Lessons from the Great Depression for India

Like Roosevelt did for the US in the 1930s, India must fix past inconsistencies, realise its potential, boost industry

Swaraj, Suraj, Ramarajya, self-reliance — these ideas have influenced us for decades. Earlier, they pushed us towards freedom from colonialism. Today, they generate some amount of controversy. India revisited the idea of self-reliance when Prime Minister Narendra Modi addressed the nation last week. He told us that India will emerge from the coronavirus disease (Covid-19) crisis as a self-reliant nation.

But what is self-reliance? How can we achieve it? Can self-reliance achieve the sort of freedom we once wanted? From the radicals to the moderates, people believe that freedom, as it stands today, is incomplete. But it is India’s democratic set-up that allows them the right to dissent, to question, and to protest across the country. When the British left India, Winston Churchill believed that the gulf between the Hindus and Muslims would not be bridged easily. Today, 73 years since, India stands a united country, having proved many naysayers like Churchill wrong.

To overcome crises and grow as a country, leadership is important. The Great Depression, which gripped the United States (US) in the 1930s, is being discussed in the context of the economic aftermath of Covid-19. The economic downturn began in the US around the end of 1929, with a sharp dip in production and GDP, and a sharp increase in unemployment. Production also dropped significantly in other industrialised countries of Europe.

It was in these dark days that Franklin D Roosevelt was elected president. He had a monumental task ahead of him, but he proved that leadership is forged in the crucible of crises. Roosevelt took several hard decisions to stabilise agriculture production and improve the quality of life for farmers. In 1933, onefourth of the workforce was unemployed. By forming the Tennessee Valley Authority, Roosevelt began the construction of dams and power stations. He took measures to control floods — a common occurrence at that time. In 1935, he instituted the social security Act which guaranteed pensions.

The federal government took on the responsibility to ensure meals for children of the unemployed. Under the head of public work administration, his government provided direct financial assistance to at least three million people. To fund this, he increased the taxes on the rich. Roosevelt’s efforts led to the birth of a new nation.

Consumerism became the new way of life. Theustransformedintoasuperpower.world War II began around this time and the US assumed a leadership role. Roosevelt was engaged in two battles, one on the domestic front and the other on the global battlefield.

Let us circle back to India. While we do not have all the advantages that the US has, why can we not aspire to become an economic superpower? We have the largest pool of graduates in the world. Yet, India is the source of a massive brain drain. The talented young men and women who have gone from India to different countries have contributed immensely by sheer intelligence and hard work.

But now, when they are under pressure to come back, due to economic setbacks as a result of the pandemic, India needs to ensure that these valuable resources are used to enhance domestic productivity. When Mahatma Gandhi, Jawaharlal Nehru and Subhas Chandra Bose came back to India armed with the ideas that they picked up from different countries, they played an important role in the freedom struggle. These young people with bright minds can help find a way out for India, and carry on the baton in different sectors.

India has taken several steps to mitigate the problems brought on by the crisis. It has used the Mahatma Gandhi National Employment Guarantee Scheme to help those without work; it has lent a helping hand to many industries; it has provided funds for industries that were struggling; it has stepped up the free distribution of rations for the people who are vulnerable. A lot is being done, but this is not nearly enough. India needs to think about the long-term.

At a time like this, we have to use our resources to the maximum benefit. For example, India is the largest producer of cotton — our global share is 23%. But are we able to leverage it enough in being central to global brands? Even Bangladesh is ahead of India. The plight of Indian cotton farmers is worrying. Many have committed suicide as a result of poor income generation and loans which they could not pay back. But farm produce for the international market is one of the many options that India has. The country is filled with opportunities in both rural and urban areas. Health, tourism and digital technology are a few sectors that have enormous potential that needs to be realised. In the last 30 years of liberalisation, India has achieved a great deal. But there have been inconsistencies in our growth path. This must be looked into.

The virus has proved a terrible equaliser. Everyone is going through difficulties in different degrees. India must now examine how these can be turned into an opportunity in the long-term while ascertaining who needs a helping hand in the short-term.

The path India and its people choose today will determine the future of the nation.