First Fruits

For a considerable time past, the Swatantra Party has been pointing out the folly of placing the whole or the greater part of the weight of foreign obligations on the State, instead of reducing that burden by the encouragement of foreign capital coming into private investments in India, in every possible and desirable form. It has been laying stress on the great advantages of the private investment of foreign capital in India as against the borrowing policy followed by the Government. In the third week of January this year I wrote:

It is very nice to talk of Rs. 12,000 crores, of which, the bureaucracy will manage Rs. 8,000 crores (never mind the waste) and leave the' rest to competing favourites in the 'private' sector to whom permits and licences will be issued.. But how will the nation pay back the Rs. 12,000 crores plus interest?

Our Nasik money (whatever the latest designs) cannot be depended on for this. We must know what gold we can dig out or what modern articles we can prepare and hawk to the prospective sophisticated consumers of those goods in Western countries-. Let us be told about this and then we can say the Plan is a plan, not till then.

I repeat what I have said before, it would have been relatively wiser to ask the capitalists of America and Britain to invest in India in partnership with venturesome Indians (and there were many who were and there are many still who are eager for it) and let this amount of Rs. 12,000 crores come into India that way, and not via the national Government, in which case the risk and the responsibility and the task of management would be theirs and would be exceedingly well done and borne without burdening the people with fresh direct or indirect taxes or with the prospect of bankruptcy. Progress and prosperity would have easily come that way, although it may not have fed the megalomania of the ruling clique.

To my question, what is your plan of repayment, there is no answer but the non sequitur statement that all successful people borrow in the world of business. It is true they all borrow, but they borrow with a plan for repayment, except those who do not intend to repay, who are not successful people and who should- be' in prison and not in business !

Again, I Wrote in the first week of February as follows

No good businessman borrows without some definite plan and expectation of production to meet the calls for repayment, based on reasonable calculation. American and British capital could be encouraged to flow into private partnership in India. Industry could thrive with frugal management and the help of foreign capital and know-how. It would be a responsibility of those who are in- charge and would help the nation's progress. But Government borrowing for public management falls into a different category.

There is now a welcome realization on the part of the Congress Government of the better way of exploiting foreign aid. It is refreshing to read what The Hindu columnist Leo writes in a recent issue of that paper:

“With the growing difficulty in securing foreign exchange resources and the need to evolve some practical basis by which the strain of servicing foreign obligations would be considerably reduced, it has been for some time past emphasized that the entry of private capital should be encouraged to a greater extent than hitherto. The clarification by the Central Government of its attitude towards participation by foreign interests in the development of our industries is therefore to be welcomed. It is good to know that there will be flexibility in the procedures governing the grant of industrial licences where foreign participation is involved”.

     If a special department of the Commerce and Industry Ministry will be opened to deal with this work, it is hoped that, as a result the irritations and vexatious caused by the numerous licensing and other formalities, which delayed and hampered good private projects, will be reduced and not increased. These irritations are not always the consequence of want of manpower. They are on the contrary a chronic disease attendant on official authority-, and the more the staff, the greater the sweet exercise of this power to keep men waiting.

     The Government has given indications now that there will be more encouragement of the flow of foreign capital into private industry and much more flexibility of policy, and much less annoyance and delay. All this is good, but it is necessary also to realize that this welcome changes has come about as a result of the pressure of an Opposition party that stood for reason as against an unplanned Plan of State-borrowing from abroad in which the ruling party had bogged itself. The disaster of this policy was obvious but even the obvious was refused to be seen by the ruling clique. Nor was it realized by the people who supported the regime of the Congress, so great was the maaya of modernism boosted by the Prime Minister. It seems as if it is now slowly realized that it is not wisdom for a nation to get into heavy foreign debt, without a definite and feasible plan for repaying it, and that it would be much better to induce foreign capital to deal with private industrialists between whom and the foreign investor the responsibility of good and profitable management would be shared.

     It will no doubt be stoutly claimed that this policy is an evolution of the ruling party's own unaided wisdom, and that it owes nothing to the views of the Swatantra Party or any other external advice. It does not matter what may be claimed by the ruling party, but it does matter that those intimately concerned with the development of industry in India have now a demonstration of the effect of an opposition party and its pressure on the intelligence of the Government and its official advisers. The nation benefits by an opposition party much more than is generally realized in this country. Opposition begins to give results, even before it takes shape in the form of elected members sifting in Parliament. The movement itself has achieved a change of policy in many things and in this important matter of switching from State-borrowing to foreign capital investment in the private sector. It remains, however, to warn those concerned that it is not wise for them to be content with such immediate results, and yield to the temptation to let things remain at that and save themselves from doing anything more in the direction of building up the Opposition into a massive parliamentary reality. Let them not become complaisant, so that one may be compelled to cry in the words of Milton :

What wise and valiant man would seek to free
These, thus degenerate, by themselves enslaved?
Or could, of inward slaves make outward free?

     It is hoped that the good returns already obtained from a vocal opposition will not produce complacency but will act as an incentive for further effort which may be crowned with the successful establishment of a stable balancing force in the dynamics of the governance of our national affairs.

     It would be miserable pusillanimity to be content licking up immediate advantage and do nothing more, satisfied with the gracious condescensions of the ruling party. The moral of immediate successes should not be complacency but greater sustained effort. Such immediate results cannot go on for long and will stop, if a real strong Opposition party is not formed. There should be no relaxation in the work of setting up a party to serve as a standing threat to the ruling clique and a competitor for the seat of power. Otherwise, the power of the ruling party in a 'welfare' State or in a permit licence-regime becomes absolute, and we all know from Lord Acton what absolute power leads to His warning has been often referred to, but frequent quotation has not reduced the truth of that warning. With the present trend to expand the field of governmental power, the danger pointed out by Lord Acton has become much more serious than during his time, as we have already experienced in India.

     Parliamentary government in the present day is under attack. It is attacked from outside by the propaganda of the communist States; it is under an insidious and more dangerous attack from inside, which issues out of the political greed of the party in power. When the party in office seeks, by exploiting its temporary advantage and by improper and devious means, to hold on to power, it brings the parliamentary system into contempt. The best safeguard for democracy and the parliamentary system of government is a strong Opposition. It is not disloyalty but true loyalty as distinguished from parasitism and interested flattery to help the formation of an Opposition when it is virtually absent, and the ruling party is steadily assuming the role of dictatorship.