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India Under Nehru and Indira Gandhi

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Soviet cogitations: 882
Defected to the U.S.S.R.: 26 Oct 2004, 02:34
Komsomol
Post 18 Jan 2007, 07:58
What is your opinion of India under the Indian National Congress? Nehru was India's first Prime Minister after independence. He was credited with structuring India's economy in a socialistic manner and was said to have admired the Soviet Union. The Indian economy remained socialistic and planned for a number of years. India still has 5-year plans, much as the Soviet Union did. Indira Gandhi was also seen as socialist and successfully altered the preamble of the Indian Constitution so that it began as follows:

WE, THE PEOPLE OF INDIA, having solemnly resolved to constitute India into a SOVEREIGN SOCIALIST SECULAR DEMOCRATIC REPUBLIC . . .

The words 'socialist' and 'secular' were her addition.

Only recently has India moved more towards capitalism and now describes itself as more in favour of a 'mixed economy' rather than socialism.
"Unpolitisch sein heißt: politisch sein, ohne es zu merken." - Rosa Luxemburg
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Soviet cogitations: 2693
Defected to the U.S.S.R.: 01 Mar 2006, 08:59
Party Bureaucrat
Post 18 Jan 2007, 08:18
I think the Gandhi dynasty (no relation to Mohandas K.) were progressive bourgeois capitalists who wanted to forge a modern secular state much like Kemal Ataturk did with Turkey. I think that they did a good job at that. Like Ataturk and the Armenians, the Gandhis (again, no relation to Mohandas K.) resorted to bloody suppression of minorities towards that goal. I don't think it's possible for a third-world nation to stay on a social-democratic footing in this epoch, which is the age of neoliberalism. Right now, Congress party rules but only with the help of the United Left Front, which has put something of a damper on the neoliberal restructuring business-as-usual.

Wheres Marshal Konev? He is Indian. He might know more.
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"To know a thing you must study it." --Dagoth Ur
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Soviet cogitations: 882
Defected to the U.S.S.R.: 26 Oct 2004, 02:34
Komsomol
Post 18 Jan 2007, 08:25
I've found it interesting that India was rather neutral during the Cold War and at times were clearly pro-Soviet. They bought their weapons from the Soviet Union, received aid from the Soviet Union and conducted trade with them.
"Unpolitisch sein heißt: politisch sein, ohne es zu merken." - Rosa Luxemburg
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Soviet cogitations: 2693
Defected to the U.S.S.R.: 01 Mar 2006, 08:59
Party Bureaucrat
Post 18 Jan 2007, 08:29
During the cold war, Pakistan was aligned with the USA and China, whereas India sided with the USSR (without falling into the Soviet camp per se.)
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"To know a thing you must study it." --Dagoth Ur
Tim
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Soviet cogitations: 1418
Defected to the U.S.S.R.: 02 Mar 2005, 11:16
Party Member
Post 18 Jan 2007, 14:05
Tarun Das, Director General, Confederation of Indian Industry wrote:
We had this huge mass of regulation and controls and bureaucracy. Nehru had come to power and had a huge country to manage and no experience of running a country. The US was busy with Europe and Japan and the Marshall Plan. So Nehru looked north, across the Himalayas, and sent his team of economists to Moscow. They came back and said that this country [the Soviet Union] was amazing. They allocate resources, they give licenses, there is a planning commission that decides everything, and the country moves. So we took that model and forgot that we had a private sector...

That private sector got put under this wall of regulation. By 1991, the private sector was there, but under wraps, and there was mistrust about business. They made profits! The entire infrastructure from 1947 to 1991 was government owned...[The burden of state ownership] almost bankrupted the country. We were not able to pay our debts.

Our Berlin Wall fell and it was like unleashing a caged tiger. Trade controls were abolished. We were always at 3% growth, slow cautious and conservative...Three years later [after the 1991 reforms] we were at 7% rate of growth. To hell with poverty! All those years of socialism and controls had taken us downhill to the point where we had only $1 billion in foreign currency. Today we have $118 billion.
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Soviet cogitations: 2693
Defected to the U.S.S.R.: 01 Mar 2006, 08:59
Party Bureaucrat
Post 18 Jan 2007, 18:51
Tarun Das is, of course, exaggerating. The private sector was alive and well before the 1990s. After all, the world's largest steel concern is Indian. Then you had the Tata Group, as well as endemic television and electronics companies, etc. It was a patriotic and national oriented type of capitalism, is all. Such economies "just wont do" in the post-TINA era.
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"To know a thing you must study it." --Dagoth Ur
Tim
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Soviet cogitations: 1418
Defected to the U.S.S.R.: 02 Mar 2005, 11:16
Party Member
Post 19 Jan 2007, 01:55
Strictly Greggers wrote:
The private sector was alive and well before the 1990s. After all, the world's largest steel concern is Indian. Then you had the Tata Group, as well as endemic television and electronics companies, etc.


Quote:
Tata was a group of companies ill-equipped to deal with the changes about to sweep through India. It earned most of its money in old-fashioned industries that had grown fat during the centrally planned “licence raj”, when the government set limits on how much firms were allowed to produce and protected them from foreign competitors.


It means they are not able to compete with multinationals and operate under constraints. Had Ratan Tata failed to restructure his company following 1991 changes the company would be bankrupt.

Quote:
Tata has transformed the Tata group, of which he is chairman. When he took over from his uncle, J.R.D. Tata, it was a cumbersome conglomerate with stakes in a huge collection of companies that seemed likely to wither in the face of foreign competition. Now it makes foreign acquisitions and ventures into unfamiliar markets.


The shy architect[/url]
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Soviet cogitations: 2693
Defected to the U.S.S.R.: 01 Mar 2006, 08:59
Party Bureaucrat
Post 19 Jan 2007, 02:17
Yes, yes, thus spake the world's preeminent source of neoliberal economic ideology... but that isn't contradicting what I was saying per se...
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"To know a thing you must study it." --Dagoth Ur
Tim
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Soviet cogitations: 1418
Defected to the U.S.S.R.: 02 Mar 2005, 11:16
Party Member
Post 19 Jan 2007, 03:17
It does contradict your statement that the private sector prior to the reform was doing well.
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Soviet cogitations: 2693
Defected to the U.S.S.R.: 01 Mar 2006, 08:59
Party Bureaucrat
Post 19 Jan 2007, 03:56
That depends on whose definition of 'well' we are using. For European bankers? Not so much. For the Indians? It was working splendidly.
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"To know a thing you must study it." --Dagoth Ur
Tim
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Soviet cogitations: 1418
Defected to the U.S.S.R.: 02 Mar 2005, 11:16
Party Member
Post 19 Jan 2007, 07:30
Strictly Greggers wrote:
For European bankers? Not so much. For the Indians? It was working splendidly.


Why not so for European bankers? It's definitely profitable for the American bankers as well. Now they can outsource chains of production at lower cost. Financial firms can invest in India with lucrative yields. Had it not been profitable, Morgan Stanley wouldn't built another office there.
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Soviet cogitations: 2870
Defected to the U.S.S.R.: 16 Nov 2005, 17:55
Party Bureaucrat
Post 19 Jan 2007, 08:42
India generally took a half-assed approach to socialism.

Given India's enormous population and the state that the UK left India in, Nehru devoted most of his attention on tackling food shortages, and developing heavy industry literally from scratch via Five-Year plans, but at the same time, little was done in the way of wealth redistribution; most of the wealth was concentrated in the hands of influential families like the Tatas, Birlas, etc, and their private enterprises.

The Gandhis claimed to be secular and uninterested in continuing existing divisions in Indian society, but in practice, they did little in the way of "separation of church and state", and in certain cases, they almost gave preferential treatment to India's Muslims (through extreme affirmative action, creation of a Hajj ministry, and so forth), which created a dormant Hindu nationalism that would only manifest itself after the Gandhis were gone.

Politically, India practically aligned itself with the USSR, and benefitted from sharing technology and industrial know-how without owing the Soviets anything except their friendship.

Side note: The problem with Tarun Das' statement is that he speaks after the fact. Without the trade controls and protectionist measures taken by Nehru, there would be essentially no industry in India to speak of, because the existing developed nations, except the USSR, would have strangled local industries in their infancy. India engages the world from a position of strength, not utter dependence, because of its protectionism, and because the USSR, a huge trading partner, respecting India's nascent development.
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"History is a set of lies agreed upon."
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Tim
[+-]
Soviet cogitations: 1418
Defected to the U.S.S.R.: 02 Mar 2005, 11:16
Party Member
Post 19 Jan 2007, 09:46
Quote:
Without the trade controls and protectionist measures taken by Nehru, there would be essentially no industry in India to speak of, because the existing developed nations, except the USSR, would have strangled local industries in their infancy.


If it were protectionist policies, then the private sector should had been encouraged, not constrained.

The primary objective of nascent industry is to limit foreign competition and create rules and regulation in favour of private enterprise, such as labour deregulations, financial incentives, etc. What the government did was undermining the confidence in the private sector. The government, through laws, itself became a major obstacle.
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Soviet cogitations: 2870
Defected to the U.S.S.R.: 16 Nov 2005, 17:55
Party Bureaucrat
Post 19 Jan 2007, 10:31
Quote:
If it were protectionist policies, then the private sector should had been encouraged, not constrained.


Protectionist policies do not necessarily have to apply to just the private sector; in India's case, protectionism encouraged the development of public sector industries. Limiting foreign competition allowed many public sector companies (to name a few, Bharat Electronics, Hindustan Machine Tools, Hindustan Aeronautics Ltd., Bharat Petroleum, etc), to exist and to develop. I reiterate, without the trade controls, there would be no such domestic development, in either private or public sector.

Quote:
create rules and regulation in favour of private enterprise, such as labour deregulations


Honestly, how could anyone be in favor of labor deregulation, after the state of serfdom that most Indians were in as a part of Britain's free market order. However, this is another example of how India took the half-assed approach; they did not have the same social progressive (Stakhanovite, if you may) incentive system that the USSR had in the 1930s.

In breadth, the private sector was constrained by the license raj system; this was necessary because for a former colony supporting such a large population, development of the public sector was of much greater importance. However, in depth, I wouldn't say that the private sector was constrained; in my previous posts, I mentioned some big wealthy families like the Tatas, and their corporate empires were huge thanks to Indian protectionism.
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"History is a set of lies agreed upon."
--Napoleon Bonaparte
Tim
[+-]
Soviet cogitations: 1418
Defected to the U.S.S.R.: 02 Mar 2005, 11:16
Party Member
Post 20 Jan 2007, 02:36
Quote:
However, in depth, I wouldn't say that the private sector was constrained; in my previous posts, I mentioned some big wealthy families like the Tatas, and their corporate empires were huge thanks to Indian protectionism.


And they're not competitive thanks to the constraints, which fuelled excessive paranoia.

Quote:
Limiting foreign competition allowed many public sector companies (to name a few, Bharat Electronics, Hindustan Machine Tools, Hindustan Aeronautics Ltd., Bharat Petroleum, etc), to exist and to develop. I reiterate, without the trade controls, there would be no such domestic development, in either private or public sector.


If the long term objective is competitiveness, then the government is still liable to deregulation, be it gradual or whole. I fail to see how the government could even foster competitiveness when the private sector was heavily regulated. And by 1991 the burdened of state ownership was excessive and cumbersome.
Soviet cogitations: 1103
Defected to the U.S.S.R.: 26 Jul 2006, 10:21
Party Member
Post 21 Jan 2007, 07:47
Quote:
I think the Gandhi dynasty (no relation to Mohandas K.) were progressive bourgeois capitalists who wanted to forge a modern secular state much like Kemal Ataturk did with Turkey. I think that they did a good job at that. Like Ataturk and the Armenians, the Gandhis (again, no relation to Mohandas K.) resorted to bloody suppression of minorities towards that goal. I don't think it's possible for a third-world nation to stay on a social-democratic footing in this epoch, which is the age of neoliberalism. Right now, Congress party rules but only with the help of the United Left Front, which has put something of a damper on the neoliberal restructuring business-as-usual.


I don't think Nehru was a burgesois to the core, and neither was Indra Gandhi. Nehruvian SOcialism had a much different vision than the more "traditional" schools in Socialism. But at the core, Nehru was a Socialist. Remember, in India, during Nehru's rule, nationalistic frevour in the country was still strong. All who could participate in the decision making process were still around in the 40s. During British rule, the communist party of India aligned itself closely with the USSR and most Indians perceived the USSR (during the 40s) to be an ally of Britain- the coloniser. So was China. So, this alone killed the popular appeal to the traditional communist parties in India.

In China and RUssia we saw the "corporate (or large scaler mercantile)" class purged. Not so in India. The corporate sector in the areas of manufacturing weren't purged because they were already established and running under the British raj. ANd remember, the country was facing a crippling food shortage. Instead, Nehru tried to tackle this problem differently.

Nehruvian Socialism saw the corporate class (or the large scale private producers) as those who would use economic protection to solidify themselfs and to give them time for preparing to enter the global market, without the exclusivity of the British market that was offered to them during colonial times. However, on the agricultural front, Nehru indeed took strong Socialist steps such as seizing lands from Zamindars (my family were zamindars btw), setting up coops, uniforming wages etc.

Even if large scale private sectors were allowed to operate, Nehru standardised their wages and introduced mass unionisation into the Indian economy. This saw that worker exploitation wouldn't continue.

But the banking system, the railways, the airways, the roadways, etc...and to a large degree- education- was nationalised. And Nehru's legacy saw India establish an indegenous automobile industry. Though the "Hindustan" or the "Pushpak" look bare and "butt ugly" they were designed w/ painstaking care to balance out consumer satisfaction, durability and nationwide servicability. As in, every mechanic in any town could tend to a Hindustan vehicle. This ensured that the automobile industry centered around national development. As in, the more cars that were produced, the employment and business potential for the commoner increased. TO service a Hindustan, a mechanic needed no more than a few tools. Whereas to service an import- you'd need a capital intensive shed. So, Nehruvian Socialism saw that the automobile industry weren't centered around a select few elitists who could afford a capital intensive shed.

Also, Nehruvian Socialism saw national banks establish themselfs in the villages for the first time. The villages also got the benifitted from a national railways initiative. For the first time in Indian history individual villagers could approach banks for small loans and for the first time could villagers access nationwide markets thru the railways system. The Indian Railways was extended nationwide, even to the remotest parts of the country. Also, the provision of free borewells, the formation of coops were all legacies of Nehruvian Socialism. Considering that 80-90%+ of the Indian people lived in villages, Nehruvian Socialism tended to the villages a great deal.

Likewise, Nehruvian Socialism protected the corporate class because they had a traditional strength in their access to the global market during colonial times. However, the exclusivity they got to the British markets were denied after independence and Nehruvian Socialism extended to the corporate class- a domestic market, that was secure. This was done in order to give them solidity. However, the corporate class became complacent and never really undertook their designated task: which was to surge Indian products abroad. Instead, they just slept under protectionism and took the domestic market for granted.

Most PSUs, for example in non communist run states would implement their initiatives thru the large private sector. The PSU would fund and designate purchase orders (ex: for building roads, hospitals etc) to the private sector players.

Also, on the political front, remember, India is a multi party democracy. This was done to appease the vast amounts of diverse populations our nation encompassed and to make sure no locale would get singled out from the national decision making and planning processes. This gave much rise to regionalism, which eventually led to ethno nationalism. After the first few years of independence, the Congress-I lost its power base in many states and was replaced by regional parties. After the 50s, in Tamil Nadu, for example, the Congress-I rule was replaced by the DMK's- a regional state centric party.

Regionalism resulted in frequent bickering when it came to national initiatives. For instance, Karnataka would often bicker about releasing water to Tamil Nadu. Assam would bicker about releasing excess power to West Bengal. The regional parties banked on sensationalism and to a large degree, encouraged regionalism (versus nationalism) to gather popular support. This was no doubt, exploted by the corporate class.

During Indra Gandhi's period, the lady surely had it tough. She had to deal w/ a complacent large scale private sector. And a stagnating public sector (most PSUs executed their initiatives thru the large scale private sector). If you have this scenario, bureaucratic corruption will surely be a "complementary" add-on. On the external front, you had Henry Kessinger calling Indira Gandhi a "bitch" and the US gov was contemplating setting up a naval base in Sri Lanka. Then, you had the Khalistan problem. Many problems. It was a bad situation.

Indira Gandhi tried to counter all these issues by declaring emergency. But at the time, the "system" was already pretty corrupt. While everyday bureaucratic corruption was curbed, and the PSUs and corporate sector did become more active, many key players in her regime ended up abusing the powers entrusted to them. The massacare of the SIkhs during "operation bluestar" is an un-erasable blot in our nation's history.

After Indra Gandhi's death, the complacency returned, the corruption resumed and as a darker legacy, whatever public accountability that existed before emergency was removed...and was never reinstated.

Nehruvian Socialism is a noble goal, and thought out by a worthy leader. The political system of the country wasn't condusive to the success of Nehruvian Socialism. Had our leaders envisioned nationwide issue based politics (need not be centralised) instead of 5 year elections, NEhruvian Socialism would've succeded. For example, if a townsman got a chance to vote for whether he wanted a hospital or school, rather than who'se going to be the next municipal chairman, such conditions would make Nehruvian Socialism succeed.

To put it simply, if you replace a bike seat with a commando knife and mount the bike and complain of a rather uncomfortable ride, the fault is not with the bike or with the commando knife. It's just that 2 un-complementary things were fit together, which wouldn't give a desired result.

In addition, the ENTIRE corporate sector should've been nationalised, after it became obvious that the corporate class wasn't interested in national development and were more interested in cozily reaping profits in a secure and protected economy. To highlight corporate complacency, look at the automobile industry. We made a world class luxury car: The HM Contessa.

But Hindustan Motors never even attempted establishing a market for it worldwide, even when you have WAY more inferior makes such as the Hyundai Accent, the Ford Ikon, the Proton, the Vira etc., doing well in international markets. Instead, they just sleepishly sold to the local market, and when the economy opened up, scrapped the product and settled for doing job work for Mitsubishi


We had a very strong beverages industry here. Many Soviet friends of mine had a strong love for limca. Yet, the makers of Limca never even attempted establishing a market for it worldwide. They had an established infra. At the same time, you now have MUCH INFERIOR producers like MEcca Cola (Iran) making HUGE penetrations into the Middle Eastern and European markets!

Also, the SOcialist system of a country, on an international level is largely dependent on its global repute. In capitalistic systems, repute is replaced by money. If I was say, a leader of a resource rich nation, and wanted to ally w/ a Socialist country, I'd ask "how much are they willing to rally behind their allies?" If I were doing the same w/a capitalistic country, I'd ask "how much money can they bring us?"

On this count, we failed miserably. We were Nasser's chief ally. Yet, when the Israelis pounded his military, we did nothing and meekly observed. We should've never shaken hands w/ Nasser. And if we did, we should've sent in intervention troops when he was getting trounced, just as the PRC did to the DPRK in the 50s.

And lastly Socialism in India and in PRC / USSR were not on the same wavelength. Indian Socialism was loosely modeled behind Tito's system in the Balkans.
Soviet cogitations: 1103
Defected to the U.S.S.R.: 26 Jul 2006, 10:21
Party Member
Post 21 Jan 2007, 07:50
Quote:
And they're not competitive thanks to the constraints, which fuelled excessive paranoia.


The large scalers were given protection in order for them to enjoy a secure market, from which they could establish themselfs and enter the global market. The fact that this didn't happen implies that the corporate sector in the country became guilty of complacency. They should've been nationalised and handed over to the people.
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