Why India chose the so called Nehruvian Socialism?

Jawaharlal Nehru was greatly influenced by the achievements of Soviet Planning.  Since he also viewed democratic qualities of capitalism as indispensable for complete economic and social growth and since he wished to take advantage of both, he came out with his vision of so called “Democratic Socialism” for new India. Ideally, the democratic socialism was to not only check the growth of monopolistic tendencies of the private sector but also provide freedom to the private sector to play for main objective of social gain rather than economic gain.

Another feature of Nehru’s planning philosophy was “Democratic Collectivism”, which emphasized on planning by consensus. Nehru had a genuine concern about the need for a peaceful transition through consensus in the development process in India. The emphasis was on “Social” implications of the economic ideas along with wider national and international lines. The “Democratic Socialism” and the “mixed economy’ demanded equality of opportunities for all and it was the basic theme. Nehru’s vision of a technologically progressive India was also inspired by a socially inspired process of integrating the technology with the modern methods of agriculture and production.

Why India chose the so called Nehruvian Socialism?

Generally, it is said that socialism was the dominating economic thought after the World War II and this was the reason that India also chose this path. However, this is a myth. In fact, in those days, those who were in favour of the free enterprise system vastly outnumbered their opponents favouring states control. Indians had consistently opposed the state controls imposed by the British. They protested the regulations of the textile industry, taxes on goods such as salt, opposed setting up of the Reserve Bank of India and opposed pegging of Indian Rupee with Pound Sterling.

The reason to why India chose the path of socialism are more political than economic and go back to the British Era. On the basis of the views on economy, the congress leaders of those times can be divided into three groups.

• First group, who eventually were in majority, were called capitalists. The leaders of this group included leaders such as Rajendra Prasad, Sardar Patel and C Rajagopalachari.
• The second group can be called This group included Ram Manohar Lohiya, Jai Prakash Narayan and Acharya Kripalani.
• The Third group consisted of Jawahar Lal Nehru and some other leaders. Although Nehru later called himself a socialist, he was labelled as a ‘radical’ and a ‘Marxist’ by the press of the day. Marxist-derived ideas were at the heart of the economic thinking of leaders such as Jawaharlal Nehru.

• The economic thought of the above mentioned second group of socialists was not something related to the ‘communist’ or ‘state-control’ but an economy containing cottage industries run by cooperative societies. That is why; this group opposed the communists and also raised its voice against Nehru when they got a clue about the economic policy of the Congress.
• After the demise of Sardar Patel and elevation of Dr. Rajendra Prasad to the office of the President, Nehru got a free reign and the first thing he did was to create a Planning Commission on the lines of the Gosplan of the Soviet Union. He imitated the Soviet Union by drawing up Five Year Plans. At the time of drafting the first Five Year Plan, Nehru was ambivalent and talked of a mixed economy that would accommodate the private sector.
• However, later he progressively implemented his plan to usher the country in an era of socialism. In Mid 1950s, Nehru got Parliament to accept the “socialist pattern of society” as the aim of economic development, and at the Avadi session of the Indian National Congress (1955), the resolution now known as the Avadi Resolution was passed. This resolution called for establishment of a socialistic pattern of society where the principal means of production are under social ownership or control and there is “equitable distribution of the national wealth.” This was followed by the Industrial Policy of 1956 in which only the government was permitted to undertake new ventures in several sectors such as textiles, automobiles, and defence. For the private sector the policy said that the state would “progressively participate” and would not “hesitate to intervene” if it found progress to be “unsatisfactory.” The second five year plan was based on the Industrial Policy Resolution of 1956. This plan asserted the economic goal as the socialist pattern of society. The economy was now modelled after that of the Soviet Union. The private individuals were deprived of the right to indulge in many forms of commercial activities. The government policies of the 1950s and 1960s transformed India into such a socialist country in which all the flaws of socialism took root.

Did Nehru’s philosophy truly embody the Democratic Socialism and Collectivism?

Nehru’s Planning philosophy was branded “democratic socialism” but in practice, it lacked the proper objectives, priorities, strategy and budgeting which are fundamental themes of the socialistic planning. The basic approach in the socialistic economy is that there is a control of the means of production and distribution. But it was not done right from the beginning and with passage of time new capitalist hold strengthened in the form of foreign aid and collaboration. The adverse impact of the philosophy was seen in the Public sector companies which became sick soon due to mismanagement and corruption. India’s power generation got erratic during the first few five year plans and power generation was not considered to be the lifeline of India’s progress in initial decades. The result was that India stagnated until bold neoliberal economic reforms triggered by the currency crisis of 1991, and implemented by the then government.

Comparison of Planning Philosophy of Nehru and Bose

When Subhash Chandra Bose was congress president, he had appointed Nehru as chief of National Planning Committee in 1938-39. The basic difference between the philosophy of Nehru and Bose were that while Nehru was inspired by the planned economy of Soviet, Bose wanted a controlled economy. The thought of Bose were with dictatorial tendencies and reflected in his political and economic thoughts but Nehru was inspired by the “democratic collectivism” and he thought that it was always good to take all the sectors together. He was only partially successful during his era.