Swadeshi A Perspective Presentation

A friend of mine Mr Jindalji a retired civil engineer gave me the book “India Unbound” written by Mr Gurucharan Das. It is needless to say that it is an excellent rendering of the Indian scenario particularly after the 1991 economic reforms, introduced by the then Prime Minister Mr PV Narasimha Rao. It Is also known that the present Prime Minister Mr Manmohan Singh played a vital role in bringing these reforms as the Finance Minister in Mr Rao’s cabinet. Mr Gurucharan Das with his Harvard academic background and experience in multinationals like M/s proctor and gamble has picturised the economic scenario and the progress that followed through service sectors etc. The best testimony for his work I see, is from no less a person than Mr NR Narayan Murty, the founder and the architect of Infosys IT business corporation.

The perception

Though, I have all the appreciation for this informative, thought provoking and scholarly work, that looks like a thesis, I beg to differ his expressed thoughts on swadeshi in Chapter twenty titled ‘modern vs western’ wherein he listed ten reasons of his own concluding that the approach is irrelevant to our country. Professional economics are alien to me since I retired as a professor of Chemistry, but yet I have my own perception towards the economy that is affecting the common middle class masses of India to which, very much I belong to.

Swadeshi and inferiority complex

The first reason he mentioned was that swadeshi brings in inferiority complex and the seventh was that smart governments ignore swadeshi lobbies. In support of this he quoted that successive US governments ignored the plea of US auto industry lobby, to limit the import of Japanese cars. Ultimately, US auto industry could gear up and survive the competition. It is justified as far as corporate world is concerned, that too in a US like economic conditions and the governmental administrative setup. I feel we cannot draw parallel with US or any other country that is dominated by corporate market driven economies. However, it is good that the Indian corporate industries like Tatas, Mittals, Ambanis etc are excelling well on the international scenario. Now my question is if the quality and the price paid to an Indian car is as good as of a foreign company car, why can’t we promote an Indian company that draws and spends all the money in this country. It is simple economics, I am sure we cannot say anything about the money flow channels of a foreign company. This forms altogether another subject for discussion. Simple common sense proves this to be a swadeshi approach but quite often than not the common sense is a rare sense more so in the corporate world.

                Addressing the contention of Mr Gurucharan Das that swadeshi reflects inferiority complex I would like to ask, how inferior and what kind of inferiority complex was observed in the approach of swadeshi of Gandhiji. Gandhiji once said: “swadeshi is not vindictive but it is a national necessity”. In fact, the movement partly affected the British economy, more than that it could instill a kind of self-respect among the masses of India. May be the concept is much more relevant now, to run our economy by our elected government without mortgaging the national interests. This demands dignity, a firm will and self-respect from the administrators and the political leadership.

                One requires, a nobler and ripe thinking to appreciate this statement and also a kind of preparation to forego certain unnecessary material comforts (seemingly) imposed by aggressive propaganda of the corporate world, to carve out profits unthinkable elsewhere but here, where 110 crore consumers are freely available. It is in this scenario, one should perceive whether swadeshi brings in inferiority complex or self-respect.

The insight

Another dimensional perspective is to assess and analyse the Foreign Direct Investment flowing in here into our country’s industry, service sectors and the fast moving consumer goods FMCG. The first two are mainly an outsourcing approach since the labour and the technical expertise are much cheaper when compared to their native country. Thus the products produced here fetches many fold profits when compared to the production in their own country. Well, it is interesting to note from IBEF (India Brand Equity Foundation) reports, that the president of the Technopak Mr Raghav Gupta predicts that the organised modern retail market in India will reach 80 billion and the modern consumption goes to 1.5 trillion (1500 billion) by the year 2015. According ASSOCHAM 315 two tier hyper markets are expected to come by 2011. Where as the same FBI report says that the total FDI flowed into India was 26 billion in the year 2009-2010. One has to carefully distinguish the amounts that are flowing into different sectors like technology, infrastructure development, food processing, consumer goods FMCG, to have clear understanding and to formulate policies that serve the interests of our country but not the MNC’s that even buy the governments if need be.

                We know the countries like US are feeling the heat of internal pressure towards the outsourcing processes and I believe such countries are incorporating certain stringent procedures and a code of conduct to systematise the outsourcing. The learned author GD says the investment in the industry and in FMCG go together but we cannot have investment in high technology areas and not in FMCG areas since the investors have a flock mentality. Thus

he says, we cannot be half pregnant an American way of putting the argument. Whose pregnancy? Our nations? Then, does it go to an aborted situation if things continue like this particularly in FMCG sector. The author GD has any sane reasons for the recent recession the USA is facing, apart from the greed of the people that are supposed to steer the economy of the country. The world’s largest bank went bankrupt. Can it happen overnight? Unless, the so called economic experts rather managers were blissfully and knowingly complacent over the situation.

An apprehension

When I discussed this matter with some people familiar with American banking system, remarked it is the indiscriminate distribution of the loans to the near and dear in the name of huge projects that were multi mortgaged further in a complicated manner, making quick bucks ultimately leaving the stakeholders and the country in a lurch. It happened in US, a big country with commanding economy. Thank God the recession did not affect India much, since ours is still a decentralised economy with different rural banking systems and people’s saving patterns.

Learn from nature

In nature, water flows from higher to lower levels, electricity flows from higher potential to lower potential, wind travels from higher to lower pressures, diffusion takes place from higher concentration to lower concentration, even knowledge permeates from higher centers to lower ones but it is the money a man made one flows upwards from poor to rich keeping the poor as poor forever. Here comes the importance of Gandhian economics based on Gram Swarajya leading to Ramrajya an ideal kept before us. I for myself a convinced man that the corporate approach is no answer to this and we should design and work out for the benefit of masses in making them self reliant.

The Model for rural poor

Late Nanaji Deshmukh has built a model and showed the efficacy of working towards self-reliance in 500 villages around Chitrakoot. Mr APJ Abdul Kalam visited this project while in the office of President of India and was so impressed and eve referred the model at a national level management executive meet. Here is a model, that can be repeated, if there is a national will to suit our country’s rural progress. Thus let the corporates limit to the cities’ activity and contribute to the general economy without robbing the rural poor by exploiting their weakness.

The question

Then the question is whether we can evolve corporations or educate the present corporate companies including the MNCs towards the humanitarian interests imitating and incorporating the nature’s laws. It is a complex and big question. Let us hope the world order realises this and India leads the world. It definitely needs many a smart Harvard brains with noble Gandhian hearts.

By Prof GS Narayanamurty