H C Singh

Decline in Indian Economy During Nehru’s Socialism From 1951-52 to 1965-66

The study is based on the book “India The Emerging Giant” by Arvind Panagariya, particularly the statistics provided therein Indian economy seems to have been led by Demand-Supply principle from 1951-52 to 1987-88 so it suffered particularly upto 1965-66. Connection Patris analysis has been followed to an extent half heartedly.

In this connection it will be pertinent to quote from Arvind Panagoriya book ‘India the Emerging Giant’ as under:

‘Demand verses Supply- If the economy is demand led the development and progress is slow. “Therefore the success of demand driven approach often depends on the governments taking necessary action to relieve the bottleneck stiffing the supply response” Accordingly Patrick in 1966 refuted this concept. Thus the supply-driven or supply-leading approach assigns the government a more active in building institutions and creating inter mediation instruments ahead of the demand… India actively employed this approach in second half of 1970’s and the 1980’s with respect to both the expansion of rural bank branches and what came to be known as priority sector lending” of course there are limitation to this approach of lending money by government to private entrepreneurs and firms who may siphon the amount for personal use and in due course declare the company bankrupt, Govt has to be vigilant, more vigilant than in other fields.”

Because of Nehru’s Socialist pattern of economy on to an extent in USSR model, economic progress right upto 1980 was very slow, if not negligible, for a newly independent country with very high hopes. Between 1951-52 to 1987-88 the economy grew at 3.8%. In contrast economy of Korea and South East Asia grew at rates of 8 to 10% per annum. I pursuit of socialism, 5 year plans were prepared in detail in all the spheres of economy by the Panning Commission which laid out detailed map of policies and ways to implement them. First Plan was for the years 1951-52 to 1956-57. With hopes of making Indian Socialism very successful and productive in all the economic fields so that other newly independent countries in South East Asia and Africa follow Indian model for their progress and economic development. Unfortunately for India in the Indian Variety of Socialism there was virtually no increase in per capita income. Instead of increase in employment opportunities there was decline. At the end of all three 5 Year Plans from 1951-52 to 1965-66 there has been, instead of rise, there was decline as per statistics. The lowest ever GDP recorded pulled down the growth rate for entire 3rd Plan period ending 1965-66 to miserable 2.8 percent while population was growing at the rate of 4 percent per annum.

To demonstrate the contrast between Socialist Economy and its the abandonment for free economy following figures of Poverty ratios as per Planning Commission from 1951-52 to 1995-96 are given. Rural, urban and National Ratios are given below:-

 Year                 Rural              Urban              National

1951-52            47.37            35.46                 45.61

1966-67           64.30            52.34                  62.90

 Poverty fell down remarkably in the decade after Socialism was completely abandoned and there is improvement in the condition of rural and urban Indian in all fields, agriculture, industry , service and electronic and management

         Year                                             Rural                        Urban                  National

July 1995 – June 96                      37.46                      28.04                          35.00

There is marked decline in poverty ratio in rural areas from 64.30 to 37.46 but in urban areas poverty has also declined significantly from 52-34 to 28-24 virtually down by 50%.

 In contrast when Socialism was abandoned for Free trade under Narsimha Rao with Dr Manmohan Singh as Finance Minister the economy grew quite fast as GDP in 88-89 was the highest at 10.5. While average GDP in 88-89 to 2008 has been 7% that means almost double the average population growth, thus improving the living standards of all below poverty line the middle class and of course much more of Upper Classes, Entrepreneurs, Technocrats and Business Managers.

 It will be seen what havoc to Indian economy was brought by Socialist Economy during 15 years of 3 Five Year Plans from 1951 to 1966 and in contrast what and how much Indian Economy improved when GDP rose from 3.5% to average 7 to 8 percent India, thus became Emerging Giant only after abandoning Nehru’s Socialist Pattern of Economy. The reason as to why Indian Socialism failed to usher in economic and social improvement of vast number of Indians below poverty line and unemployed was that controlled economy led to Inspector Raj in India—meaning increase in corruption all round which remained uncontrolled particularly in Rationing Department, Income Tax Deptt and Industries Deptt. There was all round neglect so there was all round decline in GDP, increase in poverty and unemployment.

 

December 30, 2009 Posted by Har Charan Singh | India, Indian Economy, Indian History, Political Commentary, Politics, World History | , , , , , , , | No Comments Yet

Shashi Tharoor’s Contribution to India’s Unity

       Shashi Tharoor’s version of India and its unity in Diversity under all circumstances, pressures from inside and outside is commendable. It is a vision of which every Indian is proud and values. It is a vision which makes Shashi Tharoor, a Keralite, a great Indian. Though USSR disintegrated, but India, though remained under Nehru’s Soviet model of socialism for almost 20 years, has not and shall never disintegrate. Despite some neglects and omissions Shashi Tharoor’s concluding remarks about India’s invincible unity are reproduced below:-

 ”There is remarkable resilience about the Indian state (which has proved the foreign analysts wrong) one that is sustained by an intangible sense of nationhood and shared destiny. India is a country held together in Nehru’s evocative image, by strong but invisible threads that bind Indians to a common destiny. Indians are comfortable with multiple identities and multiple loyalties, all coming together in allegiance to a larger idea of India, an India that safeguards the common space available to each identity, an India that remains safe for diversity, taken for granted by most Indians. It is this quality that will prevent the disintegration so widely predicted for my country.”

 In a multi lingual, multi ethenic and a multi cultural country some problems are bound to arise particularly in the East India which had been neglected for thousand of years by Muslim rulers of India and British rulers of India for almost 200 years ignored the problem of East except trying to safeguard the Northern and Eastern boundary by virtue of Young Husband expeditions Mac Mahon Line, that, too, when China was a very weak country whose territories of Korea and Manchuria were conquered and occupied by a small country like Japan and eastern ports like Macao and Hongkong by European imperialists. India got a bad legacy in East but has been trying to solve the problems of East India, since 1947. There have been linguistic problem in many parts of India which were solved by State Reorganization Commission. Punjab problem was also solved. Now there is problem of Telergana, which too, will be solved. Problems will continue to be there, as indicated above, and explained by Shashi Tharoor because of “remarkable resilience” all problems will be solved and India will ever and ever remain united.

 India is a country of which all Indians are proud of and feel so and are sure of its unity in diversity whether they are Keralite’s like Shashi Tharoor or Kashmiri’s like Sheikh Abdullah, or from any other Indian state or Union territory from Jammu, Kashmir and Ladakh (Hindu, Muslim and Buddhist majority respectively) in north to Kanyakumari in South and from Nagaland and Arunachal in East to Goa and Maharashtra in West. All the inhabitants of various states and Union Territories at home they are known as Kashmiris, Punjabis, Marathas, Gujaratis, Assamese, Bengalis, Orias, Telegus, Tamils, Kannadas or Keralites, but when they go abroad they say with pride and they are known as Indians whether they go to America, Europe, Russia, China or Japan. This is the most significant aspect and proof of India’s Unity in Diversity.

December 21, 2009 Posted by Har Charan Singh | Achievers, Biography, India, Indian Economy, Indian History, Muslims, Political Commentary, Politics, Punjabi, Religion, Shashi Tharoor, World | , , , , , , | No Comments Yet

Textile Industry

Despite recession and losses in other sectors of industry and craft there is glimmer of hope in textile industry if it cuts down prices by 10 to 15% to compete with similar industries in Bangladesh and Cambodia. It is indicated that garments produced in Bangladesh are 15 to 25 % cheaper and in Cambodia 15-20% cheaper than those from India.

Because of high cast, India’s exports of textile and clothing during 2008-09 to USA declined by 14% compared to 2007-8. “to $1-70 billion around Rs 8,700 crores”, Gokaldas Export ltd which employs 42000 workers, its export orders had declined by 20-25 % during 2008-09 despite cut in prices by 10-15%. But now Gokaldas Export are optimistic and are opening a new production unit in Hyderabad to produce about 1,00,000 pieces a month and add Rs 50 crore a year to company’s turnover.

Orient craft ltd, apparel exporter company based in Gurgaon, has decided on price cut of 8 to 10% though it will mean a squeeze in profits but is determined to expand the facilities and export more. Similarly Orient Craft which earned about Rs 800 crores in 2008-09 despite recession, is setting up a new garment factory in Bhilwara (Rajasthan) employing 3000 workers and aims to produce about 2,50,000 pieces a month by the end of November 2009 when the new factory in Bhilwara would become operative.

Above all, the most optimistic textile industry, Alok Industries Ltd plans to boost its sales by 30 to 35% and is setting up two new garment factories during 2009. As it had already earned Rs 800 crores during 2008-09.

September 17, 2009 Posted by Har Charan Singh | Indian Economy | , , | No Comments Yet

Likelihood of rise in Price India

Despite slowing down of recession, Wholesale Prices are likely to cross the targeted 5% by the end of year 2009 as inflation is moving up every month. Inflation has moved up during August of 2009 from 0.21% to 0.95%. This has been confirmed by the Planning Commission and Commerce Ministry. States have been asked to take strict action against hoarders of essential food products by invoking provisions of Essential commodities Act and the Prevention of Black Marketing of suppliers of Essential Commodities Act. But in case the rabi crop is affected too much because of drought in some states and shortfall of rain in many other states than the consumer prices of essential commodities are likely to go up beyond the estimates of Planning Commission and Commerce Ministry. If it so happens it will have, social, economic and political reactions all over the country. Inflation has been 11.89% as consumer index for industrial workers during July 2009. If rabi crop, is unexpectedly low the inflation for the year September to December might be 15% or close to 15%. This will be shocking for the government as well as people of India, particularly the industrial workers and 30% to 40% below party line.

September 17, 2009 Posted by Har Charan Singh | India, Indian Economy | , | No Comments Yet

Working of Congress (UPA) Govt. (2004 – 2009)

During last 4 – 5 years lakhs of employees of hundreds of companies have been laid off. What the UPA Government has done for these companies and their employees many of whom have been laid off and many others have been working on reduced pay. It is only big companies like Indian Air lines prestige.

Besides thousands of small companies, hundreds have closed down and the remaining are trying their best to survive with reduced number of employees. Art and crafts are suffering the most because these are unorganized and there are no foreign purchases.

Here are few examples of dying crafts. Wooden to making, carpet manufacturing and silk weaving. There are other crafts too, shawl making embroidery on clothes which were made in demand in India and abroad.

Dying Crafts

An award winner toy maker, R Acharia Lembhiah who is 95 years old and had been making wooden tags throughout his life. When 60 years ago lost NIZAM of Hyderabad sat on the throne, the tag maker had created a “huge banana with gold colored petals”, the petals unfolded and showered on Nizam. Nizam was ecstatic and showered patronage on the toy maker. But today the same toy maker and others are without work as no one is purchasing their wooden tags which are fetched Rs 15 to 5000 and some specially commissioned once even huge amount of Rs 55000 which today would be about Rs 7 to 10 lakh.

Ashok Das has suggested following there steps to be taken by the government for the revival of such a splendid art:
(1) Lifting the ban on the raw material, Puniki wood . (2) Pension to all eligible artists after 60 years
(3) Stipend for anyone willing to join the trade
(4) Providing funds for marketing
(5) Insurance came for all artists.

Dr Manmohan Singh

India’s Prime Minister for second term, was born in 1932 in a small village in Jehlum Distt of West Punjab now in Pakistan. He comes from an ordinary family. In his own words Dr Manmohan Singh says: “I grew up in a small village with no electricity, no roads and no safe water and had to walk for miles to go to the nearest school.” After partition his family like lakhs of other Hindu Sikh families migrated to India. Manmohan Singh’s family settled in Amritsar. As he was very intelligent and studious, from the age of 15, young boy Manmohan spent whole heartedly all his time and energy to studies. Thus in 1954 his efforts brought fruit and honour not only to him but to his entire family as he got 1st class first in MA Economics and was awarded fellowship/scholarship of Cambridge University in England. There he did his PhD and became Dr Manmohan Singh.

After a couple of years he had arranged marriage with a school teacher Gursharan Kaur who has stood by him all through and also developed as an intelligent sober 1st lady accompanying the Prime Minister in all his visits abroad to meet Presidents and Prime Ministers of various countries like USA,UK and other, with dignity and grace befitting First Lady.

Dr. Manmohan Singh first taught in Delhi School of Economics and then went abroad to USA for assignment in World Bank etc till he was offered prestigious appointment as Governor Reserve Bank and thereafter Secretary to Govt of India in Finance Deptt and Deputy Chairman Planning Commission. It was Narsimha Rao who chose him as a modern economist in 1991 and appointed him as Finance Minister in his cabinet, because of his competence as an economist and being man of integrity and honesty. Finance Minister Manmohan Singh, with the support of Narsimaha Rao liberalised Indian economy. This was a great break from the past closed economy which was in due cause appreciated and hailed by all political parties and leaders. Thus Dr. Manmohan Singh became apostle of liberal economy and free trade.

After the fall of Narsimaha Rao and Congress and thereafter of BJP which ruled under able leadership of Shri Vajpayee for full term of of 5 years, in 2004 Sonia Gandhi who being from Gandhi-Nehru dynasty though Italian by birth, did not know much about constitution of India Indian polity. She could hardly speak a few words in English and Hindi that too from notes prepared and supplied by her coterie. She could not assume the responsibility of Prime Ministership though it was said she ’sacrificed’ this high status. After lot of deliberations and discussions with other congress leaders, the choice of Prime Ministership felll on Dr Manmohan Singh because he was a renowned economist of world fame, man of highest integrity and honesty and in addition he was not a politician. He once stood for elections in Lok Sabha in 1999 from New Delhi Constituency but lost. Thereafter Manmohan Singh did not have courage to stand for Lok Sabha elections but remained contented with nomination from Assam to Rajya Sabha. He was leader of opposition in Rajya Sabha in 1999 and thereafter when Congress won the 2004 elections, he was the obvious choice for Prime Ministership. Thus Dr. Manmohan Singh became Prime Minister of India.

During the 1st term 2004 to 2009 he remained very cool and considerate. He was more concerned with signing nuclear deal with President Bush, though this nuclear deal has become controversial.

In a recent interview, Amartya Sen Nobel Laureate had all the praise for Manmohan, as he called him, both for his economic policy of liberalism as well as his courteous behavior with every one whether it is “George Bush or King of Bhutan”. It will interest everyone to quote Amartya Sen as under:
“I don’t think these policies have been neo-liberal. Had they been we would have done much worse in economic crises. As an old friend may I say that people seem to miss? He is immensely well behaved with absolutely everybody, people say things like “when I saw him with Bush he looked so happy and so supportive” . But you see any picture of Manmohan and he always looks friendly and supportive….. I would defy you to find a picture of Manmohan looking angrily at any one. I haven’t seen one in 54 years I have known him. Whether that is a lacuna in a politician…. But if there is a fault, it is a fault of generosity and courteousness.”

I don’t Think what glowing tribute Amartya Sen had paid to our Prime Minister, as an economist, as a courteous politician and as a superb smiling human being, Amartya Sen has paid to any other living politician or economist in India and even abroad.

Here I have my personal experience about Dr. Manmohan Singh’s regard for talent, hard work and born handicap of an ordinary individual. I had met Shri Mani Ram Sharma who, despite his handicap of deafness by birth passed IAS examination thrice but was rejected on madical grounds. Maniram himself told me “that Prime Minister Manmohan Singh himself called my file and on it ordered that I should be given class I job because of my talent and hard work. So I got a class I job in Communication Ministry for the last few months and am getting Rs. 30,000 PM and sending home to my old parents Rs. 10,000/- every month.” So this is our Prime Minister a splendid economist with sublime feelings for the poor, talented and needy.

During 2009 election campaign, L K Advani of BJP who thought and loped to be Prime Minister went out of the way to accuse Prime Minister Manmohan Singh that he is the weakest Prime Minister, has no say in UPA Government and does what Sonia Gandhi says or wants. This was highest provocation. Manmohan Singh might have ignored Advani’s outburst but Sonia Gandhi goaded Prime Minister to give Advani befitting reply. This Prime Minister did. For the first time he spoke like a seasoned politician blaming Advani the Dy Prime Minister for the release of terrorist on the conditions dictated by them. Thereafter Manmohan Singh once again became his true self as stated by Amratya Sen, a symbol of generosity and courteousness.

While election campaign was in full force, 77 year old PM Manmohan Singh underwent heart surgery: it was the third one. But after only 10 days rest after surgery he started attending to the office work. 2009 General elections gave humiliating defeat to Advani and BJP and glorious victory to Congress and UPA. Manmohan Singh became PM for second term.

But there seems to be no rest or respite for courteous and generous Manmohan Singh. Sharamal Sheikh agreement with Zardari which mentions Baluchistan has raised havoc for Manmohan Singh and Congress Government BJP, in particular,was vociferous in condemning it as India’s submission to Pakistan without any reason as Baluchistan was just a province of Pakistan which like NWPP is in turmoil because of activities and sabotage by Baloch Taliban.

Now Pakistan alleges that Raw intelligence agency of India is helping with finances and arms in Afghanistan with the help of India’s Consulate in Kabul as well as India’s Consulate in Zahedan, Iran, close to Baluchistan. Pakistan’s allegation that India supports Baluchistan Liberation Army leader Brahandogh Bugti and says that it has given documentary evidence of Bugti’s meeting with Raw officials. There are many other allegations in the Pakistan dossier provided to India like Raw is running safehouses in Afghanistan for Baloch rebels with the help of Indian Consulate there.

Though PM and Sonia Gandhi are not apparently upset by strong condemnation of Sharmal Sheikh agreement by opposition more vigorously by BJP and even by a section of congressmen though there opposition is mute. But Manmohan Singh said, he had similar problem when he signed nuclear deal with USA. He went on to say that in 1991 he had dedicated himself to economic reforms saying “I was criticized by the Right, by the Left” he added “Fifteen years down who will today say that what I did then was wrong The Nation Stands Tall, proud fast growing”. In the same way Monmohan Singh defended the nuclear deal in Parliament, saying “we have achieved an agreement that is good for India and good for the world – The agreement with the United States will open new doors in capitals across the world”

In the case of Sharamal Sheikh agreement PM has this to say that despite opposition even from a number of congress numbers this is an opportunity to resolve differences between neighbours, India and Pakistan once for all. Here I quote last para from article by Sunita Gupta:
“Unfortunately for Manmohan any defence of his position by party members has been muted. But if history is any indication it is unlikely that the all-round criticism will be an obstacle for the PM. For by now the country is familiar with the fact that behind Manmohan’s mild manners is steely resistance, he has vision for the Subcontinent at peace with itself and he will pursue it”

This is another tribute to Dr. Manmohan Singh that he is man of steely resistance just as Amratya Sen’s tribute was to Manmohan “ He is immensely well-behaved and absolutely happy and supportive – generosity and courteousness”

September 17, 2009 Posted by Har Charan Singh | India, Indian Economy, Political Commentary | , , , , | No Comments Yet