Politics of Planned Development
Introduction
At independence, India faced a fundamental question: what KIND of economy should it build? The answer was PLANNED DEVELOPMENT — a mixed economy with the state leading the 'commanding heights.' The Planning Commission (established 1950) and Five Year Plans became the central instruments. But there was DEBATE: Nehru's vision of state-led industrialisation vs. the Gandhian vision of village-centred development. This chapter examines the POLITICS of India's economic choices.
1. The Idea of Planning
The idea of economic planning was not invented in 1947. The Indian National Congress had discussed planning since the 1930s. Subhas Chandra Bose had set up a National Planning Committee (1938) — chaired by Nehru. In 1944, leading industrialists published the 'BOMBAY PLAN' — arguing for a substantial state role in industrialisation. Planning was seen as the RATIONAL way to develop — avoiding the 'anarchy' of the market while building a modern industrial economy.
2. The Planning Commission and Five Year Plans
The Planning Commission was established in March 1950 (not by the Constitution, but by a Cabinet resolution). The Prime Minister was its Chairman. It was an EXTRA-CONSTITUTIONAL body — immensely powerful but not directly accountable to Parliament.
| Plan | Period | Focus |
|---|---|---|
| First Plan | 1951-56 | Agriculture, irrigation, community development |
| Second Plan | 1956-61 | HEAVY INDUSTRY (Nehru-Mahalanobis model). Steel plants, dams, machine-building. 'The temples of modern India.' |
The Second Plan (1956-61) was the DEFINING plan — based on the Nehru-Mahalanobis model, which prioritised HEAVY INDUSTRY and CAPITAL GOODS over agriculture and consumer goods. The idea: build the capacity to MAKE machines, and everything else would follow.
3. The Debate — Nehru vs. the Gandhians
| Nehru's Vision | Gandhian Alternative |
|---|---|
| State-led HEAVY INDUSTRIALISATION | Village-centred development. Small-scale, labour-intensive industry. |
| Large dams, steel plants, machines — 'temples of modern India' | 'India lives in its villages.' Development must START there. |
| Science, technology, modernity | Self-sufficient village communities. Gram Swaraj. |
| Planning Commission. Centralised. | Decentralised planning. Panchayats. |
Nehru's vision PREVAILED. The Gandhian alternative was MARGINALISED — but never entirely disappeared. 'The debate between industrialisation and village-centred development continues to echo in Indian politics — from the Green Revolution to NREGA to the current debates about farmer incomes.'
4. The Mixed Economy
India chose a MIXED ECONOMY — both state and private sector would coexist, but the state would control the 'commanding heights':
| Sector | Role |
|---|---|
| Public Sector | EXCLUSIVE control over strategic industries (arms, atomic energy, railways, steel, heavy electricals). State-owned enterprises (SAIL, BHEL, ONGC). |
| Private Sector | Allowed to operate — BUT subject to LICENCES, quotas, and regulations. The 'Licence Raj.' |
5. Assessment — Achievements and Failures
| Achievement | Failure |
|---|---|
| Diverse INDUSTRIAL BASE built. India could produce steel, machines, chemicals. | SLOW GROWTH — 'Hindu rate of growth' ~3.5%. East Asian economies grew at 8-10%. |
| Food self-sufficiency through the Green Revolution. | PUBLIC SECTOR inefficient — overstaffed, loss-making. |
| Self-reliance — reduced dependence on imports for basic goods. | Licence Raj created CORRUPTION and stifled entrepreneurship. |
| Scientific and technical manpower developed (IITs, CSIR). | AGRICULTURE and RURAL DEVELOPMENT relatively NEGLECTED. |
6. Exam Focus
| Question Type | Marks | Likely Topics |
|---|---|---|
| Short Answer | 4 | Describe the idea of planned development in India |
| Short Answer | 2 | Compare Nehru's and the Gandhian visions of development |
| Short Answer | 2 | What was the mixed economy? Evaluate its outcomes |
Self-Test
Q1. Describe the DEBATE between Nehru's vision and the Gandhian alternative for India's development. A1. NEHRU'S VISION: State-led heavy industrialisation. Large dams, steel plants, machines — 'the temples of modern India.' Centralised planning (Planning Commission, Five Year Plans). Science, technology, modernity. The Second Plan (1956-61) embodied this vision. GANDHIAN ALTERNATIVE: Village-centred development. Small-scale, labour-intensive industry. Self-sufficient village communities ('Gram Swaraj'). Decentralised planning through Panchayats. 'India lives in its villages' — development must start there. OUTCOME: Nehru's vision prevailed. The Gandhian alternative was marginalised. But the debate continues — from NREGA (rural employment guarantee) to farmer movements to Swadeshi. 'Industrialisation built India's economic backbone. But the neglect of agriculture and villages has been one of India's most persistent development failures.'
