Nehruvian Consensus: An Analysis Of Colonialism In India

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Nehruvian Consensus: An Analysis At Independence, India inherited an extremely backward economy severely distorted by colonialism. The Indian economy was the largest economy of the world for the entire thousand years of the first millennium, contributing close to 30 per cent of the global GDP. Till as late as the beginning of the 18th century, India was still the largest economy contributing 25 per cent of the world's GDP, more than eight times that contributed by the United Kingdom. Not only had the Indian economy been brought to its knees but the country was partitioned and savage religious communal rioting led to one of the largest mass migrations in history. The challenges before the newly independent country in 1947 were thus enormous…show more content…
India’s First Five Year Plan consequently emphasized on industry. But Nehru was not opposed to agriculture either. Industry was to produce collateral advantages in agriculture. Agricultural production was to be raised through mechanization. Similarly in his programme of economic reconstruction, he provided an important place to rural and cottage industries and Khadi. Nehru never believed that socialism was equivalent to accentuation of production only through heavy industries. The Industrial Policy Resolutions of 1948 and 1956 amply demonstrate Nehru's commitment to develop large as well as small industries simultaneously. Nehru's faith in the development of cottage industries and Khadi demonstrates the Gandhian orientation of his socialist ideas. Nehru realized that "for keeping balance in the economy, self-sufficiency was to be promoted and for that as well as for the provision of work and employment village and cottage industries are of paramount importance. Thus, there is not much truth in the allegation that Nehru wanted to promote only heavy and large-scale…show more content…
Nationalization of large industry and financial institutions led to their monopolization and the suppression of competition. Secondly private entrepreneurship (including the non-profit sector) was suppressed through oppressive controls on every sphere of economic activity, converting businessmen into rent seekers. Thirdly, obsession with heavy industry led to the neglect of both labor-intensive light industry - rendered uncompetitive through rigid labor laws - and agriculture. The fourth negative consequence was a gross neglect of basic education and literacy. Fifthly, a large, unspecialized, overextended and oppressive bureaucracy was created that behaved like colonial or princely rulers. It was only with the gradual abandonment of this model that Indian growth accelerated and the welfare gap between Indians and the rest of the world started
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