🟩 Chapter 3 – Politics of Planned Development

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🔹 Introduction

• After gaining independence in 1947, India faced the twin challenges of nation-building and economic development.
• The country had inherited poverty, illiteracy, inequality, unemployment, and an undeveloped industrial base.
• Leaders like Jawaharlal Nehru emphasized that political democracy must be accompanied by economic democracy.
• Thus, the newly independent India adopted Planning as the key strategy for national development.
• Planning meant deliberate efforts by the government to allocate resources efficiently and promote balanced growth.
• The Indian government aimed at building a self-reliant economy that could ensure social and economic justice for all.

🔹 The Need for Planned Development

• At the time of independence, India’s economy was in ruins — agriculture was backward and industry was limited.
• The colonial economy had left the country dependent on imports and with poor infrastructure.
• The leadership wanted rapid economic growth to eliminate poverty and inequality.
• Democracy and development had to progress together, so that freedom would be meaningful to all citizens.
• Therefore, the state decided to play an active role in economic planning and development.
• The goal was to create a mixed economy, combining public and private sectors.

🔹 Establishment of the Planning Commission

• Planning Commission was set up in 1950 by a resolution of the Government of India.
• It was not created by the Constitution but by an executive order.
• Chairperson: The Prime Minister (Jawaharlal Nehru was the first Chairperson).
• Purpose: To formulate Five-Year Plans, assess resources, and monitor implementation.
• The Planning Commission became the key institution for guiding India’s economic strategy.
• It represented the vision of state-led development.

🔹 Objectives of Planned Development

The main objectives of planning in India were:

1. Economic Growth: To increase national income and per capita income.
2. Modernization: Adoption of new technology and scientific methods in production.
3. Self-Reliance: Reducing dependence on foreign aid and imports.
4. Equity and Social Justice: Reducing inequalities of income and wealth.
5. Employment Generation: Creating jobs and improving living standards.
6. Balanced Regional Development: Ensuring that all regions grow equally.

🔹 The First Five-Year Plan (1951–1956)

• Focused on agriculture, irrigation, and energy.
• Based on the Harrod-Domar Model for economic growth.
• Main goal: To rebuild the economy after the devastation of partition.
• Large investments were made in agriculture, rural development, and community projects.
• The Community Development Programme (1952) encouraged people’s participation in rural development.
• The Plan was successful — national income grew by 3.6%, exceeding the target of 2.1%.
• It helped to lay the foundation for future growth.

🔹 The Second Five-Year Plan (1956–1961)

• Focused on industrialization — especially heavy industries like steel, machinery, and engineering.
• Based on the Mahalanobis Model (developed by economist P.C. Mahalanobis).
• Emphasis was on the public sector to lead the process of development.
• Industries like steel plants at Bhilai, Rourkela, and Durgapur were set up.
• The plan aimed at reducing dependence on imports and building a strong industrial base.
• However, agriculture was neglected, leading to food shortages and inflation.
• Nevertheless, it marked India’s transition from an agrarian to an industrial economy.

🔹 The Third Five-Year Plan (1961–1966)

• Objective: To achieve self-reliance and self-sufficiency in food grains.
• Focused on agriculture and industry together.
• However, this plan faced serious problems —
  • The Indo-China War (1962),
  • Indo-Pak War (1965),
  • Drought (1965–66), and
  • Foreign exchange crisis.
• As a result, the plan failed to achieve its targets.
• The period 1966–1969 was called the Plan Holiday, when annual plans were implemented instead of five-year plans.

🔹 The Fourth Five-Year Plan (1969–1974)

• Objective: Growth with stability and self-reliance.
• Focus on agriculture and industrial growth simultaneously.
• Implementation of Green Revolution — use of HYV seeds, fertilizers, and irrigation to boost food production.
• This helped India become self-sufficient in food grains.
• However, inequality and poverty still persisted, especially in rural areas.

🔹 The Fifth Five-Year Plan (1974–1979)

• Main goals: Removal of poverty (Garibi Hatao) and self-reliance.
• Introduced welfare schemes and employment programs.
• Emphasis on energy and irrigation development.
• Growth rate was satisfactory, but due to political instability (Emergency period), the plan was terminated in 1978.

🔹 Democratic Politics and Development

• The Indian development model was based on democratic socialism — balancing democracy and economic equality.
• The government emphasized state control over key sectors like industry, banking, and transport.
• However, the private sector was also allowed to function within the framework of national priorities.
• The idea was to avoid both extremes — capitalism and communism.
• India’s planning process reflected the mixed economy model, ensuring both growth and justice.
• Planning became a political instrument for achieving economic and social change.

🔹 Political Conflicts Over Planning

1. The Debate on the Role of the State

• Some leaders believed that the state should control all resources and lead development.
• Others argued that excessive control discouraged private initiative and efficiency.
• The debate reflected the tension between state socialism and market liberalism.

2. Public vs Private Sector

• The public sector was assigned the “commanding heights” of the economy.
• However, it often suffered from bureaucracy, inefficiency, and corruption.
• The private sector complained of over-regulation and lack of freedom.

3. Centre–State Relations

• Planning was centralized through the Planning Commission, which sometimes led to conflict with state governments.
• States often demanded more autonomy in planning and resource allocation.

4. Poverty and Inequality

• Despite decades of planning, poverty reduction was slow.
• Critics argued that planning favored the rich and urban classes more than rural poor.

🔹 The Green Revolution and Its Impact

• Introduced in the mid-1960s with support from agricultural scientist M.S. Swaminathan.
• Aimed to achieve food security and reduce dependence on imports.
• Use of high-yield variety (HYV) seeds, chemical fertilizers, and irrigation improved crop output.
• Punjab, Haryana, and Western UP became major beneficiaries.
• India became self-sufficient in food grains by the 1970s.

However, it had drawbacks:

• Regional imbalance: only a few states benefited.
• Large farmers gained more, increasing inequality.
• Environmental problems like soil degradation and water scarcity emerged later.

🔹 Role of NITI Aayog (After 2015)

(Though not part of early chapters, useful for understanding transition)

• In 2015, the Planning Commission was replaced by NITI Aayog (National Institution for Transforming India).
• NITI Aayog promotes cooperative federalism and focuses on policy coordination between Centre and States.
• It acts more as a think tank than a control body.
• The shift marks the transition from centralized planning to strategic, participatory development.

🔹 Achievements of Planned Development

1. Economic Growth: India’s GDP increased steadily after 1951.
2. Industrialization: Creation of heavy industries, infrastructure, and scientific institutions.
3. Agricultural Development: Green Revolution ensured food security.
4. Self-Reliance: India reduced dependence on foreign aid and imports.
5. Social Development: Expansion of education, health, and employment programs.
6. Democratic Stability: Planning strengthened the democratic structure through inclusive policies.

🔹 Limitations of Planned Development

1. Slow Growth: Economic growth remained below targets in many plans.
2. Persistent Poverty: Large population continued to live below the poverty line.
3. Regional Imbalances: Unequal development among states.
4. Bureaucratic Inefficiency: Corruption and delays in public sector projects.
5. Dependence on Foreign Technology: Despite self-reliance goals, import dependence continued.
6. Neglect of Environment: Industrialization led to deforestation and pollution.

🔹 The Changing Vision of Development

• By the 1980s and 1990s, India began to rethink its development strategy.
• Focus shifted from state control to economic liberalization and market reforms.
• In 1991, economic reforms were introduced — encouraging private sector, globalization, and competition.
• This marked the beginning of a new phase of development based on liberalization.
• Yet, the legacy of planned development continues to influence India’s growth policies.

🔹 Political and Social Impact of Planning

• Planning strengthened the role of the central government in national policy.
• It also created new bureaucratic institutions and a class of technocrats.
• The success of democratic planning in India inspired other developing countries.
• However, planning also led to political debates about centralization, inequality, and economic freedom.
• Thus, planning became both a political and developmental tool.

🔹 Key Terms

🔹 Conclusion

• The Politics of Planned Development represents India’s effort to transform its economy and society through democratic means.
• It combined economic planning with political democracy, aiming for both growth and justice.
• Though planning achieved many successes — industrial base, self-sufficiency, and democratic stability — it also faced challenges like inequality and inefficiency.
• Over time, India adapted its development model to changing needs, moving from centralized planning to a more participatory approach.
• The spirit of inclusive and sustainable development continues to guide India’s progress today.