India is under a regular five-year plan, which is based on well researched and informed decisions. Priorities there are not set at the whims of politicians. In Pakistan’s case, however, setting up of a coal-fired power plant in Sahiwal was the result of a whimsical decision, so to speak.
If anyone other than Dr Singh can be treated as the architect of modern Indian economic structure then he is Dr Montek Singh Ahluwalia, who like Dr Manmohan Singh, was born in our part of Punjab (the 1947 partition of the Subcontinent divided Punjab into two parts—the West Punjab belonging to Pakistan and the East Punjab, which became part of India).
Free Market and Socialism
Socialism remained the backbone of Indian society for over 40 years. Pakistan tried to copy the Indian model in the 1970s. The most difficult task for Dr Manmohan Singh was to get away from this mindset. The presence of Communists in the government as coalition partners had added to the enormity of his task.
He stated: “We need to expand the scope and the area for the operation of market forces. A reformed price system can be a superior instrument of resource allocation than quantitative controls. But markets can only serve those who are part of the market system. A vast number of people in our country live on the edges of a subsistence economy. We need credible programmes of direct government intervention focusing on the needs of these people.
We have the responsibility to provide them with quality social services such as education, health, safe drinking water and roads. In the same way, the development of capital and technology intensive sectors, characterised by long gestation periods, such as transport and communications and energy will need to be planned with much greater care than ever before.
The socialist experiment in charting a new path for accelerated industrial transformation of an underdeveloped economy and polity did achieve considerable success in developing technological and military capabilities, accumulation of capital for rapid industrial growth and human resources development, in countries such as the USSR. But recent developments have shown that this approach too suffered from major weaknesses, particularly in its allocative efficiency, in the management of technical change, control of environmental degradation and in harnessing the vast latent energy and talents of individuals.”
This is the most important and visionary statement of Dr Singh. He had admitted that the era of radical socialism had come to an end.
However, he, like Thomas Piketty, that “unbridled capitalism suffers weaknesses, particularly in its allocative efficiency, in the management of technical change, control of environmental degradation and in harnessing the vast latent energy and talents of individuals”.
Wealth Creation & Consumerism
Wealth creation has been socially considered as a sinister objective in the subcontinent’s society. This mindset persists in both the countries. On this matter, it is stated:
“For the creation of wealth, we must encourage accumulation of capital. This will inevitably mean a regime of austerity. We have also to remove the stumbling blocks from the path of those who are creating wealth. At the same time, we have to develop a new attitude towards wealth.
In the ultimate analysis, all wealth is a social product. Those who create it and own it, have to hold it as a trust and use it in the interest of the society, and particularly of those who are under-privileged and without means.
In highlighting the significance of reform, my purpose is not to give a fillip to mindless and heartless consumerism we have borrowed from the affluent societies of the West.
My objection to the consumerist phenomenon is two-fold. First, we cannot afford it. In a society where we lack drinking water, education, health, shelter and other basic necessities, it would be tragic if our productive resources were to be devoted largely to the satisfaction of the needs of a small minority.”
This taboo against wealth creation and accumulation appeared to have been eliminated by removing the stumbling blocks from the path of those who are creating wealth.
However, it has been suggested that there has to be a new attitude towards wealth and those who create and hold it must remember that they hold it as a trust and use it in the interest of society, and particularly of those who are under-privileged and without means.
(To be continued on Sunday)
Copyright Business Recorder, 2023