~ ASOKA
MEHTA - WIELDS THE WHITEWASH BRUSH
By Kailas Chandra -
Bombay —
Some. "big business" journals and spokesmen have come. down heavily on Planning Minister Asoka Mehta for a speech made by him at the convocation of the Saugor University in Madhya Pradesh on Febru- -aryary. 4, in which he said that. "curbing of the private sector monopolies and enlargement of the state's hold over the banking system | should be considered for increasing the area of social controls." This was his first major speech after Joining the Central Cabinet headed by Mrs. Indira Gandhi.
_ The. erstwhile Socialist leader called for the reversal of the policies which he confessed "broadly favoured the. better placed agriculturists compared to the sub-marginal and landless farmers." He’ __ also suggested e levy on large landholdings. Asoka Mehta, one of the founders of-the. Congress Socialist party, a radical wing of the i Indian Netional Congress in the thirties, came out of the Indian National ‘Congress in 1948 along with his colleagues to form the. . Socialist party which in 1952 merged with the Praja party, a dissident Congress group, to.form the Praja Socialist party. The chairman of the PSP. for some time; he. was considered the main theoretician of the reformist socialist movement in India. He resigned from the _ PSP in 1963 and joined the Congress... He was, appointed vice- ~chairman of the Planning Commission in. 1964... re
‘Here are some of. the other points made by Mehta that have caused 2. "furious" controversy -in the bourgeois press in India:
o The. constitutional guarantee “about the rights in and to | properties makes it difficult for "the forces of socialism to.oper-_ ate on the. level of change in the structure. of private. property," especially-as "we are moving. towards the enlargement of a social | ownership of new forms of property rather than acquisition. of existing private property." ,
® £bout 650 accounts of the country constitute roughly twothirds of the total advances of the banking system and. it must be seen. whether. the. position can be remedied by antitrust laws or _ whether the.state will. have to be directly involved in the operation of these powerful bodies. Lo.
* "The new socialist order" emerging in the country is one with its emphasis on "an increasing area of social ownership and control and overriding anxiety for equality:and liberty) and lays a great stress on economic growth as a pre-condition for economic equality."
*® But "this economic order is not the copy book version: of . socialism with which the young generation of 40 years ago became ~~ familiar in their search for a new way of life. It is more complex,’ dynamic and live phenomenon with all kinds of contradictions, anom-
alies and pragmatic contortions."
® "Although private enterprise rules over the great part of economy of our agriculture and in the larger sector of our industry, we have made a beginning in acquiring social controls over them." The "predominance of private trade in both the foreign and domestic wholesale market" continues uninterrupted but the overall control of the economy is "a unified control oriented to the requirement of social gain in a broad sense."
@ Another "source of anxiety" is that "the affluent pockets" of the economy are not yet showing signs of giving up the old habit of "conspicuous consumption" which has affected the style of work and living even of the public sector of enterprise where one occasionally comes across cases of expenditure unconnected with production.
# "There is no doubt that we continue to be a capitalist economic order with a powerful hangover of a feudal, social and cultural framework and yet our economic and social institutions are straining at the leash to be immediately revised into something which they are not at present, viz., institutions of a socialist order."
The speech has been praised for its intellectual clarity. Asoka Mehta made a very sober and frank assessment of the economic development in India within the capitalist framework. He admitted that the economy being built in India since 1948 continues to be "a capitalist economy with a powerful hangover of a feudal, social and cultural framework." He was forced to admit that the various land "reform measures introduced by the Congress government have created a class of rich peasantry in the villages while the overwhelming majority of the rural poor, the poor peasants and the agricultural workers have been denied all benefits of development." Concentration of wealth and growth of capitalist monopolies have grown tremendously despite the state "regulations" and the so-called "unified control orientated to the growth of social gains."
But Asoka Mehta said nothing new except that as a new minister in the cabinet he tried to whitewash the failures of the Congress government. He warned members of the ruling class against indulging in the habit of "conspicuous consumption" lest they invoke the wrath of the exploited masses who are denied even their basic needs; and he preached against their imparting their corrupt practices to the bureaucracy running the "governmental sectors" of the economy. He said that he does not believe in the "copybook version" of socialism which he learned forty years ago as a student when he was still inspired by the October Revolution. Today his socialism has become "more complex" (and less dynamic) in his attempt to make it "acceptable" to the ruling bourgeoisie while continuing to fool the masses with demogogy.
Asoka Mehta advocated no radical reforms in the present capitalist framework. In fact he thinks that the "changes" he has in view as a "democratic socialist" would take a long time to be introduced. His concept of “evolutionary socialism" as opposed to "revolutionary socialism" is that the process is very slow and tortuous.
What has irked the "big business" spokesmen about Mehta is not so much his "academic exercises" about “evolutionary socialism," which do not constitute a threat to capitalism, but his "dark hints" at "further curbs’ on the corporate sector and a tighter control over the banking” system." _
"The ‘proliferation of controls in the last fifteen years," said the céOnservetive Times of India of Bombay editorially on February 7, "has vested new discretionary powers in an expanding army of officials." It added: "The administration of controls has clogged the bureaucratic machinery resulting in inordinate delays in decision-making....the real need therefore is not to increase the degree of control but to ensure that such a control as the: Government al- “ready has over the economy is’ exercised to better purpose."
The Times of India took Mehta severely to task for suggesting '- nationalisation of banking as 2 solution to the present crisis fac- ‘ing the capitalist economy in India. His suggestion for taxation of agricultural incomes has, however, been welcomed by the journal, which, while speaking for the ‘urban bourgeoisie maintains that the "richer peasants who derive so much benefit from large irrigation, power and other projects can certainly afford to pay more towards their upkeep." But the journal is constrained to observe rather sarcastically that "Mr. Mehta himself does not regard his suggestions as a basis for immediate action." Indeed his declarations are no more than: an-' ‘academic exercise" in his. capacity as _ the new Planning minister... aaa
~§$.L. Kirloskar, ‘president. of the Federation of Indian Chamber of Commerce ‘and Industry at a press conference in Bombay on Febru- — ary 8 said that the statement of Mehta "recommending a stricter control on the private sector and bank nationalisation had shocked and ‘disturbed businesstien." He said that it was “highly improper for a responsible Minister to’ indulge in loud thinking publicly." According to him, Mehta's statement would have "definite adverse repercus- _ sions abroad and make it difficult for the country to obtain the ‘Maximum possible help from the World Bank-and other institutions."
‘Kirloskar ‘said he was at a "loss to understand the reasons “motivating Mr. Mehta's statement," as business and industrial activity in the country had already been operating under a set of strict and serious controls at all levels. He challenged Mehta to demon-strate how “his socialist policies would’ solve> problems of finance, food-production. and unemployment . "
“Kirloskat pleaded for a "continuance of the pragmatic approach of the Shastri Government" and urged the prime minister "to do her. utmost to rectify the impression about India abroad, particularly in the U.S." This he said was "particularly necessary in view of the impression in certain foreign countries that India would not be able to ‘repay its borrowings even with the best of intentions."
But ‘PLA. Palkhivala; the noted "free enterprise" economist has taken a more alarmist view of Mehta's speech. He thinks that ~ it will only serve "to widen the chasm between the Government and
private enterprise." (Times of India, February 7.) Palkhivala said: "If. the speech. did not reflect the collective thinking of the present Cabinet; it was a grave mistake to give a gratuitous jolt to the capital market, unnerve foreign investors and cast a pall of gloom over the national economy. If it did. presage Cabinet action, we can only see ahead even dimmer days and shadows lengthening across the path. “" A severe warning indeed! :
Palkhivala strongly eriticisead Asoka Mehta's suggestion > for “bank nationalisation" ‘or greater..state control on banking. He pointed out that there "is already a hard core of the public sector in the field of banking," with the State.Bank of India and its subsidiaries "accounting for 25 per cent of the peid-up capital and 32 per cent of ‘the deposits of all.Indian scheduled banks" -- extending to 29 per cent of the total credit to‘the public -- and "owning 32 per cent of all Indian branches : and offices of the sscheduled banks."
' About Mehta! s reference to 650. accounts constituting two-thirds of the total advances of the banking system, Palkhivala pointed out -. that this only meant that “some -companies, because of the size of. their -operations, have much larger requirements for loans than others and it does not prove unfair banking practices." He added that "ifone looks at the figures of advances by the State Bank of India, which is in the public sector they would make the same pattern. "
: The banking: isysten, whether state-owned or. “private. ina. ccapitalist society,-subserves the needs: of the capitalist economy. The bulk of the advances from -the State Bank of India have for example gone.to-the private sector. In -backward countries like India, a .centralised state-owned banking system is- necessary to discipline , sand regulate the development of the capitalist economy which otherwise tends to be chaotic. That is precisely what. Asoka Mehta had in.view when he called for a "unified control-of.the economy"..and the banking system by the state. He only suggested greater state regulation of the banking system in the larger interest of the capitalist economy; and he has not yet advocated nationalisation of banking -as such. Mehta said rather cautiously: "It might be considered whether the state should further enlarge its hold over-the banking or not in”. order to introduce ‘social considerations inthis important . field- of . activity." He pointed out that even in a developed capitalist country like France, advances: of over a.million francs: made by the banking... system required the approval of the: ‘planning ‘authority. In fact in. India also, the Reserve Bank > already exercises such. regulatory con-.: trol over advances by private banks beyond a prescribed limit. ae
In any case mere nationalisation of banking or certain sectors of the capitalist economy cannot be equated with socialism; socialism presupposes the-.far more fundamental transformation of the private ownership of the means of production into social ownership. Obviously such a socialist transformation of the property relations cannot be brought about by a bourgeois state weddedtto preservation of capitalism and such a transformation is possible only as a result of revolutionary intervention of the masses in the political life of the country.
Asoka Mehta is trying to explain away the failures of the. Congress government: to solve the basic problems*of food, employment and shelter during the last eighteen years of political independence: He therefore has to indulge in some radical phrase-mongering. He said, for example, that there is:a "spectacular: tussle between the old cap= italistic economic order and:the new socialist order in India." Socialism, according to him, is India's ruling “ideology” and constitutes "our principal value for our changing times." The so-called "spectacular tussle" between two antagonistic social orders in India’ is only a figment of imagination-on his part. But he is forced to admit that it would be long before a complete social;and economic transformation would be achieved in India at the present rate.
Among the social institutions: more resistant. to change, he : points out the caste system: "the age-old structure of hierarchical, -adseriptive and custom-bound society" which "cannot be undone as long: as there are artificial man-made divisions among ourselves. " He is satisfied that. "in this difficult field as in most’ others". India has made a beginning to bring about. pervasive change such as’ steps to abolish untouchability. He does not. explain why: the bourgeois state has failed to: abolish even-the caste system, “which is finding new aggressive manifestations in’ ‘India. - .
He has also. tried to "whitewash" the failures of the. Congress government in other spheres. He said, for example, that the increasing: investment of LIC funds and the entry of the Unit Trust in the “corporate sector" are also “bound to change the nature of. decisionmaking’ in that sector over time." The growth of cooperatives also. has introduced “another kind of decision-making in our agriculture and — industry." The "Asakan socialism" does not: stand for social ownership of the means of production or property. relations; it aims only at ‘influencing the "nature of decision-making" among capitalists through state regulations’ -- greater “social. controls" as he. himself puts it.” eee? os.
With the general: elections: only a year ahead, the Congress-high command has assigned a difficult task to. an’ ex-Socialist: He> has to convince the masses of India that the Congress still means to build "socialism." In fact Palkhivala made a point when he said that talks of ‘curbing the private-sector monopolies "may be politically useful ini that it conveys. to the ill-fed, ill-clothed and ill-housed citizen that his economic plight is’ due not to: official incompetence but to the anti-social activities of a few business houses." Even the big bourgeois leaders know. that.the Mehta speech is only a preelection stunt.
2 efele) PICKET US. _consitams rN MONTREAL
Some 2,000 demonstrators picketed the Us Se ‘consulate in : Montreal February 18 after a march from a down-town hall where they heard Staughton Lynd denounce the escalation of the war in Vietnam:: The demonstration was peaceful, the consulate coming out.of it with... all windows intact. oa