Indian Economy, 5th edition (12 page)

The
p
eople’s Plan

In 1945, yet another plan was formulated by the radical humanist leader M.N. Roy, chairman of the Post-War Reconstruction Committee of Indian Trade Union. The plan was based on Marxist socialism and advocated the need of providing the people with the ‘basic necessities of life’.
24
Agricultural and industrial sectors, both were equally highlighted by the plan. Many economists have attributed the socialist leanings in Indian planning to this plan. The common minimum programmes of the United Front Government of the mid-nineties (20
th
century) and that of the United Progressive Alliance of 2004 may also be thought to have been inspired from the same plan. ‘Economic reforms with the human face’, the slogan with which the economic reforms started early 1990s has also the resonance of the People’s Plan.

The Sarvodaya Plan

After the reports of the NPC were published and the Government was set to go for the five-year Plans, a lone blueprint for the planned development of India was formulated by the famous socialist leader Jaiprakash Narayan—the Sarvodaya Plan published in January 1950. The plan drew its major inspirations from the Gandhian techniques of constructive works by the community and trusteeship as well as the Sarvodaya concept of Acharya Vinoba Bave, the eminent Gandhian constructive worker. Major ideas of the plan were highly similar to the Gandhian Plan like emphasis on agriculture, agri-based small and cottage industries, self-reliance and almost no dependence on foreign capital and technology, land reforms, self-dependent villages and decentralised participatory form of planning and economic progress, to name the major ones.
25
Some of the acceptable ideas of the plan got their due importance when the Government of India promoted five year plans.

By the early 1960s, Jayprakash Narayan had become highly critical of the Indian planning process especially of its increasing centralising nature and dilution of people’s participation in it. Basically, the very idea of democratic decentralisation was disliked by the established power structure, namely, the MLAs/MPs, the bureaucracy and the state-level politicians.
26
This led the Jayprakash Narayan Committee (1961) to observe against the centralising nature of the Indian planning. The committee pointed out that after having accepted Panchayati Raj as the agency responsible for planning and execution of plans, there is “no longer any valid reason for continuing the individual allocations subjectwise even to serve as a guide.”
27

Disregarding the humble advice of the committee, central schemes like small farmers development agency (SFDA), drought-prone area programme (DPAP), intensive tribal development programme (ITDP), intensive agricultural district programme (IADP), etc. were introduced by the Governments and were put totally outside the purview of Panchayats.

It was only after the 73rd and 74th Amendments effected to the Constitution (1992) that the role of local bodies and their importance in the process of planned development was accepted and the views of Jayprakash got vindicated.

Some Area-wise Reports

The idea for the need of a planned development of India became more and more popular by the decade of the 1940s. It was under this popular pressure that the Government of India started taking some planned actions in this direction. In the 1940s, we see several area-specific reports being published:
28

(i)
Gadgil Report on Rural Credit

(ii)
Kheragat Report on Agricultural Development

(iii)
Krishnamachari Report on Agricultural Prices

(iv)
Saraiya Report on Cooperatives

(v)
A series of Reports on Irrigation (ground water, canal, etc.)

All these reports, though prepared with great care and due scholarship, the Government had hardly any zeal to implement plans on their findings. But independent India was greatly benefited when the planning started covering all these areas of concerns.

There is no doubt in drawing the conclusion that prior to independence, there was thus a significant measure of agreement in India between the Government of India under the Secretary of State, the Indian National Congress, prominent industrialists and the others on the following principles:
29

(i)
There should be central planning, in which the state should play an active part, for social and economic development to bring about a rapid rise in the standards of living;

(ii)
There should be controls and licencing in order, among other things, to direct investments into the desired channels and ensure equitable distribution;

(iii)
While there should be balanced development in all sectors of the economy, the establishment of basic industries was specially important. In this, State-owned and state-managed enterprises have an inportant role. There were, however, differences of approach with regard to the specific fields to be allocated to the public and private sectors.

It is highly interesting and important to note that all the above agreements and opinions were reached through an evolutionary manner in the last two-decades before independence in the deliberations and excercises regarding the need for economic planning in the country.

“The plans prepared by the Governmnt of India, the Bombay Plan and other above-discussed plans (except the NPC and the Sarvodaya Plan) suffered from serious limitations. When they were prepared, it was known that transfer of power was to take place quite soon; but the exact form of the future government was not known, the plans consisted largely of proposals of experts which were not effectively co-ordinated. They had no social philosophy behind them. With the advent of independence, they became inadequate, though the thinking that had taken place on planning generally and its techniques proved useful for the future.”
30

Major OBJECTIVES OF PLANNING

Planning for India was an instrument to realise the aspirations and dreams of the future. We know that the foundations of future India were not laid in one day. The cherished dream about future India had evolved through a long-drawn process of the entire period of the freedom struggle. These aspirations and goals got their proper places and due importance in the reports of the National Planning Committee (NPC), in the deliberations of the Constituent Assembly and finally in the Constitution of India. From the margins of the ripening nationalist movement as well as taking clues from the Soviet and the French styles of planning, the NPC articulated the objectives of planning in India. The process of planning in India tried to include all the aspirations of nationalist movement as well as of the future generations. But this will be a highly general comment upon the objectives of planning in India. We need to delve into the specific and objective goals of planning in India to further our discussions. Some of the historic deliberations regarding planning will serve our purpose:

1. Reviewing the entire situation, in the light of the social philosophy evolved over decades, the Constituent Assembly came to the conclusion that to guide this ‘revolution of rising expectations’ into constructive channels, India should make determined efforts through carefully planned
large-scale social and economic development and the application of modern scientific and technological improvements, to bring about a rapid and appreciable rise in the standard of living of the people, with the maximum measure of social justice attainable. On the whole it was a call for India becoming a Welfare state.
31
This important deliberation does not only call for the necessity of planning for the country but it also outlines the broader objectives of planning, too.

2.
There are three important features included by the Constitutional provisions which pertain to the objectives of planning in the country:
32

(i)
‘Economic and social planning’ is a concurrent subject. Also, while framing the ‘Union’, ‘State’ and ‘Concurrent’ list, allocating subjects and other provisions, the Constitution vests power in the Union to ensure co-ordinated development in essential fields of activity while preserving the initiative and authority of the states in the spheres allotted to them.

(ii)
The Constitution includes provisions for promoting co-operation on a voluntary basis between the Union and the states and among states and groups of states in investigation of matters of common interest, in legislative procedures and in administration, thus avoiding the rigidities inherent in federal constitutions (Articles 249, 252, 257, 258, 258-A, and 312). In other words, the objective is co-operative federalism.

(iii)
The Constitution also sets out in broad outline the pattern of the welfare state envisaged and the fundamental principles on which it should rest.

These are the major cornerstones of planning and its objectives enshrined in the Constitution that will breed enough Union–State tussle in coming decades and make it compulsive for the Government to resort to ‘reforms with a human face’ rhetoric.We can see the methodology of planning taking a U-turn in the era of the economic reforms since early 1990s.

3.
The Government resolution announcing the setting up of the Planning Commission (March 1950) started with a reference to the constitutional provisions bearing on the socio-economic objectives of the Constitution. The Fundamental Rights and the Directive Principles of the Constitution assure every citizen, among other things, adequate means of livelihood, opportunities for employment and a socioeconomic order based on justice and equality. Thus, the basic objectives
33
of planning were already given in the provisions of the Constitution of India. These were emphatically stated in the
f
irst
f
ive-Year Plan (1951–56) itself, in the following words:

“The urge to economic and social change under present conditions comes from the facts of poverty and of inequalities in income, wealth and opportunity. The elimination of poverty cannot obviously, be achieved merely by redistributing existing wealth. Nor can a programme aiming only at raising production remove existing inequalities. These two have to be considered together......”

4.
The above objectives of planning were emphasised in one form or the other in the coming times also. As the Second Five-Year Plan (1956–61) said:

“The Plan has to carry forward the process initiated in the First Plan period. It must provide for a larger increase in production, in investment and in employment. Simultaneously, it must accelerate the institutional changes needed to make the economy more dynamic and more progressive in terms no less of social than of economic ends.”

5.
The same objectives were repeated by the Sixth Five-Year Plan (1980–85) in the following words:

“The basic task of economic planning in India is to bring about a structural transformation of the economy so as to achieve a high and sustained rate of growth, a progressive improvement in the standard of living of the masses leading to eradication of poverty and unemployment and providing a material base for a self-reliant economy.”

6.
It will be highly needful to enquire about the objectives
of planning in the era of the economic reforms initiated in the fiscal 1991–92 as this new economic policy (NEP) made the experts and economists to conclude many questionable things about the objectives of planning in the country:

(i)
There did hd on the wage employments still, others based on self-employment.

(ii)
The state is rolling back and the economy is becoming pro-private and sector-wise the social purpose of the planning will be lacking.

(iii)
The objectives of planning nearly outlined hitherto have been blurred.

(iv)
The promotion of foreign investment will induce the economy into the perils of neo-imperialism, etc.

But all the above-given doubts were cleared by the forthcoming plans in straightforward words. We may quote from the following Plans:

(i)
“For the future economic development, the economy will be more dependent upon private participation and the nature of planning will become more indicative with the major objectives of planning remaining the same”. This was announced by the Government while launching the economic reforms (July 23, 1991) and commencing the Eighth five-year Plan (1992–97). “There was no change in the basic objectives of planning even though there was change in instruments of policy”—this was announced by the Government while announcing the new economic policy (1991).

(ii)
While the Ninth Plan (1997–2002) was being launched it was announced, “The goals of planning in India, which were set by Panditji have not changed. The Ninth Plan does not attempt to reinvent the wheel. At the same time, the goals and targets this Plan attempts to achieve are based on the lessons of experience including the Eighth Plan. They address today’s problems and challenges and try to prepare the nation for tomorrow as well.”
34

Finally, a broad consensus looks evolving through the process of planning and crystallising on the six major objectives of planning
35
in India which are as follows:

(i)
Economic Growth:
Sustained increase in the levels of production in the economy is among the foremost objectives of planning in India which continues till date and will be so in future, without any iota of doubt in it.

(ii)
Poverty Alleviation:
Poverty alleviation was the most important issue which polarised the members of the NPC as well as the Constituent Assembly that a highly emphatic decision in favour of a planned economy evolved even before independence. Several programmes have been launched in India directing the cause of poverty alleviation by all the Governments till date and the process continues even today with more seriousness (we see the National Rural Employment Guarantee Programme—NREGP—being launched by the UPA Government in 2006 by passing an Act in the Parliament—the matter has started attracting such high political concern!).