Friday, January 16, 2009


Socialism – Industrial Revolution is a serious requirement for a nation to thrive. But rich individuals or business houses don’t aspire to bridge the gap between rich and poor. So, the state (read government) has to take responsibility to drive all the major industries. Whatever losses incurred, the rich should never be promoted to trade freely. There should be a lot of restrictions, regulations and bans on the private entities. The state should play the role of developing and managing the complete industrial base for the nation as a whole. This is Socialism.

Typical example - Post independence India under the visionary rule of Nehru, who envisaged a mixed economy, a government that would be a mix of capitalistic and communistic ideologies, where the state ran all the major industries and necessarily make the remaining dependent upon the state.

But things did not turn out, the way Nehru wanted them to. Bureaucrats enamored power and felt no shame in using it for the betterment of their own being. Bribing became a common phenomenon, from T.C to collector, from manager to peon, from tax inspector to sub-inspector; everyone employed under any government organization was corrupt.

Later on came Indira Gandhi with her stiffer, uglier policies of socialism – she nationalized all the banks (China still has all its banks owned by the government); imposed free trade barring acts like MRTP (Monopolies and Restrictive Trade Practices act). In her regime, came the era infamously called the License Raj, where a company was required to get licenses for almost every new act. You wanted to open a new shop; buy telephone, scooter; go abroad or for that matter anything which state felt like required license, you had to get a license. The same required a whole round of bribing starting from peon to the ministry.

As a result of all such (mal) practices and that too for such a long time, Bureaucrats gained more power and hence became more corrupt than ever.

But there was an uglier and much more unacceptable consequence bound to happen. The Indian businessmen created this hard and harsh notion, that here in order to run industries you have to be corrupt. A businessman before writing the first draft of his proposal/plan had to bear certain things in his mind:

  • No matter how good his plan was, he had to bribe the bank officials to sanction the loan.
  • No matter how he is killing his margin, he had to convince (read bribe) the ministry that he was doing it not for the sake of profits (A businessman starting a new venture and that too not for profit – how foolish!!).
  • Once the plan would go on track anyhow, there would be union troubles even before the first quarterly results would be declared.
  • Expanding the business would require more convincing (bribing) than starting the same.
  • In no case he could think of promoting the business oversees, pertaining to the strict laws with regards to exports and foreign trade practices.

(JRD always felt bad for not being able to convince Nehru (also Indira) about the benefits of a private enterprise parallel to the one owned by state)

So, what socialism did for Indian private companies willing to grow was something like this –
They kept on pouring acid instead of water to the seeds that were sown by someone else (private houses). Knowing the fact that the seeds would require proper care and nurturing and above all water, they still poured acid. Certainly, they killed most of the seeds; the plants were nipped in the bud. But the ones that were able to thrive even upon acid-care, Can you even imagine them to be any fruitful to the nation building. No they can’t. They can’t conceive any fruits for the people of the nation (who anyways were willing to eat anything that came their way, pertaining to the prolonged hunger and the prolonged beatings by the mighty).

The businessmen became corrupt from the root itself. Tax-theft was no more considered a theft, illegal imports, bribing the officials for official/unofficial sanctions, bending jurisdiction as per the trade requirements with the aid of contacts and the green notes became a daily practice. From a small kirana-store to the million-dollar business house, all lost their ethics, their morality; all they knew was how to get rid of the ugly, sticky clutches of the socialistic beast, Nehru created (though unknowingly).

But times have changed ever since India adopted the free trade practices. Now Indian companies are buying out their foreign counterparts. And there are enough of initiatives by the government to pour water instead of acid.

1 comment:

Ranjeet Mishra said...

Hey sudharm!

wow! What an analysis.

Vision is one thing and implementation is absolutely a different thing,
Mixed economy was really a good thought but when it comes to practicality (because people thought profit is a bad word) it failed and let the parallel companies to not grow in the fashion they can.

I think later (new visionaries most of them are new business man) broke this mentality of thinking bad for profit, and in turn we today leaving in an era where we can experiencing private companies making there impact on world stage and socially India is more secure.