According to top brass of the State Bank of India, May 15 was a red letter day for the bank and the country. Full front-page ads splashed in the Times of India and several other dailies informed the long-suffering public of the silver jubilee (25th anniversary) of SBI credit cards. For your editor, it was a day of heart-burn, if not lamentation, because it raised the question why retail credit made its debut in India half a century after credit cards had become commonplace in the US and other Western countries.
Today there is a blanket of silence over precisely who were the economists who advised the (Congress) governments of the time to proscribe retail credit. Several histories of independent India have been written, but their acclaimed authors are silent on this issue.
Your editor’s explanation of this mass deprivation is that under the Soviet inspired socialist development model, citizens’ savings were siphoned away for investment in capital-intensive public sector enterprises (PSEs) which were expected to generate vast profits that would build millions of affordable homes, public schools and consumer durables. Yet these grand schemes went bust when business-illiterate bureaucrats, appointed to run PSEs, could never generate the “surpluses” (profit was a bad word) envisaged by 13 grand Five-Year Plans. As a result, the modest material aspirations of an entire generation of Midnight’s Children were reduced to dust. Only in 1991 since the Industrial Development Regulation Act, 1951, which strangled private enterprise, was scrapped by Prime Minister Narasimha Rao, has retail credit become available to citizens.
Yet the learned economists and Central planners who denied ordinary retail credit to a whole generation have never been called to account. Indeed, most of them have gone on to greater glory.
