Mahamana Madan Mohan Malaviya

Mahamana Madan Mohan Malaviya

Resurgence of India's Economy : Mahamana's Vision


Shaivalini Singh

Research Scholar

Department of Political Science, B.H.U


Pandit Madan Mohan Malaviya dominated the scene of public life in India for about sixty years. His life was a shining example of self abnegation, service and devotion to duty. His dreams were concerned with the upliftment of the people, their welfare and happiness, their all-round progress and weal. The poverty of the masses, the illiteracy and backwardness of the people, the suffering and the sorrows of common men and the evils afflicting the country greatly perturbed him and throughout his life he worked for the betterment of his countrymen.


Malaviyaji has been generally regarded as a man of deep religious values and there is a misconception that his views due to his belief in Sanatan Dharma were regressive. The present paper is a modest attempt to show that he was a constructive idealist who not only envisaged the revival of the past but also its fusion with modern science and technology to make India a progressive and economically strong country.


Economic Development


His interest in the economic development of India was no less profound than his concern about other things. Though not a financial expert like Naoroji, Wacha, Gokhale etc. he could ascertain the colossal loss sustained by India on account of British economic policy. He realized that “finance is not mere arithmetic; finance is a great policy. Without sound finance, no sound government is possible; without sound government, no sound finance is possible.”1


In his prolific writings Mahamana has often emphasized the importance of economic prosperity for a nation. We can visualize his progressive economic attitude in his statement that “one of the abstract principles that had been established in the industrial world was to look at problems from national point of view and not to have a parochial and small commercial man’s point of views.”


Economic Philosophy


His economic philosophy was influenced by the writings of John Stuart Mill, Hyndman, Digby and by nationalists like Naoroji, Dutt and Ranade as Malaviyaji has profusely quoted them. There were great debates on vital issues like Indian gains or losses arising from British rule and the ways and means to make India prosperous.


He was critical to the impetus given to British industries at the cost of indigenous by the British in India enriched the rich and reduced the poor to abject poverty. It was the cause of distress among the poor sections and discontent among the educated middle classes. In short, the government policies were considered to be detrimental to the economic development of India.


The central theme of Malaviyaji’s economic philosophy was the regeneration and development of Indian economy which had become an object of exploitation by the British Government Colonial rule broke down the autonomous economy of independent handicraft workers and self-sufficient peasants and directed domestic economic activity towards two main areas-export oriented agriculture with very small returns, to provide primary products for the West at bargain prices. The British altered the political economy and state structure of India to provide state protection to British trade.


Decline in Indian Economy


In the note of dissent given by Malaviyaji on the Indian Industrial Commission in 1918, he suggested many constructive proposals to enable India to develop her industries in her own interest. He stated that India had become an agricultural country from an industrial and agrarian nation due to the policy of the government and not because of any want of industrial capacity, and enterprise among her people.


Malaviyaji cited various sources to prove that India had trade relations with Babylon in 3000 BC and Indian Mulmul had a exclusive market in Egypt and Greece more than two thousand years ago whereas cotton textile industry started in Britain only in the 17th century. India was even superior in technique and quality in Iron and Steel manufacturing and forging, and the world famous Damishk Swords were made by Indian steel.  The British traders ultimately resorted to political injustice to strangle a competitor whom they could never have met on equal terms.


As a member of the Indian Industrial Commission, he endorsed the words of Sir Fredrick Nicholson : ‘I beg to record my strong opinion that in the matter of Indian Industries, we are bound to consider Indian interest firstly, secondly and thirdly-I mean be ‘firstly’ that the local raw products should be utilized by ‘secondly’ , that industries should be introduces and by ‘thirdly’ that profit of such industries should remain in the country.


Agrarian Economy


According to Mahamana, the poor economic condition of the people was due to growing burden on land because of decline in rural industries. He made an enquiry of the economic condition of the masses with a view to take steps for its remedy. He considered the imposition of British land revenue and tenancy systems as a great burden on the peasant community therefore he demanded the land revenue to be reduced by twenty five to thirty percent and a guarantee made against the enhancement of land tax. Revenue demands had to be paid in cash, which had helped to draw urban moneylenders and traders into local level economic relations, further deteriorating the condition of peasants. Therefore he wanted the government to collect its dues in kind and not cash and that too should not exceed more than six percent.


Malaviyaji realized that the lack of adequate irrigation facilities and high rises in the price of food grains further aggravated the problem of poverty and famine prevalent in the country. He regretted that sufficient attention was not paid to irrigation in spite of repeated recommendations of the Famine Commissions of 1880 and 1901-1903. He advocated that there should be increase in irrigation from tanks and wells besides canals and other means of artificial irrigation. He suggested that the government should advance taqavi to tenants for making wells and supported his arguments with the sayings of ancient sages who had stressed on the importance of storage of water and lamented that the British Government spent seven times more on Railways than on Irrigation, though irrigation yielded five times more than the Railways.


Means to Improve the Economic Condition


Mahamana was of the opinion that the cultivators deserved reduction in land tax. He even opposed the restriction on free movement of grains from one province to other and was in favour of imports to save the people from starving to death. The soundness of his policy can be appreciated by the fact that he even suggested the maintenance and sale of food grains at subsistence price, which the masses could afford, a policy which seems to be the forerunner of the present day ‘Below Poverty Line’ scheme regarding distribution of food grains by the Indian government.


Not only this, he even advocated for the establishment of an agency which would purchase grains directly from the cultivators, advancing money to them and on the other hand selling it at economic prices to the poor, a replica of the above can be said to be the Farmer’s Cooperative Societies of the modern days. He realized that the want of credit was a major headache of agriculturists therefore he urged the government to supply more credit on cheap rates to them and to promote banking facilities which would reduce the necessity of landowners going to the local moneylenders. He also realized the necessity of inviting the representatives of tenants to the representative Assemblies so that they could articulate and safeguard their interests effectively.


Mahamana pleaded the cause of Permanent Settlement in the Congress and Provincial and Imperial Legislative Councils because he believed that it would check the growth of burden on land, accumulate capital and promote other agro-based industries and ultimately lead to improvement in the economic condition of the masses.


He stressed for the adoption of scientific agriculture as it would increase the per hectare yield, at the same time he cautioned against the blind acceptance of western methods and implements of agriculture which would further add to the difficulties of peasants. He endorsed Mackenna’s view that, “as in the case of plant, the improvement of the local material which the cultivator can himself make and repair and which his cattle can draw seems the more hopeful line of improvement.”  He was against tax on agriculture, as he considered the land revenue paid by the peasant as a form of tax and thus it would amount to double taxation.


Importance of Industrialization


In his words, “A purely agricultural country cannot prosper and be self-supporting any more than a merely manufacturing country.” Malaviyaji realized that though the country lacked expertise and machinery a national economic policy had to be adopted which utilized the local raw products established industries and the profits gained should be used for the development and progress of the country.


Banks as Edifice of Economic Development


He was convinced that the economic development of the country was not possible unless there was a sound and extensive system of banking, especially in a country like. India where the habit of hoarding was prevalent and banking tendencies were at primary state.


When Malaviyaji presided over the Congress for the second time, it passed the resolution that, “While generally welcoming the recommendations of the Industrial Commission and the policy that in future the Government must play an active part in promoting the industrial development of the country the Congress hopes that in the practical application of this principle, the object kept in view will be encouragement of Indian capital and enterprise and the protection of this country against foreign exploitation, with the sole aim of making India industrially and economically self contained and self dependent.”




Mahamana considered a developed transport system like Railways essential for industrial development. It was a ‘public utility’ meant for ‘services’ and not profit and he wished them to be run as a financial proposition in the public interest.


He regretted that in spite of enormous natural resources and raw material, it was not used for India’s economic development, rather it was exported out of the country and even the Freight policy of the Railways helped to this end. In his opinion, “If there was common stock for all state lines of the same gauge, and if they are properly distributed according to actual requirements, they would result in great savings of vehicles, reducing capital cost and avoiding empty haulage.”


Tariff and Fiscal Policy


 Malaviyaji criticized the tariff policy of the colonial government and the countervailing excise duty on Indian goods which had destroyed the indigenous art, handicraft and industries. He advocated that protection should be given to Indian industries in the same way as Britain and other Western countries followed for their respective industries.


Importance of Swadeshi


The main object of Swadeshi movement was the improvement of the economic condition of the country. He was a constructive nationalist who emphasized on adopting a policy of self-help and self-sacrifice. He realized that “the consumers will save a little money for a time but they will have to be dependent upon foreign manufactures for their supplies in the years to come and foreign manufactures will mercilessly fleece them more than any other manufacturers.”


He was convinced that appreciation of rupee was against the interest of indigenous trade and industry and was also detrimental to the cultivator as they got less for their produce. According to him gold Currency was advantageous to the country as it would give higher wages to wage earners and secure profits to agriculturists and promote indigenous industries. He wants government control over the credit and currency of the country as it greatly affects the nations economy.


Mahamana had firm belief in the Indian philosophy and value system and he believed in the saying of “Isha Upanishad’ that “Knowledge is wealth, knowledge is power”. Mahamna’s philosophy reflects a balanced approach to development which endorsed a righteous way of living but without scarcity and poverty. He supported industrialization because he considered that economic resurgence of India was not possible without creating a firm industrial base and to this end, he was emphatic about the urgent need for scientific and technical education in India for which a national University was set up at Banaras to provide highly qualified and trained technical, scientific and engineering personnel which are the prerequisite for industrial development.


Though he was concerned more with the problems of peasants but in his opinion, ‘State should have the duty to safeguard the interest of Industrial workers and secure for them a living wage, healthy conditions of work and protection against old age, sickness and unemployement.’


He was opposed to labour strikes as he considered it detrimental to the interests of the public and the labour but even then the recognized the right of the labour to go on strike to safeguard their interests. Thus we see that Malaviyaji was a nationalist leader whose ideas regarding labour show his concern not only for them but also the national economy.


Mahamana believed in the ancient Indian thought that ‘all life was worthy of reverence and that everyman’s comfort was worthy of our earnest consideration’. Which sounds closer to the doctrine of violence and common ownership of property. He seems to be more closer to the socialists, as he wanted State control over basic industries and advocated a socio-political system based on justice to foster economic progress.


Malaviyaji’s economic philosophy was centered around national interest and the good of the common man was the central theme of his economic ideas. His vision has assumed even greater importance in today’s ‘knowledge based’ world economy where the nations are pursuing policies that encourage innovation and access to advanced knowledge. It was his vision to adapt modern technologies along with indigenous methods to our specific needs in order to bring progress and prosperity to the nation.

Mahamana Madan Mohan Malaviya