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Gandhi Says Socialized Industry Is Inefficient

October 29, 1986

NEW DELHI, India (AP) _ Rajiv Gandhi said Wednesday that abuses of the socialist principle on which India was founded have created stagnant industry and lazy, inefficient labor that the country cannot afford.

The 42-year-old prime minister delivered his most scathing attack on lethargic, highly protected industry in two years of trying to invigorate the economy.

Low growth, low exports and a rising trade deficit continue despite his efforts.

Gandhi told a conference on industrial productivity that his government no longer will tolerate the production of expensive, low-quality goods and will refuse to nurse ″sick″ industries.

″The brunt is borne by the poorest people, ″ he said, ″and a poor country cannot afford to carry on billing the poorest people for its inefficiency and call itself socialism.″

For too long, he said, industry has operated ″In a very protected atmosphere with a feudal creed of buying cheap and selling expensive, taking short-cuts to make bigger profits, cheating the customer on the one hand and the revenue collector on the other.″

It is ″producing substandard goods, careless, irresponsible, not really bothered about what it is doing″ beyond the prospect of quick profit, he said.

The constitution under which India has been governed since independence in 1947 describes it as a socialist democratic republic. It has a mixed economy, dominated by the state-owned public sector.

Gandhi encountered trouble more than a year ago when he tried to delete the ″socialist plank″ from his Congress Party’s platform. An outcry from the party old guard forced him to restore it.

On Wednesday, he declared his rejection of all economic ideology.

″The design we have built is our own,″ he said. ″It is not a communist pattern, it is not a capitalist pattern. It is what we have thought is best for India. It is an Indian pattern.″

He criticized Indian labor, especially unionized workers, as ″perhaps among the most inefficient in the world.″

″It is not that our labor is poorly paid,″ he said. ″It is very well- paid. Sometimes it is too well-protected.″

The prime minister said India has adopted most suggestions of the International Labor Organization ″and the result has been that labor seems to have lost interest in the production process. Today what is important is only how they can keep jobs and get more.″

Socialism is ″a highly abused word″ that has been wrongly used to justify a multitude of economic sins, he said, and ultimately ″the buck will have to stop somewhere.″

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