Indian Political Science Association

HOW SHALL WE PLAN DEMOCRATIC SOCIALISM IN INDIA ?

Author(s): R. C. Patnaik
Source: The Indian Journal of Political Science, Vol. 26, No. 4, CONFERENCE NUMBER:
XXVII INDIAN POLITICAL SCIENCE CONFERENCE: MYSORE, 28th, 29th, & 30th DECEMBER,
1965 (October-December,1965), pp. 131-135
Published by: Indian Political Science Association
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 HOW SHALL WE PLAN DEMOCRATIC SOCIALISM
IN INDIA ?
Shri R. C. Patnaik,
Reader , Fakirmohan College , Balasore

In aU our discussions of Demociatic Socialism in India, a few outstandin

facts cannot be ignored. First, whether we are progressing towards a rea
higher standard of living through domocratic means and with provision
equal opportunity to all citizens ? Is our Democratic Socialism providin
basic necessities like food, employment, education, health and sanitation
all ? Has a beginning been made in providing economic security to all
Secondly is our Democratic Socialism successful in reducing economic and
social disparities ? Is it ensuring rapid expansion of the economy without
concentration of economic power and growth of monopoly ? Thirdly has
the system been able to create values and attitudes of a free society - a sens
of common interest and obligations among all sections of the community ?

The answers to the above questions may not be so easy, but we can alway
proceed to answer them without any bias. The basic objective of India'
Five year plans was that through democracy, widespread public participatio
and socialism, rapid economic growth would be possible. The working of th
Five Year Plans was expected to reduce disparities in income and wealth and
also prevent concentration of economic power. It was also expected to bui
up a society which would fundamentally derive its strength from within . Have
these objectives been achieved during the last 15 years of planning ?.

There has been, no doubt, some progress, particularly in the industrial

and tertiary sector but the contribution of agriculture to real national income
has come down from 49-0 per cent in 1950-51 to 42.4 per cent in 1963-64
What is distressing is that the per capita real income has only marginally
increased to about Rs. 300/- in 1963-64 compared with Rs. 293/- in 1960-61
This is because of the high annual growth of population at a rate of 2.4 per
cent and inflationary rise in prices. Our socialist society seems not to hav
made any headway in tackling the problems of self-sufBciency in agricultur
unemployment and inflation. How can we say that there has been equ
opportunity provided for all in the matters of employment, when figures
unemployment at the end of each plan, are mounting up. The back-log of
unemployment at the end of the First Plan was 5.3 millions ; at the end o
the Second Plan it rose up to 10 millions and at the end of the Third Plan i
is expected to rise to 13.5 millions. Apart from this, there is still larger volume
of under-employment. What is worse is that our annual rate of increase o

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 132

1.3 per cent in national income is one of the lowest in the world. The lot of
the pooiman can be greatly improved, which is what a socialist Government
ought to do first if inflation can be checked and cost of living brought down.
This will be possible only when agricultural production is substantially raised
not through price increase but through larger yield per acre. The magnitude
of the public sector does not matter much. What matters is the effectiveness
of the programmes undertaken and proper administrative set-up to yield quick
results. So long as the progress made in agriculture, housing and supply of
drinking water continues to be poor, the pursuit of socialism will be in
vain. In the words of late Jawaharlal Nehru " It was only when the productive
apparatus of society has increased in the country, that the question of distri-
bution became important."

Secondly in our Democratic Socialism the objective was that the benefits
of economic development must accrue more and more to the relatively less
privileged class society and that there should be progressive reduction of the
concentration of income, wealth and economic power. In essence this meant
a certain rise in economic and social status of the common men. The findings
of the Mahalanobis Committee unfortunately point out that, (1) There has not
been any significant change in the overall distribution of income during the
Plan Period. (2) Available fragmentary data relating to distribution of
important items of wealth indicates the degree of inequality in the distribution
of economic assets and consequent concentration of economic power
in the hands of a numerically small section of population. The Com-
mittee had come to the conclusion that the working of the planned economy
has contributed to the growth of big companies and the main beneficiaries
from bank credit have been the big and medium enterprises. The top 10 per
cent of the population accounted for only 34 per cent of the pre-tax income

the bottom 25 per cent

(Report of the Mahalan
to the Bulletin of the R
control 60 per cent of
people in these areas poss
In spite of the various
far, there is greater con
what would be justified
forethat the Governmen
and distributive activit
nomic power and reduc

What may be necessar

tion of special conditions

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 133

dual enterprises in the private sector. This is a difficult problem because of

the existence of mixed economy, in our Democratic Socialism, which pres-
supposes co-existence of the public and private sectors, co-operating together
in the task of economic development in order to establish a new social order
based on equality of opportunity, diffusion of economic power and enhance-
ment of human dignity. This fact has to be faced that a mixed economy
is bound to give rise to certain social and economic phenomena which may be
basically in contradiction to socialist values. The inherent contradiction
between mixed economy and socialist society, if not resolved by deliberate
and well-conceived policy, can lead to annihilation of the socialist society
at the end. There is every possibility that in such an economy, the public
sector may expand too much and the private sector may merely become an
agent of the public sector or the government may depend too much upon the
private sector with the result that the public sector may lose its significance.
There is also the fear that the private sector may not have sufficient freedom
and initiative to develop and there may be too much of taxation thus checking
the profit motive. Existence of large private sector also makes it difficult for
the public sector to get managerial and technical personnel for manning public
enterprises. The private enterpiises may give all the patronage to retired
Government officials and sons and relatives of high government officers and
politicians in the matter of appointments, purchases, sales and advertisements,
who may influence the government policies. Moreover the ownership of the
press by the private enterprises helps to foi muíate public opinion in their
favour. The contributions made by the private enterprise to the party funds
particularly the parties in power, may also have a tremendous influence on the
decisions of the government. All these tendencies are now noticeable in the
working of Democratic Socialism in India and it is not easy to suggest
remedies, but unless the remedies are forth-coming, Democratic Socialism
cannot function effectively.

It should be remembered that socialism involves a whole set of controls at

every major stage of production, distribution and consumption, but according
to Democratic Socialism thesis in India, " Controls should be implied only
when they become indispensable in the larger interests of the community."
The objection of Democratic Socialism is not to controls as such but to the
faulty administration associated with the controls. There is, therefore, no
reason why we should not make a beginning with the control of prices. There-
after we should consider bringing about limitation of the sizes of individual
enterprises in the private sector and putting a ceiling on urban incomes,
in this respect it may be necessary to nationalise the private banks. Banks
constitute a major private undertaking which finances a lot of private under-
takings haphazardly and adequate planning is necessary in the distribution of
their assets. It is also necessary to regulate recruitment to various services in
the private sector, so that it does not make a monopoly of retired government

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 134

officials who have held key positions in the governmental machineries^before.

There should be immediate enquiries made if there is any allegation made of any
connection between private companies and Government officers or elected
politicians. In this connection, it may be also necessary to encourage the
trust form of organisation for newspapers and news-magazines instead of
leaving the press completely in the hands of the private enterprise. The
Government should also start publishing powerful dailies and weeklies to
mould public opinion as is the custom in all socialist countries.

Thirdly one of inherent failures of Democratic Socialism is that in the

initial stages it does not arouse any significant change in the attitudes and
motivations of the masses of the workers either in the field or in the factory.
This has been a basic defect of Democratic Socialism of Great Britain. Accord-
ing to Loucks, " The nationalisation of industries did not automatically make
the rank and file worker believe that he was working for himself rather than for
a profit-minded boss nor did it make him more willing to accept the displace-
ment of labour by mechinery or to postpone or forego an increase in his own
wage in the interest of stabilising the economy." (Working of Economic
System, Page 408). In India we also face the same dilemma at present. There
is always demand for higher wages, better amenities without increase of produc-
tive efficiency. " The rank and file continue to drag their feet, thereby some-
times preventing the development of efficiency." It may be necessary to put a
stop to this tendency by labour welfare measures, social security schemes and
effective Trade Union Regulations. In order to change the attitudes of the
people it may be necessary to encourage small factories in rural areas in large
numbers which will not only aid production and lessen unemployment but
gradually change the mentality of the people. Introduction of modern methods
and techniques will also help to change the attitudes of the people. Increase in
agricultural production cannot be attained by mere exercises of the input and
output, but we should take into account the psychology of the cultivator and
provide him with necessary incentives so that he can work harder and produce
more. More experimental farm with modern methods of production should
be started throughout the country and irrigation facility should be the
first concern of the state. So also in the factories, labour should be given a
substantial part in the management and there should be an expanded progra-
gramme of social security and social insurance schemes like that of Great
Britain.

In all those countries where Democratic Socialism was in vogue, there has
been a veritable flood of regulations on individual citizens both as consumers
and as businessmen or workers and many of the regulations have vitally
restricted the freedom of the consumers and producers. Essential food and
other consumers' goods have remained in short supply even up-to-date in
England and there has been rationing in force for many articles and rations

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 135

have been very meagre. A socialist programme of austerity is an essential

condition for success of any type of socialism. That austerity should not be
misjudged for failure. A socialist state functioning within the frame work
of private enterprise and regulated capitalism takes considerable time to
achieve results. We, in India have laid sound foundations of political demo-
cracy with our adult franchise, free elections, free press, independent judiciary
and fundamental rights but we have been unable to build up foundations of
true secialism by providing economic security to all. The conditions of the
West where mixed economy is working cannot be compared with the conditions
obtaining in India. The problem of production is more fundamental in Indian
conditions than the problem of distribution. Our Democratic Socialism is
" socialism not only based on democracy, dignity of human individual and
social justice." (Para 6 of the Note on Democracy and Socialism discussed by
A.I.C.C. inJaipur) but its" object is also to attain an economy of abundance
in the country by the fullest and the most effective use if human and material
resources, so that the well-being of every individual can be assured." (Para 6
of the same note referred above). What exactly are the implications of an
"economy of abundance," it is difficult to know, but it is of the highest import-
ance, that there should at least be provision for the basic needs of every indivi-
dual comprising essential requirements in respect of food, clothing, housing,
education and health as speedily as possible, as a first step towards achivement
of socialism. A national programme for self-sufficiency in food should be
the first task before we take up the problem of distributive justice. The
essential question now is how can the government get the private sector of the
economy to operate according to plan. This has to be brought about in a
permanent way. What the British Socialists have not yet solved is the problem
of creating conditions and institutions under which the social motive can
operate effectively for more than a short emergency period such as war. We
in India are making only a beginning. Socialism should not mean at this
stage, mere changes in property relations and the institutional framework. It
should mean fundamentally, the creation of a new set of social values. We
must build up democratic processes by which community participates at all
levels in the framing and implementation of policies automatically and it has
to be done through a process of give and take and without moral degeneration.
In order to provide a firm basis for our socialistic society, what is therefore
necessary is an atmosphere of mutual confidence and co-existence between the
private and public sectors, for then only, the social motive can operate effective-
ly in the larger interest of the society.

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