The impact of the ongoing pandemic on the world economy has caused many states to announce economic stimulus packages. Some commentators have described this move as socialist in nature due to the uniform embrace of some aspect of welfare state policies. India’s package, which is the largest announced by a developing state, has similarly been described as a return to its socialist roots. This description leads us to two interesting questions: Is India constitutionally and historically a socialist nation? And can we call the stimulus package a socialist move?
The first question appears simple to answer, given that the Preamble to the Constitution describes India as a socialist country. However, the word ‘socialist’ was only inserted by the 42nd Amendment in 1976. In reality, the framers of the Constitution did not want it to explicitly endorse a specific social or economic model. Ambedkar opposed K.T. Shah’s amendment to Article 1 which described India as ‘socialist’, arguing that this impeded the democratic right of the people to choose their favoured economic or social structure.
The subsequent insertion of the word ‘socialist’ did not actually make a huge difference to the larger picture of Indian economic policy. While the government at the time continued to nationalize banks and enact fiscally socialist policies, this was eventually followed by the economic liberalization movement and the rise in private enterprise.
However, the words of the framers did have some impact on some economic policies. Ambedkar’s view was that the Fundamental Rights and the Directive Principles of State Policy (DPSP) both required the state to embrace certain aspects of welfare state economic policies. Draft Article 31 (Article 39) in particular made it clear that the state’s policies had to aim to provide all citizens with ‘an adequate means of livelihood’ and ensure that the ‘operation of the economic system does not result in the concentration of wealth and means of production to the common detriment’.
The Indian state has traditionally subscribed to a model of welfare economics. This can be attributed to the need for social welfare initiatives in a highly-populated developing country with poor socio-economic indicators, which was clearly anticipated by the framers to some extent.
It is not clear if India’s stimulus package is best characterized as a socialist move. The inclusion of some policies within a larger stimulus package, even if it provides assistance to economically vulnerable communities, does not necessarily mean that the state has embraced socialism. We can however view the stimulus package as furthering Article 39 of the Directive Principles.