Self-reliance should not get contaminated by statism

In his interaction with the Sarpanchs of Gram Panchayats throughout the country, Prime Minister Narendra Modi has rightly underlined the need for self-reliance. While striving in that direction, his government has to beware that the new mantra doesn’t become a revival of the deleterious Nehruvian policy of import substitution.

“This pandemic [Covid-10] has thrown at us new challenges and problems which we have never imagined, but it also taught us a very good lesson with a strong message. It has taught us that we have to be self-reliant and self-sufficient. It has taught us that we should not look for solutions outside the country. This is the biggest lesson we have learnt,” he said.

While we should look for solutions outside the country, we should not become xenophobic, which in India usually means distrust of and contempt towards anything Western. It happened when Jawaharlal Nehru was prime minister. An unabashed socialist, he not only hated capitalism but also the countries that were its votaries—all Western nations, especially the US.

This not only led to the rise of the traitorous V.K. Krishna Menon, the man responsible for the 1962 debacle, but an army of intellectuals steeped in anti-Americanism. It is galling to such thought leaders that India and America are much closer today than the two countries were seldom before.

Intellectuals, along with the Congress leadership which promoted them for decades, were horrified when in February the Modi regime feted US President Donald Trump, the leader of the country they hate the most is given so is being feted by (It is another matter that the same America haters strove and strive to settle their kids in America).

Quite apart from the rabid the anti-Americanism which was occasioned by disdain for capitalism, the generally anti-Western attitude of ruling class also resulted in ruinous economic policies whose baneful consequences are felt even today. From the laudable principle of self-reliance to dislike of the West to hatred for America to the disgrace of 1962 and starvation-like conditions in the 1960s, the process was smooth. But it was the efflorescence of the poisonous seeds of socialism that were planted by Nehru and his cronies in the policy framework as well as in public discourse.

In the 1950s, Nehru adopted import substitution industrialization (ISI). India adopted the strategy of ISI in the fifties. The idea was to achieve self-reliance by promoting domestic basic and capital goods industries. At the same time, the domestic units producing consumer goods were to be protected. The assumption was that the cost disadvantage in protecting the consumer goods sector was comparatively less than in capital and basic industries. Another assumption was that consumer goods are inessential whereas capital and basic industries are essential.

The fatal flaw, however, was the centrality of role accorded to government in general and public sector undertakings (PSUs) in particular. In the name of industrializing the country, politicians and bureaucrats, advised by pinkish of economists, created red tape so long, strong, and tortuous that the even almost three decades of liberalization have not been able to do away with it.

We hope that Modi’s emphasis on self-reliance is not used by the pink deep state to further tighten its stranglehold over the system. We also hope that the government would show more faith in private enterprise than in bureaucrats..