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Mahatma Gandhi’s theory of Economics

Mahatma Gandhi’s theory of Economics

Tag:GS-3||Economy|| Structure of the Indian Economy|| Labour and Unemployment

What is the issue?

  • With India facing new age economic challenges, Gandhi’s economic wisdom might prove to be of help.

What is Gandhi’s economic wisdom?

  • J C Kumarappa called it “economy of permanence”. (J C Kumarappa is a Gandhian thinker and economist)
  • Gandhi suggested that the best people in the city and the best in the village should be brought together.
  • He advised the youth of those days to go to villages, whether it was Subhash Chandra Bose or Nehru or hundreds of other highly educated people in the city.
  • He also asked the people of the village to go for inspiration to the region.
  • His economic model made it possible to save a life by simply switching to less automated production systems.
  • By this way, the nature is treated as less of a raw material.

How different is India’s economy from Gandhi’s idea?

  • For Gandhi Ji, economy meant construction of jobs, more than production, more than profits.
  • In comparison, India has only increased production over the past 70 years because it has brought a lot of money to a few people.
  • It was genuinely believed that those few people would transfer the profit to the masses.
  • Jawaharlal Nehru has tried to do that seriously, as others have, and the current PM Modi is also trying to do that.
  • But this hasn’t happened, unfortunately.

What is the consequence?

  • Over-production and over profit and development markets are falling and growth is collapsing.
  • Economic recovery is much to be hoped for, but the prospects are too limited and extremely demanding.
  • At the latest climate action summit, activist Greta Thunberg expressed concern about the trajectory of global economic growth.
  • “You people are destroying my country,” she said to the rulers.
  • It was so concerned that many developed countries have converted to homogenized economic systems so completely that they may not be able to return.
  • However, India’s economy, which was dear to Gandhiji, is still alive in India.
  • So, there is a possibility of going back to nature, unlike the many other countries that have homogenized economic systems.

How can that be achieved?

  • A hundred years after Gandhiji, India is unable to draw a line between the handmade and the device.
  • However, the country must begin the scale as the most sacred of all handmade; a little less handmade is a little less sacred and so on.
  • This alternative needs time, as well as hundreds and thousands of what Gandhiji calls constructive workers who are going to go to the villages and arm them with systems.

What should be done?

  • Over the last 250 years, millions of dollars have been spent in industry.
  • The knowledge accumulated is in the construction of systems of accounting, management, production, managing markets, managing production, etc.
  • But the villagers do not have this.


  • It is time to inspire thousands of young people, who are rendered jobless every day, to go to the villages.
  • India definitely needs Gandhi. But, the challenge is to find ways to utilize his wisdom to sort out the problems created in the last seven decades.

Mains model question

  • Gandhiji’s economy is sacred and also scientific. How relevant is Gandhiji’s theory of economics relevant in today’s era?