R Srivatsan A History of Development Thought For Routledge India

R Srivatsan Dev Reader Introduction 11/20/2022 7
INTRODUCTION
The idea of development has provided a framework for thinking about, planning,
administering and critically evaluating governmental measures in India during the past
six decades. This framework and the perspective that comes with it are embedded in a
widely shared vision of the present and its potential relation to a desired future.
Development is, in Jawaharlal Nehru’s immortal words, “our tryst with destiny”. Indeed
it is commonly believed that the duty to develop is the most authentic spirit within us as a
nation, driving us forward in history. In following this call to develop, the nation state
undertakes strategies of development that have arisen under the historical compulsions of
becoming independent in the wake of retreating colonial domination. These strategies,
and their underlying objectives have changed in the period under study, and mapping this
is one of the difficulties of an introduction such as this one. On the one hand, the
administration of development based on these goals (change notwithstanding) has quite
often led to state oppression and forms of injustice that have become increasingly the
focus of peoples’ struggles. On the other hand, the promise of development to provide
for the well being of the people is seen to become more and more an exercise of
improving statistical indicators of development while often evading the problems faced
by people on the ground.
I: What is development?
The usual way of answering this question is to say that the word ‘development’
can mean both a measure of a condition, and of a process, of ‘modernization’ of a nation
state. E.g., How do the indicators of India’s (condition or level of) development compare
with those of the Western nations? Or, what are the processes of development India has
set in motion in order to achieve the goal of becoming a modern nation state that
measures up to the West? There are two effects that are built into these ways of
answering the question as if it were an objective condition, or a practical process. First, it
is implicitly assumed that modernization is Westernization – the West becomes a natural
norm for our development. Second, it is also implicitly accepted, uncritically, that
development as a unified whole, is already ‘in process’; it is a good thing, and must
continue to occur. Either one or both these normative assumptions characterize much
development theory written till date. It is also true that there are schools of activism and
protest that (e.g., drawing on Gandhian thought,) accept that development is taking place,
that Westernization occurs, and oppose both on the grounds that they have serious,
undesirable consequences. I would like to bracket out these normative assumptions, not
necessarily in order to reject them, but to look more closely at the mechanics of their
functioning.
Towards this end, I would like to suggest that development be seen as a coherent
and rational system of thinking about, theorizing and acting on (and by) nation states
classified as underdeveloped; a categorization which is the inferior of the binary pair,
developed/underdeveloped.1 Analogous binary pairs for these terms are,
1
In what follows, the reader with background will recognize that I am taking this broad thesis
from Arturo Escobar’s path breaking exploration in Encountering Development: The Making and
Unmaking of the Third World, (Princeton: Princeton University Press, 1995). I am using the term ‘system
modern/backward, advanced/primitive, rich/poor, First World/Third World, North/South.

As elaborated in this introduction, this system of classification ‘developed/
underdeveloped’ is relatively new and comes into being after World War Two. There are
two complications to this proposition: First, there are precursors and processes leading to
this classification through the twentieth century in both the international and the Indian
context, which I will discuss in some detail in sections four and five of this introduction.
Second, as section two and three will suggest, there are also historical changes after the
1950s, both subtle and massive, in the concept of development. These give rise to
consequent changes in the goals and strategies in the domains of both international
relations and the planning and administration within nation states. In section two, I will
also argue that these changes have implications for ordinary people confronted by
governmental plans and their implementation. Section six concludes with an argument
about implications for theory.
Development as a system of thought perceives, analyses and evaluates a given
nation state through a framework of specific concepts, resulting in plans and actions of
government. This framework draws on the idea that poorer, more backward,
underdeveloped nations can and will, with expertise, administration, initiative, and help
from the West, make the economic transition to become modern, developed nations (See
Figure 1). The interplay of these concepts as they result in policy measures to be
implemented, and the effects of this implementation in the social field, give rise to
analyses, criticism, alternatives and struggle. It is possible to examine some aspects of
this conceptual interplay and the effects of policy implementation as a set of dilemmas,
impasses and critical junctures.
Insert Figure 1 here.

Growth versus Equity
The classical dilemma of the development debate in the domain of economic
policy has been between growth and equity. The problem is seen as being due to the
cluster of factors that characterize an underdeveloped economy. The level of
industrialization is low because the capital investment is low. The existence of few
industries and these of small size is seen to translate into very low employment levels,
individual poverty, ill health, high mortality and illiteracy rates, overpopulation,
starvation and poor living conditions. This in turn leads to a very poor level of
consumption and a weak market structure, limiting the off take and demand for industrial
production. The poor market volume has two concomitant features – one, people meet
their needs through their own labour and production outside the market economy,
classically called subsistence labour; and two, the low levels of consumption, purchasing
power and wages translate into a very low taxation base for government expenditure.
Thus, the state, which is the agency for development has very little money to spend. The
question then arises, how does the state decide to distribute its meager resources? Does it
of thought’ according to Michel Foucault’s conceptualization of a broad discursive/practical formation that

shapes the thinking and theorizing of a discipline in a given period. Many of Foucault’s early studies have
been studies of systems of thought – e.g., Madness and Civilisation, The Order of Things. The idea of a
system of thought here permits us to bypass submission to the normative framework of development
thinking, both in accepting the norm, and in rejecting it.
spend on capital investment to ensure growth of the industrial sector to generate wealth,
reinvestment, employment and well being? Or does it spend on people’s welfare and
redistribute money to ensure equity, seen as a chance for people to become capable of
earning a good living through better health, education, nutrition, and homes? This is the
point of entry for the idea of national planning in general, and the Five Year plans in
India.
Important variants of Marxism see this somewhat benign, liberal
description of an underdeveloped economy in a different perspective. The problem
according to this analysis is that growth is low because the ruling aristocracy has neither
the financial capability for, nor a stake in, development. Their culture of ostentation and
affirmation of status has no need to provide goods for a commodity market targeting
ordinary consumers, and thus production is distorted to meet luxury consumption only.
Hence it is argued that it is not possible to think about development as a simple matter of
doing the right thing – there are social forces that keep the economy underdeveloped.
Thus, the forces that determine growth and equity are dynamic and dependent on
historical factors, specifically the hegemony and political strength of the industrial
classes, which are by definition, weak in an underdeveloped nation.
Development: Supervised and hierarchical, or organic?

The administrative facet of development gives rise to another dilemma in the
structure of the development intervention. As I will argue in detail in the coming
sections, development is essentially seen as a supervised process where the state
machinery, operated by the ruling elite, undertakes the responsibility of changing the
economic conduct of the nation and its economy. In India, for instance, the development
process, as we know it since the 1950s, is planned every five years and implemented in
discrete steps. The critical weakness of supervised planning and development is that an
elite corps of technocratic experts and planners has to think on behalf of the nation and its
future. The perspective is from a commanding height, taking into the picture the whole
economy and the well being of the nation. There are three difficulties that are seen to
arise from this: one, there is too much power concentrated in the hands of the planners
and administrators, who become nothing less than gods deciding what to sacrifice for the
greater good of the nation as a whole. The governed have little say in what has and has
not to be done in the name of development. They have even less to say about what they
will be asked to sacrifice in the name of the future. Two, the corps of the governing elite,
in the Indian context is the preserve of the culturally dominant castes in India, which have
a head start of several generations in formal education and bureaucratic employment.
Coupled with the great power of the state apparatus, this cultural hegemony of the elite
castes determines the character, perceptions, actions and blind spots of the government.
Three, there is a high possibility of error in the planning and implementing process,
which, in practice, has little scope to effectively use feedback from the ground. Indeed,
since planning is a discrete step that begins the periodic development cycle, there is very
little chance to engage with the practical responses and problems that arise during
implementation.
As opposed to this model of top-down, supervised development the conceptual
alternative is an organic model of development. Here, the ideal is that the process of
development occurs on the ground, in small organic changes in the structure of society.
Large-scale transformation is the result of these ‘natural’ molecular changes. This model
of development as a diffused, and seemingly benign, internal process is favoured by
many activist groups opposed to planned top-down administration. However, it is also
possible to suggest that a version of the organic model of development lies at the root of
liberal economic thought. Liberalism attacks planning as something that interferes with
the efficiency of what may be described as organic development of the market system,
which latter comes from actions of self-interested, rights bearing individual citizens in the
economy and in civil society. The implication of such a criticism is that planning be
entirely abdicated in favour of market forces. The path from the excessively centralized
power of planning thus is fraught with the possibility of market fundamentalism and its
own brand of excess. It is increasingly evident in the twenty-first century that this kind
of excess is aggravated in the skewed social formation in India between those who
operate in the civil societal mode of rights bearing citizens, and the large majority who
operate without that privilege (constituting what Partha Chatterjee terms ‘political
society’). The concluding section of this introduction explores an organic model of
development that does not reduce to a version of neoliberalism.
Industrial modernization, political stability and democracy

When development economics of the liberal mould began as a discipline in the
1950s, it was routinely assumed that industrial modernization would lead to a strong
democracy through the development of organized labour, political association and active
participation in civil society. The model was also a means to ensure that Third World
markets were open to the presence and profit of First World businesses. However, by the
1970s, many developing nations began to exhibit signs that were interpreted as political
instability – on the one hand, within themselves due to unrest and struggles. On the other
hand, perhaps more importantly, developing nations that began to take stances that
opposed the advanced Western economies, and especially the latter’s investment in the
former, were also interpreted as being politically volatile. At the heart of these crises was
the failure of the liberal model of development to serve as the hegemonic basis for the
spread and penetration of First World capitalism. Several explanations were given in the
1980s for this observation, some drawing on the notion of cultural atavism, others on the
idea that these were ‘revolutions of rising expectations’, and yet others on the basis of
fundamental civilizational differences, etc., ultimately throwing the basic assumptions of
development theory in doubt.
An important criticism (one I subscribe to in this introduction) of this conceptual
cluster of modernization-civil society-democracy comes from recent political thinking in
India. The argument here is that industrial modernization depends on a very different
kind of work discipline than a peasant and artisanal culture. As a concomitant to this
industrial need for a specific kind of work discipline, there is also however, the
democratic expectation of steady industrial employment and a more dignified life, both of
which continue to draw millions of children into schools and colleges. The impasse is
that, often, the call for industrial growth does not deliver on the promise of better
employment through that growth. Thus, on the one hand, the shifting and ever
strengthening priorities of growth do not have a space for increased employment. On the
other hand, growth does involve a command decision to sequester resources (land, water,
access) that were once available to the ordinary populations residing in the given area.
From this perspective, industrial modernization demands a level of institutionalized

power that, in the historical context of the individual and community structure, is
coercive, and thus often runs up against the principles of democracy. This disconnection
between the plans of the ruling elite and the aspirations of the ruled populations, coupled
with the coercive authority of the former in command of the state machinery is the likely
reason why many modernizing nations become dictatorships. In the Indian context, with
the strengthening roots of the electoral process, the characteristic elite impatience for a
quicker pace for development is quenched, or at least tempered, periodically by the
demands of increasingly sharpened political representation of democratic aspirations.
One complex event that marks the beginning of this process of democratic contestation is
the dismantling of the Emergency regime in the 1970s by a popular vote against the
ruling Congress party.
Neoliberalism
With the arrival of liberalization and structural adjustment in the early 1990s the
neoliberal critique of development planning that begins in the 1970s comes of age in
India.2 The focus on planned industrial growth is subjected to a two pronged attack: one,
growth must be set free from state control – liberated from the errors of planning that
cripples the efficiency of market forces in determining consumer demands and thus
dictating the pattern of growth. Coupled with this, the state’s license regime for the
private sector must be dismantled to reduce the expense of a vast administrative
mechanism and to cut down the level of corruption inherent in the issue of licenses –
again going against the market signals of demand and patterns of growth. Expenses in
the welfare sector must be trimmed and made efficient by targeting specific populations
to minimize broadcast dole and its effect of making people reluctant to work for a living.
Welfare must be implemented through market or non-state mechanisms as far as possible
to ensure that welfare too becomes an instrument of growth, without the risk of a
ballooning bureaucracy. At the same time, the focus on planning for the expansion of
employment must be abandoned to ensure that jobs are generated according to market
demand, thus reducing the excessive labour burden of the public sector industries and
making them accountable to the market, ultimately making them competitive and
privatizing them. Private enterprise must be unleashed and given full support as the
primary engine of growth. At the same time, protection for indigenous industries must be
removed, providing access for international investment, and guarantees must be provided
for their safe and adequate return with the highest priority through ensuring both returns
and the stability of exchange rates. The state’s budget must be balanced to secure long-
term health and financial strength.
The effects of these some of these critical interventions in the development
discourse and consequent policy measures on the ground in the twenty-first century are
best studied in relation to a concrete example, the institution of special economic zones,
and I will do so in the following section.
2
The 1970s beginnings of neoliberalism’s critique of development planning on the one hand, and
extensive welfare state commitments on the other, across the world, is a subject that is beyond the scope of
this volume. However, this introduction and some of the extracts that follow indicate the strengthening of
the critical perspective of neoliberalism through the seventies and eighties.
II: Special Economic Zones

Special economic zones (SEZs) in India are a good entry point to examine some
of the issues in the development debate in the era of neoliberalism. SEZs are enclaves of
relative economic and political autonomy in which development is promoted at an
accelerated pace. The idea is that by providing such territorial enclaves that are relatively
insulated from taxation and industrial laws, it is possible to stimulate fast growth of the
economy through private investment. While SEZs have at least a forty-year history in
this country (in different export promotion zones in Gujarat and Maharashtra for
instance) the key move was the passing of the SEZ Act in Parliament in 2005. The
argument for the SEZ Act is as follows. Kamal Nath, the Minister for Commerce and
Industries who piloted the legislation promised that exports would increase five fold,
Gross Domestic Product will grow by 2%, and employment will be provided to an
additional thirty-lakh people. The enactment has led to 237 SEZs being approved in 19
states occupying about 86000 hectares. The ministry for commerce and industry hopes
that there will be about 500 SEZs in the future covering a total of 150000 hectares, equal
in area approximately to the National Capital Region (in and around Delhi). This is an
extremely large number of special economic zones to be created by one country. So far
the reports about the economic performance of the SEZs are mixed when measured
against the promise. However, the issue is not related to their success but to their effects
on the people in the earmarked area.
A major problem is that of displacement of people who originally lived in the area
designated for the SEZs. The government promises rehabilitation, but in the history of
independent India, rehabilitation of people displaced for large modernization projects has
had little success. It has been argued that the land allocated to the SEZs will be barren
wasteland that will be put to good use for industry. The first difficulty is that some SEZs
(notably the one earmarked for chemical industry in Nandigram, the focus of an intense
battle) are on fertile land, from which peasants have to be evicted.3 The second
difficulty, it has been argued, is that there is really no ‘barren wasteland’ in the country.4
In a country that is as impoverished as India, people use every acre of accessible land in
diverse ways to eke an existence. In addition, this process of marking a zone for the SEZ
is not by any means as neutral as it seems in the final document. The zone is carefully
determined to maximize the value of existing elite landholdings while appropriating
surrounding land from the less well to do. This has led to the perpetration of massive
land scams through the process of establishing SEZs.5 Critics also allege that through
the SEZ Act, the land ceiling act in particular and the commitment to land reform in
general, have been completely reversed. Instead of giving land to the tiller and enforcing
a cap on private ownership as originally envisaged at the turn of independence, vast tracts
of land are being handed over to industrial houses in the name of development.
Displacement results in the loss of a source of income that has been acquired and
harnessed by the marginalized under harsh survival conditions over generations. The
3
A CP (M) Supporter, “Reflections in the Aftermath of Nandigram”, EPW, May 5, 2007, pp 1594-
7
4
K. Balagopal, “Land Unrest in Andhra Pradesh II: Impact of Grants to Industries”, EPW,
September 29, 2007, pp 3906-11
5
V. Ratna Reddy & B. Suresh Reddy, “Land Alienation and Local Communities: Case Studies in
Hyderabad and Secunderabad”, EPW, August 4, 2007, pp 3233-40.
condition of the small farmer and the farm labourer displaced from the least productive
lands is bad because economic forces have already pushed them to the brink of survival.
The compensation they may get for ‘bad’ land, dubious though the history of
compensation too is, will be simply inadequate to permit them to resettle themselves at
the level of existence they have struggled over generations to establish. Farm labourers
who have no land of their own will get no compensation. The condition of tribals in the
hill areas, left untouched by plains farming techniques is the worst of all. In the mining
SEZs in the forest tribal areas, the industry systematically destroys both the forest
environment and the source of livelihood of the tribals. On the other hand, the promise of
employment in SEZs, when looked at in detail, is illusory. In actual fact the industries
that come up are rarely if ever labour intensive, and in addition, the more ‘backward’ the
region in which the zone is located, the less suitable the people are found to be as labour
for the industrial activities proposed in that zone. Over 10 lakh people will ultimately be
dispossessed by the SEZs.
It has therefore been argued from a Marxist perspective that SEZs are simply a
continuing turn in the saga of dispossession and primitive accumulation that is part of the
story of capital.6 Marxist theory argues that at the beginning of the capitalist epoch, large
populations are brutally dispossessed of their means of subsistence and thrown at the
mercy of the labour market. This expropriation of people and the sequestering of
resources that form the pre-capitalist basis of subsistence is called primitive
accumulation. After this phase, exploitation is carried out under the laws of the labour
market that govern the conduct of the ‘free’ labourer. According to this argument,
historically mature capitalism absorbs the labourer into the market economy through the
purchase of his labour for a wage. This absorption will result in the transition of the pre-
modern system of coercive exploitation to modern wage labour where each worker is
theoretically and practically reduced to an identical unit of abstract labour power. The
shared oppression of universal wage labour under capital then forms the experiential
basis for a revolutionary consciousness that would usher in the more egalitarian form of
communism. Thus, the Marxist version of development has a more complex, dialectical
narrative of transition that sees bourgeois capitalism as one stage in the longer historical
process of development. This story of course has fallen into ideological disrepute after
the collapse of the Soviet Union in the early 1990s.
Kalyan Sanyal has argued that the narrative of transition according to which an
underdeveloped economy becomes modern, is a false one.7 He argues that modern
capital systematically reproduces primitive accumulation and immiseration at its margins
as part of a perennial systemic feature that is not limited to the pre-history of capital.8
Briefly speaking, the idea of the margin here refers to the European colonies that, after
decolonization, became nations of that part of the world known as the periphery, as
opposed to the core or centre, constituted by the Western world. The margin also has
strong echoes referring to the non-Caucasian races, and in India, the ‘lower’ castes and
6
Swapna Banerjee-Guha, “Space Relations of Capital and Significance of New Economic
Enclaves: SEZs in India” EPW, November 22, 2008, p 58. Banerjee-Guha refers to the work of Utsa
Patnaik on this issue.
7
See Rethinking Capitalist Development. Also see Partha Chatterjee, “Democracy and Economic
Transformation” EPW April 19th 2008, pp 54-62, especially p 55.
8
Other thinkers like Ernest Mandel and David Harvey have also argued that primitive
accumulation is a continuing process in an uneven global economic system.
tribes who are seen to exist at the periphery of the developmental process. These
marginalized populations, who are dispossessed through primitive accumulation, are not
absorbed into the modern economy through the labour market. However, given the
political and ethical imperatives of international development thinking, they cannot be
allowed to perish.9 They are instead given minimal means of survival through a system
of governmental welfare that has geared itself over the last three decades to the
sustenance of the marginalized by means of self-help groups, micro-finance, literacy and
health programmes. Such populations establish an extended parallel informal economy
to survive outside the sphere of organized corporate capitalism. Sanyal’s analysis of
corporate capitalism in its contemporary form is a radical departure from the Marxist one
in suggesting that capitalism does not bring about the transition to a universal modernity
attributed to its dynamism in received social theory. It is no longer the powerful agent of
change leading to a life of equality and dignity, distributing the benefits of advanced
technological culture through ownership or wage labour. Seen from this perspective,
those displaced by the SEZs with inadequate compensation and prejudiced mechanisms
of administration are the rejects of the development process, where the compensatory
state mechanism to alleviate the suffering of the dispossessed is not fully at work. In
theory each project is designed to provide compensation so that the displaced people at
least don’t lose their current social and economic status in the process. However, in
practice, the project degenerates more or less inevitably and unmistakably into a form of
coercive utilitarianism through which the original inhabitants are simply expropriated in
the name of the greatest good of the people of the nation.
While we have taken the specific case of the SEZs as a concrete example, similar
questions arise in development projects such as large dams, mining, atomic energy,
airports, roads, railways etc. At stake is what Partha Chatterjee has termed the principle
of eminent domain, through which the state holds the right to take property from any
person who may even be using it for personal profit, for the purposes of the general
good.10 In Western liberal theory and legal history, the state’s right of eminent domain
has been contested by the notion of an individual’s fundamental right to property that is
seen as being conceptually prior to the state’s existence. 11 In the United States of
America, the ambiguous and unstable result of this contestation in the long term has been
affirmation of eminent domain, so long as it is held in check by a) the state’s fundamental
duty to ensure due process in the taking of property and b) the right to adequate
compensation. In the Indian context, the constitutional amendment to annul the right to
property in 1978 is a sign of the state’s assertion of the principle of eminent domain, with
different resonances and overtones. In neoliberal India of the twenty-first century, which
is the context within which the SEZs have come into full fledged existence, the
9
See section 6 of this introduction for a brief account of the history of the ethical imperatives that
emerge after World War Two in relation to postcolonial nation states.
10
See Partha Chatterjee, “Democracy and Economic Transformation in India”. The term eminent
domain, used in the United States is paralleled by the terms, “resumption”, “compulsory
acquisition/purchase” or “expropriation” in other Western countries.
11
This is the classical version of the theory of social contract according to Hobbes, where
individuals owning property come together and establish the state as a covenant for their security. See N.
Mercuro and W.J. Samuels, eds., The Fundamental Interrelationships between Property and Government,
(Stamford, CT: JAI Publishers, 1999), especially the paper R. Adelstein, “The Origins of Property and the
Powers of Government” for a discussion of the nineteenth century positions on eminent domain.
government ‘seizes’ land that may or may not be owned, but is traditionally used by the
poor and the marginalized, in order to allocate it to private industry in the name of growth
and development. Here, the property appropriated is not that belonging to members of
civil society acting in self-interest, but is that used by individuals in political society in
different ways to eke a living outside the domain of corporate capital. This systematic
reallocation of land to private industry marks a new turn in the history of development in
India.
The eruption of SEZs after 2005 is likely to suggest that the disruption that they
will cause is not the result of planned development, but is the effect of a governmental
reorientation towards neoliberalism from 1991 onwards. While this may be true in some
respects, it is important to note that the tell tale signs of a structural orientation towards
growth at the cost of the well being of the marginalized were clear in development
planning and implementation in the period 1950 to 1990.
Section III: A conceptual overview of the extracts in the book

In this section, I examine briefly some of the debates in development theory after
World War Two, many of which have been excerpted in this volume. Each of the
debates highlights some of the complexities of the development project as a planned
transition to modernity.
Development theory emerges after World War Two as a specific subdiscipline of
economics. It is concerned with economic growth under the specific understanding and
configuration of underdevelopment described in the Figure 1 above. 12 The classical text
which sets out some of the primary concepts of development economics is W.A. Lewis,
“Economic Development with Unlimited Supplies of Labour”, where he proposes a
theoretical model of the economic transition in which an underdeveloped economy
becomes a developed one.13 The method is to encourage saving and investment by the
capitalist class so that industry grows, draws in employment from the subsistence
population and generates a self-perpetuating cycle of profit, further growth and
employment. Typically, the Lewis model proposes that the populations drawn into the
industrial sector from the subsistence sector would not benefit immediately in the
process. They would be employed at a marginally higher rate than they earned before
being absorbed in the industry, but over generations, as the economy modernizes, the
wage would rise.
At about the same time, Mahalanobis ‘four sector’ model addresses the concrete
question of how to plan for development and growth of the Indian economy. 14 The
division of the economy into four sectors permits the relative prioritization of investment
in heavy industry, consumer goods, agriculture and the service industry. In addition,
unlike the Lewis model, Mahalanobis’ explicit second goal is to ensure a specifically
planned growth of actual employment. He also envisages a degree of redistribution
12
The specificity of the configuration is important to understand how the growth models of
development economics differed for instance from the “Big Push” model proposed in the East European
context by Paul Rosenstein-Rodan.
13
Excerpted in this volume.
14
Excerpted in this volume. Mahalanobis’ model was the result of his critique of the then
dominant Harrod Domar single sector model of growth that was used up to that point by development
economists. He first developed a two sector model and then proposed his four sector model as an
improvement.
(welfare measures) through taxation to minimize the hardship of the transition to an

industrial economy. The primary goal is economic growth, and the decision to spend in
other sectors is tempered by this goal. More importantly, the decision to industrialize has
as its immediate corollary the decision on types of planned industries and public sector
projects and thence on questions of location and the appropriation of land for these.
Dams, power plants, fertilizer factories, nuclear power, mining, and steel projects, all
imply displacement.
Thus the problematic of displacement is already present in the idea of
development planning from its inception in India. It is indeed possible to consider
displacement as the metaphor, perhaps the real metaphor, of state driven planned
development and its administrative process in the way in which these affect ordinary
people’s lives. Through its promise and peremptory authority, development forces
change and migration, and more often than not, expropriation and plain misery. The
displacement is physical, involving migration, as well as psychic, involving the loss of
control and meaningfulness of people’s lives in their present ‘homing’ and the
rendezvous with the future. This displacement is an inseparable effect of a development
theory and concomitant governmental practice that treat populations and individuals as
abstract statistical objects and/or passive recipients of charity, who are a by product of
development, and require tending to.15
There was intense debate about development in the Latin American context
beginning around the year 1950. Raul Prebisch and Hans Singer had independently
argued based on observation of long-term trade data that countries exporting primary
products (raw materials, commodities, etc.) to the developed West tended to lose their
economic viability in the long run because the demand for and profitability of these
products was limited.16 Since these economies had to import manufactured products
against these exports, and because the import requirement of manufactures would rise
with growth, the balance of trade and profitability would tilt in favour of the advanced
nations, leading to a drain of wealth. This led to the thesis that to modernize, developing
economies would need a strategy of import substitution industrialization whereby
investment in and growth of local manufacturing industry would be promoted at a
priority. This realization was at the heart of Mahalanobis strategy of investing in heavy
industry in India. At the same time, the suggestion that a country’s trade relations in an
unequal global economy could result in the backwardness of its own economy was not
lost on the discipline.
From another direction, Paul Baran’s thesis in 1958 about the structure of a
backward economy, argued that the project of developing a country through a ‘wisely’
planned investment strategy would find it difficult to succeed because backwardness was
not a static condition.17 The negative reinforcement in the interrelation between
aristocracy, the army, the primitive bourgeoisie and the bureaucracy tended to actively
keep the economy in a backward condition. Hence backwardness was a trapped
economic state of poverty, sustained by the political power of reactionary social forces.
15
This preliminary description will be elaborated in section 5 that follows.
16
This is technically termed “inelasticity of demand”. A key text elaborating this analysis is Raul
Prebisch, The Economic Development of Latin America and its Principal Problems, (New York: United
Nations, 1950).
17
Drawing on Baran’s conceptualization of backwardness and on the insight about

imperialism’s exploitative economic relations between metropolitan (Western) nations
and the periphery (backward nations), Andre Gunder-Frank proposed the astonishing
argument that underdevelopment was not a passive condition, but was an active process
that was made to occur to a country.18 The argument in the Latin American context was
that development would go awry if it depended on modernization based on collaboration
with the capitalist West. The process of collaboration would drain critical growth
resources of the developing country, and this would make it permanently
underdeveloped. Thus both economic growth and people’s well being would be fatally
compromised. Immediate revolutionary action was the only way to avoid this fate.
The neo Marxist theorization to which Baran, Frank, Laclau and many others
contributed also raised another issue. Since Hegel, development originally meant an
organic growth from within society that would result in a qualitative change in its
character. This growth would result in the emergence a national will, that the state would
then enact and implement as the rational and institutionalized process of development.
The bureaucracy would be the vehicle of this will and institutionalization. In Marxist
theory the development of bourgeois capital was a complex organic transition from
feudalism in which the very character of the ruling and ruled classes changed
fundamentally. Development theorists like Lewis and Mahalanobis, however, focused
sharply on economic growth that would occur due to state intervention through planning
and modernization from above. Organic development and the overall transformation of
life and culture were seen as outcomes to be expected as the economy bootstrapped into
healthy functioning through incentives, support and infrastructure. This was the
viewpoint that resulted in the treatment of the governed as passive objects available for
deployment in the developmental effort and in some ultimate horizon beneficiaries of its
gains. With the Latin American theorists to a partial degree, and more so with the mode
of production debate in India that followed, the focus shifted back to the idea of an
organic development that transformed the character of society.
Thus the three extracts in this volume from the mode of production debate in
India in the 1970s, discuss the kind of organic change that takes place in the socio-
economic structure of Indian agriculture in the context of the Green Revolution: are there
signs that the capitalist farmer and agricultural wage labourer had taken the stage in place
of the old feudal landlord and the bonded labourer? The question is related to the notion
of economic transition: how effective is the strategy to develop, and what steps need to be
taken to make it effective on the ground? In the context of the mode of production
debate, this question was tied into the emerging divergence in analysis and reasoning
among the Marxist parties in India, a divergence related integrally to the formation of the
Marxist Leninist groups and the movement that began at Naxalbari in 1967. Marxist
Leninists have theorized that the mutually reinforcing relationship of economic and
political power between the landlord classes and the capitalists (as different from
opposition between the feudal lords and the bourgeoisie in the West), would only lead to
immiseration of the peasantry—thus the only way to develop would be to pursue a
revolutionary path against the state, landlord and capitalist. Some of the details and
contradictions of this argument come to light in the essays excerpted in this volume.
18
Marxist theory’s focus on an organic development that generates the fabric of

modern society remained to a large extent theoretical in its emphasis and logic. Its
descriptions of a progressive stage of development were based on what were seen as
scientific categories. For example, the category of the agricultural wage labourer
discussed at length in this volume, though sensitive to exploitation was logically rooted in
the economic model of the capitalist mode of production in agriculture. It had scant
relation to the experience of the agricultural worker in the multiple registers of caste and
class domination in the rural environment in India. This is not necessarily the case with
Marxist Leninist revolutionary practice, which is forced to deal with concrete questions
of difference in perspective and experience on a daily basis both on the ground, and in
debates with contending political positions. Marxist theoretical models, however, because
of their scientific form and also not less because of their statist perspective, have tended
to work with conceptual abstractions that had little relation to people’s lived experience
and needs. On the other hand, in communism in the U.S.S.R. following the revolution,
the centralized drive to accelerate growth in the 1920s led to the Soviet Five Year Plans
and development from above with large scale collectivization of agriculture and
industrial modernization. Though different in logic from the West’s model of top down
development offered to Third World nations after World War Two, it was in some ways
the latter’s precursor. That it also provided a model and support for top down paradigm
of development in India is evident in the fact that Mahalanobis’ four-sector model is seen
(though not acknowledged by him) as a successor of G.A. Feldman’s model for Soviet
planning in the late 1920s.
With the rise of feminism in the 1960s and the insight into the oppression of
women in almost all societies, economists began looking at the differential effects of
development on women. Ester Boserup’s classic study on women and development
outlined in detail the degeneration and loss of status of women in the economic and social
domains that result from the modernization and development programmes.19 Her
solution was to empower women through education and other social measures to help
them fight against gender discrimination and structural deprivation. What is important
about Boserup’s contribution is the differentiation of the population as conceptualized in
the classic development discourse into two different economic categories, men and
women. Such a perspective challenged the abstract notion of a ‘population’ that underlay
development theory in relation to Third World states by focusing on the degradation of
women in a developing economy. It complicated the idea of transition to modernity by
bringing to light the complex shift and reorganization of gender and power in the social
body. This differentiation provided the perspective to look at differential access to
economic amelioration in different population groups such as tribals, children, minorities
and the less privileged castes.
Feminists had other proposals (than education and empowerment) for a solution,
and an example of a Marxist perspective comes from Maria Mies work,20 which argued
that it was necessary to forge a link between women in advanced and developing
countries on the basis of a shared understanding of their invisible labour and structural
oppression in societies across the East-West divide. Only a consciousness of sisterhood
19
20
under a common state of oppression of women could show the path to a feminist
revolution.
In another strand of feminist thought, Nirmala Banerjee’s study of the concept of
unorganized labour and the predominance of women in this category is an important
contribution to the understanding of development.21 Banerjee’s analysis illuminated a
hazy but pervasive problem of unemployment faced by people and women in particular,
in developing societies. Her studies made it clear that informal (or unorganized) labour
is marked by its static, undervalued, overexploited character that is in stark contrast to the
utopian promise of modernization in the transition narrative. As informal labour
becomes increasingly pervasive in the market, it becomes possible to see that the process
of development has its rejects, people who are not carried into the transition to developed
modern economies and societies.
Mary John’s essay on World Bank discourse of the 1990s probes the contested
concept of informal labour as it takes shape in the theories of neoliberalism.22 She argues
that informal labour, originally a characteristic type of women’s oppression that did not
provide a secure wage and sustenance, begins to undergo a shift in meaning and value
from a condition of forced marginalization and impoverishment, to a life style based on
choices and circumstances. This marks a subtle shift in the discourse of development
where encouraging ‘self-employment’ becomes an increasingly common and
administratively accepted alternative to providing organized institutions of employment
in modern industry.
Central to the feminist interventions in economics and development theory is a
fundamental contestation of perspectives. Feminism is a deeply political engagement
with the structure of domination and exploitation. As such it sits uncomfortably with
development economics, which is constructed as a governmental discipline designed as
an analytical and policy instrument to ensure the transition of an underdeveloped
economy to a modern one. Feminist development proposals, which seem at one extreme
to be a utopian vision of revolution, seem at another extreme, tame and acquiescent in the
call for more education and empowerment within the existing mechanisms of
development administration. At this juncture it is only possible to suggest that we need
to think of this seeming instability and wide range of positions as the resultant of the
encounter between the critical force of feminism’s subjective energy based on women’s
experience on the one hand, and the abstract, statistical form of development economics
on the other.
By the 1980s development theorists in India were thinking about the reasons why
the growth of the economy did not meet planning expectations. The international context
was the looming collapse of the Soviet Union, which was the bulwark of planning against
the neoliberal resurgence in Western societies. Pranab Bardhan’s study of development
in India proposed that the cause for stagnation was the fractious character of the dominant
coalition consisting of the bourgeoisie, the rural aristocracy and the bureaucracy. 23 The
differences in perspectives between them; the perception that the bourgeoisie were being
given predominance at the cost of the aristocracy; the appeasement practices of the
bureaucracy with other partners of the coalition; and the fundamental mistrust it had of
21
22
23
the business classes, together led to the negation of the effectiveness of development
planning. Thus, according to Bardhan, economic transition was being restrained by the
specific political linkages between the members of the dominant coalition that resulted in
a trapped or low growth state in the country. Bardhan’s theory of the reason for low
growth was somewhat similar in structure to, but different in its particular content from
Baran’s more general theorization of economic stagnation in backward countries. It was
thus a critical analysis of the structure of the Indian state. Arguing from another
perspective, the economist and member of the Planning Commission, Sukhamoy
Chakravarty in his study of poor economic development argued that while it was true that
there was low growth, it must be kept in mind that the planning process during the first
three decades of independence had an agenda and norms of success that were different
from those used to measure its performance in the 1980s.24 For example, providing
employment for people at a higher rate than would arise under the condition of
uncontrolled industrialization, and minimizing the pain and suffering of people in the
transition to a developed economy through welfare measures, were important
considerations. On the other hand, he also argued that even the best-laid plans failed
because of poor implementation. Implementation is the term that describes the systematic
putting into practice of the plan by agencies designated and qualified to do so.
Chakravarty’s argument was that on the one hand, the agencies failed to fulfill their duty;
on the other, the absence of hospitable conditions for implementation on the ground led
to the subversion of the planning intention.
Western theories about development by the 1980s had begun to doubt the efficacy
of the developmental transition because of perceived and totally unexpected increase in
political instability in developing regimes. A.O. Hirschman reads this doubt as being due
to what could be called a ‘romantic’ commitment of intellectuals to development theory,
because of which they expected that ‘all good things go together’.25 In other words, these
thinkers expected that because economic development occurred, political stability and
cultural wisdom would simultaneously appear. This, Hirschman argues, was not the case,
and instability occurred because the elite were being driven by their irrational passions
for prestige, rather than by their rational economic interests. In another direction,
Samuel Huntington argued that one of the main causes of the rising international
belligerence of developing nations is that the slow indigenization of the political and
intellectual classes in these nations resulted in the dominance of cultural models alien to
the West.26 This gave rise to the ‘clash of civilizations’, and the West would have to
confront aggressively this divergence in cultures that result from the developmental
process. Thus in Huntington, development has an unexpected result – an increase in
wealth gives rise to a belligerent nation state whose goals are inimical to those of the
civilized West.
It is with the work of Amartya Sen that a wholly new theoretical paradigm of
thinking about development emerges. 27 Instead of seeing development as the classical
seesawing of priority between growth goals and welfare goals, he proposes that the end
of development is freedom and a better life for the people. Sen argues that providing
24
25
26
27
people with the capabilities to fend for themselves is the central element in development
thinking and should be addressed by the state. In order to improve the efficiency and
efficacy of welfare measures, they should be tightly specified and targeted to address
defined populations. This would eliminate the risk of an indiscriminate dole that would
act as a disincentive to hard work. Implicit in this foregrounding of welfare as the state’s
autonomous role and function is a reduced authority and responsibility for its direct
investment in industry. The economic resources that are released could be used to
facilitate growth through infrastructure development, incentive and stimulus to private
industry. Kalyan Sanyal suggests that Amartya Sen’s model of development relieves the
state of the developmental responsibility to ensure that people make the transition from
subsistence labour and coercive bondage, to wage labour under capitalism. In addition,
Sanyal argues, Sen’s techno-scientific model of capability building in individuals so that
they function better in the market and society also obscures the fundamentally political
process of expropriation and impoverishment of people by growth and primitive
accumulation.28 Sanyal thus sees Amartya Sen’s work as part of a theoretical shift that
redefines development in such a way that its older role in growth is replaced by its new
function of keeping those excluded from the modern corporate sector alive and able to
find means of subsistence. Be that as it may, Sen’s most important contribution however,
is his elaboration of the multidimensionality of development as a process: growth, health,
education, housing are so many different irreducible dimensions of development. He
proposes that this multidimensionality cannot be measured by a single index and often
the comparison and evaluation between developing countries may only be partial and
limited to specific single indices like those of health, education, or growth. However, in
Sen’s view, these indices lead to capability building targeted as specific shortcomings of
individuals – there is no possibility of seeing the multidimensionality of development
itself as something that extends beyond national goals, governmental intentions and
administrative strategies. In other words, Sen’s theorization, while opening out the
concept of development in an interesting way, has limited possibilities for a democratic
engagement over the experience and imagination of development.
Ashis Nandy’s essay on the violence of development argues that violence against
people is a fundamental corollary to the development project.29 The coercive element
always follows the failed promise of transition to modernity as a culturally alienated
indigenous elite enforces its model of development on people. Thus, the idea of
development routinely eliminates tradition and memory in the name of atavism. He
proposes a critical reexamination of development that, in India’s context, is more rooted
in the Indian freedom movement and Gandhian anti-modernism. Such a perspective
would reject both Westernization and fundamentalist revivalism for a middle path that is
more democratic and less savagely violent than both. While many of Nandy’s
observations about the violence of development as it articulates itself through the elite
imagination are accurate, the difficulty is that development is not only a part of elite
thinking. It is equally the promise of education and dignity that absorbs millions of
children into schools, the promise of health to relieve the morbidity and mortality of rural
and urban life, the promise of well being that gives people hope to think beyond the grind
28
See Sanyal, Rethinking Capitalist Accumulation, especially pages 176-184.
29
of everyday poverty, the promise of equality against the oppressions of majoritarian caste
and Hindu fundamentalism.
The idea of development in India is what may be called a universal in the rigorous
sense: it promises the good to the people in the name of the nation, against which
governmental policy and action can be measured according to democratic norms. There
is on the one hand, an informal, fuzzy commonsense of what development is in relation
to a person’s life, which is accepted as a long-term goal. There is on the other hand, a
more formal, administrative, governmental understanding of what development of an
economy is, and this leads to a perspective and a model of transition through specific
stages in which, most often, the weakest sections of society must pay the price of
becoming modern. Thus an understanding of the complex multidimensionality of
development as a concept opens the ground for a contestation of the terms of its
normativity. Most of the essays excerpted in the volume touch on the impasses of
development in meeting what may be called the democratic norms of government in one
way or another.
In order to understand better the origins of the idea of development planning and
administration that provides the basis for the readings in this volume, it would be useful
to examine the historical roots of development in the post World War Two post global
situation. The next two sections examine these.
Section IV: The World War Two beginnings of Development

The theoretical framework of the development of the Third World countries into
modern nation states crystallized in the shifting international balance of power that was
part of World War Two.30 This occurred as a consequence of changes in the economic,
political, epistemological and ethical perspectives of the Western nations among
themselves, and with respect to colonialism and the non-Western world. These found
their new, though ambiguous and somewhat unstable, equilibrium by the end of the war.
What follows is one account of a complex, contested and even now inadequately
understood epoch in history:
European Bankruptcy
As is common knowledge, the European colonial powers were near bankruptcy by
the end of World War Two. The British overseas debt was computed at £ 3,355
millions.31 The United States of America was in the final stages of achieving world
dominance in financial and military terms. The problem for the US was to achieve
economic hegemony in the European colonies and the world in general without
completely alienating its European allies. In the many delicate and fraught negotiations
towards the end of the war, the establishing at Bretton Woods of the international
financial system, the International Monetary Fund and the International Bank of
Reconstruction and Development (known as the World Bank) were key processes
30
See Arturo Escobar, Encountering Development, for a detailed discussion. Escobar’s
description and analysis of this process is one of the earliest in the literature of development theory.
31
W.R. Louis, Imperialism at Bay1941-1945: The United States and the Decolonization of the
British Empire, (Oxford: Oxford Clarendon Press, 1978) p 25.
towards this goal.32 While the European nations, though enfeebled, had some control
over the establishment of the Bretton Woods institutions, the non-Western countries had
to accept them on the West’s terms. These institutions very soon began function as First
World instruments to develop Third World markets according to the liberal model of
capitalist enterprise. The Truman Doctrine, which promised the nations of the South the
technical and financial assistance to make the transition, was the softer face of these
developments.33
Changes in Colonialism’s logic

The question of colonial rule had, by World War One, undergone a transformation
from the nineteenth century paradigm of domination by a master race. 34 The Western
nations could no longer treat the colony as a territory for exploitation and had to conform
to an international understanding to govern and develop that dominion. In the League of
Nations’ terminology the colonial territories were ‘mandates’ of the European colonial
powers, and were held in comfortable international legitimacy for an unspecified period
of time. This system of mandates was subjected to intense diplomatic pressure during the
latter part of World War Two to become the Trusteeship Council of the United Nations.
In the initial discussions and negotiations the United States was more or less agreeable to
the British perspective whereby self-government in the colonies held in trust would be a
distant goal. However, during the San Francisco Conference in June 1945, the Soviet
Union and many of the developing countries insisted on the inclusion of the terms
‘independence’ and ‘self-determination’ in the trusteeship declaration. Finally, in the
Chapter XI of the UN Charter signed at that conference, the declaration regarding non
self-governing territories included the following commitment to help these territories:
…to develop self-government, to take due account of the
political aspirations of the peoples, and to assist them in the
progressive development of their free political institutions, according
to the particular circumstances of each territory and its peoples and
their varying stages of advancement.
Communist Perspectives and Pressures

The Soviet Union had by 1921 already begun to take a theoretical stand on the
national liberation of the colonies from capitalist imperialism as part of the world wide
proletarian revolution. Lenin, and following him, Stalin had extended the question of
national liberation from the East European countries to the countries and peoples of
Africa and Asia, asserting the liberation of the colonized nations, as nations. 35 This was a
32
Joan Edelman Spiro, The Politics of International Economic Relations (London: George Allen
& Unwin, 1977) pp 21-28
33
Arturo Escobar, Encountering Development.
34
W.R. Louis, Imperialism at Bay deals with the detailed history of these negotiations that result
in the signing of the United Nations Charter at San Francisco in 1945.
35
The Soviet Union’s basic position with respect to colonialism was clearly enunciated by V.I.
Lenin, “Third Congress of the Communist International”, Collected Works Vol 32. (Moscow: Progress
Publishers, 1965) This is made available on the Internet in the V. I. Lenin Internet Archive
(www.marx.org) 2002. Link: http://marxists.org/archive/lenin/works/1921/jun/12.htm#fw01 Accessed
on 5th May 2010. See also J.V. Stalin, “Concerning the Presentation of the National Question”, Works,
key strategic and perspectival stance for the Soviet Union. While internal documentation
about the actual policy and economic commitment to this goal is not easily accessible, an
American specialist on the Soviet Union in the Cold War era has suggested that until
after the World War Two, the practical commitment was minimal because of the limited
military and political reach.36 However with Khrushchev’s Eastern policy enunciated at
the Bandung Conference in 1955, money was offered on long-term credit to accelerate
guidance to the indigenous national movements in Third World. The Soviet support of
national liberation and development as part of the international proletarian revolution in
the context of the Cold War and Western liberal hegemony had two consequences. One,
it meant that the Soviet Union too, in spite of the Hegelian-Marxist idea of organic
development, supported an elite driven process of linear modernization that was in form,
quite similar to the liberal model of finance, technology and military support. The key
difference however was that the Soviet mode of assistance was accompanied by a
generous transfer of technology to the developing country. This gesture indexes the
difference between the ‘socialist’ orientation of this initiative and the liberal response of
the Western world. It is a difference that also marks the intellectual and ethical
orientation of socialist elite in politics and in administration. Two, it also meant that the
First World assistance to developing countries had to be on generous terms to compete
with the Soviet Union. The liberalization and structural adjustment programmes of the
World Bank and the IMF signal a clear change in the tenor of assistance from the First
World after the collapse of the Soviet Union.
Race and Development

At a much deeper level than these political and economic factors, but working in
tandem with them, was the ultimate breakdown of race as the principle of organizing the
world according to a civilizational hierarchy.37 Nineteenth century colonialism’s
fundamental epistemological premise was that the European races and civilizations had
the primordial right to rule the world because of their racial superiority. This way of
thinking about race and colonialism changed slowly in the twentieth century, as
expressed politically in the development of the mandates system and the principle of
trusteeship. Among the academic disciplines, one of the first to demonstrate these fault
lines was anthropology, where by the beginning of the twentieth century, the work of
Franz Boas on race, language and culture had launched a major assault on evolutionary
anthropology and race theory that preceded it. In the discipline of sociology, which took
birth in “an imperialist, Eurocentric, and indeed racist era”, the work of W.E.B. Du Bois
was an important beginning in the questioning of the concept of white racial superiority.38
World War Two brought the epistemology of race and Eugenics to an acute political
crisis through the Nazi genocidal experiment at racism within its own national body. One
of the immediate problems faced by the Allied Forces (excluding the Soviet Union) was
that domestic support for the war (which, in addition to fighting Nazi imperialism, was
Vol. 5, 1921 – 1923. This is made available on the Internet by the Marxist International Archive. Link:
http://marxists.org/reference/archive/stalin/works/1921/05/02.htm Accessed on 5th May 2010.
36
Fritz Ermarth, “The Soviet Union in the Third World: Purpose in Search of Power”, in Annals of
the American Academy of Political and Social Science, Vol. 386, Nov 1969. pp 31-40.
37
Howard Winant, “Race and Race Theory”, in Annual Review of Sociology, Vol. 26 (2000) pp
169-185
38
Ibid. p 177.
also widely acknowledged to be against racial oppression and extermination of the Jews
in Germany) had to be won from the oppressed races within metropolitan nations like
Britain.39 In the periphery, the struggles against colonialism in different countries like
India too were not slow in pointing out the duplicity of Western nations fighting for the
fundamental human right to freedom against Nazi Germany while oppressing subject
populations in their colonies. Among the great powers, the Soviet Union and Japan
especially exerted political pressure through propaganda on the United States in relation
to domestic racism. All these factors in turn led to the foreign policy shift against
European colonialism, which also conveniently worked well with the economic interests
of the United States as an emerging superpower. It is these forces that led to the political
tension between the United States and Great Britain with regard to the colonies, and
paved the way for the rapid decolonization of the world in the post war era. A critical
effect of this shift was the total and final replacement of institutionalized ideas of racial
superiority and colonialism with the idea of development as a principle of First World
global hegemony.40 This occurred in the twentieth century history of liberal political
theory and economics, as an extended parallel of the changing ethical and
epistemological emphases in anthropology and sociology. A substantial number of the
essays excerpted in this volume are born of this milieu.
Thus, seen from the perspective of both the Soviet Union and the United States,
the two major powers that emerged in the post war scenario, the idea of development as
linear modernization planned and executed by the national elite was a single point menu
on offer to Third World nations as they sought to find stability and unity in the
postcolonial era. Since the targets of developmental assistance from the First World were
the Third World elites, the latter had a choice of ideologies and political frameworks
from which to draw their support and legitimacy. The Non Aligned Movement was one
of the expressions of this choice before Third World nations in the Cold War era.
Section V: The Indian freedom movement context
Passive Revolution of Capital

When we turn our attention to the political conditions in India that provided the
ground for the idea of development at the time of independence, we see that the
administrative services are the most important actors in the Indian political economy for
the first three decade (1950-1980). After this the role of the bureaucracy becomes less
important but retains a centrality nevertheless. In order to understand this importance we
need to look at the logic of formation of the nation state in its struggle against colonial
domination.
Partha Chatterjee, in his essay on the national state excerpted in this
volume, examines the historical reasons for the ‘poor performance’ of the development
state in post-colonial India. He proposes that the reason for the slow growth is that India
embarks on a graduated transition to modern capitalism since the bourgeoisie are
39
Justin Hart, “Making Democracy Safe for the World: Race, Propaganda, and the Transformation
of U.S.
Foreign Policy during World War Two”, The Pacific Historical Review, Vol. 73, No. 1 (Feb.,
2004), pp. 49-84.
40
Another marker of this shift was the full emergence of racist xenophobia in the 1950s, marking
an epoch the world have not yet emerged from.
historically too weak to impose their transformative will on the nation. This transition is
negotiated between the bourgeoisie and the less progressive classes in a manner that
carries the latter’s consent to the changes of industrial capitalism. Antonio Gramsci has
called this negotiated transition the passive revolution of capital.
Chatterjee proposes that during the freedom movement, the nationalist’s charge
against the colonial rulers was that the British, being alien exploited India, but also
having no natural affective relationship the Indian people, were indifferent to the
development of the people and the nation as a whole. Indeed the British were seen to be
incapable of governing in a manner that took care of the well being of Indians. In
opposition to this irresoluble contradiction perceived in colonialism, and in the wake of
colonial retreat immediately after World War Two, the national state had to undertake to
do what the British were charged with being incapable of. The free nation had to develop
its people – that promise was the basis of legitimacy of the postcolonial development
state in India. This promise was also the response to the emerging international order and
its ethical commitment to the development of the new nations that arose as the tide of
colonialism withdrew across the world. Given that the claimed and actual success of the
freedom movement was achieved through the deep involvement of people of all strata in
the struggles and battles in the name of the nation (the British would not have withdrawn
so soon otherwise), the promise to develop could not be an empty one. Political logic of
internal security and stability, and the ethical foundation of the freedom movement,
demanded that development be guaranteed, reiterated and tested in the democratic
mechanism of the electoral political system. On the other hand, driving the passive
revolution of capital was the ruling coalition of the national elite. This coalition,
composed of the industrial bourgeoisie (which was weak), the rural landowning class
(which was politically conservative, if not actually reactionary) and the bureaucracy
(which led the dominant coalition), was a fractious group in which each member was
suspicious of the others. The state bureaucracy’s control of the modern industrial sector
marked the moment of arrival of capitalist hegemony after the coming of independence.
The state thus becomes the largest investor in the industrial sector in India. This state is
driven by two agendas – one, development as the amelioration of poverty to achieve the
provision of welfare according to the principles of twentieth-century democracies – this
agenda is the one that is put to periodic test with the electoral process. Two, development
was growth of capitalism and modern industry in the country. This second agenda was
the central one of the dominant coalition. The problem for the latter was, given the
ethical commitment of the nation state to its people at large, unnecessary hardships of the
transition to modernity had to be mitigated.
Logic of post Independence development administration

In this turn of history, on the one hand, Gandhian anti-modernism and critique of
Western industrial culture had to be rejected by the logic of development. On the other
hand, the Indian Administrative Services, which was structurally and historically a
continuation of the colonial Indian Civil Services, had to be modified in its spirit. It had
to be transformed from what was essentially a colonial revenue bureaucracy to one that
was vitally charged with the nationalist ideal of development and welfare so that it
embodied the nation state’s will to development. Chatterjee suggests that the Indian state
had before it the concept of welfare as a universal principle developed through the
struggles in nineteenth century Europe and America. While this is in a large sense true,
this formulation would need substantial elaboration to provide an explanation of how the
universal principle of welfare took root on the ground. Only such an explanation can
explain the peculiarities and idiosyncrasies of the history of welfare in free India. It has
been my argument that in India during the historical process of the freedom struggle
against colonial rule, the concept of seva, or service to the different oppressed groups,
emerged and expressed itself in the many voluntary organizations that were formed
during the period 1900-1950 under the names of “service”, “servants”, “sevak sanghs”
and such like.41 This concept of seva, as it took shape in nationalist practice from
Vivekananda to Gandhi, though drawing on many strands of practice including some that
were clearly Western, saw itself as the elaboration of an autonomous Hindu conscience
and moral authority. It was the commitment to seva, as the amelioration of the suffering
fellowman, which provided the moral self-confidence to the challenge the colonial rulers
through the politics of Satyagraha. Central to my argument is the proposal that when the
freedom struggle was won, and the bureaucracy came to take the shape of the Indian
Administrative Services, its spirit as the bearer of the universal promise of the nation to
its people came from the subsumption of the idea of seva that drove voluntary activism of
the pre-independence era. The effects of this subsumed basis of seva in post-
independence welfare have led one observer of Indian politics and administration to
suggest that the idea of welfare, rather than being animated by an idea of human right as
it is in the West, is driven by the principle of charity, 42 an Indian term for which is
dana.43
Thus I would like to propose that there are three strands in the genealogy of
administrative ethics and logic that have driven the development bureaucracy in free
India. One, the ethics of an administration inherited from colonial government, which
was based on the principle of what Eric Stokes has called authoritarian liberalism.44 This
form of elitist, proudly alien, governmental and administrative thinking was designed to
inspire native awe for the majesty of the colonial ruler. Two, the ethics of national
development that was essential to the development bureaucracy came, as I have argued,
from the concept of seva or the charitable service to ameliorate the lives of the
unfortunate. Such a service was unilateral and therefore also at the risk of being
authoritarian in its address of its perception of misery and misfortune. Three, the
instrumental logic of development planning and economics itself, which tended to treat
the people as statistical elements of a population that needed to be deployed/manipulated
to achieve the different indices of growth and development. It is my argument that a
41
See R. Srivatsan, “The Concept of Seva and the Sevak in the Freedom Movement”, EPW. Feb
4, 2006. pp 427-438
42
Neeraja Gopal Jayal, “The Gentle Leviathan and the Indian State” in Mohan Rao, ed.
Disinvesting in Health: The World Bank’s Prescriptions for Health, (New Delhi: Sage Publications, 1999).
Her essay makes this proposal through a comparison of the way in which welfare is articulated in the
Indian and Western contexts.
43
Carey Anthony Watt, Serving the Nation: Cultures of Service, Association and Citizenship in
Colonial India, (Delhi: Oxford University Pres, 2005) See especially his chapter “From Dana to
Associational Philanthropy”.
44
Eric Stokes, The English Utilitarians and India, (Delhi: Oxford, 1989). See the concluding
chapter “The Utilitarian Legacy” for his fascinating discussion of the ascent of the figure of the
“authoritarian Liberal” and its integral relationship to the demands of the post 1857 executive and
magistracy in colonial India.
synthesis of these three modalities of contact with the governed in different growth and
welfare engagements confront the latter as the singular force of administration in India in
the first three decades of independence.
The problem, then, for a contemporary understanding of development is a careful
reexamination of how neoliberalism as exemplified in the SEZs and the consequences
described earlier in this introduction transform the logical and ethical modalities of post-
independence development. The requirement of such a theoretical understanding would
be to provide an objective dimension to the ordinary person’s experience of development
today as a process in which she loses on her investments in the promises of development
(education, labour, health, land ownership, a good life towards which not so small
sacrifices are made) implicit in the electoral contract. Put differently, the shared idea of
development is the hegemonic basis on which the dominant elite earns the privilege to
govern the nation as an imagined community with a common future. Contesting the terms
in which that idea is understood and appropriated is a key aspect of the struggle for
democracy.
Section VI: Conclusion

The question…is whether it is possible to establish between those who
govern and the governed a relationship that is not one of obedience, but one in
which work will play an important role.45
Michel Foucault
The story/argument so far

I started this introduction by saying that it is necessary to look at development as
a system of thought that used specific concepts, debates, decisions, actions and criticism
to arrive at a programme of governmental action. I then discussed some of these
concepts in their interrelation with one another: how the dilemma of growth and equity
was related to the problems of employment and well being; how contemporary
development administration’s top-down structure led to a lack of connection with the
people governed and how it differed from an organic model of development; how
industrialization demanded discipline and at the same time failed to provide employment
in the wake of growth; how development was seen to result in both international and
domestic political instability in one perspective, and how it was antithetical to democracy
in another; lastly I described briefly the changes that come in with liberalization in India.
Section two examined SEZs in some detail as an example of development in the
neoliberal context, looking at the support for business, the promise of growth, and the
land acquisition process. I then discussed the problem of displacement caused by SEZs,
and how this displacement was not limited to them, and how the more general elaboration
of the state’s right to eminent domain was different from the way in which it worked in
the West.
Section three of the introduction was a discussion of some of the debates
excerpted in this book. In this section I looked at how the debates in development theory
evolved through the fifty years after Independence/World War Two, the changing
45
Michel Foucault, in his interview “Practicing Criticism” in Lawrence Kritzman, ed., Michel
Foucault: Politics Philosophy Culture—Interviews and Other Writings (New York: Routledge, 1988), p
154.
emphasis on the different concepts, the different perspectives: industrial modernization;

the Latin American debate on underdevelopment and dependency; the mode of
production debate in India; the feminist intervention in the notion of women’s work and
unorganized labour; state theory in the context of low growth rates of the Indian
economy; international perspectives on success and sustainability; the new turn in
development theory inaugurated by Amartya Sen towards the ideas of freedom and
capability building; and finally the anti (or post) -developmental arguments of Ashis
Nandy. This conceptual overview of the debates that follow in the volume was
constructed as a convergence of different strands of theory and practice from many
different sources and locations.
In section four I described briefly the post World War Two international context
that resulted in the emergence of the paradigm of development. The section touched on
the problem of European bankruptcy and American hegemony; it then looked at the
changing logic of colonialism in the twentieth century and the drive towards the
development of the Third World; I then examined the communist rationale for
development of non-Western nations; and finally I looked at the transformation of the
paradigm of racial domination in colonialism into that of development of the Third
World.
Section five discussed the history of the development state in India, focusing on
the passive revolution of capital, the importance of the bureaucracy and the spirit of
amelioration that was one of the sources of the ethics of development administration. It
ended with a discussion proposing a synthesis of different strands of the administrative
interaction that characterized Indian administration in the first thirty years after
Independence.
The first objective

The first objective of the introduction was to give the reader a clear picture of the
historical and geopolitical conditions of the system of thought called development. The
intention was to provide an understanding of the debates from a perspective that
bracketed out the normative claims of the ‘goodness’ of development as such, and of
modernization as Westernization. The attempt was to distance the reader from both the
implicit acceptance and the immediate rejection of the idea of development and its
concerns. It was also to show that there were many storylines to the discourse, which
emerged in several locations and came together in a coherent and somewhat stable
configuration of thinking and practice in the last sixty years. This framework will
hopefully provide a background that is comprehensive without forcing a single line of
explanation for a reader approaching the different extracts and their headnotes in the
book.
The second objective

The other objective of this introduction has been to pose some problems for
development theory that would need to be answered in the current twenty-first century
context of unparalleled national growth and globalization on the one hand, and great risk
to large populations who will be affected by this growth on the other. I will outline these
problems as work that needs to be done on three fronts: a) the perspective of
development thought; b) the struggle in the context of hegemony; and c) the task of
development theory.
a) The perspective of development thought
One of the changes that the essays in the volume map is in the perspective of
development thinking. In the initial period, liberal development theory had a clear
governmental commitment, a policy oriented search for the best solutions to the problem
of development. Neo Marxist thinking on development was different in that it critiqued
the First World model of development with a political framework that found its
orientation in a revolution that would bring about fundamental equity. The feminist
intervention seemed to make limited demands on the development discourse, to force the
latter to recognize the deleterious effects of development on women’s lives. By the
1990s, the discourse changes entirely to anti or post-developmental positions in the West,
and in many of the strands in Indian academic thinking. On the other hand, during this
same period, liberalization has introduced a different strain of theory and practice that
alters the priorities of development and its commitment to the people in such a way that
the guarantee of the benefits modernity is, if not erased, withdrawn to a degree. In
relation to this lineage, much work would be necessary to reorient the perspective of
development theory so that i) it retains a grip on the paradigm of development as a
horizon of critical thought; ii) it shifts its allegiance completely from a governmental,
policy oriented perspective to a democratic, politically oriented one; and iii) it brings a
political edge to thinking about development policy and practice by incorporating
democratic critique and refusal to be governed by peremptory authority.
b) The struggle in the context of hegemony
There are many senses of the term hegemony, including that of out and out
domination. Through out this introduction, I am using it in a somewhat Gramscian sense.
What the term means for me is a demonstrated political legitimacy and authority to do
what is necessary for developing the nation, backed by an ideological and cultural
apparatus that establishes intellectual superiority and ethical command. Hegemony is
intellectual, ethical and thence political leadership backed always by a variable degree of
coercion. Hegemony is the basis of the claim to the location from which one is entitled to
conduct the Universal discourse of the public interest. A hegemonic construct is an idea
or a proposal that makes sense and is reasonable to the other, without necessarily being
heard in a manner identical to that in which it is proposed.
The reason for stressing the need for a theoretical grip on the development
paradigm (rather than move into anti or post developmental positions) is that the
historical overview thus far suggests that development is a hegemonic construct. The
agreement that it is good and the assertion of the need to pursue it depend on
development’s ability to convince people of its rational commonsense. In other words,
there is a shared imagination that arises in the discourse of development that establishes
the horizon of a desirable world. The Third World is thus not yet out of the time of
development.
It is a truth that the during the freedom movement, the nationalist elite mobilized
the large mass of people precisely by articulating a vision of their well being, which if not
completely acceptable, was at least understood and agreed to well enough to bring about
large scale political collaboration. It is this same hegemonic offer that sends millions of
children to schools and promises jobs, security of life, abundant food and good health.
However, the divergence between the grand imagination of development in the dominant
elites and their international collaborators in the neoliberal moment on the one hand, and
the more limited and realistic vision of the people governed on the other, results in an
unstated, yet substantial, disagreement over what the goals of development are and how
to achieve them. With the new turn towards helping business grow, the emerging
tendency of the coalition between the industrial bureaucracy and the bourgeoisie is to
find ways to avoid or short-circuit the conditions on the basis of which the consent to be
governed is expressed through democratic support. In this context it is important to
contest withdrawal of the hegemonic goals of development on the basis of which the
ruling elite find their political legitimacy and electoral validation. Putting political
pressure on the hegemonic node of development would be the only way to continue the
struggle – and this is not necessarily a pacifist enterprise, and yet, given the constrained
scope of immediate demands, it clearly is not likely to be a ‘revolution’ either.
c) The task of development theory
Reorienting the perspective of development theory towards a democratic politics,
and retaining a grip on the hegemonic engagement would imply a task at hand. What
follows is a description of this task as a way to end this introduction.
It is necessary at this point to explicitly introduce the use of a term that has
become fairly commonplace in political theory, i.e., governmentality.46 This term is
Michel Foucault’s neologism to describe an aspect of political reality that had escaped
the conceptual focus of a political theory that before the 1970s was obsessed with the
question of sovereignty and state power. He had elaborated this concept as a response to
the complex political moment in Europe of the 1970s, which saw the emergence of
neoliberalism, and the beginnings of the cracks in the communist façade. The idea of
governmentality suggests both the logic of governing, and the mentality that characterizes
the political relationship between the governing and the governed. It is a fuzzy concept
that describes a range of political and administrative engagements spanning coercion,
discipline, government, “biopolitics”, oppositional struggle and criticism. The direction
in which this entire introduction has been oriented has been towards a theory of
governmentality in the place and time of development.47 To connect this line of thinking
with the previous point, hegemony results in a willingness to be governed in a specific
way, for given purposes and by an established group of the elite. In other words, in
development, the claim to have the authority to govern and the consent to be governed
depend on the hegemony of what may be called the developmental bond or compact.
The task that confronts theory is to construct a language and a framework of
concepts that bring to visibility in development discourse, the aspirations and critical
voice of those who consent to be governed in name of a desired future that is not, and can
never be, fully articulated. Some examples: first, there are the many struggles against
displacement and expropriation that are explicit life (and death) critiques of government
and developmental initiatives (dams, SEZs, mining, etc.). Second, there are many critical
voices and struggles for equity that have been so far dismissed as ‘politics of identity’
46
For the original introduction to this concept, see Michel Foucault, “Governmentality.” in The
Foucault Effect: Studies in Governmentality, edited by G. Burchell, C. Gordon and P. Miller (Chicago:
University of Chicago Press, 1991).
47
Seeing development as a form of governmentality is not new – Arturo Escobar, Partha
Chatterjee, James Ferguson and Kalyan Sanyal have explicitly used this paradigm.
(e.g., dalit, tribal, Muslim), or ‘regional demands for autonomy’ (e.g., Telangana, the
North East). Third, there are inchoate yet intense dissatisfactions with the educational
system, healthcare, and the problem of survival, which express themselves in different
forms of protest including suicide. Engaging with these and many more similar instances
as political critiques of development, rather than as minor redistribution or pacification
problems, would mean moving development out of the rarefied domain of long term
planning into the messy everyday world political negotiation. Reorienting the
developmental perspective would mean suspending the received normative framework of
development theory that limits the voice of protest to one partial claim to be addressed by
the Universalist discourse of welfare.
The dominant economic model sees development as purely the allocation and
administration of goods (like education, capability, health) through a technocratic
apparatus. This model would have to give way to a more complicated approach that
involves dialogue and an ability to hear what different communities and populations
understand to mean development for themselves in a specific issue. Such an
understanding can never result from passive listening – it involves the reorganization of
the conceptual apparatus so that the matter can be heard. It would mean that the certainty
of the bureaucratic elite that they are indeed expressing the public interest, or to put it
another way, that they are pre-ordained representatives of a known and crystallized
national will would have to be suspended. The work to evolve a consensus on
development in relation to each specific issue would have to begin.
For the administrator, the cultivation of the ability to hear what is being said and
the evolution of the conceptual apparatus of development to become capable of working
with external critique would imply that the developmental engagement would have to
undergo a transformation. In the preceding section, I had proposed that a synthesis of
three different strands of governmentality constitute this engagement as a unilateral,
hierarchical one in India – the authoritarian liberal conduct of the colonial bureaucracy,
the ethical precursor of seva of the nationalist movement, and the enumerative statistical
logic of development and planning. This structure of development administration and
government would have to be subjected to scrutiny based on the experience and
understanding of the governed, and would have to transform itself in a manner that is
adequate to the demand placed on it. Such a transformation would also mean that the
idea of an omniscient and omnipotent vanguard administrator who leads the people to
their ‘tryst with destiny’ has to be, if not abandoned, at least substantially tempered. It is
not only the people who need to be educated about development through dialogue, but
the administrator too needs to re-educate himself about what development should be in
the historical circumstance through a critical confrontation.
While this part of the conclusion has been written as a set of recommendations for
administrative reform, these “tasks” are well beyond the scope of ethical enterprises of
individual goodwill (however, molecular, organic shifts will always ensue after a process
of reflection). Even if it is true, as Kalyan Sanyal has argued, that the bourgeoisie, and
by implication the ruling coalition, are no longer the agents of a transformative
modernity, this only opens on to the larger question of what the transformation itself
would lead to, and how the ‘agency’ of this change would shift and reconstitute itself in
historical processes. The hope, the thrill and the risk of change lies in the fact that many
political initiatives in India today are already reorienting the discussion of what we need
to do in order to ‘develop’ according to our collective, if fractured genius. This

‘development’ is not necessarily like (or unlike) a comprehensive model based on the
West’s example. It is often a question of what limited improvement can be made in a
given situation without necessarily implying that all problems will, or indeed even can,
be solved then, or in the future.48
48
A clarification for the reader with background: on the one hand, this perspective clearly
resembles the concept of Pareto Optimality (see head note to Amartya Sen’s extract in this volume for a
discussion of the concept), but in an operational space that is political rather than economic. On the other
hand, it also resembles C.E. Lindblom’s ‘science of muddling through’ where the administrative choice is
incremental rather than based on a Universal plan. However, this resemblance to Lindblom’s work too is
limited in that the kind of political negotiation and debate envisaged here is not part of his notion. See C.E.
Lindblom, “The Science of Muddling Through”, Public Administration Review Vol. 19, No. 2 (Spring,
1959), pp. 79-88.
Full Employment
Modernized Nation
Equity
Industrial
Growth
Process of
Development
Low National Income Low governmental commitment to
welfare
Underdeveloped Nation
Large Population, subsistence Poorly paid, unorganized labour

economy, unemployment
Figure I: A simple framework of Development concepts
conncepts
R Srivatsan Dev Reader Sect I 11/20/2022 35
SECTION I: EARLY THINKERS

The early 1950s was a remarkable period in the history of economic thought.
Riding in the wake of the great depression of the 1930s, the Keynesian revolution had
begun to grip the Western imagination. World War Two had ended with the devastation
of Europe, and there was a need for rapid rebuilding of these war torn nations, leading to
the Marshall Plan. Paul Rosenstein-Rodan’s thesis of the Big Push was directed towards
accelerating the growth of East European economies. On the other hand the United
States of America had risen to a position of hegemony and the Truman Doctrine offered a
helping hand to the poor nations of the world.1 W. A. Lewis’ thesis on economic
development with unlimited supplies of labour, excerpted here, was seen as the birth of
the new sub-discipline of development economics.
On the national horizon, India had just won independence. The Gandhian bias
against industry had to be overcome by the Nehruvian stress on industrial development.
Decolonization had resulted in the establishment of links between the Indian planners and
the international academic and financial elite. In this context, Mahalanobis’ work
excerpted here was an important trendsetter in national development thinking.
1
See Section 4 of the Introduction for a more elaborate account of the massive political and
economic changes during World War Two.
R Srivatsan Dev Reader Mahalanobis 11/20/2022 36
MAHALANOBIS AND INDIAN PLANNING

Planning Development
P.C. Mahalanobis is known as the father of Indian planning. A statistician of
repute, he was invited by Jawaharlal Nehru to study the problem of development in India.
Mahalanobis’ paper, excerpted here, described a model in which the planned economy
was divided into four sectors: a) capital goods (e.g., factories to produce equipment for
steel plants); b) consumer goods (raw materials, semi finished goods, finished products
for direct use); c) agriculture and small industries; and d) the service sector. The four-
sector model followed Mahalanobis’ two-sector model, which he proposed as a critical
improvement of the then popular Harrod-Domar model of economic growth. The
Harrod-Domar model did not divide the economy sectorally. In this four-sector model,
the growth of each sector in the overall economic structure was to be planned somewhat
independently but with important linkages between them. Mahalanobis emphasized
investment in capital goods to replace costly and scarce imports. This stress on
indigenous growth of the capital goods industry was a key emphasis on import
substitution industrialization, proposed in the Latin American context by Raul Prebisch in
1950, as a necessary step towards healthy and self-reliant growth. The central problem
for Mahalanobis was to raise the percentage of the national income invested in the capital
goods sector. This meant that a judicious fraction of the surplus generated in other
sectors had to be appropriated through savings and taxation in order to be invested in
capital goods. A second important criterion for the Mahalanobis model was to ensure a
steady growth of employment in the industrial sector at a planned rate. The model,
combining growth of heavy industry with an agenda to redistribute wealth in planned
welfare measures is characteristic of development economics.
Other Perspectives
Mahalanobis’ focus on heavy industries and steel was in direct contradiction to
the Gandhian programme of Sarvodaya. Sarvodaya, the basis of Gandhi’s theory of Hind
Swaraj and of his practical communes starting with the Phoenix Settlement outside
Durban, emphasized development of the village economy and a critical refusal of the
industrial economy of the modern West. With the Nehru-Mahalanobis steerage of the
Second Five Year Plan, the Gandhian agenda was finally laid to rest in word and deed.
On the other hand, Mahalanobis’ emphasis on capital in the form of production
machines was opposed by another strand in development thinking which stressed the
importance of investment in the form of food advanced to workers. Vakil and
Brahmananda were representatives of this latter strand.1 They criticized the Mahalanobis
model for laying a stress on the wrong factor, i.e., lack of capital goods, rather than
disguised unemployment, a concept developed by W.A. Lewis and Ragnar Nurske.2 In
1
Nicholas Kaldor was the chief proponent the idea of capital in the form of food advanced to
workers. See Sukhamoy Chakravarty, Development Planning: The Indian Experience, (Delhi: Oxford,
1987), 60.
2
See Meghnad Desai, Development and Nationhood: Essays in the Political Economy of South
Asia, (Delhi: Oxford, 2005), 142. See the selection from Lewis, following in this volume.
the event, they were overruled and a version of the Nehru Mahalanobis approach was to a
large extent enshrined in the Second Plan.
This model of development, finally adopted in the planning process, closely
resembled one already worked out by Soviet economist G.A. Feldman in 1928, but
Mahalanobis disclaimed any knowledge of this precedent in his work.3 Meghnad Desai
has argued that Feldman’s model was not as sophisticated as Mahalanobis’ and that the
latter was a distinct advance even on the then influential Harrod-Domar model.4
Assessing the Nehru Mahalanobis model

There are views on Mahalanobis’ contributions to Indian planning, but a sense of
the debate may be had from Meghnad Desai, whose book has a collection of his essays
assessing Mahalanobis’ work.5 Desai has argued that the Nehru Mahalanobis model was
wrong in its understanding of the key area of agriculture. The model subscribed
implicitly to the notion that agricultural production was adequate for the population, but
was appropriated by the land owning classes. Agricultural produce thus only needed to
be redistributed to achieve self-sufficiency in food. This resulted in a more or less
passive approach to the growth of the agricultural sector in the planning and
implementation process. The error of this planning strategy was decisively proven in the
food shortages that occurred in the1960s. In this context, the success of the Green
Revolution (which was not part of the Five Year Plans) was instrumental in shifting the
emphasis from food “surplus” distribution to increased production.
On the other hand, Desai argues in hindsight that the long gestation period before
the large investment in steel and heavy industry paid adequate returns constricted the
growth of the economy and the problem of development for India may have been more
effectively addressed by a judicious focus on consumer goods.
Thinking development
The advent of the Mahalanobis era in Indian planning in the1950s marked a
specific turn in the politics of industrial development in India. The establishment of a
command economy that determined the priority of the capital goods sector through the
administrative apparatus was nothing less than a bid to train state capitalists in the
country.6 This was a decisive political advance of the bureaucratic elite in the dominant
coalition that affected the importance of the Indian business classes/castes. These
castes/classes were limited to following the lead of the command economy, had little say
in large investment priorities, and were often forced to operate in a consumer market
shackled by restrictions, thus relegated to the status of subordinate, if not necessarily
minor, players in the emerging economic scenario of free India. It is possible to
speculate that this was made possible by the colonial legacy of a “steel frame”
administration, which, it has been argued, had historically stunted the growth of the
3
See Chakravarty, Development Planning, 13.
4
See Desai, Development and Nationhood, 108.
5
Ibid.
6
See W.A. Lewis, “Economic Development with Unlimited Supplies of Labour,” extract in this
volume for an allusion the Indian attempt to grow state capitalists.
indigenous free market players through a systematic bias towards to the British
entrepreneurs in the country.7
Biographical Note: Prasanta Chandra Mahalanobis (1893-1972)

He was born in a Brahmo family. A scientist and applied statistician, he was best known
for the Mahalanobis distance, a statistical measure. He did pioneering work on the
measurement of anthropometric variation in India. Mahalanobis founded the Indian
Statistical Institute, and contributed to large-scale sample surveys. In later life, he
contributed prominently to newly independent India's five-year plans starting from the
Second Plan onwards. He developed the basic plan model with colleagues at his institute.
Mahalanobis also had an abiding interest in cultural pursuits and served as secretary to
Rabindranath Tagore, particularly during the latter's foreign travels, and also his
university Visva-Bharati, for some time.
P.C. Mahalanobis, Papers on Planning, Eds. Bose P.K. And M. Mukherjee
(Calcutta: Statistical Publishing Society, 1985)
7
See Amiya Kumar Bagchi, Private Investment in India, (Hyderabad: Orient Longman, 1972) for
a discussion of the colonial rule’s treatment of Indian businessmen.
STUDIES RELATING TO PLANNING FOR NATIONAL

DEVELOPMENT
P.C. Mahalanobis
In 1953-54 an Operational Research Unit (ORU) was established in the Institute

to undertake, on a small scale, technical work relating to planning. In September 1954 the
Institute was asked by the Planning Commission to undertake jointly with the Central
Statistical Organization (Cabinet Secretariat) to study the possibility of solving the
problem of unemployment in 10 years and at the same time to increase national income at
a reasonably rapid rate. This address was delivered on 3 November 1954 when Prime
Minister Jawaharlal Nehru inaugurated studies relating to planning for national
development in the Indian Statistical Institute.
1. At the desire of the Planning Commission the Indian Statistical Institute in
collaboration with the Central Statistical Organization has set up study groups to
examine the problems relating to planning for national development. The Planning
Commission is interested, for example, to know whether it is possible to eliminate
unemployment, say, in 10 years with an annual rate of investment of the order of 10
per cent of the net national product. In a fully planned economy it is sufficient to state
the target in the form of maximizing national income with the assigned rate of
investment because it is always possible to use a part of the planned profits to create
enough jobs to eliminate unemployment. In a mixed economy there is some
advantage in emphasizing the need of attaining full employment with the
understanding that it would be desirable, of course, to increase national income at the
same time as much as possible. The emphasis on employment is essentially short
range consideration; the long term, objective must be such maximization of income as
is capable of being realized under any given socio-political conditions.
2. Different models of economic growth are being constructed and studied on the basis
of different sets of relations (sometimes expressed in a mathematical form) between
relevant variables. The object of making different models is to explore a wide range
of possibilities which would give some guidance in the choice of the basic
approaches. A brief explanation is given in the note of one type of approach. It is
convenient to use numerical examples to explain the general procedure. But the
figures given here are used purely for purposes of illustration and no special
significance should be attached to them. In fact, the aim of the group studies relating
to planning is to make realistic estimates of these figures.
3. We assume that the net output of the economy is 100 of which 94 is consumer goods
and services and 6 is capital goods. We desire to increase the share of capital goods to
an average of 10 per cent. This would have to be done gradually. In the beginning, we
may have to import much capital goods from abroad. But it would be clearly more
economical to manufacture capital goods within the country. (For example, we are at
present importing machinery from abroad to build factories for the production of
steel. It is obviously desirable to construct a sufficiently large workshop to build
factories for steel production). This means developing the capital goods industries,
that is, increasing the production of investment in capital goods enterprises as much
as possible. At present only a small portion, possibly less than 10 per cent, of all
investments goes to capital goods industries. From preliminary studies it seems that
this proportion would have to be increased to, say, 30 per cent to double the national
income in 20 years. from the long range view point, it would be still better to push up
the share of heavy industries to 40 or even 50 per cent but this may be too difficult to
accomplish and too great a sacrifice of the present for the benefit of the future. We
may, therefore, adopt 30 per cent as the share of capital goods industries for purposes
of illustration – this means an allocation of 3 per cent of net national income or about
Rs.300 crores for investment in capital goods industries every year.
4. Having allocated 30 per cent of the investment to capital goods industries, we may
proceed to give, say 20 per cent to investments in large factories to manufacture
consumer goods, 25 per cent to agriculture and small industries, and 25 per cent to
services. On the basis of an initial investment rate to Rs.600 crores per year allocated
in the way mentioned above it is possible to study the changes in the national
economy in 10 years. We shall assume that the ratio of new income generated to
capital investment is one-fourth in the case of large scale enterprises to produce both
capital and consumer goods, half in the case of agriculture and small industries, and
one in planned services. We also assume for purposes of illustration that the average
amount of investment required per engaged person is Rs.10,000 for capital goods
industries, Rs.7,500 for consumer goods factories, and 1,000 for agriculture, small
industries and services. On certain plausible assumptions (and using a particular form
of a model of economic growth) it seems that at the end of 5 years the rate of
investment would increase to about Rs.860 crores per year; national income would
increase by 17 per cent, and new jobs created every year would be so large as nearly
48 lakhs. The rate of development would, however, become more rapid as time
progresses.
5. At the end of 10 years, the rate of investment would rise to over Rs. 1200 crores,
national income would increase by 42 per cent, and employment by nearly 70 lakhs
of jobs. (In fact such an increase of employment may not be even necessary in which
case the investment in small industries may be fixed at a lower level.)
6. In addition to the planned or directed investments (through, for example, the existing
control over capital issues) it is assumed that there would be an unplanned sector; and
also that it is possible to work out the relation and interaction between the planned
and the unplanned sectors. On the basis of such interaction it would be possible to
make a rough estimate of the total increase in national income and the portion
available for consumption.
7. At this stage it is necessary to consider the distribution of the increase in income
among the population. In principle, the distribution of income can be controlled to
some extent through taxation and other financial measures. It is, therefore, possible,
in principle, to lay down certain targets in the distribution of income. (This in fact is
one of the important responsibilities of Planning Authorities).
8. Once the desired distribution of income is settled, it would be possible to consider the
change in the demand of consumer goods and services. Purchasing power would
increase with rising income; and the demand for goods and services would increase in
a definite way depending on the nature of the commodities or services. Intensive

R Srivatsan A History of Development Thought For Routledge India

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R Srivatsan Dev Reader Introduction 11/20/2022 7

modern/backward, advanced/primitive, rich/poor, First World/Third World, North/South.

Insert Figure 1 here.

of thought’ according to Michel Foucault’s conceptualization of a broad discursive/practical formation that

Development: Supervised and hierarchical, or organic?

Industrial modernization, political stability and democracy

From this perspective, industrial modernization demands a level of institutionalized

II: Special Economic Zones

Section III: A conceptual overview of the extracts in the book

(welfare measures) through taxation to minimize the hardship of the transition to an

Drawing on Baran’s conceptualization of backwardness and on the insight about

Marxist theory’s focus on an organic development that generates the fabric of

Section IV: The World War Two beginnings of Development

Changes in Colonialism’s logic

Communist Perspectives and Pressures

Race and Development

Section V: The Indian freedom movement context

Passive Revolution of Capital

Logic of post Independence development administration

Section VI: Conclusion

The story/argument so far

emphasis on the different concepts, the different perspectives: industrial modernization;

The first objective

The second objective

to do in order to ‘develop’ according to our collective, if fractured genius. This

Low National Income Low governmental commitment to

Large Population, subsistence Poorly paid, unorganized labour

Figure I: A simple framework of Development concepts

SECTION I: EARLY THINKERS

MAHALANOBIS AND INDIAN PLANNING

Assessing the Nehru Mahalanobis model

Biographical Note: Prasanta Chandra Mahalanobis (1893-1972)

STUDIES RELATING TO PLANNING FOR NATIONAL

In 1953-54 an Operational Research Unit (ORU) was established in the Institute

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