Swadeshi economics, not FDI

| | in Oped


Mahatma Gandhi’s model of growth and prosperity is about the satisfaction of everyone's needs and not the unnecessary abundance created by mass production that has become the cornerstone of development

The recent debate over foreign direct investment has once again put the spotlight on the state of India’s economy. While there have been heated exchanges about the pros and cons of FDI in multi-brand retail, no one is fully convinced that it is the best thing for the country. Even after 65 years of economic experiments, we have a languishing agricultural sector, inadequate and poor infrastructure, and high inflation in consumer goods. A post-1947 closed Indian economy brought in its wake the dreaded licence era and rampant corruption. To remedy these ills, the Government introduced radical reforms through liberalisation in 1991. Even that has failed to solve the fundamental problems of our economy.

Votaries of FDI claim that it will bring foreign technology into the country and create employment for lakhs of Indians. But are we then admitting that India can be run best on ‘foreign’ funds and ‘imported’ concepts? Can’t India, the land of swadeshi, produce a simple, effective and indigenous economic system? In fact, Mahatma Gandhi did conceptualise such a system, based on his deep understanding of the country’s ground realities. The foundation-stone of Mahatma Gandhi’s economic theory was sarvodaya — the well-being of all; and his proposed system was a vehicle for both economic and social justice.

Alongside political independence, he laid an equally strong emphasis on economic freedom. His concept of self-reliance was based on the simple and powerful idea that our country must use its own resources for its optimum development. Mahatma Gandhi believed that, rather than industrialisation and the development of cities, it was the economic autonomy of villages that could support a strong and self-reliant India. With its predatory pricing and giant stores in urban areas, FDI in multi-brand retail will only drive small, rural enterprises into oblivion.

His vision for a prosperous India was based on a predominantly rural economy which fully utilised the potential of traditional cottage industries. He stressed that a balance must be maintained between the primary sector (agriculture, forestry, fishing), the secondary sector (industry) and the tertiary sector (services). In the issue of Harijan magazine of November 30, 1934, Gandhiji wrote: “We must try to induce them (village artisans) to improve their workmanship, and not dismiss them simply because foreign articles or even articles produced in cities, that is, big factories, are superior.”

Critics argue that a mainly village-based economy cannot produce goods in sufficient numbers to satisfy the demands of a huge population. However, Gandhian economics is about the satisfaction of everyone’s needs and not the unnecessary abundance created by mass production. Mahatma Gandhi said: “The earth supplies enough to satisfy the needs of each person but not the greed of each person. It is greed, rather than a scarcity of resources, that has created the problem (of poverty)”.

In a country like India — which is capable of spending hundreds of crores on events such as the Commonwealth Games — poverty is a national shame; and no economic reform has been able to root it out or even to greatly minimise it. In 2010, the World Bank reported that 400 million Indians fall below the international poverty line. For such a country, the Father of the Nation had rightly prescribed that it is necessary to “bring an end to this mad rush that drives one to always want more money.”

In order that the reasonable needs of every Indian may be fulfilled, he proposed the simplification of needs or the limitation of desires. The aim of a healthy society must be “to live simply so that others can simply live”. He advised: “Always try to produce things in the place where you are and avoid the unnecessary circulation of goods-for that is where waste occurs...”. It was recently revealed in Parliament that the amount of foodgrains wasted in Food Corporation of India godowns has increased by an alarming 10 times over the last two years. Is it not shocking that in a country of 400 million hungry people, tonnes of rotting foodgrains are thrown into rivers?

The vision of swadeshi is not just an academic treatise given by an idealist or patriot; it is a practical and robust economic plan to address this country’s inherent problems. A living, breathing example of the Gandhian economic plan is the Anandwan commune in rural Maharashtra, founded by Baba Amte in 1949. Here, each and every resident — even the physically challenged — contributes to its economy in some way. The community together produces everything it needs, including cloth, mattresses, carpets, ready-to-wear garments, leader goods, furniture, and even notebooks. Not only does this result in self-sufficiency, it also bestows a deep sense of self-respect and dignity on the residents of Anandwan.

If a tiny group of physically challenged people can prove the success of the Gandhian economic model through sheer commitment, surely a country of more than one billion people can achieve prosperity through similar means of swadeshi?

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