Shashi Tharoor writes: Rethinking capitalism and socialism in India and beyond | The Indian Express

  • Global debate on capitalism vs socialism is resurging.
  • In the US → support for capitalism declining (54% approval, lowest ever) while socialism gains traction, especially among youth.
  • In India → historical experience of socialism (Nehruvian model) and later shift to capitalism (1991 reforms) still shapes discourse.

Key Arguments

1. Shifting Perceptions

  • Capitalism increasingly seen as benefiting the rich → inequality, jobless growth, wealth concentration.
  • Socialism perceived positively as fairness, dignity, and meeting basic needs.

2. India’s Economic Evolution

  • Nehruvian Socialism (1947–1991): state-led planning, PSUs, self-reliance.
  • 1991 Reforms: liberalization, privatization, globalization → market-driven growth, middle-class expansion, IT boom.
  • Present: dissatisfaction due to rising inequality, farmers’ protests, gig workers’ demands, youth unemployment.

3. Hybrid Model of India

  • India today - mix of capitalism & socialism.
    • Examples:
      • Private hospitals vs public health schemes (Ayushman Bharat).
      • Corporates & startups vs MGNREGA & food subsidy.
      • Billionaires & unicorns vs poverty alleviation programmes.
    • Pragmatism → Neither extreme capitalism nor pure socialism fits India’s diversity.

4. Global Parallels

  • Post-war Europe built welfare states (e.g., UK’s NHS) to humanise capitalism.
  • Modern economies already integrate socialist principles (safety nets, redistribution, regulation).
  • Debates are outcome-driven now, not ideological purity → Does the system deliver fairness & dignity?

5. India-Specific Complexities

  • Economic debates tied to caste, community, region, and historical inequities.
  • Social justice has different meanings in different states.
  • Colonial legacy still impacts institutions & inequality.

6. Core Message

  • The world (including India) is not choosing between capitalism or socialism → but finding a balance on a continuum.
  • The goal: balance efficiency with empathy, innovation with inclusion.
  • Dissatisfaction signals democratic engagement, not a threat.

Key Takeaways for UPSC

Prelims

  • Terms: Nehruvian socialism, LPG reforms (1991), MGNREGA, welfare state, hybrid economy.
  • Data points: inequality, employment trends, FDI vs welfare schemes.

Mains (GS Papers)

  • GS-1 (Society): Impact of inequality, social justice, caste & community dimensions.
  • GS-2 (Governance, Polity): Welfare policies, MGNREGA, health & education schemes.
  • GS-3 (Economy): Capitalism vs socialism in India’s policy mix, role of liberalization, inequality, unemployment.
  • Essay: Themes like “Balancing Growth with Social Justice”, “Capitalism vs Socialism: Lessons for India”, “Development with Dignity”.

Ethics (GS-4)

  • Questions of fairness, dignity, inclusiveness in economic models.
  • Debate reflects moral responsibility of governance beyond profit-making.

In essence: India is not purely capitalist or socialist but a hybrid economy, pragmatically combining market efficiency with welfare measures. The challenge is not ideological but practical — how to ensure inclusive, fair, and sustainable growth while addressing inequality.