At What Cost?

Professor B. R. Shenoy has, in the course of an illuminating article on the Third Plan in Mysindia, given a few instances of the high cost of production in India against much cheaper world prices. We produce fertilizers in Sindri, the ex-factory price of which is higher than the landed cost of imported fertilizers. We produce at Pimpri penicillin to be sold at Rs. 1.25, whereas imported penicillin is 10 nP per million units, that is, we must pay more than ten times the price at which the imported drug could be supplied. We make refrigerators to be bought at Rs. 2,250, while a comparable U.K. unit would cost only Rs. 1,000. We must all buy our sugar at Rs. 700 per ton in India, the world price being Rs. 400 per ton and we export and sell our surplus sugar abroad at considerable loss. These are instances. The point is what Mr. Masani exposed in his speech, viz., megalomania - what Gandhiji described as Mr. Nehru’s weakness for big things - leads us to manufacture in India what can be and are made elsewhere more easily and more inexpensively. There is no prospect of reduction of cost in the future which may justify such undertakings. This is not patriotism. If we disregard the law of division of labour in a unitary world, in our ambition to do everything that everybody does and call prudence by the names of ‘reaction’ and ‘backwardness’, we arrive at taxation and yet heavier taxation and a lowering of standards of life. I wrote so recently and it bears repetition.