The document discusses the evolution of the Indian liberal tradition from pre-1991 centralized planning to post-1991 liberalization, highlighting key figures and concepts that have influenced this shift. It emphasizes the importance of individual liberty, free markets, and critiques the historical embrace of socialism in India. Additionally, it provides insight into various notable Indian liberals, the establishment of the Swatantra Party, and ongoing liberal movements in contemporary India.

1. Indian Liberal Tradition
Kumar Anand
Centre for Civil Society
kumar@ccs.in

2. Then and Now
2Indian Liberal Tradition | www.ccs.in
o “Dissolve the Planning Commission and scrap
the disastrous Five-year plan”
– From the Manifesto of the Swatantra Party,
General Elections of 1967
o “…and therefore within a short period, we will
replace the Planning Commission with a new
institution…”
– Prime Minister Narendra Modi, 15 August
2014

3. Then and Now
3Indian Liberal Tradition | www.ccs.in

4. LPQ to LPG
o pre-1991
– License-Permit-Quota (LPQ) Raj
– Centralised Planning (Five-year plans)
o post-1991
– Liberalisation-Privatisation-Globalisation (LPG)
– not for all (small entrepreneurs, MSMEs)
o Manmohan Singh or IMF
o Is Economic Reform (LPG) a FOREIGN idea?
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5. Left, Right or Centre
o Left, Right or Centre?
o Who is a liberal?
o Liberals: Indians or Foreigners?
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6. An Outline
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o Individuals
o Organisations
o Literature
All championed individual liberty and free
markets; and questioned India’s embrace of
socialism and the resulting big State

7. Free Banking
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“…what is so dangerous and ought to be done away with
is not governments' right to issue money but the
exclusive right to do so and their power to force people to
use it and to accept it at a particular price.”
– F. A. Hayek, Nobel laureate in Economics, 1976
“In Hong Kong, Scotland, and Northern Ireland, private
banks issue banknotes redeemable for the national
currency.”
- Thomas L. Hogan, Economist, 2012

8. India’s own Free Banker
8Indian Liberal Tradition | www.ccs.in
“…a managed currency is to be altogether avoided
when the management is to be in the hands of the
Government. When the management is by a bank
there is less chance of mismanagement. For the
penalty for imprudent issue, or mismanagement is
visited by disaster directly upon the property of the
issuer. But the chance of mismanagement is greater
when it is issued by Government because the issue of
government money is authorised and conducted by
men who are never under any present responsibility
for private loss in case of bad judgement or
mismanagement.”
(1924-25)
B. R. Ambedkar
(1891-1956)

9. Central Planning
o “by centralization all progress tends to be retarded, all initiative liable
to be checked and the sense of responsibility of Local Authorities
greatly impaired….centralization conflicts with what may be regarded
as a cardinal principle of good government… the higher authority
must be less competent than the lower, because it cannot by any
possibility posses the requisite knowledge of all local conditions.”
– B. R. Ambedkar (1916)
o “… the knowledge of the circumstances of which we must make use
never exists in concentrated or integrated form, but solely as the
dispersed bits of incomplete and frequently contradictory knowledge
which all the separate individuals possess… We need
decentralization because only thus can we ensure that the
knowledge of the particular circumstances of time and place will
be promptly used.”
– F. A. Hayek (1945)
9Indian Liberal Tradition | www.ccs.in

10. Agriculture
10Indian Liberal Tradition | www.ccs.in
o “…monopoly procurement, which would be at
controlled price, is apt to enforce the price penalty on
farmers with ruthless efficiency, much more so than
under competitive procurement. Monopoly
procurement, therefore, might decelerate output and
thereby add to the upward price pressures.”
– B. R. Shenoy (1968)
o “…the states have been asked to delist certain items,
which are usually procured through agriculture
produce marketing committees (APMC), so that they
come into the open market.”
– Arun Jaitley, Finance Minister (June 2014)

11. B. R. Shenoy (1905-78)
o In his “Dissent Note” to 2nd Five Year Plan
(1956-61), B R Shenoy “warned that the attempt
to maintain high investment rates through
deficit financing would inevitably lead to a
serious balance of payments problem”
o The flaws in the Second Plan were revealed
within a year, when India faced a serious
balance of payments problem in 1957, just as
Shenoy had predicted.
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12. Education
12Indian Liberal Tradition | www.ccs.in
o “…the village schools were not good enough for the
British administrator, so he came out with his
programme. Every school must have so much
paraphernalia, building, and so forth…”
– M. K. Gandhi (October 1931, London)
o Input focused: Section 18 & 19 of RTE Act 2009
o “There will be no compromise on school
infrastructure norms.”
– Punjab Education Minister (in a meeting with
Punjab Private Schools Organisation, September
2014)

13. Gandhi
o “The State represents violence in a concentrated and organised
form. The individual has a soul, but as the state is a soulless
machine, it can never be weaned from violence to which it
owes its very existence.”
13Indian Liberal Tradition | www.ccs.in

14. Private Property
14Indian Liberal Tradition | www.ccs.in
o “There can be no individual freedom unless the right
to property is guaranteed protection. Where the
possession of property is treated almost as a crime and
the right denied or consigned to uncertainty,
individual freedom becomes an unreality.”
– Rajaji
o Right to Property as enshrined in Article 19(1)(f)
(read together with Article 31) of the Constitution was
a Fundamental Right.
o 44th Amendment to the Constitution, 1978, both
Article 19(1)(f) and Article 31 were deleted.
C. Rajagopalachari
(1878-1972)

15. C. Rajagopalachari (1878-1972)
o Gandhi’s conscience-keeper
o Last Governor-General of India, Minister of
Home Affairs, Chief Minister of Madras
state…
o Founder of Swatantra Party
o “Political freedom cannot survive unless
sustained by economic freedom.”
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16. Minoo Masani (1905-98)
o A three time Member of Lok Sabha
o Leading figure in the Swatantra Party, and
founding member of the Indian Liberal
Group
o Spontaneous journey to liberalism
 Admirer of the Soviet Union -> A freedom
fighter.
 A socialist in 1930s -> Disillusioned with Soviet
Communism.
 A thoughtful reconsideration of socialism in
1940s -> An anti-communist crusader in early
1950s.
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17. Nani Palkhivala (1920-2002)
o Jurist and economist, defender of constitutional
liberties and champion of human rights
o “India is not poor by nature but poor by policy.”
(1990)
o Budget speeches, defense of Basic Structure
Doctrine of the Constitution
o “The sleeping sickness of socialism is now
universally acknowledged…These public sector
enterprises are the block holes, the money guzzlers,
and they have been extracting an exorbitant price
for India’s doctrinaire socialism” (1990)
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18. A. D. Shroff (1899-1965)
o An eminent industrialist, banker and economist
o Shroff was founder-director of the Investment
Corporation of India and company chairman
of Bank of India and the New India Assurance
Company Limited
o Started Forum of Free Enterprise in 1956
o Shroff was totally opposed to wide ranging
regulations which stifled individual initiative
and enterprise and encroached on personal
liberties
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19. Indian Liberals
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o B. R. Ambedkar
o B. R. Shenoy
o M. K. Gandhi
o C. Rajagopalachari
o Minoo Masani
o Nani Palkhivala
o A. D. Shroff

20. Forum of Free Enterprise
o “… the Forum of Free Enterprise will continue to do its good
work of educating the country against the menace of state
capitalism which socialism and communism seek to
introduce.”
– A. D. Shroff (1959)
o Battling fallacies
– First three FYPs were a success - record average GDP
growth (Nehru, Bhagwati, Panagariya)
– Thanks to the Emergency, inflation in India was kept low
and even reversed (GoI, January 1976)
– Inflation is an inevitable by-product of development
(Nehru)
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21. Swatantra Party (1959-74)
o “since... the Congress Party has swung to the Left, what is wanted is
not an ultra or outer-Left [viz. the CPI or the Praja Socialist Party,
PSP], but a strong and articulate Right”
- Rajaji (Our Democracy)
o founded by Rajaji in reaction to what he felt was the Jawaharlal
Nehru-dominated Indian National Congress's increasingly socialist
and statist outlook.
o Swatantra (Freedom) stood for a market-based economy with the
"Licence Raj" dismantled
o The original “Party with a Difference”
o Until Swatantra came on the scene criticising socialism was
unthinkable
o While the Congress emphasised the collective and the primacy of the
State, Swatantra stood for the primacy of the individual vis-à-vis
the State 21Indian Liberal Tradition | www.ccs.in

22. Swatantra Party (1959-74)
o First the Rapid Rise …
– 1962 general election (18 seats, 6.8% of popular votes)
– 1967 general election (44 seats, 8.7% of popular votes)
o … and then the Equally Rapid Crash
– 1971 general election (8 seats, 3% of popular votes)
22Indian Liberal Tradition | www.ccs.in

23. Liberal Periodicals
o Freedom First (1952 – present)
– Minoo Masani and S. V. Raju, Bombay
o Swarajya (1956 – 1980)
– Rajaji and Khasa Subba Rao, Madras
23Indian Liberal Tradition | www.ccs.in
(Re-launched September 2014)

24. Liberal Periodicals
o The Indian Libertarian (1954 – 1980)
– R. B. Lotvala, Bombay
o Forum of Free Enterprise (1956 – present)
– A. D. Shroff, Bombay
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25. Indian Liberals Today
o Loksatta, Hyderabad
o Liberty Institute, New Delhi
o Indian Liberal Group, Mumbai
o Students for Liberty chapters around the country
o Centre for Civil Society, New Delhi and Mumbai
o Centre Right India, Takshashila Institute & Pragati, Swarajya
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26. Conclusion
So, is Economic Freedom (LPG) a FOREIGN idea?
26Indian Liberal Tradition | www.ccs.in

27. Indianliberals.in
o An online library
o Completely searchable and not-gated
o Materials also in Indian regional languages (Marathi,
Tamil, Gujarati, etc.)
o Audio/video
27Indian Liberal Tradition | www.ccs.in

28. Indian Liberal Tradition
28Indian Liberal Tradition | www.ccs.in
Thank You!