Special
Feature: Rashtriya Ekta Diwas (31st October)
Sardar
Patel’s Birth Anniversary
Sardar
Patel’s Economic Ideas
*Puja
Mehra
Sardar Patel
dominated Indian politics from 1917 to 1950. First, he was at the forefront of
the freedom struggle. Then, after Independence in 1947, as Deputy Prime
Minister, he held the crucial portfolios of Home, States and Information and
Broadcasting. The ‘Iron Man’ and a founder of modern India, he restructured the
Indian bureaucracy after the transfer of large number of officials to Pakistan,
integrated the princely States into the Indian union, and had an important role
in shaping the Indian Constitution.
Following
territorial consolidation, the immediate goal was for the Government,
industrialists and labour to participate in a great national effort for
recovery and reconstruction. The objective was to bring an improvement in the
living standards of countrymen. The British had taken what they had to, leaving
behind, in his words, only their statues. Many of the instruments of economic
control that had been put in place by the British government to gear the Indian
economy towards the war effort were still operating. So, imports remained
severely restricted, and foreign currency earned from India’s exports for the
war had still not been transferred by the Bank of England to the Reserve Bank
of India. As a result, a sizeable sterling balance had accumulated, but
war-damaged England was in no position to settle the dues. Inflation had
spiralled out of control. Speaking at the meeting of Indian National Trade
Union Congress (INTUC) at Indore in May 1949, Sardar Patel declared his
intention of rejuvenating the Indian economy. He said, “Our long period of
slavery and the years of the recent war have drained the life-blood of our
economy. Now that we have taken over power, onus is on us to rejuvenate it; new
blood has to be poured in drop by drop,”
Partition added to
the vulnerabilities and thus restoring business confidence was paramount. Ahead
of Partition, Calcutta’s worried businessmen had wanted to move out of the city
that they had operated out of for generations. Sardar took the lead in
dissuading them and asked them to stay on. He said in Kolkata, “I advised them
to stay on because I was certain that no power on earth could take Calcutta
away from India.” The factories there had been dependent on jute grown in what
was now Pakistan. The neighbour refused to honour agreements; even jute that
had been paid for in advance was not delivered. Sardar Patel realised that
India had no time to lose and gave a call for self-sufficiency. Speaking at a
public event in Delhi in January 1950, he asserted, “If they cannot guarantee
to implement agreements, we had better not depend on them. Let us grow the jute
and cotton and the food grains we need.”
Sardar Patel’s
thoughts and approach to India’s economic challenge were shaped, to a great
extent, by the historical setting at that time and also by his role of a
nation-builder and a founder of India’s political democracy. Self-reliance was
among the chief tenets of his economic philosophy, on which, his views were
closer to those of Pandit Nehru than Mahatma Gandhi’s, who championed
self-sufficiency at the village level. The role he envisaged for the government
was that of a welfare state, but realised that other countries had taken up the
task at more advanced stages of development. He was unimpressed with the
slogans raised for socialism, and spoke often of the need for India to create
wealth before debating over what to do with it, how to share it.
Nationalisation he rejected completely; clear that industry ought to be the
sole preserve of the business community. Nor was he a great believer in
planning, especially of the kind practised in the developed and industrialised
countries.
He was not for
controls. The indifference was, in part, because there simply wasn’t enough
staff to implement them. He was working with an administration capacity
depleted owing to the departure of a disproportionate number of officers that
had opted to go to Pakistan and the posting of senior civil servants in the
newly-established embassies across the world. Addressing the Chief Ministers of
the States in April, 1950 he said, “We run the administration of the country
with one-fourth of the service which was in existence when we took over. Fifty
percent of the people whose presence was enough to keep law and order and make
subordinates work with efficiency, and even overtime, are gone.”
To him, the profit
motive was a great stimulant to exertion, not a stigma. He wholly approved of
it, and advocated it for even the non-capitalist classes, the middle classes,
the labour and even the agriculturists. That does not mean he did not recognise
concentration of wealth as a social problem and unethical. He did, and in fact,
appealed for a higher sense of civic consciousness and national duty to
transcend all motives. His argument was that it was not merely ethical and
patriotic, but even economically pragmatic, to channelise hoarded wealth in
economic undertakings, where the returns were certain to be richer. Besides,
what good could the stashes be if the country’s economic problems led to chaos.
He constantly advised against greed. To the labour, he said, participate in
creating wealth before claiming a just share, and advocated Mahatma Gandhi’s
philosophy on labour- employer relationships. The Mahatma’s
methods, he said, could bring labour its legitimate reward through
constitutional means.
He wanted to see
India industrialise quickly. The imperative being to reduce dependence on
external resources. A modern army required equipment that only machines could
produce: apart from arms and ammunition, uniforms and stores, jeeps and motor
cars, aeroplanes and petrol. But machinery was not going to solve the “great
disease” of idleness in the thickly populated country. “Millions of
idle hands that have no work cannot find employment on machines”, he said
while while addressing the Chief Ministers’ meet in April 1950. Being primarily
a farming country, agricultural revival was of primary importance. His promise
to industry was for no “impediments, bottle-necks or red-tape” as he said in a
radio broadcast on Pandit Nehru’s birthday 0n 14th November
1950.
In the same
broadcast, he championed investment-led growth and said, “Spend less, save
more, and invest as much as possible should be the motto of every citizen.” He
appealed to every segment of the society - lawyers, farmers, labours, traders,
businessmen and government servants for saving every ‘anna’ that could be
spared and to place their savings in the hands of the government for
utilisation in nation-building enterprises. In the same address, he emphasised
on saving every spare penny and said, “We must have capital, and that capital
must come from our own country. We may be able to borrow from international
markets here and there, but obviously we cannot base our everyday economy on
foreign borrowing.” This was a call for voluntary savings, and for savers to
choose their preferred means of investment.
Sardar Patel’s
approach was balanced, pragmatic and liberal. Economics was an “intensely
practical science” for him. Short cuts and arbitrary policies of temporary palliatives
or artificial reductions in prices or stimulation of investment were not
acceptable to him. He wanted Indian economy built on surer foundations of
increased production, industrial and agricultural, and increased wealth.
*****
*Puja
Mehra is a Delhi-based journalist.
Views
expressed in the article are author’s personal.