The Hindu Business Line : The Constitutional dilemma -- Liberal or socialist economy?

WHEN the Constitution was framed, B. R. Ambedkar, echoing the same sentiment, declared that there is "complete absence" of one thing in Indian society — equality and that "on the Economic Plane, we have a Society in which there are some who have immense wealth as against many who live in abject poverty".

When Article 1 of the Constitution was being considered by the Constituent Assembly, Prof K. T. Shah moved an Amendment to the effect that in clause (1) of Article 1, the words `Secular, Federal, Socialist' be inserted so that the Amended Clause (1) would read: "India shall be a Secular, Federal, Socialist Union of States". Mr H.V. Kamath, however, felt that `Socialist' and `Secular' should find place in the Preamble.

Prof Shah's Amendment was, however, vetoed by the House after Dr Ambedkar pointed out that the Directive Principles in Part IV were declared to be Fundamental in the governance of the country and the state was categorically mandated to implement them. Referring, in particular, to the provisions of Article 39 (Article 31 in the Draft Constitution), Dr Ambedkar observed that "if these Directive Principles...are not Socialistic in their direction and in their content, I fail to understand what more Socialism can be".

Apart from the mandate to the state in Article 39(b) & (c) to direct its policy towards securing that "the ownership and control of the material resources of the community are so distributed as best to subserve the common good" and that "the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment", the general and overall mandate in Article 38 is to strive to "secure and protect... a Social Order in which Justice, Social and Economic and Political shall inform all the Institutions of the National Life".

In India, "social" and "economic" justice cannot but mean justice to the weaker and the poorer sections of the society. And Article 38(2) has now specifically provided that the mandate is to "minimise the inequalities of income and "eliminate inequalities in Status". All these cannot leave any room for any doubt that the Directive Principles, which are declared in Article 37 to be "fundamental in the governance of the country" are socialistic.

It should also be noted that while the right to carry on any trade, occupation or business is conferred on a citizen by Article 19(1) (f) of the Constitution, Article 19(6) unmistakably empowers the state to impose any reasonable restriction on such Right "in the interest of the general public".

Apprehending that this in itself might not sustain every nationalisation and/or state monopoly, Article 19(6) was amended to make it beyond doubt that all sorts of nationalisation and creation of state monopoly would stand on their own strength and the state need not show or prove any "interest of the general public" to sustain such ventures. And in Akadasi Pradhan (1963), a unanimous 5-Judge Bench of the Supreme Court, speaking through Justice Gajendragadkar, observed that this was the manifestation of the "doctrinaire approach, which Socialism accepts".

By the Constitution (Forty-Second Amendment) Act, 1976, the word, `socialist' was inserted in the Preamble and, again, a unanimous 5-Judge Bench of the Supreme Court, in Excel Wear (1979), observed that this would now "enable the Courts to lean more and more in favour of nationalisation and state-ownership of industries".

The New Liberal Economy being pursued now aims at increased privatisation, more private sector industries, denationalisation, decontrol, and so on, and is patently not in favour of state-ownership or state-control of trade, business or industry.

Is the economic policy of liberalisation violative of "socialism", which is a basic feature of the Constitution?

If it is violative, even a Constitutional Amendment would not be adequate to sustain this economic policy because, as ruled by the 13-Judge Bench of the Supreme Court, in Kesavananda in 1973, and in a number of post-Kesavananda decisions, the basic features of the Constitution cannot be altered, damaged, destroyed or, in any way, affected by any Amendment.

The imposition of President's Rule under Article 356 of the Constitution in several States was upheld by the Supreme Court S. R. Bommai on the ground that the policies pursued and avowed to be pursued by the State governments were anti-Secular and were, thus, violative of secularism, which is one of the basic features of the Constitution. If that is so, it would be pertinent to ascertain whether this New Liberal Economy, which is not compatible and not in accord with the principles of socialism, as adopted and accepted in the Constitution, can be legally pursued, when the Constitution has accepted and adopted socialism as one of its basic features.

It is not necessary to go either to Marx, Engels, Lenin, Mao or Castro or to Vivekananda, Gandhi or Nehru, to understand the different nuances of socialism which, because of the varied glosses, has become a term of protean significance.

The debates of the framers of the Constitution in the Constituent Assembly, the relevant provisions of the Constitution, for instance, Article 19(6), 38, 39, and observations of the Supreme Court, in construing the expression in various decisions would obviously guide in ascertaining the meaning of `socialism', brushing aside all theoretical abracadabra.

Accepting that all these would do immense good to the economy, can we opt for them under the Constitution?

In several decisions, the Supreme Court has taken note of this "recent liberalised free economy" and that as a result "private and multinational entrepreneurship has gained ascendancy and become entrenched into wider commercial production and services, domestic consumption of goods and large-scale industrial production" and that even "public corporations are thrown open to the private national and multinational investments".

But the Supreme Court has not adverted to or considered the legality and constitutionality of this policy in the context of socialism being a basic feature of the Constitution.

(The author is a former Chief Justice of the Calcutta and Bombay High Courts, former Justice Krishna Iyer Professor, National Law School of India University, Bangalore, and Dr Ambedkar Professor in Law, University of Mysore.)

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