Economy, asked by priyangshux, 2 months ago

why was it not possible for india after independence to adopt socialism as adopted by soviet union ?

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Answered by jagadishwar45
0

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Answered by sahanan11
3

Why did India adopt the path of socialism and not capitalism after getting independence?

There are several reasons why India did not adopt the path of capitalism post independence. I'll list the immediate few which comes to mind.

Agrarian Economy

Post independence, India was primarily an agrarian economy, i.e most of the people in the country were in some way or the other involved in agriculture. As a result our purchasing power ( ability to buy different types of goods and services) was very low. Capitalism cannot flourish in a market where purchasing power is very low, because if people don't have the money to buy goods, producers won't have any incentive to invest or produce.

Lack of infrastructure - The infrastructure left by the British in India was bare minimum. Barring the railways and post office, there were very few active or working public departments. As a result it was imperative that our immediate focus after independence should be on infrastructural development. However, infrastructure projects are seldom attractive to private investors, primarily because they require huge initial investments and have a long gestation period (become profitable only after a long time). As a result it was the government and not the private sector which had to undertake such projects. Besides, a capitalist market economy can never flourish without proper infrastructure to facilitate the free and movement of goods and services.

Lack of investors - Even if the entrepreneurial zeal among the people was high after the independence, barring a few established business houses such as the Tata's and the Birla's (the Ambani's were yet to establish themselves), very few people actually had the money to invest (most of the country was still practicing agriculture). An open market economy would have essentially given an unfair advantage to these established business houses and paved the way for them to establish familial monopolies in the Indian market.

Nationalist fervor - Immediately after independence, the nationalistic zeal was still high in India. Ideals of liberty, equality etc were still fresh in the minds of the people. Therefore it was easier to adapt a socialistic approach to development, which was aimed at a more inclusive form of growth, rather than leaving the country vulnerable to the vagaries of market economics.

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