The below mentioned article provides an overview on Gandhian Economics:- 1. Introduction to Gandhian Economics 2. Influences on Gandhi 3. Three Phases 4. Assessment 5. Influence on Indian Thinkers.

Introduction to Gandhian Economics:

The economic ideas of Gandhi and his followers may collectively be called Gandhian Economics. Gandhi himself was not a professional economist. He was a great political and spiritual leader. But consistent with his philosophy of truth and non-violence, he gave a set of economic ideas which are sharp in contrast against the traditional economics of the west.

Gandhi’s ideas have considerable influence on Indian thought and policy. Further, some of his followers, normally J.C. Kumarappa have attempted in recent years to refine and restate Gandhian economics as a counter theory to western economics and it is claimed to be more suitable for building up a more peaceful and stable future.

Mahatma Gandhi, The Father of the Nation was born in Porbander on October2,1869. He came from a well-to-do family and had his early education in London. He settled down as a lawyer in South Africa, where he took part in a political movement against racial discrimination. He had been deeply influenced by Christianity and the ideas of Tolstoy, Ruskin and Thoreau.


So he devised the technique of non-violence as an active method of political agitation. Coming to India in 1906, Gandhi assumed political leadership of the country. At the same time, he developed his economic ideas as well. Gandhi continued to be the virtual guide and the inspiration of the Indian National Congress and the political movement in India up to his death.

Influences on Gandhi:

In his economic thought, Gandhi was greatly influenced by Ruskin’s Unto This Last. From this book he learnt a) that the good of the individual is contained in the good of all; b) that a lawyer’s work has the same value as the barber’s in as much as all have the same right of earning their livelihood from their work, and that a life of labour, i.e., the life of the tiller of the soil and the handicraftsman is the life worth-living.

Further Gandhi was inspired by the idea of Thoreau, Tolstoy and Kropotkin. Tolstoy’s principles of simplicity, asceticism and equalitarianism became a part of Gandhi’s philosophy. Besides Indian scriptures, Gita and Upanishads and Indian saints Kabir, Mira, Nanak also left a deep impression on Gandhi’s mind.

Three Phases of Gandhi’s Economic Thought:

The economic ideas of Gandhiji developed in three phases:


(a) The negative phase (Upto 1919):

The negative phase up to 1919 during which he criticised the western pattern of economic development and adopted a non-materialistic attitude which is embodied in his book Hind Swaraj (1909).

(b) The positive phase (1919-1934):

During this phase, he presented an alternative to the western civilisation in the ideal of Swadeshi.


(c) The constructive phase (1934-1948):

In this phase, Gandhi became more practical. He gave a constructive programme for village regeneration and put forward the ideal of Sarvodaya.

Assessment of Gandhian Economics:

Gandhian economics is very different from traditional economics, as it has no clear cut theory. Gandhi himself never studied any economics. He was unfamiliar with the thought of Keynes or Marshall. He read Marx as late as 1942 during detention and his impression was that if he had to write “The Capital”, he would probably do it in a much more simplified manner.

It is natural that the traditional economists do not find Gandhian ideas scientific. Moreover, there are numerous contradictions in his thought which were brought about due to the evolution of his ideas as his personality matured. For instance, his extreme apathy to machinery, as evident in “Hind Swaraj”, was considerably softened in his later years.

In assessing Gandhian thought, it all depends upon whether one agrees with the Gandhian postulates or not. If the critic agrees with simplicity, non-violence, decentralisation and ethical and moral considerations which form the basis of the Gandhian ideas, he would probably find that entire system of Gandhian thought is very logical.

Otherwise, the traditional economist will find that Gandhian thought is extremely lacking in coherence on such modern issues as public finance, the problems of defence and international trade, monetary management and economic planning. In Gandhi’s economics, there is a fundamental postulate that all countries would be organised on the non-violent pattern. Whether such a situation is practicable or not, is quite a different matter.

The relationship between Gandhism and Socialism is interesting. Gandhi himself declared that he was a socialist and his ideal of Sarvodaya was the traditional Indian Socialism. But technically, Gandhi is not a socialist. He would uphold private ownership of property by asking the capitalists to become the trustees of public property. At best, he asked them to be enlightened capitalists and uphold the welfare of the workers at all costs.

From the Marxist point of view, Gandhian economics is reactionary in its outlook. Gandhi refused to recognise class-struggle and the fact that history had developed from one stage to another and, as such, must pass on to the higher stage of Socialism from the present state of Capitalism. Like Sismondi Gandhi’s solution of the problem of capitalist society consists in suspending material progress and technical inventions and to go back to a decentralized and simple system of economic organisation. The Marxist charge is that Gandhi was trying to put the clock back and as such was unconsciously extending capitalist and feudal interest. The most outspoken critiques of Gandhian economics have come from the Indian Marxists.

Many socialist thinkers, specially J. B. Kripalani, Jai Prakash Narain and Ram Manohar Lohia have accepted Gandhian ‘Sarvodaya’ as the ideal of Indian Socialism. They hold that Praja Socialism is Socialism plus Gandhism and believe that Marxism was suitable to the Western industrial nations and as such is inapplicable to Indian conditions.


The Indian variety of socialism suitable to a poor and agricultural country must necessarily follow the non-violent and decentralized pattern of the Gandhian ‘Sarvodaya’. A comprehensive theory of Praja Socialism has yet to be worked out, but these have been advanced by some Praja Socialist leaders in recent articles and speeches.

Yet another controversy that has sprung up recently, is due to the ideas of J. C. Kumarappa and Sunderlal, themselves veteran Gandhities. They hold that the points of difference between Marxism and Gandhism are very few. Gandhism is Marxism minus violence. They assert that the Gandhian principles of simplicity, non-violence and decentralisation of power are actively pursued in post- Revolution China, which is evidently being built up on the basis of the Marxian philosophy of the Chinese Communist Party.

Influence of Gandhian Economics on Indian Thinkers:

The influence of Gandhian economic ideas on Indian thinkers has not been very fundamental. Gandhi was universally accepted as a great political leader and the Father of the Nation. But many of his immediate followers did not see eye to eye with his economic views. Probably, the only organised attempt to put Gandhian ideas into practice is due to the various organisations started by Gandhi himself, the All India Charkha Sangh, the Go-Seva Sangh, the All-India Spinners Association and the All-India Village Industries Association. Recently Vinoba Bhave and many Socialist leaders, like Jai Prakash Narain, have taken active interest in the Bhoodan Yagya Movement, which aims at the redistribution of land on Gandhian lines.

The influence of Gandhi’s economic ideas on Government policy has been very little. The Planning Commission has talked about moral values, non-violence and decentralisation as desirable characteristics of a national economic policy of India, but the Five Year Plan in itself is hardly Gandhian in outlook.


In fact, staunch Gandhites, like Kumarappa and Sunderlal, were sharply critical of the Government policy of reconstructing villages with foreign aid, as was being done under the Community Development Programmes. Recent attempts by the Government to revitalise handloom and Khadhi industry are not in the nature of the application of Gandhian theory to economic policy. They are obviously directed by the political necessity of fighting unemployment which looms large on the Indian horizon.

So far as traditional economists are concerned, they have accepted two ideas from Gandhian thought:

(1) The importance of cottage industries in our rural economy and

(2) The necessity of decentralisation of the economic structure. Most economists also agree with the Gandhian contention that the village improvement and rehabilitation of agriculture must be the first step towards any economic improvement in this country.