"The repudiation of the so-called Public Debt of lndia incurred by the foreign Government’ is too vague and too sweeping a statement in the programme of a progressive and enlightened party. The Congress has suggested the only real and statesmanlike proposition, namely, reference to an impartial tribunal of the whole of the so-called Public Debt before any part can be taken over by the future free Government of India."

This was the statement that Gandhi made in response to a pamphlet circulated by the Socialist Party of India in 1939. Honesty demands that real debt be paid. Gandhiji used the term “so-called” public debt and the Congress suggested an impartial tribunal to assess the real extent of debt. By doing so, the Congress had, on behalf of a future government of India, given its moral pledge to pay off the public debt. Gandhiji suggested to his socialist friends that they must honour the promises made by the predecessors. Gandhiji welcomed new ideas but advised them to learn from the old as well.

Continuing his response to the note, the next point that he made concerned Marxist ideology and its language. Gandhiji said, “The progressive nationalization of all the instruments of production, distribution and exchange’ is too sweeping to be admissible.” The example cited by Gandhiji is beyond the comprehension of those who cannot think outside the realm of the economy. The socialists must have found it strange and are likely to have cited it as an example of Gandhijis idiosyncratic ways. Gandhiji wrote: “Rabindranath Tagore is an instrument of marvellous production. I do not know that he will submit to be nationalized.”

The example was outside strict economics. However, not many years later, we would see how the socialist state apparatus of Soviet Union was used to curb the freedom of literature and artists and sought to regulate their “production’’.This shows that Gandhiji s analogy was not out of place. Masani’s pamphlet also demanded cancellation of debts owed by peasants and workers. Gandhiji objected to this as well:

"Cancellation of debts owing by peasants and workers’ is a proposition which the debtors themselves would never subscribe to, for that will be suicidal. What is necessary is an examination of the debts some of which, I know, will not bear scrutiny."

In these views, Gandhi held similar views to BR Ambedkar, who also spoke out against the British Raj's mismanagement of Indian finances. Nehru drew upon the work of both Babasahib and the Mahatma in creating his first five-year plan, in which he worked to eliminate public debt accumulated during World War 2 under British rule.

Gandhiji had vast experience of the Indian peasantry and knew that they were not so shameless as to not own up to genuine debts. He also knew that if these real debts were cancelled along with the fake ones, the peasants would have difficulty securing debts in the future; this would be suicidal for them. Gandhiji was sensitive to the injustice that the socialist group wished to point out and, hence, he also said that some debts would not bear scrutiny.

Next, Gandhiji raised an issue that bore the mark of his own economic thinking, something that would probably not have occurred to the progressive socialists. Gandhiji s concern was that the people should not become dependent and feeble: "I should educate the masses to cultivate habits of thrift. 1 should not be guilty of maiming them by letting them think that they have no obligation in the way of taking preventive measures in the matter of old age, sickness, accident and the like." 

His view on strikes was radical even for the socialists: "I do not understand the meaning of the phrase ‘the right to strike.’ It belongs to everybody who wants to take the risks attendant upon strikes." 

Gandhiji asked Masani a question: “Does ‘the right of the child to care and maintenance by the State’ absolve the parent from the duty of caring for the maintenance of his children?” The Kibbutz in Israel did experiment with making the community responsible for child-rearing but their experience taught them that while the community may take economic responsibility, cultural and social responsibilities have to be borne by the parents.

The pamphlet demanded the elimination of landlordism. Gandhiji saw in this the intent to take over zamindari and talukdari lands. He was never in favour of doing away with zamindars and the zamindari system; he suggested merely the regulation of the relations between the landlords and tenants in order to promote harmonious relations between them.The socialists would have found this utterly reactionary. This was also quite contrary to the views of Ambedkar, who was quite definite in wanting to eliminate the entire structure of Hindu society, seeing that as the only possibility to destroy untouchability.