Congress governments took the responsibility of social changes and social welfare
For a country, a strong economy, people’s participation in economic activities and distribution of economic benefits according to socialistic pattern are very necessary. This forms the basis of a healthy democracy. During the British rule, the Indian National Congress was founded. From its inception, the economic policies adopted by the top leaders of the party were socialistic and welfare oriented. The Congress Party and the Congress governments took ahead our country according to these economic principles. These economic principles were not only in accordance with democratic values but were capable of fine-tuning with the world economy also. Due to implementation of these policies, India is now considered as an economic power all over the world.
But for the last two and half years, the Narendra Modi led NDA government has taken such decisions which are slowing down the growth of Indian economy. PM Narendra Modiji used hyperbole terms like Skill India, Make in India, Digital India,
Inclusive Growth, Start-up India and succeeded in perplexing the innocent people of this country through his rhetoric oratory. But the fact is – neither Modiji nor his finance minister is able to give a definite direction or laid down any path-breaking policy for Indian economy.
During the last two and half years, whatever the NDA government has taken decisions regarding our economy, the whole country is facing its heat. Inflating is rising; currency is being devalued and growth-rate for industrial production and exports is on a decline. Unemployment is on a rise. Agriculture sector in under pressure and farmers are in distress. People of the whole country are disturbed because of price-rise of essential commodities. Modiji abolished Planning Commission and formed Niti Aayog but nothing significant has been achieved yet. On the contrary, harassment of non-BJP ruled states has increased and unwarranted tensions in centre-state relations are apparent.
These all are happening due to the fact that non-congress ruled states lack the vision for country’s economy. BJP is excited to overturn the policies laid down by the top leaders of the Congress Party and adopted by the successive Congress governments. But they don’t know how to go ahead. The study of history of modern India after independence clearly indicates that whenever non-Congress government is formed at the centre, serious challenges pose a threat to the country’s economy. In the 90’s under noncongress governments regime, the country’s economy took such a bad shape that the gold-reserve had to be mortgaged to pay the interest-bills of loans borrowed from international institutions.
The top leaders of the Congress Party adopted a farsighted vision for economic policies of the country and made this country a fast rising economic power. But this task was not so easy. Two hundred years of the colonial rule made this country more or less bankrupt.
To understand the seriousness of the challenges before Indian economy, we have to go sometime back. Then only we will be able to understand the contributions made by the Congress to strengthen economy and social structure.
Two hundred years of the British rule made Indian a home of poverty-ridden people, a weak society and an under-developed and debt-ridden economy. The colonial rulers first interfered in the agri-sector. To fulfil its own selfish oriented needs, the foreign rulers put hindrances on the development path of the agri-sector. As the colonial power became stronger, agriculture became weaker in most parts of the country. Gradually the rate of production per acre declined. Between 1901 and 1941, per capita agri-production registered a decline up to 14% whereas food grains production came down up to 24%. The British rule promoted such an agrarian system that was dominated by zamindaars, money-lenders and businessmen. This system was not suitable for the development of agriculture in a country like India which was pre-dominantly an agricultural country.
The colonial rule was more interested in procuring land-rent and so it never paid any attention for the development of agriculture. As a result, except some specific areas in the country, agriculture didn’t witness capital investments. Newly built roads and railtracks helped rural produce to reach towns and international market. It led to commercial production in agriculture and in this way Indian agriculture was linked with world market. Despite the commercialisation of agriculture modern technology was not introduced. The irrigated and fertile land was dedicated to for commercial crops in place of food grains. Such things were going on in an era when agriculture was being modernised in developed countries and revolutionary changes were taking place. But Indian agriculture was witnessing neither any technological advancement nor capital investments. Indian farmers were still using centuries-old agriculture-devices. They were using plough-blades made of wood. They didn’t hear about fertilisers. Cow-dung and bone-manure were used scantily. In 1930’s, high-yielding seeds were being used in only 11% of the total agricultural land and it too was limited for commercial crops.
Training for agriculture had never been a priority. There were only 9 agriculture universities with 3000 students in 1946. Perhaps no initiative was taken for flood control, water-logging, making farms uniform etc. Despite being an agricultural country, only 27% land came under irrigated land at the time of independence.
The handicraft sector was no better that agriculture. During 19th century, the handicraft and artisan sector witnessed a sharp decline. Its main reason was cheap industrial finished goods from Britain. Free trade policy was imposed on our country and it adversely affected handicraft and artisan based business. Unemployed craftsmen went for agriculture and were compelled to be landless farm-labourers and share-croppers. From the later part of the 19th century, India witnessed some development in modern industries. But from production or employment point of view, it was negligible when compared with the developed countries. Industrial development was so little that it was unable to compensate even the loss of handicraft business. Indian industrial development was limited to cotton, jute and tea in 19th century. Later it took sugar, cement and paper industry under its fold. After 1907, iron and steel industry developed to some extent. But up to 1946, 30% of the total labourers and 55% of the total value of industrial output were limited to only cotton and jute industry. At the end of the British rule, only 7.5% of the national income came from modern industries. India was way behind in power generation. Likewise modern banking and insurance facilities were weak too. The real picture of Indian industries comes out when we look into machine-manufacturing and capital based industries. In 1950, India imported 90% of machines. The total population of India in 1950 was 36 crore and only 20 lakh people were employed in modern industries.
The ratio of rural and urban population can also be considered as an indicator to show India’s economically under-developed situation. The rural population was much higher. In 1951, 82.3% population was living in rural areas whereas in 1901, only 63.7% population was dependent on agriculture. This number touched 70% in 1941. On the other hand, in 1901 1.03 crore people were employed in construction and industries. This came down to 88 lakh in 1951 whereas during this period India witnessed 40% increase in its population.
In the colonial era, transport and communication sectors witnessed development to some extent. But there was no trace of industrial revolution and Indian economy happened to be merely a commercial revolution. It only benefitted colonialism. Railway tracks were not laid with an aim of promoting internal commerce. So it didn’t help Indian industries for transportation of raw materials and finished goods. Even freight charges were prepared in such a way that it helped more to import-export.
Internal commerce remained under control. The development of railways benefitted more to British steel and machine industry. Apart from this, the British capitalists controlled a number of Indian companies through management agencies. The top leaders of the Congress Party pressurised the British administrators from the very beginning of national movement in this regard. They understood well the exploiting policies of the British rule. Due to the visionary economic policies of the great leaders of the Congress Party, Indian economy witnessed some positive and important changes in 1930’s and 1940’s. These changes proved a foundation for the economic development after independence.
Pandit Jawaharlal Nehru and other senior leaders of the Congress Party encouraged our country’s own capitalists to invest in the country. The scale of the companies owned by Indians was small but it was diversified in consumer goods industries like cotton, jute, sugar, paper and match-box. The capital goods industry was in nascent stage but comprised iron and steel, cement, metallurgy and engineering industries.
Despite all these unfavourable circumstances, with the encouragement of senior leaders of the Congress Party, a class of country’s own capitalists sprang up sharply which had strong economic foundation. Indian capitalists were independent of foreign capitalists as was usually seen in colonies. Indian capitalists were not facilitators for foreign capitalists. They were not small share-holders in foreign-controlled industries. Indian capitalist class was more hard-working and courageous than foreign capitalists. As a result, investments by Indian capitalists increased manifold in comparison to foreign investments. At the end of Second World War in 1945, Indian capitalists owned about 60% of big industrial units. Small and micro industries were more or less entirely owned by Indian capitalists. It is important to note that large part of national income came from small and micro industries rather than big industries.
By 1947, Indian investments registered much progress in banking and insurance sectors. 64% of the total banks savings was owned by Indian joint stock banks whereas insurance companies owned by Indians controlled 75% of insurance business. Larger part of internal commerce and minor part of foreign trade were under the control of Indian capitalists.
An analysis of colonial administrative system reveals that they were more interested in barricading India’s economic and social development. On the other hand, the leaders of the Congress Party and of freedom struggle were convinced that the country had to free itself from the clutches of the foreign rule in order to develop itself. Continuous struggle against the British rule compelled the British administrators to carry out some important steps and it led to the formation of provincial governments in six states in 1937.
The formation of provincial governments by the Congress party changed the atmosphere of the country psychologically. As an alternative force, the honour of the Congress party increased manifold. The Congress party led the struggle against the British rule for the last 50 years. The Congress proved that it can not only lead people’s movement but can use the power of administration for people’s interests also. The administration at that time was imperialistic in nature and there are limitations regarding power and financial resources for the Congress governments in provinces. Despite all these limitations, the Congress governments carried out many changes that can foresee as a glimpse of Swaraj.
The ministers of the Congress presented an ideal of simple life. They decreased their salaries heavily. The salary was decreased from Rs 2000 to Rs 500. A common man could also earn such remuneration. The Congress governments took several steps to fulfil its promises of the election-manifesto. The Congress governments passed many laws that provided much needed relief to people. The commitment of the Congress to safeguard civil rights was as old as the party itself.
The first task done by the Congress was to free thousands of prisoners and house-arrested freedom fighters. The Congress governments quashed the orders of banishment from a specific area. The senior leaders of the Congress party were well-aware of the fact that the cause of poverty of farmers and labourers were rooted in colonial policies and socio-economic structure. So the Congress governments tried to provide economic relief to farmers and labourers.
The overall structure of agriculture in India was very complex. The problem of loans, curses of money-lenders and absence of knowledge of land-rights were also associated with the livelihoods of farmers in a very complex manner. In spite of all these hurdles, the Congress governments succeeded in protecting agricultural interests of farmers. Ancestral rights to own farms were given to farmers and land-rent was fixed for 10 years. For non-payment of land-rent, no farmer could be arrested or sent to jail. Forcible dispossession of land was abolished. Begaar (work without payment) was also abolished. Land-rent was decreased up to 25%. The arrears of land-rent were also decreased significantly and the interest-rate upon it was also decreased from 12.5% to 6.25%. At many places bonded-labourers were freed and the amount levied on cattlegrazing in forests was also abolished.
The leaders of the national movement and of the Congress party knew that a solid industrial base was essential for the development of country’s economy after independence. They were of the opinion that labourer’s interest must be protected and a peaceful environment must prevail in industries. Committees were formed for cordial relations between labourers and owners. The leaders of the Congress party were made facilitators. Strikes would be considered as the last resort. Efforts were made to increase wages of workers and to make their lives better.
The provincial Congress governments took the responsibility of social changes and social welfare. Prohibition was imposed in some selected areas of different states. Several laws were passed in favour of the untouchables and Harijans. These included – to use wells, ponds etc; to enter temples, government-offices, hotels, restaurants etc without any restriction and to avail facilities of public transport, education system, hospitals etc. It was ensured that any tradition which limited civil rights of harijans couldn’t be validated by any court or government-official. Free education and scholarships were arranged for Harijans. Efforts were made to increase the number of Harijans in police and government services.
The provincial Congress governments paid special attention to primary, technical and higher education and also to public health and cleanliness. Education facilities were expanded for girls and Harijans and specific initiatives were taken for basic education. Emphasis was given to work manually. Community based literacy campaigns were started for adults. To make khadistrings manually was proposed. Economic assistance was made available for rural industries. Jail-reforms were carried out. The provincial Congress governments removed all restrictions for the expansion of country’s own industries and provided active participation and assistance for the expansion of modern industries like automobile industry.
The formation of the Congress government and implementations of civil rights exposed people’s hidden talent. Activities of farmers’ organisations and trade unions increased. Protests by students and youths started once again. People’s movements spread in states.
We should look into the positive aspects of Indian economy. Indian commerce and industry developed within the colonial structure. This industrial development was without industrial revolution. In this sense, Indian commerce and industry development can’t be attributed to the colonial rule. It was due to the efforts of the Congress leader to a large extent. This development was the result of intensive economic and political struggle. The colonial rulers provided some facilities against their wishes. The leaders of the Congress party understood it very well that without uprooting the colonial rule, the free, uniform and overall development was not possible.
Farmers and labourers became poverty-ridden as a result of the colonial rule. The common men were destined to hunger, disease and acute poverty. The large part of our population didn’t even two square meals a day.
The country faced one famine after the other. In the later part of the 19th century, almost all major parts of the country faced famines. It can be said that India remained under the clutches of famines, big or small during the whole British rule. In Bengal alone about 30 lakh people died in one of the most devastating famines.
Medical facilities in the country were in a very bad shape. The doctors and hospitals were very few in number. There was no sewage system in most of the towns and cities and wherever it was there, it was limited to the townships of Europeans and wealthy Indian people. Modern water supply system was not available in towns and cities. In villages, it was never heard off. Most of the towns and cities were without electricity. Not to think of electricity in villages?
The colonial rulers exploited Indian economy for their own benefit and neglected people’s welfare. For making huge profits, Indian economy was associated with the world market which was fundamentally based on inequality. Such clandestine arrangements were made that India would produce food grains and supply raw materials and would purchase finished goods and machinery from European countries. India was destined to produce cotton, jute, oil-seeds, minerals and to import biscuits, shoes cars, machines, railway engines from British factories. On account of these policies during 1935-39, 68.5% of Indian exports comprised food grains, tobacco and other raw materials whereas 64.4% of Indian imports comprised finished products of factories in Britain.
Britain, America and other countries of Europe were providing tariff-protection to their industries but the colonial rule rejected the proposal of providing same tariff protection to Indian industry. In this way, Indian industries were made dependent on developed economies.
The national movement led by All India Congress Committee compelled the colonial rulers to provide some tariff protection to Indian industries in 1918. After 1880, the British rulers implemented such fiscal policies that would ultimately benefit British industries.
The total revenue of the colonial rule was being exhausted to fulfil the needs of British-India administration. This huge amount went to England directly or indirectly. The whole administration was run keeping the interests of Britain’s commerce and industry in mind. The largest part of revenue was meant for army and civil administration. After 1890, 50% of government’s revenue went for the army. During 1947-48, this was at 47%.
Indian tax-system was also very unreasonable. High taxes were levied on farmers whereas officers, landlords and businessmen were exempted from it. The poor and farmers had to pay taxes even for common salt. Due to the strong protest by the Congress party, land-rent and salt-tax were decreased a little in the 20th century. In 1900-01, 53% of total revenue came from land-rent and 16% from salt tax.
The exploiting policies of the colonial rule resulted is mass poverty. People were bound to lead lowest standard of life. It can’t be said that the reason of such acute poverty was only the huge population. The rate of population increase was
0.6% during 1871-1941. When India got freedom in 1947, it inherited a stagnant economy, low production rate and an under-developed agri-system. After independence, the Congress party formed the government. The first PM Pandit Jawaharlal Nehru had to face these challenges. In the next article, we would look into how the Congress government under Pandit Jawaharlal Nehru succeeded in resurrecting Indian economy?