1. Abolition of Privy Purses
2. Nationalization of Banks
3. Nationalization of Insurance Firms
4. Monopolies & Restrictive Trade Practices Act
5. Foreign Exchange Violations Act
Did they do good or did they do damage, we don’t know.
Let’s talk about just two persons who are impacted because of this – Maharani Gayatri Devi of Jaipur and JRD Tata.
The total expense to Indian government on privy purses was 4 crores in 1970. For whatever reasons, ranging from the royals supporting Swatantra Party to socialist equality, Indira Gandhi forced her way through with scrapping of the recognition of the royals. May be, it’s fine. But, just look at one scenario. Indira Gandhi can call Maharani Gayatri Devi stating, the government is planning to setup a new paper factory; can you use your contacts to get some money? A factory providing jobs to many just vanished because Indira Gandhi ensured that Gayatri Devi will never help her.
The Governement nationalized New India Assurance, which is still, one of the main general insurance firms of India from Tatas in 1973. MRTPA ensured that the Tatas can’t expand or acquire new companies. And FERA ensured that Tatas can’t invest overseas. Any business venture by the Tatas will be at the expense of the government permissions – a classic case of License Raj. After losing his brain child Air India, and after losing out this badly, will JRD Tata support government’s projects with full zeal?
Same goes for the banks. May be, they helped increase rural footprint. But, they were also used as agents to fund unprofitable enterprises, shooting up NPAs like anything.
In one fell swoop, Indira Gandhi has alienated all those with money and power. And not forgetting the fact that income tax in 1973-74 was an exorbitant 97.5%, this forced all the expense to sit on government’s shoulders, for which, again, nationalized banks were used.
To do justice, there were some acquisitions like the oil majors resulting in the creation of BPCL and HPCL which are doing reasonably well, even after all the competition from the world.
Whatever Indira Gandhi’s government did, may be, they ran the show for a while. But, was the show draining on the nation? Looks so because we had to go for a massive deregulation in 1991. And what have these given to us now? Some examples
1. Naxalite movement turned strongest in Bastar and Kanker. By killing the king of Bastar and by alienating that of Kanker, government removed the most prominent voices which those innocent tribals listen to.
2. ICICI bank is the third largest in India, far bigger than the nationalized banks like Andhra Bank
3. Same goes for ICICI Prudential, which is the third largest.
Tatas acquired Corus, Rosneft acquired Essar, Toyota does business in India and no one challenges Microsoft’s monopoly.
The reality is that whatever Indira Gandhi did, most of them are overturned by successive governments. So, what are her economic successes? And what are her mistakes? And, even today, can the mistakes be corrected?
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