Question

In 1954, a Bombay economist named A.D. Shroff began a forum of free Enterprise, whose ideas on economic development were somewhat at odds with those then influentially articulated by the Planning Commission of the Government of India. Shroff complained against the 'indifference, if not discouragement, with which the state treated entrepreneurs.

At the same time as Shroff, but independently of him, a journalist named Philip Spratt was writing a series of essays in favour of free enterprise. Spratt was a Cambridge communist who was sent by the party in the 1920s to the foment revolution in the subcontinent. detected in the act, he spent many years in an Indian jail. The books he read in the prison, and his marriage to an Indian woman afterward, inspired a steady move rightwards. By the 1950s, he was editing a pro-American weekly from Banglore, called mysIndia. there he inveighed against the economic policies of the government of India. These, he said, treated the entrepreneur 'as a criminal who has dared to use his brain independently of the state to create wealth and give employment’. The state’s chief planner, P.C. Mahalanobis had surrounded himself with Western leftists and Soviet academicians, who reinforced his belief in 'rigid control by the government overall activities’. The result, said Spratt, would be `the smothering of free enterprise, a famine of consumer goods, and the tying down of millions of workers to soul-deadening techniques.'

The voices of men like Spratt and Shroff were drowned in the chorus of popular support for a model of heavy industrialization funded and directed by the governments. The 1950s were certainly not propitious times for free marketers in India. But from time to time their ideas were revived. After the rupee was devalued in 1966, there were some moves towards freeing the trade regime and hopes that the licensing system would also be liberalized. However, after Indira Gandhi split the Congress Party in 1969, her government took its `left turn’, nationalizing a fresh range of industries and returning to economic autarky.

Select the statement that best captures the purpose of the passage:

पर्याय

• Highlight that even though there were advocates for free-market and private enterprise in the early years of independent India, they were crowded out by others who supported a dominant role for the state over private enterprise.

• Explain the politics behind Indira Gandhi's decision to nationalise the banks.

• Demonstrate with the help of statistics how the preference of policymakers for Soviet-style economic policies prevented India's economic growth.

• Establish that devaluation of rupee in 1966 was vindicated by subsequent experience.

Answer 1

Highlight that even though there were advocates for free-market and private enterprise in the early years of independent India, they were crowded out by others who supported a dominant role for the state over private enterprise.