Economic Dimension of Hindutva, Part 8; Savarkar’s Economic Principles (4/13)
The economic trajectory of a nation is often shaped by its government’s role in capital accumulation and investment direction. In colonial India, where capital largely remained in private hands, Vinayak Damodar (Veer) Savarkar saw an essential role for the state in fostering national industries. He believed that the government must not only accumulate financial resources but also channel them into crucial economic sectors to ensure sustainable development.
The Challenge of Capital Flow During Colonial Rule
During British rule, Indian capital found itself diverted into areas that promised quick profits rather than long-term industrial investments. Rising land and agricultural prices, along with expanding trade, led investors to pursue safer and more lucrative opportunities instead of risking capital in heavy industries such as iron and steel. This trend significantly hampered the industrial development of India, as capital-intensive industries were perceived as high-risk ventures with delayed returns.
Economic historian Dietmar Rothermund highlights that this misallocation of capital resulted in stagnation across both the agricultural and industrial sectors. Under such conditions, a well-balanced industrialization of India remained a distant goal. The lack of productive reinvestment meant that the economy failed to generate sustainable growth, leaving rural producers and laborers in a cycle of financial insecurity.
Savarkar’s Perspective: State as the Economic Guarantor
Savarkar recognized that in order to build a self-reliant economy, future Indian governments had to assume an interventionist role. This meant not only accumulating capital but also ensuring that investments were strategically placed to serve national interests. He envisioned a state-driven economic model where the government would act as a mediator among various economic stakeholders, balancing the demands of capitalists, laborers, and the agricultural sector.
His view aligns with the broader economic debates of the time. The British administration often justified the slow industrial growth of India by arguing that pre-colonial capital was primarily directed toward military expenditures rather than industry. They contended that agriculture and handicrafts required minimal investment due to their reliance on simple, ‘appropriate’ technologies. Furthermore, the agrarian-fiscal system posed challenges such as liquidity shortages, preventing the growth of a robust industrial sector.
The Consequences of Economic Imbalance
One of the most damaging effects of colonial economic policies was the financial vulnerability of rural populations. With profits from agriculture concentrated in the hands of traders and moneylenders, small farmers and tenants found themselves without financial reserves. In times of crop failure, largely due to unpredictable monsoons, these groups were left defenseless against famine and debt cycles. The economic data from 1913 paints a stark picture: while Indian farmers’ total debt stood at approximately 5 billion rupees, the total value of land was around 40 billion rupees, whereas industrial investments barely reached 300 million rupees.
Rothermund further explains that even when capital was extracted from the agricultural sector, it did not transition into industrial investments. Instead, it was funneled back into agricultural credit and the land market, driving up land prices and exacerbating financial instability for farmers. The fragmented nature of agricultural finance, with profits spread across numerous intermediaries, meant that meaningful capital accumulation remained limited.
The Need for a State-Led Industrialization Strategy
Given these economic realities, Savarkar’s advocacy for state-led capital accumulation becomes even more pertinent. By ensuring state intervention in financial planning, investment allocation, and industrial strategy, India could break free from the colonial economic constraints and establish a foundation for sustainable growth. His vision suggests a pragmatic and moral role for the state—not as a mere regulator but as an active architect of national economic progress.
Final Thoughts
In conclusion, Savarkar’s economic thought underscores the necessity of state intervention in guiding a nation’s financial destiny. His emphasis on directed capital flow and industrial prioritization offers insights into how economic self-sufficiency can be achieved. Today, as India navigates its modern economic challenges, the lessons from Savarkar’s vision remain relevant, reminding us that economic sovereignty is built upon strategic state action and long-term investment planning.
💭 What do you think? Do you agree with Savarkar’s view that the state must actively guide capital accumulation, or should markets decide where investment flows? How do you think colonial economic policies shaped India’s present-day industrial and agricultural imbalances? Savarkar envisioned the state as a “mediator” between capitalists, workers, and farmers. Do you think such a balance is possible in modern economies? In today’s India, where private capital plays a dominant role, what lessons (if any) can be drawn from Savarkar’s call for state intervention? Do you see parallels between Savarkar’s economic thought and later models of planned economies in India (such as Nehru’s Five-Year Plans)? If Savarkar’s economic ideas were applied now, do you think they would strengthen India’s path toward self-reliance, or conflict with globalization? 👉 Share your thoughts in the comments below!
Sources:
DESHPANDE, Sudhakar. 1999. Savarkar. The Prophetic Voice. Dastane Ramchandra & Co.: Pune.
KRÜGER, Horst. 1985. Anfänge sozialistischen Denkens in Indien. Der Beginn der Rezeption sozialistischer Ideen vor 1914. Band II. Akademie-Verlag: Berlin.
PATWARDHAN, V. S. 1989. „Savarkar’s Economic Thinking“, in PHAKE, Sudhir/PURANDARE, B. M. and Bindumadhav JOSHI. (Eds.). 1989. Savarkar. Savarkar Darshan Pratishtnah (Trust): Bombai (Mumbai), 118-122.
PHADTARE, T. C. 1975. Social and Political Thought of Shri V.D. Savarkar. A Thesis submitted to the Marathwada University for the Degree of Doctor of Philosophy. Unpublished: Aurangabad.
ROTHERMUND, Dietmar. 1985. Indiens wirtschaftliche Entwicklung. Von der Kolonialherrschaft bis zur Gegenwart. Schöningh (UTB): Paderborn.
ROTHERMUND, Dietmar. 1983. The Indian Economy under British Rule and other Essays. Manohar: New Delhi.
SAVARKAR, Vinayak Damodar .2007. Hindu Rashtra Darshan. Bharat Bhushan. Abhishek Publications: New Delhi.
SAVARKAR, Vinayak Damodar. 1945. Hindu Rashtravad. Being an Exposition of the Ideology & Immediate Programme of Hindu Rashtra as outlined by Swatantrayaveer V.D. Savarkar. Rohtas Printing Press: Rohtak. (Collected & Edited by Satya Parkash).
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