Although known and lauded for his invaluable contributions to politics, law and social reform, Babasaheb Ambedkar’s work in the field of economics solicits equal praise.
“Sachin Tendulkar? Mumbai Indians”.
“Amartya Sen? Nobel Prize”.
“Shah Rukh Khan? Filmfare”.
“Babasaheb Ambedkar? Constitution of India”.
These were some of the answers that I received from my subjects when I had conducted a “Free-Association Word Test” on them, wherein the subject is told to state the first word which comes to their mind in response to the given word. Interestingly, every single subject of mine, spread across various age groups, had correlated Ambedkar with the Constitution of India, while there were largely wide ranging replies in case of the other names on my list.
Though certainly not meant to be an accurate quantifier of society’s opinions, this extreme result, while validating the almost unanimous public acknowledgement of Dr Ambedkar’s huge contribution to India’s political and judicial system, also betrays the fact that his equally or arguably more prominent contributions in other fields such as economics and banking – an example being the establishment of the still-functioning Finance Commission of India – are often overlooked or understated by a significant, if not a major, proportion of Indians.
Born in humble surroundings to a family belonging to the often exploited Mahar caste termed as “Untouchables”, Dr Bhimrao Ramji Ambedkar, popularly known as Babasaheb Ambedkar, had an undying ambition to reform the shackled society that he was born in, and made his way up to the top, going on to get a Bachelor’s degree from the University Of Bombay and then proceeding on to procure two doctorate degrees in Economics from two premier institutions, Columbia University and London School Of Economics (LSE), while also managing to get trained as a lawyer from the prestigious Gray’s Inn at London.
The two dissertations that he wrote for his doctorates in economics at Columbia University and LSE, the first one which discussed the financial relations and financial distribution between central and state Governments, and the second one which was a critique on the Indian Rupee, raised important points of debate and discussion, some of which are still relevant in the current economic system.
Before he shifted course and embarked on a career in law and politics, economics was his foremost area of interest and in 1918 he was appointed for a brief period of time as a professor of political economy at Sydenham College. During that period, he wrote a famous essay on farm land holdings, for publication in a journal run by the Indian Economic Society, titled “Small Holdings In India And Their Remedies”, which still remains an article subject to critical evaluation and analysis by current economists.
Pramit Bhattacharya examines this essay and highlights Ambedkar’s farsightedness and evident mastery of the subject, in an article for LiveMint, titled “The Economics of Ambedkar”, writing “What is most remarkable about Ambedkar’s analysis is that he was able to conceive the notion of “disguised unemployment” much before it came into vogue in development economics, and that he was able to anticipate one of the key insights of Nobel Prize-winning Economist Arthur Lewis three decades before Lewis formulated his famous two-sector model of the economy.”
Dr Ambedkar pointed out that, the sole presence of many places in the country, where there is a combination of a large agricultural population coupled with a very low proportion of land under cultivation, meant that a significant percentage of the agricultural population was sitting idle. This was a forerunner to the idea of “Disguised Unemployment” which came up a few decades later.
While it is not possible to fully summarise in depth the wide reaching topics that Dr Ambedkar touched in his many works, one very significant argument he came up with was that the country was in dire need of industrialisation, which would curb the problem of idle agricultural population as well as smoothen out numerous other complications associated with the agricultural economy.
Besides that, he was against the supporters of minimum state intervention in the economy, or mainly industries and agriculture. He felt that capitalism would go against the principles of economic democracy and that unregulated economic activity would only lead to widening of the economic gap between the rich and the poor, and the exploitation of the latter. Thus he advocated an economy which would be regulated to some extent by the government.
Such ideas might seem common and basic to the current generation, but at that time, with the subject of economics not having been as explored and practiced at depth as it is today, and with old countries breaking up and new ones materializing, the decision of choosing a particular economic system to follow, after independence, was an arduous task. The fact that India’s political and economic framework is not extreme and reflects moderance and has largely remained stable over the decades is a testament to Dr Ambedkar and his fellow policy makers’ successful economic planning.
Apart from research papers and journals, Dr Ambedkar also wrote three books on the subject. He studied the financial and administrative system of the East India Company, and the British India Government in depth, and included many components in the post-Independence models. He is also credited with the establishment of the two most important institutions of the Indian economy, the Finance Commission Of India and the Reserve Bank of India.
Citing fiscal imbalances between the central and state Governments and between state Governments themselves, he conceptualised the Finance Commission in 1951, when he was serving as the Law Minister. Dr Ambedkar had presented an outline and various guidelines with respect to the formation of a central bank to the Hilton Young Commission. Based on these, the Commission came up with a set of recommendations which were later instrumental in the conceptualisation of the Reserve Bank Of India.
“While discussing the multidimensional personality of Dr B R Ambedkar, it is but natural and forgivable to forget that first and foremost he was an economist”, writes Abhinav Prakash Singh for Swarajya. He indeed touched countless lives, was involved in a vast number of fields and played numerous roles during his fulfilling existence as an Indian citizen, and wouldn’t have minded being remembered by his fellow citizens in any of those roles. But as a mark of gratitude and respect for his contributions, we ought to remember every single one of them.
Feature Image Credits : Pam And Phil Blog