The Gandhian Theory of Balanced Growth

The Gandhian Theory of Balanced Growth

According to Gandhi, the right choice is not to plunge into capitalist development, but to develop a ‘communaucratic’ social economy, based on decentralized rural life. “The end to be sought”, he wrote, “is human happiness, combined with full mental and moral growth”. Thus, the Gandhian doctrine of economic growth, being a part of his general theory of growth, cannot meaningfully be formulated purely in economic terms. He visualized balanced growth which manifests in the manner described below.

a) Philosophical Balance: a balance between economic progress and moral progress. To achieve such a balance, one must shift the emphasis from maximization to optimization of production, from abundance to adequacy of the production of material goods and services.

b) Structural Balance: a balance between the rural and urban sectors of the economy. To achieve such a balance, the growth of the urban sector must not take place at the expense of the rural sector. Here, one must shift the emphasis from centralization to decentralization of economic activities.

c) Ecological Balance: a balance in the relationship between man and his environment. Long before social concern grew over the environmental crisis in the Western industrial societies, Gandhi showed his awareness of this crisis as a natural byproduct of uncontrolled economic progress, and autonomous development of modern large scale technology. He stressed the need for making a deliberate choice of technology, and for restraints on the level of production, in order to maintain a proper balance between man and his environment.

(d) Technological Balance: a balance between small scale and large scale technologies. Gandhi’s views on technology have often been misinterpreted. Gandhi was not opposed to the use of modern technology, as such. He was opposed to indiscriminate, non-selective adoption of imported technology, based purely on its effect on productive capacity.

In the context of the Indian economy, he saw a tremendous need for the development of small scale technology that would increase the efficiency of rural production without creating any technological displacement of labour. At the same time, he saw the need for large scale technology for which the ideal location would be large urban centres. The point that he strongly emphasized was that the adoption of Western technology to economize on labour, and to expand production at the cost of rural deindustrialization and mass unemployment was not the proper choice of technology, under the prevailing economic conditions in India. He endorsed a proper mix of technology in order to optimize the social
benefits of science and technology.

e) Distributional Balance: a balance in income distribution. Given the existence of gross inequality, to achieve greater balance would require strategies to redistribute income. In the context of a growing economy, Gandhi’s doctrine may be interpreted as a doctrine of dynamic equilibrium in the pattern of income distribution so that exploitation is reduced to the minimum. In modern growth theories, the problem of income distribution is generally assumed away. Gandhi was fully aware that a high rate of growth does not necessarily guarantee an equitable distribution of income. The latter issue is tied up, not so much with the rate of growth, as with the pattern of growth. This is the reason why Gandhi opposed Western style economic progress through urban oriented, large scale industrialization. He would settle for a slower rate of growth for the sake of a greater diffusion of technology and productive capacity to revitalize the rural economy, as well as for the sake of a greater regional balance in the distribution of income.

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