PLURALISM & MIXED ECONOMY — A BASIS FOR CENTRE-STATE RELATIONS

By V. K. Narasimhan

Summary

Delivered as the A. D. Shroff Memorial Lecture at Bangalore on 27 October 1977 and published by the Forum of Free Enterprise in February 1978, V. K. Narasimhan’s pamphlet argues that India’s tangled centre-state relations cannot be resolved by clinging to any monolithic ‘ism’. Speaking in the immediate aftermath of the Emergency, he treats the rise of the socialist creed since Nehru’s time as having so thoroughly subordinated individual freedom to the goal of equality that constitutional checks, federal balance, and the private sphere of voluntary action have all been hollowed out. Against this drift he sets a ‘pluralist approach’: the federal architecture of the Constitution, the diffusion of power among states and groups, and a genuinely mixed economy in which the private sector is treated as an affirmative good rather than a ‘grudging’ admission.

On centre-state relations, Narasimhan reads the 1967 elections as the moment when the unitary illusion of a single dominant party broke down, leaving the country with a permanent pattern of governments of different complexions in different states. Rather than treating this as a calamity, he argues it should force the centre to devolve real fiscal and policy responsibility — particularly in agriculture, health, education, transport and irrigation — and to confine itself to coordination, allowing each state to set priorities suited to its own backgrounds and resources. He warns that the centralisation of finance has so eroded states’ initiative that they now spend more energy extracting funds from New Delhi than husbanding them.

On the economy, he indicts the steady expansion of the state-owned sector — insurance, electricity, road transport, banking, trade, and the standing threat of further nationalisation — as ‘hardly conducive’ to a democratic order. The framework of democracy, he insists, requires a genuinely mixed economy and not a predominantly socialised one; every addition to the state sector must be independently justified, never assumed. Examples drawn from the Voluntary Health Service and the Public Health Centre at Madras illustrate how voluntary, group-based action can serve public needs more imaginatively than monopoly state provision.

Narasimhan closes by invoking Gandhiji’s vision of self-sufficient village communities as the ‘pluralists’ paradise’, conceding that industrialisation and urbanisation make that ideal utopian, but urging that its spirit — the deliberate diffusion of power and the encouragement of voluntary cooperation — be carried into a modern, multilingual, multi-religious India.

Key points

• Frames the lecture as a tribute to A. D. Shroff, whose 1956 founding of the Forum of Free Enterprise meant ‘swimming against a strong socialist current’ that was both fashionable and entrenched in public policy.

• Identifies the over-readiness with which the socialist credo was accepted as the root cause of the neglect of individual freedom and basic human rights in post-Independence India.

• Reads the 1967 general election as the watershed that broke the ‘unitary’ overhang of one-party rule and made a genuinely federal, pluralist Centre-State pattern unavoidable.

• Argues that the constitutional distribution of powers between Centre and States is only ‘quasi-federal’ and that this bias toward Delhi has produced excessive centralisation of economic policy, planning and finance.

• Calls for devolving primary responsibility for agriculture, health, education, irrigation, road transport and urban development to the states, with the Centre confined to coordination and advice.

• Treats the continuous expansion of state-owned sectors — insurance, electricity, road transport, banking, trade — as ‘hardly conducive’ to democracy, and demands that every enlargement of the state sector be positively justified.

• Defends the citizen’s Fundamental Rights under Chapter III as a ‘strong and lively’ check on abuse of state power, but insists vigilant public opinion matters more than recourse to the courts.

• Reads the Emergency of 1975-77 as proof that ‘the masses have been willing to sacrifice liberty for security’ and that the slow, inefficient workings of democracy create their own corruptions which authoritarianism then exploits.

• Recovers Gandhi’s emphasis on voluntary, cooperative activity at the widest possible scale as the pluralist core of an Indian liberalism adapted to a multi-lingual, multi-religious nation.

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