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Economic thoughts of Dr. B. R. Ambedkar for Indian economy
Article · April 2016
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MRMVKS, MSEDCL Division, Allapalli & ISSN No. 2394-8426
Gurukul International Multidisciplinary Special Issue on
Research Journal (GIMRJ) with Dr. Babasaheb Ambedkar’s
International Impact Factor 2.254
Global Vision
Economic thoughts of Dr. B. R. Ambedkar for Indian economy
Prof. Omprakash Arun Sonone
M.Com., S.E.T. (Mah. & Guj.)
Asst. Professor, Dept. of Commerce,
Chintamani College of Commerce, Pombhurna
Abstract:
Bharat Ratna Dr. B. R. Ambedkar was dynamic person in Indian history. He was
contributed as an economist, sociologist, legal luminary, educationalist, journalist, Parliamentarian,
editor, social revolutionist, height of the human rights etc. He was a first highly educated scholar
within untouchable community in India. He wrote three scholarly books and many papers on
economics. Indian economy is mixed economy and have impact of changes in social, political and
economical changes before and after independence. He represented problem of physical and
economical exploitation of rural poor through his movements. Dr. Ambedkar has given new socio
and political view to Indian economics. Dr. Ambedkar decided to “changeover from economics to
law and politics” He argued for fixed gold standard for exchange rate. He told that low exchange
rate increases exports and boosts internal prices.
In the age of global market vision 20-20 mostly contain his economical thoughts. The
economically use of public funds and its proper utilisation for planned objectives can be growth the
economy of nation. Democratic people must to enlightened each other for his canon and judicial
provisions regarding public funds and its uses. It is solution for positive impact on elected
representatives. He proceeds to say that, if agriculture is to be treated as an economic enterprise,
then, by itself, there could be no such thing as a large or small holding. He also suggested
‘Industrilisation’ as a helpful and effective solution for both agriculture and Indian economy. In his
early life he scholarly contributed Indian Economy with his writings. Within middle of 20th century
he devoted his life for upliftment of backward classes with constitutional efforts. He was a scholar
modern economist and his thoughts background of current scenario. Now the days need to
upliftment of real economical backwards to build economically powerful nation.
Key Words: Indian economy, canon, public fund, utilisation, upliftment, industrialization
Introduction:
Bharat Ratna Dr. B.R. Ambedkar was dynamic person in Indian history. India remember
him for all social, economical, political and religious efforts for upliftment of the lowest stratum of
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MRMVKS, MSEDCL Division, Allapalli & ISSN No. 2394-8426
Gurukul International Multidisciplinary Special Issue on
Research Journal (GIMRJ) with Dr. Babasaheb Ambedkar’s
International Impact Factor 2.254
Global Vision
Indian society known as untouchables. He was contributed as an economist, sociologist, legal
luminary, educationalist, journalist, Parliamentarian, editor, social revolutionlist, height of the
human rights etc. He fights for not only social but also economical equality.
He was born in British-founded town and military cantonment on 14th April 1891. This was
a poor and backward family. With the help of various scholarships he become a graduate in
economic and political from Bombay University in 1912 and post graduate in economics from
Columbia University in 1913. He has completed his Ph.D. with the subject of Economics in
London School of Economics and Political Science in 1922 and become first highly educated
scholar within untouchable community in India.
Dr. Ambedkar wrote three scholarly books on economics
(i) Administration and Finance of the East India Company, (Columbia University,
1915).
(ii) The Problem of the Rupee: Its Origin and Its Solution. (P S King and Son Ltd,
London 1923)
(iii) The Evolution of Provincial Finance in British India, – A Study in the Provincial
Decentralisation of Imperial Finance (P S King and Son Ltd, London 1925).
The first and third books represent his contribution to the field of public finance: the first
one evaluating finances of the East India Company during the period, 1792 through 1858. The
second book, represents a seminal contribution to the field of monetary economics. In this book Dr.
Ambedkar examined the evolution of the Indian currency as a medium of exchange covering the
period, 1800 to 1893 and discussed the problem of the choice of an appropriate currency system for
India in the early 1920s. The third one analysing the evolution of the Centre- State financial
relations in British India during the period, 1833 through 1921.
Methodology:
Researcher has used secondary data in which research papers, articles are used. Researcher
has used collective observation method for current scenario.
Objective:
To study the economical thoughts of Dr. B. R. Ambedkar for Indian economy and relevance
of these thoughts in current scenario.
Thoughts of Dr. B. R. Ambedkar for Indian Economy:
Dr. Ambedkar represented problem of physical and economical exploitation of rural poor
through his movements. His struggle against the prevailing land tenure system called Khoti was
best example of his thoughts of equilibrium.
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Indexed Journal Referred Journal http://www.gurukuljournal.com/
MRMVKS, MSEDCL Division, Allapalli & ISSN No. 2394-8426
Gurukul International Multidisciplinary Special Issue on
Research Journal (GIMRJ) with Dr. Babasaheb Ambedkar’s
International Impact Factor 2.254
Global Vision
Indian economy is mixed economy and has impact of social, political and economical
changes before and after independence. Dr. Ambedkar has given new socio and political view to
Indian economics. Dr. Ambedkar decided to “changeover from economics to law and politics” as
he remarked in the preface of the Indian edition of The Problem of the Rupee in 1947.
He clearly told “continued devaluation of the Indian currency which while was good for
Indian exports, was not good for the Indian economy. Increasing and decreasing values of gold and
silver has been problematic issue to decide exchange rate.” At that time gold and silver coins are
use as a currency. It troubles to fix standard of gold coin exchange with silver coin or foreign
currency due to change in price of these metal. Ambedkar’s writings took all this and argued
stridently for a proper gold standard with gold currency as he was highly critical of the gold
exchange standard though the latter received powerful theoretical support from all the then leading
authorities including John Maynard Keynes. Neither was Ambedkar a votary of deliberate lowering
of the exchange rate whether planned or unplanned. He told that low exchange rate increases
exports and boosts internal prices. In the current situation globalization and privatization are mostly
affecting factors to economy. Govt. is supporting to increase export. This benefits the trading
classes at the expense of the poorer people at home.
The main point he makes is that an alien government cannot be expected to use the funds it
has to the betterment of the people. As he made it clear: “if the Executive in India did not do certain
things most conducive to progress it was because by reason of its being impersonal and also by
reason of its character, motives and interests it could not sympathies with the living forces
operating in the Indian Society, was not charged with its wants, its pains, its cravings and its
desires, was inimical to its aspirations, did not advance education, disfavored Swadeshi or snapped
at anything that smacked of nationalism, it was because all these things went against its grain”.
That means this is must to use the fund for betterment of people. If the Govt. could not concentrate
to proper use of fund, it will be misuse of fund and slow growth rate of society. In the current
scenario political clashes and corruption is increasing problem for Indian economics. If central or
state government launches scheme for upliftment of poor and backward but channel of middlemen
and politician deduct most of the part of provided fund.
Economy needs public finance for human beings living in society require certain things like
roads, law and order, defense, disaster management, infrastructure, etc. Citizens in democratic
forms of government are promised by their elected representatives to improve their welfare by
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MRMVKS, MSEDCL Division, Allapalli & ISSN No. 2394-8426
Gurukul International Multidisciplinary Special Issue on
Research Journal (GIMRJ) with Dr. Babasaheb Ambedkar’s
International Impact Factor 2.254
Global Vision
judicious provision of such public goods and services, and they place their trust in the government
by delegating authority to take taxation and expenditure decisions. When the citizens are thus not in
a position to comprehend clearly the consequences of government action, it is so easy to mislead
them by false claims. Hence it becomes all the more necessary for the government to be faithful to
the original intentions. For example, if a certain sum is allotted to agriculture sector to improve its
facilities without specifying the item of expenditure, a more faithful way of spending would be on
Agricultural laboratories, crop loans, canals, dams, agriculture market, warehouses and other items
of agriculture rather than on frivolous things such as expensive offices, air conditioned meeting
hall, public places in village, etc.
Dr. Ambedkar stressed on maximum utilisation of public funds. He said that economic
wisdom becomes a paramount necessity in the context of a just utilisation of public funds. But mere
apparent faithfulness to the original intentions and wisdom are not sufficient in themselves for
public expenditure to achieve social well-being. The importance of the third canon of public
expenditure takes a special meaning here. ‘Economy’ in public expenditure does not simply mean a
low level of public spending, but it is the intelligent use of funds so that every paise fetches the
most benefit. Those in charge of public funds must strive to evaluate alternative methods of
achieving the objectives and see to it that leakages do not occur. The canons emphasise that the
expenditure decisions should closely relate to the specified objectives and the available resources
besides ensuring economy, efficiency and effectiveness in the implementation of government
decisions, schemes, projects, etc. Public funds are asset of country it is in large scale but due to
corruption and political pressure it does not reach completely to the end beneficiaries.
While the determination of the aggregate level of expenditure is a matter of overall policy
based on the democratic willing of the people, allocation of that total among competing demands
and the manner of utilisation fall within the domain of these canons. In the present context of high
fiscal deficits, a rigorous application of the Ambedkar canons can help reduce the quantum of
public expenditure.
In his paper ‘Small holdings in India and their remedies’ published in 1918, he takes on a
problem that is still haunting Indian agrarian system. As he argued, land is only one of the many
factors of production and the productivity of one factor of production is dependent upon the
proportion in which the other factors of production are combined. In his words: “the chief object of
an efficient production consists in making every factor in the concern contribute its highest; and it
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MRMVKS, MSEDCL Division, Allapalli & ISSN No. 2394-8426
Gurukul International Multidisciplinary Special Issue on
Research Journal (GIMRJ) with Dr. Babasaheb Ambedkar’s
International Impact Factor 2.254
Global Vision
can do that only when it can co-operate with its fellow of the required capacity. Thus, there is an
ideal of proportions that ought to subsist among the various factors combined, though the ideal will
vary with the changes in proportions”. From this he proceeds to say that if agriculture “is to be
treated as an economic enterprise, then, by itself, there could be no such thing as a large or small
holding”. He concludes that “Industrialisation of India is the soundest remedy for the agricultural
problems of India”. This can generate adequate surplus that will also eventually benefit the
agricultural. Industries need raw material and most of it available from agricultural production. It
increase demand and agriculture become surplus. Most of the population is engaged in farming in
India. Hidden unemployment in agriculture and dependency of increasing population can become
problem for an economy. Industrilisation a positive solution proceeded by him.
He hoped that his study of economics will lead to useful policy conclusions. Thus policy
oriented welfare issues interested him more than studying the technical aspects of the discipline to
demonstrate economic theorems. This however does not mean that he did not show any regard for
theoretical conclusions derived by others. Indeed it is significant that his knowledge of economic
theory was amazingly up-to-date. Not only was his reading of contemporary economic literature
wide and deep, he applied whatever that was in the cutting edge of the discipline to concrete
situations, very imaginatively. Just to give an example, in a paper he wrote in 1918, he refers to the
contributions that appeared in the American Economic Review.
He said: “Society is always conservative. It does not change unless it is compelled to and
that too very slowly. When change begins, there is always a struggle between the old and the new,
and the new is always in danger of being eliminated in the struggle for survival unless it is
supported”. That was his experience in his practical life of upliftment of untouchables. He devoted
his whole life for upliftment of society. He had worked to destroy the distance between high level
and low level untouchable. He fought for human rights and equal use of natural resources, chance
to be a part of the nation. He placed much value on democracy and individual liberty which he
thought could be preserved by judicious state action. He was a ‘Masiha’ for all the backward casts
because in many areas of Indian economic history, he was truly a pioneer and he faced all the
problems that a pioneer faces as he pointed out in the preface of his The Evolution of Provincial
Finance.
Conclusion:
Dr. B. R. Ambedkar was intelligent economist of their time. He had contributed not only
thoughts but also fought for upliftment of exploited. His economic thoughts have been useful to
Indian economy and can be used as positive solution for current economic problems in India.
Quarterly Journal Peer Reviewed Journal ISSN No. 2394-8426 Page 267
Indexed Journal Referred Journal http://www.gurukuljournal.com/
MRMVKS, MSEDCL Division, Allapalli & ISSN No. 2394-8426
Gurukul International Multidisciplinary Special Issue on
Research Journal (GIMRJ) with Dr. Babasaheb Ambedkar’s
International Impact Factor 2.254
Global Vision
References:
1. Dr. Ingle M.R., Relevance of Dr. Ambedkar’s Economic Philosophy in the Current
Scenario, Sept, 2010.; International Research Journal , September 2010 ISSN- 0975-3486
RNI: RAJBIL 2009/30097 VOL I * ISSUE 12
2. Mr. Ambiraja S., Source: EPW, http://atrocitynews.wordpress.com/2007/03/24/ambedkars-
contributions-to-indian-economics.
3. Jadhav N., Neglected Economic Thought of Babasaheb Ambedkar, Economical and
Political Weekly, dated 13th Apr, 1991.
4. Arya R. K., Dr. Choure T.; The Economic Thoughts of Dr. Bhimrao Ambedkar with
Respect to Agriculture Sector; Developing Country Studies; ISSN 2224-607X (Paper) ISSN
2225-0565 (Online); Vol.4, No.25, 2014.
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