Document : Part-III
Socio-Economic and Political Analysis of India ’ s Semi-Colonial & Semi-Feudal State Character
This document was written by a Comrade of CPI ( ML ) almost two years back . We are treating it as a positive and good effort . This document summarized and composed various facts , figures , and analysis , as given in Comrade T . Nagi Reddy ’ s famous book , “ INDIA MORTGAGED ” as well as from some survey reports . Now we are giving Part-III of this document . Part-I and Part-II were published in June and July issues .
( E ) The Public Sector
The growth of the public sector in India has received extremely high complements from the circle of socalled friends of India , especially the Soviet revisionists . Professor R . Uliyanovsky , in an article in Pravda , August 4 , 1970 , writes that the state sector of India “ is growing stronger and dominates in some branches . It plays an important part in reducing the power of the monopolies , weakening the position of foreign capital , and narrowing the gap in the level of economic development in different parts of the country ”. Indian progressives , led by the CPI revisionists , have been crying hoarse that , due to the growth of the public sector , independent industrialization of India is on the march towards a successful culmination . It is necessary and of utmost importance to study this quotation to arrive at a few objective conclusions as to the true nature of this phenomenon in the Indian economy .
It must be stated , at the very outset that , the state sector is not a peculiar feature of the Indian acquisitive society . Intervention by the State in the production process of a country is a common characteristic of all capitalist countries . As a matter of fact , this has become absolutely necessary to preserve and strengthen capitalism itself . In the process , Britain had to nationalize its coal and steel industry . Galbraith , the ambassador of the US in India , has written that the public sector in America is very much larger than India . Therefore , the growth of the public sector , by itself ,
August - 2022 does not denote the progressiveness of any State .
In the earliest days of industrial growth - i . e ., more than 150 years ago - the first foremost economist , Adam Smith , had clearly forecast the necessity of State Intervention in the interest of private capital itself . He had enunciated that the erection and maintenance of public works - which though in the highest degree advantageous to a great society are however of such a nature that the project could never repay the expense to any individual or a small number of individuals and which therefore cannot be expected to be undertaken by individuals - had to be done by the State directly and on its own responsibility to provide enough incentives for the growth of the private investment .
F . Engels in his brilliant book , ‘ Anti- Duhring ’, had stated that the growth of capitalist productive forces “ leads first to various forms of joint-stock companies and later on , when even that method becomes insufficient , it leads to direct ownership and control of the means of production by the State , as the official representative of the capitalist society ’. He further stated that ‘ the more productive forces it takes as its property , the more it becomes the real collective body of all capitalists , the more citizens it exploits . The workers remain wageearners , proletarians . The capitalist relationship is not abolished : it is rather pushed to an extreme ”.
Therefore , the public sector or the State ’ s direct intervention in production is not a new feature . And it does not mean that establishment of the State Sector is a progress towards the establishment of socialism .
But then we are told that intervention by the State in underdeveloped countries , would play a progressive role since it helps mobilize the internal resources for independent development of industries , that is an instrument of antiimperialism used mainly for growth of indigenous capitalism . If its character is really anti-imperialist then the State does play an extremely important progressive role . Thus in an underdeveloped country , intervention by the State may be progressive if it enables the country to fight for , and consolidate , its independence vis-avis imperialism . But State capitalism , in alliance with foreign capital , becomes a pure and simple means of exploiting the people and endangers the very independence of the country . In such a situation , it can never play the role of an instrument of anti-imperialist and independent industrial growth . Industrial Policy Resolution The growth of the public sector in independent India had a base even before 1947 , when the basis of state monopoly had already been laid by the British Government in the 20 odd ordnance factories managed by Defence Ministry .
After independence was proclaimed , the industrial policy resolution announced by the Government in 1948 was forthright in its welcome of foreign capital . Moreover , Prime Minister Nehru ’ s statement later in clarification of the resolution , that there should be no
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