In 1991, when the Indian economy was on the brink, Narasimha Rao called upon the eminent economist Dr. Manmohan Singh. What followed is well-documented: the transformation of a $300 billion economy into a $3.5 trillion economy in just three decades. This marked India’s departure from the Nehruvian model of socialist economics and its embrace of the open market system. However, it remains debatable whether India has fully embraced capitalism or still retains socialist elements. Today, we explore whether free markets in India come from inherited free-market roots or are adopted them from the West.
The Tamil poet and author Thiruvalluvar, in his work Thirukkural, emphasized the ethical creation of wealth. He stated, “Wealth, the lamp unfailing, speeds to every land; Dispersing darkness at its lord’s command.” Additionally, he asserted, “Make money—there is no weapon sharper than it to sever the pride of your foes.” These insights are drawn from the Economic Survey of 2019–20.
We find historical examples further supporting India’s capitalist ethos. Tuladhara, mentioned in the Mahabharata, was a renowned trader of spices and juices in Varanasi who imparted wisdom on dharma and livelihood. Further examples are detailed in The Stories of Indian Business Series: 10 Extraordinary Tales of Trade, a series of books published by Penguin Random House.
Similarly, Kautilya advocated capitalism in his work Arthashastra by asserting, “Basis of happiness is ethics. Basis of ethics is resources. Basis of resources is kingdom.” Here, “kingdom” denotes enterprise. Although Kautilya advocated for regulated capitalism with some state intervention, his work signaled a profit-oriented system distinct from socialism. He advocated for regulated trade in alcohol and prostitution, as detailed in chapters 25, “The Superintendent of Liquor,” and chapter 27, “The Superintendent of Prostitutes,” and tax exemptions to merchants for imports.
In Hindu civilization, the goddess Lakshmi symbolizes not just wealth, but prosperity, indicating a societal belief in prosperity through wealth creation. Similarly, Kubera, the deity of wealth represents material prosperity. Kubera, also referred to as the “Lord of Wealth” or “Lord of Riches,” is considered the wealthiest deva in Hindu scriptures. Depicted as a dwarfish figure with a large paunch carrying a money bag, Kubera’s significance extends beyond Hinduism and influences Buddhism and Jainism. While Lakshmi is connected with divinity and auspiciousness, Kubera is associated with material prosperity acquired in the form of wealth, opulence, and riches. These religions often discuss the concept of moksha, making Kubera’s role in material prosperity noteworthy.
India’s historical wealth and prosperity are evident. From contributing 27 percent of the world’s income in AD 1700 (compared to Europe’s 23 percent) to 3 percent in 1950, India’s capitalist spirit has been inconsistent. For further insights into India’s economic journey, refer to the Wikipedia page on India’s history of economic growth. Few may know of Virji Vora, a Surat-based merchant who financed the East India Company and held a monopoly in the spice trade. He exemplifies India’s historical capitalist endeavors.
Additionally, historical records indicate that individuals like Virji Vora financed military expeditions, such as the one led by Aurangzeb to conquer the Deccan region of India. Vora’s contributions extended beyond commerce, as he was known to have gifted four Arab horses to Shah Jahan, as mentioned in historical accounts.
Moreover, India has been a land of opportunity for those facing persecution in their homelands, such as the Jewish and Persian communities. They found prosperity and refuge in India due to the nation’s admiration for those who create wealth through ethical means and who contribute to the prosperity of the nation.
The facts I am citing reflect the true essence of India’s capitalism. Throughout history, from the Ramayana to the Mahabharata, there is no instance of a single king or ruler engaging in business activities. This absence underscores that India has never been a socialist-driven or centrally planned economy.
Even in modern history, Mahatma Gandhi’s repeated the old Hindi statement “Jaha Ka Raja Vyapari, Waha Ki Praja Bhikari” (Where the king is a merchant, the subjects are beggars) illustrates his divergence from Pandit Nehru’s economic ideology. India, with its ancient civilization and youthful population, can shape the world economy by promoting entrepreneurship. India’s ethos celebrates ethical wealth creation, attracting individuals seeking prosperity.
In conclusion, India need not emulate the capitalist model of the West but should forge its own path. The government of India should formulate policies fostering a business-driven society, while the Indian people should champion capitalism and entrepreneurship. India’s human capital, combined with its financial resources, can strengthen its balance sheet and shape its future.
