Citizens not Permitted to Engage in a Business of their Choice
On 10 May 1951, Nehru brought to our provisional Parliament[i] the first Constitutional Amendment Bill to amend Article 19 of our Constitution. His aim was to limit our freedom to trade with each other. This amendment not only empowered the government to enter into any business it wished, but enabled it to prevent citizens from undertaking such a business. There may be a justification to exercise oversight over specific businesses, e.g. when citizens set up their nuclear plants and arms factories,[ii] but this amendment was not introduced for such oversight. It was intended to push aside citizens to allow the government to operate ordinary businesses such as making bread, or running bus services.[iii]
It appears that catching thieves and ensuring the rule of law was not challenging enough for Nehru’s government – maybe it was too hard and not exciting enough. Socialist governments always fail on fundamentals such as law and order, anyway; they prefer to drive around in buses, picking up people from bus stops, tootling away at their horn. And so Nehru told the Parliament:
The citizen’s right to practise any profession or to carry on any occupation, trade or business conferred [...] is subject to reasonable restrictions. While the words [...] are comprehensive enough to cover any scheme of nationalisation which the State may undertake, it is desirable to place the matter beyond doubt by a clarificatory addition to article 19(6)[iv] (italics mine).
The amended Article 19(6) now reads as follows:
[…] nothing [...] shall affect the operation of any existing law in so far as it relates to, or prevent the State from making any law relating to [...] (ii) the carrying on by the State, or by a corporation owned or controlled by the State, of any trade, business, industry or service, whether to the exclusion, complete or partial, of citizens or otherwise.
That the freedom of citizens to set up a business and engage in a legal trade, and thus earn their livelihood, is a basic freedom that a government must always defend, was lost on Nehru. He was engrossed in taking us to his Heaven of Equality, a strange Heaven in which government officials would drive buses and bake bread instead of providing us with security. And with this Amendment, our legal freedom to engage in a legal trade, business, industry or service of our choice came to an end. Not only would the state henceforth produce shirts and bread, instead of producing justice and security, it would also regularly oust us from such businesses. It was through such frontal assaults on the relatively liberal 1950 Constitution that Nehru and his successors laid the foundations of misgoverned India.
We also observe with a sense of astonishment how state-created monopolies were deemed not to deprive us of freedom, but at the same time a great deal of fuss was made about some smallish businesses that India had managed to grow indigenously in its private sector during British rule, such as the Tatas and Birlas. These were extremely small in comparison with American and European companies, but were labelled as monopolies under the MRTP Act of 1969. The government then sat, open-handed (as opposed to even-handed), soliciting bribes in return for sheltering such companies from competition through the license raj, accentuating whatever little monopolistic powers these companies may have had.
[This was an extract from my book, Breaking Free of Nehru]
[i] The Constituent Assembly had become the provisional Parliament until the General Elections of 1951–2, leading to the first Parliament of April 1952.
[ii] Nuclear plants and arms factories are perfectly capable of being run as private businesses, e.g. as in the USA.
[iii] This amendment was motivated by Nehru’s desire that government should exclusively operate a bus business in UP.
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