Name : Pallavi Bajpai Course: BA Programme Year: 2nd Subject: Contemporary India Question- How has Indian planning

changed from the Nehruvian to contemporary period. Explain with examples. Elucidate. AnswerIn tracing the evolution o the Indian planning system and trying to assess its strengths and !ea"nesses# it !ould be air to begin by recalling India$s colonial past% At the time o independence# India !as in the grip o stagnating per capita national income# static and semi& eudal agriculture# poorly developed industry and inade'uate in rastructure# mass poverty# unemployment# illiteracy# high birth and death rates and deplorable health conditions% (he economy had been stagnant over the period )*++ to )*,+% (he only industries that !ere really developed !ere cotton and jute te-tiles# tea and ood processing% .uch o this !as controlled by a e! large irms% /oreign capital dominated industry and e-ternal trade% (he development strategies adopted in India a ter )*01 !ere ramed against this bac"ground o her recent history% (here !as a need to put in huge and organi2ed e ort on a national scale to achieve substantial progress on the socio economic ront% (o!ards this end# planning !as accepted as the "ey strategy o India$s developmental e orts% (he strategic design o these policies !as tremendously in luenced by the dominant ideology o the Indian national movement and the ideas o nationalist leaders# especially Nehru% (he idea o sel &reliant independent economic development#creation o e'uity in Indian society in terms o caste hierarchy#regional disparities !as put or!ard in !hich the state !ould play a "ey role% (he need or planning !as so strongly elt that the Indian National Congress set up the National Planning Committee3NPC4 in )*56 under the chairmanship o Pt% 7a!aharlal Nehru !ho !as greatly in luenced by democratic#socialist# 8andhian principles% (he basic objectives o planning !ere derived rom the 9irectives Principles o State Policy enshrined in the Constitution% (he objectives !ere: 3i4 accelerating economic gro!th to achieve higher level o national and per capita income: 3ii4 moderni2ation& implementing structural and institutional changes to ma"e the economy progressive and independent: 3iii4 sel reliance& eliminating dependence on oreign aid and India$s vulnerability to e-ternal pressures and disturbances: and 3iv4 social justice&improving the living standards o the masses# especially the underprivileged through reduction in income ine'ualities# removal o unemployment# elimination o poverty# land re orms and social programmes on health and education% ;ith this perspective# the Planning Commission !as set up in )*,+ by a government resolution to ormulate a plan or economic and social development and act as an advisory body to the <nion government in its behal % It consists o the Prime .inister o India as its Chairman and people rom di erent divers ields o e-pertise& statisticians# economists# mathematicians% Planning !as started as a step to economic reconstruction in order to create tangible goals or Indian state that !ould lead it out o e-ploitative nature o Indian governance !hich colonialism had brought to India and also creating a $moral$ community# incorporating indigenous modes o organi2ing Indian society% (he idea o development that !as engendered !ithin this planning process !as an intersection o t!o strands o nationalist thin"ing& the $Nehruvian modernism$ inspired by the ;est i%e a move rom traditional# eudal society into being a modern industriali2ed society% =ther prominent nationalist strand !as that o the $8andhian$ principles envisaging social justice at the grassroot level in the process o plan implementation#development o cottage industries# artisanal s"ills#indigenous communities at the village level 3idea o community development programme4 and not just emulating the hierarchies created by colonial rule % 8andhi !as not a part

o the planning committee but inspired many !ho !ere a part o it 3>g% 7%C ?umarappa# a member o the the planning committee# advocated 8andhian ideals o development o cottage industries# handicra ts and !as instrumental in strengthening o village industries%4 @oo"ing bac" on the emergence o early ideas about development planning in India# rom the reports o the National Planning Committee under Nehru to the ormulation o the irst t!o ive year plans# the main themes are easy to discern% (hough poor and technologically bac"!ard compared to countries o >urope and North America# India !as seen as possessing natural resources and human s"ills capable o reconstructing and diversi ying its economic structure in the same !ay as the ;est had achieved since the mid&nineteenth century% (he main barrier to overcome !as the lac" o capital stoc" both in 'uantity and 'uality: so the development process !old re'uire the generation o ade'uate savings or rapid gro!th o investment% (he central objective o planning !as clearly to raise the standards o living o the large numbers o the poor# moderni2ing agriculture # increasing ood production but at the core o the developmental process !as rapid industriali2ation and eventually shi ting o a signi icant proportion o the population dependent on agriculture to non&agricultural occupations% (he era o planned development !as ushered in !ith the launch o the First Five- ear !lan in April )*,) 3(he period or the Plan !as )*,)&)*,A4%(he highest priority !as given to overcoming the ood crisis by raising ood grain output# curbing in lation and the development o in rastructure% (!o signi icant steps !ere ta"en in the )*,+s to bring about major changes in the agrarian structure% (hese !ere the Community 9evelopment Programme and land re orms% (he C9P !as launched in )*,2 aiming to promote cooperation bet!een the government and the rural masses to improve economic# social# cultural conditions o communities and integrate them into the mainstream li e o the nation and contribute to national progress% Also# o!ing to the e-ploitative nature o the land tenure system in the colonial period# land re orms !ere introduced 3a4 to remove obstacles arising rom the $2amindari$ agrarian structure inherited rom the colonial past and 3b4 to deliver social justice and 'uality o status and opportunity to all sections o the rural population% (he "econd Five- ear !lan3)*,A&)*A)4 is regarded as the milestone in the trajectory o planning since it !as based on the Nehru&.ahalnobis strategy o development# !hich guided the planning practice or more than three decades until the Seventh /ive&Year Plan% (he dra t outline o this plan !as ramed by P%C% .ahalanobis% Its basic themes !ere: Baising the rate o investment and stepping up domestic and oreign savings also% Bapid capital ormation through the direct intervention o the state in the economy% Ceavy Industriali2ation 3 big dams#industries#mining projects !ere seen as $temples o modern India$4 and pre erence o capital goods industries to consumer goods industries% Assuming a $closed economy$ !ith import substitution or sel reliance and reduction o e-ternal dependence% Setting up o an elaborate system o controls and industrial licensing to allocate resources among industries and distribute consumption goods e'uitably among the consumers% (his !as done through the Industries 9evelopment and Begulation Act 3I9BA4 o )*,)% In this !ay# the Second /ive&Year Plan sought to promote a $socialistic$ pattern o development in India !here the state entered the ields o production and distribution to achieve developmental objectives% Co!ever# this did not mean complete elimination o private enterprise% In act# the state !as pledged to maintain a $mi-ed economy$ in a society based on its commitment to democracy and socialism% Also# the National 9evelopment Council 3N9C4 !as ormed as an adjunct to the Planning Commission to associate the states in the ormulation o plans because its membership comprised o the Chie .inisters o all the states%

Another eature o the Second Plan !as an an-iety regarding employment% Since the "ind o industriali2ation planned re'uired s"illed labour orce# the seasonally unemployed labour orce in the villages got recruited in the actories#construction sector and other non& agricultural occupations in the cities% In the agricultural sector# Cooperative /arming !as given impetus !here many armers !ould combine their land holdings# ma"e it into a $cooperative$ arm and share pro its on the basis o produce% (his !ay the cost o agricultural produce !as reduced and also led to more o community bonding% /urthermore# .inimum Support Price3.SP4 !as introduced by the state so that the surplus produced in the agricultural sector !ould be bought by the state and then sold in the mar"et% Co!ever# this did not !or" !ell because the arming !as only subsistence based and the armers !ere not technologically advanced and had small landholdings that could not produce major surplus% (he Nehru&.ahalanobis strategy o development aced considerable criticism that resulted in heavy concentration o !ealth and large scale unemployment because o allocation o higher priority to heavy industries than labour&intensive industries% Su"umoy Cha"ravarty states# There was gross over-optimism about the long-term ability of traditional agriculture to contribute to industrialization by providing cheap labour and cheap food. It also created $@icense Baj$ in the country avoring large industrial houses that became an impediment to industrial development% @and Be orms and the C9P also did not achieve considerable success o!ing to de ects in legislations# lac" o political !ill and bureaucratic apathy% Nevertheless# this phase created basic in rastructure or comprehensive development in the society% (he overall economic per ormance !as ar better compared to the colonial period% 9espite these achievements# India aced a macroeconomic crisis in the mid& )*A+s 3during the (hird Plan )*A)&AA4 due to the slo! gro!th o agriculture and e-ports# t!o successive droughts o )*A, and )*AA and the Indo&Pa" ;ar o )*A,# ollo!ed by a suspension o <S aid% (his situation delayed the /orth Plan and three annual plans !ere adopted bet!een )*AA&)*A*% (he response o the sate to the crisis included: 3i4adoption o restrictive iscal policies by cutting do!n on e-penditure 3ii4devaluation o the rupee so as to integrate the Indian mar"et !ith the global mar"et and 3iii4 the launching o the 8reen Bevolution !here high yielding varities o seeds that had higher productivity than traditional varities#chemical ertili2ers#pesticides and insecticides#agricultural machinery#e-tensive irrigation and use o diesel and electrucal po!er !ere employed in agriculture% ;ith the Fourth !lan3)*A*&)*104# the major tagline introduced !as $gro!th !ith social justice$% Also# amily planning and population control !ere major plans% Schemes or education and also schemes or rural youth and s"illed development li"e $(raining Bural Youth or Sel >mployment$ 3(BYS>.4 !ere launched% Although the basic rame!or" o the .ahalanobis strategy !as retained until the end o the Seventh Plan# shi ts rom this strategy became visible rom the /ourth Plan on!ards !here the objective o sel &reliance !as not discarded#but the main emphasis !as shi ted to rapid economic gro!th% (he state !ent or an elaborate system o controls in the economy such as the nationali2ation o ban"s in )*A*#the .onopolies and Bestrictive (rade Practices3.B(P4 Act in )*A*# nationali2ation o the insurance sector in )*12 and the coal industry in )*15# and the /oreign >-change Begulation Act3/>BA4 in )*15% In the Fifth !lan3)*10&)*1*4# the approach o planning changed% (he approach adopted !as the $basic needs approach$ !here every person in the country should be able to ul ill hisDher basic re'uirements in terms o ood#shelter#clothing etc% (he basic needs approach !as materiali2ed into a policy "no!n as the $.inimum Needs Programme$ that had a provision o sa e drin"ing !ater#elementary education#healthcare#shelter etc% Interestingly# in this period there !as an end o the communist regime and rom )*11 the 7anata Party came into po!er and ended many o the planned goals%(hus#one can see ho! the ield o planning is implicated !ith po!er%

(he "ixth Five ear !lan3)*6+&)*6,4 adopted various redistributive measures such as the Integrated Bural 9evelopment Programme3IB9P4 and the National Bural >mployment Programme3NB>P4% It !as also the period o .r% Bajiv 8andhi under !hom the beginnings o liberali2ation !ere seen because structurally India !as integrated !ith the International .onetary /und3I./4 and ;orld (rade =rgani2ation3;(=4 etc% (he "eventh !lan3)*6,&)**+4 adopted a ne! long&term development strategy ocussing on gro!th in ood grain production#employment opportunities and productivity and e-ports promotion#thus mi-ed economic model slo!ly !as giving !ay to privati2ation% In response to the internal economic crisis o )**+&)**) and the changing international situation# the Narasimha Bao government decided to introduce re orms or the Ne! >conomic Policy3N>P4 !hich clearly re lected certain global trends#namely#the collapse o the socialist economy and the gro!ing acceptance o economic globali2ation across the !orld% (he re orms mar"ed a shi t rom the Nehruvian consensus o the )*,+s to a ne! consensus o liberali2ation and globali2ation !hich !as revolutionary in nature% (he re orms included macroeconomic stabili2ation and structural re orms to regulate the total demand in the economy% Also structural re orms included liberali2ed trade and investment policies !ith emphasis on e-ports#industrial deregulation#disinvestment and public sector re orms and re orms o the capital mar"ets and the inancial sector# thereby striving to achieve a progressive economy by removing internal controls and urther 'uip it to ta"e advantage o the opportunities provided by the !orld!ide globali2ation process% In the ace o these changes# the >ighth Plan#the Ninth Plan and the (enth Plan !ere launched% ;ith the Eighth !lan3)**2&)**14 there !as disinvestment o the public sector units as a result o !hich the $Navratnas$ became secluded and ull ledged investment !as made by the capitalists% (he slogan o the Ninth !lan3)**1&2++24 !as $gro!th !ith social justice and e'uality$ and impetus !as given to ood and nutritional security% Also !ith liberali2ation and gro!ing privati2ation#there !as a need or the state to become more active and strategic in social sector because reproduction o labour orce !as re'uired or industrial gro!th% Alongside there as a $catch&up$ model o development put or!ard !here modernity had to supercede traditional base% (he notion implicit !ithin it !as the ;estern mode o development% (his "ind o development too" place at the e-pense o certain marginali2ed people%Ceavy industriali2ation !as re'uired !hich lead to massive de orestation o the orested areas% ;ith the natural environment being a ected# schemes o social orestry !ere launched# climate change con erences being held and also increasing sensiti2ation about the use o rene!able sources o energy to prevent depletion o ossil uels and protect the environment at large% (he #enth !lan 32++2&2++14 sa! an increased gro!th rate o 1%1E in the economy%3>arlier it had been not more than ,E4 (his !as called the $Cindu Bate o 8ro!th$ by many economists% Co!ever there !as increase in regional imbalances#economic disparities and ailure o the entire political premise on !hich Nehru based his development model !hich !as the $Trickle Down Theory$ !here the marginali2ed and the disadvantaged sections o the society are bene itted and concentration o !ealth !ith the capitalists could be prevented% In the Eleventh !lan32++1&2+)24# the gro!th rate targeted !as *E but only AE could be achieved% ;ith the coming o the /oreign 9irect Investment3/9I4 investing assets in Indian economy and earning pro its#private sector needed to become more competitive in nature in relation to oreign industry% Also a major implication or a ederal country li"e India# there !as direct investment in state#bypassing the centre leading to regional imbalance !ith states attainting certain "ind o an autonomy% (he >leventh Plan also sa! a major investment in the agricultural sector # ood security#s"illed development#establishment o polytechnic colleges especially or !omen# e-pansion o health services#!omen employment#education#gender justice% (echnology based governance !as also becoming important through !hich ne! structures o rationali2ation and to demarcate categories and identities !ere introduced !ith the <ni'ue Identi ication Number3<I94 or

the $Aadhar$ no% Another change !as a move to $public&private partnership$ 3PPP4 especially in urban developments% >ven though the planning process envisaged ideas o socio&economic development and sustainable gro!th# many scholars have given various reasons or its ailure%According to A$it %a&umdar the implementation o plans ailed because the social and political constraints in India led to a gap bet!een the ideal plan to be achieved and !hat !as actually achieved% Secondly# planning !hich !as to be done at centrali2ed level !as succumbing to the process o $bargaining ederalism$ !here there !as a lac" o coordination and gap bet!een the ideals set by the central polity and the implementation agencies at the state level% (hirdly#planning envisaged schemes to tac"le poverty#unemployment etc% "eeping up !ith the $socialist$ pattern o development% Co!ever# there !ere seen as more $patroni2ing than substantial$% (he $(ric"le 9o!n (heory$ ailed too because accumulation too" place $hori2ontally$ rather than $vertically$ i%e surplus or instance in agricultural sector did not move to!ard the landless labourers but to!ards other sectors li"e industry% (hus# ine'ualities emerged% @astly# plan implementation ailed because the goals changed !ith change o political regime 3/or e%g& In the year )*11#!hen 7anta Party came to po!er4% (hus planning muddled !ith politics and !as destabili2ed as a process% Some reasons given by "u'umoy (ha'ravarty or the ailure o plan implementation !ere& /irstly# ailure o the Planning Commission to collect relevant in ormation% Ce described planning as a solution oriented method that re'uires collection o in ormation !hich is present $objectively out there$ ready to be collected and does not depend on !hat inde- suggests% !artha (hatter$ee critici2es this by saying in ormation is never present objectively and the notion o $objective correct in ormation$ does not e-ist% (hus# planning has ailed in India because the state never made a correct estimate and collect in ormation in an accurate manner% Secondly# according to Su"umoy Cha"ravarty# there !as a huge time lag bet!een the occurence o a problem and the solutions designed to address that problem% And lastly#the incapacity o the plan implementation agencies and ho! there !as a ne-us bet!een the public o icials#bureaucrats and the private capitalists !ith their o!n vested interests% BIB@I=8BAPCY& )4 Chandho"e#Neera F Priyadarshi#Praveen# 2++*% ontemporary !ndia"#conomy"$ociety and %olitics. 9orling ?inderly3India4 Pvt% @td% pp )1&52% 24 Chatterjee#Partha% Development %lanning &nd The !ndian $tate% 54 Cha"ravarty#Su"umoy# )*61% Development %lanning' The !ndian #(perience# =- ord% 04 .a2umdar#Ajit% The )ise &nd Decline *f Development %lanning !n !ndia.