1
Evolution of ideas on nation-building and economic modernization
The purpose of this chapter is to provide an outline of the essence of ideas on nation-building and economic modernization as developed during the freedom movement. Indian nationalism before independence provides ‘various shades of visions’ for transformation and restructuring the Indian society. The development of ideas on various aspects of nation-building has a considerable bearing on the present-day ideologies (political programmes) of national political parties.
This process commenced in the middle of the nineteenth century, when India developed ‘a westernized native class to interpret and mediate the new ideas and institutions’.1 In this context, Majumdar observed that
‘A new ideology suddenly burst forth upon the static life, moulded for centuries by fixed sets of religious ideas and social conventions. It gave birth to a critical attitude towards religion and a spirit of enquiry into the origin of state and society with a view to determining their proper scope and function’.2
The reasons for the emergence of ‘modern consciousness’ are the following: English education, liberal ideas of the West, critical outlook on the past and new aspirations for the future.3 The modern consciousness helped in inculcating the spirit of questioning on the basic issues concerning state, society and religion.
It is proposed to provide the views and observations of some prominent nationalist leaders as well as important committees on nation-building during this period.
I
Raja Rammohan Roy 1772–1833
Raja Rammohan Roy was the chief proponent of the ‘new spirit’. He exhibited it by undertaking a number of social issues for the reform and enlightenment of his fellowmen. Some of the significant social issues relate to the establishment of the Brahma Samaj, the reforming of social abuses of Hindu society, the establishment of English language schools and newspapers, the champion of the liberty of the Press, etc.4 For his contributions relating to Hindu society and religion, Raja Rammohan Roy has been rightly called ‘The Father of Modern India’.
He was also conversant with the economic problems of the country. He was of the view that poverty was not only due to the landlords and dealers but also due to the appropriation of revenue from agriculture produce by the government.5 He also observed that the ‘comparative freedom of trade after 1813 had created an illusion of prosperity’. He advocated agricultural and industrial modernization of the country ‘with the aid of western technique, western capital and western enterprise’.6 He believed ‘that economic modernization must involve the masses of the population, the impoverished tillers of the soil and that it should not merely benefit the new Indian middle class working in alliance with the new European middle class’.7 He was in favour of continuance of the Permanent Settlement with ‘necessary reforms to alleviate the pressing miseries of the ryots’.8 He was in favour of the modification, of the ancient laws of inheritance, of free trade, of the ‘elimination of the remaining monopolistic privileges of the East India Company’ and of the entry of foreign capital and land revenue reforms to help the process of building more wealth and prosperity.9
The new awakening
The period between1858–1905 has been described as the emergence of new India. Some of the contributing factors were these: the rapid growth of education, and the establishment of the Brahma Samaj, the Prarthana Samaj, the Arya Samaj, the Ramakrishna Mission and the Theosophical Society. These movements were brought out by ‘the impact of new ideas and beliefs’. These movements in a significant manner encouraged the growth of individual and organized efforts for social reform.10
The emergence of the Indian National Congress (INC) in 1885 has been the most significant event in the growth and development of the national consciousness and awakening. The INC served as a platform for debate and discussion on political, social and economic reforms.
It is proposed to provide a brief account of the significant features of the socio-economic and political vision of the INC leadership. This vision was comprehended by a small fraction of the society.11 This period is generally characterized as the years signifying the ‘gradual development … of the nationalist understanding of the economic basis and policies of British imperialism in India and the evolution of an alternative nationalist programme for the development of an independent national economy’.12 Some of the most outstanding leaders of the Indian Nationalist Movement, who contributed in a significant manner on the theme of nation-building, are these: Dadabhai Naoroji, Mahadev Govind Ranade, Romesh Chunder Dutt, Gopal Krishna Gokhale, Mahatma Gandhi, Subhash Chandra Bose and Jawaharlal Nehru.
Dadabhai Naoroji 1825–1917
The exploitative nature of British rule in India, which was first analysed by Raja Rammohan Roy, came under bitter attack in the speeches and writings of Dadabhai Naoroji. This exploitative nature he explored with his famous theory of ‘‘the drain’’ of India’s wealth to Britain. Naoroji’s work Poverty and Un-British Rule in India (1901) provides a comprehensive exposition of the ‘drain theory’. Some of the important forms of the economic exploitation were the following: the direct political rule; the heavy civil and military expenditure (with exclusive British employment); the investing in transport and communication to control India; an unrequited export of Indian commodities and bullions; the investment of British capital with guarantee of returns by the state; the private remittances; the payment of annual tributes; the post-retirement migration of men of liberal professions to England; the converting public finance into an instrument of exploitation through regressive taxation on items of basic mass consumption like salt, kerosene and cotton and the manipulation of the pound-rupee exchange rates to the disadvantage of India.13
Dadabhai Naoroji not only provided the analysis of poverty in India but also underlined the economic reforms necessary for the prosperity of Indian people. Self-government or ‘Swaraj’ was the first pre-condition of the reform in India for the prosperity of the country. He advocated the use of capital in productive channels, as India had both natural resources and an abundant supply of labour. He also suggested the steps necessary to reverse the process of ‘economic drain’.
Naoroji in his economic reforms suggested a positive role to the state, encouragement to private enterprise both Indian and foreign, moderate taxes, advantageous land tenure and improved technology for raising productivity, etc. He also recognized the importance of economic overheads like irrigation and cheap communications and speeding up the process of public works. He also favoured a system of mixed economy: ‘association of government and private enterprise in which government control is necessary, so that each takes its risk and profits according to its shares’.14 He advocated political independence for the development of a country ‘As long as the people of a country have no share in its administration the powerful stimulus of patriotism and self-interest cannot come into action’.15
Mahadev Govind Ranade 1842–1901
Justice Mahadev Govind Ranade is often hailed ‘as the Father of Modern Indian Economics’. His monograph Indian Political Economy (1892) is considered as the ‘cornerstone of the economic theory which underlies the present Five Year Plans’.16 He believed that ‘national development is an integrated process to which economic development was, no doubt, an important, but only one, dimension’.17 He was a rationalist and his contribution was largely in the area of social and economic reforms.18
Justice Ranade’s twelve essays on Indian Economics, many delivered between 1890 and 1893, cover a large number of issues: credit organizations, state encouragement of agriculture and industry, emigration, local self-government, emancipation and relief of the agricultural classes and the alienation of land. Analysing the prevalence of poverty, Justice Ranade observed ‘we are a people of little resources. Many millions among us scarcely earn a couple of annas a day, many millions more are always underfed, and live on the borderland of Famine and slow Death, into which the failure of a single Monsoon precipitates them’.19
While describing the whole economic situation of the country, he observed ‘we are standing on the edge of precipice, and the slightest push down will drive into the abyss below of unmixed and absolute helplessness’.20 In this context, while discussing the functions and the role of the state in economic development, Ranade advocated that ‘The State … as the National Organ for taking care of National needs, and the duty of the State is not simply maintaining peace and order, but also such functions as Education, both Liberal and Technical, Post and Telegraphs, Railway and Canal Communications, the pioneering of new enterprise, the insurance of risky undertakings’.21
The reorganization of rural credit in India was another issue addressed by Ranade in the following terms:
No fact in the economic condition of this Country arrests attention more forcibly than the contrast presented by the hoards of unused Capital, stored up in the vaults of the Presidency and other Exchange Banks, and the high Premium Government Securities command on one side, and, on the other, the utter paralysis of industry in rural India, due to the poverty of the resources of the Classes engaged in the production of Wealth.22
These words ‘re-echoed in 1969 when the demand for the nationalization of banks came up before the Parliament of free India’.23 He pleaded for the reorganization of credit on some sound and progressive basis which would help in the promotion of national well-being and provide assistance not to agriculturalist classes, but to ‘Spinners and Weavers, Carpenters, Smiths, Dyers, Potters, Brass and Copper, Silk and Embroidery workers, Shopkeepers, Carriers, and all the Trades and Professions that are now practised in this Country’.24
In order to reclaim India ‘from the ancient bondage of Feudalism and Status’, Justice Ranade advocated ‘encouragement of New Industries in the Country by means of advances, or subsidies, or guarantees according as circumstances require’.25 Besides the...