60 years of Indian Republic : Dr.

Ambedkar And
India’s Neoliberal Economic Reforms. -
Prof.Venkatesh Athreya
 April 14, 2011 4:25 am

 
 Focus, Personalities

 
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Advisor, Food Security, MS Swami nadhan

Research Foundation,

Visiting Professor, Tata Institute of Social Sciences, Mumbai

Dr. Balasaheb Ambedkar was among the most outstanding intellectuals of India in the
twentieth century in the best sense of the word. The late Paul Baran, an eminent Marxist
economist, had made a distinction in one of his essays between an‘intellect worker’ and an
intellectual. The former is one who uses intellect for making a living whereas the latter is one
who uses intellect for critical analysis and social transformation. Ambedkar fits Baran’s
definition of an intellectual very well. He is also an outstanding example of what Gramsci
called an organic intellectual who represents and articulates the interest of an entire social
class. It is a great privilege for me to be here to deliver the Dr. Ambedkar Endowment Lecture at this
esteemed institution. I wish to express my sincere thanks to the Vice Chancellor and the University
for their kind invitation.

While Ambedkar is justly famous for being the architect of India’s constitution, and for being a
doughty champion of the interests of the scheduled castes, his views on a number of crucial issues
pertaining to economic development are not so well known. the economic reforms in India under way
since 1991 are incompatible with Ambedkar’s vision of economic development and social justice. 
Ambedkar was a strong proponent of land reforms and of a prominent role for the state in economic
development. He recognized the inequities in an unfettered capitalist economy. His views on these
issues are to be found scattered in several writings, of which the most important are his essay
entitled ‘Small holdings in India and their remedies’, and a piece entitled ‘States and Minorities’. In
these two writings, Ambedkar elaborates his views on land reforms and on the kind of economic
order best suited to the needs of the people.

Ambedkar stresses the need for thoroughgoing land reforms, noting that smallness or largeness of
an agricultural holding is not a function of its physical extent alone, but is determined by the intensity
of cultivation as reflected in the amounts of productive investment made on the land and the
amounts of all other inputs used, including labour. He also stresses the need for industrialization, so
as to move surplus labour from agriculture to other productive occupations, accompanied by large
capital investments in agriculture to raise yields. He sees the State as having to play an extremely
important role in such transformation of agriculture, and advocates the nationalization of land,
followed by the State leasing out land to groups of cultivators, who are to be encouraged to form
cooperatives for pursuit of agriculture.

Intervening in a discussion in the Bombay Legislative Council on October 10, 1927, Ambedkar
argues that the solution to our agrarian question “… lies not in increasing the size of farms, but in
having intensive cultivation that is employing more capital and more labour on the farms such as we
have.”{These and all subsequent quotations of Ambedkar are taken from Government of
Maharashtra (1979)}. Further on, he says “… the better method is to introduce co-operative
agriculture and to compel owners of small stripe to join in cultivation.“

During the process of framing the Constitution of the Republic of India, Ambedkar proposed to
include certain provisions on fundamental rights, and specifically proposed a clause to the effect that
the State shall provide ‘… protection against economic exploitation’.  Among other things, this clause
proposed that:

 Key industries shall be owned and run by the State

 Basic but non-key industries shall be owned by theState and run by the State or by Corporations
established by the State
 Agriculture shall be a State Industry, and be organized by the State taking over all land and
letting it out  for cultivation in suitable standard sizes to residents of the villages to be cultivated
as collective farms by groups of families.
Ambedkar provided, as part of his proposals, detailed explanatory notes on the measures to protect
the citizen against economic exploitation.  He stated:

“ The main purpose behind the clause is to put an obligation on the State to plan the economic life of
the people on lines which would lead to highest point of productivity without closing every avenue to
private enterprise, and also provide for the equitable distribution of wealth.  The plan sent out in the
clause proposes State ownership in agriculture with a collectivized method of cultivation and a
modified form of State socialism in the field of industry.  It places squarely on the shoulders of the
State  the obligation to supply capital necessary for agriculture as well as for industry.“
Recognising the importance of insurance in providing the State with ‘… the resources necessary for
financing its economic planning, in the absence of which it would have to resort to borrowing from
the money market at high rates of interest,’ Ambedkar also proposed nationalization of insurance. 
He categorically stated: ‘ State socialism is essential for the rapid industrialization of India.  Private
enterprise cannot do it and if it did, it would produce those inequalities of wealth which private
capitalism has produced in Europe and which should a warning to Indians.’

Anticipating the possible criticisms against his proposals as going too far, Ambedkar argued that
political democracy implies that ‘… the individual should not be required to relinquish any of his
constitutional rights as a condition precedent to the receipt of a privilege’ and that ‘… the state shall
not delegate powers to private persons to govern others.’ Ambedkar points out that ‘ the system of
social economy based on private enterprise and pursuit of personal gain violates these
requirements.’

Responding to the libertarian argument that ‘ where the state refrains from
intervention in private affairs – economic and social – the residue is liberty’, Ambedkar says: ‘ It is
true that where the state refrains from intervention, What remains is liberty.  To whom and for whom
is this liberty?  Obviously this liberty is liberty to the landlords to increase rents, for capitalists to
increase hours of work and reduce rate of wages.’  Further, ‘… in an economic system employing
armies of workers, producing goods  en masse at regular intervals, some one must make rules so
that workers will work and the wheels of industry run on.  If the state does not do it, the private
employer will.  In other words, what is called liberty from the control of the state is another name for
the dictatorship of the private employer.’