“Karishamai Neta Gandhi Ka Chintan”,

Publisher: Social Research Foundation, 2016, ISBN: 978-81-921665-5-1, pp 45-57

Gandhian philosophy on Economy: Relevance for Contemporary India

Dr. Mishu Singh

Maharana Partap Govt P.G. College
Hardoi
mishusingh17@gmail.com

Abstract

Mahatma Gandhi represents a stature of unique integrity, truthfulness, reliability and

compassion. He was a man of deeds and a leader who commanded considerable influence
over the globe. His greatness laid in his towering character, his leadership, his inner
experiences and his messages of truth and non-violence. His thoughts influenced almost all
the social, educational, cultural, economic and political problems of the contemporary world.
Although not a methodical philosopher, he expressed many ideas, which are highly relevant
to the modern age. Today, largely due to his vision, India has its political independence.
Gandhi was not an economist, but his economic vision is full of understanding of economy
and processes as well as of human and social reality. His aims were Sarvodaya, full
employment, use of country's own resources, preservation of ecology, equality in income
distribution and employment opportunities, where everyone is given the right to earn
according to his capacity. The rich should serve the society after satisfying his needs. Gandhi
Ji voiced his economic position in the language of the people, rather than that of academic
economists. Therefore, they never noticed him as a very great economist in his own right. His
economic aims were different from conventional economics. The economic philosophy of
Gandhi is much written about, discussed and talked about. However, when it comes to
implementation, his vision is criticized for being impractical, unreasonable, unrealistic and
imaginary. It is a tragedy for India that we have never given much relevance to ‘Gandhian
Philosophy’. This chapter is an attempt to analyse present economic scenario from the
Gandhian economic perspective.

Key Words: Gandhi, Economy, ReVolution, Relevance, 21st Century, Swaraj,

Swadeshi.

Introduction:
 When the whole world was just concerned with capturing power and maintaining it
for their own grandeur and name, Gandhi Ji came very strongly and said that power is not for
dominance and exploitation but for service and transformation of humankind. Gandhi Ji
critically evaluated the modern civilization enslaved to materialism, greed and pride. He
wanted to liberate man from the slavery of violence, materialism and consumerism. He
believed that this era of blind confrontation & disagreement, comparison and competition
would give way to an era of negotiation, collaboration and co-operation. Power will be no
more for domination but for liberation and transformation. Gandhi showed us that the only
way to fight against the evils of the monopoly of power is through decentralization of
political and economic power. He was not any economist but emerged as an economic
reformer. His ideas on economic issues, based on certain basic beliefs gave a model
regarding economic development, are still found relevant, based on which we can interpret
what kind of economic arrangement is the need of the hour. Gandhi was inspired by the
thought of the American activist and writer, Henry David Thoreau and above all, the Russian
writer, Leo Tolstoy. From them, he developed his understanding not only of non-violence but
also of his own chosen way of life: simplicity of needs, focus on the means and techniques
used to achieve the ends, the fundamental requirement for a sharing of wealth among all
people, and a focus on grassroots self-organization of decentralized and democratic
communities. The Marxian policy of neutrality and its emphasis on the exploitation of labour
also influenced Gandhi. He was infatuated to Ruskin’s heterodox doctrine that the wealth of a
nation consisted, not in its production and consumption of goods, but in its people (Chavan,
2013)

How Gandhian philosophy is relevant to contemporary society? This is a question that

every intellectual of modern society have in their minds is influenced by the radical ideas of
Gandhi. He visualized the economic development with a holistic approach and aimed at the
socio-economic reconstruction of society, so his thought must be viewed and imbibed by and
large in this context. Gandhi believed that “Economics sans morality is wrong. Gandhian
mode has very important place in the history of economic thought, however, the modern
generation tends to scorn the Gandhian thought as “old fashioned and anti-progress” (Ishii,
1994). He was mainly concerned with dignity, liberty and the welfare of an individual and
felt a sense of responsibility towards oneself, to others, to society and perhaps to the world
beyond. He wanted the same arrangements between the labour and industrialist to ensure a
smooth association, which would improve efficiency with increased labour welfare (Pani,
2002). Gandhi Ji gave the idea of useful work, which was helpful for all communities, lack of
untouchability, ban on liquor, small scale and cottage industries, focus on basic education,
Gram Swaraj. The economic development is never achievable without these essential social
inputs. Reconstruction in the rural areas is the main source of development in villages.
According to him, each village should be totally independent and efficient enough to fulfil
their needs (Bhuimali, 2014). This is what on which the entire structure of economic thinking
should be based. This was an essential part of Gandhi’s moral view of the world (Nayak,
2005). .

Gandhian Thoughts on Economy:

Gandhi Ji's economic thoughts are imbibed in his philosophy overall. Once, he was
asked to write down the text of his economic thought, he refused to say that his philosophy is
based on the basic principles to solve the routine, day to day practical problems. So, it is not
possible to summarize them in a few equations. For Gandhi, the economy was meaningful to
the extent that it opened out the possibility of well-being for all people. It implied a system of
production, distribution and consumption defined by the vital needs of most underprivileged
and deprived people in the society with the aim of supporting the values of human life,
recognizing human dignity, non-violence and creative labour. He spread the ethics of
economic self-sufficiency all over India during the colonial period. His views on economics
were simple and straightforward, which would make India economically self-sufficient,
satisfying its own needs in the domestic market in their own ways. This would not only
improve the rural economy of India but also demoralize the British economic motives of the
exploitation of Indian people.

The axis of the economic thought of Gandhi is the simplification of needs and
limitation of desires. He believed in satisfying the need rather than satisfying the greed. That
is why many people think that he is the originator of the idea of a ‘zero-growth’ economy:
“To live simply so that others can simply live”. He said, “It is necessary to bring an end to
this mad rush that drives one to always want more money, In what concerns my rule of life, I
must say that I have never dared to possess that which I did not need”. “True independence”,
he said, “will not come from some people seizing power but rather from the power which we
all have to oppose the abuse of authority. In other words, we ought to come to independence
by inculcating the masses with the conviction that they have the possibility of controlling the
exercise of authority and of maintaining it with respect.” He wanted to eradicate all class
distinctions and build a social order of self-sufficient, self-governing village communities
having maximum autonomy. He thought that it was not the development of the cities which
would make for a non-violent autonomy of the Indian people, but the consolidation of the
political and economic autonomy of villages could, in his view, support the building of a non-
violent society.

Gandhi and Industrialization:

For attaining smooth development of the economy, it is imperative to develop all the
regions of the country simultaneously. The overall progress of the entire economy depends on
the balanced development of all the regions. The economy of India is currently the world’s
fourth largest in terms of real GDP (Gross Domestic Product) after the USA, China and
Japan. It has registered ninth position in terms of GDP (Gross Domestic Product) and fourth
position in terms of PPP (Purchasing Power Parity) and recorded highest constant growth
rates in the 21st century. It has accounted for a remarkable rate of growth in 2011-12, which
is estimated at 7.1 percent (Economic Survey 2011-12). However, after independence, the
Indian government did not accept the economic views of Gandhi. The first Prime Minister
Jawaharlal Nehru of Independent India had other ideas of rapid westernization and
industrialization than promoting small scale and cottage industries (Baviskar, 1999). In this
process of globalization, Indian government framed various policies aimed at the
development of large-scale industries and multinational companies (Dodh, 2012). These
growths in industries lead to a more consumption of natural resources, which were available
in abundance. Industrialization with globalization leads to expansion of horizon of economic
development.

With time, many foreign companies were established, which used highly advanced
technology thus making the Indian economy more technologically advanced. Nevertheless,
the real picture has a very different story. Due to the Globalization, the small-scale industry is
abolishing. Technology based large scale industries are using the capital-intensive technique,
which is increasing unemployment. Profits are going to only entrepreneurs and the gap
between the rich and the poor are increased day by day (Nachane, 2007). The environment is
ruining due pollution which is affecting the health of human beings. Industries established in
urban areas are ignoring the villages where the maximum population resides. No big
industries like khadi, handlooms, sericulture etc are established in villages or rural areas. The
small-scale and cottage industries should be given a purposeful place in Indian economy for
the fulfilment of the socio-economic objectives of Gandhi’s in achieving sustainable growth.
So there is need to move back to Gandhian economic philosophy that always favoured
Swadesi and self- reliance of villages.

Gandhi Ji never advocated the destruction of factories and machines but wanted
regulation of their excesses. He had explained that small-scale rural based economic system
does not reject machinery but objects the craze for machinery. He said, “The craze is for what
they call labour-saving machinery. Men go on ‘saving labor until thousands are without work
and thrown on the open streets to die of starvation. I want to save time and labour not for a
fraction of humankind but for all. I want the concentration of wealth not in the hands of few
but in the hands of all. Today machinery merely helps a few to ride on the backs of millions.
The impetus behind it all is not the philanthropy to save labour but greed”. He suggested very
beneficial and constructive economic ideas to solve many socio-economic problems.. The
true sense of Gandhi’s ‘Swadeshi’ lies in enhancing and motivating cottage and small
industries. It provides opportunities to genuine talent and generates employment for Indian.
It is thus favourable for India to adopt the Gandhian ideology if India wants self-sufficiency,
as ‘Swadeshi’ India will never face these problems.

Relevance for Rural Industrialization: Emphasis on Gram Swaraj and Swadeshi

Gandhi Ji was never against machines. In his words, “I wish to save hard labour and
time of not just one section of society but for all. I wish that money is not centered in the
hands of few rich people but is accessible to all. The reason why Capitalists want to use
money is not to save human labour and to ensure the welfare of all, but to maximize their
own gain. I am against this concept. I am not against machines but wish to define their
limits.” He gave a very useful model for economic development in India by re-establishment
of India from the lowest level. He gave an idea of reconstruction of Indian villages as he was
concentrating on the development of the common person and more significantly the
development of the depressed and needy group of people (Mathur, 2011). Gandhi Ji was
influenced by Ruskin’s book ‘Unto This Last’ and that it would not be out of place to say that
Ruskin was the father of Gandhian economic thought. Gandhi summarized the teachings of
‘Unto This Last’ under three basic truths:
1. The good of the individual is contained in the good of all (Sarvodaya).
2. Each person has the right to earn a livelihood from his work and there is the dignity of
labor, meaning thereby that there is nothing called high and low labor (Bread labor).
3. The life of the tiller of the soil and the handicraftsmen is the life worth living (Village
industries and Swadeshi).

The global economy drives people toward high performance, high achievement, and
high ambition for materialistic success. This results in stress, loss of meaning, loss of inner
peace, loss of space for personal and family relationships, and loss of spiritual life. Gandhi
realized that in the past, life in India was not only prosperous but also conducive to
philosophical and spiritual development. He imagined self-reliant villages, free from
dependency on big cities, which cure them of exploitation. Gandhian approach for the
reconstruction of village economy, based on “Gram Swaraj and Swadeshi” was the pillar of
economic development and played a significant role for the improvement of human beings.
He visualized the importance of the rural economy and thought that country’s economy can
be stimulated by invigorating village economies of agriculture as it avoids economic
dependence on external market forces that could make the village community vulnerable. It
also avoids unnecessary, unhealthy, wasteful, and therefore environmentally destructive
transportation. It is the way to comprehensive peace: peace with oneself, peace between
peoples, and peace with nature. According to him, if we want Swaraj built on nonviolence,
we will have to give the villages their proper place (Sethi, 1979).

He promoted small-scale and cottage industries of Khadi, handloom spinning and

weaving mills, sericulture and handicrafts in India. He believed that it would be beneficial to
Indian economy because these industries based on family labour and low investment may
lead the indigenous market. On the other hand, the use of large-scale industries would create
the problem of competition and marketing in the economy. He presented Khadi as a sign of
patriotism, equal opportunity and independence. He believed that Khadi India could defeat
the British rule and help rebuild of the Indian society. Gandhi’s clear rationale behind the
choice of Khadi was lead by his anxiety of “Work to all.” This is clear from his statement in
which he stated that “If the government could provide full employment to all without the help
of Khadi and Village Industries, I shall be prepared to wind-up my constructive programme
in this sphere”. He said, “Production of Khadi includes cotton growing, picking, ginning,
cleaning, carding, slivering, spinning, sizing, dyeing, preparing the warp and woof, weaving
and winding. These, with the exception of dyeing, are essential processes every one of which
can be effectively handled in the villages”. He was of the opinion that large-scale industries
have capital intensive, which would concentrate of wealth in the hands of few. If small-scale
industries were introduced then people would never face the problem of production and
external market (Baviskar, 1999). In addition, the problem of increasing population can also
be solved by promoting small-scale industries as they can solve the problem of
unemployment because of using labour intensive technique and providing employment
opportunities (Kurian, 2013).

Relevance for Contemporary India:

In the developing countries like India, unemployment is growing rapidly every year.
Large-scale industries and monopolistic pattern of ownership of means of production at the
national and international levels have created glaring economic inequalities between the rich
and the poor, between those who live in the villages and in cities. Such a system resulted in
the concentration of wealth in the hands of a few, and poverty and misery for the vast
majority of people (Friedman, 2008). Analysing the economic situation in India, we find a
three-tier economy emerging, the urban, the rural and the underworld economy. Urban
economy is flourishing because of the concentration of wealth and resources in the cities.
Exploitation and oppression go unabated and the result is that the rich becoming richer and
poor, the poorer. Underworld economy is the by-product of the exploitative and corrupt
system that exists in cities. Thus, modern industrialization has created miseries in slums and
villages, and black money has created islands of immoral and luxurious life in urban centers.
There is a direct connection between underworld economy and the urban economy. The
mushroom growth of urban and underworld economy has paralyzed the normal and gradual
growth of rural economy. Rural economy, as a result, is not growing fast and it is not able to
compete with the industrial economy. The farmers and agricultural labourers are
marginalized and exploited. Growing population and mechanization have further aggravated
their problems. Large-scale industries cannot sustain large populations and cannot provide
employment for all.

Here comes the relevance of Gandhian economic thoughts. The country has to have
categories of industries: (i) Cottage Industries, (ii) Small-scale industries, (iii) Medium-scale
industries, and (iv) Large-scale industries. The other should not produce what is produced by
one industry. This way adequate employment facility can be provided to those who live in
villages so that they need not migrate to urban areas to be exploited again. This would also
curb the unchecked concentration of wealth and resources in cities. Janata Party under the
influence of the great Gandhian leader, Jayaprakash Narayan in 1977 recognized the need of
the Gandhian Economic Policy (Sethi, 1979). E.F. Schumacher, who perceived the
importance of Gandhian remedies to solve unemployment, suggested his own remedies on
the Gandhian model:
(i) Agro-based industries should be established in rural areas and small towns,
(ii) The means of such production should be simple and cheap and should be within the
reach of an average individual,
(iii) Raw materials must be locally available for production and consumption, and
(iv) Quantum of production per man is not important, but the main consideration is maximum
employment potentialities for the unemployed and the underemployed.

J.D. Sethi, a renowned Gandhian has convincingly insisted on the importance of agro-
based industries in rural India to solve the unemployment problem. V.K.R.V Rao, a leading
economist of India, reiterated the relevance of Gandhian Economic Policy for more
employment opportunities and better-living conditions. He opined that the Indian economy is
based on class market rather than on the mass market. Further, he pleaded for the production
of goods for mass consumption, which alone could lead to more employment opportunities,
and better-living conditions for the masses (Radhakrishnan, 1992). “Swadeshi” finds its
revival today in Indian polity especially after the entry of multinationals and monopolisation
of industrial products. Of course, the modern term for Swadeshi would be 'self-reliance'. The
new spirit of Swadeshi is to fight against increasing grip over Indian economy and cultural
erosion as a weapon of economic independence and then for political independence. His
emphasis on the small-scale industry has become a source of employment generation and
decentralisation of the economy leading to self-reliant villages. Nowadays the villages get
utmost priority in Government plans and programmes. This is nothing but the other name for
Gandhian Sarvodaya. His concept of Swaraj and social equality quite agree with the modern
liberal ideas that are the call of today. Every one of us is striving today to reach that
Gandhian goal. The successful struggle of Nelson Mandela in South Africa bears testimony
to the Gandhian doctrine (Lala, 2006).
 The 21st world with all their eccentricity, yearn for power, science, and technology of
modern warfare, laughs today, at the basic postulates of Gandhi but for this the present
generation is not to be blamed. Any concept of ideology, if not reinterpreted correctly
becomes invalid for the present. The same happened in the case of Gandhi. The post-
independence era marked a complete departure from Gandhian thoughts and was dominated
by Nehru’s model of economic development. However, Gandhi can never die either his
philosophy. As we enter the 21st century, humanity faces a host of global issues including
nuclear weapons, terrorism, war, extreme poverty, disregard for human rights, discrimination
based on sex, religion and race, and the destruction of ecosystems and environment around
the world (Sheean, 1955). These larger issues directly manifest on the individual level, as
blatant self-centeredness, violence, and greed and a general weakening and division of the
spirit of humanity within people. Gandhi had unmistakably foreseen this predicament- the
incoming disaster as early as 1909 in his book "Hindu Swaraj". Throughout his life, he
continued to warn against it and showed the way to avert it through truth and non-violence.
Thus, Gandhi cannot be taken as a model in a strict sense. It should be taken as a beacon, a
ray of hope. At present, we have the task of revalidating Gandhian ideas by a new
interpretation of his thoughts and actions. The entire humankind will be immensely benefited
if Gandhian thought is followed in the right perspective (Fischer, 1983).

Conclusion:

We have noticed how the notions of development took shape during the freedom
struggle and after independence with the ideas of Gandhi and Nehru vying with each other
until it linked the development of the country with planning. We may wonder, in retrospect,
what if India had not followed the Nehru’s planning model of development since Gandhian
vision appears so relevant today. However, it was clear to Gandhi that other leaders did not
share his ideas during the freedom struggle itself while Nehru’s invocation of modernity and
scientific progress was extremely appealing to all. He was no prophetic visionary like
Gandhi, but his vision of planned development found acceptance among the multiclass Indian
state. It was not only because he wanted to have a strong and united India but also because
his vision of planned development in a democratic manner enabled the elites to capture the
state power without a fundamental change in the state structure of pre-independence India.

Six decades down the line, one may ask, “Is Gandhi relevant, even now?” The answer
is, more so than ever before. He taught us how to reclaim our freedom from the state by
giving us the concept of ‘Satyagraha’. Gandhi Ji died in the year following India’s
independence; still his economic thoughts have a great impact on Indian economy. Though
India initially followed the principle of mixed economy, after the eighties, India embraced
Capitalism and is now engulfed by forces of Globalization. His approach and concepts are the
only solutions if the humankind wants to survive. This paper has argued that despite
profound economic and social changes that have taken place since Gandhi‘s lifetime, his
economic ideas continue to be relevant today. The need for a re-orientation of economic
ideology is keenly felt today. There are many individuals and organizations that are already
working along principles that Gandhi would have endorsed. Empirical analysis and
assessment of such ongoing initiatives are beyond the scope of this paper.

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