ECONOMIC IDEAS OF GOPAL KRISHNA GOKHALE
In his economic thinking, Gokhale like Dadabhai Naoroji. criticised the British for the drain of wealth. He was most critical of two aspects of the drain :
(1) the excessive employment of the British personnel; and
(ii) the unfair charging of the Indian Office establishment to India's account.
Dadabhai Naoroji identified the basic problem of Indian economy as that of poverty and in his analysis the main responsibility for the continued poverty of India was held to be that of peculiar organization and operation of British rule in India. The main elements identified by Naoroji were:
(i) Heavy expenditure on such unproductive items as military operations and maintenance of a large Indian army for strengthening and extending the British empire;
(ii) The non-participation and non-employment of highly paid British personnel and the home charges associated with entire administrative and financial system.
All these taken together led to a drain of resources from n to England which maintained the country in an impoverished condition.
Gokhale was a historian and a professor of economics. Alike Naoroji and Ranade he was more interested in the economic foundations of the Indian politics. He was an analytical scholar of the science of political economy. Gokhale had so deep knowledge of the economic affairs of India that he was considered as non-official advisor of the Government of India. His economic views were influenced by Dadabhai Naoroji, Mahadeo Govind Ranade, G.V. Joshi, Romesh Dutt. He was equally influenced by the economic views of German economist Fredrick List. Though no book is available of Gokhale on economic ideas but his economic views are well -expressedin his various speeches before the Welby Commission (1897), the Budget speech in Bombay Legislative and Imperial Legislature and his views expressed during Congress sessions.
Some of his important economic ideas are:
1. Gokhale was seriously concerned with the industrial and agricultural problems in India. He had a keen perception of the economic problems engendered by the clash between the monetary capitalistic economics of the west and the demands and socio-economic critéria of an under-developed country. He pleaded for a balanced adjustment of the expenditure and income of the Government of India. He favoured a more equitable distribution of income.
2. He criticized the British policy of developing the Indian emarkets for the advancement of her own industries. This had resulted in destroying Indian urban handicrafts and forced the urban artisans to go back to their villages, which in turn had increased the pressure on agriculture and resulted in the subdivision of land and indebtedness. Dababhai used national income calculations to prove the H deepening poverty of India, Gokhale, in addition, presented other equally convincing indicators of India's "deep and deepening poverty" viz, rising death rate, reduced per capita consumption of salt, decline in net cropped area and of the increased destruction of crops and cattle under a series of disastrous famines.
But Gokhale was not only a critique of British economic policy; he also evolved a wide ranging framework ne constructive economic policy based on state intervention In this respect he was a discerning liberal and not a blind adherent of economic laissez faire. Gokhale tirelessly pleaded for lowering the land revenue assessments especially in parts of Bombay, Madras and U.P, where ho said they were inordinately and destructively high. He was also opposed to the periodic re-assessment under the ryotwari system. He wanted them reduced and the "Frozen"-land révisions could at best follow the trend of prices, he argued. Gokhale wrote extensively on the causes of rural indebtedness and opined that the remedy for increasing rural indebtedness was not to restrict the right of transfer of land to non-agriculturalists, but to provide credit to agriculturalists by starting agricultural banks and co-operative credit societies. He advocated a policy of setting up government run experimental farms in each large tract of the country to be supplemented by demonstration farms. agricultural colleges etc.
3. He wanted Indian industries to rationalize the allocation of their resources in such a way as to foster their efficiency. He favoured the orientation of the fiscal policy of the government to enhance middle class employment and increase production.
4. He ardently pleaded for the reduction of salt duty. In the budget speech of 1904, Gokhale urged for the further reduction of eight annas in the salt tax. In his budget speech of 1907, he sponsored the total abolition of salt duty. In his budget speeches of 1903 and 1904 he had urged the abolition of excise duty on cotton goods since their burden mainly fell on the poorest classes. In his budget P speech of 1907, he raised his voice of protest against the accumulation of the Gold Standard Fund for the purpose of converting Indian rupees into British sovereigns introduction of gold currency in India. Gokhale was in favour of systems of protection to new infant industries by the state.
5. Gokhale as a nationalist was alarmed at the growth of military expenditure in the country. He suggested that can be reduced by maintaining a reserve instead for permanent standing army. It should be manned primarily by Indian officers. The Indian army should not be put into action outside Indian's natural boundaries unless a part of its expenditure is shared by the British Exchequer. His ideal was cutting down expenses on the police and the army and investment of funds on education and sanitation.
6. He opposed the lavish expenditure on Indian Railways- which, in fact, were instrumental in the extraction of the Indian people eg. taking raw materials to ports and sending imports to countryside. All the handicrafts, college industries and artisans were disappearing before the import of cheap machine-made goods in India. The foreign traders were being given more and more concessions, reliefs and facilities at the cost of the Indian railways.
7 Gokhale, was no theoretician but his economic thought was most relevant to India's development and welfare. Gokhale displayed concern with the problems of the economic and social 'development" of the people. He keenly felt the necessity of spending the surplus in meeting necessary non- recurring expenditure for people's "moral and material well- being." Gokhale supported a progressive income tax.
8. He pleaded for the expansion of financial resources to local bodies so as to enable them to carry out their welfare activities. To help finance welfare activities, including compulsory education, he advocated reduction in the overgrown military expenditure.
9. Finally he was an advocate of industrialisation through the judicious use of the instrument of 'infant industry protection' and public support for home made goods on the principle of Swadeshi. Gokhale may not have constructed a theoretical model of a welfare slate, but he surely was a champion of the welfare state, understood empirically, in terms of the needs of a backward economy.
10. Although as a political philosopher Gokhale championed the causes of reason, public opinion, freedom, justice and tolerance and was devoted to the cult of individual conscience, in economic matters he adhered to a positivist theory of sta te functions and inculcated that the state should pursue a pol cy of imposing duties on foreign imported goods for the development of India's industries. He reiterated that the English East India Company had embarked upon a deliberate destruction of Indian industries to help British manufacturers.
Gokhale's budget speech in the Indian Legislative Council from 1902 to 1911 reveal the keenness of his approach to phases and aspects of Indian economics. Although there is not much of theoretical analysis in them they show his realistic appreciation of the problems of salt duty, railway and military expenditure, income tax and land revenue. He sincerely wanted to reduce the burden on the masses and redeem them from the plague of rural indebtedness. He held that current revenues should not be spent for non-recurring expenditure. He was of the opinion that a sudden rise in the quantum of currency in circulation would lead to price rise. For building a reserve, he even advocated the stoppage of the coinage of new rupees and the coinage of gold pieces. He strongly urged the reduction of Government expenditure.
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