The Rise and fall of Socialism in India !

It was 1991 and Manmohan Singh was on his path to history. He was preparing with a great deal of knowledge and research backed enthusiasm , the New Economic Policy- a set of path breaking laws which meant India would move away from a Socialist-leaning mixed economy to a semi-capitalist economy ! That meant a lot at that time, and still does, as we look at it 18 years down the line !

India is finally recovering from the wounds it acquired in the colonial era and left unattended during the long decades after it !

So why am i suddenly talking about this ? I am because of a recent eye opener i had in the form of a book called “Imagining India" written by Nandan Nilekani and more recently, I had a snub from Vijayan Sir. While the former taught me the importance of capitalism and globalization as a phenomenon all over the globe, and especially India, the latter showed me how deep Socialism is rooted into the blood of millions of Indians!

Lets start with the background of Capitalism vs. Socialism! 19th Century was marked by European Imperialism over the rest of the World where they settled in their colonies. By the end of this age of imperialism, two new schools of economies started coming into picture - Capitalism & Socialism. While Capitalism evolved in the Western world, essentially USA, the latter was a distinct Eastern World Concept. The two were similar in that they both denounced Imperialism. The difference lay in that Capitalism advocated the rise of an economy by the efforts few enterprising men termed entrepreneurs, while Socialism preached the social development of a nation with emphasis on equality of all men. The 20th Century saw the rise and fall and a series of face-offs between Capitalism and Socialism in the form of the Soviet-USA cold war and finally as the century was drawing to a close, Socialism finally fell with the fall of the Soviet Union.

India post independence had strong reasons to lean towards the left i.e. Socialism. It had suffered at the hands of British imperialism for two centuries. Our policy makers then did not see much of a difference between the newly rising concept called Capitalism and the vulgar imperialism of the British .It didn’t help either that just when capitalism was rising, the Great Depression of 1930 shook the capitalist nations of the World. India though, couldn’t become a Socialist Nation because of the Global affairs of that time (the British, allies of capitalist USA , didn’t want to lose India over to the Soviets). So just like Nehru always did with everything right from Non Alignment movement, he came up with his own new gang called “Mixed Economy”, though in essence, India followed a populist Socialist principle.

Nehru with his charisma and respect did a lot to keep criticism on India’s rising corruption and economy spiraling down at bay. However when his corrupt daughter Indira rose to power, the country first saw the implications of Socialism on their daily life. Their dreams were narrowed down to the basic necessities of life. While the rich grew richer, the poor grew poorer quite against the promises of their government. No benefits to the upper class trickled down to the lower classes as were supposed to. And the redistribution of assets, an essentially socialist idea, was a big joke when the money to be redistributed evaporated into thin air and the richer got it back from elsewhere. The educated didn’t have jobs and the uneducated didn’t know how to earn a living except start their own businesses. The Government did not encourage people having independent businesses unless of course they were big enough to tame the govt. itself. Thus it was a cycle in which the Indian economy was trapped-Unemployment and restrictions on self-employment. This story continued until 1991.

1991 was a landmark year for the World and specifically for India .No ,not because I was born. Because the Soviet fell (and Socialism with it), the Gulf War erupted in the Middle East( which meant India would have to pay a fortune for getting oil) and India finally decided that with a exceedingly regulated or rather restricted closed economy, providing the people of the nation with basic necessities would be impossible. Oil prices were sky rocketing and India’s debt position with the World Bank was at a very sorry state of affairs !

It was under these circumstances that Manmohan Singh, the then Finance Minister took a bold step towards Capitalism , Globalization and liberalization opening India’s gates to Foreign Investment, to ambitious entrepreneurs and thus to a brighter India . Since then India’s fortunes have suddenly seen a reversal and India is undoing the tangles of the past ! Until 1989 , Pakistan beat India in almost all respects and now 20 years later, India is miles ahead establishing itself at the top of the World’s fastest growing economies ! All this due to the growth of Capitalism and Private Sector in India !

The growth of the private Sector in turn made the Public sector a lot more efficient . For instance, with the rise of a Jet airways, Indian Airlines bettered its services and with the arrival of an Airtel, BSNL improved its customer satisfaction. Around the same time, India found its long searched “strength”- Information Technology thanks to one man called Rajiv Gandhi. IT in India has empowered India and given it a huge foundation to build its growth on ! IT in today’s scenario is an important tool to check corruption- one of the wounds that is still hurting India.

Today , India is a well regulated free market economy ! The huge advantage this kind of an economy has was seen recently when India thanks to its strong regulations on the banking sector remained insulated from the worst part of the Global Recession!

With greater encouragement and rewards for entrepreneurship, the job market will automatically see an upsurge.

This in essence describes why India's shift to capitalism is a thing to cheer about and not complain about as Vijayan does. Today,even the inventors of socialism (read Russia and China) are predominantly captalist . Why, in India, even the CPI(M) ,India’s largest outright socialist party, were recently seen fighting to setup the TATA Nano plant in Singur-Socialists fighting for capitalism ! Ironical Indeed !

-From A-socialist-turned-capitalist-and-globalization-supporter !