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Abstract Gandhi wanted the Indian economy to center around autonomous village republics rather than work on the back of large-scale industries or consumption expenditure. Gandhi’s principles for formulating his economic thoughts were based on a call to ‘return to the nature’. He would have liked people to reduce their wants in lives and to concentrate instead on development of their faculties for achievement of spiritual goals. This would not require people in villages to madly rush to cities in search of work. All people would live more fulfilling and meaningful lives. He would justify use of machines and industrial production systems in the economy only when the outcomes serviced the fundamental and most basic needs of people. This paper describes Gandhi’s economic principles in order to analyze how they contrast with the free operation of the market today which has created multiple new inequalities in society. The liberalized rapid economic growth model in India has made development of the rural sector secondary to rapid growths in trade and manufactures of consumer commodities in the urban centers. This has gone the opposite way from the paths Gandhi outlined for his country, and it has exacerbated the same societal inequalities he wanted to see reduced.

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