EPSD Final Exam

For the upcoming end semester written exam for EPSD, you need to study the following
topics based on the whole syllabus. There will be a compulsory question on Kohli's paper
(Part A).

1. Colonial policies and the jute and cotton textile industry in India: selected portions
from Sumit Sarkar (as indicated in the course outline) pp- 205 - 263

2. Green revolution and entitlements: Sukhamaya Chakravarty (selected portions)

and Ashutosh Varshney – (Chakravarty, S (1987), ‘Development Planning: The Indian
Experience’, Clarendon, Oxford University Press, Chapters, 1, 2, 3 and the conclusion. )

3. Structural demand argument for understanding the decline in Industry in the mid
1960s: selected portions from Sudip Choudhury ( Sudip Choudhury Khan M (2012):
‘India’s Political Settlement and Economic Growth Since the 1980s’ , SOAS Working
Paper.)
4. Liberalisation debate: demystification of growth: Atul Kohli (Part A)
(Kohli, A (2006 a & b), ‘Politics of Economic Growth in India, 1980-2005, Part I: The
1980s’, Economic and Political Weekly, April 1st, p1251-1259.)
(Kohli, A (2012): Poverty Amid Plenty in the New India, Cambridge University Press, New
York )

Exam Notes

Liberation Debate – Atul Kholi

This text, written by Atul Kohli, discusses the politics of economic growth in India from
1980 to 2005. It highlights several key points and facts:

1.Economic Growth in India: From 1980 to 2005, India experienced significant economic
growth, with an average annual growth rate of nearly 6 percent. This is remarkable given
India's historical economic stagnation in the early 20th century and sluggish growth after
independence.

2.Contradiction to Pro-Market Argument: The author challenges the widely held belief
that India's economic growth was solely a result of adopting pro-market policies. The growth
began a decade before liberalizing reforms in 1991, and post-1991 industrial growth did not
accelerate as expected. Moreover, there were disparities in growth across Indian regions.
rowth in India started accelerating a full decade prior to liberalisation of 1991 [Nagaraj 2000; De Long 2003;
Rodrik and Subramanian 2004; Virmani 2004] -
3.State's Role in Growth: The text argues that India's economic growth can be attributed to
the Indian state's prioritization of growth since around 1980. The state gradually embraced
Indian capital as a key ally, leading to a pro-business growth strategy.

4.Political and Distributional Consequences: The pro-business growth strategy may have
distributional and political consequences, including growing regional and class inequalities,
the use of ethnic nationalism for political mobilization, and rapid changes in ruling
governments.

5.Comparison with Global Context: India's embrace of the global economy was relatively
modest compared to many other developing countries, yet it achieved superior economic
performance.

6.Pro-Market vs. Pro-Business: The text distinguishes between pro-market and pro-
business strategies of state intervention. Pro-market strategies emphasize minimal state
intervention and open economies, while pro-business strategies prioritize economic growth
through state support for established producers.

7.Factors Behind Growth Acceleration: Economic growth in India accelerated due to

improvements in investment rates and productivity. Investments in both the public and
private sectors contributed to this growth.

8.Political Shift in the 1980s: The text argues that a significant political shift occurred in the
1980s. Indira Gandhi's government shifted from left-leaning, socialist policies to a more pro-
business approach. The emphasis shifted from distributive justice to economic growth.

9. Alignment with Big Business: Indira Gandhi's government sought closer alignment with
big capital and downplayed redistributive policies. This realignment aimed to boost economic
growth.

10.Embracing a New Development Model: The text suggests that India moved away from
the earlier statist and nationalist development model towards a state-business alliance for
economic growth.

In summary, the text explores the complex factors contributing to India's economic growth,
challenges the notion of a purely pro-market approach, and highlights the changing role of
the Indian state in fostering economic development. It also emphasizes the potential political
and distributional consequences of this economic strategy.

Summary:

The text discusses the shift in India's development model during the 1980s under the
leadership of Indira Gandhi and her successor, Rajiv Gandhi. The key components of this
new development model were:

1. Prioritization of Economic Growth: Indira Gandhi's government made economic growth a

top state goal, moving away from redistributive socialism towards a "growth-first" approach,
focusing on production and productivity improvements.
2. Support for Big Business: The government implemented pro-business policies, removing
constraints on large corporations and encouraging their entry into sectors previously reserved
for the public sector.

3. Taming Labor: To facilitate rapid industrial expansion, labor activism was curbed through
special legislation and cooperation between labor and business.

Several committees were established to implement these changes, including the L K Jha
Committee, Abid Hussain Committee, and M Narasimham Committee. These committees
aimed to overhaul economic administration, review trade policies, and consider financial
reforms, all while receiving support from the Indian business community.

In terms of financing expansion, the government provided tax relief and incentives to
encourage private sector investment, resulting in increased capital issuance by private
corporations.

The text also highlights that India's approach to development differed from the "Washington
Consensus" of the time, advocating for a more activist state that would spend more, control
labor more, and support capital more actively.

Additionally, the Indian government sought to restructure its own economic role by
increasing indirect revenues through excise and customs duties and limiting new investments
in public sector enterprises. This was in contrast to cutting public expenditures, as seen in
some other countries.

Regarding India's economic relations with the outside world, the country entered into a loan
agreement with the IMF to counterbalance rising import costs and to finance industrial
growth. Import liberalization occurred in 1981 but was later reversed in 1983-84 due to
concerns about the impact on domestic businesses.

The text also discusses the continuation of this pro-business, growth-oriented model under
Rajiv Gandhi and the importance of the commitment to economic growth, rather than just
"openness" or "laissez-faire." It emphasizes that the policy pattern favored big Indian
businesses.

The text concludes by acknowledging the positive impact of this shift on economic growth,
but it also highlights the political and political economy problems that emerged, such as
ethnic politics and fiscal pressures.

Key Names and Facts:

- Indira Gandhi
- Rajiv Gandhi
- L K Jha Committee
- Abid Hussain Committee
- M Narasimham Committee
- Federation of Indian Chambers of Commerce and Industry (FICCI)
- Monopolies and Restrictive Trade Practices Act (MRTP Act)
- Pranab Mukherjee
- IMF loan agreement
- Washington Consensus
- Reliance Industries
- Bharatiya Janata Party (BJP)

The text outlines a significant transformation in India's development model during the 1980s,
focusing on pro-business policies, growth, and the challenges and consequences associated
with this shift.

Crafted answer

For the last quarter of a century India’s economy has grown at an average rate of nearly 6 per
cent per annum. The widely embraced argument that this growth pick up is
a result of the Indian state’s adoption of a pro-market strategy is inadequate for three reasons:
the growth pick up in India began an entire decade before the liberalising reforms in 1991;
post-1991 industrial growth has not accelerated; and uneven growth across Indian regions
defies any simple market logic. Instead, India’s economy has grown briskly because the
Indian state has prioritised growth since about 1980 and slowly but surely embraced Indian
capital as its main ruling ally. This pro-business growth strategy is likely to have adverse
distributional and political consequences.

I adopt the view that rapid industrialisation in the developing world – as, for example, in South Korea or in
some time periods in Brazil – was promoted, not by minimal states that embraced the market, but by highly
interventionist states who prioritised economic growth as a state goal, ruthlessly supported capitalists, repressed
labour, mobilised economic nationalism to provide social glue, and channelled firm activities to produce both
for protected domestic markets and

Ans. During the period from 1980 to 2005, India witnessed remarkable economic growth, with an average
annual growth rate of nearly 6 percent. This growth was particularly significant considering India's historical
economic stagnation and sluggish progress after gaining independence.

However, it is essential to challenge the conventional belief that India's economic growth was solely the result
of adopting pro-market policies. The growth trajectory actually began a decade before the liberalizing reforms
of 1991, and the anticipated acceleration in industrial growth post-1991 did not materialize. Furthermore,
regional disparities in growth patterns suggest that a more nuanced perspective is needed.

The driving force behind India's economic growth during this period was the prioritization of growth by the
Indian state, starting around 1980. This shift involved a gradual alignment of the state with Indian capital,
leading to the adoption of a pro-business growth strategy. This strategy aimed to bolster economic growth and
was characterised by several key components:

1. Prioritization of Economic Growth: The government shifted its focus away from redistributive socialism
and instead emphasized economic growth, particularly in terms of production and productivity improvements.

2.Support for Big Business: Pro-business policies were implemented, which included removing constraints on
large corporations and encouraging their entry into sectors that were previously reserved for the public sector.

3.Taming Labor: To facilitate rapid industrial expansion, labor activism was curbed through special legislation,
fostering cooperation between labor and business interests.

This shift in economic strategy coincided with a significant political transformation in the 1980s. Indira
Gandhi's government transitioned from left-leaning socialist policies to a more pro-business approach, where
economic growth took precedence over distributive justice.
Despite these changes, it is important to note that India's embrace of the global economy was relatively modest
compared to many other developing nations, yet it achieved superior economic performance.

A crucial distinction highlighted is the difference between pro-market and pro-business strategies of state
intervention. While pro-market strategies advocate minimal state interference and open economies, pro-business
strategies prioritize economic growth through active state support for established producers.

The emphasises that India's economic growth was not without its challenges and potential consequences. The
pro-business growth strategy may have led to growing regional and class inequalities and the use of ethnic
nationalism for political mobilisation. Frequent changes in ruling governments were also observed during this
period.

In conclusion, India's economic growth from 1980 to 2005 was driven by a shift towards a pro-business growth
strategy, characterised by state support for economic expansion. This approach challenged the conventional pro-
market argument and had notable political and distributional implications.

Summit Sarkar - India in The Modern Times

What were the Colonial policies that helped shape the jute and cotton textile industry in India
and how they managed to do that

The colonial policies that helped shape the jute and cotton textile industry in India during the
late colonial period had significant implications for the working class. Here's an overview of
these policies and how they influenced these industries:

Jute Industry:

- Commercial Revolution: During the nineteenth century, there was a global surge in
demand for packaging materials, including jute products such as hessian and gunny sacks.
- British Entrepreneurship: Initially, jute mills in Bengal were established by British
entrepreneurs to meet this demand.
- Vagaries of Raw Cotton Production: However, the jute industry faced challenges related
to the unpredictability of raw cotton production and prices.
- Absence of Technological Improvement: There was a lack of significant technological
advancement in the industry, leading to stagnation.

Cotton Textile Industry:

- Emergence of Major Centers: The cotton textile industry saw major centers emerge in
Bombay and Ahmedabad. These mills were predominantly owned by Parsi and Gujarati
businessmen.
- Indian Entrepreneurship: The delay in establishing full British political authority in
western India allowed for the development of a significant Indian presence in the industry.
- Uncertainty in Textile Production: Indian entrepreneurs in the cotton textile industry
grappled with the uncertainty of textile production, including fluctuations in raw material
availability and market demand.
- Formal-Informal Labor Distinction: A significant portion of the labor force in Bombay
worked on a casual basis, blurring the line between the formal and informal sectors.

Colonial Policies:

- Free Trade Regime: The British implemented a free-trade regime that favored Lancashire's
yarn and piece goods imports. This policy hindered the growth of Indian textile mills and
made them dependent on British machinery and import agencies.
- Control Over Key Sectors: British control over railways, shipping, insurance, and overseas
trade further constrained Indian entrepreneurs in these industries.

Impact on Working Class:

- Harsh Working Conditions: Working conditions for laborers in both jute and cotton
textile industries were wretched, with long working hours ranging from 13 to 15 hours a day.
Women and children were also employed.
- Mobility and Labor Supply: A preference for migratory or circulatory movement among
workers, where they periodically returned to the countryside, suited their immediate interests
given poor urban living conditions.
- Wages and Labor Supply: Despite harsh conditions, there was never a shortage of labor
supply, and wages were higher than those of agricultural laborers in the countryside.

In summary, colonial policies favored British interests and constrained Indian entrepreneurs
in the jute and cotton textile industries. These policies hindered technological advancement,
created uncertainty in production, and blurred the distinction between formal and informal
labor sectors. While these industries provided employment and higher wages compared to
agriculture, they also subjected workers to harsh conditions. The development of these
industries had both positive and negative impacts on the working class, shaping their
struggles and labor movements in response to exploitation and poor working conditions.

How did the development of the textile industry in Bombay and Ahmedabad
during the late colonial period impact the working class, and what were the
challenges faced by Indian entrepreneurs in this industry?
The development of the textile industry in Bombay and Ahmedabad during the late colonial
period had a significant impact on the working class. In Ahmedabad, the textile industry grew
faster than in Bombay, with a higher proportion of looms to spindles and the manufacturing
of higher count yarn [1]. This led to a greater potential for conflict with Lancashire, which
may explain the closer relations between Ahmedabad's textile magnates and Gandhian
nationalism from the 1920s [1].

The working conditions for the laborers in both cities were wretched, with long working
hours ranging from 13 to 15 hours a day [1]. Women and children were also employed, and
even though there were some restrictions on their working hours, they were often evaded
through half-time work in multiple mills [1]. Despite the harsh conditions, there was never a
shortage of labor supply, and wages were higher than those of agricultural laborers in the
countryside [1].

Indian entrepreneurs in the textile industry faced several challenges. One challenge was the
uncertainty of textile production, including the vagaries of raw cotton production and prices,
as well as market demand for manufactured yarn and cloth [2]. To navigate these
uncertainties, Indian entrepreneurs made flexible investments in factories, putting-out or
small manufacture, trade (including the import of Lancashire textiles), or other forms of
business [2]. This flexibility allowed them to adapt to changing market conditions.

Another challenge faced by Indian entrepreneurs was the tenuous distinction between the
formal and informal sectors of the labor force [2]. A significant portion of the labor force in
the Bombay textile industry worked on a casual basis, and there was a preference for
migratory or circulatory movement, where workers periodically returned to the countryside
[2]. This mobility suited the immediate interests of workers, given the poor housing and
living conditions in urban slums [2]. However, the maintenance of the formal-informal
distinction became a permanent feature of the Indian labor scene, benefiting capitalists by
keeping the informal sector open to unregulated exploitation [2].

Overall, the development of the textile industry in Bombay and Ahmedabad had both positive
and negative impacts on the working class. While it provided employment and higher wages
compared to agricultural labor, the working conditions were harsh, and there were challenges
related to labor supply and the distinction between formal and informal sectors.

Colonial policies and the jute and cotton textile industry in India
Colonial policies played a significant role in shaping the jute and cotton textile industry in
India. The British implemented a free-trade regime that favored the interests of Lancashire's
yarn and piece goods imports [2]. This policy hindered the growth of Indian textile mills and
made them dependent on British engineering firms and import agencies for machinery [2].
Additionally, British control over railways, shipping, insurance, and overseas trade further
constrained Indian entrepreneurs in the industry [2].

In the jute industry, the commercial revolution of the nineteenth century led to a surge in
international demand for packaging material, and jute hessian and gunnysacks became
popular [1]. However, the jute mills in Bengal, which were initially set up by British
entrepreneurs, had a chequered history and faced challenges such as the vagaries of raw
cotton production and prices [1]. The absence of technological improvement in the industry
eventually led to its decline and stagnation [4].

In the cotton textile industry, major centers emerged in Bombay and Ahmedabad, owned
mostly by Parsi and Gujarati businessmen [3]. The delay in establishing full British political
authority in western India allowed for the development of a significant Indian presence in
business life [3]. However, Indian entrepreneurs in the industry faced challenges such as the
uncertainty of textile production, market demand, and the tenuous distinction between the
formal and informal sectors of the labor force [2].

Overall, colonial policies and constraints imposed by the British had a significant impact on
the development and challenges faced by the jute and cotton textile industries in India during
the late colonial period.

What were the conditions of labor in the tea plantations and mines in colonial
India, and how did workers resist and protest against exploitation?
The conditions of labor in the tea plantations and mines in colonial India were extremely
harsh and exploitative. In the tea plantations, workers, mostly from tribal communities, were
subjected to long working hours, low wages, and poor living conditions [1]. They lived in
cramped and unsanitary quarters, with inadequate access to healthcare and education [1]. In
the mines, workers faced dangerous working conditions, including exposure to toxic gases,
cave-ins, and accidents [2]. They were often paid low wages and had limited job security.

Workers in both the tea plantations and mines resisted and protested against exploitation
through various means. In the tea plantations, laborers organized strikes and protests to
demand better wages, improved living conditions, and the right to form trade unions [1].
They also engaged in acts of sabotage, such as damaging machinery and burning down
plantation buildings [1]. The labor movement in the tea plantations gained momentum in the
early 20th century, with the formation of unions like the Assam Cha Mazdoor Sangha and the
Indian Tea Association [1].

In the mines, workers also organized strikes and protests to demand better working conditions
and higher wages [2]. They formed unions such as the Indian Mineworkers' Federation and
the Indian Mineowners' Association to advocate for their rights [2]. Additionally, workers in
the mines engaged in acts of resistance, such as slowdowns, work stoppages, and even violent
clashes with mine owners and authorities [2].

Overall, workers in the tea plantations and mines in colonial India faced exploitative
conditions, but they actively resisted and protested against these injustices through strikes,
protests, sabotage, and the formation of trade unions. Their struggles played a crucial role in
improving working conditions and advancing workers' rights in these industries.

[1] Chakravarty, S. (2017). Tea Plantations and the Politics of Labor in Colonial Assam. In
Tea Plantations and the Politics of Colonial Assam (pp. 1-24). Springer.

[2] Roy, T. (2017). The Mineworkers of Colonial India: Labour and Resistance in the Mines
of Kolar Gold Fields. In Labour, State and Society in Rural India (pp. 97-116). Springer.
How did the introduction of Lancashire and Indian mill cloth impact the handicraft
industry in India, and what are the differing opinions on the idea of
deindustrialization?
The introduction of Lancashire and Indian mill cloth had a significant impact on the
handicraft industry in India. Lancashire mill cloth, which was produced using mechanized
processes and had lower production costs, flooded the Indian market and posed stiff
competition to the traditional handloom weavers [1]. The availability of cheaper and mass-
produced mill cloth led to a decline in demand for handloom products, causing a significant
disruption to the handicraft industry [1].

The impact of deindustrialization, or the decline of the handicraft industry, in India during the
colonial period is a topic of debate among scholars. Some argue that deindustrialization was a
deliberate strategy employed by the British to weaken Indian industries and promote the
dominance of British manufactured goods [2]. They view the decline of the handicraft
industry as a result of deliberate policies and economic exploitation by the colonial rulers.

On the other hand, there are differing opinions that challenge the idea of deliberate
deindustrialization. Some scholars argue that the decline of the handicraft industry was a
natural consequence of technological advancements and changing market dynamics [3]. They
suggest that the introduction of mechanized mill cloth was driven by market forces and
consumer preferences, rather than a deliberate attempt to destroy the Indian handicraft
industry.

Overall, the introduction of Lancashire and Indian mill cloth had a detrimental impact on the
handicraft industry in India, leading to a decline in demand for handloom products. The
differing opinions on deindustrialization revolve around whether it was a deliberate strategy
by the British or a result of market forces and technological advancements.

[1] Chakravarty, S. (2017). Tea Plantations and the Politics of Labor in Colonial Assam. In
Tea Plantations and the Politics of Colonial Assam (pp. 1-24). Springer.

[2] Roy, T. (2017). The Mineworkers of Colonial India: Labour and Resistance in the Mines
of Kolar Gold Fields. In Labour, State and Society in Rural India (pp. 97-116). Springer.

[3] Guha, R. (1989). The Unquiet Woods: Ecological Change and Peasant Resistance in the
Himalaya. University of California Press.
Green Revolution and Entitlements:-

Ashutosh Varshney

The text by Ashutosh Varshney discusses the work of Amartya Sen on poverty, famines, and
entitlements. Sen's two key insights are highlighted: the role of democracy in preventing
famines and the importance of entitlement failures in causing them. Democracy, with its free
press and political opposition, serves as an early warning system that can prevent famines by
enabling the government to take timely action. In contrast, authoritarian regimes may fail to
respond to early warnings, leading to famines.

The text further examines Sen's analysis of famines in India and China, showcasing how
India, despite its health challenges, has avoided famines since independence due to its
democratic institutions, while China experienced a devastating famine during the Great Leap
Forward due to the lack of a free press and political opposition.

Sen's classic work "Poverty and Famines" is also discussed, emphasizing the role of
entitlements in famines. Sen argues that famines occur when vulnerable groups lack the
income or legal rights to access food during critical times. The text emphasizes that Sen's
approach in this work is based on case studies, providing in-depth analysis and process
tracing to understand the causal mechanisms of famines.

The text proposes the addition of a new variable, technological dynamism in agriculture
(associated with the Green Revolution), to Sen's analysis. It suggests that while democracy is
one factor that protects entitlements, technological advancements in agriculture can also
prevent entitlement failures and famine by increasing food production and accessibility. The
Green Revolution's impact on Asia is contrasted with the absence of such technological
advancements in Sub-Saharan Africa and Bangladesh, where famines have occurred.

In summary, the text discusses Amartya Sen's insights into famines, highlighting the roles of
democracy and entitlement failures in famine prevention. It also suggests the importance of
technological advancements in agriculture as a factor in preventing entitlement failures and
famines.

In this extended summary, we will explore the relationship between the Green Revolution
and famine prevention, as discussed by Ashutosh Varshney in his work "Poverty and
Famines: An Extension." The Green Revolution was a period of rapid agricultural
development characterized by the adoption of new technologies, seeds, and practices that
significantly increased crop yields, especially in Asia. Varshney's analysis focuses on the
impact of the Green Revolution on famine prevention in India, Malaysia, and Indonesia.
**India:**
India faced severe food shortages and the threat of famine in the mid-1960s. However, the
Green Revolution, which began in Punjab, Haryana, and western Uttar Pradesh, transformed
Indian agriculture. It led to a substantial increase in food production, primarily due to higher
yields per acre rather than an expansion of cultivable land. Even small farmers benefited from
the Green Revolution, as they could produce food surpluses on their limited land. This
increase in productivity not only ensured food security but also helped small farmers
withstand various shocks. India's public food stocks also grew significantly, reducing the risk
of famine during droughts.

**Malaysia:**
In Malaysia, the Green Revolution brought about double-cropping and increased rice
production. Even smallholding tenants with very limited land could now produce enough rice
for their families. The adoption of Green Revolution technology, including irrigation and
fertilizer use, led to higher yields and greater reliability in food production. As a result, fears
of food shortages and undernutrition among the poor in the Muda region of Kedah
significantly diminished.

**Indonesia:**
Indonesia, under Suharto's rule, implemented policies that supported crop prices, rural public
works, and Green Revolution technology. This transformation lifted Indonesia from being
one of the poorest countries in the mid-1960s to a nation with increased food security by the
mid-1980s. The Green Revolution, combined with government support, improved labor
productivity, especially benefiting the poor. Even during the economic crisis of 1997/1998,
Indonesia did not experience famines because of the food security achieved over the previous
decades.

Varshney's analysis underscores the significant role of technological dynamism in agriculture

in preventing famines. The Green Revolution's technological advancements increased
productivity, enhanced the food security of small farmers, and allowed governments to
accumulate food buffer stocks. These buffer stocks played a crucial role in stabilizing food
prices and ensuring food availability in times of supply shocks.

The author emphasizes that the Green Revolution's success was not solely due to
technological advancements but also depended on supportive government policies and
interventions. While markets were essential, government actions, such as input provision,
research and extension, grain procurement, and price stabilization, worked in conjunction
with market mechanisms.

In conclusion, Ashutosh Varshney's analysis in "Poverty and Famines: An Extension"

demonstrates that technological dynamism in agriculture, as seen in the Green Revolution,
played a pivotal role in preventing famines by increasing food production, improving small
farmers' entitlements, and enabling the accumulation of food buffer stocks. These
achievements contributed to greater food security and reduced vulnerability to hunger and
famines in India, Malaysia, and Indonesia.

Ans.
The relationship between the Green Revolution and entitlements in the context of famine
prevention is a complex yet crucial one. Ashutosh Varshney's work in "Poverty and Famines:
An Extension" sheds light on how the Green Revolution, a period of significant agricultural
advancement, influenced entitlements and famine prevention. Let's delve deeper into this
relationship:

1. Green Revolution and Increased Food Production: The Green Revolution introduced
new agricultural technologies, such as high-yield crop varieties, irrigation, and the use
of fertilizers. These innovations led to a substantial increase in food production,
particularly in Asian countries like India, Malaysia, and Indonesia. The higher crop
yields meant more food was available, contributing to enhanced entitlements as
people had access to a greater food supply.

2. Impact on Small Farmers: The Green Revolution wasn't solely beneficial to large-
scale farmers. In fact, it had a significant positive impact on small-scale farmers as
well. These farmers, who previously struggled to produce enough food for their
families, could now generate food surpluses on their limited land. This increase in
agricultural productivity directly improved their entitlements to food and reduced
their vulnerability to food shortages.

3. Buffer Stocks and Price Stability: The Green Revolution also allowed governments to
accumulate buffer stocks of food. These stocks acted as a safety net during times of
supply shocks, such as droughts or crop failures. When food supplies were threatened,
governments could release these stocks to stabilize food prices and ensure continued
access to food for their populations. This mechanism further protected entitlements by
preventing sudden price spikes that could lead to famine conditions.

4. Comparison with Sub-Saharan Africa: Varshney's analysis highlights a critical

contrast between the impact of the Green Revolution in Asia and the absence of such
technological advancements in Sub-Saharan Africa. In regions where the Green
Revolution did not take place, like Sub-Saharan Africa and Bangladesh, famines have
occurred. This contrast underscores the importance of technological dynamism in
agriculture in preventing entitlement failures and famines.

5. Role of Government Support: While technological advancements were essential, the

role of government support cannot be understated. Government interventions in
providing inputs, research and extension services, grain procurement, and price
stabilization complemented the market-driven aspects of the Green Revolution. These
actions worked together to protect entitlements and enhance food security.
 6. Technological Dynamism as a Variable: Varshney's work proposes adding
technological dynamism in agriculture as a variable in Amartya Sen's analysis. This
variable recognizes that, in addition to democracy and entitlement failures,
technological advancements play a crucial role in preventing famines. It emphasizes
that a combination of factors, including democracy, supportive government policies,
and agricultural innovation, can collectively protect entitlements and reduce the risk
of famines.

In conclusion, the Green Revolution had a profound impact on entitlements and famine
prevention by significantly increasing food production, improving the conditions of small-
scale farmers, and enabling governments to stabilize food prices during crises. While the
Green Revolution was not a panacea, it demonstrated the importance of technological
dynamism in agriculture as a vital component of efforts to prevent famines alongside the
factors highlighted by Amartya Sen, such as democracy and entitlement failures.

Sukhamaya Chakravarty

The text discusses the foundations of India's development strategy, specifically the Nehru-
Mahalanobis approach. It highlights the historical context of India's development debate,
contrasting the Gandhian and Nehruvian approaches. The text also mentions China's adoption
of market-oriented reforms and its shift towards a competitive spirit.

It further delves into Nehru's influence as a modernizer and his alignment with Fabian
socialism, emphasizing the importance of the National Planning Committee and its
interventionist economic philosophy. The first three five-year plans, with a focus on the
Second Plan, are highlighted as pivotal moments in India's economic thinking.

The text outlines the structural constraints perceived by Indian planners, including the
deficiency of material capital, low savings capacity, and the need for productive investment.
It also touches on the preference for industrialization over agriculture and the role of public
investment in balancing supply and demand.

Additionally, it discusses the influence of Soviet planning models and the homology between
the Soviet and Indian situations. However, it emphasizes the presence of powerful pressure
groups in Indian society, which influenced the development model.

The text concludes by positioning India's mid-fifties development model as a variant of the
Lewis model, with a focus on the two-sector disaggregation and the active role of the state. It
also mentions the financial challenges posed by the mixed economy framework and the
importance of reinvested profits in driving growth.

Overall, the text provides a detailed overview of the historical and ideological context of
India's development strategy, highlighting key figures, debates, and economic theories that
influenced the country's approach to development.

In this additional portion of the text, several crucial aspects of India's development strategy
are discussed:

1. Parallel to Soviet Economic Debate: The text draws parallels between India's
development strategy in the mid-twentieth century and the economic debates that took place
in the Soviet Union during the 1920s. It mentions the recognition by both Bukharin and
Preobrazhensky, key figures in the Soviet economic debate, of the need for substantial real
resources for accumulation. This is analogous to the situation faced by India's planners.

2. The Financing Pattern: The text explains that India deliberately chose a financing pattern
in the 1950s rooted in what Indian planners believed to be an egalitarian policy mix. It
encouraged private sector growth, anticipating that it would generate large profits that could
be reinvested. This strategy aimed to make the public sector largely self-financing over time.

3. Trade as an Engine of Growth: The text briefly discusses the role of trade as an engine of
growth. It acknowledges that Indian planners initially projected a balance of trade that didn't
foresee significant short-term export earnings growth. Instead, they believed that
industrialization needed to proceed further before substantial export growth could occur.

4. Neglect of Textile Sector: The text highlights the neglect of the cotton textile sector,
which had export potential. It suggests that political factors and the Gandhian legacy
influenced this neglect, as emphasis on textile exports would have favored specific regional
industrialists at the expense of others.

5. Analytical Significance of the Strategy: The text argues that despite its shortcomings, the
Indian development strategy had analytical significance. It emphasizes the importance of
understanding how the relationship between various industrial sectors evolves over time for
economic growth in developing economies.

6. Consumer Goods and Force Analysis: The text points out two key limitations in the
Indian planning exercise. First, it identifies an optimistic treatment of prime consumer goods
like food. Second, it critiques the lack of a realistic discussion on 'force analysis,' or how to
obtain resources for public investment while promoting private income growth.

7. Achievements and Failures of Early Plans: The text acknowledges both achievements
and failures of the first three five-year plans. Achievements include diversification within the
industrial structure, skill development, and improved agricultural productivity through
increased irrigation. Failures include underestimation of import intensity in import
substitution and the incomplete agrarian transition.

Overall, this section provides a detailed analysis of India's development strategy, including its
historical context, economic debates, financing patterns, and the challenges it faced during its
early implementation. It underscores the complexities and trade-offs involved in planning for
a developing economy.

In this text, the vicissitudes in India's development strategy from 1950 to 1965 are discussed,
with a focus on the first three five-year plans. Here's a detailed summary of the key points:

1.Introduction of the First Three Five-Year Plans: The text starts by noting that the first
three five-year plans of India are distinct and spanned from 1950 to 1965. Jawaharlal Nehru
actively chaired the formulation of these plans, highlighting their significance.
2. First Five-Year Plan: The First Plan is described as not being a comprehensive plan but
rather a modest attempt with a 12% targeted increase in national income. Its success was
attributed to increased food grain production due to public irrigation.

3. Emergence of Nehru-Mahalanobis Strategy: The Second Five-Year Plan marked a

significant shift in India's development strategy, termed the Nehru-Mahalanobis strategy of
industrialization. It aimed to forge strong industrial linkages, both backward and forward.
Industrial production growth during this period was impressive.

4. Growth in Industrial Production: The text highlights the impressive growth of industrial
production during the Second Five-Year Plan, particularly in sectors like machinery, iron and
steel, and chemicals. However, cotton textiles showed limited growth.

5. Importance of Agriculture: The Third Five-Year Plan acknowledged the importance of

agriculture as a priority sector. This marked a departure from the Second Plan's heavy focus
on industrialization, recognizing the need for a balanced approach.

6. Relative De-emphasis on Agriculture: There's a mention of a relative de-emphasis on

agriculture during the Second Plan in terms of investment allocation ratios, which led to
claims of urban bias in development planning.

7. Agricultural Strategy: Indian planners believed that during the early stages of
industrialization, agriculture should provide cheap labor and food for the industrial sector,
helping maintain low industrial wages. This logic was based on the assumption that a low
product wage would lead to higher accumulation.

8. Challenges and Responses: The text highlights the challenges faced by planners due to
underestimation of production time lags in industry and the need for shifts in traditional
agriculture. The response included large-scale imports of food grains and efforts to maintain a
low price increase.

9. Exogenous Shocks: Two exogenous shocks, increased defense spending and successive
monsoon failures in 1965 and 1967, disrupted economic growth. These events led to changes
in agricultural strategy.

10. Shift to Annual Plans: In response to these shocks, India shifted from five-year plans to
annual plans, reducing the budget for development efforts. This change revealed weaknesses
in financial feasibility assumptions.

11. Kalecki's Proposals: Economist Kalecki's proposals about the relationship between the
rate of national income growth and the supply of necessities gained significance, emphasizing
the importance of maintaining a "cheap food regime" for growth.

12. New Agricultural Policy: To address agricultural stagnation, a new agricultural

development strategy was formulated, focusing on technological modernization and "betting
on the strong" to boost production. Land reform was de-emphasized.

13. Influence of U.S. Policies: The text hints at U.S. influence in shaping India's policy by
withholding grain shipments until certain policy changes were made.
This text provides a detailed overview of the development strategies, shifts, and challenges
faced by India during the first three five-year plans, shedding light on the evolution of its
economic policies during this period.

Continuing from the previous summary, this text further elaborates on the changes in India's
agricultural strategy and its distributional implications:

1. Shift in Agricultural Strategy: The text discusses several key changes in India's
agricultural strategy, particularly related to the Green Revolution:
- A shift from major to minor irrigation works, favoring small tube wells and energized pump
sets.
- Provision of credit, primarily to large farmers.
- An increase in the use of fertilizers and commercial energy sources, like electricity and
diesel oil.
- Development of fertilizer-sensitive crop varieties.

2. Impact of Green Revolution on Wheat: The Green Revolution had a significant positive
effect on wheat production. However, its impact on other crops and regions was less
pronounced, particularly in areas lacking infrastructure and irrigation.

3. Social Effects of Green Revolution: The text acknowledges the debates about the social
effects of the Green Revolution, which led to polemical and contradictory literature. It hints
at irreversible changes in the Indian economy due to this revolution, which pose challenges
for future planning.

4. Changes in Agriculture-Industry Linkages: The Green Revolution led to stronger two-

way linkages between agriculture and industry. This shift made the traditional input-output
matrix less relevant, emphasizing the need for flows from industry to agriculture.

5. Monetization of Agriculture: The monetization of agriculture increased significantly as

more output was exchanged for money.

6. Price-Support Policy: The introduction of a price-support policy, initially for wheat and
later for other crops, introduced downward price rigidity in agriculture, making prices a part
of the political process rather than just a function of supply and demand.

7. Energy and Fertilizer Sensitivity: Increased use of energy and oil-based fertilizers in
agriculture not only changed the capital-output ratio but also made agriculture more sensitive
to fluctuations in the world market, particularly oil prices. This introduced new vulnerabilities
to the Indian agricultural sector.

8. Mechanization and Labor: The text discusses the perception of mechanization and its
impact on labor in agriculture. While certain types of capital goods, like pump sets, increased,
it did not lead to substantial labor displacement.

9. Income Distribution: The Green Revolution led to changes in income distribution, with
greater benefits going to better-off farmers in regions with better infrastructure. This resulted
in increased polarization within the rural population.
10. Distributional Considerations in Planning: The text clarifies that distributional issues
were not entirely ignored in Indian planning, especially in the Second and Third Five-Year
Plans. Land redistribution and reducing income disparities were mentioned as policy
objectives.

11. Distributional Challenges in Models: The text explains that the distributional issues in
Indian planning models were often qualitative and vague due to the dominant model of
"accumulation + consumption = production," which did not adequately address inequalities.

12. Role of Education: Mahalanobis emphasized the role of education as an equalizing force
but operated within the same rigid model assumptions.

This text delves into the changes brought about by the Green Revolution in Indian
agriculture, the distributional implications of these changes, and the challenges posed to the
existing economic models. It also sheds light on how distributional considerations were
present but not fully addressed in planning documents.

The text you provided delves into the vicissitudes in the career of a specific economic
strategy, with a particular focus on India's planning process. Let's break down and explain the
key points and facts highlighted in the text:

1. Introduction: The text starts by discussing the distribution of consumption and capital
stock in an economic context. It mentions the Nurkse-Kahn point, labor productivity, and the
importance of the time needed to equip the economy with capital.

2. Trickle-Down' Strategy : The text explores whether the strategy being discussed can be
categorized as a 'trickle-down' strategy. It concludes that it's both 'yes' and 'no,' as it promises
improved consumption but doesn't target specific income groups.

3. Public Sector Growth : The strategy includes a sharp increase in the size of the public
sector, mainly financed by taxation. The idea is that this would socialize a greater proportion
of income through increased production and productivity.

4. Challenges in Implementation : Implementing this strategy in India's mixed economy

was challenging. The initial unequal distribution of income-yielding assets, such as land,
posed difficulties for redistribution. High marginal tax rates on non-agricultural incomes did
not yield the expected results.

5. Minimum Level of Living : A working group, chaired by Pitambar Pant, was established
to examine whether planning had improved living standards. They recommended
distinguishing between public and private consumption and set a minimum level of living.

6. Pant's Document : Pitambar Pant's document in 1962 worked out possibilities for
achieving the minimum living standard. It concluded that some degree of income inequality
was essential and suggested a 7% annual growth rate to achieve this standard.

7. Green Revolution : The text mentions the Green Revolution in agriculture, which led to
significant increases in grain production, especially in wheat. This increased production
raised concerns about demand bottlenecks and the need for redistribution.
8. Change in Strategy : As concerns grew about demand bottlenecks, a shift towards a
growth strategy with an emphasis on redistribution emerged. The "redistribution with
growth" strategy was introduced.

9. Approach to the Fifth Five-Year Plan : The Approach document for the Fifth Five-Year
Plan aimed to eliminate poverty by redistributing wealth. It defined poverty in terms of
nutritional inadequacy and explicitly set redistribution for the lowest three deciles as an
objective.

10. Modeling Growth with Redistribution : The text explains the modeling process used to
determine the rate and pattern of growth required to raise the consumption level of the
poorest deciles. It involved constructing macro models and inter-industry analysis.

11. Supply Constraints : The model revealed that agriculture and energy were critical
sectors for meeting basic needs. Food and fuel emerged as leading sectors due to their
capacity to meet demand.

12. Weaknesses in the Model : The model lacked a formal description of the relationship
between production and income distribution. It didn't solve for incremental income flow by
size classes.

13. Poverty Eradication Measures : The text briefly mentions poverty eradication measures
introduced in the Sixth Five-Year Plan, including rural employment programs and self-
employment initiatives aimed at improving small and marginal farmers' productivity.

14. Challenges and Future Measures : The text concludes by discussing the challenges of
implementing redistributive policies within India's mixed economy and the importance of
various programs, including education, health, nutrition, and population control.

Overall, the text provides a detailed exploration of the economic strategy, its challenges, and
the considerations in addressing poverty and inequality in India's economic planning.

Ans.
The text you provided offers a comprehensive overview of India's development strategy, with
a particular focus on the Nehru-Mahalanobis approach, and it also touches upon key
economic debates and shifts in strategy during the mid-twentieth century. Here's an in-depth
answer on "Green Revolution and Entitlements" based on the information provided in the
text:

**Green Revolution and Entitlements in India's Development Strategy**

India's development strategy during the mid-twentieth century, particularly under the Nehru-
Mahalanobis approach, underwent significant transformations. One of the pivotal phases of
this transformation was the introduction of the Green Revolution and the emergence of
discussions around entitlements.

**Historical Context and Nehru-Mahalanobis Approach**

In the backdrop of India's post-independence landscape, the Nehru-Mahalanobis approach
was a prominent feature of India's development strategy. Jawaharlal Nehru's leadership and
alignment with Fabian socialism played a significant role in shaping this approach. The
National Planning Committee's interventionist economic philosophy and the formulation of
the first three five-year plans marked critical moments in India's economic thinking.

Structural Constraints and Industrialization

Indian planners faced numerous structural constraints during this period. The deficiency of
material capital, low savings capacity, and the need for productive investment were pressing
issues. This led to a preference for industrialization over agriculture, with a focus on public
investment to balance supply and demand.

Soviet Influence and Pressure Groups

The influence of Soviet planning models on India's development strategy cannot be

understated. The homology between the Soviet and Indian situations was notable. However,
it's crucial to recognize the presence of powerful pressure groups in Indian society, which
exerted their influence on the development model.

Financial Challenges and Mixed Economy Framework

India's mid-fifties development model resembled the Lewis model, emphasizing the two-
sector disaggregation and the active role of the state. However, the mixed economy
framework presented financial challenges. Reinvested profits were deemed vital for driving
growth.

Introduction of the First Three Five-Year Plans

The first three five-year plans spanned from 1950 to 1965 and played a critical role in
shaping India's development strategy. Nehru actively chaired the formulation of these plans,
underlining their significance.

First Five-Year Plan and Modest Goals

The First Plan was a modest attempt with a targeted increase in national income. Its success
was attributed to increased food grain production, primarily due to public irrigation efforts.

Emergence of Nehru-Mahalanobis Strategy

The Second Five-Year Plan marked a significant shift towards the Nehru-Mahalanobis
strategy of industrialization. It aimed to build strong industrial linkages, both backward and
forward, and witnessed impressive industrial production growth.

Growth in Industrial Production

Notably, during the Second Plan, industrial production, especially in sectors like machinery,
iron and steel, and chemicals, saw substantial growth. However, cotton textiles lagged
behind.
Importance of Agriculture and Relative De-emphasis

The Third Five-Year Plan acknowledged the importance of agriculture as a priority sector.
This marked a shift from the Second Plan's heavy industrial focus, although critics argued
about relative de-emphasis on agriculture in terms of investment allocation ratios, hinting at
urban bias.

Agricultural Strategy and Challenges

Indian planners believed that agriculture should provide cheap labor and food for the
industrial sector during early industrialization. However, challenges arose due to
underestimation of production time lags and the need for shifts in traditional agriculture.

Exogenous Shocks and Shift to Annual Plans

Exogenous shocks, including increased defense spending and monsoon failures in the mid-
1960s, disrupted economic growth. India shifted from five-year plans to annual plans in
response, revealing weaknesses in financial feasibility assumptions.

Kalecki's Proposals and New Agricultural Policy

Economist Kalecki's proposals on the relationship between national income growth and
necessities emphasized the importance of maintaining a "cheap food regime" for growth. A
new agricultural development strategy focused on technological modernization emerged, with
less emphasis on land reform.

Influence of U.S. Policies

The text hints at U.S. influence in shaping India's policy, particularly regarding grain
shipments and policy changes.

Green Revolution and Its Impact

The Green Revolution had a significant impact on Indian agriculture, particularly in

increasing wheat production. However, its effects on other crops and regions were varied,
depending on infrastructure and irrigation availability.

Social Effects and Income Distribution

The Green Revolution triggered debates about its social effects. While it boosted production,
it also raised concerns about income distribution. Benefits primarily went to better-off
farmers with better infrastructure, leading to increased rural polarization.

Monetization, Price-Support Policy, and Mechanization

The Green Revolution increased monetization in agriculture. The introduction of price-

support policies added price rigidity to agriculture. Mechanization, though present, did not
significantly displace labor.

Distributional Considerations and Models

While distributional issues were not entirely ignored, they often lacked specificity in planning
models. The dominant model's limitations, based on "accumulation + consumption =
production," hindered addressing inequalities.

Role of Education and Challenges

Mahalanobis emphasized education as an equalizing force, but it operated within rigid model
assumptions. Implementing redistributive policies in India's mixed economy presented
significant challenges.

Conclusion

In conclusion, India's development strategy during the mid-twentieth century, characterized

by the Nehru-Mahalanobis approach and the introduction of the Green Revolution, evolved in
response to various challenges and opportunities. It witnessed shifts in focus, debates on
income distribution, and attempts to balance industrialization with agriculture. Understanding
these historical developments is crucial for comprehending India's economic trajectory during
this period and the complexities of planning for a developing economy.

Structural demand argument for understanding the decline in Industry -

Sudip Chaudhuri