1. The Development Challenge
– After Independence, India faced economic development as a key challenge.
– Development meant not just growth but also social & economic justice.
– Debate: Should India follow the capitalist model (West) or socialist model (USSR)?
2. Competing Ideas of Development
– Different meanings: Industrialists = factories, Adivasis = displacement, Consumers = cheap goods.
– Modernisation view: imitate industrial West (capitalism, science, rationality).
– Two global models: (i) Capitalist–liberal (US/Europe), (ii) Socialist (USSR).
– In India: admiration for Soviet planning across parties.
3. Planning Begins in India
– Consensus: Private initiative alone insufficient; state must lead.
– Bombay Plan (1944): industrialists favoured state intervention.
– Planning Commission (1950): chaired by PM, guided Five Year Plans.
– Aim: combine growth with justice; avoid concentration of wealth.
– Later replaced by NITI Aayog (2015).
4. Early Five Year Plans
First Plan (1951–56):
– Focus on agriculture, irrigation, land reforms (Bhakra Nangal Dam).
– Aim: raise savings, income.
Second Plan (1956–61):
– Architect: P.C. Mahalanobis.
– Focus: heavy industries, public sector, socialist pattern (Avadi, 1955).
– Achievements: steel, railways, electricity; Problems: food shortage, urban bias.
Third Plan (1961–66):
– Continued industry focus; crises from wars, food shortages.
– Result: Plan Holiday (1966–69).
5. Achievements & Limitations
Achievements:
– Base of public sector industries.
– Infrastructure expansion: dams, power, transport.
– Laid foundation of self-reliance.
Limitations:
– Neglect of agriculture → food shortage.
– Urban bias, rural poverty continued.
– Reliance on foreign aid/tech.
– Gap between targets and outcomes.
6. Political Contestation
– Inside Congress: resolution supported socialism, but govt encouraged private capital.
– Contradiction: state control vs liberalisation.
– Left wanted stronger state; Right wanted private freedom.
– Outcome: adoption of mixed economy (public + private).