Planning in India

First Soviet plan commenced in 1928 but the world outside was unaware
of modus operandi of development plan till the 1930s. It was exodus of the east
European economists to Britain and USA in 1920s and 1930s that made the
world aware as to what economic/national planning was all about.
The whole decade of 1930s in the Indian history when we see nationalists,
capitalists, socialists, democrats and academicians advocating for the need of an
economic planning in India at point or another. Independent India was thus
destined to be a planned Economy.

Background
Many fresh proposals of planning were being suggested for India by 1930s
but British govt. remained almost immune to them. These humble proposals of
planning served their purpose once independent India decided to adopt the
planned economy.

The Visvesvaraya Plan

The credit of proposing the first blueprint of Indian planning goes to the
popular civil engineer and ex-dewan of Mysore state M Visvesvaraya in his book
The Planned Economy of India published in 1934. According to him, India
needed to exercise its democratic capitalism (similar to USA) with emphasis of
industrialisation a shift of labour from agriculture set up to the
industries to double the national capital in one decade.

The FICCI Plan

In 1934, FICCI president proclaimed that the days of undiluted laissez-faire
were gone forever and for a backward country like India, a comprehensive plan
for economic development was needed. Being the leader of the capitalist class,
he caaled for a high powered National Planning Commision to coordinate
the whole process of planning so that country could make structural break
with the past and achieve its full growth potential. This thinking was further
reinforced by the Keynesian Ideas in the wake up of great depression, and the
new deal of Soviet experiment in national planning.

The Congress Plan

Though Gandhians and some business representatives were opposed to
centralised state planning, it was the initiative of INC president Subhash Chandra
Bose that the National Planning Committee (NPC) was set up in October 1938
under the chairmanship of Nehru.
The 15 member NPC has 29 sub-committee with a total of 250 members
which produced 29 volumes of recommendations. But due to break up of second
world war and Quit India movement, most of the members including chairman
were arrested and from 1940-45, the committee had only nominal existence.
Some of the important development after the NPC was set up are

 Post War Reconstruction Committee: In June 1941, the GoI formed a

Post-War Reconstruction Committee which considered various plans for the
reconstruction of the economy.
Consultative Committee of Economists: A Consultative Committee of
Economists were set up in 1941 under the chairmanship of Ramaswamy
Mudaliar. It was a think tank to advise the four post-war reconstruction
committees for executing national plan for the country.
Planning and Development Department: In 1944, the govt. created
Planning and Development Department under a separate member of
Viceroys Executive Council for organising planning work in the country
and coordinating it.
Advisory Planning Board: In October 1946, Advisory Planning board
was appointed by GoI to review the planning that had already been done
by British Govt. the work of National Planning Committtee and other plans
and proposals and to make recommendations regarding the future
machinery of planning and in regard to objectives and planning. The
Board, in its report of January 1947 expressed the opinion that the proper
development of large scale industries can only take place if political units,
whether in provinces or states agree to work in accordance to a common
plan. This process also induced a serious tendency of centralisation in the
India planning to which a number of states were to pose objections and
further straining the centre state relationship and time and again.

The Bombay Plan

Bombay plan also known as A Plan of Economic Development for India
was prepared by a cross section of eight Indias leading capitalists which
included the names like Purshotamdas Thakurdas, JRD Tata, GD Birla, AD Shrof
and John Mathai. This plan was published in 1944-45. The recommendations of
this plan were
1. Agrarian Restructuring: Abolition of all intermediaries (Zamindari,
Rayatwadi), minimum wages, guarantee of minimum or fair prices for
agricultural produces, cooperatives, credit and marketing support
2. Rapid Industrialisation: Both heavy capital goods and basic industries
3. Simultaneous development of the essential consumer goods
industries: but as a low key afair
4. Promoting Medium scale, Small scale and cottage industries: As
the source of greater employment which required lesser capital and lower
order of plants and machineries.
5. State to play an active role in the economy through planning,
controlling and overseeing the diferent areas of economy through state
ownership or through direct and extensive control over them
6. Social welfare: Rights to work and full employment, guarantee of a
minimum wage, greater state expenditure on housing, water and
sanitation, free education and healthcare, provision of utility services such
as electricity and transportation at a low cost (subsidized)
7. Reduce Inequalities: Through measures like progressive taxation,
prevention of concentration of wealth

The Gandhian Plan

This plan was formulated in 1944 by Sriman Narayan Agarwal and the
emphasis was given to promoting cottage and village level industries unlike NPC
and Bombay plan. This plan articulated a decentralized economic structure for
India with self-contained villages.
It is important to not here that Gandhian didnt agree with the views of
NPC or Bombay plan, particularly on issues like centralised planning,
dominant rule for state in the economy and the emphasis of
industrialisation being the major ones.
For Gandhi, the machinery, commercialization and the centralised state
power were the curse of industrialisation, thrust upon Indian people by European
colonialism. According to Gandhi, it was industrialisation itself, rather than ability
to industrialise that was the root cause of poverty in India.

Peoples Plan
This plan was proposed in 1945 by radical humanist leader MN Roy. The
plan was based on Marxist socialism and advocated the need of providing the
people with the basic necessities of life. Agriculture and Industrial sector,
both are equally highlighted by the plan. Many economists have attributed the
socialist leaning of Indian planning to this plan. The common minimum program
of the United Front Government of mid nineties and that of UPA of 2004 may also
be thought to have been inspired from this program.

The Sarvodaya Plan

This plan was formulated by famous socialist Jayaprakash Narayan in 1950
and inspired from Gandhian techniques of constructive works by the
community and trusteeship as well as the Sarvodaya concept of
Acharya Vinoba Bave. Like the Gandhian plan, emphasis was put on
agriculture, agriculture based small and cottage industries, self-reliance and
almost no dependence on foreign capital and technology, land reforms, selfdependent villages and decentralised participatory form of planning and
economic progress.

Some more background

Regarding planning and role of state in economic and social development
of India after independence, some of the ideas were clear
1. There should be a central planning, in which the state should plan an
active part for social and economic development to bring about a rapid
rise in the standards of living.
2. There should a control and licensing in order to direct investment into
desired channels and ensure equitable distribution.

3. While there should be balanced development in all sectors of the

economy, the establishment of basic industry was especially important. In
this, state-owned and state-managed enterprises have an important role.