Sunil Bhandare on Getting Disillusioned With Socialism and His Journey to Become A Liberal

Source: https://www.youtube.com/watch?v=3S_AFbaYqZs Duration: 685.6s

Sunil S. Bhandare (00:06): I was working with the Reserve Bank of India from 1962 to ‘67. We were under tremendous influence of Nehruvian ideology and that was quite natural because the surroundings in the Reserve Bank of India was typically supportive of that kind of a thought process. And for us, we were being told during those days that at the age of 20, if you are not a socialist, you need to examine your heart. And therefore, all of us were typically emotionally being driven. We were more guided by the socialist thought process. My journey towards liberal thought came very much later. Till about 1974, I was typically a socialist minded in thought process. In 1967, I joined Tata’s. Although in my early stages of career, I would have probably been influenced by what the private sector is trying to do. And there was giants like Mr. Palkhivala, and we used to hear about A. D. Shroff, we used to hear about the Forum of Free Enterprise, Mr. M. R. Pai. And I used to attend some of their public meetings, but nevertheless, I never got really impressed by what was being done there. And I used to read Economic and Political Weekly and those those were the days when Economic and Political Weekly used to be quite attractive for us. Also, my colleagues from the university, they were also by and large of leftist orientation by and large. And although there were couple of professors like Professor Brahmananda, C. N. Vakil, they had a different thoughts even on the second five year plan for example. But nevertheless, I think we never got very much sort of impressed by the liberal thought process. And I never got even in fact, you will be quite surprised that 1969 when bank nationalization took place, we were the ones who sort of appreciated that kind of a state while working with Tata’s and that was quite, I mean, in tune with the prevailing scenario. Then the whole process went on till about the emergency was declared. Around that time, we started reading about what is going wrong with the public sector enterprises, how the third five year plan has failed, and then how the plan holidays are getting announced, planning commission was not becoming effective. Then the Nehruvian ideology gradually was losing some kind of an appeal for the youngsters. So somewhere around after that emergency, we started thinking about different thought process and that’s how the liberal thought process sort of started guiding my own thinking. And then, I got in touch with Raju and then also the Forum of Free Enterprise and that’s how the the influence started gathering momentum. And then I started also addressing some of their public meetings on very interesting, but not necessarily deep thinking kind of public meetings. So gradually, we started feeling that there is nothing great about the erstwhile socialist thought process, it has not done anything for the last previous twenty years since the beginning of five year plan. And therefore, I think we need to think in terms of something which is better alternative for the for the economic system. We started analyzing what what is going wrong with the public sector enterprises and then there there was a Professor B. R. Shenoy’s wonderful speech and articles on the public sector vestige wherein he tried to sort of articulate how the public sector has not done the kind of things which were expected. But here are fundamental issues also and those fundamental issues about public sector is not the thing which is right for this for this economy. The the the idea of government is needs to be quite different. It has not to be in the business. The the business of the government is to do the governance and not to be in the business. So those ideas started attracting our attention, and we started believing in those ideas. Now, we also saw that private sector by and large has started doing lot of good things and having worked with Tata’s and then that was a interesting experience because before the reforms process started, we were used to sending the memorandum to the government and memorandum on what issues on licensing policy, memorandum on Monopoly Restrictive Practices Act and it will be quite sort of people would not believe that during those days a group of enterprises which had asset together of 100 crores were considered concentration of economic power. Now, are small medium sized companies nowadays which invest 100 crores. But during those days Tata Steel, Tata Motors, Tata Chemicals, all these companies got interrelated. And by virtue of their interrelationship, they became a monopoly house. And being a monopoly house, we used to approach the monopolies commission whenever the applications were being made for some industrial license. The classical example was when Tata Steel wanted to expand its capacity, I believe from 2,000,000 tons to 3,000,000 tons for that extra 1,000,000 tons you have to your application used to be held up, it used to go through the licensing committee from licensing committee to monopolies commission and the whole thing oftentimes gets scuttled. There never used to be things which were granted easily. Similarly, when the Tata Motors wanted to expand their capacity, I thought it was 12,000 numbers they were producing commercial vehicles and they wanted to increase it by another 8,000. There was a whole lot of capacity in terms of infrastructure which was there, but the Tata Motors was denied that. So those were the days and you know during those time I think the JRD Tata, the chairman of the Tata Group used to write in his chairman statement stories about how the companies have been denied the opportunities of expansion and growth. In fact, he wrote on the question about entire pricing policy for steel. And that pricing policy led to, of course, creation of black market in the steel sector. But the companies were denied the opportunities of generating enough of profits by pricing the steel depending upon the market conditions. And he said that if they were given the right kind of prices, probably the Tata Steel would have been able to expand its capacity multifold. And we were importing steel, and the domestic producers were denied the opportunities to expand their production only because there will be so called concentration of economic power. Effectively that kind of a system created huge opportunities for black market use. And there used to be queues as many people would be aware, queues for cement bags to be made available, steel supply being made available for construction activity. Then there is a shortage of two wheelers. People used to stand in the queue for eight years. And my own personal experience about my telephone. My telephone, I I made an application, it took seven years for us to get the telephone. And when we got the telephone, we actually did a Puja of that telephone. So those were the days of pre liberalization period which was dominated by particular thought process. That thought process was based on the economic ideology of democratic socialism. That democratic socialism did not deliver anything for the common man, for to the consumers at large, it did not create job opportunities, it created all sets of inefficiencies and corruption and all these questions about the black money in generation used to happen during those days through this whole process. So, that was complete disillusionment about the system, the disillusionment about the model of economic development which we had chosen. And we believed in that model only because it it came down from Pandit Jawaharlal Nehru and everybody fancied him so well, so much, and that was his legacy. Of course, contribution number of other years is remarkable. But in the economic philosophy of this country and economic planning and strategy, I think he did not do right thing. He could not envisage what could happen by the kind of economic system he was trying to give to the country. So that was the story about how we moved towards different thought process, namely of liberal economic thinking. But you see, I think I mean, this was a good process. You started experiencing yourself and learning by experience you came to realize that what was being done was not correct and therefore after you realize that your earlier thought process has to be evolved and you cannot stubbornly held hold those earlier views you know in a in a dogmatic fashion. So, we became more practical and we started learning by experience and we became more oriented towards the to towards the right kind of economic thinking. I am not saying liberal economic thinking, right kind economic thinking, because liberal economic thinking eventually has proved to be the right economic thinking.