Introduction
When Nehru became India’s first prime minister, there was not only euphoria at the prospect of independence, but also a general crisis. Devastating colonial slavery is coming to an end. The world emerging from the ravages of World War II. India plagued by poverty, illiteracy, poor health, etc.
A comparison with what happened in Pakistan helps to perceive the difficulties faced by a newly independent nation. The comparison is valid because the cases were similar. We belong to the same inventory and our history and governance structures were similar. However, our progression paths have diverged basically due to the vision and nature of political leadership.
The rulers of India asserted their independence. It stood on the fringes of the wonderful blocs of emerging forces and provided the vision of a non-aligned movement to the emerging and loose countries. Pakistan, on the other hand, joined the Western bloc, militarized itself, and may not break the chains of feudalism. He allowed the army to dominate the country and opted for theocracy, not secularism. Democracy had no chance to flourish because political leadership was weak.
Historical comparisons are tricky
Historical narratives are misleading because they require interpreting the afterlife from an existing perspective. For example, at the height of Mughal rule, with Akbar at the helm, there were no automobiles or electricity. From today’s perspective, the country was obviously underdeveloped. But this judgment is not fair because we have to take into account the availability of generation and resources, the social scenario of the moment, etc.
In 1947, India lacked technological resources and functions compared to complex countries and present-day India. India’s leaders enjoyed little government and administration. Communities were divided, and partition put pressure on the nation.
Initial situations matter. And they were very different between 1947 and 2014. In 2014, the new government with a physically powerful economy, expanding by 7. 76% in the first quarter of 2014-15. It recovered from a low of 4. 44% in the fourth quarter of 2012. -13. By contrast, Nehru with few resources, an average expansion rate of 0. 75% and massive problems. In 1947, the leaders lacked a ready-made style of progression and had to take a new path.
Building Institutions in an Underdeveloped Nation
Institutions give direction to a society. In 1947, they were weak at best. For example, the monetary formula or social coverage for staff and farmers was rudimentary. An independent judiciary, bureaucracy and police are needed, but they were in the colonial mold, designed to enslave other people and not expand the country. The country is largely feudal, agrarian and rural. A vision was needed to lift other people out of poverty and enable them to live a civilized life.
Fortunately, the Indian rulers believed that the Americans were not to blame for their disorders, as they were the result of collective deprivation due to colonial rule. Therefore, leaders would say that social disorders would be solved jointly by state intervention by creating infrastructure, either social (education, health, etc. ) and physical (roads, railways, electricity, etc. ).
Leaders initiated modernization by spreading education and clinical spirit and by creating an economy capable of generating pegs for nuclear reactors. This purpose was achieved despite a severe shortage of resources and laid the foundation for India’s long-term development.
Historical Errors and Corrections
As the path was unexplored, many mistakes were made. The R
On the other hand, the political mistakes made since 2014 were obvious and swift and deserve to have been anticipated. Demonetization and structural GST are two examples that have harmed the vast unorganized sector of the economy and thus the economy as a whole. , in the 1950s, it was identified that employment would be provided through small and micro sectors and that they needed protection.
History is replete with examples of nations that made mistakes and dealt with their consequences over long periods of time. In the eighth century A. D. , India’s ruling elite mistakenly believed that they possessed all the knowledge possible. This not only slowed down the production of knowledge, but also led to narrow-mindedness and defensiveness. This lesson also applies to the day of the sale.
Today, leaders talk about “decolonizing” the Indian spirit. But then, why invite foreign universities to India to create world-class universities?They will bring their own framework and expand their own. In addition, the expenses of R
Compound Growth Rate and Perceptions
As an economy grows over time, more resources become available for development, which leads to higher growth. Therefore, any assessment of the future will have to keep this in mind as well as being the starting point.
In addition, structural adjustments in the economy increase the rate of expansion of the economy. Agriculture is growing by 2% to 3% annually, while the service sector is expected to grow by 8% to 12%. Thus, as the economy modernizes and the percentage of agriculture decreases while that of facilities increases, the rate of expansion of the economy increases.
India’s average growth rate between 1901 and 1951 was 0. 75% and increased to an average of 3. 5% between 1950 and 1980, a considerable increase in the growth rate. This figure rose further to an average of 5. 2 percent between 1980 and 2002 and an average of 8 percent between 2002 and 2009. This acceleration in the rate of expansion largely reflects the development of the sector’s share of the economy. It has become the dominant sector of the economy after 1979.
The increase in the average rate of expansion has implications for the absolute figures. With an average expansion rate of 1% consistent with the year, the duration of the economy has doubled in 70 years. At 3. 5%, it has doubled in 21 years. At 5. 2%, it has doubled in 13. 5 years. And at 8%, it doubles in nine years. The increased rate of expansion creates the illusion that the economy is doing well now. But it is clear that the initial expansion leads to a later dynamism.
Availability of resources
Growth leads to an accumulation of resources that allow more to be done in spaces such as education, fitness, and physical infrastructure. This assistance improves the productivity of personnel and the (potential) capacity of the economy to produce more and grow faster.
In the 1950s, the economy was small, the population was poor, and investment was low. Investment (NDCF) was 3. 4% in 1950-51, while in 2012-13 it increased to 28%. Thus, while in 1950-51, out of one hundred rupees, only 3. 4 rupees could be obtained for education, health, agriculture, etc. , in 2012-13, 3. 4 rupees could be obtained for education, health, agriculture, etc. 28, an eightfold increase. In addition, the genuine national source of revenue increased 28-fold in 2019-20. Therefore, in real terms, approximately 224 times more budget was invested in 2019-20 compared to 1950-51 and it is possible that the country will achieve much more. .
In 1950-51, government tax revenues accounted for 6. 69% of GDP and today they are 17%. The budget deficit was 0. 04% of GDP in 1950-51, while today it is about 10%. As a result, the availability of government resources increased from 6. 73% of GDP to 27%, a four-fold growth. Taking into account the increase in GDP, the government now spends 112 times more than it did in 1950. This allows for more schools, roads, and restrooms to be built. , the influx of the rich is limited to allowing for greater savings and expansion to build the foundations of capitalism.
Other Challenges
Nehru grew out of the national movement that had worked to unite all Indians. The leaders appealed to the higher instincts of the people to work toward a common goal: to live in concord and progress. There has been a reversal of this trend. Nehru also had to contend with feudal attitudes and entrenched superstitions, dogmas and prejudices.
The radical technological evolution between 1950 and 2023 is the basis of those possibilities. Automation, artificial intelligence, semiconductors, desktops, and cell phones have given rise to e-commerce, e-banking, communications, and more, which are turning the fields of medicine. , education, design, etc. Compared to 1947, excavators, cranes, etc. , are ubiquitous at structure sites. The use of tractors, combines, threshers, etc. in agriculture has replaced oxen and ploughs. But task creation has suffered.
Conclusion
In short, the Nehru era was transformative despite the enormous difficulties that existed. This has given the country 224 times more capital today than in 1950.
(Author: Arun Kumar is a retired professor of economics, JNU. His recent books include “The Indian Economy Since Independence: Persistent Colonial Disruption. “2013 and “The Biggest Crisis in India’s Economy: Impact of the Coronavirus and the Way Forward. “. 2020)
[Based on an article “From Economic Modernism to Populist Personalism: How India Developed After Independence,” Outlook, March 4, 2024]