Academic journal article Social Justice

India in the South Asian Context

Academic journal article Social Justice

India in the South Asian Context

Article excerpt

Introduction

The unbroken record of parliamentary government with fair elections held at regular intervals in India since 1947 is matched only by Sri Lanka in the Third World. India's achievement is more noteworthy in view of the extreme diversity of religious, linguistic, caste, and ethnic groups in the country. The planning strategy pursued by successive governments till 1980 was basically the handiwork of nationalists during the colonial period; despite many drawbacks, the Indian economy attained a moderate rate of growth and a remarkable degree of autonomy vis-a-vis the external world; despite a "special" friendship with the USSR, India did not alienate the West altogether. In all these respects India was unrivaled among the Third World countries, and it helped her, apart from the sheer size of the nation, to play a leading role in the North-South dialogue on the creation of a "new international economic order." While many nations in Latin America, sub-Saharan Africa, and Asia were convulsed by the debt crisis of the 1980s, India up to 1990 stood apart and witnessed accelerated growth.

Abruptly, in the autumn of 1990, everything changed for India with the collapse of the non-Congress government under V.P. Singh elected barely one year earlier; no stable alternative was in sight. The country's international credit rating plummeted, short-term loans worth a few billion dollars were not renewed, and India was on the verge of defaulting on her payment obligations. By mid-1991, the new Congress government surrendered its economic sovereignty to the International Monetary Fund and the World Bank and introduced far-reaching changes.

This article explores in the first three sections the political economy of development in chronological order. The next three are devoted to political issues that have reached threatening proportions in the recent past, almost paralyzing the political process. The most serious challenge since independence to the integrity of the country was triggered by the destruction of the 465-year-old Babri Masjid by Hindu fundamentalists on December 6, 1992. In addition, the Kashmir problem, a festering wound on the whole subcontinent since 1947, has acquired a new urgency in view of the dogged determination of the people in the valley to win the right to self-determination and the intensity of Indian military oppression. How will the Indian polity respond? Whatever happens will deeply affect politics and economics in the region. In this context, the question of South Asian cooperation in a world increasingly segmented into rival trade blocks is explored at the end.

Planning in India, 1950-1980

The early leaders of an independent India led by Nehru began with a vision of making the country economically self-reliant and prosperous, while reducing vast socioeconomic disparities within the nation. The broad outlines of policy were sketched out by the National Planning Committee (NPC, 1938), consisting of leading politicians, industrialists, scientists, economists, and social workers. The industrialists also formulated their Bombay Plan (1944-1945). The latter is surprisingly progressive by today's standards; it not only applauded Soviet planning and emphasized the organic link between production and income distribution, but also ended with a long quotation from the concluding pages of Pigou's Socialism Versus Capitalism that called for "gradual nationalisation of important industries.... Gradualness implies action, and is not a polite name for standstill" (Bombay Plan: 26, 68, 84-85, 101; Pigou, 1937: 137-39).

On many concrete issues, the NPC and the Bombay Plan concurred, e.g., on heavy engineering as the "foundation of all planning," on achieving full employment through small industries, on steeply progressive taxation as "gross inequalities [tend] to retard development," and on state control over private industries, wages and working condition, prices, dividends, etc. …

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