The following is taken from the transcript of Nehru's Speech at the meeting of the Standing Committee of the National Development Council, New Delhi, 7 January 1956.
... It is agreed by all... that we should go towards what is called a socialist structure of society.
Was this really the case? No. Congress was only pretending to be Socialist. It wasn't really.
We say that not because of some emotional feeling but for very practical considerations,
defeating the Left & clinging to power
that is, you cannot meet the social problems of the day without going in that direction.
The country had been going in that direction since Independence.
.. taking India as it is, I think we have the background here, the urge and the necessity for going in that direction. Now I hope everybody realises that to achieve socialism or indeed to achieve any kind of really high standard in this country is a long-term process. It is no good deluding the public that we can achieve it quickly. Even in China, Chairman Mao repeatedly talks of achieving socialism in twenty years in spite of all the authoritarian powers that they have and the tremendous capacity of the Chinese people for working.
This was before Mao decided to go for a 'Great Leap Forward'. (1958-62)
Naturally, we have to go fast... But in going fast, we have to be clear about the objective... And we have to be clear that everything that we do, apart from being advantageous to us in an economic way, is on right lines, that the right trends are encouraged and not the wrong trends which come in our way.
So, the objective wasn't 'economic advantage'. It was to follow the 'right trends', not the wrong ones.
All this seems to me to indicate the great importance of what I would call long-term planning — in general terms, of course, not this detailed planning— because then one can see whether what the country does in the next, say, five years, fits in with our objective of, say, ten or fifteen years hence.
If you spend too much on stupid shit today, you will be worse off tomorrow. That is what India did in the Second Plan period.
It is not enough merely to test it by some broad concept of socialism, though, of course, that may be done. But it becomes necessary to have some clear idea of what in fifteen years time we hope to achieve.
What was achieved, by the time Nehru died, was a country unable to feed or defend itself.
It is most necessary that we must have this and then we can come to the shorter plans which must fit in with the broad general scheme; then we come to the shortest plan, the one year plan or the annual plan, which also must fit in and it would be a very detailed plan. Difficulty comes because our minds are not clear about what we want India to be, say fifteen or twenty years later, and that is perhaps the reason why we get rather mixed up even in regard to our shorter plans.
Why was it not clear to Nehru's mind that India should be able to feed and defend itself?
From that I conclude that two things are necessary. One is this long-term planning, in the broader sense, of course.
How can you plan if if you are not clear about where you want to be?
Secondly, the concentrated planning for relatively shorter periods, that is, for the moment, a year, so that we might not get tied up before we get clear about the fifteen years’ programme, by something which we would not do, if we had this fifteen year plan in view. So this Five Year Plan, whatever it ultimately is, should not only be flexible, but should be something even more than that. It should be a broad framework, subject to suitable changes, not only because of our resources, but because of the ultimate long-range picture that we may develop, and we may develop it in the course of the next year or so. It would be easier to adopt the shorter plan when we have the fifteen years’ objective before us.
So, the guy doesn't know what he wants India to be, yet he wants plans which can only be made on the basis of what India is intended to become.
Obviously we take up many schemes in the plan for the year, schemes which may take four or five years. And we have got to take them up, and in that we do plan for the next four to five years or more.
In other words, the Government has plans because it has budgets.
Now, production is obviously essential and more particularly the right direction or the right trend in production.
Agricultural nations should produce more food. They should also turn cotton and wool into cloth and coal and iron into steel. They should produce 'wage goods'- i.e. stuff like bicycles and radios- which can also be exported.
If I may also mention, there is the projection of internal policies on international affairs. I am not talking of India so much, but broadly speaking, I think that the whole of this cold war in the world today is a projection, not merely of communism and anti— communism- it is that in a sense, of course — but in a sense it is the culmination of industrialization and the conflict between the big power groups.
Industrialization was occurring in India under British auspices. Even Japanese and other foreign companies were setting up factories in India. Nehru could have encouraged this.
Previously these conflicts took place between the Western powers, for instance, between Germany and England for colonial territories.
There was no such conflict. England was perfectly prepared to let Germany take over unprofitable African territory.
But now it has moved on to the world plane.
No. There were no wars over access to markets. Perhaps Nehru was thinking of the Opium Wars or the Americans forcing the Japs to open themselves up to global commerce. But that was in the nineteenth century.
This is the growth of industrialization which may be typified by the hydrogen bomb or the atomic bomb and this has brought us to a certain crisis which requires very deep thinking as to where the world is going and where we are going.
Either India industrialized and gained such weapons or it became a client of a super-power. Indira signed up with the Soviet Union in 1971.
I am not prepared in the least to copy either Russia or America, because both may be, from India’s viewpoint, utterly and absolutely wrong. Both may succeed in a narrow plane, and they have succeeded, in reaching, say a very high material standard of comfort. America has succeeded and feviet Union, no doubt, will also succeed, provided America and Soviet Union do not collapse before that, in war or something like that. Of course, we have m ihink about material issues, because they are very important and basic. But we need not take for granted all the other things that have happened in the other countries or in these highly industrialised countries, because we have seen that they have led them in a direction which ultimately may bring about ruin, in spite of the high state of civilisation that they have produced.
Those with the higher state of industrialization and scientific civilization destroy those lower down the scale. At any rate, that's what had happened to India. Thanks to Nehru, the country would decline in its ability to feed and defend itself.
Now I do not mean to say that India is spiritually developed and all that. Other countries have so developed, or they may not have developed, but talking of India’s spiritualism does not help us; it just confuses the issue. But I do think that India, situated as she is, has a chance of developing, on her own lines, a relatively high standard of living without getting into all the difficulties and dangers which this mad race for economic or other power has brought about.
India did have that chance. Nehru took it away. He wasn't mad. Just stupid or prematurely senile.
I am not anxious that everybody in India should have a motor car or, say a washing machine or a refrigerator.
or food
But I am very anxious that the right trend should be encouraged.
eating less?
The whole problem of modern civilization is that all this industrialization leads to concentration of power.
Power was more concentrated when there was no industrialization. Nehru & Co had taken power from British Viceroys because they were financed by Indian industrialists. Naturally, to keep his monopoly on power, Nehru & his successors would want to shackle Indian enterprises and make them subservient to bureaucrats under their control.
After all, ultimately the man who has the atomic bomb has got every power; it does not matter what parliaments you have, he has got all the power.
President Eisenhower had Executive authority, not a monopoly of power. He could only do what was legal and intra vires. Mao, at that time, didn't have nukes, but he showed that he had all the power in China.
And that power means a diminution or restriction, obviously, of national freedom and individual freedom.
Perhaps Nehru was thinking of McCarthyism. But the Courts prevented the full implementation of Eisenhower's Communist Control Act of 1954.
How to reconcile this inevitable concentration, this inevitable centralization, with individual freedom is the problem of modern civilization.
It had already been done- even in India- by the doctrine of checks and balances.
Whether it can be done or not, I do not know.
Nehru's expensive English education was wasted on him.
But that involves psychological changes and ultimately psychological changes can be brought about by the structure of the society we live in as well as by other pressures.
Thus Nehru's 'socialist pattern' wasn't actually economic. It was psychological. Why not simply say 'spiritual' and recommend spinning cotton like Gandhi?
Therefore, ultimately we should develop that structure of society which encourages the right impulses and not the wrong impulses, the right trends and not the wrong trends.
In other words, Indians should be turned into Pavlovian dogs 'conditioned' or programmed by the Government.
1 think that capitalism has done a great deal of good to the world, even though it involved suffering to many people. It is absurd to be always cursing capitalism, as to my mind this is completely wrong and it just confuses the issues. But capitalism and that type of society has had its day, in the broad sense of the word.
Its day was just dawning in South Korea and Taiwan and so forth.
And indeed, capitalism even in England and elsewhere is different from what it was in the 19th century. It is changing in England, may be it is not changing fast enough, but it is changing.
England was beginning to attract Indians to work in its factories.
Now, should we go through the same old process
It would be a new process for much of feudal, agricultural, India
and then ultimately try to reverse it and come back and try to change it?
What was reversed in England was Nationalization.
We have got the choice before us and we have the experience of others. Why not take the benefits of the higher technological and industrial experience,
Indians didn't have this. Europeans, Americans and Japanese people did.
without necessarily getting the wrong trends which will create difficulties and cause international and external conflicts?
This nutter believed that gunboats had been used to secure export markets. Since India didn't have a kickass navy, 'export pessimism' was justified.
Also I believe in our capacity in India — and may be elsewhere too — in winning over people rather than fighting them.
like the Pakistanis? No! The Chinese! They are our brothers! They will never invade!
I think, on the whole, we can do that. Of course, we can only do that when we have, apart from the friendly attempt, the pressure to win over. If we settled the Indian states problem, it was not only by goodwill, but also by the pressures that were exercised, whether by the new Government of India or the people of the states. Also there was the friendly approach to settle it in a friendly way, not to crush them.
Tell that to the Rezakars in Hyderabad.
Between these forces, we came to conclusions and we arrived at settlements, in which no doubt, we paid heavy sums of money as privy purses to the princes — which probably was not logical from the point of justice, but was nevertheless justified in the circumstances, because we thus brought about a very major political change without conflict, without the tremendous expenses of a conflict.
With hindsight, we think the opposite. But, to be fair, Nehru's own people weren't sure they really could hold power the way the Brits had done.
I think that can be applied to our social changes too. We can bring about social changes and developments, under pressure of events, by the pressure of democracy and also by friendly cooperative approach rather than the approach of trying to eliminate each other and the stronger party winning. I think, we can do that even in the industrial field.
Perhaps, Nehru meant that the private sector would get protection and 'the best of monopoly profits- viz. a quiet life'. But, in that case output would stagnate.
I think that even in the industrial field, the reaction of Indian industrialists as a whole — I am not talking of individual people — has been rather good, and I do not see why we should not utilise that. It creates an atmosphere of cooperation for going ahead. We can get the benefit of experience, ability, etc., of many people.
But where will the investment come from? I will gladly share my experience with you but I won't put money into a venture which, you tell me, you plan to take over from me.
As I have said, I do not want wrong trends. Now we talk of the public sector and the private sector. Obviously land and cottage industries are in the private sector, although there too I should like to see — and 1 think it is essential— the cooperative element coming in more and more.
In which case, it would be pointless to invest today. Wait till the cooperative is created. Sadly, by then there will be nothing to cooperate over.
As a matter of fact, it is the only way you can succeed; the only way to meet high level centralization is to have cooperative centralization.
Cooperatives don't have to be set up by the Government. External economies of scale arise without centralization.
There is no other way, whether it concerns land or anything else. It cannot survive against the big unit ultimately, unless it is tied up with the cooperative system which gives it the same advantage as the big unit with the centralized apparatus.
Big units may have diseconomies of scale. If they are eliminated through competition, well and good. But if the Government sets up a big unit with monopoly power, then the thing may turn into a money pit.
I am not against the industry which may be called the medium — sized or the big industry. As I conceive it, in future, I think all really big industries, all basic industries should be State-owned completely, all mineral resources and heavy industries and the like.
What is their incentive to make a profit? The Government may end up subsidising loss making industries.
The medium and also the small industries, I hope, will be cooperatively owned.
Nehru was against competition. Elections were all right, provided he won them.
That will be a gradual process. In between, whatever that period may be, even in regard to the medium industries, private enterprise should have scope. If you give any enterprise scope, I think, you should really give it adequate scope.
Which is what Nehru was refusing to give the private sector
If you allow them to function, you should give them scope. What should be the State-owned area is a matter apart from what you want to reserve for the State, because a particular thing may be strategic, i.e., of basic importance, since through its ownership you can control other things. If there is private ownership, it affects industries, for example, minerals. Of course, they are basic and they should be owned by the State and so also heavy machine making plants. Only if you have control of these can you really develop the country.
Or run it into the ground.
Of course, you cannot start everything but the wrong trends have got to be controlled. Therefore, such things as heavy machine making plants, minerals, etc., I think, should be owned by the State.
In which case, the State would have to find the resources to set them up. Where would it get the money from? The tax-payer? But she has no scope for making money. Perhaps the nationalised industries could make profits. If so, they could borrow money on financial markets by issuing debentures . But, that's Capitalism!
Nehru was aware that the World Bank had made a big loan to the steel company run by Sir Biren Mookerjee and was anxious that Government owned steel plants become operational- e.g. Bhilai built by the Soviets. This was paid for by exports to the Soviet Union under a Rupee-Rouble conversion programme quite favourable to the Russians.
In 1956 it was not obvious that 'wrong trends' would prevail. However, within a year or two it had become obvious that plans don't matter. Budgets do. You must cut your coat according to your cloth or, alternatively, hope that 'psychology' will cause everybody to think you are splendidly clothed when the truth is you are naked.
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