Saturday 2 August 2014

What is to be done?

The test of every system, whatever it may be called, is one and only one : does it raise the standard of living of the masses ?

In other words, does it provide employment to the masses with adequate incomes and abolish unemployment, does it provide good eduacation, good healthcare and housing for the masses, etc ?

Now to raise the standard of living of the masses requires a massive, highly developed and modern industry, for that alone can generate the wealth necessary for this purpose. Agriculture alone cannot do this. in fact modern agriculture requires a highly developed industry to supply it tractors, combines, pesticides, fertilizers, etc.

Money does not fall from the sky, it can only come from a highly developed industry on a large scale. Even for setting up one primary school requires a great deal of money, to buy land, build schoolrooms, pay salaries to teachers and other staff, etc. We have to build tens of thousands of primary schools, high schools, colleges, Universities, scientific institutes, Medical colleges, Engineering Colleges, hospitals, etc. Where will the money for all this come from ? It can only come from a highly developed industry.

But to have a large, modern industry we must have a large market, because the goods which are manufactured must be sold. That is why we must remain united as a country, otherwise we will not have a large domestic market.

Over dependence on foreign markets is very precarious, because that foreign market may be captured by some other countries goods,or there may be a recession in that foreign country due to which it may not be able to buy our goods, and then our export industries will close down. So for stability we must mainly depend on our domestic market.

But if our people are largely poor they will not have the purchasing power to buy the goods which our domestic industry produces. That is why we must raise the purchasing power of our masses by raising their real incomes, that is, incomes relative to the price index, so that the goods manufactured can be sold.

The problem is therefore not how to increase production. There is no difficulty in increasing production, for the position today is very different from what it was in 1947. In 1947 there were few industries ( the British policy was to keep India largely unindustrialized so that our industries do not become a rival to British industries ),and few engineers and managers as compared to today. Today, however we have thousands of bright engineers and managers, and industry has grown compared to 1947. We can at any time increase steel production, or chemicals production, or production of anything with the help of our engineers and managers, many of whom are brilliant ( the Silicon Valley in U.S.A. has thousands of bright Indian engineers). We have also huge natural wealth which can give us all the raw materials we require, because India is huge in size.

But the point is that the goods manufactured have to be sold, and how can they be sold if the people are poor and do not have the purchasing power to buy them ? That is why the problem is not how to increase production ( for that can easily be done ) but how to increase the purchasing power of the masses, which will automatically raise their standard of living and give them decent lives, and also ensure that the goods manufactured are sold.

It is here that our genuine and patriotic intellectuals must apply their minds.


  1. excellent,excellent , maybe u shud rite an article in some financial newspaper!

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  3. Sir,
    Purchasing power can be increased in several ways, inflation-adjusted fair wages for those employed; creating employment opportunities for the employable; alternative livelihood options for those who may not be employable in the conventional sense.

    As an example there is enormous scope in tourism.

    Train the locals in etiquette and with their intimate knowledge of the fort or forest or locality they will provide a much better experience than an disinterested guide or a hotel driver who doubles as a guide.

    As the East Africans have done with the Maasai we can also showcase the traditions and culture of India of our tribals. We stop their migration to cities, empower them, sustain their culture and lifestyle and increase their purchasing power.

    There is no dearth of ideas in this nation. I think the problem is with execution, willingness to stay the course and not having a focus group looking at options such as these.

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  5. (

    I have noticed this also.

  6. My reply has been published in Hindustan Times and Indian Express today ( 3.8.2014). Justice Lahoti is not correct. I did write to him.

  7. Yup, i have read that also. but he did not comment anything about the IB report yet, lack courage to come out public, conveniently puts that as the first and last interview anticipating replies.

  8. ok..u did not recommend the judge,however did u hv the authority to withdraw the recommendation?

  9. There was no recommendation by anyone that he should be made a permanent Judge of the High Court. So where is the question of withdrawing any recommendation ?

  10. This article has given the insight about how we become self dependent in economic terms. How we can increase per capita income and become a industrialize nation with strong demand. The article was wonderful