The world is undergoing dramatic changes even as we pass the 76th anniversary of the Great October Revolution. But at this moment of rebuilding the movement, a Journal such as ours cannot hope to cover all events that Marxist-Leninist have to be aware of. We can only take on issues that illustrate general theoretical and practical problems. Though many highly significant events have occurred since Alliance 4.

For now, we know that events in Somalia and the Middle East are relatively easy for Marxist-Leninists to understand. In Somalia, the hypocrisy of the UN mask "of neutrality" has been thrown off by the USA masters. But they have difficulties in subduing the raging struggles they themselves have previously ignited. Unfortunately we are not aware of any representatives of the Somalia poor and middle peasantry, and the small working class. There appears not to be a significant and strong Marxist-Leninist party. No representatives of the workers and peasants is currently vying with the national bourgeoisie. In that fatal vacuum, there can be no successful end to the struggles of the Somalia peasants and minuscule working class, and no true independence.

In the Middle East, we have previously outlined part of the game plan of the USA in Alliance 2, which analysed the Gulf War. We examined the rise of Middle Eastern Nationalism, centring around Nasserism. We showed how US imperialism in its fight with a declining British imperialism, struggled to control the Middle East producers of oil. We depicted the state of Israel as a client state of the USA. Just so, Israel's current rapprochement with the Palestine Liberation Organisation (PLO) reflects a desire of the USA to obtain a degree of stability in the Middle East. Nonetheless, we support the current initiative despite this. Because for the first time since they were driven out, some Palestinians will have a beginning of a homeland. We view this as a small progressive step, a potential base; towards a future secular joint Palestinian-Israeli State. But, again the achievement of this requires a Marxist-Leninist party.

At a future date we hope to review these topics in some detail. However, in this issue we concentrate upon one major underlying issue, that unifies both these topics. Of course, this is the National Question in colonial-type countries.

The article following is one that we committed to in Alliance 4. Solving the problems raised by Somalia and Palestine, and India we suggest, requires understanding the stages of struggle of the workers and peasants in the colonial countries, and correspondingly their allies. This forms part of the programmatic goals of Marxist-Leninists world wide.

For as Marxist-Leninists know, this debate was one of those that divided Trotsky from Lenin and Stalin. The commonest Left wing distortion is the Trotskyite one, that unless there is a socialist revolution led by the Communist party, there can be no national progressive democratic revolution against imperialism. Marxist-Leninists will not be troubled by this. But less well known are the distortions introduced by the hidden revisionists inside the Communist International. The correct policy of United Fronts with the revolutionary type bourgeoisie in colonial countries, during the first stage-the Democratic stage, was distorted after 1928 by the Comintern (CI).

In relation to India, the CI foisted the Communist Party of Great Britain, (headed by hidden revisionists) upon the Communist Party of India (CPI). Then it destroyed the possibility of winning the best elements away from the Indian National Congress, by a sectarian turn. In the middle of this complicated nest of turns and distortions, and counter-claims, the character of the Indian state has been obfuscated.
What occurred in the apparent "transfer of power" from the British to Nehru on August 15th, 1947 ? These are not arcane academic questions. The answers will dictate the approach to the continuing national liberation struggles world wide.

A common Marxist-Leninist view of India, states that 1947 represented a coming to power of the comprador bourgeois capitalist class, in a facade erected by the British. Thus because of this, the two stages of revolution (The bourgeois democratic revolution and the socialist revolution) both have to be carried out. The corollary is that a revolutionary bourgeoisie still exists in India.

In this article we agree that there is an unfinished democratic revolution (stalled by the bourgeoisie) to be carried out prior to socialist revolution. But we pose the stages of revolution in relation to the multi-national character of the Indian state. We identify the rulers of India at 1945 as a class coalition of the Pan-Indian national capitalist class, dominated by the Marwari national capitalist class, and a comprador capitalist class. We attempt to work out Marxist-Leninist attitudes for India, and distortions of the line. This article is meant for discussion. Of course, comrades in India are significant discussants, but the entire international movement is of necessity joined in this debate.

This is particularly so, since our analysis of the CI from 1928 alarms some Marxist-Leninists. We urge public airing of disagreements with tabling of counter-documents, and a non-sectarian open discussion. The movement can learn only from open discussion. Of course, disagreement on the interpretation of these historical events is not the basis of splits. However, if disagreement extends to principles, exemplified in means of practical work nowadays, the implications are obvious. This article is Part One of an article that will be concluded. In part Two (Hopefully to be published over the next six months) we will analyse events in India from 1945-1993.

Amongst Indian progressive and Marxist-Leninist movements there have been intense debates on the issue of the character of the state in India. The participants realise that the class character of the State decides the strategy of Marxist-Leninists towards revolution in India. The Communist League of Britain (CL) has reported the period up to 1928, in a two volume work (London, 1977). This document cites from it, in order to extend the analysis to 1947 (Part One). Part Two will cover the period 1947-1993.

The central question is whether the comprador capitalist class or a variety of National bourgeoisie took control of the Indian State after 1947. Perhaps three hurdles are faced in answering this question. These are :

Firstly to characterise the nature of the industrial base that India had at Partition (this phrase avoids the term Independence).

Secondly to define Congress party politics. It is a fact that the Congress party was originally formed by the British to pre-empt a movement of independent minded Indians. But equally it was also clear that by the time of the British Partition, the Congress was a class coalition.

Finally the multi-national character of India needs to be considered.

These three hurdles, or issues superimpose themselves on one fundamental underlying question. This is :"What attitude should communists take to the bourgeoisie in a colonial-type country ?"

On this question, first Lenin was divided from Trotsky; and then Stalin and Trotsky were divided.
We take our stand on the importance of the bourgeois democratic national revolution as proposed by Lenin and Stalin. How relevant is this analysis in the 1990's?

It is significant that Stalin in his talk to the "University of the Toilers of the East", uses the phrase that there are 2 wings of the national, or native bourgeoisie in India:

If, as Stalin argued, there WAS a revolutionary wing, then WHERE was it?
To ignore that the Congress Party harboured some of the "revolutionary part" of the bourgeoisie would be to search in the vastness of India, for the proverbial needle in a haystack. Thus the Congress cannot be dismissed as wholly a tool of the British imperialists.

Any Marxist-Leninist history of India must include the struggles of M.N.Roy. True, he had a chronically Leftist interpretation of the bourgeoisie in a colonial type country. But, in practice, both in India and his ill-starred mission to China, he adopted Marxist-Leninist principles aimed at a United Front with the National bourgeoisie. Roy agreed with Stalin that there were at least 2 wings within the Congress party; the capitulators and the more resolute. He attempted to form a principled united front with the best elements. In so doing, he fell into dire conflict with the Comintern.

Furthermore, both the CL and other Marxist-Leninists have noted the positive contribution of Dyakov to the debates on India. Dyakov, a member of the USSR Academy of Sciences, was an acknowledged expert on Indian affairs. His observation of the multi-national character of the Indian state is key to forming current Marxist-Leninist policy in India.

Dyakov thought that the post-Partition state represented a coming to power of a section of the bourgeois and the middle bourgeoisie that had turned reactionary. But, according to Dyakov, until Partition (engineered by the Mountbatten Plan), the now reactionary bourgeoisie had been struggling against British imperialism. In this struggle, he clearly identified a dominant national bourgeoisie that was now oppressing other nationalities:

One other question should be asked. What did the turncoat, erstwhile Pan-Indian revolutionary bourgeoisie now do, after 1947? Perhaps they were content to remain under the thumb of Imperialism?  

After all, a bourgeoisie that is defeated has two choices. Either it accepts its subservience to Imperialism, remaining content with its level of profits; or else it fights back.

We believe that this bourgeoisie continued to fight by stealth, no longer fighting battles in the streets. But now, it was a battle in boardrooms, assisted by the Foreign Exchange Regulations enacted by the new state.

In support of this controversial contention, data from this period shows that although the absolute level of Direct Foreign Investment (DFI) increased from 1947 to 1980; when expressed as a percentage of total industrial and trade investments, it actually fell:

Ensuring there was not a separate party, representing the nascent national capitalists was a master stroke of the British, who had first floated the INC under Octavian Hume.

This INC coalition was to acquire considerable sway over the peasant and workers masses of India. Thus the accession to power by the INC in 1947 effectively allowed a weakened British capital to retain some neo-colonial hold. To ensure this, British imperialists arranged the Partition of India, by the Mountbatten Plan. This ensured that the hostility between Hindu and Moslem would continue. Thereby crippling further Indian development by cutting Indian industry in two, handicapping industry in both the future infant states- Pakistan and India.

Furthermore, as stated above, we suggest that the response of the nationalist wing of the INC was to continue to "fight Imperialism by stealth" - Always just enough to maintain its development. This battle by stealth (as opposed to overt "street fighting") over the subsequent 30 years, resulted in a State control of key sectors that aided the Gujerati-Marwari-Parsi Pan-Indian capitalists to further their own industrial development. The economic data here should be scrutinized critically, to ensure we adopt a correct orientation.

Simultaneously, the Marwari capitalists suppressed development of the other nations of India. In so doing the Gujerati-Marwari capitalists suppressed the major planks of the Democratic stage of the revolution. This includes Land Reform which was obstructed and distorted in a thousand ways. They reneged on their own programmes, and halted the democratic revolution. This needs to be, and will be completed.

But if economic data does demonstrate "a struggle against imperialism by stealth", why should the Pan-Indian Marwari-Gujerati-Parsi national bourgeoisie need (from their perspective) to be in alliance with the workers in 1992, at a Pan-Indian level ? In this context, support of a pan-Indian bourgeoisie would be a Rightist error.

But this does not mean to say that alliances with the smaller struggling embryo national bourgeoisie are to be ignored; this would be a Leftist error. Support to the "regional" ie. embryonic (or usually embryonic) national bourgeoisie would be a correct tactic. Here the working class party should attempt to become the leading force in a class alliance aimed first at securing the National Democratic Revolution, and then moving uninterruptedly to the Socialist Revolution.

PART ONE outlines Indian economic development. In the 1900's, this formed the two new classes that would shape India - the industrial bourgeoisie and the industrial proletariat. We start with development of Indian capital and their political representatives, examining British imperialism's attitude to native capital. We examine views of Marxist-Leninists to the bourgeoisie in colonial-type countries, and India; with the formation of the Communist Party of India (CPI). In doing so, we cover deviations from Lenin and Stalin, promulgated by the Comintern (CI). We end Part One just after the Mountbatten Plan of imperialism.

PART TWO, (This was to have been completed at a later time. But this task was never compelely fulfilled, however in a later polemic in 1998 it was at least partially completed. This will be also placed on the web shortly -Editor Alliance; February 2000) will examine the Nehru and Mahanobis Plan to develop India, halting of Land Reform, the national question in India, the struggle between USA and USSR social-imperialists for the control of the Indian state, and finally the recent victory.

SOME MARXIST-LENINIST VIEWS

A COLONIAL-TYPE COUNTRY MAY BE :
1. A colony ie. under the open direct political rule of a dominating Great Power;

2. A semi-colony ie. nominally independent but with its economic system largely dominated and controlled for the benefit of the ruling class of a dominating great Power;

or 3. A neo-colony ie. a former colony which has become nominally "independent" but which continues to have its economic system largely controlled for the benefit of the ruling class of the same dominating Great Power which formerly ruled it directly.

The nominal "ruling class" of a semi-colony or of a neo-colony is one which is dependent on the ruling class of the dominating Great Power.

CLASSES IN THE COLONIAL-TYPE COUNTRIES.
Sooner or later the struggle for national liberation from the domination of the Great Power concerned develops in every colonial type country. In the 20th Century, in general:
the classes in a colonial-type country which could be benefitted by the national liberation are :
1. The working class
2. The urban petty-bourgeoisie
3. The peasantry and
4. The national bourgeoisie, that section of the capitalist class whose whole interests are held back the domination of the Great Power.

In general, the classes in a colonial-type country which have interests that would be harmed by the national liberation are :
1. The landlord class; and
2.The comprador bourgeoisie, ie. that section of the capitalist class the interests of which (mainly commercial and financial) are dependent upon the domination of the Great power.

ENTRY OF BRITISH IMPERIALISM, DISINTEGRATION OF ORIENTAL DESPOTISM AND DEVELOPMENT OF THE INDIAN MERCHANT CLASSES

By the end of the 18th Century, India was not a single State. However significant links between parts of the sub-continent had been established. These resulted in Indian trade nets that antedated the British East India Company, but were then used by the colonists:

 "At the beginning of the colonial era the Indian merchant communities already had well developed financial and trade networks. These networks were used by the Europeans, the British in particular, for their own ends ie. colonial plunder and conquest "
D.N."Indian big bourgeoisie and the national question." Economic and political weekly, 4 March, 1989. 454-456.

"India rarely had a unified state structure, with centralised extraction of the surplus. This is particularly so with regard to the Deccan, which was only rarely directly subject to the powers that ruled the Gangetic plain. The Gangetic plain, on the other hand was more often than not under the rule of a single kingdom. The Gangetic plain is the Hindi-Hindu heartland of India."
D.N. Ibid. p.454

"When even some of the feudal rulers joined the peasants and rebel soldiers in fighting British rule in 1857, the men of money on the contrary, were invariably on the side of the British." The Jagat Setts, the Nathijjiis, the Rustomjis or the Tagores clung to the foreign company. The Mutiny of 1857 found the men of liquid money generally on the British side. The services of Lala Jotiprasad, Nansiala Abechand or the Muttra Sethijis who financed the authorities in those days was long remembered."
DN, Ibid, Citing Sinha N.C. "Studies in Indo-British Economy Hundred Years Ago." Calcutta 1946 p.23

"Functioned as mercantile and money lending agents of British capital.. following 3 main routes. One followed the coast from Bombay into Central India.. across the Indian Ocean to Arabia, Africa and China. The Parsis and the Gujerati Banias were the main communities involved, along with them were.. the Bhatias, Cutchi Memons etc. The Second movement was a basically external one of the Nattukotai Chettiar moneylender-merchants from Madras to Ceylon, Burma and South-East Asia. The 3rd movement was of Marwari capital from North West Rajputana supplemented by Khatri capital from Punjab, along the Gangetic plain to Calcutta and the North East."
Ibid citing Rajat K. Ray : The bazaar in Tripathi ed : "Business communities of India" 1986. Delhi.

"Public works (ie cisterns canals and roads ED) have been almost entirely neglected throughout India.. The motto has been : Do nothing, have nothing done, let nobody do anything. Bear any loss, let the people die for famine, let hundreds of lakhs be lost in revenue for want of water or roads, rather than do anything."
Lt.Col. Sir Arthur Cotton : "Public Works in India" Madras; 1854; p.272-3.

Because trade was largely controlled by certain communities, particular regions of India became dominant in the mercantile businesses. The less well developed regions were unable to prevent influx of aggressive experienced traders. To follow this development, it helps to distinguish the various sub-types of the merchants :

"There were two types of merchants, one being long distance merchants and bankers who were of high caste status usually vaishya caste of dwiyas (twice born) like the Marwari and Gujerati Banias and the Agarwal and Vaish communities of United Provinces; though the Nattukotai, not being twice born were an exception. The other were low caste and mainly peddlers and retailers at the village level. The former were able to accumulate enough capital to transform themselves into industrialists."
D.N. Ibid, p.454.

"In the homeland of the great Bania communities, the Marwari and the Bania communities, and the Agarwal and the Vaish communities of UP were numerous in their native places and were thus to be found at all levels of trade and finance - from the village Bania to the all-India hundiwal (Bill-Broker). But away from the heartland of the great Bania communities, caste and ethnic distinctions tended to reinforce the distinctions between the top controlling level of the indigenous trading and the peddling and retailing levels of rural and urban trade. In Punjab, the ascending scale of caste status distinguished the baking and merchant communities from peddlers, carriers, cattle dealers, green grocers and liquor and meat sellers. In Eastern India the distinction assumed an ethnic and linguistic form. Biharis, Oriyas, Bengalis, and Assamese were overshadowed in the higher levels of indigenous banking and trade by migrant communities from Marwar, Cutch and Gujerat."
Cited by D.N. p.455 from Ray, Ibid.1984, 241-242.

"Ray points out that the Provincial Banking Enquiry Committee Reports were full of complaints from the local traders, Bengalis, Oriyas, Assamese, and so on about the unfair dealing and practices of the Banias from Rajputana and Gujerat.. "
D.N. Ibid p.455.

 "The discrimination the local traders experienced at the hands of the upper level of merchant bankers certainly played a role in fuelling the development of a regional, sub-national or, more correctly called a national consciousness."
D.N. Ibid, p.455

"The classification of 75 larger industrial houses made by the Monopolies Inquiry Commission shows that the Gujeratis and Parsis control 37% of the total assets of these houses, the Marwaris control 25% and foreign houses control 13.5% - making a total of 5.5% of the total assets of these houses controlled by the Gujeratis, Parsis, Marwaris and foreign houses."
K.Prakash: " Language and nationality politics in India" Madras, 1973; p. 137.

"Why did the merchant-bankers of the Hindi heartland not play a similar role in the development of a regional, national consciousness in the Hindi belt ? Why is it that what developed in this region was only a pan-Indian consciousness ? The reason for this could lie in the fact that this region did not have itself much of an indigenous trading community. The merchants and traders, down to the village retailer, came from the great Bania communities. Thus there was no local trading class that could have an interests in carving out a regional market, through the spread of a regional national consciousness. Further the merchant class in this area was already operating on a Pan-Indian scale. They had spread through the country and beyond in the Pax Britannica. Thus for them the interest was not just some regional market but the all India market. The consciousness they wanted to build, was that of the Pan-Indian identity. In fact they stood opposed to the expression of the various regional national identities. The above situation did not change much in the transition from merchant to industrialist."
D.N. Ibid. p.455.

As well as traders, Indian society had a well developed artisan type industry. The hand loom industry with cottons was already exporting to Europe:

"The hand loom and the spinning wheel, producing their regular myriads of spinner and weavers, were the pivots of the structure of that society. From immemorial times, Europe received the admirable textures of Indian labour, sending in return for them her precious metals, and furnishing thereby the material to the goldsmith.. It was the British intruder who broke up the Indian hand loom and destroyed the spinning wheel.. Those family communities were based on domestic industry, in that peculiar combination of hand weaving, hand spinning, and hand-tilling agriculture which gave them self supporting power. English interference.. dissolved them.. by blowing up their economical basis.."
Karl Marx in "The British Rule in India" In "Articles on Britain." Moscow, 1971. p. 171.

"Till 1813 India had been chiefly an exporting country, while it now became an importing country; and in such quick progression that already in 1832 the rate of exchange which had been generally 2/6 per rupee sunk down to 2/ per rupee. India, the great workshop of cotton manufacture for the world, since immemorial times, now became inundated with English twists and cotton stuffs.. the whole character of the trade changed.. After its' own produce had been excluded from England, or only admitted on the most cruel terms, British manufactures were poured into it at small and merely nominal rate, to the ruin of the native cotton fabrics."
Marx "The East India Company - its history and results " Ibid p.180-181.

"We have swept away their manufactures; they have nothing to depend upon but the produce of their land ". Cited p.5. Perspective on India. HK (Source from Alliance)

"Till (1813).. the interests of the moneyocracy which had converted India into its landed estates, of the oligarchy who had conquered it with their armies, and of the millocracy who had inundated it with their fabrics, had gone hand in hand. But the more the industrial interest became dependent on the Indian market, the more it felt the necessity of creating fresh productive powers in India, after having ruined her native industry. You cannot continue to inundate a country with your manufactures, unless you enable it to give you some produce in return. The industrial interest found their trade declined instead of increasing.. the power of consuming their goods was contracted in India to the lowest possible point."
Marx, Ibid p.181

"The (British industrialists) found that in all attempts to apply capital to India they met with impediments and chicanery on the part of the India authorities. Thus India became the battle field in the contest of the industrial interest on the one side and of the moneyocracy and oligarchy on the other."
Marx, p.181 Ibid.

Though British efforts destroyed the handicrafts industries, it did not entirely eliminate them. In fact small scale "lower forms" of industry were preserved. Naturally these were unable to accumulate large capital reserves:

"The exploitation of the direct producers, particularly peasants was intensified and the chances for saving were minimised. This put a brake on the development of productive forces and the introduction of modern techniques. The immutable system of reproduction and the way of life in the countryside.. ensured the traditional demands for consumer and producer goods. There was to put it in another way, a direct relation between the persistence of the backward productive forces in agriculture and the preservation of the lower forms of industry. "
Shirokov G.K. "Industrialisation of India",  Moscow, 1973. p.15.

"The small producer - the semi-independent craftsmen, cottage workers, and so on - held on to their hereditary occupations even though their incomes often fell short of the physical minimum of subsistence. Such cases were frequently in industries traditionally reserved for definite castes (chamars in tanning and shoe making, juhals in hand - weaving)."
Shirokov p.16 Ibid.

"Differences in the national, caste and religious composition as well as in climatic conditions, created specialist demands for the various types of manufactured goods sold in the markets in different parts of India. Mechanised enterprises with their standardised and mass production found it unprofitable to put out goods satisfying the requirements of the different castes or of the relatively small groups of people.. since foreign capital had a monopoly of equipment and technical know-how, the handicraft industry was in essence the sole sphere of production which promised the majority of small entrepreneurs a share in industrial profits.. The entrepreneurs had some special advantages in the sphere of industrial production.. no big capital expenditures.. usually the workers worked in the homes, had little contact with each other and could not organise.. Thus in competing with small entrepreneurs, factory industry foreign and local failed to make full use of its advantages : low production costs, cheap finished articles, standard designs and mass production."
Shirokov G.K. Ibid p. 18.

"Competition coupled with the advance of capitalism transformed some village industries and urban handicrafts into small scale commodity production and then into the lower forms of capitalist industry - simple co-operation and the manufacture system.. so the turn of the century was marked by a certain reinvigoration of the small scale industries."
Shirokov G.K., Ibid, p.18-9.

"Such big capital did not develop from smaller industrial capital but from within the comprador-moneylender network, where profits were high and there were certain opportunities of accumulating a money hoard in the colonial situation.. thus it was the classes most intimately connected with the colonial and feudal exploitation of the country that made the transition to capitalist industry."
DN, Ibid. p.455.

INDIAN RAILWAY AND LAISSEZ-FAIRE

Initially, the British state refused to aid even British owned industry in India, was justified by the ruling theory in economics - Free Trade and with it Laissez Faire. Ironically, the days of Laissez-Faire were numbered.

"The hey day of the British power in India was the high noon of laissez faire economic doctrine. To interfere as little as possible with economic progress was considered to be the highest wisdom.. (but) the financial emergency of the Mutiny (1857-1859) left the Government with a pressing problem of way and means."
The Oxford History of India " V.A.Smith, 4th Edition edited by P.Spear, Delhi, 1988. p.703.

By 1910, figures from Sir George Paish showed that India and Ceylon were the 5th largest recipient of British capital exports. Of this:

 "Just under PS 271 million of British capital exported to India by 1910 - 75 of the total- had been invested in India."
B.R.Tomlinson. "The Political Economy of the Raj 1914-1947", Surrey, 1979 p.4

"I know that the English millocracy intend to endow India with railways with the exclusive view of extracting at diminished expense the cotton and other raw materials for their manufactures. But when you have once introduced machinery into the locomotion of a country which possesses iron and coals, you are unable to withhold it from its fabrication. You cannot maintain a net of railways over an immense country without introducing all these industrial processes necessary to meet the immediate and current wants of the railway locomotion and out of which there must grow the application of machinery to those branches of industry not immediately connected with railways. The railway system will therefore become in India truly the forerunner of modern industry."
Marx "The future results of the British Rule in India", In Ibid. p. 201.

Usually, the British industrialist was linked to the Indian marketplace by a Managing Agency. These Agreements became a convenient institution for both the industrialist in Britain and the local Anglo-Indian merchants, as resident British traders were then called.

"The merchants had a unique opportunity to branch out from export trading into production for exports only if they acquire new funds; for their part London and Liverpool houses would only supply capital if they could find reliable management able to cope with alien conditions at the end of what was still.. a long and erratic line of communication."
M.Kidron, "Foreign Investment in India", London, 1965. p.5.

"The Managing agency.. became the decisive partner, so much so that companies managed by foreign controlled managing agencies are officially considered to be foreign controlled whatever the ownership."
M.Kidron, Ibid, p.5

Internal conditions included the accumulation of money, the existence of a market for the commodities, and the existence of a labouring class. These conditions were present.

The external condition was the technology and machinery, which had to be imported from Britain since the "normal" developmental stage in India had been bypassed.
 
Inducements for the British imperialist-capitalists were necessary. These were Firstly, the tendency in capitalism for the rate of profit to fall, prompting that phase of Imperialism identified by Lenin as marked by the export of capital not goods; Secondly as Marx noted (see above) the growing need of the British capitalists for a market rich enough to absorb British goods:

"The falling rate in profit in capital invested in Britain was forcing capitalists to seek outlets in the colonial countries for more profitable investment. The machinery manufacturers took the lead in this export of capital to the colonies where machinery could be sold at much higher prices than those prevailing in the market at home in Britain."
D.N. Ibid, p.455-56.

"The economic effects of railway construction were very great. Railways.. transformed the famine problem and made the Famine Code a working proposition.. trade was revolutionised by making possible production for a market and the opening up of the interior to large scale operations. Plantation and factory industries were made possible because coal could be supplied for power at the points of production. Finally India was brought within the orbit of world economy and the range of world prices.. the railways did what they did elsewhere, they hastened the transition from handicraft to mechanical industry by transforming the transport situation, They were an essential preliminary to an industrialized India.. the new industries were made possible.. the first was the cotton mill industry. The new industry did not so much as replace the old handicraft weavers as grow up in the face of a practical monopoly.. it was not until 1853 that the first successful Indian cotton mill was started in Bombay.. Real progress began with the opening of the Empress Mill at Nagpur by the Parsi J.N.Tata in 1887.. by 1914 India was reckoned to be fourth in the world list of cotton manufactures."
Oxford History, Ibid, p.710.

"The jute industries were originally a handicraft of Bengal with small export market. Its' value was first realized in 1838 when export started to Dundee in Scotland. But Bengal jute could only be used for the coarsest goods owing to the lack of standards in cultivation and local manufacture was impossible owing to the lack of means of power.. Improved methods of cultivation.. and.. the development of Indian coal by the new Indian Railway made jute manufacture in Bengal possible.. By 1908 Indian output exceeded that of Dundee. Throughout (1870-1930) India enjoyed a virtual monopoly of jute production. Jute made Calcutta, as cotton made Bombay, Madras, and Ahmedabad industrial cities."
Oxford History, Ibid p.711.

"Modern industries could not have grown without railways and railways could not have worked without coal. Progress was steady. In 1868 1/2 million tons were produced.. in 1938 it was over 28 million tons. India was virtually self-sufficient in one of the essentials of heavy industry. Associated with the new coalfields came the iron and steel industry.. The industry was finally established by the efforts of Jamshed Tata.. his sons founded in 1907 the Tata Iron and Steel Company (TISCO) at Jamshedpur in Bihar. By the end of the period this plant was the largest single plant steel works in the world.. India ranked sixth in the list of steel producing countries. The whole steel industry is a monument of Indian enterprise and skill built up entirely on Indian capital."
Oxford History. Ibid.p.711-12.

"So till the closing decades of the last century, the Indian capitalist remained a ridiculous adjunct to the imperial capitals. It was not until the 1880's that he demanded a more dignified position. This renaissance of Indian capitalism was marked by a strong tendency towards industrialism, and brought into being a city proletariat, separated from the ranks of the proletarian nation."
M.N.Roy "India in Transition." p.371. Contained in Documents of the History of the Communist Party of India Ed.Adhikari Vol 1 1917-1922. Delhi, 1971.

The development of the bourgeoisie inevitably meant the development of the proletariat. As M.N.Roy put it:

"After the real industrialisation of the country began.. in the closing decades of the 19th Century, a revolution in the movement of the population became quite marked. Several large cities had come into existence with their industrial centers.. where a considerable number of workers were attracted from the villages.. the industrial centers did not grow in the same districts of modern India where in the early days had flourished the towns inhabited by a rich trading and prosperous artisan class.. But the native capitalists had to go through a protracted struggle with the foreign ruler before they could build modern industries to any considerable extent. Therefore during the 30 years from 1880 to 1910 the growth of modern industrial centre in India was rather slow. The number of toilers living on wages accumulated in urban centers still remained very small.. since the beginnings of the 20th century, and especially during the last 6 years, there has been a steady influx of workers from the village to the city.. the cost of living is much higher in the towns than in the villages, the worker becomes disillusioned discontent follows.. the struggle for life is harder and more acute.. Indian workers in modern industries were mostly unskilled until 10 years ago (ie. 1912) and the permanent presence of a huge army."
M.N.Roy Cited by Adhikari, Ibid. p.375.

THE POLITICAL REPRESENTATIVES OF INDIAN ASPIRATIONS

 "From the Indian natives, reluctantly and sparingly educated at Calcutta under English superintendence, a fresh class is springing up with the requirements for government and imbued with European science."
Marx, in "The Future Result of the British Rule in India" In Ibid. p.198.

"These ill starred measures of reaction, coupled with Russian methods of police repression, brought India under Lord Lytton within measurable distance of a revolutionary outbreak, and it was only just in time that Mr.Hume and his Indian advisers were inspired to intervene."
Sir William Wedderburn, "Alan Octavian Hume", London, 1913. p.101-2

"A safety valve for the escape of great and growing forces generated by our own action, was urgently needed and no more efficacious safety-valve than our Congress movement could possibly be devised."
Wedderburn, Ibid. p.77.

"Putting aside the demands of the extremists.. the objects even of the more advanced party are neither very dangerous nor very extravagant.. Amongst the natives I have met there are a very considerable number who are both able and sensible, and upon whose loyal cooperation one could undoubtedly rely. The fact of their supporting the government would popularise many of its acts which now have the appearance of being driven through the legislature by force; and if they in their turn had a native party behind them, the government of India would cease to stand up, as it does now, an isolated rock in the middle of a tempestuous sea, around whose base the breakers dash themselves simultaneously from all the 4 quarters of the heavens."
Lord Dufferin, Cited by Sir Alfred Lyall. "The Life of the Marquis of Dufferin and Ava." Vol 2. London. 1905, pp.151-2.

"Was unleashing forces he would not be able to control."
M.J.Akbar: "Nehru: The Making of India." London, 1988, p.45

"Divide et impera was the old Roman motto, and it should be ours. I might perhaps hesitate to express my conviction so decidedly if I were not able to show that my views upon this subject are entirely in accordance with those of the Duke of Wellington."
Cited by Akbar, Ibid, p.33.

The logical goal was a "Two Nation -Hindu and Muslim" Theory in a modern "National" form. This was first enunciated by a British stooge, Sir Sayid Ahmed in 1887. He had been knighted for his defence of Empire against the Indian Mutiny.

The logical divisive step was for a separate party to siphon off the energy of the Muslim agitators. Lord Minto, the Vice Roy mediated the formation of the Muslim League party in 1906. Minto's private secretary, Dunlop Smith wrote to Minto:

"I must send Your Excellency a line to say that a very big thing has happened today. A work of statesmanship that will affect India and Indian history for many a long year. It is nothing less than the pulling back of 62 million of people from joining the rank of the seditious opposition."
Cited, Akbar, Ibid, p.68.

So the Indian National Congress (INC) was clearly initially a movement set off by the British as a false trail, to divert the developing Indian nationalist movement. However, it came to be a very broad umbrella that included diverse individuals and groups. It could not ultimately completely suppress the tides of nationalism.
 
Early on Two Wings of the Congress became clearly demarcated. They were represented by Gopal Krishina Gokhale and Bal Gangadhar Tilak. The former represented a Moderate wing:

"Gokhale was to become the voice of moderation.. He reconciled a real Indian patriotism with loyalty to England. The two he believed -as did Motilal Nehru- were necessarily compatible."
"Nehru-a Political Biography", Michael Edwardes, Harmondsworth, 1973. p.24.

"Swaraj", complete independence and no compromise, 'militancy not mendicancy' was his rousing slogan.. He was extremely successful in arousing mass support and militant action.. (which) led to his arrest and imprisonment and a wider dissemination of his ideas.. New methods of protest were put into practice. There was a boycott of British goods and a general shut down of business. The moderates in Congress now found themselves trailing behind what became a more and more popular movement. The new militant leadership while not condemning violence did call for action and not words. Boycott, not only of British goods but of Government-controlled educational institutions, of courts of law and the rest of the apparatus of alien rule. The people should support "Swadeshi", goods produced in India by Indians.. the phrase 'passive resistance' appears."
Edwardes, Ibid. p.26-27.

"Tilak also praised the Bolsheviks. Like other national leaders her too condemned the Government's anti-Bolshevik propaganda. His paper Kesari is its issue of January 29, 1918, published an article full of praise for Lenin whom he described as a "advocate of peace". At the Rajputana Conference at Ajmer in March 1920, while referring to the growing military expenditure, Tilak said that Bolshevism had just been made an excuse for this. He explained:' Bolshevism did not conquer and enslave countries as the British do. They only spread their doctrine which was the power of labour over capital."
Cited S.Bairathi, Ibid. p. 17.

The First World War provoked much debate as to the attitudes of the nationalists. But clearly the nationalists expected for their "loyalty" during the war to obtain some rewards later. They therefore halted any major struggle, as did the Muslim League.
 
Mohandas Gandhi, having launched a struggle in South Africa against the treatment of Indians there, left for Britain. There he joined the ambulance forces and was about to depart for France's battlefields. But then returned to India at the behest of Gokhale. After the stand of the INC in 1914 to support the war in Europe, Gokhale died.
 
This made it easier for the "Extremists" to return to the party, led by Tilak and Mrs.Annie Besant. In leadership also was Mohammad Ali Jinnah, a conservative future leader of the Muslim League. But at this point he fought against the disunity of Muslim and Hindu. In the Lucknow Pact of 1916, both the Congress and the Muslim League joined together in a demand for Dominion Status. This was a significant step against communalism, though simultaneously a step back from full independence. Since both the Muslim League and the Congress had halted significant attacks on British imperialism, during the First World War, this limited anti-communalism was not a threat to the British.
 
Although the general orientation of Tilak had become more cautious, younger militants were drawn into the Congress. Mrs.Besant was voted into Congress office as the President in 1917, but her leadership was short lived, being rejected by the younger militants in 1918.

By now Mohandas Gandhi had returned to India from South Africa. He turned to Champaran in Bihar, where severe repression of bonded labour and rural workers existed. Here in 1918, he organised the indigo dye rural workers and displayed a capacity of mass agitation. Courting arrest made him a national figure.
 
By 1917, the war going badly, Lord Montagu (Secretary of State for India) had accepted the need for sops to the Indians nationalists. Akbar cites ihs words and comments:

"The increasing association of Indians in every branch of administration, and the gradual development of self-governing institutions with a view to the progressive realisation of responsible government in India as an integral part of the British Empire."
Montagu was buying Indian support for the war.. Sir James Meston warned that not only was nationalists feeling greater than ever, but that Hindus and Moslems were united.. there were other worries too: about the spreading impact of the Russian revolution."
Akbar Ibid, p. 112.

"I recognise that in the hour of its danger we must give, as we have decided to give, ungrudging and unequivocal support to the empire of which we aspire in the near future to be partners in the same sense as the Dominions overseas. But it is the simple truth that our response is due to the expectation that our goal will be reached all the more speedily."
Cited Akbar Ibid, p.113.

On 11 April 1918, General Dyer inflamed the Indian masses even more by his brutal slaughter of over 500 dead in Jalianwalla Bagh, in Amritsar. Gandhi halted the movement (p.118, Akbar Ibid). He would continue to retard the movement at key times. Despite Gandhi's temporary alliance with the progressive Muslim Khilafat movement he clearly was a Hindu obscurantist of the worst reactionary stripes. Tilak died in 1920, leaving Gandhi clear passage. Gandhi's staunch conservative allies in the Congress were Villabhai Patel, Rajendra Prasad, and C.Rajagopalachari. Gandhi rapidly took control of the Congress. He imposed strict non-violence.
 
 When despite this, on 4th February 1922, at Chauri Chaura the masses erupted into violence Gandhi performed a trick that was to be repeated at key times in the future - he called off Civil Disobedience campaigns. Akbar notes that Gandhi said:

"This Swaraj stinks in my nostrils."..
On 11 February the Congress Working Committee quietly substituted the revolutionary call for mass civil disobedience with a 'constructive programme' of spinning, temperance, education and reform.. To do anything else Gandhi said, would be to succumb to the voice of Satan."
Cited Akbar, Ibid. p.151.

"The British had in fact learned something about Gandhi. They now believed - and retained their belief that they had nothing really to fear from him. While Gandhi was in control of Congress they had an unofficial ally. As long as civil disobedience remained non-violent the Government had little to worry about. Who was hurt by Non-Cooperation anyway ? Henceforth the Government would leave Gandhi free as long as possible, arresting him only when it seemed that he was losing his influence which could only be refreshed by a small martyrdom. Meanwhile the Government would take more positive action against the terrorists and the Western-style revolutionaries whom they really feared."
Edwardes, Ibid, p.47-8.

"Nehru in "Soviet Russia" in 1928, wrote about :"that strange Eurasian country, Russia where workers and peasants sit on the throne of the mighty.".. and spoke "And Russia what of her? An outcaste like us from many nations and much slandered and often erring. But in spite of her many mistakes she stands today as the greatest opponent of imperialism and her record with the nations of the East has been just and generous.""
Cited Bairathi, S: Ibid. p.17-8.

 "At the growth of this religious element in our politics, both on the Hindus and the Muslim side, I did not like it all.."
Cited, Akbar, Ibid, p.141.

"Jawaharlal could conceal neither his amazement nor his anger. He unlike Gandhi, did not find a rational answer from Gandhi to his bitter questions. If one Chauri Chaura was sufficient to stop this massive nation wide struggle for freedom, then the British could always employ agents-provocateurs to sabotage the freedom movement.. "
Akbar p.152

"The Muslims (the Khilafat movement) also had no argument with violence in the use for justice. Gandhi' decision to call off the movement after Chauri Chaura was.. bitterly inexplicable to the Muslims.. Gandhi's lieutenants were confident that dominion status for India was within reach of the mass campaign pushed the British hard enough. Britain was exhausted after the First World War. The British themselves acknowledge how close Gandhi came to success. The Governor of Bombay, Lord Lloyd put it:
"He gave us a scare. Gandhi colossal experiment came within an inch of succeeding."
Akbar p.154.

"Drifting to middle class politics or babu politics".
(Cited Akbar, Ibid, p.204).

"This Congress declares the goal of the Indian people to be independence with full economic control over the defence forces of the country, the financial and economic policy and the relations with foreign countries.,. The country demands that this right of the people of India should be forthwith recognised and given effect to, in particular by the complete withdrawal of the alien army of occupation."
Cited Akbar, Ibid, p. 202.

"The achievement of complete independence for India and the reconstruction of Indian society on a basis of social and economic equality."
Overstreet and Windmiller, ibid, p.126.

Another manifestation of the more determined wing of the INC was the formation of the Congress Socialist Party (CSP). In 1934, in protest against the Congress resolutions on private property and the conditions of the working class, Rafi Ahmed Kidwai and Subhas Chandra Bose formed the Congress Socialist Party as a pressure group. Other leaders were Jayaprakash Narayan, Acharya Narendra Dave and Achut Patwardhan. They appealed to Jawaharlal to join, and to target the reactionaries.

Gandhi threatened to leave Congress if the CSP became too powerful. During this period, Jawaharlal was confronted by the right wing of the Congress (including Birla). Gandhi effectively prevented an overt expression of the Congress Socialist Party's views in the form of a binding resolution , ever taking place.
 
IN CONCLUSION:

1. There were clear differences in the degree of militancy of members in the INC.

2. Gandhi objectively represented the most servile and ultimately compliant wing of the Indian native bourgeoisie that came to represent the comprador faction.

3. Jawaharlal Nehru came to represent a more determined nationalist wing. Together with other possible progressive nationalist forces within the INC (eg. The faction around C.R.Das), this wing was opposed to the more moderate wing of Gandhi. But this wing was itself "vacillating", and also anti-Communist. It would back down in future whenever there was a possibility of a socialist up-turn of the masses. But it was more militant than was Gandhi; and did not wish to settle for less than full independence.

4. This meant that there were two wings in the Indian Congress party. This allowed a certain flexibility for work within the INC by representatives of the Indian working class and peasantry. As we will see, this line in colonial-type countries was explicitly endorsed by Stalin.

5. In summary, the INC was a class coalition between representatives of the comprador capitalist class and a developing national capitalist class. This latter was mainly if not entirely, composed of the Marwari nation.

The confusing nature of the class coalition ensured that the real objectives of the INC were obscure to most observers. Stalin, had however pointed out by 1925, that the INC was in effect a class coalition; and that both sections were timid; and that the worker and peasants should take over the leadership (See p.80). Unfortunately this thrust did not achieve fruition, sabotaged as it was at a critical juncture, by a revisionist Communist International.
 
OWNERSHIP OF INDIAN BUSINESS AND INDUSTRY PRE WWI.
COMPRADORS AND NATIONAL CAPITALISTS IN INDIA
 
 The ownership, management and financial capital underlying the large scale industries was dominated by the British. Nonetheless it is significant that this does not mean that there was no ownership by the native bourgeoisie. The process of development of the Indian industrial bourgeoisie was progressing :

"Speaking generally it may be said that the capital of the cotton industry was mainly Indian, that of the iron and steel industries was entirely so, that of the jute half and half, while the coal and plantation industries were mainly British together with that used for the building of railways and irrigation and public works.. Management in the cotton and steel industry was mainly Indian though European technicians were freely employed, that of the jute, coal, and the plantation industries being European.. Their capital apart of course from government enterprises operated through joint stock companies and managing agencies, the latter arose through the convenience found by bodies of capitalist seeking to develop some new activity and lacking any Indian experience, of operating through local agents.. the managing agency was the hyphen : connecting capital with experience and local knowledge."
Oxford History, p.713.

"The first to make the transition from trade to industry were the merchants of Bombay, like the Jeejeebhoys and Tatas. They imported British manufactures and exported Indian raw cotton. They also had interests in shipping and the China trade. The Banias of Gujerat had the same background, though with a lesser foreign trade connection. In the interior of the country were the Marwaris, acted as merchants, moneylender and bankers rather than carrying out proper middlemen activities. They were important both in the internal trade of the country and in procuring raw materials for export, though not in the actual export. This was the second of the sections of the Indian bourgeoisie to make the transition to industry, it included the Birlas, Singhanias and Thapars. The third group came from among the moneylending landowners like Goenka and Bangur."
DN, Ibid. p.455

 "Marwaris.. successfully speculated in the opium and cotton markets. The alliance between the warrior Rajputs and the merchant Marwaris worked to their mutual advantage. Eventually as a consequence of the Opium War in China and trade restrictions imposed by the British the Marwaris found themselves obliged to move out to Rajasthan and develop new outlets.. in seed and bullion.. G.D. decided to start his own broking business.. the British saw no reason to accommodate an inexperienced Marwari.. at the time G.D. left for Calcutta to start a mill.. Andrew Yule the largest managing agency in Calcutta.. did its best to hinder Birla Brothers by gratuitously buying up land adjacent to plots already bought for the factory, forcing the Birlas to go further South where.. the first Birla jute mill came into operation.. G.D. having successfully floated shares for an entirely Indian owned jute and cotton business found the Imperial Bank initially refusing to provide capital. When they were eventually prevailed upon to do so it was a provocatively high rate of interest compared to that charged for British firms. Transport charges.. were raised steeply in an attempt to dissuade Indian intrusion into what had been a British preserve. G.D.. made friends.. with the Maharajah of Gwalior.. who proposed that it might be in their mutual advantage if Birla Brothers could set up a textile mill in Gwalior.. the Maharajah offered to put up part of the money at normal rates."
Alan Ross. "The Emissary. G.D.Birla, Gandhi, and Independence." London, 1986. p.21-31.

Markovits argues that in India, the distinction between "comprador" and "national capital" was not easy to make as there was a great interpenetration between the commercial businesses (ie. more or less equivalent to comprador capital) and the industrial businesses (ie more or less equivalent to national capital) :

"It is easy to show that in India it is not possible to differentiate between a commercial class basically linked to imperialism and an industrial class opposed to it. In fact it is not even possible to make a clear distinction between traders, financiers and industrialists, most big capitalists being all there at the same time."
Claude Markovits, Ibid." Indian Business and Nationalist Politics 1931-1939 " p.24. Cambridge 1985.

"Actually there was in India a category of business men who almost perfectly fitted the description of the classical compradors; they were the great Calcutta Banians, such as Raj Badridas Goenka or Sir Onkermull Jatia who acted as agents and intermediaries for big European business houses. But although an identifiable group, they were not clearly separated from the rest of the Indian business community in Calcutta."
Markovits, Ibid. p.24.

"There was no consensus about the question of foreign capital. Some businessmen like Walchand Hirachand opposed the entry of foreign capital into India; others like Pheroze Sethna welcomed it openly; most capitalists adopting a middle of the road position. "
Markovits, Ibid.p.28

Though often thought of as a uniformly comprador faction, the Marwari community was split into two when the Birlas set up an opposition group in business:

"In Calcutta the factional alignment in big business was connected to the split which had taken place in the Marwari Association (set up in 1898 in Calcutta -Markovits,p.23) in the mid-1920's when a reformist and pro-nationalist party led by G.D.Birla broke away from the venerable association led by Rai Badridas Goenka. The opposition between the 2 parties was 3 pronged. It was an opposition between the banias, still very dependent upon their British connections, and men like Birla who had become business magnates in their own rights; between followers of the Sanatan dharma who opposed social reform in particular widow remarriage and female education and reformist elements; and lastly between staunch Crown loyalists and more pro-nationalist businessmen. The opposition between these 2 factions split the Marwari business community in Calcutta throughout the 1920's and the 1930's.."
Markovits, Ibid,p.39.

 "In the 1930's they (Rai Badridas Goenka) started to diversify their interests. Thus Groenka entered industry and became less dependent upon his British connection.."
p.24 Markovits.

"The link between Indian finance and British industrial enterprise was particularly clear in the case of Cawnpore. However in the 1920's the financial house of Juggilal Kamlapat (Singhania family) launched its own industrial enterprises, a sign that Indian capitalists tended to emancipate themselves from too exclusive a dependence upon a British connection."
Claude Markovits, Ibid. p. 25.

"Practically all big Indian businessmen had some sort of British connection but none were totally dependent upon it. Ahmedabhad was the major exception for British businessmen had never settled in significant numbers in the greater commercial city of Gujerat. But in the other important centers of trade and industry there was a British business community alongside the Indian business community."
Markovits. p. 24

"In the steel industry there was outright monopoly - till 1939 the TISCO remained the only producer of that commodity.. The War had shown the dangerous consequences of India's industrial weakness for British imperial interests. However the victory in Mesopotamia had been possible only thanks to the rails supplied by Tatas, a lesson which had not been lost on English Officialdom.."
Cited Markovits, Ibid, p. 11, 15.

"The division in Indian big business also manifested itself in the field of Labour policy.. attempts to create an Employers Federation had been made since 1929, initially at the prompting of Sir Dorab Tata. They came to fruition in 1933 with the creation of the Employers Federation of India jointly sponsored by Mody and Sir Edward Benthall. However most Indian industrialists outside Bombay did not join the new Federation which they feared would be dominated by British interests. Only the Bombay millowners and the Tatas joined it. "
Markovits, Ibid. p. 94

"This confirmed the split in big business between Bombay and the rest of the country. It was obvious that the Tatas and other big Bombay capitalist placed the class solidarity of all capitalists, British or Indian above any consideration of race or nationality, while other Indian industrialists showed that by refusing to join hands with British businessmen that they gave greater importance to national considerations."
Markovits, Ibid. p. 94

"However Indian businessmen formed the Federation of Indian Chambers of Commerce and Industry (FICCI) in 1927, following the formation of the British business mens association in 1920.. but this remained largely a loose confederation of local chambers.. Some regional organisations like the Indian Chamber of Commerce in Calcutta, the Indian Merchants Chamber in Bombay, the Ahmedabhad and Bombay Millowners Association.. played a greater part in articulating grievances of the businessmen and in pressurising the authorities."
Markovits, Ibid. p.21.

The third main area was Ahmedabad, which was uniquely a purely indigenous capital. The mainstay here was cotton textiles, entirely owned by local businessmen (Jains: Sarkalal Bhalbhai, Kasturbhai Lalabhai and Ambalal Sarabhai; a Patel ; Mafatlal Gagalbhai; and one Vaisnava ; Chamanlal Parekh), excepting one Tata owned mill. Here the industry was much undercapitalised as compared to Bombay. As a whole this center was more homogenously in favour of Nationalism. This can be called the more resolute and militant wing.
 
The remaining centers were much smaller, although Cawnpore (North India), Coimbatore (In Madras Presidency), and Karachi (outlet port of Punjab) also deserve mention.

The fragmentation of Indian industrial interests was shown by the development of these regional blocks (See Markovits, p.19). This prevented a unified business class, despite the Railways, arising whose interests were truly Pan Indian. This obviously allowed the domination of certain specific nations such as the Marwari. Because of the fragmentation of the Indian industrialists, the British were able to play each off against each other. But the objective power of the British was also waning.
 
The extent to which the Indian financier, or the comprador trader could develop into a "fully fledged" industrial capitalist was dependent upon the room left them by British imperialism. British Imperialism underwent a severe crisis immediately during and after the First World War. This tended to let the Indian national bourgeoisie some space to develop. Indeed with the Depression Years, even further room to develop was left.
 
Under this process, even the more Pro-British, or comprador sections were inclined to taking an anti-British stance at least for limited objectives and time periods. Another point of interest is that the group of pro-British Indian capitalists should include even a large industrial firm like Tata. Again, these were not merchants as the classical comprador capitalists were in China.
 
In general the net effect was that the Indian bourgeoisie developed 'airs and graces' beyond their original station in life. They aspired to become the primary capitalists; yet they wished to do so without losing the advantages offered by Imperialism, or arousing the masses to unpleasant visions of revolution.
 
EFFECTS OF THE FIRST WORLD WAR

 1.Lord Hardinge, Vice-Roy of India. Despatch to the Secretary of State for India, November 1915:
"It is becoming increasingly clear that a definite and self conscious policy of improving the industrial capabilities of India will have to be pursued after the war unless she is to become the dumping ground for the manufacture of foreign nations who will be competing the more vigorously for markets, the more it becomes apparent that the political future of the large nations depends on their economic position.. after the war, India will consider herself entitled to demand the utmost help which her Government can afford, to enable her to take her place so far as circumstances permit, as a manufacturing country."
Cited by Kidron, p.13, from A.R.Desai Social Background of Indian Nationalism. p.98.

2.Sir James Grigg, Finance Member for the Government of India in 1939 :
"The attitude of expatriate businessmen.. is now frankly that of making friends with the Mammon of unrighteousness eg Birla and Benthall hunt together for quick profits and the latter does not see that he is thereby weakening his own ultimate safeguard (viz British power) and that he, or rather his competitors and successors will be swallowed up completely. But perhaps he does see this and doesn't care so long as he himself has got out with his swag. Personally I wouldn't mind if every British businessman in India disappeared tomorrow."
Cited by B.R.Tomlinson, "The Political Economy of the Raj, 1914-1947", Surrey, 1979.p.52.

3. The Vice-Roy Lord Chelmsford to King George V:
"We are of course handicapped by our inability to procure machinery and by the necessity we are under of establishing industries which should have been set up in pre-War days. For this we have to thank the ill-judged parsimony and the now discarded laissez-faire policy of those days."
Cited Tomlinson, Ibid. p. 58

The first was that there was a much greater tendency now to use Indigenous financing, ie. Indian owned capital. Even the purely physical transfer of funds was a major problem in war time. This had an effect beyond the war years:

 "Although the flow resumed after the war it was much reduced, averaging about half the reverse flow of interest and dividends throughout the twenties. It dried up completely the following decade when a substantial volume of repatriated capitals Rs 2 crore a year perhaps, between 1931-2 and 1936-6."
M.Kidron, Ibid, p.10.

"A gradual acquisition of British shareholdings began before 1947 and accelerated during and after other world wars. With their London and Liverpool H.Q. unable to invest overseas, British agencies needed to mobilize local capital as an alternative means of financing war expansion in India and of continuing repatriations to Britain. Here Indian business houses exploited their opportunities. So massive was the influx of local capital by mid-1948, in fact that Indian houses held on average, more than 85% of the equity in colonial managing agencies with the remainder held by foreigners. Thus only one year after political independence the financial dependence of colonial British enterprises on Indian shareholders had become nearly complete."
D.J.Encarnation, "Dislodging the multi-nationals. India's comparative strategy in comparative perspective." Ithaca, 1989. p.57-8.

The net effects of the industrialisation can be gauged from the following data. Over the next few years a swing in the relative balances of Indian trade and British trade took place. In effect the swing was due to the increase in Indian import substitution. This significant step had its corresponding effects on British revenue statistics :

"Before 1914 India had played an important role in the international pattern of settlements providing a market for commodity exports and a source of invisible earnings that enabled Britain to meet a large proportion of her balance of payments deficit with the rest of the world, while herself enjoying a considerable visible surplus and non significant invisible deficit with other areas. Overall between 1900 and 1913 at least, India ran a small current balance of payments deficit (visible minus invisible) which was made good by the export of capital from Britain. The broad outline of India's pattern of settlements remained much the same in the 1920's but changed radically in the 1930's. Between 1921-2 and 1929-30 India had an overall current balance of payments deficit of Rs 224.35 crores, but from 1930-1 to 1938-9 she had a current surplus of Rs 7.32 crores. Her balance of commodity transactions surplus rose slightly during the later period, while her balance of service transactions deficit fell.. the value of India's commodity surplus in the 1930's was based on a fall in the value of her imports more than on a rise in the value of her exports (including treasure), while the amount of her invisible imports of freight and insurance charges and interest payments all declined significantly."
B.R.Tomlinson, Political Economy of the Raj. Ibid p.45. The net effect was a reversal of the balance of trade towards India's favour, and against Britain's :

"The decline in the value of India's imports especially affected goods sent from Britain; which was the main market for gold bullion, India's major export of the 1930's; although much of this was then re-exported either through private trade or official channels. In each year from 1919 to 1930 Britain had a visible surplus with India totalling PS 219.4 for the 12 years. In 1931 for the first time Britain imported more from India than she exported from her and between 931 to 1938 ran up a total commodity trade deficit of PS 79.5 million. This new development was the result of both of the decreasing importance of Britain as a market for Indian exports and the increasing importance of Britain as a market for Indian exports despite the British Government attempts, at the 1922 Imperial Economic Conference to increase the share of British goods in the imports of other imperial countries.."
Tomlinson, B.R. Ibid, p. 45

TABLE 1 :
PERCENT SHARE OF BRITISH GOODS IN INDIA'S IMPORTS (1913-1938)

                                                    1913-1914            19128-9             1938-9
_______________________________________________________________

Cotton Piece Goods                         94                     79                         32
Iron and Steel                                 78                      56                         50
Other metal manufacturers               46                     34                         34
Hardware and Cutlery                     56                     26                         29
Electrical machinery                        79                     66                         57
Rail locomotives& Carriages             95                    88                         61
Motor vehicles                                 66                    15                         30
Chemicals                                        75                     59                         57
______________________________________________________________
Source : Statistical Abstract for British India.
Cited By Tomlinson, Ibid, p. 42.
______________________________________________________________

TABLE 2.
INDIA'S INDUSTRIAL PROGRESS IN IMPORT-SUBSTITUTION (1919-1936)
______________________________________________________________

% INDIAN PRODUCED IN :         1919             1936
________________________________________________________________

Cotton Goods
whites                                                 57.6         85.3
Coloured                                            69.6         74.1
Sugar                                                 12.0         96.0
Steel                                                    14.0        70.0
Paper                                                  54.0        78.0
Cement                                                51.0       95.4
Tinplate                                               24.5       71.4
______________________________________________________________
Source : N.S.R.Sastry "A Statistical survey of India's Industrial development" Bombay 1947; Sir Harry Townsend "A History of Shaw Wallace &Co" Calcutta 1965; and W.A.Johnson The Steel Industry of India Cambridge, Mass 1966. Cited Tomlinson, Ibid, p. 32. ______________________________________________________________

TABLE 3. INDICES OF INDIAN INDUSTRIAL PRODUCTION 1925-1937.
(1925=100)
                                                1931                     1937
______________________________________________________________
Cotton                                     111                     152
Jute                                           81                     90
Sugar                                       128                     584
Iron and Steel                            84                     133
Paper                                       119                     168
Cement                                     121                    222
Coal                                           92                     103

These dramatic increases, are relevant to the Comintern debate on "Decolonisation" discussed below, in the second part. Much of this industrialisation was achieved by the mechanism of erecting of Tariffs, behind which industry could be developed. This is further discussed below.

In the years before World War I, the tendency of British Imperialism had been to see India only as a source of revenue by export access, and military support. In other words as purely a giant milk cow:

"In the years before 1914 India's Imperial commitment meant 3 things in practice: that India should be retained as a market for British exports, which meant that the Government of India should not impose insurmountable barriers, especially tariffs to the flow of British merchandise to India; that the Indian army be kept available for the Imperial cause; and that the Indian administration should ensure that repayment of interest on guaranteed debt bonds was made smoothly and that adequate revenue and remittance was available for the Home Charges. Each prong of its triple commitment cost the Government of India money. The requirements of British exporters obstructed attempts to impose revenue tariffs, the Home charges and debt repayments were always a strain on revenues..when the rupee exchange was low; the army.. was another drain."
p. 27, Tomlinson, Ibid.

"The success enjoyed by the Government of India in resisting attempts by London to restrict its fiscal autonomy can probably be explained by a shift which was taking place in the nature of British interest in India. R.K.Ray sees a transition from 'commercial' to 'financial' imperialism.. though British policy makers had not abandoned all hopes of restoring British commercial interests to their former position of dominance on the Indian market they were well aware that it was not an easy task. If British pressure groups interested in Indian trade, especially the Lancashire lobby (ie the Cotton interest-Ed) had by no means become negligible, they were not as crucial in an overall view of the British stakes in India as the financial interests of the City of London. Finance was closely linked to imperial strategic interests. Only a financially sound India enjoying the full confidence of British investors could fulfil the wider Imperial role which the British rulers still expected to play. By contrast, sectional commercial interest however powerful politically were (within certain limits of course) expendable."
Markovits, Ibid. 49.

"The interests of Lancashire were hardly synonymous with those of British capitalism as a whole; they contradicted for example, the interests of British manufacturers of textile machinery who relied on the Indian market as well as the interests of the British expatriates who had invested in the Bombay industry."
Tomlinson, Ibid. p. 15.

"Giving the Government of India (GOI) independence in tariff policy would remove this grievance and at the same time, prepare the way for a new system of Indian and Imperial tariffs that would strengthen the links between the imperial and the colonial economy. These plans attained formal expression in the 'Fiscal Autonomy Convention' of 1919."
Tomlinson, Ibid.p. 60

"During the war the GOI was more in favour of fiscal autonomy and of protective tariffs than of imperial preference, the Indian Fiscal Commission reported in 1922.. mapping out a policy of 'discriminating protection' for import substituting industries."
Tomlinson. Ibid. p. 60-61.

"The policy of discriminating protection provided some impetus towards import-substitution industrialisation and Central GOI's increasing reliance on customs revenue had a similar effect through raising the prices of imported goods.. By the early 1930's some protective tariffs had reached remarkable levels.. it is hardly surprising that imports of sugar mill machinery increased its real terms by 3000 per cent between 1928 and 1933. Other industries which .. became established in India as a direct result of changes in revenue and protective duties include paper, matches and rubber manufactures.. Government store purchases policy also stimulated import substitution in the 1920's-1930's. In 1924 the Secretary of State had surrendered control over this policy to the GOI; by the 1930's the bulk of stores were obtained by rupee tender in India rather than by sterling tender in London. This change was a blow to British exporters, and their position was not improved but a series of GOI decisions in the early 1930's to give encouragement to Indian manufacturers- stores purchases officers were instructed.. to give preference to the products of Indian manufacturers from Indian raw materials.. such purchases were vitally important for suppliers of railway equipment contracts for guaranteed purchases of steel rails and fishplates keeping the Tata Iron and Steel Co. going in the late 1920's and throughout the Depression. In 1931-2 8% of all railway stores and 12.5 % of such stores for state railways were brought in India, by 1938-9 these proportions had reached 28 and 46 % respectively."
Tomlinson, Ibid. p. 62-3.

"This explains that in the last months of 1931 the Government of India was able to wage a partly victorious war with Lancashire and London over its fiscal autonomy. The pretext of the war was Imperial Preference. It was an old slogan of ultra-imperialist circles but in the 1920's had met with little success. In India it had been specifically rejected.. and been introduced in 1927, so to speak through the back door, when the new Steel Protection Bill included for the first time a scheme of differential duties for British and non-British steels.. In 1931, the Government of India.. incensed Manchester.. by raising the Indian Tariff without increasing the preference for British textiles." Markovits, Ibid, p. 49-50.

"Manchester agitated so much that the Secretary of State for India Sir Samuel Hoare, openly threatened in a letter to the ViceRoy Lord Willingdon to throw India's cherished Fiscal Autonomy Convention to the winds, a move so rash that it would have jeopardised any chance of coming to an agreement with the Indian nationalists at time when negotiations were being held in London." Markovits, Ibid. p. 50

"In the face of such stiff resistance and also prompted by a general view of British interest in India by the end of 1931 the National government was eventually forced to accept 'that it could not interfere directly in the general tariff policy of the Government of India and that this method of maintaining a British commercial advantage was closed to it. Other methods, more indirect had to be tried. The Imperial Economic Conference.. at Ottawa in July 1932 had.. the avowed objective of building an Imperial free trade zone."
Markovits. Ibid. p. 50-1.

"Ottawa is without doubt a watershed in the history of Indo-British trade for it inaugurated a period of 15 years during which the trade between the 2 countries was subject to specific rules.. As far as protected industries were concerned the Tariff Board alone remained empowered to make recommendations to the government. There was no generalised scheme of Imperial preference but only specific preferences given to specific Empire products."
Markovits, Ibid. p.51-2.

"In Ottawa British statesmen pursued 2 objectives, At the most general they sought to stimulate Empire trade and more specifically to encourage a surplus of imports from the Empire into Britain. As B.Chatterji comments:
'Such imports would adversely affect the balance of British's commodity trade, yet they would strengthen the sterling balance held in Britain by the Empire countries and make it easier for their governments to meet their sterling obligations without recourse to new loans.. the second objective was to placate the Lancashire lobby-and prevent it from helping Churchill and the die hard Conservatives in their attempt to wreck any constitutional settlement of the India crisis, by bringing India more definitely into the orbit of imperial trade as Hoare wrote to Willingdon."
Markovits, p.51

"Yet what is more striking is the conservatism of expatriate houses. Very few established agency houses made any attempt to expand their operations into the 'new' industries being developed in the 1930's, and those that did acted only in collaboration with British based corporations. In the main it was the Indian entrepreneur who moved into those fields - particularly cement, sugar, and paper but also into chemicals paints and electrical goods."
B.R.Tomlinson, Ibid. p.52.

"Thanks to the increased integration of financial institutions that took place after the Great Depression, the large Indian corporations that developed in the 1930's were very similar in structure to the expatriate enterprises they were rivalling and supplanting. Many Indian business and industrial houses now had wide interested and owned banks and insurance and investment companies to help with finance, trading and industrial activities."
B.R.Tomlinson, Ibid. p.52

"Indian groups were expanding faster than their expatriate rivals. In 1931, five of the top 20 industrial groups at work were Indian, in 1939 the figure had increased to 6 while Tata's remained far and away the largest concern through the decade. In 1930-1, 46% of the paid up capital of rupee companies was in Indian controlled concerns (those run by Indian managing agent or by groups with a majority of Indian directors); by 1938-9 this figure had reached 55%."
B.R.Tomlinson, Ibid, p.52.

"Even outside Bombay expatriate firms came to rely increasingly on Indian investors for share capital in this period. From the First World War onwards British controlled forms starved of capital from London, were forming alliances with Indian businessmen. During the war, Sir Rajendra Mookerjee of Calcutta bought his way into Martin Burn, one of the 3 largest expatriate managing agency houses in India. By 1922 majority ownership (although not control) of the Bengal jute industry had passed into Indian hands. In the 1930's it had become common for expatriate firms to have at last a minority of Indian directors on their company boards.. the traditional boundaries between Indian and expatriate capital were becoming blurred. As the Associated Chamber of Commerce reported to the Indian Statutory Commission in 1927:
"It is almost impossible to draw any line of demarcation between Indian and British interests in regard to invested capital, for companies floated and managed by British managing agents were frequently owned to a very large extent by Indians. Similarly, in many companies regarded as Indian, a considerable number of shareholder may be British."
Cited Tomlinson, Ibid p.53-4.

"Changes in the working relationship between Indian and British capitalists were complex. Outside Calcutta and especially in Bombay, there had always been a measure of co-operation between expatriate and indigenous entrepreneurs. By the 1920's many sectors of the expatriate business community were beginning to realise that under certain conditions they could have more in common with their Indian counterparts than they had with the British bureaucracy in the Government of India. Thus the British millowners in Bombay joined with their Indian colleagues in pressing for a lower ratio for the rupee in the mid-1920's, while most expatriate businessmen including the Managing Governors of the Imperial Bank advocated devaluation in the early 1930's." B.R.Tomlinson, Ibid. p. 53.

"While expatriate businessmen were prepared to co-operate with Indians to their mutual advantage, they were much less willing to share the sort of control secured by the managing agency system. Several of the old established agency houses acquired an Indian partner or associate in the 1920's or 1930's, but none has an equality or majority of Indian participation (except, perhaps, Martin Burn). The only example of a new major industrial corporation based on a significant measure of joint control was the Associated Cement Company, founded in 1936.. Indian firms owned 70% of the total shares; the board of directors was made up of nominees of the shareholders in proportion to their holdings.. the British companies investing in subsidiary manufacturing firms in India also seem to have had little interest in attracting Indian capital or initiating joint control. The only major subsidiary in which there was a significant Indian participation was the Asbestos Cement Company, which was 87% owned by Turner Newall and 13% by Associated Cement."
B.R.Tomlinson Ibid, p.55

"Yet the conversion of equity ownership into managerial control was not immediate, as British managers used several complex methods to ensure continued operational control. Early on the intermingling of Indian and British capital often resembled a simple form of partnership. In such an arrangement, Tata became associated with Macneil and Barry; Bangur with Bird and Gillanders Arbuthonot; Mookerjee and Bannerjee with Martin Burn. But eventually the potent insistence of Indian shareholders that ownership in British agencies be converted into control could not be denied. During the 1950's Indian managed business houses began to replace British firms as the dominant enterprises in the economy. And by 1957, the process of takeover through encroachment had run its course. Already, some of these takeover campaigns had proved both enormous in scope and disastrous for British agencies. Dalma-Jain shortly after Independence became one of the top 4 Indian owned Business houses by means of such whole sale take over. And Bangur ranked among the ten largest houses throughout the 1960's and 1970's emerged from relative obscurity a the end of WWII simply by gobbling up several small British agencies. Overall this growth through mergers and acquisitions established the early preeminence of Indian industrial conglomerates." D.J.Encarnation.p.58 Dislodging Multi Nationals - India's strategy in comparative perspective. Ithaca, New York, 1989.

"In 1931.. the joint stock companies.. with paid up share capital of Rs 3 million and more, shows that 81 groups, of which 51 were British.. and 30 were Indian controlled 950 companies (13% of the total number of registered joint stock companies in British controlled Indian and in the major Indian States) with a total of over Rs 166 crores (almost 60% of the total paid up capital of the registered joint-stock companies). Out of these 166 crores, 113 were invested in companies controlled mainly by British groups (although many of their shareholders were Indian) and 53 in companies controlled by Indian groups (of which 26 crores in companies controlled by Tata group the biggest capitalist in India)."
Markovits, Ibid p.14-15

"In cotton textiles 10 groups (of which 6 were Indian,one Jewish and 3 British) controlled 31.6% of the paid up capital in the industry, 29.1% of spindles and 29.5% of looms, accounted for 30.7% of raw cotton consumption and employed 30.1% of labour. Other branches had a more clearly oligopolistic structure. In jute 4 or 5 groups all British had a dominant position, the upper industry was dominated by 2 British firms, in cement 5 groups (3 Indian and 2 British) controlled the entire output. In the steel industry there was outright monopoly - of TISCO.. therefore it appears that the corporate sector.. and the large scale industrial sector.. was largely dominated by a few big firms still mainly British but also increasingly Indian."
Markovits, Ibid, p.15.

"The years from 1919 to 1939 saw rather the slow decline of expatriate enterprise, a failing by and large to adapt.. to new opportunities, or to meet the challenge of the rising Indian groups on the one hand and of the new subsidiary manufacturing companies on the other hand.. By 1939, the tie between British entrepreneurial and administrative interests had weakened considerably, at least for the expanding sectors of British enterprise in India which required Government to develop the Indian economy in ways that no colonial administration dare risk.. By 1939, the Indian economy was a good deal less complementary to the British one than.. in 1913, for the destructive impact of the decline of world demand for Indian produce."
B.R.Tomlinson, Ibid, p.55-6.

3. Indian capital had moved from its' mercantile phase to an industrial phase.
 
4. This shift had first been made by that section of capital that had been closest to British interests, characterised by the Marwari-Gujerati clique.
 
5. Consistent with this, for the most part the strongest sections of Indian capitalists still had major links with British capital.
 
6. Nonetheless, this section itself had been growing in strength and adventurousness. They were developing themselves into new areas not previously undertaken by British capital. They were beginning to chafe at the restrictions. Moreover another sector had long been separate from British capital and was even more restless. It was becoming possible for it to see its' "own way". Some of this section overtly challenged British imperialism, such as the Birlas.
 
7. The British state was facing political problems in direct and overt control of India. A more palatable control was offered by a "Pseudo-Independence".
 
8. Despite the chafing of the Indian bourgeoisie at British control, they were fearful of the Indian proletariat and the mass movements that had been put into play. Their fears could be played on by British imperialism.
 
9. Because the battle between the Financiers and the older branches of Industrialists in the Home Country was intensifying, an objective reason to industrialise India had arisen. Thus in a hesitant, self-doubting manner the British had begun the increasingly rapid process of industrialising India.

In conclusion, by 1947 this whole process had resulted in a change in ownership, but not necessarily of control of the bulk of industry and trading : 

"By the 1920's majority ownership, as distinct from control of the largest organised industry, in jute had passed into Indian hands.. by 1950 it was 3/4 Indian (although still foreign controlled). Indian ownership in the coal industry was unofficially estimated at 78% in 1949 and officially at 85% six years later.. Tea was an exception until the Second World War when a large switch.. reduced the foreign share to 3/5 of the total investment.. The results are clear. By mid-1948, foreign managing agencies held on average under 15% of the paid up capital of their managed companies. A fraction of the rest was held directly abroad. But the bulk - 85% was owned by Indians. The methods of control were naturally complex, involving holding companies, interlocking ownership and direction.. They were largely effective until well into the period of Independence."
Michael Kidron Ibid. p. 10-11.

By comparing the situation graphically depicted by Kidron and Tomlinson, ("Pre-Independence") to a later time period (Well past "Independence"), we can ask if the objective reality of the Indian industrialist has changed? Of course, the recent switch towards a pro-USA position of the current Rao Government mandates that this analysis be before Rao's administration took power.
 
Has there in fact been a change in the Independence of the Indian industrialist ?

1. Over the years 1965 to 1985, the amount of monies entering India from Direct Foreign Investment (DFI) were considerably less than in previous years. In fact there was a net efflux of monies. This is a highly significant change in the direction of cash flow. (From D.J.Encarnation. "Dislodging the Multi-nationals. India's Strategy in comparative perspective." Ithaca, New York, 1989. p.11.)
 
2. Some authorities would point out that there has been an increase in the amount gross of monies owing by the Indian state to Western Aid agencies and multi-nationals. But it is also the case that as a percentage of the overall assets owned by State and private enterprises, there has been a diminution over the years 1962-1982. See Below, figure 1. (Encarnation Ibid.p.35).
 
3. In keeping with this are figures that show a growth of Indian state owned investments over the years 1951-80. These show an increase in State holdings of major proportions as compared to all private sectors; including private corporation and private non-corporation. See figure 2 below (Encarnation, Ibid, p.38) and figure 3, below (Encarnation, Ibid, p.92).
 
4. The means of achieving this was a very conscious policy of Governmental restrictions on the inflow of foreign funds and investment. Those foreign funds actually allowed in were specifically earmarked for the definite purpose of acquisition of new technology:

"For India independence from foreign financing became a fact of life between the amendment of FERA (1973) and the next relaxation of government restrictions on foreign investment (1980). To illustrate, let us consider chemicals. Between 1974 and 1980, as we see from figure 4,(fig 2-11 in Encarnation) foreign financial tie-ups declined for Indian business houses from 2/3 of all collaboration agreements in 1974 to 2/5ths in 1980. Among large houses, Only Birla actually increased its' reliance on foreign financing always coupled with technology. Conversely houses like Tata and Sarbhai, long known for their proclivity to seek out foreign financing; by 1980 evinced no such preference.. in 1980 Indian business houses and other local enterprises already had established their financial independence from foreign enterprises." D.J.Encarnation. Ibid. p.63-4.

THIS ALL SUGGESTS THAT THERE WERE GENUINE ATTEMPTS BEING MADE TO RESTRICT THE PLAY OF FOREIGN CAPITALS IN INDIA BY THE INDIAN NATIONAL CONGRESS, AFTER "INDEPENDENCE".
 
IN THE BOMBAY PLAN, the leading sections of business and their political representatives would try to "Plan" out the future of India, after the British had "transferred" power. In this prototype for a capitalist India, both the 2 leading industrialists of India - G.D.Birla and J.R.D.Tata - argued for a restriction of foreign technical dependency:

"By ultimately reducing our dependency on foreign countries for the plant and equipment required by us.. the country would require little foreign debt and even less foreign equity " - all the better since:
"political.. interference from foreign vested interests"
inevitably accompanied industrial investments by multinationals. According to these industrialists, domestic production after independence should be geared to meet:
"the internal demand which we advocate in this Plan.. Thus exports were likely to diminish in the future."
Cited Encarnation, Ibid, p. 28-9.

"Already a powerful coalition had formed, as prominent industrialists joined political leaders in openly advocating a reduced reliance on foreign finance , technology, and markets."
Cited by Encarnation Ibid, p.28-9.

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