). Medhora argues that after a quarter-century of planning the Commission has 'apparently learnt nothing—and has certainly not forgotten the cliches.' He compares the original Approach Paper of October 1972 with the revised version of January 1973 and finds the latter to be a 'slide-back' — a fundamental change in concept and strategy disguised as a drafting revision, the most visible symptom of which is the cut in the target growth rate from 6.5 per cent to 5.5 per cent. Medhora frames the planning debate as one over objectives. He distinguishes the western 'growth versus distribution' dilemma popularised by Mahbub-ul-Haq from the Indian problem, which he insists is essentially distributive, since India's physical resources are not so exhausted as to force a trade-off with employment. Yet the revised Paper, he contends, has reduced the question of minimum subsistence for the poor to a re-arrangement of existing income, leaving the production structure largely untouched. He shows arithmetically that bringing the poorest sections up to a minimum consumption level of Rs. 20 per capita (1961–62 prices) requires a 33 per cent rise in consumption of foodgrains, edible oils, cloth and fuel, against planned growth rates for these items of only around 5 per cent — a gap that is not technical but political. The core of the lecture is a methodological attack on the Commission's single-model planning. Medhora argues that with the same level of investment, a redistribution of investment across sectors (heavier weight to agriculture) and a lower capital-output ratio could yield a 7.5 per cent growth rate rather than 5.5 per cent, requiring perhaps Rs. 5,000 crores more in total outlay. He rejects the 'defeatist' treatment of exports as inelastic — pointing out that world trade grew 10–12 per cent annually through the 1960s — and the bureaucratic instinct to take foreign aid and imports, but not exports, as policy variables. Citing Japan's tolerated 5–6 per cent inflation alongside 10–11 per cent real growth in the sixties, he argues that the level of investment, the rate of inflation, and the resource envelope are all choices, not constraints. Medhora closes by charging the revised Approach Paper with being an exercise in 'academic planning' — a paper approach in which computers, rather than human effort, decide the country's destiny. The Paper accepts its own self-enunciated objectives uncritically, offers no alternative paths, and disdains to present the country with real choices. 'Even a nominal etatist economy', he writes, could achieve the modest targets envisaged; the planning exercise as currently practised is 'timid in its approach, academic in its conception and irrelevant to the task the Planning Commission should be concerned with.' ## Key points - Medhora reads the revised Approach Paper of January 1973 as a substantive 'slide-back' from the October 1972 draft, not a mere drafting revision; the cut in the target growth rate from 6.5 to 5.5 per cent is the most visible symptom. - He distinguishes Mahbub-ul-Haq's growth-vs-distribution dilemma (a western framing imported from Pakistan's experience) from India's situation, which he argues is essentially distributive since physical resources are not so exhausted as to force the trade-off. - Bringing the poorest population up to minimum subsistence (Rs. 20 per capita at 1961–62 prices) requires a 33 per cent increase in consumption of foodgrains, edible oils, cloth and fuel — against planned growth rates near 5 per cent — exposing the gap between rhetoric and targets. - Re-arranging investment across sectors with greater weight to agriculture, and accepting a lower capital-output ratio than the Commission's 3.14:1, could deliver a 7.5 per cent growth rate at the same investment level; reaching the higher target would require about Rs. 5,000 crores more in total outlay. - He rejects the treatment of Indian exports as inelastic, noting world trade grew 10–12 per cent per year through the 1960s, and criticises the Planning Commission for treating only foreign aid and imports — not exports — as policy variables. - Inflation is reframed as a choice rather than a hard ceiling: he cites Japan's deliberate 5–6 per cent inflation alongside 10–11 per cent real growth in the sixties to argue that the level of investment is a policy variable. - He attacks the Commission's monopoly on model-building: by offering 'one final model to choose from', it reduces national economic strategy to tinkering rather than genuine alternative-comparison. - Medhora's closing charge is that the revised Approach Paper is 'academic planning' — a paper exercise in which computers, not human effort, decide destiny — and is therefore timid, academic and irrelevant to the real task before the Planning Commission. --- ## [Primary work] Approach to the Fourth Five-Year Plan URL: https://indianliberals.in/primary-works/approach-to-the-fourth-five-year-plan-dr-r-c-cooper-s-m-dahanukar-y-a-fazalbhoy-november-10-1968/ ### Summary Published by the Forum of Free Enterprise on 10 November 1968 to coincide with the Planning Commission's circulation of its 'Approach to the Fourth Five-Year Plan' note, this pamphlet collects three addresses by Dr. Rustom C. Cooper, Y. A. Fazalbhoy and S. M. Dahanukar — a chartered accountant and Indian Merchants' Chamber past president, the head of the All-India Manufacturers' Organisation, and the president of the Maharashtra Chamber of Commerce. The FFE introduction frames the volume as a continuation of its post-1956 campaign against Soviet-style centralised planning, citing inflation, foreign exchange crises, food shortages and industrial recession as vindication of warnings earlier issued by A. D. Shroff, Murarji J. Vaidya, N. A. Palkhivala, Prof. P. T. Bauer and Prof. B. R.… ### Body ## Summary Published by the Forum of Free Enterprise on 10 November 1968 to coincide with the Planning Commission's circulation of its 'Approach to the Fourth Five-Year Plan' note, this pamphlet collects three addresses by Dr. Rustom C. Cooper, Y. A. Fazalbhoy and S. M. Dahanukar — a chartered accountant and Indian Merchants' Chamber past president, the head of the All-India Manufacturers' Organisation, and the president of the Maharashtra Chamber of Commerce. The FFE introduction frames the volume as a continuation of its post-1956 campaign against Soviet-style centralised planning, citing inflation, foreign exchange crises, food shortages and industrial recession as vindication of warnings earlier issued by A. D. Shroff, Murarji J. Vaidya, N. A. Palkhivala, Prof. P. T. Bauer and Prof. B. R. Shenoy. The three contributors converge on a single argumentative centre: fifteen years of plans have produced a 'marginal' economy by Asian standards, the Planning Commission has been doctrinaire, over-ambitious and overly bureaucratic, and the Fourth Plan can only succeed if it is resource-based rather than need-based, gives the private sector greater latitude, conditions further public-sector investment on a 10 per cent rate of return, and replaces licensing with a more permissive industrial policy. ## Essays ### Approach to the Fourth Plan — Indian Planning at Crossroads *By Dr. Rustom C. Cooper* Dr. Rustom C. Cooper, then a Past President of the Institute of Chartered Accountants of India and of the Indian Merchants' Chamber, argues that 'Indian planning has reached the crossroads' after three Plans and an enforced plan holiday. He compares the doctrines of Balanced and Imbalanced Growth, then audits the record: an average growth rate of 3.3 per cent against 6–8 per cent in Japan, Thailand, China and Korea; per capita national income growth of only 1.2 per cent between 1951 and 1966; Third Plan inflation of 32 per cent; unemployment backlog rising from 5.3 to 10 million; indirect taxes producing 75 per cent of total revenue; and Public Sector returns of 1.8 per cent on capital with losses in seven of eleven years between 1960-61 and 1964-65. From this audit Cooper enumerates seven errors — doctrinaire planning, unrealistic planning, over-ambition, over-planning, resource over-estimation, bureaucratic implementation, Centre-State discord and neglect of population control — and proposes ten remedies for the Fourth Plan period, including performance budgeting for both public and private sectors, conditioning further Public Sector investment on rates of return, price stabilisation, lower dependence on external aid, export priority, and reducing reliance on government agencies. He warns that mobilising the additional Rs. 200–300 crores demanded by the 'Approach' should be 'thoroughly re-examined' if existing Public Sector concerns of over Rs. 3,000 crores were forced to yield a reasonable 10 per cent return. - Indian planning is at a crossroads after three Plans and an enforced plan holiday; this is the moment to choose between Balanced and Imbalanced Growth and to decide whether 'regimented' planning suits a democracy. - The economy has grown at only 3.3 per cent per annum; per capita growth between 1951 and 1966 was just 1.2 per cent, and India's rate is marginal compared with 6 per cent in Japan, 7 per cent in Thailand and 8 per cent in Nationalist China. - Seven errors of past planning — doctrinaire, unrealistic, over-ambitious, over-planned, resource over-estimating, bureaucratic, and Centre-State discordant — must be acknowledged before any Fourth Plan strategy can succeed. - Public Sector undertakings have earned a return of only 1.8 per cent on invested capital and made losses in seven of the last eleven years; further investment must be conditional on the rate of return on existing assets. - The Fourth Plan should be self-reliant, prioritise exports, restore harmony in industrial relations, and demand at least a 10 per cent return on the existing Rs. 3,000 crores of Public Sector industrial investment before any new resource mobilisation. ### A Judicious Industrial Licensing Policy is Essential *By Y. A. Fazalbhoy* Y. A. Fazalbhoy, President of the All-India Manufacturers' Organisation, endorses the 'Approach' note's call for 'Growth with Stability' and welcomes signs that the Planning Commission is moving toward delicensing and decontrol, but argues that the Commission still hesitates to extend free scope for industrial licensing to its full impact on production and productivity. He defends de-licensing against the standard objections — fear that small-scale units will be wiped out, that planning targets cannot be achieved without licences, that licensing is needed to ration scarce capital, and that delicensing will produce monopolies — by pointing to American practice (where the Small Business Act and Small Investment Corporation Act protect smaller firms within a competitive economy) and to Justice Learned Hand's warning against confusing restraint of monopoly with the loss of common freedom. Fazalbhoy also urges a more liberal approach to the import of foreign know-how. Annual royalty payments have risen only from Rs. 16 crores in 1957-58 to Rs. 32 crores in 1967-68, and cost of know-how is generally less than 7½ per cent of overall cost; the Government, he argues, should not follow any 'hard and fast rule' but consider each case on merit, permitting purchase or royalty agreements where they serve the national interest, rather than restricting know-how imports because of foreign-exchange anxiety. - 'Growth with Stability' is the right banner for the Fourth Plan, but agricultural prices must be stabilised first if industrial stability is to follow. - Decontrol and delicensing should go further; objections from small-scale-industry advocates and monopoly-fearers can be met with American-style legislation (Small Business Act, Small Investment Corporation Act) and indicative targets backed by tax concessions rather than by licensing. - Capital is scarce, so investment in existing units that yields more output per rupee is preferable to creating new units; service-sector expansion will eventually absorb most of the working population, as in developed economies. - Foreign know-how imports should not be rationed by a single rule; the cost is less than 7½ per cent of total cost, and confining manufacturers to one technology would 'throttle initiative' and weaken competitiveness. ### Fourth Plan should be Based on Available Resources *By S. M. Dahanukar* S. M. Dahanukar, President of the Maharashtra Chamber of Commerce, opens his commentary on the 'Approach' note by praising its thoughtful drafting and its move to reorient planning onto a 'practical basis'. He welcomes its insistence that Public Sector investment must yield profits before fresh resources are committed, its proposal to give the Private Sector greater latitude through reduced controls, its emphasis on financial assistance to agriculturists through co-operative and commercial bank credit, and its attention to small rain-fed cultivators. On price stabilisation he supports the note's proposal that the Government build buffer stocks of foodgrains and expand distribution through fair-price shops and consumer co-operatives. In the rendered pages, Dahanukar pivots to a critique of the old planning method: targets were fixed first, programmes built around them, and then the Planning Commission scrambled to find resources, leaving an 'unbridged gap' filled by deficit financing and foreign aid. He calls for this approach to be abandoned in favour of a different one — the substantive proposal is cut off where the rendered chunk ends on printed page 18. - The 'Approach' note correctly insists that fresh Public Sector investment wait until existing units become profitable, and that the Private Sector be given greater latitude through reduced controls. - Agricultural credit through co-operative and commercial banks, plus targeted aid for small rain-dependent cultivators, is rightly emphasised in the note. - Buffer stocks of foodgrains operated by Government, plus expanded fair-price shops and consumer co-operatives, are the right instruments for stabilising prices across other commodities. - Past plans wrongly fixed targets first and then chased resources, producing deficit financing, dependence on foreign aid and an 'unbridged gap' — the rendered chunk ends just as Dahanukar begins to propose a replacement method. --- ## [Primary work] Are There Monopolies and Concentration of Economic Power in India? URL: https://indianliberals.in/primary-works/are-there-monopolies-and-concentration-of-economic-power-in-india-arvind-narotta-lalbhai-h-venkatasubbiah-july-5-1964/ ### Summary Are There Monopolies and Concentration of Economic Power in India? is a short Forum of Free Enterprise booklet, published in Bombay in July 1964 and printed by M. R. Pai. The Forum frames the booklet as a dispassionate intervention against what it calls 'ill-informed talk' on monopolies and concentration of economic power, and reproduces two newspaper articles already published earlier in 1964 — H. Venkatasubbiah's 'A Naive Analysis of Economic Power' (from The Hindu, 9 May 1964) and Arvind Narottam Lalbhai's 'Government's Obsession with "Monopolies" — A Threat to Economic Progress' (from The Economic Times, 15 April 1964) — together with an Appendix of selected quotations from Wilhelm Roepke's Economics of the Free Society. The argumentative centre is a sceptical reading of the Mahalanobis Committee on Distribution of Income and Levels of Living: Venkatasubbiah's piece dissects what he treats as the Committee's conceptual confusions between wealth, economic power and decision-making power, and argues that a politicised concentration of economic power in the State is no remedy.… ### Body ## Summary Are There Monopolies and Concentration of Economic Power in India? is a short Forum of Free Enterprise booklet, published in Bombay in July 1964 and printed by M. R. Pai. The Forum frames the booklet as a dispassionate intervention against what it calls 'ill-informed talk' on monopolies and concentration of economic power, and reproduces two newspaper articles already published earlier in 1964 — H. Venkatasubbiah's 'A Naive Analysis of Economic Power' (from The Hindu, 9 May 1964) and Arvind Narottam Lalbhai's 'Government's Obsession with "Monopolies" — A Threat to Economic Progress' (from The Economic Times, 15 April 1964) — together with an Appendix of selected quotations from Wilhelm Roepke's Economics of the Free Society. The argumentative centre is a sceptical reading of the Mahalanobis Committee on Distribution of Income and Levels of Living: Venkatasubbiah's piece dissects what he treats as the Committee's conceptual confusions between wealth, economic power and decision-making power, and argues that a politicised concentration of economic power in the State is no remedy. Lalbhai goes further, arguing that the 'monopolies' under attack do not in fact exist, that the Government's anti-concentration policy itself produces sellers' markets and inflation, and that 'if capitalism is bad, State capitalism is worse'. The Roepke appendix and the closing A. D. Shroff and Eugene Black aphorisms tie the booklet's particular Indian arguments into the Forum's broader classical-liberal frame of free enterprise as an 'affirmative good'. ## Essays ### A Naive Analysis of Economic Power *By H. Venkatasubbiah* Venkatasubbiah's article — reproduced from The Hindu of 9 May 1964 — is a close, sceptical reading of the Mahalanobis Committee's third term of reference, which asked the Committee to ascertain how far the operation of the economic system had concentrated wealth and the means of production. He argues that the Committee elides three distinct things — wealth, economic power, and decision-making power over the disposition of capital — and that the Indian situation is in fact 'much more complicated' than the equation of wealth with power allows: small capitalists with access to ministerial cells may wield more economic power than big ones, caste matters, and workers' organisations may exert as much productive influence as employers'. From this analytical base he attacks the Committee's preferred remedy of building 'countervailing economic power' through enlargement of the public sector. He contends that the answer to one form of concentration cannot be another form of concentration; that public-sector personnel, once given economic power, are not freed from the political pathologies the Committee fears; and that the Vivian Bose Commission's enquiries into the Dalmia-Jain group show that the real problem is not the existence of decision-making power but policing it. He closes by noting that the Committee has done no appreciable original work, and warns that planning that cannot reconcile growth with social justice will leave India with 'a distribution of poverty'. - Argues that the Mahalanobis Committee on Distribution of Income and Levels of Living conflates wealth, economic power and decision-making power, producing a 'naive' analysis. - Holds that in Indian conditions small capitalists with access to 'cells of Ministerial power' may be more powerful than big ones, and that caste is itself a factor in economic power. - Rejects the Committee's prescription of enlarging the public sector as 'countervailing' power, calling it the answer of one form of concentration by another. - Concedes industrialisation has 'its own logic' — economies of scale and use of scarce talent cannot be sacrificed to fears of concentration. - Reads the Committee's posture as recommending restriction of the private sector's scope relative to the public sector in the Fourth and subsequent Plans, while doing little original data work. - Closes with the warning that an Indian socialism that fails to reconcile growth with social justice will deliver only 'a distribution of poverty'. ### Government's Obsession with "Monopolies" — A Threat to Economic Progress *By Arvind Narottam Lalbhai* Lalbhai's article — reproduced from The Economic Times of 15 April 1964 — is a polemic against what he calls the 'Governmental obsession' with monopolies, arguing that the alleged Indian monopolies 'simply do not exist' and that the Government's anti-monopoly policy is itself the cause of the sellers' markets, scarcity and inflation it claims to fight. He treats the textile industry as the prime victim, hamstrung by restrictions on capacity expansion 'for the protection of the handloom and power-loom industries' and by 'misplaced fears of concentration of economic power'. He defends profit as 'an index of efficiency' and 'a must for the continuance and growth of all economic activities', distinguishes it sharply from profiteering, and argues that small re-invested concentrations of capital in the hands of a few entrepreneurs are precisely what an early-industrialising economy needs. Citing Fortune magazine's 1963 list of the 500 largest U.S. corporations — reproduced on p.13 as a data exhibit comparing General Motors and the 500th-ranked Interlake Iron — he contends that Indian firms are 'only a dwarf' before American counterparts, and that the United States' anti-monopoly framework operates through courts to prevent collusion rather than to prevent diversification. The article culminates in the claim that bureaucrats armed with both political and economic power are a worse danger than private monopoly: 'If capitalism is bad, State capitalism is worse and here lies the greatest danger even for the future of democracy in India.' - Argues monopolies in the strict sense — single firms able to manipulate price and supply — 'do not really exist' in India; what exists is Government-induced scarcity. - Holds that the controls-and-fair-price-shops mentality treats symptoms not diseases, and that competitive markets are the only true antidote to monopoly. - Defends profit as a legitimate return and the only sustainable basis for industrial growth, sharply distinguishing it from profiteering. - Praises diversification of company funds across activities as 'the libido of prosperity' and attacks Company Law restrictions on inter-company investment. - Uses Fortune magazine's 1963 league table to argue Indian firms are 'a dwarf' beside U.S. corporations and that concentration in early industrialisation is desirable. - Concludes that public-sector accumulation of both political and economic power is more dangerous to Indian democracy than private monopoly: 'State capitalism is worse'. --- ## [Primary work] बळीचे राज्य येणार आहे URL: https://indianliberals.in/primary-works/baliche-rajey-yenar-aahe-sharad-joshi/ ### Summary Baliche Rajya Yenar Aahe (बळीचे राज्य येणार आहे, 'The Kingdom of Bali Is Coming') is a collected-works volume of Marathi-language writings by Sharad Joshi (1935–2015), the founding leader of the Shetkari Sanghatana (Farmers' Organisation), published by Janashakti Vachak Chalval, Aurangabad, in October 2010 to mark Joshi's birth anniversary. The book gathers essays, speeches, and polemical pieces written across roughly three decades on Indian farm policy, the structural exploitation of agriculturalists, and the theory and practice of the shetkari movement. In the rendered pages, the volume opens with a section called 'Chintan' (Reflection) and launches immediately into three substantive essays. In the rendered pages, the opening essay — 'Annadata la purensa khau dya, to jagala potabhar khau ghailil' ('Let the food-giver eat his fill, and he will feed the world') — is a long historical argument tracing how industrialisation in England and later Russia was built on the deliberate suppression of agricultural prices and the exploitation of farm labour.… ### Body ## Summary Baliche Rajya Yenar Aahe (बळीचे राज्य येणार आहे, 'The Kingdom of Bali Is Coming') is a collected-works volume of Marathi-language writings by Sharad Joshi (1935–2015), the founding leader of the Shetkari Sanghatana (Farmers' Organisation), published by Janashakti Vachak Chalval, Aurangabad, in October 2010 to mark Joshi's birth anniversary. The book gathers essays, speeches, and polemical pieces written across roughly three decades on Indian farm policy, the structural exploitation of agriculturalists, and the theory and practice of the shetkari movement. In the rendered pages, the volume opens with a section called 'Chintan' (Reflection) and launches immediately into three substantive essays. In the rendered pages, the opening essay — 'Annadata la purensa khau dya, to jagala potabhar khau ghailil' ('Let the food-giver eat his fill, and he will feed the world') — is a long historical argument tracing how industrialisation in England and later Russia was built on the deliberate suppression of agricultural prices and the exploitation of farm labour. Joshi argues, in the rendered pages, that the Corn Laws controversy, Stalin's collectivisation, and independent India's Nehruvian planning framework all share a common logic: cheap food for the urban-industrial sector is extracted from the countryside at the cost of the peasant's livelihood. He contests the Marxist framing of agriculture as a 'primitive' sector and insists that industrial capital accumulation everywhere has been premised on agricultural surplus extraction rather than on market exchange. The second essay in the rendered pages, 'Prashikshanача khara arth' ('The True Meaning of Training'), is an address to Shetkari Sanghatana organisers about the philosophical underpinnings of movement work. Joshi argues, in the rendered pages, that rote training programmes miss the movement's true intellectual challenge; genuine training means instilling the capacity for independent economic analysis in farmers themselves. The third essay, 'Bharat dashkatil chaturang sheti' ('Four-pronged farming in India's decade'), begins in the rendered pages and frames the Shetkari Sanghatana's programmatic shift toward comprehensive agricultural reform — covering crop markets, processing, exports, and input pricing — after its founding announcement. The bulk of the book (essays 4–48, covering fertiliser pricing, wheat imports, land policy, farmer suicides, sugar cooperatives, and more) falls outside the rendered pages. ## Key points - In the rendered pages, Joshi frames global industrialisation — in England, Russia, and India — as historically dependent on the coercive suppression of farm-gate prices, a structural condition the Shetkari movement must dismantle. - In the rendered pages, Joshi explicitly rejects the Marxist characterisation of agriculture as a 'primitive' (आदिम) sector and argues that agrarian surplus extraction, not factory labour, was the true engine of capital accumulation. - In the rendered pages, he draws a pointed comparison between Stalin's collectivisation (which destroyed the kulak class) and Nehru's planning framework (which similarly subordinated farmers to an urban-industrial agenda), tracing a shared anti-peasant logic across ideological lines. - In the rendered pages, the essay on 'true training' argues that movement-building requires teaching farmers to analyse economic price mechanisms for themselves, not merely passing on organisational instructions. - In the rendered pages, Joshi's tone is polemical and hortatory: the title 'The Kingdom of Bali Is Coming' invokes the Marathi folk-mythological figure of Bali Raja (the farmer-king) as a millennial promise of agrarian justice. - The publisher's foreword (signed by Shrikant Anant Umarikar, 2 October 2010) confirms this is a collected edition and situates the volume as a tribute on Joshi's birth anniversary. - The TOC lists 48 numbered chapters/essays organised under four thematic sections: Chintan (Reflection), Andolan (Movement), Sahkar (Cooperatives — cotton, milk, credit), and Karzabali (Debt-sacrifice, i.e. farmer suicides), plus an appendix. --- ## [Primary work] বাল্য বিবাহের দোষ URL: https://indianliberals.in/primary-works/balyo-bibaher-dosh-ishwar-chandra-vidyasagar/ ### Summary Written in Bengali, 'বাল্য বিবাহের দোষ' (Balya Bibaher Dosh — 'The Harms of Child Marriage') is a short polemical pamphlet by Ishwar Chandra Vidyasagar directed against the practice of marrying off young girls before they have reached physical or intellectual maturity. The pamphlet opens by identifying child marriage as a deep-rooted social ill in Bengali Hindu society and argues, on grounds of compassion and reason, that the practice inflicts severe bodily harm on young girls who are compelled to bear the physical demands of conjugal life and childbearing before their bodies are capable of sustaining them. Vidyasagar draws on observable suffering — premature widowhood, physical debility, and stunted lives — to make a case that the custom cannot be defended by appeal to tradition alone. The pamphlet's second movement turns to the social and intellectual consequences: child marriage keeps women in ignorance, denies them the possibility of education and self-development, and entrenches a subordinate status that the author regards as unjust.… ### Body ## Summary Written in Bengali, 'বাল্য বিবাহের দোষ' (Balya Bibaher Dosh — 'The Harms of Child Marriage') is a short polemical pamphlet by Ishwar Chandra Vidyasagar directed against the practice of marrying off young girls before they have reached physical or intellectual maturity. The pamphlet opens by identifying child marriage as a deep-rooted social ill in Bengali Hindu society and argues, on grounds of compassion and reason, that the practice inflicts severe bodily harm on young girls who are compelled to bear the physical demands of conjugal life and childbearing before their bodies are capable of sustaining them. Vidyasagar draws on observable suffering — premature widowhood, physical debility, and stunted lives — to make a case that the custom cannot be defended by appeal to tradition alone. The pamphlet's second movement turns to the social and intellectual consequences: child marriage keeps women in ignorance, denies them the possibility of education and self-development, and entrenches a subordinate status that the author regards as unjust. Vidyasagar appeals directly to educated men and reformers, arguing that those with the capacity to understand the harm bear a special responsibility to resist it. The pamphlet closes with a direct exhortation to abandon the practice in the interest of women's welfare and the health of society as a whole. No other named thinkers are cited; the argument is built entirely on moral reasoning and appeal to lived consequences. ## Key points - Child marriage (বাল্য বিবাহ) is identified as a pervasive harm in Bengali Hindu society, not merely a private misfortune. - The pamphlet argues that premature marriage ruins young girls' physical health by subjecting them to conjugal life and childbearing before their bodies are mature. - Early marriage leads to early widowhood, compounding the suffering of women who have barely emerged from childhood. - Tradition and scriptural sanction are explicitly rejected as sufficient defenses for a custom that causes manifest suffering. - Educated men and social reformers are addressed as having a particular moral duty to oppose child marriage. - The argument proceeds entirely from rational and compassionate premises, without citation of external authorities. - The pamphlet ends with a direct appeal to society to abolish the practice for the sake of women's welfare and social progress. --- ## [Primary work] BANKER AND CORPORATE CUSTOMER URL: https://indianliberals.in/primary-works/banker-and-corporate-customer-mr-r-k-talwar-june-27-1974/ ### Summary Delivered as the 1974 A. D. Shroff Memorial Lecture by R. K. Talwar, then Chairman of the State Bank of India, this short volume sets out how the relationship between banks and their large corporate borrowers had been transformed in the two decades since the 1953–54 Committee on Finance for the Private Sector (the Shroff Committee). Talwar opens with a careful tribute to A. D. Shroff — recovering Shroff as a pragmatist who founded the Forum of Free Enterprise but who had also served on the National Planning Committee and helped author the Bombay Plan of 1944 — and insists that Shroff's name was unfairly linked to a discredited laissez-faire doctrine. Against that backdrop Talwar argues that the banker can no longer be primarily a guarantor of security. With managing agency houses gone, banks nationalised, and top-management increasingly professionalised, the banker must assess the quality of management, the end-use of funds, the cash flows and the viability of operations. Bank credit, he insists, is not a substitute for capital; the comforting fiction that cash-credit and overdraft advances are short-term and repayable on demand is a 'myth'.… ### Body ## Summary Delivered as the 1974 A. D. Shroff Memorial Lecture by R. K. Talwar, then Chairman of the State Bank of India, this short volume sets out how the relationship between banks and their large corporate borrowers had been transformed in the two decades since the 1953–54 Committee on Finance for the Private Sector (the Shroff Committee). Talwar opens with a careful tribute to A. D. Shroff — recovering Shroff as a pragmatist who founded the Forum of Free Enterprise but who had also served on the National Planning Committee and helped author the Bombay Plan of 1944 — and insists that Shroff's name was unfairly linked to a discredited laissez-faire doctrine. Against that backdrop Talwar argues that the banker can no longer be primarily a guarantor of security. With managing agency houses gone, banks nationalised, and top-management increasingly professionalised, the banker must assess the quality of management, the end-use of funds, the cash flows and the viability of operations. Bank credit, he insists, is not a substitute for capital; the comforting fiction that cash-credit and overdraft advances are short-term and repayable on demand is a 'myth'. The banker must therefore involve himself more deeply in the corporate customer's affairs — calling for budgets, stipulating limits on dividends and inter-corporate investments, and even placing nominee directors — while channelling credit toward priority sectors and weaker sections in line with social policy. The lecture frames this new 'discipline' as a meeting ground rather than a clash of interests: the banker safeguards depositors and shareholders, detects danger signals, and takes responsibility for revival rather than abandoning the company to government takeover under the Industries (Development and Regulation) Act. Talwar closes by extending the same logic to the joint sector and to the auditor's role, calling for a tripartite cooperation between banker, customer and auditor in the interest of preserving the safety of bank funds and the profitability of enterprise. ## Key points - Talwar recovers A. D. Shroff as a pragmatist who served on the National Planning Committee and co-authored the Bombay Plan, rejecting the popular pairing of his name with a 19th-century laissez-faire doctrine. - He cites the 1953–54 Reserve Bank Committee on Finance for the Private Sector (the Shroff Committee) as the first organised attempt to assess the banking system's capacity to meet the targets of the First Plan. - Bank deposits had grown from roughly Rs. 850 crores at the time of the Shroff Committee to Rs. 10,000 crores by 1974, with more than half of total credit now going to large and medium industry. - Talwar argues that the disappearance of managing agency houses and the nationalisation of the big commercial banks have shifted the banker's emphasis from security to quality of management. - He insists bank credit is no substitute for capital, and that the supposed liquidity of cash-credit and overdraft advances 'repayable on demand' is a myth in practice. - The new credit discipline requires budgets, cash-flow data, end-use monitoring, conditions on dividends and inter-corporate investment, and occasionally nominee directors on boards. - Banks must also direct an increased share of credit to priority sectors and weaker sections, consistent with the socio-economic priorities of the post-nationalisation era. - Talwar prefers banker-led rehabilitation of sick units over takeover by Government under the Industries (Development and Regulation) Act, and calls for tripartite cooperation between banker, customer and auditor. --- ## [Primary work] Banks' Relationship with Customers - Evolving Perspectives URL: https://indianliberals.in/primary-works/banks-relationship-with-customers-evolving-perspectives-mrs-shyamala-gopinath-may-6-2008/ ### Summary Delivered as the 4th M. R. Pai Memorial Award lecture on 8 April 2008 in Mumbai, Shyamala Gopinath — then Deputy Governor of the Reserve Bank of India — uses her platform to map how the banker-customer relationship has been remade by India's post-1991 liberalisation. She opens by paying tribute to M. R. Pai's consumer-activism legacy and argues, with a Sanskrit aside that 'the world has always been the same,' that customer protection in financial services has only grown more urgent as deregulation, private-sector entry and technology have multiplied product choices and the surface area for grievance. The bulk of the booklet is a regulator's tour of the customer-protection architecture the RBI has built around the reformed banking system. Gopinath walks through the Banking Codes and Standards Board of India (BCSBI) as an autonomous self-regulatory body, the revised Banking Ombudsman Scheme that now covers credit-card complaints and unilateral service-charge hikes, and detailed RBI directions on deposit accounts, deceased-depositor settlements, KYC simplification for low-income customers, fair lending and credit-card practices, and curbs on excessive interest and charges.… ### Body ## Summary Delivered as the 4th M. R. Pai Memorial Award lecture on 8 April 2008 in Mumbai, Shyamala Gopinath — then Deputy Governor of the Reserve Bank of India — uses her platform to map how the banker-customer relationship has been remade by India's post-1991 liberalisation. She opens by paying tribute to M. R. Pai's consumer-activism legacy and argues, with a Sanskrit aside that 'the world has always been the same,' that customer protection in financial services has only grown more urgent as deregulation, private-sector entry and technology have multiplied product choices and the surface area for grievance. The bulk of the booklet is a regulator's tour of the customer-protection architecture the RBI has built around the reformed banking system. Gopinath walks through the Banking Codes and Standards Board of India (BCSBI) as an autonomous self-regulatory body, the revised Banking Ombudsman Scheme that now covers credit-card complaints and unilateral service-charge hikes, and detailed RBI directions on deposit accounts, deceased-depositor settlements, KYC simplification for low-income customers, fair lending and credit-card practices, and curbs on excessive interest and charges. She then turns to foreign exchange — where RBI has shifted from regulator to facilitator and resident individuals can now remit up to USD 200,000 per year — and to payment systems, flagging the Cheque Truncation System launched in the National Capital Region on 1 February 2008. The concluding sections frame currency management, financial education and financial inclusion as the next frontier: 'no-frills' accounts, simplified KYC, General Purpose Credit Cards, business-correspondent models, an Andhra Pradesh pension-and-employment payments pilot, and the proposed Financial Literacy and Counselling Centres. She closes by quoting Governor Y. V. Reddy's defence of banking as a 'trust-based relationship' and lists a six-point RBI approach — sensitising bank Boards, transparency and reasonable pricing, self-imposed codes, BCSBI compliance monitoring, stronger dispute resolution, lean regulation, and rationalising the RBI's own procedures — through which, she argues, a customer-oriented banking culture and 'democratization of the financial sector' can be built. ## Key points - Frames the lecture as a tribute to M. R. Pai's consumer-activism legacy and argues that liberalisation has made customer-protection issues more, not less, urgent. - Catalogues the regulatory infrastructure built since the early 1990s — BCSBI, revised Banking Ombudsman Scheme, fair-practices codes — as the answer to gaps thrown up by deregulation, private-sector entry and tech-driven service delivery. - Lays out detailed RBI prescriptions on deposit accounts (minimum-balance disclosure, NRO joint accounts, cheque-collection timelines) and on settlements involving deceased depositors, aimed at minimum-friction service. - Reviews lending-side guidance: Fair Practices Code for Lenders, reasons-in-writing for loan rejections, Comprehensive Credit Card Guidelines of November 2005, and a ceiling on usurious interest and charges on small personal loans. - Describes the foreign-exchange regime as a paradigm shift from regulator to facilitator — AD Category-II licensing, franchisee arrangements for money changers, and resident remittances up to USD 200,000 per financial year. - Highlights operational milestones: Cheque Truncation System launched in NCR on 1 February 2008, electronic-payments target of 50% of volume by March 2009, and the currency-chest and note-sorting infrastructure. - Treats financial inclusion as a 'missionary' RBI priority — 'no-frills' accounts, simplified KYC for low-income customers, General Purpose Credit Cards, business-correspondent and SHG-linked models, and a multilingual banking website in 13 Indian languages launched on 18 June 2007. - Closes with Governor Y. V. Reddy's framing of banking as a trust-based relationship and a six-point RBI approach centred on transparency, reasonableness, codes, BCSBI compliance, dispute resolution and lean regulation. --- ## [Primary work] Banks' Relationship with Customers - Evolving Perspectives URL: https://indianliberals.in/primary-works/banks-relationship-with-customers-mrs-shyamala-gopinath-may-6-2008/ ### Summary Delivered as the chief-guest address at the 4th M. R. Pai Memorial Award Function on 8 April 2008 in Mumbai and issued as a Forum of Free Enterprise booklet, Mrs. Shyamala Gopinath, then Deputy Governor of the Reserve Bank of India, surveys how the banker-customer relationship has been reshaped by the post-1991 liberalisation of Indian banking. She positions her remarks as a tribute to the late M. R. Pai, "the doyen of consumer activism in India," and argues that even in a deregulated environment dominated by private banks, new technology, and rapid product innovation, the consumer's position remains structurally unequal — what she calls an "information asymmetry, which renders the banker-customer relationship one of unequals." The address moves systematically through the policy architecture the RBI has built to redress that asymmetry: deregulation of deposit and lending rates, new private-sector licensing in 1993, the revised Banking Ombudsman Scheme, the establishment of the Banking Codes and Standards Board of India (BCSBI) as an autonomous self-regulator, and detailed customer-protection guidelines for deposit accounts, settlement of deceased depositors' claims, KYC, fair-pr… ### Body ## Summary Delivered as the chief-guest address at the 4th M. R. Pai Memorial Award Function on 8 April 2008 in Mumbai and issued as a Forum of Free Enterprise booklet, Mrs. Shyamala Gopinath, then Deputy Governor of the Reserve Bank of India, surveys how the banker-customer relationship has been reshaped by the post-1991 liberalisation of Indian banking. She positions her remarks as a tribute to the late M. R. Pai, "the doyen of consumer activism in India," and argues that even in a deregulated environment dominated by private banks, new technology, and rapid product innovation, the consumer's position remains structurally unequal — what she calls an "information asymmetry, which renders the banker-customer relationship one of unequals." The address moves systematically through the policy architecture the RBI has built to redress that asymmetry: deregulation of deposit and lending rates, new private-sector licensing in 1993, the revised Banking Ombudsman Scheme, the establishment of the Banking Codes and Standards Board of India (BCSBI) as an autonomous self-regulator, and detailed customer-protection guidelines for deposit accounts, settlement of deceased depositors' claims, KYC, fair-practices codes for lending, credit-card operations, foreign-exchange transactions for residents, and reasonableness of service charges. Gopinath stresses that self-regulation "would have been the ideal redressal," but heterogeneity of practice forced regulatory intervention. Later sections address payment-system modernisation (the Cheque Truncation System, RTGS/NEFT/ECS, the goal of electronic products reaching 50% of volume by March 2009), currency-management reforms via currency chests and Note Sorting Machines, and what she identifies as the "very significant aspect" of financial education and inclusion. She frames financial inclusion as a "missionary purpose," details the basic 'no-frills' account, simplified KYC for low-income groups, the General Credit Card, business correspondent/business facilitator models, and the proposed Financial Literacy and Counselling Centres, citing Y. V. Reddy's 2004-05 policy speech on the exclusionary tendencies of post-reform banking. She closes by quoting Reddy on banking as a "trust-based relationship" and committing the RBI to "democratization of the financial sector." ## Key points - The address is a tribute to M. R. Pai and is positioned within his tradition of consumer activism, with Gopinath insisting that consumer-protection issues are "as pressing as ever, even more so" in the post-reform economy. - Deregulation of deposit and lending rates and the 1993 round of private-bank licensing are framed as the defining features of the reforms, but they also generated new problems — service-quality gaps, unsolicited products, fine print, and customer financial unawareness. - Self-regulation by the industry is described as the preferred model, but the heterogeneity of practice forced RBI to intervene through the revised Banking Ombudsman Scheme and the creation of the Banking Codes and Standards Board of India (BCSBI), an autonomous self-regulatory body which by the date of the address had 70 member banks. - Detailed prudential and consumer-facing rules are listed across deposit accounts (minimum-balance disclosure, NRO joint accounts, cheque-collection policy), settlement of deceased depositors' claims (simplified procedures, threshold limits, indemnity replacing succession certificates), and KYC (simplified procedures for accounts below Rs 50,000 and small/low-income customers). - On lending the focus is on Fair Practices Code disclosure, comprehensive credit-card-operation guidelines (November 2005) covering DSAs, debt-collection, billing and confidentiality, and the August 2006 Working Group on reasonableness of bank charges. - Payment-system modernisation includes the Cheque Truncation System launched in the NCR in February 2008 (10-bank pilot), and a vision for electronic products to reach 50% of volume and 95% of value by March 2009; on currency management, RBI mandated Note Sorting Machines and the Clean Note Policy. - Financial inclusion is treated as a "missionary purpose" — no-frills accounts, simplified KYC, the General Credit Card (Rs 25,000 revolving credit at rural/semi-urban branches with deregulated interest), business correspondent/business facilitator models since January 2006, and a 13-language multilingual financial-education website launched June 2007. - The closing frame, quoting Y. V. Reddy, defines banking as a "trust-based relationship" undermined by stealth banking, negative-option marketing, misleading advertisements, and data-harvesting for cross-selling — leading to the verdict that information asymmetry makes the banker-customer relationship "one of unequals." --- ## [Primary work] Barons of Banking - Glimpses of Indian Banking History URL: https://indianliberals.in/primary-works/baron-of-banking-dr-y-v-reddy-february-3-2014/ ### Summary This Forum of Free Enterprise booklet, published on 03/Feb/2014, gathers the remarks delivered on 25 October 2013 at the Mumbai launch of Bakhtiar K. Dadabhoy's book 'Barons of Banking — Glimpses of Indian Banking History', a volume commissioned at the behest of the A. D. Shroff Memorial Trust. After an Introduction by Forum President Minoo R. Shroff, three substantial addresses follow: Dr. Y. V. Reddy (former RBI Governor and Chairman of the 14th Finance Commission), the economist S. S. Tarapore, and the chartered accountant Y. H. Malegam, who is also a Trustee of the A. D. Shroff Memorial Trust. The contributors converge on the book's framing of six 'barons' — Sir Sorabji Pochkhanawalla, Sir Purushottamdas Thakurdas and Sir C. D. Deshmukh from the pre-Independence era, and Raj Kumar Talwar, A. D. Shroff and H. T. Parekh from the post-Independence period — as institution-builders whose dharma shaped the Imperial Bank, the Reserve Bank of India, SBI, ICICI, IDBI and the Unit Trust of India.… ### Body ## Summary This Forum of Free Enterprise booklet, published on 03/Feb/2014, gathers the remarks delivered on 25 October 2013 at the Mumbai launch of Bakhtiar K. Dadabhoy's book 'Barons of Banking — Glimpses of Indian Banking History', a volume commissioned at the behest of the A. D. Shroff Memorial Trust. After an Introduction by Forum President Minoo R. Shroff, three substantial addresses follow: Dr. Y. V. Reddy (former RBI Governor and Chairman of the 14th Finance Commission), the economist S. S. Tarapore, and the chartered accountant Y. H. Malegam, who is also a Trustee of the A. D. Shroff Memorial Trust. The contributors converge on the book's framing of six 'barons' — Sir Sorabji Pochkhanawalla, Sir Purushottamdas Thakurdas and Sir C. D. Deshmukh from the pre-Independence era, and Raj Kumar Talwar, A. D. Shroff and H. T. Parekh from the post-Independence period — as institution-builders whose dharma shaped the Imperial Bank, the Reserve Bank of India, SBI, ICICI, IDBI and the Unit Trust of India. Across the three reflections, the booklet uses the lives of the barons to argue for central bank accountability and independence, for revisiting the Shroff Committee's verdict on private-sector discipline, for renewed faith in development banking, and for a future generation of bankers that is younger, more gender-balanced and geographically more diverse. The booklet is sponsored by the Shailesh Kapadia Memorial Trust. ## Essays ### Introduction *By Minoo R. Shroff, President, Forum of Free Enterprise* Minoo R. Shroff, President of the Forum of Free Enterprise, opens the booklet by setting the stage for the three reflections that follow. He describes how the book 'Barons of Banking' was conceptualised by Y. H. Malegam — modelled on Liaquat Ahmed's 'Lords of Finance' — and how the launch event drew Reddy, Tarapore and Malegam as principal speakers. Shroff summarises each speaker's argument: Malegam's insistence that history is critical assessment rather than mere narration, Tarapore's prediction that the book will become the locus classicus on Indian monetary and banking history, and Reddy's plea that the private sector adopt self-discipline along the lines of the Shroff Committee's findings. He records Reddy's suggestion that a future edition include women bankers and younger figures, and closes with the data point that six thousand copies sold within five weeks of launch. - Frames the booklet as a precis of three release-event addresses at the launch of Dadabhoy's 'Barons of Banking' on 25 October 2013. - Argues for history as critical assessment of past events against contemporary norms, not mere narration. - Records Tarapore's claim that the book will become 'the locus classicus on India's monetary and banking history'. - Quotes the Shroff Committee on the limits of finance supply absent an improved private-sector investment climate. - Notes Reddy's call for a future edition to include women bankers and younger leaders, and reports 6000 copies sold within five weeks. ### I. Dr. Y. V. Reddy *By Dr. Y. V. Reddy* Reddy frames Dadabhoy's volume as a study of how individuals and institutions co-produce one another, arguing that 'institutions in the ultimate analysis are creatures of individuals'. He moves through the book's chapters: the pre-RBI debates around the rupee ratio that Sir Purushottamdas Thakurdas's Note of Dissent crystallised; Sir Sorabji Pochkhanawalla's Central Bank of India and his doctrine that thrift-banking is the highest service to the public; the rocky founding of the RBI under Osborne Smith; the SBI under Talwar; the contested record of bank nationalisation; the design of public-sector governance compared to the standards expected of private banks ('the famous Talwar affair?'); the slow build-out of development banking through IDBI, ICICI and UTI; and Shroff Committee findings on the duties of the private sector. Reddy uses the book to defend an independent and accountable RBI, to query the road-map for foreign-bank entry, and to ask why Indian banks have failed where Indian corporates have succeeded as global competitors. He closes with a vision for the next generation of barons — more women, broader geography, more diverse social backgrounds, and returnees with global exposure — and warns that excessive risk-taking is 'a macho phenomenon' from which a gender-balanced banking sector would stabilise. - Reads the book as proof that institutions are 'creatures of individuals' and that the six barons embodied dharma within their roles. - Uses Pochkhanawalla's doctrine — 'A banker can render no higher service... than by teaching them thrift' — to anchor a defence of household savings over consumer credit. - Argues that central bank independence and accountability has gained renewed salience after the global crisis, and questions whether public-sector banks can be judged by the same governance standards as private banks (the 'Talwar affair'). - Defends the Shroff Committee's verdict that an improved climate for private-sector investment matters more than supply of finance, and presses industry associations to introspect. - Calls for a future cohort of bankers that is younger, more gender-balanced, more geographically diverse, and includes Indians returning from global financial centres. ### II. Mr. S. S. Tarapore *By Mr. S. S. Tarapore* Tarapore offers brief 'snippets' on individual barons rather than a continuous reading of the book. He celebrates Sir Sorabji Pochkhanawalla's single-handed setting up of an Indian bank — the Central Bank of India — against the dominance of the Exchange Banks; restates Sir Purushottamdas Thakurdas's Note of Dissent against the Hilton Young Commission's exchange-rate views as still relevant in 2013; recounts A. D. Shroff's commendation by Keynes at Bretton Woods and the nationalist sympathies that cost him the Deputy Governorship of RBI; recalls H. T. Parekh's book on the Indian money market as mandatory reading for students of money and banking; and reads the troubled, brief tenure of Sir Osborne Smith as the RBI's first Governor as the institution's foundational episode. Tarapore urges the RBI to publish, with external help if required, the work on the Osborne Smith episode and the Taylor Papers, declaring that the RBI should not remain influenced by the British Raj. - Pochkhanawalla's 'single-handed' founding of the Central Bank of India against Exchange Bank dominance is treated as the epic struggle of pre-Independence Indian banking. - Thakurdas's Note of Dissent on the rupee-ratio question is still useful — 'A rising exchange rate (appreciation) discourages exports and stimulates imports while a depreciation has the opposite effect'. - Frames A. D. Shroff as the economist commended by Keynes at Bretton Woods whose nationalist sympathies cost him the RBI Deputy Governorship. - Reads the Osborne Smith episode as crucial to the RBI's institutional unconscious and calls for the Taylor Papers and the in-house RBI work on Osborne Smith to be published. - Sees in Yezdi Malegam 'a modern Sir PT' sought after by RBI, government and the private sector. ### III. Mr. Y. H. Malegam *By Mr. Y. H. Malegam* Y. H. Malegam, Trustee of the A. D. Shroff Memorial Trust, delivers a brief endorsement of Dadabhoy's volume. He names the six legendary institution-builders the book profiles — Pochkhanawala, Thakurdas and Deshmukh from the pre-Independence era; Raj Kumar Talwar, A. D. Shroff and H. T. Parekh from the post-Independence period — and presents the book as a treatise on institution building that is also a record of personal struggle, recommending it to anyone interested in finance. - Identifies the book's six 'legendary institution builders' across pre- and post-Independence India. - Frames the volume as 'as much a treatise on institution building as about the personal struggles of the individuals contributing to the process'. - Argues that the contributions of these doyens are 'hardly known and appreciated' and that the book is a welcome attempt to bridge the gap. --- ## [Primary work] Basic Documents URL: https://indianliberals.in/primary-works/basic-documents-forum-of-free-enterprise-july-18-1956/ ### Summary This pamphlet collects the three foundational documents of the Forum of Free Enterprise: "A Manifesto" (originally published 18 July 1956, the day the Forum was constituted), a "Code of Conduct" for those working in the private sector, and a position paper titled "What the Forum stands for." The printing in hand was issued by M. R. Pai for the Forum on 10 July 1970, and it opens with frontispiece epigraphs from A. D. Shroff, the Founder-President, and from Eugene Black. The Manifesto is built as a cascade of twelve "WE BELIEVE" articles arguing that free enterprise is an integral part of Indian democratic life and that, since Independence, its case has been allowed to go by default under sustained attack. It defines the free enterpriser broadly — shopkeeper, farmer, artisan, worker, manager, doctor, lawyer alike — and defends the legitimate expectation of reward, while sharply distinguishing it from profiteering.… ### Body ## Summary This pamphlet collects the three foundational documents of the Forum of Free Enterprise: "A Manifesto" (originally published 18 July 1956, the day the Forum was constituted), a "Code of Conduct" for those working in the private sector, and a position paper titled "What the Forum stands for." The printing in hand was issued by M. R. Pai for the Forum on 10 July 1970, and it opens with frontispiece epigraphs from A. D. Shroff, the Founder-President, and from Eugene Black. The Manifesto is built as a cascade of twelve "WE BELIEVE" articles arguing that free enterprise is an integral part of Indian democratic life and that, since Independence, its case has been allowed to go by default under sustained attack. It defines the free enterpriser broadly — shopkeeper, farmer, artisan, worker, manager, doctor, lawyer alike — and defends the legitimate expectation of reward, while sharply distinguishing it from profiteering. Crucially, the Forum does not demand the retreat of the State: it accepts that "there is ample room for State enterprise to function alongside of Free Enterprise," warning instead against monopoly of any kind, whether state or private, and citing the displacement of normal trade channels by State trading as the kind of trend it most fears. The Code of Conduct then translates the manifesto into ethical obligations binding producers, employers, management, professional men, and citizens at large — including fair measure to consumers, fair wages and recognition of "stable and democratic trade unions" for workers, fair return commensurate with risk for investors, honest tax payment, and the explicit condemnation of hoarding, black-marketing and profiteering. The closing essay, "What the Forum stands for," stakes out a deliberately middle position: nineteenth-century laissez-faire is rejected as "dead as the dodo," and the Marxist route of nationalising the means of production is rejected as "outmoded in time and thoroughly discredited in practice." The Forum endorses the welfare-state objectives of a "socialistic pattern of society" and accepts the coexistence of State-controlled and Free Enterprise sectors, but draws the line at indefinite expansion of the State sector — singling out the nationalisation of life insurance, the introduction of State trading and the acquisition of the Kolar Gold Fields as examples of "unwarranted State intervention" that must be curbed. The pamphlet ends with a membership leaflet inviting industrialists, businessmen, professionals and students to join the Forum. ## Key points - Three-in-one charter pamphlet of the Forum of Free Enterprise: Manifesto (18 July 1956), Code of Conduct, and the essay "What the Forum stands for"; this printing is dated 10 July 1970 and was issued by M. R. Pai for the Forum. - The Manifesto's twelve "WE BELIEVE" articles frame free enterprise as integral to Indian democracy and as the natural condition of producers across every walk of life, from shopkeeper and artisan to manager and professional. - The Forum explicitly accepts a role for State enterprise alongside private enterprise, but treats monopoly of any kind — public or private — as the principal threat to a free and democratic social order. - The Code of Conduct imposes reciprocal duties: quality and fair measure for consumers, fair wages and recognition of trade unions for workers, fair return for investors, honest tax payment by all, and an explicit condemnation of hoarding, black-marketing and profiteering as "anti-social and evil." - "What the Forum stands for" stakes a self-consciously middle position: it rejects both 19th-century laissez-faire and the Marxist route of nationalising the means of production, while accepting the welfare-state objectives of the "socialistic pattern of society." - Specific contemporary State actions are flagged as unwarranted intervention: the nationalisation of life insurance, the introduction of State trading, and the acquisition of the Kolar Gold Fields — contrasted with the Bhakra-Nangal Dam, the Sindri Fertiliser Factory and the Aarey Milk Colony, which are praised as legitimate State achievements. - The frontispiece deliberately pairs A. D. Shroff's aphorism with Eugene Black's call to treat private enterprise as "an affirmative good," linking the Forum's voice to international classical-liberal currents. - The Forum presents itself as non-political and non-partisan, with its core mission defined as public education on the economic and moral case for voluntary enterprise. --- ## [Primary work] Basic Principles of Planning URL: https://indianliberals.in/primary-works/basic-principles-of-planning-j-h-doshi-september-18-1978/ ### Summary J. H. Doshi, then President of the Forum of Free Enterprise, delivered this address to the Forum's 22nd Annual General Meeting in Bombay on 18 September 1978 — roughly eighteen months after the 1977 ballot-box defeat of the Emergency-era Congress government. He opens by acknowledging that the new government has rightly shifted economic priorities (towards agriculture and rural development, towards employment-intensive technology, towards small and cottage industries, and towards decontrol of food zones and sugar), but argues that growth has nevertheless stalled because the Government has failed to grasp "the basic principles of planning, viz., strict priorities and its own limitations as an instrument." The state, he insists, possesses coercive power but is not omniscient; when it spreads itself thin over too many objectives, it wastes resources mobilised from "some of the poorest people in the world." Doshi's positive prescription is a sharply truncated state focused on a small set of irreducible public goods: defence, law and order, an efficient judicial system, and physical infrastructure — irrigation, flood control, rural roads, drinking water, primary education, and rural m… ### Body ## Summary J. H. Doshi, then President of the Forum of Free Enterprise, delivered this address to the Forum's 22nd Annual General Meeting in Bombay on 18 September 1978 — roughly eighteen months after the 1977 ballot-box defeat of the Emergency-era Congress government. He opens by acknowledging that the new government has rightly shifted economic priorities (towards agriculture and rural development, towards employment-intensive technology, towards small and cottage industries, and towards decontrol of food zones and sugar), but argues that growth has nevertheless stalled because the Government has failed to grasp "the basic principles of planning, viz., strict priorities and its own limitations as an instrument." The state, he insists, possesses coercive power but is not omniscient; when it spreads itself thin over too many objectives, it wastes resources mobilised from "some of the poorest people in the world." Doshi's positive prescription is a sharply truncated state focused on a small set of irreducible public goods: defence, law and order, an efficient judicial system, and physical infrastructure — irrigation, flood control, rural roads, drinking water, primary education, and rural marketing. He devotes substantial space to land and water mismanagement, quoting at length from B. B. Vohra's Indian Express piece of 11 September 1978 on deforestation, soil erosion, water-logging and the absence of basic field-level irrigation works, to argue that India's recurrent floods and famines are "virtually manmade." He attacks the Government's reflex of running bakeries and bus services while neglecting these basic duties. On industrial policy he defends large business houses against the "monopoly" label (the only true monopolies, he notes, are in the state sector), warns against artificially favouring small units without marketing support, and rejects the campaign against business families on the grounds that family-run firms also incubate professional managerial talent. He calls for the Government to sell 49% of its public-sector shareholdings to employees and the public, list them on stock exchanges, strip public-sector units of their monopoly character, and subject them to competition — and applauds the recent removal of the 10% public-sector price advantage. Two printed pages (10–11) covering, by inference, state-government finances and centre–state fiscal relations are missing from the scanned booklet; the rendered text resumes on printed page 12 with a closing passage attacking octroi as "the most obnoxious form of taxation" and warning that the real constraint is not mobilisation of resources but their proper utilisation. The address ends with an urgent appeal: "Our scarcest resource today is time. It is running out. So is the patience of the people." ## Key points - Frames the 1977 general election as a 'ballot box revolution' for Rule of Law, basic freedoms and relief from poverty after 30 years of independence. - Concedes that the post-Emergency Government has rightly reoriented investment towards agriculture, employment-generation, small and cottage industries, and decontrol — but argues implementation has been faulty and bureaucratic 'deadwood' has not been cleared. - Central thesis: the state is coercive but not omniscient, so planning must observe strict priorities — defence, law and order, judicial efficiency, irrigation, flood control, roads, drinking water, primary education, rural marketing — and stop spreading itself thin over low-priority items like 'making of bread, beverages, running buses'. - Quotes B. B. Vohra (Indian Express, 11 September 1978) at length: 90 million hectares suffering water erosion, 50 million from wind erosion, 20 million susceptible to flooding, 10 million canal-irrigated hectares producing at fractional capacity — making 60% of the land surface in urgent need of attention. - Defends 'big business' as pygmies by international standards, rejects the 'monopoly houses' label (true monopolies sit in the state sector), and warns that the campaign against business families curbs the rare entrepreneurial spirit needed for growth. - Proposes selling 49% of Public Sector shareholdings to employees and the public, listing them on stock exchanges, ending PSU monopoly status, and subjecting them to competition; welcomes the removal of the 10% PSU price advantage. - Identifies octroi as 'the most obnoxious form of taxation' and a marker of politicians' lack of seriousness about economic development. - Closes by reframing the development question as one of utilisation rather than mobilisation: 'Our scarcest resource today is time. It is running out. So is the patience of the people.' --- ## [Primary work] Black Money and Special Bearer Bonds Scheme URL: https://indianliberals.in/primary-works/black-money-and-special-beraer-bonds-scheme-d-r-pendse-vadilal-bagli/ ### Summary Black Money and Special Bearer Bonds Scheme bundles two short pieces issued by the Forum of Free Enterprise to oppose the Special Bearer Bonds Scheme of 1991 on classical-liberal grounds. Vadilal Dagli, editor of Commerce and chairman of the Dagli Committee on Controls and Subsidies, opens with the polemic 'Respectability for Black Money', casting the bonds as the fifth and most cynical official attempt since 1951 to absorb unaccounted money, and argues that the scheme grants the black-money baron a tax-free premium and statutory immunity while leaving the underlying flow untouched. Economist D. R. Pendse follows with 'The Problem of Black Money', a structured analytical essay that distinguishes illegal-source from tax-evaded legal-source income, surveys magnitude estimates and international comparisons, and begins a seven-point catalogue of underlying causes — controls, scarcities, high tax rates, changing social attitudes, interference with traditional values, low salaries of government servants, and election finance.… ### Body ## Summary Black Money and Special Bearer Bonds Scheme bundles two short pieces issued by the Forum of Free Enterprise to oppose the Special Bearer Bonds Scheme of 1991 on classical-liberal grounds. Vadilal Dagli, editor of Commerce and chairman of the Dagli Committee on Controls and Subsidies, opens with the polemic 'Respectability for Black Money', casting the bonds as the fifth and most cynical official attempt since 1951 to absorb unaccounted money, and argues that the scheme grants the black-money baron a tax-free premium and statutory immunity while leaving the underlying flow untouched. Economist D. R. Pendse follows with 'The Problem of Black Money', a structured analytical essay that distinguishes illegal-source from tax-evaded legal-source income, surveys magnitude estimates and international comparisons, and begins a seven-point catalogue of underlying causes — controls, scarcities, high tax rates, changing social attitudes, interference with traditional values, low salaries of government servants, and election finance. Together the pamphlet advances the Forum's standing argument that black money is a man-made consequence of controls, inflation and politicised election finance rather than an inevitable feature of Indian commerce. ## Essays ### Respectability for Black Money *By Vadilal Dagli* Vadilal Dagli treats the Special Bearer Bonds Scheme of 1991 as the fifth and most damaging in a sequence of official attempts to flush out black money since 1951, behind the voluntary disclosure schemes of 1951, 1965 and 1975 and the 1978 demonetisation. He charges that the new bonds — by promising a 20 per cent maturity premium free of income, wealth, gift and capital-gains tax, immunity from prosecution under the Indian Penal Code, and access to bank credit on the bonds as collateral — confer respectability on the very holders who had refused every earlier amnesty, chiefly the politicians, bureaucrats, professionals and bribe-takers who finance Indian public life. Citing Finance Minister R. Venkataraman's own earlier warning to Parliament against legitimising black money, Dagli asks whether 'the forces that finance political power in this country [are] more powerful than the Finance Minister'. He closes with a four-point national consensus: cap annual money-supply growth at 3–4 per cent above real national income; sunset all statutory controls older than three years unless re-justified to Parliament; legislate West-German and US-style public financing of recognised parties paired with audited annual party accounts; and cut the top marginal personal income tax rate from 66 to 50 per cent. None of these, he argues, is revolutionary — what is missing is 'a modicum of political honesty' from a ruling class whose foresight alone can curb black-money power and forestall 'political convulsions'. - Black money operates from the centre, not the periphery, of Indian economic and political life, making the black-money baron more powerful than Prime Minister, Chief Minister or industrialist. - The Special Bearer Bonds Scheme of 1991 is the fifth official attempt to surface unaccounted money — after voluntary disclosure schemes in 1951, 1965 and 1975, and the demonetisation of January 1978. - Unlike earlier schemes, the new bonds offer a tax-free 20 per cent maturity premium, no question on source, immunity from prosecution and bank credit against the bonds — thereby rewarding the holdouts of every previous amnesty. - The chief beneficiaries are politicians, officials and bribe-collecting professionals whose unaccounted funds had previously been parked in commodity hoarding or construction. - A four-point reform package: money-supply growth capped a few points above real income growth; automatic sunset of controls older than three years; legislated public financing of parties with audited accounts; and a 50 per cent ceiling on personal income tax. ### The Problem of Black Money *By D. R. Pendse* D. R. Pendse, in a piece reproduced from The Economic Times of 19–20 March 1981, presents black money as 'the cancer of the economy' and works through definition, magnitude, international comparison and underlying causes. He distinguishes illegal-source black money — pugri, smuggling, matka, foreign-exchange fiddles, bribes — from legal-source-but-undisclosed income earned by professionals such as lawyers and doctors, and rejects the common 'parallel economy' image: black and white money, he argues, are 'perpetually inter-locked' through transactions like under-receipted flat sales and lavish unrecorded hotel spending. Drawing on Dr D. K. Rangnekar's Wanchoo-committee formula (Rs. 7,500 crores, 6.8 per cent of national income) and other estimates running up to 22.7 per cent (Rs. 25,000 crores), Pendse settles on a working figure of about 10 per cent of national income, or Rs. 11,000 crores — equivalent to Rs. 1.25 crores per hour, and an annual flow exceeding the income of 125,000 honest top-slab taxpayers. He invokes Vito Tanzi on the United States ($135 bn in 1976, eight per cent of GNP), James Cook's 'The Invisible Enterprise', and observations on the UK and USSR to show the phenomenon is not uniquely Indian. He then opens a catalogue of underlying causes; the rendered pages cover seven — (1) controls, with Gandhiji's 1947 prayer-meeting warning and NCAER's Rs. 840-crore estimate from just six price-controlled commodities; (2) scarcities and abundance; (3) high tax rates, illustrated by a 97.75 per cent marginal rate driving an honest surgeon to evasion; (4) changing social attitudes; (5) interference with traditional values via socialist-style penal taxation; (6) low salaries of government servants, citing Nicholas Kaldor's 1956 Indian Tax Reform report; and (7) election laws and party finance, beginning with the Rs. 35,000-per-candidate ceiling in the 1980 Lok Sabha contest. The chunk ends mid-discussion of cause (7); the remedy section and any further argument lie in pages not rendered here. - Defines two categories of black money — illegal-source (smuggling, pugri, matka, bribes) and legal-source income concealed for tax purposes, with theft and robbery deliberately excluded. - Rejects the 'parallel economy' metaphor: black and white money are continuously inter-converted, e.g. under-receipted property sales or hotel bills paid in cash. - Working magnitude estimate: roughly 10 per cent of national income, about Rs. 11,000 crores — Rs. 1.25 crores per hour around the clock — exceeding the annual income of 125,000 honest top-slab taxpayers. - Cross-country comparisons drawn from Vito Tanzi on the US ($135 bn in 1976, ~8 per cent of GNP) and James Cook's 'The Invisible Enterprise'; UK debate on 'fraud Government ignores'; under-the-counter trade in the USSR. - Catalogues seven causes — controls, scarcities/abundance, high tax rates, changing social attitudes, interference with traditional values, low official salaries, and election finance — illustrated by NCAER's Rs. 840-crore estimate from six price-controlled commodities and a 97.75 per cent marginal-tax surgeon example. --- ## [Primary work] BLACK MONEY MENACE IN INDIA URL: https://indianliberals.in/primary-works/black-money-menace-in-india-time-for-action-k-v-m-pai-january-6-2009/ ### Summary Black Money Menace in India: Time for Action reproduces a 19 November 2008 Mangalore address by K. V. M. Pai, a former Chief Commissioner of Income Tax, delivered under the joint auspices of the Indian Liberal Group, the Mangalore branch of the Forum of Free Enterprise, and the Economics Research Centre. The booklet opens with a Forum preface that situates Pai's argument inside a long Forum tradition of writing on tax evasion — citing earlier booklets by B. R. Shenoy, B. P. Adarkar, Vadilal Dagli, D. R. Pendse and H. P. Ranina, and a 1999 contribution by N. Vittal — and an editorial note that flags Pai's most dramatic claim: that India tops the Swiss Bank Report's table of foreign deposits. Pai's address moves from diagnosis to remedy. He marshals the Swiss Bank Report 2006 to argue that India holds $1,456 billion — more than Russia, the UK, Ukraine and China combined — and contends that repatriation alone could clear India's foreign debt many times over.… ### Body ## Summary Black Money Menace in India: Time for Action reproduces a 19 November 2008 Mangalore address by K. V. M. Pai, a former Chief Commissioner of Income Tax, delivered under the joint auspices of the Indian Liberal Group, the Mangalore branch of the Forum of Free Enterprise, and the Economics Research Centre. The booklet opens with a Forum preface that situates Pai's argument inside a long Forum tradition of writing on tax evasion — citing earlier booklets by B. R. Shenoy, B. P. Adarkar, Vadilal Dagli, D. R. Pendse and H. P. Ranina, and a 1999 contribution by N. Vittal — and an editorial note that flags Pai's most dramatic claim: that India tops the Swiss Bank Report's table of foreign deposits. Pai's address moves from diagnosis to remedy. He marshals the Swiss Bank Report 2006 to argue that India holds $1,456 billion — more than Russia, the UK, Ukraine and China combined — and contends that repatriation alone could clear India's foreign debt many times over. He surveys the domestic terrain of evasion: real estate (where lower tax rates have cut, but not eliminated, the black portion of transactions), unaccounted gold and jewellery, benami investments, undisclosed stock-in-trade, share-market transactions, and Swiss and Dubai bank accounts uncovered in the Harshad Mehta searches. He chronicles successive disclosure schemes from 1965 to 1997 as low-yield expedients struck down by the Supreme Court, and reports Income Tax Department estimates that as much as 35% of personal and 43% of corporate tax collections in Mumbai go unpaid. The prescription is institutional. Drawing on the US Internal Revenue Service's Social Security Number-based computer system introduced by Commissioner Mortimer Caplin in 1963 — and noting comparable systems in Canada, the UK, Germany, Australia, Japan, Malaysia and Singapore — Pai urges that India's PAN be made the foundation of a comprehensive national computer system that captures bank, real-estate registration, share, post-office and corporate data, backed by stiff penalties, enlarged reopening windows for Swiss-account cases, adequate budget for the Income Tax Department, and parliamentary legislation. He frames the project against the Fiscal Responsibility and Budget Management Act of 2003 and the Central Government's persistent revenue deficits, closes with a 1962 warning from B. R. Shenoy that the only real remedy is to abandon the policies of statism, and calls for active citizenship demanding action from Parliament, judiciary, executive and civil society. ## Key points - Pai is a former Chief Commissioner of Income Tax, Mumbai; the text reproduces his 19 November 2008 Mangalore talk under the auspices of the Indian Liberal Group, Forum of Free Enterprise Mangalore, and the Economics Research Centre. - He uses the Swiss Bank Report 2006 to claim Indian deposits of $1,456 billion — more than Russia ($470bn), the UK ($390bn), Ukraine ($100bn) and China ($96bn) combined — and argues repatriation could clear India's foreign debt in 24 hours. - He catalogues the domestic vehicles of black money: real estate (80% of transactions in cash even after rate cuts), gold and jewellery (Rs. 80,000 crore of annual purchases largely outside bank channels), benami investments, undisclosed stock-in-trade, and share-market activity not cross-checked by the Income Tax Department against Mumbai Stock Exchange data. - Successive disclosure schemes from 1965 to 1997 produced negligible yields; the Supreme Court struck down further disclosure schemes and asked the government to concentrate on detection through investigation and search. - Income Tax Department studies of cases searched in Mumbai found roughly 35% of personal income-tax and 43% of corporate-tax collections going unreported; only 3 crore of an estimated 30 crore taxable assessees actually file returns. - His central recommendation is to adopt the US IRS computer system (introduced by Commissioner Caplin in 1963) using PAN as a Social Security-style identifier, with comprehensive data feeds from banks, registrars, post offices and exchanges, and similar systems in Canada, the UK, Germany, Australia, Japan, Malaysia and Singapore as further models. - He cites the Fiscal Responsibility and Budget Management Act 2003 and revenue deficits (2.6% of GDP in 2005-06 falling to a Budget Estimate of 1.0% in 2008-09, with the total internal debt projected at Rs. 29,39,238 crore by end-March 2009) to argue that legislation without effective execution is inadequate. - He closes by quoting B. R. Shenoy's 1962 warning that black money 'is well past the take off stage of development' and that the only remedy is 'abandonment of the policies of statism', appealing for citizen pressure on Parliament, judiciary, executive and civil society. --- ## [Primary work] Bogey of Socialism Hinders Rapid Economic Growth URL: https://indianliberals.in/primary-works/bogey-of-socialism-hinders-rapid-economic-growth-july-8-1962/ ### Summary This short Forum of Free Enterprise leaflet, reproduced from the Financial Express of 31 May 1962, is an anonymous polemic signed by "Critic" arguing that the Government of India's ideological attachment to socialism — what the title calls a "bogey" — is the principal obstacle to fulfilling the Third Five-Year Plan's most critical targets. The writer focuses on steel and the long-delayed Bokaro plant, contrasting the relatively contained problems at Rourkela and Durgapur (where West German and British suppliers are to blame for delays) with the much bigger failure at Bokaro, which lies "squarely" with the Central Government's refusal to consider any role for the private sector. The leaflet's central pragmatic claim is that Indian and foreign private capital — British, German, Japanese, Italian — are now ready and willing to build Bokaro on a profit-sharing basis for a limited number of years, and that the public-sector dogma keeping them out is incompatible with national economic interest.… ### Body ## Summary This short Forum of Free Enterprise leaflet, reproduced from the Financial Express of 31 May 1962, is an anonymous polemic signed by "Critic" arguing that the Government of India's ideological attachment to socialism — what the title calls a "bogey" — is the principal obstacle to fulfilling the Third Five-Year Plan's most critical targets. The writer focuses on steel and the long-delayed Bokaro plant, contrasting the relatively contained problems at Rourkela and Durgapur (where West German and British suppliers are to blame for delays) with the much bigger failure at Bokaro, which lies "squarely" with the Central Government's refusal to consider any role for the private sector. The leaflet's central pragmatic claim is that Indian and foreign private capital — British, German, Japanese, Italian — are now ready and willing to build Bokaro on a profit-sharing basis for a limited number of years, and that the public-sector dogma keeping them out is incompatible with national economic interest. The argument extends from steel to coal, power, and transport: official estimates concede shortages of half a million volts of electricity a year and a 10,000-crore ton-mile gap in transport capacity by 1966, and the writer warns that without private participation the Fourth Plan will begin "lame" and the 1972 target of 18 million tons of steel will remain "a pipe dream." The piece closes with a broader audit of Indian planning to date: the First Plan was "hardly a plan in the true sense of the word" but a conglomeration of projects; the Second Plan had better groundwork but collapsed into a foreign-exchange crisis because planners ignored international trade trends; and the Third Plan now risks the same fate unless dogmas give way to a "more realistic road." The leaflet ends with the standard Forum disclaimer that views expressed do not necessarily represent the Forum's, and the imprint of M. R. Pai as publisher. ## Key points - Written under the pseudonym "Critic" and reproduced from the Financial Express (31 May 1962), the leaflet treats steel as the test case for whether the Third Five-Year Plan can be saved. - Delays at Rourkela and Durgapur are blamed on West German and British suppliers, but the failure to start Bokaro is attributed "squarely" to the Central Government's refusal to admit private capital. - Foreign private interests — British, German, Japanese, Italian — are described as ready to build Bokaro on a profit-sharing basis for a limited number of years, contradicting the official line that only the State can deliver heavy industry. - Power and transport projections are used to extend the argument: a shortage of 4–5 million volts of electricity a year and a transport gap of around 7,000 crore ton-miles by 1966 are flagged as evidence that public-sector capacity alone cannot keep pace. - If the Third Plan misses its targets of 10 million tons of steel and 100 million tons of coal by 1966, the Fourth Plan begins "lame" and the 1972 target of 18 million tons of steel becomes "a pipe dream." - The leaflet retrospectively grades earlier plans: the First Plan was "hardly a plan," the Second Plan had better groundwork but underestimated population growth and foreign trade trends, leading to the foreign-exchange crisis. - The polemic is framed as a choice between "dogmas and shibboleths" and a "more realistic road" of mixed public–private development. - Published by M. R. Pai for the Forum of Free Enterprise from 235 Dr. Dadabhai Naoroji Road, Bombay, and printed at Karnatak Printing Press; dated 8 July 1962. --- ## [Primary work] BRIDGING (DIMINISHING) THE DIGITAL DIVIDE URL: https://indianliberals.in/primary-works/bridging-diminishing-the-digital-divide-by-dr-th-chowdhary-2002/ ### Summary Dr. T. H. Chowdary's lecture, delivered in Mumbai on 16 August 2002 under the joint auspices of the Forum of Free Enterprise and the Indian Merchants' Chamber, reframes the much-discussed 'digital divide' as a tractable policy problem rather than an indictment of technology. He opens with a long historical arc — from oral transmission to Gutenberg's moving type, from libraries to electronified information — to argue that prosperity has always tracked the diffusion (not the concentration) of knowledge. The 19th-century take-off in per-capita world GDP, charted from Angus Maddison's data, is for him the visible signature of widely accessible information and skill. He then walks through the cost economics of telecommunications: the dramatic fall in trans-Atlantic cable costs from 1956 to 1996, the collapse in storage costs per megabyte, the rise of optical-fibre and satellite backbones, and the convergence of voice, video, text and data on the Internet.… ### Body ## Summary Dr. T. H. Chowdary's lecture, delivered in Mumbai on 16 August 2002 under the joint auspices of the Forum of Free Enterprise and the Indian Merchants' Chamber, reframes the much-discussed 'digital divide' as a tractable policy problem rather than an indictment of technology. He opens with a long historical arc — from oral transmission to Gutenberg's moving type, from libraries to electronified information — to argue that prosperity has always tracked the diffusion (not the concentration) of knowledge. The 19th-century take-off in per-capita world GDP, charted from Angus Maddison's data, is for him the visible signature of widely accessible information and skill. He then walks through the cost economics of telecommunications: the dramatic fall in trans-Atlantic cable costs from 1956 to 1996, the collapse in storage costs per megabyte, the rise of optical-fibre and satellite backbones, and the convergence of voice, video, text and data on the Internet. From this he draws his central operational claim — 'carriage will be free but the content will be priced' — and argues that the Internet is best understood as a universal post office, broadcast studio, classroom, shop and clearing house rolled into one. On the divide itself, Chowdary distinguishes a populist usage (favoured, he says, by 'sociologists and politicians, especially the populist variety') from an engineer's diagnosis. India has already solved the 'missing link' problem for telephony — 450,000 of 650,000 villages now have a public telephone, and Very Small Aperture Terminals will pick up the remainder. The next step, he argues, is to upgrade Public Telephones into Public Tele-Information Centres (PTICs) staffed by a trained attendant — the village grocer, tailor or teacher — who can broker Internet access on behalf of illiterate or non-English-speaking users, much as he already does for the telephone. This 'attendant model' converts illiteracy and language from blocking constraints into routable problems. The final stretch is a classical-liberal indictment of Indian telecom policy circa 2002. Despite seven years of de-monopolisation, government has 'made the service costlier than what it could be' by piling on entrance fees, revenue share, cost-unrelated interconnection charges and inflated spectrum prices — extractions, he insists, that bear no relation to network costs and are simply revenue-grabs. He contrasts this with the IT Task Force's accepted recommendation that Internet service carry no such imposts, and with China, which adds 50 million mobile and 20 million fixed lines annually against India's 3 and 5 million. His prescription: scrap the punitive levies driven by the incumbent Bharat Sanchar, license-free entry for rural telephony and Internet kiosks, and a system designed so that the rise in per-capita income and the fall in telecom prices together make affordability rise non-linearly. ## Key points - Frames technology diffusion — not technology itself — as the historical driver of prosperity, citing literacy gains and Maddison's per-capita GDP series. - Uses falling TAT cable costs (1956–1996) and storage cost curves to argue that telecom carriage is approaching free, with pricing migrating to content. - Distinguishes the engineer's 'missing link' framing from the populist 'digital divide' framing, and proposes the latter is solvable with the same incrementalism that delivered village telephony. - Proposes upgrading rural Public Telephones into Public Tele-Information Centres (PTICs) operated by a trained local attendant who brokers Internet access for illiterate or non-English users. - Argues that India's main barrier to bridging the divide is not technology but government rent extraction — entrance fees, revenue share, interconnection charges, spectrum prices — that have no relation to network costs. - Cites China's lead in mobile, fixed and Internet uptake as proof that removing extraneous burdens unlocks non-linear growth in affordability. - Recommends a near-licence-free regime for rural Internet kiosks: registration with TRAI/DOT, technology compatibility as the only condition, and competition over revenue share with the network operator. --- ## [Primary work] Budget Highlights & GST – Where Are We Today? URL: https://indianliberals.in/primary-works/budget-highlights-gst-where-are-we-today-h-p-ranina-bhavana-doshi/ ### Summary This Forum of Free Enterprise booklet bundles two short policy commentaries on India's Interim Budget for FY 2019-20 and the state of the Goods and Services Tax regime, prefaced by an Editorial Introduction signed by Sunil S. Bhandare. The first article, by Forum President H. P. Ranina, surveys Finance Minister Piyush Goyal's Interim Budget and reads it as a 'road map' for a digitised, manufacturing-led economy that holds fiscal consolidation at 3.4% of GDP while extending social-security cover, direct income support to small farmers, and a conceptual Universal Basic Income. The second article, by indirect-tax expert Bhavna Doshi, takes stock of GST as a 'mixed bag' — what is amiss in compliance, rate design and federal coordination, and what the GST Council should change so the regime settles down faster. In the rendered pages only the Editorial Introduction (pp. 1–4) and the Ranina article (pp. 5 onward, seen through p. 18) appear; Doshi's article is not in this chunk and is summarised in this paragraph only by reference to the editor's preview, not extracted from her own text. ### Body ## Summary This Forum of Free Enterprise booklet bundles two short policy commentaries on India's Interim Budget for FY 2019-20 and the state of the Goods and Services Tax regime, prefaced by an Editorial Introduction signed by Sunil S. Bhandare. The first article, by Forum President H. P. Ranina, surveys Finance Minister Piyush Goyal's Interim Budget and reads it as a 'road map' for a digitised, manufacturing-led economy that holds fiscal consolidation at 3.4% of GDP while extending social-security cover, direct income support to small farmers, and a conceptual Universal Basic Income. The second article, by indirect-tax expert Bhavna Doshi, takes stock of GST as a 'mixed bag' — what is amiss in compliance, rate design and federal coordination, and what the GST Council should change so the regime settles down faster. In the rendered pages only the Editorial Introduction (pp. 1–4) and the Ranina article (pp. 5 onward, seen through p. 18) appear; Doshi's article is not in this chunk and is summarised in this paragraph only by reference to the editor's preview, not extracted from her own text. ## Essays ### Budget Highlights — Laying the Foundation for the Second Largest Economy *By HP Ranina* Ranina reads the Modi government's last budget before the 2019 general elections as a 'road map for transforming the Indian economy by ushering an era of digitization', anchored on holding the fiscal deficit at 3.4% of GDP despite a Rs. 75,000 crore outlay on direct income support to small and marginal farmers. He treats the Interim Budget as a coherent package: a first-of-its-kind social security floor for unorganised-sector workers (Rs. 3,000 per month pension from age 60), a conceptual Universal Basic Income riding on the Jan Dhan financial-inclusion drive, recapitalisation of public-sector banks under the Insolvency & Bankruptcy Code, expanded loan sanctions plus a 2% interest rebate for GST-registered MSMEs, and a 25% increase in the salaried standard deduction to Rs. 50,000. On the personal-tax front, Ranina walks through how the enhanced Section 87-A rebate can take individuals with actual incomes up to roughly Rs. 9 lakh per annum out of the tax net once 80-C, 80-CCD and Section 24 deductions are claimed, alongside liberalised withholding-tax thresholds, a two-house capital-gains rollover under Section 54, and full digitisation of the Income Tax Department with 24-hour return processing. He frames the Goods & Services Tax as 'the biggest taxation reform undertaken since India became independent', citing monthly GST revenue averaging Rs. 97,000 crore (Rs. 1 lakh crore breached in January 2019), a doubled small-business exemption from Rs. 20 lakh to Rs. 40 lakh, and a lower 6% composition rate for service providers up to Rs. 50 lakh turnover. The essay closes — in the rendered pages — on the Finance Minister's Vision 2030: physical and social infrastructure, digitisation of the economy, a pollution-free nation, rural industrialisation, and the start of further pillars cut off at p. 18. - Ranina reads the Interim Budget as a digitisation-and-manufacturing road map that holds the fiscal deficit at 3.4% of GDP even after the Rs. 75,000 crore farmer income-support outlay. - A new unorganised-sector pension scheme paying Rs. 3,000 per month from age 60, plus a conceptual Universal Basic Income delivered through Jan Dhan accounts, is framed as the first serious social-security floor for India's informal workforce. - Public-sector bank recapitalisation, Insolvency & Bankruptcy Code recoveries of roughly Rs. 3 lakh crore, and a 2% interest rebate for GST-registered small units are presented as a coherent financial-sector reform package. - On direct tax, the enlarged Section 87-A rebate combined with 80-C, 80-CCD and Section 24 deductions can take individuals with actual incomes up to about Rs. 9 lakh per annum to zero tax, while the salaried standard deduction rises 25% to Rs. 50,000. - GST is described as the biggest tax reform since Independence, with monthly revenue averaging Rs. 97,000 crore, crossing Rs. 1 lakh crore in January 2019, and the small-business exemption doubled from Rs. 20 lakh to Rs. 40 lakh. - Infrastructure claims — 27 km/day of highway construction, 4,087 Rkm of rail electrification, the Sagarmala port programme, and the India-hosted International Solar Alliance — are offered as evidence of the budget's continuity with prior years' physical-capex push. - The Vision 2030 framing is introduced (physical/social infrastructure, digitisation, pollution-free transport, rural industrialisation), but the full ten-pillar list is cut off at the end of this rendered chunk. --- ## [Primary work] Business-Government Understanding URL: https://indianliberals.in/primary-works/business-government-understanding-naval-h-mehta-february-14-1984/ ### Summary Naval H. Tata, then President of the Employers' Federation of India, delivers an address (originally given at the Mahratta Chamber of Commerce & Industries in Pune on 4 January 1984 and reissued as a Forum of Free Enterprise booklet on 14 February 1984) that diagnoses the strained, suspicion-laden relationship between Indian business and the Government three and a half decades after Independence. Tata argues that the working partnership the mixed economy presupposes has not materialised: businessmen complain of a cobweb of laws, unimaginative tax policies and licensing restrictions, while bureaucrats and public-sector heads in turn suspect industry of taking the Government for a ride.… ### Body ## Summary Naval H. Tata, then President of the Employers' Federation of India, delivers an address (originally given at the Mahratta Chamber of Commerce & Industries in Pune on 4 January 1984 and reissued as a Forum of Free Enterprise booklet on 14 February 1984) that diagnoses the strained, suspicion-laden relationship between Indian business and the Government three and a half decades after Independence. Tata argues that the working partnership the mixed economy presupposes has not materialised: businessmen complain of a cobweb of laws, unimaginative tax policies and licensing restrictions, while bureaucrats and public-sector heads in turn suspect industry of taking the Government for a ride. He calls on Chambers of Commerce to do their own soul-searching, to defend the legitimate role of large houses against populist campaigns, and to enlarge their membership base by absorbing small-scale units rather than letting an artificial small-vs-large quarrel be weaponised against the private sector as a whole. The second half of the booklet is a concrete eight-point reform list addressed to the Government: relax penalties on units producing above 'licensed capacity', permit orderly closures and mergers of sick enterprises instead of nationalising them, revisit a 'prices and incomes' policy under which 9.6% of the labour force (the organised sector) captures 33.9% of national income, prevent the unorganised cotton-textile sector from throttling organised mills, soften the Industries (Development and Regulation) Act and the MRTP Act, and revive the Air-India formula of 51:49 joint-sector partnerships. Tata closes by insisting that 'mixed economy' is not incompatible with 'free enterprise', invoking the U.S. 19th-century example and India's own Green Revolution in Punjab to show what flexibility and private initiative can achieve, and pleading for a meaningful dialogue in which the private sector is treated as a co-equal stakeholder in national policy-making rather than an object of suspicion. ## Key points - Frames the Chamber of Commerce's primary duty as activating a working relationship between Government and business, and treats the prevailing 'gulf of misunderstanding' as the central problem of post-Independence economic management. - Rejects the populist campaign against large business houses (the 'money bags' attack on apex chamber bodies) as misrepresentation, defending TELCO, Bajaj Auto and Birla/Mafatla/Tata-class firms as nurturers of small enterprise rather than predators. - Argues India's organised labour, far from being repressed, enjoys more freedom than in almost any Third World country; defends the National Security Act and Essential Services Act as analogous to U.S. enactments invoked by Reagan against the Air Controllers strike. - Presents an eight-item reform list: penalties on 'over-capacity' production, mandatory continuation of insolvent units, the bar on merger-based rescues, the prices-and-incomes distortion, fiscal favouritism toward the unorganised sector, the IDRA, the MRTP Act, and absence of joint-sector vehicles. - Cites L. K. Jha's 'Economic Strategy for 1980' as authoritative criticism of the IDRA, arguing that the Act 'regulate[s] development but does not encourage it' and that taxation has reached self-defeating levels. - Argues the organised sector, just 9.6% of the labour force (employers included), claims 33.9% of national income, calling for a prices-and-incomes review in the name of social justice to the rest of the population. - Recommends a revived Air-India-style joint sector — 51% private equity with management, 49% government with a reserve right to 2% more — as a way to align public and private capital without nationalisation. - Closes with a defence of the compatibility of 'mixed economy' and 'free enterprise', citing 19th-century Anglo-American agricultural prosperity and Punjab's Green Revolution as evidence that flexibility and private initiative produce miracles when government refrains from obstruction. --- ## [Primary work] CEMENT INDUSTRY IN INDIA URL: https://indianliberals.in/primary-works/cement-industry-in-india-n-dandekar-oct9-1956/ ### Summary Reprinted from The Times of India of 5 and 9 October 1956, this Forum of Free Enterprise pamphlet by N. Dandekar and L. Sawhny offers a stewardship audit of the Indian cement industry as a case study in what private capital, organised through the Associated Cement Companies Ltd., has achieved for the country. The authors trace the industry's history from the failed Madras factory of 1904 through the boom and bust of the inter-war years, the 1936 consolidation that produced ACC, and the post-Independence expansion that nearly trebled production between 1948 and 1955 — reaching 4.4 million tons in 1955 and beating the First Five-Year Plan target. The core argument is that the cement industry has met both the social and economic obligations set out in the Forum's Manifesto: producing a basic infrastructure good of comparable quality to the best in the world, holding the rise in cement prices to 179 per cent against an all-industry index of 288 per cent, employing 22,000 people on long-term contracts with welfare provision well above the norm, and distributing modest dividends (an average of 5.65 per cent on invested capital over ten years).… ### Body ## Summary Reprinted from The Times of India of 5 and 9 October 1956, this Forum of Free Enterprise pamphlet by N. Dandekar and L. Sawhny offers a stewardship audit of the Indian cement industry as a case study in what private capital, organised through the Associated Cement Companies Ltd., has achieved for the country. The authors trace the industry's history from the failed Madras factory of 1904 through the boom and bust of the inter-war years, the 1936 consolidation that produced ACC, and the post-Independence expansion that nearly trebled production between 1948 and 1955 — reaching 4.4 million tons in 1955 and beating the First Five-Year Plan target. The core argument is that the cement industry has met both the social and economic obligations set out in the Forum's Manifesto: producing a basic infrastructure good of comparable quality to the best in the world, holding the rise in cement prices to 179 per cent against an all-industry index of 288 per cent, employing 22,000 people on long-term contracts with welfare provision well above the norm, and distributing modest dividends (an average of 5.65 per cent on invested capital over ten years). The authors stress that cement is sold only at Government-approved prices, that 92 per cent of company capital is held by a broad cross-section of the public, and that some 70 per cent of the managing agents' commission flows back to Government as tax — pre-empting common critiques of "monopoly", "profiteering" and concentration of economic power. The closing pages defend the managing agency commission, point to ACC's voluntary expansion plan (to 5.2 million tons by 1961, requiring Rs. 30 crores of fresh capital without Government assistance), and emphasise that the industry has built up indigenous machinery-making capacity covering 70 per cent of cement-plant requirements, saving foreign exchange. The article culminates in an explicit ideological claim: that this stewardship is precisely how free enterprise works in a free democratic country, deserving — in the Forum's view — to be "increasingly encouraged and relied upon" rather than supplanted by the state. ## Key points - Frames the cement industry as a test case for the Forum of Free Enterprise's Manifesto claim that private enterprise meets both economic efficiency and social propriety standards. - Traces industry history: 1904 Madras failure, WWI revival, 1919-1924 over-expansion and losses, 1925 Indian Cement Manufacturers Association, 1936 merger producing Associated Cement Companies Ltd. - Documents that cement production rose from 15.42 lakh tons in 1946 to 44.16 lakh tons in 1955 — nearly trebling between 1948-1955 and exceeding First Five-Year Plan targets. - Argues quality is comparable to fully industrialised economies, tested by the Indian Standards Institution and the Government Test House at Alipore. - Highlights that cement is sold only at Government-approved prices since 1953, with the industry voluntarily reducing prices on at least one occasion; cement-price rise (179%) is roughly half the all-industry wholesale index increase (288%) since 1939. - Describes employment of 22,000 workers with welfare provisions — schools, hospitals, creches, canteens, gratuity, provident fund — emphasising that wages and benefits rose 39 per cent during 1948-49. - Counters the concentration-of-power critique with shareholding data: 28,747 holders of 100 shares or less (94.7%), with 43 private shareholders holding only 8% of issued stock. - Defends the managing agency commission by showing roughly 70% of agents' commission accrues to Government via taxation, and announces a Rs. 30 crore expansion plan to reach 5.2 million tons by 1961 without Government finance. --- ## [Primary work] Business and Public Welfare URL: https://indianliberals.in/primary-works/business-and-public-welfare-v-k-narasimhan-march-9-1970/ ### Summary This pamphlet collects the background papers prepared for the Forum of Free Enterprise's February 1970 convention on Business and Public Welfare, held in Bombay, together with the convention's seven-point Final Statement adopted on 2 February 1970. The four papers — by V. K. Narasimhan (Resident Editor, Indian Express), Mrs. Krpshna Basrur (Editor, Consumer Guidance Society Bulletin), C. G. Vaidya (Principal, Chintamanrao College of Commerce, Sangli) and Dr. Ramu Pandit (Former Executive Director, Fair Trade Practices Association) — examine, in turn, the constitutional protection of property and enterprise, the consumer's experience of adulteration and profiteering, the public-private balance in India's mixed economy, and the image of the businessman in post-Independence society. The volume's argumentative centre is a defensive but reformist case for private enterprise: it warns that doctrinaire socialism and the dilution of Articles 19(6) and 31 threaten the constitutional foundations of business, but it also insists that businessmen earn legitimacy through self-regulation, ethical conduct, consumer protection and visible social responsibility.… ### Body ## Summary This pamphlet collects the background papers prepared for the Forum of Free Enterprise's February 1970 convention on Business and Public Welfare, held in Bombay, together with the convention's seven-point Final Statement adopted on 2 February 1970. The four papers — by V. K. Narasimhan (Resident Editor, Indian Express), Mrs. Krpshna Basrur (Editor, Consumer Guidance Society Bulletin), C. G. Vaidya (Principal, Chintamanrao College of Commerce, Sangli) and Dr. Ramu Pandit (Former Executive Director, Fair Trade Practices Association) — examine, in turn, the constitutional protection of property and enterprise, the consumer's experience of adulteration and profiteering, the public-private balance in India's mixed economy, and the image of the businessman in post-Independence society. The volume's argumentative centre is a defensive but reformist case for private enterprise: it warns that doctrinaire socialism and the dilution of Articles 19(6) and 31 threaten the constitutional foundations of business, but it also insists that businessmen earn legitimacy through self-regulation, ethical conduct, consumer protection and visible social responsibility. The Final Statement codifies these positions into a programme calling for a competitive mixed economy, restraint on nationalisation, professionalised self-discipline by traders, a stronger consumer movement, and an end to the inefficiency of State enterprises. ## Essays ### I. Business and Fundamental Rights *By V. K. NARASIMHAN* V. K. Narasimhan opens the volume by warning that the third decade of the Indian Republic begins amid crises of economy and democracy, with the split in the ruling Congress encouraging a competitive 'doctrinaire radicalism' that menaces the mixed economy and the property guarantees of the Constitution. He revisits the 1951 First Amendment and the inserted Article 19(6), arguing that its open-ended licence for State monopolies has been abused to nationalise without genuine public-interest test or independent inquiry, and treats the recent nationalisation of fourteen major commercial banks by ordinance as a case in point. Narasimhan calls on businessmen — not in isolation, but together with all who value constitutional liberty — to fight for the retention of the Fundamental Right to property, to demand prior independent quasi-judicial inquiry before any nationalisation, and to insist on the Rule of Law against the 'gherao' tactics tolerated by State governments in West Bengal and Kerala. His closing warning is that without persistent vigilance and continual education of the public, the law of the jungle will displace the constitutional order. - Frames the early 1970s as a moment when the Congress split has unleashed 'doctrinaire radicalism' against the mixed economy. - Treats Article 19(6) (introduced by the 1951 First Amendment) as the constitutional opening that legitimised expanding State monopolies and recent bank nationalisation. - Endorses a Jana Sangh proposal that no enterprise be nationalised without prior judicial enquiry in which the affected business can present its case. - Calls on all who value constitutional freedoms — not businessmen alone — to defend the Fundamental Right to property. - Names 'gherao' tactics tolerated in West Bengal and Kerala as a direct threat to the Rule of Law and to businessmen. ### II. Business and Consumers *By Mrs. KRPSHNA BASRUR* Mrs. Krpshna Basrur surveys the consumer's predicament in a scarcity economy: adulteration, profiteering, hoarding, price manipulation and shoddy workmanship are entrenched in a 'seller's market' that places few costs on bad practice. She cites a Fair Trade Practices Association survey of Bombay housewives in which 50 per cent of tradesmen are believed to profiteer, a Union Directorate of Health finding that roughly 30 per cent of food samples are adulterated, and recent poisonings from contaminated edible oil and underground Vanaspati to argue that the harm is concrete and ongoing. Her remedy is twofold. Consumer associations must shift consumers from passive grievance to active 'demanding' of quality, written complaints and patronage of certified shops; and business associations — naming the FTPA, the Forum of Free Enterprise and the Indian Merchants' Chamber — must lead a programme of education and self-regulation for small traders, expand product certification (Agmark, ISI), publish prices and expiry dates, and create a standing joint body of business and consumer representatives to address scarcity and distribution problems together. - Diagnoses the Indian consumer's situation as a seller's market produced by chronic shortages and weak buyer organisation. - Reports an FTPA survey finding 50 per cent of Bombay tradesmen reputed to profiteer and a 30 per cent national adulteration rate from the Directorate of Health. - Argues for active 'demanding consumers' using written complaints, boycotts and preferential buying from certified sellers. - Identifies certification (Agmark, ISI) and labelling reforms — round weights, expiry dates, content disclosure — as a progressive path. - Calls on business associations (FTPA, Forum of Free Enterprise, Indian Merchants' Chamber) to lead trader education and a joint consumer-business standing body. ### III. Business and Government in India *By C. G. VAIDYA* C. G. Vaidya frames the business-government relationship as the central institutional question of India's mixed economy. He traces the post-1947 decision to adopt mixed-economy planning to the perceived inadequacy of private capital alone, and observes that since 1951 the public sector has expanded rapidly into almost all important areas of the economy — often, in his view, on insufficient grounds and without producing efficiency, returns or freedom from foreign technical dependence. The co-operative sector, in his reading, has functioned more as a Government movement than a genuine peoples' movement. His suggestions are characteristically Forum-of-Free-Enterprise in temper: neither sector alone can deliver development; the State should respect the spheres reserved for private enterprise by the 1956 Industrial Policy Resolution and refrain from fresh undertakings there unless absolutely necessary; the public sector should pause expansion in favour of consolidation and efficiency; the private sector must be assured conditions allowing it to develop fully; and high efficiency in all three sectors is the prerequisite for rapid economic development. - Locates the origin of India's mixed economy in the 1947 judgment that private enterprise alone could not bear the development burden. - Criticises post-1956 'socialist pattern' drift as taking over means of production without adequate justification or efficiency gains. - Observes that the co-operative sector has functioned more as a Government movement than a genuine peoples' movement. - Urges the State to honour reserved spheres for private enterprise under the 1956 Industrial Policy Resolution. - Recommends a pause on public-sector expansion in favour of consolidation, with the private sector given assured conditions to grow. ### IV. Business and Public Image *By Dr. RAMU PANDIT* Dr. Ramu Pandit asks why the Indian businessman, who had earned national goodwill in the pre-Independence period, is now widely seen as a 'profiteer', 'monopolist' and 'exploiter of the masses'. Part of the answer, he concedes, is real: businessmen have missed the public mood, tolerated bad apples in their own ranks, and failed to internalise their social obligations in a young democracy whose values are 'in a melting pot'. He contrasts this with Japan, where post-war industrialists exercised strict voluntary controls and rebuilt national esteem within twenty years. Pandit argues that the situation can only be reversed by visible self-discipline and long-term, ethically grounded political engagement by businessmen — not the expediency-driven, short-run lobbying that further taints them. Drawing on R. H. Tawney's notion of business as a profession bound by service rules, and on the U.S. Business Ethics Advisory Council's 1962 declaration that the moral standards governing ordinary life apply equally to business, he urges Indian business organisations (the FTPA, Better Business Bureau, Committee to Promote Social Responsibilities of Business) to set and enforce voluntary standards. The image of the businessman as 'Mahajan', he concludes, must be earned by accepting public values before the State imposes them. - Diagnoses a sharp post-Independence decline in the public image of the Indian businessman from 'Mahajan' to 'profiteer'. - Holds Japan as a counter-example of how voluntary post-war self-discipline rebuilt business goodwill within two decades. - Calls for long-term, principled engagement in public life by businessmen rather than expedient short-run lobbying. - Invokes R. H. Tawney and the U.S. Business Ethics Advisory Council to argue that business ethics are simply general ethics applied at work. - Treats voluntary, association-led standards as a middle path between unrestrained competition and direct governmental regulation. ### Business-and Public Welfare — Final Statement The Final Statement, adopted at the Forum's Bombay convention on 2 February 1970, distils the four background papers into a seven-point resolution. It affirms a competitive mixed economy as the right vehicle for public welfare in India and assigns private enterprise an important but conditional role: legitimacy is to be earned through self-discipline, transparent obligations to consumers, employees, shareholders and the public, and the inclusion of small traders in business associations. The statement names vigorous controls, the threat of nationalisation and the threat to the Fundamental Right to property as deterrents to private enterprise's contribution; calls for winning over the public — especially employees and consumers — by treating business as a 'sacred trust'; urges encouragement of a strong consumer movement; and refuses to accept the poor performance of State enterprises, whether the remedy be outright abolition, conversion to mixed units, or insistence on autonomy and sound business lines. - Endorses a competitive mixed economy as the suitable framework for public welfare in India. - Identifies vigorous controls, nationalisation threats and erosion of the property right as direct deterrents to private enterprise. - Demands self-discipline and explicit obligations to consumers, employees, shareholders and the public from business. - Calls for a strong consumer movement as both a check on business and a precondition for rapid economic development. - Refuses to accept the status quo on State enterprises: they must be abolished, converted to mixed units, or made autonomous and run on sound business lines. --- ## [Primary work] Central Economic Planning URL: https://indianliberals.in/primary-works/central-economic-planning-professor-milton-friedman-rose-friedman-september14-1982/ ### Summary This Forum of Free Enterprise booklet reproduces an excerpt from Milton and Rose Friedman's 'Free to Choose' (1979) under the title 'Central Economic Planning'. Drawing on the Friedmans' travels in underdeveloped countries, the text opens by contrasting the convictions of intellectuals — for whom central planning is 'the wave of the future' — with the empirical record. Wherever the state controls economic activity in detail, the authors argue, ordinary citizens remain in political fetters and material poverty, even as the state and its privileged classes prosper. The argument is built around a sequence of comparative case studies. East Germany versus West Germany shows what the free market and Ludwig Erhard's 1948 currency-and-price liberalisation produced relative to a walled, grey command economy. Russia, Yugoslavia, Israel, Egypt, and the Far Asian economies (Malaysia, Singapore, Korea, Taiwan, Hong Kong, Japan) are arrayed along a spectrum where reliance on markets correlates with prosperity and political freedom.… ### Body ## Summary This Forum of Free Enterprise booklet reproduces an excerpt from Milton and Rose Friedman's 'Free to Choose' (1979) under the title 'Central Economic Planning'. Drawing on the Friedmans' travels in underdeveloped countries, the text opens by contrasting the convictions of intellectuals — for whom central planning is 'the wave of the future' — with the empirical record. Wherever the state controls economic activity in detail, the authors argue, ordinary citizens remain in political fetters and material poverty, even as the state and its privileged classes prosper. The argument is built around a sequence of comparative case studies. East Germany versus West Germany shows what the free market and Ludwig Erhard's 1948 currency-and-price liberalisation produced relative to a walled, grey command economy. Russia, Yugoslavia, Israel, Egypt, and the Far Asian economies (Malaysia, Singapore, Korea, Taiwan, Hong Kong, Japan) are arrayed along a spectrum where reliance on markets correlates with prosperity and political freedom. The centrepiece is an extended comparison of post-Meiji Japan (1867 onward) with post-independence India (1947 onward): in nearly every initial condition India was the more favoured country, yet Japan dismantled feudalism and embraced voluntary cooperation while India embarked on Russian-type five-year plans, foreign-exchange controls, licensing of investment, and ubiquitous tariffs and quotas. The Friedmans dismiss cultural explanations for India's stagnation — fatalism, caste, sloth — by pointing to the entrepreneurial success of Indians in Africa, Malaysia, Hong Kong, Fiji, Panama, and Britain, and to the immigrant Chinese in Hong Kong. The decisive variable, they conclude, is not the attributes of the masses but the economic system: 'sloth and lack of enterprise flourish when hard work and the taking of risks are not rewarded.' A handloom-textile comparison drives the point home — Britain's nineteenth-century royal commission rejected exactly the protective subsidy India later adopted. The final section, 'Controls and Freedom', pivots to the United States, warning that even without formal central planning, fifty years of expanding government have cost both economic progress and human freedom. The authors invoke Abraham Lincoln's 'House Divided' speech to argue that a divided economy will fall to the collectivist side, and lay out a defence of economic freedom — to dispose of one's income, to enter occupations, to raise capital — that the rendered pages cut off mid-argument. ## Key points - Reproduces a chapter from Milton and Rose Friedman's 'Free to Choose' (1979) under FFE's imprint, framed by a publisher's introduction and an A. D. Shroff epigraph on free enterprise. - Contrasts the intellectual consensus favouring central planning with the empirical pattern: market-reliant economies show rising living standards and political freedom, whereas centrally planned economies (East Germany, Russia, Maoist China, India) show stagnation and repression. - Treats post-Meiji Japan (1867+) and independent India (1947+) as a near-controlled experiment: India had superior initial conditions yet adopted Russian-style five-year plans, while Japan relied on voluntary cooperation and free markets — with diametrically opposite outcomes. - Rejects cultural-fatalism explanations of Indian poverty by citing the entrepreneurial success of Indian diaspora communities in Africa, Hong Kong, Malaysia, Fiji, Panama, and Britain. - Uses the handloom-textile case to show that nineteenth-century Britain rejected the protectionist subsidy India later embraced — protection 'has meant expansion' of an industry that taxes the equally poor. - Argues that India's licensing, foreign-exchange controls, price controls, ubiquitous taxation, and self-sufficiency ideal produce smuggling, black markets, and a corrosion of respect for law, even as those evasions perform 'a valuable social service' by relieving central planning's rigidity. - Pivots to the United States in 'Controls and Freedom', warning that government's expansion has cost economic progress and human freedom, and invoking Lincoln's 'House Divided' speech to argue the mixed economy is unstable. - Sketches an account of economic freedom — choice over after-tax income, occupational entry, and capital formation — and contrasts ballot-box conformity with marketplace unanimity-without-conformity. --- ## [Primary work] CENTRAL PLANNING AND ECONOMIC DEVELOPMENT URL: https://indianliberals.in/primary-works/central-planning-prof-p-t-bauer-august-12-1970/ ### Summary Delivered on 2 February 1970 as the first Murarji J. Vaidya Memorial Lecture in Bombay and published by the Forum of Free Enterprise on 12 August 1970, this lecture by Peter Bauer of the London School of Economics is a frontal attack on the axiom — then dominant in development economics — that Comprehensive Central Planning, understood as state control of the composition of economic activity, is indispensable for the development of poor countries. Bauer takes Gunnar Myrdal as his principal target and treats the unanimity of governments, economists and aid agencies around this doctrine as itself the problem rather than evidence of its correctness, ranging Milton Friedman alongside himself as a dissenter and pointing to Japan, Hong Kong, Malaysia, Thailand and parts of West Africa as cases of substantial material progress achieved without comprehensive planning. The constructive core of the lecture argues that comprehensive planning does not augment resources but centralises and actually creates power, replacing the decentralised decisions of consumers and producers with the choices of civil servants and politicians.… ### Body ## Summary Delivered on 2 February 1970 as the first Murarji J. Vaidya Memorial Lecture in Bombay and published by the Forum of Free Enterprise on 12 August 1970, this lecture by Peter Bauer of the London School of Economics is a frontal attack on the axiom — then dominant in development economics — that Comprehensive Central Planning, understood as state control of the composition of economic activity, is indispensable for the development of poor countries. Bauer takes Gunnar Myrdal as his principal target and treats the unanimity of governments, economists and aid agencies around this doctrine as itself the problem rather than evidence of its correctness, ranging Milton Friedman alongside himself as a dissenter and pointing to Japan, Hong Kong, Malaysia, Thailand and parts of West Africa as cases of substantial material progress achieved without comprehensive planning. The constructive core of the lecture argues that comprehensive planning does not augment resources but centralises and actually creates power, replacing the decentralised decisions of consumers and producers with the choices of civil servants and politicians. Bauer raises three preliminary objections — that planning need not raise investment, that material progress is not the only end worth pursuing, and that people's faculties and attitudes (not natural resources) drive development — before arguing that planning reinforces authoritarian traditions in underdeveloped societies, suppresses self-reliance, sharpens political tension by making the state the prize for all groups, and is empirically associated nowhere with rising general living standards. In the closing pages Bauer narrows the legitimate tasks of government in poor countries to external relations, law and order, an honest monetary and fiscal framework, basic education and health, mass communications and agricultural extension — a list which, he insists, would already stretch the resources of the governments concerned. His indictment is that, in countries from Indonesia to Burma, regimes obsessed with planning the economy neglect even these elementary functions: 'The Governments seem anxious to plan and they are unable to govern,' more interested in controlling people's lives than in augmenting their resources or liberating their minds. ## Key points - Frames the lecture as an examination — and rejection — of the axiom that Comprehensive Central Planning is indispensable for the economic development of poor countries. - Identifies Gunnar Myrdal (Asian Drama; Development and Underdevelopment) as the most influential exponent of the planning-as-necessity thesis and names Milton Friedman as a dissenter. - Argues that comprehensive planning does not augment resources but centralises and creates power, transferring choice from consumers and producers to civil servants and politicians. - Cites Japan, Hong Kong, Malaysia, Thailand and parts of West Africa as instances of substantial 19th- and 20th-century material progress without comprehensive planning. - Insists that the determinants of material advance are people's faculties, attitudes, beliefs and institutions — not natural resources or capital injections — and that planning reinforces an authoritarian tradition that suppresses self-reliance, experimentation and the desire for change. - Holds that planning intensifies political tension because state power becomes the prize for which all groups must compete, with especially destabilising effects in multi-racial societies. - Claims empirically that the adoption of comprehensive planning has nowhere raised general living standards, and that Soviet-type economies retain frontier controls precisely because of widespread material and non-material disillusionment. - Defines a limited but demanding set of legitimate government tasks — external affairs, law and order, sound money and fiscal policy, basic institutional framework, basic health and education, mass communications, agricultural extension and national defence — and accuses planning regimes of neglecting these in order to control private life. --- ## [Primary work] CENTRAL SALES TAX AMENDMENTS URL: https://indianliberals.in/primary-works/central-sales-tax-amendments-by-nc-mehta/ ### Summary N. C. Mehta, an eminent Chartered Accountant and authority on Sales Tax Laws, walks practitioners through the Finance Act, 2002 amendments to the Central Sales Tax Act, 1956, which extended the Centre's sales-tax machinery to the 'deemed sales' brought into the constitutional definition by the 46th Amendment (clause 29A of article 366). The booklet explains how the levy now reaches indivisible works contracts, leases of goods, hire-purchase and instalment sales, supplies by clubs to members, and food served in hotels and restaurants, and traces the sequence of notifications under section 6(1) by which the Centre operationalised the charge from 11.5.2002. The core of Mehta's commentary is a sharp legal critique of a Maharashtra Commissioner's Circular (No. 15T of 2002) that treats the amendments as displacing earlier Supreme Court doctrine on the situs of lease of goods (the 20th Century Finance Corporation case) and as importing C.S.T. sections 3, 4 and 5 'with equal force' to the new deemed-sales transactions.… ### Body ## Summary N. C. Mehta, an eminent Chartered Accountant and authority on Sales Tax Laws, walks practitioners through the Finance Act, 2002 amendments to the Central Sales Tax Act, 1956, which extended the Centre's sales-tax machinery to the 'deemed sales' brought into the constitutional definition by the 46th Amendment (clause 29A of article 366). The booklet explains how the levy now reaches indivisible works contracts, leases of goods, hire-purchase and instalment sales, supplies by clubs to members, and food served in hotels and restaurants, and traces the sequence of notifications under section 6(1) by which the Centre operationalised the charge from 11.5.2002. The core of Mehta's commentary is a sharp legal critique of a Maharashtra Commissioner's Circular (No. 15T of 2002) that treats the amendments as displacing earlier Supreme Court doctrine on the situs of lease of goods (the 20th Century Finance Corporation case) and as importing C.S.T. sections 3, 4 and 5 'with equal force' to the new deemed-sales transactions. Drawing on the Builders Association, Gannon Dunkerley, Tata Iron and Steel, Bimal Chandra Banerjee and Orissa Cement Titaghur Paper Mills rulings, he argues that the Centre's intended levy on works contracts and leases has overlooked the legal architecture the Supreme Court has already laid down, and that subordinate rules or notifications cannot travel beyond the parent Act. Mehta then runs through the operational mechanics: applicability of sections 3 and 5 to inter-State works contracts, determination of contract price (he doubts the Gannon Dunkerley apportionment is workable for individual deemed sales of incorporated materials), rates of tax under section 8(1) against and without C-D forms, the consequences of omitting section 8(2A), the appropriate State under section 9 when materials move from multiple despatch points, the curtailment of States' exemption power under section 8(5) after the Land Acquisition Officer-cum-DSWO v. B. V. Reddy ruling, the new Form F regime under section 6A, the carve-out for Special Economic Zone dealers under section 8(6)–(8), and the amendment of section 15 on declared goods. He closes by noting that to fully equate 'deemed purchase' with deemed sale, the drafting of clause (29A) of article 366 — or section 2(g) of the Act — should have extended the cognate-expressions formula to 'buy' and 'purchase'. The pamphlet is framed by the Forum of Free Enterprise's standard furniture — an A. D. Shroff aphorism on free enterprise at the front, a Eugene Black quotation at the back, and a closing note on the Forum's mission — placing this technical tax exposition inside the Forum's long-running public-education project around economic policy. ## Key points - Explains that the 46th Constitutional Amendment (clause 29A of article 366, effective 2.2.1983) created a category of 'deemed sales' covering works contracts, leases, hire-purchase, instalment sales, club supplies and food service, which the Finance Act 2002 then brought within the Central Sales Tax Act, 1956 via amendments to sections 2(g), 6 and 7–13. - Critiques Maharashtra Sales Tax Commissioner's Circular No. 15T of 2002 for treating the amendment as superseding the Supreme Court's situs doctrine in 20th Century Finance Corporation v. State of Maharashtra and for asserting that C.S.T. sections 3, 4 and 5 apply 'with equal force' to the new deemed sales. - Argues, citing Builders Association (73 STC 370), Gannon Dunkerley (88 STC 204) and Tata Iron and Steel (11 STC 655), that inter-State sale of materials incorporated in an indivisible works contract can satisfy clause (a) but not clause (b) of section 3, since transfer of property occurs only after inter-State movement ends at the site of work. - Doubts that contract price for individual deemed sales of incorporated materials can be determined under the Gannon Dunkerley formula, and notes that Maharashtra's purchase/procurement-price proxy has not worked well in practice. - Walks through rates under section 8(1) for sales against and without C-D forms, the omission of section 8(2A), the appropriate-State rule under section 9 for despatches from multiple States, and the now-circumscribed State exemption power under section 8(5) following Land Acquisition Officer-cum-DSWO v. B. V. Reddy & Sons (2002 - 37 SCC 463). - Explains the amended Form F regime under section 6A: failure to furnish Form F makes a stock-transfer deemed an inter-State sale, but Bimal Chandra Banerjee (81 ITR 105) and Orissa Cement Titaghur Paper Mills (60 STC 213) limit how far rules and notifications can go beyond statutory power. - Sets out the new SEZ-dealer exemption built into section 8(6)–(8) of the Act for inter-State purchases of goods used in manufacture, processing, packaging and trading within a Special Economic Zone notified under the Central Excise Act, 1944. - Concludes that to equate 'deemed purchase' with deemed sale, the cognate-expressions formula in section 2(g) should also extend to the words 'buy' and 'purchase', a drafting gap the 2002 amendments leave open. --- ## [Primary work] Centre-State Relations: A Broad Perspective URL: https://indianliberals.in/primary-works/centre-state-relations-a-broad-perspective-n-a-palkhivala-october-15-1983/ ### Summary Nani A. Palkhivala's 1983 Forum of Free Enterprise pamphlet diagnoses what he treats as the central political pathology of the Indian Republic in the early 1980s: the steady erosion of the federal scheme of the Constitution by an over-mighty Centre. Framing India since 1950 as 'the largest experiment ever undertaken in human history in the art of democratic living', he insists that the Centre is 'nothing but the States in their federal garb', and that the injuries done to the States have been largely self-inflicted by their own representatives in Parliament. The Constitution, he argues, was deliberately written with a bias in favour of the Union, but that bias must operate within reasonable limits; the question of the pamphlet is what those limits are. The essay then surveys the principal mechanisms of over-centralisation.… ### Body ## Summary Nani A. Palkhivala's 1983 Forum of Free Enterprise pamphlet diagnoses what he treats as the central political pathology of the Indian Republic in the early 1980s: the steady erosion of the federal scheme of the Constitution by an over-mighty Centre. Framing India since 1950 as 'the largest experiment ever undertaken in human history in the art of democratic living', he insists that the Centre is 'nothing but the States in their federal garb', and that the injuries done to the States have been largely self-inflicted by their own representatives in Parliament. The Constitution, he argues, was deliberately written with a bias in favour of the Union, but that bias must operate within reasonable limits; the question of the pamphlet is what those limits are. The essay then surveys the principal mechanisms of over-centralisation. Under 'Industries and Economic Development', Palkhivala attacks the progressive enlargement of the Industries (Development and Regulation) Act, 1951, arguing that without any amendment to the Constitution at least 93 per cent of organised industry has been swallowed by the Union — an 'indefensible violation' that he ties directly to India's anaemic post-1950 growth in per capita income. Successive sections on President's Rule under article 356, the appointment and conduct of Governors, the reservation of State Bills for the President's assent, and the extra-constitutional ascendancy of the Planning Commission catalogue what Palkhivala presents as a systematic devaluation of constitutional institutions for partisan central ends. He draws repeatedly on the Rajamannar Committee, the Administrative Reforms Commission, and the observations of K. Santhanam and Dr K. Subba Rao to argue that the Planning Commission has created a 'vertical federation' displacing the horizontal scheme of the Constitution, and that 70 per cent of Centre-to-State grants now flow through discretionary article 282 channels rather than the Finance Commission. Under 'Financial Relations' Palkhivala makes the fiscal case that the existing tax-sharing regime is structurally unfair to the States: corporation tax is excluded from the divisible pool, surcharges on income-tax accrue exclusively to the Centre, and price rises on petroleum, steel, aluminium and coal have substituted for excise hikes in a way that, by one West Bengal Finance Minister's reckoning, deprived the States of about Rs 2,600 crores in their proper share. He calls for a legal — not discretionary — right to a larger share of central revenues, and for inter-State problems on electricity, water and rivers to be resolved by an active Inter-State Council under article 263 rather than by central intervention. The pamphlet closes with what Palkhivala calls 'The Only Lasting Solution': constitutional amendment is at best a last resort, and the real guarantee of federal fair dealing must come from constitutional morality, from the conscience of representatives, and from a vigorous and well-informed public opinion. Quoting Thomas Jefferson on the impossibility of an ignorant free nation and invoking the idea of 'Obedience to the Unenforceable', he warns that 'Dharma lives in the hearts of public men; when it dies there, no constitution, no law, no amendment, can save it.' ## Key points - Frames India's post-1950 republic as the largest democratic experiment in human history and argues the Constitution deliberately built a bounded pro-Centre bias that has been pushed beyond its reasonable limits. - Insists the Centre is constituted entirely by representatives the States themselves return to Parliament, making the injuries done to the States in significant part self-inflicted rather than the product of an alien power. - Attacks the progressive expansion of the Industries (Development and Regulation) Act, 1951 — without any constitutional amendment — as having transferred roughly 93% of organised industry to Union control and as a primary cause of India's low growth (only 56% real per-capita income gain since 1950). - Critiques the abuse of President's Rule under article 356 (imposed more than 70 times, on all States except Sikkim) and reviews the Rajamannar Committee's recommendation that the article be deleted or hedged with safeguards. - Argues that the office of Governor has been systematically devalued into something resembling the colonial Resident Agent, and endorses Rajamannar-style proposals — consultation with the State Cabinet on appointment, no second term, removal only for proved misbehaviour after Supreme Court inquiry, and binding Instruments of Instructions. - Treats the Planning Commission as an extra-constitutional body that, via non-statutory article 282 grants, has built a 'vertical federation' displacing the horizontal scheme of the Constitution; 70% of Centre-to-State grants are now discretionary rather than Finance-Commission-mandated. - Makes a detailed fiscal case that distribution of taxes and revenues is far too favourable to the Centre — corporation tax is excluded from the divisible pool, the Centre's 12½% income-tax surcharge accrues only to it, and price rises in central-sector goods have allegedly cost the States about Rs 2,600 crores of legitimate excise share. - Closes by arguing that constitutional amendment is the wrong instrument: the lasting remedy lies in constitutional morality, healthy unwritten conventions, the conscience of elected representatives, and a vigorous public opinion — 'Obedience to the Unenforceable' rather than further statute-craft. --- ## [Primary work] Challenge Before the Administration URL: https://indianliberals.in/primary-works/challenge-before-the-administration-c-s-seshadri-may-11-1980/ ### Summary Delivered as the A. D. Shroff Memorial Lecture in Bangalore on 30 October 1979 and published by the Forum of Free Enterprise, this booklet is C. S. Seshadri's diagnosis of what has gone wrong with Indian public administration after more than three decades of self-government. Drawing on his career as a senior civil servant (1943–1976), Seshadri argues that public administration is the indispensable infrastructure of national survival — whatever the constitutional form — and that India's administrative machinery, inherited from the colonial 'Steel Frame' system of area administrators, has deteriorated in both integrity and efficiency as ethical and moral standards in public life have declined. The lecture organises the diagnosis around three pressures on the system: the rising quantitative and qualitative demands of a more rights-conscious public; the shift of government into private-enterprise-like activities that has widened the opportunities for corruption; and chronic political instability.… ### Body ## Summary Delivered as the A. D. Shroff Memorial Lecture in Bangalore on 30 October 1979 and published by the Forum of Free Enterprise, this booklet is C. S. Seshadri's diagnosis of what has gone wrong with Indian public administration after more than three decades of self-government. Drawing on his career as a senior civil servant (1943–1976), Seshadri argues that public administration is the indispensable infrastructure of national survival — whatever the constitutional form — and that India's administrative machinery, inherited from the colonial 'Steel Frame' system of area administrators, has deteriorated in both integrity and efficiency as ethical and moral standards in public life have declined. The lecture organises the diagnosis around three pressures on the system: the rising quantitative and qualitative demands of a more rights-conscious public; the shift of government into private-enterprise-like activities that has widened the opportunities for corruption; and chronic political instability. Seshadri identifies three specific failures of the modern administration — delay and cumbersome procedure, widespread corruption at all levels, and an attitude of apathy and discourtesy toward the public — and traces them to the loss of status, integrity and competence that earlier attracted talented young people into the service. He laments that civil servants now resort to strikes, demonstrations and agitational methods, that ministers and secretaries are entangled in confused lines of control, and that audit and evaluation systems penalise initiative by treating every honest mistake as misconduct. His remedies are deliberately modest. He advocates strict enforcement of conduct rules and discipline; reorganisation of the secretariat and rationalisation of the minister–secretary structure; and adoption of modern management techniques — clear statement of objectives, delegation of powers, monitoring and evaluation — borrowed from the private sector, while warning that public administration is not identical to business management. The closing note is sobering: administrative efficiency can be improved, but moral and ethical standards in the administration ultimately depend on those of its political masters and, behind them, the people. ## Key points - Framed as the A. D. Shroff Memorial Lecture (Bangalore, 30 October 1979), published 11 May 1980 by the Forum of Free Enterprise; Seshadri speaks as a retired IAS officer with 33 years of service. - Central thesis: no nation, whatever its form of government, can progress without a competent and honest administrative set-up, and India's is in clear ethical and operational decline. - Three structural pressures on the administration: rising quantitative and rights-based demands from the public; the state's expansion into business-like activities (which widens scope for corruption); and political instability with general deterioration in moral standards. - Three concrete criticisms of the administration: undue delays and cumbersome procedures; widespread corruption at almost all levels; and an attitude of apathy and discourtesy in dealing with the public. - Historical narrative: India's administrative system descends from a colonial 'area administrator' model — the British 'Steel Frame' staffed by ICS-style generalist career managers — that survived Independence but has steadily lost its earlier status, integrity and inducement to talent. - Audit/evaluation pathology: Seshadri argues current systems punish honest errors and any deviation from rules, producing a culture of 'management by objections' rather than 'management by objectives' and inducing decision-paralysis. - He deplores the spread of strikes, demonstrations and agitational methods among government employees and even essential-services magistrates, and calls for strict enforcement of conduct and discipline rules. - Reform agenda is administrative rather than ideological: reorganise the secretariat and minister–secretary structure, modernise equipment and procedures, adopt private-sector-style management tools (objectives, delegation, monitoring), without pretending that public administration is identical to business management. - Closing frame: 'The challenge before the administration is an integral part of the challenge before the nation' — administrative reform is possible, but the moral standard of the bureaucracy ultimately reflects the moral standard of its political masters and electorate. --- ## [Primary work] The Challenge of Poverty URL: https://indianliberals.in/primary-works/challenge-of-povert-by-dr-otto-count-lambsdroff-and-swaminathan-a-aiyar-2002/ ### Summary This 2002 Forum of Free Enterprise booklet pairs two essays that mount a liberal case against welfare-bureaucracy and anti-globalisation responses to poverty. An editorial introduction by Minoo R. Shroff (FFE President, dated 31st October 2002) frames the volume in the context of the decade-long Indian debate on liberalisation and globalisation, and dedicates the work to FFE founder-president A. D. Shroff. The first essay, by German Free Democrat politician and former Federal Minister of Economics Otto Count Lambsdorff (then chairman of the Friedrich Naumann Stiftung), defends classical liberalism, private property rights, free trade and market-based delivery of services over transfer payments and welfare bureaucracies, leaning heavily on Hernando de Soto's argument that defective property rights are the principal cause of poverty in the global South; Lambsdorff also draws on the Fraser/FNF 'Economic Freedom of the World' index (originally masterminded by Milton Friedman) and Jagdish Bhagwati's defence of WTO-led liberalisation to argue that economic freedom correlates with growth, higher life expectancy, less corruption and lower income inequality. The second essay, by Swaminathan Anklesaria Aiyar (Consulting Editor, Economic Times), attacks the anti-globalisation narrative empirically. Conceding that incomes have plummeted in parts of the world since the Soviet collapse, Aiyar inverts the talking point: developing countries that seized the opportunities of globalisation (notably China and India, raising more than 350 million people above the poverty line in the 1990s) have outperformed those that did not, while Africa — which failed to integrate — has suffered the most; among ex-communist nations, Slovenia, Hungary and Estonia rebounded after integrating, while Uzbekistan, Kyrgyzstan, Belarus and Tajikistan, which remained state-dominated, fared worst. He distinguishes 'real' globalisation (policies, institutions, infrastructure and education that let ordinary people participate in the world economy) from a façade of open trade captured by elites (Mobutu's Zaire, post-Soviet Russia), and reads post-colonial autarky — Nehruvian self-sufficiency, central planning, one-party rule — as a category error that conflated 19th-century colonialism with 20th-century economic integration, indicting the collapse of India's world-trade share from 2.5% at independence to 0.4% by 1985 against the counter-example of Singapore and Taiwan. Both pieces were originally reproduced from the journal Liberal Times (issue 2/02). ### Body ## Summary This 2002 Forum of Free Enterprise booklet pairs two essays that mount a liberal case against welfare-bureaucracy and anti-globalisation responses to poverty. An editorial introduction by Minoo R. Shroff (FFE President, dated 31st October 2002) frames the volume in the context of the decade-long Indian debate on liberalisation and globalisation, and dedicates the work to FFE founder-president A. D. Shroff. The first essay, by German Free Democrat politician and former Federal Minister of Economics Otto Count Lambsdorff (then chairman of the Friedrich Naumann Stiftung), defends classical liberalism, private property rights, free trade and market-based delivery of services over transfer payments and welfare bureaucracies, leaning heavily on Hernando de Soto's argument that defective property rights are the principal cause of poverty in the global South. The second essay, by Swaminathan Anklesaria Aiyar (Consulting Editor, Economic Times), attacks the anti-globalisation narrative empirically: countries that integrated with the world economy (China, India, Slovenia, Hungary, Estonia) rose, while those that pursued autarky and one-party paternalism (much of Africa, Belarus, Uzbekistan, Nehruvian India before 1991) stagnated. Both pieces were originally reproduced from the journal Liberal Times (issue 2/02). ## Essays ### The Challenge of Poverty *By Dr. Otto Count Lambsdorff* Lambsdorff opens with the World Bank figure of 1.2 billion people living on under one dollar a day in 1998 and argues that mass poverty is the chief challenge facing liberals, because extreme poverty is itself a daily attack on the individual's right to life and forces the poor into patron-client relations that hollow out democracy. He then makes the classical-liberal case that property — not transfer payments — is the proper instrument of poverty alleviation: the state's role is to enable citizens, especially the poor, to acquire private property, rather than to confiscate property in order to finance entitlements that breed dependency and a bloated welfare bureaucracy. The essay advances three interlocking claims. First, market mechanisms such as voucher-funded private schooling and forced retirement saving outperform monopoly state delivery and avoid the welfare bureaucracy's overhead. Second, drawing on the Fraser/FNF 'Economic Freedom of the World' index (originally masterminded by Milton Friedman) and Jagdish Bhagwati's defence of WTO-led liberalisation, Lambsdorff argues that economic freedom correlates with growth, higher life expectancy, less corruption and lower income inequality — countries 'left behind' are victims of their own governments, not of free trade. Third, leaning on Hernando de Soto, he contends that the poor in the South already control assets (huts, plots, slum housing) but lack the legal instruments to transform them into capital; recognising and registering those property rights — not devising new transfer schemes — is the political task before liberals, even where collective tribal landholding is involved. - Mass poverty is framed as a liberal concern because it strips individuals of the freedom and political voice presupposed by a liberal society. - Private property rights are recast as a tool of poverty alleviation, not merely a safeguard of existing wealth — the state should help the poor acquire property rather than tax property to fund entitlements. - Welfare-bureaucratic delivery (state schools, state hospitals) is challenged in favour of voucher-style market access and forced-saving retirement accounts run by private agencies under regulation. - The 'Economic Freedom of the World' study (co-published by 52 institutes including FNF, originally devised by Milton Friedman) is cited as empirical evidence that liberal economies show less illiteracy, less corruption and higher life expectancy. - Hernando de Soto's argument is presented as central: the poor are excluded from legal-economic instruments that turn assets into capital, and an estimated US$9 trillion of 'dead' capital sits unused in the global South. - Recognising the poor's property rights is described as a political — not technical — task, requiring that bureaucrats and slumlords not elbow out the poor during the transition to a stable property regime. ### Globalisation and Poverty *By Swaminathan Anklesaria Aiyar* Aiyar opens by conceding the anti-globalisation talking point — that incomes have plummeted in parts of the world since the Soviet collapse — and then inverts it: the developing countries that seized the opportunities of globalisation (China and India most prominently, raising over 350 million people above the poverty line in a decade) have outperformed those that did not, while Africa, which failed to integrate, has suffered the most. Among ex-communist nations the same pattern holds: Slovenia, Hungary and Estonia rebounded after integrating, while Uzbekistan, Kyrgyzstan, Belarus and Tajikistan, which remained state-dominated, fared worst. He then defines globalisation against a common misreading: it is not merely the absence of tariffs (Mobutu's Zaire was nominally open but a personal fief), nor a high export ratio of natural resources captured by elites. True globalisation, on Aiyar's account, requires policies, institutions, infrastructure and education that let ordinary people participate in the world economy. The closing pages of the rendered chunk turn to the post-colonial story: leaders such as Nehru equated globalisation with 19th-century imperialism, opted for self-sufficiency, socialism and one-party rule, and produced over a hundred weak, aid-dependent states. India's share of world trade fell from 2.5 percent at independence to 0.4 percent by 1985 while Singapore and Taiwan, derided as neo-colonial puppets, grew rich. The chunk breaks off as Aiyar contrasts 19th-century colonising globalisation with 20th-century decolonising globalisation. - Reframes the empirical record: developing countries that integrated globally (notably China and India) lifted more than 350 million people above the poverty line in the 1990s, while non-integrators (mainly Africa) suffered most. - Distinguishes 'real' globalisation from a façade of open trade — exporting minerals under an elite-captured regime (Zaire, Russia) is not the same as enabling broad-based participation. - Argues that the chief problem of the worst-run countries is 'poverty caused by the lack of [globalisation]', not poverty caused by globalisation. - Reads post-colonial autarky — self-sufficiency, central planning, one-party rule — as a category error that conflated 19th-century colonialism with 20th-century economic integration. - Uses India's collapse in world-trade share (2.5% in 1947 to 0.4% by 1985) and the counter-example of Singapore and Taiwan as the indictment of Nehruvian self-sufficiency. --- ## [Primary work] Challenges Before Insurance Industry URL: https://indianliberals.in/primary-works/challenges-before-insurance-industry-r-n-jha/ ### Summary R. N. Jha, a former Executive Director of the Life Insurance Corporation of India, surveys the state of Indian insurance at the moment of its third turn — from the private-sector era of 1818–1955, through more than four decades under LIC and GIC monopoly, to the reopening of the market to domestic and foreign private insurers under the IRDA Act of 1999. The booklet reproduces a keynote delivered on 19 February 2000 at the A. D. Shroff Birth Centenary Celebrations, and frames liberalisation as a vindication of long-standing free-enterprise arguments: the public-sector insurers, Jha concedes, never met the customer-service, product-innovation or savings-mobilisation objectives that nationalisation had promised. The core of the address is a benchmarking of how shallow Indian insurance penetration remains by international comparison — $8 per-capita premium against Japan's $4,800, a 2% premium-to-GDP ratio against double-digit figures in developed economies, and only 25% of the insurable life population covered.… ### Body ## Summary R. N. Jha, a former Executive Director of the Life Insurance Corporation of India, surveys the state of Indian insurance at the moment of its third turn — from the private-sector era of 1818–1955, through more than four decades under LIC and GIC monopoly, to the reopening of the market to domestic and foreign private insurers under the IRDA Act of 1999. The booklet reproduces a keynote delivered on 19 February 2000 at the A. D. Shroff Birth Centenary Celebrations, and frames liberalisation as a vindication of long-standing free-enterprise arguments: the public-sector insurers, Jha concedes, never met the customer-service, product-innovation or savings-mobilisation objectives that nationalisation had promised. The core of the address is a benchmarking of how shallow Indian insurance penetration remains by international comparison — $8 per-capita premium against Japan's $4,800, a 2% premium-to-GDP ratio against double-digit figures in developed economies, and only 25% of the insurable life population covered. From this diagnosis Jha sets out a six-fold challenge map for new insurers (capital lock-up, talent shortages, building distribution against entrenched incumbents) and for LIC and GIC (overstaffing, surplus employees post-computerisation, complacent products, dissatisfied policyholders, the risk of corporate clients defecting). Jha then turns to the regulator. He warns that the Insurance Regulatory and Development Authority must balance its twin mandates — "no game is possible without rules but too many rules spoil the game" — by enforcing prudent solvency reserves and entry rules that are nonetheless light enough to encourage many new licensees, while pushing development into niche markets such as pensions, health, rural cover and insurance for weaker sections. He closes on a market-forecast note: a Rs. 3,44,000 crore potential market of which only 10% has been tapped, sustainable for around 100 insurers, with the customer — "the real king" of the liberalised market — as the ultimate arbiter of who survives. The booklet is bookended by an A. D. Shroff epigraph on free enterprise and a Eugene Black epigraph urging that private enterprise be embraced not as a necessary evil but as an affirmative good. ## Key points - Frames the 2000 reopening of insurance to private players as the completion of a full circle — private sector 1818–1955, public sector 1956–1999, private once again from 2000 — closing four decades of LIC/GIC monopoly. - Treats the very existence of the Malhotra Committee (1993) and the IRDA Act 1999 as a tacit official admission that public-sector insurers failed to extend cover to the needy. - Benchmarks Indian penetration as far below world norms: per-capita premium of only $8 vs. $4,800 in Japan; premium-to-GDP of 2% vs. 9–14% in OECD economies; only 0.3% share of the global insurance market. - Maps challenges separately for new entrants (Rs. 100 crore capital lock-up, no profit for five years, talent shortages, building distribution against established incumbents) and for the incumbents LIC and GIC (overstaffing, mass surrender risk, corporate-client defection, sub-standard service). - Argues the deepest challenge for LIC and GIC is not structural but cultural — a change of mindset 'from top to bottom' to become genuinely customer-responsive. - Calls on IRDA to balance regulation against development — easy entry rules, realistic solvency reserves, niche-market emphasis on pensions, health, rural and weaker-section cover. - Sizes the market at roughly Rs. 3,44,000 crore ($80 billion) of which only 10% has been tapped, growing 10% a year and capable of sustaining about 100 insurers. - Positions the liberalised consumer — 'the real king' — as the final arbiter, and treats the insurance life fund as a strategic pool for financing infrastructure. --- ## [Primary work] Challenges of Transforming India URL: https://indianliberals.in/primary-works/challenges-of-transforming-india-amitabh-kant/ ### Summary Delivered as the A. D. Shroff Memorial Lecture under the joint auspices of the Forum of Free Enterprise and the A. D. Shroff Memorial Trust in Mumbai on 14 October 2016, and published as a booklet in January 2017, this lecture by Amitabh Kant—then CEO of NITI Aayog—opens with a single diagnostic: India was growing at 7.5 per cent per annum, but nothing short of 9–10 per cent sustained over three decades would be enough to lift its entire population above the poverty line. At India's 2016 per capita income of US$1,580, the difference between 7 per cent and 10 per cent growth by 2032 was the difference between a per capita of US$4,000 and US$6,800—and, at the higher trajectory, the complete elimination of poverty. Kant structures his argument as a checklist of seven interlocking challenges. The first is the complexity of doing business: 1,159 redundant Acts had been scrapped, company registration reduced to a single day, import-export forms cut from 9–11 to three, and India's World Bank Ease of Doing Business ranking improved by 12 positions—yet state governments remained the real bottleneck, and a 100-point inter-state ranking exercise (Gujarat first, Andhra Pradesh second, Jharkhand and Chhattisgarh third and fourth) was being used to create competitive pressure. The second challenge is integration into global supply chains: FDI grew 53 per cent in two years while global FDI fell 16 per cent, making India the world's top FDI destination ahead of China. The third is the startup ecosystem: India already hosted roughly 19,000 startups with a market value of around US$75 billion, and Kant projected 100,000 startups and US$500 billion in market capitalisation by 2024–25. The fourth is innovation: some 1,400 multinational corporations had relocated global innovation centres to Bangalore and Hyderabad, with GE reducing its ECG machine cost from US$20,000 in the United States to US$1,800 in India and the per-test charge from US$20 to US$1. The fifth and most structurally urgent challenge is urbanisation. By 2050, roughly 700 million Indians will live in cities—requiring, in Kant's phrase, the creation of two-and-a-half Americas' worth of urban infrastructure. Because land, gas and water are now scarce, copying the American car-centric model would require four planet Earths; India must instead pioneer innovative, low-carbon urban forms. The sixth challenge is gender parity: women contributed only 17 per cent of GDP (compared to 39 per cent in Sub-Saharan Africa and 41 per cent globally), and closing that gap by 2030 would add US$700 billion to output. The seventh challenge is institutional modernisation: the Medical Council of India, the UGC and the AICTE were all designed for a 19th-century state and needed root-and-branch redesign. Kant closes by invoking the 14th-century poet Amir Khusrau to argue that no structural reform will suffice without a renewal of popular spirit and civic pride—the government cannot do Swachh Bharat alone if citizens keep creating filth. ### Body ## Summary Delivered as the A. D. Shroff Memorial Lecture under the joint auspices of the Forum of Free Enterprise and the A. D. Shroff Memorial Trust in Mumbai on 14 October 2016, and published as a booklet in January 2017, this lecture by Amitabh Kant—then CEO of NITI Aayog—opens with a single diagnostic: India was growing at 7.5 per cent per annum, but nothing short of 9–10 per cent sustained over three decades would be enough to lift its entire population above the poverty line. At India's 2016 per capita income of US$1,580, the difference between 7 per cent and 10 per cent growth by 2032 was the difference between a per capita of US$4,000 and US$6,800—and, at the higher trajectory, the complete elimination of poverty. Kant structures his argument as a checklist of seven interlocking challenges. The first is the complexity of doing business: 1,159 redundant Acts had been scrapped, company registration reduced to a single day, import-export forms cut from 9–11 to three, and India's World Bank Ease of Doing Business ranking improved by 12 positions—yet state governments remained the real bottleneck, and a 100-point inter-state ranking exercise (Gujarat first, Andhra Pradesh second, Jharkhand and Chhattisgarh third and fourth) was being used to create competitive pressure. The second challenge is integration into global supply chains: FDI grew 53 per cent in two years while global FDI fell 16 per cent, making India the world's top FDI destination ahead of China. The third is the startup ecosystem: India already hosted roughly 19,000 startups with a market value of around US$75 billion, and Kant projected 100,000 startups and US$500 billion in market capitalisation by 2024–25. The fourth is innovation: some 1,400 multinational corporations had relocated global innovation centres to Bangalore and Hyderabad, with GE reducing its ECG machine cost from US$20,000 in the United States to US$1,800 in India and the per-test charge from US$20 to US$1. The fifth and most structurally urgent challenge is urbanisation. By 2050, roughly 700 million Indians will live in cities—requiring, in Kant's phrase, the creation of two-and-a-half Americas' worth of urban infrastructure. Because land, gas and water are now scarce, copying the American car-centric model would require four planet Earths; India must instead pioneer innovative, low-carbon urban forms. The sixth challenge is gender parity: women contributed only 17 per cent of GDP (compared to 39 per cent in Sub-Saharan Africa and 41 per cent globally), and closing that gap by 2030 would add US$700 billion to output. The seventh challenge is institutional modernisation: the Medical Council of India, the UGC and the AICTE were all designed for a 19th-century state and needed root-and-branch redesign. Kant closes by invoking the 14th-century poet Amir Khusrau to argue that no structural reform will suffice without a renewal of popular spirit and civic pride—the government cannot do Swachh Bharat alone if citizens keep creating filth. ## Key points - India needs to sustain 9–10% annual GDP growth for three decades to eliminate poverty; at 7% growth, per capita income reaches US$4,000 by 2032, but at 10% it reaches US$6,800 and poverty is eliminated. - The Modi government scrapped 1,159 redundant Acts and reduced company registration to one day; state-level ease-of-doing-business rankings introduced competitive pressure, with Gujarat, Andhra Pradesh, Jharkhand and Chhattisgarh leading. - India's FDI grew 53% in two years (2014–16) while global FDI fell 16%, making India the world's top FDI destination; but Kant warns that no country has sustained long-term growth on foreign capital alone. - India had roughly 19,000 startups worth approximately US$75 billion in 2016; Kant projected growth to 100,000 startups worth US$500 billion by 2024–25, citing CultureAlley's 'Hello English' app (nine million learners) as illustration. - Approximately 1,400 multinationals relocated global innovation centres to Bangalore and Hyderabad; GE cut its ECG machine price from US$20,000 to US$1,800 in India and the per-test charge from US$20 to US$1. - Urbanisation is the most critical structural challenge: 700 million Indians will move to cities by 2050, requiring infrastructure equivalent to two-and-a-half Americas, but replicating the Western car-centric model would demand four planet Earths. - Women contribute only 17% of India's GDP versus a global average of 41%; achieving gender parity by 2030 would add US$700 billion to output. - India's labour laws, framed in the socialist 1970s, are incompatible with 9–10% growth; Kant calls factor-market reform (land and labour) essential, noting that productivity efficiency accounted for 79% of China's GDP growth during its high-growth decades. --- ## [Primary work] CHINESE COMPETITION URL: https://indianliberals.in/primary-works/chinese-competition-challenges-and-opportunities-by-dr-png-subramanian-2002/ ### Summary Delivered as the 36th A. D. Shroff Memorial Lecture in Mumbai on 23 October 2002 and circulated as a Forum of Free Enterprise booklet, P. N. G. Subramanian — a former Consul-General of India in Shanghai — sets out to explain to an Indian liberal audience how China engineered its sustained ascent and what that ascent now means for India. He locates the inflection point in December 1978, when the Party abandoned Class War for what he calls 'Economic Capitalism and Political Socialism', and traces an export-led, foreign-investment-rich growth model that has carried China to roughly $300 billion in exports, a savings rate above 40 per cent of GDP, and the world's tenth-largest trading nation status on the eve of full WTO accession. The lecture is candidly admiring of Chinese discipline without endorsing the political model. Subramanian repeatedly contrasts a 'ruthlessly efficient administration' that Indians are 'unaccustomed to', and a perspective-planning horizon stretching to 2030, with India's weaker absorptive capacity, looser governance, and shorter time-frames.… ### Body ## Summary Delivered as the 36th A. D. Shroff Memorial Lecture in Mumbai on 23 October 2002 and circulated as a Forum of Free Enterprise booklet, P. N. G. Subramanian — a former Consul-General of India in Shanghai — sets out to explain to an Indian liberal audience how China engineered its sustained ascent and what that ascent now means for India. He locates the inflection point in December 1978, when the Party abandoned Class War for what he calls 'Economic Capitalism and Political Socialism', and traces an export-led, foreign-investment-rich growth model that has carried China to roughly $300 billion in exports, a savings rate above 40 per cent of GDP, and the world's tenth-largest trading nation status on the eve of full WTO accession. The lecture is candidly admiring of Chinese discipline without endorsing the political model. Subramanian repeatedly contrasts a 'ruthlessly efficient administration' that Indians are 'unaccustomed to', and a perspective-planning horizon stretching to 2030, with India's weaker absorptive capacity, looser governance, and shorter time-frames. He surveys the running themes of Chinese reform — sick State-Owned Enterprises ('Iron Rice Bowl') threatening the public-sector banks, the macro-control balancing act between 8–9% growth and inflation control, ambitious industrial restructuring, the gradual dismantling of tariffs, quotas, import-licensing, import-substitution rules and services barriers under WTO commitments, and a still-vague but flexibly-enforced legal framework that nevertheless pulls in FDI 'to the detriment of other Asian developing countries, especially of India'. Having catalogued the advantages Chinese exporters enjoy (preferential tariffs, VAT rebates, Special Economic Zones, low MFN rates, anti-competitive cushions), the rendered pages turn to the implications for India: an impending MFA phase-out in 2005 that will deepen Chinese dominance in garments, textiles, electronics, footwear and toys; the centrality of human-resource development and innovation ('ten thousand Singapores'); and a call for an Action Plan covering Agriculture, Mineral Ores, Building Material, Chemicals, Pharmaceuticals, Computer Software, Hotel Industry, Professional Services and Audio-Visual sectors. The rendered chunk closes mid-Action-Plan with agriculture; the booklet's remaining four pages were not in the rendered set. ## Key points - Frames China's post-1978 trajectory as 'Economic Capitalism and Political Socialism' — an export-led, FDI-rich growth model that has roughly doubled China's per-capita income relative to India's since 1980. - Attributes Chinese competitiveness less to cheap labour than to a 'ruthlessly efficient administration', a 40%+ savings rate, $55 billion of annual FDI, and overseas Chinese diaspora investment. - Surveys structural strains in the Chinese model — over-90% SOE share in industrial output, NPAs threatening the major State banks, and the dilemma of liberalising the State sector without destabilising employment. - Walks through the post-WTO tariff, quota, licensing, import-substitution, services, and legal-framework reforms that will be required of China — and notes that even with reform, FDI flows are likely to keep diverting away from India. - Warns that the 2005 phase-out of the Multi-Fibre Arrangement will let China capture a much larger share of garments, textiles, electronics, footwear and toys, adversely affecting India's export niches. - Holds up Chinese perspective planning (5, 10, 15, 30-year horizons aimed at 'equalling the United States' by 2030) as a discipline India lacks. - Singles out education, R&D and human-resource policy as 'the crux' — citing Deng Xiaoping's 1976 prioritisation of education and Chinese ambitions to manufacture 'ten thousand Singapores'. - Closes (in the rendered pages) by proposing an Indian Action Plan in agriculture, minerals, building materials, chemicals, pharmaceuticals, software, hospitality, professional services and audio-visual — anchored to Premier Zhu Rongji's call to lift bilateral trade from $3 billion to $10 billion. --- ## [Primary work] CITIZENS' PARTICIPATION IN EFFECTIVE GOVERNANCE URL: https://indianliberals.in/primary-works/citizens-participation-in-effective-governance-shailesh-gandhi-january-4-2010/ ### Summary Citizens' Participation in Effective Governance is the text of the 21st Bhogilal Leherchand Memorial Lecture, delivered by then-Central Information Commissioner Shailesh Gandhi in Mumbai on 9 December 2009 and published in January 2010 by the Forum of Free Enterprise. Gandhi opens by reminding readers that the Constituent Assembly, elected by under two per cent of the population, nevertheless framed a Constitution that conceived of India as a vibrant democracy of equal citizens. The promise, he argues, has been hollowed out: India settled for an 'elective democracy' that observes the forms of elections while losing the substance of citizen sovereignty, with the result that ordinary people meet the State with suspicion, derision and anger. The bulk of the lecture is a granular indictment of administrative failure built from Gandhi's own files as Information Commissioner.… ### Body ## Summary Citizens' Participation in Effective Governance is the text of the 21st Bhogilal Leherchand Memorial Lecture, delivered by then-Central Information Commissioner Shailesh Gandhi in Mumbai on 9 December 2009 and published in January 2010 by the Forum of Free Enterprise. Gandhi opens by reminding readers that the Constituent Assembly, elected by under two per cent of the population, nevertheless framed a Constitution that conceived of India as a vibrant democracy of equal citizens. The promise, he argues, has been hollowed out: India settled for an 'elective democracy' that observes the forms of elections while losing the substance of citizen sovereignty, with the result that ordinary people meet the State with suspicion, derision and anger. The bulk of the lecture is a granular indictment of administrative failure built from Gandhi's own files as Information Commissioner. He recounts a child sodomised by a policeman whose case has crawled through two inquiries in two years, lays out the data on Mumbai's cognizable-crime registration (which fell from 32,000 to 40,000 even as the city's population rose by 50 per cent), and describes how 4,532 mobile towers in Delhi were erected with only 2,015 of them having the requisite permissions, with the State subsequently issuing an ordinance to shield such 'unauthorised developments' from action. He treats the IIT-issued stability certificates for towers, the Salwa Judum experiment in privatising policing, the abdication of the State in school and health provision, the 26/11 attacks, and the Liberhan Commission as different faces of one disease: a governance structure structurally incapable of delivery in any reasonable time. Gandhi's diagnosis is procedural and human-resources oriented rather than ideological. Files tied with string, paper-pushing systems designed by colonial administrators who distrusted Indian officers, an HR regime in which promotions are by seniority and good performance is not even recorded, an ageing IAS cadre, and a downsizing drive that has hollowed out staff while contractors flout labour law together produce an 'outmoded, demotivated, low-productivity' machine staffed at roughly one-twentieth the per-capita ratio of the United States. Quoting at length from the Maharashtra Government Servants Regulation of Transfers Act, 2005, he shows how laws on the books are routinely ignored — 144 IPS transfers in 13 months, every one of them violating the three-year tenure rule — until citizens use the Right to Information and sustained public pressure to force compliance. The closing pages set out his theory of change. Citizens, he insists, are the sovereigns who delegated power to the State in return for the rule of law; they cannot outsource the repair of governance to a political class they correctly mistrust. The Administrative Reforms Committee's recommendations should be debated and acted on, management professionals should redesign workflows and training, and ordinary citizens should engage their elected representatives 'at regular intervals' rather than only at the ballot box. Better governance, he concludes, is not a difficult goal but a boring one — and one that will not arrive without 'citizens' sustained pressure'. ## Key points - Frames democracy as resting on individual citizen sovereignty rather than mere periodic elections — India has an 'elective' democracy without the participatory substance the Constituent Assembly intended. - Uses RTI-derived case files (a child sodomised by a policeman; non-registration of cognizable crimes in Mumbai; 4,532 mobile towers in Delhi with only 2,015 having permissions) to show systemic non-delivery and active State protection of well-connected lawbreakers. - Treats 26/11 as a governance failure rather than an isolated terror event — evidence that the Indian State is structurally incapable of timely action. - Diagnoses the bureaucracy as a colonial machine the Republic never overhauled: paper-bound file procedures, seniority-based promotion, no recognition of good performance, arbitrary transfers as punishment, and an ageing IAS cadre worsened by indiscriminate downsizing. - Argues the State cannot privatise its core functions (policing, schooling, health) without alienating citizens — the Salwa Judum and the closure of Bombay Municipal Corporation schools are read as abdication. - Quotes the Maharashtra Government Servants Regulation of Transfers Act, 2005 to demonstrate that even well-drafted Indian laws lie inert until citizens force enforcement through RTI and public pressure. - Lays responsibility on citizens rather than the political class: a 'sustained campaign' lasting a few years could shift the administrative structure, but only if citizens act as sovereigns rather than spectators who curse politicians. --- ## [Primary work] Commercial Banks in India after Nationalisation URL: https://indianliberals.in/primary-works/commercial-bank-in-india-after-nationalisation-b-n-adarkar-may-26-1971/ ### Summary Delivered on 30th March 1971 as the second A. D. Shroff Memorial Lecture, B. N. Adarkar — a former Governor of the Reserve Bank of India and at the time Custodian of Central Bank of India Ltd. — uses the occasion to take stock of India's commercial banking system roughly eighteen months after the July 1969 nationalisation of fourteen major banks. Adarkar begins by paying homage to Shroff as a 'crusader for free enterprise' whose convictions in the potentialities of a free market economy he respected even where he did not share them, and then sets out his own brief: review the available data on the working of the nationalised banks and evaluate them against 'some general principles' of sound banking, while disclaiming that his views represent the Government, the RBI or Central Bank of India. The lecture's central proposition is that nationalisation has structurally strengthened the banking system — bringing the major nationalised banks into closer harmony with the State Bank group, raising the security of deposits, and creating a better environment for monetary and banking policy — but that the success of the experiment depends on preserving certain disciplines that pre‑date publ… ### Body ## Summary Delivered on 30th March 1971 as the second A. D. Shroff Memorial Lecture, B. N. Adarkar — a former Governor of the Reserve Bank of India and at the time Custodian of Central Bank of India Ltd. — uses the occasion to take stock of India's commercial banking system roughly eighteen months after the July 1969 nationalisation of fourteen major banks. Adarkar begins by paying homage to Shroff as a 'crusader for free enterprise' whose convictions in the potentialities of a free market economy he respected even where he did not share them, and then sets out his own brief: review the available data on the working of the nationalised banks and evaluate them against 'some general principles' of sound banking, while disclaiming that his views represent the Government, the RBI or Central Bank of India. The lecture's central proposition is that nationalisation has structurally strengthened the banking system — bringing the major nationalised banks into closer harmony with the State Bank group, raising the security of deposits, and creating a better environment for monetary and banking policy — but that the success of the experiment depends on preserving certain disciplines that pre‑date public ownership. Adarkar argues that banks 'do not cease to be commercial concerns even after nationalisation'; they remain trustees for community savings, and the return on the community's investment in their compensation bonds (carrying 5½ per cent interest) sets a minimum benchmark profitability cannot fall short of without becoming 'a drain on the Exchequer'. He pushes hard on the need to segregate genuinely social‑objective lending (rural branches, small loans, public‑policy directed credit) from a bank's normal operations so that managerial inefficiency cannot hide behind the language of social purpose. The second half of the rendered pages turns from financial discipline to monetary discipline. Adarkar warns that credit‑hungry economies suffering from chronic inflation must build credit planning into any scheme of credit restraint, since blanket restriction hurts genuine production as well as speculation. He defends RBI refinance as a legitimate bridge but criticises arrangements that let banks become indefinitely dependent on 'created money' from the Reserve Bank — particularly for food procurement and buffer‑stock financing — and endorses the penal‑rate mechanism for restraining excess borrowing. He closes the rendered portion by celebrating the achievements of branch expansion (6,633 offices at nationalisation rising to 8,598 by September 1970, of which 1,651 new offices opened in rural and semi‑urban areas) while noting that India still has only one bank office per 52,000 people versus 14,500 in Japan, 6,000 in the U.S. and 4,000 in the U.K., and warning that further branch expansion must be matched by stronger internal organisation, training, and Head Office control over branch managers. ## Key points - Frames the lecture as a tribute to A. D. Shroff and an evaluation of fourteen-bank nationalisation (July 1969) against general principles of sound banking, using data available roughly 18 months on. - Argues that nationalisation has strengthened the banking system structurally — closer co‑ordination with the State Bank group, better protected deposits, and a better environment for monetary policy. - Insists nationalised banks remain commercial concerns and trustees for community savings; the 5½ per cent interest on compensation bonds sets a minimum return on community capital that profits must, over a period of years, exceed. - Calls for management and accounting systems that segregate uneconomic, public‑policy‑driven operations (e.g. rural branches in undeveloped areas) from normal banking operations, so social objectives cannot be used to mask managerial inefficiency. - Distinguishes financial discipline from monetary discipline and argues that any credit‑restraint regime in a credit‑hungry, inflation‑prone economy must be paired with deposit mobilisation and rational credit planning across sectors. - Defends RBI refinance as legitimate bridge finance but warns against banks becoming indefinitely dependent on 'created money' — particularly for food procurement and buffer‑stock financing — and endorses the penal rate as a check on excessive borrowing. - Reports the rapid post‑nationalisation branch expansion (6,633 → 8,598 offices, with 1,651 new rural/semi‑urban branches in 14 months, an average of ~160 offices per month vs. 38 in the three preceding years). - Cautions that branch expansion must be matched by training of branch managers, choice of locations, inspection, and Head Office co‑ordination — over‑rapid expansion risks placing untrained managers in charge of a decentralised operation. --- ## [Primary work] Commercial Banks and Social Control URL: https://indianliberals.in/primary-works/commercial-banks-and-social-control-m-l-tanan-professor-gangadhar-gadgil-professor-c-k-dalaya-march-12-1968/ ### Summary Edited volume from 1968 by M. L. Tannan, Prof. Gangadhar Gadgil and Prof. (Mrs.) C. K. Dalaya, published by Forum of Free Enterprise (Bombay). Topic indicated by themes: banking, nationalisation, economic-policy, private-enterprise, public-sector. Full content not yet imported. --- ## [Primary work] COMMERCIAL BANKS IN INDIA—A PERFORMANCE REVIEW URL: https://indianliberals.in/primary-works/commercial-banks-in-india-a-performance-review-n-n-pai-july-14-1986/ ### Summary Delivered as the annual public lecture under the auspices of the A. D. Shroff Memorial Trust in Bombay on 26 May 1986 and released as a booklet on 14 July 1986, this address by N. N. Pai—former Chairman and Managing Director of the Industrial Development Bank of India and Corporation Bank—offers a forensic review of the seventeen years since the nationalisation of fourteen major commercial banks in July 1969. Pai's central argument is that the banking system had achieved genuinely remarkable quantitative gains in social outreach, but that the pace and direction of that expansion had simultaneously degraded quality, eroded profitability, and starved the medium and large industrial sector of working capital. The balance sheet of social banking is impressive on its own terms. Bank branches expanded from 8,262 in June 1969 to 51,385 by June 1985—more than 65 per cent of new offices opened in centres that had never before had a commercial bank—and the average population per branch fell from 65,000 to 13,300. Deposits grew from Rs. 3,599 crores to Rs. 76,373 crores; individual deposit accounts rose from 38 million to 145 million. Priority-sector lending exceeded its mandated 40 per cent target, reaching Rs. 17,971 crores or 41.3 per cent of total credit by March 1985—a forty-one-fold increase over June 1969. Credit to small-scale industries expanded from 2.25 lakh units financed in December 1974 to 14.55 lakh units by 1984, with advances rising from Rs. 1,017 crores to Rs. 6,537 crores. Agricultural advances stood at Rs. 8,932 crores in December 1985, though the recovery rate was only around 50 per cent of demand. Against these achievements Pai sets a long indictment. The share of medium and large industry in gross bank credit collapsed from roughly 67 per cent in 1969 to barely 34 per cent by 1985—even though this sector is, in Pai's analysis, the lead dynamic force of any economy. Statutory Liquidity Ratio and Cash Reserve requirements locked up 56 per cent of new bank resources at below-cost yields, leaving only about 20 per cent of deposits available for reasonably profitable deployment; the net result was that on every Rs. 100 of deposits mobilised, the banking system lost almost a rupee. Industrial sickness worsened sharply: 93,371 sick units (545 large, 1,281 medium, 91,545 small) had Rs. 3,638 crores of bank credit locked up in them by December 1984—a 124 per cent increase over the Rs. 1,623 crores blocked in 1979, representing 8 per cent of total bank credit. Pai attributes sickness primarily to absent pre-loan appraisal, diversion of short-term credit to long-term assets, and lack of post-disbursement monitoring, and calls for banks to establish a professional cadre for 'turn-around missions'. On human resources, he argues that the banking sector's 6.42 lakh employees should be trained through dedicated university banking degrees rather than re-educated on the desk after hiring. He closes with a cautious appraisal of the Sukhamoy Chakravarty Committee's recommendations on interest-rate liberalisation, endorsing the linking of lending and deposit rates to long-term inflation but warning that rigid linkage would impair banks' ability to price out speculative borrowers during short bouts of high inflation. ### Body ## Summary Delivered as the annual public lecture under the auspices of the A. D. Shroff Memorial Trust in Bombay on 26 May 1986 and released as a booklet on 14 July 1986, this address by N. N. Pai—former Chairman and Managing Director of the Industrial Development Bank of India and Corporation Bank—offers a forensic review of the seventeen years since the nationalisation of fourteen major commercial banks in July 1969. Pai's central argument is that the banking system had achieved genuinely remarkable quantitative gains in social outreach, but that the pace and direction of that expansion had simultaneously degraded quality, eroded profitability, and starved the medium and large industrial sector of working capital. The balance sheet of social banking is impressive on its own terms. Bank branches expanded from 8,262 in June 1969 to 51,385 by June 1985—more than 65 per cent of new offices opened in centres that had never before had a commercial bank—and the average population per branch fell from 65,000 to 13,300. Deposits grew from Rs. 3,599 crores to Rs. 76,373 crores; individual deposit accounts rose from 38 million to 145 million. Priority-sector lending exceeded its mandated 40 per cent target, reaching Rs. 17,971 crores or 41.3 per cent of total credit by March 1985—a forty-one-fold increase over June 1969. Credit to small-scale industries expanded from 2.25 lakh units financed in December 1974 to 14.55 lakh units by 1984, with advances rising from Rs. 1,017 crores to Rs. 6,537 crores. Agricultural advances stood at Rs. 8,932 crores in December 1985, though the recovery rate was only around 50 per cent of demand. Against these achievements Pai sets a long indictment. The share of medium and large industry in gross bank credit collapsed from roughly 67 per cent in 1969 to barely 34 per cent by 1985—even though this sector is, in Pai's analysis, the lead dynamic force of any economy. Statutory Liquidity Ratio and Cash Reserve requirements locked up 56 per cent of new bank resources at below-cost yields, leaving only about 20 per cent of deposits available for reasonably profitable deployment; the net result was that on every Rs. 100 of deposits mobilised, the banking system lost almost a rupee. Industrial sickness worsened sharply: 93,371 sick units (545 large, 1,281 medium, 91,545 small) had Rs. 3,638 crores of bank credit locked up in them by December 1984—a 124 per cent increase over the Rs. 1,623 crores blocked in 1979, representing 8 per cent of total bank credit. Pai attributes sickness primarily to absent pre-loan appraisal, diversion of short-term credit to long-term assets, and lack of post-disbursement monitoring, and calls for banks to establish a professional cadre for 'turn-around missions'. On human resources, he argues that the banking sector's 6.42 lakh employees should be trained through dedicated university banking degrees rather than re-educated on the desk after hiring. He closes with a cautious appraisal of the Sukhamoy Chakravarty Committee's recommendations on interest-rate liberalisation, endorsing the linking of lending and deposit rates to long-term inflation but warning that rigid linkage would impair banks' ability to price out speculative borrowers during short bouts of high inflation. ## Key points - Bank branches grew from 8,262 in June 1969 to 51,385 by June 1985—over 65% in previously unbanked centres—cutting the average population per branch from 65,000 to 13,300, an expansion Pai says no other country could match. - Priority-sector lending surpassed its 40% target, reaching Rs. 17,971 crores or 41.3% of total credit by March 1985—a forty-one-fold increase since June 1969. - The share of medium and large industry in gross bank credit collapsed from about 67% in 1969 to barely 34% by 1985; industrial output growth has never regained its Third Plan (1961–66) pace since this reorientation. - By December 1984, 93,371 sick industrial units had Rs. 3,638 crores of bank credit locked up in them—8% of total bank credit—a 124% increase over the Rs. 1,623 crores blocked in 1979. - Statutory Liquidity Ratio and Cash Reserve requirements pre-empted 56% of new bank resources at below-cost yields; only about 20% of deposits could be deployed profitably, causing the banking system to lose almost a rupee on every Rs. 100 of deposits mobilised. - Agricultural loan recovery rates stood at around 50% of demand; Pai blames poor appraisal, under-financing, irrational loan maturities, and politically motivated default on the eve of elections—but acknowledges banks themselves contributed to the overdues problem. - Pai argues for dedicated university banking degrees rather than on-the-desk training for the 20,000–25,000 new staff banks must recruit annually, and calls for the National Institute of Bank Management to lead this reform. - On the Chakravarty Committee proposals, Pai endorses linking lending rates to long-term inflation (implying a minimum lending rate of 13% if inflation stays near 8%) but warns that rigid rate linkage would prevent banks from pricing out speculative borrowers during short periods of acute inflation. --- ## [Primary work] COMMUNITY DEVELOPMENT URL: https://indianliberals.in/primary-works/community-development-b-g-rao-mar8-1961/ ### Summary Published by the Forum of Free Enterprise as a booklet dated 8 March 1961 and based on a speech delivered under the Forum's auspices in Bombay on 15 September 1960, this essay by B. G. Rao, ICS (Retd.) is a systematic indictment of nine years of planned community development in India. Rao opens by insisting that his purpose is not to deny all progress but to name failure honestly: the Programme Evaluation Organisation's Seventh Report (April 1960) found that the effort was 'inadequately co-ordinated, governmental rather than popular in character, and sustained more by hope than by achievement.' The A.I.C.C.'s own Economic Review raised a series of uncomfortable questions that the draft Third Five-Year Plan then conspicuously refused to answer—a silence Rao treats as evidence that the Planning Commission preferred parliamentary rubber-stamping to inconvenient self-scrutiny. The heart of Rao's critique is the absence of priorities. Both the First and Second Plans listed agriculture, co-operatives, land reform, small industries, rural electrification, social services and welfare all in one breath, with no ordering of precedence. The result, documented by a 1957 Committee on Plan Projects team, was that welfare activities—radio sets, community halls, tiled school roofs—crowded out economic development. A UN Technical Assistance mission found a development block where village streets had been paved with bricks while the urgent need was to drain excess water from cotton fields. Rao's prescription is blunt: the only first priority must be the increase in agricultural production; the only thing that may rank above it is the supply of drinking water. Everything else—social education, women's programmes, literacy classes—must follow, not precede, the farmer's acquisition of genuine economic strength. Rao extends this critique in three specific directions. On co-operatives, he argues that the 'one village, one co-operative' slogan, championed by two influential Planning Commission members against the unanimous evidence of the Reserve Bank's Rural Credit Survey, multiple expert teams and all State Governments, produces units too small to be viable; the draft Third Plan's maximum population coverage of 1,000 per co-operative is indefensible. On rural unemployment and cottage industries, he notes that the Programme Evaluation Organisation found 63 per cent wastage among trainees in pilot projects, while the draft plan offers only platitudes with no quantitative estimate of the scale of unemployment to be solved. On organisation, he argues that the existence of a separate Ministry of Community Development—duplicating Agriculture, Health, Education and Culture with its own expert staff, annual hill-station conferences and the Community Development Institute at Mussoorie—is an avoidable waste; the 1956 decision to integrate overlapping Central Social Welfare Board and Community Development activities had, four years later, been reduced to a pilot of twenty blocks. Rao closes by observing that the villager remains patient, but that people in positions of power have taken too little interest in examining what is actually being done in his name. ### Body ## Summary Published by the Forum of Free Enterprise as a booklet dated 8 March 1961 and based on a speech delivered under the Forum's auspices in Bombay on 15 September 1960, this essay by B. G. Rao, ICS (Retd.) is a systematic indictment of nine years of planned community development in India. Rao opens by insisting that his purpose is not to deny all progress but to name failure honestly: the Programme Evaluation Organisation's Seventh Report (April 1960) found that the effort was 'inadequately co-ordinated, governmental rather than popular in character, and sustained more by hope than by achievement.' The A.I.C.C.'s own Economic Review raised a series of uncomfortable questions that the draft Third Five-Year Plan then conspicuously refused to answer—a silence Rao treats as evidence that the Planning Commission preferred parliamentary rubber-stamping to inconvenient self-scrutiny. The heart of Rao's critique is the absence of priorities. Both the First and Second Plans listed agriculture, co-operatives, land reform, small industries, rural electrification, social services and welfare all in one breath, with no ordering of precedence. The result, documented by a 1957 Committee on Plan Projects team, was that welfare activities—radio sets, community halls, tiled school roofs—crowded out economic development. A UN Technical Assistance mission found a development block where village streets had been paved with bricks while the urgent need was to drain excess water from cotton fields. Rao's prescription is blunt: the only first priority must be the increase in agricultural production; the only thing that may rank above it is the supply of drinking water. Everything else—social education, women's programmes, literacy classes—must follow, not precede, the farmer's acquisition of genuine economic strength. Rao extends this critique in three specific directions. On co-operatives, he argues that the 'one village, one co-operative' slogan, championed by two influential Planning Commission members against the unanimous evidence of the Reserve Bank's Rural Credit Survey, multiple expert teams and all State Governments, produces units too small to be viable; the draft Third Plan's maximum population coverage of 1,000 per co-operative is indefensible. On rural unemployment and cottage industries, he notes that the Programme Evaluation Organisation found 63 per cent wastage among trainees in pilot projects, while the draft plan offers only platitudes with no quantitative estimate of the scale of unemployment to be solved. On organisation, he argues that the existence of a separate Ministry of Community Development—duplicating Agriculture, Health, Education and Culture with its own expert staff, annual hill-station conferences and the Community Development Institute at Mussoorie—is an avoidable waste; the 1956 decision to integrate overlapping Central Social Welfare Board and Community Development activities had, four years later, been reduced to a pilot of twenty blocks. Rao closes by observing that the villager remains patient, but that people in positions of power have taken too little interest in examining what is actually being done in his name. ## Key points - The Programme Evaluation Organisation's Seventh Report (1960) found the community development programme 'inadequately co-ordinated, governmental rather than popular, and sustained more by hope than by achievement'—a conclusion the draft Third Plan deliberately ignored. - Neither the First nor the Second Plan prescribed any ordering of priorities among community development activities; welfare tasks (community halls, radio sets, tiled roofs) consistently displaced agricultural investment because they were 'popular, easy of achievement and impress the casual observer'. - A UN Technical Assistance mission found a development block where village streets had been paved with bricks while the urgent need was to drain excess water from cotton fields to protect the crop—a concrete illustration of misallocated resources. - Rao argues that the only legitimate first priority is agricultural production, with drinking-water supply as the sole claim to precedence; all social and welfare activities must follow, not precede, the farmer's economic strengthening. - The 'one village, one co-operative' formula—championed by two Planning Commission members against the Reserve Bank Rural Credit Survey, the Vaikunth Lal Mehta team and all State Governments—produced units too small to be viable; the draft Third Plan's cap of 1,000 population per co-operative had no evidential basis. - 63% of trainees in cottage-industry pilot projects abandoned the craft they were trained for; the draft Third Plan offered no estimate of the volume of rural unemployment it aimed to solve, substituting 'platitudes' for data. - The 1956 Central Government order to integrate the Community Development Organisation and the Central Social Welfare Board had, by 1960, been implemented in only 20 out of a planned 100 pilot blocks, with each agency blaming the other. - The existence of a separate Ministry of Community Development—duplicating Agriculture, Health and Education with its own experts, annual hill-station conferences and a residential institute at Mussoorie—is condemned as an avoidable waste; Rao calls the Ministry an anomaly that should be abolished. --- ## [Primary work] COMPANY LAW IN INDIA URL: https://indianliberals.in/primary-works/company-law-in-india-justice-n-d-sinha-dec10-1964/ ### Summary Justice D. N. Sinha's address—delivered on 30 June 1964 to the Association of Company Secretaries & Executives in Calcutta and issued as a Forum of Free Enterprise booklet in December 1964—traces the chequered history of Indian company law from the 1850 Act onward, through the Acts of 1857, 1860, 1866, 1882, 1913, and 1936, down to the 1956 Companies Act and its many amendments (notably the 218 changes culminating in section 388B). Sinha frames company legislation as an inheritance of English law, born of seventeenth-century chartered enterprises and the South Sea Bubble, and crystallised by the nineteenth-century invention of limited liability—what he calls a "stroke of genius" without which modern industrial prosperity could not have been built. The core argument is that the object of company law is twofold: to enable persons to band together for trade, business, and industry most effectively, and to ensure that this private power is consistent with political, social, and economic necessity. Drawing on Justice Douglas of the United States Supreme Court and on Lord Cranworth's classic dictum in Oakes v.… ### Body ## Summary Justice D. N. Sinha's address—delivered on 30 June 1964 to the Association of Company Secretaries & Executives in Calcutta and issued as a Forum of Free Enterprise booklet in December 1964—traces the chequered history of Indian company law from the 1850 Act onward, through the Acts of 1857, 1860, 1866, 1882, 1913, and 1936, down to the 1956 Companies Act and its many amendments (notably the 218 changes culminating in section 388B). Sinha frames company legislation as an inheritance of English law, born of seventeenth-century chartered enterprises and the South Sea Bubble, and crystallised by the nineteenth-century invention of limited liability—what he calls a "stroke of genius" without which modern industrial prosperity could not have been built. The core argument is that the object of company law is twofold: to enable persons to band together for trade, business, and industry most effectively, and to ensure that this private power is consistent with political, social, and economic necessity. Drawing on Justice Douglas of the United States Supreme Court and on Lord Cranworth's classic dictum in Oakes v. Turques (1867), Sinha insists that corporations carry an element of public interest and that directors owe duties to labour, suppliers, consumers, and the wider community as well as to shareholders. He worries that Indian legislation, though constantly amended, has failed to achieve its purpose: it has become bulky, complex, and incomprehensible, defeating the very economic prosperity it aims to serve. The second half turns to taxation and to legislative craftsmanship. Sinha argues that India's tax regime—income tax, the Wealth Tax Act, the Gift Tax Act, the Estate Duty Act, the Compulsory Deposit and Annuity Deposit schemes—has become so prolix, technical, and unstable that ordinary taxpayers cannot understand their own liabilities, while "big business" devotes its energy to legitimate tax-avoidance schemes that thwart the spirit of the law. Citing Alexander Hamilton in The Federalist on the danger of laws "so voluminous that they cannot be read", he calls for ideal legislation that pinpoints the disease and prescribes a simple cure, drafted by men specifically trained in the art. He ends with a plea for serious legal research in India to clear away technicalities and protect the honest taxpayer, commending the West Bengal State Unit of the Indian Law Institute for beginning that work. ## Key points - Reconstructs the statutory history of Indian company law from the 1850 Act, through the 1857, 1860, 1866, 1882, 1913, and 1936 enactments, to the 1956 Companies Act and its 218 amendments culminating in section 388B. - Locates the origin of company legislation in seventeenth-century English chartered enterprises and the South Sea Bubble, and identifies limited liability—introduced after 1850—as the decisive innovation behind modern industrial prosperity. - Defines the object of company legislation as enabling collective enterprise while ensuring it serves political, social, and economic necessity, invoking Lord Cranworth in Oakes v. Turques (1867) and Justice Douglas of the U.S. Supreme Court on the public-interest dimension of corporations. - Argues that Indian company law has become so frequently amended, technical, and complex that it now obstructs rather than fosters the commercial community it was intended to serve. - Critiques India's tax regime—Income Tax, Wealth Tax, Gift Tax, Estate Duty, Compulsory Deposit, and Annuity Deposit Schemes—for being incomprehensible to the ordinary taxpayer and for driving 'big business' into elaborate but lawful avoidance schemes. - Notes that roughly 99% of Indians fall outside the income-tax net and that the burden on the honest middle-class taxpayer is rising even as revenue is leaking, citing Alexander Hamilton in The Federalist on the dangers of voluminous, ever-changing laws. - Calls for simpler, comprehensible legislation drafted by trained specialists, and for serious legal research—commending the West Bengal State Unit of the Indian Law Institute for taking up the task. --- ## [Primary work] COMPENSATION OR EXPROPRIATION? URL: https://indianliberals.in/primary-works/compensation-or-expropriation-by-dr-rustom-c-cooper/ ### Summary This Forum of Free Enterprise pamphlet by Dr. Rustom C. Cooper offers a legal-constitutional critique of Article 31 of the Indian Constitution and the Fourth Constitutional Amendment that introduced Article 31A. Cooper argues that the original Article 31 — which obliged the State to compensate citizens whose property it acquired — was steadily eroded by a series of state acquisition statutes and by parliamentary amendments designed to insulate compensation amounts from judicial review. The pamphlet reads the constitutional history as a record of how 'doctrinaire thinking' progressively stripped property of its standing as a fundamental right. The argument moves through three registers. First, Cooper rehearses the textual change: Article 31's original language required compensation 'equivalent in value' to property taken, but Article 31A was inserted by Section 17 of the Fourth Amendment Act to immunise State legislation on agricultural estates from being struck down as a breach of fundamental rights.… ### Body ## Summary This Forum of Free Enterprise pamphlet by Dr. Rustom C. Cooper offers a legal-constitutional critique of Article 31 of the Indian Constitution and the Fourth Constitutional Amendment that introduced Article 31A. Cooper argues that the original Article 31 — which obliged the State to compensate citizens whose property it acquired — was steadily eroded by a series of state acquisition statutes and by parliamentary amendments designed to insulate compensation amounts from judicial review. The pamphlet reads the constitutional history as a record of how 'doctrinaire thinking' progressively stripped property of its standing as a fundamental right. The argument moves through three registers. First, Cooper rehearses the textual change: Article 31's original language required compensation 'equivalent in value' to property taken, but Article 31A was inserted by Section 17 of the Fourth Amendment Act to immunise State legislation on agricultural estates from being struck down as a breach of fundamental rights. Second, he reads Prime Minister Jawaharlal Nehru's 10 September 1949 Constituent Assembly speech against later practice — Nehru himself, Cooper notes, accepted that 'full compensation should be paid to small owners' while saying the legislature would not tolerate being 'interfered with by courts of law'. Third, Cooper supplies a worked case study: the Port Canning and Land Improvement Company Ltd., whose Rs. 60,00,000 capital invested over 85 years yielded an annual dividend of about 2.8 per cent and which, under the West Bengal Estates Acquisition Act 1953, would receive non-negotiable bonds at 3% interest worth roughly one-tenth of its original investment. Cooper closes by quoting an unnamed 'leading thinker' to the effect that freedom of speech, press, religion and assembly historically collapse wherever the right to own and manage property is denied. The pamphlet's polemical centre is that, by removing the judicial test of compensation, India has placed citizens — including widows, office clerks, retired persons and 'lower middle class people' holding small shareholdings in acquired companies — 'helpless before the Leviathan of the State'. He also cites Alan Gledhill's treatise Fundamental Rights in India for the proposition that Article 31's drift makes parliamentary majorities, not the constitutional text, the practical guarantor of property rights. ## Key points - Reads Article 31 of the Indian Constitution as a once-robust guarantee of compensation that has been progressively weakened by State legislation and the Fourth Constitutional Amendment (Article 31A). - Cites Nehru's 10 September 1949 Constituent Assembly speech to show that the original constitutional intent included 'just and equitable compensation' even for large properties, especially limited liability companies with many small shareholders. - Quotes Alan Gledhill (in Fundamental Rights in India) to argue that Article 31 now functions less as a justiciable right than as a 'temporary majority' subject to parliamentary will. - Anchors the abstract argument in the Port Canning and Land Improvement Company Ltd. case under the West Bengal Estates Acquisition Act 1953 — Rs. 60,00,000 paid-up capital, Rs. 32,00,000 spent on development, average annual dividend of 2.8% over 83 years, compensation roughly Rs. 6,00,000. - Notes that compensation is paid in non-negotiable bonds at 3% interest payable over 20 years, with the shareholder receiving roughly one-tenth of the original investment in real terms. - Identifies who actually bears the loss: widows, office clerks, retired persons and lower-middle-class shareholders, not the 'rich men' the legislation purports to reach. - Cites Supreme Court of Bihar vs Kameshwar, A.I.R. (1952) S.C. 252, on the principle that legislation effectively depriving citizens of property without colourable compensation must be void. - Closes with an unattributed quotation tying private-property rights to free speech, free press, freedom of religion and freedom of assembly — the pamphlet's framing of property as a precondition for the other liberties. --- ## [Primary work] Compulsory Deposit Scheme URL: https://indianliberals.in/primary-works/compulsory-deposit-scheme-v-b-haribhakti-sep9-1963/ ### Summary This Forum of Free Enterprise pamphlet collects two talks delivered in Bombay on 23 July 1963 attacking the Compulsory Deposit Scheme (C.D.S.) announced by the Finance Minister in the 28 February 1963 Budget Speech. V. B. Haribhakti, a chartered accountant, dissects the statute clause-by-clause to argue that the scheme is gigantic, ill-considered, and impossible to administer fairly on lower-income earners. H. C. Malkani, Principal of Bombay's College of Commerce and Economics, takes up the question of feasibility — comparing C.D.S. to Keynes-inspired British deferred-pay precedents, weighing it against ordinary taxation, and concluding that the implementation machinery is nowhere near ready for the colossal task. Both pieces share the Forum's classical-liberal framing — captured in the cover-leaf epigraphs from Eugene Black and A. D. Shroff — that compulsory saving on the poor is a contradiction in terms and that government overspending, not private consumption, is the real fiscal problem. ### Body ## Summary This Forum of Free Enterprise pamphlet collects two talks delivered in Bombay on 23 July 1963 attacking the Compulsory Deposit Scheme (C.D.S.) announced by the Finance Minister in the 28 February 1963 Budget Speech. V. B. Haribhakti, a chartered accountant, dissects the statute clause-by-clause to argue that the scheme is gigantic, ill-considered, and impossible to administer fairly on lower-income earners. H. C. Malkani, Principal of Bombay's College of Commerce and Economics, takes up the question of feasibility — comparing C.D.S. to Keynes-inspired British deferred-pay precedents, weighing it against ordinary taxation, and concluding that the implementation machinery is nowhere near ready for the colossal task. Both pieces share the Forum's classical-liberal framing — captured in the cover-leaf epigraphs from Eugene Black and A. D. Shroff — that compulsory saving on the poor is a contradiction in terms and that government overspending, not private consumption, is the real fiscal problem. ## Essays ### COMPULSORY DEPOSIT SCHEME *By V. B. Haribhakti* Haribhakti opens by calling the C.D.S. 'a novel idea in the Indian Fiscal System' but also a 'Frankenstein' that emerged from only four paragraphs (57–60) of the 69-paragraph Budget Speech, and was drafted hastily. He works through the five statutory categories of compulsory depositors, the Rs. 12-crore revenue target, the definitions of 'salary' and 'employee' under Section 2(b) and Section 3(e), the 240-day employment condition, the 3% deposit rate (10.8% for the 1963-64 partial year), the depositing banks, Form 'A'/'B'/'C'/'D'/'E' procedures, the 4% interest, the five-year repayment cycle, and the cumbersome penalty mechanism on employers who fail to deduct. He shows that the scheme penalises bona fide salaried staff while leaving the genuinely better-off (urban property holders, Section-11 trust employees, casual labour) effectively outside its grasp. The essay closes with per-capita-income data (Rs. 292.50 for India in 1961-62 versus Rs. 11,118 for the United States) and survey evidence that 85% of urban households 'dis-saved' to argue that the scheme for incomes below Rs. 3,000 must simply be scrapped, and that the real avenue for resource mobilisation is curbing colossal Government expenditure. - The C.D.S. was buried in four paragraphs of a 69-paragraph Budget Speech and reflects a recent pattern of hasty Indian legislation. - The scheme's two stated objects — restraining demand and inculcating the saving habit — are doubtful for income-tax payers earning Rs. 125 to Rs. 250 a month. - Definitional inconsistencies between the C.D.S. Act and the Income-tax Act (especially around 'salary' and 'person') create implementation traps that may render the scheme illegal for many employees. - Employers face severe penalties and a quasi-banking burden of opening, maintaining, and repaying Compulsory Deposit Accounts in duplicate or triplicate. - Forms 'A', 'B', 'C', 'D', and 'E' and deposit machinery across the Reserve Bank, SBI, eight scheduled banks, and post offices add administrative load without clear benefit. - Indian per-capita income (Rs. 292.50) is a fraction of the U.S. figure (Rs. 11,118), so the saving capacity for compulsion to act on simply isn't there. - A 1960 Monthly Abstract of Statistics survey showed 85% of urban households had 'nil' or negative saving — for them 'compulsory saving' is a directive to 'compulsorily borrow'. ### C.D.S. IS DIFFICULT TO IMPLEMENT *By H. C. Malkani* Malkani's contribution, 'C.D.S. is Difficult to Implement', accepts that the Finance Minister's objects — supplementing taxation and inculcating austerity — are legitimate given that the Third Plan's required 11.5% saving rate has slipped against a stagnant 8.5% achievement, but rejects the chosen instrument. He recalls that Lord Keynes used compulsory saving with success in wartime Britain, and notes that compulsory deposits at 4% interest are preferable to taxation in form but suffer the same demand-inflationary limits and require deficit financing. Walking through each category C.D.S. is meant to capture — land-revenue payers above Rs. 5/-, income-tax payers, salaried staff between Rs. 1,500 and Rs. 3,000, shopkeepers above Rs. 15,000 turnover, urban immovable-property holders, and professionals outside income-tax — he shows that State Government arrears, NCAER 'nil savings' findings on the Rs. 1,500–3,000 group, the eight-lakh-account burden in Bombay City alone, and the un-perfected collection machinery together make the scheme practically unworkable. His verdict: objects laudable, implementation a very difficult task. - Common people, especially the middle classes, are worried because the scheme bites a population with low per-capita income, rising prices, and almost no capacity to save. - Compulsory deposits are preferable to taxation only because they are 'earning assets' at 4% — but they share taxation's inflationary and deficit-financing limits. - The Third Plan needed a 11.5% saving rate but achieved only ~8.5%, with growth slipping to 2.2–2.4% against a 7% target — the gap motivates C.D.S. but does not justify it. - Land-revenue payers above Rs. 5/- are the largest affected class, but State Governments — including Madras — are already grumbling about collecting on the Centre's behalf. - NCAER evidence reportedly shows that persons earning Rs. 1,500–3,000 'have on an average hardly, any net savings', and increased indirect taxes have already reduced their capacity to save. - Implementation arithmetic — 8.28 lakh income-tax payers plus ~355 lakh non-farm households in the Rs. 1,500–3,000 range, and 8 lakh accounts in Bombay City alone — makes the scheme a colossal administrative task. --- ## [Primary work] Conditions for Economic Growth URL: https://indianliberals.in/primary-works/conditions-for-economic-growth-prof-w-h-hutt-aug9-1964/ ### Summary Delivered as a Forum of Free Enterprise pamphlet dated 9 August 1964, W. H. Hutt's Conditions for Economic Growth opens with the question of how India can most rapidly raise its average standards of living toward those of Western Europe and the United States, and answers it with a polemical inversion: altruistic foreign aid is of negligible importance compared with what private foreign profit-seekers, claiming no altruism whatever, would supply in capital, equipment and managerial competence if Indian policy permitted them entry under credible guarantees against nationalisation and confiscatory taxation. The 'most formidable internal & imposed barrier' to India's catching up, Hutt insists, is not any want of Indian talent but the legal-political restraint placed on the inflow of foreign capital and on the institutions of a competitive market. The pamphlet then enumerates conditions Hutt believes any under-developed economy must satisfy.… ### Body ## Summary Delivered as a Forum of Free Enterprise pamphlet dated 9 August 1964, W. H. Hutt's Conditions for Economic Growth opens with the question of how India can most rapidly raise its average standards of living toward those of Western Europe and the United States, and answers it with a polemical inversion: altruistic foreign aid is of negligible importance compared with what private foreign profit-seekers, claiming no altruism whatever, would supply in capital, equipment and managerial competence if Indian policy permitted them entry under credible guarantees against nationalisation and confiscatory taxation. The 'most formidable internal & imposed barrier' to India's catching up, Hutt insists, is not any want of Indian talent but the legal-political restraint placed on the inflow of foreign capital and on the institutions of a competitive market. The pamphlet then enumerates conditions Hutt believes any under-developed economy must satisfy. Growth depends on thrift — both as physical capital accumulation and as the 'human capital' built up through education and technical training; discriminatory ('progressive') taxation and naively administered death duties destroy incentive, while properly administered death duties whose proceeds are channelled into income-yielding investment can equalise opportunity. The democratic role of the market is that the consumer, not the planner, disciplines producers; Hutt cites Mises's 'omnipotent government' and Adam Smith's never-refuted critique of import-tariff protection. Protective tariffs that screen domestic industry from cheaper foreign supply are condemned, with South Africa offered as a counter-example of industrial progress achieved without infant-industry protection. He couples this with the claim that industrial growth cannot be financed at agriculture's expense — 'a vigorous development of factory production nearly always requires a parallel development of agriculture' — and proposes mechanisation of cultivation in parallel with industrialisation. The later sections attack labour unions for using strikes and boycotts to enforce wage rigidities that prevent labour markets from clearing, and Western governments for relying on inflation as a politically easy substitute for genuine co-ordination. Hutt closes with a ten-point summary: a tax system that does not discriminate against the provident; faith for foreign capital secured by an official renunciation of nationalisation; explicit recognition of profit as the reward for wise direction; constitutional bars on race-, caste- and income-based discrimination; abolition of tariff and quota restraints; mechanisation of agriculture alongside industrialisation; resistance to grandiose public capital schemes; prohibition of private coercion over prices, wages and outputs (strikes and boycotts); renunciation of inflationary monetary policy; and prevention of unbridled population growth. ## Key points - Hutt frames India's task as how to most rapidly close the gap with Western Europe and the United States, and re-poses it as: why are powerful world forces spreading modern technology being prevented from reaching the Indian masses? - Foreign 'aid' from altruism or enlightened self-interest is treated as negligible relative to what self-interested foreign profit-seekers would deliver if permitted entry under credible guarantees against nationalisation and confiscatory taxation. - Thrift — including 'human capital' built through education and technical training — is identified as the foundation of growth; discriminatory ('progressive') taxation and badly administered death duties destroy incentives, while death-duty proceeds must be 'maintained intact and devoted to the production of income-yielding assets'. - The chief obstacle to India's modernisation is described as an internal, imposed barrier on the inflow of foreign capital, not any deficiency of Indian managerial talent. - Protective tariffs for infant industries are rejected with Adam Smith's never-refuted arguments and a comparative appeal to South Africa, where industrial progress is said to have occurred without such protection. - Industrialisation and agricultural development are presented as inseparable: factory output cannot expand if farm productivity does not, and mechanisation of agriculture must proceed alongside industrial growth. - Labour unions are criticised for substituting collective coercion (strikes, boycotts) for free-market wage-rate adjustment, with resulting unemployment, regressive price pressure on the poor, and inequitable income distribution. - Inflation is named the chief contemporary weakness of Western policy — a politically convenient debasement that 'controllers' use in lieu of co-ordination — and Hutt calls for its renunciation. - The pamphlet closes with a ten-point programme covering taxation, foreign-capital guarantees, recognition of profit, constitutional anti-discrimination, removal of tariff/quota restraints, mechanisation of agriculture, restraint of grandiose public schemes, prohibition of private wage/output coercion, renunciation of inflation, and control of population growth. --- ## [Primary work] Concentration of Economic Power URL: https://indianliberals.in/primary-works/concentration-of-economic-power-dr-pendse-july-14-1972/ ### Summary Delivered as the Sixth A. D. Shroff Memorial Lecture in Poona in 1971 and published by the Forum of Free Enterprise in July 1972, D. R. Pendse's booklet argues that India's intensifying preoccupation with the 'Concentration of Economic Power' (CEP) has itself become a danger to economic growth. Writing as Deputy Economic Adviser to Tatas, Pendse traces the policy lineage from Prime Minister Jawaharlal Nehru's 1959 decision to commission what became the Mahalanobis study, through the Monopolies Inquiry Commission (1965), the Hazari Committee (1967) and the Dutt Committee (1969), to the Monopolies and Restrictive Trade Practices (MRTP) Act, which came into force in June 1970.… ### Body ## Summary Delivered as the Sixth A. D. Shroff Memorial Lecture in Poona in 1971 and published by the Forum of Free Enterprise in July 1972, D. R. Pendse's booklet argues that India's intensifying preoccupation with the 'Concentration of Economic Power' (CEP) has itself become a danger to economic growth. Writing as Deputy Economic Adviser to Tatas, Pendse traces the policy lineage from Prime Minister Jawaharlal Nehru's 1959 decision to commission what became the Mahalanobis study, through the Monopolies Inquiry Commission (1965), the Hazari Committee (1967) and the Dutt Committee (1969), to the Monopolies and Restrictive Trade Practices (MRTP) Act, which came into force in June 1970. He contends that the Act — and especially its Chapter III, which vests sweeping discretionary powers in Government to approve or reject expansion proposals — already constitutes a more than adequate weapon against concentration; the trouble is the obsession that has grown around it. The lecture's central polemic targets the inherited framework of 'Larger Industrial Houses' (the list of twenty from the Dutt Committee's July 1969 Report on Industrial Licensing Policy), which Pendse calls outdated (resting on data from 31 December 1966), logically unsound, and substantively wrong as a proxy for the CEP problem. He proposes that Government instead set up a fresh Concentration Evaluation Commission, charged with evaluating concentrated economic power against the common good and saying who else is to the common detriment. In the meantime, he argues, genuine growth-oriented policies are being sacrificed to anti-concentration posture. Telco's truck-capacity expansion is held up by the Monopolies Commission while defence-grade trucks are short; mini-steel plants are blocked even though Bhilai's 2.5 million tonnes and Tisco's 2 million tonnes are nowhere near sufficient; banks are nationalised and then disabled from lending to managing agency systems by the same anti-concentration logic. Pendse then turns to the small-scale sector, arguing that its products often compare unfavourably with those of organised industry on both price and quality — by as much as 15 per cent in tenders — so that consumer welfare, especially that of the poor, is sacrificed to a mythologised image of the small producer. He defends the diffusion of entrepreneurship as a laudable objective in itself but rejects the zero-sum framing that one sector must shrink for another to grow: 'there is thus more than room for all.' Citing the Ruling Party's Garibi Hatao mandate and Professor Dandekar's recent pioneering study, which found that at least 60 per cent of Indians fall below the minimum per-capita consumption norms used by the Planning Commission, he closes by calling for 'sinking ideological differences' and mustering the co-operation of all — poor or rich, small or large — to meet the country's difficult economic emergency. That, in his view, is the road to good economics as well as to good politics. ## Key points - Argues that the obsession of policy-makers and the public with the 'Concentration of Economic Power' (CEP) has crowded out the more urgent task of accelerating economic growth. - Traces the institutional history of the CEP debate from Nehru's 1959 initiative through the Mahalanobis study, Monopolies Inquiry Commission (1965), Hazari Committee (1967), Dutt Committee (1969) and the MRTP Act of June 1970. - Holds that the MRTP Act's Chapter III, framed in pursuance of the Directive Principle of State Policy, already gives Government sweeping discretionary powers to police expansion, mergers, amalgamations and inter-connected undertakings. - Rejects the Dutt Committee's framework of 'Larger Industrial Houses' (the 20-House list, anchored in 31-12-1966 data) as outdated, internally inconsistent with the MRTP Act, and a poor proxy for the real CEP problem. - Proposes setting up an independent Concentration Evaluation Commission to define the criteria of 'common good' and 'common detriment' and to take a fresh, time-bound look at concentration. - Cites concrete cases — Telco's truck expansion delayed by the Monopolies Commission despite defence shortages; the blocking of 'mini-steel plants' against Bhilai's 2.5 mt and Tisco's 2 mt; bank nationalisation later kept from lending against managing agencies — to show how anti-concentration policy throttles essential capacity. - Challenges the assumption that the small-scale sector is automatically welfare-enhancing: its goods are often 15 per cent dearer than large-sector tenders and of lower quality, hurting the poor consumer who is the supposed beneficiary. - Closes with a plea to drop ideological postures and treat private enterprise — large and small — as a partner in tackling poverty, defence shortages and growth, citing Prof. Dandekar's poverty study and the Garibi Hatao mandate. --- ## [Primary work] Congress Misrule and the Swatantra Alternative URL: https://indianliberals.in/primary-works/congress-misrule-and-the-swatantra-alternative/ ### Summary In the rendered pages (front matter, foreword, introduction, and the opening of Section I), M. R. Masani assembles his parliamentary speeches into a sustained indictment of Congress economic policy and a programmatic case for the Swatantra Party as the only credible democratic alternative. C. Rajagopalachari's brief foreword frames the volume as criticism of the highest quality, arguing that the Swatantra Party exists to give India good government. Masani's own Introduction, written on the eve of the 1967 General Elections, addresses the scepticism of the educated classes toward the Party's electoral viability and marshals voting statistics to argue that Congress is a 'paper tiger'—a minority party whose parliamentary majority distorts actual public support. He contends that the real choice facing India is between Communist dictatorship and the liberal democratic programme of Swatantra. The opening sub-essay of Section I ('Call for a New Party', delivered in Bangalore in May 1959) sets the ideological frame for the whole collection in the rendered pages.… ### Body ## Summary In the rendered pages (front matter, foreword, introduction, and the opening of Section I), M. R. Masani assembles his parliamentary speeches into a sustained indictment of Congress economic policy and a programmatic case for the Swatantra Party as the only credible democratic alternative. C. Rajagopalachari's brief foreword frames the volume as criticism of the highest quality, arguing that the Swatantra Party exists to give India good government. Masani's own Introduction, written on the eve of the 1967 General Elections, addresses the scepticism of the educated classes toward the Party's electoral viability and marshals voting statistics to argue that Congress is a 'paper tiger'—a minority party whose parliamentary majority distorts actual public support. He contends that the real choice facing India is between Communist dictatorship and the liberal democratic programme of Swatantra. The opening sub-essay of Section I ('Call for a New Party', delivered in Bangalore in May 1959) sets the ideological frame for the whole collection in the rendered pages. Masani argues that the Second Five Year Plan has concentrated economic and political power to a dangerous degree, citing Acharya Vinoba Bhave's own warning about power being held by five or six people at the apex. He traces a line of causation from the 'Socialist Pattern' through excessive taxation, the destruction of peasant proprietorship under the Nagpur Resolution, and the collectivisation of agriculture, to a Soviet-style outcome incompatible with parliamentary democracy. He invokes Milovan Djilas's 'The New Class' and the testimony of demographer S. Chandrasekhar on Chinese communes to show that state capitalism produces a new exploiting bureaucratic class rather than social justice. Karl Marx is cited—ironically—for the observation that those who own property are free, a point Masani turns against the Congress logic of abolition. ## Key points - Rajagopalachari's foreword (p. v) certifies the volume as reproducing edited speeches to convey the Swatantra Party's programme with 'all the vigour it can command'. - The Introduction argues that Congress is a 'paper tiger' whose highest vote share was 48 per cent under Nehru and had fallen to 44.72 per cent by 1962, making it permanently a minority party in terms of popular votes in the rendered pages. - Masani presents the 1967 election as a binary choice between Communist Party rule and liberal democracy embodied in Swatantra, not a contest between Congress and its left-leaning rivals. - Ceylon's 1965 displacement of a Congress-type government by Dudley Senanayake's liberal government is cited in the rendered pages as proof that such a democratic transition is achievable. - The 'Call for a New Party' speech identifies the Nagpur Resolution's push for joint cooperative farming as a Soviet-style collectivisation that would give state officials 'virtual power of life and death over the peasant'. - Masani deploys Milovan Djilas's 'The New Class' and S. Chandrasekhar's account of Chinese communes to argue that state capitalism produces a more exploitative bureaucratic class than private capitalism in the rendered pages. - The Introduction characterises Swatantra as fundamentally an agrarian and peasant party, not an urban intelligentsia or business party, drawing on 1962 Election Commission data showing its vote base was predominantly rural. --- ## [Primary work] Constitution URL: https://indianliberals.in/primary-works/constitution-march-2000/ ### Summary The Indian Liberal Group Constitution, adopted on 4 March 2000 in Mumbai, is the founding governing instrument of the ILG — a liberal civil-society organisation that traces its origins to 1964. The document opens with a substantive statement of objectives (Article 2) that articulates a coherent classical-liberal philosophy: individual liberty paired with personal responsibility as the foundation of civilised society; the state as servant rather than master of citizens; the inviolability of democratic accountability and the rule of law; and the defence of personal liberty, freedom of thought, expression, belief, faith and worship, the right of association, private property, free choice of occupation, and the right to information.… ### Body ## Summary The Indian Liberal Group Constitution, adopted on 4 March 2000 in Mumbai, is the founding governing instrument of the ILG — a liberal civil-society organisation that traces its origins to 1964. The document opens with a substantive statement of objectives (Article 2) that articulates a coherent classical-liberal philosophy: individual liberty paired with personal responsibility as the foundation of civilised society; the state as servant rather than master of citizens; the inviolability of democratic accountability and the rule of law; and the defence of personal liberty, freedom of thought, expression, belief, faith and worship, the right of association, private property, free choice of occupation, and the right to information. The objectives section also commits the ILG to tolerance — with the memorable qualification that 'while tolerance is integral to liberalism, the ILG will not tolerate intolerance' — and opposes all forms of monopoly while affirming that 'the business of government is governance, not business.' The remaining twenty clauses establish a three-tier federal governance structure: a National Council (comprising Presidents and Secretaries of State Executives) that elects the National President and up to twelve members of the National Executive and is responsible for all policy pronouncements; a National Executive that conducts day-to-day activities; and State Councils, State Executives, and District Committees mirroring the national structure at sub-national levels. Membership is open to individuals and like-minded organisations that accept Article 2's principles, with four categories — Life, Active, Ordinary, and Associate — carrying tiered subscription fees ranging from Rs.10 per year (Ordinary) to a one-time Rs.2,000 (Life). Political parties are explicitly barred from Associate Membership. The constitution caps office-bearer terms at two consecutive terms, sets a two-thirds supermajority for constitutional amendments, and requires a National Convention at least every three years. Three annexures list the 17-member Drafting Group, the 13 Founding Members of the Executive Committee, and the President and eight members of the Ad-hoc National Executive, with S. V. Raju named as President of the Ad-hoc National Executive. ## Key points - The ILG was founded in 1964 and formally constituted on 4 March 2000 when this document was adopted by its Executive Committee, whose members thereby became Founding Members. - Article 2 (Objectives) is the ideological core: it enumerates individual liberty, responsibility, tolerance, social justice, equality of opportunity, the rule of law, private property, free association, and freedom of expression as foundational liberal values. - The ILG explicitly positions itself against monopoly in any form and holds that 'the business of government is governance, not business.' - Governance is organised on a three-tier federal model — National Council / National Executive at the top, mirrored by State Councils / State Executives, and District Committees at the base. - Four membership categories (Life, Active, Ordinary, Associate) allow both individuals and voluntary organisations to join; political parties are explicitly excluded from Associate Membership. - Membership fees are split across tiers: Life and Active membership revenue flows 50% to the National Executive, 25% to State Executives, 25% to District Committees. - Constitutional amendments require a two-thirds majority; office-bearers are limited to two consecutive terms; a National Convention must be held at least once every three years. - S. V. Raju served as President of the Ad-hoc National Executive; the Drafting Group comprised 17 named members including Raju and several women (Anjali Patil Gaikwad, Kashmira Rao, Mary Thomas). --- ## [Primary work] CONSUMERS OF A STATE MONOPOLY: LIC POLICYHOLDERS URL: https://indianliberals.in/primary-works/consumers-of-a-state-monopoly-lic-policyholders-ptof-l-g-bapat-15-january-1975/ ### Summary Prof. L. G. Bapat's 1975 Forum of Free Enterprise booklet audits the Life Insurance Corporation of India eighteen years after nationalisation, asking whether LIC delivered on the better deal promised to policyholders when the Draft Bill was introduced in 1956. Bapat evaluates the corporation under four heads — premium rates, share in LIC's prosperity (bonus), service while the policy is in force, and settlement of claims on maturity — and finds the state monopoly wanting on every count. On premium rates, Bapat shows that LIC continues to base its tariffs on the obsolete Oriental (1925-35) Ultimate Mortality Table even though the death rate has fallen from 36.3 per 1,000 in the 1920s to 12 per 1,000, and even though the corporation's own valuations and an Administrative Reforms Commission recommendation called for an immediate 25 per cent cut.… ### Body ## Summary Prof. L. G. Bapat's 1975 Forum of Free Enterprise booklet audits the Life Insurance Corporation of India eighteen years after nationalisation, asking whether LIC delivered on the better deal promised to policyholders when the Draft Bill was introduced in 1956. Bapat evaluates the corporation under four heads — premium rates, share in LIC's prosperity (bonus), service while the policy is in force, and settlement of claims on maturity — and finds the state monopoly wanting on every count. On premium rates, Bapat shows that LIC continues to base its tariffs on the obsolete Oriental (1925-35) Ultimate Mortality Table even though the death rate has fallen from 36.3 per 1,000 in the 1920s to 12 per 1,000, and even though the corporation's own valuations and an Administrative Reforms Commission recommendation called for an immediate 25 per cent cut. He argues that by simultaneously assuming a much lower rate of interest than it actually earns and a much higher renewal expense ratio than it actually incurs, LIC artificially shrinks the surplus available for bonus, so the bonus declared on endowment and whole-life policies is consistently lower than what private companies (Western India, United India, Oriental) paid before nationalisation. On service, Bapat catalogues a steady rise in complaints (17,304 in 1972-73 at the central office alone), policy transfers that take three months or more, surrender values that are punitive compared to British insurers like Prudential and Eagle Star, an investment policy that locks 74.7 per cent of total investment in low-yielding government securities, and a rural-area neglect such that thirty districts still had no LIC branch in 1969. He also tracks how subordinate-employee headcount and per-capita salaries have ballooned — wages obtained complete neutralisation of inflation while policyholders were squeezed — and how only 3 per cent of death claims are settled within one month, with the balance taking 199-343 days. The conclusion is unambiguous: as long as LIC remains a monopoly it cannot honour the hopes of its creators. Bapat endorses Parliament's 1966 Public Undertaking Committee recommendation that LIC be broken into five or more autonomous units, and former LIC chairman T. A. Pai's call for splitting it into five corporations — and adds that the Government should either implement that recommendation or open the field to private competition immediately, in the interest of all concerned including LIC itself. ## Key points - Frames the booklet as a stocktaking of LIC against the 1956 ministerial promise of a 'better deal' for policyholders, eighteen years on. - Documents that LIC still prices premiums off the 1925-35 Oriental mortality table even though the death rate has fallen from 36.3 to 12 per 1,000 and an Administrative Reforms Commission recommended an immediate 25 per cent cut. - Demonstrates that LIC depresses declared bonus by assuming a 2-7/8% to 3-3/8% rate of interest while actually earning up to 5.97%, and by assuming 17-23.25% renewal expense ratios while actual ratios sit near 13-14%. - Shows the share of LIC's total income passed to policyholders has slid from 32.1% in 1956 to 23.4% in 1972-73, while subordinate-employee per-capita salaries rose 259% over the same span. - Cites comparative data — Indian surrender values at 56% of premiums paid where Prudential pays 95% and Eagle Star 77%; 49.7% of insurer assets locked in government securities against 2% in Canada and 4.8% in the USA. - Catalogues service failures: 17,304 complaints in 1972-73 at the central office, transfers taking 3+ months, only 3% of death claims settled within one month, urban concentration despite a stated rural mandate. - Argues that none of these distortions would survive in a competitive market — LIC behaves this way because it faces no threat of losing business. - Endorses the 1966 Public Undertaking Committee recommendation to break LIC into five or more autonomous units, or in the alternative to admit private competition at once. --- ## [Primary work] CONSUMER SOVEREIGNTY LEADS TO RAPID ECONOMIC DEVELOPMENT URL: https://indianliberals.in/primary-works/consumer-sovereignty-leads-to-rapid-economic-development-by-prof-br-shenoy-july-9-1962/ ### Summary B. R. Shenoy's July 1962 Forum of Free Enterprise leaflet is a direct riposte to J. K. Galbraith, whose pronouncements during his tours of India had cast doubt on those who criticised central planning. Reporting from a Press conference in Ahmedabad, Shenoy notes Galbraith's claim that 'the present tempo of our planning might lead to an authoritarian regime' yet his simultaneous insistence that 'whenever somebody wants to denounce something, he says it is likely to lead to authoritarianism.' Shenoy turns the warning back on its author: it is the architecture of centralised resource allocation, not the rhetoric of its critics, that incubates the authoritarian habit. The substantive argument is a critique of the Third Plan's investment pattern. With 65 per cent of investment resources sunk into the Public Sector and 57 per cent of that into 'heavy industries, mammoth river valley projects and costly social overheads,' the productive base for consumer goods, agriculture, textiles and trade is starved of capital.… ### Body ## Summary B. R. Shenoy's July 1962 Forum of Free Enterprise leaflet is a direct riposte to J. K. Galbraith, whose pronouncements during his tours of India had cast doubt on those who criticised central planning. Reporting from a Press conference in Ahmedabad, Shenoy notes Galbraith's claim that 'the present tempo of our planning might lead to an authoritarian regime' yet his simultaneous insistence that 'whenever somebody wants to denounce something, he says it is likely to lead to authoritarianism.' Shenoy turns the warning back on its author: it is the architecture of centralised resource allocation, not the rhetoric of its critics, that incubates the authoritarian habit. The substantive argument is a critique of the Third Plan's investment pattern. With 65 per cent of investment resources sunk into the Public Sector and 57 per cent of that into 'heavy industries, mammoth river valley projects and costly social overheads,' the productive base for consumer goods, agriculture, textiles and trade is starved of capital. The arithmetic, Shenoy argues, is unsparing: agricultural production is in the hands of 67 million independent farmers cultivating an average 5.5 acres each, and textile output emerges from 478 mills, 80,000 to 90,000 powerlooms and 2 million handlooms — yet planning channels capital away from these sectors. The consequence has been an Indian national income rising at roughly 3.5 per cent a year over the preceding decade against the 8–10 per cent the basic-needs strategy would yield, with food and cloth consumption stagnant or in decline. Against this, Shenoy offers what he calls 'planning for the free market under the aegis of consumer sovereignty' — pointing to the West German miracle, the EEC, Israel, Japan, Hong Kong, Spain and the Philippines as cases where market-led planning has produced 'blinding economic and social dividends.' He warns that this lesson has not reached New Delhi or Indian universities, where the imported authority of Galbraith, Millikan, Rostow, Ward, Balogh, Bettelheim, Lange and Robinson still props up the dirigiste consensus. The pamphlet closes with the prayer, 'Good Lord, protect me from my friends; against mine enemies I can defend myself' — a barb aimed at well-meaning Western advisers whose counsel, Shenoy holds, is more dangerous to Indian liberty than any avowed adversary. ## Key points - Rebuts J. K. Galbraith's argument — made during his India tours and a Press conference in Ahmedabad — that critics of planning court an authoritarian regime; Shenoy turns the charge around, arguing that centralised planning itself 'carries the very risks of authoritarianism' Galbraith claims to fear. - Identifies abject poverty as the central problem of underdeveloped countries and frames the policy question as whether eradicating it is best achieved through state planning or through the free market. - Documents that the Public Sector will absorb 65 per cent of Third Plan investment resources and that 57 per cent of plan outlay is going into heavy industry, river valley projects and social overheads — at the expense of agriculture, textiles and consumer-goods industries that produce for mass needs. - Quantifies the productive base being neglected: 67 million farmers averaging 5.5 acres each, 478 textile mills, 80,000–90,000 powerlooms and 2 million handlooms — all in independent hands and starved of capital by the plan's allocation choices. - Argues that re-directing investment toward consumer-good sectors and letting individual production units plan via the market would yield 8–10 per cent annual income growth alongside rising food and cloth output — versus the actual 3.5 per cent national-income growth and stagnant or declining mass consumption of the past decade. - Cites West Germany's post-war miracle, the EEC, Israel, Japan, Hong Kong, Spain, the Philippines and the United Kingdom's eagerness to join the EEC as evidence that 'planning for the free market' under consumer sovereignty has produced superior economic and social outcomes. - Names the imported intellectual authority sustaining Indian dirigisme — Galbraith, Millikan, Rostow, Ward, and left-wing figures Balogh, Bettleheim, Lange and Robinson — as 'illicit beneficiaries of planning' whose expositions stand in the way of Indians appreciating free-market potentialities. - Closes with the prayer 'Good Lord, protect me from my friends; against mine enemies I can defend myself,' positioning sympathetic Western planning advocates as a graver threat to Indian liberty than declared adversaries. --- ## [Primary work] Controlling Inflation URL: https://indianliberals.in/primary-works/controlling-inflation-dr-s-k-rao-december-6-2007/ ### Summary Controlling Inflation is a Forum of Free Enterprise booklet (Mumbai, 6 December 2007) that pairs two addresses on India's mid-2000s inflation against the backdrop of surging food and crude oil prices and the Reserve Bank of India's tightening cycle. Minoo R. Shroff's introduction (Mumbai, 16 November 2007) frames the booklet as a contribution by two 'eminently qualified' authors who diagnose the causes of price rise and propose pragmatic remedies in monetary, fiscal and supply-side policy, with particular emphasis on the credibility gap between the official Wholesale Price Index and the inflation that 'common man' households actually experience. The first essay, by Dr. S.R.K. Rao (formerly Principal Adviser, Reserve Bank of India), reworks a 4 June 2007 talk delivered at an Economics Research Centre (ERC) seminar held jointly with the Forum and the Indian Liberal Group in Mumbai. Rao argues that India alone among large economies measures headline inflation through the Wholesale Price Index — a commodity index that ignores services, housing, transport, education and the unorganised sector — and lays the blame for the credibility gap at the door of 'FOG — Failure of Governance', tracing the diagnosis through four causes: commodity-price hardening, supply-demand mismatch in foodgrains, the 'Dilemma of Capital Inflows' from foreign-exchange and FII money (much of it 'hot'), and rising off-balance-sheet public expenditure that threatens FRBM Act 2003 targets. His concrete proposals include an Agricultural Debt Redemption Corporation refinancing small farmers via 10–15-year produce bonds, a stronger public distribution system, vigilance over speculative inflows and strict adherence to the FRBM Act, closing with the line that monetary policy alone cannot curb inflation — fiscal restraint and political pragmatism must work in tandem. The second essay, by S.S. Bhandare (formerly Economic Adviser to Tatas), reprints a 29 July 2007 article from MEDC's Monthly News Digest assessing whether the moderation of WPI inflation from 6.7% in February 2007 to 4.3% by end-June 2007 is sustainable. Bhandare shows long-term WPI inflation falling structurally from 10.6% (1991–96) to 4.9% (2001–07) thanks to deregulation, liberalised imports and CENVAT/State VAT rationalisation, but warns that the wholesale figure diverges sharply from CPIs for industrial workers, agricultural labour and the urban middle class (all near 8%) — so the 'common man' still feels inflation 'is still high, and hurting them the most'. He identifies five sustainability risks (liquidity overhang from M3 growth, surging crude prices, basic-industry capacity constraints, infrastructure bottlenecks, and a manpower-driven 'wage push' in services) and outlines a five-pronged strategy — the next agricultural revolution, energy security, infrastructure modernisation, manpower capacity-building and good fiscal governance — concluding soberly that 'the battle against inflation is far from over'. ### Body ## Summary Controlling Inflation is a Forum of Free Enterprise booklet (Mumbai, 6 December 2007) that pairs two addresses on India's mid-2000s inflation against the backdrop of surging food and crude oil prices and the Reserve Bank of India's tightening cycle. Minoo R. Shroff's introduction (Mumbai, 16 November 2007) frames the booklet as a contribution by two 'eminently qualified' authors who diagnose the causes of price rise and propose pragmatic remedies in monetary, fiscal and supply-side policy, with particular emphasis on the credibility gap between the official Wholesale Price Index and the inflation that 'common man' households actually experience. The first essay, by Dr. S.R.K. Rao (formerly Principal Adviser, Reserve Bank of India), reworks a 4 June 2007 talk delivered at an Economics Research Centre (ERC) seminar held jointly with the Forum and the Indian Liberal Group in Mumbai; it lays the blame for India's inflation at the door of 'FOG — Failure of Governance'. The second, by S.S. Bhandare (formerly Economic Adviser to Tatas), reprints a 29 July 2007 article from MEDC's Monthly News Digest that assesses whether the moderation of WPI inflation from 6.7% in February 2007 to 4.3% by end-June 2007 is sustainable, and outlines a five-point strategy — agricultural revolution, energy security, infrastructure, manpower capacity, and fiscal governance — to consolidate that gain. ## Essays ### Controlling Inflation *By Dr. S.R.K. RAO* Dr. S.R.K. Rao opens by arguing that India alone among large economies measures headline inflation through the Wholesale Price Index, a commodity index that ignores services, housing, public utilities, transport, education and the unorganised sector, leaving a wide credibility gap between the government's 3–4% figure and the prices the housewife actually faces. He coins the diagnosis 'FOG — Failure of Governance' and applies it to four causes that the Finance Minister had identified: hardening prices of metals and crude oil (where the government should have used public-sector agencies abroad to send early warnings), supply-demand mismatch in sugar, wheat, pulses and oil (where the Agriculture Ministry crossed bridges only when reached), the income build-up from foreign exchange and FII inflows (the 'Dilemma of Capital Inflows', made worse because most inflows are 'hot money'), and rising public expenditure (where Oil Bonds, Small Savings and other off-balance-sheet liabilities understate the fiscal deficit and threaten the FRBM Act 2003 targets). In his policy suggestions Rao calls for an end to ad-hoc anti-inflation measures, scientific medium- and long-term planning for agriculture, the setting up of an Agricultural Debt Redemption Corporation that would buy out moneylender debts of small and marginal farmers against ten-to-fifteen-year produce bonds, a strengthened public distribution system, vigilance over the 'quantity as well as the quality' of capital inflows including detection of laundered money entering under different 'labels', and binding adherence to the FRBM Act. His closing line is that monetary policy alone cannot curb inflation: fiscal policy must work in tandem, and political considerations must give way to pragmatism. - WPI is a commodity index that misses services, housing, transport, education and the unorganised sector, opening a credibility gap with the inflation common households actually experience. - Rao's overarching diagnosis is 'FOG — Failure of Governance', applied to commodity hardening, supply-demand mismatch, capital-inflow-driven money supply, and rising public expenditure. - He cites an estimate that nearly 75% of recent capital inflows are 'hot money' (Hindustan Times, 12 April 2007), making sterilisation costly and the Dilemma of Capital Inflows acute. - Public debt is 62% of GDP and off-balance-sheet liabilities such as Oil Bonds (Rs. 28,000 crore in 2007) plus Sixth Pay Commission obligations risk 'side-stepping' the FRBM Act targets. - Concrete proposals: an Agricultural Debt Redemption Corporation refinancing small farmers via 10–15-year produce bonds, a stronger PDS, curbs on POL subsidies, and stricter monitoring of speculative inflows. - Closing message: monetary policy alone cannot curb inflation — fiscal restraint, efficient governance and political pragmatism must work in tandem. ### Strategizing the Battle Against Inflation: How Far Are We? *By S.S. BHANDARE* S.S. Bhandare welcomes the RBI's apparent success in pulling headline WPI inflation down from 6.7% in early February 2007 to about 4.3% by the week ending 30 June 2007, but argues that the picture is more complicated than the 'mood of self-congratulation' suggests. The wholesale figure diverges sharply from Consumer Price Indices for industrial workers, agricultural labour and the urban middle class — all of which remained near 8% — so the 'common man' continues to feel that inflation 'is still high, and hurting them the most'. Reviewing the post-reform period, Bhandare shows long-term WPI inflation falling from 10.6% (1991–96) to 4.9% (2001–07), a structural softening he attributes to deregulation, liberalised imports and the CENVAT / State VAT rationalisation that intensified competition. The second half of the address asks whether this softening is sustainable. Bhandare identifies a liquidity overhang from rapid M3 growth, surging international crude prices (the Indian basket at $73.96/barrel in mid-July 2007, up from $62.46 in 2006-07), capacity constraints in basic industries, infrastructure bottlenecks and a 'wage push' from manpower shortages in skilled services as the main risks to a sustained low-inflation regime. He calls for a broader-based 'national Producers Prices Index', harmonisation of CPI base years to 2005-06, and a five-pronged strategy: the next agricultural revolution, energy security, expansion and modernisation of critical infrastructure, capacity-building of manpower, and good fiscal governance. The closing note is sober: 'the battle against inflation is far from over'. - WPI inflation fell from 6.7% (early Feb 2007) to about 4.3% (week of 30 June 2007), but CPI for industrial workers, agricultural labour and the middle class hovered around 8%, signalling a divergence the 'common man' still feels. - Long-term WPI inflation has fallen from 10.6% (1991–96) to 5.1% (1996–2001) to 4.9% (2001–07), a structural softening driven by deregulation, import liberalisation and CENVAT / State VAT rationalisation. - Globalisation requires India's benchmark inflation to converge toward the 2–2.5% standard of major trading partners, well below the RBI's 5–5.5% target band. - Five sustainability risks: liquidity overhang from rapid M3 growth, surging crude prices (Indian basket $73.96/barrel in July 2007), basic-industry capacity constraints, infrastructure bottlenecks, and a manpower-driven 'wage push' in services. - Bhandare calls for a broader-based 'national Producers Prices Index' and harmonisation of CPI base years to 2005-06 in place of the existing 1993-94, 2000-01 and 1982 bases. - His closing strategy has five planks: the next agricultural revolution, energy security, expansion and modernisation of critical infrastructure, manpower capacity-building, and good fiscal governance. --- ## [Primary work] CONTROLS AND FREEDOM URL: https://indianliberals.in/primary-works/controls-and-freedom-a-d-shroff-dec8-1960/ ### Summary Delivered as a Forum of Free Enterprise lecture in Bombay on 18 August 1960, M. A. Sreenivasan's pamphlet argues that controls and freedom are not antitheses — disciplined, self-imposed and rule-bound controls are in fact necessary for genuine liberty, while the proliferating peacetime controls of independent India have become its enemy. Drawing on his own experience as Minister for Food and Civil Supplies in princely Mysore, Sreenivasan recalls administering a 'bewildering maze of controls and permits and licences — a veritable Queutopia' during the war, and warns that the post-Independence state has multiplied such restrictions far beyond anything the colonial Defence of India Act ever imposed, until controls now reach into industry, agriculture, banking, transport, prices and even morals through Prohibition. The heart of the polemic is a sustained contrast between wartime and peacetime controls. Wartime controls, he writes, were 'plain, obvious and unsophisticated', justified by genuine emergency and self-limiting in scope.… ### Body ## Summary Delivered as a Forum of Free Enterprise lecture in Bombay on 18 August 1960, M. A. Sreenivasan's pamphlet argues that controls and freedom are not antitheses — disciplined, self-imposed and rule-bound controls are in fact necessary for genuine liberty, while the proliferating peacetime controls of independent India have become its enemy. Drawing on his own experience as Minister for Food and Civil Supplies in princely Mysore, Sreenivasan recalls administering a 'bewildering maze of controls and permits and licences — a veritable Queutopia' during the war, and warns that the post-Independence state has multiplied such restrictions far beyond anything the colonial Defence of India Act ever imposed, until controls now reach into industry, agriculture, banking, transport, prices and even morals through Prohibition. The heart of the polemic is a sustained contrast between wartime and peacetime controls. Wartime controls, he writes, were 'plain, obvious and unsophisticated', justified by genuine emergency and self-limiting in scope. Independent India's controls, by contrast, are 'subtler, more refined, more pervading and less obvious… not ugly coils of barbed wire' but 'high-walled prisons of polished marble', sanctified by the language of planning and the Five-Year Plans, breeding hardship, evasion, the black market and corruption in turn. Sreenivasan invokes Gandhiji's preference for Swadharma over 'the violence of the State', Rajaji's lifting of food rationing in Madras, and Bertrand Russell on the absurdities Government can persuade citizens to swallow, to argue that the country's planners have lost faith in the capacity of ordinary Indians to raise their living standards through free enterprise. The closing pages frame a half-serious 'remedial' programme: further controls — but only on deficit financing, currency printing, the imposition of new controls, and political speech-making — as a satirical mirror of the regulatory mentality. The pamphlet ends with an exhortation to await the 'end of Control-Raj and the attainment of Swaraj', echoing the Forum of Free Enterprise's broader insistence that private initiative, hedged by minimal and impartial rules of the road, is the only durable basis for a free society. ## Key points - Frames controls and freedom as complementary rather than opposed: a free economy needs rules that 'regulate and safeguard' like traffic regulation, not 'road blocks' that regiment and emasculate. - Draws on the author's own service as Minister for Food and Civil Supplies in princely Mysore to describe the wartime control bureaucracy as a 'Queutopia' of permits, licences and rationing — and treats it as freer than independent India in 1960. - Argues that post-Independence controls have outgrown their wartime ancestors in reach and subtlety, extending to industry, agriculture, banking, foreign exchange, transport, the price of bread and personal morals (Prohibition). - Identifies a behavioural chain — control begetting hardship, resentment, evasion, black-marketing and corruption — as the predictable economic consequence of pervasive regulation. - Reads the planners' faith in controls as a loss of confidence in citizens: the State assumes the role of provider and educator while denying that ordinary Indians can improve their condition through free enterprise. - Invokes Gandhiji's Swadharma and his warning against 'the violence of the State' to argue that the only fully legitimate controls are self-imposed ones rooted in conscience and Dharma. - Cites Rajaji's abolition of food controls in Madras as a concrete demonstration that Indian leaders capable of dismantling the apparatus do exist, and praises 'lovers of freedom' who would 'not hanker for power'. - Closes with a satirical four-point counter-programme of 'antidotes' — controls on deficit financing, currency printing, the creation of new controls, and political speech-making — as a polemical mirror of the regulatory mind. --- ## [Primary work] CONTROLS IN A PLANNED ECONOMY URL: https://indianliberals.in/primary-works/controls-in-a-planned-economy-a-d-shroff-november-8-1960/ ### Summary A. D. Shroff's lecture, delivered under the auspices of the Forum of Free Enterprise in Bombay on September 1, 1960 and issued as a pamphlet, argues that the apparatus of controls erected to implement India's Second Five-Year Plan has grown so dense that it has begun to obstruct the very development it was meant to serve. Shroff invokes Hayek's warning that economic control is the control of the means for all our ends, and surveys, sector by sector, the maze of statutes — the Companies Act, the Industries (Development and Regulation) Act, foreign-exchange control, the Controller of Capital Issues, textile control, sugar control, banking control — that an industrialist must navigate before a project can begin. The second half of the lecture moves from incident to indictment. Controls, Shroff contends, distort competition, breed vested interests inside the bureaucracy, and reliably generate black markets — a point he reinforces by quoting Winston Churchill.… ### Body ## Summary A. D. Shroff's lecture, delivered under the auspices of the Forum of Free Enterprise in Bombay on September 1, 1960 and issued as a pamphlet, argues that the apparatus of controls erected to implement India's Second Five-Year Plan has grown so dense that it has begun to obstruct the very development it was meant to serve. Shroff invokes Hayek's warning that economic control is the control of the means for all our ends, and surveys, sector by sector, the maze of statutes — the Companies Act, the Industries (Development and Regulation) Act, foreign-exchange control, the Controller of Capital Issues, textile control, sugar control, banking control — that an industrialist must navigate before a project can begin. The second half of the lecture moves from incident to indictment. Controls, Shroff contends, distort competition, breed vested interests inside the bureaucracy, and reliably generate black markets — a point he reinforces by quoting Winston Churchill. He illustrates the lop-sidedness of administration through the diversion of scarce foreign exchange to import 160 Dodge cars for ministers and officials at the height of an austerity drive, and through stricter rules on share issues by established companies. He also cites Northcote Parkinson's laws as a portrait of the kind of officialdom that planned controls inevitably grow. The closing pages turn to monetary policy: the Reserve Bank's increased Cash Reserve Ratios in March and May 1960 have failed to halt prices, because the government continues to pump new money into circulation faster than goods can match it. Shroff frames the Labour Party's recanting of nationalisation (citing Douglas Jay) as a cautionary tale India should heed before committing further to a "socialistic pattern of society." His remedy is not technocratic but civic: only the mobilisation of informed public opinion, he argues, can arrest the inflation and force a retreat from the "crazy and mad race for unrealistic development through excessive and frustrating control." ## Key points - Shroff opens by accepting that some planning controls are necessary but argues India's controls have crossed the line into hindering the development they are meant to foster. - He cites Hayek's Road to Serfdom to frame economic control as control of the means for all human ends, not merely one sector. - He catalogues the regulatory stack — Companies Act, Industries (Development and Regulation) Act, Controller of Capital Issues, foreign-exchange control, local-authority approvals — that any industrialist must clear before raising capital or importing machinery. - Controls, he argues, breed vested interests inside the bureaucracy itself: the Ministry of Commerce & Industry and Finance Ministry posts (Joint, Deputy, Under Secretaries) exist to administer controls and will resist their removal. - Controls inevitably create black markets (quoting Churchill on the corrosion of respect for law) and produce lop-sided enforcement, exemplified by the diversion of scarce foreign exchange to import 160 Dodge cars for ministers and officials. - He invokes Northcote Parkinson's laws to characterise an officialdom that expands to fill the time and revenue available, and warns the same dynamic is entrenched in India's Soviet-type planned economy. - On monetary policy, Shroff argues the Reserve Bank's March and May 1960 Cash Reserve Ratio hikes cannot halt prices while the government continues to pump crores of new money into circulation without matching production. - Citing the British Labour Party's public retreat from nationalisation (via Douglas Jay), he urges India to learn from foreign experience before extending the "socialistic pattern of society", and closes by calling on the thinking public to mobilise opinion against the system of controls. --- ## [Primary work] Convertibility of Rupee on Capital Account URL: https://indianliberals.in/primary-works/convertibility-of-rupee-on-capital-account-dr-s-r-k-rao/ ### Summary Dr. S.R.K. Rao's pamphlet, based on a 30 September 1997 talk under the auspices of the Forum of Free Enterprise, is a primer on capital account convertibility (CAC) and a stocktaking of where India stood at that moment. Rao defines convertibility on capital account as the freedom to swap local for foreign financial assets and vice versa at market-determined exchange rates without government controls, then lists its advantages: deeper integration with the global economy, cheaper access to foreign capital, portfolio diversification, alignment of domestic with international interest and tax regimes, deterrence of capital flight, and the development of a derivatives and risk-management market. The bulk of the pamphlet works through the preconditions and sequencing recommended by the Reserve Bank of India's Committee on Capital Account Convertibility (the Tarapore Committee): fiscal consolidation, an inflation target of 3–5 per cent, financial-sector strengthening, reduction of bank non-performing assets from 13.7 per cent to 5 per cent by 2000 A.D., a cut in average effective CRR to 3 per cent, an REER monitoring band of ±5 per cent, a rise in the current-receipts-to-GDP ratio from … ### Body ## Summary Dr. S.R.K. Rao's pamphlet, based on a 30 September 1997 talk under the auspices of the Forum of Free Enterprise, is a primer on capital account convertibility (CAC) and a stocktaking of where India stood at that moment. Rao defines convertibility on capital account as the freedom to swap local for foreign financial assets and vice versa at market-determined exchange rates without government controls, then lists its advantages: deeper integration with the global economy, cheaper access to foreign capital, portfolio diversification, alignment of domestic with international interest and tax regimes, deterrence of capital flight, and the development of a derivatives and risk-management market. The bulk of the pamphlet works through the preconditions and sequencing recommended by the Reserve Bank of India's Committee on Capital Account Convertibility (the Tarapore Committee): fiscal consolidation, an inflation target of 3–5 per cent, financial-sector strengthening, reduction of bank non-performing assets from 13.7 per cent to 5 per cent by 2000 A.D., a cut in average effective CRR to 3 per cent, an REER monitoring band of ±5 per cent, a rise in the current-receipts-to-GDP ratio from 15 to 28 per cent, and a forex-reserve cushion of at least six months of imports. Rao tracks the liberalisation already undertaken since 1991 — devaluation, opening of FDI ceilings to 74/51 per cent, GDR and FCCB issues, FII access to debt markets, NRI deposit schemes shorn of exchange-rate guarantees, and current-account convertibility under IMF Article VIII in August 1994 — and notes that the RBI's 1996-97 Annual Report broke with the Committee by favouring an "eclectic" approach that liberalises while preconditions are still being met. A second half of the pamphlet examines sectoral consequences: stiff competition for banks with mergers, restructuring and pressure on small/regional banks; NPA reduction and risk-management upgrades; stock-market gains tempered by the need for international reporting norms, depositories, derivatives, T+1/T+3 settlement and end-to-end transparency; and a thin forward forex market that needs deepening if the rupee is to be insulated against volatility. Rao registers the perception that CAC will trigger capital flight, then cites Deputy Governor Y.V. Reddy's empirical rebuttal and former Governor S. Venkitaramanan's claim that the rupee is already three-fourths convertible. The pamphlet closes with a cautionary glance at the 1997 Asian currency crisis — Malaysia's Mahathir Mohammad blaming foreign fund managers such as George Soros, UNCTAD's worry about short-term speculative inflows, and proposals for a Tobin tax, "Global Watch dogs" and ethics rules for fund managers. Rao reads the Tarapore sequencing pragmatically (25 of 40 recommendations are ready for 1997-98), welcomes the replacement of FERA by FEMA, and recommends India follow Japan/US/Chile-style central-bank legislation to track large flows even after CAC. ## Key points - Defines capital account convertibility as two-way market-rate convertibility of local and foreign financial assets without government controls — distinguishing it from already-achieved current account convertibility. - Lays out the advantages of CAC: integration with global capital markets, cheaper foreign capital, portfolio diversification, alignment of domestic tax and interest rates with international levels, deterrence of capital flight, and growth of derivatives markets. - Catalogues the Tarapore Committee's preconditions — fiscal deficit to 3.5% by 2000 A.D., inflation 3–5%, bank NPAs from 13.7% to 5%, CRR to 3%, REER ±5% band, current-receipts/GDP from 15% to 28%, debt-service ratio to 20%, six-month forex reserve buffer. - Traces India's incremental liberalisation since July 1991 — devaluation, FDI ceilings raised to 74/51%, GDRs and FCCBs, FII access, NRI deposit reforms, Article VIII current-account convertibility from August 1994. - Highlights the divergence between the RBI's preferred "eclectic" approach and the Committee's preference for fulfilling preconditions before moving further toward CAC. - Sectoral impact: bank consolidation and pressure on small/regional banks, urgent NPA reduction, stock-exchange upgrades (depositories, derivatives, T+1/T+3 settlement, international reporting), and the need to deepen a thin forward forex market. - Treats the 1997 Asian/Malaysian currency crisis as a cautionary tale on weak banking, unregulated short-term flows and speculative attacks — citing Mahathir's clash with George Soros and UNCTAD's findings, and listing Tobin-tax-style remedies. - Recommends replacing FERA with FEMA, retaining central-bank monitoring of large inflows and outflows on the Japan/US/Chile model, and moving on the 25 of 40 Tarapore recommendations that are immediately actionable. --- ## [Primary work] Convertibility of Rupee on Capital Account URL: https://indianliberals.in/primary-works/convertibility-of-rupee-on-capital-market-by-s-r-k-rao-1997/ ### Summary Dr. S. R. K. Rao, a former Principal Adviser to the Reserve Bank of India, uses this Forum of Free Enterprise booklet — based on a talk delivered in Mumbai on 30 September 1997 — to assess whether India should move to full capital account convertibility (CAC) of the rupee. He opens with a working definition: a currency is convertible on capital account when residents can freely convert local financial assets into foreign assets and vice versa at market-determined exchange rates, without government controls. He then catalogues the advantages — integration with global capital markets, cheaper foreign capital, higher growth, portfolio diversification, deeper derivatives and risk-management products, and alignment of the domestic tax regime with developed economies. The bulk of the booklet maps the pre-conditions for a successful transition and tracks the steps India has already taken.… ### Body ## Summary Dr. S. R. K. Rao, a former Principal Adviser to the Reserve Bank of India, uses this Forum of Free Enterprise booklet — based on a talk delivered in Mumbai on 30 September 1997 — to assess whether India should move to full capital account convertibility (CAC) of the rupee. He opens with a working definition: a currency is convertible on capital account when residents can freely convert local financial assets into foreign assets and vice versa at market-determined exchange rates, without government controls. He then catalogues the advantages — integration with global capital markets, cheaper foreign capital, higher growth, portfolio diversification, deeper derivatives and risk-management products, and alignment of the domestic tax regime with developed economies. The bulk of the booklet maps the pre-conditions for a successful transition and tracks the steps India has already taken. Rao stresses that capital account convertibility and domestic economic reforms are inseparable: fiscal consolidation, a manageable inflation target, deregulated interest rates, reduced cash reserve ratios, lower banking-sector NPAs, a strengthened balance-of-payments position, and at least six months of forex reserves must move in tandem. He chronicles India's progressive liberalisation since the July 1991 devaluation — automatic FDI approvals, FIPB and SIA mechanisms, FERA amendments, the August 1994 acceptance of Article VIII obligations of the IMF (current account convertibility), the unified market-determined exchange rate of March 1993, and the opening of GDR, FCCB, FCNR(B) and NRNRRD windows. Rao then walks through the Tarapore Committee on Capital Account Convertibility's recommendations — a three-year sequenced roadmap with explicit targets (fiscal deficit down to 3.5 per cent by 2000 AD, inflation of 3–5 per cent, NPAs to 5 per cent, CRR to 3 per cent, debt service to 20 per cent of current receipts) — and contrasts it with the RBI's preferred "eclectic approach" of liberalising even as pre-conditions are being met. He surveys the likely effects on banks (mergers and "narrow banks"), financial institutions, stock exchanges (need for an efficient Depository, T+3 settlement, derivatives, international disclosure norms), and the rupee's exchange rate (RBI intervention only within a ±5 per cent band). The booklet closes with a cautionary look at the 1997 Asian crisis. Drawing on Y. V. Reddy and S. Venkitaramanan, and citing Mahathir Mohammad's denunciation of speculative currency trading as "unnecessary, unproductive and immoral," Rao endorses the post-Hong Kong proposals for a Tobin tax, "Global Watch dogs" and stronger disclosure standards for global fund managers. He welcomes the replacement of FERA by FEMA and concludes that India can no longer treat full CAC as an academic question — the prudent course is the eclectic one of pushing ahead while strengthening banks, markets and forex reserves. ## Key points - Defines capital account convertibility as the free two-way movement of financial assets between residents and non-residents at market-determined exchange rates, with no government controls except against transactions of an "undesirable nature". - Lists CAC's advantages: integration with global capital markets, cheaper foreign capital, higher growth, portfolio diversification, deeper derivatives and risk-management products, and alignment of the domestic tax regime with developed economies. - Argues that capital account convertibility and domestic economic reforms are inseparable — fiscal consolidation, manageable inflation, deregulated interest rates, reduced NPAs, a strong BOP and at least six months of forex reserves are essential pre-conditions. - Chronicles India's liberalisation since the July 1991 devaluation: FDI/FII access, FIPB/SIA approvals, FERA amendments, March 1993 unified market-based exchange rate, and August 1994 acceptance of Article VIII current account convertibility. - Summarises the Tarapore Committee's three-year sequenced roadmap and its quantitative targets (fiscal deficit 3.5 per cent, inflation 3–5 per cent, NPAs 5 per cent, CRR 3 per cent, debt-service 20 per cent of current receipts by 2000 AD). - Contrasts the Committee's "pre-conditions first" stance with the RBI's preferred "eclectic approach" of liberalising even as pre-conditions are being met, and sides with the latter. - Maps likely sectoral impacts: bank consolidation and "narrow banks", squeezed spreads, demands on stock exchanges for a Depository, T+3 settlement and international disclosure norms, and RBI intervention within a ±5 per cent band on the rupee. - Reads the 1997 Asian crisis through Mahathir Mohammad's denunciation of speculative currency trading and endorses post-Hong Kong proposals for a Tobin tax, "Global Watch dogs" and disclosure rules for global fund managers, while welcoming the FERA-to-FEMA transition. --- ## [Primary work] Cooperatives in the Changing Economy of India URL: https://indianliberals.in/primary-works/cooperatives-in-the-changing-economy-of-india/ ### Summary This Forum of Free Enterprise booklet, prepared by the Cooperative Development Foundation (CDF) of Hyderabad and reprinted from Liberal Times (Vol. VI, No. 1, 1998), argues that the cooperative form of enterprise has been systematically distorted in India by restrictive laws that turn member-driven associations into instruments of state control. The opening sections set out the theory of cooperation — a voluntary association in which members are primarily users (not investors) of services they jointly need, with democratic decision-making and use-based profit sharing — and apply that theory to rural savings, credit, dairy marketing and supply services to show why cooperatives are uniquely suited to economies of small producers and consumers that purely commercial banks and private companies tend to underserve. The middle of the booklet shifts to a sustained critique of Indian cooperative law.… ### Body ## Summary This Forum of Free Enterprise booklet, prepared by the Cooperative Development Foundation (CDF) of Hyderabad and reprinted from Liberal Times (Vol. VI, No. 1, 1998), argues that the cooperative form of enterprise has been systematically distorted in India by restrictive laws that turn member-driven associations into instruments of state control. The opening sections set out the theory of cooperation — a voluntary association in which members are primarily users (not investors) of services they jointly need, with democratic decision-making and use-based profit sharing — and apply that theory to rural savings, credit, dairy marketing and supply services to show why cooperatives are uniquely suited to economies of small producers and consumers that purely commercial banks and private companies tend to underserve. The middle of the booklet shifts to a sustained critique of Indian cooperative law. The author argues that most Indian "cooperatives" are state-promoted and state-controlled rather than user-controlled: cooperative Registrars across the country can refuse registration, classify and reclassify societies, amend bylaws, supersede boards, nominate directors, decide staffing, control investments, and even liquidate cooperatives over their members' objections. The judiciary, citing Daman Singh vs State of Punjab, has held that because cooperatives are "created by statute, they are controlled by statute," leaving the right of voluntary association largely hollow. The final third of the booklet narrates the Andhra Pradesh reform of 1995. Faced with a choice between repealing the old cooperative law, adding a chapter for self-reliant cooperatives, or enacting a parallel statute, the state government — backed by floor leaders of every political party — passed the Andhra Pradesh Mutually Aided Cooperative Societies (APMACS) Act, 1995, allowing member-created, member-driven cooperatives free of government share capital and the Registrar's heavy hand. Over 800 cooperatives were registered under the new law by 1996, when Bihar followed with similar legislation. The booklet closes by linking cooperative reform to the broader economic liberalisation of the late 1990s: if domestic and multinational business are being freed from unnecessary controls, the cooperative sector "groaning under unheard of controls" deserves the same relief, and may have more to offer growth and development than other forms of enterprise. ## Key points - Defines a cooperative as a voluntary association of users (not investors) with democratic decision-making and use-based profit sharing — distinguishing it from share-capital enterprises. - Shows that purely commercial banks and private companies cannot economically serve small savers, small borrowers, scattered dairy producers, and other dispersed users, leaving cooperatives a structural niche the market does not fill. - Argues that the moneylender exploits small borrowers (high rates, threatening behaviour, especially toward women, over-collateralisation, lump-sum repayment), and that the banker undercharges but underserves them. - Catalogues the powers Indian cooperative laws give the Registrar: refuse registration, classify societies, amend bylaws, supersede boards, nominate directors, decide staffing, control investments, liquidate at will. - Cites Daman Singh vs State of Punjab as the judicial articulation of the position that cooperatives, being statutory creatures, can be controlled by statute without violating freedom of association. - Describes Andhra Pradesh's three reform options in 1995 — repeal, special chapter, or parallel law — and explains why a parallel law was chosen so as not to disturb existing state-interest "cooperatives". - Reports the unanimous passage of the APMACS Act, 1995, the registration of over 800 mutually aided cooperatives by 1996, and Bihar's adoption of similar legislation. - Frames the cooperative reform as a logical extension of the liberalisation freeing domestic and multinational business from controls, and as a corrective to projecting "the market" as a panacea. --- ## [Primary work] Co-operative Farming URL: https://indianliberals.in/primary-works/cooperative-farming-sree-rama-murthy-jul5-1960/ ### Summary This 1960 Forum of Free Enterprise booklet collects the three prize-winning entries from the Forum's 1959 student essay competition on "Co-operative Farming." Judged by R. V. Murthy, Prof. C. L. Gheevala of the Indian Merchants' Chamber, and M. R. Pai, the volume presents essays by Sree Rama Murthy of Chirala (first prize), R. Venkata Ramana Rao of Quilon (second), and B. P. Patel of Surat (third). All three essays converge on a sceptical verdict: although the Indian National Congress at its Nagpur session (1959) made joint co-operative farming the centrepiece of agrarian policy, the contributors argue that pooling land under joint management is economically unproven, psychologically alien to Indian peasant attachment to the soil, and impossible to introduce without coercion. ### Body ## Summary This 1960 Forum of Free Enterprise booklet collects the three prize-winning entries from the Forum's 1959 student essay competition on "Co-operative Farming." Judged by R. V. Murthy, Prof. C. L. Gheevala of the Indian Merchants' Chamber, and M. R. Pai, the volume presents essays by Sree Rama Murthy of Chirala (first prize), R. Venkata Ramana Rao of Quilon (second), and B. P. Patel of Surat (third). All three essays converge on a sceptical verdict: although the Indian National Congress at its Nagpur session (1959) made joint co-operative farming the centrepiece of agrarian policy, the contributors argue that pooling land under joint management is economically unproven, psychologically alien to Indian peasant attachment to the soil, and impossible to introduce without coercion. ## Essays ### I *By Sree Rama Murthy* Sree Rama Murthy opens by parsing the four meanings of "co-operative farming" — better farming, joint farming, collective farming, and tenant farming — and notes that only the latter two extinguish individual ownership. Drawing on the Andhra Law Reforms Committee, the experience of China, the U.S.S.R., and Yugoslavia, and the testimony of foreign agricultural economists such as Prof. J. A. Venn and Dr. Chandrasekhar, he argues that the case for joint farming is unsupported by Indian evidence: most of the thousand-odd Government-sponsored societies have been founded only on refugee or landless settlement schemes, the Planning Commission's own survey of twenty societies found that in ten of them members did no farm work at all, and the peasant's attachment to his land is so deep that any policy aimed at dispossession will be resisted. Murthy concludes that compulsory co-operativisation is a "contradictory concept" in a democracy: persuasion will not produce voluntary pooling, while compulsion will degenerate into "undemocratic regimentation." He proposes that the State confine itself to building service co-operatives — credit, marketing, processing, input supply — and to creating a land-rights environment in which the cultivator can till his own holding. He coins this alternative "Co-operative Individual Farming" or "Co-operative Peasant Farming" and offers it as the only model compatible with both productivity and freedom. - Distinguishes four kinds of agricultural co-operation and isolates joint and collective farming as the controversial cases that abolish individual ownership. - Cites the Planning Commission's own survey: in 10 of 20 sample co-operative farming societies, members did no farm work; in 13 societies the work was done by hired hands rather than by member-cultivators. - Argues from foreign experience — China, U.S.S.R., Yugoslavia, Palestine — that successes were driven by extraordinary religious or political conditions absent in India. - Identifies peasant attachment to land and family-based cultivation as the binding constraint that defeats joint farming on Indian soil. - Proposes "Co-operative Individual Farming" — service co-operatives plus secure individual land rights — as the workable middle path. ### II *By R. Venkata Ramana Rao* R. Venkata Ramana Rao frames co-operative farming as a productivity question first: a country in which 80% of the people live on the land and 48% of national income comes from agriculture cannot afford a farm policy that fails the food-production front. He summarises the main features of the Nagpur Resolution — joint cultivation with retained property rights, ceilings on existing holdings, surplus land vesting in Panchayats, and service co-operatives organised within three years — and accepts service co-operation as both useful and feasible. He rejects joint and collective farming on the strength of foreign evidence: Russian and Chinese collectivisation succeeded only under compulsion driven by industrial labour needs, Israeli kibbutz farming rested on religious-cultural cohesion, and Yugoslavia abandoned collective farming when output fell and peasant tax-paying capacity collapsed. From these comparisons Rao infers that joint farming in India would reduce the individual owner to a nullity, blunt the personal attention that crops and cattle require, swell the State payroll, encourage shirking once profit is decoupled from one's own field, and disrupt family relationships. His verdict is that co-operative farming, although an attractive ideal, cannot be implemented successfully in Indian conditions and must be deferred in favour of service co-operatives and individual cultivation. - Accepts the Nagpur Resolution's call for service co-operatives but rejects pooled joint cultivation as the next step. - Reads Russian and Chinese collectivisation as products of forced industrial labour-shedding, not as voluntary agricultural models. - Notes Yugoslavia's retreat from collective farming once output fell and peasants withdrew tax-paying capacity. - Identifies the loss of individual ownership and the disruption of family-cropping rhythms as the structural defects of joint farming. - Concludes that co-operative farming is an ideal that cannot be implemented in India given its multifarious problems. ### III *By B. P. Patel* B. P. Patel argues the question of voluntariness head-on. He observes that the Indian farm is too small and scattered to admit the economies of scale that proponents of joint farming claim, and that boundary lines on Kyari (paddy) and Jarayat (dry) holdings are functional protections against erosion rather than wasteful relics. The Indian farmer, he writes, is bound to his land by ancestral attachment, animal husbandry, family labour, and social status; under co-operative compulsion he would work "slow, work less, with less care, like an automaton or a cog in the whole machine." Patel then catalogues the indirect coercions through which the State would, in practice, force the small peasant into co-operative societies: registrar control over loans, seed, fertiliser, transport and irrigation priority; the routing of sugarcane through co-operatively run factories; the legislative power to fix ceilings and divert surplus land to landless members only on condition of joining. He concludes that the co-operative movement is sliding from Sahkari (voluntary) into Sarkari (State-run), and that even Acharya Vinoba Bhave has chosen to distribute Bhoodan lands to landless individuals rather than to collectives — a final verdict, for Patel, that co-operative farming is "unsuitable and undesirable in India." - Argues that small, scattered Indian holdings cannot yield economies of scale once boundary protections against erosion are factored in. - Lists the indirect coercions — subsidy, loan, seed, fertiliser, sugarcane procurement, ceiling laws — by which the State will, in practice, force voluntary co-operation. - Warns that co-operative bureaucratisation will swell the Registrar's establishment and route patronage through paid managers rather than members. - Captures the slippage as a shift from Sahkari (voluntary) to Sarkari (State-run) co-operation. - Invokes Vinoba Bhave's distribution of Bhoodan land to individual cultivators as evidence that even sympathetic moral authorities reject collectivisation. --- ## [Primary work] Corporate Governance – A Practitioner's Perspective URL: https://indianliberals.in/primary-works/corporate-governance-a-practitioners-perspective-dr-mukund-rajan/ ### Summary Corporate Governance — A Practitioner's Perspective is the printed text of Dr. Mukund Rajan's inaugural keynote at the Forum of Free Enterprise's residential program on taxation held 2–4 August 2018 at the Gateway Hotel, Nashik. Speaking as a self-described practitioner who spent two decades inside the Tata Group, latterly as its Chief Ethics Officer, Rajan distinguishes ethics — 'doing the right things by stakeholders' and following the 'spirit' of right conduct — from compliance, which is rule-based and tracks the 'letter' of the law. He uses the Tata structure of Company and Local Ethics Counsellors and a separate cadre of Compliance Officers (for anti-bribery, anti-money-laundering, insider-trading and POSH matters) to illustrate how a large group operationalises both. Rajan's central diagnosis, framed early in the address, is that 'corporates today operate in an environment of significantly diminished trust.' He marshals roughly a decade-and-a-half of crises — the dot-com bust, Enron, the 2008 global financial crisis, Volkswagen's emissions fraud and the resulting USD 15+ billion in fines, and the 2018 collapse in Facebook's market capitalisation (a USD 119 billion single-d… ### Body ## Summary Corporate Governance — A Practitioner's Perspective is the printed text of Dr. Mukund Rajan's inaugural keynote at the Forum of Free Enterprise's residential program on taxation held 2–4 August 2018 at the Gateway Hotel, Nashik. Speaking as a self-described practitioner who spent two decades inside the Tata Group, latterly as its Chief Ethics Officer, Rajan distinguishes ethics — 'doing the right things by stakeholders' and following the 'spirit' of right conduct — from compliance, which is rule-based and tracks the 'letter' of the law. He uses the Tata structure of Company and Local Ethics Counsellors and a separate cadre of Compliance Officers (for anti-bribery, anti-money-laundering, insider-trading and POSH matters) to illustrate how a large group operationalises both. Rajan's central diagnosis, framed early in the address, is that 'corporates today operate in an environment of significantly diminished trust.' He marshals roughly a decade-and-a-half of crises — the dot-com bust, Enron, the 2008 global financial crisis, Volkswagen's emissions fraud and the resulting USD 15+ billion in fines, and the 2018 collapse in Facebook's market capitalisation (a USD 119 billion single-day loss after the Cambridge Analytica/data-privacy fallout) — to argue that even the world's largest firms now suffer brand-equity erosion or extinction when governance fails. The Indian half of the picture is a 'catharsis' against corruption: the Satyam, 2G and coal scams, sitting CEOs and politicians being jailed, the rise of the Aam Aadmi Party in 2012 on an anti-corruption platform, and the EY Asia Pacific Fraud Survey 2017 finding that 78% of Indian respondents agree bribery and corrupt practices occur widely in India. The rendered pages then map the policy and civic responses. On the state side, Rajan reads spectrum auctions, more objective allocation of mining rights and bank licences, demonetisation, the Insolvency and Bankruptcy Code and the Goods and Services Tax as a deliberate attempt to clean up 'crony capitalism' — a phrase he uses bluntly. On the civic side, he points to social-media-enabled scrutiny (the #MeToo movement, rapper Sofia Ashraf's viral 'Kodaikanal Won't' song against Unilever's mercury-thermometer plant), cross-jurisdictional reach of laws such as the UK Bribery Act, and the Panama Papers fallout that contributed to Nawaz Sharif's exit in Pakistan. He cites a 2017 PwC study showing more CEOs being dismissed for ethical lapses — interpreted not as worsening behaviour but as tighter scrutiny. The last section in the rendered chunk pivots to what Rajan calls genuinely new pressures on corporate ethics: the environmental crisis and rising inequality. He introduces the concept of Earth Overshoot Day — the date when humanity's annual demand on ecological resources exceeds what Earth can regenerate — and notes it now arrives in August rather than 31 December. The Paris Climate Accord, he argues, gets the world to a 2°C ceiling at best; the real target is 1.5°C. Urbanisation compounds the strain — over a billion people will move to cities in the next decade, and 10 of the top 20 most polluted cities in the WHO ambient-air database are in India. The text breaks off mid-discussion of urban environmental disasters, with Rajan citing the 2015 Chennai floods. ## Key points - Rajan defines the ethics/compliance distinction operationally: ethics is value-based and follows the 'spirit' of right conduct ('even when nobody is looking'), while compliance is rules-based and follows the 'letter' of the law. - He describes the Tata Group's two-track governance plumbing — Company Ethics Counsellors backed by Local Ethics Counsellors drawn from HR, admin and internal audit, alongside a separate set of Compliance Officers for anti-bribery, AML, insider-trading and POSH matters. - The framing diagnosis is a trust deficit: corporates today operate in 'an environment of significantly diminished trust', evidenced by the dot-com bust, Enron, the 2008 crisis, Volkswagen's emissions fraud and Facebook's USD 119 billion one-day market-cap loss after the data-privacy scandal. - On India, Rajan reads the past decade as a corruption catharsis — Satyam, 2G, coal, jailed CEOs and politicians, the rise of the Aam Aadmi Party in 2012 — and cites the EY Asia Pacific Fraud Survey 2017 (78% of Indian respondents say bribery and corrupt practices occur widely; 58% would still work for organisations involved in fraud). - Policy responses he endorses as anti-cronyism: public spectrum auctions, more objective mining/banking-licence allocation, demonetisation, the Insolvency and Bankruptcy Code, and GST. - Civic scrutiny has gone global and viral — the UK Bribery Act has extra-territorial reach against Indian firms, the Panama Papers contributed to Nawaz Sharif's exit, and #MeToo plus Sofia Ashraf's 'Kodaikanal Won't' show how no firm can outrun its past. - Two genuinely new ethical pressures, in Rajan's reading, are environmental impact and inequality: Earth Overshoot Day now falls in August, the Paris Accord at best caps warming at 2°C while 1.5°C is the real need, and 10 of the world's 20 most polluted cities are Indian. - Rajan invokes the Tata '4Es' framework (Education, Entrepreneurship, Employment, Employability) and the Tata Code of Conduct/Brand Equity and Business Promotion Agreement as practical instruments of corporate governance. --- ## [Primary work] Corporate Governance in India URL: https://indianliberals.in/primary-works/corporate-governance-in-india-by-k-b-dadiseth-1997/ ### Summary Delivered as the 32nd A. D. Shroff Memorial Lecture on 24 October 1997 and published by the Forum of Free Enterprise, K. B. Dadiseth's address reframes corporate governance for an India that is moving from a controlled economy into globalised competition. Speaking as Chairman of Hindustan Lever, Dadiseth argues that governance must be understood in its widest sense — almost as a trusteeship — and not reduced to statutory checks, committees and counts of non-executive directors. The Cadbury Code and similar prescriptions offer useful broad principles, but India must evolve its own solution because, on average, the basic capabilities of managing companies are still being built. The lecture moves through the institutional pillars of the firm. The Board must become the 'directing mind and will' of the corporation, supplying strategy rather than merely satisfying legal obligations. The Chairman, seen in India as the personification of the company, must be the first among equals — custodian of ethics, succession planner and primary link to shareholders.… ### Body ## Summary Delivered as the 32nd A. D. Shroff Memorial Lecture on 24 October 1997 and published by the Forum of Free Enterprise, K. B. Dadiseth's address reframes corporate governance for an India that is moving from a controlled economy into globalised competition. Speaking as Chairman of Hindustan Lever, Dadiseth argues that governance must be understood in its widest sense — almost as a trusteeship — and not reduced to statutory checks, committees and counts of non-executive directors. The Cadbury Code and similar prescriptions offer useful broad principles, but India must evolve its own solution because, on average, the basic capabilities of managing companies are still being built. The lecture moves through the institutional pillars of the firm. The Board must become the 'directing mind and will' of the corporation, supplying strategy rather than merely satisfying legal obligations. The Chairman, seen in India as the personification of the company, must be the first among equals — custodian of ethics, succession planner and primary link to shareholders. Employees must be drawn into shared risks and responsibilities through embedded codes such as Hindustan Lever's own Code of Business Principles. Audit must be repositioned from fault-finding to positive assurance, and public disclosure from a quantity-driven exercise designed to placate regulators to a quality-driven narrative designed to build trustworthiness. Throughout, Dadiseth criticises the legacy of government-controlled ownership for letting managements abdicate responsibility while financial institutions, as significant shareholders, chose a passive role. The remedy is cultural rather than legalistic: a 'software' of corporate conscience, transparency and self-regulation that 'permeates the organisation as a totality'. The ultimate test, he concludes, is the ability to create self-driven, self-assessed, self-regulated organisations with a conscience — investors guided by unforgiving stock markets will shift allegiance overnight to companies that earn that trust. ## Key points - Corporate governance is framed as trusteeship and as a means to an outperforming organisation, not as a checklist of statutory checks and balances. - International prescriptions like the Cadbury Code are useful only for broad principles; India must evolve its own solution because basic management capabilities are still being built. - The Board must be the company's 'directing mind and will', focusing on strategy, customer service and shareholder value rather than only legal minima. - The Chairman is the personification of the company and the custodian of corporate ethics, with succession planning and decisive intervention as core duties. - Employees must share risks and responsibilities through embedded codes of conduct; Hindustan Lever's Code of Business Principles is cited as exemplar. - Audit should shift from fault-finding to positive assurance, supporting self-regulation rather than triggering defensive employee responses. - Public disclosure in India has been designed to satisfy regulators (quantity); it must instead furnish data that communicates trustworthiness (quality). - Government control of companies historically aggravated weak accountability by letting managements abdicate responsibility and financial institutions stay passive. - The ultimate goal of governance is self-driven, self-assessed and self-regulated organisations with a conscience — investors will desert those that fail this test. --- ## [Primary work] Corporate Governance in India URL: https://indianliberals.in/primary-works/corporate-governance-in-india-k-b-dadiseth/ ### Summary Corporate Governance in India is the text of the 32nd A. D. Shroff Memorial Lecture, delivered by K. B. Dadiseth, Chairman of Hindustan Lever Ltd., in Mumbai on 24th October 1997 and published as a booklet by the Forum of Free Enterprise. Dadiseth argues for an expansive, almost trusteeship-like conception of corporate governance: not merely a matter of statutory checks and balances, committees, and counts of non-executive directors, but a culture of conscience, transparency, accountability, and self-regulation that must permeate the whole organisation. The lecture is structured around the principal pillars of governance — the Board as the 'directing mind and will' of the corporation, the Chairman as first among equals and custodian of corporate ethics, employees as risk-bearing partners under a shared code of business principles, internal audit reoriented from fault-finding to positive assurance, and public disclosures that communicate trustworthiness.… ### Body ## Summary Corporate Governance in India is the text of the 32nd A. D. Shroff Memorial Lecture, delivered by K. B. Dadiseth, Chairman of Hindustan Lever Ltd., in Mumbai on 24th October 1997 and published as a booklet by the Forum of Free Enterprise. Dadiseth argues for an expansive, almost trusteeship-like conception of corporate governance: not merely a matter of statutory checks and balances, committees, and counts of non-executive directors, but a culture of conscience, transparency, accountability, and self-regulation that must permeate the whole organisation. The lecture is structured around the principal pillars of governance — the Board as the 'directing mind and will' of the corporation, the Chairman as first among equals and custodian of corporate ethics, employees as risk-bearing partners under a shared code of business principles, internal audit reoriented from fault-finding to positive assurance, and public disclosures that communicate trustworthiness. Dadiseth situates the Indian debate against the backdrop of the Cadbury Committee in the UK and acknowledges the Working Group on the Companies Act and the Confederation of Indian Industry's draft code, but insists that British or Western templates can only supply broad principles; India must evolve its own solution. A recurring polemical thread is a critique of the old controlled economy: government had taken on the role of controlling companies and thereby created scope for managements to abdicate responsibility, while financial institutions chose passivity as shareholders. With the shift toward a globalising, competitive India, Dadiseth contends that companies which fail to professionalise managements, plan succession, renew their Boards, and offer coherent narrative disclosures will be punished by unforgiving stock markets — and that the real differentiator going forward will be the capacity to build self-driven, self-assessed and self-regulated organisations with a conscience. ## Key points - Dadiseth defines Corporate Governance in its widest sense, 'almost like a trusteeship', stressing culture (conscience, consciousness, transparency, openness) over the 'hardware' of rules, committees and director headcounts. - He frames recent governance debates as a response to corporate disasters abroad — particularly the late-1980s UK failures that triggered the Cadbury Committee — and argues India must adapt broad principles rather than transplant the Cadbury Code wholesale. - He criticises the legacy of state control: by taking on the role of controlling companies the government 'created scope for such managements to abdicate what should have always been their responsibility', while financial institutions played a passive shareholder role. - The Board's role is recast around strategy, succession, professionalisation and the cultivation of executive directors who have grown with the company, supported but not replaced by carefully chosen non-executive directors. - The Chairman/CEO is positioned as 'first amongst equals' and custodian of corporate ethics — encouraging free debate, providing the reality check, and handing over an organisation stronger than the one inherited. - Self-regulation is grounded in a published Code of Business Principles (citing Hindustan Lever's own), an internal audit reoriented from fault-finding to assurance, and an Audit Committee that need not be formal. - Public disclosure is treated as the carrier of trustworthiness, contrasting Indian historical practice (quantity-driven, designed to enable regulatory interference) with the Cadbury ideal of a 'coherent narrative, supported by figures' that gives balanced weight to setbacks and successes. - Dadiseth concludes that, with investors no longer relying on regulators and stock markets shifting allegiance overnight, the decisive competitive edge will be the ability to build 'selfdriven, selfassessed, self-regulated organisations with a conscience.' --- ## [Primary work] Corporate Governance URL: https://indianliberals.in/primary-works/corporate-governance-by-adi-a-godrej-2004/ ### Summary This booklet reproduces the 15th Bhogilal Leherchand Memorial Lecture, delivered by Adi B. Godrej, Chairman of the Godrej Group, in Mumbai on 8 December 2003 and published in January 2004 by the Forum of Free Enterprise. Writing in the wake of the Enron, Arthur Andersen, Tyco, Global Crossing, Adelphia and Worldcom scandals, Godrej argues that corporate governance is neither a new concept nor a passing management fad: it dates at least to the post-Watergate internal-controls legislation of the 1970s, and the recent spate of malfeasance only makes the case for taking it seriously more urgent. He surveys the institutional history — the Treadway Commission, the Cadbury Code, the Combined Code of the London Stock Exchange, the Blue Ribbon Committee, the OECD Code of 1998 — and in India the Kumar Mangalam Birla, R. H. Patil, M. S. Verma, A. S.… ### Body ## Summary This booklet reproduces the 15th Bhogilal Leherchand Memorial Lecture, delivered by Adi B. Godrej, Chairman of the Godrej Group, in Mumbai on 8 December 2003 and published in January 2004 by the Forum of Free Enterprise. Writing in the wake of the Enron, Arthur Andersen, Tyco, Global Crossing, Adelphia and Worldcom scandals, Godrej argues that corporate governance is neither a new concept nor a passing management fad: it dates at least to the post-Watergate internal-controls legislation of the 1970s, and the recent spate of malfeasance only makes the case for taking it seriously more urgent. He surveys the institutional history — the Treadway Commission, the Cadbury Code, the Combined Code of the London Stock Exchange, the Blue Ribbon Committee, the OECD Code of 1998 — and in India the Kumar Mangalam Birla, R. H. Patil, M. S. Verma, A. S. Ganguly and Naresh Chandra committees. Godrej rejects the narrow shareholder-wealth definition associated with Milton Friedman and the World Bank president James Wolfensohn's broader "fairness, transparency, and accountability" framing in favour of his own: efficient supervision that protects the long-term interests of the company while conforming to laws and ethics. He insists that governance must serve the long-term good of the firm and all stakeholders — employees, vendors, customers, government, society — rather than minority shareholders alone, and that it should be principle-based rather than rule-based, since rules invite loophole-hunting while principles are harder to evade. A recurring warning runs through the lecture: the cure for malfeasance is enforcement of existing law, not the proliferation of new statutes, and over-regulation of process risks becoming what a friend of his calls "weapons of mass distraction". The second half illustrates these claims with practices from the 106-year-old Godrej Group. Godrej describes Economic Value Added (EVA) as the principal financial metric, with performance-linked variable remuneration partially held in reserve to encourage long-term thinking; force-ranking of managers; the Red Team / Blue Team / Plum Team bottom-up strategic planning exercise; a rotating Young Executive Board of managers in their late twenties and early thirties; an internal Think Tank; and Chairman's tea sessions for direct managerial feedback. On the board dimension he highlights Godrej Consumer Products Ltd., where half the directors are independent, board meetings run at least half a day with an annual two-day offsite, and ICRA has assigned a "CGR2" corporate-governance rating and an "SVG2" stakeholder-value rating. He closes by reframing corporate governance as "the ultimate management tool" — a journey, not a destination — and as being "both, about doing things right and doing the right thing". ## Key points - Corporate governance is not a new concept — it dates to the post-Watergate internal-controls legislation of the 1970s — and not a management fad; the recent spate of US corporate malfeasance (Enron, Arthur Andersen, Tyco, Global Crossing, Adelphia, Worldcom) only sharpens its urgency. - Godrej rejects Milton Friedman's narrow shareholder-wealth definition and proposes his own: governance is efficient supervision that protects the long-term interests of the company while conforming to law and ethics, serving all stakeholders rather than minority shareholders alone. - Governance must be principle-based rather than rule-based because principles are harder to circumvent than rules; the principles he favours are Simple, Moral, Accountable, Responsive and Transparent. - Enforcement of existing law, not new legislation, is the remedy for malfeasance — "Legislation alone is no panacea, and un-enforced legislation is worse than no legislation" — and over-regulation of process can become "weapons of mass distraction". - Markets are the definitive compliance officer: deregulation, disintermediation, institutionalisation, globalisation and tax reforms increasingly empower minority shareholders and discipline errant managers by denying them capital. - At the Godrej Group, Economic Value Added (EVA) anchors a performance-linked variable remuneration system, with portions held in reserve and modulated by a balanced-scorecard individual performance factor to enforce a long-term horizon. - Bottom-up HR practices — Red/Blue/Plum strategic teams of young managers, a rotating Young Executive Board, a senior-manager Think Tank, and Chairman's teas — operationalise the view that employees are the true custodians of the company's long-term interests. - Godrej Consumer Products Ltd. — with a board half-composed of independent directors and ICRA's "CGR2" and "SVG2" ratings — is offered as a working illustration that strong boards inhibit conflicts of interest among accountants, lawyers, analysts, investment bankers and consultants. --- ## [Primary work] CORPORATE GOVERNANCE – INDIAN EXPERIENCE URL: https://indianliberals.in/primary-works/corporate-governance-indian-experience-minoo-r-shroff/ ### Summary In this Forum of Free Enterprise booklet (published December 2000), the management consultant and Forum president Minoo R. Shroff offers a brisk practitioner's history of corporate governance in India and an argument for why the moment has arrived to take it seriously. He defines governance as 'management assuming the role of trusteeship' with checks and balances that lift performance, employee morale, shareholder value and social responsibility, insisting that 'the spirit is more important than the form' — codes alone do nothing without commitment at the top. Shroff traces the Indian corporate landscape from a family-dominated, board-as-formality past — with notable exceptions like the House of Tatas, which adopted worker welfare and even social audits decades ahead of legislation, and the 1956 Forum of Free Enterprise Code of Conduct (reproduced as an appendix).… ### Body ## Summary In this Forum of Free Enterprise booklet (published December 2000), the management consultant and Forum president Minoo R. Shroff offers a brisk practitioner's history of corporate governance in India and an argument for why the moment has arrived to take it seriously. He defines governance as 'management assuming the role of trusteeship' with checks and balances that lift performance, employee morale, shareholder value and social responsibility, insisting that 'the spirit is more important than the form' — codes alone do nothing without commitment at the top. Shroff traces the Indian corporate landscape from a family-dominated, board-as-formality past — with notable exceptions like the House of Tatas, which adopted worker welfare and even social audits decades ahead of legislation, and the 1956 Forum of Free Enterprise Code of Conduct (reproduced as an appendix). He then walks through the institutional arrivals that pushed change: post-Independence joint ventures with foreign collaborators who demanded real board engagement; the 1960s rise of nominee directors from public financial institutions (whose track record he judges 'far from inspiring'); and the formation of large public sector corporations whose civil-servant boards he charges with being 'largely ineffective', meticulous on compliance but unfit for strategy. He underscores the scale of the state's grip — funds 'exceed Rs 15,000 billion, almost 75% of the gross national product' — and calls for a total overhaul of how state enterprises are governed. The second half turns prescriptive. The chairman must be 'the custodian of corporate ethics' and run the board as 'a constellation of stars'; SEBI's reclassification of institutional directors as independent makes it urgent that nominees act on their own judgement and that institutions cultivate genuinely independent panels. He welcomes the CII and SEBI codes, mandatory retirement ages, the broadening of director pools to academics, scientists and foreign experts, and notes that 'shareholder activism, now becoming visible, and the growing threat of hostile takeovers will spur entrenched managements to ensure better governance.' The pamphlet closes with the full text of the Forum's 1956 Code of Conduct addressing obligations to consumers, labour, investors, professional ethics and the community, and an Eugene Black epigraph asking that private enterprise be accepted 'not as a necessary evil, but as an affirmative good.' ## Key points - Defines corporate governance as management-as-trusteeship: checks and balances that produce high performance, customer satisfaction, employee morale, shareholder value, and societal sensitivity — with the spirit of the code mattering more than its form. - Reads Indian corporate history as dominated by family/patriarchal control with boards 'for form's sake', flagging the House of Tatas (welfare measures, worker participation, social audit) and the Forum of Free Enterprise's 1956 Code of Conduct as far-sighted exceptions. - Credits post-Independence joint ventures and 1960s public-financial-institution nominee directors with professionalising boards, but argues the nominee directors' record is 'far from inspiring' — peripheral, passive, often awakened only by media disclosures. - Indicts public sector boards staffed by civil servants as largely ineffective: meticulous on procedure but contributing little to policy formulation or business monitoring, with leaderless PSUs and short tenures compounding the problem. - Quantifies the stakes: nationalised banks, FIs, insurers, mutuals and provident funds manage roughly Rs 10,000 billion of citizens' savings, and total state-controlled deployment exceeds Rs 15,000 billion — almost 75% of GNP — making overhaul urgent. - Argues the chairman is the pivot — 'custodian of corporate ethics' and orchestra leader of 'a constellation of stars' — responsible for tone, talent renewal, and a vision that mobilises employees. - Welcomes the CII and SEBI codes, mandatory retirement ages, second-generation promoters appointing competent non-executive directors, and the widening of board talent pools to academics, scientists, ex-civil servants and global experts. - Concludes that codes, regulators and research analysts can only do so much — the real cutting edge is self-assessment, with shareholder activism and hostile-takeover threats as final disciplines on entrenched managements. - Appendix reproduces the Forum of Free Enterprise's 18 July 1956 Code of Conduct, articulating producer/consumer, employer/labour, management/investor, professional and civic obligations as a charter for ethical free enterprise. --- ## [Primary work] Corporate Sector and Rural Development URL: https://indianliberals.in/primary-works/corporate-sector-and-rural-development-n-s-ramaswamy-october-14-1977/ ### Summary This 1977 Forum of Free Enterprise booklet collects two papers by Prof. N. S. Ramaswamy — formerly Director of N.I.T.I.E., Bombay, and at the time of publication Director of the Indian Institute of Management, Bangalore. The publisher's introduction frames the booklet as a response to the Union Budget 1977-78's incentive for corporate engagement with rural development, and as a contribution to Forum publications' long-running argument that India's agricultural and rural economy has been neglected by policy-makers and the modern industrial sector alike. In the first paper, 'Social Marketing', Ramaswamy argues that agencies of the State have proved 'largely ineffective' at transmitting science, technology and modern organisation to villages, and that business and industrial organisations must therefore play a complementary role. He coins 'social marketing' to describe the delivery of scientific and technological knowledge — alongside the products and services that industry already sells in rural areas — and frames this as 'enlightened self-interest' rather than philanthropy.… ### Body ## Summary This 1977 Forum of Free Enterprise booklet collects two papers by Prof. N. S. Ramaswamy — formerly Director of N.I.T.I.E., Bombay, and at the time of publication Director of the Indian Institute of Management, Bangalore. The publisher's introduction frames the booklet as a response to the Union Budget 1977-78's incentive for corporate engagement with rural development, and as a contribution to Forum publications' long-running argument that India's agricultural and rural economy has been neglected by policy-makers and the modern industrial sector alike. In the first paper, 'Social Marketing', Ramaswamy argues that agencies of the State have proved 'largely ineffective' at transmitting science, technology and modern organisation to villages, and that business and industrial organisations must therefore play a complementary role. He coins 'social marketing' to describe the delivery of scientific and technological knowledge — alongside the products and services that industry already sells in rural areas — and frames this as 'enlightened self-interest' rather than philanthropy. Concrete agendas are sketched for steel producers, fertiliser firms, tyre and pump-set manufacturers, banks, insurers and food-processing companies. He cites a company that successfully augmented rural incomes in the Etawah district of Uttar Pradesh through R&D-led supply chains, and calls on rural banks to recover the relational, trust-based role of the older village money-lender. In the second paper, 'Modernizing the Bullock-Cart', Ramaswamy makes the case for the bullock-cart as appropriate technology for a 'capital-scarce, labour-surplus' economy. Drawing on Planning Commission, National Planning Committee and IIM-Bangalore field data, he documents that India has over 140 lakh carts carrying perhaps 40 billion tonne-kilometres of freight a year and employing some 200 lakh people, and argues that motorised vehicles cannot competitively replace bullock-carts on short rural routes. He calls for sustained R&D investment in cart design and in dual-purpose draught animals, arguing that doubling carrying capacity could double the incomes of rural people dependent on the system. Both papers share the booklet's central polemic: rural India deserves the same modernising attention the organised economy enjoys, and the corporate sector — through self-interested service rather than charity, and by valuing rather than displacing existing non-organised technologies — should be a principal vehicle of that modernisation. ## Key points - Forum of Free Enterprise pamphlet (October 1977) reprinting extracts from two papers by N. S. Ramaswamy, framed by an editorial introduction linking the booklet to incentives in the Union Budget 1977-78 for corporate involvement in rural development. - Paper I argues State agencies have been 'largely ineffective' at modernising villages and that industry must complement them, coining 'social marketing' to describe the delivery of scientific and technological know-how alongside marketed goods. - Corporate engagement in rural areas is defended as 'enlightened self-interest' rather than philanthropy — industry ultimately gains through growing, marketable rural output. - Sector-specific agendas are sketched for steel, fertiliser, tyre, pump-set, pharmaceutical, food-processing and petroleum firms, and for banks and insurers willing to adapt to rural realities. - The author calls on rural banking to recover the relational, trust-based role once played by the village money-lender and notes that villagers are 'more willing to save than to borrow'. - Paper II positions the bullock-cart as 'appropriate technology' for a capital-scarce, labour-surplus economy, with over 140 lakh carts in use, an aggregate investment of around Rs. 3,000 crore and employment for roughly 200 lakh people. - Drawing on Planning Commission and IIM-Bangalore field data, Ramaswamy estimates that the bullock-cart system carries between 10 and 41 billion tonne-kilometres of freight a year — comparable in scale to the Railways and road transport. - He argues that the bullock-cart has been neglected because animals were assumed to be replaceable by tractors and trucks, but that motorised vehicles are uneconomic over short distances and require petroleum and paved roads that rural India lacks. - Modernising cart design and breeding dual-purpose draught animals could double rural transport incomes and create employment at roughly a tenth of the capital cost of equivalent truck-based jobs. --- ## [Primary work] Corruption Can Be Controlled URL: https://indianliberals.in/primary-works/corruption-can-be-controlled-dr-pv-shenoi-ram-gandhi/ ### Summary Published by the Forum of Free Enterprise in Mumbai on 14 October 1998, this booklet brings together two complementary addresses on the economics and politics of corruption in India. The first, by Dr. P. V. Shenoi, IAS (Retd.), Director of the Institute for Social and Economic Change, Bangalore, is based on a seminar presentation of January 1998; the second, by Ram Gandhi, immediate Past President of the Indian Merchants' Chamber, is drawn from his welcome address at an IMC meeting of 21 December 1997 at which Prime Minister I. K. Gujral was the chief guest. Both authors share a common premise—that India ranked among the world's ten most corrupt nations—but approach the problem from different angles: Shenoi from the standpoint of administrative and constitutional reform, Gandhi from the standpoint of economic costs and a sequenced action agenda. Shenoi's argument is that corruption flows from the top down. He documents the failure of the Lok Pal Bill to progress in thirty years, the routine appointment of 'transparently unfit people to high constitutional offices,' and the fact that an estimated one-quarter of legislators had criminal records. His prescriptions move through seven domains: transparent appointment councils for constitutional offices (chaired by the President/Governor and including the Chief Justice and opposition leaders); realistic election-expenditure ceilings and state funding of elections; salary parity for legislators with State/Central Government Secretaries, coupled with mandatory annual asset declarations; full privatisation of the public sector (which was earning only a 2 per cent return on an investment of roughly Rs. three lakh crores, financed by borrowings at 10 per cent); a business-like public service with market-comparable salaries and strict integrity enforcement; a Vigilance Commissioner drawn from the judiciary with adequate investigative staff and powers to lay traps; and replacement of the Official Secrets Act with a right-to-information law covering everything except genuine security matters. Gandhi's contribution focuses on the economic cost and tactical sequencing. He cites an IMF study of 70 countries showing that reducing corruption levels from India's to Scandinavia's would raise the annual investment rate by 10–12 per cent and GDP growth by 1.5 per cent; Harvard research estimated that India's corruption was equivalent to raising the effective marginal tax rate by 20 percentage points. Gandhi disaggregates corruption into three levels—petty (passport bribes), enterprise (customs clearances), and political (major contracts and licences)—and argues that petty corruption cannot be eradicated until political and enterprise corruption are tackled first. At the political level, his 'low-hanging fruit' are the Right to Information Bill and making the CBI independent of the executive (with Election Commission-like status). At the enterprise level, he notes that 67 per cent of India's laws had never been used in any court since independence, that 47 approvals were required to construct a building in Mumbai, and that small-scale entrepreneurs faced 36 inspectors monthly and 46 separate export documents—making time-bound decision-making and the scrapping of blanket discretionary clauses the most actionable first steps. ### Body ## Summary Published by the Forum of Free Enterprise in Mumbai on 14 October 1998, this booklet brings together two complementary addresses on the economics and politics of corruption in India. The first, by Dr. P. V. Shenoi, IAS (Retd.), Director of the Institute for Social and Economic Change, Bangalore, is based on a seminar presentation of January 1998; the second, by Ram Gandhi, immediate Past President of the Indian Merchants' Chamber, is drawn from his welcome address at an IMC meeting of 21 December 1997 at which Prime Minister I. K. Gujral was the chief guest. Both authors share a common premise—that India ranked among the world's ten most corrupt nations—but approach the problem from different angles: Shenoi from the standpoint of administrative and constitutional reform, Gandhi from the standpoint of economic costs and a sequenced action agenda. Shenoi's argument is that corruption flows from the top down. He documents the failure of the Lok Pal Bill to progress in thirty years, the routine appointment of 'transparently unfit people to high constitutional offices,' and the fact that an estimated one-quarter of legislators had criminal records. His prescriptions move through seven domains: transparent appointment councils for constitutional offices (chaired by the President/Governor and including the Chief Justice and opposition leaders); realistic election-expenditure ceilings and state funding of elections; salary parity for legislators with State/Central Government Secretaries, coupled with mandatory annual asset declarations; full privatisation of the public sector (which was earning only a 2 per cent return on an investment of roughly Rs. three lakh crores, financed by borrowings at 10 per cent); a business-like public service with market-comparable salaries and strict integrity enforcement; a Vigilance Commissioner drawn from the judiciary with adequate investigative staff and powers to lay traps; and replacement of the Official Secrets Act with a right-to-information law covering everything except genuine security matters. Gandhi's contribution focuses on the economic cost and tactical sequencing. He cites an IMF study of 70 countries showing that reducing corruption levels from India's to Scandinavia's would raise the annual investment rate by 10–12 per cent and GDP growth by 1.5 per cent; Harvard research estimated that India's corruption was equivalent to raising the effective marginal tax rate by 20 percentage points. Gandhi disaggregates corruption into three levels—petty (passport bribes), enterprise (customs clearances), and political (major contracts and licences)—and argues that petty corruption cannot be eradicated until political and enterprise corruption are tackled first. At the political level, his 'low-hanging fruit' are the Right to Information Bill and making the CBI independent of the executive (with Election Commission-like status). At the enterprise level, he notes that 67 per cent of India's laws had never been used in any court since independence, that 47 approvals were required to construct a building in Mumbai, and that small-scale entrepreneurs faced 36 inspectors monthly and 46 separate export documents—making time-bound decision-making and the scrapping of blanket discretionary clauses the most actionable first steps. ## Key points - An IMF study of 70 countries estimated that reducing India's corruption to Scandinavian levels would raise investment by 10–12% per annum and GDP growth by 1.5% per annum; Harvard research put India's corruption burden as equivalent to a 20-percentage-point increase in the effective marginal tax rate. - India's public sector investment of approximately Rs. three lakh crores was earning only a 2% return while financed by borrowings at 10% per annum; Shenoi argues for full privatisation within five years, treating token disinvestment of 5–10% of shares as 'practically a joke'. - An estimated one-quarter of India's legislators held criminal records at the time of writing; Shenoi recommends salary parity with government Secretaries plus mandatory annual asset declarations open to public comment. - The Lok Pal Bill had been pending for thirty years; no Prime or Chief Minister wished to be subject to its integrity regime, and the bill's stagnation exemplified the broader failure of top-down accountability. - Gandhi identifies three distinct tiers of corruption—petty (passport and ration-card bribes), enterprise (customs and regulatory clearances) and political (major contracts and licences)—and argues that petty corruption can be eradicated only after the higher tiers are addressed first. - 67% of India's laws had never been used in any court since independence; 47 approvals were required to construct a building in Mumbai; a small-scale entrepreneur faced 36 monthly inspectors and 46 separate export documents—making procedural simplification the most tractable entry point for anti-corruption reform. - Gandhi proposes giving the CBI Election Commission-like statutory independence—ending the requirement to seek ministerial approval before prosecuting a public servant—and creating exclusive fast-track courts for all corruption cases. - A World Bank study cited in the booklet placed India in a corruption tier alongside Belarus, Moldova, Russia, Ukraine, Fiji and Malaysia; the top performers were Ireland and the United Kingdom. --- ## [Primary work] Corruption in Indian Medicine URL: https://indianliberals.in/primary-works/corruption-in-indian-medecine-dr-s-nundy-august-25-2014/ ### Summary Published as a pamphlet by the Forum of Free Enterprise in Mumbai and dated August 25, 2014, this booklet reproduces an article by Dr. Samiran Nundy — gastrointestinal surgeon at Sir Ganga Ram Hospital, New Delhi, and Editor-in-Chief of the journal Current Medicine Research and Practice — that first appeared in that journal's May–June 2014 issue (Vol. 4). The Forum's introduction by President Minoo R. Shroff frames the piece against a backdrop of public outrage: the Union Health Minister, Dr. Harsh Vardhan, had himself used the word "cartelization" on the floor of the Lok Sabha to describe kickback arrangements between doctors and diagnostic laboratories, and US hospitals had been fined nearly $200 million in 2014 for extracting referral fees. Nundy's central argument is that corruption in Indian medicine is systemic and structurally embedded rather than a matter of individual misconduct. He traces its origins to the capitation-fee admissions racket at private medical colleges — most owned by politicians — where students encounter unqualified teachers and scarce patients, emerge poorly trained and deeply indebted, and then face a professional environment in which survival requires participating in referral kickbacks. Specific monetary details ground the account: CT scan referrals yield cuts of Rs. 1,500; organ transplant facilitation charges at corporate hospitals can reach Rs. 1–2 lakh per case; senior doctors in five-star hospitals are visited monthly by financial executives and pressured to justify revenue generation from investigations and procedures. Corruption, Nundy notes, extends equally into the public sector, where promotions and desirable postings are secured through political and bureaucratic influence. Transparency International had ranked the Indian healthcare sector as the second most corrupt institution a citizen encounters, after the police. Nundy argues that three questions must be answered: whether medical corruption is universal or India-specific; why it occurs; and how it can be addressed. He accepts its global existence but contends that in the third world, both petty corruption (queue-jumping, false certificates) and grand corruption (drug procurement, college recognition, plum postings) coexist, with the petty variety falling heaviest on the poorest patients. His prescribed remedies are practical and technology-mediated: full patient information about services and costs; electronic medical records — he discloses a conflicting interest as co-founder of the RaxaDoctor prototype — which evidence suggests both improve care quality and reduce scope for corruption; a national watchdog agency modelled on Britain's National Fraud Authority; and exemplary punishment for offenders. The booklet appends a relevant extract from the Economic Survey of July 2014 showing that India's health sector receives only 1.4 per cent of GDP despite a 200 per cent increase in central plan outlay between the Eleventh and Twelfth Plans. ### Body ## Summary Published as a pamphlet by the Forum of Free Enterprise in Mumbai and dated August 25, 2014, this booklet reproduces an article by Dr. Samiran Nundy — gastrointestinal surgeon at Sir Ganga Ram Hospital, New Delhi, and Editor-in-Chief of the journal Current Medicine Research and Practice — that first appeared in that journal's May–June 2014 issue (Vol. 4). The Forum's introduction by President Minoo R. Shroff frames the piece against a backdrop of public outrage: the Union Health Minister, Dr. Harsh Vardhan, had himself used the word "cartelization" on the floor of the Lok Sabha to describe kickback arrangements between doctors and diagnostic laboratories, and US hospitals had been fined nearly $200 million in 2014 for extracting referral fees. Nundy's central argument is that corruption in Indian medicine is systemic and structurally embedded rather than a matter of individual misconduct. He traces its origins to the capitation-fee admissions racket at private medical colleges — most owned by politicians — where students encounter unqualified teachers and scarce patients, emerge poorly trained and deeply indebted, and then face a professional environment in which survival requires participating in referral kickbacks. Specific monetary details ground the account: CT scan referrals yield cuts of Rs. 1,500; organ transplant facilitation charges at corporate hospitals can reach Rs. 1–2 lakh per case; senior doctors in five-star hospitals are visited monthly by financial executives and pressured to justify revenue generation from investigations and procedures. Corruption, Nundy notes, extends equally into the public sector, where promotions and desirable postings are secured through political and bureaucratic influence. Transparency International had ranked the Indian healthcare sector as the second most corrupt institution a citizen encounters, after the police. Nundy argues that three questions must be answered: whether medical corruption is universal or India-specific; why it occurs; and how it can be addressed. He accepts its global existence but contends that in the third world, both petty corruption (queue-jumping, false certificates) and grand corruption (drug procurement, college recognition, plum postings) coexist, with the petty variety falling heaviest on the poorest patients. His prescribed remedies are practical and technology-mediated: full patient information about services and costs; electronic medical records — he discloses a conflicting interest as co-founder of the RaxaDoctor prototype — which evidence suggests both improve care quality and reduce scope for corruption; a national watchdog agency modelled on Britain's National Fraud Authority; and exemplary punishment for offenders. The booklet appends a relevant extract from the Economic Survey of July 2014 showing that India's health sector receives only 1.4 per cent of GDP despite a 200 per cent increase in central plan outlay between the Eleventh and Twelfth Plans. ## Key points - Transparency International ranked Indian healthcare the second most corrupt sector citizens encounter, after the police. - The corruption chain begins at entry: capitation fees at privately owned medical colleges leave graduates indebted and professionally compromised before they begin practice. - Kickback rates are quantified: Rs. 1,500 per CT scan referral; Rs. 1–2 lakh per organ-transplant facilitation charge at corporate hospitals. - Five-star hospital management formally reviews senior doctors' revenue generation monthly, institutionalising financial pressure as a driver of over-investigation. - Public-sector corruption mirrors private-sector patterns: promotions and desirable postings are secured through politicians and bureaucrats rather than merit. - Nundy distinguishes petty corruption (queue-jumping, fitness certificates) from grand corruption (drug procurement, college recognition) and notes both coexist in India, unlike in developed countries. - Proposed remedies include mandatory patient cost disclosure, electronic medical records (which evidence shows also reduce corruption), a national healthcare fraud authority, and exemplary punishment. - The pamphlet's Forum introduction notes that Health Minister Harsh Vardhan himself used the term "cartelization" in the Lok Sabha and acknowledged the Medical Council of India as a major source of corruption — the very body he proposed to refer malpractices to. --- ## [Primary work] Cotton Policy URL: https://indianliberals.in/primary-works/cotton-policy-shri-ramniwas-r-rula-dec19-1956/ ### Summary Published as the full text of a press statement issued by Shri Ramniwas R. Ruia on 19 December 1956, responding to the Cotton Policy debate in the Lok Sabha, this piece appears as a Forum of Free Enterprise pamphlet. Ruia writes as a cotton trade insider of three generations' standing — exporter, importer, buyer, seller, consumer, and manufacturer — with over thirty years of direct experience, and opens by asserting his constitutional right as a free citizen to criticise government policy without fear. Ruia's central argument is that Government intervention in the cotton forward market in December 1955, specifically the retrospective fixing of a new ceiling price of Rs. 700 within the existing ceiling of Rs. 745, was arbitrary, economically illiterate, and inflicted losses on the very growers and consumers it claimed to protect while inadvertently benefiting middlemen and those with privileged knowledge of official intentions. He reconstructs the sequence: forward prices were running at Rs. 750 when the Government abruptly slashed them to Rs. 700 with retrospective effect, then the Forward Markets Commission (FMC) closed the forward market the same night the Bombay High Court ordered it to convene and decide a fair price independently. The market remained closed from late December 1955 through approximately March 1956 — the peak crop-movement period — during which ready prices continued rising unchecked to and beyond the official ceiling, leaving the forward market functionless. Growers who had to sell their crop during this period received depressed prices while tame traders with accumulated stocks profited. Ruia challenges the Commerce Minister's characterisation of bear speculators as "unfortunate" victims, arguing they were pure gamblers with no legitimate cotton interest, while the genuine losers — growers forced to sell during the crisis months, merchants, and consumers with legitimate hedging needs — went unacknowledged. In his prescriptive section, Ruia calls for narrowing the Rs. 350 floor-to-ceiling spread (then Rs. 495 to Rs. 845) to no more than Rs. 150, reducing delivery periods from six to fewer per year, and requiring the Government to announce crop estimates and export quotas transparently at the season's outset rather than releasing them piecemeal as rumour fodder. He also calls for an independent impartial tribunal to investigate all cotton market transactions from the start of the 1955–56 contract. The statement closes with qualified optimism that the newly appointed Commerce and Industries Minister, Morarji Desai, would bring fairness and rule of law to the trade. ### Body ## Summary Published as the full text of a press statement issued by Shri Ramniwas R. Ruia on 19 December 1956, responding to the Cotton Policy debate in the Lok Sabha, this piece appears as a Forum of Free Enterprise pamphlet. Ruia writes as a cotton trade insider of three generations' standing — exporter, importer, buyer, seller, consumer, and manufacturer — with over thirty years of direct experience, and opens by asserting his constitutional right as a free citizen to criticise government policy without fear. Ruia's central argument is that Government intervention in the cotton forward market in December 1955, specifically the retrospective fixing of a new ceiling price of Rs. 700 within the existing ceiling of Rs. 745, was arbitrary, economically illiterate, and inflicted losses on the very growers and consumers it claimed to protect while inadvertently benefiting middlemen and those with privileged knowledge of official intentions. He reconstructs the sequence: forward prices were running at Rs. 750 when the Government abruptly slashed them to Rs. 700 with retrospective effect, then the Forward Markets Commission (FMC) closed the forward market the same night the Bombay High Court ordered it to convene and decide a fair price independently. The market remained closed from late December 1955 through approximately March 1956 — the peak crop-movement period — during which ready prices continued rising unchecked to and beyond the official ceiling, leaving the forward market functionless. Growers who had to sell their crop during this period received depressed prices while tame traders with accumulated stocks profited. Ruia challenges the Commerce Minister's characterisation of bear speculators as "unfortunate" victims, arguing they were pure gamblers with no legitimate cotton interest, while the genuine losers — growers forced to sell during the crisis months, merchants, and consumers with legitimate hedging needs — went unacknowledged. In his prescriptive section, Ruia calls for narrowing the Rs. 350 floor-to-ceiling spread (then Rs. 495 to Rs. 845) to no more than Rs. 150, reducing delivery periods from six to fewer per year, and requiring the Government to announce crop estimates and export quotas transparently at the season's outset rather than releasing them piecemeal as rumour fodder. He also calls for an independent impartial tribunal to investigate all cotton market transactions from the start of the 1955–56 contract. The statement closes with qualified optimism that the newly appointed Commerce and Industries Minister, Morarji Desai, would bring fairness and rule of law to the trade. ## Key points - The Government retrospectively slashed the cotton forward market ceiling from Rs. 745 to Rs. 700, closing the forward market on the night the Bombay High Court ordered an independent price review — an action Ruia calls constitutionally and commercially improper. - The forward market remained closed from late December 1955 to approximately March 1956, precisely the peak crop-movement period, destroying the livelihoods of thousands dependent on it. - During the closure, ready cotton prices rose freely to and above the official ceiling, demonstrating that the government lacked both the will and the means to control ready-market prices while suppressing forward prices. - Ruia argues the action rewarded bear speculators (pure gamblers) who profited from the price dislocation, while penalising growers who had to liquidate crops at distressed prices and merchants who had hedged legitimately. - He proposes narrowing the floor-to-ceiling spread from Rs. 350 to Rs. 150, reducing the six delivery periods, and requiring the government to publish crop estimates, consumption figures, and export quotas transparently at the start of each season. - An independent tribunal to investigate all cotton market dealings from 1955–56 onwards is called for, given the minister's own admission that a "squeeze" was effected by half a dozen traders. - Ruia questions the simultaneous June 1956 decision to fix the same ceiling and floor for the 1956–57 crop despite it being estimated 10 per cent above normal — a 33 per cent swing versus the previous drought-hit season. - The statement defends the right of businessmen to voice constructive criticism of policy, arguing that a functioning democracy requires an informed, articulate citizenry willing to contradict those in power. --- ## [Primary work] COTTON TEXTILE INDUSTRY — PROBLEMS & SOLUTION URL: https://indianliberals.in/primary-works/cotton-textile-industry-problems-and-solutions-bhaskar-g-kakatkar-february-11-1967/ ### Summary Delivered as a lecture by Bhaskar G. Kakatkar, Secretary-General of the Indian Cotton Mills Federation, under the auspices of the Forum of Free Enterprise in Bombay on 11 February 1967, and published as a pamphlet with a foreword by R. G. Saraiya dated 16 December 1966, this address surveys the structural crises confronting the Indian cotton textile industry in the mid-1960s. The foreword establishes the context starkly: cotton production reached only 55–56 lakh bales in 1965–66 against a Third Plan target of 70 lakh bales, while India simultaneously held the world's largest acreage under cotton — 20 million acres — yet achieved the lowest yield per acre, at 110–120 lbs against a world average of over 300 lbs. Kakatkar organises his argument around the industry's dependence on three interlocking failures: the cotton supply crisis, destructive price-control policy, and unequal competitive treatment across mill, powerloom, and handloom sectors. On cotton supply, he quantifies the gap precisely: the industry requires 70 lakh bales to maintain per capita cloth availability of 15–16 yards, but 1966–67 production was expected to reach only 55 lakh bales. Rather than directing resources toward raising per-acre yields — which Federation-run trials showed could be improved by 50–100 per cent on irrigated land, with 32 lakh irrigated acres capable of yielding 16 lakh additional bales at an input cost of Rs. 200 per acre — the Government had instead abolished the Indian Central Cotton Committee (on the advice of two unnamed American consultants whose report was never published) and was planning new spinning mills to share an already scarce raw material. On price controls, Kakatkar demonstrates their futility through a simple price series: the ceiling for Moglai Jarilla Fine cotton rose from Rs. 820 in 1961–62 to Rs. 947, Rs. 1,022, and Rs. 1,070 by 1966–67, each ceiling breached in turn. Mills were openly paying 14–50 per cent above official ceilings. He calls for abolition of ceiling prices, arguing they serve only to formalise black-market premiums. On the three-sector imbalance, Kakatkar presents detailed excise duty figures that illustrate the structural unfairness: a mill pays Rs. 3,300–11,000 per loom per year depending on cloth category, while a comparable powerloom pays only Rs. 25–150. The powerloom sector had grown from one-fifth of total production in 1951 to 40 per cent by 1965 without providing better employment conditions or export capacity. On rehabilitation, the American textile industry, 1.5 times India's size, was investing Rs. 500 crores per year in capital equipment; Japan, of comparable size, Rs. 200 crores; India's mills were spending only Rs. 50 crores annually, largely through borrowing. The address ends with a vision of India becoming the world's leading cotton textile exporter if cotton yields are prioritised — a prospect made plausible by India's unique position as one of the few major textile exporters with home-grown cotton. ### Body ## Summary Delivered as a lecture by Bhaskar G. Kakatkar, Secretary-General of the Indian Cotton Mills Federation, under the auspices of the Forum of Free Enterprise in Bombay on 11 February 1967, and published as a pamphlet with a foreword by R. G. Saraiya dated 16 December 1966, this address surveys the structural crises confronting the Indian cotton textile industry in the mid-1960s. The foreword establishes the context starkly: cotton production reached only 55–56 lakh bales in 1965–66 against a Third Plan target of 70 lakh bales, while India simultaneously held the world's largest acreage under cotton — 20 million acres — yet achieved the lowest yield per acre, at 110–120 lbs against a world average of over 300 lbs. Kakatkar organises his argument around the industry's dependence on three interlocking failures: the cotton supply crisis, destructive price-control policy, and unequal competitive treatment across mill, powerloom, and handloom sectors. On cotton supply, he quantifies the gap precisely: the industry requires 70 lakh bales to maintain per capita cloth availability of 15–16 yards, but 1966–67 production was expected to reach only 55 lakh bales. Rather than directing resources toward raising per-acre yields — which Federation-run trials showed could be improved by 50–100 per cent on irrigated land, with 32 lakh irrigated acres capable of yielding 16 lakh additional bales at an input cost of Rs. 200 per acre — the Government had instead abolished the Indian Central Cotton Committee (on the advice of two unnamed American consultants whose report was never published) and was planning new spinning mills to share an already scarce raw material. On price controls, Kakatkar demonstrates their futility through a simple price series: the ceiling for Moglai Jarilla Fine cotton rose from Rs. 820 in 1961–62 to Rs. 947, Rs. 1,022, and Rs. 1,070 by 1966–67, each ceiling breached in turn. Mills were openly paying 14–50 per cent above official ceilings. He calls for abolition of ceiling prices, arguing they serve only to formalise black-market premiums. On the three-sector imbalance, Kakatkar presents detailed excise duty figures that illustrate the structural unfairness: a mill pays Rs. 3,300–11,000 per loom per year depending on cloth category, while a comparable powerloom pays only Rs. 25–150. The powerloom sector had grown from one-fifth of total production in 1951 to 40 per cent by 1965 without providing better employment conditions or export capacity. On rehabilitation, the American textile industry, 1.5 times India's size, was investing Rs. 500 crores per year in capital equipment; Japan, of comparable size, Rs. 200 crores; India's mills were spending only Rs. 50 crores annually, largely through borrowing. The address ends with a vision of India becoming the world's leading cotton textile exporter if cotton yields are prioritised — a prospect made plausible by India's unique position as one of the few major textile exporters with home-grown cotton. ## Key points - India held the world's largest cotton acreage (20 million acres) in 1965–66 but the lowest yield per acre (110–120 lbs versus a world average of over 300 lbs), making yield improvement — not new capacity — the correct policy priority. - The Third Plan cotton target of 70 lakh bales went unmet; actual production was 55–56 lakh bales, leaving a shortfall of 15 lakh bales against the industry's minimum requirement. - Federation-run trials showed that irrigated cotton yields could be raised 50–100 per cent with an input of Rs. 200 per acre, sufficient to close the entire shortfall from the 32 lakh acres already under irrigation. - Ceiling price controls were demonstrably ineffective: the ceiling for Moglai Jarilla Fine cotton rose from Rs. 820 (1961–62) to Rs. 1,070 (1966–67), with mills openly paying 14–50 per cent above ceilings throughout — Kakatkar calls for their complete abolition. - The Government abolished the Indian Central Cotton Committee — responsible for the varietal improvements that had doubled cotton quality — on the advice of two American experts whose report was never released, replacing it with a body that had not met even once nine months after formation. - Mill excise duties ranged from Rs. 3,300 to Rs. 11,000 per loom per year; powerloom duties ranged from Rs. 25 to Rs. 150 — a ratio of up to one-hundredth — creating structural unfair competition that drove the decentralised sector from 20 per cent to 40 per cent of output between 1951 and 1965. - Indian mill workers had the highest textile wage relative to average industrial wage in the world (105 per cent) yet the lowest labour productivity — 2,864 kg yarn per worker per year versus 23,490 kg in the USA — due to outdated machinery and insufficient rationalisation. - India spent only Rs. 50 crores per year on mill rehabilitation against Rs. 500 crores by the American industry (1.5 times India's size) and Rs. 200 crores by Japan (roughly equal size), a disparity Kakatkar argues will prove fatal to export competitiveness. --- ## [Primary work] Crisis in Indian Banking Industry URL: https://indianliberals.in/primary-works/crisis-in-indian-banking-industry-by-dr-dharmendra-bhandari-october-15-1991/ ### Summary Published on 15 October 1991 as a Forum of Free Enterprise pamphlet and reproduced from a booklet issued by the Special Assistance Programme of the University Grants Commission's Department of Commerce at the University of Rajasthan, Jaipur, this essay by Dr. Dharmendra Bhandari — Chartered Accountant, Assistant Professor of Accountancy at Rajasthan University, and at the time a sitting Director of a nationalised bank — presents a forensic crisis diagnosis of the Indian public-sector banking system in the wake of the 1991 economic emergency. Bhandari opens with unambiguous figures: of the Rs. 73,308 crores advanced by 20 nationalised banks as of March 1990, at least Rs. 35,000 crores were blocked in non-performing advances; a genuine stock audit of realisation values would place accumulated bad debts at no less than Rs. 20,000 crores. Aggregate deposit growth in all scheduled banks had already slowed from 9.4 per cent (April–September 1989–90) to 7.4 per cent in the corresponding 1990 period. Deposits in nationalised banks stood at Rs. 1,28,999 crores as of March 1990 — a sum the Reserve Bank could protect only by printing notes, making technical solvency a fiction. Recovery rates in agriculture and small-scale industry ranged from 15 to 50 per cent of advances raised. The essay then moves through four structural pathologies. First, banks lack the legal right to take forcible possession of hypothecated security without a civil court order — a process so slow and expensive (court fees of up to 10 per cent of the claimed amount) that securities routinely deteriorate or are transferred before judgment; Bhandari calls for a provision in the Banking Regulation Act equivalent to Section 29 of the State Financial Corporations Act, empowering branch managers to attach and auction assets directly. Second, Health Code classification (the RBI's 8-tier system for loan quality) is systematically manipulated to defer provisioning: banks keep loans in Health Code 4–5 rather than filing suits (Code 6), allowing fictitious interest income to be credited. Third, bank balance sheets since 1949 have been structured to conceal bad debt provisions, with the number of notes on accounts rising from 46 to over 300 since nationalisation; Bhandari compares this unfavourably with US, Canadian, and Western European disclosure norms. Fourth, parliamentary oversight is effectively neutered: financial committees have been denied recovery data outside the agriculture sector for over a decade despite repeated requests, with successive Finance Secretaries citing confidentiality; the Comptroller and Auditor General has been excluded from conducting supplementary audits of nationalised banks despite two Rajya Sabha committee recommendations (1983 and 1984) urging such inclusion. Bhandari's overarching warning is that without immediate legislative and accountability reform, the credit squeeze will tip inflation into triple digits with one bad monsoon. ### Body ## Summary Published on 15 October 1991 as a Forum of Free Enterprise pamphlet and reproduced from a booklet issued by the Special Assistance Programme of the University Grants Commission's Department of Commerce at the University of Rajasthan, Jaipur, this essay by Dr. Dharmendra Bhandari — Chartered Accountant, Assistant Professor of Accountancy at Rajasthan University, and at the time a sitting Director of a nationalised bank — presents a forensic crisis diagnosis of the Indian public-sector banking system in the wake of the 1991 economic emergency. Bhandari opens with unambiguous figures: of the Rs. 73,308 crores advanced by 20 nationalised banks as of March 1990, at least Rs. 35,000 crores were blocked in non-performing advances; a genuine stock audit of realisation values would place accumulated bad debts at no less than Rs. 20,000 crores. Aggregate deposit growth in all scheduled banks had already slowed from 9.4 per cent (April–September 1989–90) to 7.4 per cent in the corresponding 1990 period. Deposits in nationalised banks stood at Rs. 1,28,999 crores as of March 1990 — a sum the Reserve Bank could protect only by printing notes, making technical solvency a fiction. Recovery rates in agriculture and small-scale industry ranged from 15 to 50 per cent of advances raised. The essay then moves through four structural pathologies. First, banks lack the legal right to take forcible possession of hypothecated security without a civil court order — a process so slow and expensive (court fees of up to 10 per cent of the claimed amount) that securities routinely deteriorate or are transferred before judgment; Bhandari calls for a provision in the Banking Regulation Act equivalent to Section 29 of the State Financial Corporations Act, empowering branch managers to attach and auction assets directly. Second, Health Code classification (the RBI's 8-tier system for loan quality) is systematically manipulated to defer provisioning: banks keep loans in Health Code 4–5 rather than filing suits (Code 6), allowing fictitious interest income to be credited. Third, bank balance sheets since 1949 have been structured to conceal bad debt provisions, with the number of notes on accounts rising from 46 to over 300 since nationalisation; Bhandari compares this unfavourably with US, Canadian, and Western European disclosure norms. Fourth, parliamentary oversight is effectively neutered: financial committees have been denied recovery data outside the agriculture sector for over a decade despite repeated requests, with successive Finance Secretaries citing confidentiality; the Comptroller and Auditor General has been excluded from conducting supplementary audits of nationalised banks despite two Rajya Sabha committee recommendations (1983 and 1984) urging such inclusion. Bhandari's overarching warning is that without immediate legislative and accountability reform, the credit squeeze will tip inflation into triple digits with one bad monsoon. ## Key points - Of Rs. 73,308 crores advanced by 20 nationalised banks (March 1990), at least Rs. 35,000 crores were non-performing; a realistic stock audit would place actual bad debts at Rs. 20,000 crores or more — enough to wipe out the capital and reserves of all 20 banks several times over. - Deposit growth in scheduled banks had already decelerated from 9.4 per cent to 7.4 per cent year-on-year by mid-1990; Bhandari warns that unchecked inflation and eroded confidence could trigger a bank run the RBI could only address by printing currency. - Recovery rates in agriculture and small-scale industry ranged from 15 to 50 per cent, and recovery data for medium and large industry was withheld from Parliament — which Bhandari attributes to the figures being "alarmingly poor". - Banks lack the statutory right to take forcible possession of hypothecated security; suits for recovery can attract court fees as high as 10 per cent of the claimed amount, and by the time cases are heard, assets are often sold or stripped by the borrower. - Health Code classification is systematically manipulated: banks defer suit-filing (Health Code 6) and keep non-performing loans in Codes 4–5 to continue crediting fictitious interest income; the number of notes on accounts concealing this grew from 46 to over 300 since nationalisation in 1969. - India's bank balance-sheet format has been unchanged since the Banking Regulation Act of 1949; provisions for bad debts are not disclosed as separate line items, in contrast to US, Canadian, and Western European banking standards. - The CAG has been excluded from supplementary audit of nationalised banks despite two parliamentary committee recommendations (1983 and 1984) specifically calling for such inclusion; the Government's stated justification — that the CAG lacked actuarial knowledge — is treated by Bhandari as a pretext. - Bhandari calls for branch managers to be granted the legal power to attach and auction debtors' assets without external recourse, modelled on the tax-collection powers of assessing officers, as the only way to avert systemic collapse. --- ## [Primary work] CRISIS OF CONTROLS URL: https://indianliberals.in/primary-works/crisis-of-controls-murarji-j-vaidya-december-8-1960/ ### Summary Delivered as a public address under the auspices of the Forum of Free Enterprise in Bombay on 18 September 1960 and published as a pamphlet on 8 December 1960, Murarji J. Vaidya's "Crisis of Controls" takes the form of a direct argumentative lecture aimed at business and civic audiences in post-independence India. Opening with the observation that India is simultaneously afflicted by a "crisis of character" (as diagnosed by Vice-President Radhakrishnan), a "crisis of development," and a "dilemma of development" in foreign exchange, Vaidya contends that the worst of these crises is the Crisis of Controls — a creeping, totalising bureaucratic regimentation that has spread from the Planning Commission down to the lowest inspector in every corner of the country. Vaidya traces the pathology historically: controls imposed during the Second World War (from 1939 onward) persisted after Independence in 1947 when they should, as in West Germany, Japan, and the United Kingdom, have been systematically dismantled. Instead, India became what he argues is the only free and democratic country in the world still suffering from extensive peacetime controls. He catalogues their reach in granular Bombay terms — milk rationed by booth cards, housing blocked by rent control and building-material permits, exporters stymied by the 305 (out of 375) items still requiring export licences, and industrialists unable to start even a theoretically licence-free small-scale unit (capital up to Rs. 5 lakhs) without separate permits for accommodation, building materials, machinery, and raw materials. The essay draws on Hayek ("economic control is the control of the means for all our ends") and Hilaire Belloc to argue that economic controls inevitably compound, demoralise citizenry, and corrode liberty. The Ludwig Erhard miracle in West Germany — where removing foreign-exchange controls caused shortages to vanish almost overnight — is held up as the proof of concept. Vaidya concludes with a call for the Planning Commission and Parliament to formally adopt a policy of progressively fewer controls, arguing that national development can only advance when individuals are free to deploy their honesty, initiative, and enterprise without fear of inspectors or permit offices. ### Body ## Summary Delivered as a public address under the auspices of the Forum of Free Enterprise in Bombay on 18 September 1960 and published as a pamphlet on 8 December 1960, Murarji J. Vaidya's "Crisis of Controls" takes the form of a direct argumentative lecture aimed at business and civic audiences in post-independence India. Opening with the observation that India is simultaneously afflicted by a "crisis of character" (as diagnosed by Vice-President Radhakrishnan), a "crisis of development," and a "dilemma of development" in foreign exchange, Vaidya contends that the worst of these crises is the Crisis of Controls — a creeping, totalising bureaucratic regimentation that has spread from the Planning Commission down to the lowest inspector in every corner of the country. Vaidya traces the pathology historically: controls imposed during the Second World War (from 1939 onward) persisted after Independence in 1947 when they should, as in West Germany, Japan, and the United Kingdom, have been systematically dismantled. Instead, India became what he argues is the only free and democratic country in the world still suffering from extensive peacetime controls. He catalogues their reach in granular Bombay terms — milk rationed by booth cards, housing blocked by rent control and building-material permits, exporters stymied by the 305 (out of 375) items still requiring export licences, and industrialists unable to start even a theoretically licence-free small-scale unit (capital up to Rs. 5 lakhs) without separate permits for accommodation, building materials, machinery, and raw materials. The essay draws on Hayek ("economic control is the control of the means for all our ends") and Hilaire Belloc to argue that economic controls inevitably compound, demoralise citizenry, and corrode liberty. The Ludwig Erhard miracle in West Germany — where removing foreign-exchange controls caused shortages to vanish almost overnight — is held up as the proof of concept. Vaidya concludes with a call for the Planning Commission and Parliament to formally adopt a policy of progressively fewer controls, arguing that national development can only advance when individuals are free to deploy their honesty, initiative, and enterprise without fear of inspectors or permit offices. ## Key points - Delivered under Forum of Free Enterprise auspices in Bombay, September 1960; published December 1960. - Central thesis: India suffers a "Crisis of Controls" — the most damaging of several concurrent crises — stemming from wartime-era regulations retained and extended after Independence. - Controls span every layer of daily economic life: milk distribution, food pricing, housing, building materials, import-export licences, and industrial permits — even small-scale industries notionally exempt from licensing still require multiple separate permits. - Of 375 export items previously under control, only 70 had been freed by the time of the address, leaving 305 still requiring permits — a direct contradiction of the government's stated export-promotion policy. - Cites West Germany under Ludwig Erhard as the counter-model: removing foreign-exchange controls rapidly eliminated shortages, demonstrating that scarcity and hoarding are themselves products of control psychology. - Quotes Hayek and Hilaire Belloc to argue that economic control is inseparable from control over human life itself, and that extensive controls produce all-round demoralisation in both citizens and government servants. - The Forum of Free Enterprise explicitly accepts planning as legitimate but draws the line at control that deteriorates into near-regimentation, which it characterises as totalitarian rather than democratic. - Policy prescription: the Planning Commission must formally adopt a direction of progressively fewer controls, releasing individual initiative as the engine of genuine planned development. --- ## [Primary work] CRITICAL ISSUES RELATING TO RISING PRICES URL: https://indianliberals.in/primary-works/critical-issues-relating-to-rising-prices-s-s-bhandare-august-17-1995/ ### Summary Published as a Forum of Free Enterprise pamphlet based on the keynote address delivered by S. S. Bhandare — Economic Adviser, Tata Services Ltd. — at a seminar on "Rising Prices" held in Bombay on 12 August 1995 as a centenary tribute to the late economist Prof. C. N. Vakil, this essay offers a rigorous data-driven audit of India's four-and-a-half decades of inflationary experience and charts the unfinished reform agenda of the post-1991 liberalisation era. Bhandare opens with a stark statistical record: between 1950–51 and 1994–95, the Wholesale Price Index rose more than 16.5 times, at a compound annual rate of 6.6 percent. Out of 45 years of planned development, only 16 saw satisfactory price management (defined as inflation not exceeding 5 percent per annum), and in 13 of those 45 years inflation crossed the double-digit threshold. He respectfully contests Lord Meghnad Desai's characterisation of India as a low-inflation economy, noting that from a domestic welfare standpoint the record looks far grimmer, particularly given the adverse distributional effects on the poor. He then lays out five interlocking critical questions: the growth–inflation trade-off; the fiscal consolidation challenge; the management of revenue deficits; the urgency of raising the savings ratio; and the imperative of productivity improvement, including agricultural productivity. On the trade-off, Bhandare provocatively proposes that India may need to accept inflation in the 7–9 percent range in exchange for GDP growth of 7 percent — the growth rate needed to make a decisive impact on poverty and unemployment — rather than sacrificing growth at the altar of 5 percent price stability. He marshals data showing that fiscal consolidation since the 1991 reforms has been fragile: the fiscal deficit-to-GDP ratio fell from 8.4 percent in 1990–91 to 5.7 percent in 1992–93 but slipped back to 7.7 percent in 1993–94 and 6.7 percent in 1994–95. Revenue deficits are growing at 14.3 percent annually while receipts grow at only 13.1 percent; left unchecked, the revenue deficit of the central government could balloon from Rs. 35,541 crores in 1995–96 to Rs. 79,443 crores by 2001. He argues that agricultural productivity — illustrated by India's wheat yield of 2,320 kg per hectare against 7,250 kg in the UK and 3,440 kg in China — is the crucial supply-side lever without which wage-goods inflation cannot be moderated. Bhandare closes by calling for a rededication to Prof. Vakil's agenda: fiscal discipline, higher savings, productivity gains, and expanded wage-goods production. ### Body ## Summary Published as a Forum of Free Enterprise pamphlet based on the keynote address delivered by S. S. Bhandare — Economic Adviser, Tata Services Ltd. — at a seminar on "Rising Prices" held in Bombay on 12 August 1995 as a centenary tribute to the late economist Prof. C. N. Vakil, this essay offers a rigorous data-driven audit of India's four-and-a-half decades of inflationary experience and charts the unfinished reform agenda of the post-1991 liberalisation era. Bhandare opens with a stark statistical record: between 1950–51 and 1994–95, the Wholesale Price Index rose more than 16.5 times, at a compound annual rate of 6.6 percent. Out of 45 years of planned development, only 16 saw satisfactory price management (defined as inflation not exceeding 5 percent per annum), and in 13 of those 45 years inflation crossed the double-digit threshold. He respectfully contests Lord Meghnad Desai's characterisation of India as a low-inflation economy, noting that from a domestic welfare standpoint the record looks far grimmer, particularly given the adverse distributional effects on the poor. He then lays out five interlocking critical questions: the growth–inflation trade-off; the fiscal consolidation challenge; the management of revenue deficits; the urgency of raising the savings ratio; and the imperative of productivity improvement, including agricultural productivity. On the trade-off, Bhandare provocatively proposes that India may need to accept inflation in the 7–9 percent range in exchange for GDP growth of 7 percent — the growth rate needed to make a decisive impact on poverty and unemployment — rather than sacrificing growth at the altar of 5 percent price stability. He marshals data showing that fiscal consolidation since the 1991 reforms has been fragile: the fiscal deficit-to-GDP ratio fell from 8.4 percent in 1990–91 to 5.7 percent in 1992–93 but slipped back to 7.7 percent in 1993–94 and 6.7 percent in 1994–95. Revenue deficits are growing at 14.3 percent annually while receipts grow at only 13.1 percent; left unchecked, the revenue deficit of the central government could balloon from Rs. 35,541 crores in 1995–96 to Rs. 79,443 crores by 2001. He argues that agricultural productivity — illustrated by India's wheat yield of 2,320 kg per hectare against 7,250 kg in the UK and 3,440 kg in China — is the crucial supply-side lever without which wage-goods inflation cannot be moderated. Bhandare closes by calling for a rededication to Prof. Vakil's agenda: fiscal discipline, higher savings, productivity gains, and expanded wage-goods production. ## Key points - Based on keynote address at a seminar in Bombay, 12 August 1995, honouring the birth centenary of economist Prof. C. N. Vakil. - WPI rose more than 16.5 times between 1950–51 and 1994–95 at a compound annual rate of 6.6 percent; only 16 of 45 plan years showed satisfactory price management; double-digit inflation occurred in 13 of those years. - Author challenges Lord Meghnad Desai's "low-inflation" characterisation of India, arguing inflation disproportionately harms the poor and constitutes a serious threat to political stability. - Proposes accepting 7–9 percent inflation as the price of 7 percent GDP growth rather than sacrificing growth for strict price stability, with the condition that at least 50 percent of growth gains reach those below the poverty line. - Fiscal consolidation post-1991 has been fragile: fiscal deficit-to-GDP rebounded to 7.7 percent in 1993–94 after falling to 5.7 percent in 1992–93; revenue expenditure grows at 14.3 percent annually against receipts growth of only 13.1 percent. - Revenue deficit projected to reach Rs. 79,443 crores by 2001 if trends continue unchecked; author proposes halving it by 2001 through 12 percent expenditure restraint and 18 percent revenue growth. - Agricultural productivity gap is a major supply-side constraint: India's wheat yield is 2,320 kg/hectare versus 7,250 kg in the UK; cotton yield is 290 kg/hectare versus 1,560 kg in Australia — unless addressed, wage-goods inflation cannot be moderated. - Savings ratio needs to reach 28–30 percent of GDP to sustain 7 percent growth; current fiscal deficits are diverting investible resources into the revenue deficit, crowding out productive capital formation. --- ## [Primary work] Crushing Burden of Taxation URL: https://indianliberals.in/primary-works/crushing-burden-of-taxation-n-a-palkhivala-dec6-1958/ ### Summary Reproduced from The Hindu's Survey of Indian Industry (22 November 1958), this Forum of Free Enterprise booklet is a closely argued polemic by N. A. Palkhivala against the structure and conduct of Indian tax legislation in the eighth year of the Republic. Palkhivala opens with a constitutional complaint: although the Constitution preserves the balance between Legislature, Executive and Judiciary, in practice the Executive has become predominant, unchecked by any effective parliamentary Opposition or organised public opinion, and able to push tax bills through with almost no scrutiny. The Gift-tax Act of 1958, on which the Select Committee was given less than a week to report, is offered as a representative case of the haste with which half-baked tax legislation is being rushed onto the statute book. The core of the booklet is a forensic tour of recent fiscal statutes.… ### Body ## Summary Reproduced from The Hindu's Survey of Indian Industry (22 November 1958), this Forum of Free Enterprise booklet is a closely argued polemic by N. A. Palkhivala against the structure and conduct of Indian tax legislation in the eighth year of the Republic. Palkhivala opens with a constitutional complaint: although the Constitution preserves the balance between Legislature, Executive and Judiciary, in practice the Executive has become predominant, unchecked by any effective parliamentary Opposition or organised public opinion, and able to push tax bills through with almost no scrutiny. The Gift-tax Act of 1958, on which the Select Committee was given less than a week to report, is offered as a representative case of the haste with which half-baked tax legislation is being rushed onto the statute book. The core of the booklet is a forensic tour of recent fiscal statutes. Palkhivala dissects double taxation under the 1957 Wealth-tax Act, the post-1956 income-tax regime that levies tax twice over on registered firms and their partners, the unjustified penal super-tax on companies that declare large dividends out of past reserves (Section 23A) or refuse to declare a dividend at all (Section 33A), and the "business connection" doctrine of Section 42, which he argues is severely damaging India's trade with foreign countries. India, he notes with characteristic acidity, is the first country in the world to levy expenditure-tax, an unprecedented imposition on "a nation which has so little to expend", and one whose revenue yield is trivial set against its discouraging effect on businessmen. The second movement of the argument is moral and institutional. Palkhivala accuses the Government of treating taxation as an exercise in abstract theory and doctrinaire fiscal craftsmanship, designed by statistical experts who ignore the human element. He calls for "men of humanity, vision and imagination" — citing Charles Morgan's Liberties of the Mind — to be brought into the framing of tax law, and warns that the elaborate new taxing pattern has not in fact checked tax-evasion: "the income-tax, wealth-tax and expenditure-tax returns of some of the wealthiest men in India" should be made public if the authorities' claims are to be tested. The closing pages invoke Voltaire, Browning, Montesquieu, Justice Harman in Moorhouse v. Dooland, and an edict of Czar Peter I to warn that elected representatives, like autocrats, can grow deaf to reasoned public protest, and that despite all the grievances aired "there has been no response from New Delhi." ## Key points - Frames the central problem as constitutional: in the eighth year of the Republic, the Executive has become predominant over the Legislature and Judiciary, allowing tax bills to pass with negligible scrutiny. - Singles out the Gift-tax Act of 1958 as an emblem of rushed legislation: the Select Committee was given less than a week to report before it was passed and brought into force retrospectively. - Attacks the post-1956 income-tax regime and the 1957 Wealth-tax Act for systematically double-taxing registered firms, partners, companies and shareholders on the same income or assets. - Critiques Section 23A and Section 33A of the Income-tax Act for imposing penal super-tax on companies whether they declare large dividends out of past reserves or refuse to declare a dividend altogether. - Argues that the 'business connection' doctrine in Section 42 is uniquely Indian (with only Australia as a partial parallel) and is damaging the country's trade with foreign countries. - Highlights India as the first country in the world to levy expenditure-tax, a measure he calls economically misconceived and revenue-trivial, and one that may actually encourage evasion through corporate expense accounts. - Calls for tax legislation to be drafted with the help of 'men of humanity, vision and imagination' — humane counsellors of the sort that Commissions and Advisory Councils conspicuously lack — not only statistical experts. - Concludes that despite the elaborate new pattern of taxation, tax-evasion has not been checked, and that grievances ventilated through public protest have been met with silence from New Delhi. --- ## [Primary work] Customer Protection in Banks – Emerging Issues and Challenges URL: https://indianliberals.in/primary-works/customer-protection-in-banks-dr-k-c-chakrabarty-december-3-2012/ ### Summary Dr. K. C. Chakrabarty, then Deputy Governor of the Reserve Bank of India, delivers the Eighth M. R. Pai Memorial Lecture in Mumbai on 6 September 2012. The Pai Award that year goes to SEWA — the Self-Employed Women's Association — and the function is jointly organised by Punjab & Maharashtra Co-operative Bank and the All-India Bank Depositors' Association (AIBDA). Chakrabarty uses the occasion to frame customer protection as a 'central issue' for developing economies opening their financial sectors, and to position Pai's lifelong advocacy of fair treatment, transparency, and non-exploitative pricing as the moral throughline that ties the older consumer-rights tradition to today's regulatory agenda. The argumentative core of the speech is that financial-services consumers are structurally disadvantaged: information asymmetry, the high cost of collective action, and the upper hand routinely enjoyed by providers mean that markets alone cannot deliver fair outcomes.… ### Body ## Summary Dr. K. C. Chakrabarty, then Deputy Governor of the Reserve Bank of India, delivers the Eighth M. R. Pai Memorial Lecture in Mumbai on 6 September 2012. The Pai Award that year goes to SEWA — the Self-Employed Women's Association — and the function is jointly organised by Punjab & Maharashtra Co-operative Bank and the All-India Bank Depositors' Association (AIBDA). Chakrabarty uses the occasion to frame customer protection as a 'central issue' for developing economies opening their financial sectors, and to position Pai's lifelong advocacy of fair treatment, transparency, and non-exploitative pricing as the moral throughline that ties the older consumer-rights tradition to today's regulatory agenda. The argumentative core of the speech is that financial-services consumers are structurally disadvantaged: information asymmetry, the high cost of collective action, and the upper hand routinely enjoyed by providers mean that markets alone cannot deliver fair outcomes. Banking, in particular, is a heavily regulated industry whose stiff entry barriers produce monopolistic conditions at the regional and local level, so the regulator must pursue 'twin objectives' — extending financial access to unbanked populations while protecting existing customers from exploitation. Unchecked market forces combined with lax oversight, Chakrabarty warns, can turn financial inclusion into a channel for exploiting the bottom of the pyramid rather than serving it. The speech then catalogues specific abuses: discriminatory interest rates that pay retail depositors less than bulk depositors though retail money is more stable; deceptive deposit-tenor pricing where rates jump or collapse at arbitrary cut-offs like 500, 501 or 499 days; opaque sweep-out facilities that quietly cut effective rates below savings-bank levels; non-transparent loan pricing; and the failure of falling transaction costs to translate into lower bank charges. Chakrabarty endorses the Damodaran Committee's recommendation that the burden of proving an unauthorised electronic transaction should rest on the bank rather than the customer, and argues that the Indian Banks' Association's zero-liability and compensation policies for card misuse remain inadequate. He treats customer education as 'an investment and not an expense', and in a counter-intuitive aside urges the poor not to invest in gold, because financial illiteracy traps small savers in yieldless metal that ends up enriching others. The closing sections welcome the Financial Sector Legislative Reforms Commission's listing of customer protection as the first objective of financial regulation, recommend the FSLRC's framework on consumer rights, and call on banks, regulators, and civil-society organisations like AIBDA to build a 'strong, effective and robust consumer movement' as the truest tribute to Pai and SEWA. ## Key points - Chakrabarty frames customer protection in banking as the 'central issue' for developing economies opening their financial sectors, anchoring his case in M. R. Pai's lifelong advocacy of fair treatment and non-exploitative pricing. - He argues that financial-services consumers occupy a structurally disadvantaged position created by information asymmetry, dispersion, and the higher cost of organising into pressure groups, so market forces alone cannot deliver fair outcomes. - Banking's stiff entry barriers, he says, produce monopolistic conditions at the regional and local level; the regulator must therefore pursue 'twin objectives' of financial inclusion and customer protection. - He details specific abuses in deposit pricing — including the disparity between retail and bulk depositors and the manipulative use of 500/501/499-day cut-offs — and demands transparent, non-discriminatory pricing of deposits, credit, and ancillary services. - He endorses the Damodaran Committee recommendation that the burden of proving an unauthorised electronic transaction should rest on the bank rather than the customer, and criticises the Indian Banks' Association's zero-liability clause for card misuse as inadequate. - He argues that the falling unit cost of banking, driven by ICT, has not been passed on to consumers, and that customer education is 'an investment and not an expense' rather than a charity programme. - A counter-intuitive passage urges the poor to stop buying gold, on the ground that low financial literacy traps small savers in yieldless assets and drains household savings from the banking channel. - He welcomes the Financial Sector Legislative Reforms Commission (FSLRC), chaired by Justice B N Srikrishna, for listing customer protection as the first objective of financial regulation, and calls for a 'strong, effective and robust consumer movement' as a tribute to Pai and SEWA. --- ## [Primary work] CUSTOMER URL: https://indianliberals.in/primary-works/customer-raison-d-etre-of-business-anand-sinha-december-3-2013/ ### Summary Delivered by Anand Sinha, Deputy Governor of the Reserve Bank of India, at the Ninth M. R. Pai Memorial Award Function in Mumbai on 31 October 2013 and published as a Forum of Free Enterprise booklet on 3 December 2013, this address argues that the customer is the very 'raison d'être' of business and treats consumer protection and empowerment as the organising centre of banking policy. Sinha frames the talk as a tribute to M. R. Pai and to the award's recipient, Shirish Deshpande, casting both as exemplars of the consumer-rights tradition; he leans on Mahatma Gandhi's well-known lines on the customer as the speech's foundational text. The core argument rests on three 'mutually reinforcing pillars' of efficient customer service: promoting competition, enforcing regulation, and empowering customers through financial literacy.… ### Body ## Summary Delivered by Anand Sinha, Deputy Governor of the Reserve Bank of India, at the Ninth M. R. Pai Memorial Award Function in Mumbai on 31 October 2013 and published as a Forum of Free Enterprise booklet on 3 December 2013, this address argues that the customer is the very 'raison d'être' of business and treats consumer protection and empowerment as the organising centre of banking policy. Sinha frames the talk as a tribute to M. R. Pai and to the award's recipient, Shirish Deshpande, casting both as exemplars of the consumer-rights tradition; he leans on Mahatma Gandhi's well-known lines on the customer as the speech's foundational text. The core argument rests on three 'mutually reinforcing pillars' of efficient customer service: promoting competition, enforcing regulation, and empowering customers through financial literacy. Sinha defends regulation as a necessary discipline on service providers — using KYC norms (likened to airport frisking) as a worked example — and surveys the Reserve Bank's apparatus for customer redress, including the Banking Ombudsman Scheme (1995, fifteen offices, twenty-seven grounds of complaint) and the Banking Codes and Standards Board of India (2006), alongside the Damodaran Committee and the recent Financial Sector Legislative Reforms Commission (FSLRC) recommendations on consumer protection. A substantial middle section catalogues the Reserve Bank's financial-inclusion measures: branch-authorisation relaxations for unbanked Tier 2–6 centres, the Business Correspondent/Business Facilitator model, the Basic Savings Bank Deposit Account with Zero Balance, Kisan and General Credit Cards, and the three-year drive (April 2010–March 2013) that opened roughly 268,000 outlets and 109 million accounts. Sinha closes by arguing that competition alone cannot ensure good service — only regulation plus an informed, 'wary and alert' customer can — and exhorts service providers to 'get their act together' in meeting customer expectations. ## Key points - Memorial address by RBI Deputy Governor Anand Sinha at the Ninth M. R. Pai Memorial Award Function (31 October 2013, Mumbai), sponsored by Punjab & Maharashtra Co-operative Bank and arranged jointly by AIBDA, the Forum of Free Enterprise and the M. R. Pai Foundation. - Frames the customer as the 'raison d'être' of business and uses Mahatma Gandhi's lines on the customer as foundational text. - Proposes three mutually reinforcing pillars of efficient customer service: promoting competition, enforcing regulation, and empowering customers through financial literacy. - Surveys post-1991 banking competition — twelve private-bank licences across 1993 and 2001, current totals of 87 banks (26 public, 20 private, 41 foreign), 82 RRBs and 1,618 urban co-operative banks — and the RBI's Discussion Paper on 'Banking Structure in India — The Way Forward'. - Defends KYC norms as analogous to airport frisking and lists simplifications: small-account self-certification, Aadhaar, NREGA card, e-KYC, and the proposed Central KYC Registry. - Anchors customer redress in two institutional pillars — the Banking Ombudsman Scheme (1995; 15 offices; 27 grounds; free online complaint route) and the Banking Codes and Standards Board of India (2006) — and cites the Talwar (1975), Goiporia (1990), Narasimham, Tarapore (2004), Damodaran (2010) committees, and the FSLRC. - Catalogues financial-inclusion measures: branching relaxations for Tier 2–6 unbanked centres, the BC/BF doorstep-banking model, the Basic Savings Bank Deposit Account with Zero Balance, KCC and GCC credit instruments — yielding ~268,000 banking outlets and ~109 million BSBDAs over April 2010 – March 2013. - Argues that competition alone is insufficient and that an informed, 'wary and alert' customer — supported by RBI Outreach, eBAAT and Financial Literacy Centres run with state governments and NGOs — is the biggest disciplining factor on service providers. --- ## [Primary work] DANGER OF OUTMODED SOCIALISM TO INDIA'S WELFARE URL: https://indianliberals.in/primary-works/danger-of-outmoded-socialism-to-indias-welfare-murarji-j-vaidya-janruary-15-1967/ ### Summary Murarji J. Vaidya's 1966 presidential address to the Forum of Free Enterprise — published as a pamphlet in January 1967 — diagnoses India's mid-1960s economic crisis as the cumulative consequence of the 'so-called socialist economic ideology' embraced by the Government since 1955. Writing in the wake of the rupee devaluation, runaway food imports, soaring prices and an aborted Third Plan, Vaidya argues that centralised comprehensive planning has produced not equality but inflation, food scarcity, capital flight and the political concentration that he sees as freedom's first casualty in self-described 'People's Democratic Republics.' The pamphlet marshals a battery of contemporary evidence — Reserve Bank price-rise figures, Parliamentary Committee reports on Public Undertakings, Audit Reports, World Bank and U.N. FAO assessments, and press accounts of agricultural waste — to indict deficit financing, zonal trading barriers, monopoly procurement and the loss-making expansion of the Public Sector.… ### Body ## Summary Murarji J. Vaidya's 1966 presidential address to the Forum of Free Enterprise — published as a pamphlet in January 1967 — diagnoses India's mid-1960s economic crisis as the cumulative consequence of the 'so-called socialist economic ideology' embraced by the Government since 1955. Writing in the wake of the rupee devaluation, runaway food imports, soaring prices and an aborted Third Plan, Vaidya argues that centralised comprehensive planning has produced not equality but inflation, food scarcity, capital flight and the political concentration that he sees as freedom's first casualty in self-described 'People's Democratic Republics.' The pamphlet marshals a battery of contemporary evidence — Reserve Bank price-rise figures, Parliamentary Committee reports on Public Undertakings, Audit Reports, World Bank and U.N. FAO assessments, and press accounts of agricultural waste — to indict deficit financing, zonal trading barriers, monopoly procurement and the loss-making expansion of the Public Sector. Vaidya draws ironic contrasts with reforms inside the Communist bloc itself: 86% of Yugoslav agricultural land in private hands, the Liberman Thesis of the 'profit motive' reshaping Soviet enterprise, and Polish and Hungarian retreats from collectivisation. India, he insists, is moving against this current rather than with it. The constructive half of the address calls not for abandoning planning but for transforming the Planning Commission into a purely advisory, non-political body of technical experts, and for the State to confine itself to infrastructure: administration and law-and-order, transport, communications, agricultural extension, education, public health and sanitation. Vaidya closes on the polemical frame that titles the pamphlet — India stands 'at the crossroads,' between persisting in the ideological errors of the past at the risk of jeopardising the democratic way of life, or adopting 'realistic economic measures based on the laws of the market' that would, in his phrase, 'give an edge to the honest' rather than to the dishonest. ## Key points - Frames India's mid-1960s economic crisis — galloping inflation, rupee devaluation, food scarcity, capital flight — as the cumulative consequence of the socialist ideology adopted by the Government since 1955, not as an overnight phenomenon. - Argues that the centralised comprehensive planning ideal has failed everywhere it has been tried, and that 'People's Democratic Republics' are in practice dictatorships of political and military cliques rather than vehicles of equality. - Documents that Communist states themselves are retreating from state ownership: 86% of Yugoslav agricultural land in private hands, the Liberman Thesis on profit motive in the USSR, Polish reforms, and the rediscovery of price incentives in Kommunist. - Indicts the Public Sector's record with concrete data — Rs. 111 crores of losses by 1964-65, Hindustan Machine Tools failing to declare a dividend, the Indore fan factory, Bhilai Steel surpluses, Traco Cable delays — and notes the flight of 14,063 officials from public undertakings to private firms. - Critiques deficit financing (Rs. 2,100 crores in Second and Third Plans), zonal trading barriers that profited state governments at the cost of producers and consumers, monopoly procurement at unremunerative prices, and the FCI as 'the biggest middleman'. - Calls for transforming the Planning Commission into a purely advisory, non-political technical body and confining the State to infrastructure: administration, transport, communications, agricultural extension, education, public health, postal services. - Cites Reserve Bank Governor warnings, Parliamentary Committee on Public Undertakings reports, Audit Report (Commercial), World Bank Mission findings and U.N. FAO data as the evidentiary base for the indictment. - Closes on the 'crossroads' frame: India must choose between persisting in ideological error or adopting market-based measures that 'give an edge to the honest' rather than penalise honest entrepreneurs and citizens. --- ## [Primary work] DANGERS OF WEALTH TAX URL: https://indianliberals.in/primary-works/dangers-of-wealth-tax-by-sh-batlivala-may-26-1957/ ### Summary S. H. Batlivala's short polemic, reprinted from The Times of India of 26 May 1957 by the Forum of Free Enterprise, attacks the Wealth Tax and Expenditure Tax that India's recent budget had introduced as instruments to move the country towards 'our special brand of socialistic society.' Batlivala argues that experts were not properly consulted before this experiment was launched, and that a glance at recent economic history would have shown the dangers. He notes that the very same form of taxation was contemplated more than a quarter-century earlier in conservative, economically advanced Britain — and rejected after due deliberation. The bulk of the piece is a historical case study of the 1919 British debate on a capital levy proposed to reconstruct industry and reduce war debt after the First World War. He recounts that Dr. Hugh Dalton championed the idea, Lord Keynes and Lord Stamp engaged it in debate, and the Labour Party endorsed it only half-heartedly with a graduated levy on estates above £5,000. The Treasury and the economists, he says, ultimately concluded that the yield would be trifling compared to the administrative difficulties and economic damage.… ### Body ## Summary S. H. Batlivala's short polemic, reprinted from The Times of India of 26 May 1957 by the Forum of Free Enterprise, attacks the Wealth Tax and Expenditure Tax that India's recent budget had introduced as instruments to move the country towards 'our special brand of socialistic society.' Batlivala argues that experts were not properly consulted before this experiment was launched, and that a glance at recent economic history would have shown the dangers. He notes that the very same form of taxation was contemplated more than a quarter-century earlier in conservative, economically advanced Britain — and rejected after due deliberation. The bulk of the piece is a historical case study of the 1919 British debate on a capital levy proposed to reconstruct industry and reduce war debt after the First World War. He recounts that Dr. Hugh Dalton championed the idea, Lord Keynes and Lord Stamp engaged it in debate, and the Labour Party endorsed it only half-heartedly with a graduated levy on estates above £5,000. The Treasury and the economists, he says, ultimately concluded that the yield would be trifling compared to the administrative difficulties and economic damage. He enumerates six dangers raised against capital levies — including capital flight, the depression of security values, forced asset sales depressing market prices, and an unfair burden on widows and spendthrift-affected families. Batlivala then turns to the 1951 revival of the levy proposal in the U.K. by S. P. Chambers, a former British Civil Service member, and to Chambers's verdict that 'a tax which cannot be collected until 1955 is not much good for financing the expenditure of 1951.' Closing with rhetorical flourish, he warns that if the Indian Finance Minister persists in 'confiscatory methods aided and abetted by Ordinances,' the situation may be described in Disraeli's words uttered against Gladstone's Cabinet in 1872 — a picture of exhausted volcanoes, ministerial extravagance, and 'the dark rumblings of the sea.' ## Key points - Frames the 1957 Wealth Tax and Expenditure Tax as steps toward a 'special brand of socialistic society' and faults the government for not consulting economic experts before adopting them. - Argues from historical analogy: Britain considered and rejected a capital levy in 1919 after rigorous Treasury and economist scrutiny. - Identifies Dr. Hugh Dalton as the chief protagonist of the 1919 British capital-levy idea, with Lord Keynes and Lord Stamp also entering the debate. - Lists six concrete dangers of a capital levy: insufficient capital for industrial reconstruction, higher working capital and wage costs, forced universal liquidation of British securities, capital flight, depressed market prices for government and industrial shares, and a heavy fall in security values. - Notes that Mr. S. P. Chambers, reviving the proposal in the U.K. in 1951, conceded it was administratively useless because 'a tax which cannot be collected until 1955 is not much good for financing the expenditure of 1951.' - Warns that confiscatory levies, especially those imposed by ordinance, will produce the 'extravagance for energy' that Disraeli ascribed to Gladstone's late ministry in 1872. - Published as a Forum of Free Enterprise pamphlet from 'Sohrab House', 235 Dr. Dadabhai Naoroji Road, Bombay-1. --- ## [Primary work] Decade of Determination to Achieve Sustainable Development URL: https://indianliberals.in/primary-works/decades-of-determination-to-achieve-sustainable-development-prof-u-r-rao/ ### Summary Prof. U. R. Rao's T. A. Pai Memorial Lecture (delivered at Hyderabad in January 1997 and published by the Forum of Free Enterprise) frames the next ten years as a decisive window in which India must commit to 'integrated sustainable development' or face a catastrophe of mass starvation. Drawing on the 1992 Rio Summit's language of a 'defining moment in history,' Rao opens with a stark stocktaking of post-independence India: a fivefold rise in GNP and self-sufficiency in food grains since 1950, set against 47% illiteracy, 130-per-thousand under-five mortality, a $1,000 per-capita GDP, rank 135 of 175 on the human development index, and a forest cover below 20%.… ### Body ## Summary Prof. U. R. Rao's T. A. Pai Memorial Lecture (delivered at Hyderabad in January 1997 and published by the Forum of Free Enterprise) frames the next ten years as a decisive window in which India must commit to 'integrated sustainable development' or face a catastrophe of mass starvation. Drawing on the 1992 Rio Summit's language of a 'defining moment in history,' Rao opens with a stark stocktaking of post-independence India: a fivefold rise in GNP and self-sufficiency in food grains since 1950, set against 47% illiteracy, 130-per-thousand under-five mortality, a $1,000 per-capita GDP, rank 135 of 175 on the human development index, and a forest cover below 20%. He attributes the gap between aggregate growth and human well-being to runaway population growth, environmental degradation, the negative repercussions of the Green Revolution, and inadequate human-capital investment. The central argument is that only an aggressive harnessing of science and technology — biotechnology, watershed-based integrated agriculture, INSAT-driven communications, satellite remote sensing, GRAMSAT-enabled distance education, VSATs, and the information super-highway — can deliver fast, sustainable growth. Rao reports concrete watershed pilots in Ananthpur, Ahmednagar, and Panchamahals where integrated strategies recovered drought-prone districts within two years and offers a tour through global telecom developments (Iridium, Teledesic, LEO constellations, DTH-TV, multimedia) to argue that India's competitive advantage now depends on absorbing these tools rather than on raw natural resources. In the closing 'Policy Issues' section, Rao turns polemical: he attacks the 'beneficiary-oriented ad-hoc approach,' the licensing-and-subsidy regime, and what he calls the country's 'incestuous obsession with politics' at the expense of science. Citing economists' consensus that Import Substitution was a fundamental mistake — a policy that 'reproduced beautifully the disadvantages of communism without any of its benefits' — he calls for an 8% growth target, substantial privatisation of energy/transport/communications, higher allocations to education (3% of GDP), health (2%) and R&D (under 1%), and a proactive, rationally tariffed telecom regime to stop the outflow of foreign exchange to overseas satellite operators. The rendered pages end mid-discussion of GATT and the Rio/Montreal accords, just as Rao begins to argue that developing nations cannot compete on equal footing without first building indigenous scientific self-reliance. ## Key points - Frames the coming decade as a make-or-break window for 'integrated sustainable development', invoking the 1992 Rio Summit's 'defining moment in history' language. - Stacks impressive aggregate gains since 1950 (GNP up fivefold, food grains 55 to 190 m.t., life expectancy 30 to 60) against persistent failures: 40% poverty, 47% illiteracy, 66% female illiteracy, infant/child mortality of 130 per thousand, HDI rank 135/175. - Identifies population pressure, deforestation, soil/water degradation, mega-slum formation, and the 'very green revolution's' negative repercussions as the binding ecological constraints on growth. - Argues for a biotechnology-and-watershed-led second agricultural revolution to lift food output to 350 m.t. and cites pilot watersheds in Ananthpur, Ahmednagar and Panchamahals as proof that integrated strategies pay back inside two years. - Treats INSAT, GRAMSAT, VSAT, LEO constellations, digital video compression and the information super-highway as the central infrastructure of a knowledge economy in which 'information has become the most powerful currency of power'. - Attacks the licensing-subsidy regime and Import Substitution as having reproduced 'the disadvantages of communism without any of its benefits' and demands an 8% growth target with substantial privatisation of energy, transport and communications. - Calls out underinvestment in human capital — 3% of GDP on education, 2% on health, under 1% on R&D — as incompatible with becoming a competitive knowledge economy. - Singles out India's telecom monopoly and ad-hoc uplinking restrictions as a case study in 'short-sighted policy' that has pushed private TV networks to uplink from foreign soil and drained foreign exchange. --- ## [Primary work] Defence & Development with Stability URL: https://indianliberals.in/primary-works/defence-and-devpt-adshroff-jan12-1965/ ### Summary Defence & Development with Stability is the text of A. D. Shroff's presidential address at the eighth annual general meeting of the Forum of Free Enterprise, delivered in Bombay on 9 December 1964 and published as a Forum pamphlet in January 1965. Shroff frames India's economic challenge along three axes: the rapid-development goal set by the 1948 First Industrial Policy Resolution, the dimension of defence forced on national consciousness by the Chinese aggression of 1962, and the new dimension of stability raised by the 1964 price upswing. Drawing on Adam Smith, Friedrich List, Hamilton, Jefferson, Clausewitz and the military commentator Edward Mead Earle, he argues that defence is the prior condition of liberty and prosperity, and that the political, psychological and economic foundations of defence are inseparable from the country's productive base. The bulk of the address is a sustained attack on the Second and Third Plans, which Shroff says were drawn up on ideological lines using Soviet 'physical planning' techniques.… ### Body ## Summary Defence & Development with Stability is the text of A. D. Shroff's presidential address at the eighth annual general meeting of the Forum of Free Enterprise, delivered in Bombay on 9 December 1964 and published as a Forum pamphlet in January 1965. Shroff frames India's economic challenge along three axes: the rapid-development goal set by the 1948 First Industrial Policy Resolution, the dimension of defence forced on national consciousness by the Chinese aggression of 1962, and the new dimension of stability raised by the 1964 price upswing. Drawing on Adam Smith, Friedrich List, Hamilton, Jefferson, Clausewitz and the military commentator Edward Mead Earle, he argues that defence is the prior condition of liberty and prosperity, and that the political, psychological and economic foundations of defence are inseparable from the country's productive base. The bulk of the address is a sustained attack on the Second and Third Plans, which Shroff says were drawn up on ideological lines using Soviet 'physical planning' techniques. He marshals Reserve Bank of India data — a 14% rise in prices for the year to September 1964, food articles up 23.6%, retained company profits down sharply — and traces the price spiral to deficit financing (money supply up 55% from 1955-56 to November 1964) rather than to hoarding alone. He devotes long passages to losses and mismanagement in public sector undertakings (Ashoka Hotel, Praga Tools, Hindustan Aircraft, Hindustan Machine Tools, Mysore's bicycle factory, the Slate Trading Corporation, Hindustan Steel and the Fertiliser Corporation of India), drawing on Comptroller and Auditor-General and Public Accounts Committee reports and on the criticism of trade-union leaders such as Satish Loomba of AITUC and George Fernandes. The address then turns to recent reforms in the Soviet bloc — Pravda's call for decentralisation in light industry, Walter Ulbricht's 'new economic policy' in East Germany, the Vienna communist conference's critique of Czechoslovakia, Khrushchev's reorganisation of Soviet agriculture, and writings by Lev Leontyev and Tiapeznikov — to argue that communists themselves are repudiating centralised planning. Shroff endorses Lal Bahadur Shastri's 'economic commonsense', cites M. C. Chagla's disclosure of bureaucratic delay over an International Students' Hostel, and concludes that the Planning Commission should be remodelled on French advisory lines and India should move from 'imperative planning' of the Soviet type to 'indicative planning' of the French type. The pamphlet closes with Shroff's signature line that free enterprise was born with man and shall survive as long as man survives. ## Key points - Frames India's economic challenge as a three-fold problem of defence (post-1962 Chinese aggression), development, and stability (1964 price upswing). - Invokes Adam Smith, Friedrich List, Hamilton and Jefferson to argue that defence is the precondition of liberty, property and prosperity. - Uses Reserve Bank of India data on the 14% price rise (food articles +23.6%, manufactures +4.7%) to attribute inflation to deficit financing, not hoarding alone. - Catalogues losses, overstaffing and mismanagement in public sector undertakings via Comptroller and Auditor-General, Estimates Committee and Public Accounts Committee reports. - Quotes trade-union leaders Satish Loomba (AITUC, 'New Age') and George Fernandes as witnesses that public sector enterprises are 'the biggest' but also 'the rotten-est' employer. - Reviews Soviet, East German, Czechoslovak and Chinese reforms — citing Pravda, Walter Ulbricht, Khrushchev, Lev Leontyev and Tiapeznikov — as evidence that communists themselves are abandoning centralised planning. - Endorses Lal Bahadur Shastri's call for a shift back to agriculture and consumer-goods industries and his rejection of runaway inflation. - Concludes by demanding that the Planning Commission be remodelled on French lines as a purely advisory body, replacing 'imperative planning' of the Soviet type with 'indicative planning' of the French type. --- ## [Primary work] Deficit Financing and Inflation URL: https://indianliberals.in/primary-works/deficit-financing-and-inflation-prof-c-n-vakil-may-11-1967/ ### Summary Prof. C. N. Vakil's pamphlet collects a five-part series of articles, originally published in the Free Press Journal (Bombay, 15–20 March 1967) and reissued by the Forum of Free Enterprise in May 1967, that diagnoses India's continuously rising prices as the product of deliberate government action rather than impersonal market forces. Writing just after the formation of new governments at the Centre and in the States, Vakil opens with a historical detour through the British experience after the First World War, the unmasking of currency inflation by Sir Edwin Cannan, and the wartime Indian campaign led by Kumarappa's Harijan articles and a 30-economist manifesto of 1943 — used as a parable for how administrations characteristically deny inflation, prosecute their critics, and blame symptoms (hoarders, profiteers, black-marketeers) rather than the root cause. The analytic core of the booklet identifies that root cause as deficit financing: public expenditure 'greatly in excess of genuine resources,' funded by ad hoc treasury bills drawn on the Reserve Bank.… ### Body ## Summary Prof. C. N. Vakil's pamphlet collects a five-part series of articles, originally published in the Free Press Journal (Bombay, 15–20 March 1967) and reissued by the Forum of Free Enterprise in May 1967, that diagnoses India's continuously rising prices as the product of deliberate government action rather than impersonal market forces. Writing just after the formation of new governments at the Centre and in the States, Vakil opens with a historical detour through the British experience after the First World War, the unmasking of currency inflation by Sir Edwin Cannan, and the wartime Indian campaign led by Kumarappa's Harijan articles and a 30-economist manifesto of 1943 — used as a parable for how administrations characteristically deny inflation, prosecute their critics, and blame symptoms (hoarders, profiteers, black-marketeers) rather than the root cause. The analytic core of the booklet identifies that root cause as deficit financing: public expenditure 'greatly in excess of genuine resources,' funded by ad hoc treasury bills drawn on the Reserve Bank. Vakil traces how this creates artificial purchasing power, drives a wholesale-price index that rose from 125 in 1962 to 203.8 by late February 1967, hollows out small savings, pushes capital into land and gold, and reproduces itself through fresh dearness-allowance demands by organised trade unions and government commissions of enquiry — a circle he describes as a 'go-slow' on prices. He attacks inflation as 'a form of regressive taxation,' a hidden levy that falls hardest on the poor and middle classes, aggravates inequality, and creates the social and political instability that benefits parties promising the moon. The remedial chapters press for strict economy in public expenditure (Plan and non-Plan), revision of the tax structure to lighten essential consumption while extending agricultural income tax, removal of surplus government staff, a firm 'no more deficit financing' rule, freezing of all incomes and profits for a transition year with trade-union and political-party co-operation, and a unified Centre–States policy on prices, food-grain distribution and production. Vakil closes with a warning that without such a co-ordinated, statesmanlike response the country drifts toward 'unknown disasters,' and that the task before the Union Cabinet and the Union Finance Minister is 'unenviable.' ## Key points - Diagnoses India's 1967 inflation as a problem of policy choice — deficit financing through ad hoc treasury bills on the Reserve Bank — rather than of natural scarcity or external pressure. - Uses historical parallels (Britain post-1918, India 1943–44 under Kumarappa and 30 economists) to argue that governments habitually conceal inflation, prosecute critics, and scapegoat hoarders and profiteers. - Cites a wholesale-price index rising from 125 (1962) to 184 (June 1966 devaluation) to 203.8 by 25 February 1967, projecting 250 by the next agricultural season. - Treats inflation as 'regressive taxation' that erodes small savings, pauperises middle and poor classes, encourages flight into land, gold and foreign exchange, and creates artificial scarcity through hoarding. - Critiques the wage–price spiral driven by dearness-allowance commissions, trade-union go-slows and election-time promises of more rewards without more work. - Recommends strict economy in Centre and State expenditure, a firm 'no deficit financing' commitment, revision of the tax structure to extend agricultural income tax, removal of surplus government staff, and freezing of all incomes for about a year. - Argues that inflation control requires a unified, statesmanlike Centre–State policy on prices, food-grain distribution and production; isolated state action cannot work. - Frames the booklet within the Forum of Free Enterprise's stance — citing Eugene Black and A. D. Shroff in sidebar quotations — that private enterprise is an affirmative good, not a necessary evil. --- ## [Primary work] Deficit Financing, Inflation and Price Control URL: https://indianliberals.in/primary-works/deficit-financing-inflation-and-price-control-k-j-ayaraman-november-14-1973/ ### Summary K. Jayaraman, a retired Indian Economic Service officer and former Director of Review and Research at the Tariff Commission, delivers this Forum of Free Enterprise lecture (Bombay, 25 July 1973; booklet dated 14 November 1973) as a diagnostic of the 1973 inflationary crisis. He opens with the headline fact that prices have risen by more than 22 per cent in a single year — the steepest in recent memory — with food articles accounting for over two-thirds of the rise and industrial raw materials up more than 30 per cent. The pamphlet treats inflation as "confiscation without compensation" and as "robbery on national scale," arguing that anti-price-rise demonstrations have begun to deteriorate into lawlessness while government pricing policy itself adds fuel. The central economic argument traces the rise of deficit financing from mild post-Independence levels through the 1964-65 acceleration, the 1966 rupee devaluation, the 1971-72 industrial slump, and the alarming jump in 1972-73 — culminating in deficit financing of Rs. 380 crores in the first three months of 1973-74 against a budgeted Rs. 75 crores for the whole year.… ### Body ## Summary K. Jayaraman, a retired Indian Economic Service officer and former Director of Review and Research at the Tariff Commission, delivers this Forum of Free Enterprise lecture (Bombay, 25 July 1973; booklet dated 14 November 1973) as a diagnostic of the 1973 inflationary crisis. He opens with the headline fact that prices have risen by more than 22 per cent in a single year — the steepest in recent memory — with food articles accounting for over two-thirds of the rise and industrial raw materials up more than 30 per cent. The pamphlet treats inflation as "confiscation without compensation" and as "robbery on national scale," arguing that anti-price-rise demonstrations have begun to deteriorate into lawlessness while government pricing policy itself adds fuel. The central economic argument traces the rise of deficit financing from mild post-Independence levels through the 1964-65 acceleration, the 1966 rupee devaluation, the 1971-72 industrial slump, and the alarming jump in 1972-73 — culminating in deficit financing of Rs. 380 crores in the first three months of 1973-74 against a budgeted Rs. 75 crores for the whole year. Jayaraman acknowledges the Reserve Bank's credit-squeeze and successive Bank Rate hikes but insists, citing Keynes, that interest-rate weapons are blunt in an oligopolistic, government-deficit-driven economy, and that real savings rather than passive deposit accumulation are what curb inflation. On price control he is scathing. Indian prices, he argues, are set neither by competitive markets nor by any coherent long-term strategy but by ad hoc administrative responses to immediate pressures. He works through the distortions — vanaspati and groundnut oil, rubber tyres feeding off priority rubber prices, steel as a strategic product priced below world levels — and adopts the late Professor D. R. Gadgil's verdict that cost-plus pricing is "the most costly way of enforcing price control," rewarding inefficient producers and penalising the honest consumer. He quotes J. R. D. Tata's 1972-73 Tata Iron and Steel annual report to argue that price-fixing authorities have evolved no norms or techniques of costing that would force producer and consumer alike to gain from cost cutting. The closing pages invoke Professor B. R. Shenoy's diagnosis of "perverse income shifts" and former RBI Governor L. K. Jha's warning that deficit financing must be a supplement to, not a substitute for, resources mobilisation. Jayaraman dismisses wage-freeze proposals on the ground that wages form only one-fifth of total commodity cost and barely six per cent of GNP, and that the link between Indian wages and prices is weak and erratic. His prescription is to maximise production by linking wage rises to productivity, eliminate licence-permit red tape, restrain conspicuous consumption, unearth black money, and streamline distribution — closing with a citation from Great Britain's The Accountant that "There is no golden rule to success in the battle against inflation." ## Key points - Prices have risen over 22 per cent in a single year; food articles account for more than two-thirds of the increase and industrial raw materials are up by over 30 per cent. - Deficit financing in the first three months of 1973-74 reached Rs. 380 crores — nearly 45 per cent of the whole of 1972-73 — against only Rs. 75 crores estimated in the Central Budget for the entire year. - Successive Bank Rate hikes and the May 1973 credit squeeze are necessary but insufficient; Keynes himself recognised the limits of re-discount rates as anti-inflation weapons in an oligopolistic economy. - Indian prices are determined by ad hoc administrative interventions, neither by a competitive market nor by a well-conceived long-term strategy, producing a price structure with no relationship to underlying economic conditions. - Cost-plus pricing — the dominant Indian method — entrenches inefficient marginal units, removes pressure for cost-cutting, and is described (after the late Professor D. R. Gadgil) as the most costly way of enforcing price control. - Half-controlled price structures produce supply distortions: controlling vanaspati while leaving groundnut oil free shifted output away from the controlled commodity; non-priority products like rubber tyres reap profits from priority-product price ceilings. - Wages form only one-fifth of total commodity cost and roughly six per cent of GNP; the wage-price link in India is weak and erratic, so wage freezes alone cannot arrest inflation. - The remedy lies in maximising production, linking wage rises to productivity, eliminating licence-permit red tape, restraining conspicuous consumption, unearthing black money, and streamlining the procurement and distribution of essential commodities. --- ## [Primary work] Democracy in India URL: https://indianliberals.in/primary-works/democracy-in-india-j-m-lobo-prabhu-may8-1960/ ### Summary J. M. Lobo Prabhu's prize-winning 1959 Forum of Free Enterprise essay argues that Indian democracy is being hollowed out from within by the Constitution that was meant to secure it. Tracing democratic experience in India to barely sixty years of British administration, Lobo Prabhu charges the Constituent Assembly with importing the rhetoric of a Sovereign Democratic Republic while quietly drafting in the substance of the Soviet Socialist Republic — most visibly through the Directive Principles, the steadily expanding catalogue of administrative tribunals exempted from the ordinary law courts, and amendments (especially the First and the Fourth) that progressively dismantle property rights, freedom of expression and the Rule of Law as Dicey understood it. The essay proceeds along four "basic principles" the author finds violated. First, the supremacy of accepted social and economic principles: the Constitution opens with Fundamental Rights and then qualifies them away through Articles 14, 17, 22, 25, 30, 31 and 39, while State trading and nationalisation crowd out the small owner, the dealer and the worker.… ### Body ## Summary J. M. Lobo Prabhu's prize-winning 1959 Forum of Free Enterprise essay argues that Indian democracy is being hollowed out from within by the Constitution that was meant to secure it. Tracing democratic experience in India to barely sixty years of British administration, Lobo Prabhu charges the Constituent Assembly with importing the rhetoric of a Sovereign Democratic Republic while quietly drafting in the substance of the Soviet Socialist Republic — most visibly through the Directive Principles, the steadily expanding catalogue of administrative tribunals exempted from the ordinary law courts, and amendments (especially the First and the Fourth) that progressively dismantle property rights, freedom of expression and the Rule of Law as Dicey understood it. The essay proceeds along four "basic principles" the author finds violated. First, the supremacy of accepted social and economic principles: the Constitution opens with Fundamental Rights and then qualifies them away through Articles 14, 17, 22, 25, 30, 31 and 39, while State trading and nationalisation crowd out the small owner, the dealer and the worker. Second, the Sovereignty of Parliament: Lobo Prabhu finds the legislature reduced to "aiding and advising" a Prime Minister whose powers, lifted verbatim from the American Constitution into a parliamentary setting, are in practice exercised without genuine cabinet check — an unstable hybrid he contrasts with Eire, Burma, Pakistan, Indonesia and Sudan. Third, an unhealthy polarisation of power inside the party system, where mass-fundraising machinery silences the back-bench member and Congress survival reflexes outbid new ideas. Fourth, the polarisation of power inside the ministries, where a politicised, lobbied, and gradually de-professionalised civil service replaces the older ICS habit of fearless advice with appointment-by-favour. Lobo Prabhu also indicts the suppression of public opinion: a press dependent on government advertising, import permits and staff restraints; an absence of independent forums for discussing administration; the cultivation of councils stacked with co-opted loyalists. His remedy is constitutional reconstruction rather than revolution — confine the State to what people cannot do for themselves, guarantee employment through stimulating private enterprise plus public works rather than through nationalisation, devolve productive discipline to the panchayats already named in the Constitution, and rebuild the separation of powers so that ministers, legislators and the permanent services each recover their distinct competences. The booklet closes with the assurance that "within the framework of democracy the needs of the individual and of the country will be satisfied." ## Key points - Frames Indian democracy as imperilled less by hostile actors than by a Constitution drafted under socialist enthusiasm whose Fundamental Rights are systematically undercut by their own provisos. - Reads the proliferation of Administrative Tribunals and exemptions to Article 17 as contraventions of the Rule of Law in Dicey's sense, citing Lord Hewett's New Despotism to characterise the trend. - Treats the First and Fourth Amendments as the decisive blows: the First overrode Article 19 free-speech protections; the Fourth gutted Article 31 property protections, making "property a matter of hide and seek." - Argues State enterprise is economically and politically restrictive — replacing dispersed initiative with official indifference, immobilising capital, and politicising employment in khadi, cooperatives, prohibition and similar Congress schemes. - Identifies a hybrid presidential-parliamentary structure as a constitutional weakness: powers copied from the U.S. Constitution sit awkwardly in a Westminster shell, and proposes amending Article 73 or restoring genuine cabinet stature for ministers. - Diagnoses the polarisation of power inside the party system — finance and organisational reach concentrate ideas in a handful of leaders while back-benchers depend on bosses rather than constituents. - Diagnoses a parallel polarisation inside the executive: politicised promotions, discretionary postings (e.g. a Madras Collector kept beyond statutory limits), and the routine bypassing of Public Service Commissions through temporary appointments. - Indicts the suppression of public opinion by State leverage over the press (advertisements, import permits, staffing) and by the absence of independent forums for discussion of administration. - Proposes a remedial scheme: confine the State to what individuals cannot do, guarantee employment through a self-generating Insurance for Employment funded by private enterprise plus State public-works projects, and devolve productive discipline to the panchayats rather than co-operative farming or State trading. --- ## [Primary work] Deregulation of Savings Banks' Deposit Interest Rates URL: https://indianliberals.in/primary-works/deregulation-of-savings-banks-usha-thorat-august-4-2011/ ### Summary This Forum of Free Enterprise booklet records the panel discussion at the 7th M. R. Pai Memorial Award function held in Mumbai on 7 July 2011, hosted by the All India Bank Depositors' Association (AIBDA) and the Punjab and Maharashtra Cooperative Bank, plus three supporting annexures. Three former Deputy Governors of the Reserve Bank of India — Usha Thorat, Kishori J. Udeshi and S. S. Tarapore — respond to the RBI's April 2011 Discussion Paper on deregulation of the savings bank (SB) deposit interest rate, which had been administered at 4 per cent since May 2011 (3.5 per cent before that). All three agree that deregulation is overdue, that the question is no longer whether but when and how, and that the present moment — with inflation high and the term structure already deregulated since the 1990s — is right. They argue for a phased approach with a regulator-prescribed floor rate, uniform monthly interest application, and clear safeguards for rural, pensioner and small depositors.… ### Body ## Summary This Forum of Free Enterprise booklet records the panel discussion at the 7th M. R. Pai Memorial Award function held in Mumbai on 7 July 2011, hosted by the All India Bank Depositors' Association (AIBDA) and the Punjab and Maharashtra Cooperative Bank, plus three supporting annexures. Three former Deputy Governors of the Reserve Bank of India — Usha Thorat, Kishori J. Udeshi and S. S. Tarapore — respond to the RBI's April 2011 Discussion Paper on deregulation of the savings bank (SB) deposit interest rate, which had been administered at 4 per cent since May 2011 (3.5 per cent before that). All three agree that deregulation is overdue, that the question is no longer whether but when and how, and that the present moment — with inflation high and the term structure already deregulated since the 1990s — is right. They argue for a phased approach with a regulator-prescribed floor rate, uniform monthly interest application, and clear safeguards for rural, pensioner and small depositors. The volume's argumentative centre is that small depositors have been silently taxed by a regulated 4 per cent ceiling against high inflation, and that market-based pricing — supervised but not capped — is the cure. Annexures I and II reproduce AIBDA's initial and revised submissions to the RBI on behalf of depositors; Annexure III, a detailed analytical paper by Prof. Ashish Das of IIT Bombay, marshals data showing persistent negative real returns on SB accounts and dissects how the changeover to daily-balance interest calculation in April 2010, far from helping savers, was offset by RBI's simultaneous cut in the prescribed rate. ## Essays ### Deregulation of Savings Banks' Deposit Interest Rates *By Usha Thorat, Kishori J. Udeshi, S.S. Tarapore* Usha Thorat, then Director of the Centre for Advanced Financial Research & Learning and former RBI Deputy Governor, opens the panel by reframing the question. Whether to deregulate, she says, is no longer in dispute; only the timing and the safeguards matter, and a period of high inflation is the right moment to move because customers can switch banks freely if rates fall too low. She walks through the case for a temporary floor rate — banks compressed deposit rates well below 3.5 per cent in 2009–10 when liquidity was abundant, and the rural or uninformed semi-urban depositor cannot easily move funds — but adds that deregulation 'fully' may work better than experimenting with a floor, since the floor itself risks becoming a ceiling. She rejects the asset-liability-mismatch fear (a 1 per cent rate rise on SB accounts adds only about 25 bps to the cost of deposits), insists that any new charges on cheque-book or transactional facilities must satisfy the Sadasivan committee's reasonableness, fairness, equity and transparency tests, and warns that the periodicity asymmetry — monthly rests on loans versus quarterly rests on deposits — needs regulator review. - Deregulation is no longer a question of 'whether' but of timing and sequencing; high inflation makes 2011 the right window. - A floor rate would prevent banks from pushing SB rates below 3.5 per cent during glut periods, as happened in 2009–10, but risks ossifying into a ceiling. - The asset-liability-mismatch argument is overstated: a 1 per cent rise in SB rates only adds ~25 bps to overall deposit cost, on a ceteris paribus basis. - Service charges on cheque-book and other facilities must follow the Sadasivan committee principles of reasonableness, fairness, equity and transparency. - The asymmetry between monthly interest application on loans and quarterly rests on deposits needs regulatory correction. ### All India Bank Depositors' Association — Mumbai (AIBDA): Deregulation of Savings Bank Deposit Interest Rate — Submission to the RBI (Annexure I) *By All India Bank Depositors' Association (AIBDA)* Kishori J. Udeshi, Chairman of the Banking Codes and Standards Board of India and former RBI Deputy Governor, frames the issue from three angles: encouraging household savings, deepening financial inclusion, and protecting depositors. She notes that the share of saving deposits to aggregate deposits has fallen from 24 per cent in 2005 to 22.1 per cent in 2009 and asks pointedly whether deregulation will help. Drawing on the experience of Indonesia and Malaysia, she argues that deregulation alone produces negative real returns unless paired with central-bank inflation-anchoring; the goal must be a sustained positive real interest rate. She accepts that competitive forces will sometimes push rates down — invoking the parable of a man satisfied with three chapatis a day not minding receiving them as halves on alternate days — and reminds her audience that the SB rate was 6 per cent as recently as 1992. Cross-subsidisation of cheque-book and ATM costs has gone on too long; depositors must accept higher transactional charges as the price of liberalised returns. She closes by reasserting the role of supervision (quoting John Crow at the C. D. Deshmukh Memorial Lecture) and by calling for the Deposit Insurance and Credit Guarantee Corporation to be empowered as a vigilant overseer. - Saving-deposit share has dropped from 24 per cent (2005) to 22.1 per cent (2009); deregulation alone will not reverse this without inflation-anchoring. - Indonesia and Malaysia show that deregulation without monetary discipline produces negative real returns. - Decades of cross-subsidising cheque-book and ATM costs have unfairly burdened term-deposit and borrower customers. - Depositors must shed the old assumption that basic banking should be free; product innovation will arrive only if rates and charges are both free. - The DICGC needs broader powers and a more active role as 'vigilant overseer' of depositors' interests. ### Deregulation of Savings Bank Deposit Rates — A Revised Submission to RBI from AIBDA (Annexure II) *By All India Bank Depositors' Association (AIBDA)* S. S. Tarapore — the third panelist and a long-time campaigner on the subject — narrows the focus to depositors' rights and the mechanics of sequencing. He treats the April 2011 RBI Discussion Paper as a long-overdue admission that the case for deregulation is closed and time for action has come. He proposes that the RBI prescribe a range (4–5 per cent) for the SB rate in the second half of 2011–12, mandate uniform interest rest periods across all banks, and complete the process in rapid phased steps within the same year. He links the short-term anchor to the long-term yield curve by pointing out that the regulated SB rate of 4 per cent sits well below the bank-determined one-year deposit rate of 9 per cent or more, producing the perverse outcome that SB holders cross-subsidise term depositors and borrowers. Against the bank-lobby claim that freeing the SB rate will destroy financial inclusion and No-Frills accounts, he is scathing: deregulation cannot be used to sanctify predatory pricing, and the prevailing assumption that depositors will meekly accept low rates is itself the danger. He closes by invoking L. K. Jha's old dictum that fair banking gives the highest possible rate to depositors and the lowest possible rate to borrowers, and calls on depositors to organise — comparing the RBI's belated acceptance of deregulation to General George S. Patten's 'Lead, follow or get out of the way'. - Tarapore proposes a deregulated SB rate range of 4.0–5.0 per cent in the first half of 2011–12, completed in rapid phased steps that same year. - Uniform interest application frequency must be mandated across banks; no discrimination by depositor size or location. - Holding SB rates at 4 per cent while one-year term rates exceed 9 per cent forces SB holders to subsidise borrowers and term depositors. - The 'financial inclusion will collapse' argument from banks is rejected as predatory rhetoric, not policy. - Depositors are the legitimate owners of banks and must be prepared to organise — Tarapore calls for a 'depositors' revolt' if their rights continue to be ignored. ### Savings Bank Accounts - Interest Rate Deregulation (Annexure III) *By Ashish Das* Annexure I reproduces the All India Bank Depositors' Association (AIBDA) submission to the RBI on the Discussion Paper. The submission situates the SB-rate issue inside two decades of gradual interest-rate deregulation — completed for term deposits by October 1997 — and argues that continued regulation of the SB rate has deprived depositors of market returns and created complacency among banks, who have come to treat the captive 40 per cent (CASA) of low-cost deposits as a 'virtually perpetual basis' funding source. AIBDA insists deregulation is necessary to complete the liberalising arc, to inject healthy competition, and to protect small consumers. It cautions, however, that special groups — senior citizens, pensioners and rural savers who find it difficult to switch banks — need a floor rate as a permanent protective feature, possibly with an extra 50 basis points above the floor. - Term and fixed-deposit rate deregulation was completed by RBI in October 1997; SB rate alone has remained regulated, at 3.5 per cent since 2003 and 4 per cent since May 2011. - Banks have built complacency around the captive 40 per cent CASA share that funds them at administered low cost. - AIBDA recommends immediate deregulation but with an RBI-prescribed floor rate retained as a permanent protection. - Senior citizens, pensioners and rural savers should receive an additional 50 basis points or higher above the floor, given their reduced ability to switch banks. ### Essay 5 Annexure II is AIBDA's revised submission, prepared after consultations with Deputy Governor Subir Gokarn and after taking on board feedback from individual bankers and the Indian Banks' Association. It evaluates five policy options — no floor or ceiling, ceiling only, floor only, fixed floor and ceiling, and different floor and ceiling — and recommends a regulated floor (to protect small depositors) with a ceiling abandoned. AIBDA proposes a concrete formula: the floor rate should be pegged at half the repo rate rounded up to the nearest whole percentage, revised only when the repo rate moves by 200 basis points or more, and applied with monthly interest computation. A historical back-test from 2001 to 2011 shows that this formula would have tracked the regulator-fixed SB rate to within about 25 basis points on average. AIBDA also presses RBI to mandate transparent, reasonable service charges so that what banks gain on the ceiling-free rate side is not silently clawed back through opaque fees. - Five regulatory options are weighed; AIBDA endorses 'floor only', with the ceiling abolished. - Proposed floor formula: half the repo rate, rounded up to the nearest whole percentage, revised only on 200-bp repo moves. - Historical back-test (2001–2011) shows the proposed floor would have tracked the RBI-fixed SB rate to within ~25 basis points. - Interest application frequency should be made monthly as a first step toward simple, transparent net returns. - Service charges must be regulated for reasonableness so that liberalised returns are not clawed back through opaque fees. ### Essay 6 Annexure III is an analytical paper by Ashish Das, Professor of Statistics at IIT Bombay, that puts numbers behind the panel's arguments. He shows that scheduled commercial banks held Rs. 492 million SB accounts (about 74 per cent of all deposit accounts) as of March 2009, that the SB rate has been downward-sticky despite favourable conditions for raises, and that the April 2010 shift to daily-balance interest computation — widely sold as a depositor win — was offset within months when RBI cut the prescribed rate from 4 per cent to 3.5 per cent and produced negligible net gains. He documents real SB returns turning persistently negative from 2003 onward (with the brief 2009 deflation a transient exception) and computes that the spread between declared nominal rates and effective rates of interest (using older calculation methods) was about 80 basis points until April 2010. He critiques RBI's discretionary changes in interest application frequency on cash-reserve balances, RBI advances and public lending — each tilted in favour of banks — and argues that the deregulation of service charges, without standards on transparency, has shifted further surplus to bank profit margins. In the rendered pages his prescriptions cluster around three asks: deregulate the SB rate immediately, mandate monthly interest application as a transparency baseline, and discourage paper-based transactions through differentiated pricing rather than penalty fees. - As of March 2009, scheduled commercial banks held about 492 million SB accounts — roughly 74 per cent of all deposit accounts. - The April 2010 shift to daily-balance interest computation was offset by RBI's near-simultaneous rate cut from 4 per cent to 3.5 per cent, yielding little net gain to depositors. - Effective SB rates were typically about 80 basis points lower than declared rates under the pre-April-2010 method, due to month-minimum-balance computation. - Real SB returns turned and stayed negative from 2003 onward (with brief 2009 exception), pinching small savers who lack bargaining power. - RBI's discretionary changes in interest application frequency on CRR, repo and bank loans have systematically favoured banks over depositors. - Deregulated service charges, without transparency standards, have widened bank net interest margins rather than passing benefits to savers. --- ## [Primary work] Designing and Development of Payment System in India URL: https://indianliberals.in/primary-works/designing-and-development-of-payment-system-in-india-abhaya-prasad-hota/ ### Summary This Forum of Free Enterprise booklet prints the acceptance speech that Abhaya Prasad Hota — former Chief General Manager of the Reserve Bank of India and former MD & CEO of the National Payments Corporation of India (NPCI) — delivered on receiving the Thirteenth M. R. Pai Memorial Award in Mumbai on 21st August 2017. The volume opens with a biographical note on M. R. Pai (1931–2003), the consumer-rights crusader who joined A. D. Shroff at the founding of the Forum of Free Enterprise in 1956 and went on to fight a long series of public-interest battles against telephone departments, banks, Indian Airlines and other monopolies. It is followed by a recorded tribute from Suresh Prabhu, then Union Minister of Commerce and Industry, and an editorial introduction by Sunil S. Bhandare that frames Hota's career as a continuation of Pai's consumer-protection mission, this time through the architecture of payment systems rather than the courts. Hota's own text — beginning on printed page 11 — traces the institutional design of Indian retail payments across roughly three decades.… ### Body ## Summary This Forum of Free Enterprise booklet prints the acceptance speech that Abhaya Prasad Hota — former Chief General Manager of the Reserve Bank of India and former MD & CEO of the National Payments Corporation of India (NPCI) — delivered on receiving the Thirteenth M. R. Pai Memorial Award in Mumbai on 21st August 2017. The volume opens with a biographical note on M. R. Pai (1931–2003), the consumer-rights crusader who joined A. D. Shroff at the founding of the Forum of Free Enterprise in 1956 and went on to fight a long series of public-interest battles against telephone departments, banks, Indian Airlines and other monopolies. It is followed by a recorded tribute from Suresh Prabhu, then Union Minister of Commerce and Industry, and an editorial introduction by Sunil S. Bhandare that frames Hota's career as a continuation of Pai's consumer-protection mission, this time through the architecture of payment systems rather than the courts. Hota's own text — beginning on printed page 11 — traces the institutional design of Indian retail payments across roughly three decades. He outlines five stages: traditional cheque clearing (and its migration through MICR processing to Cheque Truncation, which now clears any cheque in two days); the build-out of real-time inter-bank transfer rails (RTGS, NEFT, IMPS, UPI, BHIM, *99#); the universalisation of card payments through RuPay; the Aadhaar payments platform; and the ECS rebuild after NPCI took it over in 2010. Within the rendered chunk he reaches the start of the Aadhaar section. Throughout, Hota credits regulatory action at the RBI/NPCI level for compressing both time and cost — a Rs.10,000 fee to remit Rs.1 crore in 2004 collapsing to near-zero with widespread RTGS, and India becoming, in 2010, the first country to operate a 24x7 real-time retail payments system through IMPS. The argumentative thread is that pro-consumer outcomes in finance have come less from market competition alone than from centralised infrastructure decisions that 'directly impact the ability of the banks to serve their customers better' — payment standardisation, default RuPay issuance to 225 million Jan Dhan accountholders, BHIM in twelve languages, USSD channels for feature phones. The Forum frames the booklet as a financial-literacy resource for bank depositors, students and researchers, in keeping with its long-standing free-enterprise-with-consumer-voice posture. ## Key points - Booklet reprints Abhaya Prasad Hota's acceptance speech for the 13th M. R. Pai Memorial Award (Mumbai, 21 August 2017), jointly hosted by AIBDA and the Forum of Free Enterprise. - Front matter establishes the M. R. Pai lineage of consumer activism — his association with A. D. Shroff at the Forum's 1956 founding, his role with the All-India Bank Depositors' Association, and tributes from Minister Suresh Prabhu. - Hota frames payment-system design as a 'leveraging' activity: small interventions at RBI or NPCI level magnify into customer-facing improvements across the banking system. - Cheque clearing is presented as the first stage — MICR plus Cheque Truncation cut typical clearing from up to a month (for outstation cheques) to two days regardless of cheque type. - Money transfer is the second stage: RTGS, NEFT, IMPS, UPI, BHIM and *99# replaced inter-bank cheques and demand drafts; in 2004 a Rs.1 crore RTGS remittance could cost up to Rs.10,000, since collapsed by RBI pricing intervention. - India became, in 2010, the first country to operate a 24x7 real-time retail payments system (IMPS); more than thirty countries have since adopted IMPS-like rails, and BHIM/UPI made money transfer 'as easy as sending an email'. - Card-payment universalisation through RuPay extended access from roughly 55 banks to 800+, and RuPay was issued as the default debit card to 225 million Jan Dhan account holders. - Aadhaar Payment platform (the fourth stage, partially rendered) underpins direct benefit transfers, e-KYC, biometric cash-out at business correspondents, and account-credit using Aadhaar as a reference number. --- ## [Primary work] Desperate Proposals URL: https://indianliberals.in/primary-works/desperate-proposals-a-d-shroff-jun1-1957/ ### Summary A. D. Shroff's address to the Commerce Graduates' Association in Bombay on 22 May 1957 is a sharp, line-by-line attack on the Union Budget of 1957–58, which he treats as the financial expression of a Second Five-Year Plan that has lost contact with India's productive capacity. Shroff concedes that some deficit financing under planned development is unavoidable, but argues that taxes to cover the Rs. 33-crore current-account deficit could have been raised without the revolutionary new burdens the Finance Minister proposes. The actual package — fresh excises on tea, cloth, matches, sugar, cement and steel ingots, a sharply lowered minimum income-tax slab, a heavier super-tax and bonus tax, a new wealth tax and an unprecedented expenditure tax — is, in his telling, dictated only by the need to extract as much revenue as possible from a population already living at bare subsistence. The critique moves outward from prices to politics. Shroff documents how government control of cement and steel has produced shortage, illegitimate State Trading Corporation profits and what he calls open profiteering by the State, even as the private sector is denounced for the same conduct.… ### Body ## Summary A. D. Shroff's address to the Commerce Graduates' Association in Bombay on 22 May 1957 is a sharp, line-by-line attack on the Union Budget of 1957–58, which he treats as the financial expression of a Second Five-Year Plan that has lost contact with India's productive capacity. Shroff concedes that some deficit financing under planned development is unavoidable, but argues that taxes to cover the Rs. 33-crore current-account deficit could have been raised without the revolutionary new burdens the Finance Minister proposes. The actual package — fresh excises on tea, cloth, matches, sugar, cement and steel ingots, a sharply lowered minimum income-tax slab, a heavier super-tax and bonus tax, a new wealth tax and an unprecedented expenditure tax — is, in his telling, dictated only by the need to extract as much revenue as possible from a population already living at bare subsistence. The critique moves outward from prices to politics. Shroff documents how government control of cement and steel has produced shortage, illegitimate State Trading Corporation profits and what he calls open profiteering by the State, even as the private sector is denounced for the same conduct. He reads the wealth tax and expenditure tax as administratively impossible without a 'Police Raj', certain to invite evasion, corruption and double taxation of company shareholders. The wider charge is that the Plan has become 'the Government's Plan' rather than a People's Plan, that it is being pushed through at a cost the country cannot bear, and that foreign-exchange reserves have been squandered through indiscriminate import licences, leaving India with a sterling balance of only Rs. 400 crores and dependent on IMF drawings. The speech closes on a procedural demand: an independent committee, on the model of the post-First-World-War Inchcape Committee, to scrutinise the runaway growth of public expenditure that the Finance Minister's speech, in Shroff's view, refuses to examine. Throughout, the polemical frame is that of the title — a 'gamble in planning' whose budget is the 'last throw of a desperate gambler' — and the pamphlet is issued by the Forum of Free Enterprise as part of its campaign for a recognised, secure role for private enterprise in Indian development. ## Key points - Shroff frames the 1957–58 Union Budget as 'a gamble in planning' whose revolutionary new taxes flow from the attempt to force through the Second Five-Year Plan rather than from sound fiscal logic. - He estimates the new tax incidence at about Rs. 93 crores (of which excise duties account for over Rs. 63 crores) and argues these levies fall hardest on consumers already at bare subsistence, citing a village where only 58 of around 900 children attend school because the rest 'had no clothes to put on'. - On controlled commodities like cement and steel, he charges the State Trading Corporation with 'an illegitimate profit of Rs. 12 per ton' and accuses the Government of 'a daylight robbery of Rs. 12/- per ton' — profiteering of the kind for which private business is condemned. - He attacks the new wealth tax and expenditure tax as administratively unworkable, doubly taxing company shareholders and capable of effective enforcement only under what he calls 'a Police Raj'. - Shroff retracts an earlier welcome of the Prime Minister's assurance that the private sector has 'an assured and respected place', concluding that the proposals 'can only have a limited life of its own'. - He warns that wholesale prices have risen 13 per cent in the last year, that food and high prices are spreading despite fair price shops, and that talk of controlling inflation through fresh excises is 'a phantasmagoric hallucination'. - Indiscriminate import licensing in 1956 has, in his account, drawn down India's sterling balance from about Rs. 710 crores to roughly Rs. 300 crores and forced reliance on $127 million already drawn from the IMF out of a $200 million entitlement. - He demands an independent committee, on the model of the post-First-World-War Inchcape Committee, to carry out a 'thorough and all-sided scrutiny of public expense', noting that the Finance Minister's speech contains 'no word' about expenditure restraint. --- ## [Primary work] Devaluation of the Rupee URL: https://indianliberals.in/primary-works/devaluation-of-the-rupee-causes-and-consequnces-n-a-palkhivala-s-m-dr-keesr-doodha-1966/ ### Summary A 1966 Forum of Free Enterprise booklet collecting three responses to the June 1966 devaluation of the rupee. The constitutional lawyer N. A. Palkhivala opens with a talk delivered to the Forum on 27 June 1966 framing devaluation as the legal recognition of an economic fait accompli and listing seven disciplines without which the measure will fail. A pseudonymous columnist 'S. M.' follows with a piece reproduced from the Hindustan Times of 22 June 1966 that defends devaluation against the charge of foreign coercion and ties its success to renewed fiscal restraint and a deferred Fourth Plan. Dr. Kersi D. Doodha, an economist in a commercial bank, closes with a primer on what devaluation actually is, how the IMF's Articles of Agreement frame 'fundamental disequilibrium', and the supply-side conditions under which a change in par value can correct a payments imbalance. ### Body ## Summary A 1966 Forum of Free Enterprise booklet collecting three responses to the June 1966 devaluation of the rupee. The constitutional lawyer N. A. Palkhivala opens with a talk delivered to the Forum on 27 June 1966 framing devaluation as the legal recognition of an economic fait accompli and listing seven disciplines without which the measure will fail. A pseudonymous columnist 'S. M.' follows with a piece reproduced from the Hindustan Times of 22 June 1966 that defends devaluation against the charge of foreign coercion and ties its success to renewed fiscal restraint and a deferred Fourth Plan. Dr. Kersi D. Doodha, an economist in a commercial bank, closes with a primer on what devaluation actually is, how the IMF's Articles of Agreement frame 'fundamental disequilibrium', and the supply-side conditions under which a change in par value can correct a payments imbalance. ## Essays ### Devaluation Brings India to Crossroads *By N. A. PALKHIVALA* Palkhivala welcomes the Government's decision to acknowledge de jure a de facto devaluation but insists that devaluation by itself can only put India at a crossroads: it can lead either to the disciplined recovery seen in France and Yugoslavia, or to the Indonesian descent into soaring prices. He defends India's foreign creditors as the natural beneficiaries of devaluation and warns that to blame the United States and the World Bank for the decision is unintentionally comic. The bulk of the talk lays out seven concrete measures to extract maximum benefit: private-sector price restraint even at the cost of margins; an absolute priority for price stability over Fourth Plan tonnage targets; an attack on stifling controls and the 'pen-and-pencil armies' of bureaucrats; an end to deficit financing and to living beyond the nation's means; a hard accounting from a Rs. 2,000 crore public sector returning only 0.6%; removal of the new 10% surcharge on industry coupled with proper depreciation on revalued fixed assets; and an intensified, stable export-duty regime. - Devaluation is presented as the de jure recognition of a de facto position the law of economics had already imposed; its virtue is less remedial than confessional. - Palkhivala contrasts a French/Yugoslav road of disciplined recovery with an Indonesian road of post-devaluation hyperinflation; devaluation only opens the choice. - He rejects the populist charge that the United States and the World Bank coerced India into devaluation, calling such blame a sign that economic distress has not cost Indians their sense of humour. - Stifling bureaucratic controls are named as the central cause of stagnation, with the Economic and Scientific Research Foundation cited that India's rate of growth is the lowest in Asia barring Indonesia. - Sustaining the gains requires Centre and States to abandon deficit financing (last year's deficit ran to Rs. 435 crores) and to force a real return out of a Rs. 2,000 crore public-sector investment whose 60 Corporations average only 0.6%. - Seven concrete prescriptions are listed, including removal of the 10% industrial surcharge, depreciation on debt-revalued fixed assets, and an end to frequent changes in export duty. ### Devaluation Points Up the Need for Discipline *By S. M.* Writing in the Hindustan Times of 22 June 1966 (reproduced here with permission), the anonymous columnist S. M. defends the devaluation against the political backlash building inside Congress on the eve of the elections. He concedes the discomfort in the Cabinet — including warnings to Mrs. Gandhi and the publicised reservations of Kamaraj — but argues that the IMF was created precisely to regulate par values, and that India's long-running system of selective export incentives championed by Manubhai Shah had already been an undeclared partial devaluation. The piece then pivots to the discipline that devaluation now demands: Centre and States must stop taking a share of the national cake faster than the cake is growing; production-restricting controls must be abandoned; installed capacity should be sweated before new plants are built; and the Fourth Plan must be deferred for at least a year while aid discussions with the World Bank are concluded around a Centre-led plan. The closing political note defends the Government's earlier proposal to separate Central and State elections as a legitimate parliamentary instrument. - The columnist treats foreign 'pressure' from the IMF as advice the borrowing country must judge on its merits, not as imposed coercion. - Selective export incentives identified with Manubhai Shah amounted to an undeclared devaluation; making it official ends the smuggling premium and revives remittances from Indians abroad. - Devaluation is only a short-term corrective; it works only if joined to four neglected disciplines — fiscal restraint, abandonment of production-restricting controls, prior use of installed capacity, and a one-year Plan deferral. - Drafting a detailed Fourth Plan now is dismissed as 'whistling in the dark'; better to negotiate a Central plan with the World Bank and postpone State-level projects. - The piece defends the proposal to separate Central and State elections as constitutionally proper, arguing a parliamentary government has the right to choose when to seek a fresh mandate. ### What Is Devaluation? *By DR. KERSI D. DOODHA* Doodha, writing as an economist in a commercial bank, offers a careful primer on what devaluation actually is and is not. He rejects the popular conflation of devaluation with a fall in the rupee's domestic purchasing power: the measure targets the external par value in order to restore equilibrium between internal prices and those prevailing in foreign markets. The bulk of the essay walks through the IMF's notion of 'fundamental disequilibrium' as set out in Article I of the Articles of Agreement, the Fund's distinction between temporary and fundamental disturbances, the cumulative 10% rule and the 72-hour notice requirement for changes in par value, and Harry G. Johnson's working definition framed around the U.S. dollar. The essay closes with the supply-side conditions under which a devaluation can actually work — demand-elastic exports, available exportable supplies, an elastic domestic supply structure, substitutes for items currently exported away — and warns that devaluation undertaken in inflationary conditions will be neutralised by the expectation of rising prices. - The popular reading that the rupee has lost 36.5% of its purchasing power is rejected; devaluation acts on the external par value, not the internal one. - The IMF's Article I notion of 'fundamental disequilibrium' is unpacked through three signals: persistent payments deficits, repeated reliance on Fund credit, and book-keeping repurchases rather than genuine repayments. - Procedural mechanics are spelled out: cumulative changes up to 10% need only notification to the Fund; larger changes require Fund advice, plus a 72-hour notice rule. - Devaluation works only when four supply-side conditions hold — demand elasticity of exports, sufficient export supplies, an elastic domestic supply structure, and substitutes for goods being exported away. - The essay's central warning is that devaluation undertaken in inflationary conditions is self-defeating, because expectations of rising prices neutralise the corrective effect on relative prices. --- ## [Primary work] Developmental Dimension to Financial Sector URL: https://indianliberals.in/primary-works/development-dimension-to-financial-sector-dr-y-v-reddy-may-5-2010/ ### Summary Delivered on 6 May 2010 at the Sixth M. R. Pai Memorial Award function in Mumbai and published as a Forum of Free Enterprise booklet, Dr. Y. V. Reddy's lecture revisits the role of the financial sector in economic management in the wake of the 2008–09 global financial crisis. Speaking as a former Governor of the Reserve Bank of India (2003–08) and earlier Deputy Governor (1996–2003), Reddy treats the award as recognition of the RBI's work on depositors' interests and uses the occasion to argue that the post-crisis 'rebalancing' of financial regulation under discussion globally must give equal weight to developmental objectives, not only to stability. Reddy traces the long arc from the post-colonial era of financial repression — when banks were nationalised and credit was directed to development priorities — through the worldwide deregulation movement that began around 1980.… ### Body ## Summary Delivered on 6 May 2010 at the Sixth M. R. Pai Memorial Award function in Mumbai and published as a Forum of Free Enterprise booklet, Dr. Y. V. Reddy's lecture revisits the role of the financial sector in economic management in the wake of the 2008–09 global financial crisis. Speaking as a former Governor of the Reserve Bank of India (2003–08) and earlier Deputy Governor (1996–2003), Reddy treats the award as recognition of the RBI's work on depositors' interests and uses the occasion to argue that the post-crisis 'rebalancing' of financial regulation under discussion globally must give equal weight to developmental objectives, not only to stability. Reddy traces the long arc from the post-colonial era of financial repression — when banks were nationalised and credit was directed to development priorities — through the worldwide deregulation movement that began around 1980. He acknowledges that deregulation produced real gains in efficiency, intermediation and the growth of equity, debt and forex markets, but argues that excessive deregulation in many economies enabled large, too-big-to-fail institutions, predatory lending in housing finance, and the systemic risks that crystallised in 2008. He carefully distinguishes between the consequences of soft regulation in advanced financial centres (USA, UK, parts of Europe) and the more cautious paths followed in Asia, India and China, which suffered less. The core argument is that the rebalanced regulatory regime now being designed — through bodies such as the newly constituted Financial Stability Board, counter-cyclical and macro-prudential measures, the Volcker rule on bank activities, and stiffer capital prescriptions for systemically important institutions — risks confining itself to stability alone while ceding developmental finance entirely to market forces. Reddy contends that since the financial system already requires regulation to dampen cyclical fluctuations, there is no principled objection to using public policy to channel finance toward structural transformation, financial inclusion and productive investment, provided extremes of both over-regulation and under-regulation are avoided. Applied to India, the lecture endorses neither a return to the regulatory regime of the 1970s nor an unbounded deregulation. Reddy points to the hollowing of traditional bank lending to agriculture and SMEs, the troubles of urban co-operative banks under softer regulation, and the migration of banks away from depositors toward fee income and capital-market activity. The speech closes on a depositor-centric note: banking is being treated 'as a public utility', and the evolving regulatory framework must remember that 'there are no banks if there are no depositors.' ## Key points - Reddy frames the speech as a delayed personal tribute to M. R. Pai and treats the Sixth M. R. Pai Memorial Award as recognition of the RBI's work on depositors' interests. - Argues that the 2008–09 global financial crisis has forced a worldwide reassessment of the role of the financial sector and of the policy framework within which it operates. - Distinguishes between deregulation as efficiency-enhancing reform and excessive deregulation, which he holds responsible for too-big-to-fail institutions, predatory housing finance, and the migration of banks away from traditional lending. - Welcomes the post-crisis institutional response — counter-cyclical and macro-prudential regulation, oversight of the shadow banking system, and the Financial Stability Board — but warns that rebalancing risks treating only stability while ignoring development. - Maintains that since the financial system already needs regulation to dampen cycles and large asset bubbles, there is no principled reason to oppose using public policy to direct finance toward structural transformation, financial inclusion and productive investment. - Argues that India's gradual liberalisation, cautious capital-account opening and continued role for public-sector banks insulated it from the worst of the crisis and yield lessons relevant to the global rebalancing debate. - Cautions that under softer regulation many newly licensed Indian private banks and urban co-operative banks deteriorated, while traditional lending to agriculture and SMEs was hollowed out. - Closes with a depositor-centric framing of banking as a public utility, insisting that any new regulatory balance must protect retail depositors — 'there are no banks if there are no depositors.' --- ## [Primary work] Discrimination Between the Two Sectors URL: https://indianliberals.in/primary-works/discrimination-between-the-two-sectors-m-a-master-jan10-1966/ ### Summary M. A. Master's pamphlet, issued by the Forum of Free Enterprise on 10 January 1966, is a sustained polemic against the official position that public and private sectors should be folded into a single 'National Sector' for the purposes of planning discourse. Master argues that the realities of finance, taxation, foreign exchange, pricing policy and corporate law all show that the two sectors have been treated on radically unequal terms — with the Public Sector enjoying privileges denied to the Private Sector. He marshals figures from the first three Plans to show that of Rs. 14,060 crores of total outlay on the Public Sector, roughly 46 per cent came from sources (additional taxation and deficit financing) that carry no obligation to declare dividends or repay capital, while the Private Sector must service every rupee it raises through equity or borrowing. The core of the argument is a sector-by-sector inventory of discrimination. Foreign aid and World Bank credits, grants of Rs.… ### Body ## Summary M. A. Master's pamphlet, issued by the Forum of Free Enterprise on 10 January 1966, is a sustained polemic against the official position that public and private sectors should be folded into a single 'National Sector' for the purposes of planning discourse. Master argues that the realities of finance, taxation, foreign exchange, pricing policy and corporate law all show that the two sectors have been treated on radically unequal terms — with the Public Sector enjoying privileges denied to the Private Sector. He marshals figures from the first three Plans to show that of Rs. 14,060 crores of total outlay on the Public Sector, roughly 46 per cent came from sources (additional taxation and deficit financing) that carry no obligation to declare dividends or repay capital, while the Private Sector must service every rupee it raises through equity or borrowing. The core of the argument is a sector-by-sector inventory of discrimination. Foreign aid and World Bank credits, grants of Rs. 480 crores under PL 480, tax concessions on Defence Deposit Certificates and Annuity Deposits, foreign exchange for plant and equipment, 'Committed Expenditure' guarantees in the Plans, and reimbursement of operating losses (as in the case of the Government Shipping Corporation) all flow exclusively or overwhelmingly to public undertakings. Master cites Finance Ministers Morarji R. Desai (1962-63) and T. T. Krishnamachari (1964-65) to show that even the Government now concedes that public-sector units must earn 'adequate' profits and build reserves for future expansion — yet, he notes, the Tariff Commission's recommendation that the Tata Iron & Steel Company and the Indian Iron & Steel Company be allowed a retention price of Rs. 8 per tonne to amortise their loans was rejected, and the same companies were squeezed for Rs. 5 crores in cash under threat of nationalisation. The pamphlet closes with a warning that the State's accumulating share in private undertakings via the Life Insurance Corporation and the Unit Trust (a total holding of about 40 per cent on his estimate) could allow it to 'nationalise industries by the backdoor' through controlling shareholdings — an outcome he frames as contrary to a worldwide trend in which socialist and communist countries are themselves expanding scope for private initiative. The author's plea is for 'equal and fair treatment to both Private and Public Sectors' and for economic realism over dogma. ## Key points - Reframes the official 'one National Sector' formula as a cover for systematic privileging of the Public Sector at the expense of the Private Sector. - Quantifies the asymmetry: of Rs. 14,060 crores total Public Sector outlay across the first three Plans, Rs. 6,523.28 crores (about 46%) came from additional taxation, deficit financing and grants — sources that carry no debt-service obligation. - Catalogues the financing channels closed to the Private Sector: World Bank and foreign-government loans, Ford Foundation and TCA grants, PL 480 funds, 'Committed Expenditure' provisions, and loss reimbursement (e.g. Government Shipping Corporation). - Documents tax discrimination via Defence Deposit Certificates, Annuity Deposits and Unit Trust investment, all of which channel private savings to the Government on concessional terms unavailable to the Private Sector. - Uses speeches of Finance Ministers Morarji R. Desai and T. T. Krishnamachari to show the Government concedes the Public Sector must earn 'adequate returns', yet denies the Private Sector parallel treatment (the Tata Iron & Steel / Indian Iron & Steel retention-price case). - Highlights the Companies Act asymmetry — bonus, balance-sheet and Managing Director appointment obligations bind the Private Sector but not the Public Sector. - Warns that LIC and Unit Trust holdings (about 40% of certain private undertakings) give the Government a 'powerful grip' that could enable de facto nationalisation through the backdoor. - Frames the argument against a wider international trend: nationalisation on ideological grounds is being abandoned even in socialist and communist countries in favour of greater scope for individual initiative. --- ## [Primary work] Dimensions of Public Expenditure Management URL: https://indianliberals.in/primary-works/dimensions-of-public-expenditure-by-dr-k-venkataraman/ ### Summary Dr. K. Venkataraman, a former civil servant and Chairman of the Public Expenditure Round Table (PERT) in Chennai, uses this Forum of Free Enterprise booklet to argue that India's public expenditure has grown into a quietly destabilising force that academic and political debate has neglected. Drawing on numbers through the late 1990s, he documents that Central Government expenditure was doubling roughly every five years through the 1980s and 1990s, that the combined fiscal deficit of the Centre and the States hovered near 10% of GDP, and that as much as 86% of the Centre's internal borrowings were going to service existing debt — a trajectory he labels a possible "debt trap" in which an entire revenue budget could one day be consumed by interest payments alone. Venkataraman frames this not just as a budgetary problem but as a paradigm shift that has happened without articulation: the revenue/capital distinction has eroded, subsidies have become a permanent fixture, public capital formation has stalled, and competitive populism between States — symbolised by free agricultural electricity — keeps Chief Ministers trapped in a "Who will bell the cat?" stand-off.… ### Body ## Summary Dr. K. Venkataraman, a former civil servant and Chairman of the Public Expenditure Round Table (PERT) in Chennai, uses this Forum of Free Enterprise booklet to argue that India's public expenditure has grown into a quietly destabilising force that academic and political debate has neglected. Drawing on numbers through the late 1990s, he documents that Central Government expenditure was doubling roughly every five years through the 1980s and 1990s, that the combined fiscal deficit of the Centre and the States hovered near 10% of GDP, and that as much as 86% of the Centre's internal borrowings were going to service existing debt — a trajectory he labels a possible "debt trap" in which an entire revenue budget could one day be consumed by interest payments alone. Venkataraman frames this not just as a budgetary problem but as a paradigm shift that has happened without articulation: the revenue/capital distinction has eroded, subsidies have become a permanent fixture, public capital formation has stalled, and competitive populism between States — symbolised by free agricultural electricity — keeps Chief Ministers trapped in a "Who will bell the cat?" stand-off. He calls for the Centre and States to negotiate a joint Expenditure Policy Resolution for the next decade, for the Finance Commission and State Finance Commissions to systematically match functions to finances through vertical transfers, and for a White Paper exercise modelled on the UK Government's early-1980s reform. The second half of the booklet turns to procedure and accountability. Venkataraman flags weak parliamentary scrutiny (guillotine voting on demands for grants, neglected Public Accounts Committee reports), the conflation of "spending the allocation" with "effectiveness," and the absence of impact analysis or beneficiary feedback. He floats borrowing Quality Circles and ISO 9000 thinking for public services, asks whether sunset rules and measurable departmental outputs can be imported into Indian budgeting, and proposes a four-pronged "awareness generation" programme — transparent budget documents, informed public debate, civic education of the young, and direct beneficiary feedback to departments — with the media as connective tissue. His closing argument is that the *problematique* of public expenditure is a "creeping malaise" that coalition politics has made political will harder to summon, and that the subject is "too important to be left to governments alone" — a citizens-and-taxpayers project rather than a Finance Ministry one. ## Key points - Central Government expenditure grew by 136% in the first half of the 1980s, 98% in the second half, and 74% in the first half of the 1990s; the combined Centre+State fiscal deficit is around 10% of GDP. - Interest payments now consume over 25% of the Centre's revenue budget and the State Governments' interest burden has risen 50% in three years; the Comptroller and Auditor General has flagged that 86% of internal borrowings go to debt service — a possible debt trap. - The revenue/capital distinction has been hollowed out, public capital formation has slowed, and capital expenditure is taking a back seat to a "predatory revenue deficit." - Competitive subsidisation between States (e.g., free electricity for agricultural consumers) is recognised as unviable even by the States themselves, but no single Chief Minister can step back unilaterally; a joint Centre–State review is proposed. - Venkataraman calls for matching functions and finances through more rigorous vertical transfers, a White Paper on public expenditure (modelled on the UK reform of the early 1980s), measurable departmental outputs, sunset rules, and a multi-year medium-term expenditure forecast. - Democratic accountability has failed to stem the tide: legislatures pass demands for grants by guillotine, Parliamentary Standing Committees lack sustained impact, and Public Accounts Committee reports rarely move the executive. - He proposes a four-part "awareness generation" programme — demystified budget documents, informed public debates, civic education of younger citizens, and direct beneficiary feedback to government departments — with media as an indispensable amplifier. - The booklet positions the Public Expenditure Round Table (PERT), Chennai, as one institutional vehicle for this citizen-side scrutiny and reaffirms the Forum of Free Enterprise's stance that fiscal restraint is a condition for democratic free enterprise. --- ## [Primary work] Draft Sixth Plan URL: https://indianliberals.in/primary-works/draft-sixth-plan-prof-c-n-vakil-july-14-1978/ ### Summary Prof. C. N. Vakil's lecture, delivered under the auspices of the Forum of Free Enterprise on 6 June 1978 and published as a booklet on 14 July 1978, offers an early Janata-era critique of India's Draft Sixth Plan (1978–83). Vakil welcomes the Plan's stated departure from earlier Plans — its emphasis on rural development, small-scale industries, a 'minimum needs programme' covering drinking water, housing, roads, elementary education, rural health and electrification, and the explicit recognition that the fruits of three decades of planning have not reached the rural masses. He uses this opening to retell, with some satisfaction, an old defeat: in 1956 he and P. R. Brahmanand had submitted to the Panel of Economists a 'Wage-Goods Model' that prioritised abundant production of food and essentials of life over heavy industry; the Panel, mesmerised by Russian advisers and by P. C. Mahalanobis's Plan Frame, set the suggestion aside. After thirty years, he writes, 'the defects pointed out in 1956 have been realised.' The body of the lecture is organised in three sections — Aspirations and Limitations, Techniques of Planning, and Plan Model Should Suit Indian Conditions.… ### Body ## Summary Prof. C. N. Vakil's lecture, delivered under the auspices of the Forum of Free Enterprise on 6 June 1978 and published as a booklet on 14 July 1978, offers an early Janata-era critique of India's Draft Sixth Plan (1978–83). Vakil welcomes the Plan's stated departure from earlier Plans — its emphasis on rural development, small-scale industries, a 'minimum needs programme' covering drinking water, housing, roads, elementary education, rural health and electrification, and the explicit recognition that the fruits of three decades of planning have not reached the rural masses. He uses this opening to retell, with some satisfaction, an old defeat: in 1956 he and P. R. Brahmanand had submitted to the Panel of Economists a 'Wage-Goods Model' that prioritised abundant production of food and essentials of life over heavy industry; the Panel, mesmerised by Russian advisers and by P. C. Mahalanobis's Plan Frame, set the suggestion aside. After thirty years, he writes, 'the defects pointed out in 1956 have been realised.' The body of the lecture is organised in three sections — Aspirations and Limitations, Techniques of Planning, and Plan Model Should Suit Indian Conditions. Vakil argues that the Plan's rural-development rhetoric will fail unless the entire technique of planning is recast: the bureaucratic machinery delivers only forty percent of allocated rural funds to the farmer (sixty percent is 'swallowed up by the administration'); Panchayats and co-operative societies have become 'centres of political rivalries and intrigues'; commercial banks have expanded branches without altering the concept of lead bank lending; and the Rolling Plan device merely keeps targets up to date without changing the underlying method. He insists that solutions require a national consensus, the involvement of the public, a powerful Expenditure Commission to cut waste, and an end to deficit financing that the first year's budget (Rs. 1,080 crores) has already breached. In the third section Vakil presses the deeper theoretical point: imported assumptions — that national income growth automatically raises savings, that heavy industry creates employment, that Plans built on coefficients derived from advanced economies fit India — have all been falsified by experience. The Wage-Goods Model, he argues, builds on the realities of Indian agriculture, surplus rural labour, and the structure of internal demand; it would 'convert periods of surplus production into periods of boon' by mobilising unutilised labour into capital formation through appropriate institutional devices and social incentives. The booklet closes with an A. D. Shroff epigraph affirming free enterprise as coeval with man — a deliberate framing by the Forum that situates Vakil's technical critique within its longer classical-liberal lineage. ## Key points - Welcomes the Draft Sixth Plan's stated shift toward rural development and a 'minimum needs programme' (drinking water, housing, roads, elementary education, rural health, rural electrification) as overdue recognition that earlier plans bypassed the rural majority. - Recovers a 1956 dissent: Vakil and P. R. Brahmanand submitted a 'Wage-Goods Model' to the Panel of Economists, prioritising abundant production of food and essentials of life; the Panel, under the sway of Russian advisers and Mahalanobis's Plan Frame, set it aside — and Vakil now claims thirty years of stagnation as vindication. - Catalogues bureaucratic and institutional limits to implementation: sixty percent of rural-development funds are absorbed by administration before reaching the farmer; Panchayats and co-operative societies have become arenas of political rivalry; commercial banks have multiplied branches without changing lending behaviour. - Treats deficit financing of Rs. 2,250 crores in the Plan as 'disastrous' — already exceeded in year one (Rs. 1,080 crores in the 1978-79 Budget) — and calls for a powerful Expenditure Commission on the model of the Inchcape Committee to release resources without additional taxation or deficit financing. - Argues that the 'Rolling Plan' is not a new technique but a way of keeping the Plan up to date in its targets and achievements — the underlying method has not changed. - Rejects the orthodoxy that growth in national income automatically increases savings: in India 'national income has tended to have gone up, savings do not show any appreciable rise' — so plan models built on advanced-economy coefficients misfit Indian realities. - Frames the Wage-Goods Model as a solution: convert excess rural labour into capital formation through institutional devices and social incentives, build mutual dependence between villages and towns, and keep food and other wage-goods abundant and cheap. - The Forum of Free Enterprise's editorial framing — Eugene Black epigraph on private enterprise as 'an affirmative good', closing A. D. Shroff epigraph — places Vakil's technocratic critique within the Forum's classical-liberal lineage. --- ## [Primary work] Economic Democracy URL: https://indianliberals.in/primary-works/economic-democracy-r-a-tariton-feb5-1969/ ### Summary B. A. Tarlton's 18-page lecture, delivered under the auspices of the Forum of Free Enterprise's Calcutta centre in 1968 and published as a booklet in February 1969, opens with a balance-sheet of disillusionment. Fifteen years after independence the politicians' promised "sunlit plateaus of prosperity" remain out of reach, centralised planning has failed to lift average living standards, and India has slid from being a net international creditor of over Rs. 700 crores in 1956 to a net debtor of over Rs. 5,000 crores in 1968. From this prelude Tarlton mounts a sustained case for rethinking what "economic democracy" should mean for India. He distinguishes a "classical" concept of democracy — rule by a particular person, class, or even a majority — from a "liberal" concept in which political authority is vested equally in every citizen, anchored by full adult suffrage, periodic elections, an independent judiciary and a free press.… ### Body ## Summary B. A. Tarlton's 18-page lecture, delivered under the auspices of the Forum of Free Enterprise's Calcutta centre in 1968 and published as a booklet in February 1969, opens with a balance-sheet of disillusionment. Fifteen years after independence the politicians' promised "sunlit plateaus of prosperity" remain out of reach, centralised planning has failed to lift average living standards, and India has slid from being a net international creditor of over Rs. 700 crores in 1956 to a net debtor of over Rs. 5,000 crores in 1968. From this prelude Tarlton mounts a sustained case for rethinking what "economic democracy" should mean for India. He distinguishes a "classical" concept of democracy — rule by a particular person, class, or even a majority — from a "liberal" concept in which political authority is vested equally in every citizen, anchored by full adult suffrage, periodic elections, an independent judiciary and a free press. Lincoln's formulation, "government of the people by the people for the people," is offered as the model, and Nehru's preferred extension of this idea into the economic sphere — socialist planning and public-sector expansion — is rejected as both ideologically incoherent and economically destructive. He marshals data on the runaway growth of government undertakings (from 6% to 43% of paid-up corporate capital between the Second and Third Plans) and on the loss-making Indian Railways and ordnance factories to argue that state ownership has "absorbed huge domestic resources" while consistently underperforming. Tarlton then weighs alternatives. The Yugoslav model of workers' self-management is conceded as a serious attempt at economic democracy but is judged inadequate because it remains imprisoned within socialist organisation and severs the producer from consumer signals. The correct model, he insists, is consumer sovereignty inside a competitive market: producers must "queue up" before the buyer just as candidates queue up before the voter. Drawing on Adam Smith's argument from self-interest, Mahatma Gandhi's distrust of concentrated power, J. F. Kennedy's defence of the dispersed free market, and the visible take-off of Hong Kong, Japan, Taiwan, South Korea, Malaysia and Thailand against the centrally directed economies of India, Burma and Indonesia, he makes both a principled and an empirical case that free enterprise simultaneously disperses power and raises living standards. The closing pages turn polemical. The Indian businessman, Tarlton complains, has been "daubed with so much ideological tar" — exploiter, profiteer, parasite, gambler — that he is tempted to retreat into compromise and "back-door" relief from administrators. Tarlton calls instead for a positive, public defence: the entrepreneur is "the main architect of economic democracy," and the businessman's task is not to plead for protection but to demand the basic freedoms — to decide, invest, produce, hire and be honestly taxed — that allow him to create wealth and employment as a civic contribution to a democratic society. ## Key points - Centralised planning is presented as a measurable failure: India moved from net international creditor of Rs. 700 crores (1956) to net debtor of over Rs. 5,000 crores (1968), with stagnant living standards and rising unemployment. - Tarlton distinguishes a 'classical' democracy (rule by a particular class or majority) from a 'liberal' democracy (political authority vested equally in every citizen), and treats the liberal concept as the only one suited to India. - He attacks the size and inefficiency of the Indian public sector — government share of paid-up corporate capital grew from 6% to 43% across the Second and Third Plans, with sub-1% returns against planned 11–12%. - The Yugoslav self-management experiment is acknowledged as the closest socialist approach to economic democracy but is dismissed because it remains divorced from consumer signals. - Economic democracy, in Tarlton's reframing, is consumer sovereignty inside a competitive market — producers must compete for the consumer's vote just as politicians compete for the citizen's. - He marshals comparative evidence: East Asian free-enterprise economies (Hong Kong, Japan, Taiwan, South Korea, Malaysia, Thailand) have outpaced the centrally directed economies of India, Burma and Indonesia. - The entrepreneur is framed as the 'main architect of economic democracy,' and the booklet closes with a call for businessmen to mount a positive, public defence of free enterprise rather than retreat into back-door lobbying. --- ## [Primary work] Economic Development and Conservation of Natural Resources URL: https://indianliberals.in/primary-works/economic-development-and-conservation-of-natural-resources-zafar-futehally-february-12-1972/ ### Summary Zafar Futehally's lecture, delivered on 23rd July 1971 under the auspices of the Forum of Free Enterprise and published as a Forum booklet in February 1972, argues that India's pursuit of economic development has proceeded without serious accounting for the natural-resource base on which civilisation rests. Distinguishing renewable resources (fresh water, clean air, soil, vegetation, animal life) from non-renewable ones (oil, coal, iron ore, minerals), he confines his attention to the renewable category and warns that even renewables collapse once their progenitor — nature itself — is destroyed. He marshals examples from the Sahara, the Rajasthan deserts, the silted hydrology of the Aswan Dam, the DDT load in the body fat of Delhi residents, and the deforestation-induced floods of South-East Asia to show that the over-exploitation of nature long predates synthetic chemicals and heavy machinery. The central argument is that development plans must be grounded in the natural principles of land use, following the ecologist Edward Graham.… ### Body ## Summary Zafar Futehally's lecture, delivered on 23rd July 1971 under the auspices of the Forum of Free Enterprise and published as a Forum booklet in February 1972, argues that India's pursuit of economic development has proceeded without serious accounting for the natural-resource base on which civilisation rests. Distinguishing renewable resources (fresh water, clean air, soil, vegetation, animal life) from non-renewable ones (oil, coal, iron ore, minerals), he confines his attention to the renewable category and warns that even renewables collapse once their progenitor — nature itself — is destroyed. He marshals examples from the Sahara, the Rajasthan deserts, the silted hydrology of the Aswan Dam, the DDT load in the body fat of Delhi residents, and the deforestation-induced floods of South-East Asia to show that the over-exploitation of nature long predates synthetic chemicals and heavy machinery. The central argument is that development plans must be grounded in the natural principles of land use, following the ecologist Edward Graham. Futehally presses the unfashionable conclusion that India's 229 million cattle and 106 million sheep and goats are themselves a national waste, eroding the productivity of the 13 per cent of Indian land devoted to grazing and pasture; only by reducing those numbers, and by turning arid marginal land over to wildlife harvested on a sustained-yield basis, can the productivity of the land be raised. He cites the Bombay Natural History Society's Gir Sanctuary studies, comparative data from Utah, and the work of Juan Spillett and Lee Talbot to back the claim that wildlife exploits habitat resources more efficiently than domestic cattle. A secondary thread concerns watersheds, forests and wetlands. The 1952 National Forest Policy reserving 33 per cent of land for forest cover has remained a 'paper dream'; illegal felling and the conversion of forest to agriculture have hollowed it out. Drawing on Lee Talbot's Philippines watershed report and the testimony of nineteenth-century famine commissioners — Sir Richard Temple in 1877 and the Indian Famine Commission of 1880 — he treats today's catastrophic floods and droughts as the predictable consequence of a denuded landscape. Wetlands and marshes, he insists, are economic assets in their own right: fish farming outyields reclamation for wheat, marshes regulate the hydrology of surrounding countryside, and they have educational and recreational value comparable to the angling and waterfowl economies of England and the United States. The closing image is the Indonesian island of Krakatoa, which was sterilised by volcanic ash in 1883 and recolonised within fifty years into a mature forest. Futehally ends with a rhetorical question that crystallises the booklet's argumentative frame: 'Would it not be wiser for us to conserve nature rather than conquer it?' ## Key points - Civilisation ultimately depends on natural resources, a proposition that economic and industrial development of the past century has effectively forgotten. - Renewable resources (water, air, soil, vegetation, animal life) are reusable indefinitely only if their progenitor — nature itself — is not destroyed; soil takes about 600 years per inch to form. - Over-exploitation of the environment is not a modern industrial phenomenon: bare hands plus goats, sheep and cattle reduced the Sahara and Rajasthan to deserts. - Pollution is not a problem reserved for the developed West — DDT content in the body fat of Delhi residents is higher than anywhere else in the world, owing to liberal use in godowns and warehouses. - Indian development plans must follow Edward Graham's natural principles of land use; with 46 per cent of land already under cultivation, productivity must come from intensification rather than further extension. - India's 229 million cattle and 106 million sheep and goats are degrading the 13 per cent of land used for grazing; reducing these numbers and turning marginal land over to wildlife (harvested on a sustained-yield basis, as in Utah) would raise productivity. - The 1952 National Forest Policy reserving 33 per cent of land for forest cover has remained a paper dream, and watershed degradation is implicated in the recurring cycle of floods and droughts described by Sir Richard Temple in 1877 and the 1880 Indian Famine Commission. - Wetlands outperform reclaimed land in food yield, regulate the hydrology of surrounding regions, and have educational and recreational value — their drainage is a highly undesirable undertaking. --- ## [Primary work] Economic Growth in a Free Society URL: https://indianliberals.in/primary-works/economic-growth-in-a-free-society-by-ww-rowstow-november-5-1963/ ### Summary W. W. Rostow's address, reprinted from The Hindu of 2–4 September 1963 and circulated by the Forum of Free Enterprise in November 1963, argues that economic development is the central problem of the modern world: the gap between nations with roughly $3,000 per head of gross national product and those with as little as $50 per head. Rostow insists that the operational criterion is regular, equitable growth substantially exceeding population increase, and that no nation has been spared the common sequence of problems — only the resources, technology, and political and social arrangements available to solve them differ. The pamphlet's argumentative centre is a defence of private enterprise as the engine of growth inside a framework that only government can supply. Foreign aid, Rostow says, is helpful only as a margin to self-mobilised national effort; he cites Adam Smith's prescription for eighteenth-century underdeveloped Britain to underline that national programming and government provision of social overhead capital — schools, irrigation, highways, land tenure reform — are preconditions for a vital private sector.… ### Body ## Summary W. W. Rostow's address, reprinted from The Hindu of 2–4 September 1963 and circulated by the Forum of Free Enterprise in November 1963, argues that economic development is the central problem of the modern world: the gap between nations with roughly $3,000 per head of gross national product and those with as little as $50 per head. Rostow insists that the operational criterion is regular, equitable growth substantially exceeding population increase, and that no nation has been spared the common sequence of problems — only the resources, technology, and political and social arrangements available to solve them differ. The pamphlet's argumentative centre is a defence of private enterprise as the engine of growth inside a framework that only government can supply. Foreign aid, Rostow says, is helpful only as a margin to self-mobilised national effort; he cites Adam Smith's prescription for eighteenth-century underdeveloped Britain to underline that national programming and government provision of social overhead capital — schools, irrigation, highways, land tenure reform — are preconditions for a vital private sector. He warns against the false antithesis between national planning and private enterprise, drawing on Japanese and American precedents where the state launched first-generation industry before private business took over. Rostow then attacks the doctrine that totalitarian regimes outpace free societies in growth. Citing 1962 GNP growth figures — 3.6 per cent for Communist nations, 4.8 per cent for NATO, 5.4 per cent for the United States — he holds that the economic gap between the Free World and the Communist bloc is widening, and that the Indian sub-continent's progress, achieved "under God and law," vindicates the principle of consent over police-state methods. He closes with an Alliance for Progress-style call to demonstrate the compatibility of human freedom and economic development, urging confidence in the "great humanistic tradition." ## Key points - Frames the rich-poor divide as the defining problem of the modern world — a gap stretching from $50 to almost $3,000 per head measured in gross national product. - Defines the operational criterion of development as regular, equitable growth at a rate substantially higher than population increase; stagnation, not absolute poverty, is the diagnostic. - Aid from outside a country only helps to the extent that the recipient government and people organise their own resources; aid is a margin, not a substitute, for national mobilisation. - Defends national programming as a prerequisite to a healthy private sector, citing Adam Smith on eighteenth-century Britain and Japan's state-launched industrialisation under the Meiji-era samurai class. - Argues that government must finance social overhead capital — schools, irrigation, highways, land-tenure reform — and create the macroeconomic framework within which agriculture and private enterprise can expand. - Treats agriculture and industry as complementary rather than competing claims on scarce capital, and insists that rural growth and the freedom of the peasant are essential to modernisation. - Rejects the once-credible proposition that Communist societies grow faster than free ones, citing 1962 GNP growth figures of 3.6% for Communist nations, 4.8% for NATO, and 5.4% for the United States. - Concludes with an Alliance for Progress-flavoured affirmation that human freedom and economic development are compatible, and that the great humanistic tradition can be sustained with wit, faith, and persistence. --- ## [Primary work] Economic Growth URL: https://indianliberals.in/primary-works/economic-growth-prof-colin-clark-jan10-1969/ ### Summary This Forum of Free Enterprise booklet collects four short lectures and a personal reminiscence by the Oxford economist Colin Clark, delivered in Bombay during his September 1968 visit to India. Section I argues that India's recently accelerated population growth, far from threatening living standards, has been accompanied by faster growth in real product per head: international comparisons of Latin American and Asian developing countries lead Clark to the counter-Malthusian conclusion that population growth rates up to about 3% per year are compatible with, and may even help create, sustained rises in productivity, partly because they raise the proportion of active savers and spread overhead costs of capital. Section II lays out three principles for designing taxation - administrative practicability, economic efficiency, and social justice - and uses them to argue for a 50% cap on top income tax rates, the abolition of estate duties and discriminatory income taxes on investment, restraint on welfare spending, and the substitution of a Value Added Tax for sales tax.… ### Body ## Summary This Forum of Free Enterprise booklet collects four short lectures and a personal reminiscence by the Oxford economist Colin Clark, delivered in Bombay during his September 1968 visit to India. Section I argues that India's recently accelerated population growth, far from threatening living standards, has been accompanied by faster growth in real product per head: international comparisons of Latin American and Asian developing countries lead Clark to the counter-Malthusian conclusion that population growth rates up to about 3% per year are compatible with, and may even help create, sustained rises in productivity, partly because they raise the proportion of active savers and spread overhead costs of capital. Section II lays out three principles for designing taxation - administrative practicability, economic efficiency, and social justice - and uses them to argue for a 50% cap on top income tax rates, the abolition of estate duties and discriminatory income taxes on investment, restraint on welfare spending, and the substitution of a Value Added Tax for sales tax. Its sharpest recommendation is a heavy land tax pegged to the 'unimproved value' of land, modelled on Australian assessment practice and on Meiji Japan's rural taxation. Section III defines the 'conditions of economic growth.' Clark dismisses the planning orthodoxy that capital investment is the master variable, observes that industry has developed with considerably smaller capital investments than was previously thought necessary, and points instead to Energy, Enterprise and Education - 'three words which begin with the same letter' - as the dominant factors. He endorses the view of Hagen, Streeten and Hirschmann that a policy of 'balanced growth' is mistaken and that unbalanced growth, with windfall profits in unexpected quarters, is what actually mobilises enterprise. Section IV treats agriculture as a precondition for industrialisation: India's labour force remains roughly 70% rural with productivity stagnant since the 1881 census, food distribution is unequal across the rural poor, and imports have crept up to 7% of national product. Clark recommends fertilisers, water management through tube wells and small earth dams, rural all-weather roads, and universal primary schooling, drawing comparisons with Pakistan, Japan and Australia. The pamphlet closes with Clark's recollection of a November 1947 interview with Mahatma Gandhi, arranged through Professor Parekunnel Thomas, at G. D. Birla's New Delhi residence. Gandhi diagnosed the Indian condition not as a failure of investment or industrialisation but as a problem of idleness and speculative money-lending; defended village industry, decentralisation and the spiritual life against the rush to urbanise; condemned contraception and sterilisation; and, citing a statement by the State Governor Mr. Pakwasa, insisted that religion stands on its own platform, independent of nationality. M. R. Pai publishes the booklet for the Forum of Free Enterprise on 10 January 1969 as part of its educational series; sidebar quotes from Eugene Black and the Forum's founder A. D. Shroff frame the volume in the Forum's classical-liberal idiom. ## Key points - Population growth rates up to 3% per year are not incompatible with rising real product per head, and Clark argues they may actively help create growth by raising the share of active savers and spreading capital overheads. - Three principles must guide taxation - administrative practicability, economic efficiency, and social justice - and on these grounds top income tax should not exceed 50%, estate duties and discriminatory taxes on investment income should be abolished, and a Value Added Tax should replace sales tax. - A heavy land tax on the 'unimproved value' of land, modelled on Australian assessment practice and Meiji Japan's 1873 reform, is Clark's central recommendation for forcing productive use of agricultural land. - Government should restrict itself to defence, internal law and order, roads, water supply, public health, and partial support to education - all other activities, including industrial projects, housing, insurance and welfare, should be left to the private sector. - Public expenditure should be decentralised to Municipal or District Government wherever possible, with shared revenues and subsidies avoided so that local electors discipline local spending. - Capital investment is not the dominant factor in growth; the real drivers are Energy, Enterprise and Education, and 'balanced growth' planning is mistaken - unbalanced growth with windfall profits actually mobilises enterprise. - Indian agricultural productivity has barely shifted since the 1881 census and food is distributed unequally within rural communities, so the route to surplus runs through fertilisers, water management, rural roads and universal primary schooling rather than canal-irrigation megaprojects. - The booklet ends with a 1947 interview in which Gandhi diagnoses Indian poverty as a problem of idleness, defends decentralised village industry against urban concentration, condemns contraception, and insists religion is not subservient to nationality. --- ## [Primary work] Economic Development of Backward Areas URL: https://indianliberals.in/primary-works/economic-development-of-backward-areas-d-r-pendse-september-14-1976/ ### Summary D. R. Pendse, then Economic Adviser to the House of Tatas, presents a Forum of Free Enterprise booklet drawn from a longer note he wrote for the Financial Express, Bombay. The pamphlet traces how regional-economics theory has shifted from a laissez-faire view — that unrestricted trade and the rising costs of crowded developed regions would in time equalise living standards across the country — to today's mainstream acceptance of active government policy. The case for intervention, in Pendse's reading, rests on persistent socio-economic and political pressures, the slowness of percolation, technological obsolescence (he cites Britain's coal districts and Kolhapur's diesel-engine industry), and the political reality that democracies cannot wait. The middle section is a comparative survey. In Britain, "development area" Industrial Development Certificates, capital grants, 100% free depreciation, and government-built factories make Whitehall "the largest industrial landlord in the country". Yugoslavia funds a Federal Fund out of 1.55% of GNP and lends, rather than grants, to backward republics.… ### Body ## Summary D. R. Pendse, then Economic Adviser to the House of Tatas, presents a Forum of Free Enterprise booklet drawn from a longer note he wrote for the Financial Express, Bombay. The pamphlet traces how regional-economics theory has shifted from a laissez-faire view — that unrestricted trade and the rising costs of crowded developed regions would in time equalise living standards across the country — to today's mainstream acceptance of active government policy. The case for intervention, in Pendse's reading, rests on persistent socio-economic and political pressures, the slowness of percolation, technological obsolescence (he cites Britain's coal districts and Kolhapur's diesel-engine industry), and the political reality that democracies cannot wait. The middle section is a comparative survey. In Britain, "development area" Industrial Development Certificates, capital grants, 100% free depreciation, and government-built factories make Whitehall "the largest industrial landlord in the country". Yugoslavia funds a Federal Fund out of 1.55% of GNP and lends, rather than grants, to backward republics. Brazil's "decentralised concentration" — pooling resources around growth centres anchored by SUDENE in the North-East, with the Banco do Nordeste matching diverted federal income-tax — lets a highly rated project ride on as little as 12.5% of the investor's own funds. Japan, faced not with backwardness but with congestion, surrounds Tokyo, Osaka and Nagoya with "adjustment" and "developing" belts to relocate industry — a parallel Pendse draws explicitly for Bombay. Turning to India, Pendse reviews how each Plan has recognised regional balance, culminating in the Fourth Plan's allocation of 77% of Central Industrial Project investment to backward States and the National Development Council's 10% earmark of Central assistance for States with below-average per-capita income. He then critiques the 1968 Planning Commission exercise: the Pande Working Group's "very selective" approach (20–30 districts) and the Wanchoo Group's incentive package were, he writes, "considerably diluted at the hands of the NDC", which spread subsidies thinly across backward areas in every State. Pendse warns that mechanical statistical criteria can flag uninhabitable areas — the Sahyadri valleys, the deserts of Rajasthan — where rehabilitation, not infrastructure, is the right response; he endorses delicensing in backward areas, concentrated growth centres on the Brazilian model, and selective fiscal incentives. The booklet closes with the reminder that "the focus is, and must always be on the people, and not on the areas", and that planners must not let "pre-mature enthusiasm get the better of a mature balancing of social costs and social benefits." ## Key points - Pendse traces the shift in regional-economics theory from a laissez-faire confidence that markets would equalise inter-regional living standards to today's broad acceptance that democratic governments cannot ignore the political and social pressure for active policy. - He distinguishes the developed-country problem (acute local unemployment in skilled regions) from the under-developed-country problem, which he describes as one of 'backwardness itself' rather than mere under-industrialisation. - A comparative survey covers Britain's Industrial Development Certificate regime and grant ladder, Yugoslavia's Federal Fund financed by 1.55% of GNP, Brazil's 'decentralised concentration' anchored by SUDENE and the Banco do Nordeste, and Japan's removal-and-relocation belts around Tokyo, Osaka and Nagoya — the last offered as a model for Bombay. - Indian planning has recognised regional balance from the First Plan onwards; the Fourth Plan put 77% of Central Industrial Project outlays into backward States and the National Development Council set aside 10% of Central assistance for States with below-average per-capita income. - In 1968 the Planning Commission constituted two working groups — the Pande Group on criteria and the Wanchoo Group on incentives; both were 'considerably diluted at the hands of the NDC', which extended financial incentives to backward areas in every State rather than concentrating them. - Pendse criticises this dilution and warns that purely statistical criteria can throw up uninhabitable areas (Sahyadri valleys, Rajasthan deserts) where a rehabilitation programme for the inhabitants is more sensible than pouring scarce resources into infrastructure. - Among the corrective measures he favours: delicensing in backward areas, 2–3 selected growth points per State on the Brazilian pattern, attached industrial estates of the Faridabad type, and fiscal incentives such as higher development rebates, transport subsidies, and tax exemptions. - His closing message is that policy must focus on people rather than areas, that success depends on financial resources and 'the perseverance and the will of the people', and that planners must balance social costs against social benefits before yielding to enthusiasm. --- ## [Primary work] E-Commerce and Sales Tax URL: https://indianliberals.in/primary-works/e-commerce-and-sales-tax-n-c-mehta/ ### Summary N. C. Mehta — a chartered accountant and sales-tax specialist writing for the Forum of Free Enterprise — distils, in twelve dense pages, the constitutional and case-law framework that governs how Indian states may tax transactions completed over the internet. The booklet is a faithful piece of practitioner literature: it begins from the Supreme Court's Titaghur Paper Mills doctrine that no state may treat as a taxable 'sale' anything that is not a sale of goods under the Sale of Goods Act, 1930, and then traces how the Forty-sixth Amendment to the Constitution and article 366(29A) extended the states' reach to a list of 'deemed sales' (works contracts, hire-purchase, leases, lottery participation, transfer of right to use goods, and so on). Mehta then surveys the Supreme Court's progressive enlargement of what counts as 'goods' — from electricity (Madhya Pradesh Electricity Board), through lottery tickets (Anraj), to REP licences, exim scrips, patents, trademarks, software packages, DEPB credits, copyrights and know-how.… ### Body ## Summary N. C. Mehta — a chartered accountant and sales-tax specialist writing for the Forum of Free Enterprise — distils, in twelve dense pages, the constitutional and case-law framework that governs how Indian states may tax transactions completed over the internet. The booklet is a faithful piece of practitioner literature: it begins from the Supreme Court's Titaghur Paper Mills doctrine that no state may treat as a taxable 'sale' anything that is not a sale of goods under the Sale of Goods Act, 1930, and then traces how the Forty-sixth Amendment to the Constitution and article 366(29A) extended the states' reach to a list of 'deemed sales' (works contracts, hire-purchase, leases, lottery participation, transfer of right to use goods, and so on). Mehta then surveys the Supreme Court's progressive enlargement of what counts as 'goods' — from electricity (Madhya Pradesh Electricity Board), through lottery tickets (Anraj), to REP licences, exim scrips, patents, trademarks, software packages, DEPB credits, copyrights and know-how. Because most e-commerce traffic involves these incorporeal or intangible items, the booklet's analytical centre of gravity is the question of situs: where, in law, does a sale of an intangible take place? Section 4(2) of the Central Sales Tax Act, 1956 fixes situs for tangible goods, but for intangibles Mehta leans on Salmond on Jurisprudence and an English line of authority (Smelting Co. of Australia, Muller & Co.'s Margarine) to argue that incorporeal property is situated where the right is exercised and enjoyed. The practical pay-off comes in eleven worked illustrations — A in country X delivering Indian stock to B, exports against purchase orders routed through the internet, software downloaded by a Mumbai user from a US-hosted server, machinery imported on lease, internet auctions concluded by bid acceptance. Mehta's headline conclusion is that a Mumbai customer who downloads software installed on a foreign 'Webnet' is making a taxable acquisition of the right to use intangible goods in Maharashtra, and is therefore exigible to that state's sales tax. He closes by reading indivisible works contracts and hire-purchase / installment sales back into the same framework. The pamphlet, originally a 26 April 2000 presentation in Mumbai, is published with the Forum's standard disclaimer and bracketed by the Forum's signature inspirational quotes from A. D. Shroff and Eugene Black. ## Key points - Anchors the analysis in Titaghur Paper Mills (1985): a state may not tax by legislation, rule or notification anything that is not a sale of goods under the Sale of Goods Act, 1930. - Explains how the Forty-sixth Constitutional Amendment and article 366(29A) created a category of 'deemed sales' — works contracts, hire-purchase, leases, transfer of right to use goods, lottery tickets — to plug the gaps the Supreme Court had opened. - Maps the Supreme Court's enlargement of 'goods' to include electricity, lottery participation rights (Anraj), REP and exim licences, DEPB credits, patents, trademarks, copyright, technical know-how and software. - Distinguishes situs of sale for tangible goods (section 4(2) of the Central Sales Tax Act, 1956) from situs for incorporeal property, which Mehta — following Salmond on Jurisprudence — locates where the right is exercised and enjoyed. - Concludes that software downloaded in Mumbai from a server installed in the United States is a transfer of the right to use intangible goods exigible to Maharashtra sales tax. - Works through eleven worked e-commerce illustrations covering cross-border stock delivery, equity-participation imports, lease-and-purchase chains, internet auctions and exports against online orders. - Notes that Parliament has not exercised its article 246(1) power to tax inter-State 'deemed sales', so such transactions remain immune from both state and central sales tax. - Originated as a 26 April 2000 Forum of Free Enterprise presentation in Mumbai and is published by M. R. Pai with the Forum's standard non-attribution disclaimer. --- ## [Primary work] Economic Growth Requires Reform of Tax Structure URL: https://indianliberals.in/primary-works/economic-growth-requires-reform-prof-r-j-taraporevala-feb5-1962/ ### Summary This Forum of Free Enterprise pamphlet — reprinted from Capital Annual 1961 and issued in February 1962 — argues that the tax structure assembled during India's Second Five-Year Plan has actively retarded the savings, investment, and entrepreneurial activity on which the Third Plan's six-per-cent growth target depends. Prof. Russi Jal Taraporevala opens with the principle that tax policy must serve multiple, often conflicting, objectives, and that in an under-developed mixed economy where the private sector still does most of the saving and investing, the dominant purpose of taxation must be to provide conditions which stimulate savings and promote risk-bearing enterprise. Citing National Council of Applied Economic Research figures, he shows that the Government's net savings rose from Rs. 208.9 crores (1951-52) to Rs. 1411.8 crores (1957-58) while Government investment grew from Rs. 221.1 crores to Rs.… ### Body ## Summary This Forum of Free Enterprise pamphlet — reprinted from Capital Annual 1961 and issued in February 1962 — argues that the tax structure assembled during India's Second Five-Year Plan has actively retarded the savings, investment, and entrepreneurial activity on which the Third Plan's six-per-cent growth target depends. Prof. Russi Jal Taraporevala opens with the principle that tax policy must serve multiple, often conflicting, objectives, and that in an under-developed mixed economy where the private sector still does most of the saving and investing, the dominant purpose of taxation must be to provide conditions which stimulate savings and promote risk-bearing enterprise. Citing National Council of Applied Economic Research figures, he shows that the Government's net savings rose from Rs. 208.9 crores (1951-52) to Rs. 1411.8 crores (1957-58) while Government investment grew from Rs. 221.1 crores to Rs. 794.8 crores — a pattern that, on his reading, left the private sector squeezed by rapid-succession Budgets which 'created a state of chronic instability in the tax structure.' Taraporevala then catalogues what he treats as the wreckage of the Second Plan's fiscal experimentation: six different direct taxes on individuals (income, wealth, expenditure, gift, capital-gains, estate); a wealth tax that has yielded only between Rs. 4.50 and Rs. 7.50 crores a year while deterring foreign technical talent; an expenditure tax introduced on Nicholas Kaldor's advice that has produced trivial revenue (Rs. 9 lakhs in its first year, an estimated Rs. 90 lakhs for 1961-62) while generating disproportionate administrative cost; and a corporate-tax regime — the 1959 grossing-of-dividends scheme, the repeated tampering with bonus shares and the capitalisation of reserves, and Section 23A's penalty on small companies — that he says has almost crippled the entrepreneurship and risk-bearing of the business and industrial classes. He uses falling retained-earnings figures (Rs. 41.73 crores in 1955-56 down to Rs. 12.06 crores in 1957-58 for private corporations) to argue that the Second Plan's corporate tax burden has eaten into the internal financing on which industrial expansion in India depends. The reform programme follows directly from the critique. Taraporevala calls for abolishing the expenditure tax outright, reappraising and reducing personal income and wealth tax rates, capping the combined direct-tax bite at 80 per cent of an individual's annual income (with a 5 per cent exemption for those subscribing to new industrial enterprises), simplifying company taxation, abolishing the bonus tax, and amending Section 23A so it does not penalise small companies. He pleads for stability in indirect taxation — changes in excise duties should as a rule be confined to the annual Budget, with mid-year revisions reserved for national emergencies. Finally, in the search for revenue, he urges the Government to confront the politically inconvenient areas it has so far avoided: a salt tax, partial abolition or substantial relaxation of Prohibition, and serious reform of land-revenue taxation, all of which he estimates could yield hundreds of crores during the Third Plan with minimum economic sacrifice. The pamphlet closes with the standard Forum disclaimer and an A. D. Shroff epigraph on free enterprise. ## Key points - Argues that tax policy in an under-developed mixed economy must above all promote private savings and investment, since the private sector still bears the main burden of capital formation and entrepreneurship. - Documents that during the Second Plan, net savings of the Government Sector rose from Rs. 208.9 crores (1951-52) to Rs. 1411.8 crores (1957-58) while net investment in the Public Sector through Government grew from Rs. 221.1 crores to Rs. 794.8 crores — a pattern Taraporevala says crowded out private capital formation. - Counts six different direct taxes on individuals (income, wealth, expenditure, gift, capital-gains, estate duty) imposed during the Second Plan and treats their cumulative weight as a factor retarding India's economic development. - Singles out the expenditure tax — introduced on Nicholas Kaldor's advice by then Finance Minister T. T. Krishnamachari — as a clear failure: trivial revenue (Rs. 1 crore actual against Rs. 9 crores originally estimated for its first year), and disproportionately costly to administer. - Argues that the 1959 grossing-of-dividends scheme, Section 23A of the old Indian Income Tax Act, and the cumulative bonus-share and capital-reserves taxes have suppressed retained corporate earnings — the dominant funding source for industrial expansion in India. - Proposes that the combined direct-tax burden on an individual not exceed 80 per cent of annual income, with a 5 per cent exemption for those acquiring shares in declared new industrial enterprises. - Calls for abolishing the expenditure tax and the bonus tax, simplifying corporate taxation, and amending Section 23A so it does not retard the growth of small and medium companies. - Urges politically difficult revenue reforms — a salt tax, partial abolition or substantial relaxation of Prohibition, and overdue reform of land-revenue taxation — projected to yield hundreds of crores with minimal economic harm. --- ## [Primary work] Economic Growth with Social Justice URL: https://indianliberals.in/primary-works/economic-growth-with-social-justice-dr-b-r-shenoy-august-1977/ ### Summary Economic Growth with Social Justice is a short policy pamphlet by B. R. Shenoy, written in August 1977 a few months before his death and issued by the Forum of Free Enterprise in Bombay. Shenoy sets out a compact theoretical case for consumer sovereignty: a free society is defined by citizens who function in the economic sphere under the doctrine of pragmatism, in which sovereign consumers — not a planning commission — direct production through a price-regulated market mechanism that includes trade, capital markets, and forward markets. He pairs this with the requirement of private property in the means of production (citing Ludwig von Mises and using the Soviet collective-farm experience as evidence that ownership matters), the four economic freedoms of the individual (use of income, choice of consumption, choice of savings, choice of occupation), and four resulting desiderata — cost-and-quality competition, employment expansion, the elimination of monopoly-bred social injustice, and a narrowing of income contrasts as the wage share of GDP rises. The second half of the pamphlet is a diagnosis of three decades of Indian socialism.… ### Body ## Summary Economic Growth with Social Justice is a short policy pamphlet by B. R. Shenoy, written in August 1977 a few months before his death and issued by the Forum of Free Enterprise in Bombay. Shenoy sets out a compact theoretical case for consumer sovereignty: a free society is defined by citizens who function in the economic sphere under the doctrine of pragmatism, in which sovereign consumers — not a planning commission — direct production through a price-regulated market mechanism that includes trade, capital markets, and forward markets. He pairs this with the requirement of private property in the means of production (citing Ludwig von Mises and using the Soviet collective-farm experience as evidence that ownership matters), the four economic freedoms of the individual (use of income, choice of consumption, choice of savings, choice of occupation), and four resulting desiderata — cost-and-quality competition, employment expansion, the elimination of monopoly-bred social injustice, and a narrowing of income contrasts as the wage share of GDP rises. The second half of the pamphlet is a diagnosis of three decades of Indian socialism. Shenoy argues that the working of exchange control, import-export restrictions, the 1956 Industrial Policy Resolution, the Planning Commission, nationalisation, state trading, the Reserve Bank's credit controls and the licence-permit machinery has produced four sectors: a priority-fed public sector, a policy-favoured industrial sector, a harassed and neglected agricultural sector, and a corrupt sector that lives off the other three. He marshals figures — public-sector firms absorbing roughly 55% of investment but yielding only 17% of NNP in 1975-76; per-capita agricultural income falling from Rs. 219.20 in 1960-61 to Rs. 155.90 in 1976-77; the population below the poverty line moving from 39% to 45% — to argue that agriculture, on which 72% of the population lives, is being starved of capital while industry and the urban elite are pampered. The remedy Shenoy prescribes is a nine-point "right-about turn" toward what he calls the Gandhian concept of the state's role: divert resources into agriculture, remove internal and external trade barriers, revise the 1956 industrial policy, abolish licensing and subsidies, scale down public-sector outlays (even withdrawing existing investments), confine the state to its natural duties, remove exchange control and adopt a fully floating Rupee, cut taxation and balance the budget at a much lower level, and review all economic legislation for abandonment or restructuring. He cites West Germany under Ludwig Erhard, Spain, Japan and the "mini-Japans" of Asia as success cases, and India, Burma, Sri Lanka, Pakistan and Bangladesh as classic socialist failures. The pamphlet closes on the aphorism that consumer sovereignty and voter sovereignty are two aspects of the same free citizen. ## Key points - Defines a free society as a "pragmatic society" of consumer sovereignty operating through a price-regulated market mechanism that includes trade, capital markets and forward markets. - Treats private property in the means of production as foundational, citing von Mises and arguing the Soviet 3% of land under private plots produced 1/3 of USSR's gross farm output and 1/2 of its livestock. - Lists four economic freedoms of the individual: distribution of income between consumption and saving, choice of consumption, choice of savings allocation, and choice of occupation. - Identifies four sectors produced by Indian socialism — a pampered public sector, a policy-favoured industrial sector, a harassed agricultural sector, and a corrupt sector fed by licensing, exchange control and subsidies. - Quantifies failure: public sector absorbs ~55% of investment but contributes 17% of NNP (1975-76); per-capita agricultural income falls Rs. 219.20 (1960-61) to Rs. 155.90 (1976-77); population below the poverty line moves from 39% to 45%. - Contrasts the wage-and-salary share of GDP: Japan 41.3%→50.8% (1960-1974), West Germany 46.9→54.7, vs Socialist India fluctuating around 28-30%. - Proposes a nine-point U-turn including abolition of industrial licensing and subsidies, scaling down of public-sector outlays, a fully floating Rupee, lower taxation with a balanced budget, and a review of all economic legislation for repeal or restructuring. - Frames consumer sovereignty and voter sovereignty as two faces of the same free citizen, and praises West Germany under Erhard, Spain, Japan and Asia's "mini-Japans" as exemplars. --- ## [Primary work] Economic Infirmities Will Continue Under the Union Budget 1996-97 URL: https://indianliberals.in/primary-works/economic-infirmities-will-continue-under-the-union-budget-1996-97by-hp-ranina/ ### Summary This is a Forum of Free Enterprise booklet based on a Mumbai public lecture by chartered accountant and tax authority H. P. Ranina, dissecting Finance Minister P. Chidambaram's maiden Union Budget for 1996-97 under the United Front Government. Ranina concedes that the Budget tries to placate the parties supporting the Government by working within the Common Minimum Programme — bumping rural development outlays by more than Rs. 1,000 crore and social services by almost Rs. 1,700 crore — but argues that across all three of its stated objectives (fiscal stabilisation, poverty alleviation, infrastructure) the Budget falls short. He warns that the budgeted deficit of Rs. 6,578 crore (nearly 5% of GDP) probably understates reality, since the customs duty projection of Rs. 44,435 crore assumes an implausible 50% collection jump, and that scheme proliferation will simply fatten the bureaucracy without reaching the intended beneficiaries. The heart of the booklet is a tax-and-capital-markets critique.… ### Body ## Summary This is a Forum of Free Enterprise booklet based on a Mumbai public lecture by chartered accountant and tax authority H. P. Ranina, dissecting Finance Minister P. Chidambaram's maiden Union Budget for 1996-97 under the United Front Government. Ranina concedes that the Budget tries to placate the parties supporting the Government by working within the Common Minimum Programme — bumping rural development outlays by more than Rs. 1,000 crore and social services by almost Rs. 1,700 crore — but argues that across all three of its stated objectives (fiscal stabilisation, poverty alleviation, infrastructure) the Budget falls short. He warns that the budgeted deficit of Rs. 6,578 crore (nearly 5% of GDP) probably understates reality, since the customs duty projection of Rs. 44,435 crore assumes an implausible 50% collection jump, and that scheme proliferation will simply fatten the bureaucracy without reaching the intended beneficiaries. The heart of the booklet is a tax-and-capital-markets critique. Ranina condemns the proposed Minimum Alternative Tax under section 115-JA as 'totally regressive' and 'morally unjustifiable', because zero-tax status exists by the Government's own design (differential depreciation rules under the Companies Act 1956 and Income-tax Rules 1962) and the levy will punish exporters, R&D performers, and units in backward areas. He documents a liquidity crunch driven by Government borrowing crowding out industry, with interest rates 'preposterously high' at 20%, and savings rates fallen from 24% to about 19%. He treats the failure to abolish the tax on dividends — at a revenue cost of only about Rs. 75 crore — as a missed opportunity to revive investor confidence, and is sharply sceptical of new sections 54-EA and 54-EB, which he reads as a device to divert savings into Government-controlled instruments such as bonds of the new Infrastructure Development Finance Company. On infrastructure, Ranina calls the IDFC's Rs. 5,000 crore authorised capital and the Rs. 200 crore National Highway Authority allocation a 'scratch on the surface' against a fifteen-year requirement he estimates at roughly Rs. 250,000 crore. He flags the absence of any serious provision for land acquisition (35–40% of expressway costs), the dependence of the promised US$10 billion in foreign direct investment on credible infrastructure execution, and unfunded burdens in public health and irrigation. His indirect-tax pass shows winners (textiles, automobiles, electronics, pharmaceuticals, detergents) and losers (steel, cement), and his conclusion is that, apart from the long-overdue permission to issue non-voting shares, the Budget contains 'nothing exciting' and leaves the Finance Minister with an unfinished agenda to be tested in February 1997. ## Key points - Ranina credits Chidambaram for working within the United Front's Common Minimum Programme and stepping up rural development (+Rs. 1,000 crore) and social services (+Rs. 1,700 crore, mostly education), but treats the political accommodation as the Budget's defining limit. - He doubts the credibility of the Rs. 6,578 crore (≈5% of GDP) deficit target, noting that Manmohan Singh's Rs. 5,000 crore deficit projection for 1995-96 overshot by 50% to Rs. 7,600 crore, and that the new customs duty estimate of Rs. 44,435 crore assumes an implausible 50% collection jump. - The proposed section 115-JA Minimum Alternative Tax is condemned as 'totally regressive', discriminatory against companies (sparing sole proprietors and partnerships) and as punishing units that align with national priorities — export promotion, R&D, backward-area industry. - Industry faces a structural liquidity crunch because Government borrowing absorbs new money supply, keeping interest rates at a 'preposterously high' 20%, while the household savings rate has slipped from 24% to about 19% with no offsetting incentives. - Ranina urges abolition of the tax on dividends (revenue loss only ≈Rs. 75 crore, since UTI, mutual funds and FIIs via the Mauritius route already pay little) as a low-cost lever to revive investor confidence and the capital market. - Sections 54-EA and 54-EB are read as a mechanism to divert capital-market proceeds into Government-controlled bonds — notably IDFC paper — rather than into listed equity, monopolising savings for socially-oriented sectors. - Infrastructure outlays (IDFC's Rs. 5,000 crore authorised capital, Rs. 200 crore for the National Highway Authority) are dismissed as scratching the surface of an estimated Rs. 250,000 crore fifteen-year requirement, with no allocation for the 35–40% of expressway cost that goes to land acquisition. - Sectoral winners from indirect-tax changes are textiles, automobiles, electronics, pharmaceuticals, and detergents; steel and cement are hurt by higher raw-material and freight costs; non-voting shares are the lone genuinely pro-industry reform. --- ## [Primary work] ECONOMIC POLICY FOR INDIA IN 1980s URL: https://indianliberals.in/primary-works/economic-policy-for-india-in-1980s-by-bk-nehru/ ### Summary Delivered as a lecture at the Leslie Sawhny Programme in New Delhi on 17 March 1983 and published as a booklet by the Forum of Free Enterprise, this essay by B. K. Nehru — former civil servant, distinguished economist, and then Governor of Jammu and Kashmir — offers a candid retrospective on India's first thirty-five years of economic policy and a forward-looking case for liberalising the economy in the 1980s. Nehru redefines the conventional label 'mixed economy' for India, arguing that what India actually runs is a command economy with a small residual market — production, distribution, pricing, and technology choices are all directed by government regardless of ownership. He traces the genesis of this system to the wartime controls inherited at Independence, the post-Depression fashion for socialism that captured Indian students in 1930s Britain (himself included), Jawaharlal Nehru's powerful Fabian leanings and admiration for the Soviet Union, and the objective shortages of capital, foreign exchange, industry and entrepreneurial talent that made directive policy seem necessary.… ### Body ## Summary Delivered as a lecture at the Leslie Sawhny Programme in New Delhi on 17 March 1983 and published as a booklet by the Forum of Free Enterprise, this essay by B. K. Nehru — former civil servant, distinguished economist, and then Governor of Jammu and Kashmir — offers a candid retrospective on India's first thirty-five years of economic policy and a forward-looking case for liberalising the economy in the 1980s. Nehru redefines the conventional label 'mixed economy' for India, arguing that what India actually runs is a command economy with a small residual market — production, distribution, pricing, and technology choices are all directed by government regardless of ownership. He traces the genesis of this system to the wartime controls inherited at Independence, the post-Depression fashion for socialism that captured Indian students in 1930s Britain (himself included), Jawaharlal Nehru's powerful Fabian leanings and admiration for the Soviet Union, and the objective shortages of capital, foreign exchange, industry and entrepreneurial talent that made directive policy seem necessary. He grants real achievements — the build-out of physical infrastructure, the development of basic industries, the breakthrough in agriculture, and the creation of a large cadre of managers, scientists, engineers and entrepreneurs that India now exports. But he is unsparing about the failures: a miserly 3.5% average growth rate, demographic growth of 2.15% leaving per-capita gains at 1.35%, 48% of the population below the subsistence-level poverty line, 5.6% compounded inflation over 35 years, a bloated and unproductive public sector, and the cancer of corruption that has, in his view, virtually collapsed the administration. From this diagnosis Nehru argues that the objective conditions which once justified controls have changed: India now saves over 20% of GNP, has built creditworthiness in international markets, and possesses a surplus of trained manpower. He prescribes a five-part programme — move decisively from a command economy to a regulated market economy; reform the loss-making public sector and shed accretions kept alive only to provide jobs for MLAs; rebuild the administration; restructure the borrowed British-style trade union framework; and index money to deal with permanent inflation that is distorting depreciation, taxation, and wage differentials. He closes by naming the three vested interests — politicians, bureaucrats and established industrialists — that profit from the present system at the expense of the common man and therefore block reform. ## Key points - Nehru argues India does not have a true 'mixed economy' but a command economy with a small market residue — government dictates what is produced, by whom, with what technology, for whom, and at what price, regardless of ownership. - He traces the system's origins to wartime controls, the 1930s fashion for socialism in British universities, Jawaharlal Nehru's Fabian and pro-Soviet leanings, and objective shortages of capital, foreign exchange, industry and entrepreneurs at Independence. - Successes credited to the system include the build-out of infrastructure (roads, railways, power, steel, cement, fertilisers), basic-goods industries, agricultural development, and a deep stock of managers, technicians and entrepreneurs. - Failures itemised: 3.5% average growth on a tiny base, population growth of 2.15% leaving per-capita gains of only 1.35%, 48% of Indians below the poverty line, 5.6% compounded inflation over 35 years, a wasteful public sector, and endemic corruption. - The 'objective conditions' have inverted — India now saves over 20% of GNP, has international creditworthiness, and a surplus of trained manpower — so the rationale for controls is gone. - Reform programme: shift from a command economy to a regulated market economy, fix the public sector and shed jobs-for-MLAs accretions, revamp administration, restructure UK-borrowed trade unions, and index money against permanent inflation. - Three resistances stand in the way of change: ideological loyalty to a 1947 vintage of socialism that the rest of the world has abandoned; and the vested interests of politicians, bureaucrats and established industrialists who benefit from the status quo — the present system 'harms only the common man.' --- ## [Primary work] Economic Progress Demands Attention to Private Enterprise and Scientific Management URL: https://indianliberals.in/primary-works/economic-progress-demands-attention-to-private-enterprise-and-scientific-management-by-dr--kk-das-may-8-1961/ ### Summary This Forum of Free Enterprise leaflet reprints an excerpt from Dr. K. K. Das's presidential address to the Fourteenth All-India Commerce Conference at Jabalpur (May 1961). Das, Professor of Commerce at Andhra University, argues that a doctrinaire pursuit of the "socialist pattern of society" has fragmented India's economic effort: the Industrial Policy Statement of 1948 was tolerable, but the 1956 revision and its schedule of activities reserved for state initiative have produced an unpredictable, shifting boundary between public and private enterprise — "somewhat after the manner of the Indo-Chinese border" — that betrays a concealed presumption against private enterprise and a refusal to release private initiative for the economic task before the country. Das marshals data to show that private enterprise has more than carried its weight while the public sector has lagged: targets in the Second Five-Year Plan were not only met but exceeded by private industry, which also made up for the shortfall in public-sector investment, while the Central Government and state companies (37 and 40 in number respectively) operate at an average pre-tax return of only 2.77% against the 7% tax-f… ### Body ## Summary This Forum of Free Enterprise leaflet reprints an excerpt from Dr. K. K. Das's presidential address to the Fourteenth All-India Commerce Conference at Jabalpur (May 1961). Das, Professor of Commerce at Andhra University, argues that a doctrinaire pursuit of the "socialist pattern of society" has fragmented India's economic effort: the Industrial Policy Statement of 1948 was tolerable, but the 1956 revision and its schedule of activities reserved for state initiative have produced an unpredictable, shifting boundary between public and private enterprise — "somewhat after the manner of the Indo-Chinese border" — that betrays a concealed presumption against private enterprise and a refusal to release private initiative for the economic task before the country. Das marshals data to show that private enterprise has more than carried its weight while the public sector has lagged: targets in the Second Five-Year Plan were not only met but exceeded by private industry, which also made up for the shortfall in public-sector investment, while the Central Government and state companies (37 and 40 in number respectively) operate at an average pre-tax return of only 2.77% against the 7% tax-free earnings usually expected of private enterprise. He quotes Gandhi on the danger of expanding state power, and notes that, having failed with coal, the government is now turning back to private enterprise to make up the deficit. What Das recommends is a re-orientation of governmental attitude rather than a wholesale retreat. The state should help and aid private enterprise; it should act as a ready entrepreneur only where private capital genuinely cannot or will not step in; public and private undertakings should compete on equal terms and be measured by comparable performance; and the policy of "witch-hunting" pronouncements and threats against private enterprise must end. He invokes Adolf Berle on the managerial revolution and Chester Bernard on the firm as a human organisation to argue that ownership-versus-management is now a sharper question than ownership-versus-ownership. The closing pages press the case that India's binding constraint is no longer capital but managerial manpower. Das points to the dearth of trained managers — including in the public sector, which has had to draw on the Industrial Management Pool and government departments — and calls for a comprehensive, purposive, properly manned programme of management education that integrates commerce and management training. He closes with a 1956 quotation from Prime Minister Nehru on industrial development making larger demands on the country's technical and managerial personnel, underlining the last two words. ## Key points - Das frames the 1948 Industrial Policy Statement as workable but the 1956 socialist-pattern revision and its schedule of reserved activities as a doctrinaire intrusion that has fragmented national economic effort. - He likens the unpredictable, shifting public–private boundary to the Indo-Chinese border, arguing that governmental freedom has been exercised against private enterprise rather than for the economic task before the country. - Citing investment figures (Rs. 1,638 crores in the First Plan, Rs. 3,650 crores in the Second, Rs. 6,200 crores estimated for the Third) and noting that 37 Central and 40 state companies are now in operation, he documents a stupendous growth of public-sector entrepreneurial activity since Independence. - He shows that private enterprise has more than met its Second Plan targets — even making up for shortfalls in the Public Sector — while the average pre-tax profit of public enterprises is only 2.77% against the 7% tax-free earnings normally expected of private enterprise. - He quotes Gandhi on the danger of state power destroying individuality, and notes that having failed with coal the government is now turning back to private enterprise to make up the deficit. - Das proposes a four-part re-orientation: the state should aid private enterprise; act as a ready entrepreneur only where private capital cannot; compete on equal terms with comparable performance estimates; and end "witch-hunting" pronouncements against business. - He invokes Adolf Berle on the managerial revolution and Chester Bernard on the firm as a human organisation, arguing that ownership-versus-management has displaced ownership-versus-ownership as the central question of modern industrialism. - He closes by identifying managerial manpower as the binding constraint on industrialisation and calling for a comprehensive, integrated programme of commerce and management education, anchored by a 1956 Nehru quote on the country's need for technical and managerial personnel. --- ## [Primary work] Economic Reforms and the Relevance of Prof. B. R. Shenoy URL: https://indianliberals.in/primary-works/economic-reforms-and-the-relevance-of-b-r-shenoy-mrs-kishori-j-udeshi-june-8-2007/ ### Summary Delivered on 4 June 2007 as the Prof. B. R. Shenoy Birth Centenary Memorial Lecture under the joint auspices of the Economics Research Centre, Mumbai, the Indian Liberal Group and the Forum of Free Enterprise, Kishori Udeshi's address reads as both a tribute and a vindication. Speaking as a former Deputy Governor of the Reserve Bank of India, she juxtaposes Shenoy's heterodox prescriptions of the 1950s–1970s against the post-1991 reform agenda and argues that almost every major liberalisation step—reining in deficit financing, channeling resources into agriculture, dismantling industrial licensing, scaling back the public sector, adopting a fully floating rupee, and rebalancing taxation and expenditure—was anticipated in Shenoy's writings. She treats him as 'the real founding father of the reforms of the past 15 years.' The lecture moves through a sequence of policy domains.… ### Body ## Summary Delivered on 4 June 2007 as the Prof. B. R. Shenoy Birth Centenary Memorial Lecture under the joint auspices of the Economics Research Centre, Mumbai, the Indian Liberal Group and the Forum of Free Enterprise, Kishori Udeshi's address reads as both a tribute and a vindication. Speaking as a former Deputy Governor of the Reserve Bank of India, she juxtaposes Shenoy's heterodox prescriptions of the 1950s–1970s against the post-1991 reform agenda and argues that almost every major liberalisation step—reining in deficit financing, channeling resources into agriculture, dismantling industrial licensing, scaling back the public sector, adopting a fully floating rupee, and rebalancing taxation and expenditure—was anticipated in Shenoy's writings. She treats him as 'the real founding father of the reforms of the past 15 years.' The lecture moves through a sequence of policy domains. On deficit financing and the foreign-exchange crisis she anchors the discussion in Shenoy's Note of Dissent on the Second Five Year Plan, quoting at length his warning that forcing growth beyond available real resources guarantees uncontrolled inflation; she traces the 1957–58 and 1991 crises and the eventual passage of the Fiscal Responsibility and Budget Management Act, 2004, as belated acknowledgements. On monetary policy she imagines a 'monetary hawk' Shenoy as an inflation targeter for the post-1991 era of capital inflows. On industrial policy and the external sector she revisits his attack on indiscriminate import substitution and his early call for devaluation and a floating exchange rate. Udeshi devotes substantial attention to two issues where she finds Shenoy still ahead of policy: the gold trade—where his 1963 and 1992 proposals for a Gold Exchange Bank remain only partially implemented—and agriculture, where his critique of price support, procurement and the misallocation of plan outlay is offered as a diagnosis of present-day farmer distress, with allusions to recent farmer suicides and to the Mexican Chiapas crisis. She closes by likening Shenoy to Hayek—both 'hounded out of the corridors where economic counsel was sought,' but only Hayek belatedly honoured—and quotes Milton Friedman's tribute. The booklet, edited by S. S. Bhandare, also reproduces an editor's note framing Shenoy as a 'great thinker and visionary' who stood almost alone against Nehruvian planning. ## Key points - Frames B. R. Shenoy as 'the real founding father' of India's post-1991 liberalisation, treating his 1950s–1970s heterodoxy as prophecy now vindicated. - Reconstructs Shenoy's Note of Dissent on the Second Five Year Plan as the locus classicus on deficit financing, linking it to the 1957–58 and 1991 foreign-exchange crises and the FRBM Act, 2004. - Argues that in a liberalised, capital-inflow-heavy environment Shenoy would have been an 'inflation targeter' and monetary hawk, advocating sterilisation and aggressive intervention. - Reviews Shenoy's seven-point reform agenda—ending inflation, agricultural investment, dismantling licensing, public-sector scale-down, a floating rupee, lower taxation—as a template the 1991 reforms substantially fulfilled. - Singles out gold policy as unfinished business, recalling Shenoy's 1963 and 1992 proposals for a Gold Exchange Bank and noting that the 1997 liberalisation of gold imports still falls short. - Highlights agriculture as the domain where Shenoy's warnings about price support, procurement and misallocated plan outlay best diagnose current distress, with reference to farmer suicides and the Mexican Chiapas precedent. - Likens Shenoy to Friedrich Hayek—both ostracised from official economic counsel—and laments that Shenoy, unlike Hayek, never lived to see his ideas adopted nor received comparable recognition. - Marshals testimony from Rakesh Mohan, Parth Shah and Milton Friedman to underline how little official acknowledgement Shenoy still receives even in the post-reform consensus. --- ## [Primary work] Economic Prophecies URL: https://indianliberals.in/primary-works/economic-prophecies/ ### Summary Economic Prophecies (Centre for Civil Society, 2004) is the first of a two-volume collected-works edition of B. R. Shenoy's writings, spanning 1954 to 1978. Edited by R K Amin and Parth J Shah, it assembles 36 essays across five thematic sections — Context, Planning, Foreign Aid, Policy Critiques, and Agriculture — originally published in economic periodicals, newspapers, and lecture forums. The editors' preface, written by R K Amin, frames the volume as a posthumous tribute: it recalls Shenoy's forecast, validated by Nobel Laureate Milton Friedman and Peter Bauer, that India's socialist dirigisme would fail, and situates his relevance for a post-1991 generation. The prologue, attributed to the editors, explains that the title Economic Prophecies was chosen because Friedman, as early as 1963, had identified Shenoy as a prophet, and that this first volume is aimed at the general reader while the companion Theoretical Vision targets students of economics. In the rendered pages, three essays from Section A (Context) are partially or fully visible.… ### Body ## Summary Economic Prophecies (Centre for Civil Society, 2004) is the first of a two-volume collected-works edition of B. R. Shenoy's writings, spanning 1954 to 1978. Edited by R K Amin and Parth J Shah, it assembles 36 essays across five thematic sections — Context, Planning, Foreign Aid, Policy Critiques, and Agriculture — originally published in economic periodicals, newspapers, and lecture forums. The editors' preface, written by R K Amin, frames the volume as a posthumous tribute: it recalls Shenoy's forecast, validated by Nobel Laureate Milton Friedman and Peter Bauer, that India's socialist dirigisme would fail, and situates his relevance for a post-1991 generation. The prologue, attributed to the editors, explains that the title Economic Prophecies was chosen because Friedman, as early as 1963, had identified Shenoy as a prophet, and that this first volume is aimed at the general reader while the companion Theoretical Vision targets students of economics. In the rendered pages, three essays from Section A (Context) are partially or fully visible. Essay 1 — 'Free enterprise in danger' (May 1975) — warns that communist infiltration into government, combined with the progressive appropriation of private-sector investment resources by the public sector, is placing private enterprise on the path to extinction. Shenoy marshals data on public-sector capital appropriations, the conversion of loans to equity, and stagnant per-capita incomes to argue that the prevailing 'schizophrenic policies' cannot be corrected without heavy cuts in public-sector outlays. Essay 2 — 'Image of the Indian entrepreneur' (October 1970) — rehabilitates the Vaishya trading community against socialist caricature, tracing the institutional roots of the hundi credit system and documenting how policy hostility to enterprise has distorted the public image of Indian businessmen. The essay quotes spokesmen of Swatantra Party and Jayaprakash Narayan to show that even ostensible friends of business community were unwilling to defend entrepreneurial freedom consistently. ## Essays ### Essay 0 *By B. R. Shenoy* The Editor's Note, written by R K Amin, contextualises Shenoy's life and method. It opens with Milton Friedman calling Shenoy 'a prophet unhonoured in his own country' and Peter Bauer describing him as 'a hero and a saint.' Amin recounts meeting Shenoy shortly before his death on 8 February 1978, at which Shenoy expressed despair that he could not change the government's mind. The Note elaborates Shenoy's methodological stance — that economic theory must be grounded in real-world observation, not self-created models — and defends the separation of the economist's analytical role from that of a policy adviser. It closes by arguing that truth ultimately wins, pointing to China, England, New Zealand and the Soviet Union's own abandonment of socialist economics as posthumous vindication of Shenoy's warnings. - Milton Friedman and Peter Bauer are cited as international witnesses to Shenoy's prophetic stature - Amin stresses Shenoy's empirical method: rejecting model-building in favour of observed market and policy realities - The Note argues that merging the roles of economist and policy adviser undermines both scientific rigour and professional dignity - Shenoy's pessimism at death ('I feel sorry I could not change the mind of the government') is contrasted with Amin's optimism that truth always prevails - Post-1978 global events — Thatcher, Reagan, collapse of USSR, India's 1991 liberalisation — are offered as retrospective proof ### Free enterprise in danger *By B. R. Shenoy* Written in May 1975 in support of statements made by industrialist J R D Tata at an ASSOCHAM seminar, 'Free enterprise in danger' argues that communist infiltration into government and the escalating appropriation of private-sector investment resources by the public sector are placing private enterprise on the path to extinction. Shenoy rebuts Planning Commission Deputy Chairman P N Haksar's counter-claim that 90 per cent of national product still comes from the private sector, showing that what matters is not share of current output but share of investment resources: by 1980, the third factor alone (government appropriation of private capital) may bring 50 per cent of industrial and mining capital under government ownership. He documents how plan outlays of Rs 41,250 million in 1973-74 generate corrupt payments ('kickbacks') of Rs 8,250–16,500 million per year, transforming plan investments into dead-weight consumer income. Shenoy closes by arguing that even a Gandhian government — with J P Narayan or Vinoba Bhave as prime minister — could not correct the chaos without a thorough restructuring of policies including heavy cuts in public-sector outlays. - JRD Tata's warning of communist infiltration into key government positions is endorsed and elaborated - Haksar's 90-per-cent private-sector-output defence is rejected: the decisive variable is the public sector's share of investment resources, not current output - By 1980, government ownership of industrial and mining capital may reach 50–80 per cent through loan-to-equity conversions and direct appropriation - Public-sector plan outlays in 1973-74 generate Rs 8,250–16,500 million in corrupt payments, neutralising productive investment - Per-capita agricultural output declined at 0.14 per cent per year (compound) 1961-74 despite rising industrial production, reflecting capital starvation of agriculture ### Image of the Indian entrepreneur *By B. R. Shenoy* Published in October 1970, 'Image of the Indian entrepreneur' defends the traditional business community — specifically the Vaishya caste and its Bania sub-groups — against socialist caricature. Shenoy traces the historical origins of the hundi credit instrument, crediting it as an institution of high integrity that enabled long-distance trade across the subcontinent. He argues that the negative popular image of the entrepreneur emerged not from any inherent dishonesty but from socialist policy itself: price controls, import licensing, and the Industrial Policy Resolution of 30 April 1956 created incentives for black-market dealings and corruption that otherwise would not have existed. The essay documents how the Swatantra Party, Jayaprakash Narayan, and M R Masani — ostensibly friends of free enterprise — nevertheless hedged their support for the business community. In the rendered pages (printed pp. 6–10), Shenoy reaches the point of examining how public discourse blames rising prices on entrepreneur 'profiteering' rather than on inflation and government mismanagement, and he references the Bengal famine of 1943 as a case study in how crises are falsely attributed to businessmen. - The hundi — an 18th-century indigenous bill-of-exchange — is cited as evidence of high commercial integrity in Vaishya trading tradition - Socialist policy, not inherent cupidity, is the proximate cause of dodgy business practices: price controls and licensing create black markets - Even sympathetic political voices (Swatantra, JP, Masani) do not consistently defend entrepreneurial freedom - The Industrial Policy Resolution of 1956 classifies industries into three categories that entrench state dominance over strategic and basic industries - The Bengal famine of 1943 with 1,873,749 deaths is attributed to hoarding by middle-men — an attribution Shenoy calls a 'misfortune frequently listed by socialists' --- ## [Primary work] Economic Reforms in India: Where are We and Where do We Go? URL: https://indianliberals.in/primary-works/economic-reforms-in-india-where-are-we-and-where-do-we-go-dr-rakesh-mohan-october-10-2006/ ### Summary Rakesh Mohan's 39th A. D. Shroff Memorial Lecture, delivered in Mumbai in December 2005 and published by the Forum of Free Enterprise in 2007, takes stock of fifteen years of economic reform in India and sketches an agenda for the next round. Mohan invokes Malcolm Gladwell's metaphor of the tipping point to argue that countless small, gradual reforms since 1991 have together released a 'burst of entrepreneurial energy', lifting trend growth from around 3–4 per cent for three decades to 6–6.5 per cent, slashing inflation, building comfortable foreign-exchange reserves and pulling poverty down by 23–26 percentage points since independence.… ### Body ## Summary Rakesh Mohan's 39th A. D. Shroff Memorial Lecture, delivered in Mumbai in December 2005 and published by the Forum of Free Enterprise in 2007, takes stock of fifteen years of economic reform in India and sketches an agenda for the next round. Mohan invokes Malcolm Gladwell's metaphor of the tipping point to argue that countless small, gradual reforms since 1991 have together released a 'burst of entrepreneurial energy', lifting trend growth from around 3–4 per cent for three decades to 6–6.5 per cent, slashing inflation, building comfortable foreign-exchange reserves and pulling poverty down by 23–26 percentage points since independence. He divides the story into macroeconomic reforms — tax simplification (with a central CENVAT rate of 16 per cent, a VAT roll-out, and the Fiscal Responsibility and Budget Management Act of 2004); monetary policy reforms that ended automatic monetisation of fiscal deficits, restored central-bank autonomy and halved average inflation; and external-sector reforms that devalued the rupee in 1991, moved to a managed float, cut peak tariffs from over 400 per cent to 12.5, and opened the current account with limited capital-account convertibility. Microeconomic reforms — industrial deregulation, infrastructure liberalisation in telecoms, highways, ports and civil aviation, financial-sector strengthening (Basel II, prudential norms, market listing of public-sector banks, SEBI, NSE, abolition of the Controller of Capital Issues, IRDA), and selective agricultural opening — receive a similarly approving review, with telecoms and capital markets singled out as successes and power-sector reform, urban infrastructure and railways flagged as laggards. Mohan documents the turnaround through tables on per-capita income, poverty, literacy, life expectancy, installed power capacity, sectoral growth rates, fiscal indicators, banking NPLs, openness ratios and corporate profitability, dating the corporate-sector revival to 2002–03 after a slowdown around 1997. Looking forward, Mohan argues that the first generation of reforms freed the private sector but that further acceleration in growth and poverty reduction will be capped by the weakness of public goods and services. He calls for a 'second generation' of reforms that empowers the public sector — at central, state and local levels — to deliver agricultural research and extension, urban infrastructure, human-resource development and quality regulation, often through public–private partnerships. Agriculture receives the most extended treatment: he argues that a second green revolution must be disaggregated, regionally tailored and oriented to diversification into dairy, horticulture, fisheries and meat, supported by rejuvenated agricultural universities, NABARD-financed rural infrastructure, and decentralised credit delivery. The rendered pages close on urbanisation, where Mohan notes the puzzle that urban-population growth and net rural–urban migration have slowed during the reform period, with only 21 per cent of urban growth between 1991 and 2001 coming from migration; he traces this to inappropriate small-scale-industry reservations, rigid labour laws and urban land-use restrictions that have suppressed manufacturing-led urbanisation. ## Key points - Frames fifteen years of Indian reform (1991–2006) as a Gladwellian 'tipping point' of many small changes adding up to structural transformation, lifting trend GDP growth from 3–4 per cent to 6–6.5 per cent. - Macroeconomic reform agenda traced across fiscal (CENVAT, VAT, FRBM 2004), monetary (end of automatic monetisation, independent RBI, inflation halved to ~5 per cent) and external-sector (1991 devaluation, peak tariff cut from over 400 per cent to 12.5 per cent, managed-float exchange regime) reforms. - Microeconomic reform: industrial delicensing in 1991, small-scale reservations cut from 836 to 326 industries, telecom (TRAI), capital markets (SEBI, NSE) and civil aviation cited as successes; power, railways and urban infrastructure flagged as unfinished business. - Financial-sector reform produced sharp falls in NPLs, recapitalisation of public-sector banks, listing and Basel II adoption, and entry of private and foreign insurance companies under IRDA after the 1956 nationalisations. - Selected indicators: per-capita real income roughly tripled since 1951 to ₹12,414; installed power capacity rose from 1,362 MW in 1951 to over 118,000 MW; life expectancy from 32 to ~65 years; poverty headcount 23–26 per cent in 1999–2000. - Argues the binding constraint on the next phase is weak delivery of public goods, not lack of private dynamism, and that the 'public sector' must be redefined to span centre, state and local government for delivering agriculture, urban, education and governance services. - Diagnoses agricultural deceleration in the 1990s and 2000s and calls for a regionally disaggregated 'second green revolution' covering dairy, horticulture, fisheries and poultry, backed by rejuvenated universities, NABARD-financed rural infrastructure, and public–private partnerships in extension. - Identifies a paradoxical slowdown in net rural-urban migration during the reform period (only 21 per cent of urban-population growth in 1991–2001), attributing it to small-scale-industry reservations, rigid labour law and constraining urban land policy that suppress manufacturing-led urbanisation. --- ## [Primary work] ECONOMIC THINKING OF LORD KEYNES URL: https://indianliberals.in/primary-works/economic-thinking-of-lord-keynes-july-11-1968/ ### Summary This Forum of Free Enterprise booklet, issued in Bombay on 11 July 1968, reprints an article by University of Maryland economist Dudley Dillard that originally appeared in Review, the journal of the Institute of Public Affairs in Australia. Dillard, author of an earlier popular exposition of The General Theory of Employment, Interest and Money (1940), sets out to answer a question Forum readers had been asking with mounting urgency as Indian debate over deficit financing intensified: was Lord Keynes a socialist or a defender of capitalism? Forum president Murarji J. Vaidya frames the reprint as a service to students of public affairs in India who needed a clear, jargon-free account of Keynes' actual position rather than the caricatures circulating on either side. The body of the essay is a compact primer on the Keynesian system. Dillard places Keynes in the classical line that runs from Adam Smith and Ricardo through Mill and Marshall, then traces the General Theory's break with the older orthodoxy represented by Professor Pigou of Cambridge, who had argued that an all-round cut in wages would cure unemployment.… ### Body ## Summary This Forum of Free Enterprise booklet, issued in Bombay on 11 July 1968, reprints an article by University of Maryland economist Dudley Dillard that originally appeared in Review, the journal of the Institute of Public Affairs in Australia. Dillard, author of an earlier popular exposition of The General Theory of Employment, Interest and Money (1940), sets out to answer a question Forum readers had been asking with mounting urgency as Indian debate over deficit financing intensified: was Lord Keynes a socialist or a defender of capitalism? Forum president Murarji J. Vaidya frames the reprint as a service to students of public affairs in India who needed a clear, jargon-free account of Keynes' actual position rather than the caricatures circulating on either side. The body of the essay is a compact primer on the Keynesian system. Dillard places Keynes in the classical line that runs from Adam Smith and Ricardo through Mill and Marshall, then traces the General Theory's break with the older orthodoxy represented by Professor Pigou of Cambridge, who had argued that an all-round cut in wages would cure unemployment. Against this Dillard expounds Keynes' theory of effective demand, the consumption-investment relationship and the multiplier, and the policy implications that follow: loan-financed public investment in depression, low and permanent long-term interest rates as a stimulus to private investment, and a sharp warning that fiscal weapons remain untested as a defence against renewed slumps. A short section on wartime inflation policy describes Keynes' plan for forced saving through deferred pay as an anti-inflationary counterpart to his depression programme, and his rejection of general wage-cutting as a cure for unemployment. Dillard closes by directly addressing the booklet's subtitle. Keynes, he argues, was 'quite hostile' to Marx and to Marxism — dismissing Capital as 'an obsolete textbook' — and his theory of employment cut against the classical-socialist case that greater equality would simultaneously raise welfare and accelerate accumulation. Yet Keynes was equally hostile to laissez-faire and to the rentier interest, and located the special faults of capitalism in its monetary, financial and speculative institutions. The conclusion is that Keynes is best characterised as a critic of financial capitalism and a defender of industrial capitalism, willing to dismantle laissez-faire in order to preserve private enterprise and economic individualism. For a Forum of Free Enterprise audience in 1968, the implicit lesson is that endorsing Keynesian remedies for the trade cycle does not commit one to socialism. ## Key points - Reprint of a Dudley Dillard article originally published in Review (Institute of Public Affairs, Australia), issued by the Forum of Free Enterprise in Bombay on 11 July 1968 with permission from the IPA. - Forum president Murarji J. Vaidya frames the booklet as a corrective for Indian readers debating 'controlled' deficit financing and its inflationary effects. - Dillard situates Keynes alongside Adam Smith, Ricardo, John Stuart Mill, Karl Marx and Alfred Marshall as a classical-rank figure and compares his disruption of economics to Einstein's of physics. - The exposition centres on Keynes' break with Professor Pigou of Cambridge over wage-cutting and on the theory of effective demand, the consumption-investment relationship and the multiplier. - Policy chapters cover loan-financed public investment in depression, Keynes' campaign for permanently low long-term interest rates, his wartime programme of forced saving against inflation, and his rejection of all-round wage cuts. - Dillard records Keynes' open hostility to Marxism — calling Capital 'an obsolete textbook' — and his impatience with classical economists who refused to recognise capitalism's faults. - The closing pages characterise Keynes as a critic of financial capitalism and a defender of industrial capitalism, aiming to end laissez-faire so as to preserve private enterprise and economic individualism. - The pamphlet closes with the Forum's standard disclaimer that the views are not necessarily its own, an A. D. Shroff epigraph on free enterprise, and a membership solicitation. --- ## [Primary work] The Economic Thinking of Prof. Milton Friedman URL: https://indianliberals.in/primary-works/economic-thinking-of-prof-milton-friedman-milton-friedman-and-p-r-brahmananda-january-14-1977/ ### Summary Published by the Forum of Free Enterprise on 14 January 1977 to mark Milton Friedman's Nobel Prize, this slim booklet pairs two complementary texts. The first is a reprint of a 1963 article by Friedman himself — 'India Needs A Free Market Exchange Rate' — which the Forum had originally issued as a leaflet in May 1963 and now reproduces with a note that 'developments on India's foreign exchange front have moved in the direction indicated by Prof. Friedman.' The second is 'Milton Friedman — Leader of Monetarist Revolution', a critical appraisal by P. R. Brahmananda, Professor of Monetary Economics at Bombay University, originally published in Commerce on 23 October 1976. Together the two pieces position Friedman as both a practical policy critic of India's exchange-control regime and as the synthesiser who restored the Quantity Theory of Money to the centre of macroeconomics. The Forum supplies a brief introduction and the customary disclaimer that the views are not necessarily its own, while the back matter carries the standard membership appeal and an A. D. Shroff epigraph. ### Body ## Summary Published by the Forum of Free Enterprise on 14 January 1977 to mark Milton Friedman's Nobel Prize, this slim booklet pairs two complementary texts. The first is a reprint of a 1963 article by Friedman himself — 'India Needs A Free Market Exchange Rate' — which the Forum had originally issued as a leaflet in May 1963 and now reproduces with a note that 'developments on India's foreign exchange front have moved in the direction indicated by Prof. Friedman.' The second is 'Milton Friedman — Leader of Monetarist Revolution', a critical appraisal by P. R. Brahmananda, Professor of Monetary Economics at Bombay University, originally published in Commerce on 23 October 1976. Together the two pieces position Friedman as both a practical policy critic of India's exchange-control regime and as the synthesiser who restored the Quantity Theory of Money to the centre of macroeconomics. The Forum supplies a brief introduction and the customary disclaimer that the views are not necessarily its own, while the back matter carries the standard membership appeal and an A. D. Shroff epigraph. ## Essays ### Introduction Friedman's 1963 article diagnoses the overvalued, pegged rupee as the 'Achilles heel' of the Indian economy. Since 1955 internal Indian prices have risen 30–40 per cent while US, UK and German prices have risen at most 10 per cent, so at the unchanged official rate the rupee is worth far less than 21 cents in purchasing-power terms. Maintaining the peg, he argues, has forced the government down three increasingly damaging paths — drawing down reserves, soliciting more foreign aid and loans, and tightening direct exchange and import controls — while a fourth, unofficial channel of black-market transactions has expanded in step with the unreality of the official rate. Direct controls have failed to stimulate exports and instead misallocate imports, breed corruption around licence-granting, generate windfall rents for the lucky few, and corrode public trust in government. Friedman predicts an inevitable devaluation 'sometime within the next year or so', perhaps to seven rupees to the dollar or twenty to the pound, but warns that a new fixed peg will only buy time. The clean solution is to stop pegging altogether: let the rate float, ideally alongside the abolition of import quotas, export subsidies and other trade interference; if quotas cannot be removed, at minimum replace them with tariffs under a floating rate. A market exchange rate, he concludes, would enlist 'tens of millions of people in their everyday lives' as decentralised allocators of foreign exchange — a knowledge advantage that no central planner can match. - Diagnoses the overvalued pegged rupee as the central distortion in the Indian economy. - Documents the divergence between Indian and Western price levels between 1955 and 1963 to argue the rupee is worth far less than 21 cents. - Catalogues the three official responses to the peg — drawing down reserves, foreign aid and loans, direct controls — plus the black-market fourth channel. - Argues that direct import licensing breeds corruption, rent-seeking and public distrust without stimulating exports. - Predicts an imminent devaluation but rejects any new fixed peg as a stable solution. - Advocates a floating exchange rate, ideally combined with the abolition of quotas and subsidies, as an automatic adjustment mechanism. ### India Needs A Free Market Exchange Rate *By Prof. Milton Friedman* Brahmananda's appraisal positions Friedman as the leader of the 'Monetarist Revolution' and the chief modern champion of the Quantity Theory of Money, alongside Piero Sraffa's parallel revival of classical economics. He calls Friedman a 'hedgehog' in Isaiah Berlin's sense — the thinker who knows one big thing — and lays out the modern Quantity Theory in ten propositions covering the money multiplier, the income-velocity function, the transmission mechanism, the stable demand for money, the case for a fixed money-supply growth rule, real-balance saving, the Fisher distinction between real and nominal interest, and the long-run neutrality of money for real output. For each proposition, Brahmananda generously distributes credit — to Irving Fisher, Ralph Hawtrey, D. H. Robertson, Henry Simons, Don Patinkin, Vera Lutz, Hayek, the Austrians, Gurley and Shaw — arguing that Friedman's genuine originality lies less in the propositions themselves than in synthesising them and subjecting them to systematic empirical test. The second half is more critical. Brahmananda holds that Friedman has 'partly surrendered himself to Keynesianism' by conceding the necessity of effective demand under Keynesian short-run conditions, and that his recent advocacy of 100 per cent indexation amounts to abandoning the fight against inflation in favour of preserving the status-quo ante. He contrasts Friedman with Hayek, who 'cannot enter into any compromise … with the phenomenon of inflation', and aligns himself with classical economists — Ricardo, Hume, J. S. Mill, Marshall, Robertson — who favoured a falling-price-level path as more conducive to social justice for workers and savers. The essay closes with the verdict that 'Friedman's victory is for Monetarism against Fiscalism' but not for monetarist theory over the General Theory, and a call for Friedman to return to the older Quantity Theory tradition by recognising the rejection of Say's Law as the root of the trouble. - Frames Friedman as a 'hedgehog' who restored the Quantity Theory of Money to the centre of macroeconomics, on a par with Sraffa's revival of classical economics. - Lays out the modern Quantity Theory in ten propositions covering the money multiplier, velocity, transmission, demand for money, fixed-growth rule, indexation and long-run neutrality. - Distributes credit for individual propositions to Fisher, Hawtrey, Robertson, Simons, Patinkin, Lutz, Hayek, Gurley and Shaw, locating Friedman's originality in synthesis and empirical testing rather than novelty. - Argues Friedman has 'partly surrendered' to Keynesianism by admitting effective demand as a necessary condition for full-employment real income. - Criticises Friedman's espousal of 100 per cent indexation as a 'pain-killer preserving the status-quo ante' rather than a remedy for inflation. - Contrasts Hayek's uncompromising anti-inflation stance with Friedman's accommodation, aligning the author with classical economists like Ricardo, Hume, J. S. Mill and Marshall who preferred a falling-price-level path on grounds of social justice. - Concludes that Friedman's success is policy-level — 'Monetarism against Fiscalism' — and that the deeper task is to reject Say's Law and the doctrine of effective demand 'a la Keynes or a la Friedman'. --- ## [Primary work] ECONOMICS OF FREEDOM URL: https://indianliberals.in/primary-works/economics-of-freedom-m-a-masani-feb12-1965/ ### Summary This pamphlet reproduces M. R. Masani's address to the Rotary Club of Bombay, framed as a sustained argument against India's drift toward what he calls 'State Capitalism and State Landlordism' on the Soviet–Chinese pattern. Masani opens by recalling a conversation with an influential ruling-party friend who shared his distaste for the Stalinist model yet still wished India to socialise large-scale industry and impose co-operative farming; the body of the talk explains why such a programme, however well-intentioned, must in his view extinguish political liberty. The argument proceeds on three fronts. First, Masani sets out the consumer-sovereignty case for the market: only the discipline of the price system, supply and demand and the balance sheet allows the citizen to choose what to buy, where to work, and whether to strike — freedoms that vanish once the State is the sole employer and sole supplier. Second, he attacks the feasibility of democratic planning, arguing that no parliamentary majority can sensibly arbitrate the thousands of microeconomic choices a single national plan demands. Citing Aneurin Bevan, Harold Laski and R. H. S.… ### Body ## Summary This pamphlet reproduces M. R. Masani's address to the Rotary Club of Bombay, framed as a sustained argument against India's drift toward what he calls 'State Capitalism and State Landlordism' on the Soviet–Chinese pattern. Masani opens by recalling a conversation with an influential ruling-party friend who shared his distaste for the Stalinist model yet still wished India to socialise large-scale industry and impose co-operative farming; the body of the talk explains why such a programme, however well-intentioned, must in his view extinguish political liberty. The argument proceeds on three fronts. First, Masani sets out the consumer-sovereignty case for the market: only the discipline of the price system, supply and demand and the balance sheet allows the citizen to choose what to buy, where to work, and whether to strike — freedoms that vanish once the State is the sole employer and sole supplier. Second, he attacks the feasibility of democratic planning, arguing that no parliamentary majority can sensibly arbitrate the thousands of microeconomic choices a single national plan demands. Citing Aneurin Bevan, Harold Laski and R. H. S. Crossman, he insists that even British socialists concede the same logic — that 'only power restrains power', and that monopoly economic power in the State liquidates the autonomous social forces on which an Opposition depends. Third, Masani enlists Indian witnesses: Gandhi's fear of an expanded State that destroys individuality, Acharya Vinoba Bhave's caution against centralising everything under the Welfare State, and Jayaprakash Narayan's warning that the Welfare State 'threatens as much to enslave man to the State as the totalitarian'. His positive prescription is the Mixed Economy he traces back to his 1946 Bombay Silver Jubilee lectures — Free Enterprise and State Enterprise functioning autonomously alongside each other, with peasant proprietorship and free trade unions intact — and he closes by warning that no constitution alone can save the Republic if the State swallows civil society. ## Key points - Frames India's choice as one between a Mixed Economy with peasant proprietorship and free enterprise on one side, and a Soviet/Stalinist-style monolithic totalitarian dictatorship on the other. - Uses the consumer-sovereignty argument: in a free economy, supply, demand and price make the consumer king, whereas a State monopoly leaves no exit for worker, peasant or consumer. - Argues that comprehensive central planning is incompatible with parliamentary democracy because a single national plan demands thousands of value-judgments no electorate can settle. - Invokes the principle that 'only power restrains power' and that autonomous social forces (industrial management, trade unions, peasant proprietors, religion) are the real assurance of liberty. - Cites British socialists Aneurin Bevan, R. H. S. Crossman and Harold Laski as conceding that the growth of central state bureaucracy under socialism threatens democracy and individual freedom. - Recruits Mahatma Gandhi, Acharya Vinoba Bhave and Jayaprakash Narayan as Indian moral authorities warning against the centralising drift of the Welfare State. - Defends the 'Mixed Economy' Masani had advocated since the 1946 Silver Jubilee Lectures of the Bombay School of Economics and Sociology — Free Enterprise and State Enterprise functioning autonomously side by side. - Closes with Gandhi's dictum that an increase in the power of the State, however well-meaning, destroys the individuality that lies at the root of all progress. --- ## [Primary work] Economy and Efficiency in Public Administration in India URL: https://indianliberals.in/primary-works/economy-and-efficiency-in-public-administration-in-india-c-s-venkatachar-may-8-1963/ ### Summary C. S. Venkatachar's 1963 Forum of Free Enterprise pamphlet diagnoses what he calls a 'pronounced maladjustment of Government and politics with the administration' in the seventeenth year of Independence. Writing from the vantage point of a retired senior civil servant who had served as Secretary to the President of India, he distinguishes the old, manageable, two-person financial corruption of the colonial bureaucracy from a new structural corruption — a rot in the public morals of the ruling elite that, in his Turkish-proverb phrase, 'rots from head downwards' and prostitutes the administrative machinery to factional ends. He traces this rot to the statism unleashed by the 1952 turn to state trading, controls, licensing and bulk-buying of foodstuffs, compounded by a politically unreformed Congress party that finds it convenient to browbeat and hollow out the Civil Service rather than govern through it. The pamphlet's second movement borrows R. H. S. Crossman's recent essay on Walter Bagehot to argue that India, like post-war Britain, has drifted from Cabinet Government to Prime Ministerial Government.… ### Body ## Summary C. S. Venkatachar's 1963 Forum of Free Enterprise pamphlet diagnoses what he calls a 'pronounced maladjustment of Government and politics with the administration' in the seventeenth year of Independence. Writing from the vantage point of a retired senior civil servant who had served as Secretary to the President of India, he distinguishes the old, manageable, two-person financial corruption of the colonial bureaucracy from a new structural corruption — a rot in the public morals of the ruling elite that, in his Turkish-proverb phrase, 'rots from head downwards' and prostitutes the administrative machinery to factional ends. He traces this rot to the statism unleashed by the 1952 turn to state trading, controls, licensing and bulk-buying of foodstuffs, compounded by a politically unreformed Congress party that finds it convenient to browbeat and hollow out the Civil Service rather than govern through it. The pamphlet's second movement borrows R. H. S. Crossman's recent essay on Walter Bagehot to argue that India, like post-war Britain, has drifted from Cabinet Government to Prime Ministerial Government. The pre-existing centralised administrative machine, Venkatachar writes, fitted itself effortlessly around the Prime Minister, with the result — quoting Crossman — that 'loyalty has become the supreme virtue and independence of thought a dangerous adventure.' He follows the maladjustment down the escalator from the Centre to the district, where the Collector is reduced to factional politics with the Zila Parishad chairman and the Block Development Officer becomes a pawn of the Panchayat Samiti President. The Benthamite military-style hierarchy on which the Indian administrative system was built has collapsed, he argues, into 'non-accountability in the chain of command' and a collapse of internal discipline. Against this Venkatachar offers no policy therapy. The remedy, he insists, is moral: India still possesses a 'liberal, radical tradition' that is the moral heir to nineteenth-century philosophic radicalism, and reviving dissident opinion is the only counterpoise to the 'authoritarian forces of the present one-party State.' Quoting Pasternak and John Strachey on the spent appeal of communist totalitarianism, and closing with Arthur Koestler's borrowing of the Alcoholics Anonymous serenity prayer, he frames moral courage — not better planning — as the indispensable condition for genuine economy and efficiency in public administration. ## Key points - Venkatachar frames his theme as the 'pronounced maladjustment' between Indian politics and administration in the seventeenth year of Independence, and treats administration — not policy — as the only instrument by which national aims can be achieved. - He distinguishes the old, two-party, manageable financial corruption of the colonial bureaucracy from a new structural corruption that 'rots from head downwards', spreading from the political elite into the social hierarchy and prostituting the administrative machinery. - He attributes the post-Independence rise of corruption to the statism unleashed by the 1952 turn to state trading, controls, licensing and bulk-buying, compounded by a politically unreformed ruling party that browbeat the Civil Service rather than reform itself. - Adapting R. H. S. Crossman's reading of Walter Bagehot, he argues that India has practised Prime Ministerial Government rather than Cabinet Government, producing 'an immense accretion of power to the Prime Minister' and reducing ministers to his agents. - He documents the maladjustment cascading to Panchayati Raj, where the Collector is dragged into factional politics with the Zila Parishad chairman and the Block Development Officer becomes a pawn of the Panchayat Samiti President. - The Benthamite military-style chain of command on which the Indian administrative system was built has, in his diagnosis, collapsed into non-accountability and the disappearance of individual initiative under one-party dominance. - He invokes a 'liberal, radical tradition' surviving in India — the moral heir to nineteenth-century philosophic radicalism — and calls for dissident opinion and dissident groups as a counterpoise to the authoritarian one-party State. - Closing with Pasternak, John Strachey on the failure of Communist means, and Arthur Koestler's Alcoholics Anonymous serenity prayer, he frames moral courage rather than policy reform as the precondition for economy and efficiency in public administration. --- ## [Primary work] Education and India's Poverty URL: https://indianliberals.in/primary-works/education-and-indias-poverty-v-v-john-15-november-1975/ ### Summary Delivered as the tenth A. D. Shroff Memorial Lecture under the auspices of the Forum of Free Enterprise in Bombay on 27 October 1975, V. V. John's address argues that India's poverty is at root an educational problem and that the country's universities and colleges have failed in their duty to the poor. John, a former Vice-Chancellor of Jodhpur University, opens by saluting the scholarly studies of poverty by Dandekar and Rath, Fonseca, and Dantwala for moving the debate beyond sentimental generalities, but insists that poverty is ultimately a moral problem whose solution requires the active engagement of the intellectual class. With more than 250 million Indians, including 100 million children, going to bed hungry, he argues, compassion cannot be allowed to retreat into either economic technicality or the convenient fatalism he sees creeping into developed-country attitudes towards the Third World. The heart of the lecture is an indictment of Indian higher education as a "scandalous pyramid of privileges" subsidised by public funds for an academically privileged minority that returns little of value to the society that paid for its training.… ### Body ## Summary Delivered as the tenth A. D. Shroff Memorial Lecture under the auspices of the Forum of Free Enterprise in Bombay on 27 October 1975, V. V. John's address argues that India's poverty is at root an educational problem and that the country's universities and colleges have failed in their duty to the poor. John, a former Vice-Chancellor of Jodhpur University, opens by saluting the scholarly studies of poverty by Dandekar and Rath, Fonseca, and Dantwala for moving the debate beyond sentimental generalities, but insists that poverty is ultimately a moral problem whose solution requires the active engagement of the intellectual class. With more than 250 million Indians, including 100 million children, going to bed hungry, he argues, compassion cannot be allowed to retreat into either economic technicality or the convenient fatalism he sees creeping into developed-country attitudes towards the Third World. The heart of the lecture is an indictment of Indian higher education as a "scandalous pyramid of privileges" subsidised by public funds for an academically privileged minority that returns little of value to the society that paid for its training. John mocks the brain drain debate as a "clever hoax," derides teachers' "relay hunger strikes" for higher emoluments in a country of literal hunger, and laments that the dream of every educated Indian is "a full-time salary for part-time work." The expansion of enrolments since the Kothari Commission has, in his telling, produced an illusion of opportunity rather than meaningful qualifications, while a privileged sector at the top consumes per-capita expenditure ten or fifteen times higher than the rest. John then turns to the politics of property and land reform, criticising progressives who would strip the right to property from the Constitution without distinguishing widely distributed small ownership from plutocratic concentration; drawing on Chesterton's debate with Yeats and on Henry George's Progress and Poverty, he defends small property as a safeguard of liberty against both private and state power. He rejects the GNP-first economics that asks the poor to wait for trickle-down, attacks the cult of "selective" quality education that screens out the children of the poor, and dismisses the equality preached by Coleman and Jencks as a narrow income-equality that education cannot deliver. Education's task, he concludes, is not to flatten differences but to enable every person's full self-development; commitment to a social order that disperses both economic and political power is, in his closing words, "a necessary postulate to any system of education aiming at the full development of human resources." ## Key points - Frames poverty as ultimately a moral and educational problem, not merely an economic one, and assigns educationists a primary share of responsibility for tackling it. - Cites a conservative reckoning that over 250 million Indians, including 100 million children, go to bed hungry every night, to anchor the lecture's stakes. - Indicts Indian universities and colleges as a 'scandalous pyramid of privileges' funded by public money but yielding little public return. - Dismisses the brain-drain lament as a 'clever hoax' staged by entrenched experts to inflate their own scarcity value. - Defends widely distributed small property — citing Chesterton's debate with Yeats — as a bulwark against both private plutocracy and state bureaucracy, and warns against abolishing the right to property without distinguishing kinds of ownership. - Attacks GNP-maximising economists who ask the poor to wait for redistribution and criticises 'selective' quality education that excludes children of the poor. - Disputes the sociological notion of equality drawn from Coleman, Jencks, Jensen and Eysenck, arguing that genuine equality is moral and spiritual, realised through self-fulfilment rather than equalised incomes. - Concludes that the right kind of education and a just social order — one that prevents concentration of wealth or power in either private hands or the state — are mutually constitutive. --- ## [Primary work] EDUCATION, LEADERSHIP AND VISION OF A FREE INDIA URL: https://indianliberals.in/primary-works/education-leadership-and-vision-for-free-india-nani-a-palkhivala/ ### Summary This slim Forum of Free Enterprise booklet collects two of Nani A. Palkhivala's late-1990s addresses. The first is his acceptance speech for the 1997 Dadabhai Naoroji Award, delivered on 12 August 1997; the second is his response at the University of Mumbai's Special Convocation on 19 January 1998, where Governor P. C. Alexander conferred an honorary Doctor of Laws on him. Both texts are framed around the conviction that India's freedom required, above all, an enlightened and well-educated citizenry. In the Naoroji tribute, Palkhivala portrays the Grand Old Man as a pioneer of free and female education who personally went door-to-door persuading families to let girls learn the three Rs. He argues that Naoroji's vision combined the British virtues of justice and fairness with a settled commitment to a secular Constitution in which all religions and linguistic minorities would enjoy equal reverence and the right to run their own institutions.… ### Body ## Summary This slim Forum of Free Enterprise booklet collects two of Nani A. Palkhivala's late-1990s addresses. The first is his acceptance speech for the 1997 Dadabhai Naoroji Award, delivered on 12 August 1997; the second is his response at the University of Mumbai's Special Convocation on 19 January 1998, where Governor P. C. Alexander conferred an honorary Doctor of Laws on him. Both texts are framed around the conviction that India's freedom required, above all, an enlightened and well-educated citizenry. In the Naoroji tribute, Palkhivala portrays the Grand Old Man as a pioneer of free and female education who personally went door-to-door persuading families to let girls learn the three Rs. He argues that Naoroji's vision combined the British virtues of justice and fairness with a settled commitment to a secular Constitution in which all religions and linguistic minorities would enjoy equal reverence and the right to run their own institutions. Palkhivala laments that fifty years after independence India has slid to the "lowest level of degradation" in its 5,000-year history, far below what Naoroji could have imagined in his "wildest nightmare." The convocation address turns this concern outward into a meditation on moral leadership. Education, Palkhivala insists, is not training: it requires personal participation and inward transformation. Drawing on ancient India — King Janaka journeying to Yajnavalkya, Sankaracharya walking from Kerala to Kashmir — and on Thomas Jefferson's warning that no nation can be ignorant and free, he argues that leaders first build institutions and institutions in turn build later leaders. India's ministry of education has been treated as a minor cabinet post, value-based education has collapsed, and the country that should have led the world in "life-nurturing ideas" is led instead by others' "crass materialism." He closes by paying tribute to Bombay University's galaxy of alumni — Dadabhai Naoroji, Pherozeshah Mehta, Ranade, Tilak, Gokhale — and concluding that contemporary India deserves neither its Constitution, nor a Gandhi, nor that earlier generation of nation-builders. ## Key points - The booklet pairs Palkhivala's 1997 Dadabhai Naoroji Award acceptance speech with his 1998 University of Mumbai LL.D. convocation response. - He reads Naoroji's vision of a free India as fundamentally educational — an enlightened, secular society with equal opportunity, including female education. - Palkhivala invokes Naoroji's biographer Sir R. P. Masani to dramatise the social resistance early female-education reformers faced. - He contends that had Naoroji helped frame the Constitution, he would have embodied the same secular fundamental rights and protections for religious and linguistic minorities. - Both addresses argue that post-independence India has reached the lowest moral and civic ebb of its 5,000-year history. - The convocation address sharply distinguishes training (which animals can receive) from education (which demands personal transformation). - Citing Jefferson and ancient Indian precedent, Palkhivala argues leaders build the institutions that later build leaders, and India's nation-building institutions have been allowed to decay. - He calls for moral leadership in education, grounded in courage, intellectual integrity, and a sense of values, and salutes the Bombay University tradition of Naoroji, Mehta, Ranade, Tilak, and Gokhale. --- ## [Primary work] EFFICIENCY "NOT POSSIBLE" IN PUBLIC UNDERTAKING URL: https://indianliberals.in/primary-works/efficiency-not-possible-in-public-undertaking-by-mr-anantharamakrishnan-and-cp-ramaswamy-ayyar-october-24-1956/ ### Summary This three-page Forum of Free Enterprise pamphlet reprints an October 24, 1956 report from the 'Mail', Madras, of two speeches delivered at the 15th anniversary of the Sri Rama Vilas Service. The industrialist S. Anantharamakrishnan and the administrator-jurist Dr. C. P. Ramaswamy Ayyar mount a paired defence of the private sector at a moment when the Second Five-Year Plan and a wave of nationalisations were tilting the Indian economy toward state ownership. Their joint thesis is that efficiency is structurally impossible in a public undertaking and that the private sector has been doing the country's real economic work without acknowledgement. Ramaswamy Ayyar argues from administrative experience that everything the State has touched has slackened in efficiency 'bit by bit', whereas the private sector has consistently produced 'excellent results'; he calls for a clean enunciation of the Government's policy so that private enterprise can function without misgivings, and notes that even after the recent nationalisations 95 per cent of the country's economic activity still rests in private hands.… ### Body ## Summary This three-page Forum of Free Enterprise pamphlet reprints an October 24, 1956 report from the 'Mail', Madras, of two speeches delivered at the 15th anniversary of the Sri Rama Vilas Service. The industrialist S. Anantharamakrishnan and the administrator-jurist Dr. C. P. Ramaswamy Ayyar mount a paired defence of the private sector at a moment when the Second Five-Year Plan and a wave of nationalisations were tilting the Indian economy toward state ownership. Their joint thesis is that efficiency is structurally impossible in a public undertaking and that the private sector has been doing the country's real economic work without acknowledgement. Ramaswamy Ayyar argues from administrative experience that everything the State has touched has slackened in efficiency 'bit by bit', whereas the private sector has consistently produced 'excellent results'; he calls for a clean enunciation of the Government's policy so that private enterprise can function without misgivings, and notes that even after the recent nationalisations 95 per cent of the country's economic activity still rests in private hands. Anantharamakrishnan adds that public-sector inefficiency is a 'notorious fact' from any standard of judgement, criticises the lightning pace of legislation that even lawyers cannot keep up with, and rebuts the moral case for nationalisation by pointing out that 'black sheep' exist in every organisation — including the Congress party — without the whole being dissolved. The pamphlet's policy proposals are concrete and bounded: give nationalisation 'rest for 2 years'; allow the private sector a well-defined sphere within the Second Plan, including transport (currently a bottleneck where the gap between resources needed and resources available is large); enlist foreign capital; and treat the question of railway efficiency as an open empirical comparison with railways abroad rather than a settled article of faith. The closing image — 'Let them do things well for those already undertaken' — frames state expansion as imprudent until the State has proved itself on what it has already nationalised. ## Key points - Joint speech by industrialist S. Anantharamakrishnan and administrator C. P. Ramaswamy Ayyar at the 15th anniversary of the Sri Rama Vilas Service, reprinted by the Forum of Free Enterprise from the 'Mail', Madras. - Central claim: efficiency 'tended to slacken bit by bit' wherever the State entered, while the private sector produced 'excellent results' — making state efficiency structurally impossible. - Empirical counterweight to nationalisation rhetoric: even after liquidating maharajas, rajas, and zamindars, 95 per cent of India's economic activity still ran on the private sector. - Anantharamakrishnan attacks the moral case for nationalisation by analogy — 'black sheep' exist in every organisation, including the Congress party, but no one demands the party be dissolved on that ground. - Concrete policy ask: a two-year moratorium on nationalisation, a clean Government enunciation of the private sector's scope, and enlisting foreign capital alongside domestic enterprise. - Transport is singled out as a sphere where the Second Plan's resource gap is unbridgeable without private participation; the speakers question whether nationalised Indian railways are in fact as efficient as foreign railways. - Critique of legislative process: the speed of new laws outruns even lawyers' ability to grasp the essentials, leaving private enterprise to operate in legal fog. - Tone is conciliatory rather than confrontational — the speakers ask only that private enterprise be 'allowed to play its part' within a well-defined sphere, framing this as a falsifiable experiment rather than ideology. --- ## [Primary work] EFFICIENCY IN STATE ENTERPRISES IN INDIA URL: https://indianliberals.in/primary-works/efficiency-in-state-enterprises-in-india-dr-n-das-feb5-1963/ ### Summary Dr. N. Das, a retired ICS officer and Director-General of the Employers' Federation of India, delivered this lecture to the Forum of Free Enterprise in Bombay on 26 October 1962. He traces the meteoric rise of India's public sector since the 1948 Industrial Policy Statement: from Rs. 179 crores in the First Plan, to Rs. 974 crores in the Second Plan, to Rs. 2,147 crores earmarked in the Third Plan—roughly 97 per cent of total Central Government industrial investment by 1960-61. The booklet asks a single, sharp question: with this scale of state investment, is the country getting commensurate value? The diagnostic core of the lecture is comparative profitability. Das cites the Finance Ministry's First Annual Report on the Working of Industrial and Commercial Undertakings of the Central Government, which showed that of 23 running concerns only nine declared dividends in 1960-61, averaging just 4.2 per cent on paid-up capital, while six showed losses and three earned under 3.3 per cent.… ### Body ## Summary Dr. N. Das, a retired ICS officer and Director-General of the Employers' Federation of India, delivered this lecture to the Forum of Free Enterprise in Bombay on 26 October 1962. He traces the meteoric rise of India's public sector since the 1948 Industrial Policy Statement: from Rs. 179 crores in the First Plan, to Rs. 974 crores in the Second Plan, to Rs. 2,147 crores earmarked in the Third Plan—roughly 97 per cent of total Central Government industrial investment by 1960-61. The booklet asks a single, sharp question: with this scale of state investment, is the country getting commensurate value? The diagnostic core of the lecture is comparative profitability. Das cites the Finance Ministry's First Annual Report on the Working of Industrial and Commercial Undertakings of the Central Government, which showed that of 23 running concerns only nine declared dividends in 1960-61, averaging just 4.2 per cent on paid-up capital, while six showed losses and three earned under 3.3 per cent. A June 1961 study by the Indian Institute of Public Opinion went further: in physical-output terms the Public Sector's return on capital employed was less than one-fourth that of comparable private firms, and in financial-return terms 2.7 per cent against the Private Sector's 9.7 per cent—an almost identical proportional gap from two different angles. Das attributes this underperformance to a stack of causes: inexperienced ICS recruits parachuted into senior managerial posts (he calls them "pro-consuls"), excessive Government regulation that consumes management time, delays of authority and supply (citing the German experts' complaint at Rourkela), labour indiscipline and absenteeism (the Heavy Electricals strike at Bhopal, the Rourkela unrest), poor cost accounting and capacity utilisation, and a politically dictated low-price policy that prevents surplus generation. He invokes Galbraith on how officials on boards destroy enterprise autonomy, the World Bank Mission's verdict that the Government had not helped strengthen the Public Sector, and Paul Appleby on the difficulty of measuring public-enterprise efficiency at all. The conclusion is deliberately measured rather than ideological. Das does not call for halting the expansion of state enterprises; he calls for parity of treatment with private undertakings so that genuine competition can discipline both. Reduce costs, lift efficiency, end monopoly-style protection, and the Public Sector can be made to earn its considerable place in the economy rather than become, as he puts it, a "costly" business in more senses than one. ## Key points - Frames the Public Sector's growth in budget terms: Rs. 179 crores in the First Plan, Rs. 974 crores in the Second, Rs. 2,147 crores planned in the Third—around 97% of Central Government industrial investment by 1960-61. - Uses the Finance Ministry's First Annual Report to show only 9 of 23 Central undertakings declared dividends in 1960-61, averaging 4.2% on paid-up capital, with 6 units running losses. - Cites the Indian Institute of Public Opinion's June 1961 study: Public Sector return on capital was 2.7% versus the Private Sector's 9.7% over 1958-59. - Identifies inexperienced ICS officers in senior managerial posts as a structural drag, with Galbraith quoted on boards becoming "a link in the Civil Service hierarchy". - Catalogues operational failures: Rourkela's purchasing bottlenecks flagged by the German Commission under Solveen; Bhopal Heavy Electricals strike; high absenteeism flagged in the Solveen Report. - Blames excessive Government regulation and the time "negotiating their way through Government regulations" consumes from public enterprise managements, echoing the World Bank Mission. - Argues that politically dictated low pricing of public-sector output suppresses surpluses, with Hindustan Machine Tools cutting prices 10-20 per cent and Hindustan Antibiotics offering 15% discounts as illustrations. - Does not oppose Public Sector expansion but demands equality of treatment between public and private sectors to generate healthy competition. --- ## [Primary work] Efficient Planning in a Democratic Society URL: https://indianliberals.in/primary-works/efficient-planning-in-a-democratic-society-f-a-mehta-aug10-1965/ ### Summary Originally delivered as a talk at an international symposium in Turkey in 1964 and issued in August 1965 as a Forum of Free Enterprise booklet, Dr. F. A. Mehta's essay confronts the central post-war development question: whether rapid economic growth can be secured, stimulated, and sustained within a framework of political democracy, individual liberty, and the rule of law. Writing for a readership of over a hundred under-developed countries, Mehta refuses both halves of the prevailing fatalism — that democracy must be sacrificed for growth, or that growth must be slowed to preserve democracy — and instead diagnoses the real source of strain: in the short run, growth itself generates rising prices, consumer-goods shortages, severe inequalities and harder working hours, all of which press on democratic stability before the gains diffuse downward. The second and longer half of the booklet turns from the tensions of growth to the methodology of growth — the mechanics and ideology of planning.… ### Body ## Summary Originally delivered as a talk at an international symposium in Turkey in 1964 and issued in August 1965 as a Forum of Free Enterprise booklet, Dr. F. A. Mehta's essay confronts the central post-war development question: whether rapid economic growth can be secured, stimulated, and sustained within a framework of political democracy, individual liberty, and the rule of law. Writing for a readership of over a hundred under-developed countries, Mehta refuses both halves of the prevailing fatalism — that democracy must be sacrificed for growth, or that growth must be slowed to preserve democracy — and instead diagnoses the real source of strain: in the short run, growth itself generates rising prices, consumer-goods shortages, severe inequalities and harder working hours, all of which press on democratic stability before the gains diffuse downward. The second and longer half of the booklet turns from the tensions of growth to the methodology of growth — the mechanics and ideology of planning. Mehta surveys the spectrum from the Communist model based on totalitarianism, through dirigiste planning grounded in physical controls, to a liberal-democratic planning that relies on the price mechanism as far as conditions permit. He argues that the price mechanism's defects are real but its virtues — efficient allocation of scarce resources and the harnessing of individual enthusiasm, skill and effort — are so substantial that developing countries' wholesale ideological rejection of it is "a bit pathetic, if not pathological." Citing Hugh T. Patrick on Japan, B. F. Johnston on agricultural productivity, W. W. Rostow and Simon Kuznets on growth cycles, and pointedly the Liebermann reforms in Soviet Russia, Mehta argues that even command economies are turning back to price signals; he singles out Prof. B. R. Shenoy as the lone eminent Indian economist arguing this line, with most Indian planners and businessmen having capitulated to "the magic word" of Planning. The closing pages lay down a quantitative liberal programme: planning must err on the side of caution rather than ambition; physical controls must carry strict "time-limits"; income tax in isolation should not exceed 60% and combined with other taxes not 45% of assessable income; inflation should be capped at 2-3% in a developing economy with growth at least 6-7%; interest rates should be high enough to encourage savings; nationalisation should be confined to areas where private enterprise has been proved unequal; and political leadership must find the "optimum" or "golden mean" by judgment, not formula. Mehta ends with the observation that economic growth, ironically, is fastest when driven by something like spiritual fervour — that monetary incentives alone do not move human beings, but neither will faith alone deliver the goods, and that an age is upon developing countries in which a system is judged by what it delivers. ## Key points - Frames the era's central economic-political question as whether rapid development can be secured within a framework of political democracy, individual liberty, the rule of law and freely elected governments. - Argues that in the short run economic growth raises tensions — rising prices, shortages of consumer goods, longer working hours and severe inequalities — and so endangers political stability before its gains are diffused. - Distinguishes two separable pressures on democracy: the tensions generated by rapid growth, and the mechanics and methodology of growth — that is, planning itself. - Defends the price mechanism as the best available instrument for combining efficiency and individual freedom, calling its blanket rejection in developing countries dogmatic and ideologically driven. - Cites Hugh T. Patrick on Japan, B. F. Johnston on agricultural productivity, and the writings of Simon Kuznets and W. W. Rostow to show that historically rapid growth has required tolerance of inequality and disparities of outcome. - Reads the Liebermann reforms in Soviet Russia as evidence that even command economies are returning to the price mechanism — "a system of capitalism without capitalists." - Singles out Prof. B. R. Shenoy as the lone eminent Indian economist consistently defending the price mechanism, against the consensus of Indian planners, businessmen and intellectuals — including Prof. M. L. Dantwala's more equivocal acceptance. - Concludes with a quantitative liberal programme: income tax ceilings (60% in isolation, 45% combined with wealth tax), inflation capped at 2-3% p.a., growth not below 6-7%, strict time-limits on physical controls, nationalisation confined to demonstrated failures of private enterprise, and political judgement to find the "golden mean." --- ## [Primary work] Embracing Corporate Social Responsibility URL: https://indianliberals.in/primary-works/embracing-csr-by-anu-a-aga-2003/ ### Summary Delivered as the 37th A. D. Shroff Memorial Lecture in Mumbai on 5 November 2003 and published by the Forum of Free Enterprise, Anu Aga's address makes a brisk, example-driven case for Corporate Social Responsibility as the 'saner alternative' to a narrow, profit-only conception of business. Aga frames CSR not as charity or PR but as a stewardship obligation that flows from the fact that companies draw their talent, customers and licence-to-operate from the wider community. She invokes Adam Smith (the author of A Theory of Moral Sentiments as well as The Wealth of Nations) and Gandhi's trusteeship model to argue that ethical conduct and commercial success have always been intertwined, and that the live question today is not whether but how CSR should be measured, audited and reported. The heart of the talk is a six-sided 'stakeholder hexagon'—customers, employees, shareholders and investors, environment and community, suppliers, and government—with the Board of Trustees at the centre balancing short-term shareholder interests against long-term stewardship.… ### Body ## Summary Delivered as the 37th A. D. Shroff Memorial Lecture in Mumbai on 5 November 2003 and published by the Forum of Free Enterprise, Anu Aga's address makes a brisk, example-driven case for Corporate Social Responsibility as the 'saner alternative' to a narrow, profit-only conception of business. Aga frames CSR not as charity or PR but as a stewardship obligation that flows from the fact that companies draw their talent, customers and licence-to-operate from the wider community. She invokes Adam Smith (the author of A Theory of Moral Sentiments as well as The Wealth of Nations) and Gandhi's trusteeship model to argue that ethical conduct and commercial success have always been intertwined, and that the live question today is not whether but how CSR should be measured, audited and reported. The heart of the talk is a six-sided 'stakeholder hexagon'—customers, employees, shareholders and investors, environment and community, suppliers, and government—with the Board of Trustees at the centre balancing short-term shareholder interests against long-term stewardship. Aga works through each face with international and Indian illustrations: Merck's free distribution of the river-blindness drug, Starbucks's low employee turnover, Brazil's Semco under Ricardo Semler (35–40% annual growth with an open work culture), Michael Porter's 'Green and Competitive' thesis, Nike's reluctant supply-chain reform after a sweatshop scandal, and Indian exemplars such as the Tatas at Jamshedpur, Godrej, the Birlas, and the NDDB's Operation Flood. A 1992 World Bank study, The Cost of Inaction, is cited to put Indian environmental damage at Rs 34,000 crores a year (4.5% of GDP). The political-economy register is recognisably classical-liberal: Aga thanks liberalisation for restoring the customer's 'no-confidence vote' that India's closed economy had suppressed, criticises Indian regulation as simultaneously over-prescriptive and unenforced (corrupt pollution inspectors, labour rules that push firms away from permanent hiring), and argues for a partnership model between government and business in place of the adversarial 'erring children to be chided' frame. The booklet's rendered pages cover the introduction by Minoo R. Shroff and Aga's address through the 'Government' section; the final stretch—Aga's specific recommendations for the Indian scene—lies in pages not rendered here. ## Key points - Frames CSR as a duty arising from the fact that companies draw talent, customers and resources from the community in which they operate, not as discretionary philanthropy. - Anchors the case in Adam Smith's Theory of Moral Sentiments and Gandhi's trusteeship doctrine to insist that ethics and capitalism are not in tension. - Proposes a six-sided stakeholder 'hexagon'—customers, employees, shareholders/investors, environment/community, suppliers, government—with the Board as steward balancing present and future interests. - Argues that liberalisation gave Indian customers the power to cast a 'no-confidence vote' that the closed economy had denied them, making CSR a competitive variable rather than a moralism. - Treats environmental neglect as a balance-sheet risk, citing the World Bank's 1992 'Cost of Inaction' study that pegged Indian environmental damage at Rs 34,000 crores—4.5% of GDP. - Holds up Merck (river-blindness drug), Starbucks (employee retention), and Brazil's Semco under Ricardo Semler as proof that CSR and profitability reinforce rather than cancel each other. - Reads Indian over-regulation as self-defeating: cheap non-functional pollution equipment plus bribed inspectors, and labour rules so onerous that firms avoid hiring permanent workers. - Calls for government and business to abandon the adversarial frame and act as 'mature adults' building a common, actionable agenda. --- ## [Primary work] EMERGING SCENARIO IN THE CAPITAL MARKET AND SEBI'S ROLE URL: https://indianliberals.in/primary-works/emerging-scenario-in-the-capital-markets-and-sebi-role-by-vh-pandya-august-14-1994/ ### Summary Delivered as a session at the Forum of Free Enterprise on 28 June 1994 and published shortly thereafter, V.H. Pandya's address surveys the Indian capital market in the third year of the 1991 economic reforms, written from the perspective of an insider — Pandya retired only days later as Senior Executive Director of the Securities and Exchange Board of India (SEBI). He situates the capital market within a transformed macroeconomy: an annual growth rate of about 5.5 percent through the 1980s, a domestic savings pool of roughly Rs. 1,750 billion, primary issuance leaping from around Rs. 90 crores a year in the late 1970s to Rs. 22,000 crores in 1993-94, market capitalisation rising from Rs. 6,750 crores in 1980 to over Rs. 340,000 crores in 1993-94, and the investor population swelling from about 2 million to around 40 million. The core of the pamphlet is a stocktaking of SEBI's regulatory architecture as it was being built.… ### Body ## Summary Delivered as a session at the Forum of Free Enterprise on 28 June 1994 and published shortly thereafter, V.H. Pandya's address surveys the Indian capital market in the third year of the 1991 economic reforms, written from the perspective of an insider — Pandya retired only days later as Senior Executive Director of the Securities and Exchange Board of India (SEBI). He situates the capital market within a transformed macroeconomy: an annual growth rate of about 5.5 percent through the 1980s, a domestic savings pool of roughly Rs. 1,750 billion, primary issuance leaping from around Rs. 90 crores a year in the late 1970s to Rs. 22,000 crores in 1993-94, market capitalisation rising from Rs. 6,750 crores in 1980 to over Rs. 340,000 crores in 1993-94, and the investor population swelling from about 2 million to around 40 million. The core of the pamphlet is a stocktaking of SEBI's regulatory architecture as it was being built. Pandya describes the Government's decision in February 1992 to give SEBI statutory recognition, the simultaneous repeal of the Capital Issues (Control) Act and removal of pricing controls, and SEBI's twin charter — investor protection as first priority and market development as second. He walks through the primary-market measures (registration and code of conduct for merchant bankers, underwriters, and registrars; redesigned prospectus formats; mandatory risk-factor disclosure; the abridged-prospectus Memorandum; the 'Stockinvest' instrument introduced in March 1992 to address allotment delays; rationalisation of promoters' contribution and reservations; firm-allotment and proportionate-allotment norms; Euro issues by way of GDRs and Euro-Convertibles totalling about US$ 2.5 billion by March 1994; Code of Advertisement and prudential norms for the now-15 Mutual Funds; registration of over 195 FIIs with about Rs. 6,000 crores invested). On the secondary market, Pandya describes the older, member-broker-dominated stock exchanges as 'inadequate, non transparent, hardly regulated and rarely geared for investor protection,' and reports SEBI's interventions: reconstitution of governing boards to give equal representation to non-broker public representatives, capital-adequacy norms for brokers, compulsory contract notes, weekly settlement cycles for non-specified scrips, regulation of broker-client relationships, and notification of insider-trading regulations under SCRA. He closes with a survey of investor-protection machinery — grievance redressal in conjunction with Investors' Associations and Consumer Fora, public representatives overseeing allotments, the March 1994 guidance series on Grey Market operations, and a planned TV/video Investor Education Programme — and a legislative review covering the Capital Issues (Control) Act 1947 (repealed 1992), the Securities Contracts (Regulation) Act 1956, and the SEBI Act 1992 itself, noting that SEBI has exclusive power over the primary market but only concurrent power over the secondary market and Companies Act matters. ## Key points - Frames India's post-1991 capital market within a transformed macroeconomy — 5.5 percent average annual growth in the 1980s, a domestic savings pool of about Rs. 1,750 billion, and a primary-issuance jump from Rs. 90 crores a year in the late 1970s to Rs. 22,000 crores in 1993-94. - Argues that primary and secondary markets are 'equally important while not being mutually exclusive': a vibrant primary market depends on a transparent and disciplined secondary market that supplies liquidity. - Locates SEBI's mandate in the Narasimham Committee-inspired financial-sector reforms, with statutory recognition granted in February 1992 alongside the abolition of the Capital Issues (Control) Act and pricing controls. - Describes SEBI's charter as investor protection first, market development second — and recounts how this drove the redesign of prospectus formats, mandatory risk-factor disclosures, the abridged Memorandum, and a Code of Conduct for merchant bankers, underwriters, and registrars. - Highlights the 'Stockinvest' instrument introduced in March 1992 to compensate investors for funds blocked by oversubscription under the earlier pricing-control regime. - Tracks the new institutional architecture — over 450 registered merchant bankers, 125+ registrars, 195+ FIIs investing about Rs. 6,000 crores, 15 mutual funds, 21 stock exchanges including the OTCEI and the National Stock Exchange, and Euro-market issuance of about US$ 2.5 billion by March 1994. - Diagnoses the legacy secondary market as 'inadequate, non transparent, hardly regulated and rarely geared for investor protection,' and outlines reconstitution of governing boards, capital-adequacy norms for brokers, compulsory contract notes, weekly settlement for non-specified scrips, and insider-trading regulations under SCRA. - Closes with a legislative map (Capital Issues (Control) Act 1947 repealed in May 1992; Securities Contracts (Regulation) Act 1956; SEBI Act 1992) and notes the asymmetry that SEBI has exclusive power over the primary market but only concurrent power over the secondary market and Companies Act matters. --- ## [Primary work] Ending Hunger Through Sustainable Development URL: https://indianliberals.in/primary-works/ending-hunger-through-sustainable-development-by-maurice-f-strong-november-14-1989/ ### Summary Maurice F. Strong's lecture — delivered as the Third Annual Arturo Tanco Memorial Lecture in Tokyo on 6 April 1989 and republished by the Forum of Free Enterprise — argues that the eradication of hunger cannot be separated from the broader project of sustainable development. Drawing on his work as the first head of UNEP and as a member of the Brundtland Commission, Strong frames the late twentieth-century food problem not as a Malthusian shortfall but as a crisis of access, distribution, and ecological capital: the world has been 'literally living off the Earth's capital', and that capital is now seriously depleted. Despite the spectacular surplus production of 1950–1984 and a 300 per cent rise in Indian output under the Green Revolution, more than a hundred countries have become structurally dependent on North American grain, and Africa and Latin America have slid from self-sufficiency into deficit. The lecture's core argument is that sustainable food security must be built at three levels simultaneously — aggregate world supply, national access, and household-level command over food — and that each requires market-conscious policy and ecological literacy together.… ### Body ## Summary Maurice F. Strong's lecture — delivered as the Third Annual Arturo Tanco Memorial Lecture in Tokyo on 6 April 1989 and republished by the Forum of Free Enterprise — argues that the eradication of hunger cannot be separated from the broader project of sustainable development. Drawing on his work as the first head of UNEP and as a member of the Brundtland Commission, Strong frames the late twentieth-century food problem not as a Malthusian shortfall but as a crisis of access, distribution, and ecological capital: the world has been 'literally living off the Earth's capital', and that capital is now seriously depleted. Despite the spectacular surplus production of 1950–1984 and a 300 per cent rise in Indian output under the Green Revolution, more than a hundred countries have become structurally dependent on North American grain, and Africa and Latin America have slid from self-sufficiency into deficit. The lecture's core argument is that sustainable food security must be built at three levels simultaneously — aggregate world supply, national access, and household-level command over food — and that each requires market-conscious policy and ecological literacy together. Strong is sharply critical of the long-standing tendency of developing-country governments to suppress food prices for urban consumers at the expense of farmer incentives, and he attacks the institutional neglect of the small farmer. Cash-crop colonial legacies, energy-intensive agriculture made uneconomic by oil shocks, the erosion of soil and watersheds, accelerating land degradation through desertification and salination, and the looming politics of water scarcity all converge, he argues, on a single recommendation: a synthesis of traditional and modern practice anchored in the productive capacity of small farmers. Much of the booklet is given over to concrete case studies of community-led sustainability — two villages in the Indian Himalayan foothills supported by the Soil and Water Conservation Research and Training Centre, the Forest Department, and the Ford Foundation; an integrated health-and-watershed programme in rural Nepal; a settled Nomad community in northern Mali; agro-forestry extension reaching 110,000 Haitian farmers; and a peasant cooperative revival in Talamanca, Costa Rica with which Strong was personally involved. From these examples he distils an emerging 'Agenda for Sustainable Development' grounded in equity, decentralised leadership, market-oriented agricultural pricing, and a strengthened research-and-extension chain — beginning, in the rendered pages, with calls for stronger national agricultural research linked to the CGIAR system, better extension services, and farmer participation in improved-seed programmes. ## Key points - Recasts hunger as a question of access and ecological capital rather than aggregate Malthusian scarcity, citing the Brundtland Commission's definition of sustainable development. - Identifies three simultaneous requirements for sustainable food security: sufficient world production, national access, and household-level means to acquire food. - Documents how the 1950–1984 surplus era, the Green Revolution (notably a 300 per cent increase in Indian food production), and Western/North American grain dominance have left over 100 countries chronically import-dependent. - Attacks the systematic suppression of farm-gate food prices in developing countries — which subsidises urban consumers while squeezing peasant producers — as a principal cause of stagnating food production. - Argues that high-energy, chemical-intensive agriculture became uneconomic after the oil shocks and that future productivity gains require a synthesis of traditional energy-efficient methods with modern technique. - Frames water as the next strategic resource conflict, predicting that water could 'become more important than oil as a source of conflict in the Middle East within the next decade'. - Showcases small-farmer-led sustainability projects in the Indian Himalayas, Nepal, Mali, Haiti, and Costa Rica as evidence that locally driven, externally supported initiatives can reconcile production growth with ecological repair. - Opens a policy agenda for sustainable development beginning with trade and exchange-rate neutrality toward agriculture, market-oriented pricing for farm products, stronger national research linked to CGIAR institutes, and farmer-inclusive extension and seed programmes. --- ## [Primary work] Energy Security Policy URL: https://indianliberals.in/primary-works/energy-security-policy-by-ma-pathan-2005/ ### Summary M. A. Pathan's Energy Security Policy is a Forum of Free Enterprise booklet adapted from his 10 December 2005 presentation at the J. R. D. Tata Memorial Seminar (organised in Mumbai by the Leslie Sawhny Endowment). Pathan, then Group Resident Director of Tata Services and formerly Chairman of Indian Oil Corporation (1997-2002), surveys the global energy outlook — worldwide consumption nearly doubled over the previous 35-40 years, fossil fuels will continue to dominate the mix, and demand from emerging economies (especially India, where GDP was growing above 8%) is set to balloon. Citing the International Energy Outlook 2005, he projects world energy use rising from 412 quadrillion Btu in 2002 to 645 quadrillion Btu in 2025, with oil prices climbing from US $10.29/barrel in 1998 to over US $65/barrel in 2005 and the International Energy Agency estimating that $17,000 billion of investment is required globally by 2030. The booklet's argumentative spine is that energy security must rest on two principles: minimising the energy needed to deliver services, and securing diverse access to supply and technology.… ### Body ## Summary M. A. Pathan's Energy Security Policy is a Forum of Free Enterprise booklet adapted from his 10 December 2005 presentation at the J. R. D. Tata Memorial Seminar (organised in Mumbai by the Leslie Sawhny Endowment). Pathan, then Group Resident Director of Tata Services and formerly Chairman of Indian Oil Corporation (1997-2002), surveys the global energy outlook — worldwide consumption nearly doubled over the previous 35-40 years, fossil fuels will continue to dominate the mix, and demand from emerging economies (especially India, where GDP was growing above 8%) is set to balloon. Citing the International Energy Outlook 2005, he projects world energy use rising from 412 quadrillion Btu in 2002 to 645 quadrillion Btu in 2025, with oil prices climbing from US $10.29/barrel in 1998 to over US $65/barrel in 2005 and the International Energy Agency estimating that $17,000 billion of investment is required globally by 2030. The booklet's argumentative spine is that energy security must rest on two principles: minimising the energy needed to deliver services, and securing diverse access to supply and technology. India, with 17% of the world's population but only 0.8% of known oil and gas, imports over 70% of its crude and is acutely exposed — a US $10 rise in oil price knocks roughly 1% off GDP and adds 2.6 percentage points to inflation. Pathan calls for an Energy Vision 2050 building on the existing Hydrocarbon Vision 2025, the consolidation of oil, gas, coal, power, renewables and nuclear under a comprehensive Ministry of Energy, the creation of strategic reserves, a separate Asian benchmark crude, and aggressive equity-oil investment abroad (citing ONGC Videsh, GAIL, OIL and the new ONGC-Mittal company). On the demand side he is unambiguously a price-and-incentives liberal: subsidised and free power to agriculture is condemned as "large scale wastages" that lull users into profligacy, while fiscal incentives, standards-and-labelling, benchmarking, building codes and time-of-day metering are urged to drive efficiency. India's energy intensity, he notes, is 2.88 times that of rich countries. On supply, he advocates coal gasification with carbon sequestration, coal-bed methane, gas-to-liquid technology, thorium-based nuclear reactors, biomass and bagasse co-generation, Jatropha-based bio-diesel on India's 30 million hectares of available wasteland, ethanol blending, and the National Hydrogen Energy Roadmap (then just presented by Ratan Tata, chairman of the Steering Group on Hydrogen Energy). The closing pages tie energy security to tariff design, an Oil Price Stabilisation Fund, defence postures protecting maritime routes and foreign policy — and insist that national energy policy must be "depoliticized" if it is to deliver in the long term. ## Key points - Pathan frames energy security around two principles: minimising energy needed to deliver services, and securing diverse, affordable, sustainable access to supply and technology. - India's exposure is structural — 17% of world population but 0.8% of known oil and gas, with crude imports already above 70% of requirement and projected to exceed 85% within two decades. - A $10/barrel oil price increase cuts Indian GDP by roughly 1% and adds about 2.6 percentage points to inflation, anchoring the booklet's macroeconomic case for energy security. - He calls for an Energy Vision 2050 extending the Hydrocarbon Vision 2025, a comprehensive Ministry of Energy unifying oil, gas, coal, power, renewables and nuclear, and a strategic petroleum reserve. - Subsidised and free power — especially to agriculture — is sharply criticised as encouraging profligacy; market-aligned tariffs, time-of-day pricing, standards-and-labelling, and fiscal incentives are urged in its place. - Supply-side diversification is multi-pronged: coal gasification with carbon sequestration, coal-bed methane, gas-to-liquid, thorium reactors and fusion R&D, Jatropha bio-diesel on 30 million hectares of wasteland, ethanol blending, and the National Hydrogen Energy Roadmap. - Regional integration is central — Asian benchmark crude, gas pipelines from Myanmar/Bangladesh/Turkmenistan/Iran, diesel exports to Pakistan, equity stakes in Sri Lanka, and overseas equity-oil acquisitions by ONGC Videsh, GAIL, OIL and the new ONGC-Mittal vehicle. - Energy security must reshape adjacent policy domains — tariff and tax structure, defence (maritime route protection), foreign policy, and an Oil Price Stabilisation Fund — and must be 'depoliticized' for durable effect. --- ## [Primary work] ENLIST CO-OPERATION OF PRIVATE ENTERPRISE URL: https://indianliberals.in/primary-works/enlist-cooperation-of-pvt-enterprise-sir-b-rama-rau-aug7-1959/ ### Summary Sir B. Rama Rau's short address to the Rotary Club of Bombay (June 23, 1959), published as a Forum of Free Enterprise booklet, opens with a diagnosis of India's Parliamentary system: the absence of an effective democratic opposition has bred a public culture in which 'even honest businessmen, who have to depend on Government for licences and concessions in a rigidly controlled economy' are afraid to speak publicly on wider political issues, and the Press has only lately found its voice. He treats this nervousness as 'characteristic of a developing totalitarian regime' that only a serious opposition can cure.… ### Body ## Summary Sir B. Rama Rau's short address to the Rotary Club of Bombay (June 23, 1959), published as a Forum of Free Enterprise booklet, opens with a diagnosis of India's Parliamentary system: the absence of an effective democratic opposition has bred a public culture in which 'even honest businessmen, who have to depend on Government for licences and concessions in a rigidly controlled economy' are afraid to speak publicly on wider political issues, and the Press has only lately found its voice. He treats this nervousness as 'characteristic of a developing totalitarian regime' that only a serious opposition can cure. From this opening he welcomes Rajagopalachari's announcement of a new independent democratic party (with Jayaprakash Narayan's qualified blessing and Nehru's recognition that constructive criticism would serve Congress), and positions himself as a detached observer of recent economic and political developments. He credits the Congress with substantial achievements: the secular handling of Hindu–Muslim relations after Partition, the integration of the princely states, foreign-policy non-alignment, and a fiscal-and-monetary stance — 'Development with Stability' — praised by the World Bank and the IMF, with a stable banking system and rapid expansion of banking facilities laying the ground for industrial growth. But he turns sharply against the Avadi formulation of a 'Socialistic Pattern of Society', calling it vague and nebulous, and argues that the Beveridge-style Welfare State that Congress invokes has, in fact, been substantially built in Britain, the United States, and Erhard's West Germany 'without any departure from' capitalist and individualistic foundations, by giving 'the fullest encouragement to private enterprise and the competitive principle'. The capitalism Karl Marx attacked, on his reading, no longer exists in the older democracies; socialism has receded to the background. In the closing pages he addresses the Congress's lingering suspicion of the private sector. Profit, he insists, is not the worst appetite in public life — 'there is something worse than craving for profits, and that is craving for power' — and the politician's power, unlike the businessman's profit, is hard to tax or restrain, especially when dressed in austerity or patriotism. The cure is co-operation: the idealism of the politician married to 'the enterprise, the creative urge, the practical outlook and the organising capacity' of private industry. He uses the prohibition policy, with a reported annual revenue loss of a crore of rupees and ten thousand teachers' worth of forgone employment, as a case of Congress pursuing 'quick results' through constitutional directive without weighing administrative feasibility. Finally, anticipating Nehru's eventual retirement and the consequent splintering of Congress, he urges the immediate organisation of a progressive democratic opposition lest the Communists capture government, arguing that even short of victory such a party would do the country a great service by forcing Congress 'to concentrate on practical programmes rather than on slogans'. ## Key points - Frames the absence of an effective democratic opposition as the central pathology of post-independence India, with businessmen silenced by their dependence on Government licences in a 'rigidly controlled economy'. - Welcomes Rajagopalachari's announcement of a new independent democratic party; cites Jayaprakash Narayan's qualified blessing and Nehru's recognition that constructive opposition would benefit Congress. - Credits the Congress with the secular handling of Partition, integration of the princely states, foreign-policy non-alignment, and a 'Development with Stability' macro-policy praised by the World Bank and IMF. - Attacks the Avadi 'Socialistic Pattern of Society' as 'vague and nebulous', arguing Western Welfare States in Britain, the United States and Erhard's West Germany were built without departing from capitalist and individualist foundations. - Reads Karl Marx's nineteenth-century capitalism as defunct: the democratic Welfare State has absorbed its critiques without revolution, and the concept of socialism has receded to the background. - Rejects Congress moralism against the 'profit motive', insisting the politician's craving for power is the more dangerous appetite and far harder to curb than profit. - Uses prohibition (annual revenue loss of one crore of rupees, employment forgone for ten thousand teachers) as a worked example of Congress prioritising slogans over administrative feasibility. - Warns that Nehru's eventual retirement will splinter Congress and open the door for the Communists, making the immediate organisation of a progressive democratic opposition imperative. --- ## [Primary work] EQUITY IN A GLOBAL SOCIETY URL: https://indianliberals.in/primary-works/equity-in-a-global-society-by-dr-ig-patel-january-february-17-1996/ ### Summary Equity in a Global Society reproduces the LSE Centenary Lecture that Dr. I. G. Patel — a former Governor of the Reserve Bank of India and former Director of the London School of Economics — delivered on 26 October 1995, here published as a Forum of Free Enterprise pamphlet. Patel uses the occasion to defend an unfashionable position: that social science cannot quarantine itself from value judgements, and that the emerging global society must be appraised against an explicit standard. He nominates 'equity' as that standard, defining it not as equality but as balance — between individual rights and group obligations, between tradition and reason, between what is desirable and what is achievable. From this premise Patel attacks the methodological prudery of the LSE economics he was once taught: the refusal to make interpersonal comparisons of utility. A dollar in the pocket of a Malawian peasant, he insists, is worth more than one in his own, and any honest economics must accept that and reason accordingly.… ### Body ## Summary Equity in a Global Society reproduces the LSE Centenary Lecture that Dr. I. G. Patel — a former Governor of the Reserve Bank of India and former Director of the London School of Economics — delivered on 26 October 1995, here published as a Forum of Free Enterprise pamphlet. Patel uses the occasion to defend an unfashionable position: that social science cannot quarantine itself from value judgements, and that the emerging global society must be appraised against an explicit standard. He nominates 'equity' as that standard, defining it not as equality but as balance — between individual rights and group obligations, between tradition and reason, between what is desirable and what is achievable. From this premise Patel attacks the methodological prudery of the LSE economics he was once taught: the refusal to make interpersonal comparisons of utility. A dollar in the pocket of a Malawian peasant, he insists, is worth more than one in his own, and any honest economics must accept that and reason accordingly. The lecture then maps the institutional scaffolding of the global society already in place — the UN system, WHO, FAO, the World Bank, IMF, the new WTO and the dense lattice of voluntary organisations — and argues these can no longer be wished away, only made more effective and equitable. In the rendered pages Patel lays out five urgent problems for the next century: the legitimacy of individual and group rights vis-à-vis the global society; equity in the governance of international institutions; equity in international economic relations; equity and global environmental protection; and the matching of responsibilities with resources at the global level. He works through the first three economic issues here. On macroeconomic management he declares both Keynesian and Monetarist certainties dead and argues for reviving 'less fashionable' tools such as incomes policies and selective controls. On trade and unemployment he defends the open trade regime that built Korea, Taiwan, Thailand and Malaysia and dismisses Northern protectionism dressed up as moral concern about labour or environmental standards. On poverty and aid he calls for developed-country aid budgets to be doubled to the 0.7% of national income target and frames the redistributive case through the parable of 'the accident of birth' — that no one earns the country they are born in, and the accumulated wealth of Sweden or a rich Indian family is not, by any honest reckoning, theirs alone. ## Key points - Patel argues that social sciences cannot exclude value judgements: every society — and the global society in particular — must be shaped against an explicit set of values and standards. - He chooses 'equity' as the master value, defining it as balance: between rights and obligations, tradition and reason, the desirable and the achievable, rather than mere equality of outcome. - He attacks the LSE-trained orthodoxy that interpersonal utility comparisons are impossible, insisting an extra dollar to a poor Malawian peasant is worth far more than one to a rich Westerner. - Patel maps the de facto institutional architecture of the global society — UN, ILO, WHO, FAO, IMF, World Bank, the new WTO and the NGO network — and argues these institutions can only be reformed, not wished away. - He sets out five urgent problems for the next century: legitimacy of individual and group rights, governance of international institutions, international economic relations, global environmental protection, and matching responsibilities with resources at the global level. - On macroeconomics he declares both Keynesian and Monetarist certainties exhausted, and urges reconsidering 'less fashionable' instruments like incomes policies, selective controls and modest redistribution. - He defends the open trade regime that lifted Korea, Taiwan, Thailand and Malaysia, and rejects Northern protectionism dressed up as concern about foreign wages or environmental standards. - On poverty and aid he calls for developed-country aid budgets to be doubled toward the 0.7% of national income target, framing redistribution through the parable that 'the accident of birth' gives no one an inherent moral claim to inherited national wealth. --- ## [Primary work] Essays by Foreign Economists URL: https://indianliberals.in/primary-works/essays-by-foreign-economists-august-1971/ ### Summary Essays by Foreign Economists is a compilation published in August 1971 by the Forum of Free Enterprise, Bombay (M. R. Pai, publisher), gathering twelve booklets the Forum had previously issued; the volume is explicitly marked 'not for sale' and circulated only to Forum members. In the rendered pages, the table of contents lists pieces by Milton Friedman, B. A. Tarlton, F. A. Hayek, G. Carl Wiegand, W. H. Hutt, Colin Clark (two essays), P. T. Bauer (three essays), Dudley Dillard, and Eugene Black, addressing the case for free enterprise, the failings of central planning, the conditions for economic growth, foreign aid, the economic thinking of Keynes, and the place of India's private sector. The chunk contains the full text of Friedman's opening essay 'Myths That Keep People Hungry' (reprinted from Harper's Magazine, April 1967), which sets the polemical frame for the volume by contrasting countries where private markets organise economic life with those subject to detailed central planning, and the opening pages of B. A. Tarlton's 1968 Calcutta lecture 'Economic Democracy'. ### Body ## Summary Essays by Foreign Economists is a compilation published in August 1971 by the Forum of Free Enterprise, Bombay (M. R. Pai, publisher), gathering twelve booklets the Forum had previously issued; the volume is explicitly marked 'not for sale' and circulated only to Forum members. In the rendered pages, the table of contents lists pieces by Milton Friedman, B. A. Tarlton, F. A. Hayek, G. Carl Wiegand, W. H. Hutt, Colin Clark (two essays), P. T. Bauer (three essays), Dudley Dillard, and Eugene Black, addressing the case for free enterprise, the failings of central planning, the conditions for economic growth, foreign aid, the economic thinking of Keynes, and the place of India's private sector. The chunk contains the full text of Friedman's opening essay 'Myths That Keep People Hungry' (reprinted from Harper's Magazine, April 1967), which sets the polemical frame for the volume by contrasting countries where private markets organise economic life with those subject to detailed central planning, and the opening pages of B. A. Tarlton's 1968 Calcutta lecture 'Economic Democracy'. ## Essays ### Myths that keep People Hungry *By By Prof. Milton Friedman* Drawing on a year-long journey with his wife through Eastern Europe, the Middle East and the Far East, Friedman lays out, in the rendered pages, the central contention that wherever private markets organise economic activity ordinary people enjoy material progress and personal freedom, and wherever the state controls economic life in detail the ordinary citizen becomes 'an instrument to be used for the state's purpose'. He walks the reader through a chain of comparisons — West and East Germany, Israel and Egypt, Singapore and Indonesia, Malaya and India, Yugoslavia and Russia — to argue that the difference in outcomes reflects the difference in economic organisation rather than resources or culture. The heart of the essay in the rendered pages is a sustained contrast between Japan after the 1868 Meiji restoration, which Friedman reads as a broadly free-market case that absorbed foreign techniques without depending on foreign aid, and India after 1948, which he reads as a case of Fabian socialism and detailed central planning that has frustrated initiative and impoverished the ordinary villager. He closes the essay with a warning that the climate of opinion hostile to markets — transmitted from the affluent West to the less-developed nations — may doom mankind 'to a renewed era of universal tyranny and misery'. - In the rendered pages Friedman organises the essay around a personal observation: wherever he found individual freedom and rising material welfare he also found private markets, and wherever central planning prevailed the ordinary man was 'in political fetters' and had a low standard of living. - He cites West Germany, Israel, Singapore, Malaya and post-Meiji Japan as cases of market-led progress, and contrasts them with East Germany, Egypt, Indonesia, post-Independence India, Yugoslavia and Russia. - A statistical anchor for the essay is that in the Soviet Union only 3 per cent of cultivated land is in private plots whose produce may be marketed privately, yet this 3 per cent produces one-third of total agricultural output. - Friedman reads Japan after 1868 and India after 1948 as a controlled experiment: both faced major political change and rigid class relations, but Japan followed a broadly free-market policy modelled on Britain while India followed Fabian-socialist central planning, with sharply divergent results. - Examples of waste under Indian controls include the prohibition of new car production, which forced wealthy buyers to pay around $1,500 for a 1950 Buick, and the substitution of bureaucratic 'procurement' for market exchange in cotton. - He closes by warning that the prevailing climate of opinion hostile to market arrangements, transmitted from the affluent West to less-developed nations, may consign mankind to 'a renewed era of universal tyranny and misery'. ### Economic Democracy *By By B. A. Tarlton* Tarlton, an economist with the Associated Chambers of Commerce and Industries in Calcutta, opens his 1968 lecture by taking stock of India's mood after two decades of planning. In the rendered pages he notes that the 'sunlit plateaus of prosperity' once promised by the politicians have given way to disillusion: average living standards have not significantly improved, unemployment and the foreign trade deficit have risen, and India, a net international creditor of over Rs. 700 crores at the start of the Second Five Year Plan in 1956, had become a net international debtor of over Rs. 5,000 crores by 1968. The Planning Commission, he observes, has been cut down in size and confined to advisory functions, and the Fourth Plan shelved for three years. In the rendered pages he then begins to interrogate the title concept, distinguishing a 'classical' conception of democracy — rule by the 'demos' or common people, traceable to Plato and Aristotle and compatible with class dictatorship — from a 'liberal' conception that has emerged only over the past two or three hundred years and rests on equal political authority for every citizen and a principle of self-rule. The chunk ends mid-argument, with Tarlton starting to lay out the implications of this distinction for India's economic policy. - Tarlton frames the lecture against India's prevailing 'mood of doubt and pessimism' after two decades of central planning. - He marshals headline numbers in the rendered pages: India shifted from a net international creditor of over Rs. 700 crores in 1956 to a net debtor of over Rs. 5,000 crores by 1968 at the post-devaluation level. - He notes that the Planning Commission has been cut down in size and confined to advisory functions, while the Fourth Plan has been shelved for three years. - Using the Cotton Control Order as an example, he argues that government 'procurement' is in substance compulsory requisitioning at fixed prices. - He distinguishes a 'classical' conception of democracy as rule by the 'common people' (traceable to Plato and Aristotle, compatible with the dictatorship of the proletariat in modern China and the Soviet Union) from a 'liberal' conception of self-rule by equal citizens that has emerged only in the past two or three hundred years. --- ## [Primary work] Ethics in Business and Management URL: https://indianliberals.in/primary-works/ethics-in-business-management-d-veerendra-heggade/ ### Summary Ethics in Business and Management collects the text of the 9th Bhogilal Leherchand Memorial Lecture, delivered by D. Veerendra Heggade — the Dharmadhikari (hereditary religious head) of Sri Kshetra Dharmasthala in Karnataka — in Mumbai on 7 January 1998 and presided over by Nani A. Palkhivala. Published as a booklet by the Forum of Free Enterprise, the address asks whether the term 'Ethics' retains any meaning in a modern world enthralled by money, technology and unlimited consumption, and answers by drawing the management vocabulary back to dharmic categories: Artha, Kama, Moksha, and above all Dharma as a restraining force on the acquisition of wealth. Heggade builds his argument in successive sections — 'Nature—the Best Manager', 'Problems of Parigraha', 'Present Condition', 'A Way Out', 'Dharmasthala Model' and a closing 'Message'. He contrasts the natural restraint embedded in Vedic and Upanishadic ethics (Apariraha, Samyama, Vasudhaiva Kutumbakam) with the 'TINA syndrome' and 'MAD' — Mutually Aided Destruction — that he sees in the science-and-technology-driven business order, in the hands of MNCs and TNCs.… ### Body ## Summary Ethics in Business and Management collects the text of the 9th Bhogilal Leherchand Memorial Lecture, delivered by D. Veerendra Heggade — the Dharmadhikari (hereditary religious head) of Sri Kshetra Dharmasthala in Karnataka — in Mumbai on 7 January 1998 and presided over by Nani A. Palkhivala. Published as a booklet by the Forum of Free Enterprise, the address asks whether the term 'Ethics' retains any meaning in a modern world enthralled by money, technology and unlimited consumption, and answers by drawing the management vocabulary back to dharmic categories: Artha, Kama, Moksha, and above all Dharma as a restraining force on the acquisition of wealth. Heggade builds his argument in successive sections — 'Nature—the Best Manager', 'Problems of Parigraha', 'Present Condition', 'A Way Out', 'Dharmasthala Model' and a closing 'Message'. He contrasts the natural restraint embedded in Vedic and Upanishadic ethics (Apariraha, Samyama, Vasudhaiva Kutumbakam) with the 'TINA syndrome' and 'MAD' — Mutually Aided Destruction — that he sees in the science-and-technology-driven business order, in the hands of MNCs and TNCs. He singles out cigarette companies as 'global traders of death' whose CEOs win Best Manager awards, condemns the vulgarity of TV advertising for liquor and condoms aired during cricket broadcasts, and notes that around 40% of executives suffer psychosomatic illness from the resulting moral-emotional dichotomy. Against this, he offers the Dharmasthala temple administration as a working model of accountability: every Sanskramana day the Heggade must answer to the Dharma Devathas for the previous month's performance, with instant punishment for intentional lapses. He invokes Kautilya's Artha Shastra on yoga-kshema, the maxim 'yatha raja, thatha Praja', and the image of Rama with bow and arrow (Rama Bana) as warnings to political and business leaders who escape the fear of Danda. The lecture closes with a plea against Charvaka-style hedonism and a call for management institutes to produce 'Indianised, Indian value-based management experts' modelled on Koutilya and Manu rather than on imported American or Japanese systems. ## Key points - The booklet is the published text of the 9th Bhogilal Leherchand Memorial Lecture, delivered by Dharmasthala's Dharmadhikari D. Veerendra Heggade in Mumbai on 7 January 1998 under the chairmanship of Nani A. Palkhivala. - Heggade frames ethics through Indian categories — Niti, Prakriti, Samskriti, and the four Purusharthas (Dharma, Artha, Kama, Moksha) — arguing that ancient wisdom blessed earning but bound it by Apariraha (non-acquisitiveness) and Samyama (restraint). - He warns that science and technology in the hands of MNCs and TNCs have produced a 'TINA syndrome' and 'MAD' (Mutually Aided Destruction), exemplified by tobacco companies that he calls 'global traders of death' whose CEOs receive Best Manager awards. - Cultural critique targets cricket telecasts carrying liquor and condom advertisements, vulgarity in TV ads, the displacement of cottage industries by urban-marketed goods, and the loss of contentment in villages once exposed to TV. - The 'Dharmasthala Model' is offered as evidence that authority, responsibility, accountability and transparency were already embedded in temple administration — with the Heggade himself answerable monthly to the Dharma Devathas and silent (not oral) acceptance of lapses. - He invokes Kautilya's Artha Shastra on yoga-kshema ('In the happiness of the subjects lies the happiness of the king'), the principle 'yatha raja, thatha Praja', and the Rama Bana as a symbol of Danda that politicians no longer fear. - The closing 'Message' rejects Charvaka materialism and urges management institutes to produce graduates trained in Indian value-based management drawing on Koutilya and Manu rather than imitating American or Japanese systems. - Front-matter pairs the lecture with an A.D. Shroff aphorism on free enterprise, and the back cover with a Eugene Black quotation framing private enterprise as 'an affirmative good' — situating the address within the Forum of Free Enterprise's wider pedagogic project. --- ## [Primary work] European Common Market & India URL: https://indianliberals.in/primary-works/european-common-market-and-india-dr-hannan-ezekiel-feb5-1962/ ### Summary This Forum of Free Enterprise booklet reproduces a symposium held in Bombay on 3 November 1961 on the implications of the European Common Market (ECM) for India. Three speakers — Dr. Hannan Ezekiel (Financial Editor, Economic Times), C. K. Narayanaswami (Assistant Editor, Free Press Journal), and Prof. C. L. Gheevala (Secretary, Indian Merchants' Chamber) — assess what Britain's anticipated entry into the European Economic Community would mean for Indian exports, the Commonwealth preference regime, and India's wider development strategy. A brief editorial introduction (drawn from a Deutsche Bank publication on the European Economic Community) summarises the Treaty of Rome's customs-union, social-policy and capital-mobility provisions and prints a 1959 chart comparing the Six with the USA and the USSR on population, steel, electricity, vehicles and external trade. Across the three contributions the speakers diverge in tone but converge on a single editorial line: Britain's accession is essentially inevitable, India will lose some Commonwealth preferences, and the right response is internal economic discipline, faster industrialisation and a search for new markets — not protest ag… ### Body ## Summary This Forum of Free Enterprise booklet reproduces a symposium held in Bombay on 3 November 1961 on the implications of the European Common Market (ECM) for India. Three speakers — Dr. Hannan Ezekiel (Financial Editor, Economic Times), C. K. Narayanaswami (Assistant Editor, Free Press Journal), and Prof. C. L. Gheevala (Secretary, Indian Merchants' Chamber) — assess what Britain's anticipated entry into the European Economic Community would mean for Indian exports, the Commonwealth preference regime, and India's wider development strategy. A brief editorial introduction (drawn from a Deutsche Bank publication on the European Economic Community) summarises the Treaty of Rome's customs-union, social-policy and capital-mobility provisions and prints a 1959 chart comparing the Six with the USA and the USSR on population, steel, electricity, vehicles and external trade. Across the three contributions the speakers diverge in tone but converge on a single editorial line: Britain's accession is essentially inevitable, India will lose some Commonwealth preferences, and the right response is internal economic discipline, faster industrialisation and a search for new markets — not protest against Europe. Ezekiel reads British entry as 'a very good idea' that will pull world trade toward the more liberal policies championed by the Kennedy administration and the Economic Commission for Europe. Narayanaswami warns against treating Britain as a betrayer and urges India to develop its own immense domestic market and, in the longer run, to build an Afro-Asian common market alongside African and Asian neighbours. Gheevala concentrates on foreign-exchange and competitiveness implications, documents India's heavy export dependence on the UK and the Six (around 35% of total exports combined), and argues that the country's high-cost, inflation-prone economy under defective planning must be reformed if India is to meet the slogan he calls operative: 'Export or stagnate'. ## Essays ### I. [Dr. Hannan Ezekiel] *By Dr. Hannan Ezekiel* Ezekiel opens the symposium by laying out the structural facts of the European Common Market and the three possible futures Britain faces: staying with the Commonwealth, joining the Common Market, or developing the European Free Trade Association. He explains that the Rome Treaty establishes a real free-trade area among the Six — backed by a common external tariff set as a weighted average of member duties — and that Britain's accession would replace Commonwealth preferences with that common tariff for Indian goods unless specific exceptions are negotiated. He concedes that textile exports, where India currently enjoys around a 17 per cent preference, would be among the most exposed. Against the static loss-counting that dominated the Indian reaction, Ezekiel insists on a dynamic reading: if British entry accelerates European growth, the expanding market will more than compensate for lost preferences. He frames Britain's accession as 'a very good idea' precisely because it pulls Europe — and through Europe, world trade policy — toward the more liberal external-tariff and import regime now being pressed by the Economic Commission for Europe and endorsed by the Kennedy administration. The essay closes by linking the Common Market debate to the wider Western swing in favour of trade-led help to underdeveloped countries. - Lays out the Rome Treaty's twelve-year, three-stage timetable for creating a customs union and a common external tariff among the Six, with internal duties progressively eliminated. - Walks through three scenarios for Britain — remaining with the Commonwealth, joining the Common Market, or building up the European Free Trade Association — and the differing implications of each for Indian exports. - Identifies textiles and cotton as the Indian export categories most exposed if Commonwealth preferences (around 17 per cent over the Common Market) are extinguished by Britain's accession. - Rejects a purely static analysis of preference loss in favour of a dynamic reading in which faster European growth from a wider market enlarges the absolute demand for Indian goods. - Cites the Kennedy administration's backing of the Economic Commission for Europe's call for more liberal external tariffs and import policies favourable to underdeveloped countries as evidence that British entry will reinforce a global liberal swing. ### II. [C. K. Narayanaswami] *By C. K. Narayanaswami* Narayanaswami situates the Common Market historically — from the Council of Europe statute signed in London in May 1949 through the European Coal and Steel Community (1950–51), Euratom and the Treaty of Rome (1957) — and reminds the audience that Britain originally scoffed at the project before changing course as the European Free Trade Association proved a thinner instrument. He stresses that the ECM is not purely an economic arrangement: its main animating force is political, an effort by Western European states to consolidate against the Soviet bloc and, in the process, raise their own standards of living. For India, Narayanaswami refuses both fatalism and grievance. He concedes that Britain's accession will cost India some preferences, particularly in textiles and other protected items, but argues that calling Britain a betrayer is unworthy and beside the point. The honourable response is to turn inward: develop the country's vast potential domestic market, lift mass purchasing power through better planning, and look outward to Africa and Asia for new trading partners and even an Afro-Asian common market. He cites a Ford Foundation study that judged India's domestic market to be one of the largest potential markets in the world, capable of producing 'perhaps the greatest industrial revolution ever seen' if cities and villages were developed together. - Traces the ECM's institutional lineage from the Council of Europe (1949) through the European Coal and Steel Community to Euratom and the Treaty of Rome (1957). - Argues that the principal force behind the Community is political — Western European consolidation against the powerful might of the Soviet bloc — and that Britain's earlier dismissal has given way to inevitable accession. - Rejects the framing of Britain as betraying India, treating preference loss as a survival problem for the UK rather than an act of hostility toward the Commonwealth. - Urges India to develop its enormous domestic market and to combine with African and Asian neighbours to evolve an Afro-Asian trade mechanism rather than seek charity from Europe. - Cites a Ford Foundation team's verdict that India's market is one of the largest potential domestic markets in the world and could stimulate a sweeping industrial revolution if developed across both cities and villages. ### III. [Prof. C. L. Gheevala] *By Prof. C. L. Gheevala* Gheevala treats Britain's accession to the ECM as a 'compulsion' the UK cannot avoid: with the Empire dissolved and Soviet pressure mounting, splendid isolation is no longer available. He argues that the EEC is at bottom a regional response to post-war European problems and must be viewed in that broader political-economic frame. For India the relevant question is foreign-exchange capacity: the UK accounts for roughly 27 per cent of Indian exports, the rest of the Common Market countries another 8 per cent, and the loss of about one-fifth of UK trade is a realistic risk if no concessions are negotiated. He rejects the language of charity in favour of enlightened self-interest. India must offer the Common Market goods and capital equipment that buyers actually want, on commercial terms, and use the proceeds to finance the imports its development plans require. The deeper problem, he argues, is internal: defective planning has produced a high-cost, inflation-prone economy whose products struggle in foreign markets. Unless India confronts the inflationary pressures generated by its own development pattern, it will fail to meet the challenge posed by Britain's entry into the ECM. He distils the choice in a slogan: 'Export or stagnate.' - Frames Britain's accession as an unavoidable compulsion produced by Empire's dissolution, shrinking political power and the consolidation of Western Europe against the Soviet bloc. - Quantifies India's exposure — roughly 27 per cent of Indian exports go to the UK and another 8 per cent to the Common Market countries (35 per cent combined), with a realistic risk of losing about one-fifth of UK trade. - Recasts the relationship from charity to enlightened self-interest: India should sell goods and capital equipment the Common Market actually wants, on commercial terms, rather than appeal for special concessions. - Identifies inflationary pressures, defective Third-Plan planning and high-cost domestic production as the underlying weakness behind India's export problem. - Distils India's options into the slogan 'Export or stagnate' and argues that meeting the ECM challenge requires confronting internal economic distortions rather than blaming external trade arrangements. --- ## [Primary work] ETHICS IN BUSINESS, INDUSTRY AND PUBLIC LIFE URL: https://indianliberals.in/primary-works/ethics-in-business-industry-and-public-life-n-vittal/ ### Summary Delivered as the Tenth Bhogilal Leherchand Memorial Lecture in Mumbai on 8 January 1999 and published by the Forum of Free Enterprise, this booklet captures N. Vittal's diagnosis of India's corruption problem from his vantage as Central Vigilance Commissioner. Vittal opens with a tribute to Bhogilal Leherchand — the Bombay diamond merchant who diversified into textiles, engineering and petrochemicals while keeping a reputation for integrity — and uses that example to ask why ethical standards in Indian business, industry and public life have decayed so badly that the country is rated the world's ninth most corrupt. His central thesis is structural rather than moral. While ten per cent of Indians will be saintly and ten per cent crooked whatever the rules, the remaining eighty per cent calibrate their behaviour to the system — and India's system rewards corruption.… ### Body ## Summary Delivered as the Tenth Bhogilal Leherchand Memorial Lecture in Mumbai on 8 January 1999 and published by the Forum of Free Enterprise, this booklet captures N. Vittal's diagnosis of India's corruption problem from his vantage as Central Vigilance Commissioner. Vittal opens with a tribute to Bhogilal Leherchand — the Bombay diamond merchant who diversified into textiles, engineering and petrochemicals while keeping a reputation for integrity — and uses that example to ask why ethical standards in Indian business, industry and public life have decayed so badly that the country is rated the world's ninth most corrupt. His central thesis is structural rather than moral. While ten per cent of Indians will be saintly and ten per cent crooked whatever the rules, the remaining eighty per cent calibrate their behaviour to the system — and India's system rewards corruption. Vittal identifies five drivers: scarcity engineered by the permit-licence raj (the "neta babu lala raj"), opacity in decision making, delays and red tape that attract speed money, procedural cushions that shelter the guilty under the presumption of innocence, and the tribalism or biradri by which corrupt officials protect one another. The remedies he advances are practical and statutory rather than exhortatory: open sectors to competition (he cites the National Telecom Policy as a case of using market competition to dissolve scarcity-driven corruption); legislate a Freedom of Information Act and adopt a U.S.-style "sunset principle" so that no rule remains in perpetuity; raise the cost of corruption through the draft Corrupt Public Servants (Forfeiture of Property) Act 1999, whose clauses Vittal reproduces in detail; and use the statutory authority the CVC acquired through the Vineet Narain judgment to focus enforcement on the highest-level offenders so that the system is no longer "a spider's web" that catches only small insects. The lecture closes by invoking the Vedic dictum Aano bhadrah kritavo yantu vishwatah ("let noble thoughts come to us from all sides") and the Taitreya Upanishad's call to collective debate, framing anti-corruption reform as an exercise in moral as well as institutional renewal. ## Key points - Vittal speaks as Central Vigilance Commissioner, delivering the Tenth Bhogilal Leherchand Memorial Lecture under Forum of Free Enterprise auspices on 8 January 1999. - Frames ethics as a function of system design, not individual virtue: a 10/10/80 distribution where the 80 per cent majority responds to incentives rather than exhortation. - Identifies five drivers of corruption: scarcity (the permit-licence raj), opacity in decision making, delay and red tape, legal cushions that protect the accused, and biradri solidarity among corrupt officials. - Diagnoses corruption as "a low risk high profit business" and proposes raising its cost through the Corrupt Public Servants (Forfeiture of Property) Act 1999, reproducing the draft clauses in full. - Treats the Vineet Narain judgment (making the CVC a statutory body) and the JMM judgment (bringing Ministers and MPs within the Prevention of Corruption Act) as enabling instruments for prosecuting high-level corruption. - Advocates a U.S.-style sunset principle on rules, a Freedom of Information Act and the use of Information Technology to reduce official discretion. - Argues that opening sectors to competition — as in the National Telecom Policy — is the structural cure for scarcity-driven corruption. - Closes with Vedic and Upanishadic invocations, warning that unless top-level offenders are punished the public will see the system as a spider's web that catches only flies. --- ## [Primary work] EUROPEAN ECONOMIC & MONETARY INTEGRATION URL: https://indianliberals.in/primary-works/european-economic---money-integration-s-l-n-sinha/ ### Summary S.L.N. Simha, former Principal Adviser to the Reserve Bank of India, reviews the fifty-year arc of European economic and monetary integration in a Forum of Free Enterprise booklet that reprints his January–March 1999 paper from the Indian Economic Journal. He frames the European achievement as a deliberate reproach to India: nations that fought repeated wars now bind themselves through mutual trust, a single market and a common currency, while Indian states cannot agree on river-water sharing, district boundaries or tehsil limits, producing only committees, walk-outs, bandhs, morchas and rasta roko. The opening pages position the study less as economic reportage than as an exhortation to Indian economists and policymakers to learn from Europe at a moment of accelerating globalisation. The narrative tracks integration from the Marshall Plan and the European Payments Union, through the European Coal and Steel Community of the early 1950s, the Treaty of Rome (1957) that created the EEC, the Single European Act (1987), and on to the Maastricht Treaty (1992), the renaming of the Community as the European Union (1993) and the launch of the Euro on 1 January 1999. Simha lays out the four elements of the European Monetary System established in 1979 — the ECU, the Exchange Rate Mechanism, the European Monetary Cooperation Fund and the Very Short-term Financing Facility — and walks readers through the evolution of the European Monetary Unit of Account, the EUA and the ECU as a closed basket of currencies. At the heart of the booklet is the Delors Committee report of April 1989 and the institutional architecture it produced: a European Central Bank insulated from political control, a European System of Central Banks, and convergence criteria capping public-sector deficits at 3 per cent of GDP and outstanding public debt at 60 per cent of GDP. Simha treats the fiscal Stability and Growth Pact (1997), the Article 104 prohibition on overdraft financing of governments, and Articles 107–108 on central-bank independence as the operative provisions that make monetary union credible. He notes the irrevocable conversion rates fixed in late 1998 for the eleven Euro entrants and the four hold-outs (the U.K., Sweden, Denmark and Greece). Within the rendered pages Simha repeatedly returns to price stability as the guiding principle of the new European order, with the ESCB tasked under Article 105 to support an open-market economy with free competition. He is candid that whether the ECB's independence will hold against governmental pressure 'remains to be seen', and he gestures — without endorsing — at the danger that developing-country central banks suffer inflation precisely because they finance their governments. The chunk closes inside the Treaty's articles on central-bank independence; remaining pages of the booklet are not yet in the rendered set. ### Body ## Summary S.L.N. Simha, former Principal Adviser to the Reserve Bank of India, reviews the fifty-year arc of European economic and monetary integration in a Forum of Free Enterprise booklet that reprints his January–March 1999 paper from the Indian Economic Journal. He frames the European achievement as a deliberate reproach to India: nations that fought repeated wars now bind themselves through mutual trust, a single market and a common currency, while Indian states cannot agree on river-water sharing, district boundaries or tehsil limits, producing only committees, walk-outs, bandhs, morchas and rasta roko. The opening pages position the study less as economic reportage than as an exhortation to Indian economists and policymakers to learn from Europe at a moment of accelerating globalisation. The narrative tracks integration from the Marshall Plan and the European Payments Union, through the European Coal and Steel Community of the early 1950s, the Treaty of Rome (1957) that created the EEC, the Single European Act (1987), and on to the Maastricht Treaty (1992), the renaming of the Community as the European Union (1993) and the launch of the Euro on 1 January 1999. Simha lays out the four elements of the European Monetary System established in 1979 — the ECU, the Exchange Rate Mechanism, the European Monetary Cooperation Fund and the Very Short-term Financing Facility — and walks readers through the evolution of the European Monetary Unit of Account, the EUA and the ECU as a closed basket of currencies. At the heart of the booklet is the Delors Committee report of April 1989 and the institutional architecture it produced: a European Central Bank insulated from political control, a European System of Central Banks, and convergence criteria capping public-sector deficits at 3 per cent of GDP and outstanding public debt at 60 per cent of GDP. Simha treats the fiscal Stability and Growth Pact (1997), the Article 104 prohibition on overdraft financing of governments, and Articles 107–108 on central-bank independence as the operative provisions that make monetary union credible. He notes the irrevocable conversion rates fixed in late 1998 for the eleven Euro entrants and the four hold-outs (the U.K., Sweden, Denmark and Greece). Within the rendered pages Simha repeatedly returns to price stability as the guiding principle of the new European order, with the ESCB tasked under Article 105 to support an open-market economy with free competition. He is candid that whether the ECB's independence will hold against governmental pressure 'remains to be seen', and he gestures — without endorsing — at the danger that developing-country central banks suffer inflation precisely because they finance their governments. The chunk closes inside the Treaty's articles on central-bank independence; remaining pages of the booklet are not yet in the rendered set. ## Key points - Frames European integration as a direct contrast to Indian inability to settle inter-State disputes, urging Indian economists to study the EU experience. - Traces a 50-year evolution from the Marshall Plan and European Payments Union through the ECSC, Treaty of Rome (1957), Single European Act (1987) and Maastricht Treaty (1992). - Explains the four elements of the 1979 European Monetary System — ECU, ERM, EMCF and VSTF — and the closed-basket nature of the ECU from November 1993. - Centres the Delors Committee Report (April 1989) as the document that prescribed a single currency, a European Central Bank and the three-stage path to union. - Lays out the convergence criteria: public-sector budget deficit not to exceed 3 per cent of GDP and outstanding public debt not to exceed 60 per cent of GDP. - Describes the Stability and Growth Pact of 1997, driven by Germany, and the irrevocable conversion rates for the eleven Euro entrants fixed in late 1998. - Quotes Maastricht Articles 2, 104, 105, 107 and 108 to show how central-bank independence and price stability are written into the Treaty architecture. - Notes implicitly that developing-country central banks finance governments and are thereby principal contributors to inflation — a pointed aside aimed at Indian readers. --- ## [Primary work] EXCELLENCE IN INDUSTRY THROUGH LEADERSHIP URL: https://indianliberals.in/primary-works/excellence-in-industry-through-leadership-by-jj-irani-2001/ ### Summary Excellence in Industry Through Leadership is the text of the 35th A. D. Shroff Memorial Lecture, delivered by Dr. J. J. Irani — then a Director of Tata Sons and former Managing Director of Tata Iron & Steel Co. (TISCO) — at the Forum of Free Enterprise in Mumbai on 1 November 2001. Irani uses the occasion to argue against the orthodoxy, most famously expressed by Milton Friedman, that "the business of business is business." He concedes the importance of profit as a motive but rejects single-minded profit maximisation as a long-term recipe for disaster, insisting that the legitimate purpose of industry is to serve customers, employees, the community and the nation — with profit and wealth as the natural by-product of excellence pursued in that spirit. The lecture is organised around five tenets Irani says he has lived by: serve stakeholders first; recycle wealth back into the community; protect and enhance the environment; lead by example; and treat Change as the only constant.… ### Body ## Summary Excellence in Industry Through Leadership is the text of the 35th A. D. Shroff Memorial Lecture, delivered by Dr. J. J. Irani — then a Director of Tata Sons and former Managing Director of Tata Iron & Steel Co. (TISCO) — at the Forum of Free Enterprise in Mumbai on 1 November 2001. Irani uses the occasion to argue against the orthodoxy, most famously expressed by Milton Friedman, that "the business of business is business." He concedes the importance of profit as a motive but rejects single-minded profit maximisation as a long-term recipe for disaster, insisting that the legitimate purpose of industry is to serve customers, employees, the community and the nation — with profit and wealth as the natural by-product of excellence pursued in that spirit. The lecture is organised around five tenets Irani says he has lived by: serve stakeholders first; recycle wealth back into the community; protect and enhance the environment; lead by example; and treat Change as the only constant. He illustrates each through the biography and heritage of the Tata Group, especially founder Jamshetjee Nusserwanjee Tata — "a nationalist long before this word had any significance" — whose insistence on importing the latest science, building Jamshedpur as a city rather than a colliery, instituting provident funds and pensions decades ahead of the West, and treating business as a trustee for society anticipated by a century what the West now calls Corporate Social Responsibility and Sustainable Development. He cites successors R. D. Tata, JRD Tata, and current chairman Ratan Tata as keeping that tradition alive, and points to global counterparts (Shell, BP, Du Pont, Unilever, Hewlett-Packard, Ford) and the World Business Council for Sustainable Development as evidence that the ethical model is finally converging with the Tata view. The second half turns outward. Irani argues that liberalisation, the WTO, and China's accession have raised the stakes for Indian industry, and that the new leadership task is Anticipation, Communication, Motivation and Action. Looking ahead, he is unfashionably optimistic about India's young: in an age when wealth depends on what "lies between the ears," Indian individualism — long treated as a cultural defect against Confucian discipline — could become an advantage in a world that rewards betting correctly on the unknown; and global investors, customers and talent will increasingly reward companies whose values, sustainability and social responsibility distinguish them. The mantra he leaves with Indian business is to "Go Global in every respect" — in ambition, ethics, governance, benchmarks and communication — closing with Longfellow's lines on footprints on the sands of time and the Forum's customary Eugene Black epigraph that private enterprise must be accepted not as a necessary evil but as an affirmative good. ## Key points - Frames the lecture against the Friedman doctrine that "the business of business is business," arguing that single-minded profit maximisation is short-termist and ultimately self-destructive. - Articulates five tenets of business leadership: serve stakeholders (profit follows), reinvest wealth in community and nation, protect and enhance the environment, lead by example, and master Change as the only constant. - Treats Jamshetjee Tata as the proto-theorist of Corporate Social Responsibility, anticipating by a century what Western business has only recently embraced — provident funds and pensions for workers, Jamshedpur built as a planned city, and an early insistence on Pittsburgh-grade technology for Indian industry. - Quotes JRD Tata to argue that the Tatas have deliberately sacrificed up to "100 per cent growth" rather than abandon ethical standards, and that this restraint is itself a competitive virtue. - Cites Stephan Schmidheiny's World Business Council for Sustainable Development, Carly Fiorina's H-P, Shell, BP, Du Pont, Norsk Hydro, Unilever, Hewlett-Packard, Ford, and Indian exemplars Godrej and Infosys as evidence the global mainstream is converging on the Tata model. - Reads liberalisation, the imminent extension of WTO coverage to services and agriculture, and China's WTO entry as raising competitive stakes for Indian manufacturing in the next two to three years. - Reframes Indian "sub-anarchic" individualism — usually contrasted unfavourably with Confucian discipline — as a comparative advantage in a knowledge economy that rewards betting on the unknown. - Distills today's leadership task into four verbs — Anticipation, Communication, Motivation, Action — and closes by urging Indian business to "Go Global in every respect": ambition, ethics, governance, benchmarks, communication. --- ## [Primary work] Fare Forward, Voyager... URL: https://indianliberals.in/primary-works/fare-forward-voyager-by-frank-simoes-may-1990/ ### Summary Frank Simoes's "Fare Forward, Voyager..." is a biographical tribute to the Goan industrialist Vasudev M. Salgaocar (1916-1984), published in May 1990 by the A.D. Shroff Memorial Trust as Volume 3 of its "Builders of Indian Economy" series. In the rendered pages — the dust jacket, family tree, copyright page, contents, epigraph, prologue and the opening of the first chapter "Childhood's End" — the book positions itself as a journey of discovery undertaken by the author, a fellow Goan, drawing on roughly one hundred and fifty interviews and two hundred hours of taped material to assemble what the jacket calls "a democratic consensus" on its subject. The prologue, set in the pre-dawn hours of a single day at the Salgaocar mansion in Chicalim above Vasco da Gama, sketches the man at sixty-eight: a pioneer industrialist still negotiating with the Mormugao Port Trust, scanning the Financial Times and the Economist for international iron-ore signals, and dispatching telex messages to a grandchild.… ### Body ## Summary Frank Simoes's "Fare Forward, Voyager..." is a biographical tribute to the Goan industrialist Vasudev M. Salgaocar (1916-1984), published in May 1990 by the A.D. Shroff Memorial Trust as Volume 3 of its "Builders of Indian Economy" series. In the rendered pages — the dust jacket, family tree, copyright page, contents, epigraph, prologue and the opening of the first chapter "Childhood's End" — the book positions itself as a journey of discovery undertaken by the author, a fellow Goan, drawing on roughly one hundred and fifty interviews and two hundred hours of taped material to assemble what the jacket calls "a democratic consensus" on its subject. The prologue, set in the pre-dawn hours of a single day at the Salgaocar mansion in Chicalim above Vasco da Gama, sketches the man at sixty-eight: a pioneer industrialist still negotiating with the Mormugao Port Trust, scanning the Financial Times and the Economist for international iron-ore signals, and dispatching telex messages to a grandchild. In the rendered pages, the chapter "Childhood's End" then turns backward to 1916 Raibander, locating Salgaocar in a Goud Saraswat Brahmin family that had collapsed from gilded gentry into shopkeeping poverty under Portuguese colonial rule, and laying out the rigid colonial-Catholic hierarchy of Goa under the rising shadow of Salazar's Estado Novo. The rendered pages frame Salgaocar's later industrial achievement against this colonial pyramid: a Goan Hindu boy "disenfranchised" by religion and language, schooled in the markets of Vasco rather than in any classroom, who would later become "Goa's first true renaissance man." The polemical scaffolding of the book in the rendered pages is the contrast between the dismantling of liberal political thought in Portugal under Salazar — "the slender scaffolding of liberal political thought" — and the slow rise of an autodidact entrepreneur in its colonial periphery. ## Key points - Biographical tribute volume on Vasudev M. Salgaocar (1916-1984), Goan iron-ore industrialist and philanthropist, written by journalist-photographer Frank Simoes. - Published May 1990 by the A.D. Shroff Memorial Trust (M. R. Pai, Trustee) as 'Builders of Indian Economy Series: 3'; not for sale, distributed free to schools, colleges and libraries. - Jacket copy frames the project as a journey of discovery built from roughly 150 interviews and 200 hours of tape, ranging from Cabinet ministers to mine labourers. - Prologue depicts the 68-year-old Salgaocar before dawn in his Chicalim mansion negotiating with the Mormugao Port Trust, reading the Financial Times and Economist, and sending a playful telex to his grandson Vishal in Pune. - Opening chapter 'Childhood's End' locates Salgaocar's birth in 1916 to a Goud Saraswat Brahmin family in Raibander whose gilded fortune collapsed into petty shopkeeping under his father. - The rendered pages sketch the rigid Portuguese colonial pyramid in Goa — administrators and clergy at the top, landed gentry beneath, peasantry at the base — and the disenfranchisement of Goan Hindus. - Salazar's Estado Novo is invoked as the political backdrop, with the regime described as dismantling 'the slender scaffolding of liberal political thought' and reducing Parliament to a rubber stamp. - Table of contents lists six body sections — Childhood's End (3), The Sunday Club (25), The Good Earth (67), A Man For All Seasons (135), The Gathering Dusk (211), Journey's End (257) — none of which beyond the opening of the first are visible in the rendered pages. --- ## [Primary work] Federal Financial Relations in India URL: https://indianliberals.in/primary-works/federa-lfinancial-relations-k-santhanam-dec11-1968/ ### Summary Delivered as the First A. D. Shroff Memorial Lecture under the auspices of the Forum of Free Enterprise, K. Santhanam's address surveys the constitutional architecture of Centre–State financial relations in India and argues that planning has bent that architecture out of shape. After Murarji J. Vaidya's presidential remarks, which commemorate Shroff's pioneering work for free enterprise and recall Shroff's own wish for a talk on changing Union–State financial relations, Santhanam traces the lineage of Indian fiscal federalism from Lord Mayo's 1870 devolution through the Government of India Act, 1935, into Articles 268–281 of the Constitution. Santhanam credits the Constituent Assembly drafters — Ambedkar, B. N. Rau, Gopalaswamy Ayyangar and K. M. Munshi — with producing a precise, if cautious, federal scheme in which most taxes are demarcated between Union and States while income-tax and Union excise duties are shareable on the recommendations of a Finance Commission appointed every five years under Article 280.… ### Body ## Summary Delivered as the First A. D. Shroff Memorial Lecture under the auspices of the Forum of Free Enterprise, K. Santhanam's address surveys the constitutional architecture of Centre–State financial relations in India and argues that planning has bent that architecture out of shape. After Murarji J. Vaidya's presidential remarks, which commemorate Shroff's pioneering work for free enterprise and recall Shroff's own wish for a talk on changing Union–State financial relations, Santhanam traces the lineage of Indian fiscal federalism from Lord Mayo's 1870 devolution through the Government of India Act, 1935, into Articles 268–281 of the Constitution. Santhanam credits the Constituent Assembly drafters — Ambedkar, B. N. Rau, Gopalaswamy Ayyangar and K. M. Munshi — with producing a precise, if cautious, federal scheme in which most taxes are demarcated between Union and States while income-tax and Union excise duties are shareable on the recommendations of a Finance Commission appointed every five years under Article 280. He walks through the work of the first four Finance Commissions (Neogi, Santhanam himself, Rajamannar's Fourth, and the intervening Third under Mahavir Tyagi), summarising how each handled the divisible pool of income-tax, the basis of distribution between collection and population, the widening of shareable excise duties, the consolidation of loans, and the chronic disagreement over sales tax and the merger of excises and sales tax. The lecture's polemical heart is a critique of the non-statutory Planning Commission. Santhanam contends that, because grants under Article 282 and plan transfers have outgrown the statutory grants under Article 275(1), the Planning Commission has effectively displaced the Finance Commission, making federal assistance discretionary, opaque and politically dependent. Quoting the Third Finance Commission and Dr. P. V. Rajamannar's dissenting minute, he argues that the federal balance has been seriously distorted by overlapping jurisdictions and by loans piling up on States that cannot service them. Santhanam closes with concrete reform proposals: distribute 75% of income-tax and 50% of all excise duties to the States on a population basis, abolish discretionary grants under Article 282, restrict Union loans to the States, route State borrowing through the Reserve Bank, and write off a slice of existing loans. He warns that without restoring federal financial relations to a definite constitutional and statutory footing, even the disappearance of State autonomy and the slide toward a unitary system may become possible. A closing biographical note on A. D. Shroff and a Forum membership appeal round out the booklet. ## Key points - Inaugural A. D. Shroff Memorial Lecture under the Forum of Free Enterprise, framed by Murarji J. Vaidya's introductory remarks honouring Shroff as a champion of free enterprise. - Traces Indian fiscal federalism from Lord Mayo's 1870 devolution through the Government of India Act, 1935, into Articles 268–281 of the Constitution. - Praises the Constituent Assembly's drafting — naming Ambedkar, B. N. Rau, Gopalaswamy Ayyangar and K. M. Munshi — as a 'masterpiece' compared to the clumsiness of the 1935 Act on Finance Commissions. - Summarises the work of the first four Finance Commissions on the divisible income-tax pool, widening of shareable Union excise duties, consolidation of State loans, and the failed proposals for merging sales tax with Union excise. - Argues that the non-statutory Planning Commission has eclipsed the Finance Commission, with plan grants and Article 282 transfers exceeding Article 275(1) grants and making federal assistance discretionary. - Cites the Third Finance Commission's verdict on 'general weakness of federal-State financial relations' and Rajamannar's minute against the Planning Commission's encroachment. - Documents the spiralling burden of Union loans on the States — Rs. 44 crores in 1947, Rs. 3,100 crores by the end of the Third Plan — much of it unproductively spent and largely unrecoverable. - Proposes specific reforms: 75% of income-tax and 50% of excise duties to be shared on population basis; abolish Article 282 grants except to Union territories; restrict Union loans to the States and let them borrow from the RBI; write off Rs. 50 per capita of existing loans. - Closes with the warning that the federal financial relations must be restored to a definite constitutional and statutory basis lest the creation of Linguistic States and unitary drift extinguish State autonomy. --- ## [Primary work] Farmer Loan Waiver & Absence of Free Enterprise in Indian Agriculture URL: https://indianliberals.in/primary-works/farmer-loan-waiver-absence-of-free-enterprise-in-indian-agriculture-dr-c-l-dadhich-dr-barendra-kumar-bhoi-kumar-anandd/ ### Summary This Forum of Free Enterprise booklet, published in memory of chartered accountant Shailesh Kapadia (1949–1988) and sponsored by the Shailesh Kapadia Memorial Trust, bundles two independent essays on the crisis in Indian agriculture written against the backdrop of mounting state-level demands for farm loan waivers. A short editorial by Sunil S. Bhandare and an overview signed by Minoo R. Shroff (President-Emeritus, Forum of Free Enterprise, 8 August 2017) frame the volume's argumentative centre: that rural distress, farmer suicides and chronic indebtedness reflect a deeper unviability of agriculture as an occupation, and that competitive forces simply do not operate in farm input and output markets — leaving loan waivers as a populist soft option rather than a real remedy. The first essay, "Farm Loan Waiver: A Critical Evaluation" by Dr. C. L. Dadhich (Hon. Secretary, Indian Society of Agricultural Economics; former Director of Rural Economics at the Reserve Bank of India) and Dr.… ### Body ## Summary This Forum of Free Enterprise booklet, published in memory of chartered accountant Shailesh Kapadia (1949–1988) and sponsored by the Shailesh Kapadia Memorial Trust, bundles two independent essays on the crisis in Indian agriculture written against the backdrop of mounting state-level demands for farm loan waivers. A short editorial by Sunil S. Bhandare and an overview signed by Minoo R. Shroff (President-Emeritus, Forum of Free Enterprise, 8 August 2017) frame the volume's argumentative centre: that rural distress, farmer suicides and chronic indebtedness reflect a deeper unviability of agriculture as an occupation, and that competitive forces simply do not operate in farm input and output markets — leaving loan waivers as a populist soft option rather than a real remedy. The first essay, "Farm Loan Waiver: A Critical Evaluation" by Dr. C. L. Dadhich (Hon. Secretary, Indian Society of Agricultural Economics; former Director of Rural Economics at the Reserve Bank of India) and Dr. Barendra Kumar Bhoi (recently retired Principal Adviser and Head of Monetary Policy Department, RBI), uses NSSO and RBI data to argue that fragmented landholdings, growing reliance on non-institutional credit and an inefficient value chain dominated by middlemen have made cultivation structurally loss-making, and that competitive loan waivers distort credit culture without addressing the underlying causes. The second essay by Kumar Anand, described in the editorial as a young economic-liberal thinker, locates the same crisis in the absence of market principles at the input and output levels and questions whether central planning has truly been abandoned despite the dissolution of the Planning Commission. The rendered pages cover the front-matter, the foreword, the editorial and the opening sections (Introduction; Agrarian Distress; Rural Indebtedness; Inefficient Value Chain) of the first essay through printed page 18. ## Essays ### Farmer Loan Waiver - A Critical Evaluation *By Dr. C.L Dadhich; Dr. Barendra Kumar Bhoi* Dadhich and Bhoi open by situating the current wave of state-level farm loan waivers within India's longer history, noting that waivers were historically reserved for crop-failure emergencies but are now being demanded even when agricultural production is at record levels. They frame loan waiver as both a fiscal-discipline problem for central and state governments and, in the absence of a social security system, a humanitarian question — while reminding readers that agriculture is a state subject and that the RBI already has guidelines to restructure farm loans in distress. The analytical core of the rendered pages diagnoses agrarian distress along three axes. First, agriculture has become an unviable occupation: NSSO's 59th round (2003) found 40 per cent of farmers wanting to abandon farming, and the 70th round (2013) shows two-thirds of agricultural households now spending more than they earn, sustaining themselves through borrowing while capital formation collapses. Second, despite cooperatives, bank nationalisation, NABARD, Regional Rural Banks, priority sector lending and Kisan Credit Cards, the share of institutional credit to rural households fell from 69.4 per cent in 1991 to 56 per cent in 2012, with institutional lenders showing a clear bias toward larger asset-holders while non-institutional sources lend across the size distribution. Third, an inefficient value chain forces small and marginal farmers to dump produce at harvest, with procurement operations limited to a handful of crops and states and middlemen capturing the bulk of the retail price. The rendered section stops just as the authors begin to characterise the value-chain problem; the rest of the essay (policy implications and recommendations) lies beyond page 18. - Farm loan waivers have shifted from being an exceptional response to crop failure into a recurring state-level political demand even in years of record agricultural output. - NSSO surveys show roughly 40 per cent of farmers want to quit farming and that two-thirds of agricultural households now consume more than they earn, financing the gap through borrowing. - Institutional credit's share of rural lending fell from 69.4 per cent in 1991 to 56 per cent in 2012, with banks and cooperatives favouring asset-rich households while the poor rely on costlier non-institutional lenders. - Rising labour and input costs — not output-price weakness alone — are identified as the central drivers of cultivation's unviability, even after five years of large MSP hikes through 2013-14. - Bumper harvests in 2016-17 produced a collapse in pulses, oilseed and vegetable prices, so the latest wave of farmer agitation is described as a market-failure crisis rather than a crop-failure crisis. - Inadequate warehousing and procurement confined to a few crops and states (Punjab, Haryana, Andhra Pradesh, Odisha, West Bengal) leave middlemen with the bulk of the final retail price. --- ## [Primary work] FIFTEEN YEARS OF INDIAN PLANNING URL: https://indianliberals.in/primary-works/fifteen-years-of-indian-planning-prof-b-r-shenoy-aug10-1966/ ### Summary Delivered as the Walchand Memorial Lecture in Bombay on 7 April 1966 and issued in pamphlet form by the Forum of Free Enterprise that August, B. R. Shenoy's address is a forensic indictment of the first fifteen years of Indian central planning. Shenoy, then Director of the School of Social Sciences at Gujarat University, opens by insisting that economic progress must be measured by mass well-being — chiefly by the per capita availability of food and cloth — and then marshals official statistics to show that on this test the post-1951 record is at best semi-stagnant and on some measures (cereal availability per capita, cotton cloth consumption) worse than the late inter-war years.… ### Body ## Summary Delivered as the Walchand Memorial Lecture in Bombay on 7 April 1966 and issued in pamphlet form by the Forum of Free Enterprise that August, B. R. Shenoy's address is a forensic indictment of the first fifteen years of Indian central planning. Shenoy, then Director of the School of Social Sciences at Gujarat University, opens by insisting that economic progress must be measured by mass well-being — chiefly by the per capita availability of food and cloth — and then marshals official statistics to show that on this test the post-1951 record is at best semi-stagnant and on some measures (cereal availability per capita, cotton cloth consumption) worse than the late inter-war years. He argues that the planning regime has produced a structural divorce between production and consumer needs, channelling roughly 70 per cent of Third Plan investment into Public Sector "infrastructure" and heavy industry while the basic-goods sectors (agriculture, cotton textiles) atrophy. The second half of the lecture builds a causal chain from this misallocation to India's compounding crises: deficit-financed budgets that have doubled money supply over the decade and pushed prices up 70 per cent; recurring foreign-exchange droughts; mounting food shortages requiring 10 million tonnes of imports in 1966; the collapse of the capital market; and a perverse income redistribution from consumers to traders, intermediaries and Public Sector contractors that he calls a social injustice. Shenoy then prescribes fifteen reform points — denationalisation of Public Sector projects "capable of being worked on sound commercial principles", a floating rupee, freezing or replacing P.L. 480 counterpart funds, removal of import-exchange controls, price decontrol, and a drastic scaling-down of Public Sector activity to under ten per cent of national income. Throughout he draws on Milton Friedman's contrast between centrally planned societies and the free-pricing systems of West Germany, Italy, Japan, Malaya, Singapore, Hong Kong and Formosa, and rests his case on the Rule of Law and the consumer's sovereignty at "the shopping referendum". The pamphlet closes with a fourteen-point summary of conclusions and a table of production indices for 1954-55 to 1964-65, framing the work as both a diagnosis of planning failure and a manifesto for restoring market coordination and a limited state. ## Key points - Defines economic progress as a continued rise in the standard of living of the masses, measured first by per capita food and cloth availability, and tests Indian planning by that yardstick. - Documents that per capita cereal availability fell from 15.3 oz/day (1937-38 average) to 13.7 oz in 1964 and cotton cloth from 14.7 m in 1956 to 15.11 m only after 34.4 million tonnes of net wartime/post-war imports — concluding that the masses are "more hungry today than before the war". - Attributes stagnation to a planning-induced divorce between production and consumer needs, with about 70 per cent of Third Plan investment going to Public Sector "infrastructure" and heavy industry rather than agriculture, cotton textiles and basic consumer goods. - Traces inflation, the foreign-exchange crisis, and the capital-market malaise to chronic budget deficits, exchange controls, import licensing premia of 500-700 per cent, and the diversion of P.L. 480 counterpart funds into deficit financing. - Quotes Milton Friedman to argue that no centrally planned society has produced sustained mass improvement, while citing West Germany, Italy, Japan, Malaya, Singapore, Hong Kong and Formosa as free-market success cases. - Calls for denationalisation of viable Public Sector projects, a floating rupee, repeal of import and price controls, freezing of P.L. 480 funds, and confinement of state activity to the Rule of Law, defence, monetary stability and rural extension services. - Concludes with a 14-point reform programme and TABLE II (Pattern of Production 1954-55 to 1964-65) showing Public Sector investment indexed at 438.3 against industrial production at 210.8 and agricultural production at 134.7. --- ## [Primary work] Fifty Years After ... URL: https://indianliberals.in/primary-works/fifty-years-after/ ### Summary Fifty Years After … is a slim proceedings booklet published in 1997 by the Project for Economic Education (Mumbai) with support from the Friedrich-Naumann-Stiftung, edited by S. V. Raju. It gathers presentations and discussion contributions from a seminar titled 'India-Fifty Years After' held in April 1997 in Mumbai, assembling freedom fighters, retired military officers, a retired judge, academics, and activists to take stock of India's record fifty years on from independence. The volume is divided into a main-papers section (one extended lead essay by Sadanand Varde, pp. 1–8) and a longer 'Discussions' section (pp. 9 onward) containing shorter contributions from nine additional speakers, capped by a final essay on infrastructure by Jiban Mukhopadhyay beginning at printed p. 33. Sadanand Varde, a 1942-generation freedom fighter, opens with a personal reckoning that dates the moral decline of public life to Indira Gandhi's transformation of Congress into a family business, catalogues the wreckage of the permit-licence raj (over Rs 2 lakh crore sunk in loss-making public sector units), and skewers the 'VIP Republic' of rent-free MP bungalows and competitive populism. The Discussions section opens with K. F. Rustomji's blunt audit — 400 million below the poverty line, 70% illiterate, sessions courts taking 8–10 years to convict, police substituting torture for due process. Maj. Gen. (retd.) E. D'Souza identifies constitutional collapse and the absence of a viable alternative to Congress as the twin root failures, quoting B. K. Nehru on the gulf between founders (Nehru, Patel, Rajaji) and present rulers (Laloo, Jayalalitha, Mulayam Singh). Arvind Deshpande's 'Today's Pindaris' deploys Achyut Patwardhan's warning that 1990s India resembles 1837 — twenty years before 1857, a phase of anarchy. Admiral Ramdas (retd.) offers a brief forward-looking note on leadership, discipline, and the armed forces' non-caste, non-partisan national role. Dr. Maneesha Tikekar attributes the failure to build civil society to excessive governmentalisation in a hierarchy-bound culture where politics fills the vacuum left by absent social mobility. Dr. Usha Mehta, drawing on her own service under Gandhi, defends the non-violent convertibility of means and aims and praises the unbroken constitutional framework — India alone among comparable post-colonial states has never gone under military rule. Justice R. A. Jahagirdar (retd.) takes the most optimistic line, contrasting India favourably with Nkrumah's Ghana and invoking Ambedkar's opposition to panchayat rule against the Gandhian Gram Swaraj ideal: 'the patient is still alive and curable'. Indumati Parikh's long essay reframes 'freedom' through M. N. Roy's definition (continuous removal of impediments to human development), then works through the sham of rural schooling, the family-planning fiasco entrusted to a Catholic health minister, and the failures of primary health care. Jiban Mukhopadhyay closes with an infrastructure essay. The governing question across the volume is whether the freedoms for which the independence generation fought have been delivered to ordinary Indians. The contributors reach a broadly shared negative verdict: economic capture by the permit-licence-quota raj, democratic institutions degenerated into a VIP Republic, mass illiteracy and stubborn infrastructure failure. Yet Jahagirdar and Usha Mehta resist pure pessimism, arguing that the constitutional framework has proved resilient and that civil society, the armed forces, and voluntary organisations can still push reform forward. ### Body ## Summary Fifty Years After … is a slim proceedings booklet published in 1997 by the Project for Economic Education (Mumbai) with support from the Friedrich-Naumann-Stiftung, edited by S. V. Raju. It gathers presentations and discussion contributions from a seminar titled 'India-Fifty Years After' held in April 1997 in Mumbai, assembling freedom fighters, retired military officers, a retired judge, academics, and activists to take stock of India's record fifty years on from independence. The volume is divided into a main-papers section (one extended lead essay by Sadanand Varde, pp. 1–8) and a longer 'Discussions' section (pp. 9 onward) containing shorter contributions from nine additional speakers, capped by a final essay on infrastructure by Jiban Mukhopadhyay beginning at printed p. 33. The governing question across the volume is whether the freedoms for which the independence generation fought have been delivered to ordinary Indians. The contributors reach a broadly shared negative verdict: the economy was captured by a permit-licence-quota raj that produced a vast public sector, fiscal profligacy, and entrenched bureaucratic rent-seeking; democratic institutions have degenerated into a VIP Republic serving politicians and goondas rather than citizens; mass illiteracy, inadequate health care, and poor infrastructure remain stubborn failures fifty years on. Yet several speakers — notably Justice Jahagirdar and Dr. Usha Mehta — resist pure pessimism, arguing that the constitutional framework has proved resilient and that civil society, the armed forces, and voluntary organisations can still push reform forward. The discussions section adds concrete proposals on municipal schooling, family planning, nutrition, women's employment, and community entitlements, giving the volume a policy-reform as well as retrospective character. ## Essays ### Is This the Freedom We Fought For? *By Sadanand Varde* Sadanand Varde opens the volume with a deeply personal reckoning. A veteran of the 1942 freedom struggle, he confesses that the labels 'freedom fighter' carry no pride for him today, given how many who claim them have been hauled into court for criminal offences. He surveys fifty years of development and concludes they have been years of 'wasted opportunities and lost morality.' The State was placed at the head of the economy through the National Planning Commission, producing a closed economy, a huge loss-making public sector (over Rs 2 lakh crore sunk), and a culture where bureaucrats and ministers arrogated enormous powers to themselves. The result is a 'VIP Republic' in which parliamentary privilege shields criminals, the Shiv Sena can extort goondas under political patronage, and competitive populism — dual-card ration schemes, subsidised power — drains resources from education and health. Varde traces the moral decline to the moment Indira Gandhi turned Congress into a family business and personalist politics displaced principled leadership. He is cautiously hopeful about technology (TV and radio freeing communications from state control) and emerging federal pressures, but ends with a letter exchange between Sheila Kaul and Nanasaheb Goray parodying the 'Dandi March Run' as a symbol of the frivolity of those in power. - Varde argues that the National Planning Commission placed the State at the head of the economy, producing a closed economy, high tariffs, and a parallel economy accounting for nearly half of national production. - The public sector absorbed over Rs 2 lakh crore in capital, most of it loss-making; crores in investments returned less than 2.5% on investment. - Parliamentary institutions have deteriorated into a 'VIP Republic': MPs occupy government bungalows rent-free, use their offices to extort constituents, and cannot be arrested while Parliament is in session. - Competitive populism — dual-card ration systems in Andhra Pradesh, open-ended subsidies in power and education — wastes resources and is not cost-effective. - The moral decline of public life is dated to Indira Gandhi's decision to treat Congress as a family affair, triggering the era of coalition politics and criminality in public life. - Technology (independent TV and radio channels) is identified as a structural antidote to State control of communications. - Varde ends with a satirical letter exchange mocking the 'Freedom Run' gimmick under Rajiv Gandhi as emblematic of the hollow official celebration of independence. ### Democracy only for the Few? *By K. F. Rustomji* K. F. Rustomji opens the Discussions section with a blunt assessment of India's achievements. He acknowledges genuine progress in agriculture and expansion of the middle class, but notes that 44% of the population — around 400 million — live below the poverty line, 70% of the country is illiterate, and the justice system has broken down: murder cases now take 8–10 years to reach a sessions court verdict, and conviction rates are near zero. He describes a justice system that has substituted police torture and extrajudicial killing for due process. - Middle class has expanded but 400 million remain below the poverty line and 300 million are illiterate. - The justice system is effectively non-functional: serious cases take 8–10 years in sessions courts and conviction rates are nearly zero. - Police have substituted torture and extrajudicial killing for deterrence, which Rustomji describes as uncivilised. - The home minister Indrajit Gupta is quoted as acknowledging a general fall in performance of the policing system across the country. ### The Armed Forces *By Maj.Gen. (retd.) E. D'souza* Maj. Gen. (retd.) E. D'Souza recounts a small incident from the night of 14/15 August 1947 to frame his reflections on the armed forces. He identifies two fundamental problems: the collapse of the Constitution's spirit and India's failure, in fifty years, to find a long-term viable alternative to the Indian National Congress. He quotes B. K. Nehru on the divergence between the constitutional values of founders like Nehru, Patel, and Rajaji and the values of today's rulers (Laloo, Jayalalitha, Mulayam Singh). He draws an analogy with South Africa's constitutional process and emphasises that for liberal democracy to survive, India needs leaders who look at poverty rationally — citing Gandhi, J.P. Narayan, and M. N. Roy as models. - D'Souza identifies two root causes of India's failures: collapse of constitutional values and the absence of a viable alternative to Congress dominance. - He cites B. K. Nehru's warning about the gap between the constitutional values of founders and current rulers. - He draws an analogy with the South African constitutional process, noting that India's 70% OBC and SC population mirrors the percentages that shaped South Africa's new constitution. - He argues that for liberal democracy to survive after freedom, leaders who look at poverty rationally — not sentimentally — are needed. ### Today's Pindaris *By Arvind Deshpande* Arvind Deshpande's contribution 'Today's Pindaris' uses the historical Pindari marauders as a metaphor for the current political class. He recounts Achyut Patwardhan's invitation to speak at a 'People's Parliament' in Delhi and Patwardhan's warning that India is entering a phase equivalent to 20 years before 1857 — 20 years after the Mughal collapse, when Peshwas fell and 'there was total anarchy.' Deshpande argues that the two basic problems facing India are political: the collapse of the Constitution and the failure to find a viable alternative to the Indian National Congress. - Deshpande uses the Pindari metaphor to characterise today's political criminals and goondas who have captured the state. - Achyut Patwardhan is quoted warning that India in the 1990s resembles India around 1837 — 20 years after the Mughal collapse and the fall of the Peshwas. - The two basic problems identified are: (1) constitutional collapse and (2) the failure to find a long-term viable political alternative to Congress. ### Let's Look Forward *By Admiral Ramdas (retd.)* Admiral Ramdas (retd.) offers a brief forward-looking statement emphasising that the quality of leadership, discipline, and the role of the armed forces are the keys to improvement. He states that the armed forces have a basic subscription to democracy and have always rallied to national causes, and explicitly notes that 'we always rallied to national causes like floods, restoring disrupted civil services, electrical failures' and do not recruit on a caste basis. - Ramdas identifies quality of leadership, sense of discipline, and sound values as the three priorities for improvement. - The armed forces are presented as a remaining bastion of non-caste, non-partisan national commitment. - He calls for armed forces to maintain a basic subscription to democracy and to help ensure national cohesion. ### Our Failures *By Dr. Maneesha Tikekar* Dr. Maneesha Tikekar's short contribution 'Our Failures' attributes India's inability to create a genuine civil society to the excessive governmentalisation and politicisation of the entire society. She argues that in a hierarchy-bound society where social mobility is not easily available, politics becomes an avenue for status and money. She identifies four causes of continued failure: politicisation of public life; the constitutional morality being reduced to technicalities; the sudden coming of mass society without a genuine mass society having been cultivated (India has borrowed many things through technology without cultivating indigenous ideas and ideologies); and the resulting tendency of rulers to be populist. - Tikekar attributes the failure to create civil society to excessive governmentalisation and politicisation of society. - She argues that in hierarchy-bound societies, politics fills the vacuum left by absent social mobility. - Constitutional morality has been reduced to mere formalities while moral substance has been overlooked. - India has borrowed technology and mass-society forms without cultivating indigenous ideas and ideologies, making populism structurally inevitable. ### Keeping Alive the Ideals of the Freedom Struggle *By Dr. Usha Mehta* Dr. Usha Mehta draws on her personal experience as a freedom fighter under Mahatma Gandhi to reflect on what keeping the ideals of the freedom struggle alive means. She insists that Gandhi's emphasis on the convertibility of means and aims — the movement must remain non-violent — is as relevant now as it was then. She argues that the armed forces should not develop any political ambitions and cites M. C. Chagla's encouraging statement during the Emergency as evidence that institutions can hold. She acknowledges systemic failures (the Army Rule lasting 37 years in Pakistan as a counter-example) but argues that India is 'the only country which has retained its constitutional framework and government all these fifty years.' - Usha Mehta grounds her address in personal memory of fighting under Gandhi and insists on the non-violent convertibility of means and aims. - She praises the armed forces for never developing political ambitions and cites this as a key institutional achievement. - She holds up India's unbroken constitutional framework as exceptional among post-colonial states — uniquely among comparable nations, India has never gone under military rule. - She quotes M. C. Chagla's encouraging statement during the Emergency as evidence of judicial and institutional resilience. - She warns against 'quarrelling with the Constitution' and calls for using it as a tool rather than blaming it for situations that arise. ### The Patient is still Alive and curable *By Justice R. A. Jahagirdar (retd.)* Justice R. A. Jahagirdar (retd.) takes the most explicitly optimistic line in the volume. His essay 'The Patient is still Alive and curable' argues that India's constitutional fabric has survived despite all provocations — including Emergency — and that the judiciary and armed forces have been the key pillars of stability. He draws a pointed contrast between India and Ghana: both became independent at the same time, but Ghana went into darkness after Nkrumah was overthrown, while India retained its constitutional framework across fifty years. He attributes poverty in India partly to the Gandhian fixation on charkha and swadeshi rather than modern economic development, notes Ambedkar's opposition to panchayat rule, and contends that even a pessimist must acknowledge that 'the patient is still alive and we can still cure him and make him live and kicking again.' - Jahagirdar argues that India uniquely among comparable post-colonial states has retained its constitutional framework for fifty years, never going under military rule. - He draws an invidious comparison with Ghana: India vs. Nkrumah's Ghana; Nehru vs. Nkrumah — India came out ahead. - He attributes initial attributions of poverty to foreign rule (charkha, swadeshi) as a historical mistake that delayed modern economic development. - He invokes Ambedkar's opposition to panchayat rule as a counterpoint to the Gandhian ideal of Gram Swaraj. - He closes on a qualified optimism: the patient is ill but alive and curable. ### Too Many People, Too Little Health Care, Too Many Illiterates *By Indumati Parikh* Indumati Parikh's is the longest essay in the volume, running from printed pp. 18–23. She opens by arguing that 'freedom' was never truly understood by most Indians — belonging to a hierarchical culture where freedom was within community, caste, and religion, the concept of individual freedom was alien to the independence generation's mass base. She argues that the real meaning of freedom is the continuous removal of impediments to human development, citing M. N. Roy's definition. She then works through four major failure domains: the sham of rural schools (government figures claim 56% female literacy but her fieldwork finds girls absent from classrooms, drop-outs lapsing back to illiteracy after two years, unwritten rules preventing promotion past 4th standard in municipal schools); the population problem (India was the first country to adopt family planning policy in 1951 but implementation was left to a Catholic health minister opposed to artificial birth control); health care (primary health care centres are poorly manned and equipped, people do not know how to use them, tribal communities lack basic nutritional knowledge); and the need for non-formal education and appropriate technology as grassroots tools. - Parikh argues that 'freedom' was never internalised by the mass of Indians raised in hierarchical, caste-bound community structures where freedom meant communal membership, not individual autonomy. - She cites M. N. Roy's definition — freedom is the continuous removal of impediments to the development of human beings — as the correct benchmark. - Rural schooling is described as a sham: girls are absent from classrooms, drop-outs relapse into illiteracy within two years, municipal school rules prevent promotion past 4th standard. - The population problem was compounded by entrusting family planning implementation to a Catholic health minister who introduced the rhythm method against government warnings. - Primary health care centres are poorly staffed and poorly used because people are not educated about preventive and promotive health. - Non-formal education and appropriate technology — usable by and understandable to anybody — are proposed as the route out of the impasse. --- ## [Primary work] FINANCE AND INDUSTRY IN INDIA URL: https://indianliberals.in/primary-works/finance-and-industry-in-india-a-d-shroff-october-10-1964/ ### Summary Finance and Industry in India is a Forum of Free Enterprise booklet based on the Sir Vithal Chandavarkar Memorial Lectures that A. D. Shroff delivered at the Indian Institute of Sciences, Bangalore, on 29-30 March 1963. Shroff surveys the financial scaffolding of Indian industry across the first two Five-Year Plans, marshalling Reserve Bank data on roughly 25,500 joint-stock enterprises and showing how internal resources of about 1,000 large companies rose from Rs. 274 crores in 1951-55 to Rs. 504 crores in 1956-60 while their bank borrowings shot up from 17 per cent to 28.7 per cent of total resources — a trend he calls structurally unhealthy. The core of the booklet maps the institutional ecology that has filled the long-term-credit vacuum left by India's inherited British-style commercial banks: the government-anchored Industrial Finance Corporation (1948), the wholly private ICICI (1955) on whose board Shroff served, the National Industrial Development Corporation, the Refinance Corporation backed by PL 480 counterpart funds, and the Life Insurance Corporation, which by his count has placed about Rs. 125 crores in industrial issues.… ### Body ## Summary Finance and Industry in India is a Forum of Free Enterprise booklet based on the Sir Vithal Chandavarkar Memorial Lectures that A. D. Shroff delivered at the Indian Institute of Sciences, Bangalore, on 29-30 March 1963. Shroff surveys the financial scaffolding of Indian industry across the first two Five-Year Plans, marshalling Reserve Bank data on roughly 25,500 joint-stock enterprises and showing how internal resources of about 1,000 large companies rose from Rs. 274 crores in 1951-55 to Rs. 504 crores in 1956-60 while their bank borrowings shot up from 17 per cent to 28.7 per cent of total resources — a trend he calls structurally unhealthy. The core of the booklet maps the institutional ecology that has filled the long-term-credit vacuum left by India's inherited British-style commercial banks: the government-anchored Industrial Finance Corporation (1948), the wholly private ICICI (1955) on whose board Shroff served, the National Industrial Development Corporation, the Refinance Corporation backed by PL 480 counterpart funds, and the Life Insurance Corporation, which by his count has placed about Rs. 125 crores in industrial issues. He pairs this domestic map with an unusually detailed account of foreign-currency channels — the World Bank, IDA, AID (and its predecessor Development Loan Fund), the Export-Import Bank, the Commonwealth Development Finance Corporation, and West Germany's HERMES insurance facility — arguing that India is the World Bank's single largest borrower and crediting Eugene Black and George Woods for sympathetic stewardship. While generous in praise of these agencies, Shroff is unsparing about domestic policy. He attacks the super-profits-tax-era fiscal regime for siphoning 65-80 per cent of industrial profits away from modernisation, dubs the country's planning effort 'Planless Planning', and traces how T. T. Krishnamachari's 1957 budget shock collapsed new capital issues from Rs. 117 crores to Rs. 98 crores. He further argues that the pursuit of complete self-sufficiency is a fallacy — every expansion in installed capacity, he notes, raises rather than lowers the import bill for sulphur, alloy steel, machine tools and other essential inputs. The chunk ends with a defence of the broadening Indian capital market, citing a March 1963 memorandum from the stock-exchange presidents showing that 90 per cent of industrial equity is held by small investors with individual holdings under Rs. 10,000, which Shroff offers as a direct rebuttal to Delhi's narrative of monopoly concentration. ## Key points - Of roughly 25,500 joint-stock companies registered in India, about 22,500 (85 per cent) have a paid-up capital of Rs. 5 lakhs or less, which Shroff treats as a structural marker of poverty rather than entrepreneurial dynamism. - Industrial borrowing from banks rose from 17 per cent of total resources in 1951-55 to 28.7 per cent in 1956-60, which Shroff calls unhealthy because banks fund themselves with short-term deposits and cannot prudently lock them into long-term industrial credit. - Shroff argues that the super-profits tax and the broader fiscal regime force industries to surrender 65-80 per cent of annual profits as direct taxation, leaving too little for modernisation and capacity expansion. - He maps the new institutional layer built to plug the long-term-credit gap: the Industrial Finance Corporation (1948), ICICI (1955, on whose board he served), the National Industrial Development Corporation, the Refinance Corporation, and the LIC, which has invested about Rs. 125 crores in industrial issues. - On the foreign-exchange side, the booklet walks through the World Bank, IDA, AID (absorbing the older Development Loan Fund), the Export-Import Bank, the Commonwealth Development Finance Corporation, and West Germany's HERMES insurance — crediting Eugene Black and George Woods for unusually sympathetic terms. - Shroff describes Indian planning as 'Planless Planning' and singles out T. T. Krishnamachari's 1957 budget as the shock that cut new capital issues from Rs. 117 crores to Rs. 98 crores and rattled investor confidence for the next year. - He rejects the pursuit of complete economic self-sufficiency as a fallacy, arguing that every additional unit of installed capacity raises rather than reduces India's bill for imported sulphur, alloy steel, machine tools, copper and spare parts. - Citing a March 1963 memorandum from the presidents of all stock exchanges in India, he notes that 90 per cent of industrial equity is held by small investors with holdings of Rs. 10,000 or less — a fact he uses to dismiss the Delhi narrative of monopoly concentration. --- ## [Primary work] Finance Companies URL: https://indianliberals.in/primary-works/finance-companies-agenda-for-urgent-action-by-dr-ac-shah-july-15-1997/ ### Summary Delivered as a talk at the Forum of Free Enterprise in Mumbai on 24th July 1997 and published as a booklet on 15 July 1997, Dr. A. C. Shah's address takes stock of India's Non-Banking Financial Companies (NBFCs) in the aftermath of the CRB scam and the sweeping 1997 amendment to the Reserve Bank of India Act. Speaking as a former Chairman and Managing Director of Bank of Baroda and Chairman of the RBI Committee on NBFCs, Shah argues that the industry — although the youngest member of India's financial sector, with an asset base of over Rs.50,000 crores and a deposit base of about Rs.18,000 crores — is being unfairly tarred by the misconduct of a single firm and is now under severe liquidity stress as deposits dry up, withdrawals accelerate, and banks adopt a 'wait and watch' posture. Shah's central plea is that the process of deregulation initiated over the previous four years not be reversed: RBI should tighten and clarify entry norms (the new Net Owned Funds threshold of Rs.25 lakhs is endorsed) while protecting well-managed NBFCs from collective punishment.… ### Body ## Summary Delivered as a talk at the Forum of Free Enterprise in Mumbai on 24th July 1997 and published as a booklet on 15 July 1997, Dr. A. C. Shah's address takes stock of India's Non-Banking Financial Companies (NBFCs) in the aftermath of the CRB scam and the sweeping 1997 amendment to the Reserve Bank of India Act. Speaking as a former Chairman and Managing Director of Bank of Baroda and Chairman of the RBI Committee on NBFCs, Shah argues that the industry — although the youngest member of India's financial sector, with an asset base of over Rs.50,000 crores and a deposit base of about Rs.18,000 crores — is being unfairly tarred by the misconduct of a single firm and is now under severe liquidity stress as deposits dry up, withdrawals accelerate, and banks adopt a 'wait and watch' posture. Shah's central plea is that the process of deregulation initiated over the previous four years not be reversed: RBI should tighten and clarify entry norms (the new Net Owned Funds threshold of Rs.25 lakhs is endorsed) while protecting well-managed NBFCs from collective punishment. He proposes a graded regime — only NBFCs with NOFs of Rs.5 crores and above, rated and prudentially compliant, should access unrestricted public deposits; smaller companies should be given a three-year window to scale up or exit; sub-Rs.1–2 crore firms should be barred from accepting public deposits altogether and possibly brought under a revised Money Lenders Act. He urges RBI to operationalise the P. R. Khanna Expert Group's 1996 recommendations on supervision, to advance a deposit insurance scheme on the lines of UK and USA models, and to use the recent SLR hike to fund a stand-by refinance facility for registered NBFCs. The second half of the talk turns to the industry's own duties: build a Self-Regulatory Organisation (SRO) with a federal structure and binding code of conduct, set up shared infrastructure for credit information and registry of leased assets, invest in training at the Bankers Training College and National Institute of Bank Management, and project a clearer public image. Shah anticipates a wave of mergers and acquisitions producing a small number of dominant players surrounded by specialist satellites, and closes with a quotation from RBI Governor Dr. C. Rangarajan affirming the NBFC role in deepening capital markets and offering wider choice to investors. The booklet's bookends — an A. D. Shroff epigraph on free enterprise and a Eugene Black epigraph on private enterprise as 'an affirmative good' — frame the address squarely within the Forum of Free Enterprise's classical-liberal tradition. ## Key points - The CRB scam and the 1997 amendment to the RBI Act mark a turning point: RBI now has 'wide ranging and sweeping' powers over NBFCs and has relaxed credit and deposit access for rated, prudentially compliant companies. - The NBFC industry holds an asset base of over Rs.50,000 crores and roughly Rs.18,000 crores in deposits, but faces an acute liquidity squeeze as deposits vanish and banks freeze sanctioned credit. - Shah opposes collective punishment of NBFCs for one firm's fraud, citing the Bank of England's handling of Baring Bros and Lord Dingham's BCCI report ('the player is always few steps ahead of the regulator'). - Proposes a tiered NOF-based regime: free deposit-raising only for NBFCs with NOFs of Rs.5 crores and above; a three-year transition for Rs.1–5 crore firms; outright ban for sub-Rs.1–2 crore firms. - Calls on RBI to urgently operationalise the P. R. Khanna Expert Group (April 1996) supervisory scheme, launch deposit insurance for NBFCs, and use the SLR increase to underwrite stand-by refinance. - Argues the industry must form a federally structured Self-Regulatory Organisation (SRO) with a binding code of conduct, common credit-information pool, and leased-asset registry. - Expects consolidation through mergers and acquisitions to leave 'only a small number of dominant players' surrounded by specialised satellite firms over the next five to ten years. - Closes with RBI Governor Dr. C. Rangarajan's observation that NBFCs' success ultimately depends on 'management capabilities, observance of financial discipline and effective deployment of funds.' --- ## [Primary work] FINANCE COMPANIES URL: https://indianliberals.in/primary-works/finance-companies-searching-for-a-meaningful-role-a-c-shah-december-5-1996/ ### Summary Delivered as the A. D. Shroff Memorial Annual Public Lecture in Mumbai on 29 August 1996 and published by the A. D. Shroff Memorial Trust later that year, Dr. A. C. Shah's address surveys the rise of India's non-banking finance companies (NBFCs) in the wake of the 1991 reforms and asks what kind of regulatory architecture would let them play a useful role alongside the banking system. Shah, a former Chairman and Managing Director of Bank of Baroda who also chaired the RBI Study Group on NBFCs (1992), opens with a tribute to A. D. Shroff's 'extra-ordinary moral courage and bold vision (arsh-Dristi)' in resisting the socialist consensus of the fifties, and announces that the lecture will move through three parts: the current scenario, the regulatory framework, and an approach to problems. In the 'Current Scenario' section the lecture documents the sector's phenomenal expansion — from 7,063 companies in 1981 to 39,454 in 1995 — and explains why NBFCs have outgrown the banks at the margin: tailor-made services, lower regulatory weight, simpler sanction procedures, and marginally higher deposit rates that attract small savers. Shah quotes RBI Governor C.… ### Body ## Summary Delivered as the A. D. Shroff Memorial Annual Public Lecture in Mumbai on 29 August 1996 and published by the A. D. Shroff Memorial Trust later that year, Dr. A. C. Shah's address surveys the rise of India's non-banking finance companies (NBFCs) in the wake of the 1991 reforms and asks what kind of regulatory architecture would let them play a useful role alongside the banking system. Shah, a former Chairman and Managing Director of Bank of Baroda who also chaired the RBI Study Group on NBFCs (1992), opens with a tribute to A. D. Shroff's 'extra-ordinary moral courage and bold vision (arsh-Dristi)' in resisting the socialist consensus of the fifties, and announces that the lecture will move through three parts: the current scenario, the regulatory framework, and an approach to problems. In the 'Current Scenario' section the lecture documents the sector's phenomenal expansion — from 7,063 companies in 1981 to 39,454 in 1995 — and explains why NBFCs have outgrown the banks at the margin: tailor-made services, lower regulatory weight, simpler sanction procedures, and marginally higher deposit rates that attract small savers. Shah quotes RBI Governor C. Rangarajan on the rising importance of leasing companies, and draws on Lester Chandler's 'Economics of Money and Banking' to frame NBFCs as the 'outer fringe of the organised financial sector', whose growth reflects functional inter-penetration, the global integration of markets, and the spread of financial technology. He notes that of the 745 NBFCs with net-owned funds above Rs. 50 lakhs registered with RBI, fewer than 100 really qualify as major players. The 'Regulatory Framework' section — which the rendered pages cover through printed p. 15 — summarises the regime that Shah's own Study Group put in place from 1993 onwards. He defends the new architecture's three basic objectives (orderly growth of NBFCs, depositor protection, and the efficacy of monetary and credit policy), the dismantling of the nine-category classification in favour of uniform regulation, the revised definition of Net Owned Funds, capital adequacy raised to 8 per cent, prudential norms on liquidity, single-party exposure, brokerage caps and credit-rating requirements, the new asset-classification and provisioning matrix, compulsory half-yearly returns to RBI, an enlarged role for auditors, and the creation of a High-Powered Supervisory Board with an expert group under P. N. Khanna to design its supervisory framework. Shah is careful to argue that regulators 'have to resist the temptations of over-regulation which would stifle the growth of NBFCs', and at the close of section II calls for an industry-wide Self Regulatory Organisation alongside the RBI's continuing oversight, warning that 'any permissiveness would cost the system dearly in terms of credibility and soundness.' The rendered pages stop just as Shah begins his third section on 'An Approach to Problems'; the remainder of the booklet (about eighteen further pages) is not seen here. ## Key points - The lecture is the 1996 A. D. Shroff Memorial Annual Public Lecture, delivered by Dr. A. C. Shah — former Chairman and Managing Director of Bank of Baroda and Chairman of the RBI Study Group on NBFCs. - Shah frames his subject in three parts: (a) The Current Scenario, (b) The Regulatory Framework, and (c) An Approach to Problems; the rendered pages cover (a) and most of (b). - Indian NBFCs grew from 7,063 in 1981 to 39,454 in 1995 (a compound rate of 14% p.a.); 745 have net-owned funds above Rs. 50 lakhs and are registered with RBI, but fewer than 100 qualify as major players. - Shah attributes NBFC growth to tailor-made services, lower regulatory weight, simpler sanction processes, marginally higher deposit rates, and global trends of functional inter-penetration and integration of markets. - The 1992 Study Group (chaired by Shah) recommended dismantling the nine-category classification, applying uniform regulation, revising Net Owned Funds, raising capital adequacy to 8%, and imposing prudential norms on liquidity, single-party exposure, brokerage and credit rating. - Shah explicitly warns regulators against over-regulation that would stifle the sector, and proposes an industry-wide Self Regulatory Organisation alongside the new High-Powered Supervisory Board. - Pull-quoted authorities include RBI Governor C. Rangarajan on leasing companies and the monetary theorist Lester Chandler on the erosion of bank monopolies through functional diversification. - Only 225 of 745 registered NBFCs have complied with the half-yearly returns requirement — a compliance gap Shah flags as a matter of concern. --- ## [Primary work] FINANCING - THE CHANGING PARADIGM IN INDIA URL: https://indianliberals.in/primary-works/financing-the-changing-paradigm-in-india-uday-kotak-august-6-2003/ ### Summary Delivered as the A. D. Shroff Memorial Lecture on 11 February 2003 and published as a booklet that August, this address by banker Uday Kotak surveys what he calls the ten paradigm shifts reshaping financial services in India. Kotak opens with everyday analogies — the arrival of the black-and-white television, the mobile phone, the Internet bubble — to argue that the financial sector is condemned to absorb every paradigm shift in the real economy, but that it must do so without abandoning the bedrock principles of prudence, trust and conservatism. The lecture is staged as a friendly amendment to Shroff's own classic on industrial finance, banking and insurance: where Shroff defended compartments, Kotak argues that the compartments themselves are dissolving. The nine shifts he develops in the rendered pages move from the conceptual to the structural.… ### Body ## Summary Delivered as the A. D. Shroff Memorial Lecture on 11 February 2003 and published as a booklet that August, this address by banker Uday Kotak surveys what he calls the ten paradigm shifts reshaping financial services in India. Kotak opens with everyday analogies — the arrival of the black-and-white television, the mobile phone, the Internet bubble — to argue that the financial sector is condemned to absorb every paradigm shift in the real economy, but that it must do so without abandoning the bedrock principles of prudence, trust and conservatism. The lecture is staged as a friendly amendment to Shroff's own classic on industrial finance, banking and insurance: where Shroff defended compartments, Kotak argues that the compartments themselves are dissolving. The nine shifts he develops in the rendered pages move from the conceptual to the structural. The vocabulary of "financing" gives way to "financial services"; product-pushing gives way to customer-centric solutions and cross-selling; wholesale industrial term-lending gives way to retail consumer credit (with the telecom sector as the only real project-finance exception); development lending gives way to commercial discipline, with agriculture singled out as a frontier where free pricing of risk could outperform priority-sector mandates; security-backed lending gives way to cash-flow underwriting; institutional silos blur as banks, NBFCs, insurers and asset managers begin to do everything; derivatives return as a parallel trading layer disconnected from underlying paper; and global capital flows turn money into water that moves wherever returns are highest. He closes the rendered portion by elevating risk management — credit, market, operational, counter-party and the new "event risk" born of 9/11 and India–Pakistan tensions — to the central preoccupation of the modern financial-services CEO. Throughout, Kotak balances bullishness on India's services-led growth and consumer-leverage runway against cautionary tales drawn from the dot-com bust, the Korean consumer-credit bubble, the East Asian crisis, and the Enron and WorldCom conflicts-of-interest scandals. The rendered set ends mid-discussion of a final cluster of concerns — the AAA bias of India's bond market and the difficulty of pricing lower-rated paper — with the booklet's last three pages unseen. ## Key points - Frames the lecture as a tribute to A. D. Shroff that updates his "compartmentalising" thesis: institutions now do everything, and the old walls between industrial finance, banking and insurance are dissolving. - Argues that the word "financing" itself is obsolete and should be replaced by "financial services" — a customer-solutions mindset rather than a product-supply mindset. - Identifies a pivot from wholesale industrial term-lending to retail consumer and small-business credit, with telecom as the only large wholesale exception in the prior two years. - Predicts that lifting RBI priority-sector targets would unleash more genuine commercial lending to agriculture than mandates ever produced, because mandated credit attracts only token effort. - Reframes lending as cash-flow underwriting (security as cover, not as the asset financed) and notes the return of derivatives as a layered market disconnected from underlying paper. - Treats global capital flows as water — drawn to interest-differential arbitrage between dollar and rupee positions — and warns that the same liquidity surfeit that funds Indian growth can reverse violently, as in the East Asian crisis. - Elevates risk management to the central CEO concern, naming a new category — "event risk" — that emerged with 9/11 and the India–Pakistan tensions of May 2002. - Cites Enron, WorldCom and the international commercial-bank/investment-bank conflict of interest as warnings India must heed as its own institutions become universal financial supermarkets. --- ## [Primary work] Financial Sector Reforms: The Unfinished Agenda URL: https://indianliberals.in/primary-works/financial-sector-reforms-the-unfinished-agenda-m-narasimhan-december-6-1993/ ### Summary Delivered as the A. D. Shroff Memorial Lecture on Banking in September 1993 and published by the A. D. Shroff Memorial Trust, M. Narasimham — former Reserve Bank Governor and chairman of the Government's Committee on the Financial System — takes stock of India's still-incomplete liberalisation, two years after the 1991 crisis. He frames the lecture as a tribute to Shroff's prescient insistence that a centralised command economy and a pluralist democratic polity do not cohere, and argues that the new economic policy follows from four decades of disappointing results under directed planning rather than from any imported orthodoxy.… ### Body ## Summary Delivered as the A. D. Shroff Memorial Lecture on Banking in September 1993 and published by the A. D. Shroff Memorial Trust, M. Narasimham — former Reserve Bank Governor and chairman of the Government's Committee on the Financial System — takes stock of India's still-incomplete liberalisation, two years after the 1991 crisis. He frames the lecture as a tribute to Shroff's prescient insistence that a centralised command economy and a pluralist democratic polity do not cohere, and argues that the new economic policy follows from four decades of disappointing results under directed planning rather than from any imported orthodoxy. Within the broader reform programme, he singles out the financial sector as the area where reform has lagged: progress in industry, trade and the exchange rate has been real, but agriculture and labour have hardly been touched, and banking reform has proceeded in an ad hoc, piecemeal fashion when the Narasimham Committee's own recommendations were designed as an integrated, jig-saw whole. The lecture's analytical centre is the 1992 securities scam, which Narasimham reads not as a reason to slow reform but as evidence that India had built an over-administered yet under-regulated banking system in which detailed scrutiny of internal minutiae crowded out attention to productivity, profitability and prudential supervision. He defends the steps already taken — capital adequacy norms, transparent accounting and provisioning standards, reductions in SLR and CRR, branch-licensing liberalisation and private-bank entry — while warning that without recapitalisation through a vehicle such as the Assets Reconstruction Fund, banks will be unable to clean their books or access the capital market. He pushes back firmly against the official reluctance to redefine and cap priority-sector lending, insisting that the Committee never opposed credit to agriculture or small industry but objected to subsidised, quantity-driven directed lending that bred non-performing assets and forced cross-subsidisation through high interest rates on the rest of the economy. A second cluster of arguments addresses interest rates, internal organisation and ownership. Narasimham welcomes the move towards market-determined rates, calls the Tandon and Chore quantitative norms anachronistic in a prudentially supervised market environment, and urges modernisation of internal audit and computerisation. He defends the entry of private and foreign banks against the post-scam political backlash, criticises the Banking Regulation Act's one-per-cent voting cap and rules on cross-directorships and the chairman-cum-CEO model as regulatory hangovers from the social-control era, and argues that the most important pending recommendation is the granting of genuine operational flexibility and internal autonomy to bank managements within a rule-based rather than discretionary regulatory framework. The booklet covers the lecture itself plus the Trust's front matter, with the closing few pages of the address falling outside the rendered chunk. ## Key points - Narasimham positions financial-sector reform as the unfinished portion of an integrated 1991-onwards liberalisation programme, contrasting real progress in trade, industry and the exchange rate with stalled agriculture, labour and banking reforms. - He treats the Committee on the Financial System's recommendations as a jig-saw whole and criticises the Government's ad hoc, piecemeal implementation as 'incrementalism rather than a sequencing of reform as part of an integrated programme.' - The 1992 securities scam is diagnosed as the product of an 'over-administered but underregulated' system, not a case for slowing liberalisation; Narasimham argues the scandal sharpens, rather than blunts, the reform imperative. - He defends the Committee's proposed Assets Reconstruction Fund and urges authorities to find some workable mechanism to take impaired assets off bank books so banks can recapitalise from the market. - On priority-sector credit, he rejects the charge that the Committee opposed lending to agriculture and small industry, insisting that subsidised, quantity-driven directed credit hurt borrowers, banks and the wider 'high cost economy'. - He calls for market-determined interest rates, abolition of the Tandon and Chore quantitative norms, and a re-examination of consortium lending, which he likens to a cartel. - He criticises the Banking Regulation Act's one-per-cent voting-rights cap, the rules on cross-directorships and the mandated chairman-cum-CEO model as anachronisms from the social-control phase and pushes back against the post-scam backlash on foreign banks. - The most important pending reform, he argues, is operational autonomy and internal flexibility for bank managements within a transparent, rule-based — rather than discretionary — supervisory framework. --- ## [Primary work] Financing Under Planned Economy URL: https://indianliberals.in/primary-works/financing-under-planned-economy-m-a-master-feb6-1964/ ### Summary M. A. Master's 1964 Forum of Free Enterprise booklet is a tightly argued audit of how India proposes to pay for the Third Five-Year Plan. Master opens by faulting the Planning Commission for headlining a 'Rs. 10,400 crores' plan when the real outlay, public and private together, comes to Rs. 11,600 crores; the deduction of current outlay and the inclusion of inventories, he argues, obscure rather than clarify the financing problem. He then walks systematically through the four sources of finance the Commission claims it will tap — additional taxation, foreign exchange, borrowings from within the country, and surpluses from public enterprises — and shows that the Commission has consistently overestimated each one. Additional taxation has had to jump from a budgeted Rs. 2,400 crores to Rs. 2,750 crores and is squeezing a population already 'paying nearly 200%' more in central interest charges than at the start of Plan-era India. The second half of the pamphlet turns from arithmetic to political economy.… ### Body ## Summary M. A. Master's 1964 Forum of Free Enterprise booklet is a tightly argued audit of how India proposes to pay for the Third Five-Year Plan. Master opens by faulting the Planning Commission for headlining a 'Rs. 10,400 crores' plan when the real outlay, public and private together, comes to Rs. 11,600 crores; the deduction of current outlay and the inclusion of inventories, he argues, obscure rather than clarify the financing problem. He then walks systematically through the four sources of finance the Commission claims it will tap — additional taxation, foreign exchange, borrowings from within the country, and surpluses from public enterprises — and shows that the Commission has consistently overestimated each one. Additional taxation has had to jump from a budgeted Rs. 2,400 crores to Rs. 2,750 crores and is squeezing a population already 'paying nearly 200%' more in central interest charges than at the start of Plan-era India. The second half of the pamphlet turns from arithmetic to political economy. Master draws what he calls the 'vital distinction' between the financing of the Public and Private Sectors: 30% of public-sector capital comes out of tax revenue and never has to be serviced, whereas every rupee of private capital must earn a dividend or vanish. From this asymmetry he argues that the Private Sector is being squeezed out of a single national pool of savings already drained by deficit financing, compulsory deposits, small savings schemes, and direct state borrowing from the Reserve Bank. Public enterprises that were meant to throw off surpluses (Hindustan Steel especially) are instead running losses while enjoying tax holidays the private sector is denied. Quoting Sir A. Ramaswami Mudaliar and Eugene Black on the exhaustion of the capital market and the mortgaging of future export earnings, Master closes with a warning that the nationalisation of banks would leave 'the Private Sector and democracy' both in danger, and calls for fiscal, taxation and credit policies that free private enterprise to play its role in building 'a strong and prosperous India of tomorrow.' ## Key points - The Third Plan's real outlay is Rs. 11,600 crores (Rs. 7,500 public + Rs. 4,100 private), not the Rs. 10,400 crores publicly headlined; Master finds the Planning Commission's accounting opaque and misleading. - Additional taxation budgeted at Rs. 2,400 crores for the Plan period has already overshot to Rs. 2,750 crores, with central interest charges by 1960-61 standing at nearly 200% of their 1951-52 level. - The country must finance not only the Rs. 11,600 crores of the Third Plan but also Rs. 3,000 crores of committed expenditure carried over from the Second Plan — a structural cost of 'planned economy' rarely acknowledged. - Foreign exchange estimates have been wrong by almost 100%: India had to borrow Rs. 2,059 crores instead of the projected Rs. 1,100 crores during the Second Plan, and external debt servicing now consumes a fast-rising share of export earnings. - There is only one pool of national savings; deficit financing, compulsory deposits, small savings drives and direct RBI borrowing siphon it toward the Public Sector and crowd the Private Sector out of legitimate finance. - Public-Sector capital enjoys a hidden subsidy — 30% of it comes from tax revenue and requires no dividend, while every rupee raised by private companies must be serviced or it dries up. - Public enterprises promised as surplus-generators (notably Hindustan Steel) are instead booking losses and enjoy interest holidays that the Reserve Bank Report itself flags as 'not sufficiently firm'. - Nationalisation of banks would cut off the Private Sector's 'real sheet-anchor' — at peak season, industry takes 54% of scheduled bank advances — and would, Master warns, endanger both private enterprise and democracy. --- ## [Primary work] FOOD AND ENVIRONMENT – WALKING THE TIGHTROPE URL: https://indianliberals.in/primary-works/food-and-environment-walking-a-tightrope-by-dr-na-swaminathan-jan-2001/ ### Summary Dr. M. S. Swaminathan's Forum of Free Enterprise pamphlet, reprinted from the January–March 2000 issue of *Financing Agriculture*, addresses what he calls the central tightrope of the new century: producing more food from a shrinking base of land and water without further damaging the ecological foundations of agriculture. He opens with the World Scientists' Warning to Humanity and the Hadley Centre's sea-level projections to frame agriculture as inseparable from climate, biodiversity and the global commons, then narrates how post-1947 India moved from a 0.1 percent annual growth in food production to a ten-fold rise in wheat output by 1998–99 — the green revolution that 'proved doomsday predictions wrong'. The core argument is a call for an *evergreen revolution*: productivity gains rooted in ecology, equity and employment rather than in chemical intensification or proprietary control.… ### Body ## Summary Dr. M. S. Swaminathan's Forum of Free Enterprise pamphlet, reprinted from the January–March 2000 issue of *Financing Agriculture*, addresses what he calls the central tightrope of the new century: producing more food from a shrinking base of land and water without further damaging the ecological foundations of agriculture. He opens with the World Scientists' Warning to Humanity and the Hadley Centre's sea-level projections to frame agriculture as inseparable from climate, biodiversity and the global commons, then narrates how post-1947 India moved from a 0.1 percent annual growth in food production to a ten-fold rise in wheat output by 1998–99 — the green revolution that 'proved doomsday predictions wrong'. The core argument is a call for an *evergreen revolution*: productivity gains rooted in ecology, equity and employment rather than in chemical intensification or proprietary control. Swaminathan walks the reader through three converging revolutions — the gene revolution, the ecotechnology revolution that blends traditional and frontier knowledge, and the information and communication revolution — and warns that because the new science is largely proprietary, public-good institutions must mobilise it for the unreached. He defends the precautionary principle on GMOs, calls for a Biosafety Protocol under Article 19 of the CBD, and urges broad-based National Commissions on Genetic Modification for Sustainable Food and Health Security composed of scientists, environmentalists, farmers' and women's organisations, civil society and regulators. A long second movement examines intellectual property and benefit-sharing under TRIPS Article 27(b), pressing all nations to enshrine the ethics and equity principles of CBD Articles 8(j) and 15, restructuring UPOV into a Union for the Protection of Farmers' and Breeders' Rights, and rewarding tribal and rural custodians of medicinal plants such as *Trichopus zeylanicus*, *Bacopa monnieri* and *Prunus africana*. Illustrative MSSRF projects — GIS-driven hunger mapping in Dharmapuri district and the Gulf of Mannar Biosphere Reserve Trust modelled on UNESCO's Seville vision — show what the prescriptions look like on the ground. The pamphlet closes with lessons on development assistance, drawing on India's experience with USAID's Land Grant model, the Rockefeller Foundation's role in establishing the IARI Post-graduate School in 1958 and the All-India Coordinated Research Projects, the Ford Foundation's Community Development Programme and Water Technology Centre, CGIAR partnerships with CIMMYT and IRRI, and the PL 480 episode of 1965–66. The repeated lesson is that scientific leadership 'must be home grown and not externally imposed' — external aid succeeds only where strong national commitment, humility from donor agencies, and investment in NARS leadership training are already in place. ## Key points - Frames 21st-century agriculture as a 'tightrope' between rising food demand and the ecological limits of land, water, biodiversity and climate. - Proposes an 'evergreen revolution' — sustainable productivity growth grounded in ecology, economics, social and gender equity, and employment generation — as the successor to the public-funded green revolution. - Identifies three converging revolutions (gene, ecotechnology, information & communication) and warns that frontier science is increasingly proprietary, requiring public-good mobilisation for the unreached. - Endorses the precautionary principle for GMOs and calls for an internationally agreed Biosafety Protocol under Article 19 of the Convention on Biological Diversity, plus broad-based National Commissions on Genetic Modification for Sustainable Food and Health Security. - Argues that TRIPS Article 27(b) of the World Trade Agreement must incorporate the ethics and equity principles of CBD Articles 8(j) and 15, and that UPOV should be restructured into a Union for the Protection of Farmers' and Breeders' Rights. - Illustrates MSSRF work — GIS-based hunger mapping in Dharmapuri district, Tamil Nadu, and the Gulf of Mannar Biosphere Reserve Trust — as templates for translating biodiversity policy into local action. - Reviews how Rockefeller and Ford Foundations, USAID's Land Grant partnerships, and CGIAR centres (CIMMYT, IRRI) helped build Indian agricultural research capacity from 1957–1970, while criticising supply-driven, inflexible government aid. - Concludes that effective scientific leadership must be 'home grown and not externally imposed', and that development assistance works only where there is strong national commitment, donor humility, and investment in NARS leadership. --- ## [Primary work] FOOD CRISIS IN INDIA — CAUSES & CURE URL: https://indianliberals.in/primary-works/food-crisis-in-india-causes-and-cure-b-r-shenoy-m-a-sreenivasan-15-february-1975/ ### Summary This Forum of Free Enterprise pamphlet, dated 15 February 1975, collects two short essays on India's food crisis prefaced by an anonymous Forum introduction. The lead piece, drawn from Prof. B. R. Shenoy's inaugural address to the Farmers' Federation of India convention at Pathankot on 20 December 1974, argues that India's persistent foodgrain deficits are the cumulative result of policy choices that have starved agriculture of capital while privileging heavy industry, public-sector outlays, deficit financing and below-market procurement. The companion essay by M. A. Sreenivasan, a former Agriculture Minister of Mysore, asks why Indian plantations — coffee, tea, rubber — flourish on the same earth and monsoon under which foodgrain agriculture languishes, and traces the disparity to colonial-era land-revenue provisions, security of title and the legal-political treatment of cultivation as an industry. The introduction crystallises the argumentative centre of the volume: the crisis is one of production, not distribution; food zones, monopoly procurement and deficit financing aggravate it; and the remedy lies in restoring agriculture's claim on national investment resources. ### Body ## Summary This Forum of Free Enterprise pamphlet, dated 15 February 1975, collects two short essays on India's food crisis prefaced by an anonymous Forum introduction. The lead piece, drawn from Prof. B. R. Shenoy's inaugural address to the Farmers' Federation of India convention at Pathankot on 20 December 1974, argues that India's persistent foodgrain deficits are the cumulative result of policy choices that have starved agriculture of capital while privileging heavy industry, public-sector outlays, deficit financing and below-market procurement. The companion essay by M. A. Sreenivasan, a former Agriculture Minister of Mysore, asks why Indian plantations — coffee, tea, rubber — flourish on the same earth and monsoon under which foodgrain agriculture languishes, and traces the disparity to colonial-era land-revenue provisions, security of title and the legal-political treatment of cultivation as an industry. The introduction crystallises the argumentative centre of the volume: the crisis is one of production, not distribution; food zones, monopoly procurement and deficit financing aggravate it; and the remedy lies in restoring agriculture's claim on national investment resources. ## Essays ### FOOD CRISIS IN INDIA — CAUSES & CURE *By B. R. Shenoy* Shenoy opens by reminding readers that India, like the pre-war United States, is a nation of farmers — yet two decades of policy have inverted the natural order of investment, taxing the countryside to subsidise heavy industry. Marshalling evidence from the Reserve Bank of India's Rural Credit Survey 1951-52 and Rural Debt and Investment Survey 1961-62, from rising hundi and bazar bill rates, and from the post-1961 collapse in per-capita farm investment, he argues that the apparent 1971 food self-sufficiency was an artefact of favourable weather and a one-crop wheat shift, not a structural improvement. He chronicles the 1972 surrender of PL-480 entitlements, the rapid collapse of buffer stocks, the 1973-74 ration cuts in Bombay and Calcutta, the 1974 renationalisation of the wheat trade that produced 'lathyrism' from Kesari dal substitution in U.P. and M.P., and famine-like conditions across the deficit states. Two preconditions, Shenoy insists, must be met: a drastic scaling-down of public-sector and industrial outlays to release credit and capital for agriculture, and the abolition of zoning, monopoly procurement and arbitrary ceilings on foodgrain prices, so that food farmers receive competitive market returns on the same logic by which exporters of foreign exchange are offered incentives. Inflation, he insists against the Agricultural Prices Commission's contrary view, is a monetary phenomenon driven by printing-press finance of Union and State budget deficits — not by farm prices — and the corrective lies in fiscal discipline, not in further hidden taxation of cultivators through procurement. Quoting his own PL 480 AID AND INDIA'S FOOD PROBLEM (1974), he closes by warning that the wheat farmer, branded variously hoarder, smuggler and Kulak under MISA-era policing, will rationally shift land away from wheat — and that only parity treatment with other entrepreneurs can put India on the road to Garibi Hatao. - India has appropriated 65 per cent of total investment resources to a public sector that produces only 3.5 to 6.3 per cent of national product, leaving 87-92 per cent of the economy with the leftover 35 per cent — the structural cause of agriculture's capital starvation. - Per-capita investment in farming dwindled from 1.7 per cent per year in the decade ending 1961 to 0.3 per cent per year in 1961-72; output growth fell from 0.8 per cent to negative in step. - Nationalised commercial banks operating 6,175 rural branches collect Rs. 459 crores in deposits but advance only Rs. 191 crores back to the rural sector, functioning as 'suction pumps' draining capital to urban manufacturing. - The 1972 decision to forego PL 480 imports and the 14,300-tonne Basmati export were premised on a one-crop wheat illusion; production then declined 3.3 million tonnes in 1972 and another 8 million tonnes in 1973, forcing the 1973-74 ration cuts of 36 per cent in Bombay and 26 per cent in Calcutta. - Inflation is a monetary phenomenon traceable to printing-press financing of Union and State budget deficits; the Agricultural Prices Commission's price-ceiling logic confuses consequence with cause and arbitrarily caps the incomes of food-producing farmers who are already among the poorest in the world. - Food zones are 'a device of taxing farmers to finance the subsidy' and instrumental in retarding production in granary states; the public distribution system's needs should instead be met through all-India tenders at competitive prices. - Under the wheat-trade renationalisation of March 1974, the wheat farmer who stocks, sells, transports or shifts grain risks being branded a hoarder, black-marketeer or smuggler — even attracting MISA detention — making rational withdrawal from wheat cultivation a certainty. ### TREAT AGRICULTURE AS AN INDUSTRY *By MA Sreenivasan* In the rendered opening of his essay, Sreenivasan poses a paradox: how did the green hills of Coorg and the Bababudans come to be clothed with coffee, pepper and orange while the same Indian soil, sun and monsoon produce rice yields that rank India only 50th in the world and cotton yields 40th? Drawing on his January 1918 entry into the Mysore Civil Service at Chikmagalur, where as a probationary assistant commissioner he processed Takavi loan applications from struggling coffee planters, he reconstructs the Mysore Land Revenue Code and Revenue Manual provisions on 'Shraya' — improvement of land by cultivation. Waste land was granted at Rs. 20 per 0.405 hectares with a 30-year guarantee, free of assessment for three years, half-assessed for the next two and fully assessed only from the sixth year onward; no grant was made unless the applicant could raise the capital to start the industry; one-fifth of the area had to be planted each year; and the grantee could draw toddy from Bagani trees for the bona fide bread of his household. From this institutional history Sreenivasan turns to his central indictment: agricultural land in independent India has become the very reverse of 'Sthira' (permanent, certain). Title is a scrap of paper blown about by every political breeze; landholding ceilings have been ratcheted from 18 standard acres in 1961 to ten; the river of capital that once flowed to land has dried or been diverted; and the cultivator is derecognised as an investor and stigmatised as an 'absentee landlord' in a way no shareholder in Tata Steels, Binny's or the Mysore Sugar Company is ever stigmatised. The rendered pages stop before his policy recommendations. - India ranks first in the world in tea yield per hectare and fourth in coffee — but only 50th in rice and 40th in cotton — even though the same Indian soil, sun, monsoon, skills and hands work both sectors. - Mysore's Land Revenue Code and Revenue Manual treated waste-land grants as 'Shraya' (improvement by cultivation), with 30-year guarantees, graduated assessment holidays, low upset prices and capital-raising conditions designed to attract bold private investment into plantation industry. - The Mysore Manual explicitly described coffee planting as 'industry' and required one-fifth of the granted area to be planted every year, demonstrating an industrial conception of cultivation that contemporary food agriculture has been denied. - Sreenivasan invokes the ancient Indian description of land as 'Sthira' — permanent, certain — and the eight-fold deed-of-transfer formula (nidhi nikshepa, jala tharu, pashanadi, ashtabhoga tejas swamyam, until the sun and moon last) to argue that the constitutional and political treatment of agricultural land has betrayed a millennia-old legal tradition. - The land-ceiling regime has been lowered from 18 standard acres in 1961 to ten and is treated as a 'platform, if not the playground of politics' on which every party vies to outdo the others, while the same investor in sugar, steel or textile shares faces no equivalent stigma of absenteeism. --- ## [Primary work] For Freedom, Farm And Family URL: https://indianliberals.in/primary-works/for-freedom-farm-and-family-m-a-sreenivasan-aug7-1959/ ### Summary This Forum of Free Enterprise booklet collects three speeches from a meeting organised by the Forum's Bangalore Centre on 29 May 1959 — a gathering that helped launch the political mobilisation which would crystallise as the Swatantra Party. The order is preserved: a welcome speech by M. A. Sreenivasan, chairman of the Bangalore Centre, titled "Coop and Kotow"; the main address "Nagpur and After" by M. R. Masani, M.P.; and the presidential speech "For Freedom, Farm and Family" by C. Rajagopalachari. The argumentative centre is a frontal attack on the Congress's Nagpur Resolution of January 1959 on joint cooperative farming, read as the latest step in a drift toward state capitalism and "Communist dictatorship". All three speakers call for a non-Socialist opposition — a "Middleclass Front" and "Small Man's Party" — to defend peasant proprietorship, parliamentary democracy and free enterprise against what Rajaji names a "Totalitarian State". ### Body ## Summary This Forum of Free Enterprise booklet collects three speeches from a meeting organised by the Forum's Bangalore Centre on 29 May 1959 — a gathering that helped launch the political mobilisation which would crystallise as the Swatantra Party. The order is preserved: a welcome speech by M. A. Sreenivasan, chairman of the Bangalore Centre, titled "Coop and Kotow"; the main address "Nagpur and After" by M. R. Masani, M.P.; and the presidential speech "For Freedom, Farm and Family" by C. Rajagopalachari. The argumentative centre is a frontal attack on the Congress's Nagpur Resolution of January 1959 on joint cooperative farming, read as the latest step in a drift toward state capitalism and "Communist dictatorship". All three speakers call for a non-Socialist opposition — a "Middleclass Front" and "Small Man's Party" — to defend peasant proprietorship, parliamentary democracy and free enterprise against what Rajaji names a "Totalitarian State". ## Essays ### "Coop and Kotow" *By MA Sreenivasan* Sreenivasan's welcome speech frames the Bangalore meeting as a stand by two "champions of freedom" — Rajaji and Minoo Masani — against the dimming of the "lamps of freedom" eleven years after Independence. He marshals the doubts of the common man into a series of rhetorical questions about persistent slums, dearer food and cloth, falling rupee value, unemployment, bureaucratic proliferation and an army of party men sitting in officialdom, asking whether the Nagpur Resolution's "Violent Co-operation" will undo the freedom won by Gandhian non-violent non-co-operation. He closes with the hope that Rajaji's "invisible telescope" and Masani's inside knowledge will provide authentic answers to the questions troubling the country. - Positions Rajaji and Masani as fearless champions of freedom willing to travel and speak only because the situation is grave. - Catalogues popular grievances: slums, dearer food and cloth, falling rupee, unemployment, ten ministers and proliferating offices where one served before. - Frames the Nagpur Resolution as a "Violent Co-operation" that threatens the freedom won by Gandhian Non-violent Non-co-operation. - Mocks the "Socialistic Juggernaut of Avadi" for being driven without brakes or steering. - Hands over to Rajaji and Masani as authoritative diagnosticians of the country's confusion. ### Nagpur and After *By M. R. Masani, M.P.* Masani's main address takes up the diagnostic question Sreenivasan posed and answers it: the Nagpur Resolution and the broader Nehru-government policy are pushing India toward Communist dictatorship by destroying peasant proprietorship, concentrating power in a few hands, dismantling the law of supply and demand, and disenfranchising the voter through a near-monopoly Congress. He surveys trends — falling per capita income, rising prices, decline in agriculture, mortgaging of national credit — and warns that "State Capitalism" plus collective agriculture cannot coexist with parliamentary democracy. He cites the experience of Iron Curtain Eastern Europe, Hungary, Tibet, and the recantations of Polish reformers reading Adam Shaff, against Indian socialists' belief in benign collectivisation. The constructive half of the speech argues that the Forum of Free Enterprise's public-relations work is no longer enough: India needs a new political party — a broad-based "Middleclass Front" and "Small Man's Party" trusting people, peasant proprietors and the price mechanism — to provide an effective alternative at the 1962 elections. Masani ends with Ludwig Erhard's slogan "Let the men and the money loose" and a hope for a non-Socialist coalition led by Rajaji, with whom Jayaprakash Narayan and Prof. N. G. Ranga share the diagnosis. - Reads the Nagpur Resolution as confirmation that Nehru-government policies are taking India toward Communist dictatorship. - Lists the worsening trends — falling per capita income, killed incentives, concentration of power — that make collectivisation plausible. - Insists State Capitalism and parliamentary democracy cannot coexist; cites Tibet, Hungary, Poland, Yugoslavia and Adam Shaff as evidence. - Argues a non-Socialist opposition is essential because the last election left voters with no alternative pattern to vote for. - Calls for a "Middleclass Front" and "Small Man's Party" rooted in peasant proprietors, professionals, technicians and teachers — quoting Erhard's "Let the men and the money loose". ### For Freedom, Farm and Family *By C. Rajagopalachari* Rajaji's presidential address argues that the deepest cure for the country's drift is the recovery of independent thinking by citizens who have grown indolent by leaving everything to Nehru. He identifies "megalomania" as the affliction of Indian planning and locates the single most urgent problem in food production, against which compulsory transfer of land from cultivating owners to multiple management — the Nagpur Resolution dressed up as "joint farming" or "co-operation" — will deepen the deficit by destroying the incentive of the owner-cultivator. He extends the warning to State Trading in foodgrains, citing the Gujarati proverb "when the State takes to trade, the people take to begging", and to ever-heavier taxation that creates unemployment by closing one set of businesses to fill another. He ends with the famous formula that the time has come to protect the farm and the family against the inroads of a Totalitarian State, and to build — well before the 1962 election — an opposition first in the country and afterwards in Parliament. - Diagnoses Indian citizens' atrophy of independent thinking as the deepest cause of the drift, urging that everyone must think for themselves. - Names "megalomania" the disease of planning and the deficit in food production the most urgent single problem. - Attacks multiple ownership and multiple management of land — joint farming under the Nagpur Resolution — as the destruction of the cultivator's incentive. - Rejects State Trading in foodgrains and excessive taxation as forms of "unconscious socialism" that breed unemployment and dependency. - Calls for an opposition built first in the country and then in Parliament to protect "the farm and the family" against the Totalitarian State. --- ## [Primary work] Foreign Capital URL: https://indianliberals.in/primary-works/foreign-capital-by-kiran-nanda-december-17-1995/ ### Summary Kiran Nanda, Chief Economist of Gujarat Ambuja Cements, delivers a Forum of Free Enterprise booklet based on her keynote address at a Bombay seminar on "FOREIGN CAPITAL & GLOBALISATION" in September 1995. She argues that the opening of the Indian economy to foreign capital — central to the New Industrial Policy of 1991 — is indispensable if India is to lift growth from 5–6 per cent to 7–8 per cent. Foreign capital, in her telling, plugs the savings-investment gap, especially in infrastructure (roads, power, telecoms, railways requiring at least $200 billion over a decade), modernises industry, brings managerial and marketing skills, and helps reorient the work culture toward international competitiveness. The booklet walks the reader through the architecture of the post-1991 reforms: 51 per cent foreign equity in 34 high-priority industries, amendment of FERA, tariff rationalisation, current-account convertibility, MRTP dilution, GDR issuance, and FII directives.… ### Body ## Summary Kiran Nanda, Chief Economist of Gujarat Ambuja Cements, delivers a Forum of Free Enterprise booklet based on her keynote address at a Bombay seminar on "FOREIGN CAPITAL & GLOBALISATION" in September 1995. She argues that the opening of the Indian economy to foreign capital — central to the New Industrial Policy of 1991 — is indispensable if India is to lift growth from 5–6 per cent to 7–8 per cent. Foreign capital, in her telling, plugs the savings-investment gap, especially in infrastructure (roads, power, telecoms, railways requiring at least $200 billion over a decade), modernises industry, brings managerial and marketing skills, and helps reorient the work culture toward international competitiveness. The booklet walks the reader through the architecture of the post-1991 reforms: 51 per cent foreign equity in 34 high-priority industries, amendment of FERA, tariff rationalisation, current-account convertibility, MRTP dilution, GDR issuance, and FII directives. Nanda surveys the numbers — FDI approvals rising from Rs.5.3 bn in 1991 to Rs.118.6 bn in 1994, NRI share of FDI above 30 per cent, the four-state concentration (Maharashtra, Delhi, Tamil Nadu, West Bengal) of inflows, and the comparative position of India vis-à-vis China as a "Big Emerging Market." She notes that the public sector's grip is loosening: only atomic energy, coal and lignite, and mineral oils remain reserved. A substantial middle section addresses contested questions: whether Indian industry is being discriminated against (she lists non-tariff barriers, high interest rates, and a labyrinthine bureaucracy as genuine handicaps), whether foreign capital is inflationary (depends on end use), whether it substitutes for domestic savings (it supplements them while bringing technology and systems), and the impact on the Rupee (mild depreciation unlikely to scare FIIs that already price in 4–5 per cent currency loss). She is critical of ad-hocism in policy, the Enron Project controversy, depleting forex reserves, and the persistent fiscal deficit, while welcoming the Depositories Ordinance, Bilateral Investment Treaties, and the Finance Minister's promised arbitration and insurance reforms. Nanda closes with measured optimism — "only two cheers" for the new economy policy, with the third reserved for when reforms acquire irreversible momentum. The signpost, she warns, is not the destination; foreign capital can provide temporary growth, but India must set its own house in order through SEB reform, infrastructure delivery, and a clear long-term policy framework. ## Key points - Foreign capital is required to lift Indian growth from 5–6% to 7–8% p.a. and finance the $200 billion infrastructure need over ten years. - Post-1991 reforms — 51% FDI automatic approval in 34 industries, FERA amendment, tariff rationalisation, current-account convertibility, MRTP dilution — provided the main boost. - FDI approvals rose from Rs.5.3 bn (1991) to Rs.118.6 bn (1994), aggregating Rs.397.5 bn in the post-liberalisation period; actuals are about 28% of approvals. - Inflows are concentrated in four industrialised states (Maharashtra, Delhi, Tamil Nadu, West Bengal) and in fuels, metallurgy, chemicals, services and food processing. - India and China are now jointly courted as Big Emerging Markets; NRIs make up over 30% of FDI and could replicate the Chinese-overseas-investor pattern. - Crucial debates surveyed: alleged discrimination against Indian industry, the inflationary potential of foreign capital, its relation to domestic savings, and pressure on the Rupee. - Persistent constraints — high tax structure, weak infrastructure, poor labour relations, IPR protection gaps, ad-hoc policymaking, and the fiscal deficit — could choke the inflow. - Reforms must accelerate via corporate-tax harmonisation, Company Act revision, faster government clearances and a clear long-term policy framework; foreign capital alone cannot fix infrastructure. --- ## [Primary work] FOREIGN EXCHANGE CRISIS — THE WAY OUT URL: https://indianliberals.in/primary-works/foreign-exchange-crisis-and-the-way-out-a-d-shroff-feb5-1962/ ### Summary This Forum of Free Enterprise booklet collects three talks delivered in Bombay, Bangalore and Ahmedabad in the last quarter of 1962, all diagnosing India's foreign exchange crisis at the threshold of the Third Five-Year Plan. The contributors — A. D. Shroff (President of the Forum), R. V. Murthy (Chairman of the Press Guild of India, editor of Records and Statistics) and Dr. Lanka Sundaram (former M.P., editor of Commerce and Industry) — converge on the verdict that the crisis is not a transient shock but a structural product of careless planning, gross underestimation of the foreign-exchange component of the Plans, and the dependence on external assistance that the planners had concealed from themselves and from the public. Shroff traces the collapse of the Second Plan's foreign balances from Rs. 746 crores to Rs. 140 crores despite double the anticipated foreign aid, and unpacks the implications of P.L. 480 and "tied" loans. Murthy surveys remedial proposals — IDA loans, export-promotion machinery, mobilisation of private gold hoards — while warning that none will save the country unless the intensity of the problem is honestly recognised.… ### Body ## Summary This Forum of Free Enterprise booklet collects three talks delivered in Bombay, Bangalore and Ahmedabad in the last quarter of 1962, all diagnosing India's foreign exchange crisis at the threshold of the Third Five-Year Plan. The contributors — A. D. Shroff (President of the Forum), R. V. Murthy (Chairman of the Press Guild of India, editor of Records and Statistics) and Dr. Lanka Sundaram (former M.P., editor of Commerce and Industry) — converge on the verdict that the crisis is not a transient shock but a structural product of careless planning, gross underestimation of the foreign-exchange component of the Plans, and the dependence on external assistance that the planners had concealed from themselves and from the public. Shroff traces the collapse of the Second Plan's foreign balances from Rs. 746 crores to Rs. 140 crores despite double the anticipated foreign aid, and unpacks the implications of P.L. 480 and "tied" loans. Murthy surveys remedial proposals — IDA loans, export-promotion machinery, mobilisation of private gold hoards — while warning that none will save the country unless the intensity of the problem is honestly recognised. Sundaram, the most polemical of the three, attacks the unreliability of government statistics, the camouflaging of Plan documents, and the absence of parliamentary scrutiny over treaties such as those tied to P.L. 480, P.L. 665, GATT, the E.C.M. and the Treaty of Rome, calling for a non-political National Committee on Budget reforms before "our economy will be a runaway horse". ## Essays ### I [Foreign Exchange Crisis — The Way Out] *By A. D. Shroff* Shroff opens the booklet by declaring that the foreign exchange crisis is "a built-in crisis in our Plans". Recounting the Second Plan's experience, he shows that the planners had assumed Rs. 800 crores of foreign assistance and a Rs. 200-crore drawdown of London balances; instead India received Rs. 1,600 crores of assistance but its balances still collapsed from Rs. 746 crores to Rs. 140 crores. He attributes the wreckage to the import spree of 1955–56 ordered under Commerce Minister T. T. Krishnamachari's anti-inflation theory that imports would mop up Plan-induced purchasing power. He then walks the reader through the political economy of foreign assistance — the gradual conversion of accumulated sterling balances after Bretton Woods, the rise of P.L. 480 surplus-commodity loans (the largest single source of relief), the trap of "tied" and "untied" loans, and the maintenance-imports problem of the three steel plants. With Rs. 500 crores of repayment due in the Third Plan and India not yet able to export enough, Shroff warns that the day may come when India is "compelled to declare its inability to repay or meet its obligations". - The foreign exchange crisis is structural, not accidental — built into the planners' underestimation of the Plans' foreign exchange requirements. - Despite receiving Rs. 1,600 crores of foreign assistance (double the anticipated Rs. 800 crores), India's London balances fell from Rs. 746 crores to Rs. 140 crores by the end of the Second Plan. - The 1955–56 import spree under Commerce Minister T. T. Krishnamachari — justified as anti-inflationary mopping-up of purchasing power — is identified as the real genesis of the crisis. - P.L. 480 is the largest single source of relief but creates a long-term repayment-in-rupees liability that mortgages future generations. - Distinguishes "development imports" from "maintenance imports" of components and raw materials; the three steel plants will idle without continued maintenance-imports, even though installed capacity has grown. - Warns that with Rs. 500 crores of loan repayments due in the Third Plan, India faces the prospect of being unable to honour its external obligations. ### II *By R. V. MURTHY* Murthy, opening with an R. K. Laxman cartoon — "The situation is not dangerous, though serious now. Now, the situation is not serious, but pretty dangerous" — argues that the foreign exchange position is what it has always been: a persistent adverse trade balance worsening since the First Plan. He prints comparative reserve figures for West Germany, the United States, France, Britain and India to show that India alone must build infrastructure by drawing on a meagre Rs. 3,000-crore reserve, financed largely through tied loans of dubious utility. He surveys remedies: a separate Ministry for International Trade and Export Promotion; emulation of Japanese export adaptability; more IDA (50-year, near-interest-free) loans from the World Bank, citing Eugene Black; a reappraisal of "tied" loans whose actual project cost exceeds the credit; restriction of foreign-investment and technical-collaboration agreements to truly essential sectors; standby IMF credit; rupee-payment agreements with East European countries; and the gold-hoard mobilisation idea (which he rejects as politically impossible and certain to drive private gold to the black market). His verdict: no single device will rescue India unless the seriousness of the situation is honestly recognised. - Frames the crisis with R. K. Laxman's cartoon — "not dangerous, though serious" / "not serious, but pretty dangerous" — to ridicule official complacency. - Contrasts India's reserves (Rs. 3,000 crores, ~2.6 months of imports) with West Germany (6.8 months), the United States (14 months), France, the Netherlands, Belgium-Luxembourg, Britain and Denmark. - Cites three problems of utilisation of tied IDA aid: leeway between estimated and actual project cost, the political economy of remittance of profits, and the slow drawdown rate. - Argues for a separate Ministry of International Trade and Export Promotion and for emulating Japan's export adaptability while keeping prices and quality competitive. - Rejects compulsory acquisition of private gold hoards on grounds of administrative infeasibility, political unpopularity, and likely diversion to black markets and exchange auctions. - Endorses standby IMF credit and rupee-payment agreements with East European countries while warning that even these have severe limitations. ### III *By DR. LANKA SUNDARAM* Sundaram delivers the most polemical of the three addresses, repudiating the "facile assumption" that the foreign exchange crisis is a "built-in" feature of the Plans. He argues instead that the problem is "the result of a completely runaway system of economics and economic policy" and that even the available figures lack validity — the Reserve Bank Bulletin, the Report on Currency and Finance and the Economic Survey give materially different totals for the same years' adverse balance. Drawing on his long parliamentary experience (he chaired processing committees for both the First and Second Plans), Sundaram dissects the absence of accountancy in Plan documents — gross under-estimation of revenue, concealment of revenue, gross over-estimation of expenditure — and the politically motivated camouflage of project costs and unutilised loans (Rs. 1,386 crores carried forward from earlier Plans according to the latest Economic Survey, 42 per cent of received aid still unutilised). He details the lack of parliamentary scrutiny over treaties: India has had no Treaty of Friendship, Trade and Navigation with the U.S.A. for fifteen years despite GATT, no proper debate on the European Common Market (E.C.M.), no review of Commonwealth Preferences. Citing Eugene Black, I. J. P. Arnold and Klaus Billerbeck on Soviet bloc aid, he closes with the demand that a non-political National Committee of competent people be set up to bring about Budget reforms, lest "our economy will be a runaway horse". - Rejects the official line that the foreign exchange crisis is "built-in"; insists it is the product of a runaway system of economics and policy. - Documents discrepancies between the Reserve Bank Bulletin, the Report on Currency and Finance and the Economic Survey on the adverse balance of trade for 1956–57 and 1958–59, with figures differing by hundreds of crores. - Attacks the practice of treating aid and investment as interchangeable, citing I. J. P. Arnold (Federation of British Industries) and Klaus Billerbeck on Soviet foreign aid. - Reports that Rs. 1,386 crores of external assistance had been carried forward, unutilised, from First Plan to Second to Third — alongside the planners simultaneously demanding Rs. 2,200 crores more. - Decries the absence of parliamentary ratification of treaties — no Indo-American Treaty of Friendship, Trade and Navigation for fifteen years; no debate on E.C.M. or the Treaty of Rome; the GATT review of Commonwealth Preferences blocked in the Lok Sabha. - Demands a non-political National Committee of competent people to reform the Budget and restore reasonable honesty in the presentation of facts. - Recalls C. D. Deshmukh as Finance Minister conceding that compilation of Budget documents is "a race against time" — a confession Sundaram says would be unacceptable in any parliament elsewhere. --- ## [Primary work] FOREIGN INSTITUTIONAL INVESTORS IN INDIA URL: https://indianliberals.in/primary-works/foreign-institutional-investors-in-india-by-gr-parrikar-and-rg-katoti-november-1994/ ### Summary G. R. Parrikar and R. G. Katoti, both economists in the Department of Economics & Statistics at Tata Services Ltd., survey the entry of Foreign Institutional Investors (FIIs) into India's capital markets in the early years after the September 1992 SEBI guidelines. The pamphlet, published by the Forum of Free Enterprise in November 1994, treats the opening-up of Indian equity markets to FIIs as one of the defining markers of the country's transition to a market-driven economic system, situating the move within Finance Minister Manmohan Singh's 1992-93 budget pledge to admit reputable foreign investors such as pension funds. The authors note the encouraging response of 1993-94 — over 225 FIIs registered with SEBI and cumulative net inflows of about $2.7 billion (Rs. 8,470 crores) — while flagging the cautionary view that international capital flows are 'fair weather friends' and that, as N. A.… ### Body ## Summary G. R. Parrikar and R. G. Katoti, both economists in the Department of Economics & Statistics at Tata Services Ltd., survey the entry of Foreign Institutional Investors (FIIs) into India's capital markets in the early years after the September 1992 SEBI guidelines. The pamphlet, published by the Forum of Free Enterprise in November 1994, treats the opening-up of Indian equity markets to FIIs as one of the defining markers of the country's transition to a market-driven economic system, situating the move within Finance Minister Manmohan Singh's 1992-93 budget pledge to admit reputable foreign investors such as pension funds. The authors note the encouraging response of 1993-94 — over 225 FIIs registered with SEBI and cumulative net inflows of about $2.7 billion (Rs. 8,470 crores) — while flagging the cautionary view that international capital flows are 'fair weather friends' and that, as N. A. Palkhivala has argued, a cap on FII investments may be desirable. Section I situates Indian FII activity in a global picture: FII-type vehicles date to 1868, the USA, UK and Japan still dominate flows, and only since the late 1980s have surplus savings rotated towards higher-yielding emerging markets in Asia, Latin America and Eastern Europe. The authors document the resulting shift — $160 billion into emerging markets in 1993, 12% of world equity trading versus 4% in 1983 — and quote the Bank for International Settlements' observation that cross-border portfolio transactions now exceed trade-related transactions, sometimes by a large multiple. A comparative table on investment ceilings and tax rates places India's 24% aggregate cap and graded tax regime against the more liberal stances of Pakistan, Sri Lanka and Indonesia. Section II then walks through India's policy framework — registration, the 24% aggregate / 5% single-FII ceiling, the RBI's earlier 10% cap on preferential allotments (later raised to 15% from April 1994 after a controversy involving private placements by companies like Nicholas Piramal, Hero Honda, Bajaj Auto and Saw Pipes), repatriation, the special tax treatment (20% on dividend/interest, 30% short-term and 10% long-term capital gains, with NRI-style concessions explicitly denied), and other operational provisions including the ban on short-selling and the use of recognised custodians. The narrative records the surge in secondary-market investment from Rs. 150 crores in June 1993 to Rs. 4,455 crores in February 1994, the BSE Sensex's parallel climb from 2,282 to over 4,000, and the contribution of FII inflows (alongside Euro Issues and FDI) of roughly $8.2 billion to forex reserves. A short transition introduces Section III, 'Some Critical Issues', which had only just begun on the last rendered page. ## Key points - Frames the opening of Indian capital markets to FIIs as a defining feature of India's post-1991 transition to a market-driven economy, dated to Finance Minister Manmohan Singh's 1992-93 budget speech and the SEBI guidelines of September 1992. - Reports that by 1993-94 more than 225 FIIs had registered with SEBI, with cumulative net inflows of about $2.7 billion (Rs. 8,470 crores) and a market capitalisation ranking India seventh among 22 emerging markets. - Traces the global shift of portfolio capital towards emerging markets since the late 1980s — $160 billion in 1993, 12% of world equity trading vs. 4% in 1983 — driven by the maxim that 'money goes where money is'. - Lays out India's policy regime: SEBI registration, a 24% aggregate ceiling and 5% single-FII ceiling on issued share capital, an RBI cap on preferential allotments raised from 10% to 15% from April 1994, and graded tax rates (20% on dividend/interest, 30% short-term and 10% long-term capital gains). - Catalogues operational rules — no short-selling, mandatory routing through recognised stock-exchange intermediaries including OTCEI, five-year renewable registration, repatriation through designated custodians like Hongkong Bank, Citibank, Standard Chartered and SBI. - Documents the bullish impact of FII entry on secondary markets: secondary-market FII investments rose from Rs. 150 crores in June 1993 to Rs. 4,455 crores by February 1994 (a 29x jump), with the BSE sensex climbing from 2,282 in June 1993 past 4,000 by January 1994. - Notes the cautious counter-view, citing the RBI Governor's description of international capital flows as 'fair weather friends' and N. A. Palkhivala's call for a cap on FII investments. - Highlights qualitative effects: institutionalisation of Indian markets, broader-based investment across roughly 500 listed companies, and pressure on Indian firms to adopt greater efficiency, transparency and equity-research-based investment decisions. --- ## [Primary work] Forty-Three Years of Independence URL: https://indianliberals.in/primary-works/forty-three-years-of-independence-by-nani-a-palkhivala-january-18-1991/ ### Summary Delivered as the Jawaharlal Nehru Memorial Lecture at Trinity College, Cambridge on 7 November 1990 and published by the Forum of Free Enterprise, Nani A. Palkhivala's lecture is a stocktaking of India at forty-three years of independence: an accounting that begins with what the republic inherited and ends with what it has squandered. He opens by celebrating the survival of Indian democracy as the central miracle of the post-war era, naming three inestimable advantages with which the republic began — a five-thousand-year civilisation, the unification effected by British rule, and a 'sublime' Constitution that embeds the substance of the Universal Declaration of Human Rights. The Constitution, he stresses, never enshrined socialism; on the contrary, its Directive Principles rule out state ownership, 'the Monolithic State... which is the hallmark of communism, euphemistically called socialism.' The second movement of the lecture is an indictment of what successive governments did with that inheritance.… ### Body ## Summary Delivered as the Jawaharlal Nehru Memorial Lecture at Trinity College, Cambridge on 7 November 1990 and published by the Forum of Free Enterprise, Nani A. Palkhivala's lecture is a stocktaking of India at forty-three years of independence: an accounting that begins with what the republic inherited and ends with what it has squandered. He opens by celebrating the survival of Indian democracy as the central miracle of the post-war era, naming three inestimable advantages with which the republic began — a five-thousand-year civilisation, the unification effected by British rule, and a 'sublime' Constitution that embeds the substance of the Universal Declaration of Human Rights. The Constitution, he stresses, never enshrined socialism; on the contrary, its Directive Principles rule out state ownership, 'the Monolithic State... which is the hallmark of communism, euphemistically called socialism.' The second movement of the lecture is an indictment of what successive governments did with that inheritance. Palkhivala argues that India 'respected the shells of socialism — state control and state ownership — while the kernel, the spirit of social justice, was left no chance of coming to life,' building 231 Union and 636 State public-sector enterprises that became 'black holes' and 'money guzzlers.' Drawing on The Economist's January 1987 verdict that Indian socialism is a fraud — transferring wealth not from the rich to the poor but from the honest rich to the dishonest rich — he traces the steel claws of the permit-licence-quota raj, the torrential bureaucracy that wastes millions of man-hours, and the failure to invest in education, family planning, nutrition, and public health. The Budget of 1985 was, in his telling, an epoch-making break with this 'economic theology,' but its liberalising philosophy was sabotaged by a top-heavy bureaucracy, socialist politicians, and rent-seeking businessmen. The lecture's later sections diagnose the consequences — India has 15 per cent of the world's population but 1.5 per cent of its income; its share of world exports has fallen from 2.2 per cent in 1950 to 0.45 per cent; Hong Kong's economy is twice India's — and then enumerate the moral pathologies: corruption, indiscipline, mobocracy, the bandh as the country's contribution to sociology, and divisiveness as 'the AIDS of India.' Palkhivala closes on a note of conditional hope: India's vitality is real, foreign investment in India is investment in democracy, and the country has a record of producing leaders 'in the darkest hour' — invoking Mahatma Gandhi as the exemplar who 'made us realize the profound truth that single-minded pursuit of money impoverishes the mind, shrivels the imagination, and desiccates the heart.' ## Key points - Frames the lecture as Nehru Memorial Lecture (Cambridge, 7 Nov 1990) reviewing forty-three years of Indian independence — survival of democracy across 840 million people is the central achievement. - Names three 'inestimable advantages' India started with: a 5000-year civilisation, British-era unification into a single political entity, and a 'sublime' Constitution that anticipated the UDHR's Fundamental Rights. - Argues that 'socialism' is alien to the original Constitution — the Directive Principles rule out the 'Monolithic State' of state ownership. - Indicts the public sector (231 Union + 636 State enterprises) as 'black holes' and 'money guzzlers' and laments that the global wave of privatisation has 'turned aside in its course and passed India by.' - Coins the diagnostic that India suffers from 'too much government and too little administration; too many laws and too little justice; too many public servants and too little public service' under the permit-licence-quota raj. - Identifies the 1985 Budget as 'epoch-making' — abolishing estate duty, slashing wealth-tax to 2% and personal income-tax to 50% — but argues its liberalising mood was sabotaged by bureaucracy, socialist politicians, and rent-seeking businessmen. - Documents the human cost: per-capita income did not even double in four decades; India fell from sixteenth (1950) to forty-third in world export rankings; 30+ million on Employment Exchanges; two-thirds of Indians and four-fifths of women illiterate. - Closes on conditional hope — divisiveness is 'the AIDS of India' and moral decay is severe, but India's vitality, democratic credentials, and Gandhian capacity to produce leaders in dark hours justify long-term confidence. --- ## [Primary work] The Forum of Free Enterprise URL: https://indianliberals.in/primary-works/forum-of-free-enterprise-2005-2006/ ### Summary This Forum of Free Enterprise pamphlet reproduces a long extract from Sucheta Dalal's biography 'A.D. Shroff — Titan of Finance Free Enterprise' (Viking/Penguin India, 2000), retelling the institutional origin story of the Forum against the backdrop of the high noon of Nehruvian socialism. The text opens in 1956, with the Congress's 1954 Avadi Resolution committing the country to a 'socialistic pattern of society', Marxist rhetoric becoming the lingua franca of public life, the second wave of nationalisations (transport, then life insurance) advancing, and the income-tax department running an intimidation campaign against the Tatas, Birlas and Sarabhais.… ### Body ## Summary This Forum of Free Enterprise pamphlet reproduces a long extract from Sucheta Dalal's biography 'A.D. Shroff — Titan of Finance Free Enterprise' (Viking/Penguin India, 2000), retelling the institutional origin story of the Forum against the backdrop of the high noon of Nehruvian socialism. The text opens in 1956, with the Congress's 1954 Avadi Resolution committing the country to a 'socialistic pattern of society', Marxist rhetoric becoming the lingua franca of public life, the second wave of nationalisations (transport, then life insurance) advancing, and the income-tax department running an intimidation campaign against the Tatas, Birlas and Sarabhais. Shroff — chairman of New India Assurance, signatory to the 1944 Bombay Plan, and member of Nehru's own National Planning Council — is portrayed not as an opponent of planning but as the one industrialist unwilling to be silenced by it. The narrative then traces the Forum's actual founding on 18 July 1956 and its early character: the manifesto that drew over a thousand letters from villages and small towns, the refusal of FICCI and many big houses to be publicly associated with it, the FICCI counter-circular discouraging support, and the whisper campaign that the Forum was foreign-financed (Shroff calls the charge 'as fantastic as expecting to receive remittances from the man on the moon'). The biographer dwells on the institutional design choices Shroff insisted upon — apolitical posture, unregistered ad-hoc body, no permanent corpus, funds raised only yearly and only as needed, J. R. D. Tata's offer of a lakh of rupees turned down for a Rs. 10,000 collection — and on the founding Council of Management he assembled (Anantharamakrishnan, S. K. Sen, M. A. Sreenivasan, Sardar Mohan Singh, Narayan Dandekar, M. R. Masani, S. N. Haji, Col. Leslie Sawhny, F. S. Mulla, T. M. Desai, K. C. Cooper, Chimanlal B. Parikh, F. P. Mehta, M. A. Master, C. M. Srinivasan, K. G. Khosla). The pamphlet ends the rendered section with two set-pieces of Shroff's polemical method. First, the 'Code of Conduct' he drafted for free enterprise — a four-decade-old precursor, the biographer argues, to the late-1990s corporate governance code — pledging high standards of integrity towards shareholders, consumers, labour and community, condemning hoarding, black-marketing and tax evasion, and accepting fair wages, working conditions, trade unions and a 'fair return' for risk capital as constitutive of the system. Second, 'The Impact of the Forum' opens with Shroff's response to T. T. Krishnamachari's post-Union-Budget claim of a 'capitalist strike': Shroff calls a press conference, ridicules TTK ('in the extreme it might mean that all industrialists would decide to close down their industries'), and pushes back against the minister's insinuation that Indians distrust Indian enterprise more than foreigners do. The rendered chunk breaks off mid-argument as Shroff catalogues earlier achievements of Indian capital (the 'Tata twos' debenture in 1930s London, the World Bank's $75 million loan to TISCO). ## Key points - Frames the Forum's birth (18 July 1956) as a direct response to the 1954 Avadi Resolution, the nationalisation of insurance, and a propaganda climate in which Nehru declared 'private enterprise and democracy are incompatible'. - Stresses that Shroff was not anti-planning — he was one of the eight Bombay Plan signatories and a member of Nehru's National Planning Council — but opposed planning that stifled private initiative. - Documents the Shroff–TTK 'admirer-adversary equation', including TTK's claim that 'private enterprise had failed me' and Shroff's Shakespearean 'most unkindest cut of all' rejoinder. - Records the design principles Shroff imposed on the Forum: apolitical, unregistered, no permanent corpus, yearly funding only, educative rather than partisan, refusing J. R. D. Tata's offer of one lakh in favour of Rs. 10,000. - Names the founding Council of Management (Anantharamakrishnan, S. K. Sen, M. A. Sreenivasan, Sardar Mohan Singh, Narayan Dandekar, M. R. Masani, S. N. Haji, Col. Leslie Sawhny, F. S. Mulla, T. M. Desai, K. C. Cooper, Chimanlal B. Parikh, F. P. Mehta, M. A. Master, C. M. Srinivasan, K. G. Khosla) and notes that FICCI under government pressure circulated a counter-letter discouraging support. - Reproduces the Forum's 'Code of Conduct' as a four-decade-old precursor to the corporate-governance code of the late 1990s — pledging integrity to shareholders, consumers, labour and the community, recognising trade unions, and condemning hoarding, black-marketing and tax evasion. - Shows Shroff using the Forum platform to puncture TTK's 'capitalist strike' charge, defending the historical record of Indian enterprise (Jamshedji Tata's steel gamble, Scindia Steamships, the 'Tata twos' London debenture, World Bank lending to TISCO). - Treats the whisper campaign that the Forum was American-financed as the recurring slur against an Indian classical-liberal institution, and Shroff's claim that it is 'as swadeshi in its genesis and operations as any other national organization, not excluding the Congress'. --- ## [Primary work] Forum of Free Enterprise URL: https://indianliberals.in/primary-works/forum-of-free-enterprise-a-manifesto/ ### Summary This short institutional pamphlet is the founding manifesto of the Forum of Free Enterprise, the Bombay-based classical-liberal organisation set up in 1956 at 235 Dr. Dadabhai Naoroji Road. Built as a sequence of declarative 'WE BELIEVE' paragraphs, the text frames democracy and free enterprise as inseparable strands of 'the Indian way of life' and argues that the case for free enterprise is 'going by default' under sustained and unjustified attack — hence the Forum's reason for existing as a vehicle to 'educate public opinion on the fundamentals of Free Enterprise.' The manifesto's positive argument is that enterprise is not a recent or alien construct but 'as old as man,' encompassing 'the shopkeeper and the merchant, the farmer and the artisan, the worker and the manager, the doctor and the lawyer.' Profit-seeking, the text insists, is a legitimate expectation of reward for 'honest, productive effort' that must be distinguished sharply from antisocial profiteering.… ### Body ## Summary This short institutional pamphlet is the founding manifesto of the Forum of Free Enterprise, the Bombay-based classical-liberal organisation set up in 1956 at 235 Dr. Dadabhai Naoroji Road. Built as a sequence of declarative 'WE BELIEVE' paragraphs, the text frames democracy and free enterprise as inseparable strands of 'the Indian way of life' and argues that the case for free enterprise is 'going by default' under sustained and unjustified attack — hence the Forum's reason for existing as a vehicle to 'educate public opinion on the fundamentals of Free Enterprise.' The manifesto's positive argument is that enterprise is not a recent or alien construct but 'as old as man,' encompassing 'the shopkeeper and the merchant, the farmer and the artisan, the worker and the manager, the doctor and the lawyer.' Profit-seeking, the text insists, is a legitimate expectation of reward for 'honest, productive effort' that must be distinguished sharply from antisocial profiteering. The Forum credits private enterprise — operating despite 'handicaps' — with building Indian steel, textile, sugar, cement, shipping, banking and insurance, and notes that during the first Five-Year Plan a number of free-enterprise industries 'exceeded the targets allotted to them.' The negative argument is calibrated rather than absolutist: the Forum concedes 'ample room for State enterprise to function alongside of Free Enterprise in the service of the people,' but warns that monopoly 'of any kind, whether State or private, is undesirable,' and singles out the 'displacement of normal trade channels by the intrusion of State trading' as a dangerous trend that risks depriving individual traders of livelihood and concentrating power and patronage in a few hands. Free enterprise, the manifesto closes, must keep 'clean hands' and accept regulation by a democratic government, but is ultimately 'economic democracy in action' and 'the lifebreath of a free society.' The pamphlet ends with an invitation to all who believe in voluntary enterprise — in service, profession, agriculture, trade or industry — to join the Forum, and with the slogan 'Free Enterprise is your Enterprise: Safeguard it.' ## Key points - Declares democracy and free enterprise inseparable parts of 'the Indian way of life,' framing the Forum's mission as defending the latter to preserve the former. - Argues the case for free enterprise is 'going by default' under sustained, unjustified attack, justifying the Forum as a public-education body. - Defines free enterprise broadly as 'as old as man' and inclusive of traders, farmers, workers, professionals and managers — not only large industrialists. - Distinguishes legitimate profit and fair wages as 'necessary and healthy' from antisocial profiteering, anchoring a moral defence of enterprise. - Concedes a role for state enterprise alongside private enterprise but condemns monopoly 'of any kind, whether State or private' as a threat to democratic order. - Singles out the 'intrusion of State trading' into normal trade channels as the most dangerous contemporary trend, warning of concentrated patronage in a few hands. - Credits private enterprise with building India's steel, textile, sugar, cement, shipping, banking and insurance sectors, and cites Five-Year Plan target overshoots as evidence. - Accepts democratic regulation and self-policing of 'black sheep' within the system, positioning the Forum as non-political, non-partisan and reform-minded rather than libertarian-absolutist. --- ## [Primary work] Forum of Free Enterprise URL: https://indianliberals.in/primary-works/forum-of-free-enterprise-speech-by-mr-ad-shroff-july-25-1956/ ### Summary This pamphlet reproduces A. D. Shroff's address at the first press conference of the Forum of Free Enterprise, held on July 25, 1956. Shroff opens by responding to press criticism that the Forum's sponsors are hiding in the background, insisting that the group is an ad hoc body with no written constitution, formed by observers who felt it was time to articulate publicly what Free Enterprise means in India, what it has already achieved, and what it can still do for the country. He extends the meaning of Free Enterprise beyond industrialists and businessmen to include shop-keepers, clerical employees, and professional groups, arguing that its essence is the democratic way of life and that the Forum exists to educate the public and warn it against trends of thinking that could ultimately destroy that way of life. The substantive economic argument identifies State Trading as the most sinister encroachment on Free Enterprise. Shroff warns that its extension would deprive millions of small people of the right to choose their own way of living.… ### Body ## Summary This pamphlet reproduces A. D. Shroff's address at the first press conference of the Forum of Free Enterprise, held on July 25, 1956. Shroff opens by responding to press criticism that the Forum's sponsors are hiding in the background, insisting that the group is an ad hoc body with no written constitution, formed by observers who felt it was time to articulate publicly what Free Enterprise means in India, what it has already achieved, and what it can still do for the country. He extends the meaning of Free Enterprise beyond industrialists and businessmen to include shop-keepers, clerical employees, and professional groups, arguing that its essence is the democratic way of life and that the Forum exists to educate the public and warn it against trends of thinking that could ultimately destroy that way of life. The substantive economic argument identifies State Trading as the most sinister encroachment on Free Enterprise. Shroff warns that its extension would deprive millions of small people of the right to choose their own way of living. At the same time he distances the Forum from doctrinal laissez-faire and from what he calls the "outmoded concept of capitalism": he accepts planned development and some regulation, provided regulation does not destroy initiative or the profit motive, which he defends as legitimate, inherent in human nature, and necessary for social progress. On the welfare-state question Shroff offers a counter-intuitive provocation — that the greatest Welfare State on earth is the United States of America — and uses it to criticise the means and methods being adopted to build a Welfare State in India. He closes with an appeal to the Press, praising the independent Judiciary and an open-minded press as the two institutions that have remained precious to India, and asking that the Forum be granted the same facilities and opportunities of expression as others, even where editors disagree with its creed. ## Key points - Shroff inaugurates the Forum of Free Enterprise at its first press conference on July 25, 1956, describing it as an ad hoc body with no written constitution, formed to articulate and defend Free Enterprise in India. - He widens the constituency of Free Enterprise from industrialists to every citizen — shop-keepers, clerks, professionals — on the grounds that its essence is the democratic way of life. - State Trading is singled out as the most sinister encroachment on Free Enterprise, threatening to strip millions of small people of the right to choose their own way of living. - The Forum disavows both laissez-faire and the "outmoded concept of capitalism", accepting planned development and regulation as long as initiative and the profit motive survive. - The profit motive is defended as legitimate and inherent in human nature, and as the motivating force without which society cannot progress and develop. - Shroff calls the United States the greatest Welfare State on earth, using the comparison to criticise the means India is adopting to build its own welfare state. - He closes with an appeal to the Press, praising the independent Judiciary and an open-minded Press as the two institutions that have remained precious to India, and asking that the Forum be granted the same facilities of expression as others. --- ## [Primary work] Code of Conduct URL: https://indianliberals.in/primary-works/forum-of-free-enterprise-code-of-conduct/ ### Summary This brief pamphlet from the Forum of Free Enterprise lays out a 'Code of Conduct' addressed to industrialists, businessmen, and members of the professions in India. Issued by the Forum on the conviction that free enterprise must be defended through visible self-discipline as much as through advocacy, the document argues that the system can only retain its democratic legitimacy if its practitioners uphold high standards of integrity, honesty, hard work, courtesy and continuous initiative. The Code then walks through the obligations of each constituency in the productive order. Producers and distributors owe consumers quality goods at reasonable cost, fair measure, and protection from adulteration. Employers owe labour dignified working conditions, fair wages, opportunities for skill-formation, grievance procedures, and recognition of stable democratic trade unions as part of a 'checks and balances' framework for employee-management relations. Management owes shareholders a fair return commensurate with risk, while also maintaining reserves for expansion, modernisation and research.… ### Body ## Summary This brief pamphlet from the Forum of Free Enterprise lays out a 'Code of Conduct' addressed to industrialists, businessmen, and members of the professions in India. Issued by the Forum on the conviction that free enterprise must be defended through visible self-discipline as much as through advocacy, the document argues that the system can only retain its democratic legitimacy if its practitioners uphold high standards of integrity, honesty, hard work, courtesy and continuous initiative. The Code then walks through the obligations of each constituency in the productive order. Producers and distributors owe consumers quality goods at reasonable cost, fair measure, and protection from adulteration. Employers owe labour dignified working conditions, fair wages, opportunities for skill-formation, grievance procedures, and recognition of stable democratic trade unions as part of a 'checks and balances' framework for employee-management relations. Management owes shareholders a fair return commensurate with risk, while also maintaining reserves for expansion, modernisation and research. Profit earned under competitive conditions, after fair wages are paid, is defended as a 'legitimate reward' — but hoarding, black-marketing, profiteering and malpractices in company management are condemned as anti-social. Professional men are asked to subordinate personal gain to the larger objective of service. The pamphlet closes with a civic obligation owed by 'all' to the community: to bear one's share of taxation honestly, to repudiate tax evasion, to participate in social and civic improvement, and to treat wealth or power as an opportunity for service rather than vainglorious display. A back-cover slogan — 'Free Enterprise is your Enterprise. Safeguard it.' — frames the entire tract as a self-policing manifesto designed to inoculate Indian capitalism against the moral case for state expansion. ## Key points - The Forum of Free Enterprise issues this Code as a public pledge that practitioners of free enterprise will police their own conduct, not merely defend the system rhetorically. - Honesty, hard work, courtesy and continuous initiative are named as the four foundations on which 'the edifice of Free Enterprise rests'. - Producers and distributors are bound to quality, reasonable cost, fair measure and protection of consumers against adulteration. - Employers are asked to treat worker welfare as a social obligation rather than philanthropy, to pay fair wages, to institute grievance procedures, and explicitly to welcome stable, democratic trade unions. - Management's accountability is dual: a fair return to investors for risk taken, and a duty to retain reserves for expansion, modernisation and research. - Profit under competitive conditions is defended as a legitimate reward for risk and development work, but hoarding, black-marketing, profiteering and company-management malpractices are condemned as anti-social and evil. - Professional men — lawyers, teachers, doctors, auditors, writers — are charged with subordinating personal gain to the 'larger objective of service'. - The civic coda condemns tax evasion unequivocally and treats wealth and power as obligations of community service rather than occasions for ostentation. --- ## [Primary work] Forward Trading in Shares URL: https://indianliberals.in/primary-works/forward-trading-in-shares-by-mr-mayya-april-5-1996/ ### Summary Forward Trading in Shares is a technical brief by M. R. Mayya, former Executive Director of the Bombay Stock Exchange, written in April 1996 and published as a Forum of Free Enterprise pamphlet. Mayya traces the century-long history of forward or badla trading on Indian exchanges — its prohibition by Government of India on 27 June 1969 as 'contracts for the clearing', its return in 1983 under the new label of 'specified shares', and its second prohibition by SEBI on 13 December 1993. He explains in detail the institutional mechanics: hand delivery contracts, settlement cycles, the role of vyaj badlawalas (financiers who lend money via contango / 'seedha badla') and teji or mal badlawalas (financiers who lend shares via backwardation / 'ulta badla'), and the way carry forward charges emerge from market forces during the badla session. The pamphlet's argumentative center is a defence of carry forward trading as economically useful and a sharp critique of SEBI's regulatory posture.… ### Body ## Summary Forward Trading in Shares is a technical brief by M. R. Mayya, former Executive Director of the Bombay Stock Exchange, written in April 1996 and published as a Forum of Free Enterprise pamphlet. Mayya traces the century-long history of forward or badla trading on Indian exchanges — its prohibition by Government of India on 27 June 1969 as 'contracts for the clearing', its return in 1983 under the new label of 'specified shares', and its second prohibition by SEBI on 13 December 1993. He explains in detail the institutional mechanics: hand delivery contracts, settlement cycles, the role of vyaj badlawalas (financiers who lend money via contango / 'seedha badla') and teji or mal badlawalas (financiers who lend shares via backwardation / 'ulta badla'), and the way carry forward charges emerge from market forces during the badla session. The pamphlet's argumentative center is a defence of carry forward trading as economically useful and a sharp critique of SEBI's regulatory posture. Mayya argues that the carry forward facility injects liquidity, moderates extreme price movements by enabling short selling in rising markets and long purchases in falling ones, and acts as an indispensable risk-hedging instrument akin to options and futures. Drawing on the recommendations of the Patel Committee — on which he himself served alongside G. S. Patel and Deepak S. Parekh — he endorses a screen-based, transparent revival of carry forward with built-in safety valves, while objecting to two specific SEBI stipulations: the 25 per cent broker-wise outstanding position cap, which he finds unworkable given the specialisation of broker houses, and the steep 20/30/40/50 per cent margin schedule on successive settlements, which he sees as cumbersome and damaging to market liquidity. Throughout, Mayya frames speculators as legitimate market participants whose activity is 'totally an act of volition' and quotes The Economist of London approvingly to the effect that 'speculators are public servants' whose work in a market economy is indispensable. The text reads as an insider's technocratic brief for liberalising Indian securities regulation along lines consistent with international futures-market practice. ## Key points - Forward / badla trading existed on Indian exchanges for nearly 100 years before being prohibited by Government of India on 27 June 1969 as 'contracts for the clearing'. - After a 14-year gap, forward trading returned in 1983 under the label 'specified shares' at the Bombay, Calcutta, Delhi and Ahmedabad exchanges, without the 1969 notification being rescinded. - SEBI banned trading in specified shares on 13 December 1993; at that point 133 specified shares accounted for roughly Rs.21,000 crore in market capitalisation, about 60 per cent of total stock market cap of Rs.350,000 crore. - Mayya explains the mechanics of vyaj badla (contango / seedha badla — money lending by financiers) and mal badla (backwardation / ulta badla — share lending), and shows that carry forward charges are determined by market forces in the badla session. - The Patel Committee (appointed by SEBI on 22 February 1995, reporting on 20 March 1995) recommended resumption of carry forward with screen-based trading, transaction IDs, a 90-day cap, and audit certification. - Mayya defends carry forward as a liquidity-enhancing, price-moderating, risk-hedging facility and cites empirical support from the 1994 BSE Sensex rise to 4643.31 and 1995 fall to 2996.84 as a case where carry over would have moderated volatility. - He criticises SEBI's 25 per cent broker-wise outstanding position cap as impractical given the actual specialisation of broker houses across foreign institutional, mutual fund, government securities, jobbing and odd-lot lines. - He criticises SEBI's escalating 20/30/40/50 per cent margin schedule on successive carry-forward settlements as cumbersome and damaging to liquidity, arguing margins on Indian markets should track the 7-8 per cent international futures norm, adjusted for the absence of daily mark-to-market. --- ## [Primary work] FOURTH PLAN - A STRATEGY FOR ECONOMIC GROWTH? URL: https://indianliberals.in/primary-works/fourth-plan-strategy-dr-f-a-mehta-june-9-1969/ ### Summary Dr. F. A. Mehta, Economic Adviser to a business house, delivered this address under the auspices of the Forum of Free Enterprise in Bombay on 23 April 1969; the Forum published it as a booklet on 9 June 1969. Mehta is responding to the Draft Outline of the Fourth Five-Year Plan (1969-74), just approved by the National Development Council, which he reads as marking — at least formally — the resumption of 'planning' after the so-called three-year Plan Holiday. His central contention is that the entire framework of planning in India has changed: with subjects of plan implementation legally vested in the States, the Planning Commission's role as a co-ordinating agency has been hollowed out, and the NDC itself has degenerated into what he calls a 'Tower of Babel' of conflicting state ministers, threatening to turn elaborate targets and capital-output ratios into mere 'paper-value'. The Plan's right priorities — agriculture, power and family planning, with a Rs. 4-4.5 per cent agricultural growth target and the resumption of a Rs. 24,400-crore outlay — are, Mehta argues, necessary but emphatically not sufficient.… ### Body ## Summary Dr. F. A. Mehta, Economic Adviser to a business house, delivered this address under the auspices of the Forum of Free Enterprise in Bombay on 23 April 1969; the Forum published it as a booklet on 9 June 1969. Mehta is responding to the Draft Outline of the Fourth Five-Year Plan (1969-74), just approved by the National Development Council, which he reads as marking — at least formally — the resumption of 'planning' after the so-called three-year Plan Holiday. His central contention is that the entire framework of planning in India has changed: with subjects of plan implementation legally vested in the States, the Planning Commission's role as a co-ordinating agency has been hollowed out, and the NDC itself has degenerated into what he calls a 'Tower of Babel' of conflicting state ministers, threatening to turn elaborate targets and capital-output ratios into mere 'paper-value'. The Plan's right priorities — agriculture, power and family planning, with a Rs. 4-4.5 per cent agricultural growth target and the resumption of a Rs. 24,400-crore outlay — are, Mehta argues, necessary but emphatically not sufficient. For the first time in 13 years the private sector has been assigned a quantitative target of Rs. 10,000 crores, more than doubling its Third-Plan share, yet the same Draft hedges private investment with restrictions, licences and steps to keep private profit low. Quoting W. Arthur Lewis on the recurring 'come-to-nothing' episodes of plans predicated on private investment but hostile to it, Mehta warns that the biggest single beneficiary of any private-sector resurgence will in fact be the Government and the public sector themselves. The 'true menace' he locates is the threat of reintroducing price-controls, which he calls a Damoclean sword hanging over Indian industry and the surest way to dismantle the price-mechanism. The real weakness of the Draft Plan, on Mehta's reading, is not its size but its 'national game of fudging': D. R. Gadgil's drafting evades the conflict between increased production and increased equality, defaults to the 'distributive approach', and offers no concrete policy on taxation, industrial licensing or pricing — least of all for savagely-taxed but capital-hungry sectors like road transport and consumer goods. His prescriptions are blunt: end price-controls, give time-bound freedom from price-controls before demanding fresh investment, liberalise taxation on private savings, abolish industrial de-licensing for the small-scale and stop 'freezing' the capacity of large industrial houses. He closes by insisting that the quarrel is no longer between a Big Plan and a Small Plan, nor between the public and private sectors, but between policies that will or will not activise private industry; ideologies of both right and left, he urges, must cease. ## Key points - Frames the Draft Outline of the Fourth Five-Year Plan as a formal resumption of planning after the 'three-year Plan Holiday', but argues that the underlying framework of Indian planning has fundamentally shifted because plan-implementation now legally rests with the States. - Calls the National Development Council a 'Tower of Babel' that has displaced the Planning Commission as effective master of the Plan and threatens to reduce capital-output ratios and elaborate targets to mere 'paper-value'. - Notes that for the first time in 13 years the private sector has been given a quantitative outlay target (Rs. 10,000 crores, more than double the Third Plan's Rs. 4,190 crores), while the same Draft simultaneously hedges private investment with licences, restrictions and profit-suppressing measures. - Argues that the Plan's right priorities (agriculture, power, family planning, a 4-4.5% agricultural growth rate) are necessary but insufficient without right policies on taxation, industrial licensing and pricing. - Identifies the threat of re-introducing price-controls as the 'true menace' to private sector industry — a Damoclean sword that would dismantle the price-mechanism and entrench stagnation in investment, production and employment. - Reads D. R. Gadgil's drafting as a 'national game of fudging' that evades the conflict between development and distribution and defaults to the 'distributive approach' rather than supplying concrete policy. - Predicts that the biggest single beneficiary of any genuine revival of private-sector investment will be the public sector and the Union and State Governments, via tax-revenues and demand for capital goods. - Concludes that the real quarrel is no longer between Big Plan vs. Small Plan or between public vs. private sectors, but about whether tax, licensing and pricing policies will actually activise private industry — and that 'ideology, both of the right and of the left, must cease.' --- ## [Primary work] FREE BUT FETTERED—THE ILLITERATE CITIZEN URL: https://indianliberals.in/primary-works/free-but-fettered-the-illiterate-citizen-dr-c-d-deshmukh-november-12-1970/ ### Summary Delivered on 27 October 1970 as the Fifth A. D. Shroff Memorial Lecture under the auspices of the Forum of Free Enterprise in Bombay, C. D. Deshmukh's address opens with a tribute to A. D. Shroff as an exemplar of a patriotism that 'can co-exist with a judicious bias in favour of free enterprise', then pivots to its real subject: the political and economic cost of mass illiteracy in India. The thesis, which Deshmukh borrows in part from the Education (Kothari) Commission of 1964, is that an illiterate population cannot exercise the citizenship that the Constitution promises — that India's adults are, in the phrase he repeatedly returns to, free but fettered. In the rendered pages Deshmukh moves chronologically through India's planning record on literacy and adult education.… ### Body ## Summary Delivered on 27 October 1970 as the Fifth A. D. Shroff Memorial Lecture under the auspices of the Forum of Free Enterprise in Bombay, C. D. Deshmukh's address opens with a tribute to A. D. Shroff as an exemplar of a patriotism that 'can co-exist with a judicious bias in favour of free enterprise', then pivots to its real subject: the political and economic cost of mass illiteracy in India. The thesis, which Deshmukh borrows in part from the Education (Kothari) Commission of 1964, is that an illiterate population cannot exercise the citizenship that the Constitution promises — that India's adults are, in the phrase he repeatedly returns to, free but fettered. In the rendered pages Deshmukh moves chronologically through India's planning record on literacy and adult education. He revisits the First Five-Year Plan's coinage of 'Social Education' as an all-comprehensive uplift through community action, contrasts its ambition with the modest outlays that followed in the Second, Third and Fourth Plans, and tracks the headline numbers: literacy at 8.3% in 1931 (undivided British India), 17.2% in 1951, about 24% in 1961, and 28.6% in 1966 — gains that, against population growth of 2.5% a year, leave India with roughly 350 million illiterates, about two-thirds of all illiterates in the world. He notes the persistent gaps between male and female, and between urban and rural literacy. Deshmukh then traces the international turn of the late 1960s, drawing on his own role as a consulting expert in UNESCO's Asian Model of Educational Development (Bangkok, November 1965) and on the work of his wife, Dr. Mrs. Durgabai Deshmukh, who convened the sub-group on Literacy Education for the Kothari Commission's Adult Education Task Force (chaired by D. S. Kothari, with V. S. Jha as convenor). He quotes at length the Asian Model's reasoning that adult education must become 'functional' — geared to economic and social needs — and the Kothari Commission's blunt verdict that 'The uneducated is not in reality a free citizen', that the strategy of relying on free and compulsory schooling alone has failed, and that 'a massive unorthodox national effort' is now required. The rendered pages end mid-argument, having set out the diagnosis (drawing on a UNESCO-sponsored study by J. M. Kapoor and Prodipto Roy on retention of literacy) and the prerequisites the Commission identified for sustained eradication — what Deshmukh will presumably build into a programme over the lecture's remaining pages. ## Key points - Framed as the Fifth A. D. Shroff Memorial Lecture (27 October 1970, Bombay), opening with a tribute that yokes patriotism to free enterprise. - Central claim, borrowed from the Kothari Commission: an illiterate citizen is not in reality a free citizen — illiteracy is a fetter on democratic and economic life. - Walks through India's Five-Year Plans on literacy and 'Social Education', noting declining seriousness from the First Plan's ambitious community-action vision to the Fourth Plan's silence on prior efforts. - Marshals statistics: literacy rising from 8.3% (1931) to 17.2% (1951) to ~24% (1961) to 28.6% (1966), yet absolute illiterates grew because population grew at 2.5% per year. - Calls out India's particular failure on a global scale — 350 million illiterates, two-thirds of the world's total — and persistent urban/rural and male/female gaps. - Draws on UNESCO's Asian Model of Educational Development (Bangkok, 1965), which he and Durgabai Deshmukh helped draft, to argue adult education must become 'functional' — tied to economic priorities. - Reports the Kothari Commission's verdict that India's primary-school-only strategy has failed and that 7 years of education for all children will not be achieved until 1986 rather than the constitutional 1961 target. - Closes the rendered section with the Commission's prerequisites for sustained literacy programmes: industrialisation, recognition of illiterate resistance to change, follow-up provision, and avoidance of past errors of scale, sporadicity and haste. --- ## [Primary work] FREE ENTERPRISE IN INDIA URL: https://indianliberals.in/primary-works/free-eneterprise-in-india-a-d-shroff-january-1-1970/ ### Summary Free Enterprise in India is a short Forum of Free Enterprise pamphlet reproducing a 30 March 1956 Times of India article by A. D. Shroff. Writing in the immediate aftermath of the government's declared intention to establish a 'Socialist State' — the political setting of the Second Five Year Plan and the Industrial Policy Resolution of 1956 — Shroff argues that the future role of the private sector can be assessed only in that context. He reads two corollaries into the declaration: the state will assume increasing control of the means of production, and resources available to the private sector will be gradually diverted to the public sector. The argumentative core is an urgent call for the private sector to mount a countrywide educative campaign. Shroff contends that 'thousands of thinking people' have been demoralised by the policy and by harsh fiscal measures such as Section 23-A of the Indian Income-tax Act, with some businessmen seriously considering emigration.… ### Body ## Summary Free Enterprise in India is a short Forum of Free Enterprise pamphlet reproducing a 30 March 1956 Times of India article by A. D. Shroff. Writing in the immediate aftermath of the government's declared intention to establish a 'Socialist State' — the political setting of the Second Five Year Plan and the Industrial Policy Resolution of 1956 — Shroff argues that the future role of the private sector can be assessed only in that context. He reads two corollaries into the declaration: the state will assume increasing control of the means of production, and resources available to the private sector will be gradually diverted to the public sector. The argumentative core is an urgent call for the private sector to mount a countrywide educative campaign. Shroff contends that 'thousands of thinking people' have been demoralised by the policy and by harsh fiscal measures such as Section 23-A of the Indian Income-tax Act, with some businessmen seriously considering emigration. He insists that the 'private sector' is widely misrepresented: not a clutch of 'tall poppies' running large factories, but the totality of agriculture, small and cottage industries, and the whole range of wholesale and retail trade. He cites National Income Committee figures — small enterprises in 1950–51 producing roughly 1,910 crores of nett output against factory establishments' 550 crores, employing 11.5 million workers against three million — to make the scale concrete. The pamphlet then sketches a positive programme on the basis of a mixed economy. The state, Shroff argues, should confine itself for the next fifteen to twenty years to genuine prerequisites of orderly progress: a quick spread of education, essential health services, clearance of slums, roads, rail and river transport, postal and telegraph services, irrigation, modern agricultural methods, and credit and marketing facilities for the seventy per cent of Indians dependent on agriculture. He documents petty state failures — a Bombay General Post Office that will not accept more than 500 registered letters a day from one party, third-class railway passengers 'packed like sardines', the Calcutta air-office running short of luggage tickets, a Bihar telegraph office out of forms — as evidence that the state cannot meet its existing obligations, let alone subsume large-scale industry. He calls for a concrete development plan with clear demarcation between public and private spheres, urges the private sector to observe high standards of integrity and pay its taxes promptly, and asks government to give 'concrete proofs' of its preparedness to let the private sector serve the country. The piece closes with a constitutional warning that has given it lasting force: in a country with one dominant political party and no effective organised opposition, the thin borderline between democracy and totalitarianism can soon be crossed, and unless public opinion becomes more vigilant Indians risk losing their most cherished possessions — the freedom to think and the freedom to criticise. ## Key points - Frames the future of private enterprise entirely in terms of the government's declared intention to establish a Socialist State, with consequent state control of production and a diversion of resources from private to public sector. - Identifies the most urgent need as organising a countrywide educative campaign to dispel mistaken public impressions of the private sector and its role. - Argues that Section 23-A of the Indian Income-tax Act has been cruelly applied, demoralising businessmen to the point where some seriously contemplate emigration before 'the worse coming in future' materialises. - Insists the private sector is not a few 'tall poppies' running large factories but encompasses all agriculture, large, small-scale and cottage industries, and the whole range of trade including import, export, wholesale and retail. - Cites National Income Committee figures: 1950–51 nett output of 'Small Enterprises' around 1,910 crores against 550 crores for 'Factory Establishments', employing 11.5 million workers against three million. - Reads the campaign of vilification around the nationalisation of life insurance as a deliberate sweeping condemnation of all private management, requiring counter-propaganda from organised business. - Sets out a mixed-economy programme in which the state confines itself for fifteen to twenty years to prerequisites of orderly progress — education, health, slum clearance, roads, rail and river transport, posts, telegraphs, irrigation, agricultural credit and marketing — rather than expanding into industry. - Documents state failures in elementary services (Bombay GPO refusing more than 500 registered letters per party per day; third-class rail passengers packed like sardines; Calcutta air-office short of luggage tickets; Bihar telegraph office short of forms) as evidence the state is not meeting its existing obligations. - Closes with a constitutional warning that one-party dominance with no effective opposition risks crossing the line from democracy into totalitarianism and erasing the freedom to think and to criticise. --- ## [Primary work] FREE ENTERPRISE IN A FREE SOCIETY URL: https://indianliberals.in/primary-works/free-enterpise-in-a-free-society-by-onlooker-february-21-1957/ ### Summary Reprinted from The Times of India of 21 May 1957 by the newly formed Forum of Free Enterprise, this short polemic by the pseudonymous "Onlooker" attacks what it calls India's 'compartmentalised thinking' on the economy — the habit of treating capital as inherently sinister, labour as sacrosanct and public enterprise as virtuous by definition. Prompted by Finance Minister T. T. Krishnamachari's budget and the broader 'socialistic pattern of society' line emanating from Nehru's government, the essay argues that Indian leaders are fighting capitalism in the discredited idiom of the nineteenth century, oblivious to how capitalism has actually evolved. The core argument runs in three movements. First, Onlooker observes that the contemporary Indian state legislatively coerces private enterprise into wage rises, bonuses and retroactive payments while shielding governmental enterprise as a 'protected monument'. Second, drawing on Switzerland, the United States and Canada, the author insists that Marx's prediction of an impoverished proletariat has been falsified — modern capitalism spreads ownership and rewards more widely, not less.… ### Body ## Summary Reprinted from The Times of India of 21 May 1957 by the newly formed Forum of Free Enterprise, this short polemic by the pseudonymous "Onlooker" attacks what it calls India's 'compartmentalised thinking' on the economy — the habit of treating capital as inherently sinister, labour as sacrosanct and public enterprise as virtuous by definition. Prompted by Finance Minister T. T. Krishnamachari's budget and the broader 'socialistic pattern of society' line emanating from Nehru's government, the essay argues that Indian leaders are fighting capitalism in the discredited idiom of the nineteenth century, oblivious to how capitalism has actually evolved. The core argument runs in three movements. First, Onlooker observes that the contemporary Indian state legislatively coerces private enterprise into wage rises, bonuses and retroactive payments while shielding governmental enterprise as a 'protected monument'. Second, drawing on Switzerland, the United States and Canada, the author insists that Marx's prediction of an impoverished proletariat has been falsified — modern capitalism spreads ownership and rewards more widely, not less. The countries that actually destroyed capitalism, the essay notes, ended up as Communist (Russia, China) or Fascist (Italy, Germany, parts of South America) tyrannies; freedom in the economic and political spheres stand or fall together. The piece closes by stipulating that 'the intelligent capitalist has never quarrelled with reasonable government regulations.' Citing President Eisenhower's enumeration of US economic instruments (Federal Reserve, debt management, mortgage insurance, agricultural supports, tax structure, public works) and a line from Luigi Einaudi, former President of the Italian Republic, Onlooker argues that the goal of policy must be not the abolition of regulation but the framing of regulations 'within which the citizen can act freely'. The conclusion — that 'free enterprise, as free labour, can only exist under a free government' — sets the early ideological keynote for the Forum of Free Enterprise. ## Key points - Frames T. T. Krishnamachari's budget and the Nehru government's 'socialistic pattern of society' as the trigger for a wider attack on anti-capitalist rhetoric in Indian public life. - Argues that Indian political discourse continues to define capitalism in nineteenth-century terms that even Khrushchev's Soviet Union has begun to abandon. - Documents an asymmetry in Indian policy: private enterprise is legislatively compelled to raise wages and pay bonuses while public enterprise is shielded as a 'protected monument'. - Refutes the Marxist immiseration thesis by pointing to Switzerland, the United States and Canada, where the proletariat shares increasingly in both ownership and rewards. - Insists that the destruction of capitalism historically yields totalitarianism — either Communist (Russia, China) or Fascist (Italy, Germany, parts of South America) — so reform, not abolition, is the right path. - Distinguishes the 'intelligent capitalist', who accepts reasonable regulation, from a doctrinaire laissez-faire position, citing Eisenhower's enumeration of US economic instruments and Luigi Einaudi on the purpose of regulation. - Concludes that economic and political freedom are inseparable, warning 'wiseacres on the extreme right and extreme left' that ignoring this link imperils freedom in both spheres. --- ## [Primary work] FREE ENTERPRISE AND DEMOCRACY URL: https://indianliberals.in/primary-works/free-enterprise-and-democracy-a-d-shroff-feb11-1956/ ### Summary Published by the Forum of Free Enterprise in 1956 — and reproduced from the Annual Number of Commerce that same year — A. D. Shroff's pamphlet is a direct rejoinder to Prime Minister Jawaharlal Nehru, who had recently told a Calcutta press conference that democracy and unrestricted private enterprise were incompatible. With the announcement of the 'Socialist pattern of Society' as the national goal, Shroff argues, the relationship between free enterprise and democracy has assumed great significance, and the country must decide whether the drift towards State Capitalism under the plea of a Welfare State threatens to 'enslave man to the State as a totalitarian State'. Shroff concedes that the doctrine of laissez faire is 'dead as dodo' and that the modern State legitimately regulates production, taxation, labour, and dividends. The real question is one of balance: a mixed economy in which a circumscribed free-enterprise sector and a State sector each play 'an important and autonomous role'.… ### Body ## Summary Published by the Forum of Free Enterprise in 1956 — and reproduced from the Annual Number of Commerce that same year — A. D. Shroff's pamphlet is a direct rejoinder to Prime Minister Jawaharlal Nehru, who had recently told a Calcutta press conference that democracy and unrestricted private enterprise were incompatible. With the announcement of the 'Socialist pattern of Society' as the national goal, Shroff argues, the relationship between free enterprise and democracy has assumed great significance, and the country must decide whether the drift towards State Capitalism under the plea of a Welfare State threatens to 'enslave man to the State as a totalitarian State'. Shroff concedes that the doctrine of laissez faire is 'dead as dodo' and that the modern State legitimately regulates production, taxation, labour, and dividends. The real question is one of balance: a mixed economy in which a circumscribed free-enterprise sector and a State sector each play 'an important and autonomous role'. He insists, against orthodox planners, that 'there is nothing inherently socialistic in Planning', and warns that once the State 'begins to intrude in the field of private or free enterprise, it will soon develop into a monopolist wielding power of an enormous character'. Drawing on Gandhi's warnings about the growing power of the State, Thomas Jefferson on the concentration of cares and powers, R. H. Tawney on the spirit behind planning, and R. H. S. Crossman on the menace of a 'vast centralised State bureaucracy', he reads recent events in Poland and Hungary as confirmation that nationalised industry breeds bureaucratic despotism and curtails democracy. The positive case rests on an analogy: the free market is itself a daily plebiscite, in which producers, workers, consumers, investors, creditors, and employers check one another, and where 'no single factor can ever hope to dominate a given situation for a long time'. Citing the Forum of Free Enterprise's own Manifesto — 'Monopoly of any kind, whether State or private, is undesirable' — Shroff points to the Sindhri Fertiliser Factory, the Life Insurance Corporation, Indian Airlines, the State Trading Corporation, and the State Transport Corporation as semi-monopoly bodies that risk the very freedoms Indian democracy depends on. The joint-stock company, with its 'about two and a half million' investors and broad share-ownership in steel, cement, textiles, and electricity, he holds up as a genuinely co-operative and democratic alternative. The pamphlet closes with a warning against the 'schizophrenia' of democratic socialists who accept freedom in theory and impose regimentation in practice. Free enterprise, Shroff concludes, must not be tolerated 'on sufferance, to be tolerated on grounds of political expediency, with the sword of Democles hanging over it in perpetual threat'; the new India must derive its strength from 'the solid foundations of democracy and freedom and not from the top-heavy buttresses of regimentation and concentration of power in a few hands'. ## Key points - Framed as a direct response to Nehru's Calcutta press-conference claim that democracy and unrestricted private enterprise are incompatible, and to the official 'Socialist pattern of Society' goal. - Concedes that laissez faire is obsolete and accepts a mixed economy in which a regulated State sector and an autonomous free-enterprise sector both play important roles. - Argues that planning is not inherently socialist; the real danger is the slide from planning into State Capitalism and a 'vast centralised State bureaucracy'. - Marshals Gandhi, Thomas Jefferson, Tawney, and Crossman to show that concentration of economic power in the State destroys individual liberty and corrodes democracy. - Cites Poland and Hungary as recent evidence that public ownership leads to bureaucratic despotism and curtailment of democracy. - Reframes the free market as itself a democratic institution — a continuous plebiscite by producers, consumers, workers, and investors that checks monopoly. - Names concrete Indian state ventures (Sindhri Fertiliser Factory, Life Insurance Corporation, Indian Airlines, State Trading Corporation, State Transport Corporation) as semi-monopoly threats to economic and political freedom. - Closes with a plea that free enterprise be treated as indispensable to democracy, not tolerated on sufferance under a perpetual sword of Damocles of legislative and administrative restriction. --- ## [Primary work] Free Enterprise and Freedom URL: https://indianliberals.in/primary-works/free-enterprise-and-freedom-murarji-j-vaidya-apr10-1956/ ### Summary Free Enterprise and Freedom is a short polemical pamphlet (No. 2 in the Forum of Free Enterprise series) reproducing an article by Murarji J. Vaidya from The Times of India of 30 March 1956. Its subject is the draft outline of the Second Five-Year Plan and, more pointedly, the Planning Commission's commitment to the "Socialist Pattern of Society" adopted at the Avadi session of the Congress. Vaidya quotes the Commission's own framing at length to show how programmatically the planners have absorbed the Avadi resolution into the basic criterion for what counts as economically advanced. The argumentative core is that simultaneously evolving democracy and a socialist pattern in an "underdeveloped economy working under an infant democracy" is historically unproven and dangerous.… ### Body ## Summary Free Enterprise and Freedom is a short polemical pamphlet (No. 2 in the Forum of Free Enterprise series) reproducing an article by Murarji J. Vaidya from The Times of India of 30 March 1956. Its subject is the draft outline of the Second Five-Year Plan and, more pointedly, the Planning Commission's commitment to the "Socialist Pattern of Society" adopted at the Avadi session of the Congress. Vaidya quotes the Commission's own framing at length to show how programmatically the planners have absorbed the Avadi resolution into the basic criterion for what counts as economically advanced. The argumentative core is that simultaneously evolving democracy and a socialist pattern in an "underdeveloped economy working under an infant democracy" is historically unproven and dangerous. Vaidya invokes Eastern Europe, Russia and China to argue that socialism has elsewhere "sounded the death-knell of democracy and of individual liberty," and turns the planners' own anti-concentration logic against them: if human nature, integrity and selflessness are at a uniformly low level across businessmen, industrialists, politicians and civil servants, there is no reason to believe that concentrating economic power in the hands of a few politicians and bureaucrats will yield better results than the supposed concentration already deplored in a few capitalists. From this, Vaidya draws a constitutional-liberal conclusion: a country that took decades to win political freedom should rank democracy, freedom and individual liberty above the pace of economic growth, and should prefer "the surer and historical proven processes of comparatively slow moving democracy" over the rapid methods witnessed in totalitarian countries. He further argues, on the planners' own numbers, that the Second Plan's industrial-sector targets are not of such higher magnitude than the First Plan as to require the institutional shift toward public ownership the draft proposes; the expansion of the public sector is, he says, "entirely dictated by the ideological determination based upon the Avadi resolution and not on considerations of the need for rapid rate of development." The pamphlet closes with an OUTLAY table comparing First and Second Plan allocations across seven major heads totalling Rs. 4,800 crores; the table runs to the last rendered page and appears truncated mid-list. ## Key points - Reproduction of a Times of India article (30 March 1956) by Murarji J. Vaidya, issued as Forum of Free Enterprise pamphlet No. 2; the topic is the draft outline of the Second Five-Year Plan and the place of the private sector within it. - Vaidya argues the Plan is conditioned by the Avadi-session "Socialist Pattern of Society" and that the Prime Minister and Congress leaders have already moved rhetorically from "Socialist Pattern" to plain "Socialist." - He challenges the feasibility of pursuing democracy and a socialist pattern simultaneously in an "underdeveloped economy working under an infant democracy," citing Eastern Europe, Russia (socialism abolishing democracy) and the still-unfolding Chinese experiment. - Central rhetorical move: if standards of integrity and selflessness are uniformly low across businessmen, industrialists, politicians and civil servants, replacing one concentration of economic power with another offers no guarantee of better outcomes. - Normative claim: a country that took decades to win political freedom should weigh democracy, freedom and individual liberty above the pace of economic development, preferring "comparatively slow moving democracy" to the rapid methods of totalitarian states. - Quantitative case: the Second Plan's industrial-sector targets (apart from already-decided steel plants) are not of such magnitude beyond First Plan capacity as to require an institutional shift to public ownership; the shift is ideological, not developmental. - Pamphlet ends with an OUTLAY table comparing First Plan and Second Plan provisions across seven heads — agriculture, irrigation, power, industries, transport, social services and miscellaneous — on a total developmental outlay of Rs. 4,800 crores. --- ## [Primary work] Free Enterprise in India — A Call For Leadership URL: https://indianliberals.in/primary-works/free-enterprise-in-india-a-call-for-leadership-a-d-shroff-25-october-1961/ ### Summary Delivered as A. D. Shroff's presidential address at the fifth annual general body meeting of the Forum of Free Enterprise in Bombay on 25 October 1961, this pamphlet mounts a sustained critique of India's Third Five-Year Plan as a 'carbon copy of the Soviet Communist model of planning.' Shroff argues that doctrinaire socialism is unsuited to India's democratic life, citing converging evidence from the Soviet Union (Khrushchev's cautions on wages and incentives), China (the Big Leap Forward's failure and the emergence of 'small freedoms'), Yugoslavia, Poland, and France that even communist and socialist economies are quietly shifting toward market signals, price formation, and private initiative.… ### Body ## Summary Delivered as A. D. Shroff's presidential address at the fifth annual general body meeting of the Forum of Free Enterprise in Bombay on 25 October 1961, this pamphlet mounts a sustained critique of India's Third Five-Year Plan as a 'carbon copy of the Soviet Communist model of planning.' Shroff argues that doctrinaire socialism is unsuited to India's democratic life, citing converging evidence from the Soviet Union (Khrushchev's cautions on wages and incentives), China (the Big Leap Forward's failure and the emergence of 'small freedoms'), Yugoslavia, Poland, and France that even communist and socialist economies are quietly shifting toward market signals, price formation, and private initiative. He marshals Wilhelm Roepke on the time horizon of economic activity, Arthur Larson on consumer sovereignty, and Colin Clark on the human—not capital—factor in growth to argue that state-led investment without legal-institutional foundations wastes resources and lowers public morals. Shroff then turns to a detailed indictment of the Indian state sector: profiteering and bungling by the State Trading Corporation, rupee-payment scandals with communist countries, half-percent returns on state investment, the unilateral hike of telephone and platform-ticket rates, the H.M.T. watch scandal recounted by the columnist 'Beachcomber,' and the Maharashtra Land Ceiling Act's takeover of Deccan sugar-factory farms despite a four-times-national-average yield. Vituperative press attacks on the 'jute Press' and the steady erosion of Article 31 property rights, he warns, show that 'those who frown on free enterprise and free society are the grave-diggers of the free Press.' The most arresting passages reframe socialism as the practice by which 'politics has become an industry of major proportions'—a perquisite-driven class of professional politicians whose unregulated industry has lowered standards of public conduct, while private enterprise alone faces the discipline of market and regulation. Shroff calls not for a ceiling over enterprise but for a ceiling over 'arbitrary political and bureaucratic power.' He closes with a call to leadership: private enterprise must step beyond its commercial role into education, civic amenities, social service, and flood-relief work, taking 'the mischief of politics' out of every sphere of life. He invokes Acharya Vinoba Bhave's 1959 warning and Mahatma Gandhi's caution against a government that 'did everything for the people' while people did nothing—anchoring the case for free enterprise in India's own democratic and Gandhian inheritance. ## Key points - Frames the Third Five-Year Plan as a 'carbon copy of the Soviet Communist model' and as eminently unsuited to India's democratic structure. - Marshals comparative evidence from the USSR, China, Yugoslavia, Poland, and France that communist and socialist economies are themselves drifting toward market incentives and private initiative. - Cites Jayaprakash Narayan's reported disillusionment with the nationalisation of big industries as evidence that even socialist founders are abandoning doctrinaire positions. - Indicts the State Trading Corporation for bungling, profiteering in cement, and a rupee-payment regime that shrinks Indian exports to Western markets and may finance subversion of the Constitution. - Catalogues failures of state enterprises: half-percent returns on state investment, ad-hoc hikes of telephone and platform-ticket rates, the H.M.T. 'Sujata' watch scandal, and inadequate telegraphic and telephonic infrastructure. - Argues that erosion of Article 31 property rights and the Maharashtra Land Ceiling Act's takeover of high-yield Deccan sugar-factory farms penalise success and chill entrepreneurial initiative. - Reframes socialism as 'politics as an industry,' a perquisite economy of professional politicians whose unregulated profession lowers standards of public conduct. - Calls on private enterprise to assume leadership beyond commerce—in education, civic life, and social service—citing Indian Chamber of Commerce, Indian Merchants' Chamber, and Andhra Chamber initiatives as encouraging signs. --- ## [Primary work] Free Enterprise in India - A Call For Leadership URL: https://indianliberals.in/primary-works/free-enterprise-in-india-a-call-for-leadership-by-ad-shroff-november-8-1961/ ### Summary A. D. Shroff's presidential address to the fifth annual general body meeting of the Forum of Free Enterprise (Bombay, 25 October 1961) is a sweeping liberal indictment of India's Third Five-Year Plan and the doctrinaire socialism that animates it. Shroff opens with the observation that even committed socialists like Jayaprakash Narayan are now disillusioned with nationalisation, and reads the lengthy delay between draft and parliamentary approval of the Third Plan as itself a comment on the costs of centralised planning. He frames the Third Plan as a "carbon copy of the Soviet Communist model" — heavy industry, collectivised agriculture, centralised ownership, and a gross disregard for basic human liberties — and argues that even communist regimes (the USSR under Khrushchev, China after the Great Leap, Yugoslavia, Poland) are quietly retreating toward price signals, private smallholdings, and incentives.… ### Body ## Summary A. D. Shroff's presidential address to the fifth annual general body meeting of the Forum of Free Enterprise (Bombay, 25 October 1961) is a sweeping liberal indictment of India's Third Five-Year Plan and the doctrinaire socialism that animates it. Shroff opens with the observation that even committed socialists like Jayaprakash Narayan are now disillusioned with nationalisation, and reads the lengthy delay between draft and parliamentary approval of the Third Plan as itself a comment on the costs of centralised planning. He frames the Third Plan as a "carbon copy of the Soviet Communist model" — heavy industry, collectivised agriculture, centralised ownership, and a gross disregard for basic human liberties — and argues that even communist regimes (the USSR under Khrushchev, China after the Great Leap, Yugoslavia, Poland) are quietly retreating toward price signals, private smallholdings, and incentives. By contrast, French indicative planning, which works through consultation with industry and incentives rather than coercion, is offered as the better model for a democracy. Drawing heavily on Colin Clark's Growthmanship, Shroff argues that the controlling factor in economic growth is the human factor, not the volume of state investment, and that India's planners have wasted capital, distorted production, and built up a costly apparatus of officialdom by treating public expenditure as automatically productive. He then catalogues the operational failure of Indian state enterprises — the State Trading Corporation's cement profiteering and the cancelled Pakistan sugar deal, the rupee-payment scandal flagged by Murarji Vaidya, low returns on state investments confirmed by the Finance Minister, the unaccountable accounting at government companies, unilateral hikes in telephone and air fares, and the H.M.T. "Sujata" watch episode in which Japanese-made watches were distributed as gifts to M.P.s and journalists — to argue that monopolistic government undertakings hold consumers to ransom while lowering public morality. In parallel, Shroff documents what he calls a "sustained attack on the fundamental requirements of private enterprise and a democratic society" — vituperative attacks on a press described as "jute Press" by a professional politician, the steady erosion of Article 31 property rights, the takeover of Deccan sugar factory farms under the Maharashtra Land Ceiling Act despite their yields being four times the national average, and the criminalisation of politics evidenced by reports of M.P.s consorting with Chambal dacoits, M.L.A. kidnapping charges, and Home Minister Charan Singh's own admission that criminal elements had entered political parties. He concludes that "under socialism, politics has become an industry of major proportions," with a new professional-political class whose privileges depend on the state sector and who face no market discipline. The closing call is to private enterprise itself: to assume leadership beyond business — in education, civic life, social service, and the shaping of public opinion in favour of "realistic planning" — and to stop ceding these spheres to professional politicians. Shroff points to the Indian Chamber of Commerce's Dandakaranya work, the Indian Merchants' Chamber's economic research unit, the Andhra Chamber's employment exchange, and private flood-relief and rural-uplift work as harbingers of a more responsible non-state leadership. He closes with Acharya Vinoba Bhave's January 1959 warning that concentrated power in the name of welfare digs democracy's own grave, and with Mahatma Gandhi's reminder that a state that does everything for the people is the negation of democracy. ## Key points - The Third Five-Year Plan is characterised as a "carbon copy of the Soviet Communist model" — heavy industry, collectivisation, centralised ownership, neglect of consumer goods, and disregard for basic human liberties — and judged incompatible with India's democratic structure. - Communist economies themselves (USSR under Khrushchev, China's Ta Kung Pao on "small freedoms", Yugoslavia, Poland) are quietly shifting back toward market incentives and private ownership, undermining the Indian planners' chosen model. - French indicative planning — consultation with 3,000 industry representatives through 25 commissions, incentives instead of coercion, qualitative living-conditions targets — is offered as a democratically compatible alternative. - Citing Colin Clark's Growthmanship, Shroff argues the controlling factor in growth is human rather than capital, that capital-output-ratio thinking is discredited, and that India's pre-occupation with state investment betrays an urge to enlarge the public sector for its own sake. - State enterprises are catalogued as inefficient and corrupting — State Trading Corporation profiteering and a Pakistan sugar deal lost over a missed telegram, the rupee-payment scandal flagged by Murarji Vaidya, sub-1% returns on state investment, the H.M.T. "Sujata" watch episode, unilateral telephone and air-fare hikes. - A sustained attack on private enterprise and democratic preconditions is identified: vituperation against the press (the "jute Press" slur), steady erosion of Article 31 property rights, the Maharashtra Land Ceiling Act takeover of high-yielding Deccan sugar factory farms, and arbitrary regulatory ceilings on private initiative. - Shroff argues that under socialism politics has itself become "an industry of major proportions," with a perquisite-driven political class (Union Ministers paid Rs. 2,250 but worth Rs. 6,000 with free electricity and perks) shielded from market or regulatory discipline. - Private enterprise is called to leadership beyond business — in education, civic amenities, social service, and shaping public opinion for realistic planning — with the Indian Chamber of Commerce, Indian Merchants' Chamber, and Andhra Chamber cited as positive signs. --- ## [Primary work] Free Enterprise is Economic Democracy URL: https://indianliberals.in/primary-works/free-enterprise-is-economic-democracy-lady-margaret-thatcher-february-15-1995/ ### Summary This Forum of Free Enterprise booklet collects two excerpts from Lady Margaret Thatcher: a keynote address delivered in Bombay on 9 September 1994 under the Citibank Leadership Speaker Series ("Free Enterprise is Economic Democracy"), and a lecture titled "The New World Order" given at the Fraser Institute's 20th Anniversary luncheon in Vancouver in 1994. Together they amount to a compressed manifesto of Thatcherism reframed for an Indian audience on the cusp of liberalisation. In the first piece Thatcher argues that economic freedom is itself a form of freedom, that free enterprise is best understood as 'economic democracy,' and that the state's role should be limited but strong — sound on currency and finance, restrained on industry.… ### Body ## Summary This Forum of Free Enterprise booklet collects two excerpts from Lady Margaret Thatcher: a keynote address delivered in Bombay on 9 September 1994 under the Citibank Leadership Speaker Series ("Free Enterprise is Economic Democracy"), and a lecture titled "The New World Order" given at the Fraser Institute's 20th Anniversary luncheon in Vancouver in 1994. Together they amount to a compressed manifesto of Thatcherism reframed for an Indian audience on the cusp of liberalisation. In the first piece Thatcher argues that economic freedom is itself a form of freedom, that free enterprise is best understood as 'economic democracy,' and that the state's role should be limited but strong — sound on currency and finance, restrained on industry. She praises Asia's growth miracle, urges India to use its democratic openness and middle-class capacity to consolidate reform, and presents privatisation as the mechanism that 'shrinks the powers of the state and enlarges the power of the people.' The second piece is autobiographical: Thatcher recounts the four things her 1979 government did 'pretty well immediately' — cutting income tax rates from a top of 83 percent down to 40 percent, dismantling price/incomes/exchange/development controls, rewriting trade-union law to restore the secret ballot and curb collective bullying, and privatising 46 nationalised industries. She frames the project as a moral one: capitalism, not socialism, carries the moral quality because it depends on voluntary cooperation, the rule of law, and the responsible exercise of freedom. The closing reflection insists that politicians must seek power by 'getting their convictions right,' rooted in the best traditions of their country. ## Key points - Thatcher reframes free enterprise as 'economic democracy' — power dispersed to the people through ownership and the market, parallel to political democracy through the vote. - The state should be 'limited but strong': sound finance and a stable currency are core duties, while industry and management belong with private owners. - Privatisation is treated as both an economic and a political instrument — it shrinks state power and converts ordinary wage-earners into shareholders and homeowners. - India is addressed directly: its established parliamentary democracy and large entrepreneurial middle class are presented as competitive advantages over China and post-Soviet Russia. - The 1979 UK reform programme is summarised as four immediate moves — cut income-tax rates (top rate from 83% to 40%), abolish prices/incomes/exchange/Development controls, reform trade-union law (secret ballot, end of the closed shop), and privatise 46 nationalised industries. - Lower tax rates produced higher revenues: the top 5 percent of earners contributed a bigger share of tax at 40 percent than they had at 83 percent — Thatcher's headline 'power of incentives' claim. - Capitalism is defended in explicitly moral terms — it requires voluntary joint action, the rule of law, and serving others through the market — while socialism is cast as 'the planning by the few over the lives of the many.' - Political leadership is figured as conviction politics against 'the art of the possible': the task in 1979 was to make the impossible happen by refusing pragmatism untethered from values. --- ## [Primary work] Free Enterprise in India and Freedom URL: https://indianliberals.in/primary-works/free-enterprise-in-india-and-freedom-a-d-shroff-january-4-2011/ ### Summary This 2011 Forum of Free Enterprise pamphlet reproduces two companion articles originally published in The Times of India on 30 March 1956 — A. D. Shroff's "Free Enterprise in India" and Murarji J. Vaidya's "Free Enterprise and Freedom" — bracketed by a fresh introduction from then-president Minoo R. Shroff that frames the reissue as a tribute to the late Farrok Mulla, a long-serving Forum office-bearer whose family sponsored the booklet. The two essays were prompted by the Government of India's adoption of a "socialistic pattern of society" as the credo of the Second Five-Year Plan, and together they argue that assigning the commanding heights of the economy to the public sector will both stifle the private sector that sustained pre-Independence growth and, more dangerously, concentrate economic power in the hands of politicians and bureaucrats in ways that will erode democracy and individual liberty. Shroff's piece concentrates on the practical and morale-based case for the private sector — describing the despondency among small businesspeople under Section 23-A of the Income-tax Act, the misrepresentation of "the Private Sector" as a handful of large industrialists, and the in… ### Body ## Summary This 2011 Forum of Free Enterprise pamphlet reproduces two companion articles originally published in The Times of India on 30 March 1956 — A. D. Shroff's "Free Enterprise in India" and Murarji J. Vaidya's "Free Enterprise and Freedom" — bracketed by a fresh introduction from then-president Minoo R. Shroff that frames the reissue as a tribute to the late Farrok Mulla, a long-serving Forum office-bearer whose family sponsored the booklet. The two essays were prompted by the Government of India's adoption of a "socialistic pattern of society" as the credo of the Second Five-Year Plan, and together they argue that assigning the commanding heights of the economy to the public sector will both stifle the private sector that sustained pre-Independence growth and, more dangerously, concentrate economic power in the hands of politicians and bureaucrats in ways that will erode democracy and individual liberty. Shroff's piece concentrates on the practical and morale-based case for the private sector — describing the despondency among small businesspeople under Section 23-A of the Income-tax Act, the misrepresentation of "the Private Sector" as a handful of large industrialists, and the indispensable role of agriculture, trade and small enterprise — and calls for an organised, country-wide educative campaign by the Forum and like-minded bodies. Vaidya's essay treats the same Second Plan documents as a political-philosophical problem: drawing on the experience of Eastern European countries that slid from socialism into communism, he warns that simultaneous pursuit of socialism and democracy in an under-developed economy risks sacrificing the latter, and that institutional changes envisaged by the Planners are dictated by the Avadi resolution rather than by any economic necessity. The introduction concludes that Forum's 1950s campaign has "in some way led to the liberalisation of the economy and the assignment of a larger role to the private sector after 1991". ## Essays ### Free Enterprise in India *By A. D. Shroff* Shroff assesses the role of private enterprise in the context of the Government's decision to establish a Socialist State, identifying two consequences: the State will progressively assume ownership of the means of production, and resources will be steadily diverted from the Private Sector to the Public Sector. He argues that while the unthinking majority may accept the official claim that this will raise mass living standards, many thinking citizens believe the policy will neither accelerate development nor serve the country's long-term interest, and that the cumulative effect of fiscal measures — notably Section 23-A of the Income-tax Act — is already breeding a defeatist mentality among small entrepreneurs that could amount to the "suicide of the Private Sector". The essay then turns from diagnosis to remedy. Shroff calls for an organised, country-wide educative campaign to dispel the caricature of the private sector as a few "tall poppies", reminding readers that it encompasses all of agriculture, the bulk of trade, and the great majority of industrial employment. He outlines a programme of cooperation with Government on national objectives, criticises the press for amplifying the ruling party while neglecting counter-arguments — singling out the campaign of vilification against private life insurance management ahead of nationalisation — and ends with a warning that India's thin borderline between democracy and totalitarianism can be crossed unless public opinion becomes vigilant enough to defend the freedom to think and to criticise. - Frames the Second Five-Year Plan's socialist credo as a binary choice that will shift ownership of production to the State and starve the Private Sector of resources. - Identifies Section 23-A of the Income-tax Act and broader fiscal measures as already producing a defeatist mood among small businesspeople who began with modest capital. - Insists the Private Sector is not a clique of large industrialists but encompasses agriculture, small and cottage industries, and the whole of internal and external trade. - Cites National Income Committee figures: nett output of "Small Enterprises" in 1950-51 was Rs 910 crores versus Rs 550 crores for "Factory Establishments", with 11.5 million workers in the former against 3 million in the latter. - Argues for an organised, country-wide educative campaign by Chambers of Commerce, trade associations and the Forum to counter Government propaganda, while still respecting laws and tax obligations. - Reads the vilification campaign against private life insurance management as a template for how the State justifies further nationalisation, and warns against tacit public acquiescence. - Closes with a civil-liberty warning that under one dominant party and no effective opposition, the line between democracy and totalitarianism in the economic field can soon be crossed. ### Free Enterprise and Freedom *By Murarji J. Vaidya* Vaidya reads the first chapter of the Second Five-Year Plan's draft outline as a near-final commitment to the "Socialistic Pattern of Society" adopted at the Avadi session of Congress, hardened in subsequent speeches by the Prime Minister and other Congress leaders into plain "Socialism". He notes that the Planning Commission justifies expanding the public sector chiefly on the ground of reducing inequalities of income, wealth and economic power, and that the Commission itself insists private profit can no longer be the criterion for major investment decisions, which must instead be made by "agencies informed by social purpose". Vaidya's central objection is not that these objectives are themselves illegitimate, but that simultaneous pursuit of socialism and democracy in an under-developed economy carries grave risks — risks already realised, he argues, by the Eastern European countries that slid from socialism into communism and lost both democracy and individual liberty. He warns that an expanding public sector will simply transfer concentrated economic power from "so-called capitalists" to politicians and bureaucrats whose integrity and patriotism cannot be assumed to exceed the average, and that the institutional changes envisaged are dictated by the Avadi resolution rather than by any demonstrated economic necessity, especially given the Private Sector's adequate performance in the First Plan outside of steel. He concludes by arguing that the new economic order should advance through the "surer and historically proven processes of comparatively slow moving democracy" rather than through totalitarian methods. - Treats the draft Second Plan as the operational expression of the Avadi resolution, with "Socialism" now formally replacing "Socialistic Pattern of Society". - Highlights the Commission's claim that private profit cannot be the basic criterion for major decisions, which must be made by "agencies informed by social purpose". - Draws an explicit parallel with Eastern European countries (including Russia) that began with socialism and ended with communism — "the death-knell of democracy and of individual liberty". - Argues that nationalisation merely relocates concentrated economic power from capitalists to politicians and bureaucrats, with no guarantee that the latter will be more virtuous. - Questions whether the rate of industrial-sector development envisaged justifies the institutional overhaul, given the Private Sector's record in the First Plan outside of the Steel Plants. - Frames the choice as one between achieving rapid socialism at the expense of democracy or achieving democracy at the expense of speed, and prefers the slower democratic path. --- ## [Primary work] FREE ENTERPRISE—THE KEY TO PROSPERITY URL: https://indianliberals.in/primary-works/free-enterprise-the-key-to-prosperity-by-sm-dahanukar/ ### Summary In this Forum of Free Enterprise leaflet, S. M. Dahanukar argues that India's post-Independence industrial and commercial progress — achieved against an initially hostile Governmental attitude — has come overwhelmingly from the spirit of enterprise of the private sector, and that the country's future development requires the Government to give private initiative still more room to operate. He concedes that the official outlook has begun to change since the First Plan and that the Second Plan set targets for the private sector worth Rs. 233 crores, but warns that adequate imports, finance, raw materials, and freedom to expand still need to be assured if private enterprise is to flourish. The heart of the pamphlet is an extended West German parable. Dahanukar describes Berlin in 1947, with sixty per cent of the city in rubble, and credits Ludwig Erhard's bold decision to remove controls — taken in the face of predicted chaos — with unleashing the individual initiative that produced the so-called German economic miracle.… ### Body ## Summary In this Forum of Free Enterprise leaflet, S. M. Dahanukar argues that India's post-Independence industrial and commercial progress — achieved against an initially hostile Governmental attitude — has come overwhelmingly from the spirit of enterprise of the private sector, and that the country's future development requires the Government to give private initiative still more room to operate. He concedes that the official outlook has begun to change since the First Plan and that the Second Plan set targets for the private sector worth Rs. 233 crores, but warns that adequate imports, finance, raw materials, and freedom to expand still need to be assured if private enterprise is to flourish. The heart of the pamphlet is an extended West German parable. Dahanukar describes Berlin in 1947, with sixty per cent of the city in rubble, and credits Ludwig Erhard's bold decision to remove controls — taken in the face of predicted chaos — with unleashing the individual initiative that produced the so-called German economic miracle. He quotes Erhard at length, including the latter's insistence that what happened in Germany was not a miracle at all but the result of an economic policy based on the principles of freedom that made human labour valuable and useful again. By 1958 West Germany had risen, in Dahanukar's telling, to lead Europe and overtake victorious England. Dahanukar then transposes the lesson onto India. He cites Erhard's 1958 New Delhi address to argue that fully-fledged economic planning misreads basic human nature, that economic life is shaped not at the draft-board but by human beings, and that the individual must be conscious of the value of his work and entitled to enjoy the fruits of his own success. The leaflet closes by posing the choice — free enterprise or planned development through a controlled public sector — and answering it through the West German results, expressing the hope that the Planning Commission and Government will take note while finalising the Third Five-Year Plan. ## Key points - Frames post-Independence Indian industrial progress as the achievement of the private sector working against, and only later with, Government attitudes. - Notes that the Second Five-Year Plan allocated Rs. 233 crores in targets to the private sector but argues that imports, finance, raw materials, and room to expand remain inadequately assured. - Uses West Germany after 1947 — Berlin sixty per cent rubble, no porter, no taxi, no cigarette — as the central case study for what economic freedom can rebuild. - Credits Ludwig Erhard's decision to scrap controls (against predictions of chaos) with releasing individual initiative that produced the 'German economic miracle'. - Quotes Erhard at length to argue that the so-called miracle was not a miracle but a deliberate policy based on the principles of freedom that restored the value of human labour. - Reports that by 1958 West Germany had become the leading nation of Europe and surpassed victorious England in foreign exchange reserves, with a standard of living twice that of England. - Invokes Erhard's 1958 New Delhi address to attack imitative planning, insisting that economic life is shaped 'not at the draft-board, but by human beings' and that individuals must enjoy the fruits of their own success. - Closes by posing the choice between free enterprise and controlled public-sector development and addresses the Planning Commission directly as it considers the Third Five-Year Plan. --- ## [Primary work] FREE ENTERPRISE WILL SURVIVE AS LONG AS MAN SURVIVES URL: https://indianliberals.in/primary-works/free-enterprise-will-survive-as-long-as-man-survives-by-ad-shroff-december-31-1958/ ### Summary A. D. Shroff replies to a recent batch of speeches by Prime Minister Jawaharlal Nehru that attacked the private sector, in particular a Calcutta address in which Nehru reportedly said critics in the Private Sector 'can be swept away with a broomstick.' Shroff treats this as evidence of irritation rather than argument: Nehru, he writes, has the political power to wield such a broom but cannot have any permanent effect, and the very sensitiveness on display is 'a weakness of small men born of the consciousness of having made mistakes and not having the moral courage to acknowledge them.' He pointedly contrasts the 'champion Democrat' with General Ayub Khan, whom Nehru has himself described as representing a 'naked military dictatorship', to suggest the Prime Minister's intolerance of dissent sits uneasily with his democratic claims. The second half turns to substance.… ### Body ## Summary A. D. Shroff replies to a recent batch of speeches by Prime Minister Jawaharlal Nehru that attacked the private sector, in particular a Calcutta address in which Nehru reportedly said critics in the Private Sector 'can be swept away with a broomstick.' Shroff treats this as evidence of irritation rather than argument: Nehru, he writes, has the political power to wield such a broom but cannot have any permanent effect, and the very sensitiveness on display is 'a weakness of small men born of the consciousness of having made mistakes and not having the moral courage to acknowledge them.' He pointedly contrasts the 'champion Democrat' with General Ayub Khan, whom Nehru has himself described as representing a 'naked military dictatorship', to suggest the Prime Minister's intolerance of dissent sits uneasily with his democratic claims. The second half turns to substance. Shroff concedes that the food problem requires constructive attention and that the State could play some role in correcting maldistribution, but argues that the decision to monopolise wholesale food-grain trading will displace hundreds of thousands of small merchants who have done this work for generations, will not increase output, and will end in a State Trading Corporation that — like the cement, manganese ore and tinplate monopolies before it — simply inserts an unnecessary and avoidable intermediary, taking 'no record so far' but a great deal of profiteering with it. He estimates the existing food trade at about Rs. 500 crores. Against Nehru's contention that private enterprise and democracy can be separated, the Forum of Free Enterprise insists the opposite: every diminution of private enterprise erodes the democratic way of life, and every citizen has a right to choose his avocation that State trading curtails. Shroff closes with confidence that informed opinion, once mobilised, will be heard 'sooner or later.' ## Key points - Frames the piece as a 'nasty rejoinder' to Nehru's recent attacks on private enterprise, especially his Calcutta line that critics 'can be swept away with a broomstick.' - Reads Nehru's sensitiveness as small-man weakness and as inconsistent with his own labelling of Ayub Khan's regime a 'naked military dictatorship.' - Argues that Government can clean its own Public Sector — already showing inefficiency, corruption and mismanagement — without abolishing private enterprise. - Accepts a limited State role in correcting maldistribution of food grains but rejects wholesale State trading on grounds it displaces hundreds of thousands of small merchants and adds no productive capacity. - Cites earlier State Trading Corporation interventions in cement, manganese ore and tinplate as precedents for profiteering and unnecessary intermediation. - Estimates the displaced private food-grains trade at about Rs. 500 crores. - Rejects Nehru's separation of private enterprise from democracy, insisting their fates are linked. - Positions the Forum of Free Enterprise as a vehicle for mobilising 'voiceless illiterate voters' and intelligent public opinion against State trading. --- ## [Primary work] FREE MARKET ECONOMY —Key to Economic Progress and Freedoms URL: https://indianliberals.in/primary-works/free-market-economy-key-to-economic-progress-and-freedoms-m-a-rangoonwaala-june-15-1982/ ### Summary This Forum of Free Enterprise booklet reproduces the inaugural address delivered by M. A. Rangoonwala, then immediate past President of the International Chamber of Commerce, at the Forum's Silver Jubilee celebrations in Bombay on 12 January 1982. It is framed by an introduction from the Forum's President N. A. Palkhivala and a short biographical note on the Forum's founder A. D. Shroff. Palkhivala's introduction sets up Rangoonwala's argument as a plea for the return of market forces, attacks the "permit-licence-quota raj" that Rajaji had named, and quotes Daniel Webster on civic responsibility. Rangoonwala's central claim is that the free market is not merely an instrument of efficiency but synonymous with freedom itself. He insists that government controls, whatever their stated rationale, are always "people control" rather than control of goods, prices or services, and that economic planning by definition requires compulsion even when dressed up in the consultative language of "indicative" rather than "imperative" plans.… ### Body ## Summary This Forum of Free Enterprise booklet reproduces the inaugural address delivered by M. A. Rangoonwala, then immediate past President of the International Chamber of Commerce, at the Forum's Silver Jubilee celebrations in Bombay on 12 January 1982. It is framed by an introduction from the Forum's President N. A. Palkhivala and a short biographical note on the Forum's founder A. D. Shroff. Palkhivala's introduction sets up Rangoonwala's argument as a plea for the return of market forces, attacks the "permit-licence-quota raj" that Rajaji had named, and quotes Daniel Webster on civic responsibility. Rangoonwala's central claim is that the free market is not merely an instrument of efficiency but synonymous with freedom itself. He insists that government controls, whatever their stated rationale, are always "people control" rather than control of goods, prices or services, and that economic planning by definition requires compulsion even when dressed up in the consultative language of "indicative" rather than "imperative" plans. He treats profit as morally legitimate, frames entrepreneurship as a unifying force, and argues that politicians' attachment to specific growth-rate targets reflects a "profound mystical belief in the power of words." He distinguishes three methods of organising an economy — the free market, the socialist or centralised method, and a "compromising way" that pretends to occupy a middle path. The compromising way, in his account, is in substance the socialist method, because once the principle of coercion is admitted there is no defensible ground on which to stop the proliferation of controls. The half-free economy, while preferable to none at all, is inherently unstable and expansionist in its coercive component. The rendered pages close with the opening of an extended critique of developing-country policy. Rangoonwala argues that intervention has gone far beyond protecting the weak and now placates organised, vocal interests; that the fetish of industrialisation has caused governments to oppress and exploit agriculture; and that this neglect must eventually trigger a rebound as peasants retreat to subsistence farming. The chunk ends mid-argument on page 14 of the printed text, with the remainder of the address not yet rendered. ## Key points - Text of M. A. Rangoonwala's address at the Forum of Free Enterprise Silver Jubilee, Bombay, 12 January 1982, prefaced by N. A. Palkhivala's introduction and a biographical sketch of A. D. Shroff. - Core thesis: the free market and freedom are synonymous; the only thing governments can ever control is people, not goods, prices or services. - Planning is inherently coercive — "indicative" planning is a euphemism, since a plan that genuinely accommodated everyone's voluntary choices would be pointless. - Government targets for growth rates rest on a "mystical belief in the power of words"; rapid growth is a by-product of good policy, never a policy in itself. - Three methods compared — free market, socialist/centralised, and a "compromising way" middle path that Rangoonwala argues collapses into socialism because it admits coercion without limit. - Critique of developing-country interventionism as placation of organised, vocal interest groups irrespective of their economic condition. - Critique of industrialisation bias: agriculture has been squeezed to subsidise industry, and a peasant retreat to subsistence farming will follow. - Palkhivala's introduction reinforces the address with Rajaji's "permit-licence-quota raj" and a Daniel Webster epigraph on civic responsibility. --- ## [Primary work] FREE MARKET ECONOMY —Key to Economic Progress and Freedoms URL: https://indianliberals.in/primary-works/free-market-economy-key-to-economic-progress-and-freedoms-by-ma-rangoonwala-1982/ ### Summary Free Market Economy — Key to Economic Progress and Freedoms reproduces M. A. Rangoonwala's January 1982 inaugural address at the Silver Jubilee celebrations of the Forum of Free Enterprise, prefaced by an introduction by N. A. Palkhivala and a short biographical sketch of the Forum's founder-president A. D. Shroff. Rangoonwala, then the immediate past President of the International Chamber of Commerce, argues that the free market is not merely an efficient allocation mechanism but the indispensable foundation of all human freedoms — "the market and freedom are really synonymous terms." The bulk of the rendered chunk is a sustained polemic against government planning and the dirigiste state. Rangoonwala rejects the standard justifications for government direction (that the free market produces "wrong" goods, or insufficient goods) and exposes the linguistic sleight by which planners rebrand compulsion as merely "indicative". He insists that all controls are ultimately "people control": the State does not, in the end, control commodities, prices or services in the abstract but only the human beings who manufacture, distribute and consume them.… ### Body ## Summary Free Market Economy — Key to Economic Progress and Freedoms reproduces M. A. Rangoonwala's January 1982 inaugural address at the Silver Jubilee celebrations of the Forum of Free Enterprise, prefaced by an introduction by N. A. Palkhivala and a short biographical sketch of the Forum's founder-president A. D. Shroff. Rangoonwala, then the immediate past President of the International Chamber of Commerce, argues that the free market is not merely an efficient allocation mechanism but the indispensable foundation of all human freedoms — "the market and freedom are really synonymous terms." The bulk of the rendered chunk is a sustained polemic against government planning and the dirigiste state. Rangoonwala rejects the standard justifications for government direction (that the free market produces "wrong" goods, or insufficient goods) and exposes the linguistic sleight by which planners rebrand compulsion as merely "indicative". He insists that all controls are ultimately "people control": the State does not, in the end, control commodities, prices or services in the abstract but only the human beings who manufacture, distribute and consume them. Planning is meaningful only when it overrides what individuals would have chosen voluntarily, and therefore unavoidably involves coercion; rapid growth, he argues, is a by-product of sound policy, not a policy in itself. Beyond planning, Rangoonwala mounts a broader case for entrepreneurship as a cultural and moral inheritance — addressing his audience as "descendants of those great entrepreneurs which this sub-continent produced" — and warns that government intervention now serves chiefly to "placate or curry favour with organised, vocal and politically powerful groups". He treats the "compromising way" or middle path as a covert variant of socialism, arguing that a half-free economy is inherently unstable because its coercive component is expansionist. In the closing pages of the rendered set he turns to agriculture, charging India and other developing countries with having been "criminally neglectful" of the rural economy by squeezing the peasant to subsidise industrialisation. Palkhivala's introduction frames the booklet's polemical ambition: he praises Rangoonwala for refusing to apologise for profit, indicts the "permit-licence-quota raj" that Rajaji had named, and invokes Daniel Webster on the duty of citizens to safeguard their own freedom. The chunk ends mid-argument on agricultural neglect, with at least eleven further PDF pages of the speech and back-matter unseen. ## Key points - Rangoonwala equates the free market with freedom itself, treating economic liberty as the precondition for every other freedom rather than as a merely technical question of efficiency. - The central rhetorical move of the speech is to relabel "economic controls" as "people control" — the State does not regulate commodities in the abstract but coerces the human beings behind them. - Government planning is exposed as inherently coercive: a plan that merely ratified what individuals would freely have chosen would be pointless, so a meaningful plan must override their preferences. - Rangoonwala dismisses growth-rate targeting as magical thinking, arguing rapid growth is a by-product of good policy (sound money, light taxes, profit-respect, free interest rates) and not a policy in itself. - He rejects the "compromising way" or mixed economy as a covert form of socialism, on the grounds that a half-free economy is unstable because its coercive part is expansionist. - He frames Indian and developing-country entrepreneurs as inheritors of a sub-continental tradition of self-made enterprise, and worries that pervasive bureaucratic permission-seeking is "diluting the blood of entrepreneurship in our veins". - He charges policy-makers with "criminally neglectful" treatment of agriculture, warning that squeezing the peasantry to fund industrialisation produces inevitable rebound and decline. - Palkhivala's introduction situates the address within the Forum of Free Enterprise's anti-permit-licence-quota tradition and explicitly endorses Rangoonwala's defence of profit and critique of "omniscient Government". --- ## [Primary work] FREE POWER A Step Backward! URL: https://indianliberals.in/primary-works/free-power-a-step-backward-harish-budhlani-october-18-2004/ ### Summary Free Power: A Step Backward! is a 2004 Forum of Free Enterprise booklet by the Thane-based energy management consultant Harish Budhlani, reprinted from an article in IEEMA Journal (September 2004). Budhlani argues that India's chronic underperformance in the power sector — per capita consumption of about 400 kwh against China's 850 kwh and the United States' 12,300 kwh, capacity-growth halved over 1995–2004, and State Electricity Board commercial losses anticipated at Rs.21,698 crore in 2004–05 — has finally produced a serious piece of reform legislation in the Electricity Act 2003, with provisions to phase out subsidies, deter theft, and put the sector on commercial principles. He warns that the new United Progressive Alliance's Common Minimum Programme proposal to review that Act, and the decisions of Andhra Pradesh, Tamil Nadu and Maharashtra to revive free power for farmers, betray a consensus that all Chief Ministers had reached with the Prime Minister to charge a minimum of 50 paise per unit. The core of the booklet is a populism critique grounded in distributional facts.… ### Body ## Summary Free Power: A Step Backward! is a 2004 Forum of Free Enterprise booklet by the Thane-based energy management consultant Harish Budhlani, reprinted from an article in IEEMA Journal (September 2004). Budhlani argues that India's chronic underperformance in the power sector — per capita consumption of about 400 kwh against China's 850 kwh and the United States' 12,300 kwh, capacity-growth halved over 1995–2004, and State Electricity Board commercial losses anticipated at Rs.21,698 crore in 2004–05 — has finally produced a serious piece of reform legislation in the Electricity Act 2003, with provisions to phase out subsidies, deter theft, and put the sector on commercial principles. He warns that the new United Progressive Alliance's Common Minimum Programme proposal to review that Act, and the decisions of Andhra Pradesh, Tamil Nadu and Maharashtra to revive free power for farmers, betray a consensus that all Chief Ministers had reached with the Prime Minister to charge a minimum of 50 paise per unit. The core of the booklet is a populism critique grounded in distributional facts. Budhlani argues that only 8–10 per cent of a Rs.1,500-crore-per-year free-power scheme will reach small farmers, with the bulk flowing to large and rich farmers; that nearly half of farmers depend on rainwater and only fifteen per cent use pump-sets, so the right policy is targeted relief — direct reimbursement of bills (as in Kerala), interest waivers on farm loans, or a uniform 50–100 paise tariff — not blanket give-aways that push State governments deeper into deficit and demoralise SEBs. He invokes Union Agriculture Minister Sharad Pawar's own statement that farmers want reliable power at a reasonable price rather than charitable power, and cites Shetkari Sanghatana's senior leader Sharad Joshi (referred to as 'Kamgar Paksh') as a farmers' voice opposing the free-power decision. The closing argument is institutional. CERC and SERCs, Budhlani writes, must set tariffs that progressively reflect the cost of supply; private investment in generation, transmission and distribution — the only realistic route to closing the 8,000–9,000 MW annual capacity gap — will not come if State governments continue to send populist signals or expect regulators to absorb political pressure. The Electricity Act 2003 must be implemented 'in words and spirit'; otherwise India's familiar pattern of 'two steps forward and one step backward' will defeat the goal of power for all at an affordable price. ## Key points - Per capita electricity consumption in India (~400 kwh) is roughly half of China's and a fraction of the United States' (~12,300 kwh), and capacity growth over 1995–2004 slowed to 3.6% — half the previous decade's rate. - The Electricity Act 2003 is praised as well-drafted legislation: it mandates regulatory commissions, gradual elimination of subsidies and cross-subsidies, advance government payment for any subsidies (Clause 65), and deterrent punishment for theft. - The UPA's Common Minimum Programme proposal to review the Act, and free-power announcements by Andhra Pradesh, Tamil Nadu and Maharashtra, break the Chief Ministers' consensus with the Prime Minister to charge a minimum of 50 paise per unit. - Distributional analysis: only about 8–10% of a Rs.1,500-crore free-power scheme would actually benefit small farmers; the remainder accrues to large and rich farmers, while Maharashtra already carries Rs.90,000 crore of state debt. - Author cites Union Agriculture Minister Sharad Pawar — and Shetkari Sanghatana's senior leadership — for the position that farmers want reliable, affordable power, not free and charitable power. - Alternatives proposed include reimbursement of electricity bills for genuinely poor farmers (as done by Kerala), interest waivers on farm loans, and a uniform 50–100 paise/unit tariff fixed in consultation with the Prime Minister. - CERC and SERCs must be allowed to set fair, affordable, cost-reflective tariffs without political interference; otherwise private sector investment in generation and distribution will not materialise. - Populist free-power decisions endanger SEB finances, deter domestic and foreign investment, and undo two decades of reform momentum. --- ## [Primary work] Freedom and Economic Growth URL: https://indianliberals.in/primary-works/freedom-and-economic-growth-prof-g-carlweiland-jun8-1962/ ### Summary Freedom and Economic Growth is a short Forum of Free Enterprise pamphlet by Prof. G. Carl Wiegand of Southern Illinois University, published in Bombay on 8 June 1962 and subtitled "Is Socialism the Answer?". Wiegand argues that mass hunger in Asia, Africa and Latin America is not a problem of natural resources or capital scarcity but of ideology: the leaders of underdeveloped countries have absorbed European-style statism, Keynesian deficit thinking, and Fabian welfare-state slogans precisely at the moment when the West is paying the price for them. He marshals a series of national comparisons — Switzerland against Brazil, post-war West Germany against fifteen years of regimentation, Malaya against Indonesia, Japan against an India that for two hundred years "lived for almost 200 years under British colonial rule" yet remained behind — to insist that institutions, private property rights and personal freedom, not endowment or aid, determine growth. The pamphlet's central polemic is directed at the conviction, which Wiegand attributes to Jawaharlal Nehru and to "many American economists and politicians," that a totalitarian or socialist state is "a 'people's republic' in which th… ### Body ## Summary Freedom and Economic Growth is a short Forum of Free Enterprise pamphlet by Prof. G. Carl Wiegand of Southern Illinois University, published in Bombay on 8 June 1962 and subtitled "Is Socialism the Answer?". Wiegand argues that mass hunger in Asia, Africa and Latin America is not a problem of natural resources or capital scarcity but of ideology: the leaders of underdeveloped countries have absorbed European-style statism, Keynesian deficit thinking, and Fabian welfare-state slogans precisely at the moment when the West is paying the price for them. He marshals a series of national comparisons — Switzerland against Brazil, post-war West Germany against fifteen years of regimentation, Malaya against Indonesia, Japan against an India that for two hundred years "lived for almost 200 years under British colonial rule" yet remained behind — to insist that institutions, private property rights and personal freedom, not endowment or aid, determine growth. The pamphlet's central polemic is directed at the conviction, which Wiegand attributes to Jawaharlal Nehru and to "many American economists and politicians," that a totalitarian or socialist state is "a 'people's republic' in which the people have a choice." Against this he sets a long passage from Gandhi describing the state as "a soulless machine" that "can never be weaned from violence," and against the welfare-state slogan of "freedom from want" he argues a semantic confusion: men under such regimes surrender freedom for security and end with neither. Forced industrialisation, displacement of private investment by inter-governmental loans (the "Alliance for Progress" is cited as a cautionary example), and growth-through-inflation policies are presented as wrong remedies that mimic the European absolutism and mercantilism Europe itself had to defeat. The closing pages turn to a constructive recommendation aimed squarely at Indian planners. Wiegand argues that agricultural surplus, not steel mills, has historically preceded industrialisation — citing eastern Germany and the early United States — and that India would gain more from "100,000 steel plows at $20 each" than from a single $2 million machine tool. He warns that India's Second Five-Year Plan misreads the tempo of progress, that public-sector competition with private firms scares away investment, and that the "growth-through-inflation" formula makes Indian economic development possible only "on a totalitarian basis." The pamphlet closes with the standard Forum of Free Enterprise membership appeal and a flanking A. D. Shroff epigraph: "Free Enterprise was born with man and shall survive as long as man survives." ## Key points - Hunger in the underdeveloped world is framed as an ideological failure, not a resource or capital shortage — "Neither capital nor natural resources assure economic growth." - Cross-country comparisons (Switzerland vs Brazil, West Germany's recovery, Malaya vs Indonesia, Japan vs India) are used to argue that private property, private initiative and respect for individual rights are the real growth variables. - Nehru's collectivist premise — that a socialist state is a "people's republic" in which the people have a choice — is rejected as resting on a false equation of state and people. - Gandhi is enlisted as an ally against state planning, via his characterisations of the state as a "soulless machine" and as concentrated violence that "unmans the people and deprives them of initiative." - Fabian "freedom from want" rhetoric is attacked as a semantic confusion that trades political freedom for economic security and yields neither. - Foreign aid and inter-governmental loans (Inter-American "Alliance for Progress") are argued to crowd out private investment rather than complement it, especially when channelled into public-sector industries that compete with private enterprise. - Agricultural surplus is presented as the historical precondition for industrialisation; capital-light, labour-intensive agriculture — "100,000 steel plows at $20 each" — is recommended over showcase heavy industry. - The "growth-through-inflation" formula is named as the chief threat to both the US economy and India's development, making Indian growth possible only on "a totalitarian basis." --- ## [Primary work] Freedom of the Press URL: https://indianliberals.in/primary-works/freedom-of-the-press-dr-mankekar-october-12-1971/ ### Summary D. R. Mankekar's 1971 booklet reprints a speech delivered on 15 September at the New Delhi Centre of the Forum of Free Enterprise. It is a polemic against two emerging Government misconceptions about the press in the months leading up to the draft Bill on diffusion of newspaper ownership and the 25th Constitution Amendment: first, that dissent is a grave crime and conformity to the Government's thinking is the quintessence of free expression; and second, that diffusion of press ownership somehow secures the independence of the press. Mankekar frames press freedom as the right of dissent — the co-existence of conflicting viewpoints contending for the minds of citizens — and reads the assault on the so-called 'monopoly business' papers as an ideological vendetta against the only papers financially strong enough to resist Government pressure and patronage. The argument moves through international comparisons. Mankekar invokes the U.S. First Amendment as the bulwark behind a press that took on Franklin Roosevelt, Harry Truman and John Kennedy; the Republican-owned American papers that nevertheless criticised Republican policies; Edward Heath's grumbles in Britain; M.… ### Body ## Summary D. R. Mankekar's 1971 booklet reprints a speech delivered on 15 September at the New Delhi Centre of the Forum of Free Enterprise. It is a polemic against two emerging Government misconceptions about the press in the months leading up to the draft Bill on diffusion of newspaper ownership and the 25th Constitution Amendment: first, that dissent is a grave crime and conformity to the Government's thinking is the quintessence of free expression; and second, that diffusion of press ownership somehow secures the independence of the press. Mankekar frames press freedom as the right of dissent — the co-existence of conflicting viewpoints contending for the minds of citizens — and reads the assault on the so-called 'monopoly business' papers as an ideological vendetta against the only papers financially strong enough to resist Government pressure and patronage. The argument moves through international comparisons. Mankekar invokes the U.S. First Amendment as the bulwark behind a press that took on Franklin Roosevelt, Harry Truman and John Kennedy; the Republican-owned American papers that nevertheless criticised Republican policies; Edward Heath's grumbles in Britain; M. Hubert Beauve-Mery of Le Monde on why a newspaper cannot allow dissensions in command; and John Thaddeus Delane's classic claim that the duties of government and press are 'constantly separate, generally independent, sometimes diametrically opposite.' He treats the draft Bill's call for editorial unity in a board of representative trade unions and elective directors as a 'tall order' that would either deliver the editorial sanctum to trade-union ideology, hand it to Government nominees through the back door, or leave editorial anarchy in place of proprietorial discipline. The 'Yugoslav analogy' of co-existence of conflicting ideologies within one paper is dismissed as inapplicable to a republic whose constitution lays down a single ideological framework and whose industries are not socially owned. The remedy Mankekar proposes is not structural reform of ownership but the elevation of the editor — protecting the editor's supremacy against proprietorial interference and undue commercial considerations, while urging the proprietor to divest commercial interests that conflict with the paper's vocation. He closes by recommending that the Government refer charges against the press to the Press Council and seek its expert opinion before legislating. An appendix collects Mankekar's own credo of the journalist's vocation, his invocations of Lokmanya Tilak and Mahatma Gandhi as exemplars of journalism as 'foundry of the nation', a 1968 passage from Indira Gandhi on the threat to a free press coming as much from within journalism as from authority, and Justice Hugo Black's opinion in U.S. v. New York Times. ## Key points - Frames the essence of press freedom as the right of dissent and the co-existence of conflicting viewpoints, against a Government view that equates dissent with grave crime and 'commitment' with blind acceptance of policy. - Argues that the draft Bill on diffusion of press ownership and the 25th Constitution Amendment together threaten the Fundamental Right of free expression and amount to 'nationalisation of the Press by the backdoor'. - Reads the Government's championing of 'small newspapers' as an ideological vendetta against larger, financially independent papers that resist governmental pressure and patronage. - Anchors the argument in U.S. and U.K. parallels — the First Amendment, Republican-owned papers opposing Republican presidents, Heath's complaints about the British press — to show that a hostile press is the normal condition of a working democracy. - Critiques co-operative or employee-shareholder schemes as an opening for trade-union political ideology to penetrate the editorial sanctum, and the 'Yugoslav analogy' as inapplicable to Indian constitutional and economic conditions. - Locates the real measure of press reform in editorial supremacy: protecting the editor from proprietorial and commercial interference, and asking proprietors to disengage from conflicting commercial interests. - Recommends that Government route any charges against the press through the Press Council and act on its expert opinion rather than through new legislation. - Concludes with an appendix triangulating Mankekar's own credo, Indira Gandhi's 1968 warning about threats to press freedom from within journalism, and Justice Hugo Black's defence of the press's right to expose deception in government. --- ## [Primary work] Fresh Thinking on Planning and Prices URL: https://indianliberals.in/primary-works/fresh-thinking-on-planning-and-prices-june-14-1977/ ### Summary Published by the Forum of Free Enterprise in Bombay and dated June 1977, "Fresh Thinking on Planning and Prices" is a compilation pamphlet rather than a single-author essay. It brings together two important planning documents that appeared in the second half of April 1977 — a moment of political and economic transition in India following the end of the Emergency — and frames them as essential reading for citizens concerned with growth, social justice, and the persistent problem of rising prices. The first half of the pamphlet reproduces substantial extracts from "People's Plan II," prepared by a Planning Committee of the Indian Renaissance Institute (a society founded by the late M. N. Roy) under the convening leadership of V. M. Tarkunde and including economists B. M. Banerjee, Amlan Datta, G. R. Dalvi, G. D. Parikh, and Amrutananda Das. Banerjee, Datta, Dalvi, Parikh and Das co-authored the planning framework as members of the IRI committee, contributing the analysis of investment priorities, distributive justice, and the four-objectives architecture that organises the document. People's Plan II builds on the original People's Plan prepared in 1944 by a committee of the Indian Federation of Labour under M. N. Roy's inspiration. The document articulates four core planning objectives: satisfying minimum primary consumption needs, maximising employment through productive involvement rather than mere welfare transfers, achieving distributive justice by reversing the accrual of growth benefits to rentiers and traders, and eliminating the poverty afflicting the bottom 40 percent of the population. On investment priorities it makes a decisive break with Nehruvian orthodoxy by subordinating heavy-industry allocations to agricultural development, small industry, social services, and basic wage-goods production — arguing that heavy industry should be a tool of development, not an end in itself. The second half reproduces a summary of FULLMANGAL (Five per cent Upper Linear Limit on Money's Annual Growth rate As per Law), a scheme submitted to the Prime Minister in April 1977 by Prof. C. N. Vakil and Prof. P. R. Brahmananda of Bombay University. Building on the earlier SEMIBOMBLA memorandum that 140 economists had submitted in February 1974 — and which the authors credit for the fall in prices witnessed from September 1974 — FULLMANGAL proposes a monetarist anti-inflation programme of 22 specific measures. Its centrepiece is a constitutional amendment placing a 5 percent annual ceiling on money supply growth, combined with a 5 percent reduction in money stock in 1977–78, a target WPI reduction of 10 percent over two financial years from the March 1977 level of 182, a budgetary surplus of Rs. 750 crores, a 5 percent across-the-board cut in government disbursements, a reduction of subsidies by 50 percent, and a comprehensive 8-point interest-rate reform. ### Body ## Summary Published by the Forum of Free Enterprise in Bombay and dated June 1977, "Fresh Thinking on Planning and Prices" is a compilation pamphlet rather than a single-author essay. It brings together two important planning documents that appeared in the second half of April 1977 — a moment of political and economic transition in India following the end of the Emergency — and frames them as essential reading for citizens concerned with growth, social justice, and the persistent problem of rising prices. The first half of the pamphlet reproduces substantial extracts from "People's Plan II," prepared by a Planning Committee of the Indian Renaissance Institute (a society founded by the late M. N. Roy) under the convening leadership of V. M. Tarkunde and including economists Amlan Datta, G. R. Dalvi, G. D. Parikh, and Amrutananda Das. People's Plan II builds on the original People's Plan prepared in 1944 by a committee of the Indian Federation of Labour under M. N. Roy's inspiration. The document articulates four core planning objectives: satisfying minimum primary consumption needs, maximising employment through productive involvement rather than mere welfare transfers, achieving distributive justice by reversing the accrual of growth benefits to rentiers and traders, and eliminating the poverty afflicting the bottom 40 percent of the population. On investment priorities it makes a decisive break with Nehruvian orthodoxy by subordinating heavy-industry allocations to agricultural development, small industry, social services, and basic wage-goods production — arguing that heavy industry should be a tool of development, not an end in itself. The second half reproduces a summary of FULLMANGAL (Five per cent Upper Linear Limit on Money's Annual Growth rate As per Law), a scheme submitted to the Prime Minister in April 1977 by Prof. C. N. Vakil and Prof. P. R. Brahmananda of Bombay University. Building on the earlier SEMIBOMBLA memorandum that 140 economists had submitted in February 1974 — and which the authors credit for the fall in prices witnessed from September 1974 — FULLMANGAL proposes a monetarist anti-inflation programme of 22 specific measures. Its centrepiece is a constitutional amendment placing a 5 percent annual ceiling on money supply growth, combined with a 5 percent reduction in money stock in 1977–78, a target WPI reduction of 10 percent over two financial years from the March 1977 level of 182, a budgetary surplus of Rs. 750 crores, a 5 percent across-the-board cut in government disbursements, a reduction of subsidies by 50 percent, and a comprehensive 8-point interest-rate reform. ## Key points - A Forum of Free Enterprise compilation pamphlet, June 1977, presenting extracts from two documents released in April 1977 at a moment of post-Emergency political transition. - People's Plan II (Indian Renaissance Institute, inspired by M. N. Roy's tradition) sets four planning objectives: primary needs satisfaction, employment through productive involvement, distributive justice, and elimination of poverty in the bottom 40 percent. - Rejects Nehruvian heavy-industry-first orthodoxy: argues industrialisation is a tool not an end, and that investment priorities should flow from the requirements of primary needs, agriculture, small industry, and social services. - Calls for minimum necessary controls only — foreign exchange, rationing/distribution of basic wage goods, and luxury consumption restrictions — scrapping the rest as counterproductive. - Advocates decentralised indicative planning with managerial autonomy, productivity orientation, and parallel treatment of public and private sector enterprises in credit and contract allocation. - FULLMANGAL (Vakil and Brahmananda, April 1977) proposes a constitutional amendment capping money supply growth at 5 percent per annum as the centrepiece of a 22-measure anti-inflation programme. - Near-term FULLMANGAL targets: WPI to fall 10 percent from the index level of 182 over two years; money stock to contract 5 percent in 1977–78; budgetary surplus of Rs. 750 crores; 5 percent across-the-board cut in government disbursements; subsidies reduced by 50 percent. - Precedent cited: the 1974 SEMIBOMBLA memorandum signed by 140 economists was credited with the fall in prices from September 1974 over the subsequent 18 months, establishing the authors' credibility for this follow-on scheme. --- ## [Primary work] FROM THE INDUSTRIAL AGE TO THE INFORMATION AGE URL: https://indianliberals.in/primary-works/from-the-industrial-age-to-the-information-age-by-bardley-d-belt/ ### Summary First published in The Washington Quarterly (Summer 1996 issue) and reproduced as a Forum of Free Enterprise pamphlet (published November–December 1996) with the sponsorship of the Economics Research Centre founded by the late Prof. B. R. Shenoy, Bradley D. Belt's essay makes the case that the U.S. securities regulatory framework — erected in the shadow of the Great Depression and administered by the SEC for more than 60 years — is fundamentally obsolete and, unless substantially revised, will impair the competitive position of American capital markets in a globalised, technology-driven world. Belt wrote from his position as Director of Capital Markets at the Centre for Strategic and International Studies (CSIS) in Washington, DC, having previously served as Counsel to the SEC and the Senate Banking Committee. Belt begins with a historical contrast: when Congress enacted the Securities Act of 1933 and the Exchange Act of 1934 in the wake of the Pecora hearings' revelations of large-scale fraud, the NYSE had a total equity capitalisation of just $16 billion, listed some 800 companies, and traded roughly one million shares a day — a volume now executed every minute. The regulatory framework that emerged from that era, though remarkably resilient, was designed for self-contained national markets in an industrial age. Four forces have since fundamentally transformed the landscape: internationalisation (U.S. equities traded by foreign investors grew from $125 billion in 1984 to $700 billion in 1994; foreign equities traded by U.S. investors rose from $30 billion to $815 billion, nearly 40 percent per year); institutionalisation (institutions now hold nearly half of all U.S. equities and account for three-quarters of listed exchange trading volume); product innovation (notional value of derivatives markets grew from just over $1 trillion in 1986 to more than $20 trillion in 1994); and technological advance (transactions worth trillions of dollars now occur electronically and instantaneously). Belt then identifies five constraints that will erode the SEC's capacity to provide meaningful oversight: the sheer power of global capital flows (foreign exchange trading exceeds $1.3 trillion per day); regulatory arbitrage by market participants; resource constraints (the SEC's entire annual budget of $300 million equals roughly one day's cross-border securities trading); competence gaps as private firms recruit world-class technologists at salaries the government cannot match; and the inherent temporal lag of bureaucratic rulemaking versus market-speed adaptation. He concludes with six design principles for a twenty-first-century regulatory framework: regulation must facilitate rather than impede capital formation; balance competing goals; demonstrate that benefits exceed costs; be integrated and integrative (including potentially merging the SEC and CFTC, harmonising international standards, and considering a supranational regulatory framework); provide clarity and certainty; and be based on performance standards rather than command-and-control edicts. ### Body ## Summary First published in The Washington Quarterly (Summer 1996 issue) and reproduced as a Forum of Free Enterprise pamphlet (published November–December 1996) with the sponsorship of the Economics Research Centre founded by the late Prof. B. R. Shenoy, Bradley D. Belt's essay makes the case that the U.S. securities regulatory framework — erected in the shadow of the Great Depression and administered by the SEC for more than 60 years — is fundamentally obsolete and, unless substantially revised, will impair the competitive position of American capital markets in a globalised, technology-driven world. Belt wrote from his position as Director of Capital Markets at the Centre for Strategic and International Studies (CSIS) in Washington, DC, having previously served as Counsel to the SEC and the Senate Banking Committee. Belt begins with a historical contrast: when Congress enacted the Securities Act of 1933 and the Exchange Act of 1934 in the wake of the Pecora hearings' revelations of large-scale fraud, the NYSE had a total equity capitalisation of just $16 billion, listed some 800 companies, and traded roughly one million shares a day — a volume now executed every minute. The regulatory framework that emerged from that era, though remarkably resilient, was designed for self-contained national markets in an industrial age. Four forces have since fundamentally transformed the landscape: internationalisation (U.S. equities traded by foreign investors grew from $125 billion in 1984 to $700 billion in 1994; foreign equities traded by U.S. investors rose from $30 billion to $815 billion, nearly 40 percent per year); institutionalisation (institutions now hold nearly half of all U.S. equities and account for three-quarters of listed exchange trading volume); product innovation (notional value of derivatives markets grew from just over $1 trillion in 1986 to more than $20 trillion in 1994); and technological advance (transactions worth trillions of dollars now occur electronically and instantaneously). Belt then identifies five constraints that will erode the SEC's capacity to provide meaningful oversight: the sheer power of global capital flows (foreign exchange trading exceeds $1.3 trillion per day); regulatory arbitrage by market participants; resource constraints (the SEC's entire annual budget of $300 million equals roughly one day's cross-border securities trading); competence gaps as private firms recruit world-class technologists at salaries the government cannot match; and the inherent temporal lag of bureaucratic rulemaking versus market-speed adaptation. He concludes with six design principles for a twenty-first-century regulatory framework: regulation must facilitate rather than impede capital formation; balance competing goals; demonstrate that benefits exceed costs; be integrated and integrative (including potentially merging the SEC and CFTC, harmonising international standards, and considering a supranational regulatory framework); provide clarity and certainty; and be based on performance standards rather than command-and-control edicts. ## Key points - Reproduced from The Washington Quarterly, Summer 1996; published as a Forum of Free Enterprise / Economics Research Centre pamphlet in November–December 1996. Author is Director of Capital Markets, CSIS, Washington, DC, and former SEC and Senate Banking Committee Counsel. - Central argument: U.S. securities regulation, unchanged in structure for more than 60 years since the Depression era, is dangerously obsolete and risks ceding competitive advantage to less regulated global markets. - Four transformative forces since 1934: internationalisation (foreign equities traded by U.S. investors rose ~40 percent per year to $815 billion by 1994), institutionalisation (institutions now hold ~50 percent of U.S. equities and 75 percent of exchange trading volume), product innovation (derivatives notional value grew from $1 trillion in 1986 to $20 trillion in 1994), and technological advance. - Historical baseline: NYSE market cap was $16 billion in 1930 with ~800 listed companies and 1 million shares traded per day — roughly what is now traded every minute. - Five constraints on future SEC oversight: power of global capital ($1.3 trillion/day in foreign exchange); regulatory arbitrage; resource mismatch (SEC annual budget ~$300 million vs. $1 trillion+ in daily cross-border trading); competence gap in recruiting technology talent; and temporal lag of regulatory decision cycles. - London already leads the NYSE in international listings: 464 foreign issuers with $3 trillion market cap versus fewer than 300 foreign issuers and $200 billion on the NYSE — illustrating the competitive threat. - Six design principles for a 21st-century framework: facilitate capital formation; balance competing goals; ensure benefits exceed costs; integrate domestic and international regulatory structures (possibly merging SEC and CFTC and creating a supranational framework); provide regulatory clarity; and adopt performance standards over command-and-control rules. - Published for an Indian audience under the Forum of Free Enterprise imprint, making it a case study in how globalisation arguments about securities market deregulation were disseminated within India's liberal-market intellectual tradition. --- ## [Primary work] FUNDAMENTAL CHANGES NEEDED IN ECONOMIC POLICY URL: https://indianliberals.in/primary-works/fundamental-changes-needed-in-economic-policy-m-h-mody-september-13-1980/ ### Summary Delivered as the keynote address at the Diamond Jubilee Symposium of the Associated Chambers of Commerce and Industry in New Delhi on 20 July 1980, and published by the Forum of Free Enterprise in September 1980, M. H. Mody's address opens with a bleak statistical reckoning. Three decades of planned development had yielded an average GNP growth rate of under 3 per cent annually, and a per capita income growth of just 0.6 per cent during the 1970s — placing India near the bottom of the World Bank's league table, behind Bangladesh and Pakistan. Industrial output barely grew 50 per cent over the decade while Korea's expanded by over 400 per cent; the rupee lost 60 per cent of its value; and in 1979–80, national income fell by 3 per cent, agricultural output by 10 per cent, and inflation surpassed 20 per cent. Against this backdrop, India remained among the world's sixteen poorest nations by per capita income at roughly $150. Mody's argument proceeds in two registers — short-run and long-run. In the immediate term he urges 'consolidation for growth': mobilising the Rs. 3,000–4,000 crores of production left unrealised in 1979–80 due to coal, power and transport bottlenecks, and appointing small task forces with overriding powers to cut through the licensing maze. He reserves particular scorn for the state sector, which had absorbed over Rs. 14,000 crores of investment yet delivered neither production nor profitability — a 'puny dwarf' atop the commanding heights. His remedy is not renationalisation but managerial liberation: allow the publicly-financed (private) sector to manage selected public undertakings on an experimental basis, especially in power generation and coal. For the longer run, Mody calls for a 7–8 per cent GNP growth target sustained by a 35 per cent investment rate, a declining capital-output ratio (from over 5 back toward 3), aggressive use of India's 20 per cent savings rate and international borrowing capacity, and turn-key imports of fertiliser, steel and telecommunications plant. He also addresses labour relations — 44 million man-days lost to strikes in 1979 — arguing for worker participation and a property right in jobs as the price of industrial truce. He closes with a warning that without the political will to abandon 'the left luggage of the socialists of the last generation,' none of these reforms will materialise. ### Body ## Summary Delivered as the keynote address at the Diamond Jubilee Symposium of the Associated Chambers of Commerce and Industry in New Delhi on 20 July 1980, and published by the Forum of Free Enterprise in September 1980, M. H. Mody's address opens with a bleak statistical reckoning. Three decades of planned development had yielded an average GNP growth rate of under 3 per cent annually, and a per capita income growth of just 0.6 per cent during the 1970s — placing India near the bottom of the World Bank's league table, behind Bangladesh and Pakistan. Industrial output barely grew 50 per cent over the decade while Korea's expanded by over 400 per cent; the rupee lost 60 per cent of its value; and in 1979–80, national income fell by 3 per cent, agricultural output by 10 per cent, and inflation surpassed 20 per cent. Against this backdrop, India remained among the world's sixteen poorest nations by per capita income at roughly $150. Mody's argument proceeds in two registers — short-run and long-run. In the immediate term he urges 'consolidation for growth': mobilising the Rs. 3,000–4,000 crores of production left unrealised in 1979–80 due to coal, power and transport bottlenecks, and appointing small task forces with overriding powers to cut through the licensing maze. He reserves particular scorn for the state sector, which had absorbed over Rs. 14,000 crores of investment yet delivered neither production nor profitability — a 'puny dwarf' atop the commanding heights. His remedy is not renationalisation but managerial liberation: allow the publicly-financed (private) sector to manage selected public undertakings on an experimental basis, especially in power generation and coal. For the longer run, Mody calls for a 7–8 per cent GNP growth target sustained by a 35 per cent investment rate, a declining capital-output ratio (from over 5 back toward 3), aggressive use of India's 20 per cent savings rate and international borrowing capacity, and turn-key imports of fertiliser, steel and telecommunications plant. He also addresses labour relations — 44 million man-days lost to strikes in 1979 — arguing for worker participation and a property right in jobs as the price of industrial truce. He closes with a warning that without the political will to abandon 'the left luggage of the socialists of the last generation,' none of these reforms will materialise. ## Key points - India's GNP grew at only 2.8 per cent annually during 1970–77, placing it near the bottom of World Bank rankings, with per capita income rising just 0.6 per cent per year over the decade. - In 1979–80, national income fell 3 per cent, agricultural output fell 10 per cent, and inflation crossed 20 per cent — one of the worst combined contractions since independence. - At least Rs. 3,000–4,000 crores of additional production was lost in 1979–80 due to coal, power and transport bottlenecks, which Mody treats as a management failure correctable by task forces with overriding executive powers. - The state sector, with over Rs. 14,000 crores of cumulative investment, had failed on both production and profitability grounds; Mody proposes allowing private firms to manage selected public undertakings on an experimental basis. - A 7–8 per cent long-run growth rate would require roughly 35 per cent investment; Mody argues this is achievable by combining India's ~20 per cent savings rate with international borrowing and turn-key plant imports. - The capital-output ratio deteriorated from roughly 3 at the start of planning to over 5 by 1980; returns on fixed capital investment fell from 46 paise per rupee in 1963–64 to an estimated 16 paise by the late 1970s. - 44 million man-days were lost to strikes and lockouts in 1979; Mody advocates worker participation in management and a 'property right in jobs' to secure industrial peace. - Population growth of 2.2 per cent annually through the 1970s nullified much of the economy's modest gains; Mody identifies population control as the single most crucial precondition for development. --- ## [Primary work] Fundamental Right to Property URL: https://indianliberals.in/primary-works/fundamental-right-to-propety-v-m-tarkunde-may-10-1971/ ### Summary V. M. Tarkunde, a former judge of the Bombay High Court, argues that the right to property was rightly placed among the fundamental rights by the Constitution-makers, even though successive amendments have made it the weakest of those rights. Reprinted from the March 1971 issue of The Radical Humanist as a Forum of Free Enterprise booklet, the editorial pushes back on Justice Hidayatullah's view in the Golaknath case that including property among fundamental rights was an 'error'. Tarkunde reasons that the enjoyment of every other fundamental right — food, shelter, freedom of movement, the freedom to practise a profession — presupposes a minimum of private property, so property must be regarded as a necessary complement of rights that are 'unquestionably fundamental'. The bulk of the essay is a close survey of the constitutional erosion of property rights: the original guarantees in Articles 19(1)(f) and 31(2); the limits introduced by the First Amendment in Article 19(5) and 19(6); the Fourth Amendment's reach over compensation and over trade or business; and Articles 31A and 31B with the Ninth Schedule, which now shields a large body of acts and regulations — particularly on a… ### Body ## Summary V. M. Tarkunde, a former judge of the Bombay High Court, argues that the right to property was rightly placed among the fundamental rights by the Constitution-makers, even though successive amendments have made it the weakest of those rights. Reprinted from the March 1971 issue of The Radical Humanist as a Forum of Free Enterprise booklet, the editorial pushes back on Justice Hidayatullah's view in the Golaknath case that including property among fundamental rights was an 'error'. Tarkunde reasons that the enjoyment of every other fundamental right — food, shelter, freedom of movement, the freedom to practise a profession — presupposes a minimum of private property, so property must be regarded as a necessary complement of rights that are 'unquestionably fundamental'. The bulk of the essay is a close survey of the constitutional erosion of property rights: the original guarantees in Articles 19(1)(f) and 31(2); the limits introduced by the First Amendment in Article 19(5) and 19(6); the Fourth Amendment's reach over compensation and over trade or business; and Articles 31A and 31B with the Ninth Schedule, which now shields a large body of acts and regulations — particularly on agricultural and forest lands and on industrial takeovers — from review on fundamental-rights grounds. Tarkunde concedes that the state may legitimately regulate property, fix prices, manage rents and modify shareholder rights, and even acquire urban properties and inefficiently run undertakings. But he draws a hard line against confiscation: lawfully acquired property and efficiently run concerns cannot, in his view, be taken over without fair compensation if the private sector is to function in a mixed economy. To the social-justice case for further dilution, he answers that confiscation is the wrong instrument for reducing economic disparities. Once inflation and import licensing are addressed, residual inequality is better attacked through estate duty, wealth tax, excise on luxury, progressive income tax — and above all through a policy of full employment, citing a comparison in which the wage ratio between unskilled and managerial labour is about 1 to 2.5 in the United States but about 1 to 11 in Bombay. Tarkunde closes by reaffirming the journal's standing position that no further abridgement of any fundamental right should be attempted unless a concrete case shows that the right obstructs socially beneficial legislation, since fundamental rights are 'the main guarantee for the preservation of freedom and democracy' in India. The booklet is rounded out with framing quotations from Eugene Black, F. A. Hayek's The Road to Serfdom, Max Eastman on Marx, and A. D. Shroff. ## Key points - Disputes Justice Hidayatullah's Golaknath dictum that placing the right of property among fundamental rights was a Constitution-making 'error', while accepting his observation that property is the weakest of those rights. - Defends property as a fundamental right on the ground that enjoyment of other admittedly fundamental rights — food, clothing, shelter, freedom of movement, freedom to practise a profession — presupposes some private property. - Traces the constitutional erosion of property rights through Articles 19(1)(f) and 31(2), the First Amendment's 'reasonable restrictions' clauses, the Fourth Amendment, and Articles 31A, 31B and the Ninth Schedule. - Distinguishes legitimate state action (regulation, rent control, price control, taxation, acquisition with compensation of urban property and of inefficiently run concerns) from confiscation of lawfully acquired or efficiently run property, which he opposes. - Argues that further constitutional amendments waiving fair compensation are neither necessary for social justice nor effective in reducing economic disparities. - Proposes redistribution through estate duty, wealth tax, excise on luxury goods and progressive income tax, with full employment as the most effective remedy, citing a US/Bombay wage-ratio comparison of roughly 1:2.5 against 1:11. - Notes that the second Bank Nationalisation Act was not even challenged in court, and argues the rulers' privy-purse rights should have been abolished by negotiation rather than executive fiat. - Concludes that fundamental rights are the main guarantee of freedom and democracy and should not be tinkered with absent a compelling, concrete necessity. --- ## [Primary work] Fundamental Rights in India URL: https://indianliberals.in/primary-works/fundamental-rights-b-shiva-rao-october-9-1969/ ### Summary Published by the Forum of Free Enterprise in Bombay and drawing on two articles — B. Shiva Rao's historical survey reproduced from the Times of India of 17 December 1968, and Dr. M. V. Pylee's constitutional analysis reproduced from Quest (July–September 1969) — this pamphlet intervenes in the controversy surrounding Nath Pai's private member's Bill, which sought to restore Parliament's power to amend the Fundamental Rights chapter of the Constitution following the Supreme Court's landmark ruling in Golak Nath v. State of Punjab (February 1967). Shiva Rao's contribution traces the Indian demand for constitutionally guaranteed rights from the Swaraj Bill of 1895 (inspired by Tilak) through Mrs. Besant's Commonwealth of India Bill, the Nehru Committee Report of 1928, the Round Table Conferences, Sir Tej Bahadur Sapru's Non-Party Committee of 1944–45, and the Cabinet Mission Plan of 1946. He shows that the demand was unanimous across Congress, the Liberals, religious minorities and constitutional lawyers — rejected only by the British-imposed Government of India Act, 1935. The Constituent Assembly, chaired by Sardar Patel for the rights sub-committee and with Dr. Ambedkar heading the Drafting Committee, embedded not just rights but remedies (Article 32), with Ambedkar calling Article 32 'the very heart' of the Constitution. Dr. Pylee's essay explains the Golak Nath decision (six judges against five, presided over by Chief Justice Subba Rao) and dissects Nath Pai's Bill. The Bill purported to re-establish parliamentary supremacy, but Pylee argues this conflates popular sovereignty with parliamentary sovereignty — a category error drawn from British constitutional history inapplicable to India's written, federal, judicially reviewable constitution. He warns that if Parliament could amend Article 368 by simple majority to remove the two-thirds threshold, the Constitution would be at the mercy of ephemeral majorities. The pamphlet concludes that Fundamental Rights and Directive Principles of State Policy (Parts III and IV) form an integrated, elastic scheme sufficient to accommodate social reform without dismantling individual and minority protections. ### Body ## Summary Published by the Forum of Free Enterprise in Bombay and drawing on two articles — B. Shiva Rao's historical survey reproduced from the Times of India of 17 December 1968, and Dr. M. V. Pylee's constitutional analysis reproduced from Quest (July–September 1969) — this pamphlet intervenes in the controversy surrounding Nath Pai's private member's Bill, which sought to restore Parliament's power to amend the Fundamental Rights chapter of the Constitution following the Supreme Court's landmark ruling in Golak Nath v. State of Punjab (February 1967). Shiva Rao's contribution traces the Indian demand for constitutionally guaranteed rights from the Swaraj Bill of 1895 (inspired by Tilak) through Mrs. Besant's Commonwealth of India Bill, the Nehru Committee Report of 1928, the Round Table Conferences, Sir Tej Bahadur Sapru's Non-Party Committee of 1944–45, and the Cabinet Mission Plan of 1946. He shows that the demand was unanimous across Congress, the Liberals, religious minorities and constitutional lawyers — rejected only by the British-imposed Government of India Act, 1935. The Constituent Assembly, chaired by Sardar Patel for the rights sub-committee and with Dr. Ambedkar heading the Drafting Committee, embedded not just rights but remedies (Article 32), with Ambedkar calling Article 32 'the very heart' of the Constitution. Dr. Pylee's essay explains the Golak Nath decision (six judges against five, presided over by Chief Justice Subba Rao) and dissects Nath Pai's Bill. The Bill purported to re-establish parliamentary supremacy, but Pylee argues this conflates popular sovereignty with parliamentary sovereignty — a category error drawn from British constitutional history inapplicable to India's written, federal, judicially reviewable constitution. He warns that if Parliament could amend Article 368 by simple majority to remove the two-thirds threshold, the Constitution would be at the mercy of ephemeral majorities. The pamphlet concludes that Fundamental Rights and Directive Principles of State Policy (Parts III and IV) form an integrated, elastic scheme sufficient to accommodate social reform without dismantling individual and minority protections. ## Key points - The demand for constitutionally entrenched fundamental rights in India dates to the Swaraj Bill of 1895 and runs through the Nehru Committee (1928), the Round Table Conferences, and the Cabinet Mission Plan (1946), rejected at every stage by the British Government. - The Golak Nath case (1967) was decided six to five by all eleven Supreme Court judges sitting as a Constitution Bench; the majority held that Fundamental Rights in Part III are outside the amending power of Parliament under Article 368. - Dr. Ambedkar identified Article 32 — the right to approach the Supreme Court directly for enforcement of Fundamental Rights — as 'the very heart' of the Constitution, and argued that rights without remedies are meaningless. - Nath Pai's Bill sought to restore Parliament's power to amend Fundamental Rights and require ratification by more than half the states; its proponents framed it as asserting popular sovereignty against judicial overreach. - Pylee distinguishes popular sovereignty from parliamentary sovereignty: India's written, federal constitution constrains Parliament's legislative field, and the Supreme Court's power to invalidate Parliament's laws is incompatible with any doctrine of parliamentary supremacy. - The exclusion of 'due process of law' (borrowed from the US) in favour of 'procedure established by law' — on Justice Frankfurter's advice — was itself contested; Muslim members feared it would strip courts of the power to review the merits of legislation. - Fundamental Rights in the Constitution are not absolute; each carries enumerated limitations allowing the state to impose reasonable restrictions in the public interest, making radical social legislation compatible with rights protection. - Chief Justice Subba Rao warned that an all-comprehensive amending power cannot prevent revolution, but a restrictive amending power gives stability and guards against totalitarian or dictatorial capture of the constitutional order. --- ## [Primary work] G 20 and India URL: https://indianliberals.in/primary-works/g20-and-india-dr-d-subbarao-november-3-2012/ ### Summary Delivered as the 46th A. D. Shroff Memorial Lecture in Mumbai on 20 November 2012 under the auspices of the Forum of Free Enterprise, this address by Dr. D. Subbarao — then Governor of the Reserve Bank of India — offers a comprehensive account of the G20's origins, architecture, agenda and future challenges from the standpoint of a central banker who had participated directly in its deliberations. The lecture was published as a pamphlet and sponsored by New India Assurance Co. Ltd. Subbarao opens by honouring A. D. Shroff himself, noting the irony that this 'perceived Congress Economist' became one of the most trenchant critics of Congress economic policy, and that the liberalisation Shroff advocated from 1956 onwards did not fully arrive until the 1990s — a quarter-century after his death. Subbarao traces the G20's genesis not to the 2008 global financial crisis but to the Asian crisis of 1997, explaining how it evolved from a Finance Ministers' forum into a Leaders' forum at the London Summit of April 2009 — which he identifies as the clear turning point where coordinated fiscal stimulus, monetary accommodation, deposit guarantees and currency swaps halted the crisis spiral. He then works through the major items on the post-crisis G20 agenda. On global imbalances, he argues that the root cause was a 'consumption binge' in advanced economies matched by a 'savings glut' in emerging market economies (EMEs), and that correction requires symmetric adjustment — deficit economies saving more, surplus economies spending more — even though the incentives are asymmetric. He is precise about China's exchange rate: the yuan appreciated 20–35 per cent against major currencies between 2005 and 2012, yet remained widely considered undervalued. On the global reserve currency, Subbarao explains the Triffin paradox — the US, as issuer of the reserve currency, runs persistent deficits and enjoys 'exorbitant privilege' while creating the very imbalances that destabilise the system. He reviews four reform options (multiple reserve currencies, SDR development, SDR basket expansion, and multilateral credit lines) and concludes that none fully resolves the problem; India's position is that the number of reserve currencies should increase organically. On financial sector reform, he commends the Basel III framework while warning against regulatory arbitrage, the risk of emerging market deleveraging, and the neglect of redirecting savings from volatile financial assets into real-economy infrastructure investment. He concludes with three future challenges for the G20: balancing short-term fiscal compulsions against medium-term sustainability; holding sovereigns accountable to commitments without a legal enforcement mechanism; and coordinating domestic policy actions in a world where economic integration has outrun political integration. ### Body ## Summary Delivered as the 46th A. D. Shroff Memorial Lecture in Mumbai on 20 November 2012 under the auspices of the Forum of Free Enterprise, this address by Dr. D. Subbarao — then Governor of the Reserve Bank of India — offers a comprehensive account of the G20's origins, architecture, agenda and future challenges from the standpoint of a central banker who had participated directly in its deliberations. The lecture was published as a pamphlet and sponsored by New India Assurance Co. Ltd. Subbarao opens by honouring A. D. Shroff himself, noting the irony that this 'perceived Congress Economist' became one of the most trenchant critics of Congress economic policy, and that the liberalisation Shroff advocated from 1956 onwards did not fully arrive until the 1990s — a quarter-century after his death. Subbarao traces the G20's genesis not to the 2008 global financial crisis but to the Asian crisis of 1997, explaining how it evolved from a Finance Ministers' forum into a Leaders' forum at the London Summit of April 2009 — which he identifies as the clear turning point where coordinated fiscal stimulus, monetary accommodation, deposit guarantees and currency swaps halted the crisis spiral. He then works through the major items on the post-crisis G20 agenda. On global imbalances, he argues that the root cause was a 'consumption binge' in advanced economies matched by a 'savings glut' in emerging market economies (EMEs), and that correction requires symmetric adjustment — deficit economies saving more, surplus economies spending more — even though the incentives are asymmetric. He is precise about China's exchange rate: the yuan appreciated 20–35 per cent against major currencies between 2005 and 2012, yet remained widely considered undervalued. On the global reserve currency, Subbarao explains the Triffin paradox — the US, as issuer of the reserve currency, runs persistent deficits and enjoys 'exorbitant privilege' while creating the very imbalances that destabilise the system. He reviews four reform options (multiple reserve currencies, SDR development, SDR basket expansion, and multilateral credit lines) and concludes that none fully resolves the problem; India's position is that the number of reserve currencies should increase organically. On financial sector reform, he commends the Basel III framework while warning against regulatory arbitrage, the risk of emerging market deleveraging, and the neglect of redirecting savings from volatile financial assets into real-economy infrastructure investment. He concludes with three future challenges for the G20: balancing short-term fiscal compulsions against medium-term sustainability; holding sovereigns accountable to commitments without a legal enforcement mechanism; and coordinating domestic policy actions in a world where economic integration has outrun political integration. ## Key points - The G20 was formed in 1997 in response to the Asian financial crisis, not 2008; it was elevated from a Finance Ministers' forum to a Leaders' forum at the London Summit in April 2009, which Subbarao identifies as the decisive turning point in managing the global financial crisis. - The G20's 19 member countries plus the EU represent 90 per cent of global GDP, 80 per cent of global trade and two-thirds of the global population; its decisions are not legally binding and it has no formal mandate for global governance. - Global imbalances — a 'consumption binge' in advanced economies and a 'savings glut' in EMEs — are identified as a root cause of the 2008 crisis; symmetric correction requires deficit economies to save more and surplus economies to consume more, but incentives are asymmetric. - China's real effective exchange rate appreciated 20–35 per cent against major currencies between 2005 and 2012, yet pressure for further appreciation persisted; oil-producing countries had by 2012 overtaken China as the largest contributors to global current account surpluses. - The Triffin paradox is central to Subbarao's analysis: the US runs persistent fiscal and external deficits as the price of issuing the reserve currency, enjoying 'exorbitant privilege' while generating the global imbalances that threaten financial stability; paradoxically the dollar strengthened during the crisis as a flight-to-safety asset even as the US economy contracted. - India's exchange rate policy is described as 'festina lente' (make haste slowly) — largely market-driven, with intervention only to manage volatility; India co-chaired the G20 Framework and Mutual Assessment Process (MAP) Working Group alongside Canada. - Financial sector reform rests on four pillars — regulation, supervision, resolution (especially for systemically important financial institutions), and implementation assessment; Subbarao warns that tighter Basel III standards must not inadvertently disadvantage emerging market financial intermediaries or trigger deleveraging out of EMEs. - The three forward challenges for the G20 are: (i) harmonising short-term fiscal stimulus with medium-term consolidation; (ii) holding member governments accountable to non-binding commitments in the absence of an enforcement mechanism; and (iii) achieving policy coordination in a world where economic integration has moved far ahead of political integration. --- ## [Primary work] The Role of General Insurance After Nationalisation URL: https://indianliberals.in/primary-works/general-insurance-after-nationalisation-me-g-v-kapadia-april-29-1979/ ### Summary Delivered as the A. D. Shroff Memorial Trust's annual public lecture in Bombay on 14 February 1979 and published the same year, G. V. Kapadia's address provides an authoritative insider's account of general insurance in India seven years after nationalisation. Kapadia, then Chairman of the General Insurance Corporation of India (GIC), opens with an extended tribute to A. D. Shroff's role in building New India Assurance Co. from 1946 until his death in 1965 — growing its share of new life insurance from 9.5 per cent (1950) to 19.1 per cent (1955), and of general insurance premium income from 7 per cent (1955) to 17 per cent (1971). He also credits Shroff with founding the India Reinsurance Corporation in 1956 and, through the Shroff Committee (1953), providing the intellectual foundations for ICICI, IDBI and UTI. Kapadia then surveys the industry's post-nationalisation performance with considerable candour. The Government took over 107 companies and merged them into four competing subsidiaries — National Insurance, New India, Oriental, and United India — under the GIC holding company. Premium income grew from Rs. 147.5 crores in 1971 to over Rs. 340 crores in 1978, a growth of 130 per cent, achieved without increases in premium rates despite rising claims and costs. The GIC paid dividends of 25 per cent on equity capital to the Government for 1976 and 1977, up from 12 per cent in 1974. Total investible funds reached over Rs. 615 crores by end-1977, deployed across government securities (31 per cent), corporate debentures and shares (32 per cent), bank deposits (31 per cent), and housing loans (6 per cent). The lecture's more forward-looking sections address the two major unmet challenges: rural penetration and risk management culture. India's per capita general insurance premium stands at Rs. 5.2, against Rs. 2,600 in the USA and Rs. 800 in the UK; general insurance premiums represent just 0.4 per cent of GNP versus 4.6 per cent in the USA. Kapadia argues that the rural sector — which contributes half of national income and supports three-quarters of the population — has been almost entirely overlooked. Cattle insurance, Janata Personal Accident policies (1.7 million sold in nine months in 1976, though renewal proved difficult), agricultural pumpset insurance and a new crop insurance scheme requiring state government co-participation are described as early forays. He closes by outlining a four-part model of professional service: risk management advice, accurate documentation, loss prevention, and prompt claims settlement. ### Body ## Summary Delivered as the A. D. Shroff Memorial Trust's annual public lecture in Bombay on 14 February 1979 and published the same year, G. V. Kapadia's address provides an authoritative insider's account of general insurance in India seven years after nationalisation. Kapadia, then Chairman of the General Insurance Corporation of India (GIC), opens with an extended tribute to A. D. Shroff's role in building New India Assurance Co. from 1946 until his death in 1965 — growing its share of new life insurance from 9.5 per cent (1950) to 19.1 per cent (1955), and of general insurance premium income from 7 per cent (1955) to 17 per cent (1971). He also credits Shroff with founding the India Reinsurance Corporation in 1956 and, through the Shroff Committee (1953), providing the intellectual foundations for ICICI, IDBI and UTI. Kapadia then surveys the industry's post-nationalisation performance with considerable candour. The Government took over 107 companies and merged them into four competing subsidiaries — National Insurance, New India, Oriental, and United India — under the GIC holding company. Premium income grew from Rs. 147.5 crores in 1971 to over Rs. 340 crores in 1978, a growth of 130 per cent, achieved without increases in premium rates despite rising claims and costs. The GIC paid dividends of 25 per cent on equity capital to the Government for 1976 and 1977, up from 12 per cent in 1974. Total investible funds reached over Rs. 615 crores by end-1977, deployed across government securities (31 per cent), corporate debentures and shares (32 per cent), bank deposits (31 per cent), and housing loans (6 per cent). The lecture's more forward-looking sections address the two major unmet challenges: rural penetration and risk management culture. India's per capita general insurance premium stands at Rs. 5.2, against Rs. 2,600 in the USA and Rs. 800 in the UK; general insurance premiums represent just 0.4 per cent of GNP versus 4.6 per cent in the USA. Kapadia argues that the rural sector — which contributes half of national income and supports three-quarters of the population — has been almost entirely overlooked. Cattle insurance, Janata Personal Accident policies (1.7 million sold in nine months in 1976, though renewal proved difficult), agricultural pumpset insurance and a new crop insurance scheme requiring state government co-participation are described as early forays. He closes by outlining a four-part model of professional service: risk management advice, accurate documentation, loss prevention, and prompt claims settlement. ## Key points - General insurance premium income grew from Rs. 147.5 crores (1971) to over Rs. 340 crores (1978), a 130 per cent increase achieved without any increase in premium rates despite rising claims costs. - The GIC paid dividends of 25 per cent on equity capital to the Government for 1976 and 1977 (up from 12 per cent in 1974), and the gross profit before tax of the four subsidiary companies was approximately Rs. 106 crores in 1977. - India's per capita general insurance premium of Rs. 5.2 compared with Rs. 2,600 in the USA, Rs. 800 in the UK and Rs. 540 in Japan; general insurance premiums were 0.4 per cent of GNP against 4.6 per cent in the USA, indicating enormous unrealised potential. - 107 pre-nationalisation insurers were merged into four competing subsidiaries (National Insurance, New India, Oriental, United India) under the GIC holding company, creating a network of over 870 branch and divisional offices and a workforce exceeding 31,200. - The GIC pioneered loss prevention infrastructure, including the Loss Prevention Association of India (January 1978) and Cargo Loss Minimisation Cells in Bombay, Calcutta and Madras; between August 1977 and October 1978, Bombay's cell supervised 2,000 consignments and traced 11,180 missing packages. - A scheme to screen tramp vessel operators lifting cargo from Bombay port — 234 vessels approved between August 1977 and October 1978 with no subsequent cargo problems — was introduced without legal authority, using premium surcharges as the only lever. - Total investible funds of the GIC and subsidiaries exceeded Rs. 615 crores at end-1977; investment policy was reoriented post-nationalisation toward government securities, housing loans and industrial equity, with growing emphasis on mortgage insurance and secondary mortgage markets. - Rural penetration remained the central unfinished task: cattle insurance covered over one million heads in 1978, Janata Personal Accident policies sold 1.7 million in nine months of 1976 but lapsed at renewal, and a crop insurance scheme requiring state co-participation was under development. --- ## [Primary work] General Insurance and Nationalisation URL: https://indianliberals.in/primary-works/general-insurance-and-nationalisation-j-d-chokshi-october-12-1967/ ### Summary Adapted from a talk delivered under the auspices of the Bombay Insurance Institute in 1967 and published as a Forum of Free Enterprise pamphlet dated 12 October 1967, J. D. Choksi's address — delivered as Chairman of New India Assurance Company — mounts a sustained case against the proposed nationalisation of general insurance at a moment when the Congress Working Committee had just moved a resolution directing the government to explore the measure. The pamphlet is a direct intervention: it names the political process that brought the proposal forward (a thinly attended AICC session), and quotes both the Finance Minister's statement at the time of life insurance nationalisation in 1956 and Deputy Finance Minister B. R. Bhagat's reaffirmation in 1961 that there was no case for nationalising general insurance. Choksi's argument rests on the essential character of the business rather than ideology. General insurance, he contends, is not a credit institution and not a builder of large funds: total investible resources stood at roughly Rs. 72 crores and annual accretions at only Rs. 5 crores — far too small to serve as a justification of mobilising capital for the state. It is instead a highly differentiated service business that must distinguish risk from risk at every hour of the day across multiple jurisdictions. He illustrates this through two registers: the bureaucratic absurdity of government claims-handling (his anecdote of a widow asked to produce a certificate of life for a period before she filed her claim), and the operational realities of real-time risk coverage — a cargo of gold and currency worth Rs. 50 lakhs to a crore covered overnight by a syndicate of insurers at short notice in a manner no government official could replicate. The pamphlet broadens its argument to foreign investment and international business. Roughly Rs. 800 crores of foreign capital was then invested in India, Choksi notes, and foreign collaborators routinely insisted on placing part of project insurance with their home-country insurers. Nationalisation would displace the 40 foreign insurance companies then operating in India and dampen further inflows. Conversely, Indian insurers had established offices or agencies in 40 countries; the lesson of life insurance nationalisation — where LIC was slow to replace the international business that private firms had built — argued against repeating the experiment with general insurance's even more transaction-specific, continuous service requirements. An appendix reprints a letter from former MP Sushama Sen in the Hindustan Times (7 September 1967), offering independent political confirmation that neither the LIC nor the State Bank had fulfilled the promises made at the time of their nationalisation. ### Body ## Summary Adapted from a talk delivered under the auspices of the Bombay Insurance Institute in 1967 and published as a Forum of Free Enterprise pamphlet dated 12 October 1967, J. D. Choksi's address — delivered as Chairman of New India Assurance Company — mounts a sustained case against the proposed nationalisation of general insurance at a moment when the Congress Working Committee had just moved a resolution directing the government to explore the measure. The pamphlet is a direct intervention: it names the political process that brought the proposal forward (a thinly attended AICC session), and quotes both the Finance Minister's statement at the time of life insurance nationalisation in 1956 and Deputy Finance Minister B. R. Bhagat's reaffirmation in 1961 that there was no case for nationalising general insurance. Choksi's argument rests on the essential character of the business rather than ideology. General insurance, he contends, is not a credit institution and not a builder of large funds: total investible resources stood at roughly Rs. 72 crores and annual accretions at only Rs. 5 crores — far too small to serve as a justification of mobilising capital for the state. It is instead a highly differentiated service business that must distinguish risk from risk at every hour of the day across multiple jurisdictions. He illustrates this through two registers: the bureaucratic absurdity of government claims-handling (his anecdote of a widow asked to produce a certificate of life for a period before she filed her claim), and the operational realities of real-time risk coverage — a cargo of gold and currency worth Rs. 50 lakhs to a crore covered overnight by a syndicate of insurers at short notice in a manner no government official could replicate. The pamphlet broadens its argument to foreign investment and international business. Roughly Rs. 800 crores of foreign capital was then invested in India, Choksi notes, and foreign collaborators routinely insisted on placing part of project insurance with their home-country insurers. Nationalisation would displace the 40 foreign insurance companies then operating in India and dampen further inflows. Conversely, Indian insurers had established offices or agencies in 40 countries; the lesson of life insurance nationalisation — where LIC was slow to replace the international business that private firms had built — argued against repeating the experiment with general insurance's even more transaction-specific, continuous service requirements. An appendix reprints a letter from former MP Sushama Sen in the Hindustan Times (7 September 1967), offering independent political confirmation that neither the LIC nor the State Bank had fulfilled the promises made at the time of their nationalisation. ## Key points - Both the Finance Minister (1956) and Deputy Finance Minister B. R. Bhagat (1961) had previously stated there was no case for nationalising general insurance; the 1967 Congress Working Committee resolution emerged from a thinly attended AICC session and was backed by no published public reasoning. - General insurance held total investible resources of only ~Rs. 72 crores with annual accretions of ~Rs. 5 crores, making the fund-mobilisation rationale for nationalisation inapplicable — unlike banking or life insurance, it is a service business, not a capital accumulator. - The business operates across an estimated 2.5 million individual policies per year in India with approximately 250,000 claims, many requiring real-time or overnight settlement; Choksi argues a government bureaucracy applying uniform rules cannot handle the risk-by-risk differentiation this demands. - Roughly Rs. 800 crores of foreign capital was invested in India, with foreign collaborators frequently requiring that part of project insurance be placed with their home-country insurers; nationalisation would displace the 40 foreign insurance companies in India and act as a deterrent to future investment. - Indian general insurers had established offices or agencies in 40 countries; the failure of LIC to promptly replace the foreign business previously conducted by nationalised life insurance companies served as a cautionary precedent for the faster-moving, transaction-specific general insurance market. - The government machine applies uniform rules to all claimants and cannot pioneer new insurance covers for novel or urgent risks; Choksi's central operational objection is that general insurance's value lies precisely in its ability to discriminate between risks and respond flexibly at any hour. - Public opinion, including newspaper commentary, had not supported nationalisation; the only justification offered was ideological — that all credit institutions should be state-owned — a premise Choksi contests since general insurance is not a credit institution. - Former MP Sushama Sen (appendix) draws on her experience on the 1956 Lok Sabha Select Committee to argue that neither LIC nor the State Bank fulfilled their nationalisation promises, and questions whether the government's primary duty to provide food, shelter and clothing should precede further institutional experiments. --- ## [Primary work] GENERAL INSURANCE AS A FINANCIAL SERVICE IN THE CONTEXT OF LIBERALISATION URL: https://indianliberals.in/primary-works/general-insurance-as-a-financial-institute-in-the-context-of-liberalisation-s-v-mony-june-24-1992/ ### Summary Delivered as the A. D. Shroff Memorial Trust's 1992 annual lecture on insurance, S. V. Mony — then Chairman of the General Insurance Corporation of India — uses the moment of India's 1991 structural adjustment to argue that liberalisation is the right direction for the country's financial services, but that financial-sector liberalisation must not be confused with deregulation. In the rendered pages he situates the reform turn against the planned-development model, citing the Finance Minister's 1992-93 budget speech and the Statement of Industrial Policy of 24th July 1991 to acknowledge that the public sector's 'commanding heights' role has produced poor productivity, overmanning and a low return on capital, making some public enterprises 'a burden rather than an asset to the government.' Mony then builds the conceptual frame for the rest of the lecture: services as a catalyst of socio-economic development, the rapid rise of services to 41% of India's GDP, and financial services — banking, insurance, leasing, securities, asset management — as the connective tissue of a modern economy.… ### Body # GENERAL INSURANCE AS A FINANCIAL SERVICE IN THE CONTEXT OF LIBERALISATION *By S V MONY* ## Summary Delivered as the A. D. Shroff Memorial Trust's 1992 annual lecture on insurance, S. V. Mony — then Chairman of the General Insurance Corporation of India — uses the moment of India's 1991 structural adjustment to argue that liberalisation is the right direction for the country's financial services, but that financial-sector liberalisation must not be confused with deregulation. In the rendered pages he situates the reform turn against the planned-development model, citing the Finance Minister's 1992-93 budget speech and the Statement of Industrial Policy of 24th July 1991 to acknowledge that the public sector's 'commanding heights' role has produced poor productivity, overmanning and a low return on capital, making some public enterprises 'a burden rather than an asset to the government.' Mony then builds the conceptual frame for the rest of the lecture: services as a catalyst of socio-economic development, the rapid rise of services to 41% of India's GDP, and financial services — banking, insurance, leasing, securities, asset management — as the connective tissue of a modern economy. He defends general insurance specifically as a 'financial service' on two grounds: it closes the production-cycle breach caused by fire, flood or breakdown, and the float between premium and claim makes insurers among the largest institutional investors in any economy. The regulatory portion of the rendered text insists that opening up cross-border insurance and reinsurance trade actually requires stricter, not looser, supervision — citing the Uruguay Round talks, the U.S. Financial Services Group's position statement, and the watchdog functions (solvency, fair trade, probity, domestic-market strengthening) that supervisory authorities must perform. Mony surveys global insurance-market structure (state monopolies in many developing countries, concentration of reinsurance in six countries) before turning to India, where his historical sketch is unsparing about the pre-1973 private market — 'reckless competition in rates and terms, fictitious appointments... lack of safeguards in investments, excessive reinsurance abroad' — while crediting a handful of enlightened firms, notably the 'New India' under A. D. Shroff's chairmanship, with building the discipline that survived nationalisation. The rendered pages end with the social objectives the nationalised industry was directed to pursue under the Five Year Plans — rural cover, crop insurance, social-security-linked products, balanced regional reach, channelling investible funds to socially oriented sectors — and open a section on the post-1972 performance of the four GIC subsidiaries, which continues past the chunk. ## Key points - Frames the 1991-92 reforms as a structural adjustment that began with a balance-of-payments crisis, double-digit inflation, and the Finance Minister's stated need to 'arrest the slide and restore India's credibility' both at home and abroad. - Argues that public-sector enterprises, after the 'initial exuberance' of entering new industrial and technical areas, now show poor productivity, overmanning, weak project management and inadequate R&D — and a very low rate of return on invested capital. - Distinguishes liberalisation in goods from liberalisation in services: in financial services, opening domestic and international competition demands stricter regulation, not deregulation. - Positions services (41% of Indian GDP by the late seventies) as the country's largest sectoral contributor to GDP, with general insurance acting as a financial service through risk transfer, production-cycle restoration, and institutional investment. - Surveys global insurance structure: state monopolies dominate many developing-country markets; the U.S. alone accounted for 46% of world non-life and 30% of life premiums in 1987; six countries concentrate the bulk of world reinsurance premium. - Reviews the pre-1973 Indian private insurance market as plagued by reckless rate-cutting, fictitious appointments, weak investment safeguards, and inadequate capitalisation — with a small group of 'enlightened companies' such as 'New India' under A. D. Shroff as honourable exceptions. - Lays out the five social objectives the nationalised general-insurance industry was directed to pursue under the Five Year Plans: rural cover, crop insurance, social-security-linked products, balanced regional marketing, and channelling investible funds to socially oriented sectors. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] Giving is Receiving URL: https://indianliberals.in/primary-works/giving-is-receiving-mrs-meera-shenoy/ ### Summary Giving is Receiving is the printed text of the 30th Bhogilal Leherchand Memorial Lecture, delivered by Meera Shenoy in Mumbai on 5 December 2018 under the auspices of the Bhogilal Leherchand Foundation, the Forum of Free Enterprise, and the A. D. Shroff Memorial Trust. After an editorial introduction by Sunil S. Bhandare framing Shenoy's work against India's paradox of "jobless growth" and an unmet "demographic dividend," Shenoy uses the lecture to recount how, after a decade of skilling rural youth, she founded Youth4Jobs to train youth with disabilities and link them to formal-sector employment. Shenoy threads the talk with concrete vignettes — parents in villages who first dismissed the idea of jobs for "useless children," companies that initially asked for trainees who "look like you and me," and entrepreneurs such as Arvind (a wheelchair-using CEO) and former Yum India president Niren Choudhary, who hired speech- and hearing-impaired staff at KFC.… ### Body # Giving is Receiving *By Mrs. Meera Shenoy* ## Summary Giving is Receiving is the printed text of the 30th Bhogilal Leherchand Memorial Lecture, delivered by Meera Shenoy in Mumbai on 5 December 2018 under the auspices of the Bhogilal Leherchand Foundation, the Forum of Free Enterprise, and the A. D. Shroff Memorial Trust. After an editorial introduction by Sunil S. Bhandare framing Shenoy's work against India's paradox of "jobless growth" and an unmet "demographic dividend," Shenoy uses the lecture to recount how, after a decade of skilling rural youth, she founded Youth4Jobs to train youth with disabilities and link them to formal-sector employment. Shenoy threads the talk with concrete vignettes — parents in villages who first dismissed the idea of jobs for "useless children," companies that initially asked for trainees who "look like you and me," and entrepreneurs such as Arvind (a wheelchair-using CEO) and former Yum India president Niren Choudhary, who hired speech- and hearing-impaired staff at KFC. She positions her organisation as advocacy-first (touching 2,75,000 households, villages, schools and societies with the slogan "Ability in Disability"), as a builder of a scalable, replicable training template now operating across twenty-five centres from Guwahati to Trichy and as far as Mauritius, and as the originator of "Not Just Art," billed as the world's first portal for disability art. The second half of the lecture moves from individual stories to system design: MoUs with universities, a CII–DFID sensitisation workshop that landed fifty blind interns at a private-sector bank, "Smart Inclusion Centres" as experiential zones for corporate partners, a government girls' blind school where teachers are now requesting JAWS and NVDA screen-readers, and a pilot in Chennai that mainstreamed speech- and hearing-impaired cashiers — a single test, she claims, that unlocked the potential of more than 75,000 jobs. The recurring frame is that compassion routed through markets and structured employability is more dignifying than subsidies and doles, and that "if They can, I can," so too can the reader. ## Key points - The booklet reproduces Meera Shenoy's 30th Bhogilal Leherchand Memorial Lecture (Mumbai, 5 December 2018), jointly hosted by the Bhogilal Leherchand Foundation, the Forum of Free Enterprise, and the A. D. Shroff Memorial Trust. - Editor Sunil S. Bhandare frames Shenoy's work against India's "jobless growth" paradox and reports that Youth4Jobs has trained ~12,500 disabled youth in six years, with 65% placed in the organised sector. - Shenoy invokes Gandhi's choice of Sabarmati as a parable of compassion to explain why Youth4Jobs targets the intersection of poverty and disability rather than poverty alone. - She argues that government subsidies and doles, especially around elections, dampen the incentive to work, and that the harder, more dignifying route is linking disabled youth to organised-sector jobs. - The model is presented as scalable and replicable: 25 centres from Assam to Tamil Nadu, partnerships with ~550 companies (200 of them first-time hirers), and a first global centre in Mauritius. - Shenoy launched "Not Just Art," pitched as the world's first portal for Disability Art, with UNESCO signalling interest in becoming its first partner. - A Chennai pilot placing speech- and hearing-impaired cashiers — chosen by 97% of surveyed consumers over speaking cashiers — is held up as a market-led unlock of an estimated 75,000+ jobs. - Recurring frames include "Ability in Disability," "if They can, I can," and the claim that more educated disabled youth are often less placeable because faculty cannot train them and aspirations outrun technical skill. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] Golden Jubilee (1956-2006) URL: https://indianliberals.in/primary-works/golden-jubilee-1956-2006/ ### Summary This short institutional retrospective, issued by the Forum of Free Enterprise to mark its golden jubilee, narrates the Forum's half-century journey from its 1956 founding to 2006. It locates the organisation's genesis in the "ominous clouds of socialism" of the mid-1950s: the Government's commitment to a state-directed economy, the nationalisations of coal, civil aviation and life insurance, and a propaganda climate that, in the Forum's reading, slandered private enterprise. A.D. Shroff and a circle of businessmen-publicists — Murarji Vaidya, M.A. Master, M.A. Sreenivasan and others — concluded that a centralised command economy was incompatible with a pluralist democracy, and built the Forum as a vehicle of economic education to defend the private sector and stem what they saw as drift toward totalitarianism. The narrative tracks the Forum's institutional milestones: a 1957 Code of Conduct for business; Nani Palkhivala's long presidency (1968–2000) and his crusade against confiscatory taxation through the treatise *The Highest Taxed Nation*; an indictment of the licence-permit regime that, by the booklet's account, held GDP growth to 3.5% and per-capita income growth to 1.3% b… ### Body # Golden Jubilee (1956-2006) ## Summary This short institutional retrospective, issued by the Forum of Free Enterprise to mark its golden jubilee, narrates the Forum's half-century journey from its 1956 founding to 2006. It locates the organisation's genesis in the "ominous clouds of socialism" of the mid-1950s: the Government's commitment to a state-directed economy, the nationalisations of coal, civil aviation and life insurance, and a propaganda climate that, in the Forum's reading, slandered private enterprise. A.D. Shroff and a circle of businessmen-publicists — Murarji Vaidya, M.A. Master, M.A. Sreenivasan and others — concluded that a centralised command economy was incompatible with a pluralist democracy, and built the Forum as a vehicle of economic education to defend the private sector and stem what they saw as drift toward totalitarianism. The narrative tracks the Forum's institutional milestones: a 1957 Code of Conduct for business; Nani Palkhivala's long presidency (1968–2000) and his crusade against confiscatory taxation through the treatise *The Highest Taxed Nation*; an indictment of the licence-permit regime that, by the booklet's account, held GDP growth to 3.5% and per-capita income growth to 1.3% between 1951 and 1980; and credit-claiming for the more equitable tax structure that emerged after 1991. It also chronicles the Forum's cultural footprint — public lectures, booklets, essay and elocution competitions, the A.D. Shroff Memorial Lectures (which hosted Milton Friedman, Peter Bauer and Colin Clark), and the founding of the A.D. Shroff Memorial Trust, the Nani A. Palkhivala Memorial Trust and the M.R. Pai Foundation. The closing pages perform a tribute function: government recognition of Shroff (commemorative stamp, 1999) and Palkhivala (stamp 2004, Padma Vibhushan, honorary doctorates), and the appearance of the Forum and M.R. Pai in the Friedmans' autobiography *Two Lucky People*, alongside George Woods's encomium to Shroff. The piece ends by announcing a website launch in January 2006 and rededicating the Forum to its mission of objectivity and high standards of governance in public life. ## Key points - Frames the Forum's 1956 founding as a direct response to the Nehruvian socialist turn — nationalisation of coal, civil aviation and life insurance, and the official rhetoric against private enterprise. - Identifies A.D. Shroff as the founder-leader and names Murarji Vaidya, M.A. Master and M.A. Sreenivasan as fellow signed-article publicists who built early intellectual momentum. - Asserts the Forum's central political thesis: a centralised command economy and a pluralist democratic polity are incompatible, and one-party dominance without organised opposition risks crossing the line into totalitarianism. - Claims the Forum produced India's first comprehensive business Code of Conduct in 1957, framing self-regulation as part of liberal credibility. - Indicts the licence-permit-tariff regime with a hard datum: average annual GDP growth of 3.5% and per-capita income growth of 1.3% between 1951 and 1980, one-third of what was planned. - Credits Nani Palkhivala (President 1968–2000) and his treatise The Highest Taxed Nation with creating pressure that produced the more equitable post-1991 tax structure. - Catalogues an institutional ecology built around three memorial trusts (Shroff, Palkhivala, Pai), the A.D. Shroff Memorial Lectures (Friedman, Bauer, Clark), and decades of youth-oriented essay competitions and leadership camps. - Closes with state and international recognition — commemorative stamps for Shroff (1999) and Palkhivala (2004), Padma Vibhushan, and the mention of the Forum and M.R. Pai in the Friedmans' Two Lucky People. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] Good Governance in India URL: https://indianliberals.in/primary-works/good-governance-by-minoo-r-shroff-and-hd-shourie-2002/ ### Summary Good Governance in India is a January–March 2002 booklet published by the Forum of Free Enterprise (Mumbai) that pairs two short addresses on the institutional preconditions for good governance — one trained on the voluntary sector, the other on the machinery of the State. Minoo R. Shroff, President of the Forum, writes on the effective governance of NGOs, importing the Nolan Committee's seven principles of public life (selflessness, integrity, objectivity, accountability, openness, honesty, leadership) into a checklist for Indian charitable boards and their chief executives. H. D. Shourie, Director of Common Cause, reproduces a January 14, 2002 circular he addressed to all Chief Ministers and Chief Secretaries, cataloguing seven concrete remedies for State-level administrative malaise: tenure assurance via a Civil Services Board, grievance redressal, accountability via Citizens Charters, transparency and Right to Information, de-bloating of staff, anti-corruption machinery (CVC, CBI, Lokayukta, Benami and money-laundering laws), and modernisation through e-governance.… ### Body # Good Governance in India *By MINOO R. SHROFF, H. D. SHOURIE* ## Summary Good Governance in India is a January–March 2002 booklet published by the Forum of Free Enterprise (Mumbai) that pairs two short addresses on the institutional preconditions for good governance — one trained on the voluntary sector, the other on the machinery of the State. Minoo R. Shroff, President of the Forum, writes on the effective governance of NGOs, importing the Nolan Committee's seven principles of public life (selflessness, integrity, objectivity, accountability, openness, honesty, leadership) into a checklist for Indian charitable boards and their chief executives. H. D. Shourie, Director of Common Cause, reproduces a January 14, 2002 circular he addressed to all Chief Ministers and Chief Secretaries, cataloguing seven concrete remedies for State-level administrative malaise: tenure assurance via a Civil Services Board, grievance redressal, accountability via Citizens Charters, transparency and Right to Information, de-bloating of staff, anti-corruption machinery (CVC, CBI, Lokayukta, Benami and money-laundering laws), and modernisation through e-governance. Both pieces frame Indian state and civil-society failure as a problem of culture-of-office — bribery, opaque transfers, conflict of interest — and converge on the prescription that boards, chairmen, and chief executives must lead by personal example and operate under codified, monitored standards. ## Essays ### Effective Governance of NGOs *By Minoo R. Shroff* Minoo R. Shroff, President of the Forum of Free Enterprise, lays down a governance manual for the Indian NGO sector, treating non-governmental organisations as serious institutions that must be 'run on commercial lines albeit with great accent on social good.' He argues that the Board is the apex custodian of values and must be staffed with high-calibre, ethically clean members who steer clear of conflict of interest; he imports verbatim the seven principles of public life from Britain's Nolan Committee (selflessness, integrity, objectivity, accountability, openness, honesty, leadership) as the template for a 'Charter of Governance.' Shroff insists on Chairman–Chief Executive synergy, fixed terms (not exceeding ten years), a retirement age cap around 75, internal audit, merit-based hiring with zero nepotism, and a five-point checklist for purposeful functioning (vision, road map, organisation, systems, financial plan). The closing reflection concedes that administering NGOs is daunting because expectations outrun resources, yet stresses that voluntary effort matters all the more 'in our country where the delivery and response of public services is so poor.' - NGOs span education, health, charity, environment, arts and public awareness, and must be run on commercial lines with social accent — generating a surplus for renewal. - Boards must be ethically clean, free of conflict of interest, and built around a strong Chairman who acts as the 'Kingpin' and custodian of values. - The seven Nolan principles (selflessness, integrity, objectivity, accountability, openness, honesty, leadership) are explicitly imported as the template for an Indian Charter of Governance. - Term limits (≤10 years) and a 75-year retirement cap are proposed to keep fresh blood flowing into Boards. - Chief Executive must be empowered with clear delegation, backed by internal audit (departmental or via reputed Chartered Accountants), and matched to staff hired strictly on merit — 'nepotism in any shape or form should be scrupulously avoided.' - A five-step checklist — Strategic Vision, Road Map, Effective Organisation, Systems and Procedures, Financial Plan — is offered as the discipline of purposeful functioning. ### Our Governmental System Must Improve *By H. D. Shourie* H. D. Shourie, Director of the citizen-grievance body Common Cause, frames Indian governance as a 'malaise' fifty years after independence: bloated, inefficient, riddled with arbitrary transfers and corruption, and lacking transparency and accountability. The body of the piece reproduces his January 14, 2002 circular letter to every Chief Minister and Chief Secretary in the Union, distilling the recommendations of past Commissions, Committees and the 1997 Chief Ministers' Conference into seven concrete reform demands. These cover (i) tenure assurance via an institutionalised Civil Services Board to insulate officers from politically motivated transfers — citing Uttar Pradesh's six-month average tenure as a scandal; (ii) grievance redressal mechanisms within departments and districts to relieve the Central Administrative Tribunal of its 41,647-case backlog; (iii) accountability through universally published Citizens Charters; (iv) transparency by enacting freedom-of-information laws and gutting the Official Secrets Act; (v) de-bloating of state staffing, citing Orissa's reported diversion of cyclone relief funds to salaries; (vi) anti-corruption enforcement via Vigilance officers, Lokayuktas, CVC/CBI, the Benami Transactions Prohibition Act and pending money-laundering legislation; and (vii) modernisation through e-governance, websites and Total Quality Management. The letter closes with an explicit appeal for time-bound action by each State Government. - Frames the problem as 'general feeling' that India's governmental and administrative machinery generates delays, frustrations and 'resort to bribery and corruption' for routine service delivery. - Proposes a statutory Civil Services Board (Chief Secretary + two Secretaries) in every State to control postings and transfers — directly attacking politically-motivated reshuffles. - Cites concrete data: 3,45,436 cases taken to the Central Administrative Tribunal since 1985, with 41,647 currently pending across 33 Benches. - Endorses Citizens Charters, Right to Information Acts and the pending Freedom of Information Bill; calls for eliminating 'inhibiting clauses in the Official Secrets Act and Conduct Rules.' - Couples anti-corruption enforcement (CVC, CBI, Lokayuktas) with statutory teeth — Benami Transactions Prohibition Act, the pending Corrupt Public Servants (Forfeiture of Property) Act, and Prevention of Money Laundering legislation. - Treats e-governance and Total Quality Management as the modernisation track, channelling assistance from the Department of Administrative Reforms, Government of India. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] Goods & Services Tax URL: https://indianliberals.in/primary-works/goods-services-tax-an-overview-jamshyd-godrej-bhavana-doshi-s-s-bhandare/ ### Summary This Forum of Free Enterprise booklet collects three short essays giving an overview of India's Goods & Services Tax (GST) shortly after its 1 July 2017 rollout. The cover lists three contributors — Jamshyd Godrej, Bhavna Doshi and S. S. Bhandare — and the booklet is sponsored by the Shailesh Kapadia Memorial Trust, with a memorial page dedicated to the late chartered accountant Shailesh Kapadia (1949–1988) preceding the essays. In the rendered pages, two of the three essays appear: Godrej's brief 'GST: A Business Perspective' (a corporate-leader endorsement of GST as the largest indirect-tax reform since liberalisation) and the opening portion of Bhavna Doshi's longer 'India Goods and Services Tax — a Macro Overview' (a technical mapping of the new dual GST architecture, its constitutional path, and its comparison with Australia, the EU and Canada). The volume's argumentative center, so far as the rendered pages show, is that GST — though imperfectly multi-rated — is a federal-cooperation triumph that simplifies compliance, eliminates cascading, and tilts India toward a single market. ### Body # Goods & Services Tax *By Jamshyd Godrej, Bhavna Doshi, S.S. Bhandare* ## Summary This Forum of Free Enterprise booklet collects three short essays giving an overview of India's Goods & Services Tax (GST) shortly after its 1 July 2017 rollout. The cover lists three contributors — Jamshyd Godrej, Bhavna Doshi and S. S. Bhandare — and the booklet is sponsored by the Shailesh Kapadia Memorial Trust, with a memorial page dedicated to the late chartered accountant Shailesh Kapadia (1949–1988) preceding the essays. In the rendered pages, two of the three essays appear: Godrej's brief 'GST: A Business Perspective' (a corporate-leader endorsement of GST as the largest indirect-tax reform since liberalisation) and the opening portion of Bhavna Doshi's longer 'India Goods and Services Tax — a Macro Overview' (a technical mapping of the new dual GST architecture, its constitutional path, and its comparison with Australia, the EU and Canada). The volume's argumentative center, so far as the rendered pages show, is that GST — though imperfectly multi-rated — is a federal-cooperation triumph that simplifies compliance, eliminates cascading, and tilts India toward a single market. ## Essays ### GST : A Business Perspective *By Jamshyd Godrej* Jamshyd Godrej, writing as an industrialist (Managing Director, Godrej & Boyce), frames GST as 'the biggest reform in the Indian indirect tax structure since the economy opened up, twenty six years ago.' He sketches the constitutional and institutional path — the 122nd Constitution Amendment, the formation of the GST Council, the passage of the GST Act and Rules — and argues that subsuming a maze of central and state levies under one umbrella will simplify compliance for businesses operating across states and end the headaches of dealing with each state's separate rules. Godrej concedes that the change is sweeping: business processes, accounting and ERP systems must all adapt to a supply-based concept of tax that replaces the older manufacture/sale/service trichotomy, and corporate decisions on plant location and supply chains will now turn on business efficiency rather than tax arbitrage. He credits Parliament, the state governments and the Finance Ministry for the political willingness that delivered the law, and closes with the wish that it deliver 'an India in which trade is free, compliances are easier, growth is phenomenal and consumers are satisfied' — adding the pointed reservation that this would have been 'best achieved through a single low rate structure, similar to what was originally proposed.' - Calls GST the biggest indirect-tax reform since the 1991 liberalisation, anchored in the 122nd Constitution Amendment and the GST Council. - Argues the single-umbrella levy ends the burden of dealing with varied state-by-state rules and will simplify compliance for industry. - Identifies the consumer as the largest beneficiary, with most consumer-price-index items placed at lower rates or exempted. - Notes that GST forces a paradigm shift from manufacture/sale/service to a 'supply' concept, requiring overhaul of business processes, accounting and ERP. - Predicts the destination principle and zero-rated exports will lift Indian firms' competitiveness, and ends with a pointed preference for a single low rate. ### India Goods and Services Tax – a Macro Overview *By Bhavna Doshi* Bhavna Doshi, a senior chartered accountant and KPMG adviser, supplies the booklet's technical anchor. She defines GST as 'a common tax on supply of both, goods and services, to be commonly levied and collected by Centre, 28 States and 7 Union Territories, on a common base, at common rates, having common procedures to be administered fully electronically through a common digital platform,' and recounts the nine-year negotiation through the Empowered Committee of State Finance Ministers that produced the 122nd Constitution Amendment (the earlier 115th Bill having lapsed) and ultimately the Constitution (One Hundred and First) Amendment Act, 2016. She traces the chain of enactments through the CGST, IGST, UTGST and Compensation Cess Acts up to the 1 July 2017 launch (and Jammu & Kashmir's 8 July adherence). In the rendered pages Doshi then situates India's dual model against Australia's federal GST (2000, 10% standard rate, ACCC anti-profiteering), the EU's harmonised VAT under the 1977 Sixth Directive, and Canada's mixed national/provincial HST/PST/QST patchwork — concluding that none is a clean comparator and that India's design is novel. She lays out the IGST mechanism for inter-state and intra-entity stock transfers, the elimination of C/F/I forms and state-border check posts, and the credit-chain logic; flags business worries over valuation of inter-state self-supplies and the inclusion of employee cost; and reaches the rate structure (0.25%, 3%, 5%, 12%, 18%, 28% plus Compensation Cess) just as the rendered pages cut off. Throughout, she treats the GST Council's voting design — where neither Centre nor all States together can override the Council — as a federal-cooperation breakthrough. - Frames GST as a constitutionally mandated common tax administered electronically by Centre, 28 States and 7 UTs on a common base and rates. - Walks through the nine-year journey via the Empowered Committee of State Finance Ministers, the lapsed 115th Bill, the 122nd Amendment, and enactment of CGST/IGST/UTGST/Compensation Cess Acts. - Compares India's dual model against Australia (federal GST, 2000), the EU (Sixth Directive, 1977) and Canada (HST/PST mosaic), arguing each is only partly comparable. - Explains the IGST settlement mechanism, the dismantling of C/F/I forms and check posts, and credit-chain restrictions on items like rent-a-cab, outdoor catering and motor vehicles. - Flags business anxieties over valuation of inter-state self-supplies and the inclusion of employee cost in 'open market value' for intra-organisation services. - Reads the GST Council's vote-share design as a 'path breaking' federal device delivering 'one tax across the nation'. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] Governance & Democracy in India URL: https://indianliberals.in/primary-works/governance-democracy-in-india-r-balasubramanian/ ### Summary Governance & Democracy in India is a Forum of Free Enterprise booklet transcribing Dr. R. Balasubramaniam's inaugural keynote address delivered in Berlin on 16 January 2019 at an event organised by the Tagore Center, Embassy of India, in association with the Indian Center for Cultural Relations, New Delhi. Speaking as a medical doctor turned grassroots development activist with three decades of work among India's poorest, Balasubramaniam argues that 'governance', 'democracy' and 'citizenship' cannot be cleanly separated — they are intricately enmeshed and only become legible at the last mile, where a tribal woman in a forest or a small entrepreneur in tier-2 Mysuru actually encounters the state. The rendered pages develop the booklet's central diagnosis: India's deepest transition is not economic but cultural — from 'subject-hood' to 'citizen-hood', and from an 'entitlement mindset' to an 'empowerment mindset'.… ### Body # Governance & Democracy in India *By Dr. R. Balasubramaniam* ## Summary Governance & Democracy in India is a Forum of Free Enterprise booklet transcribing Dr. R. Balasubramaniam's inaugural keynote address delivered in Berlin on 16 January 2019 at an event organised by the Tagore Center, Embassy of India, in association with the Indian Center for Cultural Relations, New Delhi. Speaking as a medical doctor turned grassroots development activist with three decades of work among India's poorest, Balasubramaniam argues that 'governance', 'democracy' and 'citizenship' cannot be cleanly separated — they are intricately enmeshed and only become legible at the last mile, where a tribal woman in a forest or a small entrepreneur in tier-2 Mysuru actually encounters the state. The rendered pages develop the booklet's central diagnosis: India's deepest transition is not economic but cultural — from 'subject-hood' to 'citizen-hood', and from an 'entitlement mindset' to an 'empowerment mindset'. Balasubramaniam reads sixty-plus post-independence years as a long habituation to dependence on a paternalist state whose constitution promises food, nutrition and jobs, then narrates the evolution of Indian democracy from one-party Congress hegemony through the 1975 Emergency, the Vajpayee-era coalition experiment, and the post-2014 single-party mandate. He frames the next stage of maturation around three forces: the framing of politically acceptable, administratively feasible and sustainable rules; the building (and dismantling) of democratic institutions; and political leadership willing to ask 1.3 billion people to stop receiving and start participating. Sunil S. Bhandare's editorial introduction situates the address inside global anxieties about democratic retreat and signals that the booklet is offered as an 'honest independent perspective' from a practitioner rather than an academic — explicitly inviting researchers and students to test his claims about whether recent policy initiatives are 'conferring the desired benefits to the concerned deserving people'. ## Key points - Transcript of Balasubramaniam's inaugural keynote address in Berlin (16 January 2019), published by Forum of Free Enterprise with an editorial introduction by Sunil S. Bhandare and underwritten by the Shailesh Kapadia Memorial Trust. - Frames governance, democracy and citizenship as inseparable at the grassroots, drawing on three decades of practitioner work with 'the poorest of the poor' in India. - Uses an elderly tribal woman's pension story — and her later access to a bank account via the JAM (Jan Dhan, Aadhaar, Mobile) stack — as a parable for 'last mile' good governance. - Diagnoses India's core challenge as a shift from subject-hood to citizen-hood, and from an entitlement mindset to an empowerment mindset across 1.3 billion people. - Reads Indian democratic evolution in phases: Congress one-party dominance, the 1975 Emergency, coalition governance under Vajpayee, and a post-2014 single-party mandate seen as growing maturation. - Names a 'bureaucratic challenge': civil servants accustomed for 65 years to being 'master' must internalise the manifesto-stated role of 'servants of the public'. - Lays out three forces shaping governance — rules (politically acceptable, administratively feasible, sustainable), democratic institutions to deliver them, and political leadership to absorb citizen challenge. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] GRAVE DANGERS OF STATE TRADING IN FOODGRAINS URL: https://indianliberals.in/primary-works/grave-dangers-of-state-trading-in-foodgrains-by-ajit-prasad-jain-november-2-1959/ ### Summary Ajit Prasad Jain, a former Union Food Minister, dissects two of independent India's most consequential food-policy decisions: the 1956 commitment to raise foodgrain production from 75 to 80 million tons under the second Plan, and the fall-1958 resolution that the State should take over the wholesale trade in foodgrains. Both, he writes, 'descended meteor-like from the sky', taken at meetings of the National Development Council without prior consultation, papers, or notes — and put up before the Council essentially as faits accomplis. He uses the occasion to anatomise the N.D.C. itself: an extra-constitutional body with no formal link to the Cabinet, suited equally to debate and to no real responsibility, where Chief Ministers attend by courtesy and the Prime Minister's compromise instincts paper over genuine conflicts between Centre and States. The heart of the pamphlet is Jain's account of how the food-production target was inflated.… ### Body # GRAVE DANGERS OF STATE TRADING IN FOODGRAINS *By Ajit Prasad Jain* ## Summary Ajit Prasad Jain, a former Union Food Minister, dissects two of independent India's most consequential food-policy decisions: the 1956 commitment to raise foodgrain production from 75 to 80 million tons under the second Plan, and the fall-1958 resolution that the State should take over the wholesale trade in foodgrains. Both, he writes, 'descended meteor-like from the sky', taken at meetings of the National Development Council without prior consultation, papers, or notes — and put up before the Council essentially as faits accomplis. He uses the occasion to anatomise the N.D.C. itself: an extra-constitutional body with no formal link to the Cabinet, suited equally to debate and to no real responsibility, where Chief Ministers attend by courtesy and the Prime Minister's compromise instincts paper over genuine conflicts between Centre and States. The heart of the pamphlet is Jain's account of how the food-production target was inflated. He recounts that in April 1956 a Planning Commission member — 'an academician but had little to do with agriculture' — wrote to the Prime Minister citing 8 per cent annual growth in Chinese foodgrain output and commending a 'two-fold programme' built on a Marxian view of labour as the sole source of value. Jain shows that this enthusiasm crowded out capital: of Rs. 369 crores allotted for Food and Agriculture, only Rs. 170 crores were earmarked for production itself, and Ford Foundation experts had to remind the government that labour alone could not substitute for fertilizers, irrigation, and other inputs. The Mussoorie conference of State Agriculture Ministers, the Foodgrains Enquiry Committee, and the warning bell of the failed 1957 fertilizer supply all went unheeded. On State trading, Jain's verdict is uncompromising. Where the State is only a partial buyer, prices can be controlled only through statutory mechanism — meaning, in practice, seizure of stocks. The two-year experiment of buffer-stock operations before State trading proper had already produced 'a plethora of harsh words' but words break no bones. Citing the breakdown of controls in Orissa, Andhra and Bihar — where smuggling rose 'to six-digit-ton figures' and the Bihar Government had to retrace its measures — he argues that full State trading implies the complete elimination of wholesale traders, and that controls on price and movement of foodgrains will have to follow. He closes by noting that Nehru wields, in this area, powers President Roosevelt once exercised in America, and that the A.I.C.C. Chandigarh announcement has tripled his responsibility: 'A mere play with State trading can only involve the country in grave dangers.' The text is reproduced from the Times of India of November 2 and 3, 1959, and circulated by the Forum of Free Enterprise. ## Key points - Frames the 1956 production target hike and the 1958 decision on State wholesale trade in foodgrains as two NDC decisions taken without prior consultation, papers or notes. - Argues the National Development Council has no constitutional basis, no formal link with the Union Cabinet, and increasingly resembles the 'German Diet of the pre-Bismarck era' — suited only to debate and advice. - Traces the inflated foodgrain target to a Planning Commission member's April 1956 letter to the PM about Chinese 8% annual growth, built on a Marxian valuation of labour as the only source of value. - Shows that Rs. 369 crores were allotted to Food and Agriculture but only Rs. 170 crores were earmarked for food production proper, with the rest going to Community Development, N.E.S. blocks and irrigation. - Quotes the Ford Foundation team's insistence that abundant labour cannot substitute for capital — fertilizers, irrigation, drainage and improved seed — in raising agricultural output. - Recounts the 1957 Foodgrains Enquiry Committee's finding that most State governments achieved less than 60 per cent of the revised second-Plan targets, and the 1958 fertilizer supply shortfall of 45 per cent. - Contends that State trading in any partial form requires statutory controls on price and movement, citing breakdowns in Orissa, Andhra and Bihar where smuggling reached 'six-digit-ton figures'. - Closes with the warning that the Chandigarh A.I.C.C. announcement has tripled the Prime Minister's responsibility, and that 'a mere play with State trading can only involve the country in grave dangers.' --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] Green Energy URL: https://indianliberals.in/primary-works/green-energy-prof-soli-j-arceivalal-june-4-2011/ ### Summary Green Energy is a Forum of Free Enterprise booklet by Prof. Soli J. Arceivala, an environmental engineer and former Chief Environmental Health expert with WHO/UN South-East Asia. Editor Sunil S. Bhandare's introduction frames the core dilemma: India's per capita energy availability must rise six-fold over the coming decades, yet its room for additional carbon emissions is only about three-fold — a structural mismatch between development aspiration and ecological constraint. Arceivala's reply, written in plain prose for a general policy audience, is that India must mainstream renewables now and treat them as the price-competitive default rather than a virtuous luxury. The bulk of the booklet is a practitioner's tour of alternative-energy options. Arceivala concentrates on the three he judges most viable at 2011 prices — wind, solar, and biomass — and folds in shorter sections on hydro, shale gas, coal gas, LNG/CNG/LPG, biofuels (Jatropha and ethanol), nuclear, wave, and geo-thermal energy. Each is examined for installed capacity, capital cost, payback, land requirements, and policy frictions.… ### Body # Green Energy *By Prof. Soli J. Arceivala* ## Summary Green Energy is a Forum of Free Enterprise booklet by Prof. Soli J. Arceivala, an environmental engineer and former Chief Environmental Health expert with WHO/UN South-East Asia. Editor Sunil S. Bhandare's introduction frames the core dilemma: India's per capita energy availability must rise six-fold over the coming decades, yet its room for additional carbon emissions is only about three-fold — a structural mismatch between development aspiration and ecological constraint. Arceivala's reply, written in plain prose for a general policy audience, is that India must mainstream renewables now and treat them as the price-competitive default rather than a virtuous luxury. The bulk of the booklet is a practitioner's tour of alternative-energy options. Arceivala concentrates on the three he judges most viable at 2011 prices — wind, solar, and biomass — and folds in shorter sections on hydro, shale gas, coal gas, LNG/CNG/LPG, biofuels (Jatropha and ethanol), nuclear, wave, and geo-thermal energy. Each is examined for installed capacity, capital cost, payback, land requirements, and policy frictions. The reader is taken from the cube-of-speed physics of wind turbines through coastal wind-tunnelling sites, off-shore floating farms (StatoilHydro), Suzlon's export footprint, IDFC- and DLF-backed wind ventures, and ONGC's 50 MW farm at Kutch, to solar lanterns and water heaters with two-year paybacks, to large concentrated-solar projects in Rajasthan and the Thar, to satellite-based CSP as a frontier idea. The booklet's underlying argument is liberal and pragmatic rather than environmentalist. Arceivala notes that 'hard-headed businessmen' will only switch when costs converge — which they are doing — and proposes a fiscal-policy and public-private-partnership architecture (accelerated depreciation, captive-generation feed-in tariffs at Rs 18.50/kWh, reverse selling to the grid, German-style feedback payments) to accelerate that convergence. Three policy reforms are named as urgent: a more people-friendly land-acquisition regime (the Jaitapur nuclear and Singur/Nandigram experiences are flagged), a research policy that picks promising technologies such as wave energy, and a fiscal policy oriented to PPP investment in renewables. The volume closes with a biographical tribute to Shailesh Kapadia (1949–1988), a Bombay chartered accountant whose memorial trust sponsored the booklet, and the Forum's signature A. D. Shroff epigraph on free enterprise. ## Key points - Sets up the central tension: India's per capita energy needs must grow six-fold while permissible carbon emissions can only triple, forcing a green-energy pivot. - Arceivala defines 'GREEN' as 'Growth with Resources, Environment Enhancement and Nature' — energy that grows the economy without exhausting or polluting it. - Concentrates on wind, solar, and biomass as the three presently viable renewables at 2011 prices, with secondary treatment of hydro, shale gas, biofuels, nuclear, wave, and geo-thermal. - Reports that renewables were under 3% of India's energy mix in 2010, against a national target of around 20% by 2020 — requiring fiscal incentives and large public-private investment. - Wind discussion covers the cube-of-speed physics, monsoon seasonality, accelerated depreciation as a tax-saving lever, offshore floating farms (StatoilHydro), Suzlon's exports, and ventures by IDFC, DLF, JSW Green Energy, and ONGC. - Solar section walks through cookers, water heaters, TERI-type lanterns (targeted at displacing 1 billion litres of kerosene annually by 2022), stand-alone PV for telecom and water treatment, grid-connected rooftop PV, and concentrated solar power in Rajasthan, the Thar, and Spain/US analogues. - Biomass and waste-to-energy receive substantial treatment: gobar-gas plants, UASB reactors, BARC's 'Nisargruna' bio-methanation units, Thermax/Lambion partnerships, and Karnataka's 4.5 MW biomass plant as a model. - Names three urgent policy reforms — land acquisition, research direction (especially wave energy), and fiscal policy — and ends with the claim that wind, solar, hydro and wave energy 'would win hands down' as the sources to concentrate on. - Frames the project in classical-liberal terms: market price advantage, private-public partnership, and feedback payment to private generators, rather than command-and-control environmentalism. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] GROW MORE VOTES URL: https://indianliberals.in/primary-works/grow-more-votes-by-ma-sreenivasan-february-8-1960/ ### Summary "Grow More Votes" is a polemical Forum of Free Enterprise leaflet by M. A. Sreenivasan, dated 8 February 1960, that punningly turns the government's "Grow More Food" campaign on its head. Triggered by Union Food Minister A. P. Jain's resignation and the Lok Sabha debate that followed, Sreenivasan asks why an independent India of plenty of land and labour continues to import hundreds of crores of rupees worth of foodgrains every year. His single-word answer is "Politics" — agriculture, he argues, has been smothered by what he calls the "Juggernaut of Avadi," the Socialist Pattern of Society, and by a ruling class of "political panjandrums" whose obsession with vote-catching slogans like "Land belongs to the People" and "Land to the Landless" has destroyed the security of land as property. The leaflet defends private property in land by invoking the traditional Indian categories of sthira (permanent, immoveable property) and astha bhoga thejas swamyam (the owner's right to enjoy his land as long as the sun and moon last), and laments that title to land is now "a scrap of paper that flutters about in each political breeze." Sreenivasan attacks absentee landlordism by Congress polit… ### Body # GROW MORE VOTES *By MA Sreenivasan* ## Summary "Grow More Votes" is a polemical Forum of Free Enterprise leaflet by M. A. Sreenivasan, dated 8 February 1960, that punningly turns the government's "Grow More Food" campaign on its head. Triggered by Union Food Minister A. P. Jain's resignation and the Lok Sabha debate that followed, Sreenivasan asks why an independent India of plenty of land and labour continues to import hundreds of crores of rupees worth of foodgrains every year. His single-word answer is "Politics" — agriculture, he argues, has been smothered by what he calls the "Juggernaut of Avadi," the Socialist Pattern of Society, and by a ruling class of "political panjandrums" whose obsession with vote-catching slogans like "Land belongs to the People" and "Land to the Landless" has destroyed the security of land as property. The leaflet defends private property in land by invoking the traditional Indian categories of sthira (permanent, immoveable property) and astha bhoga thejas swamyam (the owner's right to enjoy his land as long as the sun and moon last), and laments that title to land is now "a scrap of paper that flutters about in each political breeze." Sreenivasan attacks absentee landlordism by Congress politicians who own steel-works, sugar companies and chemical factories while their tenants quit cultivation, and warns that the Nagpur resolution on Joint Co-operative Farming — pushed despite the resignation of the Food Minister — masks compulsion as voluntarism. Mobilising Anatole France's aphorism about the thickness of a court-fee stamp, he claims the difference between "voluntary" and "compulsory" co-operation in India is now the thickness of "a Minister's letter head — or a bureaucrat's visiting card." He frames the newly-launched Swatantra Party as the only serious political rival to a Congress that, since Gandhi's death, has drifted toward what the Communist Party would have done in power, only "painless and performed under the chloroform of mass hypnosis." The leaflet closes with a tart thanksgiving that the Prime Minister has acknowledged the "Senior Partner of the new Party" — God — and carries the standard Forum disclaimer that the views expressed are not necessarily those of the Forum of Free Enterprise. ## Key points - Sreenivasan turns the government slogan "Grow More Food" into "Grow More Votes," arguing that vote-seeking politics — not soil, climate or capital — is the binding constraint on Indian agriculture. - He blames the persistent foodgrain import bill of hundreds of crores of rupees on the "Juggernaut of Avadi" — the Socialist Pattern of Society adopted by the Congress — which he says concentrates power beyond that of Moghul Emperors and Maharajas. - He defends land as sthira (permanent property) and invokes the traditional formula astha bhoga thejas swamyam, contrasting it with the present condition in which title to land "flutters about in each political breeze." - He attacks Congress politicians who hold shares in steel works, sugar companies, and chemical factories while functioning as absentee landlords, presiding over the fall of cultivated value and the flight of small owners. - He charges that Mr. S. K. Patil's reformist voice is being "jammed" by his own party's High Command after the Nagpur Joint Co-operative Farming resolution. - He uses Anatole France's line about court-fee stamps to argue that in present-day India the line between voluntary and compulsory state action is "the thickness of a Minister's letter head — or a bureaucrat's visiting card." - He treats the Swatantra Party as the first serious political rival to a Congress that, after Gandhi's death, has drifted toward executing the Communist programme under mass hypnosis. - The leaflet is published by the Forum of Free Enterprise (235 Dr. Dadabhai Naoroji Road, Bombay) with M. R. Pai as publisher and the standard disclaimer that the views are not necessarily those of the Forum. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] Growing Government Expenditure is a Cause for Concern URL: https://indianliberals.in/primary-works/growing-government-is-a-cause-for-concern-dr-pendise-july-17-1995/ ### Summary D. R. Pendse, then Chief Consulting Economist of the Industrial Development Bank of India, uses this Forum of Free Enterprise pamphlet (based on a United News of India interview note) to sound an alarm about the deteriorating fiscal situation that lay just beneath the noisy debate over the March 1995 Union Budget. Writing in mid-1995, he warns that the underlying Budget arithmetic has been worsening for two or three years and that the Centre's outstanding debt — projected at over Rs. 6,00,000 crores by the end of 1995-96 — is being used in ways that should disturb taxpayers and policymakers alike. Using a single table broken into ten numbered observations, Pendse shows how roughly 36 per cent of every rupee borrowed by the Centre is consumed rather than invested, how a large slice of "capital outlay" (notably Rs. 55,500 crore in defence) yields no commercial return, and how the public sector undertakings — sitting on Rs. 1,59,000 crores of capital employed — earn a "measly 2.3 per cent" net return.… ### Body # Growing Government Expenditure is a Cause for Concern *By D. R. Pendse* ## Summary D. R. Pendse, then Chief Consulting Economist of the Industrial Development Bank of India, uses this Forum of Free Enterprise pamphlet (based on a United News of India interview note) to sound an alarm about the deteriorating fiscal situation that lay just beneath the noisy debate over the March 1995 Union Budget. Writing in mid-1995, he warns that the underlying Budget arithmetic has been worsening for two or three years and that the Centre's outstanding debt — projected at over Rs. 6,00,000 crores by the end of 1995-96 — is being used in ways that should disturb taxpayers and policymakers alike. Using a single table broken into ten numbered observations, Pendse shows how roughly 36 per cent of every rupee borrowed by the Centre is consumed rather than invested, how a large slice of "capital outlay" (notably Rs. 55,500 crore in defence) yields no commercial return, and how the public sector undertakings — sitting on Rs. 1,59,000 crores of capital employed — earn a "measly 2.3 per cent" net return. He notes that the dividends the Centre receives from the RBI alone exceed those from every other public enterprise combined, that loans to state governments earn an average of just 10 per cent against the Centre's own higher cost of borrowing, and that of Rs. 11,526 crore of fresh external assistance in 1995-96, almost 89 per cent will be pre-empted by interest payments and repayments of past loans. The core polemic is fiscal-deficit revisionism: against the Finance Minister's target of Rs. 57,634 crore, Pendse argues the 1995-96 deficit will instead come in close to Rs. 71,000 crore. He points to suspiciously low projected increases in total expenditure, the absence of provision for six new anti-poverty ministries and for Pay Commission burdens, and the political logic of a pre-election year. The pamphlet closes with the explicit warning that a similarly fast-deteriorating fiscal situation "landed us into our economic crisis of 1991", and is accompanied by a statistical appendix reproducing tables from the Economic Survey 1994-95 on Central government deficits, outstanding liabilities, interest payments and budgetary transactions, framed by signature Forum sidebar quotes from A. D. Shroff and Eugene Black. ## Key points - Pendse argues the Centre's outstanding debt will exceed Rs. 6,00,000 crore by end-1995-96 — the largest single figure he can find in the budget papers. - Of every rupee borrowed, roughly 36 per cent is used up in the Centre's own consumption rather than investment, producing a chronic 'surplus on capital account'. - A large share of so-called capital outlay — including Rs. 55,500 crore in defence — earns no commercial return, making it economically akin to consumption. - Public sector undertakings deploy about Rs. 1,59,000 crore of capital employed but earn only a 'measly' 2.3 per cent net return over the last five years. - Dividends from the Reserve Bank of India (Rs. 1,500 crore) exceed those from all other public enterprises combined (Rs. 1,446 crore), exposing how thin PSU profitability really is. - Loans to state governments yield the Centre an average of just 10 per cent, well below its own cost of borrowing, so a large part of these loans is effectively rolled over rather than repaid. - Of Rs. 11,526 crore of fresh external assistance budgeted for 1995-96, only about 11 per cent (Rs. 1,284 crore) will be available for fresh use; the rest is pre-empted by interest and repayments. - Against the Finance Minister's budget estimate of Rs. 57,634 crore, Pendse projects the 1995-96 fiscal deficit will reach close to Rs. 71,000 crore, with unbudgeted spending on Pay Commission awards, new poverty ministries and election-year pressures yet to bite. - A statistical appendix reproduces Economic Survey 1994-95 tables on deficits as a share of GDP, outstanding liabilities, interest on liabilities and central/state budgetary transactions over 1980-81 to 1994-95. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] Growth, Resilience and Reform URL: https://indianliberals.in/primary-works/growth-resilience-dr-subir-gokarn-november-5-2011/ ### Summary This booklet reproduces the 45th A. D. Shroff Memorial Lecture, delivered by Dr. Subir Gokarn — then Deputy Governor of the Reserve Bank of India — at the Indian Merchants' Chamber, Mumbai, on 2 November 2011 under the auspices of the Forum of Free Enterprise. Gokarn's central proposition is that the balance between efficiency and stability must be built into India's development strategy: reforms that open the economy to competition and accelerate growth have to be complemented by safeguards that contain the risks those very reforms generate. He reads the post-1991 record through this lens and argues that the same balance explains both the dream run of 2003-08 (when GDP averaged 8.9 per cent) and the relatively short-lived, transitory impact of the 2008 global financial crisis on India compared with developed economies. Using a 2x2 matrix of favourable / unfavourable global and domestic conditions, Gokarn maps Indian performance from 2003 to 2010, frames 2008-10 as the crisis quadrant, and treats 2011-onward as the new question.… ### Body # Growth, Resilience and Reform *By Dr. Subir Gokarn* ## Summary This booklet reproduces the 45th A. D. Shroff Memorial Lecture, delivered by Dr. Subir Gokarn — then Deputy Governor of the Reserve Bank of India — at the Indian Merchants' Chamber, Mumbai, on 2 November 2011 under the auspices of the Forum of Free Enterprise. Gokarn's central proposition is that the balance between efficiency and stability must be built into India's development strategy: reforms that open the economy to competition and accelerate growth have to be complemented by safeguards that contain the risks those very reforms generate. He reads the post-1991 record through this lens and argues that the same balance explains both the dream run of 2003-08 (when GDP averaged 8.9 per cent) and the relatively short-lived, transitory impact of the 2008 global financial crisis on India compared with developed economies. Using a 2x2 matrix of favourable / unfavourable global and domestic conditions, Gokarn maps Indian performance from 2003 to 2010, frames 2008-10 as the crisis quadrant, and treats 2011-onward as the new question. He stresses that the 1991 reforms were evolutionary rather than revolutionary — trade liberalisation in two stages, gradual financial-sector reform, capital-account opening through preference ordering (FDI preferred over portfolio, equity over debt, long-term debt over short), and fiscal consolidation under the Fiscal Responsibility and Budget Management Act of 2003 — and that their full impact only arrived when these strands reached a critical threshold around 2003. The accompanying slides (rising investment and falling deficits, increasing global integration, contributors to inflation, stable private consumption, monetary policy responses, banks' balance sheet composition, food inflation, and the diverging GDP/employment shares of agriculture, industry and services) anchor the empirical narrative. On risks, Gokarn singles out two channels arising from greater global integration: capital-flow volatility, which India's preference-ordered capital-account framework has dampened, and energy-import dependence, which has translated global price shocks into domestic inflation. On resilience he identifies four structural buffers — domestic-consumption-led demand, an anti-inflationary monetary stance built up before the crisis, fiscal space created by the 2003-08 consolidation, and bank balance sheets dominated by loans rather than mark-to-market investments. Looking forward, he calls for an integrated energy strategy that conserves use and shifts toward renewables, supply expansion in proteins / vegetables / fruits to entrench food disinflation, infrastructure and labour-market reform so industry can absorb workers leaving agriculture, and a financial sector capable of safely funding rapid growth — a "tightrope walk" between too much and too little caution. The closing message is that growth and resilience together require speed, synchronisation, and a continuing balance between exploiting opportunities and managing risk. A. D. Shroff's institutional voice frames the booklet: the cover and final pages identify the Forum of Free Enterprise as publisher (sponsored by The New India Assurance Co. Ltd.), the front matter carries Shroff's motto on free enterprise and a biographical sketch quoting J. R. D. Tata and former World Bank President George Woods, and the back matter lists every Shroff Memorial lecture from 1966 to 2010 — situating Gokarn's argument inside the Forum's classical-liberal lineage even as he speaks from the central bank. ## Key points - Delivered as the 45th A. D. Shroff Memorial Lecture on 2 November 2011 at the Indian Merchants' Chamber, Mumbai, under the auspices of the Forum of Free Enterprise; the speaker is the sitting Deputy Governor of the Reserve Bank of India. - The organising frame is a 2x2 matrix of favourable / unfavourable global and domestic conditions: 2003-08 sits in the favourable / favourable quadrant (8.9% average growth), 2008-10 in the unfavourable / unfavourable crisis quadrant, and the future is presented as an open question. - Gokarn argues the 1991 reforms were evolutionary, not revolutionary — trade reform in two stages, gradual financial-sector liberalisation, preference-ordered capital-account opening, and fiscal consolidation under the FRBM Act of 2003 — with full effects only arriving around 2003 when all strands crossed a tipping point. - Three drivers of the pre-crisis acceleration are identified: a stable, predictable investment environment; a virtuous cycle that raised the investment-to-GDP ratio above 35 per cent; and a fiscal switch from government consumption toward investment. - Two new risks from greater global integration are highlighted — capital-flow volatility (mitigated by India's preference-ordered capital-account framework) and rising energy-import dependence (which transmits global price shocks into domestic inflation). - Four structural sources of Indian resilience to the 2008 shock are catalogued: large share of domestic private consumption in demand, an anti-inflationary monetary stance with high policy rates and CRR going into the crisis, fiscal space accumulated during 2003-08, and bank balance sheets dominated by loans rather than mark-to-market investments. - Forward-looking policy priorities cover an integrated energy strategy, supply-side expansion of protein and horticultural foods to break entrenched food inflation, infrastructure and labour-market reform so industry can absorb labour leaving agriculture, and a financial sector that can finance rapid growth without amplifying risk. - Concluding messages: balanced reform produced both pre-crisis growth and post-crisis resilience; future performance depends more heavily on reinforcing domestic drivers given a hostile external environment; and 'speed, synchronization and the balance between exploiting opportunities and managing risk' should govern any reform strategy. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] "Growthmanship": Fact and Fallacy URL: https://indianliberals.in/primary-works/growthmanship-fact-or-fallacy-colin-clark-jul11-1965/ ### Summary "Growthmanship": Fact and Fallacy is Colin Clark's 1965 essay, reprinted from the January 1965 issue of The Intercollegiate Review and issued by Bombay's Forum of Free Enterprise as a 26-page booklet (Booklet No. 206, dated 11 July 1965) with an introduction by FFE President A. D. Shroff. Clark, then Director of Oxford's Agricultural Economics Research Institute, coins the term "growthmanship" to describe an excessive preoccupation with economic growth, the advocacy of unduly simple proposals for obtaining it, and the selective use of statistics to flatter one's preferred political and economic system at the expense of one's opponents. The core argument is that the post-war growth models of Sir Roy Harrod, Evsey Domar and Walt Whitman Rostow over-credit capital and under-credit human factors.… ### Body # "Growthmanship": Fact and Fallacy *By COLIN CLARK* ## Summary "Growthmanship": Fact and Fallacy is Colin Clark's 1965 essay, reprinted from the January 1965 issue of The Intercollegiate Review and issued by Bombay's Forum of Free Enterprise as a 26-page booklet (Booklet No. 206, dated 11 July 1965) with an introduction by FFE President A. D. Shroff. Clark, then Director of Oxford's Agricultural Economics Research Institute, coins the term "growthmanship" to describe an excessive preoccupation with economic growth, the advocacy of unduly simple proposals for obtaining it, and the selective use of statistics to flatter one's preferred political and economic system at the expense of one's opponents. The core argument is that the post-war growth models of Sir Roy Harrod, Evsey Domar and Walt Whitman Rostow over-credit capital and under-credit human factors. Drawing on cross-country capital-output ratios, the Norwegian research of Doctor Aukrust, Robert Solow's American findings and Tibor Barna's manufacturing comparisons, Clark contends that the marginal capital-output ratio is roughly four or less and often falling, that productivity gains come overwhelmingly from "better knowledge, organisation, skill, effort, education, enterprise", and that the Communist-era doctrine of a continually rising capital-output ratio — rooted in Eugen von Bohm-Bawerk and fossilised in Soviet planning — is empirically wrong. He dismantles widely-cited international "league tables" purporting to show that high investment drives rapid growth, singling out Governor Nelson Rockefeller's diagram for the Republicans' liberal wing, and rejects the Bergson–Nutter–Jasny and CIA-endorsed claim that Soviet productivity was overtaking the United States. The political payoff is a classical-liberal warning: governments that force the pace through capital-intensive prestige projects can waste real resources and retard rather than accelerate development. Clark cites Nehru's "comparative religion" reply to a question about building more Indian steel mills, and the wider tendency of "newly developing" countries to crave "a steel mill, a national airline, a six-lane highway and an invitation for the President of the country to address the Washington Press Club", as emblems of this danger. The summary and conclusions reassert the classical view that land, labour, capital and enterprise must all be present with no factor taking absolute precedence, and that international comparisons designed to show high investment going hand in hand with rapid growth do not survive examination. ## Key points - Clark coins the polemical term "growthmanship" for an excessive preoccupation with economic growth combined with simplistic policy prescriptions and tendentious selection of statistics. - He argues that the post-war Harrod-Domar growth models, designed for a period of capital shortage, are now out of date — capital is created during growth rather than being its principal cause. - Empirical capital-output ratios across Argentina, Australia, Canada, West Germany, India, Japan, Norway, the U.K., U.S.A. and U.S.S.R. cluster around 4 or less and often fall as economies advance, contradicting the Communist-era doctrine of an ever-rising ratio. - Norwegian research by Doctor Aukrust and parallel American work by Robert Solow show that growth in real national product comes overwhelmingly from human factors — education, skill, organisation and enterprise — rather than from sheer additions to the capital stock. - Walt Whitman Rostow's "take-off into sustained growth" doctrine is dismissed as a "half-truth at best"; Governor Nelson Rockefeller's diagram correlating high investment with rapid growth collapses when supplemented with a fuller country sample. - The Bergson-Nutter-Jasny studies, accepted even by the CIA, have shown that the supposed Soviet "catching up" with U.S. productivity was an artefact of mistaken, selectively-used evidence. - Clark ridicules the steel-mill cult — invoking Nehru's "comparative religion" remark — and warns that newly developing countries who fixate on prestige heavy industry while neglecting other sectors waste capital and retard development. - The conclusion is a classical-liberal restatement: land, labour, capital and enterprise must all be present with no factor taking absolute precedence, and government attempts to force the pace are likely to be counter-productive. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] हमारा हिन्दुस्तान URL: https://indianliberals.in/primary-works/hamara-hindustan/ ### Summary हमारा हिन्दुस्तान (Hamārā Hindustān) is a 1942 Hindi translation, by V. P. Sinha (वी. पी. सिन्हा), of Minoo Masani's English popular primer Our India, published by Oxford University Press Bombay. The book is addressed to a general Hindi-reading audience and sets out to introduce India's geography, population, climate, agriculture, and economic life in plain, conversational prose illustrated with approximately 100 diagrams and woodcut-style images. In the rendered pages Masani opens with an appeal to national pride: one in every five human beings on earth is an Indian, a fact that ought, he argues, to stir every reader to engage with the country's problems and potential. The first chapter (पाँच में एक, 'One in Five') covers India's physical geography — its vast extent from east to west and north to south, its three broad physiographic zones (the Himalaya, the great river plains, and the peninsula), the monsoon system, and the diversity of peoples and occupations.… ### Body ## Summary हमारा हिन्दुस्तान (Hamārā Hindustān) is a 1942 Hindi translation, by V. P. Sinha (वी. पी. सिन्हा), of Minoo Masani's English popular primer Our India, published by Oxford University Press Bombay. The book is addressed to a general Hindi-reading audience and sets out to introduce India's geography, population, climate, agriculture, and economic life in plain, conversational prose illustrated with approximately 100 diagrams and woodcut-style images. In the rendered pages Masani opens with an appeal to national pride: one in every five human beings on earth is an Indian, a fact that ought, he argues, to stir every reader to engage with the country's problems and potential. The first chapter (पाँच में एक, 'One in Five') covers India's physical geography — its vast extent from east to west and north to south, its three broad physiographic zones (the Himalaya, the great river plains, and the peninsula), the monsoon system, and the diversity of peoples and occupations. The second chapter (क्या हम सूर्य को खा सकते हैं?, 'Can We Eat the Sun?') turns to political economy: it explains how plants fix solar energy and why India's agricultural abundance is undermined by poverty, low yields, and the failure to use land and labour to full productive capacity, drawing comparative data on tea, coal, manganese, and jute against output in the USA, Russia, and other countries. The third chapter (एक पहेली, 'A Riddle'), only partially visible in the rendered pages, poses the central paradox of Indian poverty amid natural plenty — asking why a country so richly endowed should have a population that is overwhelmingly poor and undernourished. The very opening of the fourth chapter (नाश का घर, 'House of Destruction') appears on the last rendered page and begins to characterise the typical Indian as represented by a cross-section of ten people. Throughout the rendered pages Masani deploys vivid comparative statistics — India's population as nearly one-fifth of the world, the average Indian family's annual income, calorie intake, and infant mortality relative to counterparts in Britain, the USA, and Australia — to make the case that India's resources are underused and that informed citizens must understand and act on this gap. The tone is that of popular civic education aimed at ordinary readers, consistent with the book's origin as a mass-circulation primer written during the independence movement. ## Key points - In the rendered pages, Masani frames India's enormous population (one in five humans is Indian) as a source of national pride and civic responsibility, not merely a demographic fact. - Chapter 1 presents a geographic overview of India — three physiographic zones, the monsoon, river systems — using comparison with European countries to convey scale. - Chapter 2 explains agricultural productivity through an accessible account of photosynthesis and solar energy, then uses comparative charts to show India's underperformance in tea, coal, manganese, and jute production relative to its potential. - In the rendered pages, Masani cites specific figures: India produces roughly 20 crore maunds of coal annually compared to much higher outputs in the USA and USSR; India accounts for the largest share of world jute and manganese output but lags in per-capita industrial goods. - Chapter 3 poses the central 'riddle' of Indian poverty amid plenty, noting that the average Indian's annual income is extremely low (around 64–74 rupees per year according to figures cited) and that this traps families in a cycle of under-nutrition and debt. - In the rendered pages, the book argues that land fragmentation, landlordism, and lack of rural credit and health infrastructure are the structural causes of rural poverty. - The illustrated format (comparative pictograms, maps, woodcuts) is integral to the pedagogical design, making statistical arguments accessible to readers with limited formal education. - The opening of Chapter 4 (नाश का घर) introduces a typology of ten representative Indians, setting up a structural analysis of occupational distribution. --- ## [Primary work] Housing Problem in India — Today and 2000 A.D. URL: https://indianliberals.in/primary-works/housing-problem-india-deepak-parekh-aug-1988/ ### Summary Deepak S. Parekh, then Managing Director of HDFC, uses a Forum of Free Enterprise lecture (delivered 1 June 1988) to lay out the scale, causes and likely trajectory of India's housing shortage as the country approaches the year 2000. He concedes that the early post-independence neglect of housing was understandable while food, irrigation and heavy industry took priority, but argues that with food production no longer an overriding crisis, housing and education are now the country's two paramount basic-needs problems. Using NBO data he charts a shortage rising from 9 million units in 1951 to a projected 39.1 million by 2001, with about 30 million urban Indians already living in slums and one-fifth of the population effectively houseless or sub-standardly housed. Parekh traces the worsening situation to five reinforcing factors: a population explosion projected to cross one billion by 2000, accelerating rural-to-urban migration (urban growth at ~4% versus general 2–2.5%), the historically low priority accorded to housing in the Five-Year Plans (investment falling from 34% in the First Plan to ~10% in the Seventh, public housing investment from 16% to 1.6%), restrictive laws and re… ### Body # Housing Problem in India — Today and 2000 A.D. *By DEEPAK S. PAREKH* ## Summary Deepak S. Parekh, then Managing Director of HDFC, uses a Forum of Free Enterprise lecture (delivered 1 June 1988) to lay out the scale, causes and likely trajectory of India's housing shortage as the country approaches the year 2000. He concedes that the early post-independence neglect of housing was understandable while food, irrigation and heavy industry took priority, but argues that with food production no longer an overriding crisis, housing and education are now the country's two paramount basic-needs problems. Using NBO data he charts a shortage rising from 9 million units in 1951 to a projected 39.1 million by 2001, with about 30 million urban Indians already living in slums and one-fifth of the population effectively houseless or sub-standardly housed. Parekh traces the worsening situation to five reinforcing factors: a population explosion projected to cross one billion by 2000, accelerating rural-to-urban migration (urban growth at ~4% versus general 2–2.5%), the historically low priority accorded to housing in the Five-Year Plans (investment falling from 34% in the First Plan to ~10% in the Seventh, public housing investment from 16% to 1.6%), restrictive laws and regulations, and the runaway cost of land and materials. He singles out the Urban Land (Ceiling and Regulation) Act 1976, the Rent Control Act, restrictive municipal building bye-laws and density norms, and Maharashtra's withdrawal of stamp-duty exemption on residential units as policies that, however well-intentioned, have shrunk supply, encouraged 'pugree' deposits, hoarded vacant flats and pushed conforming construction out of reach of the poor. The second half of the talk reads as a programme for a market-friendly housing-finance architecture. Parekh notes that only about 25% of housing investment in 1982–83 came from formal sources (LIC, GIC, HUDCO, banks, HDFC and the co-operative sector), with the bulk supplied by households and employers, and welcomes the Seventh Plan's frank admission that the major responsibility for house construction must be left to the private sector. He endorses the new National Housing Policy and the formation of the National Housing Bank, calls for lowered construction norms, mortgage-insurance legislation, an 'approved housing lender' regime, and recognition of housing as an industry so that fiscal incentives can channel savings into the sector. He casts the Government primarily as facilitator and promoter — with direct provision reserved for amenities (water, sanitation) and subsidised shelter for the weaker sections — and closes with the warning that without a satellite-township strategy, mass-transit investment and re-balancing of employment toward rural and semi-urban areas, urban centres will face 'unbearable pressure' in the next decade. ## Key points - Housing shortage projected to rise from 9 million units in 1951 to 39.1 million by 2001, with rural shortage growing faster than urban due to population and income gaps. - Around 30 million urban Indians — roughly one-fifth of the urban population, and ~30% in metro cities — live in slums; 40% live in single-room dwellings. - Housing's share of total plan investment fell from 34% in the First Plan to ~10% in the Seventh; public-sector share collapsed from 16% to 1.6%. - The Urban Land (Ceiling and Regulation) Act 1976 is portrayed as having pushed up land prices by creating artificial scarcity, the inverse of its stated aim. - The Rent Control Act is faulted for protecting rich and corporate tenants alongside the poor, encouraging 'pugree' deposits, vacant flats and a collapse in rental supply. - About 75% of housing investment in 1982–83 came from informal sources; the formal system (LIC, GIC, HUDCO, HDFC, co-operatives) reached only the remaining 25%. - Parekh endorses the National Housing Policy, the new National Housing Bank, lowered construction norms, mortgage-insurance legislation and recognition of housing as an industry, casting the State as facilitator rather than builder. - Closes with a call for satellite townships, mass-transit, de-urbanization through rural job creation and indigenous low-cost construction materials to avoid urban decay in the next decade. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] HOW BIG ARE BIG ENTERPRISES IN INDIA? URL: https://indianliberals.in/primary-works/how-big-are-big-enterprises-h-t-parekh-april-10-1971/ ### Summary H. T. Parekh's pamphlet, reproduced from the Financial Express of 16 February 1971 and issued by the Forum of Free Enterprise, takes stock of the legal and political squeeze on Indian "large houses" at the start of the 1970s. He argues that the conceptual machinery the Dutt Committee used to identify big business — drawn from the 1965 Monopolies Inquiry Commission and resting on the figure of the managing agency house, the "%house-interest" measure of effective equity, and the Rs. 20 crore asset threshold under the Monopolies and Restrictive Trade Practices Act — has been overtaken by events. With managing agencies abolished, financial institutions like LIC, UTI, IDBI, IFC and ICICI nominating directors, and family groups sub-dividing as new generations grow up, he says the same firms that the Act treats as monolithic blocs of "economic power" no longer look or behave like the houses the Commission had in mind. From this diagnosis Parekh moves to a positive case for size.… ### Body ## Summary H. T. Parekh's pamphlet, reproduced from the Financial Express of 16 February 1971 and issued by the Forum of Free Enterprise, takes stock of the legal and political squeeze on Indian "large houses" at the start of the 1970s. He argues that the conceptual machinery the Dutt Committee used to identify big business — drawn from the 1965 Monopolies Inquiry Commission and resting on the figure of the managing agency house, the "%house-interest" measure of effective equity, and the Rs. 20 crore asset threshold under the Monopolies and Restrictive Trade Practices Act — has been overtaken by events. With managing agencies abolished, financial institutions like LIC, UTI, IDBI, IFC and ICICI nominating directors, and family groups sub-dividing as new generations grow up, he says the same firms that the Act treats as monolithic blocs of "economic power" no longer look or behave like the houses the Commission had in mind. From this diagnosis Parekh moves to a positive case for size. He observes that the optimum economic unit has shifted upward as technology has changed: paper plants once viable at 10 tons a day now need 100–200 tons, sugar factories that began at 500 tons of cane now run 2,000–3,500 tons, a cement plant of 1,200 tonnes costs about Rs. 10 crores. To stay competitive against international rivals, and to produce for export, Indian industry must keep upgrading plant — which means more capital, larger units, and groups large enough to diversify into new fields such as dyes, chemicals and man-made fibres. Examples like Delhi Cloth Mills, the Kirloskar group, Century Mills, Gwalior Rayon, Associated Cement Companies and Scindia Steam are offered as evidence that successful enterprises naturally outgrow a single product line. Parekh's conclusion is that the current statutory limits will probably need to be reconsidered, that anti-trust legislation as used in the United States and the more permissive merger regime in the United Kingdom point in the opposite direction from India's, and that — measured against public sector giants such as Hindustan Steel, Heavy Engineering Ranchi, State Trading Corporation and Indian Oil — the bulk of Indian private firms are in fact "puny". He grants that some of the larger private houses have grown complacent and need more dynamism, but warns that legislating against natural growth is the wrong remedy. The booklet ends with the hope that the "negative phase" of government policy toward private enterprise will pass, and is framed by paratext quotes from A. D. Shroff and Eugene Black affirming free enterprise as a positive good. ## Key points - Argues the Dutt Committee's 1969–70 definition of a large business house, built on managing agencies and the %house-interest test, is obsolete now that the managing agency system has been abolished and financial institutions are themselves the dominant shareholders. - Questions the continuing relevance of the Rs. 20 crore asset threshold for "large undertakings" and the Rs. 1 crore threshold for "dominant undertakings" under the Monopolies and Restrictive Trade Practices Act. - Distinguishes between a "large business group" and a "large company," warning that aggregating many small companies into one "house" gives a false picture of monopoly position, especially as family groups naturally sub-divide. - Documents how technological change has raised the minimum viable scale across industries — paper from 10 to 100–200 tons/day, sugar from 500 to 2,000–3,500 tons of cane/day, a 1,200-tonne cement plant at about Rs. 10 crores. - Asserts that international competition and export ambitions require continuous upgrading of plant, which only larger units and diversified groups can finance. - Cites Delhi Cloth Mills, the Kirloskar group, Century Mills, Gwalior Rayon, Associated Cement Companies, Hindustan Machine Tools and Scindia Steam as evidence that growth is intrinsically tied to diversification into allied fields. - Contrasts Indian restriction with U.S. antitrust experience (over 50 years of larger firms despite the law) and U.K. Labour Government encouragement of mergers in the national interest. - Concludes that against the scale of public sector enterprises such as Hindustan Steel, Heavy Engineering Ranchi, State Trading and Indian Oil, the bulk of Indian private firms are small by international or even Indian yardsticks. --- ## [Primary work] HOW CONTROLLED INDUSTRIES WORK IN INDIA—A CASE STUDY URL: https://indianliberals.in/primary-works/how-controlled-industries-work-in-india-sir-biren-mookerjee-mar10-1963/ ### Summary Sir Biren Mookerjee's March 1963 address — delivered as Chairman of the Indian Iron & Steel Company (IISCO) and circulated as a Forum of Free Enterprise booklet — uses the steel industry as a case study in how India's regime of administered prices and bureaucratic controls is hampering, rather than aiding, industrial development. A. D. Shroff's introduction sets the polemical frame: even committed planners are alarmed at how, under the Second and Third Five-Year Plans, the state has sought to take over as many economic activities as possible, with regulation 'bordering on regimentation' and controls hindering the very growth they were meant to stimulate. Two prefatory notes prepared with the help of S. V.… ### Body ## Summary Sir Biren Mookerjee's March 1963 address — delivered as Chairman of the Indian Iron & Steel Company (IISCO) and circulated as a Forum of Free Enterprise booklet — uses the steel industry as a case study in how India's regime of administered prices and bureaucratic controls is hampering, rather than aiding, industrial development. A. D. Shroff's introduction sets the polemical frame: even committed planners are alarmed at how, under the Second and Third Five-Year Plans, the state has sought to take over as many economic activities as possible, with regulation 'bordering on regimentation' and controls hindering the very growth they were meant to stimulate. Two prefatory notes prepared with the help of S. V. Rayan, Editor of 'Commerce', explain the constitutional position of the Tariff Commission and the mechanics of retention prices, charging that the Government's habit of overriding the Commission's recommendations downward has crippled the capital-raising capacity of cement, steel, coal and basic chemicals. Mookerjee's statement, originally addressed to IISCO shareholders, mounts an unsparing accounting of the Government's September 1962 retention-price order: against the Tariff Commission's recommendation of an Rs. 38-per-tonne increase, the Government allowed only Rs. 10.50; it disallowed interest on the Rs. 10-crore Special Advance the Company had been compelled to accept; it shrank the working-capital allowance from eight months to four; and it backdated the cuts so that earnings already credited had to be written back. He revisits the 1952–53 negotiations with Eugene R. Black's World Bank mission — recalling visits to Burnpur by Black, George D. Woods, Joseph Rucinski, Leonard B. Rist, Harold N. Graves and others — to show that today's Government insistence on a punishingly low return on capital contradicts the 'profit-margin' undertakings written into the original loan agreement of 15 July 1953. The second half of the speech turns from grievance to defence and prescription. Mookerjee documents that IISCO has actually operated at an eight-year average of 92.2 per cent capacity against the Tariff Board's assumed 90 per cent, that the country has been saved roughly Rs. 266 crores in foreign exchange over a decade (Charts A and B), and that expansion has been financed largely out of ploughed-back profits rather than fresh equity. He argues that crediting non-existent 'expected' earnings into retention prices, then clawing them back years later, has retarded India's industrial growth and weakened its defence-production base. He closes with prescriptions for the Fourth Five-Year Plan — continual rather than periodic capacity review, larger and locationally sensible plant units, beneficiation of coking coal and iron ore, more in-house training in place of premature overseas tours, and a longer reliance on experienced foreign staff. The pamphlet is bracketed by inset epigraphs from Eugene Black ('People must come to accept private enterprise not as a necessary evil, but as an affirmative good') and A. D. Shroff ('Free Enterprise was born with man and shall survive as long as man survives'), framing Mookerjee's technical complaint as a broader brief for the dignity of private enterprise. ## Key points - Forum of Free Enterprise booklet (10 March 1963) built around Sir Biren Mookerjee's IISCO chairman's statement, with an introduction by A. D. Shroff and two prefatory notes on the Tariff Commission and retention prices prepared with S. V. Rayan's help. - Documents the Union Government's September 1962 decision to award steel producers only an Rs. 10.50-per-tonne retention-price increase against the Tariff Commission's recommendation of Rs. 38, and to disallow interest on the Rs. 10-crore Special Advance. - Argues that retroactive price-fixing forces companies to write back earnings already paid out and credit non-existent receipts as if they were real income, distorting accounts and depreciation. - Reconstructs the 1952–53 World Bank loan negotiations — Eugene R. Black's visit, George D. Woods's Fact-Finding and Feasibility Mission, and the 15 July 1953 agreement — to show the Government is breaching the 'profit-margin' undertakings it gave foreign lenders. - Marshals empirical defence of the private steel sector: IISCO's eight-year capacity utilisation averaged 92.2 per cent versus the Board's 90 per cent assumption; private steel saved India roughly Rs. 266 crores in foreign exchange over a decade. - Demonstrates that expansion (Rs. 34.69 crores capital expenditure between 1952/53 and 1961/62) has been overwhelmingly financed by ploughed-back profits, with shareholders only paid bonus shares converted to equity. - Recommends, for the Fourth Plan, long-term continual capacity review, larger integrated plants of three to five million tonnes, attention to coking-coal and iron-ore quality, and ten- to twelve-year reliance on overseas expertise plus on-the-job training for Indian managers. --- ## [Primary work] Has Private Enterprise Failed? URL: https://indianliberals.in/primary-works/has-private-enterprise-failed-ad-shroff-230ct-1956/ ### Summary A. D. Shroff's October 1956 address to the Commerce Graduates' Association in Bombay is a point-by-point rebuttal of two then-current charges against Indian private enterprise: Union Commerce and Industry Minister T. T. Krishnamachari's quip at Madurai that 'Private Enterprise has failed me', and the Prime Minister's contention in Calcutta that private enterprise and democracy are incompatible. Shroff acknowledges the constraints of the post-Independence regulatory environment — 'discriminating protection', the Industries (Development and Regulation) Act of 1951, and the nationalisation of the Imperial Bank, life insurance and Indian Airlines — and argues that private industry has nonetheless carried the bulk of the country's industrial growth. He marshals official data to make the case: the Planning Commission's own publication concedes that public-sector investment under the First Plan was running far below the estimate of Rs.… ### Body # Has Private Enterprise Failed? *By A. D. Shroff* ## Summary A. D. Shroff's October 1956 address to the Commerce Graduates' Association in Bombay is a point-by-point rebuttal of two then-current charges against Indian private enterprise: Union Commerce and Industry Minister T. T. Krishnamachari's quip at Madurai that 'Private Enterprise has failed me', and the Prime Minister's contention in Calcutta that private enterprise and democracy are incompatible. Shroff acknowledges the constraints of the post-Independence regulatory environment — 'discriminating protection', the Industries (Development and Regulation) Act of 1951, and the nationalisation of the Imperial Bank, life insurance and Indian Airlines — and argues that private industry has nonetheless carried the bulk of the country's industrial growth. He marshals official data to make the case: the Planning Commission's own publication concedes that public-sector investment under the First Plan was running far below the estimate of Rs. 94 crores; the industrial production index, taking 1946 as base 100, climbed to 161.5 by 1955; cotton textiles, jute, steel, cement, paper, matches, sugar, machine tools, diesel engines, bicycles, sewing machines, soda ash, caustic soda and super-phosphates all show steep expansion under private operation. Pioneering ventures such as J. N. Tata's steel mill, Bombay's hydro-electric power, and the shipping firms of Walchand Hirachand and Narottam Morarji are offered as evidence that the private sector built the country's industrial spine in the modern sense. Shroff then turns to the charge that private enterprise concentrates economic power, citing an April Tata Quarterly article to argue that demand has so consistently outrun supply across Indian industry that genuine monopolies have not formed. He reads at length from World Bank President Eugene Black's letter to Krishnamachari urging India to give private enterprise an unqualified opportunity under the Second Five Year Plan, and closes by rejecting the Calcutta thesis outright — insisting that the democratic way of life assured by the constitution will suffer if free enterprise is not allowed to be practised. ## Key points - Frames the pamphlet as a direct response to T. T. Krishnamachari's 4 August Madurai speech ('Private Enterprise has failed me') and to the Prime Minister's Calcutta claim that private enterprise and democracy are incompatible. - Argues that despite 'discriminating protection', the 1951 Industries (Development and Regulation) Act, and the nationalisation of the Imperial Bank, life insurance and Indian Airlines, private enterprise has carried India's industrialisation. - Uses the Planning Commission's own figures — only about Rs. 57 crore of an expected Rs. 94 crore First Plan public-sector investment was realised — to show that the bulk of production gains came from private firms. - Cites an industrial production index that rose from 100 in 1946 to 161.5 in 1955 across textiles, steel, cement, machine tools, diesel engines and other lines. - Names J. N. Tata's steel works, Bombay hydro-electric power, the Tata Iron and Steel Company, and the shipping ventures of Walchand Hirachand and Narottam Morarji as private-sector pioneering feats that built modern Indian industry. - Disputes the concentration-of-economic-power thesis by reference to an April Tata Quarterly article showing that Indian demand has consistently outrun supply in every major industry. - Reproduces the substance of World Bank President Eugene Black's letter to Krishnamachari, which urged India to give private enterprise an unqualified opportunity under the Second Five Year Plan. - Concludes that the constitutional commitment to democracy is endangered if free enterprise is not allowed to be practised in India. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] Higher Education at the Cross-Roads of the Twentieth and Twenty-First Centuries URL: https://indianliberals.in/primary-works/higher-education-at-the-cross-roads-of-the-twentieth-and-twenty-first-centuries-dr-miss-a-s-desai/ ### Summary Delivered as the 33rd A. D. Shroff Memorial Lecture under the auspices of the Forum of Free Enterprise in Mumbai on 7 December 1998, Dr. (Miss) A. S. Desai's address frames Indian higher education as a system standing between a twentieth century preoccupied with material resources and a twenty-first century built on knowledge and information. Speaking as Chairperson of the University Grants Commission, she argues that India can ill afford the complacency of believing the country cannot bear the costs of an expanded university system — on the contrary, the country cannot afford NOT to invest in it. The lecture surveys the quantitative growth of the system since Independence — from a handful of universities at 1947 to 228 universities and roughly 9,703 colleges by 1997-98 — and judges the expansion to have been 'poorly planned': one college established every day and one university every three to four months, but only 6 per cent of the 17-23 age cohort enrolled, well behind Malaysia, Thailand or Singapore.… ### Body # Higher Education at the Cross-Roads of the Twentieth and Twenty-First Centuries *By Dr. (Miss) A. S. DESAI* ## Summary Delivered as the 33rd A. D. Shroff Memorial Lecture under the auspices of the Forum of Free Enterprise in Mumbai on 7 December 1998, Dr. (Miss) A. S. Desai's address frames Indian higher education as a system standing between a twentieth century preoccupied with material resources and a twenty-first century built on knowledge and information. Speaking as Chairperson of the University Grants Commission, she argues that India can ill afford the complacency of believing the country cannot bear the costs of an expanded university system — on the contrary, the country cannot afford NOT to invest in it. The lecture surveys the quantitative growth of the system since Independence — from a handful of universities at 1947 to 228 universities and roughly 9,703 colleges by 1997-98 — and judges the expansion to have been 'poorly planned': one college established every day and one university every three to four months, but only 6 per cent of the 17-23 age cohort enrolled, well behind Malaysia, Thailand or Singapore. Desai then examines access and equity (the under-representation of women, marginal farmers, casual labour, displaced and disabled groups), quality (the way 'massification' at lower levels feeds unequal preparation into higher education, with first-generation learners particularly disadvantaged), and relevance (the need to couple humanities, social sciences, sciences and commerce with field experience, problem-based specialisations, distance-learning credits and ICAR-tied rural courses). The second half of the rendered pages turns to the impact of globalization on university research — WTO, intellectual property regimes, and the need for indigenous R&D — and opens a discussion of funding. Citing the UNESCO World Declaration on Higher Education for the Twenty-First Century (Paris, October 1998) and the Delors report, Desai defends public funding as essential, noting that Plan allocations to the Department of Education have collapsed from 25 per cent in the IVth Plan to 8 per cent in the VIIIth, leaving universities starved for infrastructure, equipment and library materials. ## Key points - India has built the second-largest university system in the world — 228 universities and ~9,703 colleges by 1997-98 — yet only 6 per cent of the 17-23 age group is enrolled in higher education, lagging Malaysia, Thailand and Singapore. - The expansion has been 'poorly planned': one college is established roughly every day and one university every three or four months, with growth disconnected from local need or course-type. - Desai inverts the conventional fiscal anxiety — India cannot afford NOT to invest in higher education if it is to nurture leadership and professionals for the twenty-first century. - Access remains skewed: women are only one-third of enrolment, and marginal farmers, casual labour, migrant families, displaced groups and the disabled are largely excluded from tertiary education. - The 'massification' of school education without quality inputs has produced first-generation learners poorly prepared in language, mathematics and science; the merit debate is meaningless when socio-economic factors determine preparation. - Curricula must move beyond narrow disciplinary specialisation toward 'cafeteria-style' problem-based options, with field-based experience, hands-on training in industry, and mixed distance/conventional credit transfer. - Globalization, WTO, and intellectual property regimes oblige Indian universities to build indigenous R&D and to educate researchers on IPR — 'to publish is to perish unless the intellectual property rights are defended'. - Plan funding for education has declined from 25 per cent in the IVth Plan to 8 per cent in the VIIIth, leaving infrastructure deteriorated; the UNESCO 1998 World Declaration is invoked to defend the essential role of public support. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] HOW TO START AN INDUSTRY URL: https://indianliberals.in/primary-works/how-to-start-an-industry-d-v-desai-august-8-1961/ ### Summary D. V. Desai's pamphlet, based on a lecture delivered under the auspices of the Forum of Free Enterprise in Bombay on 24 May 1961, is a practitioner's walk-through of what it actually takes to set up an industrial unit in Nehruvian India. Desai begins with the Government's bifurcated taxonomy — large versus small, with no recognised middle tier — and traces how the legal definition of a 'small industry' was successively rewritten between 1953 and 1958 to widen the band of firms eligible for assistance. The bulk of the pamphlet then catalogues the lattice of agencies a would-be entrepreneur must thread through: the Development Wing of the Ministry of Commerce and Industry with its seventeen Technical Directors and eighty-five Development Officers, the Controller of Capital Issues, the Reserve Bank's Exchange Control Department (now centralised in the Industrial Policy Section, New Delhi), the Chief Controller of Imports and Exports, and the Licensing Committee drawn from six ministries. For large-scale and foreign-collaboration ventures Desai itemises the six basic conditions the Government imposes on collaboration terms — royalty caps at ten years, no export bans, no compulsory c… ### Body ## Summary D. V. Desai's pamphlet, based on a lecture delivered under the auspices of the Forum of Free Enterprise in Bombay on 24 May 1961, is a practitioner's walk-through of what it actually takes to set up an industrial unit in Nehruvian India. Desai begins with the Government's bifurcated taxonomy — large versus small, with no recognised middle tier — and traces how the legal definition of a 'small industry' was successively rewritten between 1953 and 1958 to widen the band of firms eligible for assistance. The bulk of the pamphlet then catalogues the lattice of agencies a would-be entrepreneur must thread through: the Development Wing of the Ministry of Commerce and Industry with its seventeen Technical Directors and eighty-five Development Officers, the Controller of Capital Issues, the Reserve Bank's Exchange Control Department (now centralised in the Industrial Policy Section, New Delhi), the Chief Controller of Imports and Exports, and the Licensing Committee drawn from six ministries. For large-scale and foreign-collaboration ventures Desai itemises the six basic conditions the Government imposes on collaboration terms — royalty caps at ten years, no export bans, no compulsory component purchase, royalties tied to turnover, effective Indian control, and training of Indian personnel abroad — alongside the three concessions offered in return. For small industries he reconstructs the institutional machinery: the Development Commissioner, the Small Industries Service Institute (originating from a 1953 Ford Foundation diagnosis), the sixteen Institutes with their forty-five Industrial Extension Centres, the Block-level Extension Officer scheme borrowed from the United States, mobile workshops touring villages, and the National Small Industries Corporation that since 1956 has channelled hire-purchase machinery, Government tenders with a fifteen-per-cent price preference, prototype production centres, and Industrial Estates at Okhla, Naini, Baroda, Poona, Rajkot, Surat, Kolhapur and Ahmedabad. Though his tone is largely descriptive, Desai's verdict turns sharp at the close. Citing the State Bank's Pilot Credit Scheme and the Essentiality Certificate process, he argues that the one structural defect — uniquely fatal for small units that lack the Development Wing's patronage — is the Government's indifference to a steady supply of raw materials. The Director of Industries halves the requirement, the C.C.I. & E. or J.C.C.I. trims it further 'like the proverbial old lady with a pair of scissors', and the small industrialist is left buying material at 'sky-high prices in the market' from those very licence holders the system suspects. Desai closes with a free-enterprise coda: technicalities can be taught, but it is initiative and enterprise that finally determine whether an industry succeeds — a closing flourish consistent with the Forum of Free Enterprise's larger argumentative project. ## Key points - The pamphlet originated as a 24 May 1961 Forum of Free Enterprise lecture and was issued as booklet on 8 August 1961, published by M. R. Pai. - Desai documents how the legal definition of 'small industry' was revised twice (mid-1950s and 1958), eventually settling on a block-capital ceiling of Rs. 5 lakhs irrespective of workforce. - He maps the full sanction chain — Development Wing, Controller of Capital Issues, Reserve Bank Exchange Control / Industrial Policy Section, C.C.I. & E., Licensing Committee — and notes sanctions routinely take five months or more, sometimes fifteen. - For foreign collaboration he lists six Government conditions (royalty cap of ten years, no export ban, no compulsory component purchase, turnover-linked royalties, Indian control, training of Indian personnel) and three Government concessions in return. - He credits the Ford Foundation's 1953 observation with catalysing the Small Industries Service Institute network — sixteen Institutes, forty-five Industrial Extension Centres, mobile workshops, and the National Small Industries Corporation (1955). - He cites concrete data: between June 1956 and March 1961 the NSIC processed 4,549 hire-purchase applicants for 17,829 machines worth over Rs. 18 crores; tenders secured for small industries rose from Rs. 62.15 lakhs (1957-58) to Rs. 2,64,81,000 (1959-60). - Desai's central critique is the raw-materials bottleneck: small industries holding an Essentiality Certificate get arbitrary cuts at multiple levels and end up buying the same scarce material at inflated open-market prices. - The closing argument frames initiative and enterprise — not procedural mastery — as the decisive variables, consistent with the Forum of Free Enterprise's classical-liberal programme. --- ## [Primary work] Identity, Markets and Social Welfare URL: https://indianliberals.in/primary-works/identity-markets-and-socia-lwelfare-nandan-nilkekani-november-5-2009/ ### Summary This booklet reproduces the 43rd A. D. Shroff Memorial Lecture, delivered by Nandan Nilekani in Mumbai on 27 October 2009 under the auspices of the Forum of Free Enterprise, with an editorial note by Sunil S. Bhandare and a biographical sketch of A. D. Shroff appended. Speaking as the newly appointed chairman of the Unique Identification Authority of India (UIAI), Nilekani frames the UID project as the missing third leg — alongside mobile telephony and online banking — of a technological platform that can transform welfare delivery for India's poor. He opens by saluting Ardeshir Shroff's early advocacy of competition, liberalisation and 'intellectual capital' in an era dominated by faith in planning, and argues that growth in the 1990s and 2000s, however impressive, has failed to dislodge the structural poverty that Shroff diagnosed. The core of the lecture is a diagnosis of why Indian welfare schemes — from NREGA to the Indira Awaas Yojana to PDS rations — leak so heavily into fraud, duplicate identities and ghost beneficiaries.… ### Body ## Summary This booklet reproduces the 43rd A. D. Shroff Memorial Lecture, delivered by Nandan Nilekani in Mumbai on 27 October 2009 under the auspices of the Forum of Free Enterprise, with an editorial note by Sunil S. Bhandare and a biographical sketch of A. D. Shroff appended. Speaking as the newly appointed chairman of the Unique Identification Authority of India (UIAI), Nilekani frames the UID project as the missing third leg — alongside mobile telephony and online banking — of a technological platform that can transform welfare delivery for India's poor. He opens by saluting Ardeshir Shroff's early advocacy of competition, liberalisation and 'intellectual capital' in an era dominated by faith in planning, and argues that growth in the 1990s and 2000s, however impressive, has failed to dislodge the structural poverty that Shroff diagnosed. The core of the lecture is a diagnosis of why Indian welfare schemes — from NREGA to the Indira Awaas Yojana to PDS rations — leak so heavily into fraud, duplicate identities and ghost beneficiaries. Nilekani contends that the poor are 'chained to the places they work' by their inability to prove who they are, and that India's existing indirect subsidies on electricity, fertiliser and crops both segregate the poor from markets and produce quixotic ecological outcomes such as a 60 per cent fall in Punjab's water table. A biometric, online-verifiable UID number, he argues, would let governments shift to direct cash, conditional-cash and voucher transfers along the lines of programmes in Brazil, Mexico, Pakistan and Bangladesh — eliminating duplication, empowering migrants and women, and freeing utilities such as electricity boards from below-cost tariffs. Nilekani closes by insisting that the UID is only an enabler: its real payoff depends on how governments and public agencies redesign their systems around it, and on a willingness to treat welfare as a 'bridge between markets and our welfare systems' rather than as an alternative to markets. The volume is rounded out by a profile of A. D. Shroff — co-author of the 1944 Bombay Plan, founder of the Forum of Free Enterprise in 1956 — and a closing Eugene Black epigraph that recasts private enterprise as 'an affirmative good'. ## Key points - Nilekani positions himself as an admirer of Ardeshir Shroff's 1940s–50s defence of competition and 'intellectual capital' against the planning consensus. - He argues growth alone cannot mask India's poverty landscape: weak welfare delivery, leakages and the absence of effective solutions persist despite huge budgetary spending. - Poverty is reframed as a deprivation of access — to skills, markets, schools, healthcare and finance — rather than merely of food, clothing or housing. - Indirect subsidies on electricity, fertiliser and crop prices segregate the poor from markets, depress farmer incomes and trigger ecological costs such as Punjab's 60 per cent groundwater decline. - Three technological tools — mobile phones, online banking and the UID — together make a direct-benefit revolution feasible in India for the first time. - Weak identity is the binding constraint: duplicate ration cards, ghost NREGA workers and the Venkatanna case of double-claimed housing schemes illustrate the leakage problem. - A central, online-verifiable biometric UID would enable unrestricted, conditional and restricted-cash transfers modelled on Brazil, Mexico, Pakistan and Bangladesh programmes. - Direct benefits would empower migrants, women and Dalits in particular — Andre Béteille and Chandrabhan Prasad are cited on cash, mobility and feudal village structures. - The UID is presented as 'an enabler', not a panacea: its long-term value depends on how governments and public agencies redesign their systems around it. - The booklet concludes with a Forum-authored biography of A. D. Shroff (Bombay Plan co-author, founder of FFE in 1956) framing the UID agenda within India's classical-liberal lineage. --- ## [Primary work] Implications of Bank Nationalisation URL: https://indianliberals.in/primary-works/implications-of-bank-nationalisation-misc-mar9-1964/ ### Summary Issued by the Bombay-based Forum of Free Enterprise in March 1964, this 28-page booklet bundles three Economic Times articles, two appendices of cautionary quotations and reader letters, and a short editorial introduction to argue against the then-current demand for nationalisation of India's commercial banks. The introduction frames the booklet as an antidote to slogan-driven thinking, insisting that radical changes in the banking economy would 'hurt the much-desired economic growth' and push the country 'towards totalitarianism' unless the public studies the question 'in a rational manner'. The main essay, signed 'Observer', surveys the three standard cases for nationalisation — service-over-profit, mobilisation of deposits for planning, and breaking the monopolistic concentration of credit — and rebuts each in turn, leaning heavily on the underwhelming record of the State Bank of India and the Life Insurance Corporation after their nationalisation in 1955 and 1956.… ### Body ## Summary Issued by the Bombay-based Forum of Free Enterprise in March 1964, this 28-page booklet bundles three Economic Times articles, two appendices of cautionary quotations and reader letters, and a short editorial introduction to argue against the then-current demand for nationalisation of India's commercial banks. The introduction frames the booklet as an antidote to slogan-driven thinking, insisting that radical changes in the banking economy would 'hurt the much-desired economic growth' and push the country 'towards totalitarianism' unless the public studies the question 'in a rational manner'. The main essay, signed 'Observer', surveys the three standard cases for nationalisation — service-over-profit, mobilisation of deposits for planning, and breaking the monopolistic concentration of credit — and rebuts each in turn, leaning heavily on the underwhelming record of the State Bank of India and the Life Insurance Corporation after their nationalisation in 1955 and 1956. A second pair of pieces, signed 'Uday', dismantles the Company Law administration's interlocking-directorships study and the Reserve Bank's bank-shareholding survey, treating both as statistically thin pretexts for a political decision the Finance Minister has already 'vehemently denied' is on the cards. The argumentative centre is that the commercial banking system is already 'extensively regulated' by the Reserve Bank and the Banking Companies Act, that the State Bank has not outperformed the private banks even with privileged access to PL-480 and Reserve Bank balances, and that 'the heavier concentration of economic power' under state ownership 'could only lead to greater delay, intense irritation, official interference and lost opportunities, if not to increased corruption and unhealthy practices'. The Observer article distinguishes carefully between money and wealth — 'Banks can and certainly do create money but they cannot create wealth' — to puncture what it sees as the soft socialist notion that a transfer of ownership is itself an act of creation. Appendix A reproduces second-thoughts on nationalisation from prominent British Labour figures (Gaitskell, Bevan, Attlee, Douglas Jay, Crossman, Norman Dodds, Roy Jenkins, Balogh) and the Webbs, plus Burma's U Nu, presented as a chorus of socialists 'disillusioned with nationalisation'. Appendix B prints two reader letters from Roorkee and Gauhati recounting frustrating encounters with the nationalised State Bank and LIC, offered as anecdotal evidence that public-sector banking would extend, not solve, the consumer's grievance. The booklet closes with the colophonic A. D. Shroff line that 'Free Enterprise was born with man and shall survive as long as man survives.' ## Key points - Forum of Free Enterprise pamphlet (Bombay, 9 March 1964) compiling three Economic Times articles plus two appendices, published five years before bank nationalisation actually occurred in 1969. - Editorial framing positions the booklet as a 'rational' rebuttal to slogan-mongering, warning that nationalisation of banks, foodgrains trade and rice mills would push India 'towards totalitarianism'. - The lead essay by 'Observer' identifies three schools demanding nationalisation — service-over-profit, planning needs, and breaking monopolistic credit concentration — and rebuts each by appealing to the disappointing record of the State Bank of India (nationalised 1955) and the LIC (1956). - Repeated use of distinction between money and wealth: 'Banks can and certainly do create money but they cannot create wealth' is the analytical hinge of the anti-nationalisation case. - Two follow-up pieces by 'Uday' attack the Company Law Administration's interlocking-directorships study (Raj K. Nigam) and the Reserve Bank's call for shareholding data, treating both as inadequately supported political pretexts. - Appendix A assembles cautionary quotations from British Labour figures and the Webbs, plus Burmese socialist Premier U Nu, as evidence that socialists abroad have themselves 'turned away' from nationalisation as a route to socialism. - Appendix B reprints two reader letters about the State Bank of India (Roorkee) and LIC (New Delhi) as consumer-side evidence that public-sector financial services degrade service quality. - The booklet argues that the commercial banks are already 'extensively regulated' by the Reserve Bank and the Banking Companies Act, so further regulatory aims can be achieved without ownership change. --- ## [Primary work] Impact of Taxation on Small & Medium Scale Industries URL: https://indianliberals.in/primary-works/impact-of-taxation-murarji-j-vaidya-jan6-1958/ ### Summary Murarji J. Vaidya's pamphlet reproduces a public lecture delivered under the auspices of the Forum of Free Enterprise in Bombay on April 9, 1958, on the burden of taxation borne by India's small and medium scale industries. Vaidya opens by defining the two categories — small industries (up to 50 workers with power, 100 without, capital up to Rs. 5 lakhs) and medium industries (up to 500 workers, capital around Rs. 5 lakhs) — and notes that government has never offered a formal definition of medium-scale industry, a neglect he had publicly flagged at the 1956 All-India Manufacturers' Organisation conference. He then establishes the sector's economic weight: organised small and medium concerns employ roughly 12 lakh workers, with another 8–10 lakh in unorganised small units, putting total employment at 20–22 lakhs — second only to agriculture, commerce and transport in national income contribution. The core of the argument is a structured indictment of the tax regime.… ### Body ## Summary Murarji J. Vaidya's pamphlet reproduces a public lecture delivered under the auspices of the Forum of Free Enterprise in Bombay on April 9, 1958, on the burden of taxation borne by India's small and medium scale industries. Vaidya opens by defining the two categories — small industries (up to 50 workers with power, 100 without, capital up to Rs. 5 lakhs) and medium industries (up to 500 workers, capital around Rs. 5 lakhs) — and notes that government has never offered a formal definition of medium-scale industry, a neglect he had publicly flagged at the 1956 All-India Manufacturers' Organisation conference. He then establishes the sector's economic weight: organised small and medium concerns employ roughly 12 lakh workers, with another 8–10 lakh in unorganised small units, putting total employment at 20–22 lakhs — second only to agriculture, commerce and transport in national income contribution. The core of the argument is a structured indictment of the tax regime. Excise duties, Vaidya shows, fall on the manufacturer rather than the consumer because small and medium producers lack the marketing organisation to pass costs forward, so price falls when duties rise rather than the other way around. The compounded sales tax (now combined with excise, often levied at the factory gate) compounds the squeeze, while income tax, corporation tax and wealth tax together absorb close to 60 per cent of profits of typical small and medium concerns; once provident fund, employees' state insurance, octroi and municipal taxes are added, 90–95 per cent of profits are taken by central and local authorities, leaving owners 5–10 per cent. Vaidya also attacks the arbitrary distinction between handloom (exempted) and powerloom (heavily taxed), the restrictive lending rules of the State Finance Corporations (only against existing assets, not new capital), and the broader "drying up" of capital and finance for the sector. The closing pages turn to who actually pays. Of 4,54,695 income-tax assessees, 3,87,518 earn below Rs. 15,000 a year — the bulk of revenue, Vaidya argues, comes from the middle class that runs precisely these enterprises. He warns that unless wiser counsels prevail and tax policy is revised at an early date, the Planning Commission's target of employment for 11 million people by 1961 will be unmet, and the government will "have to thank themselves and their policies." The pamphlet carries Forum of Free Enterprise pull-quotes from Eugene Black of the World Bank on the inside-front cover and from A. D. Shroff on the back panel. ## Key points - Defines small-scale industry (≤50 workers with power / ≤100 without; capital up to Rs. 5 lakhs) and proposes a medium-scale definition (up to 500 workers, capital around Rs. 5 lakhs) that Vaidya says the Government of India has never formally adopted. - Estimates total employment in small and medium industries at 20–22 lakh workers — about 12 lakh in organised units plus 8–10 lakh in unorganised small concerns — placing the sector second only to agriculture, commerce and transport in national income. - Argues that excise duties are effectively borne by manufacturers, not consumers, because small and medium producers lack the marketing organisation to push costs forward — prices in fact fall when excise rises. - Documents that income tax, corporation tax and wealth tax together take roughly 60 per cent of profits of typical small and medium concerns, and that all levies combined (including provident fund, ESI, octroi, municipal taxes) absorb 90–95 per cent of profits. - Attacks the policy distinction between exempted handlooms and heavily-taxed powerlooms — and the restriction of powerlooms from weaving sarees and dhotis — as economically incoherent given both are uneconomic instruments of production. - Criticises the State Finance Corporations for lending only against existing assets (at half value) rather than financing new capital formation, deepening the capital squeeze on the sector. - Shows that 3,87,518 of 4,54,695 income-tax assessees earn below Rs. 15,000 per year, meaning the bulk of the central income-tax base is the middle class that runs these enterprises. - Warns that without an early revision of taxation policy the Planning Commission's target of employment for 11 million people by 1961 will be missed. --- ## [Primary work] INDIA AND INTERNAL DEBT TRAP URL: https://indianliberals.in/primary-works/india-and-internal-debt-trap-dr-s-r-k-rao/ ### Summary Delivered as the M.V. Sirur Memorial Lecture in Hubli in February 1999 and published by the Forum of Free Enterprise, this pamphlet by Dr. S.R.K. Rao — a former Principal Adviser to the Reserve Bank of India — diagnoses the late-1990s Indian economy and warns that the Centre is sliding into what he had earlier christened the "Internal Debt Trap". After acknowledging genuine post-Independence achievements in foodgrains, fertilisers, heavy industry, banking spread and infotech, Rao argues that these gains are dwarfed by population pressure, persistent mass poverty, sluggish 1998-99 GDP growth, agricultural stagnation, industrial deceleration and a fragile external sector marked by widening trade and current-account deficits and only a trickle of FDI relative to China. Much of the lecture is a forensic critique of public-sector banking and the financial regulator. Rao tracks Non-Performing Assets at commercial banks past Rs.… ### Body ## Summary Delivered as the M.V. Sirur Memorial Lecture in Hubli in February 1999 and published by the Forum of Free Enterprise, this pamphlet by Dr. S.R.K. Rao — a former Principal Adviser to the Reserve Bank of India — diagnoses the late-1990s Indian economy and warns that the Centre is sliding into what he had earlier christened the "Internal Debt Trap". After acknowledging genuine post-Independence achievements in foodgrains, fertilisers, heavy industry, banking spread and infotech, Rao argues that these gains are dwarfed by population pressure, persistent mass poverty, sluggish 1998-99 GDP growth, agricultural stagnation, industrial deceleration and a fragile external sector marked by widening trade and current-account deficits and only a trickle of FDI relative to China. Much of the lecture is a forensic critique of public-sector banking and the financial regulator. Rao tracks Non-Performing Assets at commercial banks past Rs. 48,000 crore, capital adequacy below Basel norms at a third of nationalised banks, "evergreening" of bad loans at Development Financial Institutions, and a series of scandals — the 1992 securities scam, the Urea Scam, irregularities at IDBI and revoked licences at CRB Global, Cox & King and Bank of Gujarat. He scrutinises the Resurgent India Bonds operation, calculates that repayment burdens of US$8-10 billion could fall on the country, and observes that the dollars raised for infrastructure sit idle while State Bank of India on-lends them at 9.5 per cent to foreign banks that recycle them into 17.24-per-cent consumer-durable credit. The constructive half of the lecture asks what the Reserve Bank should become. Echoing the Narasimham Committee, Rao backs separating supervisory functions, considers a cynical proposal to convert the RBI into a pure Monetary Authority, and recommends a high-powered Banking Commission, parliamentary accountability for the Governor, and Cabinet-rank status for the post. He closes by recalling the speech he gave in 1986 in which he first coined the phrase "Internal Debt Trap" — defining it as the point at which government borrowings can no longer cover even debt-servicing charges — and shows, via the RBI's own 1997-98 Report on Currency and Finance, that the market has stopped absorbing Centre's gross borrowings and the Bank itself is now soaking up nearly 40 per cent through devolvement and private placement. The rendered pages stop mid-discussion of Union Budget expenditure composition. ## Key points - Frames India at the end of the 1990s as standing at a "QUO VADIS" crossroads — real post-Independence gains in foodgrains, banking spread and infotech offset by population growth, near-40 per cent poverty incidence and sluggish 1998-99 GDP estimates of 4.5-5.8 per cent. - Attributes the loss of catch-up opportunities with neighbouring economies to "lack of vision and dynamism" in economic managers and to the socialist obsession with public-sector "commanding heights" that has now made "Disinvestment" the new mantra. - Documents financial-sector distress: NPAs above Rs. 48,000 crore (over 20 per cent of loan assets), one-third of nationalised banks below 10 per cent Capital Adequacy, "evergreening" of bad loans, and serial scams (1992 securities scam, Urea Scam, M.S. Shoe, CRB Global, Cox & King, Bank of Gujarat). - Treats Resurgent India Bonds as a costly gimmick: US$4.15 billion mobilised at 12 per cent, only US$3.5 billion brought into India, Rs. 7,500 crore parked back with foreign banks at 9.5 per cent that on-lent at 17.24 per cent for consumer durables — with potential US$8-10 billion repayment burden on India's external debt. - Argues Foreign Direct Investment of US$3-5 billion is "peanuts" beside China's US$30-40 billion, blaming red tape, policy inconsistency, infrastructure gaps and an untouched "live wire" of labour-law reform. - Defends the Reserve Bank from blanket criticism — "Rajah Vikram had only one 'Vetal'… Reserve Bank has a score of 'Vetals'" — while urging that its supervisory function be hived off (per the Narasimham Committee), its relations with Government be "spelt out clearly", the Governor be given Cabinet-rank status and a permanent Parliamentary Committee oversee its working. - Reprises the author's 1986 coinage "Internal Debt Trap", defining it as the threshold beyond which fresh borrowings cannot cover even debt-servicing charges, and cites the RBI's 1997-98 Report on Currency and Finance showing the Bank itself absorbed 39.9 per cent of Government's gross borrowings via devolvement and private placement — evidence India is already operating fiscal policy inside the trap. --- ## [Primary work] INCOME-TAX BILL PENALISES HONEST TAX-PAYERS URL: https://indianliberals.in/primary-works/income-tax-penalises-honest-taxpayers-n-a-palkhivala-august-7-1961/ ### Summary Based on a lecture delivered under the auspices of the Forum of Free Enterprise in Bombay on 25 July 1961, this booklet is N. A. Palkhivala's clause-by-clause critique of the Income-tax Bill that was then before Parliament. Palkhivala argues that the re-enactment of the 1922 Income-tax Act, far from being used as a golden opportunity to bring "a modicum of justice and fairplay" into Indian tax law, will inject fresh inequities while leaving almost all of the existing ones unredressed. He frames the country as falling into two divisions: those who conceive and administer the laws, and those who timidly suffer them — and the Bill, in his reading, treats the honest taxpayer as the principal target. The bulk of the booklet is a granular walk through more than a dozen specific clauses. Clause 2(47) imports capital-gains tax onto shareholders of amalgamated companies, hitting the middle classes who hold the bulk of corporate share capital. Clause 9 perpetuates a vague doctrine of "business connection" that deters foreign capital just when India is wooing it.… ### Body ## Summary Based on a lecture delivered under the auspices of the Forum of Free Enterprise in Bombay on 25 July 1961, this booklet is N. A. Palkhivala's clause-by-clause critique of the Income-tax Bill that was then before Parliament. Palkhivala argues that the re-enactment of the 1922 Income-tax Act, far from being used as a golden opportunity to bring "a modicum of justice and fairplay" into Indian tax law, will inject fresh inequities while leaving almost all of the existing ones unredressed. He frames the country as falling into two divisions: those who conceive and administer the laws, and those who timidly suffer them — and the Bill, in his reading, treats the honest taxpayer as the principal target. The bulk of the booklet is a granular walk through more than a dozen specific clauses. Clause 2(47) imports capital-gains tax onto shareholders of amalgamated companies, hitting the middle classes who hold the bulk of corporate share capital. Clause 9 perpetuates a vague doctrine of "business connection" that deters foreign capital just when India is wooing it. Clauses 10(10), 11 and 13 hit retirement gratuities for private-sector employees and bona fide charitable trusts, including, in his words, charities created for the poor relatives of a settlor — provisions he calls "a more blatant sin against humanity in the name of a Welfare State." Clauses 62 and 64 tax irrevocable trusts in the hands of the settlor; Clause 67(3) denies legitimate partnership deductions; Clauses 86 and 182 perpetuate the double taxation of registered firms; Clauses 33–34, 87 and 23 strip honest taxpayers of development rebate, life-insurance rebate and full municipal-tax deduction on technical grounds; Clause 104 punishes companies that use current profits to pay past tax arrears or trade liabilities rather than declare dividends; and Clause 179 — described as a "violent departure" from Indian jurisprudence — pierces the corporate veil to make directors, shareholders and even their heirs personally liable for a private company's tax dues. Clause 254 extends the Tribunal's powers in a way that can leave the taxpayer worse off for appealing. Behind every clause, Palkhivala discerns the same impulse: a state that would rather tighten the net around the honest majority than refine its tools for catching the few who are dishonest. He closes by invoking Justice Frankfurter on the citizen's duty in a democracy — and exhorts the reader, as a holder of the office of citizen, to oppose the Bill's unjust provisions through public protest and amendment. ## Key points - The 1961 Income-tax Bill is presented as a missed opportunity to inject justice and fairplay into the income-tax law that has stood since 1922. - Palkhivala's central charge: the Bill is heavily loaded against the taxpayer; honest taxpayers are made worse off merely to widen the net for the dishonest. - Clause 2(47) extends capital-gains tax to shareholders of amalgamated companies and Clause 9 entrenches the vague "business connection" doctrine that deters foreign capital. - Clauses 10(10), 11 and 13 squeeze private-sector retirement gratuities and bona fide charitable trusts — including those benefitting poor relatives of the settlor. - Clauses 62, 64 and 67(3) tax genuine irrevocable trusts in the settlor's hands and deny legitimate partnership deductions, breeding disrespect for the law. - Clauses 86 and 182 perpetuate the double taxation of registered firms, while Clauses 33–34, 87 and 23 deny development rebate, life-insurance rebate and full municipal-tax deduction on technical grounds. - Clause 104 penalises companies that pay past tax arrears or trade liabilities out of current profits instead of declaring dividends. - Clause 179 — singled out as the most dangerous innovation — pierces the corporate veil to make directors, shareholders and even their heirs personally liable for a private company's unpaid tax. --- ## [Primary work] INDIA HAS THE BEST EVER 15 YEARS AHEAD URL: https://indianliberals.in/primary-works/india-has-the-best-15-years-ahead-r-gopalakrishnan-march-5-2010/ ### Summary This Forum of Free Enterprise booklet reproduces an expanded version of R. Gopalakrishnan's Economic Times article of 2 March 2010, written at the time of that year's Union Budget. Gopalakrishnan — then Executive Director of Tata Sons — argues that India is poised for its best ever fifteen-year stretch of growth, framing the country's unusual choice to embrace democracy and constitutional liberalism before capitalism as climbing up the 'down' escalator: confusing in motion, but unambiguously upward. He marshals macro data (a trillion-dollar economy capable of doubling every seven to eight years, an 8 percent growth rate he calls a 'slam dunk', rising per-capita consumption, the cell-phone and two-wheeler revolutions, the doubling of rural non-agricultural employment) to argue that the Hindu rate of growth is now firmly behind India. He then lays out nine accelerators — scale, consumption depth, global connectedness, demographic dividend, productivity gains, the displacement of older corporate giants by new ones like Bharti, Suzlon and Essar Oil, the maturing of coalition politics, and the country's broad religious tolerance and entrepreneurial flair.… ### Body ## Summary This Forum of Free Enterprise booklet reproduces an expanded version of R. Gopalakrishnan's Economic Times article of 2 March 2010, written at the time of that year's Union Budget. Gopalakrishnan — then Executive Director of Tata Sons — argues that India is poised for its best ever fifteen-year stretch of growth, framing the country's unusual choice to embrace democracy and constitutional liberalism before capitalism as climbing up the 'down' escalator: confusing in motion, but unambiguously upward. He marshals macro data (a trillion-dollar economy capable of doubling every seven to eight years, an 8 percent growth rate he calls a 'slam dunk', rising per-capita consumption, the cell-phone and two-wheeler revolutions, the doubling of rural non-agricultural employment) to argue that the Hindu rate of growth is now firmly behind India. He then lays out nine accelerators — scale, consumption depth, global connectedness, demographic dividend, productivity gains, the displacement of older corporate giants by new ones like Bharti, Suzlon and Essar Oil, the maturing of coalition politics, and the country's broad religious tolerance and entrepreneurial flair. Against this he is candid about fault lines — caste politics, agitation for new states, tribal uprisings — but compares India's stage to America's mid-19th-century crises to argue these are growing pains, not collapse. A section on government insists the state should focus on the four 'HELP' priorities — Health, Education, Law (delayed justice) and Pakistan policy — and leave 'direct' economic determinants to the private sector. The 'Entrepreneurs' and 'Greater use of intuition' sections celebrate the transformation of Gurgaon and Sriperumbudur into industrial clusters, invoke David McClelland's theory of achievement orientation, and argue (via an anecdote about a lost Swiss army unit using a map of the Pyrenees) that an enterprising community trusts intuition where rationalists hesitate. Gopalakrishnan closes with four aphorisms on meaning, action, optimism and self-confidence as the secret of entrepreneurship. The booklet is sponsored by the Shailesh Kapadia Memorial Trust, and closes with a short biographical tribute to Shailesh Kapadia (1949–1988), a Bombay chartered accountant and past President of the Bombay Chartered Accountants' Society, alongside the customary Forum of Free Enterprise masthead and an A. D. Shroff epigraph. ## Key points - Frames India as a country that adopted democracy and constitutional liberalism ahead of capitalism — climbing the 'down' escalator, but heading up. - Predicts the next 15 years (to 2025) will be India's best, with the economy doubling every 7–8 years and 8% annual growth treated as a 'slam dunk'. - Declares the 'Hindu rate of growth' dead with the passing of Raj Krishna, citing BCG's Rhodes/Stelter forecast that India, China and Brazil will return to original trend-growth paths. - Lists nine accelerators (scale, consumption, global connectedness, demographic dividend, productivity, churn among top firms, maturing coalition politics, religious tolerance, social pluralism). - Distinguishes 'direct' economic determinants (industry, energy, infrastructure) from 'indirect' ones (HELP: Health, Education, Law, Pakistan policy) and argues government should focus on the latter. - Celebrates Gurgaon and Sriperumbudur as proof of an entrepreneurial 'gene' in Indian society and predicts Sriperumbudur will soon rival Shenzhen in mobile-phone output. - Invokes David McClelland's four conditions for achievement motivation and uses a Swiss-army-in-the-Alps parable to argue intuition and optimism are the true engines of enterprise. - Volume also carries a biographical tribute to Shailesh Kapadia (1949–1988), past President of the Bombay Chartered Accountants' Society, in whose memory the booklet is sponsored. --- ## [Primary work] INDIA NEEDS A FREE MARKET EXCHANGE RATE URL: https://indianliberals.in/primary-works/india-needs-a-free-market-interest-rate-by-milton-friedman-may-9-1963/ ### Summary Milton Friedman, then Professor of Economics at the University of Chicago, argues in this Forum of Free Enterprise leaflet (reproduced from Swarajya of 30 March 1963) that India's pegged, overvalued rupee is the single biggest weakness of its economy. He observes that while domestic prices have risen 30–40 per cent since 1955, prices in the US, UK and Germany have risen at most 10 per cent — yet the official exchange rate has not moved. The result is that imports look artificially cheap, exports look artificially expensive, and the government has been forced into four increasingly unsustainable strategies for filling the gap: drawing down foreign reserves, taking on foreign aid and loans, imposing direct controls on imports and exports, and tolerating a swelling black market. Friedman dwells longest on the third recourse — direct controls — because it is the lever on which Indian policy has come to lean hardest.… ### Body ## Summary Milton Friedman, then Professor of Economics at the University of Chicago, argues in this Forum of Free Enterprise leaflet (reproduced from Swarajya of 30 March 1963) that India's pegged, overvalued rupee is the single biggest weakness of its economy. He observes that while domestic prices have risen 30–40 per cent since 1955, prices in the US, UK and Germany have risen at most 10 per cent — yet the official exchange rate has not moved. The result is that imports look artificially cheap, exports look artificially expensive, and the government has been forced into four increasingly unsustainable strategies for filling the gap: drawing down foreign reserves, taking on foreign aid and loans, imposing direct controls on imports and exports, and tolerating a swelling black market. Friedman dwells longest on the third recourse — direct controls — because it is the lever on which Indian policy has come to lean hardest. He argues that there is no satisfactory administrative criterion for deciding which imports are 'essential', that no central authority can know which domestic substitutes are worth producing or at what cost, and that quantitative licensing inevitably breeds corruption, windfall profits for licence-holders, and a corrosion of public trust in government. Exchange control has not stimulated exports either; they have stagnated or fallen because importing inputs through the official channel is uneconomic. His prescription is to stop pegging the rupee and let it float in a free market, with day-to-day rates set by private transactions. A floating rate would supply an automatic adjustment mechanism, make exchange crises impossible, and allow the complete elimination of import quotas, tariffs, subsidies and other interference with international trade. Friedman closes with a Hayekian appeal to dispersed knowledge: a market rate would mobilise the specialised information of tens of millions of Indians, providing 'a far more subtle and efficient adjustment than blunt measures of a few central planners'. A one-shot fixed devaluation, he concedes, would be an improvement, but a continuously market-clearing rate is what India actually needs. ## Key points - Friedman identifies the artificial, overvalued rupee as the 'Achilles heel' of India's economy, citing a 30–40 per cent rise in Indian prices since 1955 against at most 10 per cent in the US, UK and Germany. - He enumerates four ways India has met balance-of-payments pressure: running down reserves, taking foreign aid and loans, direct controls on imports and exports, and an expanding black market. - Direct controls, he argues, lack any rational criterion for deciding 'essential' imports and force planners to ration foreign exchange without the information needed to do so intelligently. - Import licensing breeds corruption, windfall profits, inequality of income and wealth, and erodes public trust in government. - Exchange control has failed even on its own terms — exports have stagnated or fallen because producers cannot import inputs economically at the official rate. - A one-off devaluation to a more realistic peg (he floats figures like 7 rupees to the dollar or 20 to the pound) would be a partial fix but invites renewed crisis as inflation continues. - The first-best policy is a freely floating rupee whose rate is set day-to-day by private transactions, supplying an automatic adjustment mechanism and rendering import quotas, tariffs and subsidies unnecessary. - A market rate would harness the dispersed specialised knowledge of millions of Indians — a Hayekian argument that planners, however able, cannot collectively match the aggregate knowledge of the population. --- ## [Primary work] India Needs A Practical Economic Policy URL: https://indianliberals.in/primary-works/india-needs-a-practical-economic-policy-dr-a-n-agarwala-may-10-1965/ ### Summary Dr. A. N. Agarwala's presidential address to the XVIII session of the Indian Commerce Conference (Poona, January 1965), issued as a Forum of Free Enterprise booklet on 10 May 1965, diagnoses a worsening food and price crisis and argues that India needs a pragmatic — not doctrinaire — economic policy. Agarwala opens with hard numbers: a foodgrain production shortage of 8–14 million tons depending on the standard used, a market shortage projected at 14–20 million tons in 1964-65, an internal rupee value already down to 17 paise, and roughly 7% annual inflation since the start of the Second Plan. He insists that imports cannot close the gap, that government expenditure must be cut by about 10%, and that the Defence Budget be separated from the regular Revenue and Capital Budgets so that defence does not cannibalise development. Agarwala then aligns himself with Prime Minister Lal Bahadur Shastri's New Economic Policy — welfare of the common man, manageable plan size, urgency of food output, quick-yielding projects — and frames a broader thesis: the inter-war certainties of doctrinaire Capitalism vs Socialism have dissolved.… ### Body ## Summary Dr. A. N. Agarwala's presidential address to the XVIII session of the Indian Commerce Conference (Poona, January 1965), issued as a Forum of Free Enterprise booklet on 10 May 1965, diagnoses a worsening food and price crisis and argues that India needs a pragmatic — not doctrinaire — economic policy. Agarwala opens with hard numbers: a foodgrain production shortage of 8–14 million tons depending on the standard used, a market shortage projected at 14–20 million tons in 1964-65, an internal rupee value already down to 17 paise, and roughly 7% annual inflation since the start of the Second Plan. He insists that imports cannot close the gap, that government expenditure must be cut by about 10%, and that the Defence Budget be separated from the regular Revenue and Capital Budgets so that defence does not cannibalise development. Agarwala then aligns himself with Prime Minister Lal Bahadur Shastri's New Economic Policy — welfare of the common man, manageable plan size, urgency of food output, quick-yielding projects — and frames a broader thesis: the inter-war certainties of doctrinaire Capitalism vs Socialism have dissolved. The five leading capitalist economies are booming, communist countries are quietly adopting profit incentives and marketing techniques, and the result is a converging "Neo-Capitalism" of private enterprise, selective state intervention and welfare functions. Citing Schumpeter, Fortune, J. K. Galbraith, Douglas McGregor, Douglas Jay, John P. Lewis and S. S. Khera, he argues that India's planners suffer less from a shortage of ideas than from a shortage of "implementation input" and a national habit of substituting words and slogans for action. The booklet's analytical core is a value-free test for the public-vs-private question: operational efficiency, measured as lower cost per unit. By this yardstick Agarwala finds the public sector wanting. The Central Government Audit Report for 1964 covering 46 Government companies showed only 11 declared a dividend (Rs 1.54 crores, 6.4% of their own paid-up capital but 0.2% of the total), interest-holidays and loan moratoria of hundreds of crores, and an estimated social cost of Rs 211 crores in 1962-63 — about Rs 4 per capita of foregone national income. He rejects the conventional monopoly framing too: India's problem is not single-seller monopoly but a "dominant firms situation" largely engineered by licensing, foreign-exchange allocation and technological scale, and "to invoke the whole ethics of monopoly to meet a simple situation is like using a sledge hammer to break a nut." Agarwala closes by insisting that, whatever ideological label is attached, the operative criterion must be efficiency and cost reduction — both to protect consumers and to widen export markets — and that many current policies would look very different if those goals were taken seriously. He disclaims any doctrinaire bias for private ownership, allowing that if public ownership could rapidly relieve poverty he would back it; but if private enterprise is to continue, it must be brought under social discipline rather than driven away by hostility to bigness. ## Key points - Quantifies India's 1963-64 foodgrain crisis as an 8–14 million ton production shortage and a 14–20 million ton projected market shortage in 1964-65, with imports capped near 6 million tons by world supply and Indian port capacity. - Documents rupee depreciation to 17 paise and roughly 7% annual inflation since the Second Plan, calling anything beyond 4% "monetary recklessness" and citing W. Arthur Lewis on 3–4% as an upper safe limit for developing economies. - Demands the Defence Budget be separated from Revenue and Capital Budgets and government expenditure cut by ~10% to prevent defence from eroding development. - Endorses PM Lal Bahadur Shastri's New Economic Policy and its emphasis on the common man's welfare, a manageable Fourth Plan, quick-yielding projects, and better implementation machinery. - Argues capitalism and communism are converging into a pragmatic "Neo-Capitalism" — private enterprise plus social welfare and selective state intervention — and that doctrinaire ideology is being displaced by technology-driven, measurable gains. - Proposes operational efficiency (cost per unit) as a value-free criterion for choosing between public and private ownership, treating inefficiency as no less anti-national than the profit motive is alleged to be. - Marshalls Audit Report data — only 11 of 46 Government companies declared dividends in 1962-63, with interest holidays on Rs 357 crores of Hindustan Steel loans and a social cost of roughly Rs 211 crores — to argue that India is paying a heavy ideological price for public ownership. - Reframes the monopoly debate as a "dominant firms situation" largely produced by government licensing, raw-material rationing and foreign-exchange allocation, and warns against treating it with anti-monopoly punitive machinery. --- ## [Primary work] India Needs Urgently a Communication Revolution URL: https://indianliberals.in/primary-works/india-needs-urgently-a-communication-revolution-n-t-taskar-february-1983/ ### Summary Marking the United Nations' 1983 World Communication Year, N. T. Taskar — a former Technical Director of the Department of Electronics with three decades inside Indian P&T — argues that India's poverty-removal agenda cannot succeed without a national communication revolution, and that the chief obstacle to that revolution is the Government of India itself. He opens with a brisk historical sketch: the British built telegraph and telephone networks to serve administration, defence and commerce, and (a point he stresses) deliberately left big-city telephone provision to the private sector for nearly sixty years, with Bombay, Karachi and Madras enjoying automatic exchanges while Calcutta languished on manual service until 1943. Against this background Taskar surveys the post-war world telecommunications scene — the transistor of 1948, computers shrinking by a factor of a thousand, electronic mail, 2.8 million personal computers sold in the United States in 1982 — and contrasts it with India, where 80% of the world's telephones sit in North America and Europe and the third world is being left further behind.… ### Body ## Summary Marking the United Nations' 1983 World Communication Year, N. T. Taskar — a former Technical Director of the Department of Electronics with three decades inside Indian P&T — argues that India's poverty-removal agenda cannot succeed without a national communication revolution, and that the chief obstacle to that revolution is the Government of India itself. He opens with a brisk historical sketch: the British built telegraph and telephone networks to serve administration, defence and commerce, and (a point he stresses) deliberately left big-city telephone provision to the private sector for nearly sixty years, with Bombay, Karachi and Madras enjoying automatic exchanges while Calcutta languished on manual service until 1943. Against this background Taskar surveys the post-war world telecommunications scene — the transistor of 1948, computers shrinking by a factor of a thousand, electronic mail, 2.8 million personal computers sold in the United States in 1982 — and contrasts it with India, where 80% of the world's telephones sit in North America and Europe and the third world is being left further behind. He then walks sector by sector through the cost of the Government's three-decade monopoly on both the provision of communication services and the manufacture of communication equipment: banking (quoting bank economist Dr. K. S. Krishnaswami at length on the productivity gap with Tokyo, Singapore, Bahrain, London and New York), industry (industrial estates in Nasik, Aurangabad and Roha forced to run their own courier services because P&T links were unreliable), the Indian Telephone Industries' own factories at Naini and Rae Bareli being effectively cut off from their Bangalore head office, the power sector and State Electricity Boards starved of communication equipment, and Indian Railways forced to abandon centralised traffic control because P&T could not deliver. He invokes Arya Chanakya's principle of "Artha Eva Pradhan" and points to France's 1960s rural telecom investments and the U.S. New Deal as models India ignored. The final sections give the statistics of post-Independence growth — telephone exchanges from 300 to nearly 8,000, telephones from 1 lakh to 30 lakh, long-distance circuits from 1,500 to over 70,000 — only to insist that quantitative expansion has not produced reliable service, because P&T after the 1956 Industrial Policy Resolution became "impervious to any constructive criticism" and zealously guarded its monopoly. Taskar warns that, unlike the United States breaking up the Bell System, India faces the harder task of breaking a monopoly held by the Government itself, and that failure to do so will not only stunt the economy but generate conditions "very favourable to a violent upheaval." His recommendations (cut off at PDF page 20) begin by reframing the choice as one between communication-led peaceful evolution toward an egalitarian society and a simmering volcano of public discontent. ## Key points - Frames the 1983 UN World Communication Year as a moment for India to introspect on why post-Independence telecom expansion has not delivered reliable service. - Reads British-era policy as a case for plural provision: telephone service in Bombay, Karachi and Madras was left to the private sector for nearly 60 years with automatic exchanges, while Government-run Calcutta languished on manual service until 1943. - Identifies the Government's three-decade total monopoly over both the provision of communication facilities and the manufacture of communication equipment as the root structural problem — 'In no advanced country of the world this is so.' - Walks through sector-by-sector damage: banking productivity (citing Dr. K. S. Krishnaswami), industrial estates in Nasik/Aurangabad/Roha needing private courier services, Indian Telephone Industries' own factories at Naini and Rae Bareli being uncontactable, power sector starved of equipment, and Railways forced to abandon centralised traffic control. - Marshals comparative evidence: 80% of the world's telephones in North America and Europe; computer size down by a factor of 1,000 and reliability up by a factor of 1,000 since the early 1950s; France's 1960s rural telecom push and the U.S. New Deal as models India ignored. - Quotes statistics of post-Independence growth (exchanges 300 → 8,000; telephones 1 lakh → 30 lakh; long-distance circuits 1,500 → 70,000) only to argue that quantity has not produced quality or reliability. - Reads the 1956 Industrial Policy Resolution and P&T's subsequent zealotry as the moment Indian telecom became impervious to criticism, and contrasts this with the U.S. administration's decision to break up the Bell monopoly. - Closes with a political warning: continued monopoly will produce conditions 'very favourable to a violent upheaval' and only a communication revolution can underwrite a peaceful transition to an egalitarian society. --- ## [Primary work] INDIA REQUIRES INDICATIVE PLANNING URL: https://indianliberals.in/primary-works/india-requires-indicative-planning-dharamsey-m-khatau-april-11-1967/ ### Summary Drawn from his inaugural address to the 59th Annual General Meeting of the Indian Merchants' Chamber on 10 February 1967, Dharamsey M. Khatau's pamphlet argues that India's drift toward 'state capitalism and Statism' has produced costly, wasteful, and politically dangerous results. Reviewing the first three Plans, he notes that targets were missed, unemployment rose across educated, agricultural, and non-agricultural classes, and the strategy's capital-intensive, heavy-industry bias starved agriculture and rural development. The Fourth Plan, on inadequate data, projects only 9 to 10 million additional jobs against a backlog of 15 to 18 million disguised unemployed and an incremental labour force of 23 to 25 million — a shortfall he treats as a fundamental indictment of comprehensive planning. Khatau ties planning failure to the concentration of economic power in political and bureaucratic hands, citing the Planning Commission's own review that the Public Sector earned only 1.5% on Rs. 2,037 crores invested across 34 undertakings, and quoting Dr. Radhakrishnan's Republic Day broadcast on 'widespread incompetence and gross mismanagement'.… ### Body ## Summary Drawn from his inaugural address to the 59th Annual General Meeting of the Indian Merchants' Chamber on 10 February 1967, Dharamsey M. Khatau's pamphlet argues that India's drift toward 'state capitalism and Statism' has produced costly, wasteful, and politically dangerous results. Reviewing the first three Plans, he notes that targets were missed, unemployment rose across educated, agricultural, and non-agricultural classes, and the strategy's capital-intensive, heavy-industry bias starved agriculture and rural development. The Fourth Plan, on inadequate data, projects only 9 to 10 million additional jobs against a backlog of 15 to 18 million disguised unemployed and an incremental labour force of 23 to 25 million — a shortfall he treats as a fundamental indictment of comprehensive planning. Khatau ties planning failure to the concentration of economic power in political and bureaucratic hands, citing the Planning Commission's own review that the Public Sector earned only 1.5% on Rs. 2,037 crores invested across 34 undertakings, and quoting Dr. Radhakrishnan's Republic Day broadcast on 'widespread incompetence and gross mismanagement'. He clarifies that he opposes neither planning nor a mixed economy; he opposes lop-sided, ideologically pre-conceived planning. Pointing to France's success with 'indicative planning' — coordinative, market-respecting, free of doctrinaire rigidity — he urges India to adopt a similar pragmatic system that uses fiscal and monetary tools rather than administrative fiats, relies on cooperative planning with industry and trade unions, and frees the Private Sector from discriminatory restrictions. The closing section is a defence of private enterprise as 'an affirmative goad' (echoing Eugene Black) and a call to industry to abandon sheltered-market complacency, raise productivity, and trust that advanced techniques and modern machinery can expand rather than shrink employment. Khatau's frame throughout is Gandhian as well as liberal: he invokes Gandhi's warning that doctrinaire schemes which minimise exploitation can also 'destroy individuality, which lies at the root of all progress', and ends with confidence that the Private Sector, given the opportunity, 'will deliver the goods'. ## Key points - Diagnoses post-devaluation drift toward 'state capitalism and Statism' as costly and wasteful, and calls for pragmatic reorientation of basic planning assumptions. - Treats employment as the decisive test of planning: capital-intensive heavy-industry bias has failed to dent unemployment, with the former Minister for Planning conceding that the agricultural population's share could shrink only from 70% to 60% over fifteen years. - Cites Fourth Plan arithmetic — 9 to 10 million new jobs against 15 to 18 million disguised unemployed plus 23 to 25 million incremental labour — to argue that current strategy cannot absorb the backlog. - Attacks Public Sector performance using the Planning Commission's own figures: a 1.5% return on Rs. 2,037 crores across 34 undertakings, bureaucratic mismanagement, and a doctrinaire 'commanding heights' approach that has crowded out private effort. - Quotes Gandhi on the danger of suppressing individuality 'at the root of all progress' and Dr. Radhakrishnan's Republic Day rebuke of incompetence and mismanagement of national resources. - Distinguishes 'indicative' (French-style, cooperative, market-respecting) planning from India's 'comprehensive' planning, advocating annual and mid-term plan appraisal, fiscal-monetary tools, and joint formulation with industry and trade unions. - Calls on the Private Sector to shed sheltered-market complacency, lift productivity, and treat automation and modern machinery as employment-expanding rather than labour-displacing. - Frames private enterprise positively — 'not as a necessary evil, but as an affirmative goad' — and closes with confidence that given the opportunity it 'will deliver the goods'. --- ## [Primary work] India: Seeing the Future in its Past URL: https://indianliberals.in/primary-works/india-seeing-the-future-in-its-past-dr-raghumm-g-rajan-february-15-2006/ ### Summary Delivered on 20 January 2006 in Mumbai as part of the Forum of Free Enterprise's Golden Jubilee series, this lecture by IMF Chief Economist Raghuram G. Rajan asks whether the 'buzz' surrounding India's growth at mid-decade is justified, and reads the answer back through the country's post-Independence policy history. Rajan opens by saluting A. D. Shroff and Nani Palkhivala as lonely voices of free enterprise during decades when Indian regulation, in his view, transferred wealth 'from the honest rich to the dishonest rich,' and positions himself, despite his international bureaucratic post, as a sympathetic visitor to that classical-liberal lineage. The booklet's front matter — M. R. Shroff's note on the Forum's fifty-year history and Sunil S.… ### Body ## Summary Delivered on 20 January 2006 in Mumbai as part of the Forum of Free Enterprise's Golden Jubilee series, this lecture by IMF Chief Economist Raghuram G. Rajan asks whether the 'buzz' surrounding India's growth at mid-decade is justified, and reads the answer back through the country's post-Independence policy history. Rajan opens by saluting A. D. Shroff and Nani Palkhivala as lonely voices of free enterprise during decades when Indian regulation, in his view, transferred wealth 'from the honest rich to the dishonest rich,' and positions himself, despite his international bureaucratic post, as a sympathetic visitor to that classical-liberal lineage. The booklet's front matter — M. R. Shroff's note on the Forum's fifty-year history and Sunil S. Bhandare's editor's preface — frames the lecture as a critique of planning that nonetheless credits the post-1980 'constrained adaptation' for India's diversified industrial base. The analytical core of the lecture is Rajan's reading of pre-1980 policy as the source of three durable distortions: a nurturing-then-suffocating protectionism that bred infant industries which never grew up (the Ambassador car as a 'version of the Oxford Morris which remained virtually unchanged over 40 years'); a 'commanding heights' allocation of scarce capital to inefficient public-sector heavy industry; and small-scale and labour-law regimes that, while branded pro-worker, blocked the formation of large labour-intensive firms and therefore the very jobs they claimed to protect. He insists that 'despite all the rhetoric about socialism, government policies were of the few, by the few, and for the few,' arguing — only half-charitably — that this may have been intentional, cloaked in 'smoke and mirrors.' India's silver lining, he notes, was an unintentionally diversified manufacturing base and Nehru's investment in higher education and science, which positioned the country to seize the liberalisation openings under Indira and Rajiv Gandhi and the deeper 1991 reforms. Turning to the present, Rajan describes a self-reinforcing dynamic in which capability-intensive sectors (autos, telecom, finance, software, pharmaceuticals) and reform-minded states (Delhi, Gujarat, Karnataka, Maharashtra, Tamil Nadu) skip the labour-intensive phase typical of East Asian catch-up. He warns that the 'laggard states' will not reform on their own, that urban services (he singles out Mumbai's ten-hours-a-day water against Paris's 24×7) are deteriorating, and that the 'license-permit raj' survives in higher education — India needs '50 IITs, not 7,' real fees with scholarships, and the entry of private and foreign institutions. Other prescriptions: a cautious capital-account opening, building Mumbai into a world-class financial centre, fiscal discipline so the deficit stops crowding out private investment, transparent and incentive-based rather than coercive government, and policies that enlist citizens' self-interest rather than fighting it. Rajan closes by treating BRIC-style straight-line extrapolations with scepticism and offering 'churning' — the devas-and-asuras myth of the ocean of milk — as the defining metaphor for India: entrenched interests displaced, jobs created and destroyed, Bharat becoming India and India becoming Bharat again, with the amrita of sustained 8 percent growth available only after more hard work. The Eugene Black epigraph on the rear inside cover — 'People must come to accept private enterprise not as a necessary evil, but as an affirmative good' — distils the booklet's polemical purpose. ## Key points - Rajan situates himself as an IMF bureaucrat speaking 'from the same forum as these stalwarts,' explicitly honouring A. D. Shroff and Nani Palkhivala as lonely defenders of free enterprise in the 1950s-70s. - He reframes India's pre-1980 policy regime as 'constrained adaptation' — protective barriers raised to nurture infants that never grew up, with the Ambassador car as the canonical example of an 'infant' frozen for 40 years. - The 'commanding heights' strategy directed scarce capital to inefficient public-sector heavy industry while small-scale reservations and rigid labour laws blocked the rise of large labour-intensive firms, throttling formal job creation. - Rajan argues that India's post-1980 growth was unintentionally well-positioned by a diversified manufacturing base and by Nehruvian investments in higher education, science and public-sector technology (Bharat Electronics, CMC, ECIL, State Bank of India). - Pre-1991 liberalisation under Indira and Rajiv Gandhi, plus political decentralisation after the decline of Congress dominance, shifted competitive pressure onto state governments and produced uneven but real reform across Delhi, Gujarat, Karnataka, Maharashtra and Tamil Nadu. - India is skipping the labour-intensive phase of East Asian growth, advancing instead in capability- and skill-intensive sectors (autos, telecom, pharma, software, finance) — creating both a vibrant capital market and a sharp labour-market bifurcation between dynamic and laggard states. - Policy prescriptions: cautious capital-account opening and a Mumbai financial centre, fifty IITs with real fees and private/foreign entry, urban infrastructure for migrant labour, incentives (not bans) for formal job creation in laggard states, and fiscal discipline so the public deficit stops crowding out private capital. - The concluding metaphor of 'churning' (the devas-asuras myth) frames sustained 8 percent growth as available only after further dislocation of entrenched interests and warns against straight-line extrapolations like the Goldman Sachs BRIC report. --- ## [Primary work] INDIAN ADMINISTRATION URL: https://indianliberals.in/primary-works/indian-administartion-v-p-menon-jun5-1958/ ### Summary V. P. Menon's pamphlet, based on his 5 August 1958 Forum of Free Enterprise lecture in Bombay, surveys two centuries of Indian administration to argue that the post-Independence machinery has slid into disorganisation. He sketches the East India Company's chaotic early rule, the slow rationalisation through Pitt's Act of 1784, Warren Hastings's system-building, the Crown takeover in 1857, and the steady professionalisation of the Indian Civil Service that, by 1914, made Indian government 'a machine that stood up, in fact, through two World Wars.' That inherited efficiency, he says, has been squandered. The core indictment is administrative bloat and political interference.… ### Body ## Summary V. P. Menon's pamphlet, based on his 5 August 1958 Forum of Free Enterprise lecture in Bombay, surveys two centuries of Indian administration to argue that the post-Independence machinery has slid into disorganisation. He sketches the East India Company's chaotic early rule, the slow rationalisation through Pitt's Act of 1784, Warren Hastings's system-building, the Crown takeover in 1857, and the steady professionalisation of the Indian Civil Service that, by 1914, made Indian government 'a machine that stood up, in fact, through two World Wars.' That inherited efficiency, he says, has been squandered. The core indictment is administrative bloat and political interference. Menon catalogues the explosion of secretariat positions, the loss of direct access between minister and senior officer, and a 'Planning era' in which schemes routinely exceed the State's capacity 'to control, regulate, and bear.' He warns that the linguistic reorganisation of States has 'robbed us of our national outlook,' that District Officers have become 'trigger happy,' and that politicians demanding prosecution of 'corrupt' officers are themselves often the biggest abusers of public funds. Menon contrasts this with the brief Patel era, when Sardar Vallabhbhai Patel — alone among the new ministers — refused to interfere with the services, treated officers fairly, and restored their esprit de corps. After Patel's death the Centre filled the vacuum left by weak Chief Ministers, Congress autonomy 'became a dead letter,' and the States were reduced to agents of Delhi. He calls for a high-powered Commission to reorganise administration at both Centre and provinces, and for decentralisation grounded in a non-partisan ideal of good governance. The pamphlet closes with a humanist appeal: officers will respond to encouragement, India is not lacking in human material, but in the end 'the country will not be saved by its institutions, if it is not saved by its own people.' The booklet carries marginalia quotes from Eugene Black and A. D. Shroff, signalling the Forum's classical-liberal framing of Menon's bureaucratic critique. ## Key points - Traces the British administrative arc from the Company's 'quite disastrous' early essays, through Pitt's Act of 1784, Warren Hastings's system-building, and the 1857 Crown takeover, to the highly professional pre-1914 ICS that Menon says reached 'its highest efficiency, judged by the standard then prevailing.' - Argues that the political class after Independence inherited a smoothly running machine but degraded it by inflating the Secretariat, multiplying ministers and deputies, and demanding officials report to them by telephone — making bureaucracy 'greatly increased; that officials are more bureaucratic than they were' — while planning schemes outran administrative capacity. - Singles out Sardar Patel as the exception: he refused to interfere in the services, gave officers fair treatment, dispelled fears after Partition, and re-instilled esprit de corps; after his death the Cabinet became collectively responsible 'only in name' and the Prime Minister effectively ran government. - Diagnoses linguistic State reorganisation as having 'robbed us of our national outlook,' and warns that Congress losing power in provinces (e.g., Kerala) has not produced provincial autonomy but reduced States to agents of the Centre. - Attacks the politicisation of anti-corruption: ministers publicly accuse officers while themselves indulging in 'non-bailable, warrant case of mis-appropriation of public funds,' and election costs 'are becoming prohibitive' so that 'good candidates with limited means have no chance to fight elections.' - Calls for a high-powered Commission to reorganise administration at the Centre and in the provinces, with a Central Commission and provincial committees, framed around the principle that 'the Centre must be strong but consistent with that there should be de-centralisation at all levels.' - Closes with a humanist coda — officers respond to good treatment, India has 'great opportunities' and 'a history and a tradition,' but 'the country will not be saved by its institutions, if it is not saved by its own people.' --- ## [Primary work] INDIAN BANKING IN INTERNATIONAL PERSPECTIVE URL: https://indianliberals.in/primary-works/indian-banking-in-international-perspective-dr-y-v-reddy-october-31-2002/ ### Summary Delivered on 25 October 2002 as the A. D. Shroff Memorial Public Lecture in Mumbai (sponsored by Bank of India), this booklet collects Y. V. Reddy's address "Indian Banking in International Perspective." Reddy — then Executive Director at the IMF and a former Deputy Governor of the Reserve Bank of India — frames his lecture as a tribute to Shroff's classical-liberal advocacy through the Forum of Free Enterprise, recalling that his own student generation first encountered free-enterprise ideas in contrast with the socialism-oriented declarations of official Indian policy. He opens with three episodes that link Shroff to international finance: Shroff's role (with Sir R. K. Shanmukham Chetty) in the IMF quota negotiations; his presence on the Indian delegation that christened the IBRD; and his architecture of the Bombay Plan. The first half of the lecture is a retrospective traversal of every prior A. D. Shroff Memorial Lecture on banking, from H. V. R. Iengar's 1967 inaugural through B. N. Adarkar (1971), R. K. Talwar (1974), J. N. Saxena (1977), R. C. Shah (1983), N. N. Pai, N. Vaghul (1989), M. Narasimham (1993) and S. S. Tarapore.… ### Body ## Summary Delivered on 25 October 2002 as the A. D. Shroff Memorial Public Lecture in Mumbai (sponsored by Bank of India), this booklet collects Y. V. Reddy's address "Indian Banking in International Perspective." Reddy — then Executive Director at the IMF and a former Deputy Governor of the Reserve Bank of India — frames his lecture as a tribute to Shroff's classical-liberal advocacy through the Forum of Free Enterprise, recalling that his own student generation first encountered free-enterprise ideas in contrast with the socialism-oriented declarations of official Indian policy. He opens with three episodes that link Shroff to international finance: Shroff's role (with Sir R. K. Shanmukham Chetty) in the IMF quota negotiations; his presence on the Indian delegation that christened the IBRD; and his architecture of the Bombay Plan. The first half of the lecture is a retrospective traversal of every prior A. D. Shroff Memorial Lecture on banking, from H. V. R. Iengar's 1967 inaugural through B. N. Adarkar (1971), R. K. Talwar (1974), J. N. Saxena (1977), R. C. Shah (1983), N. N. Pai, N. Vaghul (1989), M. Narasimham (1993) and S. S. Tarapore. Reddy reads the series as a chronicle of recurring concerns: public confidence in banks, credit flow to small and unorganised sectors, the politics of nationalisation, the failure of the cooperative movement, quality and professionalism in service, and the unfinished agenda of reform that Narasimham named. He notes that the four decades after independence first stabilised and quantitatively expanded banking, but that the 1980s revealed serious qualitative pitfalls in public-sector banking — issues whose remediation, though begun in the 1990s, remains incomplete. The second half pivots to the lecture's central argument: that by 2002 banking can no longer be treated as a domestic matter. Reddy enumerates six pressures globalising Indian banking — the entry of foreign banks under WTO commitments, foreign-owned non-bank financial companies, cross-border payment firms such as Western Union, multinationals' captive banking ties, the multinational ambitions of Indian companies, and the loosening of public-sector banks' tie to large business as disinvestment progresses. He then turns to the multilateral architecture: BIS-led Basel norms (whose adoption Reddy treats as effectively non-voluntary in broad direction), IMF surveillance now extending to banking-system health, World Bank involvement in financial-sector reform, and G20 attention. The rendered chunk closes mid-discussion of international standards and codes, where Reddy defends India's stand that such standards be adopted at each country's chosen pace and on a strictly voluntary basis. ## Key points - Reddy frames the lecture as both a personal tribute to A. D. Shroff and a continuation of the Forum of Free Enterprise's classical-liberal pedagogy against early-independence socialism. - Three Shroff vignettes — IMF quota negotiations, the naming of the IBRD, and the Bombay Plan — anchor the claim that national upliftment requires active engagement with multilateral bodies. - A chronological reading of prior Shroff Memorial Lectures (Iengar 1967 through Tarapore) is used as a proxy history of post-independence Indian banking concerns. - Reddy identifies a four-decade arc: stabilisation and public confidence (first two decades), nationalisation and quantitative expansion (third decade), recognition of qualitative pitfalls (fourth decade), and clear-cut but unfinished reform (1990s). - The lecture's pivot: as of 2002 banking is no longer exclusively domestic — competition is global, regulatory codes are converging, and ignoring the international dimension while opening the economy is dangerous. - Six concrete globalising pressures: foreign bank entry under WTO, foreign non-bank financial companies, cross-border payment firms, multinationals' captive banking, Indian companies going multinational, and disinvestment loosening PSU-bank ties to large business. - Multilateral architecture matters: BIS/Basel norms, IMF surveillance of banking-system health, World Bank financial-sector engagement, and G20 attention — even where adoption is nominally voluntary. - Reddy defends India's position that international standards should be adopted at each country's chosen pace and only on a voluntary basis, while granting their relevance to domestic reform. --- ## [Primary work] Indian Banks and The Prevention of Corruption Act : Freedom and Discipline URL: https://indianliberals.in/primary-works/indian-banks-and-the-prevention-of-corruption-act-freedom-and-discipline-ar-ashima-goyal/ ### Summary This Forum of Free Enterprise booklet reproduces Dr. Ashima Goyal's lecture at the Fourteenth M. R. Pai Memorial Award Function (Mumbai, 10 September 2018), preceded by an editorial introduction by Sunil S. Bhandare. Goyal — Professor at IGIDR and a member of the Prime Minister's Economic Advisory Council — uses the occasion to ask how Indian banks can be properly disciplined without being criminalised, and reads the 2018 amendment to the Prevention of Corruption Act against that test. The heart of her argument is institutional hysteresis. Independent India layered centralised planning onto a federal constitutional structure, multiplying agencies without clean exits, so 'controls created discretion and corruption.' Anti-corruption institutions like CBI and CVC were themselves built for that control regime and never absorbed the post-reform distinction between commercial risk-taking and crime.… ### Body ## Summary This Forum of Free Enterprise booklet reproduces Dr. Ashima Goyal's lecture at the Fourteenth M. R. Pai Memorial Award Function (Mumbai, 10 September 2018), preceded by an editorial introduction by Sunil S. Bhandare. Goyal — Professor at IGIDR and a member of the Prime Minister's Economic Advisory Council — uses the occasion to ask how Indian banks can be properly disciplined without being criminalised, and reads the 2018 amendment to the Prevention of Corruption Act against that test. The heart of her argument is institutional hysteresis. Independent India layered centralised planning onto a federal constitutional structure, multiplying agencies without clean exits, so 'controls created discretion and corruption.' Anti-corruption institutions like CBI and CVC were themselves built for that control regime and never absorbed the post-reform distinction between commercial risk-taking and crime. Once reforms raised the value of natural resources, suspicion and CAG loss estimates pushed politicians and industrialists into jail, growth and credit collapsed, and a tenth-year acquittal could not restore reputations or assets. Goyal then walks through the NPA story in public sector banks. PSBs took on long-gestation infrastructure lending after development banks closed and bond markets failed to deepen; when private projects soured and global and domestic shocks compounded firms' losses, rollovers were branded 'evergreening' and FIRs were issued against bankers and even independent directors who had followed due process. Drawing on her own work on credit, market and country risk, she insists that banks are natural risk-aggregators and that reform should make them bear more risk through equity rather than treat ordinary losses as criminal — vigilance institutions, in an age of big data, can rely on patterns and random checks instead of accusatory lists. The rendered pages close with her assessment of the Prevention of Corruption (Amendment) Act, 26 July 2018. She welcomes statutory deadlines on trials (two years, extendable to four), reads Section 8's stiff penalties on bribe-givers as a deterrent to corporate cornering of resources, and notes the escape clauses for compelled or cooperating bribe-givers. The chunk ends mid-discussion of the 'intentional enrichment' and 'undue advantage' clauses; the remaining pages of the booklet (printed pages 19 onward) are not in this rendered set. ## Key points - Goyal's lecture, delivered at the 14th M. R. Pai Memorial Award Function (Mumbai, 10 Sept 2018) and published by the Forum of Free Enterprise, asks how Indian banking can be disciplined without being criminalised. - Institutional 'hysteresis': superimposing central planning on a federal constitution produced a multiplicity of overlapping agencies with no accountability, so 'controls created discretion and corruption.' - CBI, CVC and the 1988 PCA were built for a control regime and could not distinguish post-reform commercial risk-taking from criminal misconduct; the CAG's headline loss estimates in the 2G case fed an atmosphere of suspicion that paralysed decisions. - PSBs took infrastructure loans to compensate for shuttered development banks and thin bond markets; global slowdown plus 'permission paralysis' turned many loans non-performing, and regulatory over-reaction punished honest bankers along with crooks like Nirav Modi. - Banks face credit, market and country risk; reform should let them bear more risk through equity rather than treat ordinary loss as crime, with insurance-vs-incentive trade-offs left to ex-ante diversification. - Vigilance institutions can be made market-compatible by relying on big-data patterns, suspicious-transaction reports and random checks rather than reputation-damaging accusatory lists. - The 2018 PCA amendment imposes hard deadlines (two years, extendable to four) on prolonged investigations and stiffens punishment of bribe-givers (up to seven years), with escape clauses for compelled bribers and compliance-defended corporates. - Goyal frames the whole project as a continuation of the Forum of Free Enterprise's fight — freedom from stifling controls must now be paired with the right kind of discipline. --- ## [Primary work] Indian Capital Market — Past, Present & Future URL: https://indianliberals.in/primary-works/indian-capital-market-past-present-and-future-h-t-parekh-june-10-1975/ ### Summary H. T. Parekh's 1975 A. D. Shroff Memorial Lecture surveys the Indian capital market in three movements — past (up to Independence), present (the quarter-century from 1947 to 1974), and future (the next quarter-century). The opening pages frame the address as a personal homage: Parekh, then chairman of the Industrial Credit and Investment Corporation of India, regards A. D. Shroff as his 'Guru' and credits him as the moving spirit behind ICICI itself. He pauses to honour the Forum of Free Enterprise as a continuing instrument of public economic education. The historical narrative argues that India was unusually well prepared for a modern capital market. Hundies, bills of acceptance and the credit standing of nagarseths familiarised ordinary people with financial instruments long before joint-stock companies arrived; the Bombay Stock Exchange, formally constituted in 1875 as the 'Native Share and Stock Brokers' Association', was the first stock exchange opened in Asia.… ### Body ## Summary H. T. Parekh's 1975 A. D. Shroff Memorial Lecture surveys the Indian capital market in three movements — past (up to Independence), present (the quarter-century from 1947 to 1974), and future (the next quarter-century). The opening pages frame the address as a personal homage: Parekh, then chairman of the Industrial Credit and Investment Corporation of India, regards A. D. Shroff as his 'Guru' and credits him as the moving spirit behind ICICI itself. He pauses to honour the Forum of Free Enterprise as a continuing instrument of public economic education. The historical narrative argues that India was unusually well prepared for a modern capital market. Hundies, bills of acceptance and the credit standing of nagarseths familiarised ordinary people with financial instruments long before joint-stock companies arrived; the Bombay Stock Exchange, formally constituted in 1875 as the 'Native Share and Stock Brokers' Association', was the first stock exchange opened in Asia. Parekh sketches 1860–1947 through the textile mills of Bombay and Ahmedabad, Scottish-controlled jute and tea capital in Calcutta, the floatation of Tata hydro shares in 1920, and the watershed Tata Iron and Steel issue of 1911 — when Indian investors' confidence in the Tata name rescued an issue that the London money market had refused. Through the war booms and slumps of 1936-37, 1939-40 and 1943-46, Tata Deferred became, in his words, the 'king of the capital market'. The 'present' section dates the qualitative break to the post-1947 institutionalisation of finance — IFCI in 1948, the SFCs in 1952-53, ICICI in 1955, UTI and IDBI in 1964 — and to the steady assertion of Government control over organised savings. Parekh observes that roughly 90 per cent of the investment of organised savings is now owned or controlled, directly or indirectly, by Government; that outstanding marketable Government loans have risen from about Rs. 2,000 crores in 1951 to about Rs. 7,500 crores; and that the nationalisations of life insurance (1955), the major banks (1969) and the Reserve Bank (1949), alongside the statutory finance corporations, have made the state the dominant force in long-term finance. He defends institutional finance as a 'blessing to industry' while worrying that easy institutional access has eroded the personal sense of obligation that earlier entrepreneurs such as Kirloskar and Seshasayee felt toward their financiers. The rendered chunk closes mid-argument on the contemporary period, with Parekh praising the broadening of the investor base since the 1957-58 foreign exchange crisis, the upsurge of new issues across engineering, chemicals, fertilisers, petro-chemicals, automobiles and ball bearings, and the role of the Unit Trust of India under chairmen R. S. Bhatt and J. S. Raj in mobilising small savings. The 'future' section announced at the start of the lecture is not yet reached in these pages. ## Key points - Lecture is the 1975 A. D. Shroff Memorial Trust annual address, delivered by H. T. Parekh, chairman of ICICI, on 10 June 1975 in Bombay. - Parekh structures his argument around three periods: the past (pre-1947), the present (1947-1974), and the future (the next 25 years). - He insists that Indians were already conversant with financial instruments — hundies, bills of acceptance, deposits with nagarseths — long before joint-stock companies appeared. - Bombay Stock Exchange (formally opened 1875 as the 'Native Share and Stock Brokers' Association') was the first stock exchange in Asia; the Calcutta exchange dominated jute/tea/coal but the centre of financial gravity shifted to Bombay over the 20th century. - The 1911 Tata Iron and Steel issue is identified as the moment 'the capital market, as an institution, had established itself in India' — Indian investors absorbed an issue that the London market had rejected. - Post-1947 'qualitative change': institutionalisation of finance (IFCI 1948, SFCs 1952-53, ICICI 1955, UTI and IDBI 1964) and predominance of Government control over organised finance. - Roughly 90 per cent of the investment of organised savings is now owned or controlled, directly or indirectly, by Government; outstanding marketable Government loans rose from c. Rs. 2,000 crores (1951) to c. Rs. 7,500 crores. - Parekh worries that easy institutional finance has weakened entrepreneurs' personal sense of obligation that earlier figures like Kirloskar and Seshasayee felt toward their financiers. --- ## [Primary work] INDIAN ECONOMIC CRISES URL: https://indianliberals.in/primary-works/indian-economic-crises-a-programme-of-reform-professor-b-r-shenoy-may-11-1968/ ### Summary B. R. Shenoy's 1968 Forum of Free Enterprise pamphlet — drawn from a series of articles in *Swarajya* (Madras) — diagnoses India's compounding economic crises as the outcome not of bad monsoons, the Chinese border war or the 1965 Indo-Pakistan conflict, but of fifteen years of avoidable policy mismanagement. The argument unfolds across four chapters (I. Anti-Social Income Shifts; II. Importance of Zero Inflation; III. PL 480 Inflation; IV. A Programme of Reform). Inflation, Shenoy insists, is the tap-root of nearly every ailment — the chronic price acceleration, the foreign-exchange scarcity, the recourse to import licensing and other 'defences', and the perverse income transfers that have fed luxury living among a privileged upper crust while pushing the salaried middle classes toward indigence. The pamphlet's central technical claim is that the inflationary finance of recent years has come almost entirely from PL 480 rupee disbursements held with the U.S. Embassy. Shenoy walks through the 1967-68 Budget arithmetic to argue that PL 480 receipts (Rs. 435 crores) exceeded the sale proceeds of PL 480 foodgrains (Rs. 285 crores) by Rs.… ### Body ## Summary B. R. Shenoy's 1968 Forum of Free Enterprise pamphlet — drawn from a series of articles in *Swarajya* (Madras) — diagnoses India's compounding economic crises as the outcome not of bad monsoons, the Chinese border war or the 1965 Indo-Pakistan conflict, but of fifteen years of avoidable policy mismanagement. The argument unfolds across four chapters (I. Anti-Social Income Shifts; II. Importance of Zero Inflation; III. PL 480 Inflation; IV. A Programme of Reform). Inflation, Shenoy insists, is the tap-root of nearly every ailment — the chronic price acceleration, the foreign-exchange scarcity, the recourse to import licensing and other 'defences', and the perverse income transfers that have fed luxury living among a privileged upper crust while pushing the salaried middle classes toward indigence. The pamphlet's central technical claim is that the inflationary finance of recent years has come almost entirely from PL 480 rupee disbursements held with the U.S. Embassy. Shenoy walks through the 1967-68 Budget arithmetic to argue that PL 480 receipts (Rs. 435 crores) exceeded the sale proceeds of PL 480 foodgrains (Rs. 285 crores) by Rs. 150 crores, demonstrating — by his reading — that PL 480 finance is inflationary by precisely that excess, contra the position taken by the Reserve Bank of India, the Ministry of Finance and USAID's Dr. Samuel A. Costanzo. Naxalbari, gheraos, bandhs and 'President's rule' are framed as surface symptoms of the deeper income shifts produced by inflation and licensing — themselves the 'Alladin's lamp' that hands politicians and administrators unearned power. The programme of reform proposed is stark: stop PL 480 deficit financing immediately and immobilise (preferably write off) the accumulated Rs. 744 crores of PL 480 rupees; abolish import licensing and replace the dual exchange-rate regime with a single market-clearing rate; cut taxes and matching government expenditures; denationalise Public Sector enterprises; and replace government-to-government aid with capital flowing through the aid-giving countries' capital markets. Shenoy warns that fiscal measures to ensure zero inflation must receive top priority, and that without them the alternative may be 'the demise of democracy'. The rendered pages carry the work through the opening of Chapter IV; the final pages of the reform programme (printed pages 19 onward) were not rendered for this pass. ## Key points - Shenoy attributes India's economic crises to 1.5 decades of policy mismanagement, not to monsoons, the Chinese attack on the northern frontier, or the Indo-Pakistan war. - Inflation is named the 'tap-root' of foreign-exchange scarcity, balance-of-payments deficits, import controls and the perverse income transfers producing 'asuric' luxury living amid mass misery. - Inflationary finance, in his telling, has issued almost wholly from PL 480 rupee disbursements held with the U.S. Embassy — paper funds whose physical counterpart (foodgrains) has long been consumed. - Import licensing is portrayed as a 'veritable Alladin's lamp' that channels unmerited wealth (Rs. 550 crores annually in licence premia) into upper-income groups and political power into office-holders. - Shenoy uses a *reductio ad absurdum* on 1966-67 Budget data to argue PL 480 operations produced a deficit of Rs. 859 crores against an overall deficit of Rs. 764 crores, refuting RBI/Ministry/USAID claims of monetary neutrality. - He warns that tear-gas and President's rule cannot durably suppress Naxalbari, gheraos and bandhs so long as the underlying income shifts persist. - The reform programme: stop deficit financing, immobilise/write off accumulated PL 480 rupees, abolish import licensing and the dual exchange-rate regime, cut taxes and matching expenditures, denationalise Public Sector enterprises, and shift aid from government-to-government channels to capital-market flows. - Currency over-valuation is shown to have caused over-capitalisation and labour-saving capital intensity beyond what employment conditions could justify, with militant trade unionism amplifying the bias. --- ## [Primary work] Indian Economic Development 1950-1980: An Assessment URL: https://indianliberals.in/primary-works/indian-economic-development-1950-1980-an-assessment-by-dr-rm-honavar/ ### Summary Indian Economic Development 1950-1980: An Assessment is a Forum of Free Enterprise pamphlet reproducing Dr. R. M. Honavar's A. D. Shroff Memorial Lecture, delivered at the Madras Centre of the Forum in October 1981. Honavar, then Director of the Institute for Financial Management and Research at Madras and a former Economic Adviser to the Government of India, takes the thirty-year mark of planned development as an occasion for a stock-taking. He opens by conceding the textbook achievements — net national product up 165 per cent at 1970-71 prices, agriculture lifted out of pre-planning stagnation to a 2.7 per cent annual growth, a savings rate that has climbed from 8 per cent to about 16-17 per cent of national income, and a tax-take that has nearly tripled as a share of national income — and then proceeds to argue that, judged against any reasonable benchmark, the performance has nonetheless been unsatisfactory. His assessment is structured around four diagnoses of failure.… ### Body ## Summary Indian Economic Development 1950-1980: An Assessment is a Forum of Free Enterprise pamphlet reproducing Dr. R. M. Honavar's A. D. Shroff Memorial Lecture, delivered at the Madras Centre of the Forum in October 1981. Honavar, then Director of the Institute for Financial Management and Research at Madras and a former Economic Adviser to the Government of India, takes the thirty-year mark of planned development as an occasion for a stock-taking. He opens by conceding the textbook achievements — net national product up 165 per cent at 1970-71 prices, agriculture lifted out of pre-planning stagnation to a 2.7 per cent annual growth, a savings rate that has climbed from 8 per cent to about 16-17 per cent of national income, and a tax-take that has nearly tripled as a share of national income — and then proceeds to argue that, judged against any reasonable benchmark, the performance has nonetheless been unsatisfactory. His assessment is structured around four diagnoses of failure. First, India failed to control population growth: the decennial rate ran to 24.8 per cent at the 1971 and 1981 censuses, far above the planners' assumption of 13-14 per cent, and the State has neither offered Chinese-style incentives nor — more damningly — raised female literacy in the high-fertility States of UP, Bihar, MP and Rajasthan. Second, agricultural growth lagged what other South and South-East Asian countries achieved: irrigation, fertiliser and rural electrification projects were spread too thinly across constituencies for political reasons, completion schedules stretched to 15-20 years, on-farm water management remained poor, and the water-fertiliser-HYV package was effectively confined to wheat and rice and to larger farmers with capital. Third, industrial production grew at only 6.1 per cent on average and collapsed after the mid-sixties: the post-Third-Plan resource constraint, the exhaustion of easy import substitution, MRTP-driven rejection of scale economies, and a licensing regime that produced a class of rentier entrepreneurs were compounded by a refusal to pursue export-led growth on the mistaken view that a country the size of India could not export at scale. Fourth and finally, Honavar examines resource mobilisation and the public sector. Net domestic capital formation, he notes, only crossed 19 per cent of national income by 1978-79 — still well below comparator countries — and the State has been unable to suppress non-developmental expenditure or to generate surpluses from public sector enterprises. The 'no profit, no loss' philosophy, fear of cost-push inflation, the burden of overmanning (Coal India is singled out), the suspicion of discretion that produced a 'plethora of rules,' and the early staffing of industrial enterprises with civil servants together explain why some Rs. 20,000 crores of investment cannot generate an adequate return. He closes the rendered portion of the lecture with a critique of fiscal practice: more than four-fifths of tax revenue comes from regressive indirect taxes, and the failure to mobilise resources has forced a slide into deficit financing whose inflationary consequences make further mobilisation harder still. ## Key points - Honavar grants the headline numbers — NNP up 165 per cent, agriculture growing 2.7 per cent annually, the savings rate roughly doubled — but argues per-caput income gained only 45 per cent over thirty years and per-caput consumption only 1.1 per cent annually, making the record poor by comparator standards. - He diagnoses four causes of underperformance: failure to control population, agricultural growth below South and South-East Asian peers, slow industrial growth, and weak resource mobilisation. - Population control faltered both because incentives were meagre relative to China's and because female literacy was neglected — Kerala has the lowest birth rate and highest female literacy, while UP, Bihar, MP and Rajasthan combine the lowest female literacy with the highest fertility. - Agricultural investment in irrigation, fertiliser plants and rural electrification was diluted by the political imperative to spread allocations thinly across regions; construction periods of 15-20 years were normal, and the water-fertiliser-HYV technology effectively reached only wheat and rice farmers with sufficient capital. - Industrial growth was strangled by the exhaustion of easy import substitution, by an MRTP-driven rejection of scale economies, and above all by a licensing regime that produced 'so-called entrepreneurs who looked upon the industrial licence as the modern equivalent of the sanad given by Lord Cornwallis to the Zamindars in Bengal.' - Export-led growth was summarily ruled out by Indian economists on the assumption that a country the size of India could not export at scale — an assumption Honavar regards as a costly historical error, citing Japan, Hong Kong and Korea. - Public sector enterprises have generated negligible surpluses because of the 'no-profit-no-loss' price philosophy, fear of cost-push inflation, civil servant management, and political resistance to retrenchment in overmanned units like Coal India. - Fiscal mobilisation has come overwhelmingly from indirect taxes (more than four-fifths of revenue), which weigh more heavily on the poor and feed cost-push inflation, while the failure to tax agricultural income or check evasion has pushed Government into ever heavier deficit financing. --- ## [Primary work] INDIAN INDUSTRY IN POST-LIBERALISATION ERA URL: https://indianliberals.in/primary-works/indian-industry-post-liberalisation-era-by-ss-bhandare-2001/ ### Summary S. S. Bhandare, an economist and consultant with Tata Services Ltd., uses this Forum of Free Enterprise booklet to take stock of Indian industry roughly a decade after the July 1991 reforms. His verdict is mixed: quantitatively, post-reform industrial growth (averaging 6.5% in 1992–2001) has been only marginally better than the pre-reform decade's 6.3%, and the sector has become more volatile, with the coefficient of variation rising from 38.75 to 47.18. Qualitatively, however, he sees real gains — a liberalised and intensely competitive market, wider consumer choice, market-determined pricing, productivity drivers in manufacturing, and the compulsion to globalise both prices and profit margins. The booklet is organised around a series of "critical issues for debate." Bhandare contests the fashionable thesis that industrialisation will "by-pass India" in favour of a services-led trajectory, pointing out that India has slipped from being the world's tenth-largest industrial power around 1970 to roughly 17th or 18th, while its consumption of steel, cement and power is one-third to one-fourth of China's.… ### Body ## Summary S. S. Bhandare, an economist and consultant with Tata Services Ltd., uses this Forum of Free Enterprise booklet to take stock of Indian industry roughly a decade after the July 1991 reforms. His verdict is mixed: quantitatively, post-reform industrial growth (averaging 6.5% in 1992–2001) has been only marginally better than the pre-reform decade's 6.3%, and the sector has become more volatile, with the coefficient of variation rising from 38.75 to 47.18. Qualitatively, however, he sees real gains — a liberalised and intensely competitive market, wider consumer choice, market-determined pricing, productivity drivers in manufacturing, and the compulsion to globalise both prices and profit margins. The booklet is organised around a series of "critical issues for debate." Bhandare contests the fashionable thesis that industrialisation will "by-pass India" in favour of a services-led trajectory, pointing out that India has slipped from being the world's tenth-largest industrial power around 1970 to roughly 17th or 18th, while its consumption of steel, cement and power is one-third to one-fourth of China's. He argues for an indigenous industrial programme rather than dependence on imports, and presses for second-generation reforms: rationalisation of domestic indirect taxes (excises, sales taxes, octroi), reduction of customs tariffs towards East Asian levels (the Shome Advisory Group's 15% peak by 2004-05), repeal of SICA, dissolution of BIFR, flexibility in labour markets, and acceleration of mergers, acquisitions and divestments. Further sections evaluate the challenges of globalisation (India's exports remain concentrated in labour-intensive, low-value categories with only a 0.7% share of global exports), the social fallout of rationalisation (the stalled National Renewal Fund, the case for aggressive privatisation to fund retraining), and the rising disciplinary role of stock markets as the Planning Commission's influence wanes. The closing piece on the "jigsaw of new economy" cautions against treating IT-led growth as a substitute for fixing the "old economy," arguing instead that brick-and-mortar industries must absorb new-economy productivity gains. Bhandare ends with a Dickensian flourish: it has been the best of times and the worst of times for Indian industry, and the next few years will determine whether India remains a serious industrial power in the global league. ## Key points - Post-reform industrial growth (6.5% p.a., 1992-2001) is only marginally higher than pre-reform (6.3%, 1981-1992), while volatility has risen sharply (coefficient of variation 47.18 vs 38.75). - Qualitative gains — competitive markets, wider consumer choice, market-determined pricing, productivity discipline, globalised price and margin pressure — are the real dividends of reform. - Bhandare rejects the 'industrialisation will by-pass India' thesis, citing India's slide from 10th to 17th-18th in global industrial rank and consumption levels one-third to one-fourth of China's. - He argues for rationalisation of domestic indirect taxes (excises, sales taxes, octroi) and customs tariff cuts to East Asian levels as a precondition for global competitiveness. - Restructuring impediments include rigid labour markets, SICA and BIFR, fragmented capacities, transaction costs, and infrastructure infirmities; mergers, acquisitions and divestments need vigorous pursuit. - India's 0.7% share of global exports is concentrated in labour-intensive, low-value categories like gems and jewellery, garments and leather; IT software is a bright spot but hardware lags. - The National Renewal Fund concept has fallen by the wayside; aggressive privatisation could fund retraining and a credible social safety net, but political will is lacking. - Stock markets have become the new allocator of capital as the Planning Commission's role declines, punishing diversified, commodity-oriented, capital-intensive businesses; IT euphoria must not displace fixing the old economy. --- ## [Primary work] Indian Planning and the Common Man URL: https://indianliberals.in/primary-works/indian-planning-and-the-common-man-prof-b-r-shenoy-jan8-1962/ ### Summary Prof. B. R. Shenoy's 1962 Forum of Free Enterprise pamphlet bundles three of his newspaper essays — two from the Indian Express (28 October 1961) and one from the Times of India (23 October 1961) — into a sustained attack on the development model defended by Prime Minister Nehru at the Third Plan debate in the Lok Sabha. Shenoy concedes the headline statistics (national income up 42 per cent in a decade, life expectancy from 24 to 47.5 years, industrial output up 94 per cent) but argues they are a "misleading bunch of statistics": the composition of the national product, not its aggregate volume, is the real test of welfare, and on that test India has failed. The output of cotton cloth in common use rose only 1.4 times in a decade while electric lamps rose 2.9 times, radios 5.9 times and sewing machines 9.6 times; per capita foodgrain availability has steadily declined.… ### Body ## Summary Prof. B. R. Shenoy's 1962 Forum of Free Enterprise pamphlet bundles three of his newspaper essays — two from the Indian Express (28 October 1961) and one from the Times of India (23 October 1961) — into a sustained attack on the development model defended by Prime Minister Nehru at the Third Plan debate in the Lok Sabha. Shenoy concedes the headline statistics (national income up 42 per cent in a decade, life expectancy from 24 to 47.5 years, industrial output up 94 per cent) but argues they are a "misleading bunch of statistics": the composition of the national product, not its aggregate volume, is the real test of welfare, and on that test India has failed. The output of cotton cloth in common use rose only 1.4 times in a decade while electric lamps rose 2.9 times, radios 5.9 times and sewing machines 9.6 times; per capita foodgrain availability has steadily declined. "Planning has produced a 'good life' not for the masses but for a thin layer of the parasitical minority of its beneficiaries." The second essay, "Planning & Social Justice," reframes the objective of planning as the production of mass-consumption goods commanded by consumer sovereignty rather than the heavy-industries-plus-statism bias of the official plans. Shenoy connects the regimentation of investment to the concentration of economic power in "State functionaries — with arbitrary rights of disposal, directly or indirectly, over the employment, livelihood and well-being of virtually the entire nation" — calling this "a potential source of ruthless social injustice — ruthless, among other reasons, because arbitrariness is backed by police powers." Real social justice, he insists, cannot be ensured better than "through policies of economic freedom on the pattern of the E. E. C. countries and Japan, where state planning is confined to its natural sphere." The third essay, "Planning & Inflation," attacks the Economic Survey 1960-61's claim that price rises are "the very condition of economic advance." Shenoy marshals comparative data — West German national income rising 12 per cent annually 1953-59 with prices up only 1 per cent a year; Japanese national income rising 12.3 per cent annually with prices up 2 per cent over the whole period; France and Italy posting strong growth while prices actually fell — to argue that rapid growth and monetary stability normally go hand in hand. India's inflation, he concludes, is the avoidable by-product of public-sector over-investment financed by deficit financing (Rs. 450 crores 1959-60), bank-credit expansion, and P. L. 480 counterpart funds; foreign aid has "illegitimately" masked the symptoms but cannot defer the crash indefinitely. The pamphlet closes with an appendix listing twenty-one recommended works — Hayek, Mises, Robbins, Roepke, Erhard, Bauer, Hazlitt and others — that constitute Shenoy's classical-liberal canon. ## Key points - Shenoy frames the pamphlet as a rebuttal to the Prime Minister's January 1962 Lok Sabha defence of the Third Plan, arguing that aggregate income gains conceal a composition that has neglected mass-consumption goods. - Per capita foodgrain availability fell from 15.5 oz/day in 1955 to 15.3 oz in 1959-60 to 15.4 oz in 1960 despite 17.8 million tons of imports, while cotton cloth in common use rose only 1.4 times against electric lamps 2.9x, radios 5.9x and sewing machines 9.6x. - He attributes the consumer-goods shortfall to a heavy-industries plan-bias, statist controls and the displacement of consumer sovereignty by "statist slogans" of public good. - Section II reframes statism as a structural source of social injustice because arbitrary state allocation is "backed by police powers," and points to the E.E.C. countries and Japan as evidence that growth and social justice come through economic freedom, not state planning. - Section III refutes the Economic Survey 1960-61 thesis that inflation is the inevitable price of growth, citing West Germany (12% growth, 1% inflation), Japan (12.3% growth, 2% inflation) and France/Italy as counter-examples. - Shenoy diagnoses Indian inflation as a consequence of deficit financing (Rs. 450 crores in 1959-60), commercial-bank credit creation, and P. L. 480 counterpart funds — with foreign aid acting as a misleading cushion that may "defer the crash for a while, but not for an indefinite period." - The appendix's 21-item reading list — Hayek (multiple), Mises, Robbins, Roepke, Erhard, Colin Clark, P. T. Bauer, Henry Hazlitt — anchors the polemic in the Mont Pelerin/classical-liberal tradition. --- ## [Primary work] Indian Planning at the Cross-Roads URL: https://indianliberals.in/primary-works/indian-planning-at-the-crossroads-n-dandeker-m-p-nov11-1965/ ### Summary This November 1965 Forum of Free Enterprise booklet bundles three short interventions on the Fourth Five-Year Plan, issued as the Indian economy slid into monetary inflation, a foreign-exchange crunch, and chronic foodgrain shortages. The contributors are N. Dandeker, an M.P. with administrative experience in the I.C.S.; G. L. Mehta, a former Indian Ambassador to the U.S.A., former member of the Planning Commission, and Chairman of the Industrial Credit and Investment Corporation of India; and K. Santhanam, M.P., former Chairman of the Finance Commission, whose piece is reprinted from the Statesman of July 24, 1964. All three reject the Planning Commission's proposed Rs. 21,500-crore Fourth Plan as conceived, but from distinct angles. Dandeker indicts the macro consequences of monetary expansion, the collapse of public utilities, the worsening foreign-exchange position, and "rupee payment trade" as a quack remedy, arguing that "totalitarian" planning has been eroding the Constitution.… ### Body ## Summary This November 1965 Forum of Free Enterprise booklet bundles three short interventions on the Fourth Five-Year Plan, issued as the Indian economy slid into monetary inflation, a foreign-exchange crunch, and chronic foodgrain shortages. The contributors are N. Dandeker, an M.P. with administrative experience in the I.C.S.; G. L. Mehta, a former Indian Ambassador to the U.S.A., former member of the Planning Commission, and Chairman of the Industrial Credit and Investment Corporation of India; and K. Santhanam, M.P., former Chairman of the Finance Commission, whose piece is reprinted from the Statesman of July 24, 1964. All three reject the Planning Commission's proposed Rs. 21,500-crore Fourth Plan as conceived, but from distinct angles. Dandeker indicts the macro consequences of monetary expansion, the collapse of public utilities, the worsening foreign-exchange position, and "rupee payment trade" as a quack remedy, arguing that "totalitarian" planning has been eroding the Constitution. Mehta urges a smaller, more selective Plan, automatic licensing of projects that do not draw on foreign exchange, and scepticism about further public-sector steel plants, petro-chemical complexes, and the Cochin shipyard as Galbraith's "symbolic modernism." Santhanam pleads for a one-year extension of the Third Plan to March 1967, a moratorium on new starts, and self-financing public-sector industries, warning that the assumption that Fourth-Plan outlays must be proportionate to the Third has "become a vested interest." The booklet is framed by sidebar pull-quotes from Eugene Black and A. D. Shroff defending private enterprise as an affirmative good. ## Essays ### I. The Present Economic Situation Demands Re-Thinking on Fourth Plan Strategy & Size *By N. DANDEKER, M.P.* Writing as the inflationary crisis of 1965 deepens, Dandeker diagnoses the Indian economy as "overheated by monetary inflation": money supply rose roughly 43.7 per cent between 1960 and 1964 against a 17.5 per cent rise in national income, the general price level rose 32 per cent between 1952–53 and 1963 and another 25 per cent by July 1965, and foodgrains prices rose 30 per cent in eighteen months. He traces the regressive incidence of this inflation on the industrial worker, the landless rural labourer, the salaried middle class, the peasant farmer, and the small investor whose savings are eroded by direct taxation and "ridiculous small savings schemes." He then catalogues the decay of public utilities — Law and Order, railways, electricity, water, sanitation, education, road transport, communications — and the way corporate taxation, licences, controls and a dead capital market have driven industry into the arms of state financial institutions. On foreign exchange, Dandeker calls the Government a "squanderer" through public-sector mismanagement and dismisses the "rupee payment trade" as a magic-word remedy. He concludes that the Fourth Plan of Rs. 21,500 crores is an "adventurous step," that the totalitarian planning mode of the Second and Third Plans has been "steadily eroding the fundamentals of our Constitution, because the Government had been bending the Constitution to the Plan," and that what India needs is for the Government to plan its own business rather than everyone else's. Without serious re-thinking on the strategy and size of the Plan, he warns, the economy faces a major disaster in which fixed-income groups will suffer worst. - Money supply grew 43.7 per cent between 1960 and 1964 while national income grew only 17.5 per cent, producing structural inflation - Foodgrains prices rose 30 per cent in the eighteen months ending July 1965, with the salaried middle class, peasant farmer and small investor bearing the brunt - Public utilities — railways, electricity, water, sanitation, education, road transport — are in advanced decay; corporate taxation, controls and a dead capital market have starved private industry of finance - "Rupee payment trade" is a magic-word remedy for foreign-exchange mismanagement that in fact worsens the balance of payments - The Rs. 21,500-crore Fourth Plan is an "adventurous step"; the totalitarian mode of planning has been bending the Constitution to the Plan and must be re-thought ### II. A Plea for Realism in Planning *By G. L. MEHTA* Mehta's "plea for realism in planning," delivered originally to the Central Advisory Council of Industries in New Delhi on 13 August 1965, is a senior insider's case for shrinking and refocusing the Fourth Plan rather than scuttling it. He warns that the breast-beating produced by the present crisis should not lead the country to throw out the baby with the bath water; planners must still think long-term even if, as Keynes said, in the long run we shall all be dead. Recalling his own 1959 FICCI speech on "Some Lessons of the Second Plan," Mehta repeats his objection to the "numbers game" — gross magnitudes derived from appeals to fortitude rather than from project-by-project calculation — and complains that the Fourth Plan's headline figure has again been chosen as a "symbol" of hope. He pushes for several concrete shifts: automatic licensing of industrial projects that do not draw on foreign exchange or scarce raw materials; more selective control of capital issues, illustrated by Rajaji's quip about a cure that killed the patient's wife; closer scrutiny of further petro-chemical complexes, additional public-sector steel plants and the long-delayed Cochin shipyard, which he treats as instances of what "Prof. Galbraith would call symbolic modernism"; and a tighter linkage between investment magnitudes and the policy environment for prices, controls and incentives. The Government, he argues, should set free a certain portion of the price system — control by liberalisation — and resist the press's portrayal of price controls as the test of industrial growth. - Rejects both "scuttling of plans" and the "numbers game" approach to fixing Plan size - Proposes automatic licensing of industrial projects that do not require foreign exchange or scarce raw materials - Calls for selective capital-issues control rather than blanket restraint; cites Rajaji on cures killing the patient - Treats further petro-chemical complexes, new public-sector steel plants and the Cochin shipyard as Galbraithian "symbolic modernism" - Argues that physical investment targets must be reconciled with policy decisions on prices, controls and incentives, including selective decontrol ### III. Plan Consolidation to Reduce Strains on Economy *By K. SANTHANAM, M.P.* Santhanam's piece — reprinted with the Editor's permission from the Statesman of 24 July 1964 — argues that Lal Bahadur Shastri's first year in office has stabilised the country and that the immediate task is plan consolidation rather than a fresh round of expansion. He dismisses talk of a "plan holiday" because economic activities are continuing processes, but insists the country is "unable to bear" the strain that the Vice-chairman of the Planning Commission's current course will impose. Echoing Churchill's refusal to liquidate the empire, he hopes the Finance Minister of India will fare better than the Prime Minister of Britain who failed to do likewise. His proposed remedy is a one-year extension of the Third Plan to March 1967 — freeing additional Plan resources, avoiding deferred completion of in-train projects, and delaying the Fourth Plan's start to 1967–68. He sketches a structural reform of the public sector around self-financing: each branch should work to a time limit by which it generates the savings needed for its own expansion, with the steel industry positioned similarly after the fourth public-sector steel plant is operational, and with handloom, khadi, textiles, and even the railways funded through annual budget contributions treated as re-lent for expansion. Triennial rather than annual conferences with the States would free up administrative bandwidth. He also questions whether much of the country's industrial capital investment has become saturated, arguing for studies of capacity utilisation; and he insists that progress means controlling fewer commodities, scrutinising humbug investments in social overheads, and convincing the public that the planners are not hopelessly bound by procedures valid ten years ago. - Rejects a "plan holiday" but urges extending the Third Plan by one year to March 1967, freeing resources for unfinished projects and postponing the Fourth Plan to 1967–68 - Every branch of the public sector should work to a time limit by which it generates the savings needed for its own expansion — including steel, railways, handloom, khadi and textiles - The assumption that Fourth-Plan investment should be roughly proportionate to the Third Plan "for every item" has become a vested interest and threatens to make planning mechanical - Triennial rather than annual planning conferences with the States would reduce wasteful procedure and free bandwidth for implementation - Progress lies in setting free a certain portion of the price system, decontrolling commodities like steel and cement, and pruning humbug investments in social overheads --- ## [Primary work] INDIAN PLANNING —PAST & FUTURE URL: https://indianliberals.in/primary-works/indian-planning-past-and-future-sir-biren-mookerjee-dr-n-das-h-t-parekh-june-11-1966/ ### Summary This Forum of Free Enterprise booklet gathers three independent essays by prominent Indian voices in industry, economics, and finance, all converging on a single verdict: fifteen years of Five-Year Plans have failed to improve the material condition of the average Indian, and the Fourth Plan must radically reconsider both its diagnosis and its methods. The frontispiece frames the volume's ideological stance with a Eugene Black epigraph insisting that private enterprise be embraced as "an affirmative good" rather than a tolerated evil. Sir Biren Mookerjee's opening essay argues that planning success is impossible without sweeping modernisation — mechanisation, automation, and managerial pragmatism — and lays particular blame on restrictive public-sector licensing and a 'labour monopoly' that prices Indian goods out of world markets. Dr. N. Das (I.C.S. Retd.) furnishes a dense statistical indictment originally published in the Times of India, showing that per-capita income, foodgrain consumption, housing, and employment all registered negligible or negative improvement across the planning period; he marshals Galbraith's consumption criterion, Sukhatme's nutrition studies, and Colin Clark's investment-employment ratio to conclude that planning has failed even on minimum-human-needs criteria. H. T. Parekh, writing as General Manager of ICICI on the eve of the Fourth Plan, reframes the central problem as runaway inflation produced by contradictory fiscal, monetary, and price-control policies — citing the sugar industry as a textbook case of government-industry-farmer collusion — and urges a shift from prestige-driven outlay targets to economical, productivity-oriented resource use. ### Body ## Summary This Forum of Free Enterprise booklet gathers three independent essays by prominent Indian voices in industry, economics, and finance, all converging on a single verdict: fifteen years of Five-Year Plans have failed to improve the material condition of the average Indian, and the Fourth Plan must radically reconsider both its diagnosis and its methods. The frontispiece frames the volume's ideological stance with a Eugene Black epigraph insisting that private enterprise be embraced as "an affirmative good" rather than a tolerated evil. Mookerjee's opening essay argues that planning success is impossible without sweeping modernisation—mechanisation, automation, and managerial pragmatism—and lays particular blame on restrictive public-sector licensing and labour-monopoly policies. Das furnishes a dense statistical indictment, showing that per capita income, diet, housing, and employment all registered negligible or negative improvement across the planning period. Parekh, writing on the eve of the Fourth Plan, reframes the central problem as runaway inflation produced by contradictory fiscal, monetary, and price-control policies, and urges a shift from prestige-driven outlay targets to economical, productivity-oriented resource use. ## Essays ### PLANNING SUCCESS DEPENDS ON MODERNISATION *By SIR BIREN MOOKERJEE* Mookerjee opens with Lewis Carroll's Red Queen parable—India has been running ever faster under its Plans yet finds itself standing under the same tree—and uses this to argue that the real obstacle to planning success is not insufficient outlay but a failure to embrace modernisation. He documents the stagnation of Indian agriculture (70% of workers cannot produce enough to feed themselves and the remaining 30%) against New Zealand's example where mechanised farming supports 96 people per agricultural worker. He extends the argument to industry: automation and computers are no longer optional, and the fear that they cause unemployment is contradicted by the experience of expanding economies in the USA, Europe, Japan, and the USSR. The deeper problem, he argues, is a "labour monopoly" that raises production costs, prices Indian goods out of world markets, and forces the taxpayer to subsidise export gaps. He concludes with a pointed warning that if government policy of appeasing labour monopoly continues, it will, like Frankenstein's monster, turn on its own creator. - Uses the Lewis Carroll Red Queen allegory to argue India has made no real progress despite fifteen years of planning effort. - Contrasts Indian agricultural productivity (70% of workers cannot feed the country) with New Zealand (one farmer feeds 96 people on average). - Argues automation and mechanisation are essential and that fears of resultant unemployment are not borne out in any expanding economy. - Identifies 'labour monopoly' and government appeasement of trade unions as the primary cause of rising production costs and loss of export competitiveness. - Calls for a change in government and trade-union attitudes toward technical modernisation as a prerequisite for any planning success. ### POOR PERFORMANCE OF 15 YEARS OF PLANNING IN INDIA *By DR. N. DAS, I.C.S. (Retd.)* Das offers a meticulous data-driven assessment of fifteen years of Indian planning, originally published in the Times of India (February 24, 1966). While acknowledging macro-level gains—national income up 68.7%, the industrial production index rising from 73 to 174.8, and reduced import dependence in key industries—he argues these aggregate figures mask a deeply disappointing human reality. Per capita income at constant prices rose by only Rs.66.9 over fifteen years. Diet surveys show no appreciable quantitative improvement in foodgrain consumption: the daily per capita figure moved from 16.88 oz in 1935–48 to 16.98 oz in 1955–58, and by 1964 had actually fallen below pre-war levels. The housing shortage more than tripled. Unemployment backlogs grew from 4.1 million to an estimated 12 million by the end of the Third Plan, with underemployment pushing the figure to 32 million. Drawing on Galbraith's consumption criterion, Sukhatme's nutrition studies, USAID findings, and Colin Clark's investment-employment ratio, Das concludes that planning has failed to achieve even minimum human needs for food, clothing, and shelter, and calls for a fundamental reappraisal of planning strategy. - National income rose 68.7% in constant prices, 1950–65, but 41.7% of that gain was neutralised by population growth, leaving only about 27% available as per capita increase. - Per capita daily foodgrain availability actually declined from 16.4 oz in 1961 to 15.7 oz in 1964—lower than in the pre-war period 1935–48. - Housing shortage grew from 1.6 million units in 1951 to 5.6 million in 1961, with overcrowding and sanitation conditions essentially unchanged. - Unemployment backlog rose from 4.1 million at the start of the First Plan to 8 million in 1960–61 and an estimated 12 million at the end of the Third Plan; adding underemployed, the figure reaches 32 million. - Applies Galbraith's consumption criterion and Sukhatme's nutrition data to show that the average Indian's diet is only three-quarters of the index for poor countries (excluding India), and that 250 million Indians are undernourished or malnourished. ### PROBLEMS OF THE FOURTH PLAN *By H. T. PAREKH* Parekh addresses the challenge of the Fourth Plan from his vantage point as General Manager of the Industrial Credit and Investment Corporation of India. His central argument is that plan size and resource availability are not the real problems; the crux is the rising cost of living and runaway inflation. He traces the inflationary spiral to a contradictory combination: governments at both central and state levels add to indirect taxes, businesses pass costs on through higher prices, and even price controls paradoxically help industry recoup costs with government backing. The sugar industry is cited as a classic case of government-industry-farmer collusion exploiting the consumer. On agriculture, Parekh welcomes the lesson of the 1965 national emergency—it dispelled complacency about foreign aid and directed attention to genuine self-reliance—and is optimistic that with adequate inputs, agricultural self-sufficiency within five years is achievable. The essay is cut off at printed page 18 (PDF page 20), mid-argument on monetary policy and the limits of credit-squeeze approaches. - Argues that plan outlay size is a misleading metric: each successive plan left more intractable problems than it solved. - Identifies the rising cost of living and inflation as the central challenge for the Fourth Plan, overriding concerns about resource availability. - Critiques the sugar-control system as a textbook case of government, industry, and farmers jointly exploiting the consumer over twenty years. - Welcomes the 1965 withdrawal of US aid as a catalyst for genuine self-reliance and welcomes remunerative foodgrain prices as a stimulus to production. - Argues that the credit squeeze has disproportionately damaged small traders and entrepreneurs who rely on indigenous (informal) bankers charging 15–20% interest, not the organised banking system. --- ## [Primary work] INDIAN SHIPPING URL: https://indianliberals.in/primary-works/indian-shipping-m-a-master-sept6-1959/ ### Summary M. A. Master's 1959 lecture, delivered under the auspices of the Forum of Free Enterprise in Bombay on 23 July 1959 and published as a booklet, is a polemical history of Indian shipping mounted in direct response to Jawaharlal Nehru's pronouncements that the public sector would be the 'basic, strategic, important and advancing sector' of the economy. Master argues that the expansion of the State Trading Corporation and the proposed decentralisation of private enterprise are a betrayal of Mahatma Gandhi's teaching that economic and political power must not concentrate in the hands of the State, and an injustice to an industry that had been built, sustained and brought to its present strength almost entirely by private Indian initiative under extraordinarily hostile conditions. The bulk of the booklet retells the struggle of Indian shipowners against organised British shipping interests during the colonial period.… ### Body ## Summary M. A. Master's 1959 lecture, delivered under the auspices of the Forum of Free Enterprise in Bombay on 23 July 1959 and published as a booklet, is a polemical history of Indian shipping mounted in direct response to Jawaharlal Nehru's pronouncements that the public sector would be the 'basic, strategic, important and advancing sector' of the economy. Master argues that the expansion of the State Trading Corporation and the proposed decentralisation of private enterprise are a betrayal of Mahatma Gandhi's teaching that economic and political power must not concentrate in the hands of the State, and an injustice to an industry that had been built, sustained and brought to its present strength almost entirely by private Indian initiative under extraordinarily hostile conditions. The bulk of the booklet retells the struggle of Indian shipowners against organised British shipping interests during the colonial period. Master traces the destruction of the Swadeshi Steam Navigation Company under Chidambaram Pillai, the freight wars waged by the P & O Group against the Scindia Steam Navigation Company under Narottam Morarjee and Walchand Hirachand, and the techniques by which British lines used cargo boycotts, predatory pricing and political pressure to keep Indian ships from carrying any cargo at all. He recounts how Lord Inchcape tried to buy up Scindia outright, the rate-wars of 1933 forced by the renewal of the National Shipping Industry Agreement, and the legislative battles — Haji's Bill for coastal reservation, the Mercantile Marine Committee, the training ship Dufferin, the Bengal Pilot Service — through which Indian legislators and shipowners painstakingly built a national merchant navy from nothing. Master then carries the story into the early independence period: the failure of the 1947 London negotiations with British shipowners, the inauguration of the India/U.K.-Continental Line and the India–America route in 1947–48, the founding of new lines (Bharat Line, India Steamship Line) and the acquisition of 73 ships by private enterprise between 1946 and 1948. He notes that of Rs. 63.25 crores invested in shipping by the end of the First Plan period, private enterprise raised Rs. 40.72 crores from its own resources while the public-sector Shipping Corporation contributed Rs. 5.14 crores raised from no internal resources at all. The rhetorical purpose is consistent: to convince readers that private enterprise has already 'achieved' what State capitalism is now claiming to deliver, and that any further encroachment on the field will, in Nehru's own commerce minister C. H. Bhabha's earlier words, make 'the growth and development of our mercantile marine disappointingly slow.' The booklet closes with an explicit appeal that private enterprise 'deserves better appreciation, greater recognition and is entitled to all possible encouragement' in building up a merchant navy for a great maritime country. ## Key points - Frames the lecture as a response to Nehru's 1959 statements that the public sector will be 'the basic, strategic, important and advancing sector,' arguing this contradicts Gandhi's view that State power must not be concentrated. - Retells the destruction of the Swadeshi Steam Navigation Company under Chidambaram Pillai and quotes Gandhi: 'Indian shipping had to perish so that British shipping might flourish.' - Documents British shipping techniques — denial of cargo, freight-wars, political pressure — used to drive Indian lines out of even their own coastal waters, citing the testimony of Sir Alfred Watson before the Joint Select Committee of Parliament. - Centres the narrative on the Scindia Steam Navigation Company, Narottam Morarjee and Walchand Hirachand, including Lord Inchcape's failed 1923 attempt to buy out the line and the rate-war following the 1933 National Shipping Industry Agreement. - Treats the Mercantile Marine Committee, the training ship Dufferin, and the Indianisation of the Bengal Pilot Service and wireless operator cadre as achievements of Indian legislators and private enterprise, not the colonial government. - Records the foundation of the Visakhapatnam Shipbuilding Yard by Walchand in 1941 (foundation-stone laid by Rajendra Prasad) and its withering once 'private enterprise even on its own initiative' had no effective Government support. - Surveys post-independence developments — the failed 1947 London negotiations, the inauguration of the India/U.K.-Continental Line on 3 February 1948, the India–America Line, and the acquisition of 73 ships by private enterprise between 1946 and 1948. - Marshals fiscal data to argue that of Rs. 63.25 crores invested in shipping by the end of the First Plan period private enterprise raised Rs. 40.72 crores from its own resources, while public-sector Shipping Corporation contributed Rs. 5.14 crores from no internal resources. - Argues that the new 1956 policy of reserving 'a sufficiently large number of these ships' for the public sector is unjust given private enterprise's record, echoing C. H. Bhabha's 1947 warning that ignoring private enterprise would make mercantile-marine development 'disappointingly slow.' --- ## [Primary work] India's Balance of Payments Problem URL: https://indianliberals.in/primary-works/indias-balance-of-payments-problem-by-jiban-k-mukhopadhyay-july-14-1989/ ### Summary Jiban K. Mukhopadhyay, an economist at Tata Services Ltd., offers a measured diagnosis of India's persistent balance of payments (BOP) difficulty as of mid-1989. He argues that the strain on the external sector is not a fresh crisis but the cumulative product of nearly four decades of an inward-looking trade regime built around import substitution, soft concessional borrowing, and a residual treatment of exports inside the Five Year Plans. Cheap multilateral finance from the World Bank's IDA window, he writes, made India complacent in the 1960s — the decade when world demand would have rewarded a serious export drive — and the country "missed the bus". The central comparative move in the booklet contrasts India's stagnating share of world exports (around 0.5 per cent through the late 1970s and 1980s) with the export-led ascent of the "Four Tigers" and China.… ### Body ## Summary Jiban K. Mukhopadhyay, an economist at Tata Services Ltd., offers a measured diagnosis of India's persistent balance of payments (BOP) difficulty as of mid-1989. He argues that the strain on the external sector is not a fresh crisis but the cumulative product of nearly four decades of an inward-looking trade regime built around import substitution, soft concessional borrowing, and a residual treatment of exports inside the Five Year Plans. Cheap multilateral finance from the World Bank's IDA window, he writes, made India complacent in the 1960s — the decade when world demand would have rewarded a serious export drive — and the country "missed the bus". The central comparative move in the booklet contrasts India's stagnating share of world exports (around 0.5 per cent through the late 1970s and 1980s) with the export-led ascent of the "Four Tigers" and China. Mukhopadhyay is careful, however, not to prescribe an export-led growth model wholesale for "a vast poor and unemployment ridden country like India"; following the Abid Hussain Committee (1985) he urges instead that export growth must progressively supplement national economic growth, with production for export treated as an integral part of domestic production rather than a residual. He then surveys the "pragmatic liberalisation" that began with the 1975-76 import policy and accelerated through the import policies of 1985-88 and 1988-91, alongside a multifaceted export-promotion package (CCS, Duty Drawback, MODVAT, 80 HHC income-tax exemption, eased export credit, and a steady downward adjustment of the rupee). The recent BOP picture, in his reading, is "difficult, but not critical": exports grew about 23 per cent annually over three years to 1988-89, the export-to-import ratio improved from 55 per cent to 73 per cent, and reserves cover three months of imports. Risks remain — fragile invisibles, NRI deposits that are technically repatriable liabilities, a debt-service ratio that climbed to roughly 26 per cent, and protectionist headwinds from the US's "Super 301" naming of India and the prospect of a "Fortress Europe" by 1992 — but he concludes that an external debt-trap is not in close sight provided India does not relapse into over-consumption of foreign exchange on projects that do not earn it back. ## Key points - Frames India's BOP strain as a chronic, structural problem rooted in four decades of inward-looking trade policy, not a sudden crisis. - Argues that cheap IDA concessional finance (US$24bn cumulative 1951-52 to 1986-87, 58% from IDA since 1961) bred export complacency, especially during the high-growth 1960s when 'we missed the bus'. - Documents India's collapsing share of world exports — from nearly 3% in 1938 to 1.1% in 1960, 0.7% in 1970, and stagnant below 0.5% through the 1980s — against the Four Tigers' rise from 2% to 7.2% and China's surge from 0.7% to 1.6% of world exports. - Rejects a wholesale export-led growth model for a labour-surplus India but, citing the Abid Hussain Committee, endorses growth-led exports in which export production is integral to domestic production. - Tracks the gradual liberalisation of import policy from 1975-76 through the 1988-91 policy, framing it as procedural de-bottlenecking rather than genuine liberalisation, since consumer goods remain banned and a mean nominal tariff above 120% persists. - Inventories the post-1985 export-promotion package: action plans on 14 thrust commodities, CCS and Duty Drawback extensions, MODVAT, 100% Section 80 HHC profit exemption, concessional customs duty for export thrust industries, and a steady downward rupee adjustment. - Reads current BOP indicators as encouraging — exports up ~23% annually in rupee terms, export-to-import ratio rising 55%→73% (1985-86 to 1988-89), trade deficit barely growing in dollar terms — while flagging that invisibles cover only 36% of the trade deficit versus 72% in 1980-81. - Warns that NRI deposits (Rs.13,000 crores by end-1988) cushion reserves but remain repatriable liabilities, the debt-service ratio has climbed to ~26%, and protectionist threats (US 'Super 301', 'Fortress Europe' by 1992) demand further liberalisation to lift export competitiveness. --- ## [Primary work] INDIA'S EXTERNAL SECTOR — AGENDA FOR REFORMS URL: https://indianliberals.in/primary-works/indias-external-sector-agenda-for-reforms-mr-s-s-tarapore-april-27-1999/ ### Summary S. S. Tarapore — economist, former Reserve Bank of India Deputy Governor, and chairman of the RBI Committee on Capital Account Convertibility — delivers the 1998 A. D. Shroff Annual Public Lecture (read on 7 April 1999) on the reform of India's external sector. After a personal tribute to Shroff and to Nani Palkhivala, who invited him to speak, Tarapore frames the external sector as 'in a sense, the true success story of Indian economic reforms' since 1991, citing the climb from under $1 billion in foreign currency assets in July 1991 to over $27 billion at the time of the lecture, the fall in external debt from 41 per cent of GDP in 1991-92 to 24 per cent in 1997-98, and the collapse of the debt service ratio from 35.3 to 19.5 per cent over the same period. He nonetheless flags a measurement gap: India's external debt is reported on a contracted-maturity rather than a residual-maturity basis, which understates short-term liabilities. The second section turns to the South East Asian currency crisis. Tarapore argues that India is 'learning precisely the wrong lessons' — drawing comfort from its own controls instead of confronting the deeper causes of the Asian collapse.… ### Body ## Summary S. S. Tarapore — economist, former Reserve Bank of India Deputy Governor, and chairman of the RBI Committee on Capital Account Convertibility — delivers the 1998 A. D. Shroff Annual Public Lecture (read on 7 April 1999) on the reform of India's external sector. After a personal tribute to Shroff and to Nani Palkhivala, who invited him to speak, Tarapore frames the external sector as 'in a sense, the true success story of Indian economic reforms' since 1991, citing the climb from under $1 billion in foreign currency assets in July 1991 to over $27 billion at the time of the lecture, the fall in external debt from 41 per cent of GDP in 1991-92 to 24 per cent in 1997-98, and the collapse of the debt service ratio from 35.3 to 19.5 per cent over the same period. He nonetheless flags a measurement gap: India's external debt is reported on a contracted-maturity rather than a residual-maturity basis, which understates short-term liabilities. The second section turns to the South East Asian currency crisis. Tarapore argues that India is 'learning precisely the wrong lessons' — drawing comfort from its own controls instead of confronting the deeper causes of the Asian collapse. Drawing on Y. C. Richard Wong's Cato Institute lecture of October 1998, he attributes the crisis to opaque banking, defended exchange-rate pegs, currency and maturity mismatches, and weak prudential supervision rather than to capital account convertibility as such. He also pushes back on the post-crisis fashion among 'renowned experts' who he believes have given respectability to capital controls and to a low-interest-rate, fiscal-expansion response that, applied to India, would 'be a sure way of ensuring a severe external payments crisis in 24-36 months'. The third section, on the sequencing of financial liberalisation, situates Tarapore's view inside the academic literature — invoking John Williamson and Molly Mahar's 1998 Princeton survey, Joseph Stiglitz on continued interest-rate controls, Jeffrey Frankel's ICRIER lecture on the theory of the second best, and Rudiger Dornbusch's dictum that 'capital controls are an idea whose time is past'. He concedes that liberalisation must follow a sequence — prudential norms first, then financial-sector reform, then capital-account opening, with trade reform as the indispensable real-sector precondition and inflows liberalised before outflows — but insists that 'caution on proper sequencing of reform is not an advocacy of total paralysis'. He warns specifically against ad hoc suspension of convertibility as a response to outflow pressure, calling such episodes of 'slamming on' controls 'just about the worst kind of system'. The rendered pages end inside the opening of the 'Agenda for External Sector Reforms' section, where Tarapore (echoing Stiglitz's phrase) urges India not to 'slide in its external sector reforms from gradualism to zeroism' and begins his concrete twelve-month agenda: a stable foreign-investment regime, removal of bureaucratic redtape, and — under the sub-heading 'Foreign Institutional Investors' — unfettered FII access to the forward exchange market, dematerialisation of debt and equity, and an end to 'moral' distinctions between 'good' and 'bad' capital flows. The remaining thirteen pages of the booklet, not in this chunk, presumably carry the rest of the agenda and any concluding remarks. ## Key points - External sector reform is presented as the most successful strand of India's post-1991 liberalisation: foreign currency assets up from under $1 billion (July 1991) to over $27 billion; external debt down from 41% of GDP (1991-92) to 24% (1997-98); debt service ratio down from 35.3% to 19.5%. - Reported external-debt figures understate short-term exposure because they use contracted rather than residual maturity; letters-of-credit-based trade credit is excluded. - Tarapore rejects the popular Indian reading of the South East Asian crisis as a verdict against capital-account convertibility; the real causes were opaque banking, defended exchange-rate pegs, currency and maturity mismatches, and weak prudential supervision. - He warns that the post-crisis vogue of low interest rates plus fiscal expansion would, if imported into India, trigger 'a severe external payments crisis in 24-36 months'. - Sequencing matters: trade reform first, then prudential norms and domestic financial-sector reform, then capital-account liberalisation, with inflows liberalised before outflows; but caution must not become paralysis. - Ad hoc suspension of convertibility in response to outflow pressure is 'just about the worst kind of system' because investors pre-empt it with capital flight. - The immediate twelve-month agenda begins with stabilising the foreign-investment policy framework, removing redtape, granting FIIs unfettered access to the forward exchange market, completing dematerialisation in debt and equity segments, and abandoning 'moral' distinctions between FDI and portfolio flows. - He explicitly cites Stiglitz's phrase to argue that India must not let recent events push it 'from gradualism to zeroism' in external-sector reform. --- ## [Primary work] INDIA'S FOOD PROBLEM URL: https://indianliberals.in/primary-works/indias-food-problem-b-r-shenoy-december-1973/ ### Summary Delivered on 30th October 1973 as the Eighth A. D. Shroff Memorial Lecture and published by the Forum of Free Enterprise, B. R. Shenoy's lecture argues that India's January 1972 decision to forego PL 480 and other concessional foodgrain imports was a debacle on par with the 1962 military reverses on the northern frontier. He reconstructs how three years of good harvests, a wheat break-through and an 8.1-million-tonne stock cushion bred a misplaced optimism that collapsed when the 1971-72 harvest failed, procurement fell, public-distribution offtake rose and Bangladesh's food crisis forced a 909,000-tonne export — leaving closing stocks at the end of 1972 at just 3.4 million tonnes. Shenoy then sets out the 1973 arithmetic — a roughly 13.2-million-tonne offtake against an 11.7-million-tonne supply — to show that imports of 8.9 million tonnes are unavoidable if reserves are to be kept intact, yet balance-of-payments weakness makes commercial purchases impossible.… ### Body ## Summary Delivered on 30th October 1973 as the Eighth A. D. Shroff Memorial Lecture and published by the Forum of Free Enterprise, B. R. Shenoy's lecture argues that India's January 1972 decision to forego PL 480 and other concessional foodgrain imports was a debacle on par with the 1962 military reverses on the northern frontier. He reconstructs how three years of good harvests, a wheat break-through and an 8.1-million-tonne stock cushion bred a misplaced optimism that collapsed when the 1971-72 harvest failed, procurement fell, public-distribution offtake rose and Bangladesh's food crisis forced a 909,000-tonne export — leaving closing stocks at the end of 1972 at just 3.4 million tonnes. Shenoy then sets out the 1973 arithmetic — a roughly 13.2-million-tonne offtake against an 11.7-million-tonne supply — to show that imports of 8.9 million tonnes are unavoidable if reserves are to be kept intact, yet balance-of-payments weakness makes commercial purchases impossible. He treats the Soviet loan of two million tonnes as itself a concessional import, and reads the episode as proof that India's two-decade reliance on imports is structural, that per capita consumption sits below the nutritional norm and that domestic 'buffer' procurement is mere pipe-line stock — what Rajagopalachari called transferring blood from the right arm to the left. The positive programme is twofold: zero-inflation budgets (since inflation is a monetary phenomenon that cannot be cured by lathi charges, raids on grocers or price-control edicts) and the urgent revival of PL 480 and other concessional imports while the green revolution matures. Shenoy closes the rendered portion with a survey of the scope for expanding production — citing the Mysore survey, ICAR's J. S. Kanwar on HYV-plus-fertiliser yield gains, and Nehru's 1948 call for self-sufficiency — arguing that even a six per cent rise in output would wipe out the market deficit and turn India into a foodgrain exporter. ## Key points - Frames the January 1972 decision to end PL 480 and other concessional imports as a self-inflicted debacle 'perhaps even more so than the military reverses on our northern frontiers in 1962.' - Reconstructs the slide from a 1970-71 peak output of 108 million tonnes and 8.1-million-tonne stocks to a 3.4-million-tonne closing stock at end-1972, driven by a bad 1971-72 harvest, falling procurement, rising offtake and 909,000 tonnes exported to Bangladesh. - Computes the 1973 supply gap: against an offtake projected at 13.2 million tonnes, total availability is 11.7 million tonnes, leaving imports of 8.9 million tonnes necessary to keep reserves intact. - Argues that balance-of-payments weakness — continuous IMF indebtedness since 1948 and sharply higher world wheat prices — makes commercial purchases impossible, so the USSR's two-million-tonne loan is itself a concessional import. - Dismisses domestically-built 'buffer' stocks as a mere transfer of pipe-line inventory, quoting Rajagopalachari's image of transferring blood from the right arm to the left. - Diagnoses inflation as a monetary phenomenon and prescribes zero-inflation budgets in the hands of the Minister of Finance, rejecting lathi charges, raids on grocers and price-control edicts as remedies for hoarding. - Documents a chronic nutritional deficit — 1972 cereals shortfall of 16.65 million tonnes (20.3 per cent of domestic production) and a 52.8 per cent deficit in pulses — to argue that imports are a high-priority social obligation, not an embarrassment. - Maps the scope for expanding output by citing India's low per-hectare yields against world averages, the Mysore survey on better seeds and rotation, and ICAR's J. S. Kanwar on controlled fertiliser dosages with HYV seeds. --- ## [Primary work] India's Jobless Growth URL: https://indianliberals.in/primary-works/indias-jobless-growth-dr-s-d-naik/ ### Summary This Forum of Free Enterprise booklet is Dr. S. D. Naik's diagnosis of India's "jobless growth" — economic expansion that fails to produce enough formal jobs. After Sunil S. Bhandare's editorial framing (printed pages 3–6), Naik's essay "What needs to be done to tackle it?" opens by defining jobless growth and pointing to a contradiction: India grows at 7–7.5% per year while creating only 4 to 4.5 million jobs against an annual labour-force addition of roughly 12 million. He attributes this paradox to India's failure to build a labour-intensive manufacturing sector along Chinese lines and to the dominance of services, which now employ 30 per cent of the working-age population. Drawing on Labour Bureau, CMIE and McKinsey Global Institute data, Naik shows that 93 per cent of employment sits in the unorganised sector, that rural wages are at a decade low, and that underemployment runs at 35 per cent. He traces a collapse in India's employment elasticity from 0.44 in 1999–2005 to roughly 0.01, well below the 0.3 global average for 2000–2010.… ### Body ## Summary This Forum of Free Enterprise booklet is Dr. S. D. Naik's diagnosis of India's "jobless growth" — economic expansion that fails to produce enough formal jobs. After Sunil S. Bhandare's editorial framing (printed pages 3–6), Naik's essay "What needs to be done to tackle it?" opens by defining jobless growth and pointing to a contradiction: India grows at 7–7.5% per year while creating only 4 to 4.5 million jobs against an annual labour-force addition of roughly 12 million. He attributes this paradox to India's failure to build a labour-intensive manufacturing sector along Chinese lines and to the dominance of services, which now employ 30 per cent of the working-age population. Drawing on Labour Bureau, CMIE and McKinsey Global Institute data, Naik shows that 93 per cent of employment sits in the unorganised sector, that rural wages are at a decade low, and that underemployment runs at 35 per cent. He traces a collapse in India's employment elasticity from 0.44 in 1999–2005 to roughly 0.01, well below the 0.3 global average for 2000–2010. He treats the Make in India target of 100 million new jobs by 2022 as already failed, with $117.35 billion of sanctioned investments scrapped in FY 2017–18, and uses recruitment surges — 25 million applications for fewer than 90,000 Railway posts; 200,000 applications for 1,167 Mumbai constable jobs — as evidence of the formal market's exhaustion. Naik then identifies the ideological culprits. India's roughly 200 labour laws, including the Industrial Disputes Act and the Industrial Employment (Standing Orders) Act of 1946, require government permission for retrenchment or even reassignment in firms with 100+ workers; these protect just 7 per cent of the workforce while preventing labour-intensive production and leaving Vietnam, Bangladesh and Cambodia to absorb the low-end manufacturing share China has vacated. He further faults the inverted duty structure — 10 per cent on raw materials, duty-free finished apparel — and the shocks of demonetisation and a poorly implemented GST, which together shed up to 1.5 million informal textile jobs and shuttered Bhiwandi's power-loom cluster. The rendered pages close at the first item of Naik's eight-point reform agenda: scrapping rigid labour laws. ## Key points - India's economy grows at 7–7.5% per year but creates only 4 to 4.5 million jobs against roughly 12 million annual additions to the labour force — the central 'jobless growth' paradox the booklet investigates. - 93 per cent of total employment lies in the unorganised sector with no formal monthly payment or social security; rural wages are at a decade low while agriculture employs about 45% of the population yet contributes only ~15% of GDP. - Employment elasticity collapsed from 0.44 in 1999–2000 to 2004–05 to about 0.01 by the late 2010s, well below the 0.3 global average for 2000–2010 — each unit of GDP growth now generates almost no jobs. - McKinsey Global Institute analysis shows 4.75 million people entered India's labour market every year between 2012 and 2015 while the economy generated only about seven million jobs in the entire four-year period. - Make in India's target of raising manufacturing to 25% of GDP and creating 100 million new jobs by 2022 has failed; sanctioned investments worth $117.35 billion were scrapped in FY 2017–18 alone. - India's roughly 200 labour laws — particularly the Industrial Disputes Act and the Industrial Employment (Standing Orders) Act, 1946 — protect just 7% of the workforce while making labour-intensive production unviable for the other 93%. - The inverted duty structure (10% duty on raw materials versus duty-free imports of finished apparel and electronics) blocks India from capturing the low-end manufacturing share China has vacated, which has flowed instead to Vietnam, Bangladesh and Cambodia. - Demonetisation in 2016 and a poorly implemented GST in 2017 disproportionately hurt the cash-dependent informal sector — the textile industry alone shed up to 1.5 million informal jobs and the Bhiwandi power-loom cluster near Mumbai shut down. --- ## [Primary work] Industrial Finance and Investment in India URL: https://indianliberals.in/primary-works/industrial-finance-and-investment-in-india-a-d-shroff-october-5-1961/ ### Summary A. D. Shroff's pamphlet, issued by the Forum of Free Enterprise in October 1961, is a two-part primer on how Indian industry raises long-term capital and on how the resulting securities are bought and sold. Part I walks the reader through the architecture of industrial finance: capital expenditure versus working capital, the gatekeeping role of the Controller of Capital Issues, and the distinct functions of equity, cumulative preference, debenture and (now-abolished) deferred capital. Shroff uses the Tata Iron and Steel Company's Rs.30 deferred shares — which rose to Rs.1,600 during the First World War — to illustrate both the upside and the speculative dangers of that vanished instrument. He notes that India lacks the issue houses and underwriting firms of Western markets, surveys the recent founding of ICICI (1955) as a partial remedy, and singles out Section 23-A(1) of the income-tax law as a perverse statute that punishes medium- and small-scale industries by forcing them to distribute 50% of profits and so prevents the very capital formation the country needs. Part II turns to investment as an art rather than a science.… ### Body ## Summary A. D. Shroff's pamphlet, issued by the Forum of Free Enterprise in October 1961, is a two-part primer on how Indian industry raises long-term capital and on how the resulting securities are bought and sold. Part I walks the reader through the architecture of industrial finance: capital expenditure versus working capital, the gatekeeping role of the Controller of Capital Issues, and the distinct functions of equity, cumulative preference, debenture and (now-abolished) deferred capital. Shroff uses the Tata Iron and Steel Company's Rs.30 deferred shares — which rose to Rs.1,600 during the First World War — to illustrate both the upside and the speculative dangers of that vanished instrument. He notes that India lacks the issue houses and underwriting firms of Western markets, surveys the recent founding of ICICI (1955) as a partial remedy, and singles out Section 23-A(1) of the income-tax law as a perverse statute that punishes medium- and small-scale industries by forcing them to distribute 50% of profits and so prevents the very capital formation the country needs. Part II turns to investment as an art rather than a science. Drawing on a thirty-seven-year career as a stockbroker, Shroff defends speculation as the legitimate practice of "taking a view" — the same activity that every industrialist performs — and distinguishes it from gambling, which begins only when a man trades beyond his capacity to support. He sharply rebukes the Prime Minister's remark that stock exchanges should be abolished, arguing that in any non-communist economy they remain indispensable for the liquidity and mobility of capital. The pamphlet closes with an extended case for introducing Mutual Funds (Unit Trusts) to India, citing the explosive growth of these vehicles in the U.S. and U.K. as evidence that they can mobilise small and medium savings, foster the saving habit, and channel a continuous flow of capital into industrial expansion — a model he urges Delhi's short-sighted tax-gatherers to embrace rather than resist. ## Key points - Industrial finance divides into capital expenditure and working capital; under Indian law no company can be floated without the Controller of Capital Issues being satisfied that the capital determined is sufficient. - Shroff surveys the spectrum of instruments — equity, cumulative preference, debentures, and the now-abolished deferred capital — illustrating speculative excess with Tata Iron and Steel's Rs.30 deferred shares that rose to Rs.1,600 during the First World War. - India lacks the Issue Houses and Underwriting Firms common in Western countries; the 1955 founding of ICICI (with 10% American, 20% British and 70% Indian capital plus a Rs.7.5-crore interest-free Government deposit) was a partial remedy that has helped sugar, paper and engineering ventures get off the ground. - Section 23-A(1) of the income-tax law is described as obnoxious because it forces closely-held companies to distribute 50% of profits, suffocating the medium and small-scale industries that should be ploughing earnings back. - Shroff defends the stock exchange and rebukes Nehru's remark that exchanges should be abolished, arguing that liquidity of capital is indispensable to a non-communist economy. - Speculation is reframed as the legitimate act of "taking a view" — the same thing every industrialist does — and is distinguished from gambling, which begins only when one trades beyond capacity. - Investment is an art, not a science: two simple lessons from a 37-year career are that profit taken is never lost and that learning to cut one's losses is the harder discipline. - Shroff makes an extended case for introducing Mutual Funds / Unit Trusts to India on the U.S. and U.K. model, as a mechanism to mobilise small savings and provide a continuous pipeline of capital for industrial expansion. --- ## [Primary work] INDUSTRIAL FINANCE IN A MIXED ECONOMY URL: https://indianliberals.in/primary-works/industrial-finance-in-a-mixed-economy-mr-g-l-mehta-april-14-1972/ ### Summary "Industrial Finance in a Mixed Economy" is the inaugural A. D. Shroff Memorial Address, delivered by G. L. Mehta in Bombay on 14 March 1972 and published the following month by the A. D. Shroff Memorial Trust under N. A. Palkhivala's chairmanship. Mehta — then Special Adviser to ICICI and its former Chairman — opens with a personal tribute to Shroff, his contemporary at Elphinstone College and the London School of Economics, recalling Shroff's role in the Bretton Woods delegation of 1944 (led by Sir Jeremy Raisman, with Chintaman Deshmukh and Shanmukham Chetty), the 1953 Reserve Bank enquiry into private-industry finance, the Bombay Plan and the founding Steering Committee of ICICI. The substantive lecture takes the "mixed economy" as a settled Indian policy — reaffirmed in the Prime Minister's election speeches the previous year — and asks how industrial finance must be organised within it.… ### Body ## Summary "Industrial Finance in a Mixed Economy" is the inaugural A. D. Shroff Memorial Address, delivered by G. L. Mehta in Bombay on 14 March 1972 and published the following month by the A. D. Shroff Memorial Trust under N. A. Palkhivala's chairmanship. Mehta — then Special Adviser to ICICI and its former Chairman — opens with a personal tribute to Shroff, his contemporary at Elphinstone College and the London School of Economics, recalling Shroff's role in the Bretton Woods delegation of 1944 (led by Sir Jeremy Raisman, with Chintaman Deshmukh and Shanmukham Chetty), the 1953 Reserve Bank enquiry into private-industry finance, the Bombay Plan and the founding Steering Committee of ICICI. The substantive lecture takes the "mixed economy" as a settled Indian policy — reaffirmed in the Prime Minister's election speeches the previous year — and asks how industrial finance must be organised within it. Mehta cites Twentieth Century Socialism to the effect that even a socialist economy needs a private sector because socialists value individual freedom, and then surveys the institutional architecture India has built since independence: the Industrial Development Bank of India (IDBI) at the apex, modelled on a Canadian precedent and constituted as a wholly owned subsidiary of the Reserve Bank; the IFCI and ICICI at the all-India level; State Finance Corporations and State Industrial Development Corporations at the state level, with SICOM as a Maharashtra pioneer in spreading industry beyond the Bombay–Poona belt; the NSIC and Reserve Bank guarantee schemes for small industry; and the Life Insurance Corporation and Unit Trust of India as institutional investors in the capital market. Mehta concedes that the consequence of this expansion is that almost all sources of long-term industrial finance now lie with the Government or under Government control, yet he reads the system as workable rather than monolithic, because the diversity of Central and State-level institutions creates competing pulls that 'wind up in a working and workable system.' He defends the still-undefined "joint sector" as a via media for cooperation between Government, private enterprise and the public, naming Oil India, Indian Explosives and Gujarat State Fertilizer Corporation as successful joint ventures. In the closing rendered pages, Mehta turns to medium-and-large industry — the "73 large houses" and those likely to join their ranks. He notes that Government ambivalence has slowed the most dynamic element of the economy in the preceding three or four years, even though monopoly-control legislation has shown that this sector cannot continue on its existing organisational pattern. His prescription is to diversify the ownership base through wider public participation in share capital and through convertibility of loans from finance institutions, so that growth can resume within the mixed-economy framework. He also concedes that, with current tax rates and ceilings on wealth, the main sources of finance must remain with the Government, since corporate and private savings alone cannot fund the industrial growth ahead. The rendered chunk ends at printed page 15 of a 28-page booklet; the lecture's concluding pages were not seen. ## Key points - Inaugural A. D. Shroff Memorial Address, delivered by G. L. Mehta on 14 March 1972 in Bombay and published by the A. D. Shroff Memorial Trust on 14 April 1972 with an introduction by N. A. Palkhivala. - Mehta accepts the "mixed economy" as settled Indian policy and cites Twentieth Century Socialism to argue that even socialist economies require a private sector because socialists value individual freedom. - Tribute to A. D. Shroff covers his role in the Bretton Woods delegation of 1944, the Reserve Bank's 1953 enquiry into private-industry finance, the Bombay Plan, and the founding Steering Committee of ICICI; Mehta notes Shroff's later turn into a strong critic of Government planning. - Survey of India's industrial-finance architecture: IDBI at the apex (constituted as a wholly owned RBI subsidiary on the Canadian precedent), IFCI and ICICI at the all-India level, State Finance Corporations and SIDCs at state level, SICOM as Maharashtra's regional pioneer, NSIC and RBI guarantee schemes for small industry, plus LIC and the Unit Trust of India as institutional investors. - Mehta concedes that almost all organisations mobilising or distributing finance are now Government-owned or Government-controlled, but argues that diversity of Central and State institutions creates competing pulls that produce a workable system rather than a monolith. - He defends the still-undefined "joint sector" as a via media for cooperation between Government, private enterprise and the public, citing Oil India, Indian Explosives and Gujarat State Fertilizer Corporation as successful joint ventures. - Government policy is ambivalent toward the medium-and-large sector — the so-called "73 large houses" — even though it has been the most dynamic element of the economy; the way out is diversification of ownership through wider public participation in share capital and convertibility of finance-institution loans into shares. - Given current tax rates and ceilings on wealth, Mehta accepts that the main sources of industrial finance must remain with the Government, since private and corporate savings cannot keep pace with the growth the economy needs. --- ## [Primary work] INDUSTRIAL FINANCE—SOME TRENDS AND SOME ISSUES URL: https://indianliberals.in/primary-works/industrial-finance-some-trends-and-some-issues-s-s-nadkarni-june-26-1984/ ### Summary Delivered as the 1984 A. D. Shroff Memorial Trust public lecture by S. S. Nadkarni, then Chairman and Managing Director of ICICI, this address surveys the structure and direction of Indian industrial finance three and a half decades after independence. Nadkarni opens by setting aside transient controversies in order to identify abiding trends — quantitative and structural growth of the manufacturing sector, the expansion of the entrepreneurial base, dispersal into backward regions, and a Sixth Plan rebalancing in which public and private sector outlays in mining and manufacturing are projected at roughly equal levels. He stresses that the private sector remains the dominant source of value added (81% of factory output) and that the government has begun signalling room for private investment in fertilizers, communications and modernisation. The core of the lecture analyses the financial system itself — financial institutions, the capital market, and commercial banks — under the long shadow of nationalisation (LIC 1956, banks 1969, general insurance 1973, IDBI Act 1975).… ### Body ## Summary Delivered as the 1984 A. D. Shroff Memorial Trust public lecture by S. S. Nadkarni, then Chairman and Managing Director of ICICI, this address surveys the structure and direction of Indian industrial finance three and a half decades after independence. Nadkarni opens by setting aside transient controversies in order to identify abiding trends — quantitative and structural growth of the manufacturing sector, the expansion of the entrepreneurial base, dispersal into backward regions, and a Sixth Plan rebalancing in which public and private sector outlays in mining and manufacturing are projected at roughly equal levels. He stresses that the private sector remains the dominant source of value added (81% of factory output) and that the government has begun signalling room for private investment in fertilizers, communications and modernisation. The core of the lecture analyses the financial system itself — financial institutions, the capital market, and commercial banks — under the long shadow of nationalisation (LIC 1956, banks 1969, general insurance 1973, IDBI Act 1975). Nadkarni concedes that pervasive government ownership is not about to recede, and shifts the question from ownership pattern to operating efficiency. He quotes Dr. I. G. Patel on the discipline that credit is not a gift or subsidy, and lays out a managerial agenda for the financial system: merit-based selection of top management, continuity in tenure, day-to-day operational freedom, commitment to operational surpluses, and reward structures tied to results. On term finance, he describes the bewildering but defensible architecture of IDBI, ICICI, IFCI, LIC, GIC, UTI, State Financial and Development Corporations, IRCI and the new Export-Import Bank; sanctions rose from Rs. 343 crores in 1971–72 to Rs. 3,278 crores in 1982–83. He defends institutional shareholding (Rs. 627 crores face value at end-1982) against the popular misperception that it has been built through the convertibility clause — less than 10% has — and treats the 1971 convertibility regime as one whose recent liberalisation industry has failed to recognise. He flags worsening debt-equity and current-ratio trends in Indian corporates and argues that institutions must insist on healthier capital structures, even at the cost of underwriting equity that earns nothing in early years. He calls for taxation incentives to enliven the primary equity market, for venture-capital organisations with tax-free dividend and capital-gains status, and for coordination between banks (working capital) and institutions (fixed capital), an absence felt most acutely in sick-unit rehabilitation. The chunk ends inside the Capital Market section, noting that India's roughly 2.75 million shareholders are fewer than those of a single U.S. company like AT&T. ## Key points - Manufacturing sector invested capital roughly tripled from Rs. 10,000 crores (1970-71) to Rs. 30,000 crores (1979-80); non-traditional engineering and chemical industries grew at 8-14% annually against 1.2% for textiles (1951-1982). - Despite nationalisations and public-sector growth, the private sector owned 56% of factory capital and accounted for 81% of value of output and value added in 1978-79; the Sixth Plan projects roughly equal public-private outlays in mining and manufacturing. - Nadkarni accepts that pervasive government influence over banks, LIC, GIC, IDBI etc. is here to stay, and reframes the question from ownership to operational efficiency, quoting Dr. I. G. Patel that 'credit is not a gift or a subsidy'. - He prescribes a managerial code for the financial system: merit-based top management, tenure continuity, operational freedom within policy, commitment to operating surpluses, and reward systems tied to results. - All-India financial institutions' sanctions grew from Rs. 343 crores (1971-72) to Rs. 3,278 crores (1982-83); cumulative sanctions through March 1983 stood at Rs. 16,960 crores against disbursements of Rs. 12,203 crores. - Contrary to popular belief, less than 10% of institutional equity holdings (Rs. 627 crores face value at December 1982) was acquired through the convertibility option; recent liberalisation of the 1971 regime has removed most irritants. - Corporate debt-equity ratios are rising and current ratios deteriorating, an unhealthy trend coincident with rising interest rates; institutions should insist on healthier capital structures and, if necessary, underwrite larger equity. - He urges taxation incentives for the primary equity market, the creation of venture-capital organisations with tax-free dividend and capital-gains status, and a coordination mechanism between commercial banks and term-lending institutions, especially for sick-unit rehabilitation. --- ## [Primary work] Industrial Licensing and Economic Growth in India URL: https://indianliberals.in/primary-works/industrial-licensing-dr-f-a-mehta-may-9-1969/ ### Summary Dr. F. A. Mehta's 1969 Forum of Free Enterprise booklet is a frontal indictment of the Industries (Development and Regulation) Act, 1951 and the industrial-licensing regime it spawned. Writing as Economic Adviser to Tata Industries Ltd., Mehta traces the Act from its 1949 introduction through the 1951 passage, the Avadi Session's 1955 'socialistic pattern of society' resolution, and the 1956 Industrial Policy Resolution that recast private industry as a tolerated junior partner under three Schedules ringfencing state and joint-sector activity. Licensing, he argues, was conceived to serve a 'mixed economy' but was almost immediately conscripted into a second role — as an instrument of central planning — and it is the simultaneous discharge of these two functions, against an over-ambitious Second Plan, that rendered the system both ideologically suspect and operationally incoherent. The core of the booklet catalogues four administrative pathologies: over-licensing irrespective of plan targets (the gap between 998 First-Plan licences and 4,794 Second-Plan licences); under-utilised licensed capacity from chronic shortages of foreign exchange, raw materials and infrastructure (units … ### Body ## Summary Dr. F. A. Mehta's 1969 Forum of Free Enterprise booklet is a frontal indictment of the Industries (Development and Regulation) Act, 1951 and the industrial-licensing regime it spawned. Writing as Economic Adviser to Tata Industries Ltd., Mehta traces the Act from its 1949 introduction through the 1951 passage, the Avadi Session's 1955 'socialistic pattern of society' resolution, and the 1956 Industrial Policy Resolution that recast private industry as a tolerated junior partner under three Schedules ringfencing state and joint-sector activity. Licensing, he argues, was conceived to serve a 'mixed economy' but was almost immediately conscripted into a second role — as an instrument of central planning — and it is the simultaneous discharge of these two functions, against an over-ambitious Second Plan, that rendered the system both ideologically suspect and operationally incoherent. The core of the booklet catalogues four administrative pathologies: over-licensing irrespective of plan targets (the gap between 998 First-Plan licences and 4,794 Second-Plan licences); under-utilised licensed capacity from chronic shortages of foreign exchange, raw materials and infrastructure (units running at 40 per cent of capacity); no proper concept of economic costs in scrutinising applications; and the burdening of licensing with too many policy objectives at once — small-scale promotion, regional dispersal, conservation of foreign exchange, anti-concentration — none of which it can deliver. Mehta walks through the Swaminathan Committee (1964), the Administrative Reforms Commission, and the May 1966 liberalisation that de-licensed 45 industries, conceding genuine procedural gains while insisting the underlying disease persists. The second half attacks the 'concentration of economic power' bogey raised by Dr. R. K. Hazari's reports, the Mahalanobis Committee and the Monopolies Inquiry Commission. Mehta accepts Hazari's own central finding — that licensing itself, by restricting entry, helped produce the concentration it was meant to prevent — and quotes J. R. D. Tata at length on the Catch-22 in which a 'Big Business' house is condemned whether it stays inactive, diversifies into small ventures, or undertakes major capital-intensive projects. The conclusion calls for industrial licensing to be liberated from its 'ideological bouts', supplemented by a dual exchange rate, and stripped of price controls so that the private sector can exceed planned investment targets. The closing tables (1951-1967 licence counts; unit-growth across 30 industries) supply the data backbone. ## Key points - Industrial licensing was conceived to operationalise a 'mixed economy' under the Industries (Development and Regulation) Act, 1951 but was quickly recast as an instrument of central planning after the 1956 Industrial Policy Resolution — Mehta treats this dual mandate as the original sin. - Mehta identifies four administrative defects: over-licensing irrespective of plan targets, no concept of economic costs, no priority discipline, and overloading licensing with multiple incompatible policy objectives. - Quantitative spine: 998 licences in the First Plan, 4,794 in the Second Plan, 4,560 in the Third Plan, with licensed capacity routinely splintered into uneconomic units operating at 40 per cent of plate capacity. - He concedes real procedural liberalisation — the Swaminathan Committee's Letter of Intent procedure (1964), the May 1966 de-licensing of 45 industries — while arguing the underlying ideological captivity persists. - On 'concentration of economic power', Mehta endorses Dr. R. K. Hazari's own finding that licensing itself, by restricting entry, produced the concentration it was meant to prevent. - He invokes J. R. D. Tata's framing that a 'Big Business' house is condemned whether it stays inactive, diversifies into small ventures, or undertakes a major capital-intensive project — illustrated by the Tata Fertiliser Project delays. - Mehta names the political-economy lineage on both sides: M. R. Masani's 1947 booklet's influence on Nehru, G. D. Birla's 1949 assent to a 'primary part' for government, P. C. Mahalanobis's Second Plan formulation, and the contrary cautions of Eugene Black and J. R. D. Tata. - Prescription: dismantle licensing as a regulatory weapon, introduce a dual-priority foreign-exchange rate, remove price controls, and restrict licensing to a narrow positive role of signalling investment opportunities. --- ## [Primary work] Industrial Relations URL: https://indianliberals.in/primary-works/industrial-relations-naval-tata-13aug-1979/ ### Summary This Forum of Free Enterprise booklet, issued in Bombay on 13 August 1979, gathers two industry-side interventions in the late-Janata-era debate on labour law and union power, plus an appendix reproducing a Financial Express report on the simultaneous bonus controversy. The opening essay is an extract from Naval H. Tata's inaugural talk of 29 January 1979 at an ASSOCHAM workshop on the Industrial Relations Bill, framing labour-law reform as a human-rights issue and defending the Janata Government's Bill against trade-union opposition. The second essay reproduces P. C. Mehta's 16 April 1979 Forum lecture, 'Democracy and Labour Movement', arguing that industrial peace in a democracy must rest on law rather than trials of strength. The closing appendix carries the Finance Minister Charan Singh's June 1979 case against extending bonus to railwaymen and Government departmental employees. Together the three pieces present a coordinated employer-side and free-enterprise critique of trade-union militancy, wage-productivity drift, and bonus-as-statutory-right. ### Body ## Summary This Forum of Free Enterprise booklet, issued in Bombay on 13 August 1979, gathers two industry-side interventions in the late-Janata-era debate on labour law and union power, plus an appendix reproducing a Financial Express report on the simultaneous bonus controversy. The opening essay is an extract from Naval H. Tata's inaugural talk of 29 January 1979 at an ASSOCHAM workshop on the Industrial Relations Bill, framing labour-law reform as a human-rights issue and defending the Janata Government's Bill against trade-union opposition. The second essay reproduces P. C. Mehta's 16 April 1979 Forum lecture, 'Democracy and Labour Movement', arguing that industrial peace in a democracy must rest on law rather than trials of strength. The closing appendix carries the Finance Minister Charan Singh's June 1979 case against extending bonus to railwaymen and Government departmental employees. Together the three pieces present a coordinated employer-side and free-enterprise critique of trade-union militancy, wage-productivity drift, and bonus-as-statutory-right. ## Essays ### Industrial Relations *By Naval H. Tata* Naval H. Tata, then President of the Employers' Federation of India, argues that the Industrial Relations Bill before Parliament is a human-rights measure rather than an anti-labour one. He contends that unchecked direct action by trade unions in vital services — Railways, Airlines, Dockyards and Banks — inflicts social injustice on millions of uninvolved citizens, and welcomes the Bill's attempt to identify bargaining agents and curb the proliferation of unions that has followed the 'multiplicity of trade unions' lacuna in existing law. Drawing on West Bengal Chief Minister Jyoti Basu's call to employers to 'explore all possible ways to avoid strike' and on Dr. V. M. Dandekar's critique of the bankmen's strike invoking Karl Marx and social justice, Tata maintains that employers' protest cannot be dismissed as sectional interest and that escalation of wages unlinked to productivity is counter-productive. Tata supports his case with a quantitative survey of organised-labour costs in Bombay and Calcutta — a Rs.25.65 wage per day of an unskilled metropolitan worker, 253 working days a year after 112 days of leave and holidays, and Rs.100/- per day cost for a white-collar employee enjoying 30 days of annual leave plus festival holidays and five days a week — and asks for a hard look at wage-productivity disparities pin-pointed by the Bhoothalingam Committee. He praises Swiss trade unions for voluntarily refusing wage demands and additional management seats, points to the UK consensus emerging between Mr. Callaghan and Mrs. Thatcher that reducing union bargaining power is central to anti-inflation policy, and ends by appealing for industrial peace as a product of goodwill and meaningful mediation, not of unilateral State intervention at the behest of either side. - Frames the Industrial Relations Bill as a human-rights issue that protects citizens, not just workers, from union-led dislocation of essential services. - Rejects the union charge of anti-labour bias and argues the Bill plugs loopholes that employers could otherwise misuse, while curbing the multiplicity of unions. - Cites wage figures — Rs.25.65 per unskilled day in metropolitan Bombay/Calcutta, Rs.100/- per white-collar day — to argue organised labour is not 'sweated' and absentee privileges raise costs by Rs.10.5 lakhs in a 1,000-worker plant. - Endorses the Bhoothalingam Committee's diagnosis of wage-productivity disparity and rejects the Boothalingam Report's dismissal by trade unions. - Holds up Switzerland's referendum-based union restraint and the Callaghan-Thatcher convergence in the UK as comparative models that reduction of union bargaining power is central to anti-inflation policy. - Defends the Janata Government against the union charge of betrayal, arguing a few restraints on 'outsiders in the trade Union hierarchy' are legitimate. ### Democracy and Labour Movement *By P. C. Mehta* P. C. Mehta, a senior personnel executive and member of the Janata Government's Ravindra Varma Committee on comprehensive industrial-relations law, argues that democracy and a robust labour movement must be tethered to the rule of law. India's independent project — rapid economic development with social justice and a socialistic pattern of society — requires that industrial relations answer two questions: under what conditions shall work be done, and how shall its proceeds be divided. Democracy, he argues, is the middle position between totalitarian rule and anarchy; preserving it requires self-imposed restraint and the separation of legislative, judicial and executive functions. The right of organisation and collective bargaining is a fundamental right, but it is being used negatively — to substitute trial of strength for trial of issues — and risks pushing democracy itself toward feudalism by allowing one section to dominate others. Mehta closes by warning that in an agrarian country where the unorganised landless masses live below the poverty line, the organised industrial worker is the elite of the working class, and economic growth — not coercive redistribution of poverty — is the route to social revolution. Constant vigilance, he concludes, is the price of liberty: only an awake public can prevent the nation from drifting either into totalitarianism or anarchy. - Defines industrial relations through two questions: the conditions of work and the division of its proceeds. - Treats democracy as the middle position between totalitarianism and anarchy, requiring separation of legislative, judicial and executive functions. - Argues the right to organise and collectively bargain is fundamental but is being abused into 'trial of strength' that drifts democracy toward feudalism. - Holds that disputes must be settled by law, adjudication or third-party arbitration — not lynch law — to avoid anarchy in modern industrial relations. - Contends the organised industrial worker is already the elite, so privileging that section at the cost of the unorganised landless rural majority is a privileged status, not social justice. - Closes on the Jeffersonian formula that 'constant vigilance is the price of liberty', warning against drift to totalitarianism or anarchy. ### Appendix: The Bonus Issue The appendix reproduces a 14 June 1979 Financial Express dispatch summarising a note from the then Finance Minister and Deputy Prime Minister Mr. Charan Singh, addressed to Prime Minister Morarji Desai, opposing the grant of bonus to railwaymen and other employees of Government departmental undertakings. Charan Singh argues that extending bonus to railwaymen would obligate it for all Central Government employees at an annual cost of about Rs.600 crores against a deficit budget of Rs.1,345 crores for 1979-80, generate inflationary deficit financing harming the poor, and unjustly reward a small organised section: of India's 180-million working population (1971 census), only 30 million are in the wage and salary sector and only 7 million are eligible for bonus. The note also flags lower productivity of Indian Government employees (1,839 hours per year against 2,632-2,696 in Egypt and 2,156-2,192 in the U.K.), railwaymen's existing concessions (free travel, 70 paid holidays vs. 40-45 elsewhere), and the Bhoothalingam Committee's recommendation against bonus to railwaymen and Government departmental staff. A standard Forum disclaimer notes the views are reproduced because they have provoked country-wide discussion and are not necessarily those of the Forum of Free Enterprise. - Reproduces Charan Singh's June 1979 case against extending bonus to railwaymen and Government departmental employees. - Pegs additional cost at Rs.600 crores annually against a Rs.1,345-crore 1979-80 deficit budget. - Argues only ~7 million of India's 180 million workers are bonus-eligible — so bonus reinforces privilege over equity. - Cites lower Indian Government productivity (1,839 hours/year vs. UK 2,156-2,192, Egypt 2,632-2,696, USSR 2,248). - Invokes the Bhoothalingam Committee's standing recommendation against bonus to railwaymen and departmental employees. --- ## [Primary work] Inflation & Economic Growth URL: https://indianliberals.in/primary-works/inflation-and-economic-growth-december-1973/ ### Summary H. V. R. Iengar, a former Governor of the Reserve Bank of India, delivered this inaugural address at a seminar on inflation organised by the Institute for Financial Management and Research in Madras on 14 December 1973. The Forum of Free Enterprise issued the talk as a pamphlet, prefaced with a Eugene Black epigraph that private enterprise must be accepted "not as a necessary evil but as an affirmative good." Iengar accepts the orthodox diagnosis — that inflation is the joint product of an enormous expansion of the money supply and a shortfall of production — and uses his lecture to interrogate the political and administrative reasons why neither half of that equation is being corrected. The first part of the address concentrates on the money side. Iengar argues that the Fifth Plan's contemplated expansion of government outlay, financed in alarming proportions by Bank credit, is driving monetary expansion, and that ministerial pleas of "inescapability" for every budget head do not survive scrutiny; on his own estimate as much as 40 per cent of departmental expenditure simply "goes down the drain" through incompetence, corruption and pilferage.… ### Body ## Summary H. V. R. Iengar, a former Governor of the Reserve Bank of India, delivered this inaugural address at a seminar on inflation organised by the Institute for Financial Management and Research in Madras on 14 December 1973. The Forum of Free Enterprise issued the talk as a pamphlet, prefaced with a Eugene Black epigraph that private enterprise must be accepted "not as a necessary evil but as an affirmative good." Iengar accepts the orthodox diagnosis — that inflation is the joint product of an enormous expansion of the money supply and a shortfall of production — and uses his lecture to interrogate the political and administrative reasons why neither half of that equation is being corrected. The first part of the address concentrates on the money side. Iengar argues that the Fifth Plan's contemplated expansion of government outlay, financed in alarming proportions by Bank credit, is driving monetary expansion, and that ministerial pleas of "inescapability" for every budget head do not survive scrutiny; on his own estimate as much as 40 per cent of departmental expenditure simply "goes down the drain" through incompetence, corruption and pilferage. He couples this with a withering account of declining administrative discipline — unauthorised state-government overdrafts on the Reserve Bank dressed up at year-end, the perversion of election finance into a market for black money, and a politicised trade-union movement whose strikes hold the country to ransom. Through the discussion he keeps returning to Jayaprakash Narayan's appeal for moral renewal and contrasts Indian sloppiness with the post-revolutionary discipline he observes in China. The second half turns to production, especially agriculture, which Iengar reminds his audience supplies nearly half of national income. Citing a National Council of Applied Economic Research projection of food supply to 1980-81 and Dr. Koteswaran's work on drought recurrence, he insists India must plan for repeated droughts and a competently run buffer stock and distribution system, rather than repeat the recently-collapsed wholesale wheat takeover. On industry he distinguishes between "monopoly houses" and merely "big houses," accusing government of conflating the two on ideological grounds and so denying reputable firms the chance to expand and diversify. He closes by endorsing Sir Arthur Lewis's view that the prime task is to eliminate the road-blocks to sustained growth, warning that without great moral leadership inflation will lead India "down the slippery path." An appendix reproduces an excerpt from an April/June 1973 IPA Review (Institute of Public Affairs, Australia) editorial on "Keynes & Inflation." It argues that Keynes himself was a fierce opponent of inflation — citing his lines on how price changes "redistribute Fortune's favours so as to frustrate design and disappoint expectation" — and that the Keynesian remedy for deflation must be inverted in present conditions: the way to cure chronic inflation is to reduce government spending and shrink "the impecuniosity of governments." The rendered chunk ends mid-appendix in the discussion of Keynes's "inflationary gap" concept. ## Key points - Iengar diagnoses the 1973 inflation as a money-supply explosion meeting a production shortfall in both agriculture and industry, and insists the cure lies on both sides simultaneously. - He treats deficit financing of an expanding Fifth Plan budget through Bank credit as the principal monetary driver, and proposes a procedural rule requiring the central government to consult — and disclose disagreements with — the Reserve Bank before crossing ceilings. - Administrative decay is treated as an inflation problem in its own right: he estimates that up to 40 per cent of departmental expenditure is wasted, and points to unauthorised state overdrafts on the RBI that are quietly recycled each year-end. - Political corruption — driven by costly elections and a law that bars corporate donations — is identified as the chief generator of black money and a tax on the productive economy. - On agriculture, he draws on NCAER projections and Dr. Koteswaran's drought-recurrence data to argue for a permanent, honestly run buffer stock and distribution system rather than ad hoc state takeovers of wholesale trade. - On industry, he distinguishes monopoly practices from mere bigness and accuses the post-Monopolies Commission legislation of penalising large reputable firms on ideological grounds. - Strikes and lock-outs in public-sector undertakings, he argues, show that nationalisation has not produced the disciplined workforce its philosophy assumed, and that political parties must let trade unions act as trade unions. - The appended IPA Review extract reads Keynes against the Keynesians, marshalling Keynes's own writings on the distributive injustice of inflation to argue that in conditions of over-full employment the prescription should be reduced — not expanded — government spending. --- ## [Primary work] Inflation Endangers Economic Progress URL: https://indianliberals.in/primary-works/inflation-endangers-a-d-shroff-apr7-1961/ ### Summary This Forum of Free Enterprise pamphlet, based on a lecture A. D. Shroff delivered in Bombay on 8 March 1961, presents a sustained critical reading of the Union Budget for 1961-62. Shroff opens by faulting the year's Economic Survey for departing from the dispassionate tone of its 1959-60 predecessor — it is, in his words, "heavily loaded with a certain bias and ideology" — and uses the Budget as a "photographic presentation" through which to test whether the closing Second Five-Year Plan has actually paid for the price rises and balance-of-payments strain it has caused. The bulk of the pamphlet works through the Finance Minister's proposals item by item. Shroff documents a revenue deficit of about Rs. 60 crores to be covered through Rs. 57 crores of new customs and excise duties and Rs. 3 crores of direct taxes, with public expenditure climbing from Rs. 998 crores in 1951-52 to Rs. 2,557 crores in 1960-61. He cites a then-recent National Council of Applied Economic Research study led by Dr. P. S.… ### Body ## Summary This Forum of Free Enterprise pamphlet, based on a lecture A. D. Shroff delivered in Bombay on 8 March 1961, presents a sustained critical reading of the Union Budget for 1961-62. Shroff opens by faulting the year's Economic Survey for departing from the dispassionate tone of its 1959-60 predecessor — it is, in his words, "heavily loaded with a certain bias and ideology" — and uses the Budget as a "photographic presentation" through which to test whether the closing Second Five-Year Plan has actually paid for the price rises and balance-of-payments strain it has caused. The bulk of the pamphlet works through the Finance Minister's proposals item by item. Shroff documents a revenue deficit of about Rs. 60 crores to be covered through Rs. 57 crores of new customs and excise duties and Rs. 3 crores of direct taxes, with public expenditure climbing from Rs. 998 crores in 1951-52 to Rs. 2,557 crores in 1960-61. He cites a then-recent National Council of Applied Economic Research study led by Dr. P. S. Lokanathan to argue that direct taxation has reached a ceiling: rates so high that large-income earners have nothing left to invest, joint-stock company savings are falling, and the government is forced back onto indirect taxes. The result is excises on 14 new commodities and rate increases on 18 more — kerosene, sugar, matches, vegetable products, radios, tobacco, paper, cement, fuel oils, motor vehicles — which Shroff says will be passed straight to consumers and choke the very industries meant to absorb agricultural labour. Shroff's central charge is that the budget institutionalises inflation. Deficit financing of Rs. 1,200 crores under the Second Plan has driven a 25 per cent rise in wholesale prices and a 43 per cent rise in the working-class cost-of-living index since 1949. The depreciation of the rupee, he warns, is now visible to outsiders: 100 Hong Kong dollars cost Rs. 116 instead of Rs. 83, and the pound sterling trades at Rs. 18 on the unofficial Bombay market against a par value of Rs. 13.34. With the Third Plan demanding a capital outlay of Rs. 12,000 crores (including Rs. 2,600 crores of foreign exchange) at a moment when India must repay Rs. 600 crores of foreign loans by 1966 and foreign balances have collapsed from Rs. 746 crores to Rs. 157 crores, Shroff closes with a plea for organised public opinion as the "only saving feature" left for stabilising the economy. ## Key points - Opens by accusing the Economic Survey 1960-61 of ideological bias compared with the more dispassionate 1959-60 Survey. - Budget 1961-62 proposes Rs. 57 crores of new customs/excise duties and Rs. 3 crores of direct taxes to cover an estimated Rs. 60 crores revenue deficit. - Total public expenditure has risen from Rs. 998 crores in 1951-52 to Rs. 2,557 crores in 1960-61; Second Plan deficit financing reached Rs. 1,200 crores. - Cites NCAER study led by Dr. P. S. Lokanathan to argue direct taxation has hit a ceiling — corporate savings are falling and the net investment rate is in decline. - Excise duty extended to 14 new commodities and raised on 18 existing ones, including kerosene, sugar, matches, radios, tobacco, paper, cement and motor vehicles. - Wholesale prices rose 25 per cent across the Second Plan; the all-India working-class cost-of-living index is at its highest since 1949. - Internal rupee depreciation now visible abroad: 100 Hong Kong dollars cost Rs. 116 versus Rs. 83 a year earlier; pound sterling trades at Rs. 18 unofficially against the par value of Rs. 13.34. - Third Plan needs Rs. 12,000 crores capital outlay (Rs. 2,600 crores in forex) while India must repay Rs. 600 crores of foreign loans by 1966 and foreign balances have fallen from Rs. 746 crores to Rs. 157 crores. - Closes by arguing organised public opinion is the only remaining instrument for stabilising the economy. --- ## [Primary work] Inflation in Brazil—the Principles of Monetary Correction URL: https://indianliberals.in/primary-works/inflation-in-brazil-the-principles-of-monetary-correction-roberto-de-oliveira-campos-15-october-1975/ ### Summary This Forum of Free Enterprise booklet reproduces Roberto de Oliveira Campos's inaugural Chairman's lecture, delivered at the London Stock Exchange on 19 November 1974 and published in Bombay in October 1975. Campos, a former Brazilian Minister of Finance and then Ambassador to the United Kingdom, sets out the rationale and architecture of Brazil's policy of generalised monetary correction — that is, indexation — as a tool for living with chronic inflation rather than eradicating it. He opens with a diagnosis of the inflationary malaise afflicting the industrial West after 1971: money has lost its functions as store of value and unit of account, inflation is now structurally embedded in modern social structures, the conventional medicine of monetary and fiscal policy produces stagflation, and even mature democracies feel the political strain of two-digit price rises. From this diagnosis Campos draws a heterodox conclusion.… ### Body ## Summary This Forum of Free Enterprise booklet reproduces Roberto de Oliveira Campos's inaugural Chairman's lecture, delivered at the London Stock Exchange on 19 November 1974 and published in Bombay in October 1975. Campos, a former Brazilian Minister of Finance and then Ambassador to the United Kingdom, sets out the rationale and architecture of Brazil's policy of generalised monetary correction — that is, indexation — as a tool for living with chronic inflation rather than eradicating it. He opens with a diagnosis of the inflationary malaise afflicting the industrial West after 1971: money has lost its functions as store of value and unit of account, inflation is now structurally embedded in modern social structures, the conventional medicine of monetary and fiscal policy produces stagflation, and even mature democracies feel the political strain of two-digit price rises. From this diagnosis Campos draws a heterodox conclusion. Because shock-treatment risked wrecking the entrepreneurial class and provoking a political backlash, Brazil after 1964 chose gradualism, attacking instead the five textbook 'evils of inflation': erosion of savings, wage disorder, balance-of-payments disequilibrium, disincentive to long-gestation investment, and tax-system distortions. Between 1964 and 1967 a battery of devices was implanted to neutralise each of these: generalised indexation of all forms of saving and medium- and long-term loans; a statutory wage formula combining a 12- to 24-month real-wage average with a productivity coefficient and a 'half-the-expected-inflation' residual; a tax reform that revalued capital assets and indexed the exemption threshold for low-income groups; and a 'crawling-peg' mini-devaluation regime tied to internal wholesale prices. The author then weighs the results. Inflation, he reports, fell from roughly 100% in early 1964 to between 15 and 20% in 1972–73, while real growth ran above 10% a year, exports quadrupled and foreign-exchange reserves moved from $6.4 billion in deficit to almost $5.5 billion despite the oil shock. He stresses that indexation is exportable only with caveats — it presupposes ingrained inflationary expectations, a constitutional balanced-budget rule, and political tolerance for the wage formula — and warns repeatedly against overclaiming. Indexation, he concludes, neither cures inflation nor causes it; like a thermometer, it registers fever without producing it, and its real virtue is to preserve savings, investment incentives and democratic stability while the longer fight against inflation is fought. The booklet closes with the editorial disclaimer that the views are not necessarily those of the Forum. ## Key points - Frames post-1971 Western inflation as a structural 'malaise' that is unlikely to yield to conventional anti-inflationary shock treatment. - Argues that the choice between 'stop-go' and stagflation has made gradualist cohabitation with inflation, not eradication, the realistic policy goal. - Catalogues five textbook evils of inflation — savings erosion, wage disorder, BoP disequilibrium, investment disincentive and tax distortion — that Brazilian indexation was designed to neutralise. - Describes the components of the Brazilian system: generalised indexation of savings instruments, the statutory wage formula, indexed tax reform, and the 'crawling-peg' exchange-rate mini-devaluation. - Reports headline results: inflation falling from c.100% in 1964 to 15–20% by 1972–73, real growth above 10%, exports rising from $1.5bn to a projected $7.5bn, and reserves swinging from –$6.4bn to nearly $5.5bn. - Identifies the preconditions for exportability of the Brazilian model — chronic inflation, a constitutional balanced-budget rule, wage-formula political viability — and is sceptical other countries can meet them. - Insists indexation is not a cure for inflation but a means of preventing its worst distortions on savings, investment and income distribution. - Traces the intellectual ancestry of indexation through William Fleetwood, Joseph Lowe, Jevons, Marshall, Irving Fisher and Keynes, citing Milton Friedman's IEA Occasional Paper 41 as a contemporary reference. --- ## [Primary work] INFLATION IN INDIA URL: https://indianliberals.in/primary-works/inflation-in-india-l-g-bapat/ ### Summary Prof. L. G. Bapat's prize-winning booklet for the Forum of Free Enterprise (Bombay, 15 November 1972) walks a general Indian reader through the theory and the Indian record of inflation. Bapat opens with definitions — inflation is an unanticipated, unprovided, rapid and substantial rise in prices above their normal level, with 'suppressed' inflation revealing itself through queues, black markets and hoarding when prices are held down by controls. He then canvasses the standard mechanisms: Fisher's Quantity Theory and the German hyperinflation of the 1920s for the monetary channel; Lerner's account of inflation as 'real changes' people did not intend; Charles Schultze's asymmetric ratchet in which prices rise but never fall; and Hayek's framing of inflation as a symptom of disequilibrium. From these he extracts the textbook trio of demand-pull, cost-push and administrative inflation. Applied to India, Bapat treats money supply as the central villain. Citing K. N. C.… ### Body ## Summary Prof. L. G. Bapat's prize-winning booklet for the Forum of Free Enterprise (Bombay, 15 November 1972) walks a general Indian reader through the theory and the Indian record of inflation. Bapat opens with definitions — inflation is an unanticipated, unprovided, rapid and substantial rise in prices above their normal level, with 'suppressed' inflation revealing itself through queues, black markets and hoarding when prices are held down by controls. He then canvasses the standard mechanisms: Fisher's Quantity Theory and the German hyperinflation of the 1920s for the monetary channel; Lerner's account of inflation as 'real changes' people did not intend; Charles Schultze's asymmetric ratchet in which prices rise but never fall; and Hayek's framing of inflation as a symptom of disequilibrium. From these he extracts the textbook trio of demand-pull, cost-push and administrative inflation. Applied to India, Bapat treats money supply as the central villain. Citing K. N. C. Pillai of the Central Statistical Organisation, he reports a 0.92 correlation between money supply growth and the wholesale price index of the succeeding year over 1950-51 to 1960-61, and updates the picture in his own Tables I and II with RBI data for 1951-71. He argues that government has expanded money supply 'enormously' through deficit financing — ad hoc treasury bills, RBI purchase of nearly one-third of Government of India rupee loans, and rising state and co-operative bank securities held against RBI advances — rather than through transparent budgetary operations. Production constraints make the inflationary gap impossible to close on the supply side in an underdeveloped country; Table III shows that the marketed surplus of rice and wheat fell even as output rose, intensifying foodgrain prices. On taxation, Bapat is unusually careful. Direct taxes, he argues, are on balance deflationary; indirect taxes raise prices but only once and by perhaps 10 per cent cumulatively over two decades. Measured against Colin Clark's 20-25 per cent of national income threshold, Indian taxation at 18.7 per cent in 1967-68 was below the inflationary line, though the scope for further increase is limited. Cost-push pressure is real — coal-mine productivity rose 33 per cent between 1961 and 1968 while money wages rose 61.5 per cent — but administrative inflation of the American kind is absent because India has no genuine monopolies. The booklet ends with a five-point programme: a surplus budget, public-debt policy that mobilises true savings, steps to enlarge the marketed surplus, a check on further taxation, and a rapid rise in worker productivity. ## Key points - Defines inflation as an unanticipated, unprovided, rapid and substantial rise in prices above the normal level, with 'suppressed' inflation manifesting in queues, black markets, hoarding and rationing. - Surveys monetary, demand-pull, cost-push and administrative theories — citing Fisher's Quantity Theory, Lerner on unintended 'real changes', Schultze's downward-rigid prices, and Hayek's disequilibrium account. - Uses K. N. C. Pillai's 1950-51 to 1960-61 study from the Central Statistical Organisation, which found a 0.92 correlation between money-supply growth and the next year's wholesale prices, and a 0.84 coefficient for later years. - Tables I-II compile RBI data showing money supply rising from Rs. 1,804 crores in 1951-52 to Rs. 6,987 crores in 1970-71, and the RBI purchasing nearly one-third of all Government of India rupee loans. - Argues deficit financing — ad hoc treasury bills and RBI absorption of government paper — is the principal Indian channel for unwarranted money creation, supplemented by state and co-operative bank borrowings. - Table III shows the marketed surplus of rice and wheat falling even as production rises, so the inflationary gap cannot be closed on the supply side in an underdeveloped economy. - Direct taxes are net deflationary; indirect taxes raised the 1967-68 price level by about 10 per cent but only once, and 1967-68 taxation at 18.7 per cent of national income was below Colin Clark's 20-25 per cent inflationary threshold. - Coal-mine productivity rose from 0.48 to 0.64 tonne per manshift between 1961 and 1968 (33 per cent) while per-capita earnings rose 61.5 per cent — confirming cost-push inflation; but with no real monopoly, administrative inflation is absent. - Closes with a five-point remedy: a surplus budget, a public-debt policy mobilising true savings, steps to enlarge the marketed surplus, a check on further taxation, and rapid productivity improvement. --- ## [Primary work] INFLATION IN INDIA URL: https://indianliberals.in/primary-works/inflation-in-india-1964-1975-january-1975/ ### Summary Prof. L. G. Bapat's prize-winning Forum of Free Enterprise essay is a textbook-style diagnosis of post-Independence Indian inflation, written for a general audience but anchored in the monetary economics of Fisher, Lerner, Hayek and Schultze. Bapat begins by defining inflation as an unanticipated, unprovided rise in prices above their normal level — and insists that in a controls-and-rationing regime it surfaces not as visible price increases but as queues, black markets and hoarding, i.e., 'suppressed' inflation. The villain, he argues, is the persistent attempt of under-developed economies to consume and invest more than they actually produce, a temptation aggravated by ambitious Keynesian-flavoured development plans copied from the West. The core of the booklet is empirical. Drawing on RBI 'Currency and Finance' reports, NCAER's 'Management of Public Debt in India' and the work of K. N. C. Pillai of the Central Statistical Organisation, Bapat tabulates money supply, real national income and wholesale prices from 1951-52 through 1970-71.… ### Body ## Summary Prof. L. G. Bapat's prize-winning Forum of Free Enterprise essay is a textbook-style diagnosis of post-Independence Indian inflation, written for a general audience but anchored in the monetary economics of Fisher, Lerner, Hayek and Schultze. Bapat begins by defining inflation as an unanticipated, unprovided rise in prices above their normal level — and insists that in a controls-and-rationing regime it surfaces not as visible price increases but as queues, black markets and hoarding, i.e., 'suppressed' inflation. The villain, he argues, is the persistent attempt of under-developed economies to consume and invest more than they actually produce, a temptation aggravated by ambitious Keynesian-flavoured development plans copied from the West. The core of the booklet is empirical. Drawing on RBI 'Currency and Finance' reports, NCAER's 'Management of Public Debt in India' and the work of K. N. C. Pillai of the Central Statistical Organisation, Bapat tabulates money supply, real national income and wholesale prices from 1951-52 through 1970-71. He shows that Pillai's correlation coefficient of 0.92 between excess money supply and the following year's prices broadly holds for India in the 1960s, and traces the inflation of 1966-68 to a 9.3 per cent jump in money supply against a national-income growth of only 0.9 per cent. He singles out a less-visible channel of monetary expansion: RBI purchases of central-government rupee loans, which by the late 1960s absorbed nearly two-fifths of total issues and amounted, with ad-hoc treasury bills and overdrafts, to large-scale 'back-door deficit financing'. Bapat then tests rival explanations and largely rejects them for Indian conditions. Direct taxes, he argues, are net disinflationary; indirect taxes raise the price level only once, not cumulatively; and total taxation in 1967-68, at 18.7 per cent of national income, was still below Colin Clark's 25 per cent inflationary threshold. Cost-push pressure does exist — coal miners' wages outran productivity sharply between 1961 and 1968 — but administrative or oligopolistic inflation 'of the type found in the U.S.A.' is essentially absent. A separate strand of the argument concerns the agricultural marketed surplus: rice and wheat production rose through the 1960s, but the share reaching the market actually fell, because rising foodgrain prices let farmers consume more on the farm and demand fancy manufactured goods to spend the windfall on. The booklet closes with a five-point remedy: a surplus Union budget; a public-debt policy that mobilises genuine savings instead of monetising deficits; steps to draw out a larger marketed surplus from agriculture; a halt on further tax increases; and rapid productivity gains by workers. Throughout, Bapat treats inflation as a policy failure rather than an external shock, and an inefficient public sector — Rs. 3,033 crores invested over two decades with little to show in profits — as one of the structural reasons monetary expansion has not been matched by goods. ## Key points - Defines inflation as an unanticipated, unprovided, substantial rise in prices above the normal level; under controls it manifests as queues, black markets and hoarding rather than visible price rises. - Locates the root cause of inflation in under-developed economies' attempt to consume and invest in excess of what they actually produce, aggravated by ambitious development plans modelled on the post-Depression West. - Reproduces RBI data on money supply, national income and wholesale prices from 1951-52 to 1970-71 and uses K. N. C. Pillai's 0.92 correlation between excess money supply and next-year prices as the empirical backbone. - Identifies RBI purchases of Government rupee loans — about one-third of the total by the late 1960s — together with ad-hoc treasury bills and overdrafts as a covert channel of deficit financing in addition to the open budget. - Shows that even as rice and wheat production grew through the 1960s, the marketed surplus fell, because high foodgrain prices induced farmers to consume more on the farm and to chase manufactured consumer goods. - Rejects taxation as a major inflationary force in India: direct taxes are disinflationary, indirect-tax effects are one-shot, and 1967-68 total taxation at 18.7 per cent of national income falls short of Colin Clark's 25 per cent threshold. - Argues that administrative or oligopolistic inflation of the U.S. type is absent in India, but cost-push pressure exists where wages have outrun productivity, as in coal mining between 1961 and 1968. - Prescribes a five-point cure: a surplus budget, a public-debt policy that taps real savings, larger agricultural marketed surplus, no further tax increases, and a rapid lift in worker productivity. --- ## [Primary work] INFLATION THREATENS INDIAN ECONOMY URL: https://indianliberals.in/primary-works/inflation-threatens-indian-economy-a-d-shroff-mar8-1960/ ### Summary A. D. Shroff's pamphlet, based on a lecture on the Union Budget 1960/61 delivered in Bombay on 10 March 1960, reads the Government of India's budget against the Finance Ministry's own Economic Survey and argues that the Survey's sober warnings have been ignored. Shroff seizes on the Survey's admission that wholesale prices have risen about 20 per cent since the start of the Second Plan to build a sustained case that India is being pushed into a structural inflation by reckless public expenditure outrunning the supply of goods and services. He commends the anonymous Economic Survey writer for objectivity but accuses the Finance Minister of refusing to accept that diagnosis when framing the budget. The substance of the critique is a planning-critique grounded in monetary and fiscal arithmetic. Shroff tracks civil expenditure rising from Rs. 35.56 crores in 1948-49 to Rs. 233.35 crores in 1960-61, foreign exchange reserves dropping by Rs. 2,900 crores since 1956 with Rs.… ### Body ## Summary A. D. Shroff's pamphlet, based on a lecture on the Union Budget 1960/61 delivered in Bombay on 10 March 1960, reads the Government of India's budget against the Finance Ministry's own Economic Survey and argues that the Survey's sober warnings have been ignored. Shroff seizes on the Survey's admission that wholesale prices have risen about 20 per cent since the start of the Second Plan to build a sustained case that India is being pushed into a structural inflation by reckless public expenditure outrunning the supply of goods and services. He commends the anonymous Economic Survey writer for objectivity but accuses the Finance Minister of refusing to accept that diagnosis when framing the budget. The substance of the critique is a planning-critique grounded in monetary and fiscal arithmetic. Shroff tracks civil expenditure rising from Rs. 35.56 crores in 1948-49 to Rs. 233.35 crores in 1960-61, foreign exchange reserves dropping by Rs. 2,900 crores since 1956 with Rs. 600 crores of new borrowings to be repaid 1960-67, and warns that a Government boasting about subscriptions to its capital issues and a booming stock exchange is mistaking symptoms of inflation for signs of economic health. He endorses M. R. Masani's Lok Sabha quip that the Finance Minister has become 'a prisoner of the Plan,' faults the Karachi Congress salary cap for being silently discarded against the original spirit advocated by Mahatma Gandhi, and dismisses the Integrated Pattern of Taxation as a disincentive to save and invest, citing estate duty receipts of barely Rs. 3 crores against an overall budget of Rs. 980 crores as proof that prestige tax instruments have failed. In the closing pages Shroff broadens the indictment from macroeconomic mismanagement to administrative incompetence: excise duties piled on kerosene, sugar, cloth and other essentials feed inflation; small savings campaigns cannot succeed when citizens doubt the future purchasing power of the rupee; and a Government that cannot keep money-order forms in a Matunga post office, sink a well for a village near Delhi, or wind up six hundred dormant joint-stock companies has no moral claim to spend thousands of crores on wasteful projects. The pamphlet ends with a Forum-style aphorism affirming that 'Free Enterprise was born with man and shall survive as long as man survives.' ## Key points - Reads the 1960/61 Budget against the Finance Ministry's Economic Survey and accuses the Finance Minister of ignoring the Survey's own warnings on inflation and imbalance. - Anchors the polemic on the Survey's admission that wholesale prices have risen about 20 per cent since the start of the Second Plan. - Tracks civil expenditure climbing from Rs. 35.56 crores in 1948-49 to Rs. 233.35 crores in 1960-61 as evidence of a bureaucratic state outgrowing the country's productive base. - Endorses M. R. Masani's Lok Sabha description of the Finance Minister as 'a prisoner of the Plan,' framing the budget as ideologically constrained rather than economically reasoned. - Calls the boom on the stock exchange and over-subscription of capital issues symptoms of monetary disorder, not signs of economic health. - Faults the abandonment of the Karachi Congress ministerial salary norm advocated by Mahatma Gandhi as evidence that planning has eroded the rupee while ministers compensate themselves for the depreciation. - Attacks the Integrated Pattern of Taxation and expenditure tax as disincentives to saving and capital formation, citing estate duty yields of barely Rs. 3 crores against a Rs. 980-crore budget gap. - Lists administrative failures — Matunga post office shortages, an un-dug well near Delhi, 600 unwound joint-stock companies, telephone waitlists — to argue the State has no warrant to spend more until it can perform basic functions. --- ## [Primary work] Infrastructure, Public Goods and Markets URL: https://indianliberals.in/primary-works/infrastructure-public-goods-and-markets-kirit-s-parekh/ ### Summary Delivered as the Dr. M. H. Gopal Memorial Lecture at the 81st Annual Conference of the Indian Economic Association in December 1998 and reprinted by the Forum of Free Enterprise, Kirit S. Parekh's lecture diagnoses India's infrastructure deficit and prescribes market-based remedies. He opens with a survey of bottlenecks — peak power shortages around 10 percent, congested ports that impose demurrage running into hundreds of crores, crawling Mumbai traffic, polluted rivers and air, and a telephone density of 13 per 1000 persons against a world average of 110. The root cause, he argues, is chronic underinvestment driven by public-sector enterprises that cannot charge appropriate user fees, by political capture (notably the agricultural electricity subsidy that has grown from 3.9 percent of demand in 1950-51 to nearly 30 percent today) and by overstaffed State Electricity Boards whose T&D losses largely mask outright theft. The rest of the lecture builds a positive programme for using markets and price signals to deliver infrastructure and manage public goods.… ### Body ## Summary Delivered as the Dr. M. H. Gopal Memorial Lecture at the 81st Annual Conference of the Indian Economic Association in December 1998 and reprinted by the Forum of Free Enterprise, Kirit S. Parekh's lecture diagnoses India's infrastructure deficit and prescribes market-based remedies. He opens with a survey of bottlenecks — peak power shortages around 10 percent, congested ports that impose demurrage running into hundreds of crores, crawling Mumbai traffic, polluted rivers and air, and a telephone density of 13 per 1000 persons against a world average of 110. The root cause, he argues, is chronic underinvestment driven by public-sector enterprises that cannot charge appropriate user fees, by political capture (notably the agricultural electricity subsidy that has grown from 3.9 percent of demand in 1950-51 to nearly 30 percent today) and by overstaffed State Electricity Boards whose T&D losses largely mask outright theft. The rest of the lecture builds a positive programme for using markets and price signals to deliver infrastructure and manage public goods. Parekh proposes open electronic limit-order-book markets for electricity (with the distribution company as market-maker and a separate independent regulator for the transmission monopoly), competitive distribution at taluka or district scale, and BOT-style auctions for roads where bidders compete on the minimum present-discounted value of revenue rather than on toll levels. For open-access roads he sketches a land-value-capture mechanism using auctioned FSI to finance flyovers and expressways, and for telecommunications — where optical fibre has driven the marginal cost of carrying traffic close to zero — he urges complete deregulation, letting anyone enter and leasing only bandwidth at internationally comparable rates. The closing sections turn to environmental public goods. Citing suspended-particulate-matter levels in Delhi at eight times WHO standards and rising 40 percent in two years, Parekh argues that command-and-control approaches built on best-available-technology emission standards are both informationally and economically inferior to tradable emission permits. He works through a stylised two-firm example to show that equalising the marginal cost of abatement across emitters minimises social cost, and proposes that municipal authorities issue and auction permits which then trade like shares on India's existing stock-market infrastructure, with futures and options to guide investment under price volatility. The lecture is, in effect, a sustained case that the design of competitive markets — not the multiplication of regulators or the renegotiation of bilateral PPAs — is the cheapest route to infrastructure adequacy and environmental quality. ## Key points - India's growth is constrained by acute infrastructure shortages: ~10% peak power deficit, port congestion costing hundreds of crores in demurrage on petroleum imports alone, and a telephone density of 13 per 1000 versus 110 worldwide. - The root cause is underinvestment by public-sector enterprises that cannot charge appropriate user fees, compounded by political interference and soft budget constraints. - Agricultural electricity subsidies have ballooned from 3.9% of demand in 1950-51 to ~30% in 1993-94, totalling Rs 7,000 crore per year and crippling State Electricity Boards' capacity to invest or supply reliably. - Parekh proposes splitting electricity into competitive generation (via open electronic limit-order-book spot and futures markets), a regulated transmission monopoly under an independent regulator, and small-scale distribution monopolies at taluka or district level so that local bodies can recycle surplus into schools, roads and clinics. - Roads should be financed via BOT auctions on minimum present-discounted revenue (rather than minimum toll), with open-access roads funded by capturing land-value uplift through auctioned floor space index (FSI). - Telecommunications already shows the gains from competition; with optical fibre making the marginal cost of carrying traffic nearly zero, Parekh urges complete deregulation and leasing of bandwidth at internationally comparable rates. - Tradable emission permits — issued by municipal authorities up to the ambient absorptive capacity (e.g. 100,000 1-kg permits for a 100-tonne Mumbai cap) and traded on existing stock-exchange infrastructure — would equalise marginal abatement costs and outperform best-available-technology standards. - Across sectors the recurring claim is that well-designed competitive markets, not bilateral PPAs or stand-alone regulators, are the simplest route to economic efficiency in infrastructure and public-goods provision. --- ## [Primary work] Innovating India - Road Map 2014-19 URL: https://indianliberals.in/primary-works/innovating-india-road-map-2014-2019-various-april-5-2014/ ### Summary Innovating India – Road Map 2014-19 is a Forum of Free Enterprise booklet that reproduces substantial portions of a policy document of the same name prepared by the Pune International Centre (PIC) and timed to the 2014 general election. Editor Sunil S. Bhandare frames the reproduction as a non-partisan attempt to push PIC's recommendations into wider public debate before the new government takes office. Forum President Minoo R. Shroff's foreword and the introduction signed jointly by R. A. Mashelkar and Vijay Kelkar position the report as a 'Big Ideas' roadmap whose proposed reforms aim to combine rapid growth, equity and quality of life while explicitly eschewing 'competitive populism' and a diminished role for the state. Section 1, signed by Dileep Padgaonkar on behalf of PIC's Programme Committee, sets out an agenda for development built around eight tectonic shifts the authors see reshaping India — from the state to the market, from government to civil society, from Delhi to the states and panchayats, from upper-caste dominance to the assertiveness of those lower in the order, from older to younger generations, from male-centric to more gender-balanced power, from a techno-phobic to a techno-philic country, and from non-alignment to multi-alignment. Section 2, introduced by Nitin Desai, translates these diagnoses into sector-wise policy recommendations covering fiscal consolidation, privatisation, manufacturing, agriculture, energy, urban renewal, social security and labour-law reform. The booklet's substantive chapters are the collaborative work of PIC's larger Programme Committee and sector working groups, whose contributing authors include Abhay Bang (public health and tribal welfare), Abhay Pethe (urban economics and municipal finance), Abhijit Pawar (media, communications and rural enterprise), Ajit Ranade (macro-economics and growth strategy), Amitav Malik (defence technology and strategic affairs), Arun Firodia (manufacturing and industry), Arun Nigavekar (higher education and research), Ashwin Gambhir (renewable energy and decentralised electricity), Bhushan Gokhale (defence and security), Chandrahas Deshpande (fiscal and monetary policy), Jayant Umranikar (policing and internal security), Jayanta Roy (trade and external sector), John Kurien (agriculture and fisheries), Naim Keruwala (urban planning), Niranjan Rajadhyaksha (economic commentary and macro narrative), Prakash Hebalkar (technology, IT and disinvestment), Prashant Girbane (PIC programme coordination on policy synthesis), Ravi Pandit (manufacturing competitiveness and skilling), Sudhir Devare (foreign policy and multi-alignment), and Sumita Kale (social-security architecture and Aadhaar-based delivery). Together they author the chapter-level analysis behind the eight tectonic-shifts framework and the Section 2 sectoral recommendations. The booklet's argumentative centre is a classical-liberal critique of crony capitalism, license-permit residues and 'competitive populism', paired with a constructive case for a regulatory state that polices markets rather than substitutes for them, and a decentralised governance architecture that empowers municipalities, panchayats and state governments to deliver public goods. ### Body ## Summary Innovating India – Road Map 2014-19 is a Forum of Free Enterprise booklet that reproduces substantial portions of a policy document of the same name prepared by the Pune International Centre (PIC) and timed to the 2014 general election. Editor Sunil S. Bhandare frames the reproduction as a non-partisan attempt to push PIC's recommendations into wider public debate before the new government takes office. Forum President Minoo R. Shroff's foreword and the introduction signed jointly by R. A. Mashelkar and Vijay Kelkar position the report as a 'Big Ideas' roadmap whose proposed reforms aim to combine rapid growth, equity and quality of life while explicitly eschewing 'competitive populism' and a diminished role for the state. Section 1, signed by Dileep Padgaonkar on behalf of PIC's Programme Committee, sets out an agenda for development built around eight tectonic shifts the authors see reshaping India — from the state to the market, from government to civil society, from Delhi to the states and panchayats, from upper-caste dominance to the assertiveness of those lower in the order, from older to younger generations, from male-centric to more gender-balanced power, from a techno-phobic to a techno-philic country, and from non-alignment to multi-alignment. The argument then works through macro-economic stability, redirecting growth toward the lagging North and East, industry and services, energy transition, the urban challenge, a structured social security system anchored in Aadhaar, environmental management, reform of public administration, and the deeper question of whether a fragmented parliamentary polity can deliver the political transformation a rapidly urbanising economy demands. Section 2, introduced by Nitin Desai, translates these diagnoses into sector-wise policy recommendations through which the rendered pages run: fiscal consolidation (GST, return to 20% tax-to-GDP, sub-national fiscal autonomy, control of populist transfers), an aggressive privatisation and disinvestment programme, efficient subsidy management built around Aadhaar, rejuvenation of manufacturing through FDI commitments, NIMZ-style clusters and labour-law reform (decentralising labour to the State List, flexibility on retrenchment along Chinese and Gujarat lines, contract-worker hiring, exempting small firms from the Factories Act), and a new agriculture agenda covering irrigation, dryland farming, land leasing, subsidy review, GM technology and trade reform. The booklet's argumentative centre is a classical-liberal critique of crony capitalism, license-permit residues and 'competitive populism', paired with a constructive case for a regulatory state that polices markets rather than substitutes for them, and a decentralised governance architecture that empowers municipalities, panchayats and state governments to deliver public goods. ## Key points - The booklet is the Forum of Free Enterprise's free-distribution reprint of a Pune International Centre policy report led by Raghunath Mashelkar and Vijay Kelkar, edited by Sunil S. Bhandare and timed to the 2014 general election. - Section 1, signed by Dileep Padgaonkar, organises India's recent trajectory around eight 'tectonic shifts' — including state-to-market, Centre-to-States/panchayats, upper-caste to lower-rung assertiveness, and non-aligned to multi-aligned foreign posture. - Macro-economic chapter warns that 'competitive populism' between parties is producing fiscal profligacy and large hand-outs that threaten the 6–8% growth required to absorb a 100-million person rural-to-urban shift. - Recommendations call for rebalancing growth toward the North and East, professionalising corporate management to curb crony capitalism, and using public-private partnership and disinvestment to restructure public sector monoliths. - Energy section treats India as 'not a fossil fuel rich country' and argues for an open-access, decentralised electricity model built on renewables, smart grids and electric/fuel-cell mobility. - Urban chapter targets corrupt politician-bureaucrat-developer nexus around urban land and proposes empowered, fiscally autonomous local governments and reform of building and planning codes. - A unified social-security architecture anchored in Aadhaar is proposed to deliver universal health insurance, pensions and unemployment protection, replacing fragmented group-targeted schemes. - Section 2 specifies concrete fiscal-policy moves — GST, single-rate excise/service tax integration, PAN/UID-linked transactions, a Directorate of Risk Management — alongside aggressive disinvestment, FDI fast-tracking, NIMZ/Common Facilities Centres for manufacturing, and labour-law decentralisation plus retrenchment and contract-worker flexibility. --- ## [Primary work] INTEGRITY IN NATIONAL LIFE URL: https://indianliberals.in/primary-works/integrity-national-life-nittoor-srinivasa-rao-1971/ ### Summary This booklet reproduces the A. D. Shroff Memorial Lecture delivered by Nittoor Srinivasa Rao — former Chief Justice of Mysore and Central Vigilance Commissioner from 1964 to 1968 — at the Madras Centre of the Forum of Free Enterprise on 7 November 1970. Rao takes 'Integrity in National Life' as a topic 'of basic importance to all systems of society', then narrows the lens to post-Independence India, where, he warns, corruption and the erosion of ethical standards have spread to a point that endangers the country's future. Rao locates the problem in three overlapping zones. First, the moral climate of the community itself: where the prevailing code is corrupt, conformity makes it 'virtually impossible' for an honest functionary to operate, and the higher the level at which low standards are tolerated the more they cascade downward. Second, the political level: he argues that in representative democracy the unscrupulous acquisition and retention of power — through patronage of supporters, favours to financiers, and the wielding of political authority by men 'not of character and calibre' — necessarily demoralises the permanent civil services beneath.… ### Body ## Summary This booklet reproduces the A. D. Shroff Memorial Lecture delivered by Nittoor Srinivasa Rao — former Chief Justice of Mysore and Central Vigilance Commissioner from 1964 to 1968 — at the Madras Centre of the Forum of Free Enterprise on 7 November 1970. Rao takes 'Integrity in National Life' as a topic 'of basic importance to all systems of society', then narrows the lens to post-Independence India, where, he warns, corruption and the erosion of ethical standards have spread to a point that endangers the country's future. Rao locates the problem in three overlapping zones. First, the moral climate of the community itself: where the prevailing code is corrupt, conformity makes it 'virtually impossible' for an honest functionary to operate, and the higher the level at which low standards are tolerated the more they cascade downward. Second, the political level: he argues that in representative democracy the unscrupulous acquisition and retention of power — through patronage of supporters, favours to financiers, and the wielding of political authority by men 'not of character and calibre' — necessarily demoralises the permanent civil services beneath. Third, the citizen's side of the transaction: corruption is also the act of the private individual who exploits monopoly or seeks an illegitimate favour, so the remedy cannot lie only with public functionaries. A long historical middle section sets India's position against the West — virtual absence of corruption today in Britain and Scandinavia, but a Walpole-era past in which 'every man has his price', and a still-surviving American spoils system in which thousands of federal offices change hands at each election. Within India, Rao traces a deteriorating arc: the East India Company's looting servants, gradual improvement under the Crown, war-time backsliding, and a 'progressive deterioration in standards' after 1947, capped by floor-crossing, undisciplined Legislatures, and routine attacks on the bona fides of judges and election officials — a slide he dates to 'the last days of Jawaharlal Nehru's Prime Ministership.' The institutional response Rao surveys is the Santhanam Committee, the Administrative Vigilance Division, the Central Vigilance Commission, and the Administrative Reforms Commission's proposal for a Lokpal at the Centre and Lokayuktas in the States, modelled on the Scandinavian Ombudsman. He endorses these as necessary but insufficient: because most corrupt transactions have no aggrieved party, grievance-based machinery alone cannot reach them. He closes by calling for non-official supplements — Citizens' Advice Bureaus staffed by 'men of experience and knowledge' and Consumers' Organisations to discipline those wielding economic power — and expresses a guarded hope that 'the nation's inner strength and stamina will assert itself in due course, but before long.' ## Key points - Frames integrity as a universal problem of organised life, citing Kautilya's Arthasastra and Aristophanes' 'The Frogs', and warns that corruption has historically toppled regimes (Rome, Vichy France, Chiang Kai-Shek's China). - Identifies low-income society, weak administration, and bureaucratic delay (the 'speed money' that mutates into deliberate obstruction) as enabling conditions for petty corruption. - Argues that the moral climate of the community is the single most powerful variable — conformity makes individual rectitude almost untenable in a corrupt environment. - Treats representative democracy as especially vulnerable: politicians dependent on supporters trade favours, demoralise the permanent services, and recruit men of wealth outside the legislature as patrons in exchange for influence. - Reads Indian public life since Independence as a story of 'progressive deterioration', dating the sharpest decline in legislative conduct (floor-crossing, defection, attacks on judges and election officials) to the closing years of Nehru's premiership. - Surveys the institutional toolkit — Santhanam Committee, Administrative Vigilance Division, Central Vigilance Commission, Administrative Reforms Commission's Lokpal/Lokayukta proposal modelled on the Scandinavian Ombudsman — and warns that grievance-driven machinery cannot reach the typical corrupt transaction, which has no aggrieved party. - Extends the moral burden to the citizen and the private monopolist, arguing that 'the man who makes excessive profit by exploiting the needs of society or by creating a monopoly also acts without integrity and anti-socially'. - Recommends non-official supplements — Citizens' Advice Bureaus and Consumers' Organisations — to back up the new vigilance institutions, closing on a guarded hope for national moral revival. --- ## [Primary work] Interest Rates - An Insight URL: https://indianliberals.in/primary-works/interest-rates-an-insight-rajaram-ajgaonkar/ ### Summary Rajaram Ajgaonkar's booklet, reproduced from the Bombay Chartered Accountants' Journal (May 2016) and reissued by the Forum of Free Enterprise, offers a primer on how interest rates are set and what their movements mean for an economy. Ajgaonkar, a Chartered Accountant, begins from first principles — interest as the price of borrowed money, alternately framed as rent for a lender, cost of capital for a business, and the cost of preponing consumption for a household — and builds outward toward the macroeconomic forces that move rates. The central analytical block surveys the major determinants of interest rates: monetary policy and the central bank's balancing act between growth and inflation, the demand pressure exerted by the growth rate, global and local liquidity (including the way cheap money fuels and then unwinds carry trades), economic and political uncertainty, and the inflation rate itself.… ### Body ## Summary Rajaram Ajgaonkar's booklet, reproduced from the Bombay Chartered Accountants' Journal (May 2016) and reissued by the Forum of Free Enterprise, offers a primer on how interest rates are set and what their movements mean for an economy. Ajgaonkar, a Chartered Accountant, begins from first principles — interest as the price of borrowed money, alternately framed as rent for a lender, cost of capital for a business, and the cost of preponing consumption for a household — and builds outward toward the macroeconomic forces that move rates. The central analytical block surveys the major determinants of interest rates: monetary policy and the central bank's balancing act between growth and inflation, the demand pressure exerted by the growth rate, global and local liquidity (including the way cheap money fuels and then unwinds carry trades), economic and political uncertainty, and the inflation rate itself. He then moves to transaction-level factors — type and cover of security, tenure of loan, end-use of funds, the borrower's creditworthiness, and the industry to which the borrower belongs — that explain why a single benchmark rate fans out into very different effective rates across borrowers. A substantial section is devoted to the post-2008 phenomenon of negative interest rates in the Euro Zone, Japan, Sweden, Denmark, and Switzerland, where central banks invert the usual logic of lending and effectively penalise banks for holding cash. Ajgaonkar enumerates seventeen distinct effects of low interest rates — on savers, senior citizens dependent on deposit income, charities, banks, consumer durables, housing, stock and bond markets, capital-versus-labour substitution, currency stability, and the temptation toward riskier assets — arguing that the welfare verdict depends on the weight one places on each constituency. The rendered pages close with the opening of an "Indian scene" discussion in which Ajgaonkar credits supply-side reforms with bringing CPI inflation from 9.70% in 2008 down to 5.72% in 2016 and tracks the RBI's repo rate cuts from 9% to 6.50% over the same span. He projects further gradual easing if inflation stays anchored; the chunk cuts off mid-paragraph as the comparison with developed economies begins. ## Key points - Defines interest three ways at once: rent for the lender, cost of capital for a business, and the cost of preponing consumption for a household. - Catalogues five macro drivers of interest rates — monetary policy, growth rate, liquidity, uncertainty, and inflation — and explains the central bank's balancing act between growth and inflation control. - Adds a second layer of transaction-level determinants: security quality, loan tenure, end-use of funds, creditworthiness, and industry, showing why one benchmark rate produces many effective rates. - Explains the carry-trade mechanics that link low domestic rates to capital flows, and how a reversal of those flows can unwind carry positions and pressure currencies. - Analyses negative interest rate policies in the Euro Zone, Japan, Sweden, Denmark, and Switzerland as a post-2008 dislocation that inverts the lender-borrower payment relationship. - Enumerates seventeen effects of low interest rates — punishing savers, senior citizens, and charities; aiding entrepreneurs, housing, and stock markets; risking asset bubbles, capital-for-labour substitution, and bad-loan build-up. - Tracks the Indian disinflation: CPI from 9.70% (2008) to 5.72% (2016) and RBI repo rate cuts from 9% to 6.50%, attributing the improvement to supply-side strengthening. - Frames the welfare verdict on low rates as a weighting problem between business/borrower gains and the erosion of nominal incomes and real living standards for savers. --- ## [Primary work] Interest Rates and Economic Activity URL: https://indianliberals.in/primary-works/interest-rates-and-economic-activity-dr-deepak-mohanty-february-3-2014/ ### Summary Dr. Deepak Mohanty, Executive Director of the Reserve Bank of India, uses this 2014 Forum of Free Enterprise booklet (based on a talk delivered at the Association of Financial Professionals of India in Pune in August 2013) to probe whether monetary policy alone can revive India's flagging growth. Reviewing the decade 2003-04 through 2012-13, he divides the Reserve Bank's stance into four growth-inflation phases — the boom of 2003-08, the global-crisis response of 2008-10, the inflation-fighting tightening of 2010-12, and the cautious easing of 2012-14 — and asks whether interest-rate movements actually transmitted into market lending rates and real economic activity. His answer is sceptical of the easy view that cheaper credit will restart investment. Empirical evidence cited from Reserve Bank and IMF working papers shows that policy rate changes do affect output and inflation, but transmission is asymmetric: banks raise lending rates quickly during tightening and adjust them more sluggishly during easing, because fixed-rate deposit liabilities and the apprehension of losing deposits constrain them.… ### Body ## Summary Dr. Deepak Mohanty, Executive Director of the Reserve Bank of India, uses this 2014 Forum of Free Enterprise booklet (based on a talk delivered at the Association of Financial Professionals of India in Pune in August 2013) to probe whether monetary policy alone can revive India's flagging growth. Reviewing the decade 2003-04 through 2012-13, he divides the Reserve Bank's stance into four growth-inflation phases — the boom of 2003-08, the global-crisis response of 2008-10, the inflation-fighting tightening of 2010-12, and the cautious easing of 2012-14 — and asks whether interest-rate movements actually transmitted into market lending rates and real economic activity. His answer is sceptical of the easy view that cheaper credit will restart investment. Empirical evidence cited from Reserve Bank and IMF working papers shows that policy rate changes do affect output and inflation, but transmission is asymmetric: banks raise lending rates quickly during tightening and adjust them more sluggishly during easing, because fixed-rate deposit liabilities and the apprehension of losing deposits constrain them. Mohanty unpacks the Fisher decomposition to argue that nominal rather than real rates have shaped recent investment, and presents firm-level data showing the interest cost-to-sales ratio rose from 2.6 per cent to 3.8 per cent while sales growth collapsed from 20.9 per cent to 9.5 per cent — a squeeze driven less by RBI policy than by sluggish demand, supply bottlenecks, and a declining marginal efficiency of capital. The booklet's argumentative centre, set up by Minoo R. Shroff's foreword and reaffirmed in Mohanty's conclusion, is that India's investment slowdown is structural rather than monetary. Price stability and exchange-rate stability, he insists, are necessary preconditions for sustainable high growth; when non-monetary factors — corporate over-leverage, supply-side bottlenecks, weak global demand — are doing the damage, lowering interest rates is no panacea. Charts and tables tracking repo and CRR moves, weighted average lending rates, the incremental capital-output ratio, and the marginal productivity of capital are mustered to support the case for monetary caution over premature easing. ## Key points - The booklet covers the Reserve Bank of India's monetary stance from 2003-04 through 2012-13, partitioned into four growth-inflation phases. - Mohanty argues that monetary policy transmission in India is asymmetric — faster from policy rate to market rates during tightening than during easing. - He attributes the post-crisis investment slump primarily to non-monetary factors: supply bottlenecks, sluggish demand, and corporate deleveraging. - The Fisher equation framework is used to distinguish nominal and real interest rate effects on investment decisions. - Firm-level evidence shows interest cost-to-sales ratio rose from 2.6 per cent (2003-08) to 3.8 per cent (2012-13) as sales growth collapsed from 20.9 per cent to 9.5 per cent. - The incremental capital-output ratio (ICOR) has been rising and the marginal productivity of capital (MPC) declining since 2008-09. - Mohanty's central policy conclusion is that lower interest rates alone cannot stimulate growth when non-monetary headwinds dominate; price and exchange-rate stability are prerequisites for sustainable growth. - The booklet appears in the Forum of Free Enterprise series dedicated to the Shailesh Kapadia Memorial Trust, with a foreword by Forum President Minoo R. Shroff. --- ## [Primary work] INTERNATIONALISATION OF INDIAN BUSINESS URL: https://indianliberals.in/primary-works/internationalisation-of-indian-business-role-of-financial-institution-r-c-shah-june-28-1983/ ### Summary Delivered in April 1983 as the A. D. Shroff Memorial Trust's annual public lecture and published by the Trust the following June, R. C. Shah's address argues that India — long an 'open society' but a 'relatively closed economy' — has now reached a level of self-sufficiency from which it can credibly internationalise its business. Shah, then Chairman and Managing Director of the EXIM Bank, frames internationalisation around three concrete vehicles: joint ventures abroad promoted by Indian business houses, project (turnkey) exports, and the overseas branch networks of Indian banks. He treats internationalisation as the natural next stage of the import-substitution path: three decades of inward industrialisation have built diversified industrial capacity and a distinctly Indian 'intermediate technology' that, he argues, is appropriate for partners in other developing economies. The data sections of the lecture survey approvals, regional spread and earnings from Indian joint ventures up to 1980–81. Shah documents 399 approvals (117 in operation, 195 abandoned), a 49 per cent attrition rate, and a cumulative net foreign-exchange inflow of about Rs. 754 million.… ### Body ## Summary Delivered in April 1983 as the A. D. Shroff Memorial Trust's annual public lecture and published by the Trust the following June, R. C. Shah's address argues that India — long an 'open society' but a 'relatively closed economy' — has now reached a level of self-sufficiency from which it can credibly internationalise its business. Shah, then Chairman and Managing Director of the EXIM Bank, frames internationalisation around three concrete vehicles: joint ventures abroad promoted by Indian business houses, project (turnkey) exports, and the overseas branch networks of Indian banks. He treats internationalisation as the natural next stage of the import-substitution path: three decades of inward industrialisation have built diversified industrial capacity and a distinctly Indian 'intermediate technology' that, he argues, is appropriate for partners in other developing economies. The data sections of the lecture survey approvals, regional spread and earnings from Indian joint ventures up to 1980–81. Shah documents 399 approvals (117 in operation, 195 abandoned), a 49 per cent attrition rate, and a cumulative net foreign-exchange inflow of about Rs. 754 million. He diagnoses the rising 'sickness' of overseas ventures with four causes — inappropriate choice of local partner, inadequate product adaptation, lack of brand name, and chronic under-capitalisation — and replies with six policy and practice recommendations: tighter commercial-viability screening before approval, allowance for cash equity, fiscal incentives for repatriated earnings, flexibility on royalty and dividend rules, consortium rehabilitation of sick ventures, and better personnel allocation by Indian parent firms. A parallel section on project exports values cumulative capital-goods and turnkey contracts at roughly Rs. 16 billion between 1973 and 1981, with construction contracts of Rs. 35 billion concentrated in Middle East oil economies. The rendered pages close as Shah opens the third pillar — Indian banks abroad — noting that twelve Indian banks ran 137 offices across 25 countries by mid-1982, and identifying State Bank of India, Bank of Baroda and Bank of India as the genuinely transnational players. He distinguishes the ethnic-retail growth of the late 1950s from the directed expansion of the 1970s, and signals that the lecture will move from production-side internationalisation to services. The argument throughout is pragmatic rather than ideological: the case for internationalisation is built on returns, technology fit and discipline, with repeated insistence that protected markets and weak financial preparation are the real obstacles to Indian business succeeding overseas. ## Key points - Distinguishes 'open society' (which India is) from 'open economy' (which India has not been) and treats internationalisation of business as the bridge between them. - Frames the three-decade import-substitution regime as a dynamic ladder that has now produced 'intermediate technology' appropriate for other developing economies — the basis for Indian outward expansion. - Identifies three forms of internationalisation: joint ventures abroad, project (turnkey) exports, and the overseas branch networks of Indian banks. - Reports that of 399 joint-venture approvals up to August 1980, only 117 were in operation and 195 were abandoned, with a 49 per cent attrition rate — yet net foreign-exchange inflow was roughly Rs. 754 million. - Diagnoses sickness in Indian joint ventures via four causes: inappropriate local partners, weak product adaptation, absence of brand name, and thin capitalisation that forces premature debt. - Proposes six policy reforms — commercial-viability screening, cash-equity allowance, fiscal incentives for repatriations, flexible royalty/dividend ploughback, consortium rehabilitation, and better personnel deployment. - Notes that cumulative capital-goods and project exports between 1973 and 1981 reached about Rs. 16 billion, projecting Rs. 160 billion by 1990 if 'conscious and disciplined steps' are taken. - Observes that twelve Indian banks operated 137 offices across 25 countries by June 1982, with State Bank of India, Bank of Baroda and Bank of India qualifying as transnational — but with weak congruence between bank networks and trade flows in the developing world. --- ## [Primary work] INTERNATIONAL FINANCE FOR DEVELOPMENT — A STRATEGY FOR INDIA URL: https://indianliberals.in/primary-works/international-finance-development-a-strategy-for-india-t-thomas-december-12-1982/ ### Summary Delivered as the A. D. Shroff Memorial Lecture in Bombay on 25th October 1982 and published by the Forum of Free Enterprise, T. Thomas — the first Indian Director of Unilever and a former chairman of Hindustan Lever — sets out a businessman's strategy for financing Indian development in a decelerating world economy. He opens by surveying the global landscape: unemployment near 10% in the OECD, world GDP growth falling from over 4% in the 1970s to barely 1% in 1981, and sovereign debts of Poland, Argentina and Mexico ballooning into crisis. Unlike the 1930s, he argues, professionally managed institutions like the IMF and the World Bank, together with determined Western restructuring, should permit a modest recovery to 2–3% growth by 1984, and India's strategy must be built on this hopeful but unoptimistic outlook. Turning inward, Thomas identifies three phases in independent India's economic evolution — Initiation, Introversion and Isolation — and calls for a fourth phase of Innovation: opening more sectors to private industry, dismantling the obsession with self-reliance, importing modern technology, and rolling back the public sector.… ### Body ## Summary Delivered as the A. D. Shroff Memorial Lecture in Bombay on 25th October 1982 and published by the Forum of Free Enterprise, T. Thomas — the first Indian Director of Unilever and a former chairman of Hindustan Lever — sets out a businessman's strategy for financing Indian development in a decelerating world economy. He opens by surveying the global landscape: unemployment near 10% in the OECD, world GDP growth falling from over 4% in the 1970s to barely 1% in 1981, and sovereign debts of Poland, Argentina and Mexico ballooning into crisis. Unlike the 1930s, he argues, professionally managed institutions like the IMF and the World Bank, together with determined Western restructuring, should permit a modest recovery to 2–3% growth by 1984, and India's strategy must be built on this hopeful but unoptimistic outlook. Turning inward, Thomas identifies three phases in independent India's economic evolution — Initiation, Introversion and Isolation — and calls for a fourth phase of Innovation: opening more sectors to private industry, dismantling the obsession with self-reliance, importing modern technology, and rolling back the public sector. He treats the deteriorating capital-output ratio (from 2.5 to 3.3 over twenty years) as the central inefficiency to be reversed and warns that restoring it to 2.5 could lift growth by nearly 3% per annum at no fiscal cost. Citing Britain's struggle with the "British Disease" and its subsequent privatisations, he argues that India, being a growing economy, can shift course without the convulsive U-turns of the West. The second half of the lecture focuses on enhancing investment capital by raising foreign financial flows from about 6% to 12% of total investment. Thomas evaluates three channels — official flows (multilateral and bilateral loans), private financial institutions (commercial banks and bond markets), and direct foreign investment — and finds the first two limited and risky: official funds tend to flow into the already-bloated bureaucracy and public sector, and create what he calls a "charity" image he believes India does not deserve, citing China as a contrast. Through an extended analysis of Mexico's 1976–81 borrowing binge and 1982 default, he draws five lessons against over-reliance on short-term bank loans and in favour of direct equity investment, which he begins enumerating at the close of the rendered pages. ## Key points - Frames the lecture as a businessman's perspective (distinct from academic or political economists) on India's investment strategy, invoking the Bombay Plan precedent associated with J. R. D. Tata and A. D. Shroff. - Diagnoses world GDP growth as having dropped from over 4% in the 1970s to 1.12% in 1981, with developing-country per-capita GDP falling for the first time in 25 years. - Periodises post-independence India into three phases — Initiation, Introversion and Isolation — and calls for a fourth phase of Innovation through openness to private industry and foreign technology. - Identifies the deteriorating Capital:Output ratio (2.5 to 3.3 over twenty years) as the binding constraint, attributing it to public-sector reservations, technology import restrictions and the obsession with self-reliance. - Argues that restoring the Capital:Output ratio to 2.5 would raise growth by nearly 3% per annum, treating efficiency gains as a free lever within India's control. - Recommends doubling external capital inflows from 6% to 12% of total investment, with the additional flow weighted away from official channels toward private equity. - Warns that official multilateral loans gravitate toward the bureaucracy and public sector, deepening inefficiency, and create a psychological image of dependence — contrasting India's standing with China's relative independence from concessional aid. - Uses Mexico's 1976–81 over-borrowing and 1982 crisis as a cautionary template, drawing lessons against substituting domestic savings, against short-term bank loans, and in favour of direct foreign equity investment. --- ## [Primary work] INTERNATIONALISATION OF INDIAN BUSINESS URL: https://indianliberals.in/primary-works/internationalization-of-indian-business-m-k-raju-january-12-1980/ ### Summary M. K. Raju's A. D. Shroff Memorial Lecture, delivered in Madras on 27 October 1979 under the auspices of the Forum of Free Enterprise and published as this booklet in January 1980, is a sober post-mortem of India's first decade of outbound joint ventures. Opening with a tribute to Shroff and his generation's faith in free enterprise as the engine of national development, Raju shifts quickly from rhetoric to data: of 345 Indian joint ventures approved abroad by December 1978, only 31% were in production, 26% under implementation, and a striking 43% had been abandoned. A closer survey of 23 manufacturing units in a single South-East Asian host country found just 9% profitable and 70% incurring cash losses. Raju rejects the standard alibis — interest burden, invisible entry barriers, marginal Indian commitment — as inadequate, and instead builds a multi-dimensional diagnosis.… ### Body ## Summary M. K. Raju's A. D. Shroff Memorial Lecture, delivered in Madras on 27 October 1979 under the auspices of the Forum of Free Enterprise and published as this booklet in January 1980, is a sober post-mortem of India's first decade of outbound joint ventures. Opening with a tribute to Shroff and his generation's faith in free enterprise as the engine of national development, Raju shifts quickly from rhetoric to data: of 345 Indian joint ventures approved abroad by December 1978, only 31% were in production, 26% under implementation, and a striking 43% had been abandoned. A closer survey of 23 manufacturing units in a single South-East Asian host country found just 9% profitable and 70% incurring cash losses. Raju rejects the standard alibis — interest burden, invisible entry barriers, marginal Indian commitment — as inadequate, and instead builds a multi-dimensional diagnosis. Indian joint ventures, he argues, are 'cash-starved' from conception, technical-know-how fees and expatriate costs eat up nearly 24% of the equity, debt-equity norms ignore the openness of host-country markets, and Indian parents transferred to overseas operations the same 'domestic market only' assumptions that had shaped their import-substitution era at home. Set against Korean, Taiwanese and Japanese firms that built export-oriented industries at world scale from inception, Indian enterprises lacked both the scale and the brand-and-distribution capabilities that define a defensible comparative advantage in a market environment. The second half of the lecture turns prescriptive. Raju calls on the Government of India and the Reserve Bank to stop treating joint ventures as 'a foreign exchange generator' through the export of raw materials and royalties, and to instead build a long-term industrial strategy: liberalised remittances of cash equity, consortium financing through Indian banks, stiff penalties for opportunistic abandonment, and organised takeover of 'sick units' by a consortium of Indian firms. The closing turn-around strategy frames the booklet's central polemic — that 'strategy must replace opportunism and expediency' — and ends with a reminder, via a Eugene Black epigraph on the back cover, that private enterprise must be embraced 'not as a necessary evil, but as an affirmative good.' ## Key points - Booklet reproduces the A. D. Shroff Memorial Lecture delivered by management consultant M. K. Raju in Madras on 27 October 1979 under Forum of Free Enterprise auspices. - Of 345 Indian joint ventures approved abroad by December 1978, only 31% were in production, 26% under implementation, and 43% were abandoned; in a survey of 23 manufacturing units in one host country, 70% were running cash losses. - Raju dismisses the standard 'interest burden', 'invisible barriers to entry' and 'marginal commitment' explanations as insufficient and proposes a multi-dimensional, structural diagnosis. - Indian joint ventures are cash-starved from inception: technical fees and expatriate costs cover ~24% of equity, and debt-equity norms safe in protected India become dangerous in open host-country markets. - Indian industry's 'domestic market only' import-substitution mindset and reliance on tariff protection do not translate to host markets where Korean, Taiwanese and Japanese firms compete with world-scale, export-oriented operations. - GOI's treatment of joint ventures as a 'foreign exchange generator' — and as a vent for idle Indian capacity after the 1969–72 recession — produced the wrong incentive structure and short-term horizon. - Reform agenda: GOI/RBI must share long-term financing through a consortium of Indian banks, liberalise equity remittances in cash, impose stiff penalties on opportunistic abandonment, and organise a consortium of Indian industry to take over 'sick units'. - Final exhortation: 'Strategy must replace opportunism and expediency' — Indian industrialists must hone business acumen on the concept of strategy if Indian business is to internationalise in a big way. --- ## [Primary work] IS INDIAN AIRLINES CORPORATION FAIR TO THE PUBLIC? URL: https://indianliberals.in/primary-works/is-india-airline-corporation-fair-to-the-public-september-5-1961/ ### Summary This Forum of Free Enterprise leaflet — reproduced from an August 1961 editorial in Asian & Indian Skyways — mounts a sustained critique of the Indian Airlines Corporation (IAC) as a case study in the inefficiencies that follow nationalisation. The author opens by conceding that air transport is a national necessity and a public service, but argues that IAC has betrayed both its private-sector predecessors and the travelling public through cost-padding, fare hikes, and an absolute refusal to be challenged. Returning to the August 1953 takeover under Minister for Transport and Communications Jagjivan Ram, the leaflet recalls the original promise that no employee would suffer from nationalisation, then walks through eight years of IAC annual reports to show that this guarantee curdled into a permanent expansion of payroll bearing no relationship to operational need. The heart of the pamphlet is an audit of staffing trends against the active fleet. While the number of aircraft on the active list fell from 99 to 73 and the surviving aircraft were flown harder, IAC's headcount climbed from 7,107 at formation to 9,553 by 1959–60 — a 34.4 per cent increase.… ### Body ## Summary This Forum of Free Enterprise leaflet — reproduced from an August 1961 editorial in Asian & Indian Skyways — mounts a sustained critique of the Indian Airlines Corporation (IAC) as a case study in the inefficiencies that follow nationalisation. The author opens by conceding that air transport is a national necessity and a public service, but argues that IAC has betrayed both its private-sector predecessors and the travelling public through cost-padding, fare hikes, and an absolute refusal to be challenged. Returning to the August 1953 takeover under Minister for Transport and Communications Jagjivan Ram, the leaflet recalls the original promise that no employee would suffer from nationalisation, then walks through eight years of IAC annual reports to show that this guarantee curdled into a permanent expansion of payroll bearing no relationship to operational need. The heart of the pamphlet is an audit of staffing trends against the active fleet. While the number of aircraft on the active list fell from 99 to 73 and the surviving aircraft were flown harder, IAC's headcount climbed from 7,107 at formation to 9,553 by 1959–60 — a 34.4 per cent increase. The engineering department added 1,119 employees (a 46.6 per cent jump) even though additional flying hours per extra engineer worked out to just 2 hours 41 minutes per annum; Accounts and Audit nearly doubled before drifting back; Administration and Miscellaneous rose to 1,578. The author treats these ratios as 'absolutely unique in airline operation history' and quips that the IAC annual reports read as if written by Lewis Carroll. From staffing the critique broadens to operational waste — twelve serviceable Viking aircraft left to rust in the open after the Viscounts arrived, ground time exceeding flying time, and 'a variety of other drains' through which revenue leaks: pilferage of in-flight food, mishandling of excess-luggage charges, and unpaid commissions on credit-card bookings because IAC has refused membership in the International Air Transport Association (IATA). The leaflet closes by arguing that the General Manager's pleas about rising maintenance costs do not survive arithmetic: with income growing more than 13 per cent a year, the Corporation's financial troubles trace not to external pressures but to a managerial approach to business that the author calls 'peculiar' and unworthy of public sympathy. ## Key points - Frames IAC as a public service that has nevertheless failed the public by raising fares and refusing to be questioned because strikes by 'Government servants' are illegal. - Recovers the August 1953 nationalisation moment under Jagjivan Ram, when the government promised no employee would suffer — and treats that promise as the seed of permanent overstaffing. - Builds a granular eight-year staffing audit from IAC's own annual reports: total employees up from 7,107 to 9,553 (+34.4%) while the active aircraft list fell from 99 to 73. - Highlights a 46.6% growth in engineering staff yielding only 2 hours 41 minutes of additional flying per extra engineer — a ratio the author calls unique in world airline history. - Catalogues operational waste: twelve serviceable Viking aircraft scrapped instead of redeployed, excessive ground time, pilferage of food and spares, and mishandled excess-luggage billing. - Faults IAC for not joining IATA, costing it commissions on credit-card bookings made through other carriers — a self-inflicted revenue leak. - Concludes that with income rising more than 13% per year, IAC's financial troubles are managerial, not structural, and reflect an approach to business 'so peculiar' that no sympathy is warranted. --- ## [Primary work] Is India Heading Towards an Internal Debt Trap? URL: https://indianliberals.in/primary-works/is-india-heading-towards-internal-debt-trap-sks-rao-1988/ ### Summary Dr. S. R. K. Rao, former Principal Adviser to the Reserve Bank of India, delivered this lecture under the Forum of Free Enterprise auspices in Bombay on 31 August 1988. The text develops the concept of an "Internal Debt Trap" that Rao says he first publicly enunciated at the Ninth Public Sector Banks' Economists' Meet in New Delhi on 30 May 1986, and which subsequently attracted backing from N. A. Palkhivala, eminent Indian economists, and the international press. Rao defines the trap as the threshold beyond which fresh government borrowing is no longer sufficient even to meet the debt-servicing burden, and he argues that India is rapidly approaching that point — a possibility he and his Reserve Bank colleague A.… ### Body ## Summary Dr. S. R. K. Rao, former Principal Adviser to the Reserve Bank of India, delivered this lecture under the Forum of Free Enterprise auspices in Bombay on 31 August 1988. The text develops the concept of an "Internal Debt Trap" that Rao says he first publicly enunciated at the Ninth Public Sector Banks' Economists' Meet in New Delhi on 30 May 1986, and which subsequently attracted backing from N. A. Palkhivala, eminent Indian economists, and the international press. Rao defines the trap as the threshold beyond which fresh government borrowing is no longer sufficient even to meet the debt-servicing burden, and he argues that India is rapidly approaching that point — a possibility he and his Reserve Bank colleague A. Seshan empirically tested and pinned to roughly 1992-93 on the basis of historic growth rates of 15.3 per cent in net market borrowings and 25.7 per cent in interest payments between 1979-80 and 1986-87. The bulk of the lecture marshals official evidence — successive "Economic Survey" reports, RBI Annual Reports, the Eighth and Ninth Finance Commission papers, the CAG's July 1988 Report on Public Debt, and the World Bank's recent India report — to show that the deficit on revenue account has risen sharply, that tax-to-GDP buoyancy is being outrun by non-plan expenditure (defence, subsidies, interest, transfers to States), and that total Central liabilities reached 64 per cent of GDP and Rs. 1,66,546 crores by 1986-87. Rao stresses four "supply-side" parameters that make the Indian government securities market a captive rather than inexhaustible source — the small share of household holdings, the inordinate delays in fructification of investments, the limited household-sector elasticity to interest-rate hikes, and the constraint that monetary targeting now places on the RBI's ability to absorb residuary loan tranches. He compares the trajectory with the "sybaritic psychology" that drove Argentina, Brazil, Chile and Mexico into an external debt trap in the 1970s. The final sections weigh policy alternatives. Rao is sceptical of cosmetic remedies: a statutory ceiling under Article 292 of the Constitution (advocated by B. K. Madan and the Public Accounts Committee) founders on the "Cinderella phrase" of exceptional circumstances; a Gramm-Rudman-style six-year zeroing of the revenue deficit, contemplated by the Ninth Finance Commission, is judged unlikely to outperform earlier Five-Year-Plan targets given Pay Commission, NDC and disaster-relief commitments. His preferred alternative is "Debt Planning" coupled with a "Disaggregation Model" — every loan tranche tagged to specific productive projects or areas, with defined minimum yields and maximum gestation lags accountable to Parliament — so that public borrowing functions as a catalyst to growth rather than a means of bridging structural revenue gaps. The Conclusions section warns that interest costs already represented 56 per cent of non-RBI borrowings in 1987-88 against 44 per cent in 1980-81, and that household savings rates have plateaued just as crowding-out is set to intensify. ## Key points - Rao defines the "Internal Debt Trap" as the threshold beyond which fresh government borrowings cannot even meet debt-servicing charges, let alone fund development. - He locates the empirical danger zone around 1992-93 based on 15.3% annual growth in net market borrowings and 25.7% growth in interest payments between 1979-80 and 1986-87. - Four supply-side parameters — captive securities market, delays in fructification, inelastic household savings response to interest rates, and monetary targeting — undercut the optimistic view that India can keep borrowing indefinitely. - Rao draws an explicit parallel between India's fiscal trajectory and the "sybaritic psychology" of Argentina, Brazil, Chile and Mexico (the "ABCM Countries") that led them into an external debt trap. - He marshals the Economic Survey, RBI Annual Reports, the Eighth and Ninth Finance Commissions, the CAG's July 1988 Public Debt Report, and the World Bank's India report as converging evidence of structural revenue-expenditure imbalance. - Total Central liabilities rose from Rs. 59,749 crores in 1980-81 to Rs. 1,66,546 crores in 1986-87 (64% of GDP); borrowings of Rs. 27,000 crores planned for 1989-90 mean half of fresh borrowings would only service interest. - Rao rejects statutory ceilings (Article 292) and Gramm-Rudman-style zeroing as mechanistic, and proposes "Debt Planning" plus a "Disaggregation Model" tagging each loan tranche to productive projects with parliamentary accountability. - He credits N. A. Palkhivala with popularising the "Internal Debt Trap" concept after Rao first enunciated it on 30 May 1986, and acknowledges the Business Standard for early press coverage. --- ## [Primary work] Is India Ready for Challenge of 1980s? URL: https://indianliberals.in/primary-works/is-india-ready-for-challenge-of-1980s-j-h-doshi-november-15-1979/ ### Summary J. H. Doshi delivered this Presidential address at the 23rd Annual General Meeting of the Forum of Free Enterprise in Bombay on 13 November 1979, and the Forum published it as a pamphlet a few days later. Doshi frames India at the close of the 1970s as 'a giant in chains' — chains, he insists, that the country has deliberately forged for itself through bureaucratic controls, statist planning and an entrenched political dogma he names 'Synthetic Socialism'. The address reads as a stock-taking exercise: 28 years after planned economic development was initiated, foodgrain output has barely doubled while millions remain too poor to buy grain from the very buffer stocks that are rotting in unscientific storage; unemployment registrations have shot up from 34 lakhs in 1969 to 136 lakhs in 1979; foreign debt has climbed from Rs. 32 crores in 1951 to over Rs. 7,000 crores; and inflation, running at roughly 17 per cent above the previous year, has by his count been a fixture of Indian life for a quarter-century. Against this gloom, Doshi sets a counter-archive of what citizens have done despite the state — the leap in gem, jewellery and diamond exports from Rs. 10 crores in 1965-66 to Rs.… ### Body ## Summary J. H. Doshi delivered this Presidential address at the 23rd Annual General Meeting of the Forum of Free Enterprise in Bombay on 13 November 1979, and the Forum published it as a pamphlet a few days later. Doshi frames India at the close of the 1970s as 'a giant in chains' — chains, he insists, that the country has deliberately forged for itself through bureaucratic controls, statist planning and an entrenched political dogma he names 'Synthetic Socialism'. The address reads as a stock-taking exercise: 28 years after planned economic development was initiated, foodgrain output has barely doubled while millions remain too poor to buy grain from the very buffer stocks that are rotting in unscientific storage; unemployment registrations have shot up from 34 lakhs in 1969 to 136 lakhs in 1979; foreign debt has climbed from Rs. 32 crores in 1951 to over Rs. 7,000 crores; and inflation, running at roughly 17 per cent above the previous year, has by his count been a fixture of Indian life for a quarter-century. Against this gloom, Doshi sets a counter-archive of what citizens have done despite the state — the leap in gem, jewellery and diamond exports from Rs. 10 crores in 1965-66 to Rs. 700 crores; the Rs. 200 crores a year remitted by semi-literate workers in the Middle East; the women who built a multi-crore 'Pappad' industry on a few hundred rupees of capital. The lesson he draws is that India's economic potential is sleeping under the weight of permits, licences, credit squeezes, power cuts, nationalised industries that blame one another, and a Government 'machinery' that he says has become 'an engine of corruption and oppression'. Public-sector expansion, in his telling, has both starved primary public functions (drinking water, primary education, village roads, public health) and crowded out productive private enterprise. Doshi closes by widening the lens to the coming decade: population pressure, stagflation, energy shortages, an adverse trade balance and the looming collapse of the foreign-exchange surplus once oil import costs are fully felt. He warns the country may slide back to the conditions of the late 1950s and early 1960s unless Government, business and economists co-operate — as, he argues, they have in Japan, South Korea, Taiwan and Singapore — and unless 'vigorous public opinion' compels the political class to abandon dogma. The pamphlet ends not with a programme but with a question: 'Can we make this happen?', and reminds readers that the Forum of Free Enterprise has been making this case for 23 years. ## Key points - Frames India circa 1979 as a self-shackled giant whose chains are 'carefully designed and forged' by its own policy choices. - Treats the buffer stock of nearly 20 million tonnes of foodgrains rotting alongside millions without purchasing power as the paradigmatic Indian paradox. - Marshals data on debt (Rs. 32 crores in 1951 to over Rs. 7,000 crores in 1979), unemployment (34 lakhs to 136 lakhs registered between 1969 and 1979) and inflation (~17% YoY, a 25-year continuum) to argue the planning model has failed on its own terms. - Celebrates the unplanned successes — gems/jewellery/diamond exports, Middle East remittances, the women's Pappad industry — as evidence of a 'sleeping economic giant' that officialdom obstructs. - Indicts the public sector for crowding out primary state functions (water, primary education, roads, health) while running bread-making, soft drinks and bus transport at a loss. - Names the underlying ideology 'Synthetic Socialism' — statism plus hypocrisy — and identifies ceilings on executive pay, bans on company donations to parties, and the resulting industrialist arm-twisting as symptoms of the double standard. - Warns the 1980s will bring population pressure, stagflation, energy shortages and adverse trade balances that could push India back to its late-1950s / early-1960s condition unless policy changes. - Argues that only sustained education of public opinion, of the kind the Forum of Free Enterprise has carried on for 23 years, can compel politicians to abandon dogma. --- ## [Primary work] Is Nationalisation of Industries in Public Interest? URL: https://indianliberals.in/primary-works/is-nationalisation-of-industries-in-public-interest-gangadhar-gadgil-june-18-1979/ ### Summary This Forum of Free Enterprise pamphlet asks whether nationalisation still serves the public interest, and answers — emphatically — no. It opens with a brief historical framing piece signed by M. R. Pai, which traces nationalisation back to the socialist response to Industrial Revolution exploitation and argues that fifty years of European experience (the British Labour Party, Fabians, even the Chinese under Deng) has discredited public ownership as a vehicle for either efficiency or social justice. Pai catalogues the failures that drove socialists like Hugh Gaitskell, C. A. R. Crosland, R. H. S. Crossman, U Nu and Lee Kuan Yew to abandon nationalisation: loss of productivity once "everybody's business became nobody's business"; bureaucratic indifference to workers; monopoly contempt for consumers (LIC, IAC, the State Trading Corporation); and the illusion that parliamentary control could discipline the resulting bureaucracy. The substantive essay is Prof.… ### Body ## Summary This Forum of Free Enterprise pamphlet asks whether nationalisation still serves the public interest, and answers — emphatically — no. It opens with a brief historical framing piece signed by M. R. Pai, which traces nationalisation back to the socialist response to Industrial Revolution exploitation and argues that fifty years of European experience (the British Labour Party, Fabians, even the Chinese under Deng) has discredited public ownership as a vehicle for either efficiency or social justice. Pai catalogues the failures that drove socialists like Hugh Gaitskell, C. A. R. Crosland, R. H. S. Crossman, U Nu and Lee Kuan Yew to abandon nationalisation: loss of productivity once "everybody's business became nobody's business"; bureaucratic indifference to workers; monopoly contempt for consumers (LIC, IAC, the State Trading Corporation); and the illusion that parliamentary control could discipline the resulting bureaucracy. The substantive essay is Prof. Gangadhar Gadgil's "An Analysis of Arguments in Favour of Nationalisation," a point-by-point rebuttal of Industries Minister George Fernandes's 1979 proposal to nationalise the iron and steel, automobile and aluminium industries. Gadgil argues that the Janata Party's own election manifesto and Economic Charter explicitly rejected expansion of the public sector in favour of Gandhian trusteeship, decentralisation and small-scale industry; Fernandes's proposal is therefore inconsistent with the policy framework on which his government was elected. Gadgil then dismantles Fernandes's five stated grounds — that the industries are commanding heights, that they are controlled by big business houses, that they have failed to modernise, that they depend on public funds, and that they fail to serve public purposes — showing in each case that the public sector already produces a substantial share of steel and aluminium, that licensing, FERA, MRTP, taxation, credit allocation and conversion clauses already give Government "tremendous power to persuade, cajole or coerce" private enterprise, and that the Tatas, ACC and Mafatlal have in fact done pioneering work in rural development, ancillaries and research. The rendered pages close with Gadgil refusing the bail-out logic for sick units: loss-making private firms, he argues, should be allowed to fail or be acquired by entrepreneurs who can run them at a profit, with workers' interests protected by an unemployment-insurance scheme rather than by perpetuating waste through public takeover. The polemic positions itself within a wider liberal critique of dirigisme — invoking Deng's "black cat / white cat" pragmatism, Gandhian trusteeship, and the comparative record of public-sector banks, LIC, Indian Airlines and the State Trading Corporation as monopolies that have failed consumers. ## Key points - Frames nationalisation as a tool of public policy that must be judged solely by whether it serves public interest, not by socialist intent. - Argues that European democratic socialists and even Deng's China have abandoned nationalisation after finding it reduces productivity, oppresses workers and ignores consumers. - Identifies four canonical failures of public ownership: loss of personal stake ("everybody's business became nobody's business"), bureaucratic hostility to unions, monopoly indifference to consumers, and the illusion of parliamentary control. - Directly challenges Industries Minister George Fernandes's proposal to nationalise iron and steel, automobiles and aluminium, calling his arguments "flimsy" and inconsistent with the Janata Party's own election manifesto and Economic Charter. - Insists nationalisation is unnecessary for effective state control, since licensing, FERA, MRTP, credit allocation, conversion clauses and taxation already give Government "tremendous power to persuade, cajole or coerce" private enterprise. - Invokes Gandhian trusteeship — explicitly endorsed by the Janata Party — as the philosophically consistent alternative to nationalisation of large industries. - Argues that sick private-sector units should be allowed to enter liquidation or be acquired by entrepreneurs who can profit from them, with workers protected by an unemployment scheme rather than by social-waste bail-outs. - Notes counter-evidence to the "big business houses" charge: public-sector banks and financial institutions already hold near-controlling stakes in Tata Iron & Steel, and big houses' political clout has been visibly insufficient to prevent bank, insurance and textile nationalisation or confiscatory taxation. --- ## [Primary work] IS RIGHT TO PROPERTY NOT FUNDAMENTAL? URL: https://indianliberals.in/primary-works/is-right-to-property-c-k-daphtary-april-9-1970/ ### Summary This April 1970 Forum of Free Enterprise booklet, titled 'Is Right to Property Not Fundamental?', bundles three essays defending the place of the right to property within Part III of the Indian Constitution at a moment when the Congress government was preparing to dilute or remove Article 31. C. K. Daphtary, former Attorney-General of India, opens with a speech he delivered at the Forum's New Delhi Centre on 6 February 1970 that traces the constitutional history of property from the Round Table Conferences through the Fourth Amendment and the Supreme Court's compensation jurisprudence. He is followed by the constitutional commentator A. G. Noorani (reprinted from the Indian Express, 29-30 December 1969) and by A. G. Mulgaokar (reprinted from Freedom First, December 1969). All three contributors converge on the argument that property is the foundation of every other liberty, that judicial review of compensation is what stops 'just equivalent' from collapsing into 'illusory', and that removing the right from the Fundamental Rights chapter would license confiscation and weaken the Rule of Law. ### Body ## Summary This April 1970 Forum of Free Enterprise booklet, titled 'Is Right to Property Not Fundamental?', bundles three essays defending the place of the right to property within Part III of the Indian Constitution at a moment when the Congress government was preparing to dilute or remove Article 31. C. K. Daphtary, former Attorney-General of India, opens with a speech he delivered at the Forum's New Delhi Centre on 6 February 1970 that traces the constitutional history of property from the Round Table Conferences through the Fourth Amendment and the Supreme Court's compensation jurisprudence. He is followed by the constitutional commentator A. G. Noorani (reprinted from the Indian Express, 29-30 December 1969) and by A. G. Mulgaokar (reprinted from Freedom First, December 1969). All three contributors converge on the argument that property is the foundation of every other liberty, that judicial review of compensation is what stops 'just equivalent' from collapsing into 'illusory', and that removing the right from the Fundamental Rights chapter would license confiscation and weaken the Rule of Law. ## Essays ### Essay 1 Daphtary argues that the right to property has been treated as a vital and essential human right in every country and every age, but that scientific and industrial progress in the late 1800s gave property a new, potentially dominating dimension which justified regulation in the public interest. He recounts how the framers of the Indian Constitution, after long debate at the Round Table Conferences and in the Constituent Assembly, deliberately placed property and its acquisition (Sections 30 and 31, later Articles 30 and 31) among the Fundamental Rights, with judicial review built in 'because that power was considered to be that the Constitution expressly provided for a direct approach to the Supreme Court itself for relief.' He then walks through the Supreme Court's struggle with the word 'compensation' after the zamindari laws, the 1955 Fourth Amendment, Mrs. Bela Banerjee's case, and the Court's ruling in State of Gujarat v. Shantilal Mangaldas that compensation principles must not be illusory or arbitrary. Daphtary closes by re-reading Nehru's own Constituent Assembly speech of 10 September 1949, in which Nehru insisted the judiciary should come in 'to see if there has been a fraud on the Constitution.' On that authority Daphtary concludes that the right to property is 'fundamental in another sense' because it is the foundation of every other right, that the Courts should still look upon the Judiciary kindly and prefer to do without it only if absolutely necessary, and that removing the right altogether without compensation 'only opens the flood-gates of confiscation and expropriation.' - Property has historically been treated as a vital and essential right because it secures personality, status, comfort and old-age protection, and is the foundation of every other right. - The framers of the Indian Constitution decided after the Round Table Conferences to place property and its acquisition expressly in the Fundamental Rights chapter so that Supreme Court review was guaranteed. - Successive Supreme Court rulings (zamindari cases, the Fourth Amendment, Bela Banerjee, State of Gujarat v. Shantilal Mangaldas) preserved a justiciable floor against compensation principles that are illusory or arbitrary. - Daphtary cites Nehru's own 1949 Constituent Assembly speech to argue that Article 31 was always meant to be patrolled by the judiciary against 'a fraud on the Constitution'. - Removing the right to property altogether, he warns, would open 'the flood-gates of confiscation and expropriation' and is no real obstacle to genuine social welfare legislation. ### Essay 2 Noorani's essay (Section II, reprinted from the Indian Express of 29 and 30 December 1969) argues that the campaign to strip the right to property from the Fundamental Rights chapter began in Communist quarters but has now been picked up by the Congress government and even endorsed by ministers like K. V. Raghunatha Reddy. He treats the proposal as transparently wrong: the demand mistakes retention of the right for a transfer of power from judges to Parliament over the quantum of compensation, when in truth the Directive Principles of State Policy already make implementation impossible if property is also retained. He draws on Granville Austin's account of the Fourth Amendment and on Justice Hidayatullah's reasoning in Golak Nath to show that the framers expected the courts to police arbitrary expropriation. Noorani then turns to comparative material — Article 15 of the West German Basic Law of 1949 (which expressly provides for compensation recourse to the ordinary courts and which, contrary to claims made on the Supreme Court bench, allows judicial review in 'socialisation' cases) — and to the 1965 International Commission of Jurists conference in Bangkok, whose theme of 'Economic and Social Development within the Rule of Law' concluded that nationalisation should proceed by democratic procedures and on payment of fair and reasonable compensation determined by an independent tribunal. His verdict is that the present campaign represents 'not social progress but the abolition of the Rule of Law'. - The demand to remove property from Fundamental Rights originated in Communist quarters but is now being pushed by the Congress government and ministers. - Noorani uses Granville Austin's history of the Fourth Amendment to argue the framers deliberately made the fundamental rights justiciable. - Justice Hidayatullah's reasoning in Golak Nath is invoked to show that property's protection is not unique but part of a constitutional architecture of justiciable rights. - Comparative reading of Article 15 of the West German Basic Law shows that even modern democratic socialist constitutions preserve compensation recourse to the ordinary courts. - The 1965 ICJ Bangkok conference on Economic and Social Development within the Rule of Law concluded that nationalisation requires democratic process and independent-tribunal compensation. ### Essay 3 Mulgaokar's essay (Section III, reprinted from the December 1969 issue of Freedom First) re-frames the property debate around what 'fundamental' can possibly mean if a fundamental right can be restricted away by ordinary legislative process. He surveys the moral, legal and economic case for retaining the right, observing that the Supreme Court has already conceded Parliament's amending power, so the move to abridge property rights is gratuitous rather than necessary. The deeper risk, he argues, is precedent: if property can be peeled off the Fundamental Rights chapter on the whim of the moment's majority, no other right is safe — 'the right to move to any place in the union territory given to every citizen' could be the next to go. He then makes a procedural-constitutional argument addressed directly to President V. V. Giri. Citing the 1910 British precedent in which Asquith was compelled, after Edward VII's death, to fight a second general election within months before George V would create peers to pass the Lloyd George Budget and the Parliament Act, Mulgaokar contends that no government should be allowed to amend the Constitution in 'such a major way' without a clear electoral mandate, and that it is the President's 'bounden duty' to warn the Prime Minister accordingly. - Mulgaokar's central question: what does 'fundamental' mean if a right can be restricted or taken away by ordinary legislation at the fancy of legislators? - He warns that abridging property would set a precedent reaching to other rights, citing the freedom of movement guarantee as the next plausible casualty. - Surveying twenty years of legislative haste, blind adherence to slogans and 'illusory immediate satisfaction', he argues that judicial review is what protects against oppressive laws. - Mulgaokar invokes the 1910 Asquith/Lloyd George precedent — where the Crown insisted on a fresh general election before agreeing to create peers and pass the Budget and the Parliament Act — to argue that major constitutional change requires a popular mandate. - He directs his argument to President V. V. Giri, urging him to warn the Prime Minister that he cannot assent to a constitutional amendment of this magnitude without the people first declaring their wishes at an election. --- ## [Primary work] Is Socialism Outdated? URL: https://indianliberals.in/primary-works/is-socialism-outdated-n-a-palkhivala-mar10-1966/ ### Summary This March 1966 Forum of Free Enterprise booklet stitches together three short polemics that frame socialism as an exhausted creed and liberalism as its successor. N. A. Palkhivala's 'The Shells of Socialism' (reproduced from the Economic Times of 7 February 1966) attacks Asoka Mehta's Saugor University convocation address and the drift toward bank nationalisation; former British Prime Minister Sir Alec Douglas-Home's 'Why Socialism Always Fails' (via INFA) argues that socialism collides with human nature and the profit motive; and Swatantra Party MP M. R. Masani's 'Will Liberalism Survive Socialism?' (from Swarajya Annual 1966) parades Soviet shortages, Indian wage stagnation, and West German prosperity to argue that 'isms have become wasms' and that liberalism — not State-ism — is the quicker road to social justice. The three pieces share a common publisher, a common antagonist (Indian planning orthodoxy in the wake of Nehru's death and the food crisis), and a common rhetorical posture: socialism is morally enervating, economically sterile, and globally in retreat. ### Body ## Summary This March 1966 Forum of Free Enterprise booklet stitches together three short polemics that frame socialism as an exhausted creed and liberalism as its successor. N. A. Palkhivala's 'The Shells of Socialism' (reproduced from the Economic Times of 7 February 1966) attacks Asoka Mehta's Saugor University convocation address and the drift toward bank nationalisation; former British Prime Minister Sir Alec Douglas-Home's 'Why Socialism Always Fails' (via INFA) argues that socialism collides with human nature and the profit motive; and Swatantra Party MP M. R. Masani's 'Will Liberalism Survive Socialism?' (from Swarajya Annual 1966) parades Soviet shortages, Indian wage stagnation, and West German prosperity to argue that 'isms have become wasms' and that liberalism — not State-ism — is the quicker road to social justice. The three pieces share a common publisher, a common antagonist (Indian planning orthodoxy in the wake of Nehru's death and the food crisis), and a common rhetorical posture: socialism is morally enervating, economically sterile, and globally in retreat. ## Essays ### The Shells of Socialism *By N. A. PALKHIVALA* Palkhivala uses Asoka Mehta's convocation address at Saugor University as a launchpad for a broader assault on the central-planning consensus. He argues that Mehta's hints at bank nationalisation jolted the capital market and unnerved investors at a time when Indian banking was already two-thirds public-sector and when the Indian National Congress lacked consensus on the question — citing Nehru's May 1964 reassurance and T. T. Krishnamachari's June 1964 reversal as evidence that 'the Cabinet alone should speak as a body'. He contrasts Mehta's preoccupation with curbing private monopoly against the country's real crisis: a food emergency that demands incentives to landholders, not heavier imposts. The essay ends by reclaiming the language of the Constitution — 'justice', 'equality of status and opportunity' — and arguing that genuine socialism means levelling up through private enterprise, not the 'rigid shells' of state ownership. - Frames Asoka Mehta's Saugor convocation as a portentous and possibly unauthorised signalling of further nationalisation. - Notes that the State Bank already accounts for 25 per cent of paid-up capital and 32 per cent of deposits of all Indian scheduled banks — making further nationalisation redundant. - Records Nehru's 22 May 1964 reassurance against bank nationalisation and T. T. Krishnamachari's 5 June 1964 reversal as evidence of Cabinet drift. - Argues that India's food crisis requires incentives to landholders, not ceilings on irrigated holdings. - Insists wealth must be created before it is distributed, and that the Constitution's Preamble uses 'justice' and 'equality of opportunity' — not the 'empty label' of socialism. ### Why Socialism Always Fails *By SIR ALEC DOUGLAS-HOME* Former British Prime Minister Sir Alec Douglas-Home offers a brisk first-principles argument that socialism fails because it presumes men are equal in capacity when nature has made them unequal. State ownership, he argues, denies the profit motive and reward-for-skill that drive the average man to excel, and so production sinks to the pace of the slowest. He surveys Russia, Britain, and the wider socialist world to claim that nationalisation has eroded efficiency, hardened inequality of a different sort, and forced Socialists into the same machinery of incentives, prices, and taxes that they once denounced. The piece closes with the conservative concession that one can only dismiss a creed by championing a better one — setting up the next essay's defence of liberalism. - Roots socialism's failure in a clash with human nature: men are not equal and society moves at the pace of the slowest under collective ownership. - Argues nationalisation kills the profit motive, widens the reward gap between skilled and unskilled, and produces mediocrity. - Notes that even Russia is 'changing to cater to incentive and profit and reward' under the form of a bureaucratic state capitalism. - Contrasts Socialism's expansion of state ownership against Conservatism's vision of the state serving — not dominating — the individual. - Concedes that no creed can be discarded without a better alternative, framing the case for the liberal economy that follows. ### Will Liberalism Survive Socialism? *By M. R. MASANI M.P.* Masani opens with an autobiographical confession that he was once an ardent socialist and author of Socialism Reconsidered, then locates his own liberal turn in the example of Mahatma Gandhi, whom he reads as an enemy of state violence and a tester of every policy by its effect on the poorest. He sets up two tests — the Lenin-Gandhi-Oxford definitions of socialism, all of which collapse around the requirement of state ownership — and runs them through the experience of the Soviet Union, Eastern Europe, India, and the Western free economies. Soviet life is shabby, agriculturally calamitous, and economically unequal; India's 'soviet-style' planning since 1947 has produced stagnant wages, a withering middle class, and a 'new class' of commissars and protected businessmen; meanwhile West Germany, Japan, Britain, France, and Scandinavia have raised their living standards through free-market economies. Citing Hobhouse and Parkinson, Masani redefines liberalism as the politics of self-directing personality and 'opportunity', and closes with the slogan that 'in our time all isms have become wasms', invoking Carlos Romulo's 'I am going forward' as the liberal's reply to the left-right question. - Reframes Gandhi as a liberal whose test of any system was its impact on 'the poorest and the weakest', not as a socialist. - Argues that every classical definition of socialism — Lenin's, the Oxford Dictionary's, the British Labour Party's — reduces to state ownership of the means of production. - Uses Soviet housing, food, clothing, wage inequality (20:1 vs India's 25:1), and the income tax + wealth tax exceeding 100 per cent to deny socialism's promises of equality and prosperity. - Identifies a 'new class' of commissars and protected Indian businessmen who replace the old exploiters under state patronage. - Holds up West Germany under Erhard, Japan, France, Britain, the Scandinavian countries, the US, Australia, and New Zealand as evidence that free economies — not 'Etatisme' — lift wages and living standards fastest. - Quotes Nehru in Kathmandu (1959) conceding that 'Socialism in a poor country can only mean that it will remain permanently poor', and uses it as an indictment of Indian planning. - Concludes with the 'isms have become wasms' line and Carlos Romulo's 'I am going forward' as the liberal's directional reply. --- ## [Primary work] IS SOCIALISM THE RIGHT PATH? URL: https://indianliberals.in/primary-works/is-socialism-the-right-path-by-sh-batlivala-december-29-1956/ ### Summary Reprinted from The Times of India of 28 December 1956, S. H. Batlivala's short polemic — issued as a Forum of Free Enterprise pamphlet — argues that India's drift toward a "Socialistic pattern of economy" misreads the country's actual development needs. Batlivala opens by conceding that private capital alone cannot finance the Government's plans, but he insists that this is a case for collaboration between the private and public sectors, not for taxation that would imperil the Second Five-Year Plan. He marshals testimony from Sardar Vallabhbhai Patel and former Finance Minister C. D. Deshmukh to argue that the Indian civil service lacks the depth to run nationalised industries, and asks whether the Second Plan can succeed when administered by a thinned-out bureaucracy. The heart of the piece is a sustained attack on British and Indian planning by analogy. Batlivala quotes Alfred Edwards, a defector from the U.K. Labour Party, on how nationalising the Bank of England, the coal mines, transport, power and steel left British industry with weaker output than before: coal production was 155,000 tons per week below 1938 levels despite mechanisation.… ### Body ## Summary Reprinted from The Times of India of 28 December 1956, S. H. Batlivala's short polemic — issued as a Forum of Free Enterprise pamphlet — argues that India's drift toward a "Socialistic pattern of economy" misreads the country's actual development needs. Batlivala opens by conceding that private capital alone cannot finance the Government's plans, but he insists that this is a case for collaboration between the private and public sectors, not for taxation that would imperil the Second Five-Year Plan. He marshals testimony from Sardar Vallabhbhai Patel and former Finance Minister C. D. Deshmukh to argue that the Indian civil service lacks the depth to run nationalised industries, and asks whether the Second Plan can succeed when administered by a thinned-out bureaucracy. The heart of the piece is a sustained attack on British and Indian planning by analogy. Batlivala quotes Alfred Edwards, a defector from the U.K. Labour Party, on how nationalising the Bank of England, the coal mines, transport, power and steel left British industry with weaker output than before: coal production was 155,000 tons per week below 1938 levels despite mechanisation. A satirical "Form of Daily Service for Use in Govt. Depts." from the New Statesman dramatises the paralysis of civil servants caught between committees and circulars. He ridicules "the Labour idea of planning" as installing London School of Economics theorists over industries they have never built, and amplifies the point with a now-famous comparison: the Ten Commandments run to 297 words, Lincoln's Gettysburg address to 266, the Declaration of Independence to 300, while the U.S. Office of Price Stabilisation's order regulating cabbage prices runs to 26,911. On the income-ceiling proposal then circulating inside the Congress, Batlivala marshals data to show its futility — even Hugh Gaitskell warned that the British equivalent would yield only £53 million, and Soviet wage data shows widening inequality between top managers and the 400-rouble minimum. American examples (a 23-cents-on-the-dollar real take from a $25,000 income; Harlow Curtice's voluntary $200,000 pay cut at General Motors) are deployed to argue that punitive taxation does not redistribute, it merely demoralises producers. The pamphlet closes with the imprint of the Forum of Free Enterprise at Sohrab House, Bombay, and a back-cover quotation from Jawaharlal Nehru affirming that material progress must not come "at the expense of the spirit of man" — turned, by placement, into an implicit rebuke of the very planning enthusiasm Nehru himself led. ## Key points - Batlivala concedes private capital cannot alone finance the Second Five-Year Plan, but argues that imposing fresh taxation on private industry and investors will imperil the Plan rather than save it. - He cites Patel and ex-Finance Minister C. D. Deshmukh to show that the Indian civil service is too thin to run nationalised industries, of whom only fifteen per cent are good performers by Patel's own count. - Britain's nationalisation programme is treated as a cautionary case: under the National Coal Board, weekly coal output fell 155,000 tons below 1938 despite mechanisation, and Alfred Edwards is quoted recanting the socialist's caricature of business. - A New Statesman "Form of Daily Service for Use in Govt. Depts." is reprinted to satirise bureaucratic paralysis, indecision, and worship of committees over common sense. - Batlivala's signature comparison contrasts the brevity of the Ten Commandments (297 words), Lincoln's Gettysburg Address (266) and the Declaration of Independence (300) with a 26,911-word U.S. Office of Price Stabilisation order regulating cabbage prices, as evidence that controls breed verbosity. - Against Congress proposals for an income ceiling, he marshals Hugh Gaitskell's own warning that taxing the wealthy would raise only £53 million, alongside Soviet wage data showing socialist inequality widening between officials and the 400-rouble minimum. - American comparisons — a $25,000 income net-of-tax of about $4,650, and Harlow Curtice's voluntary $200,000 pay cut at General Motors after a strike-driven slump — are used to claim that high marginal taxation neither redistributes meaningfully nor produces social equality. - The pamphlet closes with the Forum of Free Enterprise imprint and a Nehru epigraph on the back leaf insisting material progress must not be bought at the expense of "the spirit of man" — positioned to enlist Nehru against the planning regime he himself champions. --- ## [Primary work] IS THERE A MIDDLE WAY? URL: https://indianliberals.in/primary-works/is-there-a-middle-way-dr-f-a-mehta-january-15-1995/ ### Summary Dr. Fredie A. Mehta's 'Is There a Middle Way?' is the 29th A.D. Shroff Memorial Lecture, delivered under the auspices of the Forum of Free Enterprise in Bombay on 30 November 1994 and published as a pamphlet on 15 January 1995. Mehta poses the central economic question of India's early reform decade: is there a path between Capitalism and Socialism, between the Price Mechanism and Planning, between Efficiency and Equity? His answer is an emphatic yes, framed by Prime Minister Narasimha Rao's 'Middle Path' speech at Davos and defended against both pro-reform impatience and left-wing rejection. He argues that 'a Federal country with innumerable vested interests' and 'a background of 40 years of bureaucratic socialism' cannot perform an overnight miracle; gradualism is required 'both on pragmatic and humane grounds' because in a democracy people 'can be brain-washed; they cannot be brow-beaten'. Mehta then mounts a sustained defence of the proposition that Free Enterprise and a Welfare State are mutually complementary rather than antagonistic.… ### Body ## Summary Dr. Fredie A. Mehta's 'Is There a Middle Way?' is the 29th A.D. Shroff Memorial Lecture, delivered under the auspices of the Forum of Free Enterprise in Bombay on 30 November 1994 and published as a pamphlet on 15 January 1995. Mehta poses the central economic question of India's early reform decade: is there a path between Capitalism and Socialism, between the Price Mechanism and Planning, between Efficiency and Equity? His answer is an emphatic yes, framed by Prime Minister Narasimha Rao's 'Middle Path' speech at Davos and defended against both pro-reform impatience and left-wing rejection. He argues that 'a Federal country with innumerable vested interests' and 'a background of 40 years of bureaucratic socialism' cannot perform an overnight miracle; gradualism is required 'both on pragmatic and humane grounds' because in a democracy people 'can be brain-washed; they cannot be brow-beaten'. Mehta then mounts a sustained defence of the proposition that Free Enterprise and a Welfare State are mutually complementary rather than antagonistic. He cites Sweden's 73% public-expenditure ratio, the persistence of large public sectors during the Thatcher and Reagan eras, Adam Smith's true target (the 'Right Wing, Mercantile Lobby' rather than the State as such), and Schumpeter on competition as 'the gale of creative destruction'. The Price Mechanism, he insists, is 'a very strict disciplinarian'; Free Enterprise delivers the goods in the long run while bringing dislocation, inequality and even crime in the short run, which is precisely why safety nets, productivity growth, tax buoyancy, privatisation and continued state activity in social infrastructure must run together. The sharpest passages turn on India's domestic pathologies. Mehta describes an Indian economy converted into 'warring segments' — public versus private, large-scale versus small-scale, foreign versus indigenous, industrial labour versus management, tenants versus landlords — the antithesis of a harmonised 'India Inc' on the Japan Inc pattern. He attacks rent-control legislation that has frozen rents at 1940 levels, subsidies that have reduced small-scale industry to permanent crutches, and a middle class that has captured the reform narrative ('I'm all right, Jack') while ignoring the 'larger Under Class'. To bind promoters, investors and the poor together he sketches a seven-plank Trusteeship scheme drawn from Mahatma Gandhi: preferential share allotments to Indian promoters held in a Specified Trust whose dividends flow to anti-poverty applications. A substantial Appendix marshals historical evidence for the Middle Path: Leon Trotsky on the impossibility of frictionless central planning ('Economic accounting is unthinkable without market relations'), the 1944 Bombay Plan's chapter on national planning, Minoo Masani's Mixed Economy thesis, Prof. Dublin, James E. Meade and W. Arthur Lewis on democratic planning, Otto von Bismarck on 'oiling' German capitalism, Ludwig Erhard's 'socially oriented' market, Roosevelt and Keynes on state intervention, and recent Tory speeches by Kenneth Clarke and Peter Lilley together with Robert Heilbroner's reflection that 'the collapse of socialism should not put an end to our social imagination'. The peroration returns to four watchwords — Gradualism, Compromise, Tolerance and Pragmatism — and to Gandhiji's 'talisman' as the moral compass for combining 'a passion for rapid economic growth with a compassion for the poor'. ## Key points - Mehta frames the central economic question of the 1990s reform decade as whether a Middle Way exists between Capitalism and Socialism, Price Mechanism and Planning, Efficiency and Equity — and answers yes. - He defends the Narasimha Rao government's gradualist reform sequencing (the 'Middle Path' Davos speech) against both Right-Wing impatience and Left-Wing rejection, on the ground that 40 years of bureaucratic socialism cannot be undone in four. - Free Enterprise and the Welfare State are presented as mutually complementary, with Sweden, Thatcher- and Reagan-era public spending, and Bismarck/Erhard cited as evidence that 'socially oriented' markets are the actual historical pattern. - The Price Mechanism is defended as 'a very strict disciplinarian' that allocates resources via Schumpeter's 'gale of creative destruction', not as a magic wand that inflicts few hardships. - Mehta diagnoses India's economy as a system of 'warring segments' (public/private, large/small, labour/management, tenants/landlords) rather than a harmonised 'India Inc' on the Japan Inc model. - He criticises the middle class for capturing the reform narrative while ignoring the unorganised 'Under Class', and insists anti-poverty programmes must be honest and administratively efficient rather than political-economic frauds. - He proposes a seven-plank Trusteeship-Concept scheme, inspired by Mahatma Gandhi, in which Indian promoters receive preferential share allotments held in a Specified Trust whose dividends fund poverty alleviation. - The Appendix assembles a century of evidence — from Trotsky and the 1944 Bombay Plan to Erhard, Roosevelt-Keynes, Kenneth Clarke, Peter Lilley and Robert Heilbroner — to show that the Middle Path has been the working reality of both socialist and capitalist economies. --- ## [Primary work] It's India's Turn Now URL: https://indianliberals.in/primary-works/its-indias-turn-now-jayant-sinha/ ### Summary "It's India's Turn Now" reproduces the text of an address delivered by Jayant Sinha, then Minister of State for Civil Aviation, in Mumbai on 29 September 2016 to mark the Diamond Jubilee of the Forum of Free Enterprise and the Golden Jubilee of the A. D. Shroff Memorial Trust. Sinha frames the moment as one in which globalist liberalism is under siege — citing the first US presidential debate, the Brexit vote, the rise of European extremist parties and global terrorism — and argues that India, with its single-party majority and a decisive prime minister, is now positioned to take up the vanguard of a new global order and become a "Vishwa Guru." The address is organised around three theses. First, India's growth model is inherently frugal and sustainable: with only 2.5% of the world's land, 4% of its fresh water but 17% of its population, India must — and does — generate GDP with far less energy, carbon, capital and leverage than China or the United States, and so its growth is good for the planet as well as for Indians.… ### Body ## Summary "It's India's Turn Now" reproduces the text of an address delivered by Jayant Sinha, then Minister of State for Civil Aviation, in Mumbai on 29 September 2016 to mark the Diamond Jubilee of the Forum of Free Enterprise and the Golden Jubilee of the A. D. Shroff Memorial Trust. Sinha frames the moment as one in which globalist liberalism is under siege — citing the first US presidential debate, the Brexit vote, the rise of European extremist parties and global terrorism — and argues that India, with its single-party majority and a decisive prime minister, is now positioned to take up the vanguard of a new global order and become a "Vishwa Guru." The address is organised around three theses. First, India's growth model is inherently frugal and sustainable: with only 2.5% of the world's land, 4% of its fresh water but 17% of its population, India must — and does — generate GDP with far less energy, carbon, capital and leverage than China or the United States, and so its growth is good for the planet as well as for Indians. Second, India's for-profit and non-profit entrepreneurs, supported by a maturing innovation ecosystem (e-commerce marketplaces, payment banks, microfinance, electric two-wheelers), are uniquely placed to serve the "Next 6 Billion" at the base of the pyramid that neither traditional governments nor large companies have served well. The third and most polemical thesis is a call to redefine the Indian state. Sinha attacks the inheritance of a "Nehruvian sarkar" or maibaap sarkar — large entitlement programmes such as NREGA, the PDS and PM Gram Sadak Yojana — as an extension of the dynastic rule of Rajas, Maharajas, Nawabs and Sultans that has failed both citizen and exchequer. In its place he prescribes a "Kautilyan sarkar": a lean, rule-based, non-discretionary umpire that secures property and tenancy rights, strengthens regulators (RBI, SEBI, TRAI, NHAI, the new Real Estate Regulator), invests in public goods (roads, railways, digital connectivity) and coordinates with private capital to overcome collective-action market failures. The booklet closes with a peroration to the Mumbai audience as the pioneers "creating the next Indigo, the next Google, and the next Apple," who will transform both India and the world. ## Key points - The booklet is the verbatim text of Jayant Sinha's 29 September 2016 address marking the Diamond Jubilee of Forum of Free Enterprise and Golden Jubilee of the A. D. Shroff Memorial Trust. - Sinha argues that with free markets and globalism under siege (Brexit, US debate, European extremism), India is the natural new vanguard for an open global order and a 'Vishwa Guru' in the making. - He defends a 'frugal development model' using PPP GDP comparisons: India can generate growth with far less energy, carbon, capital and leverage than China or the US, and so India's growth is good for the planet. - Indian entrepreneurs and large companies — Amazon, Flipkart, Snapdeal, payment banks, microfinance — are positioned to serve the 'Next 6 Billion' at the base of the pyramid, where both states and big firms have historically failed. - The central polemic is a contrast between the 'Nehruvian sarkar' (maibaap, entitlement-heavy, exemplified by NREGA, PDS, PM Gram Sadak Yojana) and a 'Kautilyan sarkar' (rule-based, non-discretionary, minimum-government / maximum-governance). - Sinha praises the Modi government's Jan Dhan Yojana as a model of state-enabled market infrastructure — 100% bank-account coverage in 100 days — that financial inclusion is then built on by RBI/SEBI-regulated private players. - He frames the Kautilyan state metaphorically as the umpire and groundsman: it prepares the pitch, defines rules, builds public goods, and only then steps off the field so entrepreneurs can play. - Minoo R. Shroff's introduction underscores the speech's polemical contrast with the 'Nehruvian Sarkar or maibaap' and praises Sinha for differentiating the roles of business and government for a globalised India. --- ## [Primary work] JOINT SECTOR—SOME ISSUES URL: https://indianliberals.in/primary-works/joint-sector-some-issues-by-minoo-shroff-1972/ ### Summary Minoo R. Shroff's 1972 booklet 'Joint Sector — Some Issues', published by the Forum of Free Enterprise, is the printed version of a public lecture delivered in Bombay on 13th October 1972, against the backdrop of the Dutt Committee's then-emerging proposals for institutionalising the joint sector in Indian industry. Shroff treats the joint sector as a 'logical sequel' to the mixed economy of the previous two decades — an institutional framework in which private-sector managerial expertise is wedded to public-sector financial resources, with private equity participation capped at around 25%. He frames the move not as an ideological capitulation by either side but as a transformation of 'co-existence' into 'co-partnership', anchored on the conviction that competent professional management — not ownership — determines the success of an enterprise. The bulk of the booklet sketches operating principles for the joint sector.… ### Body ## Summary Minoo R. Shroff's 1972 booklet 'Joint Sector — Some Issues', published by the Forum of Free Enterprise, is the printed version of a public lecture delivered in Bombay on 13th October 1972, against the backdrop of the Dutt Committee's then-emerging proposals for institutionalising the joint sector in Indian industry. Shroff treats the joint sector as a 'logical sequel' to the mixed economy of the previous two decades — an institutional framework in which private-sector managerial expertise is wedded to public-sector financial resources, with private equity participation capped at around 25%. He frames the move not as an ideological capitulation by either side but as a transformation of 'co-existence' into 'co-partnership', anchored on the conviction that competent professional management — not ownership — determines the success of an enterprise. The bulk of the booklet sketches operating principles for the joint sector. Shroff insists on a compact, broad-based, professionally drawn board of directors; an independent-minded chairman able to withstand political pressure; a managing director nominated by the private partner with wide autonomy; and government/financial-institution nominees who can exercise judgement without 'constant consultation back and forth with their sponsors'. He also urges that investment in joint sector projects be exempted from MRTP Act clearance, arguing that the Act's purpose is already served by the structure itself. Subsequent sections recommend internal promotion and job enrichment in management; market-driven pricing and selling policies; rigorous cost consciousness in a 'relatively sheltered economy'; serious R&D outlays; and broad-based consultative industrial relations rather than paternalism. On accountability, Shroff argues for high but bounded transparency: managerial and social audits internally, and only an annual report to Parliament — sparing the management from day-to-day political and parliamentary interference, which he identifies as the principal source of stifled initiative in existing state enterprises. He closes by acknowledging 'many grey areas' but maintains that, given mutual trust and adequate groundwork, the joint sector experiment can succeed and 'pave the way for industrial revival', invoking W. W. Rostow's claim that the public-vs-private debate is itself 'old-fashioned' and that partnership is the most fruitful relationship for modern economies. ## Key points - Frames the joint sector as a 'logical sequel' to India's two-decade-old mixed economy — converting public–private co-existence into co-partnership, with private equity normally capped at 25%. - Argues that ownership is secondary to management: 'good competent professional management makes all the difference between success and failure of an enterprise, irrespective of ownership.' - Lays out a governance template — compact broad-based board, independent chairman, autonomous managing director nominated by the private partner, professionally drawn institutional nominees. - Calls for MRTP Act clearance to be waived for joint-sector investments, on the ground that the joint-sector structure itself already prevents concentration of economic power. - Lists operating priorities the author says have been 'paid only lip service': internal promotion and job enrichment, market-driven pricing, cost consciousness, dedicated R&D, and consultative industrial relations. - Insists on high but bounded accountability — managerial and social audits internally, but only an annual report to Parliament, to spare management the 'stifling' interference that has plagued state enterprises. - Cites Industrial Development Minister C. Subramaniam, Planning Minister D. P. Dhar, the IDBI Annual Report 1971-72, and W. W. Rostow to position the joint sector within contemporary policy debates. - Published by the Forum of Free Enterprise (Bombay) as a public-lecture booklet; Shroff is identified as a financial consultant, President of OPUL (Organisation for Public Life for Businessmen & Professionals) and past President of the Bombay Management Association. --- ## [Primary work] Judiciary Vis a Vis Parliament & Executive URL: https://indianliberals.in/primary-works/judiciary-vis-a-vis-parliament-and-executive-1981/ ### Summary Anil B. Divan's 1981 keynote address to the Bar Council of India Trust, published as a booklet by the Forum of Free Enterprise, traces the genealogy of judicial independence from Stuart England through colonial India to the first three decades of the Indian Supreme Court. Divan opens with the dictionary sense of 'vis-a-vis' as two parties facing each other, and asks whether the Court's recurrent confrontations with Parliament and the Executive — most recently the new Government's mass transfers of High Court judges and Chief Justices — could harden into 'eyeball to eyeball' confrontation. He grounds the answer in history: Sir Edward Coke's defiance of James I at Westminster Hall in 1608, the Act of Settlement (1701) securing judges' tenure during good behaviour, the colonial-era stand of Sir Peter Grant in Bombay (1829), and Sir Morris Gwyer's wartime striking down of Rule 26 of the Defence of India Rules. The address then walks through the Constituent Assembly's intent — quoting Nehru, Ambedkar and B. N.… ### Body ## Summary Anil B. Divan's 1981 keynote address to the Bar Council of India Trust, published as a booklet by the Forum of Free Enterprise, traces the genealogy of judicial independence from Stuart England through colonial India to the first three decades of the Indian Supreme Court. Divan opens with the dictionary sense of 'vis-a-vis' as two parties facing each other, and asks whether the Court's recurrent confrontations with Parliament and the Executive — most recently the new Government's mass transfers of High Court judges and Chief Justices — could harden into 'eyeball to eyeball' confrontation. He grounds the answer in history: Sir Edward Coke's defiance of James I at Westminster Hall in 1608, the Act of Settlement (1701) securing judges' tenure during good behaviour, the colonial-era stand of Sir Peter Grant in Bombay (1829), and Sir Morris Gwyer's wartime striking down of Rule 26 of the Defence of India Rules. The address then walks through the Constituent Assembly's intent — quoting Nehru, Ambedkar and B. N. Rau on the need for judges free from party bias — and the inaugural sitting of the Supreme Court on 28 January 1950, where Chief Justice Kania set the standard that the Court 'should be quite untouchable by the legislature and the executive authority'. Divan uses this benchmark to audit each decade. The 1950s emerge as 'the era of the conservatives', with foundational losses on personal liberty (the Gopalan judgment killed 'due process') offset by sharp equality decisions (Ameerunissa Begum, Ram Prasad Sahi) and Vivian Bose's prose elevating Article 14 into an 'attitude of mind'. The 1960s, dominated by Gajendragadkar, Subba Rao, Hidayatullah and J. C. Shah and influenced by Ridge v. Baldwin, Gideon's Trumpet and the Warren Court, sharpen review of administrative action and culminate in Golaknath (1967) and the Supreme Court's defence of two judges of the UP High Court against the Vidhan Sabha. The Seventies, Divan argues, fall into three sub-periods marked by Keshavananda Bharati's basic-structure doctrine — 'probably the greatest blow in any civilized country by the Judiciary for the preservation of the democratic form of Government' — the Emergency-era low of ADM Jabalpur, which 'made the darkness complete', and a post-Emergency renaissance through Maneka Gandhi, the Hoosseinara undertrial cases and the International Airport Authority decision. By the end of the rendered pages Divan is celebrating the Court's openly activist posture as an 'instrument of social reform and social dynamics', while warning that a tidal wave of petitions is congesting its docket. The booklet's printed text breaks off at page 18; the final eight pages of the PDF (printed pages 19 onward) are not in this chunk. ## Key points - Framed as the keynote address to the Bar Council of India Trust on 25 January 1981, against the backdrop of the new Government's mass transfers of High Court judges and Chief Justices. - Builds the case for judicial independence by tracing it from Coke's 1608 defiance of James I, through the Act of Settlement (1701) and Sir Peter Grant's 1829 Bombay stand, to Sir Morris Gwyer's wartime striking down of Rule 26 of the Defence of India Rules. - Anchors the Indian standard in the Constituent Assembly Debates — Nehru, Ambedkar and B. N. Rau — and in Chief Justice Kania's inaugural address that the Court 'should be quite untouchable by the legislature and the executive authority'. - Audits the 1950s as conservative-era foundations: criticises the Gopalan judgment for stillborn personal liberty while praising equality decisions (Ameerunissa Begum, Ram Prasad Sahi) and Vivian Bose's interpretation of Article 14. - Reads the 1960s as a 'Renaissance of Administrative Law' through Gajendragadkar, Subba Rao, Hidayatullah and J. C. Shah, with Ridge v. Baldwin, Gideon's Trumpet and the Warren Court reshaping Indian doctrine and Golaknath asserting the law-making role of the judiciary. - Splits the Seventies into pre-Emergency, Emergency and post-Emergency phases, treating Keshavananda Bharati's basic-structure doctrine as a constitutional bulwark and ADM Jabalpur as the Court's lowest ebb. - Charts the post-Emergency revival via Maneka Gandhi, the Hoosseinara undertrial judgments, the International Airport Authority case and the expansion of 'State' in Part III, declaring an openly activist Court committed to social reform. - Flags that the Court's new activism is producing a flood of petitions and mounting arrears, with constitutional matters awaiting hearing. --- ## [Primary work] ખોજ URL: https://indianliberals.in/primary-works/khoj-january-april-2009/ ### Summary Khoj (ખોજ — જીવન એક અવિરત ખોજ), a Gujarati-language periodical published from Vadodara, presents this combined double issue (January–April 2009, Year 3, Issues 1–2) under the thematic banner 'આર્થિક કટોકટી' (Economic Crisis). In the rendered pages, the issue opens with an editorial by Ambrish Mehta that frames the 2008–09 global financial crisis as an occasion to revisit foundational questions about markets and state regulation, and previews contributions from economist John Taylor (via a Peter Robinson interview), Mukesh Adenwala, and Ela R. Bhatt. The letters section brings a polyphonic range of reader voices on communalism, Muslim identity, and the role of the periodical itself — including a 1942 Gujarati poem 'The Prayer of Youth' by Nathalal Dave of Bhavnagar.… ### Body ## Summary Khoj (ખોજ — જીવન એક અવિરત ખોજ), a Gujarati-language periodical published from Vadodara, presents this combined double issue (January–April 2009, Year 3, Issues 1–2) under the thematic banner 'આર્થિક કટોકટી' (Economic Crisis). In the rendered pages, the issue opens with an editorial by Ambrish Mehta that frames the 2008–09 global financial crisis as an occasion to revisit foundational questions about markets and state regulation, and previews contributions from economist John Taylor (via a Peter Robinson interview), Mukesh Adenwala, and Ela R. Bhatt. The letters section brings a polyphonic range of reader voices on communalism, Muslim identity, and the role of the periodical itself — including a 1942 Gujarati poem 'The Prayer of Youth' by Nathalal Dave of Bhavnagar. The five substantive articles visible in the rendered pages cover: a Hepatitis B outbreak in Modasa traced to unqualified practitioners (Rajesh Mishra); tribal women's resistance to liquor in south Gujarat (Varsha Chaudhary); a critique of 'moral policing' in contemporary India referencing Gandhi, Nehru, and Tagore (Ashvinkumar Karia); a translated analysis of Taliban rule and human rights erosion in Pakistan's Swat Valley (Murtaza Razvi, translated from Dawn by Trupti Parekh); an appeal for Hindu-Muslim communal harmony in the wake of Deoband fatwas (Ismail Gandhi); and a substantive essay on the state of the sadabhavana (goodwill) movement in Gujarat seven years after the 2002 riots (Rajesh Mishra). The thematic centre of gravity in the rendered pages lies at the intersection of civil society, communalism-secularism, and public health — with the economic-crisis frame announced on the cover and in the editorial but not yet developed in the articles falling within the first twenty pages. ## Essays ### સંપાદકીય The editorial by Ambrish Mehta, written as the global financial crisis broke, situates the 2008–09 meltdown in the context of the perennial debate between 'bazaar' (market) and 'sarkar' (state). In the rendered pages the editor argues that most commentary reflexively blames free markets, but contends that a factual, evidence-based inquiry is needed. He cites economist John Taylor as having investigated the crisis systematically and concluded that excessive government intervention and regulatory failure — not unregulated markets — were among the primary causes. The editorial previews the issue's multi-author approach to the crisis: Peter Robinson's translated interview with John Taylor (from Hoover Institution), Mukesh Adenwala's English article, and Ela R. Bhatt's piece on poverty. - Frames the 2008–09 crisis as reopening foundational questions about the respective roles of market and state in economic life. - Argues against ideological reflex and for evidence-based analysis — citing John Taylor's finding that government intervention, not free markets, was a primary cause. - Previews contributions from Peter Robinson (John Taylor interview), Mukesh Adenwala (English essay on the crisis), and Ela R. Bhatt (poverty). - Notes that the crisis slowed growth in India, China, and other emerging economies as well as the West. - Establishes the issue's central theme: understanding what actually happened and why, not scoring ideological points. ### પત્રો The letters section (pages 5–8) carries responses from multiple readers across Gujarat. In the rendered pages, letters engage with the previous issue's articles on Islam and communal peace, criticise or praise the periodical's editorial direction, and address the aftermath of the November 2008 Mumbai attacks. A standout contribution is a 1942 poem 'The Prayer of Youth' by Nathalal Dave of Bhavnagar — a verse about freedom of conscience and resistance to tyranny, reprinted in the Khoj letters column. Long letters from Hakim Rangwala (Bhavnagar) and others engage with Hindu-Muslim relations, the role of Muslim institutions in condemning terrorism, and the nature of secularism. Reader Surbhakant Parikh (Ahmedabad) makes a case for Khoj to expand its civic reach across Gujarat. The section is editorially interleaved with a subscription notice and subscription pricing information. - Letters span communalism, Muslim identity, Hindu-Muslim relations post-26/11 (2008 Mumbai attacks), and the periodical's editorial direction. - Jyotibhai Desai (Dedkdi) praises a previous article on Islam and communal peace but urges the editorial board not to repeat the same contributors. - A 1942 poem 'The Prayer of Youth' by Nathalal Dave (Bhavnagar) is reproduced — a statement of civic conscience and resistance to authoritarian suppression. - Hakim Rangwala's letter advocates Hindu-Muslim goodwill, critiquing communal violence and calling for Muslim institutions to speak clearly against terrorism. - Reader Surbhakant Parikh connects Khoj's mission to building a socially active readership in Gujarat. ### મોડાસા હીપેટાઈટીસ બી ઘટના *By રાજેશ મિશ્રા* Rajesh Mishra's investigative article 'મોડાસા હીપેટાઈટીસ બી ઘટના ના અનુસંધાનમાં' (pages 9–11) documents a public health crisis in Modasa town, Gujarat, in which large numbers of residents contracted Hepatitis B through unsafe injection practices by unqualified RMP (Rural Medical Practitioner) doctors. In the rendered pages the article details how the epidemic unfolded over several days, the role of district health officials and state administration in delaying response and suppressing information, and the failures of regulatory oversight. Mishra cites IANS press agency reports and the views of virologist Dr. Vidya Acharkar on transmission mechanisms, and notes that Hepatitis B had already been declared epidemic (endemic) in Modasa before this incident. The article argues that the state's response was characterised by cover-up, bureaucratic paralysis, and political indifference, and calls for accountability and systemic reform of rural healthcare. - Documents a Hepatitis B outbreak in Modasa, Gujarat, linked to unsafe injection practices by unqualified RMP doctors. - Argues the state administration suppressed information and delayed response, while the laboratory and SGPT testing infrastructure failed. - Cites Dr. Vidya Acharkar (virologist) and IANS reports as key sources on transmission mechanisms. - Notes the wider Gujarat context: Hepatitis B already endemic in Modasa before this incident. - Calls for systemic reform of rural healthcare regulation and accountability of private unqualified practitioners. ### વિપદ સામેનો મરણિયો મોરચો *By વર્ષા ચૌધરી* Varsha Chaudhary's article 'વિપદ સામેનો મરણિયો મોરચો' (pages 12–13) is a field report on the liquor problem in tribal communities of south Gujarat and the community resistance it has generated. In the rendered pages Chaudhary documents how women and community members organise to stop liquor supply routes and confront local officials, against a backdrop of state prohibition that is effectively unenforced in tribal and rural areas. She describes specific episodes — liquor stockpiles of 150–200 litres per village, police inaction, and the social destruction wrought by addiction. The article invokes Swami Anand's book 'Dharti nu Loon' (Salt of the Earth) as a moral reference, and closes with a pointed numbered list of questions directed at political figures and state authorities about why the prohibition policy fails in practice. - Documents community-level resistance by women in south Gujarat tribal areas to widespread liquor availability despite formal prohibition. - Describes volumes of country liquor available daily in villages (150–200 litres), indicating the scale of prohibition failure. - Critiques police inaction and political complicity in allowing liquor to flow despite official prohibition. - Closes with rhetorical numbered questions to political figures: why is prohibition not enforced? - Invokes Swami Anand's 'Dharti nu Loon' as a moral-cultural reference for the stakes of the anti-liquor struggle. ### નૈતિકતાના સૈનિકો, એક નઝર... *By અશ્વિન કારીઆ* Ashvinkumar N. Karia's essay 'નૈતિકતાના સૈનિકો, એક નઝર ઇસ ઔર ભી કીજિયે' (p.14) critiques the phenomenon of moral policing in India. In the rendered pages Karia begins by noting how violence in the name of religion and morality — including the murder of Dipmal Swami in Orissa following the Christian-conversion controversies — has drawn international condemnation but minimal domestic accountability. He argues that 'moral soldiers' misuse the name of culture, religion, and tradition to attack individuals' freedom of thought, dress, and behaviour. Karia draws on a tradition of Western and Indian thinkers — Aristotle, Plato, Raphael, Gandhi, Nehru, Tagore, Vivekananda — who oppose coercive moralism, and argues that true morality can only be cultivated through inner conscience, not external coercion. The article appeals to individuals and civil society to challenge the discourse of religious enforcement. - Critiques moral policing in India — attacks on individuals in the name of religious or cultural 'morality'. - References the murder of Dipmal Swami in Orissa as a case of religiously motivated violence insufficiently condemned domestically. - Invokes Aristotle, Plato, Raphael, Gandhi, Nehru, Tagore, and Vivekananda as a combined tradition opposing coercive moralism. - Argues that genuine morality requires cultivation of inner conscience, not enforcement by vigilante groups or state agents. - Calls on women's colleges and civil institutions in Gujarat's cities and towns to resist the discourse of moral policing. ### સ્વાતના થીજી ગયેલા અધિકારો *By મુર્તઝા રઝવી* Murtaza Razvi's article 'સ્વાતના થીજી ગયેલા અધિકારો' (pages 15–16) analyses the human rights crisis in Pakistan's Swat Valley, translated from the Dawn newspaper (Indian Express, 18-2-08) by Trupti Parekh. In the rendered pages Razvi documents how the Pakistani government struck the Nizam-e-Adl deal with Sufi Mohammad's Taliban-aligned faction, effectively ceding Swat to parallel Shariat governance. The article describes the destruction of girls' schools, the coercion of women, the collapse of the regular judiciary, and the paralysis of local administration. Razvi raises the central question of whether a democratic state can tolerate two parallel legal orders — one constitutional, one Taliban-imposed — within its borders, and argues that the capitulation to the Taliban emboldens militancy while abandoning millions of civilians. - Documents the Pakistani government's capitulation to Taliban forces in Swat Valley via the Nizam-e-Adl agreement. - Describes the destruction of girls' schools, harassment of women, and erasure of civil rights under Taliban rule in Swat. - Raises the central constitutional question: can a democratic state allow two parallel systems of justice within its borders? - Argues that ceding Swat to Taliban governance sets a dangerous precedent, emboldening militancy across Pakistan. - Article is translated from Dawn newspaper (Indian Express, 18-2-08) by Trupti Parekh. ### મઝહબ નહીં સિખાતા... *By ઈસ્માઈલ ગાંધી* Ismail Gandhi's essay 'મઝહબ નહીં સિખાતા આપસ મેં બૈર રખના' (p.17) — the title paraphrasing Allama Iqbal's famous couplet — is an appeal for Hindu-Muslim communal peace. In the rendered pages Gandhi writes in the context of the Deoband–Bareilly theological debate following the 2008 Mumbai attacks, and argues that dominant media framing — which demands that Muslim institutions repeatedly prove their condemnation of terrorism — places an unfair burden on ordinary Muslims while obscuring the everyday reality of Hindu-Muslim coexistence. He argues that the real need is for institutional Muslim bodies to speak clearly against violence and for both communities to resist fringe provocations. The essay addresses an open letter to Muslim mosques and organisations in Gujarat, urging them to build programmes of dialogue and community service, and invokes the legacy of Gandhian institutions in Vadodara (Gandhibhavan, P.P. Vadilya Sansthan, Kareganj) as models. - Responds to the Deoband–Bareilly fatwa controversy post-26/11, arguing that Muslim institutions bear an unfair burden of proving anti-terror credentials. - Invokes Iqbal's line 'मज़हब नहीं सिखाता आपस में बैर रखना' (religion does not teach enmity between us) as the normative frame. - Argues everyday Hindu-Muslim coexistence is the norm, distorted by media attention to fringe voices. - Addresses an open letter to Muslim organisations and mosques in Gujarat, urging programmes of dialogue and service. - Invokes Gandhian institutions in Vadodara (Gandhibhavan, P.P. Vadilya Sansthan, Kareganj) as models of communal harmony work. ### સમયનો તકાજો : સદ્ભાવનાને પણ શૂન્યાવકાશ નથી ! *By રાજેશ મિશ્રા* Rajesh Mishra's essay 'સમયનો તકાજો : સદ્ભાવનાને પણ શૂન્યાવકાશ નથી!' (pages 18–20) is a substantive reflection on the state of the sadabhavana (communal goodwill) movement in Gujarat, written in the run-up to the 2009 general elections. In the rendered pages Mishra reports on a series of sadabhavana events held at Mahuva in February 2008, including a gathering organised under the banner of 'Manviya Ekta Sammelan', where topics including terrorism, communal harmony, and civil society roles were discussed. He engages Javeed Anand's commentary in Communalism Combat and analyses why sadabhavana events remain necessary but often fail to produce structural change. The essay argues that genuine communal harmony requires a commitment to rule of law and equal citizenship — not merely inter-faith social gatherings — and that the test is whether the state guarantees equal legal protection to every citizen regardless of faith. Mishra closes with an appeal to citizens of Vadodara district to hold parliamentary candidates accountable on these questions before the 2009 elections. - Assesses the sadabhavana (communal goodwill) movement in Gujarat seven years after the 2002 riots. - Reports on a Manviya Ekta Sammelan held at Mahuva in February 2008 with civil society participation. - Argues that genuine communal harmony requires rule of law and equal citizenship — not performative inter-faith events. - Engages Javeed Anand (Communalism Combat) as a commentator on Gujarat's communal situation. - Calls on voters in Vadodara district to hold 2009 parliamentary candidates accountable on communal justice. --- ## [Primary work] ખોજ URL: https://indianliberals.in/primary-works/khoj-january-february-2007/ ### Summary ખોજ (Khoj) — 'જીવન એક અવિરત ખોજ-આવિષ્કાર' — is the inaugural issue (Year 1, Issue 1, January–February 2007) of a Gujarati liberal periodical published from Vadodara by the Initiative for Open Society (Pahel Kendra), edited by Ambarish Mehta with an editorial board of Trushi Parekh, Anil Patel, and Rajesh Mishra. In the rendered pages (pp. 1–20), the issue announces itself as a forum for civil-society inquiry into questions of freedom, governance, law, and education. The opening quotes from the Rig Veda and Xenophanes establish an epistemological humility that frames the entire enterprise: truth is sought, not declared. The editorial situates the issue around two focal concerns — the passage of the Forest Rights Act 2006 (Van Adhikar Kanoon) and the SEZ controversy — presented as test cases for whether India's liberal constitutional promises reach its most marginalised citizens. Letters from readers engage urban housing policy, zoning, city poverty, and judicial reform, giving the issue a lively public-correspondence character. Suresh Parikh ('The Teacher's Work — Not the Potter's, but the Midwife's') argues for a Socratic, facilitative model of teaching that draws out the student's innate capacity rather than moulding a passive recipient, and calls for value-based education. Kardam Modi (કર્દમ મોડી) follows with a philosophical essay on adolescent education that asks whether 'youth education' is a genitive or instrumental compound and argues that values emerge from intergenerational encounter rather than top-down transmission. Trushi Parekh (તૃષિ પારેખ) analyses the Supreme Court's January 2007 nine-judge ruling subjecting post-1973 Ninth Schedule laws to fundamental-rights review, and contributes a separate short celebratory note on civic-legal milestones. Ashwin Karia (અશ્વિન કારીઆ) documents corruption and unaccountable management in the Travancore Devaswom Board and the Sabarimala shrine, framing temple-trust governance as a rule-of-law issue. Rajesh Mishra's dialogic column 'From the Bottom…' (તળિયેથી…) reports encounters with Dalit, adivasi, and rural-poor activists at a Delhi 'Summit of Powerless'. Himanshi Shelat (હિમાંશી શેલત) writes an urgent advocacy piece on missing children and systemic indifference of police and child-welfare institutions in Gujarat. Dankesh Oza (ડંકેશ ઓઝા) uses Swami Sahajanand's Gujarat tour as a foil to critique today's media-driven public figures and sectarian intolerance. A short unsigned piece on page 20 (signed by editorial voice) takes up religious-veto censorship around the film Parzania. Further contributors listed in the masthead — Prof. K. V. Patel (પ્રો. કે.વી. પટેલ), Kirit Panvala (કિરીટ પાનવાલા), Sauvik Chakraverti, a Frédéric Bastiat translation (ફેડરિક બેસ્ટિયાટ), a Munshi Premchand piece (મુન્શી પ્રેમચંદ), and Matt Ridley — appear in pages beyond the rendered chunk. ### Body ## Summary ખોજ (Khoj) — 'જીવન એક અવિરત ખોજ-આવિષ્કાર' — is the inaugural issue (Year 1, Issue 1, January–February 2007) of a Gujarati liberal periodical published from Vadodara by the Initiative for Open Society (Pahel Kendra), edited by Ambarish Mehta with an editorial board of Trushi Parekh, Anil Patel, and Rajesh Mishra. In the rendered pages (pp. 1–20), the issue announces itself as a forum for civil-society inquiry into questions of freedom, governance, law, and education. The opening quotes from the Rig Veda and Xenophanes establish an epistemological humility that frames the entire enterprise: truth is sought, not declared. The editorial situates the issue around two focal concerns — the passage of the Forest Rights Act 2006 (Van Adhikar Kanoon) and the SEZ controversy — presented as test cases for whether India's liberal constitutional promises reach its most marginalised citizens. Letters from readers engage urban housing policy, zoning, city poverty, and judicial reform, giving the issue a lively public-correspondence character. The remaining articles in the rendered chunk cover education philosophy (two pieces), a Supreme Court ruling on the Ninth Schedule, temple-trust corruption in Kerala, a column on Dalit experience from the grassroots, society's treatment of children, lessons from public life drawn from Swami Sahajanand's Gujarat tour, and two short opinion pieces on religious intolerance — together composing a picture of a periodical committed to liberal constitutionalism, civil society watchfulness, and the interface between high policy and everyday injustice. ## Essays ### સંપાદકીય *By અંબરીષ મહેતા* The editorial by Ambarish Mehta introduces the first issue of Khoj by situating it around two landmark events: the passage of the Van Adhikar (Forest Rights) Act 2006, which he describes as an historic recognition of adivasi and forest-dwelling communities' long-standing claims, and the SEZ controversy, which he frames as a test of whether free-market and liberalisation policies are being pursued with genuine respect for property rights and democratic accountability. Mehta signals the magazine's intent to provide substantive analysis of such issues rather than partisan cheerleading, and invites reader participation — including new subscriptions, corrections, and contributed articles — as the publication finds its feet. - Frames Van Adhikar Kanoon as historic justice for adivasis and forest communities after decades of struggle - SEZ policy is critiqued for inconsistency with free-market and liberalisation principles - Announces Khoj as a platform for civil-society inquiry, not ideological propaganda - Invites reader letters, articles, and subscriptions as the magazine launches - References upcoming long-form pieces by Trushi Parekh on Van Adhikar and by Ambarish Mehta on SEZ ### પત્રો The letters section (પત્રો / પ્રતિભાવો) spans pages 6–8 and contains substantial reader correspondence engaging with urban planning, housing, city poverty, and judicial reform. One letter by Pravinchandra Thakar of Ankleshwar critiques town-planning and zoning frameworks as instruments of elite capture that dispossess the poor; he questions whether NURM (National Urban Renewal Mission) can deliver genuine housing justice. A second letter from Chirantan Y. Bhogilal, Bhogilpura, Vadodara critiques zoning laws as benefiting real-estate and commercial interests over working-class residents. A third reader, Nishant Patel of Ahmedabad, cites a statistic that urban land values in India are US $6,380 per sq. ft. in some localities compared to US $2,600 per sq. ft. in rural areas. Another letter (Anjana Desai, Ahmedabad) covers the SEZ debate, linking it to the Narmada displacement and arguing that Special Economic Zones replicate patterns of land dispossession. The final letter on page 8 (Anjana Desai) also responds to a previous Khoj piece on judicial reform by Kirit Panwala, engaging his argument about 250–300 frivolous personal cases clogging Mumbai courts. - Multiple readers critique urban zoning and town-planning as instruments that disadvantage the urban poor - NURM scheme discussed as a potential but insufficient response to city housing failures - Statistical claim offered: urban land prices at US $6,380 per sq. ft. vs US $2,600 in rural areas - SEZ critique linked to Narmada-era displacement patterns - Judicial reform debate engaged — Kirit Panwala's earlier series prompts reader responses ### શિક્ષકનું કાર્ય - દાયણનું *By સુરેશ પરીખ* Suresh Parikh's piece 'શિક્ષકનું કાર્ય — કુંભારનું નહીં, દાયણનું' (The Teacher's Work — Not the Potter's, but the Midwife's) argues for a Socratic, facilitative model of teaching over the dominant 'potter' model in which the teacher moulds a passive student. Drawing on five questions a writer must answer before writing (What, Why, How, When, Where, How Much), Parikh argues that good teaching is the art of drawing out what the student already carries within — midwifery rather than manufacture. He critiques the school system's fixation on content delivery and measurable outputs, and calls for value-based education, reserving sharp criticism for the current curriculum's inability to form autonomous moral judgment. A reference to Mahendra Jotvadiyano's forthcoming piece on 'moolya-shikshan' (value education) in Khoj July–August 2007 signals the magazine's serialised engagement with the theme. - Contrasts 'potter' model of education (moulding students) with 'midwife' model (drawing out innate capacity) - Uses five editorial questions (What/Why/How/When/Where/How Much) as heuristic for good teaching - Argues that value education cannot be reduced to content — it requires moral environment, not curriculum - Critiques government schools' administrative burden and the divorce between teaching and learning goals - References a forthcoming Khoj piece by Mahendra Jotvadiyano on value education ### તરુણ શિક્ષણ - ક્યો સમાસ ? *By કર્દમ મોડી* Kardam Modi's 'તરુણ શિક્ષણ — ક્યો સમાસ?' (Youth Education — What Compound?) is a philosophical essay on adolescent education that asks whether 'youth education' is a genitive compound (education OF youth) or an instrumental one (education FOR youth, or education THROUGH youth). Modi argues that adolescents (ages 13–19) are in a formative phase during which the family, school, and peer community must cooperate rather than work at cross-purposes. He invokes the image of generations: just as the 1901 generation coexisted with the 2001 generation and had to learn from each other, today's adults must not dismiss adolescent values as mere rebellion. The essay argues that 'moolya' (values) are not static gifts passed down from a potter-parent but emergent properties of intergenerational encounter — and that schools are failing to create the conditions for such encounter. - Poses the grammatical ambiguity of 'youth education' (tatpurusha vs. bahuvrihi compound) as a substantive philosophical question - Argues that adolescents aged 13–19 form a distinct social stratum requiring a distinct educational philosophy - Values are not transmitted top-down but emerge from intergenerational encounter - Critiques the 1901/2001 generational gap as evidence that each era must negotiate its own moral vocabulary - Ends by distinguishing three levels of the youth-education problem: first-, second-, and third-order tatpurusha ### નવમા પરિશિષ્ટ પરનો ચુકાદો *By તૃષિ પારેખ* Trushi Parekh's 'નવમા પરિશિષ્ટ પરનો સુપ્રીમનો શક્તવર્તી ચુકાદો' (The Supreme Court's Powerful Ruling on the Ninth Schedule) covers the Supreme Court's nine-judge constitutional bench ruling of 11 January 2007 that subjected Ninth Schedule laws to fundamental-rights review. Parekh explains the historical context: the Ninth Schedule was inserted in 1951 to protect land-reform laws from judicial invalidation, and was subsequently used to shield an ever-expanding corpus of laws from Article 13 scrutiny. The ruling — that all laws inserted after 24 April 1973 (the Kesavananda Bharati date) are justiciable — is presented as a milestone for constitutional liberalism and separation of powers. Parekh notes, however, that the practical implications are uncertain: courts will need to assess each law, and the government retains the power to re-enact struck-down provisions in modified form. The piece is balanced — it does not celebrate the ruling uncritically — and raises the question of whether 'rule of law' or 'rule of lawyers' will prevail. - Supreme Court nine-judge bench on 11 January 2007 ruled Ninth Schedule laws post-1973 subject to fundamental-rights review - Historical background: Ninth Schedule created in 1951 to protect land reforms from Article 13 challenges - Kesavananda Bharati (1973) is the constitutional watershed — post-1973 insertions are now judicially reviewable - Ruling seen as a victory for separation of powers and constitutional supremacy over legislative immunity - Parekh raises the practical question of whether courts will act as genuine guardians or merely formal reviewers ### ઈશ્વરના પોતાના જ ધામમાં કૌભાંડ *By અશ્વિન કારીઆ* Ashwin Karia's 'ઈશ્વરના પોતાના જ ધામમાં કૌભાંડ!' (Scandal in God's Own Abode!) examines the governance failure of the Travancore Devaswom Board — the state agency that administers over 1,200 temples in Kerala — and the systemic corruption and mismanagement of temple trusts across India. Karia documents how the Board, which controls enormous financial flows (he cites annual turnover of crores of rupees, with Sabarimala alone generating hundreds of crores), operates without proper accountability, with reports of rampant pilferage of offerings, discrimination in service, and opaque internal appointments. The piece focuses on a specific investigation into the Sabarimala shrine's management, the role of the tantri (hereditary priest) families, and the failure of parliamentary and judicial oversight. It closes with a sharp question: if the state administers these temples on behalf of the devotee public, why is the devotee public the last to know how the money is spent? - Travancore Devaswom Board manages 1,200+ temples in Kerala with very large annual revenues - Sabarimala shrine generates hundreds of crores annually; mismanagement and pilferage are documented - Tantri (hereditary priest) families wield unaccountable power over temple administration - State administration of temples does not translate into public accountability to devotees - Article frames temple-trust corruption as a civil-liberties and rule-of-law issue, not a religious one ### તળિયેથી. . . *By રાજેશ મિશ્રા* Rajesh Mishra's column 'તળિયેથી…' (From the Bottom…) is a dialogic, documentary piece presenting an encounter at a conference ('Summit of Powerless') in Delhi, at which Mishra — identified as a Gujarati who works on adivasi issues — meets Dalit activists, women from rural Rajasthan, and grassroots voices from Bihar and Gujarat. The column is composed largely as reported dialogue: conversations on caste discrimination, the limits of constitutional promises, dowry harassment, police violence against Dalits, and the experience of being invisible to mainstream society. The piece works as testimony journalism, capturing the emotional register of the marginalized alongside Mishra's reflective voice as interlocutor. A memorable exchange about a mobile phone conversation between Mishra and a Dalit woman during a train journey anchors the column's second half and functions as a metaphor for the gap between connectivity and genuine social solidarity. - Dialogic column drawing on encounters at a grassroots Delhi conference of marginalised communities - Voices of Dalit women, adivasi activists, and rural poor foregrounded through direct reported speech - Themes: caste discrimination, police violence, dowry harassment, constitutional promise vs. lived reality - Mobile phone exchange on a Vadodara train as a parable of false connectivity between social classes - Column embodies the magazine's commitment to witness journalism from the grassroots ### બાળકો સાથે સમાજનો અક્ષમ્ય વ્યવહાર *By હિમાંશી શેલત* Himanshi Shelat's 'બાળકો સાથે સમાજનો અક્ષમ્ય વ્યવહાર' (Society's Unpardonable Treatment of Children) is a short but urgent essay on child neglect and abuse in Gujarat — drawing on news reports of missing children, custodial violence, and the failure of state institutions to protect minors. Shelat documents a specific period in which thousands of children went missing in Gujarat and examines the systemic indifference of police, courts, and child welfare institutions. The piece asks why Indian society tolerates such treatment and draws a connection between the social invisibility of children and broader failures of public accountability. It calls for child-rights mechanisms with real enforcement power. - Documents large numbers of missing children in Gujarat over recent years - Police and child welfare institutions shown to be systemically indifferent - Connects child neglect to broader public-accountability failures - Calls for enforceable child-rights mechanisms rather than advisory bodies - Tone is advocacy journalism: specific, evidence-based, and morally urgent ### જાહેર જીવનના પદાર્થપાઠ ક્યારે ? *By ડંકેશ ઓઝા* Dankesh Oza's 'જાહેર જીવનના પદાર્થપાઠ ક્યારે?' (When Will We Learn the Lessons of Public Life?) uses Swami Sahajanand's Gujarat tour as a case study in the failure of contemporary public figures to engage meaningfully with civic life. Oza observes that Swami Sahajanand, whose autobiography 'Mara Anubhavo' is referenced, encountered the complexity of Gujarati social conditions in his travels; by contrast, today's public figures treat Gujarat tours as media events. The piece draws on several encounters: a meeting with a cow-protection zealot, an exchange with a secular intellectual on religious tolerance, and a reflection on how the media's appetite for spectacle crowds out substantive civic discourse. Oza argues that public figures have a duty to model 'public life' — accountable, engaged, and non-sectarian — and that the current media environment makes this almost impossible. - Swami Sahajanand's Gujarat autobiography used as touchstone for genuine civic engagement - Contrasts authentic public-life witness with contemporary media-driven spectacle - Critiques religious intolerance — cow-protection vigilantism specifically — as a corruption of public life - Draws on Gandhian and secular-reformist tradition without naming Gandhi directly - Calls for public figures who model non-sectarian accountability rather than performing identity politics ### હરખ હવે તું હિન્દુસ્તાન *By તૃષિ પારેખ* Trushi Parekh's short piece 'હરખ હવે તું હિન્દુસ્તાન' (Rejoice Now, Hindustan) is a brief celebratory note — likely an editorial comment — noting positive signals for India's democratic health in the period: the Forest Rights Act's passage, the Supreme Court's Ninth Schedule ruling, and a broader sense that civil society institutions are finding their voice after years of impasse. The tone is cautiously optimistic and functions as an interlude between the more analytical pieces. - Short celebratory piece noting two civic-legal milestones: Van Adhikar Act and Ninth Schedule ruling - Cautiously optimistic about civil society momentum - Functions as editorial commentary rather than analytical article ### આ અસહિષ્ણતા અટકશે ખરી ? The short unsigned piece 'આ અસહિષ્ણતા અટકશે ખરી?' (Will This Intolerance Stop?) on page 20 responds to a specific incident of religious intolerance in Gujarat — the blocking of a film's screening because its content was deemed offensive by a religious group — and draws a broader argument about the creeping normalisation of veto power by sectarian groups over cultural expression. The piece names the film industry's self-censorship under communal pressure and questions whether the state is fulfilling its constitutional duty to protect freedom of expression. A reference to the film 'Parzania' (a 2006 Gujarati film about the 2002 riots) places the argument in the context of post-2002 Gujarat's contested public culture. - Documents a specific act of sectarian veto over film screening in Gujarat - Critiques film industry's self-censorship under communal pressure - References 'Parzania' (2006) as a case where state complicity in censorship was evident - Argues that constitutional freedom of expression requires active state protection, not passive non-interference - Connects cultural intolerance to the broader post-2002 Gujarat civic environment --- ## [Primary work] L.I.C. — Discounting the Assured URL: https://indianliberals.in/primary-works/l-i-c-discounting-the-assured-shailaja-bapat-september-14-1979/ ### Summary Shailaja Bapat's 1979 booklet, reproduced by the Forum of Free Enterprise from the June 1979 issue of Imprint, is a sustained policy critique of the Life Insurance Corporation of India twenty-two years after its formation. Her opening premise is structural rather than personal: the failures of LIC are not the fault of the people who run it but of the monopoly form itself, and 'State monopolies' are 'no different from privately owned ones'. Against the promises C. D. Deshmukh made on the eve of nationalisation in 1956 — cheaper insurance, better service, higher efficiency, growth-oriented investment and employment — Bapat assembles an evidentiary indictment drawn from LIC's own valuation reports, the Estimates Committee of the Lok Sabha, and the Administrative Reforms Commission. On premium rates, she shows that LIC continues to use the Modified Oriental (1925-35) Ultimate Mortality Table even though successive in-house surveys (1953-54, 1962, the tenth valuation for 1973-75) confirm that actual deaths are between 43 and 45 per cent of those projected; the postal life insurance scheme, working in the same Indian conditions, charges premiums 18-20 per cent lower.… ### Body ## Summary Shailaja Bapat's 1979 booklet, reproduced by the Forum of Free Enterprise from the June 1979 issue of Imprint, is a sustained policy critique of the Life Insurance Corporation of India twenty-two years after its formation. Her opening premise is structural rather than personal: the failures of LIC are not the fault of the people who run it but of the monopoly form itself, and 'State monopolies' are 'no different from privately owned ones'. Against the promises C. D. Deshmukh made on the eve of nationalisation in 1956 — cheaper insurance, better service, higher efficiency, growth-oriented investment and employment — Bapat assembles an evidentiary indictment drawn from LIC's own valuation reports, the Estimates Committee of the Lok Sabha, and the Administrative Reforms Commission. On premium rates, she shows that LIC continues to use the Modified Oriental (1925-35) Ultimate Mortality Table even though successive in-house surveys (1953-54, 1962, the tenth valuation for 1973-75) confirm that actual deaths are between 43 and 45 per cent of those projected; the postal life insurance scheme, working in the same Indian conditions, charges premiums 18-20 per cent lower. On bonuses, she calculates that if the LIC had assumed realistic interest income and expense provisions, its distributable surplus for the 1973-75 biennium would have been Rs. 152.79 crores higher, enabling bonuses of Rs. 32 and Rs. 40 against the Rs. 17.60 and Rs. 22 actually declared. On expenses, she documents a renewal expense ratio (20.79 per cent) far above the UK (12.23 per cent) and the USA (16.9 per cent), inflated peon wages, and a Class I officer head-count that grew 467 per cent between 1957 and 1978 while the supervisory load per officer fell from 30 to 13 subordinates. The second half of the booklet broadens into a service and governance audit: rising complaints, three-month policy transfers, delayed claim settlements (outstanding claims up 350 per cent in two decades), lapse ratios above 30 per cent, near-total neglect of the rural market (3.5 per cent of new business in 1977-78), and an investment policy that holds 75.6 per cent of funds in low-yielding government securities even though the statutory minimum is only 50 per cent, costing policyholders an estimated Rs. 41 crores in 1978 alone. Bapat's prescriptions are explicit: decentralise the central office, break LIC into four or five competing units as the ARC recommended in 1969, give policyholders representation on the actuarial and audit boards, and abolish the monopoly so 'healthy competition' can supply the 'norms for judging the efficiency of life insurance business'. The argument is offered as a cautionary case study at a moment of 'ideological demands for nationalisation of more sectors of the economy'. ## Key points - Frames LIC's failures as a structural problem of state monopoly rather than the fault of its managers, and treats the case as a warning against further nationalisation. - Argues LIC's premium rates are anchored to the Modified Oriental (1925-35) mortality table even though actual deaths are 43-45 per cent of projected, and the postal life insurance scheme charges 18-20 per cent less for similar plans. - Calculates that realistic interest and expense assumptions would have raised distributable surplus by Rs. 152.79 crores for 1973-75 and allowed bonuses of Rs. 32 and Rs. 40 per thousand against the Rs. 17.60 and Rs. 22 actually declared. - Documents a renewal expense ratio of 20.79 per cent in India versus 12.23 per cent in the UK and 16.9 per cent in the USA, and a 467 per cent rise in Class I officers between 1957 and 1978 while supervisory load per officer fell from 30 to 13 subordinates. - Catalogues service deterioration: 7,818 complaints to the central office in 1977-78, a 350 per cent rise in outstanding claims over two decades, three-month policy transfers, and lapse ratios above 30 per cent. - Shows LIC investing 75.6 per cent of its funds in government securities yielding only 5 per cent, against a statutory minimum of 50 per cent, and estimates the foregone return at about Rs. 41 crores in 1978 alone. - Notes that only 3.5 per cent of new business in 1977-78 came from rural areas, against the Union Finance Minister's 1956 promise that LIC would carry insurance 'to the doors of the people'. - Endorses the Administrative Reforms Commission's 1969 proposal to break LIC into four or five competing units, demands policyholder representation on its actuarial and audit boards, and calls for the abolition of the monopoly. --- ## [Primary work] LAND REFORM URL: https://indianliberals.in/primary-works/land-reform-kae-jee-feb6-1958/ ### Summary Published by the Forum of Free Enterprise and reprinted from The Mail, Madras (19 January 1959), this short pamphlet by the pseudonymous "Kaejee" is a sustained polemic against the Congress government's then-impending land-reform package — fixing a ceiling on individual landholdings and channelling the excised land into cooperative farms. Kaejee argues that, after the abolition of zamindari and princely estates, the new measure is no longer reform but "an agrarian revolution where the very concept of ownership of land is destroyed," and that compulsory alienation of private holdings for cooperative cultivation falls outside the limits of a constitutional, benevolent democracy. The substantive core of the argument is demographic and statistical. Drawing on the 1951 Census, Kaejee insists that India's agrarian misery is a problem of land scarcity, not of land distribution: per capita cultivable area is barely 0.79 acre, compared with 15 acres in the United States and 19 in the USSR, and 351 lakh of the 710 lakh "agriculturists" are in fact unpaid family helpers or earners drawn into farming for want of alternative livelihoods.… ### Body ## Summary Published by the Forum of Free Enterprise and reprinted from The Mail, Madras (19 January 1959), this short pamphlet by the pseudonymous "Kaejee" is a sustained polemic against the Congress government's then-impending land-reform package — fixing a ceiling on individual landholdings and channelling the excised land into cooperative farms. Kaejee argues that, after the abolition of zamindari and princely estates, the new measure is no longer reform but "an agrarian revolution where the very concept of ownership of land is destroyed," and that compulsory alienation of private holdings for cooperative cultivation falls outside the limits of a constitutional, benevolent democracy. The substantive core of the argument is demographic and statistical. Drawing on the 1951 Census, Kaejee insists that India's agrarian misery is a problem of land scarcity, not of land distribution: per capita cultivable area is barely 0.79 acre, compared with 15 acres in the United States and 19 in the USSR, and 351 lakh of the 710 lakh "agriculturists" are in fact unpaid family helpers or earners drawn into farming for want of alternative livelihoods. Redistribution, on this reading, cannot redeem masses for whom no chemical reform can extract more than a thin living from too little soil; only industrialisation, off-farm employment and modern machinery — which require larger, not smaller, holdings — can raise rural incomes. Anti-fragmentation by ceiling, Kaejee writes, is "the very negation" of the case for consolidation. The pamphlet then turns to the cooperative-farming proposal itself, treating it as a way-station to Soviet- and Chinese-style collectivisation. Kaejee cites the 1945 Congress Agrarian Reforms Committee's own caution that collective farming presupposes reclaimed wastelands and non-existent ownership sentiments, and the 1951 Census Commissioner's warning against confusing "cooperative farming, collectivisation, redistribution of land" in a single bundle. Russia's and China's collectivisation drives, undertaken to free manpower for war industry, have no analogue in an India already groaning under labour surplus; American conditions, with their virgin land and labour shortage, are likewise inapplicable. Kaejee closes with a plea that India "build her own pattern of agrarian economy on indigenous lines" within the four corners of a democratic constitution, and warns that pursuing cooperative farming risks ending in "State farming and collectivisation, with its consequences of regimentation of labour" or in "utter economic and social chaos." ## Key points - Frames the ceiling-on-landholdings plus cooperative-farming package as an "agrarian revolution" disguised as reform — a transition from zamindari abolition to the abolition of private ownership itself. - Distinguishes constitutional regulation of land tenure or agricultural-labour conditions (legitimate) from compulsory alienation of land for cooperatives (beyond benevolent democracy). - Uses 1951 Census figures to argue India's per capita cultivable area (~0.79 acre) is structurally insufficient, vastly below the USA (15 acres) and USSR (19 acres) — no redistribution can fix scarcity. - Argues 351 lakh of 710 lakh "agriculturists" are non-earning dependents or unpaid family workers, evidence that the real problem is rural underemployment, not maldistribution of holdings. - Holds that mechanisation and modern scientific agriculture require larger, not smaller, holdings, so a ceiling is "the very negation" of consolidation logic. - Reads cooperative farming as a way-station to Soviet/Chinese-style collectivisation, citing the 1945 Congress Agrarian Reforms Committee and the 1951 Census Commissioner against conflating cooperation, collectivisation and redistribution. - Calls for industrialisation and de-urbanised, off-farm employment to drain the agrarian labour surplus, urging that the Third Five-Year Plan not repeat the First and Second Plans' mistakes. - Insists Indian agrarian policy be "moulded in relation to economic, political and social conditions now prevailing in India" within a democratic constitution, not transplanted from Russian, Chinese or American patterns. --- ## [Primary work] Leading in Turbulent Times URL: https://indianliberals.in/primary-works/leading-in-turbulent-times-by-azim-premji-2003/ ### Summary This 2003 Forum of Free Enterprise booklet bundles two short pieces by Azim Premji, Chairman of Wipro Corporation: the Bhogilal Leherchand Memorial Lecture he delivered in Mumbai on 2 December 2002 under the title "Leading in Turbulent Times," and his earlier convocation address at IIT Chennai of 27 July 2001, reprinted as "Opportunities and Challenges." Together they sit inside FFE's classical-liberal pamphleteering tradition not as a policy intervention but as a corporate leader's argument that private enterprise must deserve, through its own internal culture, the latitude that liberals seek to defend for it. The title essay reads the early-2000s slump — globalisation shock, recession, and the wave of US corporate scams of which Enron is the named case — and argues that the gravest casualty has been investor trust, not balance-sheet value.… ### Body ## Summary This 2003 Forum of Free Enterprise booklet bundles two short pieces by Azim Premji, Chairman of Wipro Corporation: the Bhogilal Leherchand Memorial Lecture he delivered in Mumbai on 2 December 2002 under the title "Leading in Turbulent Times," and his earlier convocation address at IIT Chennai of 27 July 2001, reprinted as "Opportunities and Challenges." Together they sit inside FFE's classical-liberal pamphleteering tradition not as a policy intervention but as a corporate leader's argument that private enterprise must deserve, through its own internal culture, the latitude that liberals seek to defend for it. The title essay reads the early-2000s slump — globalisation shock, recession, and the wave of US corporate scams of which Enron is the named case — and argues that the gravest casualty has been investor trust, not balance-sheet value. Premji distils four operational lessons from the downturn (re-focus on Customer Value, invest strategically while assets and talent are cheap, transform and trim the organisation, and discipline costs even in boom years), but his main move is cultural rather than tactical: laws and board reforms cannot by themselves guarantee ethical behaviour, so strong corporate governance must rest on shared Values consistently practised by leaders. He cites a Brookings estimate that the scandals had cost US GDP \$38 billion in their first year and Paul Krugman's view that their damage to the US economy exceeds that of 11 September 2001. "Opportunities and Challenges" turns from incumbent CEOs to entering engineers. Premji offers ten lessons drawn from three-and-a-half decades at Wipro: dare to dream; define what you stand for; never lose your zest and curiosity (he notes that the world's codified knowledge base, doubling every thirty years in the early twentieth century and every seven years by the 1970s, is projected to double every eleven hours by 2010); strive for global-grade excellence; build self-confidence; learn to work in cross-cultural teams; develop a rounded, synthesising personality; take care of yourself; cultivate a broader social vision; and persevere. The social-vision lesson is where he positions the Azim Premji Foundation's pledge to enrol over a million out-of-school children as the obligation that knowledge-economy wealth carries. The booklet is framed by the Forum's house furniture — an A. D. Shroff dedication on the inside cover ("Free Enterprise was born with man and shall survive as long as man survives"), an Introduction by FFE President Minoo R. Shroff, a closing Eugene Black quote that "people must come to accept private enterprise not as a necessary evil, but as an affirmative good," and the standard FFE membership page — so the reader is meant to leave with the Values-based defence of free enterprise as the takeaway, not only the management advice. ## Key points - The booklet bundles two single-author addresses by Azim Premji: the 2002 Bhogilal Leherchand Memorial Lecture ("Leading in Turbulent Times") and the 2001 IIT Chennai convocation address ("Opportunities and Challenges"). - The title lecture reads the post-globalisation, recession, and US-corporate-scandal landscape as a stress test of business leadership and identifies four operational lessons from the downturn — re-focus on Customer Value, invest strategically, transform the organisation, and discipline costs even in good times. - Premji's central argument is cultural rather than regulatory: laws and board structures alone cannot guarantee ethical behaviour, so corporate governance must be anchored in shared Values practised consistently by leaders. - He invokes a Brookings estimate that the US corporate scandals cost \$38 billion (0.36% of GDP) in their first year and Paul Krugman's view that the damage exceeds that of September 11, 2001. - The second piece sets out ten lessons for young engineers: dare to dream, define what you stand for, sustain curiosity, strive for global-grade excellence, build self-confidence, work in cross-cultural teams, develop a rounded personality, take care of yourself, hold a broader social vision, and persevere. - The Azim Premji Foundation's pledge to enrol over a million out-of-school children is foregrounded as the model of knowledge-economy social vision. - The booklet is bracketed by FFE's standing apparatus — A. D. Shroff and Eugene Black dedicatory quotes plus an Introduction by Minoo R. Shroff — positioning Premji's leadership ethic as a buttress for the FFE free-enterprise project. --- ## [Primary work] LESSONS OF WHEAT TRADE NATIONALISATION URL: https://indianliberals.in/primary-works/lessons-of-wheat-trade-nationalisation-dr-a-c-chhatrapati-11-april-1974/ ### Summary Lessons of Wheat Trade Nationalisation collects Dr. A. C. Chhatrapati's April 1974 talk at a Forum of Free Enterprise symposium in Bombay together with a chronological dossier of news clippings from 1973 that document the unravelling of the Government of India's monopoly procurement of wheat. Chhatrapati, then Secretary of the Vanaspati Manufacturers' Association and a specialist in agricultural economics, treats the recent decision to abandon nationalised wholesale wheat trade as a vindication of market mechanisms and a rebuke to planners who had treated state takeover as a cure-all for food insecurity. Section I ("The Rationale of the New Food Policy") reconstructs why the 1973 takeover failed: the procurement price of Rs. 76 per quintal had become unremunerative against rising input costs, farmers withheld marketable surplus, state zoning broke the national grain market, and the Centre — denied imports because Russia and China had absorbed world surpluses — could not feed deficit areas. The result was rationing as low as 5 kg a month in Bombay, food riots in Gujarat, and a Rs.… ### Body ## Summary Lessons of Wheat Trade Nationalisation collects Dr. A. C. Chhatrapati's April 1974 talk at a Forum of Free Enterprise symposium in Bombay together with a chronological dossier of news clippings from 1973 that document the unravelling of the Government of India's monopoly procurement of wheat. Chhatrapati, then Secretary of the Vanaspati Manufacturers' Association and a specialist in agricultural economics, treats the recent decision to abandon nationalised wholesale wheat trade as a vindication of market mechanisms and a rebuke to planners who had treated state takeover as a cure-all for food insecurity. Section I ("The Rationale of the New Food Policy") reconstructs why the 1973 takeover failed: the procurement price of Rs. 76 per quintal had become unremunerative against rising input costs, farmers withheld marketable surplus, state zoning broke the national grain market, and the Centre — denied imports because Russia and China had absorbed world surpluses — could not feed deficit areas. The result was rationing as low as 5 kg a month in Bombay, food riots in Gujarat, and a Rs. 250-crore subsidy bill that fuelled inflation rather than relief. Chhatrapati argues that the new policy, which licenses wholesalers to sell 50 per cent of purchases to government at Rs. 105 per quintal while letting the remainder move in the open market and across state lines, restores a national market while preserving a buffer-stock role for the State. He distinguishes regulated commodity markets from "laissez faire," insists that bumper-crop procurement and limited public distribution in deficit urban areas are legitimate, and warns that the only durable remedy for high prices is to curb monetary and fiscal indiscipline and raise output — not to coerce producers. Section II reprints reports from The Times of India, Free Press Journal, Indian Express and UNI between April 1973 and June 1973 chronicling the takeover's collapse: missed procurement targets, food riots, police firings at Sinnar and Bulsar, queues for sub-standard rice, bogus ration cards in Patna, the destitute scraping wheat from compost pits at Bombay's Aarey Milk Colony, and Congress MLAs themselves sabotaging procurement by selling stocks to private traders at higher prices. The cumulative effect is documentary: the takeover did not raise the quantity procured, denied consumers reasonable supplies, widened price disparities between surplus and deficit zones, and forced citizens onto the black market. The pamphlet's argumentative centre is that democratic governments cannot indefinitely sustain coercive policies that punish both farmer and consumer, and that the wheat episode is a transferable lesson for other commodities — small farmers are no longer credulous, bureaucracies cannot manage scale, and state governments respond to political not administrative incentives. Chhatrapati treats the Centre's reversal as the right reading of these realities and a return to the regulatory-plus-market policy followed before the 1973 misadventure. ## Key points - Chhatrapati frames the end of wholesale wheat nationalisation as proper democratic responsiveness, not an ideological retreat — governments rule by consensus, not dogma. - The 1973 takeover failed on its own terms: against a target of 8.1 million tonnes only 4.3 million were procured, lower than the 5–5.1 million tonnes procured in earlier years when private wholesalers were also operating. - An unchanged procurement price of Rs. 76 per quintal had become unremunerative as input costs rose; many farmers found it cheaper to feed wheat to cattle than to sell to the State. - Inter-state and inter-district movement bans broke the national grain market, shifting onto the Centre the entire burden of feeding deficit States while imports were unavailable because Russia and China had swept world surpluses. - Public distribution shrank rather than expanded: Bombay rations fell to about 5 kg per month (roughly 40 per cent of normal needs); Gujarat's distress drove riots that contributed to the fall of the State Government. - Chhatrapati endorses regulated markets — minimum support prices, buffer stocks, and limited public distribution in deficit urban areas — but rejects monopoly procurement as administratively unworkable in a vast country and politically corrosive in a federal democracy. - He argues that inflation, not private trade, is the real driver of high food prices, and that the remedy lies in monetary and fiscal discipline and higher production, not in takeovers. - Section II's news compilation documents the human cost: police firings on bread mobs, sub-standard rationed rice, two million bogus ration cards in Patna, and Congress MLAs themselves selling wheat to private retailers at premium prices. --- ## [Primary work] The Liberal Budget 2006-07 URL: https://indianliberals.in/primary-works/liberal-budget-2006-07/ ### Summary The Liberal Budget 2006-07, subtitled "Right Choices Tough Decisions", is the third alternative budget document produced by the Indian Liberal Group (ILG) under its Project for Economic Education, prepared three months ahead of the Union Budget for the fiscal year 2006-07. The document opens with a statement of liberal philosophy — centring the individual over the state, invoking Gopal Krishna Gokhale's liberal vision and D. V. Gundappa's caution about selective borrowing from foreign ideas — before proceeding to a structured five-chapter analysis. The work is positioned explicitly as a counter to both Left-wing obstructionism within the UPA coalition and the UPA government's failure to press the Economic Policy Reforms (EPR) agenda with sufficient conviction after fifteen years of liberalisation since 1991. The first chapter assesses India's Economic Policy Reforms, cataloguing their achievements — GDP growth moving from 1.3% to 7.5%, forex reserves rising from $0.9 billion to $135 billion, FDI inflows from $100 million to $5,500 million — alongside persistent failures: the jobless-growth problem, the North-Central-East regional imbalance, public-sector obstructionism, and inad… ### Body ## Summary The Liberal Budget 2006-07, subtitled "Right Choices Tough Decisions", is the third alternative budget document produced by the Indian Liberal Group (ILG) under its Project for Economic Education, prepared three months ahead of the Union Budget for the fiscal year 2006-07. The document opens with a statement of liberal philosophy — centring the individual over the state, invoking Gopal Krishna Gokhale's liberal vision and D. V. Gundappa's caution about selective borrowing from foreign ideas — before proceeding to a structured five-chapter analysis. The work is positioned explicitly as a counter to both Left-wing obstructionism within the UPA coalition and the UPA government's failure to press the Economic Policy Reforms (EPR) agenda with sufficient conviction after fifteen years of liberalisation since 1991. The first chapter assesses India's Economic Policy Reforms, cataloguing their achievements — GDP growth moving from 1.3% to 7.5%, forex reserves rising from $0.9 billion to $135 billion, FDI inflows from $100 million to $5,500 million — alongside persistent failures: the jobless-growth problem, the North-Central-East regional imbalance, public-sector obstructionism, and inadequate social expenditure. The second chapter reviews the Central Budget 2005-06, acknowledging its growth-supporting features (VAT introduction, Bharat Nirman rural connectivity, Viability Gap Funding for infrastructure) while criticising the coalition compulsions that distorted its fiscal discipline, introduced retrograde taxes (Fringe Benefits Tax, Banking Cash Transaction Tax), and prevented transformational reform in FDI, labour, and disinvestment. The third chapter sets out the Liberal Budget's strategic framework: a Seven-Point Action Agenda for sustained 8% real GDP growth, poverty reduction to below 15% by 2015-16, and creation of at least 8 million new jobs annually, anchored in a proposed Economic Reforms Implementation Authority (ERIA) to give institutional teeth to reforms. The chapter also calls for aggressive disinvestment of PSUs, radical indirect-tax reform towards a single GST rate, and public-private partnership via Special Purpose Vehicles. Chapter 4, seen through page 18, begins the analysis of Central Government expenditure structure, noting the sharp rise in revenue expenditure (to 87% of total outlay) and the collapse of capital expenditure (to 13%), raising concerns about fiscal quality. ## Key points - The document is the ILG's third Liberal Budget, presented three months before the Union Budget 2006-07, explicitly positioning liberal fiscal prescriptions against the UPA coalition's compromises with Left parties. - Chapter 1 provides a balanced scorecard of fifteen years of EPR: strong macro gains (GDP growth, forex, FDI) but stark failures in employment generation, regional equity, social sector spending, and administrative reform. - Chapter 2 critiques Budget 2005-06 for introducing regressive taxes (FBT, BCTT) and failing to move on FDI ceilings, labour reform, and disinvestment, despite its welcome features such as Bharat Nirman and VAT. - The strategic framework (Chapter 3) proposes a Seven-Point Agenda and an Economic Reforms Implementation Authority (ERIA) — a statutory body headed by a Cabinet-rank minister with corporate-style executive powers — to accelerate reforms. - The Liberal Budget advocates aggressive and full disinvestment/privatisation of PSUs, condemning the BRPSE as an outmoded delay mechanism, and calls for ring-fencing disinvestment revenues for incremental infrastructure investment. - Chapter 3 calls for a single flat 10% customs tariff, movement to a unified GST regime, and alignment of all indirect taxes with global benchmarks to strengthen manufacturing competitiveness. - Chapter 4 raises alarm at the structural deterioration in expenditure quality: revenue expenditure at 87% of total outlay and capital expenditure collapsing to 13%, indicating chronic fiscal ill-health. --- ## [Primary work] The Liberal Budget URL: https://indianliberals.in/primary-works/liberal-budget-building-equitable-society/ ### Summary *The Liberal Budget: Building an Equitable Society* presents a model fiscal framework developed in 2004 by a Drafting Group convened by the Indian Liberal Group's Project for Economic Education. The preface, signed by S. V. Raju as Executive Chairman, explains that the document was designed as a template and benchmark against which to evaluate actual Union Budgets, and that it draws on consultations held at the Leslie Sawhny Centre in Deviall and with economists and civil servants in Chennai. S. S. Bhandare's Introduction characterises the fiscal environment as one of severe constraint, arguing that a genuinely liberal economic environment is a precondition for any effective budget, and closes with a postscript acknowledging the newly elected UPA government's Common Minimum Programme while asserting that the Liberal Budget's 'human face' is stronger than that of the CMP without diluting liberal reform. The Executive Summary states that the Liberal Budget's philosophical bedrock is that 'man is the measure of all things' and that the business of government is governance, not business.… ### Body ## Summary *The Liberal Budget: Building an Equitable Society* presents a model fiscal framework developed in 2004 by a Drafting Group convened by the Indian Liberal Group's Project for Economic Education. The preface, signed by S. V. Raju as Executive Chairman, explains that the document was designed as a template and benchmark against which to evaluate actual Union Budgets, and that it draws on consultations held at the Leslie Sawhny Centre in Deviall and with economists and civil servants in Chennai. S. S. Bhandare's Introduction characterises the fiscal environment as one of severe constraint, arguing that a genuinely liberal economic environment is a precondition for any effective budget, and closes with a postscript acknowledging the newly elected UPA government's Common Minimum Programme while asserting that the Liberal Budget's 'human face' is stronger than that of the CMP without diluting liberal reform. The Executive Summary states that the Liberal Budget's philosophical bedrock is that 'man is the measure of all things' and that the business of government is governance, not business. It sets out nine concrete human-development targets for 2007 and 2012 (including halving poverty, achieving near-universal primary schooling, and reducing infant and maternal mortality), and outlines five governing objectives: Effective Fiscal Governance, Fiscal Consolidation and Stabilisation, Efficiency and Productivity, Acceleration of Growth, and Promotion of Equity. It advocates a shift in the composition of expenditure from non-development to development spending, rationalisation and simplification of the tax system guided by the Kelkar Committee Report, accelerated privatisation of PSUs on the principle that the test is whether the state should be in an activity at all rather than whether it is profitable, and a suite of structural reforms including independent regulators, labour-law reform, agricultural deregulation, and e-governance. Chapter 1 ('Liberal Perspectives and Human Development') opens with a philosophical statement of the Liberal position — citing Ludwig von Mises, Gopal Krishna Gokhale, and D. V. Gundappa — and moves into the five operational tenets of the Liberal Budget, covering Effective Fiscal Governance (including the Fiscal Responsibility Act and e-governance), Fiscal Consolidation, Efficiency and Productivity (including Kelkar Committee tax reforms and PSU divestment), Acceleration of Growth (targeting 8–9% per annum), and Promotion of Equity. Section 1.3 begins addressing human-development parameters, covering poverty and employment (including a proposed employment-generation programme for below-poverty-line families with an outlay of Rs. 30,000–35,000 crores annually), welfare for those unable to work, agriculture (documenting the decline in GCF in agriculture from 7.47% to 6.02% of GCF between 1993–94 and 2000–01), and the opening of sections on education and health. ## Key points - The document presents itself as a 'model Liberal Budget' — a benchmark template against which actual Union Budgets can be measured, produced by a Drafting Group led by S. S. Bhandare under the ILG's Project for Economic Education. - The philosophical foundation is that 'man is the measure of all things' and that the state's role is governance, not business — referencing von Mises and the liberal tradition. - Nine specific human-development targets are set for 2007 and 2012, including reducing poverty by 5 percentage points by 2007, universal primary schooling by 2005–2009, and halving infant and maternal mortality. - The Liberal Budget advocates shifting the composition of expenditure decisively towards development spending (raising development expenditure from approximately 7% to 9% of GDP), while strictly capping overall expenditure growth to no more than real GDP growth. - Tax reform is framed around the Kelkar Committee Report: no increase in tax rates, rationalisation and simplification of direct and indirect taxes, abolition of search-and-seizure powers and 'public interest provisions', and full computerisation of tax operations. - Privatisation is presented as a principle not of profit-maximisation but of correct state scope — the test being whether the state should be in a given field at all. - Structural reforms advocated include independent regulators, labour-law flexibility, agricultural deregulation and contract farming, single-window trading procedures, judicial reforms, and e-governance leading to 'Seamless Governance'. - The document explicitly distances itself from populist symbolism, stating its dictum as: 'Everyone knows what's wrong. The job is to offer the people what is right.' --- ## [Primary work] Taking Reforms to the Poor URL: https://indianliberals.in/primary-works/liberal-budget-reforms-for-poor/ ### Summary In the rendered pages, "Taking Reforms to the Poor: The Liberal Budget 2007-08" presents the Indian Liberal Group's fourth annual alternative budget proposal (LB4). The document opens with a statement of liberal economic philosophy — centring the individual, a limited state, and market-led allocation — before moving into its main analytical chapters. The preface, authored by S. V. Raju as National Coordinator, situates LB4 in the context of India's 8.5% GDP growth and a growing convergence between the ILG's alternative budgets and the Union Government's fiscal numbers, while criticising backsliding tendencies such as proposed RTI rollback, media censorship bills, and the Petroleum Ministry's capture attempts. In the rendered pages, Chapter 1 ("Fiscal Issues: Challenges and Policy Response") reviews the fiscal policy record of the three previous Liberal Budgets (LB1–LB3), identifies areas of convergence and divergence with the Central Budgets of 2004-05 to 2006-07, and lays out LB4's fiscal framework.… ### Body ## Summary In the rendered pages, "Taking Reforms to the Poor: The Liberal Budget 2007-08" presents the Indian Liberal Group's fourth annual alternative budget proposal (LB4). The document opens with a statement of liberal economic philosophy — centring the individual, a limited state, and market-led allocation — before moving into its main analytical chapters. The preface, authored by S. V. Raju as National Coordinator, situates LB4 in the context of India's 8.5% GDP growth and a growing convergence between the ILG's alternative budgets and the Union Government's fiscal numbers, while criticising backsliding tendencies such as proposed RTI rollback, media censorship bills, and the Petroleum Ministry's capture attempts. In the rendered pages, Chapter 1 ("Fiscal Issues: Challenges and Policy Response") reviews the fiscal policy record of the three previous Liberal Budgets (LB1–LB3), identifies areas of convergence and divergence with the Central Budgets of 2004-05 to 2006-07, and lays out LB4's fiscal framework. The ILG endorses continued FRBM-mandated fiscal consolidation, radical indirect-tax simplification along Kelkar Committee lines, agricultural income tax, vigorous disinvestment targeting Rs.35,000–50,000 crore in receipts, PPP-based infrastructure investment, and a decisive shift in expenditure composition toward social sectors. The chapter explicitly rejects the 11th Plan Approach Paper's case for FRBM dilution, arguing that loosening deficit targets to finance plan expenditure would jeopardise macroeconomic stability. In the rendered pages, Chapter 2 ("Taking On the Challenge of Poverty") opens with poverty trend data showing that while the poverty ratio fell from 44.5% in 1983 to 28% in 2004-05, the pace of decline has been insufficient. The chapter critiques the official caloric-based poverty line as too restrictive, argues that the real number of poor could exceed 30 crore, and calls for a more realistic poverty line. Initial analysis in the rendered pages links slow poverty reduction to sluggish agricultural growth and raises the second-order growth effects of the reforms process as a partial explanation. Chapter 2 is cut off at printed page 20. ## Key points - LB4 is the fourth in ILG's annual Liberal Budget series; the preface notes growing numerical convergence between the Liberal Budget and the Union Government budget while flagging persistent governance backsliding. - In the rendered pages, Chapter 1 endorses FRBM fiscal consolidation, rejects the 11th Plan Approach Paper's proposal to dilute deficit targets, and calls for radical tax rationalisation along Kelkar Committee lines. - The ILG proposes vigorous disinvestment targeting Rs.35,000–50,000 crore and ring-fencing/earmarking of proceeds for social sector investment and debt retirement. - LB4 advocates a decisive shift in expenditure composition toward social sectors — raising education spending to 6% of GDP and public health to 2.5% of GDP — funded by curtailing non-developmental revenue expenditure. - In the rendered pages, Chapter 2 presents poverty trend data (poverty ratio fell from 44.5% in 1983 to 28% in 2004-05) but argues the pace of decline is far too slow and the official poverty line understates the true extent of deprivation. - The document explicitly critiques the 11th Plan Approach Paper's inclusive-growth framing as susceptible to populist interventions, arguing that sustained liberal reforms are the more effective route to poverty reduction. - The Sixth Pay Commission is flagged in the rendered pages as a looming fiscal pressure requiring stricter administrative expenditure control. --- ## [Primary work] LIBERALISING INDIA'S INSURANCE INDUSTRY URL: https://indianliberals.in/primary-works/liberalising-indias-insurance-industry-september-29-1995/ ### Summary Delivered as the 1995 Annual Public Lecture under the A. D. Shroff Memorial Trust, R. N. Malhotra — former Governor of the Reserve Bank of India and Chairman of the Government of India Committee on Reforms in the Insurance Sector — argues that India's state-monopoly insurance industry must be opened to competition. He situates the case within the broader liberalisation programme begun in 1991: trade liberalisation, de-licensing, capital-market deepening, foreign-investment inflows, and reform of the banking and financial sectors have, in his telling, produced strong balance-of-payments, growth, and consumer-welfare gains without the dire consequences predicted by critics.… ### Body ## Summary Delivered as the 1995 Annual Public Lecture under the A. D. Shroff Memorial Trust, R. N. Malhotra — former Governor of the Reserve Bank of India and Chairman of the Government of India Committee on Reforms in the Insurance Sector — argues that India's state-monopoly insurance industry must be opened to competition. He situates the case within the broader liberalisation programme begun in 1991: trade liberalisation, de-licensing, capital-market deepening, foreign-investment inflows, and reform of the banking and financial sectors have, in his telling, produced strong balance-of-payments, growth, and consumer-welfare gains without the dire consequences predicted by critics. Against that record he asks why insurance alone should be exempted from competition. The lecture surveys the structure of the Life Insurance Corporation (245 firms nationalised in 1956) and the General Insurance Corporation with its four subsidiaries (107 non-life insurers nationalised in 1973), describing their sprawling networks but also a culture of complacency: poor customer responsiveness, high costs, over-staffing, restrictive staff practices, lapsation of life policies, and an atrophied regulatory function. Malhotra summarises his Committee's diagnosis and its conclusion that competition would lift service quality, accelerate insurance penetration, and bring discipline that the public monopoly has lost. To answer sceptics, the lecture works through concrete precedents inside India where monopolies have been opened up — mutual funds after 1987 and especially 1993 (UTI's investible base actually grew even as new entrants captured market share), civil aviation (private carriers reduced waiting lists, raised standards, and even improved Indian Airlines' own image), and telecommunications (bids of over Rs. 1,11,000 crore in licence fees revealed the scale of pent-up demand). Malhotra closes the rendered portion by refuting the "natural monopoly" and fiduciary-obligation defences of state ownership, noting that most insurance worldwide is run by the private sector and that fiduciary relationships are common to banks, mutual funds, and other intermediaries that operate competitively under regulatory oversight. ## Key points - The lecture is the 1995 Annual Public Lecture of the A. D. Shroff Memorial Trust, delivered on 13 September 1995 by R. N. Malhotra (former RBI Governor and Chairman of the Government Committee on Reforms in the Insurance Sector). - Malhotra frames insurance reform as the logical next step of the 1991 liberalisation programme — pointing to gains in the external sector, capital markets, industry de-licensing, banking, and the financial sector as evidence that further reform carries low risk. - He details the size and reach of LIC (1906 branches, Rs. 49,400 crore life fund) and the four GIC subsidiaries (3151 branch offices, Rs. 4,427 crore net premium in 1993-94) while diagnosing complacency, high costs, over-staffing, and atrophied regulation. - The Government Committee on Reforms in the Insurance Sector (1993), which he chaired, consulted opinion leaders and commissioned a MARG survey before recommending that the sector be opened to private competition. - He cites the mutual funds story (UTI's share fell to 80% but its absolute investible base grew massively as the industry expanded to Rs. 74,000 crore by 1995) to rebut fears that competition destroys incumbents. - Civil aviation and telecommunications are presented as further proof that private entry into former monopolies improves consumer welfare, employment, and even the public incumbent's performance. - He rejects the claim that insurance is a "natural state monopoly" requiring state ownership for fiduciary trust, noting that most of world insurance is private and that fiduciary trust is sustained elsewhere by mutual trust and effective regulation. - The rendered chunk also reproduces the Trust's objectives, a tribute to A. D. Shroff (1899-1965), and N. A. Palkhivala's chairman's introduction commending the lecture to policy-makers. --- ## [Primary work] Liberalism in South Asia URL: https://indianliberals.in/primary-works/liberalism-in-south-asia/ ### Summary This issue of Liberal Times (Volume III / Number 4, 1995), published by the Friedrich-Naumann-Stiftung Regional Office South Asia, takes 'Liberalism in South Asia' as its unifying theme. Six contributors — from India, Sri Lanka, Nepal, and Germany — survey the state of liberal thought and practice across the region. The issue opens with Sharad Joshi's sweeping historical essay on why liberalism never took firm root in India despite a hospitable philosophical environment, arguing that the dominant intellectual traditions — from Gandhian quasi-anarchism to Congress socialism — crowded out a genuine liberal politics and produced instead a 'Nehruvian socialist brand of statism'. Ashok V. Desai's tightly argued piece follows with an analysis of how the post-independence 'control regime' was inherited from wartime British economic management and how the economic liberalisation of the 1990s, while substantively significant, proceeds without any ideological acknowledgment of liberty as a political value. Chanaka Amaratunga surveys the surprisingly resilient liberal tradition in Sri Lanka, centred on the Liberal Party and its programme of federalism, proportional representation, and ethnic reconciliation. Kusum Shrestha reads Nepal's 1990 Constitution as an expression of liberal constitutionalism — sovereignty in the people, supremacy of the Constitution, an independent judiciary, and a formal bill of twelve fundamental rights — while flagging the dualistic gap between justiciable civil-political rights and aspirational Directive Principles. Detmar Doering opens a brief intellectual history of liberalism that traces its lineage from classical antiquity through Locke's Two Treatises (1689) to Adam Smith's market economy and the nineteenth-century theorists (Mill, Tocqueville, Bastiat, Spencer); only the first page of his essay falls within the rendered chunk. S. V. Raju, the long-standing Indian liberal editor (Freedom First) and Indian Liberal Group figure, also contributes to the issue per the contents listing; his piece sits in the unrendered pages beyond p. 20. The issue is edited by Jurgen Axer for the Foundation's regional office. ### Body ## Summary This issue of Liberal Times (Volume III / Number 4, 1995), published by the Friedrich-Naumann-Stiftung Regional Office South Asia, takes 'Liberalism in South Asia' as its unifying theme. In the rendered pages, six contributors — from India, Sri Lanka, Nepal, and Germany — survey the state of liberal thought and practice across the region. The issue opens with Sharad Joshi's sweeping historical essay on why liberalism never took firm root in India despite a hospitable philosophical environment, arguing that the dominant intellectual traditions — from Gandhian quasi-anarchism to Congress socialism — crowded out a genuine liberal politics. Ashok V. Desai's tightly argued piece follows with an analysis of how the post-independence 'control regime' was inherited from wartime British economic management and how the economic liberalisation of the 1990s, while substantively significant, proceeds without any ideological acknowledgment of liberty as a political value. Chanaka Amaratunga surveys the surprisingly resilient liberal tradition in Sri Lanka, centred on the Liberal Party and its programme of federalism, proportional representation, and ethnic reconciliation. Kusum Shrestha examines Nepal's 1990 Constitution as an expression of liberal constitutionalism — sovereignty in the people, supremacy of the Constitution, an independent judiciary, and a formal bill of fundamental rights — while noting the dualistic gap between aspirational 'Directive Principles' and judicially enforceable rights. Detmar Doering opens a brief intellectual history of liberalism, tracing its lineage from Locke through 19th-century liberals and the post-war social-liberal divergence; only the first page of that essay falls within this chunk. ## Essays ### Any Hope for Indian Liberals? *By Sharad Joshi* Sharad Joshi's cover essay asks whether Indian liberalism has any political future, and answers with a long historical argument for why it has so far failed. In the rendered pages he surveys the philosophical compatibility of 'Vedanta' individualism with liberalism, the ways in which British colonial rule introduced rule of law while also seeding a 'plethora of statists', and the three streams that dominated nationalist politics — socio-religious reformism, Hindu revivalism, and the Gandhian platform — none of which produced a durable liberal politics. Joshi argues that Gandhi's quasi-anarchist village-economy vision, though spiritually sincere, produced a programme antithetical to liberal modernity, while the Congress socialist tradition actively modelled itself on the USSR. He diagnoses the resulting post-independence state as a 'Nehruvian socialist brand of statism' that proved hospitable to bureaucratic rent-seeking and hostile to individual economic freedom. The closing pages — visible through printed page 8 — turn to the prospects: with socialist credibility exhausted after the Bangladesh debacle and the left's failure on economic management, Joshi argues the window for a genuine liberal party may be opening, though the Hindu nationalist parties are capitalising on the same vacuum. - Ancient Vedanta philosophy is philosophically congruent with liberalism — it stresses individuality, rejects absolutism, and distrusts intermediary institutions like Planning Commissions. - British colonial rule introduced rule of law but limited itself to administration and exploitation after 1857, producing a 'plethora of statists' rather than liberal democrats. - The three dominant nationalist streams — socio-religious reform movements, Hindu revivalism, and Gandhism — all failed to generate a liberal political economy. - Gandhi's village-economy programme combined genuine ecumenism with an economic vision that was static, anti-growth, and antithetical to liberal modernity. - The post-independence 'Nehruvian socialist' state, modelled on the USSR, gave power to a bureaucratic class that used regulation and licensing to entrench itself. - By 1995 the socialist brand of statism holds little promise, creating an opening for liberals, though Hindu nationalist parties are filling the same political vacuum. - Joshi calls for a new liberal party — tentatively referenced as 'Swatantra Bharat' — built on Maharashtrian farmers and urban self-employed workers rather than the old elite. ### Liberalisation and Liberalism in India *By By Dr. Ashok V. Desai* Ashok V. Desai's essay traces the origins of India's post-independence 'control regime' to the wartime British economic machine that India inherited in 1947, and then explains why the economic liberalisation of the 1990s has proceeded without any accompanying liberal ideology. Desai catalogues the major instruments — industrial licensing, capital-flow controls, import controls, agricultural procurement and distribution controls, and discriminatory taxation — as mechanisms that were originally wartime expedients but became entrenched because powerful interests grew up around them. He distinguishes sharply between 'liberalisation' (the pragmatic relaxation of controls to reduce inefficiency) and 'liberal philosophy', arguing that India belongs to the post-war social-liberal tradition in which liberty is not accepted as the ultimate goal of political systems. The essay closes by observing that the foreign enterprise is perceived as a structural threat to domestic actors at every level of the economy, which explains the paradox of strong growth coexisting with pervasive shame and no public celebration of reform. - India's comprehensive control regime was not an ideological choice at independence — it was directly inherited from the Allied wartime economic machine. - The five major control instruments (industrial licensing, capital flow, import controls, agricultural procurement, discriminatory taxation) reinforced each other and bred vested interests that perpetuated them. - India belongs to the post-war social-liberal tradition: liberty is not accepted as the ultimate goal, hence the paranoia about foreign investment. - Economic liberalisation since 1991 has been 'on the defensive' — starting from a crisis, proceeding without ideological confidence, and producing growth that no one openly celebrates. - The essay distinguishes clearly between liberalisation (a set of policy changes) and liberalism (a philosophy of individual freedom). ### Liberalism in Sri Lanka *By By Dr. Chanaka Amaratunga* Chanaka Amaratunga's essay surveys the surprisingly resilient prospects for liberalism in Sri Lanka. He opens with a long history of Sri Lanka's constitutional evolution — two constitutions (1972 and 1978), each drafted in a spirit of majoritarianism — and documents how political authoritarianism, ethnic conflict, and the civil war involving the LTTE have dominated the post-independence decades. Against this, he identifies several structural advantages: Sri Lanka's unbroken tradition of elected government since 1833, its adoption of proportional representation in 1989, and the active role of the Council for Liberal Democracy (CLD) and the Liberal Party (a full member of the Liberal International since 1987). The essay then outlines the Liberal Party's five-area reform programme: constitutional reform, resolution of ethnic conflict, economic reform, media freedom, and social freedom and criminal-law reform. Amaratunga argues that the party's sustained advocacy for federalism and maximum devolution of power to the provinces as the route to ethnic reconciliation distinguishes Sri Lankan liberalism in the region. He concludes that despite many illiberal features, Sri Lanka's history of constitutional government and small but committed liberal constituency make its prospects 'brighter than elsewhere in the South Asian region'. - Sri Lanka has had unbroken constitutional democratic government since 1833 — longer than any other South Asian nation — and has never had a military government. - The Liberal Party has existed since 1981 and is a full member of both the Liberal International and the Council of Asian Liberals and Democrats (CALD). - The party's top reform priority is constitutional change: abolishing the executive presidency, creating a bicameral parliament with proportional representation, and devolving maximum power to provinces. - The Liberal Party has been one of the strongest advocates of federalism and devolution as the path to resolving the ethnic conflict between Sinhalese and Tamil communities. - Economic reform advocacy focuses on privatisation, deregulation, welfare measures for the poor, and inclusion of private property rights in the Constitution. - Liberals in Sri Lanka strongly oppose the death penalty, corporal punishment, censorship, and criminalisation of consensual adult acts. ### Liberal Aspects of Nepal's Constitution *By By Kusum Shrestha* Kusum Shrestha's essay reads Nepal's 1990 Constitution as an expression of liberal constitutionalism, arising out of the democratic movement that forced King Birendra to abandon the panchayat system. The essay catalogues the liberal structural features of the new constitution: sovereignty in the people, supremacy of the Constitution over any act of state, an independent judiciary, checks and balances between the King, the Parliament, and the executive, and an explicit bill of twelve fundamental rights — including rights to equality, personal liberty, freedom from preventive detention, press and publication rights, right to information, cultural and educational rights, right to religion, right to privacy, right to freedom from exile, and right to constitutional remedies. Shrestha identifies a 'dualistic approach' as the constitution's main limitation: civil and political rights are guaranteed and justiciable, but social, economic, and cultural rights are placed in 'Directive Principles and Policies of the State', which are aspirational and non-justiciable. She concludes that the challenge is to translate the liberal and democratic values embodied in the constitution into living reality, so that democratic and progressive aspirations of the people can be addressed. - Nepal's 1990 Constitution arose from the democratic movement that overthrew the panchayat system, converting a dynastic state into a constitutional monarchy with sovereignty in the people. - The Constitution is made supreme — all laws inconsistent with it are void, and its basic structures (Article 116) cannot be destroyed even by constitutional amendment. - Twelve fundamental rights are guaranteed and justiciable; courts can declare any inconsistent law void. - A 'dualistic approach' limits the constitution: social, economic and cultural rights are relegated to non-justiciable Directive Principles. - The essay cites Nepal's ratification of several UN human rights conventions (Convention on the Right of the Child, ICCPR, ICESCR, ICCPR, Convention against Torture) as positive developments. - The essay ends with a call to translate constitutional liberal values into democratic reality to meet the aspirations of the people. ### Liberalism: The Eternal Quest for Freedom *By By Dr. Detmar Doering* Only the first page of Detmar Doering's essay falls within this chunk (printed page 20). In the rendered page, Doering opens with an intellectual-history argument: the idea that power must be limited is as old as mankind, traceable through classical authors (Cicero, Tacitus), medieval thinkers (Thomas Aquinas), and the Reformation. He credits John Locke's Two Treatises of Government (1689) as the first systematic rational theory of inalienable rights — life, liberty, and property. He then notes that Adam Smith's Physiocrats and the Scottish philosophical tradition developed a new approach to economics — the market economy — and that Montesquieu contributed the concept of division of power. The essay breaks off on page 20 with a reference to 19th-century liberal theorists including John Stuart Mill, Alexis de Tocqueville, Frédéric Bastiat, and Herbert Spencer. - Doering traces the genealogy of liberal ideas from classical antiquity through medieval natural-law theory to the Enlightenment. - Locke's Two Treatises of Government (1689) is identified as the first universal, rational theory of inalienable rights encompassing life, liberty, and property. - Adam Smith and the Physiocrats developed the 'market economy' concept as a practical application of liberal principles. - Montesquieu's concept of division of power is presented as a foundational contribution to liberal constitutional design. --- ## [Primary work] LIBERTY TO TRADE ENDANGERED URL: https://indianliberals.in/primary-works/liberty-to-trade-endangered-by-ad-shroff-january-16-1957/ ### Summary This pamphlet reproduces a speech by A. D. Shroff delivered at the Southern India Chamber of Commerce, Madras, on 16 January 1957 and issued by the Forum of Free Enterprise in Bombay. Shroff argues that Free Enterprise has come under sustained attack in recent months in India, with the State Trading Corporation, compulsory industrial deposits, and the nationalisation of life insurance treated as illustrations of an expanding regulatory state that drifts steadily from a planned economy into the daily regulation of economic life. Shroff is careful not to argue for an unqualified laissez-faire — he concedes that controls are necessary in any planned economy and that intelligent Indian businessmen accept some measure of regulation as inevitable in the modern world. His complaint is that the cumulative effect of recent measures amounts to a gradual diminishing of the democratic way of life and individual liberty. He sets this critique against the pioneering tradition of Indian business, recalling how the late J. N. Tata first conceived of making steel in India against British ridicule, and how the late Sir Sassoon J.… ### Body ## Summary This pamphlet reproduces a speech by A. D. Shroff delivered at the Southern India Chamber of Commerce, Madras, on 16 January 1957 and issued by the Forum of Free Enterprise in Bombay. Shroff argues that Free Enterprise has come under sustained attack in recent months in India, with the State Trading Corporation, compulsory industrial deposits, and the nationalisation of life insurance treated as illustrations of an expanding regulatory state that drifts steadily from a planned economy into the daily regulation of economic life. Shroff is careful not to argue for an unqualified laissez-faire — he concedes that controls are necessary in any planned economy and that intelligent Indian businessmen accept some measure of regulation as inevitable in the modern world. His complaint is that the cumulative effect of recent measures amounts to a gradual diminishing of the democratic way of life and individual liberty. He sets this critique against the pioneering tradition of Indian business, recalling how the late J. N. Tata first conceived of making steel in India against British ridicule, and how the late Sir Sassoon J. David and Sir Shapoorji Bharucha underwrote the offtake of Tatas' hydro-electric power for the Bombay cotton mills — evidence that industrial independence was built by private enterprise long before the state took an active developmental interest. The second half of the address turns to immediate threats. Shroff warns that the State Trading Corporation has cast "avaricious" eyes over cement, manganese and iron ore exports, and even smaller trades like lemongrass and sandalwood oil, despite having neither personnel nor experience. He calls the proposed compulsory deposit of Rs. 80–100 crores on industry a "man-made crisis of the greatest magnitude", arguing it will force banks to recall credit lines already granted to business. He places a "Code of Conduct" before businessmen — distinguishing profit-making from profiteering — and urges the community to back the Forum of Free Enterprise as a restraining voice against "the crazy and frantic financial policies" emanating from Delhi. ## Key points - Speech given to the Southern India Chamber of Commerce, Madras, on 16 January 1957 and circulated as a Forum of Free Enterprise pamphlet. - Shroff concedes that 'Laissez-faire philosophy simply does not exist in the modern world' but argues that Indian regulation has gone beyond a planned economy into daily interference with economic life. - He invokes the pioneering history of Indian business — J. N. Tata's steel and power projects, underwritten by Sir Sassoon J. David and Sir Shapoorji Bharucha — to insist that industrial independence in India was built by private enterprise. - The State Trading Corporation is singled out as the 'new activities the State has undertaken', encroaching on cement, manganese and iron ore, and even lemongrass and sandalwood oil, despite having no expertise or personnel. - Nationalisation of life insurance is treated not only as a takeover of a business but as the extended patronage of an entire democratic ecosystem of agents, drawn into the ruling party's machine. - Shroff frames the proposed compulsory deposits of Rs. 80–100 crores on industry as 'a man-made crisis of the greatest magnitude' that will force banks to withdraw credit limits already granted. - He places a 'Code of Conduct' before businessmen — distinguishing profit-making from profiteering — and argues that Free Enterprise must convince public opinion by acting fairly toward employees and consumers. - He urges the audience to keep the Forum of Free Enterprise active as a brake on 'the crazy and frantic financial policies' emerging from Delhi. --- ## [Primary work] LIFE AFTER LIBERALISATION URL: https://indianliberals.in/primary-works/life-after-liberalisation-dr-a-s-ganguly-january-15-1992/ ### Summary The 26th A.D. Shroff Memorial Lecture, delivered by Dr. Ashok S. Ganguly — then Director of Unilever in London and formerly Chairman of Hindustan Lever — on 24 December 1991 in Bombay and published as a Forum of Free Enterprise pamphlet on 15 January 1992. Ganguly speaks in the immediate aftermath of two epochal ruptures, the collapse of Soviet socialism and the Narasimha Rao government's launch of economic reforms, and uses the platform to think aloud about what daily life, work and political expectation will look like in an India that has formally turned away from the developmental settlement of 1947. The address opens with the observation that the "half-life of innovations" is collapsing — from a decade in the 1960s to perhaps two years by century's end — and reads the global moment through that lens. Gorbachev's perestroika unleashed forces that the reformers themselves could not control; the collapse of the Comecon bloc has left newly liberated states without trusted institutions; suppressed ethnic and religious conflicts have reopened wounds fifty years closed.… ### Body ## Summary The 26th A.D. Shroff Memorial Lecture, delivered by Dr. Ashok S. Ganguly — then Director of Unilever in London and formerly Chairman of Hindustan Lever — on 24 December 1991 in Bombay and published as a Forum of Free Enterprise pamphlet on 15 January 1992. Ganguly speaks in the immediate aftermath of two epochal ruptures, the collapse of Soviet socialism and the Narasimha Rao government's launch of economic reforms, and uses the platform to think aloud about what daily life, work and political expectation will look like in an India that has formally turned away from the developmental settlement of 1947. The address opens with the observation that the "half-life of innovations" is collapsing — from a decade in the 1960s to perhaps two years by century's end — and reads the global moment through that lens. Gorbachev's perestroika unleashed forces that the reformers themselves could not control; the collapse of the Comecon bloc has left newly liberated states without trusted institutions; suppressed ethnic and religious conflicts have reopened wounds fifty years closed. Against the hope that markets will rescue moribund economies on their own, Ganguly insists that life after liberalisation can be built only by blood, toil and tears, not by political rhetoric or by pretending that laissez-faire is an easy route. Turning to India, Ganguly diagnoses the inherited developmental formula — central planning, suspicion of foreign capital, anti-concentration controls, self-reliance and nationalisation of economic flows — as an obsolete "mantra" that trapped Indian society and that his own pre-1947 generation believed in too long. India's real strengths, he argues, are its people, its transport and communication infrastructure, its abundant natural endowments, and the modern economic philosophy produced by figures like Amartya Sen and Jagdish Bhagwati. He warns of the vast gap between "liberalisation on paper" and "liberalisation in practice", criticises the scientific establishment for resisting modernisation in order to keep using taxpayer money, and insists employment and dignified livelihoods cannot be legislated into existence — only sustainable growth can deliver them. The closing "Post Script" frames liberalisation as irreversible. Ganguly invokes the late Rajiv Gandhi's reform impulse, defends Indians who emigrated and remitted skills back, and tells "the midnight's children and their offsprings" that they need no longer justify the failures of the past. The lecture closes with the prediction — printed alongside a back-cover epigraph from Eugene Black that private enterprise must be embraced as an "affirmative good" — that life after liberalisation will be thrilling, if somewhat awe-inspiring, and for a time very painful. ## Key points - The 26th A.D. Shroff Memorial Lecture, delivered in Bombay on 24 December 1991 by Ganguly, then Director of Unilever London and formerly Chairman of Hindustan Lever. - Reads the post-1989 global moment through the metaphor of a collapsing 'half-life of innovations' — from ten years in the 1960s to perhaps two by the turn of the century. - Argues there is no proven model for transitioning from centralised planning to a market economy; Hong Kong, Guangdong, Taiwan and the two Koreas provide only partial parallels. - Diagnoses the Nehruvian formula — central planning, suspicion of foreign capital, anti-concentration controls, self-reliance and nationalisation — as an 'incontrovertible mantra' with disastrous consequences. - Identifies Amartya Sen and Jagdish Bhagwati as founders of modern economic philosophy relevant to the realities of the poorest of the poor. - Warns of a 'vast difference between liberalisation on paper and liberalisation in practice', with state-level plans still asserting strengths and resources individually rather than as a federal whole. - Insists employment and dignified livelihoods cannot be created artificially or by legislation — only sustained economic growth can deliver them. - Frames the post-liberalisation transition as irreversible, painful in the short run but ultimately thrilling, invoking the late Rajiv Gandhi's reform aspirations. --- ## [Primary work] LIMITATIONS OF NATIONALISATION URL: https://indianliberals.in/primary-works/limitations-of-nationalisation-by-s-narayana-aiyar/ ### Summary S. Narayana Aiyar draws on twenty-four years of firsthand telephone-administration experience — fourteen-plus years with the Bombay Telephone Company Ltd. before nationalisation, and ten years thereafter under the Posts and Telegraphs Department (seven as Engineer at Bombay, three as Manager at Madras) — to argue that government management of commercial undertakings is, in his words, an inherent failure. He recalls his pre-nationalisation colleagues warning him that efficiency would 'disappear' once the state took over, and recounts how, within days of the April 1, 1943 takeover, the transfer of the Telephone Company's stores from the Bombay Manager to the Chief Controller of Telegraphic Stores at Calcutta made telephone parts 'unobtainable' and produced an immediate drop in service quality. Aiyar marshals concrete cost evidence to extend the indictment. The Madras Telephone Directory, which he had previously printed and bound through private contractors for just over Rs. 6,000 for 13,000 copies, drew an estimate of Rs. 21,500 from the Government Press, Madras — with a proviso that the final bill might be higher still. He cites an episode in which T. T.… ### Body ## Summary S. Narayana Aiyar draws on twenty-four years of firsthand telephone-administration experience — fourteen-plus years with the Bombay Telephone Company Ltd. before nationalisation, and ten years thereafter under the Posts and Telegraphs Department (seven as Engineer at Bombay, three as Manager at Madras) — to argue that government management of commercial undertakings is, in his words, an inherent failure. He recalls his pre-nationalisation colleagues warning him that efficiency would 'disappear' once the state took over, and recounts how, within days of the April 1, 1943 takeover, the transfer of the Telephone Company's stores from the Bombay Manager to the Chief Controller of Telegraphic Stores at Calcutta made telephone parts 'unobtainable' and produced an immediate drop in service quality. Aiyar marshals concrete cost evidence to extend the indictment. The Madras Telephone Directory, which he had previously printed and bound through private contractors for just over Rs. 6,000 for 13,000 copies, drew an estimate of Rs. 21,500 from the Government Press, Madras — with a proviso that the final bill might be higher still. He cites an episode in which T. T. Krishnamachari invited an English expert, Mr. Scaife, under the Colombo Plan to examine the Prototype Machine Tool Factory at Ambernath and the Hindustan Machine Tool Factory then under construction at Jalahalli; Scaife reported that a reputable private agency would have obtained five times the result at one-fifth the total cost. Aiyar generalises that across a wide range of his experience, government institutions deliver in the shape of value to the public about a third of what they spend, dragged down by 'unnecessary work', 'offensive inquiries' and audit-department harassment that crowd out productive effort. The essay closes with a programmatic distinction that has since become a touchstone of the Forum of Free Enterprise literature: government should plan, regulate and control, but should not administer or operate commercial, industrial and public-utility services. Drawing on experience 'both here and in other countries', Aiyar argues that government agency is 'a very unsuitable instrument for trade, manufacture and the operation of public utility services', and that the state, even when it owns the means of production, is best advised to lease them to competent private operators on long-term contracts rather than attempting monolithic administration. The pamphlet is a reprint of an article first published in Swarajya (Madras) of December 1, 1956, issued by the Forum of Free Enterprise. ## Key points - Author served fourteen-plus years with the Bombay Telephone Company Ltd. before its 1943 nationalisation and ten years under the Posts and Telegraphs Department thereafter, giving the essay an unusual insider's vantage on the transition. - Within days of the April 1, 1943 government takeover, control of the Telephone Company's stores was shifted from the Bombay Manager to the Chief Controller of Telegraphic Stores at Calcutta, after which telephone parts and other stores became 'unobtainable' and service quality dropped immediately. - Cost comparison on the Madras Telephone Directory: Rs. 6,000-plus for 13,000 copies under private contract, against an estimate of Rs. 21,500 from the Government Press, Madras with a proviso that the actual bill might be larger. - T. T. Krishnamachari engaged Mr. Scaife from England under the Colombo Plan to evaluate the Prototype Machine Tool Factory at Ambernath and the Hindustan Machine Tool Factory at Jalahalli; Scaife concluded a competent private agency would have achieved five times the output at one-fifth the cost. - Aiyar generalises that government institutions return to the public roughly one-third of the value of the sums they spend, dragged down by unnecessary work, offensive inquiries and audit-department checks that crowd out productive effort. - Programmatic conclusion: government should be confined to planning, regulation and control; the exclusive right to manage commercial, industrial and public-utility services should rest with the private sector. - Even where the state owns means of production, Aiyar argues, it should split them into independent units leased to private operators on long-term contracts rather than attempt monolithic administration. - The essay is a December 1, 1956 Swarajya article reprinted as a Forum of Free Enterprise pamphlet from 'Sohrab House', 235 Dr. Dadabhai Naoroji Road, Bombay 1. --- ## [Primary work] LIMITATIONS OF NATIONALISATION URL: https://indianliberals.in/primary-works/limitations-of-nationalism-by-s-narayana-aiyar-december-1-1956/ ### Summary S. Narayana Aiyar's "Limitations of Nationalisation" — reprinted by the Forum of Free Enterprise from Swarajya (Madras), 1 December 1956 — is a first-person indictment of state ownership drawn from the author's own career. Aiyar served as an Assistant Engineer at the privately run Bombay Telephone Company before its nationalisation, then spent ten further years inside the Government of India's telephone service (seven as Engineer at Bombay, three as Manager of Telephones, Madras). Day after day, he writes, he had "burnt into" him the lesson that government management does not work. When the State took over on 1 April 1943, one of its first acts — switching stores control from the Bombay Telephone Manager to the Chief Controller of Telegraphic Stores at Calcutta — produced an immediate collapse in service: telephone parts became unobtainable and his old colleagues, who had warned him "when Government comes our efficiency will disappear," were proved "dead right." The core argument is that nationalisation degrades work not by accident but by structure.… ### Body ## Summary S. Narayana Aiyar's "Limitations of Nationalisation" — reprinted by the Forum of Free Enterprise from Swarajya (Madras), 1 December 1956 — is a first-person indictment of state ownership drawn from the author's own career. Aiyar served as an Assistant Engineer at the privately run Bombay Telephone Company before its nationalisation, then spent ten further years inside the Government of India's telephone service (seven as Engineer at Bombay, three as Manager of Telephones, Madras). Day after day, he writes, he had "burnt into" him the lesson that government management does not work. When the State took over on 1 April 1943, one of its first acts — switching stores control from the Bombay Telephone Manager to the Chief Controller of Telegraphic Stores at Calcutta — produced an immediate collapse in service: telephone parts became unobtainable and his old colleagues, who had warned him "when Government comes our efficiency will disappear," were proved "dead right." The core argument is that nationalisation degrades work not by accident but by structure. Expenses go up, service goes down "almost immediately," and the tempo of effort "goes down with immediate effect" because what had been "honest work for wages" becomes "the paper-pushing routine characteristic of every Government office." Aiyar offers two concrete illustrations: a quotation from the Government Press, Madras, of Rs. 21,500 to print and bind 13,000 copies of the Madras Telephone Directory for which he had been paying just over Rs. 6,000 in the private market; and the report of Mr. Scaife, a tool-man invited from England under the Colombo Plan by Sri T. T. Krishnamachari to examine the Prototype Machine Tool Factory at Ambernath and the Hindustan Machine Tool Factory at Jalahalli, who concluded that "any reputable private agency would have obtained five times the result at one-fifth the total cost." Aiyar generalises from these cases into a structural claim: government institutions return to the public only about a third of the sums they expend, partly because public-sector employees take pride in not being "governed by the profit motive," partly because audit-driven inquiries and routine displace any return-to-the-office discipline that operates in commercial life. His conclusion is the Forum of Free Enterprise's house position rendered in workplace prose — the private sector should have the exclusive right to manage all commercial, industrial and public utility services, while government confines itself to "planning, regulating and controlling at the bar of public opinion in India." Even if the State were to own the means of production outright, he argues, the best route to output is to break the work into independent units placed on long-term contracts with fair operational independence, rather than "trying to run it all with its own monolithic organisation." ## Key points - Aiyar grounds his case against nationalisation in 25 years of personal service — 15 with the privately-owned Bombay Telephone Company and 10 inside the Government of India's nationalised successor as Engineer (Bombay) and Manager (Madras). - He dates the operational collapse to a specific act: on 1 April 1943, the State switched stores control from the Bombay Telephone Manager to the Chief Controller of Telegraphic Stores at Calcutta, and parts "almost immediately" became unobtainable. - The structural cost of state ownership, in Aiyar's reading, is the conversion of "honest work for wages" into "paper-pushing routine," producing an "immediate" drop in tempo even with the same workforce. - He offers a price comparison as illustrative evidence: the Government Press, Madras, quoted Rs. 21,500 to print 13,000 copies of the Madras Telephone Directory against the just-over-Rs. 6,000 he had been paying privately. - He cites Mr. Scaife — brought from England by Sri T. T. Krishnamachari under the Colombo Plan — who, after examining the Ambernath and Jalahalli machine tool factories, told the Government of India that a private agency "would have obtained five times the result at one-fifth the total cost." - Aiyar generalises: government institutions return only about a third of the value of the sums they expend, with the rest dissipated in audit-driven routine and the absence of a profit-motive check on activity. - His prescription is a strict division of labour — private exclusivity in commercial, industrial and public-utility operation; government confined to planning, regulation and answerability "at the bar of public opinion." - Even under public ownership, he argues, the right delivery model is decentralised: breaking work into independent units under long-term contracts rather than running it through a single monolithic state organisation. --- ## [Primary work] LIMITS OF NATIONALISATION URL: https://indianliberals.in/primary-works/limits-of-nationalisation-dr-john-matthai-january-1-1970/ ### Summary Dr. John Matthai's short pamphlet "Limits of Nationalisation," reprinted by the Forum of Free Enterprise from a speech delivered at the Rotary Club, Bombay, mounts a careful, lawyerly case against the general application of nationalisation in Indian industrial policy. Matthai concedes that state enterprise has a legitimate place where there is "proved necessity" — defence-related industries are his prima facie example — but insists that free enterprise should be the rule and state ownership the narrowly justified exception, decided industry by industry on the merits rather than by a priori categories or by appeal to a Socialist Pattern of Society. The argument rests on two main lines. First, Matthai rereads the genealogy of socialism: he argues that Marx's thesis of socialising the means of production was a response to nineteenth-century conditions — despotic governments, propertied-class capture of the state, and the bargaining weakness of labour — which no longer obtain in democratically governed countries with adult franchise and sovereign parliaments.… ### Body ## Summary Dr. John Matthai's short pamphlet "Limits of Nationalisation," reprinted by the Forum of Free Enterprise from a speech delivered at the Rotary Club, Bombay, mounts a careful, lawyerly case against the general application of nationalisation in Indian industrial policy. Matthai concedes that state enterprise has a legitimate place where there is "proved necessity" — defence-related industries are his prima facie example — but insists that free enterprise should be the rule and state ownership the narrowly justified exception, decided industry by industry on the merits rather than by a priori categories or by appeal to a Socialist Pattern of Society. The argument rests on two main lines. First, Matthai rereads the genealogy of socialism: he argues that Marx's thesis of socialising the means of production was a response to nineteenth-century conditions — despotic governments, propertied-class capture of the state, and the bargaining weakness of labour — which no longer obtain in democratically governed countries with adult franchise and sovereign parliaments. Keynesian state participation and Roosevelt's New Deal, he reminds his audience, were emergency measures whose own architects warned against turning them into permanent ownership of the instruments of production. Second, Matthai questions whether the Government of India's administrative apparatus can actually deliver the speedy development that the case for nationalisation presupposes: India is, in his judgement, one of the most under-administered countries in the world, the dynamic momentum supplied by the post-Independence leadership cannot last, and the civil service has grown too cautious, too legalistic and too risk-averse to run productive enterprises well. A further section trains his fire on the Planning Commission, which he frankly says he has "never been happy about": a body of experts has, through adventitious circumstances, displaced cabinet responsibility for economic policy, leaving ministers without initiative in the very areas where their political accountability is most needed. The dislocation of partition, expenditure pressures from neighbouring countries, and a fresh inflationary trend are flagged as further reasons to proceed slowly. Matthai closes with a four-point programme — nationalisation should be strictly limited in scope, applied selectively to specific industries rather than whole categories, empirical in approach, and as decentralised as possible — and a ringing defence of freedom of enterprise as "one of the greatest freedoms in a democratic community." ## Key points - Matthai's controlling thesis: free enterprise should be the rule and nationalisation the narrowly justified exception, decided on the merits of each industry rather than by a priori categories. - He rereads Marx historically — socialisation of the means of production made sense against nineteenth-century despotism and propertied-class capture, but loses its grip in democratically governed states with adult franchise and a sovereign parliament. - Keynesian state participation and Roosevelt's New Deal are read as emergency stabilisation measures, not as a doctrinal warrant for permanent state ownership of industry. - He distinguishes the first Five-Year Plan (essentially piecemeal projects designed before Independence) from the second, which is a genuinely comprehensive plan demanding far larger finance — and warns that deficit financing carries serious risks. - Implementing such a plan, he argues, will require unprecedented administrative and financial capacity, which the Government of India does not possess: India is one of the most under-administered countries in the world. - The civil service is now too slow, too legalistic, and too fearful of risk to run nationalised enterprises well; political chiefs are increasingly adopting officials' caution rather than overriding it. - He attacks the Planning Commission as a body of "amateurs" with whom final responsibility for economic decisions has come to rest, displacing the cabinet ministers who alone are politically accountable. - His closing four-point programme: nationalisation should be strictly limited in scope, applied selectively to specific industries, empirical in approach, and as far as possible decentralised. --- ## [Primary work] LIMITS OF PUBLIC SECTOR IN INDIA URL: https://indianliberals.in/primary-works/limits-of-public-sector-in-india-gangadhar-gadgil-july-18-1979/ ### Summary Prof. Gangadhar Gadgil's lecture, delivered in Bombay on 20 March 1979 under the auspices of the Forum of Free Enterprise, mounts a point-by-point rebuttal of the Janata Government's case for India's public sector, as recently summarised by Union Industry Minister George Fernandes. Gadgil opens by reproducing Fernandes's nine claims — that the public sector should not be judged by profitability, that India would not be a front-ranker in heavy industry, nuclear or space technology without it, that it has rescued sick units, established public control over the commanding heights, decentralised industry, and looked after worker welfare — and then proceeds to test each claim against the criteria the Janata Party itself and the Planning Commission had set: post-tax return on investment, generation of investible surpluses, and capacity utilisation. On that ground, Gadgil argues, the public sector is failing on its own stated terms. He marshals official figures — a fall in post-tax return from 9.7 per cent (1976-77) to 8.3 per cent (1977-78), the conversion of Rs. 239.59 crores of net profit into a Rs. 14.72 crore loss, accounting devices around depreciation rates (4.88 per cent vs.… ### Body ## Summary Prof. Gangadhar Gadgil's lecture, delivered in Bombay on 20 March 1979 under the auspices of the Forum of Free Enterprise, mounts a point-by-point rebuttal of the Janata Government's case for India's public sector, as recently summarised by Union Industry Minister George Fernandes. Gadgil opens by reproducing Fernandes's nine claims — that the public sector should not be judged by profitability, that India would not be a front-ranker in heavy industry, nuclear or space technology without it, that it has rescued sick units, established public control over the commanding heights, decentralised industry, and looked after worker welfare — and then proceeds to test each claim against the criteria the Janata Party itself and the Planning Commission had set: post-tax return on investment, generation of investible surpluses, and capacity utilisation. On that ground, Gadgil argues, the public sector is failing on its own stated terms. He marshals official figures — a fall in post-tax return from 9.7 per cent (1976-77) to 8.3 per cent (1977-78), the conversion of Rs. 239.59 crores of net profit into a Rs. 14.72 crore loss, accounting devices around depreciation rates (4.88 per cent vs. 6.06 per cent), and concessional interest of 6.25-8 per cent on government loans where no private firm could borrow — to show that public sector enterprises are 'pampered babies' that look profitable only because of favoured treatment. He dissects pricing policy to argue that statutory price controls bind both sectors symmetrically, and that on the visible side, public enterprises in fact enjoy monopoly pricing power, canalised imports/exports (HMT, SAIL, STC), purchase preferences, and subsidised inputs; on the invisible side, cheap land, fiscal concessions to LIC and UTI, and procurement steered by ministries. Gadgil then turns to the social-goals argument. Capacity utilisation is poor (only 71 units at 75 per cent or more in 1977-78, against 76 the year before; 27 units below 50 per cent), key fertiliser and heavy engineering plants are dragging, Bokaro and Durgapur steel plants are under-utilised while TISCO runs above rated capacity, and BHEL's record at Patratu and Pimpri penicillin is held up as the visible cost of public ownership. Inventories remain bloated against Tandon Committee norms. The Bureau of Public Enterprises' five-year loss-streak definition of 'sickness' is shown to be so lax that an enterprise that erodes its capital in three years still escapes the label. Sustaining such units, Gadgil writes, can only be done by an entity that has unlimited powers of taxation and captive lenders — i.e., the State. The lecture closes by widening the indictment from efficiency to politics. The public sector, Gadgil argues, has produced 'enormous concentration of economic power in the hands of the bureaucracy and the politicians in power', created monopolies he calls 'Leviathans', and — most pointedly, in a clear reference to the 1975-77 Emergency — was 'used for creating dictatorship in this country'. If big business in the private sector poses dangers, the answer is regulation, not the multiplication of an equally dangerous state monolith; expansion of the public sector through further nationalisation, he concludes, is 'neither in public interest nor consistent with the philosophy and goals of the Government'. ## Key points - Gadgil structures the lecture as a rebuttal of nine claims attributed to Union Industry Minister George Fernandes, treating Fernandes's defence as the authoritative pro-public-sector case to refute. - He turns the Janata Party's own Statement on Economic Policy and the Sixth Five Year Plan (1978-83) against the public sector, arguing both documents set criteria — post-tax return on investment, generation of investible surpluses, agricultural and small-industry support — on which the sector is plainly failing. - A central evidentiary move is the post-tax return on capital: 9.7 per cent (1976-77) → 8.3 per cent (1977-78); a Rs. 239.59 crore net profit in 1976-77 turning into a Rs. 14.72 crore loss in 1977-78; depreciation provisions raised from 4.88 to 6.06 per cent that he calls 'shockingly bad accounting practice'. - He attacks the 'pampered babies' thesis: public sector loans at 6.25-8 per cent (and even punitive non-plan loans at 12.5-14 per cent that remain below private market rates), purchase preferences until July 1978, canalised imports/exports through HMT, SAIL and STC, plus subsidies and invisible favours like cheap land and fiscal carve-outs for LIC and UTI. - On capacity utilisation, he cites that only 71 units met 75 per cent capacity in 1977-78 (vs. 76 the prior year) while 27 fell below 50 per cent, and contrasts public steel plants at Bokaro and Durgapur with J.R.D. Tata's TISCO running above rated capacity. - He demolishes the 'sick unit rescue' defence: the Bureau of Public Enterprises' five-year-loss test for sickness is too liberal, the government blocks amalgamation of sick units by big business houses, and absorbing sick units is unreasonable to expect of private firms that lack the State's powers of taxation. - The political critique is the rhetorical climax: public sector growth has concentrated economic power in bureaucrats and politicians, created sectoral monopolies he labels 'Leviathans', and — in a clear allusion to the Emergency — was 'used for creating dictatorship in this country'. - Final position: the bigness problem of private capital is real and warrants regulation, but cannot be solved by nationalisation; expanding the public sector through further nationalisation is incompatible with the Janata Government's stated philosophy. --- ## [Primary work] Management Development URL: https://indianliberals.in/primary-works/management-development-dr-surinder-p-s-pruthi-october-12-1971/ ### Summary "Management Development", a 1971 Forum of Free Enterprise pamphlet based on a public lecture delivered by Dr. Surinder P. S. Pruthi in Bombay on 11 May 1971, surveys the problem of building India's first generation of professionally trained business managers. Pruthi addresses three constituencies — the post-graduate business schools, the companies that hire MBAs, and the management trainees themselves — and argues that a "happy synthesis of their collective objectives" requires all three to recognise how poorly they currently understand one another. The bulk of the lecture diagnoses what each party gets wrong. The schools, modelled on a British heritage that prized utilitarian clerk-training and "status quo"-oriented Arts curricula, started late and remain over-reliant on text-book prescriptions, part-time pontificators and case-method formulae; they need a healthier mix of academic and industrial faculty, more emphasis on "doing-orientation" and "problem-finding", and serious investment in in-company and on-the-job programmes, which Pruthi calls the locus of "something like 90%" of a manager's actual development.… ### Body ## Summary "Management Development", a 1971 Forum of Free Enterprise pamphlet based on a public lecture delivered by Dr. Surinder P. S. Pruthi in Bombay on 11 May 1971, surveys the problem of building India's first generation of professionally trained business managers. Pruthi addresses three constituencies — the post-graduate business schools, the companies that hire MBAs, and the management trainees themselves — and argues that a "happy synthesis of their collective objectives" requires all three to recognise how poorly they currently understand one another. The bulk of the lecture diagnoses what each party gets wrong. The schools, modelled on a British heritage that prized utilitarian clerk-training and "status quo"-oriented Arts curricula, started late and remain over-reliant on text-book prescriptions, part-time pontificators and case-method formulae; they need a healthier mix of academic and industrial faculty, more emphasis on "doing-orientation" and "problem-finding", and serious investment in in-company and on-the-job programmes, which Pruthi calls the locus of "something like 90%" of a manager's actual development. The trainees, in turn, are warned against money- and title-consciousness, reflexive job-hopping, pomposity and an "all-knowing" attitude derived from their MBAs. The long-term currency, Pruthi insists, is "qualities of character and intellect rather than mere knowledge"; "leadership requires sacrifice and hard work", and the trainee must learn to find the right things to do, not merely to do things right. The closing sections widen out into a brief on the Indian corporate scene as it stood in 1971 — the Monopolies and Restrictive Trade Practices Act, bank nationalisation, abolition of the managing agency system, financial-institution and joint-sector participation, new labour and company legislation, and growing union and government scrutiny are all flagged as forces displacing the self-made, family-firm manager with a professionalised, accountable, "philosopher"-type executive. Pruthi calls on Indian business to expose existing middle and senior managers to systematic developmental programmes, to elevate Organisational Development and Manpower Planning to a board-level function reporting at the highest level, and to design a flexible salary structure that pays for the job rather than for age or seniority. The rendered pages stop in the middle of that closing prescription, before any concluding paragraphs or the Forum of Free Enterprise back-matter. ## Key points - Pruthi frames Indian business education as a roughly ten-year-old infrastructure that must professionalise in step with the companies and trainees it serves; without that three-way synthesis, MBAs will go the way of mismatched engineers. - India's inherited British educational philosophy privileged utilitarian clerkship and ruling-class "status quo" training; business education started at home before London and Manchester set up their own schools after Independence. - Curricula over-weight "respondent behaviour" (analysis, debate, case-method) at the expense of "operant behaviour" (action); the corrective is doing-orientation, work experience, an industrially seasoned faculty mix, and a more imaginative Summer jobs scheme. - About 90% of a manager's growth in knowledge, skills and attitudes occurs on the job, making in-company and on-the-job training non-negotiable adjuncts to formal classroom education. - Trainees are urged to resist money- and title-consciousness, casual job-hopping, pomposity and an "all-knowing" attitude, and to invest the first year or two as an "ears and eyes" apprenticeship that builds character, judgement and continual learning. - Indian business is being remade in 1971 by the MRTP Act, bank nationalisation, abolition of the managing agency system, joint-sector arrangements, financial-institution participation and tighter labour and company law; the self-made family-firm manager is giving way to a professionally educated administrator under simultaneous union and government pressure. - Concrete remedies proposed for industry: systematic developmental programmes for existing middle and senior managers, organisational development and manpower planning as a board-level function, and a flexible salary structure that pays for the job rather than age or seniority. --- ## [Primary work] MANAGEMENT PHILOSOPHY OF PETER DRUCKER URL: https://indianliberals.in/primary-works/management-philosophy-of-peter-drucker-n-n-sachitanand-february-14-1979/ ### Summary N. N. Sachitanand's profile, reprinted by the Forum of Free Enterprise from The Hindu of 29 November 1978, presents Peter F. Drucker as the 'living prophet' of management on the occasion of his first visit to India to keynote the Bangalore Management Association's silver jubilee. Sachitanand sketches Drucker's biography — Vienna 1909, apprenticeship in Hamburg, doctorate at Frankfurt, flight from Nazi Germany, the 1942 General Motors study that produced 'Concept of the Corporation' — and explains his self-description as a management philosopher who treats consulting as his laboratory and society as a 'Society of Organisations' in which the manager bears the load that masters once carried. The booklet then walks the reader through Drucker's signature positions as he stated them to the Bangalore press: think through purpose and objectives, concentrate resources, and lead from people's strengths rather than their weaknesses.… ### Body ## Summary N. N. Sachitanand's profile, reprinted by the Forum of Free Enterprise from The Hindu of 29 November 1978, presents Peter F. Drucker as the 'living prophet' of management on the occasion of his first visit to India to keynote the Bangalore Management Association's silver jubilee. Sachitanand sketches Drucker's biography — Vienna 1909, apprenticeship in Hamburg, doctorate at Frankfurt, flight from Nazi Germany, the 1942 General Motors study that produced 'Concept of the Corporation' — and explains his self-description as a management philosopher who treats consulting as his laboratory and society as a 'Society of Organisations' in which the manager bears the load that masters once carried. The booklet then walks the reader through Drucker's signature positions as he stated them to the Bangalore press: think through purpose and objectives, concentrate resources, and lead from people's strengths rather than their weaknesses. Drucker's most polemical claims are aligned with the Forum's classical-liberal editorial line — that 'there are no profits in business, there are only costs', that with prevailing inflation 'businesses are not making profits but only destroying capital', and that capital is so scarce in India that 'it is irresponsible to run a business at a loss or even talk of profiteering.' A long section catalogues Drucker's scepticism about the state: governments have demonstrated competence only in waging war and inflating currency; civil-service safeguards built to deter corruption end up shielding bureaucrats from performance demands and obstructing initiative; organisational inertia is most acute in government because failed agencies are not allowed to expire. He nonetheless concedes that Indian state enterprises like Hindustan Machine Tools have run without heavy subsidies and proposes they 'go really public and autonomous', freeing capital for fresh investment. He criticises Indian foreign-investment rules such as FERA, defends the multinational as the century's most fruitful social innovation, attacks worker participation on boards as a 'conspiracy against the consumer', and notes with 'remarkable accuracy' that India's small entrepreneur is 'being killed by kindness — well meaning regulations that he cannot afford.' The closing pages move from policy to philosophy: Drucker the 'old existentialist' sees the world in a philosophical vacuum awaiting a new concept of the whole, suggests that the workable test 'Does it work?' may be all we have left in place of 'Is it right?', and looks for 'the acceptable range of imperfection' rather than the good society. The Forum frames the reprint with epigraphs from A. D. Shroff and Eugene Black insisting that free enterprise is 'an affirmative good', and notes that the views in the booklet are not necessarily those of the Forum. ## Key points - Reprint by the Forum of Free Enterprise of Sachitanand's profile of Peter Drucker, originally in The Hindu of 29 November 1978, occasioned by Drucker's keynote at the Bangalore Management Association's silver jubilee. - Biographical arc: Vienna 1909, Hamburg clerkship, doctorate in law at Frankfurt 1931, anti-Nazi monograph banned 1933, England, then the United States from 1937; the 1942 General Motors study yielded 'Concept of the Corporation' and the lifelong project of theorising the modern corporation. - Drucker's three rules of good management as he stated them in Bangalore: think through purpose and objectives, concentrate resources, lead from people's strengths. - On profit: 'there are no profits in business, there are only costs'; under current inflation businesses are destroying rather than accumulating capital, and in capital-scarce India running a business at a loss is irresponsible. - Sharp critique of state capacity — governments have proved competent only at waging war and inflating currency; civil-service safeguards protect bureaucrats from performance demands and block innovation; organisational inertia is worst in government. - Indian-policy specifics: Drucker urges that successful state enterprises like Hindustan Machine Tools 'go really public and autonomous'; attacks FERA-style restrictions; defends the multinational as a wealth-generating social innovation; calls worker participation on boards a 'conspiracy against the consumer'. - Catalogues the regulatory strangulation of India's small entrepreneur — 'being killed by kindness — well meaning regulations that he cannot afford' — and argues the future managerial frontier is the badly-managed service institution (universities, hospitals, government agencies). - Closes with Drucker's philosophical mood — 'old existentialist' in a philosophical vacuum, end of ideology, the tolerant society defined by 'the acceptable range of imperfection' — framed by Forum epigraphs from A. D. Shroff and Eugene Black affirming private enterprise as an 'affirmative good'. --- ## [Primary work] MANAGING A BUSINESS IN INDIA URL: https://indianliberals.in/primary-works/managing-a-business-in-india-t-thomas-dilip-g-piramal-november-12-1980/ ### Summary Managing a Business in India is a Forum of Free Enterprise booklet that bundles excerpts from two speeches — one by T. Thomas, the long-serving Chairman of Hindustan Lever Ltd., delivered at the firm's Annual General Meeting in Bombay on 20 June 1980, and another by the young industrialist Dilip G. Piramal. The introduction frames the volume as a periodic stocktaking of the conditions under which private enterprise must operate within India's mixed economy, and argues that if its propositions are taken seriously, the role of private enterprise in national economic development can be secured. An epigraph from Eugene Black — "People must come to accept private enterprise not as a necessary evil, but as an affirmative good" — sets the polemical key. ### Body ## Summary Managing a Business in India is a Forum of Free Enterprise booklet that bundles excerpts from two speeches — one by T. Thomas, the long-serving Chairman of Hindustan Lever Ltd., delivered at the firm's Annual General Meeting in Bombay on 20 June 1980, and another by the young industrialist Dilip G. Piramal. The introduction frames the volume as a periodic stocktaking of the conditions under which private enterprise must operate within India's mixed economy, and argues that if its propositions are taken seriously, the role of private enterprise in national economic development can be secured. An epigraph from Eugene Black — "People must come to accept private enterprise not as a necessary evil, but as an affirmative good" — sets the polemical key. ## Essays ### Relationship with Environment *By T. Thomas* In Part I, "Relationship with Environment," T. Thomas argues that the most important task of a Chief Executive in India is no longer internal management but the management of relations with an all-pervasive, controlling Government. He traces how industrial licensing, the Companies Act, the Monopolies Act, price and remuneration restraints, and a creeping upward movement of decision-making — from Joint Secretaries in the 1960s up to the Cabinet by the 1970s — have together slowed the economy, fattened the bureaucracy, and bred mutual distrust between officials and businessmen. He attributes much of this not to a coherent ideology but to political insecurity and a small but vocal minority hostile to private enterprise, and asks for the trend to be challenged rather than philosophically accepted. Drawing on the Japanese Meiji-era partnership between government and large private industry, and on the recent troubles of British Steel and British Leyland, Thomas argues that public-sector ownership weakens governments politically (because no politician can be tough with public-sector employees) and is best confined to areas where it is the only possible choice. He marshals a 1977 National Council of Applied Economic Research study to enumerate the costs of price controls — black markets, quality erosion, parallel economy, bureaucratic corruption, neglect of the consumer — and dismisses the Janata-era "small is beautiful" enthusiasm, insisting that the realistic formula is "small with large." He calls for 5% p.a. cumulative growth permission for existing units, MRTP and licensing thresholds indexed to inflation, free-trade-zone treatment for export-oriented factories, IAS officers seconded to private companies to build mutual trust, cash limits on public-sector enterprises, and opening of power generation in metros and offshore oil exploration to private firms. He closes by invoking India's tradition of absorbing foreign influences — Aryan, Buddhist, Christian, Zoroastrian, Islamic — and the example of Gandhi and Nehru, who drew on the "liberal West" to free India politically; a similar opening, he argues, is now needed to free it economically, with even Russia and China rediscovering the root of enterprise. - Government's pervasive controls — industrial licensing, MRTP, the Companies Act, price and remuneration restraints — have made management of the external environment the dominant task of Indian CEOs. - Decision-making has migrated upward from Joint Secretaries in the 1960s to Cabinet Committees and the Cabinet in the 1970s, slowing the economy and raising the share of negative decisions. - Japan's Meiji-era partnership between government and private industry is held up as the model India failed to follow; British Steel and British Leyland illustrate the costs of public-sector ownership. - An NCAER 1977 study is invoked to itemise the damage done by price controls — quality erosion, blackmarketing, black money, bureaucratic corruption, and neglect of consumer welfare. - The Janata "small is beautiful" turn is rejected as "meta-economics or philosophy"; the realistic formula offered is "small with large," with large-scale industry essential for growth. - Policy asks include 5% p.a. cumulative growth permission for existing units, inflation-indexed licensing and MRTP exemption limits, free-trade-zone treatment for export factories, IAS secondment to private companies, cash limits on public-sector firms, and private entry into urban power generation and offshore oil. - Thomas grounds his closing appeal in India's tradition of cultural absorption and in Gandhi's and Nehru's borrowing from the "liberal West," calling for a parallel economic opening so that private enterprise — the root of all enterprise — can be revived. --- ## [Primary work] Manifesto for Indian Liberals URL: https://indianliberals.in/primary-works/manifesto-1985/ ### Summary The Manifesto for Indian Liberals is a brief programmatic declaration adopted on November 21, 1985 by a conference of Indian liberals assembled at the Royal Bombay Yacht Club in Bombay. It opens by identifying the immediate context — gross violations of human rights and persistent grave tensions threatening peace and democracy — and attributes these conditions to the abandonment of liberal principles. The document affirms that only true democracy, grounded in the free and enlightened consent of the majority with due respect for minorities, can secure the rights and freedoms the manifesto enumerates. Across six sections, the manifesto sets out the core liberal programme. The first section grounds liberal politics in individual sovereignty, affirming personal freedom, freedom of worship and speech, free choice of occupation, the right to property and private enterprise, and equality between men and women. The second warns against the drive toward unhealthy centralisation that has degraded parliamentary institutions and advocates the greatest possible devolution of power, protection of minorities, elimination of racial and oppressive discrimination, and measures against monopolies.… ### Body ## Summary The Manifesto for Indian Liberals is a brief programmatic declaration adopted on November 21, 1985 by a conference of Indian liberals assembled at the Royal Bombay Yacht Club in Bombay. It opens by identifying the immediate context — gross violations of human rights and persistent grave tensions threatening peace and democracy — and attributes these conditions to the abandonment of liberal principles. The document affirms that only true democracy, grounded in the free and enlightened consent of the majority with due respect for minorities, can secure the rights and freedoms the manifesto enumerates. Across six sections, the manifesto sets out the core liberal programme. The first section grounds liberal politics in individual sovereignty, affirming personal freedom, freedom of worship and speech, free choice of occupation, the right to property and private enterprise, and equality between men and women. The second warns against the drive toward unhealthy centralisation that has degraded parliamentary institutions and advocates the greatest possible devolution of power, protection of minorities, elimination of racial and oppressive discrimination, and measures against monopolies. Section III argues for continual democratic renewal through proportional representation, decentralisation to local self-government, and inclusion of civil society bodies in checks and balances. Section IV identifies education as the chief instrument for fighting cultural and political intolerance, and calls for a uniform Civil Code, freedom and pluralism in the media, and promotion of education for both sexes at all ages. The Economic Issues section (V) directly challenges state-dominated planning in India, arguing that three decades of centralised control have produced slow growth, lawlessness, corruption, and a black-market economy. The manifesto advocates a social market economy with limited government, indicative planning only, constant review of public activities for possible return to private enterprise or voluntary organisations, and taxation balanced between individual needs and social investment. It explicitly rejects egalitarianism understood as rigid equality of conditions while strongly supporting equality of opportunity. The concluding section, 'The Test of Character', frames the entire project as a demand for elected representatives with integrity and competence whose motivation is achievement rather than power. ## Key points - Adopted at the Conference of Indian Liberals, Bombay, November 21, 1985; collectively authored, no individual byline. - Grounds liberal politics in individual sovereignty: personal freedom, property rights, free occupation, equality of men and women, and freedom of worship and speech. - Opposes the drift toward centralisation; calls for maximum devolution of power to states and local self-government within the original 1950 Constitution's framework. - Advocates democratic renewal through proportional representation, minority protections, and inclusion of trade unions and professional bodies in checks and balances. - Education identified as the primary weapon against cultural, political, and racial intolerance; demands a uniform Civil Code and media pluralism. - Diagnoses three decades of state-controlled planning as the root of slow growth, corruption, lawlessness, and black-market proliferation. - Calls for a social market economy with indicative planning, constant review of public-sector activities, and taxation that encourages enterprise. - Closes with a character test: liberal progress requires elected representatives motivated by achievement, not power, whose faith lies outside partisan politics. --- ## [Primary work] market-by-the-dock-by-pt-bauer-january-1981 URL: https://indianliberals.in/primary-works/market-by-the-dock-by-pt-bauer-january-1981/ ### Summary The Market in the Dock is the text of a December 19, 1979 lecture by Cambridge-trained development economist P. T. Bauer, then Professor of Economics at the London School of Economics, delivered in Bombay under the auspices of the Forum of Free Enterprise and published as a pamphlet in January 1981. A foreword by Minoo H. Mody, who presided over the lecture, frames Bauer's central provocation: the market economy stands accused not because it has failed but because in much of the Third World it has never been tried. Mody links Bauer's argument to a broader critique of the welfare state, which he calls "the most tragic mistake of the twentieth century", and to the perplexity of governments who cannot reconcile demands for tax cuts with the bloated apparatus of subsidised state activity. Bauer's lecture itself opens by distinguishing predominantly market, centrally planned, and custom-dominated economies, and reminds readers that during the hundred years before the Second World War large parts of Asia, Africa and Latin America made substantial economic progress under market arrangements — well before any organised central planning.… ### Body ## Summary The Market in the Dock is the text of a December 19, 1979 lecture by Cambridge-trained development economist P. T. Bauer, then Professor of Economics at the London School of Economics, delivered in Bombay under the auspices of the Forum of Free Enterprise and published as a pamphlet in January 1981. A foreword by Minoo H. Mody, who presided over the lecture, frames Bauer's central provocation: the market economy stands accused not because it has failed but because in much of the Third World it has never been tried. Mody links Bauer's argument to a broader critique of the welfare state, which he calls "the most tragic mistake of the twentieth century", and to the perplexity of governments who cannot reconcile demands for tax cuts with the bloated apparatus of subsidised state activity. Bauer's lecture itself opens by distinguishing predominantly market, centrally planned, and custom-dominated economies, and reminds readers that during the hundred years before the Second World War large parts of Asia, Africa and Latin America made substantial economic progress under market arrangements — well before any organised central planning. He then catalogues the limitations of markets honestly (they cannot guarantee happiness or universal prosperity) before turning the indictment outward: critics, he argues, treat the market's inherent limits as defects while ignoring that planning does not create resources, only concentrates power, politicises economic life, obstructs the movement of resources to their best uses, and reinforces traditions of authority that already suppress individual self-reliance in the Third World. The bulk of the lecture is an anatomy of where Third World hostility to the market originates: Western and Westernised academics, urban politicians and civil servants who staff opinion-making channels; the authoritarian inheritances of colonial administration; Marxist-Leninist ideology — particularly the doctrine of imperialism — which offers intellectuals both a totalising creed and a path to power; the official international organisations (the UN Secretariat, FAO, UNCTAD, ILO, UNIDO, UNDP, the World Bank, ECAFE, ECA and ECLA) which Bauer charges with propagating myths that international trade damages poor countries; the colonial-era state export monopolies in cocoa, rice, coffee, cotton and oilseeds that successor governments in Ghana, Burma and British Africa inherited, expanded, and used as power bases; and the structural bias of foreign aid, which by definition strengthens the state at the expense of the private sector. He punctures the romantic image of the subsistence economy by noting that famines and the worst epidemic diseases occur there, not in market economies, and closes the rendered pages by observing that both stagnation and rapid market-led advance are used as evidence against the market — "it is always in the dock, more often than not on palpably unfounded charges." ## Key points - Bauer's central thesis, reinforced by Mody's foreword, is that the market economy is in the dock not because it has failed but because in much of the Third World it has never seriously been tried. - Decentralised market prices and incomes coordinate production, consumption and investment voluntarily, whereas centrally planned and socialist economies substitute governmental for individual decisions. - Large parts of South-East Asia, West Africa and Latin America made substantial material progress under market arrangements between the late nineteenth century and the Second World War, refuting Gunnar Myrdal's claim that central planning is indispensable for development. - Central planning, Bauer argues, does not augment resources but only concentrates power, politicises life, obstructs the movement of resources, and reinforces pre-existing authoritarian traditions. - Hostility to the market in the Third World is generated by Western and Westernised intellectuals, by Marxist-Leninist ideology rooted in Lenin's Imperialism: The Highest Stage of Capitalism, and by the doctrine that prosperity in the West has been won at the colonies' expense. - UN agencies (FAO, UNCTAD, ILO, UNIDO, UNDP, World Bank, ECAFE, ECA, ECLA) propagate the view that international trade damages the Third World and that state planning is necessary — and they staff and fund the planning commissions that replace the market. - Colonial-era state export monopolies in cocoa, rice, coffee, cotton and oilseeds — paying producers far less than world prices — were maintained and extended by independent governments and became durable bases of state power in Ghana, Burma and British Africa. - Foreign aid is structurally biased against the market because it flows to governments, strengthens the state sector, and rewards economies with severe payments problems or state-controlled regimes; subsistence economies, contrary to romantic portrayals, are where famines and the worst diseases occur. --- ## [Primary work] MILESTONES & MILLSTONES OF PLANNING URL: https://indianliberals.in/primary-works/milestones-and-millstones-of-planning-by-ma-sreenivasan-january-5-1963/ ### Summary M. A. Sreenivasan's pamphlet, reproduced by the Forum of Free Enterprise from his October 1962 articles in the Economic Times, takes its title from the recognition that Indian planning has yielded as many "millstones" as milestones. Sreenivasan opens on a cautiously hopeful note: the Prime Minister has finally summoned the State Chief Ministers to a conference "to engage themselves in a dispassionate, continuous and systematic study of all that hampers the achievement of best results"—an admission, he argues, that the country's planners and policy-makers can no longer pretend the Plans are working as advertised. Citing Mahatma Gandhi's readiness to admit "a blunder, even if Himalayan," he insists that retracing steps is no failure but a precondition for honest course-correction. The heart of the pamphlet is an inventory of concrete planning pathologies.… ### Body ## Summary M. A. Sreenivasan's pamphlet, reproduced by the Forum of Free Enterprise from his October 1962 articles in the Economic Times, takes its title from the recognition that Indian planning has yielded as many "millstones" as milestones. Sreenivasan opens on a cautiously hopeful note: the Prime Minister has finally summoned the State Chief Ministers to a conference "to engage themselves in a dispassionate, continuous and systematic study of all that hampers the achievement of best results"—an admission, he argues, that the country's planners and policy-makers can no longer pretend the Plans are working as advertised. Citing Mahatma Gandhi's readiness to admit "a blunder, even if Himalayan," he insists that retracing steps is no failure but a precondition for honest course-correction. The heart of the pamphlet is an inventory of concrete planning pathologies. Coal piles unsold at one colliery while factories in the same state shut down for want of fuel; the copper crisis closes a hundred cable factories and shrinks oxygen-cylinder output to one-fifth of need; Postal, Telegraph and Telephone services have decayed into "a national institution for Communications coolly admit in Parliament that something like a hundred thousand telegrams were being sent by post every day." Railways meanwhile divert capacity to ferry VIPs on "Yathras" with private secretaries and Public Works officers in attendance. Concentration of economic decision-making, licence-permit gatekeeping, and the multiplication of controls have, in Sreenivasan's reading, bred corruption, evasion, black-marketing and a steadily lowered "standard of misery." From this diagnosis he draws four Plan priorities: (1) revise the priorities themselves, dropping anything not "essential to keep existing industries alive and working to capacity"; (2) reduce the heavy dependence on foreign loans; (3) concentrate on the infrastructure of progress—railways, posts and telegraphs, but also education and agriculture; and (4) arrest further inflation, treating monetary stability as the precondition for every other reform. Above these sits a fifth, almost constitutional, injunction—"Halt and reverse the drift towards authoritarianism and excessive concentration of power in the hands of the State." The pamphlet closes with a polemical question that has become a Forum signature: a Government that styles itself the world's keenest advocate of unilateral disarmament has armed itself "ceaselessly, unilaterally, against the people—people who placed it in power, instead of placing faith in them and setting them free to work and to prosper." ## Key points - Welcomes the Prime Minister's conference with State Chief Ministers as a long-overdue admission that planning needs dispassionate review, and uses Gandhi's example of admitting blunders to defend retracing steps as statesmanship rather than weakness. - Catalogues concrete planning failures: 90,000 tons of coal stockpiled at one colliery while factories in the same state shut down for lack of fuel; a copper shortage closing roughly a hundred cable factories; oxygen cylinder output at a fifth of need. - Indicts the deterioration of Postal, Telegraph and Telephone services—telegrams travelling by post, trunk calls left unanswered for hours—as a routine, scaled-up cost of state monopoly in communications. - Attacks the apparatus of permits, licences and quotas as the spring of corruption, evasion, black-marketing and "the raising of the standard of misery to the people." - Notes the diversion of scarce rail capacity to ministerial and VIP "Yathras" (pilgrimages) accompanied by retinues of secretaries and officers, as a symptom of misplaced priorities. - Proposes four operational Plan priorities—revise priorities to protect existing industry, reduce foreign-loan dependence, concentrate on infrastructure (transport, communications, education, agriculture), and arrest inflation—plus a constitutional injunction to reverse authoritarian drift. - Argues against any further "engine of taxation or control," warning that constant threats of new measures have produced "a crisis of confidence" and disinvestment from agriculture and plantations alike. - Closes by inverting the Government's pacifist rhetoric: a state that preaches unilateral disarmament should not be arming itself unilaterally against the citizens who elected it. --- ## [Primary work] Mind Vs Mindset : The Grand Indian Challenge URL: https://indianliberals.in/primary-works/mind-vs-mindset-the-grand-indian-challenge-dr-r-a-mashelkar-f-r-s-october-5-2010/ ### Summary This Forum of Free Enterprise booklet reproduces Dr. R. A. Mashelkar's address "Shaping Young Minds — Managing Career Expectations", delivered in August 2008 under the joint auspices of the Lucknow Management Association and the All-India Management Association. Mashelkar, then Chairman of the Governing Council of the National Innovation Foundation and a former Director General of the CSIR, frames India's twenty-first-century challenge as one of "mind versus mindset": the Indian mind has never wanted for intellect — it produced the zero and now lays the foundation of the digital economy — but the Indian mindset, captured in the proverb that two Indians together "neutralize each other", routinely strips that intellect of its multiplier effect. The argument is that demography, democracy and diversity give India structural advantages over China only if institutional and national mindsets are deliberately rebuilt. Mashelkar develops the thesis autobiographically.… ### Body ## Summary This Forum of Free Enterprise booklet reproduces Dr. R. A. Mashelkar's address "Shaping Young Minds — Managing Career Expectations", delivered in August 2008 under the joint auspices of the Lucknow Management Association and the All-India Management Association. Mashelkar, then Chairman of the Governing Council of the National Innovation Foundation and a former Director General of the CSIR, frames India's twenty-first-century challenge as one of "mind versus mindset": the Indian mind has never wanted for intellect — it produced the zero and now lays the foundation of the digital economy — but the Indian mindset, captured in the proverb that two Indians together "neutralize each other", routinely strips that intellect of its multiplier effect. The argument is that demography, democracy and diversity give India structural advantages over China only if institutional and national mindsets are deliberately rebuilt. Mashelkar develops the thesis autobiographically. He tells the story of his rise from an SSC examinee living in Chowpatty on a Tata trust scholarship to Director of the National Chemical Laboratory (1989–1995), where, instead of doing reverse engineering for Indian firms, NCL filed a US patent for a solid-state polycondensation route to polycarbonates and forced General Electric into a knowledge-partnership. The personal narrative carries the institutional message: NCL's mindset shifted from "publish or perish" to "patent, publish and prosper", from reaching the limits of excellence to exceeding them, and from being intermediaries in a domestic market to selling globally. The 1991 liberalisation is treated as a "second freedom" — the parallel case of Tata Motors being permitted to build the Indica (and therefore the Nano) is offered as evidence that the same engineers, freed of the licence-permit mindset, become world-class. The closing sections pivot to a programme for the country. India's three structural Ds — Democracy, Demography and Diversity — must be matched by three Ts — Talent, Technology and Tolerance. Talent is in evidence (Olympics of the Mind, TCS's CBFL functional-literacy software, Medak's literacy gains); technology, especially IT and inclusive science, can lift the bottom of the pyramid; tolerance — of risk, of failure, and crucially of ambiguity — is the missing Silicon Valley ingredient. He insists growth must be "inclusive growth" rooted in innovation that reaches the excluded, citing the National Innovation Foundation's Shodha Yatras and grass-roots innovators such as the eighth-standard dropout schoolboy who built a robot. Mashelkar closes by invoking the Hanuman who learned his powers only when Jambawant reminded him of them: India's 1.2 billion potential Hanumans, he argues, must be told what they can do. The booklet is introduced by Minoo R. Shroff, President of the Forum of Free Enterprise, and is dedicated to the late Shailesh Kapadia (1949–1988) with sponsorship by the Shailesh Kapadia Memorial Trust. ## Key points - Mashelkar distinguishes mind (intellect, analysis, synthesis) from mindset (attitude, approach), arguing India's grand challenge is the latter, not the former. - He retells his career — Chowpatty boyhood, Sir Dorab Tata Trust scholarship, NCL directorship, FRS — as a parable of how an individual ladder of excellence becomes "limitless" only when the mindset changes. - NCL's solid-state polycondensation patent and its R&D partnership with General Electric (Jack Welch) are presented as the institutional inflection from reverse engineering to "forward engineering". - 1991 economic liberalisation is framed as India's "second freedom": the same Tata engineers built the Indica and Nano only after the licensing regime was lifted. - Against China's authoritarian model, India's competitive advantages are the three Ds — Democracy, Demography (over half the population under 25) and Diversity — but only if managed as "unity in diversity". - The prescription for the twenty-first century is the three Ts — Talent, Technology and Tolerance (especially tolerance of failure and ambiguity, the missing Silicon Valley element). - Growth must be inclusive: innovation has to reach the bottom of the pyramid, exemplified by TCS's CBFL adult-literacy software, Medak's literacy turnaround and the National Innovation Foundation's Shodha Yatras. - The booklet is a Shailesh Kapadia Memorial Trust-sponsored Forum of Free Enterprise reprint of an address delivered on 9 August 2008, issued on 5 October 2010 with an introduction by Minoo R. Shroff. --- ## [Primary work] Modern Policing for a Modern India URL: https://indianliberals.in/primary-works/modern-policing-for-a-modern-india-maja-daruwala-june-5-2009/ ### Summary This Forum of Free Enterprise booklet collects two addresses delivered together in Mumbai on 30 January 2009 — by Maja Daruwala, Executive Director of the Commonwealth Human Rights Initiative (CHRI), and by Julio F. Ribeiro, IPS (Retd.), former Police Commissioner of Mumbai and former Director-General of Police, Punjab. Both speakers diagnose Indian policing as a colonial-era institution that has decayed into a politicised, unaccountable instrument and argue that the Supreme Court's September 2006 directions — fixed tenures, a State Security Commission, a Police Establishment Board, Police Complaints Authorities, and separation of investigation from law-and-order — provide a workable template for reform that the Centre and the states are actively subverting. Daruwala lays out the institutional architecture and CHRI's monitoring of state-level compliance; Ribeiro, speaking after her, frames police reform as the citizen's agenda after 26/11, calling on the middle class that voted to also organise around good leadership, operational independence and the elimination of the politician-bureaucrat-police 'partnership' he sees corroding the service. ### Body ## Summary This Forum of Free Enterprise booklet collects two addresses delivered together in Mumbai on 30 January 2009 — by Maja Daruwala, Executive Director of the Commonwealth Human Rights Initiative (CHRI), and by Julio F. Ribeiro, IPS (Retd.), former Police Commissioner of Mumbai and former Director-General of Police, Punjab. Both speakers diagnose Indian policing as a colonial-era institution that has decayed into a politicised, unaccountable instrument and argue that the Supreme Court's September 2006 directions — fixed tenures, a State Security Commission, a Police Establishment Board, Police Complaints Authorities, and separation of investigation from law-and-order — provide a workable template for reform that the Centre and the states are actively subverting. Daruwala lays out the institutional architecture and CHRI's monitoring of state-level compliance; Ribeiro, speaking after her, frames police reform as the citizen's agenda after 26/11, calling on the middle class that voted to also organise around good leadership, operational independence and the elimination of the politician-bureaucrat-police 'partnership' he sees corroding the service. ## Essays ### Modern Policing for a Modern India *By Mrs. Maja Daruwala* Maja Daruwala opens with the claim that a vibrant democracy belongs to the people and therefore requires accessible justice, and narrows her focus from the wider justice system to police reform on the grounds that fixing one large area will create knock-on pressure on the rest. She walks through CHRI's diagnosis: the public perceives the police as inefficient, untrustworthy and corrupt; National Human Rights Commission data show 60–80% of complaints are filed against police; political interference has broken the chain of command; and service conditions, recruitment, training and internal management are all in disrepair. The essay then turns to the constitutional argument that policing in a democracy must be re-grounded — the police are upholders of the law, not mere enforcers of executive will, and must protect liberties and create an environment for free citizens, not just quell rebelliousness as under colonial rule. Daruwala devotes the second half to the Supreme Court's September 2006 directions in the Prakash Singh PIL: fixed tenure and merit-based selection for the police chief through a State Security Commission that includes the opposition; a Police Establishment Board to handle transfers and promotions transparently; and Police Complaints Authorities at state and district levels staffed by civilians independent of serving or retired police officers. She catalogues how states have responded with retrograde legislation that retains the 1861 colonial model, or with sham bodies — Maharashtra has set up a State Security Council under Justice Shri Krishna with over sixty members but no real teeth, and other states have legislated to dilute the Court's orders. She closes with a call to action: Mumbaikars must move beyond demanding more police arms and equipment and instead insist that underlying structures change to make the police responsive to public needs and rights. - Frames a stable democracy as one that delivers accessible justice, and chooses police reform as the leverage point inside the criminal justice system. - Cites NHRC and Transparency International data showing 60–80% of complaints filed are against the police, and notes a recent statute restricting police arrest discretion as evidence of legislative loss of trust. - Argues that the colonial 1861 Police Act model — hierarchical, militaristic, prioritising intelligence over service — is incompatible with a Constitution under which citizens and police are equal subjects of law. - Walks through the Supreme Court's September 2006 directions in the Prakash Singh PIL: State Security Commission, fixed tenure and merit-based selection of the police chief, Police Establishment Board, and state and district Police Complaints Authorities. - Documents widespread state-level non-compliance: retrograde laws that preserve the 1861 model, Police Complaints Authorities packed with serving or retired police, and ornamental bodies like Maharashtra's State Security Council under Justice Shri Krishna. - Closes with a call for organised citizen pressure on government to implement the Court's scheme, not just to demand more equipment after 26/11. ### Modern Policing for a Modern India *By Julio Ribeiro, IPS (Retd.)* Julio Ribeiro picks up where Daruwala leaves off, treating 26 November 2008 as a watershed because, for the first time, the middle class — which usually relies on its own pipelines to bureaucrats and politicians — was forced to care about policing. He argues that most of what Mumbaikars discussed after the attacks was equipment and weapons rather than reform, and insists that the only durable response operates on three fronts: police reform, organising as voters to elect lawmakers who will not pass laws meant to be broken, and disaster-readiness at the neighbourhood level. He calls citizens to lend their signatures and presence to ministers, because ministers only respond when they sense that votes are at stake. Ribeiro's core demand is twofold: choose good leaders, and give them operational independence. He defines operational independence concretely as no political interference in postings, transfers and punishments from Deputy Superintendent down to constable, and argues that the current 'partnership' between corrupt politicians, corrupt bureaucrats and corrupt officers is what the citizenry must break. He also calls for separating the investigation arm from the law-and-order arm so that investigations are conducted under the Bombay Police Act and the rule of law rather than under political control, and recalls his own PIL securing the reversal of reinstatements of dismissed officers. He closes by endorsing the National Police Commission scheme — under Dharma Vira — of a Security Commission with the leader of opposition, a transparent process for selecting the police chief with fixed tenure, and a Police Establishment Board, framing all this as professional accountability to law, people and elected representatives. - Reads 26/11 as a watershed because the middle class, normally insulated by personal pipelines, was forced to engage with policing failure. - Argues the citizens' agenda has three legs: police reforms, organised voting in municipalities, Assemblies and the Lok Sabha to avoid laws that invite breaking, and neighbourhood-level disaster preparedness. - Demands good leadership at the top of the police and concrete operational independence — defined as no political interference in postings, transfers or punishments from Deputy Superintendent down to constable. - Names a 'partnership' between corrupt politicians, corrupt bureaucrats and corrupt police officers as the structural problem, and recalls a PIL in which he successfully challenged the reinstatement of dismissed officers. - Calls for separation of the investigation arm from the law-and-order arm so that investigations operate under the Bombay Police Act and the rule of law, not under political control. - Endorses the National Police Commission framework — Security Commission with the leader of opposition, transparent selection and fixed tenure for the chief, and a Police Establishment Board — as the route to a force accountable to law, people and elected representatives. --- ## [Primary work] Modern Technology for Economic Development URL: https://indianliberals.in/primary-works/modern-technology-for-economic-development-14-june-1976/ ### Summary Prof. S. Sampath, then Deputy Director of the Indian Institute of Technology, Madras, uses the A. D. Shroff Memorial Lecture (delivered 28 October 1975, published by the Forum of Free Enterprise in 1976) to argue that modern science and technology are the decisive levers of economic development and that India must learn to harness them on its own terms. The opening section catalogues the explosive pace of twentieth-century invention — from the Wright brothers and the telephone to Sputnik, the integrated circuit, the electronic computer and the communications satellite — and frames technology not as a smoke-belching factory but as a sequence of self-reinforcing stages of idea, realisation and diffusion that reshape the way humans think about and act on their environment.… ### Body ## Summary Prof. S. Sampath, then Deputy Director of the Indian Institute of Technology, Madras, uses the A. D. Shroff Memorial Lecture (delivered 28 October 1975, published by the Forum of Free Enterprise in 1976) to argue that modern science and technology are the decisive levers of economic development and that India must learn to harness them on its own terms. The opening section catalogues the explosive pace of twentieth-century invention — from the Wright brothers and the telephone to Sputnik, the integrated circuit, the electronic computer and the communications satellite — and frames technology not as a smoke-belching factory but as a sequence of self-reinforcing stages of idea, realisation and diffusion that reshape the way humans think about and act on their environment. Computers, satellites and integrated-circuit electronics are presented as devices that abolish the age of isolation, slash unit costs and put once-elite capabilities within reach of the common man. The second section, 'The Gearing of Technology to Humane Goals', concedes the deleterious side-effects — pollution, centralisation, weaponisation, displacement of labour — and argues that the answer is not to jettison technology but to inject 'a substantial dose of new technology', sensitively appropriated. Sampath surveys the case for alternative or appropriate technologies in energy (wood, hydro-electric, geo-thermal, tidal, wind and solar), housing, sewage and food, citing Robin Clarke on the need to lift technology out of the moral vacuum in which it has long existed. The third section places the argument in the Indian context. Drawing on Indira Gandhi, C. V. Raman, M. G. K. Menon, Vikram Sarabhai and Homi Bhabha, Sampath rejects the post-colonial assumption that growth will follow automatically from importing capital equipment, and instead calls for a judicious blend: build a strong domestic scientific base, adopt frontier techniques in selected high-payoff areas (electronics, communications, defence, medicine, water and energy), and use intermediate technology to lift the bullock-cart economy. He closes by attacking the inherited administrative culture's suspicion of the profit motive, defending profit as 'the motive-power for saving' and the engine of capital formation, and pleading for a civic ethic of competence at every level — 'good scientists and good carpenters; good teachers and good plumbers; and good cabinet ministers and good bus-drivers.' ## Key points - Frames modern technology as a self-reinforcing cycle of idea, realisation and diffusion, accelerating at a pace that doubles scientific output every decade. - Presents the electronic computer, communications satellites and integrated-circuit electronics as instruments that end isolation, lower unit costs and enlarge the reach of the common man. - Concedes serious side-effects — pollution, centralisation, capital-intensity, weaponisation — but rejects deceleration: the cure for bad technology is more, better-directed technology. - Argues for alternative or appropriate technologies in energy (solar, wind, tidal, hydro, geo-thermal), housing, sanitation and food, citing Robin Clarke's case that humane goals lift technology out of its moral vacuum. - Endorses C. V. Raman's quip about bullock-carts and M. G. K. Menon's plea to adopt the most modern techniques in selected fields, advocating a blend of intermediate and frontier technologies. - Reads Vikram Sarabhai's case for an Indian communications satellite as compatible with — not opposed to — rural priorities of roads, schools, hospitals and water. - Invokes Homi Bhabha to insist that foreign technology can only super-charge a domestic engine, never replace it; economic development must be 'an adaptive and assimilative' quest. - Closes with a Forum-of-Free-Enterprise-flavoured defence of the profit motive as the indispensable engine of saving and capital formation, paired with a Gardner-style ethic of competence at every level of work. --- ## [Primary work] MOVING TOWARDS AN EMPOWERED CUSTOMER URL: https://indianliberals.in/primary-works/moving-towards-an-empowered-customer-mrs-usha-thorat-august-8-2007/ ### Summary Delivered on 27 June 2007 at the 3rd M. R. Pai Memorial Award Function in Mumbai and published the following August by the Forum of Free Enterprise, this address by Mrs. Usha Thorat, then Deputy Governor of the Reserve Bank of India, argues that 'customer empowerment' in Indian banking is a two-sided project — institutional design by regulators on one side, an alert and assertive citizenry on the other. Thorat opens with a tribute to M. R. Pai, the consumer activist whose campaigns from the 1970s onward — for the right to nominate, the right to retrieve fraudulently withdrawn money, the right to access a locker before drill-opening, the right to redress for negligent storage — are framed as the moral premise of the talk: 'Unless a citizen knows his rights and is willing to fight to assert them, he has no reason to complain.' The speech is structured in three parts.… ### Body ## Summary Delivered on 27 June 2007 at the 3rd M. R. Pai Memorial Award Function in Mumbai and published the following August by the Forum of Free Enterprise, this address by Mrs. Usha Thorat, then Deputy Governor of the Reserve Bank of India, argues that 'customer empowerment' in Indian banking is a two-sided project — institutional design by regulators on one side, an alert and assertive citizenry on the other. Thorat opens with a tribute to M. R. Pai, the consumer activist whose campaigns from the 1970s onward — for the right to nominate, the right to retrieve fraudulently withdrawn money, the right to access a locker before drill-opening, the right to redress for negligent storage — are framed as the moral premise of the talk: 'Unless a citizen knows his rights and is willing to fight to assert them, he has no reason to complain.' The speech is structured in three parts. The international section surveys the regulatory architecture for fair customer treatment across the United Kingdom (Office of Fair Trading, Financial Services Authority, Financial Ombudsman Service, Banking Code Standards Board), the European Commission (Treaty-level consumer protection and the 'internal market' rules on unfair contract terms, mis-selling, and guarantees), and the United States (Federal Reserve, FDIC, OCC, Office of Thrift Supervision, plus credit-union and FTC overlays). Thorat reads this comparative material as evidence that financial regulation everywhere now rests on two distinct pillars — prudential supervision of institutions, and conduct-of-business protection for customers — and that India must build out the second pillar in parallel with the first. The Indian section catalogues the RBI's recent moves: the Tarapore Committee's May 2004 report on disenfranchisement of the depositor; the revised Banking Ombudsman Scheme of 2006 (RBI-funded, scope expanded to credit-card complaints, sales-agent deficiencies, and code non-adherence); the autonomous self-regulatory Banking Codes and Standards Board of India set up in July 2006, with sixty-seven of eighty-four scheduled commercial banks signed up; the new Customer Service Department at the RBI; comprehensive Credit Card Guidelines (November 2005); a Fair Practices Code for Lenders (2003); a Working Group report (August 2006) on the reasonableness of bank charges across twenty-seven basic banking services; IBA Model Policies on cheque collection, grievance redressal, compensation and security repossession; and the restoration of passbooks and cheque drop-box acknowledgements after evidence that banks were unilaterally curtailing them. Thorat notes that of roughly 44,000 complaints handled in 2006, about 48 per cent were resolved through mutual settlement and 34 per cent were rejected as outside scope or without cause. The third part is a numbered checklist of nineteen practical tips for ordinary customers — read your Code of Bank's Commitment to Customers, understand 'average monthly/quarterly balance', use 'no-frills' accounts, watch ATM and credit-card transactions, protect PINs and CVVs, study Most Important Terms and Conditions, escalate first to the bank's internal grievance officer and only then to the Banking Ombudsman, and approach the Appellate Authority if dissatisfied. The booklet closes with a biographical tribute to M. R. Pai — gold medalist at the University of Madras, biographer of Nani Palkhivala, Secretary and later Vice-President of the Forum of Free Enterprise from 1956 — and prints A. D. Shroff's epigraph that 'Free Enterprise was born with man and shall survive as long as man survives,' alongside Eugene Black's exhortation that private enterprise be accepted 'not as a necessary evil, but as an affirmative good.' ## Key points - Speech delivered on 27 June 2007 by Mrs. Usha Thorat, Deputy Governor of the Reserve Bank of India, at the 3rd M. R. Pai Memorial Award Function in Mumbai, sponsored by Punjab and Maharashtra Cooperative Bank. - Frames financial-sector regulation as two distinct pillars — prudential supervision of institutions and conduct-of-business protection of customers — and argues India is now consciously building out the second pillar. - Surveys international institutional architecture for fair treatment of bank customers: UK (OFT, FSA, FOS, BCSB), European Commission (Treaty-level consumer protection), and US (Federal Reserve, FDIC, OCC, OTS, FTC, National Credit Union Administration). - Catalogues RBI initiatives — Tarapore Committee (May 2004), revised Banking Ombudsman Scheme (2006), Banking Codes and Standards Board of India (July 2006), Customer Service Department, Credit Card Guidelines (November 2005), Fair Practices Code for Lenders (2003), and the Working Group on reasonableness of bank charges (August 2006). - Reports complaint volumetrics: about 44,000 complaints handled in 2006, of which roughly 48% were resolved through mutual settlement, 34% rejected for cause, and awards passed in 88 cases. - Documents IBA Model Policies on Collection of Cheques/Instruments, Grievance Redressal, Compensation, and Collection of Dues and Repossession of Security as benchmarks for individual bank policies. - Closes with a checklist of nineteen practical tips for customers — covering codes of commitment, no-frills accounts, ATM/credit-card vigilance, MITC awareness, internal grievance officers, and escalation paths through the Banking Ombudsman and Appellate Authority. - Pays tribute to M. R. Pai (1922–2003), Forum of Free Enterprise Secretary and biographer of Nani Palkhivala, whose maxim — that a citizen must know his rights and be willing to fight to assert them — sets the polemical frame of the talk. --- ## [Primary work] MONOPOLY CAPITALISM? URL: https://indianliberals.in/primary-works/monopoly-capitalism-january-1-1970/ ### Summary This Forum of Free Enterprise pamphlet reprints, with permission, an analytical article from the April/July 1956 issue of the Tata Quarterly that asks whether the rapid post-Independence expansion of private industry in India amounts to 'monopoly capitalism.' Prefaced by a brief statement of openness from Finance Minister T. T. Krishnamachari, the article defines monopoly narrowly — as a combination of barring entry, eliminating competition, driving out rivals, and curtailing output to raise prices — and then tests that definition against the actual structure of Indian industry during the First Five-Year Plan (1951–56). The author methodically surveys industrial patterns: the small number of operating units in many new chemical and engineering industries; the existence of substantial unutilised capacity (which the article argues reflects optimistic individual planning rather than collusion); the operation of the licensing system under the Industries (Development and Regulation) Act, 1951; and the trends in prices across closely regulated key industries, young protected industries, and old established consumer-goods industries.… ### Body ## Summary This Forum of Free Enterprise pamphlet reprints, with permission, an analytical article from the April/July 1956 issue of the Tata Quarterly that asks whether the rapid post-Independence expansion of private industry in India amounts to 'monopoly capitalism.' Prefaced by a brief statement of openness from Finance Minister T. T. Krishnamachari, the article defines monopoly narrowly — as a combination of barring entry, eliminating competition, driving out rivals, and curtailing output to raise prices — and then tests that definition against the actual structure of Indian industry during the First Five-Year Plan (1951–56). The author methodically surveys industrial patterns: the small number of operating units in many new chemical and engineering industries; the existence of substantial unutilised capacity (which the article argues reflects optimistic individual planning rather than collusion); the operation of the licensing system under the Industries (Development and Regulation) Act, 1951; and the trends in prices across closely regulated key industries, young protected industries, and old established consumer-goods industries. In each case the evidence is read against the test of whether producers, rather than market conditions or government policy, are manipulating supply or prices. The verdict is that the situation in India during this period is one of a 'controlled industry geared to a planned economy,' not a monopolised one. Statutory price controls, tariff inquiries, licensing, succession duties and excise levies all work against monopoly accumulation, while genuine competition persists in jute, sugar, cotton, soap and other staples. The piece concedes that demand pressures and protection give established producers an 'easier reward,' and that government could do more to curb undesirable features, but it argues that calling the organised sector 'monopoly capitalist' clouds analysis and impugns industrialists for conditions created largely by the planning regime itself. ## Key points - Pamphlet reprints a Tata Quarterly (April/July 1956) article under Forum of Free Enterprise imprint, framed by an opening note from Finance Minister T. T. Krishnamachari welcoming constructive criticism. - Defines monopoly as a bundle of unsocial practices — barring new entrants, eliminating competition, driving out rivals, and cutting output to raise prices — and uses this as the test for whether Indian organised industry qualifies. - Surveys the structural state of post-war Indian industry: many young industries with very few units (often 2–35), and significant unutilised capacity in radio receivers, automobiles, bicycles, caustic soda, super-phosphates and diesel engines. - Argues that idle capacity in Indian industry reflects optimistic individual investment plans, war-time shortages and import restrictions — not collusive curtailment — and is therefore the opposite of monopoly behaviour. - Analyses the Industries (Development and Regulation) Act, 1951 licensing regime: of 1,142 applications in 1953–55, 605 were granted, 298 refused and 236 not pursued, with refusals attributed to over-capacity rather than monopoly protection. - Classifies industrial prices into closely regulated key industries (steel, cement, coal, locomotives), young protected industries policed by the Tariff Commission, and old established consumer goods (cotton, sugar, jute, soap) shaped by competitive market forces. - Concludes that statutory price control, tariff scrutiny, high direct and succession taxation, sectional excise duties, and active encouragement of new entrants together rule out the picture of unscrupulous 'acquisitive' capitalists dominating Indian industry. - Acknowledges real defects — protection occasionally enabling 'excessive' ex-works prices, poor workmanship in some young industries, and government's own un-monopolistic but mistaken licensing biases — but treats these as failings of the planning model, not evidence of monopoly capitalism. --- ## [Primary work] MUTUAL FUNDS AND OFFSHORE FUNDS IN INDIA URL: https://indianliberals.in/primary-works/mutual-funds-and-offshore-funds-in-india-s-a-dave-march-19-1991/ ### Summary S. A. Dave's 1991 A. D. Shroff Memorial Lecture opens with an unusually candid intellectual autobiography. As a student of economics in the 1950s, Dave was raised on Marx, Soviet planning and the Mahalanobis model, and saw free enterprise as the cause of India's problems rather than the cure; only over time, watching the planning era fail to deliver, did he come to appreciate the courage it took A. D. Shroff to found the Forum of Free Enterprise in 1956. The lecture is framed as homage to Shroff and to the Unit Trust of India, whose ninety lakh unitholders Dave sees as the living test of an institution built entirely on individual trust. The first half develops a theory of household saving — safety, liquidity and yield — and explains why mutual funds matter for the small saver who lacks the capital to buy a single growth-share trading lot of Rs. 25,000. Dave defends, as a peculiarly Indian innovation, the practice of declaring assured moderate returns at the launching of a scheme, arguing that this 'unconventional practice' is what drew household savings into the equity cult and that no Indian fund has yet failed its assurances. He traces UTI from Shri T. T.… ### Body ## Summary S. A. Dave's 1991 A. D. Shroff Memorial Lecture opens with an unusually candid intellectual autobiography. As a student of economics in the 1950s, Dave was raised on Marx, Soviet planning and the Mahalanobis model, and saw free enterprise as the cause of India's problems rather than the cure; only over time, watching the planning era fail to deliver, did he come to appreciate the courage it took A. D. Shroff to found the Forum of Free Enterprise in 1956. The lecture is framed as homage to Shroff and to the Unit Trust of India, whose ninety lakh unitholders Dave sees as the living test of an institution built entirely on individual trust. The first half develops a theory of household saving — safety, liquidity and yield — and explains why mutual funds matter for the small saver who lacks the capital to buy a single growth-share trading lot of Rs. 25,000. Dave defends, as a peculiarly Indian innovation, the practice of declaring assured moderate returns at the launching of a scheme, arguing that this 'unconventional practice' is what drew household savings into the equity cult and that no Indian fund has yet failed its assurances. He traces UTI from Shri T. T. Krishnamachari's 1963 pitch to Pandit Jawaharlal Nehru through the explosive growth of the eighties — annual sales from Rs. 19 crores in 1964-65 to Rs. 5,569 crores by 1989-90, investible funds crossing Rs. 17,650 crores — and recounts the high-growth experiment that drew over a million US-64 unitholders in a single year. The second half turns to offshore funds, with UTI's India Fund (London, 1986) and India Growth Fund (NYSE, 1988) as the country's first portals to foreign portfolio capital. Dave pays tribute to international fund managers as 'modern day Columbuses' who discovered and 'hardsold' emerging markets to domestic professionals in the developed world who had never before parted with money across borders. He links the rise of country funds to the LDC debt crisis of 1982, the drying up of soft commercial loans, financial globalisation and an Asian growth wave running two to four times the world average; total capitalisation of emerging markets, he notes, grew from USD 81 billion in 1983 to USD 611 billion in 1990. The rendered pages close mid-argument on the 'Prospects and Scope for Newer Funds' — Dave's prediction that Indian mutual funds will continue to grow through the nineties, particularly as nationalised banks, squeezed for deposits, move decisively into the mutual fund business. ## Key points - Dave frames the lecture as an autobiographical conversion narrative: an economics student raised on Marx, Soviet planning and the Mahalanobis model who came, over time, to see free enterprise as the remedy rather than the cause of India's problems. - He positions A. D. Shroff's 1956 founding of the Forum of Free Enterprise as an act of unusual intellectual courage at the high tide of planning orthodoxy. - Mutual funds are defended as the only practical channel for small savers to enter the equity market when a single growth-share trading lot costs more than Rs. 25,000. - He acknowledges that Indian funds' practice of declaring assured moderate returns at launch is unconventional and would be frowned on by regulators abroad, but credits it with mobilising household savings. - UTI's lineage is traced from T. T. Krishnamachari's letter to Nehru to Krishnamachari's later piloting of the UTI Bill, with growth figures (Rs. 19 cr to Rs. 5,569 cr in annual sales; 1.3 lakh to 87 lakh unitholders) presented as vindication. - UTI's US-64 high-growth experiment drew over one million unitholders and Rs. 190 crores in a single year — the largest single-year subscription to any Indian scheme — with strong uptake from economically backward states. - Offshore funds are framed through UTI's India Fund (London 1986) and India Growth Fund (NYSE 1988); international fund managers are valorised as 'modern day Columbuses' of emerging markets. - Dave links the rise of country funds to the 1982 LDC debt crisis, the exhaustion of soft loans, financial globalisation, and the Asian growth wave that lifted emerging-market capitalisation from USD 81 bn (1983) to USD 611 bn (1990). --- ## [Primary work] MYTHS THAT KEEP PEOPLE HUNGRY URL: https://indianliberals.in/primary-works/myths-that-keep-people-hungry-prof-milton-friedman-february-11-1968/ ### Summary Reproducing a 1967 Harper's Magazine essay, Milton Friedman draws on a year of travel with his wife through Eastern Europe, the Middle East, and the Far East to argue that the gap between the intellectual consensus on economic development and what he observed on the ground had become unbridgeable. Wherever Friedman found ordinary people enjoying both freedom and rising material comfort, he found a private market organising economic life; wherever the state had supplanted the market with detailed central planning, he saw political fetters, low living standards, and ordinary people reduced to instruments of state purpose. The 'myths' of the title are the orthodoxies of the development intelligentsia — that planning accelerates growth, that markets cannot mobilise capital, that backward societies need state direction — which Friedman tests against three paired comparisons. The first pair sets the Soviet Union against Yugoslavia: tightly controlled Russia versus a more loosely planned Yugoslavia where private plots covering 3 per cent of cultivated land already produce a third of total agricultural output.… ### Body ## Summary Reproducing a 1967 Harper's Magazine essay, Milton Friedman draws on a year of travel with his wife through Eastern Europe, the Middle East, and the Far East to argue that the gap between the intellectual consensus on economic development and what he observed on the ground had become unbridgeable. Wherever Friedman found ordinary people enjoying both freedom and rising material comfort, he found a private market organising economic life; wherever the state had supplanted the market with detailed central planning, he saw political fetters, low living standards, and ordinary people reduced to instruments of state purpose. The 'myths' of the title are the orthodoxies of the development intelligentsia — that planning accelerates growth, that markets cannot mobilise capital, that backward societies need state direction — which Friedman tests against three paired comparisons. The first pair sets the Soviet Union against Yugoslavia: tightly controlled Russia versus a more loosely planned Yugoslavia where private plots covering 3 per cent of cultivated land already produce a third of total agricultural output. The second pair contrasts Malaysia and Indonesia, the former independent eight years and prospering on free trade, the latter mired in standard-of-living decline and political turmoil. The third pair — the essay's argumentative climax — is the parallel between Meiji-era Japan (1868) and post-independence India (1948). Both societies began with similar handicaps, but Japan converted its rural revenue into productive industry under a free-market, free-trade policy that left ownership and direction in private hands, while India embraced Fabian socialism, five-year plans, exchange controls, licensing, and price controls. The result, Friedman writes, was a Japan that broke out of stagnation and an India whose ordinary people remain stationary or worse off, even as a 'self-confident, strident capitalism' bursts at the seams in places like Ludhiana and the Punjab when controls relent. Friedman closes by reading the divergence as a contest of ideas: mid-nineteenth-century liberalism told Japan's leaders to take free trade and private enterprise for granted, while mid-twentieth-century collectivism told India's leaders to take central planning for granted. He concedes that ideas can outrun reality for a time, but insists they eventually meet the test of evidence — and that the West's comfortable assumption that freedom and affluence are mankind's natural lot is historically false. The booklet ends with a warning that the climate of opinion hostile to market arrangements, if it persists, may push the developing world into a renewed era of universal tyranny and misery. ## Key points - Friedman frames the essay as a report on a 'striking contrast' between facts on the ground in Eastern Europe, the Middle East and the Far East and the ideas about those facts held by Western and local intellectuals. - He treats the private market versus detailed central planning as the master variable explaining differences in freedom and material progress across the countries he visited. - Russia vs. Yugoslavia: 3 per cent of Soviet farmland in private plots produces one third of total agricultural output, while Yugoslavia under looser planning feels 'far from free' yet 'far more affluent' than Russia. - Malaysia vs. Indonesia: free-market Malaysia, only eight years independent, has built a standard of living 'much higher than that of its other neighbours', while planned Indonesia has seen ordinary living conditions deteriorate for two decades. - Japan (1868) vs. India (1948): both began with stagnant economies and a thin layer of trained administrators, but Meiji Japan adopted free trade and private enterprise while independent India adopted Fabian socialism, five-year plans, exchange controls, and licensing. - Friedman concedes Japan's state built railways, ports and pilot plants but stresses that ownership and direction stayed private — most pilot plants were sold off to private firms within a few years. - He cites the Punjab — Ludhiana's 'industrial revolution' of thousands of small workshops — and Indian entrepreneurs who built businesses abroad as evidence that the constraint on Indian growth is policy, not the supply of enterprise. - The closing argument is a contest of ideas: nineteenth-century liberalism shaped Meiji Japan, mid-twentieth-century collectivism shaped Nehruvian India, and the West has 'transmitted a climate of opinion hostile to the market arrangements' on which its own freedom rests. --- ## [Primary work] NATIONALISATION AT THE CROSSROADS URL: https://indianliberals.in/primary-works/nationalisation-and-the-crossroads-prof-amul-desai-apr8-1962/ ### Summary Prof. Amul Desai's lecture, delivered under the auspices of the Forum of Free Enterprise in Bombay on December 19, 1961, surveys the worldwide retreat from nationalisation and argues that India should rethink its commitment to state ownership as an instrument of socialism. Desai opens by historicising Marx: when Das Capital was written, labour had no right to organise or vote, parliamentary democracy was a fiction, and the welfare state did not yet exist — so violent overthrow of the capitalist order appeared to be the only remedy. With trade unionism, social legislation, adult franchise and labour parties returned by ballot, that case has collapsed, and class conflict can no longer be assumed the inevitable corollary of capitalism. The bulk of the booklet is a tour of the international evidence. Burma's U Nu, in an April 1960 address to parliament, formally repudiated nationalisation as a doctrine; Ceylon's Dudley Senanayake declared in March 1960 that nationalisation as an end in itself was something to which his government was 'certainly not wedded'.… ### Body ## Summary Prof. Amul Desai's lecture, delivered under the auspices of the Forum of Free Enterprise in Bombay on December 19, 1961, surveys the worldwide retreat from nationalisation and argues that India should rethink its commitment to state ownership as an instrument of socialism. Desai opens by historicising Marx: when Das Capital was written, labour had no right to organise or vote, parliamentary democracy was a fiction, and the welfare state did not yet exist — so violent overthrow of the capitalist order appeared to be the only remedy. With trade unionism, social legislation, adult franchise and labour parties returned by ballot, that case has collapsed, and class conflict can no longer be assumed the inevitable corollary of capitalism. The bulk of the booklet is a tour of the international evidence. Burma's U Nu, in an April 1960 address to parliament, formally repudiated nationalisation as a doctrine; Ceylon's Dudley Senanayake declared in March 1960 that nationalisation as an end in itself was something to which his government was 'certainly not wedded'. Desai walks through the British, Canadian, Italian, Swedish and Indian experiences to argue that the industries actually nationalised in the West — coal, railways, road and air transport, gas, electricity — were chronically loss-making concerns the private sector had abandoned, not commercially successful enterprises. Where it was tried on ideological grounds, as in Britain's mood of 'intellectual frustration' in the 1930s and 40s, the outcome was operational decline, unfunded compensation burdens, falling investment, and a Labour Party that by the early 1960s was openly rethinking the programme. Applied to India, Desai marshals plan-period figures to show the public sector consistently undershooting its own targets while the private sector overshot — the First Plan delivered roughly 15% of state-sector targets, and Second Plan public investment ran at Rs. 3,100 crores against a target of Rs. 2,400 crores in private investment. He cites the Sindhri Fertiliser Factory and Hindustan Aircraft as exemplars of high salaries, bloated supervisory staff, mounting bad debts and ex-gratia payments at taxpayer expense. Long-term industrial investment, he reports, fell from 65.33% (1945–47) to 22.20% (1950) as the fear of nationalisation set in. Desai closes by drawing on C.A.R. Crosland, R.H.S. Crossman and W. Arthur Lewis — all from within the Labour tradition — to show that ends like full employment, equitable distribution and curbing monopoly can be achieved through taxation, regulation, co-operative ownership, municipal ownership and competition from autonomous state corporations, without resorting to wholesale nationalisation. His verdict: socialism's beauty is the beauty of morning dew, and policy must rest on pragmatism rather than 'blind faith in outmoded dogmas like nationalisation'. ## Key points - Historicises Marx by arguing that adult franchise, trade unionism, welfare-state legislation and labour parties winning power at the ballot box have dissolved the 19th-century premise that nationalisation is the only escape from capitalist exploitation. - Cites Burmese Premier U Nu's April 5, 1960 parliamentary speech and Ceylon Prime Minister Dudley Senanayake's March 26, 1960 declaration as public repudiations of nationalisation by Asian governments that had earlier embraced it. - Reframes Western nationalisation (UK coal, railways, road and air transport, gas, electricity; Canada; Italy; Sweden) as a pragmatic rescue of loss-making industries the private sector had abandoned, not as a socialist victory over thriving capitalism. - Contrasts Indian First Plan public-sector performance (about 15% of target, with Hindustan Aircraft and Sindhri Fertiliser running heavy losses, bloated supervisory expenses and ex-gratia payouts) against a private sector that overshot its Second Plan target by roughly Rs. 700 crores. - Reports that the share of long-term industrial investment fell from 65.33% in 1945–47 to 22.20% by 1950 as the threat of nationalisation 'shattered the confidence of the business and industrial community'. - Marshals Labour-tradition voices — C.A.R. Crosland, R.H.S. Crossman, W. Arthur Lewis — to argue that egalitarian ends can be reached through taxation, co-operative ownership, municipal ownership, and a multitude of small autonomous state corporations competing with private firms, rather than monopoly state ownership. - Endorses competition from state-owned regional life-insurance corporations as an alternative to nationalising existing insurance companies in India. - Closes with a methodological case for pragmatism: policy must measure 'the muddy soil on which it is standing' rather than worship outmoded socialist dogmas. --- ## [Primary work] NATIONALISED INSURANCE URL: https://indianliberals.in/primary-works/nationalised-insurance-policies-and-strategies-for-the-90s-r-k-daruwalla-june-10-1988/ ### Summary Delivered on 28 April 1988 as the annual A. D. Shroff Memorial Trust lecture and published as a booklet by the Trust two months later, R. K. Daruwalla — a former Chairman of the General Insurance Corporation of India who had spent over forty-five years in the insurance industry — uses the platform to argue that the nationalised insurance industry, having matured since the takeovers of 1956 (life) and 1971/72 (general), now needs a structural rethink before the 1990s. His framing is striking for an insider: rather than relitigate the merits of nationalisation, he treats consolidation as its single most significant gain, then turns to why the existing GIC structure — four subsidiaries each writing every class of business — is no longer fit for the decade ahead. The rendered pages cover the booklet's front matter (Trust trustees, Palkhivala's introduction, the biographical tribute to A. D. Shroff) and the first half of the lecture proper, focusing on general insurance. Daruwalla sets out the scale of the industry — gross direct premium of Rs. 184 crores in 1973 rising to roughly Rs. 1,535 crores by 1987, with profits before tax of Rs.… ### Body ## Summary Delivered on 28 April 1988 as the annual A. D. Shroff Memorial Trust lecture and published as a booklet by the Trust two months later, R. K. Daruwalla — a former Chairman of the General Insurance Corporation of India who had spent over forty-five years in the insurance industry — uses the platform to argue that the nationalised insurance industry, having matured since the takeovers of 1956 (life) and 1971/72 (general), now needs a structural rethink before the 1990s. His framing is striking for an insider: rather than relitigate the merits of nationalisation, he treats consolidation as its single most significant gain, then turns to why the existing GIC structure — four subsidiaries each writing every class of business — is no longer fit for the decade ahead. The rendered pages cover the booklet's front matter (Trust trustees, Palkhivala's introduction, the biographical tribute to A. D. Shroff) and the first half of the lecture proper, focusing on general insurance. Daruwalla sets out the scale of the industry — gross direct premium of Rs. 184 crores in 1973 rising to roughly Rs. 1,535 crores by 1987, with profits before tax of Rs. 318 crores, 60,000 employees and nearly 3,000 offices — and projects that premiums could approach Rs. 4,000 crores by the mid-1990s. Against that backdrop he segments the clientele into commercial/industrial, trading and small business, urban personal lines, rural and agricultural, and government, and contends that each segment requires its own organisational vehicle. The core policy recommendation in the rendered pages is to carve specialised companies out of the GIC umbrella: four subsidiaries dedicated to rural and agricultural business (each with a defined territory, drawing on the Vayudoot precedent of a feeder-airline spin-off from Indian Airlines), and a new urban personal-lines company operating from branch offices in residential areas through full-time commission agents rather than salaried development staff. He argues that small-premium personal business, mass rural covers, and high-technology industrial risks each demand different expertise, marketing models and cost structures, and that lumping them together strains the existing companies and dilutes technical depth. The chunk closes by opening the question of whether the GIC itself should absorb specialised classes such as marine hull, off-shore oil, satellite and nuclear risks, and by surveying how the industry has already responded to the Bhopal disaster, terrorist-damage cover, product liability for Indian exporters, and the demand for simpler 'All Risks' policies on the Western model. ## Key points - Daruwalla, writing as a former GIC Chairman, treats the question of nationalisation itself as settled and instead focuses on restructuring the four-subsidiary model the GIC inherited in 1973. - He names consolidation of business and people as the single greatest gain of nationalisation — it gave the industry favourable reinsurance terms abroad and the capacity to retain large risks domestically. - Industry scale figures: gross direct premium of Rs. 184 crores (1973) to Rs. 1,535 crores (1987); investment income Rs. 20 crores to Rs. 289 crores; profits before tax Rs. 35 crores to Rs. 318 crores; ~60,000 employees and ~3,000 offices. - He projects gross direct premium of roughly Rs. 4,000 crores by the mid-1990s, driven by industrial growth, exports, mass rural covers and rising urban personal-insurance awareness. - He segments the market into five clienteles — commercial/industrial, trading and small business, urban personal lines, rural and agricultural, and government — and argues each needs its own organisational structure. - Specific proposal: four new GIC subsidiaries each with a defined territory to handle rural and agricultural business, on the Vayudoot precedent, capitalised so that investment income offsets any underwriting losses. - Specific proposal: a new dedicated urban personal-lines company operating from residential-area branch offices through full-time commission agents, starting in metro cities, to compete alongside (not replace) the existing four companies. - He flags Bhopal, the DCM judgment, export-driven product liability, terrorist-damage cover and the appeal of Western-style 'All Risks' policies as evidence that the industry must move toward simpler, more flexible, consumer-responsive cover wordings. --- ## [Primary work] NATURAL ECONOMIC GROWTH IS VIA AGRICULTURE & CONSUMER GOODS INDUSTRIES URL: https://indianliberals.in/primary-works/natural-economic-growth-is-via-agriculture-and-consumer-goods-industries-by-prof-b-shenoy-august-5-1961/ ### Summary B. R. Shenoy attacks the central premise of India's planning model: that forced industrialisation, weighted toward heavy industry, is the road to prosperity. Reviewing the First Plan and the first three years of the Second, he concedes that industrial output has grown impressively — production rose 68 per cent over the decade, a 7.6 per cent annual rate that exceeded every Asian economy bar Japan, and capital goods such as automobiles, diesel engines and rayon yarn multiplied many times over. But he insists that this growth was 'generally forced or induced' in defiance of comparative cost, sustained by import controls, exchange rationing and quotas that have left consumers paying ransom prices for imported and import-substituting goods alike. Sugar surpluses go unsold because Indian production costs nearly double the world price; Pimpri-manufactured penicillin costs Rs. 2,250 a unit against an import equivalent of Rs. 1.25. The deeper argument is that forced industrialisation has actively harmed the national product.… ### Body ## Summary B. R. Shenoy attacks the central premise of India's planning model: that forced industrialisation, weighted toward heavy industry, is the road to prosperity. Reviewing the First Plan and the first three years of the Second, he concedes that industrial output has grown impressively — production rose 68 per cent over the decade, a 7.6 per cent annual rate that exceeded every Asian economy bar Japan, and capital goods such as automobiles, diesel engines and rayon yarn multiplied many times over. But he insists that this growth was 'generally forced or induced' in defiance of comparative cost, sustained by import controls, exchange rationing and quotas that have left consumers paying ransom prices for imported and import-substituting goods alike. Sugar surpluses go unsold because Indian production costs nearly double the world price; Pimpri-manufactured penicillin costs Rs. 2,250 a unit against an import equivalent of Rs. 1.25. The deeper argument is that forced industrialisation has actively harmed the national product. Resources have been pulled out of agriculture and light industry — sectors with low capital-output ratios and quick employment payoffs — into heavy plants that yield neither output nor jobs in the short run. Shenoy estimates that during the First Plan and the early Second, agricultural investment produced output increases of 57 to 69 per cent of capital invested, while heavy-industry additions came in at 14 per cent or less; rough calculations suggest that 500 workers in consumer-goods industries plus 4,000 in agriculture and household industries can substitute for the 1,150 workers in heavy industry that current Plan priorities support. National product has grown at only 2.9 per cent a year when 8 to 10 per cent was achievable under a different allocation. Shenoy closes with a historical claim and a policy prescription. Every successful industrial revolution, he argues, has been preceded by an agricultural revolution and the spread of lighter industries — these generate broad-based demand and reliable surpluses that pull heavier industries up behind them. India has inverted this sequence and produced 'topsy-turvy' growth that 'must inherently render the Indian economy more and more vulnerable'. The remedy is not more planning of the same kind but a basic policy reorientation that puts agriculture and consumer goods first. The leaflet reproduces a Times of India piece of 8 June 1961 and is issued by the Forum of Free Enterprise, with the standard disclaimer that the views are the author's alone. ## Key points - Industrial output grew 68 per cent over the decade (7.6 per cent annual rate), outpacing every Asian economy bar Japan, but Shenoy treats this as forced rather than natural growth. - Heavy-industry expansion was driven by import compression — private imports fell from Rs. 812 crores in 1956-57 to Rs. 505 crores in 1958-59 — and by rationing that delivers monopoly rents to domestic producers. - Price comparisons reveal severe inefficiency: Indian sugar Rs. 700 vs world Rs. 400 per ton, Pimpri penicillin Rs. 2,250 vs imports at Rs. 1.25, Sindri fertiliser priced below world levels only because of state direction. - Forced industrialisation has been a net drag on the national product because resources diverted from agriculture and light industry produce more output and employment per rupee than heavy plants. - Estimated capital-output ratios during the First and early Second Plans: agriculture 57-69 per cent, cement/iron/steel/textiles only 2-14 per cent of investment recovered as added output in the first Plan period. - Employment arithmetic: 500 workers in consumer-goods industries plus 4,000 in agriculture and household industries can substitute for 1,150 in heavy industry, at lower real cost and shorter payoff. - Historical generalisation: agricultural revolutions have preceded industrial revolutions everywhere; lighter industries seed the demand that pulls heavier industries forward. - Policy prescription: India has reversed the natural sequence; modernisation requires basic reorientation toward agriculture and consumer goods rather than further forcing of heavy industry. --- ## [Primary work] A New Approach to Overcome Constraints on Private Sector URL: https://indianliberals.in/primary-works/new-approach-to-overcome-constraints-on-private-sector-by-rd-aga-1980/ ### Summary Delivered at the Eleventh Annual Convention of the Bombay Management Association on 3rd December 1980 and reissued as a Forum of Free Enterprise pamphlet, R. D. Aga's address recasts the standard Indian industrialist's grievance list — MRTP, FERA, licensing, price controls, FERA, labour and tax law — as a self-defeating monologue. Aga, chairman and managing director of Thermax (India), opens by distinguishing the entrepreneur from the administrator: the administrator treats boundary conditions as given, while the entrepreneur stretches them. From this distinction he argues that the post-1950 Indian preoccupation with external constraints, far from being an honest diagnosis, has become a cultural reflex that crowds out the search for opportunities. The argument is then made empirically. Drawing on the Assocham Parliamentary Digest's data for the twenty largest industrial houses under MRTP Section 26 (1972–78) and on Bombay Stock Exchange data for twelve large multinationals under FERA (1972–79), Aga shows wide dispersion in asset growth, turnover and profit before tax within both groups — from declines and losses at the bottom to gains of 200–300 per cent at the top.… ### Body ## Summary Delivered at the Eleventh Annual Convention of the Bombay Management Association on 3rd December 1980 and reissued as a Forum of Free Enterprise pamphlet, R. D. Aga's address recasts the standard Indian industrialist's grievance list — MRTP, FERA, licensing, price controls, FERA, labour and tax law — as a self-defeating monologue. Aga, chairman and managing director of Thermax (India), opens by distinguishing the entrepreneur from the administrator: the administrator treats boundary conditions as given, while the entrepreneur stretches them. From this distinction he argues that the post-1950 Indian preoccupation with external constraints, far from being an honest diagnosis, has become a cultural reflex that crowds out the search for opportunities. The argument is then made empirically. Drawing on the Assocham Parliamentary Digest's data for the twenty largest industrial houses under MRTP Section 26 (1972–78) and on Bombay Stock Exchange data for twelve large multinationals under FERA (1972–79), Aga shows wide dispersion in asset growth, turnover and profit before tax within both groups — from declines and losses at the bottom to gains of 200–300 per cent at the top. If external constraints applied uniformly to all units in a category, he reasons, performance variance this large can only be explained by what management does inside the firm. He develops this into four propositions: that mindset matters more than the constraint, that intra-industry variance reveals the secondary role of constraints, that strategic response to environment distinguishes the high-flyer from the also-ran, and that for smaller firms internal management decides growth more than external policy does. A long autobiographical section walks through Thermax's growth from a small-scale boiler unit in 1966 to a three-company group with Rs. 30 crores turnover and 1,500 employees by 1980. The 'critical areas' that required management attention, Aga insists, had nothing to do with government: finance, the learning curve in new technology, organisation structure as the firm grew from single-product to multi-product, and the motivation of people as the company moved from a compact group to a formalised hierarchy. The closing pages widen the indictment of the licensing regime — it has, in his phrase, bred a 'sheltered economy' culture of waste, obesity, evasion of the law and customer apathy — and propose replacing classical economics' 'Economic Man', who reacts only to profit and survival, with a 'Professional Man' who upholds standards out of competence rather than competitive compulsion. The pamphlet ends with a rhetorical device: an 'Imaginary Address by the President of an industrial and trade apex body' to a cabinet minister chief guest, breaking with the genre's traditional litany of complaint to offer partnership in delivering the Sixth Five-Year Plan and lifting the standard of life of 600 million Indians. ## Key points - Aga frames the entrepreneur as one who stretches boundary conditions while the administrator merely operates within them — the difference between fault-finding and target-setting. - Indian industry's habitual catalogue of woes (MRTP, FERA, licensing, price controls, power, credit) is, in Aga's view, a 30-year monologue of negativism that has proved 'self-fulfilling'. - Empirical evidence from the 20 MRTP houses (1972–78) and 12 large FERA multinationals (1972–79) shows growth dispersion so wide — from losses to 200%+ gains — that external constraints cannot be the dominant limiting factor. - The four critical management challenges in Aga's own company, Thermax, were internal: finance, the learning curve on new technology, evolving organisation structure, and motivation in a growing firm. - Industrial licensing has, beyond its direct economic costs, bred 'a whole new business and social culture' of waste, evasion and customer apathy that has acted as 'an insidious opiate' on the private sector. - Aga proposes replacing the 'Economic Man' of classical doctrine with a 'Professional Man' whose standards are warranted by competence and commitment, not by the invisible hand. - The closing 'Imaginary Address' offers a cabinet minister partnership in implementing the Sixth Five-Year Plan, dropping the traditional litany of complaint in favour of placing the private sector's 'reservoir of talent' at the government's disposal. --- ## [Primary work] NEW COMPANY TAX SCHEME HITS SHAREHOLDERS URL: https://indianliberals.in/primary-works/new-company-tax-scheme-prof-r-j-taraporevala-feb8-1960/ ### Summary Prof. Russi Jal Taraporevala's pamphlet, issued by the Forum of Free Enterprise on 8 February 1960 and reproduced from the Capital Annual of 1959, is a technical assessment of the radical streamlining of Indian company taxation introduced by the Finance Act, 1959. Taraporevala opens by contrasting the old regime — under which companies were subject to seven different direct taxes (income tax with surcharge, corporation tax, excess dividends tax, wealth tax, capital gains tax, the Section 23A penal super-tax, and the bonus issue tax) and where 'grossing' of dividends produced a cumbersome and unpredictable effective rate — with the new scheme that consolidates direct taxation into income tax at 20 percent and corporation tax at 25 percent of assessed profits, and abolishes the excess dividends tax, the wealth tax on companies and the practice of grossing up dividends. The author welcomes the reform 'in principle' as a long overdue rationalisation, but devotes most of the booklet to a granular analysis of who actually gains and who loses.… ### Body ## Summary Prof. Russi Jal Taraporevala's pamphlet, issued by the Forum of Free Enterprise on 8 February 1960 and reproduced from the Capital Annual of 1959, is a technical assessment of the radical streamlining of Indian company taxation introduced by the Finance Act, 1959. Taraporevala opens by contrasting the old regime — under which companies were subject to seven different direct taxes (income tax with surcharge, corporation tax, excess dividends tax, wealth tax, capital gains tax, the Section 23A penal super-tax, and the bonus issue tax) and where 'grossing' of dividends produced a cumbersome and unpredictable effective rate — with the new scheme that consolidates direct taxation into income tax at 20 percent and corporation tax at 25 percent of assessed profits, and abolishes the excess dividends tax, the wealth tax on companies and the practice of grossing up dividends. The author welcomes the reform 'in principle' as a long overdue rationalisation, but devotes most of the booklet to a granular analysis of who actually gains and who loses. Drawing on a statistical comparison (the table on page 8) of total taxes, net dividends and gross dividends under the old and new schemes, he shows that companies distributing all their after-tax profits as dividends will see total tax burdens rise between roughly 9 and 22 percent, with net cash dividends falling between 11 and 21 percent. Ordinary shareholders — particularly of companies with large past reserves grossed up at the full rate — lose the credit they would previously have received in their personal assessments; preference shareholders and inter-corporate investors are hit hardest, with gross dividend income on intra-group holdings covered by Section 56A falling by as much as 32 to 35 percent. Taraporevala is sharply critical of Section 23A, which he says still impedes industrial growth by discouraging companies from ploughing back profits, and of the bonus issue tax, which the Finance Act 1959 has actually widened by withdrawing the exemption for bonus shares issued from share-premium accounts. He treats this retention as the 'most deplorable step' in the reform, citing Nicholas Kaldor, the Indian Taxation Enquiry Commission, the British Royal Commission on the Taxation of Profits and Income, and the NCAER as authorities who have condemned the levy in principle. He closes by recommending that the total rate of income tax and corporation tax be fixed between 35 and 40 percent of gross profits, that ad hoc relief be granted for dividends paid out of past taxed profits, that Section 23A and the bonus issue tax be abolished, and that ultimately a single non-refundable flat tax on gross corporate profits replace the entire structure — a goal he hopes Finance Minister Morarji Desai will continue to pursue. ## Key points - The Finance Act, 1959 radically simplifies Indian company taxation by replacing seven overlapping direct taxes with income tax at 20 percent and corporation tax at 25 percent of assessed annual profits. - The cumbersome 'grossing' of dividends, which made the effective rate of tax on shareholders depend on the composition of company income and delayed assessments throughout the system, is abolished for accounting years ending after 31 March 1959. - Although the excess dividends tax and the wealth tax on companies are eliminated, ordinary shareholders lose the credit previously received for grossing up dividends paid out of past taxed profits or reserves. - A statistical comparison (page 8) shows total tax burdens rising between 8.8 and 19.4 percent, and gross dividends falling between 2.1 and 22.3 percent, depending on a company's historical tax profile. - Inter-corporate investments are hit hardest: individual shareholders may suffer a 30-35 percent loss of gross dividend income on holdings in companies covered by Section 56A of the Indian Income Tax Act. - Section 23A's penal super-tax on closely held companies, though marginally relaxed, still penalises ploughing back of profits and impedes industrial growth. - The retention and widening of the bonus issue tax — now extended to bonus shares issued from share premium accounts — is condemned as economically unjustified and contrary to the recommendations of Kaldor, the Indian Taxation Enquiry Commission and the Royal Commission on the Taxation of Profits and Income of Britain. - Taraporevala recommends a single flat non-refundable tax on gross corporate profits between 35 and 40 percent, ad hoc relief for dividends paid from past reserves, and abolition of Section 23A and the bonus issue tax. --- ## [Primary work] NEW INDUSTRIAL POLICY URL: https://indianliberals.in/primary-works/new-industrial-policy-minoo-r-shroff-march-14-1978/ ### Summary Minoo R. Shroff's public lecture, delivered under the auspices of the Forum of Free Enterprise on 27 February 1978 and issued as a Forum booklet, reads the Janata government's December 1977 industrial policy statement against the November 1977 economic policy of the ruling party. Shroff finds the document a 'mixture of politics and economics' that breaks no radical ground from the 1948 and 1956 industrial resolutions but does abandon built-in ideological bias, rejecting both capitalism and communism in favour of a Gandhian framework that decentralises the economic apparatus and lifts agriculture, rural development and cottage and village industry to the centre of planning. Shroff walks through the policy's four-part architecture — a sharply expanded small-scale reservation (504 items, up from about 180), a residual large-scale sector hemmed in by the MRTP Act and forced to rely on internally generated resources, an expanding public sector charged with stabilising essential supplies, and a technology policy that allows imports only where domestic capability is inadequate. He grants the political logic of a labour-intensive thrust (citing Finance Minister H. M.… ### Body ## Summary Minoo R. Shroff's public lecture, delivered under the auspices of the Forum of Free Enterprise on 27 February 1978 and issued as a Forum booklet, reads the Janata government's December 1977 industrial policy statement against the November 1977 economic policy of the ruling party. Shroff finds the document a 'mixture of politics and economics' that breaks no radical ground from the 1948 and 1956 industrial resolutions but does abandon built-in ideological bias, rejecting both capitalism and communism in favour of a Gandhian framework that decentralises the economic apparatus and lifts agriculture, rural development and cottage and village industry to the centre of planning. Shroff walks through the policy's four-part architecture — a sharply expanded small-scale reservation (504 items, up from about 180), a residual large-scale sector hemmed in by the MRTP Act and forced to rely on internally generated resources, an expanding public sector charged with stabilising essential supplies, and a technology policy that allows imports only where domestic capability is inadequate. He grants the political logic of a labour-intensive thrust (citing Finance Minister H. M. Patel's caveat that 'wasteful techniques' must not be used merely because they employ more people) but rejects the proposition that 7-8 million new jobs can come from the small-scale sector alone, calling the assumption 'fallacious' and arguing employment growth must be tackled outside industry. The sharper polemic concerns the model itself. Shroff defends the modern-technology choice India made in the 1950s and early 1960s — which placed her among the ten most industrialised nations and built a diversified export base and capital-goods capability — and warns against the China analogy, noting that fifteen years of small-scale rural concentration there 'put the clock back in terms of industrial progress'. He marshals Annual Survey of Industries data, Economic Times tables on corporate capital formation for 101 large and medium companies, and the 22 January 1978 white paper on national income (private corporate net capital formation halved in 1976-77; savings fell from Rs. 314 crores to Rs. 116 crores) to argue that unrealistic pricing, heavy corporate taxation and historical-cost depreciation have eroded the very large houses now expected to finance new capacity. Shroff closes with a procedural verdict rather than an ideological one: policy pronouncements and good intentions count for little without the political will, administrative vigour and orchestration of governmental machinery to convert them into reality — an outcome, he says, 'yet to be demonstrated'. ## Key points - Frames the December 1977 industrial policy as a 'mixture of politics and economics' that must be read alongside the Janata Party's November 1977 economic policy statement. - Identifies the only real departure from the 1948 and 1956 resolutions as the absence of built-in ideological bias — the new statement rejects capitalism and communism and stands 'squarely for Gandhian economic thought and philosophy'. - Documents the expanded small-scale reservation (504 items vs. ~180 earlier), the special focus on tiny units (investment up to Rs. 1 lac in towns under 50,000), and the licensing/MRTP constraints placed on larger houses, including the expectation that expansion be financed from internally generated resources. - Quotes Finance Minister H. M. Patel acknowledging that labour-intensive techniques must not become a euphemism for 'wasteful' ones, and that strategy must weigh social cost against private-cost calculations. - Marshals 1975-76 Annual Survey of Industries figures showing organised-sector industrial employment of 4.56 million with virtually no growth over four years; capital per employee of Rs. 4,500 (small), Rs. 17,250 (medium) and Rs. 33,395 (large); and employee-productivity growth of 3.5% in large-scale versus 1.7% in small-scale. - Rejects as 'fallacious' the assumption that 7-8 million new industrial jobs can be created in a decade by extrapolating recent small-scale growth, arguing the bulk of employment generation must occur outside industry. - Defends India's 1950s-60s choice of modern-technology industrialisation and invokes the Chinese experience — fifteen years of small-scale rural concentration that 'put the clock back in terms of industrial progress' — as a cautionary example. - Uses Economic Times capital-formation data for 101 large/medium private corporates and the 22 January 1978 white paper (net private corporate capital formation halved 1975-76 to 1976-77; savings fell from Rs. 314 crores to Rs. 116 crores) to argue pricing, taxation and depreciation policy must change if large houses are to fulfil the role assigned to them. - Closes with an administrative verdict: policy pronouncements are inert without political will and a governmental machinery that 'orchestrates as a team' — something 'yet to be demonstrated'. --- ## [Primary work] NEW TAXATION PROPOSALS URL: https://indianliberals.in/primary-works/new-taxation-proposals-january-1-1970/ ### Summary In this Forum of Free Enterprise pamphlet, banker and classical-liberal commentator A. D. Shroff dissects Finance Minister T. T. Krishnamachari's mid-year tax proposals of 30 November 1956, introduced to plug the widening gap in financing the Second Five-Year Plan. Shroff opens by setting out the deteriorating economic background: the rapid depletion of India's sterling balances from Rs. 542 crores to a withdrawable balance of Rs. 142 crores within a year, the heavy import bill created by capital projects under the Plan, rising prices of foodgrains and cloth, and the freight and insurance shock from the closure of the Suez Canal. Against this background, he argues, the Government has finally been forced to admit that the Plan, originally pegged at Rs. 4,800 crores in the public sector, will now require Rs. 5,300 crores and roughly Rs. 1,300 crores of additional taxation rather than the Rs. 400 crores first envisaged. The Plan, he concludes, was 'so formulated that it was not related to the realities of the situation in our economy.' The speech then takes each new direct tax in turn.… ### Body ## Summary In this Forum of Free Enterprise pamphlet, banker and classical-liberal commentator A. D. Shroff dissects Finance Minister T. T. Krishnamachari's mid-year tax proposals of 30 November 1956, introduced to plug the widening gap in financing the Second Five-Year Plan. Shroff opens by setting out the deteriorating economic background: the rapid depletion of India's sterling balances from Rs. 542 crores to a withdrawable balance of Rs. 142 crores within a year, the heavy import bill created by capital projects under the Plan, rising prices of foodgrains and cloth, and the freight and insurance shock from the closure of the Suez Canal. Against this background, he argues, the Government has finally been forced to admit that the Plan, originally pegged at Rs. 4,800 crores in the public sector, will now require Rs. 5,300 crores and roughly Rs. 1,300 crores of additional taxation rather than the Rs. 400 crores first envisaged. The Plan, he concludes, was 'so formulated that it was not related to the realities of the situation in our economy.' The speech then takes each new direct tax in turn. The extension of the penal super-tax on undistributed dividends — first introduced in the previous Finance Minister C. D. Deshmukh's last budget and now made heavier — is condemned as a misreading of how industry actually accumulates capital. Calculating dividend obligations against paid-up capital rather than capital actually employed punishes precisely the prudent reinvestment of profits that built firms like Tata Chemicals over decades, and the harsh operation of Section 23A of the Income Tax Act risks crushing the very small and medium companies the country needs to encourage. The revived Capital Gains Tax draws an equally hostile reading: Shroff recalls that Liaquat Ali Khan had introduced it in 1947 and withdrawn it two years later for raising negligible revenue, and warns that taxing inflation-driven gains amounts to a levy on the capital base itself. Subjecting the compensation paid on nationalisation to capital-gains tax he calls 'most inequitable.' The third and 'most serious' proposal — compulsory deposit, requiring every company to lodge 25% of accumulated reserves and 75% of current surplus profits with the Government — is described as a 'forced loan' likely to provoke a serious monetary crisis and to apply, despite the Finance Minister's assurances, even to banks, insurance companies and investment houses. Shroff also flags the more technical but telling proposal to raise the stamp duty on Bills of Exchange eighty-fold, warning that the cost will pass straight into higher borrowing rates through the Usance Bill mechanism and burden the public at large. Drawing every strand together, he reads the whole package as evidence of 'a definite and confirmed trend towards a gradual disappearance of democracy in the economic field' — achieved less by overt nationalisation than by the insidious diversion of resources from the private sector to the public sector. The pamphlet closes on the warning that an authoritarian regime is being built up by 'depriving the private sector of the resources that it has collected in the past.' ## Key points - Speech delivered to the Democratic Group in Bombay on 30 November 1956, reacting to Finance Minister T. T. Krishnamachari's mid-year tax package and republished by the Forum of Free Enterprise. - Documents the collapse of sterling balances from Rs. 542 crores to a withdrawable Rs. 142 crores and the reluctant admission that the Second Plan would need Rs. 5,300 crores of public-sector outlay and roughly Rs. 1,300 crores of fresh taxation, not the Rs. 400 crores first laid down. - Argues that the Second Plan 'was so formulated that it was not related to the realities of the situation in our economy', and that the resources and capacity to collect them simply do not exist. - Critiques the extension of the penal super-tax on undistributed dividends as wrongly basing dividend obligations on paid-up capital rather than capital actually employed, thereby penalising prudent reinvestment that has built firms like Tata Chemicals. - Calls for amending Section 23A of the Income Tax Act into three categories — investment, manufacturing and purely family-investment companies — so that small businesses and the first years of new industries are spared penal taxation. - Reads the revived Capital Gains Tax as a tax on inflation-driven gains and the capital base itself, recalling Liaquat Ali Khan's short-lived 1947 levy and condemning the application of the tax to compensation paid on nationalisation as 'most inequitable'. - Describes the compulsory-deposit proposal — 25% of accumulated reserves and 75% of current surplus profits to be lodged with Government — as a 'forced loan', the 'severest blow to the private sector', and likely to apply even to banks and insurers despite the Finance Minister's reassurances. - Reads the cumulative package, together with the proposed eighty-fold increase in stamp duty on Bills of Exchange, as a deliberate diversion of resources from the private to the public sector and a step toward an authoritarian economic order. --- ## [Primary work] NO VERVE IN BUDGET PROPOSALS URL: https://indianliberals.in/primary-works/no-verve-in-budget-proposals-by-hp-raina/ ### Summary Ranina opens with a diagnosis of the Indian economy of 1984 — uncontrollable prices, a stagnant industrial sector, dwindling foreign exchange reserves, the spreading cancer of black money and tax evasion, a flatulent public sector, labour indiscipline, and decaying infrastructure — and argues that the Finance Minister's Budget proposals do nothing to revive industry or to meet the 9 per cent growth target fixed under the Seventh Five-Year Plan. The pamphlet then walks the reader through the Finance Bill, 1984, in three parts: provisions affecting industry, provisions affecting individuals, and miscellaneous provisions. On industry, Ranina attacks the persistence of depreciation on historical cost when replacement cost is roughly three times original cost, and proposes either a tax-payer surcharge route or depreciation on double the original cost. He criticises the abolition of weighted deductions under sections 35(2-A), 35(2-B) and 36(1)(ii-a) for scientific research and for salaries paid to blind or physically disabled employees; the discontinuance of the rehabilitation allowance under section 33-B; and the withdrawal of the agricultural-extension deduction under section 35-C.… ### Body ## Summary Ranina opens with a diagnosis of the Indian economy of 1984 — uncontrollable prices, a stagnant industrial sector, dwindling foreign exchange reserves, the spreading cancer of black money and tax evasion, a flatulent public sector, labour indiscipline, and decaying infrastructure — and argues that the Finance Minister's Budget proposals do nothing to revive industry or to meet the 9 per cent growth target fixed under the Seventh Five-Year Plan. The pamphlet then walks the reader through the Finance Bill, 1984, in three parts: provisions affecting industry, provisions affecting individuals, and miscellaneous provisions. On industry, Ranina attacks the persistence of depreciation on historical cost when replacement cost is roughly three times original cost, and proposes either a tax-payer surcharge route or depreciation on double the original cost. He criticises the abolition of weighted deductions under sections 35(2-A), 35(2-B) and 36(1)(ii-a) for scientific research and for salaries paid to blind or physically disabled employees; the discontinuance of the rehabilitation allowance under section 33-B; and the withdrawal of the agricultural-extension deduction under section 35-C. He warns that reductions in the foreign-technology and inter-corporate dividend deductions under sections 80-N, 80-O and 80-M will retard technology imports and discourage subsidiary formation, even as the Bill raises ceilings on managerial remuneration under sections 40(c) and 40-A(5). On individuals, Ranina credits the Finance Minister for cutting personal income-tax rates but calls the doubled wealth-tax exemption on houses (Rs.1 lakh to Rs.2 lakhs) almost meaningless after Rule 1-BB, and condemns the retrospective abolition of section 80-CC (equity investment relief) and the withdrawal of section 80-D medical-treatment deductions. He welcomes the expansion of section 80-L to National Deposit Scheme deposits and bank deposits, and the procedural relaxation of TDS on small interest and dividend receipts. On miscellaneous provisions, he supports the new compulsory tax audit for businesses above Rs.20 lakh turnover and professions above Rs.10 lakh, and analyses the new prohibition (with criminal penalty) on cash loans and deposits of Rs.10,000 or more. His conclusion is that the proposals merely make cosmetic changes and would do nothing to solve inflation, unemployment, or the foreign exchange crisis — the Budget should have been tailored to the Seventh Plan rather than to the forthcoming elections. ## Key points - Frames the 1984 economic scenario around three weaknesses — uncontrollable prices, a stagnant industrial sector and dwindling foreign exchange reserves — and argues the Finance Minister has left them untouched. - Attacks depreciation on historical cost when replacement cost is roughly three times original cost; proposes either a tax-payer surcharge write-off or depreciation on double the original cost to ensure asset replacement. - Criticises the proposed abolition of weighted-deduction provisions under sections 35(2-A), 35(2-B) and 36(1)(ii-a) of the Income-tax Act and the discontinuance of the rehabilitation allowance under section 33-B and the section 35-C agricultural-extension deduction. - Warns that the cut in sections 80-N, 80-O and 80-M deductions (from 100 to 50 or 60 per cent) will retard technology imports, foreign-exchange earnings and the formation of priority-industry subsidiaries. - Calls the doubling of the wealth-tax exemption for houses from Rs.1 lakh to Rs.2 lakhs almost meaningless after Rule 1-BB collapsed residential valuations, and condemns the retrospective abolition of section 80-CC equity-investment relief and the withdrawal of the section 80-D medical-treatment deduction. - Supports the new compulsory tax audit obligation for businesses with turnover above Rs.20 lakhs and professions above Rs.10 lakhs as being in the best interest of taxpayers and the revenue administration. - Examines the new section debarring loans or deposits of Rs.10,000 or more otherwise than by account-payee cheque, with penalties of up to two years' imprisonment, as a device to curb the laundering of unaccounted cash. - Concludes that the provisions are cosmetic, will not address inflation, unemployment or foreign exchange depletion, and that the Budget should have been tailored to the Seventh 5-Year Plan rather than to the forthcoming elections. --- ## [Primary work] Nurturing Management Talent in India URL: https://indianliberals.in/primary-works/nurturing-management-talent-in-india-kumar-mangalam-birla/ ### Summary Kumar Mangalam Birla's pamphlet — based on his acceptance speech for the Bombay Management Association's "Management Man of the Year" Award (26 May 2000) — argues that talent, rather than capital, scale, technology, or labour in the conventional sense, has become the dominant strategic resource of contemporary business. Borrowing John Gardner's typology of "pathfinders and path preservers," Birla redefines managerial talent as a composite of intellectual range, emotional intelligence, creativity, willingness to learn, and the ability to straddle functional, cultural, and geographic boundaries. He attributes the present urgency to a global supply-demand imbalance for such people, a generational appetite for entrepreneurial autonomy, the diffusion of decision-making to every level of complex organisations, and rising business complexity that places a premium on integrated, non-linear thinking. Birla then turns to India's specific position.… ### Body ## Summary Kumar Mangalam Birla's pamphlet — based on his acceptance speech for the Bombay Management Association's "Management Man of the Year" Award (26 May 2000) — argues that talent, rather than capital, scale, technology, or labour in the conventional sense, has become the dominant strategic resource of contemporary business. Borrowing John Gardner's typology of "pathfinders and path preservers," Birla redefines managerial talent as a composite of intellectual range, emotional intelligence, creativity, willingness to learn, and the ability to straddle functional, cultural, and geographic boundaries. He attributes the present urgency to a global supply-demand imbalance for such people, a generational appetite for entrepreneurial autonomy, the diffusion of decision-making to every level of complex organisations, and rising business complexity that places a premium on integrated, non-linear thinking. Birla then turns to India's specific position. He treats English-language facility, numerical aptitude, an innate capacity to adapt, and an intensely competitive culture (from nursery-school interviews to the Civil Service) as endowments that have already produced a globalised cohort of Indian professionals in IT, engineering, and finance. Against this he places three retarding forces: a social stigma around failure that suppresses experimentation, a conformist culture in which "the nail that sticks out invariably gets hammered down," and an educational system that is rote-driven, narrow, and "memory-centric." The final stretch reads as a practitioner's checklist for Indian organisations. Birla identifies three live issues — keeping talented people perpetually challenged through fast-tracking and cross-functional exposure; integrating talent without letting mediocrity drive it out or letting it harden into an ivory tower; and managing the widening compensation divergence between high-performers and the rest in an era of stock options and performance-linked pay. Citing Ernest Shackleton's 1900 Antarctic recruitment advertisement, he ends on the claim that the real challenge is striking a balance between material rewards and a larger sense of mission, and that making India genuinely talent-friendly requires macro-level action on quality-of-life and human-development indicators so that the brain drain can be reversed. ## Key points - Talent — not capital, scale, technology, or conventional labour — is framed as the single dominant strategic resource of contemporary business; Birla calls the resulting paradigm "People Power." - The definition of managerial talent is widened beyond functional expertise to include emotional intelligence, creativity, team orientation, entrepreneurial drive, and cross-cultural mobility. - Four drivers are offered for the talent crunch: a global supply-demand imbalance, the desire to "be one's own boss," the need to spread decision-making to every organisational level, and rising business complexity. - India's enabling endowments are listed as English fluency, numerical aptitude, an adaptive temperament, and a hyper-competitive culture exemplified by nursery-school interviews and Civil Service ratios. - Three retarding forces are diagnosed: an indelible social stigma around failure, a conformist culture hostile to dissent, and an educational system that is rote-based and "memory-centric." - Three live organisational issues are flagged: keeping talented people challenged through fast-tracking and overseas secondments, integrating talent without letting mediocrity drive it out, and managing widening compensation differentials and stock-option pressure. - Birla invokes Ernest Shackleton's 1900 Antarctic recruitment notice to argue that mission and meaning, not material rewards alone, mobilise talent. - The conclusion shifts to a macro register: nurturing and retaining talent in India requires fixing quality-of-life, human-development, and infrastructure deficits — "attracting brains is a lot more difficult than attracting FDI." --- ## [Primary work] New Era of Enriching Hindu Growth Rate URL: https://indianliberals.in/primary-works/new-era-of-enriching-hindu-growth-rate-sunil-s-bhandare-march-5-2010/ ### Summary Sunil S. Bhandare's booklet, published by the Forum of Free Enterprise in March 2010 and adapted from an article in MEDC's Monthly Economic Digest, charts India's exit from the so-called "Hindu growth rate" of roughly 3.5% per year that prevailed across the first four decades of planning (1950-89), through the "neo-Hindu" rate of 5.5% in the 1990s, to what he names a third phase: an "Enriching Hindu Growth" (EHG) decade in which real GDP averaged above 7% from 2000-01 to 2009-10, peaking at a historic 8.5%. He frames this as a benchmark-setting consolidation of the post-1991 reform process — "an irreversible process of economic reforms" — and as the moment India is being recognised as a formidable emerging economic power. Bhandare anatomises six features of the EHG phase: acceleration in the doubling of per capita real income (now about twelve years, versus nineteen during the planning era); a sharp structural shift into services (which rose from 48.5% of GDP in 1989-90 to 65.7% in 2009-10 while agriculture collapsed from 31.8% to 15.5% even though it still employs 55% of the labour force); new manufacturing drivers in automobiles, telecom, pharmaceuticals and biotechnology, wit… ### Body ## Summary Sunil S. Bhandare's booklet, published by the Forum of Free Enterprise in March 2010 and adapted from an article in MEDC's Monthly Economic Digest, charts India's exit from the so-called "Hindu growth rate" of roughly 3.5% per year that prevailed across the first four decades of planning (1950-89), through the "neo-Hindu" rate of 5.5% in the 1990s, to what he names a third phase: an "Enriching Hindu Growth" (EHG) decade in which real GDP averaged above 7% from 2000-01 to 2009-10, peaking at a historic 8.5%. He frames this as a benchmark-setting consolidation of the post-1991 reform process — "an irreversible process of economic reforms" — and as the moment India is being recognised as a formidable emerging economic power. Bhandare anatomises six features of the EHG phase: acceleration in the doubling of per capita real income (now about twelve years, versus nineteen during the planning era); a sharp structural shift into services (which rose from 48.5% of GDP in 1989-90 to 65.7% in 2009-10 while agriculture collapsed from 31.8% to 15.5% even though it still employs 55% of the labour force); new manufacturing drivers in automobiles, telecom, pharmaceuticals and biotechnology, with autos crossing 11 million units; the IT/BPO industry's transformational role in services exports and skilled employment; sharply shifting private consumption patterns (food's share of PFCE falling from 48.2% to 42.3%, with comforts, communications and entertainment rising); and a visibly changing income pyramid as middle- and upper-class households expand. Each claim is supported with CSO, RBI Handbook of Statistics, NCAER and World Development Report data. The argument is decidedly not triumphalist. Quoting Chief Economic Adviser Kaushik Basu on India's 10% potential and the need for the bureaucracy to "pull up its socks," Bhandare flags that India still ranks 83rd of 133 countries on per capita PPP GNI ($2,960), trails China badly in industrial capacity (steel: 660 vs 60 mn tonnes; cement: ~1400 vs ~200 mn tonnes), and faces food inflation hovering at 18% with persistent agricultural-productivity stagnation. He calls for a "Second Green Revolution" through land-holding consolidation, contract and corporate farming, post-harvest infrastructure and rural connectivity; restoration of fiscal discipline under FRBM toward a 40% investment-and-savings ratio; and substantial state-led thrust on power and transport infrastructure, since "the most important component is the power sector." The closing register is liberal-optimist: India needs "more positive, proactive investment-friendly policy; and more importantly, a high pedestal of governance, good governance and better and better governance" to deliver sustainable and inclusive growth in the coming decade. The booklet closes with a biographical tribute to Shailesh Kapadia (1949-1988), a Chartered Accountant, FFE associate and Vice-Chairman of the Indian Merchants' Chamber's Direct Taxation Committee, whose memorial trust sponsored the publication. ## Key points - Bhandare proposes naming the 2000-2010 decade the "Enriching Hindu Growth" (EHG) rate phase, with average real GDP growth above 7% peaking at 8.5%, succeeding the "Hindu" (3.5%, 1950-89) and "neo-Hindu" (5.5%, 1990-2000) phases. - Per capita real GDP now doubles in about twelve years, compared with nineteen during the earlier planning era — the headline marker of the EHG phase. - Sectoral shares of GDP shifted dramatically: services from 48.5% to 65.7%, agriculture from 31.8% to 15.5%, industry roughly flat — even though agriculture still employs 55% of the labour force. - India ranks 12th globally on GNI at market exchange rates and 4th in PPP terms, but per capita PPP GNI ($2,960) still places it 83rd of 133 countries, well behind China. - Manufacturing has new drivers in autos (11 mn units crossed in 2009-10), telecom, pharma and biotech, while IT/BPO has built world-class capability and over 8 mn direct and indirect jobs. - Private consumption is rebalancing away from food (PFCE share down from 48.2% to 42.3%) toward comforts, services and a fast-growing organised retail format. - Major constraints flagged: low agricultural productivity, food inflation around 18%, inadequate physical infrastructure (especially power) and the unresolved poverty/inequality debate around the Tendulkar Committee's revised estimates. - The prescription is liberal-reformist: fiscal consolidation back toward FRBM discipline, a 40% investment-and-savings ratio, a "Second Green Revolution" via consolidated land-holdings and corporate farming, and above all "a high pedestal of governance" for sustained, inclusive growth. --- ## [Primary work] On Socialism and Bank Nationalisation URL: https://indianliberals.in/primary-works/on-socialism-and-bank-nationalisation-dr-r-c-cooper-professor-k-a-joseph-professor-b-r-shenoy-c-c-desai-a-k-chanda-august-9-1/ ### Summary A Forum of Free Enterprise pamphlet collecting addresses delivered around the July 1969 bank nationalisation by a roster of classical-liberal voices: Dr. R. C. Cooper, Prof. K. A. Joseph, Prof. B. R. Shenoy, C. C. Desai (I.C.S., Retd., M.P.) and — beyond the rendered pages — A. K. Chanda. The contributions read as a coordinated rebuttal of Indira Gandhi's "New Economic Policy" note and of the bank nationalisation it heralded, arguing that the diagnosis is wrong (capital is being consumed and misdirected, not hoarded by private bankers), that the remedy is worse than the disease (it brings the country closer to communism rather than to welfare), and that what India actually needs is open competition, decontrol, sound money and a sturdy democratic culture grounded in individual rights. Across the four essays seen, the volume's argumentative centre is the claim that India's economic stagnation is the product of a decade and a half of planning, licensing and arbitrary investment priorities — not of free enterprise — and that nationalising banks merely deepens the same political control that has already corroded the cooperative sector and public undertakings.… ### Body # On Socialism and Bank Nationalisation ## Summary A Forum of Free Enterprise pamphlet collecting addresses delivered around the July 1969 bank nationalisation by a roster of classical-liberal voices: Dr. R. C. Cooper, Prof. K. A. Joseph, Prof. B. R. Shenoy, C. C. Desai (I.C.S., Retd., M.P.) and — beyond the rendered pages — A. K. Chanda. The contributions read as a coordinated rebuttal of Indira Gandhi's "New Economic Policy" note and of the bank nationalisation it heralded, arguing that the diagnosis is wrong (capital is being consumed and misdirected, not hoarded by private bankers), that the remedy is worse than the disease (it brings the country closer to communism rather than to welfare), and that what India actually needs is open competition, decontrol, sound money and a sturdy democratic culture grounded in individual rights. Across the four essays seen, the volume's argumentative centre is the claim that India's economic stagnation is the product of a decade and a half of planning, licensing and arbitrary investment priorities — not of free enterprise — and that nationalising banks merely deepens the same political control that has already corroded the cooperative sector and public undertakings. The contributors variously appeal to British and Soviet experience with socialism, the cooperative banks' history of failure, and the practical mechanics of capital markets, savings and small-borrower credit to argue that bank nationalisation has no economic justification and that only basic policy changes — not retrograde slogans — can restore growth and democratic stability. ## Essays ### An Economic Analysis of Prime Minister's Note *By Dr. R. C. COOPER* Dr. R. C. Cooper — Vice-President of the Forum of Free Enterprise and former president of the Institute of Chartered Accountants of India and of the Indian Merchants' Chamber — walks point-by-point through the Prime Minister's note on a "New Economic Policy," treating each of its thirteen suggestions as a policy proposal to be tested on economic merit alone. He argues that ceilings on "unproductive expenditure" misdiagnose the problem (planning and indiscriminate taxation are what created sheltered markets and wastage), that licensing has barred new entrepreneurs and produced brain drain, that monopolies oversight should cover the public and cooperative sectors too, that public-sector autonomy is impossible while politicians and bureaucrats refuse to release control, and that cooperatives only work when voluntary and self-financed. Cooper concludes that proposals to nationalise raw-material imports, cap incomes, impose urban property ceilings or expand profit-sharing are economically unsound — "against public welfare" — and that the note's own closing line ("These are just some stray thoughts rather hurriedly dictated") is a damning admission. His preferred remedy throughout is the same: open competition, value-added taxation as in France, and wealth creation before redistribution. - Treats the Prime Minister's note as an economic document and brackets its political-ideological aspects. - Diagnoses unproductive expenditure as a by-product of planning, sheltered markets and indiscriminate taxation, not of corporate excess. - Cites the "Demonstration Effect" of politician spending — new PM residence at Rs. 23 lakhs, Maharashtra CM's sumptuary allowance hiked from Rs. 15,000 to Rs. 1 lakh. - Calls licensing the chief barrier to new entrepreneurs and points to brain drain ("For every Dr. Khorana who is known there are hundred unknown ones"). - Argues public-sector autonomy is impossible while government interferes even in advertising operations, and that cooperatives succeed only when voluntary and self-financed. - Rejects income ceilings and urban property ceilings as workable only under a communist constitution. - Concludes the thirteen proposals are economically unsound and that public welfare cannot be furthered by such a casual approach. ### Is Socialist Planning Suited to Indian Democracy? *By Prof. K. A. JOSEPH* Prof. K. A. Joseph, an economist at Presidency College, Madras, argues that socialist central planning — whether in post-war Britain or in the Soviet Union — has hollowed out economic and civil liberty alike, and that India, drawn by sugar-coated promises, risks a similar serfdom. He marshals quotations from "Mr. Seaman," Whitehead and Friedman to portray British socialism as "competition without prizes" and Soviet planning as exploitation of labour for the State, then turns to India to insist that planning has not produced welfare but corruption, nepotism and stagnation. His affirmative case is for a free democracy fertilised by free enterprise and competition, sustained by patriotism, civic responsibility and rule-of-law individualism rather than by bandhs and slogans. He warns that a universal welfare state risks becoming a universal dictator and that economic and social freedom are preconditions, not optional ornaments, of democratic society. - British post-war socialism is read as a record of "promised prosperity and given misery" — Seaman quoted on "competition without prizes, statistics without end". - Centralised planning is treated as a triple tyranny — ideological fanaticism, technological infallibility, bureaucratic red-tape — citing Whitehead on liberty. - Soviet planning is described, via Friedman, as exploitation of labour for the profit of the State and Communist Party, with no freedom of thought or expression. - Indian public life is charged with avarice, corruption and nepotism — paralleled to the Clive and Warren Hastings era of "shaking the pagoda tree". - Affirms free enterprise, competitive efficiency, rule of law and individualism as the bases of a viable Indian democracy. ### Not Nationalisation of Banks, But Basic Policy Changes are Required *By B. R. Shenoy* Prof. B. R. Shenoy, Director of the Economic Research Centre, sets aside the political case for bank nationalisation to focus on its economic consequences. He argues that the Indian economy has been suffering from capital consumption and misdirection since 1955-56, and that nationalisation will make matters worse on two counts: it will divert national savings into extravagant and almost "no-return" Public Sector projects, and it will pile up bad and doubtful debts. The semi-stagnation of per capita output — especially in agriculture — and the social and political tensions that follow are, in his telling, the real crisis, none of which is caused by how banks are run. Shenoy warns that foreign aid (already about 65 per cent of Indian national savings) and good monsoons have masked the ill effects of capital consumption, but that bank nationalisation may itself prompt donor countries to review aid flows. He sees harsh effects on the capital market, on working-capital availability for trade and industry, and on interest rates outside the commercial banks. The remedy, he insists, is not retrograde measures but basic policy changes — to monetary and fiscal policy, investment priorities, wages, and the allocation of goods. - Bank nationalisation is framed as "a major leap backward," hailed only by leftist forces. - Underlying disease is capital consumption and misdirection since 1955-56, evidenced by semi-stagnation of per capita output and agricultural decline. - Nationalisation will compound the problem by diverting savings into low-return public-sector projects and piling up bad and doubtful debts. - Foreign aid (about 65 per cent of Indian national savings) and good monsoons have hidden the underlying capital consumption — nationalisation may jeopardise both. - Predicts harsh effects on the capital market: new issues already fell from Rs. 258 crores in 1964-65 to Rs. 175 crores in 1967-68. - Real cure is basic policy reform — monetary and fiscal policy, investment priorities, wages and goods allocation — not slogans. ### No Economic Justification for Bank Nationalisation *By C. C. DESAI, I.C.S. (Retd.), M.P.* C. C. Desai, I.C.S. (Retd.) and M.P., treats bank nationalisation as a political slogan rather than a piece of economic policy. He calls it not merely a step towards communism but "communism itself" — because once banks are run by the Government, which means the majority party, lending decisions move from commercial to political criteria. Drawing on his own time as Registrar of Cooperative Societies in the Central Provinces and Berar, he predicts the commercial banks will share the fate of the cooperative banks: hardly any solvent institutions left. Against nationalisation he sets free economy, free enterprise and free competition as the only routes to production, growth and prosperity, and answers the four common charges against banks (concentration of economic power, misuse of resources, mis-allocation of credit, financing of anti-social activity) with figures showing rising shares of small-scale and agricultural credit even before nationalisation — Rs. 430 crores of advances against agricultural production and marketing by January 1968, plus an estimated Rs. 50 crores of clean rural advances. He warns that the rising costs and discipline problems banks already faced will only worsen under State ownership. The essay is cut off in the rendered chunk mid-discussion of bank credit costs. - Frames nationalisation as a slogan and "a pawn in the political game" rather than serious economics. - Argues banks under Government become instruments of the ruling party — control of loans and advances becomes political. - Predicts commercial banks will repeat the cooperative-bank collapse he witnessed as Registrar of Cooperative Societies in Central Provinces and Berar. - Rebuts charges against banks with data: small-scale credit share up from 3.9% (Mar 1966) to 6.6% (Mar 1967); Rs. 430 crores of agricultural advances by Jan 1968 plus an estimated Rs. 50 crores of clean rural advances. - Affirms free economy, free enterprise and free competition as the only ways to raise production and prosperity. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] ON WAGE PROBLEM AND INDUSTRIAL UNREST URL: https://indianliberals.in/primary-works/on-wage-problem-and-industrial-unrest-naval-h-tata-c-v-pavaskar-b-n-srikrishna-january-14-1982/ ### Summary This Forum of Free Enterprise pamphlet collects three talks on India's wage structure and the deepening industrial unrest of the early 1980s, delivered by Naval H. Tata (President of The Employers' Federation of India), C. V. Pavaskar (Additional Labour Adviser, Bombay Chamber of Commerce & Industry), and the advocate B. N. Srikrishna. Each contribution speaks from a management-and-law standpoint and converges on a shared diagnosis: an ideologically driven, ad hoc state intervention regime — impounded dearness allowance, an undefined profit-sharing bonus, an eroded occupational differential, and weak conciliation machinery — has produced a wage system that is neither fair nor enforceable while militant trade unionism has displaced responsible collective bargaining. The remedies the three speakers urge — tripartite consultation before any State labour legislation, productivity-linked bonus, faster adjudication along the lines of the Kantharia Committee, statutory recognition of unions, parity of enforcement between employer-side and union-side breaches, and a defence of collective bargaining as the primus inter pares of dispute settlement — give the volume its argumentative centr… ### Body # ON WAGE PROBLEM AND INDUSTRIAL UNREST *By Naval H. Tata, C. V. Pavaskar, B. N. Srikrishna* ## Summary This Forum of Free Enterprise pamphlet collects three talks on India's wage structure and the deepening industrial unrest of the early 1980s, delivered by Naval H. Tata (President of The Employers' Federation of India), C. V. Pavaskar (Additional Labour Adviser, Bombay Chamber of Commerce & Industry), and the advocate B. N. Srikrishna. Each contribution speaks from a management-and-law standpoint and converges on a shared diagnosis: an ideologically driven, ad hoc state intervention regime — impounded dearness allowance, an undefined profit-sharing bonus, an eroded occupational differential, and weak conciliation machinery — has produced a wage system that is neither fair nor enforceable while militant trade unionism has displaced responsible collective bargaining. The remedies the three speakers urge — tripartite consultation before any State labour legislation, productivity-linked bonus, faster adjudication along the lines of the Kantharia Committee, statutory recognition of unions, parity of enforcement between employer-side and union-side breaches, and a defence of collective bargaining as the primus inter pares of dispute settlement — give the volume its argumentative centre. The collection reads as a coordinated employers-and-bar critique of the post-Independence labour settlement, published from Bombay under the Forum's classical-liberal banner. ## Essays ### I (untitled section by Naval H. Tata) *By Naval H. Tata* Naval H. Tata, President of The Employers' Federation of India, opens with the claim that India's industrial wage structure is in a chaotic state, with reports of the National Labour Commission, the Bhoothalingam Committee, the Chakrabarty Committee and successive Five-Year Plan labour chapters routinely shelved by Government without action or explanation. He attributes the inertia to a habit of seeking ideological solutions to purely economic problems, noting that India has not assessed ab initio whether GNP can sustain promises of social justice for 660 million people; the only vocal industrial and bank-and-insurance workers therefore keep extracting gains at the expense of the unorganised non-industrial majority. Ad hoc actions — impounding dearness allowance, compulsory deposit of a percentage of salaried income, cuts in LIC bonus, managerial-pay guidelines — paper over a defective wage design rather than rectify it. Tata reserves particular criticism for the profit-sharing bonus law, calling it the biggest single factor for generating industrial discord, and praises the Prime Minister's courage in eliminating Section 34(iii) against trade-union opposition. If even bonus legislation is so easily circumvented, he asks, how can minimum-wage legislation ever be enforced where State Governments will not stand behind employers in the face of agitators. He urges that future labour law pass through tripartite forums before enactment, warns against hasty State legislation on ideological or regional grounds, and proposes a comprehensive wage policy that links pay to production, restores inter-occupational and inter-industry differentials, and protects the supervisory and managerial tier whose salaries have eroded under inflation and pay-curb policy. - Successive committee reports (Bhoothalingam, Chakrabarty, National Labour Commission) on wages, prices and incomes have been routinely shelved by Government without explanation. - Ad hoc patchwork — impounding dearness allowance, compulsory deposit of part of salaried income, LIC bonus cuts, managerial-pay guidelines — leaves the underlying wage design defective. - Profit-sharing bonus, undefined by the Bonus Commission itself and applied even to loss-making units, is the single biggest source of industrial discord; the elimination of Section 34(iii) is welcomed. - Universal-suffrage politics gives the vocal organised sector recurring wage gains that the unorganised majority subsidises, in the name of a social justice the GNP cannot fund. - Reform should run through tripartite consultation, link wages to production, restore inter-occupational and inter-industry differentials, and protect supervisory and managerial pay from erosion. ### II (untitled section by C. V. Pavaskar) *By C. V. Pavaskar* C. V. Pavaskar, Additional Labour Adviser of the Bombay Chamber of Commerce & Industry, describes a labour scene of turbulence in which the Industrial Disputes Act, 1947 has failed to settle disputes and collective bargaining has degenerated into coercive bargaining. Go-slow, he argues, must not be granted the legitimacy that strike enjoys; responsible and responsive unions are progressively being edged out by militants, with Gresham's law fully in operation in the field of industrial relations. Bonus demands routinely outrun the Payment of Bonus Act, and managements are pushed beyond the statutory ceiling through strikes, go-slows and indiscipline. Pavaskar locates the trouble in weak conciliation machinery, in outsized multi-industry unions where power concentrates in a few hands and the individual plant disappears from view, in appeasement-driven settlements (he points to Bombay concerns granting Rs.300–500 monthly increases that ripple into neighbouring units), and in adjudication delays whose remedy he draws from the Kantharia Committee's compulsory pre-trial hearing scheme. He calls for statutory union recognition through the law (citing the Maharashtra precedent), recognition that lasts co-terminus with the settlement, de-recognition of unions that flout settlements, and parity of enforcement between employer-side statutes (Factories Act, EPF, ESI) and union-side breaches of awards. He closes by insisting that, despite these aberrations, there is no substitute for collective bargaining as the primus inter pares for settlement of disputes. - The Industrial Disputes Act, 1947 has failed and collective bargaining has degenerated into coercive bargaining; go-slow should not enjoy the legitimacy granted to strike. - Responsible unions are being edged out by militants — 'Gresham's law' applied to industrial relations — and bonus demands routinely exceed the statutory ceiling. - Weak conciliation, outsized multi-industry unions, and appeasement settlements (Rs.300–500 wage hikes in Bombay concerns rippling through neighbourhoods) drive industrial unrest. - The Kantharia Committee's compulsory pre-trial hearing scheme and tighter Tribunal timelines should curb adjudication delays. - Statutory union recognition (on the Maharashtra model), de-recognition of unions that flout settlements, and parity of enforcement between employer-side and union-side breaches are urged; collective bargaining remains the primus inter pares of settlement. ### III (untitled section by B. N. Srikrishna) *By B. N. Srikrishna* B. N. Srikrishna, an advocate, frames industrial relations as inherently conflict-generating because capital and labour, in practice, assume that their interests are mutually contradictory. He defines industrial unrest broadly as any activity that increases the strain between capital and labour, manifesting either as worker-initiated strike, gherao, go-slow and similar coercive tactics, or as capital-led shut-down, lay-off, retrenchment and lock-out. He divides unrest into the lawful (within the framework of law and even encouraged by it) and the unlawful, using a Queensberry-Rules boxing-ring analogy in which the State acts as referee — an analogy that, he notes, must stop short of accepting that the activity is contained within the ring. From this frame Srikrishna moves to causes. He treats industrial unrest as a symptom of a wider society-wide fall in ethical and moral standards, a runaway inflation that consumes a fifth of one's real earnings each year, and an industrial adjudication machinery that has tried to feed ever-larger dearness allowance into the inflationary spiral. He concedes the simmering discontent has legitimate roots in poverty, squalour and ignorance, but charges contemporary union leadership with abandoning dedication and social service for self-aggrandisement and money-making, 'puncturing the pressure vessel itself' rather than acting as safety valves. The essay continues past the rendered pages. - Industrial relations is inherently conflict-generating because capital and labour assume their interests are mutually contradictory. - Industrial unrest is defined broadly to include both worker-side activity (strike, gherao, go-slow) and capital-side activity (shut-down, lay-off, lock-out). - Two heads of industrial unrest: that which operates within the framework of law and that which lies outside it — the State is the referee in a Queensberry-Rules boxing ring. - Unrest is a symptom of a wider fall in ethical and moral standards and of inflation that erodes about a fifth of real earnings each year. - Trade union leadership has degenerated into a mercenary profession that punctures the social pressure vessel instead of serving as a safety valve. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] OPENING UP OF THE INSURANCE INDUSTRY – THREE YEARS ON URL: https://indianliberals.in/primary-works/opening-up-of-insurance-industry-d-m-satwalekar-april-2-2004/ ### Summary Delivered on 10 February 2004 as the A. D. Shroff Memorial Trust's annual public lecture in Mumbai, Deepak M. Satwalekar's address takes stock of the Indian life insurance industry three years after it was opened to private participation by the IRDA Bill of December 1999. Speaking as Managing Director and CEO of HDFC Standard Life Insurance Co. Ltd., Satwalekar frames liberalisation as a continuation of the spirit of A. D. Shroff and the Forum of Free Enterprise, insisting that 'competition is not — and has never been — a zero sum game' and that private entry has, in three years, captured 12.78% of new life business while mobilising Rs. 1,666.3 crores in premium income. The central section reports three positive developments since liberalisation: product innovation (unbundled riders, unit-linked plans), the evolution of distribution channels (bancassurance, brokers, the internet alongside the traditional tied-agency model), and a stronger emphasis on consumer awareness underwritten by a partnership between insurers and a media-active regulator.… ### Body # OPENING UP OF THE INSURANCE INDUSTRY – THREE YEARS ON *By D M SATWALEKAR* ## Summary Delivered on 10 February 2004 as the A. D. Shroff Memorial Trust's annual public lecture in Mumbai, Deepak M. Satwalekar's address takes stock of the Indian life insurance industry three years after it was opened to private participation by the IRDA Bill of December 1999. Speaking as Managing Director and CEO of HDFC Standard Life Insurance Co. Ltd., Satwalekar frames liberalisation as a continuation of the spirit of A. D. Shroff and the Forum of Free Enterprise, insisting that 'competition is not — and has never been — a zero sum game' and that private entry has, in three years, captured 12.78% of new life business while mobilising Rs. 1,666.3 crores in premium income. The central section reports three positive developments since liberalisation: product innovation (unbundled riders, unit-linked plans), the evolution of distribution channels (bancassurance, brokers, the internet alongside the traditional tied-agency model), and a stronger emphasis on consumer awareness underwritten by a partnership between insurers and a media-active regulator. He credits the IRDA with building a 'truly world class' regulatory framework but argues the next phase must be one of stringent enforcement rather than additional rule-making that strangulates compliant players. Throughout, he insists that earlier nationalisation in 1956 was driven by short-cuts and unethical practices that today's private insurers must consciously shun if they are to retain consumer confidence. Looking ahead, Satwalekar lays out a five-part agenda for policy makers: convergence and consistency of regulation across a blurring financial-services landscape; consolidation of the Insurance Act 1938, the IRDA Act 1999, the LIC Act 1956, the General Insurance Business Nationalisation Act 1971 and several adjacent statutes into a single flexible principal legislation; sharper risk-management tools (including a Mortality and Morbidity Investigation Bureau being set up with the Actuarial Society of India) as Indian insurers gain exposure to overseas markets and cross-country risk; serious commercial engagement with the rural market, which he argues is a profitable but segmented opportunity rather than a regulatory obligation, drawing the 'sachet' analogy from FMCG; and urgent pension reform to address the gap between non-contributory defined-benefit government schemes and the defined-contribution reality faced by most Indians as life expectancy rises towards 80 by 2020. The booklet opens with a brief profile of A. D. Shroff and an introduction by M. R. Shroff dated 2 April 2004, and closes with statistical annexures, one of which (on Employees' Provident Fund coverage and contributions as of March 2003) falls within the rendered pages. The lecture itself reads as a practitioner's brief for measured, enforcement-led liberalisation and consumer-centric reform, written from inside one of the new private players that the 1999 opening made possible. ## Key points - Frames the 1999 IRDA Bill as the long-delayed liberalisation of a sector that had been untouched while the rest of the Indian economy opened up; the Malhotra Committee reported in 1994 but reform took five years to enact. - Reports that private life insurers captured 12.78% of new business and Rs. 1,666.3 crores in premium income within three years, treating this share as a 'vote of confidence from customers'. - Identifies three positive post-liberalisation developments: product innovation (unbundled riders, unit-linked plans), new distribution channels (bancassurance, brokers, internet alongside tied agency), and stronger consumer awareness via insurer-regulator-consumer partnership. - Praises the IRDA for a 'truly world class' framework but argues the next priority is stringent enforcement against violators rather than fresh regulations that 'strangulate' compliant players. - Calls for consolidating the Insurance Act 1938, IRDA Act 1999, LIC Act 1956, General Insurance Business Nationalisation Act 1971, Marine Insurance Act 1965, Insurance Rules 1939 and Ombudsman Rules 1998 into a single flexible principal legislation, with detail moved to subordinate regulation. - Argues rural insurance is 'a myth' as an unprofitable segment — rural India is heterogeneous, more than half of rural GDP is non-agricultural, and the FMCG 'sachet' model shows commercial-only design works better than regulatory compulsion. - Frames pension reform as urgent given rising life expectancy (projected 80 years by 2020), the limits of defined-contribution PPF/annuity arrangements, and the need for a level playing field across pension providers. - Recurring ethical argument: nationalisation in 1956 came after short-cuts and unethical practices; private insurers must adopt strong business ethics to avoid a repeat and to earn customer goodwill. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] Organised Crime and Economic Development in India URL: https://indianliberals.in/primary-works/organized-crime-and-economic-development-in-india-dr-ajit-kumar-sinha/ ### Summary Dr. Ajit Kumar Sinha, then immediate past president of the Indian Economic Association, uses his 1999 Presidential address (reproduced by the Forum of Free Enterprise) to argue that organised crime — not just slow reform or weak institutions — has become the binding constraint on India's market transition. Writing at the close of the first decade of post-1991 liberalisation, he concedes that successive governments have held to a common economic agenda, but observes that headline indicators (HDI rank of 132/174, per-capita GNP rank of 165/210, FDI absorption a fraction of China's) lag behind expectations. The reason, he insists, is that markets cannot function without effective property rights, predictable law and protection of life and property — and crime syndicates have steadily eroded all three. The pamphlet then walks through the evidence trail: the 1993 Vohra Committee's account of an entrenched nexus between criminals, politicians, bureaucracy and police; the Supreme Court's 1997 directive that produced a follow-up high-level committee under N. N. Vohra with B. G. Deshmukh and S. V.… ### Body # Organised Crime and Economic Development in India *By Dr. Ajit Kumar Sinha* ## Summary Dr. Ajit Kumar Sinha, then immediate past president of the Indian Economic Association, uses his 1999 Presidential address (reproduced by the Forum of Free Enterprise) to argue that organised crime — not just slow reform or weak institutions — has become the binding constraint on India's market transition. Writing at the close of the first decade of post-1991 liberalisation, he concedes that successive governments have held to a common economic agenda, but observes that headline indicators (HDI rank of 132/174, per-capita GNP rank of 165/210, FDI absorption a fraction of China's) lag behind expectations. The reason, he insists, is that markets cannot function without effective property rights, predictable law and protection of life and property — and crime syndicates have steadily eroded all three. The pamphlet then walks through the evidence trail: the 1993 Vohra Committee's account of an entrenched nexus between criminals, politicians, bureaucracy and police; the Supreme Court's 1997 directive that produced a follow-up high-level committee under N. N. Vohra with B. G. Deshmukh and S. V. Giri; confirmatory reports from the Centre for Policy Research, the Bihar police, and a Bihar Legislative Council house committee; and the National Crime Record Bureau's own preface to Crimes in India 1997. Sinha treats organised crime as a global economic actor (estimated at $1.5 trillion a year) that now rivals multinational corporations in scale and uses information technology to dissolve state borders. Most of the second half reports Sinha's own questionnaire-based survey of 206 economists across 16 non-special-category states, six special-category states and Chandigarh. The numbers are striking: 93% report rising crime, 38% confirm 'Rangdari' (protection) tax as a precondition for opening or running a business, 80% see a nexus between criminals and police, 74% accept a four-way nexus across mafia, police, bureaucracy and politicians, and 47% confirm that mafia dons have been elected as representatives in their areas. A rank correlation of 0.94 between rise in 'anti-development crime' and capital flight, and 0.71 for rural militant organisations' impact on the rural investment climate, anchor his case quantitatively. The through-line is a classical-liberal one with empirical reinforcement: free entry and free exit — the basic preconditions of a market — are being foreclosed by syndicates that levy Rangdari tax on entrepreneurs, Firauti (ransom) tax on industrialists, and 'greasing/speed money' on every interaction with the state. When mafia figures themselves graduate to ministerial office and Lok Sabha and Rajya Sabha seats, Sinha argues, the criminal economy stops being a deviation from the political economy and becomes its dominant logic, and reform without restoring rule of law is a self-defeating exercise. ## Key points - Frames organised crime as the principal limiting factor on India's post-1991 reforms, not the more commonly cited political instability, communal tension or tax structure. - Anchors the diagnosis in property rights, free entry/exit and rule of law — markets cannot function without protection of life and property from criminal acts. - Summarises the Vohra Committee (1993, tabled 1995) and the Supreme Court-mandated 1997 follow-up under N. N. Vohra, B. G. Deshmukh and S. V. Giri to establish official confirmation of the criminal-political-bureaucratic nexus. - Reports the global scale of organised crime ($1.5 trillion/year), arguing syndicates have become economic powers rivalling multinational corporations and now exploit information technology to bypass state borders. - Presents an original 206-respondent survey of economists across 22 states/UTs to verify ground realities the official statistics do not capture, including the prevalence of Rangdari (protection) tax and Firauti (ransom) tax. - Documents the mainstreaming of mafia figures into elected office (Mukhiya, MLA/MLC, Lok Sabha, Rajya Sabha) and into ministerial positions in several states. - Quantifies the linkage between crime and economic performance via rank correlations — 0.94 between anti-development crime and capital flight, 0.71 between rural militant organisations' nexus and the rural investment climate. - Treats 'greasing/speed money' as having moved beyond ordinary file-pushing into a syndicate-mediated tariff on doing business, making reform without enforcement infeasible. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] OUR FOREIGN EXCHANGE PROBLEM CAN BE SOLVED BY A NEW EXPORT POLICY URL: https://indianliberals.in/primary-works/our-foreign-exchange-problem-murarji-j-vaidya-nov25-1961/ ### Summary In this 1961 Forum of Free Enterprise pamphlet, Murarji J. Vaidya argues that India's chronic foreign-exchange deficit cannot be cured by tighter import controls and ought to be tackled through a more liberal export policy that leans on private enterprise rather than the State Trading Corporation. He opens with the data — exports of Rs. 6,300 million against imports of Rs. 10,100 million in 1960, with the gap widening from Rs. 2,900 million in 1958 to a likely Rs. 3,200 million in 1961 — to insist that the solution does not lie in further restricting imports but in expanding earnings abroad. Vaidya then dissects why the medium-term credits extended by Western governments since 1956 have failed to translate into commissioned plant on schedule: licensing delays, Government-to-Government negotiations skewing project priorities, and a chronic distrust between the political-official class and the commercial community.… ### Body # OUR FOREIGN EXCHANGE PROBLEM CAN BE SOLVED BY A NEW EXPORT POLICY *By MURARJI J. VAIDYA* ## Summary In this 1961 Forum of Free Enterprise pamphlet, Murarji J. Vaidya argues that India's chronic foreign-exchange deficit cannot be cured by tighter import controls and ought to be tackled through a more liberal export policy that leans on private enterprise rather than the State Trading Corporation. He opens with the data — exports of Rs. 6,300 million against imports of Rs. 10,100 million in 1960, with the gap widening from Rs. 2,900 million in 1958 to a likely Rs. 3,200 million in 1961 — to insist that the solution does not lie in further restricting imports but in expanding earnings abroad. Vaidya then dissects why the medium-term credits extended by Western governments since 1956 have failed to translate into commissioned plant on schedule: licensing delays, Government-to-Government negotiations skewing project priorities, and a chronic distrust between the political-official class and the commercial community. He concedes that a small section of business has not lived up to ethical standards but argues that blanket controls and the Government's refusal to extend export incentives — such as retention of foreign exchange against exported items, or import-licence entitlements tied to export performance — punish honest exporters and choke supply. The State Trading Corporation, in his account, has channelised exports of certain commodities into Communist markets at the cost of established Western buyers, and its monopolistic role over private trading houses needs to be confined to genuinely non-convertible currency areas. In an appended essay on the European Common Market, Vaidya turns to the strategic question raised by Britain's pending negotiations to join the E.E.C. He warns that the Commonwealth preferences governing the bulk of Indian exports to the U.K. could erode, and that Indian products would face stiffer competition in Western Europe from the associated countries of the E.C.M. itself. Against this backdrop he urges that India consider an active role in some regional economic union of "appropriate and suitable neighbours" rather than standing alone in the face of growing trading blocs — a stand he says the Government has cold-shouldered "probably as a projection of our political neutrality." He closes by pointing to the example of Mr. B. B. Lall's appointment as Ambassador to Belgium and Commissioner-General to the E.C.M., and to nearly eight years already lost in inaction. ## Key points - India's trade deficit widened from Rs. 2,900 million in 1958 to a projected Rs. 3,200 million in 1961, despite very strict import controls. - Medium-term foreign credits extended since 1956 have not delivered commissioned industrial plant on schedule, because of licensing delays and intergovernmental priority disputes. - Vaidya defends the integrity of private enterprise against the dominant 'industrial-distrust' narrative and argues that ethical lapses are not confined to business. - He calls for export incentives — retention of part of foreign exchange earned, or import-licence rights against exported items — which the Government has rejected as contrary to its socialistic pattern. - The State Trading Corporation is criticised for monopolising exports of certain commodities and channelling trade to Communist countries at the cost of established Western buyers. - Government spending on commercial exhibitions abroad is judged disproportionate to actual Indian export development on the ground. - On the European Common Market, Vaidya warns that Britain's likely entry will erode Commonwealth Preferences and intensify competition from E.C.M.-associated countries in markets like the U.K. - He urges India to consider active membership of a regional economic union with neighbours of similar outlook, rather than persisting in economic isolation. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] PERESTROIKA AND INDIA – THE GLOBAL PROCESS URL: https://indianliberals.in/primary-works/perestroika-and-india-global-process-viren-shah-1988/ ### Summary Viren J. Shah's 1988 Forum of Free Enterprise pamphlet treats Mikhail Gorbachev's perestroika not as a Soviet curiosity but as the local expression of a planet-wide turn against over-centralised economic management. Drawing extensively on long block-quotations from Gorbachev's 'Perestroika: New Thinking for our Country and the World', Shah lets the General Secretary make the case in his own voice: that the old Soviet machinery lacked inner stimuli for self-development, that wages had been detached from end results, that ministries had to surrender day-to-day regimentation, and that enterprises should henceforth operate on the principle 'everything which is not prohibited by law is allowed.' Shah pauses to note that the diagnostic passages echo, with uncanny fidelity, Milovan Djilas's analysis of the communist 'New Class' written three decades earlier. The second movement of the address widens the lens.… ### Body # PERESTROIKA AND INDIA – THE GLOBAL PROCESS *By VIREN J. SHAH* ## Summary Viren J. Shah's 1988 Forum of Free Enterprise pamphlet treats Mikhail Gorbachev's perestroika not as a Soviet curiosity but as the local expression of a planet-wide turn against over-centralised economic management. Drawing extensively on long block-quotations from Gorbachev's 'Perestroika: New Thinking for our Country and the World', Shah lets the General Secretary make the case in his own voice: that the old Soviet machinery lacked inner stimuli for self-development, that wages had been detached from end results, that ministries had to surrender day-to-day regimentation, and that enterprises should henceforth operate on the principle 'everything which is not prohibited by law is allowed.' Shah pauses to note that the diagnostic passages echo, with uncanny fidelity, Milovan Djilas's analysis of the communist 'New Class' written three decades earlier. The second movement of the address widens the lens. Shah surveys the Chinese reforms after 1978 (the new law on state industrial enterprises, foreign capital in over 4,000 ventures, rural family enterprise), traces parallel impulses in Hungary, Poland, Yugoslavia and Czechoslovakia, and then crosses into the non-communist world — Mitterand's privatisations in France, New Zealand's liberalisation under a 'leftist' government, Reaganism, Thatcherism, and Kinnock's Labour Party drifting to the centre. His conclusion is blunt: 'Restructuring is now a truly global process,' and its direction is the same everywhere — towards openness, competition, and respect for the individual as a citizen rather than as manpower. The pamphlet closes by turning this global verdict on India. Shah locates an Indian opening-up beginning in 1977 and continuing under the present government's early liberal noises on licensing, taxation, technology imports and foreign trade, but argues that the initiatives 'got fragmented and lost all coherence in the process of execution' — 'the clear stream of reason has been lost in the desert sand of dead habit.' He calls for an Indian perestroika 'on a broad front and with determination', flagging the loose nexus between vote-shares and parliamentary majorities, the anti-defection law, the lowering of the voting age, and the federal handling of sub-nationalism as items on the agenda. The rendered pages stop in the middle of that agenda, with the final eight pages of the pamphlet (PDF 21–28) outside this chunk. ## Key points - Frames perestroika through a Regis Debray epigraph: revolutions tend to wear the mask of the preceding scene, and observers must learn to re-read continuity. - Reproduces Gorbachev at length on the operative content of perestroika — mass initiative, glasnost, retreat from management-by-injunction, and the elevation of honest skilled labour. - Pairs Gorbachev's critique of the Soviet 'plan indices' system with Milovan Djilas's 1957 diagnosis to argue the failure-mode of bureaucratic socialism was known thirty years before reform began. - Highlights the new Law on State Enterprises (effective 1 January 1988), the abrogation of thousands of normative acts, and the principle that anything not prohibited by law is allowed. - Reads glasnost as the institutional guarantee of irreversibility — once people grow used to openness they will not easily accept a return to the past. - Argues that restructuring is a global phenomenon spanning China's post-1978 reforms, Eastern European reform traditions, Mitterand's privatisations, New Zealand's liberalisation, Reaganism, Thatcherism and Kinnock's Labour. - Diagnoses India's post-1977 liberalisation as fragmented in execution and lost in 'the desert sand of dead habit', and calls for an Indian perestroika on a broad front. - Opens an Indian reform agenda: tightening the vote-to-seat nexus, revisiting the anti-defection law, the voting-age question, and a Gorbachev-style accommodation of sub-nationalisms within the federal structure. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] OUR ECONOMIC FUTURE URL: https://indianliberals.in/primary-works/our-economic-future-a-d-shroff-apr7-1958/ ### Summary Delivered as a talk under the auspices of the Forum of Free Enterprise in Bangalore on 17 January 1958 and reprinted as a Forum pamphlet, A. D. Shroff's "Our Economic Future" is a sharply argued indictment of the policy regime built around the Second Five-Year Plan. Shroff opens by chiding the country for letting regional quarrels over language and States' reorganisation distract it from an unusually difficult economic situation. He then walks the lay reader through the principal symptoms: a recurring food shortage that has forced Government to import grain at heavy cost in foreign exchange; sterling balances that fell by Rs. 330 crores in a single week of January 1958; an outstanding gap of Rs. 700 crores against the Plan's remaining requirements; and a Capital Market "practically dead" because confiscatory direct taxation has destroyed the incentive to save and invest. The diagnosis is unsparing.… ### Body # OUR ECONOMIC FUTURE *By A. D. Shroff* ## Summary Delivered as a talk under the auspices of the Forum of Free Enterprise in Bangalore on 17 January 1958 and reprinted as a Forum pamphlet, A. D. Shroff's "Our Economic Future" is a sharply argued indictment of the policy regime built around the Second Five-Year Plan. Shroff opens by chiding the country for letting regional quarrels over language and States' reorganisation distract it from an unusually difficult economic situation. He then walks the lay reader through the principal symptoms: a recurring food shortage that has forced Government to import grain at heavy cost in foreign exchange; sterling balances that fell by Rs. 330 crores in a single week of January 1958; an outstanding gap of Rs. 700 crores against the Plan's remaining requirements; and a Capital Market "practically dead" because confiscatory direct taxation has destroyed the incentive to save and invest. The diagnosis is unsparing. Shroff blames the "thoughtless and indiscriminate issue of import licences in 1956", the Planning Commission's under-estimate of foreign-exchange needs, the lack of coordination between the Commerce and Finance Ministries, and a structurally over-ambitious Public Sector outlay that survives only because of "prestige". He argues that periodic Five-Year Plans are not suited to Indian conditions, that economic development must be "a continuous process" under flexible planning, and that the State has crowded out both the new-issues market and the small saver. Anti-corruption is treated as a structural reform: Shroff renews the Forum's suggestion that the Home Ministry compile and publish a list of Ministers' commercial relations and connections, a proposal the Home Minister had dismissed as "not practicable". The closing pages frame the alternative. Shroff calls for a "radical change in our economic policies", the pooling of expertise across party lines, voluntary consumers' associations to discipline hoarders and profiteers, and a tax regime that invites both domestic savings and foreign capital. The pamphlet ends on his characteristic warning that the attempt to destroy the acquisitive society is producing an "authoritarian State" — a line that, together with the Eugene Black epigraph ("People must come to accept private enterprise not as a necessary evil, but as an affirmative good") and Shroff's own back-cover credo ("Free Enterprise was born with man and shall survive as long as man survives"), supplies the pamphlet's polemical bookends. ## Key points - Frames India's economic crisis (food shortage, foreign-exchange depletion, dead Capital Market) as a consequence of the Second Five-Year Plan and bad licensing policy, not of monsoons or fate. - Documents specific figures: sterling balances down Rs. 330 crores in the week ending 3 January 1958, Rs. 95 crores temporary IMF loan, Rs. 198 crores reserves vs. Rs. 700 crores outstanding gap on Plan requirements. - Public Sector outlay under the Second Plan now reset to Rs. 4,800 crores, with Rs. 1,500 crores spent in two years and Rs. 3,300 crores still to be spent in three — a pace Shroff calls inflationary and unfundable. - Attributes the foreign-exchange crisis to the "thoughtless and indiscriminate issue of import licences in 1956" and to the lack of coordination between the Commerce and Finance Ministries. - Rejects rigid periodic Plans, calling for continuous, flexible development planning suited to Indian conditions; treats the "core of the Plan" retreat as a tacit admission of error. - Argues that confiscatory direct taxation has both reduced the capacity to save and dissuaded investors, leaving under-writers stuck with 90–95% of new equity issues. - Treats corruption as a structural threat: renews the Forum's call for the Home Ministry to publish a list of Ministers' commercial connections, and cites the State Trading Corporation's cement monopoly profits as evidence that Government itself profiteers. - Closes by warning that ever-expanding State powers are turning India into an "authoritarian State" and pleads for the pooling of all citizens' expertise irrespective of party. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] PITFALLS IN OUR INDUSTRIAL POLICY URL: https://indianliberals.in/primary-works/pitfalls-in-ouri-ndustrial-policy-m-a-master-nov6-1959/ ### Summary M. A. Master uses this Forum of Free Enterprise pamphlet — reprinted from the Free Press Journal Republic Day Number, 1959 — to argue that India's post-1948 industrial policy, and especially the 1956 Industrial Policy Resolution that followed the Avadi Resolution, has steadily relegated private enterprise to a subordinate role behind a state sector destined, in the Prime Minister's own words, to 'grow and become the dominant feature of the landscape'. Master concedes that even before independence the Bombay Plan of 1944 accepted the need for planning, but contends that the 'first radical shift' came in August 1953 with the nationalisation of air services, followed by the Imperial Bank in 1955, life insurance in 1956, and the constitutional amendment making the compensation question unjusticiable. The First Five-Year Plan's promise that the public sector would enter only where private enterprise was 'unable or unwilling' has, on his reading, been replaced by an ideological doctrine that gives the public sector 'a basic sector, a strategic, important and advancing sector' status across the economy. The second half of the pamphlet builds a case study indictment.… ### Body # PITFALLS IN OUR INDUSTRIAL POLICY *By M. A. MASTER* ## Summary M. A. Master uses this Forum of Free Enterprise pamphlet — reprinted from the Free Press Journal Republic Day Number, 1959 — to argue that India's post-1948 industrial policy, and especially the 1956 Industrial Policy Resolution that followed the Avadi Resolution, has steadily relegated private enterprise to a subordinate role behind a state sector destined, in the Prime Minister's own words, to 'grow and become the dominant feature of the landscape'. Master concedes that even before independence the Bombay Plan of 1944 accepted the need for planning, but contends that the 'first radical shift' came in August 1953 with the nationalisation of air services, followed by the Imperial Bank in 1955, life insurance in 1956, and the constitutional amendment making the compensation question unjusticiable. The First Five-Year Plan's promise that the public sector would enter only where private enterprise was 'unable or unwilling' has, on his reading, been replaced by an ideological doctrine that gives the public sector 'a basic sector, a strategic, important and advancing sector' status across the economy. The second half of the pamphlet builds a case study indictment. Master draws on the State Trading Corporation's monopolisation of cement trade, the price hike to fund road construction at consumer expense, the rate discrimination favouring nationalised airlines and ferries, and the Merchant Shipping Act's near-dictatorial powers over private shipping to show that the rhetoric of 'no policy of discrimination' is hollow. He marshals tax and capital data — Rs. 137 crores collected from business in 1955-56 rising past Rs. 157 crores in 1957-58, against a paid-up private capital of only Rs. 80 crores — to argue that the Second Plan's expectation of Rs. 300 crores from private internal resources is fiscally impossible. The pamphlet closes by invoking Acharya Vinoba Bhave's warning that power has concentrated in 'a handful of people', and asserts that the present trajectory of 'liquidating private enterprise' will lead democracy to give way to dictatorship. A boxed quotation from A. D. Shroff — 'Free Enterprise was born with man and shall survive as long as man survives' — frames the publisher's editorial stance. ## Key points - Master traces an 'onward revolutionary march' from the 1948 Industrial Policy Resolution through the nationalisation of air services (1953), the Imperial Bank (1955), the life insurance companies (1956), and the 1956 Industrial Policy Resolution that placed twelve schedule 'B' industries under State leadership. - He treats the Avadi Resolution and Nehru's 1954-55 Lok Sabha statements as the ideological turning point, citing the PM's claim that under planning the public sector 'must grow and become the dominant feature of the landscape'. - He argues that the First Five-Year Plan's 'public sector where private is unable or unwilling' principle has been quietly overturned in favour of the public sector as a 'basic, strategic, important and advancing sector'. - He attacks the State Trading Corporation's cement monopoly (a Rs. 10 crore profit raised at the consumer's cost) and the rate-fixing rules that let nationalised airlines and railways raise fares while barring private ferry operators from doing the same — what he calls one law for the public sector, another for the private. - He criticises the new Merchant Shipping Act and the Industries (Development and Regulation) Act for handing officials 'extraordinary power' that, he warns, will breed 'corruption and overpowering dictatorship'. - He uses tax and capital-issues data — Rs. 137 crores in business taxes for 1955-56, Rs. 157 crores for 1957-58, against Rs. 80 crores of fresh paid-up capital and only Rs. 37.28 crores raised in 1956 — to argue that the Second Plan's demand for Rs. 300 crores from private internal resources is arithmetically impossible. - He invokes Acharya Vinoba Bhave's warning about power concentrating in the hands of 'not more than 5 or 6' people to argue that the constitutional concentration of wealth and power is shifting from industrialists to 'ministers and the bureaucracy'. - He closes with a prophetic warning that the policy of 'liquidating private enterprise' will end in dictatorship, and the booklet pairs his polemic with framing pull-quotes from Eugene Black of the World Bank and A. D. Shroff. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] Planning & Nationalisation URL: https://indianliberals.in/primary-works/planning-and-nationalization-rethinking-in-india-and-abroad-l-n-birla-dr-n-das-january-12-1967/ ### Summary Published by the Forum of Free Enterprise in January 1967, this pamphlet collects three short addresses on Indian planning by L. N. Birla and Dr. Nabagopal Das (I.C.S. Retd.). The two Birla pieces — reproduced from the Indian Express (November 12, 1966) and Hindusthan Times (October 3, 1966) — indict the Fourth Plan as an exercise in 'wishful' aggregation that has consistently subordinated the Indian consumer to heavy-industry dogma, mounting taxation, and bureaucratic expenditure. Das's contribution opens a comparative survey of how the doctrine of nationalisation and command planning is being rethought in socialist economies, beginning with the USSR's struggle to reconcile state ownership with consumer demand. Together the three essays form a coherent Forum of Free Enterprise argument: that India's planning apparatus must shift from physical-output targets and public-sector expansion to consumer satisfaction, agricultural priority, and a freer role for private enterprise — a corrective the pamphlet draws both from Indian experience under three Plans and from doctrinal reappraisals visible inside the socialist bloc itself. ### Body # Planning & Nationalisation *By L. N. BIRLA, Dr. N. DAS I.C.S. (Retd.)* ## Summary Published by the Forum of Free Enterprise in January 1967, this pamphlet collects three short addresses on Indian planning by L. N. Birla and Dr. Nabagopal Das (I.C.S. Retd.). The two Birla pieces — reproduced from the Indian Express (November 12, 1966) and Hindusthan Times (October 3, 1966) — indict the Fourth Plan as an exercise in 'wishful' aggregation that has consistently subordinated the Indian consumer to heavy-industry dogma, mounting taxation, and bureaucratic expenditure. Das's contribution opens a comparative survey of how the doctrine of nationalisation and command planning is being rethought in socialist economies, beginning with the USSR's struggle to reconcile state ownership with consumer demand. Together the three essays form a coherent Forum of Free Enterprise argument: that India's planning apparatus must shift from physical-output targets and public-sector expansion to consumer satisfaction, agricultural priority, and a freer role for private enterprise — a corrective the pamphlet draws both from Indian experience under three Plans and from doctrinal reappraisals visible inside the socialist bloc itself. ## Essays ### Planning & Nationalisation — Consumer, Forgotten Factor in Indian Planning *By L. N. BIRLA* L. N. Birla argues that fifteen years of perspective planning have failed the Indian consumer because the Plans have privileged producer-goods industries and aggregate GNP arithmetic over the daily needs of the population — food, cloth, housing, milch cattle, education. He marshals statistics on declining per-capita cloth availability, sluggish foodgrain output, and a population spiral that medical progress has accelerated without compensatory family planning, and warns that more than three-fourths of industrial investment going to producer goods is 'unrelated to the realities of living of the masses'. The essay calls for a 'new economic logic' that drops prestige projects like Bokaro, lowers taxation that has crushed corporate savings, and judges the Plan by physical supply rather than financial targets. The consumer, Birla concludes, 'is visibly on the war path', and the violent unrest spreading across the country is the predictable price of austerity preaching unaccompanied by goods. The piece was first published in the Indian Express on November 12, 1966. - Fifteen years of Indian planning have produced disappointing per-capita outcomes — cloth availability fell from 15.8 metres pre-WWII to 14.4 metres in 1965. - Plans wrongly favour producer goods over consumer goods; over three-fourths of industrial investment is earmarked for producer goods. - High taxation has dried up corporate savings (Rs. 112.5 crores in 1963-64) and contributed to inflation. - Prestige projects like Bokaro should be set aside; the capital-output ratio will disappoint. - The Soviet example shows even command economies are turning consumer-oriented, a corrective India should heed. - Consumer-goods industries absorb more labour than capital-goods industries, easing the unemployment backlog of ten million. ### An Alternative to Wishful Planning *By L. N. BIRLA* In this second essay, L. N. Birla turns to the Draft Fourth Plan and finds it a Rs. 23,750-crore exercise in 'dreamstuff' resting on four assumptions — agricultural production stepping up as envisaged, sufficient foreign aid, rising exports, and defence expenditure capped at Rs. 5,500 crores — that are all 'beyond the control of the planners.' He documents that the Third Plan overshot its outlay by Rs. 1,130 crores yet left consumption at distress levels, while Public Sector enterprises returned only 1.2 per cent on capital employed against the planners' assumed 12 per cent and fulfilled only 41 per cent of their physical targets compared with 71 per cent for the Private Sector. From this Birla mounts a structural attack on the assumed complementarity of public and private investment, calling Public Sector organisation 'not an alternative to Private Sector organisation' but a costlier rival that crowds out funds through compulsory instruments and disproportionate taxation. The remedy is to free the entrepreneur to invest in consumer industries, confine Government to infrastructure (power, roads), give agriculture the highest priority and free it from controls, and prefer quick-maturing projects to mystical hopes. The essay closes with the call that 'our planning technique must avoid spinning words and spring to reasoned action — Preferably, action by the people.' It was first published in the Hindusthan Times on October 3, 1966. - Per-capita income fell from Rs. 326 (1960-61) to Rs. 325 (1965-66) at constant prices, despite a Rs. 8,630-crore Third Plan outlay. - All four foundational assumptions of the Draft Fourth Plan lie outside the planners' control. - Public Sector industrial enterprises hit 41% of targets; Private Sector hit 71%; gross profit on Government capital was 1.2%. - Public Sector is 'not an alternative' to Private Sector organisation but a higher-cost competitor for scarce funds. - Bokaro illustrates the trap: Rs. 1,000-crore investment would require steel prices far above current market levels to break even. - Government should retreat to infrastructure (power, roads); the entrepreneur must choose industry, location, and scale; agriculture deserves priority and freedom from controls. ### Re-Thinking on Nationalisation and Centralised Planning in Socialist Countries *By Dr. Nabagopal Das, I.C.S. (Retd.)* Dr. Nabagopal Das opens his address by observing that nationalisation — once 'the linchpin of socialism' — has lost much of its old enchantment even in socialist countries. He sets out a working distinction between socialism and capitalism as simply public versus private ownership of the means of production, noting that an Anglo-Scandinavian model of private ownership with redistributive social services has expanded the meaning of socialism; nonetheless, following Marx, public ownership remains the doctrinal sine qua non of a fully socialist programme. Das then sketches why nationalisation was thought indispensable: free competition would have channelled private investment to high-profit niches rather than to the harmonious development a poor country needs, and only state control of the means of production allows attention to turn to equal opportunity and income redistribution. He begins the comparative case with the USSR, where state ownership delivered command-economy planning but where the bureaucracy was forced to administer what the market does automatically — once scarcity eased, between 1959 and 1964 inventories of textiles and apparel nearly doubled while sales lagged, exposing the system's indifference to consumer choice. (The argument continues past the rendered chunk.) - Nationalisation, once the 'linchpin' of socialism, is being reconsidered even inside socialist states. - Socialism and capitalism reduce to public vs. private ownership of the means of production; equal income distribution is desirable but not essential to socialism. - For Marx, nationalisation was the indispensable pre-requisite of planning. - Free competition would have steered private capital to quick-profit niches rather than balanced development, justifying state ownership in poor countries. - USSR shows the limit: the command economy maximises physical output rather than consumer satisfaction, and once scarcity eased, unsold inventories ballooned. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] PLANNING AT CROSS-PURPOSES URL: https://indianliberals.in/primary-works/planning-at-cross-purposes-s-bhootalingam-december-1970/ ### Summary Delivered as the Fifth A. D. Shroff Memorial Lecture in Delhi on 27 October 1970 and published by the Forum of Free Enterprise in December 1970, S. Bhoothalingam's pamphlet diagnoses what he calls 'planning at cross-purposes' — the chronic failure of Indian planning to harmonise its ends with its means. Writing as Director-General of the National Council of Applied Economic Research and a former senior official, he opens with the empirical embarrassment of the Fourth Plan: a near-final draft surfacing months after launch, railway traffic falling instead of growing by the projected 3.6 per cent, industrial production lagging, fertiliser consumption stagnant, and Plan schemes that 'cost much more, take longer to complete, and when completed take even longer to yield their results.' From that audit Bhoothalingam moves to a structural argument.… ### Body # PLANNING AT CROSS-PURPOSES *By S. BHOOTHALINGAM* ## Summary Delivered as the Fifth A. D. Shroff Memorial Lecture in Delhi on 27 October 1970 and published by the Forum of Free Enterprise in December 1970, S. Bhoothalingam's pamphlet diagnoses what he calls 'planning at cross-purposes' — the chronic failure of Indian planning to harmonise its ends with its means. Writing as Director-General of the National Council of Applied Economic Research and a former senior official, he opens with the empirical embarrassment of the Fourth Plan: a near-final draft surfacing months after launch, railway traffic falling instead of growing by the projected 3.6 per cent, industrial production lagging, fertiliser consumption stagnant, and Plan schemes that 'cost much more, take longer to complete, and when completed take even longer to yield their results.' From that audit Bhoothalingam moves to a structural argument. Indian planning, properly understood, is neither as comprehensive as its detractors fear nor as total as its devotees pretend — it is 'nothing more than public investment in certain sectors and the management of economic activities springing therefrom.' The real choice, he insists, 'is not between planning and no planning, but only between different kinds of planning or between good planning and bad planning.' What has gone wrong is the divorce of Plan from non-Plan: resources painfully mobilised for Plan investment are diverted to ordinary government expenditure, while the Planning Commission is kept off the non-Plan sector that quietly consumes the country's growth. The diagnostic core of the lecture is a sustained attack on the confusion of means with ends. Mobilisation of resources, exchange controls, import controls and Company Law administration have, he argues, 'become truly autonomous and self-contained' — means promoted into objectives in themselves. Corrective regulation breeds vested interests: 'When you cannot do something yourself you are tempted, if you have the power, to stop anyone else from doing it except by your grace and permission.' His prescription is radical recasting rather than abolition: controls should be general in character, work through economic forces rather than against them ('one should use controls as the sailor uses the winds'), and free up the intellectual effort now 'wasted in a perpetual game of hide and seek in a dark and ever-growing jungle.' Bhoothalingam closes by gathering the threads into a liberal frame consistent with the Forum's outlook: the basic objective of planning is 'the development of human personality in a free society through economic growth and social justice', requiring comprehensive planning at the highest level but means that 'facilitate and not hinder the display of constructive energy and initiative.' Without that clarity and steadfastness, he warns, 'planning will continue to be at cross-purposes.' ## Key points - Frames the Fourth Plan's troubles — late drafts, falling railway traffic, sluggish industrial output, stagnant fertiliser consumption — as symptoms of a deeper, recurring crisis in Indian planning rather than a passing aberration. - Redefines Indian planning as narrower than commonly claimed: 'nothing more than public investment in certain sectors' plus indirect management of the rest of the economy, not the encyclopaedic enterprise the Plan documents suggest. - Rejects the dichotomy between planning and no planning, recasting the real choice as one between good and bad planning consistent with democratic government. - Identifies confusion of ends and means as the central malaise — resource mobilisation, exchange control, import control and Company Law administration have become ends in themselves and 'sacred cows'. - Attacks the institutional divorce of Plan from non-Plan expenditure, arguing the non-Plan sector — schools, hospitals, ongoing services — exercises prior claim on resources and falsifies Plan arithmetic. - Argues that the Planning Commission should be one organ of the Central Government, not a separate authority kept off non-Plan activity; planning and implementation must not be divorced. - Calls for radical reform of import controls and detailed industrial regulation: controls should be general, work through economic forces ('as the sailor uses the winds'), and not require discretion exercised by a large number of functionaries. - Locates the lecture's normative core in the freedom of choice as the wellspring of initiative and enterprise, and in growth-with-social-justice pursued through means that do not stifle private effort. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] Planning in India URL: https://indianliberals.in/primary-works/planning-for-prosperity-a-d-shroff-oct8-1960/ ### Summary "Planning in India" is a Forum of Free Enterprise pamphlet by A. D. Shroff, drawn from a talk delivered at Vivekananda College, Madras, on January 17, 1957. Shroff opens by tying sustained political independence to economic strength: with 365 million people to feed and an income roughly one-twenty-eighth of the American level, India has both the need and the room to raise mass living standards. He accepts that planned development is the sensible route, but insists the objective must be lifting people up rather than levelling them down — and illustrates the point with a fable about French Communists discovering, when the country's wealth is divided equally, that the average worker would have to surrender money rather than receive any. Most of the address is a sectoral diagnosis.… ### Body # Planning in India *By A. D. Shroff* ## Summary "Planning in India" is a Forum of Free Enterprise pamphlet by A. D. Shroff, drawn from a talk delivered at Vivekananda College, Madras, on January 17, 1957. Shroff opens by tying sustained political independence to economic strength: with 365 million people to feed and an income roughly one-twenty-eighth of the American level, India has both the need and the room to raise mass living standards. He accepts that planned development is the sensible route, but insists the objective must be lifting people up rather than levelling them down — and illustrates the point with a fable about French Communists discovering, when the country's wealth is divided equally, that the average worker would have to surrender money rather than receive any. Most of the address is a sectoral diagnosis. Food and cloth are India's two consumption priorities, and Shroff walks through the practical limits on rapid agricultural output (the orthodoxy of cultivators toward fertilisers, dependence on rainfall, the river-valley projects' slow germination), the post-Partition disruption to cotton and jute supplies, the gulf between organised mills and handloom weavers, and the heavy seasonal unemployment in the countryside. He repeatedly contrasts the United States — the wealthiest country in the world because every household can satisfy its consumption needs — with Soviet, Hungarian and Polish experience, where heavy-industry priority denuded agriculture and produced economic distress. The criticism of ideology driving priorities is direct: an ideological bias in Government policy, he warns, could be disastrous for the whole country. The closing section is a fiscal critique of the Second Five-Year Plan. Shroff argues that a Rs. 5,300-crore expenditure programme exceeds India's actual resources; the gap is being bridged by Rs. 1,300 crores of additional taxation, Rs. 800 crores of borrowing, and Rs. 1,200 crores of foreign assistance that has not materialised. Deficit financing on this scale, he argues, is inflationary and regressive — the salaried middle class and the rural poor bear the burden through rising prices, while the rich can absorb them. Compulsory deposits and similar ad-hoc levies, imposed without sufficient thinking, will erode the country's future capacity to raise revenue. Throughout, Shroff invokes the Finance Minister's own admission that the Government is neither omniscient nor infallible to urge a flexible mind willing to adapt the Plan to reality rather than insisting on "anything else, nothing but disaster will face this country." ## Key points - Sustained political independence requires economic strength; raising the mass standard of living is the proper objective of planning. - Levelling-down redistribution cannot lift the poor — only a process of levelling up through growth can; the French 37½-million Francs anecdote illustrates the futility of equal-poverty arithmetic. - Food and cloth are India's two consumption priorities; agricultural productivity, not heavy industry, must come first. - Ideology must not be allowed to drive planning priorities; an ideological bias in Government policy could prove disastrous. - The Soviet, Hungarian and Polish experience of starving agriculture and consumer industries to build heavy industry is a cautionary tale, not a model. - The Second Five-Year Plan's Rs. 5,300-crore expenditure outstrips India's resources, with a Rs. 1,200-crore foreign-aid gap and Rs. 1,200 crores of deficit financing creating inflationary pressure. - Deficit financing is regressive: the salaried middle class and the rural poor are squeezed by rising prices while the rich can adjust. - Compulsory deposits and other ad-hoc levies, imposed without sufficient thinking, will damage the country's future taxable capacity. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] PLANNING IN INDIA URL: https://indianliberals.in/primary-works/planning-in-india-a-d-shroff-january-1-1970/ ### Summary Delivered as a talk at Vivekananda College, Madras, on 17 January 1957 and reprinted by the Forum of Free Enterprise, this pamphlet is A. D. Shroff's pointed but reasoned critique of India's Second Five-Year Plan. Shroff opens by establishing his own planning credentials — he had a hand in the 1944 Bombay Plan, drafted by eight businessmen — and accepts that a poor country with a fast-growing population must develop in a planned way. His argument is not against planning as such, but against planning that lets ideology displace economic reality. The central charge is that the government has set political priorities (heavy industry over consumer goods, public sector over private) ahead of practical ones (food and cloth for a population growing by five million a year). He walks through cotton, jute, handloom, and steel to show how partition, ideology, and over-ambition have produced gluts in some sectors and shortages in others.… ### Body # PLANNING IN INDIA *By A. D. Shroff* ## Summary Delivered as a talk at Vivekananda College, Madras, on 17 January 1957 and reprinted by the Forum of Free Enterprise, this pamphlet is A. D. Shroff's pointed but reasoned critique of India's Second Five-Year Plan. Shroff opens by establishing his own planning credentials — he had a hand in the 1944 Bombay Plan, drafted by eight businessmen — and accepts that a poor country with a fast-growing population must develop in a planned way. His argument is not against planning as such, but against planning that lets ideology displace economic reality. The central charge is that the government has set political priorities (heavy industry over consumer goods, public sector over private) ahead of practical ones (food and cloth for a population growing by five million a year). He walks through cotton, jute, handloom, and steel to show how partition, ideology, and over-ambition have produced gluts in some sectors and shortages in others. He warns that the East European experience — Hungary and Poland forced into heavy industry by Soviet pressure — should counsel against the same imbalance in India, and that disregard for consumer demand has historically produced political crises rather than prosperity. The back half of the lecture is a working economist's anatomy of the Plan's finances. The proposed Rs. 5,300 crore public-sector outlay will flow largely into wages, creating purchasing power that the supply side cannot match; the result, Shroff argues, is inflation that erodes the real incomes of salaried and fixed-income people while the rich absorb the shock. He breaks down the gap — Rs. 1,200 crore of deficit financing, a Rs. 900 crore additional-taxation demand, dependence on World Bank and Colombo Plan aid — and insists that the laws of economics cannot be suspended by legislation or political will. Throughout, he frames his dissent as patriotism: it is no humiliation, he says, to admit that the country's resources cannot finance everything that has been promised. ## Key points - Shroff accepts planned development in principle and cites his own role in the 1944 Bombay Plan, but rejects the Second Five-Year Plan as over-ambitious relative to India's resources. - His core indictment is that ideology — heavy industry over consumer goods, public sector over private — has crowded out practical priority-setting around food and cloth for a rapidly growing population. - Agricultural productivity must rise by 10–20% through fertilizers, irrigation, and changed methods; without this, food imports from the U.S. will remain structural rather than transitional. - Sectoral case studies of cotton, jute, handloom, and steel show that ideological organisation (favouring organised mills over handlooms, expanding raw jute without mill capacity) has produced surpluses and shortages simultaneously. - The East European experience — Hungary and Poland forced by Soviet pressure into heavy industry at the cost of consumer goods — is offered as a cautionary parallel for India. - The Rs. 5,300 crore public-sector outlay will be spent largely as wages, creating effective demand without matching supply and forcing prices up; salaried and fixed-income households absorb the loss while the rich can adjust. - Deficit financing of Rs. 1,200 crore and additional taxation of Rs. 900 crore reflect a planning gap; even sound taxes have a psychological ceiling beyond which collections actually fall. - Shroff insists that the laws of economics — particularly supply and demand — operate regardless of finance ministers' wishes, and that compulsory deposits and other expedients risk destabilising the economy. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] Planning Machinery Should Be Placed Above Politics URL: https://indianliberals.in/primary-works/planning-machinery-should-be-placed-above-politics-november-9-1962/ ### Summary This short Forum of Free Enterprise pamphlet reproduces an unsigned editorial from The Economic Times of 6 September 1962. The editorial complains that, amid the storm of public criticism over the shortfalls of the Third Five-Year Plan, the one institution that has so far escaped its share of blame — the Planning Commission itself — is the very body whose work is at fault. Even Planning Minister Nanda's own report to Parliament on the first year of the Plan, the editorial notes, was a 'scrappy, disjointed narration of truths and half-truths'. The core charge is technical and political. Despite a vast planning apparatus — the Perspective Planning Division, central and state planning cells, panels of economists and statisticians, the Indian Statistical Institute, the Central Statistical Organisation, and the Reserve Bank's Research Department — the Plan's projections in cement, steel, electricity, coal, transport and fertilisers have 'gone hay-wire' within a year of publication.… ### Body # Planning Machinery Should Be Placed Above Politics ## Summary This short Forum of Free Enterprise pamphlet reproduces an unsigned editorial from The Economic Times of 6 September 1962. The editorial complains that, amid the storm of public criticism over the shortfalls of the Third Five-Year Plan, the one institution that has so far escaped its share of blame — the Planning Commission itself — is the very body whose work is at fault. Even Planning Minister Nanda's own report to Parliament on the first year of the Plan, the editorial notes, was a 'scrappy, disjointed narration of truths and half-truths'. The core charge is technical and political. Despite a vast planning apparatus — the Perspective Planning Division, central and state planning cells, panels of economists and statisticians, the Indian Statistical Institute, the Central Statistical Organisation, and the Reserve Bank's Research Department — the Plan's projections in cement, steel, electricity, coal, transport and fertilisers have 'gone hay-wire' within a year of publication. National income grew at three per cent against the assumed five; wholesale prices, far from staying stable, rose 3.4 per cent on the official index and 4½ per cent on the Economic Times index; Central Government undertakings have made no progress towards their promised Rs. 300-crore surplus; and exports of Rs. 656 crores in year one fall well short of the Rs. 740-crore annual average required. Foreign-exchange needs were under-estimated and even the invisibles balance has turned adverse. The editorial's argument turns from data to structure. The fashionable apparatus of 'model building', 'econometric models', 'input-output analysis' and 'flow-of-funds analysis' has not prevented basic structural variables from drifting away from the pre-determined estimates. The Planning Commission cannot plead a lack of power — it has 'functioned in several fields as a super-Cabinet'. Its peculiar composition — its top membership being only a concentrated version of the Central Cabinet itself — places planning in India even above governmental censure, so that development targets become 'a mere echo of political whims and compromise' and economic estimates are sometimes 'carefully worked backwards' from pre-determined conclusions. The remedy proposed is institutional autonomy: planning will improve only when the planners work in a freer atmosphere, with a personality of their own, free from the vagaries of political exigency, and in a setting where planning and administrative authorities can freely and fearlessly exchange criticism. Otherwise, the editorial concludes, Indian development will continue to be 'the unfortunate essay in misdirected energy and money that it is today'. ## Key points - The Planning Commission has uniquely escaped blame for the Third Plan's shortfalls, even as the Government and administrative machinery have been heavily criticised. - Even Planning Minister Nanda's first-year report to Parliament was characterised by the editorial as a scrappy, disjointed narration of truths and half-truths. - Despite a vast planning apparatus and Reserve Bank research support, projections for cement, steel, electricity, coal, transport and fertilisers have gone hay-wire within a year of the Plan's publication. - National income grew only three per cent against a five per cent target; wholesale prices rose 3.4 per cent (official) and 4½ per cent (Economic Times index); Central Government undertakings made no progress toward their Rs. 300-crore surplus. - Exports of Rs. 656 crores in the first year fall short of the Rs. 740-crore annual average required, and foreign-exchange needs were under-estimated while invisibles turned adverse. - Imported techniques — model building, econometric models, input-output analysis, flow-of-funds analysis — have not prevented basic structural drift from pre-determined estimates. - Structural diagnosis: the Planning Commission's top membership is a concentrated version of the Central Cabinet, so planning sits above governmental censure and targets become an echo of political whims and compromise. - Reform demands institutional autonomy — planners with a personality of their own, free from political exigency, with frank mutual criticism between planning and administrative authorities. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] Plans and Perspectives URL: https://indianliberals.in/primary-works/plans-and-perspectives-by-bg-verghese-january-8-1961/ ### Summary B. G. Verghese's 'Plans and Perspectives', reproduced by the Forum of Free Enterprise from The Times of India of 14 December 1960, opens with a sharp diagnostic claim: 'Two kinds of planning co-exist in Delhi each destructive of the other.' The Government, Verghese argues, has become so preoccupied with noticing this detail or perhaps with accepting this situation as a reflection of its own ambivalent thinking, that the real object of planning — to promote production and progress and not thwart initiative and inhibit growth — has been lost. He uses the case of natural gas at the Naharkatiya and Barauni oilfields in Assam to anchor the critique with hard numbers: roughly 38 million cubic feet a day of 'associated' gas (rising with the production of 2.75 million tons of refined oil), plus eleven million cubic feet of 'non-associated' gas, of which only a fraction is currently being put to use.… ### Body # Plans and Perspectives *By B. G. Verghese* ## Summary B. G. Verghese's 'Plans and Perspectives', reproduced by the Forum of Free Enterprise from The Times of India of 14 December 1960, opens with a sharp diagnostic claim: 'Two kinds of planning co-exist in Delhi each destructive of the other.' The Government, Verghese argues, has become so preoccupied with noticing this detail or perhaps with accepting this situation as a reflection of its own ambivalent thinking, that the real object of planning — to promote production and progress and not thwart initiative and inhibit growth — has been lost. He uses the case of natural gas at the Naharkatiya and Barauni oilfields in Assam to anchor the critique with hard numbers: roughly 38 million cubic feet a day of 'associated' gas (rising with the production of 2.75 million tons of refined oil), plus eleven million cubic feet of 'non-associated' gas, of which only a fraction is currently being put to use. The Nunmati refinery uses some, another 27 million cubic feet is meant to be utilised by 1962-63, and 'all this gas must be utilised or will have to be flared.' The second half of the leaflet narrates how the State of Assam and the Union Government have responded — a 50,000 kW thermal station at Naharkatiya, a fertiliser plant of 32,000 tons of nitrogen per annum, four public sector projects projected to absorb about 22 million cubic feet a day, a cement plant delayed for want of limestone, and a separate gas pipeline to Tinsukia and Dibrugarh. But Verghese is most exercised by what has happened to the private sector. An absolute minimum of 38 million cubic feet of gas per day will soon be available, of which not less than 16 million cubic feet must either be used or be flared, and proposals from licensees offering capital and foreign collaborators — for synthetic rubber, intermediates, chemicals, polythene, carbon black, a steel plant at Bareilly — have been quietly blocked on the ground that petro-chemicals are 'strategic', and so must be reserved for the public sector. The Industrial Policy Resolution, he writes, was 'not drafted with any profitability test in view,' and the practical effect is that 16 million cubic feet of associated gas, equivalent to about 350,000 tons of oil per annum, are at risk of being wasted while the public-sector alternative drags on. The closing pages widen the lens from gas to politics. Verghese ties the under-utilisation of Naharkatiya gas to the 'cultural' aspects of the recent Assam riots, to communal discontent, and to an Assam manifesto cited as evidence that ordinary people would 'be denied the right to provide work for its people and the opportunity of advancement to satisfy some fad.' His verdict, set out as the leaflet's parting line, is unsparing: 'Naharkatiya gas is only a symbol of a wider malaise — an ideological masochism, an infirmity of purpose and a complete disregard of the cardinal fact that we have no time. It is already high time.' A footer reminds the reader that the views expressed in the leaflet do not necessarily represent those of the Forum of Free Enterprise. ## Key points - Verghese frames Indian planning as internally contradictory: two competing kinds of planning operate in Delhi simultaneously, each destructive of the other. - He uses the Naharkatiya and Barauni gas fields as a case study, quantifying roughly 38 million cubic feet/day of 'associated' gas plus 11 million cubic feet of 'non-associated' gas that must be utilised or flared. - On the public-sector side, the Assam Government plans a 50,000 kW thermal station and a gas pipeline to Tinsukia and Dibrugarh, while the Union Government has approved a fertiliser plant for 32,000 tons of nitrogen per annum and four projects absorbing about 22 million cubic feet/day. - Verghese argues that private-sector licensee proposals — for synthetic rubber, polythene, carbon black, and a steel plant at Bareilly, backed by capital and foreign collaborators — have been blocked by the Industrial Policy Resolution's classification of petro-chemicals as 'strategic' and reserved for the public sector. - He estimates 16 million cubic feet of 'associated' gas (the equivalent of 350,000 tons of oil per annum) is at risk of being flared because of regulatory delay rather than economic necessity. - Strategic-industry reservation, he contends, was drafted without any profitability test and amounts to a refusal of corporate profits as a legitimate source of capital formation. - He links the gas under-utilisation to the recent Assam riots and a perceived 'cultural' upheaval, citing local discontent at being denied work for the sake of doctrine. - The leaflet's polemical centre is its closing aphorism: Naharkatiya gas is only a symbol of a wider malaise — 'ideological masochism, an infirmity of purpose and a complete disregard of the cardinal fact that we have no time.' --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] PLURALISM & MIXED ECONOMY — A BASIS FOR CENTRE-STATE RELATIONS URL: https://indianliberals.in/primary-works/pluralism---mixed-economy-a-basis-for-centre-state-relations-v-k-narasimhan-february-14-1978/ ### Summary Delivered as the A. D. Shroff Memorial Lecture at Bangalore on 27 October 1977 and published by the Forum of Free Enterprise in February 1978, V. K. Narasimhan's pamphlet argues that India's tangled centre-state relations cannot be resolved by clinging to any monolithic 'ism'. Speaking in the immediate aftermath of the Emergency, he treats the rise of the socialist creed since Nehru's time as having so thoroughly subordinated individual freedom to the goal of equality that constitutional checks, federal balance, and the private sphere of voluntary action have all been hollowed out. Against this drift he sets a 'pluralist approach': the federal architecture of the Constitution, the diffusion of power among states and groups, and a genuinely mixed economy in which the private sector is treated as an affirmative good rather than a 'grudging' admission. On centre-state relations, Narasimhan reads the 1967 elections as the moment when the unitary illusion of a single dominant party broke down, leaving the country with a permanent pattern of governments of different complexions in different states.… ### Body # PLURALISM & MIXED ECONOMY — A BASIS FOR CENTRE-STATE RELATIONS *By V. K. Narasimhan* ## Summary Delivered as the A. D. Shroff Memorial Lecture at Bangalore on 27 October 1977 and published by the Forum of Free Enterprise in February 1978, V. K. Narasimhan's pamphlet argues that India's tangled centre-state relations cannot be resolved by clinging to any monolithic 'ism'. Speaking in the immediate aftermath of the Emergency, he treats the rise of the socialist creed since Nehru's time as having so thoroughly subordinated individual freedom to the goal of equality that constitutional checks, federal balance, and the private sphere of voluntary action have all been hollowed out. Against this drift he sets a 'pluralist approach': the federal architecture of the Constitution, the diffusion of power among states and groups, and a genuinely mixed economy in which the private sector is treated as an affirmative good rather than a 'grudging' admission. On centre-state relations, Narasimhan reads the 1967 elections as the moment when the unitary illusion of a single dominant party broke down, leaving the country with a permanent pattern of governments of different complexions in different states. Rather than treating this as a calamity, he argues it should force the centre to devolve real fiscal and policy responsibility — particularly in agriculture, health, education, transport and irrigation — and to confine itself to coordination, allowing each state to set priorities suited to its own backgrounds and resources. He warns that the centralisation of finance has so eroded states' initiative that they now spend more energy extracting funds from New Delhi than husbanding them. On the economy, he indicts the steady expansion of the state-owned sector — insurance, electricity, road transport, banking, trade, and the standing threat of further nationalisation — as 'hardly conducive' to a democratic order. The framework of democracy, he insists, requires a genuinely mixed economy and not a predominantly socialised one; every addition to the state sector must be independently justified, never assumed. Examples drawn from the Voluntary Health Service and the Public Health Centre at Madras illustrate how voluntary, group-based action can serve public needs more imaginatively than monopoly state provision. Narasimhan closes by invoking Gandhiji's vision of self-sufficient village communities as the 'pluralists' paradise', conceding that industrialisation and urbanisation make that ideal utopian, but urging that its spirit — the deliberate diffusion of power and the encouragement of voluntary cooperation — be carried into a modern, multilingual, multi-religious India. ## Key points - Frames the lecture as a tribute to A. D. Shroff, whose 1956 founding of the Forum of Free Enterprise meant 'swimming against a strong socialist current' that was both fashionable and entrenched in public policy. - Identifies the over-readiness with which the socialist credo was accepted as the root cause of the neglect of individual freedom and basic human rights in post-Independence India. - Reads the 1967 general election as the watershed that broke the 'unitary' overhang of one-party rule and made a genuinely federal, pluralist Centre-State pattern unavoidable. - Argues that the constitutional distribution of powers between Centre and States is only 'quasi-federal' and that this bias toward Delhi has produced excessive centralisation of economic policy, planning and finance. - Calls for devolving primary responsibility for agriculture, health, education, irrigation, road transport and urban development to the states, with the Centre confined to coordination and advice. - Treats the continuous expansion of state-owned sectors — insurance, electricity, road transport, banking, trade — as 'hardly conducive' to democracy, and demands that every enlargement of the state sector be positively justified. - Defends the citizen's Fundamental Rights under Chapter III as a 'strong and lively' check on abuse of state power, but insists vigilant public opinion matters more than recourse to the courts. - Reads the Emergency of 1975-77 as proof that 'the masses have been willing to sacrifice liberty for security' and that the slow, inefficient workings of democracy create their own corruptions which authoritarianism then exploits. - Recovers Gandhi's emphasis on voluntary, cooperative activity at the widest possible scale as the pluralist core of an Indian liberalism adapted to a multi-lingual, multi-religious nation. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] Population and Economic Development In India URL: https://indianliberals.in/primary-works/population-and-economic-development-in-india-by-nr-narayan-murthy/ ### Summary This booklet reproduces the 38th A. D. Shroff Memorial Lecture, delivered by N. R. Narayana Murthy in Mumbai on 8 April 2005 and published by the Forum of Free Enterprise. An introduction by Minoo R. Shroff frames the lecture within the Forum's classical-liberal tradition, recalling A. D. Shroff's stand against the "ominous clouds of socialism" gathering over 1950s India and crediting Shroff — and later Nani Palkhivala — with sustaining a three-decade campaign for free enterprise whose fruits, he argues, India is now harvesting through liberalisation. Murthy's lecture takes up the "sixty-four million dollar question" of whether India's billion-strong, fast-growing population is a drag or an opportunity. His answer is neither in itself: drawing on demographic comparisons with China, the East Asian tigers, and the ageing developed economies, he reframes the issue as a "demographic window of opportunity" that converts into growth only when accompanied by "good human capital" — a workforce equipped with skills, schooling, health, and labour-market access.… ### Body # Population and Economic Development In India *By N. R. Narayana Murthy* ## Summary This booklet reproduces the 38th A. D. Shroff Memorial Lecture, delivered by N. R. Narayana Murthy in Mumbai on 8 April 2005 and published by the Forum of Free Enterprise. An introduction by Minoo R. Shroff frames the lecture within the Forum's classical-liberal tradition, recalling A. D. Shroff's stand against the "ominous clouds of socialism" gathering over 1950s India and crediting Shroff — and later Nani Palkhivala — with sustaining a three-decade campaign for free enterprise whose fruits, he argues, India is now harvesting through liberalisation. Murthy's lecture takes up the "sixty-four million dollar question" of whether India's billion-strong, fast-growing population is a drag or an opportunity. His answer is neither in itself: drawing on demographic comparisons with China, the East Asian tigers, and the ageing developed economies, he reframes the issue as a "demographic window of opportunity" that converts into growth only when accompanied by "good human capital" — a workforce equipped with skills, schooling, health, and labour-market access. Without that, he insists, large numbers turn into a liability. He stitches the argument together with a dense statistical comparison: India's 1.5% population growth still adds 16 million people a year against China's 10; India ranks 127th of 177 on the Human Development Index with 39% adult illiteracy and 64% child malnourishment; 27% of urban Indians lack sanitation; the water table is falling six feet annually; half of India's 329 million hectares of soil are already degraded. He calls for stabilising population at 1.7 billion by 2045 through replacement-level fertility of 2.1 by 2010, achieved via state-level performance targets, NGO involvement, women's literacy, and primary healthcare — citing Kerala and the southern states as proof of concept against the high-fertility "Bimaru" north. The closing chapters press a twin economic-and-environmental brief: India must simultaneously stabilise population, raise GDP growth to 8–9%, reform labour markets, scrap distorting subsidies on fuel and flat-rate electricity, and "leapfrog" to clean-fuel transport, bioengineered crops, and efficient sanitation. The Western consumption model, he warns, is unrepayable. Quoting Martin Luther King, George Eliot, and Albert Einstein in turn, Murthy ends on the Forum's preferred register — that India has the talent to convert demographic burden into demographic dividend, provided leaders manufacture the urgency for change. ## Key points - The text is the 38th A. D. Shroff Memorial Lecture (Mumbai, 8 April 2005), with a Forum of Free Enterprise introduction by Minoo R. Shroff situating it in the classical-liberal lineage of A. D. Shroff and Nani Palkhivala. - Murthy reframes the population question: a billion Indians are neither inherently a drag nor an asset — they convert into growth only as 'good human capital' supported by education, healthcare, and labour-market flexibility. - He benchmarks India relentlessly against China — fertility (3.3 vs near-replacement), HDI rank (127/177), illiteracy (39% vs 9%), poverty (26% vs 11%), and per-capita income ($530 vs $1,100 in 2003). - He treats the 'demographic window' as time-limited: by 2020 India will hold a surplus of 47 million working-age people against US/China/Japan shortages, but only if growth is stepped up to 8% and jobs are actually created. - Stabilisation target: 1.7 billion by 2045, via replacement fertility of 2.1 by 2010, achieved through state-level performance targets, women's literacy, primary healthcare, and NGO-led local family planning — citing Kerala and the southern states as exemplars. - The lecture's environmental case argues that resource degradation already costs India 4.5% of GDP, water scarcity will bite by 2025, and Western consumption patterns are unrepayable — making clean-technology leapfrogging and subsidy reform mandatory. - Policy prescriptions are practical and state-capacity-oriented: 66,000 new primary schools and 3,000 new health centres a year, 3% annual food output growth, removal of fuel and flat-rate electricity subsidies, and labour-market liberalisation. - The framing is recognisably Forum-liberal — free enterprise as 'affirmative good' (Eugene Black on the back cover), private-sector productivity as the engine of human-capital uplift, government's role recast as regulator and enabler. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] Population and Economic Liberalization URL: https://indianliberals.in/primary-works/population-and-economic-liberalization-s-l-rao-november-18-1995/ ### Summary Delivered as the 30th A. D. Shroff Memorial Lecture at the Forum of Free Enterprise in Bombay on 3 November 1995, S. L. Rao's address argues that the economic freedoms India has begun to enjoy since 1991 must now be extended to population policy. Rather than persisting with target-driven family planning and large-scale female sterilisation, Rao calls for a re-orientation of government effort toward investment in human capital — child nutrition, infant mortality reduction, female schooling, adult female literacy, maternal health and basic preventive services — delivered through better-targeted programmes that actually reach the poor. The heart of the lecture is a comparative reading of India against China, Thailand, Malaysia and South Korea. Drawing on the National Family Health Survey (1992), the 1995 Human Development Report and NCAER work, Rao shows that India's East Asian neighbours have moved faster on fertility, infant mortality, female life expectancy, schooling and inequality because they invested earlier in women's education, health and labour-force participation, built credible local government, and (in China's case) carried out land reform and basic social security.… ### Body # Population and Economic Liberalization *By S.L. RAO* ## Summary Delivered as the 30th A. D. Shroff Memorial Lecture at the Forum of Free Enterprise in Bombay on 3 November 1995, S. L. Rao's address argues that the economic freedoms India has begun to enjoy since 1991 must now be extended to population policy. Rather than persisting with target-driven family planning and large-scale female sterilisation, Rao calls for a re-orientation of government effort toward investment in human capital — child nutrition, infant mortality reduction, female schooling, adult female literacy, maternal health and basic preventive services — delivered through better-targeted programmes that actually reach the poor. The heart of the lecture is a comparative reading of India against China, Thailand, Malaysia and South Korea. Drawing on the National Family Health Survey (1992), the 1995 Human Development Report and NCAER work, Rao shows that India's East Asian neighbours have moved faster on fertility, infant mortality, female life expectancy, schooling and inequality because they invested earlier in women's education, health and labour-force participation, built credible local government, and (in China's case) carried out land reform and basic social security. Within India, Kerala and Tamil Nadu confirm the same lesson: relatively poor states with strong female literacy and health systems have outperformed the demographically worst-off "BIMARU" group of Bihar, Madhya Pradesh, Rajasthan and Uttar Pradesh. From this evidence Rao draws an explicitly liberal conclusion. Economic development alone is not the best contraceptive; women's status is. The state's job is not to set sterilisation targets but to create the "enabling environment" — schools, clinics, nutrition, panchayat-level participation — in which families freely choose smaller size. To finance and sustain this, India must press ahead with trade liberalisation, disinvest from public enterprises, decentralise political power, and reduce the role of government in running the economy, so that public resources and managerial talent can be focused on human development. Population policy, in his framing, becomes a continuation of the 1991 economic reforms by other means. ## Key points - Rao's central thesis: the economic liberalisation begun in 1991 must be extended to population policy, replacing target-driven family planning with investment in human capital and an 'enabling environment' for families to choose smaller size. - He traces fifty years of Indian population control — from the 'clinic' approach of the First Five Year Plan, through 'extension' education, the coercive sterilisation 'camps' of the early 1970s, the Emergency watershed, and the continuing target-and-incentive regime — and judges all of them as having coerced women and failed on outcomes. - Cross-country comparison with China, Thailand, Malaysia and South Korea shows India lagging on Total Fertility Rate, infant mortality, female life expectancy, female literacy, female labour-force participation and inequality, despite India having started reforms only in 1991. - Within India, Kerala and Tamil Nadu demonstrate that relatively poor states with strong female literacy and health services can beat richer 'BIMARU' states (Bihar, Madhya Pradesh, Rajasthan, Uttar Pradesh, and to a lesser extent Andhra and Orissa) on demographic and human-development indicators. - Female literacy, female labour-force participation, rising age at marriage, and reduction of gender bias in child survival emerge as the most powerful levers on fertility — economic growth by itself is not the best contraceptive. - Social service delivery in India fails because of poor targeting, leakage, excessive administrative cost, low motivation of workers, and a wide gulf between citizens and the state; the 73rd/74th panchayat amendment is welcomed as a step toward participatory delivery. - Public policy implications: invest in child nutrition and health, infant mortality reduction, female schooling, adult female literacy, maternal health and care of older girls; ensure cheap food, immunisation, safe water and disease control; and provide minimal social security to the aged poor. - These investments require fiscal space, which Rao argues will only come from continuing trade liberalisation, disinvestment from government-owned enterprises, decentralisation of political power, and a smaller managerial role for the state in the economy. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] Population, Development and Environment URL: https://indianliberals.in/primary-works/population-development-and-environment-by-sp-godrej-december-15-1994/ ### Summary Published by the Forum of Free Enterprise in December 1994, this twelve-page booklet reproduces S. P. Godrej's keynote address to a WWF-India seminar in New Delhi in November 1994. Godrej, an industrialist and Vice-President of the World Wide Fund for Nature - India, argues that the new economic policy's promise will not be realised so long as India fails to confront its 'population holocaust'. Development, environment and population, he contends, constitute a trinity in which the third element relentlessly degrades the other two: India must support 16 per cent of the world's population on 2.5 per cent of its land and 1.5 per cent of its income, while 170 million go hungry, 48 per cent remain illiterate, and 1.3 million hectares of forest are cleared every year. The essay reads as a polemic of missed opportunities. Godrej notes that India was the first country to adopt family planning as state policy and the first to open a birth-control clinic (Mysore, 1930), yet has fallen behind Sri Lanka, Korea, Taiwan, Indonesia and Japan.… ### Body # Population, Development and Environment *By S. P. GODREJ* ## Summary Published by the Forum of Free Enterprise in December 1994, this twelve-page booklet reproduces S. P. Godrej's keynote address to a WWF-India seminar in New Delhi in November 1994. Godrej, an industrialist and Vice-President of the World Wide Fund for Nature - India, argues that the new economic policy's promise will not be realised so long as India fails to confront its 'population holocaust'. Development, environment and population, he contends, constitute a trinity in which the third element relentlessly degrades the other two: India must support 16 per cent of the world's population on 2.5 per cent of its land and 1.5 per cent of its income, while 170 million go hungry, 48 per cent remain illiterate, and 1.3 million hectares of forest are cleared every year. The essay reads as a polemic of missed opportunities. Godrej notes that India was the first country to adopt family planning as state policy and the first to open a birth-control clinic (Mysore, 1930), yet has fallen behind Sri Lanka, Korea, Taiwan, Indonesia and Japan. He blames the political backlash from Emergency-era coercion ('we threw out the baby with the bath water!'), an over-concentration on economic growth at the expense of health and education, a 'chalta hai, chalne do' fatalism that mistakes karma and astrology for thought, and 'religious' zeal around the Five-Year Plans. He invokes Gandhi on village uplift, J. R. D. Tata on a 'global concern' for population, Karan Singh on a national movement for population control, and the Pearson Commission's warning that no other phenomenon 'casts a darker shadow' over development. His prescriptions are positive rather than coercive: sound education, crash programmes for female literacy (citing Kerala's example, where rising literacy reduces fertility), trade unions as carriers of awareness, committed media, scientists and 'medical men particularly' agitating against the conditions that breed disease, and electoral incentives that reward politicians who plan their own families. Godrej praises WWF-India's expanding network of branches and its Pirojsha Godrej National Conservation Centre, lauds the Grow More Food Campaign and the Earth Summit/Cairo agendas while faulting them for sidelining population, and closes by tying the booklet's argument to the Forum of Free Enterprise tradition with framing quotations from A. D. Shroff ('Free Enterprise was born with man and shall survive as long as man survives') and Eugene Black on private enterprise as 'an affirmative good'. ## Key points - Frames development, environment and population as a trinity in which uncontrolled population growth inevitably degrades the other two. - Marshals stark comparative data: India carries 16 per cent of world population on 2.5 per cent of its land and 1.5 per cent of its income; 170 million go hungry and 48 per cent remain illiterate. - Reads India's family-planning record (first to adopt it as state policy, first birth-control clinic in Mysore 1930) as a story of squandered firsts compared to Sri Lanka, Korea, Taiwan, Indonesia and Japan. - Blames the Emergency's coercive excesses for politically discrediting the family-planning movement: 'we threw out the baby with the bath water!' - Argues that excess concentration on economic growth has starved health and education; cites Kerala and partially Tamil Nadu as proofs that welfare investment lowers fertility. - Faults Rio's Earth Summit and the Cairo Conference for prioritising contraception, abortion and women's rights over population control itself, while still endorsing female literacy as the most powerful demographic lever. - Rejects fatalistic 'chalta hai, chalne do' cultural attitudes, belief in karma and astrology, and 'religious' faith in Five-Year Plans as traditional weaknesses obstructing demographic transition. - Proposes positive solutions — sound education, crash programmes for female literacy, trade-union mobilisation, a committed media, doctors as advocates, and an electoral norm that withholds tickets from politicians who do not practise small-family planning. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] Press and Private Enterprise in a Democracy URL: https://indianliberals.in/primary-works/press-and-private-enterprise-in-a-democracy-by-njn-september-9-1963/ ### Summary Published as a Forum of Free Enterprise leaflet on 9 September 1963 and reproduced from the Times of India of 15 April 1963, this short polemic — signed only with the initials N. J. N. — challenges the gap between the Indian government's rhetorical fealty to press freedom and what the author sees as its actual record of harassment, favouritism and slogan-mongering against newspapers. The opening pages target a Government of India directive that permitted papers under 10,000 copies to expand at will while requiring 'general guidance' from the Registrar of Newspapers for larger papers; the author reads this as a deliberate effort to reward small, pliant titles and discipline the independent ones, and asks whether any paper that accepts newsprint favours from government can remain objective. The second half broadens the indictment. The author argues that hostile slogans such as 'jute press' and 'monopoly' have been mainstreamed by Nehru himself — most recently at an A.I.C.C. session denouncing newspapers as 'wholly undesirable and objectionable' — and amplified by Congressmen, Communists and 'leader-writers' who have built a career of disparaging the press.… ### Body # Press and Private Enterprise in a Democracy *By N. J. N.* ## Summary Published as a Forum of Free Enterprise leaflet on 9 September 1963 and reproduced from the Times of India of 15 April 1963, this short polemic — signed only with the initials N. J. N. — challenges the gap between the Indian government's rhetorical fealty to press freedom and what the author sees as its actual record of harassment, favouritism and slogan-mongering against newspapers. The opening pages target a Government of India directive that permitted papers under 10,000 copies to expand at will while requiring 'general guidance' from the Registrar of Newspapers for larger papers; the author reads this as a deliberate effort to reward small, pliant titles and discipline the independent ones, and asks whether any paper that accepts newsprint favours from government can remain objective. The second half broadens the indictment. The author argues that hostile slogans such as 'jute press' and 'monopoly' have been mainstreamed by Nehru himself — most recently at an A.I.C.C. session denouncing newspapers as 'wholly undesirable and objectionable' — and amplified by Congressmen, Communists and 'leader-writers' who have built a career of disparaging the press. He insists no single agency or family controls all the newspapers, magazines and weeklies in the country, and that what looks like a chain is in fact a sustained conflict of different views and ideas. Defending career editors as a 'few individuals' whose tradition-bound judgment is more reliable than that of Ministers, he reminds readers that it was these same journalists who warned of the Chinese threat and the inadequacies of Nehru's China policy years before the crisis broke. He closes with the proposition that 'the greatest of all Press freedoms is freedom from Government interference and prejudice,' warning that if constant vilification is not replaced by genuine understanding, the loser will be democracy itself, not just the press. ## Key points - Frames Indian press freedom as a platitude routinely mouthed by Ministers while the Government's actual conduct is riddled with anti-liberal prejudice and favouritism. - Attacks a Ministry of Information and Broadcasting order that lets newspapers under 10,000 copies expand freely but requires 'general guidance' from the Registrar of Newspapers for larger papers — read as a sanctioned vehicle for discriminating against independent titles. - Argues that government newsprint allocations are a covert form of patronage and that any paper accepting such favours cannot credibly claim objectivity. - Catalogues the slogans — 'jute press', 'monopoly', 'cute press' — used to discredit the privately owned press, and traces them to Nehru's own remarks at an A.I.C.C. session against 'personal attacks'. - Disputes the monopoly charge empirically: no single person, agency or family controls all newspapers, magazines and weeklies in India; what critics call a chain is actually a competing field of views and ideas. - Defends career editors and journalistic tradition against the Prime Minister's dismissal of them as having mental equipment 'slightly above zero', noting that it was journalists who first warned of the Chinese threat and the failures of non-alignment. - Worries that Government policy is shifting from criticism of newspapers to building up a class of dependent, smaller papers willing to trade independence for state favours. - Concludes that the greatest press freedom is freedom from Government interference and prejudice, and that constant vilification ultimately injures democracy rather than just the press. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] PRESS FREEDOMS AND HUMAN RIGHTS URL: https://indianliberals.in/primary-works/press-freedoms-and-human-rights-c-r-irani-january-16-1978/ ### Summary C. R. Irani's A. D. Shroff Memorial Lecture, delivered for the Forum of Free Enterprise on 19 October 1977 and issued as a booklet on 16 January 1978, argues that press freedoms are not adjacent to human rights but constitutive of them. Irani opens with US Secretary of State Cyrus Vance's three-part definition of human rights — protection from governmental violation of the person, fulfilment of basic needs, and political and civil liberties — and uses Solzhenitsyn's image of peoples who 'soar unhampered over the peaks of freedom' only to lose the will to defend it. His diagnosis is that free peoples are seduced into slavery because they are unwilling to pay the continuing price of liberty. The centre of the lecture is a first-hand narrative of the assault on the Indian press from 1969 onward, climaxing in the Emergency of 1975.… ### Body # PRESS FREEDOMS AND HUMAN RIGHTS *By C. R. IRANI* ## Summary C. R. Irani's A. D. Shroff Memorial Lecture, delivered for the Forum of Free Enterprise on 19 October 1977 and issued as a booklet on 16 January 1978, argues that press freedoms are not adjacent to human rights but constitutive of them. Irani opens with US Secretary of State Cyrus Vance's three-part definition of human rights — protection from governmental violation of the person, fulfilment of basic needs, and political and civil liberties — and uses Solzhenitsyn's image of peoples who 'soar unhampered over the peaks of freedom' only to lose the will to defend it. His diagnosis is that free peoples are seduced into slavery because they are unwilling to pay the continuing price of liberty. The centre of the lecture is a first-hand narrative of the assault on the Indian press from 1969 onward, climaxing in the Emergency of 1975. Irani, then Managing Director of The Statesman, recounts the 'carrot-and-stick' regime used against prestige editors — attempts to take over The Statesman by stacking its board, the cutting of the Indian Express's electricity supply, MISA arrests of journalists, full pre-censorship, and the PPOMA legislation slipped into the Ninth Schedule to head off legal challenge. He pays tribute to the 'brave little band' of dissident editors — Gorwala's Opinion, Raj Mohan Gandhi's Himmat, N. G. Goray's Janata, Thatte's Sadhana, Minoo Masani's Freedom First — and to advocates such as Soli Sorabjee who carried the press's case into the Bombay High Court before Justice Tulzapurkar. Irani then attacks the construction of Samachar as a single news pool, framed as an instrument of state propaganda that destroyed credibility, and turns to the wider doctrinal argument made by some Third World governments under UNESCO auspices that economic development justifies state direction of news. He rejects the trade-off, citing The Economist's verdict after the Lok Sabha elections that 'no one will ever be able to claim again that there is a choice between freedom and bread.' Personal anecdotes — a Bombay customs officer who quietly waved him through after the Emergency, the 'halaas ordinary people' who kept resistant editors going — round out a closing prescription: the press's duty is to report objectively, analyse logically, and criticise fearlessly, always with an ear to the voice of dissent. ## Key points - Frames press freedom as constitutive of human rights, anchoring the case in Cyrus Vance's April 1977 Georgia Law School speech and its three-part definition (personal integrity, basic needs, political and civil rights). - Diagnoses, via Solzhenitsyn, that free peoples lose liberty because they will not pay its continuing price — 'it is only this unwillingness to pay a proper price for liberty that seduces people to slavery.' - Dates the assault on the Indian press to 1969, escalating in 1971 with a plan to put the press in a 'strait-jacket' via two cabinet ministers, and intensifying through the 1975 Emergency. - Recounts as Managing Director of The Statesman: attempts to forfeit printing presses, install hostile directors, impose pre-censorship by telephone, and use MISA arrests and PPOMA legislation (placed in the Ninth Schedule) to insulate censorship from legal challenge. - Salutes a small dissident press — Gorwala's Opinion, Raj Mohan Gandhi's Himmat, N. G. Goray's Janata, Thatte's Sadhana, Minoo Masani's Freedom First — and tributes Soli Sorabjee for arguing their cases before Justice Tulzapurkar's Bombay High Court bench. - Attacks the Samachar news pool as a fabricated 'government organ' that destroyed the credibility of Indian news agencies and was used to circulate fake nation-wide surveys. - Rebuts the UNESCO / Third World doctrine that economic development justifies state control of news, citing The Economist's post-election conclusion that there is no choice between freedom and bread. - Closes with the press's prescriptive duty: to report objectively, analyse logically, criticise fearlessly, and remain attentive to dissent as the 'one unfailing test of respect for Human Rights.' --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] Price Control on Drugs URL: https://indianliberals.in/primary-works/price-control-on-drugs-prof-p-a-gaitonde-october-10-1970/ ### Summary Published by the Forum of Free Enterprise on 10 October 1970, this pamphlet collects three short polemics opposing the Government of India's Drugs (Prices Control) Order of 16 May 1970. The contributors — economist Prof. P. A. Gaitonde of K. C. College, Bombay; pharmaceutical Managing Director N. H. Israni; and PAMDAL Past President Champaklal Zaveri — share a common argument: in the absence of war or emergency shortage, rigid price control on drugs will throttle competition, deter R&D, reduce supply, and ultimately injure the very consumers it claims to help. The volume marshals price-index data, comparative international evidence, the Tariff Commission's 1968 report, and the confusion produced by the Order's repeated amendments to argue that the industry's growth and the public's health are best served by lower taxes, decanalised raw-material imports, and the discipline of competition rather than by a single-formula government fiat. ### Body # Price Control on Drugs ## Summary Published by the Forum of Free Enterprise on 10 October 1970, this pamphlet collects three short polemics opposing the Government of India's Drugs (Prices Control) Order of 16 May 1970. The contributors — economist Prof. P. A. Gaitonde of K. C. College, Bombay; pharmaceutical Managing Director N. H. Israni; and PAMDAL Past President Champaklal Zaveri — share a common argument: in the absence of war or emergency shortage, rigid price control on drugs will throttle competition, deter R&D, reduce supply, and ultimately injure the very consumers it claims to help. The volume marshals price-index data, comparative international evidence, the Tariff Commission's 1968 report, and the confusion produced by the Order's repeated amendments to argue that the industry's growth and the public's health are best served by lower taxes, decanalised raw-material imports, and the discipline of competition rather than by a single-formula government fiat. ## Essays ### Price Control on Drugs *By Prof. P. R. Gaitonde* Prof. Gaitonde frames the Drugs (Prices Control) Order of 16 May 1970 as a non-economic intervention dressed up as consumer protection. He concedes controls can be justified during war or shortage but argues that, absent those conditions, competition — not coercion — is the engine of falling prices and broader prosperity. Reviewing wholesale-price-index movements from 1952-53 onward, he points out that drug and pharmaceutical prices rose far less than the general index (88.7 per cent vs 111.6 per cent between 1956-57 and 1968-69), so the Government's premise of runaway drug prices is empirically thin. He traces the regulatory creep from the 1963 Drug Price Control Order through the Tariff Commission's two-year inquiry, the August 1968 report whose recommendations were shelved, and Dr. Triguna Sen's announcement of the new formula-based Order. Gaitonde then dissects the Order's pricing formula, showing that the permitted mark-ups (75 per cent over costs, 100-150 for products requiring development and research, with manufacturers' price further cut by 20 per cent off retail and trade commissions squeezed to 12.5 per cent for ethical drugs and 10.5 per cent for others) leave too thin a margin to fund R&D in an industry where new products take four years and substantial capital to develop. He warns that the Indian industry, which has grown from Rs. 34 crores in 1954 to Rs. 235 crores in 1969 and projects Rs. 625 crores by 1980-81, will be choked precisely when investment of around Rs. 750 crores is needed. The remedy he urges is structural: cheap raw materials from the public sector, monetary and fiscal discipline, lower taxation on inputs, and a growth-oriented climate — not a price freeze. - Concedes controls may be justified in shortage, emergency or war — but rejects them as the default tool in normal conditions. - Cites wholesale-price-index data showing drug prices rose much slower (88.7%) than general commodity prices (111.6%) between 1956-57 and 1968-69. - Reviews 1963 Drug Price Control Order, 1966 Tariff Commission reference, and 1968 report shelved by Government. - Argues the May 1970 Order's mark-up formula leaves no incentive for the four-year, capital-intensive R&D cycle new drugs require. - Notes IDPL and other public-sector raw-material producers sell at far higher rupee-per-kg prices than imports, calling that the leverage point Government should fix. - Recommends reduction of the 20-30 per cent indirect tax burden on drugs and a growth-oriented climate rather than price freezes. ### Drug Price Control & the Consumer *By N. H. Israni* Writing as Managing Director of a pharmaceutical company, Israni argues that public discussion of drug prices over the four or five months since the Order has been driven more by emotion than by evidence. He sketches the pre-1963 history — when prices of bulk drugs (Tetracycline capsules from Rs. 2.50 to Rs. 1.15 between 1956 and 1963, Penicillin Ointment, PAS, Vitamin C tablets and others) fell year after year under the discipline of international competition — to show that competition, not control, was already delivering reductions. The first 1963 Order, he says, was a panicked response to the Chinese aggression that ended up freezing prices and was unfair to manufacturers who had been selling cheap. The core of the essay reviews the Tariff Commission's 1968 finding that Indian pre-tax profits varied widely (5-25 per cent of turnover) and that the industry could not absorb a uniform 25-30 per cent cut. Israni recounts how, in February 1970, manufacturers offered to bring down prices of selected essential drugs by 10-25 per cent, but the Government chose instead to rationalise all 18 categories through a rigid formula — the first country in the world to do so. He details the 50-66 per cent voluntary cuts on around 1,100 products, the Rs. 15-crore annual gain to consumers, and the confusion sown by 1,500 amendments. He closes with a five-point programme: abolish controls and intensify competition; encourage cost-consciousness; permit profits to fund tropical-disease research (where a single research unit needs Rs. 2-3 crores and Rs. 50-60 lakhs annually); treat industry as a partner rather than a target of compulsion; and examine the 22 per cent burden of indirect taxes on every rupee of drugs. - Pre-1963 history shows competition was driving drug prices down (Tetracycline capsule from Rs. 2.50 in 1956 to Rs. 1.15 in 1963; similar falls in PAS, Penicillin Ointment, Vitamin C). - Indian profits were already lower than international comparators per Tariff Commission's 1968 report; uniform 25-30% cut was rejected as unworkable. - Industry voluntarily reduced prices of about 1,100 products by 50-66% (annual consumer gain ~Rs. 15 crores) before being subjected to a rigid formula. - India is the only country in the world applying so rigid a price-formula approach to pharmaceuticals. - Five-point reform agenda: abolish controls, encourage efficiency, allow profits for tropical-disease R&D, treat industry as partner, cut the 22% indirect-tax load on drugs. ### Will There Be a Shortage of Drugs? *By Champaklal Zaveri* Champaklal Zaveri, writing as a Past President of PAMDAL, opens by restating the volume's frame: price control is an emergency measure, not a routine instrument. He concedes that some branded drugs are expensive but argues that competitive pressure has already kept Indian manufacturers' prices reasonably low — often lower than the mark-up the formula now permits. He puts drug prices in perspective by noting a vial of B-Complex parenteral solution costing Rs. 3 supports ten injections of the same solution priced at Rs. 30, so the medical context matters more than headline drug prices. He revisits the 1963 Statutory Control Order under Chinese-aggression conditions, which froze rather than reduced prices and penalised manufacturers who had been selling cheap. The essay then examines the 1970 Order, the 54 per cent reductions / 25 per cent unchanged / 21 per cent increases revealed in the Health Minister's Lok Sabha statement, and the two main drivers of the increases: seven years of cost build-up not reflected in prices, and imported raw-material price rises forced by canalisation through Government undertakings. Zaveri reports four amendments in quick succession, culminating in the fourth amendment rolling all increases back to the 15 May level — a step he calls administratively chaotic, especially for Indian-sector manufacturers who most needed rationalisation. He closes by urging Government to settle the revised prices quickly, to retrace canalisation if public undertakings cannot meet raw-material demand, and warns the country will face an acute shortage of drugs otherwise. - Frames price control as an emergency tool only; competition already keeps average Indian manufacturers near a low price level. - Argues drug prices must be read against total medical costs (Rs. 3 vial vs Rs. 30 of injection charges). - Recounts the 1963 freeze as a Chinese-aggression response that penalised low-priced manufacturers. - Reports Health Minister's Lok Sabha disclosure: 54% of drugs cut, 25% unchanged, 21% increased — with positive reductions ignored by Press. - Two causes of the 21% increases: seven-year cost build-up and canalisation-driven raw-material price rises. - Fourth amendment rolling prices back to 15 May level created confusion and hit the Indian sector hardest. - Warns of acute drug shortage if Government does not retrace canalisation when public-sector supply falls short. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] Price Policy in Nationalised Industry and Trade URL: https://indianliberals.in/primary-works/price-policy-p-h-sheshagiri-rao-mar8-1960/ ### Summary P. H. Sheshagiri Rao's pamphlet, published by the Forum of Free Enterprise on 8 March 1960 and drawn from a 1959 lecture at the Institute of World Culture in Bangalore, takes as its provocation two contemporary moves: the All-India Congress Committee's Chandigarh resolution to widen nationalised industry and trade, and the National Development Council's decision to push ahead with state trading in foodgrains. Rao argues that the ruling party is treating nationalisation as a matter of ideology and sentiment, and that it falls to the intelligentsia to bring the question down to earth by asking a single hard question: at what price will nationalised industry and trade deliver goods to the consumer? He walks the reader through the economics of price formation in buyers' and sellers' markets, in shortage and emergency, and through the four contract types familiar from procurement — formed, farmed, negotiated and cost-plus. He then turns this taxonomy on the State itself.… ### Body # Price Policy in Nationalised Industry and Trade *By P. H. SHESHAGIRI RAO* ## Summary P. H. Sheshagiri Rao's pamphlet, published by the Forum of Free Enterprise on 8 March 1960 and drawn from a 1959 lecture at the Institute of World Culture in Bangalore, takes as its provocation two contemporary moves: the All-India Congress Committee's Chandigarh resolution to widen nationalised industry and trade, and the National Development Council's decision to push ahead with state trading in foodgrains. Rao argues that the ruling party is treating nationalisation as a matter of ideology and sentiment, and that it falls to the intelligentsia to bring the question down to earth by asking a single hard question: at what price will nationalised industry and trade deliver goods to the consumer? He walks the reader through the economics of price formation in buyers' and sellers' markets, in shortage and emergency, and through the four contract types familiar from procurement — formed, farmed, negotiated and cost-plus. He then turns this taxonomy on the State itself. The slogan of "no-profit no-loss", he writes, was a carrot dangled before a credulous public; once the State entered industry and trade, the profit motive was quietly reinstalled under names like "pooled price" and "retention price." His central case study is the State Trading Corporation's cement operation, where, by his reading of the S.T.C.'s own annual reports and balance sheets for 1956-57 and 1957-58, an "equalised price" concealed an effective levy on imported cement, a 105 per cent margin on subsidised stocks, and a net trading profit of roughly Rs. 1.12 crores routed through "service charges" and dalali commissions. He extends the indictment to steel (the "retention price" device), locomotives (the dispute between Chittaranjan and TELCO), and the proposed state purchase of foodgrains, where varying soils and tenancies make any single "fair price" arbitrary. The deeper argument is structural. When the State is producer, regulator and monopolist all at once, the consumer loses the open-market exit that disciplines a private monopolist; the citizen has "no chances of beating down the price" the State demands. Pooled prices, he insists, do not remove the cause of complaint, they only remove the accusing finger from the inefficient producer (the State itself) and re-aim it at the efficient one. The whole apparatus, he concludes, functions as backdoor taxation — "every sale becomes a collection of tax" — and points toward the kind of "undiluted totalitarianism" already in place in Communist Russia. Rao closes by setting two alternatives before India: the Russian path of nationalisation and coercion, and the West German path under Ludwig Erhard, whose Prosperity Through Competition he cites as evidence that voluntary, free-enterprise progress is both possible and durable. He invokes the British electorate's denationalisation of steel under the Conservatives to argue that "a mature democracy has decided that socialism leads to state capitalism" and that private enterprise is fully compatible with social justice. ## Key points - Frames the pamphlet around the All-India Congress Committee's Chandigarh resolution to extend nationalised industry and the National Development Council's move to state trading in foodgrains, arguing that nationalisation is being defended on ideology rather than on price to the consumer. - Walks through price formation in buyers' versus sellers' markets and the four contract types — formed, farmed, negotiated and cost-plus — to set up a taxonomy he then applies to the State as trader. - Treats "no-profit no-loss" as a public-relations carrot that the State quietly abandoned once in business, replacing it with "pooled" and "retention" prices that revive the profit motive under euphemisms. - Uses the State Trading Corporation's cement operation as his central case, citing S.T.C.'s own 1956-57 and 1957-58 annual reports to allege concealed levies on imported cement, a 105 per cent margin on subsidised stocks, and a roughly Rs. 1.12 crore net profit routed through "service charges" and dalali commissions. - Extends the critique to steel retention prices, the Chittaranjan-versus-TELCO locomotive dispute, and the proposed state purchase of foodgrains, where varying soils and tenancies make any single "fair price" arbitrary. - Argues structurally that when the State is producer, regulator and monopolist, the citizen loses the open-market exit that disciplines a private monopolist, and that pooled prices merely shield the inefficient producer. - Reads State Trading as backdoor taxation — "every sale becomes a collection of tax" — and warns it leads toward the totalitarian arrangement of Communist Russia. - Closes by contrasting the Russian path with West Germany under Ludwig Erhard and Britain's denationalisation of steel under the Conservatives to argue that mature democracies have decided socialism leads to state capitalism. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] PRINCIPLES OF A SOUND PERSONNEL POLICY URL: https://indianliberals.in/primary-works/principles-of-a-sound-personnel-policy-s-r-mohan-das-15-march-1976/ ### Summary S. R. Mohan Das, Director of the Industrial Relations Institute of India, sets out the architecture of an effective personnel policy for industrial organisations. Adapted from a talk delivered at the Forum of Free Enterprise on 26 September 1975 and issued by the Forum as a booklet in March 1976, the text distinguishes material from human resources and argues that under-developed societies err in assuming that sheer population can be slotted into the industrial system without a prior 'quality transformation'. Personnel management, on Mohan Das's account, is the integrated discipline of generating, selecting, inducting, training, utilising and severing human resources so they can function as an integrated team across the work and non-work spheres of the enterprise. The argumentative spine is a typology of three interest groups inside the organisation — owners, employees with management responsibilities, and workmen — plus three external constituencies (government, suppliers, clients). Each carries partisan claims, and the personnel function exists to mediate them as a continuous, multi-level, power-balancing relationship rather than a litigatory or peace-keeping exercise.… ### Body # PRINCIPLES OF A SOUND PERSONNEL POLICY *By S. R. MOHAN DAS* ## Summary S. R. Mohan Das, Director of the Industrial Relations Institute of India, sets out the architecture of an effective personnel policy for industrial organisations. Adapted from a talk delivered at the Forum of Free Enterprise on 26 September 1975 and issued by the Forum as a booklet in March 1976, the text distinguishes material from human resources and argues that under-developed societies err in assuming that sheer population can be slotted into the industrial system without a prior 'quality transformation'. Personnel management, on Mohan Das's account, is the integrated discipline of generating, selecting, inducting, training, utilising and severing human resources so they can function as an integrated team across the work and non-work spheres of the enterprise. The argumentative spine is a typology of three interest groups inside the organisation — owners, employees with management responsibilities, and workmen — plus three external constituencies (government, suppliers, clients). Each carries partisan claims, and the personnel function exists to mediate them as a continuous, multi-level, power-balancing relationship rather than a litigatory or peace-keeping exercise. Mohan Das insists that human resources be treated as scarce investment, not cost; that workers be approached as 'quality adult personalities', not dependent children; and that role relationships replace the feudal 'master–servant' or 'command and obedience' model with one of explicit mutuality and reciprocity. The core of the booklet is a six-point policy framework. Industrial relations objectives must be performance-oriented rather than merely peace-oriented; relationships must be organisational and role-based rather than individualistic; modern industrial work demands mutuality and discretion, not blind obedience; the relationship is continuous and multi-level from shop floor to top management; industrial relations function as an apprenticeship in leadership and problem-processing; and the system should convert conflict into a game between strong opponents rather than guerrilla warfare aimed at liquidating a 'hated enemy'. Mohan Das closes by insisting that line supervisors and managers — not just specialist personnel or legal officers — be involved, and that the policy include a time-bound grievance procedure and two-way communication channels. The Forum appends its own 1957 'Code of Conduct' as an editorial supplement, framing producers', employers', management's, professional men's and citizens' obligations in the private-enterprise order. The booklet opens with an epigraph from Eugene Black urging acceptance of private enterprise as 'an affirmative good' and closes with the Forum's standing A. D. Shroff epigraph on free enterprise's permanence. ## Key points - Personnel management is reframed as human-resources management: an integrated discipline covering generation, selection, induction, utilisation, training, development and severance of quality manpower. - Under-developed societies' assumption that quantitative population can be automatically absorbed into the industrial system is challenged; population must undergo a 'quality transformation' before it becomes usable labour. - Three internal interest groups (owners, managerial employees, workmen) and three external constituencies (government, suppliers, clients) must be continuously reconciled by a sound personnel policy. - Human resources are scarce and should be treated as investment, not cost — a managerial axiom Mohan Das uses to attack consumption-oriented, control-based approaches. - Each human resource carries three identities — socio-cultural, occupational and collective/professional — and good industrial relations refuse to confuse one with the other. - A six-point policy framework: performance-oriented objectives; role-based organisational behaviour; mutuality and reciprocity replacing the master–servant model; continuous, multi-level relationships; industrial relations as leadership apprenticeship; and conflict converted from guerrilla warfare into a game. - Line supervisors and managers — not just specialist personnel or legal staff — must own the industrial-relations exercise, supported by a time-bound grievance procedure and regular two-way communication. - The Forum of Free Enterprise frames the booklet with its 1957 Code of Conduct for producers, employers, management, professionals and citizens, anchoring Mohan Das's HR doctrine inside an explicit private-enterprise ethic. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] PRIVATE ENTERPRISE SHOULD BE ALLOWED IN LIFE INSURANCE INDUSTRY URL: https://indianliberals.in/primary-works/private-enterprise-should-be-allowed-in-life-insurance-industry-by-prof--rl-varshney-may-8-1962/ ### Summary Prof. R. L. Varshney, an assistant professor at Lucknow University, mounts a sustained critique of the Life Insurance Corporation of India (LIC) six years after the 1956 nationalisation of life insurance, arguing that on every important index — premium rates, bonuses, agent quality, claims handling, expense ratios, and product range — the state monopoly has under-performed the private insurers it displaced. He marshals concrete comparisons: at the time of nationalisation an official communique promised a Re. 1 reduction in premiums per Rs. 1,000 of sum assured, yet in fact pre-nationalisation premium rates of leading Indian companies such as the Oriental and the New Asiatic were already lower than what the LIC now charges, and the bonuses paid out have fallen short of pre-takeover expectations. The growth in new business — Rs.… ### Body # PRIVATE ENTERPRISE SHOULD BE ALLOWED IN LIFE INSURANCE INDUSTRY *By Prof. R. L. Varshney* ## Summary Prof. R. L. Varshney, an assistant professor at Lucknow University, mounts a sustained critique of the Life Insurance Corporation of India (LIC) six years after the 1956 nationalisation of life insurance, arguing that on every important index — premium rates, bonuses, agent quality, claims handling, expense ratios, and product range — the state monopoly has under-performed the private insurers it displaced. He marshals concrete comparisons: at the time of nationalisation an official communique promised a Re. 1 reduction in premiums per Rs. 1,000 of sum assured, yet in fact pre-nationalisation premium rates of leading Indian companies such as the Oriental and the New Asiatic were already lower than what the LIC now charges, and the bonuses paid out have fallen short of pre-takeover expectations. The growth in new business — Rs. 609 crores in 1961 — cannot, he insists, be read as evidence of efficiency, since rising population, employment and national income would have produced the same expansion under any regime. The essay then catalogues operational failures that policyholders feel directly: an unchecked practice of premium rebating that nationalisation was meant to abolish; poorly trained agents who push standardised endowment plans regardless of a client's marriage, education or retirement needs; unreasonable delays in answering letters, inquiries and claims, with a deductible-from-interest penalty proposed for officers responsible; the withdrawal of joint-life policies without justification; and the abandonment of attractive products like the Retirement Benefit Plan and Endowment Benefit Plan offered by the pre-nationalisation United India. Varshney's constructive proposals run in two directions. First, restore competition by allowing sound state-owned general insurers — he names the Oriental and the New India — to re-enter life business, a move he attributes to a committee appointed by the Congress Parliamentary Party; competition, he argues, will lift talent into senior positions and force the LIC to develop its own character. Second, even short of competition, reform corporate governance: abolish without-profit issues of with-profit policies (which subsidise the LIC's costs at policyholders' expense), and give policyholders a statutory right to elect at least a third of LIC's directors and members of its Investment Committee, restoring a representational right they enjoyed before nationalisation. The piece was first published in the Economic Times of 2 April 1962 and reissued as a Forum of Free Enterprise leaflet dated 8 May 1962. ## Key points - Six years after nationalisation, premium rates of the LIC remain higher than those previously charged by leading private Indian insurers such as the Oriental and the New Asiatic, and bonuses have fallen below expectations. - The Rs. 609 crore volume of new business in 1961 is not a valid index of LIC efficiency, because population growth, rising employment and rising national income would produce comparable expansion under any organisational form. - The practice of rebating premiums — explicitly cited as a reason for nationalisation — has actually increased under the LIC, with agents and dummy agencies openly inducing business through rebates. - LIC agents are insufficiently trained to recommend differentiated products (marriage, education, retirement plans) and default to a multi-purpose endowment policy that does not fit varied policyholder circumstances. - Service has deteriorated: unreasonable delays in answering letters, inquiries and settling claims have prompted Varshney to propose deducting one per cent interest per month from the salary of officers responsible. - The LIC has withdrawn attractive pre-nationalisation products without justification, including joint-life policies and the Retirement Benefit Plan of the former United India, which offered notably lower premiums. - Without-profit issues of with-profit policies should be abolished because they cross-subsidise LIC expenses, lack any compensating return to policyholders, and contradict the purpose of insurance — risk coverage at lowest premium. - The cleanest remedy is to allow sound general insurers like Oriental and New India to re-enter life business — a step recommended by a committee of the Congress Parliamentary Party — so that competition restores efficiency and develops the LIC's own character. - Policyholders should regain the right they had before nationalisation to elect directors: those holding with-profit policies of not less than Rs. 3,000 for three years should elect at least one-third of LIC's board and have representation on the Investment Committee. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] Problems and Prospects of Developing Countries URL: https://indianliberals.in/primary-works/problem-and-prospects-of-developing-countries-s-jannathan-1980/ ### Summary This 1980 A. D. Shroff Memorial Trust booklet prints a lecture S. Jagannathan, I.C.S. (Retd.) and former Governor of the Reserve Bank of India, delivered in Madras on 30th October 1980. After tributes to A. D. Shroff and an introduction by N. A. Palkhivala, Jagannathan opens by re-framing the development debate along North-South rather than East-West lines, invoking Nehru's reminder that the salient divide runs between the industrialised North (whether centrally planned or market economy) and the South that is still struggling to develop. The bulk of the rendered pages walks through the two oil shocks and their fallout. Jagannathan splits the developing world into oil exporters and oil importers, then divides the importers between middle-income and low-income groups; the latter, he reminds the audience, contains the four South Asian countries that house half the world's absolute poor. He argues the 1979-80 doubling of oil prices is in absolute terms a bigger blow than the 1973-74 quadrupling, and traces how commercial banks bulging with recycled petro-dollars, together with the IMF's new "oil facility", carried much of the adjustment after 1973-74.… ### Body # Problems and Prospects of Developing Countries *By S. JAGANNATHAN, I.C.S. (RETD.)* ## Summary This 1980 A. D. Shroff Memorial Trust booklet prints a lecture S. Jagannathan, I.C.S. (Retd.) and former Governor of the Reserve Bank of India, delivered in Madras on 30th October 1980. After tributes to A. D. Shroff and an introduction by N. A. Palkhivala, Jagannathan opens by re-framing the development debate along North-South rather than East-West lines, invoking Nehru's reminder that the salient divide runs between the industrialised North (whether centrally planned or market economy) and the South that is still struggling to develop. The bulk of the rendered pages walks through the two oil shocks and their fallout. Jagannathan splits the developing world into oil exporters and oil importers, then divides the importers between middle-income and low-income groups; the latter, he reminds the audience, contains the four South Asian countries that house half the world's absolute poor. He argues the 1979-80 doubling of oil prices is in absolute terms a bigger blow than the 1973-74 quadrupling, and traces how commercial banks bulging with recycled petro-dollars, together with the IMF's new "oil facility", carried much of the adjustment after 1973-74. He warns that this recycling cannot be repeated on the same scale now that lending banks face debt-service strain and portfolio-concentration limits. A long autobiographical section recounts India's response. He credits the post-1966 devaluation, the Green Revolution (citing the F.A.O. CERES award in 1971), the build-up of foreign-exchange reserves, the paying off of IMF short-term debt, and the fall in debt service from 20.9 per cent of export earnings in 1970 to 9.4 per cent in 1978, alongside diversified exports into engineering goods, garments, gems, and Gulf-region construction contracts and remittances. He revisits the notorious 1964 World Bank "Bell Mission" — whose hostile reception in the Finance Ministry he treats as a cautionary tale — to underline how Indian policy ultimately moved toward most of what the mission recommended on devaluation, agriculture, exports and family planning. The closing pages register an intellectual convergence: Northern donors and economists now accept the importance of basic needs, education, nutrition, and well-targeted food subsidies (citing the World Bank's World Development Report and the Brandt Commission), while Indian and developing-country economists have grown more pragmatic about exchange rates, export promotion and family planning. Jagannathan defends the basic-needs agenda against suspicions in some Southern capitals that it is a capitalist conspiracy to derail the New International Economic Order, quoting a "thoughtful Indian" on the irony of accepting trickle-down internationally after rejecting it nationally. The rendered chunk breaks off mid-discussion of what the World Bank and IMF must do next to carry oil-importing l.d.c.s through the second shock. ## Key points - Reframes the development debate along North-South (industrialised vs developing) lines rather than the older East-West or capitalist-vs-socialist axis, following Nehru. - Splits the developing world into oil exporters (housing roughly a fifth of the developing population) and oil importers, then further between middle-income and low-income groups, with India and three other South Asian states housing half the world's absolute poor. - Argues the 1979-80 oil price doubling (about $15 to $32 per barrel) is in absolute terms a heavier blow than the 1973-74 quadrupling, even though percentage growth was higher then. - Describes how commercial bank petro-dollar recycling and the IMF's new "oil facility" cushioned the 1973-74 shock but cannot be repeated on the same scale now that debt service, portfolio concentration and regulator concern have piled up. - Documents India's recovery: 1966 devaluation, Green Revolution (F.A.O. CERES award in 1971), repayment of IMF short-term debt, reserve build-up, and a fall in debt service from 20.9% of export earnings in 1970 to 9.4% in 1978. - Recounts the 1964 World Bank Bell Mission and its hostile reception in the Finance Ministry as a cautionary tale about resisting honest external diagnosis. - Tracks a convergence in development thinking: Northern aid donors now embrace basic needs, education, nutrition and targeted food subsidies, while Indian policy has become more pragmatic on exchange rates and exports. - Defends the basic-needs approach — invoking the Brandt Commission — against fears in the South that it is a capitalist ploy to displace the New International Economic Order. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] Private Enterprise and Politics URL: https://indianliberals.in/primary-works/private-enterprise-and-politics-a-d-shroff-jun8-1962/ ### Summary This 14-page booklet collects four addresses delivered at a symposium organised by the Forum of Free Enterprise in Bombay on 23 January 1962, prompted by debate during the February 1962 General Elections over the place of private enterprise in Indian politics. A. D. Shroff, President of the Forum, presided and opened by urging businessmen to shed their 'moral cowardice' and engage politics directly. He is joined by industrialist Lalchand Hirachand (President, Maharashtra Chamber of Commerce), journalist Frank Moraes (Editor-in-Chief, Indian Express), and educationist Dr. A. R. Wadia, M.P. (Director, Tata School of Social Sciences, Bombay). Across the four talks the contributors converge on a shared thesis: that the post-Independence expansion of state activity has made political abstention impossible for private industry, that the public-sector model is producing waste and unfair competition rather than virtue, and that defending free enterprise is inseparable from defending democracy itself. ### Body # Private Enterprise and Politics ## Summary This 14-page booklet collects four addresses delivered at a symposium organised by the Forum of Free Enterprise in Bombay on 23 January 1962, prompted by debate during the February 1962 General Elections over the place of private enterprise in Indian politics. A. D. Shroff, President of the Forum, presided and opened by urging businessmen to shed their 'moral cowardice' and engage politics directly. He is joined by industrialist Lalchand Hirachand (President, Maharashtra Chamber of Commerce), journalist Frank Moraes (Editor-in-Chief, Indian Express), and educationist Dr. A. R. Wadia, M.P. (Director, Tata School of Social Sciences, Bombay). Across the four talks the contributors converge on a shared thesis: that the post-Independence expansion of state activity has made political abstention impossible for private industry, that the public-sector model is producing waste and unfair competition rather than virtue, and that defending free enterprise is inseparable from defending democracy itself. ## Essays ### BUSINESS MEN MUST PICK UP COURAGE *By A. D. Shroff* A. D. Shroff, presiding President of the Forum of Free Enterprise, opens with an anecdote crowning the politician as the oldest profession because 'he was the one who creates chaos', then argues that under the expanded post-Independence state, business can no longer stand aside from politics. Where pre-Independence businessmen complained that government took too little interest in them, the modern complaint is the opposite. He recalls the political activism of the Indian Merchants' Chamber during the freedom struggle and laments that today's businessmen are too timid to oppose the ruling party publicly — a 'trend of thinking' he warns 'was an idea propounded by Fascist Mussolini'. He closes by binding the cause of business to the cause of democratic survival itself. - Frames the booklet's central concern: the vast post-Independence increase in state power makes political engagement compulsory for business. - Contrasts pre-Independence businessman activism (Indian Merchants' Chamber boycott resolutions) with present-day political timidity. - Diagnoses Indian businessmen with 'moral cowardice' that the Forum of Free Enterprise (founded 1956) was set up to cure. - Warns that automatic deference to the ruling party is the totalitarian method of Fascist Mussolini. - Asserts the indivisibility of free enterprise and democracy. ### PRIVATE ENTERPRISE SHOULD IMPART REALISM TO ECONOMIC POLICIES *By LALCHAND HIRACHAND* Lalchand Hirachand, speaking as President of the Maharashtra Chamber of Commerce, argues that as economic activity has become 'dominant in everyday life', the Government's deepening interest in business has made economic policy a political question — and businessmen who keep aloof do so at their peril. He insists that businessmen must publicly advise the Government on industrial development, the Five-Year Plans, and the Public Sector vs. Private Sector controversy, citing the State Trading Corporation's profiteering on cement (as flagged by Parliament's Estimates Committee) as proof that public enterprises hold no monopoly on virtue. Profit-making, once dismissed as anti-social, is now widely recognised as 'absolutely essential for the development of industry and trade'; the time has come for private enterprise to defend itself through the press and the platform as well as through legislatures. - As economic life becomes the dominant axis of politics, business cannot abdicate the political conversation. - Calls for private enterprise to 'realise its useful role in political matters' rather than being scapegoated. - Cites the State Trading Corporation's cement profiteering (per Parliament's Estimates Committee) to refute the moral case for the Public Sector. - Notes the elite reversal that has rehabilitated profit-making as legitimate and necessary. - Insists that ideological self-defence must reach the public through press and platform, not only through legislatures. ### PRIVATE ENTERPRISE SHOULD HAVE AN IMPORTANT PLACE IN OUR DEMOCRACY *By FRANK MORAES* Frank Moraes, Editor-in-Chief of the Indian Express, opens with the witticism that 'there are only two ways of getting on in this world, either by one's own industry or by the stupidity of others' — and warns that some governments would happily profit from the latter. He rejects the romantic claim of pure freedom anywhere (neither in China and Russia, nor in the United States, where rich governments spend heavily on nuclear and atomic experiments) and argues that the proper test is comparative: a government's primary function is to ensure law, order, and economic and social justice, not to substitute itself for private initiative. India, he contends, is no longer 'underdeveloped' but a 'developing country' that 'needs more the stimuli of private enterprise'; the Five-Year Plans have produced a 'top-heavy mass of personnel, with a great deal of wastefulness' that legislatures struggle to bring to account. He closes by criticising Indian and Asian historians for instinctively equating industrialisation with capitalism and colonialism — a 'case of confused and arrested thinking' that still distorts India's economic life a century after the Industrial Revolution reached its shores. - Rejects the binary of 'unadulterated freedom' vs. classless society; insists on degree, not kind. - Government's primary function is law, order, and economic and social justice, not direct economic command. - India is a developing, not underdeveloped, country and now needs private-enterprise stimulus. - Five-Year Plans have produced wasteful, oversized state structures resistant to legislative oversight. - Indian and Asian historians have wrongly conflated industrialisation with capitalism and colonialism, freezing Indian economic thought. ### PRIVATE ENTERPRISE SHOULD TAKE INTEREST IN POLITICS *By DR. A. R. WADIA, M.P.* Dr. A. R. Wadia, M.P., Director of the Tata School of Social Sciences, opens by inverting the proverb that 'government governs the best which governs the least' — under modern socialism the dictum no longer holds. He argues that the capitalists of the 18th and 19th centuries in England and America 'were not as enlightened as the capitalists of today': had they been 'a little just to the claims of the labourers', socialism might never have arisen. Today even nominally non-socialist nations — the U.S.A., England, West Germany, France — are 'socialistic in that they do realise the importance of looking to the benefits and well-being of labourers' and tax heavily to fund welfare states. He notes that India has wavered between embracing and disavowing socialism, citing contradictory statements 'even from the Prime Minister', and argues that allowing private enterprise to exist 'almost by sufferance' is not enough — it must be actively encouraged because it brings expert management, the competitive impetus of profit, and the example of 'a genius like Jamshedji Tata'. The failure of Public Sector undertakings, he says, is largely because they are run by people without 'the special management expertise needed for success in business'. - Inverts the classical proverb: in the welfare-state era, minimal government is no longer the accepted standard. - Argues that capitalists themselves invited socialism by failing to share gains with labour; today's welfare states are partly capitalist corrections of that failure. - India's policy ambivalence on socialism (illustrated by inconsistent prime-ministerial statements) is itself a reason for private enterprise to speak up. - Public Sector failures trace to placing administrators without business management expertise in commercial roles. - Honours Jamshedji Tata as the type of entrepreneurial genius that government action could not have produced. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] Problems & Prospects of Cement Industry in India URL: https://indianliberals.in/primary-works/problems-and-prospects-of-cement-industry-dharamsey-m-khatau-jun10-1965/ ### Summary Dharamsey M. Khatau's pamphlet — based on his presidential welcome address of 18 January 1965 marking fifty years of the Indian cement industry — is at once a celebratory history and a sustained critique of governmental price control. Tracing the industry from its first successful Portland-cement run in October 1914 (under 1,000 tonnes) to a one-crore-tonne mark by the mid-1960s, Khatau credits the Concrete Association of India (1927), the Indian Cement Manufacturers' Association, the Tariff Board, and the wartime Department of Planning for shepherding the industry through hostile colonial markets, raw-material shortages, and the post-war rate war that culminated in the formation of the Associated Cement Companies in 1936. He frames the present scarcity not as a failure of producer effort — the 34 private-sector units have run at roughly 95% of installed capacity for three years — but as the predictable consequence of a state pricing regime that has starved a basic industry of expansion capital. The core polemic targets the Tariff Commission's price-fixation order of November 1961, ad-hoc adjustments that recovered only Rs. 3.75 per tonne against an actual cost rise of Rs.… ### Body # Problems & Prospects of Cement Industry in India *By DHARAMSEY M. KHATAU* ## Summary Dharamsey M. Khatau's pamphlet — based on his presidential welcome address of 18 January 1965 marking fifty years of the Indian cement industry — is at once a celebratory history and a sustained critique of governmental price control. Tracing the industry from its first successful Portland-cement run in October 1914 (under 1,000 tonnes) to a one-crore-tonne mark by the mid-1960s, Khatau credits the Concrete Association of India (1927), the Indian Cement Manufacturers' Association, the Tariff Board, and the wartime Department of Planning for shepherding the industry through hostile colonial markets, raw-material shortages, and the post-war rate war that culminated in the formation of the Associated Cement Companies in 1936. He frames the present scarcity not as a failure of producer effort — the 34 private-sector units have run at roughly 95% of installed capacity for three years — but as the predictable consequence of a state pricing regime that has starved a basic industry of expansion capital. The core polemic targets the Tariff Commission's price-fixation order of November 1961, ad-hoc adjustments that recovered only Rs. 3.75 per tonne against an actual cost rise of Rs. 5.91, and the foreign-exchange and licensing bottlenecks that have widened the gap between demand and supply. Khatau argues that controlled prices have prevented manufacturers from paying dividends adequate to attract new equity, denied retained earnings for modernisation, and effectively diverted capital from priority sectors — a diagnosis he reinforces by quoting a World Bank Mission view that price control in key industries has hurt coal and cement most. He details the Cement Manufacturers' Association's proposals for a special Expansion Allowance, the case for letting the private sector add the 50-lakh-tonne Fourth Plan increment instead of expanding the Public Sector, and grievances over 'mixed' jute-bag packing requirements that raise seepage losses. The pamphlet closes on a more constructive note: the establishment of the Cement Research Institute of India on 24 December 1962 (jointly sponsored by CSIR and the Association on a 50:50 basis), the entry of seven undertakings into indigenous cement-machinery manufacture, and the industry's record on rural labour welfare — schools, hospitals, X-ray facilities — endorsed by both the 1946 Labour Investigation Committee and the latest tripartite Cement Wage Board. Published by the Forum of Free Enterprise and bookended by sidebar quotations from Eugene Black and A. D. Shroff, the booklet positions private enterprise in cement as a battle-tested partner in national development that will rise to the Fourth Plan task only if a 'proper climate' of remunerative pricing is created. ## Key points - Indian cement output rose from under 1,000 tonnes in 1914 to roughly one crore tonnes by 1964–65, with 34 private-sector units running at about 95% of installed capacity over the preceding three years. - Khatau locates the current scarcity in the Government's pricing and licensing policy, not in any deficit of producer effort or capacity utilisation. - The Tariff Commission's price structure of 1 November 1961 and subsequent ad-hoc adjustments recovered only Rs. 3.75 per tonne against an actual cost rise of about Rs. 5.91, costing the industry Rs. 3.25 crores between 1 June 1963 and 30 June 1964 alone. - Controlled prices have starved the industry of capital — denying adequate dividends to shareholders, blocking access to the equity market, and preventing internal accruals for modernisation. - The Association has proposed a special Expansion Allowance to fund the additional 50-lakh-tonne capacity sought in the Fourth Plan, arguing that private capacity is more economic than further Public Sector entry. - Foreign-exchange constraints have pushed standard plant costs from roughly Rs. 3.2–3.4 crores down to about Rs. 50 lakhs of foreign exchange today, intensifying the case for indigenous cement-machinery manufacture (now undertaken by seven firms). - The Cement Research Institute of India was registered as a society under the Association's auspices on 24 December 1962, jointly sponsored by CSIR and the industry on a 50:50 basis. - Both the 1946 Labour Investigation Committee and the most recent tripartite Cement Wage Board recognised the cement industry as ahead of comparable industries in providing housing, education, medical care and welfare amenities at remote factory sites. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] Problems of Free Enterprise in India URL: https://indianliberals.in/primary-works/problems-of-free-enterprise-obv-january-1-1970/ ### Summary Written pseudonymously by "An Observer" for the Forum of Free Enterprise shortly after the launch of India's Second Five-Year Plan, this pamphlet argues that the country's accelerating drift toward State control threatens both the productive capacity and the political liberty that free enterprise has historically secured. The author opens by recalling that, despite the hostility of colonial-era competitors, Indian businessmen — Jamshedji Tata's steel venture is the emblem — built cotton, sugar, cement, chemicals, banking and insurance, lifting India to become Asia's second-most industrialised country.… ### Body # Problems of Free Enterprise in India *By An Observer* ## Summary Written pseudonymously by "An Observer" for the Forum of Free Enterprise shortly after the launch of India's Second Five-Year Plan, this pamphlet argues that the country's accelerating drift toward State control threatens both the productive capacity and the political liberty that free enterprise has historically secured. The author opens by recalling that, despite the hostility of colonial-era competitors, Indian businessmen — Jamshedji Tata's steel venture is the emblem — built cotton, sugar, cement, chemicals, banking and insurance, lifting India to become Asia's second-most industrialised country. The Second Plan's stated commitment to a "mixed economy" and a "comradeship" of the two sectors is, in the author's view, contradicted in practice by the 1956 Industrial Policy Resolution, which reserves seventeen industries exclusively to the State (Schedule A) and twelve more for primary State initiative (Schedule B), confining free enterprise to whatever is left over. The pamphlet then catalogues the policy actions that have rattled the "enterprising community": the nationalisation of life insurance and air transport; expansion of the State Trading Corporation; the Industries (Development and Regulation) Act; restrictions in the Companies Act on managing agencies and inter-company investment; capital gains tax, higher dividend taxes, and the new compulsory deposit scheme; and — most consequentially — the Constitution (Fourth Amendment) Act of 1955, which curbs judicial review over compensation for property acquired by the State. The author marshals quotations from Nehru, Dr. John Matthai, World Bank president Eugene Black, the American economist Harry Robinson, and British Labour figures Hugh Gaitskell and C. A. R. Crosland to argue that even sympathetic socialist opinion abroad now doubts the equation of wholesale nationalisation with social progress. The concluding pages press a constitutional case: a country whose economy is dominated by the State cannot preserve the basic principles of democracy. The "enterprising class" is not a handful of big-business men but extends to the cultivator, craftsman and village trader; all have a stake in liberty. Misbehaviour by particular firms should be "firmly dealt with," but the tendency to "run down and revile free enterprise as a whole" must be deprecated. Borrowing Professor Westlake's image of a ship's crew under "the categorical imperative of the captain," the author closes with a plea for a real comradeship between public and private sectors against the common enemies of poverty and suffering. ## Key points - Frames free enterprise as the engine of India's pre- and post-Independence industrial growth — from Tata steel through cotton, cement, chemicals and banking — and warns that its capacity is being squandered. - Reads the 1956 Industrial Policy Resolution as a sharp tightening of State jurisdiction: seventeen industries reserved exclusively to government, twelve more in which the State takes the initiative, and a vague residual space for private enterprise. - Argues that official rhetoric of a "mixed economy" and "comradeship" between sectors is undercut by nationalisation of life insurance and air transport, State Trading Corporation expansion, and a steady drift toward socialism. - Cites Eugene Black (World Bank) and the American economist Harry Robinson alongside Dr. John Matthai to show that even friendly observers find the policy framework discouraging to investors, especially foreign ones. - Treats the Constitution (Fourth Amendment) Act, 1955 as the most worrying step — removing meaningful judicial review over compensation when property is acquired, and thereby endangering property rights and savings. - Catalogues fiscal disincentives: capital gains tax, higher taxation on dividends in excess of six per cent, and the new compulsory deposit scheme — all judged likely to dry up savings rather than feed the Plan. - Notes that even British socialists (Hugh Gaitskell, C. A. R. Crosland) now question the simple identification of socialism with nationalisation — a comparative argument the author uses to embarrass Indian planners. - Concludes that political democracy cannot survive in an economy dominated by the State; the "enterprising class" includes the cultivator and craftsman and has a vital stake in safeguarding free enterprise. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] PRODUCTIVITY AND QUALITY OF WORK LIFE URL: https://indianliberals.in/primary-works/productivity-and-quality-of-work-life-a-n-haksar-april-14-1979/ ### Summary Delivered on 12 January 1979 as the Murarji Vaidya Memorial Lecture under the joint auspices of the Bombay Productivity Council and the Murarji J. Vaidya Memorial Trust, A. N. Haksar's address — published in April 1979 as a Forum of Free Enterprise booklet — sets out to rescue the word "Productivity" from its many competing meanings and to weld it to a humane management philosophy. Haksar, then Chairman of India Tobacco Company, complains that productivity has "as many different meanings and interpretations as the word Socialism" and that departmentalised accountants, engineers, purchase managers and personnel officers each mutilate the term to suit their own discipline; the predictable result, he says, is the cost-cutting drive that "starts with a bang" and "dies with a whimper." At the heart of the lecture is a conceptual substitution: in place of "Productivity" Haksar proposes "Internal Profit" — the quality, quantity and cost of goods and services entirely under the company's control — paired with "external profit" from the marketplace.… ### Body # PRODUCTIVITY AND QUALITY OF WORK LIFE *By A. N. HAKSAR* ## Summary Delivered on 12 January 1979 as the Murarji Vaidya Memorial Lecture under the joint auspices of the Bombay Productivity Council and the Murarji J. Vaidya Memorial Trust, A. N. Haksar's address — published in April 1979 as a Forum of Free Enterprise booklet — sets out to rescue the word "Productivity" from its many competing meanings and to weld it to a humane management philosophy. Haksar, then Chairman of India Tobacco Company, complains that productivity has "as many different meanings and interpretations as the word Socialism" and that departmentalised accountants, engineers, purchase managers and personnel officers each mutilate the term to suit their own discipline; the predictable result, he says, is the cost-cutting drive that "starts with a bang" and "dies with a whimper." At the heart of the lecture is a conceptual substitution: in place of "Productivity" Haksar proposes "Internal Profit" — the quality, quantity and cost of goods and services entirely under the company's control — paired with "external profit" from the marketplace. To operationalise this he offers two memorable mnemonics: the seven basic resources (Real Estate, Time, Ideas, Men, Money, Machines, Materials, anagrammed as REMMITEMM) and the organisational "4 Ps" (People, Practices, Profits, Policies). Adapting Kipling's six honest serving men, he urges that the central question of business be reframed as "WHO'S PRODUCTIVITY" — directing managerial attention to scientifically assessable and numerate measures rather than to inter-departmental blame. From this base Haksar turns to Quality of Work Life. Drawing on Theodore W. Schultz's "Human Wealth and Economic Growth" he argues that the unexplained residual in growth and output comes from "invisible" investment in human capital, and that humans are an organisation's "most valuable asset." Lincoln's formula "of the people, by the people, for the people" is invoked to describe what organised economic activity must finally serve, and a "WORK LIFE CULTURE" of creativity, involvement, co-operation, self-growth, excellence, planning, training, meritocracy and fair reward is laid out as the pre-requisite for sustained internal profit. The booklet is framed editorially by the Forum of Free Enterprise's wider capitalism-defence agenda: a front-matter epigraph from Eugene Black on accepting private enterprise "as an affirmative good" and a closing epigraph from FFE founder-president A. D. Shroff that "Free Enterprise was born with man and shall survive as long as man survives." Within those brackets Haksar's text reads less as political polemic than as an industrialist's attempt to give Indian management a vocabulary in which human dignity and the profit motive are not adversaries. ## Key points - Haksar opens by arguing that the word "Productivity" is as semantically promiscuous as "Socialism" — interpreted by each manager according to where the shoe pinches. - He proposes replacing "Productivity" with "Internal Profit" (within-business cost/quantity/quality) as a single cohesive dimension, paired with "external profit" from the marketplace. - Seven basic resources are anagrammed as REMMITEMM (Real Estate, Time, Ideas, Men, Money, Machines, Materials) and coupled to an organisational "4 Ps": People, Practices, Profits, Policies. - Departmentalisation, the "we/they" management-labour syndrome and isolated economy drives are identified as the chief enemies of real productivity. - Kipling's six honest serving men are repurposed: only "how" survives, and the dominant question becomes "WHO'S PRODUCTIVITY" with numerate, scientifically assessable targets. - Quality of Work Life requires an enabling, open, meritocratic culture in which directors, managers, supervisors and labour pull in the same direction toward Profit-Growth-Survival. - Drawing on Theodore W. Schultz's notion of investment in human capital, Haksar argues that humans are "an organisation's most valuable asset" and that Indian organisations must study Indian people rather than import foreign assumptions. - The booklet is bookended by Forum of Free Enterprise epigraphs — Eugene Black at the front, A. D. Shroff at the back — that frame the lecture within a classical-liberal defence of private enterprise. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] PRODUCTIVITY IN JAPAN : LESSONS FOR INDIA URL: https://indianliberals.in/primary-works/productivity-in-japan-lessons-for-india-s-a-sapre-october-16-1982/ ### Summary S. A. Sapre, then Director of the Institute for the Study of Work and co-author of "The Incredible Japanese," delivers a Forum of Free Enterprise pamphlet (based on a public lecture given in Bombay on 13 September 1982) that argues India can learn from Japan's post-war productivity miracle. The pamphlet opens with a stark contrast: Japan, ruined after the Second World War, has become the world's third-richest country with near-100% literacy, a 1% needy population, and very low crime, while India ranks as the ninth poorest country with 47% below the poverty line and a per capita GNP of $190 against Japan's $8,800.… ### Body # PRODUCTIVITY IN JAPAN : LESSONS FOR INDIA *By S. A. SAPRE* ## Summary S. A. Sapre, then Director of the Institute for the Study of Work and co-author of "The Incredible Japanese," delivers a Forum of Free Enterprise pamphlet (based on a public lecture given in Bombay on 13 September 1982) that argues India can learn from Japan's post-war productivity miracle. The pamphlet opens with a stark contrast: Japan, ruined after the Second World War, has become the world's third-richest country with near-100% literacy, a 1% needy population, and very low crime, while India ranks as the ninth poorest country with 47% below the poverty line and a per capita GNP of $190 against Japan's $8,800. Sapre attributes Japan's growth to a shift from agriculture to industry, a 20% national savings rate, ten times more research manpower than India, close government-industry cooperation, low interest rates and tax incentives, and a deliberate preference for sales volume and market position over short-term profits. The heart of the pamphlet is a catalogue of Japanese management features that Sapre commends to Indian managers: putting the national interest first; lifetime employment that removes union resistance to innovation; family-style firms that show ethical concern for workers' home lives; quality circles (4,200 of them at Nissan generating 1.12 million suggestions in 1980 with 80% adoption); the ringi consensus decision-making system; "soldiers at the front" knowledge groups; Zen-influenced ideas of life-long practice (illustrated by the Hakuin Ekaku anecdote of "ten minutes and eighty years"); and a work ethic in which a Hitachi worker treats labour as worship and even wears the firm's badge on holidays. Sapre cites Professor Thurow on differential productivity growth rates, Ronald Dore on Japan's silent social-democratic revolution, and an unnamed Malaysian Prime Minister's quip that "Brilliance is buying Japanese, genius is importing the Japanese work ethic itself." The later sections turn to industrial relations and trade unions. Sapre cites striking statistics on man-days lost to strikes per 1,000 population (Japan 13, France 69, USA 166, Britain 183), praises the abolition of office-worker and shop-floor distinctions, and contrasts the loved-and-respected Japanese foreman with his coercive British counterpart. Japanese unions, he argues, do not see themselves as permanent opposition to management; they accept that workers wear two masks (producer and consumer), recognise that Japan's affluence depends on productivity, value harmony over individual rights, and moderated wage demands during the 1974–76 inflation by accepting just a 1.9% annual increase. The implicit lesson for India is that humane, harmonious, productivity-focused industrial relations are not only possible but the foundation of an affluent yet civilised society. ## Key points - Frames Japan's post-war recovery as proof that "poverty can be abolished by peaceful, democratic means" and contrasts Japan's $8,800 per capita GNP with India's $190 and 47% poverty rate. - Attributes Japanese productivity growth (230 vs Britain's 110 on the 1967=100 index by 1981) to shifts from agriculture to industry, a 20% savings rate, ten-times-India research manpower, and close government-industry coordination via the Ministry of Industrial Trade and the Supreme Trade Council. - Highlights distinctive management practices: putting national interest first (citing industrialist Mr. S. Honda), lifetime employment, family-like firms, the ringi consensus decision system, and Tokyo Electric's "Soldiers at the Front" knowledge groups. - Praises quality control circles (4,200 at Nissan with 1.12 million worker suggestions in 1980, ~80% accepted) and the Zen-influenced philosophy of life-long practice illustrated by the Hakuin Ekaku "ten minutes and eighty years" anecdote. - Argues Japanese major business objectives are "sales volume and market position rather than profits," exemplified by Toyota and Nissan moving into luxury cars. - Contrasts industrial-relations statistics — man-days lost to strikes per 1,000 population in 1977: Japan 13, France 69, USA 166, Britain 183 — and cites Professor Ronald Dore on Japan's "silent" social-democratic revolution that abolished the office-staff/shop-floor distinction. - Lays out an eight-point trade-union philosophy in which unions accept that workers are also consumers, that natural-resource-poor Japan depends on productive efficiency, and that "what hampers productivity ultimately harms the workers themselves." - Concludes that the Indian lesson is humane, harmonious, productivity-oriented management — "an affluent but cultured and humane society" — rather than the conflict-prone British-style trade unionism India has imported. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] PROFITS IN A PLANNED ECONOMY URL: https://indianliberals.in/primary-works/profits-in-a-planned-economy-m-a-master-feb10-1965/ ### Summary M. A. Master's pamphlet, published by the Forum of Free Enterprise in February 1965, mounts a case for the legitimacy and necessity of profits within India's planned economy. Master opens by observing that profit-making is recognised everywhere — even in Communist states — as essential to the stability and growth of national economies, and that the post-independence equation of profit with un-patriotism distorted the early years of Indian planning. He traces how the planners' faith in "no-profit, no-loss" working of public enterprises began to crack during the Second Plan when resources fell short, prompting the Congress Planning Sub-Committee under U. N. Dhebar (September 1959) and successive Union Finance Ministers — Morarji Desai and T. T. Krishnamachari — to insist that public enterprises must earn profits to finance investment in railways, irrigation, fertiliser plants and steel. The core of the pamphlet is an empirical accounting of how the Public Sector has actually performed.… ### Body # PROFITS IN A PLANNED ECONOMY *By M. A. MASTER* ## Summary M. A. Master's pamphlet, published by the Forum of Free Enterprise in February 1965, mounts a case for the legitimacy and necessity of profits within India's planned economy. Master opens by observing that profit-making is recognised everywhere — even in Communist states — as essential to the stability and growth of national economies, and that the post-independence equation of profit with un-patriotism distorted the early years of Indian planning. He traces how the planners' faith in "no-profit, no-loss" working of public enterprises began to crack during the Second Plan when resources fell short, prompting the Congress Planning Sub-Committee under U. N. Dhebar (September 1959) and successive Union Finance Ministers — Morarji Desai and T. T. Krishnamachari — to insist that public enterprises must earn profits to finance investment in railways, irrigation, fertiliser plants and steel. The core of the pamphlet is an empirical accounting of how the Public Sector has actually performed. Master marshals figures from the Audit Report (Commercial) 1963, the Annual Report on Working of Industrial and Commercial Undertakings, and Reserve Bank data to show that ventures expected to recoup capital — fertiliser distribution, the State Trading Corporation, Hindustan Steel, Hindustan Antibiotics, Hindustan Machine Tools, Hindustan Aircraft Factory and others — have generated either low returns (16–51%) or outright deficits, with Rs. 14,000 crores of Third Plan outlay yielding only Rs. 6,500 crores of fresh resources, deficit-financed for the rest. Master then turns the argument against the Government's own logic. He argues that the same Laws of Economics that compel public enterprises to earn an "adequate return" on capital employed apply with equal force to the Private Sector, which — unlike the State — must service interest, repay loans, replace assets and pay dividends out of profits already taxed at 65–70%. He criticises the Bonus Bill, the "retention price" mechanism for steel, and the asymmetric application of the "partners-in-prosperity" principle, warning that crippling taxation and a hostile investment climate (citing the Reserve Bank's own observation that "the investment climate is not there") jeopardise capital formation just when fresh taxation of Rs. 2,500–3,000 crores is being contemplated in the Fourth Plan. The pamphlet closes with an appendix excerpt from Wilhelm Roepke on the indispensability of the profit motive and a sidebar quotation from A. D. Shroff defending free enterprise. ## Key points - Argues that profits are universally necessary for trade, industry and services — even in Communist economies — and that India's post-independence equation of profit-making with un-patriotism distorted economic policy. - Reconstructs the policy reversal between the Second and Third Plans: U. N. Dhebar's 1959 Planning Sub-Committee, Morarji Desai's 1962-63 budget speech and T. T. Krishnamachari's reaffirmation that public undertakings must earn an adequate return on capital. - Documents empirically that key public enterprises — fertiliser distribution, the State Trading Corporation, Hindustan Steel, Hindustan Antibiotics, Hindustan Machine Tools, Hindustan Aircraft Factory — produced low returns or losses despite their pricing power. - Shows that of Rs. 14,000 crores of Third Plan outlay, only Rs. 6,500 crores will come from fresh resources while the rest is deficit-financed, weakening the planners' claim that public enterprise can substitute for private capital formation. - Insists that the Private Sector must earn enough profit to service interest, repay loans, replace assets and pay dividends after 65-70% effective taxation — a constraint the Public Sector does not face. - Criticises the asymmetric application of the Bonus Bill's "partners in prosperity" principle, which excludes Government undertakings, and the use of "retention prices" to subsidise public-sector amortisation. - Warns, citing the Reserve Bank's own Central Board, that India's hostile tax regime, unreliable equity market and weak investment climate threaten capital formation just as the Fourth Plan contemplates Rs. 2,500–3,000 crores of additional taxation. - Closes with Wilhelm Roepke's argument that the profit principle is the only known criterion for selecting managers and directing production, and that no equivalent has yet been found. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] Promoting Exports and Scientific Marketing URL: https://indianliberals.in/primary-works/promoting-exports-and-scientific-marketing-s-p-godrej-y-a-fazalbhoy-m-mathias-january-9-1970/ ### Summary This 1970 Forum of Free Enterprise booklet collects three short addresses delivered in Bombay under the Forum's auspices: 'Some Steps for Export Promotion' by industrialist S. P. Godrej, 'A Strategy for Export Promotion' by Y. A. Fazalbhoy (a former president of the All-India Manufacturer's Organisation), and 'Scientific Marketing' by M. Mathias (a director of Hindustan Lever Limited). The volume's argumentative center is a defence of the Private Sector as the natural engine of India's foreign trade and a critique of the post-bank-nationalisation drift toward state control. Godrej and Fazalbhoy press the case for treating exports as a private-sector domain backed by infrastructure rather than displaced by it, while Mathias argues that the discipline of marketing must be reconceived as a science drawing on economics, statistics, psychology and sociology — a managerial counterpart to the policy programme the first two essays advance. ### Body # Promoting Exports and Scientific Marketing ## Summary This 1970 Forum of Free Enterprise booklet collects three short addresses delivered in Bombay under the Forum's auspices: 'Some Steps for Export Promotion' by industrialist S. P. Godrej, 'A Strategy for Export Promotion' by Y. A. Fazalbhoy (a former president of the All-India Manufacturer's Organisation), and 'Scientific Marketing' by M. Mathias (a director of Hindustan Lever Limited). The volume's argumentative center is a defence of the Private Sector as the natural engine of India's foreign trade and a critique of the post-bank-nationalisation drift toward state control. Godrej and Fazalbhoy press the case for treating exports as a private-sector domain backed by infrastructure rather than displaced by it, while Mathias argues that the discipline of marketing must be reconceived as a science drawing on economics, statistics, psychology and sociology — a managerial counterpart to the policy programme the first two essays advance. ## Essays ### Some Steps for Export Promotion *By S. P. GODREJ* S. P. Godrej opens by naming the 'political malaise' of 1969-70 — the sudden nationalisation of fourteen banks, the talk of nationalising foreign trade — as an active drag on accelerated economic development just when exports had begun to recover from devaluation. He insists that the great export success stories (USA, Japan, West Germany, UK) belong to free-market economies in which governments supply infrastructure but do not themselves trade, and that exports must therefore remain a Private Sector domain. The bulk of the essay is a practical checklist for business firms: shed the 'Made in India' inferiority complex; revive a Fashion Council to project Indian design, decoration and yoga abroad; eliminate steel-shortage bottlenecks that cause order cancellations; invest in product development, marketing research, design and packaging, multilingual sales literature, publicity, and a dedicated permanent export department staffed by people with foreign-language proficiency. Godrej praises the Indian Institute of Foreign Trade as a 'college of exports', urges joint ventures abroad as a way around tariff walls and freight discrimination, and closes by arguing that tourism — 'an invisible export' and a labour-intensive industry — should be treated as a national necessity rather than a mere convenience, with Chambers of Commerce leading the way as in Japan. - Frames the 1969 bank nationalisations and threats to nationalise foreign trade as ideological intrusions damaging export confidence. - Argues export success belongs to free-market economies where the state provides infrastructure but does not itself trade. - Lists concrete firm-level reforms: product development, marketing research, design/packaging, multilingual sales literature, publicity at fairs like Expo-70 Osaka. - Calls for a permanent export department in every firm, staffed by people with proven sales records and a second language (French, Arabic, Russian or Spanish). - Endorses joint ventures abroad as a way around tariff walls, freight discrimination and dumping pressure, and singles out tourism as an 'invisible export' the Private Sector should lead. ### A Strategy for Export Promotion *By Y. A. FAZALBHOY* Y. A. Fazalbhoy turns from firm-level practice to national strategy. He documents that India's export earnings have grown at only 2.2 per cent during 1966-69 against a target rate of 7 per cent for the Draft Fourth Plan, and that India's share of world exports has fallen from 2.1 per cent to under 1 per cent over eighteen years even as world trade more than doubled. The diagnosis: traditional exports (tea, jute, cotton textiles) will grow slowly, so India must concentrate on non-traditional items — metals and machinery, equipment, engineering goods, iron ore, chemicals — and diversify the export basket. Fazalbhoy calls for an 'Export Concept' consciousness running through industry, suppliers, transport, tax authorities, labour and management. He proposes that Indian embassies and STC foreign offices run information centres and showrooms with FOB-port prices and full catalogues, that trained market research representatives be stationed abroad through industry associations, and that a special Export Promotion Wing of the Commerce Ministry grade factories by export share (A, B, C through 'J' for 100 per cent exporters), giving top-grade firms priority access to machinery, raw materials at international prices, higher import licence quotas and transferable import vouchers along Indonesian and Ceylonese lines. - Quantifies the export slowdown: 2.2 per cent annual growth in 1966-69 versus a Fourth Plan target of about 7 per cent, with India's world-trade share falling from 2.1 per cent to under 1 per cent. - Urges diversification away from tea, jute and cotton textiles toward engineering goods, iron ore and chemicals. - Proposes a sector-wide 'Export Concept' culture spanning industry, transport, tax authorities and labour. - Calls for Indian-embassy-run information centres, FOB-port pricing showrooms abroad, and industry-association-selected market research representatives stationed in foreign countries. - Recommends a Commerce Ministry Export Promotion Wing that grades factories by export share and rewards top exporters with priority machinery, raw-material access at international prices and transferable import-licence vouchers. ### Scientific Marketing *By M. MATHIAS* M. Mathias argues that marketing has outgrown its old identification with selling and advertising and must now be reconceived as 'the total marketing operation' — a continuous flow from raw materials through production, distribution, advertising and pricing, organised around the consumer's interest rather than the producer's. The recession has, he says, already pushed both business and government to recognise that providing the wheels of industry is not enough; one must keep them moving by being consumer-oriented. The challenge of the 1970s, in Mathias's framing, calls for an orientation of attitude, not just an orientation of technique. He defines 'scientific marketing' as the use of specialists' skills across economics, statistics, human relations, psychology, sociology and the physical sciences to refine data, segment populations, forecast demand through mathematical and econometric models, and predict consumer behaviour. He concedes that scientific skills alone cannot give the final answer — the informed judgment, intuition and confidence of the marketing manager remain essential — but insists that without the scientific approach as a basis, sound marketing decisions cannot be made. - Distinguishes the old 'selling and advertising' view of marketing from the integrated marketing concept that organises every stage of business around consumer interest. - Identifies the recession as the moment when both private enterprise and government recognised that production alone does not sustain industry. - Defines scientific marketing as drawing on economics, statistics, human relations, psychology, sociology and physical sciences to segment populations and forecast demand. - Notes the marketing man's reliance on demography, sociology and human-motivation research to classify consumers into homogeneous groups by income, profession, location and psychology. - Concludes that mathematical and econometric forecasting must be combined with the marketing manager's informed judgment, intuition and confidence. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] Property Rights under the Constitution URL: https://indianliberals.in/primary-works/property-rights-k-subba-rao-dec10-1968/ ### Summary K. Subba Rao, retired Chief Justice of the Supreme Court of India, uses the Third A. D. Shroff Memorial Lecture (delivered 28 October 1968) to trace how the constitutional right to property has been progressively hollowed out by eighteen years of legislative amendment and judicial accommodation. He opens by clarifying the misconception that property exists only at the pleasure of the legislature: the Constitution, he argues, took the substantive law of property as it found it and guaranteed it subject only to reasonable, public-interest restrictions, so that Parliament cannot redefine property out of existence without infringing the fundamental right itself. Rao walks through the major constitutional amendments — the First, Fourth, Seventeenth and successive insertions of Articles 31A, 31B and the Ninth Schedule — showing how each step shifted compensation, agrarian acquisition and the very category of "estate" outside judicial scrutiny.… ### Body # Property Rights under the Constitution *By K. Subba Rao* ## Summary K. Subba Rao, retired Chief Justice of the Supreme Court of India, uses the Third A. D. Shroff Memorial Lecture (delivered 28 October 1968) to trace how the constitutional right to property has been progressively hollowed out by eighteen years of legislative amendment and judicial accommodation. He opens by clarifying the misconception that property exists only at the pleasure of the legislature: the Constitution, he argues, took the substantive law of property as it found it and guaranteed it subject only to reasonable, public-interest restrictions, so that Parliament cannot redefine property out of existence without infringing the fundamental right itself. Rao walks through the major constitutional amendments — the First, Fourth, Seventeenth and successive insertions of Articles 31A, 31B and the Ninth Schedule — showing how each step shifted compensation, agrarian acquisition and the very category of "estate" outside judicial scrutiny. Through close readings of Kochuni, Seethabhathi Devi, Vajravelu, Ranjit, Karimbil Kunhikoman, Chemudu and Vijayanagaram, he argues that the Supreme Court drew a workable line — substantive reasonableness, non-illusory compensation, public purpose tested in court — until political amendments removed those tests, replacing the rule of law with what he calls a "totalitarian slant" on State power. The second half generalises the argument from property to business, corporations and the freedom of trade under Articles 19(1)(g) and 301–307. Rao warns that nationalisation, corporate management takeovers and the open-ended Ninth Schedule together convert constitutional democracy into something closer to centralised planning. He insists planning is compatible with democracy only when subjected to the rule of law; haphazard, ideology-driven planning, he says, will end either in failure or in the death of democracy. Rao closes with a constitutional and philosophical creed: democratic socialism, lucidly explained by A. B. Shah, can be reconciled with individual right; what cannot be reconciled is the unrestrained constituent power exercised by transitory parliamentary majorities. The Supreme Court has saved the other fundamental rights — speech, religion, equality, personal liberty — but its salvage of property has been incomplete. The lecture ends with a plea for "a just society where a right balance will be maintained between the right to property and social justice," and a warning that India's tragedy is "the uninformed repetition of foreign slogans." ## Key points - Frames A. D. Shroff as neither doctrinaire Marxist nor nineteenth-century capitalist but a believer in a Welfare State whose economic philosophy synchronised with the Constitution's. - Rejects the textbook doctrine that property exists only because law recognises it: the Constitution, Rao argues, accepted property as it stood under statute, custom and common law and only then subjected it to reasonable restrictions. - Reads the right to property as three rights — to acquire, to possess and enjoy, and to dispose — each subject to taxation, police power, eminent domain and public-interest restriction, but not to extinction by redefinition. - Traces the erosion through the First (Article 31A and 31B), Fourth (compensation made non-justiciable) and Seventeenth (expansion of 'estate' to forest, waste and slum lands) Amendments, plus the open-ended Ninth Schedule. - Builds a doctrinal arc through Kochuni, Seethabhathi Devi, Vajravelu, Karimbil Kunhikoman, Ranjit, Chemudu, Vijayanagaram and the Bank Nationalisation-adjacent corporate-personality cases to show how courts policed reasonableness until amendments removed the tests. - Extends the property argument to corporate personhood and freedom of trade, warning that nationalisation, state takeovers of management, and forced amalgamations under amended Article 31A convert the Constitution's safeguards into mere slogans. - Distinguishes democratic from totalitarian planning: democratic planning works within the rule of law and operates as a tool of free, complex human personality; totalitarian planning, however efficient, kills democracy. - Concludes that the Supreme Court protected most fundamental rights but only partially saved property, and pleads for constitutional pragmatism rather than ideological imitation of foreign models. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] PROSPERITY BEYOND OUR CITIES BY SPREADING ENTERPRISE URL: https://indianliberals.in/primary-works/prosperity-beyond-our-cities-by-spreading-enterprises-r-gopalakrishnan-october-10-2007/ ### Summary Delivered as the 41st A. D. Shroff Memorial Lecture in Mumbai on 12 October 2007 and published as a Forum of Free Enterprise booklet, R. Gopalakrishnan's address argues that India's much-celebrated macro-economic growth has scarcely reached the roughly sixty per cent of the population living in rural areas and small towns — what he calls 'Little India'. The remedy he proposes is not another centrally-administered programme but the deliberate liberation of enterprise through decentralization: returning power, finance and decision-making to villages, panchayats and small-town entrepreneurs so that latent energies are released for socio-economic development. Gopalakrishnan grounds the case historically. He recalls that India was for centuries a 'no-government condition' of self-governing village communities, that Indians were prominent in trade and industry between the seventeenth and nineteenth centuries, and that the Indian enterprise gene has survived invasion, colonial rule and partition. He contrasts that inheritance with post-independence centralization, citing C.… ### Body # PROSPERITY BEYOND OUR CITIES BY SPREADING ENTERPRISE *By R. Gopalakrishnan* ## Summary Delivered as the 41st A. D. Shroff Memorial Lecture in Mumbai on 12 October 2007 and published as a Forum of Free Enterprise booklet, R. Gopalakrishnan's address argues that India's much-celebrated macro-economic growth has scarcely reached the roughly sixty per cent of the population living in rural areas and small towns — what he calls 'Little India'. The remedy he proposes is not another centrally-administered programme but the deliberate liberation of enterprise through decentralization: returning power, finance and decision-making to villages, panchayats and small-town entrepreneurs so that latent energies are released for socio-economic development. Gopalakrishnan grounds the case historically. He recalls that India was for centuries a 'no-government condition' of self-governing village communities, that Indians were prominent in trade and industry between the seventeenth and nineteenth centuries, and that the Indian enterprise gene has survived invasion, colonial rule and partition. He contrasts that inheritance with post-independence centralization, citing C. Rajagopalachari's image of long intervals between effective governments, Milton Friedman's taxonomy of spending modes, and a cluster of contemporary indicators — flat rural per-capita income, shrinking rural credit share, unelectrified villages, judicial backlogs of 425–1,165 days for contract enforcement, and lawlessness in 150–165 districts — to show that the Bharat Nirman model of spending other people's money on other people is not closing the gap. The speech then turns constructive. Drawing on a Tata Services study of 1,200 entrepreneurs across twelve village clusters, on KVIC, Chetna Gala Sinha's Mann Deshi Udyogini, Dhriti, Citibank's micro-entrepreneurship awards, and Tata BP Solar's rural employment model, Gopalakrishnan sketches a four-driver template — infrastructure, finance and facilitation, rural MBA training, and social capital — that small-town and village enterprise needs. He cites Hernando de Soto on the necessity of functioning markets in land, credit and agro-produce, and argues that markets, panchayat finance and trust in local 'lords' are the route to scalability. The concluding section is openly polemical. Gopalakrishnan warns of six symptoms of a 'brewing crisis' in which leaders recognise problems but defer costly fixes, endorses the Bombay Chamber's proposal to let panchayats raise their own revenue (drawing on a paper that shows land revenue alone could raise Rs 25,000 crores), and insists that the agenda is evolutionary, not the dramatic industrial dismantling of the 1990s. A short biographical postscript and a quotation from Eugene Black — 'People must come to accept private enterprise not as a necessary evil, but as an affirmative good' — close the booklet, framing the lecture as an extension of A. D. Shroff's classical-liberal lineage. ## Key points - Macro growth of the last five years has mainly served urban 'Big India'; the 60 per cent of Indians in villages and small towns ('Little India') have been bypassed. - Gopalakrishnan frames decentralization and enterprise as 'two sides of the same coin' — centralized bureaucratic schemes stifle rather than release the natural enterprise of Indians. - A historical sweep — Mohenjodaro–Harappa trade, Takshila as the first university, a 'government-less civilization' of self-governing village communities — is used to argue that India's default state has been decentralized and entrepreneurial. - Empirical indicators of stagnation in Little India: flat rural per-capita income 1980–2000, rural credit share shrinking from 27% (1994) to 18% (2006), millions in unelectrified villages, contract-enforcement delays of 425–1,165 days, 150–165 districts under Naxal disturbance, land-ownership disputes covering nine-tenths of land. - A Tata Services / DES study of 1,200 entrepreneurs identifies four drivers for sparking enterprise in small towns and villages: Infrastructure, Finance & Facilitation, 'Rural MBA' training, and Social Capital — mirroring David McClelland's classic findings. - Examples of scalable rural enterprise are surveyed: KVIC, Mann Deshi Udyogini, Sheetalmata Sabzi Mandi at Khamla, Dhriti, Citibank's 22-state award scheme, KIVA, the ICECD/TCRDS 'rural MBA' programme, and Tata BP Solar's solar-panel manufacturing model. - Reform proposals: empower panchayats to raise revenue (per the Bombay Chamber paper, land revenue alone could yield Rs 25,000 crores), accept Hernando de Soto's argument for functioning markets in land/credit/produce, and move from 'Stop' and 'Slow down' to 'Accelerate' on decentralized governance. - The agenda is framed as evolutionary, not dramatic — but urgent, closing with A. D. Shroff's spirit of urgency and Eugene Black's defence of private enterprise as 'an affirmative good'. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] PROSPERITY THROUGH FREE ECONOMY — A CASE STUDY OF TAIWAN URL: https://indianliberals.in/primary-works/prosperity-through-free-enterprise-a-case-study-of-taiwan-by-kv-narain-november-9-1964/ ### Summary K. V. Narain's two-page Forum of Free Enterprise leaflet, reprinted from a Tokyo correspondent's despatch in The Hindu (Madras, 23 May 1964), uses Taiwan as a worked example of what free-enterprise policy combined with carefully sequenced land reform can deliver. Narain reports an island with no visible dire poverty, sound currency, and the absence of inflation, where stores carry foodstuffs, clothing and consumer goods, where literacy exceeds 96 per cent, and where the average monthly income for permanent employees runs between roughly NT$2,000 and NT$4,000 (about US$50 to US$100). Education is free and compulsory for six years; per-capita income has risen by some 7.5 per cent annually for fifteen years. The spine of the argument is the land reform programme begun in 1949.… ### Body # PROSPERITY THROUGH FREE ECONOMY — A CASE STUDY OF TAIWAN *By K. V. Narain* ## Summary K. V. Narain's two-page Forum of Free Enterprise leaflet, reprinted from a Tokyo correspondent's despatch in The Hindu (Madras, 23 May 1964), uses Taiwan as a worked example of what free-enterprise policy combined with carefully sequenced land reform can deliver. Narain reports an island with no visible dire poverty, sound currency, and the absence of inflation, where stores carry foodstuffs, clothing and consumer goods, where literacy exceeds 96 per cent, and where the average monthly income for permanent employees runs between roughly NT$2,000 and NT$4,000 (about US$50 to US$100). Education is free and compulsory for six years; per-capita income has risen by some 7.5 per cent annually for fifteen years. The spine of the argument is the land reform programme begun in 1949. Rent was first capped at 37.5 per cent of the farm-rent payable to landlords; the state then sold public land to its tillers; and finally, under the Land-to-the-Tiller scheme, private landowners were required to sell tenanted holdings in excess of 7.5 acres of medium-grade paddy (or equivalent), receiving 70 per cent in land bonds and 30 per cent in stock of government industrial enterprises that were subsequently transferred to private ownership. Narain reports 256,000 hectares redistributed to 298,000 tenant families, with a further 158,000 tenant families brought onto former public land. Rice yields per hectare rose from 3,896 kg in 1948 to 5,216 kg by 1960; production climbed from 6,800 kg of paddy on a 300-kg leasehold to higher owner-cultivated volumes. The leaflet treats land reform as the platform for industrial take-off rather than its alternative. The four-year plans launched in 1953 emphasised power, fertiliser, petroleum and railways; the second plan added co-ordination of agriculture and industry plus an export drive; the third (1961) consolidated the gains. Industrial output spans chemicals, cement, aluminium, building materials and a widening range of consumer goods including electrical appliances, bicycles and sewing machines. Textiles, processed foods and fertilisers led the export expansion: textile exports rose from US$35 million to US$43 million, and the country's external accounts swung from a chronic US$80-million annual deficit covered by U.S. aid to a US$20-million favourable trade balance in 1963, with foreign-exchange reserves of US$200 million. The implied moral, signposted in Narain's editorial footnote, is that Taiwan's record "clearly indicates the benefits of a free enterprise economy" for Indian readers debating planning and the public sector. ## Key points - Reprints a Tokyo despatch published in The Hindu (Madras, 23 May 1964); the leaflet's editorial frame presents Taiwan as a free-enterprise success story for Indian readers. - Narain reports no visible dire poverty, sound currency, no inflation, literacy above 96 per cent, and average monthly incomes of NT$2,000-$4,000 (about US$50-$100) for permanent employees. - The 1949 land reform capped tenant rent at 37.5 per cent of the farm rent payable to landlords, with the state subsequently selling public land to its tillers. - Under the Land-to-the-Tiller scheme, landlords retained up to 7.5 acres of medium-grade paddy (or equivalent); excess holdings were transferred to tenants, with compensation paid 70 per cent in land bonds and 30 per cent in shares of state industrial enterprises that were then privatised. - Reported redistribution: 256,000 hectares to 298,000 tenant families, plus 158,000 tenant families brought onto former public land. - Per-hectare rice yield rose from 3,896 kg (1948) to 5,216 kg (1960); per-capita income grew about 7.5 per cent annually over fifteen years. - Four-year plans from 1953 emphasised power, fertiliser, petroleum, railways and exports; industrial output now spans chemicals, cement, aluminium, electrical appliances, bicycles and sewing machines. - Textile exports rose from US$35 million to US$43 million; the trade account swung from a chronic US$80-million annual deficit covered by U.S. aid to a US$20-million surplus in 1963, with US$200 million in foreign-exchange reserves. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] Prune the Plan URL: https://indianliberals.in/primary-works/prune-the-plan-prof-b-r-shebnoy-january-1-1970/ ### Summary Prune the Plan is the full text of an address by Professor B. R. Shenoy, delivered in Bombay on June 17, 1957, on the Union Budget and the Second Five-Year Plan. Shenoy opens with the arithmetic of the Plan: the first two years' outlay of about Rs. 1,600 crores is roughly 75% of the contemplated expenditure, the Government insists it will stick to the Plan whatever the difficulties, yet the resources to do so simply do not exist either at home or from abroad. The whole of the Plan's overall resource gap of Rs. 2,500 crores, he argues, sits inside the Public Sector, while the Private Sector's own target of Rs. 2,400 crores is already fully committed — so any attempt to close the gap by tapping private savings amounts to confiscation rather than democratic finance. The core argument is austerely classical: economic development is a function of invested savings, and a poor country with per-capita income of Rs. 23.42 a month against America's Rs. 775 cannot will into existence resources it does not have.… ### Body # Prune the Plan *By B. R. Shenoy* ## Summary Prune the Plan is the full text of an address by Professor B. R. Shenoy, delivered in Bombay on June 17, 1957, on the Union Budget and the Second Five-Year Plan. Shenoy opens with the arithmetic of the Plan: the first two years' outlay of about Rs. 1,600 crores is roughly 75% of the contemplated expenditure, the Government insists it will stick to the Plan whatever the difficulties, yet the resources to do so simply do not exist either at home or from abroad. The whole of the Plan's overall resource gap of Rs. 2,500 crores, he argues, sits inside the Public Sector, while the Private Sector's own target of Rs. 2,400 crores is already fully committed — so any attempt to close the gap by tapping private savings amounts to confiscation rather than democratic finance. The core argument is austerely classical: economic development is a function of invested savings, and a poor country with per-capita income of Rs. 23.42 a month against America's Rs. 775 cannot will into existence resources it does not have. Shenoy walks through the heads of finance — taxation, market loans, small savings, self-financing by industry, credit creation by commercial banks, deficit financing — and shows that each is either tapped out, already counted, or inflationary. Heavy current-year taxation has hit share values and dividends and contracted private investment; subscriptions to Government loans have exceeded expectations only because inflationary funds are circulating back as 'voluntary' savings; deficit financing has already pushed wholesale prices up 27% in twenty months. From this diagnosis flow concrete consequences he is unsparing about: an acute foreign-exchange scarcity caused by over-investment, a yawning gap between internal and external gold prices (Rs. 62.50 per tola official, around Rs. 105 in Bombay) that the Sea Customs Act and an inverted burden of proof on gold-holders cannot close, and the spectacle of a Government 'clipping the civil liberties of the individual' in the manner of medieval monarchs clipping coins. Shenoy's prescription is in the title: prune the Plan to the resources actually available, devalue the rupee to its real value, restore a balanced budget, and accept that inflation, once tolerated as a tool of development, will deliver less growth than the permissible maximum, not more. The pamphlet closes with the publisher's standing invitation to join the Forum of Free Enterprise. ## Key points - Frames the Second Five-Year Plan's Rs. 2,500-crore overall resource gap as wholly located in the Public Sector, with the Private Sector's Rs. 2,400-crore target already fully committed. - Insists on the classical proposition that economic development is a function of invested savings, and that a society cannot invest resources it does not possess. - Contrasts U.S. per-capita income of Rs. 775 per month with India's Rs. 23.42 per month to argue that whatever 'socialistic pattern of society' is to be built must be built within that constraint. - Argues that heavy taxation in the current year has depressed share values and dividends and has therefore reduced rather than augmented investment. - Treats apparent successes of public subscription to Government loans as artefacts of inflationary money flowing back through the State, not as genuine voluntary saving. - Documents a 27% rise in prices in 20 months from deficit financing and warns that further deficit finance will deliver development below — not above — the permissible maximum. - Identifies an acute foreign-exchange scarcity as the direct consequence of over-investment, with imports rising from index 106 to 135 even as exports fell from 112 to 106. - Reads the Sea Customs Act's reversal of the burden of proof on seized gold as a 'case of clipping the civil liberties of the individual', analogous to medieval coin-clipping. - Prescribes pruning the Plan to available resources, devaluing the rupee to its real value, and restoring non-inflationary budget financing. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] PUBLIC ACCOUNTABILITY URL: https://indianliberals.in/primary-works/public-accountability-m-r-masani-m-p-february-10-1970/ ### Summary M. R. Masani's lecture, delivered under the auspices of the Forum of Free Enterprise in Bombay on 8 October 1969 and printed as a booklet on 10 February 1970, argues that public accountability — Parliament's actual capacity to scrutinise the expenditure of public money and the conduct of public enterprises — is the indispensable instrument by which untamed power is restrained in a parliamentary democracy. Drawing on his recent two-year term as Chairman of the Public Accounts Committee (1967–69), Masani opens with the old maxim 'no taxation without representation' and surveys three constitutional levers available to MPs: the vote on Demands for Budget Grants, parliamentary questions, and the standing financial committees (Public Accounts, Estimates, Public Undertakings). He finds each blunted in Indian practice: budget cuts are token, questions are wasted on the trivial, and even the committees suffer from a time-lag between spending and investigation that drains their findings of bite. The bulk of the lecture is a sharp indictment of state industrial and commercial enterprises.… ### Body # PUBLIC ACCOUNTABILITY *By M. R. Masani, M.P.* ## Summary M. R. Masani's lecture, delivered under the auspices of the Forum of Free Enterprise in Bombay on 8 October 1969 and printed as a booklet on 10 February 1970, argues that public accountability — Parliament's actual capacity to scrutinise the expenditure of public money and the conduct of public enterprises — is the indispensable instrument by which untamed power is restrained in a parliamentary democracy. Drawing on his recent two-year term as Chairman of the Public Accounts Committee (1967–69), Masani opens with the old maxim 'no taxation without representation' and surveys three constitutional levers available to MPs: the vote on Demands for Budget Grants, parliamentary questions, and the standing financial committees (Public Accounts, Estimates, Public Undertakings). He finds each blunted in Indian practice: budget cuts are token, questions are wasted on the trivial, and even the committees suffer from a time-lag between spending and investigation that drains their findings of bite. The bulk of the lecture is a sharp indictment of state industrial and commercial enterprises. Citing the latest Audit Report's finding that 70 Central Government undertakings returned only 0.8 per cent on Rs. 1,200 crores of invested capital in 1965–66, with losses already announced of Rs. 40 crores in the current year, Masani argues that the very 'no-profit, no-loss' doctrine Galbraith dubbed 'post office socialism' is the source of the malaise: an enterprise that cannot earn a profit has no right to exist, because profit is the yardstick of efficiency. He invokes C. D. Deshmukh's 1953 Lok Sabha speech, the Administrative Reforms Commission's October 1968 report on Public Sector Undertakings, and the Chanda Committee on AIR to argue that ministerial interference must be reduced, that ministers should be barred from chairing public undertakings, and that any directive must be reduced to writing and laid before Parliament. Masani then deploys two notable converts to bolster his case: John Kenneth Galbraith, the former U.S. Ambassador to India, whose 'New Industrial State' he reads as a confession of disillusionment with aggressive public control, and Lee Kuan Yew, the socialist Prime Minister of Singapore, who in a Bombay address asked why the bustling free-enterprise economies of Japan, Hong Kong, Formosa, Thailand and Malaysia had outperformed their socialist neighbours. He concludes that the conflict between business efficiency and political control is irreconcilable: competition must be restored, state monopolies in fields like life insurance and airlines must be broken up, and infrastructure aside, enterprises that cannot run profitably should be denationalised — sold to those willing to take the risk, as Germany, Japan and France have done. He ends with an arresting anecdote: even Yugoslav communists, in conversations he had in Belgrade in 1955, told him that a failing public enterprise should be allowed to fold up and its managers sent back to the bench. ## Key points - Public accountability is defined narrowly as parliamentary scrutiny of public money — grounded in the maxim 'no taxation without representation' and the principle that untamed power is a menace. - Three parliamentary instruments — Demand for Grants votes, Questions, and the financial Standing Committees (PAC, Estimates, Public Undertakings) — are each shown to be eroded in Indian practice by token cuts, supplementaries, and a long time-lag between spending and investigation. - Masani cites the latest Audit Report's finding that 70 Central Government enterprises returned only 0.8 per cent on Rs. 1,200 crores of capital in 1965–66, with announced losses of Rs. 40 crores in the current year, to argue that the 'no-profit, no-loss' doctrine of state enterprise is structurally broken. - He endorses the Administrative Reforms Commission report on Public Sector Undertakings (October 1967) and its recommendation that no Minister should chair a public undertaking and that any ministerial interference must be reduced to writing and reported to Parliament. - He marshals the testimony of Galbraith (recanting via 'The New Industrial State') and Lee Kuan Yew (asking why East Asia's free-enterprise economies are outpacing Asian socialism) to argue that even leading socialists have conceded the failure of state industry. - Masani proposes restoring competition by breaking state monopolies in life insurance, civil aviation and similar fields, and denationalising loss-making enterprises along the lines of post-war Germany, Japan and France. - He invokes a Yugoslav precedent — communist managers in 1955 told him that a failing public enterprise should be allowed to fold up and its managers sent back to ordinary work — to argue that even doctrinaire socialists accept the discipline of profit. - Throughout, Masani frames public accountability as the reconciliation of business efficiency with democratic control, and warns that without it, management becomes a 'sovereign entity' answerable to no one. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] PUBLIC ACTION TO REMEDY HUNGER URL: https://indianliberals.in/primary-works/public-action-to-remedy-hunger-prof-amartya-sen/ ### Summary Public Action to Remedy Hunger reprints Amartya Sen's 1990 Arturo Tanco Memorial Lecture, reissued by the Forum of Free Enterprise in November 1998 to mark his Nobel Prize. In the rendered pages, Sen distinguishes two faces of hunger — transient but violent famines and the more persistent, less spectacular phenomenon of endemic undernourishment — and argues that both yield to systematic public action, including legislation, an open press, democratic accountability, and the active engagement of markets, civil society, and the state working in concert. He rejects the fatalism that has long dampened preventive effort, illustrating it through James Mill's gloomy 1816 letter to David Ricardo, and insists that the 'inflamed minds of the lower orders' have historically been closer to the truth than the resigned philosophers. On endemic deprivation, Sen develops a now-familiar comparative argument: countries and regions that have invested in basic health care, female education, and public provisioning — Kerala, Sri Lanka, Costa Rica, Chile, Jamaica, and pre-1979 China — outperform much richer 'unaimed opulence' economies such as Brazil and Oman in life expectancy and child mortality.… ### Body # PUBLIC ACTION TO REMEDY HUNGER *By Amartya Sen* ## Summary Public Action to Remedy Hunger reprints Amartya Sen's 1990 Arturo Tanco Memorial Lecture, reissued by the Forum of Free Enterprise in November 1998 to mark his Nobel Prize. In the rendered pages, Sen distinguishes two faces of hunger — transient but violent famines and the more persistent, less spectacular phenomenon of endemic undernourishment — and argues that both yield to systematic public action, including legislation, an open press, democratic accountability, and the active engagement of markets, civil society, and the state working in concert. He rejects the fatalism that has long dampened preventive effort, illustrating it through James Mill's gloomy 1816 letter to David Ricardo, and insists that the 'inflamed minds of the lower orders' have historically been closer to the truth than the resigned philosophers. On endemic deprivation, Sen develops a now-familiar comparative argument: countries and regions that have invested in basic health care, female education, and public provisioning — Kerala, Sri Lanka, Costa Rica, Chile, Jamaica, and pre-1979 China — outperform much richer 'unaimed opulence' economies such as Brazil and Oman in life expectancy and child mortality. Because health and education are labour-intensive, they are also relatively cheap in poor countries, so the pessimism about affordability is overstated. He then turns to famines as entitlement failures rather than mere food-availability collapses, drawing on the Bengal famine of 1943, the Wollo famine in Ethiopia (1973), and the Bangladesh famine of 1974 to show how famines 'survive by divide and rule', and how modest income-creating public works — re-establishing entitlements for affected occupation groups — can avert mass starvation at very small fiscal cost. The rendered chunk closes with a discussion of food production, diversification, and the special predicament of sub-Saharan Africa, where the underlying problem is general economic stagnation, not food output alone. ## Key points - Hunger has two distinct faces — episodic famines and chronic endemic undernourishment — that demand different strategic responses but are both tractable through public action. - Pessimism about hunger is empirically unfounded; Sen traces it to a long intellectual lineage (Mill and Ricardo in 1816) and treats it as the chief obstacle to remedial effort. - Public action is broader than state action: it includes a free press, democratic rights, popular vigilance, and the cooperation of markets and civil society rather than the state as 'lone ranger'. - Kerala, Sri Lanka, China before 1979, Costa Rica, Chile, and Jamaica show that poor economies can achieve rich-country mortality and life-expectancy outcomes through public provisioning of health and basic education, especially female literacy. - Labour-intensive social services are cheaper in poor countries because wages are low, so the affordability objection against publicly funded health and education is weaker than commonly assumed. - Famines are entitlement failures, not necessarily failures of food availability — Bengal 1943, Wollo 1973, and Bangladesh 1974 all featured adequate or near-peak food supplies but collapsed purchasing power among specific occupation groups. - Famine prevention is fiscally cheap: even where potential victims constitute 10 per cent of the population, restoring their income may require only about 3 per cent of GNP, so timely public employment schemes can avert starvation at modest cost. - For sub-Saharan Africa the diagnosis is overall economic stagnation rather than food-output decline alone; diversification and broader sources of income, not just expansion of food crops, are essential. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] PUBLIC ENTERPRISES IN INDIA URL: https://indianliberals.in/primary-works/public-enterprises-in-india-by-ak-chandra-august-8-1960/ ### Summary A. K. Chanda, writing as Comptroller and Auditor-General of India, examines the rapid post-Independence expansion of state enterprise in India and argues that the institutional habits of departmental government are choking the very public ventures the Centre has staked its industrial future on. He traces the lineage of the public sector from the nationalisation of the railways in 1924 and the equity capital of the Reserve Bank to the Industrial Policy Resolution of 1948, which made state initiative "a significant ingredient of her economic development". Drawing on Herbert Morrison and on British experience under nationalisation, Chanda insists that a corporate enterprise needs autonomy and elasticity if it is to deliver the very purposes for which it was created. The essay then turns to the practical record. Chanda catalogues failures of planning, location, and execution — the loss of eighteen months at Rourkela, the eleven-crore Konar Dam dedicated by the Prime Minister but not yet producing a kilowatt of power or an irrigated acre, contracts placed with under-qualified firms despite warnings, and the political and parochial pressures determining the siting of steel refineries.… ### Body # PUBLIC ENTERPRISES IN INDIA *By A. K. Chanda* ## Summary A. K. Chanda, writing as Comptroller and Auditor-General of India, examines the rapid post-Independence expansion of state enterprise in India and argues that the institutional habits of departmental government are choking the very public ventures the Centre has staked its industrial future on. He traces the lineage of the public sector from the nationalisation of the railways in 1924 and the equity capital of the Reserve Bank to the Industrial Policy Resolution of 1948, which made state initiative "a significant ingredient of her economic development". Drawing on Herbert Morrison and on British experience under nationalisation, Chanda insists that a corporate enterprise needs autonomy and elasticity if it is to deliver the very purposes for which it was created. The essay then turns to the practical record. Chanda catalogues failures of planning, location, and execution — the loss of eighteen months at Rourkela, the eleven-crore Konar Dam dedicated by the Prime Minister but not yet producing a kilowatt of power or an irrigated acre, contracts placed with under-qualified firms despite warnings, and the political and parochial pressures determining the siting of steel refineries. He links these to defects in the constitution of the Boards (overweighted with the official block, leavened by senior officials and political chiefs) and to a finance-representative veto that drains autonomy back to the Ministry. The case of Life Insurance Corporation is offered as a classic example of non-official directors being overridden without recourse to a formal Board decision. The closing argument is reformist rather than abolitionist: Chanda proposes wider non-official representation on Boards, the offering of roughly twenty-five per cent of equity capital for public subscription, and a constitutional re-balancing of the Minister's role from operational control to general policy guidance. He treats parliamentary accountability and managerial autonomy as reconcilable, provided the Board is freed from the "directives, the consultations they (the Ministers) escape responsibility" and given clear policy direction from above. The pamphlet ends with a call for a re-orientation of policy capable of producing State enterprises that are genuinely competent, industrially strong, and economically viable. ## Key points - Public enterprise is now "a permanent and important sector of national economic life", but its growth in India was unplanned and spasmodic rather than ideologically driven. - The Industrial Policy Resolution of 1948 made state initiative a significant component of economic development, building on prior nationalisations such as the railways (1924) and the equity capital of the Reserve Bank. - Departmental rules and Treasury-style controls are unsuitable for state commercial enterprises, which require autonomy, elasticity, and managerial speed — Chanda invokes Herbert Morrison and UK nationalised industry to support the point. - Concrete operational failures are catalogued: the Rourkela plant lost eighteen months to indecision, the Konar Dam component of the Damodar Valley Corporation cost over Rs. 11 crores without producing power or irrigation, and steel-refinery siting was driven by political and parochial pressures rather than economic logic. - Boards of state enterprises are dominated by an "official block" of civil servants and political chiefs, and the finance representative's veto over capital expenditure exceeding Rs. 10 lakhs re-imposes departmental drag on supposedly autonomous companies. - Parliamentary accountability for state enterprises is theoretical rather than effective: by refraining from exercise of their directional powers, Ministers escape responsibility while still influencing companies through consultation. - Reform proposals include enlarging the proportion of non-official Directors with industrial and labour expertise, opening 25 per cent of equity to public subscription, and confining the Minister to broad policy guidance rather than directive intervention. - Chanda treats the question as one of institutional design — re-orienting policy to bring "greater realism in planning, competence and wider interest in management" — not of dismantling the public sector. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] Public Opinion on Private and State Enterprises URL: https://indianliberals.in/primary-works/public-opinion-on-private-and-state-enterprises-various-dec9-1962/ ### Summary This Forum of Free Enterprise booklet, dated 9 December 1962, compiles selected letters to the editor that had appeared in major Indian newspapers — the Statesman of Calcutta, the Indian Express of Bombay, the Hindu of Madras, the Times of India and Navabharath of Mangalore — protesting the inefficiency of nationalised state enterprises. The Forum's brief introduction frames the exercise: freedom, like oxygen, is taken for granted until its supply is threatened, and the nationalisation slogans of the day have obscured the value of private enterprise. By printing letters that contrast the service once rendered by private firms with the bureaucratic torpor that succeeded them, the booklet aims to surface dangers of state monopolies that, in the editor's words, can and often do exploit the ordinary consumer. The letters cover a representative spread of state-run undertakings. Subscribers and policy-holders of the Life Insurance Corporation describe lapsed premiums, missing receipts and stonewalling officials; a field officer of the LIC writes from the inside to attack the "Policy-holder" reply offered by Mr. P. R.… ### Body # Public Opinion on Private and State Enterprises ## Summary This Forum of Free Enterprise booklet, dated 9 December 1962, compiles selected letters to the editor that had appeared in major Indian newspapers — the Statesman of Calcutta, the Indian Express of Bombay, the Hindu of Madras, the Times of India and Navabharath of Mangalore — protesting the inefficiency of nationalised state enterprises. The Forum's brief introduction frames the exercise: freedom, like oxygen, is taken for granted until its supply is threatened, and the nationalisation slogans of the day have obscured the value of private enterprise. By printing letters that contrast the service once rendered by private firms with the bureaucratic torpor that succeeded them, the booklet aims to surface dangers of state monopolies that, in the editor's words, can and often do exploit the ordinary consumer. The letters cover a representative spread of state-run undertakings. Subscribers and policy-holders of the Life Insurance Corporation describe lapsed premiums, missing receipts and stonewalling officials; a field officer of the LIC writes from the inside to attack the "Policy-holder" reply offered by Mr. P. R. Gupta and argue that the Corporation's administrative machinery cannot keep pace with its growing volume. Other correspondents complain of postal money-order instalments rejected on technicalities, of registered parcels lost without recourse, of State Transport buses now used as mailbags, of BEST electricity billing chaos in Bombay, and of the decline of the Kolar Goldfields after nationalisation drove out experienced engineers. A further cluster of letters turns to the Ministry of Information and Broadcasting and its arms — All India Radio, the Films Division and the Central Film Censors Board — describing them as instruments of official propaganda, vested patronage and stifled private cultural enterprise; T. N. Kalidoss Aiyar protests the way nationalised railways have raised fares and freight while running at fifty per cent efficiency; and "Y. Z." reports from an educational tour of Hindustan Shipyard, Chittaranjan Locomotive Works, Nangal Fertilisers and the Heavy Water Plant whose upkeep, he says, compares unfavourably with TELCO, Ashok Leyland and TISCO. Closing pages carry signed slogans by Eugene Black of the World Bank and A. D. Shroff, and a recruitment notice inviting readers to join the Forum. ## Key points - Publication is a 1962 Forum of Free Enterprise booklet that anthologises letters to the editor from leading Indian newspapers (Statesman, Indian Express, Hindu, Times of India, Navabharath) attacking the performance of nationalised undertakings. - The introduction articulates the Forum's framing thesis: nationalisation slogans have obscured the value of private enterprise, and contrast with state monopolies is now revealing what was lost. - Multiple letters target the Life Insurance Corporation — bureaucratic non-receipt of premia, lapsed policies, unanswered correspondence — including a letter from a serving LIC field officer arguing that the Corporation's administrative machinery has become obsolete. - Other complaints itemise failures at the postal department, State Transport buses doubling as postal carriers, the Bombay Electric Supply and Transport Undertaking (B.E.S.T.) and its billing irregularities. - Several letters tie the decline of the Kolar Goldfields to the post-nationalisation exodus of experienced Indian mining engineers under Mysore Government recruitment rules. - A bloc of letters indicts the Ministry of Information and Broadcasting and its arms — All India Radio, the Films Division, the Central Film Censors Board — as propaganda monopolies that have stifled the private documentary sector. - T. N. Kalidoss Aiyar contests nationalised Indian Railways' fare and freight hikes, citing that the project ran at only fifty per cent efficiency in spite of huge expenditure on the 70-percent rule. - The closing letter ("Y. Z.") reports a study tour finding the Hindustan Shipyard, Chittaranjan Locomotive Works, Nangal Fertilisers and the Heavy Water Plant in technically informal and poorly maintained condition compared to private firms like TELCO, Ashok Leyland and TISCO. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] Public Sector Wastage - Issues and Challenges URL: https://indianliberals.in/primary-works/public-sector-wastage-sunil-s-bhandare-march-3-2014/ ### Summary Sunil S. Bhandare's booklet, originally delivered as a talk at the Nani A. Palkhivala Memorial Trust in Mangalore on 20 January 2014 and reissued by the Forum of Free Enterprise, frames the squandering of India's public resources as a tragedy of national time, energy and manpower. Writing in the policy idiom of the Forum — Minoo R. Shroff's foreword insists on "the business of government is governance and not business" — Bhandare argues that India's declining productivity of capital, stalling reforms and rising populism have all been compounded by the wastage embedded in how the Centre, States and public sector undertakings spend money. Wastage in his definition encompasses depletion, drain and leakage: cost and time overruns, excess capacities, mindless misdirected subsidies, loan waivers and write-offs, persistent budgetary support to loss-making PSUs, and the forced extraction of high dividends from cash-rich PSUs. Part I situates the problem inside the post-2008 global expansion of state spending and the Indian post-reforms surge in combined Centre-State expenditure (a 14.2% annual rate over 1991-92 to 2012-13).… ### Body # Public Sector Wastage - Issues and Challenges *By Sunil S. Bhandare* ## Summary Sunil S. Bhandare's booklet, originally delivered as a talk at the Nani A. Palkhivala Memorial Trust in Mangalore on 20 January 2014 and reissued by the Forum of Free Enterprise, frames the squandering of India's public resources as a tragedy of national time, energy and manpower. Writing in the policy idiom of the Forum — Minoo R. Shroff's foreword insists on "the business of government is governance and not business" — Bhandare argues that India's declining productivity of capital, stalling reforms and rising populism have all been compounded by the wastage embedded in how the Centre, States and public sector undertakings spend money. Wastage in his definition encompasses depletion, drain and leakage: cost and time overruns, excess capacities, mindless misdirected subsidies, loan waivers and write-offs, persistent budgetary support to loss-making PSUs, and the forced extraction of high dividends from cash-rich PSUs. Part I situates the problem inside the post-2008 global expansion of state spending and the Indian post-reforms surge in combined Centre-State expenditure (a 14.2% annual rate over 1991-92 to 2012-13). Bhandare insists that fiscal discipline cannot be sacrificed to the AAP-flavoured populism then ascendant, and that good governance — not more outlays — is the only sustainable route to growth. Part II dissects the classification of expenditure into Plan vs Non-Plan and developmental vs non-developmental, drawing heavily on Dr. C. Rangarajan's 2011 Committee on Efficient Management of Public Expenditure (which recommended scrapping the Plan/Non-Plan distinction) and on the K. P. Geethakrishnan (2001) and Veerappa Moily (2005) Expenditure and Administrative Reforms Commissions to argue that institutional inertia has prevented any serious downsizing of the bureaucracy or reform of the public distribution system. Tables I-III reproduce official Centre-States data showing developmental expenditure recovering to roughly 58-59% of total spending after 2001-02, while social services have absorbed almost half of that share at the expense of physical infrastructure. Part III turns to Central Public Sector Enterprises. Bhandare tabulates that of 225 CPSEs in 2012-13, sixty-three were loss-making and their losses (Rs.276 billion) knocked off much of the profits of the 161 profit-making firms (Rs.1251 billion); oil marketing companies alone recorded under-recoveries of around Rs.550 billion. He revives B. R. Shenoy's 1971 catalogue of "idle production capacities, unconscionable wastage of materials and accessories, incredible over-staffing, lack of cost consciousness, gross neglect of maintenance, high cost and low quality, and pressures by politicians" as still describing CPSE pathologies four decades on, and cites MOSPI data showing average cost overruns of 20% across 584 major government projects, including Rs.420 billion sunk into 426 incomplete Maharashtra irrigation projects and the Udhampur-Srinagar-Baramulla railway whose Rs.30.8 billion cost has ballooned to Rs.195 billion. Part IV ties the diagnosis to a governance agenda — sincere implementation of the Fiscal Responsibility and Budget Management (FRBM) Act, an Outlay-Outcome budget framework, performance monitoring, an autonomous Fiscal Council, and structural disinvestment of CPSEs whose recovery window during the 2003-07 boom years was lost to political expediency. Bhandare closes by invoking CAG Vinod Rai's Harvard Kennedy School address and the United Nations' definition of good governance to argue that civil society, media and the judiciary will have to grow more "vociferous and demanding" to force the Indian state to vacate the economic terrain it has proved incapable of managing profitably. ## Key points - Wastage of public resources is defined broadly as depletion, drain and leakage spanning cost/time overruns, excess capacities, misdirected subsidies, loan waivers, perpetual support to loss-making PSUs, and forced high dividend extraction from cash-rich PSUs. - The macro extent of public-sector wastage in India remains uncounted because village panchayats, urban local bodies and municipalities lack comprehensive composite revenue-and-expenditure data. - Combined Centre-States expenditure grew at 14.2% annually over 1991-92 to 2012-13, with a sharp acceleration after 2008-09 driven by counter-cyclical fiscal stimulus and a thrust towards social-sector spending. - Bhandare endorses the Rangarajan Committee's recommendation to scrap the Plan/Non-Plan distinction and to have Planning Commission consolidate Five Year Plans while the Ministry of Finance handles annual budgeting under a multi-year framework. - Of 225 CPSEs in 2012-13, 161 made aggregate profits of Rs.1251 billion while 63 loss-making CPSEs together lost Rs.276 billion; oil marketing companies recorded under-recoveries of around Rs.550 billion. - B. R. Shenoy's 1971 list of CPSE pathologies — idle capacity, unconscionable wastage, over-staffing, neglected maintenance, political interference — is presented as still valid in 2013. - The lost 2003-07 boom was the optimum window for disinvestment and strategic privatisation, but the political class found vigorous privatisation 'expedient' to avoid even when economically sound. - Reform agenda: rigorous FRBM implementation, Outlay-Outcome budgeting, performance monitoring, an autonomous Fiscal Council, expenditure tilting from revenue to capital, and renewed disinvestment to usher in a competitive, financially viable economic order. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] PUZZLES AND CLUES URL: https://indianliberals.in/primary-works/puzzles-and-clues-m-a-sreenivavsan-1957/ ### Summary Published by the Forum of Free Enterprise in 1957 (reprinted from the Commerce Annual of that year), M. A. Sreenivasan's pamphlet diagnoses India's malaise at the end of the first decade of independence. Sreenivasan opens by conceding the period's impressive monuments — dams, hydro-electric installations, government factories, research laboratories — only to insist that real poverty, unemployment, and a rising cost of living remain untouched, and that the socialist pattern of society has further degraded middle-class life. The trouble, he argues, is a Government-made confusion: contradictory ministerial pronouncements on food control, taxation, deficit financing, and the place of the State leave the ordinary citizen bewildered, while a 'cocksureness' and 'unhealthy superiority complex' among rulers fresh to high office breed habits of idolatry and kowtowing. The pamphlet's argumentative core is a libertarian-leaning warning against the intoxication of power. Sreenivasan recalls serving under autocratic maharajas and viceroys and judges that no viceroy or maharaja ever wielded as much unbridled authority as the present heads of the Central and State Governments.… ### Body # PUZZLES AND CLUES *By MA Sreenivasan* ## Summary Published by the Forum of Free Enterprise in 1957 (reprinted from the Commerce Annual of that year), M. A. Sreenivasan's pamphlet diagnoses India's malaise at the end of the first decade of independence. Sreenivasan opens by conceding the period's impressive monuments — dams, hydro-electric installations, government factories, research laboratories — only to insist that real poverty, unemployment, and a rising cost of living remain untouched, and that the socialist pattern of society has further degraded middle-class life. The trouble, he argues, is a Government-made confusion: contradictory ministerial pronouncements on food control, taxation, deficit financing, and the place of the State leave the ordinary citizen bewildered, while a 'cocksureness' and 'unhealthy superiority complex' among rulers fresh to high office breed habits of idolatry and kowtowing. The pamphlet's argumentative core is a libertarian-leaning warning against the intoxication of power. Sreenivasan recalls serving under autocratic maharajas and viceroys and judges that no viceroy or maharaja ever wielded as much unbridled authority as the present heads of the Central and State Governments. He attacks the second Five-Year Plan as unrealistic, citing eminent economists ignored when they warned that deficit financing would generate uncontrollable inflation; he ridicules the search for development models in Belgrade and Peking when Western democracies have already lifted their people; and he reads the Communist drift of ministerial rhetoric as a self-deception that converts even sane listeners through repetition. The pamphlet closes with five plain prescriptions addressed to the Government: give up the thirst for power and stop encroaching on citizens' liberties and the courts' jurisdiction; stop lecturing the world about Korea, Syria, Vietnam, Egypt, and China and mind India's own business; slash the colossal defence budget given the country's profession of Panch Shila; scrap Prohibition, which the nation can ill afford in lost revenue and enforcement cost and which has corroded respect for law; and, finally, 'don't overdo it' — 'Too little and too late' undid the British Empire, but 'Too much and too soon' must not be allowed to undo independent India. A. D. Shroff's epigraph on the back cover — 'Free Enterprise was born with man and shall survive as long as man survives' — locates the tract squarely within the Forum's classical-liberal programme. ## Key points - Treats 1957 as 'a year of hardship and disenchantment' that has belied even modest expectations a decade after independence. - Concedes physical achievements (dams, factories, laboratories) but insists poverty, unemployment, and inflation remain untouched and have downgraded the middle class. - Blames a Government-made 'confusion' produced by contradictory ministerial pronouncements on food control, taxation, deficit financing, and the proper role of the State. - Identifies the intoxication of power as the deepest problem, arguing today's Central and State Governments wield more unbridled authority than viceroys or maharajas ever did. - Attacks the second Five-Year Plan as unrealistic, citing economists who warned that deficit financing would generate uncontrollable inflation and were ignored. - Mocks the search for development models in Belgrade and Peking when the U.S.A., U.K., Canada, Sweden, and West Germany have already raised their living standards. - Prescribes five remedies: surrender the thirst for power; stop hectoring the world about Korea, Syria, Vietnam, Egypt, and China; slash the defence budget given Panch Shila; scrap Prohibition; and 'don't overdo it'. - Frames the tract as a classical-liberal intervention via the Forum of Free Enterprise, with A. D. Shroff's epigraph on free enterprise as its closing signature. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] QUALITY IN BANKING URL: https://indianliberals.in/primary-works/quality-in-banking-n-vaghul-december-20-1989/ ### Summary Quality in Banking is the text of the 1989 A. D. Shroff Memorial Lecture, delivered in Bombay on 12 October 1989 by N. Vaghul, then Chairman and Managing Director of the Industrial Credit & Investment Corporation of India Ltd (ICICI) and earlier Chairman of Bank of India. The lecture, published as a booklet by The A. D. Shroff Memorial Trust with an introduction by N. A. Palkhivala, opens by paying tribute to Shroff's early defence of free enterprise at a time when 'the nation was riding a wave of socialism', and argues that the collapse of communism in Russia, Poland and Hungary has now vindicated Shroff's stand. Vaghul then narrows his subject from the broader question of liberalisation to a problem he believes Indian bankers have systematically dodged — the relentless emphasis on quantity over quality. The core argument is that Indian banking has confused growth metrics — branch openings, deposit mobilisation, priority-sector targets — with health, and that 'the banking quality has indeed declined' across service, housekeeping and, most seriously, the quality of assets.… ### Body # QUALITY IN BANKING *By N. VAGHUL* ## Summary Quality in Banking is the text of the 1989 A. D. Shroff Memorial Lecture, delivered in Bombay on 12 October 1989 by N. Vaghul, then Chairman and Managing Director of the Industrial Credit & Investment Corporation of India Ltd (ICICI) and earlier Chairman of Bank of India. The lecture, published as a booklet by The A. D. Shroff Memorial Trust with an introduction by N. A. Palkhivala, opens by paying tribute to Shroff's early defence of free enterprise at a time when 'the nation was riding a wave of socialism', and argues that the collapse of communism in Russia, Poland and Hungary has now vindicated Shroff's stand. Vaghul then narrows his subject from the broader question of liberalisation to a problem he believes Indian bankers have systematically dodged — the relentless emphasis on quantity over quality. The core argument is that Indian banking has confused growth metrics — branch openings, deposit mobilisation, priority-sector targets — with health, and that 'the banking quality has indeed declined' across service, housekeeping and, most seriously, the quality of assets. Vaghul calls for what he terms a 'quality movement' and frames its principal lever as a regulatory one: Indian banks should be required to make full public disclosure of their non-performing assets, the provisions held against them, and the bad debts written off each year. The existing secrecy law, he argues, is a hangover from British banking practice; the international banking system has already abandoned it without any loss of public confidence. He also wants an objective accounting rule — interest unreceived for two or three years triggers a non-performing classification — to remove discretion and end the fiction of booking notional interest on which banks then pay real tax. Vaghul defends Indian banks' developmental and risk-bearing role against any naive comparison with conservative banks in the developed world, but insists that the alternative to disclosure is to bequeath a hidden problem to the next generation. He extends the diagnosis to customer service and housekeeping, rejecting the view that the deterioration began with nationalisation in July 1969: bankers did not become 'angels' the day before takeover, and the rot has been steady. The closing pages turn to systems, arguing that Indian banking still runs on procedures inherited from 1920s Scottish bankers that cannot cope with a thousand-fold rise in transactions, while trade-union resistance treats computers as 'a man-eating tiger'. The rendered pages stop at printed page 15, mid-discussion of systems reform; the remainder of the booklet (PDF pages 21–24) is not in view. ## Key points - Vaghul opens by crediting A. D. Shroff for boldly preaching free enterprise during India's socialist tide and treats the fall of communism in Russia, Poland and Hungary as posthumous vindication of Shroff's stand. - He invokes Swami Ranganathananda's reading of Saraswati and Lakshmi as concepts of knowledge and welfare, and proposes that India now needs a 'third goddess' symbolising quality. - The central thesis is that Indian banking is obsessed with quantitative achievements — branches, deposits, priority targets — while service, housekeeping and especially asset quality have visibly deteriorated. - He calls for mandatory public disclosure of doubtful loans, non-performing assets, aggregate provisions and bad debts written off, breaking with a British-era secrecy law that the rest of the banking world has already abandoned. - He proposes an objective, non-discretionary accounting rule: a loan on which interest has not been received for two or three years should be classified as non-performing, ending the practice of booking notional accrued interest (on which banks then pay real tax). - He concedes initial disclosure will be 'traumatic' but argues it will impose internal discipline on branch managers and force timely rehabilitation of sick units, instead of postponing losses to protect the balance sheet. - Deterioration in service, he insists, is not caused by the 1969 nationalisation — employees did not switch character overnight — but is a slow, structural decline. - The systems running Indian banks were designed by Scottish bankers in the 1920s for a fraction of today's transaction volume; ideological resistance from trade unions, who view computers as 'a man-eating tiger', is blocking modernisation. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] Quotas and Reservations URL: https://indianliberals.in/primary-works/quotas-and-reservations-imperative-action-by-sujata-manohar-2006/ ### Summary Quotas and Reservations — Imperatives of Affirmative Action is the printed text of a lecture delivered by Justice (Mrs.) Sujata Manohar (Retd.), a former Chief Justice of the Bombay and Kerala High Courts and Supreme Court judge, at the Annual Day of the Leslie Sawhny Endowment programme on 16th May 2006. The pamphlet was published by the Forum of Free Enterprise in Mumbai and opens with an Introduction signed by Minoo R. Shroff, President of the Forum, who frames the address as an incisive analysis of the country's reservations regime and laments that politicians who divide the nation on the basis of religion and caste 'scar a country forever'. Manohar reads the Indian reservations regime against its constitutional intent. Recalling Martin Luther King, Rabindranath Tagore's Geetanjali, and Ambedkar's Constituent Assembly warning that 'castes are anti national', she argues that Articles 14, 15, 16 and 335 were designed to build a non-discriminatory and fraternal order; the special provisions for women, children, Scheduled Castes and Scheduled Tribes were conceived as short-term, reverse-discrimination measures pending empowerment.… ### Body # Quotas and Reservations *By Justice (Mrs.) Sujata Manohar (Retd.)* ## Summary Quotas and Reservations — Imperatives of Affirmative Action is the printed text of a lecture delivered by Justice (Mrs.) Sujata Manohar (Retd.), a former Chief Justice of the Bombay and Kerala High Courts and Supreme Court judge, at the Annual Day of the Leslie Sawhny Endowment programme on 16th May 2006. The pamphlet was published by the Forum of Free Enterprise in Mumbai and opens with an Introduction signed by Minoo R. Shroff, President of the Forum, who frames the address as an incisive analysis of the country's reservations regime and laments that politicians who divide the nation on the basis of religion and caste 'scar a country forever'. Manohar reads the Indian reservations regime against its constitutional intent. Recalling Martin Luther King, Rabindranath Tagore's Geetanjali, and Ambedkar's Constituent Assembly warning that 'castes are anti national', she argues that Articles 14, 15, 16 and 335 were designed to build a non-discriminatory and fraternal order; the special provisions for women, children, Scheduled Castes and Scheduled Tribes were conceived as short-term, reverse-discrimination measures pending empowerment. The Constituent Assembly's choice of reservations over US-style affirmative action, she contends, was a 'flawed perception' — born of a lack of confidence that prejudice could be overcome by structural support rather than by quota. The core indictment is empirical and institutional. After sixty years no Scheduled Caste or Scheduled Tribe has been removed from the backward list; quotas have only expanded; no inbuilt programme of gradual reduction exists; and reliable data on the reduction of backwardness is missing from public discourse. Manohar walks through the Supreme Court's reasoning in Indra Sawhney v. Union of India and Preeti Srivastava v. State of Madhya Pradesh (she sat on the latter bench), the 50 per cent ceiling, the extension of reservation to promotions, and the running controversies of 2006 — the proposed 27 per cent OBC quota and its extension to IITs, IIMs and the private sector. She argues that quotas have lent themselves to misuse, killed incentive to excel, created a 'vested interest in backwardness', and generated divisive forces stronger than those at independence. The remedy she urges is a massive shift of weight from reservation to affirmative action: economic policy that empowers the backward, fee-regulation and need-based aid in schools and colleges, special effort by both public and private sector to broaden recruitment, and a sustained programme to retain Scheduled Caste children in school (citing a 76 per cent pre-Class X dropout rate). She points to the South African Employment Equity Act — non-quota, duty-based, covering women and other discriminated groups — as a model worth studying, and closes the rendered section on the need for civil society, NGOs, the private sector and government to build schools and colleges that 'generate excellence' rather than parcel out shrinking opportunities by caste. ## Key points - Forum of Free Enterprise pamphlet (Mumbai, 2006) reproducing Justice Sujata Manohar's address at the Leslie Sawhny Endowment Annual Day on 16 May 2006, prefaced by an Introduction signed by Minoo R. Shroff (FFE President). - Reads reservations against the constitutional design of Articles 14, 15, 16 and 335: special provisions were intended as short-term reverse discrimination to make the weak able to compete, not as permanent entitlements. - Argues that opting for reservations instead of US-style affirmative action was a 'flawed perception', driven by lack of confidence that social prejudice could be overcome by structural means. - Empirical indictment: in sixty years no Scheduled Caste or Scheduled Tribe has been removed from the backward list, reservations have only expanded, and there is no inbuilt mechanism for gradual reduction. - Walks through Supreme Court jurisprudence — Indra Sawhney v. Union of India (50% ceiling, promotions) and Preeti Srivastava v. State of M.P. (on which she sat) — and the live 2006 controversies over the 27% OBC quota and its extension to IITs, IIMs and the private sector. - Identifies a 'vested interest in backwardness' and warns that divisive forces unleashed by misused reservations are now stronger than those that existed at independence. - Programmatic recommendations centre on massive affirmative action: basic education quality, fee regulation, need-based aid, retention of Scheduled Caste children in school (76% pre-Class X dropout), and a duty on private and public sector employers to broaden recruitment. - Holds up South Africa's Employment Equity Act — duty-based, non-quota, covering women and a wide range of discriminated groups — as a model India should study. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] Ramtanu Lahiri O Tatkalin Bangosamaj URL: https://indianliberals.in/primary-works/ramtanu-lahiri-o-tatkalin-bangosamaj-sivanath-sastri/ ### Summary This chapter — Chapter V of Sivanath Sastri's 1904 Bengali biography of Ramtanu Lahiri — is an English translation covering the period 1825–1833, described as a 'watershed between the old and the new' in Bengal's social history. Sastri frames this era as one of paradigm shift: the East India Company's consolidation of revenue-extraction power, the catastrophic famine of 1176 Bengali Era (1769–70) and the Company's callous indifference, and the gradual replacement of Indian officials with Europeans up to 1833, are laid out as the political backdrop against which the social and intellectual upheaval takes place. The chapter's argumentative centre is the collision between orthodoxy and liberal-reformist energies. Sastri traces three overlapping currents: Ram Mohan Roy's campaign against suttee and his founding of the Brahmo Samaj (1828), the electrifying influence of Henry Louis Vivian Derozio as a teacher at Hindu College (1828–1831) and the 'Young Bengal' movement he inspired, and Lord William Bentinck's abolition of suttee by regulation on 4 December 1829.… ### Body ## Summary This chapter — Chapter V of Sivanath Sastri's 1904 Bengali biography of Ramtanu Lahiri — is an English translation covering the period 1825–1833, described as a 'watershed between the old and the new' in Bengal's social history. Sastri frames this era as one of paradigm shift: the East India Company's consolidation of revenue-extraction power, the catastrophic famine of 1176 Bengali Era (1769–70) and the Company's callous indifference, and the gradual replacement of Indian officials with Europeans up to 1833, are laid out as the political backdrop against which the social and intellectual upheaval takes place. The chapter's argumentative centre is the collision between orthodoxy and liberal-reformist energies. Sastri traces three overlapping currents: Ram Mohan Roy's campaign against suttee and his founding of the Brahmo Samaj (1828), the electrifying influence of Henry Louis Vivian Derozio as a teacher at Hindu College (1828–1831) and the 'Young Bengal' movement he inspired, and Lord William Bentinck's abolition of suttee by regulation on 4 December 1829. Ramtanu Lahiri himself is named as a member of Derozio's circle and a listener at the Academic Association meetings; he graduated from Hindu College in 1833. The chapter ends with the Charter Act of 1833, specifically Section 87, which barred the East India Company from disqualifying native subjects from holding public office on grounds of religion, birth, descent, or colour — presented by Sastri as a direct fruit of Rammohan Roy's advocacy in Britain and as the moment that opened government careers to English-educated Indians. Throughout, Sastri interweaves biography with social history, showing the personal networks, debates, and scandals that drove the Bengal Renaissance forward. ## Key points - Sastri frames 1825–1845 as Bengal's 'period of rebirth', when colonial consolidation and Enlightenment ideas produced an unprecedented social upheaval. - The Company's extraction-first mentality is indicted through Warren Hastings's 1772 revenue letters and famine data showing collection continued — and even increased — through the catastrophic 1770 famine. - Raja Ram Mohan Roy is presented as the catalytic figure who first turned Bengali educated minds westward while selectively retaining Hinduism's best, founding the Brahmo Samaj in 1828 and spearheading the anti-suttee movement. - Derozio's three-year tenure at Hindu College (1828–1831) is narrated in detail: his Academic Association, the radicalism of his students ('Young Bengal'), the scandal and social war it provoked, and his eventual sacking and death from cholera in December 1831. - Ramtanu Lahiri is identified as an auditor at Academic Association meetings alongside future luminaries such as Rasikkrishna Mallik and Dakshinaranjan Mukhopadhyay. - Lord Bentinck's suttee abolition regulation of 4 December 1829 is quoted verbatim, and Alexander Duff's educational mission is introduced as a further vector of liberal-Christian influence. - The chapter closes with the Charter Act of 1833 (Section 87), opening Company civil posts to Indians regardless of religion, birth, or colour — secured through Rammohan Roy's lobbying in England, and framed as a turning-point for Ramtanu Lahiri's generation. --- ## [Primary work] Recent Changes in the Tax Structure URL: https://indianliberals.in/primary-works/recent-changes-in-tax-structure-feb7-1958/ ### Summary N. A. Palkhivala's pamphlet, based on a talk delivered under the auspices of the Forum of Free Enterprise in Bombay on December 2, 1957, treats 1957 as a watershed in Indian fiscal history. He argues that, almost unnoticed, the country has passed through a revolution in its taxation laws, and organises his critique under three heads: the introduction of new taxes, the complication of existing ones, and the growing use of taxation as an instrument of executive control over private life. The first part dissects the new Wealth-tax, Expenditure-tax and Capital Gains tax. Palkhivala attacks the Wealth-tax Act, 1957 for resting on the subjective opinion of the Wealth-tax Officer (Sections 2(m), 3 and 7), for amounting to virtual expropriation by swallowing income, and for irrationally taxing companies — a measure even Prof. Kaldor, who conceived the combined levy, opposed. He pillories the Expenditure-tax as a fourth bite at the same cake and a futile attempt to discourage ostentation, citing William Pitt's Napoleonic-war income-tax as proof that 'temporary' taxes never die.… ### Body # Recent Changes in the Tax Structure *By N. A. Palkhivala* ## Summary N. A. Palkhivala's pamphlet, based on a talk delivered under the auspices of the Forum of Free Enterprise in Bombay on December 2, 1957, treats 1957 as a watershed in Indian fiscal history. He argues that, almost unnoticed, the country has passed through a revolution in its taxation laws, and organises his critique under three heads: the introduction of new taxes, the complication of existing ones, and the growing use of taxation as an instrument of executive control over private life. The first part dissects the new Wealth-tax, Expenditure-tax and Capital Gains tax. Palkhivala attacks the Wealth-tax Act, 1957 for resting on the subjective opinion of the Wealth-tax Officer (Sections 2(m), 3 and 7), for amounting to virtual expropriation by swallowing income, and for irrationally taxing companies — a measure even Prof. Kaldor, who conceived the combined levy, opposed. He pillories the Expenditure-tax as a fourth bite at the same cake and a futile attempt to discourage ostentation, citing William Pitt's Napoleonic-war income-tax as proof that 'temporary' taxes never die. The Capital Gains tax is judged inopportune in a capital-hungry economy. The second section catalogues complications such as the Current Profits Deposit Rules and amendments to Section 23-A of the Income-tax Act, which leave 'approved purposes' to executive discretion and produce capricious differential super-tax on dividends. The third and most polemical section turns from finance to freedom: tax legislation is becoming the leading edge of a wider regimentation in which executive officers, untrained in judicial reasoning, are vested with the widest powers, redress in court is being narrowed, and Chapter 3 of the Constitution risks becoming a dead letter. Palkhivala closes by warning that doubling the national income through the Five-Year Plan will be a poor bargain if civil liberty and individual freedom are halved in the process — the people would have sold their priceless heritage for a mess of pottage. ## Key points - Frames 1957 as the most consequential year for Indian taxation, comparable in significance to 1757 and 1857 in earlier Indian history. - Organises the critique under three heads: new taxes, complicated existing taxes, and executive control over private life through tax law. - Attacks the Wealth-tax Act, 1957 for relying on the subjective opinion of the Wealth-tax Officer and for irrationally double-taxing companies, contrary even to Prof. Kaldor's original design. - Reads the Expenditure-tax as a fourth duplicative levy on already-taxed income, futile as a check on ostentation and likely to be permanent — citing William Pitt's 'temporary' Napoleonic income-tax as precedent. - Argues the Capital Gains tax is inopportune in a capital-starved economy that needs investment in industry. - Identifies Section 23-A amendments and the Current Profits Deposit Rules as instances of legislation that hands businesses' commercial judgement to executive discretion under vague 'approved purposes' standards. - Warns that 'opinion of the Government' clauses oust judicial review, citing the Bombay Land Requisition Act as a more drastic instrument than any English wartime measure. - Concludes that civil liberty and individual freedom can die in a democracy as surely as under totalitarianism — leaving only the 'husk of democracy' if the Five-Year Plan doubles income while halving freedom. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] RECESSION IN INDIAN ECONOMY URL: https://indianliberals.in/primary-works/recession-in-indian-economy-dr-r-ccooper-august-10-1967/ ### Summary Dr. R. C. Cooper — then President of the Indian Merchants' Chamber and a past-President of the Institute of Chartered Accountants of India — delivers this booklet as a diagnosis of the industrial recession that had visibly settled over India by mid-1967. He sketches the slide in the index of industrial production from 200 in December 1966 to 186 by April, links it to a collapse in purchasing power produced by two consecutive drought years and persistent inflation, and warns that 'a crisis of vast magnitude is threatening to take over the economy'. His central analytic move is to deny that recession is a discrete short-term problem soluble by ad hoc stimulus: it is, he argues, a symptom of the deeper inflationary malaise produced by chronic over-licensing, an over-built heavy-industry programme, ruinously high indirect taxation, and the Reserve Bank's progressive credit tightening. Cooper's policy prescription is recognisably classical-liberal in its sympathies, though phrased as practical reform rather than ideology.… ### Body # RECESSION IN INDIAN ECONOMY *By DR. R. C. COOPER* ## Summary Dr. R. C. Cooper — then President of the Indian Merchants' Chamber and a past-President of the Institute of Chartered Accountants of India — delivers this booklet as a diagnosis of the industrial recession that had visibly settled over India by mid-1967. He sketches the slide in the index of industrial production from 200 in December 1966 to 186 by April, links it to a collapse in purchasing power produced by two consecutive drought years and persistent inflation, and warns that 'a crisis of vast magnitude is threatening to take over the economy'. His central analytic move is to deny that recession is a discrete short-term problem soluble by ad hoc stimulus: it is, he argues, a symptom of the deeper inflationary malaise produced by chronic over-licensing, an over-built heavy-industry programme, ruinously high indirect taxation, and the Reserve Bank's progressive credit tightening. Cooper's policy prescription is recognisably classical-liberal in its sympathies, though phrased as practical reform rather than ideology. He criticises the Planning Commission's continued licensing of new capacity in already over-built industries, the Government's preference for Public Sector suppliers over the unutilised capacity of private units, and the build-up of non-plan, non-developmental expenditure, which he reports has risen from Rs. 953 crores in 1960-61 to Rs. 3,623 crores. He calls for selective reductions in excise duty and corporate taxation to revive demand, a meaningful pivot to export markets, and a hard look at the over-licensing of capacity. He notes the Union Minister of Works and Housing Mr. Jagannatha Rao's estimate that economies of 10 to 20 per cent in construction outlays alone could yield Rs. 600 to Rs. 1,200 crores in savings, and quotes the Union Minister for Steel Mr. Chenna Reddy on the neglect of production costs in the early development push. The closing pages widen the lens from cures-for-recession into a broader plea: 'shall we not learn by experience to free ourselves from dogmas and ideological considerations and fashion our policies on a realistic and pragmatic approach to problems of economic development?' Cooper urges a fresh look at the Government's whole approach to planning and import policy — a more genuine import-substitution drive, lower indirect taxes, attention to cost-consciousness, and reduced reliance on Government help and guidance. Issued by the Forum of Free Enterprise on 10 August 1967, the booklet sits squarely in the Forum's tradition of using practitioner authority to argue that recession is the bill arriving for two decades of dirigiste planning. ## Key points - Industrial production index fell from 200 in December 1966 to 186 in April 1967, after a sharp 1965-66 deceleration; the recession had been visible long before it was acknowledged. - Root cause is identified as the inflationary collapse of purchasing power after two drought years, compounded by Reserve Bank credit tightening that closed normal avenues of working-capital finance. - Cooper blames over-licensing by the Planning Commission for the surplus capacity now sitting idle in steel castings, railway wagons, heavy structurals, welding electrodes and machine tools. - Indirect taxation is singled out as the inbuilt cost-inflator: excise revenue rose from Rs. 67 crores in 1950-51 to Rs. 1,030 crores in 1966-67, and indirect levies make up nearly 30 to 40 per cent of an industrial product's price. - He attacks the Government's preference for Public Sector suppliers (citing planned steel-foundry expansion while private capacity lies idle) and the practice of denying private units a share of departmental purchase programmes. - Non-plan, non-development expenditure has grown from Rs. 953 crores in 1960-61 to Rs. 3,623 crores — he treats this as the engine of the inflation that has 'made the position still worse'. - Export promotion is offered as a long-term outlet, conditional on labour productivity, scientific management, quality, and fiscal/taxation reform — not as a short-term escape. - The booklet closes with a generalised plea for pragmatism over ideology and for a fundamental reconsideration of the Government's approach to planning and development. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] Recent Changes in Laws Affecting Business and Industry URL: https://indianliberals.in/primary-works/recent-changes-in-law-affecting-business-and-industry-december-1965/ ### Summary In the rendered pages, this 1965 Forum of Free Enterprise pocketbook collects talks from a Bombay symposium on how the rapid, repeated amendment of Indian commercial law was affecting business and industry. The front matter rendered here — a foreword by N. A. Palkhivala, an introduction by A. D. Shroff in his capacity as Forum President, and the contents page — frames the project as a complaint against legislative excess: laws so frequent, so complex, and so carelessly drafted that compliance has become near-impossible for laymen and exhausting for experts. The contents page rendered here lists six contributions covering income-tax computation (S. P. Mehta), mercantile law (Khorshed D. P. Madon), company law (H. B. Dhondy), foreign exchange (S. R. Vakil), sales tax (N. C. Mehta), and corporate taxes (S. V. Ghatalia). In the rendered pages, only S. P. Mehta's opening essay on the computation of business profits under the Income-tax Act is substantively visible, and even there the chunk stops one printed page short of its end.… ### Body # Recent Changes in Laws Affecting Business and Industry ## Summary In the rendered pages, this 1965 Forum of Free Enterprise pocketbook collects talks from a Bombay symposium on how the rapid, repeated amendment of Indian commercial law was affecting business and industry. The front matter rendered here — a foreword by N. A. Palkhivala, an introduction by A. D. Shroff in his capacity as Forum President, and the contents page — frames the project as a complaint against legislative excess: laws so frequent, so complex, and so carelessly drafted that compliance has become near-impossible for laymen and exhausting for experts. The contents page rendered here lists six contributions covering income-tax computation (S. P. Mehta), mercantile law (Khorshed D. P. Madon), company law (H. B. Dhondy), foreign exchange (S. R. Vakil), sales tax (N. C. Mehta), and corporate taxes (S. V. Ghatalia). In the rendered pages, only S. P. Mehta's opening essay on the computation of business profits under the Income-tax Act is substantively visible, and even there the chunk stops one printed page short of its end. The argumentative centre observable in the rendered pages is the rule-of-law claim — Shroff's insistence that good and simple laws are a precondition for economic functioning, and Palkhivala's catalogue of defects (uncertainty, complexity, injustice, careless drafting) — applied to the specific irritants the contributors knew best as practising advocates and chartered accountants. ## Essays ### Few aspects of computation of Business Profits under Income-tax Act *By S. P. Mehta* In the rendered pages, S. P. Mehta — described in the footnote as an eminent advocate specialising in income-tax law — walks through what he treats as a series of unfair or unsettled wrinkles in the computation of business profits under the Income-tax Act. He opens with a Holmesian aphorism on taxes as the price of civilisation, then catalogues the elastic statutory definition of "business" (citing the Supreme Court's Krishna Menon ruling that even a Vedanta philosopher's spontaneous receipts were taxable vocation income), the Income-Tax Officer's freedom to reject account books on flimsy grounds, the harsh treatment of pre-commencement expenses, the disallowance of remuneration to persons connected with controlling shareholders, and the rejection of foreign travel costs as capital expenditure. He extends the critique to royalty payments — citing Pingle's Industries and Abdul Kayoom, where the Supreme Court by 2-1 held royalty to be non-deductible capital expenditure — and to the broader question of whether the State should disallow payments simply because some incidental law was breached (Haji Aziz & Bros and Abdul Shakoor). The essay closes within the rendered chunk on the treatment of speculative-transaction losses and the misuse of losing companies under Section 79. Throughout, Mehta's stance is that the legislature and the tax authorities are tilted against the assessee, and that fair drafting and disciplined administrative practice would close most of the disputes. - Mehta opens with Justice Holmes's aphorism that taxes are the price of civilised society, then jokes that an Indian taxpayer is surrounded on all sides — income tax, expenditure tax, wealth tax, gift tax, estate duty. - The statutory definition of "business" is so wide (per the Supreme Court in Krishna Menon vs. Commissioner of Income-Tax, Madras) that even a Vedanta philosopher's voluntary receipts from a foreign disciple were taxed as vocation income. - The Income-Tax Officer's power to reject books of account on flimsy grounds, and to compare marginal units against the largest in a trade, produces systemic unfairness despite the constitutional guarantee of equality. - Pre-commencement expenses are routinely disallowed even though, if rolled into a third-party turnkey contract, the identical outlays would be capitalised — an arbitrary distinction Mehta urges authorities to abandon. - Remuneration paid to relatives or associates of company controllers is often disallowed under the wide power in the Act, even when the recipient would draw the same pay on merit elsewhere; Mehta argues the power should be confined to cases where company interests are actually overlooked. - Foreign travel by directors or partners to acquire know-how is wrongly treated as capital expenditure: improving an individual's knowledge is not the acquisition of a capital asset. - On royalty, the Supreme Court's majority in Pingle's Industries and Abdul Kayoom treated payments for stock-in-trade as non-deductible capital expenditure — a result Mehta finds at odds with commercial reality and one Parliament should overturn by amendment. - Mehta resists extending Haji Aziz & Bros and Abdul Shakoor: a bona fide payment should not be disallowed simply because the underlying arrangement contravenes some law, when even tainted income is itself taxable. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] REFLECTIONS ON THE CHANGING SCENARIO OF THE INDIAN STOCK MARKETS URL: https://indianliberals.in/primary-works/reflection-on-the-changing-scenario-of-the-indian-stock-marketst-m-r-mayya-december-21-1994/ ### Summary Delivered as the 1994 A. D. Shroff Memorial Lecture under the auspices of the A. D. Shroff Memorial Trust and printed as a booklet in 1995, M. R. Mayya's address surveys the transformation of the Indian stock market since the liberalisation impulse of November 1984 and especially since June 1991. Writing as the recently retired Executive Director of the Bombay Stock Exchange, Mayya frames the half-century preceding 1991 as a self-inflicted detour: a 'trauma of restrictions and constraints to growth' that the nation eventually realised was not the proper path for progress. Liberalisation, he argues, has produced a primary-market expansion of roughly 250 times since the seventies, taken Indian listed-company count past that of the United States, and lifted the investor base to over 40 million. Having celebrated the quantitative explosion, Mayya devotes the bulk of the rendered pages to the qualitative reforms still owed to investors.… ### Body # REFLECTIONS ON THE CHANGING SCENARIO OF THE INDIAN STOCK MARKETS *By M. R. MAYYA* ## Summary Delivered as the 1994 A. D. Shroff Memorial Lecture under the auspices of the A. D. Shroff Memorial Trust and printed as a booklet in 1995, M. R. Mayya's address surveys the transformation of the Indian stock market since the liberalisation impulse of November 1984 and especially since June 1991. Writing as the recently retired Executive Director of the Bombay Stock Exchange, Mayya frames the half-century preceding 1991 as a self-inflicted detour: a 'trauma of restrictions and constraints to growth' that the nation eventually realised was not the proper path for progress. Liberalisation, he argues, has produced a primary-market expansion of roughly 250 times since the seventies, taken Indian listed-company count past that of the United States, and lifted the investor base to over 40 million. Having celebrated the quantitative explosion, Mayya devotes the bulk of the rendered pages to the qualitative reforms still owed to investors. He calls for space currently occupied by public-sector tenants in stock-exchange buildings to be vacated on commercial terms; for accelerated computerisation, telecom and postal upgrades; for the absorption of sub-brokers into the regulated fold; for genuine corporatisation of broking firms (with one-time capital-gains relief to ease conversion); and for a clearer entry path for financial-institution members so that a 'level playing ground' is restored. On governance, he accepts the 50:50 elected-broker/non-broker board ratio but insists that the real prize is improved director quality, and proposes that the executive director of each exchange be appointed by a standing committee rather than left hostage to the political pulls of the governing board. The later pages take up SEBI's new regulatory edifice — the 1992 Act, the Stock Brokers, Merchant Bankers, Underwriters, Insider Trading and Mutual Fund regulations, and the repeal of the Capital Issues (Control) Act, 1947. Mayya credits SEBI's disclosure code, credit-rating mandate and 'Stockinvest' instrument while warning that free pricing has been misused by issuers and merchant bankers, and that the persistent 'grey market' for unlisted scrip — three decades old and counting — must either be declared illegal or formally regulated. He closes the rendered portion by criticising two recent policy moves as adverse to small investors: the September 1993 dilution of the minimum public offer from 60 per cent to 25 per cent of issued capital, and the raising of the minimum application size from 100 to 500 shares, proposing 40 per cent and 300 shares respectively as the more defensible figures. ## Key points - Mayya frames pre-1991 economic policy as a fifty-year 'trauma of restrictions and constraints' that the nation only belatedly recognised as misguided. - Primary-market raisings climbed from an average of Rs. 900 million annually in the seventies to Rs. 224.80 billion in 1993-94 — a 250x rise equal to 12.8 per cent of gross domestic savings. - India's roughly 7,500 listed companies in 1994 surpassed the United States' 7,250, while the investor population reached over 40 million, second only to the U.S.A. - Infrastructure remains the choke point: public-sector institutions occupy exchange space, computerisation has stalled 'partly to block transparency', and telecom/postal facilities lag. - Corporatisation of broking firms is necessary for perpetuity and professionalism; Mayya appeals for a one-time capital-gains exemption to unblock conversions. - Sub-brokers — a uniquely Indian class — must be brought into a regulated arbitration framework or phased out over a ten-year horizon. - The 50:50 broker/non-broker governing-board ratio is settled, but director quality matters more; executive directors should be appointed by an independent standing committee to insulate them from board pressure. - SEBI's post-1992 regulatory architecture has improved disclosures but free pricing is being misused, and the three-decade-old 'grey market' for unlisted scrip must either be banned or formally regulated. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] Recession in Indian Industry — Causes, Consequences & Prospects URL: https://indianliberals.in/primary-works/recession-in-indian-industry-causes-consequences-and-prospects-d-r-pendse-15-december-1975/ ### Summary D. R. Pendse, then Economic Adviser to a business house, reprints in this Forum of Free Enterprise booklet two Indian Express columns from late October and early November 1975 that together diagnose, weigh, and forecast the recession then engulfing Indian industry. The first essay, "Causes and Consequences," notes that the debate over whether recessionary tendencies exist is finally over: textiles, cars, steel, air-conditioners, consumer durables, basic engineering goods and even high-priority lines such as fertilisers and tractors are all in trouble. Pendse identifies five interlocking causes — inadequate consumer purchasing power, overlicensing that built capacity vastly out of step with demand (television sets licensed at over three lakh against output of 74,000; dry cells licensed at 1,521 million against 635 million produced), sharp price escalations following decontrols and tax hikes, the crackdown on black money that hit luxury-oriented and service industries, and imbalances in plan performance, especially the Fourth Plan's 49 per cent shortfall in power generation that starved downstream industries of demand. Pendse refuses to treat the recession as wholly malign.… ### Body # Recession in Indian Industry — Causes, Consequences & Prospects *By D. R. Pendse* ## Summary D. R. Pendse, then Economic Adviser to a business house, reprints in this Forum of Free Enterprise booklet two Indian Express columns from late October and early November 1975 that together diagnose, weigh, and forecast the recession then engulfing Indian industry. The first essay, "Causes and Consequences," notes that the debate over whether recessionary tendencies exist is finally over: textiles, cars, steel, air-conditioners, consumer durables, basic engineering goods and even high-priority lines such as fertilisers and tractors are all in trouble. Pendse identifies five interlocking causes — inadequate consumer purchasing power, overlicensing that built capacity vastly out of step with demand (television sets licensed at over three lakh against output of 74,000; dry cells licensed at 1,521 million against 635 million produced), sharp price escalations following decontrols and tax hikes, the crackdown on black money that hit luxury-oriented and service industries, and imbalances in plan performance, especially the Fourth Plan's 49 per cent shortfall in power generation that starved downstream industries of demand. Pendse refuses to treat the recession as wholly malign. He casts it as a "purgative" that weeds out inefficient firms, makes scarce inputs more manageable, and chokes the generation of black money — but he weighs against this the waste of idle capacity in a country still at or below the poverty line, the chilling of new entrepreneurs, and above all the employment set-back, which feeds back into shrinking purchasing power and deepens the slump. He concludes that the debit-versus-credit ledger is best left open rather than litigated. The second essay, "Is the Recession on the way out?", takes up four recurring puzzles: why demand has not picked up despite near-price-stability, whether excise relief would help, why corporate results for 1974 and 1974-75 look strong in a recession-hit economy, and when the recession will end. Pendse argues that price stability without rising incomes only freezes demand at depressed levels; that selective tax relief is justified only where a recent jack-up in duties caused the demand to taper; that good corporate profits often reflect efficient managements coping through exports, diversification and product-mix changes, plus the lag of balance-sheets, controlled output prices, and paper profits in a depreciated currency. On prospects he is cautiously hopeful: sustained net bank credit to Government (Rs. 997 crores between end-March and end-September 1975 against Rs. 588 crores the previous year), an additional Rs. 700–800 crores in rural hands from a good kharif crop without inflationary risk, and stepped-up but selective public-sector outlay on agriculture and energy should arrest the recession in several industries, though with widely varying time-lags. The booklet opens with an A. D. Shroff epigraph defending free enterprise as coeval with man, closes with a Eugene Black quotation urging acceptance of private enterprise "not as a necessary evil, but as an affirmative good," and bears the Forum's standard disclaimer that the views are the author's own. ## Key points - Pendse declares the verbal debate over the existence of recession effectively closed by late 1975 — textiles, cars, steel, air-conditioners, consumer durables, engineering goods and even high-priority lines like fertilisers and tractors are all affected, with power and mining equipment as rare exceptions. - Five causes are itemised: inadequate consumer purchasing power, overlicensing that gives capacity wildly in excess of demand, sharp price escalations after decontrols and tax hikes, the black-money crackdown that hit luxury and service industries, and imbalances in plan performance (notably the Fourth Plan's 49 per cent shortfall in power generation). - The booklet treats recession with two-handed honesty: a "purgative" that disciplines inefficient firms, eases scarcities, and shrinks black-money circulation, but at the cost of idle capacity, deterred entrepreneurs, and — most damaging — set-back to employment creation that feeds back into still weaker demand. - On price stability, Pendse insists that flat prices without rising incomes only freezes consumption patterns set during the inflation peak; genuine recovery requires either falling prices that release surplus purchasing power or rising money emoluments and employment. - On tax reliefs, he urges a selective approach: only where a recent jack-up in excise (e.g., the supplementary 1974 budget) demonstrably caused demand to taper does tax relief have strong counter-recessionary force; he warns against the drift from specific to ad valorem duties, which gives Government a vested interest in high prices. - Strong 1974 and 1974-75 corporate results are not, he argues, evidence against recession: vanishing black-market premia, shortened queues and stock accumulation are the first symptoms; balance-sheets lag, controlled prices mask declines, and "encouraging" profits are often paper profits in a depreciated currency. - Three macro-factors give cautious grounds for relief by the turn of 1975-76: a near-doubling of net bank credit to Government year-on-year, Rs. 700–800 crores of new rural purchasing power from a good kharif crop, and selective public-sector step-up in agriculture and energy, with a larger kharif and bigger foreign-assistance receipts dampening the inflation risk of higher outlay. - Throughout, Pendse positions the analysis within Forum of Free Enterprise's house frame — bracketed by the Shroff and Eugene Black epigraphs — while keeping his own diagnosis empirically detailed and policy-pragmatic rather than ideological. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] Reflections of Enlightened Young Minds URL: https://indianliberals.in/primary-works/reflections-of-enlightened-young-minds-kush-ganatra-april-3-2014/ ### Summary Reflections of Enlightened Young Minds collects the four prize-winning speeches from the 49th A.D. Shroff Memorial Inter-Collegiate Elocution Contest, held in Mumbai on 26 January 2014 and published by the Forum of Free Enterprise on 3 April 2014. In a foreword, Forum President Minoo R. Shroff frames the contests — the A.D. Shroff Inter-Collegiate, the Nani A. Palkhivala (for law students) and the M.R. Pai (for schools) — as part of the Forum's youth-empowerment work, citing Dale Carnegie on public speaking as the 'most potent tool' for career advancement, and reporting that more than 4,000 contests across 13 states have drawn 45,000 student speakers since 1965-66. The booklet is sponsored by the Shailesh Kapadia Memorial Trust, with a biographical tribute to the late chartered accountant Shailesh Kapadia (1949-1988). The four student speeches gather around three themes flagged on the cover: safety of women, white collar crimes, and civil society and good governance. Kush Ganatra (N. M. College of Commerce & Economics) and Dr. Sabeena Gonsalves (K.C.… ### Body # Reflections of Enlightened Young Minds *By Kush Ganatra, Varsha Srinivasan, Vasudha Ramakrishna, Dr. Sabeena Gonsalves* ## Summary Reflections of Enlightened Young Minds collects the four prize-winning speeches from the 49th A.D. Shroff Memorial Inter-Collegiate Elocution Contest, held in Mumbai on 26 January 2014 and published by the Forum of Free Enterprise on 3 April 2014. In a foreword, Forum President Minoo R. Shroff frames the contests — the A.D. Shroff Inter-Collegiate, the Nani A. Palkhivala (for law students) and the M.R. Pai (for schools) — as part of the Forum's youth-empowerment work, citing Dale Carnegie on public speaking as the 'most potent tool' for career advancement, and reporting that more than 4,000 contests across 13 states have drawn 45,000 student speakers since 1965-66. The booklet is sponsored by the Shailesh Kapadia Memorial Trust, with a biographical tribute to the late chartered accountant Shailesh Kapadia (1949-1988). The four student speeches gather around three themes flagged on the cover: safety of women, white collar crimes, and civil society and good governance. Kush Ganatra (N. M. College of Commerce & Economics) and Dr. Sabeena Gonsalves (K.C. Law College) both speak on 'Role of Civil Society in Ensuring Safety of Women', taking the post-Nirbhaya conversation as their starting point and arguing that legal reform alone cannot fix entrenched cultural and psychological patterns. Varsha Srinivasan (R. A. Podar College) treats white collar crime as a quiet but compounding threat to economic stability, citing Enron, Lehman Brothers, the 2G scam, Kalmadi and Lalu as Indian and global instances. Vasudha Ramakrishna (Ramnarain Ruia College) traces governance from the Greek root kubernesis to argue that India's bottleneck is not policy design but implementation, gesturing at stalled power capacity and Mumbai infrastructure projects. The closing matter carries an aphorism from Eugene Black, former World Bank President, on private enterprise as 'an affirmative good,' and a short note on the Forum's mission and membership. ## Essays ### Role of Civil Society in Ensuring Safety of Women *By Kush Ganatra* Kush Ganatra opens with a deliberate disclaimer — he is male, and welcomes the audience to discount what follows — before arguing that India's response to violence against women is reactionary, episodic and shaped largely by candlelight marches and social-media outrage. He cites a G20 survey ranking India as the worst country for women, ahead of Saudi Arabia, and a National Crime Bureau figure that fewer than 30 per cent of reported rapes in 2010 resulted in conviction. From these, he draws a structural point: legislation cannot work unless conviction follows, and conviction cannot follow unless cultural attitudes — including the 'ghar ka mamla' habit of treating domestic violence as private — change first. The speech turns from outrage to indifference. Ganatra rejects the catchall slogan 'we need to teach men and children to respect women,' arguing instead that masculinity itself must be uncoupled from dominance, and that the truly damning fact of the Delhi case was not the act but the bystanders who walked past a bleeding girl for two hours. The closing line — 'Rape is awful. Indifference is infinitely worse' — sets the rhetorical centre of the chunk: a civil society for women begins with ordinary people willing to stop, act, and dismantle the sexist mindsets that legal reform cannot reach. - Argues India's response to gendered violence is reactionary rather than pre-emptive, dominated by hashtag activism that does not change behaviour. - Cites a G20 survey placing India as the worst country for women — ahead of Saudi Arabia — as evidence of structural rather than incidental failure. - Notes National Crime Bureau data: fewer than 30 per cent of reported rapes in 2010 resulted in conviction, undercutting calls for harsher punishment without prior reform of enforcement. - Diagnoses the cultural problem as a 'ghar ka mamla hai' habit that treats domestic violence as private, and a society more horrified by rape jokes than rapists. - Closes on indifference rather than misogyny as the deeper crisis, citing bystanders who left the Delhi victim bleeding on the street for two hours. ### White Collar Crimes and their Economic Implications *By Varsha Srinivasan* Varsha Srinivasan opens with a parable — a 200-rupee contribution sold back for 300 — to define white collar crime as manipulation dressed in legitimacy: 'Lying, cheating, stealing… except that it is a 100 rupees here but it is a 100 billion there.' She marshals Enron (December 2001), Lehman Brothers, the WorldCom scam (33,000 jobs lost in a single day) and a UN Millennium Project estimate of an annual half-trillion dollar revenue loss to argue that fraud against firms is, in scale and consequence, a macroeconomic event rather than a private misdeed. The speech then maps how the harm propagates. White-collar crime erodes investor confidence, raises the cost of doing business, concentrates purchasing power in a few hands and — by injecting unaccounted money into circulation — drives the textbook definition of inflation. Srinivasan cites a 2011 spike in the Indian crime branch's white-collar arrests (148 versus 71 the year prior, a 108 per cent jump) and lists 25 fraud sub-categories from credit-card fraud to insider trading. The closing image — the well-mannered neighbour looting a 600-billion-dollar company while ordinary citizens pay sixty rupees for onions — is offered as the everyday face of the problem. - Defines white-collar crime through a parable of compounding theft, framing it as manipulation at scale rather than petty dishonesty. - Anchors macroeconomic stakes in Enron (Dec 2001), Lehman Brothers and the WorldCom scam (33,000 jobs lost in a single day). - Cites a UN Millennium Project estimate of US$500 trillion in annual revenue loss attributed to white collar crimes (likely a transcription error for billion). - Reports a 108 per cent year-on-year rise in Indian white-collar arrests in 2011 (148 vs 71) across 25 fraud sub-categories — bank fraud, computer fraud, insider trading, blackmail. - Closes by linking unaccounted-money inflows to retail inflation, with the rising price of onions and tomatoes as the citizen-level signal of white collar harm. ### Good Governance is the need of the hour *By Vasudha Ramakrishna* Vasudha Ramakrishna opens by tracing 'governance' to its Greek root kubernesis — the act of piloting a ship — and defines good governance against five tests: multi-party participation, accountability, equitability, efficiency and rule of law. She then turns to India's diagnosis: it is not the absence of policy that is the problem but the absence of execution. Decisions and judgments stall under political contestation, leaving 'policy and action paralysis' in their wake. The argument is grounded in two concrete instances. In the power sector, a 12,000 MW deficit against a 1,35,453 MW requirement in the previous fiscal year is attributed to stalled coal and fuel clearances rather than capacity shortfalls. In Mumbai, the Trans-harbour link, airport and metro projects are described as victims of inordinate policy delay, with the city 'sinking into a morass.' She closes on a quip about a divinely engineered horse turned into a donkey by an over-committeed government, calling for India to stop stifling the horse of governance with grooming processes and 'set the horse free.' - Etymologises 'governance' from Greek kubernesis (act of piloting a ship), framing the concept around direction and protection. - Defines good governance by five tests: multi-party participation, accountability, equitability, efficiency, and observance of the rule of law. - Diagnoses India's problem as policy and action paralysis from contested decisions, not absence of policy design. - Concrete case 1: a 12,000 MW power deficit against a 1,35,453 MW requirement, blamed on stalled coal and fuel clearances. - Concrete case 2: Mumbai's Trans-harbour link, airport and metro projects stalled, with the city 'overwhelmed by the influx of humanity'. - Closes with a barbed parable that an over-committeed government turned a sturdy horse into a donkey, calling for less grooming and more action. ### Role of Civil Society in Ensuring Safety of Women *By Dr. Sabeena Gonsalves* Dr. Sabeena Gonsalves' speech — sharing its title with Kush Ganatra's — opens by cataloguing the range of crimes against women (foeticide, domestic violence, acid attacks, gang rape, trafficking, voyeurism, stalking, dowry deaths) and asks whether male perpetrators alone can be blamed, or whether other factors — upbringing, peer group, patriarchal code, the 'greed struck mother-in-law' or 'viscous step mother' — also produce the violence. She cites the National Crime Records Bureau's 2012 figure of 2,44,270 reported crimes against women in India (16,353 in Maharashtra), noting that this is roughly 20 per cent of actual incidence because of social stigma and family pressure to keep silent. From there she presses on the meaning of 'civil society,' rejecting equations with literate-strength, the urban environment or middle-class lifestyle. The constituents she names are unbiased upbringing, sensitivity, freedom of speech, the right to life and liberty, an independent and prompt judiciary, a non-corrupt law-enforcement agency and educational (not merely literacy-based) awareness. Her central claim: 'Gender/ Sex does not lie between the legs, it lies between the ears — that is, within the MIND of a person.' She closes with a warning that if civil society fails, women will eventually take the law into their own hands — 'Hell hath no fury like a woman scorned' — and a half-serious image of a future contest on the 'safety of MEN.' - Catalogues the breadth of crimes against women — foeticide, acid attacks, brutal gang rapes, trafficking, dowry deaths — refusing a single-cause explanation. - Cites NCRB 2012: 2,44,270 reported crimes against women in India, 16,353 in Maharashtra — estimates these are ~20% of actual incidence due to stigma and ostracism. - Names women themselves (mothers-in-law, step mothers, madams of brothels) among the agents of harm to women, not only men. - Rejects equating 'civil society' with literacy, urbanity or middle-class lifestyle — proposing instead values, judiciary, law enforcement and educational awareness. - Distinguishes literacy from education, arguing an illiterate person can be educated enough to grasp consequences of their actions. - Closes with the aphorism that gender lies in the mind, and warns of vigilante retaliation — 'Hell hath no fury like a woman scorned' — if civil society fails. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] REFLECTIONS ON FOREIGN AID URL: https://indianliberals.in/primary-works/reflections-on-foreign-aid-prof-p-tbauer-july-10-1970/ ### Summary Prof. P. T. Bauer's lecture, delivered at the Forum of Free Enterprise in Bombay on 3 February 1970 and published as a Forum booklet in July 1970, mounts a frontal attack on the prevailing development-economics consensus that inter-governmental grants and subsidised loans are indispensable for the progress of poor countries. Bauer treats this consensus as an unexamined axiom and dismantles it on empirical and analytical grounds: all developed countries themselves rose out of poverty without foreign aid, many under-developed countries advanced rapidly between 1880 and 1960 without external transfers, and India, after fifteen years of large-scale aid, ended the 1960s more dependent on foreign food and foreign exchange than before. If a population is not interested in material advance — Bauer uses the Navajo case alongside other examples — neither aid nor anything else can produce development. Most of the booklet inventories the active harms Bauer attributes to aid.… ### Body # REFLECTIONS ON FOREIGN AID *By Prof. P. T. Bauer* ## Summary Prof. P. T. Bauer's lecture, delivered at the Forum of Free Enterprise in Bombay on 3 February 1970 and published as a Forum booklet in July 1970, mounts a frontal attack on the prevailing development-economics consensus that inter-governmental grants and subsidised loans are indispensable for the progress of poor countries. Bauer treats this consensus as an unexamined axiom and dismantles it on empirical and analytical grounds: all developed countries themselves rose out of poverty without foreign aid, many under-developed countries advanced rapidly between 1880 and 1960 without external transfers, and India, after fifteen years of large-scale aid, ended the 1960s more dependent on foreign food and foreign exchange than before. If a population is not interested in material advance — Bauer uses the Navajo case alongside other examples — neither aid nor anything else can produce development. Most of the booklet inventories the active harms Bauer attributes to aid. Aid augments the resources of recipient governments and so 'increases the weight of the Government in the society and economy and thereby promotes a concentration of power'; it biases development toward inappropriate Western prototypes (universities, civil-service forms, large-scale state industry); it underwrites comprehensive central planning that retards rather than promotes adjustment; it discourages domestic savings and chokes off private capital, which is usually more productive than subsidised public capital; and through 'sheltered markets' it operates as a covert transfer from Western taxpayers to Western exporters rather than to the world's poor. Bauer then takes apart the four standard justifications for aid. The argument from need leads to absurdity, since by that logic the most productive groups (Asians in East Africa, Indians in Burma) should be expelled to qualify their countries for further aid. The argument from moral duty fails because charity compulsorily extracted by the tax collector — 'If I do not pay the income-tax, I go to jail' — is not a moral act at all. The Cold-War argument that aid keeps poor countries out of the Communist bloc collapses on inspection: aid actually promotes centralised, closely controlled economies congenial to Communist sympathies, and the indiscriminate transfer of taxpayers' money breeds suspicion rather than gratitude. And the restitution argument — that Western wealth was extracted from the under-developed world — fails the historical test, as illustrated by the Tashkent Conference of 1966, when Pakistan and India turned to the Soviet Premier rather than the United States despite a decade of substantial American aid. Bauer closes by acknowledging that his views are unpopular but insisting that the validity of an argument has nothing to do with its political popularity. ## Key points - Foreign aid is the orthodoxy that Bauer treats as an unexamined axiom of contemporary development literature; his lecture exists to argue that the axiom is wrong. - Aid is neither necessary nor sufficient for development: developed countries grew without it, many poor countries grew rapidly without it, and India's fifteen years of large-scale aid since the mid-1950s left it more dependent, not less. - Aid concentrates economic and political power in the recipient government, biases policy toward Western institutional prototypes, and underwrites comprehensive central planning that itself retards adjustment. - Aid discourages domestic savings and private capital inflow; private capital, even when more expensive, is usually more productive than subsidised public capital, and Indian Railways and Calcutta Tramways are cited as historical counter-examples of infra-structure built by private investment. - Much aid is in practice a subsidy from Western taxpayers to Western exporters via sheltered markets, not a transfer to the world's poor. - The need-based case for aid leads to absurd implications, since the most productive groups (Asians in East Africa, Indians in Burma) earn above-average incomes and would have to be expelled to lower national averages and qualify for more aid. - Aid as a moral duty fails because tax-financed aid is compulsory, not voluntary, and so lacks the moral character of private charity; aid as Cold-War political strategy is counter-productive because it strengthens the centralised state and breeds suspicion of Western motives. - The restitution argument that Western prosperity was extracted from the under-developed world is rejected empirically; the Tashkent mediation of 1966 illustrates that aid does not even buy diplomatic alignment. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] Reflections on Global Trends and Sustainable Development URL: https://indianliberals.in/primary-works/reflections-on-global-trends-and-sustainable-development-by-piya-mahatey-2005/ ### Summary Piya Mahtaney opens this Forum of Free Enterprise booklet by characterising current global trends as "chaotic, contradictory, perplexing and disappointing" and asks whether the avowed objective of sustainable development can be achieved within a decade or two. Her central move is to refuse both purist positions on offer: she rejects the simplistic equation of higher inequality with higher growth, and she equally rejects the assumption that privatisation and deregulation will, on their own, deliver equity. Empirical evidence linking growth to poverty reduction, she notes, is mixed; redistributive tools have disincentive effects; and growth gains eroded by skewed income distribution are no real gains at all. The middle of the essay marshals the Eastern bloc and former Soviet Union experience as evidence against market-fundamentalist optimism. For the period 1990–99 the GDP index for 25 transition countries and the FSU stood at 65 per cent and 54 per cent of pre-transition output respectively; Mahtaney attributes this contraction to weak states, the lack of well-defined central–local relations, an underdeveloped civil society, and the absence of accountability mechanisms.… ### Body # Reflections on Global Trends and Sustainable Development *By Piya Mahtaney* ## Summary Piya Mahtaney opens this Forum of Free Enterprise booklet by characterising current global trends as "chaotic, contradictory, perplexing and disappointing" and asks whether the avowed objective of sustainable development can be achieved within a decade or two. Her central move is to refuse both purist positions on offer: she rejects the simplistic equation of higher inequality with higher growth, and she equally rejects the assumption that privatisation and deregulation will, on their own, deliver equity. Empirical evidence linking growth to poverty reduction, she notes, is mixed; redistributive tools have disincentive effects; and growth gains eroded by skewed income distribution are no real gains at all. The middle of the essay marshals the Eastern bloc and former Soviet Union experience as evidence against market-fundamentalist optimism. For the period 1990–99 the GDP index for 25 transition countries and the FSU stood at 65 per cent and 54 per cent of pre-transition output respectively; Mahtaney attributes this contraction to weak states, the lack of well-defined central–local relations, an underdeveloped civil society, and the absence of accountability mechanisms. She concludes that a market reinstatement uncoupled from institution-building produces "either anarchy or stagnancy," and that a capitalist orientation was made attractive partly by the failures of socialist institutional design rather than by intrinsic market virtue. The second half turns to structural adjustment and cost–benefit analysis (CBA). Mahtaney argues that adjustments are routinely captured by vested interests, that the real divide between developed and underdeveloped worlds is the bargaining power of the lower-income majority, and that CBA — the neoclassical workhorse for project appraisal — systematically discounts social, cultural and anthropological costs by reducing them to monetary equivalents. The Sardar Sarovar Dam in Gujarat is offered as the showcase failure: the CBA framework trivialised the displacement of tribals and villagers (a resistance "headed by a prominent social worker, Medha Patkar"), and roughly ten million people are displaced annually by such infrastructure projects. Her solution is not to discard CBA but to make it more inclusive and demote it to one guideline among many. A closing table from the Human Development Report 2005 anchors the argument in regional poverty trends from 1981 to 2001. ## Key points - The empirical correlation between growth and poverty reduction is mixed, and the prevailing assumption that higher income inequality fuels higher growth was a simplistic policymaker conceit that ignored the disincentive effects of redistributive tools. - Privatisation and deregulation, taken as ends in themselves, do not automatically reform institutions; even granting their effect on efficiency and competitiveness, they do not necessarily reduce poverty or inequality. - The transition of formerly socialist economies failed to deliver the expected growth surge — for 1990–99 the GDP index stood at 65% of pre-transition output for the 25 transition countries and 54% for the FSU. - Institutional weaknesses (poor enforcement of law, captured tax collection, lobby pressure, weak central–local relations, underdeveloped civil society) are the binding constraint on transition success, not the formal market/state choice. - Structural adjustment programmes have produced rising unemployment, poverty and cuts to social expenditure, and are routinely manipulated by vested-interest groups to maximise their share of the gains. - Development should be understood as eradicating dehumanising deprivation and securing tolerable levels of inequity rather than as a utopian quest for complete equity. - Cost–benefit analysis, exemplified by the Sardar Sarovar Dam case, monetises non-monetary impacts in ways that erase displacement, environmental loss and the trauma of dispossession — it must be widened in scope and used as one guideline among many, not the sole basis for decision. - Global poverty data (Human Development Report 2005) show the share of people on under $1/day fell from 40.4% (1981) to 20.7% (2001) globally, but Sub-Saharan Africa rose from 41.6% to 46.4% and South Asia remained around 32%. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] Reform of Direct Taxes URL: https://indianliberals.in/primary-works/reform-of-direct-taxes-k-r-ramamani-january-12-1983/ ### Summary This Forum of Free Enterprise booklet reproduces the A. D. Shroff Memorial Lecture delivered by tax counsel K. R. Ramamani at the Forum's Madras centre on 17 November 1982. Ramamani opens by inverting Justice Holmes's famous fondness for taxes — given India's punishing rates and the decline of civilised life, he argues, Holmes would today stand alone. Reaching back to Mill's classic definition of a direct tax, he insists that the system's efficacy depends entirely on honest reporting, and that the chasm between that ideal and Indian realities is what makes reform urgent. The core of the lecture is an attack on Indian corporate taxation, where basic rates run between 45% and 65% (exclusive of surtax). Ramamani rebuts the claim — drawn from a sample of twenty public limited companies — that the effective rate is only around 40%, calling the figure fallacious: the divergence comes from straight-line versus written-down-value depreciation methods, initial depreciation, investment allowance, Section 80J relief and scientific-research write-offs, all of which favour large and expanding firms while leaving the average industrialist exposed.… ### Body # Reform of Direct Taxes *By K.R. Ramamani* ## Summary This Forum of Free Enterprise booklet reproduces the A. D. Shroff Memorial Lecture delivered by tax counsel K. R. Ramamani at the Forum's Madras centre on 17 November 1982. Ramamani opens by inverting Justice Holmes's famous fondness for taxes — given India's punishing rates and the decline of civilised life, he argues, Holmes would today stand alone. Reaching back to Mill's classic definition of a direct tax, he insists that the system's efficacy depends entirely on honest reporting, and that the chasm between that ideal and Indian realities is what makes reform urgent. The core of the lecture is an attack on Indian corporate taxation, where basic rates run between 45% and 65% (exclusive of surtax). Ramamani rebuts the claim — drawn from a sample of twenty public limited companies — that the effective rate is only around 40%, calling the figure fallacious: the divergence comes from straight-line versus written-down-value depreciation methods, initial depreciation, investment allowance, Section 80J relief and scientific-research write-offs, all of which favour large and expanding firms while leaving the average industrialist exposed. Many concessions in the statute book, he says, are illusory because Chapter VIA reliefs require a profit that new units rarely earn, and the tax treatment of convertible debentures effectively double-taxes equity capital. Ramamani widens the lens by citing a 1976 UN Inter-Regional Seminar on Development Planning in Amsterdam, which warned that heavy taxation of productive sectors blunts incentive and breeds evasion, and that lower corporate taxation is consistently associated with faster growth. He calls for tax provisions that encourage the splitting up of unwieldy companies (mirroring the existing relief for amalgamation), rate reductions for smaller companies, removal of disallowances on managerial remuneration and the Compulsory Deposit Scheme, and additional relief on capital gains for plant and machinery. Pointing to South Korea and Taiwan, he closes with a paraphrase of Francis Bacon: a people overlaid with tax will never be prosperous or honest. ## Key points - Frames Indian direct taxation as a moral and economic burden, inverting Justice Holmes's defence of taxes as the price of civilisation. - Anchors the argument in Mill's definition of a direct tax — a levy on the very person intended to pay — and stresses that the system depends wholly on voluntary honest reporting. - Disputes the claim that the effective corporate tax rate is around 40%, calling it fallacious and demonstrating how depreciation method, investment allowance and Section 80J relief skew the headline. - Argues that many statutory reliefs (notably Chapter VIA deductions) are illusory because they require profits that new industrial undertakings cannot generate in early years. - Identifies double taxation of equity capital via the treatment of interest on convertible debentures and dividend distribution as a structural disincentive to raising equity. - Cites a 1976 UN Inter-Regional Seminar at Amsterdam to argue that heavy taxes on productive sectors depress output, incentive and honesty, while lower corporate taxation correlates with faster growth. - Proposes seven reforms: relief for splitting large companies, rate cuts for smaller firms, restructuring to encourage equity investment, removal of disallowances on managerial and hospitality expenses, removal of the Chapter VIA profit pre-condition, capital-gains relief on selected plant and machinery, and abolition of the Compulsory Deposit Scheme. - Invokes South Korea and Taiwan as evidence that pragmatic taxation policy and rapid industrial growth are inversely correlated, closing with a paraphrase of Francis Bacon. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] Reforms for a Better Tax Governance in India URL: https://indianliberals.in/primary-works/reforms-for-better-tax-governance-in-india-s-mahalingam/ ### Summary This Forum of Free Enterprise booklet reproduces the lecture S. Mahalingam — former Chief Financial Officer and Executive Director of Tata Consultancy Services — delivered in Bangalore on 13 January 2016 under the auspices of the Nani A. Palkhivala Memorial Trust. The first part of the talk is a personal tribute to Palkhivala the jurist, post-budget orator, ambassador and TCS founder-chairman, framed through Mahalingam's own years of working alongside him. The second part pivots into a structural critique of the Indian tax governance system written from the unusual vantage point of a private-sector member of the Tax Administration Reform Commission (TARC) constituted in 2013 under Dr. Parthasarathi Shome. Mahalingam argues that India suffers not merely from bad tax laws but from a broken governance culture: revenue officers chase targets set and monitored by the Finance Minister himself, raise notional and "protective" demands they themselves consider far-fetched, refuse to accept any adverse appellate verdict on principle, and lack any service focus toward honest taxpayers.… ### Body # Reforms for a Better Tax Governance in India *By S. Mahalingam* ## Summary This Forum of Free Enterprise booklet reproduces the lecture S. Mahalingam — former Chief Financial Officer and Executive Director of Tata Consultancy Services — delivered in Bangalore on 13 January 2016 under the auspices of the Nani A. Palkhivala Memorial Trust. The first part of the talk is a personal tribute to Palkhivala the jurist, post-budget orator, ambassador and TCS founder-chairman, framed through Mahalingam's own years of working alongside him. The second part pivots into a structural critique of the Indian tax governance system written from the unusual vantage point of a private-sector member of the Tax Administration Reform Commission (TARC) constituted in 2013 under Dr. Parthasarathi Shome. Mahalingam argues that India suffers not merely from bad tax laws but from a broken governance culture: revenue officers chase targets set and monitored by the Finance Minister himself, raise notional and "protective" demands they themselves consider far-fetched, refuse to accept any adverse appellate verdict on principle, and lack any service focus toward honest taxpayers. He labels the cumulative effect "tax terrorism" and traces it through the Vodafone-era retrospective amendments, the moral-hazard ecosystem inside the Revenue Department, and the antiquated accounting incentive to withhold refunds. In the rendered pages he then turns to remedies drawn from TARC's four reports (over 1,370 pages). On the disputes side he documents the massive pendency before Commissioner (Appeals), CESTAT, Appellate Tribunal, High Courts and the Supreme Court for both direct and indirect taxes, and surveys existing alternative-dispute mechanisms — the Authority for Advance Rulings, the Settlement Commission, Advance Pricing Agreements, and the 2009 Dispute Resolution Panel — concluding that the Department "had no will" to use them to either prevent or speed up resolution. He then introduces a trust-based compliance framework that classifies taxpayers into four behavioural segments — Compliant, Triers, Fence Sitters and Offenders — each meriting a different mix of self-compliance, guidance, monitoring and prosecution. The chunk ends mid-way through a section on Dispute Management that examines the under-use of Boards' clarification powers under Section 119 of the Income Tax Act, Section 37B of the Central Excise Act and Section 151A of the Customs Act, with a worked example of CBEC's flip-flop on Karnataka Soaps and Detergents. ## Key points - The booklet is the text of Mahalingam's 13 January 2016 Bangalore lecture for the Nani A. Palkhivala Memorial Trust, published by the Forum of Free Enterprise and sponsored by the Shailesh Kapadia Memorial Trust, with an introduction by editor Sunil S. Bhandare. - The opening section is a personal-memoir tribute to Nani Palkhivala — his discovery by A. D. Shroff and M. R. Pai at a 1957 Forum event, his post-budget speeches that filled Brabourne Stadium until 1994, his Kesavananda Bharati argument over 31 days, his ambassadorship to the United States after the Emergency, and his role founding Tata Consultancy Services in 1968 alongside F. C. Kohli. - Mahalingam's framing thesis: India's problem is not tax rates but a tax governance system that produces "tax terrorism" through target-driven assessments, retrospective demands of the Vodafone type, "protective demands" cascaded across companies, and an officer culture that never accepts an adverse verdict short of the Supreme Court. - The Revenue Department is charged with having no service focus, treating taxpayers and even its own officers shabbily, and exploiting an antiquated accounting system to delay refunds in order to manage the fiscal deficit optically. - Mahalingam draws on his membership of the 2013 Tax Administration Reform Commission (TARC) chaired by Dr. Parthasarathi Shome, whose four reports across 18 months covered over 1,370 pages and whose private-sector members included Mr. Diwakar (formerly head of taxation at the Murugappa Group) and the author himself. - He marshals concrete pendency data from CBDT and CBEC for 2012-13 — including 199,390 cases before Commissioner (Appeals), 31,015 at the Appellate Tribunal, 31,230 at the High Courts and 5,808 at the Supreme Court on the direct-tax side — to show that existing alternative-dispute mechanisms (AAR, Settlement Commission, APA, the 2009 Dispute Resolution Panel) are under-used because the Department has no will to use them. - He proposes a trust-based compliance management framework segmenting taxpayers into Compliant, Triers, Fence Sitters and Offenders, with differentiated treatment — self-compliance for the first, help and guidance for triers, balanced persuasion-plus-enforcement for fence sitters, and the full penal armoury including prosecution reserved for habitual offenders. - The Dispute Management section, where the chunk cuts off, faults the two Boards for under-using their statutory clarification powers (Section 119 IT Act, Section 37B Central Excise, Section 151A Customs) and field officers for ignoring clarifications even when issued — illustrated by CBEC's 1999 clarification on agarbatti odoriferous compounds that the Department itself reversed in November 2005 against Karnataka Soaps and Detergents. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] REFORMS NEEDED IN INDIAN INCOME-TAX LAW URL: https://indianliberals.in/primary-works/reforms-needed-in-indian-income-tax-v-r-dalal-feb10-1966/ ### Summary V. R. Dalal, a chartered accountant writing for the Forum of Free Enterprise in February 1966, audits the Income-tax Act, 1961 — the statute that replaced the 1922 Act after four decades — against the classical canons of taxation: simplicity, certainty, and reference to ability to pay. The opening pages set the polemical frame. In a developing economy, Dalal argues, tax laws must do more than raise revenue: they must encourage business, narrow inequality, and avoid the trap of redistributing scarcity. The booklet then works through five heads — language, tax calculation, procedure, administration, and piecemeal amendments — showing that the new Act fails each test. The 1922 Act's 67 sections have ballooned to 297 in 1961, and the drafting has grown more (not less) ambiguous: ill-defined provisions on "Not Ordinarily Resident" status, on development-rebate reserves, on capital-gains treatment of bonus shares, and on the carry-forward of losses force constant judicial intervention. The middle pages catalogue the cumulative drift of the Act away from the principle of taxing real income.… ### Body # REFORMS NEEDED IN INDIAN INCOME-TAX LAW *By V. R. DALAL* ## Summary V. R. Dalal, a chartered accountant writing for the Forum of Free Enterprise in February 1966, audits the Income-tax Act, 1961 — the statute that replaced the 1922 Act after four decades — against the classical canons of taxation: simplicity, certainty, and reference to ability to pay. The opening pages set the polemical frame. In a developing economy, Dalal argues, tax laws must do more than raise revenue: they must encourage business, narrow inequality, and avoid the trap of redistributing scarcity. The booklet then works through five heads — language, tax calculation, procedure, administration, and piecemeal amendments — showing that the new Act fails each test. The 1922 Act's 67 sections have ballooned to 297 in 1961, and the drafting has grown more (not less) ambiguous: ill-defined provisions on "Not Ordinarily Resident" status, on development-rebate reserves, on capital-gains treatment of bonus shares, and on the carry-forward of losses force constant judicial intervention. The middle pages catalogue the cumulative drift of the Act away from the principle of taxing real income. Dalal documents how "deeming" fictions, disallowed bona-fide business expenditures, artificial computation rules under Section 37, separate-legal-entity tests under Section 79, and triple-shift depreciation anomalies all push the taxable figure away from what an ordinary accountant or businessman would recognise as income. The effect is high nominal rates compounded by an artificially inflated base — taxing what the law calls income, not what is in fact earned. The closing sections turn to administration and remedy. Dalal documents wide and largely uncheckable discretion vested in Income-tax Officers — over registration of firms (Section 185), accounting-year changes (Section 3(4)), stay of collection (Section 220), reopening of assessments under Sections 147–148, and rectification under Section 154 — and shows that even where Tribunals and Courts rule for the assessee, the Department routinely appeals or refuses to follow the spirit of the decisions. He endorses the Direct Taxes Administration Inquiry Committee's warning that wide discretion in the hands of officers, however high-minded, breeds high-handed and unreasonable administration and damages public confidence. The pamphlet ends with a plea for a tax code that is simple, unambiguous, tied to ability to pay, and sparing in fictions and discretion — a code that does not adopt "the policy of killing the goose which lays the golden egg." ## Key points - Frames the 1961 Income-tax Act against three canons — simple and clear, certain and unambiguous, equitable and bearable — and finds it deficient on all three. - Documents bloat: the 1922 Act's 67 sections grew to 297 in 1961, yet drafting became more (not less) ambiguous, with model examples drawn from Section 6(6)(a) on "Not Ordinarily Resident" status and Section 34(3)(a) on development rebate reserves. - Tracks how "deeming" fictions, disallowed bona-fide expenditures, and artificial computation rules push taxable income away from real income, violating the ability-to-pay canon. - Notes the multiplication of piecemeal amendments — including changes pushed through after the Finance Act, 1962 — that introduce ambiguity faster than courts can resolve it. - Criticises Section 37 (entertainment expenditure), Section 79 (shareholding-change losses), and the disallowance of depreciation on house property under Section 32 as departures from sound accountancy principles. - Catalogues unfettered administrative discretion under Sections 3(4), 147–148, 154, 185, 220, 271(1)(c), and others, where appeals against the Income-tax Officer's exercise of power offer the assessee little real protection. - Endorses the Direct Taxes Administration Inquiry Committee's caution that giving wide-ranging discretion to officials, even capable ones, breeds high-handed administration and erodes public confidence in tax fairness. - Calls for a code that is simple, unambiguous, tied to ability to pay, and that presumes the citizen honest — and reminds the state not to "kill the goose which lays the golden egg." --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] Regional Cooperation in South Asia URL: https://indianliberals.in/primary-works/regional-cooperation-in-south-asia-h-t-parekh-december-13-1981/ ### Summary Delivered as the A. D. Shroff Memorial Lecture in Bombay on 23 October 1981 and published by the Forum of Free Enterprise, H. T. Parekh's slim pamphlet argues that regional co-operation in South Asia is no longer a diplomatic ornament but "a matter of compulsion" for India and its neighbours. Parekh opens by paying tribute to Shroff as his guru and connecting Shroff's lifelong defence of economic freedom to the case he is about to make, then surveys India's standing thirty years after Independence — high in the world's military and industrial rankings, low in per-capita income, and curiously distant from the very Pakistanis, Bangladeshis, Sri Lankans and Nepalis with whom Indians share geography, culture and a common struggle against poverty. The core argument is that competitive military build-up is the catastrophe to be avoided and that India must take the first unilateral steps — generously, on the basis of strict equality with smaller neighbours — to prove its bona fides.… ### Body # Regional Cooperation in South Asia *By H. T. PAREKH* ## Summary Delivered as the A. D. Shroff Memorial Lecture in Bombay on 23 October 1981 and published by the Forum of Free Enterprise, H. T. Parekh's slim pamphlet argues that regional co-operation in South Asia is no longer a diplomatic ornament but "a matter of compulsion" for India and its neighbours. Parekh opens by paying tribute to Shroff as his guru and connecting Shroff's lifelong defence of economic freedom to the case he is about to make, then surveys India's standing thirty years after Independence — high in the world's military and industrial rankings, low in per-capita income, and curiously distant from the very Pakistanis, Bangladeshis, Sri Lankans and Nepalis with whom Indians share geography, culture and a common struggle against poverty. The core argument is that competitive military build-up is the catastrophe to be avoided and that India must take the first unilateral steps — generously, on the basis of strict equality with smaller neighbours — to prove its bona fides. Parekh inventories the existing scaffolding: the Simla Agreement of 1972 with Pakistan, the Indo-Bangladesh Treaty of 1972, the Treaty of Friendship and Trade with Nepal that already functions as a customs union with free movement of people and capital, and the 1964 settlement that normalised relations with Sri Lanka. He then proposes concrete moves under three headings — communication and tourism, social and cultural exchanges, and trade, industry and finance — including liberal student scholarships, regular professional meetings of bankers and doctors, preferential tariffs, a customs union, common clearing and monetary co-operation. Parekh insists the project must be a people's movement rather than a government scheme, invoking the Treaty of Rome and Jean Monnet's European success story as the relevant model, and he calls for the formation of an independent, voluntary, non-political council to promote South Asia as a community. The pamphlet closes with an appendix excerpting the Simla Agreement and the Indo-Bangladesh Treaty of Co-operation, Friendship and Peace, plus the Forum's standard back matter inviting readers to join. ## Key points - Frames South Asian regional co-operation as a compulsion, not a choice, and the only credible alternative to competitive military build-up in the region. - Anchors the lecture in A. D. Shroff's classical-liberal legacy of economic freedom and fewer controls, treating Shroff's policies as vindicated by 1981 conditions. - Argues that India must take the first generous steps unilaterally, on the basis of strict equality, to prove its bona fides to smaller neighbours. - Surveys the existing treaty architecture — Simla 1972, Indo-Bangladesh 1972, the Nepal Treaty of Friendship and Trade, and the 1964 Sri Lanka settlement — as foundations to build on. - Proposes a concrete agenda under three headings: communication and tourism, social and cultural exchanges, and trade, industry and finance — including intra-regional tourism subsidies, student scholarships and professional associations meeting across borders. - Calls for preferential tariffs, a customs union, common clearing, monetary co-operation and free capital flows within the region, and joint ventures with neighbours rather than only with foreign firms. - Invokes the European Economic Community and Jean Monnet's Treaty of Rome as the model, insisting the movement must come from people rather than governments. - Recommends the formation of an independent, voluntary, non-political council of like-minded people in every country of the region to promote South Asia as a community. - Appends excerpts from the Simla Agreement (1972) and the Indo-Bangladesh Treaty of Co-operation, Friendship and Peace (March 1972) as documentary support. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] REGULATION OF THE CAPITAL MARKET AND THE ROLE OF SEBI URL: https://indianliberals.in/primary-works/regulation-of-the-capital-market-and-the-role-of-sebi-by-gv-ramakrishna-may-15-1993/ ### Summary Based on a talk delivered on 17 September 1992 at the Forum of Free Enterprise in Bombay, G. V. Ramakrishna — then Chairman of the Securities & Exchange Board of India — surveys the Indian capital market a year into liberalisation. He argues that India's economy must take off on two engines: exports, to retire external debt and finance imports, and capital markets, to channel household and institutional savings into productive use now that bureaucratic and public-sector intermediation is shrinking. Both engines, he insists, require an institutional substrate that India still lacks — a strong contract-law regime, an effective supervisory body, and observance of the spirit (not merely the letter) of regulation. Ramakrishna anchors the case for a credible securities regulator in the history of the US SEC under Roosevelt, Landis, Douglas and Frankfurter, and in the IOSCO code of conduct adopted at Santiago, which India is observing 'in the breach'. He notes that 69 of 70 IOSCO members — Mauritius, Malaysia and Indonesia among them — had statutory regulators before India did.… ### Body # REGULATION OF THE CAPITAL MARKET AND THE ROLE OF SEBI *By G.V. RAMAKRISHNA* ## Summary Based on a talk delivered on 17 September 1992 at the Forum of Free Enterprise in Bombay, G. V. Ramakrishna — then Chairman of the Securities & Exchange Board of India — surveys the Indian capital market a year into liberalisation. He argues that India's economy must take off on two engines: exports, to retire external debt and finance imports, and capital markets, to channel household and institutional savings into productive use now that bureaucratic and public-sector intermediation is shrinking. Both engines, he insists, require an institutional substrate that India still lacks — a strong contract-law regime, an effective supervisory body, and observance of the spirit (not merely the letter) of regulation. Ramakrishna anchors the case for a credible securities regulator in the history of the US SEC under Roosevelt, Landis, Douglas and Frankfurter, and in the IOSCO code of conduct adopted at Santiago, which India is observing 'in the breach'. He notes that 69 of 70 IOSCO members — Mauritius, Malaysia and Indonesia among them — had statutory regulators before India did. SEBI itself, set up by administrative order in 1988, only became a statutory body in April 1992 after years of being called a 'toothless tiger'. Despite India's 6,500 listed companies, 21 exchanges, 15 million investors and a tenfold rise in annual capital raised during the eighties (from Rs. 200 to Rs. 10,000 crores), Ramakrishna stresses that quantitative growth has outrun qualitative integrity, exposing investors to fraud, weak disclosure and broken contracts. The bulk of the address is a granular account of market-integrity pathologies SEBI confronts: a complaint volume that has grown from 500 a month in 1990 to 30,000 a month, of which only about 30% are redressible; issuers who hide abridged prospectuses behind perforated edges to avoid disclosing material information; employees' quotas absorbing 98,000 applications at companies with 600–700 employees; 'telephone directory' applications using fictitious names; and Rs. 1,500 crores of 1991 refund money withheld by companies and their banks, prompting the Stockinvest scheme and litigation taken to the Supreme Court. He criticises the prevailing 'zero sum' framing that pits investor against issuer, calls for higher corporate ethics, and signals a shift from complaint-by-complaint redress to systemic reform of intermediaries — especially registrars to the issue, whom he identifies as the primary market's weakest link. ## Key points - Frames Indian liberalisation as requiring two engines — exports and capital markets — once the role of government and public-sector finance is minimised. - Argues that an orderly capital market presupposes the rule of law: strong contract law, effective supervision and speedy redressal, without which investors demand a risk premium that raises the cost of capital. - Uses the US SEC's evolution under Roosevelt, Landis, Douglas and Frankfurter, and the IOSCO Santiago code of conduct, as the institutional template India must catch up to. - Notes that 69 of 70 IOSCO member countries — including Mauritius, Malaysia and Indonesia — had statutory securities regulators before India; SEBI became statutory only in April 1992. - Quantifies the Indian market: 6,500 listed companies (second only to the USA), 21 exchanges, 15 million investors, and an increase in annual capital raised from Rs. 200 crores to Rs. 10,000 crores over the eighties. - Reports a surge in investor complaints from 500 per month in 1990 to roughly 30,000 per month, with ~30% redressed; many of the rest involve sick, BIFR or fly-by-night companies. - Catalogues specific malpractices: hidden or unreadable abridged prospectuses, abuse of the employees' quota, telephone-directory applications, and non-return of Rs. 1,500 crores of 1991 oversubscription refunds — the impetus for the Stockinvest scheme. - Rejects the 'zero sum' framing of issuer versus investor, calls for higher corporate ethics, and signals SEBI's shift from individual complaint redressal to systemic reform of intermediaries, especially the registrar to the issue. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] Report URL: https://indianliberals.in/primary-works/report-second-national-convention-mangalore-feburary-18-20-2005-july-2005/ ### Summary This volume is the formal proceedings report of the Second National Convention of the Indian Liberal Group (ILG), held at the T. V. Raman Pai Convention Centre, Mangalore, on February 18–20, 2005, and dedicated to ILG founder Minoo Masani on his birth centenary. The convention's declared theme was 'Accountability in Governance', chosen because the organisers regard accountability as both the operational guarantee and the road map for liberalism in India. N. Vittal's Inaugural Address ('Accountability: The Road Map and Guarantee for Liberalism') argues that accountability — rooted in individual responsibility, professional codes of conduct, and enforcement mechanisms — is the indispensable condition for a liberal society; he calls for radical reform of Article 311 and a culture shift from power to public service. S. P. Sathe's Keynote Address grounds accountability as a moral concept, drawing on H. L. A. Hart's distinction between 'being obliged' and 'having an obligation', tracing the constitutional conversion of unwritten conventions into written rules through the Rajendra Prasad–Nehru dispute, and analysing the Anti-Defection Law and the disqualification of elected representatives. Hubertus von Welck (Regional Director, Friedrich Naumann Foundation South Asia) delivers the Chief Guest address on 'Promoting Liberalism Globally', tracing the FNF's origins under Theodor Heuss to its current focal themes (globalisation, education, peace-building, active citizenry, human rights, liberal information society) and closing with a reading from Ken Schoolland's Jonathan Gullible. S. V. Raju's President's Address ('Reviving the Liberal Dialogue in Contemporary India') addresses 'GenerationNext' (21–40-year-olds, 70% of the population), credits Narasimha Rao's government with the 1991 U-turn, invokes the Swatantra Party legacy, and argues for a new Liberal Party committed to individual liberty, the rule of law, and limited government with basic social services. Three Liberal Position Papers follow. Ajit Karnik ('India's Economic Liberalisation: The Unfinished Liberal Agenda') argues that pro-poor policies were anti-poor in practice, invokes Hayek's Fatal Conceit against planning hubris, defends globalisation via Bhagwati against Stiglitz, draws on Hernando de Soto for property-rights enforcement, and dismantles Polanyi's 'satanic mill' framing. R. M. Mohan Rao ('Indian Agriculture and Rural Indebtedness') diagnoses post-liberalisation farm distress as a deliberate exclusion of agriculture from reform and prescribes Kisan Credit Cards, mandatory 18% agricultural bank lending, village-level crop insurance, removal of Exim restrictions, and extension reform. G. Giridhar Prabhu ('Administration of Justice') invokes Lincoln and Palkhivala to argue India's judicial system has been corroded by over-amendment, opaque collegium appointments, judicial overreach, and case backlog, and demands a transparent Judicial Service Commission, mandatory codes of conduct, and a five-year reform timeline. The volume's annexures cover the ILG's 2005–2010 strategy (under Dr. Peter Traub's guidance), a President's Report, and a delegate list. ### Body ## Summary This volume is the formal proceedings report of the Second National Convention of the Indian Liberal Group (ILG), held at the T. V. Raman Pai Convention Centre, Mangalore, on February 18–20, 2005. The convention's declared theme was 'Accountability in Governance', chosen because the organizers regard accountability as both the operational guarantee and the road map for liberalism in India. In the rendered pages, the volume opens with a Preface that records the context: mourning the death of ILG founding member Minoo Masani's birth centenary dedication, noting reduced delegate attendance (52 of 319 members, against 100 of 434 at the first convention in Hyderabad), and summarizing the inaugural session. The substantive content in these pages consists of two major addresses: N. Vittal's Inaugural Address arguing that accountability — rooted in individual responsibility, professional standards, and legal enforcement — is the indispensable condition for a liberal society, and S. P. Sathe's Keynote Address, only partially rendered, which frames accountability within constitutional democracy, examining the formal and moral dimensions of legitimacy, the role of the judiciary, anti-defection law, and the accountability of elected representatives. The volume as a whole (115 pages) also contains addresses by Hubertus von Welck (FNSt) and S. V. Raju, a Delegates' Session with organisational business and constitutional amendments, three Liberal Position Papers on economic liberalisation (Ajit Karnik), Indian agriculture (R. M. Mohan Rao), and administration of justice (G. Giridhar Prabhu), plus annexures on the ILG strategy 2005–2010, a President's Report annexure, and a delegate list — none of which appear in the rendered pages. ## Essays ### Preface The Preface, written in the voice of the ILG executive, contextualises the Second National Convention in the rendered pages. It notes that 52 of 319 ILG members attended (against approximately 100 of 434 at the first convention in Hyderabad) and attributes the lower turnout to organisational difficulties catalogued in the President's Report. Before the formal sessions, the gathering observed two sad duties: mourning the passing of Dr. Mme Louella Lobo Prabhu (who had been scheduled to deliver the valedictory address and died on 31 January, the eve of the convention) and observing condolences for Tsunami victims of December 26, 2004. The convention was dedicated to the memory of ILG founding member Minoo Masani on his birth centenary. The open inaugural session was held at the state-of-the-art T. V. Raman Pai Convention Centre before a 300-plus audience; students from St. Agnes Special School performed a play in Kannada ('Beggar Who Would Be King'). The Preface briefly characterises the three addresses delivered — Vittal's on anti-corruption, Sathe's analytical keynote on accountability in governance, and von Welck's on promoting liberalism globally — and thanks the Mangalore Chapter organising committee. - Convention held February 18–20, 2005, at T. V. Raman Pai Convention Centre, Mangalore, with 52 of 319 ILG members attending. - Dedicated to Minoo Masani on his birth centenary; convention mourned two deaths: Dr. Mme Louella Lobo Prabhu and Tsunami victims. - Open inaugural session included a Kannada play by St. Agnes Special School students. - Three inaugural addresses delivered: Vittal (anti-corruption/accountability), Sathe (constitutional accountability), von Welck (global liberalism/FNSt). - Mangalore Chapter organisers credited: G. Giridhar Prabhu, T. Subbaya Shetty, S. L. Shanbhogue, M. R. N. Pai, Claret D'Souza, Dr. Satheesh Rao, K. Prakash Rao. ### Inaugural Address: Accountability :The Road Map and Guarantee for Liberalism *By N. Vittal* N. Vittal's Inaugural Address, titled 'Accountability: The Road Map and Guarantee for Liberalism', argues in the rendered pages that accountability is not merely a bureaucratic desideratum but the functional precondition for a liberal society. He opens by invoking Minoo Masani's definition of liberalism — the individual at the centre, tolerance as the essential spirit, pragmatism as method, and pluralism as outcome — and links this to the ILG's founding principles (individual freedom, right to information, economic prosperity, technology and human development, active citizenship, rule of law). He then identifies four features of good governance under liberalism: rule of law with equal access to justice; dignity of the individual (drawing on President Kalam's observation about human potential); optimum total factor productivity (framed via Masani's pragmatism); and the three pillars of constitutional governance (judiciary, legislature, executive). The address traces accountability to three sources: individual sense of responsibility (the mother as ideal type), professional codes of conduct, and enforcement mechanisms. Vittal introduces his two informal 'laws': the first — that in any organisation, those who work get more work and those who do not work get no promotion or perquisites — and the second — that the greater the media publicity a corruption case receives, the greater the chances of acquittal of the guilty. He analyses why prosecutions fail in India: the legal presumption of innocence, the 300-year backlog in courts (illustrated by the Harshad Mehta scam), the legal cushions available to the wealthy, and the conspiracy charge that often backfires. He argues for greater transparency and the Right to Information Act as the first step, cites John Kennedy's 'failure is an orphan' observation in the context of the Bay of Pigs, and calls for a systemic change: radical modification of Article 311 to bring public servants under a performance contract system. He concludes by calling for a culture change — moving from a culture of power to one of service — and cites L. K. Jha's observation that India erred in calling public servants 'government servants' rather than 'public servants'. - Accountability is defined as the functional guarantee and road map for liberalism, not merely an administrative virtue. - Four features of good governance under liberalism: rule of law, individual dignity, optimum total factor productivity, and constitutional separation of powers. - Accountability arises from three sources: individual responsibility, professional codes of conduct, and enforcement systems. - Vittal's First Law: those who work get more work; those who do not work get no promotion. Vittal's Second Law: media publicity for a corruption case increases the probability of acquittal. - Structural reasons for impunity: 300-year court backlog, legal cushions for the wealthy, conspiracy charges that backfire, and Article 311 protections for public servants. - Prescription: Right to Information Act, radical reform of Article 311 to allow performance contracts, and a culture change from power-seeking to public service. ### Keynote Address: Accountability in Governance *By S. P. Sathe* S. P. Sathe's Keynote Address, 'Accountability in Governance', begins in the rendered pages with a rigorous jurisprudential and constitutional analysis. Sathe opens by distinguishing democracy as government by elected representatives accountable to the people, and frames the Constitution of India as requiring the State to promote welfare and secure a just social order. He then introduces his central concept: accountability as a moral concept — constitutional/liberal democracy is essentially a moral system in which constitutionalism is sustained not merely by law but by morality. He distinguishes obedience out of fear from obedience out of volition, drawing on H. L. A. Hart's distinction between 'being obliged' and 'having an obligation'. The Nuremberg tribunal is cited to show that legal validity does not equal legitimacy. Sathe then examines what constitutional democracy entails: (a) rule of law, (b) utmost regard for individual liberty, and (c) an independent judiciary. He surveys how parliamentary conventions evolved differently in India than in England and Australia, using the controversy over the President's obligation to act on the advice of the Council of Ministers (from Rajendra Prasad's conflicts with Nehru, through M. C. Setalwad's opinion, to the Supreme Court's eventual endorsement and subsequent constitutional amendment) as a case study in the conversion of unwritten conventions into written rules. He examines the Anti-Defection Law (Fifty-second Amendment) and its consequences — cabinet size, the 1/3rd exception, and the later constitutional amendment removing that exception. The address then turns to the accountability of elected representatives: disqualification provisions under the Constitution (office of profit, criminal convictions, the Representation of the People Act Section 8), citing the Satish Harma petrol pump allotments case and the Kargil victims case to illustrate partisan and judicial inconsistency. The rendered pages end mid-address, with Sathe arguing that legal restraints are insufficient and that healthy political precedents matter more, giving the examples of Profumo in England and Mrs. Gandhi's forcing of ministers to resign despite legal clearance. - Accountability is a moral concept: constitutional democracy functions according to law and morality together; legitimacy requires both. - H. L. A. Hart's distinction between 'being obliged' and 'having an obligation' underpins Sathe's argument that accountability is not merely coerced compliance. - The Nuremberg tribunal is used to show that legal validity without legitimacy is insufficient — Nazi officials could not plead superior orders as a defence. - India's constitutional history is traced through the conversion of unwritten conventions (President's obligation to act on Council of Ministers' advice) into written constitutional rules. - Anti-Defection Law (52nd Amendment) is examined in detail: the 1/3rd exception, subsequent removal, and the problem of partisan disqualification decisions by Speakers. - Disqualification of elected members: office of profit, criminal conviction, the Representation of the People Act provisions, and inconsistency in judicial enforcement. ### India's Economic Liberalisation : The Unfinished Liberal Agenda *By Ajit Karnik* Ajit Karnik opens with two apparently contradictory propositions: India has made substantial progress since the 1991 liberalisation, yet the country still has a very long way to go before it can deliver the benefits of economic development to its people. He anchors this tension in a comparison with China, noting that at India's average growth rate the doubling period for per capita GDP is seventeen years against nine for China, and that average Indian incomes of Rs. 2,000 per month could have been four times higher had India followed a less dirigiste path from the start. His central polemical point is that decades of pro-poor policy were in practice anti-poor: subsidising consumption rather than guaranteeing income, protecting those already employed rather than opening opportunity to those without jobs, and chasing a socialist dream of welfare enhancement through means that are the worst enemy of socialist ends. The essay then moves through the achievements of post-1991 reforms — rapid stabilisation, sustained growth above 5 per cent, sharp reduction in the poverty ratio, and the dramatic reversal of the external-account crisis — before pivoting to the "Unfinished Liberal Agenda." Karnik articulates the liberal position as rejecting any false State-versus-market dichotomy in favour of complementarity, invoking Hayek's "Fatal Conceit" as the danger of planning hubris. He works through five institutional reform areas that he regards as inadequately recognised in mainstream policy debate: privatisation (the burden of proof should lie with those who wish to keep any enterprise in the public sector); labour laws (rigid job-security provisions have suppressed formal employment and driven capital-intensity, benefiting incumbents at the expense of those seeking work); globalisation (trade liberalisation unambiguously benefits growth and lowers poverty; Bhagwati's "In Defense of Globalisation" is preferred to Stiglitz's critique); government finances (India's tax-to-GDP ratio is far too low and expenditure composition, not quantum, must change); and credible commitments and policy predictability (the FRBM Act is offered as a model for earmarked fiscal rules). A sixth section, on property rights, draws heavily on Hernando de Soto to argue that it is the enforcement of rights — not their formal existence — that matters for development and that the poor suffer most from their non-enforcement. In the conclusion and Suggested Plan of Action (seen through printed page 71), Karnik engages Karl Polanyi's "The Great Transformation" directly, calling Polanyi's characterisation of market society as a "satanic mill" graphically false, and likening the liberal economist's task of persistently arguing for market institutions to Sisyphus condemned to roll a boulder up a mountain. The Suggested Plan of Action recaps each reform area as a set of specific action points for the Indian Liberal Group. - India's post-1991 growth record is real but insufficient: at 6 per cent per annum per capita GDP doubles only every 17 years, against China's 9-year doubling time. - Decades of ostensibly pro-poor policy were actually anti-poor because they confused redistribution of a fixed pie with growth, and protected the employed at the expense of the unemployed. - The liberal position is not State versus market but complementarity: the State's role is to create a market-enabling environment and provide a safety net, not to run businesses. - Rigid labour laws are identified as a structural cause of India's failure to industrialise and generate formal employment, keeping over 60 per cent of the labour force in agriculture. - Globalisation is defended via Bhagwati against Stiglitz: trade liberalisation unambiguously lowers poverty; selective safety nets, not closure, are the correct policy response to transition costs. - Property-rights enforcement — not their formal legal existence — is the key institutional gap for the poor, drawing on de Soto's work on Peru and developing-country experience. - Polanyi's "Great Transformation" is challenged directly as a false romanticisation of pre-market society that has become a rhetorical resource for anti-reform forces. ### Indian Agriculture and Rural Indebtedness *By R. M. Mohan Rao* R. M. Mohan Rao's paper is an executive summary of proceedings from a National Seminar on Indian Agriculture and Rural Indebtedness held at Guntur. It opens by framing the post-liberalisation farm crisis — rising suicides, growing indebtedness, and the deliberate exclusion of agriculture from the economic reform process — as an indictment of policy neglect that demands urgent liberal remediation. The essay surveys the structural condition of Indian agriculture (predominantly small and marginal holdings, declining institutional credit, stagnating Green Revolution technologies, fragmented marketing, and an eroding social safety net) before systematically proposing policy initiatives across five domains. The policy prescriptions follow a liberal conception of the State as promoter and facilitator rather than controller. Mohan Rao calls for debt relief along the lines of the 1990 Debt Relief Scheme, issue of Kisan Credit Cards with expanded credit limits, de-politicisation of co-operatives, mandatory 18 per cent bank lending to agriculture, crop insurance redesigned at the village level, removal of all Exim restrictions on farm-product movement, a reoriented extension system accountable to farmers rather than bureaucracies, marketing reforms giving farmers freedom to transport and sell freely, and a social-sector package covering primary education, rural health insurance, and broadened KCC insurance limits. Throughout, the paper frames agriculture's exclusion from liberalisation not as an oversight but as a deliberate policy choice, and argues that correcting it is both an economic necessity and a liberal imperative. - Agriculture contributes approximately 25 percent of GDP and employs 56.7 percent of the workforce yet has been deliberately kept outside the economic reform process, which Mohan Rao treats as a liberal grievance rather than mere oversight. - The persistence of old problems (monsoon dependence, debt bondage, poor rural infrastructure) is compounded by new ones: growing fragmentation of holdings, declining soil fertility, falling groundwater, increased commercialisation risk, and collapse of joint-family social absorption networks. - Post-1991 financial sector reforms disrupted institutional rural credit flow, pushing farmers toward input dealers and non-institutional lenders — a key driver of the farmer-suicide crisis particularly visible in Andhra Pradesh cotton belt during 1997-98. - The liberal policy framework proposed centres on a pro-active State that guarantees land and water stewardship, removes all movement and Exim restrictions on farm products, issues Kisan Credit Cards with consumption coverage, mandates 18 per cent bank lending to agriculture, and funds crop insurance at village level. - Extension reform is flagged as critical: existing public-extension systems lack accountability; para-extension through input suppliers has actively contributed to suicides; a multi-agency approach with media, SHGs, and farmers' organisations is recommended alongside a holistic farming-system approach suited to Indian diversity. - Marketing is described as having become 'a gamble' due to government interventions that procure forcefully in rising markets and abandon farmers in falling ones; the essay calls for toll-free market intelligence services, warehouse receipt credit, and electronic-media price dissemination. - Social-sector interventions — vocational education for rural youth, group rural health insurance, extended KCC insurance limits, and special health schemes for small and marginal farmers — are presented as integral to reducing the vulnerability that converts debt into death. ### Administration of Justice *By G. Giridhar Prabhu* G. Giridhar Prabhu's position paper argues that an independent judiciary is the sine qua non of democracy, but that India's judicial system has been severely compromised by five decades of constitutional over-amendment, opaque and politically influenced appointment processes, judicial overreach into legislative territory, and an overwhelming backlog of cases. Drawing on Lincoln's definition of democracy and Palkhivala's lament that Indians received a Constitution but not the ability to cherish it, Prabhu frames the crisis as a failure of all three constitutional pillars — Legislature, Judiciary, and Executive — to uphold the Rule of Law, which he characterises through the three Cs: Corruption, Confusion, and Chaos. The paper moves through a series of concrete reform demands on behalf of the Indian Liberal Group. On judicial appointments, Prabhu calls for a transparent Judicial Service Commission to replace the opaque collegium system, citing the Law Commission's 14th Report and Ram Jethmalani's observation that there are really only two kinds of judges — those who know law and those who know the Law Minister. He advocates mandatory Codes of Conduct, age-capped recruitment (no appointment above 55 for High Courts, 57 for Supreme Court), retirement extended to 65, and a cooling-off period before retired judges take arbitration assignments. On criminal justice, ILG demands prioritise enforcement of law, fair trial, punishment, social rehabilitation, and a five-year reform timeline for new prisons and backlog reduction. An appended 'Notes for Discussion' section provides case-pendency data showing 3.27 million cases pending in High Courts (41% older than five years) and over 22.7 million in district courts, with the ILG noting that up to 80 per cent of current litigants have lost confidence in the judicial system. - Prabhu opens by invoking Lincoln and Palkhivala to argue that India has a Constitution but has failed to develop the capacity to cherish or enforce it. - He identifies judicial activism — the judiciary acting as lawmaker — as the primary structural deformity corroding the separation of powers. - The collegium system for judicial appointments is criticised as non-transparent and susceptible to political and partisan influence, with Ram Jethmalani cited as evidence. - ILG proposes a Judicial Service Commission, mandatory Code of Conduct, retirement age raised to 65, and a bar on retired judges taking government arbitration assignments for at least one year. - Criminal justice demands include fair trial, enforcement of law, social rehabilitation through a correctional system, and implementation of the Malimath Committee's recommendations. - The 'Notes for Discussion' appendix presents stark pendency data: 21,995 Supreme Court cases, 3.27 million High Court cases, and 22.75 million district-court cases, with up to 80% of litigants reported to have abandoned confidence in the system. - The essay closes with the warning that unless the three constitutional pillars are strengthened, democracy risks meaning 'of the Criminals, for the Criminals and by the Criminals'. ### 1. Strategy of the Indian Liberal Group (ILG) (2005-2010) This annexure presents the formal five-year strategy document of the Indian Liberal Group (ILG) for the period 2005–2010, prepared under the guidance of Dr. Peter Traub, a German liberal consultant affiliated with the Friedrich Naumann Foundation. The document opens with a statement of the ILG's main aim — to be recognised as a pressure group and catalyst for change across most of India, fighting for a broad understanding of liberal values at all levels of public life — and organises the strategy around six main-aim aspects: educating people on liberal values; influencing political decision-making; taking up key issues for concrete results; empowering and activating local people; strengthening liberal politicians and political parties; and supporting other organisations and individuals spreading liberal ideas. For each of the six aspects, the document sets out concrete milestones, then specifies detailed activities and task assignments with named responsible persons and deadlines. Aspect 1 (education) involves profiling target groups (students, media, elected representatives, women, farmers, business people, civil servants), formulating liberal principles as guiding frameworks for training, developing training kits, training trainers, and building marketing techniques to 'sell' the liberal message — with the overall image-building slogan 'ILG — we care!' Aspects 2 and 3 focus on lobbying and policy-watch activities: building systematic relationships with the Prime Minister's office, civil servants, elected legislators, opinion leaders, and national and regional media, while also taking up specific issues that demonstrate the relevance of the ILG's 'five liberal pillars.' Aspects 4 and 5 address grassroots empowerment of local elected bodies and citizens, and engagement with political parties — including identifying and training potential liberal candidates, counselling ILG members who are party members, and providing leadership curricula. - The ILG frames itself as a pressure group and catalyst for change, not a political party, aiming for recognition across most of India by 2010. - The strategy is organised around six main-aim aspects with corresponding milestones and time-bound task assignments. - Aspect 1 targets six categories: students/youth/teachers, media, elected representatives, women, farmers, business people, and civil servants, with dedicated responsible persons for each. - Aspect 2 operationalises political influence through systematic relationship-building with the PM's office, civil servants, legislators, opinion leaders, and media — including a proposed 'ILG Policy Watch' monitoring official websites. - Aspect 4 (local empowerment) and Aspect 5 (party strengthening) together constitute a theory of bottom-up liberal political mobilisation, from local body orientation to identifying and supporting liberal political candidates. - Dr. Peter Traub, a German liberal consultant formerly with the Friedrich Naumann Foundation, is credited as a key external adviser who shaped the strategy framework. - The document's marketing approach includes producing videos/DVDs on empowerment success stories and identifying an 'emotional, image-building message' for each target audience. ### Address by Chief Guest: Promoting Liberalism Globally - The Mission of the FNSt *By Hubertus von Welck* Hubertus von Welck, Regional Director South Asia of the Friedrich Naumann Foundation (FNF), delivered the Chief Guest address at the ILG Second National Convention in Mangalore. The address introduces the FNF's history, global mission, and operational instruments to an Indian liberal audience, framing the Foundation as the institutional vehicle through which Germany's liberal tradition — rooted in Friedrich Naumann's vision of civic education and participatory democracy — is projected internationally. Von Welck organises his remarks in three parts. First, he traces the FNF's origins: established in Germany on 19 May 1958 under the patronage of Federal Republic President Theodor Heuss, the Foundation took its name from Friedrich Naumann (1860–1919), a pastor-turned-politician whose most consequential legacy was the plan for a 'Free Academy for Politics' designed to educate citizens for democracy. Second, he articulates the Foundation's overriding goal — to promote the principle of freedom — through three interlocking convictions: that freedom drives development (with free markets and the rule of law as key components), that democracy safeguards peace, and that human rights are both ends and prerequisites of liberal development policy. Third, he enumerates six focal themes the FNF has adopted for 2004–2007: Globalisation and Development, Education as the basis of a free society, Peace-building and conflict prevention, Active citizenry and local politics, Human rights and constitutional reform, and the Liberal information society. The address closes (in the rendered pages) with an extended reading from 'Jonathan's Guiding Principles' in Ken Schooland's The Adventures of Jonathan Gullible, presented as a distillation of self-ownership and non-aggression principles — the text cuts off before the conclusion. - The FNF was founded on 19 May 1958 in Germany and takes its name and civic-education mission from Friedrich Naumann (1860–1919), whose 'Free Academy for Politics' concept shaped the Foundation's participatory ethos. - Von Welck's overriding thesis is that freedom, development, and peace are inseparable: market freedom correlates positively with growth and the human development index; democracy is a structural bulwark against war and extremism. - The FNF's three primary instruments abroad are civic/political education, political dialogue (including an International Academy of Leadership), and political consultancy for liberal parties and organisations. - Six focal themes for 2004–2007 cover globalisation and development, education reform (including education vouchers), peace-building, active local citizenry, constitutional human-rights protection, and the liberal information society. - The address ends with a reading from Ken Schooland's libertarian fable The Adventures of Jonathan Gullible as a statement of the FNF's philosophical foundations; the text is cut off mid-passage in the rendered pages. ### President's Address: Reviving the Liberal Dialogue in Contemporary India - Why India Needs a liberal Political Party *By S. V. Raju* S. V. Raju's President's Address, titled 'Reviving the Liberal Dialogue in Contemporary India: Why India Needs a Liberal Political Party — The Role of the Indian Liberal Group', is explicitly directed at India's younger generation — those between 21 and 40 who constitute 70% of the population and whom Raju calls 'GenerationNext'. He holds this cohort responsible for the present state of Indian politics and argues that they must understand how post-independence policy choices led the country to its current condition of corruption, nepotism, and crony capitalism. Raju traces a detailed historical arc from the euphoria of 1947 through the Second Five Year Plan's radical socialist turn, the construction of a 'licence-permit-quota raj', the emergence of a 'New Class' of corrupt politicians and bureaucrats, and the eventual crisis that forced India to approach the World Bank and IMF in the early 1990s. He credits the Congress government led by Narasimha Rao (and its Finance Minister, now Prime Minister) with initiating the economic U-turn, and observes that successive NDA and UPA governments have continued that direction despite Left pressure. He draws on the Swatantra Party's legacy as a model for a principled liberal opposition that believed in free markets, decentralisation, and coalition democracy. In the rendered pages, Raju then turns to the question of whether a Liberal Party is viable and necessary in India's emerging coalition environment. He argues that liberal values must permeate all areas of governance — not just the economy — and that the ILG's core purpose is to push that message. He describes the core philosophy of any prospective Liberal Party: belief in individual freedom vis-à-vis the State, the Rule of Law, limited government, and acceptance that government must also provide basic social services. He closes the rendered portion with a discussion of the negative vote and the ILG's public support for the right not to choose any candidate on the ballot. - Raju addresses GenerationNext (ages 21–40, 70% of India's population) and assigns them both responsibility and agency for reforming Indian politics. - He traces India's post-independence decline to the Second Five Year Plan's Soviet-inspired socialist model, the permit-licence-quota raj, and the resulting New Class of corrupt politicians and businessmen. - The economic U-turn initiated by the Narasimha Rao Congress government is acknowledged as the turning point, with successive NDA and UPA governments continuing liberalisation despite Left opposition. - The Swatantra Party is invoked as the historical liberal precedent — a party that championed free markets, decentralisation, and coalition politics — and as a model for what the ILG might revive. - Raju argues that a Liberal Party is needed urgently, before parliamentary democracy is subverted by criminals and unprincipled opportunists, and outlines its core philosophical commitments: individual liberty, Rule of Law, limited government, and basic social service provision. - The ILG's active support for the negative-vote concept (the right to reject all candidates) is cited as a concrete example of liberal engagement in electoral reform. --- ## [Primary work] RESHAPING THE CONSTITUTION URL: https://indianliberals.in/primary-works/reshaping-the-constitution-implications-of-the-swaran-singh-committee-recommendations-n-a-palkhivala-20-july-1976/ ### Summary Written in the heart of the Emergency, this Forum of Free Enterprise pamphlet reprints N. A. Palkhivala's polemic against the Swaran Singh Committee's report on constitutional amendments. Palkhivala concedes a handful of innocuous proposals — moving agriculture and education to the Concurrent List, allowing localised Emergency proclamations, setting up service tribunals — but argues that the Committee's central thrust would in reality alter the basic structure of the Constitution. He frames the moment as a civic emergency in itself, warning a complacent public that the proposals are debated less than the monsoon or the price of onions, and that posterity will ask where citizens were when their freedoms were put up for discussion. The core of the tract is a constitutional-law argument against the proposed amendment of Article 368, which would put parliamentary amendments beyond the reach of any court.… ### Body # RESHAPING THE CONSTITUTION *By N. A. Palkhivala* ## Summary Written in the heart of the Emergency, this Forum of Free Enterprise pamphlet reprints N. A. Palkhivala's polemic against the Swaran Singh Committee's report on constitutional amendments. Palkhivala concedes a handful of innocuous proposals — moving agriculture and education to the Concurrent List, allowing localised Emergency proclamations, setting up service tribunals — but argues that the Committee's central thrust would in reality alter the basic structure of the Constitution. He frames the moment as a civic emergency in itself, warning a complacent public that the proposals are debated less than the monsoon or the price of onions, and that posterity will ask where citizens were when their freedoms were put up for discussion. The core of the tract is a constitutional-law argument against the proposed amendment of Article 368, which would put parliamentary amendments beyond the reach of any court. Drawing on the Kesavananda Bharati decision, Palkhivala lays out six interlocking reasons why Parliament's amending power is inherently limited: ultimate sovereignty rests with the people; Parliament is a creature of the Constitution; a delegated power cannot destroy other powers or itself; an unlimited amending power could be used to make all future amendments impossible; the historical bargain that secured minority assent to the Constitution rested on guaranteed Fundamental Rights; and Article 60's presidential oath to "preserve, protect and defend the Constitution" would be incoherent if Parliament could destroy its basic structure. He then dismantles three further sets of proposals. The substitution of "Sovereign Democratic Secular Socialist Republic" for the existing Preamble formula he treats as cosmetically unnecessary and substantively dangerous, quoting Solzhenitsyn on the emptiness of the phrase "socialist democracy" and recalling that the Constituent Assembly itself rejected inserting "Socialist." The proposed expansion of Article 31C — immunising any law claiming to pursue Directive Principles from Fundamental Rights challenge — would, he argues, leave only "the corpse of the Fundamental Rights" embalmed in the text. Finally, curtailing the writ jurisdiction of the Supreme Court and High Courts under Articles 32 and 226, and requiring super-majorities of judges to strike down a law, would devalue the High Courts, subordinate the judiciary to the executive, and enforce against citizens laws that a majority of judges have already held unconstitutional. Palkhivala closes with Lord Acton on the choice every democracy faces between the authority of law and the will of force, and reminds readers that the people of India made their choice in 1949 — and are now being asked, twenty-seven years later, to make the other one. The pamphlet is a courtesy reprint from The Illustrated Weekly of India of 4 July 1976. ## Key points - Palkhivala accepts a few Swaran Singh Committee proposals as benign — moving agriculture and education to the Concurrent List, localised Emergency proclamations under Article 352, and administrative service tribunals — but treats the bulk of the report as an attack on the Constitution's basic structure. - He invokes the Supreme Court's ruling in Kesavananda Bharati to argue that Parliament's amending power is inherently bounded and cannot be used to destroy the Constitution's basic features, and that the proposal to make Article 368 amendments non-justiciable is itself unconstitutional. - A six-point first-principles argument: sovereignty rests with the people, Parliament is a creature of the Constitution, delegated power cannot destroy other powers or itself, the President's Article 60 oath to preserve the Constitution presupposes limited amending power, and the Constitution's minority-protection bargain depends on Fundamental Rights being inalienable. - Inserting "Secular" and "Socialist" into the Preamble is dismissed as cosmetic and dangerous; "socialism" is ambiguous, the Constituent Assembly already rejected the word, and the Preamble in any case cannot be amended under Article 368. - Expanding Article 31C to shield any law claiming to advance Directive Principles from Fundamental Rights challenge would leave Fundamental Rights — including life, liberty, free expression, assembly, association, movement, and equality before the law — virtually abrogated. - Stripping the Supreme Court's Article 32 jurisdiction and the High Courts' Article 226 jurisdiction, requiring prior notice before interim stays, and devaluing High Court review of central laws would relegate the judiciary to the background and leave citizens — especially poor citizens — without effective legal redress. - The proposed two-thirds-of-the-Bench rule for striking down laws is shown to violate arithmetic and the rule of law: it means that laws already held unconstitutional by a majority of judges would still be enforced by the executive. - Closing frame: the Acton dictum on law versus arbitrary power, and the rhetorical contrast between the choice India made in 1949 and the opposite choice it is now being invited to make. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] Resources for the Third Plan URL: https://indianliberals.in/primary-works/resources-for-the-third-plan-m-a-master-mar5-1961/ ### Summary M. A. Master's "Resources for the Third Plan" is the printed text of a speech delivered at the Forum of Free Enterprise in Bombay on 25 October 1960, six months before the Third Five-Year Plan was to begin on 1 April 1961. Master sets aside the Plan's wider socialistic objectives — a "socialistic pattern of society," removal of income inequality, full employment, higher living standards — to confront a single question: how is the Plan to be financed, both internally and externally? He frames the inquiry as a sober audit of what the Second Plan actually taught India about resource-raising under planning. The core of the booklet is a tabulation of five "lessons" from the Second Plan, each one a gap between estimate and outcome. The three steel plants estimated at Rs. 300 crores rose past Rs. 620; foodgrain imports planned at Rs. 144 crores reached Rs. 4,694 crores; the adverse balance of trade swelled from an estimated Rs. 700 crores to Rs. 1,500; withdrawals from the Sterling Balances overshot estimates by more than 100 per cent; and revenue raised by additional taxation in the name of the Plan — about Rs. 604 crores — was absorbed instead by non-Plan expenditure.… ### Body # Resources for the Third Plan *By M. A. Master* ## Summary M. A. Master's "Resources for the Third Plan" is the printed text of a speech delivered at the Forum of Free Enterprise in Bombay on 25 October 1960, six months before the Third Five-Year Plan was to begin on 1 April 1961. Master sets aside the Plan's wider socialistic objectives — a "socialistic pattern of society," removal of income inequality, full employment, higher living standards — to confront a single question: how is the Plan to be financed, both internally and externally? He frames the inquiry as a sober audit of what the Second Plan actually taught India about resource-raising under planning. The core of the booklet is a tabulation of five "lessons" from the Second Plan, each one a gap between estimate and outcome. The three steel plants estimated at Rs. 300 crores rose past Rs. 620; foodgrain imports planned at Rs. 144 crores reached Rs. 4,694 crores; the adverse balance of trade swelled from an estimated Rs. 700 crores to Rs. 1,500; withdrawals from the Sterling Balances overshot estimates by more than 100 per cent; and revenue raised by additional taxation in the name of the Plan — about Rs. 604 crores — was absorbed instead by non-Plan expenditure. Master leans on the Economic Survey of 1958-59 and the Estimates Committee's 92nd Report to argue that this "frittering away" of Plan revenues is now a settled administrative habit, and he warns that without sustained public vigilance the Third Plan will see the same diversion. Master then walks source by source through the Draft Outline's announced financing — Rs. 350 crores from existing taxation; Rs. 1,696 crores of additional taxation; Rs. 1,650 crores of "surpluses of public enterprises" raised by lifting administered prices; Rs. 850 crores of loans; Rs. 550 crores of small savings; Rs. 510 crores from Provident Funds; Rs. 2,200 crores of external assistance; and only Rs. 550 crores of deficit financing — and finds every estimate optimistic. His structural argument is that the Public Sector now draws from a pool fed by both general taxation and deficit financing, while the Private Sector has access to neither: "the path of the Public Sector is strewn... with a bed of roses which can never be available to the Private Sector." Worse, the Planners assume Rs. 547 crores of profit from State industrial undertakings whose actual return runs at roughly 1½ per cent. The booklet closes by invoking T. T. Krishnamachari's own concession that the Plan must be trimmed to what is "manageable," and ends with the warning that "economic laws do not respect ethical or ideological aspirations." PDF page 10 (printed pages 16–17) was not in the rendered set, so a short stretch of the argument between the analysis of Provident Funds / external assistance and the concluding section on deficit financing and dear-money policy is not covered above. ## Key points - Booklet is the text of a Forum of Free Enterprise speech delivered in Bombay on 25 October 1960, on the eve of the Third Five-Year Plan starting 1 April 1961. - Author brackets the Plan's wider socialistic objectives to focus on one question — how its resources are to be raised, internally and externally. - Five "lessons" from the Second Plan: wide cost overruns on steel; foodgrain imports vastly exceeding estimates; an adverse trade balance roughly double the estimate; Sterling Balance withdrawals overshooting by more than 100 per cent; and roughly Rs. 604 crores of Plan-purpose revenue absorbed by non-Plan expenditure. - Master cites the Economic Survey 1958-59 and the Estimates Committee's 92nd Report to argue that fresh taxation levied "specifically for financing the projects of the Plan" has been routinely diverted to non-Plan objects. - Taxation and deficit financing during the Second Plan (Rs. 575 crores deficit, Rs. 531 crores fresh tax) financed the Public Sector while the Private Sector had access to neither pool. - Indirect taxation and higher administered prices of public-sector goods are explicitly treated by the Planners as "a part of the calculated sacrifices that have to be made," turning a negation of democracy into Plan financing. - The Draft Outline projects Rs. 1,650 crores from "surpluses of public enterprises," but Master notes that the Rs. 547 crores invested in State industrial undertakings during the Second Plan returned roughly 1½ per cent — making the Third Plan estimate implausible. - External assistance assumed at Rs. 2,200 crores rests partly on continued use of Sterling Balances, which have already been drawn down; private-sector foreign-exchange needs of about Rs. 300 crores are not in this total. - Master quotes T. T. Krishnamachari's admission that the Plan, originally Rs. 5,600 crores, had to be cut to Rs. 4,500 crores, and argues the same logic of paring un-urgent projects still applies. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] RE-THINKING ON GOLD CONTROL URL: https://indianliberals.in/primary-works/rethinking-on-gold-control-by-bs-mahajan-setember-11-1965/ ### Summary Writing in September 1965 for the Forum of Free Enterprise, B. S. Mahajan — identified in a footnote as Secretary of the All-India Sarafa Association and an authority on the gold problem — argues that the Gold Control Rules are fundamentally misconceived and have comprehensively failed on their own stated terms. His central contention is that gold-hoarding is not a pathology to be regulated away but a rational response to currency depreciation: with the rupee now worth roughly 17 paise in terms of its pre-war purchasing power, and postal savings yielding compound interest of only 4.4 per cent against gold investment's implied 6.02 per cent return, ordinary people have every economic reason to hold gold. State measures that seek to override this preference treat the symptom while the disease — monetary instability — goes unattended. Mahajan marshals three categories of evidence for the Rules' failure. First, administrative cost: implementation has burdened the national exchequer with approximately Rs. 29 lakhs, imposed an additional Rs. 20 crores on the trade in rehabilitation costs for displaced goldsmiths, and eliminated a permanent income-tax revenue stream of over Rs.… ### Body ## Summary Writing in September 1965 for the Forum of Free Enterprise, B. S. Mahajan — identified in a footnote as Secretary of the All-India Sarafa Association and an authority on the gold problem — argues that the Gold Control Rules are fundamentally misconceived and have comprehensively failed on their own stated terms. His central contention is that gold-hoarding is not a pathology to be regulated away but a rational response to currency depreciation: with the rupee now worth roughly 17 paise in terms of its pre-war purchasing power, and postal savings yielding compound interest of only 4.4 per cent against gold investment's implied 6.02 per cent return, ordinary people have every economic reason to hold gold. State measures that seek to override this preference treat the symptom while the disease — monetary instability — goes unattended. Mahajan marshals three categories of evidence for the Rules' failure. First, administrative cost: implementation has burdened the national exchequer with approximately Rs. 29 lakhs, imposed an additional Rs. 20 crores on the trade in rehabilitation costs for displaced goldsmiths, and eliminated a permanent income-tax revenue stream of over Rs. 27 crores per year. Second, market effect: the 14-carat purity cap has not reduced ornament purchases; it has merely redirected demand toward clandestinely sourced fine gold, pushing all transactions underground and making accurate turnover data impossible to obtain. Third, price signal: gold prices rose from Rs. 103.50–112.50 per 10 grammes before the Rules to Rs. 135.50–139.65 during the same month the following year, a premium that itself constitutes an incentive to smuggle. The Government's claim that the number of dealers has fallen from 27,000 to 12,000 is turned against it: fewer licensed dealers means more clandestine operators, not less gold in circulation. Mahajan closes by proposing that an independent Currency and Gold Commission of experts be constituted to address the underlying monetary disease rather than continuing a prohibitionist approach that, like alcohol prohibition elsewhere, has proved counter-productive. ## Key points - Gold-holding is a rational savings strategy given the rupee's depreciation to approximately 17 paise of its pre-war purchasing power; gold investment yielded 6.02% compound vs. 4.4% for postal savings. - The NCAER survey confirms that gold and silver purchases represent a significant component of Indian household saving, rooted in the absence of rural banking and deep cultural attachment. - The 14-carat purity ceiling backfired: it created insatiable demand for fine gold, driving buyers to clandestine sources and pushing the entire trade underground. - Gold prices rose from Rs. 103.50–112.50 to Rs. 135.50–139.65 per 10 grammes under the Rules, with the price premium acting as a direct incentive to smuggle. - Administrative and fiscal costs of the Rules include Rs. 29 lakhs to the exchequer, an additional Rs. 20 crores burden on the trade, and loss of over Rs. 27 crores per year in income-tax revenue. - The fall in licensed dealers from 27,000 to 12,000 has not reduced gold demand; it has handed the trade to a 'clan of clandestine operators' replacing honest jewellers and sarafs. - Mahajan proposes an independent Currency and Gold Commission to tackle monetary instability — the root cause — rather than persisting with negative regulatory measures that cannot cure basic economic maladies. --- ## [Primary work] Revival of Swadeshi Spirit —An Answer to Smuggling URL: https://indianliberals.in/primary-works/revival-of-swadeshi-spirit-an-answer-to-smuggling-s-r-vakil-28-november-1974/ ### Summary S. R. Vakil's 1974 pamphlet, published by the Forum of Free Enterprise (Bombay) and based on public lectures he had been delivering as a Bombay solicitor and authority on foreign exchange laws, frames smuggling as the urgent moral and economic crisis of post-independence India. Vakil opens with an autobiographical recollection of the Salt Satyagraha during his school days in Surat and offers a twin thesis: that the 'Parallel Government' run by smugglers can only be uprooted by reviving the Swadeshi spirit and boycotting foreign luxury goods, and that 'Religion and Economics are obverse and reverse of the same coin'. The body of the pamphlet marshals striking trade statistics — Dubai's role as a free-port clearing house for gold, silver, watches, transistors, textiles and consumer luxuries; sterling-denominated import figures for 1962–1969; British estimates of Indian silver hoards at five thousand million ounces (£4.8 billion / Rs. 9,000 crores) in 1968; and the 39,925,100 ounces of Indian silver officially exported from Dubai to Britain in eleven months of 1968.… ### Body # Revival of Swadeshi Spirit —An Answer to Smuggling *By S. R. Vakil* ## Summary S. R. Vakil's 1974 pamphlet, published by the Forum of Free Enterprise (Bombay) and based on public lectures he had been delivering as a Bombay solicitor and authority on foreign exchange laws, frames smuggling as the urgent moral and economic crisis of post-independence India. Vakil opens with an autobiographical recollection of the Salt Satyagraha during his school days in Surat and offers a twin thesis: that the 'Parallel Government' run by smugglers can only be uprooted by reviving the Swadeshi spirit and boycotting foreign luxury goods, and that 'Religion and Economics are obverse and reverse of the same coin'. The body of the pamphlet marshals striking trade statistics — Dubai's role as a free-port clearing house for gold, silver, watches, transistors, textiles and consumer luxuries; sterling-denominated import figures for 1962–1969; British estimates of Indian silver hoards at five thousand million ounces (£4.8 billion / Rs. 9,000 crores) in 1968; and the 39,925,100 ounces of Indian silver officially exported from Dubai to Britain in eleven months of 1968. Vakil ties the gold-and-silver haemorrhage to a 'crisis of national confidence', criticises India's Gold Control as having produced unemployed goldsmiths, black-market property booms, capital flight and a new bureaucracy of corruption, and includes the recurring smuggling of women, idols and consumer kitsch among the moral costs. The argumentative spine is a classical-liberal one within a Gandhian register: Vakil indicts the Government's 'unreasoning aversion' to trusting the private sector with foreign-exchange-saving projects, the 'neurotic zeal' of experimental legislation, and Exchange Control laws whose 'known uncertainty' he likens to a Frankenstein monster, while welcoming the deterrent effect of the amended MISA on smugglers and arguing that the public must take a five-year vow against foreign goods. He invokes Mahatma Gandhi, J. N. Tata and A. B. Godrej as exemplars of Swadeshi, draws on extracts from Tendolkar's 'Life of Mahatma Gandhi', and announces an Epilogue of sayings from Malcolm Muggeridge. In the rendered pages, the front matter carries dedicatory quotes from A. D. Shroff (Forum founder-president) and Eugene Black; the main address runs printed pages 1–7; Appendix I reprints Vakil's May 1969 'Note on gold Smuggling'; Appendix II reproduces extracts from MISA 1971, the MISA Amending Ordinance 1974, and the Presidential Order on MISA detenus; and Appendix III begins reprinting Section 111 of the Customs Act 1962. The closing pages of Appendix III and the Muggeridge Epilogue announced in the Introduction fall outside this rendered chunk. ## Key points - Vakil's central thesis: the 'Parallel Government' of smugglers can only be eradicated by reviving the Swadeshi spirit and boycotting foreign luxury goods, paired with a moral claim that religion and economics are inseparable. - Dubai is profiled as the seven-Trucial-States free port acting as smuggling clearing house: 4.625% duty on sea cargo, 2% on air, 1.25% on wrist watches, zero duty on gold, with 1964 gold imports of $75 million. - Sterling-denominated trade figures show Dubai imports rising from £8.15 million in 1962 to £80 million by 1969, with Indian silver exports from Dubai to Britain at 39,925,100 ounces in eleven months of 1968. - Vakil estimates Indian silver hoards at 5,000 million ounces (£4.8 billion / Rs. 9,000 crores by 1968 prices) and reports gold imports of 160 metric tonnes (Rs. 280 crores) into Dubai in 1968 alone, largely re-exported to India and Pakistan. - The pamphlet catalogues seven net effects of Gold Control — surreptitious smuggling, goldsmith unemployment, diversion of black money into property, rupee depreciation, capital flight, destruction of rural credit, and new corruption — and laments smuggled idols of Shankar and Vishnu plus the smuggling of girls under false marriage declarations. - MISA is welcomed as a 'salutary' deterrent that has lowered prices of iron, steel, cement and drugs by 40%, halted Singapore compensatory payments, and stilled share bazaars; Vakil casts MISA as 'for smugglers and not for strugglers'. - Government policy is condemned for its 'unreasoning aversion' to entrusting the private sector with foreign-exchange-saving projects, its 'neurotic zeal' for experimental legislation, and its Exchange Control laws whose 'known uncertainty' Vakil compares to a Frankenstein monster. - Appendix II reproduces sections 3–9 of the Maintenance of Internal Security Act 1971 (No. 26 of 1971) as amended by the Defence of India Act 1971, the MISA Amending Ordinance 1974, and the Presidential Order on MISA detenus' right to move the court suspending Articles 14, 21 and 22 during the Emergency proclaimed 3 December 1971. - Appendix III begins extracts from Section 111 of the Customs Act 1962 enumerating goods liable to confiscation as improperly imported. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] Rights, Duties & Obligations of Company Directors URL: https://indianliberals.in/primary-works/rights-duties-and-obligations-n-k-petigara-jun10-1964/ ### Summary N. K. Petigara, a Bombay solicitor and authority on company law, delivers a careful exposition of how the legal position of company directors in India had been transformed by the Companies Act 1956, the Companies (Amendment) Act 1963, and the Banking Laws (Miscellaneous Provisions) Act 1963. He argues that while the duties and obligations of directors have remained substantively unchanged, the rights of directors — particularly the right of management — have been steadily cut down. The recommendations of the Vivian Bose Commission, covering misuse of objects clauses, underwriting commissions, fictitious shareholdings, dummy directors, and inter-company loans, frame much of the new legislation and the booklet's first half catalogues each item the Commission flagged. The central polemical concern of the talk is the displacement of shareholder oversight by Government regulation under the elastic banner of "public interest." Petigara accepts that mismanagement exists and that legislative intervention is sometimes warranted, but he insists that India's institution of corporate enterprise is "extremely limited" relative to the country's industrialisation needs and that an undesirable … ### Body # Rights, Duties & Obligations of Company Directors *By N. K. PETIGARA* ## Summary N. K. Petigara, a Bombay solicitor and authority on company law, delivers a careful exposition of how the legal position of company directors in India had been transformed by the Companies Act 1956, the Companies (Amendment) Act 1963, and the Banking Laws (Miscellaneous Provisions) Act 1963. He argues that while the duties and obligations of directors have remained substantively unchanged, the rights of directors — particularly the right of management — have been steadily cut down. The recommendations of the Vivian Bose Commission, covering misuse of objects clauses, underwriting commissions, fictitious shareholdings, dummy directors, and inter-company loans, frame much of the new legislation and the booklet's first half catalogues each item the Commission flagged. The central polemical concern of the talk is the displacement of shareholder oversight by Government regulation under the elastic banner of "public interest." Petigara accepts that mismanagement exists and that legislative intervention is sometimes warranted, but he insists that India's institution of corporate enterprise is "extremely limited" relative to the country's industrialisation needs and that an undesirable element exists in every system. He surveys the modern doctrine of directors' fiduciary duties through House of Lords authority (Regal (Hastings) v. Gulliver) and the Allahabad High Court's expansive use of Sections 397 and 398 of the Act in the Haridas Mundhra holding-company litigation, where the court pierced the corporate veil to treat parent and subsidiary as a single business reality. In its closing sections Petigara turns to the new Tribunal and Board of Company Law Administration created by the 1963 amendments, the enhanced supervisory powers granted to the Reserve Bank over bank directors under the Banking Laws (Miscellaneous Provisions) Act, and the introduction of Section 388B permitting Government removal of directors. He is sharply critical of the transfer of jurisdiction from the High Courts to administrative tribunals, arguing — as a matter of constitutional principle and despatch — that judicial redress "capable of being corrected" remains preferable to administrative finality. The booklet records a talk delivered under the auspices of the Forum of Free Enterprise in Bombay on January 10, 1964, and is published in their characteristic format as a contribution to public debate on the regulatory direction of Indian company law. ## Key points - Duties and obligations of directors are substantively unchanged by recent legislation; what has been cut down is the right of management. - The Vivian Bose Commission's catalogue of abuses (misuse of objects clauses, underwriting commissions, fictitious or nominee holdings, dummy directors, inter-company loans, asset-stripping in liquidation) drives the recent statutory changes embodied in the Companies (Amendment) Act 1963. - Petigara's central worry is the elastic concept of "public interest," under which regulatory power is handed to Government agencies rather than left with shareholders — a notion "definitely something much wider than the interest of the shareholders." - He defends the existence and growth of large limited companies as the only mechanism capable of mobilising the finance and resources required for industrialising India. - The fiduciary standard summarised through Lord Russell's dictum in Regal (Hastings) Ltd. v. Gulliver and the treatise of Baker and Cury frames the discussion of directors as agents, trustees and officers held to "the extreme measure of candour, unselfishness and goodwill." - The Allahabad High Court's decision in the Life Insurance Corporation v. Haridas Mundhra litigation is treated as a major doctrinal development: courts may treat parent and subsidiary as a single enterprise and hold a holding company's directors liable for subsidiary losses caused by misfeasance. - Petigara is openly critical of the new Tribunal and the Board of Company Law Administration replacing the Company Law Department; he sees the ouster of High Court jurisdiction in favour of administrative tribunals as constitutionally regressive. - Enhanced Reserve Bank powers over banking-company directors under the Banking Laws (Miscellaneous Provisions) Act 1963 — including appointment, removal, and the new Section 388B Central Government removal power — are presented as further restrictions on directors' rights. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] RISING PRICES, BLACK MONEY AND DEMONETISATION URL: https://indianliberals.in/primary-works/rising-prices-black-money-and-demonetisation-prof-b-p-adarkar-october-14-1973/ ### Summary Prof. B. P. Adarkar — formerly Economic Adviser in the Ministries of Labour, Finance and External Affairs and later Minister at the Indian Embassy in Bonn — opens this 1973 pamphlet with a deliberately provocative summary of his conclusion: rising prices have not caused black money, black money has not caused rising prices, and demonetisation is no remedy for either. The address, delivered to the Forum of Free Enterprise on 3 September 1973, is structured around three sections that take up each phenomenon in turn. Drawing on the Wanchoo Committee report on Direct Taxes and Black Money, he reads the Government's habit of blaming hoarders, smugglers, tax-evaders and droughts as a way of dodging its own responsibility for deficit financing, profligate Plan expenditure, the wheat and rice takeover misadventure, the Permit Raj of licences and controls, and a tax structure whose 97.75 per cent marginal rate makes evasion almost rational. The second section turns to black money itself.… ### Body # RISING PRICES, BLACK MONEY AND DEMONETISATION *By Prof. B. P. ADARKAR* ## Summary Prof. B. P. Adarkar — formerly Economic Adviser in the Ministries of Labour, Finance and External Affairs and later Minister at the Indian Embassy in Bonn — opens this 1973 pamphlet with a deliberately provocative summary of his conclusion: rising prices have not caused black money, black money has not caused rising prices, and demonetisation is no remedy for either. The address, delivered to the Forum of Free Enterprise on 3 September 1973, is structured around three sections that take up each phenomenon in turn. Drawing on the Wanchoo Committee report on Direct Taxes and Black Money, he reads the Government's habit of blaming hoarders, smugglers, tax-evaders and droughts as a way of dodging its own responsibility for deficit financing, profligate Plan expenditure, the wheat and rice takeover misadventure, the Permit Raj of licences and controls, and a tax structure whose 97.75 per cent marginal rate makes evasion almost rational. The second section turns to black money itself. Adarkar carefully distinguishes black money — currency held outside the banking system to finance the parallel economy — from black wealth, the land, gold, jewellery, benami deposits and housing into which concealed income has already been converted. He argues that this distinction is fatal to the demonetisation case: by the time a freeze on 100-rupee notes takes effect, the real holders have long since switched into assets, and middle-class people holding rupee notes for ordinary purposes end up bearing the cost. Citing the Wanchoo Committee's estimates of black income at Rs. 2,350–3,080 crores and noting that the Committee's confidential demonetisation recommendation in its Interim Report was deliberately not pursued in its Final Report, he warns that a sudden withdrawal of nearly half the rupee currency would damage confidence in the Indian currency abroad and shake the banking system at home. The third section lays out Adarkar's positive programme. Stop deficit financing absolutely. Drastically reduce income tax to a maximum of 75 per cent, with no adjustment at the lower end, and raise the exemption limit to Rs. 7,500 or Rs. 10,600 — citing France's post-war decision to cut its income tax below 33⅓ per cent, after which evasion and black money 'almost disappeared.' Abolish the Wealth Tax. Dismantle the licensing and controls regime. Demand surrender of 90 per cent of black money for white money by 1 April 1974, after which undeclared assets would be confiscated, citing President Marcos's anti-corruption drive in the Philippines as a precedent. Wind up the entire Five-Year-Plan apparatus, restricting the State to 'main nation-building functions' such as transport, technical education, population control and aerial navigation, and let private enterprise and the public sector alike grow freely. The pamphlet is bracketed by two marginalia: Eugene Black on accepting private enterprise as 'an affirmative good,' and the late A. D. Shroff's aphorism that 'Free Enterprise was born with man and shall survive as long as man survives.' ## Key points - Thesis: rising prices, black money and demonetisation are three distinct problems with distinct causes and remedies — collapsing them produces bad policy. - Deficit financing — Rs. 1,278 crores in 1972–73 alone — is named the 'most potent cause' of Indian inflation, with the wheat and rice takeovers, the Permit Raj and high punitive taxation as compounding factors. - The Wanchoo Committee on Direct Taxes and Black Money diagnosed four arms of policy (prevention, recovery, tax assessment, evasion) but had its central demonetisation recommendation, confidential to the Interim Report, dropped from the Final Report. - A 97.75% top marginal income-tax rate, Adarkar argues, makes the net profit on concealment 'as much as 4,300 per cent of the after-tax income' — France's post-war cut to below 33⅓% made evasion and black money 'almost disappear' without revenue loss. - The wheat takeover collected only 4.3 of 8.5 million tonnes — Adarkar warns the Government not to 'rush into another bungle over the Rice trade.' - Black money (currency funding the parallel economy) is conceptually separate from black wealth (assets purchased with concealed income); demonetisation only attacks the former, while the latter has already been moved into land, gold, jewellery and benami deposits. - Demonetising 100-rupee notes would be 'a wild hit at the bull's eye' that mostly catches middle-class holders, since serious black-money holders have already converted into smaller-denomination notes and assets; sudden withdrawal of nearly half the rupee currency risks a confidence and banking crisis. - Adarkar's positive programme: stop deficit financing; cap income tax at 75% with a higher exemption limit; abolish the Wealth Tax; dismantle licensing and controls; demand a 90% black-money surrender by 1 April 1974; phase out Five-Year Plans; restrict the State to nation-building infrastructure functions. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] RETHINKING ON PUBLIC SECTOR URL: https://indianliberals.in/primary-works/rethinking-on-public-sector-september-10-1970/ ### Summary Rethinking on Public Sector is a 1970 Forum of Free Enterprise booklet — issued by the Bombay-based classical-liberal organisation founded by A. D. Shroff — that gathers the main historical, statistical and editorial materials needed to evaluate how India's expanding state-owned sector had performed since Independence. The unsigned Introduction recalls the Forum's 1956 'Manifesto' position, that monopoly of any kind, public or private, is undesirable, and frames the moment as one in which 'even those committed to the ideology of socialism' have begun to rethink the proper role of the Public Sector. The main essay, 'Public Sector in India', traces the journey from the 1948 Industrial Policy Resolution (which placed both sectors on a complementary footing) through Mr. Nehru's 1954 visit to Communist China and the Avadi declaration to the 1956 Resolution that gave the Public Sector preponderance. It documents how Central public-sector investment rose from Rs. 29 crores (5 undertakings in 1950-51) to over Rs.… ### Body # RETHINKING ON PUBLIC SECTOR ## Summary Rethinking on Public Sector is a 1970 Forum of Free Enterprise booklet — issued by the Bombay-based classical-liberal organisation founded by A. D. Shroff — that gathers the main historical, statistical and editorial materials needed to evaluate how India's expanding state-owned sector had performed since Independence. The unsigned Introduction recalls the Forum's 1956 'Manifesto' position, that monopoly of any kind, public or private, is undesirable, and frames the moment as one in which 'even those committed to the ideology of socialism' have begun to rethink the proper role of the Public Sector. The main essay, 'Public Sector in India', traces the journey from the 1948 Industrial Policy Resolution (which placed both sectors on a complementary footing) through Mr. Nehru's 1954 visit to Communist China and the Avadi declaration to the 1956 Resolution that gave the Public Sector preponderance. It documents how Central public-sector investment rose from Rs. 29 crores (5 undertakings in 1950-51) to over Rs. 3,500 crores (86 undertakings) by 1968-69, before sequentially presenting and rebutting four standard arguments for the Public Sector: capital mobilisation, the 'commanding heights' doctrine, the breaking up of private economic concentrations, and the social-welfare motive. The rebuttal draws on Mahalanobis's own job-creation figures (which favour agriculture over heavy industry), on Christopher Mayhew's disillusionment with British nationalisation, on a 'Nationalisation in France and Italy' study of bureaucratic 'private empires', and on the gradual shift back towards markets in Sweden, Soviet Russia, and even Maoist China. The Forum's pragmatic prescription: insist on at least a 10 per cent minimum return, consolidate before expanding, follow Andhra Pradesh's Rajamundhry paper-mill model of selling controlling stakes to private operators, list shares publicly, grant complete autonomy, and reject the idea of a 'committed bureaucracy'. The second half reproduces editorial and reportorial materials that corroborate the case. Dr. Raj K. Nigam's valedictory editorial in Lok Udyog — the Bureau of Public Enterprises' own journal — concedes that the failures were 'not inevitable' and that 'socialism is on trial' in these enterprises. Press dispatches from the Times of India, Economic Times, Hindustan Times and Gujarat Herald document the Parliamentary Committee on Public Undertakings' alarm at sub-15-per-cent capacity utilisation in Bharat Heavy Electricals, Hindustan Machine Tools, the Fertiliser Corporation and other flagships; Dr. M. Chenna Reddy's call for a statutory set-up; Morarji Desai's verdict that the LIC had 'belied hopes'; and a Bhubaneswar expert team's finding that none of Orissa's state-owned undertakings had produced results commensurate with investment. Throughout, the booklet draws a sharp line between the loss-making industrial Public Sector and the 'real' Public Sector — defence, law and order, judiciary, infrastructure, education, sanitation — whose neglect, the Forum argues, is the true cost of statist ambition. ## Key points - Forum's 1956 Manifesto position is restated as the booklet's frame: monopoly of any kind, whether State or private, is undesirable, and the State-owned sector must not continuously expand until it dominates the national economy. - The 1948 Industrial Policy Resolution treated State and private enterprise as complementary; the 1956 Resolution, drafted after Nehru's 1954 China visit and the Avadi session, gave the Public Sector preponderance and was the basis of the Second Five-Year Plan. - Central Public Sector investment grew from Rs. 29 crores across 5 undertakings (1950-51) to over Rs. 3,500 crores across 86 undertakings (1968-69), with Rs. 6,400 crores projected by the end of the Fourth Plan (1973-74). - The booklet lays out four arguments for the Public Sector — capital mobilisation in vicious-circle economies, the 'commanding heights' doctrine, breaking up private concentrations, and a social-good rather than profit motive — and rebuts each by reference to evolving socialist practice in Britain, Sweden, the USSR and China. - Mahalanobis's own figures are turned against the heavy-industry strategy: a crore invested in steel creates 500 jobs, in consumer goods 1,500, in agriculture 4,000 — alongside far larger additional resources generated. - Audit Report data show Central public-sector enterprises swinging from a Rs. 6.34 crore profit in 1961 to a Rs. 42.79 crore loss in 1968, with state-level units (Kerala, Mysore, State Transport) and Orissa's corporations performing worse still. - Pragmatic remedies recommended: a 10 per cent minimum return target, consolidation before new ventures, partial divestiture on the Andhra Pradesh Rajamundhry paper-mill model, complete autonomy for enterprises, and rejection of a 'committed bureaucracy'. - Dr. Raj K. Nigam's Lok Udyog editorial concedes that the unsatisfactory performance was 'not inevitable' and that 'socialism is on trial' in these enterprises, while press cuttings (Parliamentary Committee findings, LIC, Orissa, Punjab) corroborate the diagnosis with concrete data. - A closing distinction is drawn between the 'real' Public Sector — defence, law and order, judiciary, infrastructure, education, drinking water, sanitation — and the industrial Public Sector that is crowding it out. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] ROLE OF FINANCIAL INSTITUTIONS IN ECONOMIC DEVELOPMENT URL: https://indianliberals.in/primary-works/role-of-financial-institutions-in-economic-development-n-n-pai-may-12-1983/ ### Summary N. N. Pai, then Chairman of the Industrial Development Bank of India, uses this Murarji J. Vaidya Memorial Lecture (delivered 18 January 1983, published as a Forum of Free Enterprise booklet) to survey India's network of term-lending financial institutions and argue for the next stage of their evolution. He traces the institutional architecture that grew up alongside the Five Year Plans — the Industrial Finance Corporation of India (IFCI), the State Financial Corporations (SFCs), the Industrial Credit and Investment Corporation (ICICI), IDBI as the apex coordinating body, the Unit Trust of India (UTI), the State Industrial Development Corporations (SIDCs) and the Industrial Reconstruction Corporation (IRCI) — and credits this multiplicity with quickening industrial growth in regions and sectors that earlier capital markets had failed to reach. The lecture's quantitative backbone reports that aggregate term-finance sanctions rose from Rs. 254 crores in 1970-71 to Rs. 3,130 crores in 1981-82, with cumulative sanctions of Rs. 14,916.5 crores catalysing some Rs. 25,500 crores of investment and around 32 lakh new jobs.… ### Body # ROLE OF FINANCIAL INSTITUTIONS IN ECONOMIC DEVELOPMENT *By N.N. Pai* ## Summary N. N. Pai, then Chairman of the Industrial Development Bank of India, uses this Murarji J. Vaidya Memorial Lecture (delivered 18 January 1983, published as a Forum of Free Enterprise booklet) to survey India's network of term-lending financial institutions and argue for the next stage of their evolution. He traces the institutional architecture that grew up alongside the Five Year Plans — the Industrial Finance Corporation of India (IFCI), the State Financial Corporations (SFCs), the Industrial Credit and Investment Corporation (ICICI), IDBI as the apex coordinating body, the Unit Trust of India (UTI), the State Industrial Development Corporations (SIDCs) and the Industrial Reconstruction Corporation (IRCI) — and credits this multiplicity with quickening industrial growth in regions and sectors that earlier capital markets had failed to reach. The lecture's quantitative backbone reports that aggregate term-finance sanctions rose from Rs. 254 crores in 1970-71 to Rs. 3,130 crores in 1981-82, with cumulative sanctions of Rs. 14,916.5 crores catalysing some Rs. 25,500 crores of investment and around 32 lakh new jobs. Against this performance Pai sets the Sixth Plan's funding gap: he estimates that the private corporate sector will need to mobilise Rs. 7,000–8,000 crores from external sources, and that conventional government and bond-market support is constrained by budgetary pressures and a stretched Statutory Liquidity Ratio. His prescriptions push the financial institutions toward a more market-oriented role: tap concessional foreign borrowings while debt-service ratios remain favourable, deepen the secondary market for non-convertible debentures through the LIC-UTI-GIC repurchase scheme, and use convertibility and pricing reforms to revive the primary equity market — without resorting to what entrepreneurs feared as 'back-door nationalisation'. Roughly 41 per cent of cumulative assistance, he reports, has been routed to backward areas, and IDBI is now coordinating Technical Consultancy Organisations to seed industry in the 87 'No Industry Districts'. The lecture closes with a sober note on industrial sickness — an RBI study finding 52 per cent of sick units suffered from management, not financial, deficiencies — and warns against treating institutional finance as a panacea for badly run firms. ## Key points - Frames financial institutions as 'a fulcrum on which the process of economic growth rests heavily', built up alongside the Five Year Plans as a deliberate break with the pre-Plan stagnation. - Maps the institutional ecosystem — IFCI, SFCs, ICICI, IDBI (apex, since 1964), UTI, SIDCs, IRCI — and credits multiplicity with reaching small/medium units and backward regions that earlier markets missed. - Reports aggregate term-finance sanctions rising from Rs. 254 crores (1970-71) to Rs. 3,130 crores (1981-82); cumulative sanctions of Rs. 14,916.5 crores have catalysed an estimated Rs. 25,500 crores of investment and around 32 lakh jobs. - Describes consortium-financing reforms — common appraisal, lead-institution model, single-disbursement window, participation certificates — that have largely eliminated entrepreneurs' fears of dealing with multiple lenders. - Argues that with budget and SLR ceilings constraining domestic public funds, the institutions must lean more on foreign commercial borrowings (debt-service ratio is around 10 per cent) and on a deeper capital market for non-convertible debentures and equity. - Defends the 1980 convertibility guidelines (cap at 40 per cent of share capital, no convertibility under Rs. 1 crore) and explicitly denies that conversion is a 'back-door nationalisation' device — institutions will assume control only in mismanaged or defaulting units. - About 41 per cent (Rs. 5,553 crores) of cumulative assistance has gone to backward-area units; IDBI is using Technical Consultancy Organisations to identify viable projects in the 87 'No Industry Districts'. - Treats industrial sickness as principally a management problem — citing an RBI finding that 52 per cent of sick units fail on management — and resists the idea that finance alone can rescue badly run enterprises. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] ROLE OF FREE ENTERPRISE IN SECOND PLAN URL: https://indianliberals.in/primary-works/role-of-free-enterprise-c-l-gheevala-january-1-1970/ ### Summary C. L. Gheevala's pamphlet, issued by the Forum of Free Enterprise in Bombay, is a sustained critique of the place assigned to private enterprise in India's Second Five-Year Plan. Writing in the immediate aftermath of the Plan's parliamentary approval and the Industrial Policy Resolution of April 1956, Gheevala argues that the 'socialist pattern of society' enunciated at the Avadi session of the Indian National Congress has hardened into a programme of nationalisation and Public Sector expansion that progressively confines free enterprise to a residual third category of industry. He marshals the Plan's own allocation figures — Rs. 4,800 crores in the public sector against only Rs. 2,400 crores for organised private investment, a ratio of 61:39 — to show how sharply the centre of gravity has shifted from the First Plan's 50:50 balance. Against this, Gheevala mounts a defence of the record of Free Enterprise during the First Plan.… ### Body # ROLE OF FREE ENTERPRISE IN SECOND PLAN *By C. L. Gheevala* ## Summary C. L. Gheevala's pamphlet, issued by the Forum of Free Enterprise in Bombay, is a sustained critique of the place assigned to private enterprise in India's Second Five-Year Plan. Writing in the immediate aftermath of the Plan's parliamentary approval and the Industrial Policy Resolution of April 1956, Gheevala argues that the 'socialist pattern of society' enunciated at the Avadi session of the Indian National Congress has hardened into a programme of nationalisation and Public Sector expansion that progressively confines free enterprise to a residual third category of industry. He marshals the Plan's own allocation figures — Rs. 4,800 crores in the public sector against only Rs. 2,400 crores for organised private investment, a ratio of 61:39 — to show how sharply the centre of gravity has shifted from the First Plan's 50:50 balance. Against this, Gheevala mounts a defence of the record of Free Enterprise during the First Plan. He credits private industry with carrying 71% of the rise in net output and 90% of the increase in industrial and mining production, despite hostile official rhetoric, an 'inflexible labour legislation' regime, and what he calls a 'climate of distinctness' created by heavy taxation. New industries — bicycles, automobiles, machine tools, non-ferrous alloys, chemicals, ball bearings — emerged from private initiative outside the Plan, and the Indian Tube Company, steel cast foundries and railway-wagon manufacture are cited as cases in point. He singles out the then Minister for Commerce and Industry, Shri T. T. Krishnamachari, whose Madurai remark that 'private enterprise has failed me' Gheevala finds incomprehensible given the World Bank Mission's own favourable assessment and the testimony of the Planning Commission's periodical reports. The pamphlet's deeper argument is political. Gheevala warns that a Public Sector entrusted with the bulk of investible resources will not only crowd out private requirements but will, through nationalisation of Air Transport and Imperial Bank, amendments to Article 31, drastic changes in the Company Law and the establishment of the State Trading Corporation, drift towards 'State Capitalism' and a 'New Despotism'. Quoting the Socialist leader Shri J. B. Kripalani's Lok Sabha speech of 8 September 1956 and R. H. Crossman on the menace of a 'vast centralised State bureaucracy', he insists that the real moral content of socialism is a protest against injustice and inequality, not the construction of a Leviathan that threatens freedom. The closing pages plead for a genuine Mixed Economy of co-existence in which the Private Sector functions under over-all regulation 'without its initiative being smothered or its incentives destroyed', and for Free Enterprise itself to discharge fresh obligations to the community so as to make the Second Plan succeed. ## Key points - The Second Five-Year Plan, shaped by the 'socialist pattern of society' resolved at the Avadi session of the Indian National Congress, has shifted the public-to-private investment ratio from 50:50 in the First Plan to 61:39, with Centre and State outlays of Rs. 4,800 crores against organised private investment of Rs. 2,400 crores. - The Industrial Policy Resolution of April 1956 confines free enterprise to a third, residual category of industries and, in Gheevala's reading, treats private initiative as a stop-gap rather than a partner. - Despite hostile rhetoric, private business carried roughly 90% of the increase in industrial and mining output and 71% of the rise in net output during the First Plan, and pioneered new lines — automobiles, machine tools, non-ferrous alloys, chemicals, ball bearings, the Indian Tube Company's steel tubes — outside the Plan's own schemes. - Gheevala targets Shri T. T. Krishnamachari's Madurai claim that 'private enterprise has failed me', arguing that the World Bank Mission's report and the Planning Commission's own findings flatly contradict the charge. - He identifies a financing gap of nearly Rs. 1,800 crores in the Second Plan and warns that drawing on the 'common reservoir' of savings to feed the Public Sector will leave private requirements starved. - Recent steps — nationalisation of Air Transport and the Imperial Bank, amendments to Article 31 of the Constitution, changes in Life Assurance, the Company Law and the establishment of the State Trading Corporation — are presented as evidence of a drift toward 'State Capitalism' and a 'New Despotism'. - Citing Shri J. B. Kripalani's Lok Sabha speech of 8 September 1956 and R. H. Crossman on the dangers of a 'vast centralised State bureaucracy', Gheevala argues that the moral core of socialism is protest against injustice, not Leviathan-building. - The pamphlet's positive prescription is a genuine Mixed Economy of co-existence, with private enterprise functioning under regulation but with intact incentives, and with Free Enterprise itself accepting new obligations to community welfare to make the Second Plan succeed. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] Role of Free Enterprise URL: https://indianliberals.in/primary-works/role-of-free-enterprises-by-sn-haji-october-2-1956/ ### Summary S. N. Haji's short article, reprinted from The Times of India of 2 October 1956 and reissued by the Forum of Free Enterprise, builds a historical case for Indian private enterprise by walking through the survival and revival of the country's modern shipping industry. He argues that shipping is the field in which Indian nationals have given the best account of themselves under free enterprise, despite the deliberate hostility of British policy: Navigation Acts that strangled the older Indian sail and ship-building traditions, a controlling British bureaucracy in the post-sail era, and a foreign-owned coastal fleet propped up by an imperial government. The central narrative is the founding of the Scindia Steam Navigation Company in 1919, which Haji presents as the economic counterpart of the political independence movement.… ### Body # Role of Free Enterprise *By By S. N. HAJI* ## Summary S. N. Haji's short article, reprinted from The Times of India of 2 October 1956 and reissued by the Forum of Free Enterprise, builds a historical case for Indian private enterprise by walking through the survival and revival of the country's modern shipping industry. He argues that shipping is the field in which Indian nationals have given the best account of themselves under free enterprise, despite the deliberate hostility of British policy: Navigation Acts that strangled the older Indian sail and ship-building traditions, a controlling British bureaucracy in the post-sail era, and a foreign-owned coastal fleet propped up by an imperial government. The central narrative is the founding of the Scindia Steam Navigation Company in 1919, which Haji presents as the economic counterpart of the political independence movement. He recounts the practical obstacles confronting its sponsors — Narottam Morarjee, Walchand Hirachand, Lallubhai Samaldas and Kilachand Devchand — including the absence of shipyards, trained crews, marine engineers and repair facilities, and the readiness of the principal British rival to absorb Scindia by buying out its shareholders, an offer the company rejected outright. He then catalogues the rate war and rebate practices used by entrenched British lines to choke off Indian competitors, listing five small Indian companies on the east and west coasts that perished before Scindia's tenacity, backed by the patriotic action of the wider Indian public, broke the British coastal monopoly. Haji closes by tallying what Indian private enterprise has done since the end of the Second World War: new tanker, tramp and liner services in the Persian Gulf and U.K./Continent trades, companies such as the India Steamship of Calcutta, the Bharat Line of Saurashtra and the Great Eastern of Bombay, and the lifting of fleet tonnage from a wartime low of 75,000 gross tons to 500,000 with another 100,000 on order — a figure he highlights as already meeting the First Five-Year Plan's shipping target. The piece thus reads simultaneously as economic history, as nationalist memory, and as a pointed Forum of Free Enterprise tract demonstrating that the Plan's own targets are being met by private capital rather than the state. ## Key points - Frames Indian shipping as the strongest historical proof that Indian nationals can succeed under free enterprise. - Argues that the decline of pre-modern Indian shipping was the result of deliberate British policy — Navigation Acts, denial of steam and iron, and the British bureaucracy's refusal to let an Indian modern marine arise. - Treats the 1919 founding of the Scindia Steam Navigation Company, with Rs. 4.5 crores of paid-up capital, as the economic counterpart of the Indian political independence movement. - Names Narottam Morarjee, Walchand Hirachand, Lallubhai Samaldas and Kilachand Devchand as the sponsors of Scindia and recounts the absence of shipyards, repair shops and trained Indian marine personnel they had to overcome. - Describes how the principal British rival tried to absorb Scindia by buying out shareholders and, when refused, mounted a sustained rate war and rebate system that destroyed five smaller Indian coastal lines. - Reports post-1945 expansion of Indian shipping into tanker, tramp and liner trades, listing India Steamship of Calcutta, Bharat Line of Saurashtra and Great Eastern of Bombay among new entrants. - Quantifies the recovery: fleet tonnage raised from a World War II low of 75,000 gross tons to 500,000, with 100,000 more on order — meeting the First Five-Year Plan target through private effort. - Carries an implicit polemical message — appropriate to a Forum of Free Enterprise pamphlet in 1956 — that planning targets are being delivered by private capital, not state monopoly. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] Role of Intellectuals in Public Life URL: https://indianliberals.in/primary-works/role-of-intellectuals-in-public-life-prof-p-g-mavalankar-october-1979/ ### Summary This booklet reproduces the 14th A. D. Shroff Memorial Lecture, delivered by Prof. P. G. Mavalankar under the auspices of the Forum of Free Enterprise in Bombay on 30th October 1979. Opening with a tribute to A. D. Shroff as a rare individual whose clarity of thought, hard work and vision made him an effective crusader on the National Planning Committee and the Bombay Plan, Mavalankar argues that the real Shroff legacy is the discipline of expressing one's views firmly, without waiting for authority's permission. He insists, against the prevailing Indian habit, that public life is far vaster than political life — and that India's tragedy is the conflation of the two, which has polluted public life with the venalities of party politics. Mavalankar then anatomises the intellectual. Drawing on Pericles, Lincoln, Mao Tse-Tung, J. S.… ### Body # Role of Intellectuals in Public Life *By Prof. P. G. Mavalankar* ## Summary This booklet reproduces the 14th A. D. Shroff Memorial Lecture, delivered by Prof. P. G. Mavalankar under the auspices of the Forum of Free Enterprise in Bombay on 30th October 1979. Opening with a tribute to A. D. Shroff as a rare individual whose clarity of thought, hard work and vision made him an effective crusader on the National Planning Committee and the Bombay Plan, Mavalankar argues that the real Shroff legacy is the discipline of expressing one's views firmly, without waiting for authority's permission. He insists, against the prevailing Indian habit, that public life is far vaster than political life — and that India's tragedy is the conflation of the two, which has polluted public life with the venalities of party politics. Mavalankar then anatomises the intellectual. Drawing on Pericles, Lincoln, Mao Tse-Tung, J. S. Mill, Adlai Stevenson, Tagore, Einstein and Gandhi, he sketches the intellectual as a rare commodity who thrives only in a climate of liberty: intelligent but not clever, sane but not sullen, idealist but not romanticist; possessed of imagination, integrity, independence and incorruptibility; vigilant, single-minded, a championing 'live-wire' even for lost causes. He distinguishes intellectuals from the wider intelligentsia, warns against 'pseudo-intellectuals' and 'fake intellectuals', and dwells at length on the duty to 'go alone' on grounds of conscience, citing Gandhi's reply to Julian Huxley that the inseparability of rights and duties is best taught by an illiterate mother. The second half traces the concept of public life from the ganatantras of pre-Buddhist India and the street-corner Socratic assembly of Athens through Lord Bryce's 'Ideal Democracy' to Gopal Krishna Gokhale's 1910 dictum that 'our public life is weak, because our public spirit is weak'. Against this backdrop Mavalankar indicts the thirty-two years since Independence as a slow erosion in which educated classes have drifted into 'Yesmanship' and a cosy proximity to the Establishment — a weakness most cruelly exposed during the Emergency of 1975-77, when intellectuals failed to show the courage of their convictions. His prescription is unambiguous: intellectuals must serve as catalyst for change and as non-conformist critic, ready to stand for elective office, willing to live dangerously, and committed to freedom of thought and expression as the means of toning up public life. He closes by holding up Jayaprakash Narayan's life of dynamism, daring and dedication as the model Indian intellectuals must follow if they are not to fail the country or their own conscience. ## Key points - Frames the lecture as a memorial tribute to A. D. Shroff (1899-1965), founder of the Forum of Free Enterprise, and to his insistence on expressing views frankly regardless of authority. - Argues a sharp distinction between 'public life' (broader, ideal-bearing) and 'political life' (party-bound) and warns that India is dangerously conflating the two. - Defines the intellectual through a series of paradoxical pairings (intelligent but not clever, sane but not sullen, idealist but not romanticist) and four essential qualities: imagination, integrity, independence and incorruptibility. - Distinguishes true intellectuals (rare, principled, willing to 'go alone') from a wider intelligentsia and from 'pseudo-' or 'fake' intellectuals. - Traces the concept of public life through ancient Greece (Socratic assembly), pre-Buddhist Indian ganatantras, Lord Bryce's Ideal Democracy, and Gokhale's 1910 lecture on public spirit. - Reads the Emergency of 1975-77 as evidence that the educated classes lack the courage of their convictions and have drifted into 'Yesmanship' alongside the Establishment. - Prescribes a dual role for intellectuals — catalyst for change and non-conformist critic — including willingness to stand for elective office and to 'live dangerously'. - Holds up Jayaprakash Narayan as the inspiring contemporary model of dynamism, daring and dedication that Indian intellectuals must emulate. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] ROLE OF MANAGEMENT IN PRODUCTIVITY MOVEMENT URL: https://indianliberals.in/primary-works/role-of-management-in-productive-movement-s-anantharamakrishnan-october-7-1960/ ### Summary S. Anantharamakrishnan's pamphlet reproduces the text of a speech delivered in Madras under the auspices of the Madras Productivity Council on June 28, 1960, and reissued by the Forum of Free Enterprise. He frames productivity as a national-development imperative: with capital, foreign exchange, plant, and trained manpower all in acutely short supply, and the country's population projected at 527 million by 1971, India cannot afford to multiply plants before extracting the maximum output from those already running. Productivity, he insists, is no longer 'ivory-tower speculation' but a 'new way of life' in industry. The core argument is that responsibility for the productivity drive sits with three parties — Government, employers, and workers — but the operative burden falls on management. Anantharamakrishnan rejects the common reflex of equating productivity with labour productivity alone, calling it 'basically wrong'.… ### Body # ROLE OF MANAGEMENT IN PRODUCTIVITY MOVEMENT *By S. ANANTHARAMAKRISHNAN* ## Summary S. Anantharamakrishnan's pamphlet reproduces the text of a speech delivered in Madras under the auspices of the Madras Productivity Council on June 28, 1960, and reissued by the Forum of Free Enterprise. He frames productivity as a national-development imperative: with capital, foreign exchange, plant, and trained manpower all in acutely short supply, and the country's population projected at 527 million by 1971, India cannot afford to multiply plants before extracting the maximum output from those already running. Productivity, he insists, is no longer 'ivory-tower speculation' but a 'new way of life' in industry. The core argument is that responsibility for the productivity drive sits with three parties — Government, employers, and workers — but the operative burden falls on management. Anantharamakrishnan rejects the common reflex of equating productivity with labour productivity alone, calling it 'basically wrong'. He lays out seven cardinal requirements of modern industrial management — scientific methods, productivity techniques, good industrial relations, sound personnel policy, effective communication, fair sharing of productivity gains, and industrial research — and devotes successive sections to each. Management, he argues, is no longer an inherited family interest but a profession that must be taught and learnt; supervisory and middle-management training are the structural backbone of any productivity drive. On industrial relations he leans heavily on documents from the International Confederation of Free Trade Unions and ILO expert committees: workers must be assured a share of productivity gains — through higher wages, lower prices, shorter hours or better conditions — and the precise form is a matter for collective bargaining. He acknowledges that India's 'multiplicity of trade unions in one industry' is a 'bane' to joint consultation, and points to the United Kingdom's last decade as a hopeful counter-example. The booklet closes with the formulation that productivity becomes 'a measure of managerial efficiency', and the publication is bookended by epigraphs from Eugene Black of the World Bank ('People must come to accept private enterprise not as a necessary evil, but as an affirmative good') and A. D. Shroff ('Free Enterprise was born with man and shall survive as long as man survives') — Forum of Free Enterprise framing that locates the speech within its broader liberal-economic agenda. ## Key points - Productivity Movement in India is only two years old (1960) and is positioned as an instrument of national development at a moment of capital, foreign-exchange and manpower scarcity. - Cites Planning Commission estimate of 1.91% annual population growth and a projected 527 million Indians by 1971 to argue against expanding plant before fully utilising existing capacity. - Rejects the equation of productivity with labour productivity alone — calls focusing 'all attention on the worker' basically wrong and shifts the spotlight onto managerial competence. - Enumerates seven cardinal requirements of modern industrial management: scientific methods, productivity techniques, industrial relations, personnel policy, communication, sharing of gains, and research. - Argues that management has shifted from an inherited family interest to a learned profession requiring formal training, with middle-management and supervisors as 'the backbone of the industry'. - On sharing of productivity gains, defers to ILO expert-committee reasoning that the share can take the form of higher wages, lower prices, shorter hours or better working conditions — to be settled by collective bargaining. - Diagnoses India's 'multiplicity of trade unions in one industry' as the principal bane of joint consultation, while invoking the United Kingdom's last ten years as evidence that co-operation can work. - Closes by reframing productivity as 'a measure of managerial efficiency', and the Forum of Free Enterprise brackets the speech with Eugene Black and A. D. Shroff epigraphs defending private enterprise. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] Role of Life Insurance in National Economy URL: https://indianliberals.in/primary-works/role-of-life-insurance-in-national-economy-mr-era-sezhiyan-october-28-1985/ ### Summary Era Sezhiyan's 1985 A. D. Shroff Memorial Lecture, delivered in Bombay on 26 April 1985 and published by the A. D. Shroff Memorial Trust, evaluates the record of nationalised life insurance in India three decades after the 1956 nationalisation. Drawing on his work as Chairman of the LIC Review Committee (1979–80) and his long parliamentary career, Sezhiyan organises his argument around three planks: the benefit of life insurance for individuals and the country, the objectives and performance of the nationalised industry, and the attitude of the Government with concrete suggestions for improvement. The early sections explain how life insurance evolved from short-term risk cover into long-term endowment plans that bundle savings with risk protection, and then situate insurance within India's anaemic social-welfare provision.… ### Body # Role of Life Insurance in National Economy *By ERA SEZHIYAN* ## Summary Era Sezhiyan's 1985 A. D. Shroff Memorial Lecture, delivered in Bombay on 26 April 1985 and published by the A. D. Shroff Memorial Trust, evaluates the record of nationalised life insurance in India three decades after the 1956 nationalisation. Drawing on his work as Chairman of the LIC Review Committee (1979–80) and his long parliamentary career, Sezhiyan organises his argument around three planks: the benefit of life insurance for individuals and the country, the objectives and performance of the nationalised industry, and the attitude of the Government with concrete suggestions for improvement. The early sections explain how life insurance evolved from short-term risk cover into long-term endowment plans that bundle savings with risk protection, and then situate insurance within India's anaemic social-welfare provision. Citing the World Bank's World Development Report (1984), Sezhiyan notes that India devotes only 4.2 per cent of central government expenditure to social welfare against 30–60 per cent in countries with twenty to fifty times its per-capita GNP, and argues that life insurance therefore has a heightened role to play in providing security to the "teeming millions of disadvantaged people". A detailed chronology of life insurance in India — from the Oriental Life Assurance Co. (1818) through the Insurance Acts of 1912, 1928 and 1938 to the 1956 nationalisation — is anchored by long quotations from C. D. Deshmukh's broadcast and his speech moving the Life Insurance (Emergency Provisions) Bill, in which the Finance Minister framed nationalisation as a vehicle for "more effective mobilisation of the people's savings". Sezhiyan accepts this premise but proceeds, in the "Progress of Nationalised Insurance" and "Failure to Mobilise" sections, to set the LIC's headline successes (premium income growing from Rs. 278 crore in 1957 to an estimated Rs. 5,500 crore in 1984-85; life fund rising from Rs. 409 crore to Rs. 9,800 crore) against a damning record on its stated objectives. In the rendered pages he documents a decline in the rural share of new business from 38.5 per cent (1963) to 35.1 per cent (1984); a 41.41 per cent lapse-and-surrender ratio in 1983-84; an unstable agency cadre in which roughly 45,000 agents leave each year; and, most strikingly, a fall in life insurance's share of household financial savings from 10.6 per cent in 1970-71 to 7.3 per cent in 1983-84 even as bank deposits rose from 41.3 to 46.6 per cent. Sezhiyan, declaring himself a supporter of nationalisation in principle, indicts the "ineptitude of the management and the inexcusable negligence of the Government" for defeating LIC's social and financial mandate. The chunk ends mid-discussion of the structural reasons why nationalised insurance cannot compete with other savings instruments. ## Key points - Sezhiyan delivers the 1985 A. D. Shroff Memorial Lecture organised around three questions: benefits of life insurance, the LIC's performance, and the Government's attitude — drawing on his chairmanship of the LIC Review Committee (1979–80). - He explains the evolution of life insurance from short-term risk cover to the with-profit Endowment Assurance, whose premium has four components — savings, risk, expenses, and bonus loading — illustrated with an actuarial breakdown of a 20-year policy issued at entry age 30. - Citing the World Bank's World Development Report (1984), he contrasts India's 4.2 per cent of central expenditure on social welfare with 29–60 per cent in Australia, Canada, West Germany, the USA and Switzerland, arguing this leaves insurance with a disproportionate burden of providing security. - He chronicles regulatory history from the Oriental Life Assurance Co. (1818) through the Acts of 1912, 1928 and 1938 to nationalisation in 1956, anchored by Finance Minister C. D. Deshmukh's articulation of nationalisation as a tool for mobilising household savings. - Headline LIC growth figures are recited — new business from Rs. 278 crore (1957) to an estimated Rs. 5,500 crore (1984-85); business-in-force from Rs. 1,374 crore to Rs. 30,266 crore; life fund from Rs. 409 crore to Rs. 9,800 crore. - Against these, Sezhiyan documents failures: the rural share of new business has slipped from 38.5 per cent (1963) to 35.1 per cent (1984); only 2.3 per cent of the self-employed and under 10 per cent of insurable males are covered; lapses and surrenders ran at 41.41 per cent in 1983-84. - Despite endorsing nationalisation in principle, he calls out "the ineptitude of the management and the inexcusable negligence of the Government" as threatening to defeat the very purpose of LIC. - He demonstrates the failure to mobilise savings: life insurance's share of household financial savings has fallen from 10.6 per cent in 1970-71 to 7.3 per cent in 1983-84, while bank and non-bank deposits rose from 41.3 to 46.6 per cent in the same period. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] Role of Technology in Enhancing Quality of Customer Service in Banks URL: https://indianliberals.in/primary-works/role-of-technology-in-enhancing-of-customer-service-in-banks-m-d-mallya-june-5-2009/ ### Summary M. D. Mallya, then Chairman and Managing Director of Bank of Baroda, uses this Forum of Free Enterprise booklet — the text of his Chief Guest address at the Fifth M.R. Pai Memorial Award function in Mumbai on 30th June 2009 — to argue that information and communication technology has become the central enabler of quality customer service in Indian banking. He frames customer confidence as the foundation of any banking system and identifies three dimensions of service quality: accessibility (branch and virtual presence), a wide range of liability and asset products, and the human element of processing and delivery. The address traces an arc from the pre-Independence private banking system through the 1935 founding of the Reserve Bank of India, the 1969 and 1980 waves of nationalisation, and the post-1991 Narasimham Committee reforms that opened the field to new-generation private and foreign banks.… ### Body # Role of Technology in Enhancing Quality of Customer Service in Banks *By M.D. Mallya* ## Summary M. D. Mallya, then Chairman and Managing Director of Bank of Baroda, uses this Forum of Free Enterprise booklet — the text of his Chief Guest address at the Fifth M.R. Pai Memorial Award function in Mumbai on 30th June 2009 — to argue that information and communication technology has become the central enabler of quality customer service in Indian banking. He frames customer confidence as the foundation of any banking system and identifies three dimensions of service quality: accessibility (branch and virtual presence), a wide range of liability and asset products, and the human element of processing and delivery. The address traces an arc from the pre-Independence private banking system through the 1935 founding of the Reserve Bank of India, the 1969 and 1980 waves of nationalisation, and the post-1991 Narasimham Committee reforms that opened the field to new-generation private and foreign banks. Mallya documents how competition pushed Public Sector Banks to lift their delivery models — citing CAGR figures for deposit growth, Deposit-to-GDP rising to 67.8% by FY08, the migration to Core Banking Solutions (67% of branches), the spread of around 35,000 off-site ATMs, the IDRBT-built INFINET, and newer rails such as RTGS, NEFT, ECS, NFS and Cheque Truncation. He explains how Core Banking turns the branch customer into a customer of the bank as a whole, and surveys benefits including anywhere/anytime banking, MIS-driven customisation, and remote back-office automation. The second half of the booklet takes up unfinished business: financial inclusion in a country where most villagers still bank with indigenous moneylenders; the need for low-cost, multilingual, energy-light and biometric ATM solutions; the integration challenges of obsolescence, security, phishing, and the cost asymmetry between manual (Rs. 45–50) and electronic (Rs. 15 ATM, Rs. 4 e-banking) transactions; and the rising customer expectations created by globalisation. Mallya closes by inviting his audience to become partners in spreading e-banking literacy and by insisting that even as Customer Relationship Management, smart-card mobile wallets and call-centre video banking arrive, the value of personal relationship will continue to outweigh the computer — banks, he says, must deliver the right blend of both. ## Key points - Customer confidence is presented as the foundation of any banking system, with service quality decomposed into accessibility, product range, and the human element. - Mallya narrates the evolution of Indian banking through the 1935 RBI Act, the 1969 and 1980 nationalisations, the 1991 Narasimham Committee reforms, and the entry of new-generation private and foreign banks. - Quantitative evidence anchors the argument: PSBs hold 72.6% of SCB advances (March 2008), deposits grew at 19.6% CAGR FY03–FY08, and Deposit/GDP rose to 67.8% by FY08. - Core Banking Solutions, present in 67% of branches with about 35,000 off-site ATMs, are framed as a centralisation that makes each account-holder a customer of the bank rather than of a single branch. - Payment and settlement infrastructure — INFINET, RTGS, NEFT, ECS, NFS, Cheque Truncation, and CCIL platforms — is surveyed as the plumbing behind anywhere-anytime banking. - Financial inclusion is identified as the unfinished agenda: indigenous moneylenders still dominate villages, and low-cost multilingual biometric ATMs, business correspondents and mobile banking are proposed remedies. - Transaction-cost economics drives the case for migration: manual transactions cost Rs. 45–50 against Rs. 15 for ATM and Rs. 4 for e-banking, but only volume can amortise the technology investment. - Mallya warns that integration risks — obsolescence, hacking, phishing, data integrity, vendor alignment — are operational hazards that must be addressed alongside customer education, and that personal relationship will remain more valuable than computer-driven service. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] ROLE OF PRIVATE ENTERPRISE URL: https://indianliberals.in/primary-works/role-of-private-enterprises-by-thakorelal-m-desai-september-4-1956/ ### Summary Thakorelal M. Desai's article, reprinted from The Times of India of 4 September 1956 and circulated as a pamphlet by the Forum of Free Enterprise, mounts a point-by-point defence of Indian private enterprise against what Desai describes as a sustained but largely unjustified campaign by politicians and public men. The immediate provocation is a speech delivered by T. T. Krishnamachari, then Union Minister for Commerce and Industry, at the Madura-Ramnad Chamber of Commerce on 5 August 1956. Krishnamachari had levelled two allegations: that private enterprise had failed to meet the production targets set under the First Plan, and that it had shown no initiative in building new industries. Desai notes that J. R. D. Tata, as Chairman of the Tata Iron and Steel Company, had already rejected the charge in general terms, but argues that a documented rejoinder grounded in fact has become indispensable. The core of the article is an inventory of the actual record.… ### Body # ROLE OF PRIVATE ENTERPRISE *By By THAKORELAL M. DESAI* ## Summary Thakorelal M. Desai's article, reprinted from The Times of India of 4 September 1956 and circulated as a pamphlet by the Forum of Free Enterprise, mounts a point-by-point defence of Indian private enterprise against what Desai describes as a sustained but largely unjustified campaign by politicians and public men. The immediate provocation is a speech delivered by T. T. Krishnamachari, then Union Minister for Commerce and Industry, at the Madura-Ramnad Chamber of Commerce on 5 August 1956. Krishnamachari had levelled two allegations: that private enterprise had failed to meet the production targets set under the First Plan, and that it had shown no initiative in building new industries. Desai notes that J. R. D. Tata, as Chairman of the Tata Iron and Steel Company, had already rejected the charge in general terms, but argues that a documented rejoinder grounded in fact has become indispensable. The core of the article is an inventory of the actual record. Desai lists sectors — bicycles, grinding wheels, non-ferrous alloys, ship-building, automobiles, machine tools, chemicals, belting, abrasives, ball-bearings and piston rings — and argues that almost every new line of industrial development absorbed by the First Plan grew out of schemes private enterprise had itself formulated; the Government's role was to approve and accept what industry had already conceived. He invokes the Planning Commission's own admission that investment in the public sector fell short by nearly 40 per cent of its target, with only Rs. 47 crores invested against an expected Rs. 94 crores, while a substantial number of industries — bicycles, caustic soda, paper, vegetable oils, electric transformers — either fulfilled or over-fulfilled their targets in the private sector. He cites the World Bank Mission's finding that Indian business is "definitely expansion minded", and walks through the long history in which the Tariff Commission and Government repeatedly rejected Tata Iron and Steel Company's proposals to expand capacity between 1949 and 1953, and ultimately turned down its offer to build the Durgapur plant. The pamphlet's closing argument shifts from defence to indictment of the policy environment. Desai insists that the apparent under-performance of private enterprise cannot be separated from a regime of taxation, restrictions on returns to investors, and discretionary controls that he says deter risk capital. He calls upon the Forum of Free Enterprise to prepare and publish a detailed, documented rejoinder educating public opinion on the fundamentals of free enterprise, and ends with a rhetorical flourish that captures the whole essay's frame: that blaming industry for failing to deliver while binding it in restrictions is "like tying up a man in knots and blaming him for not sprinting". ## Key points - Article reprinted from The Times of India, 4 September 1956, and circulated as a Forum of Free Enterprise pamphlet from Sohrab House, Bombay. - Direct rebuttal to T. T. Krishnamachari's 5 August 1956 speech at the Madura-Ramnad Chamber of Commerce, which alleged that private enterprise had not met First Plan production targets and had shown no initiative in starting new industries. - Cites J. R. D. Tata's recent TISCO chairman's address as a first, generalised rejection of the indictment, and laments that no other industry body had yet stepped forward to defend its raison d'etre. - Lists specific industrial sectors — bicycles, grinding wheels, non-ferrous alloys, ship-building, automobiles, machine tools, chemicals, belting, abrasives, ball-bearings, piston rings — to argue that First Plan industrial development originated in schemes private enterprise had already formulated. - Invokes the Planning Commission's own report showing public-sector investment fell nearly 40 per cent short of target (Rs. 47 crores against Rs. 94 crores expected), while private-sector targets in many industries were fulfilled or over-fulfilled. - Quotes the World Bank Mission's finding that Indian private business is "definitely expansion minded" and that a substantial increase in investment is currently taking place. - Traces the Tariff Commission's repeated rejection of Tata Iron and Steel Company expansion proposals from 1949 through 1953, and the Government's later refusal to permit private enterprise to establish the Durgapur steel plant. - Calls on the Forum of Free Enterprise to issue a documented rejoinder educating public opinion on the fundamentals of free enterprise, and frames the underlying complaint as one of regulatory and fiscal constraint rather than entrepreneurial failure. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] RURAL EMPLOYMENT GUARANTEE SCHEME—TWO VIEWS URL: https://indianliberals.in/primary-works/rural-employment-guarantee-scheme-two-reviews-gangadhar-gadgil-n-g-abhyankar-15-august-1975/ ### Summary This Forum of Free Enterprise pamphlet records two opposing addresses delivered at a Bombay symposium on 28 April 1975 assessing the Maharashtra Government's Employment Guarantee Scheme (EGS), the precursor to what would later become India's national rural employment-guarantee policy. The editors frame the volume as a public-education exercise: one speaker, the economist Prof. Gangadhar Gadgil (then Economic Adviser to the Apte Group of Industries), argues that the EGS is a 'welcome and revolutionary measure' that gives concrete content to the Article 41 right to work and channels resources to the poorest rural strata. The other, N. G. Abhyankar, I.A.S. (Retd.), a former Development Commissioner and Finance Secretary of Maharashtra (then Executive Director of the All-India Manufacturers' Organisation), argues the Scheme is a costly diversion of scarce resources toward 'totally unproductive ends' and indistinguishable from earlier scarcity-relief programmes. The two essays appear back to back under a common title and are aimed at students of economics, administrators and policymakers. ### Body # RURAL EMPLOYMENT GUARANTEE SCHEME—TWO VIEWS ## Summary This Forum of Free Enterprise pamphlet records two opposing addresses delivered at a Bombay symposium on 28 April 1975 assessing the Maharashtra Government's Employment Guarantee Scheme (EGS), the precursor to what would later become India's national rural employment-guarantee policy. The editors frame the volume as a public-education exercise: one speaker, the economist Prof. Gangadhar Gadgil (then Economic Adviser to the Apte Group of Industries), argues that the EGS is a 'welcome and revolutionary measure' that gives concrete content to the Article 41 right to work and channels resources to the poorest rural strata. The other, N. G. Abhyankar, I.A.S. (Retd.), a former Development Commissioner and Finance Secretary of Maharashtra (then Executive Director of the All-India Manufacturers' Organisation), argues the Scheme is a costly diversion of scarce resources toward 'totally unproductive ends' and indistinguishable from earlier scarcity-relief programmes. The two essays appear back to back under a common title and are aimed at students of economics, administrators and policymakers. ## Essays ### I — A WELCOME MEASURE *By Prof. GANGADHAR GADGIL* Gadgil's address ('A Welcome Measure') concedes the EGS's limitations but treats it as a 'welcome and revolutionary' attempt to honour the directive principle in Article 41 of the Constitution. He traces the Scheme's growth from a Rs. 10 crore experiment in 1972 to a Rs. 50 crore programme covering rural areas and 'C'-class municipal towns, and defends its targeting logic: keeping employment rural prevents distress migration to large cities where the social cost of maintaining the unemployed is higher. He answers the standard criticisms one by one — that 'Kulaks' will obstruct it, that landlords will capture the assets, that the new cesses fall on the small salaried class, that the financial cost is understated — by arguing the surcharges are progressive within their limits, the big farmers already bear over 75 per cent of indirect taxes, and Rs. 50 crores is under 5 per cent of Maharashtra's budget. The bulk of the essay is constructive: he urges that works be done through co-operatives of small and marginal farmers and landless labourers rather than left as wage-doles, that some afforestation, percolation tanks and Khar-land bunding be designed to yield monetary returns, that administrative machinery be radically reformed (he cites his visit to the Konkan's Chiplun area, where the Koyna's water runs to waste), and — most provocatively — that participation be tied to compulsory vasectomy for those with two or more children and to literacy camps for workers' children. He closes by warning that the Scheme will either be 'the harbinger of a great social and economic revolution' or 'another avenue of waste, corruption, inflation and frustration', depending entirely on implementation. - Frames the EGS as the first serious institutional attempt to redeem the Article 41 directive on the right to work. - Defends confining the Scheme to rural and small-town areas because urban social-maintenance costs are higher and large cities already draw inter-state migrants. - Rebuts the charge that the cess on incomes above Rs. 400/month is regressive by arguing that the salaried already bear heavy indirect taxes. - Estimates the true unemployment-coverage cost at Rs. 150 crores (against the Rs. 50 crore programme), citing Professor Dandekar and Rath's earlier work. - Proposes that wage-works be organised through co-operatives of small farmers and landless labourers so the assets created (afforestation, percolation tanks, Khar-land bunding) generate monetary returns. - Calls for a 'revolution in administration' to fix the multiplicity of agencies that frustrate rural development. - Urges that EGS employment be tied to family planning (vasectomy for workers with two or more children) and to literacy classes for workers' children at camps. ### II — DIVERSION OF SCARCE RESOURCES *By N. G. Abhyankar I.A.S. (Retd.)* Abhyankar's address ('Diversion of Scarce Resources') is a closely argued administrative critique from a former Development Commissioner of Maharashtra. He stresses that the EGS is not a general employment guarantee but specifically a guarantee of non-agricultural work in the rural areas, and that the Centre and Planning Commission have so far refused to share its cost on a 50:50 basis. He organises his argument around five questions — whether the Scheme is genuinely path-breaking, whether its works produce durable assets, whether it amounts to a permanent scarcity-relief programme, whether it degenerates into 'digging holes and filling them up again', and whether the diversion of funds is justified. On the employment side, he argues that the types of works on the State's approved list — open wells, percolation tanks, contour-bunds, rural roads — have low labour-absorption per rupee and demand skilled (not unskilled) labour for completion; only contour-bunding, which the Agricultural Refinance Corporation's own field study found to add 'nil' productivity in Maharashtra, can absorb large numbers. He marshals the experience of the 1969-72 scarcity-relief programmes to show that such rural roads typically washed away in the next monsoon, and that absent advance engineering, geological and groundwater surveys, well-construction targets produced 'holes without water'. On the administrative side, he contrasts the firm schedules and engineering discipline of normal Plan works with the EGS's open-ended, voluntary, district-collector-driven model, in which 'powerfully entrenched local vested interests' rather than need would dictate which works got started — citing the routine paving of roads in front of municipal chairpersons' houses. He concludes (in the pages seen) that the EGS is in essence a permanent scarcity-relief programme that cannot be justified district-by-district when prosperous areas like Sangli, Kolhapur, Nanded and Jalgaon are included alongside Bhir and Osmanabad. - Insists the EGS is a rural non-agricultural employment guarantee, not a general one — and that the Centre and Planning Commission have refused 50:50 cost-sharing. - Frames the inquiry around five critical questions, including whether the Scheme degenerates into 'digging holes and filling them up' and whether diversion of funds is justified. - Argues the approved works (open wells, percolation tanks, storage tanks, rural roads) have low unskilled-labour absorption and depend on skilled engineering labour for completion. - Cites the Agricultural Refinance Corporation's field study finding that Maharashtra's Rs. 60 crore contour-bunding programme since 1952 produced 'nil' increase in agricultural productivity over much of the sample. - Uses the 1969-72 scarcity-relief experience to show rural roads constructed under such programmes vanished with the next monsoon and well-targets produced 'holes without water'. - Contrasts firm Plan-programme schedules and engineering discipline with the EGS's open-ended, voluntary, collector-driven model captured by local vested interests. - Argues that universal district-wise allotment cannot be reconciled with the genuine needs of varied districts, citing the prosperous diversified agriculture of Sangli, Kolhapur, Nanded and Jalgaon. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] Safety and Efficiency in Indian Railways URL: https://indianliberals.in/primary-works/safety-and-efficiency-in-indian-railways-b-s-d-baliga-august-14-1982/ ### Summary B. S. D. Baliga, a former Chairman of the Railway Board, delivered this lecture under the auspices of the Forum of Free Enterprise in Bombay on 10 May 1982. The pamphlet sketches the historical arc of Indian Railways from their 1853 origin as a vehicle for British import-export trade through the post-Independence consolidation of rates, wages, and through-traffic, and then turns to the operational and political pressures the system faces in the 1980s. Baliga argues that the network has handled vastly more traffic since 1947 with broadly improved freight efficiency, but that ageing rolling stock, chronic underfunding, and over-staffing have eroded passenger service quality and stretched safety margins. The core diagnosis is twofold. First, the Railways are starved of capital: the Planning Commission has allotted only half the Sixth Plan demand, the Depreciation Fund has been chronically under-provided, dividends are paid on a never-revalued book capital, and political reluctance to raise rates and fares since 1967 has driven the system into the red.… ### Body # Safety and Efficiency in Indian Railways *By B. S. D. Baliga* ## Summary B. S. D. Baliga, a former Chairman of the Railway Board, delivered this lecture under the auspices of the Forum of Free Enterprise in Bombay on 10 May 1982. The pamphlet sketches the historical arc of Indian Railways from their 1853 origin as a vehicle for British import-export trade through the post-Independence consolidation of rates, wages, and through-traffic, and then turns to the operational and political pressures the system faces in the 1980s. Baliga argues that the network has handled vastly more traffic since 1947 with broadly improved freight efficiency, but that ageing rolling stock, chronic underfunding, and over-staffing have eroded passenger service quality and stretched safety margins. The core diagnosis is twofold. First, the Railways are starved of capital: the Planning Commission has allotted only half the Sixth Plan demand, the Depreciation Fund has been chronically under-provided, dividends are paid on a never-revalued book capital, and political reluctance to raise rates and fares since 1967 has driven the system into the red. Second, the workforce has doubled beyond traffic needs, leave reserves, absenteeism, and an anti-management mood within trade unions make discipline and mechanisation hard to enforce. Baliga reads safety statistics — collisions and derailments mostly attributable to staff failure, the 1981-82 spike in fatalities including a 270-death NE Railway accident — as evidence that discipline and managerial autonomy must be restored. Against this background, Baliga's prescriptive frame is a classical-liberal one tuned to a state monopoly: he wants the Railways insulated from populism, freed to raise resources internally without Planning Commission ceilings, audited by a technical body modelled on Japan's Director of Technical Audit or the US Inter-State Commerce Commission, and protected from political demands for uneconomic branch lines built to satisfy regional egos. He defends rail's irreplaceable role in bulk and long-distance traffic for a populous, capital-scarce country, but insists that hilly and light-traffic areas are better served by roads, and that travel concessions and non-essential travel should be trimmed. The closing argument is blunt: only business methods, far-sighted pricing, and freedom from political pressure can give Indian Railways an efficient, economical, and safe future. ## Key points - Indian Railways began in 1853 as British capital under a guaranteed-return scheme, with lines built inland from Calcutta, Bombay and Madras to serve import-export trade. - Post-1947 standardisation of rates, fares, wages and the telescopic system for through distance brought network-wide benefits, but staff strength has roughly doubled beyond traffic needs. - Freight performance has improved markedly — originating loading reached 220 million tonnes in 1981-82, wagon turn-around fell to 13.5 days, and net tonne-km per wagon capacity rose 35% from 1950-51, second only to Japanese Railways. - Passenger services have deteriorated in punctuality, cleanliness, catering and reservations; trains run with about 1,600 fewer coaches than required due to stock shortages. - Accidents rose from 780 in 1976-77 to 956 in the first ten months of 1981-82, with staff failure responsible for 97% of collisions and 45% of derailments; safety drives are now lowering the trend. - The Railways have been in the red since 1967 because political reluctance to revise rates and fares has left Depreciation Fund contributions and maintenance allotments inadequate against inflation. - Baliga calls for a Director of Technical Audit on the Japanese model, freedom from Planning Commission ceilings on internal resource-raising, and revaluation of the capital base for dividend purposes. - He warns that politicalisation and populism — uneconomic branch lines, peak-period over-crowding, ego-driven low-traffic routes — threaten the very survival of the Railways and must be replaced by business methods. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] Sales Tax URL: https://indianliberals.in/primary-works/sales-tax-a-d-shroff-jun1-1958/ ### Summary Jamshed M. Antia's lecture, delivered in Bombay on 14 April 1958 under the Forum of Free Enterprise's series on 'The New Pattern of Taxation', is a comprehensive technical and polemical survey of the sales tax in India two decades after its introduction. Antia traces the lineage from the Central Provinces' 1937 tax on motor spirit and Madras's pioneering General Sales Tax of 1938 to its emergence by the late 1950s as the mainstay of State finances — revenue having multiplied tenfold from Rs. 8 crores in 1944 to over Rs. 80 crores, rivalling Land Revenue and approaching Central Income-tax in importance. The lecture surveys the three systems of taxation (multi-point, single-point, and double-point), the constitutional history that led to the 1956 Amendment of Article 286, and the Central Sales Tax Act of 1956 with its categories of intra-State, outside-State, import/export, and inter-State sales.… ### Body # Sales Tax *By JAMSHED M. ANTIA* ## Summary Jamshed M. Antia's lecture, delivered in Bombay on 14 April 1958 under the Forum of Free Enterprise's series on 'The New Pattern of Taxation', is a comprehensive technical and polemical survey of the sales tax in India two decades after its introduction. Antia traces the lineage from the Central Provinces' 1937 tax on motor spirit and Madras's pioneering General Sales Tax of 1938 to its emergence by the late 1950s as the mainstay of State finances — revenue having multiplied tenfold from Rs. 8 crores in 1944 to over Rs. 80 crores, rivalling Land Revenue and approaching Central Income-tax in importance. The lecture surveys the three systems of taxation (multi-point, single-point, and double-point), the constitutional history that led to the 1956 Amendment of Article 286, and the Central Sales Tax Act of 1956 with its categories of intra-State, outside-State, import/export, and inter-State sales. Antia then mounts a sustained critique of the actual effects of sales tax in operation: he argues that despite formal incidence on the seller, the burden ultimately falls on consumer or producer depending on bargaining power, and presents Taxation Inquiry Commission and re-worked Bombay-city figures showing that the burden on the average consumer roughly equals 4.5% of income, becoming heavier than income-tax for incomes below Rs. 700 per month. He documents how multi-point taxes and inter-State rate differences have distorted trade routes, hampered specialisation, encouraged inefficient small-scale production, raised industrial costs, suppressed exports, and inflicted a regressive burden on small dealers and consumers. The second half turns to administration — recital-pattern penalties, suspicion-driven inspection, corruption, and 'justice delayed is justice denied' — and closes with six concrete reform recommendations: making sales tax a Central subject by constitutional amendment, simplifying the structure for the layman, enforcing uniform levy across India, shifting to a single-point tax at the last sale, calibrating rates by economic need (exempting necessaries, taxing luxuries progressively), and compensating States through Finance Commission grants. Antia frames the goal as an integrated tax structure that would let government 'control the direction of resources without stifling private enterprise' and create a climate of confidence for free enterprise to play its role in national welfare. ## Key points - Sales tax revenue in India grew from Rs. 8 crores in 1944 to over Rs. 80 crores by the late 1950s, becoming the mainstay of State finances and rivalling Land Revenue, with the first general tax introduced in Madras in 1938. - The constitutional history — Article 286, the Supreme Court's nullification of inter-State taxation by resident dealers, the 1956 Sixth Amendment, and the Central Sales Tax Act 1956 — created a framework of four sale categories and uniform principles for determining situs of sale. - Three systems coexist (multi-point, single-point, double-point); the Centre levies only multi-point inter-State tax while States impose varying rates from less than 1% to 30%. - Although nominally assessed on the seller, the tax is ultimately borne by consumer, manufacturer, or trader depending on bargaining position; in Bombay it amounts to roughly 4.5% of income and becomes heavier than income-tax for incomes below Rs. 700/month. - Inter-State rate differences distort trade flows, encourage in-State self-sufficiency, hamper specialisation, raise industrial costs, suppress exports, and act as 'a tax on industrialization' that depresses the standard of living. - Administration is marked by suspicion-driven inspection, secrecy in interpretation, delegated legislation, corruption concerns, and procedural penalties that fall hardest on the small dealer. - Antia recommends six reforms: making sales tax a Central subject by constitutional amendment, simplifying the structure, uniform levy across India, single-point at last sale, rates governed by economic need with necessaries exempt and luxuries progressive, and compensating States through Finance Commission formulae. - The lecture closes by framing a reformed sales tax as a 'powerful weapon for controlling the economy in a democratic manner' compatible with private enterprise and an integrated national tax structure. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] समस्याएँ भारत की URL: https://indianliberals.in/primary-works/samasyayen-bharat-ki/ ### Summary Samasyāẽ Bhārat Kī (समस्याएँ भारत की, 'India's Problems') is a Hindi-language collection of essays by Sharad Joshi, the founder of Shetkari Sanghatana, translated and compiled from his Marathi and English journalism of 1980–1988 and published by Shetkari Prakashan in 1988. In the rendered pages (covering the first four complete essays and the opening pages of essays five and six), Joshi develops a sustained argument that independent India has merely replaced white English rulers with brown English rulers — a westernised, urban administrative class that perpetuates the same colonial extraction of agricultural surplus that the British practised. The central claim, repeated across essays, is that the poverty of Indian cities and the misery of rural India are both downstream of a single cause: the systematic underpricing of agricultural produce by a state whose instincts and educational formation remain colonial. In the rendered pages Joshi argues that conventional economics, whether capitalist or socialist in orientation, treats farming as merely a source of raw material and cheap labour for industry, and that this foundational error drives all flawed policy.… ### Body ## Summary Samasyāẽ Bhārat Kī (समस्याएँ भारत की, 'India's Problems') is a Hindi-language collection of essays by Sharad Joshi, the founder of Shetkari Sanghatana, translated and compiled from his Marathi and English journalism of 1980–1988 and published by Shetkari Prakashan in 1988. In the rendered pages (covering the first four complete essays and the opening pages of essays five and six), Joshi develops a sustained argument that independent India has merely replaced white English rulers with brown English rulers — a westernised, urban administrative class that perpetuates the same colonial extraction of agricultural surplus that the British practised. The central claim, repeated across essays, is that the poverty of Indian cities and the misery of rural India are both downstream of a single cause: the systematic underpricing of agricultural produce by a state whose instincts and educational formation remain colonial. In the rendered pages Joshi argues that conventional economics, whether capitalist or socialist in orientation, treats farming as merely a source of raw material and cheap labour for industry, and that this foundational error drives all flawed policy. Essay 2 ('New Light on the Prevailing Economy') extends this critique into a macro-economic framework, showing that the Marxist and mainstream development-economics traditions alike treat agriculture as subordinate to industry, thereby legitimising the continued suppression of farm prices. Essay 3 ('Is India Truly Free?') historicises the argument, contending that the concept of freedom that animated anti-colonial struggles — associated with figures such as Maharana Pratap and Shivaji — was appropriated by urban nationalists after 1947 and turned into a tool of continued rural subjugation. Joshi argues that the Agricultural Price Commission (established partly on the recommendations of a 1965 committee chaired by T.T. Krishnamachari) is structurally incapable of ensuring remunerative prices because its mandate is to keep urban food prices and industrial wage-costs low, not to protect the farmer. The opening pages of essay 6 in the rendered chunk turn to the critics of Shetkari Sanghatana, addressing the charge that its farm-price demand is economically illiterate. Joshi counters that the organisation's positions are not drawn from foreign economists but from the lived experience of millions of Indian farmers, and that Marx himself — who is invoked by the organisation's left-wing detractors — has yet to receive recognition from the Indian establishment for his analysis of exploitation. The prose throughout is polemical and accessible, addressed explicitly to Hindi-speaking farmers and rural activists rather than to academic economists. ## Key points - In the rendered pages Joshi argues that independent India replaced British colonial rulers with a domestic urban-elite class ('काले अंग्रेज') that continues the same extraction of agricultural surplus through price suppression and discriminatory state policy. - In the rendered pages the structural cause of Indian poverty is identified as systematic underpricing of farm produce: urban poverty, slum growth, and rural distress are presented as effects of this single policy choice. - In the rendered pages conventional economics — both Marxist and mainstream development-economics — is indicted for treating agriculture as a subordinate input to industry, thereby providing intellectual cover for anti-farmer state policy. - In the rendered pages essay 3 argues that formal political independence (1947) did not end the colonial relationship between the state and the farmer; the Agricultural Price Commission is described as a colonial-era instrument in a new institutional form. - In the rendered pages Joshi invokes the moral-historical tradition of armed resistance (Maharana Pratap, Shivaji) to argue that farmer self-assertion is not merely an economic demand but a legitimate continuation of freedom struggle. - In the rendered pages rainfall uncertainty is cited as causing crop losses of up to 47 per cent over seven years — a loss no insurance scheme can cover — as evidence of the structural vulnerability of dryland farmers. - In the rendered pages the publisher's note confirms that essays span 1980–1988 and were originally published in Hindi periodicals including Nayi Duniya (Indore), Mazadur Kisan Niti, and Chatra Kisan Niti. --- ## [Primary work] SECOND FIVE YEAR PLAN IS THE REAL MISCHIEF-MAKER URL: https://indianliberals.in/primary-works/second-five-year-plan-is-the-real-mischief-maker-by-c-rajagopalachari-may-23-1957/ ### Summary Reprinting a Hindu report of a speech delivered at a Madras symposium on May 22, 1957, organised by the Madras Centre of the Forum of Free Enterprise and other bodies, this pamphlet records C. Rajagopalachari's frontal attack on the 1957 Budget proposals and, behind them, the Second Five Year Plan itself. Rajaji rejects the dominant frame in which critics debate only the abstract, ethical or psychological 'defeatism' of opposing the Plan; the concrete question, he insists, is whether the Plan is right and whether it requires alteration. He charges that the Plan has given a 'monolithic cast' to public affairs, imprisoning them within 'stone walls' and stripping them of flexibility, so that when the Plan generates high prices the Government's only response is to pile on fresh taxes that fall on the poor. Much of the speech is a close reading of Finance Minister T. T. Krishnamachari's budget. Rajaji warns that the new imposts revive what he calls 'financial brinkmanship' and risk breaking the taxpayer's back.… ### Body # SECOND FIVE YEAR PLAN IS THE REAL MISCHIEF-MAKER *By C. Rajagopalachari* ## Summary Reprinting a Hindu report of a speech delivered at a Madras symposium on May 22, 1957, organised by the Madras Centre of the Forum of Free Enterprise and other bodies, this pamphlet records C. Rajagopalachari's frontal attack on the 1957 Budget proposals and, behind them, the Second Five Year Plan itself. Rajaji rejects the dominant frame in which critics debate only the abstract, ethical or psychological 'defeatism' of opposing the Plan; the concrete question, he insists, is whether the Plan is right and whether it requires alteration. He charges that the Plan has given a 'monolithic cast' to public affairs, imprisoning them within 'stone walls' and stripping them of flexibility, so that when the Plan generates high prices the Government's only response is to pile on fresh taxes that fall on the poor. Much of the speech is a close reading of Finance Minister T. T. Krishnamachari's budget. Rajaji warns that the new imposts revive what he calls 'financial brinkmanship' and risk breaking the taxpayer's back. He grants Krishnamachari's intellectual stature and personal friendship, but turns this concession into the rhetorical pivot for sharper criticism: a true friend tells the truth. He defends the Opposition's duty to wrest the political initiative from the Congress, lest the ruling party become endangered by its own monopoly. He also rejects the Government's habit of dressing up taxation as a moral disapproval of consumption, arguing that India's poor majority pays indirect taxes through every commodity, and that 'looking into the Plan more carefully' would force the Government to 'cut their coat according to the cloth' rather than rely on foreign aid that 'will come back with compound interest'. The later sections target specific measures: the wealth-tax and expenditure-tax, the kerosene price rise, increased railway fares and taxes on tea and coffee, and the constitutional novelty of an expenditure tax that Rajaji reads as a federal encroachment on the States' sphere over sales and purchases. He defends Rajkumari Amrit Kaur's Rajya Sabha plea for scrapping Prohibition and ridicules the converse logic — treating Government inefficiency as licence for fresh taxes. The closing paragraphs read the Government's taxation of an agricultural article as a manufactured one, and the silent acquiescence of dole-dependent States, as further evidence that the Plan has eroded both federal balance and economic common sense. The pamphlet ends with the Forum of Free Enterprise's Bombay imprint. ## Key points - Rajagopalachari reframes opposition to the Plan: the question is not 'defeatism' but whether the Plan is correct and whether it needs alteration. - He accuses the Plan of imposing a 'monolithic cast' on public affairs, imprisoning policy within 'stone walls' and forcing high prices that are then patched over with new taxes. - He warns the Finance Minister T. T. Krishnamachari against 'financial brinkmanship' and argues a comparatively heavier burden of the new taxes falls on the poor. - He defends the constitutional role of the Opposition: the Congress itself is endangered when there is no real party wresting the political initiative. - He attacks the moralised rationale for indirect taxation, insisting India's poor pay through every commodity and that 'inefficiency of the Government' is being used as an excuse to tax. - He prescribes fiscal restraint — cutting the coat to the cloth — over reliance on foreign aid that 'will come back with compound interest'. - He treats the new expenditure tax as a constitutional encroachment by the Centre on the States' sphere of taxation on sales and purchases, and reads agricultural articles being taxed as manufactured ones as a federal overreach. - He backs Rajkumari Amrit Kaur's Rajya Sabha plea for scrapping Prohibition and rejects the symmetrical logic of taxing the rich to compensate for administrative failure. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] शेतकरी संघटक URL: https://indianliberals.in/primary-works/shetkari-sanghatak-april-21-1992/ ### Summary This issue of Shetkari Sanghatak (Year 9, Issue 2, 21 April 1992), the Marathi fortnightly organ of the Shetkari Sanghatana farmers' movement, is anchored by a major polemical essay by Sharad Joshi titled 'जोतिबांच्या भटशाही विरोधाचा खरा अर्थ' (The True Meaning of Jotiba's Opposition to Brahmin Domination). Joshi argues that the 19th-century reformer Jyotiba Phule's anti-Brahmin campaign was fundamentally a defence of productive labour and the exploited peasantry — not a Hindu-communalist project, and not a Muslim-sympathising one either — and recruits Phule for the Shetkari Sanghatana's agrarian-liberal critique of the Indian state and urban rentier class. A sidebar box addresses the claim 'Was Jotiba a Hindu nationalist?' and rebuts it on historical grounds.… ### Body ## Summary This issue of Shetkari Sanghatak (Year 9, Issue 2, 21 April 1992), the Marathi fortnightly organ of the Shetkari Sanghatana farmers' movement, is anchored by a major polemical essay by Sharad Joshi titled 'जोतिबांच्या भटशाही विरोधाचा खरा अर्थ' (The True Meaning of Jotiba's Opposition to Brahmin Domination). Joshi argues that the 19th-century reformer Jyotiba Phule's anti-Brahmin campaign was fundamentally a defence of productive labour and the exploited peasantry — not a Hindu-communalist project, and not a Muslim-sympathising one either — and recruits Phule for the Shetkari Sanghatana's agrarian-liberal critique of the Indian state and urban rentier class. A sidebar box addresses the claim 'Was Jotiba a Hindu nationalist?' and rebuts it on historical grounds. The remaining pages carry shorter contributions: a policy manifesto by Shyamsundar Vasare proposing non-agricultural sector taxation to fund farm liberation, a first-person 'If I were Finance Minister' statement by Ratrao Lahanu Savre outlining ten points of agrarian fiscal policy, and three news items — the Supreme Court permitting collective withdrawal of debt-relief petitions, an announcement of a Rs 21 bonus for sugarcane to Central mills, and a report on farmers burning grain and cotton at Delhi's Boat Club on Shetkari Hutatma Din. ## Essays ### जोतिबांच्या 'भटशाही' विरोधाचा खरा अर्थ *By Sharad Joshi* Joshi opens by referencing a passage from his own earlier book 'Shetkaryacha Asud' (Plough of the Farmer) in which he recalled Mahatma Phule's anti-Brahmin critique. In 1983, Joshi had written the foreword to a book about Phule. Now he reclaims Phule's legacy against two distortions: right-wing Hindu nationalists who try to annex Phule as a proto-Hindutva figure, and those who interpret Phule's solidarity with Muslims and lower castes as evidence of communal anti-Hinduism. Joshi's core argument is that Phule's 'Bhat-shahi' (Brahminical rule) stands for the exploiting, non-productive class — urbanised, priestly, bureaucratic — and that Phule's true enemy was economic exploitation of the toiling peasant, not Brahmin caste as such. The essay engages extensively with B. R. Ambedkar's later interpretations of Phule, noting that Ambedkar eventually framed Phule's anti-caste work in a different register; Joshi insists Phule was not anti-Hindu but anti-exploiter. The article also contests the Rashtriya Swayamsevak Sangh's recent attempts to appropriate Phule's legacy for Hindutva, and challenges the claim that Phule's 'Satya Shodak' organisations were aligned with Muslim political interests. Joshi closes by arguing that Shetkari Sanghatana's contemporary struggle for farmers' autonomy is the authentic heir of Phule's project. - Phule's 'Bhat-shahi' should be understood as opposition to the exploitative non-productive urban class, not as caste hatred or anti-Hindu sentiment. - Joshi rebuts RSS/Hindutva attempts to appropriate Phule as a proto-Hindu nationalist, citing Phule's own writings and organisations. - The essay also rejects the mirror-image reading that Phule was pro-Muslim or anti-Hindu in a communal sense. - Ambedkar's later reinterpretation of Phule is noted and partly distinguished from Joshi's own reading. - Shetkari Sanghatana's agrarian movement is presented as the true contemporary continuation of Phule's anti-exploitation project. ### बिगरशेतीक्षेत्राला बेसण घालून शेतीला स्वतंत्र करीन *By श्यामसुंदर वसैरे* Shyamsundar Vasare, writing from Jalgaon district, proposes a policy platform titled 'I will liberate agriculture by taxing the non-agricultural sector.' The piece is structured as a ten-point manifesto: Vasare argues that the Indian state systematically extracts value from agriculture to subsidise industry and urban services, and that the only corrective is to levy a comprehensive tax on all non-agricultural income and use the proceeds to write off farmers' debts, provide free inputs, and eliminate state procurement at below-market prices. The tone is combative, echoing Shetkari Sanghatana's standard framing of a town-versus-village surplus transfer. - Non-agricultural sector taxation proposed as the primary instrument to fund agrarian relief. - Demands cancellation of all farmer debt and free provision of seeds, fertiliser, and water. - Frames state procurement policy as systematic extraction from the farming class. - Aligns with Shetkari Sanghatana's core town-versus-village economic argument. ### मी अर्थमंत्री असतो तर – माझे नीतिविषयक धोरण असे राहील *By श्री. रताराव लहाणु सावरे, काम्पन सीक्यू ति. क. अव्हर, नाशिक* Ratrao Lahanu Savre of Nashik contributes a first-person 'If I were Finance Minister' piece outlining ten planks of agrarian fiscal policy. The proposals include: abolishing land revenue, cancelling all agricultural loans, ensuring remunerative price support, eliminating input taxes on seeds, fertilisers, and electricity for irrigation, and redirecting defence and urban infrastructure spending to rural development. The piece is a reader-contribution genre common in Shetkari Sanghatana publications, translating movement demands into finance-ministry language. - Ten-point agrarian fiscal manifesto framed as a Finance Minister's policy statement. - Calls for abolition of land revenue and all agricultural loan obligations. - Demands input-tax exemptions across seeds, fertilisers, electricity, and water. - Redirects state expenditure from defence and urban infrastructure to rural uplift. ### कर्जमुक्ती अर्ज एकत्रितपणे मागे घेण्यास सुप्रीम कोर्टाची अनुमती A short news item reporting that the Supreme Court of India has granted permission to Shetkari Sanghatana to collectively withdraw debt-relief petitions filed by farmers across Maharashtra. The report notes that Shetkari Sanghatana had coordinated the joint filing of these petitions and that the court's permission enables their en-masse withdrawal — a tactical move consistent with the organisation's strategy of pressuring the state through collective action rather than individual legal remedy. - Supreme Court permits collective withdrawal of Shetkari Sanghatana's coordinated debt-relief petitions. - Movement frames the withdrawal as a tactical organisational decision, not a concession. ### राजा झाला उदार! केंद्रासाठन मड्डाळा २१ रु. बोनस देणार A brief news item headlined 'The King Has Become Generous!' (राजा झाला उदार!) reports that the central government has announced a bonus of Rs 21 per quintal for sugarcane delivered to central mills (केंद्रासाठन मड्डाळा २१ रु. बोनस देणार). The item is framed ironically — the movement regularly demands far higher support prices — and notes that the announcement comes ahead of elections. It briefly reports Shetkari Sanghatana's sceptical response. - Centre announces Rs 21 per quintal bonus for sugarcane to central mills. - Shetkari Sanghatana frames the announcement as tokenistic and electorally motivated. - Ironic headline 'The King Has Become Generous!' signals movement's dismissive stance. ### शेतकरी हुतात्मादिनी दिल्ली बोट क्लबवर धान्य व कापूस यांची होळी The back-page lead reports on the Shetkari Hutatma Din (Farmers' Martyrs' Day) rally held at Delhi's Boat Club on 6 April 1992, at which Shetkari Sanghatana members from across India burnt grain and cotton as a symbolic protest against state pricing policy. The report lists state-wise delegations present — Punjab, Haryana, Gujarat, Maharashtra, UP, Rajasthan, Karnataka, Delhi, and others — and names several speakers including leaders from Kisan Samvay Samiti and allied farmer organisations. The action is framed as a national demonstration of the cross-regional solidarity of the agrarian movement and a challenge to the government's agricultural pricing regime. The item also carries a brief notice about a Shetkari Mahila Aghadi (Farmers' Women's Front) event at Pune. - Farmers from multiple states gathered at Delhi Boat Club on 6 April 1992 for Shetkari Hutatma Din. - Grain and cotton were burnt as symbolic protest against government procurement prices. - Multi-state delegations listed including Punjab, Haryana, Gujarat, Maharashtra, UP, Rajasthan, Karnataka. - Event framed as demonstration of pan-India agrarian solidarity. - Brief notice of Shetkari Mahila Aghadi event appended. --- ## [Primary work] SATYAM EVA JAYATE URL: https://indianliberals.in/primary-works/satyamev-jayate-volume-1-collection-of-writings-from-swarajya/ ### Summary In the rendered pages, Satyam Eva Jayate (Volume I) presents itself as a collection of weekly journalistic pieces written by C. Rajagopalachari (Rajaji) for Swarajya and related journals between 1956 and 1961. The Preface makes clear that the articles are not a systematic treatise but 'protests against errors — strongly felt protests against great errors,' aimed squarely at the regimentation and statism of the Congress-ruled government. Rajaji dedicates the volumes to Khasa Subba Rau, the editor whose encouragement made the Swarajya venture possible, and names the collection after the Sanskrit phrase 'Truth alone prevails' as an act of faith against entrenched official power. The first seven articles in the rendered pages span July–September 1956 and establish the recurring preoccupations of the collection. In 'Value of Frank Criticism,' Rajaji invokes Socrates's self-description as a gadfly to argue that India's post-Independence press has surrendered its critical function, leaving the Prime Minister cocooned in unqualified adulation and democracy itself at risk. 'National and Official' and 'Commonsense vs.… ### Body ## Summary In the rendered pages, Satyam Eva Jayate (Volume I) presents itself as a collection of weekly journalistic pieces written by C. Rajagopalachari (Rajaji) for Swarajya and related journals between 1956 and 1961. The Preface makes clear that the articles are not a systematic treatise but 'protests against errors — strongly felt protests against great errors,' aimed squarely at the regimentation and statism of the Congress-ruled government. Rajaji dedicates the volumes to Khasa Subba Rau, the editor whose encouragement made the Swarajya venture possible, and names the collection after the Sanskrit phrase 'Truth alone prevails' as an act of faith against entrenched official power. The first seven articles in the rendered pages span July–September 1956 and establish the recurring preoccupations of the collection. In 'Value of Frank Criticism,' Rajaji invokes Socrates's self-description as a gadfly to argue that India's post-Independence press has surrendered its critical function, leaving the Prime Minister cocooned in unqualified adulation and democracy itself at risk. 'National and Official' and 'Commonsense vs. Pride' mount a sustained, carefully reasoned case against making Hindi the official language of the Union, distinguishing 'national' (majority usage) from 'official' (state-enforced medium) and warning that imposing Hindi would constitute an 'unconscionable waste' destructive of the constitution's linguistic guarantees. 'Fifteenth of August' reframes Independence Day not as a chauvinistic occasion but as a demonstration to all subject peoples that consent cannot be manufactured indefinitely. 'Am I a Pessimist?' catalogues contradictions in post-Independence policy — the destruction of cottage industries, the debarring of religion from schools while lamenting moral decline, the forced break-up of multi-lingual states. 'Brinkmanship at Suez' and 'Physician, Heal Thyself' turn to foreign affairs: Rajaji subjects John Foster Dulles's doctrine of brinkmanship to biting analysis, arguing that nuclear deterrence compels peace-loving nations to concede unjust terms, and charges the Western Powers with hypocrisy in arraigning Egypt over Suez while continuing radioactive nuclear testing that poisons the world. The physical copy scanned carries a scanner's caveat that the book was water-damaged and pages are missing; this chunk covers only the opening front matter and the first seven of what are evidently many dozens of articles across two volumes. ## Key points - In the rendered pages, Rajaji frames the entire collection as an act of 'faith in truth' against a powerful ruling party: the title Satyam Eva Jayate is explicitly explained in the Preface as a protest-slogan against government regimentation and statism. - In the rendered pages, the opening article uses Socrates's gadfly metaphor to diagnose a crisis of press freedom: post-Independence India's daily newspapers have become commercially dependent on advertisements and politically dependent on government approval, ceding the critical role once played by small, financially independent weeklies. - In the rendered pages, two articles on language policy ('National and Official' and 'Commonsense vs. Pride') develop the argument that Hindi may legitimately be the 'national' language in a cultural sense but must not become the coercive 'official' language of administration, because true democracy requires 'even-handed justice to all' communities, not imposition by numerical majority. - In the rendered pages, the 'Brinkmanship at Suez' article analyses Dulles's brinkmanship doctrine and argues it has been deployed not only in Cold War confrontations but to bully a small nation (Egypt) into surrendering sovereign control of the Suez Canal — demonstrating that nuclear deterrence paradoxically strengthens aggressors against peace-seeking nations. - In the rendered pages, 'Physician, Heal Thyself' draws a direct parallel between the Anglo-French position on Suez and U.S. control of the Panama Canal, charging the Western Powers with applying a double standard and using propaganda machinery to justify expropriation under the guise of 'internationalisation'. - In the rendered pages, 'Am I a Pessimist?' is a compressed inventory of policy contradictions — handloom weavers destroyed by mechanisation, religious culture denigrated in the name of anti-superstition, multi-lingual states broken up and then artificially re-stitched — that functions as an early statement of Rajaji's disillusionment with Congress governance. - In the rendered pages, the Preface explicitly disavows party discipline on the language question, stating that Rajaji will not press his views through the Swatantra Party until public opinion comes round of its own accord. --- ## [Primary work] SHOULD WE ALTER OUR CONSTITUTION? URL: https://indianliberals.in/primary-works/should-we-alter-our-constitution-n-a-palkhivala-20-february-1976/ ### Summary Delivered in February 1976 (and reprinted from the Illustrated Weekly of India, January 4–10, 1976), this Forum of Free Enterprise pamphlet by N. A. Palkhivala is a constitutional-lawyer's alarm bell against a then-circulating paper of 'Some Suggestions' for amending the Indian Constitution. Palkhivala opens with a wry meditation on the imperfection of law and the relentlessness of India's 'law-making industry,' insisting that the most useful reform Parliament could grant the country is a stated period during which no new laws are passed. From there he pivots to his central preoccupation: the indispensability of an independent judiciary as the only effective check on executive excess, illustrated by examples ranging from the Bombay Police Commissioner's blanket ban on assemblies of five (struck down as ultra vires on 18 December 1975) to the Bhanudas Krishna Gawde case in which government counsel suggested detenus could be denied food, or even shot, without remedy under Article 226 while the Presidential Order suspending Article 21 was in force. The core argument rests on the Supreme Court's 1973 decision in Kesavananda Bharati's case, which held that Parliament cannot alter or … ### Body # SHOULD WE ALTER OUR CONSTITUTION? *By N. A. Palkhivala* ## Summary Delivered in February 1976 (and reprinted from the Illustrated Weekly of India, January 4–10, 1976), this Forum of Free Enterprise pamphlet by N. A. Palkhivala is a constitutional-lawyer's alarm bell against a then-circulating paper of 'Some Suggestions' for amending the Indian Constitution. Palkhivala opens with a wry meditation on the imperfection of law and the relentlessness of India's 'law-making industry,' insisting that the most useful reform Parliament could grant the country is a stated period during which no new laws are passed. From there he pivots to his central preoccupation: the indispensability of an independent judiciary as the only effective check on executive excess, illustrated by examples ranging from the Bombay Police Commissioner's blanket ban on assemblies of five (struck down as ultra vires on 18 December 1975) to the Bhanudas Krishna Gawde case in which government counsel suggested detenus could be denied food, or even shot, without remedy under Article 226 while the Presidential Order suspending Article 21 was in force. The core argument rests on the Supreme Court's 1973 decision in Kesavananda Bharati's case, which held that Parliament cannot alter or destroy the 'basic structure' of the Constitution. Palkhivala enumerates nine essential features of that basic structure — supremacy of the Constitution, sovereignty and integrity of India, the republican form of government, democracy distinct from mere adult franchise, fundamental rights, secularism, an independent judiciary, the federal Union-State structure, and balance among the three organs of government — and uses this list as the yardstick against which to measure the proposed amendments. He warns that the 'Some Suggestions' paper would replace the Westminster model with a presidency more powerful than the American one, reduce Parliament to subservience, and substitute the courts' interpretive authority with a 'Superior Council of the Judiciary' whose composition would leave ten of fifteen members beholden to the President and ruling party — reducing the higher judiciary, in Justice Staple's phrase, to 'mice squeaking under the Home Minister's chair.' Palkhivala then turns to the Constitution (Forty-first Amendment) Bill, already passed by the Rajya Sabha in August 1975, which would grant the President, Prime Minister and State Governors total civil immunity during office for personal acts and lifelong criminal immunity for any crime committed before or during office. He calls this 'a Bill that has no parallel in civilized jurisprudence,' arguing it destroys the first principle of republicanism — equality before the law. He closes with an appeal to Indira Gandhi, citing her own 25th-anniversary speech describing the Constitution as 'a charter of a peaceful, democratic, social revolution,' and trusting that, properly briefed, she would not lend her support to proposals that 'aim at drastically diluting the essence of our democracy.' A coda invokes a recent UK Court of Appeal episode, the imperative of open public debate before any further amendment, and Joseph Story's warning that whether the Constitution descends 'in its masculine majesty' or 'an idle mockery' depends on the present generation. ## Key points - Frames legal reform as urgently needing restraint: the most welcome amendment would be an assurance that no new laws are passed for a stated period. - Insists that whatever else is altered, the Supreme Court and High Courts must retain their power to interpret the Constitution and grant relief under Articles 32 and 226. - Uses the Bombay Commissioner's assembly-of-five order (struck down on 18 December 1975) and the Bhanudas Krishna Gawde case to illustrate executive overreach answerable only to an independent court. - Enumerates nine 'essential features' of the basic structure of the Constitution — supremacy, sovereignty, integrity, republican form, democracy with fundamental rights, secularism, independent judiciary, federal dual structure, and balance of powers. - Concedes a presidential form of government could be acceptable, but condemns the 'Some Suggestions' paper for envisaging a President more powerful than the US President and a 'Superior Council of the Judiciary' that would supersede the courts. - Attacks the Constitution (Forty-first Amendment) Bill for granting blanket civil and criminal immunity to the President, Prime Minister and Governors as a destruction of equality before the law. - Appeals to Indira Gandhi's own characterisation of the Constitution as a 'charter of a peaceful, democratic, social revolution' and urges a public announcement that the amendment proposals are not Government-sponsored. - Closes with a UK Court of Appeal precedent and a Joseph Story quotation framing constitutional fidelity as a generational choice on which India's place in 'one-sixth of the human race' will turn. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] SHOULD WE ALTER OUR CONSTITUTION? URL: https://indianliberals.in/primary-works/should-we-alter-ourc-onstitution-n-a-palkhivala-february-20-1976/ ### Summary Written during the Emergency and reprinted from the Illustrated Weekly of India (4-10 January 1976), N. A. Palkhivala's pamphlet is a constitutional alarm bell. He opens with the wry observation that, however acute the recession, the law-making industry remains in perpetual boom, and argues that what India needs is respite from the Niagara of Rules and Notifications rather than fresh amendments. The Supreme Court and High Courts, he insists, must never be deprived of their power under Articles 32 and 226 to interpret the Constitution and shield citizens from executive excess. He invokes Lord Atkin in Eshugbayi Eleko's case to defend the British-derived tradition that judges must not shrink from confronting the executive, and offers contemporary illustrations—the Bombay Police Commissioner's blanket ban on assemblies of five or more, struck down on 18 December 1975, and the startling proposition in Bhanudas Krishna Gawde's case that a detenu could not contest even an order forbidding him to eat. The argumentative core is a defence of the Supreme Court's April 1973 ruling in Kesavananda Bharati that Parliament cannot alter or destroy the Constitution's basic structure.… ### Body # SHOULD WE ALTER OUR CONSTITUTION? *By N. A. Palkhivala* ## Summary Written during the Emergency and reprinted from the Illustrated Weekly of India (4-10 January 1976), N. A. Palkhivala's pamphlet is a constitutional alarm bell. He opens with the wry observation that, however acute the recession, the law-making industry remains in perpetual boom, and argues that what India needs is respite from the Niagara of Rules and Notifications rather than fresh amendments. The Supreme Court and High Courts, he insists, must never be deprived of their power under Articles 32 and 226 to interpret the Constitution and shield citizens from executive excess. He invokes Lord Atkin in Eshugbayi Eleko's case to defend the British-derived tradition that judges must not shrink from confronting the executive, and offers contemporary illustrations—the Bombay Police Commissioner's blanket ban on assemblies of five or more, struck down on 18 December 1975, and the startling proposition in Bhanudas Krishna Gawde's case that a detenu could not contest even an order forbidding him to eat. The argumentative core is a defence of the Supreme Court's April 1973 ruling in Kesavananda Bharati that Parliament cannot alter or destroy the Constitution's basic structure. Palkhivala enumerates the essential features that make up that structure: supremacy of the Constitution, sovereignty and integrity of India, the republican and democratic form of government, fundamental rights, the secular state, an independent judiciary, the dual federal structure, and the balance among legislature, executive and judiciary. Against this baseline he assesses a circulating proposals paper that he hopes is not Congress-sponsored: it would replace the Westminster system with a presidential one virtually uncontrolled by the Constitution, install a politically dominated 'Superior Council of the Judiciary' that would reduce the higher judiciary to (quoting Justice Staple) 'mice squeaking under the Home Minister's chair', delete Articles 13 and 32, and make Parliament's interpretation of the Constitution final and binding on all courts. He pairs this with the already-passed Forty-first Amendment Bill granting the President, Prime Minister and Governors lifelong civil and criminal immunity for acts done in office, which he calls a proposal without parallel in civilized jurisprudence. Citing Indira Gandhi's own February 1975 dictum that 'democracy does not include freedom to wreck democracy', and a December 1975 UK case in which a counsel's casual threat to the Court of Appeal produced an immediate official apology, Palkhivala urges that the Government publicly disavow these proposals and submit any further amendment to free public debate. He closes with Joseph Story's warning that the Constitution will either descend to future generations 'in its masculine majesty' or, shorn of its strength, 'become an idle mockery, and perish before the grave has closed upon the last of its illustrious founders.' ## Key points - Opens with the aphorism that the law-making industry is in perpetual boom regardless of recession, and that India needs respite from new laws, not more amendments. - Defends the Supreme Court's and High Courts' jurisdiction under Articles 32 and 226 as the citizen's irreducible protection against executive excess, citing Lord Atkin's judgment in Eshugbayi Eleko. - Illustrates executive overreach with the Bombay Police Commissioner's order banning assemblies of five (struck down 18 December 1975) and counsel's argument in Bhanudas Krishna Gawde's case that a detenu could be denied food without remedy. - Treats Kesavananda Bharati (April 1973) as a constitutional bulwark and lists nine essential features of the Constitution's basic structure that Parliament cannot destroy. - Attacks an anonymously circulating 'Some Suggestions' paper that proposes a presidential system uncontrolled by the Constitution, a Superior Council of the Judiciary politically dominated by the President and Parliament, and deletion of Articles 13 and 32. - Condemns the Forty-first Amendment Bill (passed by the Rajya Sabha in August 1975) granting lifelong civil and criminal immunity to the President, Prime Minister and Governors as without parallel in civilized jurisprudence. - Argues that the proposals would reduce the Supreme Court and High Courts to mere appendages of the administration and make fundamental rights, including freedom of religion and minority protections, unenforceable. - Calls on the Government to publicly disavow sponsorship of these proposals and to permit free public debate before any further amendment, invoking Joseph Story's warning about the survival of constitutional government. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] Sir M. Visvesvaraya — A Biography URL: https://indianliberals.in/primary-works/sir-m-visvesvaraya-a-biography-by-t-rangadasappa-1984/ ### Summary In the rendered pages, T. Rangadasappa opens a short A. D. Shroff Memorial Trust biography of Sir M. Visvesvaraya — published in 1984 to mark the engineer-statesman's 125th birth anniversary in 1985 — with front matter that frames the project in A. D. Shroff's conviction that 'a well-informed citizenry is the foundation of an enduring democracy.' N. A. Palkhivala's introduction places the volume in the Trust's series on 'the builders of modern India' and offers Visvesvaraya as an exemplar of 'absolute integrity, systematic hard work, and a total, selfless dedication to the public cause.' Chapter I, 'A Many-Splendoured Life,' sketches Visvesvaraya in the rendered pages as Bharatha Ratna engineer-statesman whose principal objective was India's economic development through planned industrialisation: the Krishnarajasagar dam on the Cauvery, the block system of irrigation, the automatic sluice gates at Lake Fife, drainage and water schemes for Poona, Hyderabad, Mysore, Sukkur, Nagpur, Bijapur and Aden, and as Dewan of Mysore the founding of the University of Mysore, the Bank of Mysore, the Chamber of Commerce, the College of Engineering and the Mysore Iron and Steel Works at Bhadrava… ### Body # Sir M. Visvesvaraya — A Biography *By T. RANGADASAPPA* ## Summary In the rendered pages, T. Rangadasappa opens a short A. D. Shroff Memorial Trust biography of Sir M. Visvesvaraya — published in 1984 to mark the engineer-statesman's 125th birth anniversary in 1985 — with front matter that frames the project in A. D. Shroff's conviction that 'a well-informed citizenry is the foundation of an enduring democracy.' N. A. Palkhivala's introduction places the volume in the Trust's series on 'the builders of modern India' and offers Visvesvaraya as an exemplar of 'absolute integrity, systematic hard work, and a total, selfless dedication to the public cause.' Chapter I, 'A Many-Splendoured Life,' sketches Visvesvaraya in the rendered pages as Bharatha Ratna engineer-statesman whose principal objective was India's economic development through planned industrialisation: the Krishnarajasagar dam on the Cauvery, the block system of irrigation, the automatic sluice gates at Lake Fife, drainage and water schemes for Poona, Hyderabad, Mysore, Sukkur, Nagpur, Bijapur and Aden, and as Dewan of Mysore the founding of the University of Mysore, the Bank of Mysore, the Chamber of Commerce, the College of Engineering and the Mysore Iron and Steel Works at Bhadravathi. The author repeatedly frames him as 'the father of economic planning in India,' citing his books 'Planned Economy for India' and 'Rural Reconstruction in India,' and reproduces in full his 1942 letter to the Viceroy's Private Secretary protesting the Government's refusal to license an Indian automobile industry — a position he held since 1934-35 — as 'unusual and against the interests of India.' Chapter II, 'Early Life and Education,' traces in the rendered pages his birth in Muddenahalli on 15 September 1861, primary education at Chickballapur under Nadhamuni Naidu, B.A. at Central College Bangalore in 1880 under Principal Charles Waters, and engineering studies at the Science College Poona (1881-83) on a scholarship granted by Rangacharlu, Dewan of Mysore. Chapter III, 'Service as Engineer,' covers his early postings in the Bombay PWD — pipe-syphon work on the Panjra River, the Sukkur water supply (1895), and the Poona irrigation rationing scheme that was opposed by Lokamanya Bal Gangadhar Tilak's paper 'Kesari' until cultivators accepted government management. It then describes the Block System of Irrigation endorsed by the Scott-Moncrieff Indian Irrigation Commission (1901), the patenting and installation of the automatic sluice gates at Khadakvasla in 1901-03, his election to the Institute of Civil Engineers London (1904), his 1906 deputation to Aden at Lord Morley's request, and his 1908 retirement after superseding eighteen senior engineers — the political climate then precluding the appointment of an Indian as Chief Engineer. Chapter IV, 'Service in Hyderabad,' begins in the rendered pages with his post-retirement European tour and the Nizam's 29 October 1908 invitation to design flood-protection works for the Musi and Easi rivers and a modern drainage system for Hyderabad city. The chunk ends after his 1922 and 1930 follow-up visits to Hyderabad; the rest of the work — covering the Mysore Dewanship in detail, the All-India Manufacturers' Organisation, his foreign travels, planning advocacy and later years — lies past page 15 in the rendered pages. ## Key points - Commissioned and distributed free by the A. D. Shroff Memorial Trust (Bombay), the biography appeared in 1984 ahead of Sir M. Visvesvaraya's 125th birth anniversary in 1985 in the rendered pages. - Front matter includes the Trust's objectives, an introduction by Chairman N. A. Palkhivala, and a single-page tribute to A. D. Shroff (1899-1965), founder of the Forum of Free Enterprise. - Chapter I frames Visvesvaraya — addressed by the title Bharatha Ratna — as an engineer-statesman whose principal objective was 'the economic development of India through industrialisation on a planned basis.' - Rangadasappa calls Visvesvaraya 'the father of economic planning in India,' citing his books 'Planned Economy for India' and 'Rural Reconstruction in India.' - A 1942 letter to the Viceroy's Private Secretary is reproduced in full, recording Visvesvaraya's protest that Government refusal to license an Indian automobile industry was 'unusual and against the interests of India.' - Chapter II covers his birth at Muddenahalli on 15 September 1861, schooling at Chickballapur and Bangalore's Central College, and engineering training at Poona's Science College (1881-83) on a Mysore Government scholarship. - Chapter III traces his Bombay PWD career: the Panjra River pipe-syphon, the Sukkur Water Works (1895), the Poona irrigation rationing scheme opposed by Tilak's 'Kesari,' the Block System of Irrigation endorsed by the Scott-Moncrieff Commission (1901), and the Khadakvasla automatic sluice gates patented and installed in 1901-03. - Chapter IV opens with the Nizam's 29 October 1908 invitation to design flood-protection schemes for the Musi and Easi rivers and a modern sewerage system for Hyderabad city, with follow-up visits in 1922 and 1930. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] Skill Ecosystem - Journey to Vocationalization of Education URL: https://indianliberals.in/primary-works/skill-ecosystem-journey-to-vocalization-of-education-s-ramadorai/ ### Summary S. Ramadorai's lecture in memory of Nani A. Palkhivala, delivered at IIT Bombay on 25 September 2018 and published by the Forum of Free Enterprise, makes the case that India's neglect of vocational education has become an existential problem. He sets out the gap with hard numbers — only about 2.3% of India's workforce has received formal skills training, against 96% in South Korea, 80% in Japan, 75% in Germany, 68% in the UK and 40% in China — and argues that the country celebrated the power of the mind and denigrated the artistry of the hands, building the IIT's but starving the ITI's. The result is a workforce unready for the structural shifts now underway: a transition from agriculture to services, modernisation, globalisation, and a knowledge economy that absorbs millions of young entrants every year. The lecture opens with an editorial introduction by Sunil S.… ### Body # Skill Ecosystem - Journey to Vocationalization of Education *By S. Ramadorai* ## Summary S. Ramadorai's lecture in memory of Nani A. Palkhivala, delivered at IIT Bombay on 25 September 2018 and published by the Forum of Free Enterprise, makes the case that India's neglect of vocational education has become an existential problem. He sets out the gap with hard numbers — only about 2.3% of India's workforce has received formal skills training, against 96% in South Korea, 80% in Japan, 75% in Germany, 68% in the UK and 40% in China — and argues that the country celebrated the power of the mind and denigrated the artistry of the hands, building the IIT's but starving the ITI's. The result is a workforce unready for the structural shifts now underway: a transition from agriculture to services, modernisation, globalisation, and a knowledge economy that absorbs millions of young entrants every year. The lecture opens with an editorial introduction by Sunil S. Bhandare and a personal tribute to Palkhivala — the public intellectual whose Union Budget lectures Ramadorai recalls as the largest public meetings ever held on an economic subject — and then unfolds across linked themes: inequity ("this inequity does not come from capability issues, it comes from lack of opportunity"); the neglect of vocational training (the oldest IIT was set up in 1951, the ITIs only in 1969); Industry 4.0 and automation (Amazon's 100,000 robots, the auto sector's 58 robots per 10,000 workers, the projected Rs. 1 lakh crore Indian big-data market by 2025); and educational reform that broadbases curricula, embeds vocational training early, recognises the dignity of skilled artisans, and uses approaches like "Rangoli to teach geometry" to bring design thinking and the arts into school. Ramadorai then narrates how skill development became a national agenda after CK Prahalad's warning around 2007–8 that a frustrated, jobless youth population was the other face of India's demographic dividend. He describes his own role since 2011 chairing the National Skill Development Agency and the National Skill Development Corporation, and the institutional architecture now in place: a Skill Ministry, NSDC-spurred private training providers, Sector Skill Councils that draft National Occupation Standards, the National Skills Qualification Framework enabling equivalence between mainstream and vocational education, and the NSDA's quality oversight. Convergence with Skill India, Digital India, Start-up India and Make in India is expected to compound the impact over three to five years. The rendered pages close on concrete pilots and a comparative gesture. The Haryana schools pilot launched in 2012 across 40 schools and 4,000 students has now grown into a national model across 27 states and union territories, 8,398 schools and 7.5 lakh students drawing on 73 NSQC-cleared job roles across 21 sectors; Brazil's three-tiered Continued Formation / Technical / Technological system is presented as a parallel. At the university level, the National University Student's Skill Development Programme (NUSSD) at TISS reaches 20,000 students across five states, with TISS-SVE supporting 7,162 active students and over 27,000 graduates, while Tata STRIVE — set up in 2014 — has touched 2.5 lakh youth. The chunk ends as Ramadorai turns to MOOCs (Coursera, Edx, Khan Academy) as instruments of opportunity equity; the remainder of the booklet is past the rendered pages. ## Key points - Only about 2.3% of India's workforce has formal skills training versus South Korea 96%, Japan 80%, Germany 75%, UK 68% and China 40% — the central diagnostic figure of the lecture. - India built the IIT's (Kharagpur, 1951) but neglected the ITI's (first founded only in 1969); Ramadorai's pithy formulation is that we celebrated the power of the mind and denigrated the artistry of the hands. - Inequity in India is framed as a problem of opportunity, not capability — illustrated with Oxfam's finding that the richest 1% hold 73% of the wealth generated in 2017. - Industry 4.0 and automation make the vocational gap existential: 58 robots per 10,000 workers in the auto industry, an estimated Rs. 1 lakh crore big-data market in India by 2025, and Amazon already running 100,000 robots — roughly one in five of its employees. - The author's prescription is to embed vocational training early, broadbase curricula (e.g. Rangoli to teach geometry), and have universities launch non-traditional degrees like BA in Retail, BSc in Environment, BCom in Logistics. - Skill development is now institutionally anchored: a Skill Ministry, NSDC, Sector Skill Councils with National Occupation Standards, the National Skills Qualification Framework, and the NSDA — converging with Skill India, Digital India, Start-up India and Make in India. - Concrete pilots show traction: the NSDC–MHRD–Haryana school model now covers 8,398 schools and 7.5 lakh students across 27 states/UTs; NUSSD at TISS reaches 20,000 students; Tata STRIVE has impacted 2.5 lakh youth. - The lecture is framed as a tribute to Nani A. Palkhivala, whose view that education's role is to enlighten understanding and enrich character is invoked as the moral horizon of the skill agenda. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] Sixth National Convention Swatantra Souvenirs 1973 URL: https://indianliberals.in/primary-works/sixth-national-convention-swatantra-souvenirs-1973/ ### Summary The rendered pages of this work (pages 1–20 of a 169-page souvenir proceedings volume) consist entirely of the cover and sponsor advertisements. Page 1 carries the cover — a full-bleed photograph of a senior Swatantra Party figure under the text 'SWANTRA PARTY / SIXTH NATIONAL CONVENTION / RAJAJI NAGAR' — and pages 2 through 20 are full-page commercial advertisements from Indian industrial and trading firms (Kirloskar Electric, The New Commercial Mills / Gopi Fabrics, The Associated Cement Companies Limited, Ram Dev Dmir & Company, and others), each carrying the footer 'SWATANTRA SOUVENIR 1973'. No title page, table of contents, editorial credit, or substantive convention content appears in the rendered pages. The editorial and proceedings content begins beyond page 20 and is not visible in this chunk. ### Body ## Summary The rendered pages of this work (pages 1–20 of a 169-page souvenir proceedings volume) consist entirely of the cover and sponsor advertisements. Page 1 carries the cover — a full-bleed photograph of a senior Swatantra Party figure under the text 'SWANTRA PARTY / SIXTH NATIONAL CONVENTION / RAJAJI NAGAR' — and pages 2 through 20 are full-page commercial advertisements from Indian industrial and trading firms (Kirloskar Electric, The New Commercial Mills / Gopi Fabrics, The Associated Cement Companies Limited, Ram Dev Dmir & Company, and others), each carrying the footer 'SWATANTRA SOUVENIR 1973'. No title page, table of contents, editorial credit, or substantive convention content appears in the rendered pages. The editorial and proceedings content begins beyond page 20 and is not visible in this chunk. --- ## [Primary work] "Social Control" Over Commercial Banks URL: https://indianliberals.in/primary-works/social-control-over-commercial-banks/ ### Summary Published by the Forum of Free Enterprise in late 1966, this 16-page booklet is a compact polemic against the Indian National Congress's then-mooted 'social control' over commercial banks, which the Forum reads as a euphemism for staged nationalisation. The pamphlet is assembled rather than authored: it opens with a syndicated article by the pseudonymous 'Candidus' reproduced from the Amrit Bazar Patrika of 15 September 1966, followed by a Times of India piece (7 October 1966) by A. S. Bhaskar, Financial Editor of that paper, and a resolution adopted by the Reserve Bank of India Employees' Association in Bombay in July 1964 opposing nationalisation. The remainder collects letters to the editor — from S. N. Iyer in Madras, S. G. Subramanian in Tirunelveli, N. Goyal in Ganganagar, and Taradas Dutt in Calcutta — alongside excerpted statements from Burma's Premier U Nu, the Soviet economist V. Tyagunenko, and the 1965 Kenyan government paper African Socialism and its Application to Planning in Kenya. The booklet is bookended by epigraphs from Eugene Black and A. D.… ### Body # "Social Control" Over Commercial Banks *By CANDIDUS* ## Summary Published by the Forum of Free Enterprise in late 1966, this 16-page booklet is a compact polemic against the Indian National Congress's then-mooted 'social control' over commercial banks, which the Forum reads as a euphemism for staged nationalisation. The pamphlet is assembled rather than authored: it opens with a syndicated article by the pseudonymous 'Candidus' reproduced from the Amrit Bazar Patrika of 15 September 1966, followed by a Times of India piece (7 October 1966) by A. S. Bhaskar, Financial Editor of that paper, and a resolution adopted by the Reserve Bank of India Employees' Association in Bombay in July 1964 opposing nationalisation. The remainder collects letters to the editor — from S. N. Iyer in Madras, S. G. Subramanian in Tirunelveli, N. Goyal in Ganganagar, and Taradas Dutt in Calcutta — alongside excerpted statements from Burma's Premier U Nu, the Soviet economist V. Tyagunenko, and the 1965 Kenyan government paper African Socialism and its Application to Planning in Kenya. The booklet is bookended by epigraphs from Eugene Black and A. D. Shroff. The core economic argument runs as follows: nationalisation does not create new resources; it merely transfers existing ones, and in doing so substitutes the bureaucratic rigidities of state ownership for the discipline of private finance. Candidus marshals figures from 1964-65 — total deposits of Rs. 2,610.22 crores, of which Rs. 727.60 crores were already invested in government securities, and a Rs. 260-crore contraction in bank credit in 1965-66 — to show that the public sector is in fact already a heavy claimant on bank resources, and that further claims would 'starve' the productive sector. Bhaskar argues that the Congress phrase 'social control' is dangerously elastic, ranging from tighter supervision to outright nationalisation, and that such uncertainty itself is corrosive to a banking system that 'cannot function best in a climate of uncertainty'. The reader letters form a second register: anecdotal indictments of the Life Insurance Corporation, the State Trading Corporation, and state electricity boards, framing public-sector enterprise as synonymous with red tape, indifference, and (in N. Goyal's words) 'incompetent and corrupt hands that are eating into the national economy like the termites'. The booklet's closing international section borrows authority from unlikely quarters — a socialist Burmese premier confessing 'blunders', a Soviet economist counselling case-by-case caution, and a Kenyan ruling-party document warning that nationalisation 'would discourage additional private investment'. The compendium's argumentative spine is that 'social control' is bad economics dressed as good politics, and that the proper alternative is a comprehensive inquiry of the kind urged by T. A. Pai, then chairman of the Food Corporation. ## Key points - Forum of Free Enterprise pamphlet (Bombay, 1966) responding to Congress proposals for 'social control' over banks and renewed Lok Sabha talk of nationalisation. - Lead article by 'Candidus' (Amrit Bazar Patrika, 15 Sept 1966) argues that nationalisation creates no new resources, citing 1964-65 deposit and credit-contraction figures to show banks already heavily fund the public sector. - A. S. Bhaskar (Times of India, 7 Oct 1966) attacks the vagueness of 'social control', noting that no Congress spokesman at the AICC's Ernakulam session had defined the phrase, and that uncertainty itself damages banking. - Reproduces the Reserve Bank of India Employees' Association Bombay resolution of 3 July 1964 dissociating itself from the campaign for nationalisation. - Compiles reader letters from S. N. Iyer, S. G. Subramanian, N. Goyal and Taradas Dutt indicting LIC, state electricity boards and the State Trading Corporation as evidence that public-sector expansion breeds inefficiency. - International section quotes Burma's Premier U Nu admitting to nationalisation 'blunders', Soviet economist V. Tyagunenko counselling caution, and the 1965 Kenyan paper African Socialism warning that nationalisation reduces growth. - Endorses T. A. Pai's proposal for a broad-based New Delhi committee to undertake a comprehensive review of rural, commercial and industrial credit before any structural change. - Closes with A. D. Shroff's aphorism — 'Free Enterprise was born with man and shall survive as long as man survives' — restating the Forum's founding creed. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] Social and Economic Significance of Insurance in Modern Economic Life URL: https://indianliberals.in/primary-works/social-and-economic-significance-of-insurance-in-modern-economic-life-prof-c-n-vakil-june-20-1970/ ### Summary Prof. C. N. Vakil delivers the third A. D. Shroff Memorial Lecture (25 March 1970) on the place of insurance in a modern, risk-laden economy. He opens with a panoramic claim about modern economic life — that the scale, speed and interdependence of production, transport and international trade have multiplied the range of personal and property risks. Insurance, he argues, is the institutional device by which these risks are shifted, and without it the gigantic enterprises of the modern world and the international trade that stimulates them would be impossible. He carefully separates Life Insurance, a long-term contract that also mobilises household savings into a large investible pool, from General Insurance, a short-term, reinsurance-driven business whose accumulated funds are necessarily modest. From this exposition Vakil pivots to a critique of how the Indian state has applied Socialism to the insurance sector. He concedes that the goals attached to the word — equality of opportunity, removal of inequality, better distribution — are largely shared across parties, but warns that the chosen instrument, nationalisation, has gone unexamined.… ### Body # Social and Economic Significance of Insurance in Modern Economic Life *By Prof. C. N. Vakil* ## Summary Prof. C. N. Vakil delivers the third A. D. Shroff Memorial Lecture (25 March 1970) on the place of insurance in a modern, risk-laden economy. He opens with a panoramic claim about modern economic life — that the scale, speed and interdependence of production, transport and international trade have multiplied the range of personal and property risks. Insurance, he argues, is the institutional device by which these risks are shifted, and without it the gigantic enterprises of the modern world and the international trade that stimulates them would be impossible. He carefully separates Life Insurance, a long-term contract that also mobilises household savings into a large investible pool, from General Insurance, a short-term, reinsurance-driven business whose accumulated funds are necessarily modest. From this exposition Vakil pivots to a critique of how the Indian state has applied Socialism to the insurance sector. He concedes that the goals attached to the word — equality of opportunity, removal of inequality, better distribution — are largely shared across parties, but warns that the chosen instrument, nationalisation, has gone unexamined. Public sector undertakings, he observes, run continuing losses borne by the taxpayer; large private firms are discouraged from growing, against the elementary principle of economies of scale; and the public sector, though nominally accountable to Parliament, is in practice controlled by a ruling majority that protects its decisions from scrutiny. He coins the phrase "the luxury of Socialism at the cost of the tax-payer" to describe this arrangement. Applying the same lens to the LIC, Vakil notes that the Corporation now commands roughly Rs. 1,260 crores of policy-holders' savings and has become a major financing agency. He calls for a fresh review of whether nationalisation has actually advanced Life Insurance compared with what the old private companies might have achieved, and presents tables showing that LIC investments are overwhelmingly directed into Central and State Government securities and public sector enterprises (about 81.7 per cent), with only 17.8 per cent reaching the private sector. He concedes the legitimacy of objectives such as housing finance, regional balance and aid to backward states, but insists that without convincing evidence of public good — measured against the interests of policy-holders — the socialist credentials of such a measure cannot be taken for granted. ## Key points - Modern industry, international trade and personal life all generate risks (death, accident, fire, shipwreck, storm) that only insurance can pool and shift, making it foundational to economic stability and freedom. - Vakil distinguishes Life Insurance — a long-term, savings-mobilising contract — from General Insurance, a one-year, reinsurance-dependent business that cannot accumulate large funds. - He treats the nationalisation of Life Insurance as a settled fact but presses the question of whether progress under the LIC has surpassed what private companies might have achieved. - He critiques the Fourth Plan and the policy climate for assigning the public sector a dominant position while diverting household savings into loss-making state undertakings whose burden falls on the taxpayer. - He warns that hostility to large private industrial units violates the elementary principle of economies of scale and discourages proven industrialists from expanding output. - He attacks asymmetric regulation: stringent Company Law over the private sector but only post-mortem parliamentary accountability for the public sector. - On LIC funds of about Rs. 1,260 crores, he shows that roughly 81.7 per cent of investments flow into the public sector (Central and State securities, PSUs, cooperatives) and only 17.8 per cent into the private sector. - He concludes that nationalisation cannot claim socialist legitimacy unless it produces convincing, demonstrable benefit for policy-holders and the common man. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] SOCIAL ENTREPRENEURSHIP URL: https://indianliberals.in/primary-works/social-entrepreneurship-dr-mrs-indu-shahani-april-4-2009/ ### Summary Indu Shahani's twentieth Bhogilal Leherchand Memorial Lecture, delivered on 15 December 2008 and published by the Forum of Free Enterprise in April 2009, makes the case that social entrepreneurship — the disciplined application of entrepreneurial tools to large-scale social problems — is the most promising response to the limits of charity, philanthropy and state provision. Shahani opens with the story that drew her into the subject: shortly after becoming the 110th Sheriff of Mumbai she was approached by two returnees from England who proposed the "Dial 1298 for Ambulance" service, a cross-subsidy ambulance network modelled on the London Ambulance Service that has grown from two to fifty-one vehicles in three years. She defines a social entrepreneur as one who, unlike a business entrepreneur, measures success in terms of impact on society, and sketches an operational framework: a public good delivered to those who cannot otherwise access it; both the founder and the organisation acting as catalysts of change; and the founder eventually morphing into a figurehead for a wider movement. The lecture roams across historical exemplars (Susan B.… ### Body # SOCIAL ENTREPRENEURSHIP *By Dr. (Mrs.) Indu Shahani* ## Summary Indu Shahani's twentieth Bhogilal Leherchand Memorial Lecture, delivered on 15 December 2008 and published by the Forum of Free Enterprise in April 2009, makes the case that social entrepreneurship — the disciplined application of entrepreneurial tools to large-scale social problems — is the most promising response to the limits of charity, philanthropy and state provision. Shahani opens with the story that drew her into the subject: shortly after becoming the 110th Sheriff of Mumbai she was approached by two returnees from England who proposed the "Dial 1298 for Ambulance" service, a cross-subsidy ambulance network modelled on the London Ambulance Service that has grown from two to fifty-one vehicles in three years. She defines a social entrepreneur as one who, unlike a business entrepreneur, measures success in terms of impact on society, and sketches an operational framework: a public good delivered to those who cannot otherwise access it; both the founder and the organisation acting as catalysts of change; and the founder eventually morphing into a figurehead for a wider movement. The lecture roams across historical exemplars (Susan B. Anthony, Florence Nightingale, Maria Montessori, Margaret Sanger, John Muir, Jean Monnet, Vinoba Bhave) and contemporary cases (Verghese Kurien's Amul, Muhammad Yunus's Grameen Bank, Dr. V.'s Aravind Eye Care, Bunker Roy's Barefoot College, Ela Bhatt's SEWA, Vikram Akula's SKS Microfinance, HUL's Project Shakti, and Dhruv Lakra's Mirakle Couriers). Shahani frames the moment as one in which corporations, NGOs and citizen groups are converging on hybrid for-profit / non-profit models that combine, in Peter Drucker's phrase, business discipline with social mission. She quotes C. K. Prahalad's bottom-of-the-pyramid thesis and Hilde Schwab's Schwab Foundation work, argues that business schools must absorb social entrepreneurship into their curricula (citing Gregory Dees), and closes by urging India's youth to lead the way — capitalism, she contends, is the efficient creator of wealth, socialism the more equitable distributor, and a marriage of the two is desirable provided it is built on integrity and transparency. The booklet also carries an editor's note by S. S. Bhandare and a tribute biography of the lecture's namesake, the Bombay diamond and textile industrialist Bhogilal Leherchand (1894–), who is described as a staunch nationalist close to Mahatma Gandhi and Sardar Vallabhbhai Patel. ## Key points - Distinguishes a social entrepreneur (measures success by societal impact) from a business entrepreneur (measures profits, growth, diversification), while insisting both operate within an entrepreneurial framework of innovation and self-sustainability. - Uses the Mumbai "Dial 1298 for Ambulance" service — a cross-subsidy model where private hospital calls subsidise government and below-poverty-line calls — as the personal case study that drew Shahani into the field as Sheriff of Mumbai. - Surveys historical and global exemplars (Anthony, Nightingale, Montessori, Sanger, Muir, Monnet, Vinoba Bhave) and Indian cases (Amul, SEWA, Aravind Eye Care, Barefoot College, SKS Microfinance, HUL Project Shakti, Mirakle Couriers). - Endorses C. K. Prahalad's bottom-of-the-pyramid thesis and Peter Drucker's claim that "it profits us to profit the non-profits", arguing hybrid for-profit / non-profit models are the future. - Calls on business schools and corporates to embed social entrepreneurship in MBA curricula (citing Gregory Dees) and praises corporate schemes such as the Tata International Social Entrepreneurship Scheme and the Nand & Jeet Khemka Foundation's Social Entrepreneur of the Year Awards. - Concludes that capitalism efficiently creates wealth and socialism more equitably distributes it, and that a synthesis of the two — disciplined by integrity, capability and transparency — is the right paradigm for social ventures. - Appended biography of Bhogilal Leherchand (b.16 April 1894), the Bombay diamond and textile-mill industrialist whose motto was "simple living and high thinking", a nationalist close to Mahatma Gandhi and Sardar Vallabhbhai Patel. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] SOCIAL FORESTRY FOR INDIA URL: https://indianliberals.in/primary-works/social-forestry-for-india-y-m-l-sharma-october-14-1976/ ### Summary Y. M. L. Sharma, a retired Chief Conservator of Forests for Karnataka and visiting professor of Farm Forestry at the University of Agricultural Sciences, Bangalore, uses this Forum of Free Enterprise booklet to make the case that forestry must be reconceived as a basic developmental asset on par with power, irrigation and agriculture. He opens with a survey of India's forest endowment — sixteen major forest types covering 22.7 per cent of the country, 93 per cent state-owned, much of it degraded — and contrasts the country's per-hectare forest revenue (Rs 21.50 gross, Rs 11.50 net) with West Germany (Rs 565/130), Switzerland (Rs 494/190) and Austria, to show how dramatically India under-invests in and under-realises its forest wealth. The booklet's central argument is that 'production forestry' alone — the National Commission on Agriculture's plan to raise one lakh hectares of manmade forests a year at Rs 242 crores in the first decade — will not meet the country's swelling demands for fuel wood, fodder, manure leaf and small timber.… ### Body # SOCIAL FORESTRY FOR INDIA *By Y. M. L. Sharma, IFS (Retd)* ## Summary Y. M. L. Sharma, a retired Chief Conservator of Forests for Karnataka and visiting professor of Farm Forestry at the University of Agricultural Sciences, Bangalore, uses this Forum of Free Enterprise booklet to make the case that forestry must be reconceived as a basic developmental asset on par with power, irrigation and agriculture. He opens with a survey of India's forest endowment — sixteen major forest types covering 22.7 per cent of the country, 93 per cent state-owned, much of it degraded — and contrasts the country's per-hectare forest revenue (Rs 21.50 gross, Rs 11.50 net) with West Germany (Rs 565/130), Switzerland (Rs 494/190) and Austria, to show how dramatically India under-invests in and under-realises its forest wealth. The booklet's central argument is that 'production forestry' alone — the National Commission on Agriculture's plan to raise one lakh hectares of manmade forests a year at Rs 242 crores in the first decade — will not meet the country's swelling demands for fuel wood, fodder, manure leaf and small timber. Sharma draws on Jack Westoby's distinction between production forestry and social forestry to argue that the latter — trees grown on village commons, farm margins, canal banks, railway and power-line corridors, foreshores of tanks and reservoirs, eroded lands and sand dunes for the direct benefit of nearby communities — must be pursued aggressively. Without it, he warns, 22 million tonnes of cowdung a year will continue to be burnt for fuel instead of returned to soil, and agricultural residues like bagasse, paddy straw and groundnut husk will be diverted from industry to the hearth. A programmatic middle section sketches a concrete pattern of planting for dry and wet land — Tamarind, Jack, Sapota, Eucalyptus/Casuarina, Glyricidia, Pongamia, Sesbania, Siris, neem, Acacia, bamboo and sandalwood — and projects that farm forestry on India's 136 million hectares of dry land and 30 million hectares of irrigated land could yield, over thirty years, 375 million tonnes of fuel, 1,000 million m³ of timber, 500 million tonnes of manure leaf, 100 million tonnes of fodder and 25 million tonnes of pulpwood. Sharma calls for an independent state-level Department of Social Forestry and Environment, points to Karnataka's farm-forestry experiment around Bangalore as a working example, and recommends that the State foot part of the bill since the benefits accrue to the country at large. ## Key points - India's forest area (22.7% of land) is largely state-owned (93%) and degraded, with about 60% lying in scanty-rainfall zones and only 0.2% of the rural workforce engaged in forestry. - Per-hectare forest revenue and investment in India lag dramatically behind Austria, the UK, West Germany, Switzerland, Japan and Korea — Sharma's headline data point for under-utilisation. - The National Commission on Agriculture's production-forestry programme alone cannot meet rising demand for industrial wood (projected to rise from 8.92 to 41 million m³ by 1990) or fuel wood (shortage of 21 million tonnes by 1980-81). - Sharma adopts Jack Westoby's distinction between production forestry (industrial/household wood) and social forestry (community protection and recreation benefits) and argues both must be funded. - Social forestry would substitute for the 22 million tonnes of cowdung burnt as fuel in 1974-75 and free agricultural residues (bagasse, paddy straw, groundnut husk, castor stalks) for industry. - The booklet proposes a six-pronged social-forestry programme: farm forestry, extension forestry on village commons, afforestation of canal banks, railway tracks, high-tension-line corridors, roadsides, tank/reservoir foreshores, and reclamation of eroded lands, sand dunes and mining areas. - A suggested species-and-spacing pattern integrates forestry with agriculture and horticulture, projecting 375 million tonnes of fuel and 1,000 million m³ of timber over 30 years from dry and irrigated land combined. - Sharma recommends an independent state-level Department of Social Forestry and Environment, citing Karnataka farmers near Bangalore raising Casuarina and Eucalyptus for the city's fuel needs as a working model. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] SOCIAL INSURANCE IN INDIA URL: https://indianliberals.in/primary-works/social-insurance-in-india-b-p-adarkar-june-22-1973/ ### Summary Delivered on 22 June 1973 as the A. D. Shroff Memorial Lecture on Insurance, this is Prof. B. P. Adarkar's retrospective on the social insurance system whose foundations he himself laid in 1944 with his Report on Health Insurance — the document Sardar Patel famously dubbed the work of the 'chhota Beveridge.' Adarkar opens with a striking personal grievance: that the Indian 'Steel Frame' bureaucracy effectively ejected him from his own scheme, terminated his contract in 1946, and similarly drove out his successor Dr. C. L. Katial in 1953 — a pattern he generalises into his 'favourite dictum that In India, it is not Science but Nescience that rules.' The rendered chapters define the scope of social insurance (drawing on Beveridge's 'Five Giants' and ILO doctrine), distinguish it from social assistance, and chart the progress of Indian schemes since 1952. Adarkar walks through the Employees' State Insurance Scheme (ESIS), the Employees' Provident Fund (EPF), the Coal Mines and Assam Tea Plantations Provident Fund Schemes, and lay-off/retrenchment compensation, with detailed statistics on coverage growth — ESIS alone now serving 16.7 million beneficiaries.… ### Body # SOCIAL INSURANCE IN INDIA *By Prof. B. P. ADARKAR* ## Summary Delivered on 22 June 1973 as the A. D. Shroff Memorial Lecture on Insurance, this is Prof. B. P. Adarkar's retrospective on the social insurance system whose foundations he himself laid in 1944 with his Report on Health Insurance — the document Sardar Patel famously dubbed the work of the 'chhota Beveridge.' Adarkar opens with a striking personal grievance: that the Indian 'Steel Frame' bureaucracy effectively ejected him from his own scheme, terminated his contract in 1946, and similarly drove out his successor Dr. C. L. Katial in 1953 — a pattern he generalises into his 'favourite dictum that In India, it is not Science but Nescience that rules.' The rendered chapters define the scope of social insurance (drawing on Beveridge's 'Five Giants' and ILO doctrine), distinguish it from social assistance, and chart the progress of Indian schemes since 1952. Adarkar walks through the Employees' State Insurance Scheme (ESIS), the Employees' Provident Fund (EPF), the Coal Mines and Assam Tea Plantations Provident Fund Schemes, and lay-off/retrenchment compensation, with detailed statistics on coverage growth — ESIS alone now serving 16.7 million beneficiaries. He then frames the progress as three phases (Initial Planning 1942–48, Structural Foundation 1948–52, Expansion since 1952) and reviews three major investigations: the V. K. R. Menon Study Group (1957–58), the C. R. Pattabhi Raman ESI Review Committee (1963–66), and the P. B. Gajendragadkar National Commission on Labour (1969). The rendered pages end inside Chapter IV's appraisal of ESIS, where Adarkar levels sharp criticisms: the ESI Corporation is 'over-administered and underfinanced by the Central Government,' the board is bloated by State-wise representation, employees and employers are under-represented despite paying for most of the scheme, and — most galling to him — the Centre, after 1953, makes no contribution of any kind to the ESI Fund, even as it preaches socialism and a 'socialistic pattern of society.' The chunk closes mid-argument as he turns to the contribution structure. ## Key points - Adarkar designed the original 1944 Indian health insurance scheme and was nicknamed the 'chhota Beveridge' by Sardar Patel; he treats this lecture as both a memorial and a settling of accounts. - He argues social insurance is not a luxury India cannot afford — quoting Beveridge that 'the poorer you are, the more you need it' — and that piecewise schemes can later be welded into a Beveridge-style comprehensive plan. - Detailed statistics document the growth of ESIS (from 120,000 employees in Delhi and Kanpur in 1952 to 4.59 million covered and 16.7 million beneficiaries by 31.3.1972) and the EPF (from 1.2 million to 5.7 million subscribers). - He periodises Indian social insurance into three phases — Initial Planning (1942–48), Structural Foundation (1948–52), Expansion (1952 onward) — anchored to specific Acts and committees. - He summarises three major investigative committees: the V. K. R. Menon Study Group (1957–58) recommending unification of ESI and EPF, the C. R. Pattabhi Raman ESI Review Committee (1963–66) with 176 recommendations, and the P. B. Gajendragadkar National Commission on Labour (1969). - The appraisal of ESIS faults the Corporation as 'over-administered and underfinanced' by the Centre, bloated by State-wise representation, and dominated by officials while employees and employers underwrite the scheme. - Adarkar reserves his sharpest criticism for the Central Government's withdrawal of all contributions to ESI after 1953, contrasting this with its rhetoric of socialism and a 'socialistic pattern of society.' - A recurring polemical thread is the failure to give the expert his 'rightful place,' replaced by 'instant government' from dilettante officials advising 'half-educated Ministers' — a planning-state critique grounded in personal experience. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] Socialism and Poverty URL: https://indianliberals.in/primary-works/socialism-and-poverty-c-r-irani-10-january-1971/ ### Summary Delivered as the A. D. Shroff Memorial Lecture at Calcutta on 27 October 1970 and published by the Forum of Free Enterprise in January 1971, C. R. Irani's address traces the word 'Socialism' from its early-nineteenth-century origins to its uses in independent India. Irani walks the audience through the founding figures — Robert Owen, P. J. Proudhon, Ferdinand LaSalle, Louis Blanc, and the Fabians, particularly George Bernard Shaw — to argue that early Socialism was a moral protest against the abuses of the Industrial Revolution, never a finite economic doctrine. He treats Karl Marx's intervention as a rupture rather than a continuation: Marx hardened a humanist protest into rigid dogma, despised the peasantry, and bequeathed prophecies that subsequent history has falsified. Irani leans heavily on Milovan Djilas's account of the 'New Class' to argue that twentieth-century Communism produced not the withering of the State but its capture by a privileged bureaucratic minority. The second half of the lecture turns to India. Irani contends that the country's central problem is not distribution but production: dividing existing wealth would only spread poverty.… ### Body # Socialism and Poverty *By C. R. Irani* ## Summary Delivered as the A. D. Shroff Memorial Lecture at Calcutta on 27 October 1970 and published by the Forum of Free Enterprise in January 1971, C. R. Irani's address traces the word 'Socialism' from its early-nineteenth-century origins to its uses in independent India. Irani walks the audience through the founding figures — Robert Owen, P. J. Proudhon, Ferdinand LaSalle, Louis Blanc, and the Fabians, particularly George Bernard Shaw — to argue that early Socialism was a moral protest against the abuses of the Industrial Revolution, never a finite economic doctrine. He treats Karl Marx's intervention as a rupture rather than a continuation: Marx hardened a humanist protest into rigid dogma, despised the peasantry, and bequeathed prophecies that subsequent history has falsified. Irani leans heavily on Milovan Djilas's account of the 'New Class' to argue that twentieth-century Communism produced not the withering of the State but its capture by a privileged bureaucratic minority. The second half of the lecture turns to India. Irani contends that the country's central problem is not distribution but production: dividing existing wealth would only spread poverty. He quotes Jawaharlal Nehru's Kathmandu admission that 'Socialism in a poor country only distributes poverty' to argue that India's official creed has been pursued in defiance of its author's own caveat, with the result that 'Socialism has become a dirty word' and an Indian New Class has consolidated behind the licensing and controls regime. He then applies Gandhi's talisman — recall the face of the poorest and helpless man — to a battery of empirical tests: per-capita income at constant prices, food-grain and milk availability, the cost of living, exports, employment, and the comparative distribution of national income against Norway, France and West Germany. The statistics are uniformly indicting. Per-capita income at constant prices was lower in 1968/69 than in 1960/61; food-grain availability had fallen from 394 to 438 grammes per head (sic); the licence-permit raj had become, in the Central Vigilance Commissioner Subimal Dutt's phrase, 'a happy hunting ground for the corrupt and the dishonest'; exports were short of the Fourth Plan target by 11 per cent; the back-log of unemployment had grown across three Plan periods even as the Fourth Plan document quietly dropped any mention of the figure. Throughout, Irani's polemical move is to insist that nationalisation, controls and Socialist rhetoric have neither produced wealth nor equalised it — they have instead empowered an unaccountable administrative class and stifled the productive capacity that alone can banish poverty. The rendered chunk closes mid-argument on unemployment statistics, with the lecture's prescriptive conclusions still to come. ## Key points - Frames Socialism historically as a nineteenth-century humanist reaction to the Industrial Revolution rather than as an economic system, citing Owen, Proudhon, LaSalle, Louis Blanc and the Fabians. - Treats Karl Marx as the figure who hardened a fluid set of principles into rigid dogma, and uses Professor Parkinson's biographical critique to argue Marx lacked any practical experience of the world. - Relies on Milovan Djilas's 'New Class' thesis to argue that Communism in practice produces a privileged bureaucratic minority rather than emancipation of workers or peasants. - Argues that India's core problem is the production of wealth, not its distribution: dividing existing wealth among the population would only redistribute poverty. - Invokes Nehru's Kathmandu admission that 'Socialism in a poor country only distributes poverty' to charge that Indian policy has ignored its own architect's caveat. - Marshals data — per-capita income at constant prices falling between 1960/61 and 1968/69, declining milk and edible-oil consumption, modest food-grain and cotton-cloth gains — to indict twenty years of Socialist planning. - Identifies industrial licensing, the regulatory apparatus and 'speed money' (citing CVC Subimal Dutt) as the mechanism through which an Indian 'New Class' has entrenched itself. - Closes the rendered portion by pivoting to unemployment, noting that the back-log grew across the first three Plans and that the Fourth Plan document drops the figure entirely. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] Some Aspects of Corporate Management URL: https://indianliberals.in/primary-works/some-aspects-of-corporate-management-steve-dembicki-c-c-sutaria-krishna-basrur-july-1969/ ### Summary This July 1969 Forum of Free Enterprise booklet collects three short essays drawn from the Forum's 'New Horizons in Corporate Sector' lecture series, prefaced by an introduction that frames the corporate sector as decisive for India's industrial development and warns that company law, tax incidence, labour legislation and the general attitude of government and public toward business 'can impede or accelerate the growth of the corporate sector'. Steve Dembicki (a recently retired ILO Chief of Project) argues that India's growth gap is fundamentally a management gap and lays out a philosophy of management development; C. C. Sutaria (President of the Institute of Secretaries) makes a sustained defence of the managing agency system against the 1970 abolition, charging that the decision was driven by 'politics and ideologies rather than economic factors'; and Mrs. Krishna Basrur (Editor of the Consumer Guidance Society Bulletin) sets out the social responsibilities of management toward consumers — safety, honest workmanship, quality standards, continuity of supply — closing with a call for an industrialist's rather than a financier's outlook.… ### Body # Some Aspects of Corporate Management ## Summary This July 1969 Forum of Free Enterprise booklet collects three short essays drawn from the Forum's 'New Horizons in Corporate Sector' lecture series, prefaced by an introduction that frames the corporate sector as decisive for India's industrial development and warns that company law, tax incidence, labour legislation and the general attitude of government and public toward business 'can impede or accelerate the growth of the corporate sector'. Steve Dembicki (a recently retired ILO Chief of Project) argues that India's growth gap is fundamentally a management gap and lays out a philosophy of management development; C. C. Sutaria (President of the Institute of Secretaries) makes a sustained defence of the managing agency system against the 1970 abolition, charging that the decision was driven by 'politics and ideologies rather than economic factors'; and Mrs. Krishna Basrur (Editor of the Consumer Guidance Society Bulletin) sets out the social responsibilities of management toward consumers — safety, honest workmanship, quality standards, continuity of supply — closing with a call for an industrialist's rather than a financier's outlook. The volume's argumentative centre is a Forum-of-Free-Enterprise defence of the corporate sector as the engine of Indian economic development at a moment when government policy was tightening around it. ## Essays ### Management Development *By STEVE DEMBICKI* Steve Dembicki's short address argues that the gap between the United States and even economically advanced Europe — borrowing Servan-Schreiber's 'American Challenge' framing — is essentially a management gap and not a technological one, and that India's industrial development hinges on closing it. He insists that 'ordinary men are capable of being developed to give extraordinary performance', that authorities and institutions can supply climate and encouragement but learning is ultimately a personal act after formal education ends, and that the discipline rests on three sound principles: selecting the right people, placing them in the right jobs, and allowing them to grow in their own interests as well as the organisation's. The essay points the reader to a back-of-booklet list of seventeen recommended management titles for further study. - Frames India's development challenge as a management gap rather than a technological gap, citing Servan-Schreiber's 'The American Challenge'. - Asserts that ordinary people can be developed into extraordinary performers given the right climate, delegation and learning conditions. - Distinguishes formal academic training from the more important 'most important phase' of learning from actual experience under qualified managers. - Reduces effective management development to three principles: selecting the right people, placing them in the right jobs, and letting them grow for themselves and the organisation. - Curates seventeen Anglo-American management titles (Drucker, Galbraith, Sloan, McClelland, Carnegie, Servan-Schreiber and others) as a study list for Indian managers. ### Abolition of Managing Agency & Change in the Pattern of Company Management *By C. C. SUTARIA* C. C. Sutaria's address mounts a defence of the managing agency system on the eve of its statutory abolition in 1970, arguing that the Company Law Committee, the Joint-Stock Committee and the I. G. Patel inquiry committee all recommended mending rather than ending the system, and that 674 managing agents had financed, promoted and day-to-day-managed nearly all Indian industry at low cost because their remuneration was contingent on profit. He concedes some abuses but charges that Government has been 'guided by politics and ideologies rather than economic factors' and that the cure — costlier managing-director and consultancy substitutes, paid in fixed salaries outside the purview of Sections 198 and 309 of the Companies Act — 'will prove worse than the disease'. He warns that with a paucity of professional managerial talent in India, a 'sudden and hurried step' will damage industrial development and that the system may quietly return in another form, at greater cost. The essay closes with a short bibliography of company-law references. - Frames the 1970 abolition of the managing agency system as a politically driven decision against the advice of the Company Law Committee and the I. G. Patel inquiry committee, which urged 'hastening slowly'. - Argues the managing agency was uniquely Indian, inexpensive and efficient because remuneration was tied to net profits, giving agents a 'strong urge to maximise profits by optimum efficiency and economy'. - Credits managing agents with three functions — pioneering new industries, mobilising idle public capital, and providing day-to-day management — and with delivering returns the public sector has failed to provide. - Predicts that replacement by Boards of Directors or Managing Directors will be costlier because their fixed salaries fall outside the profit-link discipline and outside government remuneration control under Companies Act Sections 198 & 309. - Concludes that with a 'dearth of professional managers' the changeover risks halting industrial growth and that, history being a guide, the system may return 'in one form or other' at greatly increased cost. ### Social Responsibilities of Management Towards Consumers *By Mrs. KRISHNA BASRUR* Mrs. Krishna Basrur argues that businessmen's primary responsibility to consumers is safety — violated whenever foodstuffs are adulterated, electrical appliances are defective, toys carry toxic paint, cigarettes are glamorised to the young, cars are shoddily built or buildings collapse from poor materials — and she cites the free sale of Metanil yellow, a prohibited colouring sold as edible across Bombay and 'perhaps all over India', as a concrete example. She extends the duty to honest workmanship and quality control, presses for adoption of National Standards and certification of consumer goods, and rejects the industry argument that certification weakens brand names. She closes with a contrast that is the moral centre of the essay: India needs less of the 'financier's outlook' — quick returns, sellers' markets, exhausted markets abandoned — and more of the 'true industrialist's approach' who 'builds for the future' and 'works not with money, but with things bearing his name and with people'. - Defines consumer safety as the primary social responsibility of business and indicts adulteration, defective appliances, toxic toys, shoddy cars and unsafe construction. - Cites the open sale of Metanil yellow — a prohibited edible colouring — in Bombay as a concrete failure of consumer protection. - Argues for honest workmanship, strict quality control and adoption of National Standards in consumer goods, dismissing the 'certification weakens brand names' objection. - Calls for a joint consumer-trader body to investigate sharp practices and faults businesses for hoarding-style supply discontinuity that forces consumers into queues. - Closes with a normative contrast between the short-horizon 'financier's outlook' and the long-horizon 'true industrialist's approach' as the kind of free enterprise worth believing in. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] SOCIALISM—HAS IT BECOME A DOCTRINE OF THE PAST? URL: https://indianliberals.in/primary-works/socialism-has-it-become-a-doctrine-of-the-past-by-ad-shroff/ ### Summary A. D. Shroff's pamphlet, issued by the Forum of Free Enterprise, mounts a brisk polemic against the Indian socialist consensus of the late 1950s. Shroff opens by inverting the familiar charge that free-enterprise advocates are 'out of date': in his telling, it is the Indian socialists and communists who cling to dogmas that even Austria, Yugoslavia and the United Kingdom's own Labour Party have begun to discard. To make that case he marshals a string of testimonies from senior British Labour figures — Clement Attlee, Aneurin Bevan, R. H. S. Crossman, Norman Dodds, Francis Noel-Baker, and the economist Thomas Balogh — each conceding that nationalisation had failed to deliver on its theoretical promises and had often left workers and consumers worse off than under private industry. Shroff then turns the lens onto India. He argues that the country's public-sector enterprises, far from being more humane or efficient than private firms, have generated a bureaucratic class he calls 'Chota Hitlers' — officials so convinced of their own indispensability that they cannot conceive of the private sector outperforming them.… ### Body # SOCIALISM—HAS IT BECOME A DOCTRINE OF THE PAST? *By A. D. Shroff* ## Summary A. D. Shroff's pamphlet, issued by the Forum of Free Enterprise, mounts a brisk polemic against the Indian socialist consensus of the late 1950s. Shroff opens by inverting the familiar charge that free-enterprise advocates are 'out of date': in his telling, it is the Indian socialists and communists who cling to dogmas that even Austria, Yugoslavia and the United Kingdom's own Labour Party have begun to discard. To make that case he marshals a string of testimonies from senior British Labour figures — Clement Attlee, Aneurin Bevan, R. H. S. Crossman, Norman Dodds, Francis Noel-Baker, and the economist Thomas Balogh — each conceding that nationalisation had failed to deliver on its theoretical promises and had often left workers and consumers worse off than under private industry. Shroff then turns the lens onto India. He argues that the country's public-sector enterprises, far from being more humane or efficient than private firms, have generated a bureaucratic class he calls 'Chota Hitlers' — officials so convinced of their own indispensability that they cannot conceive of the private sector outperforming them. He cites the gulf between scheme estimates and outcomes at the Bhilai and Rourkela steel plants, the army of foreign technicians employed there, and the cost overruns of public projects as evidence that the dirigiste model is delivering 'typical bureaucratic phenomena' rather than rapid development. He contrasts this with the Tatas' expansion, which made do with a far smaller cadre of American technicians. The pamphlet closes on a note of cautious optimism: Shroff sees a growing constituency in India that is alive to the threat socialism poses to individual freedom and the democratic way of life, and he urges his readers to keep voicing dissent 'without fear or favour' until 'the day of deliverance from the horrors of a socialist society' arrives. Page 4 is a Forum of Free Enterprise membership pitch and imprint, naming M. R. Pai as the publisher. ## Key points - Shroff frames Indian socialists as the ones 'out of date,' citing Austria, Yugoslavia and Britain's own retreat from nationalisation dogma. - He stacks his case with quotations from British Labour figures (Attlee, Bevan, Crossman, Dodds, Noel-Baker) and the socialist economist Balogh, all conceding that nationalisation had not lived up to its theory. - Balogh is quoted reversing the familiar moral indictment of private industry: nationalised industry's treatment of its own workers is 'if anything, worse.' - Shroff coins the phrase 'Chota Hitlers' to describe Indian bureaucrats whose arrogance, in his view, blocks the private sector from doing the developmental work it is capable of. - He uses Bhilai (700 Russian technicians) and Rourkela (800 German technicians) as comparators against the Tatas' expansion, which employed 115 American technicians from Kaisers — public-sector projects, he claims, exceed estimates 'beyond reasonable measure.' - He reports that the Prime Minister himself acknowledged the private sector's competence, citing Tatas' 50 years of experience, before later defending the public sector against journalists' criticism. - Shroff sees a rising Indian constituency dissatisfied with the dirigiste consensus and urges them to dissent openly until 'the day of deliverance from the horrors of a socialist society' arrives. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] Some Light On "Coal Discoveries" URL: https://indianliberals.in/primary-works/some-light-on-coal-discoveries-by-kv-subrahmanyam-november-8-1960/ ### Summary This two-page letter to the editor, originally published in The Hindustan Times on 8 October 1960 and reprinted by the Forum of Free Enterprise, challenges a series of government mineral-discovery announcements as politically convenient fiction. K. V. Subrahmanyam opens by recalling a decade-old announcement by K. D. Malaviya — then Secretary in the Ministry — of a gold belt in Orissa that proved to be a hoax, followed shortly by a similar claim about sulphur deposits in Kashmir that likewise never materialised. He then turns to Malaviya's more recent announcements: huge copper deposits at Khetri in Rajasthan compared favourably to Katanga and the Rhodesias, and, most damagingly, the 'discovery' of coking coal at Korba (Madhya Pradesh) timed to justify siting a million-ton steel plant there. Subrahmanyam argues that the Korba coalfield was no discovery at all — it had been known to and worked by the coal industry long before Malaviya was born. The real scandal, he contends, is India's acute and continuing shortage of high-quality coking coal: railway operations and steel plants at Bhilai and Rourkela have been crippled by the shortage, and experts including J. J.… ### Body ## Summary This two-page letter to the editor, originally published in The Hindustan Times on 8 October 1960 and reprinted by the Forum of Free Enterprise, challenges a series of government mineral-discovery announcements as politically convenient fiction. K. V. Subrahmanyam opens by recalling a decade-old announcement by K. D. Malaviya — then Secretary in the Ministry — of a gold belt in Orissa that proved to be a hoax, followed shortly by a similar claim about sulphur deposits in Kashmir that likewise never materialised. He then turns to Malaviya's more recent announcements: huge copper deposits at Khetri in Rajasthan compared favourably to Katanga and the Rhodesias, and, most damagingly, the 'discovery' of coking coal at Korba (Madhya Pradesh) timed to justify siting a million-ton steel plant there. Subrahmanyam argues that the Korba coalfield was no discovery at all — it had been known to and worked by the coal industry long before Malaviya was born. The real scandal, he contends, is India's acute and continuing shortage of high-quality coking coal: railway operations and steel plants at Bhilai and Rourkela have been crippled by the shortage, and experts including J. J. Ghandy had warned against adding another steel plant at Bokaro until supply was secured. He closes by noting that the Geological Survey of India and Bureau of Mines — whose geologists had already spent five years drilling the relevant areas with diamond-drill holes — are the technically competent authorities on coal reserves, not ministers wielding political power to 'cook up figures.' ## Key points - Subrahmanyam documents a pattern of false mineral 'discoveries' announced by K. D. Malaviya stretching back a decade: a gold belt in Orissa (proved a hoax) and sulphur in Kashmir (never materialised). - Malaviya's recent claim of giant copper deposits at Khetri, ranked alongside Katanga and the Rhodesias, is presented as the latest in this series of inflated announcements. - The centrepiece of the letter is the 'discovery' of coking coal at Korba (Madhya Pradesh), which Subrahmanyam says was known to the coalfields of Bengal and Bihar well before Malaviya was born. - India has faced an acute shortage of good-quality coking coal: steel plants at Bhilai and Rourkela cannot start for want of coke, and railway operations suffer because locomotive drivers lack coal to fire stone-burning engines. - Expert opinion, including that of J. J. Ghandy, advised against a new steel plant at Bokaro given the coking-coal supply crisis. - The Geological Survey of India and the Bureau of Mines had already spent five years systematically drilling the relevant areas with diamond-drill holes — making political 'discoveries' redundant and misleading. - Subrahmanyam implies the true purpose of the announcements is to silence political critics and justify investment decisions, not to report genuine geological findings. --- ## [Primary work] Some Reflections on the Food Problem in India URL: https://indianliberals.in/primary-works/some-reflections-on-the-food-problem-in-india-t-a-pai-september-11-1966/ ### Summary T. A. Pai, identified on the title page as the first Chairman of the Food Corporation of India, delivers a sharply practical critique of India's food policy seventeen years after independence and three Five-Year Plans. Writing in September 1966 against the backdrop of monsoon failures and continued dependence on imported wheat (notably PL-480 shipments from the United States), Pai argues that India faces a still graver problem as its population swells by another 7.5 crores in the coming five years, and that the only durable answer is to raise per-acre yields through hybrid seeds, fertilisers, assured water, and chemical pest control — a technology-led agricultural revolution rather than another round of incremental planning. Much of the booklet is an inventory of failures Pai locates in the deficit States (Kerala, Maharashtra, Gujarat, West Bengal), in the bottlenecks of milling, storage, transport, and distribution, and in the surplus States' reluctance to part with their grain.… ### Body # Some Reflections on the Food Problem in India *By T. A. PAI* ## Summary T. A. Pai, identified on the title page as the first Chairman of the Food Corporation of India, delivers a sharply practical critique of India's food policy seventeen years after independence and three Five-Year Plans. Writing in September 1966 against the backdrop of monsoon failures and continued dependence on imported wheat (notably PL-480 shipments from the United States), Pai argues that India faces a still graver problem as its population swells by another 7.5 crores in the coming five years, and that the only durable answer is to raise per-acre yields through hybrid seeds, fertilisers, assured water, and chemical pest control — a technology-led agricultural revolution rather than another round of incremental planning. Much of the booklet is an inventory of failures Pai locates in the deficit States (Kerala, Maharashtra, Gujarat, West Bengal), in the bottlenecks of milling, storage, transport, and distribution, and in the surplus States' reluctance to part with their grain. Loss estimates — 25% at field level, 15% in storage and transport, 5–7% in hulling, 8–12% in fine polishing, plus the Ford Foundation Team's 120% loss figure that Pai calls an under-estimate — are marshalled to show that statistics on production are themselves unreliable and that no one in India can claim with confidence that 30% of output is marketable surplus. He singles out the failure of the Committee for Rodent Eradication, the inadequacy of minimum tolerance standards for stones and dust in rice, the over-centralisation of credit and fertiliser distribution, and the policy that allowed Roller Flour Mills to mill only imported wheat. The argumentative spine is a liberal critique of bureaucratisation and ideological rigidity in farm policy. Pai wants the Food Corporation of India strengthened by an Act of Parliament as a genuine national agency, with monopoly procurement concentrated in the 58 heavily surplus districts that account for 48% of marketable surplus; he wants the minimum prices set by the Agricultural Prices Commission stabilised for three years and indexed to the cost of living; he wants the PL-480 wheat frozen as a buffer stock; and he wants the State Governments to stop discouraging production through perverse incentives. He is just as insistent that multiple private agencies — not Government alone — be encouraged into fertiliser, credit, and advisory services, and that an agricultural income-tax is preferable to land ceilings that prevent the bigger farmers from enriching themselves and the country. Pai closes by warning that food policy cannot be left to ideologies, that the conflict between large-scale and small-scale farming should not be allowed to paralyse action, and that the linguistic reorganisation of States has made integrated food policy strangely difficult — a more effective policy was possible, he notes, under British rule when the country was treated as one unit. The booklet ends on a note of guarded hope in a "great awakening" among farmers and the public that, if harnessed, could carry the nation past its food crisis. ## Key points - Pai frames the crisis as a yield problem: per-acre production must rise through hybrid seeds, chemical fertilisers, assured water and pesticides, not through expanded acreage or another Plan cycle. - He documents staggering post-harvest losses — 25% in the field, 15% in storage and transport, 5–12% in milling — and treats the Ford Foundation Team's 120% loss estimate as an under-estimate, arguing that India's official production figures (85–86 million tons) are not trustworthy. - Deficit-State politics is treated as the central obstacle: Kerala, Maharashtra, Gujarat and West Bengal are economically advanced yet structurally dependent on the surplus States, while surplus States hoard grain and bargain with the Centre for concessions. - Pai presses for the Food Corporation of India to be enabled by an Act of Parliament to function as a genuine national agency, with monopoly procurement concentrated in the 58 heavily surplus districts that supply 48% of the marketable surplus. - He calls for PL-480 wheat to be frozen as a buffer stock under Parliamentary law rather than "frittered away", and for minimum support prices set by the Agricultural Prices Commission to be stabilised for three years and linked to the cost-of-living index. - On land policy he prefers an agricultural income-tax to ceilings, and wants the conversion of food acreage to non-food crops severely restricted while protecting foreign-exchange earners like coffee, tea, rubber and cashew. - He is sharply critical of bureaucratisation, monopoly distribution of fertiliser and credit, and the rigidity of co-operative rules — arguing instead for multiple private agencies, easier institutional credit for larger farmers, and the eclipse of the middleman through better-organised marketing. - Pai blames linguistic reorganisation of States for fragmenting food policy, observing that British-era unitary administration made integrated food policy more feasible, and ends on a guarded hope in a "great awakening" among farmers and the public. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] Some Economic Aspects and Problems of Under-Developed Countries URL: https://indianliberals.in/primary-works/some-economic-aspects-and-problems-prof-p-t-bauer-jan6-1959/ ### Summary These two lectures, delivered in Bombay on September 8 and 9, 1958 by P. T. Bauer (Smuts Reader in Commonwealth Studies at Cambridge) and printed by the Forum of Free Enterprise, mount a systematic dismantling of the development-economics orthodoxy of the late 1950s. Bauer's central target is the "vicious circle of poverty and stagnation" thesis advanced by Ragnar Nurkse, Gunnar Myrdal, Paul Samuelson and the wider United Nations literature, which inferred from low incomes that poor countries could not save, could not invest, and therefore could not grow without large-scale compulsory saving, state-led industrialisation and inter-governmental transfers.… ### Body # Some Economic Aspects and Problems of Under-Developed Countries *By Prof. P. T. BAUER* ## Summary These two lectures, delivered in Bombay on September 8 and 9, 1958 by P. T. Bauer (Smuts Reader in Commonwealth Studies at Cambridge) and printed by the Forum of Free Enterprise, mount a systematic dismantling of the development-economics orthodoxy of the late 1950s. Bauer's central target is the "vicious circle of poverty and stagnation" thesis advanced by Ragnar Nurkse, Gunnar Myrdal, Paul Samuelson and the wider United Nations literature, which inferred from low incomes that poor countries could not save, could not invest, and therefore could not grow without large-scale compulsory saving, state-led industrialisation and inter-governmental transfers. Bauer answers that the thesis is "manifestly invalid": the developed world was once under-developed, and large stretches of Asia, Africa and Latin America — Malaya, the Gold Coast, Nigeria, much of India and Pakistan, West Africa more generally — show rapid economic advance over the last half-century driven by Africans and Asians on their own lands, by penniless Chinese immigrants, by Indians in East Africa, and by the spread of the exchange economy through cash crops. The second half of the rendered pages turns to the policy corollaries that follow from rejecting the orthodoxy. Bauer attacks the "international demonstration effect" used to justify expenditure taxes and import restrictions, arguing that new wants and new goods actually stimulate saving, investment and the move out of subsistence rather than retarding capital formation. He defends the productivity of agriculture, fixed capital formation in tree crops such as rubber, cocoa and coffee, and the long time-horizons demonstrably taken by African and Asian smallholders — against the "allegedly inherent economic short-sightedness of the indigenous population." He closes the rendered pages by puncturing the cult of manufacturing industry, insisting that "manufacturing industry is simply one type of economic activity" with no inherent claim on resources, and that statistical correlations between industrialisation and high incomes confuse cause with effect. The booklet's polemical centre is that fundamentally defective ideas — vicious-circle reasoning, the demonstration-effect alarm, and the industrialisation fetish — "are unlikely to serve as a suitable basis for sane and effective economic policy," and that Indian planning has absorbed them deeply through the Planning Commission and the writings of cabinet ministers. ## Key points - Bauer rejects the 'vicious circle of poverty' thesis (Nurkse, Myrdal, Samuelson, U.N. literature) as logically confused and empirically refuted, since today's developed countries began as under-developed and many regions of Asia, Africa and Latin America have advanced rapidly without preconditions of large external capital. - He marshals concrete cases — Malaya, the Gold Coast (Ghana), Nigeria, West Africa generally, Indian and Chinese immigrant communities — to show that capital formation, exports and infrastructure have grown massively from very low bases over fifty to a hundred years. - Conventional per-capita national-income figures are dismissed as misleading instruments for measuring development in economies where population growth, falling mortality, the suppression of tribal warfare and the move from subsistence to exchange production are the dominant facts. - The 'international demonstration effect' argument used to justify expenditure taxes and import restrictions is inverted: knowledge of new goods and consumption patterns is a major stimulant to saving, investment and the spread of the money economy, not an obstacle to it. - Investment in agriculture and in tree crops (rubber, cocoa, tea, coffee) is a substantial form of fixed capital formation that orthodox accounts systematically ignore; its existence refutes the allegation that Africans and Asians cannot take a long view of economic affairs. - Bauer attacks the case for state-sponsored, accelerated industrialisation: high industrialisation in the West reflects shared causes with high income, not causation; surplus-population, terms-of-trade-deterioration and external-economy arguments are individually weak. - The booklet's framing claim is polemical: ideas dominating United Nations literature, ECAFE, the Planning Commission of India and the writings of Indian cabinet ministers are 'demonstrably wrong' and incapable of grounding sound policy. - A. D. Shroff's introduction (dated Bombay, 17 December 1958) frames the booklet as the Forum of Free Enterprise's contribution to Indian public debate, presenting Bauer's approach as 'fresh and invigorating' against the prevailing planning consensus. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] Some Tax Aspects of Electronic Commerce URL: https://indianliberals.in/primary-works/some-tax-aspects-of-electronic-commerce-k-r-girish/ ### Summary K. R. Girish's booklet, based on a talk delivered under the auspices of the Forum of Free Enterprise in Mumbai on 4 October 1999, is a Chartered Accountant's primer on how electronic commerce (EC) destabilises the foundational concepts on which income-tax and indirect-tax systems have been built. Girish begins by defining EC broadly — citing the U.S. Department of Treasury and noting that even a pre-paid card payment to a cab driver qualifies — and marshals KPMG and other survey data to argue that EC is no longer a futuristic curiosity but a multi-billion-dollar reality reshaping boardroom agendas. The central worry he identifies is that the territorial anchors of "source" and "residence", and the corollary concept of a Permanent Establishment, presuppose a physical nexus that EC dissolves; the question of whether a server or server-space can constitute a PE, and how income from cross-border software and digital transfers should be characterised (business profits versus royalties), is the unresolved doctrinal core. The bulk of the booklet is a comparative survey of policy initiatives.… ### Body # Some Tax Aspects of Electronic Commerce *By K. R. GIRISH* ## Summary K. R. Girish's booklet, based on a talk delivered under the auspices of the Forum of Free Enterprise in Mumbai on 4 October 1999, is a Chartered Accountant's primer on how electronic commerce (EC) destabilises the foundational concepts on which income-tax and indirect-tax systems have been built. Girish begins by defining EC broadly — citing the U.S. Department of Treasury and noting that even a pre-paid card payment to a cab driver qualifies — and marshals KPMG and other survey data to argue that EC is no longer a futuristic curiosity but a multi-billion-dollar reality reshaping boardroom agendas. The central worry he identifies is that the territorial anchors of "source" and "residence", and the corollary concept of a Permanent Establishment, presuppose a physical nexus that EC dissolves; the question of whether a server or server-space can constitute a PE, and how income from cross-border software and digital transfers should be characterised (business profits versus royalties), is the unresolved doctrinal core. The bulk of the booklet is a comparative survey of policy initiatives. Girish walks through the OECD's pioneering work — the 1992 revisions to the Article 12 commentary on software, the November 1997 Turku conference, and the June 1998 Framework Conditions adopted at Ottawa, which lay down five guiding principles (Neutrality, Efficiency, Certainty and Simplicity, Effectiveness and Fairness, Flexibility) and identify four work areas (Tax Treaty, Consumption Taxes, Tax Administration, Taxpayer Service). He then summarises the U.S. position (the 1996 and 1998 IRS software-characterisation regulations and the October 1998 Internet Tax Freedom Act), the UK's 'Electronic Commerce: UK Policy on Taxation Issues', the Australian Tax Office's 1997 'Tax and the Internet' report (with its proposals on website licensing and embedding reporting codes in browsers), the European Commission's April 1997 plan, and Canada's 1998 report which rejected a flat 'bit tax' as inequitable. The through-line is a liberal one consonant with the Forum's framing: across jurisdictions, tax administrators are converging on neutrality between electronic and conventional commerce, on minimising compliance costs, and on a regulatory and fiscal climate that does not stifle EC's growth. Girish also flags the OECD's May 1998 Harmful Tax Competition report and its concern about a "race to the bottom" toward tax havens — noting that G7 foreign direct investment in Caribbean and South Pacific low-tax jurisdictions rose more than five-fold between 1985 and 1994 to over US$ 200 billion. He closes by acknowledging that beyond the consensus, the hard problems of identifying parties to EC transactions, applying source-and-residence concepts to digital activity, and accessing encrypted records remain unresolved. ## Key points - Defines Electronic Commerce broadly via the U.S. Department of Treasury — any electronic exchange of goods and services, down to a pre-paid card payment to a cab driver — and uses KPMG and other survey data to show EC is reshaping boardroom agendas, not a future curiosity. - Frames the central tax problem as the erosion of "source" and "residence" — territorial concepts built on a physical economic nexus that EC weakens, raising the question of whether a server constitutes a Permanent Establishment. - Enumerates six taxation issues: PE constitution in a digital world, characterisation of income from technology transfers (business profits vs. royalties), use of new tech for tax administration, transfer pricing in EC, and VAT. - Surveys OECD initiatives: 1992 revision of Article 12 commentary on software; November 1997 Turku conference; June 1998 Framework Conditions adopted at Ottawa specifying five guiding principles — Neutrality, Efficiency, Certainty and Simplicity, Effectiveness and Fairness, Flexibility — and four work areas including Tax Treaty, Consumption Taxes, Tax Administration and Taxpayer Service. - Reviews national policy responses: U.S. IRS regulations of 1996/1998 on software characterisation and the October 1998 Internet Tax Freedom Act; UK policy paper; Australian Tax Office's 1997 'Tax and the Internet' (with proposals to license websites and embed reporting codes in browsers like Netscape Navigator and Microsoft Explorer); the European Commission's April 1997 EC plan; and Canada's April 1998 report which rejected a flat 'bit tax'. - Highlights the OECD's May 1998 Harmful Tax Competition report and its standstill/rollback provisions on preferential regimes, against the backdrop of G7 FDI to Caribbean and South Pacific tax havens rising more than five-fold between 1985 and 1994, to over US$ 200 billion. - Argues that the cross-jurisdictional consensus favours neutrality between electronic and conventional commerce, light compliance costs, and a regulatory climate that does not stifle EC — a stance congenial to the Forum of Free Enterprise's classical-liberal frame. - Concludes that despite this consensus, the practical problems of identifying and locating parties to EC transactions, applying source-and-residence rules to digital activity, and accessing encrypted records remain unresolved. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] SPIRIT OF FREE ENTERPRISE URL: https://indianliberals.in/primary-works/spirit-of-free-enterprise-by-russi-mody-december-14-1991/ ### Summary Russi Mody, then Chairman and Managing Director of the Tata Iron & Steel Co. Ltd., delivered this address on the 'Spirit of Free Enterprise' at a seminar of the Confederation of Engineering Industry (Northern Region) in New Delhi on 3 April 1991. The Forum of Free Enterprise reproduced it as a booklet on 14 December 1991. Mody opens by insisting it should no longer be necessary to debate free enterprise — its superiority has been demonstrated by every country, from Singapore and Korea to Britain and Germany, that has shed state controls. India's poverty, he argues, is self-inflicted: the country is 'literally and physically broke' because successive governments since Independence have run an economy modelled on Russian planning instead of releasing the productive energies that Indians display so readily abroad. The address moves through a brisk history of the modern world — the Industrial Revolution, the Fabian and Marxist reaction, the rise and collapse of the Soviet bloc — and lands on Adam Smith as the intellectual anchor of the case for self-interest disciplined by competition.… ### Body # SPIRIT OF FREE ENTERPRISE *By RUSSI MODY* ## Summary Russi Mody, then Chairman and Managing Director of the Tata Iron & Steel Co. Ltd., delivered this address on the 'Spirit of Free Enterprise' at a seminar of the Confederation of Engineering Industry (Northern Region) in New Delhi on 3 April 1991. The Forum of Free Enterprise reproduced it as a booklet on 14 December 1991. Mody opens by insisting it should no longer be necessary to debate free enterprise — its superiority has been demonstrated by every country, from Singapore and Korea to Britain and Germany, that has shed state controls. India's poverty, he argues, is self-inflicted: the country is 'literally and physically broke' because successive governments since Independence have run an economy modelled on Russian planning instead of releasing the productive energies that Indians display so readily abroad. The address moves through a brisk history of the modern world — the Industrial Revolution, the Fabian and Marxist reaction, the rise and collapse of the Soviet bloc — and lands on Adam Smith as the intellectual anchor of the case for self-interest disciplined by competition. Mody invokes Margaret Thatcher's refusal to bail out loss-making state firms and Ronald Reagan's 1982 tax cuts (which he credits with eighteen million American jobs by 1988) as practical proof that lower taxes raise revenue and that individual initiative is irreplaceable. He cites the figure that small enterprises employing fewer than twenty people generated two-thirds of US jobs from 1980 to 1986 to argue that India's obsession with large-scale public-sector industrialisation, in the Nehruvian image, has been misguided. The booklet's sharpest passages target the Indian public sector and the regulatory apparatus around it. Mody calculates that Rs.110,000 crores have yielded essentially nothing to the exchequer — even a 10% return would erase the fiscal deficit — and blames parliamentary 'question hour' culture, secretarial micro-management from Delhi, and politicians who confuse ownership with the right to run industries they do not understand. He calls for the abolition of steel and coal controls, MRTP, most of FERA, STC and MMTC, and asks why airlines remain off-limits to privatisation. He closes by urging the business community to stop seeking personal privileges from government, to welcome multinational capital — citing Mexico's costless expulsion of US oil firms as proof that openness does not compromise sovereignty — and to advocate openly for free enterprise rather than pay lip service in public while lobbying for favours in private. ## Key points - Mody frames India's economic stagnation as self-inflicted by governments since Independence that imposed Russian-style planning instead of allowing free enterprise. - He urges businesspeople to enter politics not as legislators but as advocates for raising the standard of living through enterprise rather than slogans. - He marshals comparative evidence — Japan, Singapore, Korea, Taiwan, Thailand, the USA, UK, France and Germany — to argue that countries which 'threw off the shackles of economic control' prospered, and that Indians abroad consistently succeed. - He defends Adam Smith's account of self-interest channelled by competition as the mechanism by which private gains yield public goods. - He invokes Reagan's 1982 tax cut (which he credits with 18 million US jobs by 1988) and Thatcher's refusal to bail out loss-making state firms as practical models for India to emulate. - He argues the Indian public sector earns essentially nothing on Rs.110,000 crores invested; even a 10% return would erase the fiscal deficit then being reduced from Rs.8,000 to Rs.6,000 crores. - He attacks bureaucratic and parliamentary interference — citing a steel-plant anecdote and a Minister's 'salaah dena' to General Managers — as the reason public-sector firms cannot be efficient. - He calls for dismantling MRTP, steel, coal, STC and MMTC controls and welcomes multinational investment, citing Mexico's expulsion of US oil companies as proof that economic openness does not threaten sovereignty. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] STATE MONOPOLIES AND THE CITIZEN IN A DEMOCRACY URL: https://indianliberals.in/primary-works/state-monoplies-v-k-narasimhan-aug7-1959/ ### Summary V. K. Narasimhan, then Assistant Editor of *The Hindu*, uses this 1959 Forum of Free Enterprise booklet — based on a lecture he delivered in Bombay on 22 May 1959 — to ask a constitutional and democratic-theory question: how far is the creation and maintenance of State monopolies in goods and services compatible with the right of citizens in a democracy to operate similar enterprises? The trigger, he says, was the 1956 nationalisation of life insurance by ordinance, where a working private industry was absorbed into a state monopoly without organised protest. Behind that silence Narasimhan locates a deeper failure: democratic-minded public men did not register the danger of the First Amendment of 1951, which inserted a sweeping clause into Article 19(6) allowing the State to operate any trade, business, industry or service to the partial or complete exclusion of citizens, with no equivalent constitutional safeguard. The core of the booklet is a close reading of the 1951 amendment's drafting history. Narasimhan traces it back to the Allahabad High Court judgment in the U.P.… ### Body # STATE MONOPOLIES AND THE CITIZEN IN A DEMOCRACY *By V. K. NARASIMHAN* ## Summary V. K. Narasimhan, then Assistant Editor of *The Hindu*, uses this 1959 Forum of Free Enterprise booklet — based on a lecture he delivered in Bombay on 22 May 1959 — to ask a constitutional and democratic-theory question: how far is the creation and maintenance of State monopolies in goods and services compatible with the right of citizens in a democracy to operate similar enterprises? The trigger, he says, was the 1956 nationalisation of life insurance by ordinance, where a working private industry was absorbed into a state monopoly without organised protest. Behind that silence Narasimhan locates a deeper failure: democratic-minded public men did not register the danger of the First Amendment of 1951, which inserted a sweeping clause into Article 19(6) allowing the State to operate any trade, business, industry or service to the partial or complete exclusion of citizens, with no equivalent constitutional safeguard. The core of the booklet is a close reading of the 1951 amendment's drafting history. Narasimhan traces it back to the Allahabad High Court judgment in the U.P. Motor Vehicles Act case, which held that the State could not entirely exclude private operators from an industry under the original Article 19(6); the Constitution (First Amendment) Bill was widened in response. He shows how only a handful of members — Pandit Hridayanath Kunzru, Shyam Nandan Sahaya, Prof. K. T. Shah, Dr. S. P. Mookerjee — pressed for safeguards (compensation for displaced citizens, prior enquiry before any State monopoly is created, non-discrimination between public and private enterprise, review by the President), and how each amendment was negatived. He highlights an official-record anomaly: the Lok Sabha proceedings show Sahaya's compensation amendment as 'adopted' when in fact it had been 'negatived' — a misprint never corrected in subsequent editions. From there Narasimhan moves to the political economy of State monopoly. Using the LIC takeover and State trading in foodgrains (notably the Gauhati correspondent's account of the disruption of the Nowgong district rice-milling industry in Assam) as case studies, he argues that the absence of competition in a single-buyer/single-seller State system produces bureaucratic indifference, destroys consumer choice, removes the spur to efficiency, and substitutes monopoly procurement for competitive trade — sometimes catastrophically for the small producer. He notes that the British Labour Party itself, once an advocate of nationalisation, was turning toward 'controlling' rather than nationalising well-managed firms. The booklet ends with six prescriptive conclusions: the democratic citizen must enjoy the amplest freedom to pursue any lawful economic activity; the constitutional space in which the State may set up monopolies must be precisely narrowed; no State monopoly should be created without prior enquiry into the existing private sector and a fair hearing for those engaged in it; outside a narrow field of public utilities, no enterprise on sound lines should be displaced by a State monopoly; full compensation must be paid when displacement does occur; and an impartial, quasi-judicial review body — analogous to the Tariff Commission or the British Monopolies Commission — should oversee State monopolistic enterprises and hear complaints. ## Key points - Narasimhan's central question is whether the State's creation of monopolies in goods and services is compatible with the equal right of citizens in a democracy to operate similar enterprises. - He treats the unprotested 1956 nationalisation of life insurance by ordinance as evidence that the political class failed to absorb the constitutional implications of the First Amendment of 1951. - He reads the 1951 amendment to Article 19(6) — empowering the State to operate any 'trade, business, industry or service' to the partial or complete exclusion of citizens — as an 'astonishing' constitutional shift toward economic regimentation. - The booklet narrates the U.P. Motor Vehicles / Allahabad High Court backstory and shows how amendments by Hridayanath Kunzru, Shyam Nandan Sahaya, K. T. Shah and S. P. Mookerjee — each of which would have added safeguards (compensation, non-discrimination, prior enquiry, President's review) — were all negatived. - Narasimhan flags an uncorrected misprint in the official Lok Sabha proceedings that records Sahaya's compensation amendment as 'adopted' when in fact it was 'negatived'. - He uses the LIC takeover and State trading in foodgrains in Assam (Nowgong district rice mills, citing the Gauhati correspondent of The Statesman) to argue that State monopoly destroys competition, consumer choice, and the small producer. - He notes the British Labour Party's drift away from blanket nationalisation toward 'control' of well-managed private firms. - His six closing recommendations include constitutional narrowing of the State-monopoly clause, prior enquiry before any new State monopoly, compensation for displaced enterprises, and an impartial quasi-judicial review body modelled on the Tariff Commission or the Monopolies Commission in England. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] STATE MONOPOLY OF TEXT-BOOKS URL: https://indianliberals.in/primary-works/state-monopoly-of-text-books-november-5-1964/ ### Summary State Monopoly of Text-Books is a 1964 Forum of Free Enterprise booklet that gathers three pieces against the drift toward government nationalisation of school textbooks, prompted by the scandal of grossly defective Maharashtra-state geography textbooks. A short Forum introduction frames the issue, four R. K. Laxman cartoons reprinted from The Times of India lampoon the policy, and the body of the booklet then reproduces an unsigned essay 'Freedom of Choice' from the Year Book of Education (London/New York, 1960) alongside the texts of two talks delivered at a Forum meeting in Bombay on 5 August 1964 by M. R. Masani M.P. and S. S. Patke, ex-President of the Maharashtra State Federation of Headmasters' Associations. Together the contributors argue, on economic, educational and civil-liberty grounds, that state production and prescription of textbooks degrades quality, raises costs, fosters piracy, restricts the freedom of teachers and authors, and opens the door to political indoctrination of children — and they urge that publishing be left to private and voluntary initiative, with the State at most reviewing approved lists rather than holding a monopoly. ### Body # STATE MONOPOLY OF TEXT-BOOKS ## Summary State Monopoly of Text-Books is a 1964 Forum of Free Enterprise booklet that gathers three pieces against the drift toward government nationalisation of school textbooks, prompted by the scandal of grossly defective Maharashtra-state geography textbooks. A short Forum introduction frames the issue, four R. K. Laxman cartoons reprinted from The Times of India lampoon the policy, and the body of the booklet then reproduces an unsigned essay 'Freedom of Choice' from the Year Book of Education (London/New York, 1960) alongside the texts of two talks delivered at a Forum meeting in Bombay on 5 August 1964 by M. R. Masani M.P. and S. S. Patke, ex-President of the Maharashtra State Federation of Headmasters' Associations. Together the contributors argue, on economic, educational and civil-liberty grounds, that state production and prescription of textbooks degrades quality, raises costs, fosters piracy, restricts the freedom of teachers and authors, and opens the door to political indoctrination of children — and they urge that publishing be left to private and voluntary initiative, with the State at most reviewing approved lists rather than holding a monopoly. ## Essays ### You Said It *By R. K. LAXMAN* Reprinted from THE YEAR BOOK OF EDUCATION (London and New York, 1960) with the permission of the Publishers' Association, this anonymous essay sets out the general international case against state monopoly of school textbooks. It concedes the surface appeal of a single, national, mass-produced text — capital costs spread, royalties paid, one approved book in every classroom — and notes that this is the practice in all Communist countries, but argues that even Soviet textbooks turn out to be technically mediocre and pedagogically old-fashioned, and that the economic 'savings' claimed by state production are largely illusory once hidden departmental costs and lost market efficiencies are counted. The essay's strongest objections are not economic but political and pedagogic. Official production of printed matter, the author argues, necessarily implies censorship and the promotion of views the government favours; it discourages teachers from thinking for themselves and removes the diversity of choice that good teaching requires. Limited official production may be defensible in poorly trained or under-resourced systems (Peru, parts of New Zealand are cited), but a one-book-per-subject prescription is never warranted. The conclusion: in countries with a liberal tradition and a free economy, government production of textbooks is justifiable only if it can guarantee economy, modernity, choice and rapid revision — conditions that in practice government monopolies almost never meet. - Single-text national systems exist mainly in Communist countries (USSR, China) and produce technically dated, pedagogically conservative books. - Claimed economic savings from state production are usually fictitious once hidden departmental costs and forgone competitive efficiencies are accounted for. - Officials and committees are not better placed than competing private publishers to identify good authors and good textbooks. - The decisive objections are political: state production implies censorship, restricts teacher choice, and stifles the diversity that good schooling requires. - A 'prescribed books' list should always offer many alternatives rather than a single text per subject, and a vigorous private book trade is itself a precondition of bookshops and adult-literacy infrastructure. - Limited official production may be defensible only where teachers are poorly trained (Peru, parts of New Zealand are cited), and even then never as a monopoly. ### FREEDOM OF CHOICE M. R. Masani, M.P., opens by insisting that the so-called 'nationalisation of text-books' is a misnomer — what is really happening at the State level is a monopoly of publication. He treats this both as a theoretical danger (only Communist and Fascist dictatorships indoctrinate children through a textbook monopoly) and as a historical regression: from 1824 onwards under the British, official series like the Lipidhara, Gannit and Bal Goshtee dominated, but by the early twentieth century the Government wisely withdrew in favour of reputable private publishers, and a mixed economy in textbooks prevailed in independent India until State governments began re-monopolising the field. Masani musters the official record against the policy — the 1942 Committee, the Mudaliar Committee, the warning by Bombay's Minister of Education Dinkarrao Desai at the 1957 Education Ministers' Conference, and an unanswered 1957 letter Masani himself wrote to Deputy Minister Dr. K. L. Shrimali — to show that the drift to State monopoly proceeded against expert advice. The second half of the essay is a documentary indictment of how that monopoly has worked in practice. State-published textbooks are poor in quality, sold at inflated prices that disguise taxation, and chronically unavailable on time. Masani quotes a 1959 judgment of Justice Balakrishna Ayyar of the Madras High Court on a wretched abridgement of Quentin Durward and a Madras Mail editorial on a similarly mangled Oliver Twist published in Andhra; he then turns to a Press Trust of India report estimating Rs. 10 crores of losses to State governments from counterfeiting and details the Bihar case (drawing on the Bihar Teachers' Association's Jali Pustak Virodhi Visheshank), where shortfalls in the Free India Readers and arithmetic books cost the exchequer roughly Rs. 35 lakhs a year. Three structural reasons drive the piracy, he argues — extortionate State margins, late and erratic supply, and stingy trade discounts — and the only real remedy is to end the monopoly itself and let private publishers fight the counterfeiters under competition. - 'Nationalisation of text-books' is a misnomer for what is really a State-level monopoly of publication, and is a reversion to a discarded British imperial practice rather than a progressive reform. - Only Communist and Fascist dictatorships practise such monopolies; the danger of political indoctrination of children is intrinsic, not contingent. - Successive official committees (the 1942 Committee, the Mudaliar Committee) and Bombay's Minister Dinkarrao Desai at the 1957 Education Ministers' Conference explicitly warned against the policy, and their advice was ignored. - Madras High Court (Justice Balakrishna Ayyar, 12 January 1959) and Madras Mail commentary on shoddy State-issued abridgements of Quentin Durward and Oliver Twist document the resulting decline in quality. - A Press Trust of India report puts losses from piracy of State-published books at about Rs. 10 crores across seven States, with Bihar alone losing around Rs. 35 lakhs a year on Free India Readers and arithmetic books. - Three structural causes drive the piracy: high State margins, late and erratic supply, and trade discounts of only 10 per cent against the 15 per cent offered by private publishers. - The real remedy is to end the State monopoly and let competition keep both quality high and counterfeiters in check; legal remedies such as amending section 432 IPC can at best supplement, not replace, this. ### TEXT-BOOKS IN INDIA *By M. R. MASANI, M.P.* S. S. Patke, writing as ex-President of the Maharashtra State Federation of Headmasters' Associations, takes the July 1964 collapse of the Maharashtra Government's Standards IV and V geography textbooks — withdrawn at a cost of more than Rs. 7 lakhs — as the occasion to attack the State's broader 1960 decision to phase in Government-produced texts in English from Standard V to Standard X. He limits himself, as 'an active worker in the field of education', to the educational implications, and notes both the Government's refusal to reconsider the policy in spite of the scandal and its decision to push it through without legislative sanction, against the considered advice of educationists. In the rendered pages, Patke amplifies the case by citing authority after authority against the policy: the Secondary Education Commission (the Mudaliar Commission, 1952-53), which urged that the Text Book Committee should approve a number of suitable books rather than prescribe one; an International Team study that endorsed State support for educational research but not State production of textbooks; the XXXII All-India Educational Conference (Madras, December 1957), whose resolution was repeated at Chandigarh (1958) and Trivandrum (1962); and statements by Dr. A. L. Mudaliar (Madras, 22 November 1961), former Union Education Minister Dr. K. L. Shrimali, and Acharya Vinoba Bhave, who warned that 'Government-controlled education is bound to become formal and rigid' and turns teachers into employees. The essay continues beyond this chunk; the rendered pages break off as Patke begins to invoke Sir C. P. Ramaswami Aiyer. - The July 1964 Maharashtra geography-textbook fiasco for Standards IV and V cost the public exchequer more than Rs. 7 lakhs, yet has not made the Government reconsider its 1960 decision to extend State production stage-by-stage from English Std. V to Std. X. - The Maharashtra Government pushed through this major policy departure without taking the sanction of the Legislature and in defiance of expert educational advice. - The Secondary Education (Mudaliar) Commission recommended multiple approved textbooks per subject, not a single prescribed text, and explicitly framed this as protecting 'the scope of free enterprise in the publication of books.' - An International Team study on textbooks held that State Governments should organise research to support better textbook production but should not themselves take up production. - The XXXII All-India Educational Conference (Madras, 1957) passed — and repeated at Chandigarh (1958) and Trivandrum (1962) — a resolution against State monopoly publishing of textbooks for schools. - Patke marshals statements by Dr. A. L. Mudaliar, former Education Minister Dr. K. L. Shrimali and Acharya Vinoba Bhave to argue that publication should be left as far as possible to voluntary organisations and private societies. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] STATE TAKEOVER OF FOODGRAINS TRADE URL: https://indianliberals.in/primary-works/state-takeover-of-foodgrains-trade-dr-a-c-chhatrapati-may-15-1973/ ### Summary Dr. A. C. Chhatrapati's pamphlet argues that the Government of India's 1973 decision to take over the wholesale trade in wheat and rice is an unwise and unworkable expansion of state economic power, taken without serious public debate. Drawing on his expertise in agricultural economics, he walks the reader through the role of the private wholesaler — financing producers, grading produce, storing surpluses, smoothing price movements between primary and consuming markets — and contends that no democratic country has abandoned free markets in foodgrains; only Communist regimes have done so, and they are now retreating from the experiment. He warns that the stated objectives of the takeover (eliminating speculation, ensuring remunerative prices to farmers, reasonable prices to consumers, and elimination of intermediaries) cannot be reconciled with the operational reality that the Food Corporation of India (FCI) is already procuring wheat at Rs. 76 per quintal but selling at Rs. 78, and would have to absorb Rs. 18.45 per quintal of subsidy on wheat and Rs.… ### Body # STATE TAKEOVER OF FOODGRAINS TRADE *By DR. A. C. CHHATRAPATI* ## Summary Dr. A. C. Chhatrapati's pamphlet argues that the Government of India's 1973 decision to take over the wholesale trade in wheat and rice is an unwise and unworkable expansion of state economic power, taken without serious public debate. Drawing on his expertise in agricultural economics, he walks the reader through the role of the private wholesaler — financing producers, grading produce, storing surpluses, smoothing price movements between primary and consuming markets — and contends that no democratic country has abandoned free markets in foodgrains; only Communist regimes have done so, and they are now retreating from the experiment. He warns that the stated objectives of the takeover (eliminating speculation, ensuring remunerative prices to farmers, reasonable prices to consumers, and elimination of intermediaries) cannot be reconciled with the operational reality that the Food Corporation of India (FCI) is already procuring wheat at Rs. 76 per quintal but selling at Rs. 78, and would have to absorb Rs. 18.45 per quintal of subsidy on wheat and Rs. 16.50 on rice in 1973-74. Chhatrapati develops a sustained critique of administered prices and bureaucratic management: handling costs in FCI will rise as organised public-sector labour demands higher wages, a single nationwide monopoly creates strike vulnerability that can hold the country to ransom, and political rather than economic considerations will dominate procurement and issue prices. He cites the Maharashtra Government's recent failure to attract cotton acreage despite attractive prices as evidence that administrative price-setting harasses rather than helps the cultivator. Pointing to the Soviet Union's own admission of the "baneful effects of production of goods which they can sell and minimise costs" and its turn toward enterprise autonomy, he asks why India is moving in the opposite direction. He also worries that once wholesale trade in essential commodities is in state hands, the space for active dissent and a healthy democracy will shrink, since industries dependent on government allotments of raw materials are already reluctant to criticise. The booklet is rounded out by four appendices. Appendix I reproduces excerpts from a 1922 paper by Mary G. Lacy on "Food Control During Forty-Six Centuries", cataloguing failed price-fixing attempts from Egypt, China, Athens, Rome, Great Britain, Antwerp, Revolutionary France, the Colonial United States and India itself, to argue that price fixing in times of scarcity has always removed the most powerful check on consumption — namely high prices. Appendix II reprints Jayaprakash Narayan's press statement calling the takeover "an unwise adventure" and "a case of the remedy being worse than the disease". Appendices III and IV present FCI's cost structure for 1973-74 and the cumulative losses of Rs. 330.23 crore that the State trading scheme in foodgrains had already accumulated by 1967-68. ## Key points - Frames the wholesale takeover of wheat and rice as a fait accompli rushed through without adequate debate in legislatures, party forums or mass media. - Defends the private wholesaler's economic functions — financing producers, grading, storage, smoothing seasonal and inter-regional price differentials — against the charge of being a monopolist. - Argues that no democratic country has abolished free markets in foodgrains and that the only relevant comparators are Communist economies which themselves are now liberalising. - Quantifies the cost gap that subsidies must absorb: FCI procurement at Rs. 76 per quintal of wheat plus incidentals reaches Rs. 96.45, against an issue price of Rs. 78, implying Rs. 18.45 per quintal of subsidy on wheat and Rs. 16.50 on rice for 1973-74. - Warns that a single State trading corporation creates a strike vulnerability that can hold the entire country to ransom, citing November cannibalisation strikes in STC and MMTC. - Uses the Maharashtra cotton case (orders for seed for only 125 hectares against 4,000 hectares targeted) to show that administered procurement schemes harass cultivators and discourage acreage. - Reads the Soviet turn toward enterprise autonomy and individual rule-following as confirmation that administered prices and bureaucratic distribution failed even under stricter discipline than India can muster. - Links the political economy of state monopoly trading to the erosion of democratic dissent, since industries dependent on government allotments avoid public criticism. - Appendices marshal a long historical record (Mary G. Lacy's 1922 paper) and a contemporary endorsement (Jayaprakash Narayan's press statement) to reinforce the case that price fixing and state trading in foodgrains is a recurrent and recurrently failed policy. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] State Trading URL: https://indianliberals.in/primary-works/state-trading-a-d-shroff-jun6-1958/ ### Summary This booklet, issued by the Forum of Free Enterprise in Bombay, gathers the addresses delivered at the Forum's Convention on State Trading held in Bombay on April 28, 1958. A. D. Shroff, President of the Forum, presides; the other speakers are N. Dandeker, I.C.S. (Retd.), S. C. Bose of the Utkal Mining and Industrial Association in Calcutta, Murarji J. Vaidya, former President of the Indian Merchants' Chamber, and D. B. Futnani, President of the Iron, Steel and Hardware Merchants' Chamber of India. The introduction frames the volume with a sidebar epigraph from Eugene Black, President of the World Bank, that private enterprise must be accepted not as a necessary evil but as an affirmative good. The five speakers converge on a single argument: that the expansion of the State Trading Corporation (S.T.C.) under India's planned-economy doctrine of a 'socialistic pattern of society' is the most sinister encroachment on free enterprise and the democratic way of life since independence.… ### Body # State Trading ## Summary This booklet, issued by the Forum of Free Enterprise in Bombay, gathers the addresses delivered at the Forum's Convention on State Trading held in Bombay on April 28, 1958. A. D. Shroff, President of the Forum, presides; the other speakers are N. Dandeker, I.C.S. (Retd.), S. C. Bose of the Utkal Mining and Industrial Association in Calcutta, Murarji J. Vaidya, former President of the Indian Merchants' Chamber, and D. B. Futnani, President of the Iron, Steel and Hardware Merchants' Chamber of India. The introduction frames the volume with a sidebar epigraph from Eugene Black, President of the World Bank, that private enterprise must be accepted not as a necessary evil but as an affirmative good. The five speakers converge on a single argument: that the expansion of the State Trading Corporation (S.T.C.) under India's planned-economy doctrine of a 'socialistic pattern of society' is the most sinister encroachment on free enterprise and the democratic way of life since independence. Shroff calls it a 'Twentieth Century East India Company'; Dandeker mounts a constitutional argument that any new State activity must be 'demonstrably necessary' in the public interest and that the absence of autonomy invites backdoor political abuse; Bose documents the wreckage of the mineral and ore trade — manganese, iron ore, mica — under STC monopoly pricing; Vaidya argues that centralised barter deals with Communist countries are simultaneously corrupting export discipline and breeding a clientele dependent on the ruling party; Futnani details the fiscal and procurement disasters in steel imports, where amateur State purchasing has driven up costs by roughly forty per cent. The unifying thesis is that State Trading concentrates favour, finance and discretionary patronage in the hands of bureaucrats and the ruling party, hollowing out parliamentary democracy from within. ## Essays ### INTRODUCTION *By A. D. Shroff* Shroff opens by complaining that the Government has so politicised business that businessmen cannot avoid politics, citing a Gujarati proverb — 'when the ruler takes to trading, the subjects must go a-begging' — to frame his attack. He singles out the nationalisation of life insurance and the founding of the State Trading Corporation as the Government's two most indefensible acts, arguing that the STC has so widely extended Government patronage that it has demoralised the merchant class outright: hundreds of merchants ruined, others reduced to silent fear of speaking out. He warns that the STC is now extending its tentacles to petrol and newsprint, and recounts a personal encounter with Nagpur manganese ore traders whose stocks are mounting and whose businesses are about to be shut down by STC's intrusion. He closes with the polemical comparison: the State Trading Corporation 'can be described as the Twentieth Century East India Company', and its existence is further proof that the Government is attempting to destroy the precious democratic inheritance of independent India. - The Union Finance Minister Morarji Desai's advice to businessmen to stay out of politics is unworkable because the Government has injected politics into every layer of business. - Nationalisation of life insurance and the creation of the State Trading Corporation are the Government's 'two most indefensible actions'. - The STC has demoralised the merchant class — hundreds of merchants ruined, others afraid to speak. - STC is poised to take over petrol and newsprint distribution next, and is already destroying the Nagpur manganese trade. - Shroff brands the STC 'the Twentieth Century East India Company' and frames it as an attempt to destroy democracy. ### STATE TRADING AND ITS IMPLICATIONS *By A. D. Shroff* Dandeker mounts the most legalistic case against State Trading, arguing that India's democratic Constitution rests on fundamental rights and personal liberty, that the State is bound by those limits in every activity it undertakes, and that any new State activity in the economic field must be 'demonstrably necessary in the public interests'. He develops a two-pronged test: a State activity is permissible only where (a) the desired public objectives cannot be achieved by ordinary citizens and corporations, and (b) those objectives cannot be achieved equally well through regulated private enterprise. He argues that the STC has never been forced to meet either test ex ante, and that its results are routinely justified ex post facto by whichever rationale fits the day. He then turns to the limitations on State activity once it is permissible. Even within Iron Curtain countries, he says, State Trading suffers from a near-total absence of autonomy: control over imports, exports, licences and transport priorities can all be manipulated to favour the State Trading Corporation, creating not merely a commodity monopoly but a monopoly over the procedures by which trade succeeds. The unlimited finance and discretionary patronage placed at STC's disposal make it 'almost a de facto financial monopoly' that no private enterprise can compete against, and these distortions, he insists, must be rigidly circumscribed if State Trading is not to escape control entirely. - India's democratic Constitution requires that any new State activity be 'demonstrably necessary in the public interests' before encroaching on individual rights and liberties. - A two-prong test: (i) objectives unachievable by ordinary citizens/corporations, (ii) unachievable through regulated private enterprise. - The STC has never been forced to meet this test ex ante; its results are rationalised ex post facto. - Even within Iron Curtain countries, State Trading suffers from 'almost complete absence of autonomy' that breeds backdoor political abuse. - Unlimited public finance gives the STC a 'de facto financial monopoly' against which no private trader can compete. ### LIMITS & LIMITATIONS OF STATE TRADING *By N. Dandeker* Bose, speaking from the mineral and ore industry, opens with the categorical claim that there are no constitutional or economic grounds for the operation of the STC in India, that the idea is borrowed from the U.S.S.R. and cannot fit a country whose productive organisation lies in the private sector. He recounts that he had urged the STC at its founding to confine itself to shipping, banking and insurance services rather than commodity trade, and warns that an organisation with no clear-cut boundaries — straddling international trade, the Iron Curtain trade, internal trade, vessel chartering and Steel/Hydro-electric projects — is the most dangerous form of State activity. He then catalogues the wreckage in the mineral trade. The STC's inexperience and price-making behaviour has annoyed foreign buyers; iron ore production has dropped from 58% Fe quality previously exported to 35% of mines closed in India; STC has dishonoured 40% of manganese contracts; mines in Andhra and Orissa are shutting; unemployment of fifty thousand workers looms. His central image: 'the S.T.C. has killed the goose laying the golden eggs.' He demands the STC withdraw and the existing private trading mechanism be restored, warning that even three years will not undo one year of damage. Pages 18 and 19 of his address are missing from the rendered chunk. - There are no constitutional or economic grounds for STC operation; the idea is borrowed from the U.S.S.R. and ill-fitted to India's private-sector economy. - STC's lack of clear boundaries and its operation across services, internal trade, mining and steel makes it the most dangerous form of State activity. - Iron ore production has collapsed from 58% Fe exportable quality to 35% of mines closed; manganese ore is in acute slump. - STC has dishonoured 40% of manganese contracts, restraining the private sector's foreign markets. - Aphorism: the STC 'has killed the goose laying the golden eggs'; three years will not repair one year of damage. ### STATE TRADING IN MINERAL, ORES *By S. C. Bose* Vaidya frames his address around the question of how State Trading impacts India's democratic way of life. He asks why the Government of India set up the STC at all — to promote exports? to develop the mining industry? to help the trader? — and answers that, at the time of its formation, the rationale offered was the difficulty of dealing with the centralised state apparatus of Communist trading partners. Yet, he argues, all STC deals with Communist countries have been on a barter basis, while applications by Indian private traders for similar barter arrangements have been denied on the ground that the Government of India opposes such deals as a matter of policy — a flagrant contradiction. His deeper argument is constitutional: in a democracy, the State must treat every citizen as equal before the law, but the STC system is the opposite — registration with the STC is the gateway to favours, and unregistered traders are squeezed out. Centralisation in a single trading body places every importer and exporter at the mercy of the STC and threatens the very fundamentals of freedom, individual liberty and democracy. He warns that when a large body of citizens come to depend on the State Trading Corporation for their livelihood, they will never vote against the ruling party — destroying both opposition politics and parliamentary democracy. Vaidya closes by noting that the Forum of Free Enterprise itself was founded precisely to call a halt to the 'expanding activities and tentacles of the octopus of government control'. - STC was set up ostensibly to deal with centralised Communist trading bureaucracies, but all such trade is in fact on a barter basis available to private traders. - Government denies private traders the same barter arrangements it concludes through the STC — a flagrant contradiction. - Registration with the STC has become a regime of favours, violating democratic equality before the law. - Trade with Communist countries (e.g. pepper to U.S.S.R.) is destroying India's hard-currency export markets like America (70% drop in pepper exports). - The greatest danger is political: dependence on STC patronage will produce a captive electorate, making opposition vote and parliamentary government impossible. ### STATE TRADING AND DEMOCRACY *By Mr. Murarji J. Vaidya* Futnani, speaking for the iron-and-steel trade, opens with the formulation that 'the State Trading Corporation is not a commercial venture but may appropriately be termed as a political misadventure', arguing that the scandals of state trading dwarf even the Life Insurance Corporation affair. Iron and steel, he notes, is one of the biggest single items in India's import bill — Rs. 1,203 crores, roughly 20% of total foreign exchange requirements — yet only Rs. 120 crores (about 20%) is left for private importers; the rest is monopolised by the State. He argues that civil servants, however capable, cannot match the practical experience of generations of steel traders, and recalls the disastrous first purchase under an ex-Secretary who acquired 200,000 tons valued at Rs. 15 crores with no prior experience in steel. He quotes a family proverb — 'Na Janaanewalla Baba Levey, Pota Bechey' (the inexperienced grandfather buys and the grandson sells) — to illustrate that ill-specified purchases sit unsold for years. He details case after case in which the Government, by going abroad without bargaining discipline, paid 33%–40% more than the ruling market price for steel billets, flat bars and plates; refused contractual cancellation when prices fell 40%; and crashed prices on the foreign market by signalling India's exact requirements (£53 down to £34 per ton). His prescription: invite global or country-wide tenders, only in quantities needed at the time. The rendered chunk cuts off mid-essay at page 37. - Iron and steel imports total Rs. 1,203 crores — ~20% of India's foreign-exchange requirements — yet private importers handle only ~20% of that. - The STC's first steel purchase under an ex-Secretary acquired 200,000 tons worth Rs. 15 crores from someone with no steel experience. - Government bought standard steel billets at ~£55 per ton c.i.f. when the same were available at £33–£34, paying ~33% premiums on poorly specified material that then sat unsold. - By openly broadcasting India's total requirement (35,000 tons against a 10,000-ton offer), the Government caused foreign sellers to crash export prices from £53 to £34 per ton — a 40% loss in value for India. - Proverbial frame: 'Na Janaanewalla Baba Levey, Pota Bechey' — inexperienced grandfathers buy, grandsons sell at a loss. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] State Trading And Democracy URL: https://indianliberals.in/primary-works/state-trading-and-democracy-by-murarji-vaidya-october-1-1956/ ### Summary Reprinted from The Times of India of 1 October 1956 and circulated as a pamphlet by the Forum of Free Enterprise, Murarji Vaidya's "State Trading And Democracy: 'Doctrinaire Dogmas'" attacks the recently formed State Trading Corporation of India. Vaidya argues that even as communist-bloc economists are quietly retreating from their command-economy commitments, India is drifting in the opposite direction — toward nationalisation and state trading — in deference to ideological slogans rather than evidence. He marshals two principal authorities. First, he reports on the post-war congress of Polish economists in which Prof. Oscar Lange complained of the lack of proper statistical data and bureaucratic mishandling of economic problems, and in which Prof. W. Brus made a powerful plea for reinstating the law of supply and demand against Marxian dogma. Second, he cites J. R. D. Tata's annual TISCO address, which warned of a drift toward a highly centralised form of state capitalism.… ### Body # State Trading And Democracy *By MURARJI VAIDYA* ## Summary Reprinted from The Times of India of 1 October 1956 and circulated as a pamphlet by the Forum of Free Enterprise, Murarji Vaidya's "State Trading And Democracy: 'Doctrinaire Dogmas'" attacks the recently formed State Trading Corporation of India. Vaidya argues that even as communist-bloc economists are quietly retreating from their command-economy commitments, India is drifting in the opposite direction — toward nationalisation and state trading — in deference to ideological slogans rather than evidence. He marshals two principal authorities. First, he reports on the post-war congress of Polish economists in which Prof. Oscar Lange complained of the lack of proper statistical data and bureaucratic mishandling of economic problems, and in which Prof. W. Brus made a powerful plea for reinstating the law of supply and demand against Marxian dogma. Second, he cites J. R. D. Tata's annual TISCO address, which warned of a drift toward a highly centralised form of state capitalism. Vaidya then catalogues the State Trading Corporation's rapid incursion into cement, manganese and iron ore, iron and steel, oils and oilseeds — moves he reads as a direct contradiction of the assurances given to the private sector in the Prime Minister's Industrial Policy statement, which had promised scope, freedom and encouragement for private enterprise alongside the public sector. In the "Larger Issues" section Vaidya broadens the critique: state trading concentrates economic and political power in the same hands, and the global record of state monopolies (outside communist regimes whose apparent success masks shortages, high prices and red-tapism) is one of dismal failure. He warns that nascent Indian democracy and its still-imbalanced industrial structure cannot afford to drive successful private traders out of the commodities they have built up. The piece closes by urging the business community — and the newly founded Forum of Free Enterprise — to combine integrity with active social engagement, so that legitimate grievances against private trade do not become pretexts for further state expansion into caustic soda, soda ash, tyres and tubes, or steel imports. ## Key points - Reprint of Murarji Vaidya's Times of India article of 1 October 1956, issued as a pamphlet by the Forum of Free Enterprise (Sohrab House, Bombay). - Frames the formation of the State Trading Corporation of India as an ironic embrace of 'doctrinaire dogmas' precisely when communist-bloc economists are reconsidering them. - Cites a post-war Polish economists' congress where Prof. Oscar Lange criticised bureaucratic mishandling and Prof. W. Brus pleaded for reinstating the law of supply and demand. - Invokes J. R. D. Tata's annual TISCO speech warning against a highly centralised form of state capitalism. - Catalogues the Corporation's rapid expansion into cement, manganese ore, iron ore, iron and steel, and oils and oilseeds in apparent contradiction to assurances given in the Prime Minister's Industrial Policy Resolution. - Argues that the global history of state trading (outside communist monopolies) is one of dismal failure, producing shortages, high prices, loss to the exchequer, and red-tapism. - Warns against further canalisation of trade in commodities such as caustic soda, soda ash, tyres and tubes, and steel imports. - Calls on the private business community and the newly started Forum of Free Enterprise to foster healthy traditions and take active social responsibility for the common man. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] STATE TRADING IN FOODGRAINS URL: https://indianliberals.in/primary-works/state-trading-in-food-grains-a-d-shroff-jun7-1959/ ### Summary This 1959 booklet from the Forum of Free Enterprise gathers the presidential remarks and four addresses delivered at a Bombay Convention on State Trading in Foodgrains held on 13 March 1959, called in response to the National Development Council's November 1958 decision to take wholesale foodgrain distribution into State hands. A. D. Shroff presides; he is joined by Devji Rattansey (Vice-President of the Bombay Foodgrains Dealers' Association), Ranchhoddas Jethabhai (President of the Bombay Rice Merchants' Association), M. H. Hasham Premji (President of the All-India Foodgrains Dealers' Association) and Prof. R. K. Amin of the Vallabh Vidya Nagar Commerce College, Anand.… ### Body # STATE TRADING IN FOODGRAINS ## Summary This 1959 booklet from the Forum of Free Enterprise gathers the presidential remarks and four addresses delivered at a Bombay Convention on State Trading in Foodgrains held on 13 March 1959, called in response to the National Development Council's November 1958 decision to take wholesale foodgrain distribution into State hands. A. D. Shroff presides; he is joined by Devji Rattansey (Vice-President of the Bombay Foodgrains Dealers' Association), Ranchhoddas Jethabhai (President of the Bombay Rice Merchants' Association), M. H. Hasham Premji (President of the All-India Foodgrains Dealers' Association) and Prof. R. K. Amin of the Vallabh Vidya Nagar Commerce College, Anand. The contributors agree that the foodgrains crisis is fundamentally a problem of production rather than distribution, that the existing private trade is more efficient than the State machinery proposes to replace it, and that the policy is being pushed to deflect attention from the Government's deficit-financing failures. The volume's argumentative centre is twofold: a moral and constitutional warning that the Indian liberty experiment is being eroded by an expanding bureaucratic State whose appetite for control runs from 'pins to motor cars', and an applied economic case that procurement, price-fixing and the elimination of three lakh foodgrain merchants will impoverish cultivators, swell unemployment, and worsen the very price-rise it claims to cure. Speakers repeatedly invoke the failures of wartime rationing under Rafi Ahmed Kidwai's decontrol, cite the Asoka Mehta and Food Inquiry Committee reports, and call instead for improved production incentives, the removal of food zones, an all-India advisory board of merchants, and licensed (not state-monopolised) trade. ## Essays ### A DANGER TO DEMOCRATIC WAY OF LIFE *By A. D. Shroff* Shroff's presidential address frames the proposed State trading in foodgrains as a 'danger to the democratic way of life' rather than a technical adjustment. He attacks the moral double-standard by which private merchants are vilified for profit-seeking while the State Trading Corporation's Rs. 53-crore surplus on cement is praised as a national virtue, and warns that the Prime Minister's habit of denouncing 'vested interests' is in fact aimed at the only constituency capable of resisting the concentration of political and economic power in the bureaucracy. He cites the All-India Manufacturers' Organisation address of 11 March 1959 to argue that the Government's real grievance is independent thought, not concentration. The argument closes with a constitutional point: the freedom to choose one's avocation under the Constitution is violated if 300,000 merchants are forced to surrender their trade to the State Trading Corporation. Shroff exhorts the mercantile community—'the fullest backing' of which secured political independence—to mobilise public opinion, agitate for the removal of bad laws from the Statute Book, and remind the rulers that ill-conceived state trading will neither halt inflation nor solve the food problem, and will one day be regretted. - Treats State trading as a question of democratic principle, not merely of economic efficiency. - Highlights moral inconsistency: private profit is condemned while State Trading Corporation surpluses (Rs. 53 crores on cement) are celebrated. - Reads attacks on 'vested interests' as a campaign against the independent mercantile community that bankrolled the freedom struggle. - Argues the policy violates the constitutional right to choose one's profession and concentrates power dangerously in bureaucrats. - Locates the real food problem in deficit financing and inadequate production, not in middlemen's behaviour. ### AN ALTERNATIVE TO STATE TRADING *By Devji Rattansey, M.L.C. (Bombay State), Vice-President, Bombay Foodgrains Dealers' Assn.* Devji Rattansey, Vice-President of the Bombay Foodgrains Dealers' Association, argues that the National Development Council's November 1958 decision was a hasty response to a 5–8% price rise in 1958 caused by an inaccurate rabi forecast, not by trader misconduct. He notes that the Asoka Mehta Committee's recommended remedies—a Price Structure Board, wealth and expenditure taxes, a 45% maximum income-tax ceiling—were quietly dropped while only its 'doctrinaire' suggestion of state trading was retained, and points out that no Food Minister has actually been able to explain what state trading in foodgrains means in practice. Rattansey rebuts the charge that traders are profiteers by showing that bank advances against foodgrain stocks have hardly grown, and that the Government's own conduct (levying export duties one day, banning exports the next, promoting them on the third) destroys the certainty that trade requires. He calls for the removal of food zones, the appointment of an all-India advisory council of honest merchants, and limited licensed trading by the State only for imports—closing by quoting Gandhi on ministerial humility and warning that handing the trade to a few lakh inexperienced civil servants will produce a mess. - The 1958 price rise was a forecast failure, not a hoarding conspiracy, and bumper 1957–58 crops had previously held prices steady. - The Asoka Mehta Committee's structural remedies were dropped; only its state-trading proposal survived. - Even the Food Minister cannot define what 'state trading in foodgrains' actually means. - Government conduct—shifting export duties and bans daily—destroys the certainty that any trade requires. - Proposes removing food zones, a national advisory council of merchants, and licensed (not monopolised) trade. ### A NOVEL IDEA *By Ranchhoddas Jethabhai, President, Bombay Rice Merchants' Association* Only the opening page of Ranchhoddas Jethabhai's address (President of the Bombay Rice Merchants' Association) is in the rendered set; the rest of his text is missing from the supplied PDF. On the page seen he argues that the 'novel idea' of state trading was hailed at the Nagpur Congress in early 1959 and rushed into implementation by the Government, with traders cast as a 'scapegoat' for steep price rises that were really driven by other forces. He recalls that earlier wartime state trading in foodgrains during the rationing period had brought hardship to producers and consumers and caused heavy losses, and cites the Food Inquiry Committee Report's estimate that government handling cost roughly Rs. 46.4 crores a year while serving less than 15% of the population. - The proposal was hailed at the early-1959 Nagpur Congress session and rushed through soon after. - Middlemen were scapegoated for a price rise the speaker attributes to other factors. - Recalls heavy losses and hardship to producers and consumers under wartime state trading and rationing. - Cites the Food Inquiry Committee's figure of Rs. 46.4 crores per year wasted serving under 15% of the population. ### THE FOOD SITUATION IN ITS PROPER PERSPECTIVE *By M. H. Hasham Premji, President, All-India Foodgrains Dealers' Association* M. H. Hasham Premji, President of the All-India Foodgrains Dealers' Association, sets out to clear away 'emotional' confusion and restore the factual foundations of the food debate. He reviews seventeen years of swings between rationing and free trade, treating the late Rafi Ahmed Kidwai's decontrol as one of the wisest steps independent India ever took. He shows that foodgrain output has risen from 32 million tons in 1939–40 to a projected 71 million in 1958–59 (a 40-million-ton increase), that population pressure (1.5% growth) and the propensity to consume of a poor people account for most of the persisting shortage, and that the irrigation potential created by multi-purpose projects has not been put to use—so the right strategy is to expand production and warehousing rather than nationalise trade. The second half is a defence of the foodgrain trade itself: a network of primary and secondary mandis, lakhs of small firms, and 350–400 thousand wholesale rice traders in Bombay city alone, earning barely 2% gross (1% nett) profit. He calls the claim that the trade is concentrated in 'a few hands' a 'blatant lie', warns that nearly Rs. 1,000 crores of deficit financing and an additional Rs. 250 crores planned for the year ahead will keep food prices high regardless of who controls distribution, and proposes that the Government concentrate on production-side measures—cheap rural electricity, cattle wealth, cowdung as fuel, warehousing—rather than 'grand schemes like State Trading in food or from pins to motor cars'. - Treats Rafi Ahmed Kidwai's decontrol of foodgrains as one of independent India's wisest decisions. - Output has risen from 32 million tons (1939–40) to a projected 71 million (1958–59); the problem is production, not distribution. - Population growth of 1.5% per annum and rising consumption account for most persistent pressure on prices. - Rejects the 'concentration' charge: lakhs of small firms and hundreds of thousands of wholesalers populate the trade at 1–2% margins. - Identifies deficit financing (nearly Rs. 1,000 crores already, with Rs. 250 crores more proposed) as the real driver of food inflation. - Recommends rural electrification, fodder/cowdung utilisation, irrigation and warehousing over State distribution. ### AN ECONOMIST'S APPROACH TO THE FOOD PROBLEM *By Prof. R. K. Amin, Principal, Commerce College, Vallabh Vidya Nagar, Anand* Prof. R. K. Amin (Principal, Commerce College, Vallabh Vidya Nagar, Anand) supplies the academic complement to the merchant speakers. He examines the three principal arguments adduced for state trading—exploitation by middlemen, the need to dampen price fluctuations during the Second Five-Year Plan, and the need to raise marketable surplus and tax revenue from the rural sector for industrialisation—and finds none of them sufficient. Middlemen exploitation, where it exists, can be limited by warehouses and Rural Credit Survey reforms; price fluctuations are driven by deficit financing and the inelasticity of the agricultural supply curve, not by traders, and are better controlled by licensing and stock disclosure than by state monopoly. On the structural argument, Amin agrees that India's industrialisation needs a larger marketable surplus and more rural tax revenue, but argues that on a backward-sloping rural supply curve, taking grain away from low-income farmers without giving them low-priced industrial goods in exchange is 'tantamount to taking away a piece of bread from the hungry mouth'. He concludes that the proper approach is a production-oriented agricultural policy, full implementation of the Rural Credit Survey recommendations, and a Community Development Scheme that raises voluntary rural contributions—reserving state trading only for the case where democracy itself is to be sacrificed to total economic control. - Frames and refutes three standard arguments for state trading: middlemen exploitation, price stabilisation and surplus extraction for industrialisation. - Argues price instability comes from deficit financing and inelastic agricultural supply, not from trader behaviour. - Uses the backward-sloping supply curve to show that procurement at low prices in a poor rural economy will depress output, not raise marketable surplus. - Treats taxation of agriculture as defensible in principle but inequitable when farmers cannot exchange the cash for industrial goods. - Endorses production-oriented agricultural policy, Rural Credit Survey reforms, and voluntary labour through Community Development. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] STOCK MARKET IN TURMOIL – LESSONS FOR INVESTORS URL: https://indianliberals.in/primary-works/stock-market-and-turmoil-lessons-for-investors-by-shah-mulraj-simha-2001/ ### Summary Stock Market in Turmoil – Lessons for Investors is a 2001 Forum of Free Enterprise pamphlet collecting three contributions on the Indian stock market crisis that followed the collapse of the early-nineties bull run and the IT-stock hype. Prof. S. L. N. Simha, a former Principal Adviser of the Reserve Bank of India, opens with a forensic essay on "The Stock Market Debacle" originally carried by Southern Economist, blaming the Government, the RBI and SEBI more than speculators for permitting bank credit, badla carry-overs, mutual-fund share lending and weak regulatory independence to inflate the bubble. J. Mulraj, a financial analyst and Times of India columnist, follows with "Some Rules for Investors," a talk delivered at a Forum of Free Enterprise meeting in Mumbai on 18 April 2001, tracing the structural shift from open-outcry to screen-based trading, the rise of mutual funds and institutional ownership, and the global dotcom valuation mania. A third contribution by Dr. Ajay Shah is announced on the cover but falls outside the rendered pages. ### Body # STOCK MARKET IN TURMOIL – LESSONS FOR INVESTORS *By Prof. S. L. N. SIMHA, J. MULRAJ, Dr. AJAY SHAH* ## Summary Stock Market in Turmoil – Lessons for Investors is a 2001 Forum of Free Enterprise pamphlet collecting three contributions on the Indian stock market crisis that followed the collapse of the early-nineties bull run and the IT-stock hype. Prof. S. L. N. Simha, a former Principal Adviser of the Reserve Bank of India, opens with a forensic essay on "The Stock Market Debacle" originally carried by Southern Economist, blaming the Government, the RBI and SEBI more than speculators for permitting bank credit, badla carry-overs, mutual-fund share lending and weak regulatory independence to inflate the bubble. J. Mulraj, a financial analyst and Times of India columnist, follows with "Some Rules for Investors," a talk delivered at a Forum of Free Enterprise meeting in Mumbai on 18 April 2001, tracing the structural shift from open-outcry to screen-based trading, the rise of mutual funds and institutional ownership, and the global dotcom valuation mania. A third contribution by Dr. Ajay Shah is announced on the cover but falls outside the rendered pages. ## Essays ### The Stock Market Debacle *By Prof. S. L. N. Simha* Simha argues that the recurring Indian stock-market debacles are not primarily the fault of speculators but of regulators who, for almost two decades, treated a bullish stock market as a proxy for economic strength. He charges the Government, the Reserve Bank of India and SEBI with permitting banks and depository institutions to lend against shares, engage in badla carry-overs and loan securities to bear operators, while neglecting margin discipline and self-regulation by exchanges. Citing Keynes's beauty-contest analogy to explain why even eminent experts cannot price equities reliably, he warns small savers off direct equity exposure and proposes a battery of reforms: a separate banking-supervision authority independent of the RBI, a SEBI restructured along the lines of the U.S. SEC with statutory independence and five-year tenures, prohibition of bank credit and share-lending for stock transactions, short rolling settlements in place of badla, mandatory bonus issues and tighter dividend conventions, dematerialisation of share transfers through banks, and a massive investor-education programme. The essay ends on a deliberately deflationary note: undue importance has been given to share-price movements as an index of the country's economic performance, "like the misguided importance we have given to cricket". Simha cautions against rushing to introduce derivatives trading beyond stock-index futures, citing the near-bankruptcy of Long-Term Capital Management, and insists that scams confined to individuals will peter out but those involving banks and mutual funds threaten the capital market itself. - Primary responsibility for the debacle lies with Government, RBI and SEBI rather than with speculators, whose job is to maximise private gain. - Bank credit, badla carry-overs and securities lending by mutual funds and depository institutions are identified as the mechanisms by which speculation was financed. - SEBI, modeled too weakly on the U.S. SEC, must be statutorily insulated from the Finance Ministry with five-year board tenures and emoluments comparable to RBI Governors. - Small savers should stay out of direct equity, taking the route only through mutual funds — and only marginally, citing T. T. Krishnamachari's logic in setting up the Unit Trust of India. - Reforms proposed include a separate banking-supervision authority, short rolling settlements, prohibition of share-lending, mandatory bonus issues, dematerialisation, and an investor-education drive. - Government should remain neutral in markets — neither help bulls nor bears — and avoid creating hype around equity investment as an index of national performance. ### Some Rules for Investors *By J. Mulraj* Mulraj, who joined the Bombay Stock Exchange in 1985, narrates the structural transformation of Indian markets from open-outcry floor trading and jobber-mediated price quotes to screen-based trading, paperless settlement and a competitive brokerage industry following foreign entry. He argues that the transaction-cost gains have given investors "greater control over their investment destiny" — but warns that the parallel shift in ownership patterns, with mutual funds replacing individuals as the dominant holders, has introduced its own herd-driven volatility. In the rendered pages he diagnoses the 2001 turmoil as the joint product of domestic factors and a global venture-capital mania that funded dotcoms on "eyeballs rather than profits," comparing it to a tulip mania without the deliberate fraud. He identifies open-ended NAV-based mutual funds as a marketing rather than financial success and as a structural source of short-termism, citing Lucent Technologies' fall after thirteen quarters of expectation-beating and the Infosys correction in India. The text breaks off mid-argument at the close of the rendered chunk; the third contribution by Dr. Ajay Shah lies past the cut. - The transaction side of Indian markets has improved dramatically with screen-based trading, paperless settlement and foreign brokerage competition. - Brokerages in India fell uniformly with electronic trading — unlike post-Big-Bang London, where retail customers were charged 4 per cent while institutions paid a quarter of a per cent. - Ownership has shifted from individuals to institutions: the U.S. ratio inverted over thirty years, and India is moving the same way. - Open-ended NAV-based mutual funds are a marketing innovation, not a financial one, and structurally encourage short-termism in corporate management. - The dotcom mania exemplified valuation by "eyeballs rather than profits," with disruptive technologies (Napster, p2p) compounding the difficulty of predicting business survival. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] Statement on the Current Economic Situation in India URL: https://indianliberals.in/primary-works/statement-on-current-economic-situation-in-india-september-2019/ ### Summary Published in September 2019 by the Forum of Free Enterprise, this short booklet is an institutional position paper addressed to Parliament and the wider public on India's then-slowing economy. The Forum frames the moment — a six-year-low GDP growth rate of 5%, the stated ambition of a $5 trillion economy by 2024, and a million young people entering the workforce each month — as a 1991-style opportunity to push through structural reform. It calls for a special session of Parliament that listens to industry and agriculture and commits to a higher growth trajectory of 8–9% sustained over seven years, arguing that with an unstable external environment the answers must be found internally. The core of the statement is a numbered list of eight critical issues on the relationship between government and the private sector: (1) the role of government should be confined to rules of the game and law and order, with major spending channelled through the private sector and the release of an estimated Rs 12 lakh crore of undisputed government dues; (2) loss-making public sector units such as Air India, BSNL and MTNL must be disinvested, banks and insurance companies privatised, with divestmen… ### Body # Statement on the Current Economic Situation in India ## Summary Published in September 2019 by the Forum of Free Enterprise, this short booklet is an institutional position paper addressed to Parliament and the wider public on India's then-slowing economy. The Forum frames the moment — a six-year-low GDP growth rate of 5%, the stated ambition of a $5 trillion economy by 2024, and a million young people entering the workforce each month — as a 1991-style opportunity to push through structural reform. It calls for a special session of Parliament that listens to industry and agriculture and commits to a higher growth trajectory of 8–9% sustained over seven years, arguing that with an unstable external environment the answers must be found internally. The core of the statement is a numbered list of eight critical issues on the relationship between government and the private sector: (1) the role of government should be confined to rules of the game and law and order, with major spending channelled through the private sector and the release of an estimated Rs 12 lakh crore of undisputed government dues; (2) loss-making public sector units such as Air India, BSNL and MTNL must be disinvested, banks and insurance companies privatised, with divestment proceeds used to retire public debt; (3) vacant public land — including parcels held by the Mumbai Port Trust — should be auctioned in a sequential, transparent manner; (4) punitive language by officials, including talk of creating "fear" around traffic penalties, must be replaced by progressive penalties and a collaborative tone protective of personal liberties and free expression; (5) the National Skill Development Corporation's target of 500 million workers must be reinstated and monitored, given that only about 12% of trainees have found steady jobs; (6) ease of doing business needs ground-truth assessment alongside the World Bank index, with a clear roadmap for foreign direct investment and lower overall tax costs; (7) state and central governments must offer long-term policy clarity rather than overturning predecessors' contracts; and (8) entrepreneurs should be supported as the Prime Minister's "Growth Ambassadors." A closing section on industry-specific measures presses for revival of real estate and construction through lower GST and stamp duty, stability in telecom, textile, auto and power, recognition of India's poor R&D base (a single Chinese university, Tsinghua, is said to produce more IP than all of India), and urgent labour reforms — including measures to lift female labour-force participation from 22% (against 43% in China). The booklet concludes that with bold reform a virtuous cycle of growth can lift India to a level "which could not have been foreseen a decade ago," and is sponsored by the Shailesh Kapadia Memorial Trust in memory of the late chartered accountant Shailesh Kapadia (1949–1988). It opens with a Shroff epigraph on the perennity of free enterprise and closes with Eugene Black's line that private enterprise must be accepted "not as a necessary evil, but as an affirmative good." ## Key points - Forum of Free Enterprise treats the 2019 slow-down (GDP at a six-year low of 5%) as a 1991-style window for structural reform, and urges a special session of Parliament dedicated to it. - Argues that government should confine itself to rules of the game and law and order, channelling major spending through the private sector and releasing an estimated Rs 12 lakh crore of undisputed government dues. - Calls for clear disinvestment and privatisation of Air India, BSNL, MTNL, nationalised banks and insurance companies, with proceeds used to retire public debt rather than fund recurring bailouts (Rs 300,000 crore injected into PSU banks over five years against NPAs of over Rs 800,000 crore). - Demands transparent, time-bound auction of vacant public land (e.g. Mumbai Port Trust parcels) to private development as a tool to lower real-estate prices and stimulate construction. - Pushes back on the rhetoric of "fear" in penalty regimes, insisting that personal liberties and freedom of expression are preconditions of a sustainable economy. - Identifies skilling, ease of doing business, foreign direct investment clarity, lower tax burden, predictable policy across states, and a stronger R&D base as preconditions for an 8–9% growth trajectory sustained over seven years. - Highlights female labour-force participation (~22% vs China's 43%) as both a source of depressed incomes and a moral issue requiring labour reform. - Booklet is published in memory of chartered accountant Shailesh Kapadia (1949–1988) by his memorial trust, and is bookended by epigraphs from A. D. Shroff and former World Bank president Eugene Black. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] STATE TRADING IN A DEMOCRACY URL: https://indianliberals.in/primary-works/state-trading-in-a-democracy-dr-s-g-panandikar-aug8-1960/ ### Summary State Trading in a Democracy gathers the speeches delivered at a Forum of Free Enterprise symposium held in Bombay on 6 May 1960, presided over by Dr. S. G. Panandikar. The booklet was published in August 1960 in the wake of a Parliamentary Estimates Committee report on the State Trading Corporation (STC) and amid a countrywide controversy over the STC's rapidly expanding scope. Five speakers — Dr. S. G. Panandikar, Dr. K. A. Hamied, M. H. Hasham Premji (President of the Federation of All-India Foodgrains Dealers' Associations), B. M. Choksi (President of the Paper Traders' Association, Bombay), and R. V.… ### Body # STATE TRADING IN A DEMOCRACY ## Summary State Trading in a Democracy gathers the speeches delivered at a Forum of Free Enterprise symposium held in Bombay on 6 May 1960, presided over by Dr. S. G. Panandikar. The booklet was published in August 1960 in the wake of a Parliamentary Estimates Committee report on the State Trading Corporation (STC) and amid a countrywide controversy over the STC's rapidly expanding scope. Five speakers — Dr. S. G. Panandikar, Dr. K. A. Hamied, M. H. Hasham Premji (President of the Federation of All-India Foodgrains Dealers' Associations), B. M. Choksi (President of the Paper Traders' Association, Bombay), and R. V. Murthy — converge on a common indictment: that the STC's monopoly status, its drift from regulator to operator, its bureaucratic incompetence in commodity-specific cases (cement, manganese, paper, foodgrains), and its political utility as a patronage and vote-gathering machine threaten both Indian democracy and the productive trading community. The contributors place their critique in the tradition of liberal political economy: Hamied invokes Lincoln's definition of democracy and Ludwig Erhard's umpire-versus-player analogy, Premji warns that state trading in foodgrains will end in compulsory procurement and rationing, while Murthy documents specific operational failures in cement and manganese exports. The volume's argumentative center is that competition — not state monopoly — is the safeguard against the joint exploitation of producer and consumer, and that the State's proper role lies in education, public health, infrastructure and a fair playing field rather than in usurping commercial functions traders have performed for generations. ## Essays ### MONOPOLY PRACTICES OF STATE TRADING CORPORATION HURT NATIONAL ECONOMY *By DR. S. G. PANANDIKAR* Dr. S. G. Panandikar, presiding over the symposium, argues that the harm of the State Trading Corporation flows specifically from its monopoly character rather than from state trading per se. Because the STC is simultaneously the monopoly buyer and the monopoly seller, both producer and consumer are squeezed; the cure, if state trading must continue at all, is to reduce the STC to one trader among many that competes on fair terms with the private trade. He further contends that the STC cannot be run effectively by officers without commercial experience and personal market knowledge, and that even continued operation requires the active guidance of experienced businessmen. His preferred solution is to dispense with the STC altogether and trust private traders to perform the essential function of trading efficiently and at minimum social cost. - The monopoly character of the STC — not state trading in the abstract — is what damages the national economy. - Combining monopoly buyer and monopoly seller in one entity injures producer and consumer simultaneously. - If state trading must exist, the STC should be one competing trader, not a monopolist. - Officers without business experience and market knowledge cannot run a trading enterprise; experienced traders must at minimum advise the STC. - Dispensing with the STC entirely is the most desirable course because private trade can perform trading functions efficiently and at minimum cost to society. ### STATE TRADING IN INDIA *By Dr. K. A. HAMIED, B.Sc., M.A., Ph.D. (Berlin). F.R.I.C., M.L.C., J.P.* Dr. K. A. Hamied frames state trading as a constitutional and philosophical question: a democratic State exists to look after public affairs and the basic well-being of the people, not to invade their day-to-day economic lives. Drawing on Lincoln's definition of democracy and Ludwig Erhard's famous analogy of the State as the football umpire rather than a player, he argues that direct trading by the State violates the fundamental principle of democracy by becoming an instrument of oppression over the ruling people themselves. Hamied then audits the STC's four declared objectives — expanding trade with Communist countries, maintaining price equilibrium, bridging supply-demand gaps, and supplementing private trade — and finds that the organisation has either failed or quietly substituted profit-making and the supplanting of private trade for its stated aims. He cites the Bombay oil refineries, foodgrain price levels, and inter-zonal wheat barriers as evidence; offers a striking comparison between the Canadian Commercial Corporation's lean 51-person staff and the STC's 1,540 employees handling lower turnover; and insists that the path to national greatness lies through education, public health, housing, schools and infrastructure rather than through state shops in milk powder, cement and handloom cloth. - A democratic State's duty is to look after public affairs, not to trade in goods of daily requirement. - Erhard's umpire analogy: the State should referee the economic game, not start playing football itself. - The STC's four declared objectives have been displaced by an undeclared one — profit-making for the State. - Comparison with the Canadian Commercial Corporation (51 staff, $95M turnover vs. STC's 1,540 staff on lower turnover) demonstrates the STC's bureaucratic bloat. - Zonal barriers in wheat trade prevent prices in Delhi (Rs. 18) and Ghaziabad (Rs. 19) from being equalised with Bombay (Rs. 27); the State itself creates artificial price differentials. - National greatness depends on education, social reform and infrastructure — not on the State selling milk powder, cement and handloom cloth. ### STATE TRADING IN FOODGRAINS WILL LEAD TO RATIONING *By M. H. HASHAM PREMJI, President, Federation of All-India Foodgrains Dealers' Associations* M. H. Hasham Premji, speaking as President of the Federation of All-India Foodgrains Dealers' Associations, warns that state trading in foodgrains is a political project that will end in rationing. He recounts a Bombay meeting with the Managing Director of the STC at which extension of the STC's foodgrains role was floated, places the current push in the context of the PL 480 agreement for 17 million tons of US wheat secured by Food Minister S. K. Patil, and argues that India's recurrent food crises stem from inadequate production and storage rather than from trader malpractice. He ridicules the bureaucratic hope of overcoming a 33% production shortfall by inserting officials between producer and consumer, citing John Matthai's and Eugene Black's warnings against state enterprise overreach, and concludes that compulsory grain procurement plus consumer rationing is the inevitable endpoint of the present path. With characteristic moral framing — Mahatma Gandhi's warning against false gods and Moses's first commandment — Premji defends the 300,000 small foodgrains traders as the only existing machinery capable of moving the country's grain. - State trading in foodgrains is a political instrument designed to entrench government machinery and secure votes — not a solution to the food problem. - The PL 480 deal for 17 million tons of US wheat is a temporary palliative; the real problem is a 33% production shortfall and inadequate buffer-storage capacity. - Government inspection of 140-150 godowns showed only one or two cases of hoarding, refuting the case for sweeping state intervention. - John Matthai and Eugene Black are invoked as authorities counselling restraint in state economic enterprise. - Persisting in state trading will force complete controls, compulsory procurement and rationing — destroying the small-trader machinery the country actually depends on. ### BUREAUCRATIC HANDLING OF TRADE IS NOT SUITED TO ECONOMIC GROWTH *By B. M. CHOKSI, President, Paper Traders' Association, Bombay* B. M. Choksi, President of the Paper Traders' Association, Bombay, brings the perspective of a working trader who initially gave the STC the benefit of the doubt. Recounting how the STC moved from foreign trade with Communist countries into newsprint, tissue paper and other domestic distribution roles, he describes the alarmed response of established paper traders who found themselves forced into 'Associate' arrangements with the corporation in order to keep doing business. Drawing on the parallel experience of cement, shipping and export traders, Choksi argues that the STC's expansion reflects a new 'religion of socialism' that misunderstands the role of trade in national development. He concludes that the path of increased state trading leads to State Capitalism, a bureaucracy hostile to both individual freedom and democracy, and the ruin of the economy. - Initial openness to the STC turned to alarm as the corporation entered newsprint, tissue paper, cement and shipping arrangements. - STC's 'Associate' scheme forces established traders to participate on its terms in order to remain in their own line of trade. - Expansion is driven by a political-ideological 'religion of socialism' rather than by economic necessity or efficiency. - Politicians' abstract theories are detached from market realities and the prosperity of the trading community. - Increased state trading leads to State Capitalism, a bureaucracy that destroys individual freedom and democracy, and economic ruin. ### STATE TRADING — AN UNMITIGATED TALE OF BUNGLING & INEFFICIENCY *By R. V. MURTHY* R. V. Murthy takes the symposium's argument to its case-study extreme, treating the STC's record in two commodities — cement (internal distribution) and manganese ore (export) — as a forensic indictment. In cement, he shows the STC has been pocketing the maximum conceivable profit margin without handling a single bag, exploiting a gap between an Rs. 58-10 ex-works price reported by the Estimates Committee and an Rs. 15.50 figure cited by the Economy Minister. In manganese, he documents the Visakhapatnam loading farce and links the resulting Indian export decline (24% against a 4% world drop, with steel-mill destocking in America compounding the damage) to the STC's mishandling. Murthy then turns to barter deals, ferro-manganese, and the broader pattern of the STC displacing experienced exporters from long-standing networks. He warns of the dangers of bilateral barter with Communist countries — once trade is funnelled politically, those customers can switch off without notice — and ends with the symposium's most quoted line: once the tiger tastes human blood, it never gives up the habit. The STC's entry into trade, he concludes, is the most unfortunate event in recent Indian economic history. - STC's cement operations yield massive unearned profit margins precisely because it never handles a bag; the Estimates Committee's Rs. 58-10 ex-works price and the Economy Minister's Rs. 15.50 figure cannot both be true. - Manganese exports illustrate operational failure: ships sent to load at Visakhapatnam found no ore, were diverted to Bombay, and faced fabricated berth-delay explanations to mask losses. - India's manganese exports declined 24% even as the global decline was only 4%; the STC is the proximate cause. - STC's barter deals with Communist countries entail strategic risk: bilateral political customers can terminate trade without warning, leaving exporters stranded. - Bureaucratic ignorance is amplified by Parkinson-style staff growth; the STC's personnel expansion compared to Canadian counterparts illustrates the disparity. - The STC's entry into trade is the most unfortunate event in recent Indian economic history and demands a clear policy declaration in light of the Estimates Committee Report. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] STRONG MEDICINE FOR INDIA URL: https://indianliberals.in/primary-works/strong-medicine-for-india-leland-hazard-july-11-1966/ ### Summary Leland Hazard's pamphlet, first published in the December 1965 Atlantic Monthly and reissued by the Forum of Free Enterprise in July 1966, is a Cold-War-era polemic that prescribes "strong medicine" for a country he depicts as militarily lifted by the Pakistan crisis but still hobbled by chronic economic and administrative diseases. Writing as a frequent visitor to India and a former industrialist-academic, Hazard urges the Western donor world to attach conditions to its aid: India must first put its own house in order before more grants, loans, and technical assistance keep flowing. He frames the failed Five-Year Plans, the swollen Delhi bureaucracy, and the cult of state ownership as obstacles that decades of well-meaning but unconditional foreign aid have allowed to harden. The core argument is a critique of Nehruvian planning and what Hazard, citing John Kenneth Galbraith, calls "post office socialism." He insists on decontrol of prices and competition, reform of the tax base, simplification of administration, and the replacement of seniority-bound generalist bureaucrats by technicians promoted on merit.… ### Body # STRONG MEDICINE FOR INDIA *By By LELAND HAZARD* ## Summary Leland Hazard's pamphlet, first published in the December 1965 Atlantic Monthly and reissued by the Forum of Free Enterprise in July 1966, is a Cold-War-era polemic that prescribes "strong medicine" for a country he depicts as militarily lifted by the Pakistan crisis but still hobbled by chronic economic and administrative diseases. Writing as a frequent visitor to India and a former industrialist-academic, Hazard urges the Western donor world to attach conditions to its aid: India must first put its own house in order before more grants, loans, and technical assistance keep flowing. He frames the failed Five-Year Plans, the swollen Delhi bureaucracy, and the cult of state ownership as obstacles that decades of well-meaning but unconditional foreign aid have allowed to harden. The core argument is a critique of Nehruvian planning and what Hazard, citing John Kenneth Galbraith, calls "post office socialism." He insists on decontrol of prices and competition, reform of the tax base, simplification of administration, and the replacement of seniority-bound generalist bureaucrats by technicians promoted on merit. He argues that the Ford and Rockefeller Foundations' agricultural Package Programmes show what scientific, results-driven aid can do, but that they reach only a small fraction of India's farmers; food, fertilizers, family planning, and basic industry must be scaled up together, and Western donors should stop being "abashed, as if they were the Greeks bearing gifts" about insisting on administrative reform as the price of continued help. Hazard closes with two unconventional "nominations" for India's national morale: a nationwide commercial and educational television system that could leapfrog illiteracy and the country's fourteen-language divisions, and an indigenous nuclear-weapons programme, which he argues the West has no right to forbid and which would restore Indian self-respect after the deaths of Gandhi and Nehru. The booklet ends on an explicitly anti-Communist, pro-Western framing: India is anti-Communist and anti-Chinese, the freedom it cherishes lies in the West, and the affluent world cannot, in its own interest, look away from Indian misery. ## Key points - Hazard argues that Western aid should be conditional on India first reforming her economic controls, tax base, and civil-service practices, rather than being delivered unconditionally as it has been for over a decade. - He attacks Nehru's "socialistic pattern" and state-owned enterprises run without a profit motive, quoting John Kenneth Galbraith's label "post office socialism" for the resulting non-profit delusion. - He treats the Five-Year Plans as visible failures — two already missed by large margins, the third "in process of failing" — and rejects the consensus that everything must move in "equally delicate balance." - Agricultural transformation is presented as India's unfinished revolution: fertilizers, hybrid seeds, irrigation, credit, and Ford Foundation Package Programmes are praised but cover only 2% of farmers, and population growth and birth control are framed as crucial constraints. - Hazard celebrates the machine-tool industry and the privately managed Air India as islands of "modern excellence" that disprove any cultural argument against Indian managerial competence. - His two morale-building "nominations" are a national private-plus-governmental television system (which he claims could skip the word and bridge fourteen major languages) and an indigenous Indian nuclear weapon, which he says the nuclear powers have no moral right to forbid. - He places India explicitly in the Western camp — anti-Communist, anti-Chinese, dependent on America for military protection since the 1962 Chinese strike — and treats Cold War alignment as the precondition for further aid. - The pamphlet's polemical frame is medical: India is the patient, her old elite of "bespectacled intellectuals" is the failed treatment, and the West, paying the medical bills, has both the right and the duty to prescribe the cure. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] Success in Agriculture Through Free Enterprise URL: https://indianliberals.in/primary-works/success-in-agriculture-through-free-enterprise-by-jr-henshaw-december-10-1964/ ### Summary In this Forum of Free Enterprise pamphlet — drawn from his presidential address to the 71st United Planters' Association of Southern India (UPASI) annual conference on September 1, 1964 — J. R. Henshaw argues that the conspicuous productivity gains made by South Indian plantation industries since 1947 (tea, coffee and rubber output all sharply up despite pests, disease and rising costs) prove the case for treating agriculture as a business rather than a sentimental way of life. The 'most important element' in farm progress, he insists, is first-class scientific management; ceilings on personal holdings and other land-reform measures aimed only at redistribution add little to the national economic dividend. The second half of the pamphlet is a sustained critique of India's fiscal treatment of plantations. Henshaw argues that the cumulative weight of competing Central and State income taxes on agricultural income — uniquely Indian, in his telling — is starving the industry of the reserves it needs to expand.… ### Body # Success in Agriculture Through Free Enterprise *By J. R. Henshaw* ## Summary In this Forum of Free Enterprise pamphlet — drawn from his presidential address to the 71st United Planters' Association of Southern India (UPASI) annual conference on September 1, 1964 — J. R. Henshaw argues that the conspicuous productivity gains made by South Indian plantation industries since 1947 (tea, coffee and rubber output all sharply up despite pests, disease and rising costs) prove the case for treating agriculture as a business rather than a sentimental way of life. The 'most important element' in farm progress, he insists, is first-class scientific management; ceilings on personal holdings and other land-reform measures aimed only at redistribution add little to the national economic dividend. The second half of the pamphlet is a sustained critique of India's fiscal treatment of plantations. Henshaw argues that the cumulative weight of competing Central and State income taxes on agricultural income — uniquely Indian, in his telling — is starving the industry of the reserves it needs to expand. He calls for a uniform, capped agricultural income-tax rate (not exceeding 40 paise in the rupee), full depreciation on planted assets, restoration of the 50% development rebate on new plantings and replacements, and reversal of the 1963 Finance Act's abolition of the direct export duty rebate on tea, which he says has made Indian tea worse off after export than before. Throughout, he frames the choice as one between a 'self-defeating' policy that discourages expansion, labour and land use while squeezing revenue from a stagnating industry, and an alternative in which the Government matches its desire for higher production and exports with a corresponding willingness to modify fiscal, land, labour and administrative policy. The closing tax-coordination argument — that any concession given will 'automatically be made good in terms of revenue' because state revenues will expand with the industry — is offered as the supply-side payoff of free-enterprise agriculture. ## Key points - South Indian planters have lifted production sharply since 1947 — tea from 98m to 195m lbs, coffee from 14,900 to over 67,000 metric tonnes (1963-64 crop), and rubber from 16,713 to 37,200 tonnes — despite pests, disease and rising costs. - Henshaw rejects sentimental, 'old-world-way-of-life' agriculture and argues that scientific, business-style management is the decisive variable in farm progress, more important even than the land itself. - Land-reform measures fixated on rigid ceilings for personal holding contribute little to economic progress; what matters is who can manage the land productively. - India is, in his account, the only country with a separate tax on agricultural income; the cumulative load of competing Central and State income taxes is starving plantations of resources to reinvest. - He calls for Central-State coordination on agricultural income tax, a uniform rate capped at 40 paise in the rupee, full recognition of depreciation on planted/soils assets, and restoration of the 50% development rebate withdrawn for new plantings, replacements and extensions. - He attacks the abolition of the direct export duty rebate on tea by the 1963 Finance Act, arguing that the enhanced non-refundable excise duty makes exporters worse off than producers selling at home. - The Mysore Government's increases under the Mysore Land Revenue Act 1964 — in some cases a 34-fold rise from Rs. 2 to Rs. 76 per acre — are flagged as 'an intolerable exaction' that the industry cannot bear on top of existing burdens. - Overall thesis: government desire for higher production and exports must be matched by a willingness to modify fiscal, land, labour and administrative policy; concessions to a growing industry pay for themselves in expanded revenue. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] Tandon Committee Report & Finance for Industry URL: https://indianliberals.in/primary-works/tandon-committee-report-and-finance-for-industry-j-h-doshi-18-january-1976/ ### Summary This Forum of Free Enterprise booklet reproduces a lecture delivered by industrialist J. H. Doshi in Bombay on 19th December 1975, scrutinising the Tandon Study Group report on bank-credit norms for industry. Doshi traces the report's origin to the Reserve Bank of India's anxiety in 1973–early-1974, when oil-shock inflation prompted a sudden ad hoc freeze on cash credit; the Tandon Group (chaired by Prakash Tandon of Punjab National Bank) was constituted to evolve principled norms for inventory holding, working-capital assessment, the debt-equity ratio, and supervision of credit. His central charge is that by the time the final report appeared in August 1975 the cycle had reversed — the economy had slid into recession — yet the recommendations were drafted as if inflationary conditions persisted, and the Committee took no notice of the change. Doshi works through the report's two main limbs.… ### Body # Tandon Committee Report & Finance for Industry *By J. H. Doshi* ## Summary This Forum of Free Enterprise booklet reproduces a lecture delivered by industrialist J. H. Doshi in Bombay on 19th December 1975, scrutinising the Tandon Study Group report on bank-credit norms for industry. Doshi traces the report's origin to the Reserve Bank of India's anxiety in 1973–early-1974, when oil-shock inflation prompted a sudden ad hoc freeze on cash credit; the Tandon Group (chaired by Prakash Tandon of Punjab National Bank) was constituted to evolve principled norms for inventory holding, working-capital assessment, the debt-equity ratio, and supervision of credit. His central charge is that by the time the final report appeared in August 1975 the cycle had reversed — the economy had slid into recession — yet the recommendations were drafted as if inflationary conditions persisted, and the Committee took no notice of the change. Doshi works through the report's two main limbs. On inventory norms he argues that prescribing rigid stock-holding ceilings for 15 industries ignores the disrupted flow of goods in India (transport bottlenecks, import licences, power cuts, strikes) and that comparisons with Japanese or American just-in-time levels are misleading; banks have already begun treating the guidelines as final and the request-for-deviation route is too slow to be useful. On capital structure he warns that Methods One and Two — capping bank finance at 75% and then 75% of total current assets respectively — will force diversion of retained earnings and long-term funds into working capital, starving capital formation precisely when the Planning Commission's growth targets demand the opposite. He estimates the squeeze would release Rs 600 crores (Method One) or Rs 1,260 crores (Method Two) of credit from medium and large industry, but doubts the released funds will reach productive uses. Framing the dispute as one of economic philosophy rather than accounting, Doshi accepts the principle of financial discipline but rejects the methods of enforcement, insisting that bank credit is a loan at 16–17 per cent — not a grant — so industry has its own commercial incentive to economise on inventory. He criticises the absence of any Planning Commission member from the Study Group, regrets the bifurcation of the cash-credit limit into a loan and cash-credit component without sufficient flexibility, and welcomes the Reserve Bank's October press note conceding that flexibility will be needed. The piece closes with two appendices: a sectoral table of gross bank credit deployment as of April 1974 and April 1975, and a worked example illustrating the arithmetic of Methods One, Two and Three on a hypothetical balance sheet. ## Key points - The Tandon Study Group was conceived under inflationary conditions in 1973–74 but reported in August 1975 when the economy had entered recession, and Doshi argues the Committee never adjusted for the changed cycle. - Doshi accepts the broad idea of financial discipline but rejects the methods chosen — fixed inventory norms for 15 industries plus separate caps on bank finance in working capital — as two redundant controls that will choke industrial flexibility. - He treats bank credit as a costly loan at 16–17 per cent interest, not a grant, arguing that industry has every reason to economise on inventory without administrative ceilings. - Methods One and Two would, on his estimate, release Rs 600 crores and Rs 1,260 crores respectively from credit extended to medium and large industry, but he doubts those funds will reach more productive uses. - He warns that forcing industries to substitute retained earnings or long-term funds for working capital will divert resources away from capital formation and slow industrial growth. - Doshi notes the capital market's poor state — paid-up capital raised by non-banking, non-financial private companies rose only about 2 per cent per year in recent years and reached only Rs 99 crores in 1973 against gross investment of Rs 900 crores. - He criticises the absence of any Planning Commission member from the Study Group and the failure to test the recommendations against Plan growth targets. - The lecture closes by welcoming the Reserve Bank's October press note on flexibility, treating the bank–client relationship as more than a set of rules, and reproducing appendices on sectoral credit deployment and the Three-Method arithmetic. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] Taxation Trends and its impact on Indian Multinational Companies URL: https://indianliberals.in/primary-works/taxation-trends-and-its-impact-on-indian-mncs-smahalingam-september-4-2011/ ### Summary This Forum of Free Enterprise booklet reproduces an inaugural address delivered by S. Mahalingam — Chief Financial Officer and Executive Director of Tata Consultancy Services — at the Forum's August 2011 three-day residential programme on Current Issues in Direct and Indirect Taxation. Mahalingam opens with an extended personal tribute to the late Nani Palkhivala, recalling his work with him at TCS from 1968 onwards, Palkhivala's interventions on tax matters during his ambassadorial years in the United States, and his charitable, civic and cultural philanthropy in Madras. He frames Palkhivala both as the architect of the Indian IT industry's legal foundation and as a model jurist whose advocacy made a free India economically possible. The central body of the speech surveys how India's tax architecture is reshaping the operations of Indian multinationals, with TCS used as the running case study.… ### Body # Taxation Trends and its impact on Indian Multinational Companies *By S. Mahalingam* ## Summary This Forum of Free Enterprise booklet reproduces an inaugural address delivered by S. Mahalingam — Chief Financial Officer and Executive Director of Tata Consultancy Services — at the Forum's August 2011 three-day residential programme on Current Issues in Direct and Indirect Taxation. Mahalingam opens with an extended personal tribute to the late Nani Palkhivala, recalling his work with him at TCS from 1968 onwards, Palkhivala's interventions on tax matters during his ambassadorial years in the United States, and his charitable, civic and cultural philanthropy in Madras. He frames Palkhivala both as the architect of the Indian IT industry's legal foundation and as a model jurist whose advocacy made a free India economically possible. The central body of the speech surveys how India's tax architecture is reshaping the operations of Indian multinationals, with TCS used as the running case study. Mahalingam describes how the IT industry effectively created the first generation of Indian multinationals — TCS now operates in forty-two countries, employs 200,000 people, and earns 55 per cent of its costs overseas — and walks the audience through the operational frictions this creates: transfer pricing audits across dozens of jurisdictions, the limited usefulness of the Dispute Resolution Panel, the appeal of bilateral Advance Pricing Agreements, and the role of Mutual Agreement Procedures. He warns that several provisions of the proposed Direct Taxes Code — the Controlled Foreign Corporation rules, the "Place of Effective Management" residency test, the withholding-tax provisions, and the silence on carry-forward of MAT credit — could inflict unintended hardship on Indian MNCs and require correction before enactment. Mahalingam then turns to indirect tax reform and to the regulatory environment more broadly. He calls the Goods and Services Tax the most important indirect tax reform since Independence and reports on the state of the GST Bill before the Yashwant Sinha–led Standing Committee on Finance. On Special Economic Zones he criticises the retrospective extension of the Minimum Alternate Tax to SEZ profits and the shrinking of the Section 10A/10AA window, echoing Palkhivala's complaint that "tinkering with a declared approach is wrong" because it destroys the basis on which long-horizon investment decisions are made. He closes with a programmatic claim that the IT revolution — requiring only the capacity to think clearly — is India's best chance to lead a global transformation, and that the enabling environment for that revolution depends on a synchronised, internationally credible tax and accounting regime (including the migration from Indian GAAP to IFRS/Ind AS). The booklet ends with a memorial note on Shailesh Kapadia, in whose name the publication is sponsored. ## Key points - Booklet reproduces S. Mahalingam's August 2011 inaugural address at the Forum of Free Enterprise's annual residential programme on direct and indirect taxation; Mahalingam was then CFO and Executive Director of Tata Consultancy Services. - Opens with an extended personal tribute to Nani Palkhivala — covering his service at TCS from 1968, his interventions on Indian tax issues while serving as Ambassador to the US, and his philanthropic and cultural work in Madras. - Argues that the IT industry created India's first true multinationals; TCS is offered as the running case — 42 countries of operation, ~200,000 employees, 14,000 expatriates, 55 per cent of costs incurred overseas, 24-country branch network and 54 subsidiaries. - Catalogues the international tax frictions facing Indian MNCs: transfer pricing audits in 80 jurisdictions, weakness of the Dispute Resolution Panel (DRP), and the case for bilateral Advance Pricing Agreements (APAs) and Mutual Agreement Procedure (MAP) resolution. - Critiques specific provisions of the proposed Direct Taxes Code — Controlled Foreign Corporation rules, the 'Place of Effective Management' residency test, withholding-tax mechanics, and silence on carry-forward of MAT credit — as creating unintended hardship for Indian multinationals. - Treats the retrospective application of Minimum Alternate Tax to SEZ profits and the curtailment of the Section 10A/10AA holiday as a breach of policy stability that 'negates the basis on which we have made these huge investment decisions'. - Endorses GST as the most important indirect-tax reform since Independence and reports on the Constitution (115th Amendment) Bill before Yashwant Sinha's Standing Committee on Finance, while flagging the unresolved Centre–State consensus. - Calls for migration from Indian GAAP to IFRS / Ind AS so that 'all arms of the government' speak the same accounting language to international investors, framing fiscal credibility as a prerequisite for leadership in the IT-led global revolution. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] Telephone Communication and Urban Development In India URL: https://indianliberals.in/primary-works/telephone-communication-and-urban-development-in-india-rashmi-mayur-feburary-14-1977/ ### Summary Dr. Rashmi Mayur, a futurologist and Director of the Urban Systems Centre at NITIE Powai, examines the failing state of telephone services in Bombay and argues that adequate telecommunications infrastructure is a precondition for India's economic development. Opening with a Parisian visitor's coinage of the word 'telefrustration' after two days of failed attempts to call Colaba from Malad, Mayur sets a paradox: in an age when humans can speak to one another across 238,000 miles to the moon, it remains agonising to place a 25-mile call within a single city. He frames the telephone as 'a vital force for modernization and development', noting that more than fifty per cent of Indian telephones sit in major urban centres even though only twenty per cent of the population lives there, and that urban life — business, government, medical emergency, fire, police — has become inconceivable without it. The booklet builds its case from a sample survey of 3,000 Bombay subscribers and operational data from the Bombay Telephone Company.… ### Body # Telephone Communication and Urban Development In India *By Dr. Rashmi Mayur* ## Summary Dr. Rashmi Mayur, a futurologist and Director of the Urban Systems Centre at NITIE Powai, examines the failing state of telephone services in Bombay and argues that adequate telecommunications infrastructure is a precondition for India's economic development. Opening with a Parisian visitor's coinage of the word 'telefrustration' after two days of failed attempts to call Colaba from Malad, Mayur sets a paradox: in an age when humans can speak to one another across 238,000 miles to the moon, it remains agonising to place a 25-mile call within a single city. He frames the telephone as 'a vital force for modernization and development', noting that more than fifty per cent of Indian telephones sit in major urban centres even though only twenty per cent of the population lives there, and that urban life — business, government, medical emergency, fire, police — has become inconceivable without it. The booklet builds its case from a sample survey of 3,000 Bombay subscribers and operational data from the Bombay Telephone Company. India has 1.8 million telephones for a population of 605 million (one for every 333 persons); Bombay alone has 179,000 direct exchange lines, a waiting list of 67,324 as of October 1976, an annual complaint volume of about 75,000, and roughly 14 per cent of telephones out of order on a normal day (rising to 25 per cent during the monsoon). The survey records the litany of defects — difficulty reaching operator services (61%), defective hearing (58%), cross-connections (54%), rude operators (51%), wrong numbers (43%) — and Mayur estimates that 42 person-days a day are wasted in the city merely dialling numbers. Seventy per cent of public telephones are out of order on any given day, and management problems include low productivity in the repair department, poor co-ordination among linesmen and mechanics, and the technologically overloaded Cross-bar exchange system adopted in 1967. The second half lays out recommendations across three tracks. For the Bombay Telephone Company: dedicated complaint numbers for each exchange, underground cabling, adequate spare parts, working air-conditioning in exchanges (the Powai exchange has had none for six months), an end to the multiple-telephone-to-one-subscriber scheme that allows some homes to hoard half-a-dozen lines, an expert public grievances committee, time-bound repair commitments, and dropping the wasteful 'Namaskar' operator greeting in favour of efficient courtesy. For the public: brief and precise calls, hanging up on cross-connections rather than abusing the other party, and a strong stricture against subscribers who profit by charging neighbours a rupee a call. For public telephones — Mayur's structural answer to chronic shortage — he proposes a city-wide network of self-contained, attended booths of three sizes (Type I two phones, Type II four phones, Type III six phones, costing Rs. 7,557 to Rs. 15,770), beginning with 1,500 booths in critical areas which he estimates would alleviate 70 per cent of the city's telephone problems, financed by booth-side advertising and joint ventures between the Bombay Municipal Corporation, the Telephone Company, the State Government and 'enlightened industrialists'. The work closes with the judgement that 'Bombay cannot afford to have the best service or the worst service because both of them would be very expensive. It has to find the best out of the worst' — and that what is true of Bombay is true of the rest of the country. The pamphlet is based on a presentation given at a Bombay Civic Trust meeting on 6 November 1976. ## Key points - Frames the telephone as essential infrastructure for India's economic development: business, government, medicine, fire, and police functions are inconceivable without it. - India has 1.8 million telephones for 605 million people (1 per 333), against the United States' 145 million for a population giving 1 per 1.5 persons; over 50% of Indian telephones sit in major urban centres where only 20% of the population lives. - Bombay-specific data: 179,000 direct lines, 300,000 instruments for 7 million people, 3,000 public telephones, a waiting list of 67,324 as of October 1976, and 75,000 complaints a year. - A 3,000-subscriber survey ranks defects: operator-service difficulty (61%), defective hearing (58%), cross-connections (54%), rude operators (51%); Mayur estimates 42 person-days a day are lost in the city to dialling alone. - Identifies the Cross-bar exchange system (adopted in 1967 in preference to Strowger step-by-step) as overloaded, with poor service following because Cross-bar efficiency is inversely proportional to load. - Recommends rationalising the Bombay Telephone Company: dedicated complaint numbers per exchange, underground cabling, adequate spare parts, working air-conditioning in exchanges, ending the multiple-telephones-per-subscriber abuse, a public grievances committee, time-bound repairs, and dropping the wasteful 'Namaskar' operator greeting. - Proposes a city-wide network of attended public-telephone booths (Type I, II and III, costing Rs. 7,557 to Rs. 15,770), beginning with 1,500 in critical areas — Mayur projects this would alleviate 70% of Bombay's telephone problems and could be financed by booth-side advertising and a Municipal Corporation-Telephone Company-State Government-industrialist joint venture. - Raises but does not resolve the governance question of whether the telephone system should remain a government department or be reconstituted as a public corporation subject to Parliament; flags the need for an independent pricing commission to scrutinise unilateral tariff hikes and for a public remedy against overbilling. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] The Anatomy of Waste and Inefficiency in Engineering Construction URL: https://indianliberals.in/primary-works/the-anatomy-of-waste-and-inefficiency-in-engineering-construction-w-x-mascarenhas-june-9-1970/ ### Summary Drawing on a career as Chief Engineer of an Indian state, W. X. Mascarenhas delivers a procedural and managerial autopsy of waste in Indian engineering construction, focused chiefly on Government and quasi-Government Public Works Departments. The text is the printed version of a public lecture delivered under the auspices of the Forum of Free Enterprise on 20 February 1970, framed at the outset as 'constructive criticism' of general application rather than censure of any particular agency. Mascarenhas enumerates six procedural roots of waste and inefficiency: (1) the crash-programme planning of even large projects, which produces speculative tendering, collusion between planner and contractor and unavoidable cost over-runs; (2) the perpetuation of fifty-year-old Schedules of Rates and specifications that no longer correspond to available materials and craftsmanship, leaving 'a powerful lever in the hands of corrupt or just wooden-headed officials' to harass contractors; (3) the rule of automatic acceptance of the lowest tender, which he proposes replacing with the foreign practice of awarding contracts to the bid closest to the average; (4) the bureaucratic delay of Running Acco… ### Body # The Anatomy of Waste and Inefficiency in Engineering Construction *By W. X. Mascarenhas* ## Summary Drawing on a career as Chief Engineer of an Indian state, W. X. Mascarenhas delivers a procedural and managerial autopsy of waste in Indian engineering construction, focused chiefly on Government and quasi-Government Public Works Departments. The text is the printed version of a public lecture delivered under the auspices of the Forum of Free Enterprise on 20 February 1970, framed at the outset as 'constructive criticism' of general application rather than censure of any particular agency. Mascarenhas enumerates six procedural roots of waste and inefficiency: (1) the crash-programme planning of even large projects, which produces speculative tendering, collusion between planner and contractor and unavoidable cost over-runs; (2) the perpetuation of fifty-year-old Schedules of Rates and specifications that no longer correspond to available materials and craftsmanship, leaving 'a powerful lever in the hands of corrupt or just wooden-headed officials' to harass contractors; (3) the rule of automatic acceptance of the lowest tender, which he proposes replacing with the foreign practice of awarding contracts to the bid closest to the average; (4) the bureaucratic delay of Running Account Bills and Final Bills, sometimes by three or four years, which pushes up contract rates by forcing contractors to borrow at usurious rates; (5) the rigid Earnest Money and Security Deposit regime, which he proposes liberalising through Bank Guarantees and parity with manufacturing for industrial finance; and (6) the one-sided contract in which the Government Owner becomes 'complainant, prosecutor and judge,' for which he urges arbitration by an independent panel under the Indian Arbitration Act. His institutional fix is the creation of a Public Works Commission — recruited from senior engineers of unimpeachable character on attractive ten-year salaries, statutorily barred from post-retirement contractor employment — to absorb the existing Technical Examiner's cell, audit R. A. Bills and the efficacy of planning, and discipline departmental engineers for slip-shod work. He then turns to technical reforms long overdue: ultimate-strength design procedures for RCC (a case-study at the Structural Engineering Research Centre, Roorkee, showed 42% steel savings); light-weight concrete and Siporex (25-30% savings, finally cleared after a four-year delay with the Government of Maharashtra); mechanised quality control of asphaltic road surfaces; pre-cast units for low-cost housing; and a more receptive attitude to indigenous innovations such as the tetrapod sea-wall armour used at Marine Drive in Bombay, collector wells with radial slotted drains, and Prof. Taraporevala's Tarapore Truss adopted by the Baroda Municipal Corporation. Mascarenhas closes by calling for systematic training in construction management and estimates that speedy implementation of his suggestions would yield overall savings of 10-15%. ## Key points - The text is a printed Forum of Free Enterprise booklet of a 20 February 1970 public lecture by W. X. Mascarenhas, a former Chief Engineer of a state, generalising about Public Sector (and mutatis mutandis Private Sector) engineering construction. - Mascarenhas identifies six procedural causes of waste: incomplete planning and crash-programming, obsolete specifications, the lowest-tender rule, delayed payment of Running Account and Final Bills, the rigid Earnest Money/Security Deposit regime, and the one-sided nature of Government contracts. - He flags 'speculative tendering', collusion between planner and contractor on rate-splitting, and the disciplinary cover that 50-year-old Schedules of Rates provide for harassment by minor officials. - He recommends a statutory Public Works Commission of senior engineers — recruited from open market or PWD cadres, debarred from contractor employment for seven years after retirement — to absorb the Technical Examiner's cell and police R. A. Bill payments. - He proposes arbitration under the Indian Arbitration Act by an independent panel of experienced engineers of repute who are not serving officers or contractor employees, rather than by an officer of the same Department. - He urges adoption of ultimate-strength design procedures for RCC (citing a Roorkee Structural Engineering Research Centre case-study showing 42% steel savings), Siporex light-weight concrete (25-30% cost savings), and quality control / mechanisation of asphaltic road surfaces. - He recounts personal experience introducing tetrapod breakwater armouring (Marine Drive, Bombay), collector wells with radial slotted drains, and Prof. Taraporevala's Tarapore Truss as instances of engineering conservatism delaying cheaper, better techniques. - He estimates that speedy implementation of his suggestions would secure overall cost economies of 'nothing less than 10% to 15%' and reduce corruption. --- *Generated by the v1.5 extraction pipeline. Awaiting editorial review.* --- ## [Primary work] The Guardian of Liberty URL: https://indianliberals.in/primary-works/the-guardian-of-liberty-by-nadir-godrej-september-29-2016/ ### Summary Forum of Free Enterprise pamphlet by Nadir Godrej (29 September 2016). Source PDF not yet imported into the content pipeline; this stub MD exists so the thinker page for Nadir Godrej can backlink to his attested authored work. Full title, body summary, themes, and key points are pending a PDF-extraction pass. ### Body ## Source This primary-work entry is a stub created from the authority file's `pdf-filename` attestation: `forum-of-free-enterprise/the-guardian-of-liberty-by-nadir-godrej-september-29-2016.pdf`. The source PDF has not yet been ingested through the bake-off / extraction pipeline. Once imported, the `summary`, `summary_structured`, `physical`, `kind`, `themes`, and `key_points` fields can be populated. Until then, this MD exists only to give Nadir Godrej a corpus backlink for his own authored work. --- ## [Primary work] The Indian Libertarian URL: https://indianliberals.in/primary-works/the-indian-libertaraian-apr1-1957/ ### Summary The Indian Libertarian, Vol. V No. 3 (1 April 1957), is a bi-monthly libertarian journal edited by Miss Kusum Lotwala and published by Libertarian Publishers (Private) Ltd., Bombay. This issue appeared immediately after India's second general elections and takes them as its central occasion: the editorial interrogates whether Congress's renewed mandate will deliver genuine democratic governance or deepen the slide toward a one-party monopoly underwritten by planning bureaucracy and press manipulation. The issue's argumentative center is the incompatibility of India's Second Five Year Plan with the liberal values the journal upholds — the Plan is variously characterised as crypto-communist, fiscally ruinous, and intellectually dishonest. M. A. Venkata Rao contributes the issue's signature polemic, "An Economic Plan or… A Communist Plot?", arguing that the Second Five Year Plan replicates Soviet central planning under democratic cover and that its insistence on State ownership of all new industrial capacity above a threshold amounts to covert nationalisation. M. G. Hallar (writing as M. G. Balier) supplies the parallel fiscal indictment, "Interim Budget / On High Road to Insolvency," contending that the planners systematically underestimate Plan costs, dress deficit financing as developmental investment, and have made foreign borrowing a badge of confidence when it is in fact a symptom of domestic resource exhaustion. The pseudonymous "Vivek" contributes "Five Questions on the Elections," a sardonic catechism that interrogates the polling-day declaration of Bombay as a Union Territory, Nehru's intervention in state campaigns, the Congress-Big Business nexus, and Jayaprakash Narayan's withdrawal from formal politics. "Vigilant" authors "West Pakistan Under the Jack-Boot of Mirza," tracing President Iskander Mirza's dismantling of parliamentary government, capture of the press, and use of the Khan Sahib ministry to suppress the Muslim League. K. D. Valicha is the issue's most prolific contributor: his satirical "Talking Through the Hat" lampoons India's foreign-policy commentariat, while the book-review section carries his full-length "Economies of Liberty" and his short note "Not a Loot Cause" defending market-rent collection as philosophically consistent with libertarian property theory. Surrounding these essays are Salvador de Madariaga's measured critique of the Eisenhower Doctrine for misreading Arab nationalism as communism, a letters section on press and government, domestic and world news digests, and book reviews promoting libertarian titles including the R. L. Foundation's Libertarian Anthology edited by B. S. Sanyal. The issue also advertises the Libertarian Social Institute's certificate course and the R. L. Foundation's Libertarian Quarterly, signalling a wider institutional ecosystem in 1950s Bombay. ### Body ## Summary The Indian Libertarian, Vol. V No. 3 (1 April 1957), is a bi-monthly libertarian journal edited by Miss Kusum Lotwala and published by Libertarian Publishers (Private) Ltd., Bombay. This issue appeared immediately after India's second general elections and takes them as its central occasion: the editorial interrogates whether Congress's renewed mandate will deliver genuine democratic governance or deepen the slide toward a one-party monopoly underwritten by planning bureaucracy and press manipulation. The issue's argumentative center is the incompatibility of India's Second Five Year Plan with the liberal values the journal upholds — the Plan is variously characterised as crypto-communist, fiscally ruinous, and intellectually dishonest. Surrounding that core are articles on West Pakistan's authoritarian deterioration under President Mirza, a sharp critique of the Eisenhower Doctrine by Salvador de Madariaga, a polemic against India's foreign-policy establishment, a letters section on the role of press and government, domestic and world news digests, and book reviews promoting libertarian titles. The issue also advertises the Libertarian Social Institute's certificate course and the R. L. Foundation's Libertarian Quarterly, signalling a wider institutional ecosystem in 1950s Bombay. ## Essays ### Editorial: The Elections and After The unsigned editorial, 'The Elections and After,' reads the Congress party's large-scale victory in the second general elections as a failure to translate popular mandate into democratic accountability. It argues that Congress has lost contact with the population — citing defeats in Maharashtra and Gujarat — and that the party's monopoly on the press and propaganda machine has shielded it from honest reckoning. The editorial warns that unless Congress sheds its monopoly culture and embraces genuine economic freedom, the election result will entrench authoritarian planning rather than liberal democracy. It calls on the party's own 'A' team to recognise that Forum of Free Enterprise voices are not fringe critics but prophets of the fiscal and democratic dangers ahead. - Congress's victory is attributed partly to control of press and propaganda, not genuine popular approval of its economic programme. - Electoral defeats in Maharashtra and Gujarat are cited as evidence of lost contact with voters. - The editorial distinguishes between Congress's organizational machinery and the actual will of the electorate. - A call is issued for Congress to abandon its 'monopoly capitalism' mindset and open the economy to free enterprise. - The piece warns that without reform, democratic institutions will be hollowed out by one-party dominance. ### Interim Budget / On High Road to Insolvency *By M. G. Balier* M. G. Balier's 'Interim Budget / On High Road to Insolvency' is a fiscal critique of the government's Second Five Year Plan budget. Balier argues that India's planners have systematically underestimated the true cost of the Plan, that deficit financing is being dressed up as developmental investment, and that the country is on a trajectory toward insolvency. He contends that the budget's apparent optimism conceals a structural gap between projected revenues and committed expenditures, and that the political will to contain spending is absent because plan-targets have become ends in themselves irrespective of fiscal sustainability. The piece warns that foreign borrowing, presented as a badge of international confidence, is in fact a symptom of domestic resource exhaustion. - The Second Plan's budget involves deficit financing that the author characterises as fiscally dangerous. - An overall deficit of Rs. 218 crore is cited as evidence that the government is spending beyond its means. - The article contends that planners are indifferent to fiscal discipline because plan-fulfilment is treated as an ideological imperative. - Reliance on foreign loans is presented as a sign of resource failure rather than international trust. - The author argues that no effective political opposition to the fiscal trajectory exists inside or outside Congress. ### An Economic Plan or... A Communist Plot? *By MA Venkata Rao* M. A. Venkata Rao's 'An Economic Plan or… A Communist Plot?' is a polemical critique of India's Second Five Year Plan, arguing that the plan's intellectual and structural features are indistinguishable from Soviet-style central planning and amount to a covert implementation of communist economic doctrine. Venkata Rao contends that the Plan's architects — whom he treats as fellow-travellers of Soviet ideology — have used the planning apparatus to begin the nationalisation of the commanding heights of the economy under the guise of development. He attacks the 'indifference to criticism' displayed by planners, catalogues the rising monopoly of public sector enterprise, and calls for mobilising private capital and individual initiative instead. The article is one of the journal's signature pieces, framing the liberty-vs.-planning debate as a question of civilisational choice rather than mere economic technocracy. - The Second Five Year Plan is characterised as replicating Soviet economic organisation under the cover of democratic planning rhetoric. - The article singles out the Plan's insistence on State ownership of all new industrial capacity above a threshold as the decisive communist-pattern element. - Venkata Rao accuses planners of deliberate 'indifference to criticism' and of suppressing alternative economic analysis. - He argues that monopoly tendencies built into the Plan will eventually destroy the private sector and the press. - The piece calls on citizens and intellectuals to resist the Plan's logic before the institutional damage becomes irreversible. ### Five Questions on the Elections *By Vivek* 'Five Questions on the Elections' by the pseudonymous 'Vivek' poses five rhetorical questions to assess what the 1957 election result actually means. The questions probe: whether polling-day declaration of Bombay as a Union Territory is democratic; whether Prime Minister Nehru's intervention in state elections is appropriate; whether Krishnamurti's alleged electoral connections are credible; whether Jayaprakash Narayan's acknowledged political stature is being wasted outside formal politics; and whether Congress-industry ('Congress and Big Business') alignment explains the party's performance. The piece is sardonic throughout, questioning whether Congress voters endorsed the Plan's direction or merely voted out of inertia and organisational loyalty. It raises concerns about elections being manipulated by state machinery and suggests that a more honest verdict would have been adverse to Congress. - The declaration of Bombay as a Union Territory on polling day is treated as politically manipulative. - Nehru's active campaigning in state elections is questioned as an inappropriate use of Prime Ministerial authority. - The Congress-industry nexus is interrogated — the article asks whether large business funding of Congress explains party performance. - Jayaprakash Narayan's political talent is cited as a wasted resource outside the formal party system. - The overall thrust is that the election result reflects organisational machinery rather than genuine popular endorsement of the Second Plan. ### West Pakistan Under the Jack-Boot of Mirza *By Vigilant* 'West Pakistan Under the Jack-Boot of Mirza' by the pseudonymous 'Vigilant' analyses the consolidation of authoritarian rule in West Pakistan under President Iskander Mirza. The article argues that Mirza has systematically dismantled parliamentary governance, silenced the press, and used the Khan Sahib ministry as a political vehicle to suppress the Muslim League and other opposition parties. 'Vigilant' traces the communal and political roots of anti-India sentiment being cultivated by the Mirza regime and argues that Pakistan's government has essentially become a family enterprise managed through official patronage. The piece warns Indian readers that Pakistani arms raids and the alleged 'Soviet Fiction' — Moscow's claim of attempted Soviet kidnapping — are instruments of political distraction. The article closes with a brief item on Pakistani armed forces' activities near Tripura. - President Iskander Mirza is depicted as having converted West Pakistan's government into a one-man authoritarian regime. - The article documents the dismantling of the Muslim League and other opposition parties through executive and administrative coercion. - Anti-India propaganda is characterised as a domestic political tool used to distract from governance failure. - The Khan Sahib ministry is described as Mirza's vehicle for consolidating personal and family power. - A brief 'Soviet Fiction' sidebar addresses Moscow's reported claim of a Soviet kidnapping attempt, treating it as propaganda. ### The Eisenhower Doctrine *By Salvador de Madariaga* Salvador de Madariaga's 'The Eisenhower Doctrine' is a measured but critical analysis of the United States' Middle East policy as articulated in the Eisenhower Doctrine of early 1957. Madariaga argues that the Doctrine, while understandable as a response to Soviet expansionism, suffers from a fundamental misreading of the political energies at work in the Arab world: it treats communism as the primary threat when the deeper force is Arab nationalism and anti-colonialism. He contends that the Budapest-Warsaw axis is strategically more important to the Soviets than the Middle East, and that American military commitments to Middle Eastern states will be counterproductive since those states are already caught between East and West and will not be grateful recipients of American patronage. Madariaga warns that offering arms and money as instruments of policy in the region legitimises the very pattern of great-power interference that produces instability. - The Eisenhower Doctrine is critiqued for misidentifying communism as the primary threat in the Middle East when Arab nationalism is the deeper force. - Madariaga argues that the Budapest-Warsaw axis matters more to Soviet strategy than the Middle East, making the Doctrine's framing strategically mis-calibrated. - American offers of military assistance are seen as counterproductive because Middle Eastern leaders will instrumentalise rather than honour them. - The article warns that great-power military presence in the region undermines rather than stabilises it. - Madariaga calls for a policy framework that respects Arab self-determination rather than embedding new dependencies. ### Talking Through the Hat *By K. D. Valicha* 'Talking Through the Hat' by K. D. Valicha is a satirical essay on the type of ill-informed Indian pundit who holds confident opinions on every global and domestic issue while lacking the knowledge or intellectual rigour to sustain them. Valicha directs particular fire at what he sees as India's self-congratulatory foreign-policy commentariat — commentators who imagine India's non-alignment represents deep wisdom when it is in fact a form of political vanity that allows the country to lecture others while contributing nothing. The piece also mocks pro-communist Indian opinion-formers who dismiss US institutions while ignoring Soviet repression, and praises American practical-mindedness and democratic federalism. The essay closes with a defence of press freedom and a swipe at those who regard state control of opinion as compatible with liberal values. - The article lampoons the Indian intellectual who speaks with authority on foreign affairs without genuine knowledge. - Non-alignment is satirised as political vanity rather than principled wisdom. - Pro-Soviet Indian opinion is criticised for selective indignation — condemning the US while ignoring Soviet atrocities. - American democratic institutions and federalism are defended against Indian intellectual condescension. - Press freedom is affirmed as a precondition for sound public opinion. ### Libertarian Calling (letters section) The 'Libertarian Calling' letters section carries correspondence from several readers responding to previous issues. Topics include: the role of a Congress member of Parliament; how to select good Congress leaders; press manipulation and propaganda; the functions of the A.I.C.C.; what makes for the most pathetic public figure (with a reader naming Nehru); and who has been the finest Prime Minister. There are also short excerpts from 'The Mind Of The Nation,' a digest of press opinion, covering Congress's handling of the Marathwada agitation, freedom of the press, and Congress's attitude to its critics. - Readers debate how to reform Congress leadership selection from within. - Multiple correspondents address the state of press freedom and government propaganda. - One reader nominates Nehru as 'the most pathetic public figure.' - The section includes a digest feature ('The Mind Of The Nation') drawing on Times of India editorials. - Press freedom and the Congress publicity machinery are recurring concerns across the letters. ### Indian News Parade 'Indian News Parade' is an unsigned digest of domestic news items. Items covered include: the controversy over India's publicity services; Congress and freedom of the press, drawing on a Times of India editorial that criticises Congress's attempt to suppress adverse election reporting; a call to Congress leadership to treat external criticism as legitimate; and an excerpt from a Chinaman publication on Congress and 'socialists' using elections to outbid each other with promises. The section presents these items as evidence of a systemic problem in Indian democratic culture: the governing party treats the press as an instrument of party communication rather than as an independent fourth estate. - A Times of India editorial is cited as evidence that even mainstream press organs recognise Congress's hostility to free reporting. - The news digest documents specific instances of Congress attempts to manage election coverage. - The section frames press freedom as inseparable from democratic health. - Foreign press commentary on India's 'socialist' bidding war in elections is included for comparative perspective. ### World News The 'World News' section is an unsigned digest of international events across two pages. Items covered include: Soviet policy toward satellite states in the wake of the Hungarian uprising; the Rapacki proposal for a nuclear-free zone in Central Europe; US State Department admissions about Waremburg; the British cut in military spending; Pakistani armed raid reports near Tripura; Pakistan's claims about British troops on the Naga border; food crisis reporting from DACCA on Pakistan's attitude toward Maulana Bhashani; alarming Soviet propaganda projections; and the Naga question in the context of India's food crisis. The section also includes brief items on 'Extreme Suppression in Pakistan' and on Indian and Pakistani border incidents. The digest frames these events through a consistently anti-Soviet, pro-Western-liberal lens. - Soviet conduct in Eastern Europe following Hungary is framed as evidence of the impossibility of peaceful co-existence. - Pakistan's internal repression and border provocations are covered in parallel with West Pakistan articles elsewhere in the issue. - The Naga border question is flagged as an unresolved internal security issue with international dimensions. - US foreign policy is treated with measured sympathy but also critically examined for inconsistencies. - Soviet propaganda output is characterised as a systematic effort to destabilise non-aligned and Western-aligned states. ### Book Reviews The 'Book Reviews' section covers three publications. First, a notice welcoming The Indian Libertarian to Madras through a new stockist, Libertarian Book Shop, Sandhurst Road, Bombay. Second, a review of 'LIBERTARIAN ANTHOLOGY: A Selection of Essays and Explorations,' published by the R. L. Foundation and edited by B. S. Sanyal. The reviewer (unnamed) notes that the anthology contains essays on the purpose of the journal, the libertarian perspective by M. V. Balakrishna Rao, a piece on monopolies drawing on Benjamin Tucker, a piece on justice and freedom by K. D. Valicha, and a rationalist thought survey. Third, a review of 'ECONOMIES OF LIBERTY' by K. D. Valicha — described as a sustained argument that the collective welfare state must give way to individual liberty and market economics, critically engaging Robertson's analysis and drawing on classical liberal philosophy. The section also contains an advertisement for 'CHARWAK: An Ancient Rationalist' and notes the availability of 'Some Must Have A Population Problem' and 'Large-scale and Small Industries to Coexist.' A separate short item labelled 'NOT A LOOT CAUSE' appears at page 19, attributed to K. D. Valicha, defending the proposition that the collection of market rents does not constitute exploitation and that the libertarian position on property is not a defence of looting the poor. - The Libertarian Anthology Vol. I (R. L. Foundation) is presented as a foundational document of the Bombay libertarian circle. - Benjamin Tucker is invoked in the anthology's treatment of monopoly — a classical anarcho-individualist touchstone being cited approvingly in an Indian liberal context. - K. D. Valicha's 'Economies of Liberty' frames individual liberty and free markets as the only sustainable basis for collective welfare. - The book review section doubles as a publication network advertisement, reinforcing the institutional ecosystem around the journal. - The 'Not a Loot Cause' note defends market-rent collection as philosophically consistent with libertarian property theory. --- ## [Primary work] The Indian Libertarian URL: https://indianliberals.in/primary-works/the-indian-libertarian-apr1-1958/ ### Summary The Indian Libertarian, Vol. VI No. 2 (April 1, 1958) is a sixteen-article fortnightly journal published from Bombay under editor Miss Kusum Lotwala. Its masthead motto — 'We Stand for Free Economy and Libertarian Democracy' — encapsulates the editorial line sustained across every piece in the rendered pages: a sustained libertarian-classical-liberal critique of Nehru's economic and foreign policies, the Congress Party's internal culture, and the creeping socialism of Indian statecraft in the late 1950s. The journal incorporates the earlier 'Free Economic Review' and also campaigns editorially for English as India's official language. The issue opens with a letters column and a two-page editorial attacking the Arab Union, Indian foreign policy toward Pakistan, and the Congress Party's failure to discipline itself. MA Venkata Rao's lead economic essay 'Mixed Economy — A Broken Reed' attacks the mixed-economy doctrine as intellectually bankrupt and dubs the Life Insurance Corporation nationalisation 'legalised robbery'. J. K. Dhairyawan's 'Nehru — A Bundle of Frayed Nerves' offers a psychological-political portrait of Nehru, citing the Prime Minister's own Ahmednagar Fort prison diary on his dictatorial temper. 'Vigilant' writes 'Noon Wants India to Commit Political Harikari', documenting Pakistan's tripled defence budget and Prime Minister Feroz Khan Noon's threats. 'Vivek' attacks 'Nehru's Illusions' on Soviet satellites, Sino-Indian friendship, and Planning Commission economics. Kishore Valicha's 'And the Ostrich with Its Head in the Sand' challenges Indian advocates of Pakistan-friendship with evidence of Pakistani rearmament and SEATO/CENTO alignment. 'Jay Kay's 'Holding the Mirror to the Congress Face' catalogues Congress scandals including a forgery investigation, the Vijaya Lakshmi Pandit shielding case, and a Bombay election murder. Lighter features round out the rendered chunk. 'VERUS' contributes the illustrated 'True Tales — Helen Keller' strip on Keller's education and the Braille system. 'Toddy-Tapper's satirical column 'Over A Glass of Nira' lampoons the Gandhi cap as a hollow political costume and skewers Vijaya Lakshmi Pandit's diplomatic immunity. 'Scio' contributes the 'Did You Know…' historical-anecdote miscellany on page 12. Pages 19–20 reprint or adapt foreign material arguing that India's record of police oppression disqualifies it from socialism, and (drawing on Fred C. Clark and Richard Stanton Rimanoczy) that Soviet Russia under Khrushchev is not genuinely communist but a new class tyranny. Pages 21–28 (entries 14–16: 'Suggested Programme For A New Party', 'On the News Front', and 'Book Reviews') were not rendered in this chunk. ### Body ## Summary The Indian Libertarian, Vol. VI No. 2 (April 1, 1958) is a sixteen-article fortnightly journal published from Bombay under editor Miss Kusum Lotwala. Its masthead motto — 'We Stand for Free Economy and Libertarian Democracy' — encapsulates the editorial line sustained across every piece in the rendered pages: a sustained libertarian-classical-liberal critique of Nehru's economic and foreign policies, the Congress Party's internal culture, and the creeping socialism of Indian statecraft in the late 1950s. The journal incorporates the earlier 'Free Economic Review' and also campaigns editorially for English as India's official language. The issue opens with a letters column and a two-page editorial attacking the Arab Union, Indian foreign policy toward Pakistan, and the Congress Party's failure to discipline itself. Subsequent articles by named and pseudonymous contributors dissect the 'mixed economy' doctrine as intellectually bankrupt, portray Nehru as psychologically unstable and politically erratic, expose Pakistan's arms-spending and anti-India stance as reason to abandon sentimental friendship, and challenge the ostrich-like quality of pro-Pakistan sentiment in Indian political circles. Lighter features include a health column on vitamins, a satirical 'True Tales' strip on Helen Keller (by VERUS), a Toddy-Tapper column lampooning the Gandhi cap as political symbol, and a Danish welfare-state cautionary tale. Pages 19–20 reprint or adapt foreign material arguing that police oppression disqualifies India from socialism, and that Soviet Russia is not genuinely communist. Pages 21–28 (entries 14–16: 'Suggested Programme For A New Party', 'On the News Front', and 'Book Reviews') were not rendered in this chunk. ## Essays ### Letters to the Editor A brief letters column occupying page 2. The visible letter is signed by F. Tandon and concerns the conduct of India's official representatives abroad — criticising Mr. Nehru for failing to control diplomatic representatives and for making contradictory public statements. Tandon invokes the 'Picture of U.P. in Figures' statistical series and criticises the Forum of Free Enterprise's annual data on production. - Correspondent F. Tandon criticises Indian diplomatic representatives' conduct abroad. - Letter invokes 'Picture of U.P. in Figures' production data to make an economic argument. - The letter signals reader engagement with statistical evidence as a tool of liberal critique. ### EDITORIAL The editorial ranges across three foreign-policy episodes: the Arab Union (United Arab Republic), the conspiracy in Saudi Arabia, and India's Pakistan policy. On the Arab Union, the editor argues that Col. Nasser has revealed himself as a dictator rather than a pan-Arab liberator, and that India should stop its romantic support for him. The Saudi section covers an alleged conspiracy against the new Arab Republic. The bulk of the editorial — two columns on pages 3–4 — attacks India's Pakistan policy as dangerously sentimental, noting that Pakistan's defence budget has ballooned and its public rhetoric has become openly hostile. A separate squib condemns the 'Muslim League game' of making communal appeals. The editorial closes with attacks on the proposed Personal Income Tax law as a threat to incentive and a subsidy for administrative corruption. - Nasser is described as a dictator exploiting pan-Arab sentiment rather than a genuine liberator. - Pakistan's military spending is rising sharply while it voices hostility to India — the editorial argues India must recognise this reality. - India's foreign policy toward Pakistan is characterised as sentimental and naive. - The proposed Personal Income Tax is condemned as discouraging enterprise and rewarding evasion. - A sidebar attacks the Muslim League's communal rhetoric in Indian electoral politics. ### "Mixed" Economy — A Broken Reed *By MA Venkata Rao* M. A. Venkata Rao argues that the 'mixed economy' doctrine is intellectually untenable and practically self-defeating. He contends that the term was invented as a device to sidestep the choice between capitalism and socialism, borrowing the worst features of both. The article criticises the First and Second Five Year Plans for sacrificing private enterprise to state monopoly, mocks the Planning Commission's targets, and singles out the nationalisation of Life Insurance Corporation as an act of 'legalised robbery.' Venkata Rao insists the Constitution's compensation clauses are a facade because Parliament can amend them at will, citing a Supreme Court judgment as evidence. The second page continues the argument against creeping state control of the press and private property. - The 'mixed economy' label is a deliberate evasion: it combines state coercion with private enterprise to the detriment of both. - Nationalisation of the Life Insurance Corporation is characterised as legalised robbery. - The constitutional guarantee of compensation for expropriation is undermined because Parliament can alter the Constitution. - The Planning Commission is criticised for setting unachievable targets and distorting price signals. - The article argues that political interference in the economy cannot produce growth — only free markets can. ### Nehru — A Bundle of Frayed Nerves *By J. K. Dhairyawan* J. K. Dhairyawan offers a psychological and political portrait of Nehru, arguing that the Prime Minister's recent erratic behaviour — including his dismissal of Chief Ministers, his vacillation on policy, and his irritability in Parliament — reflects deep personal insecurity rather than strength of conviction. The article cites Nehru's own diary entries from the Ahmednagar Fort imprisonment period, in which Nehru confessed to having a dictatorial temper. Dhairyawan argues that Nehru's popularity is built on an irrational popular cult, and that his handling of the Rajasthan cabinet crisis demonstrated his willingness to manipulate constitutional machinery for partisan ends. A book advertised on page 8 — 'The Assassins' — is noted as sold through the Libertarian Book House. - Nehru's erratic public conduct is traced to a confessed dictatorial temperament documented in his own prison diary. - The dismissal of the Rajasthan cabinet and interference in state Congress affairs illustrate unconstitutional centralisation. - Popular adulation of Nehru is described as an irrational personality cult rather than genuine democratic endorsement. - The article argues that Nehru's policy inconsistency damages investor confidence and democratic norms. ### Noon Wants India to Commit Political "Harikari" *By Vigilant* Writing as 'Vigilant', the author responds to statements by Pakistani Prime Minister Feroz Khan Noon that were widely reported as threatening India. The article documents the steep rise in Pakistan's defence spending — defence expenditure has risen from Rs. 41 crores in 1947 to over Rs. 150 crores by the mid-1950s, with U.S. military aid on top — and argues that India's continued policy of goodwill toward Pakistan is suicidal. The piece calls for India to re-examine the relationship and stop funding Pakistani military capacity through trade and diplomatic restraint. - Pakistan's defence spending has more than tripled since partition, funded partly by U.S. military aid. - Noon's public statements are characterised as a direct threat to India's sovereignty. - India's continued 'goodwill' policy is described as enabling Pakistani rearmament. - The article demands a fundamental policy rethink rather than continued forbearance. ### Nehru's Illusions *By Vivek* Writing as 'Vivek', the author attacks what he calls Nehru's 'illusions' — particularly Nehru's stated belief that satellite countries of the Soviet Union are gaining independence, and his persistent optimism about Sino-Indian friendship. Vivek argues that Nehru's foreign policy is based on wishful thinking rather than hard geopolitical assessment, and that his willingness to lecture Western democracies while excusing Soviet repressions constitutes a double standard that damages India's credibility. The piece also criticises Nehru's domestic economic illusions, including his faith that the Planning Commission can deliver prosperity. - Nehru's belief that Soviet satellite states are drifting toward independence is dismissed as wishful thinking. - Nehru's simultaneous criticism of Western colonialism and silence on Soviet imperialism is characterised as a double standard. - His optimism about Sino-Indian relations is described as a dangerous illusion given China's regional ambitions. - Domestic economic planning is presented as another illusion — the belief that state direction can substitute for market incentives. ### And the Ostrich with Its Head in the Sand *By Kishore Valicha* Kishore Valicha's article challenges Indian politicians and opinion-makers who continue to advocate friendship with Pakistan by ignoring the evidence of Pakistani hostility, rearmament, and pan-Islamic ideology. Valicha likens their posture to an ostrich burying its head in the sand. He argues that Pakistan's military build-up and its alignment with SEATO and CENTO, combined with the statements of its leaders, constitute an unmistakable threat. The second page of the article (p. 12) carries the 'Did You Know...' feature by Scio, a miscellany of historical anecdotes. - Pakistani leaders' public statements and military build-up are presented as evidence of hostile intent that Indian politicians choose to ignore. - Pakistan's alignment with Western military pacts (SEATO, CENTO) while receiving U.S. arms is cited as a direct security threat to India. - The 'ostrich' metaphor captures the author's view that pro-Pakistan sentiment in Indian political circles is wilful blindness. - Page 12 includes the 'Did You Know...' miscellany column by Scio. ### Holding the Mirror to the Congress Face *By Jay Kay* Jay Kay's article 'Holding the Mirror to the Congress Face' documents what the author presents as a series of concrete scandals implicating Congress politicians and officials: a medical man and Congress leader allegedly involved in forgery and fraud (the C.I.D. investigation is described); the case of Mrs. Vijayalaxmi Pandit's alleged shielding of a British national from prosecution; and an election murder case in Bombay involving a Congress man. The article is polemical in tone, using official inquiry records to argue that Congress has developed a culture of impunity. - A Congress leader and medical man in Bombay is alleged to have been involved in forgery and fraud; the C.I.D. report is described as suppressed. - Mrs. Vijayalaxmi Pandit is accused of using diplomatic influence to shield a British national from Indian legal process. - An election murder case in Bombay is attributed to Congress circles. - The article argues these cases reflect systematic rather than incidental corruption within Congress. ### Guardians of Good Health An unsigned health column titled 'Tiny Guardians of Good Health' explains the biochemical roles of vitamins — particularly Vitamin C, the B-complex group, and B12 — in maintaining health. The article is written in accessible popular-science prose and recommends dietary sources: citrus fruits, grains, pulses, egg yolk, and leafy greens. The second half of the page carries the continuation of a 'True Tales — Helen Keller' illustrated feature by VERUS, depicting scenes from Keller's education by Anne Sullivan, her college career, and the Braille system. - Vitamin C and the B-complex vitamins are explained in accessible terms as essential for immunity, nerve function, and anti-anaemia. - Dietary sources suitable for Indian readers (pulses, jaggary, leafy vegetables, egg yolk) are listed. - The Helen Keller 'True Tales' feature illustrates themes of perseverance and self-education. - The feature's reference to Braille — invented by Louis Braille, a Frenchman, in 1829 — provides a cross-cultural reference point. ### Plight of Denmark In A "Welfare" State An unsigned article on the 'Plight of Denmark In A Welfare State' (spread across pages 15–16) draws on Danish economic data to argue that high taxation under the welfare state has suppressed savings, driven up consumer prices, and forced government to introduce price controls — which in turn create shortages. The article argues Denmark's experience offers a preview of where India's own nascent welfare-state ambitions are heading: a downward spiral of taxation, inflation, controls, and economic stagnation. The piece also includes a sidebar on income tax philosophy, invoking Karl Marx as the intellectual father of progressive income taxation and calling it the 'Father of all Taxes'. - Denmark's welfare state has produced rising prices, suppressed savings, and a vicious cycle of tax-inflation-controls. - Industrial exports have stagnated while welfare spending has outpaced national income growth. - Progressive income tax is attributed to Marx's Communist Manifesto and criticised as a tool of class warfare rather than equity. - The Danish case is presented as a cautionary example for India's own welfare-state trajectory. ### Over A Glass of "Nira" *By Toddy-Tapper* Toddy-Tapper's satirical column 'Over A Glass of Nira' on pages 17–18 uses the folk beverage of toddy/nira as a metaphor for honest, unpretentious thinking. The column's main target is the Gandhi cap as a political status symbol: Toddy-Tapper observes that the cap has become the universal accessory of Indian politicians and petty officials who have nothing else to recommend them, and that wearing it has lost all connection to the idealism Mahatma Gandhi associated with it. The piece is written in a colloquial, humorous register and argues that surface symbols have displaced substance in Indian public life. The column continues on page 18 with remarks about Mrs. Vijayalaxmi Pandit's diplomatic privileges. - The Gandhi cap is satirised as a costume for political opportunists rather than a genuine symbol of Gandhian values. - The column argues that Indian public life has become dominated by theatrical gestures emptied of ideological content. - Mrs. Vijayalaxmi Pandit's use of diplomatic immunity is used as a parallel example of privilege masquerading as principle. - The nira/toddy motif frames the column as the voice of plain, populist common sense against elite pretension. ### A Country where Police Oppress People "ad libitum" Dare Not Establish Socialism Page 19 carries an unsigned article arguing that India's record of police oppression disqualifies it from establishing socialism. The piece cites ongoing South Indian investigations into police atrocities and argues that any socialist state requires an honest and disciplined civil administration — which India demonstrably lacks. It draws on the Congress Party's own admissions of police misconduct to make the point that socialism built on such a coercive foundation would be totalitarianism by another name. - Police oppression and brutalisation of citizens are documented as evidence of a structurally corrupt civil administration. - The argument is that socialism requires a high standard of state virtue — which India's police record shows it cannot meet. - The piece turns a standard socialist argument (the state as instrument of public good) against itself. - Congress's own inquiries are cited as the evidentiary basis, making the argument difficult to dismiss as anti-government bias. ### 'Russia Is Not A Communist Country Page 20 reprints or adapts a piece by Fred C. Clark and Richard Stanton Rimanoczy arguing that Soviet Russia is not genuinely communist. The argument is that Marxist communism promised a classless, stateless society but the USSR has produced a rigid class hierarchy with party elites at the top and ordinary workers at the bottom. Khrushchev's admission of Stalinist crimes is cited as evidence of endemic state violence rather than aberration. The piece asks why, if Russia is not communist, pro-Soviet Indian intellectuals and politicians continue to defend it. - The USSR has produced a new ruling class of party officials, contradicting Marxist promises of a classless society. - Khrushchev's own denunciations of Stalin are used to show the system's brutality is structural, not incidental. - The article asks why Indian pro-Soviet intellectuals defend a system that its own leaders condemn. - The argument is that labelling Russia 'communist' is a propaganda success that obscures the reality of a new form of tyranny. --- ## [Primary work] The Indian Libertarian URL: https://indianliberals.in/primary-works/the-indian-libertarian-apr1-1960/ ### Summary The Indian Libertarian (Vol. VIII No. 1, April 1, 1960) is a fortnightly periodical published from Bombay, incorporating the earlier 'Free Economic Review' and 'The Indian Rationalist'. This issue is dominated by two urgent preoccupations: the Chinese military threat on India's northern borders, and the erosion of democratic and constitutional norms within India itself. The editorial opens with a stinging attack on the Governor of Bombay's high-handed intervention to stay the execution of the Commander Nanavati murder case sentence, framing it as executive overreach that corrodes the rule of law and encourages a drift toward authoritarian governance. M. A. Venkata Rao supplies the issue's lead foreign-policy essay, "Containing Red China," contending that Nehru's ideological sympathy for Beijing has crippled India's response to Chinese aggression. He calls for abandoning non-alignment, joining SEATO and CENTO, recognising Tibetan independence, inviting American military assistance, and building roads, supply lines and forward bases along the Himalayan frontier. He also contributes the issue's book review of Volin's "The History of a Soviet Collective Farm," using the documentary record of Stalinist collectivisation's failure to argue by analogy against India's Soviet-inflected planning model. M. N. Tholal's "The Silver Lining" reframes the 1959–60 Chinese crisis as a salutary shock that should force India to shed its 'Hindi-Chini bhai-bhai' illusions, cultivate civic courage and military capacity, and replace Congress-controlled discourse with genuine pluralism; he attacks Nehru's conflation of personal diplomacy with national interest and the Congress habit of treating dissent as treachery. The issue also carries a pointed piece by V. Vijayatunga examining the survival of Brahmanical social authority in independent India under the label 'fascism', and a short philosophical essay by Bernard Iddings Bell tracing the historical cycle by which political power degenerates from aristocracy through plutocracy to mob rule. The Delhi Letter reports on the early fortunes of the Swatantra Party and urges mergers among liberal and opposition parties, while a brief but forthright essay by A. D. Cohen indicts the caste system as a form of perpetual servitude incompatible with democratic citizenship. The Rationalist Supplement records a Bombay seminar attended by followers of M. N. Roy debating whether Rationalists should align with Swatantra or stay non-partisan. The News Digest and Bangalore Letter round out the issue with brief items on corruption, linguistic policy, and the Congress party's growing dominance of state institutions. ### Body ## Summary The Indian Libertarian (Vol. VIII No. 1, April 1, 1960) is a fortnightly periodical published from Bombay, incorporating the earlier 'Free Economic Review' and 'The Indian Rationalist'. This issue is dominated by two urgent preoccupations: the Chinese military threat on India's northern borders, and the erosion of democratic and constitutional norms within India itself. The editorial opens with a stinging attack on the Governor of Bombay's high-handed intervention to stay the execution of the Commander Nanavati murder case sentence, framing it as executive overreach that corrodes the rule of law and encourages a drift toward authoritarian governance. Subsequent sections develop this theme through the lens of Nehru's China policy—indicting his refusal to acknowledge Chinese aggression and his reliance on non-alignment bromides—and through a Rationalist Supplement that defends free expression and liberal rationalism against Congress domination of public life. The issue also carries a pointed piece by V. Vijayatunga examining the survival of Brahmanical social authority in independent India under the label 'fascism', and a short philosophical essay by Bernard Iddings Bell tracing the historical cycle by which political power degenerates from aristocracy through plutocracy to mob rule. The Delhi Letter reports on the early fortunes of the Swatantra Party and urges mergers among liberal and opposition parties, while a brief but forthright essay by A. D. Cohen indicts the caste system as a form of perpetual servitude incompatible with democratic citizenship. A book review covers Volin's history of Soviet collective farms. The News Digest and Bangalore Letter round out the issue with brief items on corruption, linguistic policy, and the Congress party's growing dominance of state institutions. ## Essays ### EDITORIAL The editorial, titled 'High-Handedness of the Governor of Bombay', condemns the Governor's intervention to protect Commander Nanavati from re-employment consequences following his murder conviction. The author argues that the Governor acted without constitutional warrant, treating the law's letter and the law's spirit as separable—an executive convenience that undermines the judiciary and promotes a culture of impunity. The editorial then broadens its attack to Nehru's handling of the Chinese border crisis: it accuses him of dismissing Krishna Menon's apologists for Beijing, of treating Chinese aggression as a matter of India's own provocation, and of failing to build the military preparedness or diplomatic alliances that an honest appraisal of the threat would require. Pakistan's territorial claims are also addressed, with the editorial urging that India's Foreign Minister must stand firm on self-determination principles rather than yielding to Chinese or Pakistani pressure through 'pipeline' diplomacy. - Governor of Bombay overstepped constitutional bounds by intervening to protect Nanavati from service-regulation consequences after the Supreme Court disposed of his appeal - Editorial argues the executive has no justification to set aside service regulations to smooth the career of a convicted officer, calling it a blow to 'stability and sanctity of good government' - Chou En-lai's visit is characterised as that of a 'honoured guest' whose hospitality reveals India's supine foreign policy - Krishna Menon is accused of publicly defending China and acting as Beijing's advocate within the Indian Cabinet - Nehru is criticised for advising the Governor and Chief Minister in the Nanavati matter rather than respecting judicial independence ### Containing Red China *By MA Venkata Rao* M. A. Venkata Rao's essay 'Containing Red China' argues that India's China policy has been disastrously misconceived from the start. Venkata Rao contends that the Prime Minister's attachment to non-alignment and his ideological sympathy for Communist China have led him to minimise the gravity of Chinese aggression, dismiss military preparedness, and isolate India from the Western alliances that alone could provide a credible counterweight to Chinese power. He calls for a complete recasting of India's foreign policy: recognition of Tibet's right to independence, alignment with SEATO and CENTO against Chinese expansion, and a willingness to invite American military assistance. The essay also argues that India should develop closer relations with countries sharing its democratic values—Japan, Malaya, Burma, Vietnam—rather than seeking solidarity with Communist states, and that a credible military deterrent on the Himalayan frontier requires immediate investment in roads, supply lines, and forward defence. - Venkata Rao blames Nehru's ideological pro-China bias for India's failure to respond adequately to Chinese aggression on the northern border - Argues India should abandon non-alignment and align with SEATO and CENTO as the only effective containment mechanism for Chinese expansion - Calls for recognition of Tibet's independence and solidarity with Tibetan resistance - Urges development of military infrastructure—roads, supply lines, forward bases—along the Himalayan frontier - Advocates closer alignment with democratic Asian nations (Japan, Malaya, South Vietnam) and American military assistance ### The Silver Lining *By M. N. Tholal* M. N. Tholal's 'The Silver Lining' offers a more measured but still critical appraisal of the Chinese crisis, framing it as an opportunity for India to shed its foreign-policy illusions and develop genuine national character. Tholal argues that China's aggression has been salutary in exposing the hollowness of Nehru's 'Hindi-Chini bhai-bhai' rhetoric and the danger of a policy built entirely on personal trust and ideological sympathy. He contends that India must cultivate civic courage, build military capacity, and—crucially—replace its Congress-controlled public discourse with a genuinely pluralistic one that allows frank criticism of the government's China policy. He is sharply critical of the Congress party's tendency to treat dissent as treachery and of Nehru's attempts to silence critics by accusing them of being anti-national. - Chinese aggression is reframed as a 'silver lining' that has forced India to confront the dangerous naivety of its non-alignment policy - Tholal criticises Nehru's conflation of personal diplomacy with national interest, arguing that genuine national security cannot rest on one man's relationships - Plain commonsense and willingness to acknowledge Chinese aggression are presented as the essential preconditions for any sound response - Criticises Congress suppression of press criticism of government China policy as anti-democratic ### RATIONALIST SUPPLEMENT The Rationalist Supplement (inserted with separate roman-numeral pagination, I–IV) records a discussion held at 'Current Politics' seminar on 13th March in Bombay. Followers of M. N. Roy attended. S. Ramaseshan opened by arguing that Rationalists should not take part in party politics, and that no political party is the sole advocate of freedom—the Congress is not, despite its historic association with independence. The discussion that followed—featuring contributions from M. L. Willans, Mr. Govinda (Rationalist movement, Australia), Dr. T. Cornelius, Dr. Ranganathan and others—explored whether Rationalists should support the Congress, join the Swatantra Party, or maintain strict non-partisan advocacy. Multiple speakers challenged Nehru's Chandigarh speech portrayal of Rationalism as anti-national. A separate short passage on S. K. G. Rajan dismisses Marx as an economist but credits him as a social thinker whose writings exposed the misuse of power by capitalists. References to South Indian Tamil literature tradition and the Aryan conquest are also noted. - Rationalist seminar debated whether the movement should align with Swatantra Party, remain non-partisan, or actively oppose Congress domination of public life - S. Ramaseshan argued Rationalists have a duty to uphold free expression and should not endorse any single party, including Congress - Speakers criticised Nehru's Chandigarh speech for labelling Rationalism as a form of anti-national activity - Dr. Ranganathan and others argued for Swatantra Party support as the vehicle most aligned with Rationalist principles of individual freedom - Discussion touched on Karl Marx's legacy, distinguishing his social analysis from his economic theory ### Whose Fascist Baby Are You? *By V. Vijayatunga* V. Vijayatunga's 'Whose Fascist Baby Are You?' argues that the term 'fascism' is loosely applied in Indian political discourse, and that the real authoritarian danger comes not from any marginal party but from the entrenched social authority of Brahmanical tradition and its institutional heirs in independent India. Vijayatunga argues that 'Brahmin authoritarianism' has historically operated as an unofficial state within the state—controlling access to education, property, and public esteem—and that political independence has barely touched this structure. The essay draws on historical evidence of Brahmanical control over temples, literacy, and trade, and contends that genuine democratic freedom in India requires confronting this social authoritarianism as directly as it confronts the political kind. - Vijayatunga challenges readers to locate the real source of authoritarian tendencies in Indian society: not in fringe political parties but in Brahmanical social tradition - Argues that Brahmanical control over temples, learning, and commerce has historically constituted an 'unofficial state' operating beneath formal political structures - Political independence has left the social authoritarianism of caste largely intact - Draws contrast between 'Upper Caste' Aryan tradition and the more democratic spirit of the pre-Aryan south ### A Short History of Political Power *By Bernard Iddings Bell* Bernard Iddings Bell's 'A Short History of Political Power' (one page rendered) sketches a cyclical theory of political decline: aristocracy degenerates into plutocracy, plutocracy into mob rule, and mob rule into totalitarianism, from which a new aristocracy eventually arises. Bell argues that the mid-twentieth century democracies are caught in the mob-rule to totalitarianism transition and that the only escape is a recovery of genuine moral and intellectual authority, not merely electoral majorities. The piece is apparently a reprint of a text by an American author. - Bell presents a cyclical theory of political degeneration from aristocracy through plutocracy to mob rule and then totalitarianism - Argues that contemporary democracies are in the mob-rule stage, susceptible to demagogic capture - Recovery requires reestablishment of genuine moral and intellectual authority, not just procedural democracy ### DELHI LETTER The Delhi Letter datelines from Kurukshetra and discusses the early performance of the Swatantra Party. The correspondent is broadly sympathetic but concerned: the Swatantra Party's growth has been encouraging but it risks being a mere coalition of Congress defectors without a unifying ideology. The letter argues that Mr. Nehru's personal authority is so powerful that Swatantra cannot succeed simply by opposing him—it must develop a positive programme grounded in liberal economics and democratic federalism. It also discusses the corruption case involving Mr. C. C. Deshmukh, and calls for merger between Swatantra, the Jan Sangh, and other opposition parties to form a viable electoral front. - Swatantra Party's early growth is noted with cautious optimism, but the party is warned against becoming a mere anti-Nehru vehicle without a constructive liberal programme - Corruption involving C. C. Deshmukh's appointments is discussed as emblematic of the Congress party's entrenched patronage culture - Calls for merger or coordination between Swatantra and other liberal/right-of-centre opposition parties ### BOOK REVIEW *By MA Venkata Rao* The book review covers 'The History of a Soviet Collective Farm' by Volin, reviewed by A. Venkata Rao. The review is brief (approximately half a page) and characterises the book as a meticulous record of the failure of Stalinist collectivisation—the destruction of the peasant economy, the terror used to enforce collectivisation, and the eventual collapse of agricultural productivity. Venkata Rao uses the review to argue by implication that India's own planning model and its romance with Soviet-style agricultural organisation is similarly doomed. - Volin's book is presented as a documentary account of the human cost and economic failure of Soviet collectivisation - The review draws implicit parallels with India's own planning debates and the Congress left's sympathy for Soviet agricultural models - Venkata Rao endorses Volin's conclusion that collectivisation destroyed individual incentive and created chronic food insecurity ### NEWS DIGEST The News Digest carries brief items on: corruption going unchecked in the Nizam's dominions; a brief reference to Captain Lim of the USA in the context of collective farming relief; and a note on Hyderabad reporting on agricultural productivity issues and the impact of land reform on farming incentives. The digest also contains a pointed item from the Calicut University notes on English-medium instruction, citing A. Ranganathan's views on the importance of English as a vehicle for higher education and scientific literacy in India. - Item on uncontrolled corruption in Nizam's territory, presented as a failure of post-independence governance - Note on Calicut University's discussion of English-medium instruction and its importance for access to scientific and liberal education - Brief agricultural item on declining farm productivity linked to collectivist land-reform policies ### OUR BANGALORE LETTER The Bangalore Letter discusses the Swatantra Party's prospects in South India and comments on the Congress party's increasing use of state patronage to suppress opposition. The correspondent notes that local Congress leaders are acting on instructions from above to intimidate Swatantra members and that several prominent businessmen who had been quietly supporting the Congress party are now beginning to look at Swatantra as a vehicle for liberal economic policy. The letter also comments briefly on the need for a free press and the danger of government advertising dependence making newspapers timid. - Congress party apparatus in South India is described as using state patronage and intimidation against Swatantra Party members - Business community beginning to explore Swatantra as an alternative vehicle for liberal economic policy - Government advertising dependence is identified as a structural threat to press freedom in India ### LETTER TO THE EDITOR The Letter to the Editor section (page 19) contains a letter on the Pakistan border situation and the plebiscite question in Kashmir, arguing that India should not concede a plebiscite in Kashmir under Chinese or Pakistani pressure and that any plebiscite held under conditions of intimidation would be meaningless. The correspondent urges the Foreign Ministry to hold firm on the principle that self-determination is only valid when exercised freely, and argues that Pakistan's claim to Kashmir cannot be advanced through external pressure from China. - Argues against conceding a Kashmir plebiscite under current conditions of Pakistani and Chinese pressure - Contends that self-determination is only meaningful when exercised without external intimidation or military threat - Urges India's Foreign Ministry to resist Chinese diplomatic support for Pakistan's Kashmir claim --- ## [Primary work] The Indian Libertarian URL: https://indianliberals.in/primary-works/the-indian-libertarian-apr1-1963/ ### Summary This issue of The Indian Libertarian (Vol. XI No. 1, April 1963) is the opening number of the journal's eleventh volume and ranges across four of the most contested questions facing India in early 1963: the proper constitutional character of the Indian state (secular vs. civil), the futility of communist revolution as a developmental strategy, the political philosophy of Jayaprakash Narayan, the place of English in Indian education, and the looming strategic threat posed by a possible Sino-Pakistani joint military action. The editorial sets a polemical tone by arguing that Prime Minister Nehru misconceives the word 'secular' and that what India needs is not a state indifferent to religion but a 'civil' state defined by equality before law and freedom of conscience. The remaining feature essays engage M. A. Venkata Rao's scepticism about communist revolution's track record on welfare, M. N. Tholal's critical analysis of Jayaprakash Narayan's Gandhian non-violence as a foreign-policy guide, and K. Sreeramamurty's defence of English as the medium of instruction in Indian higher education.… ### Body ## Summary This issue of The Indian Libertarian (Vol. XI No. 1, April 1963) is the opening number of the journal's eleventh volume and ranges across four of the most contested questions facing India in early 1963: the proper constitutional character of the Indian state (secular vs. civil), the futility of communist revolution as a developmental strategy, the political philosophy of Jayaprakash Narayan, the place of English in Indian education, and the looming strategic threat posed by a possible Sino-Pakistani joint military action. The editorial sets a polemical tone by arguing that Prime Minister Nehru misconceives the word 'secular' and that what India needs is not a state indifferent to religion but a 'civil' state defined by equality before law and freedom of conscience. The remaining feature essays engage M. A. Venkata Rao's scepticism about communist revolution's track record on welfare, M. N. Tholal's critical analysis of Jayaprakash Narayan's Gandhian non-violence as a foreign-policy guide, and K. Sreeramamurty's defence of English as the medium of instruction in Indian higher education. The Delhi Letter section, a book review of Ralph Borsodi's The Challenge of Asia, press gleanings, news items, and a letters column round out the issue. Together, the articles project a consistent classical-liberal and anti-socialist orientation — sceptical of state planning, concerned about civil liberties, and pragmatic on defence and language policy. ## Essays ### 'Secular' State or 'Civil' State? This unsigned editorial challenges Prime Minister Nehru's repeated use of the term 'secular state', arguing that the phrase is philosophically confused and politically loaded. The editor contends that India's founders and many Congress leaders imported the word 'secular' from Western political traditions without grasping its original meaning — namely a state that does not establish or favour any religion — and have instead deployed it as a polemical weapon to silence religious minorities and democratic critics alike. The editorial proposes that the correct aspiration for India is a 'civil' state: one that guarantees equality before the law, freedom of conscience and worship, and the individual rights of every citizen regardless of faith. It further argues that describing India as a 'Hindu State' would be as incorrect as calling it a 'secular state', and that Nehru's Government itself violates its own secular claims by granting special privileges to certain religious communities. The piece closes by insisting that civil liberties — not secularism as a slogan — are the true safeguard of Indian democracy. - Nehru's use of 'secular state' is treated as intellectually borrowed and misapplied — it does not correctly describe Indian constitutional practice. - The editorial proposes replacing 'secular state' with 'civil state', meaning equal rights before the law for all citizens irrespective of religion. - Calling India a Hindu State would be wrong; but calling it secular in the Western sense is equally inapt given active state involvement with religious institutions. - The Government's failure to apply uniform civil law across communities is cited as evidence that 'secularism' is a rhetorical shield rather than a governing principle. - The editorial links civil liberties and rule of law as the authentic liberal alternative to both theocracy and the confusion it calls 'pseudo-secularism'. ### An Unnecessary Revolution *By MA Venkata Rao* M. A. Venkata Rao argues that communist revolution is an 'unnecessary' strategy for achieving economic equality and social welfare, given that the empirical record of the Soviet Union and China demonstrates no superior welfare outcomes compared with the capitalist democracies of the West. He reviews the claims made for the Russian and Chinese revolutions — that they were the only available routes to modernisation, land reform, and freedom from colonial exploitation — and finds each wanting. Drawing on data about wages, living standards, and freedom, he contends that the violence and authoritarian control exacted by revolutionary communism far exceeds any developmental gains, and that capitalist economies with welfare provisions have delivered higher wages, more widely available goods, and genuine individual freedom. He concludes with a six-point summary of what a free society and a free economy looks like, explicitly contrasting each point with communist practice. - Venkata Rao challenges the empirical premise that communist revolution was historically necessary for economic development or welfare. - The article cites Soviet and Chinese wage levels and living standards as evidence of communist failure relative to Western capitalist economies. - Violence and loss of freedom are treated as costs that are never offset by communist developmental gains. - The concluding six-point 'free society' manifesto covers economic organisation, individual rights, rule of law, religious freedom, and democratic self-governance. - The argument is framed as directed at Indian readers tempted by Marxist developmental arguments in the aftermath of the 1962 Sino-Indian war. ### The Political Philosophy of Jaya Prakash Narain *By M. N. Tholal* M. N. Tholal's essay examines Jayaprakash Narayan's political philosophy, focusing on the tension between Narayan's Gandhian commitment to non-violence and his stated support for Indian resistance to the 1962 Chinese aggression. Tholal argues that Narayan's philosophy is ultimately incoherent: having built his political identity around satyagraha, non-violent resistance, and a critique of the nation-state system, Narayan found himself unable to apply that philosophy to Chinese imperialism without contradiction. The essay notes that Narayan endorsed the Indian military response to China while simultaneously refusing to abandon his non-violent framework, and that he attempted to resolve this by distinguishing between 'legitimate' defence and 'aggressive' nationalism. Tholal contends that this distinction collapses under scrutiny and that Narayan's philosophy, however admirable in the domestic sphere, provides no usable guide for Indian foreign policy when facing an adversary that rejects its premises. The essay also questions Narayan's advocacy of Sino-Indian friendship and his apparent faith that China's leaders could be persuaded by moral argument. - Tholal identifies a fundamental contradiction in Jayaprakash Narayan's political philosophy between his non-violence doctrine and his support for military resistance to China. - Narayan's belief that moral suasion could influence Chinese Communist leaders is treated as dangerously naive. - The essay argues that Gandhian non-violence works only against adversaries who share some moral common ground, and China under Communist rule does not. - Narayan's neutralism and his advocacy of Sino-Indian friendship are criticised as having emboldened Chinese assertiveness. - Tholal credits Narayan's sincerity and democratic credentials while rejecting his policy prescriptions. ### English in Schools and Colleges *By K. Sreeramamurty* K. Sreeramamurty defends the retention of English as the medium of instruction in Indian schools and universities, arguing against the Andhra Pradesh government's move to introduce regional languages as the sole teaching medium. He contends that English is not merely a colonial legacy but has become an integral part of Indian intellectual and scientific culture, and that switching to regional languages at the higher education level would damage India's ability to attract international scholars, produce internationally competitive research, and train professionals for a modern economy. The essay argues that the 'nationalist' case for replacing English is emotionally driven and economically reckless, and that no country has succeeded in replacing a widely used international language of scholarship without severe long-term intellectual costs. Sreeramamurty notes that even within India, using regional languages as university media would balkanise knowledge production and make inter-regional academic exchange impossible. - Sreeramamurty argues that English at the university level is a pragmatic necessity, not a mark of colonial subservience. - The Andhra Pradesh government's proposal to shift university instruction to Telugu is the immediate target of the critique. - The essay claims that no country has successfully replaced an established international language of scholarship without intellectual and scientific setbacks. - Using regional languages in Indian universities would prevent inter-regional academic mobility and collaboration. - The author invokes international scholars and the practical needs of professional training to defend English retention. ### Joint Sino-Pak Attack on India? The Delhi Letter section (unsigned, described as 'From Our Correspondent') analyses the strategic threat of a joint Sino-Pakistani military offensive against India in the aftermath of the 1962 Sino-Indian war. The piece reports on diplomatic signals from Washington and the debates among Indian political leaders about the appropriate response. It notes that the American Secretary of State Dean Rusk had visited Pakistan and India, and that both the Sino-Pakistan border agreement and Pakistan's arms negotiations with China were deepening India's security dilemma. The letter argues that India's political class has been slow to grasp the depth of the Sino-Pakistani strategic convergence and urges a more alert posture. It also discusses Indo-Pak talks — noting US and UK pressure on India to make concessions on Kashmir as a condition for military assistance — and criticises the Government for appearing to treat the Kashmir question as negotiable under foreign pressure. - The Delhi Letter identifies a Sino-Pakistani strategic alignment as a serious and immediate threat to Indian security following the 1962 war. - US and UK pressure on India to negotiate on Kashmir in exchange for military aid is presented as a form of coercion India must resist. - The article criticises Indian government complacency about the depth of China-Pakistan cooperation. - Dean Rusk's South Asia visit is the news peg; the article reads his statements as insufficiently reassuring to India. - The letter argues India must build its own military capacity rather than depend on conditional Western assistance. ### Book Review This unsigned book review covers Ruth Benedict's Patterns of Culture and a companion work, summarising their argument that human culture is shaped by distinct configurations of values, practices, and psychological orientations that differ radically across societies. The review explains Benedict's famous contrast between 'Apollonian' and 'Dionysian' cultures and notes her argument that no culture's configuration is inherently superior to another. The reviewer briefly relates Benedict's framework to Indian civilisational questions, suggesting that an understanding of cultural pluralism is relevant to India's own debates about national identity and social reform. The review is short (one page) and largely descriptive rather than critical. - The review covers Ruth Benedict's Patterns of Culture, explaining its central thesis about culture as configuration. - The Apollonian/Dionysian distinction is the conceptual centrepiece of the summary. - The reviewer draws a brief connection between Benedict's cultural pluralism and Indian debates about identity. - The review is descriptive rather than analytical and does not engage in sustained criticism of Benedict's method. ### Gleanings from the Press The Gleanings from the Press section reprints and briefly contextualises press extracts on the Indian government's language and educational policies, focusing on Gujarat's parents' movement demanding English instruction from the fifth standard, and criticism of the use of charkha (handspinning) as a compulsory school subject in Gujarat as an 'anti-English' cultural imposition. - Reports on a mass movement in Gujarat demanding English instruction from the fifth standard. - Criticises the mandatory teaching of charkha in Gujarat schools as ideologically driven and educationally counterproductive. - Connects the language debate to the journal's broader pro-English editorial stance. ### News and Views The News and Views section carries a series of short items: a report on the US $240 million interest-free loan to India for the Third Five-Year Plan signed by Ambassador John Kenneth Galbraith; a note on Nehru's statements fearing conflict on the Hindi language issue; an item on the English movement in Gujarat demanding English from fifth standard; a report from New York quoting Aldous Huxley on the pessimistic prospects for underdeveloped nations; and a Poona item on former Defence Secretary H. M. Patel urging India to accept Western military aid. A further item reports Rajaji (C. Rajagopalachari) calling for India to lead the 'Afro-Asian camp' rather than outsource that leadership to Nkrumah or Nasser. - US $240 million interest-free loan to India announced; Galbraith quoted on its unprecedented scale. - Nehru expressed concern about Hindi/language conflicts at a Congress workers' meeting in New Delhi. - Aldous Huxley quoted forecasting extreme gloom for underdeveloped nations unless population growth is controlled and governance improved. - H. M. Patel (former Defence Secretary) urges acceptance of Western military aid without hesitation. - Rajaji advocates India taking leadership of the Afro-Asian bloc rather than ceding it to Nkrumah or Nasser. ### Dear Editor The Dear Editor letters column carries two items. The first, by P. Kuppi Rao from Madras, defends the right of individuals to hold and act on their views on prohibition, arguing that a man who privately believes prohibition is wrong should not be compelled to enforce it — a point about liberty of conscience in public service. The second item is a short quote attributed to 'Insight' criticising Nehru's self-assurance about his infallibility, using a paraphrase of the Dickens Micawber formula to make the point that a leader who trusts no one but himself and refuses outside advice will lead a country to misery. - P. Kuppi Rao argues for individual liberty of conscience, specifically that a person who opposes prohibition on principle should not be forced to administer it. - The second letter uses satire to criticise Nehru's alleged sense of political infallibility. - Both items reflect the journal's consistent concern with individual rights over state compulsion. --- ## [Primary work] The Vice of Child Marriages URL: https://indianliberals.in/primary-works/the-vice-of-child-marriages-by-ishwar-chandra-vidyasagar/ ### Summary Ishwar Chandra Vidyasagar's essay 'The Vice of Child Marriages' (Balyo-Bibaher Dosh), originally published in 1850 in the Calcutta-based Bengali periodical Sarva Subhakari and presented here in English translation, mounts a sustained reformist attack on the custom of marrying off pre-pubescent girls. Vidyasagar opens by dismantling the scriptural rationale — the Smriti-Shastra's promises of Gouri-daan and Prithvi-daan for parents who marry off eight- and nine-year-old daughters — arguing that the rigid corollary that an unmarried menstruating girl damns seven generations of ancestors makes child marriage socially coercive rather than spiritually meritorious. He then catalogues the human costs: marriages contracted before the boys and girls are capable of love or consent, conjugal misery, families riven by 'discord and disaffection', and a culture in which young couples 'practise the arts of titillating' instead of receiving education. The essay's distinctive move is to fuse moral, physiological, and what would later be called liberal-developmental arguments into a single chain.… ### Body ## Summary Ishwar Chandra Vidyasagar's essay 'The Vice of Child Marriages' (Balyo-Bibaher Dosh), originally published in 1850 in the Calcutta-based Bengali periodical Sarva Subhakari and presented here in English translation, mounts a sustained reformist attack on the custom of marrying off pre-pubescent girls. Vidyasagar opens by dismantling the scriptural rationale — the Smriti-Shastra's promises of Gouri-daan and Prithvi-daan for parents who marry off eight- and nine-year-old daughters — arguing that the rigid corollary that an unmarried menstruating girl damns seven generations of ancestors makes child marriage socially coercive rather than spiritually meritorious. He then catalogues the human costs: marriages contracted before the boys and girls are capable of love or consent, conjugal misery, families riven by 'discord and disaffection', and a culture in which young couples 'practise the arts of titillating' instead of receiving education. The essay's distinctive move is to fuse moral, physiological, and what would later be called liberal-developmental arguments into a single chain. Vidyasagar appeals to medical opinion that children conceived by parents who are not physically mature die in infancy or grow up infirm; he then generalises this into a racial-historical claim that Bengalis and Odias — among whom child marriage is rampant — are 'feeble' and 'cowardly' in body and mind compared with the warrior peoples of the western parts of the subcontinent and with Europeans, whose children are 'well-educated and civil in disposition'. The shastric typology of eight marriages is invoked only to note that the older Gandharva and Swayamvara forms presumed adult brides and grooms; the present custom, he argues, is a degeneration, not a tradition. A significant portion of the essay is devoted to women's education and to widowhood. Vidyasagar contends that mothers are children's most influential teachers and that a society which marries girls off the moment they learn the alphabet cannot educate its women at all — so reformers campaigning for female education must simultaneously campaign against child marriage. He closes with an extended denunciation of the cruelties imposed on child-widows: enforced fasting without water, shaved heads, starvation, and the suspicion that drives some young widows into 'secretive, licentious relationships' and even feticide. The piece ends self-consciously as a beginning rather than a conclusion, promising further writing on the subject. ## Key points - Attacks the Smriti-Shastra's framing of child marriage as a sacred 'gift' (Gouri-daan, Prithvi-daan) by showing how the threat of damnation for unmarried menstruating girls turns merit into coercion. - Argues that marriages contracted before children can love or consent produce loveless households marked by 'discord and disaffection' and replace education with the 'arts of titillating'. - Invokes medical/physiological reasoning: children of immature parents die young or grow up infirm — a primary cause of what he claims is the 'feeble' physical and mental condition of Indians compared with Europeans and with people of the western subcontinent. - Reads the shastric typology of eight marriages (Gandharva, Asura, Rakshasa, Paishach, swayamvara, etc.) as evidence that ancient forms presumed adult brides and grooms; present custom is degeneration, not orthodoxy. - Couples the reform of child marriage with women's education: mothers shape children most deeply, but girls married off as soon as they 'learn the alphabet' cannot be educated, so the two causes must be pursued together. - Dedicates the closing section to the cruelties of child widowhood — penances, fasting without water, social stigma — and ties young widowhood causally to feticide and to clandestine relationships born of bodily compulsion. - Frames the essay as the opening salvo of a longer campaign, conceding that 'much of logic and reason, as well as exemplary, anecdotal and empirical expositions' remain to be written. - Originally published in 1850 in the Bengali periodical Sarva Subhakari; per the editorial footnote, identified by Gopal Halder (1972) as the earliest of Vidyasagar's reformist writings. --- ## [Primary work] Liberal Times URL: https://indianliberals.in/primary-works/tibetans-in-exile/ ### Summary This issue of Liberal Times (Volume III / Number 2, 1995), published by the Friedrich-Naumann-Stiftung Regional Office South Asia, is devoted to the Tibetan exile experience under the thematic banner 'Tibetans in Exile — The Struggle Continues…'. The issue assembles voices from Tibetan activists, Indian commentators, German press, and a US Congressional document to examine three interlocking problems: China's ongoing cultural, demographic and ecological destruction of Tibet; the democratic institutions built by the exile community under the Dalai Lama; and the strategies — non-violent resistance, international lobbying, youth mobilisation, and women's political organising — that define the contemporary freedom movement. Pema Thinley contributes the cover essay "Tibet: The Tragedy and the Hope," framing Beijing's policy as 'subtle Chinese genocide' through population transfer and cataloguing the destruction of 6,254 monasteries, coercive birth control, environmental devastation, and the exile administration's preservation of language, religion, medicine and handicrafts. Ajit Bhattacharjea, in "The Exile Identity and Democratic Vision," traces the thirty-five-year democratic evolution of the exile community, the Dalai Lama's voluntary relinquishment of traditional powers, and the 1991 Charter that turned the Assembly of Tibetan People's Deputies into a fully parliamentary legislature — calling the transformation 'unique in the history of refugee politics'. Prof. Samdhong Rinpoche, as Chairman of the Assembly of Tibetan People's Deputies, sets out the philosophical and strategic foundations of the movement in "Political Struggle of the Tibetans," grounding the cause in Buddhist inter-dependence, assessing all Chinese overtures since Deng Xiaoping's 1979 dialogue as stalling tactics, and proposing escalation to a Satyagraha of civil disobedience to be decided by referendum. Yangchen Dolkar, Information Secretary of the Tibetan Youth Congress, makes the case in "The Role of Youth in the Struggle for Tibetan Independence" for the TYC's role as a 12,000-member loyal opposition and conduit to Chinese dissidents and the peoples of East Turkistan and Inner Mongolia. Nawang Lhamo's "Tibetan Women: Nose-dive into Politics with Devotion" surveys women's activism from the 30,000-strong 1959 Lhasa march to the Tibetan Women's Association's lobbying campaign around the 1995 Beijing Fourth World Conference on Women. Karma Wangdui contributes a further activist essay extending the exile community's first-person testimony. Erhard Haubold (the long-serving South Asia correspondent of the Frankfurter Allgemeine Zeitung) supplies an outside-observer dispatch on the international politics of the Tibet question, and Fazal-ur-Rahman contributes a piece situating Tibet within wider regional and South Asian strategic concerns. The issue also reprints the United States Congress resolution (Foreign Relations Authorization Act, 1992–93) declaring Tibet an occupied country and recognising the Dalai Lama and the government-in-exile as Tibet's true representatives. The editorial perspective throughout is broadly liberal-internationalist, emphasising self-determination, human rights, rule of law, and non-violent civil disobedience as the legitimate basis for Tibet's claim to independence. ### Body ## Summary This issue of Liberal Times (Volume III / Number 2, 1995), published by the Friedrich-Naumann-Stiftung Regional Office South Asia, is devoted to the Tibetan exile experience under the thematic banner 'Tibetans in Exile — The Struggle Continues…'. In the rendered pages, the issue assembles voices from Tibetan activists, Indian commentators, and a US Congressional document to examine three interlocking problems: China's ongoing cultural, demographic and ecological destruction of Tibet; the democratic institutions built by the exile community under the Dalai Lama; and the strategies — non-violent resistance, international lobbying, youth mobilisation, and women's political organising — that define the contemporary freedom movement. The editorial perspective is broadly liberal-internationalist, emphasising self-determination, human rights, rule of law, and non-violent civil disobedience as the legitimate basis for Tibet's claim to independence. ## Essays ### Tibet: The Tragedy and the Hope *By Pema Thinley* Pema Thinley's cover essay frames Tibet's situation as 'subtle Chinese genocide': a systematic replacement of Tibetan people, culture, language and enterprise by Chinese substitutes, with economic liberalisation serving as the policy fillip for population transfer. In the rendered pages, Thinley traces the People's Republic's 1949 founding, the coerced Seventeen Point Agreement of 1951, the 1959 uprising and the Dalai Lama's flight into exile with 80,000 followers, and the subsequent destruction of 6,254 monasteries. He then surveys the exile community's institutional responses — the Central Tibetan Schools Administration, cultural preservation bodies (Library of Tibetan Works and Archives, Norbu Lingkha Institute, Tibetan Medical Institute), and the seasonal sweater trade that sustains Tibetan livelihoods in India. The essay closes by cataloguing China's coercive birth-control policy in Tibet, its environmental devastation, and the exile community's aspiration to return to a free, demilitarised, ecologically protected homeland. - China's population-transfer policy, accelerated by economic liberalisation, is making Tibetans a marginalised minority in their own land. - The 1951 Seventeen Point Agreement was signed under duress and lacked legitimacy; Tibet's political tragedy is rooted in international inaction during the 1950s. - Between 1980 and September 1994, several thousand Tibetans escaped to India and Nepal annually; the refugee flow is rising. - The exile administration, established under Indian government assistance (Central Tibetan Schools Administration), functions as a parallel state preserving language, religion, medicine and handicrafts. - China enforces a coercive birth-control policy in Tibet, requiring permission to marry and have children, with penalties including demotion and salary cuts. - Tibet's role as Asia's water tower and its nuclear-waste dumping make environmental protection a global concern, not merely a Tibetan one. ### The Exile Identity and Democratic Vision *By Ajit Bhattacharjea* Ajit Bhattacharjea traces the thirty-five-year democratic evolution of the Tibetan exile community, centred on the Assembly of Tibetan People's Deputies (parliament-in-exile). He notes that as early as January 1960, the Dalai Lama — barely a year after reaching India — began designing democratic self-rule without abandoning Tibetan tradition. The article documents successive stages: the first elected body (September 1960), the Dalai Lama's voluntary relinquishment of traditional powers, the dissolution of the old assembly in May 1990, and the inauguration of the 11th Assembly in 1991, which made the body a fully parliamentary legislature. Bhattacharjea argues that the exile community's transformation from 'virtual destitutes' to a self-confident, institutionally mature polity is unique in the history of refugee politics, and that the proposed multiparty constitution with separation of powers will serve as the nucleus of a free Tibet's future government. - The Dalai Lama outlined democratic self-rule in January 1960 at Bodh Gaya, barely a year after exile began. - The Assembly of Tibetan People's Deputies took office on September 2, 1960 — observed as Democracy Day — with representatives from all three provincial regions and four religious sects. - In May 1991, the 11th Assembly adopted the Charter for Tibetans-in-Exile, making the government-in-exile a fully parliamentary system with effective powers over the executive. - The Dalai Lama has categorically declared he will play no role in any future government of Tibet, reducing dependency on his personal authority. - A proposed future constitution envisions Tibet as a demilitarised, nuclear-free, environmentally protected state governed by Buddhist economic principles with full separation of powers. ### Political Struggle of the Tibetans *By Prof. Samdhong Rinpoche* Prof. Samdhong Rinpoche, Chairman of the Assembly of Tibetan People's Deputies, sets out the philosophical and strategic foundations of the Tibetan freedom movement. In the rendered pages, he argues that Tibet's cause is neither an ideological nor an ethnic conflict but a universal human responsibility rooted in the Buddhist concept of inter-dependence: because the people of Tibet's spiritual land bear a duty to all sentient beings, liberation is a moral imperative. He traces the movement's three core principles — Truth, Non-violence, and Democracy — and its 'gradual development' from the armed resistance of the 1950s–60s to the fully non-violent civil resistance formalised in the 1991 Charter. Rinpoche recounts failed negotiations with China (Deng Xiaoping's 1979 dialogue, the Five Point Peace Programme of 1987, the Strasbourg Proposal of 1988, and the 1991 offer to visit Tibet), and concludes that China was never sincere; the movement must now consider a Satyagraha ('Insistence on Truth') strategy including civil disobedience and passive resistance, to be decided by referendum among Tibetans in exile and inside Tibet. - Tibet's freedom struggle is grounded in three principles: Truth, Non-violence, and Democracy, with compassion as the motivating force. - The struggle is not against the Chinese people but against the Chinese state's occupation; Tibet's liberation is framed as a universal human responsibility. - The 1991 Charter of Tibetans-in-exile formally renounces all forms of warfare and enshrines non-violence as national policy. - All Chinese negotiating overtures since 1979 are assessed as stalling tactics; the movement must now consider escalating to Satyagraha with civil disobedience. - A proposed 'Tibbat Mukti Sadhana' (spiritual practice for liberation) will be put to referendum among Tibetans in exile and inside Tibet. - Tibet's unique geographical position as a buffer state between India and China, and as source of Asia's major rivers, makes its freedom a matter of regional and global interest. ### United States Congress Resolution on Tibet A reprint of the United States Congress resolution (Foreign Relations Authorization Act, Fiscal Years 1992 and 1993, signed by President Bush on October 28, 1991) declaring Tibet an occupied country whose true representatives are the Dalai Lama and the Tibetan Government in exile. In the rendered pages, the resolution recites a series of 'Whereas' clauses citing UN General Assembly resolutions condemning China's human rights abuses in Tibet (1959, 1961, 1965), the US State Department's 1991 Country Reports on Human Rights Practices, and the February 1992 'Situation in Tibet' resolution submitted to the UN Human Rights Commission. It resolves that the US Government should support the European Community-led resolution on Tibet, vigorously condemn Beijing's human rights abuses in occupied Tibet in international forums, and raise Tibet human rights issues with senior PRC officials. - The US Congress formally declared Tibet an occupied country in October 1991 and identified the Dalai Lama and the government-in-exile as Tibet's true representatives. - The resolution cites three UN General Assembly resolutions (1959, 1961, 1965) condemning China's human rights abuses in Tibet. - The US State Department's 1991 report cited persistent, credible reports of torture, harsh sentences for political activities, and religious and cultural persecution of six million Tibetans. - Twenty-two countries led by the European Community submitted a 'Situation in Tibet' resolution to the UN Human Rights Commission's annual meeting in Geneva, February–March 1992. - The Senate resolved that the US should vigorously condemn Beijing's abuses in all international forums and raise Tibet issues directly with PRC senior officials. ### The Role of Youth in the Struggle for Tibetan Independence *By Yangchen Dolkar* Yangchen Dolkar, Information Secretary of the Tibetan Youth Congress, argues that the TYC — founded in October 1970 and now the largest Tibetan non-governmental organisation with 59 regional chapters and 12,000 members across 7 countries — has become an indispensable political force in the exile community. In the rendered pages, she traces the TYC's evolution from a leadership training ground to a vocal opposition body that critically examines the performance of the government-in-exile. She notes that TYC activism has had a direct echo inside Tibet, where the majority of those arrested by Chinese authorities for political activities are young people trained or influenced by TYC ideology. The essay urges Tibetans, particularly youth, to strengthen communication across the Tibet–exile divide, build solidarity with Chinese dissidents and peoples of East Turkistan and Inner Mongolia, and mobilise mass support to 'SAVE TIBET' before the Tibetan civilisation is wiped from the map of history. - The Tibetan Youth Congress, founded 1970, is the largest Tibetan non-governmental organisation globally, with 59 regional chapters and 12,000 members in 7 countries. - More than half of Tibetan prisoners of conscience detained by Chinese authorities are young people, predominantly aged 25–30 years. - TYC serves as a loyal opposition to the government-in-exile, publicly examining its performance and offering suggestions. - Youth strategy must include outreach to Chinese dissidents and occupied peoples of East Turkistan and Inner Mongolia. - China's internal instability — inflation, unemployment, weakening central control, the Deng Xiaoping succession — creates an opening for Tibetan activists to press their case. ### Tibetan Women: Nose-dive into Politics with Devotion *By Nawang Lhamo* Nawang Lhamo surveys the history of Tibetan women's political activism from the 1959 uprising to the mid-1990s. In the rendered pages, she notes that 30,000 women marched in Lhasa against Chinese occupation on March 12, 1959, and that women inside Tibet in the 1980s concentrated their protests on non-violent principles following the 14th Dalai Lama's Buddhist teachings — with Buddhist nuns leading the first major demonstration in December 1987. The essay then turns to the Tibetan Women's Association (TWA), re-established in 1981, whose international strategy has focused on the 1995 Fourth World Conference on Women in Beijing: TWA lobbied extensively at preparatory conferences in Manila, New York, Helsinki, Vienna, and Copenhagen, fearing that Chinese-controlled delegations would misrepresent Tibetan women's issues. The article was cut off at printed page 20. - 30,000 women demonstrated in Lhasa on March 12, 1959, marking the beginning of organised Tibetan women's political activism. - Buddhist nuns led the first non-violent demonstration inside Tibet in December 1987, setting a precedent for women-led resistance. - Total number of Tibetan political prisoners in 1995 exceeds 450, with women routinely arrested, tortured and imprisoned without trial. - The Tibetan Women's Association (TWA, re-established 1981) has built a global advocacy network focused on the Beijing 1995 women's conference. - TWA fears that China will use the All China Women's Federation to present state-controlled Tibetan women as 'true representatives', suppressing independent Tibetan voices at Beijing 1995. --- ## [Primary work] उदारवाद URL: https://indianliberals.in/primary-works/udarwad-raj-samaj-aur-bazaar/ ### Summary This is a Hindi translation of Sauvik Chakraverti's English primer 'Free Your Mind: A Beginner's Guide to Political Economy', published by the Centre for Civil Society in 2006 and translated by Kaushal Kishore. Titled उदारवाद: राज, समाज और बाज़ार का नया पाठ (Liberalism: A New Reading of State, Society and Market), the book is addressed explicitly to young Indians and first-time voters who, in the rendered pages, are described as having been educated by a state-sponsored curriculum that teaches them to accept socialist premises uncritically. The preface argues that a free society rests on three pillars — political democracy, free-market economic freedom, and liberal education in the value of liberty — and charges that India, ranked 120th on the 1999 World Economic Freedom Index, possesses only the first. In the rendered pages, chapters 1–3 develop the book's foundational arguments. Chapter 1 ('Know Yourself') opens with the claim that the uniquely human capacity for voluntary exchange — व्यापार करने की योग्यता — is what distinguishes Homo Economicus from all other animals and is the root of all economic life.… ### Body ## Summary This is a Hindi translation of Sauvik Chakraverti's English primer 'Free Your Mind: A Beginner's Guide to Political Economy', published by the Centre for Civil Society in 2006 and translated by Kaushal Kishore. Titled उदारवाद: राज, समाज और बाज़ार का नया पाठ (Liberalism: A New Reading of State, Society and Market), the book is addressed explicitly to young Indians and first-time voters who, in the rendered pages, are described as having been educated by a state-sponsored curriculum that teaches them to accept socialist premises uncritically. The preface argues that a free society rests on three pillars — political democracy, free-market economic freedom, and liberal education in the value of liberty — and charges that India, ranked 120th on the 1999 World Economic Freedom Index, possesses only the first. In the rendered pages, chapters 1–3 develop the book's foundational arguments. Chapter 1 ('Know Yourself') opens with the claim that the uniquely human capacity for voluntary exchange — व्यापार करने की योग्यता — is what distinguishes Homo Economicus from all other animals and is the root of all economic life. Chapter 2 ('Population: A Cause of Prosperity') directly challenges the Malthusian consensus in Indian public discourse, arguing that because humans alone can generate wealth through the division of labour (श्रम विभाजन), a larger population is a source of prosperity rather than poverty; the chapter uses urbanisation data and the example of Singapore to sustain the argument. Chapter 3 ('The Failure of Political Markets') opens the introduction to public-choice reasoning, distinguishing private market choices from public or political choices and beginning to explain why political markets systematically fail where private markets succeed. This last chapter was only beginning at the end of the rendered pages. ## Key points - In the rendered pages, the book is framed as a corrective to state-sponsored socialist education, aimed at young Indians who are about to exercise their right to vote. - India's ranking of 120th on the 1999 World Economic Freedom Index is cited in the rendered pages as evidence that political democracy alone is insufficient without economic freedom. - Chapter 1 grounds the entire argument in a single premise: the capacity for voluntary exchange (व्यापार) is unique to humans and is the biological basis of all economic activity. - Chapter 2 inverts the standard Malthusian argument, contending in the rendered pages that population density — not smallness — is a driver of prosperity through the division of labour and the deepening of markets. - The civilisation-as-city etymology (Latin civitas) is deployed in the rendered pages to argue that urbanisation, commerce, and civilisation are inseparable, and that dispersed rural self-sufficiency is 'economic suicide' (आर्थिक आत्महत्या). - Self-sufficiency (स्व-पर्याप्तता) is explicitly condemned as a policy goal in the rendered pages, with the argument that it destroys the specialisation gains that markets make possible. - Chapter 3 introduces the concept of 'choice' as the central problem of economics and distinguishes individual market choice from collective political choice, setting up a public-choice critique that was only beginning at the end of the rendered pages. --- ## [Primary work] What Ails India URL: https://indianliberals.in/primary-works/what-ails-india-by-russi-mody-january-15-1990/ ### Summary Delivered as the 26th Convocation Address at IIT Madras on 8 August 1989 and reprinted by the Forum of Free Enterprise in January 1990, Russi Mody's speech opens with a frank disclaimer that his remarks will be practical and down-to-earth rather than academic. He addresses the graduating engineers as privileged citizens who will bear special responsibility for the nation's future, and urges them to define success not merely in terms of wealth or position but in service to those less fortunate. The heart of the speech is a diagnostic tour of India's chief ailments. Mody names the erosion of national integration — the replacement of Indian identity by regional and communal loyalties — as the foremost problem since independence. He then turns to population growth, invoking Malthus to argue that India's annual addition of 17 million people (equivalent to the entire population of Australia) devours every increment of wealth the country creates, and calls for urgent incentive and disincentive schemes. Corruption is identified as the second major ailment, with Mody stressing that social stigma has disappeared and that both the giver and receiver of bribes share equal guilt.… ### Body ## Summary Delivered as the 26th Convocation Address at IIT Madras on 8 August 1989 and reprinted by the Forum of Free Enterprise in January 1990, Russi Mody's speech opens with a frank disclaimer that his remarks will be practical and down-to-earth rather than academic. He addresses the graduating engineers as privileged citizens who will bear special responsibility for the nation's future, and urges them to define success not merely in terms of wealth or position but in service to those less fortunate. The heart of the speech is a diagnostic tour of India's chief ailments. Mody names the erosion of national integration — the replacement of Indian identity by regional and communal loyalties — as the foremost problem since independence. He then turns to population growth, invoking Malthus to argue that India's annual addition of 17 million people (equivalent to the entire population of Australia) devours every increment of wealth the country creates, and calls for urgent incentive and disincentive schemes. Corruption is identified as the second major ailment, with Mody stressing that social stigma has disappeared and that both the giver and receiver of bribes share equal guilt. Ecology and industrial pollution are flagged as threats to future generations, and the speech diagnoses a pervasive crisis of character and efficiency — a missing work culture — as the root of India's institutional failures across railways, posts, hospitals and airlines. Mody closes on a cautiously optimistic note, crediting liberalisation under the then Prime Minister (Rajiv Gandhi is implied but not named) — lowering of taxes and reduction of controls — for a respectable industrial growth rate and food-surplus status. He argues that political and economic freedom are indivisible and challenges the graduates to carry that message. A final section on management defines credibility as the manager's supreme quality, illustrates with the Duke of Devonshire anecdote, and ends with the Persian proverb about dying with the world in tears. ## Key points - True success in life is defined not by wealth or position but by being reasonably well off, maintaining a good family, and pursuing activities that benefit those less fortunate. - The erosion of national integration — citizens identifying first as Bengalis, Biharis, Maharashtrians, etc. rather than as Indians — is described as the foremost problem since independence. - Population growth (17 million added per year, equal to Australia's total population) devours all economic gains and demands urgent government, industry and voluntary-agency action including incentive and disincentive schemes. - Corruption is described as the second most important national problem; the loss of social stigma for corrupt behaviour is identified as a deeper danger than corruption itself. - Ecology and industrial pollution are cited as rapidly degrading the country for future generations, and must be moved from discussion into action. - India suffers a pervasive crisis of character and efficiency — a missing work culture — despite individual Indians demonstrating world-class capability whenever they operate outside India. - Liberalisation (tax cuts and reduction of controls) has produced a respectable growth rate; economic and political freedom are argued to be indivisible and mutually dependent. - For managers, credibility — built on consistent truthfulness — is the supreme quality; an ounce of practice is worth a tonne of theory. ---