Political contests over development
Development means a better life for people: more income, food, schools, health and fairness. In the 1950s 'development' often meant becoming modern like the West, but people disagreed on the path.
Two models
- Capitalist (market) model: private businesses decide, like the USA.
- Socialist (state-led) model: the government owns and plans, like the USSR.
India's choice: planning in a mixed economy
Almost everyone, including industrialists, agreed that the government should plan. In 1944 leading industrialists issued the Bombay Plan, asking the state to invest in industry. India chose a mixed economy: public and private sectors together.
Key debates
- Agriculture vs industry: should money go to farms or factories first?
- Public vs private sector: critics on the left said the plan helped big business; those on the right said too much state control slowed growth.
- Big vs small: Gandhian thinkers such as J.C. Kumarappa wanted village industries and rural focus.
- Choices about development are political because they decide who gains and who loses, for example, dams can displace villagers.
Early initiatives: the Planning Commission and the first plans
Planning Commission (1950)
Set up in March 1950 by a simple government resolution (not by the Constitution). The Prime Minister was its chairperson. It prepared Five Year Plans. In 2015 it was replaced by NITI Aayog.
First Five Year Plan (1951-56)
- Drafted with young economist K.N. Raj.
- Focus: agriculture, dams and irrigation (Bhakra Nangal), land reforms.
- Idea: go slow at first, raise savings.
Second Five Year Plan (1956-61)
- Led by statistician P.C. Mahalanobis.
- Focus: heavy industry, steel plants, power, machines; big role for the public sector.
- Protection for Indian industry with import taxes. Problem: shortage of foreign money.
Outcomes
- Foundations: big dams, steel plants, public sector units and research bodies.
- Land reforms: zamindari was abolished, land consolidation happened; land ceilings largely failed because landowners were powerful.
- Food crisis and Green Revolution: drought in the mid-1960s led to high-yield seeds, fertiliser and irrigation in some regions. Output rose, but rich farmers and certain regions gained more; farmers became a strong political force.
- Later shift: from 1991 India moved towards more private enterprise (liberalisation).
- Kerala model: focus on education, health, land reform and people's planning.
Try it
Use the 3D slider to share money between industry and agriculture. Predict what happens at 80% industry. Then read the caption. Ask at home: did your family's farm or village gain from any dam, canal or new seed?
Key formulas and definitions
- Development = growth + social justice
- Mixed economy = public sector + private sector
- Bombay Plan 1944 (industrialists) โ state to invest
- Planning Commission: March 1950, PM as chair; replaced by NITI Aayog 2015
- 1st Plan 1951-56: agriculture (K.N. Raj)
- 2nd Plan 1956-61: heavy industry (P.C. Mahalanobis)
- Green Revolution: mid-1960s, high-yield seeds
Worked examples
1. Why did the First Plan focus on agriculture?
Partition had badly hurt farming and food was short. Growing more food and building irrigation was the first need.
2. Why is the choice between agriculture and industry political?
It decides whose interests are served first: farmers and villages or industries and cities. Different groups and parties argue for their side.
3. Give one good and one bad effect of the Green Revolution.
Good: food grain output rose and India depended less on imports. Bad: richer farmers and regions like Punjab gained more, widening gaps.
Common mistakes
- Saying the Planning Commission was created by the Constitution. It was set up by a government resolution.
- Mixing the plans: the First was agriculture (K.N. Raj), the Second was industry (Mahalanobis).
- Thinking India copied the USSR fully. It chose a mixed economy with a private sector.
- Thinking land reforms fully succeeded. Zamindari ended but land ceilings largely failed.