The concept of Socialism in the Indian context dates back to 1931 resolution of Indian National Congress, wherein under the President ship of Sardar Vallabhbhai Patel, the party adopted a resolution recommending that political freedom must be supplemented by economic freedom
After Independence, while discussing about the Preamble of the Constitution, our constitutional forefathers gave immense importance to Socialism to achieve the goal of equality in distribution of income and assets.
The State was given pre-eminence in economic activity and Public Sector was accorded greater importance in transforming the society. Prime Minister Jawaharlal Nehru was greatly influenced by the rapid strides made by the Soviet Union by adopting planning and socialism and wanted India to follow the same path.
Directive Principles of State Policy clearly mention about the goals to be achieved by the State. The concept of socialism gained more prominence during the tenure of Indira Gandhi. The Nationalization of Banks and abolition of Privy Purses are normally the examples given by analysts to point out the determination of the Government in taking the country towards socialism.
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But the global economic scenario and the failure of the Public Sector to live up to the expectations of the people led to a change in the thinking of the Government towards the policy of increased investment by the Government. The foreign exchange crisis in the year 1991 forced the Government to make rapid changes in its economic policies and socialism gave way to privatization and globalization.
But it is important to remember the fact that Socialism is an economic idea and it is an end to be achieved by the State. Some people get confused about the objectives of Socialism and think that the only way to achieve equitable society is through more Government participation in the economic affairs of the people. Equating socialism with PSU’s; means of socialism to ends of socialism.
By disinvesting from the Public Sector units, the Government is saving precious resources of the country and is diverting them for much needed welfare programmes. In this way, the goals of socialism are better achieved than through mindless investment in the public sector units.
To conclude, the welfare of the people should be the top priority of any Government, and as long as it is achieved through any of the economic systems, whether it is capitalism or socialism, importance should be given to the final achievements and clearly the policies followed by the previous governments over the last fifty years have failed to achieve the desired results.