India’s economy is socialist, according to the constitution. Mrs. Indira Gandhi introduced this word in the 1970s. As the British occupied India for nearly 150 years, they began as a firm to transfer raw materials from India to the United Kingdom. This has frightened India into reopening its market to the rest of the world. Nehru was unusual in this regard; he permitted only a few enterprises to expand and concentrated his efforts on the agriculture sector.
The term ‘socialist’ was added to the Preamble by the Forty-second Amendment.
In the past, the Indian government implemented many social welfare programmes to demonstrate its socialist credentials, such as bank nationalisation, various job initiatives such as NREGA, and even selling milk. While the majority of these ponzi schemes failed, they added to the government’s financial burden. All of these ideas had a significant impact on citizens. Everyone began to rely more heavily on free goods. People began to expect cheaper rations, a free cooker, and subsidised gasoline or kerosene. Except for a few communities such as the Marwadi and the Gujratis, no one backed private industry, and everyone was focused on government jobs. Entrepreneurs were frequently reprimanded or disheartened. Profit was viewed as a bad thing, and wealthy people were frequently blamed for the country’s plight. In films from the 1970s and 1980s, the villain is typically wealthy, smoking a cigar, holding a peg of whisky in one hand, and plotting how to exploit low-wage workers. Building a business involves time, effort, risk, and expertise. In India, the image of business and the evil it entails is still pervasive. A large number of people still rely on the government to help them. Everything that is wrong with their lives is due to the government in some way.
India gradually up its market to the rest of the world and established a free market economy in 1991. While every step India takes has a significant impact, we have fallen behind other countries such as China, which began reforming a decade ago. China was able to nail down a few details regarding how the business model will work in a communist country. In India, entrepreneurs find it extremely difficult to start a firm because of the so-called red tape that still exists. The Indian bureaucracy is rotting from the inside out. The nature of the “Sarkari Babus” is still incompetent, slow, and corrupt. Obtaining land, establishing a factory, and obtaining a licence are all arduous tasks for entrepreneurs.
India chose a government-directed growth path over a market-driven one when it gained independence. With a GDP of around Rs.36 thousand crores and government revenue of around Rs.330 crores, we were a shaky economy. The average lifespan was only 31 years. That was an opportune time to pass away. We were also hard struck by the costs of World War II, as well as the bloody partition, which saw the largest human migration in history. Market forces would have positioned us as the world’s tailors, cobblers, and domestic assistance suppliers, given our large and impoverished population. Nehru, on the other hand, chose to invest on new infrastructure (the Temples of Modern India) in order to propel India ahead. The four huge steel plants, the DVC, the Bhakra Nangal project, and numerous public sector investments in power, locomotives, railway coaches, paved roads, irrigation, water supply, schools, IITs and IIMs, hospitals, and other areas were among them. The pressures continued to mount until we were on the verge of declaring bankruptcy in 1991. Then came the Narasimha Rao government, with Manmohan Singh as Finance Minister and Chidambaram as Commerce Minister, which changed everything. Nonetheless, all administrations since then have been mindful of the need to help India’s poor, rather than abandoning them to market forces.