"POLITICS OF PLANNED DEVELOPMENT"
Introduction:
After India's independence, the country faced the critical challenge of economic development, in addition to nation-building and establishing democracy. Leaders chose a path that was both different and difficult. Success in economic development was more limited because the challenge was tougher and more enduring compared to nation-building and democracy.
The chapter examines the political choices and debates surrounding economic development in India, including:
Key debates about development strategies.
The strategies adopted in the early decades and why.
Achievements and limitations of these strategies.
Why certain development strategies were abandoned later.
Key Questions on Development:
The chapter delves into various political choices that India faced regarding economic development:
What kind of development model should India follow?
Should India adopt a capitalist model like the US or a socialist one like the USSR?
Should the government control industries, or should private enterprises drive development?
Diverse Views on Development:
In India, various groups had different ideas about what development should mean:
Industrialists looked forward to setting up steel plants and saw industrial growth as the key to development.
Adivasis and local populations feared displacement and loss of livelihood due to the establishment of industries.
Environmentalists worried about pollution and the environmental impact of industrialization.
The central government wanted to attract investment, fearing that denying industries would hurt India's investment prospects.
Thus, development meant different things to different sections of society, making it a politically contested issue.
Planning and the Role of the Government:
There was a consensus that economic development could not be left to private actors alone, and that the government needed to plan and play a key role. The Planning Commission, set up in 1950, was central to this task. It was responsible for drafting Five-Year Plans (FYPs) and advising the government on economic strategy.
The First Five-Year Plan (1951-1956) focused on addressing the agrarian sector, investing in large-scale irrigation projects, and ensuring agricultural growth. The Second Five-Year Plan (1956-1961) shifted focus toward heavy industries and rapid industrialization. This plan was influenced by socialist ideas, with the government playing a strong role in building industries.
Early Initiatives and the First Five-Year Plan:
The First Five-Year Plan aimed to break the cycle of poverty and focused on agriculture, which was severely affected by partition. Large projects like the Bhakra Nangal Dam were central to this plan. The idea was to slowly build the country's economic base without disrupting the democratic structure.
Second Five-Year Plan:
The Second Plan, led by economist P.C. Mahalanobis, emphasized rapid industrialization, with a special focus on heavy industries like steel, railways, and machinery. The government aimed for a socialist pattern of society, imposing tariffs on imports to protect domestic industries and focusing on building industries in the public sector.
While the second plan marked a shift toward industrialization, it also had its share of challenges:
India was technologically backward and needed to import technology, which required valuable foreign exchange.
Industrial investment took priority over agriculture, raising fears of food shortages and rural distress.
Critics pointed out an "urban bias" in the plan, with heavy industries receiving more attention than agriculture-related industries.
Political Debates and Contestations:
There were ongoing debates within the Congress party and among political leaders on the approach to development:
Some advocated for industrialization, while others prioritized agricultural growth and rural development.
Left-wing groups wanted more state control and regulation, while right-wing groups preferred free-market policies.
The chapter emphasizes that these debates over development models were not just technical or economic; they had profound political consequences. They involved trade-offs between economic growth and social justice, and between industrialization and rural development.
Conclusion:
India's early development plans set the foundation for its future economic growth but also faced several limitations and challenges. The political contestations around development strategies—whether to prioritize industry or agriculture, how much state intervention was necessary, and how to balance economic growth with social justice—have remained central to India's economic policy debates.
The chapter highlights that India's development path was shaped by a mix of economic strategies influenced by both socialist and capitalist models, with the government playing a central role in shaping the country's economy through planned development.
