A JOURNAL OF CURRENT, ECONOMIC AND POLITICAL AFFAIRS ANNUAL NUMBER

January 1957 Volume IX— Nos. 3, 4 & 5 Rupees 2/8

CONTENTS EDITORIALS The National Economy of Recent Cut in Imports Analysed Socialism of the Soil 67 United States —H C Malkani . . 179 —John Kenneth Galbraith .. 85 AGRICULTURE AND COM­ Wrong UN Policy 69 Control of Public Expenditure MUNITY DEVELOPMENT Automobiles not in Gear . . 70 —Contributed . . 93 Rural Electrification OUR AMERICAN LETTER Work Round the Clock R P Aiyer . .111 No Plan for India's Gap —Amartya Kumar Sen .. 95 Rural Underemployment —From Our Washington Casual Employment of a —Dhires Bhattacharyya .. 117 Factory Labour Force Correspondent . . 141 A Note on Co-operative —Daniel Thorner .. 121 Farming FROM THE LONDON END Real Wages in India 1939-50 —Amlan Datta . . 119 Sterling and World Finance in Shreekant A Palekar . . 151 Dawn at Koraput 1956 . . 143 Changing Profile of an Indian —M L Dantwala . . 133 OUR DELHI LETTER City Community Development and Foreign Exchange Deficit . . 149 —I P Desai . . 165 Economic Growth FROM EAST PAKISTAN FOREIGN EXCHANGE FOR —Contributed . . 163 East-West in Pakistan THE SECOND PLAN Performance in Agricultural —From a Dacca Muslim .. 161 Import Trade Control and Planning Industrialisation —Contributed . . 197 POLITICAL PERSPECTIVES V K Ramaswami .. 97 MONEY AND PRICES Secular Saint's Ballade Foreign Exchange Gap —"Agni" .. 72 —"Savyasachi" . . 101 Recent Monetary Developments Political Perspective for Sushil Ghosh .. 181 Economic Planning . . 73 Light Engineering Industries: Export Possibilities Banking Undergoes Structural Focus on Bengali Refugees Shri Ram . . 105 Changes — Taya Zinkin . . 89 Sukumar Chakrabarty . . 201 Foreign Exchange Reserves Socialistic Pattern of Society Contributed .. 107 Inflationary Phase in 1956 and The Second Five Year —By "Trend Theorist" . . 204 The Measurement of Inter­ Plan Inflationary Price & Wage A K Dasgupta . . 91 national Capital Flows Contributed . . 113 Policy and Monetary Disin­ The State of the Congress flation The Outlook for India's Balance By "Business Executive" . . 206 Sisir Gupta 171 of Payments India's First Elected Parlia­ B N Ganguli . . 125 AROUND THE MARKETS ment Lean Times for the Share­ —C V H . . 189 Food Imports and Food Prices —P K Mukherjee . . 129 holder . . 193 SPECIAL ARTICLES Utilisation of Foreign Aid FROM THE CHAIR Some Theoretical Doubts on —V M Dandekar . . 137 The Associated Cement Com­ India's Plan-Frame Delhi's Global Quest panies Ltd .. 185 —Shigeto Tsuru . . 77 For Loans, Aid and Export Mill versus Cottage Industries Credit NEW ISSUE —Jan Tinbergen .. 81 Contributed . . 173 Indian Aluminium Company Ltd 210 Socialism of the Soil THE date of publication of this occasion like this, one should not be powers choose to maintain it. India issue has been advanced by a parochial, nor concerned overmuch is not a major world power. Even few days to make it clear that it with the immediate present. The so, small powers can, singly or joint­ is the Annual, and not the Re­ first is a little difficult after the re­ ly, exert moral pressure so that public Number, as also to be able buff India got from the Security major powers desist from disturbing to handle the production of what Council of the United Nations over peace. Despite the 'hydrogen' stale­ is for a small organisation a big- the Kashmir issue and the second mate, Egypt and Hungary are re­ sized job. The Republic Day illu­ nearly impossible when the elections minders of the need for disinterested, minations and the crowds, and the are drawing near and the Second detached small powers, including day of Gandhiji's martyrdom that Plan is encountering heavy weather India, to function as sources of me­ comes In their wake, even before in the very first year. diation between the conflicting in­ the scaffoldings erected for fixing India wants to live and move terests. the lights have been taken down with the world, her efforts to build Here in India, one cannot fail to from the public buildings—they a bridge of peace must continue. notice a turn in the tide. Congress follow in quick succession in the Her foreign policy may not have redefined its goal at its Indore ses­ gestation period when the Number' won her many valuable friends, but sion and if Indore really spelt out is in the press, and disturb the se­ does it need to be vindicated because Avadi, it was in giving an Indian renity which is needed to fix one's of that? World peace can be main­ reorientation to the Working Com­ sights on the horizon. Yet on an tained only as long as the major mittee's conception of socialist pat- January, 1957 THE ECONOMIC WEEKLY ANNUAL tern. True, Article 1 of the Congress should not perhaps be too sure or taking it in the aggregate, since no Constitution which delines its object dogmatic. He has not ceased to other party can hope to oust Con­ was amended from "the establish­ grow. Years have passed since his gress from power, the simple econo­ ment by peaceful and legitimate Discovery of India in Ahmednagar mics of it is that none would be means of a cooperative common­ Jail and in these years he has been able to raise the funds needed to wealth" to that of a "Socialist co­ stepped in the world of affairs, had fight the Congress on an all-India operative commonwealth". Since opportunities of widening his know­ scale. These aspects of reality may the cooperative commonwealth was ledge of developments in India and not be pleasant to contemplate, but also to have been based on "equality abroad and of coming directly into they should not be ignored. of opportunity and of political, eco­ contact with and seeing for himself nomic and social rights", it is not different types of economies and These are also rooted in the much of a change, unless the Work­ ideologies in action. In this pro­ soil. How are these roots to be ing Committee delines socialism. cess of growth, some illusions must unloosened? The cooperative There was some elaboration, how­ have been broken, some beliefs fal­ sector which is to transform the ever, in the election manifesto which len away and others strengthened. economy gradually by decentralis­ was also adopted at Indore. The Has he come to find in our way of ing it, by distributing income and manifesto declares that the economic life and our thought something that property more widely and by subs­ as well as social revolution are he had not quite seen before, even as tituting acquisitiveness by a larger gradually taking shape, but "accord­ late as the time of passing of Avadi social purpose, this sector has not ing to India's own genius and me­ Resolution? yet come into the picture at all. thod, they take place peacefully and Many valuable years have been cooperatively." Adherence to Gan- On the eve of the elections, this wasted and no experience has been dhiji's moral values is reaffirmed.] is a gesture as much to reach the gathered even in cooperative farm­ people as to persuade Congressmen Democracy and socialism remain ing, not to speak of cooperative to convert themselves to the creed village-management. A larger the basic objectives of the Congress, now professed by the Congress. The subsidy for cooperative credit "But we have to adhere to peace­ majority of the voters who chose to societies is no sensationally novel ful methods not only because they exercise their franchise or were per­ experiment in a new social policy are in tune with India's thinking, suaded, cajoled, or dragged to the that can claim to initiate economic from the time of our ancient sages polling booths to vote in the last ele­ and Ashoka to Gandhi, but also be­ ctions, did not vote for the Con­ or social transformation. cause only thus can we maintain the gress. The Congress got a com­ It does not follow, however, that unity and integrity of India, and not fortable majority of seats, all right, any other party has anything better waste our substance in internecine but not a majority of the votes to offer, though their election mani­ conflicts. Only thus can we achieve polled. Those in charge of Con­ socialism through the democratic festos may be more extravagantly gress elections know it and draw worded. Even the Indian voter is method, which we value as ensuring the correct conclusion that the pre­ the freedom of the individual". The wise enough to understand that stige or socialist leanings of the those who are not likely to take re­ manifesto goes on to say, "the Congress are not enough to get the socialist order is a way of life based sponsibility can afford to be more votes. To win the elections is the free with their promises, because on the people and not merely on Immediate pressing problem; there the effort of Government. It is in they run little risk of being judged would be enough time for the imple­ the measure that the people develop by performance. mentation of socialist pattern when their strength, their discipline, their It is the Congress which put itself the Congress is returned to power capacity to work and their co-oper­ in the dock by pledging to fight Moreover, what happens to a parti­ ative activities that socialism comes poverty ignorance, disease, and in­ cular constituency or a taluka or Into being. equality of opportunity, particularly town is always more important than the last, since it does not propose what happens to the Congress. In subsequent clarifications, Pandit to give primary education to all the Nehru went further. He did not see To-day, the nomination of the children even after ten years of why India should copy some other candidates by the Congress is not office. To develop the economy country. "Socialism in India must proceeding according to the without widening inequalities is have its roots in the soil and must principles which the Congress is itself a formidable, if not an impos­ be suited to Indian conditions." pledged to uphold, viz no truck sible task even with careful There would be no dispute about the with caste, no communal entangle­ planning. No country has yet latter, but how socialistic is Indian ments, etc. There may not be been able to achieve substantial society that Pandit Nehru should another all-India party to stand up economic development and also to decide to give this Indian reorienta­ against the Congress but in the dis­ completely eliminate inequality at tion to Congress Socialism. tricts and talukas, and in hundreds the same. But to profess to give Panditji has never been a tradi­ of small constituencies, loyalties equal opportunities to all, some day, tionalist. He is no revivalist either; continue to run on caste and com­ without planning to give a chance on the contrary, he has nothing but munal lines, the tendency to ac­ to all the children to go to school, contempt for revivalism. The ex­ quisitiveness for which Nehru in­ has no mitigating factor to condone treme form of nationalism which dicts capitalism, has not perceptibly it, since some other countries have expresses itself in the refined terms weakened, and the local Congress at least provided schooling for all. of a supposed cultural mission for a Committee can ill afford to ignore people and has its still centre in an any of these hard facts. For the Indore has spelt out Avadi. Whe­ Indian Soul, which is different from common voter India is only a shade ther the Congress is willing to take the idealised configuration of other less of an abstraction than the so­ further timely measures to ensure peoples all these are equally re­ cialist commonwealth which is yet Socialism will be known In the next pugnant to Pandit Nehru. But one to come into being Then, again, five years.

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