Answer:
THE APPROACH
INTRODUCTION: Briefly introduce the New Economic Policy (NEP) of 1921 and this as an inspiration for economic policies for India.
THE BODY: Write about the history of New Economic Policy, 1921 and its influence on Indian economic policies. Mention other distinct aspects which influenced Indian economy.
CONCLUSION: Conclude by stating that NEP acted as a guide to a limited extent and India’s economic policies were influenced by specific needs.
INTRODUCTION:
Vladimir Lenin implemented the New Economic Policy (NEP) in 1921 to address the economic crisis brought on by the Russian Civil War in the Soviet Union. The goal of the policy was to use a combination of capitalism and socialism to revive the economy. This new economic policy of 1921 was one of the models for the economic policies that India implemented after gaining independence in 1947, with the aim of fostering economic growth and self-sufficiency.
THE BODY:
About New Economic Policy, 1921
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- The New Economic Policy marked a shift away from the excessive centralization of earlier policies. The earlier policy of War Communism which had been in place since 1918, had completely collapsed the national economy.
- The Communist Party and its leader, Vladimir Lenin, were persuaded by the Kronstadt Rebellion in March 1921 that the party’s socialist ideals needed to be abandoned in order to preserve its hold on power. As a result, the New Economic Policy measures were introduced by the 10th party Congress in March 1921.
- These measures included the return of agriculture, retail trade, and small-scale light industry to private ownership and management, while the state retained control of heavy industry, transport, banking, and foreign trade.
- Indian national movement had gained a socialistic influence in the 1930’s. Thus, India looked upon the Soviet Union for its economic strategy after its independence.
- India was thrilled by the success of the rapid economic growth of the Soviet Union and thus set out on a path to imitate it and led the establishment of “socialistic pattern of society”.
Influence of New Economic policy on Indian economic policies:
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- State Control: Both India and NEP, 1921 put emphasis on the state controlled key industries and infrastructure as railways, energy, and heavy industries. India established large public sector enterprises like Steel Authority of India Limited (SAIL) and Bharat Heavy Electricals Limited (BHEL) after inspired by the NEP.
- Restricted Private sector: Indian economy allowed private sector to coexist but put several restrictions, similar to the The License Raj in India required enterprises to obtain multiple licenses, making it more stringent than the NEP.
- Reforms in Agriculture: There was greater emphasis on agriculture sector and small-scale industries which opened these sectors to private investment on a similar pattern followed by Lenin. In the 1960s, India’s drive for agricultural self-sufficiency coincided with the NEP’s emphasis on agricultural renewal.
- Land reforms: Land reforms were prioritized in both the NEP and India’s post-independence programs. India’s land ceiling acts and the abolition of the zamindari system aimed to redistribute land and reduce inequalities. The land reform effort in India seems to have been influenced by the distribution of land in USSR but changes were gradual in India as it being a democratic state.
- Mixed economy: Both the NEP and India’s economic policies aimed to establish a mixed economy which had an element of socialism and the capitalism.
- Industrialization: Industrialization was emphasized heavily in both the NEP and India’s economic policies as a way to achieve economic progress and self-reliance.
However, there were several other distinct aspects which influenced Indian economy which are mentioned below:
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- Democratic principles: Unlike the authoritarian government in the Soviet Union, India’s economic policies were developed within the framework of a democratic political structure.
- Influence of other economic models: India’s economic policies was influenced from other models, too, including British and other recently independent nations, in addition to the India’s non-alignment movement and its unique socio-political context also shaped its economic policies, making them distinct from the Soviet model in several aspects.
CONCLUSION:
New Economic Policy (NEP), 1921 acted as an inspiration for the Indian economy post- independence to achieve its objectives of economic development and self-reliance. However, India’s polices were not mere imitations of soviet model but blend of various global economic models and were according the specific political, social, and economic needs of the country.
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