Relevance of J.C. Kumarappa's concept of Decentralization in Modern India

- By M.P. Gurusamy

Introduction

J.C. KUMARAPPA, the world renowned Gandhian thinker and economist, is remembered now on the eve, of his 125th year of birth. C. N. Vakil, School of Economics and Sociology, University of Bombay has rightly observed, "Shri. J.C. Kumarappa is well known as one of the trusted disciples of Gandhiji who was asked to carry out his economic ideas into practice and in doing so got ample opportunities of understanding first hand Gandhiji's point of view."¹

While understanding, appreciating and applying Kumarappa's ideas, we have to keep the following points in mind:

1. All his ideas are based on the two fundamental principles of Mahatma Gandhi i.e Truth and Non-Violence.
2. He has had a holistic view of life. Economics formed part of it.
3. His views on economics have the eternal values of spirituality. So it is ethical economics.
4. He stood for Rural India. He believed in what Gandhi said, 'India lives in her villages'.
5. His aim was to establish the 'Economy of Permanence'- based on the principles of nature.
6. On the whole, his ideas of economics have been man centered and not material wealth centered. In fact, he had the portrait of a poor farmer in his room, with the inscription, 'He is my master's master," his master being Mahatma Gandhi.

Even though Kumarappa conceived his ideas some sixty years back, they are relevant to Modern India.

Present Indian Situation

Since independence in 1947, we are progressing due to our constant efforts such as Five Year Plans. Since India is a democratic country, the rulers may be changing occasionally. But we follow a polity of development and growth to become a developed nation. We are following the path of developed nations. The transport/large-scale industries, science and technology etc. are developing. The educational institutions have multiplied. We have commercialized every field of our life. Money has become the dominating and deciding factor. The results are urbanization, mechanization, industrialization, consumerism and centralization. We have accepted the policies of globalization, liberalization and privatization. We are able to compete with many countries in the field of science and technology. Our technological human resources are excellent when compared with many developing nations.

There is another side of the development. That may be called the dark side of modern economic development. We have many growing problems such as ever increasing unemployment, deep rooted poverty, powerful and potential black money and corrupt political system. Our villages are slowly but steadily exploited and destroyed.

Out of the total population, majority are living in rural areas. In spite of all our efforts, most of our villages are not having basic amenities, medical facilities, education, electricity, drinking water, communication and transport facilities. It is against this background that we look upon Kumarappa for guidance to overcome the problems.

Evolution of Decentralization

In the ancient times we had a system of social and economic life based upon the principles of decentralization. It evolved naturally according to the circumstances prevailing during the period. Kumarappa said:

In the case of an agricultural civilization, the system ordained by nature is not interfered with to any great extent. If there is a variation at all, it follows a natural mutation. The agriculturist only aids nature or intensifies in a short time what takes place in nature over a long period. He has improved the wild varieties found in nature. He has converted grass seeds into wheat and rice by accelerating natural conditions. Similarly, in economic organization, agricultural civilization has largely followed nature in the methods adopted for producing commercial products. Commodities are brought into existence either to order or to meet the usual and easily determinable market demand. A social regulation machine aids distribution, but production followed by individual.²

The village industries such as spinning, weaving, carpentry, blacksmithy, pottery etc. flourished according to the needs of the people. Barter system was in vogue. Money was used only whenever and wherever necessary. In those days village economy was self-sufficient, self-reliant and decentralized in production and distribution.

During the British rule, our rural economy was totally changed. The rulers wanted to get raw materials for their large-scale textile industry and create market for their products. They consciously changed our rural economy to be dependent on British economy. They introduced monetary system and created cash economy. They established an excellent and powerful commercial system.

In the agricultural sector, the self-sufficient situation gradually gave way to dependent economy. Our farmers were persuaded to produce commercial crops such as cotton, sugarcane, tobacco, groundnut and chilly. Money was introduced replacing barter system.

Simultaneously, the government encouraged the development of large-scale industries, transport facilities, hospitals and educational institutions and urbanization. The net result was the decay of rural economy, which was the foundation of Indian economy.

The Negative Impact of Centralization

As a result of the foreign rule, centralization prevailed in the place of decentralization of production, consumption and distribution-. Kumarappa analyzed the root cause of centralization and its impact on our economy. We have enough experience of centralization and industrialization. Kumarappa observed, "It is not generally understood that imperialism is a child of centralized industries, and now in its dotage centralized economy cannot exist without the support of imperialism."³ The experiences of England, Germany and America would reveal the problems of industrialization and centralization. The result of competition among the industrialized countries to mobilize raw materials and capture markets for their products was the cause of the two World Wars witnessed by the world. Kumarappa points out: "To run any centralized industry great many facilities have to be guaranteed as the industry was to be sure of its raw materials, transport, labour and markets. Each one of these needs a powerful organization at prohibitive expense."⁴ He also pointed out: "No centralized industry can thrive without the patronage of the government and the tax payer's money. Therefore, their low costs depend largely on the unseen subsidies they get from the state in the form of various services."⁵ The main problems of centralization are unemployment, concentration of money power in the hands of few and increasing poverty in the country.

Need of Decentralization

Kumarappa discussed the merits and demerits of the systems of centralization and decentralization in an elaborate and intensive manner in his book Why the Village Movement. He pointed out the circumstances under which decentralization could be used with advantage.

1. Where there is a scarcity of capital it is not possible nor is it necessary to have centralization. The only possibility is decentralization.
2. Where there is plethora of labour, or in other words, unemployment and under-employment, we shall be increasing the malady by centralizing production.
3. Diversity and variation is the very essence of decentralization. The handwork will reveal the personality of the worker.
4. If democracy is to be attained, decentralization lays the required foundation. As centralization kills all initiatives in the masses, they lead readily to central dictatorship.
5. Where raw materials and markets are in the proximity of the producing centres, decentralized methods will move well.

The following are the advantages of decentralization:

1. Decentralization makes for more even distribution of wealth and makes people tolerant.
2. The process of production includes distribution of wealth also, as a large part of the cost goes to pay for the labour. Better distribution of purchasing power leads to effective demand and production is directed into supply of needs, as the supply here will follow the demand.
3. As each producer becomes an entrepreneur, he gets plenty of scope to exercise his initiative.
4. The market being close to the centre of production, there is not much difficulty in selling the goods.
5. Without centralization of either wealth or power, there can be no disturbance of peace on a national scale.

Kumarappa also observed: "Of course, as regards key industries and public utilities, there is no alternative to centralization, but this can be done either co-operatively or by socializing such industries."⁶ He added: "It must be clearly remembered that when we advocate decentralization, it does not mean that we eschew all" machinery. Where machines work as tools or slaves of man, we need them and have to improve the existing ones. It is only when machines are used to transfer the benefit of man's labour to another that we have to cry a halt. Human concern is paramount."⁷ The great economist Schumacher, in his world famous book Small is Beautiful quotes elaborately the ideas of Kumarappa to establish his theory of small-scale production.

Suitable System of Production

Now we have to decide which type of production and distribution would be suitable for our nation. Ours is still a rural India. We cannot build a strong national economy without caring for the welfare of the majority of our people who live in villages. When people are migrating from villages to cities, most of our municipalities, corporations and growing big cities such as Delhi, Mumbai, Chennai and Bengaluru are not able to accommodate migrants and face grave problems of scarcity of health and sanitation amenities and dwelling facilities. We know very well how the cities are not able to meet the problems at the time of natural calamities such as heavy rain. The reason is clear; we have developed cities ignoring the law of nature. We have destroyed places of living. In these circumstances it may not be advisable to allow our Rural India to perish. 'Save India means 'save our villages/In 1950s itself Kumarappa pointed out the unlimited growth of centralization and urbanization.

In spite of various attacks on the living methods and production functions of our villages, our villages are struggling and living. During the struggle for independence, Mahatma Gandhi was fighting for the revival of our villages. He talked about five lakh villages. His great and unique constructive programme was evolved to protect our villages. During the British rule, they had destroyed the basic structure of Rural India by introducing market and money economy. They destroyed our village industries consciously to find market for their products. They encouraged large-scale production by introducing machinery.

But after independence our leaders could have taken steps to reconstruct our villages. Due to the compelling situations, our leaders adopted polices which were detrimental to our villages. They encouraged large-scale industries, centralization and urbanization. Our Five Year Plans were consciously drawn, for the growth of the country on foreign lines of development. Our macro level plans encouraged large-scale industries, service sectors and infrastructure facilities. Our objectives were to increase the exports and attain growth of national income and per capita income. We were not bothered about the concentration of wealth in the hands of few. It is the reason for the growth of black money, poverty and unemployment.

At present our villages are struggling for existence and survival. The reasons are very clear. All the educated and skilled labourers have left the villages. Only the people who are not able to earn their livelihood in the nearby cities are living in the villages. A large number of people who have left agriculture are staying in the villages. They go daily to nearby cities in search of casual labour.

The people who are cultivating the land may be classified into two categories. One section of the people who own sizable cultivable land are able to cultivate the land in spite of various practical problems and difficulties. Another section of the people who have uneconomic holdings are not able to cultivate the land. The farmers have problems of lack of working capital, scarcity of labour and inadequate market for their products. Even now a larger number of farmers "are born in debt, living with debt and dying in debt."

A new problem of recent years is the ownership of rural land which has been transferred from farmers to the city dwellers. The rich people and higher income groups are investing their surplus money on land. In a way, sizeable black money is hoarded in the form of rural land.

Most of the allied village industries which were providing employment for a sizeable number of people had decayed in the British period itself. Even though the policy of the Government is to revive village industries, we have not succeeded. Unless we take effective steps, it is very difficult to have a sustainable rural economy.

Steps to be Taken to Develop Rural Economy Kumarappa had said even before independence:

Ours is an agricultural civilization. Agriculture is the main occupation in this land, around which we should develop our economy so that it is rooted in the soil, and large part of India's humanity who is engaged in this occupation will build up a suitable economy and restore the age old agricultural civilization. Agriculture will be so planned as to conserve the soil and provide enough work and wherewithal for the farmers' families all round the year.⁸

Many steps have to be taken to strengthen agriculture. Science and research have to be employed in this direction. Intermediate technology has to employ to increase productivity. We have to protect our cattle and improve their productivity. Horticulture should be the integral part of agriculture. Multipurpose co-operative societies have to be established in the villages to look after all the economic activities of the village. They have to provide all the credit facilities, provide inputs at reasonable price and market the village products. There should be no place for middle men and money lenders. They should have proper warehouses to stock their surplus products. Animal husbandry and dairy farming can be developed in rural areas. The farmers should be encouraged to have cattle.

Based on the availability of raw materials and local market, rural industries have to be developed. We still have a few industries such as weaving, carpentry, black smithy, pottery making vessels manufacturing and palm-gur. Kumarappa conducted research on palm-gur industry and pointed out the various economic advantages of this industry. We have palm trees throughout India. They grow in any land. If we properly protect and use them, the palm-gur industry will provide nutritive neera and palm-gur in addition to providing employment for large number of rural artisans. More than that, it will save the land which is put for sugarcane cultivation. Land may be used to cultivate crops necessary for the people. If the rural economy has to be protected, the migration of able bodied workers and skilled artisans from villages to cities has to be prevented. It is possible only when we provide opportunities for living in rural areas. Employment opportunity has to be created in plenty.

It is high time to think about the ownership of the land in the villages. There should be no absentee landlords. The land should be either owned by the actual tillers or the village community. Revolutionary steps have to be taken in this direction. Our aim should be, as Gandhi said: 'production by masses and not mass production/ If decentralized production and distribution have to be successful, the administration also needs to be decentralized. The village Panchayat has to look after the planning for the village. Democratic decentralization will strengthen the democracy of our nation.

To Think and Act

Kumarappa has been a Gandhian visionary and he has always been thinking for the establishment of Indian society which will be sustainable in the future. Decentralization of production and distribution is the only means to have 'Economy of Permanence.' The order suggested by him has the following elements.⁹

1. It should create wealth as efficiently as possible.
2. It should distribute wealth widely and evenly.
3. It should supply the needs of the people before comforts and luxuries are catered for.
4. It should be a means for eliciting all the faculties of the worker and developing his personality.
5. It should be conducive to peace and harmony in the society.

Now it is our responsibility to think about the dynamic ideas of J.C. Kumarappa and try to implement them.

Notes and References

1. C. N. Vakil, Preface to the book Gandhian Economic Thought by J.C. Kumarappa, (Bombay: Vora & Co., 1951), pp. iii-iv.
2. P Bandhu (Ed), Back to Basics: J.C. Kumarappa Reader (Udhagamandalam (Nilgiris): Odyssey, 2011), p.213
3. Gram Udyog Patrika, December 1941.
4. Ibid.
5. Ibid.
6. J.C. Kumarappa, Why the Village Movement (Rajghat: Sarva Seva Sangh Prakashan, 1945), p.164.
7. Ibid.
8. Gram Udyog Partika, August 1941.
9. J.C. Kumarappa, "On Earth As in Heaven" compiled by N. Sivarama Krishnan (Madras: Kumarappa Memorial Trust, 1993), p. 305.

Source: Gandhi Marg, Volume 39, Number 4, January-March 2018.

M.P. Gurusamy is Secretary, Gandhi Memorial Museum, Madurai, (Tamil Nadu) - 625 020 | Email: museumoffice@gmail.com