From The Swatantra Angle

Enclosing a cutting of his editorial comments on the proceedings of the Swatantra Convention held at Bangalore in the first week of this month, the editor of Commerce writes asking me to write up a concrete plan prepared in detail from the Swatantra angle. The favourable view he takes of our programme entitles him to ask for such expanded elucidation, as is possible, for a party in Opposition to give. But it is perhaps unreasonable to ask for a regular budget to be prepared by a new party without the assistance of full data as to resources and requirements from government secretariats. Reasonable or otherwise the demand may be, it is certainly not possible for me to comply with such a request. What we want is however clear enough, as clear as our criticism of what is now going on. We want the aims of socialism, that the living conditions of the poor should be made much better, to be fulfilled in reality and not merely sounded in empty slogans. We want industrialization to come more effectively and extensively to the rescue of unemployment. We want the production of the basic necessities of life in our country to be increased, so that the problem of scarcity in this respect should no longer remain unsolved. We want more prosperity within the limits of the potentialities of our nation, so that there may be more satisfactory and more even distribution of it at all layers of the social body. We want these things to be done without incitement of class conflict. This would be possible only if production is considerably increased through sustained encouragement of those who have to work in various ways and contribute their savings to this purpose. We want national resources to be computed and national investments planned thereupon, without succumbing to the ruinous temptation of gigantism. The cold war having changed its pattern we should not depend on foreign aid being available beyond the limits of repayment.

If these principles have to be put in concrete figures and terms, we require all the official data that are available to the Government and the services of its secretariats. In all seriousness, I say that if we are put in a position of responsibility, we can clear the stables and produce what the editor of Commerce demands. Of course there is bound to be the hangover of things already done or half-done but that cannot be avoided in democracy. That incubus must be allowed for in every case.

Once a licence is obtained for the investment of heavy capital and the organization of an industrial unit, it is absurd to hamper the task of the organizers and add to the cost of production by putting hurdles in the way of getting all the materials and the machinery necessary, from time to time, for the industry to be started and maintained in efficient condition. But ask any industrialist now enjoying the blessings of the permit-licence-quota raj and he will tell you his tale of delay, losses and frustration. All this must stop. Capital and enterprise can be attracted and kept at a high level of efficiency and production, if this suicidal policy of multiplicity of permits and taxes is given up. Let us tax profits as they come and in due measure. Let us not hurt ourselves by delaying and adding to the cost of production by ordering various levies, hurdles and taxes at all the stages of production. There is no need to complicate the tax structure this way. Imports from foreign countries will be taxed—we cannot help it—by the exporting nation. But why should we needlessly add our taxes to imports of material and machinery and increase the cost of the production which we deliberately plan, over and above levying an adequate tax on the end profit. The present policy makes industrial products needlessly too costly for our own internal consumption, and reduces all chances of export.

The burden placed now on the poor and lower middle classes is intolerable and must be removed. There should be no indirect taxation on the necessities of life; every levy which raises the cost of living of these classes should be withdrawn. There should be no “land revenue” levy under Swaraj in India. That item of taxation should be put in the limbo of forgotten things. It has no place in independent India struggling to produce food grains in adequate measure. Only a fee for registration of proprietorship and transfers should be charged and no tax on farming as such or on farming income, so long as our farming industry has not improved so as to become really taxable. Every little is a great and significant fraction of the miserable per capita income of our peasantry. The rupee earned by our poor people must be more effectively protected from falling in real value which a wiser management of our affairs can certainly prevent. This is intimately related to the general lines sketched here regarding national resources, and investments and borrowings.

The policy of raising money by basing the structure of taxation on the shoulders of the numerous poor, on the ground that a comparatively light burden on each head of a vast population will bring in a substantial total, must be completely given up. Our poor are in the position of the camel who awaits Only the last straw to break his back. Only those who can be taxed, according to immemorial practice, should be taxed and not others, directly or indirectly.

And these taxpayers, too, should be taxed in such measure only as will leave undamaged the zest for life and work, and for saving and investment; not as now, completely frustrated and drifting without enthusiasm for life or industry, and without a sense of security or certainty. This will of course greatly reduce the till for public expenditure. As against this, what is left over will be living seed for national prosperity and will bring into active operation the urge at the higher levels of our national life for increased industrialization. In natural sequence, the national till will be augmented so that the State can spend more money on the services required for national life in general, and for equalizing the amenities of life for all. This is the healthy way to attain the stated objects of socialism and not the way of torture and the killing of the sense of freedom and the way of national bankruptcy—which is the road we have been taking under the Statist regime. Gigantism must be avoided as an evil, and its disappearance should not be looked upon as a loss resulting from the pruning here advocated. What gigantism we have been already committed to, and on which investments have been heavily made, the giving up of which would cause heavy loss would have to be suffered as an unavoidable inheritance of folly.

The slogan of “go back to the village” is contradictory of the policy of increasing industrialization. It is not a slogan which will now receive any response. The rural population is pouring into the big cities where alone there are industries which offer possibilities of employment to the more adventurous sections of rural workers; This has created the too well-known slums of our cities and the horribly neglected villages. Instead of the futile, belated and meaningless cry of “go back to the village” where you can give them no employment, what we should aim at is to bring into being many more small industrialized areas spread all over the country. Let us create as many industrial towns as we can in each district of a State instead of concentrating the industrial workers in the principal cities only. A new pattern of urbanization on this principle must replace the present drift. Then the slums will gradually disappear of their own accord. We can then look after the working population better than we do now, giving them good drainage and sanitation, and good drinking water and good housing. Work will increase all over each State and absorb a much larger part of the rural population, automatically leading to all-round equalized prosperity and amenities of life. The whole face of the country will be altered. We cannot ever give good housing, good drainage and sanitation, and healthy drinking water to our vast population if we do not have a scheme of medium we urbanization such as herein sketched.

The concrete pattern emerging out of this will provide us with a proper basis for external borrowings. Borrowing will be easier. Our potential friends would gladly help in that respect if the picture herein drawn is adopted and put in concrete dimensions and terms.

Our foreign policy is not an item that can be placed in a separate chamber. Our defence services should be strong and reliable and well-equipped. But we cannot, without firm foreign alliances, be strong enough to deter aggression or remove the fear of aggression from abroad. If this and its favourable financial consequences be fully realized and a correct foreign policy shaped and put in action, our defence budget need not so greatly eat into our tax resources, Squeezed out to the detriment of national life. A Sensible foreign policy will itself be a national asset of great significance, both in itself and in its potential capacity for deterrence and developing a sense of security.

If the principles advocated here are given a fair chance to be worked out, the poor will immediately feel emancipated and lifted up from distress. The atmosphere will be cleared, the barbed wire entanglement of Statism will go, and people will breathe freedom. All this can be converted into concrete details and figures and a plan can emerge, not a twenty-year long fable divided into four alluring parts, but a clearly chalked out scheme adhering to the democratic way of annual budgets and established practice of securing yearly legislative sanction.