National Planning Committee

Rudimentary economic planning, deriving from the sovereign authority of the state, was first initiated in India in 1938 by Congress President and Indian National Army supreme leader Netaji Subhash Chandra Bose, who had been persuaded by Meghnad Saha to set up a National Planning Committee. M. Visvesvaraya had been elected head of the Planning Committee. Meghnad Saha approached the great engineer and requested him to step down. He argued that planning needed a reciprocity between science and politics. M. Visvesvaraya generously agreed and Jawaharlal Nehru was made head of the National Planning Committee.The so-called “British Raj” also formally established Advisory Planning Board under K. C. Neogy that functioned from 1944 to 1946.

The Bombay Plan

The Bombay Plan is an economic plan published in 1944/1945 by eight leading Indian industrialists, proposed state intervention in the economic development of the nation after independence from the United Kingdom (which took place in 1947). Titled A Brief Memorandum Outlining a Plan of Economic Development for India, the signatories of the Plan were Jamshedji Ratanji Dadabhoy Tata, Ghanshyam Das Birla, Ardeshir Dalal, Sri Ram, Kasturbhai Lalbhai, Ardeshir Darabshaw Shroff, Sir Purshottamdas Thakurdas and John Mathai. The Plan went through two editions: the first was published in January 1944. This first edition became “Part I” of the second edition, published in 2 volumes in 1945 under the editorship of Purushottamdas Thakurdas. Although Jawaharlal Nehru, the first Prime Minister of India, did not officially accept the plan, “the Nehruvian era witnessed [what was effectively] the implementation of the Bombay Plan; a substantially interventionist state and an economy with a sizeable public sector.

People’s Plan

In the year 1945 M.N.Roy prepared the people’s plan.He gave equal importance to both agriculture and industries.This plan is also called “radical plan”. Although there was no explicit mention of any radical plan in post independence India the Left Democratic Front government of Kerala (1996-2001) headed by Sri. E.K. Nayanar tried to implement a People’s Plan proposing to involve the masses in the process of decision making in the field of local self-government. It was conceptualised by late E M S Namboodiripad, the foremost leader of the Communist Party of India (Marxist) in Kerala.Such a plan intended to involve people in planning at local government level in planning and implementation in accordance with priorities of an area. It included  involvement of the ward sabhas comprising the entire electorate of the ward of a local self-government institution such as a Panchayat, Municipality or Corporation.

National Income Committee

After independence, the Government of India appointed the National Income Committee in August, 1949 with Prof. PC. Mahalnobis as its Chairman and Prof. D.R. Gadgil and Dr. V.K.R.V. Rao as its two members so as to compile a national income estimates rationally on a scientific basis.

Planning Commission

After India achieved Independence, a formal model of planning was adopted, and accordingly the Planning Commission, reporting directly to the Prime Minister of India, was established on 15 March 1950, with Prime Minister Jawaharlal Nehru as the Chairman. Authority for creation of the Planning Commission was not derived from the Constitution of India or statute; it is an arm of the Central Government of India. In his first Independence Day speech in 2014, Prime Minister Narendra Modi announced his intention to dissolve the Planning Commission. It has since been replaced by a new institution named NITI Aayog.

Mahalanobis Strategy

The Mahalanobis strategy of industrialization and economic growth was given by Professor Prasanta Chandra Mahalanobis. He was the architect or designer of India’s Second Five Year Plan (1956-61. In his strategy he had adopted the simple two sector model of Soviet Planning of Feldman type. He gave top priority to investment goods, as they were crucial for further economic growth of India. The main attributes of the Mahalanobis strategy included: primacy to growth, trickle- down theory, focus on basic, core and large scale industries/ projects, commanding heights to public sector, limited role of the private sector with a licensing policy for enterprises, import substitution and protection to indigenous industries and promotion of small and cottage industries.

Plan Holiday

India embraced Five Year Plan since 1951 for its economic development. But there were interruptions in Five Year Plan Known as “plan holiday”. Plan holiday means the replacement of fiv year plans by annual plans during certain periods of economic history of India due to different kinds of economic and non-economic constraints. The first Five-Year Plan was launched in 1951, focusing mainly on development of the agricultural sector. Two subsequent Five-Year Plans were formulated before 1965, when there was a break because of the Indo-Pakistan conflict. Two successive years of drought, devaluation of the currency, a general rise in prices and erosion of resources disrupted the planning process and after three Annual Plans between 1966 and 1969, the fourth Five-Year Plan was started in 1969. The period 1966-69 is therefore called “plan holiday.”

The Eighth Plan could not take off in 1990 due to the fast changing political situation at the Centre, and the years 1990–91 and 1991–92 were treated as Annual Plans. We may therefore call the period 1991-92 as plan holiday. The Eighth Plan was finally launched in 1992 after the initiation of structural adjustment policies.

Garibi Hatao desh bachao 

Garibi hatao was  part of the 5th Five-Year Plan. Garibi Hatao desh bachao (“Abolish poverty, save the nation”) was the theme and slogan of Indira Gandhi’s 1971 election bid and later also used by her son Rajiv Gandhi. Since “trickle down” theory of economic growth could not effectively reduce poverty in India in the first three five year plans, Mrs. Indira Gandhi proposed a direct attack on poverty on the lines suggested by many economists and international think tanks at the time.  The slogan and the proposed anti-poverty programs that came with it were designed to give Gandhi an independent national support, based on rural and urban poor, which would allow her to by-pass the dominant rural castes both in and out of state and local government; likewise the urban commercial class. And, for their part, the previously voiceless poor would at last gain both political worth and political weight. The programme was conceived and funded by the central government and implemented with the help of state governments.  Garibi hatao led to initiatives like twenty point programme, programmes for development of small farmers and small sace industries etc. But about 4% of all funds allocated for economic development went to the three main anti-poverty programs, and so the effect of the programmes was not so remarkable on raising the standard of living of the poor.

Twenty Point Programme

The Twenty Point Programme was initially launched by Prime Minister Indira Gandhi in 1975 and was subsequently restructured in 1982 and again on 1986. With the introduction of new policies and programmes it was finally restructured in 2006 and it has been in operation. The Programmes and Schemes under TPP-2006 are in harmony with the priorities contained in the National Common Minimum Programme, the Millennium Development Goals of the United Nations and SAARC Social Charter. The restructured Programme, called Twenty Point Programme – 2006 (TPP-2006), was approved by the Cabinet on 5th October, 2006 and operated w.e.f 1.4.2007. The nomenclature of programs was changed and the components of the programme were covered under different programmes with the change of government. 20 Points as defined in 2006 included: Poverty eradication power to people, Support to farmers, Labour welfare, Food security, Clean drinking water, Housing for all, Health for all, Education for all, Welfare of SC/ ST/ OBC and minorities, Women welfare Child welfare, Youth Development, Improvement of slums, Environment protection and afforestation, Social security, Rural Roads, Energising of rural areas, Development of Backward areas, IT enabled and e-governance. The monitoring of the programme at the centre has been assigned to the Ministry of Statistics and Programme Implementation, Government of India.

Nationalisation of Banks

The Government of India issued an ordinance (‘Banking Companies (Acquisition and Transfer of Undertakings) Ordinance, 1969’) and nationalisedthe 14 largest commercial banks with effect from the midnight of 19 July 1969. These banks contained 85 percent of bank deposits in the country. A second dose of nationalisation of 6 more commercial banks followed in 1980. The stated reason for the nationalisation was to give the government more control of credit delivery. With the second dose of nationalisation, the Government of India controlled around 91% of the banking business of India. Later on, in the year 1993, the government merged New Bank of India with Punjab National Bank. It was the only merger between nationalised banks and resulted in the reduction of the number of nationalised banks from 20 to 19. Until the 1990s, the nationalised banks grew at a pace of around 4%, closer to the average growth rate of the Indian economy.

Hindu Rate of Growth

The Hindu rate of growth is a term, coined by prof Krishna Raj, referring to the low annual growth rate of the planned economy of India before the liberalisations of 1991, which stagnated around 3.5% from 1950s to 1980s, while per capita income growth averaged 1.3%. The word “Hindu” in the term was used by some early economists to imply that the Hindu outlook of fatalism and contentedness was responsible for the slow growth. Later economists reject this connection and instead attribute the rate to the Government of India’s protectionist and interventionist policies (Licence Raj), rather than to a specific religion or to the attitude of the adherents of a particular religion. Accordingly, some writers instead use the term “Nehruvian socialism”. Indian economy remained trapped in low growth syndrome till the end of the five year plan, and GDP growth remained well below per cent. India broke free of Hindu rate of growth in the 6th Five Year plan (1980-85) due to some elements of liberalization and growth of sunrise industries. Agricultural production also increased and India achieved self reliance in food grains production in 1985 with food production at 50 million tones.

The post Important Landmarks of India’s economic history: Part 1 appeared first on Civil Services Strategist.

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