Some thoughts of mine about Russia and socialism, and India's relationship with Russia and socialism after Indian independence

Last updated on 6th Oct. 2017

Far more than 1984, it was George Orwell's Animal Farm, that made a huge impact on me, during my young adult days (which is when I was forming important parts of my world-view). The little that I had read of Karl Marx, including what I was taught in school, did have some very attractive and noble ideas. If I recall correctly, from each according to his ability, to each according to his needs ... and the general narrative of prevention of horrible exploitation of man by man.

But Animal Farm gave the practical side of the story. The satire on communism in this book made a very big impact on me, and significantly contributed to me viewing Russian communism as having some bad things for humanity/human society. I think I read Animal Farm when I was in college studying Science/Physics in the early 80s.

However, I did remain open then to socialism (which is what was the dominant politics of India in the 80s) in a democratic framework.
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In my case, the 1991 financial crisis that India faced, https://en.wikipedia.org/wiki/1991_Indian_economic_crisis, was a very significant factor, perhaps the overwhelming factor, that made me disillusioned about Indian style socialism that was followed till then. What I have written below is my general recollection of those days. There could be some inaccuracies. Further, I have not really studied Indian economic policies in depth.

That socialism had a strong Russian style stamp to it. Five year plans, mega public sector institutions ..., with a tightly controlled private sector through licensing policies controlled by the govt. USA style capitalism was, till then, generally viewed in India as inappropriate and even dangerous.

But at that time (1991) India was brought to its financial knees, and faced the particular humiliation of having to send some of its gold reserves to London, as part of World Bank/IMF bailout plan.

The Soviet Union had become/soon became history! That was another stunning blow to Indian brand of socialism then.

The Congress govt. of Prime Minister P.V. Narasimha Rao (from Andhra Pradesh state where I live now; Rajiv Gandhi had been assassinated some time earlier) with Manmohan Singh as its Finance minister, rolled out the new economic policies. Private sector started surging ahead. For the first time in my life (I was living then either in Mumbai or in an outlying area of Mumbai - Dombivli, but working in Mumbai), I had a choice of a customer-service driven big private bank in India (as against small private banks whose financial viability was always a concern) - ICICI Bank - along with the mega public sector banks of India. Service quality in this big Indian private sector bank was significantly better than at public sector banks, though the minimum balance and other requirements/charges of ICICI Bank were significantly higher than public sector banks, thereby making it a niche banking player. ATMs were sprouting all over the place! Public sector banks had to try to raise their game to the level of the private sector as they were losing business. ... This is like how BSNL, India's mega telecom public sector company, is now being forced to change its game in Internet service provider sector due to competition from Reliance Jio 4G Internet and other 4G Internet service providers in India.

The strong impression I have is that it is private sector entrepreneurship that got India out of the financial morass that its pre-1991 socialism brand (based on Russian model, I guess) had landed India into.

But once I moved to Puttaparthi which is located in one of the most economically backward districts of mainland India, in end 2002, I started seeing the other side of the picture. ICICI Bank did not even have a branch in Puttaparthi! I had to transfer my bank account from Dombivli (outlying area of Mumbai) to Anantapur, the district HQ. It was public sector in banking as well as in telecom that were the ONLY significant service providers in banking and Telecom & Internet in Puttaparthi in end 2002/2003! Private sector was just not around. I guess they felt there was not enough money to be made here .... In later years, ICICI Bank opened a Puttaparthi branch and as India had its mobile technology revolution (2G I think it was then with Nokia, the company from Finland, being the cheap and reliable phone device provider of choice in Puttaparthi; my first mobile phone was a Nokia phone; I still have my second Nokia phone - an E-52 I bought sometime in 2011, if I recall correctly), slowly private telecom companies started setting up shop in Puttaparthi.

That showed me that private sector must be catering only to upper middle class and rich parts of Indian society in vital sectors like medical services, education, banking and telecom. Utilities like power and (municipal) water across India, I think, are still run by govt. owned entities.

Today in 2017, my impression is that Indian public sector in general has some inefficiencies but delivers services to rural poor areas where no private sector company will go. Indian public sector has to follow reservation quotas, is heavily union dominated (making it very tough to fire non-performing or under-performing employees), and is tied closely to Indian politics. Unfortunately, there are reports of corruption in some Indian public sector organizations (though all people in such organizations are not corrupt).

India today seems to follow a mixed public sector + private sector model which from 1991 onwards has delivered the goods for large parts of the country's population, including the poor through subsidies provided to them by the govt, with the govt. being able to provide those subsidies due to better revenue from taxes due to Indian economy growth.

These are my general impressions as an Indian citizen who has lived in India for over five decades, and continues to live in India. I repeat that there may be some inaccuracies in my general impression as I have not studied Indian economic policies in depth.
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It has been an extraordinary period of prosperity for India after 1991, which is a quarter-century period. The prosperity, however, got distributed in a very lop-sided way. As a software guy, though not a real businessman (only independent consultant), I too benefited from the prosperity, that allowed me to retire at 40 years of age for a simple ceiling-on-desires spiritual aspirant life in Puttaparthi. I mean, my retirement funds will not support even regular Indian middle class life for me. But then I am very clear that I am fine with lower middle class Indian life, given the deep spiritual aspirations that guide my life now.

It is the uneven distribution of that prosperity that has led to social tension in India which is reflected in India's politics. But the democratic mandate forces the political parties to cater to under privileged masses and so there is some sort of balance between rich and poor in independent India today as compared to earlier decades where the poor had no voice whatsoever. Of course, India is far away from Western Europe kind of material development that provides a fantastic safety net to all its citizens including the poor.
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Prior to 1990s one could have used the word, infatuation, to describe India's view of Soviet style socialism. After 1991 I think disillusionment is the word that describes India's view of Soviet style socialism.

However, Russia has been a great friend of independent India. I will not forget the help that Russia rendered to independent India including during my own lifetime. During this lifetime at least, I will always be grateful to Russia for that help rendered. Russia's relationship with independent India, prior to 1991, was rather unique. When we were in desperate need, the Russian government helped us in very significant ways.

So I think it would be right to say that even in the highest echelons of Indian government which would be the political parties and the top bureaucracy, India has a soft corner and gratitude towards Russia. That's a special relationship.

Indian leaders and top bureaucrats, I think, will see to it that India's relationships with the West, including USA, will not come in the way of India's far longer and far more tried-and-tested relationship with Russia.
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Today my view is that India needs a balance involving free market capitalism (USA style) and public sector companies/organizations, with some regulation of private sector companies/organizations to prevent corporate greed to run riot and hurt the very society that they profit from.
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On my Facebook post, https://www.facebook.com/ravi.s.iyer.7/posts/1989839787899255, associated with this blog post, there are two comments agreeing with the last paragraph of my post.