Economies are classified into three approaches- Socialist, Capitalist and a Mixed approach. Socialist approach is pro-poor. It aims an equitable distribution of wealth. Government owns all the economic institutions. Capitalist approach creates wealth for a ‘class’ of people. The economic institutions are owned by individuals or a group of individuals. A mixed approach, however, is a blending of both. Both Individuals and government owns institutions. Government intervenes for social welfare.
India is a Third-World Country. It is a developing economy. It started out as a mixed economy. However, Post 1991, India has been moving towards capitalism with gushing force. Liberalization and globalisation opened Indian economy. Opening up sectors for foreign direct investment (FDI) has attracted great investment and employment opportunities. Liberalizing FII (Foreign Institutional Investor) norms has helped in easy availability of capital. There has been an easy availability of loans. Our GDP growth reached 9 per cent. The real estate market is blooming. Our industrialists bag awards for the wealthiest persons in Asia and world. We are growing into the fastest economies of the world. But does this achievement take into account Gandhi’s talisman?
Even after 60 years of independence we are unable to address the problems of poverty, education, housing, food, sanitation, etc. According to reliable economic sources, over 250 million people in India lives below the poverty line, over 300 million people are illiterate, there is a demand of millions of houses but most of it is not satisfied, almost 80 per cent of population in Mumbai lives in one bedroom-cum-drawing room house, over 25 per cent of our country’s population does not get clean water and proper sanitation. Most of the rural areas, which comprise almost 70 per cent population of India and include over 6.5 Lac villages, are under developed. The growth that we observe around us is lopsided, helping rich getting richer and the poor getting poorer. All these are the results of excessive capitalism and reliance on industrialization and urbanization. The trickle-down effect did not work. Social welfare schemes like NREGA, Sarva Shiksha, Abhiyaan etc. implemented by government are not serving the desired purpose. In an interview, Congress member Rahul Gandhi also admitted that out of every hundred rupee disbursed for the rehabilitation of poor only five percent reaches the actual intended person while the rest of it is gobbled up by corrupt bureaucrats.
By capitalizing the economy, we are promoting industrialization. The ‘growth’ is at the cost of agriculture. Indian economy is an agrarian economy. India is a home to millions of villages. Villages provide an economic base to our prosperity as food production happens there. But our economy is opening at a dangerous speed. The government is losing control. It is the duty of the government to distribute wealth evenly. But if liberalization and government’s negligence continues at this speed, we will soon be importing food grains. Development does not mean transformation of rural areas into urban areas. It means developing the rural areas. Technology should reach rural India to increase self-sufficiency. Medical and educational facilities should be provided. Basic amenities should be provided. There should be creation of facilities so that villagers feel no need to migrate to urban areas.
Capitalism states: ‘Those who survive, let them survive. Those who can’t, let them Perish’. This is what is happening in our Country. The Poor are seen as hurdles in the development path. In Nandigram and Singur, the Government forcefully acquired lands. There was widespread violence. But the most interesting part was that the government in power was a leftist party. Left parties are socialist parties which believe in development for all. The Poor are displaced because rehabilitation is an unknown concept in this country. The poor are also losing their employment as companies like Reliance and Tata now compete with them in selling grocery.
Our economy should be a mixed economy with an inclusive growth model wherein the benefits of the governmental steps are reaped by all and everyone gets an equal chance to progress and prosper.