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'Socialism helped economic growth'

Industrialist Swraj Paul, an advocate of economic reforms, says the socialist policies of late PM Indira Gandhi helped India become a "free nation" in the true sense.

india Updated: Mar 13, 2008 17:18 IST

Industrialist Swraj Paul, an advocate of economic reforms, has said that but for the socialist policies of late premier Indira Gandhi, India would have not have been a "free nation".

"We had to do it. If we had not done it I don't think we would have been a free nation at the time. We would have been far too dependent," Paul, who heads the Caparo Group of industries, said on Wednesday.

Paul was delivering an address on Indira Gandhi, his lifelong friend.

The steel-maker recalled how Jawaharlal Nehru felt slighted by General Motors during a visit to the US. Nehru, who was seeking a joint venture, was told: "Your entire year's requirement of motorcars is less than what we need in one day in the US," Paul said.

He said it was Indira Gandhi who gave India "nationhood".

"She was very conscious that the West did not want to accept a strong India. That was her biggest battle. It wasn't socialism that failed India - rather it was the connivance of people who wanted to keep the country's economy for themselves," Paul said in his address delivered at the Nehru Centre in London.

Paul also pointed out that the economic reforms that heralded the current economic boom in India resulted from a financial crisis and subsequent International Monetary Fund (IMF) pressure rather than a carefully thought out policy.

"Actually, the real credit for the reforms goes to the NRIs. But for the IT industry in Silicon Valley (in the US), there wouldn't have been the confidence in India to introduce the reforms," Paul said.

"India gained from socialist policies. But it created its own abuse - it created corruption," he added.