Page 1
In this chapter…
In the last two chapters we have studied how the leaders of independent
India responded to the challenges of nation-building and establishing
democracy. Let us now turn to the third challenge, that of economic
development to ensure well-being of all. As in the case of the first two
challenges, our leaders chose a path that was different and difficult. In
this case their success was much more limited, for this challenge was
tougher and more enduring.
In this chapter, we study the story of political choices involved in some
of the key questions of economic development.
• What were the key choices and debates about development?
? Which strategy was adopted by our leaders in the first two
decades? And why?
? What were the main achievements and limitations of this strategy?
? Why was this development strategy abandoned in later years?
Stamps like these,
issued mostly between
1955 and 1968,
depicted a vision of
planned development.
Left to right, top to
bottom: Damodar
Valley, Bhakra
Dam, Chittaranjan
Locomotives, Gauhati
Refinery, Tractor, Sindri
Fertilisers, Bhakra Dam,
Electric Train, Wheat
Revolution, Hirakud
Dam, Hindustan Aircraft
Factory
Page 2
In this chapter…
In the last two chapters we have studied how the leaders of independent
India responded to the challenges of nation-building and establishing
democracy. Let us now turn to the third challenge, that of economic
development to ensure well-being of all. As in the case of the first two
challenges, our leaders chose a path that was different and difficult. In
this case their success was much more limited, for this challenge was
tougher and more enduring.
In this chapter, we study the story of political choices involved in some
of the key questions of economic development.
• What were the key choices and debates about development?
? Which strategy was adopted by our leaders in the first two
decades? And why?
? What were the main achievements and limitations of this strategy?
? Why was this development strategy abandoned in later years?
Stamps like these,
issued mostly between
1955 and 1968,
depicted a vision of
planned development.
Left to right, top to
bottom: Damodar
Valley, Bhakra
Dam, Chittaranjan
Locomotives, Gauhati
Refinery, Tractor, Sindri
Fertilisers, Bhakra Dam,
Electric Train, Wheat
Revolution, Hirakud
Dam, Hindustan Aircraft
Factory
3
chapter
politics of planned
development
As the global demand for steel increases, Orissa, which has one of
the largest reserves of untapped iron ore in the country, is being
seen as an important investment destination. The State government
hopes to cash in on this unprecedented demand for iron ore and
has signed Memorandum of Understanding (MoU) with both
international and domestic steel makers. The government believes
that this would bring in necessary capital investment and proivde a
lot of employment opportunities. The iron ore resources lie in some
of the most underdeveloped and predominantly tribal districts of the
state. The tribal population fears that the setting up of industries
would mean displacement from their home and livelihood. The
environmentalists fear that mining and industry would
pollute the environment. The central government feels
that if the industry is not allowed it would set a bad
example and discourage investments in the country.
Can you identify the various interests involved in this
case? What are their key points of conflict? Do you think
there are any common points on which everyone can
agree? Can this issue be resolved in a way which satisfies
all the various interests? As you ask these questions, you
would find yourself facing yet bigger questions. What
kind of development does Orissa need? Indeed, whose
need can be called Orissa’s need?
Political contestation
These questions cannot be answered by an expert.
Decisions of this kind involve weighing the interests of
one social group against another, present generation
against future generations. In a democracy such major
decisions should be taken or at least approved by the
people themselves. It is important to take advice from
experts on mining, from environmentalists and from
economists. Yet the final decision must be a political
decision, taken by people’s representatives who are in
touch with the feelings of the people.
After Independence our country had to make a series
of major decisions like this. Each of these decisions
could not be made independent of other such decisions.
All these decisions were bound together by a shared
vision or model of economic development. Almost
Orissa villagers protest
against POSCO plant
Staff Reporter
BHUBANESWAR: People facing
displacement by the proposed
POSCO-India steel plant in
Jagatsinghpur district staged
a demonstration outside the
Korean company’s office here on
Thursday. They were demanding
cancellation of the memorandum of
understanding signed between the
company and the Orissa government
one year ago.
More than 100 men and women
from the gram panchayats of
Dhinkia, Nuagaon and Gadakujanga
tried to enter the office premises
but the police prevented them.
Raising slogans, the protesters
said the company should not be
allowed to set up its plant at the cost
of their lives and livelihood. The
demonstration was organised by the
Rashtriya Yuva Sangathan and the
Nabanirman Samiti.
The Hindu, 23 June 2006
Page 3
In this chapter…
In the last two chapters we have studied how the leaders of independent
India responded to the challenges of nation-building and establishing
democracy. Let us now turn to the third challenge, that of economic
development to ensure well-being of all. As in the case of the first two
challenges, our leaders chose a path that was different and difficult. In
this case their success was much more limited, for this challenge was
tougher and more enduring.
In this chapter, we study the story of political choices involved in some
of the key questions of economic development.
• What were the key choices and debates about development?
? Which strategy was adopted by our leaders in the first two
decades? And why?
? What were the main achievements and limitations of this strategy?
? Why was this development strategy abandoned in later years?
Stamps like these,
issued mostly between
1955 and 1968,
depicted a vision of
planned development.
Left to right, top to
bottom: Damodar
Valley, Bhakra
Dam, Chittaranjan
Locomotives, Gauhati
Refinery, Tractor, Sindri
Fertilisers, Bhakra Dam,
Electric Train, Wheat
Revolution, Hirakud
Dam, Hindustan Aircraft
Factory
3
chapter
politics of planned
development
As the global demand for steel increases, Orissa, which has one of
the largest reserves of untapped iron ore in the country, is being
seen as an important investment destination. The State government
hopes to cash in on this unprecedented demand for iron ore and
has signed Memorandum of Understanding (MoU) with both
international and domestic steel makers. The government believes
that this would bring in necessary capital investment and proivde a
lot of employment opportunities. The iron ore resources lie in some
of the most underdeveloped and predominantly tribal districts of the
state. The tribal population fears that the setting up of industries
would mean displacement from their home and livelihood. The
environmentalists fear that mining and industry would
pollute the environment. The central government feels
that if the industry is not allowed it would set a bad
example and discourage investments in the country.
Can you identify the various interests involved in this
case? What are their key points of conflict? Do you think
there are any common points on which everyone can
agree? Can this issue be resolved in a way which satisfies
all the various interests? As you ask these questions, you
would find yourself facing yet bigger questions. What
kind of development does Orissa need? Indeed, whose
need can be called Orissa’s need?
Political contestation
These questions cannot be answered by an expert.
Decisions of this kind involve weighing the interests of
one social group against another, present generation
against future generations. In a democracy such major
decisions should be taken or at least approved by the
people themselves. It is important to take advice from
experts on mining, from environmentalists and from
economists. Yet the final decision must be a political
decision, taken by people’s representatives who are in
touch with the feelings of the people.
After Independence our country had to make a series
of major decisions like this. Each of these decisions
could not be made independent of other such decisions.
All these decisions were bound together by a shared
vision or model of economic development. Almost
Orissa villagers protest
against POSCO plant
Staff Reporter
BHUBANESWAR: People facing
displacement by the proposed
POSCO-India steel plant in
Jagatsinghpur district staged
a demonstration outside the
Korean company’s office here on
Thursday. They were demanding
cancellation of the memorandum of
understanding signed between the
company and the Orissa government
one year ago.
More than 100 men and women
from the gram panchayats of
Dhinkia, Nuagaon and Gadakujanga
tried to enter the office premises
but the police prevented them.
Raising slogans, the protesters
said the company should not be
allowed to set up its plant at the cost
of their lives and livelihood. The
demonstration was organised by the
Rashtriya Yuva Sangathan and the
Nabanirman Samiti.
The Hindu, 23 June 2006
48 Politics in India since Independence
I thought the
connection was simpler!
All big decisions involve
big money and that is
why politicians take
these decisions.
everyone agreed that the development
of India should mean both economic
growth and social and economic
justice. It was also agreed that this
matter cannot be left to businessmen,
industrialists and farmers themselves,
that the government should play a key
role in this. There was disagreement,
however, on the kind of role that the
government must play in ensuring
growth with justice. Was it necessary
to have a centralised institution to
plan for the entire country? Should
the government itself run some key
industries and business? How much
importance was to be attached to the
needs of justice if it differed from the
requirements of economic growth?
Each of these questions involved
contestation which has continued ever
since. Each of the decision had political
consequence. Most of these issues involved political judgement and
required consultations among political parties and approval of the
public. That is why we need to study the process of development as a
part of the history of politics in India.
Ideas of development
Very often this contestation involves the very idea of development. The
example of Orissa shows us that it is not enough to say that everyone
wants development. For ‘development’ has different meanings for
different sections of the people. Development would mean different
things for example, to an industrialist who is planning to set up a
steel plant, to an urban consumer of steel and to the Adivasi who
lives in that region. Thus any discussion on development is bound to
generate contradictions, conflicts and debates.
The first decade after Independence witnessed a lot of debate around
this question. It was common then, as it is even now, for people to refer
to the ‘West’ as the standard for measuring development. ‘Development’
was about becoming more ‘modern’ and modern was about becoming
more like the industrialised countries of the West. This is how common
people as well as the experts thought. It was believed that every country
would go through the process of modernisation as in the West, which
involved the breakdown of traditional social structures and the rise
of capitalism and liberalism. Modernisation was also associated with
the ideas of growth, material progress and scientific rationality. This
kind of idea of development allowed everyone to talk about different
countries as developed, developing or underdeveloped.
What is Left and what is Right?
In the politics of most countries, you will always
come across references to parties and groups
with a Left or Right ideology or leaning. These terms
characterise the position of the concerned groups or
parties regarding social change and role of the state
in effecting economic redistribution. Left often refers
to those who are in favour of the poor, downtrodden
sections and support government policies for the
benefit of these sections. The Right refers to those
who believe that free competition and market economy
alone ensure progress and that the government should
not unnecessarily intervene in the economy.
Can you tell which of the parties in the 1960s were
Rightist and which were the Left parties? Where
would you place the Congress party of that time?
Page 4
In this chapter…
In the last two chapters we have studied how the leaders of independent
India responded to the challenges of nation-building and establishing
democracy. Let us now turn to the third challenge, that of economic
development to ensure well-being of all. As in the case of the first two
challenges, our leaders chose a path that was different and difficult. In
this case their success was much more limited, for this challenge was
tougher and more enduring.
In this chapter, we study the story of political choices involved in some
of the key questions of economic development.
• What were the key choices and debates about development?
? Which strategy was adopted by our leaders in the first two
decades? And why?
? What were the main achievements and limitations of this strategy?
? Why was this development strategy abandoned in later years?
Stamps like these,
issued mostly between
1955 and 1968,
depicted a vision of
planned development.
Left to right, top to
bottom: Damodar
Valley, Bhakra
Dam, Chittaranjan
Locomotives, Gauhati
Refinery, Tractor, Sindri
Fertilisers, Bhakra Dam,
Electric Train, Wheat
Revolution, Hirakud
Dam, Hindustan Aircraft
Factory
3
chapter
politics of planned
development
As the global demand for steel increases, Orissa, which has one of
the largest reserves of untapped iron ore in the country, is being
seen as an important investment destination. The State government
hopes to cash in on this unprecedented demand for iron ore and
has signed Memorandum of Understanding (MoU) with both
international and domestic steel makers. The government believes
that this would bring in necessary capital investment and proivde a
lot of employment opportunities. The iron ore resources lie in some
of the most underdeveloped and predominantly tribal districts of the
state. The tribal population fears that the setting up of industries
would mean displacement from their home and livelihood. The
environmentalists fear that mining and industry would
pollute the environment. The central government feels
that if the industry is not allowed it would set a bad
example and discourage investments in the country.
Can you identify the various interests involved in this
case? What are their key points of conflict? Do you think
there are any common points on which everyone can
agree? Can this issue be resolved in a way which satisfies
all the various interests? As you ask these questions, you
would find yourself facing yet bigger questions. What
kind of development does Orissa need? Indeed, whose
need can be called Orissa’s need?
Political contestation
These questions cannot be answered by an expert.
Decisions of this kind involve weighing the interests of
one social group against another, present generation
against future generations. In a democracy such major
decisions should be taken or at least approved by the
people themselves. It is important to take advice from
experts on mining, from environmentalists and from
economists. Yet the final decision must be a political
decision, taken by people’s representatives who are in
touch with the feelings of the people.
After Independence our country had to make a series
of major decisions like this. Each of these decisions
could not be made independent of other such decisions.
All these decisions were bound together by a shared
vision or model of economic development. Almost
Orissa villagers protest
against POSCO plant
Staff Reporter
BHUBANESWAR: People facing
displacement by the proposed
POSCO-India steel plant in
Jagatsinghpur district staged
a demonstration outside the
Korean company’s office here on
Thursday. They were demanding
cancellation of the memorandum of
understanding signed between the
company and the Orissa government
one year ago.
More than 100 men and women
from the gram panchayats of
Dhinkia, Nuagaon and Gadakujanga
tried to enter the office premises
but the police prevented them.
Raising slogans, the protesters
said the company should not be
allowed to set up its plant at the cost
of their lives and livelihood. The
demonstration was organised by the
Rashtriya Yuva Sangathan and the
Nabanirman Samiti.
The Hindu, 23 June 2006
48 Politics in India since Independence
I thought the
connection was simpler!
All big decisions involve
big money and that is
why politicians take
these decisions.
everyone agreed that the development
of India should mean both economic
growth and social and economic
justice. It was also agreed that this
matter cannot be left to businessmen,
industrialists and farmers themselves,
that the government should play a key
role in this. There was disagreement,
however, on the kind of role that the
government must play in ensuring
growth with justice. Was it necessary
to have a centralised institution to
plan for the entire country? Should
the government itself run some key
industries and business? How much
importance was to be attached to the
needs of justice if it differed from the
requirements of economic growth?
Each of these questions involved
contestation which has continued ever
since. Each of the decision had political
consequence. Most of these issues involved political judgement and
required consultations among political parties and approval of the
public. That is why we need to study the process of development as a
part of the history of politics in India.
Ideas of development
Very often this contestation involves the very idea of development. The
example of Orissa shows us that it is not enough to say that everyone
wants development. For ‘development’ has different meanings for
different sections of the people. Development would mean different
things for example, to an industrialist who is planning to set up a
steel plant, to an urban consumer of steel and to the Adivasi who
lives in that region. Thus any discussion on development is bound to
generate contradictions, conflicts and debates.
The first decade after Independence witnessed a lot of debate around
this question. It was common then, as it is even now, for people to refer
to the ‘West’ as the standard for measuring development. ‘Development’
was about becoming more ‘modern’ and modern was about becoming
more like the industrialised countries of the West. This is how common
people as well as the experts thought. It was believed that every country
would go through the process of modernisation as in the West, which
involved the breakdown of traditional social structures and the rise
of capitalism and liberalism. Modernisation was also associated with
the ideas of growth, material progress and scientific rationality. This
kind of idea of development allowed everyone to talk about different
countries as developed, developing or underdeveloped.
What is Left and what is Right?
In the politics of most countries, you will always
come across references to parties and groups
with a Left or Right ideology or leaning. These terms
characterise the position of the concerned groups or
parties regarding social change and role of the state
in effecting economic redistribution. Left often refers
to those who are in favour of the poor, downtrodden
sections and support government policies for the
benefit of these sections. The Right refers to those
who believe that free competition and market economy
alone ensure progress and that the government should
not unnecessarily intervene in the economy.
Can you tell which of the parties in the 1960s were
Rightist and which were the Left parties? Where
would you place the Congress party of that time?
Politics of Planned Development 49
On the eve of Independence, India had before it, two models
of modern development: the liberal-capitalist model as in much of
Europe and the US and the socialist model as in the USSR. You have
already studied these two ideologies and read about the ‘cold war’
between the two super powers. There were many in India then who
were deeply impressed by the Soviet model of development. These
included not just the leaders of the Communist Party of India, but
also those of the Socialist Party and leaders like Nehru within the
Congress. There were very few supporters of the American style
capitalist development.
This reflected a broad consensus that had developed during
the national movement. The nationalist leaders were clear that the
economic concerns of the government of free India would have to
be different from the narrowly defined commercial functions of the
colonial government. It was clear, moreover, that the task of poverty
alleviation and social and economic redistribution was being seen
primarily as the responsibility of the government. There were debates
among them. For some, industrialisation seemed to be the preferred
path. For others, the development of agriculture and in particular
alleviation of rural poverty was the priority.
Planning
Despite the various differences, there was a consensus on one point:
that development could not be left to private actors, that there was the
need for the government to develop a design or plan for development.
In fact the idea of planning as a process of rebuilding economy earned
a good deal of public support in the 1940s and 1950s all over the
world. The experience of Great Depression in Europe, the inter-war
Are you saying
we don’t have
to be western
in order to be
modern? Is that
possible?
Credit: Hindustan Times
Nehru
addressing
the staff of
the Planning
Commission
Page 5
In this chapter…
In the last two chapters we have studied how the leaders of independent
India responded to the challenges of nation-building and establishing
democracy. Let us now turn to the third challenge, that of economic
development to ensure well-being of all. As in the case of the first two
challenges, our leaders chose a path that was different and difficult. In
this case their success was much more limited, for this challenge was
tougher and more enduring.
In this chapter, we study the story of political choices involved in some
of the key questions of economic development.
• What were the key choices and debates about development?
? Which strategy was adopted by our leaders in the first two
decades? And why?
? What were the main achievements and limitations of this strategy?
? Why was this development strategy abandoned in later years?
Stamps like these,
issued mostly between
1955 and 1968,
depicted a vision of
planned development.
Left to right, top to
bottom: Damodar
Valley, Bhakra
Dam, Chittaranjan
Locomotives, Gauhati
Refinery, Tractor, Sindri
Fertilisers, Bhakra Dam,
Electric Train, Wheat
Revolution, Hirakud
Dam, Hindustan Aircraft
Factory
3
chapter
politics of planned
development
As the global demand for steel increases, Orissa, which has one of
the largest reserves of untapped iron ore in the country, is being
seen as an important investment destination. The State government
hopes to cash in on this unprecedented demand for iron ore and
has signed Memorandum of Understanding (MoU) with both
international and domestic steel makers. The government believes
that this would bring in necessary capital investment and proivde a
lot of employment opportunities. The iron ore resources lie in some
of the most underdeveloped and predominantly tribal districts of the
state. The tribal population fears that the setting up of industries
would mean displacement from their home and livelihood. The
environmentalists fear that mining and industry would
pollute the environment. The central government feels
that if the industry is not allowed it would set a bad
example and discourage investments in the country.
Can you identify the various interests involved in this
case? What are their key points of conflict? Do you think
there are any common points on which everyone can
agree? Can this issue be resolved in a way which satisfies
all the various interests? As you ask these questions, you
would find yourself facing yet bigger questions. What
kind of development does Orissa need? Indeed, whose
need can be called Orissa’s need?
Political contestation
These questions cannot be answered by an expert.
Decisions of this kind involve weighing the interests of
one social group against another, present generation
against future generations. In a democracy such major
decisions should be taken or at least approved by the
people themselves. It is important to take advice from
experts on mining, from environmentalists and from
economists. Yet the final decision must be a political
decision, taken by people’s representatives who are in
touch with the feelings of the people.
After Independence our country had to make a series
of major decisions like this. Each of these decisions
could not be made independent of other such decisions.
All these decisions were bound together by a shared
vision or model of economic development. Almost
Orissa villagers protest
against POSCO plant
Staff Reporter
BHUBANESWAR: People facing
displacement by the proposed
POSCO-India steel plant in
Jagatsinghpur district staged
a demonstration outside the
Korean company’s office here on
Thursday. They were demanding
cancellation of the memorandum of
understanding signed between the
company and the Orissa government
one year ago.
More than 100 men and women
from the gram panchayats of
Dhinkia, Nuagaon and Gadakujanga
tried to enter the office premises
but the police prevented them.
Raising slogans, the protesters
said the company should not be
allowed to set up its plant at the cost
of their lives and livelihood. The
demonstration was organised by the
Rashtriya Yuva Sangathan and the
Nabanirman Samiti.
The Hindu, 23 June 2006
48 Politics in India since Independence
I thought the
connection was simpler!
All big decisions involve
big money and that is
why politicians take
these decisions.
everyone agreed that the development
of India should mean both economic
growth and social and economic
justice. It was also agreed that this
matter cannot be left to businessmen,
industrialists and farmers themselves,
that the government should play a key
role in this. There was disagreement,
however, on the kind of role that the
government must play in ensuring
growth with justice. Was it necessary
to have a centralised institution to
plan for the entire country? Should
the government itself run some key
industries and business? How much
importance was to be attached to the
needs of justice if it differed from the
requirements of economic growth?
Each of these questions involved
contestation which has continued ever
since. Each of the decision had political
consequence. Most of these issues involved political judgement and
required consultations among political parties and approval of the
public. That is why we need to study the process of development as a
part of the history of politics in India.
Ideas of development
Very often this contestation involves the very idea of development. The
example of Orissa shows us that it is not enough to say that everyone
wants development. For ‘development’ has different meanings for
different sections of the people. Development would mean different
things for example, to an industrialist who is planning to set up a
steel plant, to an urban consumer of steel and to the Adivasi who
lives in that region. Thus any discussion on development is bound to
generate contradictions, conflicts and debates.
The first decade after Independence witnessed a lot of debate around
this question. It was common then, as it is even now, for people to refer
to the ‘West’ as the standard for measuring development. ‘Development’
was about becoming more ‘modern’ and modern was about becoming
more like the industrialised countries of the West. This is how common
people as well as the experts thought. It was believed that every country
would go through the process of modernisation as in the West, which
involved the breakdown of traditional social structures and the rise
of capitalism and liberalism. Modernisation was also associated with
the ideas of growth, material progress and scientific rationality. This
kind of idea of development allowed everyone to talk about different
countries as developed, developing or underdeveloped.
What is Left and what is Right?
In the politics of most countries, you will always
come across references to parties and groups
with a Left or Right ideology or leaning. These terms
characterise the position of the concerned groups or
parties regarding social change and role of the state
in effecting economic redistribution. Left often refers
to those who are in favour of the poor, downtrodden
sections and support government policies for the
benefit of these sections. The Right refers to those
who believe that free competition and market economy
alone ensure progress and that the government should
not unnecessarily intervene in the economy.
Can you tell which of the parties in the 1960s were
Rightist and which were the Left parties? Where
would you place the Congress party of that time?
Politics of Planned Development 49
On the eve of Independence, India had before it, two models
of modern development: the liberal-capitalist model as in much of
Europe and the US and the socialist model as in the USSR. You have
already studied these two ideologies and read about the ‘cold war’
between the two super powers. There were many in India then who
were deeply impressed by the Soviet model of development. These
included not just the leaders of the Communist Party of India, but
also those of the Socialist Party and leaders like Nehru within the
Congress. There were very few supporters of the American style
capitalist development.
This reflected a broad consensus that had developed during
the national movement. The nationalist leaders were clear that the
economic concerns of the government of free India would have to
be different from the narrowly defined commercial functions of the
colonial government. It was clear, moreover, that the task of poverty
alleviation and social and economic redistribution was being seen
primarily as the responsibility of the government. There were debates
among them. For some, industrialisation seemed to be the preferred
path. For others, the development of agriculture and in particular
alleviation of rural poverty was the priority.
Planning
Despite the various differences, there was a consensus on one point:
that development could not be left to private actors, that there was the
need for the government to develop a design or plan for development.
In fact the idea of planning as a process of rebuilding economy earned
a good deal of public support in the 1940s and 1950s all over the
world. The experience of Great Depression in Europe, the inter-war
Are you saying
we don’t have
to be western
in order to be
modern? Is that
possible?
Credit: Hindustan Times
Nehru
addressing
the staff of
the Planning
Commission
50 Politics in India since Independence
Planning Commission
Do you recall any reference to the Planning Commission in your book
Constitution at Work last year? Actually there was none, for the Planning
Commission is not one of the many commissions and other bodies set up by
the Constitution. The Planning Commission was set up in March, 1950 by a
simple resolution of the Government of India. It has an advisory role and its
recommendations become effective only when the Union Cabinet approved
these. The resolution which set up the Commission defined the scope of its
work in the following terms :
“The Constitution of India has guaranteed certain Fundamental Rights to the
citizens of India and enunciated certain Directive Principles of State Policy,
in particular, that the State shall strive to promote the welfare of the people
by securing and protecting….a social order in which justice, social, economic
and political, shall …….. …. direct its policy towards securing, among other
things,
(a) that the citizens, men and women equally, have the right to an
adequate means of livelihood ;
(b) that the ownership and control of the material resources of the
community are so distributed as best to subserve the common good;
and
(c) that the operation of the economic system does not result in
the concentration of wealth and means of production to the common
detriment.
I wonder if the Planning
Commission has
actually followed these
objectives in practice.
Credit:Ninan
Read More