Gadgil

Gadgil led the Indian economic thinking away from the economics of the national
movement by simply ignoring the latter.The unexplained break from the economics
of the national movement did not, however, help Gadgil use ideas from the Wester
n classics to understand the Indian economy. By 1941, he was challenging the cla
ims of universality in Western formulations. He insisted that much of that theor
ising was for a series of static situations, while an economy was in a process o
f continuous transition brought about by technological change and other shocks.H
is scepticism about the value of theoretical models led to a focus on empirical
micro pictures, which, in turn, led to an emphasis on local solutions, as reflec
ted, for example, in his faith in the cooperative movement.
He founded the Gokhale Institute of Politics and Economics .
Gadgil was a classical liberal, devoted to democracy and human rights. Like Gokh
ale he sought to bring about change incrementally. And while not discounting the
role of the state, like Gokhale again he placed great emphasis on voluntary and
collective civic action. Mahalanobis, on the other hand, was more enamoured of
the transformative powers of the state. Hence, perhaps, his affinities to Marxis
m and his strong sympathies for Soviet-style planning.
Rejecting the demand that planning in a poor country should initially concentrat
e on consumer goods industries, Gadgil observed: "An emphasis on increased produ
ction of consumer goods because this can be easily achieved or because the produ
cts are immediately in demand exhibits only a short-period view... universal exp
erience shows the necessity of starting with the basic industries on which alone
lasting economic progress or development can be based".
He called for promoting consumer goods producing SSI for employment generation,
while the state should focus on investments in heavy industries. This is similar
to Mahlanobis.
In the sixties Gadgil became an advocate of intermediate technology in the conte
xt of a labour surplus economy. He was not an opponent of advanced modem industr
ies. But their number is likely to remain small in the foreseeable future. The c
reation of just a handful of them may lead to the accentuation of dualism in the
economy. At the same time he did not disregard the question of efficiency. He w
anted new units on the smallest possible scale that produced efficiently.In this
respect, too, Gadgil is close to Mahalanobis who called for continuous upgradin
g of small-scale industries.
As for Gadgil, he did not agree "that the larger the farms the more is the produ
c-tion.I may add that innumerable studies since the 1960s on the relation betwee
n land size and yield per acre in India corroborate that smaller hold-ings do no
t generally lag behind the bigger ones; hence the advantages of scale are non-ex
istent. Gadgil also thought that laissez-faire (free buying and selling of land)
would widen disparities (ibid). It is now evident that he did not oppose ceilin
g laws per se.