Ramesh Singh Test : Planning in India- 2 - UPSC

• The credit of proposing the first blueprint of Indian planning is given to the popular civil engineer and the ex-Dewan of the Mysore state, M. Visvesvaraya.

• In his book The Planned Economy of India, published in 1934, he outlined the broad contours of his plan proposal. His ideas of state planning were an exercise in democratic capitalism (similar to the USA) with emphasis on industrialisation—a shift of labour from agricultural to industries, targeting to double the national income in one decade.

• By the late nineteenth century, the economic thinking of the nationalists (such as M.G. Ranade and Dadabhai Naroji) was in favour of a dominant role of the state in the economy and doubted the prudence of the ‘market mechanism'.

• This thinking was further reinforced by the Keynesian ideas in the wake of the Great Depression, the New Deal in the USA and the Soviet experiment in national planning.

• Thus, the Indian capitalist class were also influenced by these events which were voiced in the FICCI articulation for planning.

Following were the components of the Bombay plan -

• agrarian restructuring

• Rapid industrialisation

• development of the essential consumer goods

• medium scale, small scale and cottage industries

• state to play an active role

• social welfare The Gandhian plan articulated a decentralized economic structure for India.

• For Gandhi, the machinery, commercialisation and centralized state power were the curses of modern civilisation, thrust upon the Indian people by European colonialism.

• It was industrialism itself, Gandhi argued, rather than the inability to industrialise, which was the root cause of Indian poverty.

• This was until the 1940s that the Congress supported the above-given view of Gandhi to mobilise a mass movement against the colonial rule.

• 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 for providing the people with the necessities of life. Agricultural and industrial sectors, both were equally highlighted by the plan.

• The idea for the need for 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: (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 (groundwater, canal, etc.).

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

• The Third plan specifically incorporated the development of agriculture.

• The first plan accorded the highest priority to agriculture including irrigation and power projects.

• The second plan emphasized Rapid industrialization with the focus on heavy industries and capital goods.